Exhibit 10.1

THIRD AMENDMENT TO SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS
This Third Amendment (“Third Amendment”) to the January 17, 2006 Settlement
Agreement and Release of Claims (the “Agreement”), as amended pursuant to the
January 24, 2006 Amendment to Settlement Agreement and Release of Claims (“First
Amendment”) and the January 28, 2011 Second Amendment to Settlement Agreement
and Release of Claims (“Second Amendment”) is made and entered into as of the
last date of signature below (“Third Amendment Effective Date”), between Masimo
Corporation and Cercacor Laboratories, Inc. (formerly Masimo Laboratories, Inc.)
(hereinafter “Masimo”), and Medtronic Plc, Covidien LP (as successor to Tyco
Healthcare Group LP), Nellcor Puritan Bennett LLC, and Covidien Holding Inc. (as
successor to Covidien Inc.) (collectively “Nellcor”) (each individually a
“Party” or collectively the “Parties”). Capitalized terms used but not defined
herein shall have the meanings set forth in the Agreement.
RECITALS
A.    Whereas the Parties (or their predecessors) entered into the Agreement on
January 17, 2006;
B.    Whereas the Parties (or their predecessors) entered into the First
Amendment on January 24, 2006;
C.    Whereas the Parties (or their predecessors) entered into the Second
Amendment on January 28, 2011; and
D.    Whereas the terms of the Agreement, as thereafter amended by the First
Amendment and Second Amendment are hereby incorporated into this Third Amendment
mutatis mutandis;
E.    Whereas the Parties wish to further amend the Agreement as described
below.
AMENDMENT
Therefore in consideration of the mutual covenants and promises contained herein
and in the Agreement, and other good and valuable consideration, receipt and
sufficiency of which are hereby acknowledged, the Parties agree that Sections
1.1, 1.8, 1.9, 1.10, 4.1, 4.3, 5.1, 5.4, 8, 8.1, 8.2, 8.3, 16 and Exhibit 1 to
this Third Amendment are added and/or amended to read in their entireties as
follows:
Order of Precedent
Except as provided in this Third Amendment, all other terms and conditions of
the Agreement shall remain in full force and effect. In the event of any
conflict between this Third Amendment and the Agreement, this Third Amendment
shall control.

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Section 1.1 (amended)
1.1    “Affiliate” means, with respect to each Party, any legal entity that is,
directly or indirectly, controlling, controlled by, or under common control with
the Party at any time between the Third Amendment Effective Date and the
expiration of the Term. For purposes of this definition, an entity shall be
deemed to control another entity if it owns or controls, directly or indirectly,
more than fifty percent (50%) of the voting equity of the other entity (or other
comparable ownership interest for an entity other than a corporation).
Section 1.8 (new)
1.8    “Third Amendment Effective Date” has the meaning set forth in the
preamble of this Third Amendment.
Section 1.9 (new)
1.9    “Current Affiliate” means, with respect to each Party, any legal entity
that is, directly or indirectly, controlling, controlled by, or under common
control with the Party at the time of the Third Amendment Effective Date. For
purposes of this definition, an entity shall be deemed to control another entity
if it owns or controls, directly or indirectly, more than fifty percent (50%) of
the voting equity of the other entity (or other comparable ownership interest
for an entity other than a corporation).
Section 1.10 (new)
1.10    “Specified Masimo Products” means the products listed in Exhibit 1 to
this Third Amendment.
Section 4.1 (as amended)
4.1    Masimo and its Affiliates covenant not to sue Nellcor and/or its
Affiliates for infringement by Nellcor’s 06 Pulse Oximetry Products, and new
products Essentially Unchanged therefrom. For as long as the running royalties
are being paid, Masimo and its Affiliates further covenant not to sue Nellcor
and/or its Affiliates for the Nellcor pulse oximetry portion of future Nellcor
products, including oximetry software licensed to OEMs, (“Next Generation Pulse
Oximeters”) under Claims 17 or 18 of U.S. Patent Number 6,263,222, and
continuations and continuations-in-part, either with claims directed to or
covering the same subject matter. For as long as the running royalties are being
paid, Masimo and its Affiliates further covenant not to sue Nellcor and/or its
Affiliates for the Next Generation Pulse Oximeters under Claims 1, 10, 11, 22,
23 and 24 of U.S. Patent Number 6,157,850, and continuations and
continuations-in-part, either with claims directed to or covering the same
subject matter, provided that such Next Generation Pulse Oximeters (i) do not
calculate any physiological parameter other than pulse rate based on two or more
alternative calculations of that physiological parameter from the same signal,
(ii) do not calculate pulse rate based on three or more alternative calculations
of pulse from the same signal, (iii) do not include parameters other than Oxygen
Saturation, pulse rate, plethysmographic waveforms, blood pressure, cardiac
output, respiration rate, respiration effort, regional saturation

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(including cerebral and tissue), glucose, perfusion/pulse amplitude (not
displayed as a number or in real time on a scale with a number), temperature,
ECG, EEG, EMG, CO2 and, subject to the payment of additional royalties under
Section 5.1, total hemoglobin, and feature(s), function(s) or parameter(s) that
are generated from pulse rate, Oxygen Saturation, respiration rate, respiration
effort, blood pressure, cardiac output, EEG and/or regional saturation
calculations. Masimo also covenants not to sue for infringement any customer,
distributor, OEM, licensee, supplier or purchasing organization with respect to
the purchase, distribution, manufacturing (excluding sensors and accessories not
manufactured for Nellcor), marketing or use of the covenanted products or
Nellcor and/or its Affiliates’ products Essentially Unchanged therefrom as
described in this Section 4.1. The covenants of this Section 4.1 do not extend
to any products that are permitted or intended for use, with any sensors
(including non-Nellcor sensors manufactured by Nellcor for another company)
other than Nellcor sensors. If Masimo asserts that a Nellcor product includes a
change set forth in Sections 1.2(ii)-(v) that is covered by a patent of Masimo
not proven invalid or unenforceable by a court of competent jurisdiction, the
covenants of this Section 4.1 shall apply to such Nellcor product excluding such
change.
Section 4.3 (as amended)
4.3    Nellcor and its Affiliates covenant not to sue Masimo and/or its
Affiliates for infringement by Masimo’s products commercially available as of
March 14, 2011, including any updates to those products made between March 14,
2011 and the Third Amendment Effective Date, the Specified Masimo Products, and
new products Essentially Unchanged therefrom. Nellcor and its Affiliates further
covenant not to sue Masimo and/or its Affiliates for infringement of any new
disposable and multisite versions of the reusable Rainbow sensors and associated
cables that were commercially available as of March 14, 2011, and new products
Essentially Unchanged therefrom, provided that such sensors are not configured
to be compatible with Nellcor’s pulse oximeters, where the compatibility between
pulse oximeter and the sensor (i.e., lock and key) is covered by a Nellcor
patent not proven invalid or unenforceable by a court of competent jurisdiction.
Nellcor and its Affiliates further covenant not to sue Masimo and/or its
Affiliates for infringement due to any changes to such products above to enable
such products to include the parameters of Fractional Saturation,
carboxyhemoglobin, methemoglobin, total hemoglobin, hematocrit, bilirubin and/or
glucose. Nellcor’s and its Affiliates covenants include a covenant not to sue
Masimo and/or its Affiliates for infringement for (i) improvements (except
improvements to sensors) to precision and accuracy of any parameter in such
products available as of March 14, 2011, and Fractional Saturation, total
hemoglobin, hematocrit, bilirubin and/or glucose, except to the extent such
improvement is covered by any Nellcor patent (or patent exclusively licensed to
Nellcor or exclusively licensed to Nellcor for the relevant field of use) not
found to be invalid or unenforceable by a court of competent jurisdiction, the
substance of which is filed for the first time after March 14, 2011 and not
having a priority claim to a date or entitled to priority from a date before
such date and (ii) any other improvement to the covenanted products, except to
the extent such other improvement is covered by any Nellcor patent (or patent
exclusively licensed to Nellcor or exclusively licensed to Nellcor for the
relevant field of use) not found to be invalid or unenforceable by a court of
competent jurisdiction. Nellcor and its Affiliates also covenant not to sue for
infringement any customer, distributor, OEM, licensee, supplier or purchasing
organization with respect to the purchase, distribution, manufacturing
(excluding sensors and accessories not manufactured for Masimo),

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marketing or use of the covenanted products or Masimo and/or its Affiliates’
products Essentially Unchanged therefrom as described in this Section 4.3. If
Nellcor asserts that a Masimo product includes a change set forth in Sections
1.2(ii)-(v) that is covered by a patent of Nellcor not proven invalid or
unenforceable by a court of competent jurisdiction, the covenants of this
Section 4.3 shall apply to such Masimo product excluding such change. A list of
the Masimo products commercially available as of March 14, 2011 is attached as
Exhibit 2 to the Second Amendment.
Section 5.1 (as amended)
5.1    Nellcor agrees to pay Masimo Corp. a 13% running royalty based on its and
its Affiliates Pulse Oximetry Revenue occurring on or after February 1, 2006
through and including March 14, 2011. Effective March 15, 2011, the running
royalty shall be reduced to 7.75%, provided, however, that the running royalty
shall increase from 7.75% to 11.75% commencing on the date that Nellcor first
sells any pulse oximetry product that includes the parameter of total
hemoglobin. Should Nellcor sell such a device including the parameter of total
hemoglobin, the verification of that first shipment date will be included in the
auditing procedures set for in the Agreement.
Nellcor will pay an additional 7% running royalty on its and its Affiliates
Pulse Oximetry Revenue for calendar year 2006. Nellcor will pay an additional 2%
running royalty on its and its Affiliates Pulse Oximetry Revenue for calendar
year 2007. Nellcor will pay an advance royalty of $66,230,000 on or before
January 19, 2006 (the “Payment Date”) for the 2006 royalty as provided in
Section 2. The Parties agree that Nellcor has paid the foregoing additional 7%
and 2% running royalties and the advance.
Nellcor agrees to pay Masimo Corp. a 7.75% running royalty based on Nellcor’s
and its Affiliates’ Pulse Oximetry Revenue occurring on or after the Third
Amendment Effective Date through and including October 6, 2018 (subject to the
increase for total hemoglobin described above). After October 6, 2018,
notwithstanding any other provision in this Agreement, no further royalties
shall be due under this Agreement, and the covenant of Section 4.1 shall be
fully paid-up, perpetual, irrevocable, and royalty free.
Section 5.4 (as amended)
5.4
Section 5.4 is deleted in its entirety.

Section 8 (as amended)
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Section 8 is deleted in its entirety.

Section 8.1 (new)
8.1    Mutual No Challenge Agreement. During a term beginning on the Third
Amendment Effective Date, and ending on December 31, 2019 (“Standstill Term”),
each Party and its Affiliates agree that they will not assert, or induce, assist
or permit a third party to assert, in any litigation or administrative
proceeding anywhere in the world, including, without limitation, any inter
partes review before the Patent Trial and Appeal Board of the U.S. Patent Office
that any

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patent or other intellectual property rights of the other Party, its Current
Affiliates, or their exclusive licensors, are invalid, unpatentable or
unenforceable (except a Party or its Affiliate may challenge patents or
intellectual property rights that are asserted or threatened against the Party
or its Affiliate by the other Party or its Current Affiliate). Each Party agrees
that it will not permit its agents, including law firms and attorneys, to
utilize work product prepared by or on behalf of the Party to assist such a
challenge (whether such challenge is made by a Party or non-party to this
Agreement), will take all necessary steps to ensure compliance by all such
agents, and will remain fully responsible for compliance by all such agents.
Notwithstanding the foregoing, this no challenge agreement does not apply to
validity challenges made by a Party against any entity with which the Party is
already engaged in such validity challenge as of the Third Amendment Effective
Date, even if such entity is or becomes an Affiliate.
Each Party acknowledges that any breach of this Section 8.1 by it will cause
irreparable harm to the other Party, without adequate remedy at law, and that
each Party is entitled to seek injunctive relief and any other remedy available
at law or in equity in the event of any breach of this Section 8.1.
Section 8.2 (new)
8.2    Patent Litigation Standstill.     During the Standstill Term, each Party
and its Affiliates agree that they will not assert any claim of patent
infringement (whether direct or indirect) against the other Party or its Current
Affiliates based on products of that Party or its Current Affiliates that are
commercially available as of the Third Amendment Effective Date, and no damages
will accrue for any alleged patent infringement by these products during the
Standstill Term, unless and until the Parties’ respective CEO’s have discussed
and attempted to resolve the issue. This standstill agreement also applies to
claims during the Standstill Term against the other Party’s or its Affiliates’
customer, distributor, OEM, licensee, supplier or purchasing organization based
on products of that Party or its Affiliates that are commercially available as
of the Third Amendment Effective Date. Notwithstanding the foregoing, this
standstill agreement does not apply to claims of patent infringement by a Party
against any patient monitoring products (e.g., monitors and sensors) sold by any
non-Party entity acquired by the other Party after the Third Amendment Effective
Date. Notwithstanding the foregoing, this standstill agreement also does not
apply to sensors, cables, adapters or consumables manufactured or sold by a
Party or Affiliate that are configured to operate with the other Party’s or its
Affiliates’ products.     
Section 8.3 (new)
8.3    Requested Withdrawal of IPR. Within three (3) days of the Third Amendment
Effective Date, the Parties will jointly request withdrawal of IPR IPR2016-00056
(against U.S. Patent No. 7,496,393).
Section 16 (as amended)
16    Term: The term of this Agreement will begin upon the Effective Date and
terminate on December 31, 2019. Notwithstanding any other provision in this
Agreement, and for the

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avoidance of doubt, the covenants of Sections 4.1 and 4.3 shall survive
termination of this Agreement.
Press Release and Confidentiality
The Parties agree to prepare a mutually agreeable press release regarding this
Third Amendment. The confidentiality provisions of the Agreement apply to this
Third Amendment.
Execution in Counterparts
This Third Amendment may be executed in counterparts with the same effect as if
all Parties have signed the same document and each such executed counterpart
shall be deemed to be an original instrument. All executed counterparts of this
Third Amendment together shall constitute one and the same instrument.

[Signatures on next page]

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In Witness Whereof, the Parties have duly authorized and caused this Third
Amendment to Settlement Agreement and Release of Claims to be executed:
 
 
 
 
MASIMO CORPORATION
Dated:
September 1, 2016
 
 
By:
/s/ THOMAS S. MCCLENAHAN
 
 
 
 
Name:
Thomas S. McClenahan
 
 
 
 
Title:
Executive Vice President & General Counsel
 
 
 
 
 
 
 
 
 
 
 
CERCACOR LABORATORIES, INC.
Dated:
September 1, 2016
 
 
By:
/s/ GERRY E. HAMMARTH
 
 
 
 
Name:
Gerry E. Hammarth
 
 
 
 
Title:
Chief Financial Officer
 
 
 
 
 
 
 
 
 
 
 
MEDTRONIC PLC
Dated:
September 1, 2016
 
 
By:
/s/ KEYNA P. SKEFFINGTON
 
 
 
 
Name:
Keyna P. Skeffington
 
 
 
 
Title:
Vice-President and Assistant Secretary
 
 
 
 
 
 
 
 
 
 
 
COVIDIEN LP
Dated:
September 1, 2016
 
 
By:
/s/ KEYNA P. SKEFFINGTON
 
 
 
 
Name:
Keyna P. Skeffington
 
 
 
 
Title:
Vice-President and Secretary
 
 
 
 
 
 
 
 
 
 
 
NELLCOR PURITAN BENNETT LLC
Dated:
September 1, 2016
 
 
By:
/s/ KEYNA P. SKEFFINGTON
 
 
 
 
Name:
Keyna P. Skeffington
 
 
 
 
Title:
Vice-President and Assistant Secretary
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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COVIDIEN HOLDING, INC.
Dated:
September 1, 2016
 
 
By:
/s/ KEYNA P. SKEFFINGTON
 
 
 
 
Name:
Keyna P. Skeffington
 
 
 
 
Title:
Vice-President and Secretary
 
 
 
 
 
 
 

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Exhibit 1 to the Third Amendment

Specified Masimo Products

Eve newborn screening app for Radical-7 (referred to as “CCHD Mode”)
DCI-mini sensor
Fractional oxygen saturation parameter (SpfO2)
Universal ReSposable pulse oximetry sensor (disposable adhesive sensor with
reusable cable)
In Vivo Adjustment on the Radical-7 (adjustment of SpO2, SpHb, SpCO, and SpMet
values by a clinician on-site to calibrate to a reference value)

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