Document:

Exhibit
10.1

 

March 22, 2006

 

Dr. Juergen W. Gromer

President and Vice Chairman

Tyco Electronics

2901 Fulling Mill Road

Middletown, Pa. 17057

 

Dear Juergen:

 

As you know, Tyco International Ltd. (which,
along with its subsidiaries and affiliated companies will be referred to as “Tyco”)
recently announced that it intends to separate its business operations into
three publicly-traded stand-alone companies. 
As part of this plan, the Tyco Electronics business will be separated
into a publicly-traded stand-alone company (the “Transaction”).

 

You currently serve as President and Vice
Chairman of Tyco Electronics and your relationship with Tyco is governed by two
agreements: one with Tyco Electronics Logistics AG effective October 1, 1999 and
the other with Tyco Electronics AMP GmbH, effective February 27, 1990 and April
10, 1990 (the “Services Agreements”).  Recognizing
the critical role that you will play in the future success of the Tyco
Electronics business, particularly after it is separated into a stand-alone
company (which stand-alone company and its subsidiaries and affiliated
companies will be referred to as “Electronics” on and after the effective date of
the Transaction), the Board of Directors of Tyco recently approved a special
retention arrangement for you.  The terms
of the retention arrangement are described below in this letter agreement (the “Agreement”).

 

1.             Retention
Award

 

1.1.

You will be eligible to receive a special one-time
bonus (the “Retention Award”) if you continue to provide services to Electronics
under the Services Agreements ( as such Agreements may be amended or replaced
in the future from time to time) until the second anniversary of the date on
which the Transaction is effective (the “Closing Date”).  No Retention Award will be paid if (i) you
terminate your services with Tyco or Electronics, as applicable, by notice prior
to the Retention Payment Date (as defined below) or as a result of your
resignation (or other similar notice of termination is provided by you), (ii)
notice of termination is given by Tyco or Electronics, as applicable, for Cause,
(iii) Tyco publicly announces its intent not to consummate the Transaction.

 

1.2

For purposes of this Agreement, Cause means (i)
your substantial failure or refusal to perform the duties and responsibilities
of your job as required by Electronics, (ii) violation of any fiduciary duty owed
to Electronics, (iii) conviction of a crime, (iv) dishonesty, (v) theft, (vi) continued
or severe violation of an Electronics’ rule or policy, or (vii) other egregious
conduct, that has or could have a serious and detrimental impact 

 

 

on Electronics and its employees.  The Compensation Committee of the Board of
Directors of Tyco or Electronics, as applicable, in its sole and absolute
discretion, shall determine whether the notice of termination is for reason of Cause.

 

The Retention Award will be paid in a lump
sum in an amount equal to two times your base salary and target annual bonus,
both as in effect as of the Retention Payment Date.  The payment will become payable at the end of
the month in which the second anniversary of the closing of the Transaction takes
place (“Retention Payment Date”.)

 

1.3

If your services are terminated by Tyco or
Electronics, as applicable, before the Retention Payment Date (i) for reasons
other than Cause or (ii) as a result of your death or disability, then you or
Estate, as applicable, will be entitled to receive the Retention Award which
will be paid not later than 30 days after your termination date. The amount of
any severance, notice pay, termination indemnity or other similar amount
payable by Tyco or Electronics, as applicable, as a result of your termination
under any arrangement, including without limitation, your Services Agreement,
any Tyco or Electronics severance plan or similar termination arrangement, or
as otherwise mandated under applicable law, will reduce the amount of the
Retention Award.  “Disability” shall mean
that you have a permanent and total incapacity that prevents you from engaging
in any employment or providing any services for Tyco or Electronics, as
applicable, for physical or mental reasons. 
A permanent disability shall be deemed to exist if you meet the
requirements for disability benefits under the Tyco or Electronics long-term
disability plan, as applicable, in which you participate, or if you do not
participate in such a plan, then under the requirements for disability benefits
under the social security law or similar laws then in effect in the country in
which you are employed.

 

1.4

Any Retention Award amounts payable hereunder
shall be paid in the same manner as your base salary payments and Tyco or Electronics,
as applicable, shall have the right to withhold all applicable taxes and other
required withholding amounts.

 

2.             Continuation
of Employment Contract

 

Except as otherwise provided herein or as
otherwise subsequently revised in writing, the terms and conditions of the
Services Agreements shall remain in full force and effect and shall also remain
in full force and effect after the Closing Date. You hereby acknowledge that the
Services Agreements are the only agreements that govern the terms of your services
relationship with Tyco and its subsidiaries and affiliates and that there are
no other agreements between you and Tyco or any of its subsidiaries or
affiliates under which you provide services as an employee, managing director
or independent contractor. You waive any and all rights and entitlements you
may have against any other Tyco affiliates. The Tyco affiliates are entitled to
accept this waiver at any point of time in the future. You acknowledge —
subject to the future acceptance of Tyco Electronics Logistics AG and Tyco
Electronics AMP GmbH - that unless terminated at an earlier date in accordance
with the terms of the Services Agreements, your employment and other 

 

 

services with Electronics shall terminate
upon the earlier of (i) the last day of the month in which you attain age 65,
or upon your retirement before your attainment of age 65.  You hereby agree to provide Electronics with
at least 60 days written notice of your intent to retire if you should do so
before your attainment of age 65

 

  3.           Effect on Benefit Plans

 

You agree that your Retention Award shall not
be treated as compensation for purposes of computing or determining any benefit
under any pension, savings, severance, bonus/incentive, insurance, or other
employee compensation or benefit plan of Tyco or its subsidiaries and
affiliates or Electronics.

 

4.             Choice
of Law

 

This Agreement shall be governed by the laws
of New York.   In case of any dispute, the Courts of New York
shall be competent for the decision.

 

5.             Assignment

 

Neither this Agreement nor any rights or
obligations created herein may be assigned or delegated by you.

 

6.             Severability

 

If any provision of this Agreement is
declared invalid, illegal or unenforceable by any court of competent
jurisdiction, all of the remaining provisions of this Agreement shall continue
in full force and effect.

 

7.             Successor

 

This entire Agreement shall be binding on any
successor to Tyco, including without limitation, Electronics.

 

8.             Complete
Agreement

 

Except as otherwise provided herein, this
Agreement is the complete agreement between you and Tyco with respect to the
subject matter contained herein and will supersede or replace all prior
agreements or understandings between the parties.

 

9.             Amendments

 

No modification or amendment hereof shall be
valid or binding on either party unless made in writing and signed by both
parties or by their duly authorized officers or representatives.

 

***

 

 

 

Please review this Agreement carefully.  If you are in agreement with the foregoing,
please signify your acceptance by signing and dating both copies of this
Agreement in the spaces provided and returning one copy to me.

 

	
   

  	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Edward D. Breen

  
	
   

  	
   

  	
   

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
  Tyco International Ltd.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Dr. Juergen W. Gromer

  
	
   

  	
   

  	
   

  	
  Name: Dr. Juergen W.
  GromerExhibit
10.2

 

SETTLEMENT
AGREEMENT AND RELEASE OF CLAIMS

 

This Settlement Agreement
and Release of Claims (the “Agreement”) is made and entered into this 17th day
of January, 2006, between Masimo Corporation and Masimo Laboratories, Inc.
(hereinafter “Masimo”), and Nellcor Puritan Bennett, Inc., Mallinckrodt, Inc,
Tyco Healthcare Group LP, Tyco International Ltd, and Tyco International (US)
Inc.  (collectively “Nellcor”) (each
individually as a “Party” or collectively the “Parties”).

RECITALS

A.            Whereas the Parties are
involved in litigation in the United States District Court for the Central
District of California, Civil Action Nos. CV 00-6506 MRP (AJWx) and CV 03-0603
MRP (AJWx) alleging claims under federal patent laws (the “Patent Litigation”);

B.            Whereas the Parties are involved in litigation in the
United States District Court for the Central District of California, Civil
Action No. CV 02-4770 MRP (AJWx) alleging claims under federal antitrust laws
(the “Antitrust Litigation”); and

C.            Whereas Masimo
and Nellcor desire to settle fully and finally all claims and disputes between
the parties other than the Antitrust Litigation.

AGREEMENT

Now, therefore, in
consideration of the mutual covenants and promises herein contained and other
good and valuable consideration, receipt and sufficiency of which are hereby
acknowledged, and to avoid the expense of further litigation, the Parties
covenant and agree as follows:

1                              Definitions:

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.  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).

1.2                     “Essentially Unchanged” means no changes
other than (i) immaterial changes to the software for  the correction of bugs or implementation of a
software translation (e.g., a recompile due to processor change), and /or (ii)
hardware changes that are not covered by any of the other Party’s patents not
proven invalid or unenforceable by a court of competent jurisdiction, and/or
(iii) software changes for size or power utilization, industrial design, user
interface and connectivity that are not covered by any of the other Party’s
patents not proven invalid or unenforceable by a court of competent
jurisdiction, and/or (iv) changes consisting of the addition of the parameters
of 

 

1

 

blood pressure, respiration rate, temperature, ECG, and CO2 that are
not, alone or in combination with other new features, functions or parameters,
covered by any of the other Party’s patents not found invalid or unenforceable
by a court of competent jurisdiction and/or (v) changes consisting of the
addition of new feature(s), function(s) or parameter(s) that are generated from
pulse rate and/or Oxygen Saturation calculations and that are not, alone or in
combination with other new features or functions or parameters, covered by any
of the other Party’s patents not found invalid or unenforceable by a court of
competent jurisdiction.  For purposes of
this Section 1.2, “other Party’s patents” includes (a) patents that are
exclusively licensed to such Party and (b) with respect to a specified field of
use, patents that are exclusively licensed to such party for such field of use.

1.3                      “Pulse Oximetry Revenue” means Nellcor’s and
its Affiliates’ net pulse oximetry revenue for products shipped, service and
licenses to purchasers in the United States. 
Net Pulse Oximetry Revenue is calculated in accordance with GAAP,
consistent with how such calculations were made in the past by Nellcor, as
provided to Masimo in accordance with Section 3.1.  Nellcor has not and will not direct revenue
away from the United States and to international markets in order to avoid or
reduce paying royalties under this Agreement. 
For multiparameter devices (i.e., devices including parameters or
therapeutic functions other than pulse rate and Oxygen Saturation), the per
unit portion of the net revenue attributable to pulse oximetry revenue will be
set at 100% of the then current year average net sales price of Nellcor’s stand
alone pulse oximetry monitors, but not less than $1500.

1.4                      “Masimo Patents” means U.S. Patent Nos. 6,263,222, 6,157,850,
and 5,769,785.

1.5                     “06 Pulse Oximetry Products” means Nellcor’s pulse
oximetry products (including oximetry software licensed to OEMs) that use the
06 algorithm as shown to Masimo during November 2005 in the due diligence
process of the Memorandum of Understanding dated October 20, 2005.  A list of the 06 Pulse Oximetry Products is
set forth in Exhibit C.

1.6                      “Oxygen Saturation” is as defined in ISO
9919:2005 section 3.25 (definition of SpO2, which is an estimate of SaO2 or the
true functional saturation).

1.7                     “Fractional Saturation” is as defined in ISO
9919:2005 section 3.8 (definition of fractional oxyhaemoglobin FO2Hb), or
HbO2/(Hb + HbO2 + HbCO + HbMet), or SpO2 — (SpCO and/or SpMet), (including
using the ratio of ratios for each of the hemoglobins and then converting to
fractional saturation), and any approximations thereof.

 

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2                              Settlement Payment:

2.1                     By January 19,
2006, Nellcor shall deliver a non-refundable payment by wire transfer to Masimo
Corp. in the amount of Three-Hundred Thirty Million Four-Hundred-Eighty
Thousand Dollars ($330,480,000).  This
amount is comprised of Two-Hundred-Fifty-Eight Million ($258,000,000) for
infringements by 04, 05 and 05ci sales through December 31, 2005; Six Million
Two Hundred Fifty Thousand ($6,250,000) for pulse oximetery sales from January
1, 2006 through January 31, 2006; and Sixty-Six Million Two-Hundred- Thirty
Thousand ($66,230,000) as an advance royalty payment for the period from
February 1, 2006 through December 31, 2006. 
Late payments shall accrue interest at 10% per annum.

2.2                     The Settlement
Payment in Section 2.1 is based upon unit shipments of Nellcor 04, 05, 05ci and
06 pulse oximeters and pulse oximeter boards for January 2006 of 9,000
units.  No later than April 1, 2006,
Nellcor will provide actual unit volumes for sales of such pulse oximeters and
pulse oximeter boards for January 2006 for the same geographic scope presented
at the trial.  If Nellcor shipped more
than 9,000 units during that period, it shall pay to Masimo an additional
amount as follows: the number of such units over 9,000 shall be calculated (“Overage
Units”) and, for each 06 unit shipped, up to the number of Overage Units,
Nellcor will pay 20% of the Pulse Oximetry Revenue for such units, and if there
are any Overage Units in excess of the number of 06 units shipped, Nellcor will
pay $580 per unit for each such unit.  If
Nellcor shipped less than 9,000 units Masimo will credit Nellcor $580 per unit
for each unit under 9,000 toward future royalties due.  The number of units shipped for January 2006
provided by Nellcor will be subject to the audit provisions of Section 6 below.

3                              Representations and Warranties:

3.1                                 In advance of
execution of this Agreement, Nellcor has provided to Masimo’s counsel (under
attorney-eyes only confidentiality and to Masimo’s CEO and CFO) documents
sufficient to show: (i) unit shipments of 04, 05, and 05ci pulse oximeter
products between June 2004 through October 2005 consistent with the damages
calculation during the Patent Litigation; and (ii) Pulse Oximetry Revenue for
the consecutive calendar quarters ending December 31, 2001 through December 31,
2005.  Nellcor states that its good faith
estimate for its Pulse Oximetry Revenue in 2006 is approximately $350
million.  Nellcor represents and warrants
that the information provided under this Section 3.1 is materially accurate and
complete based upon the information in the books and records of Nellcor.

3.2                                 Nellcor
represents and warrants that the 06 Pulse Oximetry Products commercially
released will be the same as the product reviewed by Knobbe, Martens, Olson
& Bear in November 2005 and will use the same 

 

3

 

specification, circuit
diagrams and source code provided under section 4.2.  Further, Nellcor represents and warrants that
the 06 Pulse Oximetry Products do not (i) contain closed loop adaptive filters,
(ii) calculate Oxygen Saturation based on two or more alternative calculations
of Oxygen Saturation, ratio of ratios or a representative indication or value
for Oxygen Saturation from the same signal, (iii) calculate pulse rate based on
three or more alternative calculations of pulse rate from the same signal, or
(iv) measure physiological parameters other than pulse rate, Oxygen Saturation,
plethysmographic waveforms, ECG, pulse amplitude (not displayed as a number or
in real time on a scale with a number), blood pressure, respiration rate,
temperature, ECG and CO2.  Masimo
acknowledges for purposes of this Section 3.2 that an ECG signal and an optical
signal are not the same signal.  Nellcor
acknowledges that for the purposes of this Section 3.2, an optical signal is
considered the same signal regardless of the number of wavelengths detected.

3.3                                 Nellcor
represents that none of its current sensors, cables which connect the sensor to
the pulse oximeters (including OEM boards), or O6 Pulse Oximetry Products are
configured to be compatible with any current Masimo pulse oximeters (including
OEM boards) or sensors.

3.4                                 Masimo
represents that none of its current sensors, cables which connect the sensor to
the pulse oximeter (including OEM boards), or products listed in exhibit D are
configured to be compatible with any current Nellcor OxiMax pulse oximeter
(including OEM boards) or Oximax Sensors, except with respect to the RCAL
compatibility (including in OxiMax sensors). 
Masimo further represents (i) that Masimo’s currently commercially
available oximeters do not store the physiological patient data collected
during monitoring in a memory on the sensor, and (ii) that Masimo’s currently
commercially available oximeters do not store in a memory on the sensor,
sensor-specific user troubleshooting messages for optimal sensor
placement.  For purposes of clarity,
storing the sensor type or ID and displaying the sensor type when the sensor is
connected to the oximeter is not storing a sensor-specific user troubleshooting
message.

4                             Covenants Not to Sue

4.1                     Masimo and it
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.  This covenant also extends to
the potential change referenced in Section 5.1. 
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 

 

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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 and (ii) do not calculate pulse rate based on
three or more alternative calculations of pulse from the same signal, and (iii)
do not include parameters other than Oxygen Saturation, pulse rate,
plethysmographic waveforms, pulse amplitude (not displayed as a number or in
real time on a scale with a number), blood pressure, respiration rate,
temperature, ECG and CO2 and feature(s), function(s) or parameter(s) that are
generated from pulse rate and/or Oxygen Saturation calculations.  If Nellcor succeeds in reducing royalties
under Section 5.1, the same condition to reduce the royalty applies to Next
Generation Pulse Oximeters in order for the royalty reduction to apply.  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.

4.2                     Nellcor shall
deliver one Nellcor pulse oximeter containing 06 technology to Masimo’s
lawyers, and represents that this has the same technology and performance as
that disclosed to Masimo’s lawyers and tested during November 2005.  Nellcor also shall place in an independent,
third party escrow on mutually agreeable terms the corresponding
specifications, circuit diagrams and source code for such pulse oximeter, as
evidence of the 06 technology disclosed to Masimo, which Nellcor represents and
warrants will be the same as that disclosed to Masimo’s lawyers and tested
during November 2005.  Masimo’s lawyers
may provide the pulse oximeter to Masimo on or after January 10, 2006.

4.3                     Nellcor and its
Affiliates covenant not to sue Masimo and/or its Affiliates for infringement by
Masimo’s pulse oximetry and Rainbow SET products commercially available as of
January 17, 2006 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 currently commercially available reusable Rainbow
sensors and associated cables, and new products Essentially Unchanged
therefrom, provided that such sensors are not configured to be compatible 

 

5

 

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 January 17, 2006, 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 the January 17, 2006 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), marketing or use of the covenanted products or
Masimo and/or its Affiliates products Essentially Unchanged therefrom as
described in this Section 4.3.  Masimo
will use good faith efforts to compile a list of pulse oximetry and Rainbow SET
products commercially available as of January 17, 2006 and provide such list to
Nellcor’s lawyers (under attorney-eyes only confidentiality and to David Sell,
Brian Earp, and Paul Mannheimer), and attached hereto as Exhibit D.

4.4                     The covenants
of Sections 4.1 and 4.3 extend to proprietary rights that are exclusively
licensed to the covenanting party, or, with respect to a specified field of
use, patents that are exclusively licensed to the covenanting party for such
field of use, including any right to control the institution or maintenance of
litigation.  Nellcor and Masimo will not
assist any of its licensors in enforcing proprietary rights against the other
party, except to the extent required by law.

5                              Ongoing Royalties.

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.  Nellcor will pay an additional 7% running
royalty on its and its Affiliates 

 

6

 

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. 
On or after January 1, 2007, the 13% royalty will be reduced to 10%,
plus the additional 2% for 2007, in the event that Nellcor establishes that a
proposed change to the 06 Pulse Oximetry Products and new products Essentially
Unchanged therefrom (and the Next Generation Pulse Oximeters) would result in
not calculating any physiological parameter based on two or more alternative calculations
for that parameter, or a representative indication or value for that parameter,
from the same signal, and that proposed change is then implemented in such
products (and the prior products are no longer being made or sold).  In the event of a dispute involving whether a
proposed change would accomplish this result, Nellcor shall continue to pay the
13% royalty rate, plus the additional 2% for 2007, until such dispute is
resolved.  For purposes of this Section
5.1, Masimo acknowledges that an ECG signal and an optical signal are not the
same signal.  For the purposes of this
Section 5.1, Nellcor acknowledges that an optical signal is considered the same
signal regardless of the number of wavelengths detected.

5.2                     For the 2006
advance royalty payment, if Nellcor’s Pulse Oximetry Revenues exceed
$320,833,000 from February 1, 2006 through December 31, 2006, then Nellcor will
pay 17% of the revenue over this amount by March 30, 2007.  If Nellcor’s Pulse Oximetry Revenues are less
than $320,833,000 for this same time period, then Nellcor will receive a credit
of 17% of the revenue under this amount to be applied to future royalty
payments.  Nellcor shall deliver to
Masimo within 60 days of the end of each quarter, an accounting of Pulse
Oximetry Revenue by product category.

5.3                     Running
royalties accruing on January 1, 2007 and thereafter shall be paid quarterly
within 60 days of the end of each calendar quarter.  An accounting of revenue by product category
shall be included with each payment. 
Late payments will accrue interest at 10% per annum.

5.4                     On or after
March 14, 2011, upon at least sixty (60) days written notice to Masimo, Nellcor
may terminate on a prospective basis all protection or rights under Section
4.1,(but Nellcor will retain the right to provide sensors and service for all
previously sold products), and Nellcor will no longer be obligated to pay
royalties under this section.  Masimo
maintains all rights to assert its patents against Nellcor’s and/or its
Affiliates’ pulse oximetry products that may be manufactured or sold after
termination.  All other provisions of
this agreement remain effective.

5.5                     Any dispute
between the Parties arising pursuant to Section 5.1, if not resolved by the
Parties after at least two weeks of good faith discussions 

 

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beginning upon one Party providing the other Party notice of the
dispute, such discussions to include the most senior executive of Tyco
Healthcare and Masimo, shall be resolved by binding and non-appealable
arbitration before a member of JAMS, applying CCP 1283.05, agreed to by the
Parties (agreement not unreasonably withheld or delayed) with a final decision
within two months of initiation of the arbitration proceeding.

6                              Audit Rights. Nellcor agrees to maintain records sufficient to
verify the calculation of all Pulse Oximetry Revenue for a period of two (2)
years from the end of the calendar year in which the royalties are paid by
Nellcor.  In addition, Nellcor agrees to
maintain records sufficient to verify the calculation of all Pulse Oximetry
Revenue for calendar years 2004 and 2005 until December 31, 2007.  Nellcor agrees that Masimo, as set forth
below, shall have the right to have the books and records of Nellcor inspected,
at Masimo’s expense, to verify the accuracy of Nellcor’s accounting reports,
but such right shall not extend beyond the period of two (2) years from the end
of the calendar year to be audited.  Such
inspection shall be carried out by an independent representative or accountant
(non-employee) of Masimo agreed upon by Masimo and Nellcor (which agreement
shall not be unreasonably withheld) who shall be bound by a confidentiality
agreement.  Such representative or
accountant shall report to Masimo and Nellcor whether the reports and payments
made by Nellcor were correct or, if not correct, the amount of
discrepancy.  Masimo agrees to hold all
reports in confidence and to impose a similar requirement of confidentiality on
any representative or accountant appointed hereunder.  Masimo and any such representative or
accountant shall not use any information gained from such inspection for any
purpose other than determining and enforcing Masimo’s rights under this
Agreement.  No more than one inspection
shall be permitted during each calendar year. 
In the event that any such inspection leads to a determination that
Nellcor underpaid the royalties due to Masimo, Nellcor shall reimburse Masimo
such underpayment within fifteen (15) days of the date of the report.  Late payments and underpayments will accrue
interest at 10% per annum.  If royalties
due Masimo were underpaid by ten percent (10%) or more, Nellcor shall also
reimburse Masimo for the reasonable fees and expenses of the independent
representative/accountant for the inspection. 
In the event of an overpayment of Earned Royalties, then Masimo shall
credit Nellcor such overpayment, and such credit will be reflected in Nellcor’s
next due royalty payment(s).

7                              Additional Covenants. Nellcor covenants that it
will not claim that its products use Masimo’s technology.  Masimo covenants that it will not claim that
its products use Nellcor’s technology.

8                              No Challenge to Patents. Nellcor agrees that it
will not directly, indirectly or in concert with others challenge the validity
or enforceability of any of the Masimo Patents, or interfere with the
prosecution of any pending application claiming priority to the Masimo Patents,
in any Patent Office or in any court (except in connection with litigation
initiated, or threatened resulting in a Declaratory Judgment by Nellcor, by
Masimo), nor will Nellcor encourage, facilitate or participate with others to
do so, 

 

8

 

                                    provided that
this sentence does not prohibit Nellcor from participating in an interference
instituted by the Patent Office. 
However, this Agreement in no way alters any collateral estoppel and Res
Judicata effects arising from the Patent Litigation.

9                              Current Nellcor Products.  Nellcor shall discontinue
making, offering to sell, selling and shipping its 04, 05, and 05ci technology
platform or any other devices that employ an algorithm that is no more than
colorably different from the 04, 05, and 05ci algorithms with regard to any one
or more of the claims found to be infringed by Nellcor in the Patent
Litigation, in any future products by January 31, 2006, except for Latin
America and Asia.  For Latin America and
Asia, the date will be the time reasonably required to complete regulatory
approval proceedings in such regions, but no later than Dec. 1, 2006.  Nellcor retains the right to service and
provide sensors for units shipped prior to these dates.  Nothing contained in this Section 9 shall be
deemed to prohibit Nellcor from making, offering to sell, selling and shipping
O6 Pulse Oximetry Products or products Essentially Unchanged therefrom.

10                      Releases

10.1                Release
By Masimo to Nellcor: 
Except for the agreements between the Parties expressly made herein and
the claims made in the Antitrust Litigation, Masimo, for itself and for each of its
officers, directors, managers, board members, shareholders, employees,
servants, agents, successors in interest, predecessors, assigns,
administrators, representatives, Affiliates, insurers and attorneys, hereby
forever and completely releases and discharges: (a) Nellcor and each of its
officers, directors, managers, board members, shareholders, employees,
servants, agents, successors in interest, predecessors, assigns,
administrators, representatives, its Affiliates, insurers and attorneys of and
from any and all claims, demands, causes of action, liabilities, and
obligations of every kind and nature, in law, equity or otherwise, known and
unknown, suspected and unsuspected, disclosed and undisclosed, for damages of
any sort whatsoever, past, present and future, and for equitable relief, for
any and all causes of action existing as of the Effective Date of this
Agreement, including but not limited to any such claim or demand arising out of
or in any way related to the facts and claims alleged in the Patent Litigation;
and (b) any customer, distributor, OEM, licensee, supplier or purchasing
organization with respect to the purchase, distribution, marketing,
manufacturing or use of Nellcor’s 04, 05, and 05ci products (including oximetry
software licensed to OEMs) obtained on or before January 31, 2006 (but this
shall not release any licensee or OEM with respect to inclusion of any oximetry
software in any product manufactured or sold after January 31, 2006).

10.2        Release By
Nellcor to Masimo:  Except for
the agreements between the Parties expressly made herein and the defenses made
in the Antitrust Litigation (other than the claims or defenses released and
waived pursuant to Section 10.3 below), Nellcor, for itself and for each of its
officers, directors, managers, board members, shareholders, employees,
servants, agents, successors in interest, predecessors, 

 

9

 

assigns,
administrators, representatives, Affiliates, insurers and attorneys, hereby
forever and completely releases and discharges: (a) Masimo and each of its
officers, directors, managers, board members, shareholders, employees,
servants, agents, successors in interest, predecessors, assigns,
administrators, representatives, its Affiliates, insurers and attorneys of and
from any and all claims, demands, causes of action, liabilities, and
obligations of every kind and nature, in law, equity or otherwise, known and
unknown, suspected and unsuspected, disclosed and undisclosed, for damages of
any sort whatsoever, past, present and future, and for equitable relief, for
any causes of action existing as of the Effective Date of this Agreement,
including but not limited to any such claim or demand arising out of or in any
way related to the facts and claims alleged in the Patent Litigation; and (b)
any customer, distributor, OEM, licensee, supplier or purchasing organization
with respect to the purchase, distribution, marketing, manufacturing or use of
Masimo’s pulse oximetry and Rainbow SET products (including oximetry software
licensed to OEMs) obtained on or before the date of this agreement.

10.3         Scope
of Released Claims:  The
claims released in Sections 10.1 and 10.2 of this Agreement (the “Released
Claims”) do not include any claims arising from or related to the Antitrust
Litigation.  Thus, nothing in this
Agreement shall be construed to release, modify, bar or limit any of the
claims, rights or causes of action that Masimo has asserted against Nellcor or
defenses asserted by Nellcor in the Antitrust Litigation, all of which are
expressly preserved, except that any and all claims or defenses asserted by
Nellcor in the Antitrust Litigation related to Nellcor’s U.S. Patent No.
4,934,372 or any other claims or defenses related to alleged infringement by
Masimo of Nellcor patents are released and waived by virtue of this settlement.

10.4         Release
Of Unknown Claims:  It is
understood and agreed by each Party that solely with respect to the claims as
described in Sections 10.1, 10.2 and 10.3 above, this is a full, complete and
final release and each Party agrees that it shall apply as provided and
excepted in this Agreement to all unknown, unanticipated, unsuspected and
undisclosed claims, demands, liabilities, actions or causes of action, in law,
equity or otherwise, as well as those which are now known, anticipated,
suspected or disclosed.  Each Party has
been fully advised by its respective attorney of the contents of Section 1542
of the Civil Code of the State of California, and that section and the benefits
thereof are hereby expressly waived. 
Section 1542 reads as follows:

“Section
1542.  (General Release - Claims
Extinguished.)  A general release
does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release, which if known by him must
have materially affected his settlement with the debtor.”

In
addition, solely with respect to the claims released pursuant to Sections 10.1,
10.2 and 10.3, each Party will be deemed to relinquish, to the extent they are
applicable, and to the full extent permitted by law, the provisions, rights and
benefits of any law, 

 

10

 

or
principle of common law, which is similar, comparable or equivalent to
California Civil Code §1542.  Each Party
acknowledges that the Party may discover facts in addition to or different to
from those now known or believed to be true with respect to the subject matter
of this release, but that it is the intention of the Party to fully, finally
and forever settle and release any and all claims released hereby, known or
unknown, suspected or unsuspected, which now exist, or heretofore existed, and
without regard to the subsequent discovery or existence of such additional or
different facts.  Each Party warrants
that the Party has read and understands the aforesaid Section 1542 and has had
the opportunity to consult with and be advised by counsel regarding its meaning
and effect and the Party voluntarily waives its provisions and any other
provision or statute of like effect.

10.5         Each party represents and warrants that
it has not assigned, sold, or otherwise transferred to any third party any
claims or causes of action against the other Party existing prior to the
Effective Date.

11                        Dismissal:  Within 14
business days of receipt of the payment specified in Section 2 of this
Agreement, Masimo and Nellcor shall execute and file in each case in the Patent
Litigation a stipulated dismissal with prejudice in the form attached as
Exhibit B.  Each Party shall simultaneously
serve a copy of such dismissal on the other Party.  As provided in Exhibit B, the United States
District Court for the Central District of California shall retain jurisdiction
over the Parties and this Agreement for purposes of enforcing this Agreement.

12                        Press Release:  The Parties
agree that simultaneously each will issue a press release regarding this
settlement agreement in the form attached hereto as Exhibit A.

13                        Warrant Of Authority:  Each Party warrants and
represents that it is fully entitled and duly authorized to enter into and bind
itself under this Agreement.

14                        Drafting:  The Parties and their counsel have cooperated
in the drafting and preparation of this Agreement.  The Parties agree that any ambiguities in
this Agreement shall not be construed against any Party by virtue of that Party
having drafted the language in question.

15                        Reading Of Agreement:  The Parties each declare that they have read
this Agreement in its entirety and know and understand its contents, have had
the opportunity to consult with legal counsel of their choice, and that they
each comprehend and agree to all of this Agreement’s terms, conditions and
meanings freely, knowingly and willingly. 
It is understood by the Parties that, other than as set forth in this
Agreement, the facts in respect of which this Agreement is made may hereinafter
prove to be other than or different from the facts now known by any of them or
believed by any of them to be true.  Each
of the Parties expressly accepts and assumes the risk of the facts, other than
as set forth in this Agreement, proving to be different, and each of the
Parties agrees that all terms of this Agreement will be in all 

 

11

 

                                    respects
effective and not subject to termination or rescission by virtue of any such
difference.

16                        Term: The term of this Agreement will begin upon the
Effective Date.  Except as provided in
Section 5.4, the covenants not to sue and Nellcor’s obligation to pay running
royalties to Masimo shall continue through the later of March 14, 2011, the
latest expiration of the Masimo Patents (excluding the ‘850 patent if the
conditions for royalty reduction pursuant to Section 5 have been met) or the
last availability of the covenanted products from Nellcor, its OEMs or
Distributors.  Notwithstanding any other
provision in this Agreement, the covenant by Nellcor not to sue Masimo under
Section 4.3 shall survive any termination of this Agreement, and continue so long
as the products covenanted are available.

17                        Disclaimers: Nothing in this Agreement may be construed as

        (a)           a warranty, representation, or promise relating to the
Masimo Patents, including, without limitation, the validity, enforceability,
scope or suitability; or

 

        (b)           an obligation to bring or prosecute actions or suits
against third parties, or defend actions or suits brought against the other
party, or indemnify the other party for any reason; or

 

        (c)           conferring upon either party the right to use in
advertising, publicity, or otherwise any trademark, service mark, or trade name
of the other party; or

 

        (d)           conferring upon either party, by implication or otherwise,
any right or license under any patents or other industrial or intellectual
property rights (including, without limitation, trademarks, service marks,
trade names, and copyrights) except for the rights expressly granted herein.

 

18                        No Refund.  Nellcor
acknowledges that this Agreement is being entered into, for among other
reasons, settlement of litigation and that all amounts paid by Nellcor (except
any advance royalty payments overpayment in accordance with Section 5.2) to
Masimo are nonrefundable, even if the validity, scope, or enforceability of
Masimo’s patents are subsequently challenged and such patents are deemed by a
court of competent jurisdiction to be held invalid, of narrower scope, or
unenforceable.

19                        Acceptance of Royalty:  Acceptance of any
royalty payment by Masimo shall not be deemed to be a waiver of any rights of
Masimo, including the right to claim that products are not within the covenant
not to sue and infringe one or more patents of Masimo.  In addition, all payments made to Masimo
after any notice by Masimo that a product does not fall within the covenant not
to sue may be accepted by Masimo and shall be used as an offset for damages, if
any, awarded to Masimo if such product is found to infringe one or more patents
of Masimo.

 

12

 

20                        Non-Reliance:  The Parties each declare that in agreeing to
and executing this Agreement, they do not rely and have not relied upon any
representation or statement made by any of the Parties or by any of the Parties’
officers, directors, managers, board members, shareholders, employees,
servants, agents, successors in interest, predecessors, assigns,
administrators, representatives, insurers, or attorneys with regard to the
subject matter, basis or effect of this Agreement or otherwise, other than
those stated in this written Agreement.

21                        Entire Agreement:  This Agreement contains the entire agreement
among the Parties and constitutes the complete, final and exclusive embodiment
of their agreement with respect to the subject matter hereof.  The terms of this Agreement are contractual
and not a mere recital.  This Agreement
may not be altered, modified or otherwise changed in any respect except by a
writing duly executed by the Parties to be bound or their authorized
representatives.

22                        Remedies For Breach:  The Parties acknowledge that breach or
default of this Agreement will result in irreparable harm to the non-breaching
Party, that it would be impracticable or extremely difficult to fix the amount
of such harm, and that in the event of any breach or default of this Agreement,
the non-breaching Party shall have all remedies provided by law and equity to
enforce the Agreement, including without limitation an award for damages,
specific performance or injunctive relief, including specific performance as to
Nellcor’s discontinuance of the 04, 05 and 05ci products.  The prevailing Party in any action to enforce
this Agreement, or in any action arising out of any breach of this Agreement,
shall be entitled to recover, in addition to any other relief awarded, court
costs and reasonable attorney fees incurred in connection with any action to enforce
this Agreement.

23                        Successors And Assigns:  This Agreement, including without limitation
all rights, obligations, and covenants, shall bind the heirs, personal
representatives, successors and assigns of each Party, and inure to the benefit
of each Party, its successors and assigns, including without limitation any
successor or assign as a result of bankruptcy. 
For purposes of the United States Bankruptcy code, the parties’ patents
and the covenants not to sue herein are intellectual property and intellectual
property licenses as those terms are defined and used in Sections 101(35A) and
365(n) of the code, and each recipient of a covenant is entitled to the rights
and protections provided to a licensee of intellectual property by Section
365(n).

24                        Titles:  The titles of paragraphs herein are inserted
solely for convenience and do not affect the construction of any provision of
this Agreement.

25                        Fees And Costs:  Each Party shall be solely responsible for
its own costs, expenses, and attorney’s fees, taxable or otherwise, incurred in
or arising out of or in any way related to the matters released herein, the
Patent Litigation and this Agreement.

26                        Severance:  Except with respect to provisions involving a
covenant between the Parties, should any provision of this Agreement be
declared or determined by any 

 

13

 

                                    court or
tribunal of competent jurisdiction to be illegal, invalid, or unenforceable,
the legality, validity, and enforceability of the remaining parts, terms, or
provisions shall not be affected thereby and said illegal, unenforceable or
invalid part, term, or provision shall be deemed not to be part of this
Agreement.  In addition, in the event
that the parties are in disagreement about the application of one or more
provisions of this agreement, that dispute shall not impact the operation of
the other provisions of this Agreement.

27                        Choice Of Law:  This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of California,
without regard to any conflict of law principles that would result in the
application of the laws of a different state. 
Jurisdiction and venue over any dispute arising out of or relating to
this Agreement or the subject matter to which it relates shall lie exclusively
with the United States District Court for the Central District of
California.  The parties hereby
irrevocably waive any present or future objections to such venue and
irrevocably consent and submit unconditionally to this exclusive jurisdiction
in California.  The Parties also hereby
stipulate that any judgment arising out of this Agreement and issued by a court
of competent jurisdiction in the State of California shall be given full faith
and credit in all jurisdictions.

28                        Review And Investigation Of Agreement:  Each Party represents and warrants that the
Party, or a responsible officer thereof, has read this Agreement and
understands the contents hereof.  Each of
the directors and/or officers executing this Agreement on behalf of their
respective corporations is duly authorized to do so and thereby bind such
respective corporation.  Each Party
represents and warrants that the Party has made such investigation of the facts
pertaining to the terms and provisions herein and this Agreement, and of all of
the matters pertaining thereto, as the Party deems necessary.

29                        Execution In Counterparts:  This Agreement may be executed in
counterparts, including telecopied 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 together shall constitute one and the same
instrument.

30                        Date Of Execution:   The date of the
last signature placed on this
Agreement shall be known as the “date of execution” of this Agreement.

31                      Confidentiality:  The financial terms of this Agreement are
confidential, except (i) as disclosed in the press release of Exhibit A, (ii)
in connection with any discussions by Masimo with any other third party
relating to the possible granting of rights under any of its patents, (iii) to
any third party that has an agreement to maintain the information confidential,
and (iv) as required by law (including filing the agreement in connection with
any SEC filing).  Exhibit D to this
Agreement remains confidential per the terms set forth Section 4.3

 

14

 

32                      Effective
Date:  The Effective
Date of this Agreement is the day that Masimo receives the Settlement Payment
of Section 2.1.

 

15

 

In Witness Whereof, the Parties have duly
authorized and caused this Agreement to be executed:

	
   

  	
  MASIMO
  CORPORATION

  
	
  Dated:  1/17/06

  	
  By:

  	
  /s/ Joe Kiani

  
	
   

  	
  Name: 

  	
  Joe Kiani

  
	
   

  	
  Title: 

  	
  CEO

  
	
   

  	
  MASIMO LABORATORIES

  
	
  Dated:  1/17/06

  	
  By: 

  	
  /s/ Joe Kiani

  
	
   

  	
  Name:

  	
   Joe Kiani

  
	
   

  	
  Title: 

  	
  CEO

  
	
   

  	
  TYCO HEALTHCARE GROUP LP

  
	
  Dated:  1/17/06

  	
  By:

  	
  /s/ Richard J. Meelia

  
	
   

  	
  Name:

  	
  Richard J. Meelia

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  MALLINCKRODT INC.

  
	
  Dated:  1/17/06

  	
  By:

  	
  /s/ Richard J. Meelia

  
	
   

  	
  Name:

  	
  Richard J. Meelia

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
  NELLCOR PURITAN BENNETT INC.

  
	
  Dated:  1/17/06

  	
  By:

  	
  /s/ Richard J. Meelia

  
	
   

  	
  Name:

  	
  Richard J. Meelia

  
	
   

  	
  Title:

  	
  President

  

 

16

 

	
   

  	
  TYCO INTERNATIONAL LTD.

  
	
  Dated:  1/18/06

  	
  By:

  	
  /s/ William B. Lytton

  
	
   

  	
  Name:

  	
  William B. Lytton

  
	
   

  	
  Title:

  	
  EVP & General Counsel

  
	
   

  	
  TYCO INTERNATIONAL (US) INC.

  
	
  Dated:  1/17/06

  	
  By:

  	
  /s/ Richard J. Meelia

  
	
   

  	
  Name:

  	
  Richard J. Meelia

  
	
   

  	
  Title:

  	
  Vice President

  

 

 

17

 

Exhibit A

FORM OF PRESS RELEASE

 

 

Masimo and Nellcor Announce
Settlement of Patent Litigation

 

Masimo
(Nellcor, a division of Tyco), today announced a settlement of all existing
patent litigation with Nellcor, a division of Tyco (Masimo).  Under the terms of the settlement, all
pending patent litigation will be dismissed, and Masimo will receive
approximately $265 Million in past damages through January 31, 2006.  After January 31, 2006, Nellcor will no
longer ship its current 05 pulse oximetry platform, but it will continue to
provide service and sensors for previously sold products.  Masimo has granted Nellcor the right to sell
its new line of pulse oximetry products in exchange for an ongoing royalty.

 

{Masimo
Boilerplate}

 

{Nellcor
Boilerplate}

 

 

 

18

 

Exhibit
B

 

Stipulated
Dismissals

 

	
  Craig N. Hentschel (CSB #66178)

  	
  James F. Lesniak (CSB #115889)

  
	
  chentschel@dykema.com

  	
  jfl@kmob.com

  
	
  DYKEMA GOSSETT PLLC

  	
  Joseph
  R. Re (CSB #134479)

  
	
  333 South Grand Avenue

  	
  jrr@kmob.com

  
	
  Suite 2100

  	
  Karen Vogel Weil (CSB #145066)

  
	
  Los
  Angeles, CA 90071

  	
  kvw@kmob.com

  
	
  Telephone:
  (213) 457-1800

  	
  Jon
  W. Gurka (CSB #187964)

  
	
  Facsimile:
  (213) 457-1850

  	
  jwg@kmob.com

  
	
   

  	
  Joseph S. Cianfrani (CSB#196186)

  
	
  Robert
  C. Morgan (CSB #46348)

  	
  jsc@kmob.com

  
	
  robert.morgan@ropesgray.com

  	
  KNOBBE,
  MARTENS, 

  
	
  ROPES
  & GRAY LLP

  	
  OLSON & BEAR, LLP

  
	
  FISH
  & NEAVE IP GROUP

  	
  2040
  Main Street, 14th Floor

  
	
  1251
  Avenue of the Americas

  	
  Irvine,
  CA 92614

  
	
  New
  York, NY 10020

  	
  Telephone:
  (949) 760-0404

  
	
  Telephone:
  (212) 596-9000

  	
  Facsimile:
  (949) 760-9502

  
	
  Facsimile:
  (212) 596-9090

  	
   

  
	
   

  	
  Attorneys
  for

  
	
  Attorneys
  for Plaintiffs/Counterdefendants,

  	
  Defendant/Counterclaimant,

  
	
  Nellcor
  Puritan Bennett, Inc. and

  	
  MASIMO
  CORPORATION

  
	
  Mallinckrodt
  Inc.

  	
   

  

 

 

 

IN
THE UNITED STATES DISTRICT COURT

 

FOR
THE CENTRAL DISTRICT OF CALIFORNIA

 

WESTERN
DIVISION

 

 

	
   

  	
   

  	
   

  
	
  NELLCOR
  PURITAN BENNETT, INC., a 

  	
  )

  	
  Civil Action No.

  
	
  Delaware
  corporation, and MALLINCKRODT, 

  	
  )

  	
  CV            MRP
  (AJWx)

  
	
  INC.,
  a Delaware corporation,

  	
  )

  	
   

  
	
   

  	
  )

  	
  STIPULATED DISMISSAL 

  
	
   

  	
  Plaintiffs,

  	
  )

  	
  WITH PREJUDICE

  
	
   

  	
  )

  	
   

  
	
  v.

  	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  MASIMO
  CORPORATION, a Delaware corporation,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  Defendant.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  AND
  RELATED COUNTERCLAIMS.

  	
  )

  	
   

  
	
   

  	
  )

  	
  Honorable Mariana R.
  Pfaelzer

  
	
   

  	
  )

  	
   

  
					

 

 

1

 

                Pursuant to Rule 41(a)(1)(ii) of
the Federal Rules of Civil Procedure, the parties, through their respective
counsel of record, do hereby agree and stipulate to dismiss this action, and
the claims and counterclaims therein, with prejudice.  The parties have entered into a settlement
agreement which resolves each and every claim and counterclaim made in this
action, with each party agreeing to forgo any appeal and to pay its own costs
and attorneys’ fees.  The court shall
retain jurisdiction to enforce the terms of the settlement agreement.

 

	
   

  	
   

  	
   

  	
  Respectfully
  submitted,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  ROPES
  & GRAY, LLP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Robert C. Morgan

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attorneys
  for Plaintiff/Counterdefendants,

  
	
   

  	
   

  	
   

  	
  MALLINCKRODT,
  INC. and NELLCOR PURITAN BENNET, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  KNOBBE,
  MARTENS, OLSON

  
	
   

  	
   

  	
   

  	
  &
  BEAR, LLP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  James F. Lesniak

  
	
   

  	
   

  	
   

  	
   

  	
  Joseph R. Re

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attorneys
  for Defendant/Counterclaimant,

  
	
   

  	
   

  	
   

  	
  MASIMO
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IT IS
  SO ORDERED.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Honorable
  Mariana R. Pfaelzer

  

 

 

1

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