Document:

Exhibit
10.3

 

 

AMENDMENT TO SETTLEMENT
AGREEMENT 

AND RELEASE OF CLAIMS

This
Amendment to the January 17, 2006 Settlement Agreement and Release of
Claims (“the Agreement”) is made this 24th 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 entered into the
Agreement on January 17, 2006.

B.            Whereas the Parties wish to amend
Section 5.2 of the Agreement to more accurately reflect their agreement and
intent.

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 are hereby acknowledged, the Parties agree that Section 5.2 of the
Agreement is amended to read in its entirety as follows:

Section 5.2 (as amended)

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 related to the 13% running royalty in Section 5.1,
then Nellcor will pay 13% 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 13% of the revenue under this amount to be applied to
future royalty payments.  Additionally,
if Nellcor’s Pulse Oximetry Revenues exceed $350,000,000 for calendar year 2006
related to the additional 7% running royalty in Section 5.1, then Nellcor will
pay 7% of the revenue over this amount by March 30, 2007.  If Nellcor’s Pulse Oximetry Revenues are less
than $350,000,000 for this same time period, then Nellcor will receive a credit
of 7% 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.

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

	
   

  	
   

  	
  MASIMO CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  1/24/06

  	
   

  	
  By:

  	
  /s/ Joe Kiani

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Joe Kiani

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MASIMO LABORATORIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  1/24/06

  	
   

  	
  By:

  	
  /s/ Joe Kiani

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Joe Kiani

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TYCO HEALTHCARE GROUP LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  1/24/06

  	
   

  	
  By:

  	
  /s/ Richard J. Meelia

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard J. Meelia

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MALLINCKRODT INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  1/24/06

  	
   

  	
  By:

  	
  /s/ Richard J. Meelia

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard J. Meelia

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NELLCOR PURITAN BENNETT INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  1/24/06

  	
   

  	
  By:

  	
  /s/ Richard J. Meelia

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard J. Meelia

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

 

	
   

  	
   

  	
  TYCO INTERNATIONAL LTD.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  1/24/06

  	
   

  	
  By:

  	
  /s/ William B. Lytton

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William B. Lytton

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  EVP & General Counsel

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TYCO INTERNATIONAL (US) INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:  1/24/06

  	
   

  	
  By:

  	
  /s/ Richard J. Meelia

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Richard J. Meelia

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

3Exhibit
10.4

 

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

 

SECURITIES AND EXCHANGE

COMMISSION,

 

                                                                Plaintiff,

 

                                v.

 

TYCO INTERNATIONAL LTD.,

 

                                                                Defendant.

 

FINAL
JUDGEMENT AS TO

DEFENDANT
TYCO INTERNATIONAL LTD.

 

The Securities and Exchange
Commission (“Commission”) having filed a Complaint and Defendant Tyco
International Ltd. (“Defendant”) having entered a general appearance; consented
to the Court’s jurisdiction over Defendant and the subject matter of this
action; consented to entry of this Final Judgment without admitting or denying
the allegations of the Compliant (except as to jurisdiction); waived finding of
fact and conclusions of law; and waived any right to appeal from this Final
Judgment:

 

I.

 

IT IS
HEREBY ORDERED, ADJUDGED, AND DECREED that Defendant and
Defendant’s agents, servants, employees, attorneys, and all persons in active
concert or participation  with them who
receive actual notice of this Final Judgment by personal service or otherwise
are permanently restrained and enjoined from violating, directly or indirectly,
Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15
U.S.C. § 78j(b)], and Exchange Act Rule 10b-5 [17 C.F.R. § 240.106-5] by using
any 

 

1

 

means or instrumentality of interstate
commerce, or of the mails, or of any facility of any national securities
exchange in connection with the purchase or sale of any security:

 

(a)                                  to employ any
device, scheme, or artifice to defraud;

 

(b)                                 to make any
untrue statement of a material fact or to omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading; or

 

(c)                                  to engage in
any act, practice, or course of business which operates or would operate as a
fraud or deceit upon any person.

 

II.

 

IT IS
HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and
Defendant’s agents, servants, employees, attorneys, and all persons in active
concert or participation with them who receive actual notice of this Final
Judgment by personal service or otherwise are permanently restrained and
enjoined from violating Section 17(a) of the Securities Act of 1933 (the “Securities
Act”) [15 U.S.C. § 77q(a)] in the offer or sale of any security by the use of
any means or instruments of transportation or communication in interstate
commerce or by use of the mails, directly or indirectly:

 

(a)                                  to employ any
device, scheme, or artifice to defraud;

 

(b)                                 to obtain money
or property by means of any untrue statement of a material fact or any omission
of a material fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading;  or

 

 

2

 

(c)                                  to engage in
any transaction, practice, or course of business which operates or would
operate as a fraud or deceit upon the purchaser.

 

III.

 

IT IS
HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and
Defendant’s agents, servants, employees, attorneys, and all persons in active
concert or participation with them who receive actual notice of this Final
Judgment by personal service or otherwise are permanently restrained and
enjoined from violating Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)]
and Exchange Act Rules 12b-20, 13a-1, and 13a-13 [17 C.F.R. §§ 240.12b-20,
240.13a-1, and 240.13a-13] by:

 

(a)                                  failing to file
such annual reports and quarterly reports as the Commission prescribes, or such
information and documents required to be included in or filed with an
application of registration statement filed pursuant to Section 12 of the
Exchange Act [15 U.S.C. § 78/]; or

 

(b)                                 failing to add
a statement or report required by the Commission such further material
information, if any, as may be necessary to make the required statements, in
the light of the circumstances under which they were made, not misleading.

 

IV.

 

IT IS
HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and
Defendant’s agents, servants, employees, attorneys, and all persons in active
concert or participation with them who receive actual notice of this Final
Judgment by personal service or otherwise are permanently restrained and
enjoined from violating, 

 

3

 

directly or indirectly Section 13(b)(2)(A)
and (b)(2)(B)of the Exchange Act [15 U.S.C. § 78m(b)(2)(A), (b)(2)(B)] and
Exchange Act Rule 13b2-1 [17 C.F.R. § 240.13b2-1] by:

 

(a)                                  failing to make
and keep books, records, and accounts, which, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of its assets;

 

(b)                                 failing to
devise and maintain a system of internal accounting controls sufficient to
provide reasonable assurances that: transactions are executed in accordance
with management’s general or specific authorization; transaction are recorded
as necessary to permit preparation of financial statements in conformity with generally
accepted accounting principles or any other criteria applicable to such
statements, and to maintain accountability for assets; access to assets is
permitted only in accordance with management’s general or specific
authorization; and the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences; or

 

(c)                                  falsifying, or
causing to be falsified, any book, record, or account subject to Section
13(b)(2)(A) of the Exchange Act [15 U.S.C. § 78m(b)(2)(A)].

 

V.

 

IT IS
HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and
Defendant’s agents, servants, employees, attorneys, and all persons in 

 

4

 

active concert or participation with them who
receive actual notice of this Final Judgment by personal service or otherwise
are permanently restrained and enjoined from violating, directly or indirectly
Section 14(a) of the Exchange Act [15 U.S.C. § 78n(a)] and Exchange Act Rule
14a-9 [17 C.F.R. § 240.14a-9] by using the mails, any means or instrumentality of
interstate commerce, or any facility of any national securities exchange or
otherwise, to solicit or permit the use of its name to solicit any proxy,
consent or authorization in respect of any security (other than an exempted
security) registered pursuant to Section 12 of the Exchange Act [15 U.S.C.
§78/], by means of any proxy statement, form of proxy, notice of meeting, or
other communication, written or oral, containing any statement which:

 

(a)                                  at the time and
in the light of circumstances under which it is made, is false or misleading
with respect to any material fact;

 

(b)                                 omits to state
any material fact necessary in order to make the statements therein not false
or misleading; or

 

(c)                                  omits to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of a proxy for the same meeting
or subject matter which has become false or misleading.

 

VI.

 

IT IS
HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant and
Defendant’s agents, servants, employees, attorneys, and all persons in active
concert or participation with them who receive actual notice of this Final
Judgment by personal service or otherwise are permanently restrained and
enjoined from violating, 

 

5

 

directly or indirectly Section 30A(a) of the
Exchange Act [15 U.S.C. § 78dd-1(a)] by using the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of any offer,
payment, promise to pay, or authorization of the payment of any money, or
offer, gift, promise to give, or authorization of the giving of anything of
value to:

 

(a)                                  any foreign
official for purposes of (i) influencing any act or decision of such foreign
official in his official capacity, (ii) inducing such foreign official to do or
omit to do any act in violation of the lawful duty of such official, (iii)
securing any improper advantage, or (iv) inducing such foreign official to use
his influence with a foreign government or instrumentality thereof to affect or
influence any act or decision of such government or instrumentality, in order
to assist Defendant in obtaining or retaining business;

 

(b)                                 any foreign
political party or official thereof or any candidate for foreign political
office for purposes of (i) influencing any act or decision of such foreign
official in his official capacity, (ii) inducing such foreign official to do or
omit to do any act in violation of the lawful duty of such official, (iii)
securing any improper advantage, or (iv) inducing such foreign official to use
his influence with a foreign government or 

 

6

 

                                                instrumentality
thereof to affect or influence any act or decision of such government or
instrumentality, in order to assist Defendant in obtaining or retaining
business;

 

(c)                                  any person,
while knowing that all or a portion of such money or thing of value will be
offered, given, or promised, directly, to any foreign political party or
official thereof, or to any candidate for foreign political officer for
purposes of (i) influencing any act or decision of such foreign official in his
official capacity, (ii) inducing such foreign official to do or omit to do any
act in violation of the lawful duty of such official, (iii) securing any
improper advantage, or (iv) inducing such foreign official to use his influence
with a foreign government or instrumentality thereof to affect or influence any
act or decision of such government or instrumentality, in order to assist
Defendant in obtaining or retaining business.

 

VII.

 

IT IS
HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant is liable
for disgorgement of $1, representing profits gained or losses avoided as a
result of the conduct alleged in the Compliant, and a civil penalty in the
amount of $50,000,000 pursuant to Section 20(d) of the Securities Act [15
U.S.C. § 77t(d)] and Section 21(d)(3) and 32(c)(1)(B) and the Exchange Act [15
U.S.C. §§ 78u(d)(3) and 78ff(c)(1)(B)]. 
Defendant shall satisfy this obligation by paying $50,000,001 within ten
business days of the entry of the Final Judgment.  Defendant shall make payment to the Clerk of
this Court, together with a cover letter identifying Tyco International Ltd. as
a 

 

7

 

defendant in this action; setting forth the
title and civil action number of this action and the name of this Court; and
specifying that payment is made pursuant to this Final Judgment.  Defendant shall simultaneously transmit
photocopies of such payment and letter to the Commission’s counsel in this
action.  By making this payment,
Defendant relinquishes all legal and equitable right, title, and interest in
such funds, and no part of the funds shall be returned to Defendant.  Defendant shall pay post-judgment interest on
any delinquent amounts pursuant to 28 U.S.C. § 1961.

 

The Clerk shall deposit the
funds into an interest bearing account with the Court Registry Investment
System (“CRIS”).  These funds, together
with any interest and income earned thereon (collectively, the “Fund”), shall
be held by the CRIS until further order of the Court.  In accordance with 28 U.S.C. § 1914 and the
guidelines set by the Director of the Administrative Office of the United
States Courts, the Clerk is directed, without further order of this Court, to
deduct from the income earned on the money in the Fund a fee equal to ten
percent of the income earned on the Fund. 
Such fee shall not exceed that authorized by the Judicial Conference of
the United States.

 

The Commission may by motion
propose a plan to distribute the Fund subject to the Court’s approval.  Such a plan may provide that the Fund shall
be distributed pursuant to the Fair Fund provisions of Section 308(a) of the
Sarbanes-Oxley Act of 2002.  Defendant shall
pay all additional costs incurred under the plan resulting from the
distribution of the $50,000,001 disgorgement and civil penalty, and there will
be no deduction from the Fund for those additional costs.  Regardless of whether any such Fair Fund
distribution is made, amounts ordered to be paid as civil penalties pursuant to
this Judgment shall be treated as penalties paid to the government for all
purposes, including 

 

8

 

all tax purposes.  To preserve the deterrent effect of the civil
penalty, Defendant shall not, after offset or reduction of any award of
compensatory damages in any Related Investor Action based on Defendant’s
payment of a civil penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action
grants such a Penalty Offset, Defendant shall, within thirty days after entry
of a final order granting the Penalty Offset, notify the Commission’s counsel
in this action and pay the amount of the Penalty Offset to the United States
Treasury or to a Fair Fund, as the Commission directs.  Such a payment shall not be deemed an
additional civil penalty and shall not be deemed to change the amount of the
civil penalty and shall not be deemed to change the amount of the civil penalty
imposed in this Judgment.  Moreover, in
the event the Fund payments be considered in calculating the attorneys’ fees or
expenses counsel would entitled to collect in a Related Investor Action.  For purposes of this paragraph, a “Related
Investor Action” means a private damages action brought against Defendant by or
on behalf of one or more investors based on substantially the same facts as
alleged in the Complaint in this action.

 

VIII.

 

IT IS
HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that the Consent of Tyco
International Ltd. filed with the Court herewith is incorporated herein with
the same force and effect as if fully set forth herein, and that Defendant
shall comply with all of the undertakings and agreements set forth therein.

 

9

 

IX.

 

IT IS
HEREBY FURTHER ORDERED, ADJUDGED, AND DECREED that this Court shall
retain jurisdiction of this matter for the purposes of enforcing the terms of
this Final Judgment.

 

 

 

	
  Dated:

  	
  4/25/06

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  /s/ Robert Sweet

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  UNITED STATES DISTRICT JUDGE

  

 

 

 

10

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