Document:

Form of Promissory Note

 Exhibit 10.38 
 PROMISSORY NOTE 
  

			
	[$XXX]	 	                    , 2006

 FOR VALUE RECEIVED, the undersigned, [NAME], an individual residing at [ADDRESS]
(“Maker”), hereby promises to pay to the order of Masimo Corporation, a Delaware corporation, having offices at 40 Parker, Irvine, CA 92618-1604, or its successors and permitted assigns (“Lender” or
the “Company”), the principal sum of [AMOUNT ($XXX)], plus any and all interest accrued thereon at the Note Rate (defined below), each due and payable in cash in lawful money of the United States on the dates and in the
manner set forth in this Promissory Note (this “Note”). 
 1. Use of Proceeds. Maker shall use the
proceeds received under this Note to exercise certain options for common stock of the Company received by Maker pursuant to the Company’s Stock Option Plan. 
 2. Interest. The principal amount of this Note shall bear interest at 4.34% per annum (the “Note Rate”). Interest shall be computed on the basis of a three hundred and
sixty-five (365) day year and charged for the actual number of days elapsed. Interest shall accrue on the original principal balance only and there shall be no accrual of interest upon interest. 
 3. Payment of Principal and Interest. The principal amount of this Note and the interest thereon shall be due and payable in full on the
earlier of (a) December 31, 2007, (b) within ninety (90) days of the termination of Maker’s employment with the Company for any reason, or transfer to long term leave of absence status, and (c) ten (10) days prior
to the Company filing an S-1 registration statement with the U.S. Securities and Exchange Commission in contemplation of an initial public offering (“IPO”). As used herein, IPO means the closing of a firm commitment
underwritten public offering pursuant to a registration statement under the Securities Act of 1933, as amended. 
 4.
Prepayment. The Maker may prepay any portion of the principal balance of this Note at any time without penalty. 
 5.
Stock Repurchase. Prior to the date specified in Section 3(c), to the extent such transaction is approved by the Company’s board of directors and would not otherwise conflict or breach the terms of any agreement to which the
Company is a party, the Company shall repurchase from Maker the number of shares of Company’s common stock required to repay the balance of this Note in full, at a price equal to the estimated midpoint of the IPO filing range as determined by
the Company in good faith; provided, however, that (i) the Company shall not be required to make such repurchase if it would be unlawful under or otherwise prohibited by Delaware law; and (ii) to the extent such repurchase is
subject to a tag-along or similar right in favor of other stockholders of the Company, the shares repurchased from Maker may be reduced. 

 6. Default. Each of the following shall constitute an event of default (“Event
of Default”) under this Note: 
 (a) the Maker shall fail to pay when due (whether by acceleration or otherwise) principal or
interest on this Note, and such default shall have continued for a period of five (5) days; 
 (b) a proceeding (other than a proceeding
commenced by the Maker) shall have been instituted in a court having jurisdiction seeking a decree or order for relief in respect of the Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, and such proceedings shall remain undismissed or unstayed and in effect for a period of sixty (60) consecutive days (so long as the Maker is diligently proceeding to effect such dismissal or stay) or such court shall enter a decree
or order granting the relief sought in such proceeding; 
 (c) the Maker commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, consents to the entry of an order for relief in an involuntary case under any such law, or makes a general assignment for the benefit of creditors, or fails generally to pay his debts as
they become due, or takes any action in furtherance of any of the foregoing; or 
 (d) the Lender shall cease to have a perfected security
interest in and lien on the assets pledged to the Lender under the Stock Pledge Agreement. 
 7. Remedies. Upon the occurrence
of any Event of Default, the Lender may, without notice or demand to the Maker, exercise any or all of the following remedies: 
 (a) declare
all unpaid principal owing under this Note, together with all accrued and unpaid interest and other amounts owing hereunder, to be immediately due and payable without demand, protest, notice of protest, notice of default, presentment for payment or
further notice of any kind; or 
 (b) proceed to enforce such other and additional rights and remedies as the Lender may have hereunder or
under the Stock Pledge Agreement, or as may be provided by applicable law. 
 8.
Security. The unpaid principal of and interest on, together with all other amounts owing under, this Note are secured by a pledge of shares of capital stock (and all of the proceeds therefrom) of Maker (the “Pledged
Stock”) pursuant to that certain Stock Pledge Agreement, dated the date hereof (as amended, modified or supplemented from time to time in accordance with the terms thereof,), entered into by the Maker in favor of the Lender (the
“Stock Pledge Agreement”). Lender’s only recourse against Maker for repayment of this Note is (a) against such Pledged Stock (and all of the proceeds therefrom) and (b) an amount equal to [$ VVV (Note: this
must be equal to  1/2 of the loan amount)]; provided, however, that upon an Event of Default, Lender must
foreclose against such Pledged Stock before proceeding against the Maker for the deficiency (which deficiency shall be limited to the amount set forth in Section 6(b) above). Except as provided in this section, Lender shall not be permitted to
proceed against any other assets of Maker upon an Event of Default. 
  

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 9. Governing Law. This Note shall be governed by, and construed and enforced in accordance
with, the internal laws (other than the choice of law principles thereof) of the State of California. 
 10. Waiver. No failure
to exercise and no delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law. 
 11. Savings Clause. Notwithstanding any provision contained in this Note, the Lender shall not be entitled to receive, collect or apply as interest on this Note any amount in excess of the highest lawful
rate permissible under any law which a court of competent jurisdiction may deem applicable hereto. If the Lender ever receives, collects or applies as interest any such excess, the amount that would be excessive interest shall be deemed to be a
partial payment of principal and treated hereunder as such, and, if the principal balance of this Note is paid in full, any remaining excess shall promptly be paid to the Maker. 
 12. Amendment. This Note may be amended or modified only upon the written consent of both the Lender and the Maker. Any amendment must
specifically state the provision or provisions to be amended and the manner in which such provision or provisions are to be amended. 
 13.
Entire Agreement. This Note constitutes the entire agreement of the Maker and the Lender with respect to the subject matter hereof and supersedes all other prior arrangements, understandings, statements, representations and warranties,
expressed or implied, and no oral statements or prior written statements not contained in this Note shall have any force and effect. 
 14.
Counterparts. This Note may be executed in counterparts, each of which shall constitute an original and all of which shall constitute one and the same instrument. 
 15. Assignment. This Note may not be assigned and/or transferred in whole or in part by the Maker without the prior written consent of the
Lender, which consent shall be in the Lender’s sole and absolute discretion. This Note may be assigned and/or transferred in whole or in part by the Lender at any time. The obligations of the Maker hereunder shall bind his heirs and permitted
assigns, and all rights, benefits and privileges conferred on the Lender by this Note shall be and hereby are extended to, conferred upon, and may be enforced by, the successors and assigns of the Lender. 
 [Signature Page Follows] 
  

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 IN WITNESS WHEREOF, the Maker has executed this Note as of the date and year first above written.

  

			
	  
	 	
	[NAME OF MAKER]	 	

  

 -4-Form of Stock Pledge Agreement

 Exhibit 10.39 
 STOCK PLEDGE AGREEMENT 
 THIS STOCK PLEDGE AGREEMENT (this
“Agreement”), dated as of                     , 2006, is entered into by and between [NAME], an individual
(“Pledgor”), and Masimo Corporation, a Delaware corporation (“Secured Party”). 
 RECITALS

 A. Pledgor has executed that certain Promissory Note in the aggregate principal amount of [AMOUNT] ($[XXX]), dated of even date
herewith, in favor of Secured Party (the “Note”). 
 B. Pledgor is the owner of shares of Common Stock of Secured
Party, as set forth on Schedule A hereto (the “Shares”). 
 C. Pledgor has agreed to pledge the Shares,
together with any securities received by Pledgor in connection with any merger or reorganization with respect to such shares (the “Pledged Shares”), to Secured Party pursuant to the terms of the Note, and to enter into this
Agreement in order to secure its obligations to Secured Party under the Note. 
 NOW, THEREFORE, in consideration of the foregoing promises
and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
 1. Pledge of Stock. Pledgor hereby pledges, grants a security interest in, assigns, transfers and delivers unto Secured Party and its successors and assigns the Pledged Shares as collateral security for the payment and
performance by Pledgor of the Obligations (as defined under Section 2 hereof). Pledgor has, concurrently herewith, delivered to Secured Party the stock certificate evidencing the Pledged Shares together with appropriate stock powers executed in
blank in the form of Exhibit A, attached hereto. The Pledged Shares shall be referred to herein as the “Collateral.” 
 2. Obligations Secured. This Agreement is made and the pledge herein is given to secure Pledgor’s payment and performance of any and all obligations, liabilities and indebtedness of Pledgor to Secured Party pursuant to
the terms of the Note and this Agreement (collectively, the “Obligations”). 
 3. Representations and
Warranties of Pledgor. Pledgor hereby represents and warrants to Secured Party as follows: 
 3.1 Ownership of the Pledged
Shares. Pledgor is and shall be the beneficial and record owner of the Pledged Shares. 
  

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 3.2 Liens, Claims, Encumbrances, Etc. Pledgor owns the Pledged Shares free and clear of any
material liens, claims, encumbrances or security interests of any kind or nature whatsoever. 
 3.3 Authority. Pledgor is not
precluded in any manner whatsoever from executing, and has the requisite authority to execute, this Agreement and to pledge, transfer and grant a security interest and lien in the Collateral as contemplated herein, without the approval or
authorization of any other person, including any governmental or regulatory authority whatsoever. 
 3.4 First Priority Lien. The
pledge, assignment and delivery of the Collateral pursuant to this Agreement will create a valid first priority lien on and a first priority perfected security interest in the Collateral pledged by Pledgor, and the proceeds thereof, securing the
payment of the Obligations. 
 3.5 Due Authorization. This Agreement has been duly authorized, executed and delivered by Pledgor and
constitutes a legal, valid and binding obligation of Pledgor enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, or other similar laws affecting the rights of creditors generally or by the
application of general equity principles. 
 4. Covenants of Pledgor. Pledgor hereby, covenants and agrees as follows:

 4.1 Sale, Encumbrance, Etc. Pledgor shall not sell, contract to sell, encumber, hypothecate or permit or suffer any attachment,
security interest, lien or other encumbrance or judgment or other judicial or involuntary lien against, or otherwise dispose of, the Collateral or any part thereof, unless Pledgor shall have obtained the prior written consent of Secured Party.

 4.2 Defense of Collateral. Pledgor shall defend, at Pledgor’s sole cost and expense, the Collateral against any and all liens,
charges, security interests and other encumbrances. 
 5. Events of Default. The occurrence of any of the following shall
constitute an event of default (“Event of Default”) under this Agreement: 
 5.1 Default under Note. Pledgor
shall fail to make a payment due under the Note following the applicable cure period. 
 5.2 Default on the Obligations. Pledgor shall
default in the performance or observance of any of the Obligations, other than Obligations under the Note, and such default shall not have been cured within thirty (30) days after Pledgor’s receipt of written notice thereof from Secured
Party. 
 5.3 Breach of Representation or Warranty. Any representation or warranty made by Pledgor herein shall be false in any
material respect and such default shall not have been cured within thirty (30) days after Pledgor’s receipt of written notice thereof from Secured Party. 
  

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 6. Rights of Secured Party Upon Default. 
 6.1 Rights and Remedies of Secured Party. In the event of any Event of Default, Secured Party shall be entitled, without further notice to Pledgor,
and without necessity for legal proceedings, to sell any or all of the securities serving as Collateral and, if any of the Obligations remains unsatisfied following such foreclosure, to seek payment of such unsatisfied amount from Pledgor pursuant
to the terms of the Note. In addition, and not by way of limitation of the foregoing, Secured Party shall have any or all remedies provided by law, including, but not limited to, all rights and powers of a secured party after default pursuant to the
California Commercial Code. 
 6.2 Application of Proceeds of Sale, etc. The proceeds of any sale or other disposition of, or any
collection of or realization on, any of the Collateral, shall be applied by Secured Party from time to time to pay: (a) first, all costs, fees and expenses paid or incurred by Secured Party in connection with the exercise, protection or
enforcement of Secured Party’s rights and remedies hereunder, (b) second, the entire indebtedness due Secured Party under the Note, and (c) third, the excess, if any, shall be paid to Pledgor or to whomever is then legally entitled to
receive the same. 
 7. Termination of Agreement. Upon payment in full of any and all Obligations, this Agreement and the
security interest created hereby in favor of Secured Party shall terminate and Secured Party shall return all of the Collateral then in its possession to Pledgor. 
 8. Amendments. The provisions of this Agreement may not be waived, altered, amended or repealed in whole or in part except by the written consent of the parties hereto. 
 9. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which
shall together constitute one and the same instrument. 
 10. Waiver. The failure or delay on the part of any party hereto to
exercise any right, remedy, power or privilege shall not operate as a waiver thereof. Any waiver must be in writing and signed by the party making such waiver. A written waiver of any default shall not operate as a waiver of any other default or of
the same type of default on a future occasion. 
 11. Successors and Assigns. This Agreement shall be binding on and shall
inure to the benefit of the parties hereto and their respective heirs, legal representatives, and permitted successors and assigns. 
 12.
Necessary Acts. Each party hereto shall perform any further acts and execute and deliver any additional agreements, assignments or documents that may be reasonably necessary to carry out the provisions or to effectuate the purposes of
this Agreement. 
  

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 13. Governing Law. This Agreement shall be governed by, interpreted under, and construed
and enforced in accordance with, the internal laws of the State of California. 
 14. Attorneys’ Fees and Costs. If any
legal action or other proceeding is brought in connection with this Agreement, the successful or prevailing party, whether or not such party has instituted the action, shall be entitled to recover from the non-prevailing party reasonable
attorneys’ fees and other costs incurred in such action or proceeding, in addition to any other relief to which it may be entitled. 
 15. Notices. All notices and other communications required or which may be given hereunder shall be in writing and shall be deemed effectively given or received for all purposes only (i) when presented personally, (ii) on
receipt when mailed by U.S. first class mail, registered or certified, postage prepaid, return receipt requested, (iii) one day after being sent if sent by professional overnight courier or messenger service, or (iv) on the date of transmission if
sent by telecopy or other means of electronic transmission, with receipt confirmed by answer back or otherwise, at the address indicated on the signature page to this Agreement (or addressed as any party may subsequently designate by notice in
accordance with this Section 15). 
 16. Headings and Captions. The headings and captions used herein are solely for the
purpose of reference only and are not to be considered in connection with the construction or interpretation of this Agreement. 
 17.
Assignment. Secured Party may assign, endorse or transfer any instrument evidencing all or any part of the Obligations, and the holder of such instrument shall be entitled to the benefits of this Agreement. 
 18. Entire Agreement. This Agreement, together with the documents referenced herein, contains all of the agreements of the parties hereto
with respect to the matters contained herein and no prior or contemporaneous agreement or understanding, oral or written, pertaining to any such matters shall be effective for any purpose. No provision of this Agreement may be amended or added to
except by an agreement in writing signed by the parties hereto or their respective successors in interest and expressly stating that it is an amendment of this Agreement. 
 [Signature Page Follows] 
  

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 IN WITNESS WHEREOF, Pledgor and Secured Party have duly executed this Stock Pledge Agreement as of the
day and year first above written. 
  

					
	 “Pledgor”
	 	
		
	  
	 	
	 [INIDIVIDUAL]
	 	
		
	 “Secured Party”
	 	
		
	Masimo Corporation, a Delaware corporation	 	
			
	 By:
	 	  
	 	
	 Name:
	 	  
	 	
	 Title:
	 	  
	 	

  

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 EXHIBIT A 
 STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE 
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto MASIMO CORPORATION, a Delaware corporation (the “Company”), [NUMBER] shares of common stock of the Company standing in the name of the undersigned on the books of the Company; the attached certificate number
         reflects the total number of shares of common stock held by the undersigned; and the undersigned does hereby irrevocably constitute and appoint the Secretary of the Company as attorney to
transfer such stock on the books of the Company with full power of substitution. 
 Dated:  
  

							
	 By:
	 		 	  
	 	
		 		 	 [NAME OF PLEDGOR]
	 	

  

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 Schedule A 
 Stock Certificate No. [ZZZ], representing [WWW] shares of Common Stock of Masimo Corporation issued in the name of [INDIVIDUAL]. 
  

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