Exhibit 10.49
BUY-IN LICENSE
AGREEMENT
MASIMO CORPORATION — MASIMO
INTERNATIONAL HOLDINGS
THIS BUY-IN LICENSE
AGREEMENT (the
“Agreement”) is effective as of the date of
execution (the “Effective Date”), by and between
Masimo Corporation (“Masimo US” ), a Delaware
corporation having its principal place of business at 40 Parker,
Irvine, CA 92618, and Masimo International Holdings
(“Masimo Cayman”), a Cayman Islands corporation
having its registered office at 75 Fort Street, P.O. Box 1350,
Grand Cayman, KY 1-1108 Cayman Islands (collectively, the
“Parties” and individually,
“Party”) .
RECITALS
WHEREAS, the Parties are, or intend to be, engaged in the
business of developing, manufacturing and selling Products (as such
term is defined below);
WHEREAS, Masimo US wishes to provide Masimo Cayman with
certain licenses to the Masimo US Intellectual Property Rights (as
such term is defined below) that cover Masimo US Intangibles (as
such term is defined below) and certain pre-existing customer
contract rights and obligations related to the Products.
NOW, THEREFORE,
in consideration of the premises and
of the mutual promises hereinafter set forth, the Parties hereto
agree as follows:
ARTICLE 1
EFFECTIVENESS OF
RECITALS/DEFINITIONS
The Recitals set forth above are an
integral part of this Agreement and shall have the same contractual
and legal significance as any other language in this Agreement.
These terms shall have the following meanings in this
Agreement:
Section 1.1
“Affiliate” of a Party means any entity
controlled by, controlling, or under common control with such
Party, where “control” in any of the foregoing forms
means ownership, either direct or indirect, of more than 50% of the
equity interest entitled to vote for the election of directors or
equivalent governing body. An entity shall be considered an
Affiliate only so long as such entity continues to meet the
foregoing definition.
Section 1.2
“Confidential Information” shall have the
meaning defined for that term in Article 5 (Confidential
Information) and shall also include Masimo US
Technology.
1
Section 1.3
“Documentation” means any information, including
without limitation, instructions, manuals, work plans, on-line help
files or other materials, regarding the development, installation,
maintenance, or use of the Products.
Section 1.4 “Fiscal
Quarterly Close Date” means the last day of the fiscal
quarter as determined in accordance with U.S. generally accepted
accounting principles ( “US GAAP” ) as applied
by Masimo US for financial accounting purposes.
Section 1.5 “Fiscal
Year” means Masimo US’ fiscal year and
“Fiscal Year End” means the last day of the
Fiscal Year as determined in accordance with US GAAP as
applied by Masimo US for financial accounting purposes.
Section 1.6 “Local
Business” means and includes the establishment,
marketing, and operation of any business for the purpose of selling
Products within a specific country or region.
Section 1.7 “Masimo US
Intangibles” means and includes any and all intellectual
property or other intangible assets relating to Masimo US
Technology, and all Masimo US Marketing Intangibles.
Section 1.8 “Masimo US
Intellectual Property Rights” means any and all rights
developed or arising before the Effective Date that Masimo US
presently owns or has the right to license to Masimo Cayman (by
whatever name or term known or designated), including, but not
limited to:
(a) rights associated with works of
authorship throughout the world, including but not limited to
copyrights, moral rights, and mask-works;
(b) trademarks, service marks and
trade name rights and similar rights;
(c) trade secret rights;
(d) patents, renewals, extensions,
reissues and re-examinations thereof, design rights, and other
industrial property rights that have the benefit of a filing date
before the Effective Date;
(e) all registrations, patent
applications (including continuations, continuations-in- part, and
divisions thereof) now or hereafter in force, that have the benefit
of a filing date before the Effective Date;
2
(f) all other intellectual and
industrial property rights (of every kind and nature and however
designated), including logos, “rental” rights and
rights to remuneration, whether arising by operation of law,
contract, license, or otherwise; and
(g) any additional applicable
intangible property as defined under U.S. Treasury Regulation
Section 1.482-4(b) (whether or not in documentary form and
whether or not patentable, copyrightable or otherwise protectable
under applicable laws).
Section 1.9 “Masimo
US Marketing Intangibles” means and includes any
and all trademarks, trade names, copyrighted material, designs,
service marks, applications and registrations of any of the
foregoing, packaging, marketing strategies, customer lists, and
other marketing information that are non-routine in nature, which
Masimo US presently owns or has the right to license to Masimo
Cayman before the Effective Date.
Section 1.10 “Masimo
US Technology” means and includes any and all
inventions, updates, adaptations, know-how, mask works, software,
technical data, trade secrets, functional or detailed design
specifications, algorithms, designs, and enhancements of any of the
foregoing whether patentable or unpatentable, registered or
unregistered, that Masimo US presently owns or has the right to
license to Masimo Cayman before the Effective Date, Masimo US
Technology shall not mean or include Masimo US Marketing
Intangibles. Masimo US Technology shall be considered Confidential
Information.
Section 1.11 “Net
Revenues” means the net revenues determined in accordance
with US GAAP as applied by Masimo US for financial reporting
purposes and shall mean the revenues recognized by or for the
account of Masimo Cayman and any Sublicensee (as defined below)
from the sale or the license of the Products; provided that Net
Revenues shall not include any of the following:
(a) Any government taxes or levies
collected from customers with respect to the sale of or the license
relating to the Products that are to be paid over to any applicable
governmental authority; or
(b) Any amounts associated with the
shipment and delivery of the Products, including, without
limitation, all freight charges, freight forwarding fees, customs
fees and insurance premiums; or
(c) Any allocable amounts that are
billed to customers for maintenance or other service of the
Products; or
3
(d) Any portion of the sales or the
license revenues of the Products that is refunded by Masimo Cayman
or any Sublicensee to a customer; or
(e) Any revenues received from an
Affiliate.
Section 1.12
“Products” means sensors, monitors, equipment,
devices, cables, circuit boards, machines, software and other
similar or related products (including but not limited to upgrades
and enhancements) that incorporate, or are made in accordance with
Masimo US Intellectual Property Rights, in whole or in
part.
Section 1.13
“Sublicensee” means any Affiliate of Masimo
Cayman to whom Masimo Cayman sublicenses or transfers any portion
of its rights under this Agreement to use the Masimo US Intangibles
within one or more countries in the Territory and who agrees in
writing to be bound by and comply with all of the terms, conditions
and obligations pertaining to “Sublicensees” under this
Agreement.
Section 1.14
“Territory” means all countries other than the
United States, or as mutually agreed upon from time to time in
writing by the Parties, and shall be determined by the shipping
destination of Products to customers contained in the customer
invoices.
Section 1.15 “Third
Party” means and includes any individual, corporation,
trust, estate, partnership, joint venture, company, association,
league, governmental bureau or agency, or any other entity
regardless of the type or nature, which is not a Party or an
Affiliate.
ARTICLE 2
GRANTS OF LICENSES
Section 2.1 Licenses .
Subject to the terms and conditions of this Agreement, and unless
otherwise mutually agreed to by the Parties in writing, Masimo US
hereby grants to Masimo Cayman the following licenses
(individually, a “License” and collectively, the
“Licenses”) :
(a) during the term of this
Agreement, a non-exclusive, royalty-bearing license under the
Masimo US Intellectual Property Rights to make, have made, use,
sell, offer to sell, import, perform, display, reproduce, and
distribute the Products within the Territory and to make
improvements, modifications and/or enhancements to the Masimo US
Technology; and
(b) during the term of this
Agreement, a non-exclusive, royalty-bearing license to use the
Masimo US Marketing Intangibles in the Territory, solely in
compliance with any
4
procedures for use of the Masimo US
Marketing Intangibles as which may be promulgated from time to time
by Masimo US. The License under this Section 2.l(b) will
include, without limitation, the right to indicate to the public
that Masimo Cayman is an authorized licensee of Masimo US and to
advertise Products in the Territory under the Masimo US Marketing
Intangibles.
Section 2.2 Sublicenses
. Masimo Cayman shall have the right to sublicense the rights
granted to Masimo Cayman pursuant to Section 2.1 (Licenses)
with the written consent of Masimo US.
Section 2.3 Delivery of
Masimo US Technology and Masimo US Marketing Intangibles . Upon
the Effective Date, and thereafter if appropriate, Masimo US shall
make available to Masimo Cayman such Documentation and other
elements of the Masimo US Technology and of the Masimo US Marketing
Intangibles, as necessary or appropriate for Masimo Cayman’s
operation under the Licenses granted in Section 2.1
(Licenses).
Section 2.4 Foreign Goodwill
and Going Concern Value . Masimo US hereby agrees that it is
contributing to the capital of Masimo Cayman any and all goodwill
and going concern value associated with the development, provision,
sale and support of the Products in the Territory, and Masimo US
will not receive any compensation for such contribution.
Section 2.5 Pre-existing
Customer Contracts . Masimo US hereby agrees to transfer to
Masimo Cayman all of its pre-existing customer contract rights and
obligations and pending sales orders associated with the sale of
Products in the Territory, and Masimo US will receive compensation
for such transfer as specified in Section 4.1
(Payment).
ARTICLE 3
RESERVATION OF RIGHTS AND
PROTECTION OF INTANGIBLES
Section 3.1 Retention of
Legal Title and Ownership . The legal title to, and legal
ownership of, the Masimo US Intellectual Property Rights, Masimo US
Intangibles, improvements, modifications and enhancements thereto
and derivative works thereof, whether made by Masimo US or by
Masimo Cayman and/or its Sublicensees (“Rights and
Intangibles”), is and shall at all times remain with
Masimo US, and Masimo Cayman and/or its Sublicensees shall not at
any time during or after the expiration or termination of this
Agreement in any way question or dispute the ownership thereof by
Masimo US or its licensors. Subject to the Licenses granted to
Masimo Cayman or its Sublicensees in this Agreement, Masimo
Cayman
5
and/or its Sublicensees hereby irrevocably
assigns all its rights, title and interest in and to such Rights
and Intangibles to Masimo US and will execute and provide to Masimo
US all documents and instruments of conveyance respecting the
foregoing Rights and Intangibles as may be appropriate to perfect
Masimo US’ legal title thereto and legal ownership thereof.
The absence of such documents and instruments of conveyance shall
not limit the rights of Masimo US in the foregoing Rights and
Intangibles. To the extent any of the rights, title and interest in
and to the Rights and Intangibles cannot be assigned by Masimo
Cayman and/or its Sublicensees to Masimo US, Masimo Cayman and/or
its Sublicensees hereby grants to Masimo US an exclusive,
royalty-free, transferable, perpetual, irrevocable, unrestricted,
worldwide license (with rights to sublicense through one or more
tiers of sublicensees) under such non-assignable Rights and
Intangibles. To the extent any of such Rights and Intangibles can
be neither assigned nor licensed by Masimo Cayman or its
Sublicensees to Masimo US, Masimo Cayman and/or its Sublicensees
hereby irrevocably waives and agrees never to assert such
non-assignable and non-licensable Rights and Intangibles against
Masimo US, Masimo US’ Affiliates, Masimo US’ licensees
or Masimo US’ successors, or its and their respective
customers.
Section 3.2 Reservation of
Rights . All Masimo US Intellectual Property Rights and all
rights in the Masimo US Intangibles not expressly granted to Masimo
Cayman under this Agreement are reserved to Masimo US. The Licenses
granted in Section 2.1 (Licenses) are granted solely to Masimo
Cayman.
Section 3.3 Trademark and
Service Mark Registrations in the Territory . Masimo Cayman
and/or its Sublicensees shall advise Masimo US regarding the
appropriate registrations or filings appropriate to protect the use
of the Masimo US Marketing Intangibles in the Territory. Masimo US
may at its sole discretion make, and Masimo Cayman and/or its
Sublicensees shall cooperate with Masimo US to make, such
registrations or filings with the appropriate authorities,
including without limitation trademarks and service marks in the
Territory related to the Masimo US Marketing Intangibles and of the
Local Businesses. All such registrations or filings shall be and
remain the property of Masimo US. Subject to the Licenses granted
to Masimo Cayman in this Agreement, Masimo Cayman hereby
irrevocably assigns all its rights, title and interest in and to
the Masimo US Marketing Intangibles to Masimo US, and will execute
and provide to Masimo US, all documents and instruments of
conveyance respecting such Masimo US Marketing Intangibles,
registrations and filings as may be appropriate to perfect Masimo
US’ legal title thereto and legal ownership interest therein.
The absence of such documents and instruments of conveyance shall
not limit the rights of Masimo US in such Masimo US Marketing
Intangibles, registrations or filings. Masimo Cayman shall have an
agreement in place with all of its Sublicensees to enable Masimo
Cayman to satisfy and fulfill its obligations under this
Section 3.3.
6
Section 3.4 Name Branding;
Product Protection . Any promotional materials used or
disseminated by Masimo Cayman and/or its Sublicensees relating to
the Local Business and/or the Products shall incorporate the
appropriate Masimo US Marketing Intangibles. Masimo Cayman and/or
its Sublicensees shall use the Masimo US Marketing Intangibles as
the sole brand for the Local Business and the Products, and not use
any trademark, service mark, trade name, or similar identifiers
other than those within the Masimo US Marketing Intangibles in
connection with the Local Business and Products. Masimo Cayman
and/or its Sublicensees shall fully comply with any procedures for
use of the Masimo US Marketing Intangibles which may be promulgated
from time to time by Masimo US in relation to Masimo Cayman’s
or its Sublicensees’ use of the Masimo US Marketing
Intangibles.
Section 3.5 Further
Restrictions . Masimo Cayman and/or its Sublicensees agrees to
state in appropriate places on all materials using the Masimo US
Marketing Intangibles that the Masimo US Marketing Intangibles are
trademarks, service marks and/or trade names of Masimo US and to
include the appropriate marking symbols. Masimo US grants no rights
under this Agreement other than as expressly granted hereunder,
whether by implication, estoppel or otherwise. Masimo Cayman and/or
its Sublicensees agrees not to take any action inconsistent with
the ownership of the Masimo US Marketing Intangibles and further
agrees to take, at Masimo US’ reasonable expense and solely
under Masimo US’ control, any action, including the conduct
of legal proceedings, that Masimo US deems necessary to establish
and preserve its rights in the Masimo US Marketing Intangibles.
Masimo Cayman and/or its Sublicensees shall not adopt, use or
attempt to register any trademarks, service marks or trade names
that are confusingly similar to the Masimo US Marketing Intangibles
or in such a way as to create combination marks with the Masimo US
Marketing Intangibles.
Section 3.6 Quality
Control . The nature and quality of all Products sold and all
promotional materials provided or used by Masimo Cayman and/or its
Sublicensees, including the Masimo US Marketing Intangibles, must
conform to any procedures for use of the Masimo US Marketing
Intangibles as may be promulgated from time to time by Masimo US.
Further, Masimo Cayman and/or its Sublicensees shall use their best
efforts to have the highest quality of Products and of such
promotional materials at all times, and a quality level that is at
least as high as Masimo US’ quality level for its own
Products and promotional materials. Masimo Cayman and/or its
Sublicensees shall monitor their quality in a manner specified by
Masimo US and shall provide quality data and information to Masimo
US promptly upon request. If requested to do so by Masimo US,
Masimo Cayman and/or its Sublicensees will promptly modify the
Products and/or the promotional materials to correct any quality
defects. Masimo US may terminate or suspend, in whole or in part,
Masimo Cayman’s license to use
