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Exhibit 10.1
 
 
CONFIDENTIAL TREATMENT REQUESTED
 
[***] – CONFIDENTIAL PORTIONS OF THIS AGREEMENT WHICH HAVE BEEN REDACTED ARE
MARKED WITH BRACKETS (“[***]”).  THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY
WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
 
 
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
 
THIS IS AN AGREEMENT between Medtronic, Inc. (“Medtronic”), a Minnesota
corporation with its principal place of business at 710 Medtronic Parkway,
Minneapolis, Minnesota  55432, Salient Surgical Technologies, Inc. (“Salient”),
a Delaware corporation with its principal place of business at 180 International
Drive, Portsmouth, New Hampshire 03801, and Bovie Medical Corporation (“Bovie”),
a Delaware corporation with its principal place of business at 734 Walt Whitman
Road, Melville, New York  11747 (the “Agreement”).  Medtronic and Salient are
collectively referred to hereinafter as “Plaintiffs”, and Medtronic, Salient,
and Bovie are collectively referred to hereinafter as the “Parties”.
 
WHEREAS Medtronic is the owner of United States Patent No. 7,364,579 titled
“Fluid-Assisted Electrosurgical Device” (“the ‘579 Patent”);
 
WHEREAS Salient is an exclusive, world-wide licensee of the ‘579 Patent,
pursuant to agreement between Medtronic and Salient;
 
WHEREAS the Parties have been involved in a litigation concerning Bovie’s
alleged infringement of the ‘579 patent in a case styled as Medtronic, Inc. &
Salient Surgical Technologies, Inc. v. Bovie Medical Corporation, Case No.
10-494 (SLR), pending before the United States District Court for the District
of Delaware (the “Delaware Action”).
 
WHEREAS Bovie filed Counterclaims against Plaintiffs in the Delaware Action;
 
WHEREAS the Parties desire to settle and resolve all claims pending in the
Delaware Action between and among each other;
 
WHEREAS concurrently with the execution of this Settlement Agreement, the
parties are entering into a stipulation of dismissal in the form attached
hereto; and
 
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties, and other terms and conditions contained herein, the sufficiency of
which is hereby acknowledged, the Parties agree as follows:
 
1.           PAYMENT.  In consideration of the promises, covenants and releases
granted under this Agreement, Medtronic agrees to pay Bovie the total sum of
Seven Hundred Fifty Thousand Dollars (U.S. $750,000) on signing and execution of
this Agreement by all Parties (“Effective Date”).

 
 

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[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.
 
1.1           [***]
 
2.             BOVIE’S WITHDRAWAL FROM MARKET.  In consideration of the
promises, covenants and releases granted in this Agreement, Bovie, its future
licensees of its saline-enhanced RF handpiece technology (hereinafter “Future
Licensees”), and any current and future divisions, departments, subsidiaries,
parents, affiliates, successors, and predecessors of Bovie, agree to cease and
refrain from the importation, use, sale, purchase for resale, offer for sale,
advertisement, or possession for resale, both within the United States and
worldwide of any monopolar and bipolar saline-enhanced RF handpiece technology
(including SEER and BOSS) (hereinafter “Saline-Enhanced RF Device Business”)
from and including the Effective Date through and including February 22, 2015
(hereinafter “Withdrawal Period”).
 
2.1           Bovie agrees, on behalf of itself, its Future Licensees, and its
current and future divisions, departments, subsidiaries, parents, affiliates,
successors, and predecessors that it will not seek to directly or indirectly
enter into the Saline-Enhanced RF Device Business within the United States and
worldwide through and including February 22, 2015.
 
2.2           Bovie further agrees that commencing promptly after the Effective
Date and during the Withdrawal Period, Bovie shall store its entire finished
goods inventory of products related to the Saline-Enhanced RF Device Business in
a secure, offsite storage facility.  Such finished goods inventory, whether in
the U.S. or abroad, shall be placed into the secure, offsite storage upon its
receipt from Bovie’s suppliers.  Bovie shall provide Salient with annual written
reports during the Withdrawal Period certifying that the stored goods have
remained intact within the storage facility.  Furthermore, Salient may request
and Bovie shall provide a copy of the records from the storage facility as
substantiation of Bovie’s certifications.  Bovie may elect to destroy and
dispose of the stored goods and, if so, Bovie shall provide Salient advance
written notice at least thirty (30) days prior to such action, and shall also
provide prompt written notice to Salient certifying said destruction and
disposal.
 
2.3           Bovie further agrees on behalf of itself, its Future Licensees,
and its current and future divisions, departments, subsidiaries, parents,
affiliates, successors, and predecessors that it will not knowingly and
voluntarily provide assistance to a third party that would allow that third
party to enter into the Saline-Enhanced RF Device Business within the United
States and worldwide through and including February 22, 2015.
 
3.             [***]
 
4.             DISMISSAL OF PENDING LITIGATION.  The parties agree that this
Settlement Agreement is expressly contingent upon the payment of $750,000.00 as
provided and specified in Section 1 above, the execution of the mutual releases
set forth herein and the stipulation of dismissal of the Delaware
Action.  Concurrently with the execution of this Agreement, the Parties shall
execute the documents in the form attached as Exhibit 1 pursuant to which the
Parties agree to dismiss the Delaware Action with prejudice including all claims
and counterclaims, and any claim which could have been had or brought by and
between the Parties arising from or connected with the Delaware Action, and the
parties acknowledge the release and discharge of each other from any and all
such claims.

 
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[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.
 
4.1           Notwithstanding the foregoing, each Party intends and agrees that
the United States District Court for the District of Delaware shall be the
exclusive jurisdiction for the purpose of resolving any claim or controversy
arising out of or relating to the terms and conditions of this Agreement, a
Party’s performance or failure to perform hereunder, or any other claim or
dispute arising out of the Agreement.
 
4.2           Each Party further agrees to waive any objections it may have now
or hereafter to the venue of any proceeding filed in the United States District
Court for the District of Delaware for the purposes referenced in this
Section.  In any such proceeding to enforce the terms of this Agreement, the
Court shall award to the prevailing party its reasonable attorneys’ fees and
costs incurred.
 
5.             NO ADMISSION OF INFRINGEMENT OR LIABILITY.  This Agreement is
entered into in order to compromise and settle disputed claims, without any
acquiescence on the part of any Party as to the merit of any patent-infringement
claim, defense, affirmative defense, counterclaim, or of liabilities or damages
related to any patent rights or otherwise.  Neither this Agreement nor any part
thereof, shall be, or used as, an admission of infringement or liability by
anyone, at any time, for any purpose.
 
6.             VALIDITY AND ENFORCEABILITY OF PATENTS.
 
6.1           Bovie acknowledges, on behalf of itself, its Future Licensees, and
its current and future divisions, departments, subsidiaries, parents,
affiliates, successors, and predecessors, the validity and enforceability of
U.S. Patent No. 7,364,579 (the “ ‘579 Patent”), and application No. 08/393,082,
filed February 22, 1995, now Patent No. 6,063,081; application No. 08/556,784,
filed November 2, 1995, now Patent No. 5,897,553; application No. 09/580,228,
filed on May 26, 2000, now Patent No. 6,358,248; application No. 09/955,496,
filed on September 18, 2001, now Patent No. 6,585,732; application No.
10/411,921, filed on April 11, 2003, now Patent No. 6,764,487; application No.
10/883,178, filed on July 1, 2004, now Patent No. 6,949,098; application No.
11/230,839, filed on September 20, 2005, now Patent No. 7,166,105 (collectively,
“the ‘579 Patent’s Related Patents and Patent Applications”), through and
including February 22, 2015.  Bovie further agrees, on behalf of itself, its
Future Licensees, and its current and future divisions, departments,
subsidiaries, parents, affiliates, successors, and predecessors that it will not
knowingly and voluntarily participate, or knowingly and voluntarily assist any
third party, in any U.S. Patent Office proceeding or District Court litigation
to invalidate and/or declare unpatentable any claim of the ‘579 Patent or any of
the ‘579 Patent’s Related Patents and Patent Applications, through and including
February 22, 2015.
 
6.2           Bovie further acknowledges, on behalf of itself, its Future
Licensees, and its current and future divisions, departments, subsidiaries,
parents, affiliates, successors, and predecessors, the validity and
enforceability of European Patent, EP 0 863726, and divisional application No.
02015008.2, now European Patent No. 1 245 196 (“the EP Related Patent and Patent
Application”), through and including February 22, 2015.  Bovie further agrees,
on behalf of itself, its Future Licensees, and its current and future divisions,
departments, subsidiaries, parents, affiliates, successors, and predecessors
that it will not knowingly and voluntarily participate, or knowingly and
voluntarily assist any third party, in any Patent Office proceeding or
litigation to invalidate and/or declare unpatentable any claim of European
Patent, EP 0 863726, or any EP Related Patent and Patent Application, through
and including February 22, 2015.

 
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[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

7.             RELEASES.
 
7.1           In exchange for Bovie’s above agreements, Medtronic and Salient,
together with their respective agents, servants, employees, attorneys,
predecessors, successors, assigns, parent and parents, subsidiaries and
affiliates, and including the owners, shareholders, directors and officers of
each of the foregoing (collectively, the “Salient Parties”) forever irrevocably
release and discharge Bovie, its agents, servants, employees, attorneys,
predecessors, successors, assigns, parent and parents, subsidiaries and
affiliates, and including the owners, shareholders, directors and officers of
each of the foregoing (collectively, the “Bovie Parties”) from any and all
claims, demands, threats, suits or proceedings that the Salient Parties have or
claim to have or may hereafter have or claim to have against any of the Bovie
Parties for infringement of either the ‘579 Patent or any of the ‘579 Patent’s
Related Patents and Patent Applications, or the European Patent, EP 0 863726,
and the EP Related Patent and Patent Application.  The Salient Parties further
forever irrevocably release and discharge the Bovie Parties from any and all
claims, demands, threats, suits or proceedings that the Salient Parties have or
claim to have directly or indirectly related to or arising from the Delaware
Action.
 
7.2           In exchange for Medtronic’s and Salient’s above agreements, the
Bovie Parties forever irrevocably release and discharge the Salient Parties from
any and all claims, demands, threats, suits or proceedings that the Bovie
Parties have or claim to have directly or indirectly related to or arising from
the Delaware Action.
 
8.             ATTORNEYS’ FEES AND COSTS.  Except as expressly provided in this
Agreement, each Party shall bear its own fees, costs, and expenses incurred in
the Delaware Action.
 
9.             PRESS RELEASE  Bovie has drafted and will release a press release
that is mutually agreeable to the Parties, which announces the settlement and
discloses the material terms of the settlement to the extent required by
applicable law, in the opinion of Bovie’s securities counsel.  Notwithstanding,
Bovie may include language in the press release regarding a future OEM
relationship between Bovie and Salient.  A copy of the press release is attached
hereto as Exhibit 2.
 
10.           CONFIDENTIAL.  Subject to the public disclosures permitted under
paragraph 9, above, each Party shall keep the terms of this Agreement
confidential.  Notwithstanding the foregoing, a Party may disclose such
information (a) to the extent it is required to do so by applicable law; (b) to
its legal counsel; (c) to accountants, banks, financing sources, prospective
purchasers, and their advisors; (d) to officers or employees as needed to
perform the Agreement; and, (e) in connection with the enforcement of this
Agreement or any rights hereunder.

 
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[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.
 
11.           NOTICES.  Any notice, request, demand, or other communication
required or permitted hereunder shall be in writing, shall reference this
Agreement, and shall be deemed to be properly given: (a) when delivered
personally; (b) when sent by facsimile, with written confirmation of receipt;
(c) when sent by electronic mail (email) with confirmation of delivery; or, (d)
one (1) business day after deposit with a nationally recognized overnight
courier with written confirmation of receipt.  All notices shall be sent to the
addresses set forth below (or to such other address or person as may be
designated by a Party by giving written notice to the other Party pursuant to
this Section):
 
If to Medtronic:
 
Medtronic, Inc.
710 Medtronic Parkway
Minneapolis, Minnesota  55432
Attention:                                
[insert email]

If to Salient:
 
Salient Surgical Technologies, Inc.
180 International Drive
Portsmouth, New Hampshire 03801
Attention: Denise C. Lane, Esq., Director of Legal Affairs & I.P.
denise.lane@salientsurgical.com

If to Bovie:
 
Bovie Medical Corporation
5115 Ulmerton Road
Clearwater, Florida 33760
Attention: Leonard Keen, Esq., VP & General Counsel
Leonard.Keen@boviemed.com 

12.           NONASSIGNABILITY.  This Agreement may not be assigned by either
Party without the prior written consent of all other Parties.  Notwithstanding
the foregoing, such other Party’s consent shall not be required for any
assignment to an entity that succeeds to all or substantially all of the
assigning Party’s business or assets relating to this Agreement, whether by
sale, merger, operation of law or otherwise.  This Agreement shall be binding
upon and shall inure to the benefit of the Parties and their respective
permitted successors and assigns.
 
13.           FURTHER ASSURANCES.  Each Party agrees to take or cause to be
taken such further actions and to execute, deliver, and file or cause to be
executed, delivered, and filed such further documents and instruments, and to
obtain such consents as may be reasonably required or requested in order to
effectuate fully the purposes, terms and conditions of this Agreement.
 
14.           APPLICABLE LAW.  This Agreement shall be governed by the laws of
the State of Delaware, and all rights and obligations of the Parties to this
Agreement, and the interpretation, construction, and enforceability hereof shall
also be governed by the laws of the State of Delaware.

 
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[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.
 
15.           SEVERABILITY.  If any term or other provision of this Agreement is
determined by a court, administrative agency or arbitrator to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to either Party.  Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the fullest
extent possible.
 
16.           FAILURE OR INDULGENCE NOT WAIVER.  No failure or delay on the part
of either Party hereto in the exercise of any right hereunder shall impair such
right or be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or partial
exercise of any such right preclude other or further exercise thereof or of any
other right.
 
17.           AMENDMENT.  No change or amendment will be made to this Agreement
except by an instrument in writing signed on behalf of each of the Parties to
such agreement.
 
18.           CUMULATIVE REMEDIES.  The rights and remedies of the Parties as
set forth in this Agreement are not exclusive and are in addition to any other
rights and remedies now or hereafter provided by law or at equity.
 
19.           CONSTRUCTION.  This Agreement has been negotiated by the Parties
and shall be interpreted fairly in accordance with its terms and without any
construction in favor of or against any Party.
 
20.           COUNTERPARTS.  This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which shall
constitute one and the same agreement.
 
21.           REPRESENTED BY COUNSEL.  Each Party acknowledges that it has been
represented by independent counsel of its choice throughout all negotiations
which preceded the execution of this Agreement and all other documents to be
executed referred to herein (the “Subject Documents”), and that the Subject
Documents have been executed after consultation with such independent legal
counsel.
 
22.           REPRESENTATION AND WARRANTY OF AUTHORITY.  The Parties hereto, and
the individuals executing this document, personally represent and warrant that
each has the capacity and authority to execute this Agreement and bind the
respective Parties hereto, together with their affiliates, subsidiaries,
parents, assignees, and licensees, all of whom are expressly bound by the terms
of this Agreement.

 
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[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.
 
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed on the date written below.

Medtronic, Inc.

By:
/s/ Gary Ellis
Name:
Gary Ellis
Title:
Senior VP and CFO
Date:
2/28/2011

Salient Surgical Technologies, Inc.

By:
/s/ Joseph Army
Name:
Joseph Army
Title:
CEO
Date:
2/24/2011

Bovie Medical Corporation

By:
/s/ Andrew Makrides
Name:
Andrew Makrides
Title:
President and CEO
Date:
2/16/2011

 
 
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