Exhibit 10.1

CONSULTING AGREEMENT

Consulting Agreement, dated as of January 1, 2007, between ATRICURE, INC.
(hereinafter called “ATRICURE”), a Delaware corporation with offices at 6033
Schumacher Park Drive, West Chester, Ohio 45069, and Michael D. Hooven
(hereinafter called “CONSULTANT”), an individual with a residence at 7778
Bennington Drive, Cincinnati, Ohio 45241.

WITNESSETH

WHEREAS, ATRICURE desires to engage CONSULTANT to render professional consulting
services and advice, and

WHEREAS, CONSULTANT desires to render such services and advice to ATRICURE;

NOW, THEREFORE, in consideration of the premises and of the mutual promises and
convenants herein contained, the parties hereto agree as follows:

1. Best Efforts; Field; Time Devotion.

(a) Best Efforts. CONSULTANT shall use his best efforts to provide consulting
services and advice to ATRICURE in the Field (as defined below) in the manner
described below.

(b) Field. As used in this Agreement, the term “Field” shall refer to the
creation and development of new products and product platforms (including but
not limited to those which are less invasive) relating to (i) the diagnosis,
treatment and prevention of cardiac arrhythmias and (ii) the prevention or
reduction of strokes utilizing cardiac devices (including appendage exclusion of
the atrium and appendage exclusion systems, generally).

(c) Types of Services. The consulting services and advice contemplated herein
may include, but will not necessarily be limited to, review of technology and
devices, the rendering of advice and input, discussions with ATRICURE personnel
and other ATRICURE consultants, assistance and support in development and
development planning, and development of clinical and animal protocols,
attending training seminars, observation of live cases, participation in animal
or cadaver programs, design, development and clinical testing of devices,
response to FDA points of deficiency, and laboratory evaluation of products,
technologies and/or procedures.

(d) Time Devotion. The parties agree that the compensation provided for in
Section 2 is based upon CONSULTANT devoting twenty (20) hours per week to the
performance of his obligations hereunder. CONSULTANT agrees that he will render
such

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number of hours per week if requested by ATRICURE of if the circumstances
(including the nature of the project(s) and ATRICURE’s desired time frame)
reasonably require it. In addition, CONSULTANT shall exercise his best efforts
to consult with, and otherwise make himself available to, ATRICURE at such times
as it may request, including attending meetings and making himself available for
conference calls.

2. Compensation; Expenses.

(a) Compensation. As consideration for all services to be rendered and performed
under this Agreement and for assigning the rights to inventions, designs,
patents, trademarks and copyrights and other intellectual property as provided
for in this Agreement, CONSULTANT will be compensated by ATRICURE at the rate of
$12,000 per month, with appropriate proration for any periods of less than a
full month. Such amount will be paid in substantially equal installments as and
when regular payments of salary are made by ATRICURE to its employees.

(b) Expenses. ATRICURE shall reimburse CONSULTANT for all reasonable travel and
accommodation expenses incurred by him in connection with travel (e.g., for
meetings), outside the greater Cincinnati area, that has been requested by
ATRICURE in connection with CONSULTANT’s performance of this Agreement. In
addition, ATRICURE shall reimburse CONSULTANT for such other expenses, incurred
by CONSULTANT in connection with the performance of this Agreement, as may be
approved in advance by ATRICURE.

3. Term. The term of this Agreement shall be for one (1) year, beginning on the
date hereof and ending on December 31, 2007; provided, however, that in the
event of the consummation of a Change of Control (as defined in ATRICURE’s 2005
Equity Incentive Plan, but ignoring for these purposes subsection (iii) of such
definition), this Agreement shall automatically terminate. The date on which
this Agreement shall end, whether by expiration or otherwise, shall be referred
to herein as the “Termination Date.”

4. No Inconsistent Obligations. CONSULTANT represents that (a) he is under no
obligation to any third party that would interfere or conflict with his ability
to render to ATRICURE the professional services herein described, (b) he is
subject to no obligation, commitment, fiduciary duty or other duty or
responsibility of any kind or nature, that would interfere with his obligations
under Section 8 hereof. CONSULTANT acknowledges that his representations
contained in this Section 4 are an essential condition of ATRICURE’s agreement
hereunder.

5. Independent Contractor. CONSULTANT’s services are made available to ATRICURE
on the basis that CONSULTANT will be an independent contractor. CONSULTANT will
not be eligible for any employee benefits under any plan or program maintained
by ATRICURE. CONSULTANT acknowledges that he is solely responsible for any and
all applicable federal, state and local income taxes; social security
contributions; unemployment, disability or worker’s compensation insurance
contributions; and any and all other payroll taxes or payroll deductions with
respect to his fees and services hereunder.

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6. Liability Limitation. CONSULTANT agrees to use his best efforts in providing
consulting and advice to ATRICURE hereunder, but shall not be responsible for
any liability resulting therefrom, unless due to gross negligence or willful
misconduct.

7. Confidential Information.

(a) Restrictions. Any Confidential Information (as defined below) acquired by
CONSULTANT from ATRICURE or developed or acquired in the course of performing
the consulting services hereunder shall not be disclosed by CONSULTANT to others
or used by CONSULTANT for CONSULTANT’s own benefit or the benefit of any third
party without the prior written consent of ATRICURE. As used in this Agreement,
“Confidential Information” shall mean and include any and all proprietary,
sensitive or confidential information, data, methods, techniques, processes,
formulas, designs, drawings, models, trade secrets, inventions, ideas, know-how,
technical information, business records, technical data, test results, financial
data or information, marketing data or business plans, customer information,
pricing information, product specifications, and any and all information of any
nature whatsoever embodied or included in any of the foregoing, in whatever
medium recorded or contained; provided however, that Confidential Information
shall not include: (i) information which is or becomes, through no fault of
CONSULTANT, generally known to the public; or (ii) information received by
CONSULTANT on a non-confidential basis from a source other than ATRICURE,
provided that CONSULTANT has no reason to believe that such source is or was
under a duty of confidentiality to ATRICURE.

(b) Turnover. Upon the earlier to occur of (i) termination of this Agreement and
(ii) a request therefor by ATRICURE, CONSULTANT will return to ATRICURE all
records, data, notes, reports and other documents or property containing or
embodying Confidential Information furnished by ATRICURE or developed pursuant
to the relationship hereunder and all copies thereof in any medium. For all
purposes of this Agreement, “Confidential Information” shall be deemed also to
include proprietary, sensitive or confidential information, know-how and other
items of the type described above which belong to third parties and which was
acquired by CONSULTANT in the course of his retention hereunder.

(c) Independent Development. Notwithstanding the foregoing, it is agreed that,
by means of CONSULTANT’s prior training, experience, developments and
inventions, CONSULTANT may already have knowledge of aspects of the information
which ATRICURE considers to be Confidential Information. CONSULTANT’s consulting
relationship with ATRICURE shall not in any way limit CONSULTANT’s right, to the
extent not otherwise in conflict with his obligations hereunder, to pursue
ideas, devices, and inventions, independently developed by him, alone or in
conjunction with others, and/or to obtain patent protection for said independent
ideas, devices and inventions, provided that such ideas, devices or inventions
do not involve the use or disclosure of Confidential Information acquired from
ATRICURE or developed in the course of performing the consulting services
hereunder.

8. Inventions. Any inventions, ideas, original works of authorship,
developments, improvements and trade secrets (collectively, “Inventions”) made,
conceived or reduced to practice by CONSULTANT, alone or jointly with others, in
connection with or during the performance of consulting services for ATRICURE
shall be the sole property of ATRICURE

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(and shall be deemed, upon creation, to have been automatically assigned to
ATRICURE), and CONSULTANT shall execute, acknowledge and deliver to ATRICURE
such documents and papers, including assignments, applications for patents, and
any and all other documents and papers, as may be reasonably requested by
ATRICURE to effectuate the provisions of this Section 8 and to permit ATRICURE
to publish or protect said inventions, improvements and ideas by patent or
otherwise in any and all countries and to vest title to said patents,
inventions, improvements and ideas in ATRICURE or its nominees, their successors
or assigns. CONSULTANT shall render all such assistance as ATRICURE may require
in any patent office proceeding or litigation, or other enforcement or defense
efforts, involving said inventions, improvements or ideas. For the removal of
doubt, any Inventions that are made, conceived or reduced to practice by
CONSULTANT, alone or jointly with others, but are not made, conceived or reduced
to practice in connection with or during the performance of consulting services
for ATRICURE shall belong to CONSULTANT.

9. Non-Compete; Non-Solicitation.

(a) Covenant. In consideration for the compensation paid to him under this
Agreement, CONSULTANT agrees that during the period beginning on the date of
this Agreement and ending on December 31, 2009 (the “Covenant Period”), he will
not, directly or indirectly:

(i) subject to the exception contained in Section 9(c) below, engage in (whether
as an employee, consultant, proprietor, partner, director or otherwise), or
assist any other person or entity in engaging in, or have any ownership interest
in, or participate in the financing, operation, management or control of, any
person, firm, corporation or business that engages in a Restricted Business (as
defined below) in the Restricted Territory (as defined below) (it being agreed
that ownership of (A) no more than one percent (1%) of the outstanding voting
stock of a publicly traded corporation, or (B) any stock CONSULTANT shall
presently own (so long as such stock shall not have been acquired in violation
of the 2005 Agreement or any predecessor thereof) shall not constitute a
violation of this provision); or

(ii) induce any employee or independent contractor of ATRICURE to leave the
employ of, or cease the rendition of services to, ATRICURE.

(b) Definitions. As used herein, the terms:

(i) “Restricted Business” shall mean the research, design, development,
manufacture, distribution, sale, marketing or promotion of medical devices that
are designed to either (A) diagnose, treat or prevent cardiac arrhythmias or
(B) prevent or reduce strokes through the use of products that are applied to
the heart and/or cardiac structures (including appendage exclusion systems); and

(ii) “Restricted Territory” shall mean the United States.

(c) Exception. Notwithstanding Section 9(a), it shall not be a violation of
Section 9(a) for CONSULTANT to render services as an employee or consultant to a
firm, corporation or business that engages in a Restricted Business so long as
the services rendered by CONSULTANT do not relate, in any material respect, to
the activities of such firm, corporation or business that constitute the
Restricted Business.

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(d) First Right of Offer.

(i) General. In addition to, and not in limitation of, CONSULTANT’s obligations
under Section 9(a), CONSULTANT agrees that, during the Covenant Period,
CONSULTANT will not, directly or indirectly, engage (whether alone or jointly
with others) in the distribution, sale, marketing or promotion of any Permitted
Cardiac Device (as defined below) unless and until CONSULTANT shall have
(A) notified ATRICURE thereof, describing in reasonable detail both the
Permitted Cardiac Device and CONSULTANT’s proposed activities with respect
thereto and (B) if requested by ATRICURE, engaged in good faith discussions and
negotiations with ATRICURE for a reasonable amount of time (but in no event less
than two (2) months, unless ATRICURE shall have notified CONSULTANT, or shall
otherwise have clearly manifested, that it is no longer interested in the
project) with a view toward consummating, within such period, one or more
agreements in which ATRICURE and CONSULTANT would jointly, by any means
whatsoever (including sale, license, joint venture, consulting arrangement or
otherwise), engage in the activities in which CONSULTANT proposes to engage.

(ii) Permitted Cardiac Device. For purposes of this Agreement, the term
“Permitted Cardiac Device” shall mean any medical device that is designed to
prevent, treat or diagnose cardiac diseases or disorders other than any such
medical device which is already covered (i.e., prohibited) by Section 9(a).

(e) Blue Pencil. If any restriction set forth in this Section 9 is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or throughout too
broad a geographic area, it shall be interpreted to extend only to the maximum
extent to which such court shall deem it to be enforceable.

(f) Equitable Relief. In view of the fact that CONSULTANT’s breach, or
threatened breach, of the provisions of this Section 9 would be likely to cause
irreparable harm to ATRICURE for which money damages would not be an adequate
remedy, and without limiting any other remedies of ATRICURE, CONSULTANT agrees
that equitable relief, including injunction and specific performance would be
appropriate to enforce the provisions of this Section 9 and protect the
interests of ATRICURE.

10. Reaffirmation. Nothing in this Agreement is intended to impair or be in
derogation of the CONSULTANT’S obligations under that certain Non-Competition,
Proprietary Information and Inventions Agreement, executed by the CONSULTANT on
February 24, 2005 (the “2005 Agreement”), the effectiveness of which agreement
(including the non-compete provisions of Section 4 thereof) is hereby
reconfirmed.

11. Survival. The provisions of Sections 7 and 8 hereof shall survive,
indefinitely, the termination of this Agreement.

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12. Severability. If one or more of the provisions of this Agreement are deemed
invalid or unenforceable, then the remaining provisions will continue in full
force and effect.

13. Integration. The terms and conditions set forth in this Agreement shall
supersede any and all prior or contemporaneous written or oral agreements
regarding the subject matter contained herein.

14. Amendment. This Agreement may be changed, modified or amended by a written
agreement expressly referring to this Agreement and stating that it changes,
modified or amends the Agreement or portions thereof.

15. Governing Law. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of Ohio.

16. Arbitration. Except as set forth in Section 9(f):

(a) General. Any dispute, controversy or claim arising in connection with this
Agreement shall be settled by binding arbitration. The arbitration shall be
conducted by one arbitrator, who shall be appointed pursuant to the rules of the
American Arbitration Association (the “AAA”). The arbitration shall be held in
Cincinnati, Ohio, and shall be conducted in accordance with the commercial
arbitration rules of the AAA, except that the rules set forth in this Section 16
shall govern such arbitration to the extent they conflict with the rules of the
AAA.

(b) Best Efforts. The parties shall use their commercially reasonable best
efforts to cause the arbitration to be conducted in an expeditious manner. All
other procedural matters shall be within the discretion of the arbitrator.

(c) Judgments. The determination of the arbitrator shall be final and binding on
the parties. Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction. The parties shall each be responsible for
their own expenses in connection with such arbitration, including without
limitation counsel fees and fees of experts; provided, however, that the parties
shall share equally in the expense of the arbitrators and of the AAA.

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed effective as of the day and year set forth above.

 

CONSULTANT:    ATRICURE: /s/ Michael D. Hooven    By:   /s/ David J. Drachman

Signature

Michael D. Hooven

    

Signature

David J. Drachman, President & CEO