Exhibit 10.1

 

CONFIDENTIAL

SETTLEMENT AND PATENT LICENSE AGREEMENT

This Settlement and Patent License Agreement (this “Agreement”) is made and
entered into as of July 13, 2016 (the “Effective Date”) by and between, on the
one hand, NuVasive, Inc., a Delaware corporation with its principal place of
business in San Diego, California, (“NuVasive”), and, on the other hand,
Medtronic plc, corporation organized under the laws of Ireland with its
principal executive office at 20 Lower Hatch Street, Dublin 2, Ireland together
with its wholly owned subsidiaries Medtronic, Inc., a Delaware corporation with
a place of business in Minneapolis, Minnesota, Medtronic Sofamor Danek USA,
Inc., a Tennessee corporation with its principal place of business in Memphis,
Tennessee, Warsaw Orthopedic, Inc., an Indiana corporation with its principal
place of business in Warsaw, Indiana, Medtronic Puerto Rico Operations Co., a
Cayman Islands corporation with its principal place of business in Humacao,
Puerto Rico, and Medtronic Sofamor Danek Deggendorf, GmbH a German corporation
with its principal place of business in Deggendorf, Germany (collectively,
“Medtronic”) (NuVasive and Medtronic are individually referred to herein as a
“Party,” and collectively as the “Parties”).  

RECITALS

The Parties are involved in certain litigation set forth in Section A-1 of
Exhibit A to this Agreement (collectively, the “Litigation”) and certain Inter
Partes Review, Inter Partes Reexam or Ex Parte Reexam proceedings or related
challenges in the USPTO and related appeals set forth in Section A-2 of Exhibit
A to this Agreement (collectively, the “PTO Proceedings”).  

In order to avoid the cost and uncertainty of further litigation, and without
any admission of fault or liability, the Parties desire to fully and finally
resolve and settle the Litigation and the PTO Proceedings through the grant of
certain releases, licenses, standstills and other valuable and adequate
consideration as set forth below.

The Parties have entered into a Binding Settlement and Patent License Term Sheet
(“Term Sheet”) executed as of June 28, 2016 (“Term Sheet Date”) which is being
superseded by this Agreement.  

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is acknowledged, the Parties agree as follows:

ARTICLE I – DEFINITIONS

As used in this Agreement, the following terms shall have the following
meanings:

1.1“Acquired Affiliate” means a Third Party acquired by a Party or its Affiliate
after the Effective Date such that it becomes an Affiliate of such Party.

1.2“Acquisition Date” means the date that an Acquired Affiliate becomes an
Affiliate of a Party.

1.3“ADR Process Agreement” means the ADR Process Agreement being entered into by
the Parties concurrently with this Agreement.

1.4“Affiliate” means, as to a particular Entity (“Subject Entity”), any current
or future Entity at any time Controlling, Controlled by or under common Control
with the Subject Entity, but only so long as such Control exists and subject to
Articles IX and X below.

-1-

--------------------------------------------------------------------------------

CONFIDENTIAL

1.5“Assert” (or “Assertion”) means to initiate or pursue any Claim, suit,
litigation or other proceeding before any legal, judicial, arbitration,
administrative, executive or other type of body or tribunal, anywhere in the
world, that has or claims to have authority to adjudicate such action.

1.6“Change of Control” means a transaction or series of related transactions in
which the direct and indirect beneficial owners of the outstanding voting shares
or securities of the respective Party immediately prior to the respective
transaction or series of related transactions do not, immediately after the
respective transaction or series of related transactions, directly or indirectly
beneficially own more than fifty percent (50%) of the voting power of such Party
or its Successor (or direct or indirect parent of such Party or its Successor)
with respect to the election of directors or similar managing authority.

1.7 “Claims” means any and all claims, losses, damages, liabilities, demands and
rights of action of any nature, known and unknown.

1.8“Control” means: (i) the direct or indirect ownership or control of more than
fifty percent (50%) of the outstanding stock or other equity interests entitled
to vote for the election of directors or similar managing authority of an
Entity; or (ii) the direct or indirect ownership or control of more than fifty
percent (50%) of the ownership interest that represents the right to make
decisions for an Entity; or (iii) other right, authority or power to direct the
management, operations or policies of an Entity.

1.9“Confidential Dispute Resolution Process” has the meaning set forth in
Section 7.4.

1.10"Copied Products” means products of a Party or its Affiliate that are copied
from a unique, pre-existing product of the other Party or its Affiliate, where
the product (i) is first commercially marketed following the Effective Date of
this Agreement, (ii) is materially indistinguishable from the pre-existing
product of the other Party or its Affiliate,  and (iii) was first introduced by
such Party or its Affiliate after such pre-existing product was commercially
marketed by the other Party or its Affiliate. For clarity, each Party will
continue its own development and nothing herein is intended to permit a Party to
replicate such products of the other Party or create what a reasonably
knowledgeable person would consider to be a knock-off of the other Party’s
products and release them as its own products.

1.11“Customer” means distributors, customers and end-users of a respective
product of a Party or its Affiliate in their capacity as such.

1.12“DLIF” means direct lateral interbody fusion.

1.13“Divested Affiliate” means an Entity that ceases to be an Affiliate of
NuVasive or Medtronic plc, as applicable, during the Term.

1.14“Divestiture Date” means the date that an Entity ceases to be an Affiliate
of NuVasive or Medtronic plc, as applicable, during the Term.  

1.15“Excluded NuVasive    ***     Patents” means (i) the Patents listed in
Exhibit C; (ii) parents, divisionals, continuations, continuations-in-part and
foreign counterparts of the Patents listed in Exhibit C; and (iii) any other
patents claiming priority to or sharing common priority with any of the
foregoing Patents.  

1.16“Existing Products” means a product and all associated instruments made
available with such product that has been commercially released by a Party or
its Affiliate prior to the Term Sheet Date,

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

-2-

--------------------------------------------------------------------------------

CONFIDENTIAL

where “commercially released” means that an arm’s length sale of commercial,
non-evaluation production units of such product has resulted in Net Sales.

1.17“Field” means spinal implants, instruments associated with spinal implants,
biologics, and electroneurophysiologic monitoring products and methods of use,
alone or in combination with one another for spine surgery. All other products
and methods (including***                                 ***    , whether taken
alone or in combination with products or methods that would otherwise be in the
Field) are outside the Field.  For avoidance of doubt, all Existing Products of
either Party in spine (including, without
limitation,                                                        ******              )
will be deemed to be within the Field.  Notwithstanding the foregoing, products
and methods of use of Medtronic and its Affiliates outside
of          ***                       are specifically excluded from the
Field.  ***

1.18“Grantee” means each Party and each of its Affiliates in its capacity as a
grantee of a license or Standstill under this Agreement.

1.19“Grantor” means each Party and each of its Affiliates in its capacity as
grantor of a license or Standstill under this Agreement.

1.20“Licensed Patents” means (i) the Patents-in-Suit; and (ii) with respect to
Licensed Existing Products, any other Patents owned, controlled or licensable by
a Party or any of its Affiliates at any time during the Term that would be
infringed by the Existing Products of the other Party or its Affiliates or use
thereof in the absence of a license; in each case, subject to the carve outs in
Article VI below.

1.21“Licensed Existing Products” means, with respect to a Party as Grantee,
Existing Products of such Party and its Affiliate and extensions thereof that
are not more than colorably different from those Existing Products in the Field
subject to the carve outs in Article VI below.

1.22“Licensed Products” means any product of a Party or its Affiliate in the
Field (including Existing Products), subject to the carve outs in Article VI
below.

1.23“Net Sales” means revenue recognized by a Party or its Affiliate for the
sale of a respective product of such Party or its Affiliate.

1.24*** means    ***.

1.25“Patents” means any and all classes and types of patents, utility models,
design patents, invention registrations, and equivalent rights (including
originals, reexaminations, reissue and extensions), and applications for any of
the foregoing in all countries of the world.

1.26“Patents-in-Suit” means (i) all patents asserted in the Litigation, which
include but are not limited to those listed in Exhibit B, which to the Parties’
current knowledge incorporates the patents asserted in the Litigation; (ii)
parents, divisionals, continuations, continuations-in-part and foreign
counterparts of those patents; and (iii) any other patents claiming priority to
or sharing common priority with any of the foregoing patents.

 

 

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

-3-

--------------------------------------------------------------------------------

CONFIDENTIAL

1.27 “Entity” means a trust, corporation, partnership, limited liability
company, association, unincorporated organization or other legal or governmental
entity.

1.28“Settlement Payment” has the meaning set forth in Section 2.1.

1.29“Standstills” means the covenants (i) by both Parties in the Field under
Section 7.1; and (ii) by Medtronic outside the Field under Section 7.2.

1.30“Standstill Period” means the Standstill Period in the Field and Standstill
Period Outside the Field, as applicable.

1.31“Standstill Period in the Field” means a period of seven (7) years after the
Effective Date.

1.32“Standstill Period Outside the Field” means a period of five (5) years after
the Effective Date.

1.33“Successor” means the surviving or resulting entity in a Change of Control
of a respective Party.

1.34“Supplier” means  suppliers and manufacturers of a respective product of a
Party or its Affiliate in their capacity as such.

1.35“Transferred Patents” means any Patents that are assigned or otherwise
transferred by a Party or any of its Affiliates and any divisionals,
continuations, continuations-in-part and foreign counterparts of those
Patents.  Transferred Patents include any Patents owned or controlled by any
Divested Affiliate at the time it ceases to be an Affiliate of NuVasive or
Medtronic plc, as applicable, and any divisionals, continuations,
continuations-in-part and foreign counterparts of those Patents.

1.36“Term” will have the meaning set forth in Section 3.1.

1.37“Term Sheet Date” shall mean June 28, 2016.

1.38“Third Party” means any Entity that is not a Party to this Agreement or an
Affiliate of a Party to this Agreement.

1.39“Third Party OEM Products” means products of a Third Party that are marketed
and sold by a Party or its Affiliate on behalf of the Third Party under the
Third Party’s brand names and regulatory approvals (and not under brand names or
regulatory approvals owned by or exclusively licensed to the Party or its
Affiliate).  In certain countries outside the United States, Medtronic has
represented that equivalent marketing and sale of Third Party OEM Products on
behalf of a Third Party is conducted without using both the brand names and
regulatory approvals of the Third Party.  For these countries, “Third Party OEM
Products” will also include products of a Third Party that are marketed and sold
by a Party or its Affiliate on behalf of the Third Party in such countries
outside the United States under the Third Party’s brand names or regulatory
approvals (and not under brand names or regulatory approvals owned by or
exclusively licensed to the Party or its Affiliate).

1.40*** means ***.

 

 

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

-4-

--------------------------------------------------------------------------------

CONFIDENTIAL

ARTICLE II - PAYMENT

2.1Payment.  NuVasive will pay to Medtronic Inc. the total amount of forty-five
million U.S. dollars (US$45,000,000) (the “Settlement Payment”), which will be
the sole remuneration to Medtronic.                                
        ***                                                                        
Upon payment of the Settlement Payment, all rights and licenses will be fully
paid-up, irrevocable and non-terminable.

(a)***

 

2.2Taxes.  Medtronic shall be solely responsible for the payment of any taxes
associated with the Settlement Payment. If NuVasive is required by applicable
law or regulations to withhold any portion of the Settlement Payment, or to
remit any taxes in respect of the Settlement Payment, then NuVasive will deduct
the amount required to be withheld or remitted and pay such amount to the
applicable tax authorities.  The payment of the remaining amount of the
Settlement Payment as reduced by such deductions or withholdings will constitute
full payment and settlement of the Settlement Payment hereunder.

ARTICLE III - TERM

3.1Term.  The term will commence upon the Effective Date and continue until the
later of (i) expiration of the Standstill Periods, or (ii) the last to expire of
the Licensed Patents (“Term”).  All releases, licenses, Standstills and other
rights will survive with respect to any actions taken and any products
manufactured or sold prior to expiration of the Term.  In addition, Articles
VIII, IX, X, XI, XII and XIII shall survive.  

ARTICLE IV – DISMISSALS AND RELEASES

4.1Dismissals.  The Parties have jointly notified the relevant courts of the
agreement reached in the Term Sheet to settle the Litigation. Within three (3)
court days after Medtronic’s receipt of the second installment of the Settlement
Payment, the Parties will file joint motions to dismiss with prejudice the
Litigation and promptly take all necessary actions to withdraw as the
challenging party and refrain from participating in any pending Inter Partes
Review, Inter Partes Reexam or Ex Parte Reexam proceedings or related challenges
in the USPTO against the other Party’s patents, including the PTO Proceedings
and any appeals thereof.  However, either NuVasive or Medtronic, as patent
owner, may continue to defend its patents in such proceedings and appeals.    

 

4.2Releases.  Subject to payment of the Settlement Payment, each Party and its
Affiliates (“Releasing Party”) hereby irrevocably releases, acquits and
discharges the other Party and its Affiliates

 

 

 

 

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

-5-

--------------------------------------------------------------------------------

CONFIDENTIAL

and its and their officers, directors, employees and agents (“Released Party”)
from and against any and all Claims that the Releasing Party ever had, now has
or hereafter may acquire against the Released Party (i) for any Patent
infringement in the Field prior to the Effective Date or with respect to any of
its Existing Products in the Field sold prior to the Effective Date; and (ii)
for the Litigation and PTO Proceedings conducted prior to the Effective
Date.  The releases also extend to Suppliers and Customers with respect to the
Released Party’s products that were sold in the Field prior to the Effective
Date and the use thereof.  

4.3Waiver.  Each Party and its Affiliates expressly, knowingly and intentionally
waive for themselves and their legal successors and assigns, the benefits and
rights of Section 1542 of the California Civil Code, which states as follows:

“A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.”

Each Party and its Affiliates acknowledge that they have received independent
legal advice from their attorneys with respect to waiving the provisions of
California Civil Code § 1542 and acknowledge that this waiver is a material
inducement to and consideration for the other Party’s execution of the
Agreement.  Each Party and its Affiliates likewise waive the benefits of any
statute, rule, doctrine or common law principle of any jurisdiction of similar
effect to Section 1542 of the California Civil Code.

ARTICLE V – LICENSES

5.1License for Existing Products.  Subject to payment of the Settlement Payment,
each Grantor hereby grants to each Grantee an irrevocable, worldwide,
nonexclusive, paid-up, royalty-free license under the Licensed Patents to make,
have made, use, sell, offer for sale, import and otherwise dispose of Licensed
Existing Products in the Field.  Grantee may grant sublicenses under the license
set forth in this Section 5.1 to (i) Customers of Licensed Existing Products as
necessary to use, resell, offer for resale or import Licensed Existing Products
purchased from Grantee in the Field, and (ii) Suppliers to make, have made or
import Licensed Existing Products for sale to Grantee in the Field.

5.2License for Patents-in-Suit.  Subject to payment of the Settlement Payment,
each Grantor hereby grants to each Grantee an irrevocable, worldwide,
nonexclusive, paid-up, royalty-free license under the Patents-in-Suit to make,
have made, use, sell, offer for sale, import and otherwise dispose of Licensed
Products in the Field.  Grantee may grant sublicenses under the license set
forth in this Section 5.2 to (i) Customers of Licensed Products as necessary to
use, resell, offer for resale or import Licensed Products purchased from Grantee
in the Field, and (ii) Suppliers to make, have made or import Licensed Products
for sale to Grantee in the Field.

5.3Exclusions.  The licenses in this Article V are subject to the applicable
exclusions set forth in Article VI below for Excluded NuVasive  ***  Patents,
Copied Products and Third Party OEM Products.

ARTICLE VI– CARVE OUTS

6.1NuVasive   ***  Patent Carve Out.  The Excluded NuVasive   ***   Patents
shall be excluded from this Agreement for
***                        ***            , except with respect to (i) Existing
Products of Medtronic (including, for example,

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

-6-

--------------------------------------------------------------------------------

CONFIDENTIAL

***) and (ii) new products of Medtronic that are for *** ***

6.2Other Product Carve Outs.  

(a)Copied Products.  The licenses in Sections 5.1 and 5.2 will not apply to
Copied Products (but Copied Products will be subject to the Standstills and
Confidential Dispute Resolution Process in Article VII below).

(b)Third Party OEM Products.  The licenses, Standstills and Confidential Dispute
Resolution Process will not apply to Third Party OEM Products.

ARTICLE VII – STANDSTILLS

7.1Inside the Field. Except pursuant to the Confidential Dispute Resolution
Process as expressly set forth in the ADR Process Agreement, during the
Standstill Period in the Field each Grantor hereby covenants not to (and not to
cause, consent to or materially assist any Third Party to) Assert any Claim
against Grantee for Patent infringement in the Field, except as set forth in the
carve outs in Sections 6.1 and 6.2(b) above for the Excluded NuVasive    ***  
Patents and Third Party OEM Products. The Standstill granted by each Grantor in
the Field will also extend to Suppliers and Customers with respect to products
of the Grantee in the Field and the use thereof.

7.2Outside the Field: Except pursuant to the Confidential Dispute Resolution
Process as expressly set forth in the ADR Process Agreement, during the
Standstill Period Outside the Field Medtronic and its Affiliates hereby covenant
not to (and not to cause, consent to or materially assist any Third Party to)
Assert any Claim against NuVasive or any of its Affiliates for Patent
infringement outside the Field.  The Standstill granted by Medtronic and its
Affiliates outside the Field will also extend to Suppliers and Customers with
respect to products of NuVasive and its Affiliates outside the Field and the use
thereof.

7.3Covenant Not to Challenge: Except pursuant to the Confidential Dispute
Resolution Process as expressly set forth in the ADR Process Agreement, during
the Standstill Period in the Field each Party and its Affiliates agrees not to
initiate or pursue any Inter Partes Review, Inter Partes Reexam, Ex Parte Reexam
proceedings or other legal proceedings challenging the validity of any of the
Patents owned by the other Party or its Affiliates, unless such Patent is first
asserted against such Party or its Affiliate or with respect to any of its or
their products to the extent permitted hereunder.

7.4Confidential Dispute Resolution Process.  During the Standstill Period, the
Parties and their Affiliates will be bound by the dispute resolution process set
forth in the ADR Process Agreement (the “Confidential Dispute Resolution
Process”) to address patent infringement claims raised by either Party or any of
its Affiliates inside the Field or by Medtronic or any of its Affiliates outside
the Field. Through the Confidential Dispute Resolution Process under the ADR
Process Agreement, a Party or its Affiliate may provide notice of alleged Patent
infringement to the other Party or its Affiliate and request that the other
Party or its Affiliate take a royalty-bearing license at a rate to be determined
by a neutral third party selected in accordance with the ADR Process Agreement
(“Arbitrator”).  Damages will not accrue during the Standstill Period for Claims
subject to the Standstills unless and until the first day of the first quarter
following the time the Party or its Affiliate owning or controlling such Patent
(“Licensor Party”) provides written notice of infringement and makes a demand
for arbitration to the other Party and its Affiliates (“Licensee Party”) through
the Confidential Dispute Resolution Process as set forth in the ADR Process
Agreement.  Notwithstanding the decision of the Arbitrator, neither Party is
required to

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

-7-

--------------------------------------------------------------------------------

CONFIDENTIAL

accept or grant a license or royalty rate set by the Arbitrator and no claim,
suit, litigation or other proceeding for Patent infringement shall be filed by
the Licensor Party (or any assignee or transferee of the respective Patent)
against the Licensee Party (or Suppliers or Customers with respect to products
of the Licensee Party) for Claims subject to the Standstills until after the
expiration of the applicable Standstill Period (subject to the carve out in
Section 6.1 above).

7.5Litigation After Standstill Period.  For Claims subject to the Standstills,
litigation can be pursued after the end of the applicable Standstill Period
subject to the following:

(a)The Licensor Party (and any assignee or transferee of the Patent) may seek
only reasonable royalty damages from the first day of the first quarter
following the time the Licensor Party provides written notice of infringement
and makes a demand for arbitration (as set forth in the ADR Process Agreement)
to the Licensee Party during the Standstill Period pursuant to the Confidential
Dispute Resolution Process and proceeds with the Confidential Dispute Resolution
Process or the time of the filing of suit, whichever is earlier.  

(b)The Licensor Party (and any assignee or transferee of the Patent) will not be
entitled to any injunction, willfulness damages, lost profits, fees or other
enhanced damages or penalties, except as set forth below.

(i)If the Licensor Party (or any assignee or transferee of the respective
Patent) seeks past damages for infringement of a Patent based on the Licensee
Party’s refusal to take a license determined by the Arbitrator pursuant to the
Confidential Dispute Resolution Process during the Standstill Period and does
not recover damages for infringement of such Patent at an effective rate that is
higher than the royalty rate determined by the Arbitrator, then the Licensor
Party will be required to pay the Licensee Party’s reasonable attorneys’ fees
and costs relating to the litigation with respect to such past infringement.

(ii)If the Licensor Party obtains a final award of past damages against the
Licensee Party for infringement of the respective Patent during the Standstill
Period based on the Licensee Party’s refusal to take a license determined by the
Arbitrator pursuant to the Confidential Dispute Resolution Process during the
Standstill Period at an effective rate that is higher than the royalty rate
determined by the Arbitrator, then the Licensee Party will be required to pay
the Licensor Party’s reasonable attorneys’ fees and costs relating to the
litigation with respect to such past infringement.

ARTICLE VIII – TRANSFER OF PATENTS

8.1Transfer of Patents.  Any Patents that are assigned or otherwise transferred
by a Party or any of its Affiliates (including as part of a Divested Affiliate)
must be transferred subject to the licenses, Standstills and other rights
granted to the other Party and its Affiliates under this Agreement with respect
to the Transferred Patents.  Each Party and its Affiliates shall require any
assignee or transferee (including any Divested Affiliate) to make any subsequent
assignment or transfer of Transferred Patents subject to the licenses,
Standstills and other rights granted to the other Party and its Affiliates under
this Agreement.

ARTICLE IX – AFFILIATES

9.1Divested Affiliates.  Divested Affiliates will remain subject to this
Agreement with respect to (i) any Patents owned, controlled or licensable by the
Divested Affiliate at any time while it was an Affiliate of a Party during the
Term, and (ii) any divisionals, continuations, continuations-in-part

-8-

--------------------------------------------------------------------------------

CONFIDENTIAL

and foreign counterparts of those Patents.  Any licenses, Standstills and other
rights granted to a Divested Affiliate will terminate as of the Divestiture
Date.

9.2Acquired Affiliates.  The licenses, Standstills and other rights granted to a
Party will extend to an Acquired Affiliate as of the Acquisition Date; however,
Claims against the Acquired Affiliate for past damages for Patent infringement
by the Acquired Affiliate prior to the Acquisition Date will not be released and
the Standstills will not preclude the other Party from asserting those Claims
for past damages against the Acquired Affiliate without being subject to the
Standstills or Confidential Dispute Resolution Process with respect to such
Claims.

ARTICLE X – CHANGE OF CONTROL AND ASSIGNMENT

10.1Change of Control.  If a Third Party ******after the Effective Date, then
***For avoidance of doubt, the releases, licenses, Standstills and other rights
granted to        ***will continue to apply to***.  

10.2Assignment. Neither Party may assign this Agreement without consent of the
other Party except in connection with a merger, consolidation, or sale of all or
substantially all of the business or assets of NuVasive or Medtronic plc,
subject to the limitations in Section 10.1 above with respect to a Change of
Control.

ARTICLE XI – CONFIDENTIALITY

11.1Confidentiality.  Each Party agrees that it shall keep the terms of the Term
Sheet, this Agreement, and all drafts and communications of each confidential.
The terms of the Term Sheet and this Agreement may be disclosed to the Parties'
respective senior management, attorneys, employees, accountants, auditors,
senior lenders, and other professionals to the extent necessary for them to
perform their duties to either Party, in each case who are subject to an
obligation of confidentiality to such Party. The terms of the Term Sheet and
this Agreement also may be disclosed as required by law or regulation or
pursuant to legal process, provided, however, that a Party receiving such a
request for disclosure shall provide notice of said request to the other Parties
sufficient to allow such Parties to make formal objection to such disclosure and
shall cooperate with such other Parties to obtain a protective order or other
confidential treatment. The terms of the Term Sheet and this Agreement also may
be disclosed to the extent necessary to comply with any other legal, accounting,
or regulatory requirements. The Parties will confer in advance regarding any
press release to be made in connection with the Term Sheet or this Agreement
with the agreement that each Party’s press release, if any, will be neutral with
regard to the outcome of the litigation and this Agreement (e.g., “The parties
have negotiated a mutually agreeable settlement, the terms of which are
confidential”).   However, each Party retains the right to make such press
release as advised by its counsel to comply with its legal or regulatory
requirements. In connection with an actual or proposed merger, acquisition,
financing or other transaction, subject to reasonable written confidentiality
measures, the terms of the Term Sheet and this Agreement may be disclosed to a
potential counterparty (and, in the case of any sale,

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

-9-

--------------------------------------------------------------------------------

CONFIDENTIAL

assignment or other transfer of any Patents subject to the licenses or
Standstills, the transferring Party may disclose the terms applicable to the
Transferred Patents to the potential transferee, subject to a written obligation
of confidentiality to such Party).  

ARTICLE XII – REPRESENTATIONS AND WARRANTIES

12.1Representations and Warranties.  Each of the Parties represents, warrants
and covenants to the other Party that:

(a)such Party (and the person executing this Agreement on its behalf) has the
full right, power and authority to enter into this Agreement and bind such Party
and its Affiliates to the terms and obligations set forth herein;

(b)such Party has and will obtain, maintain, and exercise all rights necessary
to grant to the other Party and its Affiliates all of the releases, licenses,
Standstills and other rights described in this Agreement on behalf of itself and
its Affiliates;

(c)such Party is the lawful and exclusive owner of all rights, title, and
interest in and to the Patents-in-Suit of such Party and has not assigned or
transferred any Claims against the other Party or its Affiliates with respect
thereto;

(d)such Party and its Affiliates have not entered into and shall not enter into
any agreement that would interfere with, prevent, or impair the full exercise of
all rights granted to the other Party and its Affiliates in this Agreement; and

(e)all Entities that were Affiliates of such Party at any time on or after the
Term Sheet Date and prior to the Effective Date remain Affiliates of such Party
bound to this Agreement as of the Effective Date, and all Patents owned,
controlled or licensable by such Party or any of its Affiliates at any time on
or after the Term Sheet Date and prior to the Effective Date have not been
assigned or transferred and remain subject to the releases, licenses,
Standstills and other rights set forth in this Agreement as of the Effective
Date.

12.2Disclaimer.  Neither Party or its Affiliates makes any representation or
warranty of any kind, either express or implied, as to the validity of any
Patent or assumes any obligation to file any Patent application, pursue any
Patent, maintain any Patent in force or to seek reissue, re-examination or
extension of any Patent.

12.3                          ***               .  Medtronic represents
that,                *** ***it has notified         ******  A   copy of the
notice has been delivered to***.

ARTICLE XIII - GENERAL

13.1Governing Law.  This Agreement shall be construed in accordance with the
laws of the State of California, notwithstanding any choice-of-law principle
that might dictate a different governing law.  Any action to enforce this
Agreement shall be in the U.S. Federal Court for the Southern District of
California if jurisdiction exists in such court.

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

-10-

--------------------------------------------------------------------------------

CONFIDENTIAL

13.2Notices.  All notices and requests which are required or permitted to be
given in connection with this Agreement shall be deemed given as of the day they
are received either by messenger, delivery service, or by United States Postal
Service mail, postage prepaid, certified or registered, return receipt
requested, and addressed as follows, or to such other address as the Party to
receive the notice or request provides in writing to the other Party:

 

To NuVasive:

James A. Garrett

Vice President, Associate General Counsel, LitigationNuVasive, Inc.

7475 Lusk Boulevard

San Diego, CA 92121

jgarrett@nuvasive.com

 

With a copy to:

Paul D. Tripodi II

Wilson Sonsini Goodrich & Rosati

633 West Fifth Street

Suite 1550

Los Angeles, CA 90071

ptripodi@wsgr.com

 

To Medtronic:

Scot M. Elder

Vice President, Chief Counsel

Restorative Therapies Group (RTG)

Medtronic

6743 Southpoint Drive North

Jacksonville, Florida 32216

scot.m.elder@medtronic.com

 

With a copy to:

Luke L. Dauchot, P.C.

KIRKLAND & ELLIS LLP

300 North LaSalle, Chicago, IL 60654

luke.dauchot@kirkland.com

13.3Waiver. No waiver of any provision of this Agreement shall be deemed or
shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver constitute a continuing waiver unless expressly stated in
writing by the Party making the waiver. No waiver of any provision shall be
binding unless executed in writing by the Party making the waiver.

13.4Further Actions.  The Parties agree to execute any further documentation and
take such further actions which may be required in order to effect the
provisions of this Agreement, including dismissal with prejudice of the
Litigation.

13.5Costs.  Each Party will bear its own costs and attorneys' fees relating to
the Litigation, PTO Proceedings and negotiation of the Term Sheet and this
Agreement.

-11-

--------------------------------------------------------------------------------

CONFIDENTIAL

13.6Defense to Infringement Claims.  This Agreement may be offered in evidence
and pleaded as an affirmative defense to any Claims that may be instituted,
prosecuted, or attempted that a Party or any of its Affiliates, or any of its or
their Products, infringes any Patent that is subject to any of the releases,
licenses, Standstills or other rights under this Agreement.  Any filing of this
Agreement in such a proceeding shall be done under seal.

13.7No Third Party Beneficiaries.  This Agreement is solely for the benefit of
the Parties and their Affiliates.  No other person or Entity shall be entitled
to rely on this Agreement or to anticipate the benefits of this Agreement or
otherwise assert any claims or be entitled to any rights as a third Party
beneficiary hereof, and no other person or Entity may bring any action under
this Agreement or seek or obtain any damages for breach of this
Agreement.  Notwithstanding the foregoing, this Section does not restrict any
Suppliers or Customers of a Party or its Affiliates from asserting and
interposing this Agreement in a Patent infringement action as a defense to a
claim of infringement of any Patents subject to the releases, licenses,
Standstills and other rights under this Agreement.

13.8Remedies.  The Parties acknowledge and agree that: (i) any breach of this
Agreement may result in immediate and irreparable injury for which there may be
no adequate remedy available at law; and (ii) in addition to any other remedies
available, specific performance and injunctive relief may be appropriate
remedies to compel performance of this Agreement.

13.9No Admissions.  Nothing in this Agreement shall constitute an admission,
warranty or representation of any fact or patent infringement, validity or
enforceability by a Party or any of its Affiliates with respect to any Patent of
the other Party or any of its Affiliates, but, rather, this Agreement is merely
the resolution of differences or disputes with respect to Patents that exist or
may exist between them.  Neither this Agreement nor any release or other terms
contained within it may be construed or used as an admission of any issues,
facts, wrongdoing, liability, or violation of law whatsoever.

13.10Bankruptcy.  Each Party acknowledges that all rights and licenses granted
under or pursuant to this Agreement are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the United States Bankruptcy Code (the
“Bankruptcy Code”), licenses of rights to “intellectual property” as defined
under Section 101(56) of the Bankruptcy Code.  Each Party acknowledges that if
such Party, as a debtor in possession or a trustee-in-bankruptcy in a case under
the Bankruptcy Code, rejects this Agreement, the other Party may elect to retain
its rights under this Agreement as provided in Section 365(n) of the Bankruptcy
Code.  Each Party irrevocably waives all arguments and defenses arising under 11
U.S.C. 365(c)(1) or successor provisions to the effect that applicable law
excuses the Party, other than the debtor, from accepting performance from or
rendering performance to an entity other than the debtor or debtor in possession
as a basis for opposing assumption of the Agreements by the other Party in a
case under Chapter 11 of the Bankruptcy Code to the extent that such consent is
required under 11 U.S.C. § 365(c)(1) or any successor statute.

13.11Entire Agreement.  This Agreement, together with the ADR Process Agreement,
constitutes the entire agreement between the Parties with respect to its subject
matter, and supersedes all prior and contemporaneous written or oral agreements
or communications as to such subject matter, including the Term
Sheet.  Notwithstanding the foregoing, the rights and licenses granted to
NuVasive under the Settlement and License Agreement between NuVasive and
Medtronic dated April 25, 2013 shall remain in effect in addition to this
Agreement; however, this Agreement will take precedence with respect to any
conflict as to the subject matter hereof. This Agreement shall not be modified
except by a written agreement dated after the Effective Date and signed on
behalf of NuVasive and Medtronic by their respective authorized representatives.

-12-

--------------------------------------------------------------------------------

CONFIDENTIAL

13.12Construction.  Each Party agrees that in any dispute regarding the
interpretation or construction of this Agreement, no statutory, common law or
other presumption shall operate in favor of or against any Party to this
Agreement by virtue of its role in drafting or not drafting its terms and
conditions. If any provision of this Agreement is held to be illegal, invalid or
unenforceable or otherwise in conflict with law, the remaining provisions shall
remain in full force and effect. If any provision of this Agreement is deemed
illegal, invalid or unenforceable or otherwise in conflict with law, it shall be
modified to the extent necessary to make it legal, valid or enforceable or
otherwise in accordance with law while effectuating the same or similar intent
of the Parties.  As used in this Agreement, the words “include” and “including,”
and variations thereof, will not be deemed to be terms of limitation, but rather
will be deemed to be followed by the words “without limitation.”

13.13Counterparts.  This Agreement may be executed in counterparts by the
Parties and each such counterpart shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same Agreement.
Execution of this Agreement may be accomplished by signing this Agreement and
transmitting the signature page to the above identified principal and its
outside counsel for each Party by electronic mail with receipt of delivery and
opening requested. Such receipts shall be produced to a Party on request of
another Party.

[Remainder of Page Intentionally Blank]

 

-13-

--------------------------------------------------------------------------------

CONFIDENTIAL

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed
below by their respective duly authorized officers.

 

 

MEDTRONIC:

NUVASIVE:

Medtronic plc

NuVasive, Inc.

By: /s/ Brad Lerman

By: /s/ James A. Garrett

Name: Brad Lerman

Name: James A. Garrett

Title: Senior V.P., General Counsel & Corporate Secretary

Title: VP, Assoc. Gen. Counsel

Medtronic Inc.

By: /s/ Linda Harty

Name:   Linda Harty

Title:   Director

Medtronic Sofamor Danek USA, Inc.

By: /s/ Linda Harty

Name:   Linda Harty

Title:   Director

Warsaw Orthopedic, Inc.

By: /s/ Linda Harty

Name:   Linda Harty

Title:   Director

Medtronic Puerto Rico Operations Co.

By: /s/ Linda Harty

Name:   Linda Harty

Title:   Director

Medtronic Sofamor Danek Deggendorf, GmbH

By: /s/ Dr. Hans Joaqim Frueh

Name: Dr. Hans Joaqim Frueh

Title: Sr. Eng. Manager / Proc.

 

 

 

 

--------------------------------------------------------------------------------

CONFIDENTIAL

EXHIBIT A

LITIGATION AND PTO PROCEEDINGS

 

A-1.  Litigation

 

Medtronic Sofamor Danek USA, Inc. v. NuVasive, Inc., No. 3:08-cv-01512-CAB-MDD
(S.D. Cal.)

Warsaw Orthopedic, Inc. v. NuVasive, Inc., No. 13-1576 (Fed. Cir.)

Warsaw Orthopedic, Inc. v. NuVasive, Inc., No. 3:12-cv-02738-CAB-MDD (S.D. Cal.)

 

A-2.  PTO Proceedings

 

NuVasive, Inc. v. Warsaw Orthopedic, Inc., IPR2013-00206 (PTAB)

NuVasive, Inc. v. Warsaw Orthopedic, Inc., IPR2013-00208 (PTAB)  

Medtronic, Inc. v. NuVasive, Inc., IPR2013-00506 (PTAB)  

Medtronic, Inc. v. NuVasive, Inc., IPR2013-00507 (PTAB)  

Medtronic, Inc. v. NuVasive, Inc., IPR2013-00508 (PTAB)

Medtronic, Inc. v. NuVasive, Inc., IPR2014-00034 (PTAB)

Medtronic, Inc. v. NuVasive, Inc., IPR2014-00073 (PTAB)

Medtronic, Inc. v. NuVasive, Inc., IPR2014-00074 (PTAB)

Medtronic, Inc. v. NuVasive, Inc., IPR2014-00075 (PTAB)

Medtronic, Inc. v. NuVasive, Inc., IPR2014-00081 (PTAB)

Medtronic, Inc. v. NuVasive, Inc., IPR2014-00087 (PTAB)

 

NuVasive, Inc. v. Warsaw Orthopedic, Inc., No. 15-1049 (Fed. Cir.)

Warsaw Orthopedic, Inc. v. NuVasive, Inc., No. 15-1050 (Fed. Cir.)

Warsaw Orthopedic, Inc. v. NuVasive, Inc., No. 15-1058 (Fed. Cir.)

NuVasive, Inc. v. Medtronic, Inc., No. 15-1670 (Fed. Cir.)

Nuvasive, Inc. v. Medtronic, Inc., No. 15-1672 (Fed. Cir.)

NuVasive, Inc. v. Medtronic, Inc., No. 15-1673 (Fed. Cir.)

Nuvasive, Inc. v. Medtronic, Inc., No. 15-1674 (Fed. Cir.)

NuVasive, Inc. v. Medtronic, Inc., No. 15-1712 (Fed. Cir.)

NuVasive, Inc. v. Medtronic, Inc., No. 15-1838 (Fed. Cir.)

NuVasive, Inc. v. Medtronic, Inc., No. 15-1839 (Fed. Cir.)

NuVasive, Inc. v. Medtronic, Inc., No. 15-1840 (Fed. Cir.)

NuVasive, Inc. v. Medtronic, Inc., No. 15-1841 (Fed. Cir.)

NuVasive, Inc. v. Medtronic, Inc., No. 15-1842 (Fed. Cir.)

NuVasive, Inc. v. Medtronic, Inc., No. 15-1843 (Fed. Cir.)

 

Ex Parte Reexamination of 5,860,973, Application No. 90/013,464 (PTAB)

Ex Parte Reexamination of 7,470,236, Application No. 90/013,605 (PTAB)

 

--------------------------------------------------------------------------------

CONFIDENTIAL

EXHIBIT B

PATENTS-IN-SUIT

 

B-1.  Medtronic Patents-In-Suit

 

5,676,146

5,772,661

5,860,973

6,235,028

6,530,929

6,945,933

7,008,422

8,021,430

8,251,997

8,444,696

 

B-2.  NuVasive Patents-In-Suit

 

7,207,949

7,470,236

7,582,058

8,000,782

8,005,535

8,016,767

8,187,334

8,192,356

8,361,156

D652,922

D666,294

 

 

--------------------------------------------------------------------------------

CONFIDENTIAL

EXHIBIT C

EXCLUDED NUVASIVE *** PATENTS

 

 

 

 

 

***

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.

 

--------------------------------------------------------------------------------

CONFIDENTIAL

EXHIBIT D

WIRE INSTRUCTIONS

 

 

 

Medtronic, Inc.

 

Bank Name: ***

 

***

 

***

 

***

 

***

 

***

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.