EXHIBIT 10.1

FORM OF
SETTLEMENT AGREEMENT
 
I.  PARTIES
 

This Settlement Agreement (“Agreement”) is entered into between the United
States of America, acting through the United States Department of Justice and on
behalf of the Food and Drug Administration (“FDA”) of the Department of Health
and Human Services (“HHS”) (collectively the “United States”); and Boston
Scientific Corporation (“Boston Scientific”) (hereafter referred to as “the
Parties”), through their authorized representatives.
 
II.  RECITALS
 
 
WHEREAS, Boston Scientific is a publicly traded Delaware corporation with a
principal place of business in Natick, Massachusetts. At all times relevant to
this Agreement, Boston Scientific manufactured and marketed medical devices
throughout the United States and internationally, and had an indirect,
wholly-owned subsidiary, Scimed Life Systems, Inc. (“Scimed”). Scimed was
located in Maple Grove, Minnesota, and was in the business of manufacturing and
distributing various medical devices, including heart catheters and premounted
coronary stent delivery systems;

WHEREAS, at all times relevant to this Agreement, Boston Scientific and its
Scimed subsidiary were engaged in manufacturing, packing, storing and
introducing into interstate commerce a medical device called the NIRTM ONTM
RangerTM with SOX (“NORS”) premounted coronary stent delivery system. Boston
Scientific through its Scimed subsidiary regularly manufactured the NORS from
certain components received in interstate commerce and introduced, following FDA
approval, the NORS into interstate commerce for shipment throughout the United
States;
 
 
 

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WHEREAS, the United States alleges that from August 12, 1998, through and
including October 5, 1998, Boston Scientific and its Scimed subsidiary shipped
34,589 NORS premounted coronary stent delivery system devices to hospital
catheterization laboratories in violation of the Federal Food, Drug, and
Cosmetic Act (“the FDCA”), 21 U.S.C. § 331(a). These allegations are explained
in detail in a Complaint filed by the United States in the United States
District Court, District of Massachusetts, on June 24, 2005, and are referred to
herein as “Covered Conduct;”
 
WHEREAS, the United States contends that through its distribution of adulterated
and misbranded medical devices, Boston Scientific obtained gains including
proceeds and profits to which it was not lawfully entitled, and that the United
States is entitled to equitable disgorgement;

WHEREAS, the United States further contends that it may have certain civil and
administrative claims or causes of action against Boston Scientific concerning
the Covered Conduct;

WHEREAS, Boston Scientific does not admit to the allegations in the Complaint
and specifically denies each and every allegation of wrongdoing;
 
WHEREAS, the United States is not making any concessions that its claims are not
well founded;

WHEREAS, the Parties mutually wish to avoid the delay, expense, inconvenience,
and uncertainty of protracted litigation, and to reach settlement under the FDCA
as to the Covered Conduct;
 
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Settlement Agreement
U.S.and Boston Scientific
June 24, 2005
 
 
 

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WHEREAS, this Agreement is made in compromise of disputed claims. Neither the
Agreement, its execution, or the performance of any obligations under it,
including any payments, nor the fact of the settlement, is intended to be, or
shall be understood as, an acknowledgment of responsibility, admission of
liability or wrongdoing, or other expression reflecting upon the merits of the
dispute by Boston Scientific, Scimed or any of their agents or employees.

 

III.  TERMS AND CONDITIONS
 
NOW, THEREFORE, in reliance upon the representations contained herein and in
consideration of the mutually negotiated promises, covenants, and obligations in
this Agreement, and for good and valuable consideration, receipt of which is by
each acknowledged, the Parties agree as follows:
 
1. Within five (5) business days from the effective date of this Agreement,
Boston Scientific shall pay the United States the sum of Seventy-Four-Million
dollars ($74,000,000.00) (the “Settlement Amount”). Boston Scientific agrees to
pay the Settlement Amount by electronic funds transfer pursuant to written
instructions to be provided by the United States Attorney's Office for the
District of Massachusetts.

2. Upon verified receipt by the United States of the full Settlement Amount, the
United States shall file its Complaint and the United States and Boston
Scientific shall file a joint stipulation providing for the dismissal with
prejudice of the Complaint. The stipulation shall provide that the Parties shall
each bear its own costs and attorneys' fees incurred in connection with the
action and that all rights of appeal are waived.
 
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Settlement Agreement
U.S.and Boston Scientific
June 24, 2005
 
 
 

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3. Subject to the exceptions below and conditioned upon the payment in full of
the Settlement Amount, the United States (on behalf of itself, its officers,
agents, agencies, and departments) releases Boston Scientific and its parents,
affiliates, divisions, subsidiaries, predecessors, successors, assigns,
transferees, and their respective current and former directors, officers,
shareholders, agents, attorneys, and employees from any civil common law or
equitable claim, sanction or remedy that the United States has or may have based
on the Covered Conduct, actionable under the FDCA.
 
4. Boston Scientific and its parents, affiliates, divisions, subsidiaries,
predecessors, successors, assigns, transferees, and their respective current and
former directors, officers, shareholders, agents, attorneys, and employees
release any civil common law or equitable claims, of whatever kind, against the
United States, its officers, agents, attorneys, and employees, arising out of or
relating to the Covered Conduct or the government's investigation of the Covered
Conduct, actionable under the FDCA.
 
5. The Parties agree that the statute of limitations tolling agreement,
originally signed on September 17, 2004 and extended through June 24, 2005 (“SOL
Tolling Agreements”), shall remain in effect until the filing of the joint
stipulation of dismissal by the Parties. Upon the filing of the joint
stipulation of dismissal by the Parties, the Parties agree that the SOL Tolling
Agreements are abrogated and are null and void and are of no effect.
 
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Settlement Agreement
U.S.and Boston Scientific
June 24. 2005
 
 
 

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6. Notwithstanding any term of this Agreement, specifically reserved and
excluded from the scope and terms of this Agreement as to any entity or person
are any and all:

(a) claims that the United States may have for personal injury or property
damage or for other consequential damages arising from products or services
delivered or caused to be delivered to the United States;

(b) any claims the United States may have under the False Claims Act, 31 U.S.C.
§§ 3729, et seq.;

(c) claims based on such obligations as are created by this Agreement;

(d) claims that the United States may have under the Internal Revenue Code;
Title 26 of the United States Code;
 
(e) liability to the United States (or any agencies thereof) for any conduct
other than that released herein;

(f) any liability to the United States for failure to deliver goods or services
due; and

(g) any criminal liability.

7. All costs (as defined by the Federal Acquisition Regulations (“FAR”), 48
C.F.R. § 1-31.205-47) incurred by or on behalf of Boston Scientific and its
parents, affiliates, divisions, subsidiaries, predecessors, successors, assigns,
transferees, and their respective current and former directors, officers,
shareholders, agents, attorneys, and employees in connection with (1) the
matters covered by this Agreement; (2) the United States' audit(s) and
investigation(s) of the matters covered by this Agreement; (3) Boston
Scientific’s investigation, defense, and corrective actions with respect to the
matters covered by this Agreement (including costs and attorneys' fees); (4) the
negotiation of this Agreement; and (5) the payment Boston Scientific makes to
the United States pursuant to this Agreement, shall be "unallowable costs" for
government contract accounting purposes. These unallowable costs will be
separately determined and accounted for
 
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Settlement Agreement
U.S.and Boston Scientific
June 24. 2005
 
 
 

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by Boston Scientific and Boston Scientific will not charge such unallowable
costs directly or indirectly to any contracts with the United States or seek
payment of such unallowable costs.
 
8. This writing constitutes the entire agreement of the Parties with respect to
the subject matter of this Agreement. There are no other agreements,
understandings, representations, warranties, inducements, or considerations
regarding the subject matter of this Agreement, except as expressly stated
herein.
 
9. This Agreement may not be modified, amended or terminated except by a written
agreement signed by the Parties specifically referring to this Agreement.
 
10. The Parties’ rights not expressly released in this Agreement are reserved.
 
11. This Agreement is intended to be for the benefit of the United States and
Boston Scientific, and by this instrument the Parties do not waive, compromise,
or release any claims or causes of action against any other person or entity not
expressly released by this Agreement.
 
12. Nothing in this Agreement constitutes an agreement by the United States
concerning the characterization of the amounts paid hereunder for purposes of
any proceeding under Title 26 of the U.S. Code (Internal Revenue Code).
 
13. Except for the release provided to the United States in Paragraph 4 of this
Agreement, nothing in this Agreement shall preclude or otherwise affect the
right of Boston Scientific to pursue and obtain contribution or indemnification
from any other person or entity arising out of or related to the Covered
Conduct.
 
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Settlement Agreement
U.S.and Boston Scientific
June 24, 2005
 
 
 

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14. The Parties consent to the United States’ and Boston Scientific’s disclosure
of this Agreement, and information about this Agreement, to the public.
 
15. This Agreement is governed by the laws of the United States. The Parties
agree that the exclusive jurisdiction for any disputes arising between and among
the Parties under this Agreement will be the United States District Court for
the District of Massachusetts.
 
16. The Parties represent that this Agreement is freely and voluntarily entered
into without any degree whatsoever of duress or compulsion. No provision of this
Agreement shall be construed against any party by reason of such party having
drafted such provision of this Agreement.
 
17. Each person who signs this Agreement warrants that he or she is duly
authorized to do so, as does the party on behalf of whom such person signs.
 
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Settlement Agreement
U.S.and Boston Scientific
June 24, 2005
 

 
 

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18. This Agreement is effective on the date of the last signature to it.
Facsimiles of signatures shall constitute acceptable, binding signatures for
purposes of this Agreement.
 
19. The Parties have executed four (4) identical copies of this Agreement, each
of which shall be deemed an original of this Agreement.
 
For BOSTON SCIENTIFIC
For the UNITED STATES
     
MICHAEL J. SULLIVAN
 
United States Attorney
 
District of Massachusetts
     
PETER D. KEISLER
 
Assistant Attorney General
 
Civil Division
 
United States Department of Justice
       
 

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PAUL SANDMAN, Esquire
 

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MICHAEL K. LOUCKS
General Counsel and
First Assistant United States Attorney
Authorized Representative of
District of Massachusetts
Boston Scientific Corporation
JAMES E. ARNOLD
 
Assistant United States Attorney
 
Deputy Chief, Health Care Fraud
 
District of Massachusetts
 
JAMES J. MCGOVERN
 

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ROBERT D. KEEFE, Esquire
Assistant United States Attorney
ANTON P. GIEDT
Assistant United States Attorney
Wilmer Cutler Pickering Hale and Dorr
 
60 State Street
 
Boston, Massachusetts 02109
 

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EUGENE M. THIROLF 
 
Director 
 
Office of Consumer Litigation
 
United States Department of Justice
 
 
 
 
 
 
Date: June 24, 2005   

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Settlement Agreement
U.S.and Boston Scientific
June 24, 2005