**EXHIBIT 10.20****DISTRIBUTOR AGREEMENT****This Distributor Agreement**is made, effective as of the 24th day of January 2006 (the“Effective Date”), by and among **Medtronic USA, Inc.**(“Medtronic”) and **VNUS Medical Technologies,Inc.**(“VNUS”).**RECITALS**     **a)    Medtronic.**Medtronic is a Minnesota corporation with its principal place of business at710 Medtronic Parkway, Minneapolis, MN 55432-5604. Medtronic is a leading manufacturer of medicaltechnologies including products, therapies and services used to treat conditions such as heartdisease, neurological disorders, and vascular illnesses. The maintenance of Medtronic’s reputationas the industry leader in performance and quality is a material element of this Agreement.     **b)    VNUS.**VNUS is a Delaware corporation, with its principal place of business at 2200 ZankerRoad, Suite F, San Jose, CA 95131. VNUS is in the business of manufacturing and selling productsfor minimally invasive treatment of venous disease. VNUS has an existing marketing and sales forcewhich can economically and effectively address the Market Segment (as defined below).NOW, THEREFORE, the parties agree as follows:**I. DEFINITIONS**Whenever the following terms appear capitalized in this Agreement they shall have the indicatedmeanings.**1.1    Market Segment and Territory.**The terms “Market Segment” and “Territory” shall have themeanings described on Schedule 1.1, attached hereto and may be revised from time to time asmutually agreed in writing by Medtronic and VNUS.**1.2    Product(s).**The terms “Product” or “Products” shall mean those Products described in Schedule1.2 as amended from time to time (the “Products”).**1.3    User Warranty.**The term “User Warranty” shall mean the written Medtronic warranty ordisclaimer of warranty which accompanies the Product when sold to a customer as such warranty isestablished or revised by Medtronic from time to time, including all restrictions and limitationson damages and remedies.**1.4    Customer.**The term “Customer” shall mean any potential or existing customer of Product in theMarket Segment in the Territory except those existing Medtronic accounts that decline to beconverted to VNUS accounts pursuant to Sections 2.5 and 2.6.Page 1*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
**II. APPOINTMENT OF DISTRIBUTOR****2.1    Appointment of VNUS as Distributor.**Subject to the terms and conditions of this Agreement,Medtronic hereby appoints VNUS, and VNUS accepts such appointment, as Medtronic’s authorizedexclusive distributor with the exclusive right (even as to Medtronic but subject to Sections 2.5and 2.6 below) to promote, market, sell, and distribute Products in the Market Segment in theTerritory. The parties acknowledge and agree that VNUS shall not sublicense any of its rights orobligations to distribute Products in the Territory.**2.2    Term.**Subject to the termination provisions in Article 9, VNUS’ appointment shall be effectiveas of the Effective Date and shall continue for an initial term of five (5) years (the “**InitialTerm**”). This Agreement will automatically renew for two (2) additional twelve (12) month terms(“**Renewal Terms**”) unless either party has given the other party written notice at least one hundredtwenty (120) days prior to the end of either the Initial Term or the first Renewal Term that itintends to not renew the Agreement; provided, however, Medtronic may only give notice ofnon-renewal if VNUS fails to satisfy its Minimum Annual Quota pursuant to Section 3.15. As used inthis Agreement, the Initial Term and any Renewal Term shall collectively be referred to as the“**Term**”.**2.3    Products.**If Medtronic decides to cease manufacture and sale of any particular Product,Medtronic may delete such Product from Schedule 1.2, provided (i) Medtronic provides VNUSwith at least ninety (90) days prior written notice of such proposed removal of a particularProduct from Schedule 1.2, and (ii) such Product does not represent ten percent (10%) or more ofVNUS’ averaged unit sales during the six consecutive months immediately preceding Medtronic’swritten notice to VNUS of such proposed removal. Notwithstanding the removal of a particularProduct from Schedule 1.2, VNUS shall have the right to continue selling its existing inventory ofany such removed Product. At any time Medtronic may offer to add new products to those authorizedfor promotion and distribution by VNUS, and VNUS may elect whether or not to accept such newproduct (in which instance Schedule 1.2 shall be amended to add such new Product). Withoutlimiting the foregoing, Medtronic shall promptly notify VNUS of any new U-CLIP technology-relatedproducts that are in development (or that otherwise become available to Medtronic) and areapplicable for use in the Market Segment and Territory, and in accordance with the foregoingprovision, VNUS may elect whether or not to accept such new product (in which instance Schedule 1.2shall be amended to add such new Product). If VNUS elects not to accept such Product, Medtronicmay, in its sole discretion, market such Product or seek and retain other distributors for suchProduct.**2.4    Direct Sales to New Customers.**If Medtronic receives orders or requests for Products from NewCustomers, Medtronic will refer such Customers to VNUS for the sale. Sales by VNUS to Customersusing Products in the Territory but outside the Market Segment (such as cardiac, bariatric andother non-vascular applications) will not be included in the total sales by VNUS for purposes ofdetermining whether VNUS has met the Minimum Annual Quota pursuant to Section 3.15 for the periodin which the sale is made.**2.5    Medtronic Limited Right to Sell in Market Segment.**Notwithstanding VNUS’ appointment as theexclusive distributor of Product, Medtronic may sell Products in the Market Segment in theTerritory if such Products are sold as part of a kit or other combination with another Medtronicproduct for use in a procedure in which the other Medtronic product is used. Medtronic may alsosell Products in the Market Segment in the Territory solely to those existing Medtronic accountsthat decline to bePage 2*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
converted to VNUS accounts pursuant to Section 2.6. Except for Medtronic’s limited foregoing right, Medtronic shall not sell in the Market Segment inthe Territory any Products, either alone or in combination, that are used in arterial-venous accessgrafts (AVG), arterial-venous access fistulas (AVF), and peripheral bypass procedures.**2.6    Existing Medtronic Accounts.**Medtronic shall, upon execution of this Agreement, provide to VNUSin writing a list of existing Medtronic accounts for Products that are within the VNUS MarketSegment and Territory as defined in Schedule 1.1. It is understood and agreed by the Parties thatVNUS shall affirmatively contact these accounts and offer to convert them to VNUS accounts.**III. DISTRIBUTOR’S RESPONSIBILITIES**     Subject to the other terms and conditions of this Agreement, VNUS shall perform the followingresponsibilities:**3.1    Promote and Sell.**VNUS shall use commercially reasonable efforts to promote, sell and supportthe Products in the Market Segment in the Territory. Without limiting the generality or extent ofthe foregoing, VNUS and anyone acting on its behalf shall not knowingly make any false ormisleading statements with regard to the Products of Medtronic or any of its competitors. Allrepresentations and claims that VNUS or any of its representatives makes with respect to theProducts shall be fully consistent with all Medtronic labeling and shall conform to anycommercially reasonable policies or guidelines that Medtronic may from time to time reasonablyestablish for its Products and inform VNUS in writing thereof.**3.2    Clinical Trials.**Upon obtaining prior written approval from Medtronic, not to be unreasonablywithheld or delayed, VNUS may conduct and participate in the design, implementation, analysis andpublication of all studies and clinical trials associated with the Product(s) in the Market Segmentin the Territory.**3.3    Facility and Staff.**VNUS shall maintain a place of business sufficient to carry out its dutieshereunder in a manner consistent with the standards commonly required of a company that sellsmedical devices of commercial potential similar to the Products. VNUS shall also maintain atrained sales staff that is (i) capable of promoting and selling the Products in a mannerconsistent with all applicable laws and regulations, (ii) trained on the use and function of theProducts, and (iii) skilled and experienced in selling medical devices to the medical practiceareas in which the Products are used within the Market Segments and the Territory. To assure thatVNUS possesses thorough knowledge on the safe and effective use of the Products, VNUS shallparticipate in Product training courses as reasonably requested by it or by Medtronic pursuant toSection 4.4 below.**3.4    Inventory.**VNUS shall maintain an inventory of Products reasonably necessary to fill itsforecasted sales under this Agreement. To assure the effectiveness and quality of the Products,Medtronic may establish, and inform VNUS in writing of, reasonable policies or guidelines withregard to the rotation, storage, or shelf life of Products. VNUS shall use commercially reasonableefforts to comply with all such policies or guidelines and shall properly dispose of any Products(consistently with all applicable laws and regulations concerning waste and the environment) whichare not useable as a result of the application of such policies or guidelines. Such policies mayinclude a requirement for minimumPage 3*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
remaining shelf life at the time such Product is delivered to aCustomer. In no event shall Medtronic be responsible to accept return of or reimburse VNUS as aresult of any Product which becomes unusable due to the expiration of such minimumshelf life; provided, however, the foregoing limitation shall not apply to any Product that has a shelflife less than six (6) months when received by VNUS from Medtronic. All returned Products shall bedealt with pursuant to Medtronic’s Returned Inventory Policy which is attached hereto as Schedule3.4, as amended from time to time.**3.5    Product In-Service.**VNUS shall perform post-sale delivery, instruction, and training toCustomers in a manner that is consistent with commercially reasonable standards or guidelines whichMedtronic may from time to time establish and inform VNUS in writing thereof.**3.6    No Modification of Products.**VNUS shall sell the Products only in the form, condition andpackaging as provided or approved by Medtronic. VNUS shall not alter, modify or change any Productor its package without Medtronic’s prior written consent.**3.7    User Warranty Delivery to Customer.**VNUS shall deliver to each of the Customers the UserWarranty furnished by Medtronic with each Product, as revised from time to time.**3.8    Credit/Finance.**VNUS shall make full payment to Medtronic of the purchase price for eachshipment of Product and of any other payment obligations it owes to Medtronic when due. VNUS shallinitially be granted credit terms of **** from date of receipt of invoice for its purchaseof Product. Such credit terms are contingent upon VNUS’ continued material compliance with all ofits monetary obligations to Medtronic. If, at any time in the reasonable opinion of Medtronic,VNUS’ creditworthiness has materially deteriorated, Medtronic may modify or terminate such creditterms; provided that such modification or termination shall not apply to any order which has beenpreviously accepted by Medtronic.**3.9    Device Tracking**. VNUS shall maintain a system to track each Product in accordance withapplicable law, including 21 CFR 821, as amended, and such other reasonable requirements asMedtronic may from time to time establish with respect to Product tracking. Such system will, at aminimum, be able to track a Product to its final destination and shall have procedures in placewhich facilitate locating each Product shipped in the event customer notifications or productmodifications are required. By the 15th of each calendar month during the term of this Agreement,VNUS shall provide Medtronic with a written report identifying all Products which were placed inservice the preceding calendar month (“**Product Tracking Report**”). Such Product Tracking Reportshall be in the form requested by Medtronic but at a minimum shall include the name of theCustomer, the specific address where the Product was delivered, the date the Product was delivered,the serial number (if any), model and Product name. The tracking system and the recordsdocumenting the tracking shall be subject to audit by Medtronic at reasonable times upon reasonablenotice. Upon termination or expiration of this Agreement, VNUS shall, at Medtronic’s request,deliver all then current records to Medtronic relating to the location of Products sold by VNUS inthe Market Segment in the Territory.**3.10    Customer Complaints, Incident Reports, and Recalls.**VNUS shall use diligent, commerciallyreasonable efforts to resolve all Customer complaints that relate solely to the quality of servicesprovided by VNUS in connection with Products. VNUS shall refer all complaints relating to Productsand all requests for service to Products to the Medtronic Product Complaint Coordinator at****, or such other number as Medtronic may from time to time designatein writing toPage 4*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
VNUS. Medtronic shall resolve all such complaints and requests for service as soonas practicable using diligent, commercially reasonable efforts. VNUS shall immediately report toMedtronic any incident of which VNUS becomes aware that involves or may involve the failure ormalfunction of a Product or might constitute a reportable event under 21 CFR Section 803 (MedicalDevice Reporting). Medtronic as the manufacturer of the Products shall be solely responsible for all medical device reporting toregulatory agencies with respect to the Products. In the event either party has reason to believethat one or more of the Products might be the subject of a recall or withdrawal from distribution,such party shall immediately notify the other. Any decision as to whether or not to initiate arecall or product replacement or product enhancement in accordance with Section 4.5, shall beMedtronic’s, in its sole discretion. If such recall is required because of the negligent act orwrongful omission of VNUS, then the costs and expenses of such recall shall be reimbursed by VNUSto Medtronic. VNUS shall provide, at Medtronic’s expense, assistance reasonably requested byMedtronic in connection with any reporting, recall, legal, or regulatory matter relating to theProducts. If VNUS in good faith disagrees in writing with Medtronic’s decision not to withdraw orrecall the Product, then VNUS may discontinue its distribution of such Product under this Agreementuntil the issue is resolved.**3.11   Restriction on Sales of Competitive Products.** ** **** ****a.) Restriction.**VNUS, including without limitation its employees, officers, andagents, shall not sell, handle, promote, or be involved, directly or indirectly, inthe offering for sale, promotion, or manufacture of any product which may be used increating anastomoses or vascular approximation in the Territory (such product, a“**Competitive Product**”). If VNUS, upon Medtronic’s offer, elects to add a new Productto Schedule 1.2, VNUS shall have ninety (90) days after such amendment to ceasedistributing any Competitive Product to the new Product added to Schedule 1.2.Failure by VNUS to abide by the terms of this Section 3.11 shall be deemed a materialfailure of VNUS’ obligations under this Agreement; provided, however, VNUS may curesuch failure immediately by ceasing to sell, distribute, and promote such CompetitiveProduct.  ** **** ****b.) Duration of Restriction.**The restriction contained in this Section shallcontinue for ****; provided, however, that if this Agreement is terminatedby VNUS for Medtronic’s Breach under Section 9.1(c), the restriction shall end upontermination of the Agreement.**3.12    Accessories and Other Supplies.**VNUS shall sell only Medtronic approved accessories, suppliesand consumables for use with the Products. VNUS may seek Medtronic’s approval to sell otheraccessories, and such approval shall not to be unreasonably withheld.**3.13    Compliance with Laws and Medtronic Policies.**VNUS recognizes that compliance with allapplicable laws and maintaining a high standard of ethical behavior in the conduct of itsactivities under the Agreement is an essential requirement of this Agreement. VNUS, therefore,agrees as follows:     **(a) **To comply with all applicable laws, rules, and regulations in its activities relating tothe marketing, promotion, and sale of Products, including without limitation, those promulgated bythe U.S. Food and Drug Administration as applicable to the Products,     **(b) **To conduct all activities under this Agreement in accordance with the provisions of theMedtronic Code of Conduct and U.S. Business Conduct Standards attached hereto as Schedule 3.13 (thePage 5*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
“**Medtronic Compliance Requirements**”) as amended from time to time by Medtronic with written noticeto VNUS,     **(c) **To require its employees who interact with customers who purchase Products, or who arein a position to influence customer purchasing decisions regarding Products, to completetraining on the Medtronic Compliance Requirements, and     **(d) **To provide Medtronic access to VNUS’ relevant books and records relating to the sale ofProducts for the sole purpose of verifying VNUS’ compliance with the requirements of this Article3, provided, such access shall be conducted after reasonable prior notice by Medtronic to VNUSduring VNUS’ ordinary business hours and shall not be more frequent than twice during any calendaryear.Failure to comply with any requirement of this Article shall be deemed a material breach of thisAgreement by VNUS and shall entitle Medtronic to terminate this Agreement in accordance withSection 9.1(b).**3.14    Exclusive Source for Medtronic Products.**VNUS shall only sell Products obtained directly fromMedtronic to Customers; that is, VNUS may not sell any new or used Product that has been obtainedfrom any source other than Medtronic.**3.15    Purchase Quota.**During the Term, VNUS shall purchase the minimum annual requirementsspecified in Schedule 3.15 (the “**Minimum Annual Quota**”), provided that Medtronic supplies on atimely basis the amounts of Product ordered by VNUS. The Minimum Annual Quota will be allocatedover the applicable year in minimum quarterly amounts also specified in Schedule 3.15 (the “**MinimumQuarterly Quota**”). Subject to Section 5.6 and the remaining terms of this Section 3.15, if VNUSfails to purchase the Minimum Annual Quota in any contract year or the Minimum Quarterly Quota forany two consecutive quarters (whether or not the quarters are in the same contract year), thatfailure shall be deemed a material breach of the Agreement and Medtronic shall have the right toterminate this Agreement upon ninety (90) days written notice to VNUS; provided that VNUS may curethe breach within the ninety (90) day notice period by paying Medtronic an amount equal to**** of the amount by which VNUS failed to meet the applicable Minimum Quota.Waiver by Medtronic of its right to terminate this Agreement under this Section 3.15 in any one ormore instance shall not be deemed a waiver of such right for any subsequent failure by VNUS to meetthe Minimum Annual Quota or the Minimum Quarterly Quota. The partiesagree that for **** of this Agreement, the Minimum Annual Quota will increase at a rate of****  year-over-year.**3.16    Product Sales Outside Market Segment or Territory.**If VNUS receives orders or requests forProducts from customers outside the Territory and Market Segment, VNUS will refer such customers toMedtronic for the sale. During the Term, VNUS shall not sell Products outside the Market Segmentor Territory without Medtronic’s prior written consent which may be granted in Medtronic’s solediscretion.**3.17    Business Review.**A VNUS representative shall meet quarterly with Vice President, Sales forMedtronic Cardiac Surgery (or such other person designated by Medtronic) to report on and discusssales and operations during the prior quarter and discuss future objectives, plans and strategies.Page 6*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
**IV. MEDTRONIC’S RESPONSIBILITIES**     Subject to the other terms and conditions of this Agreement, Medtronic shall undertake toperform the following responsibilities:**4.1    Manufacture and Provide Products.**Medtronic shall use commercially reasonable efforts tomanufacture (or have manufactured) the Products and shall supply the Products to VNUS, subject toavailability, upon the terms and conditions of this Agreement. Products shall, at the time ofdelivery to VNUS, (i) have been manufactured in accordance with the specifications and allapplicable laws and regulations including without limitation all FDA regulations and QSR and cGMP(as applicable); (ii) be sterile; (iii) have the standard minimum shelf life customarily applicableto such Products when sold by Medtronic; and (iv) be packaged in accordance with the Productlabeling provisions of Section 4.2. Upon VNUS’ reasonable request, Medtronic shall provide accessto Medtronic’s facilities that manufacture and distribute the Product; such access shall beconducted after reasonable prior notice by VNUS to Medtronic during Medtronic’s ordinary businesshours and shall not be more frequent than twice during an annual period.**4.2    Product Labeling.**All Product labeling shall be mutually acceptable to both parties and shallbe in compliance with all Medtronic policies and all applicable laws and regulations. In order tominimize the potential for cross-selling in the Market Segment in the Territory, Products shall belabeled and packaged as VNUS product with VNUS look and styling, including different part numbersand statements that the Products were manufactured by Medtronic for distribution by VNUS.**4.3    Promotional Materials.**Medtronic shall provide to VNUS such sales literature, advertising andpromotional materials, and other information, programs, and sales support by VNUS in selling theProducts. Notwithstanding the foregoing, VNUS may develop and/or use unique promotional materialsand sales tools other than those supplied by Medtronic, provided VNUS has received Medtronic’sprior written approval, such approval not to be unreasonably withheld. Medtronic agrees to reviewall marketing and promotional materials within ten (10) business days after initial receipt fromVNUS. If editing changes or approval are not received within the aforementioned period,Medtronic’s approval will be deemed granted. VNUS shall comply with applicable Medtronic policieswith regard to the use of Medtronic’s copyright notice. Other than the cost for materials providedby Medtronic pursuant to this section, VNUS will be responsible for all expenses associated withits advertising and promotion of the Products, unless otherwise agreed to in writing prior to theexpenditure.**4.4    Training and Support.**Medtronic shall offer such general and specialized sales and technicaltraining, materials and support as necessary to adequately train all appropriate VNUS personnel.The costs and expenses of training VNUS representatives shall be ****. Such clinical and technical support shall be provided by Medtronic to VNUS personnel atreasonable locations of VNUS’ choice, and shall include at aminimum (a) **** oftechnical and Product training of appropriate VNUS personnel during **** ofthis Agreement; (b) an additional **** of follow up training duringthe subsequent ****; and (c) appropriate training as the parties mutually determine is necessary forany and all new Products.**4.5    Product Changes.**Medtronic may, at any time, modify, alter, change, or improve a Product. Anysuch change shall be effective sixty (60) days after Medtronic provides VNUS with a written noticePage 7*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
to that effect however changes to a Product based upon requirements under applicable federal law orregulation shall not be subject to a sixty (60) day notice requirement.**4.6   Sales outside the Market Segment and Territory.**Except as provided in Sections 2.5 and 2.6, inthe event that either party becomes aware that Products are being sold or have been sold at anytime within the previous six (6) month period by Medtronic or its distributors, licensees or agentsin the Market Segment in the Territory, such party shall provide the other party with writtennotice of such sales activity. Medtronic shall cease such sales activity in the Market Segment andin the Territory within thirty (30) days of such notice. Within sixty (60) days of the foregoingwritten notice, Medtronic will compensate VNUS in an amount equal to**** of the sale price of all such products in the Market Segment in the Territory. Likewise, in the event thateither party becomes aware that Products are being sold or have been sold at any time within theprevious six (6) month period by VNUS outside the Market Segment and Territory, such party willprovide written notice to the other party of any such VNUS sales activity outside of the MarketSegment and Territory. VNUS shall cease such activity within thirty (30) days. Within sixty (60)days of the foregoing notice, VNUS will compensate Medtronic in an amount equal to**** of the sale price of all such products outside the Market Segment and Territory.**V. ORDERING; DELIVERY AND ACCEPTANCE****5.1    Initial Stocking Order.**VNUS shall be entitled to purchase a one-time initial stocking orderof Products at a ******discount off of the Product Transfer Price set forth in Schedule6.1.**5.2    Purchase Orders.**VNUS shall order Products from Medtronic by submitting written purchaseorders identifying the number(s) and type(s) of Products ordered, the requested delivery date(s)and any additional information required to enable Medtronic to fill the order. All orders forProducts will be pursuant to such standard terms as the parties may establish from time to time atthe prices set forth in Section 6.1 below. All orders for Products will be subject to acceptanceby Medtronic, provided Medtronic will not unreasonably reject any purchase order for Products thatmeet this Section 5.2 and is for a quantity of Products not inexcess of **** of VNUS’ most recentforecast pursuant to Section 5.5. Medtronic will accept or reject each such order submitted byVNUS within ten (10) business days after receipt of the order. Accepted orders will benon-cancelable. For clarity, any documents submitted to Medtronic in addition to Medtronic’sstandard terms are for informational purposes only and are not part of the terms of sale.**5.3    Delivery.**Medtronic shall use commercially reasonable efforts to deliver accepted orders forProducts on time pursuant to the purchase order. However, in no event shall Medtronic beresponsible for any loss or damage which is claimed to have been caused by a delay in shipping anorder, whether or not Medtronic may have been advised of the possibility of such loss or damages.Medtronic shall not be responsible for any loss or damage which is claimed to have been caused by adelay in shipping an order, whether or not Medtronic may have been advised of the possibility ofsuch loss or damages, provided Medtronic performed its manufacture and delivery obligations withcommercially reasonable care. Medtronic shall ship Product by a commercially reasonable carrier ofVNUS’ choice. All Products shall be shipped to VNUS FOB (Incoterms 2000) Medtronic’s distributionfacility. Title and risk of loss shall transfer to VNUS upon delivery of Product to the carrierfor transport to VNUS.Page 8*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
**5.4   Inspection and Rejection.**     **(a) Returned Goods.**If any Product does not conform to the order or is defective at the timeit was shipped to VNUS then VNUS may return the defective Product to Medtronic within thirty (30) days of receipt by VNUS; provided that VNUS (i) notifies Medtronic or such agentas Medtronic may designate, (ii) describes the defect or non-conformity, (iii) obtains approval forreturn in accordance with Schedule 5.4, and (iv) complies with such other return instructions asMedtronic may reasonably require. Upon receiving return authorization VNUS may ship the defectiveor non-conforming Product to the Medtronic location authorized by Medtronic, properly labeled,freight prepaid, and fully insured at face value. Subject to Medtronic’s right to verify that theProduct was defective or non-conforming at the time of shipment to VNUS, Medtronic shall, at VNUS’option, either replace the Product and reimburse VNUS for its out of pocket shipping and insuranceexpenses or refund the purchase price paid for by VNUS for the Product involved. In the event thatVNUS elects replacement, Medtronic shall supply such replacement Product at no additional costwithin fifteen (15) days of Medtronic’s receipt of such Product. In no event shall Medtronic beresponsible to replace or refund for any Product (a) that has been damaged by abuse or misuse, (b)for which any unauthorized service or repair was performed or attempted, (c) that was repossessed,(d) has been used as a demonstration unit, or (e) was damaged by or during transport to VNUS. Therepair and replacement provided for in this section shall be VNUS’ sole and exclusive remedy forany claim relating to any alleged defect or nonconformity in the Products. In the case of Producthaving latent defect(s) that are not reasonably detectable at the time of acceptance, VNUS mayreject such Product by giving written notice to Medtronic of VNUS’ rejection of such Product withinten (10) days after discovery of such defects, but such notice may in no event be later than one(1) year after receipt of such shipment.     **(b) **Notwithstanding anything to the contrary in Section 5.4(a), Medtronic shall not beresponsible for replacing or refunding any Product (i) that has been damaged in transit by VNUS’carrier or by abuse or misuse by VNUS or its agent or customer, (ii) for which any unauthorizedservice or repair was performed or attempted, (iii) that was re-processed, (iv) has been used as ademonstration unit, or (e) was damaged by or during transport to VNUS. The repair and replacementprovided for in this Section 5.4 shall be VNUS’ sole and exclusive remedy for any claim relating toany alleged defect or nonconformity in the Products, but subject to Article 10.**5.5   Forecasts.**VNUS will provide Medtronic with a**** month rolling non-binding forecastof Product purchases on a **** basis by ****.**5.6    Failure to Supply.**If Medtronic fails to supply on a timely basis any material amounts ofProduct(s) ordered by VNUS, the parties shall confer in good faith to solve the supply problem andMedtronic shall use its best efforts to cure such problem and to keep VNUS informed on a regularbasis until such cure is implemented. If Medtronic is forced to allocate production anddistribution of the Products among its various distributors and customers, Products will beallocated to VNUS in a share proportional to that percentage of Medtronic’s total sales of theProduct, which VNUS’ sales comprised in the preceding twelve (12) month period, with the exceptionof the initial twelve month period of this Agreement, which proportion shall be determined on thebasis of projected twelve (12) month sales. If, as a result of such allocation, VNUS is unable topurchase on a timely basis the Minimum Annual Quota or Minimum Quarterly Quota (as applicable), theapplicable Quota will be reduced by the amount of bona fide orders from VNUS that Medtronic isunable to fill.Page 9*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
**VI. PRICE AND RESALE TERMS****6.1    Product Transfer Pricing.**For all orders of Product other than the initial stocking orderpursuant to Section 5.1 above, Medtronic will charge VNUS the current list price for theProducts, less the discount set forth on Schedule 6.1 (the result, the “Product Transfer Price”).The current list price for the Products is attached hereto in Schedule 6.1. All Product pricinginformation, including list price, distributor discount, and Product Transfer Prices, shall bedeemed Confidential Information under this Agreement. The Product Transfer Prices set forth onSchedule 6.1 shall be applicable for **** following theEffective Date. After ****, the Parties agree that the Product Transfer Price may increaseonce every **** months for the remaining term of the Agreement, at a maximum rate of ****..     **(a) **Increased Product Transfer Prices will not apply to purchase orders accepted by Medtronicbefore the effective date of the price increase unless such orders provide for delivery more thanthirty (30) days after the date of acceptance of the order. ****.     **(b) **All listed Product Transfer Prices are exclusive of delivery charges, freight, insurance,state and local use, sales and similar taxes. When such charges apply they may appear as separateitems on Medtronic invoices.**6.2    Resale Price.**VNUS retains the sole and exclusive right to establish the prices at which itdistributes and resells the Products in the Market Segment in the Territory, in its solediscretion.**VII. WARRANTY; DISCLAIMER; LIMITATION OF LIABILITY****7.1    Mutual Representation and Warranties.**Each of Medtronic and VNUS represents and warrants tothe other that as of the Effective Date (a) it has the full corporate power to enter into andperform this Agreement; and (b) this Agreement constitutes a legal, valid and binding obligation.**7.2    Medtronic Representations and Warranties.**Medtronic represents, warrants, and covenants that:     **(a) **at the time of shipment, Product supplied by Medtronic hereunder (i) shall meet thespecifications provided by Medtronic for such Product, (ii) shall not be adulterated or misbrandedwithin the meaning of the U.S. Federal Food, Drug and Cosmetic Act (the “**Act**”), and (iii) shall bemanufactured in accordance with QSR and cGMP (as applicable) and as defined by the Act;     **(b) **as of the Effective Date, (i) Medtronic has not granted any rights to any third party topromote or sell Products in the Market Segment in the Territory, and (ii) all Products listed onSchedule 1.2 have been approved by the FDA for sale and distribution in the Territory; and     **(c) **during the Term, (i) neither Medtronic nor its affiliates shall, nor shall they cause,license, or permit others to, promote, license, sell or cause to be sold Products within the MarketSegment in the Territory, except to the extent permitted under Section 2.6 hereto, and (ii)Medtronic shall obtain andPage 10*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
maintain all necessary approvals and clearances for all Products that are promoted and/or sold by VNUS in the Market Segment in the Territory.**7.2    VNUS Representations and Warranties.**VNUS represents, warrants, and covenants that it willdirect its sales and marketing personnel to promote and/or sell Products for use solely in theMarket Segment in the Territory.**7.3    User Warranty.**The User Warranty, attached hereto as Schedule 7.3, is the only warrantygranted by Medtronic to a Customer of a Product covering such Product. Medtronic will provide acopy of the User Warranty with each Product sold hereunder to which it applies. In addition,Medtronic may supply VNUS with point-of-sale copies of the User Warranty for pre-sale disclosure toprospective users. VNUS shall comply with all applicable federal or state laws relating todisclosure of product warranties and limitations, including but not limited to those of the FederalTrade Commission. NO WARRANTY OTHER THAN THE USER WARRANTY IS EXPRESSED OR IMPLIED BY MEDTRONIC.MEDTRONIC SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR APARTICULAR PURPOSE. The User Warranty shall be deemed to commence on the earlier of (1) the dateVNUS delivered the Product to the Customer as reported to Medtronic in the monthly Product TrackingReport or (2) six (6) months from the date on which the Product was received by VNUS fromMedtronic.**VIII. INTELLECTUAL PROPERTY****8.1    Rights to Intellectual Property.**Except as expressly set forth in Section 8.2 below, VNUSshall have no right or license under this Agreement to utilize any information, know-how,proprietary data, trademarks, or patent rights which VNUS may have or may secure in the futurerelating to any of the Products, except as may be incidental only to the marketing, promotion,distribution and/or sale of the Products and the right to use such Products by VNUS’ Customers.VNUS may not reproduce any copyrighted material of Medtronic without the prior written consent ofMedtronic.**8.2    Trademark Use.**Subject to the terms and conditions of this Agreement, including withlimitations of this Section 8.2 below, Medtronic hereby grants to VNUS a non-exclusive licenseunder the Medtronic logos, trademarks, and service marks that appear on the Products or in anyMedtronic-furnished marketing collateral specific to the Products (“**Medtronic Marks**”) in theTerritory solely to market and promote the Products to the Market Segment in the Territory for theTerm. VNUS shall not use Medtronic’s name, or any other similar name or any other trademark ofMedtronic except in advertising, pamphlets, or other materials promoting the Products. VNUS maylabel the Products with the statement “Manufactured by Medtronic for Distribution by VNUS.” Allsuch materials referencing Medtronic or Products must be approved in writing by Medtronic prior totheir use or dissemination, such approval not to be unreasonably withheld. VNUS may not useMedtronic’s name or any of Medtronic’s trademarks in its corporate or business name, or in anyother manner which Medtronic deems adverse to its interests. Use of any Medtronic trademark ortrade name associated with the Products may be done only in accordance with usage guidelines asestablished by Medtronic from time to time. Upon the termination of VNUS’ appointment it shallimmediately discontinue any further use or display of Medtronic trademarks, trade names or any markor name (except as to sales of remaining inventory of Products as permitted in Section 9.3). VNUSshall notify Medtronic if it becomes aware of any unauthorized use of Medtronic trademarks or tradenames or of the use of any mark or name which mightPage 11*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
confuse the public.**IX. TERMINATION****9.1    Termination**. This Agreement may be terminated prior to the expiration of its Term pursuant toany of the following provisions:     **(a) Failure to Satisfy Minimum Annual Quota or Minimum Quarterly Quota.**          **(i)**Subject to Section 3.15, and only after giving effect to any payment by VNUS to Medtronicpursuant to such Section 3.15, if VNUS does not satisfy the applicable Minimum Annual Quota or theMinimum Quarterly Quota for two consecutive quarters (but provided such inability was not caused byMedtronic failing to timely supply Products ordered by VNUS), Medtronic shall have the right toterminate the Agreement.     **(b) Breach of Agreement**. If either party materially fails to perform an obligation orcondition of this Agreement (other than VNUS’ failure to satisfy the Minimum Annual Quota and/orthe Minimum Quarterly Quota) and fails to cure such default within sixty (60) days of receipt ofwritten notice of such default from the other party specifying the nature of such default, then theparty giving the notice may terminate this Agreement by sending a separate written notice oftermination to the defaulting party. Any material violation of any material law or regulationapplicable to this Agreement or any violation of the Medtronic Code of Conduct or U. S. BusinessConduct Standards shall be deemed an incurable breach. In the event of a breach that cannotreasonably be cured within sixty (60) days of receipt of written notice of a breach, then thealleged breaching party shall have such additional time as necessary not to exceed an additionalthirty (30) days (for a total of ninety [90] days) to cure the breach if the alleged breachingparty (i) during such sixty (60) day period has submitted a plan, that if successfully carried out,would be effective in curing such breach, and has commenced execution of such plan, and (ii)diligently pursues such plan thereafter.     **(c) Bankruptcy**. Either party may terminate this Agreement effective immediately upon deliveryof written notice to the other party, if the other party (i) ceases to actively conduct itsbusiness, (ii) files a voluntary petition for bankruptcy or has filed against it an involuntarypetition for bankruptcy, (iii) makes a general assignment for the benefit of its creditors, or (iv)applies for the appointment of a receiver or trustee for substantially all of its property orassets or permits the appointment of any such receiver or trustee who is not discharged withinthirty (30) days of such appointment.**9.2    Effect of Termination.**Upon the effective date of termination or expiration of VNUS’appointment for any reason, VNUS shall immediately cease to be an authorized Medtronic distributor(except as to sales of remaining inventory of Products as permitted in Section 9.3 below) and thereshall be nothing payable by either party except as may be due as a result of prior sales and theseshall be paid as they become due. Either party may, at its option, cancel any outstanding ordersfor purchase which have not been shipped by the effective date of the termination. All obligationswith respect to Confidentiality, return of intellectual property and other obligations which bytheir nature are continuing shall survive the termination of this Agreement. Neither party shallbe liable to the other for damages of any kind resulting from or caused by said termination,including, but not limited to, damages related to losses through commitments on obligation orleases, loss of investment, or present or prospective profits,Page 12*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
inability to meet obligations, or any other causes or reasons whatsoever.**9.3    Repurchase/Sale of Inventory.**Upon any termination of this Agreement, Medtronic shall have theright, exercisable in its sole discretion, to buy back from VNUS all or any of the Products ownedby VNUS on the date of termination. The price Medtronic shall pay forthe Products will be ****. Products repurchased fromVNUS by Medtronic pursuant to this Section 9.3 shall be shipped promptly by VNUS as instructed byMedtronic, at Medtronic’s commercially reasonable expense, to a location specified by Medtronic. For a period not to exceed six (6) months from the date oftermination, VNUS may in its sole discretion, sell or otherwise properly dispose of any Productswhich are not purchased by Medtronic, provided such sales and disposal are performed in accordancewith the terms set forth in this Agreement.**9.4    Return of Materials.**Upon termination of its appointment, VNUS shall immediately return toMedtronic all promotional and other Product related materials previously provided by Medtronic toVNUS (except for a reasonable quantity as needed by VNUS to sell the remaining inventory ofProducts, as permitted in Section 9.3). If VNUS has paid Medtronic for any of the materialsreturned, Medtronic shall reimburse VNUS the purchased price of such returned materials to theextent, and only to the extent that such materials are currently useable by Medtronic.**9.5    Non-solicitation**. For a period of twelve (12) months after expiration or termination of thisAgreement for whatever reason, VNUS will not solicit for employment, directly or through a thirdparty agent, or hire any person who was a Medtronic Cardiac Surgery employee during the twelvemonths preceding the termination date of this Agreement. For a period of twelve (12) months afterexpiration or termination of this Agreement for whatever reason, Medtronic’s Cardiac Surgerybusiness unit will not solicit for employment, directly or through a third party agent, or hire anyperson who was an employee of VNUS during the twelve (12) months preceding the termination date ofthis Agreement. Nothing contained in this Agreement will prevent either party from hiring anyemployee of the other party if the employee’s application for employment was in response to anadvertisement of general circulation and such employee was not solicited by the hiring partydirectly or through a third party agent.**X. INDEMNITIES****10.1    Medtronic’s Indemnification.**Medtronic shall indemnify, defend and hold harmless VNUS andeach of its subsidiaries, officers, directors, employees, shareholders and distributors from andagainst and in respect of any and all assessments, losses, damages, liabilities, interest andpenalties, costs and expenses (including, without limitation, reasonable legal fees anddisbursements incurred in connection therewith and in seeking indemnification therefore, and anyamounts or expenses required to be paid or incurred in connection with any action, suit,proceeding, claim, appeal, demand, assessment or judgment) finally awarded (“**IndemnifiableLosses**”), resulting from, arising out of, or imposed upon or incurred by any person to beindemnified hereunder by reason of any third party demands, claims, suits, actions or causes ofaction against such person based upon: (i) any breach of representation, warranty, covenant oragreement by Medtronic under this Agreement, (ii) Product Liability Damages with respect to theProducts, or (iii) other negligence or intentional misconduct of Medtronic, provided that in noevent shall Medtronic be liable for matters for which VNUS is responsible under Section 10.2 belowor for punitive or exemplary damages. Medtronic shall maintain product liability insurance orself-insurance in such amounts as ordinary good business practice for its type of business wouldmake advisable and shall uponPage 13*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
request provide VNUS with evidence of this coverage. “ProductLiability Damages” means any liability, claim or expense, including but not limited to reasonableattorneys’ fees and medical expenses, arising in whole or in part out of claims of third partiesfor personal injury or loss of or damage to property relating to or arising out of the Products,whether based on strict liability in tort, negligent manufacture of product, or any otherallegation of liability arising directly from the design, testing, manufacture, packaging, labeling(including instructions for use), or sale of the Products.**10.2    VNUS’ Indemnification.**VNUS shall indemnify, defend and hold harmless Medtronic and each ofits subsidiaries, officers, directors, employees, shareholders and suppliers from and against andin respect of any and all Indemnifiable Losses resulting from, arising out of, or imposed upon orincurred by any person to be indemnified hereunder by reason of any third party demands, claims,suits, actions or causes of action against such person based upon: (i) any breach ofrepresentation, warranty, covenant or agreement by VNUS under this Agreement, (ii) product claimswhether written or oral, made or alleged to be made, by VNUS in its advertising, publicity,promotion, or sale of any Products where such product claims were not provided by or approved byMedtronic, (iii) negligent handling by VNUS of the Products or changes, additions or modificationsto the Products by VNUS, (iv) Product Liability Damages with respect to the Products to the extentthey are caused by the negligent or intentionally wrongful acts of VNUS, (v) Product LiabilityDamages caused by non-Medtronic products sold by VNUS, or (vi) other negligence or intentionalmisconduct of VNUS; provided that in no event shall VNUS be liable for matters for which Medtronicis responsible under Section 10.1 above or for punitive or exemplary damages. VNUS shall maintainliability insurance or self-insurance in such amounts as ordinary good business practice for itstype of business would make advisable and shall provide Medtronic with evidence of this coverage.**10.3    Procedure.**If a claim by a third party is made and a party (the “**Indemnitee**”) intends toclaim indemnification under this Article 10, the Indemnitee shall promptly notify the other party(the “Indemnitor”) in writing of any claim in respect of which the Indemnitee or any of itssubsidiaries, directors, officers, employees, shareholders, suppliers or distributors intends toclaim such indemnification and the Indemnitor shall have sole control of the defense and/orsettlement thereof, provided that the Indemnitee may participate in any such proceeding withcounsel of its choice at its own expense. The indemnity agreement in this Article 10 shall notapply to amounts paid in settlement of any Indemnifiable Losses if such settlement is effectedwithout the consent of the Indemnitor, which consent shall not be withheld unreasonably. Thefailure to deliver written notice to the Indemnitor within a reasonable time after the commencementof any such action, if adversely prejudicial to its ability to defend such action, shall relievesuch Indemnitor of any liability to the Indemnitee under this Article 10, but the omission to sodeliver written notice to the Indemnitor shall not relieve the Indemnitor of any liability that itmay otherwise have to any Indemnitee other than under this Article 10. If the Indemnitor fails toprovide defense of the claim, and diligently defend or settle the same, the Indemnitee may defendor settle the claim without prejudice to its rights to indemnification hereunder. The Indemniteeunder this Article 10, its employees and agents, shall cooperate fully with the Indemnitor and itslegal representatives and provide full information in the investigation of any Indemnifiable Lossescovered by this indemnification.**10.4    Patent.**Medtronic shall indemnify, defend and hold harmless VNUS from any cost, expense,liability or damage to the extent that it is based upon a claim that any Product purchased or soldby VNUS infringes a patent of the United States (or the manufacture or use of such Productinfringes such a patent); provided that VNUS shall promptly notify Medtronic of such claim, permitMedtronic to assume controlPage 14*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
of the defense of such claim, and fully cooperate in the defense ofsuch claim. If the use or sale of a Product is enjoined by order or settlement, then Medtronicshall have the option to (1) procure for VNUS the right to continue using or selling the Product,(2) replace the Product with a non-infringing Product or to modify the Product, (3) modify theProduct so it becomes non-infringing, or (4) accept return of the infringing Product and grant VNUSa credit for VNUS’ purchase price of such Product. The foregoing shall be the entire liability ofMedtronic for patent infringement by Products furnished hereunder.**THIS SECTION 10.4 STATES MEDTRONIC’S TOTAL RESPONSIBILITY AND LIABILITY, AND THE VNUS’ SOLE REMEDY, FOR ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY PATENT,TRADEMARK OR COPYRIGHT BY ANY PRODUCT DELIVERED HEREUNDER OR ANY PART THEREOF. THIS ARTICLE IS INLIEU OF AND REPLACES ANY OTHER EXPRESS, IMPLIED OR STATUTORY WARRANTY AGAINST INFRINGEMENT. IN NOEVENT SHALL MEDTRONIC BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGESRESULTING FROM ANY SUCH INFRINGEMENT.****10.5    ****LIMITATION OF LIABILITY**     **IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR COSTS OF PROCUREMENT OF SUBSTITUTEGOODS BY ANYONE. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSONFOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT OR INCIDENTAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OFLIABILITY ARISING OUT OF THIS AGREEMENT, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THEPOSSIBILITY OF SUCH DAMAGE. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIALPURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN. NOTWITHSTANDING THE FOREGOING PROVISIONS OF THISSECTION, THE LIMITATIONS OF LIABILITY SET FORTH IN THIS SECTION SHALL NOT APPLY TO (i) CLAIMSARISING UNDER ARTICLE 8 (INTELLECTUAL PROPERTY) OR (ii) THIRD PARTY CLAIMS FOR PERSONAL INJURY,DEATH OR PHYSICAL DAMAGE TO PROPERTY WHICH ARE SUBJECT TO THE INDEMNIFICATION PROVISIONS OF ARTICLE10.1 OR 10.2.****XI. CONFIDENTIAL INFORMATION****11.1    Definition.**A party’s “**Confidential Information**” is defined as any information of one party(the “**Disclosing Party**”) that is disclosed to the other party (the “**Receiving Party**”), includingwithout limitation, technical product data, business plans, product pricing, sales goals, marketinginformation and other information not generally available to the public. Notwithstanding anythingto the contrary in this Agreement, Confidential Information does not include information that (a)is already known by the Receiving Party at the time of disclosure by evidence of such ReceivingParty’s written records; (b) becomes, through no act or fault of the Receiving Party, publiclyknown; (c) is received by the Receiving Party without restriction on the Receiving Party’sdisclosure or use, from a third party which itself had no obligation to keep such informationconfidential; or (d) is independently developed by the Receiving Party without access or referenceto the Confidential Information of the Disclosing Party.**11.2    Restrictions.**Each party shall maintain in confidence any Confidential Information receivedPage 15*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
from the other party or, in the case of Medtronic, of any of its suppliers or purchasers during theTerm and shall not publish, disseminate, or disclose such Confidential Information except to theextent necessary to carry out its duties hereunder without the express written permission of theDisclosing Party. Each Receiving Party shall use at least the same degree of care to protect theConfidential Information of the Disclosing Party as it does to protect its own ConfidentialInformation and in all cases shall use commercially reasonable efforts to protect such information.This obligation of confidentiality shall expire five (5) years after the termination or expirationof this Agreement.**11.3    Exceptions.**A party may disclose Confidential Information of the other party to theextent required to be disclosed by a court or governmental agency pursuant to a statute,regulation, or valid order; provided, however, that the Receiving Party first notifies theDisclosing Party and gives the Disclosing Party the opportunity to seek a protective order, or tocontest such required disclosure.**11.3    Return of Confidential Information.**All Confidential Information shall be returned to theDisclosing Party at the request of the Disclosing Party upon the termination or expiration of thisAgreement.**XII. GENERAL PROVISIONS****12.1    Independent Contractor Relationship.**VNUS is and shall remain an independent contractor andis not and shall not be deemed to be an employee, joint venturer, partner, or franchisee ofMedtronic for any purpose. Accordingly, VNUS shall be exclusively responsible for the manner inwhich it performs its duties under this Agreement and for the profitability or lack thereof of itsactivities under this Agreement. All financial obligations associated with VNUS’ business are thesole responsibility of VNUS. VNUS does not have, and shall not represent itself as having, anyright or authority to obligate or bind Medtronic in any manner whatsoever.**12.2    Waivers.**Failure of either party at any time to require strict performance of the other partyof the provisions of this Agreement shall not act as a waiver of such provisions, nor shall thewaiver of a breach of the Agreement by either party constitute a waiver of such provision for anysubsequent breach.**12.3    Entire Agreement and Modifications.**This Agreement, together with its schedules, exhibits andaddendums, if any, contains the entire and only agreement between the parties with respect to thesale and purchase of Medtronic products. Any representations or terms and conditions notincorporated in this Agreement shall not be binding upon either party. No attempted modificationof this Agreement shall be binding upon either party unless in writing and signed in the samemanner as the original Agreement. If any provision of this Agreement is held to be invalid, itshall not affect the enforceability of the remaining provisions.**12.4    Assignment.**VNUS may not transfer, assign, nor delegate the rights or the duties of thisAgreement without the prior written consent of Medtronic. Notwithstanding the foregoing, eitherparty may assign its rights and obligations under this Agreement with the prior written consent ofthe non-assigning party, such consent not to be unreasonably withheld or delayed, to any person orentity with which such party is merged or by which it is acquired or which purchases all orsubstantially all of its assets or stock; provided, if the non-assigning party does not give itsconsent, this Agreement is automatically terminated at the time of the merger, acquisition, orsale, as applicable.Page 16*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
**12.5    Governing Law.**This Agreement and the relationship between the parties shall be governed bythe laws of the State of New York, without giving effect to its conflicts of law provisions.**12.6    Dispute Resolution.**All disputes and disagreements between the parties arising out of orrelating to any provision of this Agreement or the breach, termination, or validity thereof, shallbe resolved in accordance with the following provisions: a) For any dispute that cannot be resolved in the normal course of business, theparties shall attempt in good faith to resolve such dispute by negotiation betweensenior level executives who have authority to settle the controversy and who are ata higher level of management than the persons with direct responsibility foradministration of this Agreement. Any party may give the other party writtennotice that a dispute has not been resolved in the normal course of business.  b) Any dispute which has not been resolved within a reasonable time bynegotiation under subsection (a), above, shall be resolved through binding arbitrationin accordance with the Center for Public Resources Non-Administered Arbitration Rulesin effect on the date of this Agreement. Unless the parties agree otherwise, thearbitration shall be conducted by three independent and impartial arbitrators whoshall be appointed by CPR in accordance with CPR’s rules governing the arbitration.The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. 1-16.The place of arbitration shall be New York County, New York, USA and shall beconducted in the English language. The arbitrators are not empowered to make anyaward in excess of compensatory damages and each party hereby irrevocably waives anyright to recover such damages with respect to any dispute resolved by arbitration.Any judicial proceeding to enforce a decision of the arbitrators under this Agreementshall be instituted and conducted in U.S. District Court in New York County, New York,U.S.A.  c) The statute of limitations of the State of New York applicable to thecommencement of a lawsuit shall apply to the commencement of an arbitration hereunder.  d) All negotiations pursuant to this Section 12.6 are confidential and shall betreated as compromise and settlement negotiations for purposes of applicable rules ofevidence.**12.7    Force Majeure.**If the performance of any obligation of this Agreement except for the paymentof money is prevented, restricted, or interfered with by reason of strike, labor dispute, naturaldisaster, war, the acts of government or any other cause outside the reasonable control of theparties, then the party so affected shall give prompt notice to the other party and shall beexcused from such performance to the extent made necessary by such event.**12.8    Notices**. Any notice required or permitted by this Agreement shall be in writing and shall besent by prepaid registered or certified mail, return receipt requested, internationally recognizedcourier or personal delivery, or by fax with confirming letter mailed under the conditionsdescribed above in each case addressed to the other party at the address shown below or at suchother address for which such party give notice hereunder. Such notice shall be deemed to have beengiven when delivered:If to Medtronic:Page 17*****Certain confidential information contained in this document, marked with 4 asterisks, has beenomitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 ofthe Securities Exchange Act of 1934, as amended.*
 

 
Medtronic USA, Inc.