Exhibit
10.1


 


SETTLEMENT
AND LICENSE AGREEMENT


 


This Settlement and License Agreement (the “Agreement”) is made and
entered into effective as of March 26, 2010 (“Effective Date”) by and
among Medtronic, Inc., on its own behalf and on behalf of its respective
subsidiaries and Affiliates (as defined below) (collectively, “Medtronic”) and
AGA Medical Corporation, on its own behalf and on behalf of its subsidiaries
and Affiliates (as defined below) (collectively, “AGA”). Medtronic and AGA are
each individually a “Party” to this Agreement and are collectively referred to
in this Agreement as the “Parties.”


 


WHEREAS, Medtronic, Inc. and AGA Medical Corporation are parties
to a lawsuit in the United States District Court for the Northern District of
California entitled Medtronic, Inc. v. AGA Medical Corporation, Civil
Action No. C07 00567 MMC (the “Litigation”); and


 


WHEREAS, the Parties have reached a settlement of all claims,
counterclaims and causes of action set forth in the Litigation; and


 


WHEREAS, the Parties wish to set forth in this Agreement the terms and
conditions of their settlement;


 


NOW, THEREFORE, for and in consideration of the mutual promises,
licenses, covenants, and rights contained herein, the Parties agree as follows:


 


1.                                       DEFINITIONS


 


As used herein, the following definitions shall have the meaning set
forth below:


 


A.                                   “Affiliate”
shall mean any corporation, firm, partnership, joint venture or other entity
which, now or hereafter, directly or indirectly owns, is owned by or is under
common ownership of a Party. “Owned” for purposes of determining Affiliates
shall mean ownership or control of more than fifty percent (50%) (or any lesser
percentage which is the maximum allowed, by law, to be owned by a corporation
or other entity in a particular jurisdiction) of the equity or other ownership
interest having the power to vote on or direct the affairs of such corporation,
firm, partnership, joint venture or other entity. Affiliates shall include any
entity that first becomes an Affiliate after the date of this Agreement unless
specifically excluded. Any such entity ceases to be an Affiliate when it is no
longer owned by or under common ownership of a Party.


 

















 


B.                                     “Have Made”
shall mean to have Covered Products made under the license granted herein by a
third-party manufacturer solely for or on behalf of AGA, and solely for sale or
other distribution to health care providers by AGA either directly or through a
distributor, provided that AGA has developed or acquired the designs,
specifications, schematics, or the like for such Covered Product. In no event
shall a Have Made right constitute a sub-license. For the avoidance of doubt, in
no event shall “Have Made” mean having Covered Products made in such a way as
to manufacture any product for or on behalf of any company other than AGA on an
original equipment manufacturer basis.


 


C.                                   “License Term” shall mean
through the legal expiration date of the last to expire of the Licensed
Patents, but in no event earlier than October 23, 2018.


 


D.                                  “Licensed Patents” shall
mean the following: United States Patent Nos. 5,067,957; 5,190,546; 6,306,141;
their foreign counterparts; and any related patent and/or patent application
claiming priority, directly or indirectly, in whole or in part, from any of
them or sharing priority with any of them, including any application claiming priority
from United States Application No. 06/541,852.


 


E.                                    “Covered Product” or
“Covered Products” shall mean that AGA has a license to use the Licensed
Patents for all current and existing AGA products, any modifications or improvements
to any of the existing products, and any products that in the future AGA may
choose to develop and commercialize that contain nitinol.


 


2.                                      LICENSE GRANT


 


Medtronic hereby grants to AGA a worldwide, irrevocable, non-exclusive,
non-sublicensable (except to customers or end users of Covered Products made or
sold by or on behalf of AGA) and non-assignable license to the Licensed Patents
to make, Have-Made, sell, offer to sell, use, and import Covered Products
during the License Term. It is the intent of the Parties that the license
granted herein does not include the right to sell Covered Products where a
third-party private label is predominant.


 


3.                                      PAYMENT


 


To the extent that within the thirty (30) days preceding any of the
Payment Dates listed in this paragraph, AGA has made, used or sold or is
making, using or selling any Covered Product, AGA shall pay to Medtronic, by
wire transfer to an account


 


2

















 


directed by Medtronic (the current account being specified in Exhibit A
to this Agreement), the following sums on the following Payment Dates:


 


A)      Seven and a Half Million Dollars ($7,500,000) on April 15,
2010;


 


B)        Seven and a Half Million Dollars ($7,500,000) on the
first business day of January, 2012;


 


C)        Ten Million Dollars ($10,000,000) on the first
business day of January, 2013; and


 


D)       Ten Million Dollars (10,000,000) on the first
business day of January, 2014.


 


4.                                       NO CHALLENGE TO
PATENTS


 


AGA hereby covenants that it shall not directly challenge, or indirectly
challenge or otherwise voluntarily assist a third party in any way to
challenge, the validity or enforceability of any of the Licensed Patents, or
take any other action against the Licensed Patents, in a court, government
agency, or other venue or in any other manner. It is agreed and acknowledged
that AGA’s mandatory response to any judicial process, including, for example,
subpoenas, does not constitute a “challenge” or voluntary third party
assistance hereunder.


 


5.                                      RELEASE


 


For good and valuable consideration, Medtronic
hereby releases, exonerates and forever and unconditionally discharges AGA and
its officers, directors, employees, representatives, shareholders, successors,
assigns, agents, and each past, present, direct or indirect parent, subsidiary,
division or affiliated entity from any and all claims and causes of action,
arising directly or indirectly out of the facts, transactions, and/or
occurrences which are the subject of the Litigation, including but not limited
to the claims asserted in the Litigation and any claims that reasonably could
have been asserted in the Litigation with respect to the Covered Products. This
Release shall not be effective until Medtronic receives the first payment from
AGA as set forth in Section 3, above.


 


3

















 


For good and valuable consideration, AGA hereby releases, exonerates
and forever and unconditionally discharges Medtronic and its officers,
directors, employees, representatives, shareholders, successors, assigns,
agents, and each past, present, direct or indirect parent, subsidiary, division
or affiliated entity from any and all claims and causes of action, arising
directly or indirectly out of the facts, transactions, and occurrences which
are the subject of the Litigation, including but not limited to the
counterclaims asserted in the Litigation and any claims that reasonably could
have been asserted in the Litigation with respect to the patents at issue in
the Litigation.


 


6.                                       DISMISSAL OF
THE LITIGATION


 


Within three (3) business days of the execution of this Agreement
by all Parties, the Parties shall cause their attorneys to file in the
Litigation a Stipulation for Dismissal With Prejudice and Proposed Order in the
forms attached hereto as Exhibits B and C, which shall include a statement to
the effect that each party to the action shall bear its own costs and fees,
including attorneys’ fees. Notwithstanding the dismissal of the Litigation, the
obligations of the Parties under the Stipulated Protective Order entered by the
Court on or about August 30, 2007, shall remain in full force and effect
and shall continue to be complied with by the Parties in accordance with the
terms of the Protective Order.


 


7.                                       REPRESENTATION AND
WARRANTIES


 


The Parties represent and warrant to each other that they have the full
power and authority to enter into this Agreement and to make the promises and
undertakings set forth herein. The Parties further represent and warrant to
each other that they have not sold, assigned, transferred, conveyed, or
otherwise disposed of any of the claims or causes of action in the Litigation
or any of the rights that are the subject of conveyance under this Agreement.
Medtronic further represents and warrants to AGA that Medtronic is the sole
owner of the Licensed Patents relative to the Covered Products in the fields of
structural heart and vascular use unencumbered by any right, claim or


 


4

















 


interest
of any other person or entity. Medtronic further represents and warrants that
the transfer or conveyance of any future right, title or interest in the
Licensed Patents shall be conditioned upon the recipient’s contractual
agreement to the terms of this Agreement.


 


8.                                      CONFIDENTIALITY


 


Except to the extent reasonably necessary to satisfy corporate,
financial or regulatory disclosure requirements (including but not limited to
disclosure pursuant to applicable securities or to the Internal Revenue
Service), or as otherwise required by law or judicial process, the Parties
agree that the terms of this Agreement shall remain confidential and shall not
be disclosed to any third party. If any party is served with judicial process
that it determines requires disclosure of this Agreement or any of its terms,
it shall notify the other Party within five (5) business days of the
receipt of such judicial notice and shall consult in good faith with the other
Party regarding the necessity for any such disclosure, the terms of any such disclosure,
and whether measures should be taken to oppose or restrict access to the
Agreement or its terms. The Parties shall cooperate in drafting the language of
a press release that publicly announces that the Parties have reached an
agreement to resolve the Litigation, that the Litigation has been dismissed,
the payments to be made by AGA, and that AGA has taken a license under and has
received freedom to operate relative to certain of Medtronic’s patents.


 


9.                                      ENTIRE
AGREEMENT


 


This Agreement (which includes any exhibits attached hereto) contains
the entire agreement and understanding between the Parties concerning the
subject of this Agreement and supersedes all previous negotiations, discussions
and agreements. This Agreement shall not be modified, amended, or otherwise
changed except by a writing executed by the Parties.


 


5

















 


10.                                 GOVERNING LAW


 


This Agreement, and the performance hereunder, shall be governed by the
laws of the State of Minnesota and any claims arising out of this Agreement
shall be venued and subject to the exclusive jurisdiction of a state or federal
court of the State of Minnesota.


 


11.                                 COUNTERPARTS


 


This Agreement may be executed in counterparts (each of which shall be
deemed an original), and receipt by facsimile or other electronic transmission
of executed copies shall be legally binding.


 


12.                                 SEVERABILITY/INTERPRETATION


 


Excepting the license, releases and payments set forth above, in the
event that any provision of this Agreement is found to be prohibited by law or
otherwise invalid, or if for any reason a provision of this Agreement is held
to be unenforceable, in whole or in part, it shall be considered severable and
shall be ineffective only to the extent of such prohibition, invalidity or
unenforceability without invalidating or having any other adverse effect upon
any other provision of this Agreement. Each Party was represented by counsel in
the negotiation and preparation of this Agreement, and in no event shall any
provision hereof be interpreted against either Party as the drafter hereof.


 


13.                                 NOTICES


 


Any notice or other written statement permitted or required by this
Agreement shall be in writing and shall be sent by certified mail (return
receipt requested), overnight courier, or hand delivery at the respective
addresses set forth below, or such other addresses as the respective Parties
may from time to time designate:


 


6

















 


To MEDTRONIC:


 


Medtronic, Inc.


Corporate Center


710 Medtronic Parkway


Minneapolis, Minnesota 55432


Attention:     General Counsel


 


To AGA:


 


AGA Medical Corporation 


5050 Nathan Lane North 


Plymouth, MN 55442 


Attention:     General Counsel


 


14.                                 CAPTIONS


 


Captions and paragraph headings in this Agreement are intended only as
a matter of convenience and for reference, and are not intended to define,
limit or otherwise change in any way the scope of this Agreement or the intent
of any provision herein.


 


[The
reminder of this page left intentionally blank; signature page follows.]


 


7

















 


IN WITNESS WHEREOF, the Parties have executed this Agreement on the
date(s) set forth below.


 


 


MEDTRONIC, INC.


 


 


	
  Dated:

  	
  March
  26, 2010

  	
   

  
	
  By

  	
  Andrew
  W. Horstman

  	
   

  
	
  Its

  	
  VP-IP
  Litigation

  	
   

  



 


 


AGA
MEDICAL CORPORATION


 


 


	
  Dated:

  	
  March
  26, 2010

  	
   

  
	
  By

  	
  John
  R. Barr

  	
   

  
	
  Its

  	
  President
  & CEO

  	
   

  



 


8






 












 


Exhibit A


 


Wire Transfer Instructions – Medtronic / AGA
Settlement Agreement


 


9

















 


Exhibit B



 


Insert
Stipulation for Dismissal With Prejudice


 


10

















 


	
  James
  J. Elacqua (CSB No. 187897)

  	
  Steven
  D. Hemminger (CSB No. 110665)

  
	
  james.elacqua@skadden.com

  	
  steve.hemminger@alston.com

  
	
  Andrew
  N. Thomases (CSB No. 177339)

  	
  ALSTON &
  BIRD LLP

  
	
  andrew.thomases@skadden.com

  	
  Two
  Palo Alto Square

  
	
  SKADDEN,
  ARPS, SLATE, MEAGHER

  	
  3000
  El Camino Real, Suite 400

  
	
  & FLOM LLP

  	
  Palo
  Alto, California 94306-2112

  
	
  525
  University Avenue, Suite 1100

  	
  Telephone:

  	
  (650)
  838-2000

  
	
  Palo
  Alto, California 94301

  	
  Facsimile:

  	
  (650)
  838-2001

  
	
  Telephone:

  	
  (650)
  470-4500

  	
   

  
	
  Facsimile:

  	
  (650) 470-4550

  	
  Michael S. Connor (Pro Hac Vice)

  
	
   

  	
  mike.connor@alston.com

  
	
  Noemi
  C. Espinosa (CSB No. 116753)

  	
  Lance
  A. Lawson (Pro Hac Vice)

  
	
  nicky.espinosa@dechert.com

  	
  lance.lawson@alston.com

  
	
  Michelle
  W. Yang (CSB No. 215199)

  	
  Miranda
  M. Sooter (Pro Hac Vice)

  
	
  michelle.yang@dechert.com

  	
  miranda.sooter@alston.com

  
	
  Hieu
  H. Phan (CSB No. 218216)

  	
  Jessica
  J. Sibley (Pro Hac Vice)

  
	
  hieu.phan@dechert.com

  	
  jessica.sibley@alston.com

  
	
  Joshua
  C. Walsh-Benson (CSB No. 228983)

  	
  ALSTON &
  BIRD LLP

  
	
  joshua.walsh-benson@dechert.com

  	
  101
  South Tryon Street, Suite 4000

  
	
  DECHERT
  LLP

  	
  Charlotte,
  North Carolina 28280-4000

  
	
  2440
  W. El Camino Real, Suite 700

  	
  Telephone:

  	
  (704)
  444-1000

  
	
  Mountain
  View, California 94040-1499

  	
  Facsimile:

  	
  (704)
  444-1111

  
	
  Telephone:

  	
  (650)
  813-4800

  	
   

  
	
  Facsimile:

  	
  (650)
  813-4848

  	
   

  
	
   

  	
   

  
	
  Attorneys
  for Plaintiff

  	
  Attorneys
  for Defendant

  
	
  MEDTRONIC,
  INC.

  	
  AGA
  MEDICAL CORPORATION

  



 


UNITED STATES DISTRICT COURT


 


NORTHERN DISTRICT OF CALIFORNIA


 


SAN FRANCISCO DIVISION


 


	
  MEDTRONIC,
  INC., a Minnesota corporation,

  	
  Case
  No. C07-00567 MMC

  
	
   

  	
   

  
	
   

  	
  Plaintiff,

  	
  STIPULATION FOR DISMISSAL WITH PREJUDICE

  
	
   

  	
   

  
	
  v.

  	
   

  
	
   

  	
   

  
	
  AGA MEDICAL CORPORATION, a
  Minnesota corporation,

  	
   

  
	
   

  	
   

  
	
   

  	
  Defendant.

  	
   

  
	
   

  	
   

  
	
   

  	
  STIPULATION FOR DISMISSAL WITH 

  PREJUDICE / CASE NO. C07-00567 MMC

  



 

















 


The parties having reached a settlement in this matter,


 


THE PARTIES NOW HEREBY STIPULATE to the dismissal of this action, such
dismissal to be with prejudice and with each party to bear its own costs,
expenses and attorneys’ fees incurred in this litigation.


 


	
  Dated:
  March     , 2010

  	
  SKADDEN,
  ARPS, SLATE, MEAGHER & FLOM LLP

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  James
  J. Elacqua

  
	
   

  	
   

  	
  Andrew
  N. Thomases

  
	
   

  	
   

  	
  SKADDEN,
  ARPS, SLATE, MEAGHER &

  
	
   

  	
   

  	
  FLOM
  LLP

  
	
   

  	
   

  	
  525
  University Avenue, Suite 1100

  
	
   

  	
   

  	
  Palo
  Alto, CA 94301

  
	
   

  	
   

  	
  Telephone:
  (650) 470-4500

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Noemi
  C. Espinosa

  
	
   

  	
   

  	
  Michelle
  W. Yang

  
	
   

  	
   

  	
  Hieu
  H. Phan

  
	
   

  	
   

  	
  Joshua
  C. Walsh-Benson

  
	
   

  	
   

  	
  DECHERT
  LLP

  
	
   

  	
   

  	
  2440
  W. El Camino Real, Suite 700

  
	
   

  	
   

  	
  Mountain
  View, CA 94040-1499

  
	
   

  	
   

  	
  Telephone:
  (650) 813-4800

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attorneys
  for Plaintiff 

  
	
   

  	
   

  	
  MEDTRONIC,
  INC.

  
	
   

  	
   

  
	
  Dated:
  March    , 2010

  	
  ALSTON &
  BIRD LLP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Steven
  D. Hemminger 

  
	
   

  	
   

  	
  ALSTON &
  BIRD LLP 

  
	
   

  	
   

  	
  Two
  Palo Alto Square 

  
	
   

  	
   

  	
  3000
  El Camino Real, Suite 400 

  
	
   

  	
   

  	
  Palo
  Alto, CA 94306-2112 

  
	
   

  	
   

  	
  Telephone:
  (650) 838-2000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Michael
  S. Connor

  
	
   

  	
   

  	
  Lance
  A. Lawson

  
	
   

  	
   

  	
  Miranda
  M. Sooter

  
	
   

  	
   

  	
  Jessica
  J. Sibley

  
	
   

  	
   

  	
  ALSTON &
  BIRD LLP

  
	
   

  	
   

  	
  101
  South Tryon Street, Suite 4000

  
	
   

  	
   

  	
  Charlotte,
  North Carolina 28280-4000

  
	
   

  	
   

  	
  Telephone:
  (704) 444-1000

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attorneys
  for Defendant

  
	
   

  	
   

  	
  AGA
  MEDICAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  STIPULATION FOR DISMISSAL WITH 

  PREJUDICE / CASE NO. C07-00567 MMC

  



 


2

















 


Exhibit C



 


Insert
Proposed Order for Dismissal With Prejudice


 


11

















 


	
  James
  J. Elacqua (CSB No. 187897)

  	
  Steven
  D. Hemminger (CSB No. 110665)

  
	
  james.elacqua@skadden.com

  	
  steve.hemminger@alston.com

  
	
  Andrew
  N. Thomases (CSB No. 177339)

  	
  ALSTON &
  BIRD LLP

  
	
  andrew.thomases@skadden.com

  	
  Two
  Palo Alto Square

  
	
  SKADDEN,
  ARPS, SLATE, MEAGHER

  	
  3000
  El Camino Real, Suite 400

  
	
  & FLOM LLP

  	
  Palo
  Alto, California 94306-2112

  
	
  525
  University Avenue, Suite 1100

  	
  Telephone:

  	
  (650)
  838-2000

  
	
  Palo
  Alto, California 94301

  	
  Facsimile:

  	
  (650)
  838-2001

  
	
  Telephone:

  	
  (650)
  470-4500

  	
   

  
	
  Facsimile:

  	
  (650)
  470-4550

  	
  Michael
  S. Connor (Pro Hac Vice)

  
	
   

  	
  mike.connor@alston.com

  
	
  Noemi
  C. Espinosa (CSB No. 116753)

  	
  Lance
  A. Lawson (Pro Hac Vice)

  
	
  nicky.espinosa@dechert.com

  	
  lance.lawson@alston.com

  
	
  Michelle
  W. Yang (CSB No. 215199)

  	
  Miranda
  M. Sooter (Pro Hac Vice)

  
	
  michelle.yang@dechert.com

  	
  miranda.sooter@alston.com

  
	
  Hieu
  H. Phan (CSB No. 218216)

  	
  Jessica
  J. Sibley (Pro Hac Vice)

  
	
  hieu.phan@dechert.com

  	
  jessica.sibley@alston.com

  
	
  Joshua
  C. Walsh-Benson (CSB No. 228983)

  	
  ALSTON &
  BIRD LLP

  
	
  joshua.walsh-benson@dechert.com

  	
  101
  South Tryon Street, Suite 4000

  
	
  DECHERT
  LLP

  	
  Charlotte,
  North Carolina 28280-4000

  
	
  2440
  W. El Camino Real, Suite 700

  	
  Telephone:

  	
  (704)
  444-1000

  
	
  Mountain
  View, California 94040-1499

  	
  Facsimile:

  	
  (704)
  444-1111

  
	
  Telephone:

  	
  (650)
  813-4800

  	
   

  
	
  Facsimile:

  	
  (650)
  813-4848

  	
   

  
	
   

  	
   

  
	
  Attorneys
  for Plaintiff

  	
  Attorneys
  for Defendant

  
	
  MEDTRONIC,
  INC.

  	
  AGA
  MEDICAL CORPORATION

  



 


UNITED STATES DISTRICT COURT


 


NORTHERN DISTRICT OF CALIFORNIA


 


SAN FRANCISCO DIVISION


 


	
  MEDTRONIC,
  INC., a Minnesota corporation,

  	
  Case
  No. C07-00567 MMC

  
	
   

  	
   

  
	
   

  	
  Plaintiff,

  	
  [PROPOSED] ORDER FOR DISMISSAL WITH PREJUDICE

  
	
   

  	
   

  
	
  v.

  	
   

  
	
   

  	
   

  
	
  AGA
  MEDICAL CORPORATION, a Minnesota corporation,

  	
   

  
	
   

  	
   

  
	
   

  	
  Defendant.

  	
   

  
	
   

  	
   

  
	
   

  	
  [PROPOSED] ORDER FOR DISMISSAL WITH 

  
	
   

  	
  PREJUDICE / CASE NO. C07-00567 MMC

  



 

















 


ORDER 


 


IT IS HEREBY ORDERED that this action is dismissed with prejudice, with
each party to bear its own costs, expenses and attorneys’ fees incurred in this
litigation.


 


	
  Dated:
  March    , 2010

  	
   

  
	
   

  	
  HONORABLE
  MAXINE M. CHESNEY 

  UNITED
  STATES DISTRICT JUDGE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [PROPOSED] ORDER FOR DISMISSAL WITH 

  PREJUDICE / CASE NO. C07-00567 MMC

  



 


2