Settlement Agreement


    Exhibit
      10.1

    SETTLEMENT
      AGREEMENT

    


    This
      Settlement Agreement (the “Settlement Agreement”) is entered into effective as
      of November 14, 2005, by and between GUIDANT CORPORATION (“Guidant”), on
      the one hand, and JOHNSON & JOHNSON (“J&J”), on the other hand, both of
      which are sometimes collectively referred to as the “Parties” with reference to
      the following:

     

    


    
      	
              1.

            	
              RECITALS:

            


    

     

    
      	 	
              a.

            	
              Guidant
                and J&J are Parties to the AGREEMENT AND PLAN OF MERGER, dated as of
                December 15, 2004 (the “Merger Agreement”), and are entering into an
                AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of the
                date
                hereof (the “Amended Agreement”), concurrently with the execution and
                delivery of this Settlement
                Agreement.

            


    

     

    
      	 	
              b.

            	
              Guidant
                is the plaintiff and J&J is the defendant in the following litigation
                (the “Litigation”): GUIDANT CORPORATION, Plaintiff, -against- JOHNSON
                & JOHNSON, Defendant, 05 Civ. 9404 (RWS)
                (AJP).

            


    

     

    
      	 	
              c.

            	
              Each
                of the Parties desires to permanently settle and resolve any and
                all
                claims, disputes, issues or matters that exist between them relating
                to
                the matters contemplated by the Merger Agreement or raised by the
                Litigation as of the date of this Settlement Agreement and to dismiss
                the
                Litigation with prejudice.

            


    

     

    
      	 	
              d.

            	
              NOW,
                THEREFORE, in consideration of the mutual promises, covenants and
                agreements set forth herein, and subject to the terms and conditions
                set
                forth below, the Parties desire to, and hereby do, resolve their
                differences and agree as follows:

            


    

     

    
      	
              2.

            	
              AGREEMENTS:

            


    

     

    
      	 	
              a.

            	
              Dismissal
                With Prejudice.
                Immediately following the execution of the Amended Agreement the
                Parties
                shall execute and file with the Court a Stipulation of Dismissal
                With
                Prejudice of the Litigation, in the form annexed hereto as Exhibit
                A.

            


    

     

    
      	 	
              b.

            	
              Guidant
                Release.
                Guidant,
                for itself, its predecessors, successors, assigns, affiliates, parents,
                partners, subsidiaries, divisions and transferees (collectively,
                the
                “Guidant Releasors”), releases, remises and forever discharges J&J and
                each of its predecessors, successors, assigns, affiliates, parents,
                partners, subsidiaries, divisions, transferees, past and present
                officers,
                directors, agents, representatives, attorneys and
                employees

            


    

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      	 	 	
              (collectively,
                the “J&J Releasees”), from any and all claims, demands, rights of
                action, causes of action, lawsuits, damages, indebtedness, liabilities,
                obligations, losses or expenses of any nature whatsoever and remedies
                therefor, duty or relationship, acts, omissions, misfeasance, malfeasance,
                sums of money, accounts, compensation, contracts, controversies,
                promises,
                rights of indemnity, contribution or liability of any type, kind,
                nature,
                description or character whatsoever, and irrespective of how, why
                or by
                reason of what facts, whether known or unknown, suspected or unsuspected,
                whether heretofore or now existing or hereafter arising, which could,
                might or may be claimed to exist prior to the date hereof, whether
                liquidated or unliquidated, whether existing in law or equity and
                whether
                foreseen or unforeseen, which the Guidant Releasors have or have
                had, or
                may hereafter claim to have had prior to the Parties’ execution of the
                Amended Agreement against any J&J Releasees arising under the Merger
                Agreement, including pursuant to or as contemplated by the Litigation.
                Notwithstanding anything to the contrary herein, this Settlement
                Agreement
                and the mutual releases set forth herein, shall not: (i) release
                the
                J&J Releasees from their obligations under the Amended Agreement; or
                (ii) affect the rights of the Guidant Releasors to bring claims under
                or
                relating to the Amended Agreement, including bringing claims to enforce
                their rights under the Amended
                Agreement.

            


    

     

    
      	 	
              c.

            	
              J&J
                Release.
                J&J, for itself, its predecessors, successors, assigns, affiliates,
                parents, partners, subsidiaries, divisions and transferees (collectively,
                the “J&J Releasors”), releases, remises and forever discharges Guidant
                and each of its predecessors, successors, assigns, affiliates, parents,
                partners, subsidiaries, divisions, transferees, past and present
                officers,
                directors, agents, representatives, attorneys and employees (collectively,
                the “Guidant Releasees”), from any and all claims, demands, rights of
                action, causes of action, lawsuits, damages, indebtedness, liabilities,
                obligations, losses or expenses of any nature whatsoever and remedies
                therefor, duty or relationship, acts, omissions, misfeasance, malfeasance,
                sums of money, accounts, compensation, contracts, controversies,
                promises,
                rights of indemnity, contribution or liability of any type, kind,
                nature,
                description or character whatsoever, and irrespective of how, why
                or by
                reason of what facts, whether known or unknown, suspected or unsuspected,
                whether heretofore or now existing or hereafter arising, which could,
                might or may be claimed to exist prior to the date hereof, whether
                liquidated or unliquidated, whether existing in law or equity and
                whether
                foreseen or unforeseen, which the J&J Releasors have or have had, or
                may hereafter claim to have had prior to the Parties’ execution of the
                Amended Agreement against any Guidant Releasees arising under the
                Merger
                Agreement, including pursuant to or as contemplated by the Litigation.
                Notwithstanding anything to the contrary herein, this Settlement
                Agreement
                and the mutual releases set forth herein, shall not: (i) release
                the
                Guidant Releasees from their obligations
                under

            


    

     


    
      
         

      

      
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              the
                Amended Agreement; or (ii) affect the rights of the J&J Releasors to
                bring claims under or relating to the Amended Agreement, including
                bringing claims to enforce their rights under the Amended
                Agreement.

            


    

     

    
      	
              3.

            	
              NOTICES:

            


    

     

    
      	 	
              a.

            	
              Any
                notice, demand, request, consent, approval or communication that
                either
                Party desires or is required to give to the other Party shall be
                delivered
                in accordance with Section 8.02 of the Amended
                Agreement.

            


    

     

    
      	
              4.

            	
              MISCELLANEOUS
                PROVISIONS:

            


    

     

    
      	 	
              a.

            	
              In
                order to carry out the terms and conditions of this Settlement Agreement,
                the Parties agree to promptly execute upon reasonable request any
                and all
                documents and instruments consistent herewith necessary to effectuate
                the
                terms of this Settlement Agreement.

            


    

     

    
      	 	
              b.

            	
              By
                entering into this Settlement Agreement, no Party admits or acknowledges
                that they committed any wrongdoing
                whatsoever.

            


    

     

    
      	 	
              c.

            	
              This
                Settlement Agreement shall be governed and construed in accordance
                with
                the laws of the State of New York applicable to agreements made and
                to be
                performed entirely within such State. The United States District
                Court for
                the Southern District of New York will have exclusive jurisdiction
                over
                any controversies regarding this Settlement Agreement; any action
                or other
                proceeding which involves such a controversy will be brought in those
                courts and not elsewhere. Nothing in this Settlement Agreement is
                intended
                to confer on any person not a party hereto any rights or remedies
                under
                this Settlement Agreement.

            


    

     

    
      	 	
              d.

            	
              This
                Settlement Agreement and the Amended Agreement (including the Exhibits
                and
                Schedules thereto) are the entire agreement between the Parties with
                respect to the claims or subject matter of this Settlement Agreement
                and
                supersedes all prior and contemporaneous oral and written agreements
                and
                discussions pertaining to the claims or subject matter of this Settlement
                Agreement. This Settlement Agreement may be amended only by a written
                agreement executed by each of the Parties
                hereto.

            


    

     

    
      	 	
              e.

            	
              No
                breach of any provision hereof can be waived unless in writing. Waiver
                of
                any one breach of any provision hereof shall not be deemed to be
                a waiver
                of any other breach of the same or any other provision
                hereof.

            


    

     

    
      	 	
              f.

            	
              This
                Settlement Agreement shall be binding upon and inure to the benefit
                of the
                Parties hereto and each of their respective predecessors, successors,
                assigns, affiliates, parents, partners, subsidiaries, divisions,
                transferees, past and present officers, directors, agents,
                representatives, attorneys and
                employees.

            


    

     


    
      
         

      

      
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              g.

            	
              In
                the event that any covenant, condition or other provision herein
                contained
                is held to be invalid, void or illegal by any court of competent
                jurisdiction, the same shall be deemed severable from the remainder
                of
                this Settlement Agreement and shall in no way affect, impair or invalidate
                any other covenant, condition or other provisions herein contained.
                If
                such condition, covenant or other provisions shall be deemed invalid
                due
                to its scope or breadth, such covenant, condition or other provision
                shall
                be deemed valid to the extent of the scope or breadth permitted by
                law.

            


    

     

    
      	 	
              h.

            	
              The
                Parties hereto, and each of them, represent and declare that in executing
                this Settlement Agreement, they rely solely upon their own judgment,
                belief and knowledge, and on the advice and recommendations of their
                own
                independently selected counsel, concerning the nature, extent and
                duration
                of their rights and claims and that they have not been influenced
                to any
                extent whatsoever in executing the same by any representations or
                statements covering any matters made by any of the Parties hereto
                or by
                any person representing them or any of them. The Parties acknowledge
                that
                no Party hereto nor any of their representatives have made any promise,
                representation or warranty whatsoever, written or oral, as any inducement
                to enter into this Settlement Agreement, except as expressly set
                forth in
                this Settlement Agreement and the Amended
                Agreement.

            


    

     

    
      	 	
              i.

            	
              The
                Parties hereto, and each of them, further represent and warrant that
                they
                have carefully read this Settlement Agreement and know and understand
                the
                contents hereof, and that they signed this Settlement Agreement freely
                and
                voluntarily. Each of the representatives executing this Settlement
                Agreement on behalf of their respective corporations is empowered
                to do so
                and thereby binds his respective corporation. The Parties hereto
                acknowledge and agree that this Settlement Agreement shall be deemed
                to
                have been drafted jointly by all Parties
                hereto.

            


    

     

    
      	 	
              j.

            	
              This
                Settlement Agreement may be executed in counterparts and when each
                Party
                has signed and delivered at least one such counterpart to the other
                Party,
                each counterpart shall be deemed an original, and all counterparts
                taken
                together shall constitute one and the same agreement, which shall
                be
                binding and effective as to all Parties. This Settlement Agreement
                may be
                executed via facsimile signatures, which shall have the same force
                and
                effect as if they were original signatures to be followed by executed
                originals

            


    

     


    
      
         

      

      
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    IN
      WITNESS WHEREOF, the Parties hereto have executed this Settlement Agreement
      on
      the date(s) written beside its name, respectively.

     

    


    


    
      	
              GUIDANT
                CORPORATION

            	 
	 	 
	
              Dated:
                November
                14, 2005

            	
              By:
                /s/
                Ronald W. Dollens

            
	 	
              Title:
                President
                and Chief Executive Officer

            


    

    


    


    
      	
              JOHNSON
                & JOHNSON

            	 
	 	 
	
              Dated:
                November
                14, 2005

            	
              By:
                /s/
                Robert J. Darretta

            
	 	
              Title:
                Vice
                Chairman and Chief Financial
                Officer

            


    

    


    


     

     

    
      
         

      

      
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    EXHIBIT
      A

    


    
      	
              UNITED
                STATES DISTRICT COURT

              SOUTHERN
                DISTRICT OF NEW YORK

               

            	 
	
               

               

              GUIDANT
                CORPORATION,

               

              Plaintiff,

               

              -against-

               

              JOHNSON
                & JOHNSON,

               

              Defendant.

            	
              05
                Civ. 9404 (RJS)

               

              STIPULATION
                OF 

              DISMISSAL
                WITH

              PREJUDICE

               

            


    

    


    


    IT
      IS
      HEREBY STIPULATED AND AGREED by and between the undersigned attorneys of record
      for the parties to the above-captioned action, pursuant to Fed. R. Civ. P.
      41(a)(1)(ii), that the complaint in the above-captioned action be dismissed
      with
      prejudice and without costs to any party as against the other. This stipulation
      may be filed without further notice.


    
      
         

      

      
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    November
      15, 2005

    


    
      	
              SKADDEN,
                ARPS, SLATE, MEAGHER & FLOM LLP

            
	 
	 	
              by

            
	 	 	
              /s/
                CYRUS AMIR-MOKRI

            
	 	 	
              John
                L. Gardiner (JG-8715)

              Cyrus
                Amir-Mokri (CA-6865)

            
	 	 	 
	 	 	
              Four
                Times Square

              New
                York, NY 10036

              (212)
                735-3000

            
	 	 	 Attorneys
              for
              Plaintiff


    

    


     

    


    


    
      	
              CRAVATH,
                SWAINE & MOORE LLP

            
	 
	 	
              by

            
	 	
              /s/
                MICHAEL T. REYNOLDS

            
	 	
              Robert
                D. Joffe (RJ-6825)

              Rowan
                D. Wilson (RW-8556)

              Michael
                T. Reynolds (MR-0701)

            
	 	 
	 	
              Worldwide
                Plaza

              825
                Eighth Avenue

              New
                York, NY 10019

              (212)
                474-1000

            
	 	
              Attorneys
                for Defendant

            


    

     

    
 

    
      
         

      

      
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