Document:

exv10w28

 

     Exhibit 10.28

CONFIDENTIAL

DISTRIBUTION AGREEMENT

This Distribution Agreement (“Agreement”) is made as of this 31st day of July, 2007, by and
between: MICRUS ENDOVASCULAR Corporation, a corporation organized under the laws of Delaware,
having its principal place of business at 821 Fox Lane, San Jose, California (“Micrus”) and BEIJING
TIANXINFU MEDICAL APPLIANCE Co. LTD. company organized under the laws of the People’s Republic of
China with business license number 1102211352495, and having a principal place of business at 3
Floor of the Main Building N. 15, Zuojiazhuang, Chaoyang District, Beijing China
(“Distributor”).

          WHEREAS, Micrus has developed and/or commercialized Products (as hereinafter defined) to be
used in the Field (as hereinafter defined), and may develop other products for use in the Field;
and

          WHEREAS, Distributor has substantial experience in marketing medical products and desires to
distribute the Product, as hereinafter defined, in the territory of the country of The People’s
Republic of China; and

          WHEREAS, Micrus is willing to use Distributor as its exclusive distributor of the Product for
use in the Field, in the territory of The People’s Republic of China, subject to the terms and
conditions of this Agreement.

ARTICLE 1 — DEFINITIONS

          As used in this Agreement, the following terms, whether used in the singular or plural, shall have the meanings indicated:

          1.1 “Effective Date” shall mean the date of this Agreement first written above.

          1.2 “Field” shall mean the field of interventional neuroradiology, or such field(s) as
to which the parties may agree in writing.

          1.3 “Marketing Authorizations” shall mean all authorizations, licenses, approvals, and
registrations to import, market and distribute the Products in the Territory pursuant to the terms
of this Agreement, as may be required by an appropriate governmental agency in the Territory.

          1.4 “Product(s)” shall mean (a) Micrus’ current implantable, three-dimensional
microcoil products, together with a resistive heat-activated delivery device, developed,
manufactured, or made available to Distributor by Micrus, and (b) any other Micrus product which is
listed on Exhibit A hereto (either at the Effective Date or thereafter by mutual agreement
of the parties); both of the foregoing (a) and (b) solely as used in the Field and as delivered to
Distributor from time to time by Micrus under this Agreement.

          1.5 “Territory” shall mean the geographic territory(ies) of The People’s Republic of China.

ARTICLE 2  — APPOINTMENT OF DISTRIBUTOR

          2.1 Appointment of Distributor. Subject to the terms and conditions of this Agreement
(including, without limitation, Article 6), Micrus hereby appoints Distributor as Micrus’ exclusive
distributor of the Products within the Territory. Distributor agrees that it shall not sell,
advertise, distribute or otherwise transfer or assist in the transfer of any product that competes
with the Product. Distributor may distribute the Product only as packaged by Micrus. It is
understood, however, that if Distributor believes that any such packaging would not be in
conformity with requirements of relevant Chinese authorities, Distributor will immediately bring
this to Micrus’ attention. Distributor shall not sell, advertise, distribute, or otherwise
transfer or assist in the transfer of the Product outside the Territory or to persons or entities
located outside the Territory. Micrus reserves the right to grant similar distribution rights in
the Product to third parties for distribution and sale outside of the Territory; provided,
however, such third parties shall be similarly
required to agree not to sell, advertise, distribute, or otherwise transfer or assist in the
transfer of the Product in the Territory or to

***Certain confidential information contained in this document, marked by brackets, has been omitted and filed with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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persons or entities located in the Territory during
the term of this Agreement. Distributor has no authority to appoint an associate distributor or
sub-distributor of the Product without the prior written authorization of Micrus. If such
authorization is given, each such distributor or sub-distributor shall be bound in writing to
restrictions at least as strict as those restrictions imposed on Distributor under this Agreement.

          2.2 Relationship of Parties. The relationship of Micrus and Distributor established
by this Agreement is that of independent contractors, and nothing contained in this Agreement shall
be construed to: (i) give either party the power to direct or control the day-to-day activities of
the other; or (ii) allow Distributor to create or assume any obligation on behalf of Micrus for any
purpose whatsoever. All financial obligations associated with Distributor business are the sole
responsibility of Distributor. All sales and other agreements between Distributor and its
customers are Distributor’s exclusive responsibility and shall impose no duty or obligation upon
Micrus and shall not have the effect of lessening any of Distributor’s obligations under this
Agreement.

          2.3 Marketing Authorizations.

               2.3.1 Micrus Obligations. Micrus shall deliver to Distributor all scientific,
clinical, toxicological, and manufacturing data in the possession of Micrus, to the extent
necessary for Distributor to obtain all required Marketing Authorizations within the Territory,
provided Distributor maintains all such data as confidential pursuant to Article 7.

               2.3.2 Distributor Obligations. At its own expense, Distributor shall use its best
efforts to obtain and maintain all necessary Marketing Authorizations within the Territory.
Specifically, Distributor agrees that it will undertake to manage, at Distributor’s expense, all
animal trials and human clinical trials required to obtain the Marketing Authorizations. These
approvals will be obtained in the name of Micrus, with Distributor as agent of Micrus for the
purpose of such Marketing Authorizations. Upon termination of this Agreement, Distributor agrees
to transfer all of its rights, title and interest, if any, in and to such approvals to Micrus, or
any third party as may be designated in writing by Micrus. Distributor shall provide Micrus with
written monthly progress reports of its efforts to obtain Marketing Authorizations. Distributor
agrees not to sell or distribute the Product in any geographic region within the Territory until
such time as all Marketing Authorizations in such geographic region have duly been obtained, and to
act at all times in a manner consistent with such Marketing Authorizations.

               2.3.3 Distributor Qualifications. Distributor warrants that it has, and complies with
all requirements of, all necessary licenses, approvals and/or qualifications as required under
applicable Chinese laws, regulations and rules to enter into this Agreement and to distribute the
Products in the Territory, including without limitation all legal qualifications and licenses as
required by the China State Food & Drug Administration (“SFDA”) and the state or/and local
Administration for Industry & Commerce (“AIC”), as well as other relevant Chinese authorities for
medical device registration, importation, sales and after sale service. Any discontinuance of such
licenses, approvals, or qualifications, or of Distributor’s compliance with such requirements,
shall be deemed a material breach of this Agreement.

          2.4 Trademarks

               2.4.1 License. Micrus hereby grants to Distributor the non-transferable,
non-assignable, non-sublicensable right and license to use the trademarks, service marks, and trade
names that Micrus may adopt from time to time in connection with Products sold hereunder (the
“Trademarks”) solely on or in connection with Distributor’s promotion, sale and distribution of the
Product within the Territory as authorized under this Agreement for the term of this Agreement.
Distributor shall have the right to indicate to the public that it is an authorized distributor of
the Product. Distributor shall not alter or remove any Trademark applied to the Product. Nothing
herein shall grant to Distributor any right, title or interest in the Trademarks. All use of the
Trademarks, and goodwill associated therewith, shall inure to the benefit of Micrus. At no time
during or after the term of this Agreement shall Distributor challenge or assist others to
challenge the Trademarks or the registration thereof or attempt to register any trademarks, marks
or trade names confusingly similar to those of Micrus.

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               2.4.2 Approval of Representations. Distributor shall respect the Trademarks and
follow the instructions of Micrus as to all usage of the Trademarks, including, without,
limitation, complying with Micrus’ quality control requirements and submitting samples of
Distributor’s use of the Trademarks to Micrus for approval. If any of the Trademarks are to be
used in conjunction with any other mark on or in relation to the Product, then the Trademark shall
be presented equally legibly, equally prominently, and of the same or greater size than the other
mark(s) but nevertheless separated from the other trademark so that each appears to be a mark in
its own right, distinct from the other mark(s).

          2.5 Provision of Data. Distributor agrees to provide Micrus promptly with all clinical
and technical information and data with respect to the Product which it develops during the term of
this Agreement. Distributor further agrees to communicate promptly to Micrus any and all
modifications, design changes or improvements to the Products suggested by any of Distributor’s
customers, distributors, employees or agents. Distributor further agrees that Micrus shall have,
and is hereby assigned, any and all right, title and interest in and to any such suggested
modifications, design changes or improvements to the Products without the payment of any additional
consideration therefor either to Distributor or its customers, distributors, employees or agents.
Distributor will also promptly notify Micrus of any infringement of any of the Trademarks, patent
or other proprietary rights relating to the Products of which Distributor becomes aware.

          2.6 Protection Of Legends. Distributor shall not remove, overprint or deface any
notice of confidentiality, patent numbers, patent pending notice, copyright, trademark, logo,
legend or other notices of ownership or confidentiality from any originals or copies of any
materials, goods or products it obtains from Micrus.

          2.7 Reverse Engineering. Distributor shall not, by itself or through its agents or a
third party, reverse-engineer, de-compile, or disassemble any device or technology disclosed to it
under this Agreement.

ARTICLE 3 — PURCHASE OF PRODUCT

          3.1 Terms and Conditions. All purchases of Product by Distributor from Micrus during
the term of this Agreement shall be subject to the terms and conditions of this Agreement.

          3.2 Prices.

               3.2.1 Subject to this Section 3.2, Micrus will sell Product to Distributor at the preferential
prices shown in Exhibit A (“Purchase Price”) until [***] after the Effective Date or until such
time the pricing is revised in accordance with this Agreement, whichever is earlier. The parties
agree to discuss, in good faith, increases and revisions to the prices, within at least [***] from
the Effective Date of this Agreement, based on market data then available to Micrus and as
relevant. [***]. Distributor shall have sole discretion to establish the resale price of the
Product to third parties subject only to any regulatory or governmental limitations.

               3.2.2 The Purchase Price shall be revised [***] in writing through consultation between Micrus
and Distributor on [***], and at such other times as the parties may agree in writing. Such
revisions shall apply to all orders for the affected Product received after the effective date of
revision. Price increases shall not affect unfulfilled purchase orders accepted by Micrus in
writing prior to the effective date of the price increase.

               3.2.3 All prices are F.O.B. shipping point.

          3.3 Taxes. The Purchase Price will be net of any Distributor federal, state or local
taxes that may be applicable to the Product. When Micrus has the legal obligation to collect such
taxes, the appropriate amount shall be added to Distributor’s invoice and paid by Distributor,
unless Distributor provides Micrus with a valid tax exemption certificate authorized by the
appropriate taxing authority.

*** Confidential Treatment Requested

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          3.4 Order and Acceptance. All orders for Product submitted by Distributor shall be
initiated by written purchase orders sent to Micrus via a fax, e-mail, or a method set forth in
Section 11.5 and requesting a delivery date during the term of this Agreement. To facilitate
Micrus’ production scheduling, Distributor shall submit purchase orders to Micrus at least ninety
(90) days prior to the first day of the requested month of delivery. No order shall be binding upon
Micrus until accepted by Micrus in writing, and Micrus shall have no liability to Distributor with
respect to purchase orders that are not so accepted. Micrus shall either: (i) notify Distributor,
in writing (via any of the means referenced above), of the acceptance or rejection of an order (or
any portion thereof) and of the assigned delivery date for accepted orders with ten (10) days of
receipt of the purchase order; or (ii) send Product pursuant to such accepted order. No partial
fulfillment of an order shall constitute a commitment to fulfill the entire order, absent the
written acceptance of such entire order. Micrus shall use its commercially reasonable efforts to
deliver Product at the time specified in its written acceptance of Distributor’s purchase orders.
Micrus reserves the right at any time to discontinue the manufacture, supply or sale of any
Product, to make changes in materials or design, or to add improvements to any Product, without
incurring any liability whatsoever.

          3.5 Terms of Purchase Orders. Distributor’s purchase orders submitted to Micrus from
time to time with respect to Product to be purchased hereunder shall be governed by the terms of
this Agreement, and nothing contained in any such purchase order shall in any way modify such terms
of purchase or add any additional terms or conditions.

          3.6 Payment. Micrus shall submit an invoice to Distributor upon each shipment of
Product ordered by Distributor. The invoice shall set forth the Purchase Price for the Product in
a given shipment plus any freight, taxes or other applicable costs initially paid by Micrus but to
be borne by Distributor. Payment shall be made by Distributor in US Dollars by wire transfer,
check or other instrument approved in writing by Micrus. Payment terms shall be the full invoiced
amount to be paid by Distributor to Micrus within ninety (90) days of the date of the invoice;
which payment terms shall be reviewed after the first year of this Agreement for payment terms
applicable to subsequent years of the then-current term of the Agreement; provided,
however, that any revision to the payment terms must be made by a mutually agreed to
writing executed by both parties. Any invoiced amount not received within ninety (90) days of the
date of invoice shall be subject to a service charge of one percent (1%) per month, or if lower,
the maximum interest rate allowed by law. Distributor shall pay all of Micrus’ costs and expenses
(including reasonable attorney’s fees) to enforce and preserve Micrus’ rights under this Subsection
3.6. All exchange, interest, banking collection and other charges shall be at Distributor’s
expense. Distributor agrees to open and maintain an irrevocable standby letter of credit for
the benefit of Micrus in the amount of [***], drawn on a California bank approved by Micrus and in
form and substance acceptable to Micrus, prior to issuing any purchase orders hereunder (and
Micrus shall not be required to ship Product hereunder until such letter of credit has issued, or
if after making such shipment Distributor’s balance payable to Micrus would exceed the amount of
the letter of credit). Notwithstanding the foregoing, Distributor may, in lieu of providing a
letter of credit, prepay any Product orders made pursuant to this Agreement by wire transfer of the
full amount of the order price to an account designated by Micrus.

          3.7 Foreign Currency Exchange. Distributor shall be solely responsible for obtaining
approval from the China State Administration of Foreign Exchange (“SAFE”) and any other relevant
government authorities for currency conversion of Chinese RMB into U.S. dollars for payment to
Micrus, and Distributor warrants that it shall do so. This Agreement may be terminated by Micrus
pursuant to Section 10.2 if Distributor fails to make payment when due, even if the currency is
blocked by the Chinese authorities.

          3.8 Monthly Reports. Within ten (10) days after the end of each calendar month,
Distributor shall provide Micrus with a written sales breakdown, including without limitation, the
amount and type of Product, and names of end users of the Product sold in each country of the
Territory during the period, as well as a nonbinding forecast (by country) for the subsequent
three-month period.

*** Confidential Treatment Requested

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ARTICLE 4 — SUPPLY OF PRODUCT

          4.1 Terms of Distributor Requirements. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 3.4), Micrus agrees to sell and Distributor
agrees to purchase from Micrus Distributor’s entire requirements of products of the type provided
by Micrus under this Agreement, solely for distribution and/or sale in the Territory. Micrus shall
use commercially reasonable efforts to manufacture the Product and, subject to Section 3.4, supply
them to Distributor in quantities sufficient to satisfy Distributor’s needs in accordance with the
provisions of this Article 4, provided Distributor submits to Micrus purchase estimates pursuant to
Section 4.2.

          4.2 Purchase Estimates. Distributor shall submit to Micrus, beginning ninety (90)
days before the first anticipated order of Product and within the first ten (10) days after the
beginning of each calendar quarter thereafter, a non-binding good faith estimate of the amount of
Product to be required and purchased by Distributor for both the next three months and the next
twelve-month periods.

          4.3 Inspection and Dispute Resolution Relating to Satisfaction of Product
Specifications. The following provisions relate to inspection and resolution of disputes:

               4.3.1 Rejection of Product. Distributor shall inspect all Product promptly upon
receipt thereof and may reject any Product pursuant to this Section 4.3.1 that fails to meet the
specifications set forth in Micrus’ current product specifications for the Product. Any Product
not properly rejected within thirty (30) days of receipt of that Product at Distributor’s facility
after customs clearance for import (the “Rejection Period”) shall be deemed accepted. To reject a
Product, Distributor shall within the Rejection Period, (i) notify Micrus in writing of its
rejection and the reason for the rejection, and (ii) return, at its expense, the rejected Product
to Micrus (the “Returned Product”) in the same condition in which it was delivered to Distributor.
All claims made by Distributor after its inspection of the Product shall be handled on a
case-by-case basis during which time Micrus shall have the right to first inspect any Product
involved before being required to take any action with respect thereto. Micrus shall make its
investigation within thirty (30) days of receipt of notice of a claim from Distributor. Micrus
shall, at its expense, replace Product it determines to be defective and ship such replacement
Product freight prepaid. In no event shall Micrus be liable under this Agreement for any failure
of any Product to meet the specifications due to modification or improper use, storage or shipment
of the Product by Distributor or anyone receiving the Product from or on behalf of Distributor.

               4.3.2 Resolution of Disputes Relating to Product Specifications. If the parties
hereto fail to agree as to whether a delivered quantity of Product meets its agreed specifications,
then the parties shall cooperate to have the Product in dispute analyzed by a jointly selected
qualified independent testing laboratory.

               4.3.3 Return of Product After Rejection Period. After the Rejection Period, Micrus’
limited warranty as stated in Section 8.1 hereof shall be applied. If Micrus tests and inspects
the Returned Product and determines that such Returned Product (i) has been physically damaged,
(ii) has been modified or improperly used, stored or shipped by Distributor or anyone receiving the
Product from or on behalf of Distributor, or (iii) performs according to Micrus’ written
specifications, no credit will be given to Distributor. If upon such test and inspections such
Returned Product (a) has not been physically damaged, (b) has not been modified or improperly used,
stored or shipped by Distributor or anyone receiving the Product from or on behalf of Distributor,
and (c) does not perform to Micrus’ written specification, these Returned Products will be replaced
at no cost to Distributor. In all cases of physical damage or modification to, or improper use,
storage or shipment of, Returned Product, no credit will be given to Distributor.

          4.4 Title. Title and risk of loss pass to Distributor when Product leaves Micrus’
facility. Distributor shall be solely responsible for the payment of all freight and insurance and
other costs, expenses, fees, duties, imports, and charges of whatever kind or nature arising from
the shipment, delivery, and importation of Product into the Territory. Distributor shall solely be
responsible for taking all actions necessary to obtain clearance to import Product into the
Territory and Distributor warrants that it will comply in all respects with any restrictions set
forth in the import and/or export license for every Product purchased hereunder.

          4.5 Reporting. Distributor agrees to report to Micrus any information from any
source, including, without limitation, employees, distributors, agents, customers, user facilities,
individuals, or medical or scientific literature, whether published or unpublished, that reasonably
suggests that there is a problem with the Product or a probability that the Product or a similar
product has caused or contributed to a death, serious illness or serious injury, including but not
limited to, severe or permanent disability, stroke, or

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brain damage as promptly as possible but within five (5) days of receipt of information of
such event. Distributor agrees not to disclose any such information referred to herein to any
third party without the prior written consent of Micrus.

               4.5.1 Serious illness means an event that is life threatening, results in permanent impairment
of a body function or permanent damage to the body structure, or necessitates immediate medical or
surgical intervention to preclude permanent impairment of a body function or permanent damage to a
body structure.

               4.5.2 Serious injury means an event that is life threatening, results in permanent impairment
of a body function or permanent damage to a body structure, or necessitates medical or surgical
intervention to preclude permanent impairment of a body function or permanent damage to a body
structure.

          4.6 Monitoring. Each of the parties hereto shall monitor all relevant journals and
media communications for information on factors materially affecting the use or efficacy of the
Product and shall promptly inform the other party of such information. The informing party may
provide in writing its evaluation of such information. Either party shall promptly inform the
other if it has actual knowledge of any measures which are necessary to eliminate or minimize any
risk associated with the use of the Product or a specific production lot of the Product.

ARTICLE 5 — ADDITIONAL OBLIGATIONS OF DISTRIBUTOR

          5.1 Marketing Obligations. Distributor agrees to use its best efforts to successfully
promote and distribute the Product, at its own expense, in the Territory using diligent and
vigorous efforts to maximize sales and market penetration at the earliest date. Such efforts shall
include, but are not limited to, preparing promotional materials, advertising the Product in trade
publications within the Territory, participating in appropriate trade shows within the Territory,
and directly soliciting orders from customers within the Territory for the Product. Subject to
Micrus’ approval and obligations under Article 8 hereof, Distributor shall also be responsible for
all quality control, lot release for Distributor’s requirements, promotional activities, marketing
and selling efforts, distribution and technical services. All promotional materials developed by
Distributor shall be submitted to Micrus for approval before such materials are distributed by
Distributor. Micrus shall promptly review such materials, and if no written response is provided
by Micrus within thirty (30) days after receipt of such material, then the material will be deemed
to have been approved by Micrus.

          5.2 Finances and Personnel. Distributor shall, at its sole cost, expense, and risk:
(i) employ on its own behalf an appropriate number of specialized, trained, and qualified sales
personnel whose main function shall be the promotion and sale of the Product in the Territory; and
(ii) maintain a suitable organization for the promotion and sale of the Products in the Territory
pursuant to Distributor’s obligations hereunder. Notwithstanding the foregoing, Micrus agrees to
provide sales and marketing support to the extent set forth in a letter agreement to be executed
concurrently with this Agreement.

          5.3 Customer and Sales Reporting. Distributor shall, at its own expense and
consistent with the sales policies of Micrus:

               5.3.1 place the Product in Distributor’s catalogues as soon as possible and feature the
Product in any applicable trade show within the Territory that it attends;

               5.3.2 provide adequate contact with existing and potential customers within the Territory on a
regular basis, consistent with good business practice;

               5.3.3 assist Micrus in assessing customer requirements for the Product, including
modifications and improvements thereto, in terms of quality, design, functional capability, and
other features; and

               5.3.4 submit market research information, as reasonably requested by Micrus regarding
competition and changes in the market within the Territory.

          5.4 Marketing Plans. Distributor shall submit to Micrus for its approval an initial
Product launch plan for the Products in the Territory by August 17th 2007, and then on
or before October of each year, an annual marketing and sales plan for the Products. Each of these
plans shall include specific marketing sales strategies, tactics and goals, market research
analysis, promotion budgets, and sales projections for all products to be marketed in the
Territory.

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          5.5 Compliance with Laws. Distributor shall market and distribute the Product in the
Territory in compliance with all applicable laws and regulations and good commercial practice and
for uses and applications approved by Micrus in writing for the Product. Distributor shall comply
with all laws, rules and regulations as applicable to the marketing, distribution and sale of the
Product in the Territory or any part of it. Distributor further agrees to comply with the U.S.
Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”) and all applicable export laws,
restrictions and regulations of any U.S. or foreign agency or authority and not to export or
re-export or allow the export or re-export of the Product or any related technology or information
in violation of any such laws, restrictions or regulations. A copy of the FCPA is attached to this
Agreement as Exhibit C.

          Distributor hereby declares that it has read and understood the provisions of the FCPA and, on
that basis, it further represents and covenants that neither it nor any of its employees or agents
have taken or will take any action to cause Distributor to be in violation of the FCPA.
Distributor further declares that it understands that employees of non-profit, public or
state-owned medical care facilities who have discretionary spending, requisition or disbursement
authority, or who supervise employees with such authority, are likely to fall within the FCPA’s
definition of “foreign official,” and should be considered “foreign officials” for purposes of
compliance with the FCPA and this Article of the Agreement.

          Specifically, Distributor hereby certifies that it has not paid, nor offered or agreed to pay,
nor has caused to be paid, or offered or agreed to be paid, directly or indirectly, in respect of
this Agreement, any fees, commissions or political contributions to any “foreign official”
anywhere for the purpose of influencing such official’s act or decision to provide business to
Distributor or to Micrus. Distributor further certifies that it will not, directly or indirectly,
in connection with this Agreement and the business resulting therefrom, offer, pay, promise to pay,
or authorize the giving of money or anything of value to any public or governmental employee or
official, to any political party or official thereof or to any candidate for political office,
while knowing or being aware of a high probability that all or a portion of such money or thing of
value will be offered, given or promised, directly or indirectly, to any “foreign official,” to any
political party or official thereof, or to any candidate to political office, for the purpose of:
(a) influencing any act or decision of such official, political party, party official, or candidate
in his or its official capacity, including a decision to fail to perform his or its official
functions; or (b) inducing such official, political party, party official or candidate to use his
or its influence with the government or instrumentality thereof to affect or influence any act or
decision of such government or instrumentality, in order to assist Micrus or Distributor in
obtaining or retaining business for or with, or directing business to any third party. Distributor
further certifies that it will not, directly or indirectly, in connection with this Agreement and
the business resulting therefrom, offer, pay, promise to pay, or authorize the giving of money or
anything of value to any person, while knowing or being aware of a high probability that all or a
portion of such money or thing of value will be offered, given, or promised, directly or
indirectly, to any “foreign official,” to any foreign political party or official thereof, or to
any candidate for foreign political office, for the purpose of: (a) influencing any act or
decision of such official, political party, party official, or candidate in his or its official
capacity, including a decision to fail to perform his or its official functions; or (b) inducing
such official, political party, party official or candidate to use his or its influence with the
government or instrumentality thereof to affect or influence any act or decision of such government
or instrumentality, in order to assist Micrus or Distributor in obtaining or retaining business for
or with, or directing business to any third party.

          Distributor agrees that it shall make its books and records available to Micrus for inspection
upon Micrus’ request so that Micrus can ensure that Distributor has devised and maintained a system
of internal accounting controls sufficient to provide reasonable assurances, upon request from
Micrus, that (a) Distributor’s accounts accurately and fairly reflect, in reasonable detail,
Distributor’s transactions and dispositions of cash; (b) all transactions are executed with general
or specific authorization from distributor’s financial controller (Ms. Chen Shi Hong); (c)
transactions are recorded as necessary to maintain accountability for assets; (d) access to assets
is permitted only in accordance with general or specific authorization of Distributor’s financial
controller; and (e) the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any differences

          Distributor also agrees that it will require that all of its officers, employees and
contractors (if any are specifically approved by Micrus in writing pursuant to Section 2.1 of this
Agreement), who do or will assist, directly or indirectly, Distributor in the promotion and sale of
the Products pursuant to this Agreement, complete initial training to ensure that they understand
and agree to comply with the provisions of the FCPA and this Section 5.5. Distributor will further
require that all officers, employees and distributors will complete further training to ensure
compliance with the FCPA and this Section 5.5 no less frequently than on an annual basis.
Distributor will, on request, provide Micrus with signed certifications from all officers,
employees and contractors, confirming that each such officer, employee and contractor has completed
the required training. Further, Distributor will provide

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Micrus, at least ten (10) business days in advance of such training, with copies of the training
materials to be delivered to Distributor’s officers, employees and contractors for Micrus’ review
and approval. Distributor also agrees to record, by audio- and/or video- means, each training
session delivered to its officers, employees and contractors, to maintain such recordings for a
period of not less than three (3) years, and to provide such recordings to Micrus upon request.

          Distributor further agrees that if subsequent developments cause the certifications and
information reported herein to be no longer accurate or complete, Distributor will immediately so
advise Micrus. Distributor further agrees that its violation of any part of this Section 5.5,
including any refusal to make its books and records available for Micrus’s inspection, will be a
material breach of this Agreement and cause for immediate termination, without further liability or
obligation on the part of Micrus notwithstanding anything to the contrary provided in this
Agreement.

          Distributor shall obtain and bear all expenses relating to any necessary licenses and/or
exemptions with respect to the export from the United States of the Products to any location in
compliance with all applicable laws and regulations.

          5.6 Traceability. Distributor agrees to maintain access to records allowing Micrus
the ability to determine all customers who were shipped specific product lots. Product
Identification and traceability requirements are defined in ISO 9001 : 1994 (E) requirement 4.8 as:
“the supplier shall maintain documented procedures for identifying the product from production,
delivery and installation.” Traceability in ISO 8402 Vocabulary is defined as: “ability to trace
the distribution and location of the product after delivery.”

ARTICLE 6 — FAILURE TO MEET MINIMUM REQUIREMENTS

     In the event that in any given year, the total Product orders and payments by Distributor
under Section 3.6 do not, in the aggregate, equal or exceed: the minimum quarterly or annual
purchase requirements in the amounts set forth in Exhibit B hereto (“Minimum Purchase
Requirements”), then Micrus may, at its sole discretion, either: (a) convert the grant of the
distribution rights pursuant to Section 2.1 hereof to a non-exclusive basis; or (b) terminate this
Agreement upon thirty (30) days prior written notice to Distributor. If Micrus elects to convert
the grant of distribution rights to a non-exclusive basis, such election shall be made by delivery
of written notice by Micrus to Distributor and shall take effect on the date set forth in the
notice, and Micrus will in that event retain the right thereafter to terminate this Agreement if at
any time Distributor again fails to equal or exceed the Minimum Purchase Requirements.

ARTICLE 7 — CONFIDENTIAL INFORMATION

     The parties hereto agree that each shall keep completely confidential and shall not publish or
otherwise divulge or use for its own benefit or for the benefit of any third party any information
of a proprietary nature furnished to it (the “Receiving Party”) by the other party (the “Disclosing
Party”) for a period of five (5) years after the termination of this Agreement without the prior
written approval of the Disclosing Party in each instance, except to the extent that it is
necessary to divulge such information for the obtaining of governmental approval for the marketing
of the Product and the Receiving Party discloses only the minimum of information necessary in
connection therewith and takes reasonable steps to maintain the confidentiality of such
information. Nothing in this Article 7 shall prevent disclosure or use of information: (i)
already known to the Receiving Party prior to its receipt of such information from the Disclosing
Party; (ii) which was known to the public at the time of disclosure, or subsequently becomes so
known through no act or omission of the Receiving Party; (iii) which is properly acquired by the
Receiving Party from a third party having the right to convey such information; or (iv) that is
required to be disclosed by law or regulation or in connection with any financing, acquisition,
merger or sale, provided the Receiving Party provides the Disclosing Party with advance notice of
such disclosure and takes reasonable steps to protect the confidentiality of such information.
Information of a proprietary nature shall include, but not be limited to, information concerning a
party’s products, proposed products, marketing plans, methods of manufacture, customers or any
other information or materials in whatever form not generally known to the public. Subject to the
foregoing, this specific terms of this Agreement (including all financial terms) shall be kept
confidential, however, the parties may refer generally to this Agreement and the parties’
relationship arising therefrom.

ARTICLE 8 — WARRANTY; LIMITATION OF LIABILITY

          8.1 Warranty. Micrus represents and warrants to Distributor that all Product
manufactured and delivered to Distributor pursuant to this Agreement shall meet Micrus’
specifications for such Product at the time of delivery by Micrus to Distributor for the

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shelf life of the Product as specified on the Product labeling; provided,
however, that such Product: (i) has been shipped in accordance with Micrus’ shipping
instructions and stored in accordance with the instructions on the labeling and the packaging for
such Product; (ii) is used in the application for which it was intended; and (iii) has not been
modified without Micrus’ prior written consent. Distributor shall handle and be solely responsible
for all warranty returns from its direct and indirect customers. MICRUS’ SOLE AND EXCLUSIVE
LIABILITY UNDER THE WARRANTY SET FORTH IN THIS SECTION 8.1 SHALL BE LIMITED TO A REPLACEMENT TO
DISTRIBUTOR OF THE DEFECTIVE UNIT OF THE PRODUCT WITH A PRODUCT UNIT SUBSTANTIALLY EQUIVALENT TO
THE UNIT ORIGINALLY SHIPPED BY MICRUS TO DISTRIBUTOR, OR IF THAT IS IMPRACTICABLE, THE REFUND BY
MICRUS TO DISTRIBUTOR OF ALL AMOUNTS PAID TO MICRUS FOR SUCH DEFECTIVE UNIT.

          8.2 No Other Warranty. EXCEPT FOR THE EXPRESS WARRANTY SET FORTH IN SECTION 8.1
HEREIN, THE PRODUCT IS PROVIDED “AS IS,” AND MICRUS GRANTS NO OTHER WARRANTIES, EXPRESS OR IMPLIED,
BY STATUTE OR OTHERWISE, REGARDING ANY PRODUCT, ITS FITNESS FOR ANY PARTICULAR PURPOSE, ITS
QUALITY, ITS MERCHANTABILITY, OR OTHERWISE.

          8.3 Limitation of Liability: NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
OTHERWISE, IN NO EVENT SHALL MICRUS BE LIABLE TO DISTRIBUTOR OR ANY OTHER PERSON OR ENTITY WITH
RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR
OTHER LEGAL OR EQUITABLE THEORY FOR (A) THE COST OF PROCUREMENT OF SUBSTITUTE GOODS, (B) ANY
SPECIAL, CONSEQUENTIAL, PUNITIVE. INDIRECT OR INCIDENTAL DAMAGES OR (C) LOST PROFITS OR LOST
BUSINESS; EVEN IF THE REMEDIES PROVIDED FOR IN THIS AGREEMENT FAIL OF THEIR ESSENTIAL PURPOSE AND
EVEN IF EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT
NOTHING HEREIN SHALL RELIEVE MICRUS FROM ANY PRODUCT LIABILITY CLAIM, AS SET FORTH IN ARTICLE 9
HERETO.

          8.4 Ownership. Distributor acknowledges and agrees that as between Distributor and
Micrus, Micrus owns all right, title and interest in and to all clinical, technical, product,
sales, marketing, and customer information and data with respect to the Product (including, without
limitation, any and all modifications, design changes or improvements relating thereto), and all
industrial and intellectual property rights of any kind in relation to the Product (including,
without limitation, any and all modifications, design changes or improvements relating thereto) or
any of the foregoing, including, without limitation, the right to patents, registered or other
designs, trademarks, trade names, inventions, copyright, know-how and any other confidential
information. Nothing contained in this Agreement shall be effective to give Distributor any rights
of ownership in or to any of the foregoing. To the extent Distributor owns any rights, title or
interest in or to the foregoing, Distributor hereby assigns all of such rights to Micrus. The
provision of Product technical information to Distributor under this Agreement is for the sole
purpose of obtaining approval from the regulatory authorities in the Territory for the Product and
is subject to the confidentiality obligations set forth in Article 7. The use by Distributor of any
of these property rights is authorized only for the purposes herein set forth, and upon termination
of this Agreement for any reason such authorization shall cease.

          8.5 Sale Conveys No Right to Manufacture or Copy. The Product is offered for sale and
is sold by Micrus subject in every case to the condition that such sale does not convey any
license, expressly or by implication, to manufacture, duplicate or otherwise copy or reproduce the
Product or any portion thereof. Distributor shall take appropriate steps with its customers and
distributors, if any, as Micrus may request, to inform them of and assure compliance with the
restrictions contained in this Section 8.5.

ARTICLE 9 — INDEMNIFICATION

          9.1 Indemnification by Micrus. Micrus agrees to and hereby does indemnify and hold
Distributor harmless from and against all claims, damages, losses, costs and expenses, including
reasonable attorneys’ fees, which Distributor may incur by reason of any Product sold or furnished
by Micrus which result in injury, illness, or death of any person, to the extent that such claims
arise out of or result from either the negligence or willful misconduct of Micrus in: (i) product
design; or (ii) manufacturing; or (iii) breach of any representations or warranties by Micrus
hereunder, except if such claims arise from the negligence or willful misconduct of Distributor,
any modification of the Product other than by Micrus or any breach by Distributor of any of its
obligations, representations or warranties under this Agreement. Micrus shall have sole control of
any such action or settlement negotiations, and Micrus agrees to pay, subject to the limitations
hereinafter set forth, any final judgment entered against Distributor or its customer on

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such issue in any such suit or proceedings indemnified hereunder by Micrus. Distributor
agrees to notify Micrus promptly in writing of such claim, suit or proceeding and gives Micrus
authority to proceed as contemplated herein, and, at Micrus’ expense, give Micrus proper and full
information and assistance to settle and/or defend any such claim, suit or proceeding. If the
Product, or any part thereof, is the subject of any claim, suit or proceeding for infringement of
any third party patents or trademark in the United States or in the Territory, or if the sale or
use of the Product, or any part thereof, is, as a result thereof, enjoined, then Micrus shall, at
its option and expense: (a) procure for Distributor and its customers the right under such patent,
or trademark to sell or use, as appropriate, the Product or such part thereof; or (b) replace the
Product, or part thereof, with other suitable Product or parts; or (c) suitably modify the Product,
or part thereof, or (d) if the use of the Product, or part thereof, is prevented by injunction,
remove the Product or part thereof, and refund the aggregate payments paid therefore by
Distributor, less a reasonable sum for the use and damage; provided that such claim, suit or
proceeding is not based on a modification of the Product by Distributor or anyone other than
Micrus, or a combination of the Product with any product other than those provided by Micrus for
use with the Product.

          9.2 Indemnification by Distributor. Distributor hereby agrees to and hereby does
indemnify and hold Micrus harmless from and against all claims, damages, losses, costs and
expenses, including reasonable attorneys’ fees, which Micrus may incur to the extent that such
claims arise out or result from; (i) the unlawful sale or other distribution of Product by
Distributor, including any improper sales by Distributor to customers who are located outside the
Territory; (ii) the negligent or willful misconduct of Distributor in the distribution, labeling or
packaging of the Product; (iii) Distributor’s recommended use of Product in violation of this
Agreement; (iv) modification of the Product by Distributor, (v) combination of the Product with any
product other than those provided by Micrus for use with the Product, or (vi) breach of any
representation, warranty, or obligation by Distributor hereunder, except for such claims which
arise out of or result from the gross negligence, or willful misconduct of Micrus. Distributor
shall have sole control of any such action or settlement negotiations, and Distributor agrees to
pay, subject to the limitations hereinafter set forth, any final judgment entered against Micrus or
its customer on such issue in any such suit or proceedings defended by Distributor. Micrus agrees
to notify Distributor promptly in writing of such claim, suit or proceeding and gives Distributor
authority to proceed as contemplated herein, and, at Distributor’s expense, give Distributor proper
and full information and assistance to settle and/or defend any such claim, suit or proceeding.

          9.3 Contribution. In the event the negligence of Distributor and Micrus contribute to
any loss, cost, damages, claim or expense relating to Product supplied and/or distributed or sold
hereunder, then Distributor and Micrus shall be responsible for that portion of the loss, cost,
damages, claim or expense to which its negligence contributed.

ARTICLE 10 — TERM AND TERMINATION

          10.1 Term. This Agreement shall commence on the Effective Date and shall continue in
force for a fixed term until March 31, 2012.

          10.2 Failure to Make Payment. Micrus may terminate this Agreement at any time upon
Distributor’s failure to make payments due to Micrus pursuant to this Agreement and the
continuation of such failure for more than thirty (30) days after delivery of written notice to
Distributor of such failure.

          10.3 Failure to Commercialize or Obtain Marketing Authorizations. Micrus may
terminate this Agreement at any time upon Distributor’s failure to use diligent efforts to move
ahead with its obligations to market, sell and distribute Product under Section 5.1 or meet the
Minimum Purchase Requirement and upon the continuation of such failure for more than ninety (90)
days after delivery of written notice to Distributor of such failure, except where such failure of
Distributor is a result of the failure of Micrus to meet its obligations as defined in this
Agreement or due to circumstances beyond the reasonable control of Distributor pursuant to Section
11.7 hereof.

          10.4 Patent. Copyright. Trademark or FCPA Violations. Micrus may terminate this
Agreement at any time without notice upon Distributor’s violation of Article 7 or of Sections 5.5,
8.4, or 8.5 hereof.

          10.5 Material Breach. Except as set forth in Section 10.2 hereof or elsewhere in this
Agreement, either party may terminate this Agreement upon ninety (90) days prior written notice in
the event of the other party’s breach of any other material provision of this Agreement, if such
default or breach is not remedied within ninety (90) days from the date of such notice,
except

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where such default or breach is due to circumstances beyond the reasonable control of the
other party pursuant to Section 11.7 hereof, or as otherwise specified in this Article 10.

          10.6 Bankruptcy. If, during the term of this Agreement, either party makes an
assignment, of this Agreement or generally, for the benefit of creditors, or becomes insolvent or
seeks protection under any bankruptcy, receivership, trust deed, creditor’s arrangement or
composition, or if any comparable proceeding is instituted against the other party and is not
dismissed within ninety (90) days of such institution, then the other party may terminate this
Agreement immediately upon delivery of written notice thereof.

          10.7 Control Event. In the event that Distributor sells all or substantially all of
its business or assets to which this Agreement relates to a non-affiliate, or has more than fifty
percent (50%) of its equity securities purchased by a single purchaser who is a non-affiliate in
one transaction (a “Control Event”) (whether by sale, acquisition, merger, operation of law or
otherwise), then Micrus may terminate this Agreement with thirty (30) days prior written notice at
any time after the occurrence of the Control Event. In the event that Micrus sells all or
substantially all of its business or assets to which this Agreement relates to a non-affiliate, or
has more than fifty percent (50%) of its equity securities purchased by a purchaser who is a
non-affiliate in one transaction, then Micrus may terminate this Agreement at any time, provided
Micrus pays Distributor a termination fee of fifteen (15%) of the Minimum Purchase Requirement for
the then current term. For purposes of this section, a non-affiliate is not a parent, subsidiary
or a subsidiary of a common parent or a successor.

          10.8 Waiver. Any failure to terminate shall not be construed as a waiver by the
aggrieved party of its right to terminate for future defaults or breaches.

          10.9 Effects of Termination.

               10.9.1 Return of Property. Upon termination of this Agreement for any reason, each
party shall upon the request of the other party return all books, records, documents, data,
samples, parts, materials, and proprietary information which it shall have received from the other
party pursuant to this Agreement and which it shall still have in its possession or control;
provided, however, that a single copy may be retained solely for legal archival purposes by each
party, subject to the confidentiality provisions of Article 7.

               10.9.2 Accrued Payments. Termination of this Agreement by either party shall not
prejudice the right of either party to recover any payments for Products shipped under this
Agreement, and shall not prejudice any cause of action or claim of either party accruing under this
Agreement.

               10.9.3 Marketing and Distribution Rights. Upon termination of this Agreement,
Distributor’s rights to market, distribute, sell and otherwise transfer the Product, and all other
rights under this Agreement, shall immediately cease. The parties shall undertake to negotiate in
good faith a mutually acceptable agreement to satisfy any contractual obligations of Distributor to
supply the Product to third parties, and Micrus shall supply all necessary inventory under such
agreements. Except as needed to satisfy any contractual obligations existing as of the effective
date of termination and as approved by Micrus in writing, Distributor shall return all inventory in
its possession or control to Micrus in the same condition in which it was provided by Micrus within
sixty (60) days after termination.

               10.9.4 Marketing Authorizations. Upon termination of this Agreement, Distributor
shall promptly assign or otherwise transfer to Micrus or its designees all of Distributor’s rights,
title and interest in and to the Marketing Authorizations and/or pending applications for the
Product; provided, however, if such termination does not result from a breach of
this Agreement by Distributor, Micrus shall reimburse Distributor for its costs incurred in
obtaining such Marketing Authorizations.

               10.9.5 Trademark. Upon termination of this Agreement, the license to use the
Trademarks granted in Section 2.4 shall also terminate and all right, title and interest in such
Trademarks shall belong to Micrus. Upon termination of this Agreement, Distributor shall return or
destroy all materials containing Micrus’ trademark, service mark, trade name and/or logo, including
but not limited to promotion materials, brochures, labels, packaging and/or samples.

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               10.9.6 Pending Orders. Upon termination of this Agreement, Micrus shall have the
right, at its option, to continue or terminate any order pending as of the effective date of
termination.

               10.9.7 No Liability for Termination. Neither party will incur any liability
whatsoever for any damages, loss or expenses of any kind suffered or incurred by the other party
(or for any compensation to the other party) arising from or incident to any termination of this
Agreement pursuant to such party’s right of termination under this Agreement, whether or not such
party is aware of any such damages, loss or expenses.

          10.10 Termination Not Sole Remedy. Termination is not the sole remedy under this
Agreement and, whether or not termination is effected, all other remedies will remain available.

ARTICLE 11 — GENERAL PROVISIONS

          11.1 Governing Law. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California and the United States of America, without regard to the
United Nations Convention on Contracts for the International Sale of Goods. Except as set forth in
Section 11.2, the sole jurisdiction and venue for actions relating to the subject matter of this
Agreement shall be the California state and U.S. federal courts having jurisdiction in Santa Clara
County, California, and the parties hereby consent to the jurisdiction of such courts.

          11.2 Arbitration. Except for actions seeking injunctive relief, all disputes,
controversies, or differences which may arise between the parties hereto, out of, in relation to,
or in connection with this Agreement or the breach thereof, shall be finally settled by binding
arbitration in San Francisco, California, U.S.A., in accordance with the Commercial Arbitration
rules of the American Arbitration Association then in effect by one (1) arbitrator appointed in
accordance with such Rules, by which each party hereto agrees to be bound. The arbitration shall
be conducted in the English language. The parties further agree to exclude any right of application
or appeal to any courts and that the arbitration award shall be final and binding on the parties,
provided judgment upon an award rendered shall be entered in any court having jurisdiction, or
application shall be made to such court for judicial acceptance of the award and an order of
enforcement, as the case may be.

          11.3 Entire Agreement. This Agreement represents the entire Agreement and
understanding of the parties hereto with respect to the marketing and distribution of the Product
and the subject matter of this Agreement, and supersedes all previous agreements and understandings
related thereto, and may only be amended or modified in writing signed by an authorized
representative of the parties hereto.

          11.4 Assignment. Distributor may not assign, transfer or otherwise dispose of any of
its rights or obligations pursuant to this Agreement without the prior written consent of Micrus.
Such consent shall not be unreasonably withheld. Micrus may assign this Agreement to any affiliate
or acquirer of Micrus. In the absence of such an assignment, any performance by a Micrus affiliate
of an obligation of Micrus hereunder shall, as between the parties, be deemed to have been rendered
by Micrus, and any notice to Distributor given by a Micrus affiliate hereunder shall be deemed as
between the parties to have been given by Micrus. This Agreement shall be binding on, inure to the
benefit of, and be enforceable by the parties, their respective heirs, successors and valid
assigns.

          11.5 Notice. All notices under this Agreement shall be in writing and shall be deemed
given on the date of delivery if sent by certified or registered mail, commercial courier (return
receipt or confirmation of delivery required and costs prepaid), or by personal delivery to the
party to receive such notices or other communications called for in this Agreement at the following
addresses (or at such other address for a party as shall be specified by such party by like
notice):

	 	 	 
	If to MICRUS:
	 	 	MICRUS ENDOVASCULAR CORPORATION

	 	 	821 Fox Lane

	 	 	San Jose, California 95131

	 	 	Attention: Chief Financial Officer

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	If to DISTRIBUTOR:
	 	 	BEIJING TIANXINFU MEDICAL APPLIANCE CO. LTD.

	 	 	3 Floor of the Main Building N. 15,

	 	 	Zuojiazhuang, Chaoyang District

	 	 	Beijing China, 100028

	 	 	Attention: Chief Executive Officer

          11.6 Limitation on Liability. Except for breaches of Article 7, in no event shall
either party be liable to the other for incidental or consequential damages, even if such party
shall have been advised of the possibility of the same. This limitation will not reduce either
party’s obligations with respect to damages that may be suffered by third parties and as to which
an indemnification obligation applies under Article 9.

          11.7 Force Majeure. Except for the obligation to make payments under this Agreement,
each of the parties hereto shall be excused from the performance of its obligations hereunder in
the event such performance is prevented by force majeure, and such excuse shall continue for thirty
(30) days after the termination of such force majeure. For the purposes of this Agreement, force
majeure is defined to include causes beyond the control of the parties hereto, including without
limitation, acts of God, acts, resolutions or laws of any government, war, war-like conditions,
civil commotion, destruction of production facilities or materials by fire, earthquake or storm,
labor disturbances, epidemic and failure of public utilities or common carriers.

          11.8 Publicity. Neither party shall make any press release or other similar public
disclosure or announcement concerning this Agreement, without the prior written consent of the
non-disclosing party, which consent shall not be unreasonably withheld, except as otherwise
required by law. Consent will be deemed granted if no response is received from the non-Disclosing
Party within fifteen (15) days of its confirmed written request for approval from the Disclosing
Party. Notwithstanding the foregoing, in the event such disclosure or public announcement is
required to be made on a more immediate basis in order to comply with applicable laws, then
approval will be deemed granted if no response is received from the non-disclosing party within the
timeframes required by law; provided, however, that the Disclosing Party provides
the non-disclosing party with notice of the legally required timeframe for approval of the
disclosure at the time of providing a copy of the proposed disclosure or announcement.

          11.9 Survival of Rights. All rights to payments and the provisions of Articles 1
(Definitions), 7 (Confidential Information), 8 (Warranty; Limitation of Liability), 9
(Indemnification), and 11 (General Provisions), as well as Sections 2.2 (Relationship of Parties),
4.5 (Reporting), 10.8 (No Waiver), 10.9 (Effects of Termination) and 10.10 (Termination Not Sole
Remedy) shall survive the expiration or termination of this Agreement.

          11.10 Legal Expenses. The prevailing party in any legal action brought by one party
against the other and arising out of this Agreement shall be entitled, in addition to any other
rights and remedies it may have, to reimbursement for its expenses, including arbitration costs and
reasonable attorney’s fees.

          11.11 Governmental Relations. In carrying out its responsibilities under this
Agreement, Distributor has not and will not pay, offer or promise to pay, or authorize the payment
directly or indirectly of any monies or anything of value to any government official or employee,
or any political party or candidates for political office for the purpose of influencing any act or
decision of such official or of the government. In the event of a breach of the representations
and warranties in the preceding sentence, this Agreement may automatically be cancelled by Micrus
upon receipt by Distributor of written notice of cancellation, and any claims for payment by
Distributor shall be surrendered. In no event shall Micrus be obligated under this Agreement to
take any action or omit to take any action that Micrus believes, in good faith, would cause it to
be in violation of any U.S. laws, including without limitation the Foreign Corrupt Practices Act
Distributor shall comply with all laws, rules and regulations applicable to its performance of its
obligations under this Agreement, including all U.S. export control laws.

          11.12 Headings. Headings and captions are for convenience only and are not to be used
in the interpretation of this Agreement.

          11.13 Severability. If any provision of this Agreement is held to be illegal or
unenforceable, that provision shall be limited or eliminated to the minimum extent necessary so
that this Agreement shall otherwise remain in full force and effect.

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          11.14 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same
instruments. This Agreement may be executed by facsimile with original signatures promptly
following by a method set forth in Section 11.5.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	MICRUS ENDOVASCULAR CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 
	 

	 	 	 	 

NAME:
	 	 
	 

	 	 	 	TITLE:	 	 
	 
	 	 	 	 	 	 
	 	 	BEIJING TIANXINFU MEDICAL APPLIANCE CO.

LTD.	 	 
	 
	 

	 	BY:	 	 	 	 
	 

	 	 	 	 

NAME:
	 	 
	 

	 	 	 	TITLE:	 	 

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EXHIBIT A

PURCHASE PRICE

As specified in Section 3.2.1 of the Distribution Agreement, the initial unit pricing of the
product sold to Distributor is given in the following schedule. Each unit with be packaged sterile
in an individual container and shipped to Distributor in a multi-pack shipping box. All prices
below are in United States Dollars and exclude freight out of Micrus’ warehouse, which will be
charged separately.

	 	 	 
	Product	 	Initial Purchase Price / Unit (in US$)
	 
	Detachment Control Box

	 	[***]
	Micrusphere® Cerecyte®

	 	[***]
	Helipaq® Cerecyte

	 	[***]
	Ultipaq® Cerecyte

	 	[***]
	Micrusphere (bare platinum)

	 	[***]
	Helipaq (bare platinum)

	 	[***]
	Ultipaq

	 	[***]
	PharosTM Intracranial Stent

	 	[***]
	CourierTM Microcatheter

	 	[***]
	WatusiTM Guidwire

	 	[***]
	PresidioTM

	 	[***]
	Connecting Cables

	 	[***]

*** Confidential Treatment Requested

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EXHIBIT B

MINIMUM PURCHASE REQUIREMENTS

The following schedule sets forth Distributor’s Minimum Purchase Requirements as specified in
Section 5.6 of the Distribution Agreement. These minimums are stated in US Dollars and represent
the cost of Products paid for by Distributor to Micrus during each year of the Agreement (measured
by anniversary dates of the Effective Date).

	 	 	 	 	 	 	 	 	 	 	 
	TERRITORY	 	Year 1*	 	Year 2	 	Year 3	 	Year 4	 	Year 5
	People’s Republic
of China

	 	[***]**
	 	[***]
	 	[***]
	 	[***]
	 	[***]

*Year 1 shall start on the Effective Date and end March 31, 2008. Subsequent years commence
April 1 and end March 31.

**[***]

	 	 	 
	[***]

	 	Adjusted Year 1 Minimum Purchase Requirement
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]
	[***]

	 	[***]

*** Confidential Treatment Requested

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EXHIBIT C

Anti-Bribery and Books & Records Provisions of

The Foreign Corrupt Practices Act

Current through Pub. L. 105-366 (November 10, 1998)

UNITED STATES CODE

TITLE 15. COMMERCE AND TRADE

CHAPTER 2B—SECURITIES EXCHANGES

§ 78m. Periodical and other reports

(a) Reports by issuer of security; contents

Every issuer of a security registered pursuant to section 78l of this title shall file with the
Commission, in accordance with such rules and regulations as the Commission may prescribe as
necessary or appropriate for the proper protection of investors and to insure fair dealing in the
security—

(1) such information and documents (and such copies thereof) as the Commission shall require to
keep reasonably current the information and documents required to be included in or filed with an
application or registration statement filed pursuant to section 78l of this title, except that the
Commission may not require the filing of any material contract wholly executed before July 1, 1962.

(2) such annual reports (and such copies thereof), certified if required by the rules and
regulations of the Commission by independent public accountants, and such quarterly reports (and
such copies thereof), as the Commission may prescribe.

Every issuer of a security registered on a national securities exchange shall also file a duplicate
original of such information, documents, and reports with the exchange.

(b) Form of report; books, records, and internal accounting; directives

* * *

(2) Every issuer which has a class of securities registered pursuant to section 78l of this title
and every issuer which is required to file reports pursuant to section 78o(d) of this title shall—

(A) make and keep books, records, and accounts, which, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the
issuer; and

(B) devise and maintain a system of internal accounting controls sufficient to provide
reasonable assurances that—

(i) transactions are executed in accordance with management’s general or
specific authorization;

(ii) transactions are recorded as necessary (I) to permit preparation of
financial statements in conformity with generally accepted accounting
principles or any other criteria applicable to such statements, and (II)
to maintain accountability for assets;

(iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and

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(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.

	(3)	 	(A) With respect to matters concerning the national security of the
United States, no duty or liability under paragraph (2) of this
subsection shall be imposed upon any person acting in cooperation with
the head of any Federal department or agency responsible for such
matters if such act in cooperation with such head of a department or
agency was done upon the specific, written directive of the head of
such department or agency pursuant to Presidential authority to issue
such directives. Each directive issued under this paragraph shall set
forth the specific facts and circumstances with respect to which the
provisions of this paragraph are to be invoked. Each such directive
shall, unless renewed in writing, expire one year after the date of
issuance.

	     	 	
(B) Each head of a Federal department or agency of the United States
who issues such a directive pursuant to this paragraph shall maintain
a complete file of all such directives and shall, on October 1 of each
year, transmit a summary of matters covered by such directives in
force at any time during the previous year to the Permanent Select
Committee on Intelligence of the House of Representatives and the
Select Committee on Intelligence of the Senate.

(4) No criminal liability shall be imposed for failing to comply with the requirements of
paragraph (2) of this subsection except as provided in paragraph (5) of this subsection.

(5) No person shall knowingly circumvent or knowingly fail to implement a system of internal
accounting controls or knowingly falsify any book, record, or account described in paragraph (2).

(6) Where an issuer which has a class of securities registered pursuant to section 78l of this
title or an issuer which is required to file reports pursuant to section 78o(d) of this title holds
50 per centum or less of the voting power with respect to a domestic or foreign firm, the
provisions of paragraph (2) require only that the issuer proceed in good faith to use its
influence, to the extent reasonable under the issuer’s circumstances, to cause such domestic or
foreign firm to devise and maintain a system of internal accounting controls consistent with
paragraph (2). Such circumstances include the relative degree of the issuer’s ownership of the
domestic or foreign firm and the laws and practices governing the business operations of the
country in which such firm is located. An issuer which demonstrates good faith efforts to use such
influence shall be conclusively presumed to have complied with the requirements of paragraph (2).

(7) For the purpose of paragraph (2) of this subsection, the terms “reasonable assurances” and
“reasonable detail” mean such level of detail and degree of assurance as would satisfy prudent
officials in the conduct of their own affairs.

* * *

<§ 78dd-1 [Section 30A of the Securities & Exchange Act of 1934].

Prohibited foreign trade practices by issuers

(a) Prohibition

It shall be unlawful for any issuer which has a class of securities registered pursuant to section
78l of this title or which is required to file reports under section 78o(d) of this title, or for
any officer, director, employee, or agent of such issuer or any stockholder thereof acting on
behalf of such issuer, to make use of the mails or any means or instrumentality of interstate
commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the
payment of any money, or offer, gift, promise to give, or authorization of the giving of anything
of value to—

(1) any foreign official for purposes of—

(A) (i) influencing any act or decision of such foreign official in his official
capacity, (ii) inducing such foreign official to do or omit to do any act in violation
of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or
instrumentality thereof to affect or influence any act or decision of such government
or instrumentality,

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in order to assist such issuer in obtaining or retaining business for or with, or directing
business to, any person;

(2) any foreign political party or official thereof or any candidate for foreign political office
for purposes of—

(A) (i) influencing any act or decision of such party, official, or candidate in its
or his official capacity, (ii) inducing such party, official, or candidate to do or
omit to do an act in violation of the lawful duty of such party, official, or
candidate, or (iii) securing any improper advantage; or

(B) inducing such party, official, or candidate to use its or his influence with a
foreign government or instrumentality thereof to affect or influence any act or
decision of such government or instrumentality.

in order to assist such issuer in obtaining or retaining business for or with, or directing
business to, any person; or

(3) any person, while knowing that all or a portion of such money or thing of value will be
offered, given, or promised, directly or indirectly, to any foreign official, to any foreign
political party or official thereof, or to any candidate for foreign political office, for purposes
of—

(A) (i) influencing any act or decision of such foreign official, political party,
party official, or candidate in his or its official capacity, (ii) inducing such
foreign official, political party, party official, or candidate to do or omit to do
any act in violation of the lawful duty of such foreign official, political party,
party official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such foreign official, political party, party official, or candidate to
use his or its influence with a foreign government or instrumentality thereof to
affect or influence any act or decision of such government or instrumentality,

in order to assist such issuer in obtaining or retaining business for or with, or directing
business to, any person.

(b) Exception for routine governmental action

Subsections (a) and (g) of this section shall not apply to any facilitating or expediting payment
to a foreign official, political party, or party official the purpose of which is to expedite or to
secure the performance of a routine governmental action by a foreign official, political party, or
party official.

(c) Affirmative defenses

It shall be an affirmative defense to actions under subsection (a) or (g) of this section that—

(1) the payment, gift, offer, or promise of anything of value that was made, was lawful under the
written laws and regulations of the foreign official’s, political party’s, party official’s, or
candidate’s country; or

(2) the payment, gift, offer, or promise of anything of value that was made, was a reasonable and
bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign
official, party, party official, or candidate and was directly related to—

(A) the promotion, demonstration, or explanation of products or services; or

(B) the execution or performance of a contract with a foreign government or agency
thereof.

(d) Guidelines by Attorney General

Not later than one year after August 23, 1988, the Attorney General, after consultation with the
Commission, the Secretary of Commerce, the United States Trade Representative, the Secretary of
State, and the Secretary of the Treasury, and after obtaining the views of all interested persons
through public notice and comment procedures, shall determine to what extent compliance with this
section would be enhanced and the business community would be assisted by further clarification of
the preceding provisions of this section and may, based on such determination and to the extent
necessary and appropriate, issue—

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(1) guidelines describing specific types of conduct, associated with common types of export sales
arrangements and business contracts, which for purposes of the Department of Justice’s present
enforcement policy, the Attorney General determines would be in conformance with the preceding
provisions of this section; and

(2) general precautionary procedures which issuers may use on a voluntary basis to conform their
conduct to the Department of Justice’s present enforcement policy regarding the preceding
provisions of this section.

The Attorney General shall issue the guidelines and procedures referred to in the preceding
sentence in accordance with the provisions of subchapter II of chapter 5 of Title 5 and those
guidelines and procedures shall be subject to the provisions of chapter 7 of that title.

(e) Opinions of Attorney General

(1) The Attorney General, after consultation with appropriate departments and agencies of the
United States and after obtaining the views of all interested persons through public notice and
comment procedures, shall establish a procedure to provide responses to specific inquiries by
issuers concerning conformance of their conduct with the Department of Justice’s present
enforcement policy regarding the preceding provisions of this section. The Attorney General shall,
within 30 days after receiving such a request, issue an opinion in response to that request. The
opinion shall state whether or not certain specified prospective conduct would, for purposes of the
Department of Justice’s present enforcement policy, violate the preceding provisions of this
section. Additional requests for opinions may be filed with the Attorney General regarding other
specified prospective conduct that is beyond the scope of conduct specified in previous requests.
In any action brought under the applicable provisions of this section, there shall be a rebuttable
presumption that conduct, which is specified in a request by an issuer and for which the Attorney
General has issued an opinion that such conduct is in conformity with the Department of Justice’s
present enforcement policy, is in compliance with the preceding provisions of this section. Such a
presumption may be rebutted by a preponderance of the evidence. In considering the presumption for
purposes of this paragraph, a court shall weight all relevant factors, including but not limited to
whether the information submitted to the Attorney General was accurate and complete and whether it
was within the scope of the conduct specified in any request received by the Attorney General. The
Attorney General shall establish the procedure required by this paragraph in accordance with the
provisions of subchapter II of chapter 5 of Title 5 and that procedure shall be subject to the
provisions of chapter 7 of that title.

(2) Any document or other material which is provided to, received by, or prepared in the Department
of Justice or any other department or agency of the United States in connection with a request by
an issuer under the procedure established under paragraph

(1), shall be exempt from disclosure under section 552 of Title 5 and shall not, except with the
consent of the issuer, be made publicly available, regardless of whether the Attorney General
responds to such a request or the issuer withdraws such request before receiving a response.

(3) Any issuer who has made a request to the Attorney General under paragraph (1) may withdraw such
request prior to the time the Attorney General issues an opinion in response to such request. Any
request so withdrawn shall have no force or effect.

(4) The Attorney General shall, to the maximum extent practicable, provide timely guidance
concerning the Department of Justice’s present enforcement policy with respect to the preceding
provisions of this section to potential exporters and small businesses that are unable to obtain
specialized counsel on issues pertaining to such provisions. Such guidance shall be limited to
responses to requests under paragraph (1) concerning conformity of specified prospective conduct
with the Department of Justice’s present enforcement policy regarding the preceding provisions of
this section and general explanations of compliance responsibilities and of potential liabilities
under the preceding provisions of this section.

(f) Definitions

For purposes of this section:

	(1)	 	A) The term “foreign official” means any officer or employee of a foreign government or any
department, agency, or instrumentality thereof, or of a public international organization, or any
person acting in an official capacity for or on behalf of any such government or department, agency,
or instrumentality, or for or on behalf of any such public international organization.
	 
	(B)	 	For purposes of subparagraph (A), the term “public international organization” means—

	 	(i)	 	an organization that is
designated by Executive Order
pursuant to section 1 of the
International Organizations
Immunities Act (22 U.S.C. §
288); or

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	 	(ii)	 	any other international
organization that is
designated by the President
by Executive order for the
purposes of this section,
effective as of the date of
publication of such order in
the Federal Register.

	(2)	 	(A) A person’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if—

(i) such person is aware that such person is engaging in such conduct, that such circumstance exists, or that such
result is substantially certain to occur; or

(ii) such person has a firm belief that such circumstance exists or that such result is substantially certain to occur.

(B) When knowledge of the existence of a particular circumstance is required for
an offense, such knowledge is established if a person is aware of a high probability
of the existence of such circumstance, unless the person actually believes that such
circumstance does not exist.

	(3)	 	(A) The term “routine governmental action” means only an action which is ordinarily and commonly performed by a foreign official in—

(i) obtaining permits, licenses, or other official documents to
qualify a person to do business in a foreign country;

(ii) processing governmental papers, such as visas and work orders;

(iii) providing police protection, mail pick-up and delivery, or
scheduling inspections associated with contract performance or
inspections related to transit of goods across country;

(iv) providing phone service, power and water supply, loading and
unloading cargo, or protecting perishable products or commodities from
deterioration; or

(v) actions of a similar nature.

(B) The term “routine governmental action” does not include any decision by a foreign
official whether, or on what terms, to award new business to or to continue business
with a particular party, or any action taken by a foreign official involved in the
decision-making process to encourage a decision to award new business to or continue
business with a particular party.

(g) Alternative Jurisdiction

(1) It shall also be unlawful for any issuer organized under the laws of the United States,
or a State, territory, possession, or commonwealth of the United States or a political
subdivision thereof and which has a class of securities registered pursuant to section 12 of
this title or which is required to file reports under section 15(d) of this title, or for any
United States person that is an officer, director, employee, or agent of such issuer or a
stockholder thereof acting on behalf of such issuer, to corruptly do any act outside the
United States in furtherance of an offer, payment, promise to pay, or authorization of the
payment of any money, or offer, gift, promise to give, or authorization of the giving of
anything of value to any of the persons or entities set forth in paragraphs (1), (2), and (3)
of this subsection (a) of this section for the purposes set forth therein, irrespective of
whether such issuer or such officer, director, employee, agent, or stockholder makes use of
the mails or any means or instrumentality of interstate commerce in furtherance of such
offer, gift, payment, promise, or authorization.

(2) As used in this subsection, the term “United States person” means a national of the
United States (as defined in section 101 of the Immigration and Nationality Act (8 U.S.C. §
1101)) or any corporation, partnership, association, joint-stock company, business trust,
unincorporated organization, or sole proprietorship organized under the laws of the United
States or any State, territory, possession, or commonwealth of the United States, or any
political subdivision thereof.

§ 78dd-2. Prohibited foreign trade practices by domestic concerns

(a) Prohibition

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It shall be unlawful for any domestic concern, other than an issuer which is subject to section
78dd-1 of this title, or for any officer, director, employee, or agent of such domestic concern or
any stockholder thereof acting on behalf of such domestic concern, to make use of the mails or any
means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment,
promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or
authorization of the giving of anything of value to—

(1) any foreign official for purposes of—

(A) (i) influencing any act or decision of such foreign official in his official
capacity, (ii) inducing such foreign official to do or omit to do any act in violation
of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or
instrumentality thereof to affect or influence any act or decision of such government
or instrumentality,

in order to assist such domestic concern in obtaining or retaining business for or with, or
directing business to, any person;

(2) any foreign political party or official thereof or any candidate for foreign political office
for purposes of—

(A) (i) influencing any act or decision of such party, official, or candidate in its
or his official capacity, (ii) inducing such party, official, or candidate to do or
omit to do an act in violation of the lawful duty of such party, official, or
candidate, or (iii) securing any improper advantage; or

(B) inducing such party, official, or candidate to use its or his influence with a
foreign government or instrumentality thereof to affect or influence any act or
decision of such government or instrumentality,

in order to assist such domestic concern in obtaining or retaining business for or with, or
directing business to, any person;

(3) any person, while knowing that all or a portion of such money or thing of value will be
offered, given, or promised, directly or indirectly, to any foreign official, to any foreign
political party or official thereof, or to any candidate for foreign political office, for purposes
of—

(A) (i) influencing any act or decision of such foreign official, political party,
party official, or candidate in his or its official capacity, (ii) inducing such
foreign official, political party, party official, or candidate to do or omit to do
any act in violation of the lawful duty of such foreign official, political party,
party official, or candidate, or (iii) securing any improper advantage; or

(B) inducing such foreign official, political party, party official, or candidate to
use his or its influence with a foreign government or instrumentality thereof to
affect or influence any act or decision of such government or instrumentality,

in order to assist such domestic concern in obtaining or retaining business for or with, or
directing business to, any person.

(b) Exception for routine governmental action

Subsections (a) and (i) of this section shall not apply to any facilitating or expediting payment
to a foreign official, political party, or party official the purpose of which is to expedite or to
secure the performance of a routine governmental action by a foreign official, political party, or
party official.

(c) Affirmative defenses

It shall be an affirmative defense to actions under subsection (a) or (i) of this section that—

(1) the payment, gift, offer, or promise of anything of value that was made, was lawful under the
written laws and regulations of the foreign official’s, political party’s, party official’s, or
candidate’s country; or

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(2) the payment, gift, offer, or promise of anything of value that was made, was a reasonable and
bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign
official, party, party official, or candidate and was directly related to—

(A) the promotion, demonstration, or explanation of products or services; or

(B) the execution or performance of a contract with a foreign government or agency
thereof.

(d) Injunctive relief

(1) When it appears to the Attorney General that any domestic concern to which this section
applies, or officer, director, employee, agent, or stockholder thereof, is engaged, or about to
engage, in any act or practice constituting a violation of subsection (a) or (i) of this section,
the Attorney General may, in his discretion, bring a civil action in an appropriate district court
of the United States to enjoin such act or practice, and upon a proper showing, a permanent
injunction or a temporary restraining order shall be granted without bond.

(2) For the purpose of any civil investigation which, in the opinion of the Attorney General, is
necessary and proper to enforce this section, the Attorney General or his designee are empowered to
administer oaths and affirmations, subpoena witnesses, take evidence, and require the production of
any books, papers, or other documents which the Attorney General deems relevant or material to such
investigation. The attendance of witnesses and the production of documentary evidence may be
required from any place in the United States, or any territory, possession, or commonwealth of the
United States, at any designated place of hearing.

(3) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the Attorney
General may invoke the aid of any court of the United States within the jurisdiction of which such
investigation or proceeding is carried on, or where such person resides or carries on business, in
requiring the attendance and testimony of witnesses and the production of books, papers, or other
documents. Any such court may issue an order requiring such person to appear before the Attorney
General or his designee, there to produce records, if so ordered, or to give testimony touching the
matter under investigation. Any failure to obey such order of the court may be punished by such
court as a contempt thereof.

All process in any such case may be served in the judicial district in which such person resides or
may be found. The Attorney General may make such rules relating to civil investigations as may be
necessary or appropriate to implement the provisions of this subsection.

(e) Guidelines by Attorney General

Not later than 6 months after August 23, 1988, the Attorney General, after consultation with the
Securities and Exchange Commission, the Secretary of Commerce, the United States Trade
Representative, the Secretary of State, and the Secretary of the Treasury, and after obtaining the
views of all interested persons through public notice and comment procedures, shall determine to
what extent compliance with this section would be enhanced and the business community would be
assisted by further clarification of the preceding provisions of this section and may, based on
such determination and to the extent necessary and appropriate, issue—

(1) guidelines describing specific types of conduct, associated with common types of export sales
arrangements and business contracts, which for purposes of the Department of Justice’s present
enforcement policy, the Attorney General determines would be in conformance with the preceding
provisions of this section; and

(2) general precautionary procedures which domestic concerns may use on a voluntary basis to
conform their conduct to the Department of Justice’s present enforcement policy regarding the
preceding provisions of this section.

The Attorney General shall issue the guidelines and procedures referred to in the preceding
sentence in accordance with the provisions of subchapter II of chapter 5 of Title 5 and those
guidelines and procedures shall be subject to the provisions of chapter 7 of that title.

(f) Opinions of Attorney General

     (1) The Attorney General, after consultation with appropriate departments and agencies of the
United States and after obtaining the views of all interested persons through public notice and
comment procedures, shall establish a procedure to provide responses to specific inquiries by
domestic concerns concerning conformance of their conduct with the Department of Justice’s present
enforcement policy regarding the preceding provisions of this section. The Attorney General shall,
within 30 days after receiving such

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a request, issue an opinion in response to that request. The
opinion shall state whether or not certain specified prospective conduct would, for purposes of the
Department of Justice’s present enforcement policy, violate the preceding provisions of this
section. Additional requests for opinions may be filed with the Attorney General regarding other
specified prospective conduct that is beyond the scope of conduct specified in previous requests.
In any action brought under the applicable provisions of this section, there shall be a rebuttable
presumption that conduct, which is specified in a request by a domestic concern and for which the
Attorney General has issued an opinion that such conduct is in conformity with the Department of
Justice’s present enforcement policy, is in compliance with the preceding provisions of this
section. Such a presumption may be rebutted by a preponderance of the evidence. In considering the
presumption for purposes of this paragraph, a court shall weigh all relevant factors, including but
not limited to whether the information submitted to the Attorney General was accurate and complete
and whether it was within the scope of the conduct specified in any request received by the
Attorney General. The Attorney General shall establish the procedure required by this paragraph in
accordance with the provisions of subchapter II of chapter 5 of Title 5 and that procedure shall be
subject to the provisions of chapter 7 of that title.

(2) Any document or other material which is provided to, received by, or prepared in the Department
of Justice or any other department or agency of the United States in connection with a request by a
domestic concern under the procedure established under paragraph (1), shall be exempt from
disclosure under section 552 of Title 5 and shall not, except with the consent of the domestic
concern, by made publicly available, regardless of whether the Attorney General response to such a
request or the domestic concern withdraws such request before receiving a response.

(3) Any domestic concern who has made a request to the Attorney General under paragraph (1) may
withdraw such request prior to the time the Attorney General issues an opinion in response to such
request. Any request so withdrawn shall have no force or effect.

(4) The Attorney General shall, to the maximum extent practicable, provide timely guidance
concerning the Department of Justice’s present enforcement policy with respect to the preceding
provisions of this section to potential exporters and small businesses that are unable to obtain
specialized counsel on issues pertaining to such provisions. Such guidance shall be limited to
responses to requests under paragraph (1) concerning conformity of specified prospective conduct
with the Department of Justice’s present enforcement policy regarding the preceding provisions of
this section and general explanations of compliance responsibilities and of potential liabilities
under the preceding provisions of this section.

(g) Penalties

	(1)	 	(A) Any domestic concern that is not a natural person and that
violates subsection (a) or (i) of this section shall be fined not more
than $2,000,000.

(B) Any domestic concern that is not a natural person and that
violates subsection (a) or (i) of this section shall be subject to a
civil penalty of not more than $10,000 imposed in an action brought by
the Attorney General.

	(2)	 	(A) Any natural person that is an officer, director, employee, or
agent of a domestic concern, or stockholder acting on behalf of such
domestic concern, who willfully violates subsection (a) or (i) of this
section shall be fined not more than $100,000 or imprisoned not more
than 5 years, or both.

(B) Any natural person that is an officer, director, employee, or
agent of a domestic concern, or stockholder acting on behalf of such
domestic concern, who violates subsection (a) or (i) of this section
shall be subject to a civil penalty of not more than $10,000 imposed
in an action brought by the Attorney General.

	(3)	 	Whenever a fine is imposed under paragraph (2) upon any officer,
director, employee, agent, or stockholder of a domestic concern, such
fine may not be paid, directly or indirectly, by such domestic
concern.

(h) Definitions

For purposes of this section:

	(1)	 	The term “domestic concern” means—

     (A) any individual who is a citizen, national, or resident of the United States;
and

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(B) any corporation, partnership, association, joint-stock company, business trust,
unincorporated organization, or sole proprietorship which has its principal place of
business in the United States, or which is organized under the laws of a State of the
United States or a territory, possession, or commonwealth of the United States.

	(2)	 	(A) The term “foreign official” means any officer or employee of a foreign government or
any department, agency, or instrumentality thereof, or of a public international
organization, or any person acting in an official capacity for or on behalf of any such
government or department, agency, or instrumentality, or for or on behalf of any such
public international organization.

(B) For purposes of subparagraph (A), the term “public international organization” means —

(i) an organization that has been designated by Executive order pursuant to
Section 1 of the International Organizations Immunities Act (22 U.S.C. § 288); or

(ii)any other international organization that is designated by the President by
Executive order for the purposes of this section, effective as of the date of
publication of such order in the Federal Register.

	(3)	 	(A) A person’s state of mind is “knowing” with respect to conduct, a circumstance, or a result if—

(i) such person is aware that such person is engaging in such conduct, that such
circumstance exists, or that such result is substantially certain to occur; or

(ii) such person has a firm belief that such circumstance exists or that such result
is substantially certain to occur.

(B) When knowledge of the existence of a particular circumstance is required for an offense,
such knowledge is established if a person is aware of a high probability of the existence of
such circumstance, unless the person actually believes that such circumstance does not exist.

	(4)	 	(A) The term “routine governmental action“means only an action which
is ordinarily and commonly performed by a foreign official in—

(i) obtaining permits, licenses, or other official documents to
qualify a person to do business in a foreign country;

(ii) processing governmental papers, such as visas and work orders;

(iii) providing police protection, mail pick-up and delivery, or
scheduling inspections associated with contract performance or
inspections related to transit of goods across country;

(iv) providing phone service, power and water supply, loading and
unloading cargo, or protecting perishable products or commodities from
deterioration; or

(v) actions of a similar nature.

(B) The term “routine governmental action” does not include any decision by a foreign
official whether, or on what terms, to award new business to or to continue business with a
particular party, or any action taken by a foreign official involved in the decision-making
process to encourage a decision to award new business to or continue business with a
particular party.

(5) The term “interstate commerce“means trade, commerce, transportation, or communication among the
several States, or between any foreign country and any State or between any State and any place or
ship outside thereof, and such term includes the intrastate use of—

(A) a telephone or other interstate means of communication, or

(B) any other interstate instrumentality.

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(i) Alternative Jurisdiction

	(1)	 	It shall also be unlawful for any United States person to corruptly do
any act outside the United States in furtherance of an offer, payment,
promise to pay, or authorization of the payment of any money, or
offer, gift, promise to give, or authorization of the giving of
anything of value to any of the persons or entities set forth in
paragraphs (1), (2), and (3) of subsection (a), for the purposes set
forth therein, irrespective of whether such United States person makes
use of the mails or any means or instrumentality of interstate
commerce in furtherance of such offer, gift, payment, promise, or
authorization.
	 
	(2)	 	As used in this subsection, a “United States person“means a national
of the United States (as defined in section 101 of the Immigration and
Nationality Act (8 U.S.C. § 1101)) or any corporation, partnership,
association, joint-stock company, business trust, unincorporated
organization, or sole proprietorship organized under the laws of the
United States or any State, territory, possession, or commonwealth of
the United States, or any political subdivision thereof.

§ 78dd-3. Prohibited foreign trade practices by persons other than issuers or domestic concerns

(a) Prohibition

It shall be unlawful for any person other than an issuer that is subject to section 30A of the
Securities Exchange Act of 1934 or a domestic concern, as defined in section 104 of this Act), or
for any officer, director, employee, or agent of such person or any stockholder thereof acting on
behalf of such person, while in the territory of the United States, corruptly to make use of the
mails or any means or instrumentality of interstate commerce or to do any other act in furtherance
of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift,
promise to give, or authorization of the giving of anything of value to—

(1) any foreign official for purposes of—

(A) (i) influencing any act or decision of such foreign official in his official
capacity, (ii) inducing such foreign official to do or omit to do any act in violation
of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or
instrumentality thereof to affect or influence any act or decision of such government
or instrumentality,

in order to assist such person in obtaining or retaining business for or with, or directing
business to, any person;

(2) any foreign political party or official thereof or any candidate for foreign political office
for purposes of—

(A) (i) influencing any act or decision of such party, official, or candidate in its
or his official capacity, (ii) inducing such party, official, or candidate to do or
omit to do an act in violation of the lawful duty of such party, official, or
candidate, or (iii) securing any improper advantage; or

(B) inducing such party, official, or candidate to use its or his influence with a
foreign government or instrumentality thereof to affect or influence any act or
decision of such government or instrumentality.

in order to assist such person in obtaining or retaining business for or with, or directing
business to, any person; or

(3) any person, while knowing that all or a portion of such money or thing of value will be
offered, given, or promised, directly or indirectly, to any foreign official, to any foreign
political party or official thereof, or to any candidate for foreign political office, for purposes
of—

(A) (i) influencing any act or decision of such foreign official, political party,
party official, or candidate in his or its official capacity, (ii) inducing such
foreign official, political party, party official, or candidate to do or omit to do
any act in violation of the lawful duty of such foreign official, political party,
party official, or candidate, or (iii) securing any improper advantage; or

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(B) inducing such foreign official, political party, party official, or candidate to
use his or its influence with a foreign government or instrumentality thereof to
affect or influence any act or decision of such government or instrumentality,

in order to assist such person in obtaining or retaining business for or with, or directing
business to, any person.

(b) Exception for routine governmental action

Subsection (a) of this section shall not apply to any facilitating or expediting payment to a
foreign official, political party, or party official the purpose of which is to expedite or to
secure the performance of a routine governmental action by a foreign official, political party, or
party official.

(c) Affirmative defenses

It shall be an affirmative defense to actions under subsection (a) of this section that—

(1) the payment, gift, offer, or promise of anything of value that was made, was lawful under the
written laws and regulations of the foreign official’s, political party’s, party official’s, or
candidate’s country; or

(2) the payment, gift, offer, or promise of anything of value that was made, was a reasonable and
bona fide expenditure, such as travel and lodging expenses, incurred by or on behalf of a foreign
official, party, party official, or candidate and was directly related to—

(A) the promotion, demonstration, or explanation of products or services; or

(B) the execution or performance of a contract with a foreign government or agency
thereof.

(d) Injunctive relief

(1) When it appears to the Attorney General that any person to which this section applies, or
officer, director, employee, agent, or stockholder thereof, is engaged, or about to engage, in any
act or practice constituting a violation of subsection (a) of this section, the Attorney General
may, in his discretion, bring a civil action in an appropriate district court of the United States
to enjoin such act or practice, and upon a proper showing, a permanent injunction or a temporary
restraining order shall be granted without bond.

(2) For the purpose of any civil investigation which, in the opinion of the Attorney General, is
necessary and proper to enforce this section, the Attorney General or his designee are empowered to
administer oaths and affirmations, subpoena witnesses, take evidence, and require the production of
any books, papers, or other documents which the Attorney General deems relevant or material to such
investigation. The attendance of witnesses and the production of documentary evidence may be
required from any place in the United States, or any territory, possession, or commonwealth of the
United States, at any designated place of hearing.

(3) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the Attorney
General may invoke the aid of any court of the United States within the jurisdiction of which such
investigation or proceeding is carried on, or where such person resides or carries on business, in
requiring the attendance and testimony of witnesses and the production of books, papers, or other
documents. Any such court may issue an order requiring such person to appear before the Attorney
General or his designee, there to produce records, if so ordered, or to give testimony touching the
matter under investigation. Any failure to obey such order of the court may be punished by such
court as a contempt thereof.

(4) All process in any such case may be served in the judicial district in which such person
resides or may be found. The Attorney General may make such rules relating to civil investigations
as may be necessary or appropriate to implement the provisions of this subsection.

(e) Penalties

	(1)	 	(A) Any juridical person that violates subsection (a) of this section shall be fined not more than $2,000,000.

(B) Any juridical person that violates subsection (a) of this section shall be subject to a civil penalty of
not more than $10,000 imposed in an action brought by the Attorney General.

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	(2)	 	(A) Any natural person who willfully violates subsection (a) of this section shall be fined not more than
$100,000 or imprisoned not more than 5 years, or both.

(B) Any natural person who violates subsection (a) of this section shall be subject to a civil penalty of not
more than $10,000 imposed in an action brought by the Attorney General.

	(3)	 	Whenever a fine is imposed under paragraph (2) upon any officer, director, employee, agent, or stockholder of
a person, such fine may not be paid, directly or indirectly, by such person.

(f) Definitions

For purposes of this section:

	(1)	 	The term “person,” when referring to an offender, means any natural person other than a. national of the United States (as defined in 8 U.S.C. § 1101) or any corporation, partnership,
association, joint-stock company, business trust, unincorporated organization, or sole proprietorship organized under the law of a foreign nation or a political subdivision thereof
	 
	(2)	 	(A) The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any
person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.
	 
	 	 	For purposes of subparagraph (A), the term “public international organization” means —

	 	(i)	 	an organization that has been designated by Executive Order pursuant to Section 1 of the International
Organizations Immunities Act (22 U.S.C. § 288); or
	 
	 	(ii)	 	any other international organization that is designated by the President by Executive order for the purposes of
this section, effective as of the date of publication of such order in the Federal Register.

	(3)	 	(A) A person’s state of mind is “knowing“with respect to conduct, a circumstance, or a result if —

	 	(i)	 	such person is aware that such person is engaging in such conduct, that such circumstance exists, or that such
result is substantially certain to occur; or
	 
	 	(ii)	 	such person has a firm belief that such circumstance exists or that such result is substantially certain to occur.

(B) When knowledge of the existence of a particular circumstance is required for
an offense, such knowledge is established if a person is aware of a high probability
of the existence of such circumstance, unless the person actually believes that such
circumstance does not exist.

	(4)	 	(A) The term “routine governmental action“means only an action which is ordinarily and commonly performed by a foreign official in—

	 	(i)	 	obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country;
	 
	 	(ii)	 	processing governmental papers, such as visas and work orders;
	 
	 	(iii)	 	providing police protection, mail pick-up and delivery, or scheduling inspections associated with contract
performance or inspections related to transit of goods across country;
	 
	 	(iv)	 	providing phone service, power and water supply, loading and unloading cargo, or protecting perishable products
or commodities from deterioration; or
	 
	 	(v)	 	actions of a similar nature.

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(B) The term “routine governmental action” does not include any decision by a
foreign official whether, or on what terms, to award new business to or to continue
business with a particular party, or any action taken by a foreign official involved
in the decision-making process to encourage a decision to award new business to or
continue business with a particular party.

(5) The term “interstate commerce” means trade, commerce, transportation, or communication among
the several States, or between any foreign country and any State or between any State and any place
or ship outside thereof, and such term includes the intrastate use of —

(A) a telephone or other interstate means of communication, or

(B) any other interstate instrumentality.

§ 78ff. Penalties

(a) Willful violations; false and misleading statements

Any person who willfully violates any provision of this chapter (other than section 78dd-1 of this
title), or any rule or regulation thereunder the violation of which is made unlawful or the
observance of which is required under the terms of this chapter, or any person who willfully and
knowingly makes, or causes to be made, any statement in any application, report, or document
required to be filed under this chapter or any rule or regulation thereunder or any undertaking
contained in a registration statement as provided in
subsection (d) of section 78o of this title, or by any self-regulatory organization in connection
with an application for membership or participation therein or to become associated with a member
thereof, which statement was false or misleading with respect to any material fact, shall upon
conviction be fined not more than $5,000,000, or imprisoned not more than 20 years, or both, except
that when such person is a person other than a natural person, a fine not exceeding $25,000,000 may
be imposed; but no person shall be subject to imprisonment under this section for the violation of
any rule or regulation if he proves that he had no knowledge of such rule or regulation.

(b) Failure to file information, documents, or reports

Any issuer which fails to file information, documents, or reports required to be filed under
subsection (d) of section 78o of this title or any rule or regulation thereunder shall forfeit to
the United States the sum of $100 for each and every day such failure to file shall continue. Such
forfeiture, which shall be in lieu of any criminal penalty for such failure to file which might be
deemed to arise under subsection (a) of this section, shall be payable into the Treasury of the
United States and shall be recoverable in a civil suit in the name of the United States.

(c) Violations by issuers, officers, directors, stockholders, employees, or agents of issuers

	(1)	 	(A) Any issuer that violates subsection (a) or (g) of section 30A of
this title [15 U.S.C. § 78dd-1] shall be fined not more than
$2,000,000.
(B) Any issuer that violates subsection (a) or (g) of section 30A of
this title [15 U.S.C. § 78dd-1] shall be subject to a civil penalty of
not more than $10,000 imposed in an action brought by the Commission.
	 
	(2)	 	(A) Any officer, director, employee, or agent of an issuer, or
stockholder acting on behalf of such issuer, who willfully violates
subsection (a) or (g) of section 30A of this title [15 U.S.C. §
78dd-1] shall be fined not more than $100,000, or imprisoned not more
than 5 years, or both.
(B) Any officer, director, employee, or agent of an issuer, or
stockholder acting on behalf of such issuer, who violates subsection
(a) or (g) of section 30A of this title [15 U.S.C. § 78dd-1] shall be
subject to a civil penalty of not more than $10,000 imposed in an
action brought by the Commission.

	(3)	 	Whenever a fine is imposed under paragraph (2) upon any officer, director, employee,
agent, or stockholder of an issuer, such fine may not be paid, directly or indirectly, by such
issuer.

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Exhibit 10.2

[Execution Copy]

CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE

     THIS CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made and
entered into this 31st day of August, 2007 (the “Agreement Date”), between Umesh Padval
(the “Employee”) and LSI Corporation (together with its predecessors and its successors and
assigns, the “Company”).

W I T N E S S E T H:

     WHEREAS, the Employee is currently employed by the Company;

     WHEREAS, the Company and the Employee (the “Parties”) desire to set forth the terms on which
the Employee is leaving his employment with the Company; and

     WHEREAS, the Parties have negotiated and agreed to a final confidential settlement of their
respective rights, obligations and liabilities;

     NOW THEREFORE, in consideration of the promises and covenants contained in this Agreement, the
Parties agree as follows:

     1. Resignation. The Employee acknowledges and agrees that, effective as of August 31,
2007 (the “Status Change Date”), the Employee hereby resigns all of his positions with the Company
(including, but not limited to, his status as an Executive Vice President of the Company), and any
other positions (including directorships) with other entities that are affiliated with the Company,
other than his position as a Technical Consultant, as described in Section 2 below. The Employee
agrees to execute any documents that may be necessary or appropriate to effect or to memorialize
any resignations from the Company or its affiliates contemplated by this Agreement, including the
letter of resignation in the form attached hereto as Annex A concurrent herewith.
Until the Status Change Date, the Employee shall continue to devote his skills and abilities to the
Company on a full time regular basis. Notwithstanding any of the terms of this Agreement, the
Employee remains an “at will” employee for all purposes.

     2. Change In Status. From and after the Status Change Date, all compensation and
benefits shall cease, except for those specifically listed in this Section 2. The Employee’s
position with the Company, including all compensation and eligibility for benefits (other than
post-termination benefits specifically described herein), shall terminate on March 31, 2008 (the
“Termination Date”).

     2.1 Position. The Employee will remain an employee of the Company until such
time as his employment terminates on the Termination Date. The Employee’s job title, as of
the Status Change Date, will be “Technical Consultant.” In this position, the Employee
will be required to provide technical consulting to the Company on an as-needed basis. The
Employee’s position as Technical Consultant, and any other position with the Company, will
terminate as of the Termination Date. During the Employee’s tenure as a Technical
Consultant from the Status Change Date until the Termination Date, the Employee shall be
paid monthly salary of $15,000.00, paid every two weeks, less any and all statutory
withholding and deductions as may be required by law or as authorized by the Employee (the
gross amount being the “Continuation Salary”).

     2.2 Separation Bonus; Vacation Payment. Within thirty
(30) days of the Status Change Date, the Company agrees to pay the Employee
(a) a separation bonus in an amount equal to $250,000.00, and (b) all accrued
and unused vacation through the Status Change Date
less any and all statutory withholding and deductions as may be
required by law or as authorized by the Employee.

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[Execution Copy]

     2.3 Stock Rights. The Employee will not be eligible to receive any further
stock option or restricted stock unit grants after the Status Change Date. However,
existing stock option and restricted stock unit grants will continue to vest, until the
Termination Date, as described in Section 3, below.

     2.4 Benefit Plans. The Employee and the Employee’s dependents shall continue
to be covered by the Company’s group benefit plans (e.g., medical, dental, vision care, and
life insurance), at the Company’s expense, except for the employee-paid portion of such
premiums, until the last day of the month in which the Termination Date falls, to the same
extent the Employee and the Employee’s dependents were covered by said plans as of the
Agreement Date. If the Employee desires to continue coverage, pursuant to COBRA, after the
Termination Date, the Employee may do so at the Employee’s own expense. The Employee
understands and agrees that he must complete a COBRA application in order to receive the
extension of health benefits beyond the Termination Date.

     2.5 Incentive Bonus Plans and Other Benefits. The Employee will no longer be
eligible to participate in any bonus program after the Status Change Date. The Employee
will not be entitled to any other compensation or benefits after the Status Change Date,
other than what is specifically set forth in this Section 2. The Employee’s car allowance,
if any, and vacation accrual will be terminated effective as of the Status Change Date.

     3. Outstanding Stock Rights. The Employee acknowledges that he holds the stock
options and restricted stock units (the “Stock Rights”) set forth on Annex B
attached hereto and incorporated herein by this reference. The Employee acknowledges and agrees
that he has no other options, stock units, or other rights received from the Company to purchase
any stock or securities of the Company or any affiliate thereof (collectively, the “Issuers”). The
Employee’s outstanding Stock Rights will continue to vest through the Termination Date. Any vested
stock options must be exercised within 90 days of the Termination Date. The Employee understands
and agrees that all Stock Rights which have not vested on or before the Termination Date will
expire on the Termination Date, and vested stock options not exercised within 90 days of the
Termination Date will expire on the 91st day following the Termination Date. The Employee
acknowledges and agrees that he does not enter into this Agreement on the basis of or in reliance
in any way on any representation or assurance of any Issuer or any officer, director, employee or
agent of any Issuer regarding the current or future value of his Stock Rights or of any stock or
securities of any Issuer.

     4. Outplacement Services. The Employee shall have the option to use the outplacement
services provided by Lee Hecht Harrison (or similar provider), at the Company’s expense, for a
period of six (6) months, at a cost to the Company not to exceed $10,000, provided that the
Employee initiates the use of such services within ninety (90) days of the Termination Date.

     5. Release.

     (a) The Employee, for himself, and his heirs, executors, administrators, assigns, successors,
agents, and representatives, hereby irrevocably and unconditionally releases and forever discharges
the Company, and each and all of its heirs, executors, administrators, successors, assigns,
predecessors, owners, shareholders, agents, representatives, employees, consultants, insurers,
officers, directors, attorneys, affiliates, partners, and corporate parents, subsidiaries, and
divisions (referred to herein collectively as the “Related Entities”) from any and all liabilities,
claims, demands, contracts, debts, obligations and causes of action of every nature, character and
description, past, present, and future, known or unknown, vested or contingent,
ascertained or unascertained, suspected or unsuspected, existing or claimed to exist, in law,
admiralty, or equity, under any theory of the law, whether common, constitutional, statutory, or
otherwise, in any jurisdiction, foreign or domestic, which the Employee now owns or holds, or has
at any time heretofore owned or held, by reason of any matter, cause or thing occurred, done,
omitted or suffered to be done from the beginning of the world to the day of the Agreement Date,
including, without limitation, (i) the Employee’s employment relationship with the Company (or any
Related

Page 2 of 7

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[Execution Copy]

Entity), including employment through the Termination Date; and (ii) the termination of the
Employee’s employment with the Company (or any Related Entity), including the Employee’s
resignation as a vice president of the Company.

     (b) The Employee acknowledges that the release contained in this Agreement includes, but is
not limited to, a release of all claims the Employee may have under all state, federal and local
laws pertaining to discrimination, harassment, the California or other applicable state Labor Code,
family and medical leave laws, wage and hour laws, disability laws, civil rights laws, as well as
laws pertaining to claims of or for emotional distress, defamation, breach of contract, breach of
the covenant of good faith and fair dealing, as well as equal pay laws and laws pertaining to
wrongful discharge, including, without limitation, the Equal Pay Act, the Occupational Safety and
Health Act, Title VII of the Civil Rights Act of 1964, Sections 1981 through 1988 of the Civil
Rights Act of 1866, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967,
the Americans with Disabilities Act, the Fair Labor Standards Act and its state and local
counterparts, claims of discrimination under the Employee Retirement Income Security Act, the
Worker Adjustment and Retraining Notification Act, the Older Workers Benefit Protection Act, the
Family and Medical Leave Act, the Rehabilitation Act of 1973, Executive Order 11246 and any other
executive order, the Uniform Services Employment and Reemployment Rights Act, the Immigration
Reform Control Act , the California Family Rights Act, and the California Fair Employment and
Housing Act, all as amended. It is expressly understood by the Employee that among the various
rights and claims being waived in this release are those arising under the Age Discrimination in
Employment Act of 1967. The Employee understands that rights or claims under this law that may
arise after the date this Agreement is executed by him are not waived. The Employee also
understands that nothing in this Agreement is to be construed to interfere with the Employee’s
ability to file a charge with the Equal Employment Opportunity Commission concerning this Agreement
or any conduct released herein, but the Employee acknowledges that by this Agreement he waives any
ability to further collect, directly or indirectly, any monetary or non-monetary award based on any
conduct or omissions against the Company or any of the Related Entities.

     (c) The Employee understands and agrees that if, hereafter, the Employee discovers facts
different from or in addition to those which the Employee now knows or believes to be true, that
the waivers and releases of this Agreement shall be and remain effective in all respects
notwithstanding such different or additional facts or the discovery of such fact. The Employee
further agrees that the Employee fully and forever waives any and all rights and benefits conferred
upon the Employee by the provisions of Section 1542 of the Civil Code of the State of California,
or any other similar federal, state, or local law, which states as follows (parentheticals added):

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR (i.e., THE
EMPLOYEE) DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR (i.e., THE COMPANY).”

     (e) The provisions of this Section 5 shall survive the termination or expiration of this
Agreement for any reason.

     6. Restrictive Covenants; Confidentiality and Return of Company Property.

     (a) Until March 31, 2008, the Employee shall not, without the prior written consent of the
Company’s Chief Executive Officer, (i) directly or indirectly solicit (or encourage any company or
business organization in which the Employee is an officer, employee, partner, director, consultant
or member of a technical advisory board to solicit or employ) or (ii) refer to any employee search
firms, any person who was employed by the Company as of the date hereof.

     (b) Until March 31, 2008, the Employee shall not, without the prior written consent of the
Company’s Chief Executive Officer, at any time or for any reason, anywhere in the world, directly
or

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[Execution Copy]

indirectly (i) engage in any business or activity, whether as an employee, consultant, partner,
principal, agent, representative, stockholder (except as a holder of less than 5% of the combined
voting power of the outstanding stock of a publicly held company) or in any other individual,
corporate or representative capacity, or render any services or provide any advice to any business,
activity, person or entity, if the Employee knows or reasonably should know that such business,
activity, service, person or entity, directly or indirectly, competes in any material manner with
the Company’s business as constituted on the date hereof, or (ii) meaningfully assist, help or
otherwise support any person, business, corporation, partnership or other entity or activity,
whether as an employee, consultant, partner, principal, agent, representative, stockholder (other
than in the capacity as a stockholder of less than 5% of the combined voting power of the
outstanding shares of stock of a publicly held company) or in any other individual, corporate or
representative capacity, to create, commence or otherwise initiate, or to develop, enhance or
otherwise further, any business or activity if you know or reasonably should know that such
business, activity, service, person or entity, directly or indirectly, competes in any material
manner with the Company’s business as constituted on the date hereof. For the purposes of this
Agreement, the Company’s competitors shall be those companies listed in the “Competition” section
of the Company’s Form 10-K for the fiscal year ended December 31, 2006.

     (c) If at any time the Employee violates the provisions above, any amounts remaining unpaid as
set forth in this Agreement as well as any benefits provided for in this Agreement (other than
those from qualified retirement or welfare plans) and any continuing vesting of stock options or
restricted stock units, if any, shall immediately be forfeited and terminated, and any amounts
already paid to the Employee in accordance with this Agreement, except for the sum of One Thousand
Dollars ($1,000) shall, at the Company’s sole discretion, be required to be repaid by the Employee
to the Company within ten (10) business days of the Company’s request in writing therefore. This
provision shall not affect the Company’s right to otherwise specifically enforce any provision
relating to non-solicitation or non-competition that is in this Agreement or in any other
agreement, document or plan applicable to the Employee.

     (d) The Employee acknowledges, agrees, and warrants that he will continue to maintain the
confidentiality of all confidential and proprietary information of the Company and third parties,
and shall abide by the terms and conditions of the Employee Invention and Confidential Information
Agreement entered into between the Employee and the Company.

     (e) The Employee represents and warrants that to the best of his knowledge and belief he has
returned to the Company all tangible and intangible property of the Company in his possession,
custody, or control. In addition, notwithstanding the foregoing representation and warranty, if
the Employee discovers he has retained any property of the Company, he shall promptly notify the
Company thereof and take reasonable steps in accordance with the Company’s instructions to return
such property to the Company. The provisions of this Section 6 shall survive the expiration or
termination, for any reason, of this Agreement.

     7. Governing Law. This Agreement is entered into in the State of California and shall
be construed and interpreted in accordance with the laws of the State of California, excluding any
conflicts or choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive law of any other jurisdiction.

     8. Confidentiality of this Agreement. The Employee warrants and agrees, absolutely
and unconditionally, that, absent the compulsion of legal process, he will keep the existence of
this Agreement and the terms hereof, including, without limitation, the amount of money and
consideration he is receiving, completely confidential, and that he has done so; provided, however,
that the Employee may disclose the existence of this Agreement and its terms, in confidence, to his
spouse and his attorneys, accountants, or other professional advisors who have a legitimate need to
know the information contained herein.

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[Execution Copy]

     9. Further Actions. The Employee, for himself, and his heirs, executors,
administrators, assigns and successors, covenants not to sue or otherwise institute or cause to be
instituted or in any way actively participate in or voluntarily assist in (except at the Company’s
request or as provided by law) the prosecution of any legal or administrative proceedings against
the Company and/or any of the Related Entities with respect to any matter arising out of or
relating to any liabilities, claims, demands, contracts, debts, obligations and causes of action
released hereunder.

     10. No Admission of Liability. The Employee and the Company both acknowledge and
agree that this is a compromise settlement of the hereinabove mentioned dealings and disputes,
which is not in any respect to be deemed, construed, or treated as an admission or a concession of
any liability or wrongdoing whatsoever by either party for any purpose whatsoever.

     11. Non-Disparagement. The Employee and the Company agree that, in the future,
neither will make any disparaging or defamatory remarks about the other or any of the Related
Entities.

     12. Severability. If any term, clause or provision of this Agreement is construed to
be or adjudged invalid, void or unenforceable, such term, clause or provision will be construed as
severed from this Agreement, and the remaining terms, clauses and provisions will remain in full
force and effect.

     13. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered will be deemed to be an original and all of which taken
together will constitute one and the same instrument.

     14. Entire Agreement. This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof and supersedes any and all prior, contemporaneous
or subsequent statements, representations, agreements or understandings, whether oral or written,
between the parties with respect hereto. This Agreement shall inure to the benefit of the
executors, administrators, heirs, successors and assigns of the parties hereto. The terms of this
Agreement may only be modified by a written instrument signed by the Employee and an authorized
officer of the Company.

     15. Execution. For this Agreement to be effective, the Employee must sign and date it
on the last page hereof, and return the executed original to the undersigned representative of the
Company, no later than the close of business on the date twenty-one (21) days after the Agreement
Date, or this Agreement will be deemed rescinded by the Company, and thereafter void for all
purposes.

     16. Rescission Period. The Employee understands that he has a full seven (7) days
following his execution and delivery of this Agreement to the Company to revoke his consent to this
Agreement by notifying the undersigned representative of the Company, of such revocation, in
writing, within that seven-day period. This Agreement shall not be effective or enforceable until
the seven-day revocation period has expired (the “Effective Date”). In the event that the Employee
revokes this Agreement prior to the Effective Date, the Agreement shall be deemed void and neither
party shall have any obligation hereunder, including the Company’s obligation to pay the
amounts described herein.

     17. Notices. All notices, requests, demands, and other communications called for
hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered
personally, (b) one day after being sent overnight by a well established commercial overnight
service, or (c) four days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:

Page 5 of 7

LSI Corporation Confidential

 

 

[Execution Copy]

	 	 	 	 	 
	 

	 	To the Company:
	 	LSI Corporation
	 

	 	 	 	1110 American Parkway NE
	 

	 	 	 	Allentown, PA 18109
	 

	 	 	 	Attn: General Counsel
	 
	 	 	 	 
	 

	 	To the Employee:
	 	Umesh Padval
	 

	 	 	 	1370 Corrine Lane
	 

	 	 	 	Menlo Park, CA 94025

     18. Opportunity to Consult Counsel. The Employee hereby acknowledges that he has read
and understands the foregoing Agreement and is being given the opportunity to consider this
Agreement for up to a full twenty-one (21) days from his receipt of this Agreement. The Employee
is advised to consult with an attorney of his own choosing before signing this Agreement. The
Employee may execute this Agreement at any time prior to the expiration of the 21-day period and
that if he does so, he does so voluntarily, without any threat or coercion from anyone, knowing
that he is waiving his statutory right to consider this Agreement for a full twenty-one (21) days.

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[Execution Copy]

BY SIGNING AND DELIVERING THIS AGREEMENT, THE EMPLOYEE STATES:

     a. HE HAS READ IT AND UNDERSTANDS IT AND HAS AT LEAST 21 DAYS TO CONSIDER IT AND A PERIOD OF
SEVEN DAYS AFTER EXECUTING IT TO REVOKE IT;

     b. HE AGREES WITH IT AND IS AWARE THAT HE IS GIVING UP IMPORTANT RIGHTS, INCLUDING RIGHTS
PROVIDED BY THE OLDER WORKERS BENEFIT PROTECTION ACT, FOR CONSIDERATION TO WHICH HE WAS NOT ALREADY
OTHERWISE ENTITLED;

     c. HE WAS ADVISED TO, AND IS AWARE OF HIS RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING IT;
AND

     d. HE HAS SIGNED IT KNOWINGLY AND VOLUNTARILY.

     IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first written above.

	 	 	 	 	 	 	 
	 	 	LSI CORPORATION,

a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	/s/ Umesh Padval
 

          UMESH PADVAL

	 	By:
	 	/s/ Jon R. Gibson
 

JON R. GIBSON
	 	 
	 

	 	 	 	Vice President, Human Resources	 	 

Date: August 29, 2007

Page 7 of 7

LSI Corporation Confidential

 

 

Annex A

July __, 2007

To Whom It May Concern:

Effective as of the date hereof, I hereby resign all positions I hold as an officer or director of
LSI Corporation and any of its subsidiaries or affiliates, including any such positions or
directorships that may be listed on any appendix to this letter.

Very truly yours,

Umesh Padval

Annex A — Page 1 of 1

LSI Corporation Confidential

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