Document:

Exhibit 10.1

Execution Copy

INTELLECTUAL
PROPERTY TRANSFER AGREEMENT

BY AND BETWEEN

ATRITECH, INC.

AND

EV3 ENDOVASCULAR, INC.

JUNE 15, 2007

TABLE OF
CONTENTS

	
   ARTICLE
  I. TRANSFER OF INTELLECTUAL PROPERTY; ASSUMPTION OF LIABILITIES

  	
   

  	
  1

  
	
  1.01.

  	
   

  	
  Transfer of Intellectual Property

  	
   

  	
  1

  
	
  1.02.

  	
   

  	
  Excluded Intellectual Property

  	
   

  	
  2

  
	
  1.03.

  	
   

  	
  Assumption of Liabilities

  	
   

  	
  3

  
	
  1.04.

  	
   

  	
  Excluded Liabilities

  	
   

  	
  3

  
	
  ARTICLE II. PURCHASE PRICE

  	
   

  	
  4

  
	
  2.01.

  	
   

  	
  Amount

  	
   

  	
  4

  
	
  ARTICLE III. CLOSING

  	
   

  	
  4

  
	
  3.01.

  	
   

  	
  Closing

  	
   

  	
  4

  
	
  3.02.

  	
   

  	
  General Procedure

  	
   

  	
  4

  
	
  ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER

  	
   

  	
  4

  
	
  4.01.

  	
   

  	
  Incorporation and Corporate Power

  	
   

  	
  5

  
	
  4.02.

  	
   

  	
  Execution, Delivery; Valid and Binding Agreement

  	
   

  	
  5

  
	
  4.03.

  	
   

  	
  Authority; No Breach

  	
   

  	
  5

  
	
  4.04.

  	
   

  	
  Governmental Authorities; Consents

  	
   

  	
  5

  
	
  4.05.

  	
   

  	
  No Material Adverse Changes

  	
   

  	
  6

  
	
  4.06.

  	
   

  	
  Title to Transferred Intellectual Property

  	
   

  	
  6

  
	
  4.07.

  	
   

  	
  Tax Matters

  	
   

  	
  6

  
	
  4.08.

  	
   

  	
  Intellectual Property Rights

  	
   

  	
  6

  
	
  4.09.

  	
   

  	
  Litigation

  	
   

  	
  8

  
	
  4.10.

  	
   

  	
  Brokerage

  	
   

  	
  8

  
	
  4.11.

  	
   

  	
  Disclosure

  	
   

  	
  8

  
	
  4.12.

  	
   

  	
  Acquisition of Equity Consideration as Investment

  	
   

  	
  8

  
	
  ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER

  	
   

  	
  8

  
	
  5.01.

  	
   

  	
  Incorporation and Power

  	
   

  	
  8

  
	
  5.02.

  	
   

  	
  Execution, Delivery; Valid and Binding Agreement

  	
   

  	
  8

  
	
  5.03.

  	
   

  	
  Authority No Breach

  	
   

  	
  8

  
	
  5.04.

  	
   

  	
  Governmental Authorities; Consents

  	
   

  	
  9

  
	
  5.05.

  	
   

  	
  Capitalization

  	
   

  	
  9

  
	
  5.06.

  	
   

  	
  Financial Condition

  	
   

  	
  10

  
	
  5.07.

  	
   

  	
  Debt Instruments

  	
   

  	
  10

  

 

 i
 

 

	
  5.08.

  	
   

  	
  Brokerage

  	
   

  	
  10

  
	
  5.09.

  	
   

  	
  Disclosure

  	
   

  	
  10

  
	
  ARTICLE VI. COVENANTS OF SELLER

  	
   

  	
  10

  
	
  6.01.

  	
   

  	
  Use of Name

  	
   

  	
  10

  
	
  6.02.

  	
   

  	
  Tax Matters

  	
   

  	
  10

  
	
  6.03.

  	
   

  	
  Protection of Trade Secrets, Know-How and Other
  Confidential Information

  	
   

  	
  10

  
	
  6.04.

  	
   

  	
  Noncompetition

  	
   

  	
  11

  
	
  6.05.

  	
   

  	
  Cooperation and Exchange of Information

  	
   

  	
  12

  
	
  6.06.

  	
   

  	
  Access to Applicable Correspondence, Applicable Data
  and Applicable Regulatory Records

  	
   

  	
  13

  
	
  6.07.

  	
   

  	
  Post-Closing Deliverables

  	
   

  	
  13

  
	
  ARTICLE VII. COVENANTS OF BUYER

  	
   

  	
  13

  
	
  7.01.

  	
   

  	
  Anti-Dilution Protection

  	
   

  	
  13

  
	
   

  	
   

  	
  ARTICLE VIII. CLOSING DELIVERIES

  	
   

  	
  14

  
	
  8.01.

  	
   

  	
  Seller’s Closing Deliveries

  	
   

  	
  14

  
	
  8.02.

  	
   

  	
  Buyer’s Closing Deliveries

  	
   

  	
  14

  
	
  ARTICLE IX. SURVIVAL; INDEMNIFICATION

  	
   

  	
  15

  
	
  9.01.

  	
   

  	
  Reliance and Survival of Representations and
  Warranties

  	
   

  	
  15

  
	
  9.02.

  	
   

  	
  Indemnification by Seller

  	
   

  	
  15

  
	
  9.03.

  	
   

  	
  Indemnification by Buyer

  	
   

  	
  16

  
	
  9.04.

  	
   

  	
  Method of Asserting Claims

  	
   

  	
  16

  
	
  9.05.

  	
   

  	
  Limitations on Indemnification

  	
   

  	
  18

  
	
  9.06.

  	
   

  	
  Materiality

  	
   

  	
  19

  
	
  ARTICLE X. MISCELLANEOUS

  	
   

  	
  19

  
	
  10.01.

  	
   

  	
  Press Releases and Announcements

  	
   

  	
  19

  
	
  10.02.

  	
   

  	
  Confidentiality Relating to Agreement

  	
   

  	
  19

  
	
  10.03.

  	
   

  	
  Expenses

  	
   

  	
  19

  
	
  10.04.

  	
   

  	
  Further Assurances

  	
   

  	
  19

  
	
  10.05.

  	
   

  	
  Schedules

  	
   

  	
  20

  
	
  10.06.

  	
   

  	
  Amendment and Waiver

  	
   

  	
  20

  
	
  10.07.

  	
   

  	
  Notices

  	
   

  	
  20

  
	
  10.08.

  	
   

  	
  Binding Effect; Assignment

  	
   

  	
  21

  

 

 ii
 

 

	
  10.09.

  	
   

  	
  Severability

  	
   

  	
  21

  
	
  10.10.

  	
   

  	
  Complete Agreement

  	
   

  	
  21

  
	
  10.11.

  	
   

  	
  Counterparts

  	
   

  	
  21

  
	
  10.12.

  	
   

  	
  Governing Law

  	
   

  	
  21

  
	
  10.13.

  	
   

  	
  Jurisdiction

  	
   

  	
  21

  
	
  10.14.

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  22

  
	
  10.15.

  	
   

  	
  Specific Performance

  	
   

  	
  22

  

 

 iii

INTELLECTUAL
PROPERTY TRANSFER AGREEMENT

This INTELLECTUAL PROPERTY TRANSFER AGREEMENT (this “Agreement”), dated as of June 15, 2007, is made and entered into by and
between Atritech, Inc., a
Delaware corporation (“Buyer”) and
ev3 Endovascular, Inc., a Delaware corporation (“Seller”).

WHEREAS, Seller owns certain technologies and other
intellectual property (the “Applicable
Technology”) relating to percutaneously delivered implants within
the left atrial appendage for prevention of emboli migration out of the
appendage (the “LAA Field of Use”);

WHEREAS, Seller desires to sell and assign to Buyer,
and Buyer desires to purchase and assume from Seller, all right title and
interest in certain of Seller’s Applicable Technology on the terms and subject
to the conditions set forth in this Agreement, which consist of patents and
patent applications sold to Buyer under Section 1.01(a) and are referred to as
the Transferred Patent Rights, and patents and patent applications sold to
Buyer under Section 1.01(b), but subject to license rights to Seller, and are
referred to as Transferred Patents Subject to Licenses;

WHEREAS, Seller desires to obtain from Buyer a world
wide, perpetual, royalty-free license for use outside of the LAA Field of Use
to the Transferred Patents Subject to Licenses listed in Schedule 1.01(b)
pursuant to a license agreement being entered into by the parties
simultaneously with this Agreement (the “Buyer License Agreement”);
and

WHEREAS, Buyer desires to obtain from Seller a world
wide, perpetual, royalty-free license within the LAA Field of Use to the
Patents Retained Subject to Licenses listed in Schedule 1.02(l) pursuant to a
license agreement being entered into by the parties simultaneously with this
Agreement (the “Seller License Agreement”).

NOW, THEREFORE, in consideration of the mutual
representations, warranties, and agreements contained in this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

ARTICLE
I.

TRANSFER OF INTELLECTUAL PROPERTY;

ASSUMPTION OF LIABILITIES

1.01.        Transfer of
Intellectual Property.  On the terms
and conditions set forth in this Agreement, Seller shall, at the Closing (as
defined in Section 3.01 hereof), sell, transfer and assign to Buyer, free
and clear of all liens and encumbrances other than any encumbrances or
restrictions that result from or arise out of the Buyer License Agreement, and
Buyer shall purchase and acquire from Seller, all right, title and interest in
and to the Applicable Technology described as follows (collectively, the “Transferred Intellectual Property”):

(a)           all patents and patent
applications, relating primarily to the Applicable Technology, consisting of
the patents and patent applications described in Schedule 1.01(a) and any
patents and patent applications relating, by virtue of a claim of priority, to
any patents or patent applications described in Schedule 1.01(a), but excluding
the 

 1
 

patents and patent applications described in
Schedule 1.02(l) (the “Transferred Patent
Rights”);

(b)           all patents and patent
applications, relating primarily to the Applicable Technology, consisting of
the patents and patent applications described in Schedule 1.01(b) and any
patents and patent applications relating, by virtue of a claim of priority, to
any patents or patent applications described in Schedule 1.01(b), all of which
are subject to the Buyer License Agreement, but excluding the patents and
patent applications described in Schedule 1.02(l) (the “Transferred Patents Subject to Licenses”);

(c)           the trade secrets,
know-how, and confidential information relating to the Transferred Intellectual
Property, or protectable designs, registered or unregistered, and registrations
and applications for registration thereof, and all rights Seller may have to
institute or maintain any action to protect the same and recover damages for
infringement or misappropriation or misuse thereof; and

(d)           all documents or other
tangible materials embodying or relating primarily to the intellectual property
described in (a), (b) or (c) above, including but not limited to all laboratory
or inventor notebooks referencing the intellectual property described in (a),
(b) or (c) above.

The parties hereto
expressly agree that Buyer is not assuming any of the liabilities, obligations
or undertakings relating to the foregoing Transferred Intellectual Property.

1.02.        Excluded Intellectual
Property.  Other than the Transferred
Intellectual Property specified in Section 1.01, all other Seller assets shall
be retained by Seller and shall not be sold, transferred or assigned to Buyer
in connection with the purchase of the Transferred Intellectual Property,
including the following assets:

(a)           all trademarks, service
marks, trade names, trade dress and other designators of origin, registered or
unregistered, and registrations and applications for registration thereof,
regardless of whether or not relating to the Applicable Technology;

(b)           computer programs and
software (in source code and object code formats) and related data and
documentation and copyrightable subject matter;

(c)           all of Seller’s
training and educational materials;

(d)           all materials and
correspondence regarding reimbursement by any governmental entity or private
insurer with respect to percutaneously delivered implants within the left
atrial appendage for prevention of emboli migration out of the
appendage (the “Applicable Correspondence”);

(e)           all regulatory and
clinical trial information, data, and records, including pre-clinical work
(including histological information), patient case files, case report forms,
clinical trial records and case summaries with respect to patients who have
undergone a procedure for a percutaneously delivered implants within the left
atrial 

 2
 

appendage for prevention of emboli
migration out of the appendage that was developed by Seller or any
predecessor of Seller and other business books and records and all copyright
therein  (the “Applicable
Data”);

(f)            all of Seller’s rights
to data and records relating to the Applicable Technology, including data and
records relating to clinical trials, patient case files, case report forms,
case summaries and government submissions and correspondence (the “Applicable Regulatory Records”);

(g)           all of Seller’s other
books, records, files and documentation, including research and development
records and documentation (including design history files, product development
processes and controls, but not including laboratory or inventor notebooks),
financial records, quality control documentation, documentation regarding
manufacturing and operation processes, human resources files and records, and
marketing and sales materials;

(h)           all equipment and
machinery, regardless of whether or not relating to the Applicable Technology;

(i)            all inventory,
regardless of whether or not relating to the Applicable Technology, wherever
located, including supplies, parts, finished goods, work-in-process, product
labels and packaging materials;

(j)            all contracts to which
Seller is a party or a third party beneficiary, regardless of whether or not
relating to the Applicable Technology;

(k)           all permits, licenses,
certificates and governmental authorizations and approvals from federal, state,
local and foreign authorities, regardless of whether or not relating to the
Applicable Technology, held by Seller, and all pending applications for or
renewals of the foregoing; and

(l)            the patents and patent
applications to be licensed to Buyer under the Seller License Agreement, which
patents and patent applications are listed on Schedule 1.02(l).

1.03.        Assumption of
Liabilities.  Buyer shall not assume,
pay, perform in accordance with their terms or otherwise satisfy, any
liabilities of Seller of any nature, whether or not related to the Transferred
Intellectual Property.

1.04.        Excluded Liabilities.  Seller shall retain, and Buyer shall not
assume, and nothing contained in this Agreement shall be construed as an
assumption by Buyer of, any liabilities, employees, obligations or undertakings
of Seller of any nature whatsoever, including, without limitation, all accounts
payable, litigation, debt and Taxes (as defined in Section 4.07) relating
to the Transferred Intellectual Property that are attributable to periods prior
to or on the Closing Date.

 3
 

ARTICLE
II.

PURCHASE PRICE

2.01.        Amount.  The purchase price (the “Purchase Price”) for the Transferred
Intellectual Property shall be equal to the sum of the Cash Purchase Price, the
value of the Equity Consideration as of the Closing Date, and the Debt
Consideration described below:

(a)           The “Cash Purchase Price” shall be $2,000,000 and shall be paid
by Buyer to Seller on the Closing Date in immediately available funds.

(b)           The “Equity Consideration” shall consist of the issuance by Buyer
to Seller of a certificate (the “Atritech Stock Certificate”)
representing 3,583,960 shares of the common stock of Buyer, par value $0.01 per
share, representing approximately 8%, on a fully-diluted basis, of the equity
of Buyer as of the Closing Date.

(c)           The “Debt Consideration” shall consist of a promissory note (the “Note”), in form and substance reasonably
acceptable to Buyer and Seller, issued by Buyer in the amount of $5,600,000,
which Note shall not bear interest and shall be subordinated to any other debt
instruments issued by Buyer.

ARTICLE
III.

CLOSING

3.01.        Closing.  The closing of the transactions contemplated
by this Agreement (the “Closing”)
will take place at such place as is mutually agreeable to Buyer and Seller, at
9:00 a.m., Central Time on June 15,
2007 or at such other place and on such other date as is mutually
agreeable to Buyer and Seller after all of the conditions to the parties’
obligations set forth in Article VIII hereof have been satisfied (or waived by
the party entitled to the benefit of such conditions).  The date on which the Closing occurs is
referred to herein as the “Closing Date,”
and the Closing shall be deemed effective as of the close of business on the
Closing Date.

3.02.        General Procedure.  At the Closing, each party shall deliver to
the party entitled to receipt thereof the documents required to be delivered
pursuant to Article VIII hereof and such other documents, instruments and
materials (or complete and accurate copies thereof, where appropriate) as may
be reasonably required to effectuate the intent and provisions of this
Agreement, and all such documents, instruments and materials shall be
satisfactory in form and substance to counsel for the receiving party.  The conveyance, transfer, assignment and
delivery of the Transferred Intellectual Property shall be effected by Seller’s
execution and delivery to Buyer of a bill of sale, in form and substance
reasonably acceptable to Buyer (the “Bill of
Sale”) and such other instruments of conveyance, transfer,
assignment and delivery as Buyer shall reasonably request to cause Seller to
transfer, convey, assign and deliver the Transferred Intellectual Property to
Buyer.

ARTICLE
IV.

REPRESENTATIONS AND WARRANTIES OF SELLER

For purposes of
this Article IV, references to Seller’s “knowledge”
or similar qualifiers, shall mean the actual knowledge of the officers of
Seller.  Seller hereby represents and 

 4
 

warrants to Buyer that,
except as set forth in the Disclosure Schedule delivered by Seller to Buyer on
the date hereof (the “Disclosure Schedule”)
which Disclosure Schedule sets forth the exceptions to the representations and
warranties contained in this Article IV
under captions referencing the Sections to which such exceptions apply:

4.01.        Incorporation and
Corporate Power.  Seller is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority and all authorizations, licenses, permits and certifications
necessary to carry on its business as now being conducted and to own, lease and
use the Transferred Intellectual Property.

4.02.        Execution, Delivery;
Valid and Binding Agreement.  The
execution, delivery and performance of this Agreement and the documents being
executed and delivered simultaneously with this Agreement (collectively, the “Related Agreements”) by Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all requisite corporate action,
and no other corporate proceedings on its part are necessary to authorize the
execution, delivery and performance of this Agreement and the Related
Agreements.  This Agreement and the
Related Agreements have been duly executed and delivered by Seller and,
assuming that this Agreement and the Related Agreements are the valid and
binding agreements of Buyer, constitute valid and binding obligations of
Seller, enforceable in accordance with their terms subject to laws of general
application relating to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally and rules of law
governing specific performance, injunctive relief or other equitable remedies.

4.03.        Authority; No Breach.  Seller has the requisite corporate power and
authority to execute and deliver this Agreement and each of the Related
Agreements and to perform its obligations hereunder and thereunder.  The execution, delivery and performance of
this Agreement and the Related Agreements by Seller and the consummation of the
transactions contemplated hereby and thereby do not conflict with or result in
any breach of any of the provisions of, or constitute a default under, result
in a violation of, result in the creation of a right of termination or
acceleration or any lien, security interest, charge, or encumbrance upon any of
the Transferred Intellectual Property except for any encumbrances or
restrictions that arise out of or result from the Buyer License Agreement or
require any authorization, consent, approval, exemption or other action by or
notice to any court or other governmental body, under the provisions of the
Articles of Incorporation or Bylaws of Seller or any indenture, mortgage,
lease, loan agreement or other agreement or instrument by which Seller or the
Transferred Intellectual Property are bound or affected, or any law, statute,
rule or regulation or order, judgment or decree to which Seller or the
Transferred Intellectual Property are subject.

4.04.        Governmental
Authorities; Consents.  Seller is not
required to submit any notice, report or other filing with any governmental
authority in connection with the execution or delivery by it of this Agreement
or the consummation of the transactions contemplated hereby.  No consent, approval or authorization of any
governmental or regulatory authority is required to be obtained by Seller in
connection with its execution, delivery and performance of this Agreement.

 5
 

4.05.        No Material Adverse
Changes.  Since December 31, 2006,
there has been no change in the Transferred Intellectual Property that would
have a Material Adverse Effect.  “Material Adverse Effect” shall mean any one or more events,
circumstances or conditions which result in, or may reasonably be expected to
result in, individually or in the aggregate, a material adverse effect on the
ability of Buyer to exercise ownership rights in the Transferred Intellectual
Property from and after the Closing.

4.06.        Title to Transferred
Intellectual Property.  Seller owns
good and marketable title to the Transferred Intellectual Property, free and
clear of all liens and encumbrances except for Permitted Liens.  To the extent such documents exist, Seller
has delivered or made available to Buyer copies of the title, bills of sale, or
other instruments by which Seller acquired such Transferred Intellectual
Property.  Upon execution and delivery by
Seller of the instruments of conveyance including the Bill of Sale, Buyer will
become the true and lawful owner of, and will receive good title to, the
Transferred Intellectual Property, free and clear of all liens and encumbrances
except for Permitted Liens.  “Permitted Liens” means (i) liens for Taxes or governmental
assessments, charges or claims the payment of which is not yet due, or for
Taxes the validity of which are being contested in good faith by appropriate
proceedings and (ii) the terms of the Buyer License Agreement.

4.07.        Tax Matters.  There are no liens for Taxes upon any of the
Transferred Intellectual Property except for Permitted Liens.  To the best of Seller’s knowledge, no
proceedings have been commenced by any federal, state, local or foreign agency
to create any liens for Taxes upon any of the Transferred Intellectual
Property.  The term “Taxes” means all taxes, charges, fees,
levies, or other assessments, including, without limitation, all net income,
gross income, gross receipts, sales, use, ad valorem, transfer, franchise,
profits, license, withholding, payroll, employment, social security,
unemployment, excise, estimated, severance, stamp, occupation, property, or
other taxes, customs duties, fees, assessments, or charges of any kind
whatsoever, including, without limitation, all interest and penalties thereon,
and additions to tax or additional amounts imposed by any taxing authority,
domestic or foreign, upon Seller.  Seller
has timely and properly paid (or has had paid on its behalf) all Taxes that
were due and payable on or before the date hereof.

4.08.        Intellectual Property
Rights.

(a)           Set forth on Section
4.08 of the Disclosure Schedule is a description of all of the registered
Intellectual Property owned by, licensed to or otherwise controlled by Seller
or an Affiliate of Seller that relates primarily or exclusively to the
Applicable Technology.  Seller has not
granted to any third party any license rights with respect to any of the
Transferred Intellectual Property. 
Seller made available for inspection by Buyer correct and complete
copies of all patents, patent applications relating to the Applicable
Technology and registrations and applications therefore and all licenses,
sublicenses, agreements, and permissions (as amended to date) relating to the
Transferred Intellectual Property.

(b)           Seller owns or has the
exclusive right to use pursuant to license, sublicense, agreement or permission
all of the Transferred Intellectual Property.

 6
 

(c)           With respect to each
item of the Transferred Intellectual Property which Seller owns, Seller solely
possesses all right, title and interest in and to the item, free and clear of
any lien or encumbrance except for Permitted Liens.  Seller is the official and sole owner of record
of all registered Transferred Intellectual Property.  Except as set forth on Section 4.08(c) of the
Disclosure Schedule, to Seller’s Knowledge, no Transferred Intellectual
Property has been infringed by any person or entity.  Seller owns all of the Transferred
Intellectual Property developed by its current and former employees and
independent contractors during the period of their employment or within the
scope of their contracting or consulting relationship, as the case may be, with
Seller and no such person has any valid claim with respect to any of such
Transferred Intellectual Property.  To
Seller’s Knowledge, all owned Transferred Intellectual Property is valid and
enforceable, and since August 10, 2002 no person or entity has asserted in
writing, or to Seller’s Knowledge in any other manner, that any owned
Intellectual Property is invalid or not enforceable.

(d)           All grants and
registrations relating to the Transferred Intellectual Property are in full
force and effect, and all actions required to keep such registrations pending
or in effect or to provide full available protection of registered Transferred
Intellectual Property or the Transferred Intellectual Property for which an
application or a registration is pending, including payment of filing, examination,
annuity, and maintenance fess and filing of renewals, statements of use or
working, affidavits of incontestability and other similar actions, have been
taken, and no such Transferred Intellectual Property is the subject of any
interference, opposition, cancellation, nullity, re-examination or other
proceeding placing in question the validity or scope of such rights.

(e)           Each item of the
Transferred Intellectual Property owned immediately prior to the Closing
hereunder will be owned by Buyer on the same terms and conditions immediately
subsequent to the Closing except for the restrictions and obligations set forth
in the Buyer License Agreement.  Except
as set forth on Section 4.08(e) of the Disclosure Schedule, Seller has taken
commercially reasonable actions to maintain and protect each item of the
Transferred Intellectual Property that it owns or uses.

(f)            Seller has not taken
action, or failed to take an action, that might have the effect of estopping or
otherwise limiting its right to enforce owned Transferred Intellectual Property
against any Person.

(g)           With respect to the
Transferred Intellectual Property or any component of any of the Transferred
Intellectual Property, Seller has not, to its Knowledge, misappropriated any
intellectual property right (including, but not limited to, patent, copyright,
trademark, service mark, trade names, trade dress, trade secret, or know-how
right) of any third-party, and Seller has not, since August 10, 2002, received,
any notice of any misappropriation by Seller of any such intellectual property
right of any third-party.  To Seller’s
knowledge, no misappropriation of any intellectual property right of a
third-party has occurred or will occur by Seller with respect to the
Transferred Intellectual Property or any component of any of the Transferred
Intellectual Property.

 7
 

4.09.        Litigation.  There is no litigation, pending or, to the
knowledge of Seller, threatened against Seller, challenging Seller’s ownership
rights in the Transferred Intellectual Property, and there is no reasonable
basis known to Seller for any of the foregoing.

4.10.        Brokerage.  Except as forth on Section 4.10 of the
Disclosure Schedule, no third party shall be entitled to receive any brokerage
commissions, finder’s fees, fees for financial advisory services or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement made by or on behalf of Seller.

4.11.        Disclosure.  Neither this Agreement, the Related
Agreements, any of the documents delivered by or on behalf of Seller pursuant
to Article VIII hereof, nor the Disclosure Schedule (collectively, the “Seller Documents”), taken as a whole,
contain any untrue statement of a material fact regarding the Transferred
Intellectual Property or any of the other matters dealt with in this Article
IV relating to Seller or the transactions contemplated by
this Agreement.  The Seller Documents,
taken as a whole, do not omit any material fact necessary to make the
statements contained herein or therein, in light of the circumstances in which
they were made, not misleading, and there is no fact relating to the
Transferred Intellectual Property which has not been disclosed to Buyer of
which any officer or director of Seller is aware which would have a Material
Adverse Effect.

4.12.        Acquisition of Equity
Consideration as Investment.  Seller
is acquiring the Equity Consideration for Seller’s own account and without the
present intent to sell, transfer or otherwise distribute the Equity Consideration
or any part thereof to any other person or entity other than to an affiliate of
Seller.  Seller has received access to,
if requested, all relevant organizational charter documents and other
documents, records, and books pertaining to Buyer for the purpose of assessing
the Equity Consideration.

ARTICLE
V.

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer hereby
represents and warrants to Seller that:

5.01.        Incorporation and Power.  Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware,
with the requisite corporate power and authority to enter into this Agreement
and perform its obligations hereunder.

5.02.        Execution, Delivery;
Valid and Binding Agreement.  The
execution, delivery and performance of this Agreement and the Related
Agreements by Buyer and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all requisite
corporate action, and no other corporate proceedings on its part are necessary
to authorize the execution, delivery or performance of this Agreement and the
Related Agreements.  This Agreement and
the Related Agreements have been duly executed and delivered by Buyer and
constitute the valid and binding obligations of Buyer, enforceable in
accordance with their terms.

5.03.        Authority No Breach.  Buyer has the requisite corporate power and
authority to execute and deliver this Agreement and each of the Related
Agreements and to perform its 

 8
 

obligations hereunder and thereunder.  The execution, delivery and performance of
this Agreement and the Related Agreements by Buyer and the consummation by
Buyer of the transactions contemplated hereby and thereby do not conflict with
or result in any breach of any of the provisions of, constitute a default
under, result in a violation of, result in the creation of a right of
termination or acceleration or any lien, security interest, charge or
encumbrance upon any assets of Buyer, or require any authorization, consent,
approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of the Certificate of Incorporation or
Bylaws of Buyer or any indenture, mortgage, lease, loan agreement or other
agreement or instrument by which Buyer or its assets are bound or affected, or
any law, statute, rule or regulation or order, judgment or decree to which
Buyer or its assets is subject.

5.04.        Governmental
Authorities; Consents.  Buyer is not required to submit any
notice, report or other filing with any governmental authority in connection
with the execution or delivery by it of this Agreement or the consummation of
the transactions contemplated hereby.  No
consent, approval or authorization of any governmental or regulatory authority
or any other party, person, or entity is required to be obtained by Buyer in
connection with its execution, delivery and performance of this Agreement or
the transactions contemplated hereby.

5.05.        Capitalization.

(a)           As of the date hereof,
the authorized capital stock of Buyer consists and will consist of 50,000,000
shares of common stock, par value $0.01 per share, of which 6,683,000 shares
are issued and outstanding, 5,600,000 shares of Series A Convertible Preferred
Stock, par value $0.01 per share, of which 5,600,000 shares are issued and
outstanding, 8,123,560 shares of Series B Convertible Preferred Stock, par
value $0.01 per share, of which 8,123,560 shares are issued and outstanding,
and 19,973,245 shares of Series C Convertible Preferred Stock, par value $0.01
per share, of which 18,212,686 shares are issued and outstanding.  All of the outstanding shares of capital
stock of Buyer were duly authorized and validly issued and are fully paid and
nonassessable.  As of the date hereof,
each share of outstanding preferred stock is convertible into one share of
common stock of Buyer and such conversion ratio shall not change as a result of
this Agreement.

(b)           As of the date hereof,
there are no, and at the Closing there will be no outstanding subscriptions,
options, warrants, calls, contracts, demands, commitments, convertible
securities or other agreements or arrangements of any character or nature
whatever, other than this Agreement, under which Buyer is obligated to issue
any securities of any kind representing an ownership interest in Buyer, except
as set forth on Schedule 5.05(b).

(c)           No holder of any
securities of Buyer is entitled to any preemptive or similar rights to purchase
any securities of Buyer from Buyer as a result of this Agreement whether as a
result of the issuance of shares of Equity Consideration at the Closing or any
additional shares issuable with respect to the Equity Consideration after the
Closing or otherwise.

 9
 

5.06.        Financial Condition.  Buyer has delivered to Seller correct and
complete copies of (1) the unaudited balance sheet of Buyer as at April 30,
2007 (the “Latest Balance Sheet”),
and (2) the related unaudited consolidated statements of income and cash flows
for the four-month period then ended. 
Each of the foregoing financial statements is based upon the books and
records of Buyer have been prepared in accordance with GAAP consistently
applied during the periods indicated and present fairly in all material
respects the financial position, results of operations and cash flows of Buyer
at and as of April 30, 2007.  Since April
30, 2007, except for the transactions contemplated by this Agreement, Buyer has
owned and operated its assets, properties and businesses in the ordinary course
of business and there has been no any change, effect, event or condition,
individually or in the aggregate, that has had or, with the passage of time,
could reasonably be expected to have a material adverse effect on the business,
operations or properties of Buyer.

5.07.        Debt Instruments.  Buyer has no outstanding debt instruments
under which Buyer has any indebtedness.

5.08.        Brokerage.  No third party shall be entitled to receive
any brokerage commissions, finder’s fees, fees for financial advisory services
or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of
Buyer.

5.09.        Disclosure.  Neither this Agreement nor any of the
documents delivered by or on behalf of Buyer pursuant to Article VIII hereof
(collectively, the “Buyer Documents”),
taken as a whole, contain any untrue statement of a material fact regarding
Buyer or any of the other matters dealt with in this Article V
relating to Buyer or the transactions contemplated by this Agreement.

ARTICLE
VI.

COVENANTS OF SELLER

6.01.        Use of Name.  Seller agrees not to use the name PLAATO or
any name reasonably similar thereto after the Closing Date.

6.02.        Tax Matters.  All Taxes imposed in connection with the
transfer and sale of the Transferred Intellectual Property shall be borne by Seller,
provided that Buyer shall be responsible for any use taxes in connection with
its use of the Transferred Intellectual Property after the Closing.

6.03.        Protection of Trade
Secrets, Know-How and Other Confidential Information.  From the date hereof until the date that is
five (5) years following the date hereof, except as permitted or directed by
Buyer, Seller shall not, and shall use its commercially reasonable efforts to
cause its employees and affiliates to not, divulge, furnish or make accessible
to anyone or use in any way any confidential or proprietary knowledge or
information relating to the Transferred Intellectual Property, whether
developed by Seller or by others, concerning any trade secrets, confidential or
secret designs, processes, formulae, products or future products, plans,
devices or material (whether or not patented or patentable) directly or
indirectly useful in any aspect for any of the Transferred Intellectual
Property, any confidential or secret development or research work 

 10
 

relating to the Transferred Intellectual Property, or
any other confidential information or secret aspects of the Transferred
Intellectual Property.  Notwithstanding
the foregoing or any other provision in this Agreement to the contrary, Seller
shall be allowed to (i) take such actions as it deems necessary or
appropriate to with respect to a clinical trial that it is currently conducting
that concerns a product that incorporates some of the Applicable Technology,
including without limitation the submission of data and reports to the FDA
related to such trial, and (ii) from time to time after the date hereof,
make such other submissions to the governmental regulatory authorities,
including the FDA, as it deems necessary or appropriate, whether or not concerning
the Applicable Technology or any data related thereto.  Seller acknowledges that the above-described
knowledge or information constitutes a unique and valuable asset, and that any
disclosure or other use of such knowledge or information by Seller would be
wrongful and would cause irreparable harm to Buyer.  From the date hereof until the date that is
five (5) years following the date hereof, Seller will refrain from any acts or
omissions that would reduce the value of such knowledge or information to Buyer.

6.04.        Noncompetition.

(a)           For five (5) years
after the Closing Date, Seller shall not and shall cause its affiliates not to,
directly or indirectly, engage in, and shall use its best efforts to ensure
that none of its officers directly or indirectly engage in, any Competitive
Business (as defined below), whether in existence now or at any time in the
future, in any manner or capacity (e.g., as an advisor, principal, agent,
partner, officer, director, stockholder, consultant, member of any association
or otherwise); provided, however, that this Section 6.04(a) shall
not prohibit either Seller or its affiliates from (i) acquiring any person or
entity that derives less than fifty percent (50%) of its consolidated revenues
(based on its most recently completed fiscal year prior to the acquisition)
from a Competitive Business or (ii) being acquired by a person or entity that
engages in a Competitive Business; provided, further, that,
subject to the immediately following sentence, the prohibitions in this Section
6.04(a) shall not apply to any person or entity acquired under clause (i) above
or any acquiring person or entity under clause (ii) above  (each, an “Exempted
Person”).  For purposes of
clarity, after any transaction referred to in the preceding sentence, Seller
and its present affiliates (as well as any entity Seller acquires after the
date hereof that is, at the time of such transaction, bound by this Section
6.04(a)) shall continue to be bound by this Section 6.04(a).  A “Competitive Business”
shall mean any business or venture that designs, develops, creates, markets,
distributes, or licenses or sells percutaneously delivered implants within the
left atrial appendage for prevention of emboli migration out of the
appendage.  The parties agree and acknowledge,
that neither Warburg Pincus, L.P. nor any of its affiliates (except for ev3
Inc. and its direct and indirect subsidiaries) 
shall be considered affiliates of the Seller for purposes of this
Agreement (including this Section 6.04).

(b)           Seller will not
directly or indirectly, induce any employee of Seller or its affiliates (other
than employees of an Exempted Person) or Buyer to carry out any activity
described in Section 6.03 or 6.04(a) during the time in which Seller is
restricted from engaging in such activities.

 11
 

(c)           Seller agrees that the
restrictions and agreements contained in Sections 6.03 or 6.04 are
reasonable and necessary to protect the legitimate interests of Buyer and that
any violation of Sections 6.03 or 6.04 will cause substantial and irreparable
harm to Buyer that would not be quantifiable and for which no adequate remedy
would exist at law and accordingly injunctive relief shall be available for any
violation of Sections 6.03 or 6.04.

(d)           If the duration or
extent of business activities covered by Sections 6.03 or 6.04 are in
excess of what is valid and enforceable under applicable law, then such
provisions shall be construed to cover only the greatest duration or activities
that are valid and enforceable.  Seller
acknowledges the uncertainty of the law in this respect and expressly
stipulates that this Agreement be given the construction which renders its
provisions valid and enforceable to the maximum extent (not exceeding its
express terms) possible under applicable law. 
The parties intend these provisions to be deemed to be a series of
separate covenants, one for each and every state of the United States of
America, and each and every political subdivision of each and every country
outside the United States of America where these provisions is intended to be
in effect.

6.05.        Cooperation and
Exchange of Information.

(a)           Except with respect to
the Applicable Data and the Applicable Regulatory Records, Buyer shall have the
right for a period of seven years following the Closing Date to have reasonable
access to such books, records and accounts, including financial and tax
information, correspondence, production records, and other records of Seller
relating to the Transferred Intellectual Property for the limited purposes of
complying with its obligations under applicable laws and regulations.  Seller shall not destroy any such books,
records or accounts retained by it without first providing Buyer with the
opportunity to obtain or copy such books, records, or accounts.

(b)           Promptly upon request
by Buyer made at any time during the seven-year period following the Closing
Date, Seller shall authorize the release to Buyer of all files pertaining to
the Transferred Intellectual Property held by any federal, state, county or
local authorities, agencies or instrumentalities.

(c)           Seller upon written
request by Buyer will provide to Buyer such factual information reasonably
necessary for filing Tax returns, Tax planning and contesting any Tax audit
that Seller possesses as Buyer may reasonably request with respect to the
Transferred Intellectual Property (which information Seller agrees to maintain
and preserve for so long as it may be needed by Buyer).

(d)           Seller shall provide
Buyer with such cooperation and information as Buyer reasonably may request of
Seller in filing any Tax return, amended return or claim for refund,
determining a liability for Taxes or a right to a refund of Taxes or in
conducting any audit or proceeding in respect of Taxes.  Such cooperation and information shall
include providing copies of relevant Tax returns or portions thereof, together
with accompanying schedules and related work papers and documents relating to
rulings or other determinations by Taxing authorities.  Seller shall make its employees available on 

 12
 

a mutually convenient basis to provide
explanation of any documents or information provided hereunder.

6.06.        Access to Applicable
Correspondence, Applicable Data and Applicable Regulatory Records.  From the date hereof until the date that is
five (5) years after the Closing Date, Seller shall not, and shall cause its
affiliates not to, transfer or destroy and Seller shall, and shall cause its
affiliates to, afford to Buyer access to the Applicable Correspondence, the
Applicable Data and the Applicable Regulatory Records, including, without
limitation, the information listed on Schedule 6.06.  Such access shall be limited to allowing
Buyer to view and manipulate the same at Seller’s location or at such location
as Seller reasonably specifies.  For
purposes of clarity, such access will not include the right to make or receive
tangible or electronic copies or receive or make any electronic files of or
derived from any of the Applicable Correspondence, the Applicable Data and the
Applicable Regulatory Records.  In
addition, to the extent that Seller has not previously filed any Applicable
Data to the FDA and Buyer wishes to cite any such data, Seller will reasonably
cooperate with Buyer to get on file such data with the FDA to the extent the
same can be filed with the FDA in accordance with FDA rules and regulations and
other applicable law, either via an annual report to the FDA or otherwise; provided,
however, that Buyer shall be responsible for any third party costs
incurred by Seller in connection with such cooperation.

6.07.        Post-Closing
Deliverables.  As soon as practicable
after the Closing, Seller will deliver to Buyer, to the extent available, the
following:

(a)           a docket report showing
upcoming deadlines for all Transferred Intellectual Property;

(b)           a listing of all law
firms, including firm name, address, phone number and contact name, for all
U.S. and foreign associates, that are currently handling each of the
Transferred Intellectual Property; and

(c)           all patent files
pertaining to the prosecution of all Transferred Intellectual Property
(excluding files held by Seller’s law firm(s)).

ARTICLE
VII.

COVENANTS OF BUYER

7.01.        Anti-Dilution
Protection.  With respect to the
shares represented by the Atritech Stock Certificate, Buyer shall provide
anti-dilution protection for the Equity Financings completed by Buyer
subsequent to the Closing Date but prior to Buyer’s initial public offering
such that Buyer shall, with respect to each such subsequent Equity Financing
and for no further consideration, issue to Seller such number of common shares
of Buyer so that Seller’s post-Equity Financing fully-diluted ownership
percentage in Buyer is equal to Seller’s fully-diluted ownership percentage in
Buyer immediately prior to the closing of such Equity Financing.  “Equity
Financing” means any sale or issuance of Buyer’s stock or any
instrument convertible into Buyer’s stock other than (i) the issuance of
options or restricted stock pursuant to Buyer’s Amended and Restated 2000 Stock
Incentive Plan, as amended from time to time, up to an aggregate of 15% of
Buyer’s capital stock on a fully-diluted basis, (ii) the conversion of 

 13
 

preferred shares outstanding on the Closing Date or
(iii) the issuance of any shares of capital stock of Buyer pursuant to the
exercise of any option or any of the warrants outstanding as of the Closing
Date to acquire shares of Buyer’s Series C Preferred Stock which such
outstanding options and warrants are described on Schedule 5.05(b).

ARTICLE
VIII.

CLOSING DELIVERIES

8.01.        Seller’s Closing
Deliveries.  On or prior to the
Closing Date, Seller shall have delivered to Buyer all of the following:

(a)           the executed Bill of
Sale and such other executed instruments of conveyance, transfer, assignment
and delivery as Buyer shall have reasonably requested;

(b)           a certificate of an
appropriate officer of Seller certifying that the board of directors of Seller
has authorized the execution, delivery, and performance of this Agreement and
the Related Agreements;

(c)           copies of any third
party and governmental consents and approvals required for the consummation of
the transactions contemplated hereby;

(d)           an assignment, in form
and substance reasonably satisfactory to Buyer, of the Transferred Intellectual
Property, duly executed by Seller, together with other agreements, instruments,
certificates and other documents necessary or appropriate, in the opinion of
Buyer’s counsel, to assign all of Seller’s rights and interests in and to the
Intellectual Property to Buyer;

(e)           a copy of the Buyer
License Agreement, duly executed by Seller;

(f)            a copy of the Seller
License Agreement, duly executed by Seller; and

(g)           such other
certificates, documents and instruments as Buyer reasonably requests related to
the transactions contemplated hereby, including receipts or other evidence satisfactory
to Buyer from the federal taxing authorities, evidencing payment in full by
Seller of all sales and use taxes imposed by such taxing authorities on Seller
prior to the Closing Date.

8.02.        Buyer’s Closing
Deliveries.  On or prior to the
Closing Date, Buyer shall have delivered to Seller all of the following:

(a)           a wire transfer or bank
draft in immediately available funds in the amount of the Cash Purchase Price;

(b)           the Atritech Stock
Certificate;

(c)           the Note;

 14
 

(d)           a certificate of an
appropriate officer of Buyer certifying the text of the resolutions adopted by
the board of directors of Buyer authorizing the execution, delivery, and
performance of this Agreement;

(e)           a copy of the Buyer
License Agreement, duly executed by Buyer;

(f)            a copy of the Seller
License Agreement, duly executed by Buyer; and

(g)           such other
certificates, documents and instruments as Seller or its counsel may reasonably
request related to the transactions contemplated hereby.

ARTICLE
IX.

SURVIVAL; INDEMNIFICATION

9.01.        Reliance and Survival
of Representations and Warranties. 
Notwithstanding any investigation made by or on behalf of the parties
hereto or the results of any such investigation, and notwithstanding the
participation of the parties in the Closing, each party shall be deemed to have
relied on the representations, warranties and covenants of the other parties,
and the representations and warranties contained in Article IV
and Article V, and the
indemnification obligations of Seller with respect thereto, shall survive the
Closing for a period of 24 months, except for the representations and
warranties of Section 4.07 which shall survive the Closing Date for a period of
six months after the expiration of the applicable statute of limitations and
the representations and warranties of Sections 4.06, 4.08, 4.10, 5.05 and 5.08
which shall survive indefinitely.

9.02.        Indemnification by
Seller.  Subject to the limitations
of Sections 9.01 and 9.05, Seller agrees to indemnify in full, defend and
hold harmless Buyer, its respective officers, directors, employees, agents and
shareholders (collectively, the “Buyer
Indemnified Parties”) against any direct loss, liability, direct
damage, expense or cost (including reasonable attorneys’ fees and expenses) but
specifically excluding consequential damages, loss of profits, punitive
damages, exemplary damages, incidental and other indirect damages
(collectively, “Losses”), whether
or not involving a third-party Claim (as defined in Section 9.04(a)) actually
incurred or paid prior to the expiration of the indemnification obligation of
Seller hereunder, which the Buyer Indemnified Parties may suffer, sustain or
become subject to, as a result of any of the following:

(a)           any misrepresentation
in any of the representations and warranties of Seller contained in the Seller
Documents or in any certificate delivered by or on behalf of Seller pursuant to
this Agreement;

(b)           any breach of, or
failure to perform, any agreement or covenant of Seller contained in any of
Seller Documents;

(c)           any Claim or threatened
Claim against the Buyer Indemnified Parties to the extent arising in connection
with the actions or inactions of Seller with respect to the Transferred
Intellectual Property prior to the Closing Date;

 15

(d)           any Claim or threatened
Claim arising out of, or in connection with, the agreement and plan of merger
among Appriva Medical, Inc., Microvena Corporation and Appriva Acquisition
Corp., dated July 15, 2002, including, without limitation, any Contingent Payments;

(e)           any former or present
employees, officers of, consultants to, or independent contractors to, Seller
holding any rights in or to the Intellectual Property;

(f)            any product liability
Claims relating to the Transferred Intellectual Property and/or sales of and
Applicable Technology or component thereof prior to the Closing; or

(g)           any excluded liability
pursuant to Section 1.04.

9.03.        Indemnification by
Buyer.  Subject to the limitations of
Sections 9.01 and 9.05, Buyer agrees to indemnify in full, defend and hold
harmless Seller, its respective officers, directors, employees, agents and
shareholders (collectively, the “Seller
Indemnified Parties”) against any Losses, whether or not involving a
third-party Claim or actually incurred or paid prior to the expiration of the
indemnification obligations of Buyer hereunder, which Seller may suffer,
sustain or become subject to as a result of any of the following:

(a)           any misrepresentation
in any of the representations and warranties of Buyer contained in the Buyer
Documents or in any certificate delivered by or on behalf of Buyer pursuant to
this Agreement;

(b)           any breach of, or
failure to perform, any agreement or covenant of Buyer contained in the Buyer
Documents; or

(c)           except to the extent
that Seller agrees to indemnify Seller under Section 9.02, any Claim or
threatened Claim against any Seller Indemnified Party that arises solely in
connection with the actions or inactions of Buyer with respect to the
Transferred Intellectual Property after the Closing Date.

9.04.        Method of Asserting
Claims.  As used herein, an “Indemnified Party” shall refer to a Buyer
Indemnified Party or Seller, as applicable, and the “Indemnifying Party” shall refer to the party or parties hereto
obligated to indemnify such Indemnified Party.

(a)           In the event that any
of the Indemnified Parties is made a defendant in or party to any action or
proceeding, judicial or administrative, instituted by any third party for the
liability or the costs or expenses of which are Losses (any such third party
action or proceeding being referred to as a “Claim”),
then such Indemnified Party shall give the Indemnifying Party prompt notice
thereof.  The failure to give such notice
shall not affect any Indemnified Party’s ability to seek reimbursement unless
such failure has materially and adversely affected the Indemnifying Party’s
ability to defend successfully a Claim. 
The Indemnifying Party shall be entitled to contest and defend such
Claim; provided, that the Indemnifying Party (i) has a reasonable basis
for concluding that such defense may be successful and (ii) diligently
contests and defends such Claim.  Notice
of the intention so to contest and defend shall be given by the Indemnifying
Party to the Indemnified Party

 16
 

within fifteen (15) business days after the
Indemnified Party’s notice of such Claim (but, in any event, at least five (5)
business days prior to the date that an answer to such Claim is due to be
filed).  Such contest and defense shall
be conducted by reputable attorneys employed by the Indemnifying Party.  If the Indemnifying Party fails to give such
notice or assume such defense, then the Indemnified Party shall be entitled to
undertake such defense and its reasonable costs and expenses (including,
without limitation, attorney fees and expenses) shall be included in the Loss
to be indemnified by the Indemnifying Party. 
If the Indemnifying Party elects to contest and defend a Claim, the
Indemnified Party shall be entitled at any time, at its own cost and expense
(which expense shall not constitute a Loss unless the Indemnified Party
reasonably determines that the Indemnifying Party is not adequately
representing or, because of a conflict of interest, may not adequately
represent, any interests of the Indemnified Parties, and only to the extent
that such expenses are reasonable), to participate in such contest and defense
and to be represented by attorneys of its or their own choosing.  If the Indemnified Party elects to
participate in such defense, the Indemnified Party will cooperate with the
Indemnifying Party in the conduct of such defense.  Neither the Indemnified Party nor the
Indemnifying Party may concede, settle or compromise any Claim without the
consent of the other party, which consents will not be unreasonably withheld or
delayed.  Notwithstanding the foregoing,
if (i) a Claim seeks equitable relief or (ii) the subject matter of a Claim
relates to the ongoing business of any of the Indemnified Parties, which Claim,
if decided against any of the Indemnified Parties, would materially adversely
affect the ongoing business or reputation of any of the Indemnified Parties,
then, in each such case, the Indemnified Parties alone shall be entitled to
contest, defend and settle such Claim in the first instance and, if the
Indemnified Parties do not contest, defend or settle such Claim, the
Indemnifying Party shall then have the right to contest and defend (but not
settle) such Claim.

(b)           In the event any
Indemnified Party should have a claim for indemnification against any
Indemnifying Party (whether such claim does not involve a Claim or involves a
settled or resolved Claim which the Indemnifying Party has not defended for any
reason, or a Claim from which an Indemnified Party has suffered Losses by
reason of the Indemnifying Party’s failure to adequately represent a
Indemnified Party’s interests or otherwise to indemnify the Indemnified Party),
the Indemnified Party shall deliver a notice of such claim to the Indemnifying
Party, setting forth in reasonable detail the identity, nature and estimated
amount of Losses (if reasonably determinable) related to such claim or claims,
with reasonable promptness and in all events prior to the expiration of the
Indemnifying Party’s indemnification obligation hereunder.  If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim described in such notice
or fails to notify the Indemnified Party within 20 days after delivery of such
notice by the Indemnified Party whether the Indemnifying Party disputes the
claim described in such notice, the Loss in the amount specified in the
Indemnified Party’s notice will be conclusively deemed a liability of the
Indemnifying Party and the Indemnifying Party shall pay the amount of such Loss
to the Indemnified Party on demand.  If
the Indemnifying Party has timely disputed its liability with respect to such
claim, the Indemnifying Party and the Indemnified Party will proceed in good
faith to negotiate a resolution of such dispute for a period of at least 30
days before submission of such claim to a court pursuant to Article IX.

 17
 

9.05.        Limitations on
Indemnification.

(a)           Except as provided in
Section 9.05(e), Seller shall have no obligation to provide indemnification
pursuant to Section 9.02(a) until the aggregate amount of Losses with respect
to which the Buyer Indemnified Parties are entitled to indemnification shall
exceed $15,000 (the “Basket”), in
which event Seller shall be obligated to provide indemnification with respect
to all such Losses.

(b)           Buyer shall have no
obligation to provide indemnification pursuant to Section 9.03(a) until
the aggregate amount of Losses with respect to which the Seller Indemnified
Parties otherwise shall have become entitled hereunder shall exceed the Basket,
in which event Buyer shall be obligated to provide indemnification with respect
to all such Losses.

(c)           After the Closing, the
rights set forth in this Article IX shall be each party’s sole and exclusive
remedies against the other parties hereto for misrepresentations or breaches of
covenants contained in this Agreement and the Related Documents.  Notwithstanding the foregoing, nothing herein
shall prevent any Indemnified Party from bringing an action based upon
allegations of fraud with respect to any party in connection with this
Agreement and the Related Documents.  In
the event such action is brought, the prevailing party’s attorneys’ fees and
costs shall be paid by the nonprevailing party.

(d)           Any indemnification
payable under this Article IX shall be, to the extent permitted by law, an
adjustment to the Purchase Price.  Except
as provided in Section 9.05(f), the amount of any indemnification to be paid
(or deemed paid pursuant to the offset rights of Seller provided in subsection
(e) below) pursuant to either of Section 9.02(a) and 9.03(a) shall in no
event, when aggregated with other indemnity payments made hereunder (or deemed
paid pursuant to the offset rights of Seller provided in subsection (e) below)
to the Indemnified Party by the Indemnifying Party, exceed an amount equal to
$5,000,000 (the “Cap”).

(e)           Except in the case of
fraud, intentional misrepresentation, or willful misconduct or Losses
recoverable by a Buyer Indemnified Party pursuant to Section 9.02(d), the
amount of any Losses recoverable by a Buyer Indemnified Party shall first be
offset against amounts outstanding under the Note; provided, however,
that if no amounts are outstanding under the Note (because all amounts owed
thereunder have been offset under this Section 9.05(e), the Note has been
forgiven and fully discharged, all amounts owed have been paid, or any
combination of the foregoing), then Buyer shall have full recourse to Seller
under this Article IX.

(f)            Buyer agrees that the
amount of Losses with respect to which the Buyer Indemnified Parties are
entitled to indemnification as the result of a breach of Sections 4.06, 4.08
and 4.10 shall not be counted in determining whether the Basket has been
exceeded, or the Cap has been reached, for the purposes of recovering any
indemnification to be paid pursuant to Section 9.02(a).  Seller agrees that the amount of Losses with
respect to which the Seller Indemnified Parties are entitled to indemnification
as the result of a breach of Section 5.08 shall not be counted in

 18
 

determining whether the Basket has been
exceeded, or the Cap has been reached, for the purposes of recovering any
indemnification to be paid pursuant to Section 9.03(a).

9.06.        Materiality.  Notwithstanding any provision in this
Agreement to the contrary, in determining an Indemnified Party’s Losses in
connection with a breach of any representation, warranty, covenant or other
agreement included in this Agreement or any of the Closing Agreements, the
amount of Losses to be indemnified shall be determined without regard to any “materiality”
(or correlative meanings) or “Material Adverse Effect” qualifications,
provisions or exceptions set forth in such representation, warranty, covenant
or other agreement but such qualifications, provisions or exceptions will be
given effect for determining whether or not any breach occurred.

ARTICLE
X.

MISCELLANEOUS

10.01.      Press Releases and
Announcements.  Subject to the
following sentence, neither party may issue a press release or make any other
public announcement related to this Agreement or the transactions contemplated
hereby without prior written consent of the other party, except that either
party may make any disclosure or announcement required by applicable law,
including the rules and regulations of Nasdaq and the rules and regulations of
the SEC.  If a party desires to issue a
press release or make a public announcement, the party making such disclosure
shall obtain the prior written consent of the other party (which consent shall
not be unreasonably delayed or withheld) prior to making such disclosure, and
the parties shall use their best efforts, acting in good faith, to agree upon a
text for such disclosure which is satisfactory to each party.

10.02.      Confidentiality Relating
to Agreement.  Neither party shall
disclose this Agreement or the Related Agreements without the prior written
consent of the other party provided, however, that either party may disclose
this Agreement and the Related Agreements to its legal, accounting and tax
advisors; provided, however, that nothing in this Section 10.02 or elsewhere in
this Agreement shall prohibit any party from making any disclosure or filing
such party is required to make under applicable law, including making any
disclosures or filing such party is required to make in accordance with the
Securities Act of 1933 or the Securities Exchange Act of 1934 or any other
applicable rules and regulations of the Securities and Exchange Commission.

10.03.      Expenses.  Except as otherwise expressly provided for
herein, Seller and Buyer will pay all of their own expenses (including
attorneys’ and accountants’ fees) incurred in connection with the negotiation
of this Agreement and the Related Agreements, the performance of their
respective obligations hereunder and thereunder, and the consummation of the
transactions contemplated by this Agreement and the Related Agreements (whether
consummated or not).

10.04.      Further Assurances.  On and after the Closing Date, Seller will
take all appropriate action and execute any documents, instruments or
conveyances of any kind that may be reasonably requested by Buyer to carry out
any of the provisions of this Agreement; provided,

 19
 

however, that Buyer shall be
responsible for any third party costs incurred by Seller in connection with
such request by Buyer.

10.05.      Schedules.  The Disclosure Schedule contains a series of
sections corresponding to the sections contained in this Agreement.  Nothing in the Disclosure Schedule is deemed
adequate to disclose an exception to a representation or warranty made in this
Agreement unless the Disclosure Schedule identifies in the corresponding
schedule the exception with particularity and describes the relevant facts in
detail.  Without limiting the generality
of the foregoing, the mere listing (or inclusion of a copy) of a document or other
item is not deemed adequate to disclose an exception to a representation or
warranty unless the representation or warranty relates solely to the existence
of the document or other item itself. 
The schedules in the Disclosure Schedule relate only to the
representations and warranties in the section and subsection of this Agreement
to which they correspond and not to any other representation or warranty in
this Agreement unless the relevance to such other representations or warranties
is reasonably apparent from the face of the disclosure.

10.06.      Amendment and Waiver.  This Agreement may not be amended, a
provision of this Agreement or any default, misrepresentation or breach of
warranty or agreement under this Agreement may not be waived, and a consent may
not be rendered, except in a writing executed by the party against which such
action is sought to be enforced.  Neither
the failure nor any delay by any party in exercising any right, power or
privilege under this Agreement will operate as a waiver of such right, power or
privilege, and no single or partial exercise of any such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.  In addition, no course of dealing between or
among any party will be deemed effective to modify or amend any part of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement.  The rights and remedies of
the parties to this Agreement are cumulative and not alternative.

10.07.      Notices.  All notices, demands and other communications
to be given or delivered under or by reason of the provisions of this Agreement
will be in writing and will be deemed to have been given when personally
delivered (with written confirmation of receipt), when received if sent by a
nationally recognized overnight courier service (receipt requested), five (5)
business days after being mailed by first class U.S. mail, return receipt
requested, or when receipt is acknowledged by an affirmative act of the party
receiving notice, if sent by facsimile, telecopy or other electronic
transmission device (provided that such an acknowledgement does not include an
acknowledgement generated automatically by a facsimile or telecopy machine or
other electronic transmission device). 
Notices, demands and communications to Buyer and Seller will, unless
another address is specified in writing, be sent to the address indicated
below:

	
  Notices to Buyer:

  	
  with a copy to:

  
	
   

  	
   

  
	
  Atritech, Inc.

  	
  Dorsey & Whitney LLP

  
	
  3750 Annapolis
  Lane, Suite 105

  	
  50 South Sixth Street, Suite 1500

  
	
  Plymouth, MN
  55447

  	
  Minneapolis, Minnesota 55402

  
	
  Attention: Brad
  Swatfager

  	
  Attention: Kenneth L. Cutler, Esq.

  
	
  Facsimile No:
  (763) 258-0253

  	
  Facsimile: (612) 340-2868

  

 

 20
 

 

	
  Notices to Seller:

  	
  with a copy to:

  
	
   

  	
   

  
	
  ev3 Inc.

  	
  Oppenheimer Wolff & Donnelly LLP

  
	
  9600 – 56th Avenue North, Suite 100

  	
  3300 Plaza VII

  
	
  Plymouth,
  Minnesota 55442

  	
  45 South Seventh Street

  
	
  Attention: Kevin
  Klemz, Esq.

  	
  Attention: Phillip B. Martin, Esq.

  
	
  Facsimile No:
  (763) 398-7200

  	
  Facsimile: (612) 607-7100

  

 

10.08.      Binding Effect;
Assignment.  This Agreement and all
of the provisions hereof will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, except
that neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by either party hereto, without the prior written
consent of the other parties hereto; provided, however, that either Buyer or Seller
may assign its rights and obligations hereunder to one of its affiliates but
Buyer or Seller shall remain fully liable to perform its obligations hereunder
if any such assignee shall fail to do so. 
For purposes of clarity, any assignment by Buyer of its rights and
obligations hereunder shall not alter the right of Seller to receive shares of
stock of Buyer (and not such assignee) or any Successor thereto unless Seller
elects to receive shares of such assignee in lieu of shares of stock of Buyer
or any Successor thereto.

10.09.      Severability.  Subject to Section 6.04(d), whenever
possible, each provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

10.10.      Complete Agreement.  This Agreement, the Related Agreements and
Schedules hereto and thereto, the Disclosure Schedule and the other documents
referred to herein contain the complete agreement between the parties and
supersede any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related to the subject matter
hereof in any way.

10.11.      Counterparts.  This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the
same instrument.  A facsimile signature
will be considered an original signature.

10.12.      Governing Law.  The internal law, without regard to conflicts
of laws principles, of the State of Minnesota shall govern all questions
concerning the construction, validity and interpretation of this Agreement and
the performance of the obligations imposed by this Agreement.

10.13.      Jurisdiction.  Each of the parties submits to the exclusive
jurisdiction of any state or federal court sitting in Minneapolis, Minnesota,
in any action or proceeding arising out of or relating to this Agreement and
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court.  Each party
also agrees not to bring any action or

 21
 

proceeding arising out of or relating to this
Agreement in any other court.  Each of
the parties waives any defense of inconvenient forum to the maintenance of any
action or proceeding so brought and waives any bond, surety or other security
that might be required of any other party with respect to any such action or
proceeding.  The parties agree that either or both of
them may file a copy of this paragraph with any court as written evidence of
the knowing, voluntary and bargained agreement between the parties irrevocably
to waive any objections to venue or to convenience of forum.

10.14.      Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
(I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER, (II) IT UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER VOLUNTARILY AND
(IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 11.14.

10.15.      Specific Performance.  Each of the parties acknowledges and agrees
that the subject matter of this Agreement, including the business, assets and
properties of Seller relating to the Applicable Technology, is unique, that the
other parties would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached, and that the remedies at law would not be adequate to
compensate such other parties not in default or in breach.  Accordingly, each of the parties agrees that
the other parties will be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions of this Agreement in addition to any
other remedy to which they may be entitled, at law or in equity (without any
requirement that Buyer provide any bond or other security).  The parties waive any defense that a remedy
at law is adequate and any requirement to post bond or provide similar security
in connection with actions instituted for injunctive relief or specific
performance of this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 22

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

	
  

  	
  Atritech, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Brad Swatfager

  	
   

  
	
   

  	
  By: Brad Swatfager

  
	
   

  	
  Its:  Treasurer/Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ev3 Endovascular, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kevin Klemz

  	
   

  
	
   

  	
  By: Kevin Klemz

  
	
   

  	
  Its:  SecretaryExhibit
10.1

THE GREAT REFRIGERATOR ROUNDUP

PROGRAM
AGREEMENT

Agreement made as of this 15th day of June, 2007.

BETWEEN:

Ontario Power Authority

(hereinafter referred to as the “OPA”)

AND

ARCA Canada Inc. and Appliance Recycling Centers
of America, Inc.

(hereinafter individually and collectively referred to
as the “Service Provider”)

In consideration of the
mutual covenants and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

1. Interpretation

(a) Agreement. When
used herein, the term “Agreement”
means this agreement and all Schedules attached hereto.

(b) Inconsistency.
In the event of any inconsistency between the provisions of this Agreement or
any Schedule to this Agreement, this Agreement will prevail.

2. Retainer and
Services/Deliverables

(a) Retainer. The
Service Provider will be responsible for delivery of the work, services and
deliverables as set forth in the attached Schedules (the “Services”).

(b) Reporting. The
Service Provider will comply with the reporting requirements set forth in
Schedule A.

(c) Service Provider’s
Personnel. All staff of the Service Provider, all independent
contractors, all agents and all staff of any of the foregoing employed in
connection with the Services will have the knowledge, abilities, experience and
qualifications required for the Services and will perform their tasks in a
professional manner and in accordance with the terms and conditions of this
Agreement (including without limitation the obligations set out in Section 8).
The Service Provider will provide such additional support as may be required
from time to time for the completion of the Services and its proper
performance.

(d) Inspection and Warranty.
The OPA will have the right to review the delivery of the Services at all times
and may notify the Service Provider in respect of Services which are found to
be deficient or otherwise not in accordance with specifications and statements
set out in the Agreement or otherwise required by law. The Service Provider, at
no additional cost to the OPA, will promptly fulfill any deficient Services or
provide such remedy or other accommodation as may be appropriate in the
circumstances to the OPA’s satisfaction. This will include, but is not limited
to, all reports, policy manuals, implementation plans and written work
(howsoever recorded, that is, whether written or on digital media) and data
prepared by the Service Provider under the Agreement which are found, within a
period of one year from date of transmittal to the OPA, to be incomplete or
inaccurate due to a failure to comply with the Agreement or with said
specifications and standards.

 1
 

(e) Laws, Regulations and
Codes. The Service Provider and its agents and independent
contractors will comply with all federal, provincial and municipal statutes,
regulations, bylaws, standards and codes which apply to the provision of the
Services and to the Service Provider’s operations in connection with the
performance of the Services.

(f) Assignment or
Subcontracting. The Service Provider will not assign, subcontract or
otherwise delegate the Agreement, or any portion thereof without the express
written consent of OPA, provided however, that the Service Provider may
subcontract its obligations hereunder to third party contractors upon prior
notice to the OPA of the identity of such proposed subcontractors. A change of
control of either ARCA Canada Inc. or Appliance Recycling Centers of America,
Inc. shall be deemed to be an unauthorized assignment hereunder and shall be
grounds for termination of this Agreement.

(g) Conflict of Interest.
The Service Provider is not engaged, and will not engage, in other commercial
activities or retainers which conflict with the Services and/or its obligations
hereunder.

3. Payment

(a) Terms of Payment.
The OPA will pay ARCA Canada Inc. for Services rendered (i) at the prices
and/or rates specified in Schedule A and (ii) at the times specified in
Schedule A and, if no such times are specified, monthly in arrears.

(b) Invoicing.
Charges for Services will be submitted weekly. Invoices will be in such detail
and format as specified by the OPA, and shall include details of all Eligible
Appliances (as defined in Schedule B) which have been decommissioned. Invoices
will be delivered to the address specified in Schedule A and will include the
information specified in Schedule A. Payment of accepted invoices will be made
30 days after receipt thereof. If at any time during the performance of the
Services there are deficiencies in the Services, the OPA will have the right to
withhold from payment in respect of any of the Service Provider’s invoices, an
amount that, in the OPA’s reasonable opinion, takes into account the
above-noted deficiencies. Any amount withheld shall be paid 30 days after
receipt of the Service Provider’s invoice submitted after the OPA’s approval of
the correction of deficiencies, or as soon thereafter as is practicable given
the circumstances.

(c) Taxes. Goods
Services Tax (“GST”) and all other taxes will be shown separately on all
invoices. The Service Provider will deduct all recoverable GST paid from
reimbursable expenses before adding GST to amounts to be invoiced to the OPA.
The OPA has the right to request further details (including copies of
previously submitted invoices or any documentation required in support thereof)
in order to establish its claim for any input tax credit or rebate in respect
of any GST incurred by the OPA in connection with the Agreement. The Service
Provider shall cooperate to the reasonable extent necessary in providing such
documentation to the OPA on a timely basis.

(d) Contractual Currency.
Unless otherwise specified in Schedule A, all payments hereunder will be made
in Canadian dollars.

4. Term and Termination

(a) Term. The term
of the Agreement will be as specified in Schedule A.

(b) Termination by OPA.
The OPA shall be entitled at any time to deliver to the Service Provider a
written notice that the Service Provider is in default of its obligations including
satisfactory discharge of the Performance Standards set out in Schedule C
(a “Notice of Default”). The Notice of Default shall set out the nature of the
default and, if curable within a reasonable time in the sole discretion of the
OPA, a date by which the default is to be cured, which in any event shall not
be longer than 30 days. If the default is not curable, at any time following
the cure period specified in the Notice of Default, and if the default is
curable, at any time following the cure period specified in the Notice of

 2
 

Default if the default was not cured by such time, the
OPA may deliver a notice to the Service Provider terminating the Agreement.

(c) Termination by Service
Provider. The Service Provider shall be entitled at any time to deliver
to the OPA a written notice that the OPA is in default of its payment
obligations hereunder (a “Notice of Payment Default”),
which notice shall specify all relevant particulars of the payment obligation
in respect of which the OPA is in default. Provided that the invoice has been
accepted by the OPA and there is no dispute between the parties relating to
such payment, the Service Provider shall be entitled to terminate the Agreement
on 30 days written notice to the OPA if such payment is not paid to the Service
Provider on or before the 15th day following the date of the Notice of Payment
Default.

(d) Payments on Termination.
Unless otherwise agreed between the Service Provider and the OPA, upon
termination the OPA will be obligated to pay the Service Provider only for
Services provided prior to the expiry of the notice period. The Service
Provider will not undertake any further commitment after receipt of notice of
termination.

(e) Termination upon Expiry.
Either party may terminate this Agreement upon the expiry of the Initial Term
or any renewal term by delivery to the other party notice of termination no
later than 90 days prior to the expiry of such Initial Term or renewal term, as
the case may be.

5. Relationship of the
Parties

(a) No Ability to Bind.
Neither party will have the authority to bind the other or to assume or create
any obligation or responsibility expressed or implied on the other’s part, or
in its name, nor will it represent to anyone that it has such power or
authority, except as expressly provided in the Agreement.

(b) Independent
Business Relationship.

(i)    The Service Provider agrees that the
relationship with the OPA is an independent business relationship and in no way
does the Agreement contemplate or create an employment relationship and/or
entitle the Service Provider to any benefits of employment including, without
limitation, membership in health benefits and pension programs provided to
employees at the OPA. Nor does this Agreement create any partnership or joint
venture with the OPA.

(ii)   As an independent contractor, the Service
Provider is responsible for any and all payments with respect to his, her or
its income and other taxes, insured health benefits coverage, Workplace Safety
and Insurance, Canada Pension Plan, Employment Insurance premiums and costs and
any other costs that may apply.

(iii)  The Service Provider shall cause and bind its
sub-contractors and agents to comply with the terms and conditions set out in
this Agreement to the extent that such sub-contractors are performing any
obligations of the Service Provider hereunder, whether in whole or in part and
whether directly or indirectly. Specifically but without limitation, the
Service Provider shall ensure that all such sub-contractors involved in
appliance pick-up, storage and transportation maintain the minimum levels of
insurance required of the Service Provider hereunder, that they are in
compliance with appropriate legislation, as applicable, with respect to the
storage and transportation of white goods, and that they are bonded or properly
insured.

6. Insurance

(a)          Maintain
Insurance. The Service Provider shall, during the Term, and at its
own expense, maintain and keep in full force and effect:

 3
 

(i) commercial general liability insurance on an
occurrence basis having a minimum inclusive coverage limit, including personal
injury and property damage, of not less than five million dollars
($5,000,000.00) per occurrence. OPA and its designated affiliates must be added
as an additional insured under the insurance policy or policies, which shall be
extended to cover contractual liability, products completed, operations
liability, owners/contractors protective liability and must also contain a
cross liability clause and a severability of interest clause; and

(ii) automobile liability insurance on all owned and
non-owned vehicles used in connection with this Agreement and such insurance
coverage shall have a limit of not less than two million dollars
($2,000,000.00) per vehicle, in respect of bodily injury (including passenger
hazard) and property damage inclusive of anyone accident and mandatory accident
benefits.

(b) The insurance coverage referred to in this
Agreement shall be arranged with insurers acceptable to OPA, acting reasonably,
and shall contain such terms and conditions as are reasonably acceptable to
OPA. It is understood and agreed that the coverage provided by these policies
will not be changed, amended or cancelled without thirty (30) days prior
written notice of such changes, amendments or cancellations being given to OPA,
and provided that OPA agrees to such changes or amendments, and in the case of
cancellations, replacement insurance coverage with an insurance company
acceptable to OPA shall have been put in place prior to the effective date of
cancellation.

(c) If the Service Provider fails to provide or
maintain the insurance as required in this Agreement, OPA shall have the right
to provide and maintain the insurance and give written notice of that fact to
the Service Provider. The cost of providing and maintaining the insurance will
be at the expense of the Service Provider, and the Service Provider shall
reimburse OPA for the amount paid by OPA. Alternatively, OPA may deduct the
cost of such insurance from the monies due or owing to the Service Provider.

(d) In addition to the foregoing the Service Provider
shall (i) obtain cross liability and severability of interest clauses in favour
of the OPA if so requested by the OPA; (ii) provide evidence of insurance and
of the clauses referred to in (i) hereof to the OPA upon request; and (iii)
indemnify and save the OPA harmless in respect of any failure by it to do any
or all of the foregoing. Under no circumstances will the OPA be liable to the
Service Provider or any employee thereof for any failure of the Service
Provider to obtain any insurance necessary or desirable in relation to the
subject matter of the Agreement. Without limitation to the foregoing, the
Service Provider will have insurance in a minimum amount equal to the maximum
aggregate amount payable to the Service Provider under the Agreement.

(e) Workplace Safety
and Insurance Act. If the Service Provider is subject to the
Workplace Safety and Insurance Act (“WISA”), it
shall, upon request of the OPA, submit a valid clearance certificate of WSIA
coverage to the OPA prior to the commencement date of the Agreement. In
addition, the Service Provider covenants and agrees to pay when due, and to
ensure that each of its subcontractors pays when due, all amounts required to
be paid by it/its subcontractors, from time to time during the Term of the
Agreement. The Service Provider will indemnify and save the OPA harmless in
respect of any failure by it to do any or all of the foregoing.

7. Proprietary Rights

(a) Existing
Intellectual Property. Both parties will retain all rights to
existing methodology, knowledge, and data in the possession of the parties
prior to the effective date hereof and used by the parties in the fulfillment
of each party’s respective obligations hereunder. No rights to proprietary interests
existing prior to the start of the Services are transferred hereunder other
than rights to use same as expressly provided for herein. The Service Provider
will not knowingly incorporate into any element of the Services any
intellectual property the use of which by the OPA may violate or infringe upon
the proprietary rights of any third party.

 4
 

(b) Newly Created Intellectual
Property. Except as otherwise set out herein, all title and
beneficial ownership interests to all intellectual property, including
copyright, of any form, including, without limitation, discoveries (patented or
otherwise), software, data (hard copied and machine readable) or processes,
conceived, designed, written, produced, developed or reduced to practice in the
course of the Services will vest in and remain with the OPA. Furthermore, the
Service Provider agrees to waive any moral rights that it has, and/or cause its
employees to waive any moral rights they may have, in the Services. The Service
Provider will not do any act which may compromise or diminish the OPA’s
interests as aforesaid.

(c) License to Use.
The Service Provider grants to the OPA a non-exclusive paid up license to use
any proprietary intellectual property of the Service Provider incorporated into
the Services or any work product related thereto. The OPA will have the right
to exploit such intellectual property and to license same to third parties
(excepting software, other than in respect of grants of access thereto by the
OPA to third parties for uses related to this Agreement) provided that such
licenses contain reasonable reservations of proprietary rights in favour of the
Service Provider (which may be included in a general reservation, but will
contain the same order of legal protection as the Service Provider uses when
distributing such data or property to third parties) or provided the use of
same does not reveal information proprietary to the Service Provider.

(d) Data Ownership.
The parties agree that notwithstanding anything in this Agreement, and subject
to the application of Privacy Laws in Section 8 below, OPA shall own all data,
including Personal Information, pertaining to customers of the Services. The
Service Provider shall own all data relating to transportation and
decommissioning operations and shall disclose such information to OPA upon
request. Raw data relating to appliances, including the number, make, model,
age, energy consumption and disposition of materials shall be jointly owned by
the parties.

8. Compliance with Privacy
Laws and Confidentiality

(a) Personal Information and
Privacy Laws. In this section, “Personal Information”
means any information about an identifiable individual, which before or after
the date of the Agreement, is exchanged, disclosed, transferred, stored,
warehoused, accessed, processed, handled or in any way made available to the
Service Provider. “Privacy Laws”
includes the Personal Information Protection and Electronic Documents Act
(Canada), Freedom of Information and Protection of Privacy (Ontario), and the
provisions of any other applicable municipal, provincial or federal or other
laws, regulations, decisions, orders, judgments and rulings or regulatory
requirements applicable to either party to the Agreement from time to time that
address the collection, use, transfer or disclosure of Personal Information.

(b) Compliance with Privacy
Laws. The Service Provider agrees to comply with all Privacy Laws
applicable to either it or the OPA in relation to Personal Information and
shall refrain from taking any action that could cause the OPA to be in non-compliance
with any such Privacy Laws. The Service Provider agrees to name a person (or
persons) to be responsible for ensuring compliance with the obligations of this
section and shall advise the OPA of the name of such individual and any
replacement(s). The Service Provider agrees to cooperate with the OPA in
connection with any access requests for Personal Information as provided for in
the Privacy Laws. The Service Provider agrees to amend Personal Information as
required by the Privacy Laws, only upon receiving instructions to do so from
the OPA, its personnel or any other individual to whom the Personal Information
relates. The Service Provider agrees, within 10 business days, to return to the
OPA or destroy all Personal Information that is no longer necessary to fulfill
the purpose(s) for which it was made available, unless otherwise instructed by
the OPA or required by law.

(c) Confidentiality.

(i)             Each
party agrees not to divulge or communicate to any person or use for a purpose
other than delivering the Services required under this contract without the
other party’s prior written consent, any confidential, technical or
commercially sensitive information

 5
 

belonging to either party or its officers,
stakeholders and/or third parties (the “Confidential Information”),
whenever received by the receiving party and in whatever capacity. For the
purposes of this clause, and by way of illustration and not limitation,
information is prima facie secret and confidential if it relates to either the
OPA’s or its respective stakeholders and/or third party contractors: power
system planning information, business methods and strategies; production and
delivery capabilities; customers and details of their particular requirements;
costings, profit margins, and other financial information of any nature;
marketing strategies and tactics; current activities and current and future
plans relating to any or all developments; and any information relating to the
purpose, nature and provisions of this Agreement.

(ii)  The
receiving party shall limit the disclosure of the Confidential Information to
only those of its employees who have a need to know it and who have been
specifically authorized to have such disclosure. The receiving party shall
return all of the Confidential Information once the receiving party has
completed its Services under this contract and shall not retain any copies of
the Confidential Information unless required legally to do so.

(iii) Except as
required in the performance of the Services or as authorized in writing by the
owner, or as required by applicable law, each party will keep confidential all
Confidential Information of the other.

(iv) Except for
disclosures required by law, each party shall be responsible for any breach of
this Agreement by the party, its representatives and any person to whom it
discloses any Confidential Information. The parties agree that a party would be
irreparably injured by a disclosure of Confidential Information and that
monetary damages would not be a sufficient remedy. Therefore, in such event,
the Disclosing Party shall be entitled to equitable relief, including
injunctive relief without proof of actual damages, as well as specific
performance. Such remedies shall not be deemed to be exclusive remedies for a
breach of this Agreement but shall be in addition to all other remedies
available at law or equity.

(v)  These
restrictions will continue to apply after the termination of this Agreement,
without limit in time but will cease to apply to information which enters the
public domain otherwise than through unauthorized disclosure by the Service
Provider.

9. Offshore Consultants;
Non-residents

(a) Permits, etc.
If applicable, the Service Provider is responsible for applying, at its own
expense, to Immigration Canada for admission of personnel into Canada and for
obtaining work permits where required.

(b) Withholding
Tax. All payments made by the OPA to non-residents of Canada will be
made net of any required taxes or withholdings.

10. Environmental Credits,
etc.

(a)                          In this Agreement, the following terms shall have the meanings set out
below:

(i)                                     “Emission Reduction Credits”  means the credits associated with the
avoidance or reduction of emissions below the lower of actual historical
emissions or regulatory limits, including “emission reduction credits” as
defined in O. Reg. 397/01 made under the Environmental Protection Act (Ontario)
or such other regulations as may be promulgated under the Environmental
Protection Act (Ontario) or any currently applicable or future laws and
regulations,

 6
 

(ii)                                          “Environmental Attributes”  means environmental attributes having
decreased environmental impacts now or in the future, and the right to quantify
and register these with competent authorities, including:

(1)          all right, title,
interest and benefit in and to any renewable energy certificate, credit,
reduction right, offset, allocated pollution right, emission reduction
allowance or other proprietary or contractual right, whether or not tradable,
resulting from the actual or assumed displacement of emissions resulting from
the Program;

(2)          rights to any fungible
or non-fungible attributes or entitlements relating to environmental impacts,
whether arising from the Program itself or because of applicable legislation or
voluntary programs established by Governmental Authorities; and

(3)          all revenues,
entitlements, benefits, and other proceeds arising from or related to the foregoing
which may be available in connection with the Program.

For greater certainty, in the event that any
governmental or non-governmental agency, whether provincial, federal, national
or international in scope or authority, creates or sanctions a registry,
trading system, credit, offset or other program relating to Environmental
Attributes or their equivalent, the term “Environmental Attributes” as used in
this Agreement shall include the rights or benefits created or sanctioned under
any such program or programs to the extent available as a result of, or arising
from the Program.

(iii)                                       “Governmental Authority” means any federal, provincial, or
municipal government, parliament or legislature, or any regulatory authority,
agency, tribunal, commission, board or department of any such government,
parliament or legislature, or any court or other law, regulation or rule-making
entity, having jurisdiction in the relevant circumstances, including the
Independent Electricity System Operator, the Ontario Energy Board, the
Electrical Safety Authority, and any person acting under the authority of any
Governmental Authority, but excluding the OPA.

(b)   The right, title, benefit and
interest in and to any Emission Reduction Credit and Environmental Attributes
directly or indirectly relating to or arising from or in connection with the
Program shall accrue solely to the benefit of the OPA and the Service Provider
hereby agrees and acknowledges that it shall have no claim whatsoever to any
such credits or attributes. The Service Provider agrees to provide to the OPA
all such assistance, including information and data, as may be reasonably
requested by the OPA in order to benefit from and avail itself of any Emission
Reduction Credits and Environmental Attributes.

(c)    Upon request by the OPA, the
Service Provider agrees to use commercially reasonable efforts, and shall be reimbursed
by the OPA for all reasonable expenses incurred by the Service Provider in
respect thereof, to obtain, register, certify or deliver the Environmental
Attributes or any evidence of the OPA’s right, title and interest thereto to
the OPA or to any Person as the OPA may direct, on behalf, or for the benefit,
of the OPA. Without limiting the generality of the foregoing, the Service
Provider shall from time to time during and after the term hereof, on behalf
and in the name of or in trust for the OPA, upon request by the OPA, use
commercially reasonable efforts to obtain, quantify, verify, certify and
register with the relevant Governmental Authorities or other agencies all
Emission Reduction Credits and Environmental Attributes.

11. Force Majeure.

If the performance of the
Agreement, or any obligations hereunder, is materially prevented, restricted,
or interfered with by reason of: fire, flood, earthquake, explosion, or other
casualty or accident or act of God; strikes or labour disputes; inability to procure
or obtain delivery of parts, supplies, power or software from suppliers;
failure, delay, interruption or other adverse impact caused by
telecommunications carriers,

 7
 

internet service providers, and other intermediaries;
war or other violence; any law, order proclamation, regulation, ordinance,
demand or requirement of any governmental authority; or any other act or
condition whatsoever beyond the reasonable control of the affected party (a “Force
Majeure”), the party so materially affected, upon giving prompt notice to the
other party, will be excused from such performance to the extent of the
material delay caused by such prevention, restriction or interference;
provided, however, that the party so affected will take all reasonable steps to
avoid or remove such Force Majeure and will resume performance hereunder with
dispatch whenever such causes are removed.

12. Accounts and
Right to Audit

The Service Provider will keep proper accounts and
records of the work in form and detail satisfactory to the OPA. Such accounts
and records, including invoices, receipts, time cards and vouchers will at all
reasonable times be open to audit, inspection and copying by OPA. Accounts and
records will be preserved and kept available for audit until the expiration of two
years from the date of completion or termination of the work. Service Provider
grants OPA the right upon 24 hours notice and during regular business hours to
inspect the Service Provider’s premises, and have access to its files, records,
systems, data and computer networks for the purposes of verifying procedures
and compliance with the terms and conditions of this Agreement.

13. Indemnification

The Service Provider and each of them jointly and
severally agrees to indemnify the OPA, its officers, directors, employees and
agents and save them harmless from and against any and all loss, damage or
injury and all actions, causes of action, proceedings, suits, claims, demands,
obligations and liabilities, including payments, fines, penalties, interest and
any other financial costs in any way attributable to, related to or arising out
of:

(a)    breaches of the Service
Provider’s obligations herein;

(b)   any misrepresentation,
inaccuracy, incorrectness or breach of any representation or warranty made by
the Service Provider contained in this Agreement;

(c)    any of the Service Provider’s
acts or omissions, whether negligent or otherwise, including any acts or
omissions of any of its agents, employees, representatives or independent
contractors;

(d)   any actual or alleged failure
of the OPA to deduct, withhold or contribute any amount in respect of its
payments to the Service Provider, including without limitation, federal and/or
provincial income taxes, pension plan contributions, employment insurance
premiums, Workplace Safety and Insurance premiums and contributions under any
federal or provincial income security program;

(e)    any failure of the Service
Provider to ensure that materials derived from the decommissioning of appliances
are handled in a manner consistent with this Agreement and applicable law; and

(f)      the insurance and workers
safety insurance obligations set out in Section 6.

14. Arbitration

All disputes between the
parties shall be settled by binding arbitration in accordance with provision of
the Arbitrations Act, 1991
(Ontario) and the national arbitration rules of the ADR Institute of Canada.
The arbitration tribunal shall consist of one arbitrator appointed by mutual
agreement of the parties. In the event of failure to agree within three (3)
Business Days following delivery of a written notice to arbitrate, each of the
parties to the dispute shall designate an arm’s-length third party within a
further three (3) Business Days who together shall agree upon and appoint an
arbitrator. In the event such third parties fail to appoint the arbitrator
within three (3) Business Days after their appointment, either party may apply
to a judge of the Ontario Superior Court of Justice to appoint an arbitrator.
The arbitrator shall be instructed

 8
 

that time is of the essence in the arbitration
proceeding and, in any event, the arbitration award must be made within fifteen
(15) Business Days after the arbitrator has been appointed. The arbitration
shall take place in Toronto, Ontario and shall be conducted in English. The arbitration
award shall be given in writing and shall be final and binding on the parties,
not subject to any appeal (other than those limited rights of appeal set forth
in the Arbitration Act, 1991 (Ontario)), and shall deal with the question of
costs of arbitration and all related matters. The costs of arbitration include
the arbitrators’ fees and expenses, the provision of a reporter and
transcripts, reasonable legal fees and reasonable costs of preparation.

15. Miscellaneous

(a)       Entire Agreement. The Agreement constitutes
the entire agreement and understanding of the parties with respect to its
subject matter and supersedes all oral communication and prior writings with
respect thereto. There are no warranties, conditions, or representations, express
or implied, and there are no agreements in connection with such subject matter
except as specifically set forth or referred to in the Agreement. No reliance
may be placed on any warranty, representation, opinion, advice or assertion of
fact made either prior to, contemporaneous with, or after entering into this
Agreement, or any amendment or supplement thereto, by any party hereto or its
directors, officers, employees or agents, to any other party hereto or its
directors, officers, employees or agents, except to the extent that the same
has been reduced to writing and included as a term of the Agreement, and none
of the parties hereto has been induced to enter into the Agreement or any
amendment or supplement by reason of any such warranty, representation, opinion,
advice or assertion of fact.

(b)       Amendments. No amendment, modification or
waiver in respect of the Agreement will be effective unless in writing
(including a writing evidenced by a facsimile transmission) and executed by
each of the parties.

(c)       No Waiver of Rights. A failure or delay in
exercising any right, power or privilege in respect of the Agreement will not
be presumed to operate as a waiver, and a single or partial exercise of any
right, power or privilege will not be presumed to preclude any subsequent or
further exercise, of that right, power or privilege or the exercise of any
other right, power or privilege.

(d)       Further Assurances. Each of the parties
shall, from time to time, on written request of the other party, do all such
further acts and execute and deliver or cause to be done, executed and
delivered all such further things as may be reasonably required in order to
fully perform and to more effectively implement the terms of the Agreement. The
parties recognize that there may be additional costs for said improvements and
these costs will be negotiated separately.

(e)       Headings. The headings used in the
Agreement are for convenience of reference only and are not to affect the
construction of or be taken into consideration in interpreting the Agreement.

(f)
      Severability.
If any provisions of the Agreement will for any reason be held illegal or unenforceable,
such provision will be deemed separable from the remaining provisions of the
Agreement and will in no way affect or impair the validity or the
enforceability of the remaining provisions of the Agreement.

16. Governing Law.

The Agreement shall be governed by, and interpreted in
accordance with, the laws of the Province of Ontario including the laws of Canada
as applicable therein and each party irrevocably and unconditionally submits to
the non-exclusive jurisdiction of the courts of such province and all courts
competent to here appeals therefrom.

 9
 

17. Notices

(a)       Effectiveness. Any notice or other communication
in respect of the Agreement may be given in any manner described below to the
address or number or in accordance with the email details set forth in Schedule
A and will be deemed effective as indicated:

(i)               if
in writing and delivered by person or by courier, on the date it is delivered;

(ii)              if sent by facsimile transmission,
on the date it is received by a responsible employee of the recipient in
legible form (it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the sender’s
facsimile machine);

(iii)             if sent by certified or registered
mail or the equivalent (return receipt requested), on the date it is delivered
or delivery is attempted; or

(iv)             if
sent bye-mail, on the date it is delivered.

(b)       Invoices. Notwithstanding the foregoing
invoices may be delivered and will be effective upon actual receipt by the OPA.

(c)       Change of Details. Either party, may by
notice to the other, change the address, facsimile number or email details at
which notices or other communications are to be given to it.

18. Execution of
Agreement

(a)      
Counterparts. The Agreement may be
executed in one or more counterparts, each of which will be deemed to be an
original copy of the Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement.

(b)       Facsimile. The exchange of copies of the
Agreement and of signature pages by facsimile or e­mail (in web browser
compatible format) transmission shall constitute effective execution and
delivery of the Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes.

(c)
      Signatures. Signatures
of the parties transmitted by facsimile or e-mail (in web browser compatible
format) shall be deemed to be their original signatures for any purposes
whatsoever.

[Signature lines are on the following page.]

 10

IN WITNESS WHEREOF the parties hereto execute the
Agreement under the hands of their respective proper officers duly authorized
on their behalf, with effect from the date specified on the first page of this
document.

ONTARIO
POWER AUTHORITY

 

	
  By:
  

  	
  /s/ R. Paul Shervill

  	
   

  
	
   

  	
  Name:

  	
  R. Paul Shervill

  
	
   

  	
  Title:

  	
  Vice-President, Program Operations and Sector
  Development

  
				

 

 

	
  ARCA CANADA INC.

  	
   

  	
  APPLIANCE RECYCLING CENTERS OF

  AMERICA, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Edward R. Cameron

  	
   

  	
  By: 

  	
  /s/ Edward R. Cameron

  	
   

  
	
   

  	
  Name:

  	
  Edward R. Cameron

  	
   

  	
   

  	
   Name:

  	
  Edward R. Cameron

  
	
   

  	
  Title:

  	
  President

  	
   

  	
   

  	
   Title:

  	
  President

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