Document:

Unassociated Document

    Exhibit
10.70

     

    
      

       

      [Bank of
America Letterhead]

       

    

     

    February
23, 2009

     

    ArthroCare
Corporation

    7500
Rialto Boulevard

    Building
Two, Suite 100

    Austin,
Texas 78735

    
      	
              Attention:

            	
              Mr.
      Jeffrey Templer

              Mr. Richard Rew, Senior Vice-President and General
      Counsel

            

    

     

    
      	
              
              

            	
              Re:
      

            	
              Credit
      Agreement dated as of January 13, 2006 (as amended by that certain First
      Amendment dated as of December 18, 2007, that certain Second Amendment and
      Consent dated as of November 26, 2008, that certain Waiver dated as of
      January 16, 2009 and as further amended, restated, supplemented or
      otherwise modified prior to the date hereof, the "Credit
      Agreement") by and among ArthroCare Corporation, a Delaware
      corporation, as Borrower (the "Borrower"), the
      banks and other financial institutions party thereto from time to time, as
      Lenders (the "Lenders") and
      Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C
      issuer (the "Administrative
      Agent"), Each capitalized term used herein but not defined herein
      shall be defined in accordance with the Credit
  Agreement.

            

    

     

    Dear
Messrs. Templer and Rew:

     

    As you
are aware, the Borrower recently provided the Administrative Agent with certain
updated financial information in the form of a power point presentation prepared
by the Borrower for the Lenders. In addition, on February 17, 2009, you provided
us with a draft press release which was then released to the public (in
substantially similar form) on February 18, 2009. After reviewing the foregoing
items and other information, this letter is to inform you that, as of the date
of this letter, the following Events of Default exist under the Credit Agreement
(collectively, the "Existing Events of
Default"):

     

    (a)    Events of
Default under Section
8.01(b) of the Credit Agreement resulting from the Borrower's failure to
comply with Section
7.12(c) of the Credit Agreement for the fiscal quarters ended as of March
31, 2008, June 30, 2008 and September 30, 2008;

     

    (b)    Events of
Default under Section
8.01(c) of the Credit Agreement resulting from:

     

    
      	
              
              

            	
              (i)

            	
              the
      Borrower's failure to comply with the requirements set forth in Section 6.08 of the
      Credit Agreement; and

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ArthroCare
Corporation 

    
      February
23, 2009 

      Page
2

       

    

    
      
        
          	
                  
                  

                	
                  (ii)

                	
                  the
      Borrower's failure to comply with the requirements set forth in that
      certain Consent dated as of May 17, 2007 (the "Consent")
      related to the Beam One Loan (as defined in the Consent) and the Factoring
      Arrangement (as defined in the
Consent);

                

        

      

      

      in each
case with respect to the foregoing clauses (i) and (ii), which failures by the
Borrower have continued for at least thirty (30) days in each instance;
and

      

      (c)    an Event of
Default under Section
8.01(d) of the Credit Agreement resulting from incorrect and/or
misleading representations made under Sections 5.01(d), 5.05(c), 5.05(d), and 5.16.

      

      This is
to further notify you that, by virtue of the existence of the Existing Events of
Default, and in addition to any pertinent provision of any other Loan Document,
the Administrative Agent and the Lenders are not required to honor (and
presently do not intend to honor) any Credit Extension (other than a
continuation or conversion of an existing Eurocurrency Rate Loan or the possible
extension/renewal of an existing Letter of Credit).

      

      While the
Administrative Agent and the Lenders are not presently exercising any other
rights, powers, or remedies available to them with respect to the Existing
Events of Default described above, nothing contained herein shall be deemed to
constitute any waiver by the Administrative Agent or the Lenders of any such
Events of Default, and the Administrative Agent, on behalf of itself and the
Lender, hereby expressly reserves all rights, powers, and remedies, and shall be
entitled, to pursue at any time and from time to time, without notice, demand or
any other action, any and all rights, powers, and/or remedies provided under the
Credit Agreement and/or the other Loan Documents, at law, in equity or
otherwise, whether or not with respect to any Existing Events of Default or any
other Events of Default, all in the sole and absolute discretion of the
Administrative Agent and the Lenders. Neither this letter nor any other
communication between the Administrative Agent and/or the Lenders, on the one
hand, and the Borrower, on the other hand, shall be construed as a consent,
waiver, forbearance or other modification with respect to any term, condition or
other provision of the Credit Agreement and/or any other Loan Document. Neither
this letter, any other communication between the Administrative Agent and/or the
Lenders, on the one hand, and the Borrower, on the other hand, nor any act or
omission on the part of the Administrative Agent and/or the Lenders constitutes,
or shall be deemed to constitute, a course of conduct or a course of dealing so
as to justify an expectation by the Borrower that the Administrative Agent and
the Lenders will not exercise any rights or remedies available to them with
respect to any Existing Event of Default, any other existing Event of Default or
any subsequent Event of Default or an expectation by the Borrower that the
Administrative Agent and the Lenders will waive any Existing Event of Default,
any other existing Event of Default or any subsequent Event of
Default.

      

      Without
limiting the generality of the foregoing, nothing contained herein is intended
to or shall be deemed to constitute any binding commitment or other agreement on
behalf of the Administrative Agent or the Lenders to enter into any amendment to
the Credit Agreement or any forbearance or other type of agreement with respect
to the Existing Events of Default or any other Events of Default, including,
without limitation, to extend any funding or loan commitment

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ArthroCare
Corporation

      
        February
23, 2009

        Page
3

      

      
         

        pursuant
to any such amendment or other type of agreement. As conspicuously set forth in
the Credit Agreement, only terms in writing executed by the Administrative Agent
and the requisite Lenders (and not other terms or oral promises) are enforceable
against the Administrative Agent or the Lenders.

         

        As we
have discussed with you, the undersigned now has primary day-to-day
responsibility for the administration of this credit at the Administrative
Agent, and accordingly, communications under Section 10.02 of the Credit
Agreement should be directed to his attention. The Administrative Agent also has
retained special counsel in connection with this matter, who should also be
included in any such communications at the following address: Mayer Brown LLP,
71 South Wacker Drive, Chicago, Illinois 60606-4637, Attention: Thomas S.
Kiriakos (#######@#########).

         

         

        Sincerely,

         

        BANK OF
AMERICA, N.A., as Administrative Agent on behalf of the Lenders

         

        By : /s/ David Maiorella

        Name:
David Maiorella 

        Title:
Senior Vice President 

        (###)
###-####Unassociated Document

    Exhibit
10.71

    

    GENERAL RELEASE AND
SEPARATION AGREEMENT

    

    This
General Release and Separation Agreement (hereafter “Agreement”) is
entered into between John Raffle (the “Executive”), and
ArthroCare Corporation (the “Company”)
(collectively referred to as the “Parties”), effective
eight days after the Executive’s signature (the “Effective Date”),
unless he revokes his acceptance as provided in Paragraph 8(b),
below.  The Company shall have no right to revoke this
Agreement.

    

    WHEREAS,
the Executive was the Senior Vice President, Strategic Business Units of the
Company pursuant to the terms of an Employment Agreement effective as of
April 21, 2008 (the “Employment
Agreement”);

    

    WHEREAS,
the Company reported on December 19, 2008, by press release, that the Executive
had tendered his resignation (the “Press
Release”);

    

    WHEREAS,
the Company and the Executive now wish to document the termination of their
employment relationship and fully and finally to resolve all matters between
them;

    

    THEREFORE,
in exchange for the good and valuable consideration set forth herein, the
adequacy of which is specifically acknowledged, the Executive and the Company
hereby agree as follows:

    

    1.           Resignation of
Employment.  The Parties hereto confirm the termination of
Executive’s employment and all positions that the Executive held as an officer
of the Company and all subsidiaries of the Company, effective at the close of
business on December 18, 2008 (the “Termination Date”).

    

    2.           Payment of Accrued Wages and
Expenses.  The Executive has been paid an amount equal to all
accrued wages through the Termination Date, including accrued, unused vacation
or paid time off, less applicable withholding, and all expenses incurred and
submitted for reimbursement for events prior to December 31, 2008.

    

    3.           Bonus for the Calendar Year
Ended December 31, 2008.  The Executive agrees that he shall
not be eligible for a bonus for the calendar year ended December 31,
2008.

    

    4.           Separation Payment;
Benefits.  Within three (3) days of the Effective Date, the
Company shall pay the Executive $75,000 (seventy-five thousand dollars) (the
“Separation Payment”), less all applicable taxes and other authorized
withholding.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.           Consulting
Services.  For a period commencing with the Effective Date and
continuing thereafter for a period of eleven (11) consecutive months (the “Retained Consultant
Period”), the Executive shall provide assistance to the Company at its
reasonable request (“Litigation
Assistance”) in conjunction with Arthrocare Corporation v. Gyrus Medical,
Inc., Gyrus Ent, L.L.C., and Gyrus Acmi, Inc., Case No. 1:07-CV-00729-SLR in the
United States District Court for the District of Delaware, and the related
arbitration between Gyrus Group, PLC, Ethicon, Inc. and ArthroCare (collectively
referred to herein as the “Litigation”).  In
providing Litigation Assistance to the Company, the Executive agrees that he
shall function as an independent contractor, and not as an employee of the
Company.  During the Retained Consultant Period, the Company shall pay
the Executive $3,500 (three thousand five hundred dollars) per calendar month
(or partial month), in advance (within five (5) days of the Effective Date for
the first month and on the first of the month thereafter) for Litigation
Assistance hereunder.  The aggregate amount paid for Litigation
Assistance shall not exceed $40,000 (forty thousand dollars).  During
the Retained Consultant Period, Executive shall not be obligated to devote more
than fifteen (15) hours in any calendar month (or any partial calendar month) to
the performance of Litigation Assistance.  The Company may terminate
Executive’s obligation to provide Litigation Assistance upon the earlier of (a)
the settlement, trial, or other resolution of the Litigation, or (b) the
Company’s written notification to the Executive of termination of the Litigation
Assistance; provided, however, if at the time of such termination, Executive has
been paid less than $30,000 (thirty thousand dollars) for Litigation Assistance
hereunder, then the Company shall be obligated to pay a termination fee equal to
the difference between what the Executive has actually been paid for Litigation
Assistance and $30,000 (thirty thousand dollars).  It is further
provided that Executive may terminate his obligation to provide Litigation
Assistance upon giving thirty (30) days’ advance written notice.

    

    6.           Tax
Indemnity.  The Executive acknowledges that he has not received and
does not rely upon any tax advice given by the Company or its attorneys or
representatives.  The Executive further agrees that he shall be solely
responsible for all tax assessments, penalties, and fines levied against the
payments made pursuant to this Agreement by any taxing authority, and shall
indemnify, defend and hold harmless (all to the maximum extent allowed by law)
the Company against all tax assessments, penalties, and fines assessed by any
taxing authority against the Company as a result of (a) the Executive’s
characterization of the Settlement Payment made pursuant to this Agreement, or
(b) any failure by the Executive to pay taxes as required on any and all
payments made pursuant to this Agreement.

    

    7.           Equity
Awards.  All equity awards granted to the Executive shall be treated
in accordance with the terms of the applicable Plan(s), Agreement(s) and
Notice(s) of Grant, and such rights shall survive the execution of this
Agreement, and are not merged or integrated into this Agreement.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8.           General Release of Claims by
the Executive.

    

    (a)           The
Executive, on behalf of himself and his executors, heirs, administrators,
representatives and assigns, hereby agrees to release and forever discharge the
Company and all predecessors, successors and their respective parent
corporations, affiliates, related, and/or subsidiary entities, and all of their
past and present investors, directors, shareholders, officers, general or
limited partners, employees, attorneys, agents and representatives, and employee
benefit plans in which the Executive is or has been a participant by virtue of
his employment with the Company, from any and all claims, debts, demands,
accounts, judgments, rights, causes of action, equitable relief, damages, costs,
charges, complaints, obligations, promises, agreements, controversies, suits,
expenses, compensation, responsibility and liability of every kind and character
whatsoever (including attorneys’ fees and costs), whether in law or equity,
known or unknown, asserted or unasserted, suspected or unsuspected
(collectively, “Claims”), which the Executive has or may have had against such
entities based on any events or circumstances arising or occurring on or prior
to the date hereof or on or prior to the Termination Date, arising directly or
indirectly out of, relating to, or in any other way involving in any manner
whatsoever the Executive's employment by the Company or the separation thereof,
and any and all claims arising under federal, state, or local laws relating to
employment, including without limitation claims of wrongful discharge, breach of
express or implied contract, fraud, misrepresentation, defamation, or liability
in tort, claims of any kind that may be brought in any court or administrative
agency, any claims arising under Title VII of the Civil Rights Act; the Civil
Rights Act of 1866; the Sarbanes-Oxley Act; the Age Discrimination in Employment
Act; the Equal Pay Act; the Fair Labor Standards Act; the Employee Retirement
Income Security Act; the Americans with Disabilities Act; the Family Medical
Leave Act; and/or any other local, state or federal law governing discrimination
in employment and/or the payment of wages and benefits; and claims arising under
the Employment Agreement.  Notwithstanding the generality of the
foregoing, the Executive does not release the following claims and rights, and
same shall survive the execution of this Agreement and are not merged or
integrated into this Agreement:

    

    (i)           Claims
for unemployment compensation or any state disability insurance benefits
pursuant to the terms of applicable state law;

    

    (ii)           Claims
to continued participation in certain of the Company's group benefit plans
pursuant to the terms and conditions of the federal law known as
COBRA;

    

    (iii)          The
Executive’s right to bring to the attention of the Equal Employment Opportunity
Commission claims of discrimination; provided, however, that the Executive does
release his right to secure any damages for alleged discriminatory treatment;
and

    

    (iv)          The
Executive’s rights under this Agreement, his rights as a shareholder, and his
rights to indemnification (and advancement of expenses) from the Company
pursuant to the terms of the Indemnification Agreement entered into between the
Company and the Executive, common law, statute, charter, bylaws or otherwise,
all as they currently exist.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (v)           Coverage
pursuant to otherwise applicable D&O or other insurance policies currently
or hereafter maintained by the Company.

    

    (b)           In
accordance with the Older Workers Benefit Protection Act of 1990, the Executive
acknowledges that he is aware of the following:

    

    (i)           
This Section 8, and this Agreement are written in a manner calculated to be
understood by the Executive.

    

    (ii)           The
waiver and release of claims under the Age Discrimination in Employment Act
contained in this Agreement does not cover rights or claims that may arise after
the date on which the Executive signs this Agreement.

    

    (iii)           This
Agreement provides for consideration in addition to anything of value to which
the Executive is already entitled.

    

    (iv)           The
Executive has been advised to consult an attorney before signing this
Agreement.

    

    (v)          
 The Executive has been granted forty-five (45) days after he is presented
with this Agreement to decide whether or not to sign this
Agreement.  If the Executive executes this Agreement prior to the
expiration of such period, he does so voluntarily and after having had the
opportunity to consult with an attorney, and hereby waives the remainder of the
consideration period.

    

    (vi)           The
Executive has the right to revoke this Agreement within seven (7) days of
signing it.  In the event this Agreement is revoked, it will be null
and void in its entirety, and the Executive will not receive the benefits of
this Agreement.

    

    If the
Executive wishes to revoke this Agreement, he must deliver written notice
stating that intent to revoke, in accordance with the notice provisions of
Section 15, on or before 5:00 p.m. on the seventh (7th) day
after the date on which the Executive signs this Agreement.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.          
 Nondisparagement.  The
Executive agrees that he shall not disparage or otherwise communicate untrue
negative statements or opinions about the Company, its Board members, officers,
employees or business and the Company agrees that neither its Board members nor
officers shall disparage or otherwise communicate untrue negative statements or
opinions about the Executive; provided, that nothing herein shall preclude
truthful statements made to law enforcement, regulatory or other governmental
personnel, or in response to a subpoena, court order, or similar process, or
otherwise required by law.  In the event Company is contacted by any
person or entity that has or is considering employing or entering into a
business relationship with the Executive, the Company shall confirm only the
dates of the Executive’s employment and his last job title.

    

    10.           Nonsolicitation
Covenants.  For a period of 12 months after the Effective Date,
the Executive shall not do any of the following without the prior written
consent of the Company’s Board of Directors:

    

    (a)           Solicit
Business.  Solicit or influence or attempt to influence any client,
customer or other person, either directly or indirectly, to direct his or its
purchase of the Company’s products and/or services to any person, firm,
corporation, institution or other entity in competition with the business of the
Company (which for the avoidance of doubt does not prohibit the solicitation of
customers for sales of products that are not the same or similar to those
protected by the Company’s or its subsidiaries’ intellectual property rights as
set forth in 10(a) above); and

    

    (b)           Solicit
Personnel.  Solicit or influence or attempt to influence any person
employed by the Company to terminate or otherwise cease his employment with the
Company or become an employee of any competitor of the Company.

    

    11.           Executive’s Representations
and Warranties.  The Executive represents and warrants
that:

    

    (a)           He
has been paid all wages owed to him by the Company, including all accrued,
unused vacation or paid time off, through the Termination Date;

    

    (b)           During
the course of the Executive’s employment, he did not sustain any injuries for
which he might be entitled to compensation pursuant to applicable workers
compensation law;

    

    (c)           The
Executive has not initiated any adversarial proceedings of any kind against the
Company or against any other person or entity released herein.

    

    12.           Confidential Information;
Return of Company Property.  The Executive hereby expressly
confirms his continuing obligations to the Company pursuant to the Employment,
Proprietary Information and Invention Assignment Agreement (the “Confidentiality
Agreement”) executed by the Executive on November 23, 1999, a copy of which is
attached as Exhibit A hereto and incorporated by reference herein.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
Executive shall deliver to the Company within 10 days of the Effective Date all
originals and copies of correspondence, drawings, manuals, letters, notes,
notebooks, reports, programs, plans, proposals, financial documents, or any
other documents concerning the Company’s customers, business plans, marketing
strategies, products, processes or business of any kind and/or which contain
proprietary information or trade secrets which are in the possession or control
of the Executive or his agents or representatives, provided that Executive may
retain copies of any documents created or obtained by Executive which relate to
the Investigation or the facts or circumstances which form the basis for the
Investigation.

    

    It is
expressly agreed that Executive shall retain possession and is hereby given
ownership of the cell phone (and related telephone number) he used while at the
Company.  The Executive represents that, with the exception of said
cell phone, he has returned to the Company all equipment issued to him, and has
no Company equipment in his possession or control.

    

    13.           In the Event of a Claimed
Breach.  All controversies, claims and disputes arising out of
or relating to this Agreement, including without limitation any alleged
violation of its terms, shall be resolved by final and binding arbitration
before a single neutral arbitrator in Austin, Texas in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association
(“AAA”). The arbitration shall be commenced by filing a demand for arbitration
with the AAA within 14 (fourteen) days after the filing party has given notice
of such breach to the other party.  The arbitrator shall award the
prevailing party attorneys’ fees and expert fees, if
any.  Notwithstanding the foregoing, it is acknowledged that it will
be impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations imposed on them under Section
12(a)  and (b) hereof, and that in the event of any such failure, an
aggrieved person will be irreparably damaged and will not have an adequate
remedy at law.  Any such person shall, therefore, be entitled to
injunctive relief, including specific performance, to enforce such obligations,
and if any action shall be brought in equity to enforce any of the provisions of
Section 12(a) and (b) of this Agreement, none of the parties hereto shall raise
the defense that there is an adequate remedy at law.

    

    14.           Choice of
Law.  This Agreement shall in all respects be governed and
construed in accordance with the laws of the State of Texas, including all
matters of construction, validity and performance, without regard to conflicts
of law principles.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    15.           Notices.  All
notices, demands or other communications regarding this Agreement shall be in
writing and shall be sufficiently given if either personally delivered or sent
by facsimile or overnight courier, addressed as follows:

    

    
      	
            	
              (a)

            	
              If
      to the Company:

            

    

    

    Arthrocare Corporation

    7500 Rialto Boulevard

    Building Two, Suite 100

    Austin, Texas 78735

    Attn:  General
Counsel

    Tel:  512-391-3900

    Fax:  512-391-3901

    

    
      	
            	
              (b)

            	
              If
      to the Executive:

            

    

    

    John Raffle

    5415 Buckman Mountain Rd

    Austin, TX 78746

    Tel:   512.632.8145

    

    copy to:

    

    J. David Washburn

    Andrews Kurth LLP

    1717 Main Street, Suite
3700

    Dallas, Texas 75201

    

    15.           Severability.  Except
as otherwise specified below, should any portion of this Agreement be found void
or unenforceable for any reason by a court of competent jurisdiction, the
parties intend that such provision be limited or modified so as to make it
enforceable, and if such provision cannot be modified to be enforceable, the
unenforceable portion shall be deemed severed from the remaining portions of
this Agreement, which shall otherwise remain in full force and
effect.  If any portion of this Agreement is so found to be void or
unenforceable for any reason in regard to any one or more persons, entities, or
subject matters, such portion shall remain in full force and effect with respect
to all other persons, entities, and subject matters.  This Section 15
shall not operate, however, to sever from the economic terms of this Agreement
the Executive’s obligation to provide the binding release to all entities
intended to be released hereunder.

    

    16.           Understanding and
Authority.  The Parties understand and agree that all terms of
this Agreement are contractual and are not a mere recital, and represent and
warrant that they are competent to covenant and agree as herein
provided.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    17.           Integration
Clause.  Except as set forth herein, this Agreement contains
the entire agreement of the Parties with regard to the separation of the
Executive's employment, and supersedes any prior agreements as to that matter.
This Agreement may not be changed or modified, in whole or in part, except by an
instrument in writing signed by the Executive and an authorized officer of the
Company.

    

    18.           Execution in
Counterparts.  This Agreement may be executed in counterparts
with the same force and effectiveness as though executed in a single
document.

    

    The
Parties have carefully read this Agreement in its entirety; fully understand and
agree to its terms and provisions; and intend and agree that it is final and
binding on all Parties.

    

    IN
WITNESS WHEREOF, and intending to be legally bound, the Parties have executed
the foregoing on the dates shown below.

     

    
      
        	
                JOHN
      RAFFLE

              	 
      	
                ARTHROCARE
      CORPORATION

              	 
      
	 	 	 	 
	 
      	 
      	 
      	 
      	 
      	 
      
	
                /s/ John Raffle

              	 
      	
                /s/ David Fitzgerald

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                By:

              	
                David
      Fitzgerald

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                Title:

              	
                Acting
      Chief Executive Officer

              	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	
                Date:

              	
                February
      20, 2009

              	 
      	
                Date:

              	
                February
      21, 2009

              	 
      

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
       

      EXHIBIT
A

      

      ARTHROCARE
CORPORATION

      

      EMPLOYMENT, PROPRIETARY
INFORMATION

      AND INVENTION ASSIGNMENT
AGREEMENT

       

      

      As a
condition of my employment with ArthroCare Corporation, its subsidiaries,
affiliates, successors or assigns (together the "Company"), and in
consideration of my employment with the Company and my receipt of the
compensation now and hereafter paid to me by Company, I agree to the
following:

      

      1.           At-Will
Employment.  I understand and acknowledge that my employment
with the Company is for an unspecified duration and constitutes "at-will"
employment.  I acknowledge that this employment relationship may be
terminated at any time, with or without good cause or for any or no cause, at
the option either of the Company or myself, with or without notice.

      

      2.           Confidential
Information.

      

      (a)           Company
Information.  I agree at all times during the term of my
employment and thereafter, to hold in strictest confidence, and not to use,
except for the benefit of the Company, or to disclose to any person, firm or
corporation without written authorization of the Board of Directors of the
Company, any Confidential Information of the Company.  I understand
that "Confidential
Information" means any Company proprietary information, technical data,
trade secrets or know-how, including, but not limited to, research, product
plans, products, services, customer lists and customers (including, but not
limited to, customers of the Company on whom I called or with whom I became
acquainted during the term of my employment), markets, software, developments,
inventions, processes, formulas, technology,

      designs,
drawings, engineering, hardware configuration information, marketing, finances
or other business information disclosed to me by the Company either directly or
indirectly in writing, orally or by drawings or observation of parts or
equipment. I further understand that Confidential Information does not include
any of the foregoing items which (i) has become publicly known and made
generally available through no wrongful act of mine; (ii) was known to me at the
time of disclosure; (iii) is at any time disclosed to me by a third party who
has the right to do so; or (iv) to the extent disclosure is required pursuant to
legal process or by law.

      

      (b)           Former Employer
Information.  I agree that I will not, during my employment
with the Company, improperly use or disclose any proprietary information or
trade secrets of any former or concurrent employer or other person or entity and
that I will not bring onto the premises of the Company any unpublished document
or proprietary information belonging to any such employer, person or entity
unless consented to in writing by such employer, person or entity.

      

      (c)           Third Party
Information.  I recognize that the Company has received and in
the future will receive from third parties their confidential or proprietary
information subject to a duty on the Company's part to maintain the
confidentiality of such information and to use it only for certain limited
purposes. I agree to hold all such confidential or proprietary information in
the strictest confidence and not to disclose it to any person, firm or
corporation or to use it except as necessary in carrying out my work for the
Company consistent with the Company's agreement with such third
party.

      

      3.           Inventions.

      

      (a)           Prior
Inventions.  I have attached hereto, as Exhibit A, a list
describing all inventions, original works of authorship, developments,
improvements, and trade secrets which were made by me prior to my employment
with the Company (collectively referred to as "Prior Inventions"), which
belong to me, which relate to the Company's proposed business, products or
research and development, and which are not assigned to the Company hereunder;
or, if no such list is attached, I represent that there are no such Prior
Inventions.  If I do so incorporate such a prior invention, the
Company is hereby granted (to the extent I am then free to grant such a license
under my interest in that prior

      invention)
and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide
license to make, have made, modify, use and sell such prior invention as part of
or in connection with such product, process or machine.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (b)           Assignment of
Inventions.  I agree that I will promptly make full written
disclosure to the Company, will hold in trust for the sole right and benefit of
the Company, and hereby assign to the Company, or its designee, all my right,
title, and interest in and to any and all inventions, original works of
authorship, developments, concepts, improvements or trade secrets, whether or
not patentable or registrable under copyright or similar laws, which I may
solely or jointly conceive or develop or reduce to practice, or cause to be
conceived or developed or reduced to practice, during the period of time I am in
the employ of the Company (collectively referred to as "Inventions"), except is
provided in Section 3(f) below. I further acknowledge that all original works of
authorship which are made by me solely or jointly with others) within the scope
of and during the period of my employment with the Company and which re
protectible by copyright are "works made for hire," as that term is defined in
the United States Copyright Act.

      

      (c)           Inventions Assigned to the
United States.  I agree to assign to the United States
government all my right title and interest in and to any and all Inventions
whenever such full title is required to be in the United States by a contract
between the Company and the United States or any of its agencies.

      

      (d)           Maintenance of
Records.  I agree to keep and maintain adequate and current
written records f all Inventions made by me (solely or jointly with others)
during the term of my employment with the Company. The records will be in the
form of notes, sketches, drawings, and any other format that may be specified by
the Company. The records will be available to and remain the sole property of
the Company at all times.

      

      (e)           Patent and Copyright
Registrations.  I agree to assist the Company, or its designee,
at the Company's expense, in every proper way to secure the Company's rights in
the Inventions and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto in any and all countries,
including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which the Company shall deem necessary in
order to apply for and obtain such rights and in order to assign and convey to
the Company, its successors, assigns and nominees the sole and exclusive rights,
title and interest in and to such Inventions, and any copyrights, patents, mask
work rights or other intellectual property rights relating thereto. I further
agree that my obligation to execute or cause to be executed, when it is in my
power to do so, any such instrument or papers shall continue after the
termination of this Agreement. If the Company is unable because of my mental or
physical incapacity or for any other reason to secure my signature to apply for
or to pursue any application for any United States or foreign patents or
copyright registrations covering Inventions or original works of authorship
assigned to the Company as above, then I hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as my agent and
attorney in fact, to act for and in my behalf and stead to execute and file any
such applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent or copyright registrations thereon
with the same legal force and effect as if executed by me.

      

      (f)           Exception to
Assignments.  I understand that the provisions of this
Agreement requiring assignment of Inventions to the Company do not apply to any
invention which qualifies fully under the provisions of California Labor Code
Section 2870 (attached hereto as Exhibit B). I will
advise the Company promptly in writing of any inventions that I believe meet the
criteria in California Labor Code Section 2870 and not otherwise disclosed on
Exhibit
A.

      

      4.           Conflicting
Employment.  I agree that, during the term of my employment
with the Company, I will not engage in any other employment, occupation,
consulting or other business activity directly related to the business in which
the Company is now involved or becomes involved during the term of my
employment, nor will I engage in any other activities that conflict with my
obligations to the Company. It is understood that other employment, occupation,
consulting or other business activity outside of the field of bipolar
electrosurgical tools shall not be deemed directly related to the business in
which the Company is now involved or becomes involved.

      

      5.           Returning Company
Documents.  I agree that, at the time of leaving the employ of
the Company, I will deliver to the Company (and will not keep in my possession,
recreate or deliver to anyone else) any and all devices,

      records,
data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, materials, equipment, other documents or
property, or reproductions of any aforementioned items developed by me pursuant
to my employment with the Company or otherwise belonging to the Company, its
successors or assigns. In the event of the termination of my employment, I agree
to sign and deliver the "Termination Certification"
attached hereto as Exhibit C.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      6.           Notification to New
Employer.  In the event that I leave the employ of the Company,
I hereby grant consent to notification by the Company to my new employer about
my rights and obligations under this Agreement.

      

      7.           Solicitation of
Employees.  I agree that for a period of twelve (12) months
immediately following the termination of my relationship with the Company for
any reason, whether with or without cause, I shall not either directly or
indirectly solicit, induce, recruit or encourage any of the Company's employees
to leave their employment, or take away such employees, or attempt to solicit,
induce, recruit, encourage or take away employees of the Company, either for
myself or for any other person or entity.

      

      8.           Conflict of Interest
Guidelines. I agree to diligently adhere to the Conflict of Interest
Guidelines attached as Exhibit D
hereto.

      

      9.           Representations. I
agree to execute any proper oath or verify any proper document required to carry
out the terms of this Agreement. I represent that my performance of all the
terms of this Agreement will not breach any

      agreement
to keep in confidence proprietary information acquired by me in confidence or in
trust prior to my employment

      by the
Company. I have not entered into, and I agree I will not enter into, any oral or
written agreement in conflict

      herewith.

      

      10.         Arbitration and Equitable
Relief.

      

      (a)           Arbitration.  Except
as provided in Section 10(b) below, I agree that any dispute or controversy
arising out of or relating to (i) any interpretation, construction, performance
or breach of this Agreement, or (ii) my employment by the Company or the
termination of such employment shall be settled by private, confidential and
binding arbitration conducted by a single neutral arbitrator in Santa Clara
County, California. Discovery shall be permitted in connection with any
arbitration pursuant to this Agreement, in accordance with the provisions of
California Code of Civil Procedure, Section 1283.05, which is incorporated
herein by this (and the law of remedies, if applicable) of the state of
California, or federal law, or both, as applicable. The arbitrator is without
jurisdiction to apply any different substantive law. The arbitrator shall have
the authority to entertain a motion to dismiss and/or a motion for summary
judgment by my party and shall apply the standards governing such motions under
the Federal Rules of Civil Procedure. Except as otherwise provided herein, the
arbitration proceedings shall be governed by the applicable rules of the
American Arbitration Association. The arbitrator shall be appointed by agreement
reached between the parties or, if no agreement can be reached, by the American
Arbitration Association pursuant to its rules. The decision of the arbitrator
shall be final and binding, and judgment thereon may be entered in any court
having jurisdiction. I understand that, by signing this Agreement, I am giving
up my right to a jury trial.

      

      (b)           Equitable
Remedies.  I agree that it would be impossible or inadequate to
measure and calculate the Company's damages from any breach of the covenants set
forth in Sections 2, 3, and 5 herein. Accordingly, I agree hat if I breach any
of such Sections, the Company will have available, in addition to any other
right or remedy available, the right to obtain an injunction from a court of
competent jurisdiction restraining such breach or threatened breach and to
specific performance of any such provision of this Agreement.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      11.         General
Provisions

      

      (a)           Governing Law, Consent to
Personal Jurisdiction. This Agreement will be governed by the laws of the
State of California. I hereby expressly consent to the personal jurisdiction of
the state and federal courts located in California for any lawsuit filed there
against me by the Company arising from or relating to this
Agreement.

      (b)           Entire
Agreement.  This Agreement sets forth the entire agreement and
understanding between the Company and me relating to the subject matter herein
and merges all prior discussions between us. No modification of or amendment to
this Agreement, nor any waiver of any rights under this agreement, will be
effective unless in writing signed by the party to be charged. Any subsequent
change or changes in my duties, salary or compensation will not affect the
validity or scope of this Agreement.

      

      (c)           Severability.  If
one or more of the provisions in this Agreement are deemed void by law, then the
remaining provisions will continue in full force and effect.

      

      (d)           Successors and
Assigns.  This Agreement will be binding upon my heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company, its successors, and its assigns.

      

       

      
        
          
            
              
                
                  	Date:
      November 23,
      1999	 	 	 	 
	
                           

                        	 	 	
                          /s/
      John T. Raffle

                        	 
	
                           

                        	 	 	Signature	 
	
                           

                        	 	 	
                           

                        	 
	 	 	 	 	 
	 	 	 	John
      T. Raffle	 
	 	 	 	      
                          Name
      of Employee (typed or printed)

                        	 

                

              

            

          

        

      

      Witness

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      

      LIST
OF PRIOR INVENTIONS

      AND
ORIGINAL WORKS OF AUTHORSHIP

       

      
        
          
            	 
      	 
      	
                    Identifying
      Number

                  
	
                    Title

                  	
                    Date

                  	
                    or Brief
  Description

                  

          

        

      

       

       

       

       

       

       

       

       

      
        
          	
                  x

                	
                  No
      inventions of improvements

                
	 
      	 
      
	 
      	 
      
	
                  __

                	
                  Additional
      Sheets Attached

                
	 
      	 
      
	 
      	 
      
	 
      	 
      

        

      

      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Signature
      of Employee:

                                	
                                  /s/ John T. Raffle

                                
	 
      	 
      
	 
      	 
      
	
                                  Print
      Name of Employee:

                                	
                                  John T. Raffle

                                
	 
      	 
      
	 
      	 
      
	
                                  Date:

                                	
                                  November 23,
1999

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