SETTLEMENT AGREEMENT AND NON-EXCLUSIVE PATENT CROSS-LICENSE

This Settlement Agreement and Non-Exclusive Patent Cross-License (“Agreement”) is made and entered into effective this 29th day of January, 2010 (the “Effective Date”), by and between, Boston Scientific Corporation, and Boston Scientific Scimed, Inc., formerly Scimed Life Systems, Inc. (hereinafter collectively “Boston Scientific”), on one hand, and, Johnson & Johnson (“J&J”) and Cordis Corporation (“Cordis”, and together with J&J, “J&J/Cordis”), on the other hand (collectively, the “Parties,” or each separately, a “Party”).

RECITALS

A. WHEREAS Boston Scientific is the owner of the Jang Patents (as later defined herein);

B. WHEREAS J&J/Cordis is the owner of the Palmaz and Gray Patents (as later defined herein);

C. WHEREAS Boston Scientific, J&J/Cordis and certain of their Affiliates are parties to Pending Litigations (as defined hereunder) in the United States in which the Jang Patents are being asserted by Boston Scientific and the Palmaz and Gray Patents are being asserted by Cordis;

D. WHEREAS the Parties have agreed to settle the specified Pending Litigations on the terms set forth herein; and

E. WHEREAS the Parties have agreed to grant each other retroactive, paid up, irrevocable, non-exclusive cross-licenses under the Jang Patents, and the Palmaz and Gray Patents, on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the promises and the mutual covenants set forth herein, the sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

In addition to the terms defined above and elsewhere in this Agreement, as used in this Agreement:

(a) The Cordis Corporation v. Boston Scientific Corporation and Scimed Life Systems, Inc., CA No. 1:03-cv-00027 (D. Del.) litigation, hereinafter referred to as the “Cypher/Express/Taxus Express/Liberte District Court Action” , and

(b) The Cordis Corporation v Boston Scientific Corporation and Boston Scientific Scimed, Inc., CA 1:08-cv-779 (D. Del.) litigation, hereinafter referred to as the “Taxus Liberte District Court Action.”

Bank Name                 JP Morgan Chase Bank

ABA Number            

Swift ID:

Account Name            Johnson & Johnson

Account Number       

(b) In the event that Boston Scientific fails to timely make any interest payment when due in accordance with Section 2.4, then J&J/Cordis shall immediately be entitled to draw down on the irrevocable letter of credit in the unpaid amount then due, not to exceed for all unpaid interest payments the aggregate of $20,000,000.

(c) In the event that Boston Scientific owes any amount in excess of the amount available under the irrevocable letter of credit, Boston Scientific shall promptly make separate payment of such amount to J&J/Cordis by wire transfer to the account identified in Section 2.1.

(a) Subject to the terms and conditions of this Agreement, Boston Scientific hereby grants J&J/Cordis and its Affiliates a retroactive, non-exclusive, personal, non-transferable (except as expressly set forth herein), paid-up, perpetual, and irrevocable license under the Jang Patents to make, have made, use, sell, offer for sale, export and import the Licensed Products in the Territory.

(b) J&J/Cordis may assign, delegate, sell or transfer (each collectively, “transfer”) all rights and responsibilities hereunder this Agreement to a purchaser acquiring the capital stock of or all or substantially all of the assets of Cordis Corporation (hereinafter “Cordis Successor”), without obtaining the prior written consent of Boston Scientific, provided that: (1) any such Cordis Successor immediately consents in writing to be bound by the terms and conditions of this Agreement; (2) no such potential Cordis Successor, or any of its Affiliates, has operated a Stent or Stent-related businesses prior to such transfer; and (3) the license rights transferred to any such Cordis Successor shall extend only to the Licensed Products that are commercially released or for which significant steps have been taken to commercialization as of the effective date of the divestiture (“Cordis Covered Products”) and for new versions of such Cordis Covered Products that have merely incremental differences from such Cordis Covered Products and shall not in any event include any products, processes, technologies or services of the Cordis Successor, any Affiliate of the Cordis Successor, or any other third party. This Section 4.1(b) shall apply regardless of whether the business is divested by a distribution to existing shareholders, a sale of assets or as a sale of a legal entity (e.g., sale of a subsidiary). Johnson & Johnson, or the Cordis Successor if Johnson & Johnson shall no longer have a separate corporate existence, shall, within thirty (30) days after any such transfer provide Boston Scientific with written notice, which notice will contain: (i) the effective date of the divestiture; (ii) a description of the transaction through which the divestiture occurred; and (iii) reasonably detailed information regarding the Covered Products. The Cordis Successor may not further transfer the transferred license rights, or any portion thereof (by operation of law or otherwise). The transferred license rights will immediately terminate upon any such attempted further transfer (by operation of law or otherwise), and any such attempted further transfer will be null and void.

(c) This Agreement shall have no effect on Boston Scientific’s right to assert any patent not identified as a Jang Patent in this Agreement.

(a) Subject to the terms and conditions of this Agreement, J&J/Cordis hereby grants Boston Scientific and its Affiliates a retroactive, non-exclusive, personal, non-transferable (except as expressly set forth herein), paid-up, perpetual, and irrevocable license under the Palmaz and Gray Patents to make, have made, use, sell, offer for sale, export and import the Licensed Products in the Territory.

(b) Boston Scientific may assign, delegate, sell or transfer (each collectively, “transfer”) all rights and responsibilities hereunder this Agreement to a purchaser acquiring all or substantially all of the assets of Boston Scientific’s Vascular Business (hereinafter “Boston Scientific Vascular Successor”), without obtaining the prior written consent of J&J/Cordis, provided that: (1) any such Boston Scientific Vascular Successor immediately consents in writing to be bound by the terms and conditions of this Agreement; (2) no such potential Boston Scientific Vascular Successor, or any of its Affiliates, has operated a Stent or Stent-related businesses prior to such transfer; and (3) the license rights transferred to any such Boston Scientific Vascular Successor shall extend only to the Licensed Products of Boston Scientific that are commercially released or for which significant steps have been taken to commercialization as of the effective date of the divestiture (“Boston Scientific Covered Products”) and for new versions of such Boston Scientific Covered Products that have merely incremental differences from such Boston Scientific Covered Products and shall not in any event include any products, processes, technologies or services of the Boston Scientific Vascular Successor, any Affiliate of the Boston Scientific Vascular Successor, or any other third party. This Section 5.1(b) shall apply regardless of whether the business is divested by a distribution to existing shareholders, a sale of assets or as a sale of a legal entity (e.g., sale of a subsidiary). Boston Scientific, or the Boston Scientific Vascular Successor if Boston Scientific shall no longer have a separate corporate existence, shall, within thirty (30) days after any such transfer provide J&J/Cordis with written notice, which notice will contain: (1) the effective date of the divestiture; (2) a description of the transaction through which the divestiture occurred; and (3) reasonably detailed information regarding the Boston Scientific Covered Products. The Boston Scientific Vascular Successor may not further transfer the transferred license rights, or any portion thereof (by operation of law or otherwise). The transferred license rights will immediately terminate upon any such attempted further transfer (by operation of law or otherwise), and any such attempted further transfer will be null and void.

(c) This Agreement shall have no effect on J&J/Cordis’ right to assert any patent not identified as a Palmaz or Gray Patent in this Agreement.

The terms of this Agreement shall be maintained in strict confidence by the Parties except that either Party may disclose such terms as required by law, including without limitation SEC reporting requirements. Either Party may further disclose the fact of the settlement of the Pending Litigations, the consent judgment entered, and the specifics relating to the amounts, nature and timing of the payments made and to be made.

Nothing herein contained shall be deemed to create any relationship in the nature of agency, joint venture, partnership, or similar relationship between Boston Scientific, J&J/Cordis and their Affiliates. Neither Party shall be authorized to bind or obligate the other Party in any manner.

Any notice required or permitted to be given or sent under this Agreement shall be hand delivered or sent by express delivery service or certified or registered mail, postage prepaid, to the Parties at the addresses indicated below.

Patterson Belknap Webb & Tyler LLC
Avenue of the Americas
New York, New York 10036

Any such notice shall be deemed to have been received on the date actually received. Either Party may change its address by giving the other Party written notice, delivered in accordance with this Section.

This Agreement and its exhibits constitute the complete, final and exclusive agreement between the Parties with respect to the subject matter hereof and supersede and terminate any prior or contemporaneous agreements and understandings between the Parties, whether oral or in writing, relating to such subject matter. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth herein. No subsequent alteration, amendment, change, waiver or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. Each Party in deciding to execute this Agreement has retained counsel and has not relied on any understanding, agreement, representation or promise by the other Party that is not explicitly set forth herein.

This Agreement and its exhibits shall be governed, interpreted and construed in accordance with the laws of the State of Delaware, without giving effect to choice of law principles. The Parties irrevocably agree that the federal district court in the State of Delaware shall have exclusive jurisdiction to deal with any disputes arising out of or in connection with this Agreement and that, accordingly, any proceedings arising out of or in connection with this Agreement shall be brought in the United States District Court for the District of Delaware. Notwithstanding the foregoing, if there is any dispute for which the federal district courts in the State of Delaware do not have subject matter jurisdiction, the state courts in Delaware shall have jurisdiction. In connection with any dispute arising out of or in connection with this Agreement, each Party hereby expressly consents and submits to the personal jurisdiction of the federal and state courts in the State of Delaware.

If one or more provisions of this Agreement is held to be invalid or unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded. In the event a part or provision of this Agreement is held to be invalid or unenforceable or in conflict with law for any reason, the Parties shall replace any invalid part or provision with a valid provision which most closely approximates the intent and economic effect of the invalid provision.

This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, bears the signatures of each of the Parties hereto. This Agreement may be executed in any number of counterparts (including facsimile counterparts), each of which shall be an original as against a Party whose signature appears thereon, but all of which taken together shall constitute one and the same instrument.

Each of the Parties acknowledges that it has consulted with, or has had the opportunity to consult with, counsel of its choice, and that in executing this Agreement it has not relied upon any statements, representations or agreements of any other person other than those contained herein.

Captions are inserted herein only as a matter of convenience and for reference, and in no way define, limit, or describe the scope of this Agreement or the intent of any provision herein.

This Agreement has been jointly negotiated and drafted by the Parties through their respective counsel and no provision shall be construed or interpreted for or against any of the Parties on the basis that such provision, or any other provision, or the Agreement as a whole, was purportedly drafted by the particular Party. All references to periods of days for taking certain actions in this Agreement shall be construed to refer to business days.

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* * * * *

IN WITNESS WHEREOF, the parties’ authorized representatives have executed this Agreement on the dates set forth below.

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EXHIBIT A

[LETTERHEAD OF ISSUER OF LETTER OF CREDIT]

FEBRUARY 1 , 2010

GENTLEMEN:

WE HEREBY OPEN OUR UNCONDITIONAL IRREVOCABLE CLEAN LETTER OF CREDIT NO.        IN YOUR FAVOR AVAILABLE BY YOUR DRAFT(S) AT SIGHT FOR AN AMOUNT NOT TO EXCEED IN THE AGGREGATE OF SEVEN HUNDRED FORTY-FIVE MILLION DOLLARS ($745,000,000.00). WE ARE INFORMED BY THE APPLICANT THAT THIS LETTER OF CREDIT IS ISSUED IN REGARDS TO THIS CERTAIN ”SETTLEMENT AGREEMENTAND NON-EXCLUSIVE PATENT CROSS-LICENSE” BY AND BETWEEN, ON THE ONE HAND, BOSTON SCIENTIFIC CORPORATION AND, ON THE OTHER HAND, JOHNSON & JOHNSON AND CORDIS CORPORATION, DATED JANUARY 29, 2010, (hereinafter the “Settlement Agreement”) EFFECTIVE IMMEDIATELY.

ALL DRAFTS SO DRAWN MUST BE MARKED “DRAWN UNDER IRREVOCABLE LETTER OF CREDIT OF [ISSUING BANK], NO.       , DATED FEBRUARY 1, 2010” MULTIPLE DRAWINGS MAY BE MADE UNDER THIS LETTER OF CREDIT AND EACH DRAWING HONORED BY US WILL REDUCE THE AMOUNT AVAILABLE FOR DRAWING UNDER THIS LETTER OF CREDIT BY THE AMOUNT OF SUCH DRAWING.

THIS LETTER OF CREDIT IS ISSUED, PRESENTABLE AND PAYABLE AT OUR OFFICE AT      , OR SUCH OTHER OFFICE AS WE MAY DESIGNATE BY WRITTEN NOTICE TO YOU, AND EXPIRES WITH OUR CLOSE OF BUSINESS ON JANUARY 31, 2011. ANY DRAFTS TO BE DRAWN MAY BE PRESENTED BY FACSIMILE TO OUR FAX NUMBER 1.800.755.8743. IF PRESENTATION IS BY FACSIMILE, THE ORIGINAL DRAFT MUST BE SENT BY OVERNIGHT COURIER THE SAME DAY AS THE FAX PRESENTATION. ANY FAX PRESENTATIONS MUST ALSO BE IMMEDIATELY FOLLOWED UP WITH A PHONE CALL TO 1.570.330.4213 TO CONFIRM RECEIPT.

ALL DRAWINGS MUST BE MADE BY PRESENTATION OF A SIGHT DRAFT IN THE FORM OF SCHEDULE A ATTACHED HERETO ACCOMPANIED BY THE FOLLOWING:

—WITH RESPECT TO AMOUNTS DUE UNDER SECTION 2.3 OF THE SETTLEMENT AGREEMENT, A BENEFICIARY’S STATEMENT SIGNED BY THE GENERAL COUNSEL OF THE BENEFICIARY READING SUBSTANTIALLY AS FOLLOWS:

“BOSTON SCIENTIFIC CORPORATION HAS FAILED TO PAY TO JOHNSON & JOHNSON ALL OR PART OF THE $725,000,000 PAYMENT AS AND WHEN DUE ON JANUARY 3, 2011 UNDER SECTION 2.3 OF THE SETTLEMENT AGREEMENT AND JOHNSON & JOHNSON IS THEREFORE ENTITLED TO PAYMENTS IN THE AMOUNT OF $     . PAYMENT WILL BE EFFECTED IMMEDIATELY UPON RECEIPT OF THE ORIGINAL SIGHT DRAFT AND THE EXECUTED BENEFICIARY’S STATEMENT AT OUR ABOVE OFFICE.”

—WITH RESPECT TO AMOUNTS DUE UNDER SECTION 2.4 OF THE SETTLEMENT AGREEMENT, A BENEFICIARY’S STATEMENT SIGNED BY THE GENERAL COUNSEL OF THE BENEFICIARY READING SUBSTANTIALLY AS FOLLOWS:

“BOSTON SCIENTIFIC CORPORATION HAS FAILED TO PAY TO JOHNSON & JOHNSON ALL OR PART OF INTEREST PAYMENTS AS AND WHEN DUE UNDER SECTION 2.4 OF THE SETTLEMENT AGREEMENT, NOT TO EXCEED $20,000,000 IN THE AGGREGATE FOR UNPAID INTEREST, AND JOHNSON & JOHNSON IS THEREFORE ENTITLED TO PAYMENTS IN THE AMOUNT OF $     . PAYMENT WILL BE EFFECTED IMMEDIATELY UPON RECEIPT OF THE ORIGINAL SIGHT DRAFT AND THE EXECUTED BENEFICIARY’S STATEMENT AT OUR ABOVE OFFICE.”

THIS LETTER OF CREDIT IS TRANSFERABLE IN FULL AND NOT IN PART. ANY TRANSFER MADE HEREUNDER MUST CONFORM STRICTLY TO THE TERMS HEREOF AND TO THE CONDITIONS OF ARTICLE 38 OF THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (2007 REVISION) FIXED BY THE INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 600.

SHOULD YOU WISH TO EFFECT A TRANSFER UNDER THIS CREDIT, SUCH TRANSFER WILL BE SUBJECT TO THE RETURN TO US OF THE ORIGINAL CREDIT INSTRUMENT, ACCOMPANIED BY OUR FORM OF TRANSFER AVAILABLE UPON REQUEST, PROPERLY COMPLETED AND SIGNED BY AN AUTHORIZED SIGNATORY OF YOUR FIRM, BEARING YOUR BANKERS STAMP AND SIGNATURE AUTHENTICATION, AND OUR CUSTOMARY PAYMENT OF OUR TRANSFER CHARGES OF $ 500.00 SHALL BE FOR THE ACCOUNT OF THE APPLICANT.

WE HEREBY DO UNDERTAKE TO PROMPTLY HONOR YOUR SIGHT DRAFT OR DRAFTS DRAWN ON US, INDICATING OUR LETTER OF CREDIT NO.        FOR THE AMOUNT AVAILABLE TO BE DRAWN ON THIS LETTER OF CREDIT UPON PRESENTATION OF YOUR SIGHT DRAFT IN THE FORM OF SCHEDULE A ATTACHED HERETO DRAWN ON US AT OUR OFFICES SPECIFIED ABOVE DURING OUR USUAL BUSINESS HOURS ON OR BEFORE THE EXPIRATION DATE HEREOF.

EXCEPT AS EXPRESSLY STATED HEREIN, THIS UNDERTAKING IS NOT SUBJECT TO ANY AGREEMENTS, REQUIREMENTS OR QUALIFICATION. OUR OBLIGATION UNDER THIS LETTER OF CREDIT IS OUR INDIVIDUAL OBLIGATION AND IS IN NO WAY CONTINGENT UPON REIMBURSEMENT WITH RESPECT THERETO OR UPON OUR ABILITY TO PERFECT ANY LIEN, SECURITY INTEREST OR ANY OTHER REIMBURSEMENT.

THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS — 2007 REVISION, INTER-NATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 600, AND AS TO MATTERS NOT GOVERNED BY THE UCP, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE U.S. LAW.

[ISSUER OF LETTER OF CREDIT]

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SCHEDULE A -FORM OF SIGHT DRAFT

(INSERT DATE OF SIGHT DRAFT, WHICH MUST BE DATE OF PRESENTMENT)

FOR THE VALUE RECEIVED, PAY TO THE ORDER OF               BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE FUNDS TO THE FOLLOWING ACCOUNT:

[NAME OF ACCOUNT]
[ACCOUNT NUMBER]
NAME AND ADDRESS OF BANK AT WHICH ACCOUNT IS MAINTANED]
[ABA NUMBER]
[REFERENCE]

THE FOLLOWING AMOUNT:

[INSERT NUMBER OF DOLLARS IN WRITING] UNITED STATES DOLLARS (US$ [INSERT NUMBER OF DOLLARS IN FIGURES])

DRAWN UPON YOUR IRREVOCABLE LETTER OF CREDIT NO.    DATED             , 2010.

{BENEFICIARY}

BY:       

TITLE:       

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EXHIBIT B

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

CONSENT JUDGMENT

Whereas the parties in the two above-captioned actions have entered into a Settlement Agreement and Non-Exclusive Patent Cross-License dated January 29, 2010 (hereinafter, “the Agreement”) that settles all remaining claims between the parties in the above-captioned cases;

IT IS HEREBY ORDERED AND ADJUDGED that judgment be and is hereby entered in the amount of one billion seven hundred twenty five million dollars ($1,725,000,000.00) payable by Boston Scientific to Cordis pursuant to the terms of the Agreement.

Dated:      , 2010       

United States District Court JudgeS.CONT

     
Steven J. Balick (I.D. #2114)
John G. Day (I.D. #2403)
Ashby & Geddes
222 Delaware Avenue, 17^th Floor
P.O. Box 1150
Wilmington DE 19899
(302) 654-1888

Attorneys for Plaintiff
Cordis Corporation

Of Counsel:
Gregory L. Diskant
Patterson Belknap Webb & Tyler llp
1133 Avenue of the Americas
New York, NY 10036
(212) 336-2000

Dated:      

     
Josy W. Ingersoll (No. 1088)
John W. Shaw (No. 3362)
Adam W. Poff (No. 3990)
YOUNG CONAWAY STARGATT
& TAYLOR, LLP
1000 West Street, 17^th Floor
The Brandywine Building
Wilmington, Delaware 19801
(302) 571-6600

Attorneys for Defendants
Boston Scientific Corporation and
Boston Scientific Scimed, Inc.

Of Counsel:
John M. Desmarais
KIRKLAND & ELLIS LLP
Citigroup Center
601 Lexington Ave.
New York, New York 10022
(212) 446-4800

Dated:      

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