SETTLEMENT AGREEMENT

This Settlement Agreement (Agreement) is entered into as of this 29th day of July, 2006, by and between Boston Scientific Corporation, a corporation organized and existing under the laws of the State of Delaware (BSC), Guidant Corporation, a corporation organized and existing under the laws of the State of Indiana (Guidant), Cardiac Pacemakers, Inc., a corporation organized and existing under the laws of the State of Minnesota (CPI), Guidant Sales Corporation, a corporation organized and existing under the laws of the State of Indiana (GSC), and Advanced Bionics Corporation, a corporation organized and existing under the laws of the State of Delaware (ABC), on the one hand (hereinafter collectively referred to as the BSC Parties), and St. Jude Medical, Inc., a corporation organized and existing under the laws of the State of Minnesota (St. Jude), St. Jude Medical S.C., Inc., a corporation organized and existing under the laws of the State of Minnesota (SJMSC), Pacesetter, Inc., a corporation organized and existing under the laws of the State of Delaware (Pacesetter), and Advanced Neuromodulation Systems, Inc., a corporation organized and existing under the laws of the State of Texas (ANS), on the other hand (hereinafter collectively referred to as the St. Jude Parties). The BSC Parties and the St. Jude Parties shall collectively be referred to as the Parties in this Agreement.

RECITALS

WHEREAS, there currently are pending between the BSC Parties and the St. Jude Parties the following cases:

all of which are collectively referred to herein as the Litigation;

WHEREAS, the BSC Parties and the St. Jude Parties entered into discussions in an effort to resolve the Litigation;

WHEREAS, in connection with the discussions with the BSC Parties (and with their permission), the St. Jude Parties entered into discussions with representatives of MFV (as defined below) in an effort to resolve the Indiana case and the Delaware case, but the St. Jude Parties efforts at negotiating a resolution of those cases with the representatives of MFV were unsuccessful;

WHEREAS, the Parties now wish to settle certain cases of the Litigation and to limit the issues remaining in the rest of the Litigation, upon the terms and conditions set forth in this Agreement (and the Exhibits hereto);

NOW, THEREFORE, in consideration of the promises and of the mutual covenants hereinafter set forth, and of the good and valuable consideration flowing from each party to the other, the Parties hereto, intending to be legally bound hereby, covenant and agree as follows:

ARTICLE I

Definitions

Section 1.01. Affiliates. Affiliates as used herein shall have the meaning set forth in the CRM License Agreement.

Section 1.02. CRM License Agreement. CRM License Agreement as used herein shall mean the license agreement relating to cardiac rhythm management products by and between Boston Scientific Corporation and St. Jude Medical, Inc., dated July 29, 2006, an executed copy of which is attached hereto as Exhibit A.

Section 1.03. SCS License Agreement. SCS License Agreement as used herein shall mean the license agreement relating to spinal cord stimulation products by and between Boston Scientific Corporation and St. Jude Medical, Inc., dated July 29, 2006, an executed copy of which is attached hereto as Exhibit B.

Section 1.04. Medtronic Action. The Medtronic Action as used herein shall mean the litigation captioned Medtronic, Inc. v. Guidant Corporation, et al., case number 05-1515, currently pending in the U.S. Court of Appeals for the Federal Circuit, and any continuation of that action at the district court or appellate court levels following the issuance of a mandate by the Federal Circuit.

Section 1.05 MFV.      MFV as used herein shall mean Mirowski Family Ventures, LLC, a limited liability company organized under the laws of the State of Maryland. MFV is also a plaintiff adverse to the St. Jude Parties in the Indiana case and the Delaware case.

Section 1.06. SCS Field. SCS Field as used herein shall have the meaning set forth in the SCS License Agreement.

Section 1.07. Derivative Product. Derivative Product as used herein shall mean any product subsequently approved by applicable regulatory authorities for use in spinal cord stimulation to manage chronic pain of the trunk and limbs that is of substantially equivalent design and functionality as a product that is commercially marketed and sold as of the Effective Date. In the interest of clarity, a future product shall be considered a Derivative Product unless it is covered by a patent (other than the Licensed Patents) that does not cover a product commercially

marketed and sold as of the Effective Date. Whether a future product is a Derivative Product shall be determined on a patent-by-patent basis; a future product that is not a Derivative Product with respect to one patent shall not be exposed to claims of infringement based on any other patent for which the product is a Derivative Product.

ARTICLE II

Dismissal of Certain Cases and Narrowing of Issues In Remaining Cases

Section 2.01.     Contemporaneously with the execution of this Agreement, the Parties shall execute and promptly file with the appropriate courts the following documents:

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