Exhibit 10.1 Settlement Agreement, effective October 26,
2001, by, between and among the Company, Xxxxxx X.
Xxxxxxx, Xx. Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxxx, III,
M.D., Carbon Medical Technologies, Inc., Xxxxxxx
Medical, Inc. and Xxxxxxx Xxxxx.
SETTLEMENT AGREEMENT
Effective upon the date of last execution by a party, this Settlement
Agreement ("Agreement") is made by, between and among Uroplasty, Inc.
("Uroplasty"), Xxxxxx X. Xxxxxxx ("Beisang"), Xx. Xxxxxx Xxxxx ("Xxxxx"), Xxxxxx
X. Xxxxxxx III, M.D. ("Beisang III"), Carbon Medical Technologies, Inc.
(formerly known as Advanced UroScience, Inc. and referred to as "Carbon Medical"
herein), Xxxxxxx Medical, Inc. and Xxxxxxx Xxxxx, hereinafter sometimes
collectively referred to as the "Parties".
RECITALS
WHEREAS, Uroplasty filed a lawsuit entitled Uroplasty, Inc. v. Advanced
UroScience, Inc., Xxxxxxx Medical, Inc. and Xxxxxxx Xxxxx, in Xxxxxx County
District Court, Court File No. 62-C1-98-008574 (the "First Lawsuit"); and
WHEREAS, the First Lawsuit was removed to the United States District
Court for the District of Minnesota, Case No. 98-CV-2082 and after proceedings
therein, and in the United States Court of Appeals for the Federal Circuit, was
remanded back to Xxxxxx County District Court, where it is now pending; and
WHEREAS, Carbon Medical owns patent number 5,451,406 ("Carbon Medical's
Patent"); and
WHEREAS, in the First Lawsuit, Uroplasty alleged that Carbon Medical's
Patent derived from technology developed by Uroplasty, and that Carbon Medical,
Xxxxxxx Medical, Inc. and Xxxxxxx Xxxxx were liable for breach of contract,
breach of fiduciary duty, and violation of Minnesota's Trade Secret Act; and
WHEREAS, Carbon Medical, Xxxxxxx Medical, Inc. and Xxxxxxx Xxxxx denied
Uroplasty's allegations and asserted counterclaims in the first Lawsuit; and
WHEREAS, Carbon Medical filed a lawsuit entitled Advanced UroScience,
Inc. v. Xxxxxx X. Xxxxxxx, in Xxxxxx County District, Court File No. CO-99-1626
(the "Second Lawsuit"); and
WHEREAS, the Second Lawsuit was removed to United States District Court
for the District of Minnesota, Case No. 99-CV-294, where it is now pending; and
WHEREAS, Uroplasty filed a 37 CFR 1.607 request with the United States
Patent and Trademark Office for an interference ("Interference") between Carbon
Medical's Patent and a September 18, 1996 patent application owned by Uroplasty
entitled "Treatment of Urological Disorders by Injection of Micro Particles"
("Uroplasty's Patent Application"); and
WHEREAS, Xxxxx, Xxxxxxx and Beisang III are shareholders of Uroplasty
and have claimed intellectual property rights adverse to Carbon Medical, Xxxxxxx
Medical, Inc. and/or Lawin; and
WHEREAS, the Parties wish to have a complete and full settlement and
resolution of all claims and potential claims between them, including all issues
relating to the claims asserted or which could have been asserted or which could
be asserted in the future, in the First Lawsuit, the Interference, and the
Second Lawsuit; and
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1. Payment: In consideration of the terms and conditions of this Agreement,
Carbon Medical, Xxxxxxx Medical, Inc. and Xxxxxxx Xxxxx shall jointly pay the
sum of $400,000 to Uroplasty. $200,000 of this amount will be paid within ten
(10) business days after the effective date of this Agreement or ten (10)
business days after the filing of Uroplasty's written declaration of abandonment
of Uroplasty's Patent Application and withdrawal of its request for
Interference, whichever occurs later; $100,000 will be paid six (6) months after
the first payment; $100,000 will be paid twelve (12) months after the first
payment. Carbon Medical, Xxxxxxx Medical, Inc. and Xxxxxxx Xxxxx will pay simple
interest at the rate of 8% per annum on the deferred balances.
2. RELEASE: Upon execution of this Agreement, and for good and valuable
consideration, except for those obligations created by this Agreement, the
Parties do hereby fully, finally and forever release each other and their
respective agents, representatives, employees, shareholders, officers,
directors, attorneys, successors or assigns, divisions, subsidiaries and related
companies, and insurance companies from any and all claims, lawsuits, causes of
action, administrative proceedings, including, without limitation, proceedings
in the United States Patent and Trademark Office, default notices, debts,
accounts receivable, purchase orders, invoices, contracts, duties, accounts,
charges, demands, judgments, representations and warranties of any nature
whatsoever which the Parties have, or ever had, or ever could have had, or may
have in the future arising from or relating to any and all matters preceding the
date of this Agreement, against each other, including, without limitation: those
that were or could have been brought in the First Lawsuit, the Second Lawsuit,
and the Interference; and, all claims falling within the Covenant Not to
Commence Further Proceeding set out in paragraph 3, below. The Parties agree and
acknowledge that this Agreement is supported by adequate consideration, is
freely and voluntarily given, without any duress or coercion, and after the
Parties have consulted with their legal counsel and carefully and completely
read all the terms and provisions of this Agreement.
3. COVENANT NOT TO COMMENCE FURTHER PROCEEDINGS: The Parties, collectively and
individually, hereby covenant that they will not commence any action or lawsuit
in law or in equity or any administrative or other proceeding, including,
without limitation, proceedings in the United States Patent and Trademark
Office, against each other to the extent that such litigation or other
proceeding is within the scope of the release in paragraph 2 of this Agreement
or is otherwise in violation of any of the covenants or undertakings contained
in this Agreement. Uroplasty, Xxxxx, Xxxxxxx and Xxxxxxx III, collectively and
individually, also covenant that they will not commence or assist others in the
commencement or prosecution of any legal, administrative or other proceeding
which challenges Carbon Medical's proprietary or other rights to its carbon bead
technology and products, as now or hereafter constituted, including
specifically, but without limitation, filings, applications or proceedings in
the United States Patent and Trademark Office contesting any issued patent or
patent application of Carbon Medical to the extent that such patent or patent
application relates to Carbon Medical's bead technology or products, as now or
hereafter constituted. In addition to any liability that shall accrue upon
breach of this covenant, the breaching party shall pay all reasonable attorneys'
fees and costs incurred by the non-breaching party or parties in defense
thereof.
4. DISMISSAL OF LAWSUITS: Upon execution of this Agreement, counsel for the
appropriate Parties shall execute and cause to be filed with the Xxxxxx County
District Court a Stipulation for Order dismissing all claims with prejudice in
the First Lawsuit, with the Parties to bear their own costs. Upon execution of
this Agreement, counsel for the appropriate Parties shall also execute and cause
to be filed with the United States District Court a Stipulation for Order
dismissing all claims with prejudice in the Second Lawsuit, with the Parties to
bear their own costs.
5. COVENANT TO ABANDON PATENT APPLICATION: Within five (5) days of execution of
this Agreement, Uroplasty will file in the United States Patent and Trademark
Office a written declaration of abandonment of Uroplasty's Patent Application
and request for Interference and shall not file any continuation, continuation
in part applications or foreign applications based on Uroplasty's Patent
Application. At the same time, Uroplasty shall also execute and cause to be
filed with the United States Patent and Trademark Office a written declaration
of abandonment of any and all United States and foreign applications (if any)
claiming the benefit of the filing date of Uroplasty's Patent Application and a
written withdrawal
of its request for an Interference with Carbon Medical's Patent. Uroplasty,
Xxxxx, Xxxxxxx and Xxxxxxx III agree never to file a request for an Interference
with Carbon Medical's Patent. Uroplasty, Xxxxx, Xxxxxxx and Beisang III also
agree to file a request with the United States Patent and Trademark Office for
entry of an adverse judgment in any interference between a case owned by
Uroplasty, Xxxxx, Xxxxxxx and/or Beisang III and Carbon Medical's Patent within
five (5) days after declaration of any such Interference. If the objectives of
this Agreement cannot otherwise be achieved and if requested to do so by Carbon
Medical, Uroplasty, Xxxxx, Xxxxxxx and Xxxxxxx III agree to assign immediately
to Carbon Medical Uroplasty's Patent Application, any and all U.S. and foreign
applications claiming the benefit of the filing date of that application, and
Uroplasty's request for Interference with Carbon Medical's Patent.
6. INDEMNIFICATION FOR FUTURE CLAIMS: Uroplasty agrees to indemnify and hold
Carbon Medical, Xxxxxxx Medical, Inc., Xxxxxxx Xxxxx, and their respective
officers, directors, employees, agents, insurers, successors, representatives,
heirs and assigns, and each of them, harmless from any and all manner of loss,
damage, claim, proceeding, award, cost or expense, including, without
limitation, attorneys fees and costs, incurred by them, or any of them, in or in
connection with litigation or any other proceeding of any manner or nature
whatsoever by or on behalf of Uroplasty or their officers, directors, employees,
agents, insurers, successors, representatives, heirs or assigns, including,
without limitation, proceedings brought in the United States Patent and
Trademark Office, to the extent that the subject matter of such litigation or
other proceeding is within the scope of the release in paragraph 2, above, or is
otherwise in violation of any of the covenants or undertakings contained in this
Agreement.
7. SEVERABILITY: If any provision of this Agreement is held by a Court of
competent jurisdiction to be invalid, void, or unenforceable, the remaining
provisions shall nonetheless continue in full force and effect without being
impaired or invalidated in any way.
8. EXECUTION IN COUNTERPARTS: This Agreement may be executed in counterparts,
each of which, when so executed, shall be deemed to be an original, and such
counterparts together shall constitute one and the same instrument.
9. ENTIRE AGREEMENT: This Agreement constitutes the entire understanding among
the Parties hereto and may not be modified, amended or waived, except by an
instrument, in writing, executed by the Party against whom such an amendment,
clarification, or waiver is sought to be enforced. This Agreement was negotiated
among the Parties, represented by their respective counsel, and shall not be
deemed to have been drafted by any Party hereto. The undersigned entered into
this Agreement voluntarily and for reasons of their own doing, and in so doing
have not relied upon any statement or representation of any Party except as set
forth herein.
10. CONFIDENTIALITY: The Parties agree to keep confidential the terms of this
Agreement, other than as necessary to complete their respective obligations
under the Agreement, to enforce this Agreement, and as may be required by 35
U.S.C.ss.135(c).
11. BENEFIT: This Agreement inures to the benefit of and is binding upon the
Parties, as well as their respective representatives, agents, successors, heirs
and assigns.
12. DISPUTES: The Parties agree that they and any disputes arising from this
Agreement will be subject to the exclusive jurisdiction of the United States
District Court, District of Minnesota or Xxxxxx County District Court, and that
the sole venue for the litigation of such disputes shall be either Court as may
be appropriate. The prevailing party in any such dispute shall be entitled to an
award of reasonable attorney fees and such other relief, in law or equity, to
which that party may be entitled.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates
specified below adjacent to their respective signatures.
UROPLASTY, INC.
By Date of Execution
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Its
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CARBON MEDICAL TECHNOLOGIES, INC.
By
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Its Date of Execution
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XXXXXXX MEDICAL, INC.
By Date of Execution
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Its
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Date of Execution
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Xxxxxxx X. Xxxxx
Date of Execution
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Xxxxxx Xxxxx, M.D.
Date of Execution
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Xxxxxx X. Xxxxxxx
Date of Execution
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Xxxxxx X. Xxxxxxx III, M.D.
