Exhibit 4.17
B E T W E E N :
CEDARA SOFTWARE CORP.
(the "Corporation" or "Cedara")
-and-
SURGICAL NAVIGATION SPECIALISTS INC.
("SNS")
-and-
SNS SURGICAL NAVIGATION SPECIALISTS INTERNATIONAL GmbH
("SNS International")
-and-
XXXX ZEISS, INC.
("Zeiss U.S.")
- and -
XXXX ZEISS OBERKOCHEN
("Zeiss" )
MINUTES OF SETTLEMENT
WHEREAS the parties acknowledge that certain financial and other
contractual obligations and liabilities exist as between Zeiss U.S., Zeiss and
their respective affiliates (collectively, the "Zeiss Entities") on the one
hand and the Corporation and its direct and indirect subsidiaries
(collectively, the "Cedara Entities") on the other hand which include, without
limitation, obligations and liabilities arising from the purchase agreement
effective as of November 1, 2000 between the Corporation, Zeiss U.S., Zeiss,
SNS, a direct subsidiary of the Corporation and SNS International, an indirect
subsidiary of the Corporation (the "Purchase Agreement");
AND WHEREAS the parties have a desire to: (i) settle on the amounts
owing as between to the Zeiss Entities and the Cedara Entities; (ii) amend the
terms of the 363,636 non-voting, non-transferable warrants of the Corporation
(each a "Cedara Warrant") previously issued to Zeiss U.S. and Zeiss, and (iii)
terminate certain of the outstanding and future rights, obligations and
liabilities of the parties under the Purchase Agreement;
NOW THEREFORE the parties agree as follows:
1. Each of Zeiss U.S. and Zeiss specifically invoke its right to offset
its payables to SNS and SNS International against its receivables due
from SNS and SNS International pursuant to section 21.4 of the
Purchase Agreement, subject to applicable law.
2. The parties agree to offset all amounts owing as between the Zeiss
Entities and the Cedara Entities at the date hereof including,
without limitation, offsetting all amounts owing under the Purchase
Agreement referred to in paragraph 1 above, subject to applicable
law, leaving the net amount to be satisfied in full as follows:
(a) The Corporation will pay Zeiss U.S. and/or Zeiss US
$1,500,000 in 18 equal monthly instalments beginning April
30, 2002 and ending September 30, 2003;
(b) The Corporation will provide Zeiss U.S. and/or Zeiss, at no
charge to Zeiss U.S. and/or Zeiss, US $1,500,000 of software
engineering services and licences, based on the
Corporation's standard software licence rates and software
engineering rates at the time such licences or services are
provided to Zeiss U.S. and/or Zeiss. Software licences will
be provided at any time after the effective date hereof upon
the request of Zeiss U.S. and/or Zeiss until December 1,
2004. Engineering services will be provided at any time
between the period from December 1, 2002 to December 1, 2004
upon the request of Zeiss U.S. and/or Zeiss. No payment will
be made by the Corporation to Zeiss U.S. and/or Zeiss to the
extent Zeiss U.S. and/or Zeiss does not utilize the software
licences or engineering services provided for in this
paragraph (b) within the time period specified herein;
(c) Upon completion of paragraph (b) above, the parties agree to
negotiate in good faith the terms of an agreement under
which the Corporation shall become the preferred software
supplier for Ophthalmology of Zeiss U.S. and Zeiss; and
(d) Except for payments required hereunder, to the extent that
other payments are made by or on behalf of any of the Cedara
Entities to any of the Zeiss Entities after the effective
date hereof which relate to obligations or liabilities
arising on or prior to the effective date hereof, the
Corporation shall be entitled to deduct such amounts from
the amount payable under paragraph (a) above, or
alternatively from the amount specified in paragraph (b)
above if the payments exceed the balance of the amount under
paragraph (a) or if the payments are made to Zeiss U.S.
and/or Zeiss after September 30, 2003.
3. The terms of the Cedara Warrants contained in Article 2 of the
Purchase Agreement including, without limitation, page 12(a) of the
Purchase Agreement are deleted and replaced in their entirety with
the terms described in Schedule "A" attached hereto. The form of
Warrants referred to in Schedule 2.4 of the Purchase Agreement shall
be deemed to be amended to reflect such changes (the "Amended Form of
Warrants").
4. The parties agree that all outstanding and future (contingent or
otherwise) rights, obligations and liabilities of any Zeiss Entity or
Cedara Entity under the Purchase Agreement and the schedules thereto
and any guarantees or indemnities provided by any Zeiss Entity or
Cedara Entity, including, without limitation, related to the SNS Call
Option (as defined in the Purchase Agreement), are hereby terminated.
Notwithstanding the foregoing, the parties agree that all rights,
obligations and liabilities under the Amended Form of Warrants and
Schedule 2.5 (Warrant Exercise Notice) and Schedule 12.2(a)(vii)
(Technology and Patent License Agreement) other than Schedule "C" to
Schedule 12.2(a)(vii) of the Purchase Agreement are unaffected and
continue to be in full force and effect. The parties acknowledge and
agree that nothing contained herein or in the Purchase Agreement
prohibits or limits any Zeiss Entity to use or sublicence the
intellectual property and patents owned by the Zeiss Entities which
are identified or referred to in the Purchase Agreement including,
without limitation, Schedule 12.2(a)(vii) of the Purchase Agreement.
The parties also agree that Cedara, Zeiss and Zeiss U.S. will
negotiate in good faith a new licence agreement (the "New Licence
Agreement") in favour of the Cedara Entities to replace Schedule "C"
to Schedule 12.2(a)(vii) of the Purchase Agreement, such licence to
be on a non-exclusive royalty-free basis and on such other terms and
conditions as they may agree.
5. In consideration of the fulfilment of the benefits and obligations
set out herein, each of Zeiss U.S. and Zeiss, on behalf of itself and
the other Zeiss Entities, hereby releases and forever discharges the
Corporation, SNS, SNS International and any of their respective
affiliates, of and from all actions, causes of action, suits, duties,
debts, accounts, bonds, covenants, contracts, claims and demands
whatsoever that the Zeiss Entities, now have or hereafter can, shall
or may have for or by reason of or in any way arising out of any
cause, matter or thing whatsoever existing up to the effective date
hereof and in particular, without in any way limiting the generality
of the foregoing, in respect of all claims under the Purchase
Agreement and any guarantees or indemnities.
6. In consideration of the fulfilment of the benefits and obligations
set out herein, the Corporation on behalf of itself and its direct
and indirect subsidiaries hereby releases and forever discharges the
Zeiss Entities from all actions, causes of action, suits, duties,
debts, accounts, bonds, covenants, contracts, claims and demands
whatsoever that the Corporation or any of its direct or indirect
subsidiary, now have or hereafter can, shall or may have for or by
reason of or in any way arising out of any cause, matter or thing
whatsoever existing up to the effective date hereof and in
particular, without in any way limiting the generality of the
foregoing, in respect of all claims under the Purchase Agreement and
any guarantees or indemnities.
7. These Minutes shall be governed by the laws of the Province of
Ontario.
8. The parties agree that these Minutes may be executed by facsimile and
in two or more counterparts, each of which shall be deemed to be an
original and all of which taken together shall constitute one
instrument.
9. These Minutes are subject to the following conditions being
satisfied:
(a) Cedara and SNS signing a letter agreement with Medtronic
Surgical Navigation Technologies ("M/SNT") related to
transition of the SNS installed base, whether or not court
approval, if required, is obtained subsequently to the
signing of such agreement;
(b) Zeiss signing a letter agreement with M/SNT related to
support of the SNS installed base;
(c) Approval of the board of directors of Zeiss;
(d) Approval of the board of directors of Cedara;
(e) The execution of the New Licence Agreement; and
(f) Consent of the insolvency administrator appointed by
Amstgericht Aalen (Germany) in so far as the Minutes relate
to SNS International.
10. The effective date of these Minutes shall be the date that all the
conditions set out in paragraph 9 above are satisfied. In the event
that any one of the conditions in paragraph 9 is not satisfied on or
prior to January 15, 2002, these Minutes of Settlement will be
terminated with no force and effect.
11. Cedara and SNS represent to Zeiss and Zeiss U.S. that no approval of
any court is required in connection with SNS executing these Minutes
of Settlement and acknowledge that Zeiss and Zeiss U.S. are relying
on such representation for purposes of entering into these Minutes of
Settlement.
DATED this 10th day of December, 2001.
CEDARA SOFTWARE CORP.
Per: /s/ XXXXXXX XXXXXXXXX
-------------------------------
XXXXXXX XXXXXXXXX
SURGICAL NAVIGATION SPECIALISTS INC.
Per: /s/ Xxxxxxx Xxxxx
-------------------------------
Xxxxxxx Xxxxx
SNS SURGICAL NAVIGATION
SPECIALISTS INTERNATIONAL GmbH
Per: /s/ XXXXXXX XXXXX
-------------------------------
XXXX ZEISS, INC. for itself and on
behalf of the other Zeiss Entities
incorporated in the United States
Per: /s/ XXXXX XXXXXX
-------------------------------
XXXX ZEISS OBERKOCHEN for itself
and on behalf of the other
Zeiss Entities
Per: /s/ XXXXXX XXXXXX
-------------------------------
SCHEDULE "A"
TERMS OF THE CEDARA WARRANTS
1. Each Cedara Warrant shall be exercisable into one common share of
Cedara (the "Cedara Common Share") for no additional consideration.
2. Beginning on November 1, 2001, Zeiss and Zeiss U.S. have the right to
sell up to 90,909 Cedara Common Shares received on an exercise of
Cedara Warrants. If Zeiss and Zeiss U.S. choose to sell any such
Cedara Common Shares between November 1, 2001 and July 31, 2004,
price protection will not apply with respect to the exercise of any
of such Cedara Warrants relating to the 90,909 Cedara Common Shares
referred to in this paragraph.
3. Beginning on November 1, 2002, Zeiss and Zeiss U.S. have the right to
sell a further 90,909 Cedara Common Shares received on the exercise
of Cedara Warrants. If Zeiss and Zeiss U.S. choose to sell any such
Cedara Common Shares between November 1, 2002 and July 31, 2004,
price protection will not apply with respect to the exercise of any
of such Cedara Warrants relating to the 90,909 Cedara Common Shares
referred to in this paragraph.
4. Beginning on August 1, 2003, Zeiss and Zeiss U.S. have the right to
sell a further 181,818 Cedara Common Shares received on the exercise
of Cedara Warrants. To the extent that Zeiss or Zeiss U.S. have
elected to exercise Cedara Warrants representing any of these 181,818
Cedara Common Shares on or after August 1, 2003 but on or prior to
July 31, 2004, Cedara will promptly pay to Zeiss or Zeiss U.S., as
the case may be, an amount by which the price per Cedara Common Share
is trading below US $5.50 (based on the weighted closing price
average for the 20 NASDAQ trading days, ending on the date
immediately prior to the date of such exercise). Such payment, if
any, may be made by Cedara, at its option, either in cash or in
freely tradable Cedara Common Shares (which shares shall be valued on
the basis of the weighted closing price average for the 20 NASDAQ
trading days, ending on the date immediately prior to the date of
such exercise). After July 31, 2004, the price protection will not
apply with respect to the exercise of any of the Cedara Warrants
relating to the 181,818 Cedara Common Shares referred to in this
paragraph. For greater certainty, the maximum payment Cedara would be
obliged to make on or after August 1, 2003 but on or before July 31,
2004 would be, in the aggregate, US $1,000,000.
5. To the extent that Zeiss or Zeiss U.S. elects to exercise any of the
Cedara Warrants representing those Cedara Common Shares that are
described in Paragraphs 2 and 3 above on or after August 1, 2004 but
on or prior to July 31, 2005, Cedara will promptly pay to Zeiss or
Zeiss U.S., as the case may be, an amount by which the price per
Cedara Common Share is trading below US $5.50 (based on the weighted
closing price average for the 20 NASDAQ trading days, ending on the
date immediately prior to the date of such exercise). Such payment,
if any, may be made by Cedara, at its option, either in cash or in
freely tradable Cedara Common Shares (which shares shall be valued on
the basis of the weighted closing price average for the 20 NASDAQ
trading days, ending on the date immediately prior to the date of
such exercise). After July 31, 2005, the price protection will not
apply with respect to the exercise of any of the Cedara Warrants
relating to the Cedara Common Shares referred to in this paragraph.
For greater certainty, the maximum payment Cedara would be obliged to
make on or after August 1, 2004 but on or before July 31, 2005 would
be, in the aggregate, US $1,000,000.
6. Sections 2.4 to 2.10 inclusive of the Purchase Agreement shall be
unaffected and continue in full force and effect to the Cedara
Warrants, provided that Section 2.7(1)(iii) of the Purchase Agreement
and the references to "Section 2.19 and Section 2.20" in Section
2.10(1) and the "SNS Call Options" in Section 2.10(2) are deleted.
