EXHIBIT 10.36
CONFIDENTIAL
SETTLEMENT AGREEMENT AND GENERAL RELEASE
WHEREAS, the parties hereto, DePuy AcroMed, Inc., and DePuy, Inc.
(collectively "DePuy") and Osteotech, Inc. ("Osteotech"), desire to resolve by
settlement the litigation styled Osteotech Inc., Defendant, Counterclaim
Plaintiff and Third-Party Plaintiff x. XxXxx Motech, Inc. and DePuy, Inc.,
pending as third-party claims in civil action No. CV99-10111-MRP(CTX) (formerly
CV9868 AHS(EEX)) in the United States District Court for the Central District of
California (the "Litigation"); and
WHEREAS, the parties desire to resolve by settlement of the Litigation all
disputes known or posited currently to exist between them, and those that may be
reasonably contemplated, relating to DePuy's sale of the Dynagraft products
which are alleged in the Litigation to infringe United States Patent Nos.
5,290,558 and 5,284,655, Dynagraft Gel and Dynagraft Putty (the "accused
products" or the "accused Dynagraft products"). The "accused products" do not
include Dynagraft DBM Granules, Dynagraft Matrix 45 or Dynagraft Matrix 30.
NOW, THEREFORE, IN CONSIDERATION OF the mutual covenants and agreements set
forth herein and other good and valuable consideration, DePuy and Osteotech
MUTUALLY SPECIFY AND AGREE THAT:
1. Osteotech agrees to execute and file in the form of attached Exhibit A a
stipulated dismissal with prejudice of all claims and related requests for
compensatory and exemplary damages, attorneys' fees, costs and interest expenses
Osteotech has asserted, could have asserted or sought leave to assert against
DePuy in the Litigation arising from or related to DePuy's
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alleged infringement of United States Patent Nos. 5,290,558 and 5,284,655 caused
by or related to DePuy's sale of the accused Dynagraft products. Upon such
dismissal DePuy will no longer participate in the Litigation, except as required
by law. That dismissal shall not be filed with the Court until the time of any
public disclosure by Osteotech pursuant to paragraph 13 below or 4:00 p.m. in
New York on November 11, 1999, whichever is earlier.
2. Osteotech hereby releases, acquits, discharges and covenants not to xxx
XxXxx AcroMed, Inc., DePuy, Inc., DePuy Orthopaedics, Inc., Xxxxxxx & Xxxxxxx
and their affiliates, parents, subsidiaries, officers, directors, shareholders,
employees, agents and attorneys (collectively the "DePuy Parties") and any
physicians and hospitals from any and all claims, causes of action, rights,
allegations, liabilities or damages whatsoever arising out of the alleged
infringement by DePuy or any such physicians or hospitals of the United States
Patent Nos. 5,290,558 and 5,284,655 patents and any other applicable United
States patents owned by Osteotech caused by or related to DePuy's sale or
promotion of the accused Dynagraft products for the time period through February
4, 2000.
3. Osteotech hereby releases, acquits, discharges and covenants not to xxx
the DePuy Parties and any physicians and hospitals from any and all claims,
causes of action, rights, allegations, liabilities or damages whatsoever
relating to or arising from DePuy's sale or promotion of the accused Dynagraft
products for the time period through February 4, 2001 based upon heretofore
undisclosed existing Osteotech inventions for which patent protection has been
or may be obtained ("current patent applications"). The release contained in
this paragraph 3 and in the previous paragraph 2 shall not apply to or be
effective with respect to any sale or promotion of the accused Dynagraft
products by any of the DePuy Parties after February 4, 2001 or the sale or
promotion of any other products by any of the DePuy Parties at any time.
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4. The DePuy Parties hereby release, acquit, discharge and covenant not to
xxx Osteotech, its affiliates, subsidiaries, officers, directors, shareholders,
employees, agents and attorneys (collectively, the "Osteotech Parties") from any
and all claims, causes of action, rights, allegations, liabilities or damages
whatsoever which any of the DePuy Parties has asserted, could have asserted or
sought leave to assert against any of the Osteotech Parties in the Litigation
arising out of or related to any sale or promotion of the accused Dynagraft
products by any of the DePuy Parties.
5. This Agreement is entered into solely for the purpose of avoiding the
burden and expense of further litigation and neither it, nor any statements or
recitations in it, nor any negotiations leading up to it, is intended to be, or
should be construed as, an admission of fact or liability on the part of any
party.
6. In connection with any legal or administrative proceeding related to the
accused Dynagraft products, the DePuy Parties will not contest Osteotech's
claims that United States Patent Nos. 5,290,558 and 5,284,655 are valid and
infringed by the accused Dynagraft products.
7. Except as specifically provided herein, the parties expressly agree and
understand that this Settlement Agreement does not extend to any other person or
entity (whether a party to the present litigation or not, or that person's or
entity's agents, servants, or attorneys), and that it does not affect
Osteotech's rights against any other person or entity (whether a party to the
present litigation or not, or that person's or entity's agents, servants, or
attorneys), that Osteotech may charge with infringement of United States Patent
Nos. 5,290,558 and/or 5,284,655. Specifically, by releasing the DePuy Parties
and physicians and hospitals in this agreement, Osteotech is not releasing
GenSci Regeneration Laboratories, Inc. or its parents, subsidiaries or
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affiliated companies ("GenSci") or waiving any of its claims against GenSci, or
any other person or entity.
8. The terms of this Confidential Settlement Agreement shall be governed,
construed and enforced in accordance with the laws of the State of New Jersey,
without regard to contrary New Jersey conflict of laws provisions.
9. This Confidential Settlement Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors,
administrators and assigns.
10. Within ten (10) days of execution of this Confidential Settlement
Agreement by both parties, DePuy shall pay Osteotech the sum of Two Million
Dollars ($2,000,000.00) by delivery to Osteotech of a certified or cashier's
check or the wire transfer of such funds to an account designated by Osteotech.
11. In addition, DePuy shall pay Osteotech a further sum of One Million
Dollars ($1,000,000.00) as follows:
$250,000.00 on March 31, 2000;
$250,000.00 on June 30, 2000;
$250,000.00 on September 30, 2000; and
$250,000.00 on December 31, 2000.
However, with respect to the payments outlined in this paragraph, each of the
quarterly payments shall be payable only if DePuy sells some accused product
during the quarter ending on the date on which the payment is due. If DePuy
sells no accused product during a quarter, that quarterly payment is forgiven.
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12. The DePuy Parties agree to stop selling the accused products and any
other flowable product that contains demineralized osteogenic bone powder in a
polyhydroxy (e.g., Pluronic F127) carrier on the earlier of (a) February 4, 2001
or (b) the end of any quarter in which DePuy owes no payments under Paragraph
11. However, if Osteotech settles with GenSci and permits GenSci to continue to
manufacture and sell the accused products, then DePuy shall not be bound to stop
selling the accused products after February 4, 2001, but shall be free to sell
said products without further payment to Osteotech.
13. The parties understand and agree that the terms and conditions of this
Confidential Settlement Agreement and Release shall be kept strictly
confidential and shall not be disclosed, or caused to be disclosed, by Osteotech
or DePuy or by any of their officers, directors, employees, agents, attorneys,
or by any affiliates, or officers, directors, employees, agents, attorneys of
affiliates, except as set forth in this paragraph 13 and except as required by
court order or law or regulation. Osteotech shall make no disclosure until
either (a) 4:00 p.m. in New York on the day that DePuy has advised Osteotech
that DePuy will disclose the existence of this agreement to GenSci (DePuy agrees
to give Osteotech 24 hours advance notice of its intent to so disclose to GenSci
and Osteotech agrees DePuy may so disclose any terms of this agreement to
GenSci), (b) 4:00 p.m. in New York on November 11 or (c) the public disclosure
of the existence or terms of this agreement without the fault of the Osteotech
Parties, whichever is the earliest. At that time, Osteotech may make a public
disclosure consistent with the terms of this agreement. After a public
disclosure by Osteotech, DePuy may make public disclosures about this agreement
consistent with the terms of this agreement.
14. The persons executing this Settlement Agreement on behalf of Osteotech
and DePuy each represent and warrant that they have full and complete authority
to do so.
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15. DePuy agrees that the breach of this Settlement Agreement by any of the
Depuy parties resulting or arising from any such party continuing to sell
accused products or any other flowable product that contains demineralized
osteogenic bone powder in a polyhydroxy (e.g., Pluronic F127) carrier after
February 4, 2001, will result in irreparable harm to Osteotech and that
Osteotech shall have the right to seek immediate injunctive relief in the event
of such actual or threatened breach, in addition to any other legal remedies
that may be available to Osteotech, and without the need to post a bond.
Notwithstanding the foregoing, in any action for injunctive relief the DePuy
Parties do not waive or Limit their rights to assert defenses concerning the
unenforceability of paragraph 12 in the event the United States Patent Nos.
5,290,558 and 5,284,655 are declared non-infringed by the accused Dynagraft
products, invalid or unenforceable by a court of competent jurisdiction in a
final, non-appealable judgment.
16. The parties declare and represent: (1) No promise, representation,
inducement or agreement not expressed in this Confidential Settlement Agreement
has been made to either of them; (2) They are not relying on any promise,
representation, inducement or agreement in entering into this Confidential
Settlement Agreement except as expressly set forth in this Settlement Agreement;
(3) This Confidential Settlement Agreement (and its attached Exhibit A) contain
the entire agreement between the parties relating to its subject matter; (4) The
parties have consulted with counsel of their own choosing prior to entering into
this Confidential Settlement Agreement; and (5) The terms of this Confidential
Settlement Agreement are contractual and not mere recitals.
17. The parties agree to jurisdiction and venue in the United States
District Court for the District of New Jersey for all disputes arising out of
this Agreement.
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IN WITNESS HEREOF, this Settlement Agreement is executed by the
parties:
DATED: November 2, 1999 Dated: November 2, 1999
OSTEOTECH, INC. DEPUY ACROMED, INC.
By: /s/Xxxxxxx X. Xxxxx By: /s/Xxxx X. Xxxxxx, Xx.
------------------------------ --------------------------------
Its: Chief Executive Officer Its: President
Dated: November 2, 1999
DEPUY, INC.
By: /s/Xxxxxx X. Xxxxxx
--------------------------------
Its: Attorney
APPROVED AS TO SUBSTANCE AND FORM:
XXXXXX & WHITNEY, LLP XXXXXX & XXXXXXXXX
By: /s/Xxxxx X. Xxxxxxx By: /s/Xxxxxx X. Xxxxxx
------------------------------- --------------------------------
One of the Attorneys on One of the Attorneys on
behalf of Osteotech, Inc. behalf of DePuy AcroMed, Inc.
and DePuy, Inc.
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EXHIBIT A
XXXX X. XXXX
BERGER, KAHN, SHAFTON, MOSS,
XXXXXX XXXXX & GLADSTONE
0 Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
XXXXXX & XXXXXXXXX
000 Xxxx Xxxxxxx - Xxxxx 0000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attorneys for Third Party Defendants
DEPUY, INC. and DEPUY ACROMED, INC.
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
------------------------------------------
OSTEOTECH, INC., )
)
Defendant, Counterclaim )
Plaintiff and Third )
Party Plaintiff )
)
v. ) Case No.: CV-99-10111-MRP(CTX)
)
GENSCI REGENERATION SCIENCES, INC., )
)
DePuy MOTECH, INC. and DEPUY, INC., )
)
Third Party Defendants. )
------------------------------------------)
AGREED FINAL ORDER OF DISMISSAL
Defendant, Counterplaintiff and Third Party Plaintiff, Osteotech, Inc.
("Osteotech") and Third Party Defendants DePuy AcroMed, Inc., incorrectly sued
as DePuy Motech, Inc. and DePuy, Inc. (collectively, "DePuy"), through
settlement negotiations, having compromised and
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resolved their disputes, and the Court having been advised that a Settlement has
been reached by said parties;
IT IS HEREBY ORDERED THAT:
1. Osteotech's Third-Party Complaint against DePuy AcroMed, Inc. and DePuy,
Inc. is dismissed with prejudice;
2. In approving this Agreed Order, neither party admits any liability,
culpability nor fault with respect to the allegations in any pleading filed or
sought to be filed in this Action;
3. Each party shall bear its own costs, attorneys' fees and other expenses
relative to this Action; and
4. The Court finds pursuant to Federal Rule of Civil Procedure 54(b) that
there is no just reason to delay enforcement of or appeal from this Order and
the Court directs the clerk to enter judgment on this Order.
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IT IS SO ORDERED:
Dated:____________,1999 Entered: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
The Xxxxxxxxx Xxxxxxx X. Xxxxxxxx
United States District Court Judge
AGREED AS TO FORM:
/s/Xxxx Xxxxxxxx /s/Xxxxxx X. Xxxxxx and /s/Xxxxxx X. Xxxxxx
Attorneys for Defendant Attorneys for Third-Party Defendants
Third-Party Plaintiff DEPUY ACROMED, INC. (incorrectly sued as
OSTEOTECH, INC. DEPUY MOTECH, INC.) and DEPUY, INC.
Xxxx Xxxxxxxx Xxxxxx X. Xxxxxx
Xxxxxx & Xxxxxxx LLP Xxxxxx X. Xxxxxx
000 Xxxx Xxxxxx Xxxxx Xxxxxx & Xxxxxxxxx
Xxxxx 0000 0000 Xxxxx Xxxxx
Xxxxx Xxxx, XX 00000 00 Xxxxx XxXxxxx Xxxxxx
(000) 000-0000 Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000
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