SETTLEMENT AGREEMENT
EXHIBIT-10.22
Execution Copy
THIS SETTLEMENT AGREEMENT (this “Agreement”) is made and entered into as of the 29th day of
March, 2007 (the “Effective Date”) by and among Palomar Medical Technologies, Inc., a
Delaware corporation, with offices at 00 Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
(“Palomar”), The General Hospital Corporation, a Massachusetts corporation with offices at
Xxxxx Xxxxxx, Xxxxxx XX 00000 (“General”), and Xxxx Lasers, Inc., a Delaware corporation
with offices at 000 Xxxx Xxx Xxxx #000, Xxxxxxx Xxxxx, XX 00000 (“Xxxx”). Each of Palomar, General,
and Xxxx is a “Party” and together they are the “Parties” hereunder.
WHEREAS, Palomar, General and Xxxx are parties to a lawsuit captioned: (i) “Palomar Medical
Technologies, Inc. v. Xxxx Lasers, Inc.” Case No. 1:06-CV-11171, which is currently pending in the
United States District Court for the District of Massachusetts (the ”Lawsuit”);
WHEREAS, the Lawsuit generally concerns allegations of infringement and invalidity of the
Xxxxxxxx Patents; and
WHEREAS, Palomar and General on the one hand and Xxxx on the other hand wish to settle and
compromise the Lawsuit on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the
Parties covenant and agree as follows:
1. The Closing. A closing (the “Closing”) of the transactions contemplated
hereby shall be held simultaneously with the execution and delivery of this Agreement. At the
Closing and in partial consideration of the payment made by Xxxx pursuant to Section 3(a), the
following actions shall take place:
(a) Xxxx and Xxxx Lasers, Ltd. on the one hand and Palomar on the other hand shall execute and
deliver to each other the “Patent License Agreement” in the form attached hereto as
Exhibit A;
(b) Xxxx and Xxxx Lasers, Ltd. on the one hand and Palomar on the other hand shall execute and
deliver to each other the Trade Dress Settlement Agreement (“TDS
Agreement”) in the form attached hereto as Exhibit B;
(c) Each of the Parties shall deliver to the other Parties executed “Consent
Judgment” described in Section 2, in the form attached hereto as Exhibit C; and
(d) Each of the Parties shall deliver to the other Parties executed “Stipulated Dismissal
With Prejudice” described in Section 2, in the form attached hereto as Exhibit D.
2. Termination of the Lawsuit. The Parties shall execute, or cause their attorneys of
record in the Lawsuit to execute, the Consent Judgment, a copy of which have been provided to the
Parties and to their respective counsel. Within two (2) business days of Alma’s payment in full to
Palomar of the aggregate amount due pursuant to Section 3(a) of this Agreement, the aggregate
amount due pursuant to Section 4.2 of the Patent License Agreement and the aggregate amount due
pursuant to Section 4(a) of the TDS Agreement, Palomar’s counsel shall file such
Settlement Agreement
executed Consent Judgment with the District of Massachusetts. Upon the entry of the Consent
Judgment by the court, but not before, Palomar’s counsel shall file such executed Stipulated
Dismissal With Prejudice with the District of Massachusetts. No other Party or their counsel shall
file the Consent Judgment or the Stipulation of Dismissal With Prejudice with any court. The
Parties shall perform all acts necessary to facilitate each appropriate court’s prompt approval and
entry of the Consent Judgment and Stipulated Dismissal With Prejudice as orders of such court,
including executing and filing with such court any other appropriate documents. If for any reason
an appropriate court does not approve the Consent Judgment and Stipulated Dismissal With Prejudice
and enter the same as orders of such court, the Parties shall promptly confer in good faith to use
commercially reasonable efforts to modify the same or take such other actions as are required to
overcome such court’s objections and effectuate such dismissal. The entry of the Consent Judgment
and Stipulated Dismissal With Prejudice as orders of the respective courts is an express condition
to the effectiveness of this Agreement, the Patent License Agreement and the TDS Agreement,
provided that, for clarity, Xxxx shall pay such two aggregate amounts before Palomar’s counsel
files the Consent Judgment.
3. Legal Costs and Expenses.
(a) As partial consideration hereunder, Xxxx shall pay to Palomar within seven (7) days of the
Effective Date (exclusive of any amounts due under the Patent License Agreement and TDS Agreement)
an amount equal to Two Hundred Seventy Five Thousand Dollars (U.S. $275,000) to cover Palomar’s
legal costs and expenses related to the Lawsuit. The payment contemplated by this Section 3(a)
shall be made by wire transfer, without deduction for any taxes or other charges, in U.S. dollars
to the credit of:
Palomar’s account:
Bank Name: Banknorth
Bank Address: 000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Palomar Medical Technologies, Inc.
Account No. 8241022982
ABA No. 000000000
Bank Address: 000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Palomar Medical Technologies, Inc.
Account No. 8241022982
ABA No. 000000000
(b) Patent
License Agreement and TDS Agreement. As partial consideration for their mutual
obligations hereunder, Palomar and Xxxx (together with Xxxx Lasers, Ltd.) have executed the Patent
License Agreement and TDS Agreement.
4. Releases and Indemnities.
(a) Release of Palomar and General by Xxxx.
(i) Of Palomar. Each of Xxxx and all Xxxx Affiliates, together with (as applicable) their
respective officers, directors, employees, shareholders, insurers, agents, trustees, attorneys,
heirs, administrators, executors, successors and assigns (collectively, “Xxxx Releasors”),
does hereby, jointly and severally, remise, release and forever discharge Palomar and all Palomar
Affiliates, together with (as applicable) all of their respective officers, directors, employees,
shareholders, insurers, licensees, sublicensees, customers, agents, trustees, attorneys,
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Settlement Agreement
parents,
subsidiaries, successors and assigns (collectively, the “Released Palomar
Entities”), of and from any and all actions, causes of action, claims, counterclaims, damages,
debts, demands, liabilities, costs, expenses, loss, liens and obligations of whatsoever name and
nature, including attorney and professional fees, whether at law or in equity (hereinafter,
“Claims”), in the Professional Field only, which the Xxxx Releasors now have or ever had
against the Released Palomar Entities, whether or not the facts giving rise to such Claims are now
known or unknown, from the first day of the world to the Effective Date (but not thereafter), which
Claims are asserted or could have been asserted in the Lawsuit, and which further involve and are
limited to the Xxxxxxxx Patents. It is the intention of the Xxxx Releasors fully, finally and
forever to release the Released Palomar Entities from Claims released by this Section 4(a)(i). In
furtherance of such intention, this release shall be and remain in effect notwithstanding the
discovery subsequent to the Effective Date of any presently existing fact. Notwithstanding the
foregoing, it is expressly understood that this release does not release the Released Palomar
Entities or any of them from the obligations set forth in this Agreement, the Exhibits hereto and
the other documents delivered at the Closing (including, with respect to Palomar and the Palomar
Affiliates, the Patent License Agreement and TDS Agreement).
(ii) Of General. Each Xxxx Releasor does hereby, jointly and severally, remise, release and
forever discharge General, together with (as applicable) all of its officers, directors, employees,
shareholders, insurers, licensees, sublicensees, customers, agents, trustees, attorneys, parents,
subsidiaries, successors and assigns (collectively, the
“Released General Entities”), of
and from any and all Claims, in the Professional Field only, which the Xxxx Releasors now have or
ever had against the Released General Entities, whether or not the facts giving rise to such Claims
are now known or unknown, from the first day of the world to the Effective Date (but not
thereafter), which Claims are asserted or could have been asserted in the Lawsuit, and which
further involve and are limited to the Xxxxxxxx Patents. It is the intention of the Xxxx Releasors
fully, finally and forever to release the Released General Entities from Claims released by this
Section 4(a)(ii). In furtherance of such intention, this release shall be and remain in effect
notwithstanding the discovery subsequent to the Effective Date of any presently existing fact.
Notwithstanding the foregoing, it is expressly understood that this release does not release the
Released General Entities or any of them from the obligations set forth in this Agreement, the
Exhibits hereto and the other documents delivered at the Closing.
(b) Alma’s Representation, Warranty and Indemnity as to Released Matters.
(i) To Palomar. Xxxx represents and warrants to Palomar that it has not heretofore assigned,
transferred or purported to assign or transfer, and that it shall not hereafter assign or transfer
or purport to assign or transfer, to any person or entity any matter it has released in Section
4(a)(i) and it agrees to indemnify and hold harmless the Released Palomar Entities from and against
all Claims based on, resulting from, in connection with, or arising out of, any such assignment or
transfer or purported or claimed assignment or transfer of any such matter that it has released in
Section 4(a)(i), in whole or in part.
(ii) To General. Xxxx represents and warrants to General that it has not heretofore assigned,
transferred or purported to assign or transfer, and that it shall not
hereafter assign or transfer or purport to assign or transfer, to any person or entity any
matter it has released in Section 4(a)(ii) and it agrees to indemnify and hold harmless the
Released General
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Settlement Agreement
Entities from and against all Claims based on, resulting from, in connection with, or arising out
of, any such assignment or transfer or purported or claimed assignment or transfer of any such
matter that it has released in Section 4(a)(ii), in whole or in part.
(c) Release of Xxxx by Palomar and General.
(i) By Palomar. Each of Palomar and all Palomar Affiliates, together with (as applicable)
their respective officers, directors, employees, shareholders, insurers, agents, trustees,
attorneys, heirs, administrators, executors, successors and assigns
(collectively, “Palomar
Releasors”), does hereby, jointly and severally, remise, release and forever discharge Xxxx and
all Xxxx Affiliates, together with (as applicable) their officers, directors, employees,
shareholders, insurers, licensees, sublicensees, customers, agents, trustees, attorneys, parents,
subsidiaries, successors and assigns (collectively, the “Released Xxxx Entities”), of and
from any and all Claims, in the Professional Field only, which the Palomar Releasors now have or
ever had against the Released Xxxx Entities, whether or not the facts giving rise to such Claims
are now known or unknown, from the first day of the world to the Effective Date (but not
thereafter), which Claims are asserted or could have been asserted in the Lawsuit, and which
further involve and are limited to the Xxxxxxxx Patents. It is the intention of the Palomar
Releasors fully, finally and forever to release the Released Xxxx Entities from Claims released by
this Section 4(c)(i). In furtherance of such intention, this release shall be and remain in effect
notwithstanding the discovery subsequent to the Effective Date of any presently existing fact.
(ii) By General. General, together with (as applicable) its respective officers, directors,
employees, shareholders, insurers, agents, trustees, attorneys, heirs, administrators, executors,
successors and assigns (collectively, “General Releasors”), does hereby, jointly and
severally, remise, release and forever discharge the Released Xxxx Entities, of and from any and
all Claims, in the Professional Field only, which the General Releasors now have or ever had
against the Released Xxxx Entities, whether or not the facts giving rise to such Claims are now
known or unknown, from the first day of the world to the Effective Date (but not thereafter), which
Claims are asserted or could have been asserted in the Lawsuit, and which further involve and are
limited to the Xxxxxxxx Patents. It is the intention of the General Releasors fully, finally and
forever to release the Released Xxxx Entities from Claims released by this Section 4(c)(ii). In
furtherance of such intention, this release shall be and remain in effect notwithstanding the
discovery subsequent to the Effective Date of any presently existing fact.
(iii) Miscellaneous. Notwithstanding the foregoing in Section 4(c)(i) and 4(c)(ii), it is
expressly understood that the releases by Palomar Releasors and General Releasors contained in this
Agreement do not release the Released Xxxx Entities or any of them from the obligations set forth
in this Agreement, the Exhibits hereto and the other documents delivered at the Closing (including
the Patent License Agreement and TDS Agreement, or the obligation to pay any amounts under the
terms of Section 3 hereof, Section 4.2 of the Patent License Agreement or Section 4.4 of the Patent
License Agreement (with respect to Sales of Licensed Products by Xxxx and Xxxx Affiliates occurring
on or after the Effective Date) each of which may be audited pursuant to those Sections and Section
4.10 of the Patent License Agreement, or Sections 4(a)(i) and 4(b)(i) of the TDS Agreement, which
may be audited pursuant to Sections 4(a)(iii) and 4(b)(iii), respectively, of the TDS Agreement).
For the
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Settlement Agreement
avoidance of doubt, Alma’s obligation to pay to Palomar patent royalties due on Sales of Licensed
Products occurring on or after the Effective Date pursuant to the terms of the Patent License
Agreement shall apply on and after Effective Date, notwithstanding any release contained herein.
(d) Palomar’s and General’s Representation, Warranty and Indemnity as to Released
Matters. Each of Palomar and General represents and warrants to Xxxx that it has not heretofore
assigned, transferred or purported to assign or transfer, and shall not hereafter assign or
transfer or purport to assign or transfer, to any person or entity any matter it has released in
Section 4(c) and agrees to indemnify and hold harmless the Released Xxxx Entities from and against
all Claims based on, resulting from, in connection with, or arising out of, any such assignment or
transfer or purported or claimed assignment or transfer of any such matter that it has released
hereunder, in whole or in part. Nothing in this Section 4(d) shall preclude General from granting
any licenses under the Xxxxxxxx Patents to another party or parties if the MGH Agreement is
terminated for any reason prior to the expiration of all the Valid Claims of the Xxxxxxxx Patents.
(e) Full Settlement. The Parties understand and agree that this Agreement and the
attached Exhibits as executed and delivered at the Closing are intended to settle all disputes (in
existence from the first day of the world to the Effective Date (but not thereafter)) between
Palomar and General on the one hand and Xxxx on the other hand based on or related in any way to
the Lawsuit and all the other matters released by this Section 4, and which further involve and are
limited to the Xxxxxxxx Patents, and shall be effective as a full and final accord and satisfaction
and release of all such matters.
5. Representations and Warranties; Disclaimers.
(a) Representations and Warranties by the Parties. Each Party represents and warrants
to the other Parties as of the Effective Date:
(i) that it is an entity duly organized, validly existing and in good standing under the laws
of the state of its organization, and has full corporate power and authority and the legal right to
own and operate its property and assets and to carry on its business as it is now being conducted
and as it is contemplated to be conducted by this Agreement;
(ii) that it has the authority to (i) enter into this Agreement, (ii) extend the releases and
rights granted to the other Parties under this Agreement, and (iii) undertake and fully perform its
obligations under this Agreement;
(iii) that this Agreement has been duly executed and delivered by it and is a binding
obligation of it, enforceable in accordance with its terms, subject, as to enforcement of remedies,
to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting
creditors’ rights generally, and to general equitable principles;
(iv) its execution, delivery, granting of releases and rights and performance of its
obligations under this Agreement does not and will not, with or without the passage of time or the
giving of notice or both, conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default (or give rise to any right of termination,
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Settlement Agreement
cancellation or acceleration) under any agreement or other document or instrument to which it is a
party; and
(v) all necessary consents, approvals and authorizations of all regulatory and governmental
authorities and other third parties (including, in the case of Xxxx, any Xxxx Affiliates and, in
the case of Palomar, any Palomar Affiliates) required to be obtained by it in connection with the
execution and delivery of this Agreement and the performance of its obligations hereunder have been
obtained.
(b) Disclaimer. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NONE OF THE PARTIES MAKES ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND HEREUNDER, WHETHER EXPRESS OR IMPLIED, AND EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ALL WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NONINFRINGEMENT. TO THE EXTENT THIS
PROVISION CONFLICTS IN ANY WAY WITH THE TERMS AND CONDITIONS OF THE MGH AGREEMENT, THE MGH
AGREEMENT SHALL CONTROL.
(c) No Consequentials. IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER HEREUNDER
FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, WHETHER BASED ON BREACH
OF CONTRACT, TORT (INCLUDING NEGLIGENCE), PRODUCT LIABILITY, OR OTHERWISE, AND WHETHER OR NOT SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. TO THE EXTENT THIS PROVISION CONFLICTS IN
ANY WAY WITH THE TERMS AND CONDITIONS OF THE MGH AGREEMENT, THE MGH AGREEMENT SHALL CONTROL.
6. Miscellaneous.
(a) Entire Agreement; Counterparts; Stipulated Dismissal. This Agreement (including
the Exhibits) constitutes the entire agreement between Palomar and MGH on the one hand and Xxxx on
the other hand relating to the subject matter hereof and supersedes all previous agreements,
practices or courses of dealings between the Parties, whether written or oral, relating to the
subject matter hereof, provided that that certain Rule 408 – Confidentiality Agreement, dated as of
February 14, 2006, between Palomar and Xxxx shall terminate as of the Effective Date as to any
disclosures occurring after the Effective Date, but shall remain in full force and effect with
respect to all applicable disclosures occurring and rights and obligations accruing prior to the
Effective Date. This Agreement may be executed in counterparts with the same force and effect as if
each of the signatories had executed the same instrument.
(b) Other Parties. This Agreement shall be binding upon, and inure to the benefit of,
the legal representatives, successors and permitted assigns of the Parties. There shall be no Third
Party beneficiaries, either express or implied, to this Agreement, provided that Section 4 is
intended to benefit, in addition to the Parties, the other Released Palomar Entities, Released
General Entities and Released Xxxx Entities as if they were Parties hereto.
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Settlement Agreement
(c) No Agency or Joint Venture Relationship. Nothing contained herein shall be deemed
to create any association, partnership, joint venture or relationship of principal, agent, master
or servant between the Parties hereto or, in the case of Palomar, any Palomar Affiliates, or, in
the case of Xxxx, any Xxxx Affiliates, or to provide any
Party with the right, power or authority to incur any obligation or make any representations,
warranties or guarantees on behalf of any other Party.
(d) Retained Rights. Except as provided in Section 4.7 of the Patent License
Agreement, the Parties retain their rights to petition an appropriate court regarding any breach or
violation of the terms or conditions of this Agreement, a Consent Judgment or the Patent License
Agreement or TDS Agreement.
(e) Severability. If any term, covenant or condition of this Agreement or the
application thereof to any Party or circumstance shall, to any extent, be held to be invalid or
unenforceable by a court of competent jurisdiction, then (i) the remainder of this Agreement, or
the application of such term, covenant or condition to Parties or circumstances other than those
that were held invalid or unenforceable, shall not be affected thereby and each term, covenant or
condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (ii) the Parties hereto covenant and agree to renegotiate any such invalid or unenforceable
term, covenant or application thereof in good faith in order to provide a reasonably acceptable
alternative to the term, covenant or condition of this Agreement or the application thereof that is
invalid or unenforceable, it being the intent of the Parties that the basic purposes of this
Agreement are to be effectuated.
(f) Waivers; Amendments; Supplements. No waiver by any Party of a breach of any
covenant or condition of this Agreement by another Party shall be construed to be a waiver of any
succeeding breach of the same or any other covenant or condition. Except as otherwise expressly
provided herein, this Agreement or any Exhibit hereunder may not be changed or amended except by a
writing expressly referring to this Agreement signed by all the Parties.
(g) Section 1542 of the California Civil Code. The Parties waive all rights they may
have under Section 1542 of the California Civil Code, and acknowledge that subject to the terms
herein, the releases granted by the Parties extend to all claims
expressly released by Section
4(a)
and 4(c), whether such claims are known or unknown. The Parties are fully informed of the
provisions of Section 1542, which provides that:
“A general release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by him must
have materially affected his settlement with the debtor.”
(h) Publicity and Disclosure of Terms of this Agreement and the Patent License Agreement
and TDS Agreement. The Parties acknowledge that the initial public announcements of the
execution of this Agreement and the Patent License Agreement and TDS Agreement shall be in the
forms of press releases attached hereto as Exhibit E (Palomar’s press release) and
Exhibit F (Alma’s press release). The foregoing does not constitute Palomar’s approval of
Alma’s press release or Alma’s approval of Palomar’s press release. The Parties also agree that
Palomar and Xxxx will file a copy of this Agreement, the Patent License Agreement, the TDS
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Settlement Agreement
Agreement, the Consent Judgment and the Stipulated Dismissal With Prejudice (in each case without
redaction) with the United States Securities and Exchange Commission and other similar or
comparable governmental bodies, authorities or agencies, if necessary.
(i) Jurisdiction. Subject to and without limiting Section 4.7 of the Patent License
Agreement, the Parties hereby irrevocably consent to the exclusive jurisdiction and venue of any
state or federal court sitting in the Commonwealth of Massachusetts, over any action or proceeding
arising out of or relating to this Agreement or any agreement or document delivered in connection
herewith or therewith, and agree that all claims in respect of such action or proceeding may be
heard and determined in such state or federal court. Each of the Parties consents to the
jurisdiction of such court or courts for such actions or proceedings and agrees that the service
upon it of a summons and complaint by certified mail return receipt requested shall be sufficient
for such court or courts to exercise personal jurisdiction over the Parties for such actions or
proceedings. The Parties waive any objection to any action or proceeding relating to this Agreement
in any state or federal court sitting in the Commonwealth of Massachusetts, on the basis of forum
non conveniens, lack of personal jurisdiction or otherwise. Notwithstanding the foregoing, if any
action or proceeding may not be brought in any such court because all such courts lack subject
matter jurisdiction, the Parties may bring such action or proceeding in a court of appropriate
jurisdiction.
(j) Governing Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the substantive laws of the Commonwealth of Massachusetts, without regard to its
principles of conflicts of laws; provided that any dispute relating to the scope, validity,
enforceability, infringement or misuse of any Patent shall be governed by, and construed and
enforced in accordance with, the substantive laws of the jurisdiction in which such Patent
originates.
(k) Further Actions. Each Party agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary or appropriate in order to
carry out the purposes and intent of this Agreement.
(l) Parties Advised by Counsel. This Agreement has been negotiated between unrelated
Parties who are sophisticated and knowledgeable in the matters contained in this Agreement and who
have acted in their own self interest. In addition, each Party has been represented by legal
counsel. This Agreement shall not be interpreted or construed against any Party to this Agreement
because that Party or any attorney or representative for that Party drafted or participated in the
drafting of this Agreement.
(m) Notices. All notices, demands, requests, approvals, consents or other
communications to be given or delivered under this Agreement shall be in writing and shall be
deemed to have been given: (i) when delivered in person or by courier or confirmed facsimile; (ii)
upon confirmation of receipt when sent by certified mail, return receipt requested; or (iii) upon
receipt when sent by reputable private international courier with established tracking capability
(such as DHL, FedEx, or UPS), postage pre-paid, and addressed as set forth as the case may be, to
the noticed Party at the address set forth below, or such other address as a Party may specify by
written notice to the other.
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Notices shall be sent to Palomar at: |
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Palomar Medical Technologies |
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00 Xxxxxxxxx Xxxxxx |
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Xxxxxxxxxx, XX 00000 |
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Attention: CEO |
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Facsimile: (000) 000-0000 |
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with a required copy to: |
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Palomar Medical Technologies |
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00 Xxxxxxxxx Xxxxxx |
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Xxxxxxxxxx, XX 00000 |
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Attention: General Counsel |
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Facsimile: (000) 000-0000 |
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and a further required copy to: |
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Xxxxxxx Procter llp |
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Exchange Place |
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00 Xxxxx Xxxxxx |
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Xxxxxx, XX 00000 |
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Attention: Xxxxxxxx Xxxx, Esq. |
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Facsimile: (000) 000-0000 |
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and to General at: |
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Corporate Sponsored Research and Licensing |
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Massachusetts General Hospital |
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13th St. BLVD., BLDG. 149 Suite 5036 |
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Xxxxxxxxxxx, XX 00000 |
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Attention: Xxxxxxx Xxxxxxxxx, Ph. D. |
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Facsimile: (000) 000-0000 |
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with a required copy to: |
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Office of the General Counsel |
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Partners HealthCare System, Inc. |
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00 Xxxxxxxxx Xx., Xxxxx 0000 |
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Xxxxxx, XX 00000 |
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Attention: Xxxx X. Xxxxxxx, Esq. |
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Facsimile: (000) 000-0000 |
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and to Xxxx at: |
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Xxxx Lasers, Inc. |
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000 Xxxx Xxx Xxxx #000 |
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Xxxxxxx Xxxxx, XX 00000 |
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Attention: Xxxxxx Xxxxx |
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Facsimile: 000-000-0000 |
(n) Captions, Section Headings. As used in this Agreement, “including” means
“including but not limited to”, and “herein”, “hereof”, and “hereunder” refer to this Agreement as
a whole. The Section headings used herein are for reference and convenience only, and shall not
enter into the interpretation of this Agreement. Unless otherwise expressly provided herein, any
reference to a number of “days” hereunder shall refer to calendar days. References to Sections
include subsections, which are part of the related Section (e.g., a section numbered “Section 4(a)”
would be part of “Section 4”, and
references to “Section 5(a)” would also refer to material contained in the subsection
described as “Section 5(a)(ii)”).
(o) Capitalized Terms. Capitalized terms used but not defined herein shall have the
meaning ascribed to them in the Patent License Agreement.
(p) Mistakes of Fact or Law. Mistakes of fact or law shall not constitute grounds for
modification, avoidance or rescission of the terms of this Agreement.
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Settlement Agreement
IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby, have each caused
its duly authorized representative to execute and deliver this Agreement under seal as of the
Effective Date.
| Palomar Medical Technologies Inc. | ||||
By:
|
/s/ Xxxxxx X. Xxxxxx | |||
| Title: CEO | ||||
| Date: 3/29/07 | ||||
| The General Hospital Corporation | ||||
By: |
/s/ Xxxxxxx Xxxxxxxxx | |||
| Title: Director, Corporate Sponsored Research & Licensing | ||||
| Date: 3/29/07 | ||||
| Xxxx Lasers, Inc. | ||||
By: |
/s/ Xxxxxx Xxxxx | |||
| Title: CEO | ||||
| Date: | ||||
Exhibit A
Patent License Agreement
Exhibit B
TDS Agreement
Exhibit C
Consent Judgment
Exhibit D
Stipulated Dismissal With Prejudice
Settlement Agreement
Exhibit E
Palomar Press Release
Palomar Press Release
NEWS RELEASE for April 2, 2007 at 8:30 AM EST
Contacts:
|
Investor Relations | |
| Xxxxx Xxxxxx | ||
| Investor Relations Manager | ||
| Palomar Medical Technologies Inc | ||
| 000-000-0000 | ||
| xx@xxxxxxxxxxxxxx.xxx |
XXXX ADMITS INFRINGEMENT AND VALIDITY OF PALOMAR PATENTS
AND AGREES TO CHANGE TRADE DRESS
Xxxx to pay 11.0% for past patent and trade dress infringement
BURLINGTON, MA (April 2, 2007) ... Palomar Medical Technologies Inc
(Nasdaq:PMTI) announced today the resolution of its on-going patent infringement and trade dress
infringement lawsuit against Xxxx Lasers, Inc. Palomar accused Alma’s Harmony, Soprano, Soprano XL
and Sonata Systems of infringing U.S. Patent Nos. 5,735,844 and 5,595,568 (the “Patents”). Palomar
has an exclusive license to these patents from the General Hospital Corporation in Boston,
Massachusetts. Palomar also accused Alma’s Harmony System of infringing the distinctive trade dress
of Palomar’s StarLux System.
Xxxx has admitted to the infringement, validity and enforceability of the Patents and has
agreed not to challenge them in the future. Xxxx has also agreed to change the trade dress of the
Harmony and Aria Systems within the next six to nine months.
Xxxx will pay Palomar a 9.5% patent royalty plus interest on prior sales of their laser and
lamp based hair removal systems beginning with their initial sales in 2003 and a 1.5% trade dress
fee plus interest on prior sales of their Harmony and Aria systems. Those amounts will be
determined based on an audit by an independent auditor that will be conducted over the next few
months, and Palomar will recognize those amounts only after they are determined as part of that
audit. In addition, Xxxx will pay Palomar for its legal costs incurred during the lawsuit. From
March 28, 2007 through December 31, 2007, Xxxx will pay Palomar an 8.5% patent royalty and,
beginning on January 1, 2008, Xxxx will pay Palomar a 7.5% patent royalty on future sales of
current and any new light-based hair removal systems. The terms are in accordance with Palomar’s
standard license terms including combination systems that include multiple light sources for hair
removal and other applications.
Xxxxxxxx Xxxxx, Senior Vice President and General Counsel of Palomar, commented “The
resolution of this lawsuit against Xxxx as well as the resolution last spring of the lawsuits
against Cutera demonstrate the strength of Palomar’s patent portfolio. As in the past, when forced
to
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litigate, we will seek higher royalties than when competitors take a license on a voluntary basis.
As we announced on November 7, 2006, our license agreement with Cynosure was on more favorable
terms simply because we were not forced to xxx Cynosure prior to executing the license. We have
notified our unlicensed competitors that for now Palomar remains willing to offer licenses. Our
willingness and the rates of such licenses, however, may change as competitors continue to wait for
us to xxx them for patent infringement.”
Xxxxxx X. Xxxxxx, President and Chief Executive Officer of Palomar, commented, “This favorable
resolution with Xxxx so early in this litigation further substantiates the strength of these
patents. Palomar pioneered the cosmetic light based industry with the first high powered light
based hair removal system in 1997. Since then, this industry has become one of the fastest growing
segments in the medical industry with hair removal procedures being the most popular cosmetic light
based procedure performed today. Many companies have taken advantage of this high growth by
offering products covered by patents controlled by Palomar, and we intend to continue to enforce
our intellectual property. This strategy provides significant financial benefit to Palomar and its
shareholders.”
Xx. Xxxxxx continued, “We were also able to force Xxxx to change the look of their products on
a worldwide basis. Over the past few years the market has confused their products with ours and
Xxxx has been able to sell their product based on the reputation of Palomar. Our sales and
marketing group will now be free to address the growing market for light-based aesthetic products
without this confusion.”
Under Palomar’s license agreement with the General Hospital Corporation, Palomar will pay to
the General Hospital Corporation 40% of all payments from Xxxx excluding Palomar’s legal costs and
the trade dress fees.
For more information, please see the Settlement Agreement, the Non-Excluive Patent License
Agreement, the Trade Dress Settlement Agreement, the Consent Judgments and Stipulations of
Dismissal filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to a Current Report on Form 8-K filed
today.
About Palomar Medical Technologies, Inc: Palomar is a leading researcher and developer of
light-based systems for cosmetic treatments. Palomar pioneered the optical hair removal field,
when, in 1997, it introduced the first high-powered laser hair removal system. Since then, many of
the major advances in light-based hair removal have been based on Palomar technology. On December
8, 2006, Palomar became the first company to receive a 510(k) over-the-counter (OTC) clearance from
the United States Food and Drug Administration (FDA) for a new, patented, home use, light-based
hair removal device. OTC clearance allows the product to be marketed and sold directly to consumers
without a prescription. There are now millions of light-based cosmetic procedures performed around
the world every year in physician offices, clinics, spas and salons. Palomar is testing many new
and exciting applications to further advance the hair removal market and other cosmetic
applications. Palomar is focused on developing proprietary light-based technology for introduction
to the mass markets. Palomar has an agreement with Xxx Xxxxxxxx Xxxxxxx to develop and potentially
commercialize a patented home-use, light-based hair removal device for women. Palomar also has an
agreement with Xxxxxxx & Xxxxxxx Consumer Companies to develop and potentially commercialize
home-use,
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light-based devices for reducing or reshaping body fat including cellulite, reducing the
appearance of skin aging, and reducing or preventing acne.
For more information on Palomar and its products, visit Palomar’s website at
xxx.xxxxxxxxxxxxxx.xxx. To continue receiving the most up-to-date information and
latest news on Palomar as it happens, sign up to receive automatic e-mail alerts by going to the
Investor Relations’ section of the website.
With the exception of the historical information contained in this release, the matters described
herein contain forward-looking statements, including but not limited to statements relating to new
markets, future royalty amounts due from third parties, development and introduction of new
products, and financial and operating projections. These forward-looking statements are neither
promises nor guarantees, but involve risk and uncertainties that may individually or mutually
impact the matters herein, and cause actual results, events and performance to differ materially
from such forward-looking statements. These risk factors include, but are not limited to, results
of future operations, technological difficulties in developing or introducing new products, the
results of future research, lack of product demand and market acceptance for current and future
products, the effect of economic conditions, challenges in managing joint ventures and research
with third parties and government contracts, the impact of competitive products and pricing,
governmental regulations with respect to medical devices, including whether FDA clearance will be
obtained for future products and additional applications, the results of litigation, difficulties
in collecting royalties, potential infringement of third-party intellectual property rights,
factors affecting the Company’s future income and resulting ability to utilize its NOLs, and/or
other factors, which are detailed from time to time in the Company’s SEC reports, including the
report on Form 10-K for the year ended December 31, 2006 and the Company’s quarterly reports on
Form 10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no obligation to release publicly
the result of any revisions to these forward-looking statements that may be made to reflect events
or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Contact: Xxxxx Xxxxxx
|
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| Investor Relations Manager Palomar | ||
| Medical Technologies, Inc. 000-000-0000 |
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| xx@xxxxxxxxxxxxxx.xxx | ||
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Exhibit F
Xxxx Press Release
Xxxx Press Release
Xxxx Lasers and Palomar Medical Technologies settle Infringement Lawsuit
Buffalo Grove, Illinois, April 2, 2007—Xxxxxx Xxxxx, Chief Executive Officer of Xxxx Lasers,
announced today that Xxxx Lasers, Ltd. and Palomar Medical Technologies, Inc. have settled their
civil action filed in the United States District Court for the District of Massachusetts. The suit
involves certain US hair removal patents owned by
Massachusetts General Hospital and licensed exclusively to Palomar.
Under the SETTLEMENT AGREEMENT, Xxxx Lasers obtains a non-exclusive license to utilize the patented
technology in its product line. “With the best interests of Xxxx Lasers’ customers in mind, we
decided to enter into a licensing agreement with
Palomar.” explained Xx. Xxxxx. Through the settlement, Xxxx Lasers has avoided a
potentially long and expensive legal battle.
In practical terms, the settlement means Xxxx Lasers can continue its strategy of innovation
through technology without interruption. “Because we’ve removed these patent issues with Palomar,”
said Xx. Xxxxx, “the leadership and product development teams at Xxxx Lasers will be able to focus
solely on achieving our core vision—to be a global leader in providing technology-based solutions
to the aesthetic marketplace.”
About Xxxx Lasers, Ltd.
Xxxx Lasers, Ltd. is a global developer, manufacturer and seller of laser, light-based and
radiofrequency devices for aesthetic and medical applications. Since 1980, the founders of Xxxx
Lasers have been at the forefront of innovative laser, light-based and RF medical technology. Their
technical expertise and in-depth understanding of practitioners’ needs led to the development of
Xxxx Lasers’ multi-technology/multi-application systems. Xxxx Lasers’ mission is to provide
modular, cost-effective and high performance designs that enable medical practitioners to
confidently offer safe, effective and profitable aesthetic treatments to their patients. More
information about Xxxx Lasers can be found at
xxx.xxxxxxxxxx.xxx.
Contact:
Xxxxx Xxxxxxxxx, Executive Vice President, Global Marketing
Tel: 0-000-000-0000
Xxxxxx@xxxxxxxxxx.xxx
