Ex-10.34
SETTLEMENT AGREEMENT
WHEREAS THIS Settlement Agreement, entered this 19th day of November,
2003, by and between Interlase Limited Partnership ("Interlase") and The
Spectranetics Corporation ("Spectranetics"), has been entered into by the
parties to resolve a dispute regarding a License Agreement (the "License
Agreement") dated February 1, 1993, executed by the predecessor in interest of
Interlase (known as "Pillco Limited Partnership") and Spectranetics, and
WHEREAS it is the intention of the parties hereto to settle the matter
aforesaid, upon the terms and conditions set forth herein, and the parties do
agree as follows:
1. The parties reaffirm and ratify the terms and conditions set forth in
the License Agreement attached hereto as Exhibit A and such terms are
incorporated herein by reference. The License Agreement grants
Spectranetics a license under United States Patent Nos. 4,784,132;
4,800,876; 4,848,336; and 5,041,108, and Spectranetics agrees that the
License Agreement arose indirectly from a contested matter in which a jury
found the patents valid and infringed and should any future proceedings be
brought by either party in connection with such patents it shall not
challenge the validity of any of such patents as may be subsisting at that
time.
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2. Spectranetics and Interlase hereby agree that as of the effective date
of this Settlement Agreement, royalties payable pursuant to the License
Agreement shall be adjusted as follows:
a) In the past, Spectranetics had not reported or paid royalties on
the Spectranectics Laser Sheath sales or Lead Locking Device sales
asserting that the same are not within the terms of the License
Agreement. Interlase has reviewed the issue and the parties agree
that the devices manufactured by Spectranetics known as the
Spectranetics Laser Sheath and the Lead Locking device are not
within the terms of the License Agreement or within the claims of
the associated patents and, therefore, sales of such devices shall
not generate royalties under the License Agreement.
b) Spectranetics has filed an application with the Food and Drug
Administration for a peripheral use which, if granted, shall subject
Spectranetics' sales of products associated with "XXXX" (laser
angioplasty to treat critical limb ischemia) to royalties at the
rate of three and one-half (3 -1/2%) percent of the net selling
price of the Intraluminal Laser Component as defined in paragraph
1.04 of the License Agreement.
c) Spectranetics' methodology for calculation of service revenue
outlined on page six and summarized in Exhibit IV of the audit
report of Xxxxx, Xxxxx and Xxxxxx dated October 24, 2002, is hereby
validated; service revenue is not subject to royalties under the
license agreement to the
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extent that such revenue does not exceed the lesser of $1,500,000
per quarter or 35% of Of the aggregate "Net Selling Price" (as that
term is defined in Part 1.05 of the License Agreement) of all
"Licensed Apparatus" including "Intraluminal Laser Components",
excluding sales of the devices referenced in Part 2(a) of this
Settlement Agreement.
3. Subject to the supervision of the Arlington County Circuit Court, all
rights, title, and interest to the patents that are the subject of the
License Agreement in Exhibit A belong to Interlase.
4. Since Interlase is the subject of a receivership in Arlington County,
Virginia, this Settlement Agreement is conditioned upon the ratification
of the Settlement Agreement by the Arlington County Circuit Court. Since
Interlase is also the subject of a suspended bankruptcy proceeding in the
United States Bankruptcy Court for the Eastern District of Virginia ("the
Bankruptcy Court"), this Settlement Agreement is also conditioned upon the
ratification thereof by the Bankruptcy Court.
In the event that either the Arlington County Circuit Court or the
Bankruptcy Court rejects this Settlement Agreement, then the terms
contained herein shall operate as a nullity in their entirety, and nothing
contained herein shall be deemed to be an admission by either
Spectranetics or Interlase. Interlase
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covenants that it will use due diligence in securing the approval of the
Arlington County Circuit Court and the Bankruptcy Court.
5. The approval and confirmation of this Settlement Agreement by the
Bankruptcy Court and the Arlington County Circuit Court shall be a
prerequisite to the payment to Interlase referenced in Part 8 of this
Settlement Agreement.
6. Twenty-four (24) hours prior to filing the last of the two
respective motions for approval of this Settlement Agreement in the
Arlington County Circuit Court and the Bankruptcy Court, Interlase will
advise Spectranetics, by written notice as hereinafter provided, that the
last of the two requisite hearings is imminent, so that Spectranetics may
prepare to issue an appropriate press release to the public stating that
Spectranetics and Interlase have resolved by mutual agreement the issues
raised by the matters referenced in Part 7 of this Settlement Agreement
subject to the said Courts' approval.
7. Contemporaneous with the full execution of this Settlement
Agreement, the parties, through their attorneys of record in their
respective lawsuits that are now pending in the U.S. District Court for
the District of Colorado known as The Spectranetics Corporation v Xxxxxxx
X. Xxxxxxxxx, et al., Civil Action No. 02-MK-2177 (MJW) and Interlase
Limited Partnership v. The Spectranetics Corporation, Civil Action No.
03-MK-990 (MJW), shall execute for each of the foregoing lawsuits the
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Stipulations for Entry of Order of Dismissal (the "Stipulations") annexed
as Exhibits B and C to this Settlement Agreement.
8. Upon its receipt of: (1) copies teste of the orders entered by
the Arlington County Circuit Court and the Bankruptcy Court, approving
this Settlement Agreement; and (2) original fully executed Stipulations,
Spectranetics shall within the next twenty-four (24) hours wire the sum of
Two Hundred Thousand Dollars ($200,000.00) into the account of the Special
Receiver of Interlase. The wire shall go to Virginia Commerce Bank,
Account number 00000000, Routing number 000000000, Name of Account:
"Interlase Limited Partnership".
Following the successful wire transfer of the funds, Spectranetics,
through its counsel, shall cause the fully executed Stipulations to be
filed with, and the accompanying Orders of Dismissal to be entered by the
Court and Interlase shall through its attorneys cooperate in securing the
entry of the Orders, as needed.
9. It being the intent of the parties to resolve any and all
disputes, known and unknown, between the parties, it is hereby agreed that
any and all claims, causes of action, offsets or similar monetary claims
that have arisen or that may have arisen prior to the execution of this
Settlement Agreement, whether sounding in contract, tort or otherwise, are
hereby settled, released and satisfied, and neither party shall have any
liability for any claim, cause of action, offset or similar
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monetary claim that accrued prior to the date of this Settlement
Agreement. This Settlement Agreement is approved and ratified by Xxxxx
Xxx, Xxxxxx Family Limited Partnership, and by Xxxxxxx Xxxxxx, on behalf
of Xxxxxxx, Xxxxxx & Xxxxxx ("the said parties"), as evidenced by the
endorsement of a counterpart hereof by the said parties or their
respective counsel. Interlase covenants that the said parties and the
Receiver constitute all of the persons and entities necessary to approve
and ratify this Settlement Agreement subject to approval of the said
Courts.
10. Notices that are required pursuant to this Settlement Agreement
shall be sent as follows:
A. Notices to Interlase shall be sent via U.S. Mail and via
facsimile to:
Xxxxxxx X. Xxxxxxxxx, Special Receiver
Interlase Limited Partnership
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
B. Notices to Spectranetics shall be sent via U.S. Mail and via
facsimile to:
Xxxx X. Xxxxxxx, President and CEO
The Spectranetics Corporation
00 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
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Witness our seals this 19th day of November, 2003.
INTERLASE LIMITED PARTNERSHIP Attest:
By: /s/Xxxxxxx X. Xxxxxxxxx ---------------------------
-----------------------
Xxxxxxx X. Xxxxxxxxx
Special Receiver, Interlase Limited Partnership
Date: November 20, 2003
THE SPECTRANETICS CORPORATION Attest:
By: /s/ Xxxx X. Xxxxxxx /s/Guy A. Childs
------------------------------- ---------------------------
Xxxx X. Xxxxxxx,
President and CEO,
The Spectranetics Corporation
Date: November 19, 2003
We hereby approve, ratify and confirm this Settlement Agreement:
/s/Xxxxxxx X. Xxxxxxxxxx, Esquire
---------------------------------
Xxxxxxx X. Xxxxxxxxxx, Esquire
Counsel for Xxxxx Xxx
Xxxxxx X. Xxxxx Law Xxxxxx
0000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
/s/Xxxxxxx X. Xxxxx, Esquire
---------------------------------
Xxxxxxx X. Xxxxx, Esquire
Counsel for The Xxxxxx Family Limited Partnership
Grad, Xxxxx & Klewans, PC
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
/s/Xxxxxxx X. Xxxxxx, Esquire
---------------------------------
Xxxxxxx X. Xxxxxx, Esquire
Counsel for Xxxxxxx, Xxxxxx & Xxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
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