POSSIS MEDICAL, INC.
EXHIBIT INDEX
Exhibit
Number Description
10.25 Settlement agreement and mutual release relating to the
termination of the Perma-Seal supply and distribution agreement
with C.R. Bard, Inc., dated January 28, 1997.
27 Financial data schedule (electronically filed only).
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release ("Agreement") is entered into
effective the 28th day of January, 1997, by and between Possis Medical, Inc.
("Possis"), on the one hand, and Bard Vascular Systems Division, C. R. Bard,
Inc. ("Bard"), and IMPRA, Inc., on the other hand.
RECITALS
WHEREAS, Possis and Bard entered into a Supply and Distribution Agreement
dated December 30, 1994 ("Distribution Agreement"), regarding the worldwide
distribution, marketing, and sales of the Possis Perma~Seal dialysis access
graft, a vascular graft serving as an artificial blood vessel and access point
for kidney dialysis treatment, and other related or improved products
manufactured by Possis (hereinafter referred to collectively as the Perma-Seal
Graft")
WHEREAS, Possis and Bard entered into an Addendum to the Distribution
Agreement dated April 1, 1996 ("Addendum"), which modified some of the terms of
the Distribution Agreement;
WHEREAS, Bard acquired IMPRA, a manufacturer of vascular grafts, including
grafts used in connection with dialysis treatment, through a merger transaction
that was consummated on or about September 15, 1996;
WHEREAS, disputes have arisen between Possis, on the one hand, and Bard and
IMPRA on the other hand, regarding the distribution, marketing, and sales
of the Perma-Seal Graft and the rights and obligations of the parties under the
Distribution Agreement and Addendum; and
WHEREAS, Possis, Bard, and IMPRA have independently determined that it is
desirable and beneficial to settle, compromise, and resolve their disputes and
claims, without any admission of liability by any party, on the terms set forth
in this Agreement;
NOW, Therefore, in order to consummate the intent of the parties to enter
into a full, final, and complete settlement of all disputes and claims as set
forth in the foregoing recitals, which are made a contractual part of this
Agreement, and in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the undersigned parties agree as follows:
1. Settlement Sum. Bard shall pay Possis a settlement sum in the amount of
One Million Seven Hundred Fifty Thousand Dollars ($1,750,000.00) within ten (10)
days after the effective date of this Agreement. Payment of the settlement sum
shall be made by wire transfer of immediately available funds to the following
account:
Name of Bank: Norwest Bank Minnesota, N.A.
Address of Bank: Norwest Center, Sixth Street & Marquette Avenue,
Minneapolis Minnesota 55479-1041
Name of Account Holder: Possis Medical, Inc.
Account Number: 6355003718
Bank ABA Number: 091000019
Attention: Ms. Vicki Plymate (612-667-0557)
or in such other manner as Possis may reasonably request in advance of the
payment date.
2. Termination of Distribution Agreement and Addendum. The Distribution
Agreement and Addendum are hereby terminated, and the rights and obligations of
the parties thereunder are hereby canceled, save as set forth in paragraph 3
below regarding Restricted Information.
3. Restricted Information. The provisions regarding Restricted Information
set forth in Sections 1.10, 11.01, and 11.02 of the Distribution Agreement shall
remain in full force and effect. Restricted Information shall continue to be
held in confidence as set forth in Section 11.01 of the Distribution Agreement,
and, with the exception of the retention of one (1) archival copy of Restricted
Information as set forth in Section 11.02 of the Distribution Agreement, all
Restricted Information shall be returned to the disclosing party within 30 days
after the effective date of this Agreement.
4. Return of Perma-Seal Graft Inventory. Within 30 days after the effective
date of this Agreement, Bard shall return to Possis all unused inventory of the
Perma-Seal Graft that it is still holding. All costs and risks of shipment
involved in accomplishing the return of inventory shall be borne solely by
Possis. Bard hereby assigns and transfers the unused Perma~Sea1 Graft inventory
to Possis "AS IS" and "WHERE IS" and without recourse, representation, or
warranty, express or implied.
5. Mutual Releases:
a) Possis hereby fully and completely releases and forever discharges Bard
and IMPRA, each and all of their respective predecessors, successors, parents,
subsidiaries, and affiliates, and each and all of their present and former
officers, directors, partners, principals, employees, agents, and assigns,
jointly and severally (collectively in this paragraph 5(a), "Releasees"), of and
from any and all claims, complaints, causes of action, debts, demands, disputes,
liabilities, or obligations whatsoever, whether legal or equitable, and whether
sounding in tort or contract or based on any other theory of recovery, and
whether for compensatory or punitive damages or other relief or remedy, whether
known or unknown, whether suspected or unsuspected, whether liquidated or
unliquidated, whether mature or unmatured, which Possis had, has, or may ever
have or claim to have against any of the Releasees for, upon, or by reason of
any matter, event, cause, or thing whatsoever from the beginning of the world
through the effective date of this Agreement, including, without limitation, all
claims, complaints, causes of action, debts, demands, disputes, liabilities, or
obligations arising out of or relating to the Distribution Agreement, the
Addendum, the Perma-Seal Graft, or Bard's acquisition of IMPRA.
b) Bard and IMPRA hereby fully and completely release and forever discharge
Possis, each and all of its predecessors, successors, parents, subsidiaries, and
affiliates, and each and all of their present and former officers, directors,
partners, principals, employees, agents, and assigns, jointly and severally
(collectively in this paragraph 5(b), "Releasees"), of and from any and all
claims, complaints, causes of action, debts, demands, disputes, liabilities, or
obligations whatsoever, whether legal or equitable, and whether sounding in tort
or contract or based on any other theory of recovery, and whether for
compensatory or punitive damages or other relief or remedy, whether known or
unknown, whether suspected or unsuspected, whether liquidated or unliquidated,
whether mature or unmatured, which Bard or IMPRA had, have, or may ever have or
claim to have against any of the Releasees for, upon, or by reason of any
matter, event, cause, or thing whatsoever from the beginning of the world
through the effective date of this Agreement, including, without limitation, all
claims, complaints, causes of action, debts, demands, disputes, liabilities, or
obligations arising out of or relating to the Distribution Agreement, the
Addendum, the Perma-Seal Graft, or Bard's acquisition of IMPRA.
6. Non-Disparagement:
a) Possis shall not, directly or indirectly, make statements or comments
about Bard or IMPRA or their officers, directors, or employees or their
reputations, products, or businesses which would reasonably be interpreted in
the vascular graft and medical device industry as being demeaning, disparaging,
or defamatory.
b) Bard and IMPRA shall not, directly or indirectly, make statements or
comments about Possis or its officers, directors, or employees or its
reputation, products, or business which would reasonably be interpreted in the
vascular graft and medical device industry as being demeaning, disparaging, or
defamatory.
7. Confidentiality. The terms and conditions of this Agreement are
confidential in nature and are intended to be kept confidential. The parties
shall not disclose, comment upon, or publish, in any manner, to any third party
(i.e., a person or entity who is not an employee, agent, or director of the
parties) the amount of the settlement sum or the terms and conditions of this
Agreement, and they shall take all reasonable and prudent steps to ensure that
no such third-party disclosures are made by any of their employees, agents, or
directors, except (a) as may be necessary in dealing with legal counsel,
auditors, or lenders in their normal course of business, (b) as may be necessary
to comply with the requirements of any regulatory agency or body which exercises
oversight over their business, (c) as may be necessary for the preparation of
financial statements or tax returns, (d) as may be necessary for adequate
disclosure to shareholders, in quarterly and annual earnings releases and in
quarterly and annual reports of Possis to its shareholders or in response to
inquiries from shareholders, (e) in response to subpoena, official government
inquiry, or other lawful process, (f) as otherwise required by law, or (g) to
enforce the terms and conditions of this Agreement. Any third-party disclosure
of the settlement terms in accordance with subparts (a) through (g) of this
paragraph 7 shall be neutral in nature consistent with paragraph 6 above
regarding non-disparagement and paragraph 9 below regarding no admission of
liability or wrongdoing by any party.
8. Press Release or Public Announcement. Any press release or public
announcement regarding the subject matter of this Agreement shall be subject to
advance review and approval by Bard. Any such press release or public
announcement shall be neutral in nature consistent with paragraph 6 above
regarding non-disparagement and paragraph 9 below regarding no admission of
liability or wrongdoing by any party, and shall preserve the confidentiality of
the settlement terms as required by paragraph 7 above.
9. No Admission of Liability or Wrongdoing. The parties have agreed to the
settlement embodied in this Agreement to resolve their disputes and to avoid the
costs and burdens of litigation. Therefore, nothing in this Agreement, including
payment of the settlement sum, shall in any way be deemed or construed to
constitute an admission of liability or wrongdoing by any party or the waiver of
any defense.
This Agreement has been drafted and entered into as a compromise of
disputed claims under Rule 408 of the Federal Rules of Evidence, and it shall
not be offered or received conditions hereof.
10. Acknowledgment of Representation by Independent Counsel. The parties
acknowledge that they have been represented by their own independent legal
counsel in entering into this Agreement, and that they are each relying on their
own judgment and that of their own legal counsel as to all of the terms and
conditions of this Agreement.
11. Representations. The parties each represent and warrant as follows:
(a) They have not assigned or transferred to anyone, voluntarily or
involuntarily, any matter released pursuant to the terms of this Agreement, or
any part or portion thereof.
(b) They have full power and authority to enter into this Agreement, which
constitutes the valid, legal, and binding obligation of each of them.
(c) The person who has executed this Agreement on their behalf has full
authority to do so, and to bind them as a party to this Agreement.
12. General Provisions:
(a) This Agreement constitutes the entire Agreement between the parties
regarding the subject matter hereof. No representations or inducements have been
made to any party concerning this Agreement other than the representations or
covenants set forth herein, and this Agreement supersedes all prior agreements
and understandings between the parties, oral or written, with respect to the
subject matter hereof.
(b) This Agreement may be amended or modified only by a written instrument
signed by all of the parties or their successors in interest.
(c) The terms and conditions of this Agreement are contractual in nature,
and not a mere recital. The Agreement shall be governed by, interpreted
according to, and enforced in accordance with the laws of the Commonwealth of
Massachusetts.
(d) This Agreement shall be binding and shall inure to the benefit of the
parties and their respective successors and assigns.
(e) The captions identified in the paragraphs of this Agreement are for
convenience only, and they do not in any way limit, expand, or modify the terms
and conditions of this Agreement.
(f) This Agreement may be executed by facsimile signature and in one or
more counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to
be effective as of the date first set forth above.
P0SSIS MEDICAL, INC. BARD VASCULAR SYSTEMS DIVISION
C. R. BARD, INC.
By By
Its Its
IMPRA, INC.
By
Its
1492536.1