EXHIBIT 99.2
SETTLEMENT AGREEMENT
THIS AGREEMENT is made and entered into this 8th day of November, 2002,
(the "Effective Date") by and between Vascular Solutions, Inc., a Minnesota
Corporation having an office at 2495 Xenium Lane North, Minneapolis, Minnesota
("VSI") and Datascope Corp., a Delaware corporation having an office at 14
Philips Parkway, Montvale, New Jersey 07645 ("Datascope").
WHEREAS, Datascope has filed an action in the U.S. District Court for
the District of Minnesota, Case No. 00-1639 JMR/FLN, against VSI alleging that
VSI's Duett products and their use infringe one or more claims of U.S. Patent
No. 5,725,498 (the `498 patent") ("Minnesota Action");
WHEREAS, VSI has alleged that the `498 patent is unenforceable, invalid
and not infringed (the "Minnesota Counterclaims"); and
WHEREAS, Datascope and VSI desire to enter into an agreement and
license to settle the Minnesota Action and the Minnesota Counterclaims upon the
terms and conditions set forth herein.
NOW, THEREFORE, intending to be legally bound, the parties hereto agree
as follows:
Part 1 - Definitions
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1.1 "Datascope's Patents" shall mean U.S. Patent Nos. 5,725,498;
5,741,223; 5,830,130; 5,391,183; 5,437,631; 5,591,204; and 5,948,425, and any
reissues, reexaminations, extensions thereof or any divisional or continuation
applications thereof, or continuation-in-part patent applications thereof
entitled to the benefit of a filing date prior to the Effective Date, any
patents issuing thereon, and all corresponding foreign patents heretofore or
hereafter issued.
1.2 "Licensed Product" shall mean the following:
(i) the Duett 1000 vascular closure device as it presently
exists and is marketed and sold by VSI as of the Effective Date of the Agreement
(Exhibit A); and
(ii) the Diagnostic Duett vascular closure device as it
presently exists and is marketed and sold by VSI as of the Effective Date of the
Agreement (Exhibit B); and
(iii) the Duett Pro vascular closure device as it presently
exists and is marketed and sold by VSI as of the Effective Date of the Agreement
(Exhibit C); and
(iv) the Diagnostic Duett Pro vascular closure device as it
presently exists and is marketed and sold by VSI as of the Effective Date of the
Agreement (Exhibit D); and
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(v) any variation of the products described in (i), (ii),
(iii) or (iv) that does not change the method of operation or use of the
products or their components, as described in the current Instructions for Use
(Exhibits A-D) for the products. In addition, the average viscosity of the
procoagulant mixture in any variations of the above four products may not differ
by more than five percent (5%) from the average viscosity of the procoagulant
mixture presently used in the above four products. Further, VSI represents: (a)
that the present products described in 1.2(i) and 1.2(iii) have a viscosity of
between 30 and 100 Centipose (mPas) when measured at ninety eight (98(degree))
degrees F plus or minus two (2(degree)) degrees with a Brookfield Digital
Viscometer Model DV-E in accordance with its Instructions for Use; and (b) the
present products described in 1.2(ii) and 1.2(iv) have a viscosity of between
100 and 800 Centipose (mPas) when measured at ninety eight (98(degree)) degrees
F plus or minus two (2(degree)) degrees with a Brookfield Digital Viscometer
Model DV-E in accordance with its Instructions for Use.
1.3 "Affiliates" shall mean any corporation or other entity which, as
of the Effective Date, directly or indirectly owns, is owned by or is under
common ownership with a party to this Agreement to the extent of at least fifty
percent (50%) of the equity having the power to vote on or direct the affairs of
the corporation or other entity. Any such corporation or other entity shall be
deemed to be an Affiliate only so long as such ownership or control exists.
Part 2 - Releases and License Grants
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2.1 Datascope hereby releases VSI and its Affiliates and the customers
thereof from liability for any claim of patent infringement Datascope has or may
have in respect of any Licensed Product.
2.2 Datascope hereby grants to VSI and its Affiliates an irrevocable,
worldwide, non-exclusive license, without the right to grant sublicenses, under
Datascope's Patents to make, use, sell and offer to sell Licensed Products.
2.3 Each party hereto hereby releases the other and its Affiliates (and
its respective officers, directors, employees, agents, and attorneys) from any
and all liabilities, claims, causes of action and damages arising from actions
of VSI and/or Datascope prior to the Effective Date hereof, under or in
connection with VSI's Counterclaims, filed in the Minnesota Action.
2.4 VSI and its Affiliates hereby acknowledge that the use of the
Licensed Products infringes at least one claim of the Datascope Patents
referenced above. Further, VSI acknowledges that the Datascope Patents
referenced above are valid and enforceable, and that it is precluded from
challenging, directly or indirectly, the validity or enforceability of these
patents in any court or tribunal or in the United States Patent and Trademark
Office.
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Part 3 - Consideration
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3.1 In consideration of dismissal of the Minnesota Action and in
further consideration of this Agreement, and immediately upon its execution, VSI
shall pay Datascope Three Million Seven Hundred Fifty Thousand Dollars
($3,750,000).
Part 4 - Dismissal of the Minnesota Action
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4.1 Upon Execution of this Agreement, the parties will stipulate to a
dismissal with prejudice of all claims and counterclaims in substantially the
form attached hereto as Appendix A hereof. Datascope will submit the stipulated
dismissal to the court in the Minnesota Action. Datascope and VSI agree to
perform all reasonable acts necessary to effect entry of the stipulated
dismissal by the Court.
Part 5 - Representations and Warranties
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5.1 Each party hereto hereby represents and warrants:
(i) that each party has the right to enter into this
Agreement, to grant the releases and rights granted herein and does not require
the consent of any third party to grant the releases and rights granted herein;
(ii) that each party is not currently engaged in, nor will it
engage in, any activity which would in any manner be inconsistent with the
releases and rights granted herein;
(iii) that the execution and delivery of this Agreement by
each party has been duly and validly authorized by all necessary action on the
part of each party and any party from whom it derives its rights and that,
assuming valid execution by each party, this Agreement is a valid and binding
obligation of each party enforceable against it in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally, and
rules or laws concerning equitable remedies; and,
(iv) that execution and delivery of this Agreement by each
party, or compliance with the terms and provisions hereof, will not breach any
statute or regulation of any governmental authority or conflict with or breach
any judgment, order, injunctive decree, or ruling of any court or governmental
authority, domestic or foreign, to which each party is subject or of the
articles or by-laws of each party.
Part 6 - Marking
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6.1 After exhausting existing inventories of Licensed Product and
labels therefor, if any, VSI shall use reasonable efforts to promptly comply
with 35 U.S.C. ss. 287 by
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marking, and/or by causing its Affiliates to mark, all Licensed Products with
the patent numbers of Datascope's Patents which cover the Licensed Products in
question.
Part 7 - Term and Early Termination
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7.1 Unless sooner terminated as herein provided, this Agreement shall
continue in full force and effect commencing with the Effective Date until the
expiration of the last-to-expire of Datascope's Patents.
Part 8 - General Provisions
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8.1 Neither party shall unreasonably withhold its consent or agreement
when such consent or agreement is required hereunder or is requested in good
faith by the other party hereunder.
8.2 This Agreement is unassignable by either party except with the
prior written consent of the other and except that it may be assigned without
consent to a corporate successor of VSI or Datascope or to a person or
corporation acquiring all or substantially all of the business and assets of the
division or divisions of VSI or Datascope involved in the sale of Licensed
Products. Any such corporate successor or acquiring party shall be bound to VSI
or Datascope in the same manner and to the full extent each party is bound to
the other hereunder.
8.3 All notices to be given by each party to the other shall be made in
writing, transmitted via facsimile and confirmed by U.S. Post Office Registered
or Certified Mail, return receipt requested, and addressed, respectively, to the
parties at the following addresses, or to such other address as the parties
hereafter agree to:
To VSI:
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Chief Executive Officer
Vascular Solutions, Inc.
2495 Xenium Lane North
Minneapolis, Minnesota 55441
Facsimile No. (763) 656-4250
with copies to:
Mark Briol
Briol & Associates
3700 IDS Center
80 S. Eighth Street
Minneapolis, MN 55402
Facsimile No. (612) 337-5151
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To Datascope:
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Corporate Counsel
Datascope Corp.
14 Philips Parkway
Montvale, New Jersey 07645
Facsimile No. (201) 307-5414
with copies to:
Edward Laine
Oppenheimer Wolff & Donnelly LLP
3400 Plaza VII Building
45 South Seventh Street
Minneapolis, Minnesota 55402
Facsimile No. 612-607-7100
Each notice shall be effective as of its first date of receipt by the receiving
party.
8.4 This Agreement constitutes the entire agreement between the parties
and supersedes all written or oral prior agreements or understandings. No
variation or modification of the terms or provisions of this Agreement shall be
valid unless in writing and signed by the parties hereto.
8.5 No rights or licenses are granted by VSI under this Agreement to
Datascope, or by Datascope to VSI, either expressly or by implication, except
those specifically set forth herein.
8.6 All matters affecting the interpretation, validity and performance
of this Agreement shall be governed by the laws of the state of Minnesota
applicable to agreements made and to be performed wholly within Minnesota, but
the scope and validity of Datascope's Patents shall be governed by the
applicable laws of the country granting the patent in question.
8.7 The captions herein are solely for convenience of reference and
shall not affect the construction or interpretation of this Agreement.
8.8 The covenants, terms and provisions of this Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns.
8.9 This Agreement may be executed separately or independently in any
number of counterparts, each and all of which together shall be deemed to have
been executed simultaneously and for all purposes to be one Agreement. Facsimile
signatures shall constitute original, binding signatures.
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8.10 Waiver by VSI or Datascope of any single default or breach or
succession of defaults or breaches by the other shall not deprive VSI or
Datascope of any right to terminate this Agreement arising out of any subsequent
default or breach.
IN WITNESS WHEREOF, VSI and Datascope have caused this Agreement to be
executed in duplicate by their respective duly authorized officers.
VASCULAR SOLUTIONS, INC. DATASCOPE CORP.
/s/ Howard C. Root /s/ S. Arieh Zak
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Signature Signature
Howard C. Root S. Arieh Zak
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Printed Name Printed Name
Chief Executive Officer Vice President & Corporate Counsel
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Title Title
November 26, 2002 November 8, 2002
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Date Date
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