Exhibit 10.1

 

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

 

Civil Action No. 08-cv-02048-REB-KLM

 

(Consolidated with Civil Action No. 08-cv-02055-CMA-CBS, 08-cv-02078-MSK-BNB,
08-cv-02267-MSK-CBS, 08-cv-02420-PAB, 08-cv-02603-MSK-BNB)

 

In re SPECTRANETICS CORPORATION SECURITIES LITIGATION

 

STIPULATION OF SETTLEMENT

 

This Stipulation of Settlement (the “Stipulation”), dated as of September 7,
2010, is made and entered into by and among the following parties to the above
entitled action, by and through their respective counsel of record:  (1) the
Settling Class Action Plaintiff (as defined below), on behalf of itself and each
of the Settlement Class Members (as defined below); and (2) the Settling
Class Action Defendants (as defined below), by and through their respective
counsel of record in the Class Action (as defined below).  The Settlement set
forth in this Stipulation (the “Settlement”) is intended by the Settling
Class Action Parties (as defined below) to fully, finally and forever resolve,
discharge and settle the Released Claims by Settling Class Action Parties (as
defined below) against the Released Parties (as defined below), upon and subject
to the terms and conditions hereof and subject to the approval of the United
States District Court for the District of Colorado pursuant to Rule 23 of the
Federal Rules of Civil Procedure.

 

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I.                                       THE LITIGATION.

 

A.                                    Background.

 

The Spectranetics Corporation (“Spectranetics” or the “Company”) develops,
manufactures, markets, and distributes single-use fiber-optic laser catheters
for use in minimally invasive surgical procedures to clear blocked arteries
within the body.  It has a range of laser catheters that are used to treat
peripheral arterial disease (“PAD”) by removing stenoses and occlusions in the
legs both above and below the knee.  Spectranetics also has a range of laser
catheters used to clear blockages in and around the heart.

 

On September 4, 2008, the FDA and the U.S. Immigration and Customs Enforcement
(“ICE”) executed a search warrant on Spectranetics.  The search warrant
requested information in four areas related to potential violations of FDA and
immigration rules and regulations including (i) the promotion, use, testing,
marketing and sales regarding certain of the company’s products for the
treatment of in-stent restenosis, payments made to medical personnel and an
identified institution for this application, (ii) the promotion, use, testing,
experimentation, delivery, marketing and sales of catheter guidewires and
balloon catheters manufactured by certain third parties outside of the United
States, (iii) two post-market studies completed during the period from 2002 to
2005 and payments to medical personnel in connection with those studies and
(iv) compensation packages for certain of the company’s personnel.

 

On December 29, 2009, the Company announced that it had reached a resolution
with the United States Department of Justice (DOJ) and the Office of

 

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Inspector General (OIG) of the United States Department of Health and Human
Services regarding the federal investigation which had commenced on September 4,
2008.  As part of the resolution, in December 2009 the Company entered into a
Non-Prosecution Agreement with the DOJ, a civil Settlement Agreement with the
DOJ and the OIG, and a five-year Corporate Integrity Agreement with the OIG. 
There were no criminal charges against the Company.  As part of the Settlement
Agreement, the Company also expressly denied the contentions of the United
States, except those specifically included in the Non-Prosecution Agreement, and
there was no admission of wrongdoing by the Company.

 

B.                                    The Class Actions.

 

On or after September 23, 2008, six federal securities class action complaints
were filed against Spectranetics and various other defendants, including John G.
Schulte, Guy A. Childs, Emile J. Geisenheimer, Jonathan W. McGuire, Donald
Fletcher, and Craig M. Walker, M.D., in the United States District Court for the
District of Colorado (the “Court”), entitled Hancook v. Spectranetics Corp., et
al., Civil Case No. 08-cv-02048-REB-KLM, Donoghue v. Spectranetics Corp., et
al.,  Civil Case No. 08-cv-02055-REB-KLM, Dickson v. Spectranetics Corp., et
al., Civil Case No. 08-cv-02078, Jacobusse, et al. v. Spectranetics Corp., et
al., Civil Case No. 08-cv-02267, Posner, et al. v. Spectranetics Corp., et al.,
Civil Case No. 08-cv-02420, Genesee County Employee’s Retirement System v.
Spectranetics Corp, et al., Civil Case No. 08-cv-02602.   These cases alleged
class periods either between April 19, 2007 and September 4, 2008 or April 26,
2005 and September 4, 2008.  Pursuant to a Court

 

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Order dated January 16, 2009, these complaints were consolidated in this Court
and captioned In re Spectranetics Corporation Securities Litigation, Civil Case
No. 08-cv-02048-REB-KLM  (the “Class Action”).

 

By Court Order dated June 15, 2009, the Court appointed the Spectranetics
Investor Group — comprised of Genesee County Employees’ Retirement System, the
Wayne County Employees’ Retirement System, and Peter J. Tortora — as Lead
Plaintiff for the Class Action (hereinafter, “Settling Class Action Plaintiff”),
appointed Labaton Sucharow LLP and Brower Piven, a Professional Corporation
(“Brower Piven”) as Co-Lead Counsel (hereinafter, “Settling Class Action
Plaintiff’s Counsel”).

 

The Settling Class Action Plaintiff filed a Consolidated Class Action Complaint
(the “Class Action Complaint”) on August 4, 2009.  The Class Action Complaint
asserted claims against Spectranetics and various individual defendants
(collectively, the “Settling Class Action Defendants”) for alleged violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.  The
Class Action Complaint sought recovery for purchasers of Spectranetics common
stock during the period between March 16, 2007 and September 4, 2008,
inclusive.  On September 18, 2009, Spectranetics and the other defendants filed
a Motion to Dismiss the Class Action Complaint, which the Settling Class Action
Plaintiff opposed.

 

The Settling Class Action Plaintiff filed a Supplemental Class Action Complaint,
on February 10, 2010.  On March 12, 2010, Spectranetics and the other defendants
filed a Supplemental Motion to Dismiss the Supplemental Class Action Complaint,
which the Settling Class Action Plaintiff opposed.

 

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The settlement of the Class Action (as described below) has obviated the need
for any hearing or ruling on any Motion to Dismiss.

 

C.                                    The Derivative Actions.

 

On or after September 29, 2008, two derivative actions were filed in the Court
entitled Douglas A. Kopp v. Emile J. Geisenheimer, et al., Civil Case
No. 08-cv-02102-REB-MJW, and Peter Y. Kiama v. John Schulte, et al., Civil Case
No. 08-cv-02467-REB-CBS (the “District Court Derivative Actions”).  On
January 13, 2009, a derivative action was filed in the District Court, El Paso
County, Colorado, entitled Martin and Violet Clarke v. John Schulte, et al.,
Case No. 2009-CV-567.  On January 27, 2009, this derivative action was removed
to the District Court and entitled Martin and Violet Clarke v. John Schulte, et
al., Civil Case No. 09-cv-00161-PAB-MJW (the “Clarke Derivative Action”).  On
February 6, 2009, the District Court issued an order consolidating the Clarke
Derivative Action and the District Court Derivative Actions (collectively, the
“Derivative Actions”) under the caption Douglas A. Kopp v. Emile J.
Geisenheimer, et al., Civil Case No. 08-cv-02102-REB-MJW (the “Derivative
Action”).

 

D.                                    Settlement Negotiations And Mediation.

 

On March 24 and 25, 2010, the Settling Class Action Parties (as defined below),
through their respective counsel, participated in a two-day mediation session
with the Honorable Nicholas H. Politan (Ret.).  The mediation involved extensive
up-front briefing of Judge Politan regarding the merits of the Class Action, as
well as in-depth discussions with Judge Politan of, among other things, the
Settling Class Action Parties’ respective claims and defenses, the motions to
dismiss filed in the Class Action, and

 

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other important factual and legal issues and matters relating to the merits of
the Class Action.  The Settling Class Action Parties did not reach a settlement
at the mediation, but through subsequent negotiations and conferences, including
additional discussions with Judge Politan, the Settling Class Action Parties
were able to reach an agreement in principle providing for the settlement of the
Class Action.

 

E.                                      Discovery, Investigation, And Research
Conducted By Plaintiff.

 

Settling Class Action Plaintiffs’ Counsel  have conducted a thorough
investigation of the facts and legal issues associated with the prosecution and
Settlement of the Class Action.  This discovery and investigation has included,
inter alia, (1) a comprehensive review of the Company’s public filings, annual
reports, and other public statements; (2) research into the applicable law with
respect to the claims asserted in the Class Action and the potential defenses
thereto; (3) inspection of documents produced by the Settling Class Action
Defendants; (4) interviews with various current and former Spectranetics
employees; and (5) consultations with experts.

 

II.                                   CLAIMS OF THE SETTLING CLASS ACTION
PLAINTIFF AND BENEFITS OF SETTLEMENT.

 

The Settling Class Action Plaintiff believes that the claims asserted in the
Class Action have merit and that the evidence developed to date in the
Class Action supports the claims asserted.  The Settling Class Action Plaintiff
asserts and believes it would present supporting evidence at trial that
defendants caused the price of Spectranetics’ common stock to be artificially
inflated during the Settlement Class Period by the issuance of materially false
statements and by omitting to state material information

 

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concerning Spectranetics and that, as a result, Settling Class Action Plaintiff
and Settlement Class Members were injured.

 

However, Settling Class Action Plaintiff’s Counsel recognizes and acknowledges
the expense and length of continued proceedings, trial, and appeals.  Settling
Class Action Plaintiff’s Counsel also has taken into account the uncertain
outcome and the risk of any litigation, especially in complex actions such as
the Class Action.  Settling Class Action Plaintiff’s Counsel is also mindful of
the inherent problems of proof under and defenses to the federal securities law
violations asserted in the Class Action, including the defenses asserted by
defendants during the litigation, in the pending motion to dismiss the
pleadings, in the settlement negotiations, and in the mediation proceedings.

 

In light of the foregoing, Settling Class Action Plaintiff’s Counsel believes
that the Settlement confers substantial benefits upon the Settlement Class (as
defined below) and Settlement Class Members.  Based on its evaluation, Settling
Class Action Plaintiff’s Counsel has determined that the Settlement is in the
best interests of the Settling Class Action Plaintiff and the Settlement
Class Members.

 

III.                               SETTLING CLASS ACTION DEFENDANTS’ STATEMENT
AND DENIALS OF WRONGDOING AND LIABILITY.

 

The Settling Class Action Defendants have denied and continue to deny each and
all of the claims and contentions alleged by the Settling Class Action Plaintiff
on behalf of the Settlement Class Members.  The Settling Class Action Defendants
also have denied and continue to deny, inter alia, the allegations that the
prices of

 

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Spectranetics stock were artificially inflated by reasons of alleged
misrepresentations, non-disclosures or otherwise, or that the Settling
Class Action Plaintiff or the Settlement Class were harmed by the conduct
alleged in the Class Action.  Settling Class Action Defendants believe that
throughout the Settlement Class Period (as defined below) they fully and
adequately disclosed all material facts regarding Spectranetics and made no
misrepresentations of material facts regarding Spectranetics.

 

Nonetheless, the Settling Class Action Defendants have concluded that further
conduct of the Class Action would be protracted and expensive, and that it is
desirable that the Class Action be fully and finally settled in the manner and
upon the terms and conditions set forth in this Stipulation in order to limit
further expense, inconvenience and distraction, to dispose of the burden of
protracted litigation, and to permit the operation of the Company’s business
without further distraction and diversion of the Company’s executive personnel
with respect to matters at issue in the Class Action.  The Settling Class Action
Defendants also have taken into account the uncertainty and risks inherent in
any litigation, especially in complex cases like this litigation.

 

The Settling Class Action Defendants have, therefore, determined that it is
desirable and beneficial to them that the Class Action be settled in the manner
and upon the terms and conditions set forth in this Stipulation.  The Settling
Class Action Defendants enter into this Stipulation and the Settlement without
in any way admitting to or acknowledging any fault, liability, or wrongdoing of
any kind.  There has been no adverse determination by any court against any of
the Settling Class Action Defendants on the merits of the claims asserted by the
Settling Class Action Plaintiff.  Neither this

 

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Stipulation, nor any of its terms or provisions, nor any of the negotiations or
proceedings connected with it, shall be construed as an admission or concession
by any of the Settling Class Action Defendants of the merit or truth of any of
the allegations or wrongdoing of any kind on the part of any of the Settling
Class Action Defendants.  The Settling Class Action Defendants enter into this
Stipulation and Settlement based upon, among other things, the Settling
Class Action Plaintiffs’ agreement herein that, to the fullest extent permitted
by law, neither this Stipulation nor any of the terms or provisions, nor any of
the negotiations or proceedings connected therewith, shall be offered as
evidence in the Class Action or in any pending or future civil, criminal, or
administrative action or other proceeding to establish any liability or
admission by any of the Settling Class Action Defendants or any other matter
adverse to any of the Settling Class Action Defendants or any of their
respective related entities, except as expressly set forth herein.

 

IV.                              TERMS OF STIPULATION AND AGREEMENT OF
SETTLEMENT.

 

NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among the Settling
Class Action Plaintiff (for itself and the Settlement Class Members), and the
Settling Class Action Defendants, by and through their respective counsel of
record, that, subject to the approval of the Court, the Class Action and the
Released Claims by Settling Class Action Parties (as defined below) shall be
finally and fully compromised, settled, and released, and the Class Action shall
be dismissed with prejudice, upon and subject to the terms and conditions of the
Stipulation, as follows:

 

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A.                                    Definitions.

 

As used in the Stipulation, the following terms have the meanings specified
below:

 

1.1.                              “Authorized Claimant” shall mean any
Settlement Class Member whose claim for recovery has been allowed pursuant to
the terms of the Stipulation.

 

1.2.                              “Claimant” shall mean any Settlement
Class Member who filed a Proof of Claim in such form and manner, and within such
time, as the Court shall prescribe.

 

1.3.                              “Claims Administrator” shall mean Rust
Consulting, Inc.

 

1.4.                              “Class Action” shall mean the class actions
that were consolidated in the case before the United States District Court for
the District of Colorado entitled In re Spectranetics Corporation Securities
Litigation, Civil Case No. 08-cv-02048-REB-KLM.

 

1.5.                              “Company” or “Spectranetics” shall mean The
Spectranetics Corporation, a Delaware corporation, and all of its predecessors,
successors, present and former parents, subsidiaries, divisions, and related or
affiliated entities.

 

1.6.                              “Derivative Action” shall mean the derivative
actions that were consolidated in the case before the United States District
Court for the District of Colorado entitled Douglas A. Kopp v. Emile J.
Geisenheimer, et al., Civil Case No. 08-cv-02102-REB-MJW.

 

1.7.                              “Effective Date” shall mean the first date by
which all of the events and conditions specified in ¶ 10.2 of the Stipulation
have been met and have occurred.

 

1.8.                              “Escrow Account” shall mean the
interest-bearing escrow account to which the Settlement Consideration will be
transferred pursuant to the terms of the Stipulation.

 

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1.9.                              “Escrow Agents” shall mean Settling
Class Action Plaintiff’s Counsel.

 

1.10.                                    “Final” shall mean, with respect to the
Judgment, that one of the following events has occurred: (1) the time for
appealing the Judgment has expired; (2) following a final affirmance on appeal
of the Judgment, the time to seek further discretionary review (including,
without limitation, from the United States Supreme Court) has expired, or if
discretionary review is allowed, such discretionary review proceedings are
subsequently dismissed with prejudice or the Judgment is finally affirmed on
discretionary review; or (3) following a final dismissal of an appeal from the
Judgment, the time to seek further discretionary review (including, without
limitation, from the United States Supreme Court) has expired, or if
discretionary review is allowed, such discretionary review proceedings are
subsequently dismissed with prejudice or the dismissal being challenged is
itself finally affirmed on discretionary review.  Any proceeding or order, or
any appeal or petition for a writ of certiorari pertaining solely to any plan of
allocation and/or application for attorneys’ fees, costs or expenses, shall not
in any way delay or preclude the Judgment from becoming Final.

 

1.11.                                    “Individual Defendants” shall mean
Defendants Guy A. Childs, Emile J. Geisenheimer, Jonathan W. McGuire, John G.
Schulte, and Craig M. Walker, M.D., and any other individual named as a
defendant in the six lawsuits consolidated in the Class Action.

 

1.12.                                    “Judgment” shall mean the judgment to
be rendered by the Court dismissing the Class Action with prejudice,
substantially in the form and content attached hereto as Exhibit B.

 

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1.13.                                    “Notice” shall mean the notice of
pendency of class action and proposed settlement substantially in the form and
content attached hereto as Exhibit A-1.

 

1.14.                                    “Parties” shall mean, collectively,
each of the Settling Class Action Defendants and the Settling Class Action
Plaintiff on behalf of itself and the Settlement Class Members.

 

1.15.                                    “Person” shall mean an individual,
corporation (including all divisions and subsidiaries), partnership, limited
partnership, association, joint stock company, estate, legal representative,
trust, unincorporated association, government or any political subdivision or
agency thereof, and any business or legal entity and their spouses, heirs,
predecessors, successors, representatives, or assigns.

 

1.16.                                    “Plan of Allocation” shall mean a plan
or formula of allocation of the Settlement Consideration which shall be
described in the Notice to be sent to Settlement Class Members in connection
with the Settlement whereby the Settlement Consideration shall be distributed to
Authorized Claimants after payment of expenses of notice and administration of
the Settlement, any taxes, penalties or interest or tax preparation fees owed by
the Escrow Account  and such attorneys’ fees, costs, expenses and interest as
may be awarded by the Court.  Any Plan of Allocation is not part of the
Stipulation.

 

1.17.                                    “Proof of Claim and Release” shall mean
the proof of claim and release substantially in the form and content attached
hereto as Exhibit A-2.

 

1.18.                                    “Released Claims by Settling
Class Action Defendants” means any and all claims, causes of action,
proceedings, obligations, suits, debts, damages (including

 

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interest, attorneys’ fees, expert or consulting fees, and any other costs),
demands, agreements, promises, controversies or liabilities whatsoever whether
based on federal, state, local, statutory or common law or any other law,
rule or regulation, whether fixed or contingent, accrued or un-accrued,
liquidated or un-liquidated, at law or in equity, matured or un-matured, whether
class or individual in nature, direct or indirect, past, present or future which
they ever had, now have, claim to have or may in the future have or claim to
have, including both known claims and Unknown Claims, that have been or could
have been asserted in the Class Action by the Settling Class Action Defendants
against the Settling Class Action Plaintiff, the Settlement Class Members, or
the Settling Class Action Plaintiff’s Counsel, which arise out of or relate in
any way to the institution, prosecution, or settlement of the Class Action
(except for claims to enforce the Settlement).

 

1.19.                                    “Released Claims by Settling
Class Action Parties” shall mean the Released Claims By Settling Class Action
Plaintiff and the Released Claims by Settling Class Action Defendants.

 

1.20.                                    “Released Claims by Settling
Class Action Plaintiff” means any and all claims, causes of action, proceedings,
obligations, suits, debts, damages (including interest, attorneys’ fees, expert
or consulting fees, and any other costs), demands, agreements, promises,
controversies or liabilities whatsoever whether based on federal, state, local,
statutory or common law or any other law, rule or regulation, whether fixed or
contingent, accrued or un-accrued, liquidated or un-liquidated, at law or in
equity, matured or un-matured, whether class or individual in nature, direct or
indirect, past,

 

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present or future which they ever had, now have, claim to have or may in the
future have or claim to have, including both known claims and Unknown Claims,
(i) that have been asserted in the Class Action by the Settling Class Action
Plaintiff against any of the Released  Class Action Defendants, or (ii) that
could have been asserted in any forum by the Settling Class Action Plaintiff or
any Settlement Class Member against any of the Released  Class Action Defendants
which arise out of, are related to, or are based upon in any way, either
directly or indirectly, in part or in whole, any of the allegations,
transactions, facts, matters or occurrences, representations or omissions
involved, set forth, or referred to in the Class Action, the Consolidated
Class Action Complaint, the Supplemental Consolidated Class Action Complaint,
and the six federal securities class action complaints.  The Released Claims by
Settling Class Action Plaintiff does not include the claims asserted in the
Derivative Action.

 

1.21.                                    “Released Class Action Defendants”
shall mean each and every one of the following:  the Settling Class Action
Defendants and, whether or not identified in any complaint filed in the
Class Action, each and all of every Settling Class Action Defendant’s past and
present directors, officers and employees, controlling stockholders, partners,
members, affiliates, principals, agents, representatives, stockholders,
predecessors, successors, parents, subsidiaries, divisions, joint ventures,
attorneys, investment bankers, commercial bankers, underwriters, financial or
investment advisors, advisors, consultants, accountants, insurers, co-insurers
and reinsurers, assigns, spouses, heirs, assigns, executors, personal
representatives, marital communities, associates, related or affiliated
entities, general or limited partners

 

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or partnerships, limited liability companies, member firms, estates,
administrators, or any members of their immediate families, or any trusts for
which any of them are trustees, settlers or beneficiaries, or any persons or
other entities in which any Released Class Action Defendant has a controlling
interest or which is related to or affiliated with any Released Class Action
Defendant, and any other representatives of any of these Persons or other
entities, whether or not any such Released Class Action Defendants were named,
served with process or appeared in the Class Action.

 

1.22.                                    “Settling Class Action Defendants”
shall mean Defendants Spectranetics and the Individual Defendants.

 

1.23.                                    “Settling Class Action Defendants’
Counsel” shall mean Katten Muchin Rosenman LLP and Winston & Strawn LLP.

 

1.24.                                    “Settling Class Action Plaintiff” means
Lead Plaintiff, the Spectranetics Investor Group, comprised of Genesee County
Employee’s Retirement System, the Wayne County Employee’s Retirement System, and
Peter J. Tortora.

 

1.25.                                    “Settling Class Action Plaintiff’s
Counsel” shall mean Co-Lead Counsel for the Lead Plaintiff, Labaton Sucharow LLP
and Brower Piven.

 

1.26.                                    “Settlement Class” shall mean all
persons or entities that purchased or otherwise acquired the publicly traded
common stock of Spectranetics during the Settlement Class Period.  Excluded from
the Settlement Class shall be the Settling Class Action Defendants and their
corporate affiliates; any officers or directors of Spectranetics; or members of
their immediate families, and their heirs, successors and assigns.  Also
excluded from the Settlement Class upon the Effective Date shall be

 

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those Persons who validly and timely request exclusion from the Settlement
Class in accordance with the provisions of the Notice Order and the Notice given
pursuant thereto.

 

1.27.                                    “Settlement Class Members” or “Member
of the Settlement Class” shall mean a person who falls within the definition of
Settlement Class as set forth in ¶ 1.26 above.

 

1.28.                                    “Settlement Class Period” shall mean
the period from March 16, 2007 to September 4, 2008, inclusive.

 

1.29.                                    “Settlement Consideration” shall mean
the principal amount of $8.5 million in cash, for and on behalf of the
Settlement Class, less the costs, fees, and assessments provided for in the
Stipulation, plus interest earned or accrued thereon.

 

1.30.                                    “Settling Class Action Parties” shall
mean Settling Class Action Plaintiff, on behalf of itself and each of the
Settlement Class Members, and Settling Class Action Defendants.

 

1.31.                                    “Spectranetics’ Insurance Carriers”
shall mean U.S. Specialty Insurance Company, Hudson Insurance Company, and
Carolina Casualty Insurance Company.

 

1.32.                                    “Unknown Claims” shall mean any
Released Claims by Settling Class Action Plaintiff which the Settling
Class Action Plaintiff or any Settlement Class Member does not know or suspect
to exist in his, her or its favor at the time of the release of the Released
Class Action Defendants which, if known by him, her or it, might have affected
his, her or its settlement with and release of the Released Class Action
Defendants, or might have affected his, her or its decision not to object to, or
opt out of, this Settlement. 

 

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With respect to any and all Released Claims by Settling Class Action Plaintiff,
the Settling Class Action Parties stipulate and agree that, upon the Effective
Date, the Settling Class Action Plaintiff expressly waives and relinquishes, and
the Settlement Class Members shall be deemed to have, and by operation of the
Judgment shall have expressly waived and relinquished, to the fullest extent
permitted by law, the provisions, rights, and benefits of § 1542 of the
California Civil Code, which provides:

 

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.

 

The Settling Class Action Plaintiff expressly waives and the Settlement
Class Members shall be deemed to have waived, and upon the Effective Date and by
operation of the Judgment shall have waived any and all provisions, rights and
benefits conferred by any law of the United States or of any state or territory
of the United States, or principle of common law, which is similar, comparable
or equivalent to § 1542 of the California Civil Code.  The Settling Class Action
Plaintiff and the Settlement Class Members may hereafter discover facts in
addition to or different from those which he, she or it now knows or believes to
be true with respect to the subject matter of the Released Claims By Settling
Class Action Plaintiff, but each of them hereby stipulate and agree that the
Settling Class Action Plaintiff does settle and release, and each Settlement
Class Member shall be deemed to have, and upon the Effective Date and by
operation of the Judgment shall have, fully, finally, and forever settled and
released any and all Released Claims by Settling Class Action Plaintiff, known
or unknown, suspected or

 

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unsuspected, contingent or non-contingent, whether or not concealed or hidden,
which now exist, or heretofore have existed upon any theory of law or equity now
existing or coming into existence in the future, including, but not limited to,
all Released Claims by Settling Class Action Plaintiff without regard to the
subsequent discovery or existence of such different or additional facts.  The
Settling Class Action Parties acknowledge that the foregoing waiver was
bargained for and a key element of the Settlement of which this release is a
part.

 

B.                                    The Settlement Consideration.

 

In full and final settlement of all claims asserted or referred to in the
Class Action, and all claims that have been and could be asserted by Settling
Class Action Plaintiff and the Settlement Class Members against the Settling
Class Action Defendants in the Class Action, the Settling Class Action
Defendants agree to the following:

 

2.1.                              Spectranetics shall cause $8.5 million in cash
to be wire transferred and/or mailed overnight into an interest-bearing escrow
account (the “Escrow Account”) for the benefit of the Settling Class Members and
with all interest to accrue for the benefit of the Settlement Class Members
within twenty (20) business days from the later of (1) preliminary approval of
the Settlement of the Class Action as reflected by this Stipulation;
(2) Settling Class Action Defendants’ Counsel’s receipt of a W-9 from the payee
to whom the Settlement Consideration shall be paid; and (3) Settling
Class Action Defendants’ Counsel’s receipt of wire transfer information from the
payee to whom the Settlement Consideration shall be paid.

 

2.2.                              The reasonable and necessary costs of
administration, notice to Settlement

 

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Class Members, and taxes shall be paid out of the Settlement Consideration
without further order of the Court.  Settling Class Action Defendants’ Counsel
and Settling Class Action Plaintiff’s Counsel shall cooperate to ensure prompt
payment of expenditures from escrowed funds to provide notice to the Members of
the Settlement Class and/or to otherwise process the administration of the
Settlement.

 

2.3.                              In the event the Stipulation does not become
effective, or the Judgment does not become Final, as that term is defined in ¶
1.10 above, all monies held in the Escrow Account (less amounts necessary to pay
costs, as documented in ¶ 2.2 above) shall be returned to Spectranetics’
Insurance Carriers within fourteen (14) business days in a manner and in the
amounts designated by Spectranetics at such time.  Settling Class Action
Plaintiff, the Settlement Class Members, and Settling Class Action Plaintiff’s
Counsel shall have no responsibility for the costs described in ¶ 2.2 above.

 

2.4.                              Upon the Judgment becoming Final, the
Settlement Consideration shall be released for the benefit of the Settlement
Class Members pursuant to the terms of this Stipulation.  This Settlement is not
a “claims made” settlement, and, if all conditions under this Stipulation are
satisfied and the Judgment becomes Final, no portion of the Settlement
Consideration will be returned to the Settling Class Action Defendants or
Spectranetics’ Insurance Carriers.

 

C.                                    Administration Of The Settlement
Consideration.

 

i.                                         The Escrow Agents.

 

3.1.                              The Escrow Agents shall invest the Settlement
Consideration in instruments backed by the full faith and credit of the United
States Government or fully insured by

 

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the United States Government or an agency thereof and shall reinvest the
proceeds of these instruments as they mature in similar instruments at the
current market rates.

 

3.2.                              The Escrow Agents shall not disburse the
Settlement Consideration except as provided in the Stipulation, or by an order
of the Court, (provided said order is consistent with the terms of the
Stipulation) or with the written agreement of Settling Class Action Plaintiff’s
Counsel and Settling Class Action Defendants’ Counsel.

 

3.3.                              Subject to such further order and direction by
the Court as may be necessary, the Escrow Agents are authorized to execute such
transactions on behalf of the Settlement Class Members as are consistent with
the terms of the Stipulation.

 

3.4.                              All funds held by the Escrow Agents shall be
deemed and considered to be in custodia legis of the Court, and shall remain
subject to the jurisdiction of the Court, until such time as such funds shall be
distributed pursuant to the Stipulation and/or further order(s) of the Court
consistent with the terms of the Stipulation.

 

3.5.                              All costs and expenses associated with the
Settlement, including but not limited to any taxes, administrative costs, and
costs of providing notice of the proposed Settlement to the Settlement
Class Members, shall be paid from the Settlement Consideration in the Escrow
Account, and in no event shall any of the Settling Class Action Defendants,
Settling Class Action Plaintiff, Settlement Class Members, or their counsel bear
any responsibility for any such costs or expenses.

 

ii.                                     Taxes.

 

3.6.                              The Settling Class Action Parties and the
Escrow Agents agree to treat the Settlement Consideration as being at all times
a “qualified settlement fund” within the

 

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meaning of Treas. Reg. Section 1.468B-1.  In addition, the Escrow Agents and, as
required, Spectranetics and Spectranetics’ Insurance Carriers shall jointly and
timely make the “relation-back election” (as defined in Treas. Reg.
Section 1.468B-1) back to the earliest permitted date.  Such election shall be
made in compliance with the procedures and requirements contained in such
regulations.  It shall be the responsibility of the Escrow Agents to timely and
properly prepare, and deliver the necessary documentation for signature by all
necessary parties, and thereafter to cause the appropriate filing to occur.

 

3.7.                              For the purposes of Section 468B of the
Internal Revenue Code of 1986, and Treas. Reg. Section 1.468B, the
“administrator” shall be the Escrow Agents.  The Escrow Agents shall timely and
properly file all informational and other tax returns necessary or advisable
with respect to the Settlement Consideration (including, without limitation, the
returns described in Treas. Reg. Section 1.468B-2(1)).  Such returns (as well as
the election described in ¶ 3.6 shall be consistent with this ¶ 3.7 and in all
events shall reflect that all taxes (including any estimated taxes, interest or
penalties) on the income earned by the Settlement Consideration shall be paid
out of the Settlement Consideration as provided in ¶ 3.8 hereof.

 

3.8.                              All (i) taxes (including any estimated taxes,
interest or penalties) arising with respect to the income earned by the
Settlement Consideration (“Taxes”), and (ii) expenses and costs incurred in
connection with the operation and implementation of ¶ 3.6-3.8 (including,
without limitation, expenses of tax attorneys and/or accountants and mailing and
distribution costs and expenses relating to filing (or failing to file) the

 

21

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returns described in  ¶ 3.7) (“Tax Expenses”), shall be paid out of the
Settlement Consideration; in all events the Released Class Action Defendants
shall not have any liability or responsibility for the Taxes, the Tax Expenses,
or the filing of any tax returns or other documents with the Internal Revenue
Service or any other state or local taxing authority.  The Escrow Agents shall
indemnify and hold the Released Class Action Parties harmless for Taxes and Tax
Expenses (including, without limitation, Taxes payable by reason of any such
indemnification).  Further, Taxes and Tax Expenses shall be treated as, and
considered to be, a cost of administration of the Settlement and shall be timely
paid by the Escrow Agents out of the Settlement Consideration without prior
order from the Court, and the Escrow Agents shall be obligated (notwithstanding
anything herein to the contrary) to withhold from distribution to Authorized
Claimants any funds necessary to pay such amounts (as well as any amounts that
may be required to be withheld under Treas. Reg. Section 1.468B-2(1)(2)); the
Released Class Action Defendants are not responsible and shall have no liability
therefor, or for any reporting requirements that may relate thereto.  The
Settling Class Action Parties hereto agree to cooperate with the Escrow Agents,
each other, and their tax attorneys and accountants to the extent reasonably
necessary to carry out the provisions of ¶ 3.6-3.8.

 

D.                                    Certification of the Settlement Class.

 

4.1.                              For the sole purpose of implementation,
approval and consummation of the Settlement, the Settling Class Action Parties
stipulate and agree that the Court may enter an order certifying the Settlement
Class, and appointing the Settling Class Action Plaintiff as the representative
of the Settlement Class and Settling Class Action

 

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Plaintiff’s Counsel as counsel for the Settlement Class.

 

4.2.                              Certification of the Settlement Class and
appointment of Settling Class Action Plaintiff as representative of the
Settlement Class and Settling  Class Action Plaintiff’s Counsel as counsel for
the Settlement Class, as set forth herein, shall be binding only with respect to
the Settlement set forth in the Stipulation.  In the event that this Stipulation
is terminated or cancelled or that the Effective Date does not occur for any
reason, the stipulated certification of the Settlement Class shall be vacated
and the Class Action shall proceed as though the Settlement Class had never been
certified.  Except to effectuate the Settlement, neither the Settling Class
Action Parties nor their respective counsel shall cite, present as evidence or
legal precedent, rely upon, make reference to or otherwise make any use
whatsoever of this stipulated certification of the Settlement Class, in this
Class Action or in any other proceeding.

 

E.                                      Notice Order And Settlement Hearing.

 

5.1.                              Promptly after execution of the Stipulation,
but in no event later than ten (10) days after the Stipulation is signed (unless
such time is extended by the written agreement of Settling Class Action
Plaintiff’s Counsel and Settling Class Action Defendants’ Counsel), the Settling
Class Action Parties shall submit the Stipulation together with its Exhibits to
the Court and shall jointly apply for entry of an order (the “Notice Order”),
substantially in the form and content of Exhibit A hereto, requesting
certification of the Settlement Class, preliminary approval of the Settlement,
and approval for the mailing and publication of a Notice of Pendency and
Proposed Settlement of Class Action (substantially in the form and content of
Exhibit A-1 hereto),

 

23

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which shall include the general terms of the Settlement set forth in this
Stipulation, the proposed Plan of Allocation, the general relief intended to be
sought through the Fee and Expense Application (as defined in ¶ 9.1), and the
date of the Settlement Hearing (as defined below in ¶ 5.2).

 

5.2.                              The Settling Class Action Parties shall
request that, after notice is given, the Court hold a Hearing (the “Settlement
Hearing”) and finally approve this Settlement as set forth herein.  At or after
the Settlement Hearing, Settling Class Action Plaintiff’s Counsel also will
request that the Court approve the proposed Plan of Allocation and the Fee and
Expense Application.

 

F.                                      Entry of Judgment and Discharge of All
Contribution Claims.

 

6.1.                              The Settling Class Action Parties agree to the
entry of Judgment substantially in the form and content of Exhibit B.

 

6.2.                              The Judgment proposed to the Court shall
include a bar order stating the following:  In accordance with 15 U.S.C. §
78u-4(f)(7)(A), any and all claims for contribution, equitable indemnification,
or subrogation arising out of any the Released Claims by the Settling
Class Action Plaintiff are hereby permanently barred, extinguished, discharged,
satisfied, and unenforceable.  Accordingly, without limitation to any of the
above, any Person is hereby permanently enjoined from commencing, prosecuting,
or asserting against any of the Settling Class Action Defendants any such claim,
and each and every Settling Class Action Defendant is hereby permanently
enjoined from commencing, prosecuting, or asserting any such claim against any
Person.  For the avoidance of doubt, other than those claims arising out of the

 

24

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prosecution of the Class Action which are released herein, nothing contained
herein shall affect the direct claims for contribution, equitable
indemnification or subrogation between or among Spectranetics and the Individual
Defendants in connection with the investigation by the United States Attorney’s
Office for the District of Colorado, the United States Food & Drug
Administration, and the United States Immigration & Customs Enforcement, or any
direct claims between or among Spectranetics and the Individual Defendants
including, by way of example, claims under any applicable indemnity agreement or
undertaking agreement, or claims for  breach of fiduciary duty, wrongful
termination, breach of contract, tortious interference with contract, or
infliction of emotional distress.  Nothing in the Stipulation nor the fact that
the Stipulation has been executed shall be construed as an admission or
concession by any party regarding the proper interpretation of any applicable
indemnity agreement.

 

G.                                    Releases.

 

7.1.                              Upon the Effective Date, the Settling
Class Action Plaintiff shall release, relinquish and discharge, and each of the
Settlement Class Members shall be deemed to have, and by operation of the
Judgment shall have, fully, finally, and forever released, relinquished and
discharged each and all of the Released Class Action Defendants from the
Released Claims by Settling Class Action Plaintiff.  For the avoidance of doubt,
potential Settlement Class Members who validly and timely request exclusion from
the Settlement Class in accordance with the provisions of the Notice Order and
the Notice shall not be deemed to have released all of the Released Class Action
Defendants from the Released Claims by Settling Class Action Plaintiff.

 

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7.2.                              Upon the Effective Date, each of the Settling
Class Action Defendants shall be deemed to have, and by operation of the
Judgment shall have, fully, finally, and forever released, relinquished and
discharged the Settling Class Action Plaintiff, the Settlement Class Members
(other than those Settlement Class Members who validly and timely request
exclusion from this Settlement Class in accordance with the provisions of the
Notice Order and the Notice given pursuant thereto), and the Settling
Class Action Plaintiff’s Counsel from the Released Claims by Settling
Class Action Defendants.

 

7.3.                              Claims for violation of this Stipulation
(including any exhibits) are preserved and are neither intended to be nor are
barred by operation of any aspect of the MOU, this Stipulation or the
Settlement.

 

7.4.                              Except as otherwise expressly provided for in
this Stipulation, by Delaware law, or in any applicable indemnity agreement,
undertaking agreement, bylaw provision or certificate of incorporation
provision, the Settling Class Action Parties shall each bear their own
respective attorneys’ fees, expenses and costs incurred in connection with the
conduct and settlement of the Class Action, and the preparation, implementation
and performance of the terms of this Stipulation.

 

7.5.                              Only those Settlement Class Members filing a
valid and timely Proof of Claim and Release shall be entitled to participate in
the Settlement and receive any distributions from the Settlement Consideration. 
The Proof of Claim and Release to be executed by the Settlement Class Members
shall release all Released Claims by Settling Class Action Plaintiff against the
Released Class Action Defendants, and shall

 

26

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be substantially in the form and content of Exhibit A-2 hereto.  All Settlement
Class Members shall be bound by the releases set forth herein and therein
whether or not they submit a valid and timely Proof of Claim and Release.

 

H.                                    Administration And Calculation Of Claims,
Final Awards And Supervision And Distribution Of Settlement Consideration.

 

8.1.                              Settling Class Action Plaintiff’s Counsel, or
its authorized agents, acting on behalf of the Settlement Class shall formulate
a Plan of Allocation of the Settlement Consideration to the Settlement
Class Members, subject to the approval of the Court.  The Claims Administrator,
subject to the supervision, direction and approval of the Court, shall
administer and calculate the claims submitted by Settlement Class Members, and
shall oversee distribution of that portion of the Settlement Consideration that
is finally awarded by the Court to Authorized Claimants.  The Settling
Class Action Parties expressly agree that any change, modification, or
alteration to the Plan of Allocation by the Court shall not be grounds for
termination of the Settlement.

 

8.2.                              The Settlement Consideration shall be applied
as follows:

 

(a)                                  To pay all unpaid costs and expenses
reasonably and actually incurred in providing notice to the Settlement
Class Members including, locating Settlement Class Members, soliciting
Settlement Class Members claims, assisting with the filing of such claims,
administering and distributing the Settlement Consideration to the Settlement
Class Members, processing each Proof of Claim and Release, and paying escrow
fees and costs, if any;

 

(b)                                 To pay Taxes and Tax Expenses;

 

27

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(c)                                  To pay Settling Class Action Plaintiff’s
Counsel’s attorneys’ fees, expenses and costs, with interest thereon, if and to
the extent allowed by the Court;

 

(d)                                 To distribute, following the Effective Date,
the balance of the Settlement Consideration to Authorized Claimants as allowed
by the Court.

 

8.3.                              After the Effective Date and subject to such
further approval and further order(s) of the Court as may be required, the
Settlement Consideration shall be distributed to Authorized Claimants, subject
to and in accordance with the following:

 

(a)                                  Within ninety (90) days after the mailing
of the Notice or such other time as may be set by the Court, each Person
claiming to be an Authorized Claimant shall be required to submit to the Claims
Administrator a separate completed Proof of Claim and Release included with the
Notice and substantially in the form and content of Exhibit A-2 hereto, signed
under penalty of perjury and supported by such documents as specified in the
Proof of Claim and Release and as are reasonably available to the Authorized
Claimant.

 

(b)                                 Except as otherwise ordered by the Court,
all Settlement Class Members who fail to timely submit a valid Proof of Claim
and Release within such period, or such other period as may be ordered by the
Court, or who have not already done so, shall be forever barred from receiving
any payments of money pursuant to the Stipulation and the Settlement set forth
herein, but will in all other respects be subject to and bound by the provisions
of the Stipulation, the Settlement and releases contained herein, and the
Judgment.

 

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(c)                                  The Settlement Consideration shall be
distributed to the Authorized Claimants in accordance with and subject to the
Plan of Allocation to be described in the Notice mailed to Settlement
Class Members.  The proposed Plan of Allocation shall not be a part of the
Stipulation.

 

8.4.                              The Settling Class Action Defendants and
Settling Class Action Defendants’ Counsel shall have no responsibility for,
interest in, or liability whatsoever with respect to: (a) the investment or
distribution of the Settlement Consideration; (b) the Plan of Allocation or any
other act described in this ¶ 8 or any of its subparagraphs; (c) the
determination or administration of taxes; or (d) any losses incurred in
connection with (a), (b) or (c).  No Person shall have any claim of any kind
against the Released Class Action Defendants with respect to the matters set
forth in this ¶ 8 or any of its subparagraphs.

 

8.5.                              No Person shall have any claim against the
Settling Class Action Plaintiff or Settling Class Action Plaintiff’s Counsel, or
any Claims Administrator, or other agent designated by Settling Class Action
Plaintiff’s Counsel based on the distributions made substantially in accordance
with the Stipulation and the Settlement contained herein, the Plan of Allocation
or further orders of the Court.

 

8.6.                              It is understood and agreed by the Settling
Class Action Parties that any proposed Plan of Allocation of the Settlement
Consideration, including, without limitation, any adjustments to an Authorized
Claimant’s claim set forth therein, is not a material part of the Stipulation
and the Settling Class Action Parties request that it be considered by the Court
separately from the Court’s consideration of the fairness,

 

29

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reasonableness and adequacy of the Settlement set forth in the Stipulation, and
request that any order or proceedings relating to the Plan of Allocation shall
not operate to terminate or cancel the Stipulation or affect the finality of the
Court’s Judgment approving the Stipulation and the Settlement set forth herein,
including, but not limited to, the release, discharge, and relinquishment of the
Released Claims by Settling Class Action Plaintiff against the Released
Class Action Defendants, or any other orders entered pursuant to the
Stipulation.

 

I.                                         Settling Class Action Plaintiff’s
Counsel’s Attorneys’ Fees And Reimbursement Of Expenses.

 

9.1.                              The Settling Class Action Plaintiff or its
counsel may submit an application or applications for an order (the “Fee and
Expense Application”) for distributions to them from the Settlement
Consideration for: (i) an award of attorneys’ fees plus (ii) reimbursement of
all expenses and costs, including the fees of any experts or consultants,
incurred in connection with prosecuting the Class Action, and (iii) interest on
such attorneys’ fees, costs and expenses at the same rate and for the same
periods as earned by the Settlement Consideration (until paid), as may be
awarded by the Court.

 

9.2.                              Within five (5) business days after the Court
executes an order awarding attorneys’ fees, expenses and costs, including the
fees of experts and consultants, (the “Fee and Expense Award”), the Fee and
Expense Award shall be transferred to Settling Class Action Plaintiff’s Counsel
from the Settlement Consideration.  In the event that the Stipulation and the
Settlement set forth herein does not become Final for any reason, or

 

30

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the Judgment or the Order making the Fee and Expense Award is reversed or
modified on appeal, and in the event that the Fee and Expense Award has been
paid to any extent, then Settling Class Action Plaintiff’s Counsel shall within
five (5) business days from the event which precludes the Effective Date from
occurring or such reversal or modification, refund the fees, expenses, costs and
interest previously paid to it from the Settlement Consideration, including
accrued interest on any such amount at the average rate earned on the Settlement
Consideration from the time of withdrawal until the date of refund.  The
Settling Class Action Plaintiff’s Counsel, as a condition of receiving such fees
and expenses, on behalf of itself and each partner and/or shareholder of it,
agrees that the law firm and its partners and/or shareholders are subject to the
jurisdiction of the Court for the purpose of enforcing this ¶ 9.2 of the
Stipulation.  Without limitation, Settling Class Action Plaintiff’s Counsel’s
law firms and their respective partners and/or shareholders agree that the Court
may, upon application of Settling Class Action Defendants, on notice to Settling
Class Action Plaintiff’s Counsel, summarily issue orders, including, but not
limited to, judgments and attachment orders, and may make appropriate findings
of or sanctions for contempt, against Settling Class Action Plaintiff’s Counsel
should Settling Class Action Plaintiff’s Counsel fail to timely repay fees and
expenses pursuant to this ¶ 9.2 of the Stipulation.

 

9.3.                              The Released Class Action Defendants shall
have no responsibility for, and no liability whatsoever with respect to, any fee
and expense award to Settling Class Action Plaintiff’s Counsel, or to any other
Person who may assert some claim thereto.

 

9.4.                              The procedure for and the allowance or
disallowance by the Court of the Fee

 

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and Expense Application are not part of the Settlement set forth in the
Stipulation, and the Settling Class Action Parties request that they are to be
considered by the Court separately from the Court’s consideration of the
fairness, reasonableness and adequacy of the Settlement set forth in the
Stipulation.  The Settling Class Action Parties request that any order or
proceedings relating to the Fee and Expense Application, or any appeal from any
order relating thereto, shall not operate to terminate or cancel the
Stipulation, or affect or delay the finality of the Judgment approving the
Stipulation and the Settlement of the Class Action set forth herein.

 

9.5.                              At their sole discretion, Settling
Class Action Plaintiff’s Counsel shall be authorized by the Court to allocate
the attorney’s fees among all counsel representing Settling Class Action
Plaintiff and the Settlement Class Members for any work performed by such
counsel that was authorized by Settling Class Action Plaintiff’s Counsel and
contributed to the effective litigation of the Class Action.

 

J.                                      Conditions Of Settlement, Effect Of
Disapproval, Cancellation Or Termination.

 

10.1.                                    This Settlement shall be terminated in
the event that any of the following occurs: (1) any of the conditions set forth
in ¶ 10.2 below are not satisfied; (2) the Settling Class Action Defendants
exercise their right to terminate the Settlement pursuant to ¶ 10.3; (3) the
Settlement does not become Final for any reason; or (4) failure on the part of
any of the Settling Class Action Parties to abide, in any material respect, with
the terms of the Stipulation.

 

10.2.                                    Unless otherwise agreed by Settling
Class Action Plaintiff’s Counsel and

 

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Settling Class Action Defendants’ Counsel in writing, this Stipulation shall be
terminated in the event that any of the following conditions is not met:

 

(a)                                  The transfer into the Escrow Account of the
Settlement Consideration within twenty (20) business days from the later of
(1) preliminary approval of the Settlement of the Class Action consistent with
the terms of this Stipulation; (2) Settling Class Action Defendants’ Counsel’s
receipt of a W-9 from the payee to whom the Settlement Cash shall be paid; and
(3) Settling Class Action Defendants’ Counsel’s receipt of wire transfer
information from the payee to whom the Settlement Cash shall be paid.

 

(b)                                 The Court has entered the Notice Order and
certified the Settlement Class Members, as required by ¶ 4 and ¶ 5, above;

 

(c)                                  Preliminary and final approval of the
Settlement consistent with the terms of this Stipulation, independent of the
Court’s determination of any award of attorneys’ fees and expenses to the
Settling Class Action Plaintiff’s Counsel;

 

(d)                                 Entry of Judgment, substantially in the form
and content of Exhibit B, by the U.S. District Court for the District of
Colorado;

 

(e)                                  Judgment has become Final;

 

(f)                                    That the Settlement is not otherwise
terminated pursuant to the terms set forth in this Stipulation.

 

10.3.                                    If prior to the Settlement Hearing,
Persons who otherwise would be Settlement Class Members have filed with the
Court valid and timely requests for exclusion (“Requests for Exclusion”) from
the Settlement Class in accordance with the

 

33

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provisions of the Notice Order and the Notice given pursuant thereto, and such
Persons have purchased or otherwise acquired Spectranetics common stock in an
amount that equals or exceed the sum specified in a separate Supplemental
Agreement between Spectranetics and Settling Class Action Plaintiff (the
“Supplemental Agreement”), Spectranetics shall have the option to terminate this
Stipulation in accordance with the procedures set forth in the Supplemental
Agreement.  The Supplemental Agreement will not be filed with the Court unless
and until a dispute among the Settling Class Action Parties concerning its
interpretation or application arises, but the Settling Class Action Parties will
file a statement identifying the existence of the Supplemental Agreement
pursuant to Federal Rule of Civil Procedure 23(e)(1)(c)(2), and reference the
Supplemental Agreement in the Notice.  Copies of all Requests for Exclusion
received, together with copies of all written revocations of Requests for
Exclusion, shall be delivered to Settling Class Action Defendants’ Counsel
within two (2) days of receipt thereof.

 

10.4.                                    Unless otherwise ordered by the Court,
in the event the Stipulation shall terminate, or be canceled, or shall not
become effective for any reason, within ten (10) business days after written
notification of such event is sent by Settling Class Action Defendants’ Counsel
or Settling Class Action Plaintiff’s Counsel to the Escrow Agents: (1) the
Settlement Consideration (including accrued interest), less expenses and any
costs which have been disbursed from or are chargeable to the Settlement, and
less any Taxes and Tax Expenses paid or incurred pursuant to ¶ 3.8, shall be
refunded by the Escrow Agents to Spectranetics’ Insurance Carriers in a manner
and in the amounts

 

34

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designated by Spectranetics at such time.  In such event, any tax refund owing
to the Settlement Consideration shall also be refunded and paid to
Spectranetics’ Insurance Carriers.  At the request of Spectranetics or
Spectranetics’ Insurance Carriers, the Escrow Agents or their designee shall
apply for any such refund and pay the proceeds, less the cost of obtaining the
tax refund, to Spectranetics’ Insurance Carriers.

 

10.5.                                    In the event that the Stipulation is
not approved by the Court or the Settlement set forth in the Stipulation is
terminated or fails to become effective in accordance with its terms, this
Stipulation and all negotiations and proceedings relating hereto shall be
without prejudice to any or all Settling Class Action Parties who shall be
restored to their respective positions in the Class Action as of September 7,
2010.  In such event, the terms and provisions of the Stipulation, with the
exception of ¶¶ [1.1-1.32, 3.1, 3.2, 3.4, 3.5, 3.6, 3.8, 4.1, 4.2, 8.4, 8.5,
9.2, 9.3, 10.1-10.8, 11.3, 11.4, and 11.8] herein, shall have no further force
and effect with respect to the Settling Class Action Parties and shall not be
used in the Class Action or in any other proceeding for any purpose and any
Judgment or Order entered by the Court in accordance with the terms of the
Stipulation shall be treated as vacated, nunc pro tunc.

 

10.6.                                    In the event this Stipulation shall be
terminated as set forth in ¶ 10.1 above, the Settling Class Action Parties
shall, within two weeks of such cancellation, jointly request a status
conference with the Court to be held on the Court’s first available date.  At
such status conference, the Settling Class Action Parties shall ask the Court’s
assistance in scheduling continued proceedings in the Class Action as between
the Settling Class Action Parties.  Pending such status conference or the
expiration of sixty

 

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(60) days from the Settling Class Action Parties’ joint request for a status
conference, whichever occurs first, none of the Settling Class Action Parties
shall file or serve any further motions or discovery requests on any of the
other Settling Class Action Parties in connection with this Class Action nor
shall any response be due by any Settling Class Action Party to any outstanding
discovery or pleading by any other Settling Class Action Party.

 

10.7.                                    If a case is commenced in respect to
Spectranetics or any of Spectranetics’ Insurance Carriers under Title 11 of the
United States Code (Bankruptcy), or a trustee, receiver or conservator is
appointed under any similar law, and in the event of the entry of a final order
of a court of competent jurisdiction determining the transfer of the Settlement
Consideration, or any portion thereof, by or on behalf of Spectranetics or any
of Spectranetics’ Insurance Carriers to be a preference, voidable transfer,
fraudulent conveyance or similar transaction, then at Settling Class Action
Plaintiff’s option, this Settlement, and the releases given and Judgment entered
in favor of all Settling Class Action Defendants pursuant to this Stipulation,
shall be null and void.

 

10.8.                                    No order of the Court or modification
or reversal on appeal of any order of the Court concerning  (a) any Plan of
Allocation or (b) any amount of attorneys’ fees, costs, expenses and interest to
Settling Class Action Plaintiff’s Counsel shall constitute a condition to the
Effective Date or grounds for cancellation and termination of the Stipulation.

 

K.                                    Miscellaneous Provisions.

 

11.1.                                    The Settling Class Action Parties
(a) acknowledge that it is their intent to

 

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consummate the Settlement consistent with the terms of this Stipulation; and
(b) agree to cooperate to the extent necessary to effectuate and implement all
terms and conditions of the Settlement consistent with the terms of this
Stipulation and to exercise their best efforts to accomplish the foregoing terms
and conditions of the Settlement.

 

11.2.                                    The Settling Class Action Defendants
have denied, and continue to deny, any and all allegations contained in the
Class Action, and they are entering into the Settlement in order to eliminate
the burden, expense, and uncertainties of further litigation.  The Settlement
and the provisions contained in this Stipulation and the Memorandum of
Understanding entered into between Settling Class Action Plaintiff’s Counsel and
counsel for Spectranetics, Guy A. Childs, Emile J. Geisenheimer, Jonathan W.
McGuire, and Craig M. Walker, M.D. on June 17, 2010 shall not be deemed, or
offered or received in evidence as a presumption, a concession, or an admission
of any fault, liability, or wrongdoing by any party, and except as required to
enforce the Settlement, they shall not be offered or received in evidence or
otherwise used by any Person in these or any other actions or proceedings,
whether civil, criminal, or administrative.

 

11.3.                                    It is agreed that the Settling 
Class Action Parties were in compliance with their respective obligations
pursuant to Rule 11 of the Federal Rules of Civil Procedure and that the
Class Action was filed, and all actions taken in respect thereof were taken in
good faith.

 

11.4.                                    No press announcement, press release,
or other public statement concerning the Settlement may be made by any of the
Settling Class Action Parties

 

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without approval from the other Settling Class Action Parties, except as
required by law.

 

11.5.                                    All of the exhibits to the Stipulation
are material and integral parts hereof and are fully incorporated herein by this
reference.

 

11.6.                                    The Stipulation may be amended or
modified, as is necessary to effect the terms of the Settlement, only by a
written instrument signed by or on behalf of all Settling Class Action Parties
or their successors-in-interest.

 

11.7.                                    The Stipulation, the exhibits attached
hereto and the Supplemental Agreement constitute the entire agreement among the
Settling Class Action Parties hereto; in particular, it is understood and agreed
that there are no collateral or oral agreements between the Settling
Class Action Parties that are not expressed in this Stipulation, the exhibits or
the Supplemental Agreement.  The Settling Class Action Plaintiff, on behalf of
itself and the Settlement Class Members, and the Settling Class Action
Defendants expressly warrant that, in entering into this Stipulation, they
relied solely upon their own knowledge and investigation, and not upon any
promise, representation, warranty, or other statement by any party or any person
representing any party to this Stipulation, not expressly contained in this
Stipulation, its exhibits, or the Supplemental Agreement.  Except as otherwise
provided herein, each party shall bear its own costs.

 

11.8.                                    Settling Class Action Plaintiff’s
Counsel, on behalf of the Settlement Class Members, is expressly authorized by
the Settling Class Action Plaintiff to take all appropriate action required or
permitted to be taken by the Settlement Class Members pursuant to the
Stipulation to effectuate its terms and also are expressly authorized to

 

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enter into any modifications or amendments to the Stipulation on behalf of the
Settlement Class Members which they deem appropriate.

 

11.9.                                    Each counsel or other Person executing
the Stipulation or any of its Exhibits on behalf of any party hereto hereby
warrants that such person has the full authority to do so.  All orders and
agreements entered during the course of the Class Action relative to the
confidentiality of information shall survive this Stipulation.

 

11.10.                              The Stipulation may be executed by facsimile
and in one or more counterparts.  All executed counterparts and each of them
shall be deemed to be one and the same instrument.  Counsel for the Settling
Class Action Parties shall exchange among themselves original signed
counterparts and a complete set of original executed counterparts shall be filed
with the Court.

 

11.11.                              The Stipulation shall be binding upon, and
inure to the benefit of, the successors and assigns of the Settling Class Action
Parties.

 

11.12.                              The Court shall retain jurisdiction with
respect to implementation and enforcement of the terms of the Stipulation, and
all Settling Class Action Parties hereto and their counsel submit to the
jurisdiction of the Court for purposes of implementing and enforcing the
Settlement embodied in the Stipulation.

 

11.13.                              The Stipulation and the exhibits hereto
shall be considered to have been negotiated, executed and delivered, and to be
wholly performed, in the State of Colorado, and the rights and of the parties to
the Stipulation shall be construed and enforced in accordance with, and governed
by, the laws of the State of Colorado without giving effect to that state’s
choice of law principles.

 

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IN WITNESS WHEREOF, the parties hereto have caused the Stipulation to be
executed, by their duly authorized attorneys, as of September 7, 2010.

 

/s/ Mark S. Goldman

 

/s/ Richard H. Zelichov

Mark S. Goldman

 

Bruce G. Vanyo

LABATON SUCHAROW LLP

 

Richard H. Zelichov

140 Broadway

 

KATTEN MUCHIN ROSENMAN LLP

New York, NY 10005

 

2029 Century Park East, Suite 2600

Telephone: (212) 907-0700

 

Los Angeles, CA 90067-3012

Facsimile: (212) 818-0477

 

Telephone: (310) 788-4400

Email: mgoldman@labaton.com

 

Facsimile: (310) 788-4471

 

 

Email: richard.zelichov@kattenlaw.com

Lead Plaintiffs’ Co-Lead Counsel

 

 

 

 

Counsel for Defendants The Spectranetics Corporation, Guy A. Childs, Emile
Geisenheimer, Jonathan W. McGuire and Craig M. Walker, M.D.

 

 

 

/s/ Charles J. Piven

 

/s/ Stephen C. Schulte

Charles J. Piven

 

Stephen C. Schulte

BROWER PIVEN,

 

W. Gordon Dobie

A Professional Corporation

 

WINSTON AND STRAWN LLP

1925 Old Valley Road

 

35 W. Wacker Drive

Stevenson, MD 21153

 

Chicago, IL 60601

Telephone: (410) 332-0030

 

Telephone: 312-558-5890

Facsimile: (410) 685-1300

 

Facsimile: 312-558-5700

Email: piven@browerpiven.com

 

Email: sschulte@winston.com

 

 

 

Lead Plaintiffs’ Co-Lead Counsel

 

Counsel for Defendant John G. Schulte

 

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