EXHIBIT 10.14


 


SETTLEMENT AGREEMENT


 


This Settlement Agreement is made by and between Travanti Pharma Inc. (“Travanti”)
and Iomed, Inc. (“Iomed”) (together, the “Parties”) as of January 24, 2006:


 


RECITALS


 


A.            On
May 11, 2004, Travanti filed a Complaint against Iomed in the United States District
Court for the District of Minnesota, Civil File No. 04-2667 JRT/FLN (the “Action”),
alleging infringement of U.S. Patent No. 6,653,014 B2 (the “‘014 Patent”) by
Iomed’s Companion80 product. Iomed denied the allegations and asserted
Counterclaims and affirmative defenses.


 


B.            Travanti
is also the owner of certain other patent applications, which it expects to
issue shortly.


 


C.            In
order to avoid the expense and uncertainty of continued litigation and appeals,
the parties have agreed to settle all disputes between the parties.


 


D.            Accordingly,
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:


 


AGREEMENT


 


1.             Iomed
is hereby granted a fully paid-up, worldwide, transferable, nonexclusive
license (the “License”) to the ‘014 Patent, including any divisionals,
continuations, continuations-in-part, and foreign equivalents thereto, for the
purpose of making, using, and/or selling Iontophoretic Medical Devices in the
Orthopedic Therapy Market. “Iontophoretic Medical Devices,” as used herein,
means medical devices for the delivery of water soluble drugs, medicaments and
other pharmaceutical preparations; such definition excluding such devices sold
and/or packaged together by or on behalf of Iomed with a drug, medicament,
and/or


 

















 


pharmaceutical
preparation intended to be delivered to the body by the device for therapeutic
purposes. “Orthopedic Therapy Market,” as used herein, means non-physician
physical and occupational therapy and non-physician sports medicine care
providers for use in the treatment of orthopedic conditions. “Orthopedic
Therapy Market” shall also include orthopedic physician offices for the
administration of anti-inflammatory steroids for either use in pain management
and/or for the treatment of inflammation.


 


2.             Travanti
hereby grants Iomed a perpetual covenant not to sue Iomed, its distributors,
customers, agents or representatives for infringement of any patent with
respect to any Iontophoretic Medical Devices manufactured by or for Iomed and
sold into the Orthopedic Therapy Market.


 


3.             After
exhaustion of current inventories and validation under all Iomed internal
operating procedures, all products manufactured and sold pursuant to the
License shall be marked with the notation “Licensed under U.S. Patent No.
6,653,014 B2,” in a manner consistent with the manner by which Iomed marks
other products covered by its own patents.


 


4.             Iomed
shall pay to Travanti on or before January 31, 2006, the total sum of seven
hundred fifty thousand dollars ($750,000.00) by wire transfer to this account:


 


Bank Name:


Bank ABA (routing) Number:


Bank Acct Name:


Bank Acct #:


 


5.             Iomed
admits, and irrevocably waives the right to contest, that claims 1-4,9,10,
30,31, and 46-54 of the ‘014 Patent, which are the asserted claims in the
Action, are valid and enforceable for any current or future products sold by
Iomed. Any successor to Iomed’s interest under this Settlement Agreement shall
be bound to such admissions to the extent that any dispute arises over
Iontophoretic Medical Devices in the Orthopedic Therapy Market but shall not


 

















 


otherwise
be bound by this provision. Iomed further agrees that it will not directly or
indirectly aid, assign, or participate in any action involving any unaffiliated
third party contesting the validity or enforceability of the ‘014 Patent within
the Orthopedic Therapy Market for an Iontophoretic Medical Device.


 


6.             Iomed
admits that the Companion80 product infringes one or more claims of the ‘014
Patent.


 


7.             Iomed
shall not enter into any new distributor or sales representative agreements
that prohibit the selling or promoting of Travanti products. This provision
shall not, however, apply to existing agreements or renewals thereof. [Omitted
as confidential and filed separately with the Securities and Exchange
Commission.]


 


8.             Apart
from the obligations established by this Settlement Agreement, the parties hereby
release and discharge each other and their respective parent corporations,
subsidiaries, employees, agents, attorneys, servants, representatives,
officers, directors, successors and assigns of and from any and all
responsibilities, duties, obligations, claims, demands, debts, causes of
action, costs, losses, damages or liabilities of every nature and kind, known
or unknown, suspected or unsuspected, arising out of or relating to the Action.


 


9.             Within
seven (7) days of execution of this Settlement Agreement, the parties shall
execute a stipulation for dismissal of all proceedings in the Action, each side
to bear its own costs and attorney fees.


 


10.           This
Settlement Agreement, and any provisions hereof, shall not be disclosed to third
parties, except as required by law or in conjunction with an actual or
threatened action


 

















 


relating
to the ‘014 Patent. Travanti may also disclose the Settlement Agreement to
potential financial and business partners subject to restrictions of
confidentiality. Either party also may disclose that Travanti and Iomed have
settled the litigation between them pending in the District of Minnesota, and
that, as part of the settlement, Iomed has acquired rights to practice certain
Travanti patents and patents pending in a defined market. [Omitted as
confidential and filed separately with the Securities and Exchange
Commission.]. The parties shall not disclose, discuss or characterize this
Settlement Agreement or its terms, or the facts and events giving rise to it,
in any manner that criticizes or disparages the other party.


 


11.           Apart
from the representations in this Settlement Agreement, nothing contained in
this Settlement Agreement, and no actions taken by any party in accordance with
it, shall be deemed an admission by either party.


 


12.           This
Settlement Agreement constitutes the entire agreement between the parties and
supersedes any prior agreements, negotiations, or discussions relating to the
subject matter of the Settlement Agreement.


 


13.           This
Settlement Agreement shall be governed by the law of the State of Minnesota.


 


14.           Except
to the extent set forth above, including but not limited to the provisions set
forth in paragraph 5, all rights and obligations under this Settlement
Agreement shall flow to and be binding upon the respective parties’ successors,
assignees, partners, parents, subsidiaries,


 

















 


related
companies, affiliates, agents, servants, representatives, officers,
shareholders, directors, and employees.


 


15.           The
parties each acknowledge that, with the assistance of counsel, they have
participated in the drafting of this Settlement Agreement, and that any
ambiguities should not be construed for or against any party to this Settlement
Agreement on account of such drafting.


 


16.           If
any provision of this Settlement Agreement is held illegal, invalid, or
unenforceable, such holding shall not affect any other provision of this
Settlement Agreement.


 


17.           The
undersigned individuals hereby warrant and represent that they have full
authority to execute this Settlement Agreement on behalf of themselves and the
entity for which they have signed.


 


18.           This
Settlement Agreement may be executed in counterparts, each of which shall be
deemed to be an original and both of which taken together shall constitute one
Settlement Agreement.


 


 


	
  Dated: January 24, 2006

  	
  TRAVANTI PHARMA INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rob Cohen

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  President & CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: January 24, 2006

  	
  IOMED, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J. Lollini

  	
   

  
	
   

  	
   

  
	
   

  	
  Its:

  	
  President & CEO