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.


 

















 


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 


 


6

















 


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 


 


7

















 


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 


 


12

















 


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 


 


19

















 


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 


 


20

















 


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






 












 


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



 


22

















 


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

















 


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

















 


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.


 


25

















 


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

















 


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

















 


(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.


 


28

















 


(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

















 


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

















 


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 


 


31






 












 


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 


 


32

















 


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

















 


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

















 


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 


 


35

















 


(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 


 


36

















 


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 


 


37

















 


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 


 


38

















 


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.


 


39

















 


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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