Document:

Exhibit 10.2

Exhibit 10.2

SETTLEMENT AGREEMENT

I. PARTIES

This Settlement Agreement (“Agreement”) is entered into among the United States of America,
acting through the United States Department of Justice and the United States Attorney’s Office for
the District of Colorado, on behalf of the Office of Inspector General (“OIG-HHS”) of the
Department of Health and Human Services (“HHS”), (collectively the “United States”); and the
Spectranetics Corporation (“Spectranetics”) (hereafter referred to as “the Parties”), through their
authorized representatives.

II. PREAMBLE

As a preamble to this Agreement, the Parties agree to the following:

A. At all relevant times, Spectranetics, a Delaware corporation headquartered in Colorado
Springs, Colorado, distributed, marketed and sold the following medical devices in the United
States: the CVX-300 Medical Laser and the CliRpath Turbo Laser Catheter, the TURBO Elite Laser
Ablation Catheter, and the TURBO-Booster Laser Guide Catheter (collectively the “Subject Medical
Devices”).

B. In 2008, the United States Attorney for the District of Colorado and the United States
Department of Justice, Office of Consumer Litigation, along with the Federal Food and Drug
Administration (“FDA”), commenced an investigation of Spectranetics (the “Federal Criminal
Investigation”), and, on September 4, 2008 executed a search warrant at the company’s headquarters
in Colorado Springs, Colorado.

 

 

 

C. Spectranetics has entered into a non-prosecution agreement with the United States
Attorney for the District of Colorado, dated of even date herewith, to conclude the Federal
Criminal Investigation of Spectranetics.

D. The United States contends that Spectranetics engaged in the following conduct (hereinafter
referred to as the “Covered Conduct”). The United States contends that:

1. From January 1, 2003, through June 30, 2005, Spectranetics conducted a clinical
registry, known as CORAL, but failed to ensure that the registry complied with
Federal regulations relating to the protection of human subjects and to conduct all
aspects of the CORAL clinical registry according to the appropriate standards of
scientific integrity, including the requirement to obtain fully-informed consent of
all participants pursuant to 45 C.F.R. § 46.116.

2. Spectranetics failed to report to the FDA serious adverse events related to its
medical devices and experienced by participants in the CORAL clinical registry and a
follow-up clinical registry, known as CORAL REEF, as required under 21 U.S.C. § 360i
and 21 C.F.R. § 803, and failed to furnish all information and material required in
its post-approval annual report to the FDA as required by 21 U.S.C. § 360i and 21
C.F.R. §§ 814.82(a)(7) and 814.84(b)(2)(i);

3. In 2005, Spectranetics imported surgical guidewires manufactured by Future
Medical Designs, Ltd. in Japan into the United States contrary to law (18 U.S.C. §
545 and 21 USC. §§ 331(a)) and provided them to physicians for use in patients
despite the fact that such devices had never been approved by the FDA
and were not the subject of an Investigational Device Exemption or otherwise
approved by the FDA;

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4. In 2007, Spectranetics imported percutaneous transluminal angioplasty balloon
catheters manufactured by Bavarian Medizin Technologie GmbH in Germany into the
United States contrary to law (18 U.S.C. § 545 and 21 USC. §§ 331(a)) and provided
them to physicians for use in patients despite the fact that such devices had never
been approved by the FDA and were not the subject of an Investigational Device
Exemption or otherwise approved by the FDA; and,

5. From July 1, 2007, through September 4, 2008, Spectranetics promoted the Subject
Medical Devices for certain procedures involving infra-inguinal in-stent restenosis,
a use that has not been approved by the FDA, in violation of the Food Drug &
Cosmetic Act (21 U.S.C. §§ 331(a) and 352(f)).

E. The United States alleges that Spectranetics caused certain false and/or fraudulent claims
to be submitted to the Medicare program, Title XVIII of the Social Security Act, 42 U.S.C. §§
1395-1395iii, relating to the Covered Conduct.

F. The United States contends that it has certain civil claims against Spectranetics, as
specified in Section III, Paragraph 2, below, for engaging in the Covered Conduct.

G. The United States also contends that it has certain administrative claims against
Spectranetics as specified in Section III, Paragraph 3, below, for engaging in the Covered Conduct.

H. Except as otherwise expressly provided in the non-prosecution agreement referenced in
Paragraph C, Spectranetics denies the contentions of the United States. This Agreement is made in
compromise of disputed claims. This Agreement is neither an admission
of facts nor liability nor other expression reflecting upon the merits of the dispute by
Spectranetics nor a concession by the United States that its claims are not well founded.

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I. To avoid the delay, expense, inconvenience, and uncertainty of protracted litigation of
these claims, the Parties mutually desire to reach a full and final settlement pursuant to the
terms and conditions set forth below.

III. TERMS AND CONDITIONS

1. Spectranetics agrees to pay to the United States the sum of Four Million Nine Hundred
Thousand Dollars ($4,900,000.00) (the “Settlement Amount”). The Settlement Amount shall be paid by
electronic funds transfer pursuant to written instructions to be provided by the United States
Attorney’s Office for the District of Colorado. Spectranetics agrees to make this electronic funds
transfer no later than five (5) working days after the Effective Date of this Agreement.

2. Subject to the exceptions in Paragraph 5 below (concerning excluded claims), in
consideration of the obligations of Spectranetics in this Agreement, conditioned upon
Spectranetics’s full payment of the Settlement Amount, and subject to Paragraph 13 below
(concerning bankruptcy proceedings commenced within 91 days of the Effective Date of this Agreement
or any payment made under this Agreement), the United States (on behalf of itself, its officers,
agents, agencies, and departments) agrees to release Spectranetics from any civil or administrative
monetary claim the United States has or may have for the Covered Conduct under the False Claims
Act, 31 U.S.C. §§ 3729-3733; the Civil Monetary Penalties Law, 42 U.S.C. § 1320a-7a; the Program
Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-12; or the common law theories of payment by mistake,
unjust enrichment, and fraud. No individuals are released by this Agreement.

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3. In consideration of the obligations of Spectranetics set forth in this Agreement, and the
Corporate Integrity Agreement entered into between OIG-HHS and Spectranetics, conditioned on
Spectranetics’s payment in full of the Settlement Amount, and subject to Paragraph 13 below
(concerning bankruptcy proceedings commenced within 91 days of the Effective Date of this Agreement
or any payment under this Agreement), the OIG-HHS agrees to release and refrain from instituting,
directing, or maintaining any administrative action seeking exclusion from the Medicare, Medicaid,
and other Federal health care programs (as defined in 42 U.S.C: § 1320a-7b(f)) against
Spectranetics under 42 U.S.C. § 1320a-7a (Civil Monetary Penalties Law), or 42 U.S.C. §
1320a-7(b)(7) (permissive exclusion for fraud, kickbacks or other prohibited activities), for the
Covered Conduct, except as reserved in Paragraph 6 (concerning excluded claims), below, and as
reserved in this Paragraph. The OIG-HHS expressly reserves all rights to comply with any statutory
obligations to exclude Spectranetics from Medicare, Medicaid, or other Federal health care programs
under 42 U.S.C. § 1320a-7(a) (mandatory exclusion) based upon the Covered Conduct and/or the
Federal Criminal investigation. Nothing in this Paragraph precludes the OIG-HHS from taking action
against entities or persons, or for conduct and practices, for which claims have been reserved in
Paragraph 4, below.

4. Notwithstanding any term of this Agreement, specifically reserved and excluded from the
scope and terms of this Agreement as to any entity or person (including Spectranetics) are the
following claims of the United States:

(a) Any criminal, civil, or administrative liability arising under Title 26, U.S. Code
(Internal Revenue Code);

(b) Any criminal liability;

(c) Except as explicitly stated in this Agreement, any administrative liability, including
mandatory exclusion from Federal health care programs;

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(d) Any liability to the United States (or its agencies) for any conduct other than the
Covered Conduct;

(e) Any liability based upon such obligations as are created by this Agreement;

(f) Any liability for express or implied warranty claims or other claims for defective or
deficient products and services, including quality of goods and services;

(g) Any liability for personal injury or property damage or for other consequential damages
arising from the Covered Conduct;

(h) Any liability for failure to deliver items or services due; or

(i) Any liability of individuals, including officers and employees.

5. Spectranetics waives and shall not assert any defenses it may have to any criminal
prosecution or administrative action relating to the Covered Conduct based in whole or in part on a
contention that, under the Double Jeopardy Clause of the Fifth Amendment of the Constitution, or
the Excessive Fines Clause of the Eighth Amendment of the Constitution, this Agreement bars a
remedy sought in such criminal prosecution or administrative action. Nothing in this paragraph or
any other provision of this Agreement constitutes an agreement by the United States concerning the
characterization of the Settlement Amount for purposes of the Internal Revenue laws, Title 26 of
the United States Code.

6. Spectranetics fully and finally releases, waives and discharges the United States, its
agencies, employees, servants, and agents from any claims (including attorneys’ fees, costs, and
expenses of every kind and however denominated) that Spectranetics has asserted, could have
asserted, or may assert in the future against the United States, its agencies, employees,
servants, and agents, related to or arising from the Covered Conduct or the United States’
investigation of the Covered Conduct.

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7. Spectranetics agrees to the following:

(a) Unallowable Costs Defined. All costs (as defined in the Federal Acquisition
Regulation, 48 C.F.R § 31.205-47 and in Titles XVIII and XIX of the Social Security Act, 42 U.S.C.
§§ 1395-1395ggg and 1396-1396v, and the regulations and official program directives promulgated
thereunder) incurred by or on behalf of Spectranetics, its predecessors, parents, divisions,
subsidiaries, or affiliates, and its present or former officers, directors, employees, and agents
in connection with the following shall be “unallowable costs” on all Government contracts and under
Federal health care programs:

(1) the matters covered by this Agreement;

(2) the United States’ audit and civil and any criminal investigation of the matters covered
by this Agreement;

(3) Spectranetics’s investigation, defense, and any corrective actions undertaken in response
to the United States’ audit, civil, and any criminal investigation in connection with the matters
covered by this Agreement (including attorneys’ fees);

(4) the negotiation and performance of this Agreement;

(5) the payments Spectranetics makes to the United States pursuant to this Agreement; and

(6) the negotiation of and obligations undertaken pursuant to the CIA to:

	 	(i)	 	retain an independent review
organization to perform annual reviews as described in Section
III of the CIA; and

	 	(ii)	 	prepare and submit reports to the
OIG-HHS.

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However, nothing in this Paragraph 7.a.(6) affects the status of costs that are not allowable based
on any other authority applicable to Spectranetics. (All costs described or set forth in this
Paragraph are hereafter, “Unallowable Costs.”)

(b) Future Treatment of Unallowable Costs. These Unallowable Costs shall be separately
determined and accounted for by Spectranetics and Spectranetics shall not charge such Unallowable
Costs directly or indirectly to any contracts with the United States of any State Medicaid program,
or seek payment for such Unallowable Costs through any cost report, cost statement, information
statement, or payment request submitted by Spectranetics or any of its subsidiaries or affiliates
to any Federal health care program.

(c) Treatment of Unallowable Costs Previously Submitted for Payment. Spectranetics
further agrees that, within 90 days of the Effective Date of this Agreement, it shall identify to
applicable Medicare fiscal intermediaries, carriers, and/or contractors and other Federal health
care program fiscal intermediaries or fiscal agents, any Unallowable Costs (as defined in this
Paragraph) included in payments previously sought from the United States or any State Medicaid
program, including, but not limited to, payments sought in any cost reports, cost statements,
information reports, or payment requests already submitted by Spectranetics, or any of its
subsidiaries or affiliates, and shall request, and agree, that such cost reports, cost statements,
information reports, or payment requests, even if already settled, be adjusted to account for the
effect of the inclusion of the Unallowable Costs. Spectranetics agrees that the United States, at a
minimum, shall be entitled to recoup from Spectranetics any overpayment plus applicable
interest and penalties as a result of the inclusion of such Unallowable Costs on
previously-submitted cost reports, information reports, cost statements, or requests for payment.

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Any payments due after the adjustments have been made shall be paid to the United States
pursuant to the direction of the Department of Justice and/or of the affected agencies. The United
States reserves its rights to disagree with any calculations submitted by Spectranetics or any of
its subsidiaries or affiliates on the effect of inclusion of Unallowable Costs on Spectranetics’ or
any of its subsidiaries’ or affiliates’ cost reports, cost statements, or information reports.

(d) Nothing in this Agreement shall constitute a waiver of the rights of the United States to
examine or re-examine Spectranetics’s books and records to determine that no Unallowable Costs have
been claimed in accordance with the provisions of this Paragraph.

8. Spectranetics agrees to cooperate fully and truthfully with the United States’
investigation of individuals and entities not released in this Agreement. Upon reasonable notice,
Spectranetics shall encourage and agrees not to impair the cooperation of its directors, officers,
and employees and use reasonable efforts to make available and encourage the cooperation of its
former directors, officers, and employees for interviews and testimony, consistent with the rights
and privileges of such individuals.

9. This Agreement is intended to be for the benefit of the Parties only. The Parties do not
release any claims against any other person or entity, except to the extent provided for in
Paragraph 10 (Waiver for Beneficiaries paragraph), below.

10. Spectranetics agrees that it waives and shall not seek payment for any of the health care
billings covered by this Agreement from any health care beneficiaries or their parents,
sponsors, legally responsible individuals, or third party payors based upon the claims defined
as Covered Conduct.

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11. Spectranetics warrants that it has reviewed its financial situation and that it is
currently solvent within the meaning of 11 U.S.C. §§ 547(b)(3) and 548(a)(1)(B)(ii)(1), and shall
remain solvent following its payment to the United States of the Settlement Amount. Further, the
Parties warrant that, in evaluating whether to execute this Agreement, they (a) have intended that
the mutual promises, covenants, and obligations set forth constitute a contemporaneous exchange for
the new value given to Spectranetics, within the meaning of 11 U.S.C. § 547(c)(1); and (b) conclude
that these mutual promises, covenants, and obligations do, in fact, constitute such a
contemporaneous exchange. Further, the Parties warrant that the mutual promises, covenants, and
obligations set forth herein are intended to and do, in fact, represent a reasonably equivalent
exchange of value that is not intended to hinder, delay, or defraud any entity that Spectranetics
was or became indebted to on or after the date of this transfer, within the meaning of 11 U.S.C. §
548(a)(1).

12. If within 91 days of the Effective Date of this Agreement or of any payment made under
this Agreement, Spectranetics commences, or a third party commences, any case, proceeding, or other
action under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors (a)
seeking to have any order for relief of Spectranetics’s debts, or seeking to adjudicate
Spectranetics as bankrupt or insolvent; or (b) seeking appointment of a receiver, trustee,
custodian, or similar official for Spectranetics or for all or any substantial part of
Spectranetics’s assets, Spectranetics agrees as follows:

(a) Spectranetics’s obligations under this Agreement may not be avoided pursuant to 11 U.S.C.
§ 547 or 548, and Spectranetics shall not argue or otherwise take the
position in any such case, proceeding, or action that: (i) Spectranetics’s obligations under
this Agreement may be avoided under 11 U.S.C. § 547 or 548; (ii) Spectranetics was insolvent at the
time this Agreement was entered into, or became insolvent as a result of the payment made to the
United States; or (iii) the mutual promises, covenants, and obligations set forth in this Agreement
do not constitute a contemporaneous exchange for new value given to Spectranetics.

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(b) If Spectranetics’ obligations hereunder are avoided for any reason, including, but not
limited to, the exercise of a trustee’s avoidance powers under the Bankruptcy Code, the United
States, at its sole option, may rescind the releases in this Agreement, and bring any civil and/or
administrative claim, action, or proceeding against Spectranetics for the claims that would
otherwise be covered by the releases provided in this Agreement. Spectranetics agrees that (i) any
such claims, actions or proceedings brought by the United States (including any proceedings to
exclude Spectranetics from participation in Medicare, Medicaid, or other federal health care
programs) are not subject to an “automatic stay” pursuant to 11 U.S.C. Section 362(a) as a result
of the action, case or proceeding described in the last clause of this Paragraph, and that
Spectranetics shall not argue or otherwise contend that the United States’ claims, actions or
proceedings are subject to an automatic stay; (ii) that Spectranetics will not plead, argue or
otherwise raise any defenses under the theories of statute of limitations, laches, estoppel, or
similar theories, to any such civil or administrative claims, actions, or proceedings which are
brought by the United States within 30 calendar days of written notification to Spectranetics that
the releases herein have been rescinded pursuant to this Paragraph, except to the extent such
defenses were available before the Effective Date of this Agreement; and (iii) the United States
has a valid claim against Spectranetics in the amount of at least $4,900,000, plus applicable
multipliers and penalties, and the United States may pursue its claims in the case, action or
proceeding referenced in the first clause of this Paragraph, as well as in any other case,
action, or proceeding; and,

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(c) Spectranetics acknowledges that its agreements in this Paragraph are provided in exchange
for valuable consideration provided in this Agreement.

13. Each Party shall bear its own legal and other costs incurred in connection with this
matter, including the preparation and performance of this Agreement.

14. Spectranetics represents that this Agreement is freely and voluntarily entered into
without any degree of duress or compulsion whatsoever.

15. This Agreement is governed by the laws of the United States. The Parties agree that the
exclusive jurisdiction and venue for any dispute arising between and among the Parties under this
Agreement shall be the United States District Court for the District of Colorado, except that
disputes arising under the CIA shall be resolved exclusively through the dispute resolution
provisions set forth in the CIA.

16. This Agreement constitutes the complete agreement between the Parties. This Agreement may
not be amended except by written consent of the Parties.

17. The individuals signing this Agreement on behalf of Spectranetics represent and warrant
that they are authorized by Spectranetics to execute this Agreement. The United States signatories
represent that they are signing this Agreement in their official capacities and that they are
authorized to execute this Agreement.

18. This Agreement may be executed in counterparts, each of which constitutes an original and
all of which constitute one and the same Agreement.

19. This Agreement is binding on Spectranetics’s successors, transferees, heirs, and assigns.

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20. This Agreement is effective on the date of signature of the last signatory to the
Agreement (the “Effective Date”). Facsimiles of signatures shall constitute acceptable binding
signatures for purposes of this Agreement.

21. For purposes of construction, this Agreement shall be deemed to have been drafted by all
Parties to the Agreement and shall not, therefore, be construed against any Party for that reason
in any subsequent dispute.

	 	 	 	 	 
	UNITED STATES OF AMERICA

DAVID M. GAOUETTE

Acting United States Attorney

District of Colorado	 	 
	 
	 	 	 	 
	By:

	 	/s/ Edwin Winstead	 	Dated: 12-18-09
	 

	 	 	 	 
	 

	 	EDWIN WINSTEAD	 	 
	 

	 	Assistant U.S. Attorney	 	 
	 

	 	Civil Health Care Fraud Coordinator	 	 
	 

	 	United States Attorney’s Office	 	 
	 

	 	District of Colorado	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jamie Ann Yavelberg	 	Dated: 12-22-09
	 

	 	 	 	 
	 

	 	JAMIE ANN YAVELBERG	 	 
	 

	 	Assistant Director	 	 
	 

	 	Commercial Litigation Branch Civil Division	 	 
	 

	 	United States Department of Justice	 	 
	 
	 	 	 	 
	By:

	 	/s/ Gregory Demske	 	Dated: 12-22-09
	 

	 	 	 	 
	 

	 	GREGORY DEMSKE	 	 
	 

	 	Office of Counsel to the Inspector General	 	 
	 

	 	U.S. Department of Health and Human Services	 	 

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	THE SPECTRANETICS CORPORATION	 	 
	 
	 	 	 	 
	By:

	 	/s/ Emile Geisenheimer	 	Dated: 12-17-09
	 

	 	 	 	 
	 

	 	EMILE GEISENHEIMER	 	 
	 

	 	Chief Executive Officer	 	 
	 

	 	Spectranetics Corporation	 	 
	 
	 	 	 	 
	HOGAN & HARTSON LLP	 	 
	 
	 	 	 	 
	By:

	 	/s/ Michael Theis	 	Dated: 12-18-09
	 

	 	 	 	 
	 

	 	PETER S. SPIVACK	 	 
	 

	 	MICHAEL C. THEIS	 	 
	 

	 	Hogan & Hartson LLP	 	 
	 

	 	Counsel for the Spectranetics Corporation	 	 

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Page 14Exhibit 10.3

Exhibit 10.3

CORPORATE INTEGRITY AGREEMENT

 between the 

Office of Inspector General

 of the 

Department of Health and Human Services

and

Spectranetics Corporation

I. Preamble

The Spectranetics Corporation (Spectranetics) hereby enters into this Corporate Integrity
Agreement (CIA) with the Office of Inspector General (OIG) of the United States Department of
Health and Human Services (HHS) to promote compliance with the statutes, regulations, and written
directives of Medicare, Medicaid, and all other Federal health care programs (as defined in 42
U.S.C. § 1320a-7b(f)) (Federal health care program requirements) and with the statutes,
regulations, and written directives of the Food and Drug Administration (FDA requirements).
Contemporaneously with this CIA, Spectranetics is entering into a Settlement Agreement with the
United States.

Spectranetics represents that before the effective date of this CIA (as defined below) and
before commencement of the government’s investigation, Spectranetics initiated a voluntary
compliance program applicable to all Spectranetics employees. Spectranetics’s compliance program
(Compliance Program) includes a Chief Compliance Officer, who reports to the Board of Directors and
the Chief Executive Officer, a Board of Directors Compliance Committee, and a Management Compliance
Committee. The Compliance Program also includes a Code of Conduct for all employees, written
policies and procedures, educational and training initiatives, review and disciplinary procedures,
a disclosure program that allows for the confidential disclosure and investigation of potential
compliance violations and appropriate disciplinary procedures, an ineligible persons screening
program, and regular internal audit and review procedures, an arrangements database and a
Commercial Activities and Grants Committee to monitor Anti-kickback statute compliance.

Spectranetics shall continue its Compliance Program throughout the term of this CIA and shall
do so in accordance with the terms set forth below. Spectranetics may modify its Compliance
Program as appropriate, but, at a minimum, Spectranetics shall ensure that during the term of this
CIA it shall comply with the obligations enumerated herein.

 

 

 

II. Term and Scope of the CIA

A. The period of the compliance obligations assumed by Spectranetics under this CIA shall be
five years from the effective date of this CIA, unless otherwise specified. The effective date
shall be the date on which the final signatory of this CIA executes this CIA (Effective Date).
Each one-year period, beginning with the one-year period following the Effective Date, shall be
referred to as a “Reporting Period.”

B. Sections VII, IX, X, and XI shall expire no later than 120 days after OIG=s receipt
of: (1) Spectranetics’ final annual report; or (2) any additional materials submitted by
Spectranetics pursuant to OIG=s request, whichever is later.

C. The scope of this CIA shall be governed by the following definitions:

1. “Covered Persons” includes:

a. all owners of Spectranetics who are natural persons, (other than
shareholders who: (1) have an ownership interest of less than 5%; and (2)
acquired the ownership interest through public trading);

b. all officers and directors of Spectranetics; all U.S.-based employees of
Spectranetics; and all employees of Spectranetics who are based outside the
United States and have responsibilities relating to Promotional and Product
Services Related Functions (as defined below in Section II.C.2) in the U.S.,
Clinical Investigation Related Functions related to FDA requirements (as
defined below in Section II.C.3), or Reporting Related Functions (as defined
below in Section II.C.4);

c. all contractors, subcontractors, agents, and other persons who perform
Promotional and Product Services Related Functions (as defined below in
Section II.C.2) on behalf of Spectranetics;

d. all contractors, subcontractors, agents, and other persons who perform
Clinical Investigation Related Functions (as defined below in Section
II.C.3) on behalf of Spectranetics and

e. all contractors, subcontractors, agents, and other persons who perform
Reporting Related Functions (as defined below in Section II.C.4) on behalf
of Spectranetics.

Spectranetics Corporate Integrity Agreement

 

2

 

Notwithstanding the above, this term does not include part-time or per diem
employees, contractors, subcontractors, agents, and other persons who are not
reasonably expected to work more than 160 hours per year, except that any such
individuals shall become “Covered Persons” at the point when they work more than 160
hours during the calendar year.

2. “Promotional and Product Services Related Functions” includes: (a) the selling,
detailing, marketing, advertising, and promotion of Spectranetics products; and (b)
the preparation and dissemination of materials or information about, or the
provision of services relating to, devices that are distributed within the United
States.

3. “Clinical Investigation Related Functions” includes organizing, coordinating,
administering, providing training for, monitoring, and FDA reporting related to
clinical investigations and patient registries as well as all relevant obligations
under FDA’s Investigational Device Exemption regulations, 21 C.F.R. Part 812.

4. “Reporting Related Functions” includes identifying, tracking, and gathering
information and preparing and submitting reports to the FDA for Spectranetics
devices. This includes reporting of adverse events (including reports required
under 21 U.S.C. § 360i and the Medical Device Reporting (MDR) regulation at 21
C.F.R. Part 803 and other reporting under FDA requirements, (including those
required under 21 C.F.R. § 814.84).

5. “Relevant Promotional and Product Services Covered Persons” includes all Covered
Persons whose job responsibilities relate to Promotional and Product Services
Related Functions.

6. “Relevant Clinical Investigation Covered Persons” includes all Covered Persons
whose job responsibilities relate to Clinical Investigation Related Functions.

7. “Relevant Reporting Covered Persons” includes all Covered Persons whose job
responsibilities relate to Reporting Related Functions.

Spectranetics Corporate Integrity Agreement

 

3

 

III. Corporate Integrity Obligations 

Spectranetics shall establish and maintain a Compliance Program that includes the following
elements:

A. Chief Compliance Officer and Committee.

1. Chief Compliance Officer. Prior to the Effective Date, Spectranetics appointed a Chief
Compliance Officer and Spectranetics shall maintain a Chief Compliance Officer for the term of the
CIA. The Chief Compliance Officer shall be responsible for developing and implementing policies,
procedures, and practices designed to ensure compliance with the requirements set forth in this
CIA, with Federal health care program requirements and with FDA requirements. The Chief Compliance
Officer shall be a member of senior management of Spectranetics, shall make periodic (at least
quarterly) reports regarding compliance matters directly to the Board of Directors of
Spectranetics, and shall be authorized to report on such matters to the Board of Directors at any
time. The Chief Compliance Officer shall not be or be subordinate to the General Counsel or Chief
Financial Officer. The Chief Compliance Officer shall be responsible for monitoring the day-to-day
compliance activities engaged in by Spectranetics as well as for any reporting obligations created
under this CIA. Any noncompliance job responsibilities of the Chief Compliance Officer shall be
limited and must not interfere with the Chief Compliance Officer’s ability to perform the duties
outlined in this CIA.

Spectranetics shall report to OIG, in writing, any changes in the identity or position
description of the Chief Compliance Officer, or any actions or changes that would affect the Chief
Compliance Officer’s ability to perform the duties necessary to meet the obligations in this CIA,
within 5 days after such a change.

2. Compliance Committee. Prior to the Effective Date, Spectranetics formed a
Board of Directors Compliance Committee (Board Compliance Committee), consisting of two
non-management members of the Board. Spectranetics also formed a Management Compliance Committee
(Compliance Committee), consisting of the Chief Compliance Officer and other members of senior
management, including the Chief Operating Officer; the Chief Financial Officer; the General
Counsel, the
Senior Vice President, Vascular Intervention and Lead Management; Vice President,
Clinical Affairs; and the Chief Compliance Officer. Spectranetics’s Compliance Committee shall continue to have
members of senior management necessary to meet the requirements of this CIA, (e.g. senior
executives of relevant departments, such as legal, regulatory affairs, clinical affairs, finance,
and vascular intervention and lead management). Spectranetics shall maintain a Compliance
Committee and Board Compliance Committee for the term of the CIA. The Chief Compliance Officer
shall chair the Compliance Committee and the Committee shall support the Chief Compliance Officer
in fulfilling his/her responsibilities (e.g., shall assist in the analysis of the
organization’s risk areas and shall oversee monitoring of internal and external audits and
investigations).

Spectranetics Corporate Integrity Agreement

 

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Spectranetics shall report to OIG, in writing, any changes in the composition of the
Compliance Committee, or any actions or changes that would affect the Compliance Committee’s
ability to perform the duties necessary to meet the obligations in this CIA, within 15 days after
such a change.

3. Board of Directors Compliance Obligations. Spectranetics’ Board of Directors shall be
responsible for the review and oversight of matters related to compliance with Federal health care
program requirements, FDA requirements, and the obligations of this CIA.

a. The Board shall meet at least quarterly to review and oversee Spectranetics’ Compliance
Program, including but not limited to receiving reports from the Chief Compliance Officer to
evaluate the effectiveness of Spectranetics’ Compliance Program, Chief Compliance Officer, and
Compliance Committee. The Board may also meet with the Board Compliance Committee and the
Compliance Committee to evaluate the effectiveness of Spectranetics’ Compliance Program, Chief
Compliance Officer, and Compliance Committee.

b. For each Reporting Period of the CIA, the Board shall, in reliance upon the aforementioned
reports and its reasonable further inquiry, adopt a resolution, signed by each individual member of
the Board, summarizing its review and oversight of Spectranetics’ compliance with Federal health
care program requirements, FDA requirements, and obligations of this CIA.

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	 	i.	 	Resolution: At a minimum, the
resolution shall address whether:

	 	(a)	 	The Board has made a reasonable
inquiry into the effectiveness of Spectranetics’ Compliance
Program for the Reporting Period; and
	 
	 	(b)	 	Based on its reasonable inquiry,
the Board concludes that Spectranetics is implementing an
effective Compliance Program.
	 
	 	(c)	 	If the Board is unable to reach a
conclusion that Spectranetics has implemented an effective
Compliance Program, the Board shall include in the resolution a
written explanation of the reason(s) why it has been unable to
reach such a conclusion and the steps that it is taking to
implement an effective compliance program.

	 	ii.	 	The Board resolution and any attachments shall
be submitted with Spectranetics’ Annual Report to the OIG.

B. Written Standards.

1. Code of Conduct. Within 120 days after the Effective Date, Spectranetics shall develop,
implement, and distribute a revised written Code of Conduct to all Covered Persons. Spectranetics
shall make the promotion of, and adherence to, the Code of Conduct an element in evaluating the
performance of all employees. The Code of Conduct shall, at a minimum, set forth:

a. Spectranetics’ commitment to full compliance with all FDA and Federal
health care program requirements;

b. Spectranetics’ requirement that all of its Covered Persons shall be
expected to comply with all FDA and all Federal health care program
requirements and with Spectranetics’ own Policies and Procedures as
implemented pursuant to Section III.B (including the requirements of this
CIA);

c. the requirement that all of Spectranetics’ Covered Persons shall be
expected to report to the Chief Compliance Officer, or other appropriate
individual designated by Spectranetics, suspected
violations of any FDA or Federal health care program requirements or of
Spectranetics’ own Policies and Procedures; and

d. the right of all individuals to use the Disclosure Program described in
Section III.E, and Spectranetics’ commitment to nonretaliation and to
maintain, as appropriate, confidentiality and anonymity with respect to such
disclosures.

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Within 120 days after the Effective Date, each Covered Person shall certify, in writing or
electronically, that he or she has received, read, understood, and shall abide by Spectranetics’
Code of Conduct. Spectranetics shall maintain documentation of such certification. New Covered
Persons shall receive the Code of Conduct and shall complete the required certification within 30
days after becoming a Covered Person or within 120 days after the Effective Date, whichever is
later. Spectranetics shall maintain documentation of the Code of Conduct certifications consistent
with section VIII of the CIA.

Spectranetics shall periodically review the Code of Conduct to determine if revisions are
appropriate and shall make any necessary revisions based on such review. Any revised Code of
Conduct shall be distributed within 30 days after any revisions are finalized. Each Covered Person
shall certify, in writing, that he or she has received, read, understood, and shall abide by the
revised Code of Conduct within 30 days after the distribution of the revised Code of Conduct.

2. Policies and Procedures. To the extent not already accomplished, within 120 days after
the Effective Date, Spectranetics shall implement written Policies and Procedures regarding the
operation of Spectranetics’ compliance program and its compliance with Federal health care program
and FDA requirements. At a minimum, the Policies and Procedures shall address:

a.
The subjects relating to the Code of Conduct
identified in Section III.B.1;

b. The appropriate manner in which to conduct
Promotional and Product Services Related Functions and Clinical
Investigation Related Functions in compliance with all applicable
Federal healthcare program requirements, including, but not limited to
the False Claims Act (codified at 31 U.S.C. § 3729-3733), and the Federal
anti-kickback statute (codified at 42 U.S.C. § 1320a-7b);

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c.
The appropriate manner in which to conduct
Promotional and Product Services Related Functions and Clinical
Investigation Related Functions in compliance with all applicable FDA
requirements, including the requirements applicable to investigational
devices under 21 C.F.R. §812.7;

d.
The materials and information that may be
distributed by Spectranetics sales representatives and account
executives about Spectranetics’ products and the manner in which
Spectranetics sales representatives and account executives respond to
requests for information about unapproved or uncleared uses (or “off
label” uses) of Spectranetics’ products;

e.
The materials and information that may be
distributed by Spectranetics’ Medical Services Department and the
mechanisms through, and manner in which, such medical personnel receive
and respond to requests for information about off-label uses of the
products; the form and content of the information disseminated by
Spectranetics in response to such requests; and the internal review
process for the information disseminated.

The Policies and Procedures shall include a requirement that
Spectranetics develop a database (Inquiry Database) to track all requests
for information about Spectranetics’ products that are submitted by
Spectranetics’ sales representatives and account executives or by
physicians or members of the public regarding off-label uses of
Spectranetics products. The Inquiry Database shall include the following
items of information for each inquiry received for information about
Spectranetics’ products: 1) date of inquiry; 2) form of inquiry (e.g.,
email, letter, fax, phone, etc.); 3) name of the requesting health care
professional (HCP) or health care institution (HCI) in accordance with
applicable privacy laws; 4) nature and topic of the request, including
the exact language of the inquiry; 5) the nature/form of the response
from Spectranetics to the HCP or HCI in response to the request; 6) the name of the Spectranetics representative or account executive
who called on or interacted with the HCP or HCI, if known;

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f.
The appropriate manner in which to conduct
Reporting Related Functions in compliance with all applicable FDA
requirements;

g.
The protection of human subjects, as required
by 45 C.F.R. Part 45 and 21 C.F.R. Parts 50 and 56, and financial
disclosure, as required by 21 C.F.R. Part 54;

h.
Systems, processes, policies and procedures for
ensuring that all devices Spectranetics introduces or causes to be
introduced into interstate commerce are the subject of: (1) an
FDA-approved pre-market approval application, under 21 U.S.C. §
360e(a)(2) and 21 C.F.R. Part 814; (2) a “510(k) clearance” by FDA for
marketing because it is found to be substantially equivalent to an
appropriate, legally marketed device, under 21 U.S.C. §§ 360c(a)(1) and
360(k) and 21 C.F.R. Part 807 — Subpart E; (3) an investigational
device exemption under 21 U.S.C. § 360j(g), for the use of a device on
humans on an experimental basis; or (4) an exemption for certain
devices as set forth in 21 U.S.C. § 360(l); and

i.
Disciplinary policies and procedures for
violations of Spectranetics’ Code of Conduct and Policies and
Procedures.

Within 120 days after the Effective Date, the relevant portions of the Policies and Procedures
shall be distributed to all individuals whose job functions relate to those Policies and
Procedures. Appropriate and knowledgeable staff shall be available to explain the Policies and
Procedures.

At least annually (and more frequently, if appropriate), Spectranetics shall assess and
update, as necessary, the Policies and Procedures. Within 30 days after the effective date of any
revisions, the relevant portions of any such revised Policies and Procedures shall be distributed
to all individuals whose job functions relate to those Policies and Procedures.

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C. Training and Education.

1. General Training. Within 120 days after the Effective Date, Spectranetics shall provide
at least two hours of General Training to each Covered Person.  This training, at a
minimum, shall explain Spectranetics’:

a. CIA requirements; and

b. Spectranetics’ Compliance Program (including the Code of Conduct and the
Policies and Procedures as they pertain to general compliance issues).

New Covered Persons shall receive the General Training described above within 30 days after
becoming a Covered Person or within 120 days after the Effective Date, whichever is later. After
receiving the initial General Training described above, each Covered Person shall receive at least
one hour of General Training in each subsequent Reporting Period.

2. Specific Promotional and Product Services Training. Within 120 days after the Effective
Date, each Relevant Promotional and Product Services Covered Person shall receive at least 4 hours
of Specific Promotional and Product Services Training in addition to the General Training required
above. This Specific Training shall include a discussion of:

a. all applicable Federal health care program and FDA requirements and all
Spectranetics’ Policies and Procedures relating to Promotional and Product
Services Related Functions;

b. the personal obligation of each individual involved in Promotional and
Product Services Related Functions to comply with all applicable Federal
health care program and FDA requirements and with Spectranetics Policies and
Procedures;

c. the legal sanctions for violations of the Federal health care program
and FDA requirements, the False Claims Act, and the Anti-kickback statute;

d. examples of proper and improper practices related to Promotional and
Product Services Related Functions; and

e. the possible consequences to both Spectranetics and Relevant Covered
Promotional and Product Services Persons of failure to comply with FDA and
Federal health care program requirements and with Spectranetics’ own
Policies and Procedures and the failure to report such noncompliance.

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New Relevant Promotional and Product Services Covered Persons shall receive this training
within 30 days after the beginning of their employment or becoming Relevant Promotional and Product
Services Covered Persons, or within 120 days after the Effective Date, whichever is later. A
Spectranetics employee who has completed the Specific Promotional and Product Services Training
shall review a new Relevant Promotional and Product Services Covered Person’s work, to the extent
that the work relates to Promotional and Product Services Functions, until such time as the new
Relevant Promotional and Product Services Covered Person completes his or her Specific Promotional
and Product Services Training.

After receiving the initial Specific Promotional and Product Services Training described in
this Section, each Relevant Promotional and Product Services Covered Person shall receive at least
three hours of Specific Promotional and Product Services Training in each subsequent Reporting
Period.

3. Specific Clinical Investigation and Reporting Training. Within 120 days after the
Effective Date, each Relevant Clinical Investigation Covered Person and Reporting Covered Person
shall receive at least 4 hours of Specific Clinical Investigation and Reporting Training in
addition to the General Training required above. This Specific Clinical Investigation and
Reporting Training shall include a discussion of:

a. all applicable Federal health care program and FDA requirements and all
Spectranetics’ Policies and Procedures relating to Clinical Investigation
Related Functions and Reporting Related Functions;

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b. the personal obligation of each individual involved in Clinical
Investigation Related Functions and Reporting Related Functions to comply
with all applicable Federal health care program and FDA requirements and
with Spectranetics’ Policies and Procedures, including the requirement to
submit complete and accurate information to the FDA;

c. the legal sanctions for violations of the Federal health care program
and FDA requirements;

d. examples of proper and improper practices related to Clinical
Investigation Related Functions and Reporting Related Functions, including
those that address the following issues:

(i) when a patient registry is, in
fact, a clinical investigation;

(ii) when FDA approval, FDA clearance, or an applicable
Investigational Device Exemption is necessary for interstate distribution of
a device; and

(iii) the receipt, investigation, and evaluation of events and the
record keeping requirements under 21 C.F.R. § 803.17(b); and

e. the possible consequences to both Spectranetics and Relevant Clinical
Investigation Covered Persons and Relevant Reporting Covered Persons of
failure to comply with FDA and Federal health care program requirements and
with Spectranetics’ own Policies and Procedures and the failure to report
such noncompliance.

New Relevant Clinical Investigation Covered Persons and New Relevant Reporting Covered Persons
shall receive this training within 30 days after the beginning of their employment or becoming
Relevant Clinical Investigation Covered Persons or Relevant Reporting Covered Persons, or within
120 days after the Effective Date, whichever is later. A Spectranetics who has completed the
Specific Clinical Investigation and Reporting Training shall review (a) a new Relevant Clinical
Investigation Covered Person’s work, to the extent that the work relates to Clinical Investigation
Related Functions, until such time as the new Relevant Clinical Investigation Covered Person
completes his or her Specific Training and (b) a new Relevant Reporting Covered Person’s work,
to the extent that the work relates to Reporting Related Functions, until such time as the new
Relevant Reporting Covered Person completes his or her Specific Training.

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After receiving the initial Specific Clinical Investigation and Reporting Training described
in this Section, each Relevant Clinical Investigation Covered Person and Relevant Reporting
Covered Person shall receive at least three hours of Specific Clinical Investigation and Reporting
Training in each subsequent Reporting Period.

4. Certification. Each individual who is required to attend training shall certify, in
writing, or in electronic form, if applicable, that he or she has received the required training.
The certification shall specify the type of training received and the date received. The Chief
Compliance Officer (or designee) shall retain the certifications, along with all course materials.
These shall be made available to OIG, upon request.

5. Qualifications of Trainer. Persons providing the training shall be knowledgeable about
the subject area, including applicable Federal health care program and FDA requirements.

6. Update of Training. Spectranetics shall review the training annually, and, where
appropriate, update the training to reflect changes in Federal health care program and FDA
requirements, any issues discovered during internal audits or the IRO Review, and any other
relevant information.

7. Computer-based Training. Spectranetics may provide the training required under this CIA
through appropriate computer-based training approaches. If Spectranetics chooses to provide
computer-based training, it shall make available appropriately qualified and knowledgeable staff or
trainers to answer questions or provide additional information to the individuals receiving such
training.

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D. Review Procedures.

1. General Description.

a. Engagement of Independent Review Organization. Within 120 days after the
Effective Date, Spectranetics shall engage an entity (or entities), such as
an accounting, auditing, or consulting firm
(hereinafter “Independent Review Organization” or “IRO”), to perform reviews
to assist Spectranetics in assessing and evaluating its Clinical
Investigation Related Functions, Reporting Related Functions, and certain of
its Promotional and Product Services Related Functions. The applicable
requirements relating to the IRO are outlined in Appendix A to this CIA,
which is incorporated by reference.

Each IRO engaged by Spectranetics shall have expertise in applicable Federal
health care program and FDA requirements as may be appropriate for the
Review for which the IRO is retained. Each IRO shall assess, along with
Spectranetics, whether it can perform the engagement in a professionally
independent and objective fashion, as appropriate to the nature of the
review, taking into account any other business relationships or other
engagements that may exist.

The IRO(s) shall conduct reviews that assess Spectranetics’ systems,
processes, policies, procedures, and practices relating to Clinical
Investigation Related Functions, Reporting Related Functions and Promotional
and Product Services Related Functions (collectively, “IRO Review”).

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b. Frequency and Brief Description of Reviews. As set forth more fully in
Appendix B, the IRO Review shall consist of two components – a Systems
Review and a Transaction Review.

i. Systems Review. The Systems Review shall assess Spectranetics’
systems, processes, policies, and procedures relating to Clinical
Investigation Related Functions, Reporting Related Functions, and
Promotional and Product Services Related Functions. If there are no
material changes in Spectranetics’ systems, processes, policies, and
procedures relating to Clinical Investigation Related Functions,
Reporting Related Functions, and Promotional and Product Services
Related Functions, the Systems Review shall be performed in the first
and fourth Reporting Periods. If Spectranetics materially changes
its systems, processes, policies, and procedures relating to Clinical
Investigation Related Functions, Reporting Related Functions, and
Promotional and Product Services Related Functions, the IRO shall
perform a Systems Review for the Reporting Period in which such
changes were made in addition to conducting the Systems Review for
the first and fourth Reporting Periods.

ii. Transactions Review. The Transactions Review shall be performed
annually and shall cover each of the five Reporting Periods. The
IRO(s) shall perform all components of each annual Transactions
Review.

c. Retention of Records. The IRO and Spectranetics shall retain and make
available to OIG, upon request, all work papers, supporting documentation,
correspondence, and draft reports (those exchanged between the IRO and
Spectranetics) related to the reviews.

2. IRO Review Reports. The IRO shall prepare a report (or reports) based upon each Review
performed (IRO Review Report). Information to be included in the IRO Review Report is described in
Appendix B.

3. Validation Review. In the event OIG has reason to believe that: (a) any IRO Review fails
to conform to the requirements of this CIA; or (b) the IRO’s findings or Review are inaccurate, OIG
may, at its sole discretion, conduct its own review to determine whether the applicable Review
complied with the requirements of the CIA and/or the findings or Review results are inaccurate
(Validation Review). Spectranetics shall pay for the reasonable cost of any such review performed
by OIG or any of its
designated agents. Any Validation Review of Reports submitted as part of Spectranetics’ final
Annual Report shall be initiated no later than one year after Spectranetics’ final submission (as
described in Section II) is received by OIG.

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Prior to initiating a Validation Review, OIG shall notify Spectranetics of its intent to do so
and provide a written explanation of why OIG believes such a review is necessary. To resolve any
concerns raised by OIG, Spectranetics may request a meeting with OIG to: (a) discuss the results
of any Review submissions or findings; (b) present any additional information to clarify the
results of the applicable Review or to correct the inaccuracy of the Review; and/or (c) propose
alternatives to the proposed Validation Review. Spectranetics agrees to provide any additional
information as may be requested by OIG under this Section III.D.3 in an expedited manner. OIG will
attempt in good faith to resolve any Review issues with Spectranetics prior to conducting a
Validation Review. However, the final determination as to whether or not to proceed with a
Validation Review shall be made at the sole discretion of OIG.

4. Independence and Objectivity Certification. The IRO shall include in its report(s) to
Spectranetics a certification or sworn affidavit that it has evaluated its professional
independence and objectivity, as appropriate to the nature of the engagement, with regard to the
applicable Review and that it has concluded that it is, in fact, independent and objective.

E. Disclosure Program.

To the extent not already accomplished, within 120 days after the Effective Date,
Spectranetics shall establish a Disclosure Program that includes a mechanism (e.g., a
toll-free compliance telephone line) to enable individuals to disclose, to the Chief Compliance
Officer or some other person who is not in the disclosing individual’s chain of command, any
identified issues or questions associated with Spectranetics’ policies, conduct, practices, or
procedures with respect to a Federal health care program or FDA requirements believed by the
individual to be a potential violation of criminal, civil, or administrative law. Spectranetics
shall appropriately publicize the existence of the disclosure mechanism (e.g., via periodic
“all-hands meetings,” newsletters and/or e-mails to employees or by posting the information in
prominent common areas).

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The Disclosure Program shall emphasize a nonretribution, nonretaliation policy, and shall
include a reporting mechanism for anonymous communications for which appropriate confidentiality
shall be maintained. Upon receipt of a disclosure, the Chief
Compliance Officer (or designee) shall gather all relevant information from the disclosing
individual. The Chief Compliance Officer (or designee) shall make a preliminary, good faith
inquiry into the allegations set forth in every disclosure to ensure that he or she has obtained
all of the information necessary to determine whether a further review should be conducted. For
any disclosure that is sufficiently specific so that it reasonably: (1) permits a
determination of the appropriateness of the alleged improper practice; and (2) provides an
opportunity for taking corrective action, Spectranetics shall conduct an internal review of the
allegations set forth in the disclosure and ensure that proper follow-up is conducted.

The Chief Compliance Officer (or designee) shall maintain a disclosure log, which shall
include a record and summary of each disclosure received (whether anonymous or not), the status of
the respective internal reviews, and any corrective action taken in response to the internal
reviews. The disclosure log shall be made available to OIG upon request.

F. Ineligible Persons.

1. Definitions. For purposes of this CIA:

a. an “Ineligible Person” shall include an individual or entity who:

i. is currently excluded, debarred, suspended, or otherwise
ineligible to participate in the Federal health care programs or in
Federal procurement or nonprocurement programs; or

ii. has been convicted of a criminal offense that falls within the
scope of 42 U.S.C. § 1320a-7(a), but has not yet been excluded,
debarred, suspended, or otherwise declared ineligible.

b. “Exclusion Lists” include:

i. the HHS/OIG List of Excluded Individuals/Entities (available
through the Internet at http://www.oig.hhs.gov); and

ii. the General Services Administration’s List of Parties Excluded
from Federal Programs (available through the Internet at
http://www.epls.gov).

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2. Screening Requirements. Spectranetics shall ensure that all prospective and current
Covered Persons are not Ineligible Persons, by implementing the following screening requirements.

a. Spectranetics shall screen all prospective and current Covered Persons
against the Exclusion Lists prior to engaging their services and, as part of
the hiring or contracting process, shall require such Covered Persons to
disclose whether they are Ineligible Persons.

b. Spectranetics shall screen all Covered Persons against the Exclusion
Lists within 120 days after the Effective Date and on an annual basis
thereafter.

c. Spectranetics shall implement a policy requiring all Covered Persons to
disclose immediately any debarment, exclusion, suspension, or other event
that makes that person an Ineligible Person.

Nothing in this Section affects the responsibility of (or liability for) Spectranetics to
refrain from billing Federal health care programs for items or services furnished, ordered, or
prescribed by an Ineligible Person. Spectranetics understands that items or services furnished by
excluded persons are not payable by Federal health care programs and that Spectranetics may be
liable for overpayments and/or criminal, civil, and administrative sanctions for employing or
contracting with an excluded person regardless of whether Spectranetics meets the requirements of
Section III.F.

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3. Removal Requirement. If Spectranetics has actual notice that a Covered Person has become
an Ineligible Person, Spectranetics shall remove such Covered Person from responsibility for, or
involvement with, Spectranetics’ business operations related to the Federal health care programs
and shall remove such Covered Person from any position for which the Covered Person’s compensation
or the items or services furnished, ordered, or prescribed by the Covered Person are paid in whole
or part, directly or indirectly, by Federal health care programs or otherwise with Federal funds at
least until such time as the Covered Person is reinstated into participation in the Federal health
care programs.

4. Pending Charges and Proposed Exclusions. If Spectranetics has actual notice that a
Covered Person is charged with a criminal offense that falls within the scope of 42 U.S.C. §§
1320a-7(a), 1320a-7(b)(1)-(3), or is proposed for exclusion during the Covered Person’s employment
or contract term, Spectranetics shall take all appropriate actions to ensure that the
responsibilities of that Covered Person have not and shall not adversely affect the accuracy of any
claims submitted to any Federal health care program.

G. Notification of Government Investigation or Legal Proceedings.

Within 30 days after discovery, Spectranetics shall notify OIG, in writing, of any ongoing
investigation or legal proceeding known to Spectranetics conducted or brought by a governmental
entity or its agents involving an allegation that Spectranetics has committed a crime or has
engaged in fraudulent activities.  This notification shall include a description of the
allegation, the identity of the investigating or prosecuting agency, and the status of such
investigation or legal proceeding. Spectranetics shall also provide written notice to OIG within
30 days after the resolution of the matter, and shall provide OIG with a description of the
findings and/or results of the investigation or proceedings, if any.

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H. Reporting.

1. Reportable Events.

a. Definition of Reportable Event. For purposes of this CIA, a “Reportable
Event” means anything that involves:

i. a matter that a reasonable person would consider a probable
violation of criminal, civil, or administrative laws applicable to
FDA requirements and/or applicable to any Federal health care program
for which penalties or exclusion may be authorized; or

ii. an adverse event that Spectranetics: (1) was required to report
as an MDR and (2) failed to report to the FDA under 21 U.S.C. § 360i
and 21 C.F.R. Part 803 within 30 days; or

iii. the filing of a bankruptcy petition by Spectranetics.

A Reportable Event may be the result of an isolated event or a series of
occurrences.

b. Reporting of Reportable Events. If Spectranetics determines (after a
reasonable opportunity to conduct an appropriate review or investigation of
the allegations) through any means that there is a Reportable Event,
Spectranetics shall notify OIG, in writing, within 30 days after making the
determination that the Reportable Event exists. The report to OIG shall
include the following information:

i. a complete description of the Reportable Event, including the
relevant facts, persons involved, and legal and Federal health care
program and/or FDA authorities implicated;

ii. a description of Spectranetics’ actions taken to correct the
Reportable Event;

iii. any further steps Spectranetics plans to take to address the
Reportable Event and prevent it from recurring;

iv. If the Reportable Event involves the filing of a bankruptcy
petition, the report to the OIG shall include documentation of the
filing and a description of any Federal health care program and/or
FDA authorities implicated.

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I. Notification of Communication with FDA.

Within 30 days after the date of any written report, correspondence, or communication between
Spectranetics and the FDA that materially discusses Spectranetics’ or a Covered Person’s actual or
potentially unlawful or improper promotion of Spectranetics’ products (including any improper
dissemination of information about off-label indications) or improper practices relating to
Clinical Investigation Related Functions, Spectranetics shall provide a copy of the report,
correspondence or communications to the OIG. Spectranetics shall also provide written notice to
the OIG within 30 days after the resolution of any matter disclosed in accordance with the
requirements set forth above, and it shall provide the OIG with a description of the findings
and/or results of the matter, if any.

IV. Changes to Business Units or Locations

A. Change or Closure of Unit or Location. In the event that, after the Effective
Date, Spectranetics changes locations or closes a business unit or location engaged in Promotional
or Product Services Related Functions, Reporting Related Functions, or Clinical Investigation
Related Functions, Spectranetics shall notify OIG of this fact as soon as possible, but no later
than within 30 days after the date of change or closure of the location.

B. Purchase or Establishment of New Unit or Location. In the event that, after the
Effective Date, Spectranetics purchases or establishes a new business unit or location engaged in
Promotional or Product Services Related Functions, Reporting Related Functions, or Clinical
Investigation Related Functions, Spectranetics shall notify OIG at least 30 days prior to such
purchase or the operation of the new business unit or location. This notification shall include
the address of the new business unit or location, phone number, fax number, Federal health care
provider number and/or supplier number (if applicable), and the name and address of the contractor
that issued each number (if applicable). Each new business unit or location and all Covered
Persons at each new business unit or location shall be subject to the applicable requirements of
this CIA.

C. Sale of Unit or Location. In the event that, after the Effective Date,
Spectranetics proposes to sell any or all of its business units or locations that are subject to
this CIA, Spectranetics shall notify OIG of the proposed sale at least 30 days prior to the sale of
such business unit or location. This notification shall include a description of
the business unit or location to be sold, a brief description of the terms of the sale, and
the name and contact information of the prospective purchaser. This CIA shall be binding on the
purchaser of such business unit or location, unless otherwise determined and agreed to in writing
by the OIG.

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V. Implementation and Annual Reports

A. Implementation Report. Within 150 days after the Effective Date, Spectranetics
shall submit a written report to OIG summarizing the status of its implementation of the
requirements of this CIA (Implementation Report). The Implementation Report shall, at a minimum,
include:

1. the name, address, phone number, and position description of the Chief Compliance Officer
required by Section III.A.1, and a summary of other noncompliance job responsibilities the Chief
Compliance Officer may have;

2. the names and positions of the members of the Compliance Committee required by Section
III.A.2;

3. the names of the members Spectranetics’ Board of Directors referenced in Section III.A.3;

4. a copy of Spectranetics’ Code of Conduct required by Section III.B.1;

5. a copy of all Policies and Procedures required by Section III.B.2;

6. the number of individuals required to complete the Code of Conduct certification required
by Section III.B.1, the percentage of individuals who have completed such certification, and an
explanation of any exceptions (the documentation supporting this information shall be available to
OIG, upon request);

7. the following information regarding each type of training required by Section III.C:

a. a description of such training, including a summary of the topics
covered, the length of sessions, and a schedule of training sessions; and

b. the number of individuals required to be trained, percentage of
individuals actually trained, and an explanation of any exceptions.

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A copy of all training materials and the documentation supporting this information shall be
available to OIG, upon request.

8. a description of the Disclosure Program required by Section III.E;

9. the following information regarding the IRO(s): (a) identity, address, and phone number;
(b) a copy of the engagement letter; and (c) a summary and description of any and all current and
prior engagements and agreements between Spectranetics and the IRO;

10. a certification from the IRO regarding its professional independence and objectivity with
respect to Spectranetics;

11. a description of the process by which Spectranetics fulfills the requirements of Section
III.F regarding Ineligible Persons;

12. the name, title, and responsibilities of any person who is determined to be an Ineligible
Person under Section III.F; the actions taken in response to the screening and removal obligations
set forth in Section III.F;

13. a list of all of Spectranetics’ locations (including locations and mailing addresses) at
which it performs Promotional and Product Services Related Functions, Reporting Related Functions,
and Clinical Investigation Related Functions; the corresponding name under which each location is
doing business; the corresponding phone numbers and fax numbers; each location’s Federal health
care provider number and/or supplier number(s) (if applicable); and the name and address of each
Federal health care program contractor to which Spectranetics currently submits claims (if
applicable);

14. a description of Spectranetics’ corporate structure, including identification of any
parent and sister companies, subsidiaries, and their respective lines of business; and

15. the certifications required by Section V.C.

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B. Annual Reports. Spectranetics shall submit to OIG annually a report with respect
to the status of, and findings regarding, Spectranetics’ compliance activities for each of the five
Reporting Periods (Annual Report).

Each Annual Report shall include, at a minimum:

1. any change in the identity, position description, or other noncompliance job
responsibilities of the Chief Compliance Officer and any change in the membership of the Compliance
Committee, or the membership of the Board of Directors described in Section III.A;

2. a copy of the Board’s resolution described in Section III.A.3.b;

3. a summary of any significant changes or amendments to the Policies and Procedures required
by Section III.B and the reasons for such changes (e.g., change in applicable
requirements);

4. the number of individuals required to complete the Code of Conduct certification required
by Section III.B.1, the percentage of individuals who have completed such certification, and an
explanation of any exceptions (the documentation supporting this information shall be available to
OIG, upon request);

5. the following information regarding each type of training required by Section III.C:

a. a description of such training, including a summary of the topics
covered, the length of sessions, and a schedule of training sessions; and

b. the number of individuals required to be trained, percentage of
individuals actually trained, and an explanation of any exceptions.

A copy of all training materials and the documentation supporting this information shall be
available to OIG, upon request.

6. a complete copy of all reports prepared pursuant to Section III.D, along with a copy of
the IRO’s engagement letter (if applicable);

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7. Spectranetics’ response and corrective action plan(s) related to any issues raised by the
reports prepared pursuant to Section III.D;

8. a summary and description of any and all current and prior engagements and agreements
between Spectranetics and the IRO, if different from what was submitted as part of the
Implementation Report;

9. a certification from the IRO regarding its professional independence and objectivity with
respect to Spectranetics;

10. a summary of Reportable Events (as defined in Section III.H) identified during the
Reporting Period and the status of any corrective and preventative action relating to all such
Reportable Events;

11. a summary of the disclosures in the disclosure log required by Section III.E that relate
to Federal health care programs;

12. any changes to the process by which Spectranetics fulfills the requirements of Section
III.F regarding Ineligible Persons;

13. the name, title, and responsibilities of any person who is determined to be an Ineligible
Person under Section III.F;

14. a summary describing any ongoing investigation or legal proceeding required to have been
reported pursuant to Section III.G. The summary shall include a description of the allegation, the
identity of the investigating or prosecuting agency, and the status of such investigation or legal
proceeding;

15. a summary describing any written communication with the FDA required to have been
reported pursuant to Section III.I. This summary shall include a description of the matter and the
status of the matter;

16. a description of all changes to the most recently provided list of Spectranetics’
locations (including addresses) as required by Section V.A.14; the corresponding name under which
each location is doing business; the corresponding phone numbers and fax numbers; each location’s
Federal health care program provider number(s) and/or supplier number(s); and the name and address
of each Federal health care program contractor to which Spectranetics currently submits claims; and

17. the certifications required by Section V.C.

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The first Annual Report shall be received by OIG no later than 60 days after the end of the
first Reporting Period. Subsequent Annual Reports shall be received by OIG no later than the
anniversary date of the due date of the first Annual Report.

C. Certifications. The Implementation Report and Annual Reports shall include a
certification by the Chief Compliance Officer that:

1. to the best of his or her knowledge, except as otherwise described in the applicable
report, Spectranetics is in compliance with Federal health care program and FDA requirements and
all of the requirements of this CIA;

2. he or she has reviewed the Report and has made reasonable inquiry regarding its content
and believes that the information in the Report is accurate and truthful; and

3. to the best of his or her knowledge, Spectranetics has complied with its obligations under
the Settlement Agreement: (a) not to resubmit to any Federal health care program payors any
previously denied claims related to the Covered Conduct addressed in the Settlement Agreement, and
not to appeal any such denials of claims; (b) not to charge to or otherwise seek payment from
federal or state payors for unallowable costs (as defined in the Settlement Agreement); and (c) to
identify and adjust any past charges or claims for unallowable costs; and

4. Spectranetics’: 1) Policies and Procedures as referenced in Section III.B.2 above; 2)
templates for standardized contracts and other similar documents related to Promotional and Product
Services Related Functions and Clinical Investigation Related Functions; and 3) training materials
used for purposes of Section III.C all have been reviewed by competent legal counsel and/or legal
personnel working at Spectranetics and have been found to be in compliance with all applicable
Federal health care program and FDA requirements. In addition, Spectranetics’ promotional material
containing claims or information about Spectranetics products and other materials and information
to be distributed outside of Spectranetics have been reviewed by competent regulatory, medical,
and/or legal personnel to ensure that legal, medical, and regulatory concerns are properly
addressed and are elevated when appropriate and to ensure that the materials and information when
finally approved are in compliance with all applicable Federal health
care program and FDA requirements. If the applicable legal requirements have not changed,
after the initial review of the documents listed above, only material changes to the documents must
be reviewed by competent regulatory, medical, and/or legal personnel. The certification shall
include a description of the documents reviewed and approximately when the review was completed.
The documentation supporting this certification shall be available to the OIG upon request.

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D. Designation of Information. Spectranetics shall clearly identify any portions of
its submissions that it believes are trade secrets, or information that is commercial or financial
and privileged or confidential, and therefore potentially exempt from disclosure under the Freedom
of Information Act (FOIA), 5 U.S.C. § 552. Spectranetics shall refrain from identifying any
information as exempt from disclosure if that information does not meet the criteria for exemption
from disclosure under FOIA.

VI. Notifications and Submission of Reports

Unless otherwise stated in writing after the Effective Date, all notifications and reports
required under this CIA shall be submitted to the following entities:

OIG:

Administrative and Civil Remedies Branch

Office of Counsel to the Inspector General

Office of Inspector General

U.S. Department of Health and Human Services

Cohen Building, Room 5527

330 Independence Avenue, S.W.

Washington, DC 20201

Telephone: 202.619.2078

Facsimile: 202.205.0604

Spectranetics:

Michael K. Handley

Chief Compliance Officer

Vice President, Global Regulatory Affairs

Spectranetics Corporation

9965 Federal Drive

Colorado Springs, CO 80921

Email: michael.handley@spnc.com

Phone: 719.447.2318

Fax: 719.447.2070

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Unless otherwise specified, all notifications and reports required by this CIA may be made by
certified mail, overnight mail, hand delivery, or other means, provided that there is proof that
such notification was received. For purposes of this requirement, internal facsimile confirmation
sheets do not constitute proof of receipt. Upon request by OIG, Spectranetics may be required to
provide OIG with an electronic copy of each notification or report required by this CIA in
searchable portable document format (pdf), either instead of or in addition to, a paper copy.

VII. OIG Inspection, Audit, and Review Rights

In addition to any other rights OIG may have by statute, regulation, or contract, OIG or its
duly authorized representative(s) may examine or request copies of Spectranetics’ books, records,
and other documents and supporting materials and/or conduct on-site reviews of any of
Spectranetics’ locations for the purpose of verifying and evaluating: (a) Spectranetics’
compliance with the terms of this CIA; and (b) Spectranetics’ compliance with the requirements of
the Federal health care programs in which it participates and with all applicable FDA requirements.
The documentation described above shall be made available by Spectranetics to OIG or its duly
authorized representative(s) at all reasonable times for inspection, audit, or reproduction.
Furthermore, for purposes of this provision, OIG or its duly authorized representative(s) may
interview any of Spectranetics’ employees, contractors, or agents who consent to be interviewed at
the individual’s place of business during normal business hours or at such other place and time as
may be mutually agreed upon between the individual and OIG.
Spectranetics shall assist OIG or its duly authorized representative(s) in contacting and arranging
interviews with such individuals upon OIG’s request. Spectranetics’ employees may elect to be
interviewed with or without a representative of Spectranetics present.

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VIII. Document and Record Retention

Spectranetics shall maintain for inspection all documents and records relating to
reimbursement from the Federal health care programs, or to compliance with this CIA, for six years
(or longer if otherwise required by law) from the Effective Date.

IX.  Disclosures

Consistent with HHS’s FOIA procedures, set forth in 45 C.F.R. Part 5, OIG shall make a
reasonable effort to notify Spectranetics prior to any release by OIG of information submitted by
Spectranetics pursuant to its obligations under this CIA and identified upon submission by
Spectranetics as trade secrets, or information that is commercial or financial and privileged or
confidential, under the FOIA rules. With respect to such releases, Spectranetics shall have the
rights set forth at 45 C.F.R. §
 5.65(d).

X. Breach and Default Provisions 

Spectranetics is expected to fully and timely comply with all of its CIA obligations.

A. Stipulated Penalties for Failure to Comply with Certain Obligations. As a
contractual remedy, Spectranetics and OIG hereby agree that failure to comply with certain
obligations as set forth in this CIA may lead to the imposition of the following monetary penalties
(hereinafter referred to as “Stipulated Penalties”) in accordance with the following provisions.

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1. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the
obligation became due) for each day Spectranetics fails to establish and implement any of the
following obligations as described in Section III:

a. a Chief Compliance Officer;

b. a Compliance Committee;

c. a resolution from the Board of Directors;

d. a written Code of Conduct;

e. written Policies and Procedures;

f. the training of Covered Persons and Relevant Covered Persons;

g. a Disclosure Program;

h. Ineligible Persons screening and removal requirements;

i. notification of Government investigations or legal proceedings;

j. notification of written communications with FDA as required by Section
III.I; and

k. reporting of Reportable Events.

2. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the
obligation became due) for each day Spectranetics fails to engage an IRO, as required in Section
III.D and Appendix A.

3. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the
obligation became due) for each day Spectranetics fails to submit the Implementation Report or any
Annual Reports to OIG in accordance with the requirements of Section V by the deadlines for
submission.

4. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the
obligation became due) for each day Spectranetics fails to submit the IRO Review Reports in
accordance with the requirements of Section III.D and Appendix B.

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5. A Stipulated Penalty of $2,000 (which shall begin to accrue on the date the failure to
comply began) for each day Spectranetics employs or contracts with an Ineligible Person and that
person: (i) has responsibility for, or involvement with, Spectranetics’ business operations
related to the Federal health care programs; or (ii) is in
a position for which the person=s salary or the items or services rendered, ordered, or
prescribed by the person are paid in whole or part, directly or indirectly, by Federal health care
programs or otherwise with Federal funds (the Stipulated Penalty described in this paragraph shall
not be demanded for any time period during which Spectranetics can demonstrate that it did not
discover the person=s exclusion or other ineligibility after making a reasonable inquiry (as
described in section III.F) as to the status of the person).

6. A Stipulated Penalty of $1,500 for each day Spectranetics fails to grant access as
required in Section VII. (This Stipulated Penalty shall begin to accrue on the date Spectranetics
fails to grant access.)

7. A Stipulated Penalty of $5,000 for each false certification submitted by or on behalf of
Spectranetics as part of its Implementation Report, Annual Report, additional documentation to a
report (as requested by the OIG), or otherwise required by this CIA.

8. A Stipulated Penalty of $1,000 for each day Spectranetics fails to comply fully and
adequately with any obligation of this CIA. OIG shall provide notice to Spectranetics stating the
specific grounds for its determination that Spectranetics has failed to comply fully and adequately
with the CIA obligation(s) at issue and steps Spectranetics shall take to comply with the CIA.
(This Stipulated Penalty shall begin to accrue 10 days after Spectranetics receives this notice
from OIG of the failure to comply.) A Stipulated Penalty as described in this Subsection shall not
be demanded for any violation for which OIG has sought a Stipulated Penalty under Subsections 1-7
of this Section.

B. Timely Written Requests for Extensions. Spectranetics may, in advance of the due
date, submit a timely written request for an extension of time to perform any act or file any
notification or report required by this CIA. Notwithstanding any other provision in this Section,
if OIG grants the timely written request with respect to an act, notification, or report,
Stipulated Penalties for failure to perform the act or file the notification or report shall not
begin to accrue until one day after Spectranetics fails to meet the revised deadline set by OIG.
Notwithstanding any other provision in this Section, if OIG denies such a timely written request,
Stipulated Penalties for failure to perform the act or file the notification or report shall not
begin to accrue until three business days after Spectranetics receives OIG’s written denial of such
request or the original due date, whichever is later. A “timely written request” is defined as a
request in writing received by OIG at least five business days prior to the date by which any act
is
due to be performed or any notification or report is due to be filed.

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C. Payment of Stipulated Penalties.

1. Demand Letter. Upon a finding that Spectranetics has failed to comply with any of the
obligations described in Section X.A and after determining that Stipulated Penalties are
appropriate, OIG shall notify Spectranetics of: (a) Spectranetics’ failure to comply; and (b)
OIG’s exercise of its contractual right to demand payment of the Stipulated Penalties (this
notification is referred to as the “Demand Letter”).

2. Response to Demand Letter. Within 10 days after the receipt of the Demand Letter,
Spectranetics shall either: (a) cure the breach to OIG’s satisfaction and pay the applicable
Stipulated Penalties or (b) request a hearing before an HHS administrative law judge (ALJ) to
dispute OIG’s determination of noncompliance, pursuant to the agreed upon provisions set forth
below in Section X.E. In the event Spectranetics elects to request an ALJ hearing, the Stipulated
Penalties shall continue to accrue until Spectranetics cures, to OIG’s satisfaction, the alleged
breach in dispute. Failure to respond to the Demand Letter in one of these two manners within the
allowed time period shall be considered a material breach of this CIA and shall be grounds for
exclusion under Section X.D.

3. Form of Payment. Payment of the Stipulated Penalties shall be made by electronic funds
transfer to an account specified by OIG in the Demand Letter.

4. Independence from Material Breach Determination. Except as set forth in Section X.D.1.c,
these provisions for payment of Stipulated Penalties shall not affect or otherwise set a standard
for OIG’s decision that Spectranetics has materially breached this CIA, which decision shall be
made at OIG’s discretion and shall be governed by the provisions in Section X.D, below.

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D. Exclusion for Material Breach of this CIA.

1. Definition of Material Breach. A material breach of this CIA means:

a. a failure by Spectranetics to report a Reportable Event, and take
corrective action as required in Section III.H;

b. a repeated or flagrant violation of the obligations under this CIA,
including, but not limited to, the obligations addressed in Section X.A;

c. a failure to respond to a Demand Letter concerning the payment of
Stipulated Penalties in accordance with Section X.C;

d. a failure to engage and use an IRO in accordance with Section III.D; or

e. a failure of the Board to issue a resolution in accordance with Section
III.A.3.

2. Notice of Material Breach and Intent to Exclude. The parties agree that a material breach
of this CIA by Spectranetics constitutes an independent basis for Spectranetics’ exclusion from
participation in the Federal health care programs. Upon a determination by OIG that Spectranetics
has materially breached this CIA and that exclusion is the appropriate remedy, OIG shall notify
Spectranetics of: (a) Spectranetics’ material breach; and (b) OIG’s intent to exercise its
contractual right to impose exclusion (this notification is hereinafter referred to as the “Notice
of Material Breach and Intent to Exclude”).

3. Opportunity to Cure. Spectranetics shall have 30 days from the date of receipt of the
Notice of Material Breach and Intent to Exclude to demonstrate to OIG’s satisfaction that:

a. Spectranetics is in compliance with the obligations of the CIA cited by
OIG as being the basis for the material breach;

b. the alleged material breach has been cured; or

c. the alleged material breach cannot be cured within the 30-day period,
but that: (i) Spectranetics has begun to take action to cure the material
breach; (ii) Spectranetics is pursuing such action with due diligence; and
(iii) Spectranetics has provided to OIG a reasonable timetable for curing
the material breach.

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4. Exclusion Letter. If, at the conclusion of the 30-day period, Spectranetics fails to
satisfy the requirements of Section X.D.3, OIG may exclude Spectranetics from participation in the
Federal health care programs. OIG shall notify Spectranetics in writing of its determination to
exclude Spectranetics (this letter shall be referred to hereinafter as the “Exclusion Letter”).
Subject to the Dispute Resolution provisions in Section X.E, below, the exclusion shall go into
effect 30 days after the date of Spectranetics’ receipt of the Exclusion Letter. The exclusion
shall have national effect and shall also apply to all other Federal procurement and nonprocurement
programs. Reinstatement to program participation is not automatic. After the end of the period of
exclusion, Spectranetics may apply for reinstatement by submitting a written request for
reinstatement in accordance with the provisions at 42 C.F.R. §§ 1001.3001-.3004.

E. Dispute Resolution

1. Review Rights. Upon OIG’s delivery to Spectranetics of its Demand Letter or of its
Exclusion Letter, and as an agreed-upon contractual remedy for the resolution of disputes arising
under this CIA, Spectranetics shall be afforded certain review rights comparable to the ones that
are provided in 42 U.S.C. § 1320a-7(f) and 42 C.F.R. Part 1005 as if they applied to the Stipulated
Penalties or exclusion sought pursuant to this CIA. Specifically, OIG’s determination to demand
payment of Stipulated Penalties or to seek exclusion shall be subject to review by an HHS ALJ and,
in the event of an appeal, the HHS Departmental Appeals Board (DAB), in a manner consistent with
the provisions in 42 C.F.R. § 1005.2-1005.21. Notwithstanding the language in 42 C.F.R. §
1005.2(c), the request for a hearing involving Stipulated Penalties shall be made within 10 days
after receipt of the Demand Letter and the request for a hearing involving exclusion shall be made
within 25 days after receipt of the Exclusion Letter.

2. Stipulated Penalties Review. Notwithstanding any provision of Title 42 of the United
States Code or Title 42 of the Code of Federal Regulations, the only issues in a proceeding for
Stipulated Penalties under this CIA shall be: (a) whether Spectranetics was in full and timely
compliance with the obligations of this CIA for which OIG demands payment; and (b) the period of
noncompliance. Spectranetics shall have the burden of proving its full and timely compliance and
the steps taken to cure the noncompliance, if any. OIG shall not have the right to appeal to the
DAB an adverse ALJ decision related to Stipulated Penalties. If the ALJ agrees with OIG with
regard to a finding of a breach of this CIA and orders Spectranetics to pay Stipulated Penalties,
such Stipulated Penalties shall become due and payable 20 days after the ALJ issues such a
decision unless Spectranetics requests review of the ALJ decision by the DAB. If the ALJ decision
is properly appealed to the DAB and the DAB upholds the determination of OIG, the Stipulated
Penalties shall become due and payable 20 days after the DAB issues its decision.

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3. Exclusion Review. Notwithstanding any provision of Title 42 of the United States Code or
Title 42 of the Code of Federal Regulations, the only issues in a proceeding for exclusion based on
a material breach of this CIA shall be:

a. whether Spectranetics was in material breach of this CIA;

b. whether such breach was continuing on the date of the Exclusion Letter;
and

c. whether the alleged material breach could not have been cured within the
30-day period, but that: (i) Spectranetics had begun to take action to cure
the material breach within that period; (ii) Spectranetics has pursued and
is pursuing such action with due diligence; and (iii) Spectranetics provided to OIG within that period a
reasonable timetable for curing the material breach and Spectranetics has
followed the timetable.

For purposes of the exclusion herein, exclusion shall take effect only after an ALJ decision
favorable to OIG, or, if the ALJ rules for Spectranetics, only after a DAB decision in favor of
OIG. Spectranetics’ election of its contractual right to appeal to the DAB shall not abrogate
OIG’s authority to exclude Spectranetics upon the issuance of an ALJ’s decision in favor of OIG.
If the ALJ sustains the determination of OIG and determines that exclusion is authorized, such
exclusion shall take effect 20 days after the ALJ issues such a decision, notwithstanding that
Spectranetics may request review of the ALJ decision by the DAB. If the DAB finds in favor of OIG
after an ALJ decision adverse to OIG, the exclusion shall take effect 20 days after the DAB
decision. Spectranetics shall waive its right to any notice of such an exclusion if a decision
upholding the exclusion is rendered by the ALJ or DAB. If the DAB finds in favor of Spectranetics,
Spectranetics shall be reinstated effective on the date of the original exclusion.

4. Finality of Decision. The review by an ALJ or DAB provided for above shall not be
considered to be an appeal right arising under any statutes or regulations. Consequently, the
parties to this CIA agree that the DAB’s decision (or the ALJ’s decision if not appealed) shall be
considered final for all purposes under this CIA.

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XI. Effective and Binding Agreement

Spectranetics and OIG agree as follows:

A. This CIA shall be binding on the successors, assigns, and transferees of Spectranetics;

B. This CIA shall become final and binding on the date the final signature is obtained on the
CIA;

C. This CIA constitutes the complete agreement between the parties and may not be amended
except by written consent of the parties to this CIA;

D. OIG may agree to a suspension of Spectranetics’ obligations under the CIA in the event of
Spectranetics’ cessation of participation in Federal health care programs. If Spectranetics ceases
participating in Federal health care programs and is relieved of its CIA obligations by OIG,
Spectranetics shall notify OIG at least 30 days in advance of Spectranetics’ intent to resume
participating as a provider or supplier with any Federal health care program. Upon receipt of such
notification, OIG shall evaluate whether the CIA should be reactivated or modified.

E. The undersigned Spectranetics signatories represent and warrant that they are authorized
to execute this CIA. The undersigned OIG signatory represents that he is signing this CIA in his
official capacity and that he is authorized to execute this CIA.

F. This CIA may be executed in counterparts, each of which constitutes an original and all of
which constitute one and the same CIA. Facsimiles of signatures shall constitute acceptable,
binding signatures for purposes of this CIA.

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On Behalf of the Spectranetics Corporation

	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Emile Geisenheimer	 	Dated: 12/18/2009
	 

	 	 	 	 

EMILE GEISENHEIMER
	 	 
	 

	 	 	 	Chief Executive Officer	 	 
	 

	 	 	 	Spectranetics Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Roger Wertheimer	 	Dated: 12/18/2009
	 

	 	 	 	 

ROGER WERTHEIMER
	 	 
	 

	 	 	 	Spectranetics Corporation	 	 
	 

	 	 	 	Vice President, General Counsel & Secretary	 	 
	 

	 	 	 	Vice President, Human Resources	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael C. Theis	 	Dated: 12/18/2009
	 

	 	 	 	 

PETER S. SPIVACK
	 	 
	 

	 	 	 	MICHAEL C. THEIS	 	 
	 

	 	 	 	Hogan & Hartson LLP	 	 
	 

	 	 	 	Counsel for the Spectranetics Corporation	 	 

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On behalf of the Office of Inspector General

of the Department of Health and Human Services

	 	 	 	 	 
	/s/ Gregory
E. Demske

	 	12/22/09
	 	 
	 

GREGORY E. DEMSKE

	 	 

DATE
	 	 
	Assistant Inspector General for Legal Affairs
	 	 	 	 
	Office of Inspector General
	 	 	 	 
	U. S. Department of Health and Human Services
	 	 	 	 

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APPENDIX A

INDEPENDENT REVIEW ORGANIZATION

This Appendix contains the requirements relating to the Independent Review Organization (IRO)
required by Section III.D of the CIA.

A. IRO Engagement

Spectranetics shall engage an IRO that possesses the qualifications set forth in Paragraph B,
below, to perform the responsibilities in Paragraph C, below. The IRO shall conduct the review in
a professionally independent and objective fashion, as set forth in Paragraph D. Within 30 days
after OIG receives written notice of the identity of the selected IRO, OIG will notify
Spectranetics if the IRO is unacceptable. Absent notification from OIG that the IRO is
unacceptable, Spectranetics may continue to engage the IRO.

If Spectranetics engages a new IRO during the term of the CIA, this IRO shall also meet the
requirements of this Appendix. If a new IRO is engaged, Spectranetics shall submit the information
identified in Section V.A.9 of the CIA to OIG within 30 days of engagement of the IRO. Within 30
days after OIG receives written notice of the identity of the selected IRO, OIG will notify
Spectranetics if the IRO is unacceptable. Absent notification from OIG that the IRO is
unacceptable, Spectranetics may continue to engage the IRO.

B. IRO Qualifications.

The IRO shall:

1. assign individuals to conduct the IRO Reviews who have expertise in all applicable Federal
health care program and FDA requirements relating to Promotional and Product Services Related
Functions, Clinical Investigation Related Functions, and Reporting Related Functions. The assigned
individuals shall also be knowledgeable about the general requirements of the Federal health care
program(s) under which Spectranetics products are reimbursed;

2. assign individuals to design and select the samples for the Transaction Reviews who are
knowledgeable about the appropriate statistical sampling techniques; and

3. have sufficient staff and resources to conduct the reviews required by the CIA on a timely
basis.

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C. IRO Responsibilities.

The IRO shall:

1. perform each component of the IRO Review in accordance with the specific requirements of
the CIA;

2. follow all applicable Federal health care program and FDA requirements in making
assessments in each IRO Review;

3. if in doubt of the application of a particular Federal health care program or FDA
requirement, policy, or regulation, request clarification from the appropriate authority
(e.g., CMS or FDA);

4. respond to all OIG inquires in a prompt, objective, and factual manner; and

5. prepare timely, clear, well-written reports that include all the information required by
Appendix B to the CIA.

D. IRO Independence and Objectivity.

The IRO must perform the IRO Reviews in a professionally independent and objective fashion, as
appropriate to the nature of the engagement, taking into account any other business relationships
or engagements that may exist between the IRO and Spectranetics.

E. IRO Removal/Termination.

1. Spectranetics Termination of IRO. If Spectranetics terminates its IRO during the course
of the engagement, Spectranetics must submit a notice explaining its reasons to OIG no later than
30 days after termination. Spectranetics must engage a new IRO in accordance with Paragraph A of
this Appendix.

2. OIG Removal of IRO. In the event OIG has reason to believe that the IRO does not possess
the qualifications described in Paragraph B, is not independent and/or objective as set forth in
Paragraph D, or has failed to carry out its responsibilities as described in Paragraph C, OIG may,
at its sole discretion, require Spectranetics to engage a new IRO in accordance with Paragraph A of
this Appendix.

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Prior to requiring Spectranetics to engage a new IRO, OIG shall notify Spectranetics of its
intent to do so and provide a written explanation of why OIG believes such a step is necessary. To
resolve any concerns raised by OIG, Spectranetics may request a meeting with OIG to discuss any
aspect of the IRO’s qualifications, independence or performance of its responsibilities and to
present additional information regarding these matters. Spectranetics shall provide any additional
information as may be requested by OIG under this Paragraph in an expedited manner. OIG will
attempt in good faith to resolve any differences regarding the IRO with Spectranetics prior to
requiring Spectranetics to terminate the IRO. However, the final determination as to whether or
not to require Spectranetics to engage a new IRO shall be made at the sole discretion of OIG.

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Appendix B to CIA

I. General Description

As specified more fully below, Spectranetics shall retain an Independent Review Organization (IRO)
to perform reviews to assist Spectranetics in assessing and evaluating its systems, processes,
policies, procedures, and practices related to Spectranetics’s Clinical Investigation Related
Functions, Reporting Related Functions, and Promotional and Product Services Related Functions (IRO
Review). The IRO Review shall consist of two components — a systems review (Systems Review), and a
transactions review (Transactions Review) as described more fully below. Spectranetics may engage,
at its discretion, a single IRO to perform both components of the IRO Review provided that the
entity has the necessary expertise and capabilities to perform both.

If there are no material changes in Spectranetics’s systems, processes, policies, and
procedures relating to Clinical Investigations, Reporting, and Promotional and Product Services
Related Functions, the IRO shall perform the Systems Review for the first and fourth Reporting
Periods. If Spectranetics materially changes its systems, processes, policies, and procedures
relating to Clinical Investigation Related Functions, Reporting Related Functions, and Promotional
and/or Product Services Related Functions, the IRO shall perform a Systems Review for the
materially changed Related Function for the Reporting Period(s) in which such changes were made in
addition to conducting the Review for the first and fourth Reporting Periods. The additional
Systems Review(s) shall consist of: 1) an identification of the material changes; 2) an assessment
of whether other systems, processes, policies, and procedures previously reported did not
materially change; and 3) a review of the systems, processes, policies, and procedures that
materially changed. The IRO shall conduct the Transactions Review for each Reporting Period of the
CIA.

II. Systems Review

A. Description of Reviewed Policies and Procedures

The Systems Review shall be a review of Spectranetics’s systems, processes, policies, and
procedures (including the controls on those systems, processes, policies, and procedures) relating
to certain Clinical Investigation Related Functions, Reporting Related Functions, and Promotional
and Product Services Related Functions. Where practical, Spectranetics personnel may compile
documentation, schedule and organize interviews, and undertake other efforts to assist the IRO in
performing the Systems Review. The IRO is not required to undertake a de novo review of
the information gathered or activities undertaken by Spectranetics pursuant to the preceding
sentence.

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Specifically, the IRO shall review certain of Spectranetics’s systems, processes, policies, and
procedures associated with the following (hereafter “Reviewed Policies and Procedures”).

	 	1.	 	The IRO shall review Spectranetics’s systems, policies, processes, and
procedures applicable to Promotional and Product Services Related Functions:

	 	a.	 	Spectranetics’s systems, policies, processes, and procedures
applicable to the manner in which Spectranetics sales representatives and
account executives handle and submit requests or inquiries about the off-label
uses of Spectanetics’s products to Spectranetics’s Medical Services
Department;
	 
	 	b.	 	the manner in which Spectranetics’s Medical Services
Department handles and responds to requests and inquiries regarding off-label
uses of Spectranetics’s products (including tracking the requests and using
pre-approved materials for purposes of responding to the request);
	 
	 	c.	 	the form and content of information and materials
Spectranetics provides to physicians, pharmacists, or other health care
professionals (collectively “HCPs”) or health care institutions (HCIs)
regarding off-label uses of Spectranetics’s products;
	 
	 	d.	 	Spectranetics’s systems, policies, processes, and procedures,
including those associated with Spectranetics’s Promotional and Advertising
Committee (PARC), relating to Spectranetics’s internal review of information
and materials regarding Spectranetics’s products that Spectranetics
disseminates to HCPs or HCIs;
	 
	 	e.	 	Spectranetics’s systems, processes, policies, and procedures
relating to the development and review of call plans for Spectranetics’s
products. This shall include a review of the bases upon which HCPs and HCIs
belonging to specified medical specialties or types of practice are included
in, or excluded from, the call plans based on expected utilization of
Spectranetics products for FDA-approved uses or non-FDA-approved uses;
	 
	 	f.	 	the processes and procedures by which Spectranetics’s
Compliance Office and Spectranetics Medical Services Department monitor and
identify situations in which it appears that improper off-label promotion may
have occurred; and

	 	g.	 	Spectranetics’s systems, processes, policies, and procedures
for investigating, documenting, resolving, and taking appropriate disciplinary
action for potential situations involving off-label promotion.

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	 	2.	 	The IRO shall review Spectranetics’s systems, policies, processes, and
procedures applicable to Clinical Investigation Related Functions:

	 	a.	 	Spectranetics’s systems, policies, processes, and procedures
for ensuring that Spectrenetics does not introduce or cause to be introduced
into interstate commerce devices prior to complying with one of the methods of
FDA authorization: (1) an FDA-approved pre-market approval application, under
21 U.S.C. § 360e(a)(2) and 21 C.F.R. Part 814; (2) a “510(k) clearance” by FDA
for marketing because it is found to be substantially equivalent to an
appropriate, legally marketed device, under 21 U.S.C. §§ 360c(a)(1) and 360(k)
and 21 C.F.R. Part 807 — Subpart E; (3) an investigational device exemption
under 21 U.S.C. § 360j(g), for the use of a device on humans on an
experimental basis; or (4) an exemption for certain devices as set forth in 21
U.S.C. § 360(l);
	 
	 	b.	 	Spectranetics’s systems, processes, policies, and procedures
to identify or evaluate when the use of a Spectranetics device, including use
of a Spectranetics device in connection with a patient registry, is a clinical
investigation;
	 
	 	c.	 	Spectranetics’s systems, processes, policies, and procedures
to provide for the protection of human subjects, including obtaining informed
consent, as provided in 21 C.F.R. Part 50 and 56 and in 45 C.F.R. Part 45;
	 
	 	d.	 	Spectranetics’s systems, processes, policies, and procedures
for clinical investigations site audits;
	 
	 	e.	 	Spectranetics’s processes, policies, and procedures regarding
disclosure of financial interests of clinical investigators, as required by 21
C.F.R. Part 54, for studies using Spectranetics’s products;
	 
	 	f.	 	Spectranetics’s systems, processes, policies, and procedures
for complying with reporting obligations provided in 21 C.F.R. § 812.150 for
devices with an approved investigational device exception.
	 
	 	g.	 	the processes and procedures by which Spectranetics’s
Compliance Office identifies situations in which it appears that
non-compliance occurred with regard to the requirements for, or
Spectranetics’s policies and procedures relating to Clinical Investigations
Related Functions; and

	 	h.	 	Spectranetics’s processes, policies, and procedures for
investigating, documenting, resolving, and taking appropriate disciplinary
action for situations potentially involving non-compliant Clinical
Investigations Related Functions.

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	 	3.	 	The IRO shall review Spectranetics’s systems, policies, processes, and
procedures applicable to Reporting Related Functions:

	 	a.	 	Spectranetics’s processes, policies, and procedures for
reporting adverse events, including processes to ensure compliance with MDR
regulations at 21 C.F.R. Part 803;
	 
	 	b.	 	Spectranetics’s processes, policies, and procedures relating
to reporting obligations as provided in 21 C.F.R. § 814.84, including
submission of summaries and bibliographies of information not submitted as
part of a pre-market application, for devices with FDA premarket approval
under 21 U.S.C. §  360(e)(2),
	 
	 	c.	 	the processes and procedures by which Spectranetics’s
Compliance Office monitors and identifies situations in which it appears that
Spectranetics has failed to comply with FDA Reporting Related requirements
and/or Spectranetics’s own Reporting Related policies and procedures; and
	 
	 	d.	 	Spectranetics’s processes, policies, and procedures for
investigating, documenting, resolving, and taking appropriate disciplinary
action for failure to comply with Reporting Related requirements and/or
Spectranetics’s own Reporting Related policies and procedures.

B. Systems Review Report.

The IRO shall prepare a report based upon each Systems Review. For each of the Reviewed
Policies and Procedures identified in Section II.A above, the report shall include the following
items:

	 	1.	 	a description of the documentation (including policies) reviewed and any
personnel interviewed;

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	 	2.	 	a detailed description of Spectranetics’s systems, policies, processes, and
procedures relating to the items identified in Sections II.A.1-3 above, including a
general description of Spectranetics’s control and accountability systems
(e.g.,
documentation and approval requirements, and tracking mechanisms) and written policies
regarding the Reviewed Policies and Procedures;
	 
	 	3.	 	a description of the manner in which the control and accountability systems and
the written policies relating to the items identified in Sections II.A.1-3 above are
made known or disseminated within Spectranetics;
	 
	 	4.	 	a detailed description of any system(s) used to track and respond to requests
and inquiries regarding off-label uses of Spectranetics products;
	 
	 	5.	 	findings and supporting rationale regarding any weaknesses in Spectranetics’s
systems, processes, policies, and procedures relating to the Reviewed Policies and
Procedures, if any; and
	 
	 	6.	 	recommendations to improve any of the systems, policies, processes, or
procedures relating to the Reviewed Policies and Procedures, if any.

III. Transactions Review

As described more fully below in Sections III.A-E, the Transactions Review shall be based upon
a review of a sample of documents, including patient records and other documents relating to
patients participating in clinical investigations or clinical registries involving Spectranetics
products. The IRO shall report on all aspects of the Transactions Review in the Transactions
Review Reports.

A. Definitions.

	 	1.	 	Sampling Unit: A patient participating in a Clinical
Investigation or clinical registry using a Spectranetics product conducted inside
the United States.
	 
	 	2.	 	Population: All patients participating in a Clinical
Investigation or clinical registry using a Spectranetics product conducted inside
the United States during the reporting period.
	 
	 	3.	 	Error: Sampled patients whose medical record and associated
documents is missing documentation described in the methodology in Section III.C,
below, or for whom there in an adverse finding for Inquiries III.C.3-7 below.

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	 	B.	 	Sample: The IRO shall randomly select 40 patients from all patients
participating in a Clinical Investigation or clinical registry using a Spectranetics
product conducted inside the United States during the reporting period. The IRO shall
conduct the
review based on supporting documentation in Spectranetics’ possession and copies of
supporting documentation and patient records obtained from Spectranetics Clinical
Investigation and clinical registry sites.
	 
	 	C.	 	Methodology: For each Sampling Unit, the IRO shall review the documentation
and evaluate or identify the following (“Inquiries”):

	 	1.	 	Identify the legal authority under which the Spectranetics may
distribute, or cause the distribution of, the device used in the Clinical
Investigation or Registry;
	 
	 	2.	 	After evaluating the purpose of the study, whether the study was a
Clinical Investigation;
	 
	 	3.	 	Whether the patient was clinically eligible for inclusion in the
Clinical Investigation or Registry;
	 
	 	4.	 	If applicable, whether Institutional Review Board approval was obtained
for the study;
	 
	 	5.	 	Whether patient’s informed consent was obtained;
	 
	 	6.	 	If an adverse event occurred, whether it was appropriately reported
within Spectranetics; and
	 
	 	7.	 	If an adverse event occurred, whether it was appropriately reported to
the FDA under the appropriate reporting requirements at 21 C.F.R. Part 803 or 21
C.F.R. § 812.150.

	 	D.	 	Other Requirements.

	 	1.	 	Replacement Sampling. Replacement sampling is not permitted for
Sampling Units with missing documentation.
	 
	 	2.	 	Use of First Samples Drawn. Sampling Units selected in each first
sample shall be used (i.e., it is not permissible to generate more than one list of
random samples and then select one for use).

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	 	E.	 	Transaction Review Report. For each Reporting Period, the IRO shall prepare a
report based on its Transactions Review. The report shall include the following:

	 	1.	 	General Elements to Be Included in Report

	 	a.	 	Review Objectives: A clear statement of the objective
intended to be achieved by the review;
	 
	 	b.	 	Population: A description of the Population;
	 
	 	c.	 	Review Protocol: A detailed narrative description of
the procedures performed and a description of the Sampling Unit and
universe utilized in performing the procedures for each Sample Unit
reviewed; and
	 
	 	d.	 	Sources of Data: A full description of documentation
and other information, if applicable, relied upon by the IRO in performing
the Transactions Review.

	 	2.	 	Statistical Sampling Documentation.

	 	a.	 	The number of Sampling Units in the sample;
	 
	 	b.	 	The number of Sampling Units for which an Error was
identified and an explanation of the Error;
	 
	 	c.	 	A copy of the printout of the random numbers generated
by the “Random Numbers” function of the statistical sampling software used
by the IRO, including the seed number; and
	 
	 	d.	 	A description or identification of the statistical
sampling software package used to select the sample.

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	 	3.	 	Results to be Included in Report. The following results shall be
included in each Promotional and Product Services Review Report:

	 	a.	 	A narrative explanation of the IRO’s findings and
supporting rationale (including reasons for Errors and patterns noted,
etc.) based on the Inquiries conducted as part of the Transactions Review.

	 	b.	 	A narrative explanation of the IRO’s findings and
supporting rationale regarding any weaknesses in Spectranetics’s systems,
processes, policies, procedures, and practices relating to the Inquiries,
if any;
	 
	 	c.	 	recommendations for improvement in Spectranetics’s
systems, processes, policies, procedures, and practices relating to the
Inquiries; and
	 
	 	d.	 	a spreadsheet identifying by Sampling Unit the results
of each Inquiry.

	 	4.	 	Credentials. The names and credentials of the individuals who: (a)
designed the statistical sampling procedure for the Transactions Review and (b)
performed the Transactions Review.

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