SETTLEMENT AGREEMENT
This SETTLEMENT AGREEMENT (the "Agreement") is made as of September 28th, 2001
by and among Staar Surgical Company having its principal offices at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. (hereinafter "Staar Surgical"), Canon
Inc. having its principal offices at ▇▇-▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇
▇▇▇-▇▇▇▇, ▇▇▇▇▇ (hereinafter "CINC"), Canon Sales Co., Inc. having its principal
offices at 11-28 , Mita 3-chome, ▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇ (hereinafter
"CSCO"), and Canon Staar Co., Inc. having its principal offices at ▇▇-▇▇, ▇▇▇▇▇
▇-▇▇▇▇▇, ▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇ (hereinafter "Canon Staar"), each
hereinafter individually referred to as the "party" and collectively as the
"parties" to this Agreement.
In consideration of the resolution of disputes raised among the parties and the
mutual promises and agreements contained herein and such other good and valuable
consideration, the parties agree as follows:
1. Canon Staar, the joint venture between Staar Surgical and CINC and CSCO,
shall continue with the same name.
2. The parties reconfirm the validity and enforceability of the Joint Venture
Agreement made as of May 23, 1988 by and among Staar Surgical, CINC and CSCO
and the Technical Assistance and License Agreement made as of September 6,
1988 by and between Staar Surgical and Canon Staar (the "1988 TALA") and
agree to abide by the terms thereof.
3. Upon full execution of this Agreement, Staar Surgical shall promptly commence
the transfer of all of its new or advanced technology to Canon Staar under
the 1988 TALA. This technology includes, but is not limited to, ▇▇▇▇▇▇▇▇ IOL,
glaucoma ▇▇▇▇▇ and ICL. The details and exact timing of such technology
transfer shall be mutually agreed upon by Staar Surgical and Canon Staar.
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4. In addition to the licenses and rights granted to Canon Staar in the ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ Surgical further grants Canon Staar a payment-free and royalty-
free, fully paid-up perpetual exclusive license and right under LICENSED
TECHNOLOGY (which term is defined in the 1988 TALA) to (i) make and have made
any and all products in China and (ii) to use, sell, lease and otherwise
dispose of such products made in China, in Japan and China: provided that:
(a) up and until March 3, 2003, the expiration date of all of the ▇▇▇▇▇▇▇▇ US
Patent No.4,573,998 and its foreign corresponding patents. Canon Staar
agrees, with respect to foldable intraocular lens products, to respect
the Staar Surgical's commitment of "most favored nations" clause made by
Staar Surgical in its license agreements for foldable intraocular lens
products and LICENSED TECHNOLOGY with others (except Staar Surgical's
affiliates) entered into prior to August 22, 2001 and existing in force
as of the date hereof and covering China; the above Canon Staar's
agreement in this subsection (a) is conditioned on Staar Surgical's
representation and warranty that (i) its commitment of "most favored
nations" clause above expires as of March 3, 2003, the expiration date of
all of the ▇▇▇▇▇▇▇▇ US Patent No.4,573,998 and its foreign corresponding
patents, and thus, as of March 4, 2003 the agreement of Canon Staar with
respect to Staar Surgical's commitment of "most favored nations" clause
shall terminate and (ii) with respect to products other than the foldable
intraocular lens product, the license and right granted to Canon Staar
under this Section 4 shall have full force without condition (except
subsection (b) below); and
(b) Canon Staar agrees that the grant of the license and right under this
Section 4 in China shall be subject to the non-exclusive licenses and
rights of others in China granted by Staar Surgical under LICENSED
TECHNOLOGY prior to August 22, 2001 and continuing in force as of the
date hereof.
5. STAAR Surgical and Canon Staar shall promptly enter into a raw material
supply agreement for the supply of raw materials from Staar Surgical to Canon
Staar. The terms of such agreement shall be negotiated by Staar Surgical and
Canon Staar in good faith; provided that until such time as
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the new agreement is executed, the terms currently employed for the supply
of raw materials shall continue as before; provided, further, that Staar
Surgical agrees to supply the raw materials on a timely basis to Canon
Staar so that it will not hinder Canon Staar's production.
6. CSCO and Canon Staar shall promptly enter into a distribution agreement for
the distribution of Canon Staar's products in Japan by CSCO. The terms of
such agreement shall be negotiated by CSCO and Canon Staar in good faith;
provided that the selling prices by Canon Staar of its products to CSCO
shall be in the range of fifty percent (50%) to seventy percent (70%) of
the sales price of such products from CSCO to its end customers through its
own sales channel; provided, further, that until such time as the Board of
Canon Staar reaches unanimous approval and CSCO agrees on the pricing, the
selling prices currently employed by Canon Staar of its products to CSCO
shall continue as before so long as they are in the range of fifty percent
(50%) to seventy (70%) of the sales price from CSCO to its end customers
through its own sales channel. This pricing shall be reviewed annually with
detailed terms subject to unanimous approval of the Board of Canon Staar
and agreement of CSCO.
7. Upon full execution of this Agreement, Staar Surgical agrees that the case
titled STAAR Surgical Company v CANON Inc., CANON Sales Co., Inc. and Norio
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Kuroda (United States District Court, Central District of California, Case
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No. 00-04835) shall be dismissed with prejudice pursuant to a document
drafted by counsel to Defendants and signed by Plaintiff.
8. Upon full execution of this Agreement, CINC and CSCO agree that the Japan
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Commercial Arbitration Association (JCAA) Case No. 00-03. Tokyo shall be
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dismissed. Any document necessary for submission to the JCAA for dismissal
shall be prepared by CINC, CSCO and Staar Surgical.
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9. With respect to two (2) patent infrigngement lawsuits brought by Canon
Staar against Allergan K.K. in Tokyo, Japan, upon full execution of this
Agreement, Canon Staar shall commence negotiation of settlement with the
assistance of Staar Surgical, CINC and CSCO and taking into account the
parties' respective positions. Any settlement of the foregoing lawsuits
with Allergan K.K. shall be subject to unanimous approval of the Board of
Canon Staar.
10. This Settlement Agreement and the terms hereof shall be treated by the
parties as confidential, except as otherwise agreed to by the parties or
required by laws and local regulations.
11. This Agreement is an amendment to the 1988 TALA pursuant to Section 4 above
and shall be governed by and construed in accordance with the laws of
Japan.
12. Staar Surgical, CINC and CSCO, each for itself and its successors and
assigns, hereby RELEASE, WAIVE, DISCHARGE AND CONVENANT NOT TO ▇▇▇ each
other, or each other's parent, subsidiaries, affiliates and their present
and former directors, officers, agents and employees, and each of them,
from or related to any and all claims, losses, damages, costs and
obligations, known or unknown, which they may now have or have ever had,
arising out of, or related to, the disputes which are based on the
performances, non-performances or acts made prior to the date hereof,
including without limitation, those alleged in the case titled STAAR
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Surgical Company v CANON Inc., CANON Sales Co., Inc. and ▇▇▇▇▇ ▇▇▇▇▇▇
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(United States District Court, Central District of California, Case No. 00-
04835) and the Japan Commercial Arbitration Association (JCAA) Case No. 00-
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03, Tokyo, except for the parties respective obligations under this
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Agreement. The forgoing release, waiver, discharge and covenant not to ▇▇▇
shall not apply to any claims that may be made against the former president
of Canon Staar, ▇▇▇▇ ▇▇▇▇, by Staar Surgical, CINC, CSCO or Canon Staar.
13. Each party shall bear its costs and expenses, including attorney fees, in
connection with the subject matter hereof.
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14. Subject to full execution hereof by the parties, this Agreement shall
become effective as of the date first above written.
IN WITNESS WHEREOF, the parties have entered in to this Settlement Agreement as
the date first above written.
CANON INC. STAAR SURGICAL COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President & CEO Title: President & CEO
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CANON SALES CO., INC. CANON STAAR CO., INC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
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By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
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