SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT (the "Settlement Agreement") is made this 24
day of March, 1999 by and between XXXX & XXXXXX COMPANY, a Delaware
corporation ("Buyer") and PHOTOMATRIX CORPORATION, a Nevada corporation
("Seller").
RECITALS
A. Buyer and Seller entered into an OEM Purchase Agreement on June 19,
1996, pursuant to which Buyer would purchase and Seller would sell the
Products and Accessories set forth in the Agreement.
B. Buyer and Seller entered into "amendments" to the OEM Purchase
Agreement, including an addendum (the "B&H-Photomatrix Business
Agreement, December 29, 1997") and a second addendum (the
"B&H-Photomatrix Business Agreement Addendum, January 5, 1998) and an
amendment (the "B&H/Photomatrix Business Agreement, May 19, 1998). The
OEM Purchase Agreement, the two addenda and the amendment are
collectively referred to in this Settlement Agreement as the "OEM
Agreement."
C. Disputes have arisen between the parties with respect to their
respective rights under the OEM Agreement.
D. By agreeing to the compromise, resolution and settlement contained
in this Settlement Agreement, neither of the parties hereto admits that
such party has breached any provisions or obligations of the OEM
Agreement or any other agreements, whether written or oral, entered into
by and between the parties as a direct consequence of the OEM Agreement.
Now therefore, the parties for good and valuable consideration and the mutual
promises herein set forth, agree as follows:
COVENANTS AND AGREEMENTS
1. Xxxx & Xxxxxx will cease sales of B&H PS II or Series 9000 immediately
and will no longer offer this product to its customers or distribution
channel.
2. Photomatrix is no longer restricted and is completely free to distribute
or sale any and all of its products through whichever means or
distribution channel it selects.
3. Commencing on the date hereof and ending on July 31, 1999, Photomatrix
will repurchase from Xxxx & Xxxxxx 17 Series 9000 (B&H PS II) scanners
and 20 SmartFeeders (herein called the ("Products") under the OEM
Agreement. The purchase price on all Products sold to Xxxx & Xxxxxx
prior to April 1, 1998 or which were used by Xxxx & Xxxxxx as loaners,
demonstrators or were used for more than sixty (60) days by customers,
will be 50 percent of the price at which they were sold to Xxxx &
Xxxxxx. The purchase price on all other Products will be 80 percent of
the price at which they were sold to Xxxx & Xxxxxx.
Notwithstanding the foregoing, should a customer of Xxxx & Xxxxxx
request that Xxxx & Xxxxxx sell it a B&H PS II or Series 9000 scanner,
the transaction will be referred to and handled directly by and through
Photomatrix, but Xxxx & Xxxxxx will be paid 105% of the price at which
Xxxx & Xxxxxx purchased it from Photomatrix, the difference constituting
a finder's fee.
4. Photomatrix will issue a purchase order concurrent with the execution of
this Settlement Agreement for three to four scanners and three to four
SmartFeeders and thereafter will issue monthly purchase orders to Xxxx &
Xxxxxx for three to four scanners and three to four SmartFeeders with
appropriate shipping instructions.
BUYER FOR ITSELF, ITS AFFILIATES, SUBSIDIARIES, SUCCESSORS AND ASSIGNS,
AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND REPRESENTATIVES,
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS OF THE PRODUCTS FOR A PARTICULAR PURPOSE. All
Products shall be delivered by Buyer "As Is/Where Is". Seller understands
and agrees that if the Products are unsatisfactory or perform
unsatisfactorily for any reason, Seller has no recourse to make a claim
and waives all claims against Buyer, its affiliates, subsidiaries,
successors and assigns, and their respective directors, officers,
employees and representatives under this Settlement Agreement or any
other agreement or document, oral or written.
5. Xxxx & Xxxxxx will be paid within thirty days of shipments, unless the
terms for payment to Photomatrix is shorter for a particular unit sold
by Photomatrix, in which event Xxxx & Xxxxxx will be paid on the basis
of the shorter payment term. In the event Photomatrix pays for at least
four (4) scanners and four (4) SmartFeeders in any one month,
Photomatrix may, at its sole discretion, purchase additional Products
during such month
on one week's notice.
6. All Products are to be prepared and packed for shipment to secure safe
delivery, the lowest transportation rates, and to meet the applicable
carrier's requirements. External containers will be plain and marked
with Seller's name or logo, as directed. All Products shall be shipped
by the method of transportation selected by Seller. Buyer covenants that
each Product now in Buyer's possession is in the same condition as
originally delivered by Seller to Buyer, except as Buyer may have
disclosed to Seller in writing prior to the execution of this Settlement
Agreement. In any event the risk of any (i) loss, (ii) damage to, or
(iii) deterioration in Products or Accessories, howsoever arising, shall
be borne by Seller once the Products have been delivered to the carrier
selected by Seller.
7. Except as set forth herein specifically to the contrary, the warranties
(and exceptions) set forth in Section 5 of the OEM Agreement are fully
incorporated herein. The term of this warranty is limited to a period of
twelve (12) months from the date of the shipment by Seller of the
Products.
8. Notwithstanding the effective termination of the OEM Agreement, Seller
shall from time to time and for five years after the execution of the
Settlement Agreement (the "Spare parts Period"), sell to Buyer upon the
issuance by Buyer of its purchase order, spare parts at 75% of the
prices shown on the price list published by Seller from time to time
(but no less than annually) through December 31, 2001 and at 80% of the
prices on the price list published by Seller from time to time (but no
less than annually) from January 1, 2002 through December 31, 2003. Xxxx
& Xxxxxx will issue its purchase order for the required spare parts with
net thirty (30) day payment terms. After the expiration of the spare
Parts Period, Seller shall grant to Buyer access to any vendors able to
supply any spare parts no longer being used in any other Product being
manufactured by Seller. In addition, Seller shall provide accessibility
to all drawings and other information necessary for Buyer to
manufacture, such discontinued spare parts.
9. Seller agrees to provide to Buyer on a timely basis, at no charge, such
illustrations, recommended spare parts lists or other suitable materials
as Buyer may require for spare parts identification.
10. Buyer shall use its best efforts to maintain sufficient quantities of
parts on hand to meet reasonable demands. Nonetheless, Seller agrees to
provide to Buyer any replacement parts on an emergency basis. Emergency
delivery will be accomplished by the most expedient method to a location
specified by Buyer. Parts ordered on an emergency basis will be shipped
by Seller with 24 hours after receipt of Buyer's purchase order. In the
event that an emergency ordered part is temporarily out of stock, Seller
shall immediately notify Buyer.
11. Seller and Buyer represent and warrant that each of them shall comply in
all material respects with all applicable permits and licenses and all
requirements of applicable laws,
orders, regulations and standards in their respective performance of
this Settlement Agreement. Seller further represents and warrants that
the actions contemplated hereby and the subject matter of this Agreement
(i) will not violate or infringe any rights of third parties and (ii)
are not in conflict with any agreements by which it is bound.
12. Seller shall indemnify, defend and hold Buyer and each of its
affiliates, subsidiaries, divisions, and their respective directors,
officers, employees, agents, successors and assigns harmless against all
claims, demands, causes of action, judgments, damages, expenses, costs
and attorney's fees of every kind and character including with
limitation for damage to or loss of property, or for injury to or death
of persons, arising directly or indirectly, for the use or operation of
the Products and Accessories, either on a standalone basis or as a
component of a product or system, save for such claims, demands, causes
of action to the extent they arise out of the negligence or willful
conduct of Buyer.
13. Seller shall indemnify, defend and hold Buyer, its affiliates, its
customers, and its directors, officers, employees, agents and their
respective heirs, successors and assigns and their customers
("Indemnitees") harmless from and against any claims that the marketing,
distribution, sale, lease, rent operation or use of the Products or the
Accessories by any Indemnitee infringes any U.S. or foreign patent,
trade secrets, copyrights or other right of a third party. Buyer shall
provide Seller reasonably prompt notice of such claim filed against
Buyer or any other Indemnitee. In the event that the marketing,
distribution, sale, lease, rent, operation or use of the Products or any
Accessory shall be enjoined or shall be held by a final judgment from
which no appeal has been taken or the time to appeal from which has
expired to not permit Seller to perform under this Agreement or for
Buyer to receive the full benefits contemplated by this Agreement (an
"Event"), then Buyer, at its sole election, may terminate this Agreement
and recover damages from Seller.
14. Seller shall vigorously pursue any parties infringing any of the
proprietary rights which are the subject of this Agreement, including
rights evidenced by any patents which now exist or hereafter issue. If
Buyer becomes aware of any such infringement, it shall provide notice to
Seller of the infringement. If within sixty (60) days from receipt of
Buyer's notice (or within any applicable statute of limitations less
than sixty days), the unlicensed infringement has not ceased or Seller
has not commenced legal action against the infringer, (i) Buyer shall
have the right to file suit against the infringer, (ii) Seller may not
commence any action against the infringer or join in any action other
than as a necessary party, (iii) all damages or other awards shall inure
to the benefit of Buyer and (iv) Buyer shall have the authority, in its
name and on behalf of Seller, to enter into a licensing arrangement in
settlement of the infringement dispute with all payments being for the
account of Buyer.
15. Both parties will instruct their staff, in writing, to refrain from
making any disparaging comments to any current or prospective customers
(including end users, distributors, VARs, systems integrators or
resellers) or trade publications about each others products, technology
or financial health.
16. With the exception of information that is required to be disclosed in
any public filings or in conjunction with any judicial proceedings, both
parties agree not to disclose the existence or content of the OEM
Agreement or this Settlement Agreement, or the matters made the basis
hereof, to any party, except to its directors, officers, employees,
legal representatives or any financing parties, lenders or authorized
representatives of corporate entities conducting due diligence of
Photomatrix and who have a need to know its existence or content,
without prior approval from the other party.
17. Except as herein provided, including, without limitation, Paragraphs 5,
12, 13 and 14 hereof, each of the parties and their respective
affiliates, subsidiaries, divisions, and their respective directors,
officers, employees, agents, successors and assigns, does hereby release,
acquit and discharge the other party and their respective affiliates,
subsidiaries, divisions, and their respective directors, officers,
employees, agents, successors and assigns of and from any and all
claims, liabilities, demands, causes of action or rights, of any nature
whatsoever, whether absolute, contingent, accrued or otherwise and
whether or not now known, based in whole or in part on any act,
occurrence, or condition existing as of the date hereof (hereinafter
"Claims"), including without limitation, all Claims relating in whole or
in part to (i) the OEM Agreement and (ii) the manufacture, design,
performance and operation of the Products and Accessories.
18. To the extent of any inconsistency between the terms of this Settlement
Agreement and the OEM Agreement, the terms of this Settlement Agreement
shall control.
19. Any notices which may or should be given hereunder shall be in writing
and shall be personally delivered against receipt or sent by registered
or certified first class mail, postage prepaid, as follows:
If to Xxxx & Xxxxxx, Xxxx & Xxxxxx Imaging Components
DMPC or IMPG: 0000 Xxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
With a copy to: Xxxx & Xxxxxx Company
0000 Xxx Xxxxxxx Xxxx
Xxxxxx, XX 00000-0000
Attention: Law Department
If to Photomatrix Corporation: 0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
With a copy to: Xxxxx X. Xxxx, Esq.
Sullivan, Hill, Xxxxx, Rez,
Xxxxx & LaBazzo
000 X. X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
20. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, but neither
party shall assign this Agreement or any rights or obligations hereunder
without the express written consent of the other; provided however,
that a successor in interest by merger, consolidation, operation of law,
assignment, purchase or otherwise, of all or substantially all of the
business of either party, shall acquire all interests of such party
hereunder without the written consent of the other. All subsidiaries or
affiliates of Buyer which have purchased Products under the OEM
Agreement are entitled to the benefits of this Settlement Agreement as
if they were signatories hereto.
21. Wherever possible, each provision of this Settlement Agreement and each
related document shall be interpreted in such a manner as to be
effective and valid under applicable law. However, if any provision of
this Settlement Agreement or any related document shall be prohibited by
or invalid under applicable law, such provision shall be ineffective
only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions
of this Settlement Agreement or such related document.
22. No failure on the part of either party to exercise any right, power or
privilege under this Agreement, or under any instrument executed pursuant
hereto, shall operate as a waiver. No single or partial exercise of any
right, power or privilege shall preclude any other, or further exercise of
any other right, power or privilege. All rights and remedies granted
herein shall be in addition to other rights and remedies to which the
parties may be entitled at law or in equity. No waiver of any of the
provisions hereof shall be affected unless in writing and signed by the
party charged with such waiver. No waiver shall be deemed a continuing
waiver, or a waiver in respect of any breach of default whether similar
or different in nature unless expressly so stated in writing.
23. This Agreement cannot be, and shall not be deemed on construed to have
been, modified, amended, rescinded, canceled or waived, in whole or in
part, except by written instrument signed by the parties hereto.
24. This Settlement Agreement shall be governed by, and shall be construed
in accordance with the laws of the State of Nevada, notwithstanding any
choice of law provisions to the contrary.
25. This Settlement Agreement constitutes the entire agreement between the
parties hereto and supersedes and cancels any and all prior agreements
between the parties as to the matters covered herein.
IN WITNESS WHEREOF, each of the parties has caused this Settlement
Agreement and Release to be executed on its behalf by a duly authorized
officer as of the date first above written.
XXXX & XXXXXX COMPANY
By: /s/ Xxxxx Xxxxxxx
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Title: President Xxxx & Xxxxxx ICG
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PHOTOMATRIX CORPORATION
By: /s/ [ILLEGIBLE]
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Title: CEO
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