EXHIBIT 10.34
SETTLEMENT AGREEMENT
This Settlement Agreement (the "Settlement Agreement") is entered into as
of this 3rd day of October, 2001, by and between OmniCorder Technologies, Inc.,
a Delaware corporation with its principal place of business at 00 Xxxx Xxxx
Xxxx, Xxxxx Xxxxx, Xxx Xxxx ("OmniCorder"), and Xx. Xxxxxxx Xxxxx, an individual
residing at 000 Xxxx Xxx Xxxx, Xxxxxxx, Xxx Xxxx ("Anbar").
WHEREAS, OmniCorder has filed, inter alia, a Summons With Notice, Amended
Summons and a Complaint for a permanent injunction, declaratory judgment and
damages and an Order to Show Cause and Motion for a Preliminary Injunction with
the Supreme Court of the State of New York, County of Suffolk, encaptioned
OmniCorder Technologies, Inc. v. Xx. Xxxxxxx Xxxxx, Index No. 01-06729 (the
"Action"), requesting the Court to enjoin and restrain Anbar, his agents,
employees, attorneys and any other persons acting on his behalf from:
terminating, attempting to terminate, or otherwise interfering with the
exclusive license of OmniCorder to use certain patented cancer screening
technology;
WHEREAS, Anbar has filed, inter alia, affidavits, a Memorandum of Law in
Opposition to Plaintiff's Motion for a Preliminary Injunction, as well as an
Answer and an Amended Answer to Plaintiff's Summons and Complaint, together with
Counterclaims against OmniCorder (collectively, the "Answer and Counterclaims");
and
WHEREAS, the parties hereto now desire to settle and dispose of the Action
and the Answer and Counterclaims (the Action and the Answer and Counterclaims
are hereinafter referred to collectively as the "Action") solely to avoid the
costs and inconvenience associated with litigation, and without any admission of
fault or liability.
NOW THEREFORE, in consideration of the execution of this Settlement
Agreement and the mutual promises contained herein, the parties hereto agree as
follows:
1. Continued Effect of Option Agreement to Purchase Exclusive License to
Use Patent Rights. The parties hereto hereby agree that the Option Agreement to
Purchase Exclusive License to Use Patent Rights dated March 19, 1997, as
heretofore amended and supplemented by the Amendments dated July 23, 1997 and
September 13, 1997, and the Letter Agreement dated March 19, 1998 (collectively,
the "License Agreement"), is, and shall remain in full force and effect as of
the date hereof, except as certain of the terms thereof shall have been
expressly modified by this Settlement Agreement and that OmniCorder has duly
exercised its right to purchase, and has in fact purchased, the License defined
and referred to therein.
2. Withdrawal of Notice of Termination with Prejudice; Mutual Releases.
Anbar hereby irrevocably withdraws the Notice of Termination, dated February 28,
2001, and irrevocably waives and relinquishes any and all claims, or right to
claim, that OmniCorder breached the terms of, or otherwise defaulted in any of
its obligations under the License Agreement for, upon or by reason of any
matter, cause or thing whatsoever, whether known or unknown, from the beginning
of the world through and including the date hereof, including, but not limited
to, any and all of the matters identified in the Notice of Termination or that
certain letter dated June 30, 2000 from Xxxxxx Xxxxxxx, Esq. to OmniCorder. It
is specifically agreed and understood that the foregoing release shall not, nor
is it intended to, release OmniCorder from its obligation to pay to Anbar the
Royalty due under the License Agreement on February 1, 2002 for DAT Breast
Cancer Screening Systems installed by OmniCorder during the year ended December
31, 2001 or any future rights of Anbar which may arise in his capacity as a
shareholder of OmniCorder. In this regard, Anbar acknowledges and agrees that
the License Agreement does not afford him any pre-emptive rights or any other
guarantee that he will remain a 20% shareholder of OmniCorder, and OmniCorder
acknowledges that Anbar currently holds 1,320,000 shares, or 14.42% of the
outstanding shares of common stock of OmniCorder, being the only class of stock
outstanding.
OmniCorder hereby irrevocably releases and relinquishes any and all claims
or right to claim, that Anbar breached the terms of or otherwise defaulted in
any of his obligations under the License Agreement for, upon or by reason of any
matter, cause or thing whatsoever, whether known or unknown from the beginning
of the world through and including the date hereof.
3. Satisfaction of Section TWO Obligations. Subject to the provisions of
Paragraph 5 hereof, the parties hereto hereby irrevocably agree that OmniCorder
has complied with all of its obligations under Section "TWO: OTHER GOOD AND
VALUABLE CONSIDERATION" ("Section TWO") of the License Agreement which were
required to be performed by OmniCorder through and including the date hereof,
including, without limitation, all funds to be provided and spent under the
GRANT (as defined in the License Agreement) and all property and equipment
referred to therein. The parties hereby also further agree that the provisions
of such Section TWO shall have no further force or effect. As such, Anbar hereby
irrevocably waives any and all obligations of OmniCorder which could have
conceivably arisen under such Section TWO from and after the date hereof,
including, without limitation, any and all obligations which could have arisen
under subparagraphs 4 and 5 thereof.
4. Payment for each DAT Breast Cancer Screening System. For purposes of
clarity and the avoidance of any future disputes between the parties hereto
relating to the License Agreement, the parties hereto agree that for the
purposes of determining whether the $300 fee contemplated by Section ONE of the
License Agreement is due and payable in respect of any installed DAT Breast
Cancer Screening System (the "System"), the term "a client's site" as used in
the License Agreement shall mean and refer to only those installations at which
OCT derives any revenues from payments made to it by the user of the System at
such installation, and shall in no event include or refer to any installations
of the System for research, System testing, charitable purposes or any purposes
other than breast cancer or diabetes screening. The parties further agree that
OmniCorder shall, together with any such annual Royalty, provide Anbar with a
Royalty report setting forth, in reasonable, verifiable detail, the basis for
the calculation of the Royalty due to Anbar.
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5. Transfer of Equipment to School of Medicine. OmniCorder hereby
irrevocably sells, assigns and transfers, as is, to the School of Medicine,
SUNY-Buffalo, all of its right, title and interest in and to the one infra-red
camera, one temperature calibration unit and one macro lens heretofore provided
to Anbar. Anbar will, on reasonable notice, during business hours, at a mutually
convenient time, within 10 days of the date hereof, make available for
inspection by and delivery to OmniCorder's designated representatives in Buffalo
the second infra-red camera, the temperature calibration unit and the 50 mm
lens, all of which were provided to Anbar by OmniCorder under the Grant. Anbar
represents and warrants to OmniCorder that to the best his knowledge such
equipment is in working order. As used in the foregoing sentence, the phrase
"working order" shall mean that such equipment functions in substantial
compliance with its specifications. If OmniCorder's designated representatives
determine in good faith that the equipment is not in "working order," then such
designated representatives shall have the right to substitute for such
equipment, which is not in "working order," a like item of equipment hereinabove
designated as equipment to be transferred to the School of Medicine. In the
event of such substitution, the School of Medicine shall take title to the
equipment previously provided to Anbar other than the equipment selected for
substitution by OmniCorder, if any; title to the remaining group of the
equipment, including that selected for substitution by OmniCorder, shall reside
with OmniCorder.
6. Exclusive Bases to Terminate License. In order to limit any future
disputes between the parties relating to the License Agreement, the parties
hereto agree that notwithstanding anything to the contrary set forth in the
License Agreement, the sole and exclusive bases under which Anbar may in the
future seek to terminate the License Agreement by reason of an alleged future
default by OmniCorder under same shall be by reason of either: (1) the failure
by OmniCorder to pay the $300 fee for each complete DAT Breast Cancer Screening
System installed at a client site contemplated by Section ONE of the License
Agreement, as amended and clarified by Section 4 of this Settlement Agreement;
(2) the abandonment of License by OmniCorder as contemplated by Section FOUR of
the License Agreement; (3) the failure of OmniCorder to permit Anbar to inspect
its books and records, in accordance with Section TEN of the License Agreement;
or (4) OmniCorder's breach of its obligation to hold harmless and indemnify
Anbar, in accordance with the second to last paragraph of the License Agreement,
in respect of any third party claims which may arise as a result of OmniCorder's
use of the System as a medical screening device. Anbar acknowledges and agrees
that OmniCorder has no obligation to indemnify him in respect of his use of the
System.
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Notwithstanding anything to the contrary contained in the License
Agreement, any and all other future alleged defaults of the License Agreement,
however arising, on any other legal, factual or other basis, are hereby
irrevocably waived by Anbar as being a basis for terminating the License
Agreement. By this waiver, Anbar, however, does not in any respect waive his
future right to enforce any or all of his rights under the License Agreement;
but rather he waives only the right to use any such other alleged defaults as a
basis for seeking the termination of the License Agreement.
In addition, Anbar irrevocably agrees that in the event of any alleged
default by reason of: (1) a failure to pay the $300 fee; (2) the abandonment of
the License; (3) the failure of OmniCorder to permit Anbar to inspect its books
and records in accordance with Section TEN of the License Agreement; or (4) the
breach of the obligation to hold harmless and indemnify Anbar, in accordance
with the second to last paragraph of the License Agreement, all as above
contemplated, Anbar shall provide OmniCorder with written notice of such default
and an opportunity to cure same for a period of no less than 45 days after
receipt of such notice of default. Moreover, Anbar further irrevocably waives
any right to unilaterally terminate the License Agreement should any such
alleged default continue beyond said 45 day cure period; rather the parties
irrevocably agree to arbitrate their dispute with respect to any such alleged
default in accordance with the procedures set forth in Section 7 hereof,
granting to the arbitrator the sole and exclusive right to determine whether or
not the alleged default has, in fact, occurred. If OmniCorder determines in good
faith that a default shall not have occurred and the arbitrator finds in favor
of Anbar, OmniCorder shall be afforded a reasonable opportunity to cure same
following such decision (the "2nd Cure Period"). If the arbitrator finds that a
default did occur and that OmniCorder lacked a reasonable basis for taking the
action or omitting to take an action that resulted in the default, then
OmniCorder shall pay Anbar's reasonable attorney's fees and disbursements
incurred in connection with such arbitration; if the arbitrator finds that a
default did not occur and that Anbar lacked a reasonable basis for claiming such
default, then Anbar shall pay OmniCorder's reasonable attorney's fees and
disbursements incurred in connection with such arbitration; in all other cases
the parties shall bear their respective attorneys fees and disbursements. While
any such arbitration proceeding is continuing and until the expiration of the
2nd Cure Period, the License Agreement shall remain in full force and effect.
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7. Arbitration. Any dispute, controversy or claim arising out of or in
connection with this Settlement Agreement, or the License Agreement shall be
determined and settled by binding arbitration in the following County in the
State of New York conducted by the American Arbitration Association (the "AAA")
in accordance with the then existing commercial arbitration rules, regulations,
practices and procedures of the AAA: Erie County for all arbitrations commenced
by Anbar and Suffolk County for all arbitrations commenced by OmniCorder;
provided, however, that all arbitrations involving a dispute pertaining to the
jurisdiction of or a determination by the Sub-Committee (as defined in paragraph
9 hereof), shall be commenced only in Suffolk County. The arbitration
proceedings shall be conducted before a single arbitrator who will be selected
by agreement of the parties from a list provided by the AAA. If the parties
cannot agree upon the selection of an arbitrator, a neutral arbitrator shall be
appointed by the AAA from a list of arbitrators acceptable to OmniCorder and
Anbar. No action of law or suit in equity based upon any claim arising out of or
related to this Settlement Agreement shall be instituted in any court except (i)
an action to compel arbitration pursuant to this paragraph; (ii) an action to
enforce the arbitration award rendered in accordance with this paragraph; or
(iii) an action brought in aid of arbitration pursuant to Article 75 of New
York's Civil Practice Law and Rules. Any decision rendered by the arbitrator
shall be final, conclusive and binding upon the parties to the arbitration and
may be enforced by the judgment and order of the Supreme Court of the State of
New York, and the parties hereto hereby waive any objection to such jurisdiction
or venue in any such proceeding commenced in such court. Except as hereinbefore
provided, OmniCorder and Anbar will each pay one-half of the arbitrator's fees.
8. OmniCorder's Right to Sub-License. Section "NINE: SUB-LICENSING"
("Section NINE") of the License Agreement is hereby amended to read in its
entirety as follows:
"SPONSOR has the right to sub-license the LICENSE to any and all parties
freely and without restriction, except that if SPONSOR shall seek to
sub-license the LICENSE to any present or former officer or director of
SPONSOR, or any affiliate thereof, then the terms and conditions of such
sub-license shall be on terms no less favorable to SPONSOR than could be
obtained by unaffiliated third parties. In addition, any sub-license to
such related party shall not be effected unless it is approved by a
majority of SPONSOR's disinterested directors. SPONSOR acknowledges and
agrees that SPONSOR's obligation to pay the Royalty Fee due to SCIENTIST
under SECTION ONE above shall accrue to SCIENTIST in respect of any DAT
Breast Cancer Screening System ("System") installed at client sites by
reason of any sub-licenses and that all sub-license agreements shall
include a provision obligating the sub-licensee to report any and all
Systems installed at client sites of the SPONSOR or the sub-licensee which
report shall be made to SCIENTIST by SPONSOR with payment of the requisite
Royalty Fee, annually on February 1st of each year. SPONSOR shall send to
Anbar a copy of each sub-license agreement upon its execution."
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9. Right to Use Patent. OmniCorder hereby grants to Anbar a non-exclusive,
non-transferable, world-wide, perpetual, royalty-free license to use the patent
previously transferred by Anbar to OmniCorder pursuant to the License Agreement
for his research purposes only and not for commercialization. In this regard,
Anbar agrees that in advance of applying for any research grant or third-party
funding for work under the patent, he will first provide OmniCorder with written
notice of such intent and if OmniCorder advises him in writing within 14 days
thereof that it intends to seek the same source of funding, Anbar will refrain
from seeking such funding. Anbar further agrees that he will not publish or
disclose in any manner the results of any such research under the patent to any
third party other than pursuant to the following procedure. Anbar will first
disclose the results, together with all other related information necessary to
make an informed decision, to a three-person subcommittee of OmniCorder's
Scientific Advisory Board (the "Sub-Committee"), initially consisting of Xxxx
Xxxxxxxxxx, Xxxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxx. Anbar covenants and agrees to
use his best efforts to accelerate the Sub-Committee's review process and to
accede to any reasonable request of the Sub-Committee in connection therewith.
If a majority of such Sub-Committee members agree with the scientific merit of
Anbar's results or are unable to reach a decision as to whether or not they
agree with the scientific merit of his results within 30 days after receiving a
copy of such results, together with the necessary related information
contemplated above, Anbar may proceed, if he so desires, to disclose and/or
publish his results in a scientific journal or at a scientific forum. If a
majority of such Sub-Committee members do not agree with the scientific merit of
his results, Anbar shall not publish or otherwise disclose in any manner the
results of such research. In the event that any of the Sub-Committee members are
unable or otherwise decline to serve in that capacity in the future, a
replacement Sub-Committee member, who shall not be a consultant to or employee
of OmniCorder, shall be chosen by the remaining Sub-Committee members from
OmniCorder's Scientific Advisory Board, subject to OmniCorder's and Anbar's
consent, which will not be unreasonably withheld or delayed. If Anbar violates
the non-disclosure provisions of this Section 9, OmniCorder shall have the right
to terminate the license herein granted to Anbar. Anbar hereby represents and
warrants to OmniCorder that there are four (4) scientific articles currently in
the process of being published by him regarding the patent referred to above and
that none of such articles mention OmniCorder, its officers, directors or
employees, the License or its products. As a courtesy to OmniCorder, Anbar
agrees to provide OmniCorder with copies of these articles as soon as they are
published. Based solely on such representation and covenant, OmniCorder agrees
that the publication of such articles shall not constitute a violation of
Anbar's obligations under this Section 9.
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10. No Disparaging Statements. Anbar, on the one hand, and OmniCorder,
including its officers, directors, employees and agents, on the other, agree not
to libel, slander or defame each other, or anyone associated with them. With
respect to the association with Anbar, OmniCorder agrees not to refer to Anbar
as anything but a founding scientist and/or shareholder.
11. Withdrawal of all Actions. Simultaneously with the execution of this
Settlement Agreement, the parties hereto shall execute a stipulation with a "so
ordered" endorsement (the "Stipulation") to be signed and entered by the Court,
forthwith. A copy of this Settlement Agreement shall be annexed to the
Stipulation. The Stipulation and this Settlement Agreement shall be construed
and interpreted as one document for all purposes. The Court's "so ordered"
endorsement of the Stipulation shall be deemed its approval of this Settlement
Agreement. The Stipulation also shall contain provisions dismissing with
prejudice and without costs the parties' causes of action and counterclaims,
including those counterclaims which have been dismissed, in the Action. Anbar
shall withdraw all Notices of Appeal which he has filed in the Action. The
parties hereto represent and warrant that they shall not initiate or file any
litigation, complaint, cause of action, claim, counterclaim or cross-claim
against each other which has as its basis the facts and/or the causes of action
or counterclaims alleged in the Action.
12. Modification. No modification, variation, addition to or amendment of
this Settlement Agreement and no waiver of any right under this Settlement
Agreement shall be of any force or effect unless in writing and duly executed by
all parties to this Settlement Agreement.
13. Legal Fees. The parties hereto agree that all legal fees and other
expenses incurred in connection with the Action and this Settlement Agreement
shall be paid by the party incurring such expenses.
14. Headings. The headings of the sections herein are for convenience of
reference only and are not to be considered in construing this Settlement
Agreement.
15. Severability. If any provision of this Settlement Agreement is deemed
invalid or unenforceable by a competent court of law, that invalidity or
unenforceability shall not affect any other provision of this Settlement
Agreement and the rest of the Settlement Agreement shall nevertheless remain in
full force and effect as though the invalid or unenforceable provision was not
contained in the original Settlement Agreement.
16. Notices. All notices, requests, demands and other communications
hereunder shall be hand-delivered (with written receipt therefore) or sent by
U.S. certified mail, return receipt requested, or by a reputable overnight
carrier to the following:
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(a) Any notice to OmniCorder shall be addressed as follows:
Xx. Xxxx Xxxxx
OmniCorder Technologies, Inc.
00 Xxxx Xxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
with a copy to:
Xxxx Xxxxxx, Esq.
Xxxxxx & Eilen LLP
00 Xxxxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
(b) Any notice to Anbar shall be addressed as follows:
Xx. Xxxxxxx Xxxxx
000 Xxxx Xxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Kavinoky & Xxxx, LLP
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
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17. Entire Agreement. This Settlement Agreement, along with the License
Agreement, as modified by this Settlement Agreement, constitutes the entire
agreement between the parties and supersedes all prior agreements, negotiations
and understandings between them pertaining to the subject matter thereof, except
that the following four agreements shall also remain in full force and effect:
(i) the Stockholders' Agreement among OmniCorder, Dr. Anbar and other OmniCorder
stockholders; (ii) the Confidentiality Agreement between OmniCorder and Dr.
Anbar; (iii) the Stock Purchase Agreement between OmniCorder and Dr. Anbar; and
(iv) the Purchaser's Questionnaire completed by Dr. Anbar. This Settlement
Agreement may not be modified except by a writing signed by all parties. Nothing
in this Settlement Agreement shall, or is intended to, effect the rights of the
State University of New York at Buffalo under whatever agreements it has with
OmniCorder.
18. Counterparts. This Settlement Agreement may be executed in fax
counterparts, each of which shall be deemed an original for all purposes and
both of which shall together constitute one and the same instrument. This
Settlement Agreement and the rights of the parties hereto shall be construed
according to the internal laws of the State of New York without regard to
conflict of laws. The terms of this Settlement Agreement shall be deemed
severable.
19. Binding Impact. This Settlement Agreement shall bind and inure to the
benefit of the parties, their respective affiliates, subsidiaries, predecessors,
successors, assigns, agents, officers, directors, shareholders, employees and
legal representatives, and for any other partnerships, corporations, sole
proprietorships or other entities owned or controlled by any of them.
OMNICORDER TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxx /s/ Xxxxxxx Xxxxx
------------------------ --------------------------
Xxxx Xxxxx Xx. Xxxxxxx Xxxxx
President
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