SETTLEMENT AGREEMENT WITH MUTUAL RELEASES
Exhibit 10.24
SETTLEMENT AGREEMENT WITH MUTUAL RELEASES
The parties to this Settlement Agreement with Mutual Releases (the “Agreement”) are
Xxxxxxx International, Inc. (“KII”) and Xxxxxxx Electronics, Inc. (“KEI”) (XXX and XXX are
collectively referred to hereinafter as “Xxxxxxx”) and XStream Systems, Inc. (“XStream”).
RECITALS
X. Xxxxxxx and XStream are presently involved in a dispute regarding their respective
rights and obligations set forth in the following documents:
| (i) | Term Loan Agreement and Credit Note each entered into by and between KII and XStream on or about September 6, 2006; | ||
| (ii) | Supplier Agreement entered into by and between KEI and XStream on or about September 6, 2006; and | ||
| (iii) | Amendment to Supplier Agreement entered into by and between KEI and XStream on or about July 11, 2008. |
B. The business dealings outlined in and arising from the above-referenced documents are
hereinafter collectively referred to as the “Transaction.”
C. On or about September 16, 2008 Xxxxxxx initiated a lawsuit against XStream in the United
States District Court for the Southern District of Indiana, Evansville Division under Cause number
3:08-cv-00135-RLY-WGH, relating to the Transaction and in which XStream asserted counterclaims
against Xxxxxxx (the “Action”).
X. Xxxxxxx and XStream desire amicably and equitably to settle all matters pertaining to all
claims arising from the Transaction against one another, including all claims that are currently
asserted or could be asserted in the Action.
NOW, therefore, the parties hereto agree as follows:
1. The recitals hereinabove stated are a part of this Agreement.
2. Contemporaneously with the execution of this Agreement, XStream is providing to Xxxxxxx’x
counsel an executed Agreed Judgment in favor of Xxxxxxx and against XStream in the amount of Three
Million Two Hundred Thousand Dollars ($3,200,000.00) in the form of the attached Exhibit A (the
“Agreed Judgment”).
3. Contemporaneously with the execution of this Agreement, XStream is providing to Xxxxxxx’x
counsel an executed Stipulation of Dismissal, with prejudice, of XStream’s Counterclaims in the
form of the attached Exhibit B. The parties acknowledge and agree that Xxxxxxx’x counsel will
immediately execute and file in the Action the Stipulation of Dismissal of the Counterclaims.
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4. XStream will make payments to Xxxxxxx, through its counsel, via wire transfer or certified
funds according to the schedule set forth below. Time is of the essence with respect to the
timeliness of such payments. If any of the dates set forth below falls on a weekend or on a legal
holiday, payment shall be made on the next business day:
| (a) | One (1) payment of Six Hundred Thousand Dollars ($600,000.00) to be made on or before December 31, 2009; and | ||
| (b) | One (1) final payment of Two Million, Six Hundred Thousand Dollars ($2,600,000.00) to be made on or before January 31, 2010. |
5. Attached hereto as Exhibit D is a list of inventory, including agreed upon value, currently
in Xxxxxxx’x possession as well as any machinery, equipment, designs and tooling developed or
purchased in their entirety with the proceeds of the Term Loan (collectively the “Inventory”).
Upon remittance of the Final Payment, XStream shall take ownership of any remaining Inventory.
Xxxxxxx makes no warranties whatsoever regarding the Inventory, and all warranties of any kind are
expressly disclaimed, including, without limitation, the implied warranties of merchantability and
fitness for any particular purpose. Xxxxxxx shall retain possession of the Inventory free of
charge until April 30, 2010. After April 30, 2010, but before May 30, 2010 (the “Shipment Period”),
unless otherwise agreed in writing by Xxxxxxx, Xxxxxxx will package, crate and ship (all at
XStream’s sole risk, cost and expense) F.O.B. Xxxxxxx’x plant, Jasper, Indiana, the Inventory to
XStream. Unless otherwise agreed in writing by Xxxxxxx, XStream shall be responsible for arranging
and contracting with the carrier for pick up of all of the Inventory from Xxxxxxx during the
Shipment Period, failing which Xxxxxxx shall be entitled to dispose of the Inventory in any manner
as it chooses, in its sole discretion, and XStream shall be liable to Xxxxxxx for any and all costs
and expenses associated with such disposal.
6. After XStream makes the initial $600,000 payment to Xxxxxxx, the parties shall begin
discussions to develop terms under which the parties may continue to buy and sell XT250 products
from one another on a going forward basis. The parties agree to negotiate in good faith.
Notwithstanding such good faith negotiations, in no case are the parties bound or obligated to
enter into an agreement regarding the supply of XT250 products, and in no case are XStream’s
payment obligations under this Agreement tied to or conditional upon any agreement (or lack
thereof) regarding the supply of XT250 products.
7. Xxxxxxx’x counsel will hold the Agreed Judgment in its file and will not file the Agreed
Judgment in the Action so long as XStream timely provides Xxxxxxx’x counsel with the payments set
forth in Paragraph 4 above. However, in the event XStream fails to timely provide Xxxxxxx’x counsel
with either of the payments, the parties acknowledge and agree that Xxxxxxx’x counsel is authorized
to immediately file the Agreed Judgment in the Action and pursue collection thereof. The parties
further acknowledge and agree that in the event XStream timely provides Xxxxxxx’x counsel with
payments set forth in Paragraph 4 above, Xxxxxxx’x counsel will destroy the Agreed Judgment and the
parties will file in the Action a Stipulation of Dismissal, with prejudice, of Xxxxxxx’x claims.
8. The parties agree to immediately file in the Action a Joint Motion to Stay Proceedings, in
the form of the attached Exhibit C.
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9. XStream, in consideration of the premises, the promises set forth in this Agreement, and
each act done pursuant to this Agreement, on behalf of itself and each of its parents,
subsidiaries, affiliates, officers, directors, shareholders, partners, attorneys, employees,
agents, representatives, insurers, predecessors, successors or assigns, releases and discharges
Xxxxxxx and each of its respective parents, subsidiaries, affiliates, officers,
directors, shareholders, partners, attorneys, employees, agents, representatives, insurers,
predecessors, successors or assigns, absolutely and forever, of and from any actions, claims,
debts, defenses, liabilities, costs, attorneys fees, suits at law or equity and demands whatsoever
that XStream had, has, may have or may have had, whether contingent or liquidated, whether known or
unknown, arising or occurring prior to the date of this Agreement, arising out of the Transaction
and/or relating to the Action.
10. Xxxxxxx, in consideration of the premises, the promises set forth in this Agreement, and
each act done pursuant to this Agreement, on behalf of itself and each of its parents,
subsidiaries, affiliates, officers, directors, shareholders, partners, attorneys, employees,
agents, representatives, insurers, predecessors, successors or assigns, releases and discharges
XStream and each of its parents, subsidiaries, affiliates, officers, directors, shareholders,
partners, attorneys, employees, agents, representatives, insurers, predecessors, successors or
assigns of and from any actions, claims, debts, defenses, liabilities, costs, attorneys fees, suits
at law or equity and demands whatsoever that Xxxxxxx had, has, may have or may have had, whether
contingent or liquidated, whether known or unknown arising or occurring prior to the date of this
Agreement, arising out of the Transaction and/or relating to the Action.
11. The parties acknowledge and agree that the releases set forth in paragraphs 9 and 10 above
do not release them from their respective Rights and obligations arising from this Agreement.
12. This Agreement is entered into by the parties for the purpose of compromising and settling
the dispute arising from the Transaction which resulted in the Action. This Agreement does not
constitute, and shall not be construed as an admission by any party of the truth or validity of any
claims asserted or contentions advanced by any other party.
13. The parties further covenant and agree that this Agreement may be pleaded or asserted by
or on behalf of any party hereto as a defense and complete bar to any action or claim that may be
brought against any party hereto by any other party hereto, or anyone acting on their behalf, with
respect to any of the matters within the scope of this Agreement, excepting only the obligations of
the parties under this Agreement. This full and final release shall cover and shall include and
does cover and include any and all known or future damages not now known to any of the parties
hereto, but which may later develop or be discovered, including the effects and consequences
thereof, and including all causes of action therefore which arise out of the same facts as were
alleged or could have been alleged in the Action.
14. The parties acknowledge and agree that each of them shall bear its own attorney’s fees and
expenses incurred in connection with the Action and the consummation of this Agreement.
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15. The parties hereto acknowledge, covenant and agree that each of them has read this
Agreement and understands its terms, including the legal consequences thereof, and that in offering
to make, and in making, executing and delivering this Agreement, none of them was acting under any
duress, undue influence, misapprehension or misrepresentation by any party hereto or any agent,
attorney or representative of any party and that this Agreement was made, executed and delivered as
the free and voluntary act of each party and was given in good faith on the part of each party with
full knowledge of all relevant facts and circumstances. The parties further acknowledge that each
of them was represented by counsel in the Action.
16. The undersigned persons if executing this Agreement on behalf of a corporation, another
legal entity, or principals represent and certify that they are duly elected officers or
representatives of said corporation or other legal entity or are acting as agents for the
principals and are fully empowered to execute and deliver this Agreement on behalf of said
corporation, other legal entity or principals and that said principals have full corporate or other
capacity to release the parties identified above and all necessary corporate action or principal
approval for the making of this Agreement has been taken and done.
17. Except as otherwise provided, this Agreement and the Exhibits attached hereto contains the
entire agreement between the parties hereto and no representations or promises, other than those
contained or referred to herein, have been made by any party to any other party to secure the
execution of this Agreement, either before or after the dispute arose. However, the parties
acknowledge and agree that to the extent that any document is required to be executed by any party
to effectuate the purposes of this Agreement, the party will execute and deliver such document or
documents to the requesting party.
18. This Agreement shall be governed by Indiana law and any question or dispute arising
hereunder shall be construed or determined according to such law. The parties acknowledge and
agree that any and all disputes arising from this Agreement, whether based upon performance,
non-performance, or the interpretation of this Agreement, shall be filed in and decided by the
United States District Court for the Southern District of Indiana, Evansville Division. Each of the
parties consent to the personal jurisdiction of this Court for purposes of any action brought to
resolve disputes arising from the Agreement. If any action is brought to enforce this Agreement,
to seek damages for its breach, or is brought in connection with any dispute arising out of this
Agreement or the claims that are the subject of this Agreement, the prevailing party shall be
entitled to recover damages, attorney’s fees and other costs incurred in such litigation that they
may prove are the direct and proximate result of any breach hereof in addition to any other relief
to which that party or parties may be entitled by law.
19. The parties acknowledge and agree that they have had an equal opportunity to participate
in the drafting of the Agreement. Therefore, in any dispute over the construction or interpretation
of this Agreement, the parties agree and understand that this Agreement shall not be construed
against either party on the basis of authorship.
20. This Agreement may be executed in multiple counterparts, all of which when combined
constitute one original document.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement on the dates set forth
below.
| Xxxxxxx International, Inc. | ||||||
| By: | Xxxxx X. Xxxxx | |||||
| Its: | President & CEO | |||||
| Date: | 12-23-09 | |||||
| Xxxxxxx Electronics, Inc. | ||||||
| By: | Xxxxx Xxxxx | |||||
| Its: | VP Global Business Development | |||||
| Date: | 12-23-09 | |||||
APPROVED: |
||||||
| XXXXX & XXXXX, P.C. Attorneys for Xxxxxxx International, Inc. and Xxxxxxx Electronics, Inc. |
||||||
| By: | /s/ X. Xxxxx Xxxxxx | |||||
| X. Xxxxx Xxxxxx | ||||||
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| XStream Systems, Inc. | ||||||
| By: | A. R. Chidoni | |||||
| Its: | COO | |||||
| Date: | 12/23/09 | |||||
| APPROVED: | ||||||
| XXXXXX & XXXXXXXXX LLP
Attorneys for XStream Systems, Inc. |
||||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Xxxxx X. Xxxxxxx | ||||||
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