SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (the "Agreement") is made and
entered into this 28th day of June, 2005 (the "Effective Date") by and between
Transol Corporation Ltd., an Australian limited corporation ("Transol Corp."),
and Transol USA, Inc., a Nevada corporation ("Transol USA") (collectively and
severally "Transol") and Xxxxxx, Inc., a Delaware corporation ("Xxxxxx").
Transol and Xxxxxx are referred to collectively as the "Parties."
NOW, THEREFORE, in consideration of the mutual covenants expressed herein
and other good and valuable consideration, including without limitation the
settlement of disputed claims, the receipt and sufficiency of which are hereby
acknowledged, the Parties to this Agreement hereby agree as follows:
1. a) For the purposes of this Agreement, the term "Subject Claims" means
i) All claims of U.S. Patent 6,188,329 ("'329 patent"),
ii) All claims of U.S. Patent 6,754,663 ("'663 patent"), and
iii) All claims substantially similar to any one of the claims of
either the `329 or the `663 patent, and either:
a. appearing in a US or foreign patent issued before or
after the Effective Date which claims priority either
to US provisional application Ser. 60/109,731, filed
November 23, 1998, or any patent or patent application
claiming priority to US provisional application Ser.
60/109,731, or
b. added, before or after the Effective Date, by way of
reissue, reexamination, or in any other manner, to a US
or foreign patent which claims priority either to US
provisional application Ser. 60/109,731, filed November
23, 1998, or any patent or patent application claiming
priority to US provisional application Ser. 60/109,731.
b) For the purposes of this Agreement, the term "Subject Claims" does
not include:
i) All claims of the following issued patents
A. U.S. Patent 6,647,361
B. U.S. Patent 6,573,929
C. U.S. Patent 6,281,808
and
ii) Any claim substantially similar to any one of the claims of
any of the patents listed in Paragraph 1(b)(i) above or not
substantially similar to any one of the claims of either the
`329 or the `663 patent and either:
A. appearing in a US or foreign patent issued before or
after the Effective Date which claims priority either
to US provisional application Ser. 60/109,731, filed
November 23, 1998, or any patent or patent application
claiming priority to US provisional application Ser.
60/109,731, or
B. added before or after the Effective Date, by way of
reissue, reexamination, or in any other manner to a US
or foreign patent which claims priority either to US
provisional application Ser. 60/109,731, filed November
23, 1998, or any patent or patent application claiming
priority to US provisional application Ser. 60/109,731.
2. (a) Xxxxxx covenants for itself, its successors and assigns not to xxx
or otherwise to pursue claims, and not to threaten to xxx or otherwise pursue
claims, in the U.S. or elsewhere, against Transol, any of its subsidiaries, or
any direct or indirect customer of or vendor to Transol, for infringement
(including direct infringement, contributory infringement, and/or infringement
by inducement) of any of the Subject Claims, based in whole or in any part on
the manufacture, use, sale, resale, offer for sale or importation of any
product, service, or method of operation produced by or for Transol now or at
any time in the future, or any component(s) thereof.
(b) For so long as any claim of the `663 patent remains which has not been
finally held to be invalid or unenforceable (including exhaustion of all
possible appeals), the foregoing covenant set out in subparagraph (a) shall not
include any product, service or method of operation, or any component(s)
thereof, produced by or for Transol after the Effective Date that enables a
system to display video including a plurality of image sequences that are
synchronized such that they provide simultaneous independent views of the same
traffic violation. For purposes of construing this Paragraph 2(b), the parties
agree that the claim constructions adopted in the April 26, 2005 Order (the
"Order") (a copy of which is attached hereto as Attachment A) shall apply, and
Xxxxxx stipulates that, under those claim constructions, Transol's current
commercially available US product(s), service(s) and/or method(s) of operation
do not enable a system to display video including a plurality of image sequences
that are synchronized such that they provide simultaneous independent views of
the same traffic violation. By entering into this Agreement, Xxxxxx does not
accept the Order and in no way concedes the correctness or legal validity of the
Order.
3. (a) Except as set forth in subparagraph 3(b) below, the above covenant
not to xxx set forth in paragraph 2(a), as limited in paragraph 2(b) (the
"Covenant") may not be assigned or transferred by Transol whether by operation
of law or otherwise.
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(b) In the event of a transaction involving the acquisition of Transol, of
substantially all of Transol's assets or substantially all of Transol's assets
relating to Transol's business activity in the area of automated traffic
enforcement systems by a third party, including any reorganization (as defined
by Section 181 of the California Corporations Code) of Transol (a "Transol
Sale"), the Covenant may be assigned or transferred by Transol to Transol's
successor in interest. However, in the event of a Transol Sale, the Covenant
(whether or not assigned or transferred to a third party) shall be limited in
its application to bar Nestor from asserting patent infringement claims only to
the extent those claims are based on the manufacture, use, sale, resale, offer
for sale or importation of products, services, or methods of operation
commercially produced by or for Transol prior to the date of the Transol Sale or
substantially similar to those that had been commercially produced by or for
Transol prior to the date of the Transol Sale.
4. Xxxxxx does hereby for itself, its successors and assigns fully and
forever release and discharge Transol, its parent, subsidiaries and affiliates,
along with the directors, officers, employees and agents of any of them from any
and all claims, actions, and causes of action, whether known, unknown or
unknowable, past or present, up to and through the Effective Date and does
hereby for itself, its successors and assigns fully and forever release and
discharge all direct and indirect customers and vendors of Transol from any and
all claims, actions and causes of action arising out of or relating to the
manufacture, use, sale, offer for sale or importation of any Transol product,
service or method of operation by such customers and vendors up to and through
the Effective Date. However, nothing in this Agreement shall apply or be
construed to prevent or bar Nestor from raising, in any future action brought
against Xxxxxx, its successors or assigns, any legal or equitable defense or
from challenging the validity and/or enforceability of any Transol patent by way
of counterclaim, cross-claim, third party claim or otherwise, or from asserting
any claim arising after the Effective Date.
5. Transol does hereby for itself, its successors and assigns fully and
forever release and discharge Xxxxxx its parent, subsidiaries and affiliates,
along with the directors, officers, employees and agents of any of them from any
and all claims, actions, and causes of action, whether known, unknown or
unknowable, past or present up to and through the Effective Date and does hereby
for itself, its successors and assigns fully and forever release and discharge
all direct and indirect customers and vendors of Xxxxxx from any and all claims,
actions and causes of action arising out of or relating to the manufacture, use,
sale, offer for sale or importation of any Xxxxxx product, service or method of
operation by such customers and vendors up to and through the Effective Date.
However, nothing in this Agreement shall apply or be construed to prevent or bar
Transol from raising, in any future action brought against Transol, its
successors or assigns, any legal or equitable defense or from challenging the
validity and/or enforceability of any Xxxxxx patent by way of counterclaim,
cross-claim, third party claim or otherwise, or from asserting any claim arising
after the Effective Date.
6. Notwithstanding anything to the contrary in this Agreement, the Parties
agree that the foregoing releases are to be interpreted liberally to effectuate
the maximum protection for both Xxxxxx and Transol. The parties agree that they
shall be deemed to have expressly waived any and all provisions, rights, and
benefits conferred by any law of any state or territory of the United States, or
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principle of common law, which is similar, comparable and equivalent to
California Civil Code Section 1542, including, but not limited to that section,
which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
7. Immediately upon execution of this Agreement, the parties shall file a
stipulation of dismissal in the lawsuit pending in the U.S. District Court for
the Central District of California, Xxxxxx, Inc. v. Transol USA, Inc., et al.,
Civil Action No. 03-8562 (the "Action"), and the parties shall also file a
stipulation seeking to vacate the Order. Without prejudice to Transol's position
that the Order is legally sound and correct, Transol agrees as part of this
settlement that its counsel will endorse such stipulation and that it will not
oppose entry thereof. Attached hereto as Attachment B-1 is a copy of the
Dismissal of Action and Stipulation to Vacate Order to be filed immediately upon
execution of this Agreement. Nothing in this Agreement is in any way conditioned
on the Court vacating the Order. In the event the Court denies the Stipulation
to Vacate, Xxxxxx shall be provided with 5 days to apply to the Court to vacate
the Order. If Xxxxxx is not successful, the parties shall endorse and file a
Stipulation of Dismissal with all references to vacating the Order deleted.
Attached hereto as Attachment B-2 is a copy of the Stipulation of Dismissal of
Action to be filed.
8. The Parties each agree that the statement in Attachment C shall be the
sole statement made by them about this Agreement and the settlement of the
Action and that neither party shall make any other statement or disclosures
about this Agreement, the underlying litigation, or the settlement of the
Action. The terms of this Agreement shall remain confidential and shall not be
publicized by any Party without the prior written consent of the other Parties.
Notwithstanding the preceding two (2) sentences, neither Transol nor Xxxxxx
shall be prohibited by anything in this Agreement from (i) disclosing in
confidence to individual third parties with a good faith reason to know, the
existence and settlement of the Action, (ii) preparing and filing all necessary
or appropriate documents (including a copy of this Agreement) with the SEC, IRS,
USPTO and other US and foreign government agencies and the like, (iii)
responding to any lawful order of a court or other governmental tribunal having
jurisdiction over it, or (iv) providing adequate information to shareholders of
a Party about the outcome of the litigation, the nature of this Agreement, and
the consideration exchanged hereunder.
9. This Agreement constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof and supersedes any and
all prior understandings, whether written or oral, and may be changed, modified,
or amended only by an instrument in writing duly executed by each of the parties
hereto, which instrument refers to this Agreement by name and date.
10. Each of the Parties represents and warrants that it has all the
requisite power and authority to enter into this Agreement, and has duly
authorized by all necessary action the execution and delivery hereof by the
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officer or individual whose name is signed on its behalf below; that the
execution and delivery of this Agreement and the performance of its obligations
hereunder do not and will not conflict with or result in a breach of or a
default under its organizational instruments or any other agreement, instrument,
order, law or regulation applicable to it or by which it may be bound; and that
this Agreement has been duly and validly executed and delivered by it and
constitutes its valid and legally binding obligation, enforceable in accordance
with its terms. Xxxxxx represents and warrants that it is the sole and exclusive
owner of each patent containing the Subject Claims with full and unencumbered
rights to grant the Covenant and otherwise enter into and perform this
Agreement.
11. This Agreement shall be governed by the laws of the State of
California, without regard for its choice-of-law provisions. In any action
arising out of or relating to this Agreement, venue shall lie solely in a court
of competent jurisdiction sitting in the County of Los Angeles, California,
United States of America.
12. In the event of a breach of this Agreement, the non-breaching party
shall be entitled to all costs incurred by it in pursuing its rights, including
full reimbursement of attorney fees, expert fees, and other litigation expenses.
13. This Agreement may be executed in one or more counterparts, including
by facsimile copies, each of which shall be deemed to be an original, and all of
which together or any of which shall constitute one and the same Agreement.
14. Xxxxxx agrees to require any assignee, purchaser or licensee of any
patent owned by Xxxxxx that contains a Subject Claim to abide by the terms of
the Covenant as a condition precedent to such assignment, sale, license, grant
or other conveyance of any such patent, and any assignment, sale, license, grant
or conveyance of any rights in any such patent in violation of this Paragraph 14
shall be null and void ab initio.
15. So long as this agreement remains in effect, and unless Transol faces a
reasonable apprehension of suit based on the Subject Claims, Transol will not
initiate any proceeding (including any request for reexamination by the United
States Patent and Trademark Office) to challenge the validity or enforceability
of any patent that contains a Subject Claim or voluntarily cooperate in any such
proceeding with any other person or entity that initiates such a challenge,
provided that Transol shall provide cooperation with any person or entity when
required by law.
[Signatures on Following Page]
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed in duplicate originals by its duly authorized representatives and
to be made as of the date first hereinabove written.
XXXXXX, INC. TRANSOL USA, INC.
By: By: /s/ Xxx Xxxxxx
/s/Xxxxxxx X. Xxxxxxx
------------------------------------- -------------------------------------
Printed Name: Printed Name:
Xxxxxxx X. Xxxxxxx Xxx Xxxxxx
------------------------------------- -------------------------------------
Title: Title:
President & Chief Executive Officer President
------------------------------------- -------------------------------------
Date: Date:
28 June 2005 June 28, 2005
------------------------------------- -------------------------------------
TRANSOL CORPORATION LIMITED
By: /s/ Xxx Xxxxxx
-------------------------------------
Printed Name:
Xxx Xxxxxx
-------------------------------------
Title: Managing Director
-------------------------------------
Date: June 28, 2005
------------------------------------
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ATTACHMENT A
April 26, 2005 Order
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ATTACHMENT B-1
This Stipulation of Dismissal and Proposed Order Dismissing Action and
Withdrawing April 26, 2005 Order of Summary Judgment is made with reference to
the following facts:
WHEREAS, plaintiff and counterclaim defendant Xxxxxx, Inc., filed this
action alleging infringement by Defendant Transol, USA, Inc. of U.S. Patents
6,188,329 and 6,754,663;
WHEREAS defendant and counterclaim plaintiff Transol USA Inc. filed
counterclaims against plaintiff Xxxxxx, Inc.;
WHEREAS on April 26, 2005, the Court issued an Order granting defendant's
motion for summary judgment;
WHEREAS no final judgment has yet been entered in favor of either party to
the action;
WHEREAS on June 28, 2005 the parties reached a settlement of their
disputes, which has been documented in a written agreement (the "Settlement
Agreement");
NOW, THEREFORE the parties hereby stipulate and agree that:
1. Plaintiff Xxxxxx Inc. dismisses this action against defendant Transol
USA, Inc. with prejudice.
2. Defendant Transol USA, Inc. dismisses its Counterclaim against
plaintiff Xxxxxx Inc. without prejudice, reserving its right to assert
any and all claims and defenses as to any Xxxxxx patent in the event
Xxxxxx or any assignee or licensee of Xxxxxx asserts any patent
infringement claims against Transol USA, Inc. in the future, except
that Transol, USA Inc. shall not assert any claim for attorneys' fees
or costs arising from the present action.
3. Each party shall bear and be responsible for its own costs and
attorneys' fees.
4. The Court hereby withdraws and vacates its April 26, 2005 Order
granting defendants' motion for summary judgment.
ORDER
It is so Ordered.
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ATTACHMENT B-2
This Stipulation of Dismissal and Proposed Order Dismissing Action is made
with reference to the following facts:
WHEREAS, plaintiff and counterclaim defendant Xxxxxx, Inc., filed this
action alleging infringement by Defendant Transol, USA, Inc. of U.S. Patents
6,188,329 and 6,754,663;
WHEREAS defendant and counterclaim plaintiff Transol USA Inc. filed
counterclaims against plaintiff Xxxxxx, Inc.;
WHEREAS on April 26, 2005, the Court issued an Order granting defendant's
motion for summary judgment;
WHEREAS no final judgment has yet been entered in favor of either party to
the action;
WHEREAS on June 28, 2005 the parties reached a settlement of their
disputes, which has been documented in a written agreement (the "Settlement
Agreement") dated as of June 28, 2005;
NOW, THEREFORE the parties hereby stipulate and agree that:
1. Plaintiff Xxxxxx Inc. dismisses this action against defendant Transol
USA, Inc. with prejudice.
2. Defendant Transol USA, Inc. dismisses its Counterclaim against
plaintiff Xxxxxx Inc. without prejudice, reserving its right to assert
any and all claims and defenses as to any Xxxxxx patent in the event
Xxxxxx or any assignee or licensee of Xxxxxx asserts any patent
infringement claims against Transol USA, Inc. in the future, except
that Transol, USA Inc. shall not assert any claim for attorneys' fees
or costs arising from the present action.
3. Each party shall bear and be responsible for its own costs and
attorneys' fees.
ORDER
It is so Ordered.
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ATTACHMENT C
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Transol USA, Inc. and Xxxxxx, Inc. have settled the patent infringement
litigation between them that was pending in the United States District Court for
the Central District of California at Los Angeles. The terms of the settlement
are confidential. Both parties are satisfied with the outcome of the litigation
and the settlement, under which each party will be free to market its automated
traffic enforcement systems and services.
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