CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE
THIS CONFIDENTIAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE (the "Settlement
Agreement") is entered into this January 18, 2006 (the "Effective Date") by and
between Advanced BioPhotonics Inc. (f/k/a OmniCorder Technologies, Inc.), a
Delaware corporation, having its principal place of business at 000 Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxx Xxxx (the "Company") and Lockheed Xxxxxx
Corporation, a Delaware corporation, (f/k/a Lockheed Xxxxxx Xxxxxx Systems and
having its principal place of business at X.X. Xxx 000000, Xxxxxx, Xxxxx
("Lockheed")(Lockheed and Company are sometimes referred to herein individually
as "party" and collectively as the "parties").
I. RECITALS
A. WHEREAS, on or about September 29, 1998, the Company and Lockheed entered
into an Exclusive License Agreement concerning Enhanced Quantum Well Infrared
Photodetector ("EQWIP") technology (hereinafter the "License Agreement" which is
attached hereto as Exhibit A);
B. WHEREAS, on or about June 24, 1998, the Company and Lockheed entered into a
Definitive Contract No. 6249801 concerning the fabrication of Focal Plan Arrays
(hereinafter the "Definitive Contract" which is attached hereto as Exhibit B);
and
C. WHEREAS, the parties desire to terminate the License Agreement, together with
the underlying license, the Definitive Contract and any other agreement or
understanding between the parties; to settle, pursuant to the terms and
conditions set forth hereinbelow, all claims between them in any way related to:
the License Agreement, the license thereunder or the Definitive Contract, the
relationship between the parties or any claim to license fees or other monetary
consideration, and wish to terminate any relationship which may have existed
between the parties.
II. AGREEMENT
NOW, THEREFORE, the parties mutually agree as follows:
1. Consideration. Upon execution of this Settlement Agreement the Company shall:
A. Wire a one-time, fully paid up license fee of Two Hundred Twenty-Five
Thousand Dollar ($225,000) to Lockheed;
B. Execute and deliver to Lockheed a signed original of this Settlement
Agreement;
C. Issue Five Hundred Thousand (500,000) warrants, with such warrants
having an exercise price of Sixty-Five Cents ($0.65) per warrant; such warrants
shall expire on December 28, 2015 (the "Warrant Expiration Date"); and each
warrant shall be convertible into one share of the Company's common stock (the
"Warrants"); and
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D. Agree to the termination of all prior agreements and understandings
between Lockheed and the Company, pursuant to Section 4 of this Settlement
Agreement.
2. Consideration. Lockheed shall:
A. Execute and deliver to the Company a signed original of this Settlement
Agreement;
B. Accept the aforementioned payment and issuance of the Warrants as the
total consideration for the execution of this Settlement Agreement and the
release hereunder;
C. Agree to the termination of all prior agreements and understandings
between Lockheed and the Company, pursuant to Section 4 of this Settlement
Agreement.
3. Mutual Release of Claims.
A. Conditioned upon receipt of the consideration set forth in Section 1
hereof, Lockheed, on behalf of itself and on behalf of its parent corporation,
affiliates, subsidiaries, officers, directors, agents, representatives,
successors and assigns, hereby releases and forever discharges the Company and
its past and present affiliates, subsidiaries, officers, directors, agents,
successors and assigns (the "Lockheed Released Parties"), from any and all
claims, demands, obligations, losses, causes of action, costs, expenses,
attorneys' fees and liabilities of any nature whatsoever, whether based on
contract, tort, statutory or other legal or equitable theory of recovery,
whether known or unknown, which Lockheed has, had or claims to have against any
or all of the Lockheed Released Parties, including but not limited to any and
all claims which relate to, arise from, or are in any manner connected to: (i)
the Agreement; (ii) the Definitive Contract; or (iii) any claimed license fees
or other monetary consideration, whether accrued or not.
B. Conditioned upon termination of all prior agreements and understandings
between the Parties as set forth in Section 4 hereof, the Company, on behalf of
itself and its affiliates, subsidiaries, officers, directors, agents,
representatives, successors and assigns, hereby releases and forever discharges
Lockheed and its past and present affiliates, subsidiaries, officers, directors,
agents, successors and assigns (the "Company Released Parties"), from any and
all claims, demands, obligations, losses, causes of action, costs, expenses,
attorneys' fees and liabilities of any nature whatsoever, whether based on
contract, tort, statutory or other legal or equitable theory of recovery,
whether known or unknown, which the Company has, had, or claims to have against
the Company Released Parties, including but not limited to any and all claims
which relate to, arise from, or are in any manner connected to: (i) the License
Agreement; (ii) the Definitive Contract; or (iii) any claimed license fees or
other monetary consideration, whether accrued or not.
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4. Termination of Agreements. The parties hereto agree and confirm that, except
for this Settlement Agreement, any and all agreements and understandings,
written or oral, including but not limited to the License Agreement and
Definitive Contract, are hereby terminated and are of no further force and
effect. All parties hereto agree that all of the terms, conditions and
obligations, including those that are expressly agreed to survive termination in
each of the agreements or understandings, will in fact be terminated, and that
this Settlement Agreement supersedes any and all of the terms of the
aforementioned agreements and understandings. The parties expressly release each
other from any continuing rights, duties and/or obligations under any agreements
and Lockheed, together with its agents and representatives, shall make no
further claim for any compensation and the Company agrees to cease using any of
the EQWIP technology that is the subject of the patents referenced in the
License Agreement.
5. Covenant Not to Xxx. Each party covenants and agrees that it will not, at any
time hereafter, either directly or indirectly, initiate, assign, maintain or
prosecute, or in any way knowingly aid or assist in the initiation, maintenance
or prosecution of any claim, demand or cause of action at law or otherwise,
against the other party, its affiliates, officers or directors, for damages,
loss or injury of any kind arising from, related to, or in any way connected to
any activity with respect to which a release has been given pursuant to Section
3 of this Settlement Agreement.
6. Continuing Proprietary Information Obligations. Both parties will refrain
from any use or disclosure of the other party's proprietary or confidential
information or materials, unless such use is authorized in writing by an
appropriate officer of the disclosing party.
7. Confidentiality. The provisions of this Settlement Agreement will be held in
strictest confidence by Lockheed and the Company and will not be publicized or
disclosed in any manner whatsoever; provided, however, that: (i) the parties may
disclose this Settlement Agreement in confidence to their respective attorneys,
accountants, auditors, tax preparers, and financial advisors; (ii) the parties
may disclose this Settlement Agreement as necessary to fulfill standard or
legally required corporate reporting or disclosure requirements; and (iii) the
parties may disclose this Settlement Agreement insofar as such disclosure may be
necessary to enforce its terms or as otherwise required by law.
8. Nondisparagement. The parties agree not to disparage the other party's
officers, directors, employees, shareholders and agents, in any manner likely to
be harmful to the parties or their businesses, business reputations or personal
reputations; provided, that the parties may respond accurately and fully to any
question, inquiry or request for information when required by legal process.
9. Return of Proprietary Information. Within thirty (30) days after the
Effective Date, the parties agree to return to the other party, all of that
other party's documents (and all copies thereof) and other property that the
returning party has had in its possession at any time, including, but not
limited to, files, notes, drawings, records, business plans and forecasts,
financial information, specifications, computer-recorded information, and any
materials of any kind that contain or embody any proprietary or confidential
information of the other party (and all reproductions thereof), together with
any derivative documents created by the returning party, its subcontractors or
affiliates.
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10. Agreement Not an Admission of Liability. The parties hereto agree and
acknowledge that this Settlement Agreement is a compromise settlement of each
party's disputed claims and that the sums and covenants given in consideration
of this Settlement Agreement, as well as the execution of this Settlement
Agreement, shall not be construed to be an admission of liability on the part of
any party with respect to the disputed matters set forth above.
11. Entire Agreement. This Settlement Agreement represents and contains the
entire agreement and understanding between the parties hereto and supersedes any
and all prior oral and written agreements and understandings. No representation,
warranty, condition, understanding or agreement of any kind with respect to the
subject matter hereof, shall be relied upon by the parties except those
contained herein. This Settlement Agreement may not be amended or modified
except by an agreement signed by the party against whom enforcement of any
modification or amendment is sought.
12. Advice of Counsel. In entering into this Settlement Agreement, the parties
each acknowledge and represent that they have sought and obtained the legal
advice of their attorneys, who are the attorneys of their own choice. They
further represent that the terms of this Settlement Agreement have been
completely read by them, and that those terms are fully understood and
voluntarily accepted by them.
13. Counterparts. This Settlement Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed one and the same instrument.
14. No Assignment. The parties each represent and warrant to one another that
they have not sold, assigned, transferred, conveyed or otherwise disposed of any
claim or demand covered by this Settlement Agreement. Lockheed expressly
represents and warrants that it shall not pledge, encumber, sell, assign,
transfer, convey or otherwise dispose of any of the Warrants, provided that
Lockheed may exercise the Warrants at any time prior to the Warrant Expiration
Date.
15. Heirs, Successors and Assigns. This Settlement Agreement shall be binding
upon and inure to the benefit of the parties' respective legal heirs, successors
and assigns.
16. Severability. Should any portion (word, clause, phrase, sentence, paragraph
or section) of this Settlement Agreement be declared void or unenforceable, such
portion shall be considered independent and severable from the remainder, the
validity of which shall remain unaffected.
17. Attorneys Fees. If any action or proceeding is brought to enforce or
interpret any provision of this Settlement Agreement, the prevailing party shall
be entitled to recover as an element of its costs, and not its damages,
reasonable attorneys' fees to be fixed by the court. The prevailing party is the
party who is entitled to recover the costs of its action or proceeding, whether
or not such action or proceeding proceeds to final judgment. A party not
entitled to recover its costs of suit may not recover attorneys' fees. No sum
for attorneys' fees shall be counted in calculating the amount of a judgment for
purposes of determining whether a party is entitled to recover its costs or
attorneys' fees.
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18. Judicial Interpretation. Should any provision of this Agreement or any of
the representations made herein require judicial interpretation, it is agreed
that a court interpreting or construing the same shall not apply a presumption
that the terms hereof or thereof shall be more strictly construed against any
person by reason of the rule of construction that a document is to be construed
more strictly against the person who itself or through its agent prepared the
same, it being agreed that all parties have participated in the preparation of
this Agreement.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, Untied States of America,
without giving effect to the principles of conflicts of laws. This Agreement is
expressly acknowledged to be subject to all federal laws including, but not
limited to the Export Administration Act of the United States of America. No
conflict of interest rule or law that might refer such construction and
interpretation to the laws of another state, republic, or country shall be
considered.
This Agreement is performable in part in Dallas, Texas and the Parties mutually
agree that personal jurisdiction and venue shall be proper in the state and
federal courts situated in Dallas, Dallas County, Texas and agree that any
litigation dispute will be conducted solely in such courts.
20. Notices; Any payment, notice or other communication pursuant to this
Agreement shall be sufficiently made or given on the date of mailing if sent to
such Party by first class mail, postage prepaid, addressed to it at its address
below or as it shall designate by written notice given to the other Party:
In the case of Lockheed Xxxxxx: With a copy to:
Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxx, Esq.
Director AGC IP Technology Law Xxxx & Xxxxx, PLLC
Lockheed Xxxxxx Corporations South Side on Xxxxx, Xxxxx 000
X.X. Xxx 000000 Mail Stop 0000 Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000-0000 Xxxxxx, Xxxxx 00000
In the case of Company: With a copy to:
Xxxxx X. X'Xxxxxx Xxxxx X. Xxxxx, Esq.
President and CEO General Counsel and Secretary
Advanced BioPhotonics Inc. Advanced BioPhotonics Inc.
000 Xxxxxx Xxxxx, Xxxxx 000 000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000 Xxxxxxx, Xxx Xxxx 00000
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IN WITNESS WHEREOF, the parties have executed this Settlement Agreement by
their duly authorized representatives, to be effective as of the date first
written above.
LOCKHEED XXXXXX MISSILES ADVANCED BIOPHOTONICS INC.
AND FIRE CONTROL
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. X'Xxxxxx
------------------------------------ -----------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx X. X'Xxxxxx
------------------------------------ -----------------------------
Title: Director and Associate General Title: President and CEO
------------------------------------ -----------------------------
Counsel IP and Technology Law
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