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EXHIBIT 10.17
[GENERAL AUTOMATION LETTERHEAD]
December 19, 1997
Via Telecopy and Mail
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Xx. Xxxx X'Xxxxxx
Director
Worldwide Product Marketing
MDIS Limited
Boundary Way, Hemel Hempstead
Hertfordshire
HP2 7HU
UNITED KINGDOM
RE: SETTLEMENT AGREEMENT
GENERAL AUTOMATION, INC./MDIS LIMITED
REALITY X LICENSE AGREEMENT
Dear Xxxx:
This letter constitutes the Settlement Agreement between MDIS Limited
("MDIS") and General Automation, Inc. ("GAI"), regarding all matter relating to
the licensing of the Reality X Software by GAI pursuant to a certain license
agreement dated April 26, 1996 ("the License Agreement").
MDIS and GAI have held discussions and exchanged letters regarding the
terms and conditions of this settlement and this letter contains the final and
complete agreement between GAI and MDIS on the subject of Reality X and the
License Agreement. This Agreement contains provisions suggested by both MDIS and
GAI.
XXX and MDIS agree as follows:
1. Upon execution of this Settlement Agreement, the License Agreement
shall be canceled and considered by the parties as void and of no effect. XXX
and MDIS shall have no rights or duties still existent from that License
Agreement or from any amendments or modifications or arising from that License
Agreement or the subject matter thereof.
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2. XXX xxxxx, within twenty (20) business days from the execution of
this Settlement Agreement:
(a) Certify to MDIS that GAI has deleted and removed from its computer
libraries all source code and software supplied by MDIS relating to
Reality X; and
(b) GAI shall return all documentation and related materials and any
and all copies thereof associated with Reality X.
3. GAI certifies that GAI, and any subsidiary or associated company,
will not reverse engineer or recompile any of the unique features or unique
functions of Reality X based upon the access GAI has had to the Reality X
software and technology.
4. XXX and MDIS shall not disclose the terms, conditions or fact of
this Settlement Agreement, in whole or in part. The parties shall not take any
affirmative act to publicize this settlement or any portion thereof. Neither
party shall make any announcement, outside their companies, regarding the
termination of the relationship between XXX and MDIS on Reality X, or regarding
the circumstances leading up to the termination without the written consent of
the other party. Excepted from this provision on non-disclosure are orders of
courts and requirements of law that necessitate disclosure. In the event a press
release is required, GAI and MDIS shall consult and agree upon the language of
such a release.
5. XXX and MDIS shall remove any reference to the relationship between
the parties regarding Reality X from literature or web sites or other public
publications. This shall be done within twenty (20) business days of the
execution of this Agreement. If XXX or MDIS refer to their relationship in a
publication that would be costly to amend, then in that case only, the change
will be made at the next publication date of that document.
6. MDIS shall, within twenty (20) business days from the execution of
this Settlement Agreement:
(a) Return any and all documents, software, equipment or written
materials MDIS received from GAI;
(b) MDIS shall remove from its software libraries and other
depositories, including all its computers, any and all software, source
code, object code or other materials relating to Power95 and shall
certify to GAI in writing that MDIS has nothing left relating to
Power95; and
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(c) MDIS agrees that MDIS, its subsidiaries or associated companies or
others at their behest, has not and will not, in any way whatsoever,
reverse engineer or recompile any of the features or functions of
Power95, or any other GAI software made available to MDIS since
execution of the License Agreement.
7. GAI shall, in full and complete settlement of the differences
between the parties and in consideration of the promises and undertakings of
MDIS set forth in this Settlement Agreement, pay to MDIS the total sum of Four
Hundred Thousand Dollars ($400,000.00.) as follows:
[1] Thirty-Five Thousand Dollars ($35,000.00) on December 31, 1997;
[2] Thirty-Five Thousand Dollars ($35,000.00) on the last day of
January, 1998 and in each of the next Nine (9) succeeding months
through October 31, 1998;
[3] Fifteen Thousand Dollars ($15,000.00) on November 30, 1998.
8. GAI will make each payment by forwarding a check for the stated
amount, by airborne mail service, to the attention of Xxxx X'Xxxxxx at the
address stated herein. XXX will not pay any interest on any payment unless that
payment is made more than ten (10) business days after the due date of the
payment. Any interest charged shall be at the prime rate, but only on that
payment and only during the period it remains unpaid.
9. MDIS and GAI hereby release each other and give up any and all
claims and rights they may have against each other regarding Reality X, the
License Agreement, or the acts or actions that resulted from the License
Agreement. The parties intend this release to be the broadest form of release
permissible by law, it being the intention of both parties that from this day
forward, that they each shall not be able to make any claims, file any causes of
action or seek any consideration for or relating to the events surrounding their
relationship regarding Reality X and the License Agreement. This release binds
and releases, the officers, directors and employees and agents, subsidiaries and
associated entities of MDIS and of GAI. This release does not include the terms
and conditions of this Settlement Agreement.
10. This Settlement Agreement includes all the terms and conditions of
settlement between GAI and MDIS on Reality X, Power95 and the License Agreement.
Any prior writings, oral discussions between and amongst the parties or their
representatives are of no force or effect.
11. This Settlement Agreement shall be governed by the laws of the
State of California. Any disputes or litigation relating to this Settlement
Agreement shall occur only in
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Orange County, California. Both parties agree that they will submit themselves
to the jurisdiction of the courts in Orange County for purposes of this
Agreement.
12. No waiver of any breach of this Settlement Agreement shall be
claimed by a party or deemed to constitute consent to any continuation of such
breach, act or omission.
13. If any provision of this Settlement Agreement is invalidated or
limited in any jurisdiction, for any reason whatsoever, the Settlement Agreement
shall remain binding among the parties and in full force and effect except that,
in such jurisdiction, the invalid or limited provision shall be deemed separable
or limited to the extent of such contravention and shall not affect any other
provision of the Agreement.
14. Notices regarding this Agreement shall be delivered by telefax,
airborne delivery or mail, postage prepaid, and shall be deemed completed when
actually received and shall be addressed as follows:
GENERAL AUTOMATION, INC.
General Automation, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
XXX
Attention: Xxxx Xxxxxxxx, President & CEO
Attention: Xxxx Xxxxxxxx, CFO
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MDIS LIMITED
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MDIS Limited
Boundary Way, Hemel Hempstead
Hertfordshire
HP2 7HU
UNITED KINGDOM
Attention: Xxxx X'Xxxxxx
15. XXX and MDIS warrant and represent that by executing this
Settlement Agreement that they each have the full authority to bind their
companies and related entities.
XXX and MDIS hereby agree to the terms and conditions of this Agreement
and execute this Agreement, binding their respective companies.
MDIS LIMITED
By: /s/ XXXX X'XXXXXX
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Xxxx X'Xxxxxx, Director
Worldwide Marketing
Dated:
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ATTEST:
[SIG]
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GENERAL AUTOMATION, INC.
By: /s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx, President & CEO
Dated: 12/19//97
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ATTEST:
[SIG]
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[GENERAL AUTOMATION LETTERHEAD]
PROMISSORY NOTE
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US$400,000.00 December 19, 1997
Irvine, California
FOR VALUE RECEIVED, General Automation, Inc. (the "Maker"), promises to
pay to MDIS Limited, at the offices of MDIS Limited, the principal sum of FOUR
HUNDRED THOUSAND U.S. DOLLARS ($400,000.00).
1. Payment of the $400,000.00 shall be made in accordance with the terms and
conditions set forth in the Settlement Agreement between MDIS Limited and
General Automation, Inc. dated the same date as this promissory note.
2. This promissory note may not be assigned, pledged, hypothecated or
transferred without the prior written consent of General Automation, Inc.
which consent may be withheld in General Automation's sole discretion.
3. All rights and obligations hereunder shall be governed by the laws of the
State of California and this Note is executed as an instrument under seal.
ATTEST: GENERAL AUTOMATION, INC.
By: /s/ XXXXXX XXXXXX By: /s/ XXXX X. XXXXXXXX
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Xxxxxx Xxxxxx Xxxx X. Xxxxxxxx
Vice President Finance
CFO
