EXHIBIT 10.22
SETTLEMENT AGREEMENT AND RELEASE
The "parties" to this Settlement Agreement and Release ("Settlement
Agreement"), which was made and entered into as of April 15, 2002, are Image
Sensing Systems, Incorporated ("ISS"), Flow Traffic Limited ("Flow Traffic"),
Grove Place Limited ("Grove Place") and Xxxxxxx Xxxxx ("Xxxxx").
WHEREAS, on or about December 1, 1998, ISS and Grove Place entered into
a Consultancy Agreement. A copy of the Consultancy Agreement is attached hereto
as Exhibit A. Pursuant to that Consultancy Agreement, Xxxxx has acted as
Managing Director of ISS with a mission to create an Asian presence for products
developed or offered by ISS with a long term objective to develop a full line
products supply, service and integration business for the traffic and
transportation sector within Asia.
WHEREAS, on or about February 11, 2002, Xxxxx also agreed to serve as
President and Chief Executive Officer of ISS.
WHEREAS, Xxxxx is also a member of both the ISS Board of Directors and
the Flow Traffic Board of Directors.
WHEREAS, the parties to this Settlement Agreement mutually desire to
terminate the Consultancy Agreement as provided herein, under the terms and
conditions provided herein. This Settlement Agreement shall supercede the
Consultancy Agreement under the terms and conditions provided herein.
WHEREAS, ISS, Flow Traffic, Grove Place and Xxxxx recognize the
inconvenience and expense of litigation, and wish to avoid such inconvenience
and expense. As a result, the parties hereto desire to terminate, compromise and
settle any and all claims each might have, pursuant to the following terms and
conditions.
NOW, THEREFORE, in consideration of the promises contained herein, the
parties agree as follows:
SETTLEMENT AGREEMENT
1. Termination of Consultancy Agreement. All parties to this Settlement
Agreement mutually agree that this Settlement Agreement supercedes and replaces
the Consultancy Agreement. Moreover, pursuant to this Settlement Agreement, all
parties mutually agree to the termination of the Consultancy Agreement effective
immediately, with the sole exception that Grove Place and Xxxxx'x obligations
pursuant to Paragraph numbered 6 (Confidential Information) and Paragraph
numbered 11 (Post Termination Obligations of the Consultant) shall survive the
termination of this Consultancy Agreement in their entirety, and are hereby
incorporated into this Settlement Agreement and made a part hereof as if fully
set forth herein.
2. Termination Payment to Xxxxx. Pursuant to the following schedule,
ISS shall pay to Grove Place $178,000 ("Termination Pay"): $60,000 by April 19,
2002; $60,000 by September 1, 2002; and $58,000 by January 7, 2003. Said
Termination Pay is solely in connection with the termination of the Consultancy
Agreement. Termination Pay shall be paid by wire transfer to an account in Hong
Kong pursuant to wire transfer instructions to be provided by Grove Place no
later than April 16, 2002. In the event that wire transfer instructions are not
provided by Grove Place by April 16, 2002, the deadlines otherwise noted in this
paragraph shall be extended by one day for each day Grove Place is late. For
purposes of illustration only, in the event that Grove Place does not provide
wire transfer instructions until April 17, 2002, then the other deadlines in
this paragraph shall be modified as followed: the first payment shall be due on
April 20, 2002; the second payment on September 2, 2002; and the third payment
on January 8, 2003. In the event that any deadline under this Settlement
Agreement falls on a weekend or
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holiday, the deadline shall be extended to the next business day. Payment is
effective upon the date of the wire transfer.
Grove Place and Xxxxx acknowledge the adequacy and sufficiency of (1)
the Termination Pay, (2) the mutual termination of the Consultancy Agreement,
(2) Xxxxx'x resignation from all positions with ISS and Flow Traffic and the
acceptance of those resignations by ISS and/or Flow Traffic; and (3) the other
terms and conditions of this Settlement Agreement, as consideration for this
Settlement Agreement, including, but not limited to, provisions contained herein
related to the termination of the Consultancy Agreement, the numbered paragraphs
which survive the termination of the Consultancy Agreement, the releases, and
the numbered paragraphs of this Settlement Agreement.
In the event that ISS does not pay the Termination Pay in a
timely fashion, Grove Place shall send a notice by fax and mail to ISS at the
following number and address: (1) fax to the Attention of the Chairperson of the
Board of Directors (651-603-7765); and (2) address at 1600 University West, 000
Xxxxxx Xxxx Xxxxxx, Xx. Xxxx, XX 00000. Said notice shall identify the payment
which was not paid in a timely fashion and an address and fax number to which
ISS can respond. If the payment was made in a timely fashion, ISS shall respond
that the payment was made in a timely fashion. If the payment was not made in a
timely fashion, ISS shall have ten additional days from the date of notice
("Grace Period") to pay to Grove Place the amount past due ("the Delinquent
Amount"). If ISS fails to pay said Delinquent Amount within the Grace Period,
ISS shall pay simple interest on the Delinquent Amount at an annual rate equal
to one (1) percentage points above the rate of interest publicly announced by
U.S. Bank National Association (as of the date the Delinquent Amount is due) as
its prime rate, and shall be liable for Grove Place's cost of collection.
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3. Resignation from All Positions. Xxxxx hereby resigns from all
positions with ISS and Flow Traffic, including, but not limited to, any and all
positions he holds as an officer, consultant, employee, agent, representative
and/or director of ISS and Flow Traffic.
4. Mutual Nondisparagement. All parties to this Settlement Agreement
mutually agree that each will not engage in any verbal, written or other
communications that in any way disparage, defame, libel, slander, malign or
otherwise cause harm or potential harm to the reputation or goodwill of ISS,
Flow Traffic or Grove Place, or the officers, directors and employees of the
ISS, Flow Traffic or Grove Place, and further will not engage in any verbal,
written or other communication that in any way disparage, defame, libel,
slander, malign or otherwise cause harm or potential harm to the reputation of
Xxxxx.
5. Irreparable Harm/Injunctive Relief: The parties to this Settlement
Agreement mutually agree that any breach of paragraph 5 of this Settlement
Agreement or of numbered paragraphs 6 and 11 of the Consultancy Agreement which,
pursuant to paragraph 1 above survive termination of the Consultancy Agreement,
and are incorporated herein and made a part hereof, would result in irreparable
harm to ISS, entitling ISS, among other things, to immediate injunctive relief.
6. Amendment No. 2 To Shares Sale and Purchase Agreement. ISS and Grove
Place Limited agree to execute Amendment No. 2 To Shares Sale and Purchase
Agreement, a copy of which is attached hereto as Exhibit B.
7. Release by ISS and Flow Traffic. ISS and Flow Traffic hereby release
any and all claims, causes of actions, obligations or liabilities, solely in
connection with the amount of Termination Pay to be paid pursuant to this
Settlement Agreement. ISS and Flow Traffic covenant and agree that neither will
file or pursue any claim or cause of action against Grove
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Place or Xxxxx in connection with the amount of Termination Pay to be paid
pursuant to this Settlement Agreement. If ISS or Flow Traffic breaches this
covenant, the breaching party shall pay the attorneys' fees and costs of the
party against whom the claim, or cause of action was asserted, related to
securing dismissal of said claim or cause, or cause of action.
8. Release by Grove Place and Xxxxx. Xxxxx, for and on behalf of
himself and his heirs, administrators, executors, successors and assigns and
Grove Place, its parents, subsidiaries, related companies, affiliates and
assigns, and its current and former owners, directors, officers, agents,
attorneys, employees and representatives, hereby release, acquit and forever
discharge ISS and Flow Traffic, their parents, subsidiaries, related companies,
affiliates, and assigns, and their current and former directors, officers,
agents, attorneys, employees and representatives, from any and all claims,
charges, causes of actions, obligations or liabilities, known and unknown, which
arise on or before the effective date of this Settlement Agreement. By way of
illustration only, this Release encompasses, but is not limited to: any claim or
allegations stemming from the Consultancy Agreement, Xxxxx'x resignations, the
Termination Pay, and claims, charges, or causes of action that could be brought
under Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000(e) et
seq., as amended; the Civil Rights Act of 1866, as amended; the Equal Pay Act,
as amended; United States Executive Orders 11246 and 11375; The Regulations of
the Office of Federal Contract Compliance Programs, as amended; the
Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701, et. seq.; the Age
Discrimination in Employment Act (including the Older Workers Benefit Protection
Act), 29 U.S.C. Section 621 et seq.; the Americans With Disabilities Act, 42
U.S.C. Sections 12101-12213; the Employee Retirement Income Security Act
(ERISA), 29 U.S.C. Section 1001, et seq.; the Fair Labor Standards Act, 29
U.S.C. Section 201, et seq.; the National Labor Relations Act, 29 U.S.C. Section
151, et seq., the Worker Adjustment Retraining
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and Notification Act, 29 U.S.C. Section 2101, et seq., the Minnesota Human
Rights Act, Minn. Stat. Section 363.01, et seq.; any and all statutes providing
rights and protections of any kind for employees working in the state of
Minnesota, and any other federal, state, or local statute, ordinance, regulation
or rule, including any attorneys' fees, liquidated damages, punitive damages,
and any costs or disbursements that could be awarded in connection with these or
any other statutory claims; and claims, charges or causes of action which could
be brought based on contract, quasi-contract, implied contract, wrongful or
constructive discharge, breach of the covenant of good faith and fair dealing,
libel, defamation, slander, negligent or intentional infliction of emotional
distress, discrimination on any basis prohibited by statute, ordinance or public
policy, negligence, interference with business opportunity or with contracts, or
unfair insurance practices, and any other cause of action whatsoever, any of
which arise on or before the date of the effective date of this Settlement
Agreement.
Xxxxx, for and on behalf of himself and his heirs, administrators,
executors, successors and assigns and Grove Place, its parents, subsidiaries,
related companies, affiliates and assigns, and its current and former owners,
directors, officers, agents, attorneys, employees and representatives, hereby
covenants and agrees that neither will file or otherwise pursue any claim,
charge, or cause of action against ISS or Flow Traffic, their parents,
subsidiaries, related companies, affiliates, or assigns, or against their
current and former directors, officers, agents, attorneys, employees or
representatives which relates to the matters released in this paragraph. If
Grove Place or Xxxxx breach this covenant, the breaching party shall pay the
attorneys' fees and costs of the party against whom the claim, charge or cause
of action was asserted, related to securing dismissal of said claim, charge or
cause of action.
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9. Assumption of Settlement Agreement Successors and Assignees. Flow
Traffic's and ISS's rights and obligations under this Settlement Agreement will
inure to the benefit of and be binding upon Flow Traffic's and ISS's successors
and assignees. Grove Place's rights and obligations under this Settlement
Agreement will inure to the benefit of and be binding upon Grove Place's rights
and obligations under this Settlement Agreement. Xxxxx'x rights and obligations
under this Settlement Agreement will inure to the benefit of and be binding upon
his heirs, administrators, executors, successors and assigns.
10. Oral Modification Not Binding. This instrument is the entire
Settlement Agreement of the parties. Oral changes will have no effect. It may be
altered only by a written agreement signed by both parties.
11. Review of Settlement Agreement. The parties to this Settlement
Agreement, each affirm and acknowledge that each has read the foregoing
Settlement Agreement and that each has either consulted with or had the
opportunity to consult with an attorney prior to signing this Settlement
Agreement. The parties to this Settlement Agreement further affirm and agree
that this Settlement Agreement is written in language understandable to them and
that each understands the meaning of the terms of this Settlement Agreement and
their effect.
12. Knowing and Voluntary Settlement Agreement. The parties to this
Settlement Agreement acknowledge that each has entered into this Settlement
Agreement knowingly and voluntarily; that each has had a reasonable period of
time within which to consider this Settlement Agreement; and that each has had
the opportunity to retain and be represented by counsel in connection with this
Settlement Agreement, whether or not he has elected to retain counsel.
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13. Instrument. The parties agree that this Settlement Agreement may be
executed in any number of counterparts, each of which may be deemed an original,
and all of which when taken together shall constitute one and the same
instrument.
14. Choice of Forum. The parties agree that any dispute arising over
this Settlement Agreement shall be brought exclusively in the appropriate courts
in the State of Minnesota.
Dated: April 15, 2002 IMAGE SENSING SYSTEMS, INCORPORATED
By /s/ Xxxxx Xxxxxxxx
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Its: Chairman
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Dated: April 15, 2002 FLOW TRAFFIC LIMITED
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By /s/ Xxxxx Xxxxxx
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Its: Director
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Dated: April 15, 0000 XXXXX XXXXX LIMITED
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By /s/ Xxxxxxx Xxxxx
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Its: Authorized Signatory
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Dated: April 15, 2002 XXXXXXX XXXXX
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/s/ Xxxxxxx Xxxxx
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