EXHIBIT 10.14
SETTLEMENT AGREEMENT
This Settlement Agreement is entered into as of May 10, 2001 between
iStreamTV, Inc., a New York corporation with its principal place of business at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx 00000 ("ISTV"), Videolocity, Inc. formerly known
as Xxxxxxxxxxxx, Inc., a Nevada corporation with its principal place of business
at 000 X. 000 Xxxx, Xxxx Xxxx Xxxx, XX 00000 (collectively with its parent,
subsidiary and affiliate companies, "MOL"), 5th Digit, LLC, a/k/a 5th Digit
Technologies, a New York LLC with its principal place of business at 00 Xxxxx
Xxxxxx, #0, Xxx Xxxx, XX 00000 ("5th Digit"), Xxxxxx Xxxxxx, residing at 000
Xxxx Xxxxxx, X-00, Xxxx Xxxx, XX 00000 ("Xxxxxx") and Xxxxx Xxxxx, residing at
0000 X. 0000 Xxxx #0X, Xxxx Xxxx, XX 00000 ("Xxxxx").
WHEREAS, MOL brought an action against ISTV in the Utah State Court
entitled Xxxxxxxxxxxx, Inc. v. iStreamTV (Third Judicial Court for Salt Lake
County, Utah, Civil No. 000907601) (the "Utah Action"); and
WHEREAS, ISTV commenced an action against MOL, 5th Digit, Xxxxxx, Xxxxx
and others in the New York State Court entitled iStreamTV, Inc. v. Xxxxxxxxxxxx,
Inc., et al, (New York State Supreme Court, New York County Index No. 605628/00)
(the "New York Action"); and WHEREAS, Xxxxxx and Xxxxx were formerly employed by
ISTV, up to and including September 19, 2000, and from on or about January 5,
2001 until February 28, 2001 they were both employed by 5th Digit, which is now
controlled by Videolocity International, Inc., the parent corporation of MOL;
and
WHEREAS, during the time that Xxxxxx and Xxxxx were employed by ISTV
three provisional patent applications were filed with the United States Patent
and Trademark Office ("USPTO") in the names of one or the other of them with
respect to certain inventions, namely, applications given U.S. serial numbers
60/218,528 (Xxxxx, "Enhanced Video Compression Method"), 60/226,575 (Xxxxx,
"Open-Architectures Set Top Box Providing Full and Upgradable Multi-Media
Functionality") and 60/233,447 (Xxxxxx, "Webcaster") (collectively, the
"Provisional Patent Applications"); and
WHEREAS, on October 19, 2000 Xxxxxx and Xxxxx executed Assignments
whereby they assigned the Provisional Patent Applications to 5th Digit (the
"Xxxxx and Xxxxxx Assignments"), and copies of such assignments, along with
Patent Recordation Form Cover Sheets submitted to the USPTO on Forms PTO-1595
dated October 26, 2000 and USPTO Notices of Recordation of Assignment Documents
dated January 16, 2001, indicating the filing of the Xxxxx and Xxxxxx
Assignments on November 2, 2000, are attached hereto as Exhibit A; and
WHEREAS, the parties hereto seek to resolve the disputes in the Utah
Action and the New York Action and all other disputes among them, including
without limitation, all disputes with respect to (a) ownership of the
Provisional Patent Applications, (b) the Xxxxx and Xxxxxx Assignments and (c)
the enforceability of a so-called "Binding Letter of Intent" dated as of July
25, 2000 signed by representatives of MOL and ISTV; NOW, THEREFORE,
IT IS HEREBY AGREED by and among the undersigned, as follows:
1. 5th Digit shall execute and deliver to ISTV, simultaneously
herewith, the instruments of assignment attached as Exhibit B, assigning to
ISTV all of 5th Digit's right, title and interest in the Provisional Patent
Applications, and agreeing to execute any additional document reasonably
required by ISTV or the USPTO to effect such assignments, provided that 5th
Digit shall not be required to incur any out-of-pocket cost or expense in
connection with execution of any such additional document (including, without
limitation, any reasonable attorney's fees that might be incurred in reviewing
such document.
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2. Xxxxxx and Xxxxx acknowledge the assignments provided for in
paragraph 1 above; confirm that they executed the instruments of assignment to
5th Digit, attached as Exhibit A; relinquish any and all right or claim of
ownership in the Provisional Patent Applications; acknowledge the right and
ownership therein of ISTV by virtue of said assignments by 5th Digit; and agree
to execute any additional document reasonably required by ISTV or the USPTO to
effect such assignments, provided that Xxxxxx and Xxxxx shall not be required to
incur any out-of-pocket cost or expense in connection with execution of any
such additional document (including, without limitation, any reasonable
attorneys' fees that might be incurred in reviewing such document).
3. MOL, on behalf of itself and any affiliated company, represents
that it has no right, title or interest in the Provisional Patent Applications.
4. Each of MOL, 5th Digit, Xxxxxx and Xxxxx makes no representation or
warranty, express or implied, regarding the viability or patentability of any
inventions or rights set forth in the Provisional Patent Application being
assigned pursuant to this Agreement and the Assignments being executed herewith.
5. The parties agree to dismissal with prejudice of the Utah Action and
the New York Action, without costs or expenses to any party, by filing of
stipulations of dismissal in the forms attached as Exhibit C.
6. ISTV agrees that, except with respect to the subject matter as
described in the Provisional Patent Applications that are the subject of this
agreement and the assignments thereof by 5th Digit, it will not assert any claim
against Kasal, Osorio, MOL or 5th Digit to the effect that ISTV owns rights to
any other invention or intellectual property for which either Xxxxx or Xxxxxx
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claims inventorship, by virtue of the fact that Xxxxx or Xxxxxx were employed by
ISTV to develop any such other invention or intellectual property, or used ISTV
resources to develop any such other invention or intellectual property.
7. MOL, 5th Digit, Xxxxx and Xxxxxx agree that they will not assert any
claim against ISTV that MOL, 5th Digit, Xxxxx, Xxxxxx or any of them owns any
right, title or interest in the Provisional Patent Applications.
8. Simultaneously with the execution of this agreement the parties will
execute mutual releases in the forms attached as Exhibit D.
9. Upon execution of this Agreement ISTV shall pay to MOL the sum of
$1,500.
10. This agreement shall be governed by the laws of the State of New
York applicable to contracts made and to be performed in New York, and any
disputes arising hereunder shall be determined by a federal or state court
sitting in New York County.
11. There are no oral understandings between the parties, and no
amendment hereto may be made except in a writing signed by all parties affected
by any such amendment.
12. The parties hereto acknowledge that they have been represented by
counsel of their choice in connection with this Agreement.
13. The parties agree to keep confidential the specific terms and
conditions of this Agreement and not to disclose or describe the same to any
third party (other than their respective counsel, accounts or other consultants)
or to the public in general, except to the extent disclosure is (a) required by
applicable law or regulation, including, without limitation, those of the SEC
and the U.S. Patent Office, (b) necessary to enforce the terms of this agreement
or (c) necessary to any pending or future litigation that any party hereto may
bring or defend.
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14. This agreement may be executed in counterpart, and fax copies may
be treated as originals.
Dated: New York, New York
May 10, 2001 iStreamTV, Inc.
By: /s/ Xxxxxx X. Xxxxxx
----------------------
Name: Xxxxxx X. Xxxxxx
Title: CFO:
Videolocity, Inc., formerly known as
Xxxxxxxxxxxx, Inc. (for itself and its parent,
subsidiary and affiliate companies)
By: /s/ Xxxxx Xxxxxx
-----------------------
Name: Xxxxx Xxxxxx
Title: President
5th Digit
By: /s/ Xxxxxxxx Xxxxxxx
------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Manager
/s/ Xxxxxx Xxxxxx
------------------------
Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxx
-------------------------
Xxxxx Xxxxx
By: /s/ Xxxxxx X. Xxxxxxxx, Esq. By: /s/ Xxxxx X. Xxxxx, Esq.
---------------------------------- --------------------------
Xxxxxx X. Xxxxxxxx, Esq. Xxxxx X. Xxxxx, Esq.
Xxxx Xxxxxxx
Attorneys for Plaintiff
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(telephone number illegible)
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