AGREEMENT AND MUTUAL RELEASE
THIS AGREEMENT AND MUTUAL RELEASE ("Agreement") is made and entered into
this 7th day of June, 2004, by and between CASE FINANCIAL, INC. ("Case") and
XXXX XXXXX ("Xxxxx").
WHEREAS, Alden was an employee, an officer and a director of Case;
WHEREAS, concurrent with the execution of this Agreement, Alden sold 770,833
shares of common stock of Case to Xxxxxx Capital, LP;
WHEREAS, Case hereby acknowledges that Alden was the record holder of said
770,833 shares; WHEREAS, as a result of the sale of the aforesaid 770,833
shares, Alden presently owns 250,000 shares of common stock of Case ("Shares")
and Case hereby acknowledges that Alden is the record holder of the Shares;
WHEREAS, this Agreement is being executed simultaneously with the
following two (2) other agreements and this Agreement shall not take effect
until such other two (2) agreements are executed and such other two (2)
agreements (as well as this Agreement) are approved by the Board of Directors of
Case: (1) Assignment of Stock Options between Alden and Prime Capital
Investments, LLC, and (2) Agreement and Mutual Release between Alden, CCWIPP and
Xxxxxxxx X. Xxxxx;
WHEREAS, certain disputes have arisen between Case and Alden relating to
Alden's relationship and status as an employee, officer, director and
shareholder of Case; and
WHEREAS, the parties hereto wish to resolve all disputes between them.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Alden agrees that, until such time that Case consummates one or more
equity and/or debt financings which, in the aggregate, results in net proceeds
to Case of at least $2 million or 120 calendar days after the execution of this
Agreement, whichever occurs earlier ("Lockup Period"), he may not sell, assign,
convey, transfer or pledge any of the Shares. After the Lockup Period, during
each of the two 90 calendar day periods thereafter, Alden may sell up to 37,500
Shares and, after the earlier of nine (9) months after the date of this
Agreement or the end of the second 90 calendar day period, Alden may sell all of
the Shares; provided, however, that such sale or sales comply with all, and do
not violate any, applicable federal and state securities laws. Alden
acknowledges and agrees that a stop transfer order will be placed upon the
Shares and that the certificates for the Shares will contain a legend
substantially as follows, in addition to the same legend which is on Alden's
existing certificate:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS SET FORTH IN A CERTAIN AGREEMENT AND MUTUAL RELEASE DATED
JUNE 7, 2004."
2. Concurrent with the execution of this Agreement, Alden shall execute a
License Agreement ("License Agreement"), in the form attached hereto as Exhibit
A, whereby Alden shall grant to Case a three year exclusive and a perpetual
non-exclusive license throughout the world to make, have made, use, sell, and
offer to sell Licensed Products (as defined in the License Agreement)
for the term specified in the License Agreement. The term "Patent" as used
herein shall mean all of Alden' s right, title and interest in and to the
subject matter of U.S. patent application no. 10/750,564, docket no.
49780/JEC/C803 for the work known as "method and apparatus for generating an
expense guarantee," and to all intellectual property rights associated
therewith. Alden represents and warrants that he has not made any prior
assignments of the foregoing nor are there any liens or encumbrances thereon.
Alden agrees to execute any and all documents to effectuate the foregoing
license. In any event, the License Agreement shall terminate and the aforesaid
license shall revert to Alden should Case file for protection under the United
States Bankruptcy laws.
3. Except for the obligations of the parties provided for in this
Agreement, Alden does hereby release and discharge Case, and its past and
present officers, directors, employees, agents, representatives, affiliates, and
subsidiaries, and their successors and predecessors, and each of them, from any
and all debts, claims, demands, liabilities, obligations, contracts, agreements,
guarantees, causes of action, known and unknown, against any of them which any
of them now owns, holds or has at any time heretofore owned or held by reason of
any act, matter, cause or thing whatsoever done prior to the execution of this
Agreement, including but not limited to any debts, obligations or liabilities
arising out of or related to Alden's termination as an officer and employee of
Case. Notwithstanding the foregoing, Case acknowledges and agrees that it is
still indebted to Alden under two promissory notes, one for $45,000.00 and one
for $5,000.00.
4. Except for the obligations of the parties provided for in this
Agreement, Case does hereby release and discharge Alden from any and all debts,
claims, demands, liabilities, obligations, contracts, agreements, guarantees,
causes of action, known and unknown, against any of them which any of them now
owns, holds or has at any time heretofore owned or held by reason of any act,
matter, cause or thing whatsoever done prior to the execution of this Agreement;
provided, however, nothing contained in this Paragraph 4 shall, or is intended
to, release or discharge Alden from any act or conduct that constitutes a crime
under California and/or federal law.
5. It is the intention of the parties hereto in executing this Agreement
that the same shall be effective as a bar to each and every claim, demand and
cause of action specified in Paragraphs 3 and 4 and, in furtherance of this
intention, each waives and relinquishes all rights and benefits under Section
1542 of the Civil Code of the State of California, which provides:
"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."
The parties hereto acknowledge that each may hereafter discover facts
different from or in addition to those now known or believed to be true with
respect to such claims, demands or causes of action and agree that this
instrument shall be and remain effective in all respects notwithstanding any
such differences or additional facts.
The aforesaid release shall inure to the benefit of the parties hereto,
their respective heirs, executors, administrators, successors and assigns, and
shall be binding upon the heirs, executors, administrators, successors and
assigns of each.
The parties hereto warrant that no assignment of said claims, demands or
causes of action have been made and they agree to indemnify and hold the others
harmless against any assignment of said claims, demands or causes of action.
6. Alden represents and warrants to Case that, other than the Shares, the
aforesaid 1,020,833 shares, and Alden's option to purchase 320, 833 shares of
common stock of Case, Alden does not own any other stock of Case nor does Alden
have the right to acquire or purchase any additional stock of Case. Nothing in
this Paragraph 6 shall prevent Alden from exercising his rights to buy and/or
sell shares of Case common stock in the open market.
7. It is understood and agreed that this Agreement is intended to
compromise disputed claims and is not to be construed as an admission of or
evidence of any liability by either party to the other.
8. In the event that any party to this Agreement commences legal action
against any other party because of a breach or default under this Agreement,
then the prevailing party shall be entitled to recover reasonable attorneys'
fees and court costs.
This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
written instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
CASE FINANCIAL, INC.
By:
Name: Xxxx Xxxxxx
Title: President, CIO
XXXX XXXXX
EXHIBIT A LICENSE AGREEMENT
LICENSE AGREEMENT
This License Agreement ("LICENSE AGREEMENT"), is entered as of June 7,
2004, (the "EFFECTIVE DATE") by and between XXXX X. XXXXX, an individual
residing at 00000 Xxxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000 ("XXXX
XXXXX"), and CASE FINANCIAL, INC., a corporation duly organized and existing
under the laws of the State of California and having a principal office at 00000
Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxxxxx 00000 ("CASE FINANCIAL").
WHEREAS, XXXX XXXXX and CASE FINANCIAL are parties to that certain
AGREEMENT AND MUTUAL RELEASE entered by and between XXXX XXXXX and CASE
FINANCIAL on even date herewith (the "SETTLEMENT AGREEMENT");
WHEREAS, XXXX XXXXX is a co-inventor of certain new and useful
improvements disclosed in an application for United States Letters Patent
entitled METHOD AND APPARATUS FOR GENERATING AN EXPENSE GUARANTY, filed December
31, 2003, U.S. Application Ser. No. 10/750,564; and
WHEREAS, CASE FINANCIAL desires to obtain an exclusive license for PATENT
RIGHTS related to and including the aforesaid application for United States
Letters Patent.
NOW THEREFORE, in consideration of the premises, the mutual promises and
covenants contained herein, and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties agree as
follows.
ARTICLE I - DEFINITIONS
For the purpose of this LICENSE AGREEMENT, the following words and phrases
shall have the following meanings:
1.1 "LICENSED PRODUCTS" mean any product, material, apparatus, system, or
article of manufacture which:
(a) includes structure and/or operation that fall within the scope
of a claim contained in any filing included in PATENT RIGHTS; or
(b) includes TECHNICAL INFORMATION.
1.2 "LICENSED SERVICES" mean any service that utilizes a method,
apparatus, system, or article of manufacture falling within the scope of a claim
contained in any filing included in PATENT RIGHTS.
1.3 "PATENT RIGHTS" mean: (A) an application for United States Letters
Patent entitled METHOD AND APPARATUS FOR GENERATING AN EXPENSE GUARANTY, filed
December 31, 2003, U.S. Application Ser. No. 10/750,564; (B) all United States
and foreign patent applications based upon the aforesaid application for
United States Letters Patent; (C) any additions, continuations, divisions,
reissues, re-examinations, or extensions based on the aforesaid application for
United States Letters Patent; and (D) any United States or foreign patents
issuing from any of the foregoing.
1.4 "TECHNICAL INFORMATION" means all works of authorship, designs, flow
charts, drawings, artworks, expressions, algorithms, software, mask works,
ideas, know-how, research information, trade secrets, proprietary information,
documents, manuals, and instructions relating to subject matter disclosed in
PATENT RIGHTS, and any intellectual property therein.
ARTICLE II - LICENSE GRANT
2.1 LICENSE GRANT. Except as provided for herein, XXXX XXXXX hereby grants
to CASE FINANCIAL an exclusive, worldwide, royalty-free right and license under
the PATENT RIGHTS and TECHNICAL INFORMATION, including the right to grant
sublicenses, to make, have made, use, offer for sale, sell, and import LICENSED
PRODUCTS, and to provide LICENSED SERVICES.
ARTICLE III - CONSIDERATION
The consideration for the rights and licenses granted herein is set forth
in the SETTLEMENT AGREEMENT.
ARTICLE IV - TERM
This LICENSE AGREEMENT shall be effective on the EFFECTIVE DATE and shall
continue in full force and effect in perpetuity, provided that, the license
granted hereunder shall be exclusive for a period commencing on the EFFECTIVE
DATE and continuing for three (3) years, and, thereafter, the license granted
hereunder shall be on a non-exclusive basis in accordance with the terms and
conditions herein. Except as provided for herein, this LICENSE AGREEMENT shall
not be subject to termination, cancellation and/or rescission for any reason
whatsoever. Notwithstanding the foregoing, if CASE FINANCIAL files for
protection under the United States bankruptcy laws or is no longer operating
and/or ceases to be in the lending business for a consecutive period of at least
ninety (90) days, then this LICENSE AGREEMENT shall terminate.
ARTICLE V - REPRESENTATIONS AND WARRANTIES
5.1 XXXX XXXXX represents and warrants that he has not executed, and will
not execute, any agreement in conflict herewith;
ARTICLE VI - PATENT PROSECUTION, ENFORCEMENT, AND DEFENSE
6.1 APPLICATIONS. CASE FINANCIAL shall have sole discretion to prepare,
file, prosecute, maintain, and obtain issuance and extensions of patents and
patent applications in PATENT RIGHTS. XXXX XXXXX shall take all actions
necessary including testifying in any legal proceedings, signing all lawful
papers, executing all divisional, continuation, substitute and reissue
applications, making all rightful oaths, and
generally do everything reasonable, to aid CASE FINANCIAL to obtain and enforce
proper patent protection for PATENT RIGHTS in all countries.
6.2 ENFORCEMENT. If any PATENT RIGHTS are being or have been infringed by
a third party, CASE FINANCIAL shall have the initial right, but not the
obligation, to institute, prosecute, and control any action, suit or proceeding
(an "ACTION") with respect to such infringement of PATENT RIGHTS, including any
declaratory judgment. XXXX XXXXX shall assist and cooperate with CASE FINANCIAL,
at CASE FINANCIAL's request, in connection with any such ACTION.
6.3 DEFENSE. In the event of the institution of any suit by a third party
against CASE FINANCIAL for patent or other intellectual property rights
infringement or other use, rights, or ownership claim involving the making, use,
offer for sale, or sale of any LICENSED PRODUCTS or the providing of any
LICENSED SERVICES (an "ACTION"), XXXX XXXXX shall assist and cooperate with CASE
FINANCIAL, at CASE FINANCIAL'S request, in the defense of such ACTION.
ARTICLE VII - MISCELLANEOUS PROVISIONS
7.1 AGENT. Neither party shall be deemed to be an agent of the other party
as a result of any transaction under or related to this LICENSE AGREEMENT, and
shall not in any way pledge the other party's credit or incur any obligation on
behalf of the other party.
7.2 GOVERNING LAW. This LICENSE AGREEMENT shall be construed, governed,
interpreted and applied in accordance with laws of the State of California, USA,
except that questions concerning the validity and scope of coverage or
infringement of any patent shall be determined by the law of the country in
which the patent was granted
7.3 SEVERABILITY. The provisions of the LICENSE AGREEMENT are severable,
and in the event that any provisions of this LICENSE AGREEMENT are determined to
be invalid or unenforceable under any controlling body of law, such invalidity
or enforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
7.4 INTEGRATION. The Parties acknowledge that this instrument sets forth
the entire agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a subsequently written instrument subscribed to by the parties
hereto.
7.5 HEADINGS. The headings are included for reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
LICENSE AGREEMENT.
IN WITNESS WHEREOF, the Parties have hereunder set their hands and seals
and duly executed this LICENSE AGREEMENT in duplicate by its duly authorized
officers the day and year first above written.
XXXX X. XXXXX CASE FINANCIAL, INC.
By:
Name: Xxxx Xxxxxx
Title: President, CIO
