Attached files
Exhibit 10.26
[PORTIONS
OF THIS EXHIBIT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
SETTLEMENT
AGREEMENT
This Settlement Agreement
(“Agreement”), effective as of the Effective Date, is entered into by and
between Satellite Tracking of People, LLC and Michelle Enterprises, LLC on the
one hand, and RemoteMDx, Inc. and SecureAlert, Inc., on the other
hand.
WHEREAS,
the parties to this Agreement are in the business of providing locational
tracking devices, systems and related accessories and services; and
WHEREAS,
the parties have been involved in litigation with one another; and
WHEREAS,
the parties wish to resolve their disputes with one another pursuant to the
terms set forth hereinafter;
NOW,
THEREFORE, in consideration of the releases and mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
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1.
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Definitions
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Unless
expressly stated to the contrary, the following definitions shall govern
the interpretation and enforcement of this
Agreement:
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The
term "Subsidiary" shall mean and refer to any corporation or other entity
(i) the majority of whose shares or other securities entitled to vote for
election of directors (or other managing authority) is now or hereafter
controlled by a Party, either directly or indirectly, or (ii) which does
not have outstanding shares or securities but the majority of whose
ownership interest representing the right to manage such corporation or
other legal entity is now or hereafter owned or controlled by a Party,
either directly or indirectly. Any such corporation or other
legal entity shall be deemed to be a Subsidiary of a Party only so long as
such control or ownership exists.
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The
term “Effective Date” shall mean and refer to the later to occur of (i)
the date of the last signature on this Agreement, (ii) the entry of a
fully executed Stipulation of Dismissal in the form attached hereto as
Exhibit A, and (iii) the entry of a fully executed Stipulation of
Dismissal in the form attached hereto as Exhibit
B.
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The
term “STOP” shall mean and refer to Satellite Tracking of People, LLC, a
Delaware limited liability corporation having its principal place of
business at 1212 North Oak Road, Suite 100, Houston, Texas 77055, and its
Subsidiaries.
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The
term “MICHELLE” shall mean and refer to Michelle Enterprises, LLC, a
Florida limited liability company having its headquarters and principal
place of business at 19080 S.W. 44th
Street, Dunnellon, Florida, and its
Subsidiaries.
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The
term “RMDX” shall mean and refer to RemoteMDx, Inc., a Utah corporation
having its principal place of business at 150 West Civic Center Drive,
Suite 400, Salt Lake City, Utah 84070, and its
Subsidiaries.
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The
term “SecureAlert” shall mean and refer to SecureAlert, Inc., a Utah
corporation having its principal place of business at 150 West Civic
Center Drive, Suite 400, Salt Lake City, Utah, 84070, and its
Subsidiaries.
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The
term “the California Litigation” shall mean and refer to certain
litigation filed by RMDX against STOP in the Central District of
California, and captioned RemoteMDx, Inc. v. Satellite
Tracking of People, LLC, Civil Action CV 08-02899. The
California Litigation asserts that STOP infringes U.S. Patent No.
7,330,122.
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The
term “the Texas Litigation” shall mean and refer to certain litigation
filed by STOP and MICHELLE against SecureAlert in the Eastern District of
Texas, and captioned Satellite Tracking of People,
LLC and Michelle Enterprises, LLC v. Pro Tech Monitoring, Inc., et al.,
Civil Action No. 2-08 CV-116. The Texas Litigation
asserts that SecureAlert and others infringe U.S. Patent No. RE39,909
(“the ‘909 Patent”).
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The
term “the ‘122 Patent” shall mean and refer to U.S. Patent No. 7,330,122,
owned by RMDX and asserted against STOP in the California
Litigation.
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The
term “the ‘909 Patent” shall mean and refer to U.S. Patent No. RE39,909,
licensed to STOP and owned by
MICHELLE.
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The
term “Licensed STOP Patents” shall mean and refer to the ‘909 Patent, U.S.
Patent No. 6,774,797, and any U.S. patents issuing from U.S. Patent
Applications Serial Nos. 11/847,106 and 11/847,146, as well as all foreign
counterparts of said patents and all patents issuing from continuation,
divisional, reexamination, and reissue applications claiming priority to
such patents and patent applications. To the extent patents issue from
continuation-in-part applications claiming priority to the Licensed STOP
Patents and include claims that do not rely upon new matter that is
included for the first time in the continuation-in-part application, such
claims shall be included within the definition of “Licensed STOP
Patents.” A list of all of STOP’s (i) United States and foreign
counterpart patent applications and (ii) United States and foreign
counterpart issued patents that fall within the definition of “Licensed
STOP Patents” is attached hereto as Exhibit C, and shall be updated by
STOP upon request by RMDX.
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The
term “STOP Carve-Outs” shall mean and refer to all U.S. patents (and
foreign counterparts) that issue from U.S. Patent Application Serial No.
12/576,090 (“the STOP ‘090 Application”) and U.S. Patent Application
Serial No. 12/576,054 (“the STOP ‘054 Application”) and/or from any
continuation, continuation-in-part, divisional, reexamination or reissue
application claiming priority to the STOP ‘090 or ‘054 Applications and
any reexamination or reissue thereof. A list of all of STOP’s
(i) United States and foreign counterpart patent applications and (ii)
United States and foreign counterpart issued patents that fall within the
definition of “STOP Carve-Outs” is attached hereto as Exhibit D, and shall
be updated by STOP upon request by
RMDX.
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The
term “STOP CNS Patents” shall mean all U.S. and foreign patents owned by
STOP or which STOP has the right to enforce as of the Effective Date of
this Agreement, and all patents, U.S. and foreign, that issue from
continuation, continuation-in-part, divisional, reissue or reexamination
applications claiming priority to those patents, but NOT including the
STOP Carve-Outs or the STOP Licensed Patents. The STOP CNS
Patents shall also include all patents STOP acquires or obtains the right
to enforce during the term of the Covenant Not to Sue referenced in
section 7 of this Agreement. Notwithstanding the foregoing,
U.S. Patent No. 6,405,213 ("the '213 Patent") and any reexamination or
reissues along with any and all foreign counterparts are not included in
the definition of STOP CNS Patents. A list of all of STOP’s (i)
United States and foreign counterpart patent applications and (ii) United
States and foreign counterpart issued patents that fall within the
definition of “STOP CNS Patents” is attached hereto as Exhibit E, and
shall be updated by STOP upon request by
RMDX.
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Subject
to the carve-outs of section 1.15, the term “Licensed RMDX Patents” shall
mean and refer to the ‘122 Patent, U.S. Patent No. 7,545,318 B2, and any
U.S. patents issuing from U.S. Patent Application Serial No. 12/399,151,
as well as all foreign counterparts of said patents and all patents
issuing from continuation, divisional, reexamination, and reissue
applications claiming priority to such patents and patent applications. To
the extent patents issue from continuation-in-part applications claiming
priority to the Licensed RMDX Patents and include claims that do not rely
upon new matter that is included for the first time in the
continuation-in-part application, such claims shall be included within the
definition of “Licensed RMDX Patents.” A list of all RMDX’s (i)
United States and foreign counterpart patent applications and (ii) United
States and foreign counterpart issued patents that fall within the
definition of “Licensed RMDX Patents” is attached hereto as Exhibit F, and
shall be updated by RMDX upon request by
STOP.
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PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION. XXXXX
INDICATES REDACTED LANGUAGE.
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The
term “RMDX Carve-Outs” shall mean and refer to claims 1-10 of the ‘122
Patent and any claims of future issued patents (domestic or foreign) owned
by RMDX or SecureAlert that recite two-way or more than two-way voice
communication between a locational tracking device and a remote monitoring
center, law enforcement/parole offices, or other offender-relevant third
parties, along with other elements. The RMDX Carve-Outs shall
also include all claims of existing patents and patent applications
(domestic or foreign) listed on Exhibit G, which fall outside the Veridian
Fields of Use. The RMDX Carve Outs shall also include all
claims of future patents and patent applications (domestic or foreign),
claiming priority to any patent or patent application listed on Exhibit G,
which fall outside the Veridian Fields of Use. The RMDX
Carve-Outs shall not apply to the STOP BluFone device and any STOP future
device that provides voice communications as part of a separate unit (not
physically integrated into a single device) from the STOP BluTag or other
similar or replacement device. A list of all RMDX’s (i) United
States and foreign counterpart patent applications and (ii) United States
and foreign counterpart issued patents that fall within the definition of
“RMDX Carve-Outs” is attached hereto as Exhibit G, and shall be updated by
RMDX upon request by STOP.
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The
term “Claims” shall mean and refer to any claims, cross-claims,
counterclaims, causes of action, liabilities, demands, obligations,
rights, damages, costs, or expenses of any nature, kind, or character that
have or could have been brought, asserted, alleged, or proposed in any
lawsuit, action, arbitration, or proceeding of any kind, nature, or
description, whether arising under or sounding in common law, contract,
tort, statute, regulation, or rule for any reason, with respect to any
dispute, controversy, or injury and for any amount or any form of
relief.
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The
term “RMDX CNS Patents” shall mean all U.S. and foreign patents owned by
RMDX or which RMDX has the right to enforce as of the Effective Date of
this Agreement, and all patents, U.S. and foreign, that issue from
continuation, continuation-in-part, divisional, reissue or reexamination
applications claiming priority to those patents, but NOT including the
RMDX Carve-Outs or the RMDX Licensed Patents. The RMDX CNS
Patents shall also include all claims of existing patents and patent
applications (domestic or foreign) listed on Exhibit G, which fall within
the Veridian Fields of Use. The RMDX CNS Patents shall also
include all claims of future patents and patent applications (domestic or
foreign), claiming priority to any patent or patent application listed on
Exhibit G, which fall within the Veridian Fields of Use. The
RMDX CNS Patents shall also include all patents RMDX acquires or obtains
the right to enforce during the term of the Covenant Not to Sue referenced
in section 7 of this Agreement. A list of all RMDX’s (i) United
States and foreign counterpart patent applications and (ii) United States
and foreign counterpart issued patents that fall within the definition of
“RMDX CNS Patents” is attached hereto as Exhibit H, and shall be updated
by RMDX upon request by STOP.
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The
term “Licensed Products” shall mean and refer to any products, systems,
methods or processes falling within the scope of one or more claims of the
Licensed STOP Patents, in the case of the license to RMDX, or the Licensed
RMDX Patents, in the case of the license to
STOP.
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For
purpose of calculating royalty obligations pursuant to this Agreement, the
term “License Base Revenues” shall mean and refer to revenues generated by
sales and other dispositions of Licensed Products
by RMDX and its Subsidiaries. For the period from October 1,
2009 through September 30, 2012, License Base Revenues shall only
represent revenue from the sale and dispositions of Licensed Products that
exceed a cumulative total of $XXXXXXX in sales during that total period,
calculated in the fashion set forth in Exhibit I hereto. For
all periods subsequent to September 30, 2012, License Base Revenues shall
include any and all revenues calculated in the fashion set forth in
Exhibit I hereto, regardless of the amounts calculated for periods prior
thereto. The License Base Revenues shall be reported in RMDX’s
quarterly and annual SEC filings under a Segment Reporting note found in
“Notes to Condensed Consolidated Financial Statements.” License
Base Revenues shall be subject to royalties, as set forth
hereinafter.
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PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION. XXXXX
INDICATES REDACTED LANGUAGE.
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The
term “Veridian Fields of Use” shall mean and refer to the following fields
of use, irrespective of whether uses in these fields now exist or arise in
the future:
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1.1.1.
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All
fields related to the tracking of
offenders;
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1.1.2.
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All
fields related to the use of tracking devices by or for law enforcement
agencies, including, without limitation, for the purpose of tracking
parolees, juvenile offenders, stolen property, gang members and gang
activities; victims and perpetrators,
etc.
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1.1.3.
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All
fields related to the national defense of any country or governmental
subdivision, including, but not limited to applications used by defense
and intelligence gathering agencies
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1.1.4.
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All
fields related to terrorism and
counter-terrorism
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The
term “Settlement Fee” shall mean the sum of $1,150,000 (One million,
one hundred and fifty thousand and 00/100 dollars),
representing the guaranteed financial obligation of RMDX to STOP payable
during the first three years after October 1,
2009.
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“Party”
shall mean STOP, MICHELLE, RMDX or SecureAlert, as the case may
be.
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2.
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General
Purpose of Agreement The
purposes of the Parties in entering into this Agreement include, but are
not limited to, the
following:
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Resolve
the Texas and California
Litigations;
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Cross-license
the Licensed RMDX Patents and Licensed STOP Patents, pursuant to the terms
set forth in sections 3-6 hereof;
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Provide
a mechanism for RMDX and STOP to exchange patent rights so that each party
recovers the value of its respectively licensed patents and enjoys the
design freedom resulting from the authorized use of the other party's
licensed patents; and
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Provide
for a five-year period in which the Parties will be free from suit based
on the RMDX CNS Patents and STOP CNS Patents under the terms of a mutual
covenant not to sue.
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3.
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Grant of
Cross-Licenses
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STOP
hereby grants to RMDX a non-exclusive license under the Licensed STOP
Patents to make, have made, use, sell, offer to sell and import Licensed
Products within the Veridian Fields. This license does not
include any license to make, have made, use, sell, offer to sell and
import products or methods falling within the STOP
Carve-Outs. The license shall be personal to RMDX, subject to
the provisions of this Agreement relating to sub-licensing of Subsidiaries
(section 3.5) and assignment
(section 18.1). The license to RMDX shall be royalty bearing as
discussed in section 5
below.
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PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION. XXXXX
INDICATES REDACTED LANGUAGE.
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RMDX
hereby grants to STOP a non-exclusive license under the Licensed RMDX
Patents to make, have made, use, sell, offer to sell and import Licensed
Products and related methods. This license does not include any
license to make, have made, use, sell, offer to sell or import products or
methods falling
within the RMDX Carve-Outs. The license shall be personal to
STOP, subject to the provisions of this Agreement relating to
sub-licensing of Subsidiaries (section 3.5) and assignment (section
18.1). The license to STOP shall be fully paid up, based on the
offset and other consideration set forth in section 5
below.
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Unless
earlier terminated for breach (subject to cure period), the license
granted to RMDX herein shall continue in effect until all of the claims of
the Licensed STOP Patents have (i) expired, or (ii) have been declared
invalid or unenforceable by the U.S. Patent and Trademark Office or a
court of competent jurisdiction and all appellate rights related thereto
have been exhausted or expired.
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Unless
earlier terminated for breach (subject to cure period), the license
granted to STOP herein shall continue in effect until all of the claims of
the Licensed RMDX Patents have (i) expired, or (ii) have been declared
invalid or unenforceable by the U.S. Patent and Trademark Office or a
court of competent jurisdiction and all appellate rights related thereto
have been exhausted or expired.
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The
licenses granted herein include the right to grant sublicenses to
Subsidiaries who are Subsidiaries as of the Effective Date, and any such
sublicenses shall be retroactively effective as to such
Subsidiaries. Any sublicense granted to an entity that becomes
a Subsidiary after the Effective Date shall be effective from the date of
grant, but shall have no effect on the liability of such a Subsidiary for
infringement occurring prior to the grant of the
sublicense. Similarly, at such time as a Subsidiary ceases to
be a Subsidiary, any sublicense granted to it shall immediately
terminate. Any sublicense granted under this Agreement shall
immediately terminate if the sublicensor's license is terminated pursuant
to the provisions of this Agreement. Upon granting a
sublicense, a sublicensing Party shall promptly notify the other Party of
such sublicense in the manner provided for in this
Agreement. Notwithstanding the foregoing, for purposes of this
section 3.5 only, Omnilink Systems, Inc. and Pro Tech Monitoring, Inc., or
any affiliates thereof, for so long as the Texas Litigation is pending
against Omnilink or Pro Tech (including any appeals, but in any case no
more than three (3) years from the Effective Date hereof), cannot qualify
as Subsidiaries of any Party to this
Agreement.
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4.
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Consideration to
RMDX
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XXXXX
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PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION. XXXXX
INDICATES REDACTED LANGUAGE.
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5.
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Consideration to
STOP
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XXXXX
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Settlement Fee:
The Settlement Fee set forth in this section 5.2
represents an irrevocable financial obligation payable by RMDX to STOP
under this Agreement. The Settlement Fee is the net amount
payable in consideration of the dismissals of the Texas Litigation and the
California Litigation, and is an obligation of RMDX as of the Effective
Date, but shall be paid on the schedule provided for in this
Agreement.
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RMDX
Settlement Fee Schedule (Table)
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Term
Periods
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Annual
Payment
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Quarterly
Payment
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QE
12-31-09 through QE 09/30/10
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$XXXXXXXXX
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$XXXXXXXXXXX
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QE
12-31-10 through QE 09/30/11
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$XXXXXXXXX
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$XXXXXXXXXXX
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QE
12-31-11 through QE 09/30/12
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$XXXXXXXXX
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$XXXXXXXXXXX
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Total
Settlement Fee Obligation
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$XXXXXXXXX
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Quarterly Payment
Schedule
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Payment Due
Date
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Quarters
Ending 12/31
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March
1st
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Quarters
Ending 3/31
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June
1st
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Quarters
Ending 6/30
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September
1st
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Fiscal
Year Ending 9/30
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December
1st
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Royalties
The
royalty provisions set forth in this Agreement represent the “net” (offset)
value owing by RMDX to STOP, considering all the provisions of this Agreement,
including but not limited to, the exchange of license grants, covenants and the
potential research and development opportunities available from the respective
patents. That is, but for the above-cited items that are extended by
RMDX to STOP, the royalty amount owed by RMDX to STOP would be
greater. In consideration of the foregoing, including STOP’s license
of the STOP Licensed Patents, RMDX agrees to pay STOP a royalty, subject to the
adjustments of section 6. Each Party acknowledges that it is
receiving good and valuable consideration from the other. RMDX will
pay STOP a royalty of the greater of (i) XXXXX of the License Base Revenues, or
(ii) $XXXXX per covered activated unit per day as described in Exhibit
I. No royalties shall be due or owed for lost or stolen products.
Payment of the royalties due under this Section 5.3 shall commence at such time
as RMDX realizes revenues from sales qualifying as License Base Revenues under
section 1.19 defined herein. Such royalties shall be an obligation of
RMDX, and are payable for as long as RMDX realizes License Base Revenues and a
minimum of one (1) claim for any one (1) of the Licensed Stop Patents remains
valid and enforceable. The royalties payable under this section 5.3
shall be subject to the conditional adjustments of sections 6 and 8 below and
the provisions of this Agreement relating to termination. The
royalties owed under this section 5.3 shall be payable independent of whether or
not RMDX uses the technology claimed in the Licensed STOP
Patents. The provisions of this section 5 and related sections are
binding upon RMDX and its successors, including without limitation, any acquirer
of RMDX or its assets, regardless of the form of acquisition, and are therefore
payable by RMDX or its successors to STOP.
Rolling
Advance
In order to ensure that STOP is able to collect the amounts due hereunder,
RMDX agrees to maintain an adjustable, Rolling Advance on a quarterly
basis.
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5.1.1.
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The
Rolling Advance shall be maintained at an amount which is the greater of
any quarterly Settlement Fee then owed and the adjusted Rolling Advance
calculated pursuant to section 5.4.3
below.
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5.1.2.
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The
first rolling advance payment (“the First Rolling Advance”) is due within
five (5) business days of the Effective Date, and shall be in the amount
of $XXXXX.
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5.1.3.
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At
the end of the quarter in which RMDX realizes License Base Revenues, the
Rolling Advance will be calculated to determine whether such needs to be
increased or decreased based upon the royalties actually due, and paid,
for that quarter. If the royalties based on actual sales totals
for that quarter exceed the then Rolling Advance, RMDX shall remit such
excess with the next quarterly royalty payment to be held as part of the
Rolling Advance. If, on the other hand, the then Rolling
Advance exceeds the royalties actually due for the quarter, such excess
shall apply as a credit against the next quarter’s royalty payment and the
Rolling Advance shall be adjusted downwardly
accordingly.
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PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION. XXXXX
INDICATES REDACTED LANGUAGE.
In the
event that RMDX does not make any payment set forth in this section, STOP shall
have the right to terminate the licenses and rights granted to RMDX and file a
patent infringement action, or commence a contract action to recover the monies
RMDX owes it under the provisions of this Agreement, the action commenced being
in STOP's sole discretion. To the extent that applicable law does not
prohibit such a course of action, STOP may further commence a contract action,
decide not to pursue it further, and then commence a patent infringement
action. Notwithstanding the foregoing, STOP shall not have any claim
for damages for periods, prior to and including periods during which RMDX has
made payments in accordance with this Agreement. The remedies of this
section 5 are subject to the cure periods of section 13.
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6.
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Adjustment of
Royalty
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XXXXX
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7.
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Covenant Not to
Sue
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PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION. XXXXX
INDICATES REDACTED LANGUAGE.
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Subject
to the termination provisions of section 13, STOP shall not sue RMDX for
infringement of the STOP CNS Patents for a period of five (5) years from
the Effective Date ("the five-year
period").
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Subject
to the termination provisions of section 13, RMDX shall not sue STOP for
infringement of the RMDX CNS Patents during the five-year
period.
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A
party's covenant not to sue the other party shall immediately terminate
during the five-year period upon a covenanting party's termination of its
licenses to the other party pursuant to the provisions of section 13 of
this Agreement. Accordingly, if STOP terminates its license
grant set forth in section 3.1, its covenant not to sue, as set forth in
section 7.1, shall also terminate. Similarly, if RMDX
terminates its license grant, as set forth in section 3.2, its covenant
not to sue set forth in section 7.2 shall also
terminate.
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The
covenants not to sue granted herein do not include a covenant not to sue
with respect to the STOP Carve-Outs or the RMDX
Carve-Outs.
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The
covenants not to sue granted herein include a covenant not to sue
Subsidiaries of the Parties to this Agreement who are Subsidiaries as of
the Effective Date. For Subsidiaries who become Subsidiaries
after the Effective Date, the covenants not to sue are effective only on a
prospective basis, and shall have no effect on liability of such a
Subsidiary for infringement occurring prior to its becoming a
Subsidiary. Similarly, at such time as a Subsidiary ceases to
be a Subsidiary, the covenants not to sue granted herein shall immediately
terminate as to that entity.
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Upon
the expiration or termination of the covenants not to sue granted herein,
STOP and RMDX shall be free to bring actions for infringement of their
respective CNS Patents, but only for damages accruing after the expiration
or termination of the five-year period of the covenant not to
sue.
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No
action for infringement of the STOP CNS Patents or RMDX CNS Patents shall
be brought against any Party to this Agreement upon the expiration or
termination of the covenants not to sue granted herein, unless and until
the following procedure has been
completed:
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7.1.1.
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Any
Party believing that another Party is infringing one or more claims of a
CNS Patent after the expiration or termination of the five-year covenant
not to sue granted herein shall notify in writing the Party it believes is
infringing, and inform that Party of its belief that infringement is
occurring.
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7.1.2.
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The
Parties shall thereafter engage in good-faith negotiations for a period of
not less than four (4) months in an attempt to resolve the claim of
infringement.
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7.1.3.
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If
the Parties are unable to resolve the claim of infringement by
negotiation, the Party asserting infringement may thereafter bring an
action against the other.
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7.1.4.
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This
section 7.7 shall not be construed to require any Party to grant a license
to another Party upon the expiration of the covenant not to
sue.
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7.1.5.
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Neither
the notice of infringement required by this section 7.7 nor any statements
made in the course of the negotiations required by this section 7.7 may be
asserted as a basis for a claim for declaratory
judgment. Similarly, no statement made in the notice or the
negotiations required by this section may be used in any subsequent
litigation involving the STOP or RMDX CNS
Patents.
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7.1.6.
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If
infringement of a CNS Patent occurs during the four-month negotiation
period referenced in this section 7.7, and the Parties are not able to
come to agreement as to a resolution of that infringement, damages for
infringement are not waived for the four-month period in which
negotiations proceeded.
|
|
8.
|
Most Favored
Nations
|
|
|
XXXXX
|
|
|
9.
|
Audit
|
|
|
STOP
shall have the right to have its independent auditors make an audit,
during normal business hours and upon reasonable notice, of all records
and accounts of RMDX and its Subsidiaries that bear upon the calculation
of License Base Revenues. Such audits shall occur not more than
once per calendar year. STOP shall pay the cost of such audit
unless the audit reveals discrepancies showing underpayments greater than
10% of those owed under this Agreement. If such discrepancies
occur, RMDX shall pay the cost of the
audit.
|
PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION. XXXXX
INDICATES REDACTED LANGUAGE.
|
10.
|
Disposition of Texas
and California Litigations
|
|
|
STOP
and RMDX shall execute a stipulation for dismissal in the form set forth
in Exhibit A hereto. Within five (5) business days of the
execution of this Agreement, RMDX shall file such stipulation for
dismissal in the California Litigation. The Parties shall file
an order of dismissal with the Court in California in the form attached
hereto as Exhibit J.
|
|
|
STOP,
MICHELLE and SecureAlert shall execute a stipulation for dismissal in the
form set forth in Exhibit B hereto. Within five (5) business
days of the execution of this Agreement, STOP and MICHELLE shall file such
stipulation for dismissal in the Texas Litigation. The Parties
shall file an order of dismissal with the Court in Texas in the form
attached hereto as Exhibit K.
|
|
|
As
soon as possible after the filing of the stipulation for dismissal
referenced in section 10.2 hereof, but not later than 3 business days
after such filing, SecureAlert and RMDX shall withdraw from any joint
defense or community of interest arrangement it may have with respect to
the ‘909 patent and the Texas Litigation. Notwithstanding the 3
day maximum time period for withdrawal, immediately upon execution of this
Agreement by all Parties hereto, RMDX shall cease all participation in any
joint defense or community of interest
agreement.
|
|
11.
|
Agreement not to
Contest Licensed and CNS
Patents
|
|
|
STOP
agrees that it will not, during the existence of the license granted by
RMDX herein, file any litigation, reexamination, reissue, protest or other
similar proceeding, in any U.S. or foreign court or in the United States
Patent and Trademark Office or foreign patent office contesting the
validity or enforceability of any of the RMDX Licensed Patents, or assert
or develop any defense or legal challenge to such patents, or assist any
third party in asserting or developing any defense or other legal
challenge to the RMDX Licensed
Patents.
|
|
|
During
the term of the Covenant Not to Sue, STOP agrees that it will not file any
litigation, reexamination, reissue, protest or other proceeding, in any
U.S. or foreign court or in the United States Patent and Trademark Office
or foreign patent office contesting the validity or enforceability of any
of the RMDX CNS Patents, or assert or develop any defense or legal
challenge to such patents, or assist any third party in asserting or
developing any defense or other legal challenge to the RMDX CNS
Patents.
|
|
|
RMDX
agrees that it will not, during the existence of the license granted by
STOP herein, file any litigation, reexamination, reissue, protest or other
proceeding, in any U.S. or foreign court or in the United States Patent
and Trademark Office or foreign patent office contesting the validity or
enforceability of any of the STOP Licensed Patents, or assert or develop
any defense or legal challenge to such patents, or assist any third party
in asserting or developing any defense or other legal challenge to the
STOP Licensed Patents.
|
|
|
During
the term of the Covenant Not to Sue, RMDX agrees that it will not file any
litigation, reexamination, reissue, protest or other proceeding, in any
U.S. or foreign court or in the United States Patent and Trademark Office
or foreign patent office contesting the validity or enforceability of any
of the STOP CNS Patents, or assert or develop any defense or legal
challenge to such patents or assist any third party in asserting or
developing any defense or other legal challenge to the STOP CNS
Patents.
|
|
|
RMDX
warrants that it has not, prior to the Effective Date, filed or had any
involvement in any reexamination or reissue proceeding with respect to any
Licensed STOP Patent or STOP CNS Patent, except with respect to
reexamination proceeding currently pending for the ‘909 patent and the
reissue proceeding pending with respect to STOP’s ‘481
patent.
|
|
|
STOP
warrants that it has not, prior to the Effective Date, filed or had any
involvement in any reexamination or reissue proceeding with respect to any
Licensed RMDX Patent or RMDX CNS
Patent.
|
|
|
Each
Party represents and warrants to the other that it has not formed or
acquired any company that meets the definition of Subsidiary between
October 1, 2009 and the Effective Date. The parties shall list
all Subsidiaries as of the Effective Date on Exhibit
L.
|
|
|
The
provisions of section 11 shall apply to any present or future Subsidiary
of STOP and RMDX to the same extent as they apply to STOP and
RMDX.
|
|
12.
|
Releases
|
|
|
STOP
hereby releases and forever discharges RMDX and all of its Subsidiaries
who are Subsidiaries as of the Effective Date, along with their respective
past and present principals, directors, officers, agents, employees,
shareholders, and customers (hereinafter collectively, "released parties")
from and against all Claims (including, but not limited to, Claims
asserted in the Texas Litigation or that otherwise could have been brought
or asserted in such litigation), whether known or unknown, existing or
potential, or suspected or unsuspected, which STOP had or asserted or
could have asserted, has or asserts or could assert, or may hereafter have
or assert against RMDX and SecureAlert and all of their present
Subsidiaries. This release shall not operate to release
competitors of STOP who are not Subsidiaries of RMDX as of the Effective
Date. This release shall be effective only as to Claims arising
prior to the Effective Date.
|
|
|
MICHELLE
hereby releases and forever discharges RMDX and all of its Subsidiaries
who are Subsidiaries as of the Effective Date, along with their respective
past and present principals, directors, officers, agents, employees,
shareholders, and customers (hereinafter collectively, "released parties")
from and against all actions, claims, suits, demands, damages, judgments,
causes of action, debts, liabilities, promises, or controversies of any
kind whatsoever, whether presently known or unknown, that MICHELLE alone
or along with STOP has or had or may have against any such released
parties arising from the Texas Litigation or arising or claimed to arise
out of any infringement or asserted infringement of the '909 Patent. This
release shall not operate to release any competitors of MICHELLE who are
not Subsidiaries of RMDX as of the Effective Date. This release
shall be effective only as to Claims arising prior to the Effective
Date.
|
|
|
RMDX
and Secure Alert hereby release and forever discharge STOP and all of its
Subsidiaries who are Subsidiaries as of the Effective Date, along with
their respective past and present principals, directors, officers,
agents, employees, and shareholders, and customers (hereinafter
collectively, "released parties") from and against all Claims (including,
but not limited to, those Claims asserted in the California Litigation or
that otherwise could have been brought or asserted in such litigation),
whether known or unknown, existing or potential, or suspected or
unsuspected, which RMDX or Secure Alert had or asserted or could have
asserted, has or asserts or could assert, or may hereafter have or assert
against STOP and all of its present Subsidiaries. This release
shall not operate as a release of competitors of RMDX or Secure Alert who
are not Subsidiaries of STOP as of the Effective Date. This
release shall be effective only as to Claims arising prior to the
Effective Date
|
|
13.
|
Termination
|
|
|
In
the event of a material breach of this Agreement, the non-breaching Party
may, in addition to any other remedies it may have, terminate the license
granted by it in section 3 hereof to any breaching Party by giving not
less than 120 days written notice of the alleged breach, specifying the
nature of the breach. The party alleged to be in breach shall
have a period of 120 days after receipt of notice to cure any alleged
breach. If cure occurs within said 120-day period, the notice
of breach shall be ineffective. The non-breaching Party's
termination of its license to the breaching Party shall also automatically
and at the same time terminate (i) any and all sublicenses granted by the
breaching Party and (ii) the covenant not to sue extended by the
non-breaching Party to the breaching Party and as applicable to any of the
breaching Party's Subsidiaries.
|
|
|
Notwithstanding
the termination of the rights of a breaching Party hereunder, the
non-breaching Party shall continue to have the benefit of its license and
the covenant not to sue as respectively set forth in sections 3 and 7 of
this Agreement.
|
|
14.
|
Press Release, Other
Disclosure and
Confidentiality
|
|
|
The
Parties shall agree upon and issue a joint press release within five (5)
business days hereof. Other than the express terms of the press
release, the Parties agree that the terms of this Agreement are
confidential and shall not be disclosed to any third party for any
purpose, except to the extent that a Party is required to disclose the
terms of this Agreement by the Securities and Exchange Commission, GAAP or
other applicable governmental authority and, in such case, only the terms
of this Agreement shall be disclosed. In the event such
disclosure contains more than the recitation of all or a portion of the
terms of this Agreement, then the entire disclosure must be approved in
writing by the Parties prior to its
disclosure.
|
|
|
Notwithstanding
the foregoing, STOP shall have the right, in its sole discretion, to use
and disclose this Agreement, a) in the ‘909 Patent reexamination, redacted
to disclose only that i) RMDX and SecureAlert have taken a license under
the ‘909 Patent, ii) RMDX and SecureAlert will pay STOP for such license
rights, and iii) RMDX and SecureAlert have stipulated that the claims of
the ‘909 Patent are valid and enforceable; and b) in the Texas Litigation,
including all of its terms and conditions, provided that STOP takes steps
to protect its confidentiality, including, but not limited to, production
as “Confidential” under the terms of the Protective Order in the Texas
Litigation, and filing any documents containing this Agreement or making
reference to its terms in the Texas Litigation under seal. In
any case, STOP shall be permitted to use and disclose this Agreement as
part of any trial in the Texas
Litigation.
|
|
15.
|
Warranties
|
|
|
STOP
warrants that it owns all right, title and interest in and to Licensed
STOP Patents 6,774,797, 11/847,106, 11/847,146, and all foreign
counterparts thereof as listed on Exhibit C; and to STOP CNS Patents
6,703,936, 6,992,582, 7,619,513, and all foreign counterparts thereof as
listed on Exhibit E; and is authorized to grant the license, release and
covenant not to sue granted herein, except as set forth in section 15.3
below.
|
|
|
Michelle
warrants that it owns all right, title and interest in and to Licensed
STOP Patents RE 39,909 and 11/806,841, and to STOP CNS Patents 5,867,103;
6,160,481; 6,218,945; 6,512,456; and RE 38,838; and is authorized to grant
the license, release and covenant not to sue granted
herein.
|
|
|
STOP
does not warrant that it owns title to the ‘909 Patent, but warrants and
represents that it has the absolute and unfettered right to grant the
license and release granted herein with respect to the ‘909
Patent. STOP further agrees to indemnify and hold RMDX harmless
from any and all claims by MICHELLE and/or any third party for
infringement of the ‘909 Patent, provided such claims arise from STOP's
breach of its exclusive license agreement with MICHELLE with respect to
the '909 Patent. Such indemnity shall include indemnity for any
award or settlement RMDX is required to pay for infringement of the ‘909
Patent, as well as all attorneys’ fees and costs associated
therewith.
|
|
|
RMDX
warrants that it owns all right, title and interest in and to the ‘122
Patent, the Licensed RMDX Patents and RMDX CNS Patents and is authorized
to grant the license, release and covenant not to sue granted
herein.
|
|
|
Each
Party hereto represents and warrants that it has not transferred, assigned
or otherwise alienated any of the Claims released herein prior to the
Effective Date.
|
|
|
Each
Party hereto represents and warrants that the execution of this Agreement
and the covenants herein are within its authority and that this Agreement
is executed pursuant to necessary and customary
authorizations.
|
|
16.
|
Notice
|
|
|
Any
Notice required under this Agreement shall be in writing, sent by
certified or registered mail, addressed and served as
follows:
|
To
STOP:
Satellite
Tracking of People, LLC
1212
North Post Oak Road
Suite
100
Houston,
TX 77055
With copy
to:
David E.
De Lorenzi, Esq.
Gibbons
P.C.
One
Gateway Center
Newark,
NJ 07102-5310
To
MICHELLE:
Michelle
Enterprises, LLC
19080
S.W. 44th
Street
Dunnellon,
Florida
To RMDX
and SecureAlert:
RemoteMDx,
Inc.
150 West
Civic Center Drive
Suite
400
Salt Lake
City, UT 84070
SecureAlert,
Inc.
150 West
Civic Center Drive
Suite
400
Salt Lake
City, UT 84070
With copy
to:
Brent P.
Lorimer, Esq.
Workman
Nydegger
60 East
South Temple, Suite 1000
Salt Lake
City, UT 84111
|
17.
|
Stipulations of
Validity and Infringement
|
|
|
STOP
hereby stipulates that the claims of the ‘122 Patent are valid,
enforceable and infringed by the BluTag device and related system software
and use of same.
|
|
|
RMDX
hereby stipulates that the claims of the ‘909 Patent are valid,
enforceable and infringed by the TrackerPal I and II devices and related
system software and use of same.
|
|
18.
|
Assignment or
Transfer
|
|
|
Subject
to the provisions of section 3.5 above, the licenses and rights granted
hereunder shall not be transferable or assignable by the licensed party,
except to a third party that acquires all or substantially all of the
business of the licensed Party, provided that the licensing Party has not,
as of the effective date of the transfer, commenced any action against the
proposed assignee for infringement of any patent or patents that are
licensed under the license being transferred or assigned. For
the purpose of section 18.1, patent or patents which are licensed by STOP
include those in the definition of Licensed STOP Patents or STOP CNS
Patents, and with respect to RMDX, includes any patent or patents which
are licensed by RMDX that include those in the definition of Licensed RMDX
Patents or RMDX CNS patents. The restrictions on transfer of the STOP
and RMDX CNS patents shall expire with the expiration or termination of
the covenants not to sue of section 7 hereof. Any transfer or
assignment of licenses or rights granted hereunder shall not operate to
relieve the transferee of any liability for infringement arising prior to
the date of assignment or transfer. Further, any assignment or
transfer not specifically prohibited above, shall require the written
consent of the licensing Party, such consent not to be unreasonably
withheld.
|
|
19.
|
Miscellaneous
|
Understanding of
Agreement
Each of the Parties understands this Agreement, and the terms and conditions
contained herein, and has relied upon its own judgment, belief, knowledge,
understanding and expertise after careful consultation with its own legal
counsel concerning the legal effect of this Agreement and all of the terms and
conditions of this Agreement.
Final Integrated
Agreement
This Agreement, and any documents referred to herein, constitute the
entire, final and binding understanding between the parties with respect to the
subject matter hereof. No other statement or representation, written
or oral, express or implied, has been relied upon in executing this Agreement,
and all prior discussions, statements, and negotiations made or that have
occurred prior to the date of the Agreement are deemed merged into this
Agreement, and shall not be used for any purpose whatsoever.
Binding
Effect
This Agreement shall bind and inure to the benefit of the Parties and to
their respective successors and permitted assigns in interest. This
section shall be subject to the specific prohibitions on assignment set forth
above.
Severability
If any provision of the Agreement is held void or for any reason unenforceable,
the remaining portions of this Agreement will remain in full force and
effect.
Amendment
This Agreement may not be amended, altered, modified, or otherwise changed
in any respect except by a writing duly executed by the Parties, or their
authorized representatives.
Joint
Negotiation
This Agreement has been negotiated and reviewed by each of the Parties, and no
provision of the Agreement shall be construed against any Party on the ground
that such Party was the drafter of that provision of the Agreement or for any
other reason.
Counterparts
This Agreement may be executed by the Parties in counterparts, each of which may
be deemed an original and all of which together shall constitute a single
instrument.
Additional Necessary
Documents The Parties, and each of them, agree to
do all things necessary, including, but not limited to, execution of additional
documents, as may be reasonably required, in order to carry out the purposes and
intent of this Agreement and to fulfill their obligations under this
Agreement.
Choice of Law and
Venue
This Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the State of Delaware, without giving effect to its rules
pertaining to conflict of laws. The parties hereto agree that
the exclusive jurisdiction and venue for any action under this Agreement if
brought
by STOP shall be the state and federal courts sitting in Texas, and if brought
by RMDX shall be the state and federal courts sitting in Utah, and each of the
parties hereby agree and submits itself to the exclusive jurisdiction and venue
of such courts for such purpose.
WHEREFORE,
the Parties hereto have caused this Agreement to be duly executed and
acknowledged as of the date set forth below.
SIGNATURES
TO FOLLOW
|
STOP
|
MICHELLE
ENTERPRISES, LLC
|
||
|
(signs
below to indicate its consent to this Settlement Agreement and its
obligations under sections 10.2, 12.2 and 15.2.)
|
|||
|
By:/s/ Steve
Logan
|
By:/s/ Diana
Taylor
|
||
|
Its:CEO
|
Its:
President
|
||
|
RMDX
|
SECUREALERT
|
||
|
By:/s/ John L. Hastings,
III
|
By:/s/ John L. Hastings,
III
|
||
|
Its
President
|
Its
President
|
Exhibit
A
Brent P.
Lorimer (Admitted Pro Hac
Vice)
Thomas R.
Vuksinick (Admitted Pro Hac
Vice)
Chad E.
Nydegger (Admitted Pro Hac
Vice)
Workman |
Nydegger A Professional Corporation
1000
Eagle Gate Tower, 60 East South Temple
Salt Lake
City, Utah 84111
Gary M.
Anderson (State Bar No. 97385)
Michael
J. Moffatt (State Bar No. 180343)
Ken C.
Cheney (State Bar No. 257079)
Fulwider
Patton LLP
Howard
Hughes Center
6060
Center Drive, Tenth Floor
Los
Angeles, California 90045
Attorneys for
Plaintiff RemoteMDx,
Inc.
UNITED
STATES DISTRICT COURT
CENTRAL
DISTRICT OF CALIFORNIA
WESTERN
DIVISION
|
REMOTEMDx,
INC.,
Plaintiff and
Counterdefendant,
v.
SATELLITE
TRACKING OF
PEOPLE,
L.L.C., aka STOP,
LLC,
Defendant and
Counterclaimant.
|
Case
No. CV-08-02899 ODW (FMOx)
STIPULATION
FOR DISMISSAL OF CLAIMS AND COUNTERCLAIMS WITH PREJUDICE
Assigned
to the Honorable
Otis
D. Wright, II
|
Plaintiff
and Counterclaim-Defendant RemoteMDx, Inc. (“RemoteMDx”) and
Defendant and Counterclaim-Plaintiff Satellite Tracking of People, L.L.C., aka
STOP, LLC (“STOP”), through their respective counsel, hereby stipulate that
RemoteMDx has agreed to dismiss with prejudice all claims asserted against STOP,
and STOP has agreed to dismiss with prejudice all counterclaims and defenses
asserted against RemoteMDx. Accordingly, RemoteMDx and STOP jointly
stipulate to the dismissal with prejudice of all claims and counterclaims
between them, respectively, asserted in this case. The parties
further stipulate that they shall each bear their own attorneys’ fees and
costs. A proposed Order conforming to this Stipulation is submitted
herewith.
|
DATED: January
29, 2010
|
Respectfully
submitted,
|
|
|
|
Workman
| Nydegger
|
|
|
|
By /s/
Brent P. Lorimer
|
|
|
Brent P. Lorimer
|
||
|
Attorneys
for Plaintiff RemoteMDx, Inc.
|
||
|
GIBBONS
P.C.
|
||
|
By /s/
Thomas J. Vetter
|
||
|
Thomas J. Vetter
|
||
|
Attorney
for Defendant Satellite
|
||
|
Tracking
of People, L.L.C.
|
CERTIFICATE
OF SERVICE
I hereby
certify that on January 29, 2010, I electronically filed the foregoing
STIPULATION FOR DISMISSAL OF CLAIMS AND COUNTERCLAIMS WITH PREJUDICE with the
Clerk of the Court using the CM/ECF system, which will send notification of such
filing to the following: cdloomis@bakerlaw.com;
tvetter@gibbonslaw.com;
and wstein@gibbonslaw.com.
|
/s/
Brent P. Lorimer
|
||
Exhibit
B
UNITED
STATES DISTRICT COURT
EASTERN
DISTRICT OF TEXAS
MARSHALL
DIVISION
|
SATELLITE
TRACKING OF PEOPLE, LLC (a/k/a STOP, LLC) and MICHELLE ENTERPRISES,
LLC,
Plaintiff,
v.
PRO
TECH MONITORING, INC., OMNILINK SYSTEMS, INC., and SECUREALERT,
INC.,
Defendants.
|
)
)
)
)
)
)
)
)
)
)
)
)
)
|
CASE
NO. 2:08-CV-116 (CE)
JURY
TRIAL DEMANDED
|
STIPULATION
FOR DISMISSAL OF
CLAIMS
AND COUNTERCLAIMS
WITH
RESPECT TO SECUREALERT, INC.
Plaintiffs
and Counterclaim-Defendants Satellite Tracking of People, LLC and Michelle
Enterprises, LLC and Defendant and Counterclaim-Plaintiff SecureAlert, Inc.
(“SecureAlert”), through their respective counsel, hereby stipulate that
Plaintiffs have agreed to dismiss with prejudice all claims asserted against
SecureAlert, and SecureAlert has agreed to dismiss with prejudice all
counterclaims and defenses asserted against Plaintiffs. Accordingly,
Plaintiffs and SecureAlert jointly stipulate to the dismissal with prejudice of
all claims and counterclaims between them, respectively, asserted in this
case. The parties further stipulate that they shall each bear their
own attorneys’ fees, expenses, and costs. The Court shall
retain such jurisdiction over SecureAlert as is necessary to effectuate the
terms and conditions of the settlement agreement between Plaintiffs and
SecureAlert. This stipulation only relates to Plaintiffs’ claims
against SecureAlert and SecureAlert’s claims against
Plaintiffs. Plaintiffs’ claims against Defendants Omnilink Systems,
Inc. and Pro Tech Monitoring, Inc. remain. A proposed Order
conforming to this Stipulation is submitted herewith.
DATED
this 29th day of January, 2010.
Respectfully
submitted,
Workman
| Nydegger
By /s/ Brent P.
Lorimer
Brent
P. Lorimer
Attorneys for Defendant SecureAlert,
Inc.
GIBBONS P.C.
By /s/ Thomas J.
Vetter
Thomas J. Vetter
Attorneys for Plaintiffs
Satellite
Tracking
of People, L.L.C. and Michelle Enterprises, LLC
Exhibit
C
UNITED
STATES PATENTS
|
Patent
Number
|
Issue
Date
|
Title
|
|
RE
39,909
|
November
6, 2007
|
Tracking
system for locational tracking of monitored persons
|
|
6,774,797
|
August
10, 2004
|
Wireless
tag and monitoring center system for tracking the activities of
individuals
|
UNITED
STATES PATENT APPLICATIONS
|
Application
Number
|
Filing
Date
|
Title
|
|
11/847,106
|
August
29, 2007
|
Active
wireless tag and auxiliary device for use with monitoring center for
tracking individuals or objects
|
|
11/847,146
|
August
29, 2007
|
Wireless
tag and auxiliary device for use with home monitoring unit for tracking
individuals or objects
|
|
11/806,841
|
June
4, 2007
|
Monitoring
system
|
FOREIGN
PATENTS
None
FOREIGN
PATENT APPLICATIONS
|
Corresponding
United States Patent or Application Number
|
Foreign
Application Number
|
Foreign
Filing Date
|
Foreign
Application Title
|
|
6,774,797
|
EP
1363258 (A1)
|
May
12, 2003
|
Wireless
tag and monitoring center system for tracking the activities of
individuals
|
|
11/847,106
|
CA
2,661,910
|
August
29, 2007
|
Active
wireless tag and auxiliary device for use with monitoring center for
tracking individuals or objects
|
|
11/847,106
|
UK
GB 0903439.8
|
August
29, 2007
|
Active
wireless tag and auxiliary device for use with monitoring center for
tracking individuals or objects
|
|
11/847,146
|
CA
2,662,023
|
August
29, 2007
|
Wireless
tag and auxiliary device for use with home monitoring unit for tracking
individuals or objects
|
|
11/847,146
|
UK
GB 0903440.6
|
August
29, 2007
|
Wireless
tag and auxiliary device for use with home monitoring unit for tracking
individuals or objects
|
|
11/847,146
|
Hong
Kong 09111371.7
|
August
29, 2007
|
Wireless
tag and auxiliary device for use with home monitoring unit for tracking
individuals or objects
|
Exhibit
D
UNITED
STATES PATENTS
None
UNITED
STATES PATENT APPLICATIONS
|
Application
Number
|
Filing
Date
|
Title
|
|
12/576,090
|
October
8, 2009
|
Technique
for detecting tracking device tampering using an auxiliary
device
|
|
12/576,054
|
October
8, 2009
|
Technique
for detecting tracking device
tampering
|
FOREIGN
PATENTS
None
FOREIGN
PATENT APPLICATIONS
|
Corresponding
United States Patent or Application Number
|
Foreign
Application Number
|
Foreign
Filing Date
|
Foreign
Application Title
|
|
12/576,054
|
CA
2,682,072
|
October
10, 2009
|
Technique
for detecting tracking device
tampering
|
Exhibit
E
UNITED
STATES PATENTS
|
Patent
Number
|
Issue
Date
|
Title
of Patent
|
|
5,867,103
|
February
2, 1999
|
Monitored
Person Tracking System
|
|
6,160,481
|
December
12, 2000
|
Monitoring
System
|
|
6,218,945
|
April
17, 2001
|
Augmented
Monitoring System
|
|
6,512,456
|
January
28, 2003
|
Mobile
Medical Monitoring Device
|
|
6,703,936
|
March
9, 2004
|
System
and method for tracking movement of individuals
|
|
RE
38,838
|
October
18, 2005
|
Monitoring
System
|
|
6,992,582
|
January
31, 2006
|
System
and method for tracking movement of individuals
|
|
7,619,513
|
November
17, 2009
|
System
and method for tracking movement of
individuals
|
UNITED
STATES PATENT APPLICATIONS
None
FOREIGN
PATENTS
None
FOREIGN
PATENT APPLICATIONS
|
Corresponding
United States Patent or Application Number
|
Foreign
Application Number
|
Foreign
Filing Date
|
Foreign
Application Title
|
|
6,703,936
|
EP
1433145 (A1)
|
September
26, 2002
|
System
and method for tracking movement of individuals
|
|
6,703,936
|
CA
2461837 (A1)
|
September
26, 2002
|
System
and method for tracking movement of
individuals
|
Exhibit
F
US
Patents and Applications
|
Title
|
Application
No.
|
Patent/
Registration No.
|
|
Remote
Tracking and Communication Device
|
11/202427
|
7330122*
|
|
Remote
Tracking and Communications Device
|
12/028088
|
Pending*
|
|
Remote
Tracking System and Device With Variable Sampling and Sending Capabilities
Based on Environmental Factors
|
11/486991
|
7545318
|
|
A
System and Method for Monitoring Individuals Using a Beacon and
Intelligent Remote Tracking Device
|
12/399151
|
Pending*
|
Foreign
Patents and Applications
|
Title
|
Application
No.
|
|
Remote
Tracking and Communication Device - EPO
|
06836098.1*
|
|
Remote
Tracking and Communication Device - Brazil
|
PI0614742.9*
|
|
Remote
Tracking and Communication Device - Canada
|
2617923*
|
|
Remote
Tracking and Communication Device - Mexico
|
MX/a/2008/001932*
|
|
A
System and Method for Monitoring Individuals Using a Beacon and
Intelligent Remote Tracking Device - PCT
|
PCT/US2009/036335*
|
|
*
|
The
license of this patent or patent application is limited to issued claims
that do not fall within the definition of RMDX Carve-Outs, as defined in
section 1.15 of the Settlement Agreement between the
parties.
|
Exhibit
G
US
Patents and Applications
|
Title
|
Application
No.
|
Patent/
Registration No.
|
|
PANIC
BUTTON PHONE
|
09/044497
|
6044257*
|
|
Emergency
Phone with Single-Button Activation
|
09/538364
|
6636732*
|
|
Emergency
Phone With Alternate Number Calling Capability
|
09/684831
|
7092695*
|
|
Emergency
Phone with Single-Button Activation
|
11/174191
|
7251471*
|
|
Emergency
Phone With Single Button Activation
|
11/830398
|
Pending *
|
|
Emergency
Phone for Automatically Summoning Multiple Emergency Response
Services
|
09/173645
|
6226510*
|
|
COMBINATION
EMERGENCY PHONE AND PERSONAL AUDIO DEVICE
|
09/185191
|
6285867*
|
|
Remote
Tracking and Communication Device
|
11/202427
|
7330122*
|
|
Remote
Tracking and Communications Device
|
12/028088
|
Pending*
|
|
ALARM
AND ALARM MANAGEMENT SYSTEM FOR REMOTE TRACKING DEVICES
|
11/486992
|
Pending*
|
|
A
Remote Tracking Device and a System and Method for Two-Way Voice
Communication Between the Device and a Monitoring Center
|
11/486989
|
Pending*
|
|
A
Remote Tracking System with a Dedicated Monitoring Center
|
11/486976
|
Pending*
|
Foreign
Patents and Applications
|
Title
|
Application
No.
|
Patent/
Registration No.
|
|
Emergency
Phone with Single-Button Activation - Japan
|
2001-571568
|
Pending*
|
|
Emergency
Phone with Single-Button Activation - China
|
01807350.6
|
01807350.6*
Pending
|
|
A
Remote Tracking System with a Dedicated Monitoring Center -
EPO
|
07812596.0
|
Pending*
|
|
A
Remote Tracking System with a Dedicated Monitoring Center - Brazil
|
PI0714367.2
|
Pending*
|
|
Remote
Tracking and Communication Device - EPO
|
06836098.1
|
Pending*
|
|
Remote
Tracking and Communication Device - Brazil
|
PI0614742.9
|
Pending*
|
|
Remote
Tracking and Communication Device - Canada
|
2617923
|
Pending*
|
|
Remote
Tracking and Communication Device - Mexico
|
MX/a/2008/001932
|
Pending*
|
|
*
|
The
Carve-Outs for this patent or patent application are limited to issued
claims that do fall within the definition of RMDX Carve-Outs, as defined
in section 1.15 of the Settlement Agreement between the
parties.
|
Exhibit
H
US
Patents and Applications
|
Title
|
Application
No.
|
Patent/
Registration No.
|
|
REMOTELY
CONTROLLABLE THERMOSTAT
|
09/513110
|
6260765
|
|
INTERFERENCE
STRUCTURE FOR EMERGENCY RESPONSE SYSTEM WRISTWATCH
|
09/651523
|
6366538
|
|
PANIC
BUTTON PHONE
|
09/044497
|
6044257*
|
|
Emergency
Phone with Single-Button Activation
|
09/538364
|
6636732*
|
|
Emergency
Phone With Alternate Number Calling Capability
|
09/684831
|
7092695*
|
|
Emergency
Phone with Single-Button Activation
|
11/174191
|
7251471*
|
|
Emergency
Phone With Single Button Activation
|
11/830398
|
Pending *
|
|
Emergency
Phone for Automatically Summoning Multiple Emergency Response
Services
|
09/173645
|
6226510*
|
|
COMBINATION
EMERGENCY PHONE AND PERSONAL AUDIO DEVICE
|
09/185191
|
6285867*
|
|
ALARM
AND ALARM MANAGEMENT SYSTEM FOR REMOTE TRACKING DEVICES
|
11/486992
|
Pending*
|
|
A
Remote Tracking Device and a System and Method for Two-Way Voice
Communication Between the Device and a Monitoring Center
|
11/486989
|
Pending*
|
|
A
Remote Tracking System with a Dedicated Monitoring Center
|
11/486976
|
Pending*
|
Foreign
Patents and Applications
|
Title
|
Application
No.
|
Patent/
Registration No.
|
|
A
Remote Tracking System with a Dedicated Monitoring Center -
EPO
|
07812596.0
|
Pending*
|
|
A
Remote Tracking System with a Dedicated Monitoring Center - Brazil
|
PI0714367.2
|
Pending*
|
|
Emergency
Phone with Single-Button Activation - Japan
|
2001-571568
|
Pending*
|
|
Emergency
Phone with Single-Button Activation - China
|
01807350.6
|
01807350.6*
|
|
*
|
The
inclusion of this patent or patent application as an RMDX CNS Patent is
limited to issued claims that do not fall within the definition of RMDX
Carve-Outs, as defined in section 1.15 of the Settlement Agreement between
the parties.
|
Exhibit
I
License
Base Revenues
For
purposes of section 1.19 of the Settlement Agreement entered into between RMDX
and STOP, License Base Revenues shall be calculated as set forth in this Exhibit
I.
|
1.
|
License
Base Revenues Subject
to the provisions of sections 2 and 3 below, License Base Revenues shall
consist of any and all revenues realized by RMDX and its Subsidiaries from
the use, sale, importation, lease, distribution or furnishing of any of
the following:
|
|
|
1.1.
|
Revenues
from any activated locational tracking device that utilizes GPS to
determine its location and is supported entirely about a single limb of
the monitored person, regardless of brand or manufacturer (hereinafter the
“One Piece Tracking Device”).
|
|
|
1.2.
|
Revenues
from any accessory related to a One Piece Tracking Device, including but
not limited to related, interactive beacons and victim
devices.
|
|
|
1.3.
|
Revenues
from locational tracking database services related to a One Piece Tracking
Device in section 1.1 or accessory in section
1.2.
|
|
|
1.4.
|
If
License Base Revenues are realized from RMDX or SecureAlert Contracts with
independent third parties, such License Base Revenues shall be the per
diem rate for each activated covered unit per day, as reflected in the
respective contract, provided that the resulting royalty is not less than
the minimum per day royalty per activated covered unit required by the
Settlement Agreement.
|
|
|
1.5.
|
If
License Base Revenues are realized by RMDX through intercompany transfers
or charges, such License Base Revenues shall be the greater of (i) $XXXXX
per activated covered unit per day, or (ii) the actual contractual
intercompany charge to that subsidiary related to each individual device,
but not less than minimum per day royalty per activated covered unit
required by the Settlement
Agreement.
|
2.
Non-Covered
Revenues License
Base Revenues shall not
include the following:
|
|
2.1.
|
Revenues
from any devices, accessories and services not falling within section 1
above.
|
|
|
2.2.
|
Revenues
from idle One Piece Tracking Devices provided the per day revenue
therefrom is less than $XXXXX.
|
|
|
2.3.
|
Revenues
from non-GPS devices not related to GPS device deployment described above
(e.g. AMS - SCRAM units, drug or alcohol
devices).
|
PORTIONS
OF THIS DOCUMENT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION. XXXXX
INDICATES REDACTED LANGUAGE.
|
|
2.4.
|
Revenues
from non-GPS related House Arrest devices, wherein the device worn by the
person does not have a GPS
receiver.
|
|
|
2.5.
|
Revenues
from non-offender – exclusively consumer based services (home security,
healthcare, Personal Emergency Response Systems,
etc.).
|
|
|
2.6.
|
Revenues
from private probation, case management and related services, subject to
section 3 below.
|
|
|
2.7.
|
Revenues
from all other products or services, which are unrelated to GPS device
deployments on a single limb and/or for auxiliary support devices/services
related thereto.
|
|
|
2.8.
|
Revenues
related to lost or stolen devices, and itemized billings for: freight
and/or shipping charges, applicable federal, state and local sales and use
taxes, insurance, customs and export
duties.
|
|
|
2.9.
|
Revenues
from any devices solely used to track inanimate
objects.
|
|
3.
|
Treatment of License
Base Revenues Mixed With Revenues From Private Probation, Case Management
and Related Services
|
|
|
3.1.
|
The
parties acknowledge that RMDX may provide private probation, case
management or related services in conjunction with products or services
that generate License Base Revenues. The parties further
acknowledge that the contracts for such services may, or may not, include
an express allocation of value to License Base
Revenues.
|
|
|
3.2.
|
When
RMDX provides private probation, case management or related services
(“Probation and Case Management Services”) in conjunction with products or
services that generate License Base Revenues, License Base Revenues shall
be calculated as follows:
|
|
|
3.2.1.
|
If
an applicable contract expressly allocates percentages or dollar values
between Probation and Case Management Services and License Base
Revenues, License Base Revenues shall include the greater of the express
allocation to License Base Revenues or be deemed to include revenues in an
amount sufficient to produce a royalty not less than the minimum per
covered activated unit per day royalty provided for in the Settlement
Agreement.
|
|
|
3.2.2.
|
If
the applicable contract does not expressly allocate percentages or dollar
values between Probation and Case Management Services
and License Base Revenues, License Base Revenues shall be
deemed to include revenues in an amount sufficient to produce a royalty
not less than the minimum per covered activated unit per day royalty
provided for in the Settlement
Agreement.
|
|
4.
|
Reporting
|
|
|
4.1.
|
RMDX
shall report License Base Revenue in the Management
Discussion and Analysis section of its SEC 10-K and 10-Q filings as
follows:
|
“For the _____ quarter or year ended
Month, Day and Year, revenue from one piece activated GPS tracking devices
supported entirely about a single limb of the monitored person equated to
$__________.”
|
|
4.2.
|
RMDX
will provide STOP with a quarterly report summarizing the royalty payments
for the current quarter and any adjustments to the rolling advance
required by section 5 of the Settlement
Agreement.
|
|
|
4.3.
|
RMDX
will provide STOP with a separate and confidential report each quarter,
which will summarize and reconcile the revenues associated with sections
1, 2, and 3 above, including all individual billable unit days supporting
the revenues reported herein. The report will be produced in a
format mutually acceptable to both parties. The purpose of this
separate report will only be to allow STOP to confirm that RMDX has
calculated royalties consistent with the terms of the Settlement
Agreement. The content of this report is strictly confidential and shall
not be used or disclosed by STOP for any purpose other than to confirm
that RMDX has calculated royalties consistent with the provisions of the
Settlement Agreement.
|
RMDX Quarterly Summary
Report to STOP
|
RMDX
Revenues for the YE/QE 00/00/00
|
RMDX
Revenues
|
Rolling
Advance Adjustment (if any)
|
|
License
Base Revenues
|
$A
|
$ +
/ -
|
|
Revenues
from monitoring services not within License Base Revenues
|
$B
|
N/A
|
|
Revenues
from case management and other related services
|
$C
|
N/A
|
|
TOTAL
ties to filings
|
$A
+ $B + $C
|
$
+/-
|
Exhibit
K
UNITED
STATES DISTRICT COURT
EASTERN
DISTRICT OF TEXAS
MARSHALL
DIVISION
|
SATELLITE
TRACKING OF PEOPLE, LLC (a/k/a STOP, LLC) and MICHELLE ENTERPRISES,
LLC,
Plaintiff,
v.
PRO
TECH MONITORING, INC., OMNILINK SYSTEMS, INC., and SECUREALERT,
INC.,
Defendants.
|
)
)
)
)
)
)
)
)
)
)
)
)
)
|
CASE
NO. 2:08-CV-116 (CE)
JURY
TRIAL DEMANDED
|
ORDER
DISMISSING CLAIMS AND COUNTERCLAIMS
WITH
RESPECT TO SECUREALERT WITH PREJUDICE
Upon the
written Stipulation of Plaintiffs and Counterclaim-Defendants Satellite Tracking
of People, LLC and Michelle Enterprises, LLC (“collectively Plaintiffs”) and
Defendant and Counterclaim-Plaintiff SecureAlert, Inc. (“SecureAlert”) on file
herein,
IT IS
HEREBY ORDERED that each claim asserted by Plaintiffs against SecureAlert in the
above-captioned matter, and each counterclaim and defense asserted by
SecureAlert against Plaintiffs in the above-captioned matter, are hereby
dismissed with prejudice, each party to bear its own attorneys’ fees and
costs.
The Court
shall retain such jurisdiction over SecureAlert as is necessary to effectuate
the terms and conditions of the settlement agreement between Plaintiffs and
SecureAlert.
SIGNED
this _____ day of ________________, 2010.
|
CHARLES
EVERINGHAM IV
|
||
|
UNITED
STATES MAGISTRATE JUDGE
|
||
Exhibit
L
RemoteMDx
Subsidiaries
1. SecureAlert,
Inc.
2. Midwest
Monitoring and Surveillance, Inc.
3. Court
Programs, Inc.
4. Court
Programs of Florida, Inc.
5. Court
Programs of Northern Florida, Inc.
6. Court
Programs of Illinois, Inc.
STOP
Subsidiaries
1. Satellite
Tracking of People VQ LLC, a Delaware limited liability company
2. Verquis
LLC, a Delaware limited liability company