This Settlement Agreement
(Agreement) is effective as of the latest date set out on
the signature page hereof (the Effective Date), among
Corporation, a New York
corporation having a place of business at 620 Johnson Ave., Suite 1B, Bohemia,
New York 11716 (Andrea); and
Acer Inc., a Taiwan corporation having a place of business
at 8F, 88, Sec. 1, Xintai 5th Rd., Xizhi, New Taipei City 221, Taiwan
R.O.C. and Acer America
Corporation, a California
corporation having a place of business at 333 West San Carlos Street, Suite
1500, San Jose, CA 95110 (together Acer) (Andrea and Acer
may each be referred to as a Party or collectively be
referred to as the Parties).
WHEREAS, the Parties wish to resolve the litigations
titled Andrea Electronics
Corporation v. Acer Inc. and Acer America Corporation, Civ. Action No. 2:15-cv-04488 and Andrea Electronics Corporation v. Acer Inc. and
Acer America Corporation, Civ.
Action No. 2:15-cv-00210, both pending in the Eastern District of New York (the
New York Cases), as well as International Trade Commission Investigation No.
337-TA-949 titled Certain Audio
Processing Hardware and Software and Products Containing the
Same, Inv. No. 337-TA-949 (the
ITC Investigation) (collectively, the Litigations); and
WHEREAS, Andrea has granted Acer Inc. and its
Subsidiaries a license to the Asserted Patents, the License Agreement being
attached hereto as Confidential Exhibit A.
In consideration of the mutual
promises and covenants herein contained, Andrea and Acer agree as follows:
SECTION 1: DEFINITIONS
As used in this Agreement, the
following terms shall have the following meanings which shall include both
singular and plural forms in context. Additional terms may be defined elsewhere
in this Agreement.
1.1. Asserted Patents means all patents asserted by Andrea in the
Litigations, namely, the following U.S. Patents: 5,825,898; 6,049,607;
6,363,345; 6,483,923; and 6,377,637.
1.2. Control (including its correlative meanings, Controlled and Controlling) means the
power to direct or cause the direction of the management and policies of an
Entity whether through ownership of voting securities, by contract or otherwise;
it being understood and agreed that with respect to a corporation, limited
liability company, partnership, and similar structures, Control shall also require (a) ownership of more than fifty percent (50%) of
the voting stock, limited liability interest, partnership interest, or other
voting interest (or equivalent interest), in any such corporation, limited
liability company, or partnership, or (b) in any country where it is not
permitted by law to own more than fifty percent (50%) of the voting stock,
limited liability interest, partnership interest, or other voting interest (or
equivalent interest) in a local corporation, limited liability company, or
partnership, ownership of the maximum legally allowed ownership interest of the
voting stock, limited liability interest, partnership interest, or other voting
interest (or equivalent interest) of the local corporation, limited liability
company, or partnership.
1.3. Entity means a natural person, corporation, association, joint venture,
partnership, company, limited liability company or other legal entity recognized
in any jurisdiction in the world.
1.4. License Agreement shall mean the License Agreement between Andrea
and Acer, attached as Exhibit A.
1.5. Subsidiary shall mean any Entity directly or indirectly Controlled by a Party, as
of the Effective Date.
SECTION 2: DISMISSALS
2.1. Dismissals. Subject to the terms and conditions herein the Parties shall file the
||Andrea and Acer shall
file a motion to terminate the ITC Investigation substantially in the form
set forth in Exhibit B within ten (10) days of the Effective
||Within five (5) court
days of the receipt of payment by Andrea as set forth in Section 3.1 of
the License Agreement, the Parties shall file stipulations of dismissal
with prejudice regarding all claims and counterclaims asserted against
each other in the New York Cases substantially in the form set forth in
2.2. Releases. Andrea and its Subsidiaries and Acer and its
Subsidiaries hereby release all claims, counterclaims and/or defenses relating
to the Asserted Patents that were brought or could have been brought in the New
York Cases as of the Effective Date.
2.3. No Costs. The Parties agree that this Agreement is
intended solely as a compromise between the Parties and without any
acknowledgment of liability, fault, or damages. The Parties acknowledge and
agree that each Party shall bear its own attorneys fees, court costs, expenses,
and any other related costs and expenses that they have incurred in connection
with any and all claims previously filed against each other. The Parties also
agree that they shall bear their own costs and attorneys fees relating to or
arising from the negotiation and performance of this Agreement.
3.1. Term. The rights granted under this Agreement, if any,
shall commence upon the Effective Date.
3.2. No Other
Obligations. Neither Party shall
have any other responsibilities or obligations in connection with actions to
enforce or defend the Asserted Patents.
3.3. Binding on
Successors. This Agreement shall
be binding upon and inure to the benefit of the Parties, successors and
assignees. Notwithstanding the preceding, it is understood that no assignment
will release either Party or their Subsidiaries from any of their obligations
4.1. Written Notices. Any notices under this Agreement shall be in
writing and delivered by facsimile transmission, electronic mail, overnight
express mail or express courier service to such Party at the address given
below, or such other address as provided by a Party by written notice in
accordance with this Section, and shall be effective on receipt. Notwithstanding
the foregoing, notices and other communications sent by facsimile transmission
or electronic mail shall be effective upon the senders receipt of an
acknowledgement from the intended recipient. This paragraph in no way
constitutes waiver of service of process in any litigation between the parties.
||Andrea Electronics Corporation|
Johnson Ave., Suite 1B|
||Bohemia, New York 11716|
West San Carlos Street, Suite 1500|
Jose, CA 95110|
||Attention: Legal Department|
88, Sec. 1, Xintai 5th Rd.|
||Xizhi, New Taipei City 221, Taiwan
||Attention: Legal Division, General
GOVERNING LAW AND
Law. The Parties agree that this
Agreement shall be considered to have been made in, and construed and
interpreted in accordance with the substantive laws of the State of New York,
without regard to its conflict of laws principles.
5.2. Jurisdiction. The Parties hereby submit to, and waive any
venue objections against, the sole and exclusive jurisdiction of the state and
federal courts located in the State of New York.
LIMITATION OF LIABILITY
6.1. Limited Warranty. Each Party represents and warrants that it has
the full authority to enter into and fully perform this Agreement; and that this
Agreement is valid and binding and enforceable in accordance with its
7.1. Duty to Maintain Confidentiality. Either Party may publicly disclose this
Agreement, except that the License Agreement, Exhibit A, may only be disclosed
in accordance with the Confidentiality obligations contained therein.
8.1. Counterparts. This Agreement may be executed in counterparts in
the English language and each executed document shall be deemed an original
8.2. Entire Agreement; Construction. This Agreement constitutes the entire agreement
between the Parties concerning the subject matter hereof and supersedes all
written and oral prior agreements and understandings with respect
8.3. Modification. No variation or modification of the terms of
this Agreement or any waiver of any of the terms or provisions hereof shall be
valid unless in writing and signed by an authorized representative of each of
Interpretation. This Agreement is
subject to the restrictions, limitations, terms and conditions of all applicable
governmental regulations, approvals and clearances. If any term or provision of
this Agreement is held invalid, illegal or unenforceable in any respect for any
reason, that invalidity, illegality or unenforceability shall not affect any
other term or provision hereof, and this Agreement shall be interpreted and
construed as if such term or provision, to the extent the same shall have been
held to be invalid, illegal or unenforceable, had never been contained herein,
and instead had been included in such manner as to lawfully effectuate the
intent of such term or provision. The Parties acknowledge that each Party was
represented by legal counsel in connection with this Agreement and that each of
them and its counsel have reviewed this Agreement, and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any applicable amendments or any exhibits.
8.5. Waiver. Failure by either Party to enforce any rights under this Agreement for
any length of time shall not be construed as a waiver of such rights nor shall a
waiver by either Party in one or more instances be construed as constituting a
continuing waiver or as a waiver in other instances.
8.6. Remedies. In the event of a breach of this Agreement, in addition to the right to
enforce its rights under this Agreement, each Party shall retain any and all
rights and/or remedies, at law or in equity.
8.7. No Admission. The Parties agree that this Agreement or
anything contained herein shall not constitute an admission by Acer of
infringement, validity or enforceability of any of the Asserted
WHEREOF, the Parties have caused
this Agreement to be executed by duly authorized officers effective on the
Acer America Corporation