JOHN A. MENDEZ, District Judge.
The parties hereto, to wit plaintiff and counter-defendant Keith R. Clayton (plaintiff or "Clayton"), and defendant and counterclaimant Automated Gaming Technologies, Inc. ("AGT") and defendants John Prather ("Prather") and Robert Magnanti ("Magnanti"), having entered into a written agreement for settlement of this action ("Settlement Agreement"), a copy of which is attached hereto as "EXHIBIT 1" and incorporated as reference herein, and the parties having filed a Joint Application for entry of this accordant Order, IT IS HEREBY ORDERED AS FOLLOWS:
A. The parties shall comply with the terms of the Settlement Agreement attached hereto as "EXHIBIT 1", which is hereby incorporated by reference as if fully set forth herein. Without limitation:
1.
a. AGT shall pay Clayton the sum of SEVEN THOUSAND FIVE HUNDRED DOLLARS ($7,500.00) within thirty (30) days of the signing of this Agreement;
b. AGT shall pay Clayton the additional sum of SEVEN THOUSAND FIVE HUNDRED DOLLARS ($7,500.00) within sixty (60) days of the signing of this Agreement;
c. AGT shall pay to Clayton the remaining balance of ONE HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ($185,000.00) in installments of FIVE THOUSAND DOLLARS ($5,000) per month, for a period of thirty-seven (37) consecutive months, each installment being due on the first day of each calendar month hereafter, starting on the first day of the first calendar month that is over eighty (80) days from the signing of the Agreement, and continuing on the first day of each calendar month thereafter until the entire remaining unpaid balance of the originally agreed sum of $200,000.00 shall have been paid to Clayton; provided, however, that if any such installment is not paid within ten (10) days of its due date, and said default continues for ten (10) days after written notice of such default is given to AGT, the entire remaining unpaid balance of the originally agreed sum of $200,000.00 shall become immediately due and payable by AGT to Clayton, without further demand or notice. Interest shall accrue at the legal rate on the unpaid balance of the principal sum or any installments only from the date that payment is due. In the event of any such default in payment which has continued for2032032246 ten (10) or more days after such written notice of default, Clayton may apply to the Court in the Federal Court Action or the federal court in such district, by motion, or by ex-parte application, upon seven (7) days written notice to AGT and/or its then attorneys of record, if any, for entry of a order against AGT that it immediately pay to Clayton the entire remaining unpaid balance of the originally agreed sum of $200,000.00, interest on past due balances, and reasonable attorney fees incurred in obtaining the said order. John Prather and Robert Magnanti are not hereby agreeing to make payments required of AGT hereunder as a personal liability of either Prather or Magnanti, but this is not intended and should not construed to in any way negate their fiduciary duties as corporate officers of AGT toward Clayton as a creditor of AGT.
2.
a. New sales or licensing of CBMS to existing CBMS customers, if any;
b. New sales or licensing of CBMS to new CBMS customers, if any;
c. Upgrades of or for new versions of the CBMS for which AGT charges the CBMS customer, if any; and
d. A sale or assignment, if any, of the CBMS program or any copyright therein. Gross revenues for the purposes of the above royalty calculation shall not include charges for annual software maintenance which do not include charges for providing new or upgraded versions of the CBMS. If AGT bundles the charge for providing a new or upgraded version of the CBMS into an annual software maintenance charge, Clayton shall be entitled to his abovepercentage of the gross revenue therefrom, as applied to that portion of the total charge that represents AGT's charge for providing the new or upgraded version. AGT shall provide quarterly reports to Clayton of such sales or licensing, if any, for which Clayton is entitled to payment hereunder, and pay over Clayton's share within fifteen (15) days of the end of each quarter in which AGT receives revenues as to which Clayton is entitled to such share hereunder. As used2162162241 herein, the "Horizon" software includes only a "Windows" based WPF (Windows Presentation Foundation) application. "Derivatives" of the CBMS include, among other things, any "webbased" application that is based upon the Administrative Application copyrighted by Clayton or which is based upon or utilizes any source code written by Clayton for the CBMS.
3.
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B. The Court retains and reserves jurisdiction to enforce the Settlement Agreement and this accordant Order;
C. Subject to the provisions of paragraphs A and B above, this action, including plaintiff's complaint against AGT, Prather, and Magnanti, and AGT's counterclaim against plaintiff, is dismissed with prejudice, each party to bear its own attorney fees and costs heretofore incurred.
D. The foregoing dismissals are voluntary, and shall not operate as an adjudication on the merits under Rule 41 of the Federal Rules of Civil Procedure.
IT IS SO ORDERED:
This SETTLEMENT AGREEMENT ("this Agreement"), dated for reference purposes October 2, 2015, is made and entered by and between the following parties ("Parties") hereto:
Keith R. Clayton ("Clayton"), on the one hand; and
with reference to the following facts (any description or summary in this preface of the written pleadings, filings, claims or defenses of any person is for purposes of reference, and is not intended to supersede the actual text thereof):
A. On March 28, 2013, Clayton filed a complaint in the Superior Court of the State of California, in and for the County of Placer, entitled Keith R. Clayton, Plaintiff, vs. Automated Gaming Technologies, Inc., a Nevada corporation, and DOE 1 through DOE 50, inclusive, Defendants, Case No. SCV0032766 ("the State Court Action"), and on March 29, 2013 filed a similarly entitled First Amended Complaint therein;
B. On May 8, 2013, AGT removed the State Court Action to the United States District Court in and for the Eastern District of California, Sacramento Division, and it there became Case No. 2:13-CV-00907-JAM-EFB (the "Federal Court Action"). On November 27, 2013, Clayton filed his "Third Amended Complaint" therein against AGT, Prather and Magnanti, entitled Keith R. Clayton, Plaintiff, vs. Automated Gaming Technologies, Inc., a Nevada corporation, John R. Prather [sic] and Robert Magnanti, Defendants. The reference to "John B. Prather" was in error, and the intended reference was to Prather. On May 8, 2014, AGT filed its "Second Amended Counterclaims" therein against Clayton, entitled Automated Gaming Technologies, Inc., a Nevada Corporation, Counter-Claimant, v. Keith R. Clayton, and Does 1 Through 10, Inclusive, Counter-Defendants. Said Third Amended Complaint and said Second Amended Counterclaims are the currently operative affirmative pleadings in the Federal Count Action. Each Party filed answers to said complaints or counterclaims, denying the material allegations therein and alleging various affirmative defenses.
C. On September 17, 2015, a mediation was held between the parties to resolve the foregoing disputes, and a handwritten settlement agreement was then entered into between and signed by the Parties, which contemplated a formal settlement agreement embodying the terms thereof. This Agreement is that formal settlement agreement, and supersedes and completely replaces the handwritten settlement agreement.
NOW THEREFORE, IN CONSIDERATION OF THE PREMISES AND THE MUTUAL COVENANTS AND CONDITIONS OF THIS AGREEMENT, IT IS HEREBY AGREED AS FOLLOWS:
1.
provided, however, that if any such installment is not paid within ten (10) days of its due date, and said default continues for ten (10) days after written notice of such default is given to AGT, the entire remaining unpaid balance of the originally agreed sum of $200,000.00 shall become immediately due and payable by AGT to Clayton, without further demand or notice. Interest shall accrue at the legal rate on the unpaid balance of the principal sum or any installments only from the date that payment is due. In the event of any such default in payment which has continued for ten (10) or more days after such written notice of default, Clayton may apply to the Court in the Federal Court Action or the federal court in such district, by motion, or by ex-parte application, upon seven (7) days written notice to AGT and/or its then attorneys of record, if any, for entry of a order against AGT that it immediately pay to Clayton the entire remaining unpaid balance of the originally agreed sum of $200,000.00, interest on past due balances, and reasonable attorney fees incurred in obtaining the said order.John Prather and Robert Magnanti are not hereby agreeing to make payments required of AGT hereunder as a personal liability of either Prather or Magnanti, but this is not intended and should not construed to in any way negate their fiduciary duties as corporate officers of AGT toward Clayton as a creditor of AGT.
2.
a. New sales or licensing of CBMS to existing CBMS customers, if any;
b. New sales or licensing of CBMS to new CBMS customers, if any;
c. Upgrades of or for new versions of the CBMS for which AGT charges the CBMS customer, if any; and
d. A sale or assignment, if any, of the CBMS program or any copyright therein.
Gross revenues for the purposes of the above royalty calculation shall not include charges for annual software maintenance which do not include charges for providing new or upgraded versions of the CBMS. If AGT bundles the charge for providing a new or upgraded version of the CBMS into an annual software maintenance charge, Clayton shall be entitled to his above-percentage of the gross revenue therefrom, as applied to that portion of the total charge that represents AGT's charge for providing the new or upgraded version. AGT shall provide quarterly reports to Clayton of such sales or licensing, if any, for which Clayton is entitled to payment hereunder, and pay over Clayton's share within fifteen (15) days of the end of each quarter in which AGT receives revenues as to which Clayton is entitled to such share hereunder. As used herein, the "Horizon" software includes only a "Windows" based WPF (Windows Presentation Foundation) application. "Derivatives" of the CBMS include, among other things, any "web-based" application that is based upon the Administrative Application copyrighted by Clayton or which is based upon or utilizes any source code written by Clayton for the CBMS.
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If to Magnanti: Addressed to Magnanti at AGT's above address, facsimile number and/or email; If to Prather: Addressed to Prather at AGT's above address or facsimile number, and/or Prather's email of jprather@agtworldwide.com;
and, in each above case, with a copy to:
Sacramento, CA 95827-7010, facsimile: (916) 817-2644. email:
Notices sent by mail shall be effective three (3) calendar days after placing in the United States Mail. Notices sent by email or facsimile transmission by 5:00 p.m. on a weekday (other than a Court holiday) shall be deemed effective when sent, otherwise notices so sent after 5:00 p.m, or on Saturday, Sunday or Court holiday shall be deemed effective the next business day. Notices sent by personal delivery shall be effective when received.
The source code above provided to be delivered to AGT shall be delivered to a 3' Party repository which AGT will authorize. AGT will provide the appropriate location to send the source code within 60 days after execution of this Agreement
6.
and the payment instruments shall be payable to "Keith R. Clayton and Gilbert J. Premo". Clayton may change the address and to whom the payments instruments shall be made payable by written notice to AGT. The due date for payments to Clayton above provided is the date they are due to be received by Clayton, not the date of mailing. Any notices or reports required to be given to Clayton under this Agreement may be sent or delivered by email, facsimile transmission, United States mail, overnight courier, or personal delivery, to the following address(es) or facsimile numbers, or such other addresses as Clayton may provide by prior written notice to AGT, Prather and Magnanti:
Notices sent by mail shall be effective three (3) calendar days after placing in the United States Mail. Notices sent by email or facsimile transmission by 5:00 p.m. on a weekday (other than a Court holiday) shall be deemed effective when sent, otherwise notices so sent after 5:00 p.m, or on Saturday, Sunday or Holiday shall be deemed effective the next business day. Notices sent by personal delivery shall be effective when received
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any and all rights, claims, demands, debts, contracts, damages, actions or causes of action (any and all of the foregoing being hereinafter referred to, individually and collectively, as "CLAIMS") that the AGT RELEASORS may now have against the CLAYTON RELEASEES of whatever kind, character or description, including but not limited to any CLAIMS concerning, arising out of, or in any way whatsoever related to matters alleged the State Court Action or the Federal Court Action; PROVIDED, HOWEVER, that nothing in the foregoing the releases and discharges, or in this Agreement, is intended to, and nothing herein shall be construed to, to release or discharge any CLAIMS that any such releasor has or may have under the terms of this Agreement, or any instrument, document or order executed, entered or delivered pursuant hereto, and any such CLAIMS are excepted from the foregoing releases and discharges.
10.
any and all rights, claims, demands, debts, contracts, damages, actions or causes of action (any and all of the foregoing being hereinafter referred to, individually and collectively, as "CLAIMS") that Clayton may now have against the AGT RELEASEES of whatever kind, character or description, including but not limited to any CLAIMS concerning, arising out of, or in any way whatsoever related to the matters alleged in State Court Action or the Federal Court Action, PROVIDED, HOWEVER, that nothing in the foregoing the releases and discharges, or in this Agreement, is intended to, and nothing herein shall be construed to, to release or discharge any CLAIMS that Clayton has or may have under the terms of this Agreement, or any instrument, document or order executed, entered or delivered pursuant hereto, and any such CLAIMS are excepted from the foregoing releases and discharges.
11.
and any similar rights under the laws of any other jurisdiction.
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IN WITNESS WHEREOF, the undersigned hereby execute this Agreement.
The parties hereto, to wit plaintiff and counter-defendant Keith R. Clayton ("plaintiff" or Clayton"), and defendant and counterclaimant Automated Gaming Technologies, Inc. ("AGT") and defendants John Prather ("Prather") and Robert Magnanti ("Magnanti"), having entered into an agreement for settlement of this action ("Settlement Agreement"), a copy of which is attached hereto as "EXHIBIT 1" and incorporated as reference herein, said parties hereby apply to the Court for entry of an Order, in the form of the Proposed Order attached hereto as "EXHIBIT 2", ordering the parties to comply with the Settlement Agreement, and reserving jurisdiction to enforce the Settlement Agreement, and, except as so provided for compliance with the Settlement Agreement and enforcement thereof, dismissing this action with prejudice.
One of the principal considerations for the settlement involves payments in a total of $200,000.00 to be made AGT to plaintiff in a period of over three (3) years, with no payments being made immediately. The Supreme Court in Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) held that:
The parties here have so agreed. If the parties' obligation to comply with the settlement agreement is part of the order of dismissal, jurisdiction to enforce the agreement exists. Kokkonan, at 380-381. The settlement agreement can then be summarily enforced in the manner agreed to by the parties. See, Limbright v. Hofineister, 566 F.3d 672 (6th Cir. 2009) (defendant agreed to ex-parte proceeding in the event of default in payment.)
However, the retention of jurisdiction must be done very carefully . According to the case of SmallBizPros, Inc. v. MacDonald, 618 F.3d 458 (5th Cir. 2010), the parties cannot file a stipulation for dismissal if the Court's jurisdiction is to be preserved, unless the effectiveness of the filing is expressly conditioned upon a future act of the Court's (such as the court issuing an order retaining jurisdiction). Therefore, the parties are instead filing this joint application for a Court order whereby the Court is requested to order performance of the Settlement Agreement and retain jurisdiction to enforce the same, and said conditions are in any resultant order of dismissal. Any request for dismissal of this action is expressly conditioned upon the Court's future action in entering the Order hereby applied for which orders performance of the Settlement Agreement and reserves jurisdiction to enforce the same, and shall not otherwise be effective. This application is made pursuant to Rule 41 (a) (2) and (c) of the Federal Rules of Civil Procedure, but subject to the above condition.
The Court is respectfully requested by the parties to enter the accompanying Order.
Respectfully submitted.
The parties hereto, to wit plaintiff and counter-defendant Keith R. Clayton (plaintiff or "Clayton"), and defendant and counterclaimant Automated Gaming Technologies, Inc. ("AGT") and defendants John Prather ("Prather") and Robert Magnanti ("Magnanti"), having entered into a written agreement for settlement of this action ("Settlement Agreement"), a copy of which is attached hereto as "EXHIBIT 1" and incorporated as reference herein, and the parties having filed a Joint Application for entry of this accordant Order, IT
A. The parties shall comply with the terms of the Settlement Agreement attached hereto as "EXHIBIT 1", which is hereby incorporated by reference as if fully set forth herein. Without limitation:
1.
a. AGT shall pay Clayton the sum of SEVEN THOUSAND FIVE HUNDRED DOLLARS ($7,500.00) within thirty (30) days of the signing of this Agreement;
b. AGT shall pay Clayton the additional sum of SEVEN THOUSAND FIVE HUNDRED DOLLARS ($7,500.00) within sixty (60) days of the signing of this Agreement;
c. AGT shall pay to Clayton the remaining balance of ONE HUNDRED EIGHTY-FIVE THOUSAND DOLLARS ($185,000.00) in installments of FIVE THOUSAND DOLLARS ($5,000) per month, for a period of thirty-seven (37) consecutive months, each installment being due on the first day of each calendar month hereafter, starting on the first day of the first calendar month that is over eighty (80) days from the signing of the Agreement, and continuing on the first day of each calendar month thereafter until the entire remaining unpaid balance of the originally agreed sum of $200,000.00 shall have been paid to Clayton;
provided, however, that if any such installment is not paid within ten (10) days of its due date, and said default continues for ten (10) days after written notice of such default is given to AGT, the entire remaining unpaid balance of the originally agreed sum of $200,000.00 shall become immediately due and payable by AGT to Clayton, without further demand or notice. Interest shall accrue at the legal rate on the unpaid balance of the principal sum or any installments only from the date that payment is due. In the event of any such default in payment which has continued for2152152253 ten (10) or more days after such written notice of default, Clayton may apply to the Court in the Federal Court Action or the federal court in such district, by motion, or by ex-parte application, upon seven (7) days written notice to AGT and/or its then attorneys of record, if any, for entry of a order against AGT that it immediately pay to Clayton the entire remaining unpaid balance of the originally agreed sum of $200,000.00, interest on past due balances, and reasonable attorney fees incurred in obtaining the said order. John Prather and Robert Magnanti are not hereby agreeing to make payments required of AGT hereunder as a personal liability of either Prather or Magnanti, but this is not intended and should not construed to in any way negate their fiduciary duties as corporate officers of AGT toward Clayton as a creditor of AGT.
2.
a. New sales or licensing of CBMS to existing CBMS customers, if any;
b. New sales or licensing of CBMS to new CBMS customers, if any;
c. Upgrades of or for new versions of the CBMS for which AGT charges the CBMS customer, if any; and
d. A sale or assignment, if any, of the CBMS program or any copyright therein. Gross revenues for the purposes of the above royalty calculation shall not include charges for annual software maintenance which do not include charges for providing new or upgraded versions of the CBMS. If AGT bundles the charge for providing a new or upgraded version of the CBMS into an annual software maintenance charge, Clayton shall be entitled to his abovepercentage of the gross revenue therefrom, as applied to that portion of the total charge that represents AGT's charge for providing the new or upgraded version. AGT shall provide quarterly reports to Clayton of such sales or licensing, if any, for which Clayton is entitled to payment hereunder, and pay over Clayton's share within fifteen (15) days of the end of each quarter in which AGT receives revenues as to which Clayton is entitled to such share hereunder. As used2152152246 herein, the "Horizon" software includes only a "Windows" based WPF (Windows Presentation Foundation) application. "Derivatives" of the CBMS include, among other things, any "webbased" application that is based upon the Administrative Application copyrighted by Clayton or which is based upon or utilizes any source code written by Clayton for the CBMS.
3.
4.
B. The Court retains and reserves jurisdiction to enforce the Settlement Agreement and this accordant Order;
C. Subject to the provisions of paragraphs A and B above, this action, including plaintiff's complaint against AGT, Prather, and Magnanti, and AGT's counterclaim against plaintiff, is dismissed with prejudice, each party to bear its own attorney fees and costs heretofore incurred.
D. The foregoing dismissals are voluntary, and shall not operate as an adjudication on the merits under Rule 41 of the Federal Rules of Civil Procedure.