Unassociated Document


    EXHIBIT
10.1

     

    SETTLEMENT
AGREEMENT

     

    This
Settlement Agreement (“Agreement”) is made effective as of the first date on
which all Parties hereto have executed the Agreement (“the Effective Date”), by
and among Kara Technology Incorporated (“KT,” or “Seller”), Salim Kara (“Mr.
Kara”) and Stamps.com Inc. (”Stamps.com” or “Buyer”).  KT and Mr. Kara
(collectively, “Kara”), on the one hand, and Stamps.com, on the other, are each
referred to in this Agreement as a “Party.”

     

    A.           On
October 22, 2004, KT filed a Complaint against Stamps.com in the United States
District Court for the Southern District of New York Case No. 04-CV-8364 (LMM)
alleging causes of action for (1) Infringement of United States Patent No.
6,505,179  (“the ‘179 Patent”), (2) Infringement of United States
Patent No. 6,735,575 (“the ‘575 Patent”), (3) Misappropriation and Misuse of
Trade Secrets, (4) Breach of Contract, (5) Unfair Competition, and (6) Unjust
Enrichment.  On November 29, 2004, Stamps.com filed its Answer and
Counterclaims, alleging counterclaims for (1) Declaratory Judgment of
Noninfringement of the ‘179 Patent and the ‘575 Patent and (2) Declaratory
Judgment of Patent Invalidity and Unenforceability of the ‘179 Patent and the
‘575 Patent.  On January 7, 2005, Stamps.com filed its First Amended
Answer and Counterclaims, alleging counterclaims for (1) Declaratory Judgment of
Noninfringement of the ‘179 Patent and the ‘575 Patent, (2) Declaratory Judgment
of Patent Invalidity of the ‘179 Patent and the ‘575 Patent, and (3) Declaratory
Judgment of Unenforceability of the ‘179 Patent and the ‘575
Patent.  On February 8, 2005, the case was transferred to the United
States District Court for the Central District of California, Case No. CV
05-1890 CBM (SSx).  This dispute, including but not limited to those
facts set forth in KT’s complaint and Stamps.com’s counterclaims, shall
hereinafter collectively be referred to as “the Litigation.”

     

    B.           By
entering into this Agreement, the Parties seek and intend to fully, completely,
and finally resolve, terminate, and settle all disputes, claims and actions
which they assert or could assert against each other, arising from the facts
alleged in the Litigation, including those claims which were actually asserted
or which could have been asserted from the beginning of time to the date of
execution of this Agreement.

     

    WHEREFORE, for good and
valuable consideration of the declarations, promises, covenants and
representations set forth below, the receipt and adequacy of which are hereby
acknowledged, the Parties hereby agree as follows:

     

    1.           Payment

     

    1.1 Stamps.com
shall, within seven (7) days of the execution of this Agreement: (i) pay
$5,100,000 (being allocated $4,225,000 to KT and $875,000 to Mr. Kara) in
consideration of the settlement, releases, and covenants received by Stamps.com
herein, (ii) pay $400,000 to KT in consideration of the assignment of the IP
Assets recited in section 3, and (iii) grant to Mr. Kara options on 35,000
shares of Stamps.com stock in consideration of his ongoing assistance with
prosecution and enforcement of certain intellectual property rights as recited
in section 6.1, with a strike price set as the closing price on the date of
grant, which options shall vest in equal monthly amounts over 48 months, with
the first vesting occurring one (1) month after the grant date.  The
grant date of these options shall be the Effective Date, and the options shall
expire ten years from the grant date.  The options shall be
administered by Stamps.com’s then current third party stock option
administrator(s) during the life of the options.  Mr. Kara shall set
up an account and accept the option grant agreement, as required by other
Stamps.com option recipients, with Stamps.com’s then current third party stock
option administrator before being able to exercise any vested
options.  Should Mr. Kara come into possession of any material,
non-public information, he will abide by Stamps.com’s Insider Trading
Policy.  Stamps.com shall provide instructions to Mr. Kara regarding
the administrative requirements and processes regarding the option grant,
consistent with the administrative requirements and processes Stamps.com
requires of its other option grant recipients, and such shall have such other
terms as set forth in the Stock Option Agreement attached hereto as Exhibit
2.

     

    
      
        
        

      

      
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    1.2 The
payments provided in Section 1.1 above, and totaling $5,500,000.00, shall be
made in United States Dollars by electronic wire transfer on or before the dates
due and owing to the account of Baker Botts L.L.P., ABA No. XXXXXXXXX, Swift
Code XXXXXXXX, J.P. Morgan Chase Bank, 712 Main, Houston, TX 77002, Account No.
XXXXXXXXXXX.  Kara hereby acknowledges and agrees that payment to the
third party account set forth above shall fulfill the payment obligations under
this Agreement regardless of any further allocation or distribution of funds
from that account.

     

    2.           Dismissal of the
Litigation

     

    Within
seven (7) days of the date on which Stamps.com makes the payments recited in
Section 1, KT and Stamps.com shall sign and Stamps.com shall file a Stipulated
Request for Dismissal with prejudice of all claims and counterclaims asserted in
the Litigation, with each Party to bear its respective costs, expenses and
attorneys’ fees for the Litigation.

     

    3.           Assignment of KT
Intellectual Property

     

    KT shall,
within seven (7) days of the date on which Stamps.com makes the payments recited
in Section 1, deliver to Stamps.com an Assignment with respect to the IP Assets
(defined below) in the form attached as Exhibit 1 in order to sell, convey,
assign, grant, transfer, set over and deliver to Stamps.com, free and clear of
any and all known liens, mortgages, pledges, security interests, restrictions on
title, prior assignments and claims of ownership or property interest of every
kind, nature or character (“Liens”), and Stamps.com shall
purchase, acquire and receive, through said Assignment, from KT, KT’s entire
right, title and interest, in and to the ‘179 Patent and the ‘575 Patent, as
well as all reissues, reexaminations, continuations, continuations-in-part,
divisionals, and foreign counterparts of those patents (collectively “the IP
Assets”).  KT shall take reasonable steps to avoid impairment of the
value of the assigned intellectual property rights prior to the date of the
assignment, and shall, within seven (7) days of the Effective Date, deliver the
complete files in its and its current patent counsel’s possession relating to
the IP Assets (including all materials in electronic and paper format, in the
possession of Kara and its counsel) to Stephen Sullivan, Esq., Convergent Law
Group LLP, 475 N. Whisman Rd., St. 400, Mountain View, California
94043.  KT shall also take reasonable steps to effect the transfer of
any files relating to the IP Assets that are in the possession of prior patent
counsel (including but not limited to Fulbright & Jaworski L.L.P.) to
Stamps.com, including but not limited to providing written authorization for
release of such files to Stamps.com.

     

    4.           Mutual Covenants Not to
Sue

     

    4.1.           Covenant
by KT and Kara

     

    Except as
to such rights as may be created by this Agreement, concurrent with the
Effective Date, Kara and their Affiliates hereby covenant not to sue Stamps.com
or any of its Affiliates, officers, directors, agents, employees, attorneys,
customers and partners, if any, for a period of five (5) years for infringement
of any rights in intellectual property (including but not limited to patents,
trademarks, copyrights, and trade secrets), breach of any contracts (other than
this Agreement or any future agreement between any of Kara and/or their
Affiliates with Stamps.com), or any business-related torts under the law of any
state of the United States.  This covenant shall extend only to
activities of Stamps.com and activities of third parties resulting from,
involving or otherwise related to a relationship with Stamps.com (such as, by
way of example and not of limitation, a relationship of Affiliate, officer,
director, agent, employee, attorney, customer or partner of Stamps.com),
including but not limited to the use of any products or services offered or
provided by Stamps.com.  An “Affiliate” of a Party for the purpose of
this Agreement shall mean any person or entity now existing that directly or
indirectly controls, is controlled by or is under common control with a Party;
for this purpose, “control” means direct or indirect ownership of, or the right
to exercise, at least 40% of the voting power, or at least 40% of the ownership
interest representing the right to make binding decisions for the
entity.

     

    
      
        
        

      

      
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    4.2.           Covenants
by Stamps.com

     

    Except as
to such rights as may be created by this Agreement, concurrent with the
Effective Date, Stamps.com and its Affiliates hereby covenant not to sue
Kara  for a period of five (5) years for (i) infringement of any
rights in intellectual property (including but not limited to patents,
trademarks, copyrights and trade secrets), breach of any contracts (other than
this Agreement or any future agreement between any of Stamps.com and/or its
Affiliates with Kara), or any business-related torts under the law of any state
of the United States, based on any acts by Kara that occurred on or before the
date of this Agreement, or (ii) any business-related torts under the law of any
state of the United States based on any acts that occur for a period of five (5)
years following the date of this Agreement.  For the avoidance of
doubt, it is understood and agreed that this covenant shall not extend to (i)
such rights as may be created by this Agreement, or (ii) any claims for
infringement of any intellectual property rights (including but not limited to
patents, trademarks, copyrights, and trade secrets) based on any acts that occur
following the date of this Agreement.

     

    5.           Mutual General
Releases

     

    5.1.           General
Release

     

    Except as
to such rights as may be created by this Agreement, concurrent with the
Effective Date, Kara and their Affiliates hereby release and forever discharge
Stamps.com, and all of its Affiliates, officers, directors, agents, employees,
attorneys, customers and partners, from any and all claims, losses, debts,
liabilities, demands, obligations, disputes, fees, controversies, costs,
expenses, damages, attorneys’ fees and costs, actions and causes of action,
whether known or unknown, that any of the releasing parties had or has prior to
or as of the date of this Agreement.  This release shall extend only
to the activities of Stamps.com and activities of third parties resulting from,
involving or otherwise related to a relationship with Stamps.com (such as, by
way of example and not of limitation, a relationship of Affiliate, officer,
director, agent, employee, attorney, customer or partner of Stamps.com),
including but not limited to the use of any products or services offered or
provided by Stamps.com.

     

    
      
        
        

      

      
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    5.2.           General
Release

     

    Except as
to such rights as may be created by this Agreement, concurrent with the
Effective Date, Stamps.com and its Affiliates hereby release and forever
discharge Kara, and all of their Affiliates, officers, directors, agents,
employees, and attorneys, from any and all claims, losses, debts, liabilities,
demands, obligations, disputes, fees, controversies, costs, expenses, damages,
attorneys’ fees and costs, actions and causes of action, whether known or
unknown, that any of the releasing parties had or has prior to or as of the date
of this Agreement.

     

    5.3.           Waiver of Unknown
Claims

     

    The
Parties understand the meaning and effect of California Civil Code § 1542
which provides:

     

    A general
release does not extend to claims which the creditor does not know or suspect to
exist in his or her favor at the time of executing the release, which if known
by him or her must have materially affected his or her settlement with the
debtor.

     

    The
Parties assume the risk of any and all unknown, unanticipated or misunderstood
defenses, claims, causes of action, contracts, liabilities, indebtedness and
obligations which are released by this Agreement and hereby waive and release
all rights and benefits which they might otherwise have under California Civil
Code § 1542.

     

    6.           Representations and
Warranties

     

    6.1.           Assistance with Prosecution
and Enforcement

     

    Mr. Kara
agrees, represents and warrants that he will provide Stamps.com with reasonable
cooperation and assistance, upon Stamps.com’s request and at Stamps.com’s
expense for out-of-pocket disbursements made in compliance with Stamps.com’s
then current Business Travel and Expense Reimbursement Policy applicable to
Stamps.com employees, which shall be made available to Mr. Kara
upon  request, in connection with the prosecution and enforcement of
any patents owned by Stamps.com on which he is named an inventor, including but
not limited to the case entitled Stamps.com v.
Endicia, filed in the United States District Court for the Central
District of California, Case No. CV 06-7499 ODW (CTx), and on appeal to the
Federal Circuit, Case No. 2010-1328.  For avoidance of doubt, such
reasonable cooperation and assistance shall be provided upon reasonable prior
notice, and Mr. Kara’s obligation to provide such cooperation and assistance
shall cease upon the expiration of the last patent to expire that is owned by
Stamps.com and on which Mr. Kara is named as an inventor.  In the
event such assistance and cooperation requires Mr. Kara to dedicate more than
ten (10) business days in any given calendar year, then Mr. Kara shall be
additionally compensated at a rate of $187.50 an hour for such assistance and
cooperation under the terms of a mutually agreeable consulting
agreement.

     

    6.2.           Organization
and Qualification

     

    Each of
Buyer and KT represents and warrants as to itself that such Party (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, and has full corporate power and authority to
conduct its business as now conducted and to own, use, license and lease its
assets and properties including (in the case of KT) the IP Assets; (ii) is duly
qualified, licensed or admitted to do business and is in good standing as a
foreign corporation in each jurisdiction in which the ownership, use, licensing
or leasing of its assets and properties including (in the case of KT) the IP
Assets, or the conduct or nature of its business, makes such qualification,
licensing or admission necessary, except for such failures to be so duly
qualified, licensed or admitted and in good standing that could not reasonably
be expected to have a material adverse effect on that Party, taken as a whole,
or (in the case of KT) the IP Assets.

     

    
      
        
        

      

      
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    6.3.           Authority
of Seller Relative to this Agreement

     

    Each
Party represents and warrants that (i) it has full corporate or individual power
(as applicable) and authority to execute and deliver this Agreement and the
other agreements which are attached (or forms of which are attached) as exhibits
hereto (the “Ancillary Agreements”) to which that Party is a signatory, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby; (ii) the execution and delivery by
that Party of this Agreement and the Ancillary Agreements to which that Party is
a signatory and the consummation by that Party of the transactions contemplated
hereby and thereby, and the performance by that Party of its obligations
hereunder and thereunder, have been duly and validly authorized by all necessary
action by the board of directors of that Party or otherwise; (iii) this
Agreement and the Ancillary Agreements to which that Party is a party have been
or will be, as applicable, duly and validly executed and delivered by that Party
and, assuming the due authorization, execution and delivery hereof (and, in the
case of the Ancillary Agreements to which the other Party is a party, thereof)
by the other Party, each constitutes or will constitute, as applicable, a legal,
valid and binding obligation of that Party enforceable against that Party in
accordance with its respective terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to the enforcement of creditors'
rights generally and by general principles of equity.

     

    6.4.           Authority
of Kara and KT Relative to this Agreement

     

    Each
Party represents and warrants that no provision of this Agreement violates any
duties owed by that Party to any other Party or to any of their creditors or
shareholders, and that each signatory on behalf of that Party has the full legal
authority (including approval of any Board of Directors and if needed of its
shareholders) to enter into, execute and sign this Agreement in the name of and
on behalf of that Party, which shall thereupon be effective without the consent,
approval or joinder of any other party and that this execution will thereby bind
and obligate both that Party to the terms of this Agreement and be enforceable
against that Party, collectively or separately. In addition, KT and Mr. Kara
each represent and warrant to Stamps.com that (i) KT ceased normal and material
business operations in October 2000; (ii) there are no debts outstanding to any
creditors of KT or any other debt or other monetary obligations owed by KT to
any third party as of the Effective Date other than current liabilities which
will be satisfied in full from the settlement proceeds, (iii) KT properly
provided notice of all material terms of the Agreement (including but not
limited to the fact and amounts of the consideration paid to Mr. Kara and KT
specified in section 1.1 of this Agreement) to all its shareholders and
conducted an official KT meeting of shareholders to approve the Agreement; (iv)
the Agreement was properly approved by the shareholders of KT at such meeting;
(v) 82.45% of all shares of KT entitled to vote at the meeting of shareholders
voted in favor of approving the Agreement while only 67% of such vote was
required for approval; and (vi) 63.98% of the Series A preferred shares entitled
to vote at the meeting of shareholders voted in favor of approving the Agreement
while only 50% of such vote was required for approval.

     

    
      
        
        

      

      
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    6.5.           Non-Assignment

     

    Each
Party represents and warrants that (i) it is the sole owner of all rights and
interest in and to all claims, demands, actions, cause or causes of action,
damages and losses and other matters which are the subject of or are related to
the Litigation or which are contemplated to be assigned or released by this
Agreement and (ii) it has not, prior to the Effective Date, assigned or
transferred or purported to assign or transfer any claims, demands, actions,
cause or causes of action, damages or losses which are the subject of or related
to the Litigation or which are contemplated to be released by this
Agreement.

     

    6.6           No
Conflicts

     

    Each
Party represents and warrants that the execution and delivery by that Party of
this Agreement and any other agreements, instruments and documents to be
executed and delivered by that Party pursuant hereto do not, and the performance
and consummation by that Party of the transactions contemplated hereby and
thereby will not, conflict with or result in any breach or violation of or
default, termination, forfeiture or Lien under (or upon the failure to give
notice or the lapse of time, or both, result in any conflict with, breach or
violation of or default, termination, forfeiture or Lien under) any terms or
provisions of that Party's charter documents, each as amended, or any statute,
rule, regulation, judicial or governmental decree, order or judgment, to which
that Party is a signatory or to which that Party or (in the case of Kara) the IP
Assets are subject.

     

    6.7           No
Consent Required

     

    No
consent, authorization, approval, order, license, certificate or permit or act
of or from, or declaration or filing with, any foreign, federal, state, local or
other governmental authority or regulatory body or any court or other tribunal
to which that Party or (in the case of Kara) the IP Assets are subject is
required for the execution, delivery or performance by that Party of this
Agreement or any of the other agreements, instruments and documents being or to
be executed and delivered hereunder or in connection herewith or for the
consummation of the transactions contemplated hereby or thereby, other than
governmental filings with US and foreign authorities which are necessary to
effect the recordation of transfer as provided for herein of the IP
Assets.

     

    6.8           Solvency  

     

    KT
represents and warrants that (i) the transactions contemplated by this Agreement
will not render Seller insolvent; (ii) by entering into the transactions
contemplated by this Agreement Seller does not intend to incur, and does not
believe that it will incur, debts that will be beyond Seller's ability to pay as
such debts mature; and (iii) Seller is not entering into the transactions
contemplated by this Agreement or incurring any obligation pursuant to this
Agreement with the intent to hinder, delay, or defraud any creditor to which
Seller is indebted on or after the date hereof.

     

    7.           Indemnity

     

    KT and
Mr. Kara hereby jointly and severally indemnify Stamps.com, and defend and hold
it harmless, from and against any and all claims, damages, liability, judgments,
settlements, loss, cost, and expense whatsoever (including, without limitation,
attorneys’ fees) incurred as a direct or indirect result of any breach by either
of KT or Mr. Kara, or any third party allegation of facts evidencing a breach by
either of KT or Mr. Kara, of any representation, warranty or provision of this
Agreement; provided, however, that Mr. Kara’s personal obligations under this
section for breaches or alleged breaches of KT (i) shall be limited to breaches
or alleged breaches involving duties or obligations owed to shareholders or
creditors of KT, (ii) shall be limited to only those breaches or alleged
breaches that occur within eighteen (18) months of the Effective Date or are,
within eighteen (18) months of the Effective Date, alleged to have occurred and
(iii) shall not exceed $250,000.  In the event that KT and/or Mr. Kara
assumes the defense of an action on behalf of Stamps.com, then they shall have
the right to retain counsel of their choice to represent Stamps.com in such
action and to control the defense of such action, provided further that neither
they nor such counsel as they shall engage to represent Stamps.com shall have
the authority to enter into a settlement or other resolution of such matter on
behalf of Stamps.com without Stamps.com’s express prior written
consent.

     

    
      
        
        

      

      
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    Stamps.com
hereby indemnifies Kara, and defends and holds them harmless, from and against
any and all claims, damages, liability, judgments, settlements, loss, cost, and
expense whatsoever (including, without limitation, attorneys’ fees) incurred as
a direct or indirect result of any breach by Stamps.com, or any third party
allegation of facts evidencing a breach, of any representation, warranty or
provision of this Agreement; provided, however, that Stamps.com’s obligations
under this section shall be limited to only those breaches or alleged breaches
that occur within six years of the Effective Date or are, within six years of
the Effective Date, alleged to have occurred.  In the event that
Stamps.com assumes the defense of an action on behalf of Kara, then it shall
have the right to retain counsel of its choice to represent Kara in such action
and to control the defense of such action, provided further that neither
Stamps.com nor such counsel as it shall engage to represent Kara shall have the
authority to enter into a settlement or other resolution of such matter on
behalf of Kara without Kara’s express prior written consent.

     

    8.           Miscellaneous

     

    8.1.           Neutral
Interpretation

     

    The
provisions contained herein shall not be construed in favor of or against any
party because that party or its counsel drafted this Agreement, but shall be
construed as if all Parties prepared this Agreement, and any rules of
construction to the contrary, including, without limitation, California Civil
Code § 1654, are hereby specifically waived.  The terms of this
Agreement were negotiated at arm’s length by the Parties hereto.

     

    8.2.           Severability

     

    If any
term or provision of this Agreement is determined to be illegal, unenforceable,
or invalid in whole or in part for any reason, such illegal, unenforceable, or
invalid provision or part thereof shall be stricken from this Agreement, and
such provision shall not affect the legality, enforceability or validity of the
remainder of this Agreement.

     

    8.3.           Counterparts

     

    This
Agreement may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original.  The counterparts shall
constitute one and the same Agreement.  Facsimile signatures shall
have the same force and effect as original signatures.

     

    
      
        
        

      

      
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    8.4.           Modification

     

    This
Agreement may be modified or rescinded only by a writing signed by the
Parties.  The failure of a  Party to
exercise any right or remedy provided by this Agreement or by law shall not be a
waiver of any obligation or right of the Parties, nor shall it constitute a
modification of this Agreement.

     

    8.5.           Venue and
Jurisdiction

     

    For
purposes of any litigation arising out of or related to this Agreement, the
Parties agree to exclusive jurisdiction of and venue in the federal or state
courts located in Los Angeles, California, and that California law applies to
all disputes arising out of or related to this Agreement or this matter without
regard to California law regarding conflicts of laws.  The prevailing
party in any such action shall be entitled to recover its litigation expenses,
including its reasonable attorneys’ fees.

     

    8.6.           Integration
Clause

     

    This
Agreement contains the entire agreement between the Parties relating to the
settlement and transactions contemplated hereby, and all prior or
contemporaneous agreements, understandings, representations, and statements,
whether oral or written, and whether by a party of such party’s legal counsel
are merged herein.  No modification, waiver, amendment, discharge, or
change of this Agreement shall be valid unless the same is in
writing.

     

    IN WITNESS WHEREOF the
undersigned Parties have executed this Agreement as of the dates indicated
below.

     

    
      
        	 	
                Kara
      Technology Incorporated

              	 
	 	 	 	 
	
                Dated: _______________

              	
                By:
      

              	 	 
	 	Its:	
              	 
	 	 	 	 
	 	

                Stamps.com
      Inc.

              	 
	 	 	 	 
	

                Dated: _______________

              	By:	 	 
	 	Its:	 	 
	 	 	 	 
	 	 	 	 
	

                Dated: _______________

              	By:	 	 
	 	 	

                Salim
      Kara

              	 


      

    

     

    
      
        
        

      

      
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      Exhibit
1

     

    PATENT
ASSIGNMENT

     

    This PATENT ASSIGNMENT (this
"Assignment") is entered into is entered into by Kara Technology Incorporated, a
Texas corporation, having a place of business located at 17 Bayview Forest Lane,
Thornhill, Ontario, Canada L3T 7S4 ("Assignor"), as assignor, in favor of
Stamps.com Inc., a Delaware corporation having a place of business located at
12959 Coral Tree Place, Los Angeles, California 90066 ("Assignee"), as assignee,
with reference to the following facts and circumstances:

     

    Assignor and Assignee have entered into
that certain Settlement Agreement dated _________________ , which, along with
the promises contained herein, constitute mutual consideration for the promises
herein;

     

    Assignor is the sole and exclusive
owner of the Letters Patents and applications shown on the attached Exhibit A,
as well as all reissues, reexaminations, continuations, continuations-in-part,
divisionals, and foreign counterparts of those patents, in the United States
(hereinafter the "Patents").

     

    Assignee desires to acquire, and
Assignor desires to assign, Assignor's right, title and interest in, to and
under the Patents.

     

    NOW, THEREFORE, to all whom it may
concern, be it known that for good and valuable consideration the receipt and
adequacy of which is hereby acknowledged, Assignor does hereby sell, assign, and
transfer  to Assignee, its successors, assigns, and legal
representatives, the entire right, title and interest for the United States and
all foreign countries, in and to the Patents, to the end of the term or terms
for which the Patents are granted or may be reissued as fully and entirely as
the same would have been held and enjoyed by Assignor if this assignment and
sale had not been made; together with all claims for damages by reason of past
infringement of the Patents, with the right to sue for, and collect the same for
Assignee's own use and benefit and for the use and benefit of Assignee's
successors, assigns or other legal representatives.  Assignor agrees
to execute all rightful oaths, assignments, powers of attorney and other papers;
and to communicate to said Assignee, its successors, assigns, and
representatives, pursuant to reasonable requests and under reasonable
circumstances, all facts known to the undersigned relating to said
Patents.

     

    Assignor further warrants that it has
not executed, and will not execute, any agreements in conflict with or
inconsistent with this assignment.

     

    In testimony whereof, Assignor has
caused this Assignment to be executed by its officer(s) thereunto duly
authorized.

     

    
      
        	 	

                ASSIGNOR


                  KARA
      TECHNOLOGY INCORPORATED

                

              	 
	 	 	 	 
	
                Dated:  ________________

              	
                By:
      

              	 	 
	 	 	Salim Kara	 
	 	 	CEO	 


      

    

     

    
      
        
        

      

      
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    PROVINCE
OF ONTARIO

    


    CANADA

     

    On
_______________________, before me, GARY WISEMAN, Notary Public, personally
appeared SALIM KARA, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person, or the entity
upon behalf of which the person acted, executed the instrument.

     

    WITNESS
my hand and official seal.

     

    ______________________________

    Notary
Public

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A TO PATENT ASSIGNMENT


    


    UNITED STATES ISSUED
PATENTS

    


    
      	

              Title

            	 	

              Patent
      No.

            	 
	
              Verifying
      the Authenticity of Printed Documents on Universally Available Paper
      Stock

            	 	 	6,505,179	 
	
              Verifying
      the Authenticity of Printed Documents

            	 	 	6,735,575	 


    

     

    UNITED STATES PENDING PATENT
APPLICATIONS

    


    
      	

              Serial
      No.

            	 	

              Filing
      Date

            	

              Title

            
	
              PCT/US1999/027408

            	 	
              11/17/1999

            	
              Internet
      Purchase System

            
	
              PCT/US2000/14347

            	 	
              05/24/2000

            	
              Verifying
      the Authenticity of Printed Documents on Universally Available Paper
      Stock

            
	
              PCT/US2000/035631

            	 	
              12/28/2000

            	
              System
      and Method for Hand Held Code Verification

            
	11/431,162	 	
              05/09/2006

            	
              Verifying
      the Authenticity of Printed Documents

            
	90/009,682	 	
              02/08/2010

            	
              Verifying
      the Authenticity of Printed Documents on Universally Available Paper
      Stock

            
	90/009,704	 	
              04/29/2010

            	
              Verifying
      the Authenticity of Printed
Documents

            


    

     

    
      
        
        

      

      
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