Druid Group, Inc v. Dorfman

Filing 52

AGREED FINAL ORDER re 47 Joint MOTION to Approve Consent Judgment on Behalf of All Parties filed by Lee Dorfman. Signed by Judge Phyllis J. Hamilton on 9/12/08. (nah, COURT STAFF) (Filed on 9/12/2008) Modified on 9/25/2008 (nah, COURT STAFF).

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Michael C. Donovan (CA SBN: 153855) LAW OFFICES OF MICHAEL C. DONOVAN 4546 El Camino Real, Suite B-10, # 414 Los Altos, CA 94022 Telephone & Facsimile: 650-745-1190 E-Mail: [e-mail] Lead Trial Counsel for Plaintiff/Counterdefendant Lee J. Dorfman John K. Schwartz ([e-mail]) (pro hac vice) LOCKE LORD BISSELL & LIDDELL LLP 100 Congress Avenue, Suite 300 Austin, Texas 78701 Telephone: [phone] Facsimile: [phone] Todd L. Peterson ([e-mail]) (CA Bar No. 142438) Samuel M. Zaif ([e-mail]) (CA Bar No. 116391) CHERNAY | PETERSON 201 Mission Street, Suite 1310 San Francisco, CA 94105 Telephone: [phone] Facsimile: [phone] Attorneys For Defendants/Counterclaimants Richard Jackson, Druid Group, Inc., d.b.a. Cypersecretaries, and Cs/Dorfman Operating Co. UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
) ) ) ) Plaintiff, ) ) v. ) ) RICHARD JACKSON, individually & ) d.b.a. CYBER SECRETARIES; DRUID) GROUP, INC., d.b.a. CYBER) SECRETARIES, d.b.a. YOU DICTATE,) and DOES 1 to 100, ) ) Defendants. )

LEE J. DORFMAN, individually and d.b.a. ADEPT OF SF, d.b.a. iDICTATE,

USDC NO. C 05-01791 PJH (San Francisco Superior Court No. CGC-05439650) & Related Case: USDC No. C 06-05290 PJH

JOINT MOTION FOR ENTRY OF AGREED FINAL ORDER RESOLVING AS SPECIFIED THEREIN ALL CLAIMS BY AND BETWEEN ALL PARTIES

AND RELATED CROSS ACTION(S) Joint Motion for Entry of Agreed Final Order
Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., USDC Case Nos. C 05-01791 PJH & C 06-05290 PJH

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Michael C. Donovan (SBN: 153855) 22 LAW OFFICES OF MICHAEL DONOVAN 23 4546 El Camino Real Suite B-10, # 414 24 Los Altos, CA 94022 Telephone & Facsimile: 650-745-1190 25 E-mail: [e-mail] 26 Attorneys for Plaintiff Lee Dorfman and 27 Defendants and Counterdefendants Lee Dorfman and Adept of San Francisco 28
Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA (San Francisco Division)

LEE DORFMAN, Plaintiff, v. RICHARD JACKSON, et al. Defendants.

Case No. C05-01791 (San Francisco Superior Court Case No. CGC-05-439650) & Related Case No. C06-05290

AGREED FINAL ORDER ______________________________ DRUID GROUP, INC., Plaintiff, v. LEE DORFMAN, et al. Defendants AND RELATED CROSS-ACTION(S) Presiding: Hon. Phyllis J. Hamilton, United States District Judge (Resolving As Specified Herein All Claims Among and Between All Parties)

John K. Schwartz (pro hac vice) LOCKE LORD BISSELL & LIDDELL LLP 100 Congress Avenue, Suite 300 Austin, Texas 78701 Telephone: [phone] Facsimile: [phone] Email: [e-mail] Attorneys for Richard Jackson, Druid Group, Inc., and CS/Dorfman Operating Company

AGREED FINAL ORDER

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RECITALS: On or about June 21, 1999 Druid and Dorfman entered into an agreement entitled

3 "Joint Venture Agreement Between Adept of San Francisco and Druid Group, Inc. dba Cyber 4 Secretaries" ("the Agreement") concerning the marketing and delivery of telephonic dictation 5 transcription services. 6 2. As a result of the Agreement, Dorfman set up a dictation service under the brand

7 name iDictate which was marketed, inter alia, by means of a website. The iDictate service 8 utilized a toll-free telephone number 877-DICTATE to provide dictation services to clients. The 9 transcriptions and other back-end functions were provided by Druid. As contemplated by the 10 Agreement, Druid continued to market and to provide dictation services under its own 11 proprietary brand names. 12 The parties later amended the Agreement by a written addendum dated . 13 February 16, 2000 ("the Addendum") The Agreement and Amendment are referred to 14 collectively herein as "the JVA." 15 4. On March 21, 2005, Dorfman filed suit against Druid and Jackson (hereinafter: 3.

16 "Defendants") in the California Superior Court of the City and County of San Francisco arising 17 from the JVA (the "Dorfman action"). In that action, Dorfman asserted a breach of contract 18 claim as well as tort claims for fraud, unfair competition, and intentional interference with 19 advantageous business arrangements. 20 5. On or about April 20, 2005 Dorfman obtained a Preliminary Injunction in the

21 Dorfman action. 22 6. The Dorfman action was later removed to the United States District Court for the

23 Northern District of California and then was transferred to the United States District Court for 24 the District of Montana. The Dorfman action was then transferred back to the United States 25 District Court for the Northern District of California on August 15, 2006. 26 7. On or about April 14, 2005, CS/Dorfman filed an action in the United States

27 District Court for the District of Montana styled CS/Dorfman Operating Company v. Dorfman, 28
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

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1 Case No. CV-05-53-M (the "CS/Dorfman action") which was later transferred to the United 2 States District Court for the Northern District of California before being dismissed. 3 8. On April 19, 2005, Druid filed an action in the United States District Court for the

4 Northern District of Texas styled Druid Group, Inc. v. Dorfman, Case No. 3-05CV-0762M (the 5 "Druid action"). The Druid action was transferred to this Court for the Northern District on 6 August 22, 2006. Following this transfer, Dorfman filed a counterclaim asserting various causes 7 of action. 8 /// 9 NOW, THEREFORE, THE PARTIES TO THIS AGREED FINAL ORDER

10 AGREE, AND THE COURT HEREBY FINDS, ORDERS, AND DECREES, AS 11 FOLLOWS: 12 13 14 15 16 17 18 19 A. I. JURISDICTION This Court has original subject matter jurisdiction over these matters pursuant to 28 U.S.C. § 1332 as there is complete diversity of citizenship between the parties and the amount in controversy exceeds the statutory threshold amount. The Court has personal jurisdiction over all the parties hereto. II. PARTIES Plaintiff: For purposes of this Agreed Final Order, Lee J. Dorfman, individually

20 and Lee J. Dorfman, d.b.a. Adept of San Francisco are referred to as the parties plaintiff hereto. 21 Hereinafter, they are collectively referred to as Plaintiff. 22 B. Defendants: For purposes of this Agreed Final Order, Richard Jackson, Druid 23 Group, Inc., and CS/Dorfman Operating Company are referred to as the parties defendant hereto. 24 Defendants Druid Group, Inc., CS/Dorfman Operating Company, and Richard Jackson are 25 collectively referred to as Defendants. 26 27 28 A. III. DECLARATION OF GOALS AND PURPOSES The parties hereto enter into this Agreed Final Order and Final Judgment and
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

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1 jointly submit it to the Court for review and entry with express desire and intention to settle all 2 disputes between them, and to resolve as set forth herein all potential and outstanding claims, 3 actions and causes of action between them, including without limit, those contained in the 4 Dorfman action, the CS/Dorfman action and the Druid action to avoid the costs and risks of 5 litigation. 6 B. The parties hereto further desire to terminate the JVA and sever and terminate all

7 business relationships between them under or related to the JVA. 8 C. The parties desire to provide full ownership and sole control of the iDictate

9 telephone number to Plaintiff. 10 D. Finally, the parties hereto desire to terminate in its entirety the Preliminary

11 Injunction issued herein as of the effective date of this Agreed Final Order. 12 13 14
IV. SETTLEMENT AGREEMENT

The parties reached a settlement agreement during mediation on October 23, 2007 that

15 contemplated additional formal documentation. However, a dispute arose between the parties 16 regarding the content of the formal documentation and how certain obligations should be 17 classified. The parties have "ratified" an agreed-upon transcript of the Court's audio recording 18 of the mediated settlement agreement (the "Settlement Agreement") that was put on the Record 19 at the conclusion of the October 23, 2007 settlement conference; a true and correct copy of 20 which is attached hereto as Attachment "A" and incorporated herein by reference. Accordingly, 21 the parties agree, and the Court hereby adjudges and decrees that the Settlement Agreement, to 22 the extent that it is not inconsistent with, or otherwise does not alter or amend, any of the 23 provisions of this Agreed Final Order, shall serve as the final and binding documentation of the 24 settlement of these actions. In the event of conflict between the provisions of the Settlement 25 Agreement and this Final Agreed Order, the provisions of this Agreed Final Order shall control, 26 unaffected by any contrary or conflicting provisions of the Settlement Agreement. 27 /// 28 ///
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

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V. RESERVATION OF ALL RIGHTS, CLAIMS AND DEFENSES REGARDING THE LIABILITY, IF ANY, OF DEFENDANT RICHARD JACKSON A. Settlement Efforts of the Parties. Despite the best efforts of the parties to fully

and finally settle all matters in dispute between them herein, the parties reached impasse on (among other things) the matter of the liabilities or obligations, if any, of Defendant Richard Jackson to make any or all of the settlement payments or perform any or all of the commitments of the settling defendants set forth in the Settlement Agreement or in this Agreed Final Order. Notwithstanding this impasse, the parties believe that there is a substantial probability that all matters between them at issue herein can be resolved by the timely compliance by all parties with the provisions of this Agreed Final Order without need to ever address the question of the liabilities or obligations, if any, of Defendant Richard Jackson to make any or all of the settlement payments or perform any or all of the commitments of the settling defendants set forth in the Settlement Agreement or in this Agreed Final Order. B. Reservation of Rights, Claims and Defenses. Accordingly, notwithstanding any

other provisions of the Settlement Agreement, Plaintiff reserves all of his rights, claims, defenses, and causes of action relating to the alleged obligation(s) or liability(ies) of Defendant Richard Jackson to make any or all of the settlement payments or perform any or all of the commitments of the settling defendants set forth in the Settlement Agreement or in this Agreed Final Order. To the same effect, each Defendant herein, specifically including Defendant Richard Jackson, reserves all rights, remedies, and defenses, and causes of action relating to the alleged obligation(s) or liability(ies) of Defendant Richard Jackson to make any or all of the settlement payments or perform any or all of the commitments of the settling defendants set forth in the Settlement Agreement or in this Agreed Final Order. VI. COMMITMENTS OF THE SETTLING PARTIES A. Settlement Consideration. Druid Group, Inc. shall pay the Plaintiff Five

27 hundred forty thousand dollars ($540,000) as and for all of Plaintiff's recoverable damages 28
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

Page 5 of 14 pages

1 injuries, costs, attorneys' fees, expert witness fees and expenses of any kind; ninety thousand 2 dollars ($90,000) of which Plaintiff acknowledges as already paid by Druid Group, Inc. and 3 received by Plaintiff. Druid Group, Inc. shall make consecutive monthly payments in the 4 amount of Thirty Thousand Dollars ($30,000.00) to Plaintiff on or before the first day of each 5 month until the entire amount shall have been paid in full. Any payment required by the this 6 Paragraph VI.A not received by Plaintiff by the close of business Central Standard Time of the 7 second banking day following the first day of the month that such payment was due shall be 8 delinquent. 9 B. Return of Plaintiff's Toll Free Telephone Number. Druid Group, Inc.

10 (specifically including Druid Group, Inc. d.b.a. CyberSecretaries) and CS/Dorfman Operating 11 Company timely shall provide Plaintiff with all cooperation, assistance and support reasonably 12 necessary to secure return to Plaintiff of "ownership," title to, and sole custody and control over 13 the iDictate telephone number 877-DICTATE (877-342-8283) (the "Telephone Number") and 14 the transfer of the custody of that telephone number to Sprint, c/o Dorfman's account # 15 470521084. As part of their obligations under this Paragraph IV.B, Druid Group, Inc. and/or 16 CS/Dorfman Operating Company shall execute and return to Plaintiff forthwith any documents 17 that may properly be required to be executed in order to accomplish the objectives of this 18 Paragraph VI.B. 19 20 21 VII. DISSOLUTION OF PRELIMINARY INJUNCTION Effective immediately upon entry of this Agreed Final Order, the Preliminary Injunction

22 previously entered herein shall be dissolved in its entirety, and shall have, and shall be of, no 23 further force and effect. 24 25 26 27 28 VIII. TERMINATION OF THE JVA The JVA is terminated in all respects, including any and all claimed or purported modifications or additional provisions, and shall be of no further force or effect. No covenant, condition, undertaking, warranty or representation contained or referenced in, or implied by, the
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

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1 JVA, including any claimed or purported prior, contemporaneous or subsequent oral agreements 2 or modifications related thereto, shall have any force or effect. 3 4 5 A. IX. NOTICES AND COMMUNICATION Original Contact Details: Any notice or communication between one Settling

6 Party to another Settling Party arising out of or relating to matters addressed in this Agreed Final 7 Order shall be given or communicated by addressing the notice or communication as follows: 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 B. For Defendants: For Plaintiffs: MICHAEL C. DONOVAN (SBN: 153855) LAW OFFICES OF MICHAEL DONOVAN 4546 El Camino Real Suite B-10, # 414 Los Altos, CA 94022 Telephone & Facsimile: 650-745-1190 E-mail: [e-mail] John K. Schwartz B. David L. Foster LOCKE LORD BISSELL & LIDDELL LLP 100 Congress Avenue, Suite 300 Austin, Texas 78701 Telephone: [phone] Facsimile: [phone] Email: [e-mail] [e-mail] Todd L. Peterson (SBN 142438) Samuel M. Zaif (SBN 116391) CHERNAY | PETERSON 201 Mission Street, Suite 1310 San Francisco, CA 94105 Telephone: [phone] Email: [e-mail] Change of Contact Details: In the event any party to this Agreed Final Order

25 makes any change to their counsel of record, or any counsel of record herein changes their 26 contact details as set forth in this Paragraph IX, the party or counsel shall file written notice of 27 the change with the Clerk of this Court, and give notice of the change or changes to all parties to 28
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

Page 7 of 14 pages

1 this Agreed Final Order by E-mail and regular U.S. Mail at the addresses set forth above, as they 2 may have been properly amended pursuant to this Paragraph IX.B. 3 4 5 X. MUTUAL RELEASES AND COVENANTS NOT TO SUE By Plaintiff: Except as provided in Paragraph V, Plaintiff, on his own behalf and on behalf of

6 his agents, and assigns, hereby forever releases, discharges, acquits and covenants not to sue 7 Defendants and each of them, and each of their agents, representatives, employees, directors, 8 officers, principals, attorneys, assigns, parents, affiliates, subsidiaries, successors and insurers 9 (the "Defendant Releasees"), from any and all claims, demands, actions, causes of action, 10 obligations and liabilities of any kind or nature whatsoever which he may have or claim to have, 11 whether known or unknown, that arise from, are alleged in or relate to the JVA, its formation, 12 execution, performance and termination. The foregoing release and covenant not to sue includes, 13 but is in no way limited to, any claim under any theory of recovery or liability whatsoever which 14 arises out of or is in any manner whatsoever, directly or indirectly connected with or related to 15 the JVA or any injuries or damages suffered as a result of or arising from any act, conduct, 16 statements or occurrence by the parties hereto and each of their agents, representatives, 17 employees, directors, officers, principals, attorneys, assigns, parents, affiliates, subsidiaries, 18 successors and insurers in connection with the JVA or the activities of the parties and Defendant 19 Releasees in connection therewith. The foregoing release and covenant not to sue includes, but 20 is in no way limited to, all claims or causes of action which were or could have been asserted in 21 the Dorfman action, the CS/Dorfman action and/or the Druid action, including any statements or 22 representations made therein or connected thereto. The foregoing release and 23 covenant not to sue expressly does not include any claims arising from the provisions of this 24 Agreed Final Order. A. By Defendants: 25 Except as provided in Paragraph V, for and in consideration

26 of the covenants and undertakings referenced herein, sufficiency of which is hereby 27 acknowledged, Defendants and each of them, on their own behalf and on behalf of their agents, 28 and assigns, hereby forever releases, discharges, acquits and covenants not to sue Plaintiff and
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

Page 8 of 14 pages

1 each of his agents, representatives, employees, directors, officers, principals, attorneys, assigns, 2 parents, affiliates, subsidiaries, successors. ("the Plaintiff Releasees"), from any and all claims, 3 demands, actions, causes of action, obligations and liabilities of any kind or nature whatsoever 4 which they may have or claim to have, whether known or unknown, that arise from, are alleged 5 in, or relate to the JVA, its formation, execution, performance and termination. The foregoing 6 release and covenant not to sue includes, but is in no way limited to, any claim under any theory 7 of recovery or liability whatsoever which arises out of or is in any manner whatsoever, directly 8 or indirectly connected with or related to the JVA or any injuries or damages suffered as a result 9 of or arising from any act, conduct, statements or occurrence by the parties hereto and each of 10 their agents, representatives, employees, directors, officers, principals, attorneys, assigns, 11 parents, affiliates, subsidiaries, successors and insurers in connection with the JVA or the 12 activities of the parties and Plaintiff Releasees in connection therewith. The foregoing release 13 and covenant not to sue includes, but is in no way limited to, all claims or causes of action which 14 were or could have been asserted in the Dorfman action, the CS/Dorfman action and/or the 15 Druid action, including any statements or representations made therein or connected thereto. 16 The foregoing release and covenant not to sue expressly does not include any claims arising 17 from the provisions of this Agreed Final Order. 18 19 20 A. XI. ACKNOWLEDGMENTS, REPRESENTATIONS & WARRANTIES California Civil Code Sec. 1542. The Parties affirm that they are not relying

21 upon and have not relied upon any representation or statement made by any other party with 22 regard to their rights or asserted rights. Each and every party to this Agreed Final Order hereby 23 assumes the risk of all mistakes of fact with regard to said controversies and with regard to all 24 facts which are now unknown to them relating thereto. All rights under California Civil Code 25 Section 1542 are hereby expressly waived. Section 1542 of the California Civil Code provides 26 as follows: 27 28
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

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1 2 3 4 B.

§ 1542. A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor. Execution in Counterparts. This Agreed Final Order may be executed by any of

5 the Parties to it in one or more counterparts, each of which shall be deemed an original, but all of 6 which together will constitute one agreement. 7 C. Authority of Signators. Each person and entity executing this Agreed Final 8 Order on behalf of any other person or entity does hereby personally represent and warrant to the 9 other parties that he had the authority to execute this Agreed Final Order on behalf of, and fully 10 bind, such purported principal. 11 D. Entirety of Parties Agreement. This Agreed Final Order, including the 12 Settlement Agreement attached hereto as Exhibit A, contains the entire agreement between the 13 parties relating to the transactions contemplated hereby and all prior or contemporaneous 14 agreements, understandings, representations and statements, oral or written, are merged into this 15 Agreed Final Order. 16 E. Modifications, Waivers & Discharge. No modification, waiver or discharge 17 of this Agreed Final Order will be valid unless it is in writing and signed by the party against 18 which the enforcement of the modification, waiver or discharge is or may be sought. 19 F. Effect of Headings. The descriptive headings of the several sections and 20 paragraphs contained in this Agreed Final Order are inserted for convenience only and shall not 21 control or affect the meaning of or construction of any of the provisions hereof. 22 G. Reflective of the Parties' Intent. The parties represent and declare that they 23 have carefully read this Agreed Final Order prior to their execution of it and its submission to the 24 Court, and know the contents thereof, that they have been advised by legal counsel of their 25 choice, that they executed this Agreed Final Order freely, that it is their intention to be bound by 26 its terms, and that in executing this Agreed Final Order they rely solely upon their own 27 28
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

judgment, belief and knowledge, and the advice and recommendations of their own

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1 independently selected counsel, concerning the nature, extent and duration of their rights and 2 claims hereunder and regarding all matters which relate in any way to the subject matter hereof, 3 and that they have not been influenced to any extent whatsoever in executing this Agreed Final 4 Order by any representations, statements or omissions pertaining to any of the foregoing matters 5 by any party or by any persons representing any party to this Agreed Final Order. 6 H. All Parties in Pari Materia. All parties acknowledge that the terms of this

7 Agreed Final Order were reached between them and their counsel and counsel for the other 8 parties. Because the parties hereto have each reviewed the terms of this Agreed Final Order 9 prior to their execution of it and its submission to the Court, and have relied on the advice of 10 their respective attorneys as to its terms and provisions, the usual rule that the provisions of a 11 document are to be construed against the drafter does not apply to the interpretation of any of the 12 provisions hereof. 13 I. No Restriction of Plaintiff's Ability to Assign. No provision of this Agreed

14 Final Order, is intended to, shall, or shall be construed to, limit or restrict in any way the right 15 and ability of Plaintiff to sell, assign, convey, or pledge his rights to receive and collect any of 16 the amounts that are, may be, or may become due to him pursuant to this Agreed Final Order. 17 J. Attorney Fees and Litigation Costs. Should any party to this Agreed

18 Final Order reasonably retain counsel for the purpose of enforcing the Settlement Agreement or 19 the Agreed Final Order, or retain counsel for the purpose of defending an action brought to 20 enforce the Settlement Agreement or the Agreed Final Order, then, if said matter is settled by 21 judicial determination (which term includes arbitration), the prevailing party or parties (whether 22 at trial or on appeal) shall be entitled, in addition to such other relief as may be granted, to be 23 reimbursed by the losing party or parties for any reasonable and necessary costs and expenses 24 incurred thereby, including but not limited to reasonable attorneys' fees and costs for the services 25 rendered to such prevailing party. 26 27 28 XII. NO ADMISSION OF LIABILITY The parties hereto further warrant, represent and agree that in executing this Agreed Final
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

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1 Order and submitting it to this Court, and in making payment of the sums referenced herein, each 2 party does so with full knowledge of any and all rights which they may have with respect to the 3 controversies herein compromised and that they have received independent legal advice from 4 their attorneys with regard to the facts relating to said controversies and with respect to the rights 5 and asserted rights arising out of said facts. In this regard, each party understands, acknowledges 6 and agrees that payments or undertakings referenced herein are not an admission of liability on 7 the part of any of them, but to the contrary, represents a compromise of asserted claims which 8 are contested, disputed and denied. 9 10 11 A. XIII. TERMINATION Motion for Termination. At any time after the payment obligations under

12 Section IV of this Agreed Final Order have been satisfied in full, Defendants may, by noticed 13 motion, served via E-mail and by regular U.S. mail on Plaintiff at the address set forth in or 14 pursuant to Section IX of this Agreed Final Order, move this Court for an Order terminating this 15 Agreed Final Order. This Agreed Final Order shall terminate Twenty (20) days following filing 16 of Defendants' motion, unless Plaintiff earlier files and serves an objection to such termination 17 by a verified pleading asserting: (i) that a payment to Plaintiff required by Section IV of this 18 Agreed Final Order has not been made as or when required, and Plaintiff is seeking relief with 19 respect thereto; (ii) that reasonable cooperation, support and assistance to Plaintiff as required by 20 Paragraphs VI.B of this Agreed Final Order has not been made; or (iii) that there is pending 21 before the Court any motion or proceeding involving any contested issues arising under this 22 Agreed Order. In the event Plaintiff files and serves a compliant objection to Defendants' 23 motion for termination of this Order, Defendants are entitled to an Order terminating this Agreed 24 Final Order & Final Judgment unless at a date and time scheduled by the Court Plaintiff 25 establishes by a preponderance of the evidence that either: (1) all of the payments required to be 26 made by Paragraph VI.A of this Agreed Final Order have not been made as or when required, 27 and Plaintiff is seeking relief with respect thereto; (2) Druid Group, Inc. and CS/Dorfman 28
AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

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EXHIBIT "A"

RATIFIED, AGREED TRANSCRIPT OF COURT'S AUDIO RECORDING OF SETTLEMENT PUT ON THE RECORD BEFORE HON. BERNARD ZIMMERMAN AT THE CONCLUSION OF SETTLEMENT CONFERENCE BETWEEN THE PARTIES ON OCTOBER 23, 2007

EXHIBIT "A" TO AGREED FINAL ORDER Dorfman vs. Jackson, et al. & Druid vs. Dorfman, et al., Case Nos.: C 05-01791 & C 06-05290 (N.D. Cal)

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

LEE J. DORFMAN, individually and dba ADEPTS OF SF, dba iDICTATE, Plaintiff, v. RICHARD JACKSON, individually & dba CYBER SECRETARIES; DRUID GROUP, INC., dba CYBER SECRETARIES, dba YOU DICTATE, and DOES 1 to 100, Defendants. DRUID GROUP, INC., Plaintiff, v. LEE DORFMAN, individually and dba Adept of San Francisco Defendants. ______________________________________ AND RELATED CROSS ACTION(S) PARTIES' AGREED TRANSCRIPT OF COURT'S RECORDING FROM OCTOBER 23, 2007 SETTLEMENT CONFERENCE BEFORE THE HON. BERNARD ZIMMERMAN USDC NO. C 05-01791 PJH (San Francisco Superior Court No.CGC-05439650) & Related Case: USDC No. C 06-05290 PJH

Parties' Transcript of Court's Recording from October 23, 2007 Settlement Conference Before the Hon. Bernard Zimmerman Page 1 of 12

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Michael C. Donovan (SBN: 153855) LAW OFFICES OF MICHAEL C. DONOVAN 4546 El Camino Real Suite B-10 #414 Los Altos, CA 94022 Telephone & Facsimile: [phone] E-mail: [e-mail] Counsel for Plaintiff

John K. Schwartz, Esq. B. David L. Foster, Esq. LOCKE LORD BISSELL & LIDDEL, LLP 100 Congress Avenue Suite 300 Austin, Texas 78701-2748 Telephone: [phone] Facsimile: [phone] E-Mail: [e-mail] [e-mail] Todd L. Peterson (SBN: 142438) Samuel M. Zaif (SBN: 116391) DRYDEN, MARGOLES, SCHIMANECK & WERTZ A Law Corporation 101 California Street, Suite 2050 San Francisco, CA 94111 Telephone: [phone] Facsimile: [phone] E-mail: [e-mail] [e-mail] Counsel for Defendant(s)

Judge Zimmerman: Two consolidated, have these actually been consolidated? Mr. Zaif: No, No. Judge Zimmerman: Two cases, Dorfman versus Jackson which is C5-1791 and Druid versus Dorfman which is C6-5290. Both of them are Judge Hamilton's cases. We've had settlement discussions all morning, we have reached a settlement and before I put the essential terms on the record let's take appearances. So, let's start with counsel for Mr. Dorfman. Mr. Donovan: Good afternoon Your Honor, this is Michael Donovan on behalf of the Plaintiff, Lee Dorfman. Judge Zimmerman: And, also he's the plaintiff in 1791 and... Mr. Donovan: and, the Defendant with his dba Adept of San Francisco in the companion case. Judge Zimmerman: You represent all of these parties? Mr. Donovan: Yes, Sir.
Parties' Transcript of Court's Recording from October 23, 2007 Settlement Conference Before the Hon. Bernard Zimmerman Page 2 of 12

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Judge Zimmerman: Now, let's go over to this side. Mr. Zaif: Good afternoon, Your Honor, Sam Zaif, representing Druid and Richard Jackson in the related cases. Judge Zimmerman: Alright now Mr. Dorfman, why don't you identify yourself. Mr. Lee Dorfman: Lee Dorfman, plaintiff in the matter. Judge Zimmerman: Now what is your position with I think it's Adept, is it? Mr. Lee Dorfman: I'm the principal of Adept. Judge Zimmerman: Okay, you have authority to settle this case on behalf of Adept? Mr. Lee Dorfman: Yes, I do. Judge Zimmerman: Mr. Jackson, would you identify yourself? Richard Jackson: Richard Jackson here individually and on behalf of Druid Group. Judge Zimmerman: Now, also sued are Cyber Secretaries and YouDictate, and you are also the principal of those companies? Mr. Jackson: No, I think those are DBA's Judge Zimmerman: Oh, those are DBA's. Mr. Jackson: DBA's or something, I'm just here on behalf of myself and Druid Group. Judge Zimmerman: And you have the authority to settle this case on behalf of Druid Group? Mr. Jackson: Yes Judge Zimmerman: Now, the terms of the settlement are as follows. One term is that the relationship between the parties which is embodied in the agreement signed in 2000; I think it was February ...sorry ... June 21, 1999. Then there's an addendum which was signed, it looks like, February, 16, 2000. That relationship will be severed prospectively. And to do that, Druid and/or Mr. Jackson will route existing iDictate customers to the iDictate telephone line so they can arrange for transcription services. The financial term is that Druid and/or Jackson will pay to Dorfman the sum of $30,000 a month over an 18 month period and I would expect that the first payment will be made at the time the settlement papers are executed, and we'll talk about more of that in a moment. So, there will be a total payout over the life of the agreement of $540,000. In return there will be a dismissal of both lawsuits, mutual releases exchanged of all claims. I would suggest that this be
Parties' Transcript of Court's Recording from October 23, 2007 Settlement Conference Before the Hon. Bernard Zimmerman Page 3 of 12

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global release because the intendment is to resolve all aspects of the relationship as it exists up to the time the case is settled so that in effect going forward there should be no future relationship or claims between the parties. In other words everything is going to be settled whether it's known or unknown, whether it's been asserted or hasn't been asserted. That's my understanding of the essential terms of the settlement. As far as the logistics are concerned, there will probably take a little bit of time to prepare whatever document is needed to in effect sever the relationship; I could be wrong. Who will be drafting, we'll need that document and then we will also need some documents containing the mutual releases and the usual kind of settlement language. Who's going to draft one? Mr. Donovan: May it please the court, one issue on the form of settlement, I would like to have the form of the settlement to be an agreed order or a stipulated order forming who needs the releases, exchanges and all of the terms and conditions, because of the ongoing payments and because we have existing injunctive relief in this case; if we can use an agreed order format, rather than a private settlement agreement format. Judge Zimmerman: Well, what I think is really necessary is simply that the court maintain jurisdiction... Mr. Donovan: to enforce the settlement. Judge Zimmerman: Let me say this, I can't commit Judge Hamilton to retaining jurisdiction for 18 months. But there's this solution, if for some reason she doesn't want to keep the case open on her books, you can stipulate to my jurisdiction. The case then will then be re-assigned to me and I'll retain jurisdiction for 18 months. Mr. Lee Dorfman: I actually would prefer that. Mr. Zaif: We don't foresee any problems, but we don't want ..... Judge Zimmerman: I'm just offering it as an option. I'm willing ........ some judges, most judges will retain jurisdiction for a period of like a year or 18 months, but some are concerned about it. But, I don't have a problem with it so I'll leave it all to you. You can ask Judge Hamilton to do it or you can simply execute the required consent in both cases and then request it to be re-assigned to me.
Parties' Transcript of Court's Recording from October 23, 2007 Settlement Conference Before the Hon. Bernard Zimmerman Page 4 of 12

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Mr. Richard Jackson: Addressing the Court's last point on the details, I think it's going to take time on the details of separating the two businesses, transferring the phone number, and the, you know, appropriate relationships and arrangements for all the transferred customers. Judge Zimmerman: Well, but how much time? Who's going to draft the document? That's what I'm trying to figure out. Mr. Zaif: I will, Your Honor. Judge Zimmerman: Okay, Mr. Zaif will draft the document. Mr. Richard Jackson: When you say the release, do you mean the entire settlement? Mr. Zaif: Are we envisioning two separate documents? Judge Zimmerman: Make it one agreement, I don't know. Mr. Donovan: I think it should be one agreement. Judge Zimmerman: Sometimes there's a business necessity to have a, what I would call, a dissolution document which is other than the settlement agreement. You may have business reasons, you may need to show something to somebody; I don't know, I don't really care. About, look, I'll just leave it for Mr. Zaif to try drafting one, you can always break something out in two. What are we talking about, Ten days, two weeks? Mr. Zaif: Two weeks Judge Zimmerman: Two weeks. Okay. Mr. Zaif: That's a very good point. For some reason if we have to show it to somebody, not have the terms of this particular settlement disclosed, so the fact that two people are no longer in business can be just a business deal contract, whereas the exchange of funds and all the rest that may be a legal matter we don't want to make public. Judge Zimmerman: So, two weeks for Mr. Zaif to draft the documents. I'll give you two weeks to either execute them or negotiate any changes. So the goal is that within 4 weeks, 28 days, 30 days, some period of time like that the settlement documents will be executed. At that point you can also execute the consents and follow the request to Judge Hamilton, I'll notify her this is coming, that the case is being reassigned to me. And then just make sure that the releasing document indicates that the court retains jurisdiction for of course the settlement, for 18 months.
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Mr. Donovan: And Your Honor, would that motion or whatever, the process in front of Judge Hamilton be by motion to transfer to you, is that a standard form? Judge Zimmerman: I think you can just stipulate. The consent forms you can get those off the machine, Mr. Donovan: Yes Judge Zimmerman: I would say if you just file a stipulation saying the parties stipulate that these two cases shall be transferred to Magistrate Judge Zimmerman and they've consented to his jurisdiction, and it is so ordered. I think that's all you need. And as I say, I will alert her to the fact that this is coming. Alright, let me then just turn it back over to Mr. Donovan, do you have anything you with to add or clarify to the terms of the settlement that I've put on the record? Mr. Donovan: Only, Your Honor, as we've discussed before, that the separation, that the parties both agree to separate their business, the details of that separation we're going to agree will be put in the paper that we've agreed upon, that's obviously significant to the Plaintiff, I think the terms recited are correct. Judge Zimmerman: Alright, anything you wish to add or clarify Mr. Zaif? Mr. Zaif: Clarifications of lawyers only cause problems, I just want to make sure that we sort of have a two-week, two-week understanding regarding the finalizing the documents. Is that supposed to coincide with the actual finalizing of the termination activities or will the documents... Judge Zimmerman: I think the agreeable time frame should be in the documents. Mr. Zaif: ...in the documents. In other words it isn't necessarily that everything that has to happen to terminate this relationship has to be completed at the closing, so to speak. Judge Zimmerman: Well, no, but I think at the same time we don't want this thing to be dragging on for too long. Mr. Zaif: No, no, we don't. Judge Zimmerman: Why don't we just say, how much time, what I was told earlier was that as a practical matter what it will take is a phone call to a service provider saying, switch the calls to this number.

Parties' Transcript of Court's Recording from October 23, 2007 Settlement Conference Before the Hon. Bernard Zimmerman Page 6 of 12

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Mr. Donovan: We have the transfer of the phone, the 877 number, that I understand will be done forthwith and then you and I can work on the rest of the details. Mr. Zaif: Okay, sure. Judge Zimmerman: So, let's make it as a goal, then, that when by the time, concurrently with the signing of the settlement documents, the transfer of the phone number will be accomplished. It'll be no later than 28 days, or earlier. Mr. Dorfman: There's no reason it can't be done now. Judge Zimmerman: Well, because then what happens is if for some reason the settlement doesn't go through, I don't think it won't, then they would have to undo something. So, I think we need to Mr. Jackson: And besides that, I'm not really sure what's involved with that. I don't want to sit here and commit that anything can happen, and any, a reasonable time frame but I don't know what's involved in the severing of the relationship. We've been doing work and have had these clients for a long time, I want to do it, do it right and do it thoroughly, but I'm not sure of the time frame. Judge Zimmerman: Well, but I think this, to accommodate Mr. Dorfman's concerns, I mean some things may take a while for example, there may have to be some kind of accounting at the end of it all that will be necessary, you may not be able to do it in a week or two. But, I think that from the perspective of his desire, which is to, is a big motivation in getting this settlement accomplished so that he can move on with his business I think the phone doesn't have to wait, for example, some of the other details that may take some time to do like if there's necessity for a final accounting. Mr. Zaif: I want to make sure that in the separation process nothing occurs from somebody alleges for grounds for any fresh complaints, we want to do this in a way that's clean. That's in everybody's interest. Mr. Dorfman: There's no reason why a phone call to Sprint can't be made to say here's Dorfman's signed papers, you know, already just transferring, pursuant to the terms of the original agreement; the phone number is my number. There's no reason why it can't be transferred from his account to my account now. There's no reason to wait for anything ...

Parties' Transcript of Court's Recording from October 23, 2007 Settlement Conference Before the Hon. Bernard Zimmerman Page 7 of 12

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Judge Zimmerman: Well, the problem we're having is if it turns out the settlement we have here, for whatever reason, it's hard for me to conceive of what it would be, doesn't go through then it would have to be re-done. Mr. Dorfman: Even if the settlement didn't go through it's still my number by virtue of the... Judge Zimmerman: Well, I don't know.... Mr. Jackson: I'm not transferring anything until the settlement signed. We don't even know what this entails yet. So we're going to have to wait to see what's involved in doing this. We're not going to rush forward and do something, and then like as Sam says, get cross ways (inaudible). Judge Zimmerman: It's been over 8 years, I think we're on a fairly short time frame, 28 days, I think, let's just make sure it gets done in the 28 days. Anything else anyone wishes to add or clarify. I understand that there's going to have to be terms worked out for the dissolution but the essential terms of the settlement we've put on the record. Is there anything else anyone wishes to add? Mr. Jackson: Let me clarify a couple of things judge, as I understand it what a part of the settlement is that we're terminating any existing contract between the parties? Judge Zimmerman: That's correct. Mr. Jackson: And another thing is, I would want a term in the settlement documentation that it's all being kept confidential and it's not being disclosed to outside parties. Mr. Zaif: The terms of the settlement. Judge Zimmerman: Let me just make sure that people understand what I understand by that. That's the financial part. The fact that the case has been settled will be a matter of public record. And as we discussed earlier, there may well be reasons why the parties will have to announce that they have reached, you know the fact is the settlement will be known to people. What I suggest is the attorney's draft up a short piece of paper, simply announcing the fact that the parties have amicably resolved their differences, and you know in the future iDictate will be iDictate, and so on and so forth. But, the terms of the settlement, you know the financial terms, are, if the parties agree to confidentiality, what that means is it can be disclosed to lawyers, financial advisors, tax accountants, etc. to members of real immediate family, people who know about this litigation, you know if you're married and the wife says "what happened", and response to court orders and
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process. Otherwise, financial terms of the settlement are confidential. At least, I want you to understand what I mean and the question now is, with that understanding, is that acceptable to Mr. Dorfman? Mr. Dorfman: Confidentiality is both ways by the way; he needs to keep it confidential. Mr. Donovan: The only problem obviously agreeing with confidentiality terms is that we don't have the terms in front of us but the concept you articulate is not problematic. Judge Zimmerman: Just so that I'm clear, it's $30,000 times 18 okay, that's what's being kept confidential. The fact that you've agreed to sever the relationship, that the lawsuits will be dismissed at the end of 18 months, that's not confidential, that's going to be in the public record. Okay? Mr. Jackson: We'll work on language and see if that's acceptable. Mr. Donovan: I think that's right. Mr. Dorfman: When this is over, I just want it to be over. Mr. Jackson: Ditto. Judge Zimmerman: It looks to me like confidentiality agreement I saw Mr. Dorfman starting to say this, it's agreeable in principal, the parties just have to work out the language. I can tell you right now if you have difficulty with the language, I know what it means. I know. Anything else anybody wishes to add or clarify? Mr. Jackson: One other thing I think we ought to clarify Judge, since you mentioned it a couple of times, there's really no, no part of the settlement that will involve any accounting or anything of that sort. What all the parties are going to do is reach this agreement, negotiate terms that are satisfactory to everybody. And then that's it, we're done with each other. Judge Zimmerman: Well, I don't know exactly sort of what your business is, I'm guessing that part of what Mr. Dorfman's thinking is that the longer this goes on, the more his customer's continue to be run through and so on and so forth. That's what I was saying, I don't know whether there's going to be a need for any accounting. Mr. Zaif: I think we don't agree to any accounting. Mr. Jackson: Well, I think we agreed to an accounting, we agreed to $30,000 for 18 months.
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Judge Zimmerman: Alright. Well, then the question then arises maybe Mr. Dorfman's concerns are becoming more immediate. Mr. Zaif: Well, we can push the document faster. Judge Zimmerman: Fine, the point is, tomorrow, if he settled his claim and obviously you're continuing to make money. What he's saying is he wants to get his old customer's back as soon as he can. That's why he's saying why can't we do it in the next day or two. I understand your concerns, but it just seems to me that if we're not going to have some way of accounting for what's going to happen in the next couple of weeks then we need to use our efforts to accelerate the process as soon as possible. Mr. Donovan: That's right. Judge Zimmerman: Is that what we think is right ­ 2 weeks? Mr. Jackson: Well, there's two parts to this, 2weeks and there's the accounting issue. Mr. Zaif: That' right, just start drafting. Mr. Jackson: What's involved in can