Exhibit 10.1
SETTLEMENT AGREEMENT
- "AGREEMENT" -
between
AMERICAN BANK NOTE HOLOGRAPHICS, INC.
such being represented by its Chief Executive Officer, Xxxxxxx Xxxxx,
000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000, XXX
-"ABH"-
Attorneys: Fulbright & Xxxxxxxx L.L.P., Attn. Xx. Xxxxx Xxxxx,
000 Xxxxx Xxx., Xxx Xxxx 00000-0000, XXX
and
XXXXXXXX XXXX GMBH & CO. KG
such being represented by its General Manager and President,
Xx. Xxxxxx Xxxx
Xxxxxxxxxxx Xxx. 000, 00000 Xxxxxx, Xxxxxxx
-"KURZ"-
Attorneys: Louis, Pohlau, Xxxxxxxx & Segeth, Attn. Xx. Xxxxxx
Xxxxxxxxx. 00, 00000 Xxxxxxxxx, Xxxxxxx
- ABH and Kurz individually or collectively "PARTY(IES)" -
TABLE OF CONTENTS
1. Obligations of ABH.............................................................. 5
2. Obligations of Xxxx............................................................. 5
3. Cross License Agreement between the Parties dated February 25th, 1992 ("CLA")... 7
4. Right to represent and bind..................................................... 7
5. Miscellaneous................................................................... 7
6. Assignment...................................................................... 8
7. Confidential Information........................................................ 9
8. Press Release................................................................... 9
9. Applicable Law.................................................................. 9
10. Arbitration..................................................................... 9
11. Attachments..................................................................... 9
PREAMBLE
WHEREAS, ABH is a corporation organized and existing under the laws of Delaware;
and
WHEREAS, ABH is one of the leading companies in the design, production and
marketing of holograms used primarily for security applications such as the
authentication of transaction cards, valuable documents, and consumer and
industrial products; and
WHEREAS, Xxxx is a limited partnership organized and existing under the laws of
the Federal Republic of Germany; and
WHEREAS, Xxxx is one of the leading companies involved in the research,
development and production of decorative and security features, such as but not
limited to, optically variable devices for all kinds of applications (bank
notes, bank documents, identification documents, etc.); and
WHEREAS, ABH and Xxxx each have a portfolio of patents in their field of
operation, especially in relation to optically variable devices for all kinds of
applications (bank notes, bank documents, identification documents, etc.); and
WHEREAS, ABH is of the opinion that Xxxx has infringed its Demet Patents (A1)
and Xxxxxxxxx Patents (A2) and Xxxx is of the opinion that ABH has infringed its
Meisel Patents (A3); and
WHEREAS, Xxxx is of the opinion that it has not infringed the Demet Patents (A1)
and Xxxxxxxxx Patents (A2) and ABH is of the opinion that it has not infringed
the Meisel Patents (A3); and
WHEREAS, the Parties intend to conclude a final settlement in order to resolve
the existing disputes which have arisen between them, on the one hand and to
waive all claims in relation to the past, present and the future activities of
the Parties in relation to the patents (A1, A2, A3), on the other hand;
NOW THEREFORE, the Parties have agreed to an amicable out-of-court settlement as
follows:
DEFINITIONS
0.1 "ABH" shall mean American Banknote Holographics, Inc. with its
registered office at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000,
Xxxxxx Xxxxxx and its worldwide subsidiaries, affiliates, successors,
assignees and other organizations of ABH in which ABH has a direct or
indirect twenty-five percent (25%) share participation.
0.2 "ABH Customers" shall mean customers of ABH of any tier (i.e. customers
of ABH, customers of ABH's customers and their consecutive customers).
0.3 "Application" or "Apply" shall mean the application of a Xxxx Product
to a substrate, such as but not limited to, bank notes, bank documents,
identification documents and decorative applications.
0.4 "Demet Patents" shall mean the patents defined in A1.
0.5 "Xxxxxxxxx Patents" shall mean the patents defined in A2.
0.6 "Kurz" shall mean Xxxxxxxx Xxxx GmbH & Co. KG with its registered
office at Xxxxxxxxxxx Xxx. 000, 00000, Xxxxxx, Xxxxxxx and its
worldwide subsidiaries, affiliates, successors, assignees and other
organizations of Kurz over which Kurz has a direct or indirect
twenty-five percent (25%) share participation.
0.7 "Xxxx Customers" shall mean customers of Xxxx of any tier (i.e.
customers of Xxxx, customers of Xxxx'x customers and their consecutive
customers) which, inter alia, Apply and / or Use the Xxxx Product and
may, in the opinion of ABH, infringe the Demet Patents and Xxxxxxxxx
Patents.
0.8 "Xxxx Product" shall mean the foil products or systems with optically
variable devices produced, used or marketed by Xxxx and sold by Xxxx to
Xxxx Customers for application to substrates.
0.9 "Meisel Patents" shall mean the patents defined in A3 and any U.S. or
foreign counterpart patents.
0.10 "Use" or "To Use" shall mean to Apply, market, use, sell, supply or
perform other related activities in respect of the Xxxx Products.
1. OBLIGATIONS OF ABH
1.1 In consideration of and subject to payment of the amounts specified in
Article 2. and following the payment mode according to Article 2, ABH
hereby grants to Xxxx and Xxxx Customers an irrevocable release from
any past, present and future infringement of the Demet Patents and
Xxxxxxxxx Patents in connection with the Use of a Xxxx Product
(hereinafter "Released Products") and any of its consequences
("ABH-Release") other than the future Use of "Licensed Products" as
defined in Article 1.6 of the contemporaneous Patent License Agreement
between the Parties hereto, until the expiration date of such Demet
Patents and Xxxxxxxxx Patents as defined in A1 and A2. This release
shall be retroactive and extend to activities of Xxxx and Xxxx
Customers occurring prior to the date of execution of this Agreement,
except as to future use of "Licensed Products" as defined in Article
1.6 of the contemporaneous Patent License Agreement.
1.2 ABH shall assume responsibility for the application, maintenance,
reexamination, reissue, opposition and prosecution of any kind relating
to the Demet Patents and Xxxxxxxxx Patents.
1.3 ABH is the owner of the entire right in and to the Demet Patents and
Xxxxxxxxx Patents. ABH has full power and authority to grant the
Release in Article 1.1 and has the sole right to grant rights of Use to
Xxxx and/or Xxxx Customers of the Demet Patents and Xxxxxxxxx Patents
hereunder with respect to Released Products. The Demet Patents and
Xxxxxxxxx Patents are free and clear of all liens, charges and
encumbrances. ABH has not granted licenses or rights to any other party
in respect of the Demet Patents and Xxxxxxxxx Patents that would
restrict the Release of Xxxx and / or Xxxx Customers to Use the Demet
Patents and Xxxxxxxxx Patents granted by ABH hereunder, with respect to
Released Products.
2. OBLIGATIONS OF XXXX
2.1 Xxxx hereby grants to ABH and ABH Customers an irrevocable release from
any charge of past, present and future infringement of the Meisel
Patents ("Xxxx-Release").
2.2 Xxxx has full authority to grant the Xxxx-Release and/or waivers in
Article 2.1
2.3 Xxxx shall pay to ABH a lump sum of U.S. $ 900,000 (nine hundred
thousand U.S. dollars) subject to Article 2.4.
2.4 The Parties agree that the payment (Article 2.3) is in full and final
settlement of the releases, waivers and rights granted by the Parties
to each other expressed herein. The Parties agree that such payment is
without prejudice to Xxxx'x position that prior to this Agreement it
had no legal duty to make any payment to ABH.
2.5 The sum of U.S. $ 900,000 (nine hundred thousand U.S. dollars) shall be
paid in the following installments:
2.5.1 One-third of said sum, that is U.S. $ 300,000 (three hundred
thousand U.S. dollars) shall be paid within seven (7) bank
working days in Germany from the date of signature of this
Agreement;
2.5.2 The remaining two-thirds, that is U.S. $ 600,000 (six hundred
thousand U.S. dollars) shall be paid, to an account nominated
by ABH, in 8 (eight) installments of U.S. $75,000 (seventyfive
thousand U.S. dollars) each, no later than the first banking
working day in Germany of the following months:
October 2002;
January 2003;
April 2003;
July 2003;
October 2003;
January 2004;
April 2004; and
July 2004.
2.6 Upon the coming into effect of this Agreement (5.5), the Parties shall
have no claims against each other in relation to the subject matter of
this Agreement other than those expressly defined in this Agreement and
the Patent License Agreement executed contemporaneously herewith (A4).
3. CROSS LICENSE AGREEMENT BETWEEN THE PARTIES DATED FEBRUARY 25TH, 1992
("CLA")
The Parties further agree that the CLA shall be replaced with the
Substitute CLA (A5).
4. RIGHT TO REPRESENT AND BIND
This Agreement is fully legally binding in every respect upon ABH and
Xxxx. Xxxxxxxx Xxxx GmbH & Co. KG represents, and warrants, that it is
fully entitled to represent and to act for and on behalf of Xxxx by
execution of this Agreement, and vice versa, American Bank Note
Holographics, Inc. represents and warrants, that it is fully entitled
to represent and to act for and on behalf of ABH by execution of this
Agreement.
5. MISCELLANEOUS
5.1 COSTS
Each Party shall bear its own costs for lawyers fees and expenditure
incurred in relation to this Agreement.
5.2 NOTICES
To be binding, all information, letters, notices and the like, to be
exchanged between the Parties under the terms of this Agreement shall
be in writing and shall be validly made by personal delivery with
acknowledgement of receipt requested or by fax with confirmation by
letter or by registered letter:
ABH TO XXXX
American Bank Note Holographics, Inc. Xxxxxxxx Xxxx GmbH & Co. KG
Chief Executive Officer General Manager and President
000 Xxxxxxxxx Xxxxxxxxx Schwabacher Str. 482
Elmsford, NY 10523 90763 Fuerth
USA Germany
Tel: 001 / 914 / 592 - 2355 Tel: 0049 / 911 / 7141 - 0
Fax: 000 / 000 / 000 - 0000 Fax: 0049 / 911 / 7141 - 506
Any change of address shall be furnished in writing and sufficiently in
advance to the other Party. Notices hereunder shall be effective when
received or demonstrably deposited at the other Party's registered
office.
5.3 INVALIDITY
If any provision contained in this Agreement is or becomes ineffective
or is held to be invalid by a competent authority or court having final
jurisdiction thereon, all other provisions of this Agreement shall
remain in full force and effect and there shall be substituted for the
said invalid provision such valid provisions as have an economic effect
as similar as possible to the said provision.
5.4 ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the Parties and
supersedes all prior agreements, oral or written, concerning the
subject matter hereof. This Agreement may be amended only in writing
duly signed by the Parties hereto.
5.5 COMING INTO EFFECT
This Agreement shall come into effect subject to the following
conditions being fulfilled:
a) Signature of this Agreement, Patent License Agreement and the
Substitute CLA by both Parties ("Date of Execution of this
Agreement"); and
b) Payment of the sum of U.S. $300,000 by Xxxx to ABH as per
Article 2.5.1 of this Agreement.
6. ASSIGNMENT
6.1 In the event that ABH assigns any of the Demet Patents and / or
Xxxxxxxxx Patents to a third party, ABH shall guarantee that such third
party is obliged to fulfill ABH's obligations under the terms of this
Agreement in relation to the Demet Patents and / or Xxxxxxxxx Patents.
6.2 The Release granted in Article 1.1 is not assignable by Xxxx without
the written consent of ABH.
7. CONFIDENTIAL INFORMATION
The existence and contents of this Agreement shall be treated as being
confidential in relation to third parties and shall not be published or
referred to in advertising material or in information to shareholders
unless such confidential information is required to be disclosed under
U.S. laws or under German laws to a public authority or agency
(including, without limitation, the Securities and Exchange Commission)
or its equivalent in Germany or pursuant to judicial action, and the
other Party has been informed prior to such disclosure.
8. PRESS RELEASE
Xxxx and ABH shall agree to a mutually acceptable press release
concerning this Agreement and settlement of their differences.
9. APPLICABLE LAW
This Agreement shall be governed by English substantive law.
10. ARBITRATION
Any dispute arising out of or in connection with this Agreement,
including any question regarding its existence, validity or
termination, shall be referred to and finally resolved by arbitration
under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce by 3 arbitrators appointed in accordance with the
said Rules. The place of arbitration shall be London, UK. The language
of the arbitration shall be English.
11. ATTACHMENTS
Attachments 1 - 5 shall form an integral part of this Agreement even if
they are not signed separately.
DATE PAGE(S)
A1 List of DeMet Patents ./. 1
A2 List of Xxxxxxxxx Patents ./. 1
A3 List of Meisel Patents ./. 1
A4 Patent Licence Agreement 01.July.2002 14
A5 Agreement (Substitute CLA to replace Agreement 01.July.2002 15
dated Feb. 25th 1992)
The undersigned is authorized to The undersigned is authorized to
represent and execute this Agreement represent and execute this Agreement
on behalf of ABH. on behalf of Xxxx.
Xxxxxxxxx,xxx 00.Xxxx.0000 Xxxxxxxxx,xxx 01.July.2002
/s/ Xxxxxxx Xxxxx /s/ Xxxxxx Xxxxxxxx
--------------------------------------- ------------------------------------
AMERICAN BANK NOTE XXXXXXXX XXXX
HOLOGRAPHICS, INC. GmbH & Co KG
Name: Xxxxxxx Xxxxx Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer Title: Vice President of Security
Concepts and Member of the Board
Attachment 1 to the Settlement Agreement ABNH / Xxxx dated 01.07.2002
XXXXXX ("DEMET") PATENTS
NO. PATENT NO. COUNTRY OF VALIDITY EXPIRATION DATE
--- ---------- ------------------- ---------------
1 5.044,707 United States 25 January 2010
2 5.128,779 United States 07 July 2009
3 5.142,383 United States 25 January 2010
4 5.145,212 United States 08 September 2009
5 5.411,296 United States 02 May 2012
6 245300 Argentina 09 February 2009
7 1332301 Canada 11 October 2011
8 023740 Colombia 09 February 2009
9 0328086 European Patent (GB) 09 February 2009
10 1008105 Hong Kong (from EP) 09 February 2009
11 170832 Mexico 10 February 2009
12 52363 Venezuela 09 February 2009
Attachment 2 to the Settlement Agreement ABNH / Xxxx dated 01.07.2002
XXXXXXXXX PATENTS
NO. PATENT NO. COUNTRY OF VALIDITY EXPIRATION DATE
--- ---------- ------------------- ---------------
1 1 257 992 Canada 01 August 2006
2 2 129 739 United Kingdom 01 February 2003
3 656 721 A5 Switzerland 05 October 2003
4 2 535 864 France 27 April 2003
Attachment 3 to the Settlement Agreement ABNH / Xxxx dated 01.07.2002
MEISEL PATENTS
NO. PATENT NO. COUNTRY OF VALIDITY EXPIRATION DATE OWNER
--- ---------- ------------------- --------------- -----
1 4 232 077 United States 04 November 1997 Xxxx
2 1 568 563 Great Britain 29 October 1996 Xxxx
