EXHIBIT 10.4
PATENT LICENSE AND SETTLEMENT AGREEMENT
BETWEEN
BINKS XXXXX CORPORATION, XXXXX, X.X.
AND XXXXX ELECTROSTATIC, INC.
AND
XXXX SYSTEMS GmbH AND BEHR SYSTEMS, INC.
This Patent License and Settlement Agreement ("Agreement") is entered into
as of July 10, 1998, by and between Binks Xxxxx Corporation ("Binks"), Xxxxx,
X.X. ("SSA") and Xxxxx Electrostatic, Inc. ("SEI") (collectively referred to as
"Binks Entities") on one hand, and Behr Systems, Inc. ("Behr") and Xxxx Systems,
GmbH ("Xxxx") (collectively referred to as "Xxxx Entities") on the other hand,
is in settlement of pending litigation brought by the Xxxx Entities against the
Binks Entities.
1. BACKGROUND
1.1 The Xxxx Entities own U.S. Patent No. 4,405,086 entitled
"DEVICE FOR ATOMIZING LIQUID COLOR" and the related foreign patents
identified on Exhibit A ("the Xxxx Patents").
1.2 Behr has filed suit in the United States District Court for the
Eastern District of Michigan in Civil Action No. 97-72744 and Xxxx has filed
suit in Germany against the Binks Entities for infringement of the Xxxx
Patents ("the Lawsuits"). The Lawsuits seek the entry of a permanent
injunction and damages for past infringement of the Xxxx Patents.
1.3 The parties have agreed to settle the Lawsuits and release each
other as set forth below.
1.4 The Xxxx Patents are valid, enforceable and infringed by the
PPH 605 and PPH 607 atomizers and xxxx cups for the PPH 605 and PPH 607
atomizers, all made and/or sold by the Binks Entities.
2. RESOLUTION OF THE PENDING LITIGATION
2.1 Within five (5) business days after the date first written
above, the parties and their attorneys will execute and file a Consent
Judgment in a form attached hereto as Exhibit B, in both the United States
District Court for the Eastern District of Michigan and the applicable court
in Germany where the Lawsuits are pending. Said Consent Judgment shall
declare the Xxxx Patents
valid, enforceable and infringed, shall dismiss the Lawsuits with prejudice
and shall provide that each party will bear its own attorneys' fees and costs.
2.2 The Xxxx Entities release the Binks Entities from any and all
Claims (as defined in paragraph 2.4) relating to the Xxxx Patents which have
been or could have been asserted in the Lawsuits to the date of this
Agreement and covenant not to xxx the Binks Entities under such Claims.
2.3 The Binks Entities release the Xxxx Entities from any and all
Claims (as defined in paragraph 2.4) relating to the Xxxx Patents which have
been or could have been asserted in the Lawsuits to the date of this
Agreement and covenant not to xxx the Xxxx Entities under such Claims.
2.4 "Claims" shall refer to all obligations, actions, causes of
action, suits, debts, covenants, contracts, controversies, agreements,
promises, damages, judgments, and demands whatsoever, of any kind, type or
description, whether known or unknown, disputed or undisputed, accrued or
unaccrued, liquidated or contingent, foreseen or unforeseen, direct,
vicarious or derivative, asserted or unasserted, in law (by virtue of common
law, statute, operation of law or otherwise), equity or admiralty.
3. LICENSE
3.1 Upon payment as described in paragraph 3.2 below, the Binks
Entities shall have a non-exclusive, fully paid-up, worldwide license under
the Xxxx Patents (including any continuations, reissues and reexaminations
thereof) for their remaining life of the Xxxx Patents. If at the time of
payment, SSA and SEI are no longer affiliated with Binks, then only SSA and
SEI shall have the non-exclusive, fully paid-up, worldwide licenses under the
Xxxx Patents for their remaining life.
3.2 Within five (5) business days after the closing of the sale of
Binks or the closing of any separate sale of SSA and SEI, but in any event
(regardless of whether a sale occurs) no later than December 31, 1998, the
Binks Entities (or such purchaser) shall wire transfer to an account
designated in writing by the Xxxx Entities the sum of $9,000,000 U.S.
Dollars. In the event that the Binks Entities fail for any reason to make
full payment as provided in the Agreement, the license shall terminate and
the parties stipulate to entry of an immediate permanent injunction in both
the United States District Court for the Eastern District of Michigan and the
applicable court in Germany where the Lawsuits are currently pending. Such
injunction shall, on a worldwide basis, permanently enjoin the Binks
Entities, along with their successors, assigns, agents and representatives,
from making, using, selling, or offering to sell any product that infringes
the Xxxx Patents, including but not limited to the PPH 605 and PPH 607
atomizers and the xxxx cups for PPH 605 and PPH 607 atomizers and similar
products, and is in addition to any remedies the Xxxx Entities may have to
enforce payment of the sum specified above.
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3.3 The Binks Entities will have no right to grant sublicenses or
bring suit under the Xxxx Patents.
3.4 Any improvements will be the sole property of the party making
the improvement.
3.5 This Agreement is binding on the successors of the Binks
Entities (including any purchaser of any of them) and Xxxx Entities. This
Agreement shall be assignable by the Binks Entities upon the sale of Binks,
or upon the sale of SSA and SEI, should SSA and SEI be sold separately, but
only to the purchaser(s) of such entities. In all other instances, this
Agreement is assignable only with the prior written consent of the other
parties, which consent may be withheld in the sole discretion of such other
parties.
3.6 The Xxxx Entities warrant that they possess full and
unencumbered title to the Xxxx Patents, have the right to enter into this
Agreement and that the Xxxx Patents on Exhibit A remain in force and shall be
maintained in all countries for their full term.
3.7 The Binks Entities agree to notify the Xxxx Entities of any
infringement of the Xxxx Patents and cooperate with the Xxxx Entities in any
other lawsuits that the Xxxx Entities may bring regarding the Xxxx Patents.
The Binks Entities agree not to assist and/or cooperate with other persons or
entities who challenge the validity, enforceability, or infringement of the
Xxxx Patents.
4. MISCELLANEOUS
4.1 This Agreement shall be governed in all respects by the laws of
the State of Michigan without regard to choice of law principles. The U.S.
District Court for the Eastern District of Michigan shall have exclusive
jurisdiction of any controversy between the parties regarding this Agreement.
4.2 This Agreement constitutes the entire agreement between the
parties with respect to any matter related to the Lawsuits or set forth in
this Agreement. The terms of this Agreement may not be varied except by
written agreement executed by all parties. No other agreements, written or
oral, express or implied, exist between the parties.
4.3 This Agreement is not a license or release under any other
patents or patent applications owned by the Xxxx Entities.
4.4 The parties shall execute and deliver such further documents and
take such further actions as may be necessary to effect, consummate, confirm
or evidence their respective obligations in accordance with this Agreement.
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4.5 Each and every covenant and agreement contained herein shall
inure to the benefit of, and be binding upon, the agents, parents,
subsidiaries, employees, officers, directors, assigns and successors in
interest of the parties hereto.
4.6 Each of the parties represents and warrants that it has not
assigned or otherwise transferred all or any part of its claims, demands,
costs, expenses, liabilities, damages, actions or causes of action against
another party.
4.7 This Agreement shall be applicable in all territories throughout
the world.
4.8 All notices, requests, demands or other communications made
pursuant to the Agreement shall be made in writing and shall be deemed to
have been duly given when transmitted by facsimile to the addressee at the
facsimile number below, hand delivered by courier to the party to whom
addressed, or five (5) business days after dispatch by United States mail,
first class, postage prepaid to the following addresses, or at such other
addresses as the parties may designate by written notice in the manner
aforesaid:
If to the Xxxx Entities: Xxxxxx X. Xxxxxxxxxx
Behr Systems, Inc.
0000 Xxxxxxxxx Xxxxx Xxxx.
Xxxxxx Xxxxx, Xxxxxxxx 00000
Telephone: 734/000-0000
Facsimile: 734/459-6256
With copy to: Xxxxxx X. Xxxxxx, Esq.
Jaffe, Raitt, Heuer Xxxxx P.C.
Xxxxx 0000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: 313/000-0000
Facsimile: 313/961-8358
If to the Binks Entities: Binks Xxxxx Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000-0000
Telephone: 847/000-0000 x000
Facsimile: 847/671-3164
Attention: Xxxxxx X. Xxxxx, Chairman
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With copy to: Xxx X. Xxxxxx, Esq.
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: 312/000-0000
Facsimile: 312/609-5005
4.9 Any provision of this Agreement which is invalid, illegal or
unenforceable in any jurisdiction shall, as to that jurisdiction, be in
effective to the extent of such invalidity, illegality or unenforceability,
without in any manner effecting the remaining provisions hereof in such
jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction.
4.10 This Agreement may be signed using one or more counterparts.
The several executed copies together shall be considered an original and
shall be binding on the parties. In the event this Agreement is not executed
by all the parties hereto and delivered to Binks prior to 5:00 p.m. Chicago
time on July 8, 1998, this Agreement shall become null and void in its
entirety.
ACCEPTED AND AGREED TO:
XXXX SYSTEMS, GmbH BINKS XXXXX CORPORATION
By: /s/ Xxxx Xxxxxx Potsch By: /s/ Xxxxxx X. Xxxxx
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Its: Chairman Its: Chief Executive Officer
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Date: 7-8-98 Date: 7/10/98
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BEHR SYSTEMS, INC. XXXXX, X.X.
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
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Its: President Its: President
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Date: 7-8-98 Date: 7/10/98
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XXXXX ELECTROSTATIC, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: President
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Date: 7/1/98
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