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EXHIBIT 10.74
PORTIONS OF THIS EXHIBIT HAVE BEEN FILED
CONFIDENTIALLY PURSUANT TO RULE 24b-2
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EXHIBIT 10.74
SETTLEMENT AGREEMENT
Settlement Agreement effective as of March 28, 1996 (the "Effective
Date") by and between Energy Conversion Devices, Inc., a corporation of
Delaware having a place of business at 0000 Xxxx Xxxxx Xxxx, Xxxx, Xxxxxxxx
00000 ("ECD"), Ovonic Battery Company, Inc., a corporation of Delaware having a
place of business at 0000 Xxxxxxxxx, Xxxx, Xxxxxxxx 00000 ("OBC" or "Ovonic"),
ECD and OBC hereinafter collectively referred to as "ECD/OBC", and SAFT, S.A.
("SAFT"), a corporation organized under the laws of France and having a place
of business in Romainville, Seine-Saint Denis, France, SAFT AMERICA, INC.
("SAFT AMERICA"), a company organized under the laws of Delaware and having a
place of business at 000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxx 00000, GS-SAFT
LTD. ("GS-SAFT"), a corporation organized under the laws of Japan and having a
place of business in Kyoto, Japan, and JAPAN STORAGE BATTERY CO., LTD. ("JSB"),
a corporation organized under the laws of Japan and having a place of business
in Kyoto, Japan, the parties SAFT AMERICA, XXXX, XX-XXXX and JSB, each sometimes
hereinafter referred to collectively as the SAFT Group.
WHEREAS, ECD/OBC and the SAFT Group are parties to litigation pending
in the United States District Court for the District of Delaware, (Civil Action
No. 95-430-SLR (the "Civil Action"), relating, inter alia, to United States
Patent Nos. 4,623,597, 4,716,088 and 5,348,822 and the validity and
infringement thereof and to claims of unfair competition and violation of
Confidentiality Agreements;
WHEREAS, the SAFT Group has denied the validity of the patents and any
allegations of infringement, unfair competition and violation of
Confidentiality Agreements;
WHEREAS, certain parties in and affiliated with the SAFT Group have
also instituted certain actions outside the United States attacking the
validity and enforceability of certain ECD/OBC foreign patents;
WHEREAS, ECD/OBC seek in the Civil Action to enjoin SAFT, SAFT America
and Societe de Services de Propriete Industrielle ("SOSPI") and those acting on
their behalf from attacking the validity or enforceability of ECD/OBC's patents
both in the United States and outside the United States on the grounds that it
constitutes a breach of fiduciary duty and breach of confidentiality agreements
for SAFT, SAFT America and SOSPI to do so;
WHEREAS, the SAFT Group has disputed ECD/OBC's claims and request for
injunctive relief;
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WHEREAS, ECD/OBC and the SAFT Group desire to settle the Civil Action
on terms which have been mutually agreed upon pursuant to settlement
discussions conducted under the supervision of the Honorable Magistrate Judge
Xxxxxxx;
WHEREAS, the parties desire to enter into the present Agreement setting
forth in definitive form the aforementioned mutually agreed upon terms for
settling the Civil Action;
WHEREAS, the parties have agreed that all claims and counterclaims in
this litigation will be dismissed with prejudice;
NOW, THEREFORE, in consideration of the premises and the mutual
promises and obligations herein undertaken, the parties hereto hereby agree as
follows:
Article 1. Definitions.
1.1 " Patents" shall mean all United States
patents owned or controlled by ECD/OBC during the term of this
Agreement and relating to Hydride Batteries or materials, parts or
components thereof.
1.2 "Foreign Patents" shall mean all patents owned, controlled or
applied for by ECD/OBC in a country other than the United States
during the term of this Agreement and relating to Hydride
Batteries.
1.3 "Hydride Batteries" shall mean one or more electrochemical
cell(s) employed alone or in combination which utilize at least one
negative electrode capable of reversibly electrochemically storing
and releasing hydrogen.
1.4 "Consumer Hydride Batteries" shall mean (a) portable Hydride
Batteries having an energy storage capacity up to per
electrochemical cell, (b) Hydride Batteries for
equipment, whether portable or not, and having an energy storage
capacity of up to 40 per electrochemical cell, and (c)
Hydride Batteries for .
Specifically excluded from the scope of the definition of Consumer
Hydride Batteries are Hydride Batteries for
.
1.5 "Electric Vehicle Hydride Batteries" shall mean all Hydride
Batteries for the propulsion of electric propulsion vehicles,
including without limitation two or three wheeled vehicles.
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1.6 "Industrial Hydride Batteries" shall mean all Hydride Batteries
other than Consumer Hydride Batteries and Electric Vehicle Hydride
Batteries.
1.7 "Otherwise Dispose Of" shall mean to put into use or to lease,
sell or otherwise transfer title to another party or entity in
other than an arms-length transaction in the ordinary course of
business, but shall specifically exclude bona fide testing of any
battery.
1.8
1.9 "Affiliate" shall mean any corporation or other entity,
previously, now or hereafter existing, that controls a party to
this Agreement, is controlled by a party to this Agreement, or is
controlled by the same corporation or other entity which controls a
party to this Agreement, wherein "control" means direct management
control or direct or indirect ownership of at least 50% of the
stock
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entitled to vote for the election of directors or their equivalent.
Article 2. Settlement of Civil Action.
2.1 Pursuant to Rule 41(a)(1), Fed.R.Civ.P., the parties shall seek entry
of the Stipulated Order of Dismissal set forth in Exhibit A hereof
dismissing the Civil Action with prejudice with respect to all claims
asserted and which could have been asserted therein.
2.2 ECD/OBC and the SAFT Group, collectively and individually, hereby
release, acquit and forever discharge one another and their respective
Affiliates, suppliers or customers, from any and all claims or liability
for any claim which was or could have been asserted in this Civil
Action, including without limitation infringement of any of the Licensed
Patents, misuse of the Licensed Patents, and misappropriation of trade
secrets, breach of confidentiality agreements and/or breach of fiduciary
relationship in connection with information exchanged between ECD/OBC
and any of the SAFT Group prior to the Effective Date of this Agreement.
2.3 ECD/OBC hereby release, acquit and forever discharge SOSPI and Agence
Nationale de Valorisation de la Recherche ("ANVAR") and their respective
Affiliates, suppliers or customers, from any and all claims or liability
for any claim which was or could have been asserted in this Civil
Action, including without limitation infringement of any of the
Licensed Patents, misuse of the Licensed Patents, and misappropriation
of trade secrets, breach of confidentiality agreements and/or breach of
fiduciary relationship in connection with information exchanged between
ECD/OBC and any of the SAFT Group prior to the Effective Date of this
Agreement.
Article 3.
3.1 ECD/OBC hereby grant to SAFT, SAFT America and GS-SAFT and their
Affiliates
for the term of this Agreement
under the
Patents to make, have made, import, use, sell and
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otherwise dispose of Hydride Batteries in the United States, subject
only to .
3.2 ECD/OBC hereby grants to JSB and its Affiliates for the term of
this Agreement under the Patents to
make, have made, import, use, sell and otherwise dispose of
Hydride Batteries and Hydride Batteries in the United States.
3.3 ECD/OBC warrant that
they have the right to herein, and agree to indemnify
and hold harmless the SAFT Group for any breach of this warranty.
ECD/OBC further warrant that in hereunder, they are
conveying to the herein all rights which ECD/OBC have the right
to under any contracts with .
3.4 As part of the consideration for settling the Civil Action, ECD/OBC
agrees that neither they nor any person or entity acting for them or on
their behalf shall, during the term of this Agreement, institute any
litigation in the United States based on any claims which were or could
have been asserted in the Civil Action, including without limitation,
and to effectuate this provision, ECD/OBC agrees to the
entry of the Stipulated Order attached as Exhibit A.
3.5 As part of the consideration for settling the Civil Action, including
ECD/OBC's dismissal of claims of breach of fiduciary duty and breach of
confidentiality agreements, the SAFT Group agrees that neither they nor
any person or entity acting for them or on their behalf shall, during
the term of this Agreement, contest the validity or enforceability of
any of the Patents, other than pursuant to Articles 4.4, 4.7
and 12 herein, and to effectuate this provision the SAFT Group agrees
to the entry of the Stipulated Order attached as Exhibit A.
Article 4.
4.1 Upon execution of this Agreement, settling all claims,
including claims for royalties for
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alleged past infringement of the Patents by Hydride
Batteries, the SAFT Group .
4.2 In addition to the under Article 4.1, the SAFT Group shall
further upon the the SAFT
Group of Hydride Batteries shall be after
Hydride Batteries has been attained.
4.3 In addition to the under Articles 4.1 and 4.2, the SAFT
Group commencing on the Effective Date of this
Agreement and until Hydride
Batteries made, used, sold or otherwise disposed of
or made, used, sold or otherwise disposed of
identifiable as being . The under
this Article 4.3 shall be Hydride Batteries
and Hydride Batteries and Hydride Batteries.
4.4 the SAFT
Group Hydride Batteries made, used, sold
or otherwise disposed of or made, used, sold
or otherwise disposed of for
incorporation in products readily and foreseeably identifiable as being
, but only to the extent that such Hydride Batteries are
or are manufactured by a process or are manufactured by a
process of ECD/OBC's . The
under this Article 4.4 shall be Hydride Batteries and
Hydride Batteries and Hydride Batteries. Any
disagreement between the parties as to Hydride Batteries are
under this Article 4.4 shall be submitted to binding
alternative dispute resolution as provided in Article 12.
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4.5 Hydride Battery, pursuant to this Agreement,
such constitutes a full release with respect to Hydride Battery
from claims for royalties under any Patent or
Patent worldwide. of any or under this
Agreement are not infringement of any Patents or
Patents.
4.6 No hereunder with respect to any Hydride Battery on which a
by ECD/OBC.
4.7 In the event that thereof assert against a
member of the SAFT Group a claim for alleged infringement of any
Patent, ECD/OBC will use its best efforts in resolving
the matter in favor of the member of the SAFT Group. The SAFT Group
shall have the full right to defend any claim brought by
thereof, including the right to assert any defenses. In the event
that, through award or through settlement of such claim, a member of
the SAFT Group becomes obligated to pay royalties, lump sum payments
or other compensation to such person or entity asserting the claim,
the amount of such royalties, lump sum payments or other compensation
shall be fully ECD/OBC under this Agreement.
4.8 With the sole exception of the under Articles 4.1
and 4.2, the members of the SAFT Group shall not be jointly and
severally liable to ECD/OBC for the fulfillment of the obligations of
the SAFT Group hereunder, but shall be individually liable for
fulfillment of their respective obligations.
Article 5.
5.1 Within , ending on the
30th of June and the 31st of December, respectively, during the term
hereof and specified in
Articles 4.3 and 4.4 hereof regardless of whether any
hereunder, the SAFT Group shall a written setting
forth which shall become hereunder
.
The SAFT Group shall also by the SAFT
Group of Hydride Batteries
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(including for incorporation in products
readily and foreseeably identifiable as being ) for
purposes of allowing determination of whether the .
5.2
Article 6. Term and Termination.
6.1 This Agreement shall take effect on the Effective Date and, unless
terminated sooner as provided herein, shall remain in effect until
and shall thereupon expire.
6.2 Upon expiration of this Agreement pursuant to Article 6.1, all ,
rights, duties and obligations set forth in
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this Agreement shall terminate forthwith except that the SAFT Group
shall
and
under Article 5 to with
respect to prior to such
termination.
6.3 If any party shall be in material default of this Agreement and such
material default is not cured within 90 days after written notice of
such material default from the other party, such other party shall have
the right to request termination of this Agreement with respect to the
party in material default, and/or other relief, in mediation pursuant to
Article 12. If successful in obtaining termination of this Agreement as
relief in mediation, such other party may then terminate this Agreement
forthwith with respect to the party in material default upon written
notice to that effect to the party in material default.
Article 7. Notices.
7.1 All notices required or permitted by this Agreement shall be in writing
and shall be given by first class, postage prepaid mail, or by facsimile
transmission, effective in each case upon the date of mailing or
facsimile transmission thereof to the parties addressed as follows:
If to ECD/OBC, at:
Ovonic Battery Company
0000 Xxxxxxxxx
Xxxx, Xxxxxxxx 00000
(Attention: President)
If to SAFT, S.A., at:
SAFT
000 xxxxxx xx Xxxx
00000 Xxxxxxxxxxx, Xxxxxx
Attention: Francois Putois
Executive Vice President
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If to SAFT AMERICA, at:
SAFT America, Inc.
000 Xxxxxxxxxx Xxxxxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxx
Attention: Xxxxx Xxxxxxxx, Xx.
President
If to JSB, at:
Japan Storage Battery Co., Ltd.
0 Xxxxxxxx-Xxx, Xxxxxxxx,
Xxxxxxxxxx, Xxxxxx-xx, Xxxxx, Xxxxx
(Attention: Xx. Xxxxxxxxx Xxxxxxx
Director, General Manager of
Small Battery Division)
If to GS-SAFT, at:
000-0, Xxxxxx
Xxxxxxxxxxxx, Xxxxxx
Xxxxx, Xxxxx
(Attention: Xx. Xxxxxxxxx Xxxxxx
President)
or to such other address as the party to receive such notice shall have
designated by written notice to the other party hereto.
Article 8. Applicable Law.
8.1 This Agreement shall be governed and construed and the relations
between the parties determined in all respects by the substantive
law of Delaware.
Article 9. Entire Agreement and Amendments.
9.1 This Agreement sets forth the entire understanding of the parties
relating to the subject matter hereof and cancels and supersedes all
other agreements or understandings relating to such subject matter. No
amendment or modification of this Agreement shall be valid or binding
upon the parties unless made in writing and signed on behalf of the
parties by their respective duly authorized representatives.
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Article 10. Assignment
10.1 Neither this Agreement nor any right granted hereunder may be assigned,
extended or otherwise transferred in whole or in part by either party
hereto, whether voluntarily, by operation of law or otherwise, nor shall
this Agreement or any right granted hereunder inure to the benefit of
any successor of either party hereto, whether by operation of law or
otherwise, and notwithstanding any bankruptcy, insolvency or other
proceeding, without the prior written consent of the other party hereto,
which consent shall not be unreasonably withheld, and any assignment,
extension or transfer without such consent shall be null and void. The
parties acknowledge that the benefits accorded to each party under this
Agreement, including, without limitation, the license and releases, are
personal to such party and shall, in no event extend to any other
person.
10.2 This Agreement shall inure to the benefit of and be binding upon each of
the parties hereto and their respective Affiliates and permitted
successors and assigns.
Article 11. General Terms and Conditions.
11.1 Should any provision of this Agreement be declared unenforceable for any
reason, said provision will automatically cease to be a part of this
Agreement without affecting any other provision or obligation thereof.
11.2 The waiver of any breach or non-enforcement of any provision of this
Agreement shall not be construed to constitute a waiver of any other
breach or provision hereof.
11.3 Nothing contained herein shall constitute a license for either party to
utilize in the marketing of its products, the trademarks, tradenames, or
identifying code numbers of the other party.
11.4 Except as provided in Article 11.5, the parties hereto shall keep this
Agreement confidential and shall not now or hereafter divulge the terms
of this Agreement or any part thereof to any third party except:
(a) with the prior written consent of the other party; or
(b) to any governmental body having jurisdiction to call therefor; or
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(c) as otherwise may be required by law or contract; or
(d) to legal counsel representing either party; or
(e) the auditors appointed pursuant to Articles 5.2 and 13.1.
11.5 The parties agree to a mutually acceptable press release appended as
Exhibit B to announce the settlement of the litigation between them and
this Agreement.
11.6 Within fifteen (15) calendar days of final termination of the Civil
Action, all persons having discovery material designated "Confidential"
or "Confidential Attorneys' Eyes Only" shall, at the option of the
producing party, either (1) destroy such discovery materials and all
copies thereof (including notes, summaries and excerpts) or (2) return
to counsel for the producing party such discovery materials and all
copies thereof (including notes, summaries and excerpts).
Article 12. Dispute Resolution.
12.1 As to Patents, ECD/OBC and the SAFT Group agree that the
parties in dispute will engage in good faith negotiation to resolve all
disputes and legal proceedings between them
as well as any such dispute which may arise in the future. The parties
agree not to institute any foreign legal or administrative proceedings,
including proceedings to enforce any patents or
challenge any Patents (including any further nullity or
opposition proceedings), without first seeking to resolve their
differences by good faith negotiation within a reasonable period of
time, given the circumstances.
12.2 As to the Patents, the parties shall seek to
resolve amicably all disputes, controversies or differences which may
arise between them. If, despite the good faith effort of the parties, an
amicable resolution cannot be reached, any controversy or claim between
or among the parties arising out of the Patents, or this
Agreement, including but not limited to any controversy relating to the
of the Patents, shall be resolved by binding
mediation pursuant to this Article.
12.3 The mediation shall be held in Wilmington, Delaware, or any other city
selected by mutual agreement of the parties. The mediator shall be the
Honorable Xxxxxxxxxx
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Judge Xxxxxxx, if she is willing to serve in that capacity (and without regard
to whether she is then serving in a judicial capacity). The parties in dispute
shall each bear 50% of the reasonable compensation to be paid to the mediator
for his or her services. In the event that Judge Xxxxxxx is not able to serve
as the mediator, each of the parties in dispute shall submit a list of proposed
mediators. Judge Xxxxxxx shall select any name jointly proposed by the parties
in dispute, or may select a name appearing on only one party's list with the
approval of the other party or parties in dispute. If no name is selected from
the first lists submitted by each of the parties in dispute, each shall submit
a further list. If no name is selected from the second lists pursuant to the
above process, the parties in dispute shall agree on a mediator. If the parties
cannot agree, Judge Xxxxxxx shall appoint a mediator who shall not be selected
from the lists submitted by either party. Once appointed, the mediator shall
serve as the mediator in all disputes between the parties, unless all parties
to the dispute otherwise agree. If the appointed mediator is unable to continue
to serve as mediator, he or she shall appoint a successor mediator, after
consultation with the parties. If Judge Xxxxxxx is not available to appoint a
mediator and a mediator has not been appointed pursuant to these provisions and
the parties cannot agree on an alternative method for selecting a mediator,
then the parties shall request the American Arbitration Association to appoint
a mediator.
12.4 The mediation process shall be commenced by any party, following good
faith efforts to resolve the dispute, providing written notice to all other
parties to the dispute of its intent to seek mediation. Each party in dispute
shall provide all other parties to this Agreement with a copy of their
communication to the mediator.
12.5 The mediator is empowered to promptly resolve all disputes within the
scope of his or her authority under this Agreement, including the process for
resolving the dispute, and shall use his or her best efforts to do so within 60
days after submission of the dispute for resolution. The mediator may, without
limitation, facilitate an agreed resolution of the dispute or may resolve the
dispute by making a binding decision pursuant to any dispute resolution process
which the mediator, after consultation with the parties, determines to be
appropriate for the resolution of the dispute.
12.6 The mediator is empowered to award damages and any other relief which
would be available in a judicial proceeding. The mediator shall have the
discretion to conduct
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hearings, to hear witnesses, and if he or she deems it appropriate, to
order an exchange of information by the parties. In resolving disputes
and making decisions, the mediator shall give effect to the applicable
law.
12.7 All decisions of the mediator within the scope of his or her authority
shall be final and binding on the parties and may be executed and
enforced in any court having competent jurisdiction. The parties
stipulate that the United States District Court for Delaware shall have
jurisdiction over the parties and subject matter for purposes of
enforcing this provision.
Article 13.
13.1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
SAFT, X.X. XXXX AMERICA, INC.
By: Francois Putois By: Xxxxx Xxxxxxxx, Xx.
------------------------ -------------------------
Francois Putois Xxxxx Xxxxxxxx, Xx.
Title: Executive Vice President Title: President
Date: 21 June 1996 Date: 27 June 1996
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GS-SAFT LTD.
By: Takatsugu Kohama
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Takatsugu Kohama
Title: President
Date: 21 June 1996
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JAPAN STORAGE BATTERY, LTD.
By: Xxxxxxxxx Xxxxxxx
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Xxxxxxxxx Xxxxxxx
Title: Director, General
Manager of Small
Battery Division
Date: 21 June 1996
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OVONIC BATTERY COMPANY, INC.
By: Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Title: Chairman of the Board
Date: 13 June 1996
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ENERGY CONVERSION DEVICES, INC.
By: Xxxxxxxx X. Xxxxxxxxx
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Xxxxxxxx X. Xxxxxxxxx
Title: President and
Chief Executive Officer
Date: 13 June 1996
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