1
EXHIBIT 10.24
PATENT LICENSE AGREEMENT
THIS AGREEMENT, made and entered into as of the 4th day of October, 1995 (the
"Effective Date") between SQUARE D COMPANY, a Delaware corporation (hereinafter
"SQUARE D"), and MEDAR, INC., a Michigan corporation (hereinafter "MEDAR");
WITNESSETH:
WHEREAS SQUARE D is the present owner of patents and patent
application(s) directed to single phase resistance weld controller TECHNOLOGY
(hereinafter called "TECHNOLOGY"), each of which is listed in Group I of
Appendix A hereof and MEDAR is the present owner of the patents and patent
application(s) directed to the TECHNOLOGY, each of which is listed in Group II
of Appendix A; and
WHEREAS SQUARE D has filed two lawsuits (hereinafter called "the
litigation") against MEDAR alleging patent infringement of certain patents
listed in Group I of Appendix A hereof as the result of MEDAR's manufacture and
sale of certain weld control units ("WCU") and MEDAR filed a counterclaim in
one lawsuit for patent infringement of a patent in Group II of Appendix A; and
WHEREAS SQUARE D AND MEDAR desire and wish to receive a non-exclusive,
paid up license under all the patents listed in Groups I and II, respectively,
in Appendix A hereof to manufacture, have made, use and sell, WCUs as well as
provide services and replacements parts therefore worldwide; and
WHEREAS SQUARE D AND MEDAR further desire and wish to receive a
non-exclusive paid up license to enhance its commercial opportunities by being
able to utilize TECHNOLOGY covered by the patents and patent applications
listed in Groups I and II of Appendix A hereof to manufacture, have made, use
and sell, complete or partial WCUs and replacement parts therefore worldwide;
and
WHEREAS SQUARE D AND MEDAR are desirous of granting the paid up
license under each others patents which both parties acknowledge are valid by
neither party acquiesces on the issue of infringement; and
WHEREAS SQUARE D AND MEDAR are not desirous of granting each other a
paid up license which would allow the other to sublicense that TECHNOLOGY or to
in any other way grant the TECHNOLOGY to a third party which allows that third
party to manufacture or have made WCUs that involves the licensed TECHNOLOGY.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. Definitions: As utilized herein, the term "Licensed Patents"
is defined as all patents listed in Appendix A hereof and all patents issuing
from patent applications listed in Appendix A hereof, including all
continuations, continuation-in-part, reissues or extensions
2
thereof, together with all counterpart patent rights thereof throughout the
world.
2. Subject only to the provisions of paragraph 6, each party
hereby grants and agrees to grant to the other party a worldwide non-exclusive,
fully paid-up, non-cancelable right and license under the Licensed Patents to
manufacture, have made, use and sell products covered by one or more claims of
the Licensed Patents. Neither party grants the other party a right to
sublicense or in any other way to grant to another party the right to
manufacture or have made WCUs containing the TECHNOLOGY under any of the
Licensed Patents. In order to fully and completely resolve the current dispute
between the parties and to attempt to avoid new disputes over the Licensed
Patents, it is agreed: a.)
3. The term of this AGREEMENT shall extend from the Effective
Date until the expiration of the last to expire of the Licensed Patents.
4. SQUARE D, upon receipt of the payment specified in paragraph
5 below, releases MEDAR, all purchasers and users of products acquired
previously from MEDAR, MEDAR's shareholders, directors, officers, employees,
agents, successors and assigns from all claims, demands, and rights of action
which SQUARE D may have on account of any alleged infringement of the Licensed
Patents and on account of the manufacture, use, sale or other disposition by
MEDAR of products allegedly covered by one or more claims thereof prior to the
Effective Date of this AGREEMENT. MEDAR as part of the Agreement to settle
this dispute with SQUARE D releases SQUARE D, all purchasers and users of
products acquired previously from SQUARE D, SQUARE D's stockholder, directors,
officers, employees, agents, successors and assigns from all claims, demands,
and rights of action which MEDAR may have on account of the manufacture, use,
sale or other disposition by SQUARE D of products allegedly covered by one or
more claims thereof prior to the Effective Date of this AGREEMENT.
5. As consideration for entry of SQUARE D into this AGREEMENT,
MEDAR irrevocably promises to pay Square D the nonrefundable, lump sum of
_________________________________ U.S. Dollars (US $_________) as follows:
(a) contemporaneously with the execution and delivery of this
AGREEMENT to SQUARE D, MEDAR shall pay to SQUARE D
___________________________ ($____________), representing the total
amount due for any alleged past infringement of the Licensed Patents;
and
(b) the remaining amount of _____________ U.S. dollars (US
$_________) which MEDAR has promised to pay SQUARE D shall be payable
and actually delivered to SQUARE D in installment payments of
______________________ U.S.
3
Dollars (US $_______) on or before each anniversary date of this
AGREEMENT for next ten (10) years, representing the consideration for
the paid up license and other rights granted herein.
6. Notwithstanding the fact that any or all of the claims for the
patents listed in Group I are held invalid subsequent to this Agreement, in the
event that MEDAR fails to make an installment payment due under the provision
of the preceding paragraph of this AGREEMENT, which has not been cured within
ten (10) days from the date of notice thereof given to MEDAR, the license
granted by SQUARE D to MEDAR may be terminated by SQUARE D in its sole
discretion. In the event that MEDAR's failure to make an installment payment
is not cured within ten (10) day notice period, all payments due and to become
due in the future under the provisions of the preceding paragraph if this
AGREEMENT shall become immediately due and payable to SQUARE D including
reasonable attorney fees associated therewith.
7. Overdue payments to SQUARE D payable pursuant to this
AGREEMENT shall bear interest at an annual rate of five percent (5%) above the
average prime lending rate in effect for corporations of comparable size to
MEDAR offered by Citibank N.A. and Chemical Bank N.A. of New York, New York
during default.
8. Any delay, waiver or omission by SQUARE D in the exercise by
it of any right or power arising from any breach or default in payment by MEDAR
under the terms of this AGREEMENT shall not be construed to be a waiver by it
of any subsequent breach or default of payment by MEDAR.
9. The litigation shall be dismissed with prejudice, but without
costs. Within three business days after the date of execution of this
AGREEMENT and the payment by MEDAR to SQUARE D of the consideration call for in
Section 5a of this AGREEMENT, the parties shall cause their respective
attorneys to execute and present to the courts Stipulation of Dismissal with
Prejudice in the form attached hereto as Appendix B and C.
10. Both parties represents and warrant that the patents and
patent application(s) listed in Groups I and II, respectively, in Appendix A
hereof are each and every issued United States patent, foreign counterpart
thereof and pending United States patent application directed to the TECHNOLOGY
owned by each party.
11. Both parties represent and warrant that they have good title
to the Licensed Patents and the right to grant the rights, license and release
granted by them hereunder but DO NOT warrant in any way that the manufacture,
use and/or sale of products hereunder will not infringe the intellectual
property rights of any third party, nor do they make any warranty or
representation as to the validity, enforceability or scope of any of the
Licensed Patents. However, with regard to the foregoing, both parties have no
knowledge that any of their products covered by the claims of the Licensed
Patents infringe the intellectual property rights of any third party as of the
Effective Date of this AGREEMENT. Neither party warrants in any way that
apparatus covered by the claims of the Licensed Patents has commercial utility.
12. No rights are granted or implied by this AGREEMENT by either
party under any
4
patents other than the Licensed Patents.
13. This AGREEMENT shall be governed by and construed in
accordance with the laws of the State of Delaware.
14. This AGREEMENT shall inure to the benefit of and be binding
upon any successor in title of the Licensed Patents and may be assigned, only
in its entirety, to the successor of the entire business of either party to
which this AGREEMENT pertains providing such successor expressly agrees in
writing to be bound by the terms hereof. The grant that any such successor
receives under paragraph 2 hereof shall be limited to products of either party
in existence at the time of assignment to the first such successor of either
party or previously in existence. In the event this AGREEMENT is so assigned,
any successor's license is understood to apply only to the activity of those
portions of the successor's business originally acquired from either party and
not to any prior activity of such successor or activity engaged in by the
successor's other business. This AGREEMENT may not be otherwise assigned,
either in whole or in part, by either party without the written consent of the
other party which consent shall not be unreasonable withheld. Further, should
either party, its successors or assigns desire in the future to obtain rights
under any future patent issued by either party in addition to those granted by
this AGREEMENT, both parties will consider in good faith meeting with the
other, its successors or assigns to discuss the terms under which such rights
might be granted.
15. The parties agree that specific terms of this AGREEMENT will
not be disclosed to third parties. However, the specific terms of this
AGREEMENT may be disclosed to others for the purpose of informing stockholders
and the like or potential future licensees and both parties in so doing will
advise the others of the confidential nature of this AGREEMENT. The specific
terms of this AGREEMENT may also be disclosed pursuant to the order or
requirement of a Court, to the Exchange Commission with the specific proviso
that confidentiality will be requested or upon written consent of the other
party.
16. Both parties shall exercise their best efforts to notify the
other promptly of any actual or suspected infringement of Licensed Patents.
Both parties will consider the elimination of the infringement of the Licensed
Patents, taking into account such matters as the likelihood of success, the
expected costs, and the potential adverse effect of pursuing the matter. If
either party has failed to eliminate such infringement and is not diligently
taking steps to do so after one year has expired from the time either party has
notified the other party of the existence of an actual or suspected
infringement, and if either party notifies the other party again, in writing,
of a desire to pursue the actual or alleged infringers, then either party shall
in good faith consider granting the other party the right to pursue such
infringer in the other party's name, provided that pursuing party shall
indemnify the other party against the outside costs and expenses incurred by
other party in connection therewith. The other party shall cooperate with the
pursuing party in such matters and shall share with pursuing party any damages,
award or license fees in equal proportion after first subtracting therefrom and
reimbursing the pursuing party for its and other party's outside expenses in
connection with such action.
17. Each party agrees to defend, indemnify and hold the other
party, its officers, agents and employees, harmless from any injury, loss,
damage, claim or cause of action to the extent
5
caused by any act or omission on the part of the party granting the license in
connection with a third party claiming injury against the licensor with regard
to any licensed product made by licensee under this AGREEMENT.
18. SQUARE D and MEDAR shall destroy all documents and deposition
transcripts and other materials of the other party designated or marked by the
other as confidential in the litigation.
19. Payments and any notices to SQUARE D hereunder are to be sent
to:
SQUARE D COMPANY
Law Department, Intellectual Property Section
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Any notices to MEDAR hereunder are to be sent to:
MEDAR, INC.
00000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx, Xxxxx
Chairman of Board, CEO and President
20. Each party will notify the other of the granting of any type
of license to a third party on any of the Licensed Patents.
21. All taxes imposed as a result of the existence of this
AGREEMENT or the performance of the parties hereunder shall be borne and paid
by the party required to do so by applicable law.
22. Should any clause, sentence, or paragraph of this AGREEMENT
judicially be declared to be invalid, unenforceable, or void, such decision
shall not have the effect of invalidating or voiding the remainder of this
AGREEMENT, and the parties hereto hereby agree that the part or parts of this
AGREEMENT so held to be invalid, unenforceable, or void shall be deemed to have
been stricken, and the remainder shall have the same force and effect as if
such part or parts had never been included herein.
23. This AGREEMENT sets forth the entire AGREEMENT and
understanding between the parties as to the subject matter of this AGREEMENT
and merges all prior discussions between them, and neither of the parties shall
be bound by any modification of this AGREEMENT, other than as expressly
provided in this AGREEMENT or as duly set forth on or subsequent to the date
hereof in writing and signed by a duly authorized representative of the party
to be bound thereby.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
properly executed and effective as of the day and year first above indicated,
and the persons signing warrant that they are duly authorized to sign for and
on behalf of their respective parties.
6
SQUARE D COMPANY
By: /s/ Xxxxxx X. Kurczeaski
----------------------------------
Name: Xxxxxx X. Kurczeaski
Title: Corporate Vice President
General Counsel & Secretary
Date: October 4, 1995
WITNESS:
________________________
MEDAR, INC.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman of Board, Chief
Executive Officer & President
Date: October 12, 1995
WITNESS:
________________________
