EXHIBIT 10.34
CALCOMP/KODAK
PATENT LICENSE AND JOINT DEVELOPMENT AGREEMENT
PATENT LICENSE AND JOINT DEVELOPMENT AGREEMENT
THIS PATENT LICENSE AND JOINT DEVELOPMENT AGREEMENT ("Agreement") is made
and entered into as of this 29th day of March, 1998 (the "Effective Date"), by
and between Calcomp Technology, Inc. ("CALCOMP"), a Delaware corporation having
a principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and ▇▇▇▇▇▇▇ Kodak Company ("KODAK"), a New Jersey corporation having a
principal place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
R E C I T A L S :
---------------
A. CALCOMP has developed new technology related to drop-on-demand piezo
inkjet printheads and associated drop-on-demand piezo inkjet print engines
(herein referred to as "Printheads" and "Print Engines", respectively, as
defined below).
B. KODAK has developed new technology related to certain inks, paper and
other media (herein referred to as "Inks", and "Media", respectively, as defined
below) for use in inkjet printing systems, and which, therefore, is believed
should also be useful in the new CALCOMP technology.
C. KODAK desires a license to make, use and sell Printheads and associated
Print Engines and inkjet printers (herein referred to as "Printers" as defined
below) which use the new CALCOMP technology and the new KODAK technology.
D. CALCOMP and KODAK desire to jointly develop additional Printheads and
associated Print Engines for various applications and certain related Inks, and
to cross-license one another to the foregoing technology developed in such joint
development effort.
E. CALCOMP and KODAK desire to purchase for resale and to distribute
certain of each other's Inks for use in certain applications, and CALCOMP also
desires to purchase for resale certain of KODAK's Media for use in certain
applications.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, CALCOMP and KODAK hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms, whether used
-----------
in the singular or the plural shall have the following meaning:
1.1 Affiliate shall mean any company, partnership, joint venture, or
---------
other entity which directly or indirectly controls, is controlled by or is
under common control with a party. Control shall mean the possession of
fifty percent (50%) or more of the voting stock or the power to direct or
cause the direction of the management and policies
2
of the controlled entity, whether through the ownership of voting
securities, by contract or otherwise, but only for so long as such control
exists. Provided, however, that any such Affiliate of KODAK shall agree in
writing with KODAK, and any such Affiliate of CALCOMP shall agree in
writing with CALCOMP, to abide by the terms of this Agreement.
1.2 Inks means solvent-based pigmented inks, water-based pigmented
----
inks, or dye-based inks for use in Printers.
1.3 Print Engine means a system comprising one or more Printheads, a
------------
Printhead and carriage support system, an Ink reservoir and system for
supplying such Ink from the reservoir to the Printhead, a Printhead
maintenance and capping station, drive electronics for the Print Engine,
and which also may or may not include as mutually agreed in writing by the
Project General Managers of the parties identified in Article X ("Joint
Development Direction") with respect to a specific Print Engine, a Media
drive system and a mechanical horizontal beam structure.
1.4 Printhead means a drop-on-demand piezo inkjet printhead in which
---------
individual ink drops are selectively expelled by activating corresponding
individually associated ink channels, each channel having two or more walls
formed from piezo materials, through corresponding individually associated
nozzles, and assemblies thereof.
1.5 CALCOMP Background Technology means technical information,
-----------------------------
inventions, concepts, product designs, component designs, trade secrets,
know-how, techniques, designs, processes, communications protocols,
software algorithms (whether patentable or not), patents, patent
applications, including any patents issuing thereon and any and all
divisions, continuations and continuations-in-part thereof, and any and all
reissues and reexaminations of any such patents, copyrights, copyright
registrations and applications, and all other intellectual property rights
(excluding, however, trade names or trademarks) conceived, originated,
discovered, developed or otherwise made by CALCOMP, solely or jointly with
others, or by others under CALCOMP's direction, and which are related to
Printheads, Print Engines or Printers, or to dye-based or solvent-based
pigmented Inks, and which were so made (i) prior to March 29, 1998, or (ii)
independently of and during the term of the Joint Development Project.
1.6 Exclusive Field: See Exhibit J(1) for this Section 1.6.
---------------
1.7 Improvement means inventions, concepts, products, components,
-----------
trade secrets, know-how techniques, designs, processes communications
protocols, software, whether patentable or not, patents, patent
applications, including any patents issuing thereon and any and all
divisions, continuations and continuations-in-part thereof, and any and all
reissues and reexaminations of any such patents, copyrights, copyright
registrations and applications, and all other intellectual property rights
(excluding, however, trade names or trademarks) which (i) are conceived,
discovered, developed or
3
otherwise made by or on behalf of either CALCOMP or KODAK or jointly by the
parties, (ii) are so made in the conduct of the Joint Development Project,
and (iii) are related to Printheads, Print Engines, Printers, or Ink or
Media.
1.8 Joint Development Project means the development project between
-------------------------
KODAK and CALCOMP for the development of certain Printheads and associated
Print Engines, if required, and which may also include mutually agreed upon
Printers, Inks or Media as further described in the Operating Work Plan to
be prepared for the Joint Development Project as described in Section
X.3(d) of this Agreement.
1.9 Media means paper and other media on which the Ink used in a
-----
Printer is printed.
1.10 KODAK Background Technology means technical information,
---------------------------
inventions, concepts, product designs, component designs, trade secrets,
know-how, techniques, designs, processes, communications protocols,
software algorithms (whether patentable or not), patents, patent
applications, including any patents issuing thereon and any and all
divisions, continuations and continuations-in-part thereof, and any and all
reissues and reexaminations of any such patents, copyrights, copyright
registrations and applications, and all other intellectual property rights
(excluding, however, trade names and trademarks) conceived, originated,
discovered or developed by KODAK, solely or jointly with others, or by
others under KODAK's direction, and which are related to water-based
pigmented Inks or Media, and were so made (i) prior to March 29, 1998 or
(ii) independently of and during the term of the Joint Development Project.
1.11 Nonexclusive Field is as defined in Section 3.2 of this
------------------
Agreement.
1.12 Master OEM Agreement No. 1 means that certain OEM Agreement
--------------------------
between KODAK and CALCOMP, dated March 29, 1998, covering OEM sales of
Printheads, Print Engines, Printers, Inks, and Media, if any, by CALCOMP to
KODAK.
1.13 Master OEM/Supply Agreement No. 2 means that certain Agreement
---------------------------------
between KODAK and CALCOMP, dated March 29, 1998, covering CALCOMP-branded
sales of Inks and Media by KODAK to CALCOMP and supply of KODAK-branded
Inks and KODAK-branded Media by KODAK to CALCOMP.
1.14 Printer means a system with printing capability that
-------
incorporates a Printhead and/or a Print Engine.
1.15 Net Sales means the amount of monies received by a party or its
---------
Affiliates in the sale or any other transfer of the product in question to
independent unrelated third parties in bona fide arm's length commercial
transactions, excluding commission payments to third parties, discounts,
freight allowances, returns, refunds, bad debts, installation costs,
training costs, technical assistance costs and taxes applicable thereto;
4
provided, however, that if a party transfers the product in question to (i)
an Affiliate for its own internal commercial use in the Exclusive Field or
Nonexclusive Field, or (ii) to any unrelated third party (other than an
Affiliate) for non-monetary consideration for purposes other than trade or
beta testing, the amount of money to be used in determining the applicable
Net Sales on such product shall be equal to the amount that such party
would have received in a sale of the same volume of such product to an
unrelated third party in a bona fide arm's length commercial transaction.
1.16 ULC Printhead: See Exhibit J(2) for this Section 1.16.
-------------------------------------------------------
1.17 Topaz Assets means those assets acquired by CALCOMP through its
------------
acquisition of Topaz Technologies, Inc., and any substitution, additions,
replacements, improvements, betterments and developments thereto, as more
fully described on Exhibit G attached hereto.
--------------------------
2. JOINT DEVELOPMENT
-----------------
2.1 Scope of Joint Development. CALCOMP agrees to use its best
--------------------------
efforts to achieve the goals and complete the Joint Development Project.
KODAK agrees to work jointly with CALCOMP as set forth in this Agreement to
support it in achieving the goals and completing the Joint Development
Project. The parties acknowledge and agree that CALCOMP has the primary
responsibility for achieving the goals and completing the Joint Development
Project and in particular Milestones #1 and #2 as described on Exhibit B to
this Agreement.
2.2 Term. The Joint Development Project will begin March 29, 1998
----
and shall continue until completion of development of the ULC Printhead,
unless earlier terminated or extended by written agreement of the parties
or as otherwise provided under Article 14 of this Agreement ("Term and
Termination").
2.3 Costs of Joint Development Project: See Exhibit J(3) for this
----------------------------------
Section 2.3.
X. JOINT DEVELOPMENT DIRECTION
---------------------------
X.1 Joint Development Managers. Upon signing of this Agreement, the following
--------------------------
two Project General Managers for each party shall be appointed to direct
the overall conduct of the Joint Development Project activities:
For KODAK: ▇. ▇▇▇▇▇
For CALCOMP: A. Bibl
5
Each party shall also appoint a Technical Director to manage day-to-day
technical activities of the Joint Development Project but such appointees
shall not have authority to decide on issues or proposals which reasonably
would be expected to have a material effect on the overall conduct of the
Joint Development Project in the absence of, or in lieu of, the written
approval of the Project General Managers. The Technical Director for KODAK
shall be ▇. ▇▇▇▇▇▇▇▇, and the Technical Director for CALCOMP shall be ▇.
▇▇▇▇▇▇▇. Any change in the designated Program General Managers or
Technical Directors shall require advance written notice to the other
party. The Project General Managers and Technical Directors shall have no
authority to modify or amend the terms of this Agreement.
X.2 Joint Development Decisions. All decisions with regard to any material
---------------------------
proposal, issue, or course of action under the Joint Development Project
shall be by mutual written agreement of the Project General Managers,
unless otherwise specified Agreement.
X.3 Joint Development Responsibilities. The Project General Managers shall be
----------------------------------
responsible for the following:
a) Overall direction of the Joint Development Project;
b) Staffing and facility requirements of the Joint Development Project;
c) Scheduling and conducting at least quarterly reviews of the Joint
Development Project, the Operating Work Plan for the Joint Development Project,
and preparation of suitable progress reports of the project results, including
an annual overall written review of the Joint Development Project for the
parties; and
d) Preparing, updating, modifying if necessary, and reviewing the
Operating Work Plan for the Joint Development Project in accordance with the
milestones and project work set forth in Exhibit A. The first such Operating
Work Plan shall be prepared by the parties within sixty (60) days from the
Effective Date of this Agreement.
X.4 Joint Development Personnel. Each party agrees to make its employees and
---------------------------
nonemployee consultants reasonably available at their respective places of
employment to consult with the other party on issues arising from work
performed on the Printheads and Print Engines of the Joint Development
Project, including without limitation technical performance, manufacturing
materials and manufacturing process, manufacturing costs, and related
issues.
X.5 Joint Development Facilities. During the Joint Development Project, a
----------------------------
small number of representatives of each party may, upon reasonable notice
and at times reasonably acceptable to the other party, (i) visit the
facilities where the Joint Development Project is being conducted, (ii)
consult informally, during such visits and by telephone, with personnel of
the other party performing work on the Joint Development Project, and (iii)
6
work in the facilities and with the representatives of the other party who
are performing work on the Joint Development Project. Each party at the
request of the other party shall cause appropriate individuals working on
the Joint Development Project to be reasonably available for meetings at
the location of the facilities where such individuals are employed at times
reasonably convenient to the party responding to such request.
X.6 Joint Development Records. Each party shall keep complete, accurate and
-------------------------
authentic notes, data and records of the work performed on the Printheads
and Print Engines under the Joint Development Project in accordance with
its established company practices and shall be obligated to provide all
such documentation to the other party upon written request at reasonable
intervals. Each party shall further have the right to inspect and make
copies of such notes, data and records so maintained by persons carrying
out the Joint Development Project at reasonable times; provided, however,
that such inspection and copying shall not confer upon the inspecting or
copying party any ownership rights with respect to such notes, data or
records except as expressly provided in this Agreement.
Y. Ownership of Improvements
-------------------------
Y.1 By CALCOMP. CALCOMP shall own all right, title and interest in and to any
----------
Improvements developed by CALCOMP or KODAK, solely or jointly, which relate
to Printheads, Print Engines, Printers, dye based Inks, and/or solvent-
based pigmented Inks, including all intellectual property rights (excluding
trade names and trademarks), and CALCOMP shall have the right to apply for
copyrights, patents (including utility and design patents), or other
protection for such intellectual property rights anywhere in the world
under its own name and at its own expense. If KODAK makes any Improvement
related to Printheads, Print Engines, Printers, dye-based Inks and/or
solvent-based pigmented Inks, KODAK shall, and hereby does, transfer to
CALCOMP all right, title and interest in and to such Improvement. KODAK
agrees that it shall promptly notify CALCOMP of any Improvement and shall
take all actions and execute all documents as CALCOMP may reasonably
request, to effectuate the acknowledgment of CALCOMP's ownership of the
Improvement and the vesting in CALCOMP of complete and exclusive ownership
of any such Improvement. KODAK shall secure, maintain and defend for
CALCOMP's benefit, all rights in such Improvements, including the right to
submit any patent or copyright or application or registration.
Notwithstanding the foregoing, KODAK shall have the right to develop
independently from CALCOMP and without use of any of the CALCOMP Background
Technology, its own inkjet printheads and associated print engines and
printers as well as dye-based Inks, solvent-based pigmented Inks and other
Media or water-based pigmented Inks and will own all rights therein,
including all intellectual property rights. In connection with KODAK's
right to develop independently from CALCOMP its own dye-based Inks and
solvent-based pigmented Inks and maintain KODAK's ownership of all rights
therein, the parties acknowledge that KODAK may use CALCOMP Background
Technology with respect to Printheads, Print
7
Engines and Printers and prototypes thereof developed in the Joint
Development Project; provided, however, that such KODAK independent
development activity shall not use CALCOMP Background Technology directed
to dye-based Inks or solvent-based pigmented Inks.
Y.2 By KODAK. KODAK shall own all right, title and interest in and to any
--------
Improvements developed by KODAK or CALCOMP, solely or jointly, which relate
to water-based pigmented Inks or Media, including all intellectual property
rights (excluding trade names or trademarks), and KODAK shall have the
right to apply for copyrights, patents (including utility and design
patents), or other protection for such intellectual property rights
anywhere in the world under its own name and at its own expense. If
CALCOMP makes any Improvement related to water-based pigmented Inks or
Media, CALCOMP shall, and hereby does, transfer to KODAK all right, title
and interest in and to such Improvement. CALCOMP agrees that it shall
promptly notify KODAK of any Improvement and shall take all actions and
execute all documents as KODAK may reasonably request, to effectuate the
acknowledgment of KODAK's ownership of the Improvement and the vesting in
KODAK of complete and exclusive ownership of any such Improvement. CALCOMP
shall secure, maintain and defend for KODAK's benefit, all rights in such
Improvements, including the right to submit any patent or copyright or
trademark application or registration. Notwithstanding the foregoing,
CALCOMP shall have the right to develop independently from KODAK and
without use of any of the KODAK Background Technology, its own water-based
pigmented Inks and Media and will own all rights therein, including all
intellectual property rights. In connection with CALCOMP's right to
develop independently from KODAK its own dye-based, solvent-based pigmented
Inks, and water-based pigmented Inks and maintain CALCOMP's ownership of
all rights therein, the parties acknowledge that CALCOMP may conduct such
independent development with respect to dye-based, solvent-based pigmented
Inks, or water-based pigmented Inks using Printheads, Print Engines and
Printers and prototypes thereof developed in the Joint Development Project;
provided, however, that such CALCOMP independent development activity shall
not use KODAK Background Technology directed to dye-based, solvent-based
pigmented Inks, or water-based pigmented Inks.
3. LICENSES
--------
3.1 Exclusive License to KODAK. CALCOMP hereby grants to KODAK and its
--------------------------
Affiliates, subject to KODAK's and its Affiliates' compliance with its material
obligations under this Agreement, a perpetual, exclusive, worldwide license
under the CALCOMP Background Technology and under all Improvements owned by
CALCOMP, subject to the provisions of paragraph 3.7 below, to make and have made
the Printheads, Print Engines, and Printers and to use and sell the Printheads
and Print Engines, and Printers within the Exclusive Field. Such license shall
be fully paid-up with respect to Improvements owned by CALCOMP and shall be
royalty-bearing as set forth in Section 4.2 with respect to CALCOMP Background
Technology.
8
3.2 Nonexclusive License to KODAK. CALCOMP hereby further grants to KODAK
-----------------------------
and its Affiliates, subject to KODAK's and its Affiliates' compliance with its
material obligations under this Agreement, a perpetual, non-exclusive, worldwide
license under the CALCOMP Technology and under all Improvements owned by
CALCOMP, subject to the provisions of paragraph 3.7 below, to make and have made
the Printheads, Print Engines, and Printers and to use and sell the Printheads,
Print Engines, and Printers within the Nonexclusive Field. Such license shall
be fully paid-up with respect to Improvements owned by CALCOMP and shall be
royalty-bearing as set forth in Section 4.2 with respect to CALCOMP Background
Technology. The Nonexclusive Field includes the worldwide markets for products
and services outside of the Exclusive Field and the ULC Printhead with the
exception of the following applications:
3.2.1 Industrial Packaging Printing Applications which mean specially
configured monochrome or color piezo inkjet printing systems using a flat-
bed printer having a print area of at least 3 feet by 3 feet for printing
onto corrugated paper packaging, paper board packaging and other similar
packaging substrates;
3.2.2 Label/Ticket Printing Applications which mean specially
configured monochrome or color piezo inkjet printing systems for printing
labels or tickets onto substrates having a print width of less than 6
inches;
3.2.3 Postal Printing Applications which mean specially configured
monochrome or color piezo inkjet printing systems primarily intended for
printing on postal envelopes or franking printing for postage stamp
applications;
3.2.4 Design and Pattern Printing Applications which mean monochrome
or color, high volume, production piezo inkjet printing systems which print
recurring designs and patterns directly on textile fabrics, fabric-like
substrates and similar home furnishing materials such as wall and floor
coverings. Design and Pattern Printing Applications shall not include
short-run piezo inkjet printing systems for proofing designs or patterns or
piezo inkjet printing systems for signage or displays or piezo inkjet
printing systems which print via sublimation onto cloth or other
substrates; and
3.2.5 CAD/CAM Applications which mean monochrome and/or color piezo
ink jet printing devices, primarily for engineering, architectural,
manufacturing, design and construction markets, which create two
dimensional line drawings and three dimensional color renderings to provide
hard copy working documents.
The applications specifically excluded from the Nonexclusive Field in the
foregoing Sections 3.2.1 through 3.2.5 shall not be construed to limit or
in any way restrict the rights granted to KODAK under this Agreement with
respect to the Exclusive Field or the ULC Printhead.
9
3.3 Certain Third Party Rights. KODAK acknowledges that CALCOMP has
--------------------------
granted certain exclusive rights, for a period of up to six (6) months to a
third party solely with respect to 25 picoliter contone Printheads.
------
Accordingly, KODAK agrees that until the foregoing exclusive rights granted to
the third party terminate, its non-exclusive license rights under this Agreement
solely with respect to such 25 picoliter contone Printheads shall be expressly
subject to the third party's exclusive rights.
3.4 Exclusive License For ULC Printhead: See Exhibit J(4) for this
---------------------------------------------------------------
Section 3.4.
------------
3.5 Nonexclusive License for Inks to KODAK. CALCOMP hereby further grants
--------------------------------------
to KODAK and its Affiliates, subject to KODAK's and its Affiliates' compliance
with its material obligations under this Agreement, a non-exclusive, worldwide
license under the CALCOMP Background Technology and under all Improvements owned
by CALCOMP, to make, have made, use and sell dye-based Inks and solvent-based
pigmented Inks. Such license shall be fully paid-up with respect to
Improvements owned by CALCOMP and shall be royalty-bearing as set forth in
Section 4.2 with respect to CALCOMP Background Technology.
3.6 Nonexclusive License For Inks to CALCOMP. KODAK hereby grants to
----------------------------------------
CALCOMP and its Affiliates, subject to CALCOMP's and CALCOMP'S Affiliates'
compliance with its material obligations under this Agreement, a perpetual, non-
exclusive, worldwide license under the KODAK Background Technology and under all
Improvements owned by KODAK, to make, have made, use and sell water-based
pigmented Inks. Such license shall be fully paid-up with respect to
Improvements owned by KODAK and shall be royalty-bearing as set forth in Section
4.3 with respect to KODAK Background Technology. Notwithstanding the foregoing
license grant, CALCOMP and its Affiliates shall not have the right to make or
have made (other than by KODAK or its Affiliates) water-based pigmented Inks
covered by KODAK Background Technology which are the subject of the Joint
Development Project and are successfully completed prior to the termination of
the Joint Development Project, meaning that a jointly developed water-based
pigmented Ink is available for sale in commercial volumes, until five (5) years
after such water-based pigmented Ink is first made available for sale in
commercial volumes; provided that CALCOMP and its Affiliates shall have the
right to make any other water-based pigmented Ink covered by KODAK Background
Technology in the Nonexclusive Field five (5) years after the effective date of
this Agreement. Notwithstanding the foregoing, in the event that KODAK fails to
meet its performance, minimum volume and/or pricing obligations relating to the
supply of water-based pigmented Inks (which were the subject of the Joint
Development Project and were successfully completed prior to the termination of
the Joint Development Project), to CALCOMP or its Affiliates for a continuous
period of more than ninety (90) days, and following receipt of notice from
CALCOMP or its Affiliates of the ninety (90) day default, fails to cure such
default within ninety (90) additional days, CALCOMP and its Affiliates shall
thereafter have the right to make or have made such water-based pigmented Inks.
3.7 KODAK's Right to Make and Have Made. KODAK and its Affiliates shall
-----------------------------------
not have the right to make or have made (other than by CALCOMP), Printheads or
Print Engines covered by CALCOMP Background Technology which are the subject of
the Joint Development
10
Project and are successfully completed prior to termination of the Joint
Development Project, meaning that each of a jointly-developed Printhead and its
associated Print Engine, if any is required, is available for sale in commercial
volumes, until five (5) years after such Printhead and associated Print Engine
are first made available for sale in commercial volumes; provided that KODAK and
its Affiliates shall have the right to make any other Printhead or Print Engine
not part of the Joint Development Project (including other piezo and non-piezo
printheads and print engines) in the Exclusive Field or Nonexclusive Field five
(5) years after the effective date of this Agreement. Notwithstanding the
foregoing, in the event that CALCOMP fails to meet its performance, minimum
volume and/or pricing obligations relating to the supply of Printheads, or Print
Engines (which were the subject of the Joint Development Project and were
successfully completed prior to the termination of the Joint Development
Project), to KODAK or its Affiliates for a continuous period of more than ninety
(90) days, and following receipt of notice from KODAK or its Affiliates of the
ninety (90) day default, fails to cure such default within ninety (90)
additional days, KODAK and its Affiliates shall thereafter have the right to
make or have made such Printheads or Print Engines.
4. LICENSE FEES AND ROYALTIES
--------------------------
4.1 License Fees and Milestone Payments to CALCOMP. In partial
----------------------------------------------
consideration for the licenses and other rights granted to KODAK by this
Agreement and the Master OEM Agreement No. 1, and for CALCOMP's joint
development obligations set forth in this Agreement, KODAK shall pay to CALCOMP
the License Fee payments set forth on Exhibit B to this Agreement according to
the Schedule set forth in such Exhibit B.
4.1.1 Other Payments. KODAK shall also pay to CALCOMP the other
--------------
payments set forth on Exhibit B to this Agreement upon achievement and
completion of the associated Milestone events specified on Exhibit B.
4.1.2 Partial Performance. Partial performance of a Milestone does
-------------------
not obligate KODAK for partial payment of the payment for such Milestone.
Otherwise, failure to perform a Milestone shall be handled as set forth in
Section 14.3 of this Agreement.
4.1.3 Independent Events. Each of the payments set forth in Exhibit
------------------
B is independent of the other payments such that CALCOMP's failure to meet
one Milestone does not excuse KODAK's obligation to make future milestone
payments, unless the Agreement is terminated by KODAK pursuant to Article
14 of this Agreement ("Term and Termination").
4.2 Royalties to CALCOMP: See Exhibit J(5) for this Section 4.2.
-------------------------------------------------------------
4.3 Royalties to KODAK: See Exhibit J(6) for this Section 4.3.
-----------------------------------------------------------
11
4.4 Termination of all Royalties. Notwithstanding the foregoing Sections
----------------------------
4.1 through 4.3, neither party shall owe any royalties under this Agreement to
the other seven (7) years after the termination of the Joint Development
Project, which may be extended pursuant to Section 2.2 of this Agreement.
4.5 Royalty-Bearing Products. Except as set forth in Sections 4.2 and
------------------------
4.3, neither party shall pay royalties to the other party on any other products
made under the licenses granted under this Agreement.
5. AGREEMENT TO PURCHASE CALCOMP WARRANTS
--------------------------------------
Simultaneously with the execution of this Agreement, CALCOMP will grant
warrants to KODAK in the form of the Common Stock Purchase Warrant attached
hereto as Exhibit C.
6. CALCOMP'S AND KODAK'S COMMITMENTS
---------------------------------
6.1 Supply of Printheads and Print Engines. Until KODAK has the right to
--------------------------------------
make and have made Printheads, and Print Engines, which are the subject of the
Joint Development Project, CALCOMP will supply to KODAK and KODAK will purchase
from CALCOMP, KODAK's reasonable requirements of such Printheads, and Print
Engines under Master OEM Agreement No. 1, at preferred OEM pricing subject to
the terms and conditions set forth in such Master OEM Agreement No. 1.
6.2 Minimum Purchase Volumes for Print Engines. If in any year KODAK
------------------------------------------
fails to purchase the minimum purchase volumes as mutually agreed upon under
Master OEM Agreement No. 1 of a specific Printhead and associated Print Engine
which has been designated in writing by the Project General Managers for use in
the Exclusive Field, the exclusive license set forth in Section 2.1 of this
Joint Development Agreement will automatically become a non-exclusive license
solely with respect to that specific Printhead.
6.3 Supply of Inks. Until CALCOMP has the right to make and have made
--------------
water-based pigmented Inks which are developed as a part of the Joint
Development Project, KODAK will supply to CALCOMP and CALCOMP will purchase from
KODAK, CALCOMP's reasonable requirements of such water-based pigmented Inks
under Master OEM/Supply Agreement No. 2 at preferred OEM pricing subject to the
terms and conditions, including mutually agreed upon pricing and specifications,
set forth in such Master OEM/Supply Agreement No. 2.
6.4 Supply of Printers. CALCOMP agrees to supply KODAK upon request with
------------------
its reasonable requirements of Printers which are used or developed in the Joint
Development Project in connection with the Printheads and Print Engines which
are the subject of the Joint
12
Development Project at preferred OEM pricing, subject to the terms and
conditions, including mutually agreed upon pricing and specifications, set forth
in Master OEM Agreement No. 1.
6.5 Supply of Media. CALCOMP agrees to purchase from KODAK its reasonable
---------------
requirements of KODAK-branded Media or CALCOMP-branded Media which is used or
developed in the Joint Development Project in connection with the Printheads and
Print Engines which are the subject of the Joint Development Project at
preferred pricing, subject to the terms and conditions, including mutually
agreed upon pricing and specifications, set forth in Master OEM/Supply Agreement
No. 2.
6.6 Purchase of Inks from CALCOMP. CALCOMP agrees to sell KODAK upon
-----------------------------
request its reasonable requirements of dye-based Inks and solvent-based
pigmented Inks which are used or developed under the Agreement in connection
with the Printheads and Print Engines which are the subject of the Joint
Development Project at preferred OEM pricing, subject to the terms and
conditions, including mutually agreed upon pricing and specifications, set forth
in Master OEM Agreement No. 1.
6.7 Distribution of Inks. Each party (as herein designated in this
--------------------
Section 6.7 a "First Party") hereby appoints the other party (as herein
designated in this Section 6.7 a "Second Party") as a distributor of the Inks
which are jointly developed under the Joint Development Project and made or have
made by the First Party for distribution and resale of such Inks by the Second
Party or its Affiliates in the Nonexclusive Field; provided, however, that for
each such Ink sold under the Second Party's or its Affiliate's own brand or the
brand of a reseller, the Second Party will on the label and packaging of the Ink
and in the marketing and sales activities and promotional literature associated
with the Ink, designate the Ink for use only in Printheads, and associated Print
Engines and Printers, developed under the Joint Development Project and sold
under the Second Party's or its Affiliate's own brand or under the brand of a
third party reseller who is reselling Printheads, and associated Print Engines
and Printers, developed under the Joint Development Project which have been
purchased from the Second Party or its Affiliates.
6.8 CALCOMP Commitment of Funds. CALCOMP hereby commits that it will
---------------------------
devote all of the funds it has committed to use in the Joint Development Project
in calendar years 1998 and 1999 as specified in Section 2.3.2 of this Agreement
and all of the monies and all of the payments specified in Exhibit B (except the
payment(s) in item B thereof) to the conduct of the Joint Development Project in
accordance with the provisions in Section 2.3.2 of this Agreement, and that it
will provide KODAK in each of calendar years 1998 and 1999 within sixty (60)
days of the close of each calendar quarter an accounting and a written report
confirming the foregoing expenditures for the Joint Development Project. Such
accounting and written report shall be subject to audit by KODAK in accordance
with Section 8.1 of this Agreement.
6.9 KODAK Pigments. KODAK will consider, but makes no binding commitment,
--------------
to supply pigments for purchase by CALCOMP for use in the manufacture of Inks.
13
(Article 7 is not used.)
------------------------
8. REPORTS AND PAYMENT
-------------------
8.1 Records. Each of KODAK and CALCOMP will keep complete, true, and
-------
accurate books of account and records for the purpose of showing the derivation
of all amounts payable to the other party under this Agreement and the use of
funds provided by the other party for which a specific use is required by this
Agreement. Such books and records will be kept at such party's principal place
of business for at least two (2) years following the end of the calendar quarter
to which they pertain. Upon reasonable advance notice by the other party and
not more than once per year, such books and records will be open during
reasonable business hours for audit for the sole purpose of verifying royalty
statements, or compliance with the permitted uses of funds specified in Section
2.3 and Exhibit B in this Agreement or required contributions of funds and other
resources specified in Section 2.3 by a certified public accounting firm who is
retained on other than a contingent fee basis, who has agreed to be bound by the
confidentiality provisions of Article 12 of this Agreement ("Confidentiality"),
and who is reasonably acceptable to the party being audited.
8.2 Written Reports. Each party agrees to make quarterly written reports
---------------
to the other party within sixty (60) days after the end of each calendar quarter
during the life of this Agreement for which the reporting party is required to
make such report, and as of such dates, stating in each such report the Net
Sales accruing during the preceding three (3) calendar months and upon which
royalty is payable as provided in Article 4 of this Agreement ("License Fee and
Royalties"). The first such report shall be due for a party in the calendar
quarter following the quarter in which such party makes available for sale
products on which royalty is payable under Article 4 and shall include the
entire Net Sales which accrued prior to the date of such report.
8.3 Payment Of Royalties. At the time each party provides a quarterly
--------------------
written report as set forth in Section 8.2 ("Written Reports"), the reporting
party shall pay to the other party royalties in United States dollars by wire
transfer.
8.4 Cost of Audits. Audits shall be at the expense of the auditing party
--------------
unless a variation or error exceeding U.S. $10,000, or the equivalent, is
discovered in the course of any such inspection, whereupon all costs relating
thereto shall be paid by the party being audited. Furthermore, the audited
party will promptly pay to the other party the full amount of any underpayment.
9. PROPRIETARY RIGHTS
------------------
9.1 CALCOMP Background Technology. Subject to the rights and licenses
-----------------------------
granted to KODAK and its Affiliates hereunder, CALCOMP retains all rights,
title, and interest in the
14
CALCOMP Background Technology, including, without limitation, all patents,
copyrights, trade secrets, and any other intellectual property and proprietary
rights.
9.2 KODAK Background Technology. Subject to the rights and licenses
---------------------------
granted to CALCOMP and its Affiliates hereunder, KODAK retains all rights,
title, and interest in the KODAK Background Technology, including, without
limitation, all patents, copyrights, trade secrets, and any other intellectual
property and proprietary rights.
10. TRADEMARKS AND LOGOS
--------------------
Except as provided in this Article 10 ("Trademarks and Logos"), nothing
contained in this Agreement shall be construed as granting any right or license
to either party to use the trade names or trademarks of the other.
10.1 Logo. Each Printer incorporating a Printhead, Print Engine, or ULC
----
Printhead, which is purchased by KODAK or its Affiliates from CALCOMP or
made by or for KODAK or its Affiliates under the licenses granted by
CALCOMP under Article 3 ("Licenses") of this Agreement, shall bear a logo
referencing the incorporation of CALCOMP's CRYSTALJET technology as
depicted on Exhibit E to this Agreement, as may be amended from time to
time by CALCOMP (the "Technology Logo"). The foregoing requirements with
respect to the use of the Technology Logo shall apply during the term of
this Agreement but only for so long as:
10.1.1 All Printers manufactured and sold by CALCOMP and its
Affiliates bear the Technology Logo;
10.1.2 CALCOMP requires that all printers manufactured for CALCOMP or
its Affiliates or by a third party under license of technology or patents
granted by CALCOMP or its Affiliates bear the Technology Logo, meet or
exceed the applicable Printer, Printhead or Print Engine quality standards
in the Nonexclusive Field by producing a print quality reasonably
comparable to or better than that produced by printers in the top 5
printing products which directly compete with Printers incorporating a
Printhead or Print Engine, and conform to the standards for use of the
Technology Logo set forth in Exhibit E; and
10.1.3 All of the Printers manufactured by CALCOMP or its Affiliates
for KODAK or its Affiliates, in the Nonexclusive Field meet the quality
standards in the Nonexclusive Field by producing a print quality reasonably
comparable to or better than that produced by printers in the top 5
printing products which directly compete with Printers incorporating a
Printhead or Print Engine, and conform to the standards for use of the
Technology Logo set forth in Exhibit E.
15
In the event that CALCOMP does not comply with the provisions of 10.1.1,
10.1.2 or 10.1.3 above, KODAK AND ITS Affiliates have the right to be released
from the foregoing requirements to use the Technology Logo without incurring any
financial liability or obligation under this Agreement relating to such release.
10.2 License of Technology Logo. CALCOMP hereby grants to KODAK and its
--------------------------
Affiliates a non-exclusive, non-transferable, worldwide, right and license to
use the Technology Logo solely on or in connection with the manufacture,
advertisement, promotion, distribution and sale of Printers incorporating
Printheads, Print Engines, or the ULC Printhead purchased by KODAK or by KODAK's
Affiliates from CALCOMP under Master OEM Agreement No. 1 or made under the
licenses granted by CALCOMP under Article 3 ("Licenses") of this Agreement,
respectively.
10.3 Quality Control for the Technology Logo for Purchased Printheads.
----------------------------------------------------------------
KODAK agrees that all Printers incorporating a Printhead, Print Engine, and/or
ULC Printhead purchased by KODAK or its Affiliates from CALCOMP under Master OEM
Agreement No. 1 and which Printers are manufactured by or for KODAK or its
Affiliates other than by CALCOMP and bear the Technology Logo shall produce a
print quality reasonably comparable to or better than that produced by printers
in the top 5 printing products which directly compete with such Printers and
comply with the standards for use of the Technology Logo set forth in Exhibit E.
KODAK agrees upon reasonable request by CALCOMP, to deliver free of charge to
CALCOMP, a sample of specified models of Printers manufactured by or for KODAK
or its Affiliates other than by CALCOMP and/or photographs clearly showing the
presentation of the Technology Logo on the Printer, provided however that for
each such specified model of Printer KODAK and its Affiliates shall be required
to furnish such samples no more than once in any consecutive six (6) month
period during the term of this Agreement. Should CALCOMP at any time determine
that the quality of any of the Printers bearing the Technology Logo manufactured
by or for KODAK or its Affiliates other than by CALCOMP does not reasonably
conform to the aforementioned print quality set forth in this Section 10.3 and
the standards for use of the Technology Logo set forth in Exhibit E, CALCOMP
will provide written notice to KODAK specifying the nature of the
nonconformance. Upon receipt of such notice, KODAK shall use commercially
reasonable efforts to correct the nonconformance. If KODAK does not reasonably
correct the nonconformance within ninety (90) days from receipt of written
notice from CALCOMP, KODAK shall stop shipping the aforesaid Printers.
10.4 Quality Control for Technology Logo for Licensed Printheads. KODAK
-----------------------------------------------------------
agrees that each Printer incorporating a Printhead, Print Engine, or ULC
Printhead manufactured by or for KODAK or its Affiliates under the licenses
granted by CALCOMP under Article 3 ("Licenses") of this Agreement and bearing
the Technology Logo shall produce a print quality reasonably comparable to or
better than that produced by the printheads in the top 5 printing products which
directly compete with such Printer and comply with the standards for use of the
Technology Logo set forth in Exhibit E. KODAK agrees upon reasonable request by
CALCOMP, to deliver free of charge to CALCOMP, a sample of specified models of
each
16
Printhead, Print Engine, and/or ULC Printhead manufactured by or for KODAK other
than by CALCOMP, samples of prints produced by such Printhead, and photographs
clearly showing the presentation of the Technology Logo on the Printer in which
such Printhead is used, provided however that for each such specified model of
Printhead KODAK and its Affiliates shall be required to furnish such samples no
more than once in any consecutive six (6) month period during the term of this
Agreement. Should CALCOMP at any time determine that the quality of any of the
aforesaid Printers bearing the Technology Logo manufactured by or for KODAK or
its Affiliates other than by CALCOMP does not reasonably conform to the
aforementioned print quality set forth in this Section 10.4 and the standards
for use of the Technology Logo set forth in Exhibit E, CALCOMP will provide
written notice to KODAK specifying the nature of the nonconformance. Upon
receipt of such notice, KODAK shall use commercially reasonable efforts to
correct the nonconformance. If KODAK does not reasonably correct the
nonconformance within ninety (90) days from receipt of written notice from
CALCOMP, KODAK shall stop shipping the aforesaid Printers.
10.5 Use of the Technology Logo. KODAK agrees that the presentation and
--------------------------
image of the Technology Logo shall be reasonably uniform, and consistent and
presented in a manner reasonably conforming to CALCOMP's standards (as set forth
in Exhibit E) for the use and display of the Technology Logo with respect to all
models of Printers (within a specified line of Printers) bearing the Technology
Logo. The Technology Logo will be readily visible to a user of the Printer and
may not be used on or in reference to any product other than Printers
incorporating a Printhead, Print Engine or a ULC Printhead purchased by KODAK or
by KODAK's Affiliates from CALCOMP under Master OEM Agreement No. 1 or
manufactured by or for KODAK or KODAK's Affiliates under the Licenses granted
under Article 3 ("Licenses") of this Agreement.
10.6 Advertising. During the period specified in Section 10.1 above,
-----------
KODAK agrees that it will include in substantially all KODAK advertisements for
the Printers the Technology Logo in clearly visible form and a statement that
the Printers incorporate CRYSTALJET technology under license from CALCOMP.
KODAK agrees to promptly review any and all advertisements which include the
Technology Logo to which CALCOMP has objected in writing with respect to KODAK's
use of the Technology Logo and will use commercially reasonable efforts to
correct that portion to which CALCOMP has reasonably objected.
10.6 Ownership. KODAK hereby agrees that it shall acquire no ownership
---------
interest in the Technology Logo by virtue of this Agreement.
10.7 Warranty and Indemnification. CALCOMP warrants to KODAK and its
----------------------------
Affiliates that the Technology Logo does not violate the rights of any third
party and that it has full power to make this Agreement and to grant the rights
as provided herein. CALCOMP agrees to defend and indemnify KODAK and its
Affiliates against any claims (and to pay any damages and attorneys' fees
awarded) based on allegations that use of the Technology Logo infringes the
trademark rights of any third party, which allegations, if true, would
constitute a breach of the foregoing express warranty, provided that CALCOMP is
--------
promptly notified of and tendered the
17
defense to such claims with counsel of its own choosing and no settlement is
made without CALCOMP's prior written consent.
11. PURCHASE AND SALE
-----------------
The terms and conditions relating to the purchase and sale of products
between the parties are to be governed by Master OEM Agreement No. 1 and Master
OEM/Supply Agreement No. 2 as appropriate, entered into between the parties
concurrently with this Agreement.
12. CONFIDENTIALITY
---------------
12.1 CALCOMP's Confidential Information. KODAK agrees to maintain the
----------------------------------
confidential nature of trade secrets and proprietary information relating to the
Joint Development Project belonging to CALCOMP (i) which is disclosed to KODAK
by CALCOMP in tangible form clearly labeled as confidential at the time of
disclosure, or (ii) which is disclosed to KODAK by CALCOMP initially in non-
tangible form and identified as confidential at the time of disclosure and,
within thirty (30) days following the initial disclosure, is summarized and
designated as confidential in a written memorandum delivered to KODAK
("CALCOMP's Confidential Information"). KODAK shall not use CALCOMP's
Confidential Information for any purpose other than exercising the rights
granted to KODAK under and in the performance of this Agreement. KODAK shall
not disclose CALCOMP's Confidential Information to any third party without the
prior written consent of CALCOMP.
12.2 KODAK's Confidential Information. CALCOMP agrees to maintain the
--------------------------------
confidential nature of trade secrets and proprietary information relating to the
Joint Development Project belonging to KODAK (i) which is disclosed to CALCOMP
by KODAK in tangible form clearly labeled as confidential at the time of
disclosure, or (ii) which is disclosed to CALCOMP by KODAK initially in non-
tangible form and identified as confidential at the time of disclosure and,
within thirty (30) days following the initial disclosure, is summarized and
designated as confidential in a written memorandum delivered to CALCOMP
("KODAK'S Confidential Information"). CALCOMP shall not use KODAK's
Confidential Information for any purpose other than exercising the rights
granted to CALCOMP under and in the performance of this Agreement. CALCOMP
shall not disclose KODAK's Confidential Information to any third party without
the prior written consent of KODAK.
12.3 Period of, and Exclusions from, Confidentiality Obligations. The
-----------------------------------------------------------
foregoing obligations of confidentiality on the parties under this Article 12
shall apply until seven (7) years after termination of the Joint Development
Project, but these obligations shall not apply to information that:
12.3.1 prior to the transmittal was of general public knowledge;
18
12.3.2 becomes a matter of general public knowledge otherwise than as
a consequence of a breach under this Agreement;
12.3.3 is made public by the party claiming confidentiality;
12.3.4 is required to be disclosed by applicable law or regulation;
provided however, that the party who may be required to disclose such
information shall notify the other party in sufficient time for the owner
of such Confidential Information to file the appropriate documents with the
court to obtain a protective order to enforce the confidentiality
requirements of this Agreement;
12.3.5 the receiving party can establish by competent proof was in
its possession at the time of disclosure by the disclosing party and was
not acquired, directly or indirectly, from the disclosing party;
12.3.6 is received from a third party; provided, however, that the
receiving party has no reason to know such information was obtained by said
third party, directly or indirectly, from the other party under a
nondisclosure agreement;
12.3.7 the receiving party can establish was independently developed
without recourse to the confidential information of the other party;
12.3.8 is submitted to governmental or non-governmental agencies to
obtain the issuance of marketing or safety approvals for products developed
under the terms of this Agreement;
12.3.9 is disclosed to agents and subcontractors of the parties in
the furtherance of the parties' permitted development, manufacturing or
marketing activities under the terms of this Agreement under
confidentiality provisions which are the same or similar to those set forth
in this Agreement;
12.3.10 is disclosed in patents filed in furtherance of the parties'
permitted development, manufacturing, and marketing activities under the
terms of this Agreement; or
12.3.11 is product-related information which (i) is reasonably
required to be disclosed in connection with the manufacture or marketing of
Printheads, Print Engines, Printers, Inks, or Media developed or
manufactured under the terms of this Agreement and (ii) is disclosed under
confidentiality provisions which are the same or similar to those set forth
in this Agreement where appropriate.
12.4 Injunctive Relief. The parties acknowledge that in certain
-----------------
cases it is possible that neither party may have an adequate remedy at law if
the other party violates the terms of this Article 12 ("Confidentiality") and
that in such cases each party, unless it is in breach of a
19
material obligation of this Agreement, may have the right to seek injunctive
relief or otherwise to specifically enforce any of the covenants in this Article
12 ("Confidentiality") if the other party fails to perform such covenants.
13. WARRANTIES AND REPRESENTATIONS; DISCLAIMER OF IMPLIED WARRANTIES
----------------------------------------------------------------
13.1 Each party to this Agreement represents and warrants that (i) it has
the full power, right, and authority to enter this Agreement and to grant the
rights and licenses granted hereunder to the other party, (ii) that it has
entered into no prior agreements or undertaken any prior obligations, nor shall
it enter into any such agreements or undertake any such obligations during the
term of this Agreement, which conflict with the performance of its duties and
licenses granted hereunder to the other party, (iii) it is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction in which it was incorporated, and (iv) that it shall guarantee the
performance of its Affiliates under this Agreement.
13.2 CALCOMP represents and warrants as of the Effective Date that there
are no outstanding liens, claims, or other encumbrances on the rights in CALCOMP
Background Technology which are designated for use in the Joint Development
Project to be conducted hereunder with KODAK. A complete list of the patents
and patent applications which are included in CALCOMP's Background Technology as
of the Effective Date of this Agreement is set forth in the attached Exhibit D.
Upon request no more than twice each year during the term of this Agreement,
CALCOMP will provide KODAK with an updated list of its patents and patent
applications included in CALCOMP Background Technology.
13.3 THE FOREGOING WARRANTIES ARE EXCLUSIVE, ARE THE ONLY WARRANTIES MADE
BY THE PARTIES IN CONNECTION WITH THIS AGREEMENT AND ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED OR STATUTORY, INCLUDING THE IMPLIED WARRANTIES OF
FITNESS FOR A PARTICULAR PURPOSE AND OF NON-INFRINGEMENT OF THE INTELLECTUAL
PROPERTY RIGHTS OF ANY THIRD PARTIES.
14. TERM AND TERMINATION
--------------------
14.1 Term. This Agreement and the Joint Development Project shall remain
----
in effect for a period of five (5) years from the Effective Date specified on
the first page hereof, unless earlier terminated or extended by written
agreement of the parties or earlier terminated under Section 2.2 or this Article
14.
14.2 Termination for Breach. Unless otherwise specified in this
----------------------
Agreement, the default by one party of a material obligation of such party under
this Agreement shall entitle the other party to give the party in default
written notice describing such default in detail (including
20
supporting documentation) and requiring it to remedy such default. If such
default is not fully remedied within ninety (90) days after the date of such
notice, the notifying party shall be entitled to, in addition to all other
remedies available to such party, terminate this Agreement by a written notice
to the defaulting party.
14.3 Failure to Meet Milestones and Termination. Notwithstanding Section
------------------------------------------
2.1 above, Exhibit B sets forth a completion date for each Milestone.
(a) CALCOMP acknowledges that it is the party primarily responsible
for completing Milestones #1 and #2 under this Agreement. In the event the
failure to complete Milestone #1 or #2 is caused by CALCOMP's failure to meet
its material obligations under this Agreement relating to completion of such
Milestone, KODAK shall notify CALCOMP in writing of the specific nature of the
failure and shall give CALCOMP a cure period of ninety (90) days to cure the
failure and to comply. The deadline for the completion of such Milestone will
be extended by the cure period. If CALCOMP does not cure such failure and
complete such Milestone within such cure period, (i) KODAK shall not make the
payment to CALCOMP for completion of the Milestone, and (ii) KODAK may terminate
this Agreement upon providing written notice to CALCOMP within (60) days of the
completion date for such Milestone, as extended.
(b) The parties acknowledge and agree that Milestone #3 is
substantially dependent upon the efforts of both parties as described in the
Operating Work Plan of the Joint Development Project in Exhibit A. In the event
that the parties are not able to complete Milestone #3 by the completion date
set forth in Exhibit B, and such failure is caused by one party's failure to
meet its material obligations under this Agreement relating to completion of
such Milestone, the other party shall notify the first party of the specific
nature of the failure and shall give the first party a cure period (at least 90
days) to permit the party to cure the failure and to comply. The deadline for
completion of Milestone #3 will be extended by the cure period. In the event,
the failure to complete Milestone #3 is caused by CALCOMP's failure to meet its
obligations under this Agreement relating to completion of such Milestone, then
(i) KODAK shall not make the payment to CALCOMP for completion of the Milestone,
and (ii) KODAK may terminate this Agreement upon providing written notice to
CALCOMP within sixty (60) days of the completion date for such Milestone, as
extended.
(c) In the event that neither party is in default with respect to its
material obligations under this Agreement relating to completion of a Milestone
and such Milestone is not completed by the completion deadline for such
Milestone in Exhibit B, there shall be a reasonable additional period of time at
least ninety (90) days following such date within which the parties will have to
complete the Milestone. If the Milestone is still not completed after
expiration of such additional period, and the parties do not mutually agree in
writing to extend the completion date for such Milestone, then (i) KODAK will
not make the payment to CALCOMP related to completion of such Milestone, and
(ii) KODAK may terminate this Agreement upon providing written notice to CALCOMP
within sixty (60) days of the final completion date for such Milestone, as
extended.
21
(d) In the event the failure to complete Milestone #1, Milestone #2
or Milestone #3 by the completion date set forth in Exhibit B is caused by
KODAK's failure to meet its material obligations under this Agreement relating
to completion of such Milestone and KODAK does not cure such failure with the
result that CALCOMP is unable to complete the Milestone, CALCOMP shall be
entitled to give KODAK written notice of the specific nature of the failure
(including supporting documentation) and requiring KODAK to remedy such failure.
If such failure is not fully remedied within ninety (90) days after the date of
such notice, KODAK shall promptly pay CALCOMP the full amount of the applicable
Milestone payment.
14.4 Termination on Insolvency. Either party may terminate this Agreement
-------------------------
at any time upon or after the filing against the other party by any third party
of a petition in bankruptcy or insolvency, which proceeding is not discharged
within 120 days, or upon or after any adjudication that the other party is
insolvent, or upon or after the filing by the other party of any petition or
answer seeking reorganization, readjustment or arrangement of the business of
the other party under any law relating to bankruptcy or insolvency, or upon or
after the appointment of a receiver for all or substantially all of the property
of the other party of any assignment or attempted assignment for the benefit of
creditors, or upon or after the institution of any proceedings for the
liquidation or winding up of the other party's business.
22
14.5 Rights Upon Termination.
-----------------------
14.5.1 In the event of any valid termination of this Agreement under
Sections 14.2, 14.3 or 14.4 hereof, each party's rights under this
Agreement shall be terminated. Except as provided in Section 14.5.2,
Section 14.5.3, and Section 14.5.5 hereof, the termination of the parties'
rights shall include the termination of any rights of each party to
continue to use the technology belonging to the other party. No
termination shall impact either party's rights to collect for accrued or
previously paid royalties.
14.5.2 In the event of any valid termination of this Agreement by one
party under Section 14.2 of this Agreement, unless the one party is in
breach of any material obligation under this Agreement, the licenses
granted to the non-breaching party in this Agreement shall continue in
perpetuity and shall be fully-paid up.
14.5.3 In the event of any valid termination of this Agreement by one
party under Section 14.3 or 14.4 of this Agreement, unless the one party is
in breach of a material obligation under this Agreement, the licenses
granted to the non-breaching party in this Agreement shall continue with
royalties due and payable for the period and on the terms set forth in this
Agreement.
14.5.4 Notwithstanding the above, if this Agreement terminates for
any reason other than breach of KODAK's obligation in Section 10.3 or 10.4
of this Agreement, or if it expires, KODAK may continue to sell for 180
days after termination or expiration the inventory of finished or completed
Printers bearing the Technology Logo which exists as of the termination or
expiration date. If the Agreement terminates due to breach of KODAK's
obligation in Section 10.3 or Section 10.4 of this Agreement, KODAK shall
not have the foregoing right to continue to sell such inventory of
Printers.
14.5.5 In the event of any valid termination of this Agreement other
than termination under Sections 14.2, 14.3, or 14.4 hereof, the licenses
granted to a party under this Agreement shall continue with royalties due
and payable for the period and on the terms set forth in this Agreement,
unless such party is in breach of a material obligation under this
Agreement.
15. DISPUTE RESOLUTION
------------------
The parties will attempt in good faith to resolve any controversy or claim
arising out of or relating to this Agreement, or the breach, termination or
validity hereof promptly by negotiations between executives of the parties who
have authority to settle the controversy or claim and who do not have direct
responsibility for the administration of this Agreement.
The disputing party shall give the other party written notice of the
dispute. Within thirty (30) days after receipt of the notice, the receiving
party shall submit to the disputing party a
23
written response. The notice and response shall include (a) a statement of each
party's position and a summary of the evidence and arguments supporting its
position, and (b) the name and title of the executive who will represent that
party. The executives shall meet at a mutually acceptable time and place within
forty (40) days of the date of the disputing party's notice and thereafter as
they reasonably deem necessary to exchange relevant information and to attempt
to resolve the controversy or claim.
If the controversy or claim has not been resolved pursuant to the mediation
procedure within ninety (90) days of the commencement of such procedure, or if
either party will not participate in mediation, either party may initiate
litigation in a state or federal court having jurisdiction thereof and located
in the judicial district in which the other party has its principal office. All
statutes of limitation shall be tolled while the alternative dispute resolution
procedures described in this Article are pending.
16. GOVERNMENT APPROVALS
--------------------
KODAK and CALCOMP acknowledge that each party has determined that this
Agreement is not subject to "pre-merger" clearance procedures in the United
States ("US") and the European Community ("EC"). Accordingly, KODAK and CALCOMP
agree that in the event any required clearance for this Agreement is required in
the US or the EC and/or any necessary filing is not approved by any jurisdiction
which requires such a filing, the parties shall amend this Agreement to the
extent necessary to comply with any such required clearance or filing, with such
amendment to contain commercially reasonable provisions which preserve the
economic equity of both parties.
17. PUBLICITY; MUTUAL PRESS RELEASE
-------------------------------
Neither party shall disclose the terms of this Agreement without the prior
written consent of the other party. CALCOMP and KODAK have agreed to the
wording of the press release in the attached Exhibit I. Both parties shall
publish this press release on a mutually agreed-on date. Nothing in this
Section 17 will prevent CALCOMP or KODAK from disclosing matters required to be
disclosed by the Securities and Exchange Commission or other governmental
authorities.
18. MISCELLANEOUS
-------------
18.1 Nonassignability. Except in connection with the sale of all or
----------------
substantially all of the Printhead assets or Printhead business of either party
to which this Agreement relates other than a competitor of the other party
listed in Exhibit H, which the parties may mutually agree to amend in writing
from time to time during the term of this Agreement, and except as contemplated
under Section 18.18, neither party may assign, transfer or sublicense any of the
24
rights or obligations under this Agreement, without the prior written consent of
the other party. This Agreement will inure to the benefit of and bind each
party's successors and assigns.
18.2 Failure to Enforce. The failure of either party to enforce at any
------------------
time or for any period of time the provisions of this Agreement shall not be
construed to be a waiver of such provisions or of the right of such party to
enforce each and every such provision.
18.3 Governing Law. Except as set forth in Article 15 of this Agreement
-------------
("Dispute Resolution"), this Agreement shall be deemed to have been made in the
State of New York, United States of America, and shall be governed by and
construed according to the laws of the State of New York without reference to
its conflict of laws provisions.
18.4 Severability. In the event that any of the provisions of this
------------
Agreement shall be held by a court or other tribunal of competent jurisdiction
to be unenforceable, such provisions shall be deleted from this Agreement and
the remaining portions of this Agreement shall remain in full force and effect,
except where the economic equity of both parties hereto is materially affected
by such unenforceability.
18.5 Notice. Any notice required or permitted to be given to the parties
------
hereto shall be given in writing and be either personally delivered, sent by
registered or certified mail, return-receipt requested, postage prepaid (except
during time of postal strike), or sent by facsimile to the other party to the
address set forth below. Any notice sent by personal delivery or registered
mail shall be deemed to be received on the date of delivery. Any notice sent by
facsimile shall be deemed to have been received by the party to whom it was sent
on the first business day following its transmission. Furthermore, while any
party may change its address by written notice to the other party in accordance
with this Section 18.5, all addresses for notice must be addresses to which
notices can be personally delivered.
Address for Notice to KODAK Address for Notice to CALCOMP
--------------------------- -----------------------------
▇▇▇▇▇▇▇ Kodak Company CalComp Technology, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President, Kodak Professional Attention: Corporate Secretary
18.6 Force Majeure. Neither party shall be liable to the other party
-------------
hereto for any loss, injury, delay, damages or other casualties suffered or
incurred by such other party due to strikes, riots, storms, fires, acts of God,
or war or any other cause beyond the reasonable control of either party.
25
18.7 Headings. Headings to articles, paragraphs and sections of this
--------
Agreement are to facilitate reference only, do not form a part of this
Agreement, and shall not in any way affect the interpretation hereof.
18.8 Survival From This Agreement. The rights and obligations of the
----------------------------
parties hereto under Article 9 ("Proprietary Rights") and Article 12
("Confidentiality") of this Agreement shall survive and continue after any
expiration or termination of this Agreement and shall bind the parties and their
representatives, successors, heirs and assignees.
18.9 Exhibits. All exhibits to which this Agreement refers are hereby
--------
incorporated into and made a part of this Agreement.
18.10 Entire Agreement. This Agreement constitutes the entire agreement
----------------
between KODAK and CALCOMP, and there are no other understandings, agreements or
representations, express or implied, written or oral, not specified herein.
This Agreement may only be amended by express written agreement signed by
authorized representatives of both parties.
18.11 Conflicts in Documentation. In the event that a conflict arises
--------------------------
between this Agreement and any work order or purchase order related to the Joint
Development Project, this Agreement shall govern and prevail, and the
conflicting terms and conditions of any such documents shall be deemed deleted,
and shall not be binding upon either party. In connection with the terms of
Articles 1 through 18. of this Agreement and attached Exhibits A through J, the
terms of such Exhibits shall be construed in a manner that is consistent with
the terms of such Articles; and in the event of any conflict between such
Articles and Exhibits, the terms of Articles 1. through 18. shall prevail.
18.12 Independent Contractors. In the performance of the duties
-----------------------
contemplated under this Agreement, the status of the parties including employees
and agents of each, shall be that of independent contractors and not as
employees, agents, or fiduciaries of the other party and as such neither party
shall have any right to make commitments for or on behalf of the other party.
18.13 Acts of Employees. Each party shall be responsible for the safety
-----------------
of its employees and agents with respect to activities relating to the Joint
Development Project under this Agreement and for liability for damages or
personal injuries, including death, resulting from such activities without any
warranty, liability, or indemnification on the part of the other party.
18.14 Loaned Equipment. Each party shall have independent discretion in
----------------
determining which of their own equipment will be furnished in connection with
the Joint Development Project. All such equipment loaned by one party to the
other shall remain the property of the party making such loan and shall be
returned upon request.
18.15 Sample Materials. Each party understands and acknowledges that any
----------------
sample or prototype materials furnished by either party to the other in
connection with the Joint
26
Development Project are experimental and such samples are provided only for
experimental use without any representation, assurance, or warranty on the part
of either party.
18.16 Right To Work With Third Parties. Subject to the terms of this
--------------------------------
Agreement, each party shall be free to engage in other work, alone or with
others, and to furnish information to and receive information from others.
18.17 Export Licenses. This Agreement, and any technical information
---------------
provided under this Agreement, may be subject to restrictions concerning the
export or products or technical information from the United States which may be
imposed by the U.S. Government or any other competent authority. Accordingly,
the parties agree that they shall not export or re-export, directly or
indirectly, any technical information acquired under this Agreement or any
products utilizing any such technical information to any country for which the
U.S. Government or other competent authority at the time of export requires an
export license or other approval, without first obtaining the written consent to
do so from the Department of Commerce or other agency of the U.S. Government or
Department of Commerce or other agency of the U.S. Government or from other
competent authority when required by an applicable statute or regulation.
18.18 Right To Sell Topaz Assets. In the event during the term of this
--------------------------
Agreement, CALCOMP desires to sell any of the Topaz Assets (other than in the
ordinary course of its business), CALCOMP shall first offer to KODAK a right to
purchase the Topaz Assets, or such portion thereof to be sold. CALCOMP shall
deliver to KODAK a written notice (the "Sale Notice") of its desire to sell
Topaz Assets, stating with specificity which assets will be sold. Thereafter,
KODAK shall engage an accounting firm or investment banking firm of nationally
recognized standing to render an appraisal as to the value of the Topaz Assets
available for sale. Such appraisal shall be rendered within sixty (60) days
from the Sale Notice and the cost thereof shall be shared equally by KODAK and
CALCOMP. KODAK and CALCOMP shall have a period of thirty (30) days from the
date of such appraisal to negotiate a definitive asset sale agreement containing
terms and conditions standard for transactions of this type. The agreed upon
price for the assets, if any, shall be within ten percent (10%) of the range set
forth in the appraisal. If no definitive agreement can be reached within such
thirty-day period, CALCOMP shall be free to sell the assets to a third party,
provided, however, that the terms of the sale are no more favorable than those
offered to KODAK during the negotiation period.
18.19 Right To Sell A Portion Of Topaz Assets. In the event CALCOMP sells
---------------------------------------
only a portion of the Topaz Assets, whether to KODAK or a third party purchaser,
KODAK's right of first refusal set forth in Section 18.18 above shall continue
with respect to the Topaz Assets still owned by CALCOMP.
27
18.20 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
CALCOMP TECHNOLOGY, INC.
Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Printed Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and CEO
▇▇▇▇▇▇▇ KODAK COMPANY
Signature: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President, Kodak Professional and
Vice President, ▇▇▇▇▇▇▇ Kodak Company
