EXHIBIT 10.1
AGREEMENT
THIS AGREEMENT, made as of the 18th day of September, 1996, by and between
FUJICOPIAN CO., LTD., located at 8-43, Utajima 4-chome, Nishi Yodogawa-ku, Osaka
555, Japan, a corporation organized and existing under and by virtue of the laws
of Japan (hereinafter referred to as "Fuji") and INTERNATIONAL IMAGING MATERIALS
INC., located at 310 Commerce Drive, Amherst, New York 14228-2396, United States
of America, a corporation organized and existing under and by virtue of the laws
of State of Delaware, United States of America (hereinafter referred to as
"IIMAK").
WITNESSETH:
WHEREAS, thermal non-impact printers are widely used in printing images on
various receiving media, including, without limitation, transparencies and plain
paper, in black, white or multiple colors, these thermal non-impact printers
being installed in various devices, including, without limitation, small
computers, computer terminals, communication equipment, electronic table-top
calculators, copying machines, word-processors, typewriters and hard copy
printers for television and CRT screens; and
WHEREAS, Fuji has developed various forms of thermal transfer media for use
with these thermal non-impact printers namely: (1) thermal carbon copy, which
permits simultaneous printing of an original on standard thermal paper and plain
paper carbon copy; (2) thermal carbon paper and thermal ribbon which are paper
or film substrates coated with a thermally transferrable layer which permits
thermal printing of images onto
plain paper; and (3) thermal color paper and thermal color ribbon, composed of a
paper or film substrate with a thermally transferrable layer of color ink
coating or coatings to produce images in multiple colors, either by use of a
single multi-color paper or ribbon or multiple mono-color papers or ribbons,
which can be used in thermal printing of multi-color images on plain paper
(hereinafter collectively referred to as the "Products"); and
WHEREAS, it is highly desirable that there is a flow of Products that is
beneficial to the general public and to business; and
WHEREAS, many electronic machine makers, printer makers, communications
equipment makers and duplicating machine makers in Japan and worldwide have
developed, are in the process of developing or have plans to develop devices
designed to utilize the Products; and
WHEREAS, Fuji has applied for patents covering some or all of the Products
and has received patents covering some or all of the Products in a number of
countries of the world; and
WHEREAS, Fuji has developed and possesses specialized knowledge, know-how,
techniques, processes and equipment for the manufacture and use of the Products;
and
WHEREAS, Fuji and IIMAK entered into an Agreement dated the 20th day of
June, 1983 whereby IIMAK was granted a license to use certain of Fuji's patents
and know-how to manufacture and sell the Products (the "Prior Agreement"); and
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WHEREAS, Fuji and IIMAK desire to replace the Prior Agreement and to
continue their relationship on the terms and conditions set forth herein.
NOW, THEREFORE, Fuji and IIMAK hereby agree, as follows:
Article 1.
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(a) Exclusive License. Fuji hereby grants to IIMAK, subject to the terms,
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conditions and exceptions set forth in this Agreement, and IIMAK hereby accepts
from Fuji, subject to such terms, conditions and exceptions, an exclusive
license, without right to sublicense, to practice the "Licensed Technology", as
defined below, to manufacture, have manufactured, use, sell and distribute the
Products, including, without limitation, the products specified in "Exhibit I"
attached hereto, within the countries of Canada, the United States of America,
and Mexico, including, without limitation, their territories, possessions and
protectorates (hereinafter called the "Territory").
(b) Non-Exclusive License. Fuji hereby grants to IIMAK, subject to the terms,
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conditions and exceptions set forth in this Agreement, and IIMAK hereby accepts
from Fuji, subject to such terms, conditions and exceptions, a non-exclusive
license, without right to sublicense, to practice the "Licensed Technology", as
defined below, to use, sell and distribute the Products, including, without
limitation, the products specified in "Exhibit I" attached hereto, anywhere in
the world other than the countries within Europe and Asia.
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(c) As used herein, "Licensed Technology" shall mean "Licensor's Patents and
Patent Applications" and "Licensor's Know-How" both as defined below.
(i) As used herein "Licensor's Patents and Patent Applications" shall mean
any patents or patent applications now or hereafter obtained, made or
otherwise acquired by Fuji (or any "Affiliate," as defined below, of
Fuji) on the Products, any of their component parts, any process by which
the Products or any of their component parts are manufactured, or any use
to which the Products or any of their component parts may be put,
including, without limitation, the patents and patent applications set
forth in "Exhibit II" attached hereto and any patents issued to, and
patent applications made by, Fuji Kagakushi Kogyo Company Limited or any
other predecessor in interest to Fuji, excluding, however, any
"Participation Patent", as defined below, acquired by Fuji after the date
of this Agreement. As used herein, an "Affiliate" of any party shall mean
any person, business organization or other entity which directly or
indirectly controls, is controlled by, or is under common control with
such party.
(ii) As used herein "Licensor's Know-How" shall mean any knowledge or know-how
possessed by Fuji (or any of its Affiliates) concerning the Products,
including
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without limitation, formulations, techniques, processes, process designs,
equipment, equipment designs, supplies, sources of supply and technology
for suppliers for the manufacture or use of the Products and designs
therefor, and ink and other coating formulas and the instructions and
process specifications for manufacturing such inks and other coatings
according to such formulas, excluding only that knowledge or know-how
possessed by Fuji which has not been reduced to commercial use and Fuji's
"Designed-In Know-How," as defined below.
(iii) As used herein "Designed-In Know-How" of Fuji or IIMAK shall mean
knowledge or know-how of Fuji or IIMAK, as the case may be, specific to
the interface, adaption or integration of transfer or receiving media or
both, including without limitation Products or any of them, with, or the
application of formulations, techniques, processes and equipment and
their designs to, any (A) equipment or device equipped with a thermal
non-impact printing apparatus or subassembly; (B) thermal non-impact
printing apparatus or subassembly; or (C) other device designed to use
such transfer or receiving media or both; provided, however, that such
knowledge or know-how has been developed by Fuji or IIMAK, as the case
may be,
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primarily for or in conjunction with a third party which is not an
Affiliate of Fuji or IIMAK, as the case may be, and which is (X) the
manufacturer of such equipment or device equipped with a thermal non-
impact printing apparatus or subassembly; (Y) the manufacturer of such
thermal non-impact printing apparatus or subassembly; or (Z) the
manufacturer of such other device designed to use such transfer or
receiving media or both. "Designed-In Know-How" shall be deemed to
include any specific combination of inks or other coatings, used by Fuji
or IIMAK, as the case may be, in the manufacture of Products for use in
or with any equipment, device, apparatus or subassembly enumerated in (A)
through (C) above, if such combination is developed primarily for or in
conjunction with any of the unaffiliated third parties included within
the scope of (X) through (Z) above. Notwithstanding the foregoing, ink
and other coating formulas, themselves (as opposed to combinations in
which they are used), now or hereafter possessed by Fuji or IIMAK (or any
of their respective Affiliates), as the case may be, which have been used
in commercial application, and the instructions and process
specifications for manufacturing such inks and other coatings according
to such formulas, shall not be deemed
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"Designed-In Know-How" and, if used or possessed by Fuji (or any of its
Affiliates), shall be deemed "Licensor's Know-How" for all purposes of
this Agreement and, if used or possessed by IIMAK (or any of its
Affiliates), shall be governed by Article 9 below.
(iv) As used herein, "Participation Patents" of Fuji or IIMAK, as the case may
be, shall mean any patent or utility model, or application therefor, on
the Products, any of their component parts, any process by which the
Products or any of their component parts are manufactured, or any use to
which the Products or any of their component parts may be put, which is
jointly owned by Fuji or IIMAK (or any of their respective Affiliates),
as the case may be, with a third party other than an Affiliate of Fuji or
IIMAK, as the case may be, and with respect to which the consent or
approval of such third party is legally required in order for Fuji or
IIMAK (or any of their respective Affiliates), as the case may be, to
grant a valid license or sublicense thereunder.
(d) This Agreement notwithstanding, Fuji shall have the right to license
International Business Machines and its subsidiaries ("IBM") to practice the
Licensor's Patents and Patent Applications within the Territory to manufacture
and sell Products in the Territory and elsewhere; provided, however, that such
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Products are sold exclusively under one or more of IBM's trademarks or trade
names and are exclusively for use with equipment manufactured by IBM.
(e) IIMAK recognizes and agrees that Nippon Telegraph & Telephone Corporation
is entitled to license other companies under those Patents and Patent
Applications listed in Exhibit II which are jointly owned by Fuji and Nippon
Telegraph & Telephone Corporation. Fuji will make all reasonable efforts to have
Nippon Telegraph & Telephone Corporation coincide with Fuji's patent licensing
structure. Fuji shall not supply any of Licensor's Know-How to Nippon Telegraph
& Telephone Corporation or its licensees in a manner which will be inconsistent
with the exclusive license granted IIMAK hereunder without prior approval from
IIMAK.
Article 2.
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(a) Fuji shall, as soon as practicable, obtain any required approval of this
Agreement by the Japanese Government. Fuji acknowledges that, in accordance with
the Prior Agreement, IIMAK has paid Fuji a non-refundable down payment of
J.(Yen)50,000,000.
(b) Fuji has heretofore furnished and during the term of this Agreement shall
continue to furnish IIMAK with general information including written
formulations and guidance relating to materials and equipment required for the
manufacture of the Products. If specifically requested by IIMAK, Fuji shall
supply IIMAK with equipment and other materials for the manufacture of the
Products, such equipment to be supplied at the price and on
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the terms and conditions to be determined through mutual agreement based on a
cost estimate to be provided by Fuji, and such other materials to be supplied at
the same price and on the same general terms and conditions as such materials
are purchased by Fuji. With respect to any such equipment or other materials
supplied to IIMAK by Fuji, the costs of shipment, handling (including handling
by Fuji) and other transportation and insurance charges, if any, as then agreed
and arranged by the parties shall be paid by IIMAK.
(c) Notwithstanding the exclusive license granted to IIMAK under this
Agreement, Fuji may sell Products outside the Territory, for use, resale or
distribution within the Territory, to any manufacturer of thermal transfer
printers or thermal transfer print engines, but only if (i) such manufacturer is
a business organization existing under or by virtue of the laws of any country
within Europe or Asia and (ii) such Products are for use exclusively with
thermal transfer printers and thermal transfer print engines manufactured
outside of the Territory by such manufacturer.
(d) Except as provided in paragraph (c) above, Fuji agrees not to sell or
distribute, and shall cause its other licensees not to sell or distribute,
Products to any person, business organization or other entity which Fuji or any
such other licensee knows or reasonably should know intends to use, sell or
distribute the Products within the Territory.
(e) IIMAK agrees not to sell or distribute Products to any person, business
organization or other entity which IIMAK knows or reasonably should know
intends to use, sell or distribute
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the Products in Asia. Notwithstanding the foregoing sentence, IIMAK may sell
Products within the Territory for use, resale or distribution within Asia, to
any manufacturer of thermal transfer printers or thermal transfer print engines,
but only if (i) such manufacturer is a business organization existing under or
by virtue of the laws of any country, state or political subdivision within the
Territory and (ii) such Products are for use exclusively with thermal transfer
printers and thermal transfer print engines manufactured within the Territory by
such manufacturer.
(f) Nothing in this Article 2 shall prevent Fuji or IIMAK from selling
Products to each other or to Armor S.A., subject to the other provisions of this
Agreement.
Article 3. During the term of this Agreement, IIMAK may use and propagate
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for the purpose of the sale or distribution of the Products any proper brand or
mark, excepting the "Fujicopian" and "Copian" trademarks, which Fuji hereby
reserves for its own exclusive use.
Article 4. During the term of this Agreement, upon the request of IIMAK,
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Fuji will dispatch not more than two (2) technical staff personnel of suitable
competence to IIMAK's facility for a period not to exceed two (2) weeks at any
one time, to advise and assist IIMAK, with regard to the Licensed Technology and
the manufacture of the Products. IIMAK will bear all expenses for the dispatch
of the technical staff including business class round trip airline tickets,
living expenses including first class hotel accommodations and a daily allowance
to be agreed upon and
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provide transportation between such hotel and IIMAK's facility and if necessary,
the services of a competent interpreter.
Article 5. During the term of this Agreement, IIMAK will have the right to
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send and Fuji will accept not more than three (3) staff members to Fuji's
offices and production facilities in Japan for the purpose of observing and
learning details relating to the Licensed Technology and the manufacture and
sale of the Products. Such visits shall be for a maximum period of two (2) weeks
and not more than one (1) visit per calendar year and all expenses including
travel to and from Japan and living expenses in Japan of the persons to be
dispatched to be borne by IIMAK. IIMAK will inform Fuji of its intention to send
such staff at least sixty (60) days in advance of the visit and Fuji will
receive the visit and provide necessary assistance and guidance to the
dispatched staff to observe and learn details relating to the Licensed
Technology and the manufacture and sale of the Products.
Article 6.
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(a) In consideration of the rights under the Licensed Technology granted by
Fuji hereunder, IIMAK shall pay to Fuji during the term of this Agreement,
remuneration in an amount determined as follows:
(i) A royalty of five percent (5%) of IIMAK's yearly sales of those Products
covered by the patents identified in Exhibit II as being in the category
of patents currently jointly owned by Nippon Telegraph & Telephone
Corporation and Fuji; and
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(ii) A royalty of three percent (3%) of the first five billion Japanese Yen of
IIMAK's total yearly sales, and two and one-half percent (2 1/2%) of
IIMAK's total yearly sales in excess thereof, of all Products, including,
without limitation, those to which joint patent applications between Fuji
and Nippon Telegraph & Telephone Corporation currently or hereafter
apply; provided, however, that no royalty shall be paid under this
Article 6(a)(ii) on sales for which a royalty is being paid under Article
6(a)(i) above.
(iii) For the purposes of converting U.S. Dollar amounts to Japanese Yen in
order to facilitate the calculations to be made in accordance with
Articles 6(a)(i) and (ii) above, the parties agree to apply Marine
Midland Bank's quoted interbank rate for Japanese Yen as of the close of
business on the last U.S. business day of the calendar year for which the
royalty in question is being paid.
(iv) IIMAK acknowledges that the rights granted under the Licensor's Know-How
by this Agreement are a valuable and significant consideration for this
Agreement.
(b) In calculating royalties under this Article 6, IIMAK's "yearly sales" of
Products shall mean: (i) in the case of sales by IIMAK to a purchaser with whom
IIMAK deals at arm's length, the amount charged by IIMAK for the Products; and
(ii) in
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the case of sales by or through a subsidiary or affiliate of IIMAK to a third
party, the amount charged by such subsidiary or affiliate for the Products, it
being understood that the amount charged by IIMAK to its subsidiary or affiliate
for such Products for resale by such subsidiary or affiliate shall not be
included in IIMAK's "yearly sales". Fuji and IIMAK expressly agree that, in
determining IIMAK's "yearly sales" the following sales shall not be included and
no royalty with respect to the same shall be paid by IIMAK: (i) all sales of
Products by IIMAK to Fuji; (ii) all sales of Products by IIMAK to Armor S.A.,
provided, however, that Armor S.A. has an obligation to account for and pay
royalties to Fuji on the Products purchased by Armor S.A. from IIMAK; and (iii)
all sales by IIMAK of Products in finished form purchased by IIMAK from Fuji. As
used in the preceding sentence, "Products in finished form" shall include
Products manufactured by IIMAK from jumbo rolls purchased from Fuji but only to
the extent of the cost of such jumbo rolls including freight, taxes and
applicable duties.
(c) All sales shall be totalled by IIMAK at the end of each calendar year and
the total royalty payable by IIMAK shall be calculated for that calendar year as
provided above. IIMAK shall pay the appropriate royalty for each calendar year
during the term of this agreement prior to the end of February of the following
calendar year. The royalty shall be paid by delivering to Fuji, in Japanese Yen,
the total royalty to be paid in accordance with this Article 6. If for any
calendar year during the term of this agreement the total royalty payable by
IIMAK does not exceed
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J.(Yen)5,000,000, IIMAK shall pay Fuji an additional royalty so that the total
royalty paid by IIMAK for such calendar year equals J.(Yen)5,000,000.
(d) IIMAK shall submit to Fuji by the end of February of each year a written
report of sales made during the past calendar year, separately indicating the
amount of sale made by IIMAK to Armor S.A. during such calendar year, and if
requested by Fuji by means of thirty (30) days advance written notice, shall
allow an independent firm of certified public accountants of international
reputation selected by Fuji, to which IIMAK has no reasonable objection, to
inspect and audit relevant books and records covering sales of the Products,
subject only to the requirement that such independent firm of certified public
accountants agree to keep all contents of such books and records confidential.
If the determination made by such independent firm of certified public
accountants as to the accuracy or any shortfall or overpayment of royalties paid
by IIMAK to Fuji under this Agreement is not acceptable to IIMAK, IIMAK may
cause another independent firm of certified public accountants of international
reputation selected by IIMAK, to which Fuji has no reasonable objection, to
perform a separate secondary auditing of such books and records, and Fuji and
IIMAK shall endeavor to make adjustments based on the results of the audits
performed by the independent firms of public accountants respectfully selected
by Fuji and IIMAK. If no such adjustments can be agreed upon within three (3)
months after the date of submission of the relevant audit report by the firm of
public accountants selected by IIMAK, either Fuji
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or IIMAK may submit the dispute to arbitration in accordance with Article 14 of
this Agreement. IIMAK and Fuji shall settle any such shortfall or overpayment
within sixty (60) days following the latest to occur of (i) the receipt of
written notice of the determination of the firm of certified public accountants
selected by Fuji; (ii) the agreement by IIMAK and Fuji as to an appropriate
adjustment; or (iii) the final resolution of arbitration, as the case may be, by
paying or refunding the amount of such shortfall or overpayment as appropriate.
Neither IIMAK nor Fuji shall be deemed in breach or default of this Agreement by
reason of any such shortfall or overpayment if such shortfall or overpayment is
paid, refunded, or adjusted in accordance with, or if the party in question is
following the procedures contemplated by, this Article 6(d).
Article 7.
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(a) IIMAK recognizes and acknowledges that Fuji's Licensed Technology
constitutes unique and valuable property of Fuji. IIMAK agrees that any and all
information concerning such Licensed Technology which is disclosed by Fuji to
IIMAK, its agents, servants or employees shall be held in confidence and shall
be protected from disclosure with the same degree of care as IIMAK uses to
protect its own trade secrets and confidential information. IIMAK further agrees
not to use such Licensed Technology except in accordance with the terms of this
Agreement. Except as otherwise provided in this Agreement, the obligations of
IIMAK with respect to the use and confidentiality of the Licensed Technology
shall survive the expiration or termination of this
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Agreement, provided, however, that IIMAK shall have no such obligations during
or after the term of this Agreement, with respect to any portion of the Licensed
Technology, and such portion shall be deemed not to be Licensed Technology, if
IIMAK provides Fuji with reasonable evidence that such portion:
(i) is now or hereafter available in the public domain, due to the expiration
of any patent or otherwise, other than through the wrongful act or
omission of IIMAK;
(ii) has been or is hereafter disclosed to one or more third parties by Fuji
without restriction on such third parties;
(iii) has been or is hereafter independently developed by IIMAK without use
or access to any Licensed Technology;
(iv) has been or is hereafter disclosed to IIMAK without restriction by a
third party having a right to make such disclosure; or
(v) was possessed by IIMAK prior to being received from Fuji under this
Agreement or the Prior Agreement.
(b) During the life of the patents licensed under this Agreement, IIMAK may
be required to mark the Products, their containers and catalogs to satisfy
applicable patent laws concerning Fuji's patent ownership and the fact of
licensing rights.
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Article 8.
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(a) During the term of this Agreement, at every six month interval, Fuji shall
advise IIMAK of the details of any addition or improvement to the Products or
the Licensed Technology made and reduced to commercial use by Fuji (or any of
its Affiliates), or by Fuji (or any of its Affiliates) jointly with Nippon
Telegraph & Telephone Corporation, and will grant IIMAK the right to utilize
such addition or improvement without any additional remuneration to Fuji, other
than as stipulated in Article 6 of this Agreement, and any such addition or
improvement shall thereafter be deemed part of the Licensed Technology.
Notwithstanding the foregoing, to the extent that any such addition or
improvement is covered by a Participation Patent of Fuji, is Designed-In Know-
How of Fuji not developed with or for Nippon Telegraph & Telephone Corporation,
or is otherwise subject to a restriction on disclosure by Fuji (or any of its
Affiliates) which runs to a third party other than Nippon Telegraph & Telephone
Corporation, such addition or improvement shall be governed by Article 8(b)
below.
(b) During the term of this Agreement, at every six month interval, Fuji
shall advise IIMAK of the general nature of any (i) Designed-In Know How, (ii)
Participation Patents , and (iii) other additions and improvements to the
Products or the Licensed Technology subject to a restriction on disclosure by
Fuji (or any of its Affiliates) which runs to a third party other than Nippon
Telegraph & Telephone Corporation, made and reduced to commercial use by Fuji
(or any of its Affiliates) with or for a
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third party not an Affiliate of Fuji. Should IIMAK express its desire to use any
of such Designed-In Know-How, Participation Patents or other additions or
improvements, then, subject to the approval of such third party, Fuji will
provide IIMAK with such Designed-In Know-How, Participation Patents or other
additions or improvements, and such Designed-In Know-How, Participation Patents
or other additions and improvements shall be deemed part of the Licensed
Technology. The parties acknowledge that in order to obtain the third party
approval required hereunder, IIMAK may agree to pay a fee or royalty to such
third party. Fuji agrees to use all reasonable efforts to cause such third party
to grant its approval of IIMAK's use of any such Designed-In Know-How,
Participation Patents or other additions or improvements.
Article 9.
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(a) During the term of this Agreement, at every six month interval, IIMAK
shall advise Fuji of the details of any addition or improvement to the Products
or the Licensed Technology made and reduced to commercial use by IIMAK (or any
of its Affiliates) that is not Designed-In Know-How of IIMAK, a Participation
Patent of IIMAK, or otherwise subject to a restriction on disclosure by IIMAK
(or any of its Affiliates). In such case, IIMAK agrees to:
(i) If IIMAK has not already done so, at Fuji's request, employ a patent
attorney designated by Fuji and apply in Japan for patents or utility
models for the addition or improvement and if IIMAK has applied for any
patents or utility models
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outside Japan, make application in Japan claiming the priority right of
any earlier non-Japanese application.
(ii) Grant Fuji a royalty-free right to use the addition or improvement and
to practice any patents or utility models applied for by IIMAK
pertaining to such addition or improvement anywhere in the world outside
of the Territory together with the right to sub-license any of Fuji's
other licensees to use such addition or improvement and to practice such
patents and utility models anywhere in the world outside of the
Territory, subject to the terms of Article 12 below.
(b) During the term of this Agreement, at every six month interval, IIMAK
shall advise Fuji of the general nature of any (i) Designed-In Know-How, (ii)
Participation Patents and (iii) other additions or improvements to the Products
or the Licensed Technology subject to a restriction on disclosure by IIMAK (or
any of its Affiliates), made and reduced to commercial use by IIMAK (or any of
its Affiliates) with or for a third party not an Affiliate of IIMAK. Should Fuji
express its desire to use any of such Designed-In Know-How, Participation
Patents or other additions or improvements, then, subject to the approval of
such third party, IIMAK will provide Fuji with such Designed-In Know-How,
Participation Patents or other additions or improvements. The parties
acknowledge that in order to obtain the third party approval required hereunder,
Fuji may agree to pay a
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fee or royalty to such third party. IIMAK agrees to use all reasonable efforts
to cause such third party to grant its approval of Fuji's use of any such
Designed-In Know-How, Participation Patents or other additions or improvements.
Article 10.
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During the term of this Agreement, in the event IIMAK learns that a third
party is infringing, in the Territory, any of the patents licensed by Fuji to
IIMAK under this Agreement, IIMAK may give written notice thereof to Fuji,
together with all material information IIMAK has regarding the alleged
infringement. Upon receiving notice of an alleged infringement from IIMAK, Fuji
shall, for a period not to exceed twelve (12) months (the "Investigation
Period"), investigate such alleged infringement. Following the Investigation
Period, having regard that it is desirable and to the mutual benefit of Fuji and
IIMAK for such patent protection to be preserved, the parties hereto shall
consult with regard to the manner in which such situation can best be handled.
IIMAK shall not, however, take any action against any such third party or
otherwise deal with any such third party in connection with the alleged
infringement, whether reported to Fuji or not, without the express written
consent of Fuji.
Article 11. Unless earlier terminated in accordance with any of the
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provisions of Article 12, below, this Agreement shall continue in force until
June 19, 2008, and may be extended thereafter for one or more additional periods
of any number of years, by written agreement of the parties executed prior to
the expiration of the initial or any extended period.
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Article 12.
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(a) In the event of a default by IIMAK in the payment of any royalty under
Article 6 hereof, and the continuation, for a period of twenty (20) days or such
longer period (not to exceed sixty (60) days) as shall be reasonable under the
circumstances, of such default after receipt of a written demand from Fuji for
correction of such default, Fuji may terminate this Agreement at any time
thereafter provided that the default remains uncured, by providing a written
notice of termination to IIMAK. Upon any such termination of this Agreement by
Fuji, IIMAK shall promptly cease using and desist from using all Licensed
Technology for the manufacture and sale of the Products; neither IIMAK nor Fuji
shall have any obligation to disclose or license any additional knowledge, know-
how, patents or patent-applications to the other; Fuji shall no longer be
required to provide IIMAK with any technical assistance; Fuji shall be entitled,
without the obligation of royalty payment after the date of termination, to
continue to enjoy the benefit of any unexpired patents, knowledge, know-how or
trade secrets disclosed or licensed to it by IIMAK under this Agreement; and
IIMAK shall pay to Fuji all royalties accrued under this Agreement prior to the
date of such termination plus Fifty Million Japanese Yen (J.(Yen)50,000,000) as
liquidated damages. Notwithstanding the foregoing, Fuji's right to use IIMAK's
unexpired patents shall only continue for the remainder of what would have been
the then unexpired term of this Agreement, and shall terminate thereafter.
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(b) In the event of a material default by IIMAK in the performance of any
obligation under this Agreement, other than non-payment of any royalty under
Article 6 hereof, and the continuation, for a period of twenty (20) days or such
longer period (not to exceed sixty (60) days) as shall be reasonable under the
circumstances, of such default after receipt of a written demand from Fuji for
correction of such default, Fuji may terminate this Agreement at any time
thereafter provided the default remains uncured, by providing a written notice
of termination to IIMAK. Upon any such termination of this Agreement by Fuji,
IIMAK shall no longer be entitled to practice any unexpired patents of Fuji;
IIMAK shall lose the exclusivity of its rights but shall continue to possess
non-exclusive rights to any knowledge, know-how or trade secrets disclosed or
licensed to it by Fuji; neither IIMAK nor Fuji shall have any obligation to
disclose or license any additional knowledge, know-how, patents or patent-
applications to the other; Fuji shall no longer be required to provide IIMAK
with any technical assistance; Fuji shall be entitled, without the obligation of
royalty payment, if any, after the date of termination, to continue to enjoy the
benefit of any unexpired patents, knowledge, know-how or trade secrets disclosed
or licensed to it by IIMAK under this Agreement; and IIMAK shall continue to pay
to Fuji, for the remainder of what would have been the then unexpired term of
this Agreement, royalties in accordance with Article 6 of this Agreement;
provided, however, that with respect to all sales of Products made by IIMAK
during such unexpired term, the royalty rate payable by IIMAK pursuant to
- 22 -
Article 6(a)(ii) of this Agreement shall be a single overall rate of four
percent (4%) in lieu of the royalty rates provided therein. Notwithstanding the
foregoing, Fuji's right to use IIMAK's unexpired patents shall only continue for
the remainder of what would have been the then unexpired term of this Agreement
and shall terminate thereafter. Should IIMAK, following a termination of this
Agreement pursuant to this Article 12(b), materially fail to make payment to
Fuji of royalties during the remainder of the unexpired term of this Agreement,
the provisions of Article 12(a) shall apply.
(c) In the event of a material default by Fuji in the performance of any
obligation under this Agreement, and the continuation, for a period of twenty
(20) days or such longer period (not to exceed sixty (60) days) as shall be
reasonable under the circumstances, of such default after receipt of a written
demand from IIMAK for correction of such default, IIMAK may terminate this
Agreement at any time thereafter provided the default remains uncured, by
providing a written notice of termination to Fuji. Upon any such termination of
this Agreement by IIMAK, Fuji shall no longer be entitled to practice any
unexpired patents of IIMAK; Fuji shall lose the exclusivity of its rights but
shall continue to possess non-exclusive rights to any knowledge, know-how or
trade secrets disclosed or licensed to it by IIMAK; neither IIMAK nor Fuji shall
have any obligation to disclose or license any additional knowledge, know-how,
patents or patent-applications to the other; IIMAK shall retain, without
obligation of royalty payment after the date of termination, the
- 23 -
exclusive license within the Territory and the non-exclusive license elsewhere
(except in Europe and Asia) granted under Article I of this Agreement,
including, without limitation, with respect to the Licensor's Know-How; and
IIMAK shall pay to Fuji, when due, all royalties accrued under this Agreement
prior to the date of such termination. Notwithstanding the foregoing, IIMAK's
right to use Fuji's unexpired patents and the exclusivity of IIMAK's license
within the Territory shall only continue for the remainder of what would have
been the then unexpired term of this Agreement and shall terminate thereafter.
(d) Upon expiration of the term of this Agreement, neither IIMAK nor Fuji
shall be entitled to practice the unexpired patents of the other and neither
party shall have any obligation to disclose or license any additional knowledge,
know-how, patents or patent-applications to the other; except with respect to
such unexpired patents, IIMAK and Fuji shall each be entitled, without
obligation of royalty payment after the date of such expiration, to continue to
enjoy the benefits of any knowledge, know-how or trade secrets (including, in
the case of IIMAK, the Licensor's Know-How) theretofore disclosed to it by the
other under this Agreement; and IIMAK shall pay to Fuji, when due, all royalties
accrued under this Agreement prior to its expiration. Each party shall have the
right of first refusal to be licensed under any of the other party's unexpired
patents or patent applications after such expiration of the term of this
Agreement, and Fuji and IIMAK shall enter into a good faith negotiation
regarding the terms and
- 24 -
conditions under which a license may be granted thereon either by Fuji or IIMAK,
as the case may be, to the other party.
(e) Anything to the contrary in this Agreement notwithstanding, if the
existence, materiality or extent of any alleged breach of this Agreement is
disputed or if the parties are otherwise negotiating concerning such alleged
breach, including, without limitation, pursuant to Article 14 or Article 17 of
this Agreement, then the party alleging such breach shall not be entitled to
terminate this Agreement under Article 12(a), (b) or (c) above, and the party
alleged to be in breach shall not lose any rights under this Agreement in
accordance with Articles 12(a), (b) and (c) above, unless and until such time as
the dispute or negotiations are finally resolved in favor of the party alleging
the breach and the breaching party thereafter fails to cure such breach or
otherwise comply with the terms of such final resolution within thirty (30) days
thereof, or such longer time as is provided for therein.
(f) Anything to the contrary in this Agreement notwithstanding, neither party
hereto shall be liable for non- performance or delay in performance of its
obligations under this Agreement, nor shall such party be liable to the other
party for any loss, injury, delay, damages or other casualty suffered or
incurred by the other party, due to riots, storms, fires, earthquakes,
explosions, embargoes, acts of government or any law or regulation, labor
disputes, acts of God, war, war-like hostility, shortages or unavailability of
fuel, materials, containers, transportation facilities, or any other cause which
is
- 25 -
beyond the reasonable control of the affected party, whether similar or
dissimilar to any of the foregoing causes, and any failure of performance or
delay in performance of any of its obligations under this Agreement due to one
or more of the foregoing causes shall not be considered as a breach of this
Agreement.
Article 13. This Agreement shall bind and shall inure to the benefit of the
----------
parties and their respective successors and assigns.
Article 14.
----------
(a) All disputes arising in connection with this Agreement shall be finally
settled under the Rules of Conciliation and Arbitration of the International
Chamber of Commerce by one or more arbitrators appointed in accordance with the
said Rules. The Proceedings shall be in the English language. The parties agree
to exclude from arbitration any right of application or appeal to the courts of
the jurisdiction in which the arbitration is being held in connection with any
question of law arising in the course of the arbitration or with respect to any
award made.
(b) The award of the arbitrators shall be final and binding upon the parties.
Judgement upon the award may be entered in any court having jurisdiction, or
application may be made to such court for judicial acceptance of the award and
an order of enforcement, as the case may be.
(c) Any arbitration in accordance with this Article 14 shall be held: (i) in
Osaka, Japan, or such other location as Fuji reasonably specifies, if commenced
by IIMAK; (ii) in Buffalo, New
- 26 -
York, U.S.A., or such other location as IIMAK reasonably specifies, if commenced
by Fuji; or (iii) at such location as is agreed upon by IIMAK and Fuji, if such
arbitration is commenced by mutual agreement of IIMAK and Fuji.
Article 15. Any notice or communication under this Agreement shall be made
----------
by: (i) a registered airmail letter; or (ii) a telex, cable or facsimile
transmission with a copy sent by a registered airmail letter, addressed as
follows:
If to Fuji:
Fujicopian Co. Ltd.
No. 8-43, 4-chrome, Utajima, Nishi Yodogawa-ku
Osaka 555, Japan
Attn: President
If to IIMAK:
International Imaging Materials Inc.
310 Commerce Drive
Amherst, New York 14228-2396
U.S.A.
Attn: President
Any notice or communication sent in accordance with this provision shall be
deemed to have been received seven (7) calendar days after being sent or upon
the earlier confirmation of the receipt thereof.
Article 16. This Agreement is in the English language only.
----------
Article 17. At any time, should Fuji or IIMAK believe that, for any reason,
----------
the provisions of this Agreement are resulting in the inequitable treatment of
that party, or should any doubt or new development arise in the interpretation
of or performance under any provision of this Agreement, either party
- 27 -
may call for a special meeting between Fuji and IIMAK, to be held at a mutually-
agreeable time and location, to discuss in good faith the grounds for such
belief, doubt or new development and to attempt to reach agreement upon an
appropriate and mutually acceptable method of abating or correcting such
inequitable treatment or resolving or dealing with such doubt or new
development. During the period of time such discussion is in progress and while
neither party has expressed its intention to terminate such discussion, neither
party shall be entitled to commence arbitration pursuant to Article 14 or
terminate this Agreement pursuant to any of the provisions of Article 12(a),
Article 12(b) or Article 12(c). Without limiting the generality of the
foregoing, the parties agree that, should IIMAK notify Fuji that IIMAK is not
interested in manufacturing and selling a particular Product within the
Territory, a meeting pursuant to this Article 17 may be called by either party
in order to discuss the possibility of establishing a mutually beneficial method
of supplying such Product to consumers in the Territory.
Article 18. The parties recognize that Fuji is a party to that certain
----------
"Memorandum of Understanding concerning Heat Sensitive Color Transfer Ribbons"
dated June 1, 1989, between Fuji and Dai Nippon Printing Co., Ltd. (the
"Memorandum"), the contents of which is known and understood by IIMAK.
Accordingly, it is agreed that in case any of the provisions of the Memorandum
is inconsistent with any of the provisions of this Agreement, such provision of
the Memorandum shall take precedence and prevail over such provision of this
Agreement.
- 28 -
Article 19.
----------
(a) This Agreement, and the Exhibits hereto, constitutes the entire Agreement
and supersedes the Prior Agreement in its entirety and all other prior
agreements and understandings, both written and oral, between the parties hereto
with respect to the subject matter hereof and any amendment, change or
modification shall be void unless in writing and signed by all the parties
hereto.
(b) That certain Equipment Repurchase Agreement, between Fuji and IIMAK dated
March 6, 1989, is hereby terminated in its entirety by mutual agreement of Fuji
and IIMAK as of the date of this Agreement, and shall be null and void
hereafter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their representatives, thereunto duly authorized, the day and year first
above written.
FUJI IIMAK
FUJICOPIAN CO. LTD. INTERNATIONAL IMAGING
MATERIALS, INC.
By: /s/TARO AKASHIRO By: /s/JOHN W. O'LEARY
------------------------- ---------------------------
Taro Akashiro, President John W. O'Leary, President
and Chief Executive Officer
- 29 -
EXHIBIT I
LIST OF PRODUCTS
1. Thermal Carbon Copy (TCC)
2. Thermal Carbon Paper (TCP)
3. Thermal Ribbon (TCR)
4. Thermal Color Paper and Ribbon
5. All improvement and new developments relating to Thermal
Ribbons effected by Fuji and reduced to commercial use during
the validity of this Agreement and/or extensions.
- 30 -
EXHIBIT II
LIST OF PATENTS AND PATENT APPLICATIONS
=================================================================
PCL Pat. Application Filing Date
Family No. Countries No. of Patent No.
- -----------------------------------------------------------------
1 USA 659,034 10.10.84 4,572,684
- -----------------------------------------------------------------
2 USA 465,017 8.2.83 4,503,095
682,871 18.12.84 4,588,315
CANADA 420,846 3.2.83 1,198,591
- -----------------------------------------------------------------
3 (*1) USA 358,033 15.3.82 4,463,034
611,439 17.5.84 4,581,283
CANADA 398,280 12.3.82 1,195,114
- -----------------------------------------------------------------
4 (*2) USA 152,769 28.5.80 4,315,643
CANADA 363,875 3.11.80 1,151,001
- -----------------------------------------------------------------
5 (*3) USA 451,224 20.12.82 4,474,844
CANADA 418,222 21.12.82 1,192,397
- -----------------------------------------------------------------
6 (*4) USA 601,406 17.4.84 4,616,932
CANADA 452,110 16.4.84 1,236,300
- -----------------------------------------------------------------
7 USA 746,352 19.6.85 4,612,243
CANADA 484,631 20.6.85 1,237,280
- -----------------------------------------------------------------
8 USA 559,447 26.7.90 5,051,302
- -----------------------------------------------------------------
9 USA 931,466 13.2.88 4,767,663
CANADA 519,853 6.10.86 1,260,267
- -----------------------------------------------------------------
10 USA 302,530 27.1.89 4,975,332
- -----------------------------------------------------------------
11 USA 289,505 23.12.88 5,017,256
CANADA 535,144 21.4.87 1,322,494
- -----------------------------------------------------------------
12 (*4) USA 074,192 13.7.87 4,869,941
CANADA 541,841 10.7.87 1,323,982
- -----------------------------------------------------------------
13 CANADA 509,179 14.5.86 1,252,629
- -----------------------------------------------------------------
14 USA 849,042 24.4.92 5,279,655
- -----------------------------------------------------------------
15 USA 810,077 19.12.91 5,240,781
CANADA 2,057,780 19.12.91 PENDING
- -----------------------------------------------------------------
16 USA 834,762 13.2.92 5,266,382
CANADA 2,060,997 11.2.92 PENDING
- -----------------------------------------------------------------
17 USA 871,325 21.4.92 5,296,444
- -----------------------------------------------------------------
19 USA 160,335 2.12.93 5,420,613
- -----------------------------------------------------------------
21 USA 925,016 5.8.92 5,326,620
- -----------------------------------------------------------------
22 USA 974,623 12.11.92 5,302,433
- -----------------------------------------------------------------
23 USA 974,622 12.11.92 PENDING
- -----------------------------------------------------------------
24 USA 035,317 22.3.93 5,330,963
- -----------------------------------------------------------------
25 USA 032,029 16.3.93 5,294,277
- -----------------------------------------------------------------
26 USA 261,049 14.6.94 5,438,598
- -----------------------------------------------------------------
- 31 -
=================================================================
PCL Pat. Application Filing Date
Family No. Countries No. of Patent No.
- -----------------------------------------------------------------
30 USA 234,534 28.4.94 5,480,703
- -----------------------------------------------------------------
31 USA 234,533 28.4.94 PENDING
- -----------------------------------------------------------------
32 (*5) USA 248,421 24.5.94 5,421,873
- -----------------------------------------------------------------
34 USA 424,306 26.4.95 PENDING
- -----------------------------------------------------------------
35 USA 308,598 19.9.94 5,480,704
- -----------------------------------------------------------------
36 (*6) USA 306,768 15.9.94 5,525,403
- -----------------------------------------------------------------
37 USA 448,379 6.6.95 PENDING
- -----------------------------------------------------------------
38 USA 331,287 28.10.94 PENDING
- -----------------------------------------------------------------
39 USA 346,095 29.11.94 PENDING
- -----------------------------------------------------------------
40 USA 356,652 15.12.94 PENDING
- -----------------------------------------------------------------
41 USA 359,416 20.12.94 PENDING
- -----------------------------------------------------------------
42 USA 381,209 31.1.95 PENDING
- -----------------------------------------------------------------
43 USA 410,045 24.3.95 PENDING
- -----------------------------------------------------------------
44 USA 505,470 21.7.95 PENDING
- -----------------------------------------------------------------
45 (*7) USA 514,121 11.8.95 PENDING
- -----------------------------------------------------------------
46 USA 519,488 25.8.95 PENDING
- -----------------------------------------------------------------
47 USA 520,486 29.8.95 PENDING
- -----------------------------------------------------------------
48 USA 530,956 20.9.95 PENDING
- -----------------------------------------------------------------
49 USA 611,450 5.3.96 PENDING
- -----------------------------------------------------------------
50 (*8) USA 615,400 14.3.96 PENDING
- -----------------------------------------------------------------
51 USA 633,294 16.4.96 PENDING
=============================================================
Co-applicant
*1 Nippon Telegraph & Telephone Corporation
*2 FUJI XEROX Co., Ltd.
*3 MITSUBISHI DENKI Kabushiki Kaisha
*4 Mr. S. Ohki
*5 NIPPON SEIRO Co., Ltd.
*8 Kabushiki Kaisha OIKE KAIHATSU KENKYUSHO
*7 NORITAKE CO., LIMITED
*8 NIPPON SODA Co., Ltd.
- 32 -