1
EXHIBIT 2.2
TRADEMARK LICENSE AGREEMENT
This Agreement is entered into as of August 10, 1997, by and between
DIGITAL EQUIPMENT CORPORATION, a Massachusetts corporation having its principal
offices at 111 Powdermill Road, Maynard, MA 01754 ("Digital") and GENICOM
CORPORATION, a company incorporated under the laws of the State of Delaware
and having a place of business at 14800 Conference Center Drive, Suite 400,
Westfields, Chantilly, VA 22021-3806(hereinafter, together with all subsidiary
and affiliate companies which it now or hereafter owns or controls, "Genicom").
This Agreement is effective as of the date Genicom provides a fully paid
certificate of insurance as proof of compliance with Article 6(c) below.
WHEREAS, since 1957 Digital has been conducting business under the trade
name and trademark "DIGITAL", including a design incorporating the word
"DIGITAL" as shown on attached Figure 1 (hereinafter "the DIGITAL Logo"); the
name "DIGITAL" and the DIGITAL Logo are well known throughout the world as
identifying Digital as the source of high-quality products and services,
including a full line of computer hardware and software products; and Digital
is the owner of numerous registrations for the trademark "DIGITAL" and the
DIGITAL Logo in the United States and throughout the rest of the world;
WHEREAS, Digital has long been advertising and selling printer products
under certain trademarks consisting of the prefix "DEC" combined with another
word as listed in the attached Schedule 1 (collectively "the DEC Trademarks");
the DEC Trademarks are well known throughout the world as identifying Digital
as the source of high-quality printer products; and Digital is the owner of
numerous registrations for the DEC Trademarks and numerous other DEC-formative
trademarks in the United States and throughout the rest of the world;
WHEREAS, Digital is also the owner of certain trademarks listed on the
attached Schedule 1, such trademarks being the subjects of trademark
registrations or applications for trademark registration that have been filed
with trademark authorities in certain countries;
WHEREAS, Digital is the owner of certain trademarks listed on the attached
Schedule 1, the rights of which have been acquired through common law; and
WHEREAS, Genicom desires to obtain a license to use the DIGITAL Logo, the
DEC Trademarks and other trademarks listed on the attached Schedule 1 in
connection with the sale of those products listed on attached Schedules 2
through 6, and in connection with other printing products approved by Digital;
NOW THEREFORE, in consideration of the foregoing and the mutual covenants,
promises and undertakings set forth below, and as required by Article VII,
sections 7.01(d) and 7.02(f) of a certain Asset Purchase Agreement dated August
10, 1997 (hereinafter the "Asset
2
Purchase Agreement") to which Digital and Genicom are parties, Digital and
Genicom hereby agree as follows:
Article 1 - DEFINITIONS
"PRINTERS" means those printer products listed in attached Schedule 2.
"SUPPLIES" means those printer supply products listed in attached Schedule 3.
"OPTIONS" means those printer option products listed in attached Schedule 4.
"SOFTWARE" means those printer software products listed in attached Schedule 5.
"LICENSED PRODUCTS" means Printers, Supplies, Options, and Software, and
printer guides, information sheets, and manuals related to Printers.
"FUTURE PRODUCTS" means printer products developed by Genicom under the
Cooperative, Marketing, Support and Development Agreement and designated to be
Digital Branded Products.
"NET RECEIPTS" means the gross receipts received by Genicom from Sales,
less (i) credits for refunds and returns, (ii) sales tax billed by Genicom to
its customers and required to be paid to the appropriate taxing authorities by
Genicom, and (iii) amounts paid by Genicom and billed through to Genicom's
customers for insurance, shipping and other similar charges.
Article 2 - LICENSE GRANT
a. Digital hereby grants to Genicom, and Genicom accepts, a
royalty-bearing, worldwide, nonexclusive, nontransferable license,
without the right to grant sub-licenses, to use the DIGITAL Logo and
the DEC Trademarks (hereinafter collectively "the Licensed
Trademarks") on currently-existing models or versions of the
Licensed Products and Future Products, solely in accordance with the
terms and conditions described in articles 3 through 8 below.
b. Digital further grants to Genicom, and Genicom accepts, a
royalty-free, worldwide, nonexclusive, nontransferable license,
without the right to grant sub-licenses, to use the DEC Trademarks,
in non-stylized form, in connection with the advertising, promotion,
and sale of the Licensed Products and Future Products.
3
Article 3 - CONDITIONS OF USE
a. The Licensed Trademarks shall be used in accordance with
Digital's policies and practices regarding trademark usage as
established from time to time by Digital and as provided in writing
to Genicom by Digital.
b. The DIGITAL Logo shall not be used by Genicom on advertising
material, stationary or other business identification materials,
promotional pieces, novelty items (e.g. hats, shirts, key chains,
etc.), or other collateral items, nor shall the DIGITAL Logo be
included in any ephemeral images generated by whatever means,
including but not limited to images displayed, transmitted, or
broadcast on the Internet or other computer networks. Genicom shall
however be permitted to use the Digital Logo on advertising and
marketing material, in any media, that promote nothing but the
Licensed Products or Future Products. Any such advertising and
marketing material will be submitted by Genicom to Digital for prior
written approval, which approval shall not be unreasonably withheld.
c. Genicom acknowledges the great value of the goodwill
associated with the Licensed Trademarks and further acknowledges
that Digital is the sole and exclusive owner of the Licensed
Trademarks and the goodwill associated therewith. Genicom agrees
that any and all use of the Licensed Trademarks shall inure to the
benefit of Digital. Genicom agrees that it will not, either during
or after the term of this Agreement, contest, attack or dispute, or
assist another party in contesting, attacking or disputing,
Digital's title or rights in the Licensed Trademarks or in any other
similar mark.
d. Genicom agrees not to adopt or use any name or mark
confusingly similar to the Licensed Trademarks without the written
consent of Digital. This Agreement does not grant any rights to use
the Licensed Trademarks on products or services other than Licensed
Products, other than as expressly provided herein.
e. The DIGITAL Logo shall only be used as currently used by
Digital on Licensed Products and printed materials packaged
therewith. For Future Products the DIGITAL Logo shall be used in
accordance with provisions of Article 3a above. Genicom may only
reproduce the DIGITAL Logo from existing plates and molds. In the
event that new plates or molds become necessary during the term of
this Agreement to replace broken or worn existing plates or molds,
such new plates or molds may be used to create the DIGITAL Logo only
upon prior inspection and approval by Digital.
Article 4 - QUALITY CONTROL
a. Genicom shall use its best efforts to ensure that all
products sold while using the Licensed Trademarks shall be of a high
standard and of such style, appearance and quality as to protect and
enhance the Licensed Trademarks and the goodwill associated
therewith. Quality standards in connection with the use of the
Licensed
4
Trademarks for (i) Licensed Products shall be at least equal to those
maintained by Digital at the time of the execution of this Agreement
and (ii) Future Products shall be as mutually established by Digital
and Genicom as provided in the Cooperative Marketing, Support and
Development Agreement dated as of the Closing between Digital and
Genicom.
Article 5 - RIGHT TO INSPECT
a. In order to enable Digital to maintain control over the
nature and quality of the products on which Genicom uses the Licensed
Trademarks, and for the protection of the public and the preservation
of Digital's rights, Genicom shall submit such products to Digital for
examination and approval upon Digital's request. Digital shall also
have the right to examine and approve the manner in which Genicom uses
the Licensed Trademarks to ensure proper usage of the Licensed
Trademarks by Genicom. Should Digital determine that (i) the quality
of the Licensed Products fails to meet Digital's quality standards
provided in Article 4(a) or (ii) the manner of Genicom's use of the
Licensed Trademarks fails to meet Digital's policies and practices
regarding trademark uses as provided in Article 3, Digital may provide
Genicom written notice specifying the failure about which it objects,
and Genicom shall forthwith cure the objection. Genicom acknowledges
that it shall also comply with all relevant provisions of the
Cooperative Marketing, Support and Development Agreement between
Genicom and Digital dated as of the Closing (the "Cooperative
Marketing, Support and Development Agreement"), including without
limitation Digital's internal development qualification and approval
processes as set forth in section 3(i) of the Cooperative Marketing,
Support and Development.
Article 6 - ENFORCEMENT AND DEFENSE OF LICENSED TRADEMARKS; INDEMNIFICATION;
PRODUCT LIABIITY INSURANCE
a. Digital will defend at its expense any claim, proceeding or
lawsuit brought against Genicom alleging that the authorized use by
Genicom of the Licensed Trademarks infringes the trademark or
service mark rights of a third party. Digital will pay all costs
and damages finally awarded or any settlement amounts, provided that
Genicom gives Digital prompt written notice of such suit, and
reasonable assistance. Any such assistance provided by Genicom shall
be at no cost to Genicom. Digital shall have sole authority to
defend and/or settle the suit if Digital so requests. This is
Digital's exclusive liability for such claims or lawsuits.
b. Genicom shall indemnify and hold Digital harmless from and
against any claims, lawsuits, judgments, losses, damages, costs and
attorney's fees at all levels of proceedings arising from an
unauthorized or negligent use by Genicom of the Licensed
5
Trademarks or the trademarks of a third party, or otherwise
arising from or related to products sold in connection with the
Licensed Trademarks.
c. To assure Digital of adequate protection Genicom shall obtain
and maintain in force throughout the term of this Agreement, at its
own expense, product liability insurance from an insurance company
acceptable to Digital, providing adequate protection (at least in
the amount of $10 million per occurrence with no deductible) for
Digital against any claims, lawsuits, judgments, losses, damages,
costs and attorney's fees at all levels of proceedings arising from
or related to any alleged defects in the products sold in connection
with the Licensed Trademarks.
d. Genicom shall inform Digital, within a reasonable time, of
any unauthorized use of the Licensed Trademarks which comes to the
attention of Genicom. Digital shall have the right, but not the
obligation, to take action against any unauthorized user. In the
event that Digital takes action against such unauthorized user,
Digital shall be entitled to all of the proceeds recovered in such
action or settlement.
Article 7 - TERM AND TERMINATION
a. Digital may terminate this Agreement with respect to all
Licensed Products and Future Products if Genicom neglects or fails
to perform or observe any of its obligations under Article 3 of this
Agreement and such condition is not remedied within thirty (30) days
after written notice of such neglect or failure is provided to
Genicom.
b. Should Digital determine that the quality of a Licensed
Product fails to meet Digital's quality standards provided in
Article 4(a) and such condition is not remedied within thirty (30)
days after written notice of such neglect or failure, or if such
default by its nature cannot be cured within thirty (30) days, then
if Genicom shall not immediately upon notice from Digital commence
curing such default and diligently pursue such remedy and cure such
default within sixty (60) days, Genicom's license under the Licensed
Trademarks shall terminate for said Licensed Product, and Genicom
shall immediately cease all use of the Licensed Trademarks with said
Licensed Product. Should Digital at its sole discretion determine
that Genicom's failure to meet Digital's quality standards provided
in Article 4(a) is Pervasive, Digital may terminate this Agreement
with respect to all Licensed Products and Future Products and
Genicom's license under the Licensed Trademarks shall terminate, and
Genicom shall immediately cease all use of the Licensed Trademarks.
For purposes of this Article 7(b), Pervasive shall mean that more
than 25% of the Licensed Products and Future Products shall fail to
meet Digital's quality standards provided in Article 4(a) and
Genicom has not cured such failure as provided in the prior
sentence.
c. This Agreement shall terminate immediately, without action
by if (i) Digital terminates the Cooperative Marketing, Support and
Development Agreement, or (ii)Genicom enters bankruptcy proceedings,
becomes insolvent, makes an assignment for the benefit of its
creditors, discontinues its business or is placed in receivership.
6
d. Upon termination of this Agreement, Genicom's license under
the Licensed Trademarks shall terminate, and Genicom shall
immediately cease all use of the Licensed Trademarks, except as
provided in the Cooperative Marketing, Support and Development
Agreement.
e. Upon termination of this Agreement under Article 7(a)
above, Genicom (i) shall retain in its possesion all remaining
inventory of Licensed Products and associated authorized promotional
materials bearing the Licensed Trademmarks, (ii) shall remove the
Licensed Trademarks from such inventory, and (iii) shall sell such
inventory under a different trademark or brand name. In furtherance
of the provision in the preceding sentence, Genicom shall allow
Digital the right to inspect such inventory prior to selling any
modified products and Genicom shall certify to Digital that it has
complied with the provisions of this paragraph.
Article 8 - REPRESENATIONS AND WARRANTIES; ALLOCATION OF LIABILITY
a. DIGITAL MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT
TO THE LICENSED TRADEMARKS HEREUNDER OTHER THAN THOSE
REPRESENTATIONS OR WARRANTIES CONTAINED IN THE ASSET PURCHASE
AGREEMENT. DIGITAL HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY EXPRESS OR IMPLIED
WARRANTLY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
DIGITAL'S ENTIRE LIABLITY AND GENICOM'S EXCLUSIVE REMEDY FOR ANY
INTELLECTUAL PROPERTY CLAIMS RELATING TO THE LICENSED TRADEMARKS ARE
AS EXPRESSLY SET FORTH IN ARTICLE 6 ABOVE.
Article 9 - ROYALTIES
a. Genicom shall pay to Digital a running royalty on sales, leases and other
commercial transfers of Printers and Options and future printers and
options which bear the Licensed Trademarks (collectively, "Sales"), such
royalties to be computed as indicated in Schedule Royalties of this
Agreement.
b. Running royalties shall be paid on a quarterly basis, within thirty (30)
days following the end of each calendar quarter during the term of this
Agreement and within thirty (30) days following the termination of this
Agreement. Each payment shall be accompanied by a report in a form which
is reasonably acceptable to Digital which sets forth the computation of
Net Receipts, Variable Margin and the running royalty on a product by
product basis.
c. Genicom shall keep true and accurate accounting records relating to all
Sales and shall maintain such records for at least two (2) years after the
termination of this Agreement. Genicom shall maintain all accounting
records, documents and other instruments relating to all Sales in such
detail as shall enable Digital to ascertain royalties due under this
Agreement and
7
compliance with the payment provisions thereof. Digital shall have the
right to inspect, and have inspected by its representative, the relevant
records of Genicom to verify the accuracy of the royalties paid or payable
to Digital. Digital shall give at least 2 days written notice to Genicom
before any inspection. All inspections must be made during the ordinary
business hours. If any inspection discloses a deficiency in the amount of
royalties paid by Genicom, then Genicom shall, within 10 days after the
date of determination of such discrepancy, pay Digital the amount of the
deficiency plus interest from the date the deficiency occurred at the rate
of 1.5% per thirty (30) day period or the maximum lawful rate, whichever is
less. If, as a result of Digital's inspection, it is determined that the
royalties paid for the period in question are less than ninety-five (95%)
of the correct amount, Genicom shall be liable for Digital's costs of
inspection.
d. Running royalties paid by Genicom to Digital on Sales are exclusive of
any sales, use, withholding or other taxes or other assessments in the
nature of taxes, however designated, on the Licensed Trademarks or its
license or use. Genicom shall be responsible for the payment of all such
taxes, with the sole exception of taxes based upon Digital's income.
Article 10 - GENERAL PROVISIONS
a. This Agreement and the rights granted may not be assigned or
otherwise transferred by Genicom.
b. This Agreement, the Cooperative Marketing, Support and
Development Agreement and the Asset Purchase Agreement constitutes
the entire agreement between the parties with respect to the subject
matter hereof, and supersedes all contemporaneous agreements both
written and oral between Digital and Genicom, and except as
otherwise expressly provided herein is not intended to confer upon
any other person any rights or remedies hereunder.
c. This Agreement is made and shall be construed and interpreted
under and in accordance with the law of the Commonwealth of
Massachusetts.
d. The parties are independent contractors with respect to the
subject matter of this Agreement and neither party is an employee,
partner, agent or joint venturer of the other by reason thereof.
Neither party shall have the right or authority to bind the other to
any agreement with a third party.
e. If any term, condition, or other provision of this Agreement
is determined to be invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other terms, conditions,
and provisions of this Agreement shall nevertheless remain in full
force and effect. With respect to any provision of this Agreement
determined to be invalid, illegal or incapable of enforcement,
Digital and Genicom shall negotiate in good faith to modify this
Agreement to effect their original intent as closely as possible in
a valid, legal, and enforceable manner.
8
f. All notices, communications or payments required or permitted
to be given hereunder shall be made in accordance with Article XI,
section 11.04 of the Asset Purchase Agreement.
g. No waiver of any breach of any provision of this Agreement
shall constitute a waiver of any prior, concurrent or subsequent
breach of the same or any other provisions hereof, and no waiver
shall be effective unless made in writing and signed by an
authorized representative of the waiving party.
h. Nothing in this Agreement, expressed or implied, is intended
or shall be construed to confer upon, or to give to, any person,
firm, corporation, or other entity other than Digital, Genicom, and
their respective successors and permitted assigns, any right or
remedy under or by reason of this Agreement or any term, covenant, or
condition hereof; and all the terms, covenants, conditions, promises,
and agreements contained in this Agreement shall be for the sole and
exclusive benefit of Digital, Genicom, and their respective
successors and permitted assigns.
i. Digital and Genicom each hereby acknowledges and agrees that
neither the representations and warranties nor the rights and
remedies of any party under the Asset Purchase Agreement shall be
deemed to be enlarged, modified, or altered in any way by this
Agreement.
9
DIGITAL EQUIPMENT CORP. GENICOM CORPORATION
By:/s/Harold D. Copperman By:/s/ Paul T. Winn
Name:Harold D. Copperman Name:Paul T. Winn
Title:Senior Vice President Title:President and Chief Executive Officer
and General Manager, Digital
Products Division
10
SCHEDULE 1
DEC Trademarks
A. Registered Trademarks
DEClaser
DECmultiJET
DECprint
RAPIDPRINT
B. Common-law or Unregistered Trademarks
DECcolorwriter
DECwriter
LA30N
LA30W
LA400
LA600
LA700
LG04+
LG08+
LG12+
LGL4+
LGL8+
LN14
LN17
LPS17
LPS32
LN24
B20
LNCO1
LNCO1+
11
SCHEDULE - ROYALTY
Genicom shall pay to Digital a running royalty on sales, leases and other
commercial transfers of Printers and Options and future printers and options
which bear the Licensed Trademarks (collectively, "Sales"), equal to (i) five
percent (5%) of Net Receipts received through the first anniversary of the
first Sale anywhere in the world and (ii) the Applicable Percentage of Net
Receipts received following the first anniversary and through the termination
of Genicom's obligation to pay royalties. "APPLICABLE PERCENTAGE" for the
purpose of computing royalties under the foregoing means: (i) 5% if the
Variable Margin is at least 28%; (ii) 4.3% if the Variable Margin is at least
26% but less than 28%; (iii) 3.6% if the Variable Margin is at least 24% but
less than 26%; (iv) 2.8% if the Variable Margin is at least 22% but less than
24%; (v) 2.0% if the Variable Margin is at least 20% but less than 22%; and
(vi) 1.5% if the Variable Margin is less than 20%."VARIABLE MARGIN" for the
purpose of computing royalties under the foregoing means: (i) Net Receipts
minus (-) an amount equal to 110% of Genicom's direct third party cost,
including license fees, of acquiring the Printers and Options and future
printers and options which were sold, leased or otherwise commercially
transferred or the direct cost of manufacturing such Printers and Options and
future printers and options incurred by Genicom, divided by (ii) Net Receipts.
12
Figure 1
The Digital Logo