View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 9, 2006
XEROX CORPORATION
-----------------
(Exact name of registrant as specified in its charter)
New York 1-4471 16-0468020
- -------------------------------------------------------------------------------
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification No.)
800 Long Ridge Road
P.O. BOX 1600
Stamford, Connecticut 06904-1600
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 968-3000
----------------------------
Not Applicable
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
- -------------------------------------------------------------------------------
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On March 9, 2006, we entered into a technology agreement with Fuji Xerox Co.,
Ltd. ("Fuji Xerox") that will become effective on April 1, 2006 (the "2006
Technology Agreement"). Fuji Xerox is an unconsolidated entity in which we
currently own 25% and Fuji Photo Film Co., Ltd. owns 75%. Pursuant to the 2006
Technology Agreement, we grant to Fuji Xerox (a) a license of our xerographic
intellectual property rights, and an option to receive a license of our
non-xerographic intellectual property rights, in each case, to manufacture and
market document processing products in Fuji Xerox's territory, as defined, and
(b) a license to use our trademarks to manufacture and market xerographic and
non-xerographic document processing products in Fuji Xerox's territory.
Pursuant to the 2006 Technology Agreement, Fuji Xerox grants to us (a) a
license of Fuji Xerox's xerographic intellectual property rights, and an option
to receive a license of Fuji Xerox's non-xerographic intellectual property
rights, in each case, to manufacture and market document processing products in
any territory that is not in Fuji Xerox's territory, and (b) a license to use
any Fuji Xerox trademarks in connection with document processing activities, as
defined, in any territory that is not in Fuji Xerox's territory.
The 2006 Technology Agreement provides that Fuji Xerox will pay us a royalty
that is based on Fuji Xerox's adjusted revenue, as described in the 2006
Technology Agreement. In general, all other existing agreements with respect to
intellectual property between the parties will remain in full force and effect.
Therefore, all technology licenses previously granted between the parties will
not be subject to the 2006 Technology Agreement but will generally remain
subject to the terms of any such prior arrangements. The only exception is that
the licenses previously granted under the 1999 Technology Agreement will be
converted into fully paid-up and royalty free licenses.
The initial term of the 2006 Technology Agreement is five years and would be
automatically extended for additional five-year terms unless a party gives
prior notice to the other of its intention to terminate the agreement at the
end of any given term.
The foregoing is a summary description of the terms of the 2006 Technology
Agreement and by its nature is incomplete, does not purport to describe in full
all provisions of the 2006 Technology Agreement and is qualified in all
respects by the redacted version of the 2006 Technology Agreement, a copy of
which has been filed as an exhibit to this Current Report and is incorporated
herein by reference.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 2006 Technology Agreement, effective as of April 1, 2006, by and
between Xerox Corporation and Fuji Xerox Co., Ltd.**
- -------------------------
** Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission under
Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The omitted
portions of this exhibit have been separately filed with the Securities and
Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 9, 2006
XEROX CORPORATION
By:/s/ Gary R. Kabureck
-------------------------------
Gary R. Kabureck
Vice President and Chief
Accounting Officer
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 2006 Technology Agreement, effective as of April 1, 2006,
by and between Xerox Corporation and Fuji Xerox Co., Ltd.**
- -----------------------------------
** Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission under
Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The omitted
portions of this exhibit have been separately filed with the Securities and
Exchange Commission.
Exhibit 99.1
[*** The confidential portions of this exhibit have been filed separately with
the Securities and Exchange Commission pursuant to a confidential treatment
request in accordance with Rule 24b-2 of the Securities and Exchange Act of
1934, as amended. The location of each omitted portion is indicated by a series
of three asterisks in brackets ("[***]").]
2006 Technology Agreement
THIS 2006 TECHNOLOGY AGREEMENT (this Agreement) by and between XEROX
CORPORATION ("Xerox"), a corporation organized under the laws of the State of
New York and resident in the United States of America with principal offices at
800 Long Ridge Road, Stamford, Connecticut, U.S.A., and FUJI XEROX CO., LTD.
("Fuji Xerox"), a corporation organized under the laws of Japan and resident in
Japan with principal offices at 2-17-22 Akasaka, Minato-ku, Tokyo 107-0052,
Japan (each referred to individually as "Party" and collectively as "Parties")
is made as of this 1st day of April, 2006 (the "Effective Date").
RECITALS
--------
WHEREAS, Xerox Corporation and Fuji Xerox Co., Ltd. are parties to a 1999
Technology Agreement with the effective date of March 1, 1999 as amended and
restated in March 2001 (Amended 1999TA),
WHEREAS, Xerox and Fuji Xerox Co., Ltd. have enjoyed a long lasting
relationship and now wish to reconfirm their intent to foster closer and more
effective working relations, enabled by a spirit of trust and cooperation, for
their greater mutual benefit, and,
1
WHEREAS, Xerox and Fuji Xerox desire to enter into an agreement in order to
reflect the parties' current assessment of the value of their respective
intellectual property portfolios and to set forth their rights and obligations
to each other, and
WHEREAS, Xerox and Fuji Xerox reached an agreement that the Amended 1999 TA
needs to be amended in order to reflect, among other things, changed business
conditions,
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and other good and valuable consideration, Xerox and Fuji Xerox, hereby agree
as follows:
PART A - DEFINITIONS
--------------------
A1. Territory:
[***]
A2. Fuji Xerox JV OPCO:
Fuji Xerox JV OPCO means Taiwan Fuji Xerox Corporation, P.T. Astra-Graphia and
other companies which the Parties may mutually agree from time to time.
A3. Subsidiary:
Subsidiary means any company or other legal entity as to which either Party
owns or controls, directly or indirectly, a majority of the outstanding voting
stock or has the right to elect a majority of the Board of Directors or other
body charged with the management thereof.
2
A4. Product:
A Product means any tangible or intangible DPA, as defined in Section A10, item
manufactured, sold, distributed, licensed, leased or otherwise disposed of by
Xerox, Fuji Xerox or their Subsidiaries or Fuji Xerox JV OPCOs including
hardware, software, components, parts, services and publications and consulting
and other services and solutions offered by a Party to its customers. For
purposes of this Agreement, intellectual property itself shall not be deemed a
Product.
A5. Xerography:
Xerography means the art of forming and utilizing an electrostatic charge
pattern on an insulating or photoconductive insulating surface. Examples of
Xerography are set forth on Annex A-1 to this Agreement. From time to time the
Parties may agree to add additional examples to Annex A-1.
A6. Xerographic:
Xerographic means pertaining to or used in Xerography.
A7. Xerographic Product(s):
Xerographic Product means all Products which are predominantly Xerographic. The
determination as to whether a Product is predominantly Xerographic shall be
made by the Parties on a consistent basis.
A8. Marking:
Marking means the use of any technology or set of component technologies to
apply and/or fix an impression or image of a document on a surface, and
intermediates thereof when used with the DPA, including but not limited to
Xerography. Examples of Marking are set forth on Annex A-1 to this Agreement.
From time to time the Parties may agree to add additional examples to Annex
A-1.
3
A9. Marking Product(s):
Marking Products means Products which are predominantly Marking. The
determination as to whether a Product is predominantly Marking shall be made by
the Parties on a consistent basis.
A10. Document Processing Activities or DPA:
Document Processing Activities or DPA means any activities, including
developing, manufacturing, marketing, servicing and financing document
processing products and solutions (hardware, services and software) by various
technologies (including without limitation Xerography).
A11. Patents:
Patents mean all patents, utility models, design rights or the like, and the
applications to granting authorities therefor.
A12. Copyrights:
Copyrights means rights in literary works; musical works (including any
accompanying words); pictorial, graphic and sculptural works; motion pictures
and other audiovisual works; sound recordings; and architectural works, and
compilations and derivative works of the same, as each of those terms is
defined and applied in Article 2 of the Berne Convention for the Protection of
Literary and Artistic Works (Paris Text 1971).
A13. Technical Information:
Technical Information means any knowledge or information, including but not
limited to, customer or employee training information, processes, formulae,
drawings, designs, recipes, Software as defined in Section A18 below, and other
technological information, whether or not subject to Patent or Copyright
protection, as well as accumulated techniques and experience.
4
A14. Fuji Xerox Revenue:
Fuji Xerox Revenue means the total consolidated revenue of Fuji Xerox
determined in accordance with generally accepted accounting principles in the
United States of America as reflected in the practice of independent certified
public accountants of international reputation; less any portion of such
revenues derived from sales to Japanese Original Equipment Manufacturers
(JOEMs), for use in the manufacture of products shipped directly or indirectly
outside the Territory as specified in the Memorandum of Understanding between
Xerox and Fuji Xerox dated as of October 1, 1991, as amended by and between the
Parties from time to time; and less sales to Xerox or any Xerox Subsidiary.
A15. Trademarks:
Trademarks means any trademark or service mark, whether registered or not and
the application therefor, including, but not limited to, trade names that
contain one or more Trademark(s) only to the extent and portion Trademark is
contained in such trade names.
A16. Trade Name:
Trade Name means any company name adopted and / or to be adopted by either
Party or its Subsidiaries or Fuji Xerox JV OPCOs.
A17. Quality Control Standards:
Quality Control Standards means: (i) Xerox's Corporate Identity Guidelines as
attached hereto as Annex A-2, (ii) industrial design and human interface
standards as adopted by each of the respective Parties as of the execution date
hereof, and (iii) environmental, health and safety standards as adopted by each
of the respective Parties, as of the execution date hereof (hereinafter,
"Quality Control Standards"). Xerox shall give Fuji Xerox notice of any changes
of Xerox's Corporate Identity Guidelines with a reasonable preparation period.
Each Party shall notify the other Party of any proposed material change to the
standards set
5
forth in (ii) and (iii) of this paragraph to enable discussion of and
concurrence on such change.
A18. Software:
Software means all software, including without limitation all object code,
source code and supporting or related documentation such as detailed program
specifications, patent applications and/or other descriptions which can be
readily used to reconstruct or write source code.
A19. Interpretation of Definitions:
Whenever Patents, Technical Information, Trademarks, Trade Names or Copyrights
are preceded by the name of any entity, such as in "Xerox Patents", such phrase
shall mean Patents, Technical Information, Trademarks, Trade Names or
Copyrights owned controlled, or licensable by such entity during the term of
this Agreement, and whenever such terms are preceded by a descriptive
identifier, such as in Xerographic Patents, such phrase shall mean Patents,
Technical Information, Trademarks, Trade Names or Copyrights which relate to
such descriptive identifier.
PART B - TECHNOLOGY PROVISIONS AND LICENSES
-------------------------------------------
B1. Xerox License to Fuji Xerox of Xerographic Technical Information,
Copyrights and Patents:
(a) Except as otherwise expressly provided in the Agreement, Xerox grants to
Fuji Xerox for the term of the Agreement a [***] license (a) under
Xerographic Patents, and Xerographic Technical Information of Xerox and
its Subsidiaries to manufacture, have made, use, lease, sell, distribute
or otherwise dispose of Products in the Territory and (b) under
Xerographic Copyrights of Xerox and its Subsidiaries to reproduce, modify,
prepare
6
derivative works (as that term is defined in Article 2 of the
Berne Convention) of, display, perform and distribute Products in the
Territory. No right or license is granted under this Agreement with
respect to any Patent, Technical Information or Copyright of Xerox and its
Subsidiaries outside the Territory. [***]
(b) Fuji Xerox shall have the right to grant sublicenses to its Subsidiaries
and Fuji Xerox JV OPCOs (to the extent that such Fuji Xerox JV OPCOs agree
to be bound by all other obligations of the Parties under this Agreement)
or any of them with respect to all licenses granted to it above.
(c) Fuji Xerox may grant sublicenses to any third party under the licenses
granted under Section B1 (a) with respect to Xerographic Patents,
Technical Information and/or Copyrights of Xerox with the prior written
approval of Xerox, which shall not be unreasonably withheld in the opinion
of Xerox. [***]
B2. Xerox License to Fuji Xerox of non-Xerographic Marking Technical
Information, Copyrights and Patents:
(a) During the term of the Agreement Xerox grants to Fuji Xerox a Reserved
Right of Option ("RRO") under which Fuji Xerox may elect to receive a
[***] right and license to (a) non-Xerographic Marking Patents and
Technical Information of Xerox and its Subsidiaries , with a right to
sublicense the same to its Subsidiaries and Fuji Xerox JV OPCO's (to the
extent that such Fuji Xerox JV OPCOs agree to be bound by all other
obligations of the Parties under this Agreement), to manufacture, have
made, use, lease, sell, distribute or otherwise dispose of Products in the
Territory and (b) non-Xerographic Marking Copyrights of Xerox and its
Subsidiaries, with a right to sublicense the same to its Subsidiaries and
Fuji Xerox JV OPCO's (to the extent that such Fuji Xerox JV OPCOs agree to
be bound by all other obligations of the Parties under this Agreement), to
reproduce,
7
modify, prepare derivative works of, display, perform and distribute
Products in the Territory. [***]. The RRO set forth in this Section shall
become available to Fuji Xerox, for any item or items of Patent,
Copyright, Technical Information, either upon Xerox offering the same to
Fuji Xerox by written notice, requesting that Fuji Xerox exercise or waive
its rights under this Section or upon Fuji Xerox notifying Xerox in
writing, requesting that Fuji Xerox be allowed to exercise its rights
under this Section. The Party receiving such notice shall respond to such
notice of offer within thirty (30) days of the receipt of same indicating
that (in the case of an offer by Xerox) Fuji Xerox elects to exercise or
waives its rights under this RRO or (in the case of a request for license
by Fuji Xerox) Xerox agrees to consider the requested license of rights to
Fuji Xerox under this RRO. Xerox and Fuji Xerox agree that each Party
shall negotiate in good faith, but the failure of the Parties to reach
agreement shall not be deemed a lack of good faith on the part of either
Party. If acceptable terms and conditions are not agreed in writing within
ninety (90) days (or such other time as the Parties may mutually agree in
writing) of receipt by Fuji Xerox of the offer by Xerox or (in the case of
a request for license by Fuji Xerox) receipt by Xerox of the request by
Fuji Xerox, Xerox may proceed with other transactions regarding such
non-Xerographic Marking Patents, Copyrights and Technical Information of
Xerox and its Subsidiaries. In addition to the foregoing, Fuji Xerox may
later request a right to receive a [***] right and license even after Fuji
Xerox has waived its rights under paragraph (a) above, but such license
shall be considered by Xerox only to the extent that Xerox can grant such
license without derogating from any other license or licenses to which
Xerox then is a party. For avoidance of doubt, the Parties agree that
Xerox may offer and grant non-exclusive licenses to non-Xerographic
Marking Patents, Copyrights and Technical Information to any third party
prior to offering the same to Fuji Xerox.
8
(b) Notwithstanding the foregoing, Fuji Xerox may request [***] license to
such non-Xerographic Marking Patents, Copyrights and Technical Information
of Xerox and its Subsidiaries, but Xerox shall be under no obligation to
accept such request nor to grant such license [***].
B3. Xerox License to Fuji Xerox of non-Xerographic non-Marking DPA Technical
Information, Copyrights and Patents:
(a) During the term of this Agreement Xerox grants to Fuji Xerox a Reserved
Right of Option ("RRO") under which Fuji Xerox may elect to receive a
[***] right and license to non-Xerographic, non-Marking, DPA Patents,
Copyrights and Technical Information of Xerox and its Subsidiaries, with a
right to sublicense the same to its Subsidiaries and Fuji Xerox JV OPCO's
(to the extent that such Fuji Xerox JV OPCOs agree to be bound by all
other obligations of the Parties under this Agreement) (a) with respect to
Patents and Technical Information, to manufacture, have made, use, lease,
sell, distribute or otherwise dispose of Products in the Territory and (b)
with respect to Copyrights, to reproduce, modify, prepare derivative works
of, display, perform and distribute Products in the Territory. [***]. The
RRO set forth in this Section shall become available to Fuji Xerox, for
any item or items of Patents, Copyrights or Technical Information, either
upon Xerox offering the same to Fuji Xerox by written notice, requesting
that Fuji Xerox exercise or waive its rights under this Section or upon
Fuji Xerox notifying Xerox in writing, requesting that Fuji Xerox be
allowed to exercise its rights under this Section. The Party receiving
such notice shall respond to such notice of offer within thirty (30) days
of the receipt of same indicating that (in the case of an offer by Xerox)
Fuji Xerox elects to exercise or waives its rights under this RRO or (in
the case of a request for license by Fuji Xerox) Xerox agrees to consider
the requested license of rights to Fuji Xerox under this RRO. Xerox and
Fuji Xerox agree that each Party shall negotiate in good faith, but the
failure of the Parties to reach agreement shall not be deemed a lack of
good faith on the part of
9
either Party. If acceptable terms and conditions are not agreed in writing
within ninety (90) days (or such other time as the Parties may mutually
agree in writing) of receipt by Fuji Xerox of the offer by Xerox or (in
the case of a request for license by Fuji Xerox) receipt by Xerox of the
request by Fuji Xerox, Xerox may proceed with other transactions regarding
such non-Xerographic non-Marking DPA Patents, Copyrights and Technical
Information of Xerox and its Subsidiaries. In addition to the foregoing,
Fuji Xerox may later request a right to receive a [***] right and license
even after Fuji Xerox has waived its rights under paragraph (a), above,
but such license shall be considered by Xerox only to the extent that
Xerox can grant such license without derogating from any other license or
licenses to which Xerox then is a party. For avoidance of doubt, the
Parties agree that Xerox may offer and grant non-exclusive licenses to
non-Xerographic non-Marking, DPA Patents, Copyrights and Technical
Information to any third party prior to offering the same to Fuji Xerox.
(b) Notwithstanding the foregoing, Fuji Xerox may request [***] license to
such non-Xerographic, non-Marking, DPA Patents, Copyrights and Technical
Information of Xerox and its Subsidiaries, but Xerox shall be under no
obligation to accept such request nor to grant such license [***].
B4. Fuji Xerox License to Xerox of Xerographic Technical Information,
Copyrights and Patents:
(a) Except as otherwise expressly provided in the Agreement, Fuji Xerox grants
to Xerox for the term of the Agreement a [***] license (a) under
Xerographic Patents, and Xerographic Technical Information of Fuji Xerox
and its Subsidiaries and Fuji Xerox JV OPCOs (to the extent licensable by
Fuji Xerox to Xerox) to manufacture, have made, use, lease, sell,
distribute or otherwise dispose of Products outside the Territory and (b)
under Xerographic Copyrights of Fuji Xerox and its Subsidiaries and Fuji
Xerox JV OPCOs (to the extent licensable by Fuji Xerox to Xerox) to
10
reproduce, modify, prepare derivative works (as that term is defined in
Article 2 of the Berne Convention) of, display, perform and distribute
Products outside the Territory. No right or license is granted under this
Agreement with respect to any Patent, Technical Information or Copyright
of Fuji Xerox and its Subsidiaries and Fuji Xerox JV OPCOs inside the
Territory. [***]
(b) Xerox shall have the right to grant sublicenses to its Subsidiaries or any
of them with respect to all licenses granted to it above.
(c) [***]
B5. Fuji Xerox License to Xerox of non-Xerographic Marking Technical
Information, Copyrights and Patents:
(a) During the term of the Agreement Fuji Xerox grants to Xerox a Reserved
Right of Option ("RRO") under which Xerox may elect to receive a [***]
right and license to (a) non-Xerographic Marking Patents and Technical
Information of Fuji Xerox and its Subsidiaries and Fuji Xerox JV OPCO's
(to the extent licensable by Fuji Xerox to Xerox), with a right to
sublicense the same to its Subsidiaries, to manufacture, have made, use,
lease, sell, distribute or otherwise dispose of Products outside of the
Territory and (b) non-Xerographic Marking Copyrights of Fuji Xerox and its
Subsidiaries and Fuji Xerox JV OPCO's (to the extent licensable by Fuji
Xerox to Xerox), with a right to sublicense the same to its Subsidiaries,
to reproduce, modify, prepare derivative works of, display, perform and
distribute Products outside the Territory. [***]. The RRO set forth in
this Section shall become available to Xerox, for any item or items of
Patent, Copyright or Technical Information, either upon Fuji Xerox
offering the same to Xerox by written notice, requesting that Xerox
exercise or waive its rights under this Section or upon Xerox notifying
Fuji Xerox in writing, requesting that Xerox be allowed to exercise its
rights under this Section.
11
The Party receiving such notice shall respond to such notice of offer
within thirty (30) days of the receipt of same indicating that (in the
case of an offer by Fuji Xerox) Xerox elects to exercise or waives its
rights under this RRO or (in the case of a request for license by Xerox)
Fuji Xerox agrees to consider the requested license of rights to Xerox
under this RRO. Xerox and Fuji Xerox agree that each Party shall negotiate
in good faith, but the failure of the Parties to reach agreement shall not
be deemed a lack of good faith on the part of either Party. If acceptable
terms and conditions are not agreed in writing within ninety (90) days (or
such other time as the Parties may mutually agree in writing) of receipt
by Xerox of the offer by Fuji Xerox or (in the case of a request for
license by Xerox) receipt by Fuji Xerox of the request by Xerox, Fuji
Xerox may proceed with other transactions regarding such non-Xerographic
Marking Patents, Copyrights and Technical Information of Fuji Xerox and
its Subsidiaries and Fuji Xerox JV OPCO's. In addition to the foregoing,
Xerox may later request a right to receive a [***] right and license even
after Xerox has waived its rights under paragraph (a), above, but such
license shall be considered by Fuji Xerox only to the extent that Fuji
Xerox can grant such license without derogating from any other license or
licenses to which Fuji Xerox then is a party. For avoidance of doubt, the
Parties agree that Fuji Xerox may offer and grant non-exclusive licenses
to non-Xerographic Marking Patents, Copyrights and Technical Information
to any third party prior to offering the same to Xerox.
(b) Notwithstanding the foregoing, Xerox may request [***] license to such
non-Xerographic Marking Patents, Copyrights and Technical Information of
Fuji Xerox and its Subsidiaries and Fuji Xerox JV OPCOs, but Fuji Xerox
shall be under no obligation to accept such request nor to grant such
license [***].
12
B6. Fuji Xerox License to Xerox of non-Xerographic non-Marking DPA Technical
Information, Copyrights and Patents:
(a) During the term of this agreement Fuji Xerox grants to Xerox a Reserved
Right of Option ("RRO") under which Xerox may elect to receive a [***]
right and license to non-Xerographic, non-Marking, DPA Patents, Copyrights
and Technical Information of Fuji Xerox and its Subsidiaries and Fuji
Xerox JV OPCO's (to the extent licensable by Fuji Xerox to Xerox), with a
right to sublicense the same to its Subsidiaries (a) with respect to
Patents and Technical Information, to manufacture, have made, use, lease,
sell, distribute or otherwise dispose of Products outside of the Territory
and (b) with respect to Copyrights, to reproduce, modify, prepare
derivative works of, display, perform and distribute Products outside of
the Territory. [***]. The RRO set forth in this Section shall become
available to Xerox, for any item or items of Patent, Copyright and
Technical Information, either upon Fuji Xerox offering the same to Xerox
by written notice, requesting that Xerox exercise or waive its rights
under this Section or upon Xerox notifying Fuji Xerox in writing,
requesting that Xerox be allowed to exercise its rights under this
Section. The Party receiving such notice shall respond to such notice of
offer within thirty (30) days of the receipt of same indicating that (in
the case of an offer by Fuji Xerox) Xerox elects to exercise or waives its
rights under this RRO or (in the case of a request for license by Xerox)
Fuji Xerox agrees to consider the requested license of rights to Xerox
under this RRO. Xerox and Fuji Xerox agree that each Party shall negotiate
in good faith, but the failure of the Parties to reach agreement shall not
be deemed a lack of good faith on the part of either Party. If acceptable
terms and conditions are not agreed in writing within ninety (90) days (or
such other time as the Parties may mutually agree in writing) of receipt
by Xerox of the offer by Fuji Xerox or (in the case of a request for
license by Xerox) receipt by Fuji Xerox of the request by Xerox, Fuji
Xerox may proceed with other transactions regarding such non-Xerographic,
non-Marking, DPA Patents,
13
Copyrights and Technical Information of Fuji Xerox and its Subsidiaries
and Fuji Xerox JV OPCO's. In addition to the foregoing, Xerox may later
request a right to receive a [***] right and license even after Xerox has
waived its rights under paragraph (a), above, but such license shall be
considered by Fuji Xerox only to the extent that Fuji Xerox can grant such
license without derogating from any other license or licenses to which
Fuji Xerox then is a party. For avoidance of doubt, the Parties agree that
Fuji Xerox may offer and grant non-exclusive licenses to non-Xerographic,
non-Marking, DPA Patents, Copyrights and Technical Information to any
third party prior to offering the same to Xerox.
(b) Notwithstanding the foregoing, Xerox may request [***] license to such
non-Xerographic, non-Marking, DPA Patents, Copyrights and Technical
Information of Fuji Xerox and its Subsidiaries and Fuji Xerox JV OPCOs,
but Fuji Xerox shall be under no obligation to accept such request nor to
grant such license [***].
B7. Fuji Xerox Rights to Xerox non-Xerographic Marking Products:
[***]. Nothing set forth in this Section shall be deemed to be an offer of a
license to any patents embodied in such non-Xerographic Marking Product, and
any such license shall be governed by other provisions of this Part B of this
Agreement. Fuji Xerox may request a non-exclusive right to distribute such
non-Xerographic Marking Product, [***], but only to the extent that such right
can be granted without derogating from any other agreements to which Xerox then
is a party.
B8. Xerox's Rights to Fuji Xerox non-Xerographic Marking Products:
[***]. Nothing set forth in this Section shall be deemed to be an offer of a
license to any patents embodied in such non-Xerographic Marking Product, and
any such license shall be governed by other provisions of this Part B of this
Agreement. Xerox may request a non-exclusive
14
right to distribute such non-Xerographic Marking Product, [***], but only to
the extent that such right can be granted without derogating from any other
agreements to which Fuji Xerox then is a party.
B9. Notice of Business Activities Outside Licensed Territory:
[***]
B10. Limitation On Sublicense Rights:
Except as expressly set forth in this Agreement, neither Party shall have the
right to sublicense with respect to all licenses granted a Party hereunder.
B11. Right of License to Third Party Patents, Copyrights and Technical
Information:
[***]
B12. Ownership and Administration of Intellectual Property:
For purposes of this Section, the term "Party" or "Parties" shall include a
Subsidiary of a Party if the context so indicates. All inventions, works of
authorship and Technical Information created by either or both Parties during
the term of the Agreement, together with all Patents and Copyrights obtained
with respect to such inventions, works of authorship and Technical Information
(collectively, the "Intellectual Property"), shall be owned and administered
solely by the Party who controls the principal creator(s); provided, however,
that if [***]. For avoidance of doubt, the terms and agreements set forth in
any Project agreement or statement of work (the "Project"), which shall be
required for all such joint efforts between the Parties, shall govern the
ownership and administration of Intellectual Property created thereunder to the
extent that such terms and conditions differ from those set forth in this
Section if such Project is agreed in writing between corporate officers of the
Parties. In no event shall ownership of any Project deliverables or other
Project outputs alter or affect the ownership of
15
any underlying or previously existing Patents, Technical Information or
Copyrights. [***]
B13. Rights in Software Derivative Works:
A Software derivative work that does not reflect or contain significant added
value (including, but not limited to a mere translation from one language to
another or a simple localization of a program from one market to another, etc.)
shall be owned by the owner(s) of the original work.
B14. Disclosure of Technical Information; Gatekeepers:
(a) Xerox and Fuji Xerox shall promptly and fully disclose or cause to be
disclosed to the other Party, on a continuing basis, all Xerographic
Technical Information as to which either Party has transferable rights;
provided that the use of such Technical Information shall be subject to
those provisions of Part D if, applicable.
(b) For purposes of this Section B14 (b) through (g), each Party shall
designate a gatekeeper, which gatekeeper shall serve in such capacity
until a replacement is notified to the other Party in writing. Such
gatekeeper shall be one or more individual employees of a Party designated
by such Party to receive information from the other Party in order to
ascertain if a more complete disclosure of Technical Information is
desired or needed by such Party or if such information is already licensed
under the Amended 1999TA.
(c) Xerox and Fuji Xerox further agree to disclose to the designated
gatekeeper of the other Party all non-Xerographic Marking Technical
Information not disclosed pursuant to the above paragraph on an ongoing
basis to enable the other Party to obtain its RRO [***] rights as set
forth above.
16
(d) Xerox and Fuji Xerox shall also disclose to the designated gatekeeper of
the other Party, on a continuing basis, such information concerning
non-Xerographic, non-Marking DPA Technical Information not disclosed
pursuant to the above sufficient to enable the other Party to ascertain if
such non-Xerographic, non-Marking DPA Technical Information is used or
embodied in any Marking Product with respect to which Marking Product the
Party shall be entitled to a [***] license as set forth above, or to
enable the other Party to obtain its RRO rights as set forth above.
(e) For purposes of this provision, Software shall be treated within the
category(ies) in which it is likely to be applied in accordance with the
definitions of Xerography, Marking and DPA set forth above.
(f) The Parties shall agree upon a process to govern disclosures made pursuant
to this Section B14 and shall, upon reaching such agreement, append such
process to this Agreement as Annex B-1.
(g) The Parties agree that disclosures between the gatekeepers of the Parties
shall be promptly made without reference to other matters set forth in
this Agreement.
B15. Training and Technical Assistance:
(a) The Parties agree that personnel in the full-time employment of Xerox or
Fuji Xerox will be permitted to visit certain facilities designated by the
other Party and/or become resident at such locations designated by the
other Party in order to receive disclosure of Xerographic Technical
Information. Any such visitation or residence shall not include, and any
visitor or resident shall not request access to facilities or portions
thereof, which are not directly involved in the creation of Xerographic
Technical Information or Xerographic Products.
Except as otherwise agreed, visitors and residents may not contact or
17
access vendors and suppliers of the hosting Party without consulting with
the hosting Party if the visitors and residents know that the hosting
Party has contracts with such vendors and suppliers and such contacts
require the disclosure by the vendor or supplier of the confidential
information of the hosting Party which is subject to an obligation of
confidentiality.
A Party may elect, at its option to grant the other Party, such other
assistance and training as the Party determines. All non-Xerographic
Technical Information shall only be disclosed to the designated gatekeeper
of the other Party and shall not be disclosed to residents unless such
residents are designated as one of gatekeepers. The numbers of such
visitors or residents, the objectives and purposes for such visits and the
schedules of visits shall be agreed in advance in order to minimize
interference with other business activities. All visitors and residents
shall act as employees of the employer Party and are not allowed to hold
themselves out as representatives or agents of the hosting Party. All
expenses incurred by such visitors or residents shall be paid by their
employer.
(b) In the event a Party sends personnel to the facilities of the other Party
to disclose its Technical Information or render other assistance and
training in response to a request from the other Party, the hosting Party
shall reimburse the providing Party with all reasonably incurred travel
and living expenses subject to standard limits imposed by the providing
Party.
B16. Third Party Agreements:
(a) [***]
(b) [***]
18
B17. Measures to Insure Confidentiality of Xerographic Technical Information:
(a) Subject to the provisions regarding Confidentiality set forth in Part E
below, Xerox and Fuji Xerox agree to adopt and implement security
procedures for classifying Xerographic Technical Information and for
determining the persons to whom the various classes of such Xerographic
Technical Information are authorized to be disclosed based upon their need
to know the same for purposes of performing their responsibilities on
behalf of the disclosing Party. All non-Xerographic Technical Information
shall be disclosed only through the designated gatekeeper(s) of the other
Party in accordance with the process which shall also be agreed between
the Parties.
(b) Xerox and Fuji Xerox agree to arrange for senior technical representatives
of the Parties to jointly review the above-mentioned security procedures
and the practices thereunder from time to time, and at least once each
calendar year, to determine what, if any, changes are appropriate.
(c) The Parties will ensure that each employee of Xerox, Fuji Xerox and their
Subsidiaries has executed a confidentiality agreement satisfactory to the
other Party before such employee is given access to Technical Information
covered by an obligation of confidentiality, but such access shall be
limited as otherwise provided in the Agreement.
(d) The Parties agree to take all necessary action, including but not limited
to court proceedings, to compel compliance with the provisions of this
Section B17 and the written agreements to be obtained pursuant to Section
B17(c) above.
19
(e) The provisions of this Section B17 shall also apply to all Technical
Information exchanged by and between a Party and the Subsidiaries of the
other Party, and between Subsidiaries of the Parties.
(f) The Parties agree to review the processes and procedures established under
this Section upon the request from either Party eighteen (18) months from
the Effective Date.
B18. Patent Applications, Maintenance and Abandonment:
Each Party shall, without cost to the other Party, pay all maintenance and
renewal fees necessary to keep its issued Xerographic Patents (in the Territory
in the case of Xerox ownership, and outside the Territory in the case of Fuji
Xerox ownership) in force, provided that the owning Party may abandon any
issued Xerographic Patent in the respective geography with the prior written
consent of the other Party, which consent shall not be unreasonably withheld,
conditioned or delayed. Either Party may abandon any application for a Patent
prior to the issuance of such Patent for any reason.
B19. Filing, Maintenance and Defense of Jointly Owned Patents:
For those inventions to be owned and administered jointly worldwide by Fuji
Xerox and Xerox in accordance with Section B12, the following patent
application filing procedures will apply:
(a) Promptly upon one Party's decision to initiate a patent filing, the
Parties shall establish a joint worldwide patent filing program.
(b) The Party in whose territory an invention is made shall be responsible for
the preparation and filing of all domestic and foreign patent
applications. A copy of the initial patent application shall be provided
to the other Party. If the initial application is filed in Japan by Fuji
Xerox, a translation into English thereof, shall be provided to Xerox.
20
(c) All preparation, filing and maintenance costs will be shared equally by
the Parties.
(d) The preparing Party shall promptly forward copies of prosecution documents
to the other Party.
(e) In the event that the Parties have not agreed upon the scope of a patent
filing program, the Party desiring to file a patent application in a given
country may do so at its own expense. The patent applications so filed
shall continue to be jointly owned.
(f) If one Party chooses not to file a Jointly Owned Patent application in any
country and, in lieu thereof, desires to publish the subject matter of the
invention, the other Party will be given an opportunity (not less than
forty-five (45) days) to file a patent application, at its expense in any
country, and shall be given the full cooperation of the inventors of the
other Party. The patent applications so filed shall continue to be jointly
owned.
(g) Once a patent application has been filed in any country, either Party
shall be free to independently publish the subject matter of the
invention. However, the Party desiring to publish shall notify the other
Party prior to publication in order to give the other Party an opportunity
to present compelling reasons for not publishing.
B20. Enforcement Rights for Patents:
(a) Fuji Xerox shall have the exclusive right to enforce: (i) [***]; (ii)
[***]; and (iii) all of its non-Xerographic Patents which are issued
outside the Territory.
(b) Xerox shall have the exclusive right to enforce: (i) [***]; (ii) [***];
and (iii) all of its non-Xerographic Patents which are issued inside the
Territory.
21
(c) In the event that Fuji Xerox brings a lawsuit [***] to enforce a [***]
Patent as to which it has exclusive enforcement rights under this Section,
or Xerox brings a lawsuit [***] to enforce a [***] Patent as to which it
has exclusive enforcement rights under this Section, the Party bringing
the lawsuit shall be: (i) solely responsible for managing it, including
retaining and supervising outside counsel, and for paying the on-going
litigation costs and expenses; and (ii) entitled to retain all damages,
costs and expenses awarded against the defendant for infringement of the
Patent.
(d) In the event a Party commences an enforcement action as permitted in this
Section B20, the other Party agrees to offer all reasonable cooperation
and assistance requested by such enforcing Party, all at the enforcing
Party's cost and expense.
B21. Enforcement Rights for non-Xerographic Patents:
(a) In the event that a non-Xerographic Patent of Fuji Xerox which is issued
outside the Territory and which is licensed to Xerox, or a non-Xerographic
Patent of Xerox which is issued inside the Territory and which is licensed
to Fuji Xerox, is infringed by a third party, the Parties shall discuss
the situation and decide whether or not to bring a lawsuit against the
third party and, if so, which Party shall do so. If a Party other than the
Patent owner is to bring a lawsuit, then the Party owning the Patent shall
either assign or exclusively license it to the other Party in order that
it may do so. Unless otherwise agreed by the Parties, the Party bringing
the lawsuit shall be: (i) solely responsible for managing it, including
retaining and supervising outside counsel, and for paying the on-going
litigation costs and expenses; and (ii) entitled to retain all damages,
costs and expenses awarded against the defendant for infringement of the
Patent.
22
(b) Insofar as it is necessary to join a Party as an indispensable Party in an
enforcement action, the Parties agree to cooperate in such enforcement
action and to participate in such joinder. In addition, the Parties shall
share costs, expenses and any damage awards in a manner to be agreed upon
on a case-by-case basis.
PART C - BRAND PROVISIONS, ROYALTIES AND LICENSES
-------------------------------------------------
C1. Xerox Trademark License to Fuji Xerox:
(a) Subject to the terms and conditions of this Agreement, Xerox hereby grants
to Fuji Xerox (i) [***] license to use Xerox Trademarks to manufacture,
have made, use, lease, sell, distribute or otherwise dispose of
Xerographic Products in the Territory; (ii) [***] license to use Xerox
Trademarks to manufacture, have made, use, lease, sell, distribute or
otherwise dispose of all other Products in the Territory; and (iii) a
limited right, on a case by case basis and upon the prior written
permission of Xerox, to use the "Fuji Xerox Co., Ltd." name on the
nameplate attached to certain products sold outside of the Territory as
set forth in Annex C-1. Fuji Xerox acknowledges and understands that the
use of the "Fuji Xerox" Trademark and Trade Name outside of the Territory
for advertisement or solicitation purposes is outside of this grant and is
strictly prohibited.
(b) Notwithstanding the above, Xerox reserves all rights with respect to Xerox
Trademarks not expressly licensed to Fuji Xerox hereunder, including but
not limited to:
(i) the right to use Xerox Trademarks inside the Territory in connection
with any goods and/or services other than the right to manufacture,
have made, use, lease, sell, distribute or otherwise dispose of
Xerographic Products. However, Xerox shall consult with Fuji Xerox
before using the word "XEROX" inside the Territory
23
in order to understand any concerns that Fuji Xerox may have regarding
the proposed use; and
(ii) the right to license the Xerox Trademarks to others inside the
Territory in connection with any goods and/or services other than
Products; and
(iii) the right to source Xerographic Products bearing Xerox Trademarks in
the Territory for distribution exclusively outside the Territory ,
pursuant to Section D4 of this Agreement.
C2. Fuji Xerox Trademark License to Xerox:
Fuji Xerox hereby agrees to grant to Xerox, upon negotiation of the terms and
conditions for same, a [***] license to use any Fuji Xerox Trademarks solely in
connection with DPA outside the Territory on a case by case basis.
C3. Brand Non-performance:
If, in the reasonable opinion of Xerox, Fuji Xerox fails to use its best
efforts to create, expand and maintain a profitable market for any branded
Xerographic Product in any country in the Territory, the license granted in
Section C1 shall, at Xerox's option, exercisable after consultations between
the Parties and an opportunity of Fuji Xerox to cure such failure within six
(6) months after notice of such failure from Xerox, become [***] only with
respect to such branded Xerographic Product or Products in such country or
countries [***].
C4. Trademark Sublicense Rights:
(a) Subject to the provisions of this Agreement, Fuji Xerox shall have the
right to grant sublicenses of Xerox Trademarks to its Subsidiaries and
Fuji Xerox JV OPCOs and the Subsidiaries of any of them. All such
sublicenses must be in substantial accordance with the terms and
conditions contained in this Part C of this Agreement. Any such
sublicensing shall not relieve Fuji Xerox of its obligations hereunder.
24
No right or license is granted under this Agreement in respect of any Xerox
Trademark outside of the Territory.
(b) Except as expressly provided in this Section, Fuji Xerox has no right to
grant sublicenses of Xerox Trademarks to any other entity without the
express written approval of Xerox; except that, [***].
C5. Business Use of Xerox Trade Names:
Fuji Xerox and its Subsidiaries and such other companies as agreed in writing
(except for certain small "start-up" companies to be mutually agreed to in
writing) shall trade under the trade names that include the term "Xerox" in the
Territory except where otherwise agreed between the Parties and except in the
case of P.T. Astra-Graphia in Indonesia.
C6. Business Use of Xerox Trademarks:
(a) Trademarks for Products within DPA.
(i) Use of XEROX and FUJI XEROX Trademarks.
All Products manufactured, made, used, sold, leased, distributed or
otherwise disposed of within DPA inside the Territory by Fuji Xerox,
its Subsidiaries and Fuji Xerox JV OPCOs shall prominently bear the
"XEROX" or "FUJI XEROX" trademark. Use of such Trademarks shall be
subject to Xerox's review and approval and be registered (where
registerable) in the name of Xerox Corporation or Xerox Limited in
the Territory.
(ii) Use of Product Names for Product to be marketed only in the Territory
within Office Segment.
For purposes of this paragraph, Products within the Office Segment
("Office Products") shall be agreed to separately between the
Parties. Provided, however, Office Products shall generally include
25
products designed to be marketed and used in a business office
setting. [***]
(iii) Use of Product Names within Production Group and Global Services
Segments.
For purposes of this paragraph, Products within the Production Group
and Global Services Segments shall be agreed to separately between
the Parties.
All Products manufactured, made, used, sold, leased, distributed or
otherwise disposed of within DPA inside the Territory shall bear
Xerox Trademarks as product names, be approved by Xerox and
registered (where registerable) in the name of Xerox Corporation or
Xerox Limited in the Territory at Xerox's cost; provided that Xerox
Corporation or Xerox Limited shall effectively manage that process.
(iv) Fuji Xerox may, from time to time, use other trademarks with respect
to DPA; provided however, all new names must be approved in advance
by Xerox and such new names shall be registered (where registerable)
in the name of Xerox Corporation or Xerox Ltd. except as provided in
Section C6(a)(ii) above.
(v) As of the Effective Date hereof, the Trademarks issued within the
Territory shall be owned by the Parties as set forth on Annex C-2 to
this Agreement and the Parties shall take all actions necessary to
effect such ownership.
(b) Trademarks for Products Outside DPA.
For products manufactured, made, used, sold, leased, distributed or
otherwise disposed of outside of DPA in the Territory, Fuji Xerox may not
use any Xerox Trademark, unless Fuji Xerox obtains prior written approval
from Xerox for such use of the Xerox Trademark on a product-by-product
basis.
26
(c) Fuji Xerox shall not use Xerox Trademarks in any manner that would, in
Xerox's reasonable opinion, be considered to adversely affect Xerox or
Xerox Trademarks.
(d) Xerox agrees to give assistance to Fuji Xerox at the expense of Fuji Xerox
to enable Fuji Xerox to register the licenses granted pursuant to this
Agreement and the right to use Xerox Trademarks as provided herein at the
trademark bureau in the Territory.
C7. Fuji Xerox Rights to Xerox Trademarks Upon Expiration or Termination:
(a) In the event Xerox opts not to renew this Agreement, [***].
(b) In the event Fuji Xerox opts not to renew this Agreement, [***].
(c) Fuji Xerox acknowledges that its failure to cease use of the Xerox
Trademarks in accordance with the provisions of this Agreement after
termination thereof will result in immediate and irreparable harm to Xerox
for which there is no adequate remedy at law. Notwithstanding the
provisions of E29 below, Xerox shall be entitled to bring an action or
proceeding for specific performance, injunctive relief and/or other
equitable relief to compel Fuji Xerox to discontinue the infringement of
the Xerox Trademarks, to cease and desist all unauthorized use of the
Xerox Trademarks, to take all affirmative acts necessary to ensure
discontinuance of use of the Xerox Trademarks after the expiration or
termination of this Agreement, and to obtain such other or different
relief as may be necessary and proper.
(d) Unless otherwise expressly provided herein, upon any other termination of
this Agreement all licenses under this Part C will survive for a period of
27
thirty (30) days from the date of termination, during which period the
terms and conditions of this Agreement will apply.
C8. Rights of Inspection Following Termination:
(a) At the end of the post-termination use period (if any) or expiration date,
each Party shall be allowed reasonable access to the other's premises
(including each Party's Subsidiaries and in the case of Fuji Xerox, Fuji
Xerox JV OPCOs) to observe and inspect to insure that either Party's
Trademarks are no longer in use. Continued use of Trademarks of the other
Party beyond the above-specified removal periods shall constitute
infringement of Xerox Trademarks by Fuji Xerox and Fuji Xerox Trademarks
by Xerox respectively and shall give rise to remedy of specific
performance for the owner of respective Trademarks as set forth above.
Each Party shall not adopt any trade name, trademarks, or service marks
that are confusingly similar to the Trademarks of the other Party in the
event of termination or expiration of this Agreement.
(b) Fuji Xerox may not, after the end of the post termination or expiration
use period, use Xerox Trademarks in any manner, including without
limitation, indicating that Fuji Xerox's products were formerly marketed
under the "Xerox" or "Fuji Xerox" trade name and/or trademark; provided,
however, that Fuji Xerox may refer to the fact that the company name was
previously Fuji Xerox Co., Ltd. in an editorial manner.
C9. Trademark Indemnification:
(a) Fuji Xerox shall, at its own expense, indemnify and hold harmless Xerox,
its Subsidiaries, affiliates or assignees, and their directors, officers,
employees and agents and defend any action brought against same with
respect to any claim, demand, cause of action, debt or liability,
including attorneys' fees, incurred or sustained by a third party, whether
for personal injury or otherwise, because of (i) the manufacture,
marketing, use or sale of the Products bearing Xerox Trademarks by Fuji
28
Xerox, any of its Subsidiaries and/or Fuji Xerox JV OPCOs, (ii) the breach
by Fuji Xerox of its obligations under this Part C, or (iii) any suit,
claim or proceeding brought against Xerox and/or any of its Subsidiaries
by a third party alleging that a Fuji Xerox Trademark, if so licensed to
Xerox under Section C2 infringes a trademark owned by such third party in
any country; provided that Fuji Xerox is promptly notified, given the
assistance required, and permitted to direct the defense.
(b) Xerox shall, at its own expense, indemnify and hold harmless Fuji Xerox,
its Subsidiaries and/or Fuji Xerox JV OPCOs, affiliates or assignees, and
their directors, officers, employees and agents and defend any action,
debt or liability, including attorney's fees incurred or sustained by a
third party because of any suit, claim or proceeding brought against Fuji
Xerox, any of its Subsidiaries and/or Fuji Xerox JV OPCOs by a third party
alleging that a Xerox Trademark licensed to Fuji Xerox under Part C
infringes a trademark owned by such third party in any country; provided
that Xerox is promptly notified, given the assistance required, and
permitted to direct the defense.
C10. Trademark Ownership:
(a) Fuji Xerox acknowledges that the Xerox Trademarks are the exclusive and
sole property of Xerox regardless of the name of the current registrant of
such Xerox Trademark. Fuji Xerox agrees that any and all rights that might
be acquired by its use of Xerox Trademarks shall inure to the sole benefit
of Xerox. Fuji Xerox agrees to execute all papers reasonably requested by
Xerox to affect further registration of, maintenance and renewal of Xerox
Trademarks, where applicable.
(b) Fuji Xerox shall not at any time apply for registration of any copyright,
design, patent or trademark or other designation that would affect the
29
ownership of Xerox Trademarks , nor file any document with any
governmental authority or take any action which would adversely affect the
ownership of Xerox Trademarks or aid or abet anyone else in doing so.
(c) Fuji Xerox shall at no time, whether during the Term or thereafter adopt
and/or use any trademark, company name or other designation which is
confusingly or colorably similar to Xerox Trademarks. If any application
for registration is, or has been filed in the Territory or any other
country which relates to any name or mark which, in the reasonable opinion
of Xerox, is confusingly similar, deceptive or misleading with respect to
any Xerox Trademark shall immediately abandon any such application or
registration or, at Xerox's sole discretion, assign it to Xerox. Fuji
Xerox shall reimburse Xerox for all the costs and expenses of any
opposition, cancellation or related legal proceedings, including
attorney's fees, brought successfully by the Xerox or its authorized
representative, in connection with any such registration or application.
C11. Unlicensed Sales by Third Party:
Except as expressly provided herein, neither Party shall sell any Products
bearing the other Party's Trademarks outside the Territory in the case of Fuji
Xerox or inside the Territory in the case of Xerox. If either Party learns of
any such sales, it shall use reasonable efforts to obtain possession of said
Products and to prevent such sales in the future, including refusing to sell
Products bearing the other Party's Trademarks to the persons or entities
responsible for the resale outside the Territory or within the Territory as the
case may be. To the fullest extent permitted by applicable law, either Party
shall promptly notify the other of such sales, giving the particulars thereof
and providing necessary information and assistance. Either Party shall be
reimbursed for its out of pocket expenses.
30
C12. Quality Control Standards:
(a) Fuji Xerox shall manufacture, sell, lease, use, distribute or otherwise
dispose of Products and all related packaging and promotional materials in
compliance with the Quality Control Standards. Xerox branded Products
offered by Fuji Xerox shall be of no less quality than the quality of
goods, services and the promotional and packaging materials related
thereto offered by Fuji Xerox, as of the execution date hereof.
(b) The Parties recognize the quality of Products sold under the Xerox and
Fuji Xerox Trademarks historically in Fuji Xerox Territory and will
cooperate to maintain such appropriate standards of quality.
C13. Quality Control Inspection During Term:
Xerox shall be allowed reasonable access to the Fuji Xerox or any of its
Subsidiaries' and Fuji Xerox JV OPCOs' or vendors' or suppliers' premises upon
reasonable advanced notice and during normal business hours solely for the
purpose of observing and inspecting to insure that Fuji Xerox is in compliance
with the above requirements and that Xerox Trademarks are being used in
accordance with the requirements of this Part C. Fuji Xerox agrees to cooperate
with Xerox in order to enable such inspection to be conducted. In the event
such inspection discloses any material failure by Fuji Xerox to comply with the
obligations set forth in this Part C, Fuji Xerox shall immediately remedy such
non-compliance. The failure of Fuji Xerox to do so within ninety (90) days or
such other time as the Parties may mutually agree in writing shall constitute a
material breach of this Agreement, and particularly Part C hereof.
C14. Enforcement of Xerox Trademarks in the Territory:
In the event Fuji Xerox learns of any infringement, threatened infringement or
passing-off of Xerox Trademarks in the Territory or that any third party
alleges or claims that any Xerox Trademark is liable to cause deception or
confusion to the
31
public in the Territory, or is liable to dilute or infringe any right in the
Territory, Fuji Xerox shall forthwith notify Xerox and Fuji Xerox and Xerox
shall agree to cooperate in addressing said issue.
PART D - PRODUCT PROVISIONS
---------------------------
D1. Prices and Terms Applicable to Supply Products; Volume Building:
(a) [***], it is anticipated that one Party may, from time to time, agree to
purchase or license Products and parts and components thereof from the
other Party. The prices to be paid for such Products will be mutually
agreed between the Parties. [***]. For the purpose of this Part D, Products
shall specifically exclude any DPA commodity item which does not include
or embody any intellectual property of the Parties and which the
non-purchasing Party does not manufacture (including have made) and sell.
Subject to Section E33, the Parties agree that they may, by mutual
agreement, adopt other terms and conditions governing specific
transactions and/or markets or other segments and such terms, once agreed
in writing, shall take precedence over this Part D to the extent there is
a conflict or discrepancy between them.
(b) [***]
(c) [***]
(d) With respect to volume building in the product space outside the
Territory, commonly known as Segments 1 and 2 (as understood on the date
of this Agreement), the Parties acknowledge the Charter of Xerox
International Partners (XIP), a California general partnership and the
1991 General Partnership Agreement relating to XIP, as amended from time
to time as its governing framework. The Parties further acknowledge that
realization of volume building in the product space commonly known as
Segments 1
32
and 2 outside the Territory may from time to time require separate
agreement between the Parties.
D2. Manufacturing License Fee:
If either Party manufactures any Product (other than Consumables, where
Consumables are toner, fuser, ink or photoreceptor, or constituent parts
thereof, including Customer Replaceable Unit ("CRU") thereof) which the Parties
agree employs a significant design of the other Party, the manufacturing Party
shall pay an agreed compensation (if any) to the other Party in the form of a
manufacturing license fee ("MLF") or as otherwise may be agreed from time to
time; provided, however, there shall be no compensation for the use of
Technical Information, unless such Technical Information is a significant
design of the other Party. In accordance with Section B14 of the Agreement,
under no circumstances will the prompt and full disclosure of Technical
Information be interrupted.
D3. Software License Fee:
If either Party elects to utilize, sublicense or distribute Software of the
other Party in a Product, a reasonable Software License Fee ("SLF") or other
form of mutually agreed compensation shall be negotiated with, and paid to, the
Party from whom such Software was acquired.
D4. Purchases from Third Party Vendors:
(a) The purchase by one Party of a Product manufactured by a third party
vendor in the territory of the other Party will be governed by the
conditions described in this Part D. Nothing in this Part D shall be
construed as altering the obligations of the Parties with reference to the
Joint Enterprise Contract ("the 2001 JEC") as described in Section E28 of
this Agreement.
(b) Any time a buying Party seeks to purchase a Product from a supplier in the
other Party's territory, the buying Party shall first enter into
discussions with the other Party to determine whether the other Party is
capable of
33
supplying the Product to be purchased. Thus, for sourcing Product in each
other's territory, each Party shall be deemed to be the "Preferred
Supplier" of the other. If the buying Party determines that the other
Party is capable of fulfilling its requirements, the buying Party shall
proceed to negotiate in good faith terms and conditions for the purchase
of the desired Product from the other Party. If however the buying Party
determines in its sole discretion that the other Party is not yet capable
of supplying the desired Product within reasonably required quality, cost
and delivery targets, the buying Party shall so inform the other Party and
may thereupon enter into discussions with alternative, third party
vendors. In such event, the buying Party agrees to continue consultations
with the other Party concerning: the strategic implications of the
purchase, such as advice/concern expressed by the other Party; the
possibility of the other Party supplying the desired Product in the
future; or the possibility of the other Party sourcing the same Product
from such alternative third party vendor for the other Party's own use.
The buying Party may invite the other Party to join in discussions with
potential suppliers but there is no requirement that the buying Party does
so.
(c) Once a decision has been made to purchase a Product from a third party
vendor in the other Party's territory, the following conditions will
apply:
(i) If no technology of either Party is to be transferred or licensed to
the third party vendor, the buying Party is not required to seek or
obtain approval from the other Party. No compensation shall be paid
by the buying Party to the other Party for any purchases the buying
Party makes from third party vendors in the other Party's territory.
(ii) If the Xerographic technology of the buying Party is to be
transferred or licensed to the third party vendor in the other
Party's territory, then:
34
(1) If the buying Party agrees to permit the third party vendor to
also sell a Product incorporating the Xerographic technology in
the other Party's territory, the other Party's approval shall be
required before such purchases can be made in the other Party's
territory. Compensation shall be provided by the buying Party to
the other Party for such sales the third party vendor makes in
the other Party's territory.
(2) If no sales by the third party vendor in the other Party's
territory are contemplated, the buying Party shall advise and
consult with the other Party and seek approval, which shall not
be unreasonably withheld, conditioned or delayed. No
compensation will be paid by the buying Party to the other Party
for such purchases the buying Party makes from third party
vendors in the other Party's territory.
(iii) If the non-Xerographic technology of the buying Party is to be
transferred or licensed to a third party vendor in the other Party's
territory, then the buying Party is not required to seek or obtain
approval from the other Party. No compensation shall be paid by the
buying Party for any purchases the buying Party makes from third
party vendors in the other Party's territory.
(iv) If a buying Party purchases a Product from a third party vendor in
the other Party's territory and transfers or licenses to such third
party vendor either Xerographic or non-Xerographic technology of the
other Party, the following rules will govern:
(1) If the third party vendor will be free to sell the Product in
the other Party's territory, the buying Party shall obtain prior
approval from the other Party. Compensation shall be provided by
the buying Party to the other Party based upon the reasonable
impact upon the other Party's marketing activity in its
territory.
35
(2) If the third party vendor is not free to sell the Product in the
other Party's territory, the buying Party will consult with and
seek approval of the purchases from the other Party, which shall
not be unreasonably withheld, conditioned or delayed.
Compensation shall be provided by the buying Party to the other
Party based upon a reasonable projection of the licensing value
of that technology outside the other Party's territory with
respect to contemplated sales of the Product by the third party
vendor. No compensation shall be paid by the buying Party for
its own sales in its own territory
(v) In the above cases, the other Party may also seek to acquire the same
Product from the third party vendor and both Parties are encouraged
to coordinate their purchasing activities so as to achieve the most
favorable conditions of purchase for the Parties.
(vi) Where the approval of a Party is required under this Section D4, such
approval or denial of approval shall be given within thirty (30) days
from the request for same. In the event a Party fails to grant or
deny such approval within such period, approval shall be deemed to
have been given by such Party.
(vii) Subject to Section E33, the Parties may agree to a simplified
notification or blanket notification process to expedite procurement
of items, including whole Products, in each other's territories.
(viii) For purposes of clarification, in the event a vendor sells, leases
or otherwise disposes of a Product containing the design or Technical
Information of the other Party in the other Party's territory, there
shall be a single payment which takes into account all applicable
36
fees under this Part D (including, but not limited to, those
compensation items set forth in Sections D2 and D3.)
D5. Factors To Be Considered When Compensation Payable:
The following factors are considered to be relevant elements to take into
consideration, in accordance with understandings described above, in
determining total compensation levels to be paid by a buying Party to the other
Party where negotiated compensation is called for pursuant to Section D4: the
projected impact upon the marketing activity of the other Party in whose
territory the third party vendor's sales are to be made; the total amount of
such sales and the proportional usage of each Party's technology in the Product
to be sold; the amount of royalties either Party may be receiving from a third
party vendor for the transferred or licensed technology, or the licensing value
of technology; and the value of grant backs or cross licenses with third party
vendors related to the transferred or licensed technology. In the above
statement, technology licensed to a third party vendor shall be used for
sourcing purpose only and technology means Patents, drawings, technical support
and know-how. All references to compensation as described herein refer solely
to compensation in Section D4.
D6. Vendor Access Compensation:
Compensation, if any, for access to vendors in the other Party's territory will
be negotiated separately.
D7. Graphic Representation of Rights and Responsibilities of Part D:
Attached hereto as Annex D-1 to this Agreement is a summarized graphic
representation of the relevant rights and responsibilities of the Parties
arising from this Part D. In the event of any discrepancy or disagreement
between such graphic representation and the written terms of this Part D, the
text of this Part D shall govern and control.
37
D8. Product Liability:
(a) For purposes of this Section, the term "Party" may be construed to mean
and include a Subsidiary of a Party, if appropriate to the context.
Further, this Section D8 shall not apply to cases where infringement of
any Patent, Copyright or other intellectual property right is involved,
that are covered by the Section D9 below.
(b) Each Party shall bear responsibility for its own conduct with respect to
any claims, suits, causes of action or proceedings brought against it, the
other Party, the other Party's Subsidiaries and/or their respective
officers, directors, employees or representatives by third parties
resulting from or caused by the defective or allegedly defective design,
manufacture, storage, use, sale, lease or transportation of the Product
and each Party shall indemnify, defend and hold the other Party, together
with its and its Subsidiaries, officers, directors, employees and
representatives harmless from and against any judgment awarded by a
tribunal of competent jurisdiction as well as reimbursing the indemnitees
for reasonable court costs and attorneys fees incurred by any of them
arising from any such third party suit, claim, cause of action or
proceeding. Provided, however, and notwithstanding any other term or
condition contained in this Agreement to the contrary, the maximum
liability of the indemnifying Party under the foregoing indemnity shall be
[***] ($[***]) dollars (USD) per occurrence and [***] ($[***]) dollars
(USD) in the aggregate of occurrences.
(c) A Party seeking to market a Product designed or manufactured by the other
Party, shall advise the other Party of any (i) applicable product safety
standards, (ii) warning labels, (iii) legal requirements known to the
Party seeking to market the Product, the compliance with which is
necessary for the Products to be marketed in such Party's territory or
(iv) required content of manuals deemed necessary in its marketplace so as
38
to enable the designing/manufacturing Party to comply with or incorporate
these requirements.
(d) A Party seeking to market a Product may provide to the
designing/manufacturing Party specific instructions in the design of
components, parts, or of the Product itself.
(e) If the designing Party has incorporated all of the product safety
standards, warning label requirements, manual content requirements and
complied with the legal requirements described above; or if the designing
Party has followed the specific instructions, the Party seeking to market
the Product shall bear full responsibility for, and shall indemnify,
defend and hold harmless the designing or manufacturing Party, the
designing or manufacturing Party's Subsidiaries and their respective
officers, directors, employees and representatives from and against any
judgment awarded by a tribunal of competent jurisdiction as well as
reimbursing such indemnitees for reasonable court costs and attorneys fees
arising from any third party suit, claim, cause of action or proceeding
relating to any defect brought about by the designing Party's compliance
with the requirements or instructions given to it by the Party seeking to
market the Product in accordance the above. Provided, however, the maximum
liability of the Party seeking to market the Product under the foregoing
indemnity shall be [***] ($[***]) dollars (USD) per occurrence and [***]
($[***]) dollars (USD) in the aggregate of occurrences.
(f) Subject to a maximum liability of [***] ($[***]) dollars (USD) per
occurrence and [***] ($[***]) dollars (USD) in the aggregate of
occurrences, notwithstanding the source of technology embodied in a
Product, if a defect is found in a product design or manufacture, the
Party having responsibility for the Product design or manufacture which is
39
found to be defective or the cause of liability shall bear full
responsibility for such defect (including the repair or modification of
Product in inventory of the other Party or its resellers or installed at
end-user locations or effecting any other necessary remedial action) and
shall indemnify, defend and hold harmless the other Party, the other
Party's Subsidiaries and their respective officers, directors, employees
and representatives from and against any judgment awarded by a tribunal of
competent jurisdiction as well as reimbursing such indemnitees for
reasonable court costs and attorneys fees such indemnitees incurred
arising from any third party suit, claim, cause of action or proceeding
relating to such defect.
D9. Infringement of Intellectual Property Rights Held by Others:
(a) The Parties agree that each program agreement shall include provisions for
intellectual property indemnification which shall be subject to the
following principles. Subject to paragraph (b) of this Section, each Party
shall, at its expense, defend and indemnify the other Party and its
Subsidiaries, and in the case of Fuji Xerox, the Fuji Xerox JV OPCOs, from
and against any suit, claim or proceeding brought against the other Party
by a third party alleging infringement in any country of any Patent,
Copyright or other intellectual property right as a result of the purchase
or other acquisition by the other Party of any Product of such Party,
provided such Party is promptly notified, given assistance required, and
permitted to direct the defense. Further, each Party shall pay any damages
and costs awarded against the other Party or its Subsidiaries in such
suit, claim or proceeding, but such Party shall have no liability for
settlements or costs incurred without its consent. To avoid infringement,
even if not alleged, such Party may, at its option and at no charge to the
other Party, obtain a license, modify or substitute an equivalent of the
allegedly infringing Product, provided that any modification shall not
affect form, fit or function, and any substitute equivalent shall exhibit
the same form, fit and function.
40
(b) A Party shall not be liable to the other Party for alleged infringement of
Patents, Copyrights or other intellectual property rights, except for as
provided in Section C9, by any of such Party's Products resulting from:
(i) designs or components incorporated into such Product at the request of
the other Party and which would not otherwise have been incorporated by
such Party, or (ii) the use, marketing or distribution of such Product by
the other Party in combination with products not marketed or supplied by
such Party. In either of such events, the other Party shall defend and
indemnify such Party in a manner fully equivalent to the obligations set
forth in paragraph (a) of this Section.
(c) In developing the program agreement indemnification provisions described
above, the Parties may take into account, as the case may arise,
circumstances including, but not limited to: late acceptance of the
Product, disagreement over indemnity risk, local law, or other factors
affecting the indemnity being undertaken by a Party.
D10. Restrictions on Use/Distribution of Third Party Software:
(a) A Party's right to sublicense any Software with respect to which its right
to use and distribute is granted under this Agreement by the other Party
shall be exercisable only in accordance with the terms and conditions set
forth in the respective original license agreement between the
sublicensing Party and the original licensor/third party.
(b) The sublicensing Party shall use in connection with its efforts to
sublicense the Software a written sublicense agreement which contains
terms required by this Agreement or (and only to the extent the licensing
Party notifies the sublicensed Party in writing of such requirements in a
timely manner) terms required by the original licensor/third party to be
contained in such sublicense.
41
(c) The licensed Party shall consult with the licensing Party concerning the
terms to be contained in the licensed Party's sublicense agreements
applicable to such Software.
D11. U.S. Trade Agreements Act of 1979:
Fuji Xerox acknowledges that under the U.S. Trade Agreements Act of 1979 (the
"Trade Agreements Act ") the U.S Government is barred, except under limited
circumstances, from procuring products manufactured in countries that are not
signatories to the World Trade Organization's Agreement on Government
Procurement. Fuji Xerox also acknowledges that procurement by the U.S
Government represents a substantial and vitally important segment of overall
potential U.S. demand for Marking Products. Fuji Xerox agrees that any products
that it manufactures or has manufactured and that are sold to Xerox under any
Product Acquisition Agreement ("PAA") shall be "eligible products" within the
meaning of 19 U.S.C. ss.2518(4), 19 C.F.R. ss. 177.22, and 41 C.F.R. ss.25.003
(or successor provisions) that originate in a designated country within the
meaning of 48 C.F.R. ss. 25.003 (or successor provision). In addition, Fuji
Xerox shall apprise Xerox in detail of those activities which Fuji Xerox
believes will enable Fuji Xerox Products sold to Xerox under a PAA to be
"substantially transformed" (as that term is used in the Trade Agreements Act
and implementing regulations) so as not to restrict the procurement thereof by
the U.S. Government under the Trade Agreements Act as early as is reasonably
practicable in the manufacturing planning process but in any event
substantially prior to the date when such activities are scheduled to commence.
D12. Advice of Claims:
Xerox and Fuji Xerox shall promptly advise the other Party whenever it shall
become apprised of any claim asserted by any third party against either Party
hereto which is of a nature specified in Section D8 or Section D9. Further,
either Party shall have the right, with the consent of the other Party, to
42
assist in the conduct of any legal proceedings brought by or against the other
Party which are of a nature specified in Section D8 or Section D9 through
counsel of its own choosing and at its own expense.
PART E - GENERAL PROVISIONS
---------------------------
E1. Applicability:
Unless otherwise specifically provided in Parts B through D inclusive, above,
the provisions in this Part E shall apply to this Agreement in its entirety.
E2. Royalties:
(a) During the Term of this Agreement and renewals hereof, in consideration of
the rights provided under Sections C1(a), Fuji Xerox shall pay to Xerox a
royalty as set forth in this Section E2. For purposes of this Section E2,
the term "Base Royalty" shall mean a sum of money equivalent to the
cumulative Royalties paid by Fuji Xerox to Xerox under the terms of the
Amended 1999TA between the Parties during the period from April 1, 2005
through and including March 31, 2006.
(b) For the purposes of this Section E2, the term "Exemption Fuji Xerox
Revenue" shall mean a sum equal to [***] percent ([***]%) of the Fuji
Xerox Revenue for any relevant period of time and the term "Net Fuji Xerox
Revenue" shall mean the Fuji Xerox Revenue for the defined period of time
minus the Exemption Fuji Xerox Revenue for that same period of time.
(c) During the initial year of the Term of this Agreement, Fuji Xerox shall
pay to Xerox a royalty computed by multiplying the Net Fuji Xerox Revenue
by the applicable Royalty Rate (as defined below) or the Base Royalty,
43
whichever sum shall be greater. For all years of the Term of this
Agreement subsequent to the initial year, Fuji Xerox shall pay to Xerox a
royalty computed by multiplying the Net Fuji Xerox Revenue by the
applicable Royalty Rate (as defined below).
(d) The following Royalty Rates shall be applied during each year of the Term
of this Agreement and renewals hereof:
(i) for Net Fuji Xerox Revenue up to and including [***] Yen (Y[***]) a
Royalty Rate of [***]%; and
(ii) for Net Fuji Xerox Revenue between [***] Yen (Y[***]) and [***] Yen
(Y[***]) a Royalty Rate of [***]%); and
(iii) for Net Fuji Xerox Revenue between [***] Yen (Y[***]) and [***]
Yen (Y[***]) a Royalty Rate of [***]%; and
(iv) for Net Fuji Xerox Revenue in excess of [***] Yen (Y[***]), a
Royalty Rate of [***]%.
(e) All royalties payable as provided above shall be paid in accordance with
the provisions set forth in Sections E2 through and including E8 of this
Agreement.
E3. Accounting Standards:
All computations relating to the determination of the amount of royalties and
payments due and payable under this Agreement shall be made in accordance with
generally accepted accounting principles in the United States of America, as
reflected in the practice of independent certified public accountants of
international reputation acceptable to both Parties.
E4. Time of Payment:
Within thirty (30) days after the end of each calendar quarter (or such other
days as may be agreed upon by and between the Parties hereto) of each year
during the term of this Agreement, and for any period thereafter for which the
44
rights of either Party shall survive the termination or expiration of this
Agreement, Fuji Xerox shall pay to Xerox or Xerox shall pay to Fuji Xerox, as
the case may be, the royalties which may be due and payable in respect of the
immediately preceding calendar quarter, or portion thereof, during which this
Agreement has been in effect. Interest on any unpaid amounts shall accrue at
the rate of [***] from the expiration of the above-mentioned thirty (30) day
grace period.
E5. Royalty Report:
Each payment of royalties by Fuji Xerox or Xerox shall be accompanied by a
written statement in English, certified as true and accurate by a responsible
executive of the reporting Party showing the computation of the payment. Each
such statement shall contain sufficient detail to permit the accuracy of such
payment to be readily determined and shall set forth the following with respect
to the reporting period:
(a) The revenue, by components, in respect of which royalties are due and
payable by the reporting Party.
(b) The amount of any royalty that is due and payable.
E6. Remittances:
All amounts due and payable by Fuji Xerox to Xerox pursuant to this Agreement
shall be paid in Japanese yen and shall be remitted by Fuji Xerox to such bank
or to such other address as Xerox shall designate in writing from time to time.
All amounts due and payable by Xerox to Fuji Xerox pursuant to this Agreement
shall be paid in U.S. dollars, and shall be remitted by Xerox to such bank or
to such other address as Fuji Xerox shall designate in writing from time to
time.
E7. Records and Audit:
Xerox and Fuji Xerox shall keep full and accurate records and accounts which
may bear upon amounts, if any, payable pursuant to this Agreement. Each Party
shall have the right, at all reasonable times and at its own expense, to
45
examine and audit such records and accounts of the other through a firm of
certified public accountants of international reputation, or through such other
qualified personnel as may be acceptable to the Parties.
E8. Taxes:
(a) Xerox and Fuji Xerox shall cooperate with each other and take all
commercially reasonable steps to file certificates and other documentation
with taxing authorities required to obtain a reduction or elimination of
or credit for, any taxes, levies or other imposts arising from
transactions contemplated by this Agreement. Such cooperation shall
include but not be limited to providing any information required to
secure, complete and file any documents, certificates or assurances in
order that payments under this Agreement shall qualify as either
"Royalties" under Article 12 or "Other Income" under Article 21, of the
Tax Convention between the United States of America and Japan entered into
force on March 30, 2004. The filing Party shall reimburse the cooperating
Party with all reasonably incurred out of pocket expenses.
(b) Any income taxes levied by any governmental authorities upon the payments
to be made by Xerox or Fuji Xerox pursuant to this Agreement and required
to be withheld from said payments, shall be withheld and timely paid and
reported to the appropriate tax authorities as required by applicable law.
With respect to each such tax payment made hereunder the Parties shall use
commercially reasonable efforts to transmit or cause to be transmitted to
the other Party promptly upon receipt the official tax receipts or other
evidence (with English translation attached) issued by the tax authorities
sufficient to support a claim for credit against income taxes in respect
of such taxes so withheld and paid. All other taxes imposed as a result of
the existence or performance of this Agreement shall be paid by the Party
required to do so by applicable law.
46
E9. Confidentiality:
Except as otherwise expressly provided in the Agreement, all Technical
Information or other confidential information furnished or disclosed by either
Party ("Discloser") in writing shall remain the property of Discloser and shall
be deemed the confidential information of Discloser. Such information shall, to
the extent practicable, be marked with an appropriate proprietary legend, or
identified as proprietary within a reasonable time after disclosure in order to
be treated as confidential information that is subject to the terms of this
Section. Information exchanged prior to the Effective Date that is not marked
"Confidential", "Proprietary" or "Private" or words of similar import shall be
deemed to be confidential information for the purposes hereof if under the
circumstances prevailing at the time of disclosure the Party receiving such
information reasonably should have understood that it was intended by Discloser
to be treated as confidential information. The Party receiving such information
("Recipient") shall not disclose such information or any part thereof to any
third party and shall restrict circulation of such information within its own
organization on a need-to-know basis. If Recipient reproduces any part of such
information for use within its own organization, Recipient shall mark all
reproductions by indicating the Discloser's proprietary interest. Such
information may be transferred to Recipient's vendors, suppliers or customers
only to the extent that the Recipient is licensed to such information under the
terms of the Agreement and may be transferred only for purposes so licensed.
Notwithstanding the foregoing, and subject to the provisions of Part D hereof,
Xerox and Fuji Xerox agree that either Party may make disclosures on a
confidential basis to sublicensees, vendors, and distributors or other
resellers, to the extent reasonably necessary to permit such entities to
perform their functions as such, and to other third parties as expressly agreed
in writing by the other Party. Any transferee of such information by the
Recipient shall be required to maintain the confidentiality of such information
to an equivalent standard as the Discloser's and except as expressly provided
above such transfer must be authorized in writing by Discloser which
authorization may be withheld for any reason.
47
Recipient will promptly notify Discloser upon discovery of any unauthorized use
or disclosure of the confidential information of Discloser. Such obligation to
keep information confidential shall survive termination or expiration of this
Agreement.
E10. Exclusions to Confidentiality:
Recipient shall not be bound by the confidentiality obligations of the above
if:
(a) in the case of information first exchanged after the Effective Date, the
information was not Technical Information and was not specifically
designated in writing as confidential or proprietary at the time of the
disclosure or, if the disclosure was orally made, it had not been
initially identified as being confidential at such time;
(b) the information was in the public domain at the time of the disclosure;
(c) the information becomes publicly available through no fault of Recipient;
(d) the information was in Recipient's possession, free of any obligation of
confidence, at the time of receipt of the information;
(e) the information becomes available on an unrestricted basis to a third
party from Discloser;
(f) the information was developed by employees or agents of Recipient (not
while serving as employees, or contractors or consultants to Discloser)
independently of and without reference to the information disclosed in
confidence, as documented by Recipient's contemporaneous written records;
and
(g) to the extent (i) Recipient is obligated to produce the information under
court or government action, after affording Discloser prompt notice, to
the extent feasible, to enable it to contest such disclosure or (ii) with
48
respect solely to non-Technical Information, that the Recipient is
obligated to disclose such information to any parent entity under
applicable corporate governance laws and regulations.
E11. License Under Amended 1999TA:
(a) The licenses granted to either Party in the Amended 1999TA under the
Parties' respective Patents, Copyrights and Technical Information as they
exist as of Effective Date shall continue in full force and effect in
accordance with their terms under the Amended 1999TA, except for the right
to grant sublicenses as provided in Section B1 hereof for Fuji Xerox and
Section B4 hereof for Xerox and shall hereafter be paid-up, royalty-free
licenses, and nothing set forth herein shall be deemed to alter such
licenses or the rights and obligations of the Parties thereunder; provided
however, the Parties agree that the termination or expiration of this
Agreement shall also constitute a termination or expiration of the Amended
1999TA.
(b) From and after the Effective Date all licenses, rights and obligations of
the Parties shall be as set forth in this Agreement except for the rights
and licenses provided in Section E11(a) above in accordance with the
Amended 1999TA. This Agreement shall govern all exchanges of Technical
Information and activities of the Parties occurring on or after the
Effective Date unless the same have been licensed to either Party under
the Amended 1999 TA.
(c) For purposes of clarification and avoidance of doubt, and in all cases
subject to the provisions of Section E17 and E18, the Parties further
specifically agree as follows;
(i) Patents of each Party filed prior to the Effective Date shall be
licensed to the other Party and shall also be sublicensed to its
Subsidiaries and Fuji Xerox JV OPCOs in case of Fuji Xerox in
49
accordance with their terms (including definition thereof) under the
Amended 1999 TA and shall hereafter be fully paid-up, royalty-free
licenses;
(ii) Patents of each Party that were sublicensed to any third party prior
to the Effective Date shall remain unchanged and continue to be
governed in accordance with the existing terms of respective license
agreements; provided, however, any new sublicense arrangement that is
proposed after the Effective Date shall be subject to the terms
(including definition thereof) under this Agreement;
(iii) Technical Information of each Party that was licensed to other Party
prior to the Effective Date shall continue to be licensed to the
other Party and shall also be sublicensed to its Subsidiaries and
Fuji Xerox JV OPCO's in case of Fuji Xerox and shall hereafter be
fully paid-up, royalty-free licenses subject to any existing
arrangements, including arrangements requiring MLF payment under the
Section 9.01(b) of the Amended 1999 TA;
(iv) Copyrights of each Party that were licensed to the other Party prior
to the Effective Date shall continue to be licensed to the other
Party and shall also be sublicensed only to its Subsidiaries and Fuji
Xerox JV OPCO's in case of Fuji Xerox in accordance with their terms
(including definition thereof) under the Amended 1999TA and shall
hereafter be fully paid-up, royalty-free licenses subject to any
existing arrangements, including arrangements requiring SLF payment
under the Section 9.01(c) of the Amended 1999TA.
(d) The Supplemental Technology Agreement between the Parties dated March 30,
2001 shall continue in full force and effect in accordance with its terms.
50
(e) All other agreements with respect to the intellectual property of either
Party that are not covered by the Amended 1999TA in existence on the
Effective Date shall continue to be governed by their existing terms and
conditions.
E12. Compliance With Law:
(a) In the performance of this Agreement, each Party shall (i) comply with all
applicable laws and regulations, including, by way of example only, all
laws and regulations relating or pertaining to the design, marking,
manufacture, sale, advertising or use of the Products in such Party's
respective territory, and (ii) all applicable regulatory requirements with
regard to public safety.
(b) Each Party shall be responsible for making all legally required
notification to all federal, state and local agencies in each Party's
respective territory. In the event either Party is or becomes aware of any
applicable laws or regulations, which are inconsistent with the provisions
of this Agreement, such Party shall promptly notify the other Party of
such inconsistency.
E13. Export Controls:
(a) Fuji Xerox agrees to comply with all laws, rules and regulations of the
United States and any other applicable jurisdiction(s) regarding the
export of any commodity, technology and/or software used, developed or
acquired under this Agreement which, at the time of export, requires an
export license or other government approval, including, without
limitation, first obtaining such license or approval, and further agrees
to use commercially reasonable efforts to provide Xerox with any
information needed by Xerox to determine the export control status, and/or
obtain any export license or approval regarding the export, of any
51
commodity, technology or software used, developed or acquired under this
Agreement.
(b) Without limiting the foregoing, Fuji Xerox shall identify to Xerox any
encryption software, encryption programs, and/or encryption source code
that Fuji Xerox uses, develops or provides to Xerox (or Xerox's clients)
hereunder. Fuji Xerox shall identify to Xerox the export authorization
issued by the United States Commerce Department (or other United States
government agency with applicable jurisdiction) for such encryption
software, encryption programs, and/or encryption source codes. If no such
export authorization has been issued, Fuji Xerox shall provide Xerox with
such information as Xerox may require in order to seek any applicable
export authorization or, when requested by Xerox at its option, Fuji Xerox
shall obtain any applicable export authorization at its sole cost and
expense.
(c) Xerox will endeavor to notify Fuji Xerox of any changes in U.S. Government
regulations and/or export licensing policy which affect Fuji Xerox's
rights in respect of Products in any country in the Territory and will, if
requested by Fuji Xerox, arrange for Xerox to provide reasonable
assistance in attempting to secure any necessary licenses or consents from
the U.S. Government to enable Fuji Xerox to export Products to any country
in the Territory.
E14. Term and Effective Date:
The term of this Agreement shall be five (5) years from the Effective Date and
(subject to such approval by the government authorities as shall be required in
each instance by applicable law) shall be automatically renewed for an
additional term of five (5) years and thereafter for additional terms of five
(5) years each until either Party gives to the other written notice of its
intent not to renew at least [***] prior to the initial or any renewal
expiration date.
52
E15. Termination: General Provision:
The Parties may terminate the Agreement only as set forth herein. Either Party
may terminate this Agreement, upon written notice to the other Party in the
following events:
(a) If the other Party shall have committed a material breach of any of the
covenants or provisions of this Agreement; provided that in the case of
any such breach capable of being cured, the Party serving notice shall not
terminate this Agreement unless and until the defaulting Party shall have
failed to cure the noticed breach within sixty (60) days after it is given
notice in writing requiring it to make good such breach.
(b) If an order is made or an effective resolution passed for the winding up
of the other Party except for the purpose of amalgamation or
reconstruction.
(c) If an encumbrancer takes possession or a receiver is appointed of the
undertaking, or the property and assets (or any material part thereof) of
the other Party.
E16. Survival of Rights and Obligations:
Termination of this Agreement for any reason shall not release either Party
from any liability which has accrued to the other Party, or which may accrue in
respect of any antecedent material breach of this Agreement, nor shall it
affect in any way the survival of any other rights, duty or obligations of
either Party which is expressly stated elsewhere in this Agreement to survive
such termination. Nothing in the immediately preceding sentence shall affect,
or be construed to operate as a waiver of, the right of the Party aggrieved by
any material breach of this Agreement to be compensated for any injury or
damage resulting therefrom which is incurred either before or after such
termination. In addition, for purposes of clarification, the Parties
acknowledge and agree that the expiration or termination of this Agreement for
any reason shall not affect, and the Parties shall remain bound by, the rights,
53
duties or obligations of the Parties under any other agreement (including,
without limitation, any product program agreement), understanding, waiver,
license, consent or undertaking between the Parties and all such rights, duties
and obligations shall expressly survive any termination or expiration of this
Agreement and shall continue in full force and effect in accordance with their
respective terms.
E17. Effect of Termination or Expiration on Licenses granted to Fuji Xerox by
Xerox:
[***]
E18. Effect of Termination or Expiration on Licenses granted to Xerox by Fuji
Xerox:
[***]
E19. Applicable Law:
The validity, construction and performance of this Agreement shall be governed
as follows:
(a) With respect to the Brand Provisions of this Agreement and all definitions
related thereto, the law of the State of New York, United States;
(b) With respect to all other provisions of this Agreement, the law of Japan;
(c) This Agreement is in the English language only, which language shall be
controlling in all respects. No translation, if any, of this Agreement
into the Japanese or any other language shall be of any force or effect in
the interpretation of this Agreement or in a determination of the intent
of either of the Parties hereto.
54
E20. Headings:
The headings to Articles 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.
E21. Amendment:
No amendment or modification or addition of this Agreement shall be effective
or binding on either of the Parties hereto unless or until the same shall be
reduced to writing and signed on behalf of both of the Parties hereto.
E22. Non-Warranty:
Except as otherwise expressly provided in this Agreement, nothing set forth
herein shall be construed as:
(a) A warranty or representation by any Party as to the validity or scope of
any patent; or
(b) A warranty or representation that anything made, used, sold or otherwise
disposed of under any license granted herein is or will be free from
infringement of patents of third persons or Parties; or
(c) A requirement that any Party shall file a specific number of patent
applications, secure any patent, or maintain any patent in force;
(d) An obligation to bring or prosecute actions or suits against third Parties
for infringement of any patent; or
(e) Granting any right to sublicense others, except as provided in this
Agreement; or
55
(f) Granting, by implication, estoppel, or otherwise, any licenses or rights
under Patents, Copyrights or Technical Information other than those
expressly licensed pursuant to this Agreement.
E23. Force Majeure:
Neither Party shall be liable to the other Party hereto for any loss, injury,
delay, damages or other casualty suffered or incurred by such other Party due
to strikes, riots, storms, fires, acts of God, or war or terrorism, or any
other cause beyond the reasonable control of either Party hereto.
E24. Disclaimer:
Neither Party shall be liable to the other Party hereto for failure to export
or to grant a license if exportation of a Product or any Technical Information,
or the granting of a Patent or Copyright license is prohibited by applicable
law or regulations.
E25. Assignment:
This Agreement, and the rights and obligations hereunder, shall not be assigned
by either of the Parties to any third party without the prior written consent
of the other Party. Any attempt at an assignment without such consent shall be
null and void.
E26. Spin-Outs:
In the event either Party shall transfer any of its or its Subsidiary's Patent,
Technical Information, Trademark or Copyright for any reasons to any third
party, including without limitation a legal entity or a person who shall have
been a Subsidiary, a business unit, division or any other segment or
organization, (hereinafter called collectively a "Division") of the Party or
its Subsidiary and who shall become no longer owned or controlled by the Party
as the result of setting up the Division's own business, the Party shall ensure
that the rights granted to the other Party under Parts B and C with respect to
Patents, Technical Information, Trademarks, Copyrights and Products before the
56
transfer shall continue. After any such transfer as described above, licensees
under Part B shall not be entitled to any continuing flow of Patents or
Technical Information from the third party to whom the transfer was made.
However, a licensee may negotiate separately with a third party to whom Patents
and Technical Information has been transferred either to acquire rights to
technology to be developed in the future, or to surrender technology rights it
may have acquired from the licensor prior to the transfer.
E27. Notices:
Except as otherwise set forth in this Agreement or as otherwise agreed between
the Parties, all notices or other communications required or permitted to be
given pursuant to this Agreement shall be communicated and shall be valid and
sufficient if delivered by hand, email, facsimile transceiver, video mail, or
registered airmail, postage prepaid, addressed as follows:
FUJI XEROX CO., LTD.
Attention: President
2-17-22 Akasaka
Minato-ku, Tokyo 107-0052
Japan
XEROX CORPORATION
Attention: Chief Executive Officer
P. O. Box 1600
Stamford, Connecticut
U.S.A. 06904
or to such other address of which either Party shall notify the other in
writing. Notices dispatched by cable shall be deemed to have been given on the
57
dates of dispatch, and notices dispatched by registered airmail shall be deemed
to have been given six (6) days after the dispatch thereof.
E28. Joint Enterprise Contract:
Nothing contained herein shall be construed as a waiver by Xerox, or an implied
limitation, of any rights or obligations Xerox or any Xerox Subsidiary may have
as a result of its ownership of an interest in Fuji Xerox, including, but not
limited to, any rights or obligations that such company may have under the 2001
JEC.
E29. Dispute Resolution:
In the event of any dispute arising out of or in connection with the present
contract, the Parties agree to submit the matter to settlement proceedings
under the International Chamber of Commerce ("ICC") Alternate Dispute
Resolution Rules. If the dispute has not been settled pursuant to the said
Rules within forty-five (45) days following the filing of a Request for ADR or
within such other period as the parties may agree in writing, such dispute
shall be finally settled under the Rules of Arbitration of ICC by three (3)
arbitrators appointed in accordance with the said Rules of Arbitration and who
shall have prior knowledge and expertise in the subject matter of the
arbitration. The place of any ADR or arbitration proceeding shall be San
Francisco, California, and the language of such proceeding shall be English.
E30. General Indemnity:
Each Party shall defend, indemnify and hold the other Party, its affiliated
companies, respective officers, directors, employees, agents and other
authorized representatives, harmless against all claims, suits, costs, damages,
punitive damages, judgments and attorneys fees incurred, claimed or sustained
by third Parties, whether for personal injury or otherwise (collectively, the
"Damages") because of: (i) any act or omission of such Party giving rise to
such Damages which act or omission does not arise from such Party's complying
with a direct request of the other Party; (ii) the manufacture, marketing, use
58
or sale of Products by such Party; (iii) the breach by either Party of its
obligations under this Agreement; or (iv) a Party's other wrongful acts or
omissions.
E31. Severability:
This Agreement is intended to be valid and effective throughout the world and,
to the extent permissible under applicable law, shall be construed in a manner
to avoid violation of or invalidity under any applicable law. In the event any
provision hereof is declared by competent authority to be invalid, illegal or
unenforceable under any applicable law, the other provisions hereof shall not
be affected, and to the extent permissible under applicable law, any such
invalid, illegal or unenforceable provision shall be deemed amended lawfully to
conform to the intent of the parties.
E32. Non-Waiver:
(a) Nothing contained herein shall be construed as a waiver by Xerox, or an
implied limitation, of any rights or obligations Xerox or any Xerox
Subsidiary may have as a result of its ownership of an interest in Fuji
Xerox, including, but not limited to, any rights or obligations that such
company may have under the 2001 JEC.
(b) Failure of delay of either Party to exercise any right or remedy under
this Agreement or to require strict performance by the other Party of any
provision of this Agreement shall not be construed to be a waiver of any
such right or remedy or any other right or remedy hereunder. All of the
rights of either Party under this Agreement shall be cumulative and may be
exercised separately or concurrently.
E33. Precedence:
Except as otherwise provided in Section E11(e), in the event any conflict in
any provision between this Agreement and any existing agreement should arise,
this Agreement shall take precedence and shall apply, unless the Parties adopt
59
other terms and conditions by mutual agreement, in writing, of respective
corporate officers.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the day and year first set
forth above.
XEROX CORPORATION FUJI XEROX CO., LTD.
By: /s/ Anne M. Mulcahy By: /s/ Toshiro Arima
--------------------------- --------------------------
Name: Anne M. Mulcahy Name: Toshio Arima
Title: Chairman and Chief Executive Title: President and
Officer Representative Director
60
ANNEX A-1
---------
CLASSIFICATION EXAMPLES
-----------------------
[***]
[3 Pages Omitted]
ANNEX A-2
---------
XEROX CORPORATE IDENTITY GUIDELINES
-----------------------------------
[***]
[1 Page Omitted]
ANNEX B-1
---------
TECHNICAL INFORMATION DISCLOSURE PROCESS
----------------------------------------
[***]
[1 Page Omitted]
ANNEX C-1
---------
NAMEPLATE USAGE
---------------
[***]
[1 Page Omitted]
61
ANNEX C-2
---------
TRADEMARKS
----------
[***]
[1 Page Omitted]
ANNEX D-1
---------
GRAPHIC REPRESENTATION OF RIGHTS AND RESPONSIBILITIES
-----------------------------------------------------
[***]
[1 Page Omitted]
62