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EXHIBIT 2.3
COOPERATIVE MARKETING, SUPPORT
AND DEVELOPMENT AGREEMENT
COOPERATIVE MARKETING, SUPPORT AND DEVELOPMENT AGREEMENT dated as of
this 10th day of August, 1997 (this "Agreement") between Digital Equipment
Corporation, a Massachusetts corporation ("Digital"), and Genicom Corporation,
a Delaware corporation ("Genicom").
WHEREAS, on the date hereof, Digital and Genicom entered into an Asset
Purchase Agreement (the "Asset Purchase Agreement") with respect to the
acquisition by Genicom from Digital of certain assets, subject to certain
liabilities, used worldwide in Digital's Printing Systems Business;
WHEREAS, Digital and Genicom desire for Genicom exclusively, subject
to the terms and conditions set forth herein, to perform many of the same
functions as had been performed by Digital's Printing Systems Business in
supporting the installed base of Digital branded printers and in the planning,
design, acquisition, pre-sale, delivery and post-sales support cycles of
Digital's customers' future purchases of printing systems solutions; and;
WHEREAS, the parties hereto desire to work cooperatively with each
other pursuant to the terms hereof with respect to the products and services
each sells and provides.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants hereinafter set forth and in the Asset Purchase
Agreement, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto (individually,
a "Party" and collectively, the "Parties") agree as follows:
1. General. It is the intention of the Parties to have a
cooperative alliance pursuant to the terms hereof whereby, primarily, Genicom
provides printer product planning, product pricing, channel distribution, and
inventory management to Digital's marketing channels in each geographic region
and provides technical and customer support to Digital's installed base of
legacy products and Digital branded printers purchased from Genicom ("Digital
Branded Printers"). The Parties will work cooperatively as each other's
supplier of complementary products and services for full service customer
solutions such that Genicom will promote Digital computer systems with Genicom
branded printers and Digital will offer Digital Branded Printers with Digital
systems. Secondarily, the Parties will from time to time provide joint
marketing programs and sales leads for each other's capabilities, products and
services. The Parties agree that the provisions herein and the cooperative
alliance hereunder shall be with respect to Digital Branded Printers and sales
of printers by Genicom to its customers, provided, however, that the Parties
may in the future expand the scope by amending this Agreement in the manner
provided in Section 18(a) herein. The Parties acknowledge that it is Digital's
policy generally to lead with Digital branded products in Digital's sales
relationships, provided, however, that Digital and its customers may elect to
purchase non-Digital branded products and Digital shall not be restricted in
any manner from offering other products.
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2. Relationship Manager. Each Party shall designate a relationship
manager (a "Manager") for purposes of this Agreement who shall act as a
coordinator on a worldwide basis for activities under this Agreement and have
authority to make day-to-day operational decisions on behalf of such Party,
provided, however, that this Agreement may only be amended as provided in
Section 18(a) herein. Each Manager shall not be obligated to devote his or her
full business time and efforts to the performance of his or her obligations
hereunder. The Manager for Digital shall initially be Xxxxxxx Xxxxxxx and the
Manager for Genicom shall initially be Art Xxxxx, provided, however, that
either Party may change its Manager, from time to time, by providing written
notice thereof to the other Party, and, provided, further, that the Manager
from Digital shall be selected by Digital from its products division.
1. Operations, Exclusivity and Product Pricing.
(a) Any Party's obligation to purchase products or services from
the other Party shall be subject to basic order agreements or other agreements
that the Parties may enter into, including, without limitation, the Basic Order
Agreement entered into by the Parties as of the date hereof (the "Basic Order
Agreement). Each Party's Manager shall identify and authorize specific
individuals to address operational issues relating to orders and such
agreements including, without limitation, warranties, returns, forecasting, and
delivery.
(b) The Parties acknowledge that the success of their cooperative
relationship hereunder is dependent, among other things, on their products
being competitively priced. For printers, related products, spare parts and
consumables purchased from Genicom for Digital's internal consumption and
Digital's service business' consumption for making internal and external
repairs, Genicom's prices therefor will be equal to the lowest price for each
type of Digital branded product and part that Genicom charges from time to time
to its resellers, distributors and other preferred customers for comparable
products in like circumstances, provided, however, that to the extent that the
dollar volume of products purchased by Digital exceeds the volumes for such
resellers, distributors and other preferred customers from time to time, the
Parties shall negotiate more favorable prices than such lowest prices to the
extent economically practicable. Genicom shall provide Digital with reasonable
advance notice prior to increasing any of its prices for all printers,
products, spare parts and consumables sold to Digital and/or through its
distribution channels.
(c) Digital acknowledges that during the term of this Agreement it
desires to exclusively source from Genicom Digital Branded Printers pursuant to
the terms and conditions hereof and a Basic Order Agreement of even date
herewith between the parties hereto. In furtherance thereof, Genicom agrees
that if it does not have at any time a particular product of comparable
features, functions, quality, realiability and/or price available to timely
meet the needs of Digital or any of its customers, it shall, if requested by
Digital, use its best efforts to source such product to meet such needs and
shall perform its other obligations hereunder in connection therewith,
including, without limitation, testing and qualifying the product to ensure its
quality, its compatibility with Digital's internal product development
qualifications and approval processes (as described in Section 4(i) herein).
If Genicom shall not timely source such product of comparable features,
functions, quality, reliability, availability and/or price, Digital shall, in
addition to its other remedies hereunder, have the
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right to source the product on its own, which may contain Digital's tradename
and brandname and Genicom shall cooperate in all respects in connection
therewith and shall reimburse Digital for any reasonable incremental expenses
incurred by Digital in furtherance thereof, provided, however, that this shall
not be construed to impose on Genicom an obligation to support such product.
Notwithstanding anything herein to the contrary, Digital is under no obligation
to source from Genicom any non-Digital branded printers, which it may acquire
on behalf of its customers or for its internal use from time to time.
4. Product Development Assistance. The Parties acknowledge and
agree that Genicom shall engage full-time in the development of new products to
meet the needs of Digital and its customers. Each of the Parties will provide
reasonable assistance to the other Party to jointly plan and develop new
printing systems to be procured by Genicom for Digital's customers which are
compatible with Digital's computer systems. Such assistance shall be limited
to the following unless otherwise agreed to in writing between the Parties:
i. For products being developed by Genicom which are intended to
be Digital branded products, Genicom shall comply with
Digital's internal product development qualification and
approval processes, which shall include, among other things,
providing Digital with information and access from time to
time with respect to each phase of Genicom's development of
printer products, providing Digital, at Genicom's expense,
with prototypes or samples of its printer products and/or
reasonable access thereto to facilitate testing of Genicom's
existing and future products for compatibility and quality and
providing Digital with hardware and software specifications
and engineering development plans. The printer solutions
shall address, among other things, the unique needs of
Digital's installed base including support for the ANSI/PPL3
datastream and support for the LAT network protocol.
ii. The Managers shall designate appropriate representatives of
each Party to meet from time to time at such reasonable
intervals not less than quarterly and at such reasonable times
and locations as mutually agreeable to the Parties to (x)
discuss Digital's and its customers' future requirements for
printers and related products (including, without limitation,
schedules and product pricing), (y) discuss Genicom's products
strategy in order to assist it in supporting Digital's and its
customers needs for printers and related products and (z)
evaluate and, if appropriate, determine ways to enhance,
Genicom's performance of its obligations under this Section 4.
iii. Genicom shall devote appropriate personnel (in terms of a
sufficient number of personnel with sufficient training and
experience in the printer industry generally and with respect
to Digital specifically) and financial and other resources to
satisfy its product development obligations hereunder.
iv. In furtherance of the Parties desire for Genicom to develop
Digital compatible printer products, Genicom shall have the
right to have access to and/or purchase from Digital its
computer systems products for development and testing on the
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same terms and conditions that Digital generally offers from
time to time to its ISV (Independent Software Vendor)
partners. In addition, Genicom will maintain, at its
expense, its own commercially reasonable facilities for
research and development and for customer and technical
support of Digital Branded Printers. Genicom shall also have
access to Digital's laboratories and testing facilities, on
the same terms and conditions that Digital generally offers
from time to time to its ISV partners, to ensure system level
compatibility for new products, and for remedying recurring
field problems with Digital Branded Printers sold to
customers, provided, however, that Digital shall not charge
Genicom for its reasonable access to such facilities to remedy
such recurring field problems. Digital agrees to give Genicom
access to field test pre- release versions and final release
versions of Digital's operating systems software, at no charge
to Genicom; provided, however, that such access is limited to
use necessary to develop printer products for Digital and
subject to the confidentiality restrictions set forth herein.
Digital agrees to allow Genicom to purchase legacy\obsolete
hardware systems at cost and otherwise on standard terms and
conditions.
v. With respect to Digital's strategic alliance partners, to the
extent that such alliance involves the development of printers
by Digital (including Microsoft, Oracle and Xerox), Digital
will continue to interface with such partners, provided,
however, that upon Genicom's request, Digital will, at such
times and on such other terms and conditions determined from
time to time by Genicom and Digital, introduce Genicom to
Digital alliance partners.
vi. In furtherance of paragraph i. of this Section 4, Genicom
agrees to work to develop printer products that are well
integrated across all three of Digital's current operating
systems environments and any other operating systems used in
Digital systems. Under OpenVMS, Genicom will use the DCPS
software product as the vehicle for achieving such
integration. Under Digital UNIX, Genicom will work
cooperatively with the Digital UNIX group for printer support
for the lpd.lpr and Printxchange environments to achieve
integration. Under the NT operating system, Genicom will be
responsible for developing an integration plan that is
acceptable to Digital. Digital shall continue to provide
commercially reasonable service to integrate drivers and other
printer software for the Digital UNIX group.
vii. In furtherance of paragraph i. of this Section 4, Genicom
shall be responsible for completely testing its new printer
products and obtaining any necessary third party approvals
prior to Digital providing its final approval for use with the
Digital brand. Such final approval shall be provided pursuant
to the terms and conditions of the Trademark License Agreement
of even date herewith between Digital and Genicom (the
"Trademark License Agreement"). Genicom shall provide Digital
from time to time with Genicom's testing methodology and test
results.
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5. Cooperative Marketing. The Parties hereto agree that their
respective cooperative sales and marketing obligations under this Agreement
shall be as set forth in this Section 5 unless otherwise agreed to in writing
by the Parties.
i. Genicom will provide full-time sales and marketing support to
Digital's sales force (including the sales forces of all
Digital channels, including without limitation, VARs, systems
integrators, distributors and large end users), which will
include, among other things, product training, pre-sales and
post-sales support, technical support and providing relevant
marketing materials and documentation. When requested by
Digital or agreed to by Digital following a Genicom request,
Genicom sales and marketing personnel will support Digital's
sales force in system solution sales which include printing
product requirements. Genicom will supplement their current
sales and marketing organization with appropriate personnel
(in terms of a sufficient number of personnel with sufficient
training and experience in the printer industry generally and
with respect to Digital specifically) dedicated to sales,
support, marketing and management of the Digital Branded
Products.
ii. The Parties shall mutually agree upon three Digital employees
with substantial sales experience in the Printing Systems
Business to serve as Printer Market Development Executives
(the "PMD Executives") whose compensation shall be funded by
Digital in accordance with the limitations set forth herein.
Each PMD Executive shall be assigned an exclusive territory
(such territories to be the United States, Europe and
Asia-Pacific) in which the PMD Executive shall facilitate the
joint marketing and sales efforts of the Parties, including
without limitation, facilitating marketing programs, joint
trade show presentations and customer calls, defining the
market, and organizing joint planning efforts. The Parties
shall jointly assign sales targets for each of the PMD
Executives such that the PMD Executives are compensated on a
highly variable basis based on printer sales, with such sales
targets and compensation to be mutually determined by the
Parties. In addition, Genicom shall assign three senior sales
executives (the "GC Executives") to work closely with the PMD
Executives in their sales and marketing efforts. The Parties
may, from time to time, replace its PMD Executives or GC
Executives as the case may be, provided, however, that before
any such replacement is made by a Party, the other Party shall
have the opportunity to consult with the Party and/or
interview potential replacements. The Parties agree that, for
a period of two years from the date hereof, neither Party
shall directly or indirectly induce, solicit, request or
encourage, whether on behalf of a Party or others, any PMD
Executive or GC Executive, as the case may be, to terminate
his or her relationship with the other Party and/or to be
employed by or consult to another Party.
iii. The Parties acknowledge that in furtherance of this Agreement,
commercially reasonable commissions and incentive programs for
Digital's systems sales representatives will be funded by
Digital in accordance with the limitations set forth herein.
The Parties will develop a commission program for sales
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representatives that provides incentives for printer sales
in all channels of distribution. The Parties will, from time
to time, propose and jointly authorize and develop, special
sales incentives and promotion programs for Digital sales and
marketing representatives.
iv. The total amount of the compensation, bonuses, and benefits
for the PMD Executives and the commissions paid to Digital's
sales representatives described in paragraphs ii. and iii. of
this Section 5 shall be funded by Digital in an amount not to
exceed fifty percent (50%) but not to be lower than thirty
percent (30%) of the revenue royalty paid by Genicom to
Digital under the Trademark License Agreement
v. From time to time as reasonably requested by a Party, (x)
Genicom will supply to Digital a contact listing of its key
management personnel located at its headquarters and in the
field and (y) Digital will supply to Genicom a contact
listing of its key management personnel responsible for sales
and marketing, for the sole purpose of effecting the
objectives of this Agreement. Access to each Party's
personnel shall be coordinated through such Party's Manager;
provided, however, that communications between the personnel
referred in (x) and (y) concerning day to day sales and
marketing efforts shall not always require coordination by a
Manager unless either Party reasonably determines that such
coordination is necessary.
vi. The Parties acknowledge that Digital's cooperative sales and
marketing efforts hereunder on behalf of Genicom shall be
primarily in support of Digital's systems sales. Digital's
sales and marketing personnel will determine the appropriate
circumstances pursuant to which they will provide appropriate
Genicom personnel with sales leads and/or access to customers
and information for printer sales presentations, on terms and
conditions to be mutually determined by the parties from time
to time.
vii. Digital and Genicom will mutually determine the vehicles they
will use to jointly promote each other's products and the
scope of such promotional activity. With respect to Digital's
promotional activities, the vehicles used will be reasonably
consistent with Digital's other promotional vehicles then
being used and may include, without limitation, Digital VAR
Program, Digital Call Center, Account Programs, Industry
Marketing Programs, Digital sponsored events, Digital's
systems and options catalogs, Advantage menu, Inform, Sales
Update, Web pages and links, DUPS Sales Training Programs and
MES Upgrade Program. These promotional vehicles might also
include co-logo promotional brochures, joint trade and
industry show appearances and presentations at national and
customer conferences, as well as other promotions, on such
terms and conditions as may be agreed to by the Parties. In
furtherance thereof, each Party will make available to the
other Party, at the providing Party's expense, sales and
marketing information in form suitable for use in such sales
and marketing programs, provided, however, that to the extent
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Digital shall prepare such information primarily for use
hereunder, Digital shall not incur any expenses unless it
agrees in writing in advance to do so. All aspects of such
joint marketing program shall be approved in advance by both
Parties, including, without limitation, the content of the
promotional materials, the sales and marketing programs used
and the frequency of the promotional efforts thereof. Digital
shall also carry Genicom's Digital Branded Printers and
related products on its price lists and shall also include
Digital Branded Printers in its system configuration tables.
viii. Digital will make available to Genicom, subject to the
confidentiality restrictions set forth in Section 16 herein,
certain printer sales and marketing history for the three
fiscal years ending in June 1997 and Multi-Customer Service
(MCS) printer contact data and system account printer profiles
to the extent the data is readily available to Digital.
Genicom will use this data solely to build a marketing model
that will increase the print solution content of systems
solutions sales for Digital.
ix. Genicom agrees that it will perform functions and activities
similar to Digital's obligations under this Section 5 with
respect to Digital's cooperative sales and marketing efforts
to support and promote sales of Digital's systems products in
connection with Genicom's sales of products, including,
without limitation, joint promotional activities, offering
Digital- funded incentives to Genicom's sales force, providing
support to Digital's sales force in system solution sales,
meeting regularly to review sales activities and strategies,
and providing access, as Genicom determines to be appropriate,
to Genicom's customers and strategic partners. The Parties
may mutually agree from time to time upon certain programs to
facilitate and encourage efforts to find sales leads.
x. The Parties will jointly develop annual operating plan
objectives for Digital Branded Printers, sales targets for PMD
Executives, printer commission plans for Digital sales
representatives, and specific demand generation programs by
quarter. Genicom will, from time to time as reasonably
determined by Digital, participate in sales meetings and
provide speakers/training materials/program content for such
meetings. Representatives from Digital and Genicom will also
meet on a regularly scheduled basis to share and review sales
structure, initiatives, product and brand strategies, channel
strategy and marketing programs, future plans and current
effectiveness.
xi. The Parties agree that, except to the extent agreed to in
advance in writing by Digital or as specifically provided
herein, Digital shall not incur expenses under this Section 5
in connection with its obligations hereunder unless it would
otherwise incur such expense in connection with the operation
of its business generally.
xii. Digital shall provide Genicom, at no cost, office space for
Genicom's sales representatives selling Digital Branded
Printers in those cities in Europe and
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Asia/Pacific in which Genicom does not have a physical
presence and in which Digital does and has office space
available on terms and conditions similar to those set forth
in the Occupancy Agreement of even date herewith, provided
however, that Digital shall not be obligated to provided such
office space to more than five (5) sales representatives. To
the extent Digital provides to its personnel office space for
visitors, Digital shall make such visitor's office space
available to Genicom on the same terms and conditions as it
provides to its personnel. The access to office space shall
terminate upon the termination of this Agreement pursuant to
Section 14 hereof or upon the earlier closure of such
facilities or if Digital vacates such facilities or no longer
has available space therein. Genicom shall pay Digital for
all expenses incurred by Digital in connection therewith other
than for the space, including, without limitation, a
reasonable allocation for secretarial support,
telecommunications charges and the like.
6. DCPS Software. Genicom agrees to provide commercially
reasonable support for DCPS in the installed base or incorporated in any
Genicom product sold under this Agreement or the Basic Order Agreement during
the term of this Agreement unless the Parties mutually agree that such support
is no longer necessary. The Parties agree to work cooperatively to address the
economics of continuing support and to make economics a factor, along with,
among other things, customer satisfaction, in deciding the appropriate level of
DCPS support that should continue.
7. Product Migration Plan. Genicom agrees to initially source
Digital's existing products and components from (x) Digital's suppliers of such
products and components prior to the date hereof, including, without
limitation, pursuant to the Assigned Contracts and Purchase Orders (as such
terms are defined in the Asset Purchase Agreement) and (y) pursuant to Section
6.13 of the Asset Purchase Agreement, from Digital's inventory of such
products, components and consumables. Within sixty (60) days from the date
hereof, the Parties will mutually agree upon a product migration plan with
respect to Genicom's future sourcing of products, components and consumables.
Subject to Section 3(c) herein, this plan will provide, among other things, (i)
that Genicom shall have the right to source products, components and
consumables from third party sources other than the sources currently used by
Digital if the Genicom sourced products, components and consumables are
compatible with the Digital sourced products, components and consumables and
have comparable features, functions, price, availability and quality, all as
reasonably and objectively determined by Digital, (ii) Genicom's rights to
source products from third parties shall be subject to its obligations under
the Asset Purchase Agreement with respect to Assigned Contracts and Purchase
Orders (as such terms are defined in the Asset Purchase Agreement), and (iii)
Genicom's right to source products from third parties shall take into account,
among other things, Digital's customers' needs and satisfaction, and the
ability of the third party supplier to timely supply a sufficient quantity of
the products over a long period of time.
8. Customer Support. To ensure ongoing support of Digital's
installed base of legacy products and Digital Branded Products, Genicom agrees
to provide, at its expense, customer and technical support, the quality and
level of which will be at least comparable to
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the quality and level of support currently provided by Digital's Printing
Systems Business and by MCS, with respect to (i) Digital's installed base of
legacy products (printers, software, supplies and options), (ii) legacy
products sold by Digital, Genicom or Digital's representatives from Digital's
existing inventory thereof and (iii) future Digital Branded Printers.
i. Without limiting the generality of the foregoing, Genicom will
ensure that it has sufficient expertise and resources in both
its technical support and life-cycle engineering groups in
order to manage Digital customer issues. In connection
therewith, Genicom will designate a specific group of its
employees (having a sufficient number of personnel with
sufficient training and experience in the printer industry
generally and with respect to Digital specifically) dedicated
to providing technical support and managing problem reports
from Digital's customer base.
i. While it is anticipated that Digital's current legacy base of
printers will, on its own time and pace, convert to new
generations of printing systems, the parties explicitly agree
that Genicom will not use escalated problems to recommend to
customers to prematurely convert their Digital Branded
Products to products manufactured by or for Genicom. The
Parties agree that with regard to support the objective is
current customer satisfaction with its existing products, not
new sales.
i. All selling efforts by Genicom in connection with replacement
of legacy printer products will be first coordinated with the
appropriate Digital account representative.
iv. Digital may, from time to time, at its expense, conduct
customer surveys to determine if Genicom is fulfilling its
obligations hereunder with respect to Digital's customers.
9. Laser Printer Products. The Parties acknowledge the critical
need for new laser printer offerings in Digital's product line. Genicom will
use its best efforts to have available for shipment during the fourth quarter
of 1997, a family of Digital compatible, competitively priced and featured
laser printers with full Digital operating system support. These printers
will initially include a color laser printer, 20 ppm and 40ppm laser printers
(monochrome) and an LN17 printer (cost reduced version of Digital's current
LN17). The objective is to have this laser printer product family be plug
compatible with Digital's currently installed base of laser printers. In
satisfying its obligations hereunder, Genicom will work with Digital pursuant
to the cooperative development provisions set forth in Section 4 herein. In
addition to the laser printers, Genicom will use its best efforts to develop
and have available for shipment during the fourth quarter of 1997, printer
network management software for installing, setting up and managing the laser
printers on a network. The software should be open to support industry
standard mechanisms for managing printers (e.g., SNMP Printer MIBs).
10. Distribution Channels. Genicom acknowledges the importance of
Digital's right
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to control the distribution channels for Digital Branded Products. The parties
agree that Digital Branded Products shall only be marketed and sold through
Digital's current and future distributors, VARs, systems integrators,
government contracts and its own sales force. Genicom shall obtain Digital's
consent in writing, which may be given or withheld in Digital's sole
discretion, if Genicom desires to market and sell Digital Branded Products
through other channels.
11. Expenses. Unless otherwise specified herein or otherwise
agreed to in writing by the parties hereto, each party shall pay for its own
costs and expenses incurred in connection with performing its obligations
hereunder. Except pursuant to Section 15 herein for termination by Digital
pursuant to Section 14(a) herein, Digital shall have no responsibility to
Genicom for any expenses, losses or action incurred or undertaken by Genicom as
a result of work performed or materials or equipment purchased by Genicom in
anticipation of purchases of products by Digital unless specifically agreed to
by Digital in writing.
12. Indemnification.
(a) Genicom shall indemnify, defend, and hold harmless
Digital and its affiliates and their respective officers, directors, agents,
employees, customers and strategic partners from and against any and all
liabilities, losses, damages, demands, claims, suits, taxes and expenses,
including reasonable legal fees and other expenses of litigation, arising out
of or related to the performance by Genicom of its obligations hereunder and
all products developed, sold or serviced by Genicom hereunder or under the
Basic Order Agreement, except to the extent such liabilities or losses are
directly attributable to the gross negligence or willful misconduct of Digital.
Nothing herein shall be deemed to affect Digital's right to indemnification
under the Asset Purchase Agreement or the Ancillary Agreements (as defined in
the Asset Purchase Agreement).
(b) Digital shall indemnify, defend, and hold harmless
Genicom and its affiliates and their respective officers, directors, agents and
employees from and against any and all liabilities, losses, damages, demands,
claims, suits, taxes and expenses, including reasonable legal fees and other
expenses of litigation, arising out of or related to the performance by Digital
of its obligations hereunder, except to the extent such liabilities or losses
are directly attributable to the gross negligence or willful misconduct of
Genicom. Nothing herein shall be deemed to affect Genicom's right to
indemnification under the Asset Purchase Agreement or the Ancillary Agreements
(as defined in the Asset Purchase Agreement).
(c) In the event a Party provides the other Party with
information and/or certifications as to compliance with applicable laws
pursuant to Section 17(j) of this Agreement, the Party providing such
information and/or certification shall indemnify and hold the other Party
harmless from and against any claims, costs, or damages resulting from or
arising out of the other Party's reliance on such information and/or
certifications.
13. Force Majeure. Neither Party shall be liable for or deemed in
breach hereof because of any delay in the performance of its obligations to the
extent caused by
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circumstances beyond its control and that could not have been prevented by the
exercise of due diligence, including but not limited to fires, natural
disasters, riots, wars, embargos, strikes, adverse weather conditions, or acts
of God. The affected Party will promptly notify the other Party in writing,
but in any event within ten (10) business days, after the beginning of any such
cause which would affect its performance and shall promptly take actions to
mitigate any problems caused thereby.
14. Term and Termination.
(a) This Agreement shall remain in effect, unless
terminated in the manner provided in Paragraph (b) below, until such time as
either Party gives the other Party at least six (6) months prior written notice
of termination, provided that such notice of termination pursuant to this
Section 14(a) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
COMMISSION] and further provided that any such notice of termination given more
than [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE COMMISSION]
from the date hereof shall be given at least twelve (12) months prior to the
effective date of such termination.
(b) If any of the following events occur with respect to
a Party (hereinafter referred to as the "Defaulting Party"), the other Party
shall have the right, in its sole discretion, to immediately terminate this
Agreement in whole or in part:
i. A material breach of this Agreement by the Defaulting
Party which is not cured within thirty (30) days
after notice thereof is provided to the Defaulting
Party by the other Party; provided that if such
default by its nature cannot be cured within said
thirty (30) days and does not involve the payment of
money, then if the Defaulting Party shall not
immediately upon notice from the other Party commence
curing such default and diligently and continuously
pursue such remedy and cure such default within sixty
(60) days;
ii. Digital has the right to and elects to terminate any
of the agreements contemplated under the Asset
Purchase Agreement, including, without limitation, a
complete termination of the Trademark License
Agreement, or a material breach, beyond any
applicable cure period, by the Defaulting Party of
any of its obligations to the other Party, including,
without limitation, under the Asset Purchase
Agreement and/or any of the Ancillary Agreements (as
such term is defined in the Asset Purchase
Agreement);
iii. The Defaulting Party merges with a third-party (not a
parent or subsidiary company) whereby the Defaulting
Party is not the surviving corporation;
iv. The Defaulting Party shall make an assignment for the
benefit of creditors or shall admit in writing its
inability to pay its debts as they
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become;
v. The Defaulting Party shall file a voluntary petition
in bankruptcy, or shall be adjudicated a bankrupt or
insolvent, or shall file any petition or answer
seeking any reorganization arrangement, composition,
readjustment, liquidation, dissolution, or similar
relief under the United States bankruptcy code or
other applicable federal, state or similar statute,
law or regulation, or shall seek or consent to or
acquiesce in the appointment of any trustee, receiver
or liquidator of the Defaulting Party of all or any
substantial part of its properties;
vi. Within thirty (30) days after the
commencement of any proceedings against the
Defaulting Party seeking any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the United States
bankruptcy code or other applicable federal, state or
similar statute, law or regulation, such proceeding
shall not have been dismissed or if, within thirty
(30) days after the appointment, without the consent
or acquiescence of the Defaulting Party of all or any
substantial part of its properties, such appointment
shall not have been vacated; or
vii. Genicom fails to provide Digital with quality
printers and related products delivered on a timely
basis and such failure continues for such period of
time whereby it has or is likely to have in the
aggregate a material adverse effect on (x) Digital's
business as it relates to printer products, or (ii)
Digital's ability to sell computer systems with
printers manufactured or sourced by Genicom.
viii. Any event, action or omission, whether intentional or
otherwise (which is not cured with thirty (30) days
after notice thereof is provided to the Defaulting
Party by the other Party), which is reasonably
determined to have or will have a material adverse
effect on the business activities, financial or
otherwise, reputation or goodwill of the Defaulting
Party.
(c) If either Party elects to terminate this Agreement in
the manner provided in Paragraph (b) above, it shall do so by giving the
Defaulting Party written notice thereof. Upon termination by either Party as
permitted in this Section 14 all obligations between the Parties as set forth
in this Agreement shall terminate immediately, and each Party, will among other
things (x) except as mutually agreed to by the Parties pursuant to Section
15(c), not hold themselves out to the public as having any cooperative
relationship with the other pursuant to any marketing materials or otherwise,
(y) return all Confidential Information (as defined herein) of the other Party
relating to the work and/or services to be performed under this Agreement,
whether so obtained before or after the execution hereof, to the Party
furnishing the same; and all Confidential Information received by either Party
with respect to the business of the other Party shall be treated in accordance
with Section 16 hereof and (z) pursuant to the Trademark License Agreement,
cease selling Digital Branded Products.
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(d) Neither Party shall be obligated for any indirect,
special or consequential damages or lost profits incurred by the other Party
under this Agreement.
15. Exit Conditions.
(a) In the event Digital terminates this Agreement
pursuant to Section 14(a) and fails to give Genicom at least six (6) months
prior written notice of such termination, Digital shall be responsible for all
on-hand and on-order inventory relating to specific large end user contracts,
government contracts, or any other unique forecasted requirements, provided,
however, that Genicom shall use commercially reasonable efforts to mitigate the
amount of such on-hand and on-order inventory, which efforts shall include,
without limitation, (i) selling the inventory to its customers prior to
procuring comparable inventory and providing its sales force with commercially
reasonable incentives therefor and (ii) reworking unique inventory to the
extent commercially practicable, to permit its sale in the ordinary course of
business.
(b) In the event of termination of this Agreement
pursuant to Section 14(a), at Digital's request, the Parties will negotiate an
agreement for providing customer and technical support to Digital's installed
legacy base of printers and other Digital Branded Printers that appropriately
covers Genicom's costs and profit margin.
(c) In the event that Digital provides at least six
months notice to terminate this Agreement pursuant to Section 14(a), Genicom,
at its option (with such option to be elected by notice in writing to Digital
within ten (10) days after Digital provides notice of termination under Section
14(a)) may elect, in lieu of continuing all aspects of this Agreement in full
force and effect until the expiration of the six month period, to terminate the
royalty payments contemplated thereunder, whereupon the Parties obligations
under Sections 1, 2, 3(a), 3(c) 4, 5 and 9 herein shall terminate and be of no
further force and effect.
(d) Upon the termination of this Agreement for any
reason, Genicom shall, upon Digital's request, continue to provide certain
services to Digital on commercially reasonable terms and for a commercially
reasonable period of time to assist Digital in transitioning to another
supplier or suppliers of printer products, including, without limitation,
continuing to procure printer products, components and consumable for Digital's
benefit and providing Digital with access to specifications, drawings and other
technical data for the Digital Branded Products.
(e) In the event of termination of this Agreement
pursuant to Section 14(a), Genicom may continue to indicate, in a manner to be
agreed upon by the Parties, on Genicom's consumables associated with the
Digital branded products marketed by Genicom during the term of this Agreement,
that such consumables have such history and/or compatibility with Digital
branded products. In addition, the Parties shall discuss further whether they
can reach agreement on making such indications with respect to other products
marketed during the term of this Agreement.
(e) In the event of a termination of this Agreement
pursuant to Section 14(a) it
14
is understood that Genicom may continue after the effective date of such
termination to sell Digital branded products as part of an orderly liquidation
process which shall be completed within 90 days after the effective date of
such termination.
16. Confidential Information.
(a) Each of the Parties shall maintain as confidential
and shall not disclose to any person outside its employ, nor use for purposes
other than performance of this Agreement, any proprietary information, trade
secrets, confidential data or know-how of the other party relating to this
Agreement and the performance of the Parties obligations hereunder which is
made or becomes known to either Digital or Genicom (the "Recipient") as a
result of this Agreement ("Confidential Information"). "Confidential
Information" shall include, but shall not be limited to proprietary, technical
developmental, engineering, operating, performance, know-how, trade secrets,
business and process information related to products, purchasing, pricing and
financial information and all records, models, prototypes or other media
containing or disclosing such information and techniques, manufacturing
capacity and yields, labor and value added rates, prices, product plans,
personnel names, material sources and costs, approved vendors, quality data,
build to order systems processes, customer names, test processes, shipment
volumes necessarily communicated between the Parties as part of performance
hereunder. Immediately upon termination of this Agreement for any reason, the
Recipient shall promptly return to the other party hereto all tangible forms of
Confidential Information and all copies thereof. Title to all Confidential
Information shall be and remain with the party providing such Confidential
Information. Confidential Information shall not include information (i)
already known by the Recipient other than pursuant to its due diligence efforts
in connection with its entering into the Asset Purchase Agreement and the
agreements contemplated thereunder, (ii) in the public domain, except as a
result of the Recipient's breach of its obligations hereunder, (iii)
independently developed by the Recipient without reliance on the Confidential
Information or (iv) otherwise obtained by the Recipient from a third party
without similar restrictions and without breach of any obligation owed to the
disclosing party. The Parties shall mutually develop and implement a plan that
addresses confidentiality, data security, account management, communication
access and physical security in connection with the Parties' obligations
hereunder.
(b) Without Digital's prior written consent or except as
required by law, Genicom shall not in any manner disclose, advertise, or
publish the existence of this Agreement or any terms of transactions under this
Agreement, provided, however, that during the term of this Agreement, Genicom
may identify itself in its publications and marketing materials as being an
alliance partner of Digital using language mutually agreed to in writing by the
Parties and Genicom may file this Agreement as an exhibit to any filings with
the Securities and Exchange Commission that it is required to file as
reasonably determined by its counsel, provided that Genicom, at its expense,
requests and uses its best efforts to obtain confidential treatment for any
information contained herein reasonably requested in writing by Digital.
Except as specifically agreed to in writing by Digital, Genicom shall not use
Digital's name, trademark, logo or any derivations thereof for any other
purpose.
(c) The Confidentiality restrictions under paragraphs (a)
and (b) of this Section 16 shall survive the expiration or termination of this
Agreement.
15
17. No Implied License. The Parties understand that, except as
may be otherwise expressly stated in any agreement entered into between them,
neither the terms and conditions of this Agreement, nor the acts of either
Party arising out of this Agreement may be considered in any way as a grant of
any license whatsoever under any of either Party's present or future patents,
copyrights, trademarks, trade secrets, Confidential Information or other
proprietary rights, nor is any such license granted by implication, estoppel,
or otherwise.
18. Miscellaneous
(a) Amendment. This Agreement may not be amended or
modified except by an instrument in writing signed by the Parties hereto.
(b) Waiver. Either Digital or Genicom may (a) extend the
time for the performance of any of the obligations or other acts of the other
Party, (b) waive compliance with any of the agreements or conditions contained
herein. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the Party to be bound thereby.
(c) Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telex, telecopy or facsimile transmission, (iii) sent by overnight
courier, or (iv) sent by registered or certified mail, return receipt
requested, postage prepaid.
(x) if to Digital:
Digital Equipment Corporation
000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Coppermen
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Digital Equipment Corporation
000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxx; Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with an additional copy to:
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
16
One Financial Center
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(y) if to Genicom:
Genicom Corporation
00000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxx, President
and Chief Executive Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
McGuire, Woods, Battle & Xxxxxx, L.L.P.
One Xxxxx Center
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx Sellers, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
All notices, requests, consents and other communications hereunder shall be
deemed to have been given (i) if by hand, at the time of the delivery thereof
to the receiving party at the address of such party set forth above, (ii) if
made by telex, telecopy or facsimile transmission, at the time that receipt
thereof has been acknowledged by electronic confirmation or otherwise, (iii) if
sent by overnight courier, on the next business day following the day such
notice is delivered to the courier service, or (iv) if sent by registered or
certified mail, on the 5th business day following the day such mailing is made.
(d) Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(e) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the transactions
contemplated hereby are not affected in any manner materially adverse to either
of the Parties. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the Parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.
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(f) Entire Agreement. This Agreement and the agreements
referenced herein constitute the entire agreement between the Parties and
supersedes all prior and contemporaneous agreements and undertakings, both
written and oral, between the Parties with respect to the subject matter hereof
and supersedes all prior oral written agreements and understanding relating to
the subject matter hereof.
(g) Assignment; Successors. The rights and obligations
under this Agreement may not be assigned by either Party hereto without the
prior written consent of the other Party; provided, however, that either Party
may assign its rights and obligations under this Agreement, in whole or in
part, to such Party's wholly-owned subsidiaries without the other Party's
consent, provided, further, that no such assignment shall relieve such Party
from its obligations or liabilities hereunder. All statements,
representations, warranties, covenants and agreements in this Agreement shall
be binding on the Parties hereto and shall inure to the benefit of the
respective successors and permitted assigns of each Party hereto. Nothing in
this Agreement shall be construed to create any rights or obligations except
among the Parties hereto, and no person or entity shall be regarded as a
third-party beneficiary of this Agreement.
(h) Independent Contractor Status. The Parties
acknowledge and agree that nothing herein and the performance of each Party's
obligations hereunder shall not create or imply a partnership or joint venture
between the Parties and shall not make either of the Parties a partner,
venturer or agent of the other for any purpose.
(i) Governing Law. This Agreement and the rights and
obligations of the Parties hereunder shall be construed in accordance with and
governed by the law of the Commonwealth of Massachusetts, without giving effect
to the conflict of law principles thereof. Any legal action or proceeding with
respect to this Agreement shall be brought either in the courts of The
Commonwealth of Massachusetts, the Commonwealth of Virginia or the United
States of America for the District of Massachusetts or the Eastern District of
Virginia. By execution and delivery of this Agreement, each of the Parties
hereto accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts with respect to this
Agreement and the rights and obligation of the Parties hereunder. The Parties
hereby irrevocably waive any objection or defense that they may now or
hereafter have to the assertion of personal jurisdiction by any such court in
any such action or to the laying of the venue of any such action in any such
court, and hereby waive, to the extent not prohibited by law, and agree not to
assert, by way of motion, as a defense, or otherwise, in any such proceeding,
any claim that it or he is not subject to the jurisdiction of the above-named
courts for such proceedings. Each of the Parties hereto irrevocably consents
to the service of process of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered mail,
postage prepaid, to the Party at its or his address set forth in Section 18(c)
hereof and irrevocably waive any objection or defense that it may now or
hereafter have to the sufficiency of any such service of process in any such
action. Nothing in this Section 18(i) shall affect the rights of the parties
to commence any such action in any other forum or to serve process in any such
action in any other manner permitted by law.
(j) Compliance With Laws. Each Party shall, in the
performance of its obligations hereunder, fully comply with all applicable
federal, state, local, foreign and other
18
laws and regulations. Upon reasonable request, each Party shall provide the
other Party with information and certifications required to demonstrate
compliance with applicable laws and regulations for the work and/or services
performed under this Agreement. Such Party shall indemnify and hold the other
Party harmless from and against any claims, costs, or damages resulting from
or arising out of the other Party's reliance on such information and/or
certifications.
(k) Interpretation. The Parties hereto acknowledge and
agree that: (i) each Party and its counsel reviewed and negotiated the terms
and provisions of this Agreement and have contributed to its revision; (ii) the
rule of construction to the effect that any ambiguities are resolved against
the drafting Party shall not be employed in the interpretation of this
Agreement; and (iii) the terms and provisions of this Agreement shall be
construed fairly as to all Parties hereto and not in favor of or against any
Party, regardless of which Party was generally responsible for the preparation
of this Agreement.
(l) Counterparts. This Agreement shall become effective
upon execution by both Parties. This Agreement may be executed in one or more
counterparts, and by the Parties in separate counterparts, each of which when
executed shall be deemed to be an original but all of which when taken together
shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed under seal as of the date first written above by their respective
officers thereunto duly authorized.
DIGITAL EQUIPMENT CORPORATION
By:/s/Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx, Senior Vice President and
General Manager, Digital Products Division
GENICOM CORPORATION
By:/s/Xxxx X. Xxxx
Xxxx X. Xxxx, President and Chief
Executive Officer
