STRATEGIC BUSINESS AGREEMENT between OJI PAPER CO., LTD. and VOTORANTIM CELULOSE E PAPEL S.A. Dated as of August 6th, 2007
between
OJI
PAPER
CO., LTD.
and
VOTORANTIM
CELULOSE E PAPEL S.A.
Dated
as
of August 6th,
2007
TABLE
OF
CONTENTS
|
PREAMBLE
|
1
|
|
|
RECITALS
|
1
|
|
|
ARTICLE
I DEFINITIONS
|
1
|
|
|
Section
1.01
|
Certain
Defined Terms
|
1
|
|
Section
1.02
|
Interpretation
and Rules of Construction
|
5
|
|
ARTICLE
II TERMINATION OF THE 2004 AGREEMENT
|
6
|
|
|
Section
2.01
|
Termination
of the 2004 Agreement
|
6
|
|
ARTICLE
III MANUFACTURING LICENSE; ROYALTIES AND PAYMENT
|
6
|
|
|
Section
3.01
|
License
|
6
|
|
Section
3.02
|
Sales
Requirements
|
8
|
|
Section
3.03
|
Payment
|
9
|
|
Section
3.04
|
Keeping
of Records; Audit
|
9
|
|
ARTICLE
IV NEW TECHNOLOGY AND IMPROVEMENTS
|
10
|
|
|
Section
4.01
|
New
Technology
|
10
|
|
Section
4.02
|
Improvements
|
10
|
|
Section
4.03
|
Ongoing
Technical Support
|
11
|
|
Section
4.04
|
English
Language
|
11
|
|
ARTICLE
V ADDITIONAL AGREEMENTS
|
12
|
|
|
Section
5.01
|
Additional
Territories
|
12
|
|
Section
5.02
|
Purchases
by Oji or VCP
|
12
|
|
Section
5.03
|
Right
to Bid
|
12
|
|
Section
5.04
|
Global
Network
|
13
|
|
Section
5.05
|
Strategy
Meetings
|
13
|
|
Section
5.06
|
Yearly
Mill Surveys
|
13
|
|
Section
5.07
|
Inquiry
with Exclusive Territory
|
13
|
|
Section
5.08
|
Quality
Control
|
13
|
|
Section
5.09
|
Quality
Analysis
|
14
|
|
Section
5.10
|
Cost
Reductions
|
14
|
|
ARTICLE
VI CONFIDENTIALITY
|
14
|
|
|
Section
6.01
|
Confidential
Information
|
14
|
|
Section
6.02
|
Obligations
|
14
|
|
Section
6.03
|
Authorized
Disclosure
|
14
|
|
Section
6.04
|
Employees;
Agents
|
15
|
|
Section
6.05
|
Return
of Confidential Information
|
15
|
|
Section
6.06
|
Remedies
Upon Breach
|
15
|
|
ARTICLE
VII TERM; TERMINATION
|
15
|
|
|
Section
7.01
|
Term
|
15
|
|
Section
7.02
|
Term
Extensions
|
15
|
|
Section
7.03
|
Termination
|
16
|
|
Section
7.04
|
Effect
of Termination
|
17
|
|
ARTICLE
VIII MISCELLANEOUS
|
17
|
|
|
Section
8.01
|
Assignment
|
17
|
|
Section
8.02
|
Notices
|
17
|
|
Section
8.03
|
Choice
of Law
|
18
|
|
Section
8.04
|
Venue/Arbitration
|
18
|
|
Section
8.05
|
Indemnification;
Defense Against Complaint
|
18
|
|
Section
8.06
|
Entire
Agreement; Amendments and Waivers
|
19
|
|
Section
8.07
|
Counterparts
|
19
|
|
Section
8.08
|
Invalidity
|
19
|
|
Section
8.09
|
Headings
|
19
|
|
Section
8.10
|
Expenses
|
19
|
|
Section
8.11
|
Publicity
|
19
|
i
|
Section
8.12
|
Independent
Contractor
|
19
|
|
Section
8.13
|
Severability
of Provisions
|
19
|
|
Section
8.14
|
Force
Majeure
|
19
|
|
Section
8.15
|
Official
Language
|
19
|
|
Section
8.16
|
Translation
|
20
|
|
ARTICLE
IX ACKNOWLEDGEMENTS
|
20
|
|
|
Section
9.01
|
Acknowledgements
of Oji and VCP
|
20
|
Schedules
|
1.01(a)
|
Current
Technology
|
|
4.01(a)
|
Thermal
Paper Products Ready for
Commercialization
|
ii
PREAMBLE
This
STRATEGIC BUSINESS AGREEMENT (the “Agreement”)
is
made as of August 6, 2007 by and between OJI PAPER CO., LTD., a Japanese
corporation having its registered office at 0-0, Xxxxx 0-Xxxxx, Xxxx-xx, Xxxxx,
000-0000, Xxxxx (“Oji”)
and
VOTORANTIM CELULOSE E PAPEL S.A., a Brazilian corporation having its registered
office at Xxxxxxx Xxxxxx, 0000, 0xx
xxxxx,
Xxxxxxxxx Xxxxx, 01419-908, Sao Paulo, SP, Brazil, registered at CNPJ under
No
60.000.000-0000-21
(“VCP”)
RECITALS
WHEREAS,
there is a long history of mutually beneficial cooperation between Oji and
VCP;
WHEREAS,
Oji and VCP are currently parties to a Technology Transfer Agreement, dated
as
of October 4, 2004 (the “2004
Agreement”),
pursuant to which Oji has licensed the Current Technology (as defined below)
to
VCP;
WHEREAS,
Oji and VCP wish to terminate the 2004 Agreement and extend and expand their
relationship as provided herein; and
WHEREAS,
Oji and VCP intend through this Agreement to collaborate on future Improvements
(as defined below) of the Current Technology and the New Technology (as defined
below) in order to enhance the economic efficiency through the exchange of
Trade-Secrets, Trade Marks and Copyrights of (a) the use of such Current
Technology and New Technology and (b) the development of such Improvements
to
such Current Technology and New Technology;
NOW
THEREFORE, in consideration of the premises and mutual agreements and covenants
hereinafter set forth, and intending to be legally bound, Oji and VCP hereby
agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Certain
Defined Terms.
For
purposes of this Agreement:
“2004
Agreement”
shall
have the meaning set forth in the Recitals.
“Additional
Territory”
shall
have the meaning set forth in Section
5.01(a).
“Additional
Territory Distributor”
shall
have the meaning set forth in Section
5.01(b).
“Additional
Territory Written Consent”
shall
have the meaning set forth in Section
5.01(a).
“Additional
Thermal Paper Products”
shall
have the meaning set forth in Section 4.01(b).
“Agreement”
shall
have the meaning set forth in the Preamble, and shall include all Exhibits
and
Schedules attached hereto.
“Base
Paper”
shall
mean any cellulose substrate capable of receiving a heat-sensitive coating
designed to exhibit an image upon heat activation, normally from a thermal
print
head, which may be either overcoated or non-overcoated, depending on the end-use
application (which may or may not include an impact printing
process).
1
“Breach
Notice”
shall
have the meaning set forth in Section
6.06(a).
“Business
Day”
shall
mean any day that is not a Saturday or Sunday or other day on which commercial
banks in New York are authorized or required by law to close.
“Contract
Year”
shall
mean, with respect to the first Contract Year, the period beginning on the
date
hereof and ending on the one year anniversary of this Agreement, and with
respect to the second Contract Year and each Contract Year thereafter, each
successive year commencing the date hereof and ending upon the expiration of
the
Royalty License.
“Change
of Control”
shall
mean, with respect to either party to this Agreement, (a) any conveyance,
transfer, lease, sale or disposition of all or substantially all of such party’s
assets to any Person or Persons or (b) any acquisition of ownership by any
Person or group of related Persons, whether directly or indirectly, of fifty
percent (50%) or more of the issued and outstanding voting securities of such
party.
“Confidential
Information”
shall
have the meaning set forth in Section
6.01.
“Copyrights”
shall
mean mask works, rights of publicity and privacy, and copyrights of works of
authorship of any type, including software, registrations and applications
for
registration thereof throughout the world, all rights therein provided by
international treaties and conventions, all moral and common law rights thereto,
and all other rights associated therewith.
“Counter
Offer Purchase Price”
shall
have the meaning set forth in Section
5.03(c).
“Cure
Period”
shall
have the meaning set forth in Section
6.06(a).
“Current
Technology”
shall
mean Oji’s Intellectual Property that was licensed to VCP pursuant to the 2004
Agreement, including any of Oji’s Intellectual Property that was or is used in
the manufacture, sale or distribution of any Thermal Paper Product being sold
as
of the date hereof under the product legacy names set forth on Schedule
1.01(a).
“Disclosing
Party”
shall
have the meaning set forth in Section
6.01.
“Exclusive
Territory”
shall
mean the Federative Republic of Brazil.
“Exclusive
Territory License Amount”
shall
mean, with respect to a specified period of time, the amount payable to Oji
by
VCP under Sections
3.01
with
respect to the sale or distribution of Licensed Thermal Paper Products in the
Exclusive Territory.
“Exclusivity
Period”
shall
have the meaning set forth in Section
5.03(d).
“Fair
Market Value”
shall
mean either the last Oji Effective Price for applicable Thermal Paper Products
or the last VCP Effective Price for applicable Licensed Thermal Paper
Products.
“Five
Year Licensed Thermal Paper Product”
shall
have them meaning set forth in Section
3.01(a).
“Improvements”
shall
mean any Intellectual Property designated as improvements to the Current
Technology or the New Technology by (i) Oji or its Subsidiaries (such
designation being consistent with past practice), if developed by Oji or its
Subsidiaries, or (ii) VCP (such designation consistent with past practice),
if
developed by VCP.
2
“Initial
Term”
shall
have the meaning set forth in Section
7.01.
“Intellectual
Property”
shall
mean (a) Patents, (b) Trademarks, (c) Copyrights and (d) Trade
Secrets.
“Law”
shall
mean any federal, national, supranational, state, provincial, local or similar
statute, law, ordinance, regulation, rule, code, order, requirement or rule
of
law (including common law).
“Licensed
Thermal Paper Products”
shall
mean Thermal Paper Products manufactured, sold or distributed using the Current
Technology or the New Technology, or any Improvements thereto that may be
required to be licensed to VCP pursuant to Section
4.02.
“Liquidated
Damages”
shall
have the meaning set forth in Section
6.06(a).
“Losses”
shall
have the meaning set forth in Section
8.05(a)
“Marketing
Research”
shall
have the meaning set forth in Section
4.01(c).
“Mill
Survey”
shall
have the meaning set forth in Section
5.06.
“Net
Sales Price”
shall
mean the invoice price, less applicable sales tax or charges, discounts, freight
charges, and credits for returns.
“New
Technology”
shall
mean all Intellectual Property provided by Oji or its Subsidiaries to VCP
pursuant to the terms of Section
4.01
on or
after the date hereof used or to be used in the production of Thermal Paper
Products (whether such products are sold under new product legacy names or
the
same product legacy names listed on Schedule
1.01(a))
pursuant to the terms of this Agreement and designated as new technology by
Oji
or its Subsidiaries (such designation being consistent with past practice),
including the formula, production techniques of base paper, preparation
techniques of the color and related equipment, coating techniques and related
equipment, finishing equipment, quality control techniques for raw materials,
and other technical information and know-how.
“New
Technology Transfer Date”
shall
mean, with respect to New Technology necessary to manufacture a particular
Selected Thermal Paper Product, the date on which Oji or one of its Subsidiaries
provides VCP with a know-how book that describes in reasonably adequate detail
such New Technology.
“New
Technology Transfer Program”
shall
have the meaning set forth in Section
4.02(d).
“New
Thermal Paper Products”
shall
have the meaning set forth in Section
4.01(b).
“Non-Exclusive
Territory”
shall
mean Belize; Republic of Guatemala; Republic of Honduras; Republic of El
Salvador; Republic of Nicaragua; Republic of Costa Rica; Republic of Panama;
Republic of Trinidad and Tobago; Commonwealth of the Bahamas; Republic of Cuba;
Republic of Haiti; Commonwealth of Dominica; Dominican Republic; Jamaica;
Republic of Venezuela; Cooperative Republic of Guyana; Republic of Suriname;
Republic of Columbia; Republic of Ecuador; Republic of Peru; Republic of
Bolivia; Republic of Paraguay; Republic of Chile; Oriental Republic of Uruguay;
Argentine Republic; Barbados; Saint Xxxxxxx and the Grenadines; Saint Lucia;
Antigua and Barbuda; Federation of Saint Kitts and Nevis; the following
dependant territories of the United Kingdom of Great Britain and Northern
Ireland: Anguilla; Bermuda; British Virgin Islands, Xxxxxx Xxxxxxx, Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxx and the South Sandwich Islands, and the
Turks
and Caicos Islands; the following territories of the French Republic: Xxxxxxxxx,
Martinique and French Guiana; and, the following dependant territories of the
Kingdom of the Netherlands: Aruba and Netherlands Antilles.
“Non-Renewal
Notice”
shall
have the meaning set forth in Section
7.02.
“Oji”
shall
have the meaning set forth in the Preamble.
3
“Oji
Effective Price”
shall
mean the per unit price for each type of Thermal Paper Product.
“Oji
Effective Price Period”
shall
mean with respect to any particular Oji Effective Price, a period commencing
when Oji or its Subsidiaries first offers such Oji Effective Price to any Person
and ending when Oji or its Subsidiaries increases such Oji Effective Price
offered to any Person with a similar credit rating and on similar credit terms
with respect to purchases of similar quantities of such Thermal Paper Products
of a similar quality and grade and taking into account all other material terms
and conditions related to such sale.
“Oji
Offer”
shall
have the meaning set forth in Section
5.03(b).
“Oji
Technology Thermal Paper Product”
shall
have the meaning set forth in Section
5.01(a).
“Other
Products”
shall
mean Thermal Paper Products manufactured using technology licensed from a party
other than Oji or its Subsidiaries.
“Patents”
shall
mean, in any jurisdiction throughout the world, patents, patent applications
and
statutory invention registrations, including reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations thereof, and all rights
therein provided by international treaties and conventions.
“Perpetual
License”
shall
have the meaning set forth in Section
3.01(a).
“Person”
shall
mean an individual, corporation, partnership, association, trust or other entity
or organization, including a government or political subdivision or an agency
or
instrumentality thereof.
“Receiving
Party”
shall
have the meaning set forth in Section
6.01.
“Royalty
License”
shall
have the meaning set forth in Section
3.01(a).
“Sale
Assets”
shall
have the meaning set forth in Section
5.03(a).
“Sale
Notice”
shall
have the meaning set forth in Section
5.03(a).
“Selected
Thermal Paper Products”
shall
have the meaning set forth in Section 4.01(c).
“Service
Deductible”
shall
have the meaning set forth in Section
4.03(d).
“Statement
of No Interest”
shall
have the meaning set forth in Section
5.03(b).
“Strategy
Meeting”
shall
have the meaning set forth in Section
5.05.
“Subsidiary”
shall
mean, with respect to Oji, Kanzan Spezialpapiere GmbH, Kanzaki Specialty Papers,
Inc., Oji Paper (Thailand) Ltd. and any corporation, partnership, limited
partnership, limited liability company or other entity that manufactures, sells
or distributes Thermal Paper Products and as to which Oji, directly or
indirectly (including through one or more Subsidiaries), owns a majority of
the
outstanding shares of stock or other ownership interests having voting power
under ordinary circumstances to elect directors of such corporation or other
Persons performing similar functions for such entity; and shall mean, as to
any
other specified Person, any corporation, partnership, limited partnership,
limited liability company or other entity as to which the specified Person,
directly or indirectly (including through one or more Subsidiaries), owns a
majority of the outstanding shares of stock or other ownership interests having
voting power under ordinary circumstances to elect directors of such corporation
or other Persons performing similar functions for such entity.
“Term”
shall
have the meaning set forth in Section
7.02.
4
“Thermal
Paper Product”
shall
mean any cellulose substrate coated with a heat-sensitive coating, through
a
chemical reaction, designed to exhibit an image upon heat activation, through
a
chemical reaction, normally from a thermal print head, which may be either
overcoated or non-overcoated, depending on the end-use application (which may
or
may not include an impact printing process).
“Trade
Secrets”
shall
mean trade secrets, know-how and other confidential or proprietary technical,
business and other information, including manufacturing and production processes
and techniques (included in related know-how books), research and development
information, technology, drawings, specifications, designs, plans, proposals,
technical data, financial, marketing and business data, pricing and cost
information (such pricing and cost information limited to information relating
to the Licensed Thermal Paper Products and not including pricing and cost
information for unrelated products), business and marketing plans, customer
and
supplier lists and information, and all rights in any jurisdiction to limit
the
use or disclosure thereof.
“Trademarks”
shall
mean trademarks, service marks, trade dress, logos, trade names, corporate
names, URL addresses, domain names and symbols, slogans and other indicia of
source or origin, including the goodwill of the business symbolized thereby
or
associated therewith, common law rights thereto, registrations and applications
for registration thereof throughout the world, all rights therein provided
by
international treaties and conventions, and all other rights associated
therewith.
“VCP”
shall
have the meaning set forth in the Preamble.
“VCP
Acceptance”
shall
have the meaning set forth in Section
5.03(c).
“VCP
Counter Offer”
shall
have the meaning set forth in Section
5.03(c).
“VCP
Effective Price”
shall
mean the per unit price for each type of Licensed Thermal Paper
Product.
“VCP
Effective Price Period”
shall
mean with respect to any particular VCP Effective Price, a period commencing
when VCP or its Subsidiaries first offers such VCP Effective Price to any Person
and ending when VCP or its Subsidiaries increases such VCP Effective Price
offered to any Person with a similar credit rating and on similar credit terms
with respect to purchases of similar quantities of such Licensed Thermal Paper
Products of a similar quality and grade and taking into account all other
material terms and conditions related to such sale.
“Written
Analysis”
shall
have the meaning set forth is Section
3.02(a).
Section
1.02 Interpretation
and Rules of Construction. In
this
Agreement, except to the extent otherwise provided or that the context otherwise
requires:
(a) when
a
reference is made in this Agreement to an Article, Section, Exhibit or Schedule,
such reference is to an Article or Section of, or a Schedule or Exhibit to,
this
Agreement unless otherwise indicated;
(b) the
table
of contents and headings for this Agreement are for reference purposes only
and
do not affect in any way the meaning or interpretation of this
Agreement;
(c) whenever
the words “include,” “includes” or “including” are used in this Agreement, they
are deemed to be followed by the words “without limitation”;
(d) the
words
“hereof,” “herein” and “hereunder” and words of similar import, when used in
this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;
(e) all
terms
defined in this Agreement have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto, unless otherwise defined
therein;
5
(f) the
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms;
(g) any
Law
defined or referred to herein or in any agreement or instrument that is referred
to herein means such Law or statute as from time to time amended, modified
or
supplemented, including by succession of comparable successor Laws in effect
as
of Closing;
(h) references
to a Person are also to its successors and permitted assigns; and
(i) the
use
of “or” is not intended to be exclusive unless expressly indicated
otherwise.
ARTICLE
II
TERMINATION
OF THE 2004 AGREEMENT
Section
2.01 Termination
of the 2004 Agreement.
Except
as
explicitly provided for herein, the 2004 Agreement is hereby terminated and
is
of no further force and effect; provided,
however,
that
(a) those obligations on the part of either Oji or VCP contained in Section
13
and
16(b)
of the
2004 Agreement shall survive the termination of such agreement, (b) VCP shall
remain liable to Oji for all amounts due and unpaid under the 2004 Agreement
and
(c) nothing shall relieve either Oji or VCP for any liability resulting from
any
breach of the 2004 Agreement. For purposes of clarity, after the termination
of
the 2004 Agreement, Oji shall remain the sole owner of the Current Technology
and, except as limited by this Agreement, reserves the right in any manner
to
license, use or sell the Current Technology and in any manner to make, use,
sell
or distribute Thermal Paper Products manufactured, sold or distributed using
the
Current Technology.
ARTICLE
III
MANUFACTURING
LICENSE; ROYALTIES AND PAYMENT
Section
3.01 License.
(a)
Oji
hereby grants and agrees to grant to VCP a non-assignable license to use the
Current Technology and the New Technology, and any Improvements thereto that
may
be required to be licensed pursuant to Section
4.02,
to
(i) be the exclusive (even as to Oji) manufacturer of Licensed Thermal
Paper Products in the Exclusive Territory, (ii) be the exclusive (even as to
Oji) seller or distributor of Licensed Thermal Paper Products in the Exclusive
Territory and (iii) to be a non-exclusive seller or distributor of Licensed
Thermal Paper Products in the Non-Exclusive Territory, in each case until the
end of the Term or, with respect to Thermal Paper Products manufactured using
New Technology having a New Technology Transfer Date of October 4, 2009 or
later, the later of (x) the fifth anniversary of the New Technology Transfer
Date and (y) the end of the Term (the “Royalty
License”);
provided,
however,
that
for each Licensed Thermal Paper Product for which VCP has paid Oji five years
of
royalties pursuant to the terms of this Agreement (a “Five
Year Licensed Thermal Paper Product”),
the
Royalty License with regard to such Five Year Licensed Thermal Paper Product
shall be converted automatically into a non-assignable, royalty free license
to
non-exclusively manufacture such Licensed Thermal Paper Product in the Exclusive
Territory and non-exclusively sell or distribute such Licensed Thermal Paper
Product in the Exclusive Territory and the Non-Exclusive Territory (a
“Perpetual
License”).
Notwithstanding the foregoing, the Royalty License shall not be converted into
a
Perpetual License with regard to any Five Year Licensed Thermal Paper Product
while VCP is in breach of this Agreement in any material respect. If the Royalty
License is to be converted into a Perpetual License with respect to a Five
Year
Licensed Thermal Paper Product pursuant to the terms of this
Section 3.01,
then no
action need be taken by Oji to convert such Royalty License with respect to
such
Five Year Licensed Thermal Paper Product into a Perpetual License, it being
understood that once a Perpetual License for a Five Year Thermal Paper Product
is obtained pursuant to this Section
3.01,
such
Perpetual License may not be revoked even due to a subsequent breach of this
Agreement by VCP. Upon expiration of the Royalty License pursuant to the terms
of this Agreement, VCP shall no longer have any rights to manufacture any
Licensed Thermal Paper Products that are not the subject of a Perpetual License
granted pursuant to the terms of this Section
3.01.
VCP
shall not have the right to use the Current Technology and the New Technology,
and any Improvements thereto that may be required to be licensed pursuant to
Section
4.02,
for any
purpose not expressly granted by this Agreement.
6
(b) VCP
may
not use any of the Current Technology or New Technology for any purpose not
specifically enumerated in this Agreement.
(c) VCP
shall
pay Oji royalties on the Net Sales Price of all products sold or distributed
under the Royalty License in the following amounts:
(i) Two
percent (2.0%) on Thermal Paper Products manufactured, sold or distributed
using
any of the Trade Secrets contained in the Current Technology, from the date
hereof through December 31, 2007.
(ii) One
and
one-half percent (1.5%) on Thermal Paper Products manufactured, sold or
distributed using any of the Trade Secrets contained in the Current Technology
relating to the manufacture, sale or distribution of Thermal Paper Products
listed as items 1 and 2 on Schedule
1.01(a),
from
January 1, 2008 to December 31, 2008.
(iii) One
percent (1.0%) on Thermal Paper Products manufactured, sold or distributed
using
any of the Trade Secrets contained in the Current Technology relating to the
manufacture, sale or distribution of Thermal Paper Products listed as items
3
and 4 on Schedule
1.01(a),
from
January 1, 2008 through December 31, 2008.
(iv) One
percent (1.0%) on Thermal Paper Products manufactured, sold or distributed
using
any of the Trade Secrets contained in the Current Technology, from January
1,
2009 until a Perpetual License is granted for such Thermal Paper
Products.
(v) Three
and
one-half percent (3.5%) on Selected Thermal Paper Products manufactured, sold
or
distributed using any New Technology with a New Technology Transfer Date prior
to October 4, 2009, from the date hereof through October 3, 2009.
(vi) Two
and
one-half percent (2.5%) on Selected Thermal Paper Products manufactured, sold
or
distributed using any New Technology with a New Technology Transfer Date prior
to October 4, 2009, from October 4, 2009 through October 3, 2011.
(vii) Two
percent (2.0%) on Selected Thermal Paper Products manufactured, sold or
distributed using any New Technology with a New Technology Transfer Date prior
to October 4, 2009, from October 4, 2011, through October 3, 2012.
(viii) One
and
one-half percent (1.5%) on Selected Thermal Paper Products manufactured, sold
or
distributed using any New Technology with a New Technology Transfer Date prior
to October 4, 2009, from October 4, 2012 through October 3, 2013.
(ix) One
percent (1.0%) on Selected Thermal Paper Products manufactured, sold or
distributed using any New Technology with a New Technology Transfer Date prior
to October 4, 2009, from October 4, 2013 until a Perpetual License is granted
for such Selected Thermal Paper Products.
(x) Two
and
one-half percent (2.5%) on Selected Thermal Paper Products manufactured, sold
or
distributed using any New Technology with a New Technology Transfer Date on
or
after October 4, 2009, from the New Technology Transfer Date of such New
Technology until the second anniversary of such date (such royalty payments
shall extend beyond the Term if, and only if, this Agreement terminates pursuant
to Sections
7.03(b),
7.03(e)(i),
7.03(e)(ii),
7.03(e)(iii),
7.03(e)(iv),
7.03(e)(v)
or
7.03(e)(vi)).
(xi) Two
percent (2.0%) on Selected Thermal Paper Products manufactured, sold or
distributed using any New Technology with a New Technology Transfer Date on
or
after October 4, 2009, from the second anniversary of the New Technology
Transfer Date of such New Technology until the third anniversary of such date
(such royalty payments shall extend beyond the Term if, and only if, this
Agreement terminates pursuant to Sections
7.03(b),
7.03(e)(i),
7.03(e)(ii),
7.03(e)(iii),
7.03(e)(iv),
7.03(e)(v)
or
7.03(e)(vi)).
7
(xii) One
and
one-half percent (1.5%) on Selected Thermal Paper Products manufactured, sold
or
distributed using any New Technology with a New Technology Transfer Date on
or
after October 4, 2009, from the third anniversary of the New Technology Transfer
Date of such New Technology until the fourth anniversary of such date (such
royalty payments shall extend beyond the Term if, and only if, this Agreement
terminates pursuant to Sections
7.03(b),
7.03(e)(i),
7.03(e)(ii),
7.03(e)(iii),
7.03(e)(iv),
7.03(e)(v)
or
7.03(e)(vi)).
(xiii) One
percent (1.0%) on Selected Thermal Paper Products manufactured, sold or
distributed using any New Technology with a New Technology Transfer Date on
or
after October 4, 2009, from the fourth anniversary of the New Technology
Transfer Date for such New Technology until the Royalty License is converted
into a Perpetual License for such Selected Thermal Paper Products pursuant
to
Section
3.01(a)
(such
royalty payments shall extend beyond the Term if, and only if, this Agreement
terminates pursuant to Sections
7.03(b),
7.03(e)(i),
7.03(e)(ii),
7.03(e)(iii),
7.03(e)(iv),
7.03(e)(v)
or
7.03(e)(vi)).
Notwithstanding
anything to the contrary contained in this Section
3.01,
the
royalty rate contained in any subsection (v) through (xiii) of this Section
3.01
shall be
reduced by one quarter of one percent (0.25%) on Selected Thermal Paper Products
described in any such subsection that do not have a Patent on file and in effect
in the Exclusive Territory.
(d) Oji
and/or its Subsidiaries are the sole owners of the Current Technology and the
New Technology, and any Improvements thereto required to be licensed to VCP
pursuant to Section 4.02, and, except as limited by this Agreement, Oji and
its
Subsidiaries reserve the right in any manner to license, use or sell the Current
Technology or the New Technology, or any such Improvements thereto, and in
any
manner to make, use, sell or distribute Thermal Paper Products manufactured,
sold or distributed using the Current Technology or the New
Technology.
(e) For
avoidance of doubt, Oji and VCP agree and acknowledge that nothing in this
Agreement shall be construed to limit VCP’s rights or ability to manufacture,
sell or distribute Other Products in the Exclusive Territory or Non-Exclusive
Territory, provided
that (i)
such Other Products are limited to light weight (60 grams or less),
non-overcoated Thermal Paper Products and (ii) do not exceed three thousand,
five hundred (3,500) metric tons in any given Contract Year. Notwithstanding
anything to the contrary in this Agreement, VCP may not manufacture, sell or
distribute Other Products in the Exclusive Territory or the Non-Exclusive
Territory except for such Other Products that (i) are light weight (60 grams
or
less), non-overcoated Thermal Paper Products and (ii) do not exceed three
thousand, five hundred (3,500) metric tons in any given Contract Year. Oji
and
VCP further acknowledge and agree that VCP may sell or distribute Licensed
Thermal Paper Products through its agents as if VCP had sold or distributed
such
Licensed Thermal Paper Products directly itself.
Section
3.02 Sales
Requirements.
(a)
For
each Contract Year until the expiration of the Royalty License, VCP shall use
all commercially reasonable efforts to sell or distribute a unit volume of
Licensed Thermal Paper Products in the Exclusive Territory that equals or
exceeds eighty percent (80%) of the units of Licensed Thermal Paper Products
sold by VCP in the Exclusive Territory during the immediately preceding Contract
Year (and for the first Contract Year, the immediately preceding twelve (12)
month period) (the “Sales
Threshold”).
If
the unit volume of Licensed Thermal Paper Products sold or distributed by VCP
in
the Exclusive Territory during any Contract Year is below the Sales Threshold,
then VCP shall provide Oji with a written analysis of the reasons for such
sales
performance (the “Written
Analysis”)
within
30 days of the end of such Contract Year. After receipt of such Written
Analysis, Oji shall have the option to (i) work with VCP to bolster sales and
address any issues raised by VCP in the Written Analysis, (ii) terminate this
Agreement, but only if (a) Oji reasonably and in good faith expects that VCP
will be unable to meet the Sales Threshold in a second consecutive Contract
Year
and provides VCP with a written analysis supporting such conclusion or (b)
VCP
has missed the Sales Threshold in two consecutive Contract Years.
8
(b) Until
the
end of the expiration of the Royalty License, VCP shall use commercially
reasonable efforts to maximize the volume of Licensed Thermal Paper Products
sold or distributed by VCP in the Non-Exclusive Territory, subject to and
consistent with VCP’s obligations to meet the Sales Threshold in the Exclusive
Territory for any given Contract Year, and further subject to the sale and
distribution of those Other Products it is permitted to sell pursuant to the
terms of Section
3.01(e).
Section
3.03 Payment. (a)
Amounts
due pursuant to Section
3.01
on
Thermal Paper Products sold by VCP shall be calculated every calendar quarter
based on the average Net Sales Price of each different type of Thermal Paper
Product sold during such calendar quarter.
(b) Amounts
due pursuant to Section
3.01
shall be
paid within thirty (30) days of the close of the calendar quarter in which
such
amounts become due.
(c) All
payments made hereunder shall be made in U.S. dollars, after deducting any
withholding taxes imposed under the Laws of the Federative Republic of Brazil,
by wire transfer of immediately available funds to Oji’s account with such bank
as Oji may designate from time to time by written notice to VCP.
(d) For
purposes of determining the amount of any payment due to Oji under this
Agreement:
(i) amounts
in Brazilian reais shall be converted to U.S. dollars by applying the exchange
rate announced by the Brazilian Central Bank as of the close of business on
the
last Business Day of the calendar quarter in which such amounts become
due;
(ii) any
amounts that may be in currencies other than reais or U.S. dollars shall first
be converted to Brazilian reais by applying the applicable exchange rate
announced by the Brazilian Central Bank as of the close of business on the
last
Business Day of the calendar quarter in which such amounts become due and then
shall be converted to U.S. dollars by applying the exchange rate announced
by
the Brazilian Central Bank as of the close of business on such
date.
(e) In
the
event that VCP fails to pay any amounts owing to Oji pursuant to Section
3.01
within
the time allotted for such payment by this Section 3.04,
then
VCP shall pay interest on all amounts at a rate of ten percent (10%) per annum,
calculated daily, until such monies are paid in full; provided,
however,
that
the delay in payment of such amounts is not a result of foreign exchange control
Laws of Brazil, in which case VCP shall promptly notify Oji of the reasons
for
the delay and consult with Oji in good faith about the settlement of such
delayed payment.
Section
3.04 Keeping
of Records; Audit. (a)
VCP
shall maintain accurate records of product type, manufacturing unit volume,
sales unit quantity, pricing, net sales, customer name and country of sale
or
distribution for all Licensed Thermal Paper Products manufactured, sold or
distributed by VCP in sufficient detail to accurately carry out the calculations
required pursuant to Section
3.01.
VCP
shall provide to Oji within thirty (30) days after the end of each calendar
quarter a written statement showing the results of product type, manufacturing
unit volume, sales unit quantity, pricing, net sales, customer name and country
of sale or distribution for each type of Licensed Thermal Paper Product
manufactured, sold or distributed during such calendar quarter (in sufficient
detail to audit the calculations required pursuant to Section
3.01)
and the
total amount payable to Oji thereon.
(b) VCP
shall
xxxxx Xxx’x auditors or other representatives reasonable access to and
inspection of such records and documents as are necessary or desirable to verify
the accuracy of the records, statements and other information referenced in
Section
3.04(a)
at any
time during VCP’s normal business hours and shall afford all necessary
facilities and assistance to such auditors or other
representatives.
9
ARTICLE
IV
NEW
TECHNOLOGY AND IMPROVEMENTS
Section
4.01 New
Technology. (a) Schedule
4.01
attached
hereto includes a list of all currently existing Thermal Paper Products
developed by Oji or its Subsidiaries and designated by Oji or its Subsidiaries
as ready for the commercialization process (such designation being consistent
with past practice), in respect of production techniques not licensed to VCP
as
of the date hereof. For an abundance of clarity, Intellectual Property used
to
manufacture, sell or distribute Thermal Paper Products set forth on Schedule
4.01
previously has not been licensed to VCP and may become New Technology pursuant
to this Section
4.01.
Oji
shall give VCP notice of any Thermal Paper Product not listed on Schedules
1.01(a)
and
4.01
and
developed after the date hereof by Oji or its Subsidiaries (an “Additional
Thermal Paper Product,”
and
together with those Thermal Paper Products listed on Schedule
4.01,
the
“New
Thermal Paper Products”)
promptly after such Additional Thermal Paper Product is designated as ready
for
the commercialization process by Oji or its Subsidiaries (such designation
being
consistent with past practice). In the event VCP wishes to challenge a
determination, or lack thereof, by Oji or its Subsidiaries as to the designation
of certain Intellectual Property owned by Oji or its Subsidiaries as an
Additional Thermal Paper Product or the readiness of an Additional Thermal
Paper
Product for commercialization, Oji and VCP agree to submit such dispute to
arbitration pursuant to Section
8.04.
(b) In
the
event that VCP wishes to manufacture and sell or distribute one or more New
Thermal Paper Products, Oji shall share with VCP information regarding such
New
Thermal Paper Products’ uses and applications, main raw materials, cost
information and necessity of production line changes, based on which VCP shall
gather commercially reasonable market information (the “Marketing
Research”)
and
share such information with Oji to determine, jointly with Oji, whether there
is
sufficient demand for each such New Thermal Paper Product in the Exclusive
Territory or Non-Exclusive Territory to merit a start of production. Based
on
the Marketing Research, Oji shall work together with VCP to jointly select
one
or more New Thermal Paper Products that best suit the demand for Thermal Paper
identified in the Marketing Research (“Selected
Thermal Paper Products”)
and
Oji shall, or shall cause its Subsidiaries to, provide VCP with a know-how
book
that describes in reasonably adequate detail the New Technology necessary to
manufacture such Selected Thermal Paper Products.
(c) Oji
and
VCP shall mutually devise and execute a program to provide VCP with reasonable
access to appropriate technical personnel of Oji or its Subsidiaries to provide
on-site technical support and training at VCP facilities in order to ensure
that
New Technology is transferred to VCP in accordance with the terms of this
Section
4.01
within a
commercially reasonable time period (the “New
Technology Transfer Program”).
VCP
shall bear all additional expenses of the New Technology Program, including
traveling and living expenses of Oji’s or its Subsidiaries’
employees.
(d) In
the
event that either party provides to the other a Non-Renewal Notice pursuant
to
Section
7.02,
the
obligations of this Section
4.01
shall
terminate and Oji shall be under no obligation to provide and license to VCP
additional New Technology (which has not previously been transferred to VCP)
from the date thereof.
Section
4.02 Improvements.
(a) In
the event that Improvements to the Current Technology or the New Technology
are
developed by Oji or its Subsidiaries, Oji shall, or shall cause its Subsidiaries
to, provide VCP with a know-how book that that describes in reasonably adequate
detail such Improvements promptly after such Improvements are ready to be
incorporated into a corresponding Thermal Paper Product’s manufacturing process.
Oji shall, or shall cause its Subsidiaries to, grant to VCP a non-exclusive
license to use all Improvements developed by Oji or its Subsidiaries in the
manufacturing, sale or distribution of Licensed Thermal Paper Products until
the
expiration of the Royalty License or, if Oji or its subsidiaries have developed
an Improvement for a Licensed Thermal Paper Product that is subject to a
Perpetual License, in connection with any such applicable Perpetual License.
This agreement shall serve as consideration for all such licenses granted by
Oji
to VCP to use all Improvements developed by Oji, and VCP shall not be required
to provide payment in addition to royalty payments described in Section
3.01
for the
use of such Improvements. Oji shall provide VCP with reasonable access to
appropriate technical personnel of Oji or its Subsidiaries to provide on-site
technical support and training at VCP facilities in order to ensure that
Improvements are transferred to VCP in accordance with the terms of this
Section
4.02(a)
within a
commercially reasonable time period. VCP shall pay Oji $1,000 per employee
of
Oji or its Subsidiaries per day, or part thereof, for each such employee
providing on-site technical support and training at VCP facilities pursuant
to
this Section
4.02(a),
plus
VCP shall bear all additional expenses related to this Section
4.02(a),
including traveling and living expenses of Oji’s or its Subsidiaries’
employees.
10
(b) In
the
event that Improvements to the Current Technology or the New Technology are
developed by VCP, VCP shall provide Oji with a know-how book that describes
in
reasonably adequate detail such Improvements promptly after such Improvements
are ready to be incorporated into a corresponding Thermal Paper Product’s
manufacturing process. VCP shall grant to Oji and its Subsidiaries a
non-exclusive license to use all Improvements developed by VCP in the
manufacturing, sale or distribution of Licensed Thermal Paper Products in
perpetuity. This agreement shall serve as consideration for all such licenses
granted by VCP to Oji to use all Improvements developed by VCP, and Oji shall
not be required to provide any additional payment for the use of such
Improvements. VCP shall provide Oji with reasonable access to appropriate
technical personnel of VCP to provide on-site technical support and training
at
Oji facilities to ensure that Improvements are transferred to Oji in accordance
with the terms of this Section
4.02(b)
within a
commercially reasonable time period. Oji shall pay VCP $1,000 per employee
of
VCP per day, or part thereof, for each such employee providing on-site technical
support and training at Oji or its Subsidiaries facilities pursuant to this
Section
4.02(b),
plus
Oji shall bear all additional expenses related to this Section
4.02(b),
including traveling and living expenses of VCP’s employees.
(c) In
the
event that an Intellectual Property right shall arise in connection with an
Improvement, such right shall inure to the party that developed such Improvement
and such party shall be entitled to make all filings and take all such other
actions as may be necessary or desirable in connection with the protection
or
enforcement of such right, provided
that
this Section
4.02(c)
shall
not apply to the licenses explicitly contemplated by Sections
4.02(a)
and
4.02(b).
Section
4.03 Ongoing
Technical Support. (a)
Upon
VCP’s request, Oji shall, or shall cause its Subsidiaries to, provide the
services of its or its Subsidiaries technical personnel to provide VCP’s
technical personnel with on-site technical support at VCP’s facilities in the
manufacture of Thermal Paper Products using the Current Technology or the New
Technology during the Term of this Agreement.
(b) Upon
request by VCP, VCP shall be entitled to send its technical or commercial
personnel to receive technical support, or to exchange technical service or
marketing information relating to Thermal Paper Products manufactured, sold
or
distributed using the Current Technology or the New Technology, at facilities
owned by Oji or its Subsidiaries during the Term of this Agreement.
(c) The
number of VCP’s, Oji’s or its Subsidiaries’ personnel that shall be required to
travel to the other party’s facilities pursuant to Sections
4.01(c),
4.02(a),
4.02(b),
this
Section
4.03
or
Section
5.06
shall
not exceed five (5) employees per visit. The period of stay for such personnel
shall not exceed an aggregate of twenty (20) man-working days per Contract
Year
and shall not exceed an aggregate of two hundred (200) man-working days during
the Term.
(d) During
the Term of this Agreement, VCP shall be entitled to receive, free of charge,
an
aggregate of twenty (20) man-working days per Contract Year, which shall not
exceed an aggregate of two hundred (200) man-working days during the Term as
Ongoing Technical Support (“Service
Deductible”).
For
each man-working day requested by VCP in excess of the Service Deductible per
Contract Year, VCP shall pay Oji $1,000 per employee of Oji or its Subsidiaries
per day, or part thereof, for each such employee providing technical support
or
exchanging technical service or marketing information to VCP’s technical
personnel or commercial personnel (whether at VCP’s facilities, Oji’s or its
Subsidiaries’ facilities or otherwise) pursuant to this Section
4.03,
including traveling and living expenses of VCP’s, Oji’s or its Subsidiaries
employees.
(e) No
employee of VCP, Oji or its Subsidiaries shall be required to travel to the
other party’s facilities pursuant to Sections
4.01(c),
4.02(a),
4.02(b),
this
Section
4.03
or
Section
5.06
unless a
separate safety agreement regarding each visit is executed by VCP and Oji or
its
Subsidiaries.
Section
4.04 English
Language.
All
know-how books, information, drawings, instructions concerning processes and
other documents or data, that may be made available to VCP pursuant to this
Article
IV,
shall
be prepared in the English language.
11
ARTICLE
V
ADDITIONAL
AGREEMENTS
Section
5.01 Additional
Territories. (a)
VCP
shall not sell or distribute in any territory other than the Exclusive Territory
and the Non-Exclusive Territory any Thermal Paper Product manufactured, sold
or
distributed using any valid Patent, Copyright, Trade Xxxx or Trade Secret of
Oji
or its Subsidiaries, including the Current Technology and the New Technology,
and any Improvements thereto required to be licensed to VCP pursuant to
Section
4.02
(an
“Oji
Technology Thermal Paper Product”),
without obtaining prior written consent from Oji (“Additional
Territory Written Consent”),
which, in Oji’s sole discretion, may be denied. Once Oji grants an Additional
Territory Written Consent, such new territory shall become an integral part
of
the Exclusive and Non-Exclusive Territory list, as the case may be (an
“Additional
Territory”)
and
all rights and obligations of this Agreement shall apply to such Additional
Territory in the same manner as in the current listed territories. In the event
that Oji grants VCP such Additional Territory Written Consent and (i) Oji or
its
Subsidiaries have established channels of distribution for Thermal Paper
Products in the Additional Territory as of the date of such consent, or (ii)
Oji
or its Subsidiaries establish channels of distribution for Thermal Paper
Products after the date of such consent, Oji shall provide VCP access to sell
or
distribute Oji Technology Thermal Paper Products through such channels of
distribution and such channels of distribution shall be the sole channels of
distribution through which VCP may sell or distribute Oji Technology Thermal
Paper Products in the Additional Territory. VCP shall pay Oji royalties on
the
Net Sales Price of Oji Technology Thermal Paper Products sold or distributed
in
the Additional Territories as specified in Sections
3.01(c)(i)
through
(xiii),
unless
otherwise stated in the Additional Territory Written Consent, in which case
the
royalties payable with respect to Oji Technology Thermal Paper Products shall
be
on the terms set forth in the Additional Territory Written Consent.
(b) VCP
agrees that it shall not knowingly sell or distribute Oji Technology Thermal
Paper Products to any Person who sells, distributes, or plans to sell or
distribute, either directly or through one or more intermediaries, such Oji
Technology Thermal Paper Products in an Additional Territory (an “Additional
Territory Distributor”).
In
the event that either Oji or VCP identifies a violation, both parties will
immediately discuss in good faith and define the most appropriate measures
to
restrain and prevent future violations. While it is understood that VCP shall
not be responsible for any breach of this Section
5.01(b)
by any
Person to whom it sells or distributes Oji Technology Thermal Paper Products,
VCP agrees to support Oji and to jointly take all commercially reasonable
measures to restrain such violation (as previously agreed in good faith
discussions with Oji), including, if necessary, the termination of future sales
arrangements and appropriate court proceedings, to restrain all Persons to
whom
it sells or distributes Oji Technology Thermal Paper Products from becoming
or
continuing to be an Additional Territory Distributor.
Section
5.02 Purchases
by Oji or VCP. (a)
In the
event that Oji or any of its Subsidiaries wishes to purchase from VCP Licensed
Thermal Paper Products manufactured by VCP for sale or distribution in an
Additional Territory, VCP shall use its commercially reasonable efforts to
supply such Licensed Thermal Paper Products to Oji. In the event that VCP wishes
to purchase from Oji or its Subsidiaries Thermal Paper Products manufactured
by
Oji or its Subsidiaries for sale or distribution by VCP in the Exclusive
Territory or the Non-Exclusive Territory, Oji shall, and shall cause its
Subsidiaries to, use its commercially reasonable efforts to supply such Thermal
Paper Products to VCP.
Section
5.03 Right
to Bid.
(a) If
at any
time VCP desires to sell its or its Subsidiaries’ business of manufacturing,
coating, distributing and selling Thermal Paper, or any material portion thereof
(the “Sale
Assets”),
whether by merger, business combination, sale of stock, recapitalization, joint
venture, sale of assets or otherwise, VCP will invite Oji to participate as
a
potential buyer by delivering written notice thereof to Oji (the “Sale
Notice”)
together with the rules, schedules and time periods for the potential
acquisition (the “Offer
Rules”).
(b) Within
the period set forth in the Offer Rules, Oji shall, at its option, provide
to
VCP a written offer to purchase the Sale Assets (the “Oji
Offer”),
stating all material terms of such offer, including purchase price and structure
of the transaction. If Oji does not provide to VCP the Oji Offer within the
required period, Oji shall be deemed to have no interest in a potential
acquisition.
12
(c) The
Offer
Rules provided to Oji shall be materially the same as the Offer Rules provided
to any interested third parties.
(d) If
VCP
receives an unsolicited offer from a third party to acquire any of its Thermal
Paper manufacturing assets, VCP will invite Oji to make a competing offer.
The
process of notice and offer must be sufficiently expedient as to not affect
VCP’s ability to conclude a sale. In addition, VCP will not be required to
disclose to Oji the identity nor the terms of the offer.
Section
5.04 Global
Network.
To
the
extent permitted by applicable Laws, Oji shall invite VCP to and include VCP
in
its yearly management meetings and discussions regarding global strategy for
Oji
and its Subsidiaries. At such meetings, Oji and its Subsidiaries shall exchange
with VCP information about business strategy, market trends, technological
trends regarding Thermal Paper, competitors, major customers and major original
equipment manufacturers related to Thermal Paper Products.
Section
5.05 Strategy
Meetings.
During
the Term of this Agreement, Oji and VCP shall meet once per Contract Year to
exchange new ideas, share new techniques, and discuss other topics of import
regarding the manufacture, sale and distribution of Thermal Paper Products
(a
“Strategy
Meeting”).
At
such meetings, VCP and Oji may discuss ongoing research into the development
of
new Thermal Paper Products, ongoing research into the improvement of currently
existing Thermal Paper Products and potential new applications of Thermal Paper
Products. Such Strategy Meeting shall coincide with, and be held in the same
location as, the meetings and discussions described in Section
5.04.
At the
request of either Oji or VCP, an additional Strategy Meeting shall be held
each
Contract Year during the Term of this Agreement at Oji’s facilities in Japan (or
such other location mutually agreed upon by Oji and VCP), but under no
circumstances shall Oji or VCP be required to attend more than two Strategy
Meetings in any given Contract Year. Oji
and
VCP will each be liable for its own costs and expenses, including traveling
and living expenses, incurred
in connection with such Strategy Meetings.
Section
5.06 Yearly
Mill Surveys.
Once
per
Contract Year during the Term of this Agreement, pursuant to an agenda to be
mutually agreed by Oji and VCP, Oji shall, or shall cause its Subsidiaries,
to
conduct a mill survey to review, assess and update technical information, as
well as audit the machines, personnel and processes used by VCP to manufacture
Licensed Thermal Paper Products (a “Mill
Survey”)
and
shall share the results of such Mill Survey, along with any related
recommendations, to VCP within a commercially reasonable time period after
the
conclusion of such Mill Survey. At the request of VCP, Oji shall, or shall
cause
its Subsidiaries, to conduct an additional Mill Survey each Contract Year during
the Term of this Agreement, but under no circumstances shall Oji or its
Subsidiaries be required to conduct more than two Mill Surveys in any given
Contract Year. The number of Oji’s or its Subsidiaries’ personnel that shall be
required to travel to VCP’s facilities pursuant to this Section
5.06
shall
not exceed the limits contained in the first sentence of Section
4.03(c),
and the
period of stay for such personnel shall not exceed the limits contained in
the
second sentence of Section
4.03(c).
The
first Mill Survey conducted under this Agreement shall be at the cost of Oji,
with VCP to reimburse all related expenses. For additional Mill Surveys, VCP
shall pay Oji a reasonable fee, to be agreed upon by Oji and VCP for the
employees of Oji or its Subsidiaries conducting each Mill Survey, plus VCP
shall
bear all additional expenses related to each Mill Survey, including traveling
and living expenses of employees of Oji or its Subsidiaries. Such fee shall
be
in addition to any man-work days, relating to technical support. If VCP decides
to send its own employees to Oji or its Subsidiaries to participate in the
Mill
Survey, then it may discount the time employed by Oji employees from the
man-working days within the Service Deductible amount specified in Section
4.03(d).
Section
5.07 Inquiry
with Exclusive Territory. In
the
event that Oji or its Subsidiaries receive an inquiry from a potential purchaser
of Thermal Paper Products in the Exclusive Territory, Oji shall promptly inform
VCP of such inquiry and discuss with VCP a mutually beneficial strategy to
supply Thermal Paper Products to such potential purchaser.
Section
5.08 Quality
Control.
VCP
agrees that Thermal Paper Products manufactured and sold by it shall be of
good
quality, shall be in accordance with all specifications contained in know-how
books provided with the Current Technology, New Technology and Improvements
and
shall meet the standards and specifications of Licensed Thermal Paper Products
manufactured by Oji or its Subsidiaries. VCP shall not manufacture Thermal
Paper
Products using the Current Technology, New Technology or Improvements that
materially deviate from the foregoing requirements of this Section 5.08
without
prior written approval from Oji.
13
Section
5.09 Quality
Analysis.
In
the
event that VCP wishes to evaluate the quality of a competitor’s Thermal Paper
Product being sold in either the Exclusive Territory or the Non-Exclusive
Territory, VCP shall discuss such proposal with Oji and evaluate the most
efficient manner in which to develop a useful benchmarking tool.
Section
5.10 Cost
Reductions.
To
the
extent permitted by law, Oji agrees to study, together with VCP, manners in
which to optimize production and reduce manufacturing costs, for example, by
developing alternative production processes and/or by introducing VCP to
alternative suppliers of raw materials (including chemicals). Oji shall not
be
responsible or liable for any failure to optimize production, reduce
manufacturing costs, develop alternative production processes or introduce
VCP
to alternative suppliers of raw materials, and any such failure shall not be
construed as a breach of this Agreement by Oji.
ARTICLE
VI
CONFIDENTIALITY
Section
6.01 Confidential
Information.
Oji
and
VCP acknowledge and agree that all of the Current Technology, New Technology
and
Improvements provided, disclosed or otherwise made available by either Oji,
its
Subsidiaries, or VCP (the “Disclosing
Party”)
to
either VCP or Oji (the “Receiving
Party”)
pursuant to the terms of this Agreement or any other prior agreement or
otherwise between Oji and VCP shall be the “Confidential
Information”
of
the
Disclosing Party and shall be subject to the restrictions on disclosure and
use
set forth in this Article
VI;
provided,
however,
that
Confidential Information shall not include any information of a Disclosing
Party
that the Receiving Party can demonstrate, by competent evidence:
(a) is
generally available in the public domain or hereafter becomes available to
the
public through no act of the Receiving Party;
(b) was
independently known to the Receiving Party prior to receipt thereof;
or
(c) was
made
available to the Receiving Party as a matter of lawful right by a third party
who had no obligations of confidentiality to the Disclosing Party.
For
an
abundance of clarity, VCP agrees and acknowledges that the Current Technology
and any New Technology or Improvements provided by Oji or its Subsidiaries
to
VCP are the Confidential Information of Oji or its Subsidiaries and that, as
a
result, VCP owes Oji and its Subsidiaries a duty of confidentiality under this
Article
VI
with
respect thereto.
Section
6.02 Obligations.
Each
Receiving Party agrees that during the Term and thereafter (a) that it shall
treat as confidential all Confidential Information, (b) that it shall use
the same level of care to prevent disclosure of the Confidential Information
that it uses to protect its own similar confidential or proprietary information,
but in no event, not less than a commercially reasonable degree of care, and
(c)
that it shall not, without prior written consent of the Disclosing Party,
directly or indirectly:
(i) make
any
use, including but not limited to any research, commercial or potential
commercial use thereof, of any portion of the Confidential Information of the
Disclosing Party for purposes other than those set forth in this Agreement;
or
(ii) duplicate,
disseminate, disclose or transfer any portion of the Confidential Information
to
any Person other than those employees or agents of the Receiving Party having
a
need to know such Confidential Information in connection with the authorized
use
of the Confidential Information pursuant to the terms of the Royalty License,
any Perpetual License and this Agreement.
Section
6.03 Authorized
Disclosure.
A
Receiving Party may disclose Confidential Information of the Disclosing Party
to
the extent such disclosure is required by applicable Law, including applicable
securities regulations, provided
that to
the extent reasonably possible, the Receiving Party provides reasonable prior
written notice of such disclosure to the Disclosing Party, permits the
Disclosing Party to seek a protective order or confidential treatment of such
information, and takes all reasonable actions to avoid or minimize the extent
of
disclosure and unauthorized use of the Confidential Information.
14
Section
6.04 Employees;
Agents.
VCP
and
Oji shall, and Oji shall cause its Subsidiaries to, ensure that each employee
or
agent who has access to Confidential Information is bound to written obligations
of confidentiality and non-use at least equivalent in scope to those set forth
in Sections
6.01
and
6.02.
VCP
acknowledges that it shall be responsible for any breach of any provision of
this Article
VI
by any
of its employees or agents, and VCP agrees to take all commercially reasonable
measures, including appropriate court proceedings, to restrain its employees
and
agents from prohibited or unauthorized disclosure or use of the Confidential
Information.
Section
6.05 Return
of Confidential Information.
Upon
termination or expiration of the Agreement, a Receiving Party will promptly
return to the Disclosing Party or destroy, all know-how books, documents, notes
and other tangible materials comprising or containing the Disclosing Party’s
Confidential Information and all copies thereof; provided,
however,
that
each Receiving Party may retain one (1) copy of the Confidential Information
received hereunder solely to fulfill its rights and obligations that may survive
the termination of this Agreement.
Section
6.06 Remedies
Upon Breach.
(a) In
the
event that either Oji of VCP becomes aware of an unauthorized disclosure of
confidential information, it shall notify the other party immediately so that
both Oji and VCP may seek jointly effective manners to restrain such disclosure
as quickly as possible in order to minimize damages to both Oji and
VCP.
(b) Without
prejudice to the foregoing, each of the parties agrees that if it, or any of
its
employees or agents, were to breach any provision of this Article
VI,
the
other party or its Subsidiaries would suffer damages that are not readily
ascertainable. Accordingly, in addition to and without limiting any remedies
in
law or in equity that may be available to each party for the breach of any
provision of this Article
VI,
including, but not limited to, injunctive and other equitable relief, each
party
agrees that in the event the other provides written notice to it of a breach
of
a provision of this Article
VI
by it or
any of its employees or agents (a “Breach
Notice”),
the
party shall have fifteen (15) days from the date it receives such Breach Notice
(the “Cure
Period”)
to
fully cure any breach and bring itself, and its employees and agents, in full
compliance with this Article
VI.
A
non-cured breach of this Article VI will entitle the non-breaching party to
suspend performance of its obligations under the remainder of this Agreement
and
to seek judicial relief and monetary compensation for direct (non-consequential)
damages.
(c) Each
Receiving Party acknowledges and agrees that a Disclosing Party’s remedy at law
for any breach of any provision of this Article
VI
would be
inadequate and that for any breach of such provision, such Disclosing Party
shall, in addition to and cumulative with other remedies as may be available
to
it at law or in equity, or as provided for in this Agreement, be entitled to
a
preliminary or permanent injunction, restraining order, or other equitable
relief, without the necessity of posting a bond, restraining such Receiving
Party, or any of its employees or agents, from committing or continuing to
commit any violation of any provision of this Article
VI.
Each
Receiving Party agrees that proof shall not be required that monetary damages
for breach of any provision of this Agreement would be difficult to calculate
and that remedies at law would be inadequate.
ARTICLE
VII
TERM;
TERMINATION
Section
7.01 Term.
This
Agreement shall remain in full force and effect for ten (10) years from the
date
hereof (the “Initial
Term”),
unless sooner terminated, as provided in this Article
VII.
Section
7.02 Term
Extensions.
Oji
and
VCP shall meet at a mutually agreed upon location between thirty (30) months
and
twenty-seven (27) months prior to the expiration of the Initial Term to discuss
future extensions of this Agreement. Notwithstanding the foregoing sentence,
after the expiration of the then-effective Term, this Agreement shall
automatically renew for successive one (1) year periods, unless either party
shall provide the other party with written notice of non-renewal (the
“Non-Renewal
Notice”)
not
less than twenty-four (24) months in advance of the date of the expiration
of
the Term. The “Term”
of
this
Agreement shall be the Initial Term and any renewal or renewals
thereof.
15
Section
7.03 Termination.
This
Agreement shall terminate in the following manner:
(a) at
any
time by the mutual written agreement of Oji and VCP;
(b) at
the
expiration of the Term;
(c) pursuant
to the terms of Section 3.02(a);
(d) at
the
option of Oji in any of the following events:
(i) upon
the
institution of insolvency, receivership, bankruptcy, reorganization or
composition proceedings or any other proceedings for the settlement of VCP’s
debts;
(ii) upon
the
commencement of an involuntary proceeding seeking liquidation, reorganization
or
other relief with respect to VCP, or of a substantial part of its assets under
any bankruptcy, insolvency, receivership or other Law, provided
that
such proceeding goes undismissed for sixty (60) calendar days;
(iii) upon
VCP
making an assignment for the benefit of creditors;
(iv) upon
VCP’s dissolution, winding up, or ceasing to conduct business in the normal
course; or
(v) upon
a
Change of Control of VCP;
(e) at
the
option of VCP in any of the following events:
(i) Upon
Oji
or its Subsidiaries persistent failure to provide any Improvements to VCP
pursuant to Section
4.02(a).
(ii) upon
the
institution of insolvency, receivership, bankruptcy, reorganization or
composition proceedings or any other proceedings for the settlement of Oji’s
debts;
(iii) upon
the
commencement of an involuntary proceeding seeking liquidation, reorganization
or
other relief with respect to Oji, or of a substantial part of its assets under
any bankruptcy, insolvency, receivership or other Law, provided
that
such proceeding goes undismissed for sixty (60) calendar days;
(iv) upon
Oji
making an assignment for the benefit of creditors;
(v) upon
Oji’s dissolution, winding up, or ceasing to conduct business in the normal
course; or
(vi) upon
Oji’s persistent failure to provide technical support or perform its obligations
pursuant to the terms of this agreement.
(vii) upon
a
Change of Control of Oji.
16
Section
7.04 Effect
of Termination.
In
the
event of termination of this Agreement as provided in either Sections
3.02
or
7.03,
this
Agreement shall forthwith become void and the obligations of the parties
pursuant to this Agreement will terminate except for those obligations on the
part of either party hereto contained in Article
VI
and
Sections
8.02,
8.03,
8.04,
8.05,
8.10,
and
8.11.
Notwithstanding the foregoing, in the event of termination of this Agreement
as
provided in Section
7.03(b),
the
obligations on the part of VCP contained in Section 3.01(a),
Section
3.01(c)(x)
through
(xiii),
Section
3.02,
Section
3.03
and
Section
3.04
shall
also survive such termination. Notwithstanding the foregoing, VCP shall be
entitled to manufacture, sell and distribute all Licensed Paper Products
according to the Perpetual License received pursuant to Section 3.01(a), beyond
the termination of this Agreement. Also notwithstanding the foregoing, any
termination of this Agreement shall not relieve either party from liability
for
any breach of this Agreement and any amounts due and unpaid as of the date
of
termination of this Agreement.
ARTICLE
VIII
MISCELLANEOUS
Section
8.01 Assignment.
Neither
this Agreement nor any of the rights or obligations hereunder may be assigned
by
Oji without the prior written consent of VCP, which shall not be unreasonably
withheld, or by VCP without the prior written consent of Oji, which shall not
be
unreasonably withheld. Subject to the foregoing, this Agreement shall be
binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, and no other Person shall have any right, benefit or
obligation hereunder.
Section
8.02 Notices.
Unless
otherwise provided herein, any notice, request, instruction or other document
to
be given hereunder by either party to the other party shall be in writing
and delivered in person or by overnight courier or by facsimile transmission
as
follows (or at such address
or facsimile number of which notice shall have been duly given in accordance
with this Section
8.02):
|
If
to Oji:
|
Oji
Paper Co. Ltd.
|
|
0-0,
Xxxxx 0-Xxxxx, Xxxx-xx
|
|
|
Xxxxx
000-0000 Xxxxx
|
|
|
Telephone:
0.00.0000.0000
|
|
|
Facsimile:
8.13.3563.4135
|
|
|
Attention:
Xx. Xxxxxxx Xxxxxx
|
|
|
With
a copy to:
|
Cadwalader,
Xxxxxxxxxx & Xxxx LLP
|
|
Xxx
Xxxxx Xxxxxxxxx Xxxxxx
|
|
|
Xxx
Xxxx, XX 00000
|
|
|
Telephone:
(000) 000-0000
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attention:
Xxxxx X. Xxxxxxxxxx
|
|
|
If
to VCP:
|
Votorantim
Celulose e Papel S.A.
|
|
Xxxxxxx
Xxxxxx, 0000, 0xx
Xxxxx
|
|
|
Xxxxxxxxx
Xxxxx 00000-000
|
|
|
Xxx
Xxxxx, XX, Xxxxxx
|
|
|
Telephone:
00-00-0000-0000
|
|
|
Facsimile:
00-00-0000-0000
|
|
|
Attention:
Xxxxxxx Xxxxxxxxx Xxxxxxxx
|
17
|
With
a copy to:
|
Votorantim
Celulose e Papel S.A.
|
|
Xxxxxxx
Xxxxxx, 0000, 0xx
Xxxxx
|
|
|
Xxxxxxxxx
Xxxxx 00000-000
|
|
|
Xxx
Xxxxx, XX, Xxxxxx
|
|
|
Telephone:
00-00-0000-0000
|
|
|
Facsimile:
00-00-0000-0000
|
|
|
Attention:
Xxxxxx Xxxx
|
|
|
and:
|
|
|
Proskauer
Rose LLP
|
|
|
0000
Xxxxxxxx
|
|
|
Xxx
Xxxx, Xxx Xxxx 00000-0000
|
|
|
Telephone:
(000) 000-0000
|
|
|
Facsimile:
(000) 000-0000
|
|
|
Attention:
Xxxxxx Xxxxxxxx
|
or
to
such other place and with such other copies as either party may designate as
to
itself by written notice to the others. Any notice delivered in accordance
with
this Section
8.02 shall
be
deemed effective upon personal delivery, or on the first Business Day following
the sending of such notice by overnight courier service or facsimile.
Section
8.03 Choice
of Law.
This
agreement shall be construed, interpreted and the rights of the parties
determined in accordance with the laws of the State of New York.
Section
8.04 Venue/Arbitration.
Any
dispute, claim or controversy arising out of or relating to this Agreement,
or
the breach, termination, enforcement, interpretation or validity of this
Agreement, shall be determined by arbitration. The arbitration shall be
conducted in the Borough of Manhattan, in the State of New York pursuant to
the
Rules and Procedures of the American Arbitration Association. The controlling
law shall be that of the State of New York and the arbitration shall be
conducted in the English language. The arbitration shall be conducted by a
three
arbitrators. Each party shall designate an arbitrator and the two arbitrators
so
designated shall designate a third arbitrator. The three arbitrators so chosen
will conduct the arbitration and will resolve the controversy by a majority
vote. The judgment of the arbitrators will be final and binding on the parties.
The judgment may be entered in any competent court having jurisdiction which
may
then enforce the judgment, without reconsideration of the merits or appeal.
The
costs of the arbitration, including the fees of the arbitrators and the
reasonable attorneys fees of the prevailing party, will be borne by the
non-prevailing party as directed by the arbitrators.
Section
8.05 Indemnification;
Defense Against Complaint. (a)
Each
party and its Subsidiaries, officers, directors, employees, agents, successors
and permitted assigns shall be indemnified and held harmless by the other party
for and against any and all liabilities, losses, damages, claims, costs,
expenses, interest, awards, judgments and penalties (including attorneys' and
consultants' fees and expenses) actually suffered or incurred by them (including
any action, claim, suit or other proceeding brought or otherwise initiated
by
any of them) ("Losses") arising out of or resulting from the breach of any
provision of this Agreement by the other party.
(b) VCP
and
its Subsidiaries, officers, directors, employees, agents, successors and
permitted assigns shall be indemnified and held harmless by Oji for and against
any and all Losses arising out of or resulting from the breach of any provision
of this Agreement by Oji.
(c) Oji
agrees to use commercially reasonable efforts to cooperate with and supply
reasonably necessary information to VCP in its defense against any complaint
with regard to any Intellectual Property right of a third party with respect
to
VCP’s manufacture, sale or distribution of Thermal Paper Products using the
Current Technology or the New Technology.
(d) Each
party shall covenant to the other that all licenses provided are proprietary
and
that the providing party is entitled to grant such license, free and clear
of
encumbrances.
18
(e) Each
party shall indemnify the other for and exempt the other from all costs and
expenses directly or indirectly related to or arising from any Losses associated
with the manufacture, sale or distribution of Thermal Paper Products using
the
providing party’s licensed Intellectual Property, including Losses associated
with (i) product liability, (ii) applicable safety Laws, (iii) applicable
environmental laws and (iv) actions, claims, suits, or other proceedings brought
by any third party, including any governmental agency, authority or other body
or entity, except to the extent such Losses results from acts of omissions
of
employees or representatives of the party claiming the Loss.
Section
8.06 Entire
Agreement; Amendments and Waivers.
This
Agreement constitutes the entire agreement among Oji and VCP pertaining to
the
subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written,
of Oji and VCP. This Agreement, or any provision hereof, may be amended,
supplemented, modified or waived by the parties hereto from time to time;
provided that no amendment supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by Oji and VCP. No waiver of any
of
the provisions of this Agreement shall be deemed or shall constitute a waiver
of
any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
Section
8.07 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
Section
8.08 Invalidity.
In
the
event that any one or more of the provisions, rates or amounts contained in
this
Agreement or in any other instrument referred to herein, shall, for any reason,
be held to be
invalid, illegal or unenforceable in any respect, such provisions, rates or
amounts shall be enforced to the maximum extent permitted by Law to effect
the
intentions of the parties hereunder, and such invalidity, illegality or
unenforceability of such provisions, rates or amounts shall not affect any
other
provision of this Agreement or any other such instrument.
Section
8.09 Headings.
The
headings of the Articles and Sections herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning
or
interpretation of this Agreement.
Section
8.10 Expenses.
Oji
and
VCP will each be liable for its own costs and expenses incurred in connection
with the negotiation, preparation, execution or performance of this
Agreement.
Section
8.11 Publicity.
Oji
and
VCP agree to notify each other prior to issuing any press release or making
any
public statement regarding the transactions contemplated hereby, and will obtain
the reasonable approval of the other party prior to making such release or
statement, including, without limitation, any press release issued by either
or
both of Oji and VCP in connection with the transactions contemplated by this
Agreement.
Section
8.12 Independent
Contractor.
Nothing
contained in this Agreement shall be construed as constituting or giving rise
to
a partnership, joint venture or agency between Oji and VCP.
Section
8.13 Severability
of Provisions.
If
any
provision of this Agreement, or the application of any such provision to any
Person or circumstance, shall be held invalid by a court of
competent jurisdiction, the remainder of this Agreement, and the application
of
such provision to
Persons or circumstances other than those as to which it is held invalid, shall
not be affected thereby.
Section
8.14 Force
Majeure.
Neither
of the parties hereto shall be liable for any failure to perform its duties
or
obligations under this Agreement owing to war, serious fire, flood, typhoon,
earthquake and any objective circumstance which is unforeseeable, unavoidable
and insurmountable.
Section
8.15 Official
Language.
The
official language of this Agreement shall be English.
19
Section
8.16 Translation.
The
translation of this Agreement into Portuguese will serve as a mere reference.
In
the event of any inconsistency between the English version of this Agreement
and
the Portuguese version of this Agreement, the English version of this Agreement
shall be determinative for purposes of interpretation of this
Agreement.
ARTICLE
IX
ACKNOWLEDGEMENTS
Section
9.01 Acknowledgements
of Oji and VCP.
Oji
and
VCP
acknowledge and confirm that as of the date hereof:
(a) the
Current Technology consists of a number of highly valuable, unique, proprietary
technologies and processes which have been developed and refined by Oji or
its
Subsidiaries over a long period of time and which are not available from any
source other than Oji or its Subsidiaries;
(b) in
addition to Patents of Oji in full force and effect, VCP uses Oji’s Trade
Secrets in the manufacture of all Thermal Paper Products that VCP currently
manufactures;
(c) VCP
uses
Trade Marks or Copyrights of Oji (including, without limitation, paper grade
names, model numbers or brand names) in the sale or distribution of Thermal
Paper Products that VCP currently sells or distributes;
(d) given
the
current demand for Thermal Paper Products manufactured, sold or distributed
by
VCP, VCP does not currently have the capacity to manufacture, sell or distribute
Thermal Paper Products outside of the Exclusive Territory and Non-Exclusive
Territory.
20
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day
and year first above written.
| OJI PAPER CO., LTD. | ||
|
By:
|
/s/
Tomoo
Edagawa
|
|
|
Name:
Tomoo Edagawa
|
||
|
Title:
Corporate Officer Commercial Paper Division
|
||
| VOTORANTIM CELULOSE E PAPEL S.A. | ||
|
By:
|
/s/
Xxxx
Xxxxxxx Penido
|
|
|
Name:
Xxxx Xxxxxxx X. Xxxxxx
|
||
|
Title:
Chief Executive Officer
|
||
|
By:
|
/s/
Xxxxxxx
Xxxxxxxxx Castelli
|
|
|
Name:
Xxxxxxx Xxxxxxxxx Xxxxxxxx
|
||
|
Title:
Officer
|
||
Sch.
4.01
