SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
[x] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1996
[ ]
OR
Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File No.1-14050
LEXMARK INTERNATIONAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3074422
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One Lexmark Centre Drive
Lexington, Kentucky 40550
(Address of principal executive offices) (Zip Code)
(606) 232-2000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Class A common stock, $.01 par value New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
The number of shares outstanding (excluding shares held in treasury) of
each of the issuer's classes of common stock, as of the close of business on
October 25, 1996:
Class Number of Shares
------------------------------ ----------------
Class A common stock; $.01 par value 67,740,788
Class B common stock; $.01 par value 4,573,323
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LEXMARK INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
INDEX
Page of
Form 10-Q/A
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PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................2
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LEXMARK INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
A list of exhibits is set forth in the Exhibit Index found on
page 4 of this report.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the three months
ended September 30, 1996.
2
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LEXMARK INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, both on behalf of the registrant and in
his capacity as principal accounting officer of the registrant.
Lexmark International Group, Inc.
(Registrant)
Date: January 24, 1997 By: /s/ Albert L. Luedtke
---------------- ---------------------
Corporate Controller
(Principal Accounting Officer)
3
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EXHIBIT INDEX
Exhibits:
10 Patent Cross-License Agreement, effective October 1, 1996, between
Hewlett-Packard Company and Lexmark International, Inc. *
27 Financial Data Schedule
- ----------------
* Confidential Treatment Has Been Requested Pursuant to an Amended Application.
** Previously Filed.
4
Exhibit 10
HP Confidential Lexmark Confidential
PATENT CROSS-LICENSE AGREEMENT (amended redaction)
This Agreement is effective October 1, 1996 between Hewlett-Packard
Company, incorporated under the laws of the State of California, with a place of
business at 3000 Hanover Street, Palo Alto, California 94304, U.S.A. ("HP"), and
Lexmark International, Inc., incorporated under the laws of the State of
Delaware, with a place of business at 740 New Circle Road, Lexington, Kentucky,
40511, U.S.A., ("Lexmark");
Whereas, HP and Lexmark (formerly known as "IBM Information Products
Corporation") have entered into a previous Agreement dated March 26, 1991
(hereinafter "Previous Agreement") relating to patent rights of HP and Lexmark;
Whereas, HP has brought certain HP patents to Lexmark's attention in
connection with certain Lexmark products;
Whereas, Lexmark has brought certain Lexmark patents to HP's attention in
connection with certain HP products;
Whereas, HP and Lexmark desire to resolve these patent disputes amicably;
Whereas, HP and Lexmark desire to promote individual research, advancement
of printing technology, and development of new products; and
Whereas, HP and Lexmark desire to each obtain greater design freedom for
their own products and to avoid infringement of the other party's patents;
Now, Therefore, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:
1. Definitions.
1.1 "Subsidiaries" means any corporation or other business entity in which
either party now or hereafter owns or controls more than fifty percent (50%) of
the outstanding voting stock or other voting rights entitled to elect directors,
but such corporation or entity shall be deemed to be a Subsidiary only so long
as such ownership or control exists.
1.2 "Licensed Patents" means any and all patents throughout the world,
including utility models and including design patents/registrations for type
fonts (but not including any other design patents, industrial designs or design
registrations) issued or issuing on applications entitled to a first effective
filing date before * under which patents or applications therefor either party
(as a Licensor) or any of its Subsidiaries now has or hereafter obtains the
right to grant licenses to the other party (as a Licensee) of or within the
scope granted herein *
*Confidential portion has been omitted and filed separately with the Securities
and Exchange Commission ("SEC")
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HP Confidential Lexmark Confidential
*
* The term "Licensed
Patents" shall also include any patent reissuing on any of the aforesaid
patents. *
*
1.3 "Printers" means any instrumentalities or aggregates of
instrumentalities primarily designed to apply marks to media, but only to the
extent such instrumentalities or aggregates of instrumentalities are *
*
*
"Printers may include, but is not limited to,formatters, type fonts,
and *
*
"Printers" does not include *
*
*
1.4 "Print Mechanisms" means any Printers or substantial portions thereof
that are physically incorporated in larger devices that perform substantial
functions in addition to printing, including but not limited to copying,
scanning, faxing, and word processing.
"Print Mechanisms" is limited to *
*
* Any part of a Print Mechanism that is used
*
* shall be considered to be
included in the Printer portion of the Print Mechanism.
1.5 "OEM Inkjet Printer Subassemblies" means parts or subassemblies that
are (a) manufactured by or for either party and sold by either party to a third
party for assembly into Inkjet printers or Inkjet print mechanisms other than
Printers or Print Mechanisms *
*
1.6 "Printer Consumables" means any articles used to replace items that are
used in or by Printers, Print Mechanisms or typewriters and that are also
consumed, used up or emptied as a normal result of printing, but only to the
extent such articles: *
*
*
*Confidential portion has been omitted and filed separately with the SEC
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HP Confidential Lexmark Confidential
* For example, *
*
*
"Printer Consumables" include items
such as *
*
"Printer
Consumables" does not include *
1.7 "Customized OEM Consumables" means consumables that are
*
*
1.8 "Printer Consumable Components" means parts of Printer Consumables or
Customized OEM Consumables that are *
* and includes items such as
thermal inkjet printhead primitives, orifice plates, flex circuits, print
cartridge or printhead unit bodies, ink cartridge parts, toner cartridge parts,
electrophotographic parts, ribbon cartridge parts, and the like. "Printer
Consumable Components" does not include
*
1.9 "Printer Accessories" means optional items that may be added onto,
bundled with, or installed within a Printer or Print Mechanism to enhance its
functionality, to the extent such optional items are *
*
*
*
"Printer
Accessorie" include items such as *
*
Notwithstanding the foregoing,
"Printer Accessories" does not include *
*
*
*Confidential portion has been omitted and filed separately with the SEC
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HP Confidential Lexmark Confidential
1.10"Print Media" means items that receive marks from a Printer or Print
Mechanism during a printing process, but only to the extent *
*
*
* "Print Media" includes items
such as paper, transparencies, card stock and the like.
1.11 "Licensed Products" means any one or more of and only the following:
(a) Printers;
(b) Print Mechanisms;
(c) Printer Service Items;
(d) typewriters;
(e) OEM Inkjet Printer Subassemblies;
(f) Printer Consumables;
(g) Customized OEM Consumables;
(h) Third Party Inkjet Consumables;
(i) Printer Consumable Components;
(j) Printer Accessories;
(k) Print Media;
(l) Printer Consumable Material; and
(m) manufacturing apparatus and methods used to fabricate any
one or more of (a) through (l) above.
1.12 "Printer Consumable Material" means toner, ink, ribbons or other
matter * that is sold or transferred and shipped by a party as
follows:
*
*
*
1.13 "Inkjet" means printing technology in which thermal energy is used to
eject droplets of ink onto a medium to create images or text.
1.14 "Inkjet Products" means the following items, but only to the extent
they employ Inkjet Technology or are designed to be used with items that employ
Inkjet technology: *
*Confidential portion has been omitted and filed separately with the SEC
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HP Confidential Lexmark Confidential
*
*
1.15 "Design Patents" means any and all design patents, industrial designs
or design registrations issued or issuing on applications entitled to a filing
date before * under which patents or applications therefor
either party (as a Licensor) or any of its Subsidiaries now has or hereafter
obtains the right to grant licenses to the other party (as a Licensee) of or
within the scope granted herein *
*
*
1.16 "Specialized Inkjet Technology" means the items set forth below to the
extent they are unique to or specially adapted to Inkjet technology, *
*
*
*
*
1.17 "Third Party Inkjet Consumables" means any articles *
designed to replace articles that *
* are consumed, used up or
emptied as a normal result of printing, *
*
For example, *
*
*
*Confidential portion has been omitted and filed separately with the SEC
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HP Confidential Lexmark Confidential
1.18 "Printer Service Items" means parts or subassemblies of Printers or
Print Mechanisms that are sold as service items *
*
*
*
*
1.20 "Acquired Printer Company Products" means printers or print mechanisms
that both *
*
*
* "Acquired Printer Company Products" does not in any event include
*
1.21 "Product Platform" means:(a) a Printer or Print Mechanism that forms
the basis of subsequent Product Models (all such Product Models having the same
* *
* (b) a Printer Consumable that forms the basis of subsequent
Product Models all such Product Models having the same *
*
* For example,
*
*
* are each separate Product Platforms.
1.22 "Product Models" means models of Printers, Print Mechanisms and
Printer Consumables that are *
*
with the exception of: * cosmetic details,
*
*
cosmetic details, *
* For example *
*Confidential portion has been omitted and filed separately with the SEC
6
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HP Confidential Lexmark Confidential
* each of the following sets of products are different Product Models
of the same Product Platform:
*
*
*
2. Previous Agreement.
*
*
*
2.2 Paragraph 5.2 of the Previous Agreement is hereby terminated in all
respects and is not replaced by any provision of this Agreement.
2.3 Paragraph 5.3 of the Previous Agreement is hereby terminated in all
respects and is not replaced by any provision of this Agreement.
3. Grants and Releases.
3.1 Each party (as a Releasing Party) forever releases and discharges the
other party (as a Released Party), its Subsidiaries and all purchasers and users
of Licensed Products sold by the Released Party or any of its Subsidiaries
before the effective date of this Agreement from all claims and liabilities for
any infringement of the Licensed Patents prior to the effective date of this
Agreement with respect to those products.
3.2 Subject to the limitations set forth in paragraphs 3.2.1 and 3.2.2
below, each party (as a Licensor) hereby grants to the other party (as a
Licensee) and its Subsidiaries a worldwide, royalty free, non-exclusive license,
without the right to sublicense, to make, have made (as provided below in
Section 4), use, import, offer for sale, sell, or otherwise dispose of: (a)
Inkjet Products (excluding OEM Inkjet Printer Subassemblies and Third Party
Inkjet Consumables) *
* (b) OEM Inkjet Printer Subassemblies and Third
Party Inkjet Consumables * and (c) all other Licensed
Products *
3.2.1 Each party (as a Licensor) agrees *
*
*
*Confidential portion has been omitted and filed separately with the SEC
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HP Confidential Lexmark Confidential
*
*
*
3.2.2 Notwithstanding the foregoing, *
*
3.3 Neither party will enforce *
*
*
*
3.4 This Agreement is a patent cross license agreement. Neither party is
licensed under the copyrights *
*
mask works, trademarks, trade names, trade dress, or trade secrets (or other
confidential information) of the other party. Nothing in this Agreement shall
be read to authorize either party to make any representations to the contrary
to third parties *
*
3.5 Each party (as a Licensor) grants to the other party (as a Licensee)
and its Subsidiaries a worldwide, non-exclusive license under the Licensed
Patents, without the right to sublicense, to make, have made (as provided in
Section 4), use, import, offer for sale, sell, or otherwise dispose of (a)
Acquired Printer Company Products, but only for a period ending * after the
acquisition of the respective acquired third party, and (b) spare parts and
accessories (but not consumables) for Acquired Printer Company Products, but
only for a period ending * after the acquisition of the respective
acquired party, at a royalty rate equal to the lesser of (1) * realized
from the sale of Acquired Printer Company Products and spare parts and
accessories for those products for each patent practiced by the products
licensed under this Subsection 3.5, (2) * realized from the
sale of such products, and (3) the royalty rate that would have applied under
any separate agreement between the Licensor and the respective acquired party
had such party not been acquired. In the event either party (as a Licensee)
fails to cure a material breach of this Subsection 3.5 within sixty (60)days
after the date of receipt of written notice of such breach, the other party
(as a Licensor) may terminate the licenses granted to the Licensee pursuant
to this Subsection 3.5.
*Confidential portion has been omitted and filed separately with the SEC
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HP Confidential Lexmark Confidential
3.6 If an entity ceases to be a Subsidiary, then all rights and licenses
granted to that Subsidiary under this Agreement shall automatically terminate.
4. Have-Made Rights.
4.1 Subject to Subsection 4.3, any license granted under any of the above
provisions to have Printers, Print Mechanisms, typewriters, *
*
* made by a third-party manufacturer for the use, importation, offer
for sale, sale or other disposition by a party or any of its Subsidiaries
requesting such making ("the Requesting Party") shall be restricted to all of
the following conditions:
4.1.1 The designs, specifications and working drawings for the
manufacture of such products must be owned and furnished by, and also must
originate with the Requesting Party (or with the Requesting Party's
contractor, whether or not the contractor is also the third party
manufacturer);
4.1.2 Unless the Requesting Party's contractor is the third party
manufacturer, the designs, specifications and working drawings must be in
sufficient detail that substantially no additional designing by the
third-party manufacturer is required other than adaptation to the
production processes and standards normally used by the third-party
manufacturer, which adaptation changes the characteristics of such products
only to a negligible extent; and
4.1.3 Any products made pursuant to this Subsection 4.1 by a
third-party manufacturer shall be purchased by the Requesting Party.
4.1.4 If a third party contractor or manufacturer originates the
designs, specifications and working drawings of Printers, Print Mechanisms,
typewriters, *
* any patents or patent applications, which are based on
inventions made in the contract, and which cover such products or any
portion thereof, must be licensable by the Requesting Party to the other
party on a royalty-free basis and subject to the terms and conditions of
this Agreement.
*
*
*
*Confidential portion has been omitted and filed separately with the SEC
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HP Confidential Lexmark Confidential
*
*
*
4.2 Subject to Subsection 4.3, any license granted under any of the
above provisions to have Printer Consumables *
* made by a third-party
manufacturer for the use, importation, offer for sale, sale or other
disposition by a party or any of its Subsidiaries requesting such making
("the Requesting Party") shall be restricted to all of the following
conditions:
4.2.1 The designs, specifications and working drawings for the
manufacture of such products must be owned by, furnished by, and
originate with the Requesting Party;
4.2.2 The designs, specifications and working drawings must be in
sufficient detail that substantially no additional designing by the
third-party manufacturer is required other than minor adaptation to
the production processes and standards normally used by the
third-party manufacturer, which adaptation changes the characteristics
of such products only to a negligible extent; and
4.2.3 Any products made pursuant to this Subsection 4.2 by a
third party manufacturer shall be purchased by the Requesting Party.
4.3 Solely with regard to * any license granted under any
of the above provisions to have Licensed Products made by a third-party
manufacturer for the use, importation, offer for sale, sale or other
disposition by a party or any of its Subsidiaries requesting such making
("the Requesting Party") shall be restricted to all of the following
conditions:
4.3.1 The designs, specifications and working drawings for the
manufacture of such products must be owned by, furnished by, and
originate with the Requesting Party;
4.3.2 The designs, specifications and working drawings must be in
sufficient detail that substantially no additional designing by the
third-party manufacturer is required other than minor adaptation to
the production processes
*Confidential portion has been omitted and filed separately with the SEC
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HP Confidential Lexmark Confidential
and standards normally used by the third-party manufacturer, which
adaptation changes the characteristics of such products only to a
negligible extent; and
4.3.3 Any and all products made pursuant to this Subsection 4.3 by a
third-party manufacturer shall be purchased by the Requesting Party.
4.3.4 This have-made right is not granted by either party *
*
* However, Licensed Products that incorporate *
* may be shipped into any of
the foregoing * and combined * so long as no
*
4.4 This have-made right is granted only in situations where the
Requesting Party: (a) maintains ownership or control of any equipment *
* and (b) takes * steps, *
* to prevent use *
* by any third party *
*
5. Warranty and Disclaimer.
5.1 Each party warrants that it has the right to grant the licenses
set forth in Section 3 hereof. Neither party makes any other
representations or warranties, express or implied, nor does either party
assume any liability with respect to any infringement of patents or other
rights of third parties due to the other party's operation under the
licenses granted herein, nor does either party assume any responsibility
for enforcement of its patents against third parties.
5.2 Lexmark warrants that Lexmark International Group, Inc. ("LIG")
and its subsidiaries (other than Lexmark or Subsidiaries of Lexmark)
currently do not own any patents. In the event LIG itself becomes the owner
of any patents, which if owned by Lexmark would be within the scope of the
Licensed Patents as defined in this Agreement, Lexmark also warrants that
it will cause such patents to be licensed to HP and its Subsidiaries on the
same basis as the Licensed Patents.
5.2.1 In the event that any subsidiary of LIG (other than Lexmark
or a Subsidiary of Lexmark) becomes the owner of any patents, which if
owned by Lexmark would be within the scope of the Licensed Patents as
defined in this Agreement, the parties agree that HP may elect in
writing to be licensed under such patents, whereupon such subsidiary
shall be treated as though it were a Subsidiary of Lexmark for all
purposes of this Agreement until such subsidiary ceases to be a
subsidiary of either LIG or Lexmark. In the event of any such election
by HP, Lexmark further warrants that it will cause any such subsidiary
of
*Confidential portion has been omitted and filed separately with the SEC
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HP Confidential Lexmark Confidential
LIG to be bound by the terms and conditions of this Agreement as though such
subsidiary were a Subsidiary of Lexmark.
6. Confidentiality.
6.1 The parties agree that although the existence of this Agreement is not
confidential, the terms are confidential. Each party shall use the same degree
of care to prevent disclosure of the terms of this Agreement to any third party
as it uses to protect its own most sensitive confidential information. In no
event will this obligation of confidentiality preclude any disclosure required
by law or by a regulatory authority, provided that prior to making any such
disclosure of the terms of this Agreement a party shall promptly consult in
advance with the other party and shall use all commercially reasonable efforts
to obtain written assurance that confidential treatment will be accorded to such
information. If any party determines upon the advice of counsel that this
Agreement or any part of it is required to be filed with the Securities and
Exchange Commission, the parties agree that: (a) confidential treatment shall be
sought for the provisions of the Agreement as indicated by the redacted copy of
this Agreement attached hereto as Exhibit 4, (b) the party making the filing
shall give the other party the opportunity to review and provide input on the
filing and the confidential treatment request, and (c) the filing party will
give the other party a copy of any submission. The parties further agree that
neither party will issue a press release or otherwise make a public announcement
relating to the existence or provisions of this Agreement without the prior
written consent of the other party, except as set forth in Exhibit 3 in the case
of Lexmark and as may be adapted with respect to company specific information in
the case of either HP or Lexmark.
6.2 Notwithstanding the provisions of Subsection 6.1, if either party
determines that a potential Change of Control may take place with regard to a
particular third party and that it is reasonably necessary to disclose the terms
of Section 7 and Exhibit 2 of this Agreement, then such party may disclose such
information, provided such party shall use all commercially reasonably efforts
to obtain written assurance that confidential treatment will be accorded such
information.
6.3 In the event of termination of a license under Section 7 of this
Agreement, each party may make a public disclosure (subject to the provisions of
Subsection 6.1) concerning the termination and the surviving licenses.
7. Term and Termination.
7.1 The term of this Agreement shall be from the effective date hereof
until the expiration of the last to expire of the patents licensed hereunder.
7.2 All licenses granted by this Agreement under *
* may be terminated: (a)by HP if a Change of Control, as defined in
Exhibit 2, occurs with respect to Lexmark, LIG, or any successor entity to
either of them; or (b) by
*Confidential portion has been omitted and filed separately with the SEC
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Lexmark if a Change of Control, as defined in Exhibit 2, occurs with respect to
HP or any successor entity to it. In order to be effective, such termination
must be in accordance with paragraphs 7.2.1 and 7.2.2.
7.2.1 Any termination pursuant to this Subsection 7.2 shall be
effective as of the date that such Change of Control takes place provided
that the party terminating the licenses gives written notice to the other
party as set forth in paragraph 7.2.2.
7.2.2 Each party shall give the other party prompt written notice of
the occurrence of a Change of Control of such party. The party seeking to
terminate licenses pursuant to this Subsection 7.2 must provide the
terminated party with written notice of termination within ninety (90) days
of the date of receipt of the notice of the occurrence of a Change of
Control or the licenses shall remain in effect.
7.2.3 Notwithstanding any provisions to the contrary, in the event of
a termination of licenses pursuant to this Section 7, the terminating party
(as a Licensor) hereby grants to the terminated party (as a Licensee) and
its Subsidiaries a worldwide, royalty-free, non-exclusive license under *
* to make, have made (as provided in Section 4), use, import, offer for
sale, sell or otherwise dispose of Licensed Products as follows:
(a) Printer Accessories, Printer Service Items, Printer Consumables,
Customized OEM Consumables, Printer Consumable Components, Print
Media, and Printer Consumable Material: (i) for a period * from
the date of termination, and (ii) commencing * after termination,
*
* but only to the extent that Licensee is
required by law or by standard government contract obligations still
in force *
(b) Printers, Print Mechanisms, and typewriters for a period *
from the date of termination *
*
7.2.4 Any termination of licenses pursuant to this Subsection 7.2
shall not relieve the party whose licenses are terminated of any
obligation or liability accrued hereunder, and such termination shall
not affect in any manner any licenses or other rights granted to the
other party under this Agreement. In the event of the termination of
any patent licenses under this Subsection 7.2, all other rights and
obligations under this Agreement shall remain in effect.
*Confidential portion has been omitted and filed separately with the SEC
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7.3 Except as otherwise provided in this Section 7 and in
Subsection 3.5, in the event either party fails to cure or is unable
to cure a material breach of this Agreement within sixty (60) days
after receipt of written notice of such breach, the other party may
bring an action for breach under this Subsection 7.3. The
non-breaching party shall be entitled only to damages and/or
injunctive relief, except in cases where damages and/or injunctive
relief would not be equitable for a particular material breach. In any
such case, upon a final judicial determination that a material breach
has occurred and was not timely cured or cannot be cured as provided
in this Subsection 7.3 and that other relief is not equitable, the
breaching party's licenses under * may be
terminated effective as of the date of receipt of written notice of
such material breach by the breaching party. The parties agree
that in the event of such a termination of the breaching party's
licenses under * the non-breaching
party shall only be licensed under the breaching party's *
entitled to a first effective filing date prior to the effective
date of such termination. The parties further agree that in no event
shall any remedy for breach include termination of the licenses to
either party under * such licenses *
* and all the limitations and obligations associated
with those licenses shall remain in effect.
8. Miscellaneous.
8.1 Merger: This Agreement (including attached Exhibits 1, 2, 3 and 4)
constitutes the entire Agreement between the parties relating to *
*
*
and to this extent supersedes all prior proposals, agreements,
representations and other communications between the parties with respect
to *
*
8.2 Amendment: No change in the provisions of this Agreement shall be
valid unless in writing and signed by both parties.
8.3 Assignment: Neither party may assign, sublicense, or otherwise
transfer its rights and obligations under this Agreement to any party at
any time under any circumstances, without the prior written consent of the
other party, including, without limitation, in the event of a Change of
Control (as defined in Exhibit 2) or by operation of law; provided,
however, that (a) with respect to an assignment by operation of law, the
consent of HP shall not be unreasonably withheld in any of the following
cases: (i) a consolidation of Lexmark with LIG in which neither Lexmark nor
LIG survives, (ii) a merger of Lexmark with a Lexmark Qualified Subsidiary
in which Lexmark is not the surviving corporation, or (iii) a merger of
Lexmark with a subsidiary of LIG (other than Lexmark) in which Lexmark is
not the surviving corporation and such LIG subsidiary is subject to
jurisdiction in the United States, was formed exclusively to acquire
Lexmark
*Confidential portion has been omitted and filed separately with the SEC
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and has no operating assets or independent business operations; and (b) with
respect to an assignment by operation of law, the consent of Lexmark shall not
be unreasonably withheld in either of the following cases: (i) a consolidation
of HP with an HP Qualified Subsidiary in which neither HP nor the HP Qualified
Subsidiary survives, or (ii) a merger of HP into an HP Qualified Subsidiary in
which HP is not the surviving corporation.
8.3.1 For purposes of this Subsection 8.3, "Lexmark Qualified
Subsidiary" means a Lexmark (a) wholly-owned subsidiary, (b) less than
wholly-owned but at least majority-owned subsidiary so long as any such
merger or consolidation is undertaken predominantly for corporate
structuring purposes and not pursuant to any written or oral agreement with
any Person which is not a Subsidiary, or (c) Subsidiary, the only shares of
which that are owned by Persons other than Lexmark or any of its
Subsidiaries are directors' qualifying shares or shares owned solely to
satisfy local law ownership requirements.
8.3.2 For purposes of this Subsection 8.3, "HP Qualified Subsidiary"
means an HP (a) wholly-owned subsidiary, (b) less than wholly-owned but at
least majority-owned subsidiary so long as any such merger or consolidation
is undertaken predominantly for corporate structuring purposes and not
pursuant to any written or oral agreement with any Person which is not a
Subsidiary, or (c) Subsidiary, the only shares of which that are owned by
Persons other than HP or any of its Subsidiaries are directors' qualifying
shares or shares owned solely to satisfy local law ownership requirements.
8.3.3 Any permitted successors or assigns of either party shall be
bound by the terms and conditions of this Agreement.
8.4 Neither party shall assign or convey any of its Licensed Patents (or
applications therefor) unless such assignment or conveyance is made subject to
the terms and conditions of this Agreement.
8.5 Disputes: With regard to any dispute arising out of this Agreement, the
parties shall first attempt to settle the same by means of amicable, sensible
and generally reasonable discussions and/or negotiations held between the
parties for at least sixty (60) days before filing any suit or action.
8.6 Waiver: The failure or delay of either party in exercising any of its
rights hereunder, including any rights with respect to a breach of any
obligation to pay royalties by the other party, shall in no way operate as a
waiver of such rights or prevent the assertion of such rights with respect to
any later breach or default by such other party.
8.7 Exhibits: Exhibits 1, 2, 3 and 4 referred to herein shall be construed
with and as an integral part of this Agreement to the same extent as if they
were set forth verbatim herein.
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HP Confidential Lexmark Confidential
8.8 Headings and Days: The headings used in this Agreement are for
reference and convenience only and shall not be used in interpreting the
provisions of this Agreement. All references to "days" in this Agreement shall
mean calendar days unless otherwise stated.
8.9 No Other Licenses: Nothing contained in this Agreement shall be deemed
to grant, either directly or by implication, estoppel, or otherwise, any
licenses under patents or other intellectual property rights other than as
specifically provided in this Agreement.
8.10 Unenforceability: Should any provision of this Agreement be held
unenforceable, such holding shall not affect the validity and enforceability of
the remaining provisions of this Agreement.
8.11 Notice: Any notice or acceptance provided for in this Agreement shall
be in writing and (except as otherwise provided in Subsection 3.5, 7.2 and 7.3)
shall be deemed to have been given on the date such communication is deposited
in certified or registered first class mail, in an appropriately stamped
envelope, addressed as follows (or to such other address as a party shall
designate by written notice given to the other party):
Director of Patents and Licenses
Legal Department
Hewlett-Packard Company
3000 Hanover Street
Palo Alto CA 94303
General Counsel
Lexmark International, Inc.
740 New Circle Road, N.W.
Lexington, Kentucky 40511
8.12 Waiver and Release: The parties hereto acknowledge the existence of
Section 1542 of the Civil Code of the State of California which reads as
follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.
The parties hereby respectively expressly waive and relinquish all rights and
benefits under Section 1542, and any law or legal principle of similar effect in
any jurisdiction, with respect to the releases granted in Subsection 3.1.
8.13 Choice of Law: This Agreement shall be governed by the laws of the
State of California.
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HP Confidential Lexmark Confidential
In Witness Whereof, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives on the day and year first set forth
above.
Hewlett-Packard Company Lexmark International, Inc.
By: /s/ Antonio Perez By: /s/ Paul J. Curlander
---------------------- --------------------------
Typed Name: Antonio Perez Typed Name: Paul J. Curlander
--------------- ------------------
Title:Vice President,Gen. Mgr. Title:Exec. Vice President,Operations
------------------------ -------------------------------
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HP Confidential Lexmark Confidential
EXHIBIT 1
* Printer Consumables *
*
*
The Printer Consumables identified in this Exhibit also include *
*
*Confidential portion has been omitted and filed separately with the SEC
18
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HP Confidential Lexmark Confidential
EXHIBIT 2
"Actual Voting Power" with respect to a corporation shall mean the total number
-------------------
of votes that may be cast in the election of directors (or other managing
authority if not a corporation) of such corporation at any meeting of
stockholders of such corporation, assuming all shares of common stock and other
securities of such corporation entitled to vote generally in the election of
directors of such corporation were present and voted at such meeting, other than
votes that may be cast only by one class or series of stock (other than common
stock) upon the happening of a contingency. Options and other convertible
securities, prior to the exercise or conversion of any such securities, shall
not count for the purposes of determining "Actual Voting Power" in this Exhibit
2.
"Affiliate" shall mean, when used with respect to a specified Person, another
---------
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified.
"Benefit Plan" shall mean any Person who is both (1) any of an employee benefit
------------
plan, employee stock ownership plan or pension fund which would be subject to
the provisions of the Employee Retirement Income Security Act of 1974, as
amended, if it were governed by U.S. law, and *
*
*
*
*
* not with the purpose or with the effect of changing or
influencing the control of HP, Lexmark or LIG or in connection
with or as a participant in any transaction having any such
purpose or effect, including any transaction described in Rule
13d-3(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")
*
*
* and not with the purpose or with the effect of
changing or influencing the control of Lexmark or LIG or in
connection with or as a participant in any transaction having any
such purpose or effect, including any transaction described in
Rule 13d-3(b) of the Exchange Act *
*
A "Change of Control" shall have occurred with respect to an entity for the
------------------
purposes of this Agreement if any one or more of the following shall occur:
*Confidential portion has been omitted and filed separately with the SEC
19
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(1) The entity or any of its Subsidiaries shall consolidate
with, or merge with and into, any other Person and the other
Person shall be the continuing or surviving corporation (other
than with any of its or, if the entity is Lexmark, its parent
holding company's (A) wholly-owned subsidiaries, (B) less than
wholly-owned but at least a majority-owned subsidiary so long as
any such merger or consolidation is undertaken predominantly for
corporate structuring purposes and not pursuant to any oral or
written agreement with a Person which is not a Subsidiary, or (C)
Subsidiary, the only shares of which that are owned by Persons
other than the entity or any of its Subsidiaries are directors'
qualifying shares or shares owned solely to satisfy local law
ownership requirements), and as a part of such transaction such
other Person or its Subsidiaries or shareholders become the owner
of Equity Securities representing more than fifty percent (50%)
of the Actual Voting Power of the entity.
(2) Any Person or any of its Subsidiaries shall consolidate
with the entity, or merge with and into the entity and the entity
shall be the continuing or surviving corporation of such
consolidation or merger (other than any consolidation or merger
with any of such entity's or, if the entity is Lexmark, its
parent holding company's (A) wholly-owned subsidiaries, (B) less
than wholly-owned but at least a majority-owned subsidiary so
long as any such merger or consolidation is undertaken
predominantly for corporate structuring purposes and not pursuant
to any written or oral agreement with any Person which is not a
Subsidiary or, (C) Subsidiary, the only shares of which that are
owned by Persons other than the entity or any of its Subsidiaries
are directors' qualifying shares or shares owned solely to
satisfy local law ownership requirements) and, in connection with
such consolidation or merger, all or part of the capital stock
shall be changed into or exchanged for stock or other securities
of any Person (including the entity) or cash or any other
property, and as a part of such transaction such other Person or
its Subsidiaries or shareholders become the owner of Equity
Securities representing more than fifty percent (50%) of the
Actual Voting Power of the entity.
(3) Any Person other than an Exempted Person has: (A)
acquired direct or indirect ownership of Equity Securities
representing more than fifty percent (50%) of the Actual Voting
Power of such entity as a result of an open market purchase,
privately negotiated purchase, merger or otherwise, or (B)
consummated a tender or exchange offer resulting in that Person
obtaining direct or indirect ownership of Equity Securities
representing more than fifty percent (50%) of the Actual Voting
Power of the entity. In no event will the Equity Securities of a
Third Party Benefit Plan be counted as owned by such Person in
determining the percentage of Actual Voting Power represented by
such Person's ownership of Equity Securities.
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HP Confidential Lexmark Confidential
(4) With respect to LIG or Lexmark, if any one of the
Restricted Companies has: (A) directly or indirectly acquired
Equity Securities representing twenty-five percent (25%) or more
of the Actual Voting Power of Lexmark or LIG as a result of an
open market purchase, privately negotiated purchase, merger or
otherwise, or (B) consummated a tender or exchange offer
resulting in that Restricted Company obtaining ownership directly
or indirectly of Equity Securities representing twenty-five
percent (25%) or more of the Actual Voting Power of Lexmark or
LIG (either (4)(A) or (4)(B) is referred to as a "Restricted
Company Purchase"). Except as provided in paragraph (4)(i)(a)
below, in no event will the Equity Securities of a Restricted
Company Benefit Plan be counted as owned by such Restricted
Company in determining the percentage of Actual Voting Power
represented by such Restricted Company's ownership of Equity
Securities.
*
terminates any licenses granted to *
* because a Change of Control described in this subparagraph
* has occurred, * revive such licenses and
cause them to be in full force and effect in the event that
either: *
*
*
*Confidential portion has been omitted and filed separately with the SEC
21
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HP Confidential Lexmark Confidential
*
*
*
(6) An entity shall file a voluntary petition in bankruptcy
or a Person shall file in a court of competent jurisdiction an
involuntary petition in bankruptcy against an entity and such
involuntary petition is not withdrawn, dismissed or stayed within
ninety (90) days thereafter.
(7) An entity which is insolvent shall be liquidated or
dissolved; provided, however, that a merger in which the entity
------------------
is not the surviving or resulting corporation does not constitute
a dissolution within the meaning of this subparagraph (7).
*
*
*
*
* *
*
*
* the entity sells or otherwise disposes of all
or substantially all of its assets *
* Any of HP, LIG or Lexmark or any of their
respective Subsidiaries *
*
*
*
*Confidential portion has been omitted and filed separately with the SEC
22
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"Control," "controlled by" and "under common control with"shall mean possession,
------- ------------- -------------------------
directly or indirectly, of power to direct or cause the direction of management
or policies, whether through ownership of securities or partnership, limited
liability company or other ownership interests, by contract or otherwise.
"Equity Securities" shall mean any securities of a corporation entitled to vote
-----------------
generally in the election of directors of such corporation (or if not a
corporation, for election of a similar managing body).
"Exempted Person" shall mean LIG, Lexmark, HP, any wholly-owned subsidiary of
----------------
LIG, Lexmark or HP, *
*
*
*
*
*
"Person" shall mean any individual, firm, corporation, including HP, LIG or
------
Lexmark, partnership, limited liability company, trust, joint venture, "Group"
within the meaning of Section 13(d)(3) of the Exchange Act, court,
administrative agency or commission or other governmental agency or
instrumentality, domestic or foreign, or any arbitrator, of competent
jurisdiction, or other entity, and shall include any successor (by merger or
otherwise) of such entity.
"Restricted Company or Restricted Companies" shall mean *
------------------------------------------
*
*Confidential portion has been omitted and filed separately with the SEC
23
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HP Confidential Lexmark Confidential
*
*
*
"Subsidiaries" means any corporation or other business entity in which a Person
------------
now or hereafter owns or controls more than fifty percent (50%) of the
outstanding voting stock or other voting rights entitled to elect directors, but
such corporation or entity shall be deemed to be a Subsidiary only so long as
such ownership or control exists.
*Confidential portion has been omitted and filed separately with the SEC
24
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HP Confidential Lexmark Confidential
LETTER AGREEMENT
Reference is made to the Patent Cross-License Agreement effective October 1,
1996 (the "Agreement") between Hewlett-Packard Company, a California
corporation, and Lexmark International, Inc., a Delaware corporation. Defined
terms used herein and not otherwise defined shall have the meanings assigned to
them in the Agreement. *
*
*
*
*
*
LEXMARK INTERNATIONAL, INC. HEWLETT-PACKARD COMPANY
By: /s/ Paul J. Curlander By: /s/ Antonio Perez
--------------------------- ---------------------------
Typed Name: Paul J. Curlander Typed Name: Antonio Perez
Title: Exec. Vice President Operations Title: Vice President, General Mgr.
Date: October 17, 1996 Date: October 17, 1996
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HP Confidential Lexmark Confidential
LETTER AGREEMENT
Reference is made to the Patent Cross-License Agreement effective October 1,
1996 (the "Agreement") between Hewlett-Packard Company, a California
corporation, and Lexmark International, Inc., a Delaware corporation. Defined
terms used herein and not otherwise defined shall have the meanings assigned to
them in the Agreement. *
*
*
*
LEXMARK INTERNATIONAL, INC. HEWLETT-PACKARD COMPANY
By: /s/ Paul J. Curlander By: /s/ Antonio Perez
--------------------- --------------------
Typed Name: Paul J. Curlander Typed Name: Antonio Perez
Title:Exec. Vice President Operations Title: Vice President, General Mgr.
Date: October 17, 1996 Date: October 17, 1996
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HP Confidential Lexmark Confidential
EXHIBIT 3
---------
LEXMARK INTERNATIONAL AND HEWLETT-PACKARD
AGREE TO CROSS-LICENSE PATENTS FOR PRINTERS
-- Pact resolves infringement claims --
LEXINGTON, Ky., --------------, 1996 -- Lexmark International, Inc. today
announced it has signed an agreement with Hewlett-Packard Company to
cross-license each other's patents filed prior to a specified date.
While the specific details of the agreement are confidential, the agreement
generally gives the companies a worldwide license under the licensed patents for
the manufacture and sale of printers, as well as accessories and consumable
supplies designed for use with each company's own printers. The agreement
resolves issues of patent infringement that had been raised by both companies
and does not involve any royalty or other payments by either party.
"Our customers will be the ultimate beneficiaries of this agreement, which
gives us important flexibility and freedom in the continuing design and
development of leading-edge printing solutions," said Marvin L. Mann, chairman
and chief executive officer of Lexmark. "We are pleased to have resolved this
issue to our mutual benefit."
Lexmark holds nearly 2,000 patents worldwide and has filed more than 200
worldwide patent applications since its inception in 1991. The company has more
than 100 cross-license agreements of various types with other companies. Lexmark
first entered the color inkjet printer market in 1994 and now markets four
models in retail channels -- the WinWriter 150c and the Color Jetprinter 1020,
2050 and 2070.
Lexmark International, Inc., is a global developer, manufacturer and
supplier of printing solutions and products, including laser, inkjet and
dot-matrix printers and associated consumable supplies for the office and home
markets. The company is a
27
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HP Confidential Lexmark Confidential
wholly owned subsidiary of Lexmark International Group, Inc. (NYSE: LXK).
Lexmark, which had sales of $2.2 billion in 1995, has executive offices and its
largest manufacturing center in Lexington, Ky.; other manufacturing centers are
in Boulder, Colo.; Rosyth, Scotland; Orleans, France and Sydney, Australia. An
additional facility will open in Juarez, Mexico, later this year.
Information about Lexmark can be found in the company's home page at
www.lexmark.com on the Internet. Editional contacts are: Jim Joseph, Lexmark
International, Inc. (606) 232-2249; Stacie Savage, Hewlett-Packard Company (619)
655-4451.
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HP Confidential Lexmark Confidential
EXHIBIT 4
---------
PATENT CROSS-LICENSE AGREEMENT (redacted)
This Agreement is effective October 1, 1996 between Hewlett-Packard
Company, incorporated under the laws of the State of California, with a place of
business at 3000 Hanover Street, Palo Alto, California 94304, U.S.A. ("HP"), and
Lexmark International, Inc., incorporated under the laws of the State of
Delaware, with a place of business at 740 New Circle Road, Lexington, Kentucky,
40511, U.S.A., ("Lexmark");
Whereas, HP and Lexmark (formerly known as "IBM Information Products
Corporation") have entered into a previous Agreement dated March 26, 1991
(hereinafter "Previous Agreement") relating to patent rights of HP and Lexmark;
Whereas, HP has brought certain HP patents to Lexmark's attention in
connection with certain Lexmark products;
Whereas, Lexmark has brought certain Lexmark patents to HP's attention
in connection with certain HP products;
Whereas,HP and Lexmark desire to resolve these patent disputes amicably;
Whereas, HP and Lexmark desire to promote individual research,
advancement of printing technology, and development of new products; and
Whereas, HP and Lexmark desire to each obtain greater design freedom
for their own products and to avoid infringement of the other party's patents;
Now, Therefore, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:
1. Definitions.
1.1 "Subsidiaries" means any corporation or other business entity in
which either party now or hereafter owns or controls more than fifty percent
(50%) of the outstanding voting stock or other voting rights entitled to elect
directors, but such corporation or entity shall be deemed to be a Subsidiary
only so long as such ownership or control exists.
1.2 "Licensed Patents" means any and all patents throughout the world,
including utility models and including design patents/registrations for type
fonts (but not including any other design patents, industrial designs or design
registrations) issued or issuing on applications entitled to a first effective
filing date before under which patents or applications therefor
either party (as a Licensor) or any of its Subsidiaries now has or hereafter
obtains the right to grant licenses to the other party (as a Licensee) of or
within the scope granted herein.
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HP Confidential Lexmark Confidential
EXHIBIT 4
---------
The term "Licensed Patents"
shall also include any patent reissuing on any of the aforesaid patents.
1.3 "Printers" means
1.4 "Print Mechanisms" means
1.5 "OEM Inkjet Printer Subassemblies" means
1.6 "Printer Consumables" means
30
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HP Confidential Lexmark Confidential
EXHIBIT 4
---------
1.7 "Customized OEM Consumables" means
1.8 "Printer Consumable Components" means
1.9 "Printer Accessories" means
31
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HP Confidential Lexmark Confidential
EXHIBIT 4
---------
1.10 "Print Media" means
1.11 "Licensed Products" means any one or more of and only the following:
(a) Printers;
(b) Print Mechanisms;
(c) Printer Service Items;
(d) typewriters;
(e) OEM Inkjet Printer Subassemblies;
(f) Printer Consumables;
(g) Customized OEM Consumables;
(h) Third Party Inkjet Consumables;
(i) Printer Consumable Components;
(j) Printer Accessories;
(k) Print Media;
(l) Printer Consumable Material; and
(m) manufacturing apparatus and methods used to fabricate any
one or more of (a) through (l) above.
1.12 "Printer Consumable Material" means
1.13 "Inkjet" means printing technology in which thermal energy is used
to eject droplets of ink onto a medium to create images or text.
1.14 "Inkjet Products" means
32
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HP Confidential Lexmark Confidential
EXHIBIT 4
---------
1.17 "Third Party Inkjet Consumables" means
33
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HP Confidential Lexmark Confidential
EXHIBIT 4
---------
1.18 "Printer Service Items" means
1.20 "Acquired Printer Company Products" means
1.21 "Product Platform" means:
1.22 "Product Models" means
34
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HP Confidential Lexmark Confidential
EXHIBIT 4
---------
2. Previous Agreement.
2.2 Paragraph 5.2 of the Previous Agreement is hereby terminated in all
respects and is not replaced by any provision of this Agreement.
2.3 Paragraph 5.3 of the Previous Agreement is hereby terminated in all
respects and is not replaced by any provision of this Agreement.
3. Grants and Releases.
3.1 Each party (as a Releasing Party) forever releases and discharges the
other party (as a Released Party), its Subsidiaries and all purchasers and users
of Licensed Products sold by the Released Party or any of its Subsidiaries
before the effective date of this Agreement from all claims and liabilities for
any infringement of the Licensed Patents prior to the effective date of this
Agreement with respect to those products.
3.2 Subject to the limitations set forth in paragraphs 3.2.1 and 3.2.2
below, each party (as a Licensor) hereby grants to the other party (as a
Licensee) and its Subsidiaries a worldwide, royalty free, non-exclusive license,
without the right to sublicense, to make, have made (as provided below in
Section 4), use, import, offer for sale, sell, or otherwise dispose of: (a)
Inkjet Products (excluding OEM Inkjet Printer Subassemblies and Third Party
Inkjet Consumables)
(b) OEM Inkjet Printer Subassemblies and Third Party
Inkjet Consumables and (c) all other Licensed
Products
35
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HP Confidential Lexmark Confidential
EXHIBIT 4
---------
3.4 This Agreement is a patent cross license agreement. Neither party
is licensed under the copyrights mask works,trademarks, trade names,trade dress,
or trade secrets (or other confidential information) of the other party. Nothing
in this Agreement shall be read to authorize either party to make any
representations to the contrary to third parties
3.5 Each party (as a Licensor) grants to the other party (as a
Licensee) and its Subsidiaries a worldwide, non-exclusive license under the
Licensed Patents, without the right to sublicense, to make, have made (as
provided in Section 4), use, import, offer for sale, sell, or otherwise dispose
of (a) Acquired Printer Company Products, but only for a period ending
after the acquisition of the respective acquired third party, and (b) spare
parts and accessories (but not consumables) for Acquired Printer Company
Products, but only for a period ending after the acquisition of
the respective acquired party, at a royalty rate equal to the lesser of (1)
realized from the sale of Acquired Printer Company Products and
spare parts and accessories for those products for each patent practiced by
the products licensed under this Subsection 3.5, (2) realized from
the sale of such products, and (3) the royalty rate that would have applied
under any separate agreement between the Licensor and the respective acquired
party had such party not been acquired. In the event either party (as a
Licensee) fails to cure a material breach of this Subsection 3.5 within sixty
(60) days after the date of receipt of written notice of such breach, the
other party (as a Licensor) may terminate the licenses granted to the Licensee
pursuant to this Subsection 3.5.
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EXHIBIT 4
---------
3.6 If an entity ceases to be a Subsidiary, then all rights and
licenses granted to that Subsidiary under this Agreement shall automatically
terminate.
4. Have-Made Rights.
4.1 Subject to Subsection 4.3, any license granted under any of the
above provisions to have Printers, Print Mechanisms, typewriters, made by a
third-party manufacturer for the use, importation, offer for sale, sale or other
disposition by a party or any of its Subsidiaries requesting such making ("the
Requesting Party") shall be restricted to all of the following conditions:
4.1.1 The designs, specifications and working drawings for the
manufacture of such products must be owned and furnished by, and also
must originate with the Requesting Party (or with the Requesting
Party's contractor, whether or not the contractor is also the third
party manufacturer);
4.1.2 Unless the Requesting Party's contractor is the third
party manufacturer, the designs, specifications and working drawings
must be in sufficient detail that substantially no additional designing
by the third-party manufacturer is required other than adaptation to
the production processes and standards normally used by the third-party
manufacturer, which adaptation changes the characteristics of such
products only to a negligible extent; and
4.1.3 Any products made pursuant to this Subsection 4.1 by a
third-party manufacturer shall be purchased by the Requesting Party.
4.1.4 If a third party contractor or manufacturer originates
the designs, specifications and working drawings of Printers, Print
Mechanisms, typewriters,
any patents or patent applications, which are based on inventions made
in the contract, and which cover such products or any portion
thereof, must be licensable by the Requesting Party to the other
party on a royalty-free basis and subject to the terms and
conditions of this Agreement.
37
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EXHIBIT 4
---------
4.2 Subject to Subsection 4.3, any license granted under any
of the above provisions to have Printer Consumables
made by a third-party
manufacturer for the use, importation, offer for sale, sale or other
disposition by a party or any of its Subsidiaries requesting such making ("the
Requesting Party") shall be restricted to all of the following conditions:
4.2.1 The designs, specifications and working drawings for the
manufacture of such products must be owned by, furnished by, and
originate with the Requesting Party;
4.2.2 The designs, specifications and working drawings must be
in sufficient detail that substantially no additional designing by the
third-party manufacturer is required other than minor adaptation to the
production processes and standards normally used by the third-party
manufacturer, which adaptation changes the characteristics of such
products only to a negligible extent; and
4.2.3 Any products made pursuant to this Subsection 4.2 by a
third party manufacturer shall be purchased by the Requesting Party.
4.3 Solely with regard to any license granted under
any of the above provisions to have Licensed Products made by a third-party
manufacturer for the use, importation,offer for sale, sale or other disposition
by a party or any of its Subsidiaries requesting such making ("the Requesting
Party") shall be restricted to all of the following conditions:
4.3.1 The designs, specifications and working drawings for the
manufacture of such products must be owned by, furnished by, and
originate with the Requesting Party;
4.3.2 The designs, specifications and working drawings must be
in sufficient detail that substantially no additional designing by the
third-party manufacturer is required other than minor adaptation to the
production processes
38
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EXHIBIT 4
---------
and standards normally used by the third-party manufacturer, which
adaptation changes the characteristics of such products only to a
negligible extent; and
4.3.3 Any and all products made pursuant to this Subsection
4.3 by a third-party manufacturer shall be purchased by the Requesting
Party.
5. Warranty and Disclaimer.
5.1 Each party warrants that it has the right to grant the licenses set
forth in Section 3 hereof. Neither party makes any other representations or
warranties, express or implied, nor does either party assume any liability with
respect to any infringement of patents or other rights of third parties due to
the other party's operation under the licenses granted herein, nor does either
party assume any responsibility for enforcement of its patents against third
parties.
5.2 Lexmark warrants that Lexmark International Group, Inc. ("LIG") and
its subsidiaries (other than Lexmark or Subsidiaries of Lexmark) currently do
not own any patents. In the event LIG itself becomes the owner of any patents,
which if owned by Lexmark would be within the scope of the Licensed Patents as
defined in this Agreement, Lexmark also warrants that it will cause such patents
to be licensed to HP and its Subsidiaries on the same basis as the Licensed
Patents.
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EXHIBIT 4
---------
6. Confidentiality.
6.1 The parties agree that although the existence of this Agreement is
not confidential, the terms are confidential. Each party shall use the same
degree of care to prevent disclosure of the terms of this Agreement to any third
party as it uses to protect its own most sensitive confidential information. In
no event will this obligation of confidentiality preclude any disclosure
required by law or by a regulatory authority, provided that prior to making any
such disclosure of the terms of this Agreement a party shall promptly consult in
advance with the other party and shall use all commercially reasonable efforts
to obtain written assurance that confidential treatment will be accorded to such
information. If any party determines upon the advice of counsel that this
Agreement or any part of it is required to be filed with the Securities and
Exchange Commission, the parties agree that: (a) confidential treatment shall be
sought for the provisions of the Agreement as indicated by the redacted copy of
this Agreement attached hereto as Exhibit 4, (b) the party making the filing
shall give the other party the opportunity to review and provide input on the
filing and the confidential treatment request, and (c) the filing party will
give the other party a copy of any submission. The parties further agree that
neither party will issue a press release or otherwise make a public announcement
relating to the existence or provisions of this Agreement without the prior
written consent of the other party, except as set forth in Exhibit 3 in the case
of Lexmark and as may be adapted with respect to company specific information in
the case of either HP or Lexmark.
6.2 Notwithstanding the provisions of Subsection 6.1, if either party
determines that a potential Change of Control may take place with regard to a
particular third party and that it is reasonably necessary to disclose the terms
of Section 7 and Exhibit 2 of this Agreement, then such party may disclose such
information, provided such party shall use all commercially reasonably efforts
to obtain written assurance that confidential treatment will be accorded such
information.
6.3 In the event of termination of a license under Section 7 of this
Agreement, each party may make a public disclosure (subject to the provisions of
Subsection 6.1) concerning the termination and the surviving licenses.
7. Term and Termination.
7.1 The term of this Agreement shall be from the effective date hereof
until the expiration of the last to expire of the patents licensed hereunder.
7.2 All licenses granted by this Agreement under
may be terminated: (a) by HP if a Change of Control, as defined in Exhibit 2,
occurs with respect to Lexmark, LIG, or any successor entity to either of them;
or (b) by
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Lexmark if a Change of Control, as defined in Exhibit 2, occurs with
respect to HP or any successor entity to it. In order to be effective, such
termination must be in accordance with paragraphs 7.2.1 and 7.2.2.
7.2.1 Any termination pursuant to this Subsection 7.2 shall be
effective as of the date that such Change of Control takes place
provided that the party terminating the licenses gives written notice
to the other party as set forth in paragraph 7.2.2.
7.2.2 Each party shall give the other party prompt written
notice of the occurrence of a Change of Control of such party. The
party seeking to terminate licenses pursuant to this Subsection 7.2
must provide the terminated party with written notice of termination
within ninety (90) days of the date of receipt of the notice of the
occurrence of a Change of Control or the licenses shall remain in
effect.
7.2.3 Notwithstanding any provisions to the contrary, in the
event of a termination of licenses pursuant to this Section 7, the
terminating party (as a Licensor) hereby grants to the terminated party
(as a Licensee) and its Subsidiaries a worldwide, royalty-free,
non-exclusive license under
to make, have made (as provided in Section 4), use, import, offer for
sale, sell or otherwise dispose of Licensed Products as follows:
(a) Printer Accessories, Printer Service Items, Printer
Consumables, Customized OEM Consumables, Printer Consumable
Components, Print Media, and Printer Consumable Material: (i)
for a period
(b) Printers, Print Mechanisms, and typewriters for a period
7.2.4 Any termination of licenses pursuant to this Subsection
7.2 shall not relieve the party whose licenses are terminated of any
obligation or liability accrued hereunder, and such termination shall
not affect in any manner any licenses or other rights granted to the
other party under this Agreement. In the event of the termination of
any patent licenses under this Subsection 7.2, all other rights and
obligations under this Agreement shall remain in effect.
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7.3 Except as otherwise provided in this Section 7 and in Subsection
3.5, in the event either party fails to cure or is unable to cure a
material breach of this Agreement within sixty (60) days after receipt of
written notice of such breach, the other party may bring an action for
breach under this Subsection 7.3. The non-breaching party shall be entitled
only to damages and/or injunctive relief, except in cases where damages
and/or injunctive relief would not be equitable for a particular material
breach. In any such case, upon a final judicial determination that a
material breach has occurred and was not timely cured or cannot be cured as
provided in this Subsection 7.3 and that other relief is not equitable, the
breaching party's licenses under may be
terminated effective as of the date of receipt of written notice of such
material breach by the breaching party. The parties agree that in the
event of such a termination of the breaching party's licenses under
the non-breaching party shall only be
licensed under the breaching party's
entitled to a first effective filing date prior to the effective date of
such termination. The parties further agree that in no event shall any
remedy for breach include termination of the licenses to either party
under such licenses
and all the limitations and obligations associated with those licenses
shall remain in effect.
8. Miscellaneous.
8.1 Merger: This Agreement (including attached Exhibits 1, 2, 3 and 4)
constitutes the entire Agreement between the parties relating to
and to this extent supersedes all prior proposals, agreements,
representations and other communications between the parties with respect to
the Previously and Subsequently Licensed Patents.
8.2 Amendment: No change in the provisions of this Agreement shall be
valid unless in writing and signed by both parties.
8.3 Assignment: Neither party may assign, sublicense, or otherwise
transfer its rights and obligations under this Agreement to any party at any
time under any circumstances, without the prior written consent of the other
party, including, without limitation, in the event of a Change of Control (as
defined in Exhibit 2) or by operation of law; provided, however, that (a) with
respect to an assignment by operation of law, the consent of HP shall not be
unreasonably withheld in any of the following cases: (i) a consolidation of
Lexmark with LIG in which neither Lexmark nor LIG survives, (ii) a merger of
Lexmark with a Lexmark Qualified Subsidiary in which Lexmark is not the
surviving corporation, or (iii) a merger of Lexmark with a subsidiary of LIG
(other than Lexmark) in which Lexmark is not the surviving corporation and such
LIG subsidiary is subject to jurisdiction in the United States, was formed
exclusively to acquire Lexmark
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and has no operating assets or independentbusiness operations; and (b) with
respect to an assignment by operation of law, the consent of Lexmark shall
not be unreasonably withheld in either of the following cases:(i)a consolidation
of HP with an HP Qualified Subsidiary in which neither HP nor the HP Qualified
Subsidiary survives, or (ii) a merger of HP into an HP Qualified Subsidiary in
which HP is not the surviving corporation.
8.3.1 For purposes of this Subsection 8.3, "Lexmark Qualified
Subsidiary" means a Lexmark (a) wholly-owned subsidiary, (b) less than
wholly-owned but at least majority-owned subsidiary so long as any such
merger or consolidation is undertaken predominantly for corporate
structuring purposes and not pursuant to any written or oral agreement
with any Person which is not a Subsidiary, or (c) Subsidiary, the only
shares of which that are owned by Persons other than Lexmark or any of
its Subsidiaries are directors' qualifying shares or shares owned
solely to satisfy local law ownership requirements.
8.3.2 For purposes of this Subsection 8.3, "HP Qualified
Subsidiary" means an HP (a) wholly-owned subsidiary, (b) less than
wholly-owned but at least majority-owned subsidiary so long as any such
merger or consolidation is undertaken predominantly for corporate
structuring purposes and not pursuant to any written or oral agreement
with any Person which is not a Subsidiary, or (c) Subsidiary, the only
shares of which that are owned by Persons other than HP or any of its
Subsidiaries are directors' qualifying shares or shares owned solely to
satisfy local law ownership requirements.
8.3.3 Any permitted successors or assigns of either party
shall be bound by the terms and conditions of this Agreement.
8.4 Neither party shall assign or convey any of its Licensed Patents
(or applications therefor) unless such assignment or conveyance is made subject
to the terms and conditions of this Agreement.
8.5 Disputes: With regard to any dispute arising out of this Agreement,
the parties shall first attempt to settle the same by means of amicable,
sensible and generally reasonable discussions and/or negotiations held between
the parties for at least sixty (60) days before filing any suit or action.
8.6 Waiver: The failure or delay of either party in exercising any of
its rights hereunder, including any rights with respect to a breach of any
obligation to pay royalties by the other party, shall in no way operate as a
waiver of such rights or prevent the assertion of such rights with respect to
any later breach or default by such other party.
8.7 Exhibits: Exhibits 1, 2, 3 and 4 referred to herein shall be
construed with and as an integral part of this Agreement to the same extent as
if they were set forth verbatim herein.
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8.8 Headings and Days: The headings used in this Agreement are for
reference and convenience only and shall not be used in interpreting the
provisions of this Agreement. All references to "days" in this Agreement shall
mean calendar days unless otherwise stated.
8.9 No Other Licenses: Nothing contained in this Agreement shall be
deemed to grant, either directly or by implication, estoppel, or otherwise, any
licenses under patents or other intellectual property rights other than as
specifically provided in this Agreement.
8.10 Unenforceability: Should any provision of this Agreement be held
unenforceable, such holding shall not affect the validity and enforceability of
the remaining provisions of this Agreement.
8.11 Notice: Any notice or acceptance provided for in this Agreement
shall be in writing and (except as otherwise provided in Subsection 3.5, 7.2 and
7.3) shall be deemed to have been given on the date such communication is
deposited in certified or registered first class mail, in an appropriately
stamped envelope, addressed as follows (or to such other address as a party
shall designate by written notice given to the other party):
Director of Patents and Licenses
Legal Department
Hewlett-Packard Company
3000 Hanover Street
Palo Alto CA 94303
General Counsel
Lexmark International, Inc.
740 New Circle Road, N.W.
Lexington, Kentucky 40511
8.12 Waiver and Release: The parties hereto acknowledge the existence
of Section 1542 of the Civil Code of the State of California which reads as
follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.
The parties hereby respectively expressly waive and relinquish all rights and
benefits under Section 1542, and any law or legal principle of similar effect in
any jurisdiction, with respect to the releases granted in Subsection 3.1.
8.13 Choice of Law: This Agreement shall be governed by the laws of
the State of California.
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In Witness Whereof, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives on the day and year first set forth
above.
Hewlett-Packard Company Lexmark International, Inc.
By:______________________________ By: ______________________________
Typed Name: _____________________ Typed Name: ______________________
Title: ____________________________ Title: __________________________
Date: ____________________________ Date: ___________________________
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"Actual Voting Power" with respect to a corporation shall mean the
---------------------
total number of votes that may be cast in the election of directors (or
other managing authority if not a corporation) of such corporation at
any meeting of stockholders of such corporation, assuming all shares of
common stock and other securities of such corporation entitled to vote
generally in the election of directors of such corporation were present
and voted at such meeting, other than votes that may be cast only by
one class or series of stock (other than common stock) upon the
happening of a contingency. Options and other convertible securities,
prior to the exercise or conversion of any such securities, shall not
count for the purposes of determining "Actual Voting Power" in this
Exhibit 2.
"Affiliate" shall mean, when used with respect to a specified Person,
-----------
another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control
with the Person specified.
A "Change of Control" shall have occurred with respect to an entity for
-------------------
the purposes of this Agreement if any one or more of the following
shall occur:
(1) The entity or any of its Subsidiaries shall
consolidate with, or merge with and into, any other Person and
the other Person shall be the continuing or surviving
corporation (other than with any of its or, if the entity is
Lexmark, its parent holding company's (A) wholly-owned
subsidiaries, (B) less than wholly-owned but at least a
majority-owned subsidiary so long as any such merger or
consolidation is undertaken predominantly for corporate
structuring purposes and not pursuant to any oral or written
agreement with a Person which is not a Subsidiary, or (C)
Subsidiary, the only shares of which that are owned by Persons
other than the entity or any of its Subsidiaries are
directors' qualifying shares or shares owned solely to satisfy
local law ownership requirements), and as a part of such
transaction such other Person or its Subsidiaries or
shareholders become the owner of Equity Securities
representing more than fifty percent (50%) of the Actual
Voting Power of the entity.
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(2) Any Person or any of its Subsidiaries shall
consolidate with the entity, or merge with and into the entity
and the entity shall be the continuing or surviving
corporation of such consolidation or merger (other than any
consolidation or merger with any of such entity's or, if the
entity is Lexmark, its parent holding company's (A)
wholly-owned subsidiaries, (B) less than wholly-owned but at
least a majority-owned subsidiary so long as any such merger
or consolidation is undertaken predominantly for corporate
structuring purposes and not pursuant to any written or oral
agreement with any Person which is not a Subsidiary or, (C)
Subsidiary, the only shares of which that are owned by Persons
other than the entity or any of its Subsidiaries are
directors' qualifying shares or shares owned solely to satisfy
local law ownership requirements) and, in connection with such
consolidation or merger, all or part of the capital stock
shall be changed into or exchanged for stock or other
securities of any Person (including the entity) or cash or any
other property, and as a part of such transaction such other
Person or its Subsidiaries or shareholders become the owner of
Equity Securities representing more than fifty percent (50%)
of the Actual Voting Power of the entity.
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(6) An entity shall file a voluntary petition in
bankruptcy or a Person shall file in a court of competent
jurisdiction an involuntary petition in bankruptcy against an
entity and such involuntary petition is not withdrawn,
dismissed or stayed within ninety (90) days thereafter.
(7) An entity which is insolvent shall be liquidated
or dissolved; provided, however, that a merger in which the
entity is not the surviving or resulting corporation does not
constitute a dissolution within the meaning of this
subparagraph (7).
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"Control, "controlled by" and "under common control with" shall mean
-------- ----------------
possession, directly or indirectly, of power to direct or cause the
direction of management or policies, whether through ownership of
securities or partnership, limited liability company or other ownership
interests, by contract or otherwise.
"Equity Securities" shall mean any securities of a corporation entitled
-------------------
to vote generally in the election of directors of such corporation (or
if not a corporation, for election of a similar managing body).
"Person" shall mean any individual, firm, corporation, including HP,
--------
LIG or Lexmark, partnership, limited liability company, trust, joint
venture, "Group" within the meaning of Section 13(d)(3) of the Exchange
Act, court, administrative agency or commission or other governmental
agency or instrumentality, domestic or foreign, or any arbitrator, of
competent jurisdiction, or other entity, and shall include any
successor (by merger or otherwise) of such entity.
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"Subsidiaries" means any corporation or other business entity in which a
--------------
Person now or hereafter owns or controls more than fifty percent (50%) of
the outstanding voting stock or other voting rights entitled to elect
directors, but such corporation or entity shall be deemed to be a Subsidiary
only so long as such ownership or control exists.
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