•
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`UCENSE AGREEMENT
`
`dated as of the 16th day of February, 1996
`
`between
`
`LAZARE KAPLAN INTERNA DONAL INC .
`
`and
`
`GIA GEM TRADE LABORATORY
`(a division of GIA Enterprices, Inc.)
`
`00193139;15
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`PLAINTIFF'S TRIAL
`EXH. 587
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`IPR2015-00024
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`Lazare Kaplan International, Inc. Exhibit 2022 Page 1
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`TABLE OF CONTENTS
`
`Page No.
`
`1.
`
`2.
`
`Definitions ............. _ . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . -2-
`
`License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
`2.1 Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4-
`2 .2 Reservation of Rights ......................................... -4-
`2.3 GTI~'s f\1arks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5-
`2-4 Exploitation ................................................. -5-
`2.5 Restrictions and Foreign Rights ............................ , . . . . -6-
`2.6. Credit for Increased Purchase Price .............................. -7-
`
`3. Tenns ............................................................ -8-
`Tenn of Agreement .... ~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
`3 .1
`3 2 Initial Term .. _ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`. . . . . -8-
`3.3 License Term for Certain Additional Units ........................ -8-
`3.4 Extension of License Terms .................................... -8-
`
`4.
`
`5.
`
`Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
`4.1 Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
`4 .2 Installation _ ........................... _ .............. __ ..... -9-
`4.3 Initial Start-Up and Acceptance Periods .......... _ . . . . . . . . . . . . . . . . -9-
`4.4 Training ..................... · .......................... _ ... -11-
`4.5 .t\1anuals ................................................... -11-
`4.6 RiskofLoss ............................................... -11-
`4.7 Warranty ........ · .......................................... -l 1-
`4.8 Service .................................................... -12-
`4.9 Failure to Maintain .Equipment ................................. -13-
`
`Royalties and Prices ......................................... _. ... -13-
`5.1 Start-Up Period ............................................. -13-
`5.2 Royalties .................................................. -13-
`5.3 Minimums ................................. _ ............... -14-
`5.4 Success Fee ................................................ -15-
`5.5 Payment ................................................... -15-
`5.6 Prices ........................ · ............................. -16-
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`6 .
`
`7.
`
`8.
`
`9.
`
`10.
`
`11.
`
`12 .
`
`13.
`
`14.
`
`Books and Records; Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
`6. l Books and Records .......................................... -16-
`6.2 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -.17-
`
`Corifideo.tiality ............................... - . . . . . . . . . . . . . . . . . . -17-
`. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
`7 .1 LKJ's Duties
`7 .2 GTL's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
`
`Improvements .................................................. -18-
`
`Representations and Warranties ................................... -18-
`9. l LKI's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . -18-
`9 .2 Mutual Representations and Warr anti es . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
`
`Indemnification ................................................ -19-
`10 .1
`Indemnification with Respect to lnStallation and Property Rights
`. . . -19-
`10.2 Indemnification by GTL ..................................... -20-
`10 .3. Other Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
`
`Insurance ..................................................... -21-
`1 Ll General Insurance .......................................... -21-
`11.2 Producl Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
`
`Termination .............................................. _ . . . . -22-
`12. l Tennination of the Agreement by GTL ......................... -22-
`12.2 Tenn.ination of the Agreement by LKI .......................... -23-
`12.3 Termination of Agreement for Insolvency or Bankrnptcy . . . . . . . . . . . -23-
`12.4 Termination Due to Equipment Problems
`. . . . . . . . . . . . . . . . . . . . . . . -23-
`12.5 Effect of Termination ....................................... -24-
`12.6 Termination of a License Tenn ................................ -25-
`1.2.7 1982 License .............................................. -25-
`
`New York Law ................................................. -25-
`
`Section Headings ........................... _. _ ... : ............. -25-
`
`15.
`
`Entire Understanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
`
`16.
`
`Notices .................................................. .
`
`-26-
`
`17.
`
`Assignment; Sub-Licenses ........................................ -26-
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`IPR2015-00024
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`18.
`
`19.
`
`20.
`
`No Waiver
`
`-26-
`
`Force Majeure ................................................ . -27-
`
`Separability ... _ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
`
`. .... . -27-
`
`21.
`
`Relationship of the· Parties ....................................... . -27-
`
`22.
`
`Publicity; Cooperation .......................................... . -2S-
`
`23.
`
`No Special or Consequential Damages ............................. . -28-
`
`24.
`
`Notification of Patent I!l:fringement ................................ . -28-
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`LICENSE AGREEMENT
`
`AGREEMENT made as of the 16th day of February,
`1996 between LAZARE KAPLAN INTERNATIONAL INC., a Delaware
`corporation having a place of business at 529 Fifth Avenue,
`New York, New York 10017 ("LKI") and GIA GEM TRADE
`LABORATORY, a division of GIA Enterprises, Inc., a
`California corporation having a place of business at 580
`Fifth Avenue, New York, New York 10036 ("GTL")
`
`W I T N E S S E T H
`
`Lazare Kaplan & Sons ("LK Sons") in or prior
`A.
`to 1982, acquired rights to certain inventions, developments
`and know-how relating to a method of, and an apparatus for,
`inscribing letters, numbers and other identifying indicia on
`stones through laser energy (collectively, the "Early
`Technology"); which Early Technology is covered by a United
`States Patent entitled "METHOD AND APPARATUS FOR PLACING
`IDENTIFYING INDICIA ON THE SURFACE OF PRECIOUS STONES
`INCLUDING DIAMONDS", 13aid patent and any letters patent
`which have or may issue from any appli~9tions for related
`developments or inventions owned or controlled by LKI or its
`Affiliates, and any reissues thereof, are collectively the
`11 Patents'' .
`
`GTL is now, and since prior to 1982 was, an
`B.
`independent laboratory primarily engaged in the business of
`grading and identifying stones.
`
`LK Sons, as licensor, entered into a License
`C.
`Agreement with GTL, dated as of August 11, 1982, wherein and
`whereby GTL, on the terms and conditions therein set forth,
`acquired an exclusive license to the Early Technology (the
`"1982 License"). Subsequent to August 11, 1982, LKI became
`the successor by merger to LK Sons, and thereby acquired all
`rights in and to the Early Technology and the Patents, and
`became the licensor under the 1982 License.
`
`LKI has developed a new and better process
`D.
`for inscribing letters, numbers and other identifying
`indicia on stones, which is based upon or derived from the
`Patents and the Know-How (as hereinafter defined), and is
`based upon Equipment (as hereinafter defined), which
`includes without limitation, a diode pumped laser with an
`internal frequency doubler, which process is technologically
`advanced and superior to the Early Technology in that, among
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`other things, it has the capacity to inscribe a logo plus
`fourteen characters at a rate of forty (40) stones per hour.
`
`GTL wishes to acquire from LKI, and LKI
`E.
`wishes to grant to GTL, a license to use the Licensed
`Technology (as hereinafter defined), on the terms and
`conditions set forth herein; it being understood that the
`Equipment will be manufactured by a third party (a
`"Manufacturer") .
`
`NOW, THEREFORE, in consideration of the foregoing
`and of the mutual covenants herein contained, the parties
`agree as follows:
`
`In this Agreement terms not
`1. Definitions.
`elsewhere defined shall be defined as is herein provided:
`
`"Acceptance Period" shall have the meaning defined
`in Section 4.3.
`
`"Affiliates" shall mean each person, firm or
`company directly or indirectly controlled by, controlling,
`or under common control with the subject party.
`"Control"
`means either ownership of more than fifty percent (50%) of
`the outstanding voting securities or equity interest in any
`business entity, or the contractual power to designate a
`majority of the directors of a corporate entity or, in the
`case of unincorporated entities, individuals exercising
`similar functions.
`
`"Equipment" shall mean the apparatus described in
`letter D above, with the components and specifications set
`forth on Schedule 1.
`
`"Initial Start-Up Period" shall have the meaning
`defined in Section 4.3.
`
`"Initial License Term" shall have the meaning
`defined in Section 3.2.
`
`"Inscription" shall have the meaning defined in
`Section 5.2.
`
`"Know~How" shall mean any information, including,
`without limitation, processes and processing methods,
`instructions, schematics, maintenance schedules, production
`techniques and manuals, whether communicated orally or
`embodied in plans, drawings and discs, which relate to the
`design, modification and use of the technology and
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`Equipment, and whether such information is patentable or
`unpatentable and whether now existing or hereafter
`developed.
`
`"License" means the license granted by LKI to GTL
`pursuant to Section 2.1 hereof.
`
`"License Term" shall have the meanings defined in
`Section 3.2 and 3.3.
`
`"Licensed Technology" means all of the Know-How,
`Equipment and Patents.
`
`"LKI Stones" means gem stones owned by LKI or its
`Affiliates, or sold by LKI or its Affiliates in the ordinary
`cours~ of their business.
`
`"Manufacturer" means the third party which made,
`is then currently manufacturing, or is then able to
`manufacture, the Equipment for LKI.
`
`2 .1.
`
`"Marks" shall have the meaning defined in Section
`
`"Minimums" shall have the meaning defined in
`Section 5.3.
`
`"Performance Standards" shall have the meaning
`defined in Section 4.3.
`
`"Report Information" shall have the meaning
`defined in Section 2.1.
`
`"Start-Up Period" shall mean the Initial Start-Up
`Period when used in reference to the first unit of
`Equipment, and the Acceptance Period when used in reference
`to any other unit of Equipment, and in either case shall
`include any applicable Cure Period (as defined in Section
`4. 3) .
`
`11 Technology 11 means· all specialized knowledge,
`information, technical data, formulations, inventions
`(whether patented or unpatented), techniques, processes,
`manufacturing and trade secrets, methods, skills,
`accumulated experience, Know-How and other proprietary
`rights.
`
`"Warranty Term" shall have the meaning defined in
`Section 4.7.
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`"Weight Category" and "Weight Categories" shall
`have the meanings defined in Section 5.2
`
`2.
`
`License.
`
`2.1 Grant. Subject to the terms and
`conditions herein contained, LKI hereby grants to GTL an
`exclusive license during the term of this Agreement to use
`the Licensed Technology for laboratory use in the United
`States solely to inscribe upon stones (i) the names,
`trademarks, service marks, trade names, and/or logos of GTL
`and/or its Affiliates, including Gemological Institute of
`America, Inc., (collectively the "Marks"), (ii) the physical
`characteristics of such stones, (iii) the GTL report numbers
`relating to such stones {the "Report Information"), and {iv)
`such other characters as GTL or its customers may determine
`(the "License").
`In order for GTL to exploit the License,
`LKI will provide GTL with two (2) units of Equipment, as
`provided in Section 4.2. LKI shall, if then available from
`the Manufacturer at a commercially practical cost, deliver
`such additional units of Equipment to GTL as shall have been
`ordered by GTL from time to time. Additional units of
`Equipment shall be licensed to GTL on the terms and
`conditions of this Agreement, except (i) as otherwise
`provided in Section 2.5 and {ii) that prior to delivery of
`each such additional unit of Equipment, LKI and GTL shall
`negotiate in good faith, and execute and deliver a
`memorandum supplementing and amending this Agreement with
`respect to the Minimums applicable to each additional unit
`of Equipment.
`If any units of Equipment are ordered by GTL
`after the third anniversary of the commencement of the
`Initial License Term, each such unit of Equipment shall be
`licensed to GTL as provided in the preceding sentence,
`except the royalties payable only with respect to that unit
`of Equipment shall be increased from the royalties set forth
`in Section 5.2 by the amount, if any, required by LKI to
`recoup any increase in its cost to purchase that unit of
`Equipment over the cost incurred to purchase the first two
`units of Equipment (which included a nine (9%) percent
`increase implemented in January 1996 as referred to in
`Section 2.6) over its License Term, based on the average
`number of Inscriptions per unit of Equipment in operation
`during the full twelve months of the immediately preceding
`calendar year.
`
`2.2 Reservation of Rights. LKI and its
`Affiliates shall have the right to use the Licensed
`Technology for any purposes, including, without limitation,
`inscribing stones with any type of Inscription, except that
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`under no circumstances may LKI or its Affiliates (i) in the
`Umted States or in any other TeYritor.;y_,
`(as defined in
`Section 2. 5) to which this License has been''e-xtended pro'.·~ r'le
`ir:t§_cription services in any laboratory or other facility
`operated by LKI or its Affiliates and engaged in the
`business of providing grading and/or identification other
`than with respect to LKI Stones, or (ii) as otherwise
`provided in Section 2.5, or {iii) inscribe the Marks or the
`Report Information, or (iv) directly or indirectly sell,
`license or otherwise grant the right to use any of the
`Licensed Technology, or any equipment which performs a
`function similar to the Equipment in the United ptates or in
`any other Territory, to which this License has been
`extended, except to customers which purchase LKI Stones from
`time to time, and then subject to the limitations herein
`provided. LKI may grant the right to use the Equipment and
`other Licensed Technology to its and its Affiliates'
`customers, only in conjunction with the promotion of LKI
`Stones, for limited time periods not to exceed three (3)
`consecutive weeks at any one location, or two (2) months in
`any twelve (12) month period at any one location and only to
`inscribe LKI Stones and other stones brought to them by the
`general public for inscription, in connection with the
`customer's offer to inscribe stones as part of a promotion.
`LKI's customers may not directly or indirectly use the
`Licensed Technology to inscribe {i) their inventory of
`stones, except such stones as are LKI Stones, or (ii) stones
`provided by other retailers, distributors or manufacturers.
`Except as otherwise provided herein, all rights to the
`Licensed Technology are reserved to LKI. LKI shall state in
`its agreemerits with any other United States licensee or
`grantee of the Licensed Technology that LKI does not have
`the right to grant the right and, therefore, does not grant
`the right to use the Licensed Technology to inscribe the
`Marks or Report Information, and that the making of such
`Inscriptions would automatically result in a revocation of
`such license or grant.
`
`2.3 GTL's Marks. GTL is not hereby granting
`any of its rights to the Marks, or otherwise, to LKI and LKI
`hereby acknowledges that it has no rights to the Marks.
`
`2.4 Exploitation. GTL acknowledges that the
`manner in which GTL exploits the Licensed Technology may
`significantly affect its value to LKI. Accordingly, GTL
`agrees to use commercially practicable efforts to diligently
`(i) use and exploit the Know-how and Equipment and (ii)
`promote and market the inscribing of stones using the Know-
`how and Equipment. LKI shall disclose and supply to GTL all
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`information held by LKI, including .the Know-how, to enable
`GTL to use the Licensed Technology to inscribe stones.
`Neither party shall use thP. name of the other, or of any of
`its Affiliates, in any advertisements relating to any of the
`Licensed Technology without the consent of the other party.
`
`2.5 Restrictions and Foreign Rights. Except
`as is otherwise provided herein, during the term of this
`Agreement GTL will not anywhere in the world use or contract
`to use any micro-inscribing device, or any other device,
`method or technology that inscribes stones, except the
`subject to the provisions -5f' this
`Licensed Technology.
`Section, GTL may extend its rights pursuant to the terms and
`conditions of this Agreement (other than Section 4.8, and
`except that the training provided for in Section 4.2 will be
`in New York, New York) to any other country (a "Territory")
`by having additional units of Equipment delivered to it by
`LKI for installation and use in such Territory. LKI and GTL
`shall negotiate in good faith appropriate maintenance terms
`for each such Territory to which this license may be
`extended.
`If LKI receives a proposal from, or anticipates
`making a proposal to, a third party to purchase Equipment or
`license the Licensed Technology, or any part thereof, for
`laboratory use outside of the United States (an "Offer"), it
`shall give GTL prompt notice thereof, which notice shall (i)
`identify the Territory subject to the Offer, (ii) state
`whether the Offer is for a purchase or license and, if the
`former, the price of Equipment and other economic terms, or
`if the latter, the economic terms of the license, including
`the number of years of its term, and (iii) state whether the
`Offer is to acquire the exclusive rights for laboratory use
`in such Territory. GTL shall have the right to be exercised
`within twenty-one (21) days of receipt of such notice, by
`notice to LKI, to match such Offer {an "Election") .
`If GTL
`has no interest in entering the Territory, it will, as soon
`as practical, notify LKI that it waives the right of
`Election with respect thereto.
`If after LKI has given GTL
`notice of an Offer, there is a change in the Offer which is
`twenty (20~) percent or greater in (i) the price, or any
`promotional, advertising or marketing arrangements or
`rebates, if the Offer is to purchase Equipment, or (ii) any
`of the royalty rates, Minimums, license term, or any
`promotional, advertising or marketing arrangements or
`rebates, if the Offer is to license the Equipment, then and
`in such event, LKI shall give GTL a second notice specifying
`the changes in the terms of the Offer.
`In such event, GTL
`shall have the right to make an Election within the longer
`of the remainder of the twenty-one (21) days initially
`available to it to make an Election (if such period has not
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`otherwise expired), or four (4) calendar days from its
`receipt of such notice. The foregoing procedure shall be
`repeated if there are subsequent changes which are twenty
`(20%} percent or greater in the terms of the Offer, which
`would require the giving by LKI of a notice to GTL. GTL
`shall be obliged to purchase and/or license the Equipment,
`as is applicable, from LKI within one-hundred five (105)
`days of its making an Election, and LKI shall be obligated
`to sell or license the Licensed Technology to GTL in
`If
`accordance with the terms and conditions of the Offer.
`GTL makes an Election, its rights with respect to laboratory
`use in the Territory will be exclusive. LKI shall not offer
`to sell or license Equipment for laboratory use in Belgium
`until December 1, 1996. During such period, GTL shall have
`the exclusive right, on notice to LKI, to elect to license
`the Technology in Belgium on the terms of this Agreement,
`except the terms of \sections 4.2, 4.3, 4.4 and 4.8 shall be
`negotiated in good fkith between LKI and GTL. After the
`said period, LKI may sell or license Equipment in Belg{um
`for laboratory use on an exclusive or non-exclusive basis,
`subject to GTL's right to make an Election with respect to
`each Offer. Subject to GTL's right to make an Election with
`respect to each Offer, any sale of, or license or other
`grant of rights for the Licensed Technology to a third party
`for laboratory use in Japan may be on an exclusive or non(cid:173)
`exclusive basis. Except as otherwise provided herein with
`respect to Belgium and Japan, any sale of, or license or
`other grant of rights for the Licensed Technology for
`laboratory use within three (3) years of the date of this
`Agreement shall be on a non-exclusive basis.
`In the event
`that LKI grants the exclusive rights for laboratory use in
`any Territory to a third party, GTL shall be free to use any
`othe_r. micro-inscribing device, method or technology that
`inscribes stones in such Territory, provided same does not
`infringe the Patents in such Territory. LKI will discuss
`with GTL any non-laboratory use of the Licensed Technology
`in any foreign country before it is implemented.
`
`2.6. Credit for Increased Purchase Price.
`Upon the expiration of the Start-Up Period, for each unit of
`Equipment accepted by GTL, GTL will issue a credit to LKI in
`the sum of $20,000 to be applied against GTL's bills to LKI
`for future grading, .identification or other services
`provided by it to LKI. The credits to be provided by GTL to
`LKI, as herein provided, are intended to compensate LKI for
`the nine {9%) percent increase in its costs which it has
`incurred with respect to the design and manufacture of the
`Equipment. Accordingly, if the price of the Equipment
`purchased by LKI shall be reduced by the Manufacturer from
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`the cost as of the date of this Agreement including the
`increase referred to herein, the credit herein provided for
`shall be reduced on a dollar for dollar basis, but not below
`zero.
`
`3. Terms.
`
`3.1 Term of Aoreement. The Term of this
`Agreement shall begin on the date hereof, and shall expire
`on the last day of the last License Term to expire, unless
`sooner terminated as provided in this Agreement.
`
`3.2 Initial Term. Except as is otherwise
`provided in Section.3.3 with respect to units of Equipment
`ordered more than three (3) years from the date of this
`Agreement, unless GTL terminates this Agreement as provided
`in Sections 4.2 or 4.3, the term of the license will
`commence, as provided for in Section 4.3, upon a
`determination by GTL that the first unit of Equipment meets
`the Performance Standards, and unless sooner terminated or
`extended in accordance with the provisions of this
`Agreement, continue for ten (10) years (the "Initial License
`Term" or "License Term"). Notwithstanding that the Initial
`License Term has not commenced, GTL shall have a temporary
`license for the Licensed Technology during the Initial
`Start-Up Period, on all of the terms and conditions of this
`Agreement, except as provided in Sections 4.8, 5.2, 5.3 and
`5. 4.
`
`3.3 License Term for Certain Additional
`0nits. Notwithstanding anything in Section 3.2 of this
`Agreement to the contrary, the term of the License with
`respect to any unit of Equipment ordered by GTL from LKI
`after three (3) years from the date of this Agreement will
`commence as of the end of the later of the end of the
`Acceptance Period or the end of the Cure Period, as provided
`for in Section 4.3, for such unit of Equipment, and unless
`sooner terminated or extended in accordance with the
`provisions of this Agreement, continue for ten (10) years (a
`"License Term") .
`
`3.4 Extension of License Terms. Subject to
`the other provisions of this Agreement, the Initial License
`Term, and any other License Term as provided for in Section
`3.3 shall be extended for the full term of every patent
`which is subsequently issued to, or otherwise acquired by
`LKI or any Affiliate of LKI, for the Equipment or the Know(cid:173)
`How, or any part or aspect thereof or which would be
`infringed by the use of the Licensed Technology.
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`39584\193139.15
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`IPR2015-00024
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`4.
`
`Equipment.
`
`4.1 Title. Title to the Equipment will
`remain in LKI, and the Equipment by label, or otherwise,
`will be identified as the property of LKI in the possession
`of GTL for its use under license from LKI, unless such
`Equipment shall be purchased upon an Election by GTL as
`provided in Section 2.5. The Equipment shall be insured, as
`provided in Section 11.1.
`
`Installation. LKI shall deliver one (1)
`4.2
`unit of Equipment to GTL's premises in the Borough of
`Manhattan, City and State of New York, and one (1) unit of
`Equipment to GTL's premises in the State of California. LKI
`shall use reasonable efforts to deliver and install the
`first unit of Equipment in New York within four (4) months
`after execution of this Agreement. GTL may terminate this
`Agreement if within six {6) months after the date of this
`Agreement one unit of Equipment is not installed in GTL's
`premises in New York, and LKI has not given GTL the
`statement provided for in Section 4.3 that such unit of
`Equipment is operating in accordance with the Performance
`Standards. LKI shall have a like right of termination if
`one year after the date of this Agreement the Equipment is
`not so installed and operating in accordance with the
`Performance Standards. The second unit of Equipment will be
`delivered and installed in California within sixty (60) days
`after the commencement of the Initial License Term, or at
`such earlier date as may be mutually agreed. The expenses
`of delivery and installation of each unit of Equipment
`(including, without limitation, crating, loading and
`·unloading, freight, transportation, insurance, and travel,
`hotel, meals and transportation expenses of the employees
`and agents of LKI and the Manufacturer) shall be borne by
`LKI. GTL shall bear the labor costs and expenses of its
`employees and representatives. GTL shall provide LKI with
`access to the Equipment for the purposes of its installation
`and testing, and shall cooperate with LKI to the extent
`reasonably requested.
`
`Initial Start-Up and Acceptance Periods.
`4.3
`The Initial Start-Up Period shall begin upon delivery and
`installation of the first unit of Equipment to the New York
`location and receipt of the statement from LKI provided for
`in the next sentence, and continue for a period ending on
`the earlier of ninety (90) days thereafter, or notice to LKI
`from GTL that the Equipment meets the Performance Standards
`(as hereinafter defined) (the 11 Initial Start-Up Period") .
`Upon completion by LKI of the installation of each unit of
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`Equipment, LKI shall state in a writing signed by an officer
`of LKI and delivered to GTL that, to its best knowledge,
`such unit of Equipment is functioning in accordance with the
`performance standards set forth irt Schedule 4.3 (the
`"Performance Standards 11
`) . The .L.1itial License Term will
`commence at the end of the Initial Start-Up Period, unless
`GTL has given LKI notice signed by an officer of GTL, at
`least three (3) business days before the end of.such period
`that the Equipment, based on GTL's tests, does not meet the
`Performance Standards (a "Notice of Defect").
`If a Notice
`of Defect has been given the Initial License Term will not
`commence until GTL shall have given LKI notice that the
`first unit of Equipment meets the Performance Standards or
`unless it is deemed to have met the Performance Standards as
`provided below. Upon the giving of a Notice of Defect, LKI
`shall promptly use commercially reasonable efforts to cure
`the claimed defects during a period which is the greater of
`the remainder of the Initial Start-Up Period or thirty (30)
`days, unless GTL and LKI shall mutually agree to further
`extend the Initial Start-Up Period so that LKI can cure the
`claimed defects in the performance of the Equipment (the
`"Cure Period"). LKI shall give notice to GTL when such
`defects have been cured, and GTL shall have thirty (30) days
`from receipt of such notice to retest the unit and to
`determine whether the Equipment meets the Performance
`Standards. The Equipment shall be deemed to meet the
`Performance Standards at the end of the Cure Period, if LKI
`has given the notice provided for in the preceding sentence,
`unless GTL shall have given LKI a further Notice of Defect.
`If a second Notice of Defect is given, LKI shall have a
`second Cure Period to cure any claimed defects.
`If the
`Equipment does not then meet the Performance Standards, this
`Agreement shall thereupon be deemed terminated, and LKI
`shall remove the Equipment. The Start Up Period shall in
`every case include all applicable Cure Periods. Upon the
`delivery and installation of each additional unit of
`Equipment and receipt by GTL of the statement provided for
`in the second sentence of this Section 4.3, GTL shall have a
`period of thirty (30) days (the "Acceptance Period") in
`which to test the unit and determine if it meets the
`Performance Standards. GTL shall give LKI a Notice of
`Defect, or notice that it accepts the unit on or before the
`expiration of the said thirty (30) day period.
`If GTL shall
`have given LKI a notice of Defect with respect to an
`additional unit of Equipment, the Acceptance Period shall
`terminate on the date that LKI receives notice of acceptance
`from GTL.
`If GTL gives a Notice of Defect with respect to
`any additional unit of Equipment, the procedure affording
`LKI two (2) Cure Periods, as above provided, shall be
`followed with respect to such unit of Equipment, except that
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`39584\193139.15
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`IPR2015-00024
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`Lazare Kaplan International, Inc. Exhibit 2022 Page 14
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`if it ultimately does not meet the Performance Standards, it
`shall be removed by LKI.
`
`In order for GTL to operate
`4.4 Traininq.
`~~d maintain the Equipment, LKI agrees that it or its agents
`will train one to three persons as designated by GTL ("GTL
`Trainees") for each unit of Equipment delivered hereunder.
`Training of all GTL Trainees for the same unit of Equipment
`shall be at the same time, commence promptly after
`installation of the unit of Equipment, and take place where
`the Equipment is located. LKI or its agents will, from time
`to time, at the request of GTL and at reasonable cost to GTL
`and within a reasonable period of time after such request,
`train additional GTL Trainees.
`
`4.5 Manuals. GTL, its employees and age