KENTEK INFORMATION SYSTEMS INC \DE\
10-K/A, 1997-12-17
COMPUTER PERIPHERAL EQUIPMENT, NEC
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<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                  FORM 10-K/A

                                Amendment No. 1

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934

                    For the fiscal year ended June 30, 1997

                                       or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

          For the transition period from _____________to_____________

Commission file number:

                        KENTEK INFORMATION SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                              <C>                           <C>       
          DELAWARE                          3577                     22-2406249
(State or other jurisdiction of  (Primary Standard Industrial  (I.R.S. Employer
incorporation or organization)    Classification Code Number)  Identification Number)
</TABLE>

                    2945 Wilderness Place, Boulder, CO 80301
              (Address of principal executive offices) (Zip code)

       Registrant's telephone number, including area code: (303) 440-5500

Securities registered under Section 12(b) of the Act:  NONE
Securities registered under Section 12(g) of the Act: COMMON STOCK, $.01 PAR
VALUE

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. 
(1) Yes [X] No[ ]
(2) Yes [X] No[ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K [ ].

         On August 29, 1997, the bid and ask prices of the Common Stock were
$9.50 and $9.88, respectively. The aggregate market value of the voting stock
of the Issuer held by non-affiliates based on the average bid and ask prices on
August 29, 1997 was $48,888,550.


     On August 29, 1997, 6,985,351 shares of the Registrant's Common Stock
                               were outstanding.


<PAGE>   2
                               TABLE OF CONTENTS

ITEM                                                             PAGE NO
- ----                                                             -------
Item 14.  Exhibits, Financial Statement Schedules and 
          Reports on Form 8-K........................................2

SIGNATURE.  .........................................................3


PART IV.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      The following documents are filed as part of this Annual Report on
         Form 10-K.

                   1. Financial Statements: The financial statements of the
                   Company are included in Item 8 of this report. See Index to
                   Financial Statements (F-1) on Page 12.

                   2. Financial Statement Schedules: Financial statement
                   schedules required under the related instructions are
                   applicable for the period ended June 30, 1997, 1996 and
                   1995, and are therefore included in Item 8.

                   3. Exhibits: The exhibits which are filed with this Report
                   or which are incorporated herein by reference are set forth
                   in the Exhibit Index below.

(b)      Reports on Form 8-K.

                   1. On May 16, 1997, the Company filed a report on Form 8-K
                   in which it reported the dismissal of BDO Seidman LLP as its
                   principal accountant effective as of that date.

                   2. On May 27, 1997, the Company filed an amended report on
                   Form 8-K/A to include the response letter of BDO Seidman
                   LLP.

                   3. On June 3, 1997, the Company filed a report on Form 8-K
                   in which it reported the engagement of Deloitte & Touche LLP
                   as independent auditors for fiscal year ended June 30, 1997.

                                    EXHIBITS

EXHIBIT NUMBER       DESCRIPTION OF DOCUMENT
- --------------       -----------------------

3(i).1+           -- Amended and Restated Certificate of Incorporation of the
                     Registrant.

3(ii).1+          -- Bylaws of the Registrant.

4.1+              -- Reference is made to Exhibits 3(i).1 and 3(ii).1.

4.2+              -- Specimen Stock Certificate.

10.1+             -- Form of Indemnity Agreement entered into between the
                     Registrant and its directors and executive officers.

10.2+             -- Common Stock Registration Rights Agreement, dated as of
                     October 5, 1984, as amended.

10.3+             -- Series A Convertible Preferred Stock Purchase Agreement,
                     dated as of October 5, 1984, as amended.

10.4+             -- Amended and Restated 1992 Stock Option Plan of the
                     Registrant (the "Option Plan").

10.5+             -- Form of Option granted to persons other than non-employee
                     directors under the Option Plan.

10.6+             -- Form of Option granted to non-employee directors under the
                     Option Plan.

10.7+             -- Employment Agreement between the Registrant and Philip W.
                     Shires, dated April 1, 1989.

10.8+             -- Lease Agreement between the Registrant and Security
                     Connecticut Life Insurance Company, dated September 20,
                     1990, as amended.

10.9+             -- Lease Agreement between the Registrant and Pine Property
                     Limited Partnership, dated July 15, 1992, as amended.

10.10+            -- Lease Agreement between the Registrant and BFN Company,
                     dated September 28, 1994.

10.11+            -- Agreement on Bank Transactions and translation between
                     Nippon Kentek Kaisha, Ltd. and The Dai-Ichi Kangyo Bank,
                     Limited, dated as of July 2, 1984.

10.12+            -- Agreement on Purchase or Negotiation of Bills and
                     translation between Nippon Kentek Kaisha, Limited and The
                     Dai-Ichi Kangyo Bank, Limited, dated as of July 2, 1984.

10.12(a)+         -- Security Agreement between the Registrant and the Dai-Ichi
                     Kangyo Bank, Limited, dated as of July 2, 1992, as amended.

10.12(b)+         -- Guaranty between the Registrant and The Dai-Ichi Kangyo
                     Bank, Limited, dated as of July 2, 1992.

10.13+            -- Credit and Security Agreement between the Registrant and
                     Colorado National Bank, dated as of November 2, 1994, as
                     amended.

10.15+            -- Sales/Purchase Contract between Nippon Kentek Kaisha
                     Limited and Kao Corporation, dated October 1, 1991.

10.16+            -- Letter Agreement between the Registrant and Lexmark
                     International, Inc., dated May 10, 1993.

10.17+            -- Addendum Agreement between the Registrant and Lexmark
                     International, Inc., dated November 17, 1994.

10.18+            -- Agreement between the Company and Hewlett-Packard Company,
                     dated March 22, 1994.

10.19+            -- Purchase Agreement between the Company and Siemens Nixdorf
                     Printing Systems, L.P., dated February 3, 1992, as amended.

10.20++           -- Purchase Agreement between the Company and Tally Printer 
                     Corporation, dated April 20, 1996 and Amendment No. 1 to
                     the Purchase Agreement, dated April 16, 1997.

10.21+++          -- Lease Agreement between the Registrant and Avalon
                     Investment Company, dated March 18, 1997, and Assignment
                     and Consent Agreement, dated March 31, 1997.

13.1*             -- Report on Form 10-Q for the period ending March 31, 1997.

13.2**            -- Report on Form 10-Q for the period ending December 31,
                     1996.

13.3***           -- Report on Form 10-Q for the period ending September 30,
                     1996.

21.1+             -- List of subsidiaries of the Registrant.

27+++             -- Financial Data Schedules.

+        Previously filed with the Commission as an exhibit to the Registrant's
         Registration Statement on Form S-1 (File No. 333-1606) and
         incorporated herein by reference.

++       Certain confidential information contained in this document has been
         filed with the Securities and Exchange Commission pursuant to 
         Rule 2.4(b)(2) of the Securities Exchange Act of 1934, as amended.

+++      Previously filed with the Commission as an exhibit to the Registrant's
         Form 10-K originally filed with the Commission on September 26, 1997.

*        Previously filed with the Commission on May 15, 1997.

**       Previously filed with the Commission on February 13, 1997.

***      Previously filed with the Commission on November 13, 1996.



                                       2
<PAGE>   3

                                  SIGNATURE

         Pursuant to the requirements of Section 13 or 15(d) 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.

                                  KENTEK INFORMATION SYSTEMS, INC.

                                  By       /s/  PHILIP W. SHIRES
                                           Philip W. Shires
                                           President and Chief Executive Officer
                                           December 17, 1997




                                       3
<PAGE>   4
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NUMBER       DESCRIPTION OF DOCUMENT
- --------------       -----------------------
<S>                  <C>
3(i).1+           -- Amended and Restated Certificate of Incorporation of the
                     Registrant.

3(ii).1+          -- Bylaws of the Registrant.

4.1+              -- Reference is made to Exhibits 3(i).1 and 3(ii).1.

4.2+              -- Specimen Stock Certificate.

10.1+             -- Form of Indemnity Agreement entered into between the
                     Registrant and its directors and executive officers.

10.2+             -- Common Stock Registration Rights Agreement, dated as of
                     October 5, 1984, as amended.

10.3+             -- Series A Convertible Preferred Stock Purchase Agreement,
                     dated as of October 5, 1984, as amended.

10.4+             -- Amended and Restated 1992 Stock Option Plan of the
                     Registrant (the "Option Plan").

10.5+             -- Form of Option granted to persons other than non-employee
                     directors under the Option Plan.

10.6+             -- Form of Option granted to non-employee directors under the
                     Option Plan.

10.7+             -- Employment Agreement between the Registrant and Philip W.
                     Shires, dated April 1, 1989.

10.8+             -- Lease Agreement between the Registrant and Security
                     Connecticut Life Insurance Company, dated September 20,
                     1990, as amended.

10.9+             -- Lease Agreement between the Registrant and Pine Property
                     Limited Partnership, dated July 15, 1992, as amended.

10.10+            -- Lease Agreement between the Registrant and BFN Company,
                     dated September 28, 1994.

10.11+            -- Agreement on Bank Transactions and translation between
                     Nippon Kentek Kaisha, Ltd. and The Dai-Ichi Kangyo Bank,
                     Limited, dated as of July 2, 1984.

10.12+            -- Agreement on Purchase or Negotiation of Bills and
                     translation between Nippon Kentek Kaisha, Limited and The
                     Dai-Ichi Kangyo Bank, Limited, dated as of July 2, 1984.

10.12(a)+         -- Security Agreement between the Registrant and the Dai-Ichi
                     Kangyo Bank, Limited, dated as of July 2, 1992, as amended.

10.12(b)+         -- Guaranty between the Registrant and The Dai-Ichi Kangyo
                     Bank, Limited, dated as of July 2, 1992.

10.13+            -- Credit and Security Agreement between the Registrant and
                     Colorado National Bank, dated as of November 2, 1994, as
                     amended.

10.15+            -- Sales/Purchase Contract between Nippon Kentek Kaisha
                     Limited and Kao Corporation, dated October 1, 1991.

10.16+            -- Letter Agreement between the Registrant and Lexmark
                     International, Inc., dated May 10, 1993.

10.17+            -- Addendum Agreement between the Registrant and Lexmark
                     International, Inc., dated November 17, 1994.

10.18+            -- Agreement between the Company and Hewlett-Packard Company,
                     dated March 22, 1994.

10.19+            -- Purchase Agreement between the Company and Siemens Nixdorf
                     Printing Systems, L.P., dated February 3, 1992, as amended.

10.20++           -- Purchase Agreement between the Company and Tally Printer 
                     Corporation, dated April 20, 1996 and Amendment No. 1 to
                     the Purchase Agreement, dated April 16, 1997.

10.21+++          -- Lease Agreement between the Registrant and Avalon
                     Investment Company, dated March 18, 1997, and Assignment
                     and Consent Agreement, dated March 31, 1997.

13.1*             -- Report on Form 10-Q for the period ending March 31, 1997.

13.2**            -- Report on Form 10-Q for the period ending December 31,
                     1996.

13.3***           -- Report on Form 10-Q for the period ending September 30,
                     1996.

21.1+             -- List of subsidiaries of the Registrant.

27+++             -- Financial Data Schedules.
</TABLE>

+        Previously filed with the Commission as an exhibit to the Registrant's
         Registration Statement on Form S-1 (File No. 333-1606) and
         incorporated herein by reference.

++       Certain confidential information contained in this document has been
         filed with the Securities and Exchange Commission pursuant to 
         Rule 2.4(b)(2) of the Securities Exchange Act of 1934, as amended.

+++      Previously filed with the Commission as an exhibit to the Registrant's
         Registration Statement on Form 10-K originally filed with the
         Commission on September 26, 1997 and incorporated by reference thereto.

*        Previously filed with the Commission on May 15, 1997.

**       Previously filed with the Commission on February 13, 1997.

***      Previously filed with the Commission on November 13, 1996.

<PAGE>   1
                                    EXHIBIT 10.20
                                    CERTAIN CONFIDENTIAL INFORMATION CONTAINED
                                    IN THE DOCUMENT, MARKED BY BRACKETS IS
                                    FILED WITH THE SECURITIES AND EXCHANGE
                                    COMMISSION PURSUANT TO RULE 2.4b-2 OF THE
                                    SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.




                               PURCHASE AGREEMENT

                                 By and Between

                          MANNESMANN TALLY CORPORATION

                                      And

                        KENTEK INFORMATION SYSTEMS, INC.

                      For The Purchase of Kentek Printers
                               Parts and Supplies

                                  REVISION #3

                              DATE: APRIL 20, 1996
<PAGE>   2
                              PURCHASE AGREEMENT

1        Terms and Conditions

         1.1     Definitions
         1.2     Construction

2.       Scope

3.       Sale and Purchase; Term; Territory

         3.1     Sale and Purchase of Product
         3.2     Term of Agreement
         3.3     Territory

4.       Purchase Orders

         4.1     Initial Spare Parts Order
         4.2     Forecasts
         4.3     Lead Time
         4.4     Purchase Orders
         4.5     Cancellation
         4.6     Rescheduling
         4.7     Agreement Prevails over Purchase Orders

5.       Delivery; Licenses; Carriers

         5.1     Delivery
         5.2     Conditions to Deliveries
         5.3     Import and Export Licenses
         5.4     Carrier Selection

6.       Acceptance

         6.1     Products Not Rejected Deemed Accepted
         6.2     Buyer's Rights Upon Receipt of a Non-Conforming Delivery
         6.3     Right to Cure
         6.4     Burden of Showing Products Non-Conforming; Payment Not Waiver
         6.5     Quality Assurance

7.       Payment

8.       Prices; Modification of Prices

9.       Taxes and Duties

10.      Product Approvals; Certifications

<PAGE>   3
11.      Product Changes

         11.1    Engineering Changes
         11.2    Mandatory Changes
         11.3    Enhancements

12.      Patent, Copyrights and Trade Secrets Indemnity

13.      Parts and Repairs

         13.1    Parts Support Program
         13.2    Out of Warranty Exchange
         13.3    End-of-Product Life Parts Support

14.      Buyer Responsibilities

15.      Publications; Documentation

         15.1    Publications
         15.2    License to Publications; Documentation

16.      License of Software Products

         16.1    Grant
         16.2    Proprietary Rights
         16.3    Sublicenses
         16.4    Reverse Engineering
         16.5    General Copying Restrictions
         16.6    Termination of Buyer License
         16.7    Warranty Disclaimer

17.      Training

18.      Product Warranties; Limitation of Liability; Disclaimer

         18.1    Product Warranties
         18.2    Warranties Do Not Apply To Buyer Components, Modifications,
                 Etc.
         18.3    Disclaimer; Limitation of Liability
         18.4    Product Liability; Insurance

19.      Product Reliability

20.      Delays and Inability to Perform

21.      Confidentiality

         21.1    Confidential Information
         21.2    Non-Disclosure of Confidential Information
         21.3    Permitted Disclosure
<PAGE>   4
         21.4    Loss of Confidentiality
         21.5    Right to Equitable Relief
         21.6    Survival

22.      Public Announcements

23.      Notices

24.      Termination and Expiration of Agreement

         24.1    Insolvency, Bankruptcy, Etc.
         24.2    Breach of this Agreement, Etc.
         24.3    Rights of the Parties in the Event of Termination

25.      Point of Sale Reporting

26.      Nameplates and Trademarks

         26.1    Buyer's Trademarks
         26.2    Kentek Proprietary Rights Legend and Trademarks

27.      Compliance with Laws

28.      Document Precedence

29.      Authority

30.      Limitation of Liability and Actions

31.      Severability

32.      Miscellaneous


Schedules:

A -     Printer Prices
B -     Consumables Prices
C -     Spare Parts Prices
D -     Printer Specifications
E -     DELETED
F -     Currency Fluctuations
G -     Publications; Documentation
H -     Software Products
I -     Customer Service Support Program

<PAGE>   5
                               PURCHASE AGREEMENT

                 This Agreement is made and entered into as of the      day of
               by and between Kentek Information Systems, Inc., a Delaware 
corporation with its principal offices at 2945 Wilderness Place, Boulder,
Colorado 80301 ("Kentek") and Mannesmann Tally Corporation, with its principal
offices at 8301 South 180th Street, P.0. Box 97018, Kent, Washington 98064-9718
("Buyer").

                 A.       Kentek is engaged in the design, development,
manufacture and marketing of electronic printers and related products; and

                 B.       Buyer desires to purchase from Kentek certain of such
products for resale in the regular course of its business, on the terms and
conditions set forth herein.

1.       Terms and Conditions.

1.1      Definitions. As used in this Agreement, the following terms shall have
         the following respective meanings unless the context otherwise
         requires:

                 "Acceptance Period" shall mean the period from the date of
receipt at Buyer's facility of Products and thirty (30) days thereafter.

                 "Affiliate" shall mean any person controlling, controlled by
or under common control, directly or indirectly with that person, but only so
long as such control exists. For purposes hereof, the term "control" and
references of same shall mean the possession, directly or indirectly, of the
power to direct, or cause the direction of, the management and policies of
another person, whether through ownership of voting securities, by contract or
otherwise.

                 "Best Efforts" shall have the meaning set forth in Section
4.4.

                 "Cancellation Charges" shall have the meaning set forth in
Section 4.5.

                 "Customer" shall include any person, including without
limitation any Affiliate of Buyer, that buys or leases Products sold hereunder
from Buyer or any authorized distributor or dealer of Buyer.

                 "Engineering Change" shall have the meaning set forth in
Section 11.1.

                 "Ex Works" shall have the meaning attributed to it by
INCOTERMS (1990) issued by the International Chamber of Commerce.

                 "Information" shall mean that information contained in any
form including, without limitation, drawings, sketches, blueprints, parts,
lists, schedules, manuals, documentation, written descriptions of all kinds,
models, samples, reports, data, tapes, oral discussion or briefings by Kentek
or Buyer personnel or the like relating to any Products or Buyer's or Kentek's
products and the manufacture and marketing thereof and Kentek's and Buyer's
financial and business arrangements including, without limitations, working
features, design, processes, logic specifications, data flow,

                                       5
<PAGE>   6
software and communications protocol requirements, know-how, technology,
sources of supply and arrangements therefor, test and market data, business
forecasts and planning.

                 "Normal Lead Time" shall mean ninety (90) days for printers
and accessories and thirty (30) days for consumables and spare parts from the
date of Kentek's receipt of a Purchase Order, OR SIXTY (60) DAYS FOR PRINTERS
AND ACCESSORIES IF FORECAST IN ACCORDANCE WITH SECTION 4.2.

                 "Parts" shall mean the consumables, listed on Schedules B 
and C, as each such Schedules may be amended from time to time by Kentek.

                 "Printers" shall mean the Kentek printers and accessories set
forth on Schedule A, as more fully described in Schedule D, as such Schedule
may be added to, modified or amended by Kentek from time to time, subject to
Section 2, Scope, Subsection B, but shall in no event include any printer, or
supplies, parts, accessories, software or firmware therefor which has been, or
will be, designed for, or which incorporates changes or enhancements already
provided or provided in the future exclusively for, a particular customer
(other than Buyer) or to any such customer's specifications and which Kentek is
prohibited by such customer from selling to its other customers.

                 "Products" shall mean Printers and Parts, collectively,
excluding the Software Products.

                 "Publications and Documentation" shall have the meaning set
forth in Section 15.1.

                 "Purchase Order(s)" shall mean a purchase order for Products
to be sold by Kentek to Buyer, and purchased by Buyer from Kentek, hereunder.

                 "Requested Delivery Date" shall mean the date of requested
delivery of a Product in a Purchase Order given to Kentek in accordance with
this Agreement.

                 "Software Product(s)" shall mean the encoded data or
instructions for use by or in connection with or incorporated into Printers or
Parts, including, without limitation, the encoded data and instructions
described in Schedule H hereto, as such Schedule may be added to, modified or
amended by Kentek from time to time at the sole discretion of Kentek upon 60
days' notice from Kentek to Buyer and including, without limitation, at the
option of Kentek, enhancements, updates, improvements, modifications,
revisions, adaptations and additions to such data and instructions, but
Software Products shall in no event include any software or firmware which has
been, or will be, designed for or which incorporates changes or enhancements
already provided or provided in the future exclusively for a particular
customer (other than to Buyer) or to any such customer's specifications and
which Kentek is prohibited by such customer from selling to its other
customers.

                 "Term" shall have the meaning set forth in Section 3.2.

                 "UCC" shall mean the Uniform Commercial Code of the State of
Colorado, as amended from time to time.

1.2      Construction.

                 (a) The terms "hereby", "hereof", "hereto, "herein",
"hereunder" and any similar terms as used in this Agreement refer to this
Agreement. All references herein to this Agreement, including such terms,
shall, except as expressly provided to the contrary, include the Schedules
referred to in the Table of Contents hereof and initialed by the parties
hereto.

                                       6
<PAGE>   7
                 (b) Words importing persons shall include firms, associations,
partnerships (including limited partnerships), joint ventures, trusts,
corporations, public and governmental bodies, agencies and instrumentalities
and other entities, as well as natural persons.

2.       Scope.

         A. Kentek hereby appoints and Buyer hereby accepts appointment as an
Original Equipment Manufacturer (OEM) Reseller of Kentek-manufactured equipment
(hereinafter referred to as the "Products*).

         B. Kentek agrees to sell and Buyer agrees to purchase for the purpose
of resale, the Products listed in the Schedules incorporated into this
Agreement as well as future, standard (noncustomized) product during the term
of this agreement. Kentek reserves the right to modify Schedule A by adding
and/or deleting Products offered therein, subject to three (3) months written
notice.

         C. Buyer will employ its own resources in performing marketing efforts
involving the Products and has, or will develop, the technical capability to be
familiar with the Products, and will maintain a sales organization sufficient
to solicit and actively promote the sale of the Products.

3.       Sale and Purchase; Term; Territory.

3.1.     Sale and Purchase of Product. Subject to the terms and conditions
contained herein, Kentek shall sell to Buyer, and Buyer shall purchase from
Kentek, Printers and Parts for use in or with Printers manufactured by Kentek,
as hereinafter provided.

3.2.     Term of Agreement. The term of this Agreement shall commence upon the
date hereof and shall continue for twenty-four (24) months from such date,
unless earlier terminated, or extended by written agreement of the parties (the
"Term").

3.3.     Territory. Buyer's rights to resell Printers and Parts, and sublicense
Software Products pursuant to this Agreement shall be non-exclusive and
worldwide.

4.       Purchase Orders.

4.1      Kentek will offer Buyer a 50% discount for the Initial Spare Part
Order scheduled to be ordered and delivered within the first six (6) months of
the term of this Agreement. If Kentek is unable to deliver any spare parts
order(s) placed for delivery within this first six months, the 50% discount
will remain applicable to those orders until delivered.

4.2      Forecasts. In order to accomplish 60-day lead time, a 6-month rolling
forecast of printers and accessories is required. The schedule for forecast and
ordering is per the following example


                                       7
<PAGE>   8
                 Example based on a June production schedule:

         December 20th:   Initial forecast for June production
         January 20th:    Revised forecast - no restriction
         February 20th:   Revised forecast - no restriction
         March 20th:      90-day forecast within +/- 50% of February
         April 20th:      Purchase order issued at +/- 10% of March forecast
                          order
         June 20th:       Production/shipment

4.3      Lead Time. Unless otherwise agreed in writing by Kentek, all Purchase
Orders shall specify a Requested Delivery Date within the Normal Lead Time. The
lead time between the date of the Order and Delivery of Product(s) will be
sixty (60) days, IF FORECASTED AND ORDERED BY THE 20TH DAY OF EACH MONTH.

4.4      Purchase Orders. All purchases of Products by Buyer shall be by
English language Purchase Orders referencing this Agreement sent to the
corporate Kentek office. Kentek shall use its Best Efforts to deliver Products
in accordance with Purchase Orders received by it; provided, however, that
Kentek shall not be obligated to deliver a quantity of any model Printer in any
month that is greater than 150% of the aggregate quantity of such model Printer
that was ordered to be delivered hereunder in the previous calendar month. In
the event Kentek discontinues any Product, Buyer has the right to place a final
Purchase Order within the sixty (60) day discontinuance notice period subject
to availability. Delivery must be no later then ninety (90) days after
expiration of the discontinuance notice unless extension is requested by
Kentek. No Purchase Order shall request delivery of any Products after the end
of the Term unless mutually agreed upon in writing by both parties. Kentek
shall have the right, without notice, to elect to fill purchase orders for
Products not conforming with the requirements set forth herein and, in such
case, such purchase orders shall be treated by all parties as Purchase Orders
pursuant to this Agreement.

4.5      Cancellation. Buyer may cancel delivery of any or all Printers and
Accessories on order and scheduled for shipment beyond sixty (60) days by
giving written notice to Kentek at least sixty (60) days prior to the Requested
Delivery Date. Products cancelled with less than sixty (60) days notice will
incur a charge of $150 for each Printer Product and $50 for EACH Accessory
Product.

Printers and/or Accessories cancelled within thirty (30) days prior to the
scheduled shipment date will incur a charge equal to 100% of the purchase price
for all canceled items.

Consumables and Spare Parts may not be cancelled within 15 days of the
Requested Delivery Date.

The parties agree that it would be impossible to determine the damages that
would be suffered by Kentek in the event of any such cancellation and that the
foregoing represents a reasonable preestimate of the damages that would result.

4.6      Rescheduling. By notice delivered to Kentek at least 30 days prior to
the originally scheduled shipment date, Buyer may reschedule a delivery of
Product requested by it to a later date within the Term, subject to the
following limitations (the date of the reschedule being deemed to be the date
notice of same is given to Kentek):

a.       no delivery for printers and/or accessories may be rescheduled to
later than 30 days after the original scheduled shipment date;

                                       8
<PAGE>   9

b.       there may be only one reschedule per delivery.

4.7      Agreement Prevails Over Purchase Orders, Etc. Buyer may use its form
of purchase order to effect orders hereunder; provided, however, that (i) all
such purchase orders must be in conformance with and refer to this Agreement
and (ii) any terms in such orders which conflict with, or supplement the terms
of this Agreement shall be deemed null and void, and this Agreement shall
govern.

5.       Delivery; Licenses; Carriers.

5.1      Delivery. For purposes hereof, the date of purchase and sale of
Products hereunder shall be the date of delivery thereof. Deliveries of
Products purchased hereunder shall be made as follows:

a.       Ex Works Kentek's designated production or distribution facility in
Japan for Products, except as set forth in (b) below;

b.       Ex Works Kentek's designated U.S. facility for certain special order
requirements of Products, as designated in Schedules A, B, and C.

                 Kentek will provide proof of delivery upon request and will
provide reasonable assistance to Buyer at no charge in any claim Buyer may make
against a carrier or insurer for misdelivery, loss or damage to Products after
delivery has been made to Buyer. All risk of loss or damage shall pass upon
delivery.

5.2      Conditions to Deliveries. Kentek shall not be required to deliver any
Products if Buyer (i) has not made any undisputed payments due to Kentek, (ii)
shall be otherwise in continuing material breach of any other material
obligation, or (iii) shall fail to provide adequate assurances of due payment
requested by Kentek in accordance with Section 2-609 of the UCC.

5.3      Import and Export Licenses. Buyer will be responsible for any
licenses, permits or approvals of the country of import. Buyer will also be
responsible for obtaining any and all such export licenses, permits or
approvals for exports to any other location. The parties shall give all
reasonably required assistance to each other in obtaining all the licenses,
permits and approvals mentioned above. Kentek may request that Buyer provide
delivery verification certificates for each drop ship delivery.

5.4      Carrier Selection. Upon execution of this Agreement, Buyer shall
notify Kentek of Buyer's designation of the carrier or agent to whom Products
delivered hereunder are to be delivered. If Buyer desires to change its
designation of such carrier or agent, Buyer shall, not less than 10 days prior
to the Requested Delivery Date for the delivery to be affected by the change,
notify Kentek of the new carrier or agent.

6.       Acceptance.

6.1      Products Not Rejected Deemed Accepted. If Buyer does not give Kentek
the notice set forth in Section 6.2 within the Acceptance Period, each delivery
of Products shall be deemed to have been accepted by Buyer, subject to its
remedies under Section 18.

6.2      Buyer's Rights Upon Receipt of a Non-Conforming Delivery. If any
delivery of Products or Products delivered by Kentek (i) are non-conforming
with this Agreement or (ii) are non-conforming with the Products requested in
the applicable Purchase Order, (except for deliveries that are non-conforming

                                       9
<PAGE>   10
reason of (x) under 60 days lateness, or (y) greater lateness if accepted by
Buyer's agent or carrier) Buyer shall have the right to accept such delivery in
whole or, by written notice to Kentek within the Acceptance Period giving full
particulars of the non-conformity, reject such portion of such delivery as is
non-conforming upon notice to Kentek.

6.3      Right to Cure. If Buyer rejects any non-conforming Products as
provided in Section 6.2, at its option, Kentek shall have the right to (i)
request the return of such Products, or (ii) to correct the nonconformity
within a reasonable period on a Best Efforts basis of not more than thirty (30)
days. If Kentek elects to cure the non-conformity but fails to do so within
such period, Buyer shall have the right to reject the portion of the delivery
that is still non-conforming in whole or part.

6.4      Burden of Indicating Products Non-Conforming; Payment Not Waiver.
Buyer shall have the burden of indicating how any delivery made or Products
delivered are non-conforming. Buyer's payment for any Products or agreement to
pay any other charges shall not by itself be deemed a waiver of Buyer's rights
hereunder.

7.       Payment. Kentek may issue invoices for Products sold no earlier than
the shipment of Products. Subject to Kentek's right to receive adequate
assurances pursuant to Section 2-609 of the UCC, payments for Products ordered
shall be made within 30 days of invoice. An interest charge equal to 1.5% per
month will be due on all undisputed invoices past due or the maximum amount
permitted by law - whichever is less.

8.       Prices; Modification of Prices. The prices applicable to Printers,
Accessories, Consumables and Spare Parts ordered hereunder shall be
established as set forth on Schedules A, B, and C except for increases or
decreases from time to time due to currency fluctuations in accordance with
Schedule F. The prices applicable to Parts ordered shall be as set forth on
Schedule C; provided, however, that Kentek shall have the right to change the
price of any and all Parts one time during any 12-month period. The prices set
forth in Schedule C are per part number and per shipment.

9.       Taxes and Duties. Prices are exclusive of certain taxes, duties,
brokerage or like charges imposed on Products after their delivery to Buyer and
will be paid by Buyer. In lieu of Buyer paying the above taxes and/or charges,
Buyer may furnish Kentek with a tax exemption certificate acceptable to the
taxing authority.

10.      Product Approvals; Certifications. Kentek warrants that all complete
Printers delivered to Buyer under this Agreement, without any Buyer Unique
Items, will comply with applicable U.L., CSA and VDE standards and will comply
with the applicable FCC rules for the type of product involved, including type
acceptance or certification where required.  Kentek will obtain and maintain at
its own expense all applicable listings, certifications and approvals with
respect to the above-noted standards in Kentek's name. Kentek will provide
information and assistance to Buyer with respect to (i) listings,
certifications and approvals that are required to be in Buyer's name and (ii)
compliance of the Printers with any such standards after modification or
additions made by Buyer or made by Kentek with Buyer Unique Items.

11.      Product Changes.

11.1     Engineering Changes. Kentek shall, subject to Buyer's right to be
advised, have the right to make engineering changes and to order and use in the
Product(s) parts and materials of Kentek's

                                       10
<PAGE>   11
choosing. Kentek shall notify Buyer in writing of any major changes. A "major
change" is defined, for purposes of this Article, as one which affects the
Product's form, fit and function. Non-incorporation of a change shall be at
Buyer's sole risk and responsibility. In such event, Kentek shall, at its sole
option, continue to make available and deliver, in accordance with this
Agreement, the unchanged equipment. If Kentek incurs additional costs as a
result of Buyer's non-acceptance of said change, a premium price to provide
unchanged Product shall be assessed. Change notices will be in Kentek's
standard form and such notices will be directed to the Buyer's Vice President
of Engineering & Manufacturing.

11.2     Mandatory Changes. In the event mandatory engineering and safety 
changes to the Product(s) are required, Kentek shall issue to Buyer a Mandatory
Field Change Order including all necessary documentation and implementation
instructions.

Kentek shall ship to Buyer, free of charge, freight prepaid, upgrade kits to
incorporate all mandatory changes and retrofit all Product(s) delivered to
Buyer's customers prior to the changes. Such upgrade kits may include hardware
and/or software. Buyer shall, at Buyer's expense, perform all labor to
implement the Mandatory Field Change Order, except in cases where a Mandatory
Field Change Order is required to make the Product(s) safe in compliance with
regulatory agency standards. Kentek shall reimburse Buyer for Buyer's travel
and labor cost for implementing such Mandatory Field Change Order in that
instance only. Kentek may, at its option, elect to execute such Mandatory
Changes at its own expense.

11.3     Enhancements. If, during the term of this Agreement, Kentek offers any
improvement, option, additional functionality or other enhancements to any
Product not available at the time this Agreement is signed (an "Enhancement"),
provided that such Enhancement is not exclusive to another customer, Kentek
will offer such Enhancement to Buyer at prices that do not exceed those charged
to any other customer of Kentek purchasing the same or lesser quantities of
such Enhancement on similar terms and conditions as those contained herein.

12.      Patent, Copyrights, Trademarks, and Trade Secrets Indemnity. Except as
provided below, Kentek, at its own expense, agrees to defend (without prejudice
to its sole option to settle) and hold Buyer harmless against any suit or
proceeding brought against Buyer alleging that any Product, or any Software
Product or any part thereof sold or licensed hereunder infringes any United
States patent, trademark, copyright or trade secret or other proprietary right
owned by others (an "Infringement Action"), provided Kentek is promptly
notified in writing, given all reasonable assistance it requires, (at Kentek's
expense) and permitted to direct the defense and/or settlement of such
Infringement Action.  Further, Kentek will pay in full any final non-appealable
judgment rendered in such Infringement Action by a court, or shall pay any
agreed upon settlement with respect to such Infringement Action, but shall not
be responsible for costs or settlements incurred without its consent. If
Buyer's use or sale of any such Product of Software Products is enjoined, or in
the event that Kentek desires to minimize its liabilities hereunder, Kentek
will, at its sole option and expense, (i) substitute other equally suitable
Product, or Software Product (ii) modify the Product or Software Product so
that it is no longer alleged to infringe, but delivers substantially equivalent
or better performance, (iii) obtain for Buyer the right to continue its use or
sale and (iv) if no other reasonably commercial option is available, grant to
Buyer credit for the Product or Software Product as depreciated and accept its
return. The depreciation shall be an equal amount per year over the lifetime of
the Product or Software Product for three years. The foregoing states the
entire liability of Kentek for Patent, copyright, trademark, trade secret or
other infringement. No indemnity shall apply to patent, copyright, trademark,
trade secret or other infringement liability to the extent directly arising
from any Product or Software Product made or modified to Buyer's specifications
or design, or with components or subassemblies supplied by Buyer, or a supplier
designated by Buyer, including (without limitation) copyright, patent
infringement or other claims related to images produced in accordance with
Buyer's specifications or based on Buyer's

                                       11
<PAGE>   12
modification of Product or Software Product or programming. The foregoing
indemnity shall not apply and Buyer agrees to indemnify Kentek in a manner
fully equivalent to the foregoing indemnity with respect to any claim made, or
any suit or proceeding brought against Kentek, in which and to the extent that
the alleged infringement arises from the combination of any Product or Software
Product with any equipment, subassemblies or components not supplied by Kentek
or its operation or use with apparatus, data or programs not furnished by
Kentek, except for the operating system of the host computer or if the alleged
infringement arises from any modification of any Product or Software Product or
from the printing of an image produced or modified, in accordance with the
specifications of Buyer or any Customer.

13.      Parts and Repairs.

13.1     Parts Support Program. The terms of Kentek's parts support program are
set forth in Schedule I hereto.

13.2     Out of Warranty Exchange. In addition to Kentek's obligations under
Section 18, Kentek shall offer the Out of Warranty Exchange Program set forth
in Schedule 1.

13.3     End-of-Life Parts Purchasing. Buyer may purchase spare parts from
Kentek to provide service to its customers.  In the event Buyer/Kentek
terminate this Agreement or any Product under this Agreement is discontinued by
Kentek, Kentek agrees to allow Buyer to purchase Parts and Consumables at the
then current prices for a period of up to five (5) years for the purpose of
supporting Buyer's installed base.

14.      Buyer Responsibilities.

         In addition to all other rights and obligations created by this
Agreement, Buyer shall:

         (a)     use its best efforts to sell the Products;

         (b)     maintain its own facilities suitable for demonstrating the
                 Printers; and

         (c)     maintain an inventory of Parts necessary to meet greater than
                 90% of (i) its expected needs for normal maintenance and (ii)
                 the orders of its Customers, in either case within 48 hours.

15.      Publications; Documentation.

15.1     Publications. Subject to Section 15.2, Kentek shall furnish (or
already has furnished) to Buyer two English language copies of each of the
publications or documentation relating to the Printers listed on Schedule G
(collectively, the "Publications").

15.2     License to Publications and Documentation. Kentek hereby grants to
Buyer, during the Term, a non-exclusive, non-transferable royalty-free license,
that may not be sublicensed, to use and prepare derivative works based upon the
Publications for the purpose of including all, or portions of the same in
documentation to be provided to Customers in connection with the sale, use,
leasing, installation, assembly, repair and maintenance of Printers sold
hereunder only.  Such license and rights shall include all additions,
modifications and improvements thereto which may, at Kentek's sole discretion,
be

                                       12
<PAGE>   13
effected from time to time. Buyer shall have the right to provide the
Publications or Documentation to its Customers for the purpose of resale.

16.      License of Software Products.

16.1     Grant. Kentek hereby grants to Buyer a non-exclusive,
non-transferable, royalty-free license to use, to sublicense to End Users to
use, and to sublicense to its authorized distributors to use and sublicense to
End Users, to use each of the Software Products in connection with Products.

16.2     Proprietary Rights. The Software Products contain proprietary or trade
secret information which is either owned or licensed by Kentek and/or Buyer.
The Software Products may also be subject to patent, copyright, and trademark
protection. Both parties agree not to remove any copyright, other proprietary
rights or related notices from any Software Products and agree to include all
such notices existing on any Software Product on any copies. Neither party has
ownership rights in any of the other party's Software Products. Some portions
of the techniques, algorithms or processes contained in the Software Products,
or any modification thereof, constitute trade secrets and other proprietary
information owned or licensed by Kentek and/or Buyer.

16.3     Sublicense. The Software Products may be sublicensed only to a party
who agrees to accept the terms and conditions of this Section 16. NEITHER PARTY
WILL DISCLOSE, TRANSFER, LEASE, COPY, SUBLEASE OR OTHERWISE MAKE AVAILABLE ANY
SOFTWARE PRODUCTS OR ANY PROPRIETARY INFORMATION DESCRIBED ABOVE TO ANY THIRD
PARTY, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT. Any attempt to
sublicense, or otherwise transfer any such information, any Software Products
or any rights, duties or obligations hereunder, except as expressly provided in
this Agreement, is void.

16.4     Reverse Engineering. Neither party may reverse engineer, decompile,
create derivative works based upon or modify any Software Products.

16.5     General Copying Restrictions. Neither party shall make copies of any
royalty-bearing Software Products, except one copy for backup purposes in
support of a single Printer. In the event of unauthorized copying of the
Software Products by Buyer or any transferee of Buyer, Kentek may seek such
remedies as the law provides, i.e.; public flogging and any other punishment
that it deems appropriate in the circumstances.

16.6     Termination of License. If any of the terms or conditions of this
Section 16 are broken by Buyer or Kentek, its successors or any sublicensees of
any Software Products, the license granted to any breaching party (but not the
obligations and limitation of rights of Buyer or Kentek, such successors and
sublicensees) will terminate. Upon any such termination, Buyer and any
successor or sublicensee breaking this software license agreement must cease
all use of the Software Products and must destroy all copies of the Software
Products and/or return them to Kentek or Buyer. Either party shall have the
right to cure any such default within thirty (30) days.

16.7     Warranty Disclaimer. The Software Products are distributed and
licensed "as is". ALL WARRANTIES, EITHER EXPRESSED OR IMPLIED, AS TO QUALITY,
PERFORMANCE, OR FITNESS FOR ANY PARTICULAR PURPOSE ARE DISCLAIMED AS TO
SOFTWARE PRODUCTS. IN NO EVENT WILL KENTEK OR ITS LICENSORS BE LIABLE FOR ANY
LOST PROFITS OR SAVINGS OR OTHER DIRECT, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES RESULTING FROM USE OF THE SOFTWARE PRODUCTS, EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

                                       13
<PAGE>   14
17.      Training. Kentek agrees to provide the training described in Schedule
J. Training classes may be video taped for future use by Buyer with respect to
the Products sold hereunder only.

18.      Product Warranties; Limitation of Liability; Disclaimer; Product
Liability, Etc.

18.1     Product Warranties. Kentek warrants that each Product sold under this
Agreement shall be free from defects in material and workmanship under normal
use and service, and that such Products will meet the specifications set forth
on Schedule D (as the same may be added to, modified, or amended from time to
time).

         Warranties shall apply for the time periods designated below:

         Model K30, K30D, K31, K31D and K40D engines and related models for two
         (2) years from date of shipment.

         Accessories and Spare Parts for one hundred eighty (180) days from
         date of shipment.

         Consumables for average rated yield.

         All warranties are on Products used within specified duty cycle and
         Product Specifications.

Normal use and service does not include any abuse, misuse, transportation
damage, alteration or depletion after delivery hereunder. If the defect can be
isolated to any particular Parts, the warranties set forth herein cover such
Parts only (whether installed in a Printer or not), and in no event shall
Kentek be liable for labor or installation of such Parts.  In the event of a
warranty claim under this Section 18, at Kentek's election, Buyer shall dispose
of or ship the defective Parts, or if the defect cannot be isolated to any
particular Parts, the defective Printer, in each case uninsured (at Kentek's
risk) but properly packaged, with freight collect, to such facility as Kentek
shall indicate to Buyer from time to time. At its option, Kentek shall repair
or replace the defective Parts or Printer, as the case may be, and shall ship
it, with freight and insurance collect, back to Buyer within 30 days of
Kentek's receipt of the same.  The procedure for claims under this Warranty is
set forth in Schedule J under "Defective Material Return Procedure and Product
Warranties."

18.2     Warranties Do Not Apply To Buyer Components, Modifications, Etc. The
warranties set forth in Section 18.1 do not extend to components or
subassemblies supplied by Buyer or suppliers designated by Buyer or to
modifications of any Product which have been made by or at the request of Buyer
or any Customer, or to units of Products which fail or are damaged after
delivery hereunder due to improper shipment, handling, storage, operation, use
or maintenance in a manner or environment or with parts, accessories, supplies
or consumables not conforming to published instructions or specifications of
Kentek at the time of delivery of such Product, or due to service or
maintenance by persons not qualified to perform the same. Use of any consumable
not specifically supplied by or approved in writing by Kentek shall constitute
a modification of Product and shall specifically void any and all warranties
for both printer and consumable supply products. Kentek shall have no liability
or responsibility with respect to any warranties provided by Buyer or any third
person.

18.3     Disclaimer; Limitation of Liability. THE WARRANTIES SET FORTH IN
SECTION 18.1 AND THE OBLIGATIONS AND LIABILITIES SET FORTH IN SECTION 18.1 AND
IN SECTIONS 10 AND 12 ARE IN LIEU OF ALL OTHER WARRANTIES RELATING TO ANY
PRODUCTS SOLD OR SOFTWARE PRODUCTS OR MANUALS, PUBLICATIONS, OR DOCUMENTATION
LICENSED BY KENTEK TO BUYER, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTY OF MERCHANTABILITY, FITNESS

                                       14
<PAGE>   15
FOR ANY PARTICULAR PURPOSE OR NON-INFRINGEMENT OF PROPRIETARY RIGHTS OF OTHERS.
ALL OTHER CONDITIONS, TERMS, WARRANTIES OR OTHER STATEMENTS CONCERNING
WARRANTIES OR THE LIKE WITH RESPECT TO PRODUCTS, SOFTWARE PRODUCTS AND MANUALS
AND DOCUMENTATION AND THEIR USE, AND ALL OTHER REMEDIES WITH RESPECT THERETO,
WHETHER EXPRESS OR IMPLIED BY STATUTE OR COMMON LAW OR OTHERWISE HOWSOEVER, ARE
HEREBY EXPRESSLY DISCLAIMED.

         Without limiting the foregoing, Buyer's exclusive remedy and Kentek's
entire obligation and liability in contract, tort or otherwise for any breach
of warranty of any Products, Software Products or Manuals and Documentation, or
the failure of any Products or Software Products to meet the specifications set
forth in Schedule D, is the repair or exchange of any defective Products
covered by the foregoing warranties in the manner and within the time frames
set forth.

18.4     Product Liability; Insurance Kentek agrees to indemnify (without
prejudice to its sole option to settle) and defend Buyer from and against all
liability demands, claims loss, cost damage and expense for property damage,
death and personal injury arising out of or relating to the Products sold to
Buyer and performance of this order; provided, however, Buyer shall be liable
to the extent of its own negligence. At Buyer's request, Kentek will furnish
certificates of insurance evidencing liability insurance which includes but is
not limited to worker's compensation, general liability, property damage
liability, and product liability. Kentek agrees to defend or settle, at its
sole expense, all suits or proceedings arising out of any suits or threats of
suit provided Buyer gives Kentek prompt written notice of all suits or threats
of suit and other such claims. Buyer may be afforded the opportunity to join
and fully participate in, at its own expense, the defense of such proceedings.

19.      Product Reliability. If any Product does not function at the mean time
between failure rate (MTBF) set forth in Schedule D, both parties agree to
review their respective failure rate data for such Product and to discuss what
course of action, if any, would be appropriate to remedy such failure.

20.      Delays and Inability to Perform. Except as otherwise provided in this
Agreement, neither Kentek nor Buyer shall in any event be liable for any delays
in performance caused by: an act of God; war; riot; fire; explosion; accident;
earthquake; flood; sabotage; inability to obtain or shortage of fuel, power,
supplies, components, subassemblies or material (for reasons other than such
party's negligence or fault or failure to timely order in accordance with
normal business practices); inability to obtain transportation; failures of
non-Affiliate subcontractors, governmental laws, regulations or orders. Agreed
upon delivery schedules and the term of this Agreement shall be considered
extended by a period of time equal to the time lost because of any delay
excusable under this Section 20, except that both parties shall use due
diligence to minimize such delays. If either party is subject to delays
excusable under this Section 20, it shall give prompt written notice thereof to
the other party including its best estimate of the expected duration of such
delay.

21.      Confidentiality.

21.1     Confidential Information. All disclosures of Information shall be
deemed to be nonconfidential unless specifically designated by the discloser at
the time of disclosure as confidential. All disclosures of Confidential
Information by one party hereto to the other pursuant to this Agreement shall
be made by or under the supervision of the respective Technical Coordinators of
Kentek and Buyer, as each such party may from time to time designate, or such
Technical Coordinators' respective designees. When such disclosure is orally
and/or visually made, then it shall be confirmed in a written resume within 20
days following such disclosure. The initial Technical Coordinators for the
Parties are:

                                       15
<PAGE>   16
                 For Kentek:       Vice President, Engineering

                 For Buyer:        Vice President, Engineering and Manufacturing

                 For purposes of this Section 21, all confidential Information
designated as such as provided above is hereinafter referred to as
"Confidential Information," the party hereto that discloses the Confidential
Information to the other party hereto as provided in this Section 21 is
hereinafter referred to as the "Discloser" and the party hereto that receives
such Confidential Information from the Discloser is hereinafter referred to as
the "Recipient." Each of the parties hereto agrees to mark all Confidential
Information which is in tangible form with appropriate secret or confidential
legend.

21.2     Non-Disclosure of Confidential Information. Subject to the provisions
of Sections 21.3 and 21.4, each of the parties hereto agrees to hold the
other's Confidential Information in confidence for the other and not to use any
such Confidential Information other than for the purposes of this Agreement.
Each agrees not to disclose the other's Confidential Information, by
publication or otherwise, to any person other than those persons whose services
it requires who have a need to know such Confidential Information for purposes
of carrying out the purpose of this Agreement and who agree in writing to be
bound by, and comply with, the provisions of this paragraph or are otherwise
under an obligation of confidentiality.

                 After termination or expiration of this Agreement, and upon
demand, Buyer and Kentek each agrees to return to the other all models and
written or descriptive matter, including but not limited to drawings,
blueprints, descriptions, and other papers, documents, tapes or any other media
which contain Confidential Information of the other party. In the event of a
loss of any item containing any Confidential Information, each party shall
promptly notify the other party of such fact in writing and assist in the
investigation thereof.

                 A Recipient shall protect disclosed Confidential Information
by using the same degree of care, but no less than a reasonable degree of care,
to prevent the unauthorized use, dissemination or publication of such
Confidential Information as the recipient uses to protect its own Confidential
Information of a like nature. Each party hereunder agrees to indemnify the
other for any loss resulting from a breach of its duty to maintain
confidentiality.

21.3     Permitted Disclosure. Disclosure of Confidential Information shall not
be precluded if such disclosure is:

         (i)     in response to a valid order of a court or other governmental
                 body of the United States or any political subdivision thereof
                 or any other relevant jurisdiction; provided however, that the
                 party from whom disclosure is sought shall, if permitted,
                 first have given notice to the other and made a reasonable
                 effort to obtain a protective order requiring that the
                 Information and/or documents so disclosed are used only for
                 the purpose for which the order was issued;

         (ii)    otherwise required by law, statute, ordinance, rule, 
                 regulation; or

         (iii)   necessary to establish rights under this Agreement during a
                 court proceeding or to its attorneys.

21.4     Loss of Confidentiality. Notwithstanding any other provisions of this
Agreement, the obligations specified in Section 21.2 will not apply to any
Confidential Information that:

                                       16
<PAGE>   17
         (i)     the Recipient can demonstrate is already in the possession of
                 the Recipient without an obligation of confidence;

         (ii)    is independently developed by the Recipient without resort to
                 the Discloser's Information;

         (iii)   is rightfully received by the Recipient from a third party;

         (iv)    is released for disclosure by the Discloser or with its
                 written consent;

         (v)     is or becomes a matter of general public knowledge or the
                 knowledge of a substantial part of the industry, through no
                 fault of the Recipient; or

         (vi)    is disclosed by the Discloser to a third party without a duty
                 of confidentiality on the third party.

21.5     Right to Equitable Relief. Kentek and Buyer each agrees that a breach
of its obligations under this Section 21 would cause irreparable harm to the
other, and that the other shall be entitled, in addition to all other remedies
available to it, equitable relief in a court of equity by injunction or
otherwise, without the necessity of proving actual damages for any breach by
the other party of this Section 21 or of any undertaking herein contained.

21.6     Survival. This Section 21 shall survive the Agreement for a period of
two(2) years after expiration or termination of Agreement.

22.      Public Announcements. Kentek and Buyer each agrees not to make any
public announcements regarding this Agreement without the prior written consent
of the other.

23.      Notices. Any notice or other communication required or permitted to be
given hereunder shall be given in writing and shall be deemed to have been duly
given and delivered (i) on the date delivered if delivered by hand or overnight
courier, (ii) the earlier of the date of actual receipt or seven (7) days after
being sent by certified or registered mail (or registered airmail or the
equivalent thereof when given to or from persons outside the United States), or
(iii) on the date sent by telegraph, cable or facsimile, in each case to
addresses set forth below or such other address as a party may designate by
notice to the other parties given in accordance with this Section:

a.       Routine administrative notices, including, without limitation,
invoices and shipping instructions,

         (i) if intended for Kentek, to:

                 Kentek Information Systems, Inc.
                 2945 Wilderness Place
                 Boulder, Colorado 80301
                 Attention: Sales Order Administrator
                 Fax No. (303) 440-9600

                                       17
<PAGE>   18
        (ii)     if intended for Buyer to:

                 Erika Linford
                 Mannesmann Tally Corporation
                 P.O. Box 97018
                 8301 South 180th Street
                 Kent, WA 98032
                 Fax No. (206) 251-5520

b.       Notices other than routine administrative notices, including, without
         limitation, notices setting forth substantive legal claims or
         purporting to waive or assert substantive legal rights or remedies or
         ascribing liability to a party in connection therewith, shall be
         addressed to the respective parties in accordance with 23. (a), above,
         with copies to:

                 in the case of Kentek:

                 Kentek Information Systems, Inc.
                 2945 Wilderness Place
                 Boulder, Colorado 80301
                 Attention: President and CEO
                 Tel No. (303) 440-5500
                 Fax No. (303) 440-9600

                 Cooley Godward
                 2595 Canyon Boulevard
                 Boulder, Colorado 80302-6737
                 Attention: James C. T. Linfield
                 Tel No. (303) 546-4000
                 Fax No. (303) 546-4099

                 if intended for Buyer and/or the Affiliate:

                 Mannesmann Tally Corporation
                 8301 South 180th Street
                 P.O. Box 97018
                 Kent, WA 98032
                 Attention: Vice President, Materiel Finance & Administration
                 Tel No. (206) 251-5500
                 Fax No. (206) 251-5520

24.      Termination and Expiration of Agreement.

24.1     Insolvency, Bankruptcy, Etc.. This Agreement shall, at the option of
each party hereto, terminate, subject to the provisions of Section 24.3 (i) if
any petition or proceeding, voluntary or involuntary, for any relief under any
bankruptcy, insolvency, reorganization, dissolution, winding-up, receivership,
liquidation or similar law or statute, now or hereinafter in effect, is filed
or commenced by the other party, (ii) if any such petition or proceeding is
filed or commenced against the other party and is not dismissed within 60 days,
(iii) if any trustee, custodian, receiver or similar officer is appointed for
the other party or any substantial part of its property and is not discharged
within 30 days, (iv) if

                                       18
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the other party shall be dissolved or shall cease to conduct its business
(unless it shall have prior thereto or simultaneously therewith disposed of all
or substantially all its assets), (v) if the other party shall become insolvent
(however defined or evidenced) or (vi) if the assets of the other party shall
be seized or attached and such attachment shall not have been released in 30
days.

24.2     Breach of this Agreement, Etc. In the event of a substantial default
or a breach of any material term, condition or obligation hereunder, unless the
defaulting or breaching party shall fully remedy the default or breach within
30 days after written notice from the other party specifying such default or
breach (or, if such default or breach cannot be fully remedied within 30 days,
the defaulting or breaching party shall have commenced all actions required for
such full remedy within such 30 day period and shall fully remedy the default
or breach within such period of time as agreed to by the nondefaulting or
non-breaching party), this Agreement shall, at the option of the non-defaulting
or non-breaching party, exercised by notice to the other party, terminate.
Except as otherwise provided herein, upon termination of this Agreement in the
event of such substantial default or material breach, all rights and privileges
granted under this Agreement to the defaulting or breaching party shall
immediately terminate.

24.3     Rights of the Parties In the Event of Termination. Notwithstanding
anything contained herein to the contrary, the following rights and obligations
shall survive the expiration or termination of this Agreement for any reason
whatsoever, regardless of the party at fault:

a.       Kentek's rights and obligations under Sections 4.5, 4.6, 4.7, 6, 7,
12, 13, 16, 18, 21, 23, 24, 26, 27, 28, 30, 31, and 32; provided, in each case,
that Kentek receives any payment provided for herein, upon Kentek's performance
of its rights and obligations under such section;

b.       Buyer's rights and obligations to pay for Products already delivered
by Kentek and for Products ordered under outstanding Purchase Orders (subject
to Section 4.4); and

C.       Buyer's rights and obligations under Sections 4.3, 4.4, 4.5, 4.6, 4.7,
5, 6.2, 7, 9, 12, 13.3,15, 16, 18, 21, 23, 24, 26, 27, 28, 30, 31 and 32.

25.      Point of Sale Reporting. Buyer shall provide to Kentek a monthly
reporting of the sale of Printers, Accessories, and Consumables into each
territory to assist Kentek in providing commissioned sales representatives
compensation for efforts to assist Buyer.

26.      Nameplates and Trademarks.

26.1     Buyer's Trademarks. Buyer may affix to units of Products Buyer's
supplied nameplates including the trademarks or logo of Buyer. Buyer shall
indemnify and hold harmless Kentek against all claims, judgments, losses,
damages, liabilities, costs and expenses (including reasonable legal fees) that
Kentek may sustain or incur or be subjected to by reason of Kentek's or Buyer's
affixation of such name plates, including, without limitation, any claim of
infringement of the rights of any third person.

26.2     Kentek Proprietary Rights Legend and Trademarks. Kentek shall have the
right to affix to units of Product (to the extent not rendered ineffective)
inconspicuous nameplates or other designations, and take such other measures to
label or identify Products that are in the opinion of Kentek necessary to
protect any patent, copyright or trade secret right retained by Kentek or its
suppliers, or to meet any requirement of law imposed on Kentek. In addition,
Kentek shall have the right to and require Buyer to affix a label showing
Kentek's and any licensor's names and trademarks to all diskettes containing
any Software Products. Buyer shall not alter, remove or render illegible any
such notices.  Buyer shall

                                       19
<PAGE>   20
not have or acquire any right, title or interest in the trademark "Kentek" or
any other "K-" designated non-impact printer or Kentek product, or in any other
trademark, service mark or trade name that is now hereafter owned by or
licensed to Kentek, either used alone or in conjunction with other words or
names, or in the goodwill thereof, and shall not use any such mark or name
without the express written consent of Kentek. If Buyer should, in spite of
this provision, acquire any such rights, title or interest by operation of law
or otherwise, Buyer will, upon request by Kentek, reconvey the same to Kentek.

27.      Compliance with Laws. Both parties shall comply, and do all things
necessary to comply, with all applicable federal, state, and local laws,
regulations and ordinances, including, but not limited to, the regulations of
the United States Department of Commerce relating to the export of products or
technical data, insofar as they relate to the activities to be performed under
this Agreement. Buyer agrees to obtain the required government documents and
approvals prior to export of any Products delivered to it or technical data
disclosed to it or the direct product related thereto.  Buyer shall hold Kentek
harmless from any actions arising from its failure to comply with the
provisions of this Section 27.

28.      Document Precedence. In the event of a conflict between the documents
incorporated herein, the terms of Sections 1 through 32 shall have precedence
over those of the Schedules.

29.      Authority. Each of the parties hereto represents to the other that it
has due and proper authority to enter into, execute and perform all duties and
obligations set forth and envisioned by this Agreement. Each party indemnifies
and holds the other harmless for breach of the warranties and representations
contained in this Section 29.

30.      Limitation of Liability and Actions. In no event shall either party be
liable to the other for any tort, consequential, incidental, punitive or
special damages, except to the extent expressly provided in this Agreement,
even if such party shall have been advised of the possibility of such potential
loss or damage or if such loss or damages arise out of the termination of this
Agreement. No action arising out of this Agreement, regardless of form, may be
brought more than two years after the cause of action has arisen.

31.      Severability. If any provision of this Agreement, or the application
hereof to any person or circumstance, for any reason or to any extent, shall be
found by any court of competent jurisdiction to be illegal, invalid or
unenforceable, the remainder of this Agreement and the application of that
provision to other persons or circumstances shall not be affected, but rather
shall be enforced to the extent permitted by law so long as it still expresses
the intent of the parties. If the intent of the parties cannot hereby be
preserved, the parties agree to enter into a legal, valid and enforceable
substitute agreement which will achieve the objectives of this Agreement as it
is written, or renegotiate the affected portions of this Agreement to the same
end.

32.      Miscellaneous. This Agreement, including the Schedules listed on the
table of contents and the Purchase Orders issued and accepted hereunder set
forth the entire understanding of the parties with respect to the Products and
the purchase and sale thereof and merges all prior written and oral
communications. Except as set forth herein, this Agreement can be modified or
amended only in a writing signed by a duly authorized representative of Kentek
and Buyer.  Section headings are provided for the convenience of reference only
and shall not be construed otherwise.

                                       20
<PAGE>   21
                 No failure to exercise, or, delay in exercising, on the part
of either party, any right, power or privilege hereunder shall operate as a
waiver thereof, or will any single or partial exercise of any right, power or
privilege hereunder preclude the further exercise of the same right or the
exercise of any other right hereunder.

                 Nothing expressed or implied in this Agreement is intended or
shall be construed to confer upon or give to any person other than the parties
hereto, and their respective permitted successors and permitted assigns, any
rights or remedies under or by reason of this Agreement. This Agreement is not
assignable in whole or in part by either party without the prior written
consent of the other, except that either party may, without such consent,
assign this Agreement and its rights and obligations hereunder to any successor
to its business or to the ownership of all or substantially all of its stock or
assets that assumes such parties' obligations hereunder. Each party hereto is
and at all times shall be independent and nothing contained in this Agreement
shall be construed as constituting either party, a partner, co-venturer,
employee or agent of the other.

                 This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which shall constitute but one
Agreement.

                 This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.  Any action or proceeding
brought to enforce obligations contained in this Agreement may be brought in
any of the Federal or State courts in Colorado, and Buyer and Kentek consent
and agree to submit to the jurisdiction of any of such courts.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates mentioned below.

KENTEK INFORMATION                         MANNESMANN TALLY CORPORATION
SYSTEMS, INC.


By                                         By
  -------------------------                   -------------------------
         
Title                                      Title
     ----------------------                     -----------------------

Date                                       Date
    -----------------------                    ------------------------

                                       21
<PAGE>   22
                                 SCHEDULE A-1
                               K30/K30D 300 dpi
                                PRINTER PRICES

<TABLE>
<CAPTION>
                                                 OEM JAPAN  OEM BOULDER
                                                 ---------  -----------
<C>  <C>                                          <C>         <C>
K30, XS, 30ppm, 300 dpi with Controller                                       
(68020 EIGS with co-processor)                                            
4 MB Program RAM, Standard I/O                                            
Two (2) 3 1/2" FDD, including Standard Operating                           
and Emulation Software                             $[   ]       [   ]     
     XS with 8Mb MIGS Controller                   $[   ]     $ [   ]     
     XS with 16Mb MIGS Controller                  $[   ]     $ [   ]     
                                                                          
K30, XS, 30ppm, 300 dpi with Controller                                       
(68020 EIGS with co-processor)                                            
4 MB Program RAM, Standard I/0, One (1)                                   
3 1/2" FDD, One (1) installed Hard Disk Drive,                            
and Standard Operating and Emulation Software      $[   ]     $ [   ]     
     XS with 8Mb MIGS Controller                   $[   ]     $ [   ]     
     XS with 16Mb MIGS Controller                  $[   ]     $ [   ]     
                                                                          
                                                                          
K30D, XS, 30spm, Duplex, 300 dpi with                                         
Controller (68020 EIGS with co-processor)                                 
4 MB Program RAM, Standard I/0                                            
Two (2) 3 1/2" FDD, including Standard Operating                          
and Emulation Software                             $[   ]     $ [   ]     
     XS with 8Mb MIGS Controller                   $[   ]     $ [   ]     
     XS with 16Mb MIGS Controller                  $[   ]     $ [   ]     
                                                                          
K30D, XS, 30spm, Duplex, 300 dpi with Controller                              
(68020 EIGS with co-processor), 4 MB Program                              
RAM, Standard I/0, One (1) 3 1/2" FDD, One (1)                             
installed Hard Disk Drive, and Standard Operating                         
and Emulation Software                             $[   ]     $ [   ]     
     XS with 8Mb MIGS Controller                   $[   ]     $ [   ]     
     XS with 16Mb MIGS Controller                  $[   ]     $ [   ]     
</TABLE>                                                                  

NOTES:

1.)       Prices are based on a Y/$ rate of yen between [  ]-[  ]. Outside this
          range, Kentek will adjust accordingly.
2.)       All prices are ExWorks Kentek's designated facility and apply to
          orders placed within normal lead time only; expedited orders will be
          subject to then current surcharges.
3.)       Prices do not include DRAM surcharges, if applicable.
4.)       All XS Printers must be ordered with a Supplies Starter Kit. See
          Schedule B.


<PAGE>   23


                                 SCHEDULE A-2
                          K31/K31D and K40D 300 dpi
                                PRINTER PRICES

<TABLE>
<CAPTION>
                                                         OEM JAPAN  OEM BOULDER
                                                         ---------  -----------

<S>                                                         <C>         <C>    
K31XS, XS, 30ppm, 300 dpi with Controller 
(8Mb RIGS I+) Standard I/0, Standard Color
No Logo, 4x2OLCD op panel, One (1) 3 1/2" FDD,
One (1) installed Hard Disk Drive, Direct Attach FlexIO
Card, Standard Operating and Emulation Software             $ [   ]     $ [   ]

         XS with 16Mb RIGS II Controller                    $ [   ]     $ [   ]


K31DXS, XS, 30spm, Duplex, 300 dpi with Controller
(12Mb RIGS I+), Standard I/0, Standard Color,
No Logo, 4x20 LCD op panel, One (1) 3 1/2" FDD,
One (1) installed Hard Disk Drive, Direct Attach FlexIO
Card, Standard Operating and Emulation Software             $ [   ]     $ [   ]

         XS with 16Mb RIGS II Controller                    $ [   ]     $ [   ]





K40DXS, XS, 40spm, Duplex, 300 dpi with Controller
(12Mb RIGS I+) Direct Attach Flex I/0,
One installed Hard Disk Drive, One 3 1/2" FDD, 4x20
LCD op panel, Standard Color, No Logo, Standard
Operating and Emulation Software                            $ [   ]     $[    ]

         XS with 16Mb RIGS II Controller                    $[    ]     $[    ]
</TABLE>




NOTES:
1.)       Prices are subject to a Y/$ rate of yen between [  ]-[  ]. Outside
          this range, Kentek will adjust accordingly.
2.)       All prices are ExWorks Kentek's designated facility and apply to
          orders placed within normal lead time only; expedited orders will be
          subject to then current surcharges.
3.)       Prices do not include DRAM surcharges, if applicable.
4.)       All XS printer configurations must be ordered with a Supplies Starter
          Kit. See Schedule B.

<PAGE>   24


                                 SCHEDULE A-3
                             K30 and K30D 300 dpi
                       AVAILABLE EX WORKS BOULDER ONLY
                     SPECIAL CONFIGURATION PRINTER PRICES


<TABLE>
<S>                                                <C>    
K30, 30ppm, 300 dpi with Dataproducts
Interface Configuration 4 MB Program RAM,
Standard I/0 (800/550), Two (2) 3 1/2" FDD

       with EIGS Controller                        $ [   ]
       with 8Mb MIGS Controller                    $ [   ]
       with 16Mb MIGS Controller                   $ [   ]


K30D, 30spm, Duplex, 300 dpi with Dataproducts
Interface Configuration, 4Mb Program RAM,
Standard I/0 (800/550), Two (2) 3 1/2" FDD

       with EIGS Controller                        $ [   ]
       with 8Mb MIGS Controller                    $[    ]
       with 16Mb MIGS Controller                   $[    ]



EV30, 30ppm, 300 dpi Simplex with Video
Signal Interface, Video PCL Controller,
Disk Drive Cover, Special Lower Rear Cover,
Standard I/0 (800/550), Standard Color, No
Logo, (does not include 68020 EIGS with co-
processor; Signal Interface PCL Controller and
2 3 1/2" FDDs)                                     $ [   ]
</TABLE>




NOTES:
1.)       Prices are subject to a Y/$ rate of yen between [ ]-[ ]. Outside this
          range, Kentek will adjust accordingly.
2.)       All prices are ExWorks Kentek's designated U.S. warehouse and apply
          to orders placed within normal lead time only; expedited orders will
          be subject to then current surcharges.
3.)       Prices do not include DRAM surcharges, if applicable.



<PAGE>   25



                                 SCHEDULE A-4
                              ACCESSORIES PRICE

<TABLE>
<CAPTION>
PRODUCT                                                       OEM JAPAN         OEM BOULDER
DESCRIPTION                                                     PRICING           PRICING
- -----------                                                     -------           -------
<C>                                                             <C>              <C>       

1200 Sheet Feeder Cassette
with Variable Paper Sizes thru 8 1/2 x 11*                      $     [    ]     $   [    ]

2500 Sheet Input Cassette with Variable
Paper Sizes thru 8 1/2 x 14*                                    $     [    ]     $   [    ]

1400 Sheet Facedown Print
Stacker w/Offset Jogging
Paper Sizes thru 81/2 x 14*                                     $     [    ]     $   [    ]

75 Envelope Feeder Cassette*                                    $     [    ]     $   [    ]

Upper Cassette
(550 sheet capacity)*                                           $      [   ]     $    [   ]

Lower Cassette
(250 sheet capacity)*                                           $      [   ]     $    [   ]

Rear Cover Board Housing
(without hardware)*                                             $      [   ]     $    [   ]

PostScript I Software                                           $      N/A       $   [    ]
PostScript II Software (RIGS only)                              $      N/A       $   [    ]
                                                                           
Hard Disk Drive Assembly                                        $      N/A       $   [    ]
                                                                           
Ethernet Attachment with Housing                                $      N/A       $   [    ]
                                                                           
NETPrint Ethernet Interface w/Novell Support (120v)             $      N/A       $   [    ]
                                                                           
K31K40D Net Attach Ethernet Card (TCP/IP)                       $      N/A       $   [    ]
                                                                           
K30 "B" Card (Ethernet Card) Cover                              $      N/A       $    [   ]
                                                                           
Printer Cabinet                                                 $      N/A       $   [    ]
</TABLE>
                                                                 


NOTES:
1.        All items marked with an asterik are subject to currency
          fluctuations. Pricing based on Y/$ rate of yen between [  ]-[  ].
          Outside this range, Kentek will adjust accordingly.
2.        Prices are Ex Works Kentek's designated facility and apply to orders
          placed within normal lead time only; expedited orders are subject to
          then current surcharges.


<PAGE>   26



                                 SCHEDULE B-1
                                 K30/K31/K40D
                            XL CONSUMABLES PRICES
                             (PALLET QUANTITIES)


<TABLE>
<CAPTION>
                                                    PALLET
ITEM DESCRIPTION                          PRICE   QUANTITIES   YIELD
- ----------------                          -----   ----------   -----
                                                          
<S>                                      <C>           <C>    <C>   
Toner Cartridges (2 pack)                $ [   ]       72      34,000
                                                            
Toner Cartridges (8 pack)                $[    ]       21     136,000
                                                            
Photoconductor Unit                      $[    ]       54     100,000
                                                            
Photoconductor Unit                      $[    ]       54     200,000
                                                            
Fuser Unit                               $[    ]       52     200,000
                                                            
Cleaning Unit                            $[    ]       40     400,000
                                                            
K30 Developer Unit                       $[    ]       30     600,000
                                                            
K31 Developer Unit                       $[    ]       30     600,000
                                                            
K40D Developer Unit                      $[    ]       30     600,000
                                                            
Supplies Starter Kit                   $[      ]      N/A   
</TABLE>


NOTES:

1.)  All prices are on a per order, single delivery basis.

2.)  All prices are pallet quantity; ExWorks Kentek's production facility.

3.)  Some newly manufactured supplies may contain selected recycled parts
     equivalent to new in performance.

4.)  Supplies Starter Kit includes one each fuser, developer, cleaner,
     photoconductor, and 2-pack toner.



<PAGE>   27


                                 SCHEDULE B-2
                                 K30/K31/K40D
                            XL CONSUMABLES PRICES
                        (LESS THAN PALLET QUANTITIES)

<TABLE>
<CAPTION>
ITEM DESCRIPTION                 PRICE         YIELD 
- ----------------                 -----         ----- 
<S>                             <C>            <C>    
Toner Cartridges (2 pack)       $ [   ]        34,000 
                                                      
Toner Cartridges (8 pack)       $[    ]       136,000 
                                                      
Photoconductor Unit             $[    ]       100,000 
                                                      
Photoconductor Unit             $[    ]       200,000 
                                                      
Fuser Unit                      $[    ]       200,000 
                                                      
Cleaning Unit                   $[    ]       400,000 
                                                      
K30 Developer Unit              $[    ]       600,000 
                                                      
K31 Developer Unit              $[    ]       600,000 
                                                      
K40D Developer Unit             $[    ]       600,000 
</TABLE>

NOTES:

1.)  All prices are on a per order, single delivery basis.

2.)  All prices are ExWorks Kentek's production facility.

3.)  Some newly manufactured supplies may contain selected recycled parts
     equivalent to new in performance.




<PAGE>   28


                                 SCHEDULE B-3
            CONSUMABLES ORDERING TERMS AND CONDITIONS



<TABLE>
<CAPTION>
                     STANDARD                   EXPEDITE/EMERGENCY   
                      STOCK                            TERMS         
                     --------                   ------------------   
                                                                     
<S>                  <C>                        <C>                  
PRICING              Schedule B-1               Schedule B-2         
                                                                     
LEAD TIME            30 Days ARO                24 Hours ARO         
                     U.S. warehouse             U.S.warehouse(1)     
                                                                     
                                                                     
DELIVERY TERMS       ExWorks Kentek             ExWorks Kentek       
                     production facility        production facility  
                                                                     
SPECIAL                                                              
CONDITIONS           None                       Reasonable           
                                                quantities           
                                                per item plus        
                                                $50 per order        
                                                material             
                                                handling charge      
</TABLE>


NOTES:

1.)  Kentek will use its best efforts to ship consumables requested in a
     purchase order by the customer identified as an "Emergency Order" within
     twenty-four (24) hours during normal business hours Monday - Friday, 8:00
     a.m. - 4:30 p.m., after receipt of order (ARO).





<PAGE>   29


                                 SCHEDULE C-1

                   SPARE PART ORDERING TERMS AND CONDITIONS



<TABLE>
<CAPTION>
                           STANDARD                EMERGENCY       
                            STOCK                    TERMS         
                           --------                ---------       
                                                                   
<S>                        <C>                     <C>             
DISCOUNTS                  [ ]%                    [ ]%              
(off list price                                                    
in Schedule C)                                                     
                                                                   
                                                                   
LEAD TIME                  30 Days ARO             24 Hours ARO(1) 
                                                                   
                                                                   
ExWORKS                    U. S. warehouse         U.S. warehouse  
                                                                   
                                                                   
SPECIAL CONDITIONS         None                    Reasonable      
                                                   quantities      
                                                   per part plus   
                                                   $50 per order   
                                                   material        
                                                   handling charge 
</TABLE>                                                      

NOTES:

1.)  Kentek will use its best efforts to ship spare parts requested in a
     purchase order by the customer identified as an "Emergency Order" within
     twenty-four (24) hours during normal business hours, Monday - Friday, 8:00
     a.m.-4:30 p.m., after receipt of order (ARO).

2.)  Prices are subject to yen between [ ]-[ ]. Outside this range, Kentek will
     adjust accordingly.

3.)  Prices are ExWorks Kentek's designated U.S. warehouse and apply to orders
     placed within normal lead times only; expedited orders will be subject to
     then current surcharges.




<PAGE>   30


                                  SCHEDULE D

                            PRODUCT SPECIFICATIONS




<PAGE>   31
KENTEK



                                                          PRODUCT SPECIFICATION

                                                                   K40D PRINTER

                                                                    VERSION 2.5

                         
[PHOTOGRAPH]


                                                                  JULY 17, 1996



<PAGE>   32








K40D Product Specification                                           Version 2.5
- --------------------------------------------------------------------------------

DOCUMENT REVISION HISTORY
<TABLE>

<S>                       <C>
        Preliminary .1     February 3, 1992

        Preliminary .2     February 11, 1992
                           Section 3.3      Revised controller performance

        Preliminary .3     March 16, 1992
                           Section 1.0      Add summary
                           Section 2.3      Possibly use DC brushless motor
                           Section 4.2      Context save on emulation switch under debate
                           Section 5.0      Add consumable life section

        Preliminary .4     March 26, 1992
                           Section 2.1.2.1  Change  communications  to host on button  press to  independent
                                            of connection

        Preliminary .5     April 15, 1992
                           Section 2.2      Add supply serialization definition
                           Section 3.6.2    Change I/O card physical definition

        Preliminary .6     September 30, 1992
                           Section 2.1      Change operator panel definition

        Preliminary .7     November 9, 1992
                           Change name to K40D, speed 40 ppm

        Preliminary .8     January 23, 1993
                           Add virtual printers, change op panel definition

        Version 1.0        May 6, 1993 
                           Complete spec.

        Version 1.1        June 1, 1993

        Version 1.2        September 7, 1993
                           Section A.2      Add IIC, VPCL, FDC connector pinout
                           All sections     Fix K30 typos

                           Sections C.1/C.2 Change max memory to 104 MB

        Version 1.3        March 8, 1994
                           Section 8        Update agency certifications
                           Section B.2.7    Correct op panel connector pinouts

        Version 2.0        August, 1994
                           All              Significant rearrangement and updating of entire document
                           All              Changes to reflect duplex and hard disk as standard features
                           Section 8.1      Non-serialized developer and PC not supported on K40D
                           Section 4.6      Added PCL and PostScript information
                           Section 4.3      Add controller memory table
                           Section 14       Updated safety/regulatory testing
                           Section 13       Added additional environmental testing requirements
</TABLE>






- --------------------------------------------------------------------------------
Kentek Information Systems          Confidential                          Page i
<PAGE>   33

K40D Product Specification                                           Version 2.5
- --------------------------------------------------------------------------------
<TABLE>

<S>                       <C>
        Version 2.1        Sept. 12, 1994
                           Section 1.4       Added part numbers for XS and video
                                             interface configurations 
                           All               Changed FlexCom to FlexIO, PC-Attach 
                                             to Direct-Attach 
                           Section 12.1,     Corrected Safety/EMI marks
                               14.1, 14.2.1
                           Section 0         Changed to indicate non-serialized
                                             supplies not supported 
                           Section 6.1       Updated Operator Panel colors 
                           Section 8.2.1     Changes for toner density control from 
                                             the op panel 
                           Section 12.1      Replaced CE with TUV-GS under Safety 
                                             Mark column and deleted CRC under EMI 
                                             Mark column 
                           Section 14.1      Replaced CE with TUV-GS Safety Mark 
                           Section 14.2.1    Changed CISPR to Class B

        Version 2.2        January, 1995
                           Section 14.2.1    Changed CISPR back to Class A
                           Section 4.3       Changed  max. memory to 72 MB instead  
                                             of 104 MB and corrected memory table
                           Section           Eliminated LN03 emulation as a standard 
                                             feature
                           Section 5         Changed  name of the K40D  VPCL to 
                                             AVPCL to differentiate from the K30 VPCL
                           All               The term `Consumables' replaced with 
                                             `Supplies; XL supplies 
                           Section 3.3.2     Deleted the jogging spec for the standard 
                                             output unit 
                           Section 4.5.6     Clarified support for dual Direct-Attach 
                                             cards 
                           Section 2.6       Changed to keep jam locator label under 
                                             top cover
                           Section           Added font list for HP 4 Si level PCL5

        Version 2.3        February 14, 1995
                           Section 8.1       Expanded discussion of serializer 
                                             operation and how RIGS handles supply 
                                             life counters
                           Section 8.2       Expanded the supply yield section to 
                                             include cycle count specifications and 
                                             discussion on other wear factors effecting 
                                             supply yields.
                           Section 15.3      Added  drawing of K40D carton and added  
                                             dimensions for Starter Kit
                           Section 10.2.8.1  Removed  a line frequency tolerance   
                                             spec that was not applicable to K40
                           Section 4.3       Updated  memory  section  to limit 
                                             maximum memory to 64MB and added 
                                             approved SIMM vendor list
                           Section 2.3       Updated software release plans

        Version 2.4        Nov. 15, 1995
                           Section 15        Updated shipping and net weights 
                           Section 3.1       Updated media weights 
                           Section 3.5.5     Corrected MTBF formula (was based on 
                                             30ppm) 
                           Section 4.4       Added new 270 MB Quantum hard drive 
                           Section           Eliminated "Glossary of Acronyms and 
                                             Jargon"
                           Section           Removed Software specifications - 
                                             refer to RIGS Software Specification
                           Section 7.2       Eliminated references to the High 
                                             Capacity Envelope Feeder Added RIGS-I+ 
                                             enhancement, replacing original RIGS-1 
                                             configurations

        Version 2.5        July 17, 1996
                           Section 8.3       Changed consumable shelf lifes
                           Section 15.4      Updated installation space requirements
                           Section 1.4       Added K40D-unique photoconductor part 
                                             number
</TABLE>






- --------------------------------------------------------------------------------
Kentek Information Systems             Confidential                      Page ii
<PAGE>   34
K40D Product Specification                                           Version 2.5

                               TABLE OF CONTENTS


<TABLE>
<S>                                                                                                            <C>
1. INTRODUCTION...................................................................................................1
   1.1 K40D Enhancement Summary...................................................................................1
   1.2 Phased Released Plan.......................................................................................1
   1.3 Related Documents..........................................................................................2
   1.4 Part Numbers...............................................................................................2

2. PRINTER DESCRIPTION............................................................................................4
   2.1 Overview...................................................................................................4
   2.2 Basic Printer Specifications...............................................................................5
   2.3 Phased Release Functionality...............................................................................6
     2.3.1 Initial Release........................................................................................6
     2.3.2 Phased Enhancements....................................................................................6
     2.3.3 Future Releases........................................................................................7
   2.4 Options and Upgrades.......................................................................................7
   2.5 Printer Accessories........................................................................................7
     2.5.1 Paper Handling.........................................................................................7
     2.5.2 Printer Cabinet........................................................................................8
   2.6 Printer Access.............................................................................................8

3. K40D PRINT ENGINE SPECIFICATIONS..............................................................................11
   3.1 Media Size and Weight.....................................................................................11
     3.1.1 Standard Input Size and Size Sensing..................................................................11
     3.1.2 Media Weight and Grain Direction......................................................................11 
     3.1.3 Transparencies........................................................................................12
     3.1.4 Labels................................................................................................12
   3.2 Standard Inputs...........................................................................................13
   3.3 Standard Output Unit......................................................................................13 
     3.3.1 Description...........................................................................................13
     3.3.2 Job Offset Performance................................................................................13 
   3.4 Engine Throughput.........................................................................................13
   3.5 Reliability...............................................................................................14
     3.5.1 Rated Duty Cycle......................................................................................14 
     3.5.2 Power On Hours........................................................................................14
     3.5.3 Paper Path Reliability................................................................................14
     3.5.4 Miscellaneous Media Damage............................................................................14
     3.5.5 Mean Time Between Failures............................................................................15
     3.5.6 Mean Time to Repair...................................................................................15

4. KENTEK RIGS CONTROLLER SPECIFICATIONS.........................................................................16
   4.1 Controller Models.........................................................................................16
   4.2 Performance...............................................................................................16
   4.3 Memory....................................................................................................17
   4.4 Internal Disk Storage.....................................................................................18
   4.5 FlexIO I/O................................................................................................18
     4.5.1 Host Interfaces.......................................................................................18
     4.5.2 Physical Dimensions...................................................................................19
     4.5.3 Electrical Interface..................................................................................19
     4.5.4 Multiple Attachments..................................................................................19
     4.5.5 Net-Attach Card.......................................................................................20
     4.5.6 Direct-Attach Card....................................................................................20
   4.6 Data Streams and PDLs.....................................................................................23
</TABLE>



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K40D Product Specification                                           Version 2.5
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<TABLE>

<S>                                                                                                             <C>
5. THIRD-PARTY RIP CONTROLLER INTERFACE..........................................................................24
   5.1 Overview..................................................................................................24
   5.2 Physical Dimensions.......................................................................................24
   5.3 Connectors................................................................................................25
     5.3.1 AVPCL Connector.......................................................................................26
     5.3.2 FlexIO I/O Connectors.................................................................................26
     5.3.3 SCSI Connector........................................................................................27
     5.3.4 Floppy Disk Connector.................................................................................27
     5.3.5 Power Connector.......................................................................................27
   5.4 Power Supply..............................................................................................28
   5.5 Controller Cooling........................................................................................28

6. K40D STANDARD OPERATOR PANEL..................................................................................29
   6.1 Description...............................................................................................29
   6.2 Function Keys.............................................................................................30
   6.3 Message Indicators........................................................................................31
   6.4 LCD Display...............................................................................................32
   6.5 Alarm.....................................................................................................32
   6.6 Mechanical Data...........................................................................................32
   6.7 Electrical Connection.....................................................................................32
   6.8 Menu Definition...........................................................................................33
     6.8.1 Ready State...........................................................................................33
     6.8.2 Menu State............................................................................................33
     6.8.3 Configuration Mode....................................................................................34
     6.8.4 Service Diagnostics Mode..............................................................................34

7. OPTIONAL ACCESSORIES..........................................................................................35
   7.1 2500 Sheet Feeder.........................................................................................35
     7.1.1 Capacity..............................................................................................35
     7.1.2 Paper Feed Reliability................................................................................35
     7.1.3 Voltages..............................................................................................35
     7.1.4 Documentation.........................................................................................35
   7.2 Envelope Feeders..........................................................................................35
     7.2.1 75 Envelope Cassette..................................................................................35
     7.2.2 Envelope Specifications...............................................................................36
     7.2.3 Print Quality and Paper Feed Reliability..............................................................36
   7.3 1400 Sheet Stacker........................................................................................37
     7.3.1 Capacity..............................................................................................38
     7.3.2 Reliability...........................................................................................39
     7.3.3 Voltages..............................................................................................39
     7.3.4 Documentation.........................................................................................39

8. SUPPLIES......................................................................................................40
   8.1 Serialization.............................................................................................40
   8.2 Supply Yields.............................................................................................41
     8.2.1 Toner Yields..........................................................................................41
     8.2.2 Photoconductor and Developer Yields...................................................................41
   8.3 Storage and Shelf Life....................................................................................42
   8.4 Toner Cartridge Compatibility.............................................................................42

9. DOCUMENTATION.................................................................................................43
   9.1 User Manuals..............................................................................................43
   9.2 Service Manuals...........................................................................................43

10. PRINT QUALITY................................................................................................44
   10.1 Introduction.............................................................................................44
</TABLE>





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K40D Product Specification                                           Version 2.5
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<TABLE>

<S>                                                                                                          <C>
     10.1.1 Scope................................................................................................44
     10.1.2 Definitions..........................................................................................44
     10.1.3 General requirements and Restrictions................................................................44
   10.2 Print Quality Requirements...............................................................................44
     10.2.1 Optical Density......................................................................................44
     10.2.2 Background...........................................................................................45
     10.2.3 Registration.........................................................................................45
     10.2.4 Skew.................................................................................................45
     10.2.5 Stroke Width.........................................................................................45
     10.2.6 Resolution...........................................................................................45
     10.2.7 Line Straightness....................................................................................46
     10.2.8 Magnification........................................................................................46
     10.2.9 Fuse Grade...........................................................................................46
     10.2.10 Image Uniformity....................................................................................46
     10.2.11 Spots and Voids.....................................................................................47
     10.2.12 Cleaning Residual...................................................................................47
     10.2.13 Corona Streaks......................................................................................47
     10.2.14 Bead or Toner Carry-out.............................................................................48
     10.2.15 Spew................................................................................................48
     10.2.16 Keystoning..........................................................................................48
     10.2.17 Permissible Print Quality Defects...................................................................48

11. SERVICEABILITY...............................................................................................49
   11.1 Adjustments..............................................................................................49
   11.2 Cleaning and Maintenance.................................................................................49
     11.2.1 Cleaning.............................................................................................49
     11.2.2 Periodic Lubrication.................................................................................49
     11.2.3 Special Tools........................................................................................49
     11.2.4 Preventative Maintenance.............................................................................49
   11.3 Diagnostics..............................................................................................50
     11.3.1 Power on Diagnostics.................................................................................50

12. LINE POWER REQUIREMENTS......................................................................................51
   12.1 Voltage and Frequency....................................................................................51
   12.2 Power Consumption........................................................................................51
   12.3 Timing...................................................................................................52
     12.3.1 Power Off Cycle Time.................................................................................52
     12.3.2 Cold Start Warm Up Time..............................................................................52
     12.3.3 Time to First Print..................................................................................52

13. ENVIRONMENTAL SPECIFICATIONS.................................................................................53
   13.1 Operating Environment....................................................................................53
     13.1.1 Temperature and Humidity.............................................................................53
     13.1.2 Acoustics............................................................................................53
     13.1.3 Emissions............................................................................................55
   13.2 Shipment and Storage Environment.........................................................................55
     13.2.1 Temperature and Humidity.............................................................................55
     13.2.2 Mechanical Shock and Vibration.......................................................................55
     13.2.3 Paper Storage........................................................................................55

14. SAFETY AND AGENCY APPROVALS..................................................................................56
   14.1 Safety...................................................................................................56
   14.2 Electromagnetic Compatibility............................................................................56
     14.2.1 Emissions............................................................................................56
     14.2.2 Immunity.............................................................................................56
</TABLE>





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<TABLE>

<S>                                                                                                             <C>
15. PHYSICAL SPECIFICATIONS......................................................................................57
   15.1 Dimensions...............................................................................................57
   15.2 Weight...................................................................................................58
   15.3 Shipping Dimensions......................................................................................58
   15.4 Installation Space Requirements..........................................................................59
   15.5 Labels...................................................................................................59
     15.5.1 Operator Labels......................................................................................59
     15.5.2 Other Labels.........................................................................................60
     15.5.3 Serial Number........................................................................................61
     15.5.4 Configuration Number.................................................................................61
   15.6 Cosmetics................................................................................................61
     15.6.1 Logo Types and Colors................................................................................61
     15.6.2 Covers...............................................................................................61
</TABLE>






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K40D Product Specification                                           Version 2.5
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1.  Introduction

The K40D series printer is an improved version of Kentek's successful K30
printer. It offers improvements in controller cost and performance, ease of
use, and serviceability.

All specifications are subject to change without warning.

NOTE - UNRESOLVED QUESTIONS OR COMMENTS ARE INDICATED IN BOLD/ITALIC FONT


1.1 K40D ENHANCEMENT SUMMARY

The K40D represents significant enhancements over the K30 product line.
These include: 

    -  40 page per minute process speed 
    -  New operator panel with multi-line textual LCD display 
    -  Supply serialization support
    -  Increased supply life
    -  AVPCL replaces PCL card for engine control
       -     Provides consistent video interface across product line
       -     Capable of data rates for 240, 300, 400, 480, and 600 
             dpi (not all supported)
    -  Two line voltage configurations
         -     Use of DC drive motor eliminates line frequency dependence
         -     Uniform safety certification
    -  New controller family (RIGS)
         -     Higher performance, common RISC processor family
    -  FlexIO cards for flexible host attachment
         -     New rear cover for I/O card access 
    -  Virtual printing technology
    -  Bi-directional communication for printer management 
    -  Hard disk included standard 
    -  Duplex operation standard 
    -  Better cooling through new fans and ducts 
    -  Ozone and toner filter improves local environment
    -  Better EMI via new controller enclosure


1.2 PHASED RELEASED PLAN

The K40D will be released in phases, with additional functionality added at
each release. This approach will help ensure a successful product introduction
in the desired time frame with minimal risks. A base level of functionality
will be defined for the initial release, with enhancements defined for each
subsequent release. 

A key requirement for this phased approach is that enhancements be downward
compatible with previous releases and accomplished through software-only
upgrades without the need for hardware modifications or significant Customer
Engineer intervention.





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1.3 RELATED DOCUMENTS

The following documents are listed for reference and provide additional
detailed information on the K40D printer, components and development.

<TABLE>
<CAPTION>

     Document Name                                                     Revision         Document Number
     -------------                                                     --------         ---------------
<S>                                                                 <C>    
     K40D DVT Plan                                                     3.16.94
     K40D Video Input Interface Specification
     Modular I/O Specification
     Product Specification - RIGS Software
</TABLE>


1.4 PART NUMBERS

The following is a summary of the generic part numbers for most K40D-related
high-level assemblies:

<TABLE>
<CAPTION>

PRINTER PART NUMBERS
<S>                                                     <C>
         K40D, XS, RIGS-1+, Direct-Attach, 120V           81910005 (Introduced 11/95)
         K40D, XS, RIGS-1+, Direct-Attach, 230V           81910006 (Introduced 11/95)
         K40D, XS, RIGS-2, Direct-Attach, 120V            82010001
         K40D, XS, RIGS-2, Direct-Attach, 230V            82010002
         K40D, Video Interface, 240 DPI, 120V             81310001
         K40D, Video Interface, 240 DPI, 230V             81410003
         K40D, Video Interface, 300 DPI, 120V             81510003
         K40D, Video Interface, 300 DPI, 230V             TBD
         K40D, XS, RIGS-1, Direct-Attach, 120V            81910001 (Discontinued 11/95)
         K40D, XS, RIGS-1, Direct-Attach, 230V            81910002 (Discontinued 11/95)
         K40D, RIGS-1, Direct-Attach, 120V                81210001 (Replaced by XS model)
         K40D, RIGS-1, Direct-Attach, 230V                81210002 (Replaced by XS model)
         K40D, RIGS-2, Direct-Attach, 120V                82210001 (Replaced by XS model)
         K40D, RIGS-2, Direct-Attach, 230V                82210002 (Replaced by XS model)

SUPPLY PART NUMBERS
         XL Toner (2 pack)                                61030056*
         XL Toner (8 pack)                                61030057*
         K40D XL Developer                                81020132
         K40D XL Photoconductor                           10000022
         XL Cleaning Unit                                 61030055*
         XL Fuser (100-127V)                              81020133*
         XL Fuser (200-240V)                              81020134*
         XL Envelope Fuser (100-127V)                     TBD
         XL Envelope Fuser (200-240V)                     TBD
         K40D XL Supply Starter Kit (100-127V)            81230001
         K40D XL Supply Starter Kit (200-240V)            81230004

OPTION PART NUMBERS
         Direct-Attach Interface                          81130001
         Net-Attach Ethernet Interface (TCP/IP)           64030001
         PostScript Level-2                               11000091
         4 MB Memory Expansion Kit (2MB SIMM's)           40000007
         8 MB Memory Expansion Kit (4MB SIMM's)           40000008
         16 MB Memory Expansion Kit (8MB SIMM's)          TBD
</TABLE>





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<TABLE>
<CAPTION>

ACCESSORIES PART NUMBERS
<S>                                                    <C>      
         2500 Sheet Feeder                                54234001*
         K40D/K30 1400 Sheet Stacker                      53234001
         Printer Stand                                    51020922*
         Primary Cassette (550)                           51030022*
         Secondary Cassette (250)                         51030023*

DOCUMENTATION
         K40D Printer User's Guide                        81250001 (Phase 0 software)
                                                          90000028 (Phase 2 software)
         K40D Printer Reference Guide                     81250004 (Phase 0 software)
                                                          90000027 (Phase 2 software)
         K40D Quick Reference card                        81250003
         K40D Field Service Guide                         81250002

SUPPORT ITEMS
         K40D FRU List                                    90000008
         K40D Tune-up Kit                                 81230003
</TABLE>



* - Compatible with the K30 and K31 printers




















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K40D Product Specification                                           Version 2.5
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2.  Printer Description



2.1 OVERVIEW

K40D is a 40 page per minute electrophotographic non-impact printer designed
for high-volume single-user printing and departmental and network printing.
K40D supports these uses with high quality printing on a wide range of paper
sizes in both simplex and duplex mode. The K40D will be offered with duplex
operation as a standard feature. 

The K40D shares the time-proven K30 LED engine design that provides significant 
advantages:

    Ease of Operation and Maintenance - All Kentek printers are designed with
         a straight through paper path for jam resistance and easy access to
         clear an occasional jam. In addition, the frames and covers have been
         designed for easy access for supply replacement and maintenance.
    
    LED Printhead - The light emitting diode printhead results in a clear,
         sharp, high resolution image that is uniform across the page.
    
    Wide Variety of Paper Sizes - K40D prints on overhead projection foils and
         card stock (including pre-punched dividers) as well as a wide range of
         paper weights.
    
    Duplex Capability - The K40D prints duplex pages (two sides) at 40 images
         per minute or 20 pages per minute. Output is delivered face down in
         sequential order in either "tumble" or left margin bind format without
         using complex paper rotation hardware. The result is a duplex paper
         path that is resistant to jams and is easy to clear.

The K40D printer is available in two configurations, depending on customer
needs:

    Print Engine - all electromechanical and electrophotographic
         subassemblies, power supplies, frame, engine controller with video
         interface (AVPCL), and covers; configured and packaged for integration
         with an OEM customer's control unit and control panel. Kentek's
         control panel is available in this configuration if desired. Also
         included are a developer unit, fuser, photoconductor, cleaner unit,
         developer mix, and one toner cartridge. The main body of this document
         describes the print engine. The control panel is described in detail
         later in this specification.
     
     Standard Printer - the Print Engine integrated with a Kentek controller,
         engine controller (AVPCL) and control panel (also called an Attached
         Printer). This product is provided ready to ship to the end user.
         Customer documentation is provided by Kentek unless requested
         otherwise. Two different performance controllers are available;
         controllers are elsewhere in this document.
















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2.2 BASIC PRINTER SPECIFICATIONS

The following specifications apply to the basic K40D print engine. Specific
printer functionality of each planned release is detailed in the next section.

BASIC PRINTER SPECIFICATION SUMMARY
<TABLE>
<CAPTION>

                  FEATURE                            DESCRIPTION
                  -------                            -----------
<S>                                                   <C>        
                  Model                              K40D, Duplex

                  Resolution                         300 dpi

                  Speed                              40 ppm

                  Life                               9.0 Million

                  Duty Cycle
                      average                        150K/month
                      high usage                     300K/month

                  Duplex                             Standard

                  Paper Size                         Narrow Format:
                                                         Letter, Legal, A4, A5, B5 and others
                  Paper Weight                       16-24 lb. simplex
                                                     19-24 lb. duplex

                  Card Stock                         25-36 lb.

                  Standard Inputs
                    Upper Cassette                   250 sheets
                    Lower Cassette                   550 sheets

                  Standard Output                    550 sheets
                      Jogging                        No (Provided by 1400 Sheet Stacker)

                  Voltage configurations             Two: 100-127V, 200-240V; 50/60 Hz.
</TABLE>
















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2.3 PHASED RELEASE FUNCTIONALITY


2.3.1 INITIAL RELEASE

The following is a summary of required printer configurations and functionality
for initial release of the K40D. The functionality of the K40D at initial
release is essentially at K30 level with several notable enhancements.
This release, known as Phase-0, is scheduled for Q4/94 beta, Q1/95 production.

<TABLE>
<CAPTION>

         FEATURE                    DESCRIPTION
         -------                    -----------
<S>                                 <C>    
         Resolution                 300 dpi

         Operator panel             Standard 4x20 LCD display

         Controller                 RIGS-I, RIGS-I+, and RIGS-II

         RAM                        12 MB standard, 64 MB maximum

         Mass Storage               2 MB floppy drive, 170 MB hard drive (size subject to change) 

         PDL Software               PCL5 (HP III Si) - emulation, fonts
                                    PostScript, Level 1

         FlexIO Interfaces          Direct-Attach:  RS-232 serial,  Centronics/IEEE  1284  bi-directional  parallel
                                    (nibble-mode compatible)

                                    Net-Attach:  Single physical  connection;  TCP/IP,  FTP, TFTP,  TCPF,  LPR/LPD,
                                    Kentek K-client

                                    Single interface active at one time
</TABLE>

2.3.2 PHASED ENHANCEMENTS

After the initial K30-compatible release, several major software enhancement
releases are planned. The first major enhancement release, known as Phase I,
includes the following enhancements and is scheduled for early Q2/95:

<TABLE>
<CAPTION>

                  FEATURE                            DESCRIPTION
                  -------                            -----------
<S>                                                 <C>
                  PDL Software                       PCL 5e (HP 4 Si) (Without reverse-path PJL)
                                                     PostScript, Level II (evaluation release)
                  FlexIO Interfaces                  Single active port, multiple data streams (via PJL)
</TABLE>


Phase II includes the following enhancements and is scheduled for late Q2/95.
Refer to the Phase II Software Product Requirements Specification for more
details.

<TABLE>
<CAPTION>

                  FEATURE                            DESCRIPTION
                  -------                            -----------
<S>                                                 <C>
                  PDL Software                       PCL 5e (HP 4 Si) with reverse path PJL
                                                     PostScript, Level II
</TABLE>











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2.3.3 FUTURE RELEASES 

The following functionality is currently unscheduled:

<TABLE>
<CAPTION>

                  FEATURE                            DESCRIPTION
                  -------                            -----------
<S>                                                  <C>    
                  Resolution                         600 dpi

                  Virtual Printing                   Multiple active ports, Multiple virtual printers on a network

                  FlexIO Interfaces                  Ethernet - LAN Manager, Novell, Ethertalk
                                                     SCSI
                                                     Twinax/Coax
                                                     IBM Token Ring

                  Fonts                              TrueType (w/rasterizer)
</TABLE>


2.4 OPTIONS AND UPGRADES

A number of factory-options and field-upgrades for the printer itself will be
available. Additional options will be considered at a customer's request.
 
     Controller Options:
 
        Standard - Uses Kentek's RIGS-I+ controller (IDT 3081 RISC) for full
              page printer functions (upgraded from RIGS-I in Q4/95)

         Enhanced - Uses Kentek's high performance RIGS-II (IDT 3081)
              controller for exceptional full speed printing using the latest
              page description languages such as PostScript.

     Data Streams and PDL's:

         PhoenixPage PostScript (I and II) optional

     Communications Attachments:

         A    multitude of host attachments are available with either Kentek
              controller as described later. Attachments are modular and may be
              added by the end user.

     Memory:

          Up  to 64 MB of RAM may be added to a RIGS controller for
              exceptionally complex graphics, multiple virtual printer support,
              or downloaded fonts, forms or logo's.


2.5 PRINTER ACCESSORIES

Printer accessories are add-ons external to the printer itself. Accessories are
packaged and sold separately. Refer to the Optional Accessories section for
more detailed information.

2.5.1 PAPER HANDLING 

The following paper handling accessories are tested and supported for the K40D:

        -  2500 Sheet Feeder 

        -  1400 Sheet Stacker
  
        -  75 Envelope Feeder

Due to the higher paper speed, the 1400 Sheet Stacker will need to be modified
to work on the K40D. Older K30 Stackers are not compatible with K40D. 

The 1200 Sheet Feeder is not planned to be tested and supported on K40D.




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K40D Product Specification                                           Version 2.5
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2.5.2 PRINTER CABINET 

The standard Kentek printer cabinet supports the K40D printer as well as the 
K30. The use of the 2500 Sheet Feeder requires the use of the updated cabinet 
with lower sliding shelf.

2.6 PRINTER ACCESS

This section is a short overview of accessing the paper path and replacing
user-serviceable parts. For more detailed information on printer installation
and service, please see the appropriate manuals listed in the Customer
Documentation section. Refer to Figure 2-1: K40D Overview, for location of
covers and latches.

Paper cassettes are released by pushing down on the upper or lower release
levers. To install a cassette, push it into the appropriate port (cover hinge
away from printer) until it latches.

The paper path is completely accessible by opening the top cover. To open the
cover, squeeze the top cover release latch and lift upward until fully open. The
cover will remain open by means of a gas spring.




                                   [GRAPHIC]






                           FIGURE 2-1: K40D OVERVIEW

Kentek printers have a unique jam recovery feature in which each page's bit map
is saved until the page is in the output hopper, permitting automatic
reprinting of the page in the event of a jam. If a jam occurs, the operator
panel indicates the location of the jam. The jam code location indicator label
will continue to provided under the top cover for reference. 

To open the upper paper guide, pull up on the blue release lever and open the
guide to the left. The lower paper guide is underneath and swings upward to the
left. To release fuser pressure, move the blue release knob to the left. These
are the only three operations required to clear paper jams.





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                                   [GRAPHIC]






                       FIGURE 2-2: K40D TOP COVER ACCESS

The photoconductor unit and fuser are accessible under the top cover- see
Figure 2-2: K40D Top Cover Access. To remove the fuser, loosen the two fuser
thumbscrews by twisting counterclockwise, then grasp the fuser handle and lift
straight up. The installation procedure is the reverse of the removal
procedure. To remove the PC unit, open the upper paper guide, lift the PC
handle to the vertical position, and pull the PC unit straight upward until
clear of the printer. To replace the PC unit, unpack it and remove all packing
material, hold the unit with the arrow on the handle pointing to the rear of
the printer, and lower into the printer making sure it is seated in the guide
rails. A click will be heard when the unit is seated. The PC should be shielded
from ambient light when removed from the printer. 

The transfer corona is replaced by grasping the old charger in the upper paper 
guide and pulling it straight out. 
The new corona is inserted in the charger slot and pushed in until seated. 

The disk drives, toner, developer, and cleaner unit are accessible behind the 
front cover as shown in Figure 2-3: K40D Front Cover Access.





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                                   [GRAPHIC]






                      FIGURE 2-3: K40D FRONT COVER ACCESS

To replace the toner cartridge, twist the old cartridge counterclockwise until
the handle is level and pull out the cartridge. Remove the new cartridge from
its packaging, holding it so that the seal is on top. Shake the cartridge, then
rock from side to side to level the contents. Insert the cartridge into the
developer and, holding the cartridge in place, remove the toner seal. Twist the
cartridge clockwise until fully tightened. 

To remove the developer, cleaner, or main charger units, first remove the PC
unit. To remove the developer, loosen the developer thumbscrew by rotating
counterclockwise until free. Grasp the developer handle and pull the developer
outward until free. The developer unit is somewhat heavy; please use both hands.
To remove the cleaner unit, loosen its thumbscrew, then grasp the cleaner unit
handle and pull straight out. The main charger resides in the cleaner unit and
is removed by moving the charger handle slightly to the right and pulling
straight out. To install any of these three units, reverse the removal
procedure.

All of the printer Supplies are customer replaceable using the procedures
above. Some additional printer cleaning may be performed periodically by the
customer. No additional maintenance is required unless a tune up is required
after a million prints or longer.














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K40D Product Specification                                           Version 2.5
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3. K40D Print Engine Specifications

3.1 MEDIA SIZE AND WEIGHT

3.1.1 STANDARD INPUT SIZE AND SIZE SENSING

K40D input cassettes sense paper size and send the information to the
controller. The printer will print and sense the following paper sizes:

TABLE 3-1 MEDIA SENSING

<TABLE>
<CAPTION>

           -------------------------------------------- ------------- ------------ ------------
                                                         PAPER SIZE    CASSETTE
           CUT SHEET PAPER                                SENSING        INPUT        MODE
           -------------------------------------------- ------------- ------------ ------------
          <S>                                             <C>            <C>         <C>  
           Letter - 216mm x 279mm (8.5"x11")                Yes           U/L          S/D
           -------------------------------------------- ------------- ------------ ------------
           Legal - 216 x 356 (8.5" x 14")                   Yes           U/L          S/D
           -------------------------------------------- ------------- ------------ ------------
           Executive1 - 184 x 267 (7.25" x 10.5")           Yes           U/L           S
           -------------------------------------------- ------------- ------------ ------------
           Executive2 - 191 x 267 (7.5" x 10.5")             No           U/L           S
           -------------------------------------------- ------------- ------------ ------------
           Executive3 - 178 x 267 (7.0" x 10.5")             No           U/L           S
           -------------------------------------------- ------------- ------------ ------------
           B5 - 182 x 257 (7.2" x 10.1")                    Yes           U/L          S/D
           -------------------------------------------- ------------- ------------ ------------
           A4 - 210 x 297 (8.3" x 11.7")                    Yes           U/L          S/D
           -------------------------------------------- ------------- ------------ ------------
           A5 - 148 x 210 (5.8" x 8.3")                     Yes            U            S
           -------------------------------------------- ------------- ------------ ------------
           LABELS, TRANSPARENCIES, OR CARD STOCK*
           ------------------------------------------------------------------------------------
           A4 - 210mm x 297mm (8.3" x 11.7")                Yes            U            S
           -------------------------------------------- ------------- ------------ ------------
           Letter - 216 x 279 (8.5"x11")                    Yes            U            S
           -------------------------------------------- ------------- ------------ ------------
</TABLE>

           U:Upper, L:Lower, S: Simplex, D:Duplex
           * Transparencies and card stock must be fed from the upper cassette 
             only.

3.1.2 MEDIA WEIGHT AND GRAIN DIRECTION

Media for use in a printer is manufactured and identified by its basis weight.
In the U.S., it is the weight in pounds (lb.) of one 500-sheet ream in the
basic sheet size for that grade or type of media. There are two different
standard sheet sizes used in the calculation of basis weight. The first is a
bond-basis sheet size of 17" x 22" which is used for bond-type papers. The
second is an index-basis sheet size of 25.5" x 30.5" which is used for card
stock. In the metric system, basis weight is the weight of 1 square meter of
media expressed in grams per square meter (g/m2). 

The printer will print on the following media:

TABLE 3-2  MEDIA WEIGHT

<TABLE>
<CAPTION>

           ----------------- --------------- -------------------------------------- -------------
                             SIZE            WEIGHT                                     MODE
           ----------------- --------------- -------------------------------------- -------------
          <S>               <C>             <C>                                      <C>      
           Cut Sheet         All             60 - 90 g/m2  (16 - 24 lb. bond)         Simplex
           ----------------- --------------- -------------------------------------- -------------
           Cut Sheet         All  except B5  70 - 90 g/m2  (19 - 24 lb. bond)          Duplex
                             & Executive
           ----------------- --------------- -------------------------------------- -------------
           Card Stock        All  except B5  94 - 170  g/m2  (50 - 90  lb.  index,    Simplex
                             & Executive         25 - 45 lb. bond)
           ----------------- --------------- -------------------------------------- -------------
           Label Sheets      Letter, A4      120 - 160 g/m2  (32 - 42 lb. bond)       Simplex
           ----------------- --------------- -------------------------------------- -------------
           Transparencies    Letter, A4      170 - 225 g/m2  (45 - 60 lb. bond)       Simplex
           ----------------- --------------- -------------------------------------- -------------
</TABLE>

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The recommended grain direction for all sizes to avoid curl at the output
stacker is aligned along long side (T).

Recommended paper types include, but are not necessarily limited to, Xerox
4024, Komine, Hammermill Bond, and IBM MSP papers.

3.1.3 TRANSPARENCIES 

Transparencies used in the printer should meet the following specifications:

TABLE 3-3  TRANSPARENCIES SPECIFICATIONS

<TABLE>
<CAPTION>

           ---------------------  ---------------------------------
           ITEM                   SPECIFICATION
           ---------------------  ---------------------------------
<S>                             <C>
           Weight                 170 - 225 g/m2   (45 - 60 lb.)
           ---------------------  ---------------------------------
           Size                   Letter, A4
           ---------------------  ---------------------------------
           Thickness              225 um maximum
           ---------------------  ---------------------------------
           Clark Stiffness: vert. 40 - 75 cm3/100
                            horz. 50 - 80 cm3/100
           ---------------------  ---------------------------------
           Cutting Dimension      +/- .7 mm or less
           ---------------------  ---------------------------------
           Cutting Angle          1.0 mm or less
           ---------------------  ---------------------------------
           Curl                   +/- 5.0 mm or less
           ---------------------  ---------------------------------
</TABLE>

The reverse side must have a paper backing attached, preferably along the long
edge. The weight of the backing should not exceed 90 g/m2 (24 lb.). Kodak 101
and 3M 506A or 511A transparencies meet these requirements and are recommended
for use in Kentek printers.

3.1.4 LABELS

Labels used in the printer should meet the following specifications:

TABLE 3-4  LABEL SPECIFICATIONS

<TABLE>
<CAPTION>

           ------------------------------ -----------------------------------
           ITEM                           SPECIFICATION
           ------------------------------ -----------------------------------
          <S>                            <C>    
           Total Weight                   120 - 160 g/m2 (32 - 42 lb.)
           ------------------------------ -----------------------------------
           Size                           Letter, A4
           ------------------------------ -----------------------------------
           Base Coating                   12 - 18 g/m2
           ------------------------------ -----------------------------------
           Face Sheet Weight              51 +/- 4 g/m2
           ------------------------------ -----------------------------------
           Total Thickness                175 um maximum
           ------------------------------ -----------------------------------
           Smoothness (front)             70 - 200 Sheffield units
           ------------------------------ -----------------------------------
           Moisture Content               4.5 - 7.0 %
           ------------------------------ -----------------------------------
           Curl                           +/- 10 mm or less
           ------------------------------ -----------------------------------
           Cutting Dimension              +/- 0.5 mm or less
           ------------------------------ -----------------------------------
           Cutting Angle                  +/- 0.5 mm or less
           ------------------------------ -----------------------------------
           Placement Tolerance            +/- 0.5 mm or less
           ------------------------------ -----------------------------------
           Adhesive Strength              3 - 6 mm (ball tack)
           ------------------------------ -----------------------------------
           Initial Adhesive               600 min./550 min. g/25mm
           ------------------------------ -----------------------------------
           Normal Bonding Strength        600 min./300 min. sec.
                                          (25 deg. C, 65%RH @ 70C)
           ------------------------------ -----------------------------------
</TABLE>


Avery Laser Graphic Labels #5351 meet these requirements and are recommended
for use in Kentek printers.



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3.2 STANDARD INPUTS

Two paper cassettes are available with the standard capacities shown below.
Labels, transparencies, and card stock shall feed from the upper cassette only.

TABLE 3-5  STANDARD INPUT CAPACITIES

<TABLE>
<CAPTION>

           -------------------------- ------------- -----------------------------------------------
           INPUT TYPE                 POSITION      CAPACITY
           -------------------------- ------------- -----------------------------------------------
<S>                                 <C>            <C>             
           Primary Cassette           Upper         550  cut sheets of 75g/m2, 20 lb. paper,
                                                    or 75 sheets of transparencies or card stock,
                                                    or 50 sheets of adhesive labels.
           -------------------------- ------------- -----------------------------------------------
           Secondary Cassette         Lower         250   cut   sheets   of    75g/m2,    20   lb.
                                                    paper
           -------------------------- ------------- -----------------------------------------------
</TABLE>

Each input will have a user adjustable paper pick mechanism to simplify the use
of non-standard media. The pick pressure adjustments are behind the front
cover.

3.3 STANDARD OUTPUT UNIT

3.3.1 DESCRIPTION

The standard output unit stacks paper face down in sequential order. Paper is
stacked uniformly allowing for paper removal without re-stacking. The output
unit will detect a hopper full condition and signal the controller. 

The standard output capacity is 550 sheets of 75 g/m2 (20 lb.) paper with a job
offset shift of 12 +-3 mm

3.3.2 JOB OFFSET PERFORMANCE

The standard output unit does not provide jogging capability on the K40D.
Jogging is supported on the optional High Capacity Output however - refer to
section 7.3 for more details.

3.4 ENGINE THROUGHPUT

The print engine is designed to print paper at:

         Simplex           40 sheets/minute
         Duplex            40 images/minute

Performance (achieved throughput) is primarily a function of the controller and
the host data stream. Specific performance will depend on either the OEM
specified controller or on Kentek's attached printer controller performance
specification (refer to the RIGS Controller section).



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3.5 RELIABILITY

3.5.1 RATED DUTY CYCLE

The K40D engine duty cycle is rated as follows: 

         Engine Life                  9.0 million images 
         Standard duty cycle          150,000 images per month 
         High usage duty cycle        300,000 images per month

The standard duty cycle is defined as the engine life spread over a five year
installed period yielding 150,000 images per month. The printer is capable of
100% duty cycle usage so theoretically the printer will support any duty cycle.
A reasonable compromise between supply usage and duty cycle is 300,000 images
per month. The printer has been tested at the high usage duty cycle. Use of the
tune-up kit after approximately each one million prints may be required to
maintain paper path reliability over the full rated life.

3.5.2 POWER ON HOURS

The engine is rated for 36,000 lifetime power-on hours. Averaged over five
years, this results in an average of 600 power-on hours per month. In a
typical usage environment, the expected average is 220 power-on hours per month
(10 hours/day for 22 days/month).

3.5.3 PAPER PATH RELIABILITY

The paper path reliability is defined in terms of "interventions" in a given
number of prints. "Intervention error" shall mean a condition requiring that an
operator perform a recovery action, including but not limited to:

         -   Misfeeds from the cassette
         -   Jams in the paper path
         -   Mis-stacking in exit tray

For the following media a maximum of 1 intervention is allowed in the listed
number of prints for each paper type in the recommended and operational
environments. Standard papers includes Xerox 4024, Komine, Hammermill Bond, and
IBM MSP papers.

TABLE 3-6  PAPER PATH RELIABILITY

<TABLE>
<CAPTION>

      ------------------------------------ -------------------- ------------------ --------------- -----------
                                                                   # PRINTS -        # PRINTS -
                                                                   RECOMMENDED      OPERATIONAL
      MEDIA WEIGHT                                SIZE             ENVIRONMENT      ENVIRONMENT      PAPER
      ------------------------------------ -------------------- ------------------ --------------- -----------
<S>                                            <C>                  <C>               <C>           <C>      
      75g/m2 (20 lb.)                       Letter/A4                10000             5000        Standard
      ------------------------------------ -------------------- ------------------ --------------- -----------
      60g/m2 (16 lb.) & 90g/m2 (24 lb.)     Letter/A4                 5000             2500        Standard
      ------------------------------------ -------------------- ------------------ --------------- -----------
      All Weights                           Other paper sizes         1000              500        Standard
      ------------------------------------ -------------------- ------------------ --------------- -----------
      Label/Card                            All paper sizes           1000              500             ---
      ------------------------------------ -------------------- ------------------ --------------- -----------
      Transparencies                        Letter/A4                  100               50        IBM
      ------------------------------------ -------------------- ------------------ --------------- -----------
</TABLE>

3.5.4 MISCELLANEOUS MEDIA DAMAGE

Single or combined defects in the output tray (also called "non-intervention
defects"), when using 75 g/m2 bond paper, shall not exceed one in 1500 sheets
in the recommended operating environment, or one in 750 for the operational
environment, for multi-sheet feeds, bent corners, torn pages, wrinkles, or
other physical damage. Single or combined defects in the output hopper for
envelopes, labels, and transparencies, shall not exceed one in 30 sheets for
the best operating environment or in 15 sheets for the operational environment.





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3.5.5 MEAN TIME BETWEEN FAILURES

The MTBF, based on power-on hours (section 3.5.2) and duty cycle, is as
follows:

     High Usage:      [    ] hours    [    ] months
     Typical Usage:   [    ] hours    [    ] months

The mean time between critical equipment failure can be calculated (MIL STD
217E) for specific duty cycles and power-on hours by:

         MTBF   = 1/Lambda
         Lambda = (DF x LambdaP) + LambdaNP

         where:

         DF           = Duty Factor = printing hours / power on hours
                           High usage = 100%
                           Typical  = 9.47%
                             20.83 hours/month printing (for 50,000
                             images/mo.), divided by 220 power-on hours (22
                             days/month, 10 hours/day)
         LambdaP      = Printing only failures/hour = [            ]
         LambdaNP     = Non-printing and printing failures/hour = [         ] 
         Lambda       = Intrinsic failure rate 
         MTBF         = Mean time between failures in hours

Mean Pages between Failures (MPBF) can be found by taking the calculated MTBF
for a given duty factor and multiplying it by the number of images/mo. at that
assumed duty factor. For example, at the typical duty factor assumed above, the
MPBF would be ([      ] image/mo.) x ([    ] mo.) = [      ] images.

Failure rates do not include Supplies, which are customer replaceable.

3.5.6 MEAN TIME TO REPAIR

Mean time to repair most failures is less than 30 minutes.












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4. Kentek RIGS Controller Specifications



4.1 CONTROLLER MODELS

The RIGS controller will be available in two models, the RIGS-I+ (replacing the
RIGS-I), or Standard Controller, and the RIGS-II, or High Performance
controller. The choice of controller will depend upon processing power
requirements. 


The Standard Controller is designed to have more than adequate power to drive
the printer at rated speed while using the standard printer data streams. It
has the following features:

<TABLE>

        <S>                               <C>
         Microprocessor:                  IDT 3081, 25 Mhz. (replacing the original 20 Mhz. 3051)
         Control and Bit Map RAM:         12 MB standard, 64 MB max.
         Floating point coprocessor:      Internal
         Resolution capability:           240, 300, 400, 480, 600 dpi
</TABLE>

The High Performance Controller is designed to have more than adequate power to
drive the printer at rated speed while using page description languages such as
PostScript. It has the following features:

<TABLE>

<S>                                      <C>
         Microprocessor:                  IDT  3081, 50 MHz.
         Control and Bit Map RAM:         16 MB standard, 64 MB max.
         Floating point coprocessor:      Internal
         Resolution capability:           240, 300, 400, 480, 600 dpi
</TABLE>

Resolution is a function of both the print head and the controller. All five
resolutions listed above are possible on the K40D, though not all will
necessarily be productized. Standard base memory sizes are Kentek's planned
configurations for generic printers - OEM's may choose other base memory sizes.


4.2 PERFORMANCE

Performance (achieved throughput) depends on the print data, data stream, and
communications attachment, making it difficult to give an exact performance
specification. The required throughput for full speed printing at 40 ppm is
shown below.

<TABLE>

<S>                                         <C>  
         Pages/sec.:                        .6667
         Characters/page                    13.4K
         Image bytes/page                   1.05M
         Character throughput               8.9 characters/sec.
         Image throughput                   700 KB/sec.
</TABLE>

Throughput estimates assume no communication overhead is involved and no engine
and safe mode (error recovery) delays.

TABLE 4-1 ESTIMATED THROUGHPUT AT 300 DPI (THOUSAND OR MILLION BYTES PER SECOND)

<TABLE>
<CAPTION>

          -------------------- ------------ --------------- --------------- --------------- ---------------
                               DATA STREAM  PORTRAIT        LANDSCAPE       PORTRAIT        LANDSCAPE
          CONTROLLER                        CHARACTER       CHARACTER       IMAGE           IMAGE
          -------------------- ------------ --------------- --------------- --------------- ---------------
<S>                           <C>          <C>             <C>             <C>             <C> 
          Standard             PCL 4        12.0 k          12.0 k          450 k           90 k
                               ------------ --------------- --------------- --------------- ---------------
                               PMP          15 k            13.5 k          1.60 M          850 k
          -------------------- ------------ --------------- --------------- --------------- ---------------
          High Performance     PCL 4        24.0 k          24.0 k          898 k           179 k
                               ------------ --------------- --------------- --------------- ---------------
                               PMP          28.6 k          27.2 k          3.20 M          1.73 M
          -------------------- ------------ --------------- --------------- --------------- ---------------
</TABLE>




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These estimates are meant as a relative guide to performance; actual
performance may vary depending on installation and usage. Also, Kentek
continually increases the performance of its emulations through compiler
improvements and code improvements.

4.3 MEMORY

Unlike the K30, K40D memory is not segmented into display and program memory.
Total RIGS RAM memory consists of memory soldered on the controller board and
additional memory added via expansion slots. There are two sets of SIMM
expansion slots, A and B, each of which hold 2 SIMM modules. For reference,
Slot A is comprised of memory sockets SIMM2 and SIMM3 (as silkscreened on the
board) and Slot B is SIMM4 and SIMM5. SIMM's are standard 72 pin, 32-bit (no
parity) configurations. SIMM modules with parity (36 bit) can be used, though
the parity bits are not used. 

Several general rules apply to adding SIMM memory. Memory is interleaved:
SIMM's must be added in pairs. Also, if a double-sided module (or a single
single-sided module that uses two chip-select signals) is used in Slot A, Slot
B is not usable.

Either controller model will handle the following memory configurations.
Although a variety of configurations is possible, only those that indicate
"Supported" are supported and tested in software.

TABLE 4-2  MEMORY CONFIGURATIONS

<TABLE>
<CAPTION>

        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        SIMM TYPE(S)                    SOLDERED ON     A SLOTS (2)   B SLOTS (2)      TOTAL        SUPPORTED
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
       <S>                               <C>            <C>            <C>          <C>           <C>     
        2 MB (256K depth)                   8 MB           4 MB            -           12 MB           Yes
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        4 MB                                8 MB           8 MB            -           16 MB           Yes
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        4 MB                                8 MB           8 MB           8 MB         24 MB           Yes
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        8 MB (DS)                           8 MB           16 MB           -           24 MB           Yes
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        8 MB  (DS) + 4 MB                   8 MB           16 MB          8 MB         32 MB            NO
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        16 MB                               8 MB           32 MB           -           40 MB           Yes
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        8 MB (DS)                           8 MB           16 MB         16 MB         40 MB            NO
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        4 MB + 16 MB                        8 MB           8 MB          32 MB         48 MB            NO
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        16 MB + 16 MB                       8 MB           32 MB         32 MB         64 MB           Yes
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
        32 MB (DS)                          8 MB           64 MB           -           64 MB           Yes
        ------------------------------ --------------- -------------- ------------- ------------- ---------------
</TABLE>

         DS = Double-sided SIMM (double-sided can only go in slot A)

     Note that the last two combinations only result in a usable 64MB of
     memory, not 72MB.
     
     Newer RIGS boards allow either soldered-on base memory or an additional
     set of SIMM sockets that would allow customers to take a printer with no
     memory and add their own SIMM's.

The following memory vendors have been approved for use on K40D. These are
provided for reference and should be verified before using.

     2 MB SIMM (512K x 32) 
     --------------------
     Century       32512S-07M 

     4 MB SIMM (1M x 32) 
     --------------------  
     Marco         SA584132-70G 

     8 MB SIMM (2M x 32)  
     --------------------
     Marco         GS584232-70G
     Marco         MR584232-70G 

     16 MB SIMM (4M x 32) 
     --------------------
     Marco          SA5843216-70G 

     32 MB SIMM (8M x 32) 
     --------------------
     Marco          SA5883216-70G






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4.4 INTERNAL DISK STORAGE

The controller has a floppy disk controller for diskette software upgrades and
maintenance, and a SCSI interface to support hard disks. The standard K40D
storage configuration will be:

         Floppy Diskettes           3.5", 1.44 MB (formatted)
         Hard disk                  3.5", 170 MB (size subject to change)

Kentek floppy file format is non-standard, requiring the use of Kentek disk
utilities for file operations. The K40D floppy format is not the same as used
on the K30. 

The SCSI bus is capable of 5 Megabytes/second burst and approximately TBD
MB/sec. sustained throughput. Currently, Kentek supports the following Quantum
ProDrive Low Profile series of hard disks:
 
         170 S             170 MB formatted (ProDrive ELS)
         240 AT/S          240 MB formatted
         540 MB            540 MB formatter

Kentek currently stocks the 540 MB hard disk, but this is subject to change as
disk drive sizes continue to evolve. To install other hard disks, a hard disk
installation kit is available. The other hard disk models are readily available
from commercial suppliers.

4.5 FLEXIO I/O

The K40D implements a modular approach for support of host communication
interfaces. Communication functions are packaged on modular cards that plug
into the RIGS controller motherboard. This approach allows new interfaces to be
developed independent of the RIGS controller and for multiple types of
connections to be supported by the K40D. Kentek calls this approach to
communication interfaces FlexIO, though it is also known as modular I/O or MIO.
Refer to the Kentek Modular I/O Specifications for more details.

4.5.1 HOST INTERFACES

The printer connects to a host through an interface card attached to the
controller with communications connectors at the rear of the printer. Power to
the interface card is provided by the controller connector. Up to two interface
cards may be added.

<TABLE>
<CAPTION>

         INTERFACE CARDS            SCHEDULE PRIORITY     DATA STREAMS
         ---------------            -----------------     ------------
        <S>                           <C>              <C>                    
         Net-Attach (Ethernet)              1                 ASCII
         Direct-Attach                      1                 ASCII
         SCSI                               2                 ASCII
         Serial RS-422                      3                 ASCII
         IBM Token Ring                     4                 ASCII
         IBM Twinax/Coax                    4                 ASCII + IPDS
         IBM Channel                        5                 ASCII + IPDS
</TABLE>

Schedule priority 1 implies availability with initial release. Schedules are
subject to change without warning. ASCII data streams include PCL5, and
PostScript.




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4.5.2 PHYSICAL DIMENSIONS

I/O cards plug in to the controller from the rear of the printer. There is room
for two cards, side by side, overlapping the RIGS controller from the rear. The
slot on the left, as seen from the rear of the printer, is designated as Slot A
and the slot on the right is Slot B. The I/O connectors will face to the rear
so that cables exit directly to the rear of the printer. When designing the
cards, the designer must take in to account the clearance required when the
rear cover is opened. Size of the I/O cards is 170 x 204 mm.

                                   [GRAPHIC]

                     FIGURE 4-1: FLEXIO LOCATION - TOP VIEW




                                   [GRAPHIC]

                  FIGURE 4-2: FLEXIO LOCATION - LEFT SIDE VIEW


4.5.3 ELECTRICAL INTERFACE

The connector is a 96 pin DIN, Type R female connector conforming to DIN 41612
specifications. ELCO part number 20-8477-096-002-025 meets requirements.
Detailed electrical, signal, and mechanical specifications are described in
Kentek Modular I/O Specifications.

4.5.4 MULTIPLE ATTACHMENTS

When two I/O cards are installed, both interface cards may be active
simultaneously, supporting up to 3 communications channels simultaneously. A
channel refers to a physical connection and data stream - a single modular card
can have multiple channels on it. For example, the Direct-Attach card supports
both serial and parallel interfaces - if both are being used, this would
consume 2 of the 3 total available channels. On the other hand, the Ethernet
card will be capable of being configured as multiple IP address and appear on
the network as multiple virtual printers, but has only one physical connection
and therefore only counts as one channel . 



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When no job is active, the controller will poll both interfaces for the next
job. When the data stream has a definite end-of-job delimiter, the controller
will not switch interfaces until the end of job is reached. Otherwise, the
controller will poll the other interface when the attachment time-out has
elapsed. The attachment time-out parameter is set in soft configuration mode.

         Default Attachment Time-out (for multiple attachments)      60 seconds

4.5.5 NET-ATTACH CARD

The Ethernet FlexIO card interfaces directly to the K40D bus, unlike the K30
which interfaced through an RS-422 port. The Ethernet card will have 3
connectors on it:

         10baseT (twisted pair)
         10base2 (ThinNet)
         10base5 (AUI)

Only one connector will be active at a time. Active connector will
automatically be sensed by software. 

REMAINING SPECS TBD.

4.5.6 DIRECT-ATTACH CARD

The Direct-Attach card is intended for use in non-networked personal computer
environments. It will contain a both a serial and parallel interface:

         RS-232 Serial     DB-25
         IEEE 1284-B       Centronics style connector (36 pin)

The RS-232 and parallel connectors may be active simultaneously. Connector
pinouts are given in the following sections. 

The K40D supports dual Direct-Attach cards with some limitations. The first is
that only 3 of the 4 possible connections (2 serial, 2 parallel) are usable
simultaneously. By definition, two parallel ports and a single serial port are
supported. Dual serial ports are not supported. From a user viewpoint, the two
possible parallel ports will be identified as Parallel A and Parallel B,
corresponding to the FlexIO card slot locations.

SUPPORT FOR DATAPRODUCTS PARALLEL IS NOT INCLUDED ON THE DIRECT-ATTACH CARD AT
THIS TIME, THOUGH PROVISIONS ARE ON THE CARD FOR INCLUDING THIS INTERFACE AT A
LATER TIME.

4.5.6.1 RS-232 CONNECTOR

Connector type:    DB 25 (printer female)

Signal levels and functions are described in detail in the EIA Standard 
RS-232-C.



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TABLE 4-3  RS-232 PINOUT

<TABLE>
<CAPTION>

           ------- ------------- ------------------------------- ------------
            PIN    NAME          FUNCTION                        SOURCE
           ------- ------------- ------------------------------- ------------
           <S>    <C>            <C>                             <C>
             1     [  ]          [            ]
           ------- ------------- ------------------------------- ------------
             2     [  ]          [            ]                  DTE
           ------- ------------- ------------------------------- ------------
             3     [  ]          [            ]                  DCE
           ------- ------------- ------------------------------- ------------
             5     [  ]          [            ]                  DTE
           ------- ------------- ------------------------------- ------------
             5     [  ]          [            ]                  DCE
           ------- ------------- ------------------------------- ------------
             7     [  ]          [            ]      
           ------- ------------- ------------------------------- ------------
             8     [  ]          [            ]                  DCE
           ------- ------------- ------------------------------- ------------
             15    [  ]          [            ]                  DCE
           ------- ------------- ------------------------------- ------------
             17    [  ]          [            ]                  DCE
           ------- ------------- ------------------------------- ------------
             20    [  ]          [            ]                  DTE
           ------- ------------- ------------------------------- ------------
             24    [  ]          [            ]                  DTE
           ------- ------------- ------------------------------- ------------
</TABLE>

Protocol : Synchronous or asynchronous serial

Asynchronous Parameters

         Baud rate:        1200-38,400 baud
         Parity:           even, odd, none, ignore
         Data bits:        7,8
         Stop bits:        1
         Pacing:           DTR, Xon/Xoff, both
         Force DTR         on, off

Pacing is controlled either by hardware (DTR) or software (Xon/Xoff). Both
pacing modes may be selected so that the host port may be configure either way.
In Robust mode, Xon is sent about once per second while the printer is idle to
insure that the host is aware that the printer is ready to accept data. 

Factory default communication options are:

         Serial Parameters :
                  9600 baud
                  8 bit data
                  1 stop bit
                  Both DTR and Xon/Xoff pacing

4.5.6.2 IEEE 1284 PARALLEL PORT CONNECTOR

Signal levels - IEEE 1284 Level 1 
Data modes - Compatible, Nibble, Byte, ECP
Connector type: 1284-B Receptacle (36 pin, Amp 555119-1 or equivalent) 
Signal functions are described in detail in the IEEE Standard 1284-xxxx.









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TABLE 4-4  IEEE 1284 PINOUT

<TABLE>
<CAPTION>

           ------- ------------------------- ---------------------------------------------- --------------
            PIN    NAME                      FUNCTION                                       SOURCE
           ------- ------------------------- ---------------------------------------------- --------------
            <S>    <C>                      <C>                                             <C>             
             1     [  ]                      [           ]                                  Host
           ------- ------------------------- ---------------------------------------------- --------------
             2     [  ]                      [           ]                                  Bi-di
           ------- ------------------------- ---------------------------------------------- --------------
             3     [  ]                      [           ]                                  Bi-di
           ------- ------------------------- ---------------------------------------------- --------------
             4     [  ]                      [           ]                                  Bi-di
           ------- ------------------------- ---------------------------------------------- --------------
             5     [  ]                      [           ]                                  Bi-di
           ------- ------------------------- ---------------------------------------------- --------------
             6     [  ]                      [           ]                                  Bi-di
           ------- ------------------------- ---------------------------------------------- --------------
             7     [  ]                      [           ]                                  Bi-di
           ------- ------------------------- ---------------------------------------------- --------------
             8     [  ]                      [           ]                                  Bi-di
           ------- ------------------------- ---------------------------------------------- --------------
             9     [  ]                      [           ]                                  Bi-di
           ------- ------------------------- ---------------------------------------------- --------------
             10    [  ]                      [           ]                                  Printer
           ------- ------------------------- ---------------------------------------------- --------------
             11    [  ]                      [           ]                                  Printer
           ------- ------------------------- ---------------------------------------------- --------------
             12    [  ]                      [           ]                                  Printer
           ------- ------------------------- ---------------------------------------------- --------------
             13    [  ]                      [           ]                                  Host
           ------- ------------------------- ---------------------------------------------- --------------
             14    [  ]                      [           ]                                  Host
           ------- ------------------------- ---------------------------------------------- --------------
             15    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             16    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             17    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             18    [  ]                      [           ]                                  Printer
           ------- ------------------------- ---------------------------------------------- --------------
             19    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             20    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             21    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             22    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             23    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             24    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             25    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             26    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             27    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             28    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             29    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             30    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             31    [  ]                      [           ]                                  Host
           ------- ------------------------- ---------------------------------------------- --------------
             32    [  ]                      [           ]                                  Printer
           ------- ------------------------- ---------------------------------------------- --------------
             33    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             34    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             35    [  ]                      [           ]        
           ------- ------------------------- ---------------------------------------------- --------------
             36    [  ]                      [           ]                                  Host
           ------- ------------------------- ---------------------------------------------- --------------
</TABLE>

Several signals are ignored in Compatible mode are ignored. They were defined
for local dot matrix printers and are not appropriate for a page printer.
Signals PE (paper end) and ERR (error) may be selectively enabled or disabled
via the front panel in configuration mode.


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4.5.6.3 DATAPRODUCTS PARALLEL CONNECTOR

THE DATAPRODUCTS INTERFACE IS NOT CURRENTLY SUPPORTED ON THE DIRECT-ATTACH CARD
- - THIS INFORMATION PROVIDED ONLY FOR POSSIBLE FUTURE REFERENCE. 

The Dataproducts and Centronics parallel connections share a single data path
and are not simultaneously usable.

     Ready - A printer generated signal which indicates that the printer is
         ready. READY is true only when the following is true:

         -     Power and DC voltage are on.
         -     All interlocks are closed.
         -     Paper has been loaded.
         -     No printer fault exists.
         -     No error status on display.

     On-line - A printer generated signal which indicates that the printer will
         accept data. Online is active only when the following is true:
         -      No error status on display.
         -      The printer is ready to accept data from the host.

     Demand - A printer generated signal which synchronizes data transmission
         between the printer and the host system. When the printer is READY and
         ONLINE the DEMAND signal requests a character from the host. DEMAND
         remains active until the STROBE is received and after the data
         character has been loaded into the printer. This cycle starts over
         again for the next character.

     Strobe - A host generated signal which defines when information on the
         data lines is stable and may be stored in the printer buffer. Each
         time a STROBE occurs, the printer samples the data lines. After the
         data lines have been sampled, the DEMAND signal will go inactive.

     Data lines - Host generated data lines carry print data codes and format
         control codes. Data is only valid when the STROBE signal is active.

     Parity - A host generated signal the checks the parity of data or data and
         PI line. (not implemented) 

     Buffer Clear - A host generated signal clears the printer buffer when 
         active. (not implemented)

     Line(s) only used with line printer emulation:

         Paper Instruction (PI) - bit used to enable vertical forms table 
         definition and movement

     Printer generated lines that maintain one state (these signals have no 
     meaning on the Kentek printer but will be generated to satisfy host's 
     needs):

     PERR                  - parity error
     ID0                   - Printer identification bit 0
     ID1                   - Printer identification bit 1
     TOF                   - Top of form
     BOF                   - Bottom of form
     VFURDY                - VFU ready
     VFU VERIFY            - VFU Verify

PINOUT FOR THE DATAPRODUCTS INTERFACE IS REQUIRED.

4.6 DATA STREAMS AND PDLS

The standard emulations for K40D is PCL5 (including PCL4 support as defined by
PCL5). PostScript is optionally available. Refer to the RIGS Software
Specification for details.



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5. Third-Party RIP Controller Interface

This section provides physical and electrical information that can be used by a
third-party to design an alternative RIP controller for the K40D, in place of
the RIGS controller. Since a third-party controller would have to interface to
the rest of the printer in a similar manner to the RIGS controller, RIGS
physical layout and electrical connections are presented here. These should aid
a third-party's development efforts.

5.1 OVERVIEW

K40D will use the AVPCL (Advanced Video Printer Control Logic) board for engine
control. The video interface to the OEM controller are defined in Kentek K40D
Video Input Interface Specification. The AVPCL will be approximately the same
size as the PCL in the K30. Performance (achieved printer throughput) is a
function of the capabilities of the OEM controller. The AVPCL drives the
printer at a 40 page per minute process speed and feeds pages on command from
the OEM controller. 

The AVPCL will include a serial interface (IIC) to paper output handling
equipment such as sorters. This interface will share the current HCO connector.

The AVPCL will also support the concept of supply serialization. Upon
installation of a serialized supply, the AVPCL will log in NVRAM and report to
the controller the serial number, print count, date, and time. The AVPCL will
not support installation of unserialized supplies.

The developer toner control system has been modified from K30 to include more
intelligent processing on the AVPCL board. Toner density will be controllable
from the operator panel. Thus, the K40D developers are not backwards compatible
with K30 printers.

5.2 PHYSICAL DIMENSIONS

The RIGS controller outline is shown below. Minor variation is possible;
contact Kentek engineering for details.






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                                   [GRAPHIC]




                            FIGURE 5-1: RIGS LAYOUT



5.3 CONNECTORS

There are a number of connectors on the RIGS controller which attach to other
components in the system:

TABLE 5-1  RIGS CONNECTORS

<TABLE>
<CAPTION>

          --------------------- ---------------- ----------------------------- --------------------------
          CABLE                 PINS             CONNECTOR                     MANUFACTURER
          --------------------- ---------------- ----------------------------- --------------------------
         <S>                   <C>              <C>                          <C>                   
          Power                 11               AMP 172034-1                  Amp
          --------------------- ---------------- ----------------------------- --------------------------
          AVPCL                 30               HIF 3BA-34PA-2.54DSA          Hirose
          --------------------- ---------------- ----------------------------- --------------------------
          FlexIO I/O (2)        96               DIN 41612 type R plug
                                                 7296-50C5TH                   3M
          --------------------- ---------------- ----------------------------- --------------------------
          Diskette (FDC)        34               HIF 3BA-34PA-2.54DSA          Hirose
          --------------------- ---------------- ----------------------------- --------------------------
          SCSI                  50               HIF 3BA-50PA-2.54DSA          Hirose
          --------------------- ---------------- ----------------------------- --------------------------
</TABLE>




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5.3.1 AVPCL CONNECTOR

The AVPCL connector carries print engine command, status, and video data as
differential signals using ATT 41L series drivers and receivers. It also
carries the IIC bus. Signal names listed below are relative to the AVPCL.

TABLE 5-2  AVPCL PIN ASSIGNMENTS

<TABLE>
<CAPTION>

          --------- ------------------- ------------------------- -------------------------
          PIN       SIGNAL              FUNCTION                  SOURCE
          --------- ------------------- ------------------------- -------------------------
        <S>        <C>                  <C>                       <C>                
          1         [ ]                 [ ]                       VPCL
          --------- ------------------- ------------------------- -------------------------
          2         [ ]                 
          --------- ------------------- ------------------------- -------------------------
          3         [ ]                 [ ]                       Controller
          --------- ------------------- ------------------------- -------------------------
          4         [ ]                 
          --------- ------------------- ------------------------- -------------------------
          5         [ ]                 [ ]                       Controller
          --------- ------------------- ------------------------- -------------------------
          6         [ ]                 
          --------- ------------------- ------------------------- -------------------------
          7         [ ]                 [ ]                       VPCL
          --------- ------------------- ------------------------- -------------------------
          8         [ ]                 
          --------- ------------------- ------------------------- -------------------------
          9         [ ]                 [ ]                       Controller
          --------- ------------------- ------------------------- -------------------------
          10        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          11        [ ]                 [ ]                       VPCL
          --------- ------------------- ------------------------- -------------------------
          12        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          13        [ ]                 [ ]                       Controller
          --------- ------------------- ------------------------- -------------------------
          14        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          15        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          16        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          17        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          18        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          19        [ ]                
          --------- ------------------- ------------------------- -------------------------
          20        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          21        [ ]                 [ ]                       
          --------- ------------------- ------------------------- -------------------------
          22        [ ]                 [ ]                       
          --------- ------------------- ------------------------- -------------------------
          23        [ ]                 [ ]                       
          --------- ------------------- ------------------------- -------------------------
          24        [ ]                 [ ]                       
          --------- ------------------- ------------------------- -------------------------
          25        [ ]                 [ ]                       VPCL
          --------- ------------------- ------------------------- -------------------------
          26        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          27        [ ]                 [ ]                       Controller
          --------- ------------------- ------------------------- -------------------------
          28        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          29        [ ]                 [ ]                       VPCL
          --------- ------------------- ------------------------- -------------------------
          30        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          31        [ ]                 [ ]                       Host
          --------- ------------------- ------------------------- -------------------------
          32        [ ]                 
          --------- ------------------- ------------------------- -------------------------
          33        [ ]                 [ ]                       Host
          --------- ------------------- ------------------------- -------------------------
          34        [ ]                 
          --------- ------------------- ------------------------- -------------------------
</TABLE>


5.3.2 FLEXIO I/O CONNECTORS

The FlexIO I/O connectors are used for user-installable communication cards.
They are not required on OEM controllers if Kentek I/O cards will not be used.
Refer to the RIGS Controller section for more information.



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5.3.3 SCSI CONNECTOR

The SCSI connector is used for connection to the internal hard disk and may not
be required on OEM controllers. Single-ended SCSI-1 signals are used. Pinout
conforms to SCSI-1 unshielded internal low-density receptacle requirements.

5.3.4 FLOPPY DISK CONNECTOR

TABLE 5-3  FLOPPY DISK CONNECTOR PIN ASSIGNMENTS

<TABLE>
<CAPTION>

          --------------------- -------- ------------------- ---------
          SIGNAL                PIN      SIGNAL              PIN
          --------------------- -------- ------------------- ---------
        <S>                    <C>      <C>                  <C>
          [ ]                   1        [ ]                 18
          --------------------- -------- ------------------- ---------
          [ ]                   2        [ ]                 19
          --------------------- -------- ------------------- ---------
          [ ]                   3        [ ]                 20
          --------------------- -------- ------------------- ---------
          [ ]                   4        [ ]                 21
          --------------------- -------- ------------------- ---------
          [ ]                   5        [ ]                 22
          --------------------- -------- ------------------- ---------
          [ ]                   6        [ ]                 23
          --------------------- -------- ------------------- ---------
          [ ]                   7        [ ]                 24
          --------------------- -------- ------------------- ---------
          [ ]                   8        [ ]                 25
          --------------------- -------- ------------------- ---------
          [ ]                   9        [ ]                 26
          --------------------- -------- ------------------- ---------
          [ ]                   10       [ ]                 27
          --------------------- -------- ------------------- ---------
          [ ]                   11       [ ]                 28
          --------------------- -------- ------------------- ---------
          [ ]                   12       [ ]                 29
          --------------------- -------- ------------------- ---------
          [ ]                   13       [ ]                 30
          --------------------- -------- ------------------- ---------
          [ ]                   14       [ ]                 31
          --------------------- -------- ------------------- ---------
          [ ]                   15       [ ]                 32
          --------------------- -------- ------------------- ---------
          [ ]                   16       [ ]                 33
          --------------------- -------- ------------------- ---------
          [ ]                   17       [ ]                 34
          --------------------- -------- ------------------- ---------
</TABLE>

5.3.5 POWER CONNECTOR

TABLE 5-4  POWER CONNECTOR PIN ASSIGNMENTS

<TABLE>
<CAPTION>

          ------- ------------------------------ ------ -------------------------- ------ ---------------------
          Pin     Assignment                     Pin    Assignment                 Pin    Assignment
          ------- ------------------------------ ------ -------------------------- ------ ---------------------
          <S>    <C>                           <C>     <C>                       <C>     <C>   
          1       [ ]                            5      [ ]                        9      [ ]            
          ------- ------------------------------ ------ -------------------------- ------ ---------------------
          2       [ ]                            6      [ ]                        10     [ ] 
          ------- ------------------------------ ------ -------------------------- ------ ---------------------
          3       [ ]                            7      [ ]                        11     [ ]           
          ------- ------------------------------ ------ -------------------------- ------ ---------------------
          4       [ ]                            8      [ ]      
          ------- ------------------------------ ------ -------------------------- ------ ---------------------
</TABLE>






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5.4 POWER SUPPLY

Power supply current is split between the controller and any additional
communications cards.

TABLE 5-5  K40D POWER SUPPLIES

<TABLE>
<CAPTION>

          ------------------ ------------------------- --------------------------
          Voltage            Tolerance                 Current
          ------------------ ------------------------- --------------------------
         <S>                <C>                     <C>     
          +5V                +-5%                      8.5 Amps
          ------------------ ------------------------- --------------------------
          +12V               +-10%                     500 ma
          ------------------ ------------------------- --------------------------
          -12V               +-10%                     100 ma
          ------------------ ------------------------- --------------------------
</TABLE>


5.5 CONTROLLER COOLING

Forced air cooling is provided by a fan in the controller enclosure. Air flow
is TBD.













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6. K40D Standard Operator Panel

6.1 DESCRIPTION


The standard operator panel consists of eight touch-sensitive function keys,
three message indicators, a four line by 20 character LCD display, and an alarm
with volume control dial.

         STANDARD OPERATOR PANEL FEATURES:

          Display Type               LCD
          Display Area               4 lines by 20 characters
          Keypad                     8 key membrane keypad
          Indicators                 3 LED indicators
          Width                      190 mm
          Height                     80 mm


                                   [GRAPHIC]

                        FIGURE 6-1: K40D OPERATOR PANEL





















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PANEL COLORS

<TABLE>

           ------------------------------- -------------------------
         <S>                              <C>
           Panel Background                PMS Grey #433
           ------------------------------- -------------------------
           Window highlight frame          PMS Cool Grey #11
           ------------------------------- -------------------------
           Window frame background         Opaque black
           ------------------------------- -------------------------
           Button background               PMS Cool Grey #11
           ------------------------------- -------------------------
           Buttons                         PMS Cool Grey #7
           ------------------------------- -------------------------
           Button Lettering                PMS Cool Grey #3
           Indicator Lettering             PMS Grey #3
           ------------------------------- -------------------------
           ONLINE, MENU Symbols            PMS Green #360
           Arrow Symbols                   White
           All Other Symbols               PMS Grey #3
           ------------------------------- -------------------------
</TABLE>

PANEL INDICATORS

<TABLE>
<CAPTION>

           -------------------- ------------------------------
           LETTERING            LED COLOR
           -------------------- ------------------------------
         <S>                   <C>
           READY                Green
           -------------------- ------------------------------
           IN PROCESS           Green
           -------------------- ------------------------------
           ATTENTION            Amber
           -------------------- ------------------------------
</TABLE>


6.2 FUNCTION KEYS

The actual function of the function keys and LCD display may be programmed by
the OEM customer. Button presses may result in messages to the host depending
on the communications connection and the emulation.

     ONLINE
         Toggles between the Ready state and the off-line state.

     FORM FEED
         Prints data currently existing in the printer's bit map and sends a
         message to the host if in the JOB IN PROCESS state; otherwise,
         ignored.

     MENU
         Enter the menu state.

     STATUS
         Displays current information on supply status. The STATUS key may be
         pressed at any time.

     Up Arrow
         Scrolls to previous option on LCD display.

     Down Arrow
         Scrolls to next option on LCD display.

     Right Arrow
         Allows the operator to select a menu configuration option.

     Left Arrow
         Moves back a level in the menu structure.



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6.3 MESSAGE INDICATORS

There are three lighted message indicators which display printer status when
lit as follows:

     READY
         -    Green - the printer is on, initial and operational diagnostic
              programs are complete, microcode is loaded, and printer is ready
              to print.
         -    Flashing green - the printer is warming up or performing microcode
              load and diagnostics

     ATTENTION
         Operator intervention required to add paper, clear a jam, replace
         Supplies, etc., when this yellow indicator is lit solid. Flashing
         during machine check condition.

     IN PROCESS
         Active when the printer is receiving data, executing datastream
         instructions, or printing.













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6.4 LCD DISPLAY

The LCD display has 4 lines of 20 characters each and serves as a primary
interface between the printer and the user. The display can be used for
following functions:

     - indicates the size of the paper when a cassette is inserted 
     
     - displays printer status such as warming up, online, and job in process

     - displays printer error messages and error codes such as paper out, toner
       out, jam, and machine check

     - serves as a copy counter for multiple copy printing
    
     - displays menu options in normal, configuration, and diagnostics mode

Up to eight special characters may be uploaded to the display by the
controller. The display is also Kana-capable for display of Japanese
characters.

6.5 ALARM

The alarm sounds whenever an indicator lights or during a system malfunction. A
short half-second beep indicates good status and a three second alarm indicates
an error. The alarm volume dial is located on the right side of the control
panel and is accessible by opening the front cover.

6.6 MECHANICAL DATA

The operator panel is mechanically interchangeable with the existing K30
operator panel. Electrical connections are quite different.

6.7 ELECTRICAL CONNECTION

Either one of two separate data connections may be used: on the primary
connection, the signals and signal timing comply with the Signetics/Phillips
IIC bus; on the secondary connection, RS-422 differential levels and
asynchronous data protocol are used with eight data bits, one stop bit, no
parity, and 9600 baud. The standard printer is cabled only for IIC. The RS-422
cable must be installed separately when used by OEM controllers.

TABLE 6-1  RS-422 PIN ASSIGNMENTS

<TABLE>
<CAPTION>

           -------------- ------------- --------------------------------------------
           PIN            SIGNAL        DEFINITION
           -------------- ------------- --------------------------------------------
          <S>        <C>               <C>
           1              [ ]           [ ]                 
           -------------- ------------- --------------------------------------------
           2              [ ]           [ ]          
           -------------- ------------- --------------------------------------------
           3              [ ]           [ ]          
           -------------- ------------- --------------------------------------------
           4              [ ]  
           -------------- ------------- --------------------------------------------
           5              [ ]           [ ]               
           -------------- ------------- --------------------------------------------
           6              [ ] 
           -------------- ------------- --------------------------------------------
           7              [ ]           [ ]        
           -------------- ------------- --------------------------------------------
           8              [ ]   
           -------------- ------------- --------------------------------------------
           9              [ ]           [ ]            
           -------------- ------------- --------------------------------------------
           10             [ ] 
           -------------- ------------- --------------------------------------------
</TABLE>



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TABLE 6-2  SIGNETICS IIC PIN ASSIGNMENTS

<TABLE>
<CAPTION>

           -------------- -------------------------
           PIN            SIGNAL
           -------------- -------------------------
          <S>             <C>               
           1              [ ]
           -------------- -------------------------
           2              [ ]
           -------------- -------------------------
           3              [ ]
           -------------- -------------------------
           4              [ ]
           -------------- -------------------------
           5              [ ]
           -------------- -------------------------
           6              [ ]
           -------------- -------------------------
           14             [ ]
           -------------- -------------------------
           15             [ ]
           -------------- -------------------------
           17             [ ]
           -------------- -------------------------
           18             [ ]
           -------------- -------------------------
           20             [ ]
           -------------- -------------------------
</TABLE>

         IIC PWB connector - HIF 3BA-20PA-2.54DSA
         RS-422 PWB connector - Hirose HIF 3BA-10PA-254DSA

6.8 MENU DEFINITION

The following definition is a general overview of the default definition
provided by Kentek. It may be changed by modifying the control program residing
on disk. 

NOTE - THIS SECTION IS STILL UNDER DEVELOPMENT AND IS SUBJECT TO SIGNIFICANT
       CHANGE.

6.8.1 READY STATE

The default state is Ready state. In this state, the following messages may be
displayed:

         READY
         REMOVE PRINTS
         PAPER SIZE - (new paper size inserted)
         PAPER JAM - (location)
         ADD PAPER - (cassette)
         ADD TONER 
         XXX - (error message, where xxx corresponds to the error code)

Depressing ON LINE from the ready state stops printing pages, and enters idle
state. The controller will continue to receive data until the communications
buffer is full. 

Correcting any intervention condition while in ready state will immediately
return to Online mode.

6.8.2 MENU STATE

To select an option from the menu, use the UP and DOWN keys to move the option
to the top line of the display. Press Right Arrow to select the desired option.

     READY                   Return to ready state.
     CONFIGURATION           See below
     DIAGNOSTICS             Upon selection, service diagnostics mode will be 
                             entered (see below).


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6.8.3 CONFIGURATION MODE

This state enables the operator to edit, save, print, and execute various
printer emulation and communications settings. In the default configuration
mode provided by Kentek, a page will print displaying configuration mode
options and key functions upon entering this mode.

6.8.4 SERVICE DIAGNOSTICS MODE

Diagnostics mode allows service personnel to access diagnostic software to
analyze the printer's operating condition. The keys have the following
definition while in this mode.

         MENU                - Enters/Exits Menu mode
         Down Arrow          - increment to the next procedure
         Up Arrow            - decrement to the previous procedure
         Right arrow         - Select a menu option
         Left Arrow          -
         ONLINE              - no operation
         FORM FEED           - no operation
         STATUS              - no operation

For safety reasons, service documentation is required to use this mode. No help
or prompting will be provided on the menu.















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7. Optional Accessories

7.1 2500 SHEET FEEDER

This input unit is designed to reduce the operator workload for high usage
environments and to allow additional paper selection options for special
printing needs. This unit replaces the lower cassette. Labels, transparencies,
card stock, and envelopes may not be fed from the lower input.

7.1.1 CAPACITY

<TABLE>
<CAPTION>
          --------------------------- ---------------- ------------------------
          INPUT                       CAPACITY         PAPER SIZES
          --------------------------- ---------------- ------------------------
<S>                                   <C>              <C>             
          Hopper                      2500 (20 lb.)    A4, Letter, Legal
          --------------------------- ---------------- ------------------------
</TABLE>

7.1.2 PAPER FEED RELIABILITY

Paper path reliability criteria described previously apply when this unit is
installed.

7.1.3 VOLTAGES

The HCI has a universal power supply for

         100-127V        50/60 Hz with UL, CSA, FCC agency marks 

         200-240V        50/60 Hz with TUV-GS, FTZ agency marks.

All K40D safety approvals apply.

7.1.4 DOCUMENTATION

User documentation is shipped with the unit. It should be added to the K40D
User Guide when the unit is installed.

7.2 ENVELOPE FEEDERS

7.2.1 75 ENVELOPE CASSETTE

The Envelope Cassette holds 75 - 100 envelopes and has continuously adjustable
envelope guides for feeding any envelope within the maximum and minimum size
limitations. Input capacity varies as a function of the paper basis weight and
envelope flatness. The specifications above were determined using commonly
available standard size envelopes consisting of the basis weight range shown
below. 

The Envelope Cassette is the same size as the standard A4/letter secondary
(upper) paper cassette and is installed in place of the upper cassette. It is
purely mechanical - no external electrical power source is required. Diagrams
for loading instructions are molded into the cassette. No additional
documentation is required.


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7.2.2 ENVELOPE SPECIFICATIONS

<TABLE>
<CAPTION>
          --------------------------- --------------------- --------------------
                                      MINIMUM               MAXIMUM
          --------------------------- --------------------- --------------------
<S>                                   <C>                   <C>   
          Envelope Width              98 mm                 165 mm
          --------------------------- --------------------- --------------------
          Envelope Length             210 mm                250 mm
          --------------------------- --------------------- --------------------
          Basis weight                20 lb.                28 lb.
          --------------------------- --------------------- --------------------
          Input Capacity              75 envelopes          100 envelopes
          --------------------------- --------------------- --------------------
          Output Capacity             -                     75 envelopes
          --------------------------- --------------------- --------------------
</TABLE>

Envelope commands have been added to the LN03+, HP IID, HP IIID (PCL5), and
PostScript emulations.

The emulations will handle the following explicit size commands:

<TABLE>
<S>                                              <C>  
                   ----------------------------- -------------------------------
                   Commercial 9                  3.88" x 8.88"
                   ----------------------------- -------------------------------
                   Commercial 10                 4.13" x 9.5"
                   ----------------------------- -------------------------------
                   Commercial 11                 4.5" x 9.5"
                   ----------------------------- -------------------------------
                   International DL              110 x 220 mm
                   ----------------------------- -------------------------------
                   International C5              162 x 229 mm
                   ----------------------------- -------------------------------
                   PostFix                       114 x 229 mm
                   ----------------------------- -------------------------------
                   6.5x9.5                       6.5" x 9.5"
                   ----------------------------- -------------------------------
</TABLE>

A Letter size envelope command is available to print on arbitrary size
envelopes without interference from the clipping window.

7.2.3 PRINT QUALITY AND PAPER FEED RELIABILITY

Paper path reliability criteria and print quality described in Section 10 apply
when this cassette is installed, except for the following:

     INFORMATION LOSS

     Degraded print quality may occur within 10 mm of the leading edge and
     sides of the envelope and within 25 mm of the trailing edge.

     SKEW TOLERANCE

     Skew is less than 1 mm in 80.7 mm relative to the leading edge.

     REGISTRATION TOLERANCE

     Registration at the leading edge will be within +/- 3 mm.

     OPTICAL DENSITY

     Optical density will be greater than 1.1 nominal, measured as described in
     section 10.

     FUSE GRADE

     Less than 10% image density reduction will occur by rubbing as described in
     section 10.

     JAMS

     For the low capacity feeder, fewer than 1 jam per 200 envelopes fed will
     occur at 60% relative humidity.


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Note: The following specifications are goals pending completion of jam rate
      testing.

<TABLE>
<CAPTION>
            --------------------------------------------------------------
                                                   Non-sulfite Environment
                            Sulfite Environment      (cotton or recycled)
            Weight          Best       Degraded        Best     Degraded
            ------------ ---------- --------------- ---------- -----------
<S>                      <C>        <C>             <C>        <C>
            20 lb.          500          400           400        400
            ------------ ---------- --------------- ---------- -----------
            24 lb.          600          400           500        500
            ------------ ---------- --------------- ---------- -----------
            28 lb.          500          400           400        400
            ------------ ---------- --------------- ---------- ------------
</TABLE>

WRINKLES

Fewer than 1 wrinkle (of length 20 mm or greater) per 100 envelopes fed will
occur at 60% relative humidity.

MISCELLANEOUS DEFECTS

Multisheet feeds, bent corners, folds, wrinkles, loss of collation or other
physical damage shall be less than 1 in 30 envelopes fed for the best operating
environment and 1 in 15 for the operational environment.

7.3 1400 SHEET STACKER

Due to paper exit speed differences between the K30 and K40D, the 1400 Sheet
Stacker will be modified to work on the K40D and will be downward compatible
with the K30. The differences between the two models is 2 gears.


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                                   [GRAPHIC]

                         FIGURE 7-1: 1400 SHEET STACKER


7.3.1 CAPACITY

The 1400 Sheet Stacker consists of a single hopper with a capacity of 1400
sheets of A4, Legal or letter size paper.


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7.3.2 RELIABILITY

7.3.2.1 PAPER PATH RELIABILITY

Paper path reliability criteria described previously apply when this unit is
installed.

7.3.2.2 STACK RELIABILITY

The primary concern in stacking is separation of jobs in the output tray.
Nominal job separation is 12 mm. 98% of all adjacent jobs should be readily
separable with a minimum of 4 mm offset between all sheets in two adjacent
jobs. Additionally, the stack of any individual job should be contained within
a window specified in the table below:

TABLE 7-1 STACKER RELIABILITY

<TABLE>
<CAPTION>
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
                                   Window axis     Defect rate per 100   % Jobs       Stack      Misc.
               Paper type         Short    Long      Short      Long     in spec.    Height     Defects
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
<S>                              <C>      <C>      <C>        <C>        <C>        <C>        <C>   
          Xerographic letter     4 mm     10 mm        1          3         97%          1500     1/1500
          (best environment)
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
          Xerographic letter     6        10           2          5         90           1200      1/750
          (degr. environment)
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
          Xerographic other      4        10           1          3         96            800     1/1500
          (best environment)
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
          Xerographic other      6        10           2          5         90            800      1/750
          (best environment)
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
          Non-xerog. letter      4        10           2          5         97           1200     1/1500
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
          Non-xerog. other       6        10           2          5         90            800     1/1500
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
          Card stock             6        10           3          5         85            300     1/1500
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
          OHP (foils)            6        10           3          5         90            300     1/1500
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
          Labels                 6        10           3          5         90            300      1/750
          ---------------------- -------- -------- ---------- ---------- ---------- ---------- ----------
</TABLE>

In the table above, the percentage of jobs in the specified criteria refer to
the total number of jobs in a test, not just to a specific stack. Paper weights
supported are 75 - 90 g/m(2) (20 - 24 lb.) except as noted. Non-xerographic
paper is not recommended outside the best performance environment.

7.3.3 VOLTAGES

The 1400 Sheet Stacker has a universal power supply for:

     100-127V       50/60 Hz       with UL, CSA, FCC agency marks 

     200-240V       50/60 Hz       with TUV-GS, FTZ agency marks.

All K40D safety approvals apply.

7.3.4 DOCUMENTATION

User documentation is shipped with the unit. It should be added to the K40D
User Guide when the unit is installed.


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8. SUPPLIES

As part of the K40D program, a number of changes are being implemented in the
Supplies area. These include the implementation of serialization for the
developer and photoconductor assemblies and new designs for the fuser.
Significant effort is being put into extended the yield of all supplies except
toner. The result is a new line or supplies called "XL" for Extended Life. 

The K40D will also be configured such that supplies are no longer inserted into
the printer prior to shipment from Japan (or other Kentek facilities). Instead,
they will be contained in a separate `Starter Kit.' The Starter Kit carton will
be designed with the same foot print as the printer carton, allowing the two to
be strapped together for shipment to the end-user.

8.1 SERIALIZATION

The major enhancement for K40D is support for the use of serialized supplies.
Initially, the developer and photoconductor will support this feature. Each of
these assemblies will include a computer-readable serial number tag. The
printer AVPCL reads the unique electronic serial number of each serialized
supply after power up, after a cover is opened or closed and at periodic
intervals during power-on. If the serial number has been changed, the date and
time of the change, the usage count, and the new serial number will be logged
to non-volatile RAM on the AVPCL and to the printer's hard disk. This
information will be accessible from the front panel so that customers or
service personnel may inspect it. Also, the printer displays warning messages
on the operator panel as a supply approaches its rated life and once the rated
life has been exceeded. Supplies with this serialization and counter capability
are also known as `SmartSupplies'. 

The serializer chip has enough memory (battery backed-up) to contain a number of
fields of information. Information stored in the supply's memory includes a
serial number, a printer-compatibility code, a supply-compatibility code (to
determine compatibility between the developer and photoconductor), factory-set
life limits in both cycles and images, and variable fields for current cycle and
image counts. The AVPCL reads and writes serializer information and RIGS
software code interprets and presents it to the user.

Because supplies, especially PC frames, are often swapped between printers, the
usage count is stored in non-volatile RAM on the supply. This count will be the
one used to determine the life of the supply.

In order to ensure that this enhanced functionality is operable, non-serialized
supplies (developers and photoconductors) will not be supported in K40D.

The table below describes which supplies will support serialization and K30/K31
compatibility.

TABLE 8-1 SUPPLY COMPATIBILITY

<TABLE>
<CAPTION>
         ------------------------ ----------------- ---------------- --------------------- --------------------
                                                                     DOWNWARD COMPATIBLE    UPWARD COMPATIBLE
                                   SERIAL NUMBER      PRINT COUNT         TO K30/K31          FROM K30/K31
         ------------------------ ----------------- ---------------- --------------------- --------------------
         <S>                      <C>               <C>              <C>                   <C>       
         Toner                           No               No                 Yes                   Yes
         ------------------------ ----------------- ---------------- --------------------- --------------------
         K40D XL PC frame               Yes               Yes                 No                   No
         ------------------------ ----------------- ---------------- --------------------- --------------------
         K40D XL Developer              Yes               Yes                 No                   No
         ------------------------ ----------------- ---------------- --------------------- --------------------
         XL Fuser                        No               No                 Yes                   Yes
         ------------------------ ----------------- ---------------- --------------------- --------------------
         XL Cleaner                      No               No                 Yes                   Yes
         ------------------------ ----------------- ---------------- --------------------- --------------------
         Main charger                    No               No                  No                   No
         ------------------------ ----------------- ---------------- --------------------- --------------------
         Transfer charger                No               No                 Yes                   Yes
         ------------------------ ----------------- ---------------- --------------------- --------------------
</TABLE>


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8.2 SUPPLY YIELDS

K40D is designed for customer replacement of the following supplies at regular
intervals. These supplies and their receptors provide convenient access and
replacement, positive installation, and contamination free replenishment.
Supply life is a factor of many variables and the following expected life
figures are subject to a number of qualifiers as defined below and should be
averaged over a number a number of supplies, not on an individual basis. All
expected life figures are calculated for an average print coverage of 4% and
duty cycle of 80%. Higher average coverage will decrease yields for all
supplies.

TABLE 8-2 XL SUPPLY REPLACEMENT INTERVALS

<TABLE>
<CAPTION>
- ------------------------------------------ ---------------------- --------------- -------------- ---------------
SUPPLY                                                                IMAGES         CYCLES         QUANTITY
- ------------------------------------------ ---------------------- --------------- -------------- ---------------
<S>                                        <C>                    <C>             <C>            <C>  
Toner (4% coverage)                           Nominal setting          17K             N/A        1 cartridge
                                              Darker setting           14K                        1 cartridge
                                              Lighter setting          TBD                        1 cartridge
- ------------------------------------------ ---------------------- --------------- -------------- ---------------
Standard Photoconductor                                                80K            100K             1
- ------------------------------------------ ---------------------- --------------- -------------- ---------------
XL Photoconductor & Main Charger                                       200K           250K             1
- ------------------------------------------ ---------------------- --------------- -------------- ---------------
XL Cleaning Unit                                                       400K           500K             1
- ------------------------------------------ ---------------------- --------------- -------------- ---------------
XL Fuser                                                               200K            N/A             1
- ------------------------------------------ ---------------------- --------------- -------------- ---------------
Envelope Fuser *                                                       50K             N/A             1
- ------------------------------------------ ---------------------- --------------- -------------- ---------------
XL Developer Unit                                                      600K           600K             1
- ------------------------------------------ ---------------------- --------------- -------------- ---------------
</TABLE>

8.2.1 TONER YIELDS

Toner density will be controllable from the operator panel, with the operator
being able to select several settings above and below a nominal state. A K40D
developer will be shipped with the density setting in the nominal position.
Those customers wishing to increase image density in graphics applications may
change the developer to a darker setting with possibly a decrease in toner
yield. The user can also adjust the setting to a lighter setting, resulting in
lighter image and lower toner usage. 

Toner yield was measured experimentally for primarily text pages at 4% coverage.
Yield varies with the type of coverage (thin lines and text use more toner than
large fill areas) and environment (image density decreases in hot/dry
conditions). This yield variation is different for the K toner used in K40D/K30
than previous Kentek toners, so customers may experience different yields
between K40D and older printers in the same environment.

The increase in toner usage for thin line features is caused primarily by the
fact that each pixel is round and approximately 50% larger in diameter than the
rectangular addressed area, so that pixels completely fill the rectangle area
and overlap each other on the top and bottom and each side. All printer using
round pixels (laser or LED) will experience this phenomenon. Additional variance
is caused by electrostatic effects.

8.2.2 PHOTOCONDUCTOR AND DEVELOPER YIELDS

Photoconductor and Developer life is determined by the number of cycles
(rotations) of the photoconductor belt. The number of cycles the photoconductor
goes through is generally higher than the number of images printed. This is due
to the fact that the printer cycles several times prior to printing the first
page and also needs to cycle periodically during periods of printer inactivity.
Because components wear corresponding to the number of machine cycles rather
than the actual number of images printed, yields for all supplies (other than
toner) assume at least an 80% duty cycle (images/cycles). The table above shows
expected lives in both images and cycles. Supply life is specified as meeting
either the maximum image or cycle count, whichever one comes first. Thus, in a
low duty cycle environment where the printer is not used fairly continuously or
most print jobs are short, consisting of only a page or two, the maximum cycle
life will be reached well before the maximum image count. 


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Other factors that impact supply life include image density and coverage, and
media type. Expected life figures are based on the use of standard paper that
meets or exceeds the media specifications defined in section 3. Other media,
such as envelopes for example, will lower the life considerably.

Life is also limited by shelf life. For example, items such as photoconductors
fatigue after installation even if the printer is not used. Refer to section 8.3
for more details.

Use of non Kentek-approved third-party ("clone") supplies will invalidate the
printer and any supply warranties.

8.3 STORAGE AND SHELF LIFE

The following are recommended maximum shelf lives for unopened supplies. Weights
shown are approximate and include packaging.

<TABLE>
<CAPTION>
          ------------------------ ---------- -----------------
                                    WEIGHT       SHELF LIFE
          ITEM                       (KG)         (MONTHS)
          ------------------------ ---------- -----------------
          <S>                      <C>        <C>
          Toner (2 cartridges)        1.4            60
          ------------------------ ---------- -----------------
          Photoconductor              2.3            12
          ------------------------ ---------- -----------------
          Developer Unit              5.9            60
          ------------------------ ---------- -----------------
          Cleaner Unit                1.4        indefinite
          ------------------------ ---------- -----------------
          Fuser                       3.6        indefinite
          ------------------------ ---------- -----------------
</TABLE>

Toner and developer shelf life depend on storage temperature; see section 13.2
for details.

8.4 TONER CARTRIDGE COMPATIBILITY

K40D uses the same toner ("K" toner) as K30. The toner in K40D may be
incompatible with the toner used in some older printers. For this reason,
interlock tabs have been added to the toner cartridges with matching slots in
the developer as shown below. In this way, the customer is assured that the
toners cannot be intermixed.



                                   [GRAPHIC]

              FIGURE 8-1: TONER LOCKOUTS (EXAGGERATED FOR CLARITY)

Toner and developers are also color coded with small labels on the front of
each:

     o    Yellow - A toner (IBM, some K3/K4) 
     o    Blue - C toner (K3/K4) 
     o    Red - K toner (K30/K31/K40D, IBM 3930) 
     o    Green - MICR toner (K31)

MICR TONER IS UNDER DEVELOPMENT ON THE K31 AND MAY BE SUPPORTED BY K40D


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9. DOCUMENTATION

9.1 USER MANUALS

Significant changes are required for K40D printers. As part of the required
documentation effort, the manuals are being restructured to be more modular.
The traditional Guide to Operations is being split into a User's Guide and a
Reference Guide. A pocket attached to the rear cover of the printer will be
capable of holding the manuals.

     User's Guide (p/n 81250001 - Phase 0 software, 90000028 - Phase 2 software)

         Shipped with each standard K40D printer. The Users Guide teaches the
         printer operator how to operate the printer, load paper and media,
         troubleshoot basic printer problems such as clearing paper jams and
         replacing printer toner.

     Reference Guide (p/n 81250004 - Phase 0 software, 90000027 - Phase 2
     software)

         Shipped with each standard K40D printer. The Reference Guide is a
         reference resource provides an overview of the printer's components,
         outlines power and operating environment requirements, lists error
         codes, and provides all instructions necessary to properly install and
         configure the printer, run test prints, replacing supplies, and begin
         operations. Also includes guidelines for choosing suitable media and
         storing paper.

     Quick Reference Card (p/n 81250003)

        Included in a plastic pouch on the back of each printer, provides a
        concise summary of basic printer operation.

Maintaining a set of manuals on the printer hard disk in a ready-to-print
format, such as PCL or Post Script, is being considered. This would allow the
user to bring all or portions of the documentation on-demand.

9.2 SERVICE MANUALS

     Field Service Manual (p/n 81250002)

         Contains technical information allowing Service Engineers to diagnose,
         repair, and maintain the printer. Detailed step by step
         Troubleshooting Analysis Guides (TAGs) are provided to aid the
         technician in resolving machine check error codes, print quality
         problems, and other printer malfunctions. Also includes a replacement
         parts catalogue and part removal and reinstallation procedures.


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10. PRINT QUALITY

10.1 INTRODUCTION

10.1.1 SCOPE

The requirements described here define print quality limits to which printers
are to be manufactured and perform throughout their life.

10.1.2 DEFINITIONS

All dimensions are expressed in millimeters except domestic paper sizes and
picture element (pel) density. Inch dimensions appear in parenthesis. 

Two print directions are defined for this product, the process direction and the
LED array direction. Process direction is parallel to photoconductor and paper
movement direction. The LED array direction is 90 degrees to the process
direction. (parallel to leading edge of the paper).

10.1.3 GENERAL REQUIREMENTS AND RESTRICTIONS

Print quality shall only be evaluated on machines operating within specification
limits and maintained according to replacement and service intervals.

Print quality is guaranteed for environmental conditions remaining in the best
operating region described in section 4.1.1. The printer will continue to print
legibly in the degraded print region.

Loss of information may occur within 4.2 mm (0.165") of any paper edge. Within
10 mm (0.4") of any paper edge normal text will be readable but optical density
may be reduced.

All print quality measurements shall be made immediately after a print is made.

Print quality test masters resident in the machine shall be used to evaluate
print quality.

Print quality shall be evaluated using Kentek approved papers. The use of other
papers could result in degraded print quality. The following brands of
xerographic bond paper qualify as standard paper for print quality testing:

                  Xerox 4024
                  IBM MSP
                  Komine BM

10.2 PRINT QUALITY REQUIREMENTS

The following specifies the print quality parameters and their requirements.

10.2.1 OPTICAL DENSITY

The nominal optical density is designed to be 1.40. Black patches (5 x 5 mm to
40 x 40 mm) on each page shall have a average optical density of 1.35, a
minimum of 1.20, and a standard deviation less than 0.07, as read with a
Macbeth RD 912 densitometer, a Gardner reflectometer, or other approved
densitometer or reflectometer, in the best operating environment. In the
operational environment and/or with the developer TPS target setting in the
"Toner Saver" setting, the average optical density may fall to 1.2 with a
minimum of 1.1. 


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The printer will meet the following requirements for documents with 100% black
area coverage:

     -    a minimum of ten pages with 100% black coverage without error

     -    stable recovery to normal operation will occur within 100 normal (4% 
          coverage) pages

     -    there will be no damage to machine components.

10.2.2 BACKGROUND

Background measurement is very sensitive and must be taken immediately after
the test pattern sample is printed. All print free (white) areas will have a
maximum background of .8% The background reading is the ratio of the difference
in reflection readings at a given print free area immediately before and after
printing to the reading immediately before printing.

10.2.3 REGISTRATION

Registration shall be evaluated at the process direction leading paper edge and
the LED array direction at the paper edge. Registration gauged from paper edge
to registration mark on the print master shall not vary more than +/-1.5 mm.
Front to rear misalignment in the process direction for duplex pages (K40D)
will not exceed 2 mm, provided the paper is within 1 mm of nominal length.

10.2.4 SKEW

Skew shall be evaluated by examining the slope of the nearest vertical or
horizontal line from a page side, the slope (or skew) shall be less than tan(X)
= 0.0035 (0.039"/11"), or .2 degrees.

10.2.5 STROKE WIDTH

Stroke width will be evaluated from photomicrographs or with an approved image
analyzer. Stroke width is defined as the average distance between 60% points of
the average white-black-white transition. Vertical and horizontal strokes shall
be evaluated by measuring the vertical and horizontal legs of the printed L's
on the print master. Stroke widths of one pel and two pels are specified below.
Vertical to horizontal ratio shall be calculated by:

         (smaller measurement/large measurement) x 100%

and may not be less than 80%. This requirement does not permit measurements to
violate width requirements.

RESOLUTION

<TABLE>
<CAPTION>
       ----------- --------------- ---------- --------------- ----------
                   ONE PEL STROKES            TWO PEL STROKES
                   MIN.            MAX        MIN.            MAX
       ----------- --------------- ---------- --------------- ----------
       <S>         <C>             <C>        <C>             <C>
       240         0.08            0.16       0.20            0.30
       ----------- --------------- ---------- --------------- ----------
       300         0.06            0.13       0.16            0.24
       ----------- --------------- ---------- --------------- ----------
       400         0.04            0.10       0.12            0.18
       ----------- --------------- ---------- --------------- ----------
       600
       ----------- --------------- ---------- --------------- ----------
</TABLE>

10.2.6 RESOLUTION

Maximum resolution possible with the 240 pel per inch printer is 4.72 line pairs
per mm.

Maximum resolution possible with the 300 pel per inch printer is 5.91 line pairs
per mm.

Resolution shall be evaluated by examining the line pair resolution targets on
the print master with a magnifier or with an approved image analyzer. With the
magnifier, all lines shall be distinguishable (look separated).


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10.2.7 LINE STRAIGHTNESS

Line straightness shall be evaluated by visual examination. The vertical and
horizontal lines on the print master (skew eliminated) shall be evaluated. The
lines will reveal no obvious misplaced pels or obvious undesirable "waviness".

10.2.8 MAGNIFICATION

Magnification must be measured immediately after the print is made.
Magnification shall be evaluated by measuring the overall length of the printed
bars at the side (process direction) and at the bottom (LED array direction) of
the print master.

10.2.8.1 PROCESS DIRECTION

Overall length of process direction bars measured between end bar centerlines
shall be 228.0+/-2.28 mm (1.0%) for nominal line frequency.

10.2.8.2 LED ARRAY DIRECTION

Overall length of LED array direction bars measured between end bar centerlines
shall be 152 +/- 0.7 mm (0.5%).

10.2.9 FUSE GRADE

Fuse grade shall be evaluated with Kentek fuse grade measurement equipment by
comparing the original optical density measurement of print master black
patches to those which have been rubbed by a LION #PL-501 or similar eraser for
3 strokes of one kilogram force. The original optical density shall not be
reduced by more than 10% in the rubbed area. In addition there should be no
areas of unfused toner on the sheet. This applies to 60 to 90 g/m(2) paper.

10.2.10 IMAGE UNIFORMITY

Process perturbations such as velocity perturbations or print head
non-uniformity can result in undesirable print pattern modulations. Image
uniformity will be evaluated by comparing:

         1) 60 Line/inch Horizontal Line Print

         2) All Black Print

         3) Vertical Line Print

with reference masters. Printed image uniformity shall be equal to or better
than the reference masters and shall not result in detectable growth or
shrinkage of text when text aligns with the shock perturbation.

Image uniformity for the all black page assumes surface coverage of no more than
70% for a letter size page, which is equivalent to a black letter size page with
 .75" white borders.


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10.2.11 SPOTS AND VOIDS

DEFINITIONS

<TABLE>
<CAPTION>
        ------------------------ ----------------------- -----------------------
                                 SMALL                   LARGE
        ------------------------ ----------------------- -----------------------
        <S>                      <C>                     <C>         
        Black Spots              0.13 to 0.25 mm         >0.25 to 0.50 mm
        ------------------------ ----------------------- -----------------------
        White Voids              0.25 to 0.50 mm         >0.50 to 1.00 mm
        ------------------------ ----------------------- -----------------------
        Black Lines              0.25 to 1.50 mm         >1.50 to 3.00 mm
        ------------------------ ----------------------- -----------------------
        White Lines              0.25 to 3.00 mm         >3.00 to 6.00 mm
        ------------------------ ----------------------- -----------------------
</TABLE>

Black spots are defined as defects with a minor dimension (width) greater than
0.15 mm.

Black lines are defined as defects with a minor dimension (width) less than or
equal to 0.15 mm.

White voids are defined as defects with a minor dimension (width) greater than
0.20 mm.

White lines are defined as defects with a minor dimension (width) less than or
equal to 0.20 mm.

Allowable level of repeated black spots:

     -    Maximum of 3 large black spots are allowed per page, with a maximum of
          1 large spot within any 25 x 25 mm square on the page.

     -    Maximum of 6 small black spots are allowed per page, with a maximum of
          2 small spots within any 25 x 25 mm square on the page.

Allowable level of combination large and small black defects:

     -    Maximum of 2 large black and 4 small black defects are allowed per
          page, or 1 large black with 5 small black defects per page.

     -    Black spots larger than 0.50 mm are not allowed. Black spots smaller
          than 0.13 mm must meet background criteria. Black lines longer than
          3.00 mm are not allowed.

Allowable level of white voids:

     -    Maximum of 6 large white voids are allowed per page, with a maximum of
          2 voids within any 25 x 25 mm square.

     -    Maximum of 10 small white voids are allowed per page, with a maximum
          of 3 voids within any 25 x 25 mm square.

Allowable level of combination large and small white defects:

     -    Maximum of 5 large and 1 small, or 4 large and 3 small, or 3 large and
          5 small, or 2 large and 7 small, or 1 large and 9 small white on black
          defects per page.

     -    White spots larger than 1.00 mm or white lines longer than 6.00 mm are
          not allowed.

10.2.12 CLEANING RESIDUAL

Cleaning will be considered satisfactory if various widths of full page process
direction straight lines are not visible on the next available image panel (1.5
sec. at 40 ppm) print. (The test print should be printed with large amounts of
white in the previously lined areas)

10.2.13 CORONA STREAKS

Corona streaks (light vertical streaks) which are visible in all-black areas
will be evaluated by examining a page filled with normal text. Corona streaks
will be considered unacceptable if they cause perceptible density variations on
the text page.


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10.2.14 BEAD OR TONER CARRY-OUT

Prints will show no evidence of developer bead or toner carry-out. The
carry-out will be evaluated by examining the 60-lines-per-inch master for small
random void areas or black spots. Prints shall not show evidence of small
random void areas.

10.2.15 SPEW

Extra toner at edges of text or images shall be no worse than the standard
master.

10.2.16 KEYSTONING

Un-developed areas at the boundary of a filled area shall be no worse than the
standard masters.

10.2.17 PERMISSIBLE PRINT QUALITY DEFECTS

Print quality defects that fail to meet the above requirements are permitted to
the extent that the sum of all defects are within the burst and random defect
rates specified below.

10.2.17.1 BURST DEFECTS

Bursts are infrequent occurrences of several consecutive prints with defects. A
repair action will be initiated during testing when burst defects exceed the
following limits:

<TABLE>
<CAPTION>
          --------------------------- ---------------------------------
          LENGTH OF BURST             ALLOWABLE NUMBER PER 1000
          --------------------------- ---------------------------------
          <S>                         <C>
          3 to 10                     3
          --------------------------- ---------------------------------
          11 to 20                    1
          --------------------------- ---------------------------------
          >=20                        0
          --------------------------- ---------------------------------
</TABLE>

10.2.17.2 RANDOM DEFECTS

Random defects are infrequent occurrences of defects which do not occur in
bursts.

10.2.17.3 TOTAL RANDOM AND BURST DEFECTS

The total level of out-of specification random plus burst prints will be
limited to 5% (50/1000) when averaged over 1,000 prints.


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11. SERVICEABILITY

11.1 ADJUSTMENTS

No field adjustments are required. All factory adjustment points are disabled.

11.2 CLEANING AND MAINTENANCE

11.2.1 CLEANING

The following areas need cleaning at the specified intervals. Cleaning is
intended to be performed by the customer.

<TABLE>
<CAPTION>
          ----------------------------------- --------------------------
          AREA                                INTERVAL
          ----------------------------------- --------------------------
          <S>                                 <C>      
          Printhead Selfoc Surface            25Kimages
          ----------------------------------- --------------------------
          Transfer Corona Grid                25K
          ----------------------------------- --------------------------
          Erase Lamp Cover                    25K
          ----------------------------------- --------------------------
          Toner Patch Sensor (TPS)            25K
          ----------------------------------- --------------------------
</TABLE>

11.2.2 PERIODIC LUBRICATION

Lubrication of the main gear by service personnel may be required to reduce
audible noise but is not necessary to insure reliability.

11.2.3 SPECIAL TOOLS

No special tools are required by customers for any customer operation. Some
special cleaning materials such as cotton swabs are provided in the supply
packaging.

Please see the K40D Printer Field Service Manual for tools required by service
personnel.

11.2.4 PREVENTATIVE MAINTENANCE

A tune-up kit is provided for replacement of long life components in the paper
path. This kit includes

     Roller Assembly - secondary feed
     Roller Assembly - primary feed
     Roller Assembly - secondary pick
     Roller Assembly - primary pick
     Roller Assembly - timing
     Roller Assembly - exit
     Transfer Corona Assembly
     Roller Assembly - upper paper guide
     Brush - upper static
     Brush - lower static
     Label - kit installed
     Installation instructions


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- --------------------------------------------------------------------------------

This kit will typically need to be installed after about 1 million prints to
insure low jam rates. Conceptually, this kit could be installed by the end
user, but is typically installed by field personnel.

11.3 DIAGNOSTICS

11.3.1 POWER ON DIAGNOSTICS

At power on reset (POR) time a complete diagnostic check is run on both the
printer and controller. Any errors detected preventing normal operation are
recorded on diskette and a machine check message or code will appear on the
operator panel if possible. With aid of the operator's guide of the field
service manual, the message will direct the operator or field service
representative to the failing unit. The following areas are checked during POR
diagnostics:

     Printer Control Logic (AVPCL) electronics and memory

     Print Engine Mechanisms (AVPCL)

         Toner supply
         Fuser temperature
         Covers closed
         Paper supply
         Paper jam
         Motor rotation
         Jogging tray action

     Diskette Drive and status (Controller - standard printer only)

     Controller electronics and memory (Controller - standard printer only)

     Communications I/O cards (Controller - standard printer only)

The board listed in parenthesis next to each area is responsible for that
area's diagnostics.


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- --------------------------------------------------------------------------------


12. Line Power Requirements

12.1 VOLTAGE AND FREQUENCY

The K40D uses common AC and DC supplies for all voltages. Voltage is selected
with a configuration plug on the AC supply and a switch setting on the DC
supply during manufacture or field installation. Six different voltage settings
are possible on the AC supply:

<TABLE>
<CAPTION>
          -------  ----------  ------------  ---------------  -------------- 
          VOLTAGE  FUSER TYPE  FREQUENCY     SAFETY MARKS     EMI MARKS      
          -------  ----------  ------------  ---------------  -------------- 
          <S>      <C>         <C>           <C>              <C> 
          100V     100-127V    50, 60 Hertz  UL, CSA, TUV-GS  FCC, CE, VCCI  
          -------  ----------  ------------  ---------------  -------------- 
          120V     100-127V    60 Hz         UL, CSA, TUV-GS  FCC, CE, VCCI  
          -------  ----------  ------------  ---------------  -------------- 
          200V     200-240V    50, 60 Hertz  UL, CSA, TUV-GS  FCC, CE, VCCI  
          -------  ----------  ------------  ---------------  -------------- 
          220V     200-240V    50, 60 Hertz  UL, CSA, TUV-GS  FCC, CE, VCCI  
          -------  ----------  ------------  ---------------  -------------- 
          230V     200-240V    50, 60 Hertz  UL, CSA, TUV-GS  FCC, CE, VCCI  
          -------  ----------  ------------  ---------------  -------------- 
          240V     200-240V    50, 60 Hz     UL, CSA, TUV-GS  FCC, CE, VCCI  
          -------  ----------  ------------  ---------------  -------------- 
</TABLE>

Voltage tolerance is +/- 10%. Frequency tolerance is +/- 10%. The use of DC
motors throughout the K40D eliminates any line frequency dependencies. 

To minimize stocking requirements at both Kentek and customer warehouses, the
K40D will be offered in two models:

<TABLE>
<CAPTION>
          ---------------------- ---------------------- ---------------------
          MODEL                  VOLTAGE RANGE          FREQUENCY
          ---------------------- ---------------------- ---------------------
          <S>                    <C>                    <C>     
          120V                   100-127 V              50, 60 Hertz
          ---------------------- ---------------------- ---------------------
          230V                   200-240 V              50, 60 Hz
          ---------------------- ---------------------- ---------------------
</TABLE>

Each voltage configuration model will come configured to the voltage for that
model (120V or 230V), with enough extra plugs to cover other voltages in its
stated range. In the case of the 120V model, this means including the 100V plug
and in the case of the 230V model, this means including plugs for 200V, 220V
and 240V operation. A power cord is provided for North American 120V models
only. Power cords for other models are supplied by the customer at time of
installation.

12.2 POWER CONSUMPTION

        Power:        less than 1.44 kVA (120 V)
        Current:      less than 12 A (120 V)

For the purposes of heating/cooling planning, nominal power consumption for a
K40D in an office environment are shown below. Actual consumption varies with
ambient temperature and printing duty cycle.

<TABLE>
<CAPTION>
        ----------- ---------- ---------------- --------------
        CONDITION   FUSER      CURRENT (AMPS)   POWER (KW)
        ----------- ---------- ---------------- --------------
        <S>         <C>        <C>              <C> 
        Standby     ON         9.42             1.13
        ----------- ---------- ---------------- --------------
        Standby     OFF        1.21             0.145
        ----------- ---------- ---------------- --------------
        Printing    ON         9.19             1.10
        ----------- ---------- ---------------- --------------
        Printing    OFF        1.8              0.216
        ----------- ---------- ---------------- --------------
</TABLE>

The fuser is maintained at constant temperature when the printer is powered on
in READY mode, even when not printing, in order to be immediately ready for the
first page of a print job. The fuser is ON approximately 10% 


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K40D Product Specification                                           Version 2.5
- --------------------------------------------------------------------------------

of the time at 70 deg. F while the printer is idle. Peak inrush current is
considerably higher than shown for a fraction of a cycle.

12.3 TIMING

12.3.1 POWER OFF CYCLE TIME

The printer control electronics are designed to reset whenever the +5V supply
drops below an operational level for any length of time. After reset, the
printer executes a cold start.

12.3.2 COLD START WARM UP TIME

The time from power on of a cold printer (15 deg. C) to the printer ready
condition is less than 6 minutes.

12.3.3 TIME TO FIRST PRINT

The time from pickup roller select to paper in the exit tray is less than 30
seconds for letter size paper in simplex mode for any standard input.


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K40D Product Specification                                           Version 2.5
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13. Environmental Specifications

13.1 OPERATING ENVIRONMENT

13.1.1 TEMPERATURE AND HUMIDITY

The printer is designed to operate in the following environments:

     Temperature                    15.6 - 32.2(degree)C (60 - 90(degree)F)
     Relative Humidity              12% - 75%RH
     Altitude                       0 to 2135 m (0 to 7000 ft.)
     Pressure Variation             +/- 2.6% at the installation altitude

                                    [GRAPHIC]

                     FIGURE 13-1: K40D ENVIRONMENTAL LIMITS

Printer operation outside of the recommended window above may result in
degraded print quality and paper path reliability. See the appropriate
specification section.

13.1.2 ACOUSTICS

Acoustic noise of K40D (with covers) is measured at one meter in any horizontal
direction in accordance with ANSI S12.10-1985:

     Idle             <= 48 dBA
     Running          <= 55 dBA


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K40D Product Specification                                           Version 2.5
- --------------------------------------------------------------------------------


13.1.3 EMISSIONS

The printer does not emit any substance harmful to the environment or to human
life. The following levels of emissions will not be exceeded at 100% duty
cycle:

         Ozone                        .1 ppm   (In accordance with UL 1950)

         Inert or Nuisance Dust:

              Total Dust              15 mg/cubic meter

              Respirable fraction     5 mg/cubic meter

              (Measured in accordance with the Code of Federal Regulations,
              Labor 29 Part 1910.1000, Subpart Z, Table Z-3.)

13.2 SHIPMENT AND STORAGE ENVIRONMENT

13.2.1 TEMPERATURE AND HUMIDITY

The printer can withstand the following temperature and humidity ranges while
packed for shipment. It is assumed that all supplies are removed from the
printer and packaged separately.

           PRINTER

<TABLE>
<CAPTION>
           ------------------ ---------------------------- --------------------
                              TEMPERATURE                  RELATIVE HUMIDITY
           ------------------ ---------------------------- --------------------
           <S>                <C>                          <C>
           Shipment           -40 deg. C  --- +60 deg. C   5% - 100%
           ------------------ ---------------------------- --------------------
           Storage            +1 deg. C --- +60 deg. C     5% - 80%
           ------------------ ---------------------------- --------------------
</TABLE>

           Note: dry conditions (no condensation) must be maintained

           SUPPLIES

<TABLE>
<CAPTION>
           ------------------ ---------------------------- --------------------- ------------
                              TEMPERATURE                  RELATIVE HUMIDITY     TIME
           ------------------ ---------------------------- --------------------- ------------
           <S>                <C>                          <C>                   <C>
           Shipment           -40 deg. C  --- +50 deg. C   5% - 100%             45 days
           ------------------ ---------------------------- --------------------- ------------
           Storage            +1 deg. C --- +40 deg. C     5% - 80%              12 months
           ------------------ ---------------------------- --------------------- ------------
                              +1 deg. C --- +30 deg. C     5% - 80%              24 months
           ------------------ ---------------------------- --------------------- ------------
</TABLE>

           Note: dry conditions (no condensation) must be maintained

If the printer is stored at temperatures greater than 40 degrees C, the toner
may need to be replaced before using the printer. Once a supply is opened and
installed in the printer, the standard printer operating environment must be
maintained.

A NON-OPERATING SPECIFICATION FOR ALTITUDE IS NEEDED (15K FT.?)

13.2.2 MECHANICAL SHOCK AND VIBRATION

Please refer to the Kentek Packaging Specification for packaging, shock, and
vibration details.

13.2.3 PAPER STORAGE

Paper should be stored in an environment as close as possible to the
operational printer environment. If the temperature/humidity of the paper
storage and printer operating environments are different, allow the paper to
adjust to the operational environment before using. As a guideline, allow about
6 hours of acclimation for each 5.5 deg. C of temperature difference. Paper
should not be placed or stored directly on the floor to prevent exposure to
cold or wet floor surfaces.


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K40D Product Specification                                           Version 2.5
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14. SAFETY AND AGENCY APPROVALS

K40D printers will have approval of all applicable agencies. The standard
printer is designed to comply with the regulatory and safety requirements of
UL, CSA, CE, and IEC. Compliance with all defined regulatory agencies is
clearly indicated on the printer. A single label will be used on all printers,
covering all voltage ranges. 

The print engine only version will meet regulatory and safety requirements as a
component. The OEM customer will be responsible for final agency approval.

14.1 SAFETY

Complies with the following safety standards:

     UL Specification 1950, "Information Processing and Business Equipment, 5th
         edition"

     CSA Standard C22.2-950, "Information Processing and Business Equipment"

         Note: CSA and UL test to a +6% -10% line voltage range.

     IEC 950, "Safety of Information Technology Equipment, including Electrical
         Business Equipment" (TUV-GS mark)

     European Norms EN 60 950 "Specification for Safety of Information
         Technology Equipment, Including Electrical Business Equipment", 
         including Special National Conditions (Annex ZB and ZC) and the Low
         Voltage Directive 73/23/EEC (TUV-GS mark)

14.2 ELECTROMAGNETIC COMPATIBILITY

14.2.1 EMISSIONS

Complies with the following standards and regulations: 

         FCC regulations part 15, Class A
         VCCI Class 1
         Canadian Department of Communications CRC 1374 (Not included on label)
         European Norms EN50081-1 and EN55022 (CISPR 22 Class A) (CE mark)

14.2.2 IMMUNITY

For AC line noise, surge immunity, electrostatic discharge rejection, and
susceptibility, the printer will meet the requirements of:

     European Norms EN50082-1, "Electromagnetic Compatibility - Generic Immunity
     Standard" (CE mark)


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K40D Product Specification                                           Version 2.5
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15. PHYSICAL SPECIFICATIONS

15.1 DIMENSIONS

These dimensions are for the K40D standard product with covers. All dimensions
are in millimeters.

                                   [GRAPHIC]

                          FIGURE 15-1: K40D FRONT VIEW


                                   [GRAPHIC]

                           FIGURE 15-2: K40D TOP VIEW


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K40D Product Specification                                           Version 2.5
- --------------------------------------------------------------------------------


15.2 WEIGHT

The weight of the XS print engine with covers and controller is 69 kg (153
lb.).

15.3 SHIPPING DIMENSIONS

The boxed XS printer with covers and controllers (including pallet) has a
shipping weight of 85 kg. (188 lb. and dimensions of 31" (776 mm) x 29" (730
mm) x 34" (845 mm) (LxWxH). The Supply Starter Kit carton footprint dimensions
are the same as the printer carton and the height is 14". Shipping weight is 41
lb.

                                   [GRAPHIC]

                        FIGURE 15-3: K40D PRINTER CARTON


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K40D Product Specification                                           Version 2.5
- --------------------------------------------------------------------------------


15.4 INSTALLATION SPACE REQUIREMENTS

The amount of space required to install a K40D depends on which options the
printer is equipped with. The printer may be configured:

     1) With no options

     2) With or without a stand

     3) With or without a High Capacity Input unit 

     4) With or without a High Capacity Output unit

A printer with no options requires the following space:

     Height:        1020 mm (40")          (To allow the top cover to open.)
     Floor Space:   1420 mm (56") wide     (To allow the paper trays to be 
                                            unplugged)
                    1505 mm (59.5") deep   (To allow the front and rear covers 
                                            to open) 

Adding a printer stand requires:

     Height:        An additional 560 mm (22")
     Floor Space:   No Change

Adding a High Capacity Input Unit requires:

     Height:        No Change
     Floor Space:   An additional 590 mm (23.5") in width

Adding a High Capacity Input Unit requires:

     Height:        No Change
     Floor Space:   An additional 250 mm (10") in width

The above dimensions allow for both normal operation (adding paper, clearing
jams, adequate air flow) and servicing (opening top, front, and rear covers).
Please be aware that the HCI and HCO cannot be installed without the use of the
stand which incorporates shelves for these units. 

Combining the above dimensions into three common printer configurations yields
the following space requirements:

<TABLE>
<CAPTION>
       ------------------------------ ---------------------- ---------------------- ----------------------
       Printer Configuration           Height (mm/inches)      Width (mm/inches)      Depth (mm/inches)
       ------------------------------ ---------------------- ---------------------- ----------------------
       <S>                            <C>                    <C>                    <C>
       Base Printer                         1020 / 40              1420 / 56             1505 / 59.5
       ------------------------------ ---------------------- ---------------------- ----------------------
       With Stand                           1580 / 66              1420 / 56             1505 / 59.5
       ------------------------------ ---------------------- ---------------------- ----------------------
       With Stand & HCI & HCO               1580 / 66             2260 / 89.5            1505 / 59.5
       ------------------------------ ---------------------- ---------------------- ----------------------
</TABLE>

Additionally, the printer must be positioned at least 100 mm from any rear
obstruction (with covers closed) for adequate air flow and on a level surface
with a maximum slope of +/- 0.5 degrees (any direction).

15.5 LABELS

15.5.1 OPERATOR LABELS

The following labels are visible to the operator either during normal operation
or when covers are open:


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K40D Product Specification                                           Version 2.5
- --------------------------------------------------------------------------------


<TABLE>
<CAPTION>
- --------------------------- -------------------- --------------------- ---------------------------------------
LABEL                       LOCATION             VISIBLE               TEXT OR GRAPHIC
- --------------------------- -------------------- --------------------- ---------------------------------------
<S>                         <C>                  <C>                   <C>
Photoconductor              Top main frame       Top cover open        Photosensitive material, PC insertion
- --------------------------- -------------------- --------------------- ---------------------------------------
Toner Installation          Front main frame     Front cover open      Toner installation graphic
- --------------------------- -------------------- --------------------- ---------------------------------------
Floppy Disk Insertion       Front main frame     Front cover open      Diskette orientation graphic
- --------------------------- -------------------- --------------------- ---------------------------------------
MIJ                         Front cover          Front of machine      Removable "Made in Japan"
- --------------------------- -------------------- --------------------- ---------------------------------------
Safety                      Front main frame     Front cover open      Safety Approval - Kentek K40D
- --------------------------- -------------------- --------------------- ---------------------------------------
Hazard                      Left gear cover      Rear cover open       Hazardous Area Warning (yellow)
- --------------------------- -------------------- --------------------- ---------------------------------------
Voltage                     AC power cover       Rear cover open       100 V ! graphic (yellow)
- --------------------------- -------------------- --------------------- ---------------------------------------
Fuser                       Fuser cover          Top cover open        >100 deg. C ! graphic (yellow)
- --------------------------- -------------------- --------------------- ---------------------------------------
Adjust Upper                Main frame           Front cover open      Pressure scale graphic
- --------------------------- -------------------- --------------------- ---------------------------------------
Adjust Lower                Main frame           Front cover open      Pressure scale graphic
- --------------------------- -------------------- --------------------- ---------------------------------------
</TABLE>

International symbols (IEC 417) are used where possible.

15.5.2    OTHER LABELS

<TABLE>
<CAPTION>
- ------------------------- ------------------------ --------------------- ----------------------------------------------
LABEL/PART NUMBER         LOCATION                 COLOR                 TEXT OR GRAPHIC
- ------------------------- ------------------------ --------------------- ----------------------------------------------
<S>                       <C>                      <C>                   <C>
Installation tape (p/n    Over rear power plugs    Yellow, black text    "See installation instructions before 
61020302)                                                                connecting to power"
- ------------------------- ------------------------ --------------------- ----------------------------------------------
Direct-Attach interface   Metal card bracket       Black text            "Serial", "Parallel"
- ------------------------- ------------------------ --------------------- ----------------------------------------------
Voltage Selection (p/n    Rear cover, above        Parchment white,      Check boxes for each voltage  100,120-127,
61020301)                 power plugs              black text            200, 220, 230, 240
- ------------------------- ------------------------ --------------------- ----------------------------------------------
XS Label (p/n 81120058)   Printer carton (XS       White with black      "Printer Does Not Contain The
                          printers only)           text                  Photoconductor, Developer Unit, Fuser,
                                                                         Cleaner Or Toner.  Supplies Are Packaged
                                                                         Separately.  Follow Installation
                                                                         Instructions Before Applying Power To The
                                                                         Printer."
- ------------------------- ------------------------ --------------------- ----------------------------------------------
</TABLE>


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K40D Product Specification                                           Version 2.5
- --------------------------------------------------------------------------------


15.5.3 SERIAL NUMBER

Each printer has a unique serial number affixed behind the front cover at the
lower left corner of the main frame. K40D printer (with controller) serial
numbers are prefixed with 'K40D'; K40D print engines (without controler) are
prefixed with `M40D'. Supplies are marked with a serial number and a revision
level.

15.5.4 CONFIGURATION NUMBER

Each field replaceable unit (FRU) and supply item is marked with a part number
and a revision level on the packaging.

15.6 COSMETICS

15.6.1 LOGO TYPES AND COLORS

The printer will have standard Kentek colors and logos. Kentek can provide
alternate colors and logos per customer specifications.

15.6.2 COVERS

Kentek can provide customized cover designs per customer specifications, or
will use K40D standard covers.

All painted, molded plastic, silk-screened or plated cover parts present a
uniform texture and gloss when viewed from a distance of 1 meter from the
machine's nearest surface. Imperfections noticed while working at a distance of
less than 1 meter are ignored. Cover gaps are adjusted to appear parallel at a
distance of one meter.


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Kentek Information Systems          Confidential                         Page 60
<PAGE>   98


                           SCHEDULE E




                   DELETED FROM THIS AGREEMENT





<PAGE>   99


                           SCHEDULE F

                      CURRENCY FLUCTUATIONS





In the event of fluctuations in the Yen/Dollar "Bank Exchange Rate," the prices
listed in Schedules A and C shall be automatically adjusted in the following
manner. These adjustments will be made at the time of Purchase Order Placement.
After an order is placed, there will be no further adjustment for additional
"Bank Exchange Rate" fluctuations. The "Bank Exchange Rate" shall be determined
by the previous month's average Yen/Dollar rate calculated from the fifteenth
day of the prior month to the fourteenth day of the current month of selling
rates between the U.S. Dollar and the Japanese Yen as quoted daily in The Wall
Street Journal exchange rate tables of "New York Foreign Exchange Selling
Rates".

If the previous month's average is outside the base rate range [ ]-[ ] Yen per
Dollar, then Kentek shall advise the Customer of the price adjustment for all
purchase orders received after the fourteenth day of the current month. Such
price adjustments shall be in accordance with the attached schedule. Outside of
the ranges indicated, Kentek will adjust accordingly.





<PAGE>   100


                                   SCHEDULE F
                             CURRENCY FLUCTUATIONS
                                  (CONTINUED)

<TABLE>
<CAPTION>
WHEN THE "BANK EXCHANGE RATE" IS:                MIDPOINT PRICE WILL BE:
<S>                                                <C>    <C>  
Greater than [ ] but less than or equal to [ ]      [  ]  Base plus [  ]%

Greater than [ ] but less than or equal to [ ]      [  ]  Base plus [  ]%

Greater than [ ] but less than or equal to [ ]      [  ]  Base plus [  ]%

Greater than [ ] but less than or equal to [ ]      [  ]  Base plus [  ]%

Greater than [ ] but less than or equal to [ ]      [  ]  Base plus [  ]%

Greater than [ ] but less than or equal to [ ]      [  ]  Base plus [  ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base plus [  ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base plus [  ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base plus [  ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base plus  [ ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base plus  [ ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base plus  [ ]%


Greater than [ ] but less than or equal to [ ]     [   ]  Base Price


Greater than [ ] but less than or equal to [ ]     [   ]  Base minus [ ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base minus [ ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base minus [ ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base minus [ ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base minus [ ]%

Greater than [ ] but less than or equal to [ ]     [   ]  Base minus [ ]%
</TABLE>

GREATER THAN [ ] OR LESS THAN OR EQUAL TO [ ] -- KENTEK WILL ADJUST ACCORDINGLY.

<PAGE>   101


                           SCHEDULE G

                          PUBLICATIONS





1.)  K30/K30D GUIDE TO OPERATIONS MANUAL

2.)  K30/K30D FIELD SERVICE MANUAL

3.)  K40D QUICK REFERENCE CARD

4.)  K40D USER'S GUIDE

5.)  K40D REFERENCE GUIDE

6.)  K40D FIELD SERVICE MANUAL

             TO BE SUPPLIED AFTER CONTRACT EXECUTION





<PAGE>   102


                           SCHEDULE H

                        SOFTWARE PRODUCTS





STANDARD OPERATING AND EMULATION SOFTWARE




                    PCL 5

                    PROGRAM JOB LANGUAGE (PJL)



OPTIONAL


                    PHOENIXPAGE POSTSCRIPT INTERPRETER





Some of the foregoing are subject to license agreements between Bitstream,
Phoenix Technologies, VS Software and Kentek.




<PAGE>   103


                           SCHEDULE I

                CUSTOMER SERVICE SUPPORT PROGRAM




1    PRODUCT WARRANTIES

2.   CONSUMABLE WARRANTIES

3.   K30/K30D/K31/K31D/K40D PRINTER OUT-OF-WARRANTY PROGRAM

4.   DEFECTIVE MATERIAL RETURN PROCEDURE

5.   TRAINING PROGRAM

6.   TRAINING PROGRAM COURSE ITINERARY

7.   TRAINING RATES

8.   FIELD SERVICE SUPPORT

9.   TECHNICAL MANUALS PRICE LIST




             TO BE SUPPLIED AFTER CONTRACT EXECUTION




<PAGE>   104


                KENTEK INFORMATION SYSTEMS, INC.


                        PRODUCT WARRANTY




Kentek warrants that the Printer Product delivered shall be free from defects
in material and workmanship, under normal use and service, and that any part or
parts found defective within:

     a.   180 days from original shipping date for spare parts
     b.   180 days from original shipping date for high capacity feeders and
          stackers
     c.   2 years from original shipping date for printer engine (when operated
          within specified duty cycle);*

shall be repaired by the Reseller with parts supplied by Kentek or replaced by
Kentek at Kentek's shipping point.

The Reseller will segregate and make available to Kentek at a central location
those parts found defective with a list price exceeding $50.00. The Reseller
will return defective parts freight prepaid. This Product Warranty is
applicable only if the Product has had normal utilization within the
specification, and has been maintained in accordance with recommended
procedures. Any and all other costs in the implementation of this warranty
shall be the responsibility of the Reseller.

The warranty set forth in this Article does not extend to altered units of the
Product or to units of the Product which fail or are damaged after delivery to
the Reseller due to the shipment, handling, storage, operation, use or
maintenance in a manner or environment not conforming to any published
instructions and specifications of Kentek at the time of delivery. Use of any
consumable not specifically supplied by or approved in writing by Kentek shall
constitute a modification of Product and shall void any and all warranties for
both printer and consumable supply product.

* Any repair or replacement of any portion or part of the printer engine
(excluding Consumables, Software, and Accessories) does not decrease or extend
the original two-year warranty period.





<PAGE>   105


                 KENTEK INFORMATION SYSTEMS INC.

                  CONSUMABLE WARRANTY PROCEDURE



The Kentek product warranty is contained in the Agreement between Kentek and
the Reseller. There are two parts to the warranty:

a.     Defects due to material and workmanship/out of box/mechanical warranty,
       and;

b.     failure to meet the average specified yield.

The warranty period is ninety (90) days from date of shipment to the Reseller.

Kentek's published specification yields are "average" and the warranty is
measured against the average yield for each type of consumable. If the rated
yield of any consumable is 400,000 prints and that consumable produces prints
within specification at the rated life then it is considered to have reached
its specified life. For example, if the customer has four K30 cleaners and two
make 425,000 prints and two make 375,000 prints, then no warranty credit is
applicable as the average is the specified 400,000.

In the event a customer returns consumable item(s) short of average life, the
customer should be given a credit only for the unused portion; i.e., 325,000
prints/400,000 average yield x unit selling price.

Kentek will work with the Reseller to provide credits where the population of
supplies does not meet the average life specified. Credits (or replacement
units) must be provided to the customer by the Reseller.

At Kentek's option, the Reseller will segregate consumables found defective and
return the defective consumables to Kentek freight prepaid. A Kentek Consumable
Warranty Return Form (sample attached) is required for each consumable being
returned for warranty evaluation.

This product warranty is applicable only if the product has had normal
utilization within specification and returned in a protective shipping
container. Toner cartridges must always be removed from Developers, and
Developers must be resealed prior to shipment. Should the defective consumable
be received damaged due to unsafe packaging warranty consideration will become
void.





<PAGE>   106


KENTEK                                                    Consumable Warranty 
                                                                   Claim Form 
Receiving Department                                                          
2845 29th Street                                            Mfg RMA #:_______ 
Boulder, CO  80301                            Distributor Reference #:_______
(303) 440-50500 / Fax (303) 440-9600          Date:                 
                                                   __________________________ 

MASTER DISTRIBUTOR/VAR                    END USER REPORTING FAILURE 
NAME & ADDRESS                            NAME & ADDRESS             

_____________________________________     _____________________________________

_____________________________________     _____________________________________

_____________________________________     _____________________________________

Contact:_____________________________     Contact:_____________________________
Tel. #_______________________________     Tel. #_______________________________

Printer Model:_______________________     Consumable Part Desc.________________
Printer S/N#_________________________     Consumable P/N_______________________
                                          Consumable S/N_______________________

Did the consumable fail on installation?   (check one)   _____yes _____no
If no, provide page count when consumable installed: _________ & when consumable
failed_______________________________

DESCRIPTION OF PROBLEM:________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________
                       
CORRECTIVE ACTION:_____________________________________________________________

_______________________________________________________________________________

1.   Attach test prints and the error log to this form. (Instructions
     describing how to produce test prints and the error log are found in the
     Guide to Operations.)

2.   Contact manufacturer's Customer Service Department (303) 440-5500 to
     obtain a Return Material Authorization (RMA) number. This logs your
     consumable claim and expedites evaluation.

PACKAGING INSTRUCTIONS

When you return consumables, package the consumable following the packing
instructions closely as listed in Appendix C of the Guide to Operations. If the
consumable is damaged during shipping due to improper packaging, your warranty
claim may be invalid.
- -------------------------------------------------------------------------------
MANUFACTURER CONSUMABLE EVALUATION

Assessment of Failure:_________________________________________________________

Explain any descrepancy between claim and assessment:__________________________

Credit Recommendation:________________Signature:____________________Date:______

Authorized Credit %:__________________Mgr. Signature:_______________Date:______




<PAGE>   107
                        KENTEK INFORMATION SYSTEMS, INC.
                        OUT OF WARRANTY EXCHANGE PROGRAM

Kentek offers an out-of-warranty exchange program whereby Kentek will repair or
provide a replacement on any of the items listed below.



<TABLE>
<CAPTION>
       DESCRIPTION                            EXCHANGE COST
       -----------                            -------------

<S>                                              <C>    
K30 EIGS BOARD (300 dpi, 4Mb)                    $  [    ]
K30 MIGS BOARD (300 dpi, 8Mb)                    $[      ]

K30D EIGS BOARD (300 dpi, 4Mb)                   $  [    ]
K30D MIGS BOARD (300 dpi, 8Mb)                   $[      ]

K31S/D RIGS I BOARD (300 dpi, 12Mb)              $  [    ]
K31S/D RIGS II BOARD (300 dpi 16Mb)              $[      ]

K40D RIGS I BOARD (300 dpi, 12Mb)                $  [    ]
K40D RIGS II BOARD (300 dpi, 16Mb)               $[      ]

PCL BOARD (300 dpi)                              $  [    ]
PCL VIDEO I/F BOARD (240/300 dpi)                $  [    ]

K30/K30D AC POWER SUPPLY (Universal)             $  [    ]
K30/K30D DC POWER SUPPLY (Universal)             $  [    ]
K40D DC POWER SUPPLY                             $  [    ]

</TABLE>

NOTE:  Prices listed above are Net (No Discount Allowed).

       Turn around time is 30 days from receipt of goods.

WARRANTY - 90 Days on All Exchange Items.



o    To participate in this program the customer must contact the "Customer
     Service Department" at Kentek corporate headquarters.

o    Request a "Return Material Authorization" (RMA) number and provide Kentek
     with a purchase order number authorizing the exchange.

o    The customer is required to return the defective part to Kentek corporate
     headquarters, freight prepaid, in a protective shipping container. Should
     the defective part be received damaged due to unsafe packaging, the retail
     parts price will be applied to the exchange order.




<PAGE>   108
                       KENTEK INFORMATION SYSTEMS, INC.
                                      
                     DEFECTIVE MATERIAL RETURN PROCEDURES



The customer must first contact Kentek corporate headquarter's "Customer
Service Department" requesting a "Return Material Authorization" (RMA) number.
Kentek's Customer Service Department will collect the necessary data from the
customer to process the return of material accordingly.

The assigned RMA number must be referenced on the outside of the shipping
container. Return Material Tags are to be used by the customer when returning
defective parts either Under Warranty or for Exchange to Kentek corporate
headquarters, freight prepaid.

Repairs will be made or a replacement part will be sent to the customer within
30 days from receipt of defective part.

Warranty Items

If the returned defective item under warranty tested is found to be operational
(not defective), Kentek will notify the customer of our findings and a charge
for Kentek's testing and evaluation time will be billed back to the customer at
$75 per hour minimum of two (2) hours.

Exchange Program

Kentek has identified a selected list of material such as printed circuit
boards and power supply units that can be exchanged for a repaired and tested
replacement with a 90-day warranty given by Kentek.

The procedure to return defective items under our Exchange Program is the same
as the procedure for returning defective items under warranty as stated above.




<PAGE>   109
                       KENTEK INFORMATION SYSTEMS, INC.
                                      
                          KENTEK'S TRAINING PROGRAM


Kentek will provide the customer with one (1) training class, with up to six
(6) students at no cost. The class will be held at Kentek corporate
headquarters. Any additional training requested by the customer will be offered
at a "most favored status" price.

In the event the customer requests the training class to be held anywhere other
than Kentek corporate headquarters, the customer will reimburse Kentek for all
travel and living expenses incurred by our training personnel during the
course.

The rates for additional training courses, if required, are included as a part
of this Schedule.

The rates for field service support from Kentek to resolve a problem at the
customer's location or at a printer location, are included in this Schedule I.

A minimum of four (4) weeks notice is required to schedule a training course at
either Kentek's or the customer's training location.




<PAGE>   110
                       KENTEK INFORMATION SYSTEMS, INC.
                                      
                  PRINTER TRAINING PROGRAM COURSE ITINERARY


The training session will be a 3-day course and classes will be a standard
eight (8) hour day.

Class size is limited to six (6) students. In order to provide the most
effective possible training, we urge a minimum of three printers be made
available to the students.

Class subjects will consist of:

- - Operational overview
- - Component/assembly layout
- - Xerographic process
- - IGS & PCL block diagram of operations
- - Communication theory RS 232, 422, Centronics (Host Connections)
- - Diagnostics ... how they work and how to use them
- - Problem/failure determination (flow chart)
- - TAGS (Troubleshooting Analysis Guide) familiarization

Field Service manuals are available for each student consisting of:

- - Installation/operational manual 
- - Maintenance manual 
- - Removal/replacement procedure 
- - Self diagnostic test procedure 
- - Troubleshooting 
- - Electrical adjustments 
- - Parts catalog 
- - Technical bulletins

Special training material such as schematics, diagrams and technical data will
be issued to each student.

Troubleshooting time will be scheduled to allow the students to perform failure
analysis on the printer. Kentek parts are sold as assemblies, not components,
so this class will teach each student to repair printers down to the assembly
level.




<PAGE>   111
                       KENTEK INFORMATION SYSTEMS, INC.
                                      
                                TRAINING RATES
                 (Does Not Apply to Initial Training Course)



1.   $500.00 - Hardware or Software Training Course Fee

2.   $750.00 - Hardware and Software Training Course Fee

3.   $250.00 - Per Day per Student.

Note:

Should the course be held anywhere other than at Kentek corporate headquarters,
all travel and living expenses incurred by our instructor will be billed to the
customer in the following manner:


<TABLE>
<S>                          <C>
Air Fare.................... Coach for domestic flights
                             Business for international flights

Rent-A-Car.................. $200.00 per week (Estimate)

Hotel....................... $100.00 per day (Estimate)

Meals....................... $ 30.00 per day (Estimate)

Telephone, Misc., Etc.
</TABLE>





<PAGE>   112
                       KENTEK INFORMATION SYSTEMS, INC.
                                      
                         FIELD SERVICE SUPPORT RATES


1.   $110.00 per hour - portal to portal
     (8:00 AM to 4:30 PM - Monday through Friday)

2.   $140.00 per hour - portal to portal
     (after 4:30 PM and before 8:00 AM Monday through Friday)

3.   $190.00 per hour - portal to portal
     (anytime Saturday, Sunday and holidays)

4.   Mileage charge: $0.35 per mile (plus tolls)

5.   Parts Cost - (See Suggested Retail Spare Parts Price list)

NOTE:     The rates listed above only apply within a 125-mile radius to
          either Kentek's corporate headquarters and/or Kentek's Regional
          support off ices.
         
          Locations:
         
          Eastern Region - Melbourne, Florida
         
          Western Region - San Jose, California



Kentek service rates and mileage charges include any and all travel to the
customer's office/printer location and return to Kentek headquarters.

All other areas will be charged for travel and expenses.







<PAGE>   113
                       KENTEK INFORMATION SYSTEMS, INC.
                                      
                         TECHNICAL MANUAL PRICE LIST



<TABLE>
<CAPTION>
PART NUMBER  DESCRIPTION                                NET PRICE
- -----------  -----------                               ----------
<S>          <C>                                       <C>    

61050010     K30/K30D Operator/Installation Manual     $    25.00

62050010     K30/K30D Field Service Manual             $    75.00


81250001     K40D User's Guide                         $    10.00

81250002     K40D Field Service Manual                 $    75.00

81250003     K40D Quick Reference Card                 $     2.00

81250004     K40D Reference Guide                      $    20.00



51020818     Print Quality Masters                     $   500.00
</TABLE>



NOTE:             No discounts applied to manuals.



<PAGE>   114

                                AMENDMENT NO. 1
                                     To The
                               PURCHASE AGREEMENT
                                 By and Between
                 TALLY PRINTER CORPORATION ("Tally" or "Buyer")
                                      And
                  KENTEK INFORMATION SYSTEMS, INC. ("KENTEK")
                              Dated April 16, 1997
================================================================================

         WHEREAS, Tally and Kentek have entered into an agreement entitled
"Purchase Agreement," dated April 22, 1995 ("Agreement"); and

         WHEREAS, the parties now desire to amend the Agreement to change
certain terms and conditions of the sale and purchase of Products; and

         WHEREAS, the Agreement would expire unless extended by written
agreement of the parties;

         NOW THEREFORE, in consideration of the covenants and agreements herein
contained, SNPS and Kentek hereby agree as follow:

         1.      All capitalized terms not defined in this Amendment shall have
                 the meaning ascribed thereto in the Agreement.

         2.      Section 3.2 Term of Agreement, shall be amended to read "The
                 term of this Agreement shall commence upon the date hereof and
                 shall continue for twelve (12) months from such date (April
                 16, 1998), unless earlier terminated or extended by written
                 agreement of the parties (the "Term").

         3.      Section 13.3 End-of-Life Parts Purchasing, shall be amended to
                 read "Buyer may purchase spare parts from Kentek to provide
                 service to its customers. In the event Buyer or Kentek
                 terminate this Agreement, if any Product under this Agreement
                 is discontinued by Kentek, or if the annualized run rate
                 purchased over a period of six months is less than 200
                 printers per year activating an End-of-Life condition, then
                 Kentek agrees to allow Buyer to purchase Parts and Consumables
                 at the new category (non-OEM designation) current prices for a
                 period of up to five (5) years for the purpose of supporting
                 Buyer's installed base.



<PAGE>   115
Except as provided above, the Agreement shall in all other respects remain
unchanged and shall continue in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be
executed in duplicate by their duly authorized representatives as of the dates
subscribed.

TALLY                                    KENTEK INFORMATION 
                                         SYSTEMS, INC.

/s/ ALAN PINSON                          /s/ [ILLEGIBLE]
- --------------------------               ----------------------------

Vice President                                     CEO
- --------------------------               ----------------------------
       Title                                      Title

                                                 6/4/97
- --------------------------               ----------------------------
       Date                                       Date




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