SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(MARK ONE)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1998
[ ] 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: 0-20777
XIONICS DOCUMENT TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 04-3186685
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
70 BLANCHARD ROAD
BURLINGTON, MASSACHUSETTS 01803
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (781) 229-7000
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
COMMON STOCK, $.01 PAR VALUE PER SHARE
(TITLE OF CLASS)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No _
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. []
The aggregate market value of the registrant's voting stock held by
non-affiliates of the registrant as of September 25, 1998, was $42,612,839,
based on the last sale price as reported by The Nasdaq Stock Market.
As of September 25, 1998, there were 12,393,941 shares of the registrant's
common stock issued and 12,175,097 shares of the registrant's common stock
outstanding.
<PAGE>
XIONICS DOCUMENT TECHNOLOGIES, INC.
1998 FORM 10-K/A
AMENDMENT NO. 1
TABLE OF CONTENTS
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K......3
SIGNATURE.....................................................................6
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
Item 14(a) The following documents are filed as part of this Annual
Report on Form 10-K.+
Item 14(a)(1) See "Index to Consolidated Financial Statements and
Supplementary Data" at Item 8. of this Annual Report on
Form 10-K.
Item 14(a)(2) Financial Statement Schedule Included in Part IV of
this Annual Report on Form 10-K.
Schedule II Valuation and Qualifying Accounts
Other financial statement schedules have not been
included because they are not applicable or the
information is included in the financial statements or
notes thereto.
ITEM 14(a)(3) EXHIBITS.
The following exhibits are incorporated herein by reference:
EXHIBIT NUMBER DESCRIPTION
3.1 Amended and Restated Certificate of Incorporation of the
Registrant (filed as Exhibit 3.1 to the Company's Registration
Statement on Form S-1 dated May 28, 1996, File No. 333-4613)
3.2 Amended and Restated By-Laws of the Registrant (filed as
Exhibit 3.2 to the Company's Registration Statement on Form S-1
dated May 28, 1996, File No. 333-4613)
4.1 Specimen Certificate for shares of the Registrant's stock
(filed as Exhibit 4.1 to the Company's Registration Statement
on Form S-1 dated May 28, 1996, File No. 333-4613)
10.1 1996 Stock Option Plan and related form of stock option
agreement (filed as Exhibit 10.1 to the Company's Registration
Statement on Form S-1 dated May 28, 1996, File No. 333-4613)
10.2 1995 Stock Option Plan and related form of stock option
agreement (filed as Exhibit 10.2 to the Company's Registration
Statement on Form S-1 dated May 28, 1996, File No. 333-4613)
10.3 1993 Stock Option Plan and related form of stock option
agreement (filed as Exhibit 10.3 to the Company's Registration
Statement on Form S-1 dated May 28, 1996, File No. 333-4613)
10.4 1996 Director Stock Option Plan (filed as Exhibit 10.4 to the
Company's Registration Statement on Form S-1 dated May 28,
1996, File No. 333-4613)
10.5 1996 Employee Stock Purchase Plan (filed as Exhibit 10.5 to
the Company's Registration Statement on Form S-1 dated May 28,
1996, File No. 333-4613)
10.6 Credit Agreement, dated September 25, 1995, between the Company
and Fleet Bank of Massachusetts, N.A. (filed as Exhibit 10.8
to the Company's Registration Statement on Form S-1 dated
May 28, 1996, File No. 333-4613)
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10.6.1 Modification of Credit Agreement, dated August 21, 1996,
between the Company and Fleet National Bank (filed as
Exhibit 10.8.1 to the Company's Registration Statement on
From S-1 dated May 28, 1996, File No. 333-4613)
10.7 Computer Technology License Agreement between Phoenix
Technologies Ltd. and Hewlett-Packard Company for PhoenixPage
Software Products dated September 30, 1994 as amended
(including amended and restated Amendment No. 1 between the
Registrant and Hewlett-Packard, effective as of March 8, 1996)
(filed as Exhibit 10.10 to the Pre-effective Amendment No. 1 to
the Company's Registration Statement on Form S-1 dated June 7,
1996, File No. 333-4613)
10.8 Lease by and between the Registrant and E & F Realty Associates
Limited Partnership of Property at One Twenty Eight Corporate
Center, 70 Blanchard Road, Burlington, Massachusetts, dated
November 29, 1994, including First Amendment to Lease, dated
August 9, 1995 (filed as Exhibit 10.11 to the Company's
Registration Statement on Form S-1 dated May 28, 1996, File No.
333-4613)
10.9 Stock Option Agreement between the Company and Robert E. Gilkes
(filed as Exhibit 10.13 to the Company's Registration Statement
on Form S-1 dated May 28, 1996, File No. 333-4613)
10.10 Form of Invention and Nondisclosure Agreement (filed as Exhibit
10.16 to the Company's Registration Statement on Form S-1 dated
May 28, 1996, File No. 333-4613)
10.11 Second Amendment dated August 1, 1997 to Lease by and between
the Company and E&F Realty Associates Limited Partnership of
Property at One Twenty Eight Corporate Center, 70 Blanchard
Road, Burlington, Massachusetts dated November 29, 1994 (filed
as Exhibit 10.13 to the Company's Annual Report on Form 10-K
dated September 29, 1997)
10.12 Securities Purchase Agreement between WaveMark Technologies,
Inc. and the Company dated June 20, 1997 (filed as Exhibit
10.14 to the Company's Annual Report on Form 10-K dated
September 29, 1997)
10.13 Stock Option Agreements between the Company and Peter J.
Simone dated June 27, 1997 (filed as Exhibit 10.15 to the
Company's Annual Report on Form 10-K dated September 29, 1997)
99.1 Agreement for the Purchase of Shares, dated as of February 21,
1997, by and between the Company and Wilfried Welsch and Oliver
Fohr (filed as Exhibit 99.1 to the Company's Current Report on
Form 8-K filed March 7, 1997)
The following is a list of exhibits filed as part of this Annual Report on
Form 10-K+.
<PAGE>
EXHIBIT NUMBER DESCRIPTION
10.14 Stock Purchase Agreement between Xionics, Inc., Xionics
Document Technologies, Inc., Seaport Imaging, et al
dated August 13, 1997
10.15 Employment Agreement between the Company and Larry Krummel
dated September 5, 1998
10.16 Letter agreement between the Company and Robert E. Gilkes
dated February 24, 1998
10.17 Technology and Services Agreement between the Company and
Hewlett-Packard Company dated June 19, 1998*
10.18 Rights Agreement between the Company and BankBoston N.A.
dated April 15, 1998
10.19 Second Loan Modification Agreement between the Company
and Fleet National Bank dated December 31, 1997
10.20 Employment Agreement between the Company and Peter J. Simone
dated March 18, 1998
10.21 Letter Agreement between the Company and Paul R. Low dated
March 16, 1998
10.22 Form of Stock Option Agreement pursuant to the Company's 1993,
1995 and 1996 Stock Option Agreements
11.1 Statement re Computation of Per Share Earnings
21.1 Subsidiaries of the Registrant
23.1 Consent of Arthur Andersen LLP
27 Financial Data Schedule
------------------------------------------------------------
+ With the exception of Exhibit 10.17, which is filed herewith,
all exhibits and other documents were filed with the Company's
Annual Report on Form 10-K on September 28, 1998
* Confidential treatment requested for certain portions of this
exhibit
ITEM 14(B) REPORTS ON FORM 8-K.
On April 15, 1998, the Company filed a Current Report on Form 8-K,
announcing the resignation of Gerard T. Feeney as Vice President - Finance,
Chief Financial Officer and Treasurer, and the appointment of Robert L. Lentz
as Senior Vice President - Finance and Administration, Chief Financial Officer
and Treasurer. On April 21, 1998, the Company filed a Current Report on Form
8-K, announcing the adoption of a Shareholder Rights Plan.
<PAGE>
SIGNATURES
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, in the City of
Burlington, Commonwealth of Massachusetts, on this 5th day of October, 1998.
XIONICS DOCUMENT TECHNOLOGIES, INC.
By: /s/ Robert L. Lentz
-----------------------------------------
ROBERT L. LENTZ
SENIOR VICE PRESIDENT - FINANCE & ADMINISTRATION,
CHIEF FINANCIAL OFFICER AND TREASURER
Exhibit 10.17
TECHNOLOGY AND SERVICES AGREEMENT
TECHNOLOGY AND SERVICES AGREEMENT ("Agreement") entered into June 19, 1998 (the
"Effective Date") between XIONICS DOCUMENT TECHNOLOGIES, INC., 70 Blanchard
Road, Burlington, MA 01803 U.S.A. ("Xionics") and HEWLETT-PACKARD COMPANY,
11311 Chinden Boulevard, Boise, ID 83714 ("Customer").
Xionics owns or licenses software and technology products useful for the
control of printers and other electronic imaging devices, and provides certain
related engineering, maintenance and other services. Customer is an Original
Equipment Manufacturer ("OEM") of such devices (the specific devices referenced
in Attachments to this Agreement are referred to as "Customer's Devices" or
"Devices"), and wishes to license certain software and technology products,
and/or obtain certain related services from Xionics. Accordingly, Xionics and
Customer agree as follows:
1. Products and Services. Customer has elected to receive the products and/or
services indicated by a check mark below. The parties agree to be bound by this
Agreement and the applicable Attachments and Exhibits to this Agreement.
Attachments
[x] A. Source Code License
[x] B. Source Code Maintenance Program
[x] C. Development Activities
Exhibits
[x] A. Preliminary Project Outline
[x] B. Fees and Payment
2. General Terms and Conditions. Xionics and Customer agree to all of the
following terms and conditions, which apply to all of the indicated Attachments
as though reproduced in full in each of them.
a. Term and Termination. This Agreement shall remain in effect for an initial
term beginning at the Effective Date and ending December 31, 2000, and
thereafter so long as Customer continues to ship any Device containing software
or technology products licensed from Xionics under this Agreement. Either party
may terminate this Agreement, or any Attachment, if the other commits a
material breach of any of its obligations hereunder (or under the applicable
Attachment) which is not cured within 30 days after notice thereof, or becomes
bankrupt or insolvent. Upon any termination, Customer will return or destroy
all copies of software and documentation received from Xionics under the
terminated Attachment(s), except that it may retain one copy for archival
purposes, and may continue to ship finished products containing Xionics
software or technology that are in inventory at the time of termination. Upon
any termination, Xionics will return or destroy all copies of software and
documentation received from Customer under the terminated Attachment(s) except
to the extent Xionics may retain continuing rights to any such materials under
this Agreement.All provisions of this Agreement and its Attachments which by
their nature should survive termination, including but not limited to Section
2. (f)(ii), shall do so. Any renewable rights to receive products or services
under the terms of the applicable Attachments may be renewed by submittal and
acceptance of Customer's purchase order in the appropriate amount; provided,
that any printed terms of Customer's purchase order inconsistent with this
Agreement or any of its Attachments shall be deemed excluded.
<PAGE>
b. Price and Payment. Customer agrees to pay all amounts set forth in Exhibit
B. Unless otherwise provided in an Attachment, all such amounts are due and
payable within 37 days after the date of Xionics' invoice. All amounts payable
to Xionics are net of taxes (other than taxes on Xionics' net income), duties,
and similar impositions. To the extent that a foreign government requires
Customer to withhold income tax from payments of royalties or license fees,
Customer may do so but only if it promptly applies for any available exemptions
or exclusions from such withholding tax and supplies Xionics with valid
certification that the tax withheld has been paid to the applicable taxing
authority. Upon mutual agreement (which shall not be unreasonably withheld) of
the parties, and with reasonable notice to HP, Xionics may audit Customer's
books and records relating to sales of devices containing software or
technology licensed from Xionics once per year, at Xionics' expense.
c. Ownership and Confidentiality. (a)Unless otherwise provided in this
Agreement, all intellectual property contained in the products licensed
hereunder, or created by Xionics via the services performed hereunder, is the
property of Xionics. (b) All intellectual property (including modifications to
the Program) developed by Customer shall be and remain the sole and exclusive
property of Customer. (For each such modification to the Program, Customer
shall determine whether it wishes to permit Xionics to include that
modification in the core source code of Xionic's Programs and shall notify
Xionics accordingly. If Xionics agrees to incorporate such a modification in
its core Programs, Customer shall promptly deliver the source code of the
modification to Xionics and thereupon shall be deemed to have granted Xionics a
perpetual, worldwide, nonexclusive, fully-paid license to use, reproduce,
sublicense and distribute such modifications as part of its core Programs.
(c) All modifications to the Programs that are jointly developed by Xionics and
Customer shall be jointly owned without accounting. In the event that either
party applies for a patent on a joint modification, it shall apply in the names
of both parties. In the event of any uncertainty or dispute as to whether a
particular modification was jointly developed and therefore jointly owned, the
lead members of each party's project management team shall negotiate with one
another in good faith to resolve the question of ownership and, if necessary,
shall escalate the issue through successively higher levels of the parties'
management until resolution is reached.
(d) Each party agrees to hold in strict confidence all Confidential Information
it receives from the other party hereunder, and to maintain such information
for use only by its employees and contractors who have signed confidentiality
agreements and only in connection with the products and services provided
hereunder, except to the extent it can be documented that such information is
generally known in the computer industry, became known to that party other than
through a breach of an obligation of confidence, or is independently discovered
or developed by the receiving party without reference to information received
from the other party. For purposes of this Agreement, "Confidential
Information" shall either be marked as such or, if orally disclosed, identified
as Confidential Information in a written memo within 30 days after disclosure.
d. Warranty, Indemnification and Limitation of Liability. Each Attachment
contains the provisions relating to warranty, indemnification, and limitation
of liability that apply to the specific products or services it covers. In
general, each party's liability to the other for any cause shall not exceed the
total amount paid by Customer under this Agreement and its Attachments.
e. Trademarks/Copyrights; Publicity. Customer may use Xionics trademarks on or
in connection with such Devices, in accordance with Xionics' trademark usage
guidelines provided to Customer from time to time. Both parties shall have the
right to announce the existence (though not the terms) of this Agreement at any
time, and upon Customer's announcement of a Device incorporating software or
technology provided hereunder Xionics shall have the right to state publicly
that Xionics has licensed software or technology for that Device, and to refer
to the Device by Customer's or its OEM's name for it provided that no
prerelease code names shall be used.. Customer agrees to retain all Xionics and
third-party copyright notices that are present in any products received
hereunder in all copies of such products used in or with Customer's Devices. To
the extent that HP copyright notices appear on materials received by Xionics
under this Agreement, such notices shall similarly be reproduced by Xionics.
<PAGE>
f. General. (i) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
excluding its conflict of laws rules.
(ii) Export. Customer shall not export any of the software or technology
licensed from Xionics, directly or indirectly, to any person or country in
violation of any United States statute or regulation in effect at the time of
export, including but not limited to the regulations of the Bureau of Export
Administration of the United States Department of Commerce, nor shall it permit
any of its customers or resellers to do so.
(iii) Assignment. Neither party may assign its rights or obligations under
this Agreement without the prior written consent of the other, which shall not
be unreasonably withheld; except that such agreement may be assigned by
operation of law and Xionics may assign its right to receive payments
hereunder. This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and permitted assigns.
(iv) Entire Agreement. This Agreement and its Attachments represent the
parties' entire agreement and understanding, and supersede all other written
and/or oral agreements or understandings, relating to the subject matter
hereof. Neither party has entered into this Agreement in reliance on any
representations of fact or opinion, which are not expressly set forth herein.
(v) Amendment and Waiver. This Agreement may be amended only by a writing
signed by authorized representatives of each party. Any delay or failure of a
party to require performance of any provision shall not prevent it from later
enforcing the same or any other provision of this Agreement or its Attachments.
(vi) Severability. If any provision of this Agreement is found invalid, it
shall be deemed modified to eliminate the invalid portion(s). The remaining
provisions of this Agreement shall not be affected.
(vii) Relationship of the Parties. The parties are independent
contractors, and neither party shall have any right or power to create any
obligation or responsibility on behalf of the other party.
(viii) Notice. Permitted or required notices shall be given to each party
at the address shown above, or any new address of which the other party is duly
notified, by mail, or by fax or electronic mail with receipt electronically
confirmed.
(ix) Choice of Language. The governing language of this Agreement and its
Attachments is English.
<PAGE>
IN WITNESS WHEREOF, the parties, by their authorized representatives, have
entered into this Agreement as of the Effective Date.
XIONICS DOCUMENT TECHNOLOGIES, INC.
By: /s/ Robert L. Lentz
-----------------------------
Name: Robert L. Lentz
Title: Senior Vice President
Date: June 19, 1998
CUSTOMER
By: /s/ Bruce Schrepple
-----------------------------
Name: Bruce Schrepple
Title: Controller
Date: June 19, 1998
<PAGE>
Attachment to Technology and Services Agreement dated June 19, 1998
ATTACHMENT A
SOURCE CODE LICENSE
This Source Code License is entered into between Xionics and Customer as of
June 19, 1998 and represents their complete understanding and agreement with
regard to its subject matter.
1. Definitions. "Source Code" means the human-readable version of the
C-language software program(s) listed in Section 2. below, which are licensed
for use in the Customer's Device(s) specified in the Source Code License Fee
Schedule below. "Programs" means the specific software programs listed in
Section 2. below. All other capitalized terms shall have the meanings accorded
them in the Agreement.
2. Deliverables. Xionics agrees to deliver Source Code representing the
following Programs on the schedule set forth in Exhibit A or as otherwise
mutually agreed between the parties in writing:
*
*
3. License Grant and Restrictions. a. Subject to all of the terms and
conditions of the Agreement and this Attachment, Xionics grants to Customer a
non-exclusive, personal, worldwide license to (i) use and modify the Source
Code of the Programs for the sole and exclusive purpose of enabling the
Programs to function in Customer's Device(s), and (ii) effective upon
completion of the project outlined in Exhibit A, reproduce, manufacture,
sublicense and distribute * object code versions of the modified Programs,
solely as embedded in the firmware of Customer's Devices and for no other
purpose whatsoever. For purposes of this Section 3., "Customer's Devices" shall
mean color and monochrome electrophotographic printers produced by Customer's
Boise LaserJet Solutions Group only. The right to receive new generations or
new versions of the Programs incorporating substantial new or enhanced
functionality not described in Exhibit A (for example (but not limited to) *)
is not included in the licenses granted above. (See Attachment B for Customer's
rights with respect to such new or enhanced functionality.)
b. The unmodified Source Code shall belong exclusively to Xionics at all times
except as otherwise set forth in this Agreement. Certain mutually agreed upon
modifications to the Source Code shall be deemed licensed to Customer on an
exclusive basis, except that modifications which the parties mutually agree
correct core errors in the Source Code shall be delivered to Xionics and
Xionics shall be free to use and distribute them without restriction. Any
modifications to the Source Code which shall be exclusively licensed to
Customer shall be identified in a written document signed by both parties.
c. Customer agrees not to disclose or transfer the Source Code owned by Xionics
to anyone without the express written consent of Xionics. Customer may disclose
object code versions of the modified Programs to an authorized manufacturer or
subcontractor for purposes of reproducing such object code in firmware intended
for inclusion in Customer's Devices. Customer further agrees not to use the
Programs delivered hereunder as a basis of future page description language
implementations without fair compensation to Xionics.
<PAGE>
4. Acceptance. Customer may inspect the Source Code for 60 days after its
receipt from Xionics and may reject the Source Code during this time, and
receive a refund of any amounts actually paid prior to such rejection, if the
Source Code displays more than minimal errors or materially fails to conform to
its published specifications. Acceptance shall be deemed to occur on the 61st
day after Customer's receipt of the Source Code unless Customer has previously
notified Xionics of problems with the Source Code.
5. Fees and Payment. Customer agrees to pay the Fees connected with the
licenses granted herein, as shown in Exhibit B, including Fees and License
and Support Fees. Subject to Xionics' successful completion of the Development
Activities described in Attachment C, all such license and support fees shall
be guaranteed and non-refundable, and represent the minimum amount due to
Xionics for the licenses granted in Section 3. above, regardless of the number
of units of Customer's Devices containing the Programs that are shipped by
Customer.
6. Warranty and Disclaimer. a. Xionics warrants that the Source Code will, for
a period of 90 days after initial receipt by Customer, perform in accordance
with the mutually agreed upon specifications Xionics will, at its expense, use
all reasonable efforts to correct any errors in the Source Code reported by
Customer that cause it not to perform in accordance with such specifications,
provided that (i) such errors are reported to Xionics within the above warranty
period, and (ii) Xionics is able to reproduce the errors either on its own or
with hardware or software furnished by Customer. b. Xionics does not warrant
that the Source Code will meet Customer's requirements, or that its operation
will be uninterrupted or error-free. EXCEPT FOR THE EXPRESS WARRANTIES SET
FORTH IN THIS AGREEMENT, XIONICS DISCLAIMS ANY AND ALL EXPRESS WARRANTIES AND
REPRESENTATIONS, AND ANY AND ALL IMPLIED WARRANTIES INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
7. Certification. Prior to Customer's first commercial shipment of a Device
containing object code versions of the Programs, Customer shall submit such
Device (or, with Xionics' prior approval, hard copy output from such Device) to
Xionics for quality certification. Xionics will test such Device and notify
Customer of any improvements in output quality that must be made prior to
shipment. First-pass certification testing of each Device is free of charge;
subsequent certification testing will be charged at Xionics' then-current time
and materials rate.
* Confidential treatment requested
<PAGE>
8. Maintenance and Support. Maintenance and support of the Source Code will be
provided as described in Attachment B.
9. Indemnification. a. Xionics will indemnify and defend Customer against any
claims that the Source Code infringes any patent, copyright, trademark, trade
secret or other intellectual property right of a third party existing under the
laws of the United States, Canada, Japan or any member state of the European
Union, provided that Customer gives Xionics prompt notice of and reasonable
assistance in defending such claims. Xionics may, in its discretion, replace
Source Code that is the subject of a claim or threatened claim of infringement
with non-infringing object code with similar functionality, or modify it so
that it is not infringing; provided, that if neither is feasible Xionics may
withdraw the Source Code and give Customer a refund of any technology access
fees previously paid for the infringing Source Code. Xionics is not obligated
to indemnify or defend Customer against any claim of infringement that would
not have arisen but for Customer's modification of the Source Code or which
arise solely as the result of object code versions thereof operating in
conjunction with Customer's Device. Xionics also agrees to give HP notice
within 30 days after Xionics receives any bona fide claim that Source Code may
be in violation of third party intellectual property rights. b. Customer agrees
to indemnify and defend Xionics against any claim of infringement brought
against Xionics based on Customer's modification of the Source Code or the
operation of object code versions of the Source Code in Customer's Device,
which claim would not have arisen but for such modification or operation with
Customer's Device, in the same manner and subject to the same limitations
provided in subparagraph a.
10. Limitation of Liability. Neither party shall be liable for any indirect,
consequential or incidental damages, including damages from lost profits, lost
data and the like, arising out of the use or inability to use the Source Code,
even if advised of the possibility of such damages.
11. General. This Attachment is made subject to all of the General Terms and
Conditions of the Agreement.
<PAGE>
ATTACHMENT B
SOURCE CODE MAINTENANCE AND SUPPORT
Xionics agrees to provide maintenance and support services for the Programs
listed in Attachment A on the terms and conditions set forth below.
1. Maintenance. Xionics shall provide the following maintenance deliverables
and services to Customer during the term of this Agreement:
a. Updates. An Update is an updated release of a standard Program, having a
higher number to the right of the decimal point in its release number than the
release of that Program previously delivered to Customer, which is delivered by
Xionics to its maintenance customers generally from time to time for the
purpose of enhancing existing features of the Program, incorporating changes to
industry standards with which the Program is compatible, and correcting
problems identified by Xionics and its customers since the last Update.
Maintenance as defined herein is included in the License and Support Fees set
forth in Exhibit B. Xionics will deliver Updates to Customer when and as they
become available, and expects to deliver an average of two Updates per Program
per year; however, Xionics is not obligated to deliver any specific number of
releases. Customer may obtain a list of available Updates from Xionics at any
time upon request.
b. Maintenance Patch Releases. A Maintenance Patch Release is an update to one
or more source code files of a standard Program to correct a specific problem
or problems that may or may not be known to Customer. It consists of
documentation describing each problem and its solution, access to modified
source files containing the solution, and a description of a test procedure to
confirm the solution. Xionics will deliver Maintenance Patch Releases from time
to time, as the parties mutually and reasonably determine that they are
necessary or desirable.
c. Rapid Response Releases. A Rapid Response Release is a correction for a
single, specific source code problem in a Program, as delivered to Customer by
Xionics, which is identified and reported in writing by Customer and determined
by Xionics to be of a high-priority nature. Customer will cooperate with
Xionics in identifying, verifying, classifying and correcting such problems on
a high-priority basis. Xionics will deliver Rapid Response Releases, in the
form of modified source code files, as they are completed. Problems which the
parties mutually and reasonably determine are not high-priority problems will
be considered for resolution in Maintenance Patch Releases and/or Updates.
d. Training. This Agreement entitles Customer to send a mutually agreed upon
number of engineers to one of Xionics' periodic scheduled Porting Seminars held
at Xionics headquarters if mutually agreed between the parties. Customer's
engineers shall be entitled to attend those classroom modules of each Porting
Seminar, which relate to the Programs licensed. Porting Seminar attendance must
occur while this Agreement remains in effect. Customer will be responsible for
its employees' expenses of attending the Porting Seminar. Customer may purchase
additional training at a discount of 20% off Xionics' then-current standard day
rate for training for up to 3 engineers.
e. Technical Support. (i) Following the completion of the initial
implementation of the Programs in a Customer's Device, XIONICS shall make a
support staff of four (4) persons available through December 31, 2000 in order
to provide ongoing support for Customer's use of the Programs and assistance
with implementation of any enhancements thereto in Customer's Devices. The cost
of such support services is included in the License and Support Fees set forth
in Exhibit B hereto. (ii) At Customer's request, XIONICS shall provide
supplemental support, over and above the four (4) persons described in
subsection (b) above, at the rate of Four Hundred Thousand Dollars ($400,000.00
U.S.) per person-year. All such supplemental support shall be purchased by
Customer in increments of one (1) person-year. Customer will use its best
efforts to give XIONICS at least three (3) months' notice of any request for
such supplemental support.
f. Project Management. Xionics will assign a Project Manager to Customer's
maintenance account, to be responsible for ensuring delivery of all of the
deliverables and services described above.
<PAGE>
2. Upgrades. For so long as this Attachment or any renewal of it remains in
effect, Customer will be eligible to receive upgraded versions of the covered
Programs ("Upgrades") at a mutually agreed-upon price. For purposes of this
Section 2., an Upgrade is either (1) a new version of the Program, containing
significantly enhanced functionality and having a higher number to the left of
the decimal point in its release number than the version previously licensed to
Customer, or (2) a new Program containing material new functionality and
characterized by Xionics as a new product, which may be intended as a
replacement product for an existing Xionics Program.
4. Renewal. This Attachment shall remain in effect for an initial term from the
Effective Date through December 31, 2000. 30 days before the end of the initial
term, Xionics shall issue an invoice to Customer for the then current
applicable Annual Maintenance Fee for the next succeeding year. Customer may
renew this Attachment for the next year by paying such invoice within 37 days
after its receipt. If Customer fails to do so, this Attachment and Customer's
right to receive maintenance services under it shall terminate as of the date
payment of the invoice was due Customer may renew this Attachment for
subsequent years in the same manner. Xionics is not obligated to offer renewal
of maintenance services for a particular Program or Programs at the end of the
initial or any renewal term of this Attachment. In the event that Xionics does
not offer such renewal, Customer shall have the option of (1) upgrading to the
new Program replacing the Program for which maintenance services are
discontinued, if any, under Section 2., or (2) if Customer desires ongoing
maintenance for the discontinued Program, subscribing to Xionics' Engineering
Support Program or such other mutually agreed upon program.
5. Eligibility. a. Only the Program release shown at the beginning of this
Agreement and later releases of the same Program(s) will be maintained under
this Attachment. If Customer desires maintenance services for earlier releases
of a Program, it may obtain such services by subscribing to Xionics'
Engineering Support Program or such other mutually agreed upon program.
b. Xionics reserves the right to withhold maintenance services at any time when
Customer is not current in the payment of all fees and charges due Xionics
under this Attachment, the Agreement, or any other agreements between them.
c. Xionics will use reasonable efforts to provide technical support and error
correction for Customer's authorized modifications of the Programs if Customer
delivers such modifications to Xionics; however, Xionics cannot be responsible
for resolving issues with Customer's code and reserves the right to decline or
discontinue maintenance services with respect to such modifications.
6. Warranty Disclaimer. Except as expressly set forth in this Agreement,
XIONICS DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, WITH REGARD TO THE
SERVICES PROVIDED HEREUNDER, INCLUDING WITHOUT LIMITATION ALL WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARISING OUT OF OR IN
CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT.
7. General. This Attachment is made subject to all of the general terms and
conditions of the Agreement.
<PAGE>
ATTACHMENT C
DEVELOPMENT ACTIVITIES
This Attachment describing Development Activities is entered into between
Xionics and Customer as of June 19, 1998 and represents their complete
understanding and agreement with regard to its subject matter.
1. Definitions. "DES" means the Detailed Engineering Specification which sets
forth the detailed functional and technical specifications for the design of
the Board and/or the customization of the Drivers and/or Programs and
associated time schedules, as the same may be amended from time to time by
mutual agreement of the parties. "ECR" means an Engineering Change Request.
"Development Activities" means the work to be performed by Xionics and/or its
subcontractors hereunder. All capitalized terms not defined above shall have
the meanings ascribed to them in the Agreement or in another Attachment to the
Agreement.
2. Term. This Attachment shall become effective on the date specified above and
shall remain in effect until the Development Activities have been completed by
Xionics and/or its subcontractors and accepted by Customer.
3. Customer's Deliverables. Customer shall deliver to Xionics, within 10 days
after request by Xionics, a specified number of Customer's Devices, detailed
specifications of Customer's Devices, and any other items or information
reasonably requested by Xionics.
4. Development Activities. All Development Activities will be completed on the
basis of Customer's requirement specifications, which are mutually agreed upon
between Customer and Xionics, within a time frame, which is mutually agreed
between the parties. All Customization shall be performed pursuant to the
specifications of and within the schedules set forth in the corresponding DES.
5. Change Requests. Once the parties have agreed upon the specifications
(whether as set forth in a DES or otherwise), Customer may request changes to
such specifications by issuing an ECR. For each ECR, Xionics shall provide to
Customer a proposal for additional work required for the implementation of the
ECR and an estimate of the cost and schedule impact of such additional work
promptly after receipt of the ECR. If such proposal is accepted by Customer,
Xionics shall implement such changes. Xionics may propose ECR's in accordance
with the above procedure provided that such ECR's shall not increase Customer's
payment responsiblities under this Agreement unless mutually agreed between the
parties. Customer shall not unreasonably withhold, delay or condition its
approval for any ECR's proposed by Xionics if such ECR is required in order to
comply with governmental standards, or for safety, environmental reasons.
6. Deliverables. Xionics will deliver the DES and those items described as
deliverables in the DES within the time frame set forth in the DES, or as
mutually agreed between the parties, as applicable. If applicable, when
completed, the DES shall be deemed to be incorporated into this Attachment as
if set forth herein.
7. Testing/Acceptance. Customer acknowledges that the testing and acceptance
criteria for the deliverables prepared hereunder will be described in the
applicable DES. Testing and acceptance criteria for all other deliverables will
be described in an applicable DES or, if not so available, will be mutually
agreed upon between the parties.
8. Ownership. Xionics shall continue to own all Xionics' technology and all
derivative works thereof except as otherwise indicated in this Agreement.
9. Trademarks and Copyright Notices. Neither party will use the company name,
trademarks, or trade names of the other party without its prior written
consent, however each party may publicly state that Customer and Xionics have
entered into this Attachment. Customer agrees to preserve all copyright notices
of Xionics in all materials delivered to Customer hereunder and any and all
copies thereof.
<PAGE>
10. Pricing/Payment. Customer agrees to pay the Fees set forth in Exhibit B to
assist Customer in defraying the costs of the Development Activities.
11. Termination. In the event this Attachment is terminated for any reason,
Customer shall pay Xionics for the actual work on the Development Activities
performed to date, and Xionics shall deliver the Xionics Deliverables prepared
to date, regardless of their state of completion. In such event Customer shall
have a license to use such Deliverables to complete the Development Activities
and licensing activities contemplated hereunder, and if it does so Customer
shall be entitled to an equitable adjustment of the Prepaid Fees proportional
to the amount of work completed by each party, and of the License and Support
Fees proportional to the intellectual property content provided by each party.
HP shall have no further payment obligations except as set forth in this
paragraph.
12. Warranty Disclaimer. Except as set forth in this Agreement, XIONICS
DISCLAIMS ANY AND ALL EXPRESS WARRANTIES OR REPRESENTATIONS RELATING TO ANY
THIRD-PARTY SERVICES, AND ANY AND ALL IMPLIED WARRANTIES INCLUDING, BUT NOT
LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
13. General. a. Neither party shall be responsible for delays and failures in
performance resulting from acts beyond its reasonable control, including acts
of God, strikes, lockouts, riots, acts of war, government regulations, fire,
earthquakes and other disasters. b. This Attachment is made subject to all of
the general terms and conditions of the Agreement.
<PAGE>
Attachment to Technology and Services agreement dated June 19, 1998
EXHIBIT A
TO TECHNOLOGY AND SERVICES AGREEMENT
BETWEEN
XIONICS DOCUMENT TECHNOLOGIES, INC. AND HEWLETT-PACKARD COMPANY
Preliminary Project Outline
I. Description of Source Code Deliverables
Preliminary Feature List: XIONICS' *
Additional features may be jointly specified by the parties through their
respective lead product managers. Any such additional features shall be
mutually agreed upon and thereupon the Detailed Engineering Specification shall
be promptly revised to reflect the additional feature.
II. Description of Development Activities
The development activities to be undertaken by XIONICS for the modification of
* shall be described in the Detailed Engineering Specification to be created by
XIONICS in consultation with Customer and attached to this Agreement.
III. Schedule
Delivery of a final release of * is targeted for *. Interim deliverable
milestones (including at a minimum alpha, beta and functionality-complete
releases), dates and other schedule details shall be mutually determined by the
project management of both parties. The goals and performance criteria for each
milestone will be clearly defined and documented.
IV. Test Plan and Acceptance Criteria
To be described in the Detailed Engineering Specification.
* Confidential treatment requested
<PAGE>
Attachment to Technology and Services agreement dated June 19, 1998
EXHIBIT B
TO TECHNOLOGY AND SERVICES AGREEMENT
BETWEEN
XIONICS DOCUMENT TECHNOLOGIES, INC. AND HEWLETT-PACKARD COMPANY
FEES AND PAYMENT
XIONICS *
Payment No. Payment Date ___ _ Amount Due
Fees*
*
License and Support Fees
*
TOTAL *
Fees, when paid, are non-refundable.
Monthly payments of License and Support Fees will not begin until *
functionality is complete.
* Confidential treatment requested
