SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-K/A
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934. [NO FEE REQUIRED]
For the fiscal year ended October 3, 1997.
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. [NO FEE REQUIRED]
For the transition period from to .
Commission file number 1-9348
QMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 63-0737870
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Magnum Pass, Mobile, Alabama 36618
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (334) 633-4300
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
Common Stock, $.01
par value per share New York Stock Exchange
Rights to purchase shares of Series A New York Stock Exchange
Participating Preferred Stock
Securities registered pursuant to Section 12(g) of the Act: None
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 the 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.
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of November 24, 1997; approximately $30,361,884.
Number of shares of Common Stock outstanding as of November 24, 1997:
10,697,065
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement for its Annual Meeting
of Stockholders to be held January 20, 1998 are incorporated by reference into
Part III.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements
The following financial statements are included in Item 8 of Part
II:
. Consolidated Statements of Operations for the Fiscal Years Ended
October 3, 1997, September 27, 1996, and September 29, 1995.
. Consolidated Statements of Changes in Stockholders' Equity for
the Fiscal Years Ended October 3, 1997, September 27, 1996, and
September 29, 1995.
. Consolidated Balance Sheets at October 3, 1997, and September 27,
1996.
. Consolidated Statements of Cash Flows for the Fiscal Years Ended
October 3, 1997, September 27, 1996, and September 29, 1995.
. Notes to Consolidated Financial Statements for the Fiscal Years
October 3, 1997, September 27, 1996, and September 29, 1995.
2. Financial Statement Schedules
The schedule listed below is included herein immediately after
the signature pages hereto. Schedules not listed below have been
omitted because they are not applicable or the required
information is included in the financial statements or notes
thereto.
Schedule
Number Description
II Valuation and Qualifying Accounts and Reserves for the
Three Fiscal Years Ended October 3, 1997.
The Registrant's independent auditors' report on the financial
statements and financial statement schedule listed above is located at
Item 8 of Part II.
3. Exhibits:
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
<S> <C>
3(a) Restated Certificate of Incorporation, as amended as
of February 17, 19871/ and Certificate of Amendment
thereto filed with the Secretary of State of Delaware
as of January 31, 1991.2/
3(b) Bylaws of Registrant.1/
4(a) The rights of security holders are defined in Articles 4,
9 and 10 of the Restated Certificate of Incorporation of
the Registrant, Articles II, VI and VII of the Bylaws of
the Registrant and the Rights Agreement. [Incorporated
herein by reference to Exhibits 3(a), 3(b) and 4(b),
respectively.]
4(b) Rights Agreement dated November 30, 1988.3/
10(a)(i) Cash or Deferred Retirement Plan, as amended and
restated as of December 17, 1993. 4/*
10(a)(ii)Trust Agreement dated November 1, 1993 relating to
the Cash or Deferred Retirement Plan as amended by
an Amendment to the Trust Agreement dated December
28, 1993. 4/
10(c)(i) Form of 1987 Stock Option Plan, as amended and restated
as of December 13, 1990.2/*
10(c)(ii)Form of First Amendment to the 1987 Stock Option
Plan effective November 7, 1991.2/*
10(d) Supplemental Executive Retirement Plan Agreements
dated September 30 , 1991. 4/*
10(e)(i) Worldwide Master Purchase Agreement 90-01 among
Canon U.S.A., Inc., Canon Europa, N.V. and QMS, Inc.
dated October 1, 1990.5/
10(e)(ii)SX/TX/LX Worldwide Master Purchase Agreement
90-02 among Canon U.S.A., Inc., Canon Europa,
N.V. and QMS, Inc. dated October 1, 1990.5/
10(e)(iii)LBP-20 Purchase Agreement 90-03-LBP-20 between
Canon U.S.A., Inc. and QMS, Inc. dated October 1, 1990.5/
10(h) Form of Executive Agreement entered into with: James L.
Busby, Donald L. Parker, Ph.D., Charles D. Daley and
James K. Doan. 10/*
10(l)(i) Note Agreement dated June 30, 1993 ("1993 Note
Agreement") between QMS, Inc. and Connecticut
General Life Insurance Company for $10,000,000
in aggregate principal amount of QMS, Inc.'s 6.15%
Senior Secured Notes due June 15, 1998.7/
10(l)(ii)Mortgage, Trust and Security Agreement dated
June 30, 1993 between QMS, Inc. and First Alabama
Bank of Mobile, as Trustee, for QMS, Inc. $10,000,000
aggregate principal amount of 6.15% Senior Secured
Notes due June 15, 1998.7/
10(l)(iii)Senior Secured Notes, each dated July 1, 1993,
with CIG & CO. ($3,500,000) and ($3,500,000)
and ZANDE & Co. ($3,000,000).7/
10(l)(iv)Waiver Agreement dated November 23, 1993 waiving
certain provisions of the 1993 Note Agreement. 4/
10(l)(v) Waiver Agreement dated as of February 25, 1994
waiving certain provisions of the 1993 Note Agreement. 8/
10(l)(vi)Waiver Agreement dated as of May 3, 1994 waiving
certain provisions of the 1993 Note Agreement. 9/
10(l)(vii)Waiver Agreement dated as of August 12, 1994
waiving certain provisions of the 1993 Note Agreement. 13/
10(l)(viii)Waiver Agreement dated as of November 30, 1994
waiving certain provisions of the 1993 Note Agreement. 13/
10(m) QMS, Inc. Employee Stock Purchase Plan. 18/
10(o) Stock Option Plan, dated July 30, 1984,11/* together
with First Amendment thereto effective as of January 1,
1987,1/* Second Amendment thereto effective as of
November 10, 1987,1/* Third Amendment thereto
effective as of April 6, 1989,10/* Fourth Amendment
thereto effective as of January 1, 1990,6/* and Fifth
Amendment thereto effective as of November 7, 1991.2/*
10(p) Stock Option Plan for Directors. 12/*
10(q)(i) Share Purchase Agreement dated October 12, 1995
between Jalak Investments B.V. and QMS, Inc. 14/
10(q)(ii)Promissory Note dated October 16, 1995 in the original
principal amount of U.S. $4,000,000 from QMS Europe
B.V. and QMS Australia PTY Ltd. in favor of QMS, Inc. 14/
10(q)(iii)Pledge and Security Agreement and Pledging of Shares,
each dated October 16, 1995 by Jalak Investments, B.V.
in favor of QMS, Inc. 14/
10(q)(iv)Deed of Subordination and Pledge dated October 16,
1995 by and among QMS, Inc., QMS Europe B.V.
and Credit Lyonnais Bank Nederland N.V. 14/
10(q)(v) Master Distributor Agreement dated October 16,
1995 among the Registrant, QMS Europe, B.V.
and QMS Australia PTY Ltd. 14/
10(q)(vi)Trademark and Trade Name License Agreement
dated October 16, 1995 between QMS Europe B.V.
and QMS, Inc. 14/
10(r) Loan and Security Agreement dated November 7, 1995
by and between QMS, Inc. and Foothill Capital
Corporation. 15/
10(r)(i) Stock Pledge Agreement dated November 7, 1995
by and between QMS, Inc. and Foothill Capital
Corporation. 15/
10(r)(ii)Term Note A dated November 7, 1995 in the original
principal amount of $1,750,000 from QMS, Inc. in favor
of Foothill Capital Corporation. 15/
10(r)(iii)Term Note B dated November 7, 1995 in the original
principal amount of $5,000,000 from QMS, Inc. in favor
of Foothill Capital Corporation. 15/
10(r)(iv)Trademark Security Agreement dated November 7,
1995 made by QMS, Inc. in favor of Foothill Capital
Corporation. 15/
10(r)(v) QMS, Inc. Warrant to Purchase 100,000 shares of
Common Stock, dated November 7, 1995. 15/
10(r)(vi)General Security Agreement dated November 7,
1995 by and between QMS Canada Inc. in
favor of Foothill Capital Corporation. 15/
10(r)(vii)General Continuing Guaranty dated November 7,
1995 by QMS Canada Inc. in favor of Foothill Capital
Corporation. 15/
10(r)(viii)Security Agreement dated November 7, 1995 by
and between Foothill Capital Corporation and QMS
Canada Inc. 15/
10(r)(ix)General Continuing Guaranty dated November 7,
1995 by QMS Circuits, Inc. in favor of Foothill Capital
Corporation. 15/
10(r)(x) Security Agreement dated November 7, 1995
between Foothill Capital Corporation and QMS
Circuits, Inc. 15/
10(r)(xi)Amendment Number One dated December 4, 1995 to
the Loan and Security Agreement dated November 7,
1995. 17/
10(r)(xii)Amendment Number Two dated February 7, 1996 to
the Loan and Security Agreement dated November 7,
1995. 17/
10(r)(xiii)Amendment Number Three dated July 31, 1996 to the
Loan and Security Agreement dated November 7, 1995. 17/
10(r)(xiv)Waiver Agreement dated May 5, 1997, waiving certain
provisions of the Loan and Security Agreement.. 19/
10(r)(xv)Amendment Number Five dated June 3, 1997 to the
Loan and Security Agreement. 20/
10(s)(i) Asset Purchase Agreement dated September 30, 1995
between QMS Japan Kabushiki Kaisha ("QMS Japan KK")
and QMS, Inc. 16/
10(s)(ii)Assumption of Liabilities dated September 30,
1995 by QMS Japan, KK. 16/
10(s)(iii)Inventory Johto-Tampo Agreement dated September 30,
1995 between QMS Japan, KK and QMS, Inc. 16/
10(s)(iv)Master Distributor Agreement dated September 30,
1995 between QMS Japan, KK and QMS, Inc. 16/
10(s)(v) Promissory Note dated September 30, 1995 in the
original principal amount of U.S. $3,000,000 from
Yoji Kawai in favor of QMS Japan, KK. 16/
10(s)(vi)Promissory Note dated September 30, 1995 in
the original principal amount of U.S. $500,000
from Yoji Kawai in favor of QMS Japan, KK. 16/
10(s)(vii)Trademark and Trade Name License Agreement
dated December 7, 1995 between QMS Japan, KK
and QMS, Inc. 16/
10(s)(viii)Assumption Agreement dated December 7, 1995
between QMS Japan, KK and QMS, Inc. 16/
10(t) Sale-Leaseback Agreement between QMS, Inc.
and Ink (AL) QRS 12-21, Inc. dated February 18,
1997. 21/
10(t)(i) Waiver agreement between Ink (AL) QRS 12-21,
Inc. and QMS, Inc. dated December 8, 1997.
10(t)(ii)Amendment to Warrant dated December 8, 1997
to the Sale-Leaseback Agreement.
10(u) Agreement dated July 7, 1997, between QMS, Inc.
and James L. Busby. 22/
10(v) Agreement dated August 7, 1997, between QMS, Inc.
and Donald L. Parker
10(w) QMS, Inc. - Genicom Corporation Strategic Partner
Agreement. (Portions of the exhibit have been omitted
based upon a request for confidential treatment.)
11 Statement Regarding Computation of Earnings Per
Share.
21 Subsidiaries of the Registrant.
27 Financial Data Schedules
* Indicates a management contract or compensatory plan or arrangement.
1/ Incorporated herein by reference to exhibit of same number in Registrant's annual report on Form 10-K for the fiscal year ended
October 2, 1987 (Commission File No. 1-9348).
2/ Incorporated herein by reference to exhibit of same number in Registrant's annual report on Form 10-K for the fiscal year ended
September 27, 1991 (Commission File No. 1-9348).
3/ Incorporated herein by reference to exhibit of same number in Registrant's annual report on Form 10-K for the fiscal year ended
September 30, 1988 (Commission File No. 1-9348).
4/ Incorporated herein by reference to exhibit of same number in Registrant's annual report on Form 10-K for the fiscal year
ended October 1, 1993 (Commission File No. 1-9348).
5/ Incorporated herein by reference to exhibit of same number in Registrant's annual report on Form 10-K for the fiscal year
ended October 2, 1992 (Commission File No. 1-9348).
6/ Incorporated herein by reference to exhibit of same number in Registrant's quarterly report on Form 10-Q for the quarter ended
April 1, 1988 (Commission File No. 1-9348).
7/ Incorporated herein by reference to exhibit of same number in Registrant's quarterly report on Form 10-Q for the fiscal
quarter ended July 2, 1993 (Commission File No. 1-9348).
8/ Incorporated herein by reference to exhibit of same number in Registrant's quarterly report on Form 10-Q for the fiscal
quarter ended April 1, 1994 (Commission File No. 1-9348).
9/ Incorporated herein by reference to exhibit of same number in Registrant's quarterly report on Form 10-Q for the fiscal
quarter ended July 1, 1994 (Commission File No. 1-9348).
10/ Incorporated herein by reference to exhibit of same number in Registrant's annual report on Form 10-K for the fiscal year ended
September 29, 1989 (Commission File No. 1-9348).
11/ Incorporated herein by reference to exhibit of same number in Registrant's Registration Statement on Form S-1, filed September
19, 1984 (Registration No. 2-93329).
12/ Incorporated herein by reference to Appendix B to the Registrant's Proxy Statement for the Annual Meeting of Stockholders held
on January 25, 1994 (Commission File No. 1-9348).
13/ Incorporated herein by reference to exhibit of same number in Registrant's annual report on Form 10-K for the fiscal year ended
September 30, 1994 (Commission File No. 1-9348).
14/ Incorporated herein by reference to exhibits in Registrant's Form 8-K filed on October 16, 1995 (Commission File No. 1-9348).
15/ Incorporated herein by reference to exhibits in Registrant's Form 8-K filed on November 21, 1995 (Commission File No. 1-9348).
16/ Incorporated herein by reference to exhibit of same number in Registrant's annual report on Form 10-K for the fiscal year ended
September 29, 1995 (Commission File No. 1-9348).
17/ Incorporated herein by reference to exhibit of same number in Registrant's quarterly report on Form 10-Q for the fiscal
quarter ended June 28, 1996 (Commission File No. 1-9348).
18/ Incorporated herein by reference to Appendix A to the Registrant's Proxy Statement for the Annual Meeting of Stockholders held
on January 23, 1996 (Commission File No. 1-9348).
19/ Incorporated herein by reference to exhibit of same number in Registrant's quarterly report on Form 10-Q for the fiscal quarter
ended March 28, 1997 (Commission File No. 1-9348).
20/ Incorporated herein by reference to exhibit of same number in Registrant's quarterly report on Form 10-Q for the fiscal quarter
ended June 27, 1997 (Commission File No. 1-9348).
21/ Incorporated herein by reference to exhibits in Registrant's Form 8-K filed on February 18, 1997 (Commission File No. 1-9348).
22/ Incorporated herein by reference to exhibits in Registrant's Form 8-K filed on July 7, 1997 (Commission File No. 1-9348).
</TABLE>
(b) Reports on Forms 8-K: The following reports were filed on Forms 8-K during
fiscal 1997.
. Form 8-K dated February 18, 1997, reporting the disposition of assets
in a sale-leaseback transaction.
. Form 8-K dated July 7, 1997, reporting an executive management
transition agreement.
Exhibit 10(w)
The marking "REDACT" is used to designate where
portions of the exhibit have been omitted based upon
a request for confidential treatment. These omitted
portions have been separately filed with the Securities
and Exchange Commission.
QMS, INC. - GENICOM CORPORATION
STRATEGIC PARTNER AGREEMENT
This Agreement is made as of this 7th day of October, 1997, by and
between QMS, Inc., a Delaware corporation having its principal place of business
at One Magnum Pass, Mobile, Alabama 36618 (hereinafter "QMS") and Genicom
Corporation, a Delaware corporation, having its principal place of business at
14800 Conference Center Drive, Suite 400, Chantilly, Virginia 20151 (hereinafter
"Purchaser").
1. Sale and Purchase of Products. QMS agrees to sell and Purchaser agrees to
purchase the products indicated in Exhibit A, which are incorporated by
reference herein, (the "Products") during the term of this Agreement, for
purposes of resell to Digital Equipment Corporation's customer base. The
specifications for the products are attached at Exhibit B. Purchaser's
execution of this Agreement shall constitute its acceptance of these
specifications.
2.Term of Agreement. Unless otherwise terminated as provided herein, this
Agreement shall be for an initial period of fifteen months commencing on the
date specified above, and shall be automatically renewed for successive one
(1) year periods unless either party gives the other written notice of its
intent to terminate the Agreement within sixty (60) days prior to the end of
each annual term.
3. Quantity and Price.
a) During the term of this Agreement, Purchaser intends to purchase and
take delivery of a minimum of $REDACT Dollars of print systems. QMS
shall sell the Products to Purchaser at the prices stated in Exhibit
A.
b) Purchaser acknowledges that the pricing as indicated in Exhibit A is
based upon Purchaser's commitment to purchase and take delivery of the
Minimum Dollars indicated in subparagraph (a) above, and that pricing
shall be adjusted on a quarterly basis if Purchaser does not meet the
commitment specified in Paragraph 3(c).
c) Minimum commitment levels over the contract period are as follows and
are subject to price changes pursuant to subparagraphs 3(a) and (b):
0-90 days from product completion date REDACT% $ REDACT
91-180 days REDACT% $ REDACT
181-270 days REDACT% $ REDACT
271-365 days REDACT% $ REDACT
366-456 days REDACT% $ REDACT
d) All spares, options, accessories and consumables must be purchased
from QMS.
4. Purchase Orders.
(a) At periodic intervals during the term of this Agreement, Purchaser
shall submit to QMS written purchase orders (hereinafter "Purchase
Order") for the Products, specifying the quantity of Products ordered at
least ninety (90) days in advance of requested delivery date. All
Purchase Orders submitted by Purchaser are subject to acceptance by QMS
and are non-cancelable. Delivery dates may only be rescheduled as
follows:
(i) within sixty (60) to ninety (90) days prior to delivery date,
delivery of up to thirty percent (30%) of the value of the
purchase order may be deferred for a maximum of sixty (60)
days.
(ii)within thirty-one (31) to sixty (60) days prior to the
requested delivery date, delivery of up to fifteen percent
(15%) of the value of the purchase order may be deferred for a
maximum of thirty (30) days.
(iii)within thirty (30) days prior to the requested delivery date
no deferrals of the delivery date may be made.
(b) Purchaser shall be required to issue an initial non-cancelable
Purchase Order to QMS within 15 days of execution of this Agreement.
(c) Purchaser shall be extended credit limits not to exceed REDACT dollars
($REDACT), subject to payment terms specified in Paragraph 8(a).
Should Purchaser exceed the REDACT dollar ($REDACT) credit limit,
payment will be required to reduce the balance below such limit prior
to any additional purchases being shipped.
(d) QMS shall fax, within fifteen (15) business days, acknowledgment of
receipt of order confirming scheduled delivery dates.
5. Forecasts. Upon execution of this Agreement, Purchaser shall submit to
QMS a forecast of its Product requirements over the term of this Agreement.
Purchaser shall thereafter, on or before the tenth of each month, update
its forecast for all products outside of the non-cancelable orders for
planning purposes. The referenced monthly forecast should reflect the
ensuing sixty (60) days and are for planning purposes only.
6. Delivery, Incoming Inspection, Quality Control and Certification.
(a) All shipments pursuant to this Agreement shall be made F.O.B. QMS'
facility in Mobile, Alabama U.S.A. or F.O.B. QMS Europe B.V.' s
facility in the Netherlands. All costs for freight shall be borne by
Purchaser. QMS shall upon request by Purchaser, drop ship to
Purchaser's customers at an additional cost of one percent (1%) of the
Purchase Order as an administrative service cost with a minimum of
thirty dollars ($30.00) per shipment and a maximum of two hundred
fifty dollars ($250.00) per drop shipment location.
(b) Title to the Product and risk of loss shall pass to Purchaser upon
delivery of the Product to the common carrier.
(c) All articles ordered hereunder will be subject to inspection and
approval by Purchaser after delivery, notwithstanding payment for said
articles has been made. It is expressly agreed that payment shall not
constitute acceptance. Purchaser may reject and return any article
which contains defective material or workmanship, or otherwise does
not conform to this Agreement. Rejected articles (except for Epidemic
Failures) shall be returned at Purchaser's risk and expense for
correction or replacement pursuant to QMS' Returned Merchandise
Authorization ("RMA") guidelines. Contingent upon Purchaser's
compliance with QMS' RMA instructions, QMS shall assume the expense
for replacement, corrections and the costs of Purchaser's freight
costs for shipments to and from QMS of the defective articles to
Purchaser. Purchaser shall complete inspection tests within thirty
(30) days of actual receipt or prior to delivery to Purchaser's
customer, whichever occurs first. These remedies are not exclusive of
any other remedies provided by law or in equity to Purchaser. All
authorized returns shall follow QMS' RMA guidelines and procedures.
(d) All work performed under this Agreement shall be done in accordance
with good engineering and workmanship practices, utilizing materials,
techniques and procedures conforming to industry standards of quality,
safety, and performance.
(e) If there exists a symptom due to a specific defect in workmanship or
materials of the same cause and in the same part, repetitively
occurring during the warranty period in more than 5% of a shipment lot
of Products, such symptom shall be deemed an "Epidemic Failure".
Purchaser shall advise QMS in writing if Purchaser believes an
Epidemic Failure condition exists and shall provide evidence
satisfactory to QMS. If both parties agree than an Epidemic Failure
condition exists, QMS shall provide the remedies set forth herein and
QMS shall reimburse Purchaser for reasonable costs, to include labor
and freight to correct such failure.
7. Nonrecurring Engineering Fees. Nonrecurring engineering fees ("NRE")
required to complete the QMS(R) 2060, 4060 and Monet Print Systems shall be
$REDACT, payable pursuant to paragraph 8(c) of this Agreement. Included in
the NRE fees is $REDACT for DCPS compatibility as outlined in the
specifications (Exhibit B). The specifications do not include a DCPS
compatibility test suite. Purchaser may be responsible for additional NRE
fees associated with DCPS. QMS will provide a quote of additional NRE
fees, if required, once the DCPS compatibility test suite is provided.
If Purchaser meets delivery and payment of $REDACT in print systems
within the initial period of the Agreement, QMS will refund $REDACT of
the NRE fees.
8.Payment.
(a) Purchaser shall pay QMS for all Products shipped pursuant to this
Agreement within thirty (30) days of the date of invoice/shipment.
(b) All prices contained herein are exclusive of all duties, federal,
state and local excise, sales, use, and similar taxes. Such taxes and
fees, when applicable, will appear as separate additional items on
invoices and are the responsibility of Purchaser.
(c) Purchaser shall pay QMS a basic one-time, fully paid non-recurring
engineering fee ("NRE") of $REDACT. Payment shall be as follows:
$REDACT upon execution of this Agreement
$REDACT upon delivery of first Product
$REDACT upon completion of second product
9.Service. QMS shall not be required (unless subcontracted to QMS) to install
or place in service any Product, nor service or keep in good working order
any Product. Purchaser shall be responsible for installation and service for
Product purchased hereunder through the self-paced courses provided by QMS,
or by QMS training personnel at published pricing, provided, however, that
QMS shall train one trainer designated by Purchaser at no cost for training
on all three printers. Purchaser shall be responsible for such trainer's
travel expenses incurred during the training. All expenses incurred by QMS
for all other training purposes shall be borne by Purchaser. It is agreed
that each party will not solicit employees from their respective companies,
and each party will not attempt to obtain business accounts from the other
party.
QMS shall issue field service bulletins which will suggest desirable
adjustments or possible improvements to units purchased hereunder and
describe changes, if any, in manufacturing should they change in form, fit
or functionality. Such field service bulletins shall further, when
applicable, include engineering documentation affecting maintenance of
devices purchased by the Purchaser, interchangeability of parts therein,
spare parts therefor, and functional and performance specifications
thereof, for the purpose of review of such material. Such field service
bulletins will also contain corrections and revisions to the user's manual
and service manual, when necessary and applicable.
Mail bulletins to:
GENICOM CORPORATION
RICHARD MARKS
950 CLOPPER RD #110
GAITHERSBURG, MD 20878
QMS also agrees to make available kits and services to modify or upgrade
units previously purchased hereunder to a higher level, as well as to
implement possible improvements, modifications, or changes described in
field service bulletins or otherwise announced by QMS. In the event any
such change is made mandatory on units produced by QMS within one year
after its announcement or availability on newly-manufactured units or is
necessary to correct a design deficiency, such change will be provided on
Purchaser's request at Seller's expense. In computing the cost of
implementing any such manual revisions which are included in said charge,
in addition to the cost of parts and/or labor, shall be spread equally over
all such changes made, and units sold with such change thereon, for one
full year from the date Buyer requests such changes. It shall be solely at
Seller's option to implement the aforementioned modifications or upgrades.
10.Spare Parts. QMS shall sell to Purchaser any and all Spare Parts desired or
required by Purchaser to maintain the Product in such reasonable quantities
as Purchaser shall from time to time request during the term of this
Agreement and for a period ending five (5) years following termination of
this Agreement or the product's end of life date. During the term of this
Agreement, the purchase price for Spare Parts shall be the pricing terms set
forth in Exhibit A, subject to the provisions of subparagraph 3(c).
Purchaser shall buy spare parts in compliance with the QMS recommended spare
parts list.
11. QMS Software and Documentation.
a)QMS grants Purchaser non-exclusive license transferable only to
Purchaser's wholly-owned subsidiaries to use QMS software and Product
documentation for the Products Purchaser acquires under this Agreement,
solely to support Purchaser's efforts to sell the Products. Except as
expressly permitted herein, Purchaser agrees not to (i) sell, rent,
loan, disclose or otherwise make available QMS software, or any portion
thereof to any other party, (ii) use QMS software for any other purpose;
or (iii) make any copies of QMS software. Purchaser agrees not to
duplicate the documentation except to support the sale of the Products.
QMS shall make available Product user manuals in diskette format at no
cost to Purchaser. Purchaser may modify, customize and duplicate
Product user manuals.
b) Purchaser shall bear the expense of localizing the text or content of
the software and documentation for any language other than English.
GENICOM QMS AMENDMENT
c) QMS acknowledges Purchaser's exclusive right to own all information,
including technical data, designs, know-how, drawings and software
modifications and/or enhancements related to the QMS software and
product documentation developed at the request of Purchaser under this
Agreement in connection with the Products sold hereunder. QMS will
have no ownership interests or other rights in this software.
12. Digital Labeling of Printer Only Products, Consumables, Accessories and
Spare Parts.
a) Printer Only Products. QMS shall provide master documents and
informational material to Purchaser relating to the Products.
Purchaser shall be responsible for providing final, proof-ready
documentation for QMS to reproduce. QMS is responsible for all
documentation and labeling cost for printers (as outlined in the
product specification). Any additional documentation or materials
that are to be included in the shipset shall be furnished by Purchaser
at Purchaser's expense.
Consumables, Accessories and Spare Parts. Purchaser shall be responsible for
customization of all consumables, accessories and spare parts related to
print systems included in this contract.
13. Technical Support. QMS shall provide Purchaser the level of technical
support specified at Exhibit C.
14. Part Numbers. QMS shall provide only the printers with DEC-specific part
numbers.
15. Maintenance Releases and Software Updates. QMS shall provide maintenance
release and software updates which are normally provided at no cost to
customers if no customization is required. Purchaser shall, however, pay
QMS for NRE costs associated with any customized release or update ordered
by it at a mutually agreed upon amount.
16. Warranty. QMS' warranty of the Product is that on a three (3) month
rolling average from installation shall not be less than ninety-eight
percent (98%) defect free. The warranty on the Product is return to
factory as specified by QMS. Product properly returned to QMS during the
warranty period will be repaired, or at QMS' option, replaced at no cost to
Purchaser. The Product warranty does not extend to altered units of the
Product, or to units of the Product which fail or are damaged after
delivery thereof to the Purchaser or its customer due to shipment,
handling, storage, operation, use, or maintenance in a manner or
environment not conforming to any published instructions or specifications
of QMS. THE WARRANTY SET FORTH HEREIN AND THE OBLIGATIONS AND LIABILITIES
HEREUNDER ARE IN LIEU OF, AND PURCHASER HEREBY WAIVES, ALL IMPLIED
GUARANTEES AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. Prior to returning
any Product, Purchaser will obtain RMA numbers from QMS and reference the
serial number of the unit involved for all warranty claims including sub-
assemblies, if appropriate. Purchaser is responsible for the cost of
shipping returned Products to QMS. Purchaser is responsible for the costs
of shipping returned products to QMS until acceptance by QMS of Purchaser's
compliance with QMS' RMA guidelines. Once such returned products are
accepted by QMS, QMS will credit Purchaser for its shipping costs to QMS.
Spares for warranty purposes for the QMS(R) 4060 is sixty (60) days and for
the QMS 2060 and magicolor (R) II is sixty (60) days. QMS shall also
provide a one (1) year warranty for spares at one percent (1%) of the sales
price paid by Purchaser to Seller.
17. New Models. In the event QMS, at any time during the term of this
Agreement, shall develop a new model of the Products being purchased
hereunder which could compliment or expand the marketability or utility of
the type of units being purchased hereunder, or which could render the
units being purchased hereunder obsolete or have a material adverse affect
on their acceptance in the marketplace, Purchaser may, at its option,
require QMS to deliver such new units instead of, or in combination with,
the units being purchased hereunder, however, only under the terms and
conditions of this Agreement, except as modified herein below:
(a) Base prices for the new units shall be established by QMS, which shall
be deemed a supplement to Exhibit A and which shall be determined in
accordance with the most favored customer status afforded Purchaser
under substantially similar terms and conditions.
(b) Base prices for said new units will be subject to the quantity
discount schedule applicable for the present units being purchased
pursuant to Exhibit A with full credit being given thereon for
quantities of any and all units of any type previously and/or
hereafter purchased under this Agreement.
18. Termination.
(a) This Agreement may be terminated: (i) immediately if, after written
notice alleging with specificity a breach of the Agreement has
occurred and the breach is not corrected within thirty (30) day, or;
(ii) Immediately by either party, without prior notice to the other
party, in the event any bankruptcy, reorganization or insolvency
proceeding governed by any state or federal law is initiated against
the other party and not dismissed within thirty (30) days.
(b) The termination of this Agreement shall not release the Purchaser from
the obligation to pay all sums which may be owing to QMS whether then
or thereafter due, or operate to discharge any liability which has
been incurred by Purchaser or by QMS prior to any such termination.
(c) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY
FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND
ARISING OUT OF THE TERMINATION OF THIS AGREEMENT OR OTHERWISE.
19. Confidentiality. Purchaser shall not disclose and shall use it best
efforts to prohibit the disclosure to any third party, other than its
attorneys, accountants and advisors on a confidential basis, of any
confidential or proprietary information of QMS unless disclosure is
expressly agreed to in writing by QMS. This obligation shall survive
termination of this Agreement for a period of three (3) years.
20. Trademarks. Purchaser shall not have or acquire any right, title or
interest in the trademarks, trade names or service marks that are now owned
or hereafter acquired by QMS, either used alone or in conjunction with
other words or names, or in the goodwill thereof, and Purchaser shall not
use any such mark or name without the express written consent of QMS. Upon
termination or expiration of this Agreement, Purchaser shall immediately
return to QMS all advertising literature containing QMS' trademarks, trade
names or service marks.
21. Indemnification. QMS agrees, at its expense, to defend and indemnify
Purchaser in any suit, claim or proceeding brought against Purchaser
alleging that any Products sold pursuant to this Agreement directly
infringe any United States or foreign patent, provided QMS is promptly
notified by Purchaser in writing of any such suit, claim or proceeding.
QMS agrees to pay any damages and costs awarded against Purchaser by court
of competent jurisdiction or by an arbitrator if the arbitration is
conducted in accordance with the rules of the American Arbitration
Association. In the event any Product or part there of is held to
constitute infringement and its use enjoined, QMS shall at its own expense
either procure for Purchaser or subsequent purchaser the right to continue
using said Product, or part, or modify it so that it becomes non-
infringing, or refund the purchase price.
22. Relationship Between Parties. The relationship between QMS and Purchaser
is that of independent contractors. This Agreement does not establish a
joint venture, agency or partnership between the parties, nor does it
create an employee-employer relationship.
23. Force Majeure. QMS shall not be liable for its failure to perform,
including any delays in performing, any of its obligations herein when such
failure or delay results from Purchaser's inability, failure or delay in
performance, nor shall QMS be liable for any delays or failures to perform
caused by an act of God; war; riot; fire; explosion; accident; flood;
sabotage; inability to obtain fuel or power; governmental laws, regulations
or orders; inability of QMS' subcontractors to perform; labor troubles such
as strikes, lockouts or injunctions (whether or not such labor event is
beyond the reasonable control of QMS). Agreed-upon delivery schedules
shall be considered extended by a period of time proportional to the time
lost because of any delay excusable under this Paragraph, except that QMS
shall use its best efforts to minimize such delays.
24. American Arbitration Association. Any controversy or claim arising out of
or related to this Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the rules of the American Arbitration
Association. Arbitration proceedings shall take place in Charlotte, North
Carolina.
25. Controlling Law. This Agreement shall be governed and construed in
accordance with the laws of the State of North Carolina.
26. Entire Agreement. Upon its execution, this Agreement and the accompanying
Exhibits set forth the entire agreement and understanding of the parties as
to the subject matter hereof. The provisions of this Agreement shall apply
to all purchase orders placed by Purchaser, notwithstanding the presence of
different or additional provisions on the purchase order form, or any form,
submitted by Purchaser.
27. Assignment. Purchaser shall not assign this Agreement or any right granted
hereunder to any individual or entity other than any of its wholly owned
subsidiaries without the prior written consent of QMS, such consent not to
be unreasonably withheld.
28. Notices. All notices required or given in connection with this Agreement
shall be in writing and shall be delivered by hand or by certified mail,
return receipt requested, to the other party as follows:
Genicom Corporation: QMS, Inc.:
GENICOM LEGAL DEPT. QMS, Inc.
14800 CONFERENCE CENTER DR. ATTN: Vice President, U.S. Sales
SUITE 400 One Magnum Pass
CHANTILLY, VA 20151 Mobile, Alabama 36618
* COPY TO: QMS, Inc. Legal Dept.
29. Export Controls. Purchaser acknowledges that the laws and regulations of
the United States restrict the export and re-export of commodities and
technical data of United States origin, including the Products, software
and documentation. Purchaser agrees that it will not export or re-export
any of the Products, software or documentation, or any portion thereof, in
any form without the appropriate United States and foreign government
licenses. Purchaser agrees that its obligations pursuant to this Article
shall survive and continue after any termination or expiration of rights
under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate
as of the date and year first above written.
GENICOM CORPORATION QMS, INC.
Signature Signature
ARTHUR D. GALLO CHARLES D. DALEY
Name (print) Name (print)
VP & GM, DOCUMENT SOLUTIONS COMPANY CHIEF OPERATING OFFICER
Title (print) Title (print)
10/7/97 10/3/97
Date Date
EXHIBITS A and B
EXHIBITS A and B include the proprietary prices and specifications of the
product being developed by QMS, Inc. for Genicom Corporation. This
confidential portion (43 pages) has been omitted and filed separately with
the Securities and Exchange Commission.
EXHIBIT C
TECHNICAL SUPPORT
1. General
Purchaser agrees to provide first and second level support to end users of
the products defined in this agreement. First level support, termed Tier I,
is defined as Purchaser customer interface with support representative
trained in the products operating characteristics regarding features,
functionality, and set up, etc. Second level support, termed Tier II, is
defined as representatives trained at a senior technical trouble shooting
level. In order to assist Purchaser in its support activities, QMS will
provide its standard product training and technical training classes to
Purchaser's designated trainer, along with electronic copies of manuals and
text books so that the trainer will be able to train their service and
support staff.
Beyond this training and associated documentation, should Purchaser require
specialized knowledge not in its possession, or are otherwise in need of
assistance, and provided Purchaser has first exhausted Tier I and II
capabilities to resolve any questions or difficulties regarding the products,
QMS will provide reasonable field support in the form of telephone
consultation during its normal business hours, Monday through Friday.
QMS agrees to provide this support free of charge for a period beginning with
the first customer shipment and ending five (5) years after Purchaser accepts
final shipment of the product from QMS.
2. Problem Solving
Problems related to installation, configuration, or operation of the products
noted by either Purchaser or its customers that can not be adequately
resolved with Purchaser' Tier II support personnel will be documented by
completing the attached reporting form and distributing the information to
QMS using the primary contact and the procedures defined herein. With each
such report, the following information will be provided:
(a) Purchaser Problem Tracking Number
(b) Problem Classification (see paragraph 3 below)
(c) Problem Description
(d) Product Model
(e) Software Version Number
(f) failing units Start Up and Advanced Status pages
(g) Any other test data, sample files, or print samples that may be
relevant
It shall be QMS' responsibility to log this information into a common
database. QMS will acknowledge receipt of the information package back to
Purchaser within three (3) working days (based on QMS' normal business
schedule at its Mobile, AL headquarters), and will communicate the target
resolution date within ten (10) working days from acknowledgment. Problem
reports shall remain active in the database until Purchaser returns
confirmation that a proposed problem resolution has been verified.
The hardware and software support contacts at QMS are as follows:
1) Ray Burke
QMS, Inc.
One Magnum Pass
Mobile, AL 36689
Phone:(334) 633-4300, Extension 1489
FAX: (334) 639-9261
Email: [email protected]
2) Hugh Barlow
QMS, Inc.
One Magnum Pass
Mobile, AL 36689
Phone:(334) 633-4300, Extension 1571
FAX: (334) 639-9261
Email: [email protected]
The customer escalation support contact at QMS is:
1) Ron Smith
QMS, Inc.
One Magnum Pass
Mobile, AL 36689
Phone:(334) 633-4300, Extension 1726
FAX: (334) 639-9261
Email: [email protected]
3. Problem Classifications
QMS acknowledges the importance of timely responses to problems reported by
Purchaser. To facilitate the appropriate response times for varying levels
of severity, Purchaser shall stipulate the severity level it has associated
with each problem, using the following guidelines.
Severity Level 1: Show Stopper. The product or its control software
seriously impacts the production capability for which the
product is intended in an install base of at least 25
printers, no viable work around is available, and the
Purchaser has provided a test case that duplicates the
problem. Regardless of install base, problems related to
product safety or regulatory compliance are included in this
category.
Severity Level 2: Critical. The product or its control software seriously
impacts the production capability for which the product is
intended, no viable work around is available, and the
Purchaser has provided a test case that duplicates the
problem.
Severity Level 3: Major. The product or its control software impacts the
production capability for which the product is intended, a
work around is available, and the Purchaser has provided a
test case that duplicates the problem.
Severity Level 4: Minor. The product or its control software does not
impact the production capability for which the product is
intended, a work around is available, and the Purchaser has
provided a test case that duplicates the problem.
4. Problem Response Times
QMS shall use its best commercial efforts to provide Purchaser with a problem
resolution within the guidelines defined below:
Severity Level 1: Best commercial efforts, including retention of third-
party assistance, if necessary, will be required without
interruptions to provide a satisfactory solution within forty
five (45) working days, or in the event that a lower severity
level problem is escalated to show stopper status, 45 working
days from the point of escalation.
Severity Level 2: Best commercial effort will be applied to provide a
satisfactory solution within ninety (90) working days, or in
the event that a lower severity level problem is escalated to
critical status, 90 working days from the point of
escalation.
Severity Level 3: Best commercial effort will be applied to provide a
satisfactory solution within the Purchasers maintenance
release, provided the report is logged at least 90 days prior
to the scheduled release date.
Severity Level 4: Best commercial efforts will be applied to incorporate
a solution into the product at some future release date.
5. Problem Resolutions
For proposed changes that require a hardware modification, QMS and Purchaser
will exercise "good faith" agreement in the resolution of all problems.
Problem resolutions shall be delivered to Purchaser in accordance with the
QMS Change Control Procedures.
ADDENDUM TO QMS, INC.-GENICOM CORPORATION
STRATEGIC PARTNER AGREEMENT
This Addendum is made as of this 10th day of October, 1997, by and between
QMS, Inc., a Delaware corporation having its principal place of business at One
Magnum Pass, Mobile, Alabama 36618 and Genicom Corporation, a Delaware
corporation, having its principal place of business at 14800 Conference Center
Drive, Suite 400, Chantilly, Virginia 20151, to the Strategic Partner Agreement
(the "Agreement") executed by the parties as of the 7th day of October, 1997.
In consideration of good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties agree to amend the Agreement pursuant
to this Addendum as follows:
Exhibit A (Relating to the QMS 2060 Print System) is amended to reflect new
pricing for the two products listed below, as follows:
PART NUMBER DESCRIPTION GENICOM
PRICE
5250142-100 2060BX, 110 Volt $REDACT
5250142-200 2060BX, 220 Volt $REDACT
The remaining provisions of the Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Addendum in duplicate as
of the date and year first above written.
GENICOM CORPORATION QMS, INC.
By: _________________________ By: ________________________
Arthur D. Gallo Charles D. Daley
Vice President & General Manager, Chief Operating Officer
Document Solutions Company
