<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 28, 1997
REGISTRATION NO. 333-23763
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
JETFAX, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
DELAWARE 3577 77-0182451
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION
INCORPORATION OR CLASSIFICATION CODE NUMBER)
ORGANIZATION) NUMBER)
1376 WILLOW ROAD
MENLO PARK, CALIFORNIA 94025
(415) 324-0600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
EDWARD R. PRINCE, III
PRESIDENT, CHIEF EXECUTIVE OFFICER
AND CHAIRMAN OF THE BOARD
JETFAX, INC.
1376 WILLOW ROAD
MENLO PARK, CALIFORNIA 94025
(415) 324-0600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
CLIFFORD S. ROBBINS, ESQ. JOHN F. SEEGAL, ESQ.
SUSAN J. SKAER, ESQ. IAIN MICKLE, ESQ.
GENERAL COUNSEL ASSOCIATES LLP BRETT E. COOPER, ESQ.
1891 LANDINGS DRIVE ORRICK, HERRINGTON & SUTCLIFFE LLP
MOUNTAIN VIEW, CALIFORNIA 94043 400 SANSOME STREET
(415) 428-3900 SAN FRANCISCO, CALIFORNIA 94111
(415) 392-1122
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration
Statement.
---------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par
value................. 4,025,000 shares $10.00 $40,250,000 $12,197
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
</TABLE>
(1) Includes 525,000 shares that the Underwriters have the option to purchase
to cover over-allotments, if any.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(a).
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH
SECTION 8(a), MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 to the Registration Statement on Form S-1 is being
filed for the purpose of responding to the oral comments of the Securities and
Exchange Commission, from a phone call received on March 25, 1997, to the
Company's application for confidential treatment revising the exhibit index and
submitting redacted versions of Exhibits 10.27, 10.31, 10.32, 10.33, 10.34,
10.35, 10.36 and 10.39.
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<C> <S>
1.1** Underwriting Agreement (draft of March 20, 1997).
3.1** Certificate of Incorporation of Registrant filed on August 3, 1988, as
currently in effect.
3.2** Certificate of Amendment of Certificate of Incorporation, as filed on
October 31, 1990.
3.3** Certificate of Amendment of Certificate Incorporation, as filed on
August 13, 1991.
3.4** Certificate of Amendment of Certificate of Incorporation, filed on
February 12, 1996.
3.5** Certificate of Amendment of Certificate of Incorporation filed on
February 12, 1996.
3.6** Certificate of Amendment of Certificate of Incorporation filed on
November 4, 1996.
3.7** Amended Certificate of Designation of Series A Preferred Stock, as
currently in effect.
3.8** Certificate of Designation of Series B Preferred Stock, as currently
in effect.
3.9** Certificate of Designation of Series C Preferred Stock, as currently
in effect.
3.10** Certificate of Designation of Series D Preferred Stock, as currently
in effect.
3.11** Certificate of Designation of Series E Preferred Stock, as currently
in effect.
3.12** Amended Certificate of Designation of Series E Preferred Stock, as
currently in effect.
3.13** Certificate of Designation of Series P Preferred Stock, as currently
in effect.
3.14** Certificate of Designation of Series F Preferred Stock, as currently
in effect.
3.15** Form of Restated Certificate of Incorporation of Registrant to be
filed upon the closing of the Offering made under this Registration
Statement.
3.16** Amended and Restated Bylaws of Registrant, as currently in effect.
3.17** Form of Amended and Restated Bylaws to be adopted effective as of the
closing of the Offering made under this Registration Statement.
4.1* Specimen Common Stock Certificate.
5.1* Opinion of General Counsel Associates LLP.
10.1** Form of Indemnification Agreement between Registrant and each of its
directors and officers.
10.2** 1989 Stock Option Plan and forms of Stock Option Agreements
thereunder.
10.3** 1995 Stock Plan, as amended and restated, and form of Stock Option
Agreement thereunder.
10.4** 1997 Director Stock Option Plan and form of Stock Option Agreement
thereunder.
10.5** 1997 Employee Stock Purchase Plan and forms of agreements thereunder.
10.6** Lease Agreement dated December 1, 1992 between Registrant and Lincoln
Menlo Phase I Associates Limited for Menlo Park, California office.
10.7** Lease dated December 18, 1991 between Crandell Development Corporation
and Robert S. Grant for Santa Barbara, California office.
10.8** Registration Rights Agreement dated March 5, 1997 by and among the
Registrant and Rudy Prince, Lon B. Radin and Virginia Snyder.
10.9** Stock and Warrant Purchase Agreement dated as of August 31, 1988 by
and among Registrant and purchasers of 299,995 shares of Series A
Preferred, as amended February 1994.
10.10** Preferred Stock Purchase Agreement dated as of December 16, 1988 by
and among Registrant and purchasers of 336,000 shares of Series A
Preferred, as amended February 1994.
10.11** Preferred Stock Purchase Agreement dated as of June 22, 1989 by and
between Registrant and David A. Brewer.
10.12** Form of Subscription and Stock Purchase Agreement dated January 1991
by and between Registrant and certain purchasers of Series A Preferred
Stock.
10.13** Form of Subscription and Stock Purchase Agreement dated July 1989 by
and between Registrant and certain purchasers of shares of Series B
Preferred Stock.
10.14** Form of Subscription and Stock Purchase Agreement dated December 1989
by and between Registrant and certain purchasers of shares of Series B
Preferred Stock.
10.15** Form of Subscription and Stock Purchase Agreement dated
August/September 1990 by and between Registrant and certain purchasers
of shares of Series C Preferred Stock.
10.16** Subscription and Stock Purchase Agreement for the purchase of shares
of Series C Preferred Stock dated September 6, 1990 by and between
Registrant and Draper Associates Polaris Fund.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
10.17** Subscription and Stock Purchase Agreement dated September 7, 1990 by
and between Registrant and Adlar Turnkey Manufacturing Corporation.
10.18** Form of Subscription and Stock Purchase Agreement for shares of Series
D and Series E Preferred Stock and Warrants dated July 1991 by and
between Registrant and certain purchasers of shares of Series D and
Series E Preferred Stock.
10.19** Series E Preferred Stock Purchase Agreement dated August 18, 1991, as
amended as of January 30, 1996, by and between Registrant and Ailicec
California Corporation.
10.20** Series F Preferred Stock Purchase Agreement dated as of March 5, 1996
by and between Registrant and purchasers of Series F Preferred Stock.
10.21** Purchase and Debt Restructuring Agreement dated as of August 3, 1994
by and between Registrant and Ailicec International Enterprises
Limited.
10.22** Note Purchase Agreement dated August 3, 1994 by and between Registrant
and certain purchasers of notes and warrants for the purchase of
Common Stock.
10.23** Warrant to Purchase Stock dated December 31, 1994 by and between
Registrant and Ailicec International Enterprises Limited.
10.24** Common Stock Purchase Warrant dated December 16, 1996, and an
amendment thereto dated February 13, 1997, by and between Registrant
and Michael Crandell.
10.25** Common Stock Purchase Warrant dated December 16, 1996, and an
amendment thereto dated February 13, 1997, by and between Registrant
and Larry Crandell.
10.26** Asset Purchase Agreement dated July 31, 1996, as amended December 16,
1996, by and between Registrant and the Crandell Group, Inc.
10.27+ Development Agreement dated September 25, 1991 and amended as of
February 12, 1997 by and between Registrant and Ailicec International
Enterprises Limited.
10.28** Common Stock Purchase Option dated as of March 29, 1996 by and between
Registrant and Steven J. Carnevale.
10.29** Common Stock Purchase Option dated as of March 29, 1996 by and between
Registrant and Thomas B. Aikin.
10.30** Promissory Note to Lon B. Radin dated March 1, 1992 from Registrant.
10.31+ Development and Supply Agreement dated June 30, 1995 by and between
Registrant and Samsung Electronics Corporation.
10.32+ Software License Agreement dated September 30, 1996 by and between
Registrant and Oki Data Corporation.
10.33+ Supply and License Agreement dated November 1, 1996 by and between
Registrant and Pixel Magic, Inc.
10.34+ Facsimile Product Development Agreement dated June 9, 1994 by and
between Registrant and Xerox Corporation.
10.35+ Facsimile Product Development Agreement dated November 23, 1994 by and
between Registrant and Xerox Corporation.
10.36+ Master Development, Purchase and Distribution License Agreement dated
effective as of January 31, 1997 by and between Registrant and
Hewlett-Packard Company.
10.37** Employment Agreement dated July 31, 1996 between Registrant and
Michael Crandell.
10.38** Security Agreement dated July 31, 1996 by and between Registrant and
the Crandell Group, Inc.
10.39+ OEM Purchase Agreement dated February 22, 1995, as amended February
21, 1997, by and between Registrant and Oki America, Inc.
10.40** Loan and Security Agreement dated August 23, 1996 by and between
Registrant and Cupertino National Bank & Trust and the amendment
thereto dated March 11, 1997.
10.41** Form of Dealer Agreement.
11.1** Calculation of loss per share.
23.1** Independent Auditors' Consent and Report on Schedule (see page S-1).
23.2* Consent of Counsel (included in Exhibit 5.1).
24.1** Power of Attorney (see page II-6).
27.1** Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
**Previously filed.
+ Confidential treatment requested.
II-4
<PAGE>
(b) FINANCIAL STATEMENT SCHEDULES
Schedule II -- Valuation and Qualifying Accounts (see page S-2)
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the
financial statements or notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item 14 of
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered hereunder, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment to this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Menlo
Park, State of California, on the 28th day of March, 1997.
JetFax, Inc.
/s/ Edward R. Prince, III
By___________________________________
EDWARD R. PRINCE, III, PRESIDENT,
CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
SIGNATURES TITLE DATE
/s/ Edward R. Prince, III President, Chief
- ------------------------------------- Executive Officer March 28, 1997
(EDWARD R. PRINCE, III) and Chairman of the
Board (Principal
Executive Officer)
/s/ Allen K. Jones Vice President of
- ------------------------------------- Finance, Chief March 28, 1997
(ALLEN K. JONES) Financial Officer,
and Secretary
(Principal
Financial and
Accounting Officer)
/s/ Thomas B. Akin Director
- ------------------------------------- March 28, 1997
(THOMAS B. AKIN)
/s/ Douglas Y. Bech Director
- ------------------------------------- March 28, 1997
(DOUGLAS Y. BECH)
/s/ Steven J. Carnevale Director
- ------------------------------------- March 28, 1997
(STEVEN J. CARNEVALE)
/s/ Chung Chiu Director
- ------------------------------------- March 28, 1997
(CHUNG CHIU)
/s/ Shelley Harrison Director
- ------------------------------------- March 28, 1997
(SHELLEY HARRISON)
/s/ Edward R. Prince, Jr. Director
- ------------------------------------- March 28, 1997
(EDWARD R. PRINCE, JR.)
/s/ Lon B. Radin Director
- ------------------------------------- March 28, 1997
(LON B. RADIN)
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.27+ Development Agreement dated September 25, 1991 and amended as of
February 12, 1997 by and between Registrant and Ailicec International
Enterprises Limited.
10.31+ Development and Supply Agreement dated June 30, 1995 by and between
Registrant and Samsung Electronics Corporation.
10.32+ Software License Agreement dated September 30, 1996 by and between
Registrant and Oki Data Corporation.
10.33+ Supply and License Agreement dated November 1, 1996 by and between
Registrant and Pixel Magic, Inc.
10.34+ Facsimile Product Development Agreement dated June 9, 1994 by and
between Registrant and Xerox Corporation.
10.35+ Facsimile Product Development Agreement dated November 23, 1994 by and
between Registrant and Xerox Corporation.
10.36+ Master Development, Purchase and Distribution License Agreement dated
effective as of January 31, 1997 by and between Registrant and
Hewlett-Packard Company.
10.39+ OEM Purchase Agreement dated February 22, 1995 by and between
Registrant and Oki America, Inc.
</TABLE>
- --------
+ Confidential treatment requested.
<PAGE>
EXHIBIT 10.27
[*] = CONFIDENTIAL TREATMENT REQUESTED
REDACTED
DEVELOPMENT AGREEMENT
This Agreement is made and entered into as of this 25th day of September,
1991 by and between Ailicec International Enterprises Ltd., a Hong Kong
corporation with offices at Rm. 503 5/F, Tower B, Hung Hom Commercial Centre,
37-39 Ma Tau Wai Road, Hung Hom, Kowloon, Hong Kong ("AILICEC") and JetFax,
Inc., a Delaware corporation with offices at 978 Hamilton Court, Menlo Park,
California 94025 ("JETFAX").
RECITALS
--------
WHEREAS, JETFAX is engaged in the development of a certain plain paper
facsimile product for AILICEC;
WHEREAS, AILICEC is engaged in the manufacture of facsimile products, and
WHEREAS, AILICEC and JETFAX have agreed that JETFAX will develop the plain
paper facsimile product to be owned and manufactured by Ailicec as specified
below;
NOW, THEREFORE, in consideration of the mutual promises and undertakings
set forth herein, AILICEC and JETFAX agree as follows:
1. Product.
-------
As used in this Agreement, the term "Product" shall mean the plain paper
facsimile machine designed and manufactured in accordance with the
specifications set forth in Exhibit A-1 annexed hereto, as may subsequently be
modified by mutual written agreement between the parties (the "Specifications").
2. Development and Ownership of the Product.
----------------------------------------
(a) JETFAX shall develop the Product in accordance with this Agreement,
including without limitation, the Specifications, and shall accomplish the
various milestones described in Section 3 by the respective dates set forth
therein. AILICEC may provide JETFAX with requests for Specific Product
requirements and/or modifications beyond those established in Exhibit A-1, and
in response JETFAX shall, within a reasonable time, provide AILICEC with a good
faith quotation and revised schedule within which such modifications may be
implemented.
In its discretion, AILICEC may accept or reject such quotation and revised
schedule. Upon
1
<PAGE>
AILICEC'S written acceptance thereof, if any, such quotation and revised
schedule shall be incorporated into this Agreement.
(b) All of the following shall be the exclusive property AILICEC:
(i) All results of the work of JETFAX in developing the Product,
including without limitation all tangible materials such as the drawings,
designs, prototypes, plans, work papers, schematic diagrams, circuit board
layouts, and related documentation; specifically excluding all software source
code as described in Section 4 below;
(ii) All patent rights, mask work rights and trade secrets in and to
the Product hardware, specifically including all inventions, discoveries, ideas,
technology, processes, formulas, production methods, techniques, concepts and
embodied or incorporated in the Product hardware; and
(iii) Copies of all tangible materials containing or embodying any
of the foregoing.
Items (i) through (iii) above shall collectively be the "AILICEC Property."
JETFAX hereby assigns to AILICEC all rights and title to the AILICEC Property as
they are generated by JETFAX. JETFAX hereby irrevocably sells, transfers and
assigns any and all rights that it may have in the AILICEC Property to AILICEC.
Upon the request of AILICEC, JETFAX shall execute any and all documents or
instruments, and take all other actions, necessary or convenient to evidence,
perfect or confirm AILICEC'S exclusive ownership of the AILICEC Property.
(c) JETFAX shall not manufacture or sell the Product, directly or
indirectly, through any related or unrelated third party, or authorize others to
manufacture or sell the Product, without the prior written consent of AILICEC's
board of directors.
3. Development Milestones and Payments.
-----------------------------------
(a) JETFAX shall develop the Product with reference to the Telstar II
Schedule in Exhibit A-2 and in accordance with the schedule set forth below, and
AILICEC shall pay JETFAX the following amounts upon the parties' execution of
this Agreement and upon JETFAX's completion of each of the following specific
development milestones. The milestones referred to below will be achieved on the
date indicated and it is AILICEC's sole responsibility to be at hand or have a
representative present at JETFAX's office if necessary on such dates to
determine the validity of the milestone being reached:
2
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
<TABLE>
<CAPTION>
Development Milestone/ Development Work
Milestone Date Tasks Accomplished Payment Materials Delivered
- -------------- ---------------------- ------- -------------------
<S> <C> <C> <C>
[*]
</TABLE>
3
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
(b) In the event that the milestone under sections 3(a)(4) or 3(a)(5)is not
completed on the specified Milestone Date set forth ; above, the payment to be
paid on such Milestone Date shall be reduced by [*] for every one day of delay.
In addition to these reductions, JETFAX shall be obligated to reimburse AILICEC
for all costs and expenses incurred by AILICEC arising out of or resulting from
JETFAX's delay in meeting any development milestone set forth above. JETFAX
shall make such reimbursement within thirty (30) days of AILICEC's submission to
JETFAX of a reasonably determined statement of such costs and expenses. Any
reduction in the development payments shall not affect JETFAX's obligations to
continue performance under subsection (a) herein.
(c) Except as expressly stated otherwise in this Agreement and in Sections
3(d) and 6, JETFAX shall bear all of the engineering costs in developing the
Product, including without limitation all industrial design, plastic enclosure
design, scanner and document feeder design, and related tasks; all electronic
hardware and software design and programming; all required prototypes of the
electronics hardware to meet the milestones described in Section 3(a) above; and
all costs associated with writing and documenting the user and service manuals
in English.
(d) Except as expressly stated otherwise in this Agreement and in Sections
3(c) and 6, AILICEC shall bear all of the costs of all models, prototypes and/or
test fixtures of the document feeders, laser engines and any other mechanical
components included in the Product; all plastic, metal or other tooling costs to
build either prototypes or production units; all in-circuit testers and other
test equipment and fixtures needed for production; all costs associated with any
shipping carton designs and materials; all printing costs for manuals, control
panels, and logos. These costs will be reimbursed by AILICEC only if JETFAX
obtains the prior written approval of AILICEC. AILICEC may, in its discretion
and by subsequent written agreement with JETFAX, agree to reimburse JETFAX for
certain additional costs associated with development of the Product.
(e) JETFAX shall send AILICEC, with a copy to Ailicec California
Corporation ("ACC"), a California corporation and an affiliate of AILICEC, a
development progress report by facsimile transmission by Monday of each week.
This report shall be prepared and approved by Rudy Prince or Lon Radin and shall
give the status of the development and an evaluation of whether JETFAX is able
to meet the development milestone deadlines set forth in subsection (a) herein.
4. Delivery of AILICEC Property; Software.
--------------------------------------
(a) JETFAX shall physically deliver all tangible materials in JETFAX's
possession in relation to the Product pursuant to Section 3(a) and all AILICEC
Property to AILICEC at any location designated by AILICEC and pursuant to
instructions given by AILICEC. The parties agree that beyond the final
development payment pursuant to Section 3(a)(5) above, JETFAX shall continue the
development in good faith until the Specifications are complied with in all
respects or as modified and agreed upon between the parties; and all final and
necessary documents are provided to AILICEC.
(b) The parties acknowledge that AILICEC shall have all rights, title and
interest of any kind, nature or description in the source code for software
incorporated in all the standard features of the Product as described in Exhibit
A-1 attached hereto ("Standard Feature Source Code"), and JETFAX hereby assigns
to AILICEC full title and interest in the worldwide rights to the Standard
Feature Source Code, including all
4
<PAGE>
applicable copyrights and trade secret rights. As the owner of the Standard
Feature Source Code, AILICEC shall have the unrestricted rights, without further
obligation to compensate JETFAX, (1) to reproduce and use the Standard Feature
Source Code in the manufacture, distribution, marketing and sale of the Product,
(2) to reproduce, decompile, debug, analyze, modify, and/or upgrade the Standard
Feature Source Code to the extent necessary to ensure proper operation of the
Product in compliance with the Specifications, to address defects therein,
and/or to enhance the Product with additional features. Upon request JETFAX
shall assist AILICEC in correcting any errors or malfunctions in the Standard
Feature Source Code that may arise in connection with the use or operation of
the Product.
(c) The parties acknowledge that JETFAX shall retain full title to and
ownership of the source code for the software incorporated in the optional
features of the Product as described in Exhibit A-1 attached hereto ("Options
Source Code"), including all applicable copyrights and trade secret rights.
JETFAX hereby grants a perpetual, nonexclusive, worldwide royalty-free license
to AILICEC to use the Options Source Code (1) to reproduce and use the Options
Source Code in the manufacture, distribution, marketing and sale of the Product,
(2) to reproduce, decompile, debug, analyze, modify, upgrade and/or reverse
engineer the Options Source Code to the extent necessary to ensure proper
operation of the Product in compliance with the Specifications, to address
defects therein, and/or to enhance the Product with additional features, all
without further obligation to compensate JETFAX. Upon request and at JETFAX's
own expense, JETFAX shall assist AILICEC in correcting any errors or
malfunctions in the Options Source Code that may arise in connection with the
use or operation of the Product.
(d) Concurrent with AILICEC's receipt of the final version of the Product
pursuant to Section 3(a)(6) JETFAX shall provide AILICEC with the Standard
Feature Source Code and the object code version of the Options Source Code on a
floppy disk and in printed text form. AILICEC agrees that such Standard Feature
Source Code and object code version of the Options Source Code shall be held in
the strictest confidence for use only by employees or agents of AILICEC. In the
event of the bankruptcy or insolvency of JETFAX, the parties acknowledge that
AILICEC may have the option to purchase JETFAX's ownership right of the Options
Source Code.
(e) AILICEC shall not use the Standard Feature Source Code to develop any
new product related or unrelated to the Product for a period of two (2) years
beginning on the date that AILICEC commences manufacturing the Product.
Thereafter, AILICEC may develop any new product provided it first offers to
JETFAX the opportunity to develop such new product jointly with AILICEC. JETFAX
shall not use the technology provided to AILICEC under this Agreement to develop
(i) any products which are competitive with and substantially equivalent to the
Product for a period of one (1) year beginning on the date that AILICEC
commences manufacturing the Product, thereafter, JETFAX may use the technology
to develop any new product provided it first offers to AILICEC the opportunity
to jointly develop such new product. AILICEC agrees not to sell, assign or
otherwise transfer the Standard Feature Source Code during the term hereof and
for a period of five (5) years beginning on the date that AILICEC commences
manufacturing the Product. JETFAX agrees not to sell, assign or otherwise
transfer the Options Source Code during the term hereof and for a period of two
(2) years beginning on the date that AILICEC commences manufacturing the
Product.
5. Training and Documentation.
--------------------------
If requested by AILICEC, JETFAX shall provide training-in the manufacturing,
operation, installation and maintenance of the Product to not less than three
(3) employees designated by AILICEC, at no charge to
5
<PAGE>
AILICEC at a location in the United States designated by JETFAX and reasonably
acceptable to AILICEC. AILICEC shall bear reasonable costs for travel, lodging
and other reasonable expenses related to such training. The training shall be in
such depth that AILICEC personnel so trained will be able to train other
personnel to make, use, install and maintain the Product. JETFAX shall also
furnish such trainees, at no charge to AILICEC, with copies of all manuals,
schematic diagrams, blueprints and all other material required for the
manufacture of and training concerning the Product.
6. Regulatory Approvals.
--------------------
Upon AILICEC's final development payment pursuant to Section 3(a)5 above,
the parties shall use their best efforts and cooperate, using both parties'
names as applicant, to obtain necessary regulatory approvals for the unlimited
commercial manufacture, sale and use of the Product, including without
limitation an Underwriters Laboratories Listing; Federal Communications
Commission certification under applicable requirements as appearing in 47 C.F.R.
Section 15.801 et seq., Part 15, subpart J, as a Class A computing device, and
in 47 C.F.R. Section 15.801, Part 68; Canadian Department of Commerce
certifications for telecommunication equipment and/or a Canadian Standards
Association Listing for Safety compliance. The out-of-pocket costs of obtaining
such approvals, including the costs of hiring consultants and all necessary
registration fees, shall be shared equally between the parties; provided,
however, that the parties shall agree in advance prior to incurring any such
out-of-pocket costs.
7. Warranty by JETFAX.
------------------
(a) JETFAX hereby warrants to AILICEC that the Product shall be free from
defects in design, and Products properly manufactured from such design shall be
suitable for commercial use and shall be compatible with any widely distributed
fax machine which conforms to applicable CCITT (Coordinating Committee on
International Telephone and Telegraph) fax transmission protocols in effect as
of the date of final delivery of the Product pursuant to Sections 3(a)(5) and
3(a)(b).
(b) THE ABOVE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL JETFAX BE LIABLE FOR
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN IF JETFAX IS ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT.
8. Nondisclosure.
-------------
Neither party shall, at any time during the term of this Agreement, disclose
to any third person the terms and conditions of this Agreement except (i) with
the prior written consent of the other party, which consent shall not be
unreasonably withheld where such disclosure is necessary to the business
operations of the party requesting disclosure, or (ii) by reason of legal
compulsion in any legal proceeding or pursuant to applicable, laws.
9. Indemnification.
---------------
(a) AILICEC shall defend, indemnify and hold JETFAX harmless from and
against any and all damage, liability, cost, or expenses (including without
limitation reasonable attorney's fees and related costs),
6
<PAGE>
whether or not litigation is instituted, incurred by JETFAX based upon or in
connection with a willful and material breach by AILICEC of any or all of its
covenants in this Agreement.
(b) JETFAX shall defend, indemnify and hold AILICEC harmless from and
against any and all damage, liability, cost, or expenses (including without
limitation reasonable attorney's fees and related costs), whether or not
litigation is instituted, incurred by AILICEC based upon or in connection with a
willful and material breach by JETFAX of any or all of its covenants in this
Agreement.
(c) JETFAX shall defend, indemnify and hold AILICEC harmless from and
against any claims of patent, copyright, trade secrets and mask works
infringement worldwide. In such event that a third party claims infringement of
patents, trade secrets, copyrights, mark works rights with respect to AILICEC's
use of, sale, licensing or other exploitation of the AILICEC Property, or any
impending claim comes to the attention of AILICEC, it shall immediately inform
JETFAX in writing, stating the full facts of the infringement known to it.
AILICEC agrees to cooperate fully with JETFAX at the expense of JETFAX if JETFAX
requires assistance defending against such claims.
10. Term of Agreement.
-----------------
The term of this Agreement shall commence on the date first written above
and shall expire when all of the following is completed: (i) the final
development payment is made pursuant to Section 3 (a) (5); (ii) demonstration by
JETFAX that the final working prototype of Product functions properly in
compliance with all the Specifications set forth in Exhibit A-1 pursuant to
section 3(a)(6); and (iii) all of JETFAX's work materials in relation to the
development of the Product, the AILICEC Property, the Standard Feature Source
Code and the optional features object code pursuant to Section 2(a), 3(a) and
4(d) have been received by AILICEC.
11. Termination.
-----------
(a) Notwithstanding Section 10, either party may terminate this Agreement
prior to its expiration by written notice to the other party, if the other party
has materially breached any provision hereof and failed to cure such breach
within thirty (30) days after receipt of written notice from the terminating
party describing the breach in reasonable detail.
(b) Notwithstanding Sections 10 and 13, AILICEC may (i) cause l no further
payments to be made to JETFAX pursuant to paragraph 2(f) of the Series E Stock
Purchase Agreement entered into by JETFAX and ACC on August 18 , 1991 and (ii)
make no further payments pursuant to Section 3 of this Agreement by delivering
written notice of termination to JETFAX, if JETFAX fails to meet its obligations
for thirty (30) days after the date of the milestone deadlines set forth in
subsection (3), (4) and (5) of Section 3(a) above.
(c) If JetFax's failure to perform under Section 3(a) continues for thirty
(30) days after the date of any milestone deadline thereunder, JETFAX shall be
deemed to be in material breach of this Agreement, and AILICEC may terminate
this Agreement forthwith. JETFAX shall deliver to AILICEC all work materials
generated by JETFAX up to the date of such early termination. JETFAX shall be
further obligated to reimburse AILICEC for all costs and expenses incurred by
AILICEC arising out of or resulting from JETFAX's failure to perform under
Section 3(a) up to a maximum of $200,000 and for all prior development payments
received from AILICEC within one year after receiving notice from AILICEC of
such termination of this Agreement.
7
<PAGE>
(d) Any termination of this Agreement in whole or part pursuant to this
Section shall not preclude resort by the terminating party to any other remedies
available to it.
12. Confidentiality.
---------------
(a) For the purposes of this Agreement, "Confidential Information" means
any information provided by a party to the other party in confidence during the
term of this Agreement. Information shall be presumed to be provided in
confidence if it is disclosed in writing, or, if disclosed orally, it is
identified as "confidential" at the time of disclosure and promptly confirmed in
writing to be confidential.
(b) Neither party shall disclose any Confidential Information of the other
party to any third party, or to any of its employees except for persons who
require access to such Confidential Information to accomplish the intended
purposes of this Agreement. Both parties shall take the same precautions to
protect the confidentiality of the other party's Confidential Information that
they take with respect to their own valuable, confidential and proprietary
information of like importance, including without limitation having all persons
who are permitted access to such Confidential Information execute agreements
requiring them not to disclose the Confidential Information. Neither party shall
use Confidential Information disclosed by the other party for any purpose other
than the purposes for which that Confidential Information was disclosed.
(c) The obligations set forth in clause (b) above shall not apply to any
particular portion of any Confidential Information that: (i) the disclosing
party authorized the recipient party in writing to disclose or copy; (ii) is or
becomes publicly available through no act or omission of the recipient party; or
(iii) came or comes into the possession of the recipient party without
restriction and through a source that has not breached any confidential
relationship with the disclosing party. Confidential Information shall not be
deemed to be "publicly available" if only generally described in the public
domain or if only portions of the Confidential Information are found in several
sources in the public domain, even if all such sources, when compiled together,
specifically describe such Confidential Information.
(d) For the purpose of this Agreement, all information included in the
AILICEC Property and work materials generated by JETFAX pursuant to this
Agreement shall be deemed Confidential Information.
13. Survival of Obligations.
-----------------------
Notwithstanding anything to the contrary in this Agreement, the expiration
or early termination of this Agreement shall not release either JETFAX or
AILICEC from their respective obligations under Sections 2, 4, 7, 9, 12 and 23
hereof, and such Sections shall survive such expiration or termination and
remain in effect. Similarly, such expiration or termination shall not release a
party from any liability which has already accrued to the other party as of the
date of expiration or termination.
14. Assignment.
----------
Neither party may assign any rights or delegate any duties under this
Agreement without the other party's prior written consent, and any attempt to do
so without such consent shall be void.
15. Notices.
-------
8
<PAGE>
Except as otherwise provided herein, all notices required or permitted to be
given hereunder shall be in writing and shall be valid and sufficient only if
dispatched by certified or registered mail, postage prepaid, confirmed facsimile
transmission or personal delivery, addressed to the party to be notified at its
address first above written, or such other address as such party may designate
in writing to the other party hereto. In the case of a notice sent by certified
or registered mail, such notice shall be deemed to have been given ten (10) days
after dispatch of the same. In the case of a notice sent by confirmed facsimile
transmission or personal delivery, such notice shall be deemed to have been
given upon receipt of same.
16. Severability.
------------
Any provision or term of this Agreement which is prohibited or unenforceable
in any jurisdiction shall be, as to such jurisdiction, unenforceable only to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable any provision hereof
in any other jurisdiction. To the extent permitted by applicable law, JETFAX and
AILICEC hereby waive any provision of law which prohibits or render
unenforceable in any respect any provision hereof.
17. Counterparts.
------------
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and
the same instrument. Execution and delivery of this Agreement may be completed
by execution and delivery of original, signed copies hereof, or by facsimile
transmission of executed copies hereof, each of which shall constitute an
original and enforceable counterpart.
18. Applicable Law.
--------------
This Agreement shall in all respects be governed by and construed in
accordance with the laws of the State of California, without regard to conflicts
of law provisions thereof and without regard to the United Nations Convention on
Contracts for the International Sale of Goods.
19. Entire Agreement.
----------------
This Agreement is the final, complete and exclusive agreement between JETFAX
and AILICEC with respect to the subject matter hereof. the parties hereto shall
not be bound by any prior or collateral statement, warranties, representations,
agreement, arrangements of course of dealing between them affecting the subject
matter hereof, and each party hereby represents and warrants to the other that
in entering into this Agreement it has not relied and is not relying on any such
statements, warranties, representations, agreements or course of dealings.
20. Effect of Headings.
------------------
The headings to the paragraphs of this Agreement are for convenience of
reference only, they do not form a part of this Agreement and shall not in any
way affect the interpretation hereof.
21. Force Majeure. Neither party shall be responsible for any failure to
-------------
perform its obligations hereunder (except for obligations to make any payments
when due) due to any cause or event beyond such
9
<PAGE>
party's reasonable control, including without limitation acts of God, war, civil
commotion, riots, embargoes, domestic or foreign governmental laws or acts,
regulations or orders, fires, floods, earthquakes, accidents, machinery
malfunctions, quarantines, strikes, lockouts or other labor difficulties. The
affected party shall give the other party prompt notice of such cause or event
and in no case any later than seven (7) days after such cause or event. The
notice shall describe the nature of the cause or event, including an estimation
of its expected duration and probable impact on the ultimate performance of the
affected party's obligations hereunder. Each party shall exercise all reasonable
efforts to mitigate or limit damages to the other party resulting from the
nonperformance.
22. Compliance with Laws.
--------------------
The parties shall comply with, at their own expense, all laws, ordinances,
rules, regulations and other requirements of all governments or agencies of
domestic or foreign jurisdictions relating to their respective obligations and
rights hereunder. The parties agree that the Product and each of their
respective obligations and rights hereunder may be subject to the Export
Administration Regulations of the U.S. Department of Commerce, as may be amended
from time to time, and agree to comply therewith, and the parties further agree
to comply with the requirements of the U.S. Foreign Corrupt Practices Act and
not to make any payments to third parties which would cause either party to
violate such Act.
23. Attorney's Fees. The prevailing party in any action or proceeding to
---------------
enforce the terms of this Agreement shall be entitled to reimbursement by the
other party for all costs (including the reasonable fees, costs and expenses of
attorneys and other professionals) incurred in connection with such action or
proceeding.
24. Independent Contractors. No provision of this Agreement shall be
-----------------------
construed to constitute either party as the agent, servant, employee, partner,
or joint venturer of the other party. The parties to this Agreement are and
shall remain independent contractors. Each party shall retain exclusive
management, direction, and control of its employees and the work to be performed
by it hereunder.
IN WITNESS WHEREOF, the parties have executed or have caused this Agreement
to be executed by their duly authorized representatives, as of the day and year
first above written. Agreed to as of this 25th day of September 1991 by and
between:
Ailcec International JetFax, Inc.
Enterprises Ltd.
By: /s/ Chung Chiu By: /s/ Edward R. Prince III
-------------- ------------------------
Title: CHAIRMAN Title: PRESIDENT
Date: September 26, 1991 Date: September 25, 1991
10
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A-1
PRODUCT SPECIFICATION
[*]
STANDARD FEATURES
- -----------------
[*]
11
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
[*]
OPTIONAL FEATURES
- ------------------
[*]
12
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A-2
Telstar II Schedule - July 15, 1991
-----------------------------------
<TABLE>
<CAPTION>
Jul Aug Sep Oct Nov Dec Jan Feb Mar
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
[*]
</TABLE>
13
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
Jul Aug Sep Oct Nov Dec Jan Feb Mar
- --------------------------------------------------------------------------------
[*]
14
<PAGE>
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT is made as of February 12, 1997, by and between
JetFax, Inc., a Delaware corporation with its principal place of business at
1376 Willow Road, Menlo Park, CA 94025 ("JetFax"), and Ailicec International
Enterprises Limited, a Hong Kong corporation with its principal place of
business at Unit C, 2/F., Kaiser Estate, Phase 1, 41 Man Yue Street, Hunghom,
Kowloon, H.K. ("Ailicec").
WHEREAS, JetFax and Ailicec are parties to a Development Agreement dated as
of September 25, 1991 (the "Development Agreement");
WHEREAS, JetFax and Ailicec are parties to a Manufacturing Agreement dated
as of October 21, 1991 (the "Manufacturing Agreement") and a related Security
Agreement dated as of October 1991 (the "Security Agreement"); and
WHEREAS, in order, among other things, to clarify their relationship and
induce JetFax to raise capital in the public market, Ailicec and JetFax desire
to amend the Development Agreement as set forth below and to terminate the
Manufacturing Agreement and the Security Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Development Agreement, the Manufacturing
Agreement or the Security Agreement.
2. Section 2 of the Development Agreement is hereby amended by
adding the following new Section 2(d) at the end thereof:
(d) Notwithstanding anything in this Agreement to the contrary,
Ailicec hereby grants to JetFax, and JetFax hereby accepts, a non-
exclusive, perpetual, fully paid, royalty free, transferable, worldwide
right and license, with the right to sublicense, under all of its
intellectual property rights, to do any and all of the following: use,
modify, prepare derivative works of, include in other product material,
copy and reproduce, make and have made, publicly display, publicly perform,
license,
-15-
<PAGE>
support, maintain, market, sell and otherwise distribute and otherwise
commercialize the Ailicec Property, the Product, the Standard Feature
Source Code and any technology, proprietary rights and know-how related
thereto and any derivative works thereof. In the event of any conflict
between the terms of this Section 2(d) and any other provisions of this
Agreement, the terms of this Section 2(d) shall control.
3. The third and fifth sentences of Section 4(e) of the Development
Agreement are hereby amended by deleting the text thereof in their entirety.
4. Text intentionally omitted.
5. The term "Agreement" as used in the Development Agreement shall
for all purposes refer to the Development Agreement as amended by this Amendment
Agreement.
6. The Manufacturing Agreement and the Security Agreement are hereby
terminated and neither of such agreements shall have any further force or
effect.
7. This Amendment Agreement may be executed in any number of
duplicate counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
8. This Amendment Agreement shall become effective only upon the
closing of a public offering by the Company of any of its equity securities
sufficient to cause the conversion of the Company's Series E Preferred Stock
into Common Stock.
[balance of this page intentionally left blank]
-16-
<PAGE>
[Amendment Agreement]
IN WITNESS WHEREOF, the parties have duly signed this Amendment
Agreement as of the day and year first written above.
JETFAX, INC. AILICEC INTERNATIONAL
ENTERPRISES LIMITED
By: /s/Edward R. Prince III By: /s/Chung Chiu
----------------------- ----------------
Edward R. Prince III Chung Chiu
President Title: Managing Director
-17-
<PAGE>
EXHIBIT 10.31
[*] = CONFIDENTIAL TREATMENT REQUESTED
REDACTED
DEVELOPMENT AND SUPPLY AGREEMENT
BY AND BETWEEN
JETFAX, INC.
AND
SAMSUNG ELECTRONICS CORPORATION
JUNE 30, 1995
CONFIDENTIAL
-1-
<PAGE>
DEVELOPMENT AND SUPPLY AGREEMENT
THIS DEVELOPMENT AND SUPPLY AGREEMENT (the "Agreement") is entered
into and is effective as of June 30, 1995 (the "Effective Date"), by and between
JetFax, Inc., a corporation duly organized and existing under the laws of
Delaware, U.S.A. with its principal place of business at 1376 Willow Road, Menlo
Park, California 94025 ("JetFax"), and Samsung Electronics Corporation, a
corporation duly organized and existing under the laws of the Republic of Korea,
having its principal place of business at 20th Floor, Severance Building, 84-11,
5-Ka, Namdaemoon-Ro, Chung-Ku, Seoul, Korea ("Samsung").
A. Samsung is in the business of manufacturing and selling a variety of
electronic products including facsimile machines;
B. Samsung is currently developing a new product (the "Product" as
hereinafter defined) which will require certain controller electronics and
associated software;
C. JetFax is willing, subject to the terms and conditions set forth in
this Agreement, to develop the controller electronics and associated software to
be incorporated as part of the Product, supply the custom computer chips
required by JetFax's design and license to Samsung the intellectual property on
the terms and conditions herein; and
D. Samsung desires to have JetFax design and develop the necessary
electronics and software, procure from JetFax the custom computer chips required
by JetFax's design and to acquire a license to make, use and sell such
electronics, software and computer chips on the terms and conditions herein-,
IN CONSIDERATION of the foregoing and the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. DEFINITIONS
1.1 "Acceptance Date" shall mean the date of acceptance of a "JetFax
Deliverable" or "Samsung Deliverable," as hereinafter defined, pursuant to
Section 4.2(c) hereof.
1.2 "Affiliate" shall mean all entities and persons controlled by,
controlling or under common control with a party.
1.3 "ASIC Set" shall mean a single set of Application Specific Integrated
Circuit chips developed by JetFax for use in a single Product.
-2-
<PAGE>
1.4 "Bill of Materials and Source List" shall mean the identification by
manufacturer and model of certain components and the source from which such
components may be obtained. A preliminary Bill of Materials is attached hereto
as Exhibit F.
1.5 "Deliverable" shall mean a JetFax Deliverable or Samsung Deliverable.
1.6 "Electronic" shall mean those controller electronics and "Software,"
as hereinafter defined, to be developed by JetFax and incorporated as part of
the Product.
1.7 "Errors" shall mean: (i) reproducible defects in any Deliverable which
causes it not to function in conformance with the Specifications, and (ii)
Software miscoding which results in the Software failing to function in
conformance with the Specifications, if such failure is reproducible.
1.8 "Hardware Designs" shall mean those designs for circuit boards,
including information for in-circuit testers, to be developed by JetFax in
accordance with the Specifications.
1.9 "JetFax Deliverables" shall mean, collectively or individually, JetFax
developed Electronics, Software, Hardware Designs and the Bill of Materials and
Source List. A more detailed description of the JetFax Deliverables is set
forth in Exhibit A to this Agreement.
1.10 "Product" shall mean the new Samsung combined laser printer,
telecopier, scanner and copier with features and "Specifications," as
hereinafter defined, as provided in Exhibit B.
1.11 "Project Schedule" shall mean the schedule of events for the parties'
performance under this Agreement, as set forth in Exhibit C.
1.12 "Services" shall mean the work and labor necessary for the performance
of the respective obligations of the parties.
1.13 "Software" shall mean software object code designed in accordance with
the Specifications.
1.14 "Specifications" shall mean the engineering, operational and/or
functional descriptions, details and requirements for the Product and the
Software and the Hardware Designs, as set forth in Exhibit B and mutually agreed
to between the parties as the same may be modified as provided herein.
1.15 "Samsung Deliverables" shall mean the sample Product units (minus
motherboard), list of connectors and connector pinouts, mechanical drawings and
power supply specifications as more fully set forth in Exhibit D.
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<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
2. SCOPE OF WORK
2.1 Services. Upon the terms and conditions set forth in this Agreement,
JetFax and Samsung agree to perform the Services required to provide their
respective Deliverables in accordance with the terms and conditions herein.
Each party will be responsible for obtaining all the technology, labor,
material, tooling and facilities necessary for the completion of its portion of
the Services, except as otherwise set forth in this Agreement.
2.2 Progress Reports. Each party hereto shall provide the other party
with progress reports, as reasonably requested by the other party, starting
after the Effective Date and ending on the final Acceptance Date. Each report
shall be in such form and contain such information as may be mutually agreed
upon by the parties, including but not limited to, progress to current scheduled
milestones, description of any problems in meeting milestones, and if any
problems are encountered, proposed recovery methods.
2.3 Agency Approvals.
(a) The parties agree that JetFax shall make all engineering changes with
respect to the Electronics necessary for obtaining any required governmental or
private agency approvals or certifications for the Product in the countries
fisted in Exhibit E. All costs of certification (except fees for FCC and IC
telecom approvals in the U.S. and Canada which shall be paid by JetFax),
including, but not limited to, testing fees, filing fees and rework charges
required in connection with applying for such approvals in such countries shall
be paid by Samsung. Alternatively, at Samsung's written election, JetFax shall
make such engineering changes and complete all necessary filings and
certifications for Samsung at a price of [*] per country, based on Samsung's
making such election for a minimum of three (3) countries. Such payment shall be
made at the time of Samsung's election to have JetFax provide such services.
(b) The parties agree that Samsung has the responsibility for and shall bear
the expense of obtaining any necessary Republic of Korea government (the "Korean
Government") or private agency approvals or certifications which are required in
connection with this Agreement. Samsung shall make no commitment to the Korean
Government or any agency thereof regarding this Agreement without the express
written consent of JetFax. If any approval or certification is conditioned upon
changes in the terms and conditions of this Agreement, such changes shall be
effective only if a formal amendment is executed by both parties. Samsung shall
advise Jetfax immediately of the receipt of such approvals and certifications
and shall provide JetFax a copy of the documents received by Samsung related to
such approvals and certifications.
3. DESIGN REVIEW AND SPECIFICATION CHANGES
3.1 Design Review. The parties agree to promptly confer at the request of
either party with respect to any material issues a party may have with the
performance of the other party of its obligations under this Agreement and to
review design and engineering issues. JetFax shall pay all travel related costs
for up to four (4) trips to Samsung's laboratory for two (2) of its employees in
providing the Services required hereunder up until the final Acceptance Date.
Airfare, transportation, housing and meal expenses associated with any trips by
JetFax employees in excess of the foregoing shall be paid for by Samsung.
3.2 Changes to the Specifications. JetFax shall make reasonable efforts
to ensure that the Hardware Designs are cost-effective. Each party is entitled
to request modifications in the form of changes or additions to the
Specifications at any time during the term of this Agreement. Such requests
shall be submitted in writing, and shall not be deemed or considered binding
unless accepted by the other party in writing. If any such modification of the
Specifications is agreed upon, the parties will negotiate an equitable
adjustment to the Agreement, including the apportionment of any additional
development, testing or tooling costs. Upon mutual agreement to any change to
the Specifications, both parties will proceed with the implementation of the
prescribed changes, and the Specifications and other Exhibits to this Agreement
shall be modified accordingly to reflect such agreed upon changes.
-4-
<PAGE>
3.3 Modification to Specifications Upon Acceptance. Jetfax and Samsung
agree that upon acceptance of each Deliverable pursuant to Section 4.2, the
Specifications shall be modified as necessary to conform to the Deliverables, as
accepted, except as to material deviations from the Specifications noted in a
writing signed by both parties. The party responsible for such Deliverable
shall perform further work to correct such deviations. After acceptance of each
Deliverable pursuant to Section 4.2, the term "Specifications" as used herein
shall refer in all cases to the Specifications as so modified.
4. DELIVERABLES AND DELIVERY; ACCEPTANCE, AND REJECTION
4.1 Deliverables. Samsung and JetFax agree to use reasonable efforts to
perform their respective obligations hereunder and deliver their respective
Deliverables, which conform to the Specifications, in accordance with the
Project Schedule. Each party's obligation shall be contingent upon the other
party successfully providing any prerequisite Deliverable (as specified in the
Project Schedule) in a timely fashion. AU Deliverables shall be delivered by
the times set forth in the Project Schedule, The parties shall use such
Deliverables for testing and acceptance and marketing purposes only and shall
not sell, lease or transfer the same to any third party.
4.2 Acceptance.
(a) Each party will examine and test each Deliverable (and/or part thereof of
the other party upon receipt. Each receiving party shall, as soon as reasonably
practicable following the receipt of same, but in no event later than fifteen
(15) business days after receipt, (i) accept the Deliverable (or part thereof)
and so inform the other party in writing or (ii) if the Deliverable (or part
thereof) contains material Errors, reject the Deliverable (or part thereof and
provide the other party with a written statement of such material Errors. The
failure of a party to respond within the specified fifteen (15) day period shall
be deemed acceptance of the Deliverable (or part thereof, but shall not limit
the provisions of Section 4.4 hereof. Either party may request a reasonable
extension of time to complete such testing if required under the circumstances,
and both parties shall reasonably consider such requests, provided that no such
extension shall be effective unless in writing and signed by a duly authorized
representative of the party granting such extension.
(b) The developing party will promptly correct the material Errors set forth in
the statement of material Errors with respect to any Deliverable (or part
thereof) and redeliver the Deliverable (or part thereof to the receiving party
within such reasonable period of time as may be agreed upon by JetFax and
Samsung. The receiving party shall, as soon as reasonably practicable after such
redelivery, but in no event later than fifteen (15) business days thereafter,
accept or reject the redelivered Deliverable in accordance with the procedure
set forth in Section 4.2(a). Such procedure shall be repeated until the
Deliverables are accepted or the receiving party invokes the provisions of
Section 4.2(d) hereof.
(c) "Acceptance" shall be deemed to occur upon the earlier of (i) acceptance,
pursuant to this section, of all JetFax and Samsung Deliverables or (ii) the
first sale, lease, license or other distribution or transfer of a Product by
Samsung to a customer or other third party other than solely for test purposes.
(d) The parties further agree that if a dispute arises as to whether any
Deliverable (or part thereof) is acceptable under the foregoing procedure, and
the parties are unable after good faith negotiation to resolve such dispute, the
parties agree to submit the acceptability of any such Deliverable (or part
thereof to a mutually acceptable independent third party mutually acceptable to
the parties. Such third party shall test the Deliverable (or part thereof and
determine if the Deliverable (or part thereof meets the Specifications for the
Deliverable and thus is acceptable. The determination of such independent third
party as to the acceptability of any Deliverable (or part thereof shall be
deemed final. The cost, if any, of employing such independent third party shall
be borne by the losing party.
4.3 Rejection. If any Deliverable is determined under Section 4.2(d) to
not be acceptable, such feature may be deemed a breach of this Agreement by such
delivering party, and the non-breaching party may elect to
-5-
<PAGE>
terminate this Agreement pursuant to Section 12.2(a) hereof or may elect to
accept further resubmission of the applicable Deliverable.
4.4 JetFax Support. For a period of one (1) year after JetFax's release
of the final production Software, JetFax shall provide Samsung with reasonable
engineering support as required to incorporate the Hardware Designs and Software
in the manufacture of the Product. All related airfare, transportation, housing
and meal expenses incurred by JetFax during visits requested by Samsung shall be
paid by Samsung. After the initial one (1) year period, JetFax shall make its
engineering support reasonably available to Samsung at JetFax's customary rates.
For two (2) years after the first date of production of the Product, JetFax
shall use reasonable efforts to correct all material, documented and
reproducible Errors in the Software at no additional charge. Samsung shall
provide such assistance as JetFax may reasonably request in making such
corrections. All such corrections to the Software and Hardware Designs shall be
deemed to be included in the licenses granted under Section 5.3 hereof JetFax
will have no obligation under this section with respect to any Error in the
Software or Hardware Designs caused by any person or entity other than JetFax,
and JetFax is not obligated to correct any Errors in the Software unless such
Error or defect causes the Software to fail to function in conformance with the
Specifications.
5. SUPPLY AND OWNERSHIP RIGHTS
5.1 ASIC Set Procurement. Samsung shall purchase all the ASIC Sets
Samsung or its Affiliates require from JetFax under the terms and conditions
contained herein.
5.2 Material Cost Estimates. If Samsung is unable to procure key
semiconductor components of the Electronics at a price similar to that price at
which JetFax is able to obtain such components, JetFax shall use reasonable
efforts to supply such components to Samsung at JetFax's cost plus handling,
shipping, packaging and insurance expenses.
5.3 JetFax Hardware Designs and Software Etc,
(a) Subject to the terms and conditions of this Agreement, JetFax hereby grants
to Samsung, effective only upon receipt of the final payment due under Section
6.1 herein, a nonexclusive, worldwide license for a period of five (5) years,
commencing on such date, to the Hardware Designs and the Software as required to
manufacture, distribute, sell and service the Product; provided, however, such
license shall not include the right to manufacture the ASIC Sets, which right
shall be retained by JetFax. All ownership rights of all intellectual property
pertaining to the Hardware Design and the Software, including documentation,
designs, schematics and software shall remain the sole property of JetFax.
(b) The non-exclusive license granted to Samsung pursuant to Section 5.3(a) of
this Agreement shall include the right to grant sublicenses to Affiliates of
Samsung but to no other party. Samsung shall give JetFax written notice of any
such sublicense and provide JetFax with a copy of the sublicense.
Notwithstanding any such sublicense, Samsung shall remain fully liable for
compliance with all of its obligations under this Agreement, including without
limitation, the payment of the amounts due under Section 6.2 of this Agreement.
(c) Samsung shall not alter, reverse engineer, decompile or disassemble the
Software or the ASIC Sets or the Field Programmable Gate Arrays included in the
Hardware Designs. JetFax retains all ownership rights in and to the Software,
Hardware Designs, and corresponding intellectual property.
5.4 Samsung Deliverables. Samsung retains its ownership rights in and to
any and all intellectual property developed by it and contained in the Samsung
Deliverables. Subject to the terms and conditions of this Agreement, Samsung
hereby authorizes JetFax to use the Samsung Deliverables and any other Samsung
"Confidential Information," as hereinafter defined, disclosed to JetFax under
this Agreement as necessary or useful to develop the JetFax Deliverables.
During the term of this Agreement, JetFax may reverse engineer, decompile or
disassemble any software provided by Samsung as necessary or useful for the
development of the JetFax Deliverables.
-6-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
5.5 Third Party Confidential Disclosure Agreements. Prior to disclosing
any JetFax Deliverables to any third party in connection with Samsung's limited
"have manufactured" license pursuant to Section 5.3 (a), Samsung shall procure
from such third party a fully executed confidential disclosure agreement in a
form acceptable to JetFax, pursuant to which such party agrees to not disclose
or use such information except pursuant to such license, and naming JetFax and
such third party as parties thereto.
6. PAYMENTS
6.1 Development Fees. In consideration for the Services to be performed
by JetFax hereunder, Samsung agrees to pay to JetFax a nonrefundable development
fee of [*] paid in the following [*] at the times indicated:
(a) [*]
(b) [*] and
[*]
6.2 ASIC Price. Samsung shall pay JetFax for each ASIC Set procured from
JetFax pursuant to Section 5.1 an amount (the "ASIC Set Price") equal to the sum
of [*] Samsung shall pay the amount due hereunder to JetFax upon placing an
order for the ASIC Sets with JetFax. Notwithstanding the foregoing, the amount
due for the first [*] In determining the total cost of the components, the
costs used shall (i) be from the lowest cost suppliers located by JetFax or
Samsung, (ii) not include shipping, handling, taxes or other similar costs,
(iii) not include the cost of printed circuit boards, (iv) not include the cost
of additional or upgraded components required due to changes in the
Specifications or configuration after the Effective Date and (v) not include any
increase in DRAM or SRAM costs occurring after the Effective Date.
6.3 Method of Payment. Payment shall be made by check or by wire transfer
to such bank account or other place as designated in writing by JetFax from time
to time. All taxes, duties, imposts and similar charges which may be assessed
or imposed by any governmental authority upon the sums due to JetFax pursuant to
this Agreement shall be borne and discharged by Samsung except as may otherwise
be agreed to in writing by the parties. No part of the charges borne and
discharged by Samsung shall be deducted by Samsung from any payment due to
JetFax under this Agreement.
6.4 Late Fees. Any late payments shall include interest at the lesser of
(i) [*] per annum or (ii) the maximum rate allowed by applicable law. The
payment of such late charges shall not prevent JetFax from exercising any other
rights it may have as a consequence of the lateness of any payment.
7. REPRESENTATIONS AND INDEMNIFICATIONS
7.1 Representations. Each party represents and warrants that:
(a) it has full right and authority to enter into this Agreement, to perform
its obligations hereunder; and
(b) it has full right and authority to grant the rights granted to the other
party herein.
-7-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
7.2 Samsung Indemnity. Subject to the terms hereof, Samsung agrees to
indemnify, defend and hold JetFax harmless from any claim, loss, or damage
arising from (a) any patent infringement of any third party's rights by any part
of the Product, including the Hardware Designs and Software if such items are
modified by, or on behalf of, Samsung and (b) any sale, use or other disposition
of the Product by Samsung or its transferees. Such obligation to indemnify
shall be subject to the condition that: (i) JetFax promptly notifies Samsung in
writing of any such claim, loss or damage and permits Samsung, through counsel
of choice, to answer the charge of infringement and defend such claim; (ii)
Samsung has sole control of the defense and all related settlement negotiations;
(iii) the claim does not involve a patent that is already licensed by JetFax in
its existing patent license agreements; and (iv) JetFax provides Samsung with
the assistance, information and authority to perform the above. If Samsung
agrees to settle the suit, both Samsung and JetFax agree not to publicize the
settlement nor to permit the party claiming infringement to publicize the
settlement.
7.3 JetFax Indemnity. In the countries fisted in Exhibit E, JetFax agrees
to indemnify, defend and hold Samsung harmless from any claims, loss or damage
arising from any patent infringement by JetFax's Hardware Design and Software.
Such obligation to indemnify shall be subject to the condition that: (i) Samsung
promptly notifies JetFax in writing of any such claim, loss or damage and
permits JetFax, through counsel of choice, to answer the infringement and defend
such claim; (ii) JetFax has sole control of the defense and all related
settlement negotiations; (iii) the claim does not involve a patent that is
already licensed by Samsung in its existing patent license agreements; and (iv)
Samsung provides JetFax with the assistance, information, and authority to
perform the above. If JetFax is liable for such infringement, JetFax may either
modify its design to be non-infringing or obtain a license to continue using
JetFax's design at JetFax's expense. If JetFax is unable to obtain a license
under reasonable terms and the parties are unable to reasonably design around
such patent(s), the parties shall negotiate in good faith a settlement between
them to omit the infringing patent from this indemnity provision.
If JetFax agrees to settle the suit, both JetFax and Samsung agree not to
publicize the settlement nor to permit the party claiming infringement to
publicize the settlement. Notwithstanding anything contained herein to the
contrary, JetFax's liability under this section of this Agreement shall be
limited to an amount not greater than the sum of [*]
Notwithstanding the foregoing, JetFax shall have no liability hereunder for any
claim, loss or damage based on modifications or other alterations made to the
Software or the Hardware Designs by a party other than JetFax or the
combination, operation or use of the Software or the Hardware Designs with other
hardware or software not furnished or developed by JetFax if such infringement
would have been avoided by the use of the Software and the Hardware Designs
without such modification or alteration or without such other hardware or
software.
8. CONFIDENTIALITY
Samsung and JetFax acknowledge that in the course of performance hereunder, each
party may disclose to the other Confidential Information. Confidential
Information shall include, but not be limited to, the Hardware Designs, the
Software, any other hardware designs or software provided, source lists, and
other trade secrets or proprietary information. Confidential Information shall
be treated as confidential by the receiving party. The receiving party shall
not disclose to others (including to any Affiliates of the receiving party not
bound by like conditions of confidentiality), nor make any use of the
Confidential Information received from the providing party for any purpose other
than as contemplated in this Agreement, without the prior written consent of the
providing party. Each party shall not so disclose or use Confidential
Information of the other except to the extent any of the Confidential
Information: (i) was known to the receiving party prior to the disclosure
hereunder; (ii) is or becomes publicly known through no fault or omission
attributable to the receiving party; or (iii) is rightfully given to the
receiving party from sources independent of the providing party, which sources
rightfully possess such information.
9. TRADEMARKS AND LOGOS
-8-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
Samsung agrees to place JetFax's name and copyright notice on all electronic
components designed by JetFax including the firmware, the circuit boards and the
ASIC Sets. JetFax shall also have the right to prominently display its name on
all Windows software pieces, including but not limited to, the printer and
scanner drivers and the configuration program. JetFax shall have the right to
revoke Samsung's right to use JetFax's name and any logo or trademark if the
quality of the Products is not reasonably acceptable to JetFax.
10. MARKETING RIGHT
Samsung agrees to manufacture and sell the Products to JetFax on an OEM basis.
If Samsung has not entered into any OEM contract to supply the Products to a
third party for sale in the United States at the time JetFax wishes to first
place an order for the Products, JetFax and Samsung shall negotiate an agreement
with mutually agreeable terms for such sales. If at any time, Samsung enters
into an agreement to supply the Products to any third party for sale in the
United States on terms more favorable than those then currently in the agreement
between JetFax and Samsung, Samsung shall offer in writing to sell the Products
on the more favorable terms to JetFax. JetFax's rights under this section shall
not prevent Samsung from selling the Product to other OEMS.
11. TERM
This Agreement will commence on the Effective Date and will continue to be in
effect until five (5) years after the date JetFax releases the final production
Software, unless terminated earlier pursuant to other provisions in this
Agreement.
12. TERMINATION
12.1 JetFax Default. If JetFax breaches any of its material obligations
hereunder and fails to cure such breach within sixty (60) days of receiving
written notice thereof from Samsung, or if it is not reasonable to expect such a
cure within that period, fails to commence to cure within that period and to
continue to diligently cure the breach, the price to be paid by Samsung per ASIC
Set under Section 6.2 shall be reduced by [*] until such breach is cured.
12.2 Termination for Cause by Either Part . Either party may terminate this
Agreement:
(a) upon sixty (60) days written notice to the other party if the other party
breaches any of its material obligations hereunder and fails to cure such breach
during the notice period, or if it is not reasonable to expect such a cure
within that period, does not within such time commence to cure, and continues to
diligently cure, the breach; or
(b) upon sixty (60) days written notice to the other party if a petition in
bankruptcy or similar debtor protection law is filed by or against the other
party, or if the other party makes an assignment for the benefit of creditors,
or a receiver is appointed, and such events are not discontinued, vacated or
terminated during the notice period.
12.3 Effect of Termination.
(a) Upon termination of this Agreement, the license set forth in Section 5.3
hereof shall terminate and Samsung shall have no further rights hereunder and
JetFax shall have no obligation to provide any additional ASIC Sets. JetFax
shall retain all rights to the Hardware Designs and the Software.
(b) Upon termination of this Agreement, each party shall return to the other
party all Confidential Information of the other party and shall make no other or
further use of such Confidential Information. Upon termination of this Agreement
for any reason other than default by JetFax, Samsung shall immediately pay to
JetFax all amounts due hereunder which have not yet been paid.
-9-
<PAGE>
13. JETFAX FAILURE TO PERFORM
-------------------------
Subject to JetFax's rights in Article 12 and subject to Section 17. 1, if JetFax
discontinues its performance hereunder prior to the release of the final
production software and fails to make a good faith effort to complete
performance of its obligations hereunder, JetFax shall repay to Samsung, as
liquidated damages, all payments received by JetFax under Section 6. 1.
14. RIGHT TO DEVELOP FOR OTHERS
---------------------------
Nothing in this Agreement will impair JetFax's right to acquire, license,
develop, manufacture, sell or distribute for itself or others similar technology
performing the same or similar functions as the technology contemplated by this
Agreement.
15. DISPUTE RESOLUTION
------------------
15.1 DisputeResolution. All disputes under this Agreement shall be
-----------------
settled, if possible, through good faith negotiations between the parties. If
such good faith negotiations are unsuccessful, either party may, after thirty
(30) days written notice to the other party, seek arbitration as hereinafter
provided.
15.2 Arbitration. Any dispute under this Agreement shall be settled by
arbitration in San Francisco, California, U.S.A. as follows:
(a) The matter in dispute to be settled by arbitration shall be submitted to a
panel of three (3) arbitrators in accordance with the Rules of Arbitration and
Conciliation of the International Chamber of Commerce C'ICC") then in effect.
(b) Each party shall appoint one arbitrator within fifteen (15) days after
giving or receiving the demand for arbitration. The two arbitrators thus
appointed shall, within fifteen (15) days after both have been appointed,
appoint the third arbitrator.
(c) Any appointment required herein not made within the prescribed time shall
be made by the ICC.
(d) The proceedings shall be conducted in English and all arbitrators shall be
fluent in English.
(e) The determination of the arbitrators shall be conclusive and binding upon
the parties and judgment may be entered thereon and enforced by any court
of competent jurisdiction and each party hereby irrevocably consents to the
jurisdiction of such courts for such purpose.
16. DISCLAIMER OF CONSEQENTIAL DAMAGES AND IMPLIED WARRANTIES
---------------------------------------------------------
In no event shall either party be liable to the other for any indirect, special,
incidental or consequential damages for breach of or failure to perform under
this Agreement, even if that party has been advised of the possibility of such
damages. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7. 1, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR UALIED, WITH RESPECT TO ANY
DELIVERABLE OR OTHERWISE, INCLUDING WITHOUT LMTATION, THE WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TECHNICAL PERFORMANCE, OR
COMMERCIAL SUCCESS AND HEREBY DISCLAIMS ALL SUCH OTHER WARRANTIES. EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY ASSUMES ANY RESPONSIBILITIES
WHATSOEVER WITH RESPECT TO THE DEVELOPMENT, MANUFACTURE, USE, SALE, LEASE, OR
OTHER DISPOSITION BY THE OTHER PARTY OR ITS VENDEES OF PRODUCTS INCORPORATING
DELIVERABLES LICENSED OR PROVIDED UNDER THIS AGREEMENT.
-10-
<PAGE>
17. GENERAL
17.1 Force Majeure. Neither party shall be liable for any failure or delay
-------------
in its performance under this Agreement due to causes which are beyond its
reasonable control, including, but not limited to, acts of God, acts of civil or
military authority, fires, epidemics, floods, earthquakes, riots, wars,
sabotage, labor shortages or disputes, and governmental actions; provided that
(a) the delayed party: (i) gives the other party written notice of such cause
promptly, and in any event within fifteen (1 5) days of discovery thereof, and
(ii) uses its reasonable efforts to correct such failure or delay in its
performance, and (b) the delayed party's time for performance or cure under this
Agreement shall be extended for a period equal to the duration of the cause or
sixty (60) days, whichever is less.
17.2 Relationship of Parties. Samsung and JetFax are independent
-----------------------
contractors. Neither company nor its respective employees, consultants,
contractors or agents are agents, employees or joint venturers of the other, nor
do they have any authority to bind the other by contract or otherwise to any
obligation. They will not represent to the contrary, either expressly,
implicitly, by appearance or otherwise. Each party will determine, in its sole
discretion, the manner and means by which the Services are accomplished, subject
to the express condition that each party will at all times comply with
applicable law.
17.3 Personnel. The respective employees, consultants, contractors and
---------
agents of each party will observe the working hours, working rules and holiday
schedule of the other while working on the other's premises. Notwithstanding
the foregoing, employees of a party shall be and remain employees of that party
and shall not be deemed or claim to be employees of the other party even when
working on such other party's premises.
17.4 Employment Taxes and Benefits. Each party shall be responsible for
-----------------------------
any and all employment taxes and benefits payable to its employees,
representatives, contractors, subcontractors and other engaged by it to perform
Services hereunder and in no event shall either party look to the other for such
payments.
17.5 Other Tax Implications. The purpose of development of the
----------------------
Deliverables under this Agreement is to demonstrate that the Product developed
hereunder will conform to the Specifications. The Deliverables have no
intrinsic value as an item. As such, no value added, sales, or use taxes are
anticipated to be required as a result of the Services performed under this
Agreement.
17.6 Export Controls. Samsung acknowledges that it and JetFax are subject
---------------
to and agrees to abide by the United States laws and regulations (including the
Export Administration Act of 1979 and Arms Export Control Act) controlling the
export of technical data, computer software, laboratory prototypes, biological
material and other commodities. The transfer of such items may require a
license from the cognizant agency of the U.S. Government or written assurances
by Samsung that it shall not export such items to certain foreign countries
without prior approval of such agency. JetFax neither represents that a license
is or is not required or that, if required, it shall be issued.
17.7 Assignment. Except as expressly provided herein, neither party may
----------
assign or delegate this Agreement, or any of its respective rights or
obligations hereunder without the prior written consent of the other party
hereto; provided, however, that JetFax may, with prior written notice to
Samsung, assign or delegate this Agreement and JetFax's rights and obligations
hereunder to any successor in interest to JetFax in connection with any sale or
transfer of all or substantially all of its assets or upon any merger,
consolidation, or dissolution. Either party may, from time to time and upon
prior written notice to the other party, subcontract with one of its
subsidiaries for the performance of certain obligations under this Agreement
provided that the party so subcontracting shall remain liable for performance of
its obligations hereunder. Any attempted assignment in violation of the
provisions of this section shall be void and without force or effect. In the
event of a pen-nitted assigm-nent hereunder, this Agreement or the applicable
provisions shall be binding upon the successors, executors, and assigns of the
parties hereto.
17.8 Applicable- Law. This Agreement shall be governed by and construed in
---------------
accordance with the laws of the State of California, U.S.A. without giving
effect to the principles of conflicts of law thereunder.
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<PAGE>
17.9 Severability. If for any reason a court of competent jurisdiction
------------
finds any provision of this Agreement, or portion thereof, to be unenforceable,
that provision of the Agreement shall he enforced to the maximum extent pen-
nissible so as to effect the intent of the parties, and the remainder of this
Agreement shall continue in full force and effect.
17.10 Notices. All notices required or permitted under this Agreement shall
-------
be in writing, reference this Agreement and be deemed given when: (i) delivered
personally; (ii) when sent by confirmed telex or facsimile; (iii) fifteen (15)
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one (1) day after deposit with a commercial
overnight carrier, with written verification of receipt. All communications
will be sent to the addresses set forth below. Either party may change its
address by giving notice pursuant to this section.
JetFax:
- -------
Rudy Prince, President
Jet Fax, Inc.
1376 Willow Road
Menlo Park, California 94025
U. S. A.
Samsung:
- --------
Attn:
Samsung Electronics Corporation
20th Floor, Severance Building 84-11,
5-Ka, Namdaemoon-Ro, Chung-Ku
Seoul, Korea
With a copy to:
James Prince, Esq.
4200 Texas Commerce Tower
Houston, Texas 77002
U.S.A.
17.11 Waiver. Failure by either party to enforce any provision of this
------
Agreement shall not be deemed a waiver of future enforcement of that or any
other provision.
17.12 No Rights in Third Parties. This Agreement is made for the benefit of
--------------------------
Samsung and JetFax and not for the benefit of any third parties.
17.13 Language. This Agreement is executed in original English counterparts,
--------
each of which shall be deemed an original, but collectively shall constitute but
one and the same instrument. The English text of the Agreement shall prevail
over any translation thereof
17.14 Headings and References. The headings and captions used in this
-----------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
17.15 Construction. This Agreement has been negotiated by the parties and
------------
their respective counsel. This Agreement will be fairly interpreted in
accordance with its terms and without any strict construction in favor of or
against either party.
17.16 Trademark Usage. Except for the provision stated in Section 9 of this
---------------
Agreement, neither party shall make any use of any trademark, service mark or
trade name of the other in connection with its advertising, promotional material
or packaging for the Product without first obtaining the other party's written
consent.
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<PAGE>
17.17 Complete Agreement. This Agreement, including all Exhibits
------------------
constitutes the entire agreement between the parties with respect to the subject
matter hereof, and supersedes and replaces all prior or contemporaneous
understandings or agreements, written or oral, regarding such subject matter.
No amendment to or modification of this Agreement shall be binding unless in
writing and signed by duly authorized representatives of both parties. To the
extent any terms and conditions of this Agreement conflict with the terms and
conditions of any invoice, purchase order or purchase order acknowledgement
placed hereunder, the terms and conditions of this Agreement shall govern and
control.
17.18 Survival. The provisions of Sections 5.3(c), 8, 12.3, 13, 14, 15 and
--------
16 shall survive the expiration or termination of this Agreement for any reason.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives effective as of the Effective Date.
JETFAX, INC., a Delaware corporation SAMSUNG ELECTRONICS
CORPORATION, a Korean
Bv: /s/ Edward R. Prince III Bv: /s/ DONGJA KIM
- ---------------------------- -------------------
NAME: Rudy Prince NAME: Dongja Kim
PRESIDENT DIRECTOR
-13-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
JETFAX DELIVERABLES
[*]
-14-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B
PRODUCT SPECIFICATION
[*]
-15-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
PRODUCT SPECIFICATION(CONTINUED)
[*]
-16-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
PRODUCT SPECIFICATION(CONTINUED)
[*]
-17-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C
PROJECT SCHEDULE
[*]
-18-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT D
SAMSUNG DELIVERABLES
A. H/W DESIGN AND PRODUCTION RELATED DOCUMENTATIONS
1. [*]
2. [*]
3. [*]
4. [*]
5. [*]
6. [*]
7. [*]
B: S/W RELATED DOCUMENTATIONS
1. [*]
2. [*]
3. [*]
4. [*]
5. [*]
6. [*]
7. [*]
-19-
<PAGE>
EXHIBIT E
COUNTRY FOR AGENCY APPROVAL
** UNITED STATES
** CANADA
** UNITED KINGDOM
** GERMANY
** ITALY
** SPAIN
** SWEDEN
** HOLLAND
-20-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT F
SAMSUNG LAMP Controller Component Cost Estimate Preliminary Costed Bill of
Materials
<TABLE>
<CAPTION>
Target Extended
Item Quantity Unit Cost Cost Description
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[*]
</TABLE>
-21-
<PAGE>
EXHIBIT 10.32
[*] = CONFIDENTIAL TREATMENT REQUESTED
REDACTED
SOFTWARE LICENSE AGREEMENT
BETWEEN
OKIDATA CORPORATION
AND
JETFAX, INC.
Effective Date: September 30, 1996
<PAGE>
SOFTWARE LICENSE AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Paragraph Page
- --------- ----
<S> <C> <C>
1. DEFINITIONS................................. 3
2. SUPPLIER WARRANTIES......................... 5
3. GRANT OF LICENSE............................ 6
4. DUTIES OF SUPPLIER.......................... 8
5. COMPENSATION................................ 8
6. INTELLECTUAL PROPERTY PROTECTION............ 9
7. TERMINATION................................. 11
8. TERM........................................ 12
9. LIMITATION OF LIABILITY..................... 13
10. MISCELLANEOUS............................... 13
11. SURVIVAL.................................... 14
SCHEDULES:
A SPECIFICATION
B SUPPLIER DOCUMENTATION
C ROYALTIES
D CUSTOM MODIFICATIONS
E DELIVERY
F MAINTENANCE
G CONFIDENTIALITY
H TRADEMARK USAGE
I ODC MFF Products
</TABLE>
<PAGE>
SOFTWARE LICENSE AGREEMENT
This Software License Agreement (the "Agreement") is entered into by and
between:
JetFax, Inc. ("Supplier"), a California corporation having its principal
business address at 1374 Willow Road, Menlo Park, CA 94025-1430, USA; and,
Oki Data Corporation ("ODC"), a Japanese corporation, having its principal
business address at 4-11-22 Shibaura, Minato-ku, Tokyo 108, Japan.
RECITALS
A. Supplier is currently developing certain multi functional software
referred to in portions of this Agreement as JetSuite(TM), in "Light"
and "Pro" versions.
B. ODC wishes to have JetSuite customized by Supplier to permit its
operation with ODC's Multi Functional Peripheral Interface, and
Supplier wishes to perform such customization for ODC.
C. Supplier wishes to grant to ODC and ODC wishes to obtain from Supplier
a non-exclusive worldwide license to distribute object code versions
of JetSuite, as customized, together with supporting documentation, to
purchasers of certain ODC multi functional products.
NOW THEREFORE, in consideration of the mutual promises and covenants set forth
herein, Supplier and ODC agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the meanings set forth in
this Paragraph:
3
<PAGE>
1.1 "SOFTWARE". That group of computer programs developed by or
provided by Supplier known as "JetSuite(TM)", including the versions
customized hereunder by Supplier for ODC's Multi Functional Peripheral
Interface, which is more fully described in the Specification, together
with all Maintenance Modifications thereto.
1.2 "SPECIFICATION". The description of the design and function of
the Software contained in Schedule A, attached hereto and incorporated
herein.
1.3 "AFFILIATE". A corporation, company, or other entity in which a
party hereto owns, directly or indirectly, a beneficial interest of fifty
percent (50%) or more, or which, directly or indirectly, owns a beneficial
interest in fifty percent (50%) or more in such party or which directly or
indirectly controls such party, or is directly or indirectly controlled by,
or under common control with, such party and/or the parent company of such
party. For the purpose of this definition, the term "controls", "controlled
by", or "under common control with", as used with respect to any
corporation, company or other entity, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such corporation, company or other entity, whether through
the ownership of voting securities, or by contract, or otherwise.
1.4 "SUPPLIER DOCUMENTATION". The documentation, prepared by Supplier
in machine-readable form, of the design and operation of the Software, as
listed and described in Schedule B attached hereto and incorporated herein.
1.5 "ODC DOCUMENTATION". A derivative work of Supplier Documentation
prepared by ODC, or its sublicensees, by editing, reorganizing, and
expanding the Supplier Documentation into the format and trade dress deemed
appropriate by ODC, or its sublicensees, for purposes of marketing the ODC
MFF Products.
1.6 "DOCUMENTATION". A term that includes both Supplier Documentation
and ODC Documentation.
1.7 "ERROR". A defect in the Software which causes the Software not to
operate substantially in accordance with the Specification, or a mistake in
the Supplier Documentation which causes such a result, or which
substantially misleads the reader in the operation or maintenance of the
Software.
1.8 "MAINTENANCE MODIFICATION". A modification or revision to the
Software made by Supplier that (i) corrects an Error, (ii) supports a new
release of an operating system designated in the Specification with which
the Software is designed to operate; or, (iii) make enhancements or
improvements in efficiency or effectiveness, or constitutes
4
<PAGE>
any other change made at the option of Supplier for the convenience of
Supplier, within existing functions without adding new features.
1.9 "ODC MFF PRODUCTS". Multi function hardware products and associated
software developed by or provided by ODC that makes use of ODC's Multi
Functional Peripheral Interface as more fully described in Schedule I.
1.10 "END-USER". A third party using the Software and Documentation for
ordinary and customary business and personal use and not for
redistribution.
1.11 "RESELLER". A third party, such as distributor, dealer or private
label supplier, in ODC's chain of distribution that distributes the
Software and Documentation to other Resellers or to End Users.
1.12 REVENUE UNIT". One unit, determined for royalty purposes, as
described in Schedule C, attached hereto and incorporated herein.
1.13 "NON-REVENUE UNIT". One unit, determined for royalty purposes, as
described in Schedule C.
1.14 "MAINTENANCE SOURCE CODE". Source Code of certain portions of the
Software made available to ODC for maintenance purposes pursuant to
Paragraph 4.1 of this Agreement, as described in Schedule D.
1.15 "ODC-SUPPLIED SOFTWARE". Certain software of ODC, in object code
form, made available to Supplier to assist in its customization effort on
behalf of ODC, as described in Schedule D.
2. SUPPLIER WARRANTIES
2.1 Ownership. Supplier warrants that is owns (and to the extent
developed during the term of this Agreement, that it will own) or otherwise
has the full and complete right to license (and to the extent developed
during the term of this Agreement, that it will have the full and complete
right to license) the Software and Supplier Documentation and that there
are no claims, liens or clouds on such title or such rights.
2.2 Conformance With Specifications. Supplier warrants that the
Software and Supplier Documentation shall comply in all material respects
with the Specification and shall function on the machines and with the
operating systems identified in the Specification.
2.3 Preservation of Intellectual Property Rights. Supplier warrants
that the
5
<PAGE>
Software and Supplier Documentation, or any portions thereof, have not been
published or made available outside of Supplier without appropriate
proprietary or copyright notices where required to preserve Supplier's
ownership and proprietary rights therein.
2.4 Warranty Disclaimer. SUPPLIER MAKES NO WARRANTIES, OTHER THAN THOSE
SET FORTH IN THIS PARAGRAPH 2, WHETHER EXPRESS OR IMPLIED, AND SPECIFICALLY
DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR THAT THE SOFTWARE, INCLUDING THE CUSTOM SOURCE CODE, WILL RUN
ERROR-FREE. ODC has provided the opportunity under this Agreement to test
and evaluate the Software and is responsible for determining the
suitability of the Software for its purposes.
2.5 Remedy Limitation. ODC's sole remedy against Supplier for breach of
warranty of Paragraph 2.2 of this Agreement shall be to request a
Maintenance Modification and, if such Maintenance Modification is not
effected so as to correct the Error, to terminate this Agreement. The
foregoing limitation of remedies shall not apply to the enforcement of
ODC's right to damages or equitable relief for breach of the warranties
contained in Paragraphs 2.1 and 2.3 hereof, to enforcement of the
indemnities set forth in this Agreement, or to any remedies either party
may seek with respect to infringement of its trademarks, trade names, or
other intellectual property rights.
3. GRANT OF LICENSE.
3.1 Software. Supplier grants to ODC a nonexclusive, non-transferable
worldwide right and license, in compliance with the terms of this
Agreement, to reproduce the Software for inclusion in the ODC MFF Products,
in object code form only, and to market and distribute copies of the
Software, as included in the ODC MFF Products, in object form only, to its
Affiliates, Resellers and End Users under sublicenses that comply with
Paragraphs 6.4, 6.5 and 6.7 hereof.
3.2 Documentation. Supplier grants to ODC a nonexclusive, non-
transferable worldwide right and license, in compliance with the terms of
this Agreement, to copy the Supplier Documentation, to prepare ODC
Documentation as a derivative work thereof, and to copy and distribute the
ODC Documentation as part of the ODC MFF Products to its Affiliates,
Resellers and End Users under sublicenses that comply with Paragraphs 6.4,
6.5 and 6.7 hereof.
3.3 Demo Units. Supplier grants to ODC a nonexclusive, non-transferable
worldwide right and license, in compliance with the terms of this
Agreement, to make a total of [*] demonstration and training copies of
the Software and associated ODC Documentation for use by ODC and its sales
force in demonstration and training
[*] = Confidential Treatment Requested
6
<PAGE>
activities. Each such demonstration and training copy shall be prominently
marked with a legend stating "Demonstration and Training Copy--No Sale,
Transfer or Copying Authorized."
3.4 Maintenance Source Code. Supplier grants to ODC a nonexclusive non-
transferable, royalty-free internal company license to use and copy the
Maintenance Source Code, at a secure ODC site, for the limited purposes of
enabling ODC employees: (i) to understand its design, structure and
interface with the ODC MFF Products; and, (ii) when and to the extent
permitted under this Agreement, to correct Errors and to make other
maintenance modifications.
EXCEPT AS SET FORTH IN THIS SUBPARAGRAPH 3.4, ODC HAS NO RIGHT TO USE,
DISCLOSE, MODIFY, TRANSFER, SUBLICENSE OR OTHERWISE DISTRIBUTE THE
MAINTENANCE SOURCE CODE, AND ODC SHALL PROTECT THE MAINTENANCE SOURCE CODE
UNDER ALL PROVISIONS FOR CONFIDENTIALITY UNDER THIS AGREEMENT.
3.5 Trademarks. Supplier grants to ODC a non-exclusive, non-
transferable, worldwide, royalty-free right to use and reproduce certain of
Supplier's logos, trademarks and servicemarks in connection with the
distribution and promotion of the ODC MFF Products. ODC agrees to use such
logos, trademarks and servicemarks in a manner approved by Supplier and
consistent with Schedule H, attached hereto and incorporated herein.
3.6 Compliance. The licenses granted to ODC hereunder extend to its
Affiliates and any third party approved by Supplier; provided, however,
that ODC represents and warrants that such sublicensed Affiliates and third
parties shall be bound fully by the terms and conditions of this Agreement.
3.7 Cooperation. Supplier agrees to deliver to ODC all such duly
executed instruments (to be supplied by ODC) of license, application papers
and rightful oaths as are (i) necessary to vest in ODC, or any designee of
ODC, the foregoing rights in the Software Documentation, and (ii) necessary
or useful in enforcing and defending such rights.
3.8 Commencement. The license grants made by Supplier under this
Paragraph 3 shall be deemed made as of the Effective Date of this
Agreement.
3.9 Product Configuration. [*]
7
[*] = Confidential Treatment Requested
<PAGE>
[*]
(ii)
4. DUTIES OF SUPPLIER
4.1 Custom Modifications. Supplier shall develop certain custom
modifications to its JetSuite software to permit it to operate in the
environment of the ODC MFF Products and ODC's Multi Functional Peripheral
Interface on a schedule and for compensation, the terms of which are
described in Schedule D, attached hereto and incorporated herein.
4.2 Deliverables. Supplier shall furnish to ODC copies of the Software,
Maintenance Source Code and Supplier Documentation incorporated herein.
4.3 Maintenance. Supplier shall maintain the Software and the Supplier
Documentation on terms and for compensation as set forth in Schedule F
attached hereto and incorporated herein.
4.4 Technical Assistance and Training. Supplier agrees to provide, at no
additional costs to ODC, up to 20 hours of technical assistance and
training, at times and places to be designated by ODC, for the purpose of
transferring the Software to ODC and training selected ODC personnel, and,
if requested by ODC, ODC licensees, in the application, use and maintenance
of the Software. Supplier represents that Supplier has sufficient trained
personnel to perform the foregoing. In the event such technical assistance
and training sessions take place at a location other than Supplier's
facility in Menlo Park, ODC will reimburse Supplier for its reasonable
authorized travel and living expenses according to ODC's then current
practices, with receipts to be provided to ODC for all expenses in excess
of $25.00 US.
4.5 Option. Supplier agrees to offer to ODC the option to license any
multi-function software product Supplier may develop that it offers for
license on a non-exclusive basis, including any upgraded version of
JetSuite, on terms, except prices, similar to those set forth in this
Agreement. ODC shall have sixty (60) days, following any such offer by
Supplier, to respond with an expression of interest or no interest in
accepting such a license.
5. COMPENSATION
5.1 Royalties. In consideration of the rights and licenses conveyed
herein to ODC in and to the Software and Documentation, as well as the
obligations to be performed by
8
[*] = Confidential Treatment Requested
<PAGE>
Supplier hereunder, ODC agrees to compensate Supplier (i) for the custom
modifications addressed in Paragraph 4.1 hereof on the terms set forth in
Schedule D; and (ii) in accordance with the royalties and other terms set
forth in Schedule C.
5.2 Demo Units. Unless specifically provided otherwise in Schedule C, no
royalty shall be due or payable with respect to the [*] copies of the
Software and the ODC Documentation licensed pursuant to Paragraph 3.3
hereof, provided each such copy is marked "Demonstration and Training
Copy--No Sale, Transfer or Copying Authorized" and is used only for
demonstration and training purposes.
5.3 Reporting. ODC shall keep accurate and complete records of all
copies made of the Software and the description of such copies. ODC shall
allow an independent certified public accountant, chosen and paid by
Supplier, at reasonable intervals and during normal business hours of ODC,
to examine all books and records relating to the copying, distribution, and
sublicensing of the copies of the Software and ODC's Documentation for
purposes of determining royalties that have accrued. ODC shall deliver to
Supplier within sixty (60) days following the end of each quarter of ODC's
fiscal year, a written report showing the number of copies of the Software,
identifying Revenue Units and Non-Revenue Units, distributed by ODC during
the preceding period.
5.4 Payment. Payments to Supplier for royalties and for custom
modifications shall be made by ODC on the terms set forth in Schedules C
and D respectively.
6. INTELLECTUAL PROPERTY PROTECTION
6.1 Supplier Ownership. Title to and ownership of the Software and
Supplier Documentation, including the Maintenance Source Code, as well as
any modifications thereto made during the term of this Agreement, shall at
all times remain with Supplier, and ODC shall not be deemed to have
acquired hereby any title or ownership therein.
6.2 ODC Ownership. Title to and ownership of the ODC-Supplied Software,
as well as any modifications thereto made during the term of this
Agreement, shall at all times remain with ODC, and Supplier shall not be
deemed to have acquired any title or ownership therein. Supplier shall not
disclose, transfer, sublicense or otherwise distribute the ODC-Supplied
Software to any third party in any form.
6.3 Confidentiality. The parties have entered into a Proprietary Rights
and Non Disclosure Agreement effective March 25, 1996 ("Confidentiality
Agreement"), attached hereto and incorporated herein as Schedule G, which
expires by its terms one year following the effective date. The parties
hereby agree that the expiration date of the Confidentiality Agreement
shall be extended so that it expires on the expiration date of this
Agreement. All other provisions of the Confidentiality Agreement are
unchanged and in full force and effect.
9
[*] = Confidential Treatment Requested
<PAGE>
6.4 ODC Protection. ODC shall take, and shall require its sublicensees
to take, all reasonable precautions, including those specifically requested
by Supplier, necessary to protect and preserve the rights of Supplier in
and to the Software and Supplier Documentation. In this connection,
notwithstanding the "sale" or "transfer" of the ODC MFF Products, each
transfer by ODC or its sublicensees of the Software and/or Supplier
Documentation to an End User shall be pursuant to a written End User
License Agreement, the form of which is approved by Supplier.
6.5 Marketing. The Software shall be marketed on a joint logo basis in
the trade dress of ODC, or its sublicensees, with a byline identifying
Supplier. ODC Documentation shall contain the following notice after the
title of the Program:
"JetSuite(TM), a trademark of JetFax, Inc.; Copyright (C) 19__ JetFax,
Inc., edited and distributed by [ODC or sublicensee] under license. All
------------------
rights reserved"
The year of copyright shall be as designated by Supplier (currently,
"1996") and the name of the sublicensee as designated by ODC.
6.6 Cooperation. The parties shall, to the extent commercially
reasonable under the circumstances, cooperate in the enforcement of all
rights in the Software and Documentation against infringers.
6.7 Reverse Engineering. ODC shall not reverse-assemble,
reverse-compile, or reverse-engineer the Software. ODC shall require of all
employees, Affiliates, Resellers, End-Users and any third parties who are
given access to the Software and Documentation, whether as part of the ODC
MFF Product organization or otherwise, that they not, except as expressly
authorized in this Agreement, copy, modify, distribute, reverse-engineer,
reverse-assemble, or reverse-compile the Software. ODC shall use all
reasonable efforts to enforce such requirement.
6.8 ODC Documentation Review. ODC shall, following receipt of the
Software and the Supplier Documentation, provide to Supplier a final draft
of the ODC Documentation for Supplier's review. Supplier shall review the
ODC Documentation for technical accuracy and within 14 days, report to ODC
in writing, any perceived inaccuracies and recommend corrections. ODC shall
incorporate into the ODC Documentation any such recommended corrections
necessary to ensure technical accuracy.
6.9 Product Review. ODC shall furnish to Supplier, prior to publication
or other dissemination, a copy of each version of the ODC MFF Product to be
distributed by ODC and representative copies of all other material and
publications that use or display the trade name, logos, trademarks or
servicemarks of Supplier. Supplier shall, after its review, return to ODC
such ODC MFF Products and other material and publications. ODC shall make
such changes as Supplier may reasonably require to ensure proper use of its
intellectual property and to avoid any statement that is, in Supplier's
business
10
<PAGE>
judgment, inaccurate, objectionable, or misleading. Neither party shall
have the right to use the other's intellectual property except in
connection with the ODC MFF Products and the promotion and publication
thereof.
6.10 Infringement Indemnity. Supplier agrees to defend, indemnify, and
hold harmless ODC from and against any claims that the Software or Supplier
Documentation infringes a U.S., Canadian, European, Japanese or Chinese
(PRC) copyright, trademark, trade secret, or other intellectual property
right of any other party. If such a claim arises, or if in Supplier's
judgment is likely to arise, Supplier may, at its sole option, procure the
right for ODC to continue to exercise its rights and licenses granted
herein, or to replace or modify the Software or Supplier Documentation in a
functionally equivalent manner so they become non-infringing. If neither of
the foregoing alternatives is available on terms that are reasonable in
Supplier's judgment, ODC, upon written request by Supplier, may return the
Software, Maintenance Source Code and Supplier Documentation to Supplier
and shall receive, as its sole remedy, reimbursement of the amounts paid to
Supplier hereunder with respect to distribution in the country or countries
in which the alleged infringement occurred. Notwithstanding the foregoing,
Supplier shall have no obligation of indemnity with respect to claims
arising out of (i) modifications made by ODC or its licensees; or, (ii) any
combination of the Software or Documentation with data not supplied by
Supplier, or with the software or hardware supplied by ODC or its
licensees, excluding ODC MFF Products.
6.11 Misstatement Indemnity. ODC agrees to defend, indemnify, and hold
harmless Supplier from and against any claims based on or arising out of
any statements or representations made by ODC, or its Affiliates, or the
employees or agents of any of them, or placed in the ODC Documentation,
that are not accurately derived from the Supplier Documentation or the
Specification, except for any such statement or representation contained in
the ODC Documentation reviewed by Supplier pursuant to Paragraph 6.8 and
not recommended for correction by Supplier.
6.12 Conditions of Indemnity. The foregoing indemnities are conditioned
on the following:
(i) Prompt written notice of any claim for which indemnity is sought, by
the party claiming indemnification, together with an offer to permit
the indemnifying party to conduct the defense;
(ii) Cooperation in the defense of any such claim, with each party
bearing its own respective costs of such cooperation; and
(iii) Sole control of the indemnifying party over any defense, settlement
or offer of settlement regarding any such claim.
11
<PAGE>
7. TERMINATION
7.1 Bankruptcy. This Agreement may be terminated by either party in the
event that the other party is adjudicated bankrupt, or if a receiver or
trustee is appointed for such party or for a substantial portion of its
assets, or if any assignment for the benefit of its creditors is made and
such adjudication, appointment or assignment is not-set aside within sixty
(60) days.
7.2 Material Breach. In the event of a material breach of this
Agreement, including, without limitation, Supplier's failure to deliver the
required custom modifications of the Software, which breach is not cured or
otherwise resolved within sixty (60) days after written notice from the
other party, the party giving notice may choose, at its sole discretion, to
pursue its remedies at law subject to the other provisions of this
Agreement, or to terminate this Agreement.
7.3 Stop Work. Upon receipt of a termination notice from ODC, unless the
parties specifically agree otherwise in writing, Supplier must immediately
stop all further non-recurring engineering ("NRE") cost incurrence
hereunder relating to custom modifications for ODC, and no such costs
incurred following such notice shall be reimbursable.
7.4 Maintenance. In the event of termination of this Agreement by ODC,
all obligations of Supplier to ODC for maintenance and support shall cease.
7.5 End User sublicenses and royalties. Termination of this Agreement
shall have no effect on End User sublicenses granted by or through ODC
prior to the effective date of such termination, or on any unfulfilled
obligation of ODC to pay royalties for copies of the Software made and
distributed at any time.
7.6 Confidentiality. Neither termination nor expiration of this
Agreement shall relieve either party of its continuing obligations of
confidentiality and non-disclosure expressed herein.
7.7 Maintenance Source Code Return. Seven (7) years following any
termination of this Agreement, ODC shall promptly return to Supplier the
Maintenance Source Code furnished hereunder.
8. TERM
8.1 Duration. This Agreement shall commence as of the Effective Date set
forth at the end of this Agreement and, unless terminated earlier pursuant
to the provisions of Paragraph 7 hereof, shall continue in effect for five
(5) years, at which time it shall expire.
12
<PAGE>
8.2 Effect of Expiration. Upon expiration of this Agreement, all
distribution rights granted hereunder shall cease, however, expiration
shall have no effect on End User sublicenses granted by or through ODC
prior to the effective date of expiration, or on any unfulfilled obligation
of ODC to pay royalties for copies of the Software made and distributed at
any time. Seven (7) years following expiration of this Agreement, ODC shall
promptly return to Supplier the Maintenance Source Code furnished
hereunder.
9. LIMITATION OF LIABILITY.
EXCEPT FOR CLAIMS INVOLVING PERSONAL INJURY OR DEATH, INTENTIONAL
MISAPPROPRIATION OF THE INTELLECTUAL PROPERTY OF A PARTY BY THE OTHER PARTY
OR THE LOSS OF VALUABLE INTELLECTUAL PROPERTY THROUGH THE FAILURE OF THE
OTHER PARTY TO PROTECT IT AS REQUIRED HEREUNDER, IN NO EVENT SHALL EITHER
PARTY OR THEIR AFFILIATES OR LICENSEES BE ENTITLED TO ANY SPECIAL,
INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) OR
DAMAGES EXCEEDING THE AMOUNTS THERETOFORE PAID TO SUPPLIER UNDER THIS
AGREEMENT, WHETHER SUCH LIABILITY ARISES FROM ANY CLAIM BASED ON BREACH OR
REPUDIATION OF CONTRACT, WARRANTY, BUSINESS TORT, NEGLIGENCE, OR OTHERWISE.
10. MISCELLANEOUS
10.1 Independent Contractors. Nothing contained in this Agreement or
done in pursuance thereof shall be deemed to constitute (i) a joint venture
between ODC or its Affiliates and Supplier, or (ii) any party hereto the
agent of the other party for any purpose whatsoever.
10.2 Survival of Basic Understanding. If any provision of this Agreement
is held to be unenforceable or illegal for any reason, such decision shall
not affect the validity or enforceability of the remaining portions hereof,
provided that with respect to any material provision deemed to be
unenforceable or illegal, the parties shall negotiate in good faith to
achieve a new legally enforceable provision which most closely approximates
the original intent of the provision declared unenforceable or illegal.
10.3 Amendments. Any amendments or alterations hereof shall be valid
only when made in writing and executed by authorized representatives of
both parties.
10.4 Notices. Notices and other formal communications by a party under
this Agreement shall be deemed given when delivered at the address below
(or such other address as may be furnished by either party hereafter) as
evidenced by registered mail return receipt or by telex, or facsimile
transmission followed by registered mail or other hard copy.
13
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For ODC: Oki Data Corporation
4-11-22 Shibaura, Minato-Ku
Tokyo, 108, Japan
Attn: Hiroyuki Sakai
For Supplier: JetFax, Inc
1376 Willow Road,
Menlo Park, CA 94025-1430 USA
Attn: Rudy Prince
10.5 Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors or assigns of each party, however, this Agreement
is not assignable by either party without the prior written consent of the
other party, except that this Agreement may be assigned to an Affiliate, or
to a successor to all or substantially all of the assets and business of
the assigning party, provided that such Affiliate or successor in interest
agrees to perform all the responsibilities of the assigning party and the
assigning party guarantees such performance.
10.6 Non-Waiver. Either party's waiver of any instance of the other's
non-compliance with this Agreement shall not be deemed a waiver of any
future non-compliance.
10.7 Force Majeure. Neither party hereto shall be liable for any delay
or failure to perform any provision of this Agreement if such delay or
failure arises directly or indirectly out of any act of nature, acts of a
public enemy, earthquake, flood, government order, riot or any other cause
beyond the reasonable control of ODC or Supplier.
10.8 Governing Law and Dispute Resolution. This Agreement and the
performance of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of California, USA. All disputes,
controversies or differences which may arise between the parties hereto out
of, in relation to or in connection with this Agreement, or the breach
hereof, shall be settled by binding arbitration held in San Francisco,
California, pursuant to the rules of the American Arbitration Association.
10.9 Integration. This Agreement sets forth the entire agreement and
understanding of the parties with respect to the subject matter of this
license, and merges all proposals, prior discussions or prior agreements
between them.
11. SURVIVAL
Paragraphs 1,2,6,8,9, and 10 shall survive for five (5) years after
termination or expiration of this Agreement.
IN WITNESS WHEREOF, the duly authorized representatives of the parties have
caused this
14
<PAGE>
Agreement to be executed and consider the same to be effective as of September
30, 1996 ("Effective Date").
Supplier:
JETFAX, INC.
By: /s/ Edward R. Prince III
--------------------------
Title: PRESIDENT
-----------------------
ODC:
OKI DATA CORPORATION
By: /s/ Y. Shinaisho
--------------------------
Title: General Manager
-----------------------
15
<PAGE>
SOFTWARE LICENSE AGREEMENT
SCHEDULE A: SPECIFICATION
A.1 Design & Function. [*]
A.2 ODC MFF Products. [*]
A.3 Operating Systems. [*]
A.4 Communications. [*]
A.5 Schedule. [*]
JetFax Company Confidential Page 16
[*] = Confidential Treatment Requested
<PAGE>
JETSUITE for OKI Functional Specification:
APPLICATION AND DRIVERS
(C) JetFax, Inc.
11/12/96
Rev 15
<TABLE>
<S> <C>
1. DOCUMENT SCOPE............................................................ 18
2. REFERENCES................................................................ 18
2.1 [*]................................................................... 18
2.2 [*]................................................................... 19
2.3 [*]................................................................... 19
2.4 [*]................................................................... 19
2.5 [*]................................................................... 19
3. JETSUITE DRIVERS.......................................................... 19
3.1 [*]................................................................... 19
3.2 [*]................................................................... 20
3.2.1 [*].............................................................. 20
3.3 [*]................................................................... 22
3.3.1 [*].............................................................. 22
3.3.2 [*].............................................................. 22
3.4 [*]................................................................... 23
3.4.1 [*].............................................................. 23
3.4.2 [*].............................................................. 23
3.4.3 [*].............................................................. 23
3.4.4 [*].............................................................. 24
3.5 [*]................................................................... 24
3.6 [*]................................................................... 24
3.7 [*]................................................................... 24
3.7.1 [*].............................................................. 24
3.7.2 [*].............................................................. 25
3.7.3 [*].............................................................. 26
3.7.4 [*].............................................................. 26
3.7.5 [*].............................................................. 26
3.8 [*]................................................................... 27
3.9 [*]................................................................... 27
3.10 [*].................................................................. 27
3.11 [*].................................................................. 28
3.11.1 [*]............................................................. 28
3.11.2 [*]............................................................. 28
3.12 [*].................................................................. 28
3.13 [*].................................................................. 29
4. JETSUITE APPLICATION...................................................... 29
4.1 [*]................................................................... 29
</TABLE>
[*] = Confidential Treatment Requested
JetFax Company Confidential Page 17
<PAGE>
<TABLE>
<S> <C>
4.2 [*]...................................................................... 29
4.3 [*]...................................................................... 30
4.4 [*]...................................................................... 31
4.5 [*]...................................................................... 31
4.6 [*]...................................................................... 32
4.7 [*]...................................................................... 32
4.8 [*]...................................................................... 32
4.9 [*]...................................................................... 32
4.10[*]...................................................................... 32
4.11[*]...................................................................... 33
4.12[*]...................................................................... 33
4.13[*]...................................................................... 33
4.14[*]...................................................................... 34
</TABLE>
Table of Figures
<TABLE>
<S> <C>
Figure 1 [*]................................................................. 20
Figure 2 [*]................................................................. 21
Figure 3 [*]................................................................. 23
Figure 4 [*]................................................................. 24
Figure 5 [*]................................................................. 27
Figure 6 [*]................................................................. 27
Figure 7 [*]................................................................. 28
Figure 1 [*]................................................................. 30
Figure 1 [*]................................................................. 34
</TABLE>
Document Scope
[*]
References
[*]
[*] = Confidential Treatment Requested
JetFax Company Confidential Page 18
<PAGE>
[*]
JetSuite Drivers
Overview
[*]
[*] = Confidential Treatment Requested
JetFax Company Confidential Page 19
<PAGE>
[*]
Figure 1: JetSuite Block Diagram
Status Monitor
Overview
[*]
JetFax Company Confidential Page 20
[*] = Confidential Treatment Requested
<PAGE>
[*]
Figure 2: Status Monitor Block Diagram
System Configuration
[*]
Printer setup
[*]
Scanner setup
[*]
[*] = Confidential Treatment Requested
JexFax Company Confidential Page 21
<PAGE>
[*]
MFP Daemon
[*]
Status Monitor API
[*]
[*] = Confidential Treatment Requested
JetFax Company Confidential Page 22
<PAGE>
TWAIN Driver
[*]
Figure 3: TWAIN Driver Block Diagram
[*]
TWAIN API
[*]
Scan MFPI Client Comm
[*]
Status API
[*]
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[*]
Setup Dialog
[*]
[*]
Figure 4: Basic MFPI Client Block Diagram
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[*]
Common Client API
[*]
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<PAGE>
[*]
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Print Client
[*]
Figure 5: Print Client Block Diagram
Fax Client
Scan Client
[*]
Figure 6: Scan Client Block Diagram
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Memory Clients
[*]
Figure 7: Memory Client Block Diagram
[*]
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<PAGE>
[*]
[*]
JetSuite Application
Overview
[*]
Desktop
[*]
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<PAGE>
[*]
Diagram of Computer Screen [*]
[*]
Figure 8: JetSuite Desktop User Interface
[*]
Viewing
[*]
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<PAGE>
[*]
Printing
[*]
Faxing
[*]
Scanning
[*]
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Copying
[*]
PCL Emulation
[*]
Memory Requirements
[*]
Host Installer/Uninstaller & Localization
[*]
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<PAGE>
[*]
Format of Deliverables
[*]
Documentation
[*]
Testing and Qualification
[*]
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JetSuite Table of Features
[*]
Listing Feature, Product included in, milestone and description.
Pages 34 through 40 have
been redacted [*]
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[*]
Introduction
- ------------
[*]
Terminology
- -----------
[*]
Alpha Quality Acceptance Criteria
- ---------------------------------
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<PAGE>
[*]
Beta Quality Acceptance Criteria
- --------------------------------
[*]
Documentation
[*]
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[*]
FCS (First Customer Shipment) Quality Acceptance Criteria
- ---------------------------------------------------------
[*]
Documentation
[*]
Revision B. FCS Quality Acceptance Criteria
- -------------------------------------------
[*]
Documentation
[*]
Quality Statement
[*]
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[*]
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<PAGE>
SOFTWARE LICENSE AGREEMENT
SCHEDULE B: SUPPLIER DOCUMENTATION
Supplier Documentation shall consist of User's Manuals for JetSuite Lite and
JetSuite Pro versions. Each manual shall be sufficiently descriptive to permit a
user of average computer capability to operate the Software features required by
the Specification.
JetFax Company Confidential Page 45
<PAGE>
SOFTWARE LICENSE AGREEMENT
SCHEDULE C: ROYALTIES
C.1 REVENUE UNIT. For purposes of assessing royalties payable hereunder, each
of the following, when offered for sale, lease or sublicense by ODC, shall be
deemed one Revenue Unit ("RU"):
a. A copy of the Software, in either the Lite or Pro version,
made available as a component bundled with a hardware device that
makes use of ODC's Multi Functional Peripheral Interface.
b. A copy of the Software, in either the Lite or Pro version,
made available by any means independently of a hardware device.
C.2 NON-REVENUE UNIT. For purposes of assessing royalties payable hereunder, a
Non-Revenue Unit ("NRU") shall be deemed to be any RU on which no royalty shall
be due and payable. The following are the only NRU's authorized hereunder:
a. Demo Units described in Paragraph 5.2 hereof.
C.3 ROYALTY. In consideration of the rights and licenses granted to ODC
pursuant to Paragraph 3 hereof, ODC agrees to pay Supplier the following sums
for each RU distributed by ODC either directly or through sublicensing to third
parties:
QUANTITIES AMOUNT DUE
---------- ----------
JetSuite Lite Version
[*]
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C.4. MEDIUM OF PAYMENT. All royalties are payable in U.S. dollars.
C.5. PAYMENT OF ROYALTIES. The royalty payment obligation shall accrue upon
distribution, which shall mean delivery of a copy of the Software to a third
party, regardless of whether a sublicense shall have been executed or delivered
and regardless of whether fees or prices are paid by such third party. ODC shall
pay Supplier, within thirty (30) days after the conclusion of each calendar
quarter, the amount of royalties owing to Supplier based on the Revenue Units
distributed by ODC during such calendar quarter.
C.6. TAXES. The royalties and other payments set forth herein are net of, and
ODC shall hold Supplier harmless from any withholding, sales, excise or use tax
or taxes in lieu thereof, customs, local taxes or levies or similar governmental
charges, including any interest and penalties thereon, except for U.S. taxes
based on income earned by Supplier pursuant to this Agreement, which may be
imposed by any governmental authority upon use or sublicensing of the Software
or on this Agreement, except for any ten percent (10%) withholding tax levied on
the payment of NRE, royalties or license fees by the Japanese government ("W/H
Taxes"). If any W/H Taxes are required to be withheld, ODC will pay Supplier an
adjusted amount such that the net amount after withholding of such Taxes will
equal the amount that would have been otherwise payable under this Agreement
less five percent (5%). The sums shown in the Payment Schedule of Schedule D.5
hereof have already been adjusted for W/H Taxes in this manner and shall not be
subject to further adjustment.
C.7. MINIMUM COMMITMENT. In accordance with the Payment Schedule set forth in
Schedule D hereof, ODC shall pay to Supplier [*] For purposes of this Paragraph
C.7, the "first year" shall commence (i) upon first shipment of any model of the
ODC MFF Products; or, (ii) shipment of the first production version of the
Software with any model of the ODC MFF Products, whichever occurs later.
JetFax Company Confidential Page 47
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SOFTWARE LICENSE AGREEMENT
SCHEDULE D: CUSTOM MODIFICATIONS
D.1. LETTER OF INTENT. Pursuant to the terms of a Letter of Intent between the
parties dated April 11, 1996, in anticipation of the execution of this
Agreement, Supplier has been engaged in certain preliminary development and
engineering activities relating to the modification of its JetSuite software
programs to permit them to interoperate with the ODC MFF Products. Said Letter
of Intent is hereby superseded by the terms of this Agreement.
D.2. STATEMENT OF WORK. Supplier shall customize its JetSuite software programs
to perform those functions and provide those features described in Schedule A
which is attached hereto and incorporated herein.
D.3. SCHEDULE. The dates for certain milestones in Supplier's customization
effort set forth in Section D.5 hereto shall be deemed target dates only and
Supplier makes and has made no representation that it will be able to complete
any of the enumerated tasks on its target date. Supplier will use its best
efforts to inform ODC of its progress and the parties intend to work together to
mutually determine modifications to the tasks and target dates should such
modifications become necessary.
D.4. DELIVERY. Deliverable items shall be furnished to ODC as described in
Schedule E.
D.5. COMPENSATION AND PAYMENT SCHEDULE. Supplier acknowledges receipt of the
sum of [*] from ODC in [*] representing the first increment of payment for NRE
effort expended in the customization effort. Further non-refundable payments,
which include compensation for this effort, for the minimum royalty commitment
described in Schedule C hereof, and for the first year annual maintenance fee
described in Schedule F hereof, shall be made as follows:
JetFax Company Confidential Page 48
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Payment Schedule
----------------
Event Amount Estimated Date
[*]
NOTE: The amounts shown are gross amounts prior to applying Japanese
withholding tax of 10%.
* Test criteria for these events are set forth in the ODC
Acceptance Criteria portion of the Specification.
D.6 MEDIUM OF PAYMENT. All payments are payable in U.S. dollars.
D.7 MAINTENANCE SOURCE CODE. The following items constitute the Maintenance
Source Code.
o [*]
o [*]
D.8 ODC-SUPPLIED SOFTWARE. The following items constitute the ODC-Supplied
Software:
o [*]
o [*]
o [*]
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<PAGE>
SOFTWARE LICENSE AGREEMENT
SCHEDULE E: DELIVERY
E.1 DELIVERABLE ITEMS. The following shall be delivered by Supplier to ODC:
(i) Two copies of the Software in object code form;
(ii) One copy of the Maintenance Source Code; and
(iii) Two copies of the Supplier Documentation in machine-readable
form.
E.2 EXPORT CONTROLS. The Software and Documentation may be subject to export
controls under the U.S. Export Administration Regulations and related U.S. laws.
ODC shall (i) comply strictly with all legal requirements established under
these controls; (ii) cooperate fully with Supplier in any audit that relates to
these controls; and (iii) not export, re-export, divert, transfer or disclose,
directly or indirectly ("Export"), the Software or Documentation to any country,
or any national or resident thereof, with the U.S. Government determines from
time to time is a country (or End User) to which such Export is restricted
without obtaining the prior written authorization of Supplier and the applicable
U.S. Government agency.
JetFax Company Confidential Page 50
<PAGE>
SOFTWARE LICENSE AGREEMENT
SCHEDULE F: MAINTENANCE
F.1. MAINTENANCE. For so long as maintenance is paid for under the terms of
this Agreement, Supplier shall: (i) perform Maintenance Modifications, including
the correction of Errors called to Supplier's attention by ODC, as soon as
commercially reasonable, and shall promptly thereafter furnish to ODC such
modifications and corrections, and, (ii) following delivery of the [*] respond
fully and in writing, with reasonable promptness, to questions posed by a
limited number (no more than six) of ODC personnel in engineering and/or
marketing, designated by ODC, regarding design and operation of the Software and
content of the Supplier Documentation.
F.2. COMPENSATION. The annual maintenance fee covering both JetSuite Lite
and Pro versions shall be [*]
F.3. PAYMENT. The maintenance fee shall be prepaid annually. Payment for the
first year of maintenance is included in the sums set forth in the Payment
Schedule of Schedule D.5. Subsequent payments shall be made on the anniversary
date of the actual Production Release date identified in said Payment Schedule
as estimated to take place in [*]
JetFax Company Confidential Page 51
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<PAGE>
SOFTWARE LICENSE AGREEMENT
SCHEDULE G: CONFIDENTIALITY
The "Proprietary Rights and Non-Disclosure Agreement", effective March 25,
1996, between the parties is attached hereto.
JetFax Company Confidential Page 52
<PAGE>
SOFTWARE LICENSE AGREEMENT
SCHEDULE H: TRADEMARK USAGE
H.1 Intellectual Property
H1.1 Trade Name and Trademarks. The trade name and trademarks of Supplier
that may be used by ODC in connection with the Agreement include:
JetFax
JetSuite
JetSuite Lite
JetSuite Pro
H1.2 Logos. The logos of Supplier that may be used by ODC in connection with
this Agreement are represented by artwork shown in Appendix I attached hereto
and incorporated herein.
H.2 Screen Appearance
H2.1 Splash Screen. The "Splash Screen" depicted in Appendix I shall be
displayed momentarily in response to user selection of the JetSuite application.
H.2.2 About Box. The "About Box" depicted in Appendix I shall be displayed
when selected by the user. It shall be located in the introductory screen for
the main MFF application, as well as in connection with the printer drivers.
H3 No Modification. The appearance and placement of any of Supplier's
logos, trademarks, trademark and copyright notices, and the screen and boxes
shown in Appendix I shall not be removed or modified by ODC or its sublicensees
without the prior written consent of Supplier.
JetFax Company Confidential Page 53
<PAGE>
SCHEDULE H
APPENDIX I
[LOGO OF JETFAX]
[COMPUTER SCREEN SHOTS OF JETSUITE]
JetFax Company Confidential Page 54
<PAGE>
SOFTWARE LICENSE AGREEMENT
SCHEDULE I: ODC MFF PRODUCTS
I. The ODC MFF Products include the following:
A. Present Models:
[*]
B. Future Models:
o [*]
o [*]
[*]
II.
[*]
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EXHIBIT 10.33
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REDACTED
[EXECUTION COPY]
SUPPLY AND LICENSE AGREEMENT
This SUPPLY AND LICENSE AGREEMENT ("Agreement") is made as of the 1st day
of November, 1996, by and between Pixel Magic, Inc. ("Supplier"), a
Massachusetts corporation and wholly-owned subsidiary of Oak Technology, Inc.,
having its principal offices at 300 Brickstone Drive, Andover, MA 01810, and fax
number 508-470-8892, and JetFax, Inc. ("Buyer"), a Delaware corporation having
its principal offices at 1376 Willow Road, Menlo Park, California 94025 USA, and
fax number 415-326-6003.
WHEREAS, Supplier is in the business of developing and marketing
compression and image processing chips and technology; and
WHEREAS, Buyer is in the business of developing and marketing fax, multi-
function and other machines and related technology;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings indicated:
1.1 Buyer's Products. [*].
----------------
1.2 Licensed Technology. [*].
-------------------
1.3 Products. The term "Products" shall mean the products set forth on
--------
Schedule 1 hereto with the characteristics and functionality as set forth in the
- ----------
Specifications.
1.4 Purchase Orders. The term "Purchase Orders" shall have the meaning
---------------
assigned to it in Section 2.2.
1.5 Specifications. The term "Specifications" shall mean the engineering,
--------------
operational and/or functional descriptions, details
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
and requirements for the Products as set forth on Schedule 2 hereto.
----------
1.6 Other Definitions; Schedules. Certain other words and phrases are
----------------------------
defined or described elsewhere in this Agreement and/or the Schedules hereto.
Wherever used in this Agreement (a) the words "include" or "including" shall be
construed as incorporating, also, "but not limited to" or "without limitation"
and (b) the word "day" means a calendar day unless otherwise specified. Unless
the context otherwise requires, words in the singular include the plural and
vice versa. All Schedules hereto are hereby incorporated herein and made a part
hereof.
2. PURCHASES; SALES
2.1 Purchases, Sales and Resale. Subject to the provisions of this
---------------------------
Agreement, Supplier agrees to sell and deliver to Buyer and Buyer agrees to
purchase the Products. Supplier agrees to use its best efforts to satisfy
Buyer's requirements for the Products. Subject to Supplier's ability to meet
Buyer's requirements, Buyer agrees to use its best efforts to purchase all of
its requirements for the Products for use in current (as of the date of this
Agreement) Buyer's Products [*] from Supplier. Subject to the terms and
conditions hereof, Supplier hereby grants to Buyer the right to incorporate the
Products into the Buyer's Products and to market, distribute and resell the
Products with such Buyer's Products on a worldwide basis under Buyer's name
and/or other names as Buyer may choose, including through Value Added Reseller
("VAR") and Original Equipment Manufacturer ("OEM") arrangements. Buyer and
Buyer's VAR's and OEM's rights to purchase are non-exclusive, and Supplier shall
have the right to sell Products to other OEMs, VARs, distributors, resellers and
others, alone or with products, in any location worldwide. Buyer shall have no
right to modify the Products or to sell the Products as stand-alone products or
otherwise than as part of the Buyer's Products.
2.2 Purchase Orders. Buyer shall place written orders ("Purchase Orders")
---------------
for units of Products in accordance with the terms and conditions of this
Agreement. Without limitation to the obligation of Supplier to sell to Buyer
hereunder, orders will be effective upon acceptance thereof by delivery of
Supplier's order acknowledgement, such acceptance not to be unreasonably
withheld. Each Purchase Order shall be deemed to incorporate the terms and
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[*] = CONFIDENTIAL TREATMENT REQUESTED
conditions of this Agreement. All Purchase Orders shall be governed exclusively
by the terms and conditions of this Agreement, and any terms or provisions on
Buyer's Purchase Order forms or any Supplier's acknowledgments thereof that are
inconsistent with those contained in this Agreement shall have no force or
effect whatsoever as between the parties hereto. Neither Supplier's
commencement of performance nor delivery shall be deemed or construed as
acceptance of Buyer's additional or different terms and conditions. Purchase
Orders may be sent by facsimile transmission or other electronic media approved
by Buyer and shall specify: (a) that the Purchase Order is being placed under
this Agreement, (b) Buyer's Purchase Order number, (c) product number and
description, (d) ordered quantities, (e) purchase price; (f) tax status,
including exemption certificate number, if applicable, (g) scheduled ship dates,
(h) preferred shipping method, if any, and (i) "bill to" and "ship to"
addresses.
2.3 Lead Times. Scheduled delivery dates in Buyer's Purchase Orders for
----------
Products purchased hereunder shall be no sooner than ninety (90) days after the
date of issuance of a Purchase Order therefor; provided, however, that Supplier
shall use commercially reasonable efforts to meet shorter lead times (earlier
delivery dates) if requested in writing by Buyer.
2.4 Cancellation; Rescheduling. Buyer may cancel or reschedule all or a
--------------------------
portion of the Products to be purchased under any Purchase Order at no charge
(and with no penalty) by giving notice of such cancellation or rescheduling to
Supplier in accordance with the following schedules:
Cancellations:
Interval Between Percentage
Notice Date of Purchase Order
and Scheduled Quantity that May
Shipment Date Be Cancelled
----------------- -----------------
[*] [*]
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[*] = CONFIDENTIAL TREATMENT REQUESTED
Reschedulings:
Interval Between Percentage
Notice Date of Purchase Order
and Scheduled Quantity that May
Shipment Date Be Rescheduled
----------------- -----------------
[*] [*]
Products to be purchased under any particular Purchase Order may be
rescheduled as provided herein only once. Such rescheduled orders may not be
cancelled as provided hereunder.
2.5 Future Buyer's Products. Subject to the condition that the Products
-----------------------
sold pursuant to this Agreement meet the Specifications, and function in
accordance therewith, Buyer agrees to use reasonable efforts, consistent with
prudent commercial practices, to incorporate the Products into future Buyer's
Products [*] requiring components with functionality substantially similar to
that of the Products. Buyer shall give Supplier reasonable opportunity to
demonstrate the competitiveness of the Products and the feasibility of
incorporating the Products into any such future Buyer's Products requiring such
components.
2.6 Direct Sales to VAR and OEM Customers. Supplier agrees to negotiate
-------------------------------------
in good faith with Buyer's current and future VAR and OEM customers a supply
agreement or agreements for the sale and purchase of units of the Products for
use and resale in Buyer's Products. Supplier agrees to offer such VAR and OEM
customers terms no less favorable to such VAR and OEM customers than those
provided to Buyer in this Agreement, except with respect to Product price. All
sales to such VAR and OEM customers shall be at per unit prices as set by
Supplier and such VAR and OEM customers, provided that such per unit prices
shall be no less than [*]. All sales and deliveries pursuant to this Section
2.6 shall be made directly to Buyer's VAR and OEM customers. Upon Supplier's
request, Buyer shall provide Supplier with a list of Buyer's then current VAR
and OEM customers. Buyer shall not in any way be responsible or liable for the
performance or any nonperformance of
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<PAGE>
Supplier or Buyer's VAR or OEM customers pursuant to this Section 2.6 or
otherwise.
3. DELIVERY
3.1 Delivery Terms. Supplier shall pack the Products for shipment and
--------------
shall externally label each package to indicate the description and quantity
contained therein. Risk of loss of the Products shall pass from Supplier to
Buyer upon delivery of the Products to Buyer, which shall be F.O.B. Sunnyvale,
CA, U.S.A. (F.O.B. meaning F.O.B. according to "Incoterms" as last published by
the International Chamber of Commerce). Supplier will ship in accordance with
Buyer's shipping instructions. In the absence of specific instructions or if
Supplier, in its reasonable discretion, deems Buyer's instructions unsuitable,
Supplier reserves the right to ship by the most appropriate method. Buyer shall
be responsible for all freight, handling, insurance and other transportation
charges from the F.O.B. point. All insurance for the Products shall name
Supplier as a beneficiary to the extent that Supplier retains an interest in the
Products. Without prejudice, Supplier waives in favor of Buyer its rights to
claims for any damage to the Products shipped; Buyer shall make all claims for
any damage directly to the freight or insurance carrier.
3.2 Delivery Delays. Supplier shall use best efforts to deliver Products
---------------
to Buyer on or prior to the scheduled delivery date specified on accepted
Purchase Orders. In the event that Supplier is unable to deliver any Products
within thirty (30) days of the scheduled delivery date, without limitation to
any other rights or remedy Buyer may have under law or this Agreement, Buyer
shall have the right to cancel that portion of the Purchase Order relating to
the delayed Products at no charge (and with no penalty) upon written notice to
Supplier. In the event that Buyer does not exercise its cancellation rights
with respect to any Products pursuant to this Section 3.2, Supplier shall
deliver such to Buyer and Buyer shall be obligated to purchase such products on
the terms specified in this Agreement.
3.3 Acceptance by Buyer. Buyer shall have 10 business days following
-------------------
receipt of the Products in which to notify Supplier of any discrepancies as to
number, type and condition of Products with respect thereto. Supplier will
promptly correct such discrepancies after being so notified.
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<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
4. PRICE; PAYMENT
4.1 Prices. The prices per unit at which Buyer may purchase Products are
------
as set forth on Schedule 1 hereto. All prices are in United States Dollars.
----------
The prices in Schedule 1 may be revised at any time upon written agreement by
----------
Supplier and Buyer, and each of Supplier and Buyer agree to negotiate in good
faith regarding requests for such revisions. [*].
4.2 Taxes. All United States federal and state taxes based upon Buyer's
-----
use, sale, license or possession of the Products, other than income or franchise
taxes payable by Supplier, will be borne and paid by Buyer. Supplier agrees to
furnish any documents to taxing authorities if requested to do so by Buyer.
4.3 Payment. Buyer shall pay Supplier for all Products purchased
-------
hereunder, in full, within thirty (30) days of the receipt of such Products by
Buyer. All payments due hereunder shall be made by Buyer in United States
Dollars in the form, at the option of Buyer, of cash, check, wire transfer or
such other means as may be agreed upon between the parties. Past due balances
shall be subject to an interest charge of [*] per month computed from the
payment due date, or the maximum rate legally permitted, whichever is less.
4.4 Buyer To Determine Its Own Resale Prices. Without limitation to the
----------------------------------------
provisions of the last sentence of Section 2.1, Buyer is free to determine its
own prices for Buyer's Products (and the Products incorporated therein).
5. FORECASTS; ORDER SIZE
5.1 Purchasing Forecasts. Buyer shall provide Supplier with non-binding
--------------------
six (6) month rolling forecasts of Buyer's purchases of Products thirty (30)
days in advance of such six (6) month period updated on a monthly basis. Buyer
shall include in such forecasts any purchases by Buyer's VAR and OEM customers
that are purchasing Products from Buyer, but need not include any purchases by
Buyer's VAR and OEM customers that are purchasing Products directly from
Supplier pursuant to Section 2.6 of this Agreement.
5.2 Minimum Order Size. Buyer's orders for the Products must be for
------------------
quantities of not less than [*] for any single shipment.
-6-
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[*] = CONFIDENTIAL TREATMENT REQUESTED
5.3 Supplier Report. Upon Buyer's request, Supplier shall provide Buyer
---------------
with periodic reports of all orders for Products placed by Buyer's VAR and OEM
customers that are purchasing Products directly from Supplier pursuant to the
provisions of Section 2.6 of this Agreement.
6. WARRANTY
6.1 Warranty. Supplier warrants to Buyer that all Products sold pursuant
--------
to this Agreement shall substantially conform to the Specifications, shall
function in accordance therewith and shall be free from defects in materials and
workmanship for a period of [*]from and after the date of delivery to Buyer.
6.2 Epidemic Warranty. In addition to the provisions of Section 6.1,
-----------------
Supplier warrants for the benefit of Buyer, and covenants, that Supplier will
replace (pursuant to the terms of Section 6.3), at Supplier's expense, Defective
Products (as defined below) for a period of [*] following delivery thereof to
Buyer. "Defective Products" shall be defined as limited to Products that fail to
substantially conform to the Specifications, or function properly or in
accordance therewith, provided that such failure, or any combination of such
failures, occurs in more than [*] of such Products in any lot or batch delivered
to Buyer.
6.3 Remedy. Subject to the limitations set forth in this Section 6, upon
------
discovery of any defect in material or workmanship or failure of any Products to
substantially conform to the Specifications, or function in accordance
therewith, pursuant to this Section 6, Buyer shall promptly contact Supplier,
and Supplier shall promptly repair or replace such Products at Supplier's
expense or credit Buyer's account with an amount equal to the price paid for
such Products. Supplier shall be responsible for all freight and insurance
charges associated with any such replacement. If Supplier's inspection discloses
that the returned Products are not defective within the terms of the warranty
provided by this Section 6, then Buyer shall pay such freight and insurance
charges associated with such replacement. Supplier shall not be liable under
any warranty set forth in this Section 6 with respect to any Products that fail
to substantially conform to the Specifications or function properly or in
accordance therewith if, and to the extent, such failure would have been avoided
but for misuse, neglect, alteration, repair, improper installation or improper
-7-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
testing of the Products by Buyer. Supplier shall not be liable hereunder for
any labor or other costs incurred by Buyer related to the removal of any Product
permanently affixed to any printed circuit board.
6.4 DISCLAIMER OF OTHER WARRANTIES. THE WARRANTY SET FORTH IN THIS
------------------------------
SECTION 6 IS THE ONLY WARRANTY, EXPRESS OR IMPLIED, THAT SUPPLIER MAKES WITH
RESPECT TO THE PRODUCTS. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 6, ALL
WARRANTIES, WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR
WRITTEN STATEMENTS BY SUPPLIER OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OF
UNINTERRUPTED USE OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OTHER THAN AS SET
FORTH IN SECTION 9) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED.
7. LICENSES; SUPPORT
7.1 License of Resolution Enhancement Technology. Supplier grants a
--------------------------------------------
fully-paid, perpetual, and non-exclusive license, with right to sublicense, to
Buyer to use Supplier's Resolution Enhancement Technology as described in
Schedule 3 hereto (the "RET"), with the right to use, modify, incorporate in
- ----------
other products, and distribute the RET with the following restriction: Buyer,
and Buyer's sublicensees, shall use the RET only in connection with Buyer's
Products that contain Products. In the event that Buyer wish to use the RET in
Buyer's Products that do not contain Products, Buyer and Supplier agree to
negotiate in good faith a license agreement for such use of the RET.
7.2 License of JBIG Software. Supplier grants a fully-paid, perpetual and
------------------------
non-exclusive license, with right to sublicense, to Buyer to use the source code
and object code of Supplier's JBIG software as described in Schedule 4 hereto
----------
(the "JBIG"), with the right to use, modify, incorporate in other products, and
distribute the JBIG (such right to sublicense and distribute to apply to the
object code form only except as set forth below) with the following restriction:
Buyer, and Buyer's sublicensees, shall not distribute the JBIG as a stand-alone
product or otherwise than as part of Buyer's Products that contain significant
additional functionality. Supplier shall deliver to Buyer the JBIG source code
and object code immediately upon execution of this Agreement. Buyer agrees to
pay to Supplier the amount of [*], as a one-time license fee for
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the JBIG, upon delivery of the JBIG source code and object code. Buyer may
sublicense and distribute source code of the JBIG, for maintenance purposes
only, as required pursuant to the terms of any source code escrow agreements to
which Buyer is, or may become, a party. Buyer shall provide Supplier with notice
of any such sublicense and distribution.
7.3 Integration Support Provided by Supplier. Supplier shall provide all
----------------------------------------
reasonable assistance to Buyer in support of Buyer's efforts to modify Buyer's
product designs and software to facilitate and expedite Buyer's use of the
Products in Buyer's Products. In addition, Supplier shall provide all
reasonable assistance to Buyer in support of Buyer's integration of the Licensed
Technology into Buyer's Products. In the event that Buyer requests that
Supplier's engineers travel to provide such support, Buyer shall bear the
reasonable direct costs associated with such travel, including
transportation,lodging and meal expenses. Supplier shall have no obligation
under this Section to provide any support to Buyer's OEMs and VARs or to any
distributors or end users of Buyer's Products.
7.4 Enhancements.
------------
(a) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, the definition of RET shall include any and all improvements,
bug fixes, patches, corrections, updates, modifications, additions and new
releases to and of the algorithms described in Schedule 3 which Supplier
----------
generally makes available to its other licensees (any and all of the foregoing,
the "RET Enhancements") developed or obtained by Supplier prior to the
expiration of this Agreement, and Supplier shall promptly deliver all such RET
Enhancements to Buyer as they become available. In the event that such RET
Enhancements are obtained by Supplier from a third party source, Supplier will
ensure that Buyer shall have the right to use such RET Enhancements, subject
only to the same fees or per unit royalties as apply to Supplier with respect
thereto.
(b) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, the definition of JBIG shall include any and all improvements,
bug fixes, patches, corrections, updates, modifications, additions and new
releases to and of any implementation of JBIG as defined in the "International
Standards" in connection therewith which Supplier generally makes available to
its other licensees (any and all of the foregoing, the "JBIG Enhancements")
developed or obtained by Supplier prior to the
-9-
<PAGE>
expiration of this Agreement, and Supplier shall promptly deliver all such JBIG
Enhancements to Buyer (in object code and source code form) as they become
available. In the event that such JBIG Enhancements are obtained by Supplier
from a third party source, Supplier will ensure that Buyer shall have the right
to use such JBIG Enhancements, subject only to the same fees or per unit
royalties as apply to Supplier with respect thereto.
8. PROPRIETARY RIGHTS
8.1 Subject to the terms of this Agreement and the rights granted herein,
Supplier retains all copyright, patent, trade secret, trademark rights and other
intellectual property rights in and to the Products and the Licensed Technology.
Buyer retains all copyright, patent, trade secret, trademark rights and other
intellectual property rights in and to any products designed and sold by Buyer,
including any modifications made by or for Buyer (other than by Supplier
pursuant to Section 7 hereof) pursuant to the rights granted in Section 7.
Nothing in this Agreement is intended to create ownership by Buyer in the
intellectual property rights of Supplier, nor of Supplier in the intellectual
property rights of Buyer.
8.2 Each of Supplier and Buyer shall keep confidential and not disclose to
any third party or use for its own benefit or for the benefit of any third
party, except as expressly permitted herein, any information provided to it by
the other (a) that is marked with a proprietary, confidential or other similar
notice, (b) if not so marked, that is reasonably understood by recipient to be
confidential (including all source code) or (c) that is orally disclosed to it
by the other and followed by a writing within thirty (30) days of such oral
disclosure indicating said information was confidential (collectively,
"Confidential Information"). The term "Confidential Information" shall not
include information that (i) is or becomes generally known or available through
no act or failure to act by recipient; (ii) is already known by recipient at the
time of receipt as evidenced by its written records; (iii) is hereafter
furnished to recipient by a third party, as a matter of right and without
restriction on disclosure; (iv) is disclosed by recipient with written
permission of the other party hereto or (v) is required to be disclosed by court
order or law. A party receiving Confidential Information shall take the same
measures to prevent unauthorized disclosure and maintain the confidentiality of
such Confidential Information as it takes with respect to its own confidential
information of similar importance, but shall in no event take less than
reasonable
-10-
<PAGE>
measures. A party receiving Confidential Information shall limit dissemination
of and access to any Confidential Information to those personnel of the
receiving party who have a good faith need for such dissemination or access to
effectuate the purposes of this Agreement.
8.3 Each of Supplier and Buyer acknowledge that it will be impossible to
measure in money the damages that would be suffered in the event of a material
breach of the obligations imposed on them by this Section 8 and that in the
event of any such material breach an aggrieved party will be irreparably damaged
and will not have an adequate remedy at law. Any such party shall, therefore,
be entitled to injunctive relief and/or specific performance to enforce such
obligations, and if any action should be brought in equity to enforce any of the
provisions of this Section 8, none of the parties hereto shall raise the defense
that there is an adequate remedy at law.
9. INDEMNITY
9.1 Indemnity. Supplier agrees, at Supplier's sole expense, to indemnify,
---------
defend and hold Buyer harmless from and against any claim, suit or proceeding
alleging that any of the Products or the JBIG, or any components or parts
thereof, including the JBIG compression and decompression techniques, infringes
any patent right, trademark right, copyright, mask work right, trade secret or
other intellectual property right of any third party. Buyer shall (a) give
Supplier prompt notice of any such claim, suit or proceeding, (b) permit
Supplier, through counsel of its choice, to answer the charge of infringement
and defend or settle such claim, suit or proceeding and (c) provide Supplier
with reasonable cooperation and assistance as Supplier may request in the
defense of such claim, suit or proceeding.
9.2 Limitation. Supplier shall have no liability under this Section 9 for
----------
any claim of infringement if, and to the extent, such infringement arises out of
(a) any modification to the Products or the JBIG by Buyer, if such infringement
would have been avoided by the use of the Products or the JBIG without such
modification or (b) any combination of the Products or the JBIG with hardware or
software not supplied by Supplier, if such infringement would have been avoided
by the use of the Products or the JBIG without such combination.
9.3 Remediation. In the event that any of the Products or the JBIG, or
-----------
any components or parts thereof, including the JBIG
-11-
<PAGE>
compression and decompression techniques, becomes the subject of a claim, suit
or proceeding alleging infringement of any intellectual property rights of any
third party, without limitation to its obligations under Section 9.1, Supplier
may, at its option and expense: (a) procure for Buyer and its customers the
right to use such Products or the JBIG (with any royalties or other payments
required to obtain such rights to be born by Supplier) or (b) replace or modify
such Products or the JBIG so as to be non-infringing (provided that such
replacement or modified Products or the JBIG are functionally and commercially
equivalent).
9.4 Exclusive Remedy. This Section 9 sets forth the sole obligations of
----------------
Supplier and the exclusive remedies of Buyer under this Agreement for any
alleged infringement by the Products or the JBIG of the intellectual property
rights of any third party.
10. TERM; TERMINATION
10.1 Term; Renewal. The term of this Agreement shall commence upon the
-------------
date first written above and shall continue, unless terminated in accordance
with the terms hereof, until December 31, 2000, after which this Agreement shall
be renewable by written agreement of the parties. Except as expressly set
forth, this Agreement may not be terminated by either party hereto except in
accordance with this Section 10.
10.2 Termination For Cause; Bankruptcy.
---------------------------------
(a) Either party hereto may terminate this Agreement for any material
breach of this Agreement by the other party hereto upon 30 days written notice
to the breaching party. Such notice shall identify with particularity the
alleged breach. If the breaching party shall not cure the breach within such
30-day period, this Agreement shall automatically terminate.
(b) Either party hereto may terminate this Agreement upon written
notice to the other party hereto in the event a petition for relief under any
bankruptcy law or legislation is filed by or against such other party, or such
other party makes an assignment for the benefit of creditors or a receiver is
appointed for all or a substantial portion of such other party's assets, and
such petition, assignment or appointment is not dismissed or vacated within
thirty (30) days.
10.3 Rights upon Termination or Expiration. Notwithstanding any
-------------------------------------
termination or expiration of this Agreement for any reason
-12-
<PAGE>
whatsoever, Buyer shall have the continuing right to market, distribute and
resell units of the Products until Buyer's inventory is exhausted. The terms and
conditions of this Agreement shall apply to such marketing and distribution as
though this Agreement were still in force. Upon expiration of this Agreement or
in the event this Agreement is terminated by Buyer for any breach by Supplier,
Supplier shall fulfill all Purchase Orders received by Supplier from Buyer prior
to such expiration or termination and Buyer shall pay for all Products delivered
thereunder, notwithstanding such expiration or termination. The terms and
conditions of this Agreement shall apply to such Purchase Orders and the
Products purchased thereby as though this Agreement were still in force.
10.4 Survival. Sections 6, 7.1, 7.2, 8, 9 and the relevant provisions of
--------
Section 12 shall survive the expiration or any termination of this Agreement for
any reason whatsoever.
11. NOTICES
All notices required hereunder shall be in writing and shall be given by
personal delivery, by recognized overnight courier service, by confirmed
facsimile or by mail (certified or registered, postage prepaid, return receipt
requested) to the parties at their respective addresses as set forth below, or
to any party hereto at such other addresses as shall be specified in writing by
such party to the other parties in accordance with the terms and conditions of
this Section 11. All notices shall be deemed effective upon personal delivery
or sending of confirmed facsimile, or five (5) days following deposit in the
mail in accordance with this Section 11, or one (1) business day following
deposit with any recognized overnight courier service in accordance with this
Section 11.
For notice to Supplier:
Pixel Magic, Inc.
300 Brickstone Drive
Andover, MA 01810
Fax number 508-470-8892
Attention: Don Shulsinger
With a copy to:
Oak Technology, Inc.
139 Kifer Court
-13-
<PAGE>
Sunnyvale, CA 94086
Fax number 408-737-3838
Attention: General Counsel
For notice to Buyer:
JetFax, Inc.
1376 Willow Road
Menlo Park, California 94025
Fax number 415-326-6003
Attention: President
12. MISCELLANEOUS
12.1 Entire Agreement. This Agreement constitutes the entire understanding
----------------
and agreement between the parties hereto and supersedes any and all prior or
contemporaneous representations, understandings and agreements between the
parties with respect to the subject matter hereof, including the Letter of
Understanding (the "LOU") dated September 22, 1995, and the Non-Disclosure
Agreement (the "NDA") dated August 24, 1995, and such LOU and NDA shall herewith
terminate and be of no further force or effect.
12.2 Amendments. All amendments or modifications of this Agreement shall
----------
be binding upon the parties despite any lack of consideration so long as the
same shall be in writing and executed by both parties hereto.
12.3 Assignment; Successors. No party hereto may assign this Agreement
----------------------
without the prior written consent of the other party; provided, however, that
either party may, without the other party's consent, assign this Agreement and
its rights and obligations hereunder to any successor in interest to it in
connection with any sale or transfer of all or substantially all of its assets
or upon any merger, consolidation or dissolution. This Agreement shall be
binding upon and inure to the benefit of each of the parties hereto and their
respective legal successors and permitted assigns. In the event that Supplier
files for protection from creditors under bankruptcy laws, this Agreement shall
automatically be assigned to Supplier's parent, Oak Technology, Inc.
12.4 Performance. Certain of Supplier's obligations hereunder may be
-----------
performed by Supplier's parent corporation, Oak Technology, Inc., or by its
affiliates, provided that, notwithstanding the foregoing, Supplier shall remain
fully liable at all times for the performance of all of its obligations under
this Agreement.
-14-
<PAGE>
12.5 Independent Parties. Nothing contained herein shall be deemed to
-------------------
create or construed as creating a joint venture, partnership or agency
relationship between Supplier and Buyer.
12.6 Waiver. No waiver of any provision of this Agreement shall be
------
effective, except pursuant to a written instrument signed by the party or
parties hereto waiving compliance, and any such waiver shall be effective only
in the specific instance and for the specific purpose stated in such writing.
12.7 Severability of Provisions. In the event that any provision hereof is
--------------------------
found invalid or unenforceable pursuant to judicial decree or decision, the
remainder of this Agreement shall remain valid and enforceable according to its
terms.
12.8 Choice of Law. This Agreement shall be governed by the laws of the
-------------
State of California, irrespective of its choice of law rules.
12.9 Arbitration and Fees. All disputes, controversies or differences
--------------------
arising from or in relation to or in connection with this Agreement, including
issues relating to the interpretation, performance or breach of this Agreement,
shall be settled by mutual consultation between the parties hereto in good faith
as promptly as possible, but failing an amicable settlement shall be decided by
binding arbitration before an arbitrator affiliated with the Judicial
Arbitration and Mediation Service. The arbitrator shall render a final opinion
and award in writing, stating the reasons therefor, and the award shall be final
and binding upon the parties hereto and judgment may be entered thereon in a
court of appropriate jurisdiction. The prevailing party in such an arbitration
shall be entitled to recover all costs associated with the arbitration,
including its share of the arbitration fees. In the event that any action is
brought to interpret or enforce the terms of this Agreement, the prevailing
party shall be entitled to recover its expenses and costs, including reasonable
attorneys' fees.
12.10 Headings. The headings and titles used in this Agreement are for
--------
convenience only and are not to be considered in construing or interpreting this
Agreement.
12.11 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
-15-
<PAGE>
12.12 FOREIGN RESHIPMENT LIABILITY. THIS AGREEMENT IS EXPRESSLY MADE
----------------------------
SUBJECT TO ANY LAWS, REGULATIONS, ORDERS OR OTHER RESTRICTIONS ON THE EXPORT
FROM THE UNITED STATES OF AMERICA OF ANY LICENSED TECHNOLOGY, PRODUCTS
INCORPORATING LICENSED TECHNOLOGY OR OF INFORMATION ABOUT ANY LICENSED
TECHNOLOGY OR SUCH PRODUCTS THAT MAY BE IMPOSED FROM TIME TO TIME BY THE
GOVERNMENT OF THE UNITED STATES OF AMERICA. NOTWITHSTANDING ANYTHING CONTAINED
IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL EXPORT OR REEXPORT,
DIRECTLY OR INDIRECTLY, ANY LICENSED TECHNOLOGY, PRODUCTS INCORPORATING LICENSED
TECHNOLOGY OR OF INFORMATION PERTAINING THERETO TO ANY COUNTRY FOR WHICH SUCH
GOVERNMENT TO ANY AGENCY THEREOF REQUIRES AN EXPORT LICENSE OR OTHER
GOVERNMENTAL APPROVAL AT THE TIME OF EXPORT OR REEXPORT WITHOUT FIRST OBTAINING
SUCH LICENSE OR APPROVAL.
12.13 Force Majeure. Neither party shall be responsible or liable to
-------------
the other party for nonperformance or delay in performance of any terms or
conditions of this Agreement due to acts of God, acts of governments, wars,
riots, or other causes beyond the reasonable control of the nonperforming or
delayed party, provided, however, that nonperformance or delay in excess of one
hundred eighty (180) days shall constitute cause for termination of this
Agreement by the party not failing to perform pursuant to Section 10.2 above.
12.14 Intellectual Property Notices. Buyer shall not remove any of
-----------------------------
Supplier's copyright notices or proprietary legends applied to the Products or
the Licensed Technology.
12.15 NO CONSEQUENTIAL DAMAGES. EXCEPT WITH RESPECT TO A PARTY'S
------------------------
BREACH OF SECTION 8.2, IN NO EVENT SHALL EITHER SUPPLIER OR BUYER BE LIABLE TO
THE OTHER FOR ANY CONSEQUENTIAL, INDIRECT, PUNITIVE, SPECIAL OR INCIDENTAL
DAMAGES, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS OF SUCH PARTY OR
ITS CUSTOMERS (INCLUDING, BUT NOT LIMITED TO, CLAIMS FOR LOSS OF GOOD WILL,
PROFITS, INVESTMENTS, USE OF MONEY OR USE OF PRODUCTS, INTERRUPTION IN USE,
STOPPAGE OF OTHER WORK OR IMPAIRMENT OF OTHER ASSETS, OR LABOR CLAIMS), ARISING
OUT OF BREACH OF EXPRESSED OR IMPLIED WARRANTY, BREACH OF CONTRACT,
MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE.
-16-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first set forth above.
PIXEL MAGIC, INC. JETFAX, INC.
By: /s/ Don Shulsinger By: /s/ Edward R. Prince III
-------------------- ------------------------
Name: DON SHULSINGER Name: EDWARD R. PRINCE
Title: EXEC VP Title: PRESIDENT
-17-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
Schedule 1
----------
Products Price per unit
- -------- --------------
[*] [*]
-18-
<PAGE>
Schedule 2
----------
Specifications
- --------------
-19-
<PAGE>
Information May Change Without Notice - Subject to Non-Disclosure
Agreement - Copying Prohibited PM-2mc
- --------------------------------------------------------------------------------
PIXEL MAGIC HARDWARE SPECIFICATION
INCORPORATED
PM-2MC HIGH SPEED HIGH INTEGRATION IMAGE PROCESSOR
GENERAL DESCRIPTION FEATURES
Pages 1-64, which comprise schedule 2 are redacted.
[*]
[*]= Confidential Treatment Requested
- --------------------------------------------------------------------------------
Copyright (C) 1993, 1994, 1995, 1996 Pixel Magic Inc. All Rights Reserved
Confidential Information 1
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
Schedule 3
----------
Description of Resolution Enhancement Technology
- ------------------------------------------------
[*]
[*]
[*]
-20-
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
Schedule 4
----------
Description of JBIG Software
- ----------------------------
[*]
-21-
<PAGE>
EXHIBIT 10.34
REDACTED
CONFIDENTIAL TREATMENT REQUESTED = [*]
FACSIMILE PRODUCT DEVELOPMENT AGREEMENT
BY AND BETWEEN
JETFAX, INC. AND XEROX CORPORATION
This Facsimile Product Development Agreement (the "Agreement") is entered into
and is effective as of June 9, 1994 (the "Effective Date"), by and between
JetFax, Inc., a Delaware Corporation having its principal place of business at
1376 Willow Road, Menlo Park, California 94025 ("JetFax"), and Xerox
Corporation, a New York corporation having its principal place of business at
800 Long Ridge Road, Stamford, Connecticut 06904-1600 ('Xerox").
WHEREAS, JetFax desires, upon the terms and conditions set forth in this
Agreement, to perform certain Services and provide certain Hardware Designs,
Mechanical Designs, Bill of Materials and Source List and Software (as
hereinafter defined) for purposes of enabling the integration of that certain
Xerox printer product known by the name "Personal Printer 4004" (as hereinafter
defined, the "Printer Mechanism") into the Product (as, hereinafter defined);
and
WHEREAS, Xerox desires to perform certain Services and manufacture the Product
for itself and the JetFax Product (as hereinafter defined) as more fully set
forth herein; and
WHEREAS, JetFax wishes to purchase the JetFax Product and certain replacement
thermal ink jet printing cartridges from Xerox;
NOW, THEREFORE, it is agreed by and between the parties as follows:
1 DEFINITIONS
1.1 "Bill of Materials and Source List" shall mean the identification by
manufacturer and model of certain components and subsystems (such as, by way of
example and not limitation, a modem, an integrated circuit, or a scanner) and
the source from which such materials compliant with the Specifications may be
obtained.
1.2 "Documentation" shall mean the customer and service documentation specified
in Exhibit E.
1.3 "Errors" shall mean: (i) reproducible defects in any Deliverable which
causes it not to function in conformance with the Specifications, (ii) Software
miscoding which results in the Software failing to function in conformance with
the Specifications, if such failure is reproducible, and (iii) defects in the
Documentation which render it inaccurate, erroneous or otherwise unreliable.
1.4 "Hardware Designs" shall mean [*].
1.5 "JetFax Cartridge" shall mean that [*].
1.6 "JetFax Deliverables" shall mean, collectively or individually, JetFax
developed Software, Hardware Designs, Mechanical Designs and Bill of Materials
and Source List. A more detailed description of the JetFax Deliverables and the
requirements for same are set forth in Exhibit A to this Agreement.
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
1.7 "Mechanical Designs" shall mean those [*].
1.8 "Printer Mechanism" shall mean [*].
1.9 "Product" shall mean the facsimile transceiver device ' based upon the
Printer Mechanism and the JetFax Deliverables, as more fully described in
Exhibit C to this Agreement.
1.10 "Product Acceptance" shall mean the date of acceptance of the Product
pursuant to Section 4.2(c) hereof.
1.11 "Project Schedule" shall mean the schedule of events and coordinate time
for the parties' performance under this Agreement, as set forth in Exhibit D.
1.12 "Prototype Units" shall mean initial working development units of the
Product as specified on Exhibit C. The parties acknowledge that Prototype Units
are intended to but may not fully comply with the applicable Specifications.
1.13 "Services" shall mean the work and labor necessary for the performance of
the respective obligations of the parties to this Agreement.
1.14 "Software" shall mean [*]
1.15 "Specifications" shall mean the mechanical, engineering, operational
and/or functional descriptions, details and requirements for the Product and the
Software, Hardware Designs, Printer Mechanism, JetFax Cartridge and externally
procured components (such as required modems, scanners, etc.) as set forth in
Exhibits A, B and C as the same may be modified as provided herein. Included
are any standards for performance or operation of the item to which such
Specifications pertain.
1.16 "User Interface" shall mean [*].
1.17 "Xerox Affiliates" shall mean Xerox Canada, Inc., Rank Xerox Ltd.,
Fuji Xerox Ltd., and any subsidiary or affiliate at least 40% of the ownership
of which is held directly or indirectly by Xerox, Xerox Canada Inc., Rank Xerox
Ltd., or Fuji Xerox Ltd.
1.18 "Xerox Deliverables" shall mean units of the Printer Mechanism; units
of the JetFax Cartridge; overall industrial designs of the Product; design of
the control panel and User Interface and a fully functional pre-feed roller
attachment for the automatic document feeder (ADF); and the customer and service
Documentation; all in accordance with the Specifications and as more fully set
forth in Exhibit B to this Agreement.
1.19 "Fax Boards" shall mean any circuit board assemblies which are
designed by or for JetFax for use in the JetFax Product or any Derivative
Product, which such Fax Boards shall be made by or for Xerox.
2. SCOPE OF WORK
2.1 Services. Upon the terms and conditions set forth in this Agreement,
--------
JetFax and Xerox agree to perform the Services in accordance with Exhibits A and
B, respectively. Each party will be responsible for obtaining all the
technology, labor, material, tooling and facilities necessary for the completion
of its portion of the Services, except as otherwise set forth in this Agreement.
2.2 Progress Reports. Each party hereto shall provide the other party with
----------------
progress reports, as reasonably requested by the other party, starting after the
Effective Date and ending on the date of Product Acceptance. Each report shall
be in such form and contain such information as may be mutually agreed by the
parties, including but
<PAGE>
not limited to, progress to current scheduled milestones, description of any
problems in meeting milestone, and if problems, proposed recovery methods, and
changes in party's estimate of key purchased component and JetFax Product
differentiation costs.
2.3 Agency Approvals. The parties agree that JetFax shall be responsible
----------------
for any and all engineering and development work with respect to the JetFax
Deliverables
3
<PAGE>
necessary for obtaining any required governmental or necessary private
agency approvals or certifications for the Product (such as, by way of example
and not limitation, Underwriter's Laboratories, CSA, U.S. F.C.C. regulations
parts 15 and 68) in the United States and Canada. The actual costs (including
protesting consultant fees and expenses and testing costs and expenses) and
filing fees for the submission for such approvals in the United States and
Canada and such other jurisdictions as the parties mutually agree in writing
they shall enter are to be borne by Xerox. In addition to the foregoing,
for the period ending on the date that is 24 months from the Effective Date,
JetFax agrees to use its reasonable efforts to design the JetFax Deliverables to
meet the agency approval requirements of other jurisdictions. JetFax further
agrees to use its reasonable efforts to provide design services with respect to
the JetFax Deliverables, after such 24 month period, if necessary in conjunction
with any changes required by jurisdictions in which agency approvals have been
obtained during such 24 month period. In order for JetFax to perform its
reasonable efforts obligations hereunder, Xerox shall provide JetFax with
customary English language summaries of the specifications of each individual
jurisdiction's requirements where agency approval is to be sought. Xerox shall
provide all reasonable assistance to JetFax for obtaining approvals and
certifications for the JetFax Product, including use by JetFax of any relevant
testing, test results, documents, applications and approvals and certificates
with regard to the Product. Xerox shall bear the cost of any JetFax travel,
lodging and related expenses incurred in support of approval activities in
connection with the Product. Except as set forth above, all costs for agency
approvals for other jurisdictions shall be borne fully by the party seeking such
approvals, unless otherwise mutually agreed. It is further agreed that after
such 24 month period, JetFax agrees to provide such design services as may be
requested by Xerox to meet the requirements of any jurisdiction. Xerox agrees
to compensate JetFax at customary rates for such design services rendered after
the end of such 24 month period.
2.4 Bill of Materials and Source List Approval. The Bill of Materials and
------------------------------------------
Source List shall be subject to review and approval by Xerox, and all component
vendors providing materials set forth on the Bill of Materials shall be subject
to qualification as a vendor to Xerox under Xerox standards for vendor
certification then in effect. Such approval shall not be unreasonably withheld.
Subject to the terms of Section 5.1 (d), Xerox reserves the right to make final
selection of component vendors. Notwithstanding anything to the contrary
contained herein, neither such Xerox approval nor such vendor qualification
shall be a basis for any rejection pursuant to Section 4.2(a) or Section 4.3, or
condition precedent to, or a basis for any delay in, Product Acceptance
hereunder.
2.5 Software, Etc. Escrow. Promptly after the Effective Date, JetFax
----------------------
shall place with an independent third party escrow agent acceptable to Xerox one
complete set, under seal, of source code, object code and supporting
documentation for any and all Software, ASICS, FPGAS, and any other programmable
devices (including their schematic capture and VHDL files, their ACTEL files,
test patterns and test parameters and timing diagrams, to the extent available
to JetFax, used to confirm the design) included in the JetFax Deliverables (the
"Escrowed Materials"). The Escrowed Materials shall be retained in strict
confidence by the chosen escrow agent under the terms of the escrow agreement
(which escrow agreement shall be mutually acceptable to both JetFax and Xerox
and consistent
4
<PAGE>
with the terms of this Section 2-5) and the escrow agent shall not disclose the
Escrowed Materials to Xerox except pursuant to this Section 2.5. All costs
associated with the escrow, including any fees of the escrow agent, shall be
borne by Xerox. In the event one of the events set forth below occurs, Xerox
may, at its option, notify the escrow agent of such event and request the
release of the Escrowed Materials to Xerox. Xerox shall simultaneously notify
JetFax pursuant to Section 14.1 1 of this Agreement of such notification to the
escrow agent, specifying the basis upon which such request for the release of
the Escrowed Materials is based. In addition, the escrow agent shall notify
JetFax of the Xerox request for the release of the Escrowed Materials. The
escrow agent shall, only after ten (1 0) calendar days have passed from the date
Xerox' notice to JetFax hereunder is given (pursuant' to Section 14.11 of this
Agreement), release the Escrowed Materials to Xerox unless such action is
prohibited by order of a court of competent jurisdiction. The only events which
shall entitle Xerox to request the release of the Escrowed Materials are as
follows: (i) JetFax ceases to support and maintain the Software and Hardware
Designs as required pursuant to the terms of Section 4.4 of this Agreement and
such failure remains uncured for a period of sixty (60) days after written
notice thereof from Xerox, or (ii) the specified items of the Software or
Hardware Designs listed on the Project Schedule to be performed by JetFax fail
to be accepted pursuant to Section 4.2(a) and (b) within 90 days of the
applicable due date therefor set forth in the Project Schedule due primarily to
the failure of JetFax to perform its obligations under this Agreement, or (iii)
JetFax grants its prior written consent to such release, or (iv) if a Petition
is filed by or against JetFax under Chapter 7 of the Bankruptcy Act of the
United States and such Petition is not discontinued, vacated or terminated
within sixty (60) days. Xerox shall use such released Escrowed Materials solely
for the purpose of maintenance, support and production of the Product, or, in
the event subparagraph (ii) of this Section 2.5 shall occur, for the purpose of
maintenance, support and production and Xerox completion of development (with or
without the assistance of other parties) of a replacement product for the
partially completed Product and for the uses stated in the second paragraph of
Section 5.1 (b). Any Xerox use of the Escrowed Materials will be subject at all
times to the terms and conditions of this Agreement. JetFax agrees to update and
maintain monthly the Escrowed Materials held in safekeeping by the selected
Escrow Agent to reflect all changes made to the Escrowed Materials pursuant to
the terms of this Agreement.
2.6 Marketing. Except as expressly set forth in this Agreement, or in the
---------
Supply Agreement of even date herewith by and between Xerox and JetFax (the
"Supply Agreement"), both parties shall be free to market their own respective
versions of the Product (or permitted private label versions of same) through
such marketing channels and in such countries as each party shall independently
determine.
3. DESIGN REVIEW AND SPECIFICATION CHANGES
3.1 Design Review. The parties agree to conduct regular program reviews as
-------------
shown on the agreed Project Schedule set forth on Exhibit D to this Agreement,
to ensure their mutual satisfaction with the performance under the Agreement.
Upon reasonable notice, the parties agree to meet at a mutually agreeable time
and
5
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location to review and discuss the status of the development of the Product.
The parties further agree to promptly meet at the request of either party with
respect to any material issues a party may have with the performance of the
other party of its obligations under this Agreement.
3.2 Changes to the Specification. Each party is entitled to request
----------------------------
modifications in the form of changes or additions to the Specifications at any
time during the term of this Agreement. Such requests shall be submitted in
writing, and shall not be deemed or considered binding unless accepted by the
other party in writing. If any such modification of the Specifications is
agreed, the parties will negotiate an equitable adjustment to the Agreement,
including the apportionment of any additional development, testing or tooling
costs. Upon mutual agreement to any change to the Specifications, both parties
will proceed with the implementation of the prescribed changes, and the
Specifications and other Exhibits to the Agreement shall be modified accordingly
to reflect such agreed upon changes. Notwithstanding the foregoing, if the
JetFax requested changes to the Specifications involve any change to the Printer
Mechanism, the design responsibility for which is with third parties under
contract with Xerox, Xerox shall use reasonable efforts to effect such
Specification change provided that the same does not increase the cost of such
Printer Mechanism or component thereof, or adversely and materially affect the
Project Schedule or function of the Printer Mechanism, the Product or components
thereof. In such event JetFax shall be responsible for the payment of all
nonrecurring expenses involved in such change (or such pro rata portion thereof,
in the further event Xerox elects to incorporate the same in its version of the
Product). Notwithstanding the foregoing, JetFax shall not be responsible for
any such nonrecurring expenses if JetFax requested changes are necessary for the
Product to achieve Product Acceptance or to meet the Specification as changed at
the request of Xerox. In the event such third party will not agree to such
Specification change, Xerox shall so notify JetFax and Xerox shall have no other
or further liability to JetFax as a result of such request.
3.3 Modification to Specifications. JetFax and Xerox agree that upon
------------------------------
acceptance of each Deliverable pursuant to Section 4.2 and upon Product
Acceptance the Specifications shall be modified as necessary to conform to the
Deliverables and the Product, as applicable, as accepted, excepting mutually
agreed (in writing) deviations from the Specification which require additional
development work to achieve conformance to the Specification. After and upon
acceptance of each Deliverable pursuant to Section 4.2 and after and upon
Product Acceptance, the term "Specifications" as used herein shall refer in all
cases to the Specifications as so modified.
4. DELIVERABLES AND DELIVERY; ACCEPTANCE; AND REJECTION
4.1 Deliverables. Xerox and JetFax agree to use reasonable efforts to
------------
perform their respective Services and deliver their respective Deliverables in
accordance with the Project Schedule (Exhibit D). Each party's obligation shall
be contingent upon the other party successfully providing any prerequisite
Deliverable in a timely fashion in accordance with the Specifications for same.
All Deliverables shall be delivered by the times set forth in the Project
Schedule and stated dates are date of delivery unless otherwise specified. The
parties shall use such Deliverables for testing and acceptance and marketing
purposes only and shall not sell, lease
6
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or transfer the same to any third party.
4.2 Acceptance.
----------
(a) Each party, with the reasonable assistance of the other party if requested,
will examine and test each respective Deliverable (and/or item thereof as
specified on the Project Schedule) of the other party upon delivery. Each
receiving party shall, as soon as reasonably practicable following the delivery
of same, but in no event later than fifteen (I 5) business days after receipt of
notice of delivery: (i) accept the Deliverable (or item thereof and so inform
the other party in writing; or (ii) if the Deliverable (or item thereof contains
material Errors, reject the Deliverable (or item thereof and provide the other
party with a written statement of such material Errors. The failure of a party
to respond within the specified fifteen (15) day period shall be deemed
acceptance of the Deliverable (or item thereof, but shall not limit the
provisions of Section 4.4 hereof. Either party may request a reasonable
extension in the time to complete such testing if the same is required under the
circumstances, and both parties shall reasonably consider such requests,
provided that no such extension shall be effective unless in writing and signed
by a duly authorized representative of the party granting such extension.
(b) The developing party will promptly correct the material Errors set forth in
the statement of material Errors with respect to any Deliverable (or item
thereof and redeliver the Deliverable (or item thereof to the receiving party
within such reasonable period of time as may be agreed upon by JetFax and Xerox
with regard to all circumstances affecting the Product or the Deliverables. The
receiving party shall, as soon as reasonably practicable after such redelivery
but in no event later than fifteen (1 5) business days thereafter, accept or
reject the redelivery in accordance with the procedure set forth in Section
4.2(a), which procedure shall be repeated until the Deliverables are accepted or
the receiving party invokes the provisions of Section 4.3 hereof.
(c) "Product Acceptance" shall be deemed to occur upon the earlier of (i)
acceptance, pursuant to this Section 4.2, of all JetFax and Xerox Deliverables
and successful completion of the acceptance test procedures with regard to the
Product as set forth in Exhibit F or (ii) the first sale, lease, license or
other distribution or transfer of a unit of Product (not including any Xerox
replacement product as referred to in Section 5.1(a) second paragraph) by Xerox
to a customer or other third party other than solely for test purposes. The date
of such Product Acceptance shall be deemed the "date of Product Acceptance."
Notwithstanding anything to the contrary contained herein, Product Acceptance
shall not be conditioned upon any design or development of the JetFax
Deliverables to meet any criteria of any agency approvals other than those of
the United States or Canada.
(d) The parties further agree that in the event a dispute arises as to whether
any Deliverable (or item thereof is acceptable under the procedure set forth in
Sections 4.2(a) and 4.2(b), and the parties are unable after good faith
negotiation to resolve such dispute, the parties agree to submit the
acceptability of any such Deliverable (or item thereof to Genoa Technology,
Inc., or other independent third party-mutually acceptable to the parties, who
shall test such Deliverable (or
7
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item thereof and determine if such Deliverable (or item thereof is acceptable as
set forth in Sections 4.2(a) and 4.2(b). The determination of such independent
third party shall as to the acceptance or rejection of any Deliverable (or item
thereof, be deemed final. The cost, if any, of employing such independent third
party shall be borne by the losing party.
4.3 Rejection. Should any Deliverable fail to be accepted after the third
---------
delivery of that Deliverable pursuant to Section 4.2(b) then the parties shall
promptly meet in accordance with Section 3.1 to resolve the problem. Any
subsequent rejection of the same Deliverable (unless otherwise resolved pursuant
to Section 4.2(d)) shall be deemed a breach of this Agreement by such delivering
party, and the non-breaching party may elect to terminate this Agreement
pursuant to Section 1 1.1 (a) hereof, or may elect to accept further
resubmission of the applicable Deliverable.
4.4 Error Fixes. JetFax shall at its expense, from the Effective Date
-----------
until the date that is eighteen (18) months from the date of Product Acceptance,
use its reasonable efforts promptly to correct documented and reproducible
material Errors in the Software and Hardware Designs which are reported in
writing by Xerox to JetFax. Provided, however, that prior to Product
Acceptance, this obligation shall apply only to Deliverables (or items thereof
that have been delivered by JetFax in accordance with the Project Schedule.
Xerox shall provide such assistance in correction as JetFax may reasonably
request. All such corrections to the Software and Hardware Designs shall be
deemed to be included in the licenses granted under section 5,1 hereof, and
copies of any such corrections shall be promptly furnished in source code to the
escrow agent set forth in section 2.5 of this Agreement. JetFax will have no
obligation under this Section 4.4 with respect to any Error in the Software or
Hardware Designs caused by any person or entity other than JetFax or its sources
identified on the Bill of Materials and Source List and JetFax is not obligated
to correct any Errors in the Software unless such Error or defect causes the
Software to fail to function in conformance with the Specifications as defined
injection 3.3 herein.
4.5 JetFax Support. JetFax further acknowledges and agrees that, for a
--------------
period of one (1) year following Product Acceptance and subject to the
provisions of this Section 4.5, it shall provide Xerox with such reasonable
field and engineering support as Xerox shall reasonably request, necessary for
the manufacture and field support of the Product as more fully set forth in
Exhibit E to the Supply Agreement. All travel, lodging and associated expenses
(save salary and benefits of JetFax employees) shall be borne by Xerox. In
addition, after the one (1) year period following Product Acceptance, Xerox
shall pay JetFax the reasonable and customary personnel, service and related
charges for any such support provided by JetFax.
6. OWNERSHIP RIGHTS AND LICENSES
5.1 Software and Hardware Designs, Etc.
----------------------------------
(a) Subject to the terms and conditions of this Agreement and the Supply
Agreement, JetFax hereby grants to Xerox, effective only upon and after the date
of Product Acceptance, a nonexclusive, perpetual (except if terminated pursuant
to Section
8
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11.1 herein), worldwide license to the Software, the Hardware Designs, the
Mechanical Designs, and any other JetFax confidential information disclosed to
Xerox and necessary or useful for the following licensed activities (and JetFax
intellectual property corresponding to the above recited items), to manufacture
or have manufactured, the Product (including any enhancements and modifications
as set forth in Sections 3.3 and 8.1 of the Supply Agreement), the Product as
defined in the Supply Agreement (i.e., the "JetFax Product"), and any Derivative
Products (as defined in the Supply Agreement), and to use and distribute and
sell and service the Product, the JetFax Product and any Derivative Products.
Provided however, if the Escrowed Materials are released to Xerox pursuant to
Section 2.5 of this Agreement, the above license as it applies to the Product
shall automatically extend, if and only if there has not been Product
Acceptance, to a Xerox replacement product (and variants thereof for the
partially completed Product and shall automatically encompass all of the
Escrowed Materials. In such event, the royalty set forth in Section 6.2(a) of
this Agreement in the sum of [*] (reduced, if applicable as set forth in such
Section 6.2(a)) shall also apply to such replacement product license. In such
event, JetFax shall promptly and fully disclose the fully or partially completed
JetFax Deliverables to Xerox, but shall have no further obligations under
Sections 2.1, 2.3, 2.5, 4.1, 4.4 and 4.5 of this, Agreement and Section 3.1 of
the Supply Agreement.
(b) The Software, the Hardware Designs, and the Mechanical Designs are
confidential information of JetFax, subject to the CDA defined in Section 8.1 of
this Agreement and shall be used by Xerox solely in connection with the Product,
the JetFax Product, and any Derivative Products (as defined in the Supply
Agreement) in accordance with the terms of this Agreement and the Supply
Agreement or as provided in this Article 5. Subject to the terms and conditions
of this Agreement and the Supply Agreement, JetFax hereby grants to Xerox a
nonexclusive, perpetual (except if terminated pursuant to Section 1 1.2(a) of
this Agreement), worldwide license (with the Xerox right to sublicense Xerox
Affiliates) to the Mechanical Designs, the Hardware Designs (excluding the ASICs
and the Field Programmable Gate Arrays (FPGAS) themselves and a majority of the
designs of each such ASIC or FPGA), and any other confidential information of
JetFax disclosed to Xerox (excluding the Software and the above excluded items)
and necessary or useful for the following licensed activities (and JetFax
intellectual property corresponding to the above recited licensed items) to
manufacture or have manufactured any other products (i.e., products other than
the Product (but including any products related to the Product if there is no
Product Acceptance), the JetFax Product, and Derivative Products (as defined in
the Supply Agreement)), and to use and distribute and sell and service such
other products. Provided, however, notwithstanding any sublicense made pursuant
to the above right to sublicense, Xerox shall remain fully liable for compliance
with all of its obligations under this Agreement, including without limitation
the payment of all royalties.
Provided however, if the Escrowed Materials are released to Xerox pursuant to
Section 2.5 of this Agreement, the above license of this Section 5.1(b) shall
automatically extend, if and only if there has not been Product Acceptance, to
include all fully or partially completed JetFax Deliverables including Software,
ASICS,, and FPGAs and shall automatically encompass all of the Escrowed
9
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Material. To the extent Xerox uses a material amount of such extended materials
(not already included in the license in the immediately preceding paragraph)
under this extended license, Xerox shall be obligated to pay the royalty as set
forth in the last sentence of Section 6.2(b) of this Agreement.
(c) Xerox may distribute and sell the JetFax Product and any Derivative Product
only to JetFax and in accordance with the Supply Agreement. For the confidence
period of the CDA defined in Section 8.1 of this Agreement, Xerox shall not
alter (but subject to the provisions of Section 2.5 of this Agreement and the
licenses granted in the second paragraphs of Sections 5.1(a) and 5.1(b)),
reverse engineer, decompile or disassemble the Software or the ASICs and the
FPGAs Included in the Hardware Designs, and Xerox may copy the Software, the
Hardware Designs, the Mechanical Designs and any other confidential information
of JetFax which is disclosed to Xerox only as necessary for the exercise of the
licenses granted in Sections 5.1 (a) and 5.1 (b) and/or the provisions of
Section 2.5. JetFax retains its ownership rights in and to the Software,
Hardware Designs, Mechanical Designs and corresponding intellectual property.
(d) Subject to the terms and conditions of this Agreement and the Supply
Agreement, Xerox hereby grants JetFax a nonexclusive, perpetual (except if
terminated pursuant to Section I 1. 1 of this Agreement), royalty free and paid
up, worldwide (other than as to the manufacture and have manufactured rights and
units, which are territorially limited below in this Section 5.1(d)) license to
the Xerox Deliverables (excluding the Printer Mechanism, Cartridges, and Printer
Mechanism and/or Cartridge intellectual property) and any other Xerox
confidential information disclosed to JetFax and necessary or useful for the
following licensed activities (and Xerox intellectual property corresponding to
the above recited items) to manufacture and have manufactured and use and
distribute and sell and service the JetFax Product and any Derivative Products.
Provided, however, the manufacture and have manufactured activities of such
license are territorially limited to the People's Republic of China and Hong
Kong, and such activities are limited to assembling Fax Boards with or into
units of JetFax Products (minus Fax Boards) and/or Derivative Products (minus
Fax Boards) (as those terms are defined in the Supply Agreement) made by Xerox
or by a Xerox Affiliate and disassembling and reassembling such units..
Provided, further, however, the use, distribute, and sell activities of such
license with respect to units of JetFax Product and Derivative Product
manufactured pursuant to the foregoing manufacture and have manufactured license
are territorially limited to the People's Republic of China, Hong Kong, Macao,
Singapore, Malaysia, Thailand, Brunei, Indonesia and Philippines, and also
provided that the distribute and sell activities with respect to such units are
for end use only in the People's Republic of China, Hong Kong, Macao, Singapore,
Malaysia, Thailand, Brunei, Indonesia and Philippines. This Section 5.1 (d) does
not grant any license to Printer Mechanisms and Cartridges, n6r Xerox Printer
Mechanism and/or Cartridge intellectual property. For the confidence period of
the CDA defined in Section 8.1 of this Agreement, JetFax shall not alter,
reverse engineer, decompile or disassemble any software provided by Xerox, and
JetFax may copy such software only as necessary for use, distribution, sale, and
service as herein provided.
JetFax has the right to sublicense only to Ailicec the manufacture and have
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CONFIDENTIAL TREATMENT REQUESTED = [*]
manufactured license granted to JetFax in the immediately preceding paragraph
and the use, distribute, sell and service license granted to JetFax in the
immediately preceding paragraph with respect to units manufactured pursuant to
such manufacture and have manufactured license.
Any JetFax sublicense pursuant to the immediately preceding paragraph shall: (i)
be in writing; (ii) be nonexclusive, nontransferable, and nonsublicenseable and
subject to termination as provided in the immediately following paragraph; (iii)
be subject to all the limitations of the Section 5.1(d) license to JetFax; (iv)
subject Ailicec to obligations to JetFax no less protective of Xerox' rights
than JetFax's obligations to Xerox in Section 5.1 (d), Article 8, and Articles I
1, 12, and 13; and (v) include agreement by the sublicensee Ailicec for the
third party benefit of Xerox, (1) that sublicensee Ailicec receives no warranty
of any kind from Xerox, and (2) that sublicensee agrees not to refer to its
sublicense of rights pursuant to Section 5.1(d) or refer to any provision of or
rights contained in such sublicense or the Xerox name in any publicity,
advertising, or public promotional activity without the express written approval
of Xerox. Provided, nothing herein shall prohibit sublicensee from exercising
its distribute, sell and service rights through agents or distributors.
Upon the uncured (after 30 days notice) failure of any of the conditions of the
immediately preceding paragraph or sublicensee Ailicec's uncured (after 30 days
notice) failure to perform its obligations contained in such conditions, the
JetFax sublicense to Ailicec shall immediately terminate upon written notice of
Xerox to JetFax (and JetFax shall immediately inform Ailicec of such terminated
rights) and Xerox shall stop supplying JetFax Products (minus Fax Boards) and/or
Derivative Products (minus Fax Boards) to JetFax. No such termination shall
limit or impair in any way any other rights of JetFax under this Agreement or
the Supply Agreement, including the right to purchase JetFax Products and
Derivative Products from Xerox.
(e) Notwithstanding Xerox' ownership of certain tools for production of common
parts, Xerox hereby grants to JetFax the right to acquire such common parts,
subject to the applicable terms and provisions of the Supply Agreement.
5.2 Product. Xerox retains its ownership rights in and to any and all
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intellectual property contained in the Xerox Deliverables.
6. PAYMENTS
6.1 Advance Royalty.
---------------
(a) In consideration for certain of the Services to be performed by JetFax
hereunder, Xerox has heretofore paid to JetFax the sum of [*]. Such sum shall be
treated by the parties as payment by Xerox to JetFax for the Services performed
by JetFax with respect to the Product connectivity option as described in the
Specifications.
(b) In further consideration for certain of the Services to be performed by
JetFax hereunder, Xerox agrees to pay to JetFax a nonrefundable advance royalty
payment of [*], payable as follows:
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CONFIDENTIAL TREATMENT REQUESTED = [*]
The sum of [*] heretofore paid
by Xerox to JetFax.
The sum of [*] to be paid by Xerox in those increments as set forth in
the Milestone Schedule of Exhibit A-2, the payment associated on
Exhibit A-2 with each such Milestone to be made to JetFax upon the
successful completion of the specified Milestone.
(c) JetFax agrees to provide to Xerox, upon request, audited financial
statements for the JetFax accounting year of 1992 as well as quarterly financial
statements (audited if available) for each accounting quarter of 1993 and 1994.
In addition, JetFax shall provide Xerox, upon request, detailed manpower and
cost plans for the development effort. Any and all such information provided to
Xerox is subject to the CDA defined in Section 8.1 of this Agreement.
6.2 Royalty Payments.
----------------
(a) In further consideration of the Services performed hereunder and the
licenses granted herein by JetFax, Xerox shall pay JetFax a royalty, with
respect to each and any sale, lease, license or other distribution or transfer
of a unit of Product (and/or a unit of replacement product as described in the
second paragraph of Section 5.1(a) and/or a unit of product described in Section
5.1(b) if such paragraph of Section 5.1(a) or the second paragraph of Section
5.1(b) is applicable) to a customer or other third party (other than JetFax, but
including any Xerox Affiliates) (and excluding up to [*] production units of
Product to be internally used by Xerox , which units shall be without royalty),
in an amount equal to [*] for each such unit sold, leased, licensed or otherwise
distributed or transferred. [*].
(b) In further consideration of the Services performed hereunder and the
licenses granted herein, Xerox shall pay JetFax a royalty, with respect to each
and any sale, lease, license or other distribution or transfer to a customer or
other third party (other than JetFax but including Xerox Affiliates) of a unit
of any product (other than the Product or the JetFax Product or Derivative
Products (as defined in the Supply Agreement)) with respect to the design or
manufacture of which: (i) all or part of the Mechanical Designs and/or any
corresponding JetFax intellectual property have been used, in an amount equal to
[*]
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CONFIDENTIAL TREATMENT REQUESTED = [*]
for each such unit sold, leased, licensed or otherwise distributed or
transferred; (ii) all or part of that portion of the Hardware Designs licensed
to Xerox pursuant to Section 5.1 (b) and/or any corresponding JetFax
intellectual property, or any other JetFax confidential information disclosed to
Xerox and/or any corresponding JetFax intellectual property have been used, in
an amount equal to [*] for each such unit sold, leased, licensed or otherwise
distributed or transferred. The above royalty(s) shall be payable for JetFax
information only if the information used was subject to Clause 2. of the CDA
defined in Section 8.1 of this Agreement when suc6 information was first
communicated to Xerox by JetFax (provided, however, all parts drawings and
schematics for circuit boards are, and shall be, deemed to have been subject to
Clause 2 of the CDA when first communicated to Xerox by JetFax), and only for
units sold, leased, licensed or otherwise distributed or transferred within five
(5) years after the Effective Date of this Agreement. The above royalties
described in clauses (i) and (ii) are not exclusive of each other and a total
royalty of [*] per unit will apply with respect to any product to which both
clauses (i) and (ii) above apply. [*]. When the Section 6.2(b) royalties paid to
JetFax reach the sum of [*], the license set forth in Section 5.1(b) to Xerox
shall automatically become royalty free and paid up. For units sold, leased,
licensed or otherwise distributed or transferred after the five (5) year period
referred to above in this Section 6.2(b), the license to Xerox set forth in
Section 5.1(b) shall automatically become royalty free and paid up. No royalties
payable pursuant to Section 6.2(a) shall be subject to, nor included in the
calculation of, the royalty cap of this Section 6.2(b). Provided, further, in
the event Xerox shall use a material amount of any of the Escrowed Materials not
included in the license under the first paragraph of Section 5.1 (b) in products
under the license set forth in the second paragraph of Section 5.1 (b) of this
Agreement, Xerox shall pay to JetFax the royalty amount set forth in Section
6.2(a) and not the royalty set forth in this Section 6.2(b) provided however,
that for uncopyrighted and unpatented such materials the sentence 'The above
royalty(s) . . . of this Agreement.' above in this Section 6.2(b) shall apply.
(c) All royalty payments as specified in Sections 6.2(a) and (b) shall be paid
by Xerox to JetFax monthly until such time as the prepaid royalty is totally
offset pursuant to Section 6.2(a), and quarterly thereafter (beginning with the
first full calendar quarter) within thirty (30) days after the end of each month
or calendar quarter, as applicable and shall be due and payable with respect to
each and all units sold, leased, licensed, or otherwise distributed or
transferred, without regard to whether or not Xerox shall have received payment
with respect thereto.
(d) Any amounts owed by JetFax to Xerox which are past due may, at Xerox'
option, be deducted from the royalty due JetFax from Xerox.
(e) JetFax acknowledges and agrees that Xerox shall have the right, without the
payment of any additional royalty, to remanufacture units of the Product
returned from its customers for, any reason, and to resell or release the same
to its
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customers.
6.3 Nonrecurring Engineering (NRE) Costs for ASICS. Xerox shall pay all
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nonrecurring engineering costs associated with the conversion of the FPGAs to
ASICs and shall pay all consulting fees for test vector generation.
7. REPRESENTATIONS AND INDEMNIFICATION
7.1 Representations Each party represents that:
--------------------
(a) it has full right and authority to enter into this Agreement and
the Supply Agreement, to perform its obligations hereunder;
(b) and it has full right and authority to grant the rights granted to
the other party herein.
7.2 Xerox' Infringement Indemnity.
-----------------------------
(a) Subject to the terms hereof, Xerox agrees to indemnify, defend and
hold JetFax and its customers harmless from and against any claim or suit
alleging that the Xerox Deliverables (excluding the Printer Mechanism and the
JetFax Cartridge, the indemnity for which is set forth exclusively in the Supply
Agreement) infringes any patent rights, copyrights or other proprietary rights
of any third party when used for its intended purposes in conjunction with the
Product or the JetFax Product or any Derivative Product; provided that: (i)
JetFax gives Xerox prompt notice in writing of any such suit and permits Xerox,
through counsel of its choice, to answer the charge of infringement and defend
such claim or suit, (ii) Xerox has sole control of the defense and all related
settlement negotiations, (iii) JetFax has not further modified or altered the
Xerox Deliverables following their delivery to JetFax if such claim or suit
would have been avoided if such modification or alteration had not been made,
and (iv) JetFax provides Xerox with the assistance, information and authority to
perform the above. In the event Xerox agrees to settle the suit, both Xerox and
JetFax agree not to publicize the settlement nor to permit the party claiming
infringement to publicize the settlement without first obtaining the other
party's written permission.
(b) Duty to Correct. Notwithstanding Section 7.2 (a), should the
---------------
Xerox Deliverables become the subject of a claim of infringement of a third
party's patent right, copyright or other proprietary rights, Xerox shall, at its
option and expense: (i) procure for JetFax the right to use! the applicable
Xerox Deliverable and sell the JetFax Product and any Derivative Product (and
any royalties or other payments required to obtain such rights shall be paid by
Xerox) or (ii) replace or modify the Xerox Deliverable to make it non-
infringing, provided that the. same function is performed by the replacement or
modified Xerox Deliverable.
(c) Right to Use Study. Xerox may conduct a right to use study with
------------------
respect to the Xerox Deliverables (excluding the Printer Mechanism and the
JetFax Cartridge) when used in conjunction with the JetFax Product or any
Derivative
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Product. If:
(I) prior to one (1) month after the design of the JetFax Product or
any Derivative Product is fixed by JetFax and that fact is disclosed by JetFax
to Xerox (and JetFax shall promptly disclose such fact to Xerox) along with
JetFax Product or any Derivative Product information reasonably needed by Xerox
to conduct its right to use study (and JetFax shall promptly disclose such
information to Xerox after such design is fixed);
(II) Xerox identifies unlicensed third party patent(s) which Xerox
reasonably believes will be infringed by use by or for JetFax or its customers
of the Xerox Deliverables (excluding the Printer Mechanism and the JetFax
Cartridge) when used in conjunction with the JetFax Product or any Derivative
Product and Xerox clearly identifies in writing (including patent or application
numbers and issue or filing dates respectively) to JetFax any such patent(s);
then the parties agree as follows. If Xerox is unable to promptly obtain a
license under such patents on reasonable terms (and any royalties or other
payments required to obtain such license shall be paid by Xerox) and the parties
are unable to reasonably design around such patent(s);
then the parties shall meet to further work in good faith to resolve this
problem. In the event such resolution cannot be achieved within one (1) month
after the parties first met to further work to try to resolve the problem, such
patent(s) shall be excluded from the indemnity provided by Xerox in this Section
7.2 as it applies to the JetFax Product; however, in such event JetFax shall
have the option to negotiate with Xerox (and Xerox will negotiate in good faith)
for a lower Supply Agreement Article 4 price and/or cancel its JetFax Product
activities.
7.3 (a) JetFax Indemnity. Subject to the terms hereof, JetFax agrees to
----------------
indemnify, defend and hold Xerox harmless from and against any claim or suit
alleging that the Software and/or the Hardware Designs provided by JetFax
pursuant to this Agreement when used for their intended purposes in conjunction
with any of the following items made by or for, Xerox: the Product, the JetFax
Product, or any Derivative Product, infringes the patent rights, copyrights or
other proprietary rights of any third party ; provided that (i) Xerox notifies
JetFax in writing within fifteen (1 5) business days of any claim, (ii) JetFax
has sole control of the defense and all related settlement negotiations and
(iii) Xerox provides JetFax with the assistance, information and authority
necessary to perform the above. Notwithstanding the foregoing, JetFax shall
have no liability hereunder for any claim or suit based on (i) modifications or
other alterations made to the Software or the Hardware Designs by a party other
than by or for JetFax (other than by Xerox or Xerox Affiliates) or the
combination, operation or use of the Software or the Hardware Designs with other
hardware or software not furnished or developed by or for JetFax (other than by
Xerox or Xerox Affiliates) if such infringement would have been avoided by the
use of the Software and the Hardware Designs without such modification or
alteration or without such other hardware or software or (ii) any Software
related to the User Interface (as included in the Xerox Deliverables) or (iii)
infringement of any proprietary rights of third parties to the extent and for
the time period and activities such proprietary rights are licensed to Xerox
(but JetFax shall reimburse Xerox for any reasonable per unit royalties Xerox is
obligated to pay and does pay for such license(s) to the
15
<PAGE>
extent Xerox incurs greater cost under such license(s) dub to purchase of units
by JetFax under the Supply Agreement). In the event that the Software or the
Hardware Designs are the subject of a claim of infringement, JetFax may at its
option and expense (i) modify the same to be non-infringing or (ii) obtain for
Xerox a license (and any royalties required to obtain such license shall be paid
by JetFax) to continue using the same. The provisions of this Section 7.3 state
the entire liability and obligations of JetFax and the exclusive remedy of Xerox
with respect to any infringement or alleged infringement of proprietary rights
by the Software or the Hardware Designs. Except as set forth herein, JetFax
assumes no liability for, and expressly disclaim,.,, any liability with respect
to, any infringement or alleged infringement of any proprietary rights by the
Software or the Hardware Designs.
(b) JetFax Right to Use Study. JetFax may conduct a right to use study with
respect to the JetFax Deliverables when used in conjunction with the Product.
If:
(i) prior to one (1) month after the design of the Product is fixed by
Xerox and that fact is disclosed by Xerox to JetFax (and Xerox
shall promptly disclose such fact to JetFax) along with Product
information reasonably needed by JetFax to conduct its right to
use study (and Xerox shall promptly disclose such information to
JetFax);
(ii) JetFax identifies unlicensed third party patent(s) which JetFax
reasonably believes will be infringed by use by or for Xerox or
its customers of the JetFax Deliverables when used in conjunction
with the Product and JetFax clearly identifies in writing
(including patent or application numbers and issue or filing
dates respectively) to Xerox any such patent(s);
then the parties agree as follows. If JetFax is unable to promptly obtain a
license under such patents on reasonable terms (and any royalties or other
payments required to obtain such license shall be paid by JetFax) and the
parties are unable to reasonably design around such patent(s); then the parties
shall meet to further work in good faith to resolve this problem. In the event
such resolution cannot be achieved within one (1) month after the parties first
met to further work to try to resolve the problem, such patent(s) shall be
excluded from the indemnity provided by JetFax in this Section 7.3 as it applies
to the Product; however in such event Xerox shall have the option to negotiate
with JetFax (and JetFax will negotiate in good faith) for a lower Section 6.2
royalty and/or cancel its Product activities.
7.4 Xerox for the Xerox Deliverables (excluding the Printer Mechanism and
the JetFax Cartridge), and JetFax for the JetFax Deliverables, shall promptly
identify to the other party any third party patents known by Xerox for its
Deliverables and known by the President and/or CEO of JetFax for its
Deliverables to cover such Deliverables. Each party has disclosed to the other
prior to the Effective Date all such patents known prior to the Effective Date.
8. CONFIDENTIALITY
8.1 Each party's information disclosed to the other party pursuant to this
Agreement shall be governed by the terms of the "CONFIDENTIAL DISCLOSURE
AGREEMENT" (the "CDA") between the parties attached as Exhibit G and
16
<PAGE>
which is entered into and effective as of the Effective Date of this Agreement.
8.2 The provisions of the CDA are hereby adopted by the parties and shall
remain in full force and effect as a part of this Agreement as though fully set
forth herein.
8.3 Without limitation to any other provision of this Agreement, the CDA
referred to in Section 8.1 applies to all source code and supporting
documentation including concepts and algorithms embedded in the source code. In
addition, Xerox agrees not to make available any part of any program listing
obtained pursuant to Section 2.5 of this Agreement to a third party within the
meaning of the CDA unless that part of the program listing is subject to one or
more provisions of CDA clause 3. (a) - (0, notwithstanding the fact that the
period for this obligation may extend beyond the 3.5 years of the CDA.
8.4 This Agreement shall be deemed Confidential Information and shall not
be disclosed to third parties other than as provided in Section 14.18 of this
Agreement.
9. PROPRIETARY RIGHTS NOTICES
The Product shall bear any and all reasonable and customary proprietary rights
notices associated with or carried by any of the Deliverables. Neither party
will remove, cover or deface any such proprietary rights notices.
10 TERM
This Agreement will commence on the Effective Date and will continue to be in
force and effect until such time as it is otherwise terminated as herein
provided.
II. TERMINATION
11.1 Termination for Cause By Either Party. Either party may terminate
-------------------------------------
this Agreement:
(a) Upon sixty (60) days written notice to the other party in the event the
other party breaches any of its material obligations hereunder and fails to cure
same during the notice period, or if it is not reasonable to expect such a cure
within that period, does not take effective action within such period to
promptly cure the material breach; or
(b) Upon sixty (60) days written notice to the other party in the event a
petition in bankruptcy or similar debtor protection law is filed by or against
the other party, or if the other party makes an assignment for the benefit of
creditors, or a receiver is appointed, and such events are not discontinued,
vacated or terminated during the notice period;
11.2 Effect of Termination.
---------------------
(a) The licenses set forth in Section 5.1 (t)) hereof are perpetual (and shall
survive a termination under Section 11.1 of this Agreement), subject, however,
to the royalty obligations of Section 6.2 hereof and all title and
confidentiality provisions of this Agreement, provided, however, that the
licenses set forth in
17
<PAGE>
Section 5.1 (b) are subject to termination upon sixty (60) days written notice
from JetFax to Xerox in the event Xerox breaches any of its material obligations
with respect to such royalty, title or confidentiality provisions as they apply
to such licenses and fails to cure the same during such sixty (60) day notice
period, or if it is not reasonable to expect such a cure within that period,
does not take effective action within such period to promptly cure the material
breach.
(b) Upon termination of this Agreement each party shall return to the other
party all unlicensed confidential or proprietary information of the other party
and shall make no other or further use of such unlicensed information.
12. RIGHT TO DEVELOP INDEPENDENTLY
Nothing in this Agreement will impair either party's right to acquire, license,
develop, manufacture or distribute for itself, or have others develop,
manufacture or distribute for it, similar technology performing the same or
similar functions as the technology contemplated by this Agreement except as
provided in Sections 5 and 8, or to market and distribute such similar
technology or products.
13. DISCLAIMER OF CONSEQUENTIAL DAMAGES AND IMPLIED WARRANTIES
In no event shall either party be liable to the other for any indirect, special,
incidental or consequential damages for breach of or failure to perform under
this Agreement, even if that party has been advised of the possibility of such
damages. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7.1 OR IN THE SUPPLY
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY DELIVERABLE OR OTHERWISE, INCLUDINIG WITHOUT
LIMITATION, THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, TECHNICAL PERFORMANCE, OR COMMERCIAL SUCCESS AND HEREBY DISCLAIMS ALL
SUCH OTHER WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED EITHER IN THIS AGREEMENT OR
THE SUPPLY AGREEMENT, NEITHER PARTY ASSUMES ANY RESPONSIBILITIES WHATEVER WITH
RESPECTTOTHE DEVELOPMENT, MANUFACTURE , USE, SALE, LEASE, OR OTHER DISPOSITION
BY THE OTHER PARTY OR ITS VENDEES OF PRODUCTS INCORPORATING DELIVERABLES
LICENSED OR PROVIDED UNDER THIS AGREEMENT OR THE SUPPLY AGREEMENT.
14. GENERAL
14.1 Force Majeure. Neither party shall be liable for any failure or
-------------
delay in its performance under this Agreement due to causes which are beyond its
reasonable control, including, but not limited to, acts of God, acts of civil or
military authority, fires, epidemics, floods, earthquakes, riots, wars,
sabotage, labor shortages or disputes, and governmental actions; provided that
(a) the delayed party: (i) gives the other party written notice of such cause
promptly, and in any event within fifteen (15) days of discovery thereof; and
(II) uses its reasonable efforts to correct such failure or delay in its
performance, and (b) the delayed party's time for performance or cure under
this Agreement shall be
18
<PAGE>
extended for a period equal to the duration of the cause or sixty (60) days,
whichever is less.
14.2 Relationship of Parties. Xerox and JetFax are independent
-----------------------
contractors. Neither company nor its respective employees, consultants,
contractors or agents are agents, employees or joint venturers of the other, nor
do they have any authority to bind the other by contract or otherwise to any
obligation. They will not represent to the contrary, either expressly,
implicitly, by appearance or otherwise. Each party will determine, in its sole
discretion, the manner and means by which the Services are accomplished, subject
to the express condition that each party will at all times comply with
applicable law.
14.3 Use of Name. Neither party will, without first obtaining the others
-----------
prior written consent, be entitled to use the name of the other party in
promotional, advertising and other materials other than as provided in Section
14.18 of this Agreement.
14.4 Personnel. The respective employees, consultants, contractors and
---------
agents of each party will observe the working hours, working rules and holiday
schedule of the other while working on the other's premises.
Notwithstanding the foregoing, employees of a party shall be and remain
employees of that party and shall not be deemed or claim to be employees of the
other party even when working on such other party's premises.
14.5 Employment Taxes and Benefits. Each party shall be responsible for
-----------------------------
any and all employment taxes and benefits payable to its employees,
representatives, contractors, subcontractors and other engaged by it to perform
Services hereunder and in no event shall either party look to the other for such
payments.
14.6 Other Tax Implications. The purpose of development of the
----------------------
Deliverables under this Agreement is to demonstrate that the Product developed
hereunder will conform to the Specifications. The Deliverables have no
intrinsic value as an item. As such, no value added, sales, or use taxes have
been assessed or are anticipated to be required as a result of the Services
performed under this Agreement.
14.7 Export Controls. Both parties shall comply with all applicable United
---------------
States laws and regulations respecting the export, directly or indirectly, of
any technical data acquired from the other under this Agreement or any Product
or Deliverables utilizing any such data.
14.8 Assignment. Except as expressly provided herein, neither party may
----------
assign or delegate this Agreement, or any of its respective rights or
obligations hereunder without the prior written consent of the other party
hereto; PROVIDED, however, that JetFax may, without Xerox' consent, assign or
delegate this Agreement and JetFax's rights and obligations hereunder to any
successor in interest to JetFax in connection with any sale or transfer of all
or substantially all of its assets or upon any merger, consolidation, or
dissolution. Either party may, from time to time and upon prior written notice
to the other party, subcontract with one of its subsidiaries for the performance
of certain obligations under this Agreement, provided that-the party so
subcontracting shall remain fully liable for
19
<PAGE>
performance of its obligations hereunder. Any attempted assignment in violation
of the provisions of this Section 14.8 shall be void and without force or
effect. In the event of a permitted assignment hereunder, this Agreement or the
applicable provisions shall be binding upon the successors, executors, and
assigns of the parties hereto.
14.9 Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of New York, U.S.A. without giving effect
to the principles of conflicts of law thereunder.
14.10 Severability. If for any reason a court of competent jurisdiction
------------
finds any provision of this Agreement, or portion thereof, to be unenforceable,
that provision of the Agreement shall he enforced to the maximum extent
permissible so as to effect the intent of the parties, and the remainder of
this Agreement shall continue in full force and effect.
14.11 Notices. All notices required or permitted under this Agreement shall
-------
be in writing, reference this Agreement and be deemed given when: (i) delivered
personally; (ii) when sent by confirmed telex or facsimile; (iii) five (5) days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one (1) day after deposit with a commercial
overnight carrier, with written verification of receipt. All communications
will be sent to the addresses set forth below. Either party may change its
address by giving notice pursuant to this Section 14.1 1.
JetFax: Xerox:
- ------- -------
Mr. Rudy Prince Richard D. Bliss
President, Jet Fax, Inc. Manager, Facsimile Products
1376 Willow Road 1301 Plideview Drive
Menlo Park, California 94025 Building 100, Lewisville, Texas 75075
With a copy to:
Clifford S. Robbins, Esq.
General Counsel Associates 1891 Landings Drive
Mountain View, California 94043
With a copy to:
Louis Faber, Esq.
Xerox Corp. Office of General Counsel
Xerox Square 21 D
Rochester, New York 14644
14.12 No Waiver. Failure by either party to enforce any provision of this
---------
Agreement shall not be deemed a waiver of future enforcement of that or any
other provision.
14.13 No Rights in Third Parties. This Agreement is made for the benefit of
--------------------------
Xerox and JetFax and not for the benefit of any third parties.
14.14 Counterparts. This Agreement may be executed in one or more
------------
countereach of which shall be deemed an original, but collectively shall
constitute but one and the same instrument.
14.15 Headings and References. The headings and captions used in this
-----------------------
Agreement are used for convenience only and. are not to be considered in
construing or
20
<PAGE>
interpreting this Agreement.
14.16 Construction. This Agreement has been negotiated by the parties and
------------
their respective counsel. This Agreement will be fairly interpreted in
accordance with its terms and without any strict construction in favor of or
against either party.
14.17 Trademark Usage. Neither party shall make any use of any trademark,
---------------
service mark or trade name of the other in connection with its advertising,
promotional material or packaging for the Product without first obtaining the
other party's written consent.
14.18 Non-Publicity. Neither party shall directly or indirectly, without
-------------
the prior written consent of the other party, such consent not to be
unreasonably withheld, make any news release or public announcement or other
public disclosure regarding this Agreement or the existence thereof.
Notwithstanding the foregoing, JetFax shall be free to make disclosures to its
shareholders, directors, officers, employees, attorneys, accountants and other
professional representatives of JetFax and to Ailicec and as necessary or
appropriate for compliance with federal or state securities laws and
regulations. It is JetFax's intent to make confidential factual disclosures, in
accordance with the terms and conditions of this Section 14.18, to, a limited
number of potential lenders, investors and underwriters. Neither party shall
disclose information with respect to the other's confidential business plans.
14.19 Complete Agreement. This Agreement, including all Exhibits, together
------------------
with the Supply Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof, and supersedes and replaces all prior
or contemporaneous understandings or agreements, written or oral, regarding such
subject matter. No amendment to or modification of this Agreement shall be
binding unless in writing and signed by duly authorized representatives of both
parties. To the extent any terms and conditions of this Agreement conflict with
the terms and conditions of any invoice, purchase order or purchase order
acknowledgement placed hereunder, the terms and conditions of this Agreement
shall govern and control.
14.20 Survival. The provisions of Sections 5.1(b) (first sentence only),
--------
5.1(c), 5.1(d) (last sentence of the first paragraph only), 5.2, 8, 11.2, 12 and
13 shall survive the expiration or termination of this Agreement for any reason.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
JETFAX, INC.
BY: /s/ Rudy Prince
NAME: Rudy Prince
TITLE: President
XEROX CORPORATION
BY: /s/ Richard Bliss
NAME: Richard Bliss
TITLE: Manager, Facsimile Products
21
<PAGE>
DEVELOPMENT AGREEMENT
LIST OF EXHIBITS
- ----------------
A JetFax Deliverables
A - 2 Milestone Schedule
B Xerox Deliverables
C Xerox Product Performance Specification
D Project Schedule
E Customer and Service Documentation Deliverables
F Acceptance Test Procedures
G Confidential Disclosure Agreement
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
Exhibit A
Development Agreement
JetFax Deliverables
- -------------------
JetFax shall provide the following deliverables in accordance with the defined
parameters for quality.
[*- 3 pages redacted]
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
Exhibit A-2
Development Agreement
Milestone Schedule
- ------------------
[*- 4 pages redacted]
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
Exhibit B
Development Agreement
Xerox Deliverables
- ------------------
Xerox shall provide the following deliverables:
[* - the page following this is also redacted]
<PAGE>
EXHIBIT C
DEVELOPMENT AGREEMENT
XEROX PRODUCT PERFORMANCE SPECIFICATION
- ---------------------------------------
Because of its size this exhibit is not included with each copy. Please see
Xerox specification 156PO6328.
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
Exhibit D
Development Agreement
Project Schedule
- ----------------
Item Date[*]
- ---- -------
[* - the page following this is also redacted]
<PAGE>
Exhibit E
Development Agreement
Customer and Service Documentation Deliverables
- -----------------------------------------------
Xerox will provide a Globalview electronic version and one set of repro masters
for the Xerox HQ 310 multifunction device. The electronic data base will be
developed on the 6085 and 6540 using Xerox Globalview. Electronic art will be
generated using Pro Illustrator and scanned (XPIW) documents. Deliverables will
include the following items. Exceptions to the following deliverables will be
considered billable activities and will be charged on a time and material basis.
INSTALLATION INSTRUCTIONS
- -------------------------
The Xerox HQ 310 Installation instructions will step the user through the
procedure to unpack and connect the Xerox HQ 310 to a computer to function as a
printer and to a telephone line to function as a Fax machine.
USER GUIDE
- ----------
The Xerox HQ 310 user guide will provide step by step procedures on the machine
operation both as a printer and a Fax machine.
QUICK REFERENCE GUIDE
- ---------------------
A Quick Reference guide will provide abbreviated procedures on the commonly used
features. It is designed for the user that is familiar with the machine. The
Quick Reference Guide may be part of the user guide or may be a separate item.
SERVICE MANUAL
- --------------
The Xerox HQ 310 Service Manual is a multinational document designed to support
Xerox Operating Companies and their target population. Fault isolation
procedures in the form of System Checks and Raps provide step by step procedures
to isolate a faulty component at the spared level. Removal and replacement
procedures give detailed instruction as to spared level parts replacement.
Adjustment, procedures, if required, will follow the removal and replacement
procedures. Parts identification to the spared level is provided by exploded
view drawings. Connector and wiring information is also contained in the
service manual. The service manual is designed for use by a Xerox trained
Service Representative.
STUDENT GUIDE
- -------------
The Xerox HQ 310 Student guide consists of several training modules written in
the Criterion Referenced Instruction format. The student guide provides
specific product training on the HQ 310. The Student Guide is self paced with
typically only minor intervention required of the Instructor or course monitor.
INSTRUCTORS GUIDE
- -----------------
The Xerox HQ 31 0 Instructor Guide provides direction to the instructor or
course monitor as to the activities and interaction required during the training
session.
TRANSLATIONS
- ------------
Xerox will make available to JetFax all translations which have been
accomplished. The translations will be in either hard copy or in electronic
form using Xerox Global View.
<PAGE>
EXHIBIT F
Developement Agreement
Acceptance Testing
- ------------------
Xerox shall conduct acceptance testing of Tejas in accordance with the
following.
[*- 3 PAGES REDACTED]
- ---------------------
<PAGE>
EXHIBIT G
DEVELOPMENT AGREEMENT
CONFIDENTIAL DISCLOSURE AGREEMENT
- ---------------------------------
Xerox Corporation (Xerox) of Stamford, Connecticut. and JetFax, Inc. (JetFax),
of Menlo Park, CA, the parties to this Agreement, hereby agree as follows:
1. To further the business relationship between the parties, and to
enable the parties to jointly develop a new facsimile product, HQ31 0, it is
necessary and desirable that each party disclose to the other Confidential
Information relating to this project.
2. The receiving party shall not communicate the disclosing party's
Confidential Information'(all information relating to this project and disclosed
to the receiving party for which the obligations of this Paragraph 2 have not
been terminated by operation of Paragraph 3 hereof to any third party and shall
neither, use the disclosing party's Confidential Information nor circulate it
within its own organization except to the extent necessary for the joint
development of the HQ310 or for any purpose the disclosing party may hereafter
authorize in writing or authorizes pursuant to the terms of a Development
Agreement or a Supply Agreement to which this Confidential Disclosure Agreement
is an Exhibit. Disclosures to the receiving party's subsidiaries and affiliates
and consultants and suppliers and software developers so long as these entities
are similarly bound shall not be considered disclosure to a third party within
the meaning of the previous sentence.
3. The obligations of Paragraph 2 hereof shall terminate with respect to
any particular portion of the disclosing party's Confidential Information that:
(a) was in the public domain at the time of disclosing party's communication
thereof to receiving party,
(b) entered the public domain through no fault of receiving party subsequent to
the time of disclosing party's communication thereof to receiving party,
(c) was in receiving party's possession free of any obligation of confidence at
the time of disclosing party's communication thereof to receiving party,
<PAGE>
(d) was rightfully communicated to receiving party free of any obligation of
confidence subsequent to the time of disclosing party's communication thereof to
receiving party,
(e) was developed by employees or agents of receiving party independently of
and without reference to any disclosing party Confidential Information,
when it is communicated by disclosing party to a third party free of any
obligation of confidence; or,
(g) in any event, 3.5 years after the Effective Date as defined in the parties'
Development Agreement.
When and to the extent the obligations of Paragraph 2 shall not apply to a
particular portion of Information because of the operation of Paragraph 3
hereof, such Information is no longer Confidential Information hereunder.
4. All materials including, without limitation, documents, specifications,
drawings, software, models, apparatus, sketches, designs, and lists furnished to
receiving party by disclosing party and which are designated in writing to be
the property of the disclosing party shall remain the property of disclosing
party and shall be returned to disclosing party promptly at its request with all
copies made thereof except as disclosing party may otherwise agree in writing or
has otherwise agreed pursuant to the terms of the Development Agreement or
Supply Agreement to which this CDA is an exhibit.
5. This Agreement shall govern all communications between the parties,
relating to the subject matter of this Agreement that are made from July 7th,
1993.
6. Communications from disclosing party to personnel and authorized
representatives of receiving party shall not be in violation of' the proprietary
rights of any third party.
7. This Agreement shall be construed in accordance with the laws of the State
of New York.
8. This Agreement replaces the CONFIDENTIAL DISCLOSURE AGREEMENT between
the parties signed by Xerox on 7/15/93 and BY JetFax on 7/19/93.
<PAGE>
Xerox Corporation JetFax, Inc.
By /s/ Richard Bliss By /s/ Rudy Prince
Richard Bliss Rudy Prince
Manager, Facsimile Products President
<PAGE>
EXHIBIT 10.35
REDACTED
CONFIDENTIAL TREATMENT REQUESTED = [*]
FACSIMILE PRODUCT DEVELOPMENT AGREEMENT
BY AND BETWEEN
JETFAX, INC. AND XEROX CORPORATION
This Facsimile Product Development Agreement (the "Agreement") is entered into
and is effective as of November 23, 1994 (the "Effective Date"), by and between
JetFax, Inc., a Delaware Corporation having its principal place of business at
1376 Willow Road, Menlo Park, California 94025 ("JetFax"), and Xerox
Corporation, a New York corporation having its principal place of business at
800 Long Ridge Road, Stamford, Connecticut 06904-1600 ("Xerox").
WHEREAS, JetFax desires, upon the terms and conditions set forth in this
Agreement, to perform certain Services and provide certain Hardware Designs,
Bill of Materials and Source List and Software (as hereinafter defined); and
WHEREAS, Xerox desires to perform certain Services as more fully set forth
herein;
NOW, THEREFORE, it is agreed by and between the parties as follows:
AGREEMENT
1. DEFINITIONS
1.1 "Acceptance" shall mean the date of acceptance pursuant to Section
4.2(c) hereof.
1.2 "Bill of Materials and Source List" shall mean the identification by
manufacturer and model of certain components and the source from which such
components compliant with the Specifications may be obtained.
1.3 "Errors" shall mean: (i) reproducible defects in any Deliverable which
causes it not to function in conformance with the Specifications, and (ii)
Software miscoding which results in the Software failing to function in
conformance with the Specifications, if such failure is reproducible.
1.4 "Hardware Designs" shall mean those [*].
1.5 "JetFax Deliverables" shall mean, collectively or individually, JetFax
developed Software, Hardware Designs, and Bill of Materials and Source List. A
more detailed description of the JetFax Deliverables and the requirements for
same are set forth in Exhibit A to this Agreement.
1
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
1.6 "Product" shall mean the [*].
1.7 "Project Schedule" shall mean the schedule of events and coordinate
time for the parties' performance under this Agreement, as set forth in Exhibit
D.
1.8 "Services" shall mean the work and labor necessary for the performance
of the respective obligations of the parties to this Agreement.
1.9 "Software" shall mean software object code, as set forth in Exhibit A,
designed in accordance with the Specifications.
1.10 "Specifications" shall mean the engineering, operational and/or
functional descriptions, details and requirements for the Product and the
Software and Hardware Designs, as set forth in Exhibits A and B as the same may
be modified as provided herein. Included are any standards for performance or
operation of the item to which such Specifications pertain.
1.11 "User Interface" shall mean a [*].
1.12 "Xerox Affiliates" shall mean Xerox Canada, Inc., Rank Xerox Ltd.,
Fuji Xerox Ltd., and any subsidiary or affiliate at least 40% of the ownership
of which is held directly or indirectly by Xerox, Xerox Canada Inc., Rank Xerox
Ltd., or Fuji Xerox Ltd.
1.13 "Xerox Deliverables" shall mean [*].
2. SCOPE OF WORK
2.1 Services. Upon the terms and conditions set forth in this
Agreement, jetfax and Xerox agree to perform the Services in
accordance with Exhibits A and B, respectively. Each party will
be responsible for obtaining all the technology, labor, material,
tooling and facilities necessary for the completion of its
portion of the Services, except as otherwise set forth in this
Agreement.
2.2 Progress Reports.
Each party hereto shall provide the other
party with progress reports, as reasonably requested by the other
party, starting after the Effective Date and ending on the date
of
2
<PAGE>
Acceptance. Each report shall be in such form and contain such information as
may be mutually agreed by the parties, including but not limited to, progress to
current scheduled milestones, description of any problems in meeting milestone,
and if problems, proposed recovery methods.
2.3 Agency Approvals. The parties agree that JetFax shall be
----------------
responsible for any and all engineering and development work with respect to the
JetFax Deliverables necessary for obtaining any required governmental or
necessary private agency approvals or certifications for the Product (such as,
by way of example and not limitation, Underwriter's Laboratories, CSA, U.S.
F.C.C. regulations parts 15 and 68) in the United States and Canada. The actual
costs (including protesting consultant fees and expenses and testing costs and
expenses) and filing fees for the submission for such approvals in the United
States and Canada and such other jurisdictions as the parties mutually agree in
writing they shall enter are to be borne by Xerox. In addition to the
foregoing, for the period ending on the date that is 24 months from the
Effective Date, JetFax agrees to use its reasonable efforts to design the JetFax
Deliverables to meet the agency approval requirements of other jurisdictions.
JetFax further agrees to use its reasonable efforts to provide design services
with respect to the JetFax Deliverables, after such 24 month period, if
necessary in conjunction with any changes required by jurisdictions in which
agency approvals have been obtained during such 24 month period. In order for
JetFax to perform its reasonable efforts obligations hereunder, Xerox shall
provide JetFax with customary English language summaries of the specifications
of each individual jurisdiction's requirements where agency approval is to be
sought. Xerox shall provide all reasonable assistance to Jet Fax for obtaining
approvals and certifications, including use by JetFax of any relevant testing,
test results, documents, applications and approvals and certificates with regard
to the Product. Xerox shall bear f he cost of any JetFax travel, lodging and
related expenses incurred in support of approval activities in connection with
the Product. Except as set forth above, all costs for agency approvals for
other jurisdictions shall be borne fully by the party seeking such approvals,
unless otherwise mutually agreed. If is further agreed that after such 24 month
period, JetFax agrees to provide such design services as may be requested by
Xerox to meet the requirements of any jurisdiction. Xerox agrees to compensate
JetFax at customary rates for such design services rendered after the end of
such 24 month period.
2.4 Bill of Materials and Source List Approval. The Bill of Materials and
------------------------------------------
Source List shall be subject to review and approval by Xerox, and all component
vendors providing materials set forth on the Bill of Materials shall be subject
to qualification as a vendor to Xerox under Xerox standards for vendor
certification then in effect. Such approval shall not be unreasonably withheld.
Xerox reserves the right to make final selection of component vendors.
Notwithstanding anything to the contrary contained herein, neither
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such Xerox approval nor such vendor qualification shall be a basis for any
rejection pursuant to Section 4.2(a) or Section 4.3, or condition precedent to,
or a basis for any delay in, Acceptance hereunder and any component vendor
approved and/or qualified by Xerox under or in connection with the Facsimile
Product Development Agreement between the parties dated as of June 9, 1994 shall
be deemed to be approved and qualified by Xerox hereunder.
2.5 Software.Etc. Escrow. Promptly after the Effective Date, JetFax shall
--------------------
place with an independent third party escrow agent acceptable to Xerox one
complete set, under seal, of source code, object code and supporting
documentation for any and all Software, ASICS, FPGAS, and any other programmable
devices (including their schematic capture and VHDL files, their ACTEL files,
test patterns and test parameters and timing diagrams, to the extent available
to JetFax, used to confirm the d6sign) included in the JetFax Deliverables (the
"Escrowed Materials"). The Escrowed Materials shall be retained in strict
confidence by the chosen escrow agent under the terms of the escrow agreement
(which escrow agreement shall be mutually acceptable to both JetFax and Xerox
and consistent with the terms of this Section 2.5) and the escrow agent shall
not disclose the Escrowed Materials to Xerox except pursuant to this Section
2.5. All costs associated with the escrow, including any fees of the escrow
agent, shall be borne by Xerox. In the event one of f he events set forth below
occurs, Xerox may, at its option, notify the escrow agent of such event and
request the release of the Escrowed Materials to Xerox. Xerox shall
simultaneously notify JetFax pursuant to Section 14.11 of this Agreement of such
notification to the escrow agent, specifying the basis upon which such request
for the release of the Escrowed Materials is based. In addition, the escrow
agent shall notify JetFax of the Xerox request for the release of the Escrowed
Materials. The escrow agent shall, only after fen (10) calendar days have
passed from the date Xerox' notice to JetFax hereunder is given (pursuant to
Section 14.11 of this Agreement), release the Escrowed Materials to Xerox unless
such action is prohibited by order of a court of competent jurisdiction. The
only events which shall entitle Xerox to request the release of the Escrowed
Materials are as follows: (i) JetFax ceases to support and maintain the Software
and Hardware Designs as required pursuant to the terms of Section 4.4 of this
Agreement and such failure remains uncured for a period of sixty (CO) days offer
written notice thereof from Xerox, or (ii) the specified items of the Software
or Hardware Designs listed on the Project Schedule to be performed by JetFax
fail to be accepted pursuant to Section 4.2(a) and (b) within ninety (90) days
of the applicable Milestone Dates therefore set forth in the Project Schedule
due primarily to the failure of JetFax to perform its obligations under this
Agreement, or (iii)JetFax grants its prior written consent to such release, or
(iv) a Petition is filed by or against JetFax under Chapter 7 of the Bankruptcy
Act of the United States and such Petition is not discontinued, vacated or
terminated within sixty (60) days. Xerox
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shall use such released Escrowed Materials solely for the purpose of
maintenance and support of the Product or, in the event subparagraph (ii) of
this Section 2.5 shall occur, for the purpose of maintenance, support and
production and Xerox completion of development of the Product and for the uses
stated in the second paragraph of Section 5.1 (b). Any Xerox use of the Escrowed
Materials will be subject at all times to the terms and conditions of this
Agreement. JetFax agrees to update and maintain monthly the Escrowed Materials
held in safekeeping by the selected Escrow Agent to reflect all changes made to
the Escrowed Materials pursuant to the terms of this Agreement.
3. DESIGN REVIEW AND SPECIFICATION CHANGES
3.1 Design Review. The parties agree to promptly meet at the request of
-------------
either party with respect to any material issues a party may have with the
performance of the other party of its obligations under this Agreement.
3.2 Changes to the Specification. Each party is entitled to request
----------------------------
modifications in the form of changes or additions to the Specifications at any
time during the term of this Agreement. Such requests shall be submitted in
writing, and shall not be deemed or considered binding unless accepted by the
other party in writing. If any such modification of the Specifications is
agreed, the parties will negotiate an equitable adjustment to the Agreement,
including the apportionment of any additional development, testing or tooling
costs. Upon mutual agreement to any change to the Specifications, both parties
will proceed with the implementation of the prescribed changes, and the
Specifications and other Exhibits to the Agreement shall be modified accordingly
to reflect such agreed upon changes.
3.3 Modification to Specifications. JetFax and Xerox agree that upon
------------------------------
acceptance of each Deliverable pursuant to Section 4.2 and upon Acceptance the
Specifications shall be modified as necessary to conform to the Deliverables, as
accepted, excepting mutually agreed (in writing) deviations from the
Specification which require additional development work to achieve conformance
to the Specification. After and upon acceptance of each Deliverable pursuant to
Section 4.2 and after and upon Acceptance, the term "Specifications" as used
herein shall refer in all cases to the Specifications as so modified.
4. DELIVERABLES AND DELIVERY; ACCEPTANCE; AND REJECTION
4.1 Deliverables.. Xerox and JetFax agree to use reasonable
-------------
efforts to perform their respective Services and deliver their respective
Deliverables in accordance with the Project Schedule (Exhibit D). Each party's
obligation shall be contingent
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upon the other party successfully providing any prerequisite Deliverable (as
specified in the Project Schedule) in a timely fashion in accordance with the
Specifications for same. All Deliverables shall be delivered by the times set
forth in the Project Schedule and stated dates are date of delivery unless
otherwise specified. The parties shall use such Deliverables for testing and
acceptance and marketing purposes only and shall not sell, lease or transfer the
same to any third party.
4.2 Acceptance.
----------
(a) Each party, with the reasonable assistance of the other party if requested,
will examine and test each respective Deliverable (and/or item thereof) as
specified on the Project Schedule of the other party upon delivery. Each
receiving party shall, as soon as reasonably practicable following the
delivery of same, but in no event later than fifteen (15) business days
offer receipt of notice of delivery: (i) accept the Deliverable (or item
thereof) and so inform the other party in writing; or (ii) if the
Deliverable (or item thereof) contains material Errors, reject f he
Deliverable (or item thereof) and provide the other party with a written
statement of such material Errors. The failure of a party to respond
within the specified fifteen (15) day period shall be deemed acceptance of
the Deliverable (or item thereof), but shall not limit the provisions of
Section 4.4 hereof. Either party may request a reasonable extension in the
time to complete such testing if the same is required under the
circumstances, and both parties shall reasonably consider such requests,
provided that no such extension shall be effective unless in writing and
signed by a duly authorized representative of the party granting such
extension.
(b) The developing party will promptly correct the material Errors set forth in
the statement of material Errors with respect to any Deliverable (or item
thereof) and redeliver the Deliverable (or item thereof) to the receiving
party within such reasonable period of time as may be agreed upon by JetFax
and Xerox with regard to all circumstances affecting the Product or the
Deliverables. The receiving party shall, as soon as reasonably practicable
after such redelivery but in no event later than fifteen (15) business days
thereafter, accept or reject the redelivery in accordance with the
procedure set forth in Section 4.2(a), which procedure shall be repeated
until the Deliverables are accepted or the receiving party invokes the
provisions of Section 4.3 hereof.
(c) "Acceptance" shall be deemed to occur upon the earlier of (i) acceptance,
pursuant to this Section 4.2, of all JetFax and Xerox Deliverables (as
specified in the Project Schedule) or (ii) the first sale, lease, license
or other distribution or transfer of a unit of Product by Xerox to a
customer or other third party other than solely for test purposes. The
date of such Acceptance shall be deemed the "date of Acceptance."
Notwithstanding anything to the contrary contained herein, Acceptance shall
not be conditioned upon any
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design or development of the JetFax Deliverables to meet any criteria of any
agency approvals other than those of the United States or Canada.
(d) The parties further agree that in the event a dispute arises as to whether
any Deliverable (or item thereof) is acceptable under the procedure set
forth in Sections 4.2(a) and 4.2(b), and the parties are unable after good
----
faith negotiation to resolve such dispute, the parties agree to submit the
acceptability of any such Deliverable (or item thereof) to Genoa
Technology, Inc., or other independent third party mutually acceptable to
the parties, who shall test such Deliverable (or item thereof) and
determine if such Deliverable (or item thereof) is acceptable as set forth
in Sections 4.2(a) and 4.2(b). The determination of such independent third
party shall as to the acceptance or rejection of any Deliverable (or item
thereof), be deemed final. The cost, if any, of employing such independent
third party shall be borne by f he losing party.
4.3 Rejection. Should any Deliverable fail to be accepted after the final
delivery of that Deliverable pursuant to Section 4.2(b) then the parties shall
promptly meet in accordance with Section 3.1 to resolve the problem. Any
subsequent rejection of the same Deliverable (unless otherwise resolved pursuant
to Section 4.2(d)) shall be deemed a breach of this Agreement by such delivering
party, and the non-breaching party may elect to terminate this Agreement
pursuant to Section ll.l(a) hereof, or may elect to accept further resubmission
of the applicable Deliverable.
4.4 Error Fixes. JetFax shall at its expense, from the Effective Date
until the date that is eighteen (18) months from the date of Acceptance, use its
reasonable efforts promptly to correct documented and reproducible material
Errors in the Software and Hardware Designs which are reported in writing by
Xerox to JetFax. Provided, however, that prior to Acceptance, this obligation
shall apply only to Deliverables (or items thereof) that have been delivered by
JetFax in accordance with the Project Schedule. Xerox shall provide such
assistance in correction as JetFax may reasonably request. All such corrections
to the Software and Hardware Designs shall be deemed to be included in the
licenses granted under Section 5.1 hereof, and copies of any such corrections
shall be promptly furnished in source code to the escrow agent set forth in
Section 2.5 of this Agreement. JetFax will have no obligation under this
Section 4.4 with respect to any Error in the Software or Hardware Designs caused
by any person or entity other than JetFax or its sources identified on the Bill
of Materials and Source List and JetFax is not obligated to correct any Errors
in the Software unless such Error or defect causes the Software to fail to
function in conformance with the Specifications as defined in Section 3.3
herein.
4.5 JetFax Support. JetFax further acknowledges and agrees that, for a
--------------
period of one (1) year following Acceptance and subject to
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the provisions of this Section 4.5, it shall provide Xerox with such reasonable
engineering support as Xerox shall reasonably request, necessary for the
manufacture of the Product. All travel, lodging and associated expenses (save
salary and benefits of JetFax employees) shall be borne by Xerox. In addition,
after the one (1) year period following Acceptance, Xerox shall pay JetFax the
reasonable and customary personnel, service and related charges for any such
support provided by JetFax.
5 OWNERSHIP RIGHTS AND LICENSES
5.1 Software and Hardware Designs, Etc.
----------------------------------
(a) Subject to the terms and conditions of this Agreement, JetFax hereby grants
to Xerox, effective only upon and after the date of Acceptance, a
nonexclusive, perpetual (except if terminated pursuant to Section 11.1
herein), worldwide license to the Software, the Hardware Designs, and any
other JetFax confidential information disclosed to Xerox under this
Agreement and necessary or useful for the following licensed activities
(and JetFax intellectual property corresponding to the above recited
items), to manufacture or have manufactured, the Product and to use and
distribute and sell and service the Product.
Provided however, if the Escrowed Materials are released to Xerox pursuant to
Section 2.5 of this Agreement, the above license as it applies to the Product
shall automatically extend, if and only if there has not been Acceptance, to
enable Xerox to complete the Product and shall automatically encompass all of
the Escrowed Materials. In such event, the royalty set forth in Section 6.2(a)
of this Agreement in the sum of $21.00 (reduced, if applicable as set forth in
such Section 6.2(a)) shall also apply to such license. In such event, JetFax
shall promptly and fully disclose the fully or partially completed JetFax
Deliverables to Xerox, but shall have no further obligations under Sections 2.1,
2.3, 2.5, 4.1, 4.4 and 4.5 of this Agreement.
(b) The Software and the Hardware Designs are confidential information of
JetFax subject to the CDA defined in Section 8.1 of this Agreement and
shall be used by Xerox solely in connection with the Product in accordance
with the terms of this Agreement. Subject to the terms and conditions of
this Agreement, JetFax hereby grants to Xerox a nonexclusive, perpetual
(except if terminated pursuant to Section 11.2(a) of this Agreement),
worldwide license (with the Xerox right to sublicense Xerox Affiliates) to
the Hardware Designs (excluding the ASICs and the Field Programmable Gate
Arrays (FPGAS) themselves and a majority of the designs of each such ASIC
or FPGA), and any other confidential information of JetFax disclosed to
Xerox under this Agreement (excluding the Software and the above excluded
items) and necessary or useful for the following licensed activities (and
JetFax intellectual property corresponding to the above recited licensed
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items) to manufacture or have manufactured any other products (i.e. products
other than the Product) and to use and distribute and sell and service such
other products. Provided, however, notwithstanding any sublicense made pursuant
to the above right to sublicense, Xerox shall remain fully liable for compliance
with all of its obligations under this Agreement, including without limitation
the payment of all royalties.
Provided however, if the Escrowed Materials are released to Xerox pursuant to
Section 2.5 of this Agreement, the above license of this Section 5.1 (b) shall
automatically extend, if and only if there has not been Acceptance, to include
all fully or partially completed JetFax Deliverables including Software, ASICS,
and FPGAs and shall automatically encompass all of the Escrowed Material. To
the extent that Xerox uses a material amount of such extended materials (not
already included in the license in the immediately preceding paragraph) under
this extended license, Xerox shall be obligated to pay the royalty as set forth
in the last sentence of Section 6.2(b) of this Agreement.
(c) For the confidence period of the CDA defined in Section 8.1 of this
Agreement, Xerox shall not alter, reverse engineer, decompile or
disassemble the Software or the ASICs and the FPGAs included in the
Hardware Designs, and Xerox may copy the Software, the Hardware Designs,
and any other confidential information of JetFax which is disclosed to
Xerox only as necessary for the exercise of the licenses granted in
Sections 5.1 (a) and 5.1 (b) and/or the provisions of Section 2.5. JetFax
retains its ownership rights in and to the Software, Hardware Designs, and
corresponding intellectual property.
(d) Subject to the terms and conditions and for the purposes of this Agreement,
Xerox hereby authorizes JetFax to use the Xerox Deliverables and any other
Xerox confidential information disclosed to JetFax under this Agreement and
necessary or useful for the following activity (and Xerox intellectual
property corresponding to the above recited items) to develop the JetFax
Deliverables. During the term of this Agreement, JetFax may reverse
engineer, decompile or disassemble any software provided by Xerox only as
necessary for f he development of the JetFax Deliverables.
5.2 Product. Xerox retains its ownership rights in and to any and all
intellectual property contained in the Xerox Deliverables.
5.3 Third Party Confidential Disclosure Agreements. Prior to
----------------------------------------------
disclosing any JetFax Deliverables to any third party (including Goldstar) in
connection with Xerox' "have manufactured" license pursuant to Section 5.1 (a),
Xerox shall procure from such third party a Confidential Disclosure Agreement
(substantially similar to the CDA as defined in Section 8.1) naming JetFax and
such third party as parties thereto.
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CONFIDENTIAL TREATMENT REQUESTED = [*]
6. PAYMENTS
6.1 Advance Royalty.
---------------
(a) In consideration for the Services to be performed by JetFax hereunder,
Xerox agrees to pay to JetFax a nonrefundable advance royalty payment of
[*], payable in those increments and upon completion of the C1, C2, C3 and
C4 Milestones as set forth in the Project Schedule set forth in Exhibit D.
(b) JetFax agrees to provide to Xerox, upon request, audited financial
statements for the JetFax accounting year of 1993 as well as quarterly
financial statements (audited if available) for each accounting quarter of
1994 and 1995 (prior to the date of Acceptance). Any and all such
information provided to Xerox shall be deemed Confidential Information
subject to the provisions of the CDA as defined in Section 8.1.
(c) In the event that JetFax fails to meet any of the last three (3) Milestone
Dates set forth in the Project Schedule by more than fifteen (15) calendar
days and such failure is due primarily to the fault of JetFax, the amount
of the incremental advance royalty payment corresponding to such missed
Milestone Date shall be reduced by [*].
6.2 Royalty Payments.
----------------
(a) In further consideration of the Services performed hereunder and the
licenses granted herein by JetFax, Xerox shall pay JetFax a royalty, with
respect to each and any sale, lease, license or other distribution or
transfer of a unit of Product to a customer or other third party (including
any Xerox Affiliates) (and excluding up to [*] production units of Product
to be internally used by Xerox, which units shall be without royalty), in
an amount equal to [*] for each such unit sold, leased, licensed or
otherwise distributed or transferred. [*]
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CONFIDENTIAL TREATMENT REQUESTED = [*]
(b) In further consideration of the Services performed hereunder and the
licenses granted herein, Xerox shall pay JetFax a royalty, with respect to
each and any sale, lease, license or other distribution or transfer to a
customer or other third party (including Xerox Affiliates) of a unit of any
product (other than the Product) with respect to the design or manufacture
of which all or part of that portion of the Hardware Designs licensed to
Xerox pursuant to Section 5.1 (b) and/or any corresponding JetFax
intellectual property, or any of her JetFax confidential information
disclosed to Xerox and/or any corresponding JetFax intellectual property
have been used, in an amount equal to [*] for each such unit sold, leased,
licensed or otherwise distributed or transferred. The above royalty shall
be payable, for JetFax information only if the information used was subject
to Clause 2 of the CDA defined in Section 8.1 of this Agreement when such
information was first communicated to Xerox by JetFax (provided, however,
all parts drawings and schematics for circuit boards are, and shall be,
deemed to have been subject to Clause 2 of the CDA when first communicated
to Xerox by JetFax), and only for units sold, leased, licensed or otherwise
distributed or transferred within five (5) years after the Effective Date
of this Agreement. Two-thirds of such royalties payable by Xerox under
this Section 6.2(b) shall be applied against the prepaid royalty set forth
in Section 6.1 (b) (and the remaining third of such payment shall be made
to JetFax) until such time as the prepaid royalty is fully offset. The
total of all royalties payable pursuant to this Section 6.2(b) shall not
exceed [*] in the aggregate. When the Section 6.2(b) royalties paid to
JetFax reach the sum of [*], the license set forth in Section 5.1 (b) to
Xerox shall automatically become royalty free and paid up. For units sold,
leased, licensed or otherwise distributed or transferred after the five (5)
year period referred to above in this Section 6.2(b), the license to Xerox
set forth in Section 5.1 (b) shall automatically become royalty free and
paid up. No royalties payable pursuant to Section 6.2(a) shall be subject
to, nor included in the calculation of, the royalty cap of this Section
6.2(b). Provided, further, in the event Xerox shall use a material amount
of any of the Escrowed Materials not included in the license under the
first paragraph of Section 5.1 (b) in products under the license set forth
in the second paragraph of Section 5.1(b) of this Agreement, Xerox shall
pay to JetFax the royalty amount set forth in Section 6.2(a) and not the
royalty set forth in this Section 6.2(b) provided however, that for
uncopyrighted and unpatented such materials the sentence "the above
royalty(s) ... of this Agreement," above in this Section 6.2(b) shall
apply.
(c) All royalty payments as specified in Sections 6.2(a) and (b) shall be paid
by Xerox to JetFax monthly until such time as the prepaid royalty is
totally offset pursuant to Section 6.2(a), and quarterly thereafter
(beginning with the first full calendar quarter) within thirty (30) days
after the end of each month or calendar quarter, as applicable and shall be
due and payable with respect to each and all units sold, leased, licensed,
or otherwise distributed or
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transferred, without regard to whether or not Xerox shall have received payment
with respect thereto.
(d) JetFax acknowledges and agrees that Xerox shall have the right, without the
payment of any additional royalty, to remanufacture units of the Product
returned from its customers for any reason, and to resell or release the
same to its customers.
(e) Xerox shall pay to JetFax interest (at the prime rate of interest as
published in the Wall Street Journal Eastern edition on the last business
day of each month plus five percentage points (prime% + 5%)) on any amounts
payable by Xerox to JetFax hereunder if such amounts are not paid within,
five (5) business days of the applicable due date thereof.
7. REPRESENTATIONS AND INDEMNIFICATION
7.1 Representations. Each party represents and warrants that:
---------------
(a) if has full right and authority to enter into this Agreement, to perform
its obligations hereunder; and
(b) if has full right and authority to grant the rights granted to the other
party herein.
7.2 Xerox' Infringement Indemnity.
-----------------------------
(a) Subject to the terms hereof, Xerox agrees to indemnify, defend and hold
JetFax harmless from and against any claim or suit alleging that the Xerox
Deliverables and/or the User Interface (including, without limitations the
interface to the User Interface software as set forth in Exhibit A)
infringes any patent rights, copyrights or other proprietary rights of any
third party when used for their intended purposes in conjunction with the
Product and/or development of the JetFax Deliverables; provided that: (i)
JetFax gives Xerox prompt notice in writing of any such suit and permits
Xerox, through counsel of its choice, to answer the charge of infringement
and defend such claim or suit, (ii) Xerox has sole control of the defense
and all related settlement negotiations, (iii) JetFax has not further
modified or altered the Xerox Deliverables'(other than the User Interface)
following their delivery to JetFax if such claim or suit would have been
avoided if such modification or alteration had not been made, and (iv)
JetFax provides Xerox with the assistance, information and authority to
perform the above. In the event Xerox agrees to settle the suit, both
Xerox and JetFax agree not to publicize the settlement nor to permit the
party claiming infringement to publicize. the settlement without first
obtaining the other party's written permission.
(b) Subject to the terms hereof, JetFax will deliver to Xerox, as developed,
source code of the interface layer between the User Interface software and
the JetFax firmware which implements the
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functionality as set forth in the Specification. Xerox shall use such source
code solely for purposes of conducting an intellectual property infringement
search, shall not disclose such source code to any third party and shall
promptly return such source code to JetFax immediately upon the conclusion of
such search.
7.3 JetFax Indemnify and Related Provisions
---------------------------------------
(a) JetFax Indemnity. Subject to the terms hereof, JetFax agrees
----------------
to indemnify, defend and hold Xerox harmless from and against any claim or suit
alleging that the Software and/or the Hardware Designs provided by JetFax
pursuant to this Agreement when used for their intended purposes in conjunction
with the Product, infringes the patent rights, copyrights or other proprietary
rights of any third party; provided that (i) Xerox notifies JetFax in writing
within fifteen (15) business days of any claim, (ii) JetFax has sole control of
the defense and all related settlement negotiations and (iii) Xerox provides
JetFax with the assistance, information and authority necessary to perform the
above. Notwithstanding the foregoing, JetFax shall have no liability hereunder
for any claim or suit based on (i) modifications or other alterations made to
the Software or the Hardware Designs by a party other than by or for JetFax or
the combination, operation or use of the Software or the Hardware Designs with
other hardware or software not furnished or developed by or for JetFax if such
infringement would have been avoided by the use of the Software and the Hardware
Designs without such modification or alteration or without such other hardware
or software or (ii) any infringement or alleged infringement related to or
arising out of the User Interface (including, without limitation, the interface
to the User Interface software as set forth in Exhibit A) or the Xerox
Deliverables, or (iii) any infringement or alleged infringement of any
proprietary rights of third parties to the extent and for the time period and
activities such proprietary rights are licensed to Xerox. In the event that the
Software or the Hardware Designs are the subject of a claim of infringement for
which JetFax is liable under this Section 7.3(a), JetFax may at its option and
expense (i) modify the same to be non-infringing or (ii) obtain for Xerox a
license (and any royalties required to obtain such license shall be paid by
JetFax) to continue using the same. The provisions of this Section 7.3 state the
entire liability and obligations of JetFax and the exclusive remedy of Xerox
with respect to any infringement or alleged infringement of proprietary rights
by the Software or the Hardware Designs. Except as set forth herein, JetFax
assumes no liability for, and expressly disclaims any liability with respect to,
any infringement or alleged infringement of any proprietary rights by the
Software or the Hardware Designs.
(b) JetFax Right to Use Study. JetFax may conduct a right to use
-------------------------
study with respect to the JetFax Deliverables when used in conjunction with
the Product. If:
(i) prior to one (1) month after the design of the Product is fixed by
Xerox and that fact is disclosed by Xerox to JetFax (and Xerox shall
promptly disclose such fact to JetFax) along
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with Product information reasonably needed by JetFax to conduct its right to use
study (and Xerox shall promptly disclose such information to Jet Fax);
(ii) JetFax identifies unlicensed third party patent(s) which JetFax
reasonably believes will be infringed by use by or for Xerox or its customers of
the Jet Fax Deliverables when used in conjunction with the Product and JetFax
clearly identifies in writing (including patent or application numbers and issue
or filing dates respectively) to Xerox any such patent(s); then the parties
agree as follows. If JetFax is unable to promptly obtain a license under such
patents on reasonable terms (and any royalties or other payments required to
obtain such license shall be paid by JetFax) and the parties are unable to
reasonably design around such patent(s); then the parties shall meet to further
work in good faith to resolve this problem. In the event such resolution cannot
be achieved within one (1) month after the parties first met to further work to
try to resolve the problem, such patent(s) shall be excluded from the indemnity
provided by JetFax in this Section 7.3; however, in such event Xerox shall have
the option to negotiate with JetFax (and JetFax will negotiate in good faith)
for a lower Section 6.2 royalty and/or cancel its Product activities.
7.4 Xerox for the Xerox Deliverables and JetFax for the JetFax
Deliverables, shall promptly identify to the other party any third party patents
known by Xerox for its Deliverables and known by the President and/or CEO of
JetFax for its Deliverables to cover such Deliverables. Each party has disclosed
to the other prior to the Effective Date all such patents known prior to the
Effective Date.
8. CONFIDENTIALITY
8.1 Each party's information disclosed to the other party pursuant to this
Agreement shall be governed by the terms of the "CONFIDENTIAL DISCLOSURE
AGREEMENT" (the "CDA") between the parties attached as Exhibit E and which is
entered into and effective as of the Effective Date of this Agreement.
8.2 The provisions of the CDA are hereby adopted by the parties and shall
remain in full force and effect as a part of this Agreement as though fully set
forth herein.
8.3 Without limitation to any other provision of this Agreement, the CDA
referred to in Section 8.1 applies to all source code and supporting
documentation including concepts and algorithms embedded in the source code. In
addition, Xerox agrees not to make available any part of any program listing
obtained pursuant to Section 2.5 of this Agreement to a third party within the
meaning of the CDA unless that part of the program listing is subject to one or
more provisions of CDA clause 3. (a)- (f), notwithstanding the fact that the
period for this obligation may extend beyond the 3.5 years of the CDA.
14
<PAGE>
8.4 This Agreement shall be deemed Confidential Information and shall not be
disclosed to third parties other than as provided in Section 14.18 of this
Agreement.
9. PROPRIETARY RIGHTS NOTICES
The Product shall bear any and all reasonable and customary proprietary rights
notices associated with or carried by any of the Deliverables. Neither party
will remove, cover or deface any such proprietary rights notices.
10 TERM
This Agreement will commence on the Effective Date and will continue to be in
force and effect until such time as it is otherwise terminated as herein
provided.
11. TERMINATION
11.1 Termination for Cause By Either Party. Either party may
-------------------------------------
terminate this Agreement:
(a) Upon sixty (60) days written notice to the other party in the event the
other party breaches any of its material obligations hereunder and fails to
cure same during the notice period, or if it is not reasonable to expect
such a cure within that period, does not fake effective action within such
period to promptly cure the material breach; or
(b) Upon sixty (60) days written notice to the other party in the event a
petition in bankruptcy or similar debtor protection law is filed by or
against the other party, or if the other party makes an assignment for the
benefit of creditors, or a receiver is appointed, and such events are not
discontinued, vacated or terminated during the notice period.
Xerox may terminate this Agreement in the event JetFax fails to meet any of the
Milestone Dates set forth in the Project Schedule by more than thirty (30)
calendar days and such failure is due primarily to the fault of Jet Fax.
11.2 Effect of Termination.
---------------------
(a) The license set forth in Section 5.1 (b) hereof is perpetual (and shall
survive a termination under Section 1 1.1 of this Agreement), subject, however,
to the royalty obligations of Section 6.2 hereof and all title and
confidentiality provisions of this Agreement, provided, however, that the
license set forth in Section 5.1 (b) is subject to termination upon sixty (60)
days written notice from JetFax to Xerox in the event Xerox breaches any of its
material obligations with respect to such royalty, title or confidentiality
provisions as they apply to such license and fails to cure the same during such
sixty (60) day notice period, or if it is not reasonable to expect such a
15
<PAGE>
cure within that period, does not take effective action within such period to
promptly cure the material breach.
(b) Upon termination of this Agreement each party shall return to the other
party all unlicensed confidential or proprietary information of the other
party and shall make no other or further use of such unlicensed
information. Upon termination of this Agreement pursuant to the second
sentence of Section I 1.1, Xerox shall pay JetFax advance royalty payments
in connection with any Milestones met by JetFax under the Project Schedule
for which JetFax has not yet been paid.
12. RIGHT TO DEVELOP INDEPENDENTLY
Nothing in this Agreement will impair either party's right to acquire, license,
develop, manufacture or distribute for itself, or have others develop,
manufacture or distribute for it, similar technology performing the same or
similar functions as the technology contemplated by this Agreement except as
provided in Sections 5 and 8, or to market and distribute such similar
technology or products.
13. DISCLAIMER OF CONSEQUENTIAL DAMAGES AND IMPLIED WARRANTIES
In no event shall either party be liable to the other for any indirect, special,
incidental or consequential damages for breach of or failure to perform under
this Agreement, even if that party has been advised of the possibility of such
damages. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7.1, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
DELIVERABLE OR OTHERWISE, INCLUDING WITHOUT LIMITATION, THE WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TECHNICAL PERFORMANCE, OR
COMMERCIAL SUCCESS AND HEREBY DISCLAIMS ALL SUCH OTHER WARRANTIES. EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY ASSUMES ANY RESPONSIBILITIES
WHATEVER WITH RESPECT TO THE DEVELOPMENT, MANUFACTURE, USE, SALE, LEASE, OR
OTHER DISPOSITION BY THE OTHER PARTY OR ITS VENDEES OF PRODUCTS INCORPORATING
DELIVERABLES LICENSED OR PROVIDED UNDER THIS AGREEMENT.
14. GENERAL
14.1 Force Maieure Neither party shall be liable for any failure or
-------------
delay in its performance under this Agreement due to causes which are beyond its
reasonable control, including, but not limited to, acts of God, acts of civil or
military authority, fires, epidemics, floods, earthquakes, riots, wars,
sabotage, labor shortages or disputes, and governmental actions; provided that
(a) the delayed party: (i) gives
16
<PAGE>
the other party written notice of such cause promptly, and in any event within
fifteen (15) days of discovery thereof; and (ii) uses its reasonable efforts to
correct such failure or delay in its performance, and (b) the delayed party's
time for performance or cure under this Agreement shall be extended for a period
equal to the duration of the cause or sixty (60) days, whichever is less.
14.2 Relationship of Parties. Xerox and JetFax are independent
-----------------------
contractors. Neither company nor its respective employees, consultants,
contractors or agents are agents, employees or joint venturers of the other, nor
do they have any authority to bind the other by contract or otherwise to any
obligation. They will not represent to the contrary, either expressly,
implicitly, by appearance or otherwise. Each party will determine, in its sole
discretion, the manner and means by which the Services are accomplished, subject
to the express condition that each party will at all times comply with
applicable law.
14.3 Use of Name. Neither party will, without first obtaining the
-----------
other's prior written consent, be entitled to use the name of the other party in
promotional, advertising and other materials other than as provided in Section
14.18 of this Agreement.
14.4 Personnel. The respective employees, consultants, contractors
---------------
and agents of each party will observe the working hours, working rules and
holiday schedule of the other while working on the other's premises.
Notwithstanding the foregoing, employees of a party shall be and remain
employees of that party and shall not be deemed or claim to be employees of the
other party even when working on such other party's premises.
14.5 Employment Taxes and Benefits. Each party shall be responsible
-----------------------------
for any and all employment taxes and benefits payable to its employees,
representatives, contractors, subcontractors and other engaged by it to perform
Services hereunder and in no event shall either party look to the other for such
payments.
14.6 Other Tax Implications. The purpose of development of the
----------------------
Deliverables under this Agreement is to demonstrate that the Product developed
hereunder will conform to the Specifications. The Deliverables have no
intrinsic value as an item. As such, no value added, sales, or use taxes have
been assessed or are anticipated to be required as a result of the Services
performed under this Agreement.
14.7 Export Controls. Both parties shall comply with all
---------------
applicable United States laws and regulations respecting the export, directly or
indirectly, of any technical data acquired from the other under this Agreement
or any product or Deliverables utilizing any such data.
14.8 Assignment. Except as expressly provided herein, neither party
----------
may assign or delegate this Agreement, or any of its respective rights or
17
<PAGE>
obligations hereunder without the prior written consent of the other party
hereto; PROVIDED, however, that JetFax may, without Xerox' consent, assign or
delegate this Agreement and JetFax's rights and obligations hereunder to any
successor in interest to JetFax in connection with any sale or transfer of all
or substantially all of its assets or upon any merger, consolidation, or
dissolution. Either party may, from time to time and upon prior written notice
to the other party, subcontract with one of its subsidiaries for the
performance of certain obligations under this Agreement, provided that the
party so subcontracting shall remain fully liable for performance of its
obligations hereunder. Any attempted assignment in violation of the provisions
of this Section 14.8 shall be void and without force or effect. In the event of
a permitted assignment hereunder, this Agreement or the applicable provisions
shall be binding upon the successors, executors, and assigns of the parties
hereto.
14.9 Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of New York, U.S.A. without giving effect
to the principles of conflicts of law thereunder.
14.10 Severability. If for any reason a court of competent jurisdiction
------------
finds any provision of this Agreement, or portion thereof, to be unenforceable,
that provision of the Agreement shall he enforced to the maximum extent
permissible so as to effect the intent of the parties, and the remainder of this
Agreement shall continue in full force and effect.
14.11 Notices. All notices required or permitted under this Agreement shall
-------
be in writing, reference this Agreement and be deemed given when: (i) delivered
personally; (ii) when sent by confirmed telex or facsimile; (iii) five (5) days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one (1) day after deposit with a commercial
overnight carrier, with written verification of receipts All communications will
be sent to the addresses set forth below. Either party may change its address
by giving notice pursuant to this Section 14.1 1.
JetFax: Xerox:
Mr. Rudy Prince Fred Kiremidjian
President, Jet Fax, Inc. V. P., Engineering
1376 Willow Road 3400 Hillview Avenue
Menlo Park, California 94025 Building 3
Palo Alto, Calif. 94304
With a copy to:
Clifford S. Robbins, Esq.
General Counsel Associates
1891 Landings Drive
Mountain View, California 94043
With a copy to:
Louis S. Faber, Esq.
Xerox Corp. OGC
Xerox Square 21 D
Rochester, N. Y. 14644
18
<PAGE>
14.12 No Waiver. Failure by either party to enforce any provision of this
Agreement shall not be deemed a waiver of future enforcement of that or any
other provision.
14.13 No Rights in Third Parties. This Agreement is made for the benefit of
----------------
Xerox and JetFax and not for the benefit of any third parties.
14.14 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but collectively shall
constitute but one and the same instrument.
14.15 Headings and References. The headings and captions used in this
--------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
14.16 Construction. This Agreement has been negotiated by the parties and
------------
their respective counsel. This Agreement will be fairly interpreted in
accordance with its terms and without any strict construction in favor of or
against either party.
14.17 Trademark Usage. Neither party shall make any use of any trademark,
---------------
service mark or trade name of the other in connection with its advertising,
promotional material or packaging for the Product without first obtaining the
other party's written consent.
14.18 Non-Publicity. Neither party shall directly or indirectly, without f
-------------
he prior written consent of the other party, such consent not to be unreasonably
withheld, make any news release or public announcement or other public
disclosure regarding this Agreement or the existence thereof. Notwithstanding
the foregoing, JetFax shall be free to make disclosures to its shareholders,
directors, officers, employees, attorneys, accountants and other professional
representatives of JetFax and to Ailicec and as necessary or appropriate for
compliance with federal or state securities laws and regulations. It is
JetFax's intent to make confidential factual disclosures, in accordance with the
terms and conditions of this Section 14.18, to a limited number of potential
lenders, investors and underwriters. Neither party shall disclose information
with respect to the other's confidential business plans.
14.19 Complete Agreement. This Agreement, including all Exhibits
------------------
constitutes the entire agreement between the parties with respect to the subject
matter hereof, and supersedes and replaces all prior or contemporaneous
understandings or agreements, written or oral, regarding such subject matter.
No amendment to or modification of this Agreement shall be binding unless in
writing and signed by duly authorized representatives of both parties. To the
extent any terms and conditions of this Agreement conflict with the terms and
conditions of any invoice, purchase order or purchase order acknowledgement
placed hereunder, the terms and conditions of this Agreement shall govern and
control.
19
<PAGE>
14.20 Survival. The provisions of Sections 5.1 (b) (first sentence only),
--------
5.1 (c), 5.2, 8, 11.2, 12 and 13 shall survive the expiration or termination of
this Agreement for any reason.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
JETFAX, INC. XEROX CORPORATION
BY:/s/ Edward R. Prince III BY:/s/ Fred Kiremidjian
NAME: Rudy Prince NAME: Fred Kiremidjian
TITLE: President TITLE: Vice President,
Engineering
20
<PAGE>
A Jet Fax Deliverables
B Xerox Deliverables
C [INTENTIONALLY OMITTED]
D Project Schedule
E Confidential Disclosure Agreement
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
EXHIBIT A
DEVELOPMENT AGREEMENT BETWEEN XEROX CORPORATION AND JETFAX INC.
JETFAX DELIVERABLES
[*]
OTHER
[*]
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
EXHIBIT B
DEVELOPMENT AGREEMENT BETWEEN XEROX CORPORATION AND JETFAX INC.
XEROX DELIVERABLES
[*]
OTHER
Specification
- -------------
[*]
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
EXHIBIT D
DEVELOPMENT AGREEMENT BETWEEN XEROX CORP. AND JETFAX INC.
PROJECT SCHEDULE
C1 MILESTONE - [*]
Xerox Deliverables [*]
JetFax Deliverables [*]
PAYMENT DATE: [*]
C2 MILESTONE - [*]
. Xerox Deliverables: [*]
. JetFax Deliverables: [*]
C3 MILESTONE - [*]
Xerox Deliverables:
. [*]
<PAGE>
CONFIDENTIAL TREATMENT REQUESTED = [*]
Jet Fax Deliverables: [*]
C4 MILESTONE - [*]
Xerox Deliverables: [*]
JetFax Deliverables: [*]
[*]
<PAGE>
EXHIBIT E
DEVELOPMENT AGREEMENT BETWEEN XEROX CORP. AND JETFAX INC.
CONFIDENTIAL DISCLOSURE AGREEMENT
Dated: November 23, 1994
Xerox Corporation (Xerox) of Stamford, Connecticut and JetFax Inc. (JetFax) of
Menlo Park, California, the parties to this Agreement, hereby agree as follows:
1 . To further the business relationship between the parties, and to enable
JetFax to perform its development obligations pursuant to that certain
Development Agreement of even date herewith (the "Development Agreement"), it is
necessary and desirable that each party disclose to the other Confidential
Information relating to the project described in the Development Agreement.
Included within the definition of Confidential Information shall be all source
code provided by either party to the other.
2. The receiving party shall not communicate the disclosing party's
confidential information (all information relating to this project and disclosed
to the receiving party for which the obligations of this Paragraph 2 have not
been terminated by operation of Paragraph 3 hereof to any third party and shall
neither use the disclosing party's Confidential Information nor circulate it
within its own organization except to the extent necessary for the development
work set forth in the Development Agreement or for any purpose the disclosing
party may hereafter authorize in writing or authorizes pursuant to the terms of
the Development Agreement. Disclosures to the receiving party's
subsidiaries and affiliates and consultants and suppliers and software
developers so long as these entities are similarly bound shall not be considered
disclosure to a third party within the meaning of the previous sentence.
3. The obligations of Paragraph 2 hereof shall terminate with respect to
any particular portion of the disclosing party's Confidential Information that:
(a) was in the public domain at the time of disclosing party's communication
thereof to receiving party,
(b) entered the public domain through no fault of receiving party subsequent to
the time of disclosing party's communication thereof to receiving party,
(c) was in receiving party's possession free of. any obligation of confidence
at that time of disclosing party's communication thereof to receiving
party,
(d) was rightfully communicated to receiving party free of any obligation of
confidence subsequent to the time of disclosing party's communication
thereof to receiving party,
(e) was developed by employees or agents of receiving party independently of
and without reference to any disclosing party Confidential Information,
(f) when it is communicated by disclosing party to a third party free of any
obligation of confidence, or
(g) in any event, 3.5 years after the Effective Date as defined in the
Development Agreement.
When and to the extent the obligations of Paragraph 2 shall not apply to a
particular portion of Information because of the operation of Paragraph 3
hereof, such Information is no longer Confidential Information hereunder.
<PAGE>
4. All materials, including, without limitation, documents,
specifications, drawings, software, models, apparatus, sketches, designs, and
lists furnished to receiving party by disclosing party and which are designated
in writing to be the property of the disclosing party shall remain the property
of disclosing party and shall be returned to disclosing party promptly at its
request with all copies made thereof except as disclosing party may otherwise
agree in writing or has otherwise agreed pursuant to the terms of the
Development Agreement to which this CDA is an exhibit.
5. This Agreement shall govern all communications between the parties,
relating to the subject matter of this Agreement that are made from the 20th day
of October, 1994.
6. Communications from disclosing party to personnel and authorized
representatives of receiving party shall not be in violation of the proprietary
rights of any third party.
7. This Agreement shall be construed in accordance with the laws of the
State of New York.
XEROX CORPORATION JETFAX, INC.
By:/s/ Fred Kiremidjian By:/s/ Edward R. Prince III
Fred Kiremidjian Rudy Prince
Vice President, Engineering President
<PAGE>
CONFIDENTIAL DISCLOSURE AGREEMENT
Xerox Corporation (Xerox) of Stamford, Connecticut and JetFax Inc. (JetFax) of
Menlo Park, California, the parties to this Agreement, hereby agree as follows:
1 . To further the business relationship between the parties, and to enable
JetFax to perform its development obligations pursuant to that certain
Development Agreement of even date herewith (the "Development Agreement"), it is
necessary and desirable that each party disclose to the other Confidential
Information relating to this product. Included within the definition of
Confidential Information shall be all source code provided to JetFax by Xerox.
2. The receiving party shall not communicate the disclosing party's
confidential information (all information relating to this project and disclosed
to the receiving party for which the obligations of this Paragraph 2 have not
been terminated by operation of Paragraph 3 hereof to any third party and shall
neither use the disclosing party's Confidential Information nor circulate it
within its own organization except to the extent necessary for the development
work set forth in the Development Agreement or for any purpose the disclosing
party may hereafter authorize in writing or authorizes pursuant to the terms of
the Development Agreement to which this Confidential Disclosure Agreement is an
Exhibit. Disclosures to the receiving party's subsidiaries and affiliates and
consultants and suppliers and software developers so long as these entities are
similarly bound shall not be considered disclosure to a third party within the
meaning of the previous sentence.
3. The obligations of Paragraph 2 hereof shall terminate with respect to
any particular portion of the disclosing party's Confidential Information that:
(a) was in the public domain at the time of disclosing party's communication
thereof to receiving party,
(b) entered the public domain through no fault of receiving party subsequent to
the time of disclosing party's communication thereof to receiving party,
(c) was in receiving party's possession free of any obligation of confidence at
that time of disclosing party's communication thereof to receiving party,
(d) was rightfully communicated to receiving party free of any obligation of
confidence subsequent to the time of disclosing party's communication
thereof to receiving party,
(e) was developed by employees or agents of receiving party independently of
and without reference to any disclosing party Confidential Information,
(f) when it is communicated by disclosing party to a third party free of any
obligation of confidence, or
(g) in any event, 3.5 years after the Effective Date as defined in the
Development Agreement.
When and to the extent the obligations of Paragraph 2 shall not apply to a
particular portion of Information because of the operation of Paragraph 3
hereof, such Information is no longer Confidential Information hereunder.
4. All materials, including, without limitation, documents,
specifications, drawings, software, models, apparatus, sketches, designs, and
lists furnished to receiving party by disclosing party and which are designated
in writing to be the property of the disclosing party shall remain the
<PAGE>
property of disclosing party and shall be returned to disclosing party promptly
at its request with all copies made thereof except as disclosing party may
otherwise agree in writing or has otherwise agreed pursuant to the terms of the
Development Agreement to which this CDA is an exhibit.
5. This Agreement shall govern all communications between the parties,
relating to the subject matter of this Agreement that are made from the 20th day
of October, 1994.
6. Communications from disclosing party to personnel and authorized
representatives of receiving party shall not be in violation of the proprietary
rights of any third party.
7. This Agreement shall be construed in accordance with the laws of the State of
New York.
XEROX CORPORATION JETFAX, INC.
By:/s/ Fred Kiremidjian By:/s/ Edward R. Prince III
Fred Kiremidjian Rudy Prince
Vice President, Engineering President
<PAGE>
EXHIBIT 10.36
[*] = CONFIDENTIAL TREATMENT REQEUSTED
REDACTED
REV G (3/18/97)
MASTER DEVELOPMENT, PURCHASE AND DISTRIBUTION LICENSE AGREEMENT
THIS AGREEMENT is between JETFAX INC., a Delaware corporation having its
principal place of business at 1376 Willow Road, Menlo Park, California 94025
("JetFax"), and HEWLETT-PACKARD COMPANY, a California corporation with offices
at 3000 Hanover Street, Palo Alto, California 94304 ("HP"). This Agreement is
effective as of January 31, 1997 (the "Effective Date").
AGREEMENT
1. DEFINITIONS.
1.1 ACCEPTANCE CRITERIA means mutually acceptable final performance
criteria that the parties agree will be used to determine whether the JetFax
Software and Hardware Design Package performs at a level acceptable for
inclusion in the mass marketed HP Product.
1.2 DATE OF FIRST COMMERCIAL SHIPMENT means the date HP first ships a
Royalty Generating Unit.
1.3 DATE OF FIRST MASS PRODUCTION means the date of the first production
run of the HP Product whereby the result of such run is intended to be Royalty
Generating Units.
1.4 DEVELOPMENT PROJECT means JetFax's efforts to modify its existing
JetFax Software and JetFax Formatter along with JetFax's development of the HP
Exclusive Features all of which is more fully described in EXHIBIT A ("HP
Product Technical System Specification") and scheduled per EXHIBIT B
("Development Schedule") such that they can be integrated for use in the HP
Product.
1.5 DEVELOPMENT SCHEDULE means the list of JetFax milestones and targeted
delivery dates set forth in EXHIBIT B ("Development Schedule").
1.6 ERROR(S) means a defect in the JetFax Firmware, the [*] or the JetFax
Formatter which causes such JetFax Firmware, [*] or JetFax Formatter not to
operate substantially in accordance with the applicable Acceptance Criteria.
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQEUSTED
1.7 HARDWARE DESIGN PACKAGE means the schematics, bill of materials and
associated documentation for the JetFax Formatter (however, the Hardware Design
Package shall not include the design schematics for the JetFax ASICs). Any
modified version of a Hardware Design Package shall be handled in accordance
with the terms and conditions of this Agreement which apply to the Hardware
Design Package.
1.8 HP EXCLUSIVE FEATURE(S) shall mean those feature(s) identified as
exclusive to HP and listed in EXHIBIT A ("HP Product Technical System
Specifications") that are developed by JetFax at the request of HP and that the
parties have agreed will be exclusively licensed to HP while such feature(s)
continue to qualify as "HP Exclusive Feature(s)."
1.9 HP PRODUCT means the HP developed hardware product for which JetFax
undertakes the Development Project and that uses the JetFax Formatter
technology, JetFax ASICs, JetFax Firmware, [*] along with HP Exclusive Features
as described in EXHIBIT A ("HP Product Technical System Specification").
1.10 HP TRADEMARKS means (a) the HP-supplied trademarks, stylistic marks
and distinctive logotypes set forth in EXHIBIT E ("Trademarks") and (b) other
mutually agreed upon marks and logotypes as HP may from time to time designate
in writing during the term of this Agreement.
1.11 JETFAX ASICS means the Application Specific Integrated Circuits
designed by JetFax and made available to HP pursuant to this Agreement.
1.12 JETFAX DELIVERABLES means those items described in the Software
description section listed in EXHIBIT A ("HP Product Technical System
Specifications") that JetFax shall deliver to HP pursuant to this Agreement,
including but not limited to, the Hardware Design Package, the HP Exclusive
Features, the JetFax Formatter, the JetFax ASICs, and the JetFax Software and
Updates.
1.13 JETFAX DOCUMENTATION means the JetFax supplied online user manual for
the JetFax Software and JetFax ASICs.
1.14 JETFAX FORMATTER means the JetFax formatter (exclusive of the JetFax
ASICs), or any modified version thereof, which executes or operates with the
JetFax Firmware.
1.15 JETFAX SOFTWARE means (a) the JetFax Firmware, (b) [*] and (c) any
changes to the above listed software which JetFax may supply to HP.
2.
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
1.15.1 JETFAX FIRMWARE means (a) all or any portion of the JetFax
controller computer programs, compilations thereof, and all associated
documentation which functionality is described in EXHIBIT A ("HP Product
Technical System Specification"), ported by JetFax to the HP Product, and
provided by JetFax to HP pursuant to this Agreement and (b) any changes to such
firmware which JetFax may supply to HP.
1.15.2 [*] means (a) all or any portion of JetFax's computer
programs and all associated end user documentation commonly known as [*] listed
and described in the Software section of EXHIBIT A ("HP Product Technical System
Specification") provided by JetFax to HP and (b) any changes to such software
which JetFax may supply to HP.
1.16 JETFAX TRADEMARKS means (a) the JetFax-supplied trademarks, stylistic
marks and distinctive logotypes set forth in EXHIBIT E ("Trademarks") and (b)
other mutually agreed upon marks and logotypes as JetFax may from time to time
designate in writing during the term of this Agreement.
1.17 ROYALTY GENERATING UNIT means [*]
1.18 TESTING CRITERIA means mutually acceptable working test plans and
procedures that the parties agree will be used to determine the acceptability of
the interim JetFax Deliverables upon delivery pursuant to the Development
Schedule.
1.19 UPDATES means updated versions of JetFax Software which include all
changes, alterations, corrections and enhancements to such JetFax Software which
JetFax makes generally available to its licensees and that are not provided to
any particular JetFax OEM customer as a feature exclusive to such OEM.
2. LICENSE GRANTS.
2.1 MANUFACTURE AND DISTRIBUTION OF JETFAX FORMATTER. Subject to HP's
compliance with the terms of this Agreement and effective upon HP's final
acceptance of the JetFax Deliverables, JetFax hereby grants to HP a worldwide,
non-exclusive, non-transferable license to (i) manufacture (and have
manufactured), and (ii) market, use, sell and otherwise distribute the JetFax
Formatter, directly and indirectly through HP's usual distribution channels.
The licenses granted above are only for use in connection with the HP Product
specified herein, for the purpose of interfacing the JetFax Firmware to the HP
Product, and to use the Hardware Design Package in connection with such
3.
<PAGE>
activities. HP agrees that it shall keep the Hardware Design Package
confidential and shall ensure that the same degree of care is used to prevent
the unauthorized use, dissemination or publication of the Hardware Design
Package as HP would use to protect similar information owned by HP.
2.2 PURCHASE AND DISTRIBUTION OF JETFAX ASICs.
2.2.1 THIRD-PARTY MANUFACTURER. JetFax shall enter into agreements
with certain HP-qualified ASIC manufacturers authorizing such manufacturers to
manufacture and sell JetFax ASICs directly to HP, and upon HP's request provide
documentation of such authorization. In addition, in connection with such
agreements, JetFax shall provide engineering support and documentation to such
HP-qualified ASIC manufacturers as reasonably required to enable such
manufacturers to meet their delivery requirements with HP. HP may purchase
JetFax ASICs only from such authorized HP-qualified ASIC manufacturers, and any
such purchases made by HP shall be subject to the terms and conditions agreed
upon by HP and such authorized HP-qualified ASIC manufacturer.
2.2.2 DISTRIBUTION. Subject to HP's compliance with the terms of
this Agreement, JetFax hereby grants HP the right to distribute the JetFax ASICs
as part of the HP Product described herein and to distribute the JetFax ASICs as
spare or replacement parts for the HP Product described herein. HP shall not
distribute JetFax ASICs in any other manner without JetFax's prior written
approval for such distribution.
2.2.3 ENGINEERING CHANGES. Subsequent to the acceptance of final
mask for first production, JetFax will not make changes to the ASICs without the
prior written consent of HP. In the event that circumstances beyond reasonable
control of the parties require changes after the acceptance date of final mask
for first production, the parties will promptly meet and determine, in good
faith, the appropriate changes and timing of such changes.
2.3 REPRODUCTION AND DISTRIBUTION OF JETFAX FIRMWARE. Subject to HP's
compliance with the terms of this Agreement, JetFax hereby grants to HP a
worldwide, non-exclusive, non-transferable license to use, reproduce and
distribute directly and indirectly, through HP's usual distribution channels,
the object code version of the JetFax Firmware and JetFax Firmware Updates as a
part of the HP Product or for repair and maintenance of such product.
2.4 REPRODUCTION AND DISTRIBUTION OF JETFAX DOCUMENTATION. Subject to
HP's compliance with the terms of this Agreement, JetFax hereby grants to HP a
worldwide, non-exclusive, non-transferable license to use, modify, reproduce and
distribute directly and indirectly, through HP's usual distribution channels,
the JetFax Documentation as a part of the HP Product or in conjunction with such
product.
4.
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[*] = CONFIDENTIAL TREATMENT REQUESTED
2.5 DISTRIBUTION OF HP EXCLUSIVE FEATURES. Subject to HP's compliance
with the terms of this Agreement, JetFax hereby grants to HP, [*]
2.6 REPRODUCTION AND DISTRIBUTION OF [*] Subject to HP's compliance with
the terms of this Agreement, JetFax hereby grants to HP a worldwide, non-
exclusive, non-transferable license to, (a) use, reproduce and distribute,
directly and indirectly, through HP's usual distribution channels, [*] and the
[*] only as part of, or bundled with the HP Product; and (b) sublicense the [*]
to end users for installation with an already installed HP Product.
2.7 END USER LICENSES. JetFax is responsible for embedding the HP
Standard Software License Terms as an essential step in the installation of the
Software to ensure end user receipt of the HP Standard Software License, such
license to include terms and conditions substantially equivalent to those set
forth in EXHIBIT F ("HP Software License Terms") to this Agreement. The terms
of such license will be drafted so as to apply to the JetFax Software.
3. DEVELOPMENT. Subject to the terms of this Agreement and the timely receipt
of all associated HP deliverables, JetFax will, in a timely and professional
manner, initiate the Development Project, staff the Development Project as
required, and use reasonable efforts to achieve the milestones listed in the
Development Schedule on or before the dates associated with each such milestone.
HP agrees to designate a technically qualified person to respond to information
requests by JetFax who, when so requested by JetFax, shall use his or her best
efforts to respond.
4. DELIVERY, TESTING AND ACCEPTANCE.
4.1 HP DELIVERABLES. HP shall promptly provide JetFax with an appropriate
number of development HP Products, and any additional software, equipment and
documentation, if any, as necessary for JetFax to complete the Development
Project and for testing and support of the JetFax Firmware in accordance with
Section 4.3 ("Testing")
5.
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[*] = CONFIDENTIAL TREATMENT REQEUSTED
below. All equipment loaned by HP to JetFax shall remain the property of HP and
shall be fully insured by JetFax. HP recognizes that an equipment failure could
result in a delay in the Development Schedule and, while such equipment is in
the possession of JetFax, HP shall assist in maintaining the same in good
working order. At JetFax's request during the term of JetFax's warranty and
continuing support activities hereunder, HP will continue to ensure that at
least one unit on loan to JetFax is the then current production unit of the HP
Product which HP is actually shipping.
4.2 JETFAX DELIVERABLES. JetFax will use commercially reasonable efforts
to provide HP with the JetFax Deliverables as described in EXHIBIT A ( "HP
Product Technical System Specification") in accordance with the Development
Schedule as detailed in EXHIBIT B ("Development Schedule"). At JetFax's option,
the JetFax Deliverables will be delivered telephonically from JetFax's place of
business to an HP server in California, provided that JetFax bears the costs of
such telephonic transmission to such server. For purposes of tax documentation,
coincident with the telephonic transmission of such deliverable items JetFax may
send to HP a certificate containing the date of transmission, the time of such
transmission, the name(s) of JetFax personnel who made the transmission, the
signature(s) of such personnel and a general description of the nature of the
item(s) transmitted sufficient to distinguish the transmission from other
transmissions. Within fifteen (15) days of receipt of the certificate, HP shall
return such certificate to JetFax, identifying the HP personnel who received
such transmission and, if the information on such certificate is true and
accurate, supply the signature of such receiving personnel verifying the
occurrence of the transmission.
4.3 TESTING.
4.3.1 DEVELOPMENT OF TEST PLAN. The parties will work in good faith
to develop the Testing Criteria. HP or its manufacturing partner will be
responsible for most of the hardware tests and design issues related to very
high-volume production, and for testing the mechanical performance of the HP
Product. In addition, HP or its manufacturing partner will also test
environmental and reliability standards of the HP Product.
4.3.2 INTERIM PERFORMANCE TESTING. Upon JetFax's delivery of each
interim JetFax Deliverable listed in the Development Schedule, HP [*] in
accordance with the applicable Testing Criteria, for conformity with the
applicable Acceptance Criteria and the Testing Criteria. HP shall inform JetFax
of the results of such testing and, if HP is unable to accept the interim JetFax
Deliverables, the basis for a finding of nonconformity or failure of such
interim JetFax Deliverables to conform to the Testing Criteria. JetFax shall use
reasonable efforts to promptly correct nonconformities and resubmit the same for
6.
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[*] = CONFIDENTIAL TREATMENT REQEUSTED
retesting by HP. This process shall continue until HP accepts such interim
JetFax Deliverable, or terminates under section 12.2.2.
4.4 FINAL ACCEPTANCE. The JetFax Deliverables shall conform to
specifications in EXHIBIT A ( "HP Product Technical System Specifications") and
meet the Acceptance Criteria. HP shall have [*]
4.5 COMPLIANCE AND CERTIFICATION. HP shall be responsible for all
compliance testing and certification, in the U.S. and internationally, for
safety, emissions, ESD and other required standards, including but not limited
to "Public Telephone and Telegraph" (PTT) testing and approvals.
Notwithstanding the above, JetFax shall be responsible for [*] JetFax and HP
will work together to take corrective actions required for problems found in
such testing and JetFax shall make reasonable changes to its designs and
software as required. All costs for compliance testing and certifications,
including
7.
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[*] = CONFIDENTIAL TREATMENT REQEUSTED
travel and other reasonable expenses of JetFax personnel requested by HP to
participate in such testing or certification, shall be paid by HP.
5. PAYMENTS.
5.1 NON-RECURRING ENGINEERING FEES. As and upon HP's acceptance of each
deliverable in accordance with the milestones listed in EXHIBIT B ("Development
Schedule"), HP shall pay JetFax a non-recurring engineering fee equal to the
amount associated with each such milestone. Notwithstanding the failure of
JetFax to meet such individual milestones, HP shall nonetheless be obligated to
pay to JetFax the associated non-recurring engineering milestone payments on the
targeted date of completion if JetFax's failure to complete the milestone by the
listed date is due to a failure by HP or its designated suppliers, to provide
material support, data and deliverables in a timely manner and HP has received
prompt written notice from JetFax upon JetFax's discovery that such failure by
HP would, in fact, result in JetFax's inability to complete the milestone by the
listed date.
5.2 ROYALTIES.
5.2.1 PREPAID ROYALTIES. HP shall pay to JetFax the following
refundable prepaid royalties in advance of actual sales of the HP Product
according to the following schedule:
Prepaid
Payment Targeted Date Royalty
Number Milestone of Completion Amount
- ------ --------- ------------- ------
[*] [*] [*] [*]
TOTAL PREPAID ROYALTIES [*]
[*]
8.
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[*] = CONFIDENTIAL TREATMENT REQUESTED
[*]
The prepaid royalties shall be recovered by HP at the rate of [*]
5.2.2 ROYALTY RATE. HP shall pay JetFax a royalty of (i) [*]
5.2.3 WHEN ROYALTIES EARNED. Each royalty due hereunder shall be
earned on the date the Royalty Generating Unit is shipped.
5.3 TAXES. License fees and prices to HP do not include taxes of any
nature. HP will pay ordinary sales and property taxes where applicable when
invoiced by JetFax or will supply appropriate tax exemption certificates in a
form satisfactory to JetFax. Under no circumstances will either party be
responsible for the other parties' income tax, franchise tax or other similar
tax liability.
5.4 PAYMENT TERMS. All payments hereunder shall be in U.S. dollars and
shall be paid by HP's U.S. corporate entity. HP shall make payments required
hereunder, without deduction of any tax, duty, fee or commissions. All NRE
payments and prepaid royalties due in accordance with the terms of the Agreement
shall be paid [*] after the completion of the applicable milestone. All
royalties due in accordance with the terms of the Agreement shall be paid within
[*] after the end of each HP fiscal quarter in which they occur. With each
royalty payment HP shall include a written summary of the records described in
Section 6.1 ("Records") below, broken out by month of sale. [*] Such oral
communication shall be subject to final adjustment by HP at the end of each
accounting period.
9.
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[*] = CONFIDENTIAL TREATMENT REQUESTED
6. RECORDS AND AUDIT.
6.1 RECORDS. HP shall maintain a complete, clear and accurate record of
the number of Royalty Bearing Units shipped during the fiscal quarter, and any
other information which may be required to determine whether HP is paying the
correct royalty amount hereunder.
6.2 RIGHT OF AUDIT. To ensure compliance with the terms of this
Agreement, JetFax shall have the right to have an inspection and audit of all
the relevant accounting and sales books and records of HP conducted by an
independent audit firm reasonably acceptable to both parties whose fee is paid
by JetFax, and shall be conducted during regular business hours at HP's offices
and in such a manner as not to interfere with HP's normal business activities.
In no event shall audits be made hereunder more frequently than every twelve
(12) months. If such inspections should disclose any underreporting, HP shall
promptly pay JetFax such underpayment amount, and if such inspections should
disclose any overreporting, JetFax shall promptly pay HP such overpayment
amount. In the event such auditor's inspection shows a five percent (5%) or
greater underreporting, HP shall pay such auditor's fees and expenses for such
audit.
7. TRAINING AND SUPPORT.
7.1 TRAINING AND SUPPORT. JetFax agrees to provide the training,
technical assistance and manufacturing support described in EXHIBIT C ("Training
and Support").
7.2 SUPPORT OF JETFAX FIRMWARE AND [*] HP shall be free, without
additional payments to JetFax, to distribute to existing customers using the HP
Product only, revisions to the [*] through its distribution channels, via its
websites or its other normal distribution methods. Following the expiration of
the relevant Warranty Period (as defined in Section 13.1 ("Performance
Warranty"), for up to [*] following the Date of First Commercial Shipment,
JetFax will provide to HP those Updates to the JetFax Software that HP requests
in accordance with the continuing support terms attached hereto as EXHIBIT C
("Training and Support"). HP agrees that all contact regarding continuing
support services shall be handled through up to three designated HP contacts to
be specified by HP.
7.3 END USER SUPPORT. HP will have the sole responsibility for supporting
its end users and will provide end users with reasonable end user documentation,
warranty service, and telephone support for the use of HP Product consistent
with HP's practice for supporting its other products.
8. MARKETING OBLIGATIONS.
10.
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[*] = CONFIDENTIAL TREATMENT REQUESTED
8.1 PUBLICITY. Within [*] following the date HP first announces the HP
Product, the parties shall issue a press release, the terms of which are
mutually acceptable to both HP and JetFax.
8.2 JETFAX AFTER MARKET PRODUCTS. HP shall, in good faith, assist JetFax
in marketing certain JetFax after market products through [*]to end users of the
HP Product.
9. PROPRIETARY RIGHTS.
9.1 OWNERSHIP. The parties acknowledge that the other party and its
suppliers have and retain exclusive ownership of all their respective
trademarks, logos and product names, and all rights, title and interest,
including all trademarks, copyrights, patents, mask work rights, trade names,
trade secrets and other intellectual property rights to all of the documentation
and computer-recorded data comprising or included in the JetFax Deliverables
with respect to JetFax ownership and the HP Product other than the JetFax
Deliverables with respect to HP ownership. All related ideas, developments,
concepts, techniques, know-how, trade secrets and inventions which are conceived
or reduced to practice during the course of this Agreement shall belong
exclusively to the developing party. Except for the rights expressly enumerated
herein, HP is not granted any rights to patents, mask work rights, copyrights,
trade secrets, trade names, trademarks, or any other rights, franchises or
licenses with respect to the JetFax Deliverables. In the event that HP obtains
the source code versions of the JetFax Deliverables and related materials
pursuant to Section 10 ("Escrow"), HP agrees that such source code and related
materials will be protected as JetFax Deliverables hereunder and that it will
not publish, disclose or otherwise divulge such source code and related
materials to any person, except officers, employees and independent contractors
of HP who have entered into non-disclosure agreements at least as protective of
JetFax's proprietary rights as set forth herein and need access to such source
code or related materials to perform their duties, at any time, either during
the term or after the termination of this Agreement.
9.2 NO SOURCE CODE. HP specifically acknowledges that no rights, other
than those contained in Section 10 ("Escrow"), to the human readable, source
code versions of the JetFax Software are granted to it (except resource source
files and message string source files for both host based software and device
firmware for translation purposes only). HP agrees that it will not attempt to
reverse engineer, reverse compile, disassemble or otherwise attempt to create
source code which is derived from the JetFax Software provided to HP solely in
object code form during the term of this Agreement so long as this agreement
remains in force and for one year following termination. In addition, HP shall
not reverse engineer the JetFax ASICs or any portion thereof so long as this
agree-ment remains in force and for one year following termination.
Notwithstanding the above, the parties agree that HP will use, and it shall not
be considered a breach of this
11.
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Section 9.2 to employ, in conjunction with JetFax, ordinary techniques available
to debug and resolve problems with the JetFax Software.
9.3 PROPRIETARY NOTICES. HP agrees as a condition of its rights
hereunder, not to remove or deface appropriate proprietary JetFax notices
appearing on the JetFax Deliverables for all HP internal distribution
activities. HP further agrees, to reproduce, in accordance with EXHIBIT E
("Trademarks"), appropriate JetFax copyright notices on the JetFax Software, the
software media, and in any electronic distribution of software, such as drivers
or updates.
9.4 RESTRICTED RIGHTS. The JetFax Software is a "commercial item," as
that term is defined at 48 C.F.R. 2.101 (OCT 1995), consisting of "commercial
computer software" and "commercial computer software documentation," as such
terms are used in 48 C.F.R. 12.212 (SEPT 1995). Consistent with 48 C.F.R.
12.212 and 48 C.F.R. 227.7202-1 through 227.7202-4 (JUNE 1995), HP will identify
and license the JetFax Software to U.S. Government end users (i) only as a
commercial end item and (ii) with only those rights as are granted to all other
end users pursuant to the terms and conditions herein. In the event that HP
receives a request from any agency of the U.S. Government to provide the JetFax
Software with rights beyond those set forth above, HP will notify JetFax of the
scope of rights requested and the agency making such request and JetFax will
have five (5) business days to, in its sole discretion, accept or reject such
request.
9.5 FOREIGN GOVERNMENT AGREEMENTS. HP will take commercially reasonable
steps in making proposals and agreements with foreign governments other than the
United States which involve the JetFax Software and related documentation to
strive for the objective that JetFax's proprietary rights in such JetFax
Software and related documentation receive the maximum protection available from
such foreign government for commercial computer software and related
documentation developed at private expense.
10. ESCROW. Concurrently with execution of this Agreement, JetFax , HP and an
escrow agent mutually acceptable to both parties (the "Escrow Agent") shall
enter into an escrow agreement (the "Escrow Agreement") which provides for
JetFax's delivery of the source code version of the JetFax Software and the
specifications of the JetFax ASICs (the "Escrowed Material") to the Escrow Agent
upon execution of this Agreement and periodically thereafter as JetFax provides
new releases of the JetFax Software to HP in accordance with the terms hereof
and release of the Escrowed Material upon the occurrence of release conditions
to be set forth in the Escrow Agreement. A copy of the Escrow Agreement is
attached hereto as EXHIBIT D ("Escrow Agreement").
12.
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[*] = CONFIDENTIAL TREATMENT REQEUSTED
11. LICENSE TO USE TRADEMARKS.
11.1 HP'S USE OF TRADEMARKS. HP agrees that it will permanently include
JetFax Trademarks, in a form similar to those included in EXHIBIT E
("Trademarks"), on all copies of the JetFax Software and JetFax ASICs. HP also
agrees that it will include the JetFax and JetSuite brand names, in a form
similar to those included in EXHIBIT E ("Trademarks"), along with HP logos in
splash screens, installation screens, about boxes, demo pages, help tutorials,
manuals, media labels and marketing collaterals.
11.2 OWNERSHIP OF TRADEMARKS. HP acknowledges the ownership of the JetFax
Trademarks in JetFax. HP agrees that it will do nothing inconsistent with such
ownership and that all use of JetFax Trademarks by HP shall inure to the benefit
of and be on behalf of JetFax. HP acknowledges that JetFax Trademarks are valid
under applicable law and that HP's utilization of such JetFax Trademarks will
not create any right, title or interest in or to such trademarks. HP
acknowledges JetFax's exclusive right to use of JetFax Trademarks and agrees not
to do anything contesting or impairing the trademark rights of JetFax. Any use
of JetFax trademarks must identify JetFax as the owner of such trademarks. HP
agrees that JetFax will use and reproduce the HP Trademarks for inclusion in the
JetFax Deliverables. JetFax acknowledges the validity of the HP Trademarks and
agrees the JetFax's utilization of such HP Trademarks will not create any right,
title or interest in or to such trademarks. JetFax and HP agree that no usage
of Trademarks or commitments in this section shall extend beyond the scope of
activity envisioned by this Agreement.
11.3 QUALITY STANDARDS. JetFax is familiar with and approves of the
quality of HP hardware products that are similar to the HP Product. The quality
of the HP Product sold in connection with the JetFax Trademarks shall be
substantially the same as the quality of such other HP hardware products.
12. TERM AND TERMINATION.
12.1 TERM. The initial term of this Agreement shall be [*] from the
Effective Date, unless this Agreement is earlier terminated pursuant to Section
12.2.
12.2 TERMINATION.
12.2.1 TERMINATION FOR CAUSE. A party may terminate this Agreement
in the event of any material breach by the other party which continues uncured
after [*] written notice by the non-breaching party of said breach (which notice
shall, in reasonable detail, specify the nature of the breach) to the breaching
party.
13.
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[*] = CONFIDENTIAL TREATMENT REQUESTED
12.2.2 TERMINATION FOR CONVENIENCE. Subject to the provisions of
Section 12.3.6, HP may terminate this Agreement without cause upon [*] written
notice to JetFax.
12.3 OBLIGATIONS ON TERMINATION OR EXPIRATION. Upon termination or
expiration of this Agreement:
12.3.1 LICENSES TERMINATED. The licenses granted pursuant to
Section 2 ("License Grants") shall terminate immediately.
12.3.2 CONTINUED SUPPORT; RETURN OR DESTRUCTION OF JETFAX
DELIVERABLES. Except in the case where this Agreement is terminated prior to
the Date of First Commercial Shipment, HP shall have the right to retain a
reasonable number of copies of the JetFax Software and use such JetFax Software
only to the extent required for support and maintenance purposes. HP will
immediately discontinue use (except as set forth in the preceding sentence) and
distribution of, and return or destroy all copies of the JetFax Deliverables in
its possession (including copies placed in any storage device under HP's
control). Upon JetFax's request, HP shall warrant in writing to JetFax its
return or destruction of all of JetFax's proprietary information within thirty
(30) days of termination or expiration.
12.3.3 CONTINUED USE BY END USERS. End users shall be permitted the
continued and uninterrupted use of the JetFax Software for the balance of the
term of their end user agreements, as specified in such agreements, provided
that and so long as the end users are not in default of their end user
agreements.
12.3.4 DEFAULT BY END USERS. HP's rights upon default of the end
users relating to the JetFax Software, as specified in the end user agreement,
shall automatically be assigned to JetFax to the extent relevant to the
enforcement by JetFax of the proprietary rights of JetFax and/or its suppliers
in the JetFax Software.
12.3.5 SURVIVAL OF TERMS. The parties' rights and obligations set
forth in Section 9 ("Proprietary Rights"), Section 12.3 ("Obligations on
Termination or Expiration"), Section 13.2 ("Limitation on Warranties"), Section
14 ("Indemnification"), Section 15 ("Limitation of Liability") and Section 16
("General") shall continue after the termination or expiration of this
Agreement.
12.3.6 LIQUIDATED DAMAGES. HP AND JETFAX HEREBY ACKNOWLEDGE AND
AGREE THAT IT WOULD BE IMPRACTICAL AND/OR EXTREMELY DIFFICULT TO FIX OR
ESTABLISH THE ACTUAL HARM SUSTAINED BY JETFAX AS A RESULT OF THE TERMINATION OF
THIS AGREEMENT DURING THE DEVELOPMENT PERIOD OR THEREAFTER, AND THAT THE DAMAGES
LISTED BELOW ARE A REASONABLE
14.
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APPROXIMATION THEREOF. IN THE EVENT THAT THIS AGREEMENT IS TERMINATED BY HP FOR
CONVENIENCE PURSUANT TO SECTION 12.2.2 ABOVE, HP SHALL PAY JETFAX THE FOLLOWING:
1) [*]
2) [*]
3) [*]
IN THE EVENT THAT THIS AGREEMENT IS TERMINATED BY HP FOR CAUSE UNDER SECTION
12.2.1, HP SHALL PAY THE FOLLOWING:
1) [*]
2) [*]
Milestone Targeted Date
Number Milestone of Completion Amount
- ------------ --------- ------------- ------
[*] [*] [*] [*]
IN THE EVENT THAT JETFAX TERMINATES THIS AGREEMENT FOR HP'S MATERIAL BREACH
PURSUANT TO SECTION 12.2.1, JETFAX SHALL, [*]
15.
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[*] = CONFIDENTIAL TREATMENT REQEUSTED
[*] HP AND JETFAX AGREE THAT THE LIQUIDATED DAMAGES ARE A REASONABLE
APPROXIMATION OF JETFAX'S DAMAGES AS A RESULT OF ANY TERMINATION OF THIS
AGREEMENT DURING THE DEVELOPMENT PERIOD OR THEREAFTER. SUCH PAYMENTS SHALL NOT
SERVE TO WAIVE JETFAX'S RIGHTS TO SEEK INJUNCTIVE RELIEF PURSUANT TO SECTION
16.5 ("INJUNCTIVE RELIEF").
13. WARRANTIES.
13.1 PERFORMANCE WARRANTY. JetFax warrants that the JetFax Software and
the Hardware Design Package, for a period of [*] after the Date of First
Commercial Shipment (the "Warranty Period"), will perform substantially in
accordance with the applicable Acceptance Criteria when used in conjunction with
the HP Product. JetFax shall, at its expense, provide a correction or workaround
for any reproducible Errors which may be discovered in the JetFax Software or in
the Hardware Design Package if they are reported to JetFax by HP during the
Warranty Period and deliver an updated version of the JetFax Software or
Hardware Design Package to HP. This warranty shall not apply to such JetFax
Software or Hardware Design Package if it (i) has been modified by HP or any
third party (ii) is any version other than the most current version of such
JetFax Software or Hardware Design Package shipped by HP hereunder or the
version shipped by HP immediately preceding such current version. Also, this
warranty shall not apply to the Hardware Design Package if the resulting JetFax
Formatter is not assembled according to JetFax specifications.
13.2 LIMITATIONS ON WARRANTIES. HP acknowledges that JetFax does not
warrant that the JetFax Software will meet HP's requirements, that operation of
the JetFax Software will be uninterrupted or error free, or that all software
errors will be corrected. JetFax is not responsible for problems caused by
computer hardware or other computer operating systems (including those making up
other HP products) which are not compatible with the system specifications
required to run the JetFax Software as set forth in the applicable Acceptance
Criteria, or for problems in the interaction of the JetFax Software with non
JetFax software. HP acknowledges that the JetFax Software is of such complexity
that it may have inherent defects, and agrees that JetFax makes no other
warranty, either express or implied, as to any matter whatsoever. The foregoing
states JetFax's sole and exclusive warranty to HP concerning the JetFax software
and HP's sole and exclusive remedy for breach of warranty. EXCEPT AS EXPRESSLY
SET FORTH ABOVE, THE JETFAX DELIVERABLES ARE PROVIDED STRICTLY "AS IS". Except
for the express warranties stated in this agreement, JetFax makes no additional
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[*] = CONFIDENTIAL TREATMENT REQUESTED
warranties, express, implied, arising from course of dealing or usage of trade,
or statutory, as to the JetFax Deliverables or any matter whatsoever. IN
PARTICULAR, ANY AND ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT ARE EXPRESSLY EXCLUDED. HP shall not have the right
to make or pass on, and shall take all measures necessary to ensure that neither
it nor any of its agents or employees shall make or pass on, any express or
implied warranty or representation on behalf of JetFax to any HP customer, end
user, or third party.
14. INDEMNIFICATION.
14.1 BY JETFAX. Subject to Section 15, JetFax agrees to indemnify and
defend HP from any costs, damages, and reasonable attorneys' fees resulting from
any claims by third parties that the uses permitted hereunder of the JetFax
Deliverables infringe any (i) U.S. copyrights, or U.S. trademarks; or (ii)
patents issued in the Designated Countries provided that, HP gives JetFax prompt
written notice of any such claim, tenders to JetFax the defense or settlement of
such a claim at JetFax's expense, and cooperates with JetFax, at JetFax's
expense, in defending or settling such claim. If JetFax receives notice of an
alleged infringement or if HP's use of the JetFax Deliverables shall be
prevented by permanent injunction, JetFax may, at its sole option and expense,
procure for HP the right to continued use of the JetFax Deliverables as provided
hereunder, modify the JetFax Deliverables so that it is no longer infringing, or
replace the JetFax Deliverables with a deliverable of equal or superior
functional capability. The rights granted to HP under this section shall be HP's
sole and exclusive remedy and JetFax's sole obligation for any alleged
infringement of any patent, copyright, trademark, or other proprietary right.
JetFax will have no liability to HP [*]
14.2 BY HP. HP agrees to indemnify and defend JetFax from any costs,
damages, and reasonable attorneys' fees resulting from all claims by third
parties arising from the use, manufacture, and distribution of HP Products by HP
and its direct and indirect customers in [*] provided that JetFax gives HP
prompt written notice of any such claim, tenders to HP the defense or settlement
of any such claim at HP's expense, and cooperates with HP, at HP's expense, in
defending or settling
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[*] = CONFIDENTIAL TREATMENT REQUESTED
such claim. HP will have no liability to JetFax with respect to any claim as to
which JetFax is liable to HP pursuant to Section 14.1 ("By JetFax") above.
15. LIMITATION OF LIABILITY. Neither party will be liable to the other party
or any other party for any loss of use, interruption of business or any
indirect, special, incidental or consequential damages of any kind (including
lost profits) regardless of the form of action whether in contract, tort
(including negligence), strict product liability or otherwise, even if either
party has been advised of the possibility of such damages. The foregoing
limitation of liability is independent of any exclusive remedies for breach of
warranty set forth in this Agreement. The limitation above shall not apply and
shall be of no force and effect with regard to damages attributable to a breach
of the scope of the licenses granted in Section 2 ("License Grants") or a breach
of the protective provisions set forth in Section 9 ("Proprietary Rights") [*]
16. GENERAL.
16.1 DISPUTE RESOLUTION. In the event of disputes between the parties
arising from or concerning the subject matter of this Agreement, other than
disputes arising from or the protection of either party's proprietary
information, the parties will first attempt to resolve the dispute through good
faith negotiation: first among and between the program managers assigned to the
Development Project, and if the dispute is not resolved within 3 days,
negotiation between senior officers (having the necessary authority to resolve
the dispute on behalf of such party) of each party . In the event that the
dispute cannot be resolved through the good faith negotiation of such senior
officers, the parties, within 5 days after written notice, will refer the
dispute to a mutually acceptable mediator, skilled in the technology and
industry relating to the subject matter of this Agreement, for hearing in a
place to be agreed to by the parties. If a mutually acceptable mediator cannot
be selected by the parties, the parties agree to use a mediator, skilled in the
technology and industry relating to the subject matter of this Agreement,
selected by the American Arbitration Association.
16.2 GOVERNING LAW. This Agreement shall be governed in all respects by the
laws of the United States of America and the State of California as such laws
are applied to agreements entered into and to be performed entirely within
California between California residents.
16.3 CHOICE OF FORUM AND VENUE. All disputes arising under this Agreement
not resolved in accordance with Section 16.1 ("Dispute Resolution") above, shall
be brought in Superior Court of the State of California in Santa Clara County or
the Federal District Court of San Jose, California, as permitted by law. The
Superior Court of Santa Clara
18.
<PAGE>
County and the Federal District Court of San Jose shall each have nonexclusive
jurisdiction over disputes under this Agreement. The parties consent to the
personal jurisdiction of the above courts.
16.4 NOTICES. All notices or reports permitted or required under this
Agreement shall be in writing and shall be delivered by personal delivery,
telegram, telex, telecopier, facsimile transmission, or by certified or
registered mail, return receipt requested, and shall be deemed given upon
personal delivery, five (5) days after deposit in the mail, or upon
acknowledgment of receipt of electronic transmission. Notices shall be sent to
the signatory of this Agreement at the address set forth at the end of this
Agreement or such other address as either party may specify in writing.
16.5 INJUNCTIVE RELIEF. It is understood and agreed that, notwithstanding
any other provisions of this Agreement, breach of the provisions regarding the
Scope of the Licenses granted in Section 2 ("License Grants") or protection of
Proprietary Information set forth in Section 9 ("Proprietary Rights") of this
Agreement by either party will cause the other irreparable damage for which
recovery of money damages would be inadequate, and that the damaged party shall
therefore be entitled to seek injunctive relief to protect its rights under this
Agreement in addition to any and all remedies available at law.
16.6 NO AGENCY. Nothing contained herein shall be construed as creating any
agency, partnership, or other form of joint enterprise between the parties.
16.7 FORCE MAJEURE. Neither party shall be liable hereunder by reason of
any failure or delay in the performance of its obligations hereunder (except for
the payment of money) on account of strikes, shortages, riots, insurrection,
fires, flood, storm, explosions, acts of God, war, governmental action, labor
conditions, earthquakes, material shortages or any other cause which is beyond
the reasonable control of such party.
16.8 WAIVER. The failure of either party to require performance by the
other party of any provision hereof shall not affect the full right to require
such performance at any time thereafter; nor shall the waiver by either party of
a breach of any provision hereof be taken or held to be a waiver of the
provision itself.
16.9 SEVERABILITY. In the event that any provision of this Agreement shall
be unenforceable or invalid under any applicable law or be so held by applicable
court decision, such unenforceability or invalidity shall not render this
Agreement unenforceable or invalid as a whole, and, in such event, such
provision shall be changed and interpreted so as to best accomplish the
objectives of such unenforceable or invalid provision within the limits of
applicable law or applicable court decisions.
19.
<PAGE>
16.10 HEADINGS. The section headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe the scope or extent of such section or in any way affect this
Agreement.
16.11 ASSIGNMENT. Either party shall have the right to assign its rights
and obligations pursuant to this Agreement to a successor entity in the event of
a merger or reorganization in which such party is not the surviving entity or to
a purchase of all or substantially all of its assets. Except as set forth
above, neither this Agreement nor any rights or obligations of either party
hereunder may be assigned in whole or in part without the prior written approval
of the non-assigning party.
16.12 EXPORT. HP 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 JetFax Deliverables. HP agrees that it will
not export or re-export the JetFax Deliverables in any form, without the
appropriate United States and foreign governmental licenses. HP agrees that its
obligations pursuant to this Section shall survive and continue after any
termination or expiration of rights under this Agreement.
16.13 FULL POWER. Each party represents and warrants that it has full
power to enter into and perform this Agreement, and the person signing this
Agreement on each party's behalf has been duly authorized and empowered to enter
into this Agreement. Both parties further acknowledge that each has read this
Agreement, understands it and agrees to be bound by it.
16.14 CONFIDENTIAL AGREEMENT. Neither party will disclose any terms or the
existence of this Agreement except pursuant to a mutually agreeable press
release, with written consent of the other party, or as otherwise required by
law. However, in no event will a party be responsible for confirming the
veracity of statements made by the other party. If required to disclose any
aspect of this agreement by legal requirement such as subpoena or other legal
mandate, each party agrees to use best efforts in each such circumstance to
provide to the other, prior to such party's initial disclosure pursuant to such
legal requirement, a copy of the proposed disclosure (such proposed disclosure
may be a redacted version of this Agreement) showing such party's attempt to
limit, redact, excise and otherwise restrict the disclosure of sensitive
portions of this Agreement. The nondisclosing party shall then have seven (7)
calendar days to provide its suggested limitations, redactions and restrictions
to the disclosing party's draft disclosure. The disclosing party shall then in
good faith attempt to include those suggested limitation, redactions and
restrictions, wherever possible in its submission of the disclosure as required
by law, and thereafter in subsequent negotiations with the agency or entity to
which disclosure is made. If such disclosing party does not receive comments
from the non-disclosing party within the seven (7) day period, such submission
shall be deemed approved by the non-disclosing party.
20.
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
16.15 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which will be considered an original, but all of
which together will constitute one and the same instrument.
16.16 ENTIRE AGREEMENT. This Agreement together with the exhibits
completely and exclusively states the agreement of the parties regarding its
subject matter. It supersedes, and its terms govern, all prior proposals,
agreements, or other communications between the parties, oral or written,
regarding such subject matter. This Agreement shall not be changed or modified
except through written mutual agreement signed by officers or program managers
of the parties, and any provision or a purchase order purporting to supplement
or vary the provisions hereof shall be void. Notwithstanding the above, the
parties agree that the specifications described in EXHIBIT A ("HP Product
Technical System Specification") largely reflect the requirements as understood
by the parties on January 7, 1997. However, as the development project
progresses, the parties shall, from time to time and by written mutual agreement
signed by officers or program managers, update such specifications to reflect
any changes and shall consider the impact on cost, schedule and performance.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the Effective Date by their duly authorized representatives.
JETFAX: HP:
JETFAX, INC. HEWLETT-PACKARD COMPANY
By:/s/ EDWARD R. PRINCE III By:[*]
------------------------
Print Print
Name: Edward R. Prince III Name:[*]
----------------------
Title: PRESIDENT Title:[*]
---------------------
Address for Notice: Address for Notice:
1376 Willow Road 3000 Hanover Street
Menlo Park, CA 94025 Palo Alto, CA 94304
21.
<PAGE>
EXHIBIT A
HP PRODUCT TECHNICAL SYSTEM SPECIFICATION
<PAGE>
HP Product STSS, Version 4.0 March 18, 1997
- --------------------------------------------------------------------------------
HEWLETT-PACKARD LOGO
HP PRODUCT TECHNICAL SYSTEM SPECIFICATION
TABLE OF CONTENTS
SUMMARY 7
CHANGE PROCESS/LOG 7
SUBMITTAL PROCESS 7
APPROVAL PROCESS 7
COMMUNICATION PROCESS 7
GENERAL INFORMATION 7
PRODUCT SPECIFICATIONS 8
GENERAL SPECIFICATION 9
INTERCONNECTION OVERVIEW 9
CONFIGURATION USE MODEL 9
[*]
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[*]
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[*]
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[*]
SUMMARY 2
1 GENERAL INFORMATION 3
1.1 PRODUCT OVERVIEW 3
1.2 PROGRAM GOALS 5
[*]
1.3 HOST ENVIRONMENT 9
1.5 DOCUMENT SET 9
1.6 OTHER REFERENCES 9
2 INSTALLATION 11
2.1 GENERAL CHARACTERISTICS 11
2.2 INSTALLER DESIGN 11
2.3 UNINSTALLER DESIGN 12
3 USER INTERFACE TO FUNCTIONS 15
[*]
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SUMMARY
[*]
CHANGE PROCESS/LOG
[*]
SUBMITTAL PROCESS
[*]
APPROVAL PROCESS
[*]
COMMUNICATION PROCESS
[*]
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GENERAL INFORMATION
PRODUCT SPECIFICATIONS
[*]
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GENERAL SPECIFICATION
[*]
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MISCELLANEOUS
[*]
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ENVIRONMENTAL SPECIFICATIONS
[*]
REGULATORY REQUIREMENTS
[*]
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REGULATORY TEST SUPPORT REQUIREMENTS
[*]
SERVICE REQUIREMENTS
[*]
HP CUSTOMER SUPPORT
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[*]
MANUFACTURING SUPPORT REQUIREMENTS (TBD)
[*]
APPENDIXES
REPORTS
[*]
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<PAGE>
================================================================================
HP PRODUCT SOFTWARE
TECHNICAL SYSTEM SPECIFICATION
Hewlett-Packard Logo
REVISION 2
MARCH 1997
HEWLETT-PACKARD LOGO COMPANY CONFIDENTIAL
================================================================================
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HP Product STSS, Version 2.0 March 18, 1997
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DOCUMENT IDENTIFICATION
- ------------------------------------ ------------------------------------------
TITLE HP Product Software TSS
- ------------------------------------ ------------------------------------------
- ------------------------------------ ------------------------------------------
AUTHORS HP Product Software Team
- ------------------------------------ ------------------------------------------
- ------------------------------------ ------------------------------------------
PRODUCT MODEL NUMBER TBD
- ------------------------------------ ------------------------------------------
- ------------------------------------ ------------------------------------------
LAN LOCATION/FILE NAME c:\jfcontr\tss.doc
- ------------------------------------ ------------------------------------------
- ------------------------------------ ------------------------------------------
MEDIA MS Word 7.0, Visio 4.0
- ------------------------------------ ------------------------------------------
REVISION HISTORY
-------------- ----------------------------
REVISION REVISION DESCRIPTION
-------------- ----------------------------
-------------- ----------------------------
DRAFT Various Reviews, 11/96
-------------- ----------------------------
-------------- ----------------------------
DRAFT Various Reviews, 12/96
-------------- ----------------------------
-------------- ----------------------------
REV. 1 Initial Release
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TABLE OF CONTENTS
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SUMMARY
[*]
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1 General Information
1.1 Product Overview
[*]
Components:
[*]
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[*]
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1.2 Program Goals
[*]
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[*]
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[*]
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1.2.6 Customer Usage Model
[*]
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[*]
1.3 Host Environment
[*]
1.5 Document Set
[*]
1.6 Other References
[*]
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[*]
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2 Installation
[*]
2.1 General Characteristics
[*]
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4 HELP SYSTEM
[*]
4.1 HELP DURING INSTALLATION
[*]
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APPENDIX A FEATURES LIST
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APPENDIX B USER TASK LIST
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APPENDIX C [*]
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[*]
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<PAGE>
EXHIBIT B
DEVELOPMENT SCHEDULE
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
DEVELOPMENT SCHEDULE AND SCHEDULE OF NON-RECURRING ENGINEERING FEES
<TABLE>
<CAPTION>
Milestone Targeted Date NRE
ID Milestone of Completion Payment
--------- --------- ------------- -------
<C> <S> <C> <C>
1. [*] [*]
2. [*] [*]
3. [*] [*] [*]
4. [*] [*] [*]
5. [*] [*] [*]
6. [*] [*] [*]
7. [*] [*] [*]
8. [*] [*] [*]
9. [*] [*] [*]
10. [*] [*] [*]
11. [*] [*] [*]
</TABLE>
1.
<PAGE>
12. [*] [*] [*]
13. [*] [*]
14. [*] [*]
TOTAL NRE [*]
2.
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C
TRAINING AND SUPPORT
I. SOFTWARE/FIRMWARE
TRAINING:
o In-depth technical training covering software and firmware to be provided by
JetFax to HP Support Personnel. Classes to take place at a mutually agreed
upon location. JetFax will provide technical personnel to assist HP in
generating a Technical Support Guide, Service Manual, and related training
materials. HP shall have the right to use all training documentation when
training other HP support organizations.
[*]
TECHINCAL SUPPORT:
o Technical assistance in support of the product launch and ongoing sales shall
include:
A JetFax support line(s) for HP Technical Marketing. Contact may be via
telephone, fax, electronic or regular mail during regular business hours.
o Problem Severity will be established by consensus between JetFax and HP
Program Manager with input from the HP Technical Support Groups using the
following guidelines:
Severity 1: Product is unusable by the end user due to software/firmware
failure.
Severity 2: A major product feature is inoperative, output is grossly deviant
from expected output or there is a sensitive customer situation.
Severity 3: There is a software/firmware problem that is not inhibiting the
usage of the product, a request for information on product usage or other non-
product area.
Severity 4: Requests for enhancements.
JetFax will make every reasonable attempt to maintain the following response and
resolution criteria. This will include, but is not limited to, minimally
ensuring that a JetFax Service Representative will be available by phone at all
business hours 8:00 am - 5:00 pm PST, Monday-Friday, excepting standard US
holidays. In the event a JetFax Service Representative is not available by
phone, a voicemail system will be active which will, in every best effort, allow
for the following:
Hewlett-Packard Company Confidential Page 1
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JetFax/HP Contract Exhibit C - Training and Support
[*] = CONFIDENTIAL TREATMENT REQUESTED
<TABLE>
<CAPTION>
Problem Severity Response Time Resolution Time
- ------------------- ------------- ---------------
<S> <C> <C>
1 [*] [*]
2 [*] [*]
3 [*] [*]
4 [*] [*]
</TABLE>
Response time is defined as the time necessary to acknowledge the receipt of a
problem and request additional information that may be necessary to analyze the
problem. In the case of a problem submitted by telephone it is assumed that the
response is immediate in that the call is answered as soon as a JetFax technical
support representative is available to answer.
Resolution time is defined as the time necessary to provide a software fix
bypass explanation of functionality or other such item as to 1) resolve the
customer's problem where it is proven to be the fault of JetFax software or,
hardware 2) provide reasonable explanation or evidence that the problem is not
the result of JetFax hardware or software or 3) request any additional
information as is necessary for the JetFax technical support group to resolve
the customer's problem, or escalate the problem to the JetFax QA or engineering
groups for investigation and resolution. In the event of #3 above the JetFax
technical support group will be responsible for monitoring the timeliness of the
QA/Engineering response, as well as keeping the HP technical support group
updated as to the status of the problem.
HP RESPONSIBILITIES
- --------------------
HP Technical Support will be responsible for the following customer issues:
1) Serve as the sole customer contact point at all times during the sales and
product lifecycles.
2) Resolve all JetFax related issues that HP has the technical capacity to
resolve.
3) Reproduce and verify JetFax product problems that are reported by customers
in a controlled enviorment whenever possible.
4) Report verified product failures to JetFax technical support providing
JetFax technical support with a detailed description of the steps necessary
to reproduce a problem.
5) Provide JetFax technical support with any materials necessary to reproduce
the problem such as input or output materials, specialized software or other
computer files deemed necessary for problem resolution.
6) Provide JetFax technical support, when possible, with the following for each
problem when initially contacting JetFax about that problem:
- A chronology of the incident, data on problem volume, frequency, and on-
site meetings with JetFax if they would provide helpful
- Take action with customers at JetFax's request to aide in problem
investigation and resolution
- Attempt to download / fax information on device's status.
- Software applications in use at the time of the failure with associated
software version numbers
- The name, description, and release number of other software that was
resident in the computer's memory at the time that the suspected product
failure occurred.
- Hardware configuration of the machine which the error is occurring
including all steps to recreate name of brand of PC, video cards, video
drivers, relevant localization settings (US vs International), and other
connected and installed
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JetFax/HP Contract Exhibit C - Training and Support
[*] = CONFIDENTIAL TREATMENT REQUESTED
peripherals and subsequent drivers
- A description of recent changes that have occurred to the hardware and
software of the machine where the failure is occurring.
- Complete text and identifying number of all error messages
- Any customer files necessary to reproduce the problem
JETFAX RESPONSIBILITIES
- -----------------------
JetFax Technical Support will be responsible when addressing the following
customer issues for HP:
1) Provide acknowledgment of the receipt of a problem report from HP in the
time frame outlined above.
2) Provide the HP representative that initiated the communication with a
JetFax problem number for tracking purposes at the time of the problem
report.
3) Perform analysis of reported product failures and unresolved problems and
undertake any efforts to develop solutions or bypasses within the time
frame outline above.
4) Provide to HP technical support any software fixes and documentation that
is developed by JetFax as a resolution to this problem.
5) Provide information, where such information is not clearly described in the
associated documentation, and consulting assistance regarding the operation
of the products in order to enable HP technical support personnel to
perform their related duties.
6) Maintain current updated master sets of all software for the product
including all programs and documentation.
7) Inform HP of any changes or updates to software or documentation.
8) Provide reports on a quarterly basis to HP on product problems communicated
to JetFax from HP as outlined below.
REPORTS AND TECHNICAL NOTES
- ---------------------------
JetFax technical support will make every reasonable effort to provide a
series of monthly reports to HP technical support
consisting of:
- JetFax cases logged for HP requests for the month
- JetFax software bugs reported by JetFax technical support for HP
- Monthly volumes of call received by JetFax technical support for HP
requests
- Technical notes related to HP product issues
- Release notes for products to be distributed by HP
- Any incidents of HP customers who have called JetFax technical support
directly
II. HARDWARE TRAINING AND SUPPORT
1. [*]
2. For HP's convenience, the design of the [*] will be done on HP's design
systems and source documentation will reside on those systems throughout
product life. Much of HP's manufacturing tooling and programming is based on
automated outputs from HP's design systems. JetFax agrees to cooperate with
HP in developing methods to make the transition of the design from JetFax's
design systems to HP's systems fast and reliable.
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JetFax/HP Contract Exhibit C - Training and Support
[*] = CONFIDENTIAL TREATMENT REQUESTED
3. [*]
4. Suppliers for all components will be subject to HP's standard supplier review
and evaluation process. JetFax agrees to cooperate with HP in the supplier
evaluation process.
5. At the end of HP's [*] production process, HP will perform extensive
electrical tests (production tests) on each [*] manufactured. HP will create
the test architecture and test code capable of diagnosing failures to the
level of design detail available to HP. JetFax will supply test code
sufficient for HP to diagnose failures of any parts of the [*] which are
proprietary to JetFax including all of the proprietary ASICS. JetFax test
code will, where possible, conform to specifications on the test interface
provided by HP so that it can be easily integrated into the production test.
In the event that HP requests action from JetFax to diagnose failures of [*],
HP will supply JetFax with any diagnostic information generated by the
production tests on those [*].
6. At a separate location from [*] manufacture, HP will install the [*] in a
printer and may test operation of the printer (integration test). Software
for the integration test will be provided by HP but may incorporate any
portions of the production test software, or other JetFaxtest utilities.
7. [*]
8. [*]
9. HP and JetFax agree to establish an escalation process throughout the
production life of the [*] to resolve technical problems at three levels as
follows:
Level 1:
--------
HP will designate a product engineer who will be responsible for initial
troubleshooting of all technical problems both in the factory and in the
field. This engineer will have access to all technical information and
documentation on the [*] which is not proprietary to JetFax. JetFax will
designate a design engineer, knowledgeable on this product, who will be
available to the HP product engineer for non-emergency consultation about the
formatter design during business hours. JetFax and HP's contacts will have
phones with message capability which will be checked at least daily,
Level 2:
--------
In the event of an actionable problem under 8. above, escalation will be via
the contact established for Level 1.
3/27/97 Hewlett-Packard Company Confidential Page 4
<PAGE>
JetFax/HP Contract Exhibit C - Training and Support
Level 3:
---------
Events actionable under 7. above will be treated as production hold
emergencies. JetFax will provide a method for HP to contact a knowledgeable
engineer for consultation by phone within one hour at any time. In the event
that the problem cannot be resolved by electronic communication within 24
hours, JetFax will provide an engineer physically present in Boise within an
additional 24 hours to join with the HP product engineer in troubleshooting
the problem to root cause and restoring production.
10. JetFax agrees that all information and software including design
specifications and source code required to perform the testing and
troubleshooting described above is included in the documentation held in
escrow.
11. Technical training on the JetFax design will be provided by JetFax, at times
jointly agreed upon by HP and JetFax.
3/27/97 Hewlett-Packard Company Confidential Page 5
<PAGE>
EXHIBIT D
ESCROW AGREEMENT
<PAGE>
ESCROW AGREEMENT
----------------
FOR SOURCE CODE AND MANUFACTURING MATERIALS
-------------------------------------------
ACCOUNT NUMBER:____________________
This Escrow Agreement is entered into by and among Data Securities
International, Inc., ("DSI"), a Delaware corporation with offices at 49
Stevenson Street, Suite 550, San Francisco, CA 94105;_________________
("Licensor"), a _______________ corporation with offices at
__________________________________________; and Hewlett-Packard Company
("HP"), a California corporation with principal offices at 3000 Hanover
Street, Palo Alto, CA 94304 ("HP").
RECITALS
This Agreement is effective as of _______________.
This Agreement is entered into in furtherance of the provisions and
objectives of that certain Master Development, Purchase and Distribution
License Agreement, effective January 31, 1997, between HP and Licensor
("Master Agreement").
For valuable consideration, the parties agree as follows:
1 DEPOSITS
===========
Licensor shall deposit with DSI those materials specified in Exhibit A
("Deposit"). Licensor shall keep the Deposit at the current revision level
on a semi-annual basis commencing with the effective date of this Agreement.
In addition, Licensor shall update the Deposit at any time during the term or
any renewal term of this Agreement that Licensor issues a new version or
release of the Deposit or otherwise makes revisions to its manufacturing
process requiring changes to the Deposit. Licensor also agrees to comply with
DSI's reasonable requests for the deposit or replacement of Deposit materials
likely to physically degrade.
2 RETENTION OF REPLACED DEPOSIT
================================
DSI will destroy any replaced Deposit unless HP instructs DSI to retain it
within twenty days of notice from DSI of such replacement. Retention of the
replaced Deposit may incur an additional fee, as specified in DSI's fee
schedule.
3 VERIFICATION AND DELIVERY
============================
The Deposit shall be packaged for storage as reasonably instructed by DSI and
accompanied by a cover sheet identifying the contents as indicated in Exhibit
A. Risk of loss or damage during shipment of the Deposit shall rest with the
party sending it. HP shall have the right to verify each Deposit before
shipment. Licensor shall give HP fifteen days advance written
1.
<PAGE>
notice and opportunity to inspect, compile or otherwise reasonably assure
itself of the contents of the Deposit to be shipped. HP may authorize DSI to
act in its place.
Licensor hereby grants HP or DSI, free of charge, the right to supervised use
of the facilities of Licensor, including its computer systems, to verify the
Deposit. Licensor shall make available technical support personnel as
necessary to verify the deposit.
4 STORAGE OF DEPOSIT
=====================
DSI shall safekeep the Deposit in a security vault and exercise the same high
standard of care to protect the Deposit which DSI would use to protect items
of this nature which DSI might own, but in no event less than that standard of
care customary in the industry.
5 USE AND NONDISCLOSURE
========================
Except as provided in this Agreement, DSI shall not disclose or make any use
whatsoever of the Deposit, nor shall DSI disclose or make use of any
information provided to DSI by Licensor or HP in connection with this
Agreement without the prior written consent of Licensor or HP, respectively.
These obligations shall continue indefinitely notwithstanding termination of
this Agreement.
6 RECORDS AND AUDIT RIGHTS
===========================
DSI shall keep complete written records of the activities undertaken and
materials prepared pursuant to this Agreement. Upon reasonable notice to DSI
during the term of this Agreement, Licensor and HP shall be entitled to
inspect and request the records of DSI with respect to this Agreement at
reasonable times during normal business hours at DSI's facilities and to
inspect the Deposit required then to be held by DSI.
7 RELEASE OF DEPOSIT
=====================
If HP notifies DSI of the occurrence of a release condition as defined in
Exhibit B, DSI shall immediately notify Licensor and provide Licensor with a
copy of the notice from HP. Licensor shall have twenty (20) days from the
date Licensor receives the notice from DSI, to in return notify DSI that
Licensor (1) disputes HP's claim that a release condition has occurred or (2)
has cured the condition that might have triggered such release. Failing such
timely notice, DSI shall release a copy of the Deposit to HP. However, if DSI
receives timely notice from Licensor, DSI shall not release a copy of the
Deposit but shall instead institute the Dispute Resolution Process below
within 5 business days of such timely notice from Licensor.
8 DISPUTE RESOLUTION PROCESS
=============================
DSI shall first notify Licensor and HP in writing of contrary instructions
from HP and Licensor for release of the Deposit. Within five business days
after the date the notice is sent by DSI, three referees shall be appointed,
one each by Licensor, HP and DSI. Each party shall notify the others of its
referee's identify within the five day period or forfeit its right to appoint
one.
2.
<PAGE>
On the tenth business day after the dispute notice from DSI, the referees
shall meet at the San Francisco offices of DSI located at 49 Stevenson Street,
Suite 550, San Francisco, CA 94105 and shall hear testimony and other evidence
that Licensor and HP may wish to present with respect to the dispute. The
meetings shall proceed with whatever number of duly appointed referees attend
the meetings, and shall be conducted from 8:30am to 5:30pm on no more than
five consecutive business days, national holidays excluded. HP shall present
up to two days of evidence followed by up to two days of presentation from
Licensor, followed by a final day reserved for rebuttal by each party in the
morning and afternoon, respectively. Licensor, HP and DSI agree that the
evidence and results of the hearings shall not be disclosed to third parties.
Within two business days after the close of the presentations, the referees
shall resolve the dispute by majority vote. Any refusal to vote shall be
deemed an abstention by that referee. In the event of a tie, the Deposit
shall not be released.
This dispute resolution process shall be the exclusive means for resolving
disputes to which it applies, and the decision of the referees shall be final,
conclusive and enforceable by a court of competent jurisdiction. All costs of
the referees shall be borne by the unsuccessful party.
9 JOINT RELEASE
================
HP and Licensor may, by joint written instruction to DSI, authorize the
delivery of the Deposit or a copy of it to the party named in the instruction.
10 RIGHTS IN DEPOSIT
=====================
Rights in the Deposit are stated in Exhibit C.
11 TERM AND TERMINATION
========================
This agreement shall have an initial term of one year, renewable upon receipt
by DSI of the specified renewal fee.
If DSI does not receive the renewal fee by the anniversary date, DSI shall
give notice to Licensor and HP. If the fee is not received from Licensor or
HP within thirty days of such notice, this Agreement shall expire. Upon
expiration of this Agreement, DSI will, at Licensor's option, either destroy
or return the Deposit to Licensor. All obligations of DSI under this
Agreement shall terminate thereafter, except for those stated in the Use and
Nondisclosure Section of this Agreement.
12 FEES
============
All fees shall be invoiced to and due from HP, in full upon receipt of DSI's
invoice. Fees shall be those specified in DSI's schedule of fees in effect
for the initial term of this Agreement plus taxes. To be effective, DSI must
notify Licensor and HP at least ninety days prior to expiration of the initial
term (or any renewal term) of this Agreement of any scheduled increase for the
succeeding renewal term.
3.
<PAGE>
13 ACCOUNT REPRESENTATIVE
===========================
Licensor, HP and DSI shall each designate an authorized individual(s) to
receive notices and otherwise act on behalf of Licensor in connection with
this Agreement, as set forth in Exhibit D. Representatives may be changed by
written notice to the other parties.
14 NOTICES
===========
All notices in connection with this Agreement shall be in writing addressed to
the Account Representatives, shall be sent by certified mail, return receipt
requested, and shall be effective forty-eight hours after deposit with the
U.S. Postal Service.
15 AUTHENTICITY
================
DSI may act in reliance upon any instruction, instrument or signature believed
to be genuine and may assume that it has been duly authorized.
16 HOLD HARMLESS
=================
Licensor will hold DSI harmless against any action regarding the release or
refusal to release a copy of the Deposit by DSI so long as DSI has acted in
good faith and in accordance with this Agreement.
17 GOVERNING LAW
===================
This Agreement shall be governed by and construed in accordance with the laws
of the State of California.
18 MERGER
============
The Master Agreement and this Agreement, including the Exhibits, constitutes
the entire agreement between the parties concerning the subject matter and
shall supersede all previous communications, representations, understandings,
and agreements, either oral or written, between the parties.
19 SEVERABILITY
================
If any provision of this Agreement is held by any court to be invalid or
unenforceable, then that provision will be severed from this Agreement and the
remaining provisions shall continue in force.
20 ASSIGNMENT
==============
No party may assign any rights or obligations of this Agreement without the
prior written consent of the others and any attempt to do so shall be deemed
void.
21 WAIVER
==========
Waivers of any right under this Agreement shall only be effective if in
writing signed by the party possessing the right.
4.
<PAGE>
22 EXHIBITS
============
The following Exhibits are made a part of this Agreement by this reference:
Exhibit A: Deposit
Exhibit B: Release Conditions
Exhibit C: Rights in Deposit
Exhibit D: Account Representatives
Approved and agreed to:
=======================
DSI, Inc. LICENSOR (________________)
By: ___________________________ By:_____________________________
___________________________ _____________________________
(Print Name) (Print Name)
Title: _________________________ Title:__________________________
HEWLETT-PACKARD COMPANY
By:______________________________
______________________________
(Print Name)
Title:___________________________
5.
<PAGE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT E
TRADEMARKS, BRAND NAMING, SPLASH SCREENS / LOGOS, ICONS, UI GUIDELINES
1. JETFAX TRADEMARKS
JetFax/TM/
JetSuite(R)
[*]
2. HP TRADEMARKS
Hewlett-Packard/TM/
[*]
[*]
[*]
picture of Hewlett Packard logo
3. BRAND NAME AND VERSION NAMING
The product name for JetFax developed PC software for the HP Product will
include the key word "for" such that any branding which is apparent in the
product will read [*] for Hewlett-Packard.
The following version naming shall be used for the different planned releases
of the [*] for Hewlett-Packard. The JetFax Product naming is only for
reference and does not, in anyway, obligate JetFax to use such version
naming. However, JetFax will not be allowed to use the same version names for
their own products as those listed for the HP versions of the product.
<TABLE>
<CAPTION>
Win 3.x, Win '95 NT 4.0 Win '97 NT 5.0
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
JetFax Product [*] [*] [*] [*]
HP Splash Screen [*] [*] [*] [*]
HP "About" JetSuite [*] [*] [*] [*]
HP documentation, CD ROM jackets, [*] [*] [*] [*]
disk labels
- ---------------------------------------------------------------------------------
</TABLE>
These naming conventions for HP versions will be referenced where applicable
within the application (including but not limited to the "About JetSuite"
dialog box). Additionally, HP will use this naming structure, where
appropriate, in product manuals, on diskette and/or CD ROM packaging and
labels, and on promotional pieces. JetFax reserves the right to maintain a
parallel version mechanism where not readily visible to users and where
necessary to permit proper operation of version-checking program operation.
An example would be in records within a file to allow the Viewer to
distinguish between *.RCH versions, or in *.DLL files to distinguish software
capabilities implemented.
4. SPLASH SCREENS/LOGOS
JetFax and HP agree that the same product splash screen design shall be
displayed for the all instances in which the splash screen is to be
displayed. Those instances are limited to: 1) launch of the main [*] for
Hewlett-Packard desktop application, 2) launch of the [*] mini-viewer, 3)
installation of the [*] software for the HP Product, 4) on-line Getting
Started Guide (if developed for the HP Product), 5) launch into the on-line
Help system. All other instances in which the splash screen is to be
displayed, must be clearly specified and mutually agreed to by both JetFax
and HP prior to any such implementation.
3/27/97 Hewlett-Packard Company Confidential Page 1
<PAGE>
JetFax/HP Contract Exhibit E - Trademarks
[*] = CONFIDENTIAL TREATMENT REQUESTED
In all cases, the splash screen shall not exceed a screen size which is the
same as the MS Word 6.0 splash screen.
The relative size of the JETSUITE name to the PICTURE OF THE HEWLETT PACKARD
LOGO brand will retain an approximate ratio of 1:1.
The splash screen shall remain visible for as long as it takes to load the
[*] desktop application, the [*] mini-viewer, the beginning installation
welcome screen, or the on-line Getting Started Guide, but not to exceed five
(5) seconds in any case, and on any platform which is a 486 33mhz processor
or faster.
HP and JetFax agree to allow HP the opportunity to work with graphic
designers of HP's choice in order to arrive at the final splash screen and
logo design which is mutually agreeable to both parties. That agreement will
include agreement on color scheme, font types, font sizes, and the graphic
design. This design, once agreed upon, and the overall look and feel of this
design, will remain exclusive to HP and the [*] for Hewlett-Packard software
product.
As a starting point for discussion of final graphic design, Appendix E1
contains an initial proposal for a design for the splash screen. It is non-
binding for either JetFax or HP, but is used as a physical reference for
discussion.
5. ICONS
Icons shall exist for several of the functions of the HP Product. [*] shall
use some standard FUNCTION ICON designs for the Fax, Copy, Print, Scan
functions within the desktop function of [*]. The TITLE BAR ICON is found in
the upper left corner of the title bar for [*] for Hewlett-Packard when the
application, and any of its associated UI dialogs, is active. The design of
the FUNCTION ICON and the TITLE BAR ICON icons shall be largely determined
by JetFax with approval by HP for the final designs.
The DESKTOP ICON is that icon which: 1) is found in the upper left corner of
the title bar for JetSuite Pro for Hewlett-Packard when the application, and
any of its associated UI dialogs, is active, 12) is the resulting icon on the
Windows desktop or tray icon bar once the [*] for Hewlett-Packard has been
minimized, and 23) is the icon associated with shortcuts and Windows Explorer
program type list of the [*] for Hewlett-Packard.
The HP PRODUCT SETUP ICON is that icon which, if this functionality is
created for the HP Product 1) is found in the upper left corner of the title
bar for the Setup Program associated with [*] for Hewlett-Packard when the
setup program, and any of its associated UI dialogs, is active, 2) is the
resulting icon on the Windows desktop or tray icon bar once the Setup Program
of [*] for Hewlett-Packard has been minimized, and 3) is the icon associated
with shortcuts and Windows Explorer program type list of the Setup Program of
the [*] for Hewlett-Packard.
HP and JetFax agree to allow HP the opportunity to work with graphic
designers of HP's choice in order to arrive at the final designs for DESKTOP
ICON and HP PRODUCT SETUP ICONS. These designs are to be mutually agreeable
to both parties. That agreement will include agreement on color scheme, font
types, font sizes, and the graphic design. This design, once agreed upon, and
the overall look and feel of this design, will remain exclusive to HP and the
[*] for Hewlett-Packard software product.
As a starting point for discussion of final graphic design, Appendix E2
contains an initial proposal for designs for the PROGRAM ICON. It is non-
binding for either JetFax or HP, but is used as a physical reference for
discussion.
3/18/97 Hewlett-Packard Company Confidential Page 2
<PAGE>
JetFax/HP Contract Exhibit E - Trademarks
[*] = CONFIDENTIAL TREATMENT REQUESTED
6. USER INTERFACE GUIDELINES
For consistency, the following guidelines will be applied to the user
interfaces associated with [*] for Hewlett-Packard. These include but are not
limited to: 1) the appropriate Program Icon or Setup Icon in the upper left
corner of the active UI screen, 2) the name [*] (approximately 10 point
font), and nothing more, in the title bar for the main desktop program screen
for the [*] for Hewlett-Packard, 3) the name HP PRODUCT (approximately 10
point font) preceding the associated function name, in the title bar for all
applet dialog boxes which result from activating that function, and whose
main function is to interface with the HP Product function. As an example,
Fax Option menu, the resulting applet UI title bar would display HP Product
- -
Fax Option.
Color schemes for background of the desktop, wallpaper design, font sizes,
and UI dialog designs are specified as much as possible in the HP Product
Technical Specification. Absent of this, all other UI guidelines and
decisions for the [*] for Hewlett-Packard product will be mutually agreed
upon by the JetFax and HP product development and marketing teams.
3/18/97 Hewlett-Packard Company Confidential Page 3
<PAGE>
JetFax/HP Contract Exhibit E - Trademarks
APPENDIX E1
PROPOSAL OF INITIAL SPLASH SCREEN DESIGN
3/18/97 Hewlett-Packard Company Confidential Page 4
<PAGE>
JetFax/HP Contract Exhibit E - Trademarks
[*] = CONFIDENTIAL TREATMENT REQUESTED
[*] SCREEN WITH HEWLETT PACKARD LOGO AND NEW PRODUCT NAME AND LOGO
3/18/97 Hewlett-Packard Company Confidential
<PAGE>
JetFax/HP Contract Exhibit E - Trademarks
APPENDIX E2
PROPOSAL OF INITIAL PROGRAM ICON DESIGN
3/18/97 Hewlett-Packard Company Confidential Page 5
<PAGE>
JetFax/HP Contract Exhibit E - Trademarks
[*] = CONFIDENTIAL TREATMENT REQUESTED
[*] proposed icon designs for new product
3/18/97 Hewlett-Packard Company Confidential
<PAGE>
EXHIBIT F
HP SOFTWARE LICENSE TERMS
<PAGE>
ATTENTION: USE OF THE SOFTWARE IS SUBJECT TO THE HP SOFTWARE LICENSE TERMS SET
FORTH BELOW. USING THE SOFTWARE INDICATES YOUR ACCEPTANCE OF THESE LICENSE
TERMS. IF YOU DO NOT ACCEPT THESE LICENSE TERMS, YOU MAY RETURN THE SOFTWARE FOR
A FULL REFUND. IF THE SOFTWARE IS BUNDLED WITH ANOTHER PRODUCT, YOU MAY RETURN
THE ENTIRE UNUSED PRODUCT FOR A FULL REFUND.
HP SOFTWARE LICENSE TERMS
The following License Terms govern your use of the accompanying Software unless
you have a separate signed agreement with HP.
License Grant. HP grants you a license to Use one copy of the Software. "Use"
means storing, loading, installing, executing or displaying the Software. You
may not modify the Software or disable any licensing or control features of the
Software. If the Software is licensed for "concurrent use", you may not allow
more than the maximum number of authorized users to Use the Software
concurrently.
Ownership. The Software is owned and copyrighted by HP or its third party
suppliers. Your license confers no title to, or ownership in, the Software and
is not a sale of any rights in the Software. HP's third party suppliers may
protect their rights in the event of any violation of these License Terms.
Copies and Adaptations. You may only make copies or adaptations of the Software
for archival purposes or when copying or adaptation is an essential step in the
authorized Use of the Software. You must reproduce all copyright notices in the
original Software on all copies or adaptations. You may not copy the Software
onto any public network.
No Disassembly or Decryption. You may not disassemble or decompile the Software
unless HP's prior written consent is obtained. In some jurisdictions, HP's
consent may not be required for limited disassembly or decompilation. Upon
request, you will provide HP with reasonably detailed information regarding any
disassembly or decompilation. You may not decrypt the Software unless decryption
is a necessary part of the operation of the Software.
Transfer. Your license will automatically terminate upon any transfer of the
Software. Upon transfer, you must deliver the Software, including any copies and
related documentation, to the transferee. The transferee must accept these
License Terms as a condition to the transfer.
Termination. HP may terminate your license upon notice for failure to comply
with any of these License Terms. Upon termination, you must immediately destroy
the Software, together with all copies, adaptations and merged portions in any
form.
Export Requirements. You may not export or re-export the Software or any copy or
adaptation in violation of any applicable laws or regulations.
U.S. Government Restricted Rights. The Software and any accompanying
documentation have been developed entirely at private expense. They are
delivered and licensed as "commercial computer software" as defined in DFARS
252.227-7013 (Oct 1988), DFARS 252.211-7015 (May 1991) or DFARS 252.227-7014
(Jun 1995), as a "commercial item" as defined in FAR 2.101(a), or as "Restricted
computer software" as defined in FAR 52.227-19 (Jun 1987)(or any equivalent
agency regulation or contract clause), whichever is applicable. You have only
those rights provided for such Software and any accompanying documentation by
the applicable FAR or DFARS clause or the HP standard software agreement for the
product involved.
Last Updated On: 19 Aug 96
http://hpweb.corp.hp.com/Publish/legal/terms.htm
(C) Copyright 1996 Hewlett-Packard Company
1.
<PAGE>
No Third Party Warranty. NEITHER HP NOR ANY OF ITS REPRESENTATIVES MAKES OR
PASSES ON TO YOU OR OTHER THIRD PARTY, ANY WARRANTY OR REPRESENTATION ON BEHALF
OF HP'S THIRD PARTY SUPPLIERS.
Third Party Beneficiary. You are hereby notified that JetFax, Inc., a
California corporation located at 1376 Willow Road, Menlo Park, California 94025
("JetFax") is a third party beneficiary to this agreement to the extent that
this agreement contains provisions which relate to your use of JetFax supplied
software. Such provisions are made expressly for the benefit of JetFax and are
enforceable by JetFax in addition to HP.
2.
<PAGE>
EXHIBIT 10.39
REDACTED
[*] = CONFIDENTIAL TREATMENT REQUIRED
OEM PURCHASE AGREEMENT
JetFax, Inc., (JetFax) a Delaware corporation having its principal place of
business at 1376 Willow Road, Menlo Park, CA 94025, agrees to purchase and Oki
America, Inc., a Delaware corporation, through its OKIDATA division, having a
principal place of business at 532 Fellowship Road, Mt. Laurel, NJ 08054
(OKIDATA) agrees to sell the Product(s), Spares Accessories and Consumables (all
as defined herein), together with their associated documentation, at the prices
set forth in Exhibit A and upon the terms and conditions set forth herein.
"Products" as used herein pertains to facsimile engines as defined by the
Specifications in Exhibit B. "Spares" as used herein means standard spare parts
as listed in OKIDATA's RSPL (Recommended Spare Parts List) for the Products, a
copy of which is contained in Exhibit C and unique spare parts as set forth in
Exhibit D. "Consumables" as used herein means toner cartridges and image drums
as set forth in Exhibit A. "Accessories" as used herein means a second paper
tray as set forth in Exhibit A.
<PAGE>
1. TERM OF AGREEMENT
The term of this Agreement shall be two (2) years commencing on the date on
which the last of the parties executes this Agreement (the Effective Date).
Orders placed during this twenty four (24) month ordering period must be
scheduled for delivery within thirty (30) months of the Effective Date.
2. CUSTOMER ORDERS
Purchases by JetFax will be by individual written JetFax purchase orders made
during the term of this Agreement, which orders will be accepted by OKIDATA so
long as they comply with the terms and conditions of this Agreement. Orders will
be accepted with OKIDATA's Order Acknowledgement (OA) form. If an OA is not
issued within ten (10) business days of receipt of order, the order will be
deemed accepted. The first purchase order (the Initial Order) is to be issued
simultaneously with the execution by JetFax of this Agreement for a quantity of
no less than twenty (20) percent of the Specified Quantity of all Product(s)
listed in Exhibit A, (i.e. 1000 units) and must specify delivery within six (6)
months of the Effective Date. Each purchase order, subject to the conditions set
forth in Section 4 below, shall set forth the desired delivery schedule for each
Product.
3. PRICES
A. The prices set forth in Exhibit A are based on purchase by JetFax of a
minimum of [*] of Product in each year of the term of this
Agreement. If, during the term of this Agreement JetFax does not purchase a
minimum of [*] of Product, OKIDATA may retroactively increase
the unit price by [*]. If, during the term of this Agreement,
JetFax purchases between [*] total units of Product, the unit
price will be increased retroactively by [*] per unit.
B. OKIDATA agrees to make Spares and Consumables available to JetFax for a
minimum of five (5) years after last shipment of Product to JetFax. During
the term of this Agreement, Spares will be invoiced at a [*] discount
from OKIDATA's U.S. Dealer list prices. Thereafter, the discount will be as
specified in Exhibit C.
C. OKIDATA will accrue an amount equal to [*] off the net invoice
value of all Product(s) purchased hereunder in an account maintained by
OKIDATA. Such accrued amount shall be applied as a credit towards the
payment of any amounts due from JetFax for the purchase of Spares
hereunder.
4. DELIVERY SCHEDULES
A. Requested delivery dates for Product(s), Accessories and Image Drum Kits
purchased hereunder shall be no sooner than one twenty (120) days after
receipt of a purchase order, FOB JAPAN.**
Requested delivery dates for Spares shall be no less than 90 days from
receipt of order. For non-unique Spares, OKIDATA will make reasonable
efforts to deliver reasonable quantities within in two weeks of order.
--------------
** Image drums purchased FOB Mt. Laurel, N.J., will be 2 weeks from receipt
of purchase order by Okidata.
[*] = Confidential Treatment Requested
2
<PAGE>
Requested delivery dates for toner cartridges shall be no less than
fourteen (14) days after receipt of order for product in standard packaging
and sixty (60) days in custom packaging.
Notwithstanding the above order leads, OKIDATA will, on request, make
reasonable efforts to shorten the lead for demand exceeding forecast
quantities. All or the above lead times are contingent on OKIDATA's receipt
of the monthly forecast as set out in paragraph 7, below.
5. RESCHEDULING OF DELIVERIES
A. Rescheduling of deliveries is permitted up to the 46th day prior to
scheduled delivery. Thereafter, no rescheduling will be permitted.
6. CANCELLATION CHARGES
A. Cancellation is permitted up to the 46th day prior to scheduled delivery
date. Thereafter, no cancellation is permitted.
7. CUSTOMER FORECASTS
Once each month JetFax will furnish to OKIDATA a written non-binding
forecast of its requirements for the Product(s) for the ensuing twelve
months.
8. PAYMENT
A. Payment for purchases hereunder will be due net 30 days from date of
receipt by JetFax in the U.S. of the products invoiced. Pending
establishment of open credit terms, and prior to or simultaneous with
issuance of its initial purchase order, JetFax will establish an escrow
account or standby letter of credit acceptable to OKIDATA, in the amount of
[*] to secure the purchase price of the products ordered. For each
scheduled delivery or products the escrow or letter of credit is to be
maintained at a level at least equal to [*] of the value of each delivery.
This funding process is to occur at least 45 days prior to the dates of all
scheduled shipments. This secured ratio [*] of the second and all
subsequent shipments will remain in effect until JetFax has proven that
they are capable of sustaining open credit terms at which time the advance
security requirement and the discount described in paragraph B., below,
will cease. If JetFax does not comply with payment terms as specified
herein, OKIDATA reserves the right to modify the amount of security
required.
B. OKIDATA will give JetFax a discount equal to [*] of the net
invoice amount on the portion of each delivery secured by the escrow or
letter of credit.
[*] = Confidential Treatment Requested
3
<PAGE>
C. Prices are exclusive of any sales, use, property, and like taxes. Any such
tax OKIDATA may be required to collect or pay upon the sale or delivery
of the Products, other than taxes based on OKIDATA's income, shall be
promptly reimbursed by JetFax.
D. All prices in this Agreement are in U.S. Dollars.
9. PATENT INDEMNITY
A. OKIDATA agrees to indemnify, defend and hold JetFax harmless from and
against any claim, suit or proceeding to the extent that such claim or
proceeding is based on a claim that Products (for purposes of this Section
9, Product will include Accessories) purchased hereunder infringe any
patent rights, provided that OKIDATA is notified promptly in writing and
given complete authority, information and assistance required for defense
of same, and OKIDATA shall pay all damages and costs as a result thereof.
OKIDATA, however, shall not be responsible for any settlement made by
JetFax without OKIDATA's prior written consent.
B. In the event any Product furnished hereunder is, in OKIDATA's reasonable
opinion, likely to or does become the subject of a claim of infringement,
OKIDATA may, at its option and expense, procure for JetFax the right to
continue using the Product, replace same with a non-infringing Product or
Accessory of similar capability, or modify the Product so it becomes non-
infringing (but has similar capability). In the event none of the foregoing
alternatives is commercially reasonable, and provided that there is a bona
fide claim of infringement, in order to minimize its liabilities hereunder,
OKIDATA may terminate this Agreement and the obligation to sell Product to
JetFax hereunder by written notice to JetFax; provided however, that
notwithstanding such termination, (i) the indemnity provided in paragraph A
hereof shall still apply and remain in full force and effect, and
(ii) OKIDATA shall promptly repurchase from JetFax at full cost, all
units of Product purchased by JetFax under this Agreement and not yet
resold by JetFax and JetFax will promptly return, same per the prior
written instructions of OKIDATA, which shall not be unreasonably withheld.
C. OKIDATA shall have no responsibility or liability for any claim of
infringement (i) arising out of the use of its Products in combination with
non-OKIDATA products, or (ii) if such infringement arises out of Product
manufactured to JetFax's design, or (iii) if such infringement arises as a
result of a modification to the product not made by or for OKIDATA, if, and
only if, such infringement would have been avoided by the use of the
Product without such combination, manufacture to JetFax design or
modification.
D. The foregoing states the entire liability of OKIDATA 'with respect to
infringement of any patent by the Products or any parts thereof and,
anything herein to the contrary notwithstanding, OKIDATA's liability to
JetFax hereunder shall in no event exceed the total price plus taxes and
other associated charges paid to OKIDATA by JetFax for all infringing or
4
<PAGE>
allegedly infringing Product purchased pursuant to this Agreement.
10. TERMINATION
This Agreement may be terminated or canceled as follows:
A. By either party at any time pursuant to the provisions of this Section 10,
if the other party violates any provision of this Agreement. The defaulting
party shall have a period of thirty (30) days from the date of receipt of
written notice from the non-defaulting party describing the default within
which to remedy the default. The termination shall become effective at the
end of the thirty (30) day period if the defaulting party has failed to
remedy the default.
B. If either party (i) admits in writing its inability to pay its debts
generally as they become due, or (ii) makes an assignment for the benefit
of its creditors, or (iii) institutes or consents to the filing of a
petition in bankruptcy, whether for reorganization or liquidation, under
federal or similar applicable state laws, or (iv) is adjudged bankrupt or
insolvent by a court having jurisdiction, then in either of such events,
the other party may, by written notice, immediately terminate this
Agreement.
C. JetFax's obligation to pay for all Products received by it hereunder shall
survive termination of this Agreement. In the event that OKIDATA terminates
the Agreement for default, OKIDATA will honor any Purchase orders which it
has accepted, but reserves the right to change payment terms as it deems
necessary.
11. SHIPPING AND RISK OF LOSS
Prices of Product(s), Accessories and Image Drum Kits are FOB Japan. Prices
of Spares and Consumables are FOB OKIDATA's U.S. facilities. Title and risk
of loss pass to JetFax at the time and place of delivery as soon as OKIDATA
has put the goods in the possession of the carrier. OKIDATA will package
the Products in accordance with accepted standard commercial practices for
normal shipment considering the type of Product involved and the normal
risks' encountered in shipments. JetFax shall designate the method of
shipment on each individual purchase order issued against this Agreement.
OKIDATA shall arrange for shipment by the designated method. All
transportation charges are freight collect.
12. LIMITATION OF LIABILITY
In no event will either party be liable for loss of profits or incidental,
special, or consequential damages arising out of any breach of obligations
under this Agreement.
5
<PAGE>
13. TRAINING
OKIDATA will provide one course for six (6) JetFax employees for a period
appropriate to the particular Product purchased (usually two (2) days). The
course will be given at OKIDATA's Mt. Laurel facility and will be scheduled
at a mutually agreeable time. OKIDATA will provide course material and
documentation free of charge. Travel and living expenses are to be borne by
JetFax. On-site training may be given at JetFax's expense and in accordance
with OKIDATA's policy at the time of execution of this Agreement.
14. VALUE ADDED
JetFax warrants and represents that the Products purchased hereunder are
for use and resale as part of, or as accessories to, equipment manufactured
or assembled by or for JetFax. OKIDATA grants JetFax the right to
incorporate the products purchased hereunder into any such equipment.
15. EXPORT RESTRICTIONS
JetFax agrees that it shall not at any time make or permit any export or
reexport of OKIDATA products directly or indirectly to any country, without
full compliance with United States export laws and regulations as issued by
the United States Department of Commerce, Office of Export Administration,
as amended from time to time, as those laws and regulations apply to
OKIDATA products, and all other things delivered to, or derived from things
delivered to, Customer under the OEM Purchase Agreement.
16. CONFIDENTIALITY AND PROPRIETARY RIGHTS
Each party agrees that it shall not disclose to any third party, or use for
its own benefit, except as expressly permitted herein and other than is
necessary for its performance under this Agreement, any trade secrets,
technical data, methods, processes or procedures or any other confidential,
financial, or business information or data of the other party, which is
disclosed by one party to the other in the course performance of the OEM
Purchase Agreement, without the prior written consent of the party
asserting ownership of the information. This obligation shall survive the
cancellation or other termination of the OEM Purchase Agreement.
This Section 16 shall not apply to any data or information which
(a) becomes generally known or available through no fault of the receiving
party; (b) is already known to the receiving party at the time of receipt
as evidenced by its written records; (c) is received from a third party
without breach of the confidentiality obligations of this Agreement; or
(d) is required by court order or operation of law.
6
<PAGE>
17. DOCUMENTATION AND SUPPORT
OKIDATA grants JetFax the right to use and modify OKIDATA user and service
documentation for distribution to JetFax customers as necessary only for
use and maintenance of JetFax products to the extent that these products
incorporate products purchased under this Agreement. JetFax will place a
copyright notice in any such reproduction or derivative work acknowledging
OKIDATA's copyrights. JetFax will not use any OKIDATA trademark without an
appropriate statement acknowledging OKIDATA's ownership of the mark.
OKIDATA will use reasonable efforts to assist in the development of,
diagnose problems in and provide ongoing assistance for its deliverables.
OKIDATA will provide all documentation necessary for JetFax to obtain
safety and certification approvals.
18. WARRANTY
All items purchased under this Agreement are warranted by OKIDATA to be
free from defects in materials and workmanship at the time of delivery.
Within thirty (30) days of receipt, JetFax will inspect Product(s), Spares,
Consumables and Accessories purchased hereunder and will notify OKIDATA in
writing of any claimed defects. OKIDATA will, at its option, repair or
replace any items which are defective. Should OKIDATA opt to perform
repairs at its facility, JetFax will bear the cost and risk of loss for
return of the products to OKIDATA and OKIDATA will be at the cost and risk
of loss for return of repaired or replacement items to JetFax within the 48
contiguous United States.
In the event of an epidemic failure, which, for purposes of this Agreement,
will mean a failure due to the same cause occurring in more than 5% of the
Products in any given delivery, OKIDATA will provide JetFax with a parts
kit to correct the problem.. These kits will be shipped at no charge to
JetFax, who will be responsible for the cost of labor required to install
the parts.
The above constitutes JetFax's sole remedy under this warranty.
19. TOOLING
JetFax agrees to pay to OKIDATA the sum of [*] for non-recurring
engineering (NRE) charges, for tooling related to changes to the left side
panel of the Product. This NRE charge will be amortized over the first [*]
units of Product purchased, at the rate of [*] per unit. If, during the
term of this Agreement, JetFax does not purchase [*] units, the remaining
unamortized amount of NRE will be invoiced and JetFax agrees to pay same.
If OKIDATA terminates this Agreement because of breach by JetFax, the
unamortized amount will be invoiced and JetFax agrees to pay the balance no
later than the due date for payment of any outstanding invoices for
products delivered pursuant to the Agreement.
[*] = Confidential Treatment Requested
7
<PAGE>
All tooling changes performed pursuant hereto are exclusive to JetFax, and
OKIDATA shall not use the part or parts as modified by such tooling changes
other than pursuant to this Agreement or license to otherwise allow the use
of the part or parts as modified by such tooling change by anyone other
than JetFax.
20. GENERAL PROVISIONS
A. All notices required to be given hereunder will be sent by registered or
certified mail, return receipt requested, postage prepaid, forwarded to the
appropriate party at the address shown below, or at such other addresses as
that party may, from time to time, advise in writing, and which have been
received in the ordinary course of post.
B. Neither party shall have the right to assign its rights or obligations
under this Agreement except with the written consent of the other party,
provided, however, that a successor in interest by merger, by operation of
law, or by assignment, purchase or otherwise of all or substantially all of
the business of either party, shall acquire all interest of such party
hereunder and may receive an assignment hereof without such consent. Any
prohibited assignment shall be null and void.
C. The failure of either party to enforce at any time the terms, conditions,
requirements, or any other provisions of this Agreement shall not be
construed as a waiver by such party of ay succeeding non-performance of the
same term, condition, requirement or any other provision of this Agreement.
D. The headings of paragraphs contained herein are for convenience and
reference only and are not a part of this Agreement, nor shall they in any
way affect the interpretation thereof.
E. The parties agree that if any portion of this Agreement shall be held
illegal and/or unenforceable, the remaining portions of this Agreement
shall continue to be binding and enforceable provided that the effectivity
of the remaining portion of this Agreement would not defeat the overall
business intent of the parties, or give one party any substantial financial
benefit to the detriment of the other party.
F. This Agreement and its appendices shall be governed by the laws of the
State of Delaware, excluding its conflicts of law rules. Any disputes
arising out of or pertaining to this Agreement are to be settled by
arbitration to be conducted by a mutually agreed on alternate dispute
resolution organization. Arbitration will take place in Philadelphia, PA if
JetFax initiates the proceedings, and in San Francisco, CA if OKIDATA
initiates the proceedings.
G. This Agreement constitutes the entire Agreement between the parties and
supersedes all prior discussion, either oral or in writing, including,
without limitation, the Memorandum of Understanding dated January 17, 1995.
8
<PAGE>
H. The terms and conditions of this Agreement will prevail notwithstanding any
variance with the terms and conditions of any order or release submitted by
Customer, or any release acknowledgment returned by OKIDATA. Except as
expressly set forth in this Agreement, this Agreement shall not be deemed,
or construed to be, modified, amended, rescinded, or canceled in whole or
in part, except by written amendment executed by the parties hereto.
I. The provisions of Sections 3.B., 9, 10.C., 12, 14 and 16 shall survive the
termination or expiration of this Agreement.
J. EXHIBIT A, PRICING, EXHIBIT B, SPECIFICATIONS, EXHIBIT C, SPARE PARTS, and
EXHIBIT D, UNIQUE SPARES, attached hereto, are hereby incorporated herein
by this reference.
IN WITNESS WHEREOF, the parties hereto have set their names on the
dates hereinafter set forth.
JetFax Inc. OKIDATA
/s/ EDWARD R. PRINCE /s/ ROBERT E. HOLL
__________________________________ _________________________________
(Signature) (Signature)
EDWARD R. PRINCE ROBERT E. HOLL
__________________________________ _________________________________
(Typed/Printed Name) (Typed/Printed Name)
PRESIDENT MANAGER, CONTRACTS
__________________________________ _________________________________
(Title) (Title)
2-21-95 2/22/95
__________________________________ _________________________________
(Date) (Date)
9
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
F.O.B
SPECIFICATION ORDER ANNUAL JAPAN
PRODUCT NUMBER MULT QUANTITY PRICE
- ------- ------------- ------ -------- --------
<S> <C> <C> <C> <C>
[*]
</TABLE>
ACCESSORIES/CONSUMABLES PRICING
- -------------------------------
<TABLE>
<CAPTION>
SPECIFICATION ORDER
PRODUCT NUMBER MULT PRICE
- ------- ------------- ------ -----
<S> <C> <C> <C>
[*]
</TABLE>
NOTE
[*]
MGB, 02/13/95
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
EXHIBIT B
Issue 1a February 1995
SPECIFICATION OF THE FAX ENGINE
FOR JETFAX
OKI Data Corporation
4-11-22, Shibaura, Minato-ku, Tokyo, Japan
Telephone: +81 3 5445 6119
Fax: +81 3 5445 6180
<PAGE>
CONTENTS
Chapter 1: General Description
Chapter 2: General Performance
Chapter 3: Physical Description
Chapter 4: BLANK
Chapter 5: Document Input
Chapter 6: Document Output
Chapter 7: BLANK
Chapter 8: Environmental Requirements
Chapter 9: BLANK
Chapter 10: Expanded View and Parts List
Chapter 11: BLANK
Chapter 12: Shipping Conditions
<PAGE>
1. GENERAL DESCRIPTION
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
2. GENERAL PERFORMANCE
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
3. PHYSICAL DESCRIPTION
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
5. DOCUMENT INPUT
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
6. Document Output
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
8. ENVIRONMENTAL REQUIREMENTS
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
ASSEMBLY
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
SECTION 1 CABINET ASSEMBLY
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
SECTION 3 PRINTER ASSEMBLY
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
SECTION 4 BASE ASSEMBLY
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
SECTION 5 SCAN ASSEMBLY
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
SECTION 5 DETAIL A SCAN UNIT
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
SECTION 5 DETAIL B PAPER GUIDE ASSEMBLY
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
SECTION 6 CABLES
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
12. Shipping Conditions
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
4. Counters/Correction Value Check Commands
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
VIDEO INTERFACE TIME CHART
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
COMMAND INTERFACT TIME CHART
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
OPERATION PANEL INTERFACE
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
REMARKS
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
EXHIBIT C - SPARE PARTS
-----------------------
A. Spare parts and the prices therefor, for Products purchased hereunder
shall be listed in OKIDATA'S Suggested End-User Price List issued from time
to time by OKIDATA. Suitable spare parts will be available for a period of
five (5) years from date of last delivery under this Agreement and may be
purchased by the issuance of a Customer purchase order acceptable to
OKIDATA. If Customer requires spare parts after they are no longer
available from OKIDATA, OKIDATA will provide available drawings or purchase
specifications to assist Customer in obtaining the Products from other
sources. The documentation to be supplied will be that documentation as is
in existence at that time.
B. Minimum spare parts order [*]
C. Prices for spare parts shall be invoiced at [*] discount from the Suggested
End-User Price List unless, in the twelve (12) month period immediately
preceding the Effective Date, Customer shall have purchased and paid for
spare parts from OKIDATA in an amount exceeding [*] or Customer anticipates
purchasing the same within the first twelve (12) months after the Effective
Date.
(i) If the amount previously purchased exceeds [*] or Customer
anticipates purchasing same within the term of this Agreement, the
discount shall be [*]
(ii) If the amount previously purchased exceeds [*] or Customer
anticipates purchasing same within the term of this Agreement, the
discount shall be [*]
D. Ribbons and manuals have special pre-discounted price and are, therefore,
not subject to the above discount percentages. OKIDATA offers additional
discounts for large volume orders.
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
[*]
[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
Exhibit D
Unique Parts List for JetFax MS
<TABLE>
<CAPTION>
ODA # OKI-Japan Part # Description List Price
<S> <C> <C> <C>
[*]
</TABLE>
[*] = CONFIDENTIAL TREATMENT REQUESTED
