EXHIBIT 10.34
REDACTED
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("JetFax"), and Xerox
Corporation, a New York corporation having its principal place of business at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ('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, ▇▇▇▇ 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 "▇▇▇▇ 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 ▇▇▇▇ 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.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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,
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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
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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
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
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 ▇▇▇▇ of Materials and Source List Approval. The ▇▇▇▇ of Materials and
------------------------------------------
Source List shall be subject to review and approval by Xerox, and all component
vendors providing materials set forth on the ▇▇▇▇ 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
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
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
or transfer the same to any third party.
4.2 Acceptance.
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(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
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 ▇▇▇▇ 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
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
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
10
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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:
11
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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
[*]
12
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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
13
customers.
6.3 Nonrecurring Engineering (NRE) Costs for ASICS. Xerox shall pay all
----------------------------------------------
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
14
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
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
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
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
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
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:
------- -------
▇▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President, Jet Fax, Inc. Manager, Facsimile Products
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Building 100, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
General Counsel Associates ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
Xerox Corp. Office of General Counsel
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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
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 ▇▇▇▇ 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/ ▇▇▇▇ ▇▇▇▇▇▇
NAME: ▇▇▇▇ ▇▇▇▇▇▇
TITLE: President
XEROX CORPORATION
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
NAME: ▇▇▇▇▇▇▇ ▇▇▇▇▇
TITLE: Manager, Facsimile Products
21
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
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Exhibit A
Development Agreement
JetFax Deliverables
-------------------
JetFax shall provide the following deliverables in accordance with the defined
parameters for quality.
[*- 3 pages redacted]
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Exhibit A-2
Development Agreement
Milestone Schedule
------------------
[*- 4 pages redacted]
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Exhibit B
Development Agreement
Xerox Deliverables
------------------
Xerox shall provide the following deliverables:
[* - the page following this is also redacted]
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.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Exhibit D
Development Agreement
Project Schedule
----------------
Item Date[*]
---- -------
[* - the page following this is also redacted]
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.
EXHIBIT F
Developement Agreement
Acceptance Testing
------------------
Xerox shall conduct acceptance testing of Tejas in accordance with the
following.
[*- 3 PAGES REDACTED]
---------------------
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,
(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.
Xerox Corporation JetFax, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Manager, Facsimile Products President
