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Title: |
Master Supply and Distribution Agreement [Amended] |
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Date: |
2001 |
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$98 |
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#402439 |
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AMENDED MASTER SUPPLY AND DISTRIBUTION AGREEMENT
This Amended Master Supply and Distribution Agreement ("Amended
Agreement") is made and entered into May 11, 2001 ("Effective Date"), by and
between PRESSTEK, Inc., a corporation organized and existing under the laws of
the State of Delaware, having an office and place of business at 55 Executive
Drive, Hudson, New Hampshire 03051 (hereinafter "PRESSTEK"), and XEROX
Corporation, a corporation organized and existing under the laws of New York,
having an office and place of business at 800 Phillips Road, Webster New York
14580 (hereinafter "XEROX").
STATEMENT
---------
PRESSTEK has developed a direct imaging technology for the formation of
images on printing plates from digital data using ablation plate and laser diode
imaging techniques, including related software and systems (the "PRESSTEK
ProFire Technology"). PRESSTEK is in the business of manufacturing and licensing
others to manufacture products incorporating the PRESSTEK ProFire Technology
and, in cooperation with various partners, has applied PRESSTEK ProFire
Technology to printing presses, platesetters and other products. XEROX is a
major manufacturer and seller of duplicating and graphic arts products.
On February 3, 2000, the parties entered into a non-binding Memorandum
of Understanding ("MOU") pursuant to which the parties have cooperated in the
demonstration of PRESSTEK - designed products and the XEROX [CONFIDENTIAL
TREATMENT REQUESTED]/*/ System at the DRUPA 2000 trade show.
On September 22, 2000, the parties entered into a Master Supply and
Distribution Agreement with respect to the production, marketing and commercial
distribution of three direct imaging presses and related consumables on a
co-branded basis ("Agreement"). The Agreement contemplated further negotiation
by the parties concerning Product support/service and other matters associated
with implementation.
The parties have completed the above-referenced negotiation as further
set forth herein, including the negotiation of an Amended Service Agreement
executed by the parties effective May 11, 2001 and attached hereto as Exhibit J
together with Exhibits J-1 through J-6 thereto ("Amended Service Agreement").
Accordingly, this Amended Agreement together with all Exhibits sets
forth the terms and conditions under which PRESSTEK will supply the agreed
products to XEROX for resale by XEROX on a co-branded basis.
Now, therefore, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the
following meanings, unless the context otherwise requires:
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
a. "Documentation" shall mean all written text including but
not limited to manuals, brochures, Specifications and software descriptions, in
electronic, printed and/or camera ready form, and related materials necessary
for marketing, support or use of the Products, including sales documentation,
service documentation, and customer documentation as further described herein.
b. "Maintenance Modifications" shall mean modifications to
Documentation and/or software components of the Products (including the object
code thereto) which correct Product Failures, support new releases of the
operating systems with which the code is designed to operate, support new
input/output (I/O) devices, or provide other updates and corrections necessary
to resolve customer problems as further described herein.
c. "Mandatory Retrofit" shall mean a retrofit necessary to
restore the Products to be in conformity with the Specifications, to render the
Products safe for use or to have the Products comply with applicable law.
d. "Product Failure" shall mean any error, unresolved problem,
or defect in the Product(s) caused by or resulting from (1) an incorrect
functioning of code or command files, or (2) an incorrect or incomplete
statement or diagram in the Documentation, if such error, problem, or defect
renders the code inoperable, causes the code to fail to meet the Specifications,
causes Documentation to be inaccurate or incomplete in any material respect,
causes incorrect results, or causes incorrect functions to occur in any material
respect when any such materials are used for their intended purposes.
e. "Products" shall mean the PAX Press, the SUN Press,
Consumables and Spares as hereinafter defined.
f. "Regulatory Agency" shall mean any regulatory agency or
other body, governmental or private, including but not limited to agencies
regulating product safety and/or electromagnetic emissions, the approval of
which is required for sale in North America and Europe with other regions to be
added by mutual consent.
g. "Spares" shall mean spare parts for the PAX Press or SUN
Press, and modifications, enhancements and improvements thereto which are made
pursuant to the terms of this Agreement.
h. "Specifications" shall mean the engineering, operational
and/or functional description of the Product(s) as set forth in the
specifications contained in Exhibits B, B1, C, C1, and D, as the same may be
amended by mutual agreement of the parties.
i. "Update" shall mean a bug fix or software release intended
in whole or in part to correct or avoid a software coding error. The term shall
also mean any other software release, revision or version (other than a
Maintenance Modification) which does not include bug fixes or changes to correct
a defect in the software component, and which PRESSTEK chooses to make available
to XEROX as part of the software component, either for free or at a price to be
-2-
{PAGE}
determined by PRESSTEK. All Updates will include all error corrections and
PRESSTEK shall use best efforts to ensure that Updates will be backwards
compatible with the previous consecutive hardware and software platform release.
j. "XEROX" shall mean, whether or not so specified and unless
the context otherwise requires, XEROX Corporation and XEROX Companies.
k. "XEROX Company" shall mean XEROX (Europe) Limited, Fuji
XEROX Co., Ltd., Modi XEROX Co., Ltd., and any entity which is owned or
controlled directly or indirectly by XEROX Corporation or by any of the
foregoing.
2. PRIOR AGREEMENTS. This Amended Agreement replaces, terminates and
supercedes any and all prior understandings and written agreements of the
parties with respect to the subject matter hereof, including without limitation
the MOU and the Agreement. This Amended Agreement is supplemented by a separate
and independent Confidentiality Agreement dated July 22, 1998 and attached
hereto as Exhibit A. The Confidentiality Agreement shall govern the exchange of
all confidential information between the parties in connection with the parties'
relationship pursuant to this Agreement.
3. PRODUCTS. Under the terms of this Agreement, PRESSTEK shall supply
and XEROX shall purchase the following Products (the PAX Press and the SUN Press
are referred to collectively as "Presses") for worldwide resale, lease,
distribution, servicing, and sublicense by XEROX to XEROX' customers under
mutually agreed terms and conditions:
a. PAX Press. An inline sheet-fed printing press of the B3
format size, manufactured by Adamovske Strojirny, a.s. of Adamov, The Czech
Republic ("Adast") or such other third party as PRESSTEK and XEROX may agree in
writing from time to time, incorporating on-press direct imaging of plates using
the PRESSTEK ProFire Technology, such press including a four-color press and a
five-color press hereinafter identified as the PAX Press. The definition of "PAX
Press" shall include any and all presses which meet the foregoing description
during the term of this Agreement. The Specification for the PAX Press is
attached hereto as Exhibit B and Exhibit B1.
b. SUN Press. A four-color, sheet-fed printing press of the A3
format size manufactured by Ryobi Limited of Hiroshima, Japan ("Ryobi") or such
other third party as PRESSTEK and XEROX may agree in writing from time to time,
incorporating multi-print cylinder technology and on press direct imaging of
plates using the PRESSTEK ProFire Technology hereinafter referred to as the SUN
Press. The definition "SUN Press" shall include any and all presses which meet
the foregoing description during the term of this Agreement. The Specification
for the SUN Press is attached hereto as Exhibit C and Exhibit C1.
c. Consumables. Printing plates in roll form using PRESSTEK's
PEARLdry technology and PEARLdry cleaning towels (as identified in Exhibit D and
as modified, updated, revised and/or replaced with functionally equivalent
products pursuant to written agreement during the term hereof) which constitute
consumable products for use in the PAX Press and SUN
-3-
{PAGE}
Press ("Consumables"). The parties agree that XEROX may purchase consumable
products other than plates and cleaning towels identified in this Section, from
other third parties in its discretion. PRESSTEK shall have no liability,
warranty or service obligation for consumable products not supplied by PRESSTEK.
The Specification for Consumables is attached hereto as Exhibit D.
d. Specifications. The Specifications for the Products
attached hereto as Exhibits B, B1, C, C1 and D are the current specification for
the early customer configuration implementation of these Products. These
Specifications are subject to modification by PRESSTEK from time to time during
the ongoing testing and evaluation of these units in the exercise of its
reasonable engineering judgment, with timely notification to XEROX. During the
period of testing and evaluation: (a) PRESSTEK shall obtain XEROX' written
consent prior to implementing, changes in the Specification which affect form,
fit or function of the Products, and (b) XEROX shall have the right to request
modification of the current Specification subject to approval by PRESSTEK. In
the event any modification to the Specification increases the engineering or
manufacturing cost of the PAX Press or SUN Press, such cost increase shall be
borne by the party requesting the modification except as otherwise agreed by the
parties in writing and if such modification is proposed or requested by XEROX,
the parties agree to negotiate in good faith any and all proprietary rights
associated therewith. In the event the parties fail to reach written agreement
pursuant to this Section, PRESSTEK agrees that all rights in and ownership of
any writings, discoveries, innovations, inventions, patents, copyrights, trade
secrets, know-how, and other similar forms of intangible property or proprietary
information (collectively "Developed Intellectual Property") which relate to or
result from such modification request will reside with the party whose
employee(s) or agent(s) first conceived, or made, or reduced to a tangible
medium of expression the Developed Intellectual Property.
[CONFIDENTIAL TREATMENT REQUESTED]/*/
e. Commercial Availability. The provisions of this Amended
Agreement contemplate that the Products will be commercially available no later
than [CONFIDENTIAL TREATMENT REQUESTED]/*/ after receipt of Purchase Orders #
[CONFIDENTIAL TREATMENT REQUESTED]/*/ and [CONFIDENTIAL TREATMENT REQUESTED]/*/
issued by XEROX on [CONFIDENTIAL TREATMENT REQUESTED]/*/ (the "Available Date").
In the event that the Products are not commercially available until after the
Available Date, the time in which the parties' obligations must be performed as
stated herein shall be extended by an amount of time commensurate with the delay
in commercial availability, with the exception of payment of the Distribution
Fee; provided, however, that if Products are still not commercially available as
of [CONFIDENTIAL TREATMENT REQUESTED]/*/ after the Available Date, XEROX may
terminate this Amended Agreement without any further liability upon written
notice to PRESSTEK, and PRESSTEK shall refund any and all payments of the
Distribution Fee made by XEROX prior to the effective termination date. For the
purpose of this Agreement,
-4-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
"commercially available" shall mean that conforming Product(s) are available to
be shipped and delivered to a customer with a lead time of (i) [CONFIDENTIAL
TREATMENT REQUESTED]/*/ for PAX Presses, (ii) [CONFIDENTIAL TREATMENT
REQUESTED]/*/ for SUN Presses, and (iii) [CONFIDENTIAL TREATMENT REQUESTED]/*/
days for Consumables.
f. Future Products. The parties contemplate that additional
PRESSTEK products may be added to the products referred to in this Section for
sale by XEROX on terms and conditions to be negotiated by the parties. It is the
intent of the parties that such additional products shall be added by addendum
to this Amended Agreement and that the terms and conditions of this Amended
Agreement shall apply to such additional products, except to the extent such
terms they are altered or modified in any such addendum.
4. DISTRIBUTION AGREEMENT FEE. In consideration of PRESSTEK's
investment in the development and acquisition of technology incorporated in the
PAX Press and the SUN Press, XEROX shall pay PRESSTEK a nonrefundable,
noncancelable (except as expressly provided herein) Distribution Agreement Fee,
in addition to any and all other payments called for by this Agreement. The
Distribution Agreement Fee shall be paid without regard to the quantity of
Products purchased by XEROX and without regard to the payment for such Products,
and without regard to whether XEROX's distribution rights are exclusive or
semi-exclusive. The fee shall be paid, in an amount to be calculated as follows:
a. Initial Term. XEROX shall pay PRESSTEK a Distribution
Agreement Fee equal to US $[CONFIDENTIAL TREATMENT REQUESTED]/*/ in quarterly
payments of $[CONFIDENTIAL TREATMENT REQUESTED]/*/ each, payable on March 15,
June 15, September 15, and December 15, in each of the calendar years
[CONFIDENTIAL TREATMENT REQUESTED]/*/.
b. Renewal Term. If the term of this Amended Agreement is
extended for an additional three-year term pursuant to the provisions hereof,
then XEROX shall pay PRESSTEK an additional Distribution Agreement Fee in the
amount of $[CONFIDENTIAL TREATMENT REQUESTED]/*/ to be paid as follows: XEROX
shall remit payments to PRESSTEK quarterly in amounts equal to [CONFIDENTIAL
TREATMENT REQUESTED]/*/% of each PRESSTEK invoice to XEROX for Products in the
immediately preceding calendar quarter beginning March 31, [CONFIDENTIAL
TREATMENT REQUESTED]/*/ and proceeding with quarterly invoices until payment is
complete. Payment shall be due within [CONFIDENTIAL TREATMENT REQUESTED]/*/ days
from receipt of a correct invoice.
5. CO-BRANDING AND TRADEMARKS. The Products to be supplied pursuant to
this Amended Agreement shall be co-branded and shall carry the XEROX name and
the PRESSTEK DI logo. The format in which the XEROX name and PRESSTEK DI logo
shall be applied to the PAX Press, the SUN Press, and packaging for Consumables
is shown in Exhibit E attached to this Agreement. Any changes in the manner of
application of the XEROX name, PRESSTEK DI logo and/or manufacturing company's
name (as set forth in subsection (b) below) shall be subject to written
agreement between the parties.
a. No Trademark/Tradename Usage. Except as provided in the
foregoing Subsection, nothing in this Amended Agreement shall authorize PRESSTEK
or XEROX to use any trademark and/or trade name of the other party without the
prior written consent of the other party. Any and all promotional materials used
by a party in the promotion, marketing and sale of
-5-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
products pursuant to this Amended Agreement bearing a trademark of the other
party shall be subject to review and approval by the other party as to the form
and content of such use, such approval not to be unreasonably withheld,
conditioned or delayed. All rights and goodwill in the trademarks of either
party accruing as a result of the use of such trademark by the other party in
any country shall inure to the benefit of the party owning the trademark, and
the other party shall acquire no rights in any such mark by virtue of such use
pursuant to this Agreement.
b. Manufacturer's Mark. In addition to the XEROX and PRESSTEK
trademarks indicated above, the manufacturing company's name shall be placed on
the non-operator side of the Press in the formats set forth in Exhibit F.
6. EARLY CUSTOMER CONFIGURATION UNITS. PRESSTEK shall sell and XEROX
shall purchase early customer configuration units of the PAX Press and SUN Press
as follows:
a. Early customer configuration PAX Presses. PRESSTEK shall
sell and XEROX shall purchase twenty early customer configuration PAX Presses
which comply with mutually agreed-upon specifications for testing and
evaluation. The parties anticipate that each of the twenty early customer
configuration presses shall be five-color versions of the PAX Press and none
shall be four-color versions of the PAX Press. The terms and conditions of such
sale shall be as follows:
(i) The price for the early customer configuration
units of the PAX Press shall be $[CONFIDENTIAL TREATMENT REQUESTED]/*/
each for the five-color press and $[CONFIDENTIAL TREATMENT
REQUESTED]/*/ each for the four-color press.
(ii) Delivery terms for such sales shall be as set
forth in Section 9.
(iii) In addition to the payment for early customer
configuration Presses, XEROX shall pay PRESSTEK a service/upgrade fee
in the amount of $[CONFIDENTIAL TREATMENT REQUESTED]/*/, which shall be
invoiced in two parts: $[CONFIDENTIAL TREATMENT REQUESTED]/*/ on March
30, 2001, and $[CONFIDENTIAL TREATMENT REQUESTED]/*/ on June 30, 2001.
Such invoices shall be payable net [CONFIDENTIAL TREATMENT
REQUESTED]/*/ from XEROX' receipt of PRESSTEK's correct invoice in
accordance with the foregoing. In consideration of such service/upgrade
fee and at no further cost to XEROX or customers, PRESSTEK shall
deliver, install and provide pre-press and press customer training (as
identified in Exhibit G and Exhibit J-3 of the Amended Service
Agreement) for the [CONFIDENTIAL TREATMENT REQUESTED]/*/ customer
configuration PAX Presses and provide Services (as defined in the
Amended Service Agreement) for the [CONFIDENTIAL TREATMENT
REQUESTED]/*/ customer configuration PAX units for a period of
[CONFIDENTIAL TREATMENT REQUESTED]/*/ after the date of installation
and shall upgrade such [CONFIDENTIAL TREATMENT REQUESTED]/*/ customer
configuration PAX Presses to production performance levels and full
compliance with the Specifications at the conclusion of [CONFIDENTIAL
TREATMENT REQUESTED]/*/ configuration testing and evaluation, the
foregoing at such
-6-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
locations as XEROX may direct in its discretion. Delivery of upgrade
components shall be made at the expense of PRESSTEK.
(iv) Xerox has issued Purchase Orders [CONFIDENTIAL
TREATMENT REQUESTED]/*/ and [CONFIDENTIAL TREATMENT REQUESTED]/*/ for
[CONFIDENTIAL TREATMENT REQUESTED]/*/ PAX and [CONFIDENTIAL TREATMENT
REQUESTED]/*/ SUN units. Xerox has remitted payment of $[CONFIDENTIAL
TREATMENT REQUESTED]/*/ on Presstek invoices SIE/10000547 and
SIE/10000574, and such payment constitutes an advance against the
invoices to be issued for the [CONFIDENTIAL TREATMENT REQUESTED]/*/ PAX
and SUN [CONFIDENTIAL TREATMENT REQUESTED]/*/ configuration units
ordered. Xerox shall issue purchase orders for the remaining
[CONFIDENTIAL TREATMENT REQUESTED]/*/ Adast units. Payment of invoices
for the balance due and owing for such [CONFIDENTIAL TREATMENT
REQUESTED]/*/ configuration PAX Presses shall be remitted by XEROX
[CONFIDENTIAL TREATMENT REQUESTED]/*/ following receipt by XEROX of
PRESSTEK's correct invoice.
b. [CONFIDENTIAL TREATMENT REQUESTED]/*/ configuration SUN
Presses. PRESSTEK shall sell and XEROX shall purchase [CONFIDENTIAL TREATMENT
REQUESTED]/*/ configuration SUN Presses for testing and evaluation at a price of
$[CONFIDENTIAL TREATMENT REQUESTED]/*/ each. PRESSTEK shall deliver the
[CONFIDENTIAL TREATMENT REQUESTED]/*/ configuration SUN Presses in [CONFIDENTIAL
TREATMENT REQUESTED]/*/ 2001. The [CONFIDENTIAL TREATMENT REQUESTED]/*/
configuration SUN Presses shall be invoiced when they are shipped and payment
terms for the configuration SUN Presses shall be [CONFIDENTIAL TREATMENT
REQUESTED]/*/ following Xerox' receipt of PRESSTEK's invoice therefor, which
invoice shall be issued no earlier than shipment of such Presses. Title to the
SUN Presses and risk of loss shall pass to [CONFIDENTIAL TREATMENT
REQUESTED]/*/.
c. DRUPA "Potential Customer" List. PRESSTEK shall provide
XEROX all information concerning the "intent to buy" list generated at DRUPA
2000 and thereafter and all rights to such list. The customers on such list
expressing their intent to buy shall become potential customers of XEROX for
XEROX sales of the PAX and SUN presses and XEROX shall take full responsibility
for communication and contracting with such customers.
d. Invoice Rejection. If any invoice received by XEROX is not
"correct" as to units purchased and price, XEROX shall notify PRESSTEK in
writing within ten (10) business days of receipt of the invoice. Such invoices
shall be deemed correct and accepted if PRESSTEK is not notified within such
period. PRESSTEK will promptly deliver a corrected invoice.
7. COMMERCIAL PRODUCTION. After completion of the early customer
configuration Presses pursuant to Section 6 above, PRESSTEK shall sell to XEROX
and XEROX shall purchase commercial production of the PAX Press and SUN Press as
follows:
a. Product Pricing. The price of the PAX Press, SUN Press and
Consumables shall be as set forth in Exhibit G attached to this Agreement. The
price of such Products shall be firm for the term hereof, subject to the
parties' semi-annual review and commercially reasonable efforts to reflect
manufacturing cost changes, currency fluctuations and any cost changes pursuant
to written modification. Any changes in prices for Products shall apply
prospectively and shall not apply to four-month, noncancelable firm orders.
-7-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
b. [CONFIDENTIAL TREATMENT REQUESTED]/*/
c. Specification. Upon release to production of the PAX Press
and SUN Press the Products shall be manufactured pursuant to the Specification
developed by PRESSTEK in cooperation with XEROX and agreed upon by the parties
hereunder as further set forth in Exhibits B, B1, C, C1, D, E and F. PRESSTEK
shall provide drafts of any changes anticipated in the Specification to XEROX as
they are developed prior to release to production of any Product. The
Specification shall be subject to modification (in order to improve
manufacturing or operating efficiencies or overall system performance) as agreed
by the parties in writing.
d. Product Changes. The Product(s) delivered hereunder shall
incorporate the latest improvements implemented by PRESSTEK, subject to XEROX'
prior written agreement. In requesting such approval, PRESSTEK shall inform
XEROX, in writing, of the date of the proposed incorporation of such changes
into the Product(s) and description of changes affecting the:
(i) Form (external appearance of finished Product(s)
or piece parts, or external dimensions, dimension tolerances or shape);
(ii) Fit (provisions for mounting; changes to
mounting holes, holes for mounting shipping restraints, or holes or
fittings for mounting accessory or optional features; changes in the
dimension or shape of internal spaces available for customer use;
changes affecting the interchangeability of parts, electrical or other
power and environmental requirements);
(iii) Function (changes in the Specification,
Product(s) performance, or any changes affecting Product(s)
reliability); and/or
(iv) Compatibility of the Product(s) (changes to or
which affect Product(s) operation or Product(s) Spares, internal logic
or timing which might affect application of the Product(s), part number
or configuration dash number of parts which can be replaced in the
field, the interchangeability of Spares, service documentation which
might affect a customer's application for the Product(s)).
XEROX shall respond within [CONFIDENTIAL TREATMENT REQUESTED]/*/ to each
engineering change order received from PRESSTEK requesting Product(s) changes
indicating its acceptance or rejection of such change.
-8-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
e. Effect of Changes. In the event that any change in the
form, fit or function or Specification of any Product(s) in order to comply with
mutually agreed upon requirements or standards other than Mandatory Retrofits
results in a significant increase or decrease in the cost of such Product(s), or
in the length of time required for the manufacture or delivery thereof, an
equitable adjustment to the price of such Product(s) or agreed upon shipping
date or both shall be made by the parties pursuant to good faith negotiations.
f. Mandatory Retrofits. PRESSTEK shall promptly notify XEROX
of the need for any Mandatory Retrofits and work with XEROX to establish a
mutually agreeable schedule for installing the foregoing. [CONFIDENTIAL
TREATMENT REQUESTED]/*/. The parties will use best efforts to minimize the cost
of implementation of Mandatory Retrofits.
g. Schedule for Changes. Any changes made by PRESSTEK and
accepted by XEROX pursuant to this Article shall be implemented in accordance
with a schedule mutually agreed upon in the written notification of change. Such
changes shall be incorporated into Product(s) shipped pursuant to Purchase
Orders received by PRESSTEK after XEROX approved such changes. If applicable,
the serial number of the first such changed Product(s) shall be identified to
XEROX and PRESSTEK agrees that all Product(s) with serial numbers greater than
such serial number shall incorporate such changes.
h. Consumables Inventory. At the commencement of the
Agreement, PRESSTEK shall compile a Consumables inventory, such inventory to be
PRESSTEK's estimate of the Consumables reasonably necessary for the Customer
installation base. During such time that PRESSTEK is Shipping Consumables
directly to Customer, as set out in i, below, PRESSTEK shall at all times
maintain an adequate inventory of each Consumable, at no cost to XEROX, and use
this supply of Consumables solely for shipment to XEROX or its customers as
emergency Consumables, when requested. Shipment of emergency Consumables shall
be made as promptly as practicable but not more than [CONFIDENTIAL TREATMENT
REQUESTED]/*/ of XEROX' or customer's written request to PRESSTEK.
i. Consumables Shipping. Through [CONFIDENTIAL TREATMENT
REQUESTED]/*/, PRESSTEK shall receive orders for Consumables from Xerox and will
ship such Consumables directly to Customers so identified by Xerox, in
accordance with mutually agreed billing and payment terms. No later than
[CONFIDENTIAL TREATMENT REQUESTED]/*/, the parties shall negotiate and agree on
Consumables shipping beyond [CONFIDENTIAL TREATMENT REQUESTED]/*/.
j. Obsolete Inventory. In the event of changes to Product(s),
PRESSTEK shall re-purchase from XEROX all Spares and Consumables which are in
XEROX' inventory and which have become obsolete as a result of any change to
Product(s), other than a Product(s) change requested by XEROX. The foregoing
shall not apply to Spares or Consumables which are outside the warranty period
or have a shelf date more than [CONFIDENTIAL TREATMENT REQUESTED]/*/ from
shipment.
k. Final Order Opportunity. In the event that XEROX rejects a
proposed change to Products and notwithstanding any provision herein to the
contrary, XEROX shall have
-9-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
the opportunity to place a final order for units of Product at the current
applicable price(s) and Specification(s) to be delivered over a negotiated
period of time.
l. XEROX Change Requests. XEROX shall have the right to
request modification of the Specification, which modifications shall be subject
to approval by PRESSTEK, such approval not to be unreasonably withheld. Any such
modification to the Specification which increases the engineering or
manufacturing cost of the Press shall result in an increase in the price of the
Press by an amount reasonably related to the cost of such increase and such
increase shall be borne by XEROX, unless otherwise agreed by the parties in
writing. In the event the parties fail to reach written agreement pursuant to
this Section, PRESSTEK agrees that all rights in and ownership of any writings,
discoveries, innovations, inventions, patents, copyrights, trade secrets,
know-how, and other similar forms of intangible property or proprietary
information (collectively "Developed Intellectual Property") which relate to or
result from such modification request will reside with the Party whose
employee(s) or agent(s) first conceived, or made, or reduced to a tangible
medium of expression the intellectual property. [CONFIDENTIAL TREATMENT
REQUESTED]/*/. PRESSTEK shall not be required to undertake implementation of any
modification requested or proposed by XEROX in the absence of a development
agreement satisfactory to PRESSTEK.
m. Press Packaging. PRESSTEK shall deliver PAX Presses and SUN
Presses appropriately packaged and addressed for shipment at such time and by
such carrier and to such destination as specified by XEROX in shipment releases
transmitted to PRESSTEK pursuant to this Agreement.
n. Consumables Packaging. Consumables shall be sold to XEROX
appropriately packaged, ex works Hudson, New Hampshire.
o. Payment. Payment for Products sold to XEROX pursuant to
this Amended Agreement shall be due to PRESSTEK [CONFIDENTIAL TREATMENT
REQUESTED]/*/ days from the date of XEROX' receipt of PRESSTEK's correct invoice
or from the date of product shipment, whichever is later.
In addition to payment for Products, XEROX will provide to
PRESSTEK a one time payment of $[CONFIDENTIAL TREATMENT REQUESTED]/*/, (the
"Lead-Time Payment"), which shall fund long lead items and works in progress to
enable [CONFIDENTIAL TREATMENT REQUESTED]/*/ lead times for the PAX Presses. The
Lead-Time Payment will be non-refundable and non-cancelable, but creditable, as
discussed below. The Lead-Time Payment will be made in [CONFIDENTIAL TREATMENT
REQUESTED]/*/ equal payments of $[CONFIDENTIAL TREATMENT REQUESTED]/*/ to be
paid in the [CONFIDENTIAL TREATMENT REQUESTED]/*/, respectively, and which shall
be due to PRESSTEK [CONFIDENTIAL TREATMENT REQUESTED]/*/ after XEROX' receipt of
PRESSTEK's correct invoice. The Lead-Time Payment will be applied to the last
orders placed as this Amended Agreement expires. By way of illustration, if, at
the time of the termination of this Amended Agreement, PRESSTEK issues to XEROX
a final invoice for Products, XEROX will receive a
-10-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
credit for the amount of the Lead-Time Payment received by PRESSTEK, and the
final invoice will be reduced accordingly. If the final invoice is for an amount
that is less than the amount of the Lead-Time Payment received by PRESSTEK,
PRESSTEK will pay to XEROX an amount equal to the amount of the Lead-Time
Payment received by PRESSTEK minus the amount of the final invoice.
8. DEMO PRODUCTS. During the early customer configuration and
commercial availability periods hereunder, XEROX may elect to make one five
color PAX Press and one SUN Press available to PRESSTEK for customer
demonstration purposes at PRESSTEK's facility. The parties agree to negotiate in
good faith terms and conditions concerning such provision of demo units
hereunder, such terms and conditions to include services provided by PRESSTEK
and scope of use of such Products. The parties agree that such loan of demo
units by XEROX to PRESSTEK will constitute a bailment, and that all right, title
and interest in and to such demo units will remain in Xerox at all times.
PRESSTEK will not substitute any property for the XEROX demo units, or use such
demo units except per XEROX' written direction or consent. While in PRESSTEK's
custody or control such demo unit(s) will be plainly marked or otherwise
identified as "Property of Xerox Corporation", held at PRESSTEK'S sole risk, and
kept insured by PRESSTEK at its own expense in an amount equal to the then
current replacement cost with loss payable to XEROX. PRESSTEK will return such
demo unit(s) to XEROX immediately upon demand. XEROX consents to use of demo
unit(s) by PRESSTEK for demonstration and Xerox customer training purposes
during the bailment, provided that XEROX' requirements for access to or
availability of such demo unit(s) will be given priority over such use by
PRESSTEK and/or any other use authorized in writing by Xerox.
During customer demonstrations, as set out above, Presstek and Xerox will be
responsible for the following respective items together with all charges and
costs incurred in connection therewith:
(a) Presstek shall: [CONFIDENTIAL TREATMENT REQUESTED]/*/
(b) Xerox shall: [CONFIDENTIAL TREATMENT REQUESTED]/*/
9. DELIVERY/PASSAGE OF TITLE & RISK OF LOSS. Title and risk of loss for
all Presses and Spares shall pass to Xerox (a) [CONFIDENTIAL TREATMENT
REQUESTED]/*/, in the case of shipments made by sea, and (b) [CONFIDENTIAL
TREATMENT REQUESTED]/*/, in the case of all shipments by road or rail which are
not intended for lading on any vessel, and (c) in the event of shipment by air,
pursuant to the parties' subsequent written agreement. PRESSTEK shall use such
carriers, freight forwarders, and Customhouse brokers as specified by Xerox.
PRESSTEK will book freight on a "Freight Collect, Third Party Billing to Xerox"
basis, with service from the point of title transfer as defined above to the
final door of destination (eg. For ocean, port to door service), allowing the
-11-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
carriers to bill Xerox directly for the entire move. Xerox shall act as the
importer of record for the purposes of U.S. Customs clearance, and shall pay all
duties, taxes, and brokerage fees associated with the importation of the goods.
PRESSTEK will provide such technical information as required by Xerox for the
purposes of Customs classification and all necessary regulatory declarations.
[CONFIDENTIAL TREATMENT REQUESTED]/*/ subject to the further terms and
conditions of a separate agreement to be negotiated by the parties. PRESSTEK
shall furnish XEROX and/or Xerox' designated Customhouse broker and/or freight
forwarder with a pro forma or commercial invoice, showing the price to be paid
by Xerox for each shipment of Presses and Spares, and separately itemizing any
freight, insurance, or other transportation charges which PRESSTEK may have
prepaid on Xerox' behalf. Such freight, insurance or other transportation
charges shall be stated at PRESSTEK's cost, without any markup or other charge.
The invoice shall be addressed to the Xerox company which issued the purchase
order for the Presses/Spares, or as directed by Xerox.
10. QUALITY ASSURANCE. PRESSTEK and its manufacturers shall provide the
following quality assurance.
a. Quality Requirements. All Product(s) produced and delivered
to XEROX shall fully comply with the Specifications as further set forth herein.
Reliability of Product(s) shall meet or exceed the requirements of such
Specifications.
b. ISO 9000 Quality Systems Registration Requirements.
PRESSTEK and/or its manufacturers will use commercially reasonable efforts to
have a quality system which is registered to ISO 9001 and ISO 9000-3 (TC176
Approved equivalent) or is in the process of obtaining such registration. Any
costs associated with obtaining the initial registration or maintenance thereof
shall be the sole responsibility of PRESSTEK. To the extent that PRESSTEK and/or
its manufacturers do not comply with the foregoing requirement, PRESSTEK and/or
its manufacturers shall comply with the XEROX Quality Assurance Requirements
("EIQP") and complete a survey to confirm such compliance. Existing
PRESSTEK/manufacturer quality procedures which totally comprehend any quality
plan elements may be used to satisfy the plan and will become the basic
operating document for assuring compliance to XEROX' quality requirements.
PRESSTEK and/or its manufacturers agree to develop a corrective action plan
within thirty (30) days for any shortfalls identified in compliance as a result
of such survey, which action plan shall be implemented within a mutually
agreeable time.
c. Acceptance Inspection. XEROX shall have the right to
conduct, at its expense at PRESSTEK'S and/or its manufacturer's facility, an
acceptance inspection of the Product(s) to ensure compliance with the
Specifications. PRESSTEK agrees that it shall correct any nonconforming Product
that has been rejected as a result of acceptance inspection by a method mutually
agreed by the parties. All Product(s) corrected by PRESSTEK pursuant to this
-12-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
Section shall be subject to all quality assurance and inspection requirements in
accordance with the provisions hereof.
d. Source Verification. XEROX shall have the right to conduct,
at its expense, source verification activities, in accordance with the PRESSTEK
Quality Assurance Procedures set forth in Exhibit H at PRESSTEK and third party
manufacturing sites for Products. XEROX must provide notification of intent to
perform a source verification to PRESSTEK a minimum of 2 weeks prior to the
requested source verification date. XEROX may elect to establish a fixed source
verification date by month, quarter, biannually or annually. PRESSTEK shall have
the right to attend all source verifications at its manufacturers' location(s).
All source verifications will be conducted and reported based on the acceptance
inspection criteria set forth in this Section and Exhibit H.
11. ORDERING/FORECAST PROCEDURE. The parties shall follow the following
ordering and payment procedure with regard to Products.
a. Purchase Orders. XEROX shall provide PRESSTEK a rolling
forecast for [CONFIDENTIAL TREATMENT REQUESTED]/*/ Press shipment requirements,
with the [CONFIDENTIAL TREATMENT REQUESTED]/*/ representing firm, noncancelable
orders and the balance of the forecast consisting of non-binding information
provided for planning purposes only except as expressly further set forth in
this Section. Changes to this [CONFIDENTIAL TREATMENT REQUESTED]/*/ forecast may
be submitted [CONFIDENTIAL TREATMENT REQUESTED]/*/ to PRESSTEK in which
[CONFIDENTIAL TREATMENT REQUESTED]/*/ may be increased or decreased by
[CONFIDENTIAL TREATMENT REQUESTED]/*/% and [CONFIDENTIAL TREATMENT REQUESTED]/*/
and beyond may be reduced by up to [CONFIDENTIAL TREATMENT REQUESTED]/*/% or
increased up to manufacturing line capacity(currently [CONFIDENTIAL TREATMENT
REQUESTED]/*/ units per month). PRESSTEK will make every effort to accommodate
requested [CONFIDENTIAL TREATMENT REQUESTED]/*/ shipment increases that have
less than [CONFIDENTIAL TREATMENT REQUESTED]/*/ notification. XEROX will submit
a new order/forecast outlining the next [CONFIDENTIAL TREATMENT REQUESTED]/*/
Press shipment requirements on or before the [CONFIDENTIAL TREATMENT
REQUESTED]/*/ of each month. Each such forecast/order shall specify the Presses
and features desired and the quantity and month of delivery requested. For the
[CONFIDENTIAL TREATMENT REQUESTED]/*/ of the forecast period, XEROX will
designate the Press with adequate specificity so that the Press can be fully
manufactured [CONFIDENTIAL TREATMENT REQUESTED]/*/; the forecast for the next
[CONFIDENTIAL TREATMENT REQUESTED]/*/ of the forecast period shall be in
adequate detail to order parts and components for the manufacture of such
Presses; and the forecast for the last [CONFIDENTIAL TREATMENT REQUESTED]/*/ of
the forecast period shall be sufficient for the ordering of long-lead time parts
and components for such Presses. The parties shall cooperate fully with one
another in the formulation of such descriptions.
b. Shipment Releases. A shipment release document, which
specifies the shipping address of Presses ordered, is required by the
[CONFIDENTIAL TREATMENT REQUESTED]/*/ of the requested shipping month. If XEROX
fails to provide shipment releases for Presses which are the subject of firm
orders pursuant to this Subsection by the end of the month during which the
Presses are scheduled for shipment, PRESSTEK may ship such Presses to a default
address or consign the Presses to an isolated location at the manufacturing
facility or to a bonded warehouse and invoice XEROX for the final payment for
such Presses. Payment for such Presses shall be due pursuant to the payment
terms of this Amended Agreement from the date of XEROX' receipt of correct
invoice without regard to the actual date of shipment. Such products shall be
stored in a facility agreed to between the parties, [CONFIDENTIAL TREATMENT
REQUESTED]/*/.
-13-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
c. Payments for Presses. All payments are due following XEROX'
receipt of a correct invoice, subject to the provisions of Section 7(n). To the
extent PRESSTEK has not received payment when due, PRESSTEK may suspend its
obligations to manufacture and deliver the Press for which payment is due but
not received.
d. Anything in this Section to the contrary notwithstanding,
PRESSTEK shall not be deemed in breach of its obligations to deliver Presses
pursuant to this Amended Agreement if PRESSTEK is prevented from doing so by
reason of any circumstance or occurrence constituting force majeure pursuant to
the terms of Section 36 of this Agreement.
12. WARRANTY.
a. Products/Parts. Upon delivery of each Press pursuant to
this Agreement, PRESSTEK warrants and represents to XEROX that for a period of
[CONFIDENTIAL TREATMENT REQUESTED]/*/ from the date of PRESSTEK's installation
at the customer location, but in no event more than [CONFIDENTIAL TREATMENT
REQUESTED]/*/ after the date of shipment to XEROX, whichever is sooner, Presses
shall be free from material defects in materials and workmanship and shall
substantially perform in accordance with the Specifications for such Press.
PRESSTEK shall repair or replace any defect in Product parts, without charge for
the parts, for a period of [CONFIDENTIAL TREATMENT REQUESTED]/*/ from the date
of installation at the customer location but in no event more than [CONFIDENTIAL
TREATMENT REQUESTED]/*/ after the date of shipment to XEROX for such Press,
whichever is sooner, and PRESSTEK's standard labor charges shall apply to such
repair/replacement services performed following expiration of the [CONFIDENTIAL
TREATMENT REQUESTED]/*/ period set forth above. In fulfillment of the parts
warranty obligation, PRESSTEK may, at its option and expense, replace the entire
system (or sub-system) if such replacement is deemed more cost effective and/or
more expeditious. With respect to early customer configuration units, the
warranty set forth in this Section 12(a) shall commence following expiration of
the [CONFIDENTIAL TREATMENT REQUESTED]/*/ period set forth in Section 6(a)(iii)
(or, for early customer configuration units installed at beta sites and
receiving Services pursuant to Section IV.9 of the Service Agreement, following
the expiration of both the [CONFIDENTIAL TREATMENT REQUESTED]/*/ period
referenced in Section IV.9 of the Service Agreement and the [CONFIDENTIAL
TREATMENT REQUESTED]/*/ period referenced in Section 6(a)(iii) hereof).
b. Additional Warranties. PRESSTEK further warrants and
represents that: (i) it has good and marketable title to all Product(s)
delivered hereunder and that all units of Product(s) shall be free and clear of
all liens, encumbrances, security interests; and (ii) it has the right to convey
to XEROX the rights respecting Product(s) granted in this Agreement; and (iii)
software and firmware shall be free in all material respects from program errors
and conform with applicable Specifications for a period of [CONFIDENTIAL
TREATMENT REQUESTED]/*/ from the date of installation at the customer location
but in no event more than [CONFIDENTIAL TREATMENT REQUESTED]/*/ after the date
of shipment to XEROX for such Press, whichever is sooner; and (iv)
Software/firmware media, if any, shall be materially free from defects in
workmanship and materials for a period of [CONFIDENTIAL TREATMENT REQUESTED]/*/
from delivery to the customer location; (v) except as otherwise agreed by the
parties, Products shall be manufactured from new parts; and (f) Consumables
shall be free from material defects in
-14-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
materials and workmanship and shall substantially perform in accordance with the
Specifications for a period of [CONFIDENTIAL TREATMENT REQUESTED]/*/ from date
of shipment.
c. Systemic Defects Definition. "Systemic Defects" shall mean
a defect in the design, materials, or manufacturing which occurs in identical or
substantially similar form or from a substantially similar cause (i) in at least
twenty (20) percent of the units of Product delivered, when less than 100 units
are delivered in any particular sixty (60) day period; or (ii) in at least ten
(10) percent of the units of Product delivered, when 100 or more units are
delivered in any sixty (60) day period; or (iii) more than ten (10) percent of
the units of Product(s) which are in XEROX' inventory or which are installed at
customer locations.
d. Systemic Defects. Notwithstanding the warranty requirements
and conditions set forth in this Section, PRESSTEK will undertake without charge
and without delay to promptly remedy any Systemic Defect in all affected
Product(s) in inventory or in the field, by delivering to XEROX a replacement
Product(s) or otherwise correct the defect as agreed upon by the parties.
PRESSTEK shall not be required to cure any Systemic Defect for any Product(s)
which have been subjected to accident, negligence, misuse, alteration,
modification, tampering or causes other than ordinary use. At XEROX' request,
PRESSTEK shall provide to XEROX kits containing the necessary software or
hardware to correct the Systemic Defect for all affected units of Product(s) or,
if XEROX reasonably believes it is probable that the Systemic Defect will affect
at least substantially all units of Product(s) then located either at customer
locations or in XEROX' inventory, PRESSTEK shall provide at its' expense XEROX
with the kits for all such units of Product(s).
e. Warranty Obligations. During the applicable warranty
periods set forth herein, the liability of PRESSTEK under the warranty set forth
in this Section shall be limited to the following: (i) as PRESSTEK may elect,
with respect to hardware components of the Products, within fifteen business
days of XEROX' notice of the defect or nonconformity and at PRESSTEK's sole
expense, either (a) to repair or make nonconforming parts or Products
conforming; or (b) to replace nonconforming parts or Products with conforming
parts or Products; and (ii) with respect to the software portion of the Products
and at PRESSTEK's sole expense, PRESSTEK shall use best efforts based on the
severity of the problem in accordance with industry standards to correct errors
or provide workarounds or obtain such services from third party software vendors
within the time periods set forth in Exhibit J.
f. Warranty Disclaimer. This warranty shall apply only to
Presses which have been installed by PRESSTEK or XEROX authorized personnel and
shall not apply to Products which have been misused or used in an unauthorized
or improper manner without following normal operating procedures. The foregoing
warranty shall not apply to adjustment, modifications, replacements or repair,
or increases in maintenance service time caused by: electrical work external to
the Presses or components, the attachment of accessories or other devices or
software not furnished or authorized by PRESSTEK, or the failure to properly
maintain the same where the problem arises from XEROX-supplied components or
software; accident, transportation, neglect or misuse; alterations, which shall
include, but not be limited to, installation or removal features or any other
modification, whenever any of the foregoing is
-15-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
preformed by entities or persons other than PRESSTEK or authorized by PRESSTEK;
failure to provide and maintain a suitable installation environment, with all
facilities prescribed by the appropriate specifications therefor (including, but
not limited to, failure of, or failure to provide, adequate electrical power,
air conditioning or humidity control) or from use of supplies or materials not
meeting such specifications; the use of the Presses for other than the purposes
for which they were designed; service of Presses or components which have been
modified, removed, installed or re-installed by someone other than PRESSTEK's
support personnel or its authorized representatives (including without
limitation XEROX); the Press has not been properly installed, used, and
maintained in accordance with the operating instructions and maintenance manuals
supplied by PRESSTEK; XEROX' failure to notify PRESSTEK in writing during the
warranty period with details on any defect or error in the Product; the Product
has been modified, changed, repaired, reconfigured or adapted in any manner
whatsoever without the express written consent of PRESSTEK; and evidence of
physical abuse or other catastrophic causes external to the Press has occurred
resulting in the necessity for repair or replacements, to the extent the
foregoing is not caused by PRESSTEK, its representatives, agents and/or
independent contractors.
g. New Warranties. All Product(s) repaired or replaced by
PRESSTEK under this Section shall be subject to XEROX' inspection and acceptance
in accordance with the provisions of this Agreement, and if accepted, shall be
extended new warranties in accordance herewith.
h. Limitation. PRESSTEK MAKES NO REPRESENTATION OR WARRANTY
WITH RESPECT TO THE PRODUCTS SUBJECT TO THIS AMENDED AGREEMENT OTHER THAN THOSE
SET FORTH IN THIS SECTION. THE WARRANTY STATED HEREIN IS EXPRESSLY IN LIEU OF
ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY
EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, AND SUCH WARRANTY CONSTITUTES THE ONLY WARRANTY MADE BY PRESSTEK WITH
RESPECT TO THIS AMENDED AGREEMENT OR THE PRODUCT TO BE SUPPLIED HEREBY.
13. EXCLUSIVITY. Provided XEROX meets the threshold purchase volumes of
PAX Presses established pursuant to this Section, XEROX shall have an exclusive
marketing and sales right in [CONFIDENTIAL TREATMENT REQUESTED]/*/ to purchase
and resell the PAX Press and associated Consumables, and PRESSTEK shall not
distribute the PAX Press itself or through any third party, including without
limitation the third party manufacturer, during the period of such exclusivity.
For [CONFIDENTIAL TREATMENT REQUESTED]/*/, XEROX has the option, on a
country-by-country basis, to open the country (that is, conduct marketing,
sales, and distribution in the particular country), or engage an agent (with
Presstek support) and maintain exclusivity for that country. XEROX will provide
to PRESSTEK by [CONFIDENTIAL TREATMENT REQUESTED]/*/, a list of [CONFIDENTIAL
TREATMENT REQUESTED]/*/ countries [CONFIDENTIAL TREATMENT REQUESTED]/*/
-16-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
within which it intends to conduct marketing, sales and distribution on an
exclusive basis.
During any period in which Xerox has the exclusive rights set forth
above, XEROX shall have semi-exclusive rights for co-marketing, co-selling and
co-distributing the PAX press outside of [CONFIDENTIAL TREATMENT REQUESTED]/*/
and [CONFIDENTIAL TREATMENT REQUESTED]/*/.
If XEROX fails to meet the threshold purchase volumes for new Presses
(above the early customer configuration units) established pursuant to this
Section (except as a result of PRESSTEK's failure to deliver ordered Presses
which comply with the applicable Specifications or to otherwise comply with its
obligations hereunder), then PRESSTEK shall have the right to terminate the
exclusivity of XEROX' marketing and sales right and to convert it to a worldwide
semi-exclusive marketing and sales right upon written notice to XEROX.
[CONFIDENTIAL TREATMENT REQUESTED]/*/
a. PAX Press Purchase Threshold. In order to obtain the
exclusive marketing and sales right with respect to the PAX Press and associated
Consumables, XEROX must purchase from PRESSTEK [CONFIDENTIAL TREATMENT
REQUESTED]/*/ PAX Presses in the [CONFIDENTIAL TREATMENT REQUESTED]/*/ period
commencing on the date of first commercial shipment of Presses (beyond the early
customer configuration units). To maintain its exclusive marketing and sales
right for subsequent [CONFIDENTIAL TREATMENT REQUESTED]/*/ periods, XEROX shall
purchase at least [CONFIDENTIAL TREATMENT REQUESTED]/*/ PAX Presses during each
such subsequent [CONFIDENTIAL TREATMENT REQUESTED]/*/ period. The parties shall
negotiate in good faith and mutually agree as to what these threshold volumes
will be in the fourth quarter of each year. If by the end of the [CONFIDENTIAL
TREATMENT REQUESTED]/*/ of any [CONFIDENTIAL TREATMENT REQUESTED]/*/ period, the
total number of PAX Presses purchased and forecast for purchase for the
remainder of that [CONFIDENTIAL TREATMENT REQUESTED]/*/ period falls below the
annual threshold of PAX Presses for exclusivity threshold for any [CONFIDENTIAL
TREATMENT REQUESTED]/*/ period, or if XEROX fails to purchase at least
[CONFIDENTIAL TREATMENT REQUESTED]/*/ percent of the annual threshold of PAX
Presses for any [CONFIDENTIAL TREATMENT REQUESTED]/*/ period for each of
[CONFIDENTIAL TREATMENT REQUESTED]/*/, and such failure is not due either to
PRESSTEK's breach or a force majeure event, then PRESSTEK may, in its
discretion, terminate XEROX' exclusivity for the PAX Press upon written notice
to XEROX and render the distribution rights granted herein to the PAX Press to
be [CONFIDENTIAL TREATMENT REQUESTED]/*/.
To maintain its [CONFIDENTIAL TREATMENT REQUESTED]/*/ marketing and sales right
with respect to the PAX Press and its associated Consumables, XEROX must
purchase from PRESSTEK [CONFIDENTIAL TREATMENT REQUESTED]/*/ PAX Presses in the
[CONFIDENTIAL TREATMENT REQUESTED]/*/ period commencing on the expiration of
exclusivity period. To maintain its [CONFIDENTIAL TREATMENT REQUESTED]/*/
marketing and sales right for subsequent [CONFIDENTIAL TREATMENT REQUESTED]/*/
periods, XEROX purchases of PAX Presses shall be at least [CONFIDENTIAL
TREATMENT REQUESTED]/*/ PAX Presses during each such [CONFIDENTIAL TREATMENT
REQUESTED]/*/ period. The parties shall negotiate in good faith and mutually
agree as to what these threshold volumes will be in the [CONFIDENTIAL TREATMENT
REQUESTED]/*/ of each [CONFIDENTIAL TREATMENT REQUESTED]/*/. If by the end of
the [CONFIDENTIAL TREATMENT REQUESTED]/*/ of any [CONFIDENTIAL TREATMENT
REQUESTED]/*/ period, the total number of PAX Presses purchased and ordered for
the remainder of that period falls below the annual threshold for that
[CONFIDENTIAL TREATMENT REQUESTED]/*/ period, or if XEROX fails to purchase at
least [CONFIDENTIAL TREATMENT REQUESTED]/*/ percent of the annual threshold for
that [CONFIDENTIAL TREATMENT REQUESTED]/*/ period for each of [CONFIDENTIAL
TREATMENT REQUESTED]/*/, and such failure is not due either to PRESSTEK's breach
or a force majeure event, then PRESSTEK may, in its discretion, terminate XEROX'
rights of semi-exclusivity upon written notice to XEROX and render the
distribution rights granted herein to the PAX Press to be non-exclusive.
-17-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
b. SUN Press Purchase Threshold. As to the SUN Press and
associated Consumables, XEROX shall have a [CONFIDENTIAL TREATMENT REQUESTED]/*/
sales and marketing right along with third party manufacturer Ryobi, provided
that XEROX' purchases of the SUN Press during the term of this Amended Agreement
are at least [CONFIDENTIAL TREATMENT REQUESTED]/*/ SUN Presses for each
[CONFIDENTIAL TREATMENT REQUESTED]/*/ period commencing on the date of first
commercial shipment of Presses (beyond the early customer configuration units).
The parties shall negotiate in good faith and mutually agree as to what these
threshold volumes will be in the [CONFIDENTIAL TREATMENT REQUESTED]/*/ of each
year. If by the end of the [CONFIDENTIAL TREATMENT REQUESTED]/*/ of any such
[CONFIDENTIAL TREATMENT REQUESTED]/*/ period, the total number of SUN Presses
purchased and ordered for the remainder of that period falls below the annual
threshold for that [CONFIDENTIAL TREATMENT REQUESTED]/*/ period, or if XEROX
fails to purchase at least [CONFIDENTIAL TREATMENT REQUESTED]/*/ percent of the
annual threshold for that [CONFIDENTIAL TREATMENT REQUESTED]/*/ period for each
of [CONFIDENTIAL TREATMENT REQUESTED]/*/, and such failure is not due either to
PRESSTEK's breach or a force majeure event, then PRESSTEK may, in its
discretion, terminate XEROX' exclusivity upon written notice to XEROX and render
the distribution rights granted herein to the SUN PRESS be non-exclusive.
14. DOCUMENTATION AND ESCROW.
a. Sales & Service Documentation. PRESSTEK shall provide to
XEROX, at no cost, all engineering drawings and documentation (by part number)
which, in XEROX' reasonable opinion, are necessary or appropriate to fulfill
XEROX' service obligations for the Product(s), at such time as XEROX assumes
service obligations or no longer contracts with PRESSTEK to provide service of
Products. PRESSTEK shall furnish to XEROX, on an ongoing basis during the term
hereof, free of charge, Documentation as XEROX may reasonably request in English
and other languages to be mutually agreed. In accordance with the foregoing,
XEROX may, at its option and expense, include Product descriptions and other
information in any XEROX or XEROX Company literature, prepare XEROX and XEROX
Company promotional literature relating to Products and distribute the same to
its sales force and customers, and include portions of PRESSTEK's copyrighted
works in such literature.
b. Customer Documentation and Other Information. PRESSTEK will
provide at no cost to XEROX one (1) full, complete and accurate set of user or
operator manuals for the Products (in the English and other languages mutually
agreed) so that XEROX and XEROX Companies can, on a periodic basis and as new
changes or additions occur, make copies thereof and distribute the same to its
sales force and customers. During the term of this Agreement, XEROX and XEROX
Companies may also include Product(s) description and information in any XEROX
or XEROX Company literature. The distribution of such literature by XEROX and
XEROX Companies will be at their sole expense.
c. Escrow. With respect to software components of the
Products, the parties shall execute within thirty (30) days of the date of
execution hereof an Escrow Agreement in substantially the form of the Escrow
Agreement attached hereto as Exhibit I with a third-party escrow agent to permit
access to PRESSTEK's software or source code for the Products upon any material
failure by PRESSTEK to maintain and/or support the software embedded in the
Products.
-18-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
15. SOFTWARE/FIRMWARE LICENSE. XEROX and XEROX Companies shall have the
worldwide, perpetual, non-transferable, royalty-free right and license to
distribute, market, lease and sublicense the Press operating software and
firmware encompassed within such Presses for internal use only in connection
with such Press, by itself or through XEROX-authorized dealers or distributors,
where and when, and under terms and conditions as determined by XEROX and XEROX
Companies, in connection with the marketing of the product(s). The license shall
be a nonexclusive, perpetual, internal use license to use the object code
version of the software or firmware on the Presses, and upon Xerox' election to
assume responsibility for servicing Products pursuant to the terms of the
Amended Service Agreement, the foregoing license will extend to, and PRESSTEK
will provide to Xerox, any and all diagnostic software used to service the
Presses. The license granted in this Amended Agreement extends to and includes
Updates and Maintenance Modifications. PRESSTEK will provide XEROX written
notification of pending new Updates and Maintenance Modifications together with
the availability thereof sufficiently in advance of publication in order for
XEROX to react in a timely manner. Neither XEROX, its dealers, distributors or
the customer may copy, reproduce, sublicense or modify the software or firmware
embedded in the Press without PRESSTEK's written consent. Neither XEROX, its
dealers, distributors or the customer shall reverse engineer, disassemble,
decompile or analyze the source code of the software or firmware. Neither XEROX,
its dealers, distributors nor any customer shall remove or alter any copyright
or other intellectual property notice placed in the software or firmware.
16. INSTALLATION, SERVICE SUPPORT AND TRAINING. PRESSTEK agrees to
provide customer installation, technical support and training pursuant to the
terms of Exhibit J under the prices set forth in Exhibit J-2. Additional service
offerings and options will be set forth in future addenda as required.
17. REFURBISHMENT OF PRESSES. In the event Product(s) are returned to
XEROX after Xerox' sale, lease, or license thereof, XEROX has the right, without
payment or remuneration of any kind or type to PRESSTEK, to use, [CONFIDENTIAL
TREATMENT REQUESTED]/*/, or [CONFIDENTIAL TREATMENT REQUESTED]/*/ and thereafter
remarket such Product(s). Such processes may include by way of illustration and
not of limitation disassembly of Product(s) to a standard determined by XEROX,
the addition of new, used, or reprocessed components cleaning, refinishing, and
retrofitting Product(s) with all applicable retrofits. However, XEROX' right to
remarket Product(s) is not contingent upon XEROX' [CONFIDENTIAL TREATMENT
REQUESTED]/*/ or [CONFIDENTIAL TREATMENT REQUESTED]/*/ of the Product(s) and
such [CONFIDENTIAL TREATMENT REQUESTED]/*/ or [CONFIDENTIAL TREATMENT
REQUESTED]/*/ by XEROX shall be deemed a repair of the Product(s). Such
[CONFIDENTIAL TREATMENT REQUESTED]/*/ or [CONFIDENTIAL TREATMENT REQUESTED]/*/
and thereafter remarketing of Product(s) by XEROX shall not be deemed nor
constitute a violation by XEROX of any of PRESSTEK's rights, including but not
limited to PRESSTEK's patents rights respecting the Product(s). PRESSTEK shall
have no warranty obligations as to any unit of Product(s) [CONFIDENTIAL
TREATMENT REQUESTED]/*/ by XEROX. Included in such rights is the right to
re-license the software component without payment of any additional fees or
royalties to PRESSTEK. PRESSTEK will provide Press [CONFIDENTIAL TREATMENT
REQUESTED]/*/ services to XEROX on a time and materials basis, based on
PRESSTEK's prevailing rates. Upon written request by XEROX to PRESSTEK for
[CONFIDENTIAL TREATMENT REQUESTED]/*/ services, PRESSTEK will provide XEROX a
written cost estimate for work required for the final state of
-19-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
the [CONFIDENTIAL TREATMENT REQUESTED]/*/ required, including location of work
to be conducted, within [CONFIDENTIAL TREATMENT REQUESTED]/*/ of receipt of such
request. Work will commence on PRESSTEK's receipt of a XEROX purchase order.
PRESSTEK will use commercially reasonable efforts to minimize costs and time of
such services. All costs including transport shall be borne by XEROX. Payment
shall be received by PRESSTEK within [CONFIDENTIAL TREATMENT REQUESTED]/*/ from
delivery of a correct invoice.
18. [CONFIDENTIAL TREATMENT REQUESTED]/*/ COOPERATION. PRESSTEK will
use commercially reasonable efforts to cooperate with XEROX to support the
development of an appropriate [CONFIDENTIAL TREATMENT REQUESTED]/*/ interface
for PRESSTEK Presses and will work with XEROX personnel to this end. The parties
will agree in writing on a development schedule, budget, milestones and
deliverables, and proprietary rights with respect to any such development, with
mutually agreeable allocation of costs and expenses, before undertaking any
development work or commitment of resources.
19. TECHNOLOGY IMPROVEMENTS. PRESSTEK will use reasonable commercial
efforts to provide engineering changes and/or improvements in the Presses upon
request by XEROX. Mutually agreed upon reliability engineering changes which are
necessitated by unreasonable failures of Press components will be performed by
PRESSTEK at PRESSTEK's expense. All other engineering change requests or
improvements will be done on a cost-plus-fee basis to be mutually agreed upon
between the parties. All improvements, modifications, enhancements, new features
or functionality added to the subject Presses shall be subject to the parties'
written agreement.
20. COMMERCIAL COOPERATION. The parties will negotiate a mutually
agreeable business process for administering and implementing this Agreement.
21. INDEMNITY.
a. By PRESSTEK. PRESSTEK agrees, at its expense, to defend,
indemnify and hold XEROX, XEROX Companies, and their respective authorized
resellers, customers and officers, directors, employees and representatives
("Indemnities") harmless from any suit claim, demand, cause of action or
proceeding asserted by a third party against any of the indemnities alleging (i)
that any Product(s) violates any applicable safety or regulatory standard or has
caused personal injury (including death) or damage to property or (ii) the
infringement or misappropriation of such third party's intellectual property
rights (a "Claim"), provided that PRESSTEK is notified of the Claim by XEROX
within a reasonable time after XEROX learns of it, is given all reasonable
assistance by XEROX necessary for PRESSTEK to perform its obligations in respect
of the Claim and is given the sole right to control the defense and settlement
of the Claim.
b. Injunction; Disclaimer. Should the Products become, or in
PRESSTEK's opinion, be likely to become, the subject of a claim for infringement
under this section, PRESSTEK may (i) at its own expense and option, either
procure for XEROX the right to continue using such Subject Presses or replace
the same with non-infringing components having substantially equivalent features
and functionality, or modify the system so that it becomes non-infringing with
substantially equivalent features and functionality, or (ii) at XEROX' option,
-20-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
remove and return the Subject Press and refund to XEROX a portion of the
payments received by PRESSTEK on the then aggregate depreciated value of the
Subject Press purchased under this Amended Agreement (after deducting the time
for XEROX' customers' use and operation of the Subject Press prior to the time
of any final determination of infringement against PRESSTEK). PRESSTEK shall not
be obligated to defend or be liable for costs and/or damages under this section
if the alleged infringement arises out of a combination with or an addition to
PRESSTEK's software or equipment of equipment, devices or software not supplied
by PRESSTEK or with PRESSTEK's knowledge and consent, or from a modification,
service or support of the equipment or software after delivery by any person
other than PRESSTEK and/or its representatives, agents and independent
contractors. XEROX shall have the option to procure continued use at its own
expense.
c. By XEROX. XEROX shall indemnify and hold PRESSTEK and its
officers, directors, employees and representatives harmless from all claims,
losses, and damages which may arise from XEROX' installation or support of the
Products, including claims of customers based on misrepresentations made by
XEROX, inadequate installation, support or assistance by XEROX. XEROX shall, at
its expense, indemnify, hold harmless and, at the PRESSTEK's request, defend
PRESSTEK and its manufacturers, from and against any and all loss, cost,
liability or expense (including costs and reasonable fees of attorneys and other
professionals) arising out of or in connection with XEROX' performance under
this Amended Agreement to the extent caused by any negligent act or omission or
willful misconduct of XEROX or XEROX' employees or independent contractors.
22. LIMITATION OF LIABILITY. EXCEPT FOR THE PARTIES' OBLIGATIONS OF
INDEMNITY AS EXPRESSLY PROVIDED IN SECTION 21 OF THIS AGREEMENT, WHICH SHALL BE
GOVERNED BY THEIR TERMS, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
OR ANY OTHER PERSON FOR ANY SPECIAL, PUNITIVE, INCIDENTAL, CONSEQUENTIAL, OR
OTHER INDIRECT DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO, LOSS OF
PROFITS OR DAMAGES TO ANY PARTY'S BUSINESS REPUTATION OR GOODWILL, HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN AN ACTION FOR CONTRACT, STRICT
LIABILITY OR TORT (INCLUDING NEGLIGENCE) OR ANY OTHER LEGAL OR EQUITABLE
GROUNDS, WHETHER OR NOT THE FIRST PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGE AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY,
AND IN NO EVENT SHALL THE AGGREGATE LIABILITY OF EITHER PARTY FOR ALL CLAIMS OF
ANY KIND ARISING IN CONNECTION WITH THIS AGREEMENT, THE PRODUCTS, OR ANY OTHER
MATERIALS OR SERVICES FURNISHED HEREUNDER EXCEED THE GREATER OF US
$[CONFIDENTIAL TREATMENT REQUESTED]/*/ OR THE PURCHASE PRICE OF PRODUCTS
(INCLUDING THE TECHNOLOGY DISTRIBUTION FEE) OUT OF WHICH SUCH CLAIM ARISES.
SECTION 21, INDEMNITY, STATES THE EXCLUSIVE LIABILITY AND OBLIGATION OF
PRESSTEK, AND THE EXCLUSIVE REMEDY OF XEROX, WITH RESPECT TO ANY CLAIM, SUIT OR
PROCEEDING INVOLVING ACTUAL OR ALLEGED INFRINGEMENT OF ANY INTELLECTUAL PROPERTY
OF ANY THIRD PARTY IN CONNECTION WITH THE
-21-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
SALE AND DISTRIBUTION OF THE PRODUCTS.
23. TERM AND TERMINATION.
a. Term. The term of this Amended Agreement shall commence
upon the Effective Date and continue in full force and effect until
[CONFIDENTIAL TREATMENT REQUESTED]/*/. The parties agree that not less than 180
days prior to the expiration of any term or renewal term, either party may
notify the other party in writing of nonrenewal or, in the absence of such
notification, the parties agree to negotiate in good faith any modifications
and/or other terms and conditions for such renewal. The provisions of this
Section shall not apply to the sale of Spares, which shall be governed solely by
the provisions of Exhibit J.
b. Termination for Cause. In addition to XEROX' rights under
Section 11(e), either party may terminate this Amended Agreement, or any
Purchase Order issued under this Amended Agreement effective immediately upon
written notice of termination to the other party in any of the following events:
(i) If the other party materially breaches this
Amended Agreement and such breach, if curable, is not cured within
sixty (60) days after written notice of breach by the terminating
party;
(ii) If the other party's performance is delayed for
more than ninety (90) days for any reason, including Force Majeure
delays; or
(iii) If a petition for relief under applicable
bankruptcy regulations is filed by or against the other party, or the
other party makes an assignment for the benefit of creditors, or a
receiver is appointed to manage its assets, and such petition,
assignment is not dismissed, vacated or terminated within ninety (90)
days. To the extent applicable law prevents the non-terminating party
from terminating this Amended Agreement as described above, then the
parties shall have only those rights and remedies permitted by
applicable law, including the United States Bankruptcy Act, including
but not limited to 11 U.S.C. Section 365. Any such termination shall be
automatically effective at the end of any applicable notice period if
any.
c. Continuity of Supply. If XEROX is committed to supply
Product(s) to its customers beyond such termination or expiration date, PRESSTEK
and XEROX agree to negotiate in good faith, and in a timely manner, terms and
conditions to allow XEROX to fulfill such commitments. In the absence of
agreement as to such terms and conditions, the parties agree to submit such
dispute to arbitration as set forth in Section 33 hereof, and PRESSTEK shall
continue to deliver Products to XEROX during the pendency of such arbitration at
price levels which were in effect immediately prior to such termination or
expiration. The arbitration can result in a retroactive change of the aforesaid
price levels.
d. Liability Limitation. Except as otherwise set forth in this
Amended Agreement or with respect to obligations which survive its termination
or expiration (as
-22-
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
{PAGE}
applicable), XEROX' sole liability to PRESSTEK shall be for the payment of any
balance due and owing for conforming Products delivered prior to the effective
date of termination or expiration or within the firm forecast period, and XEROX
shall have no further liability whatsoever hereunder, including without
limitation or inventory, raw materials, work in process, components, or any
other expenses or damages. In the event of any breach the nonbreaching party
reserves all rights to pursue any and all legal remedies available for such
breach subject to the terms hereof.
e. Continuity of Service. XEROX shall retain all rights and
documentation necessary to continue servicing Product(s) sold and/or licensed
hereunder prior to any breach and the right to dispose of its inventory of
Product(s), subject to all payment obligations to PRESSTEK.
f. Survival. Any termination of this Amended Agreement shall
not serve to eliminate any liability arising out of conduct prior to the actual
date of termination, including any uncontested accrued payment obligation, and
either party may, following such termination, pursue such remedies as may be
available with respect to such liabilities. Any and all such payments accrued
hereunder as of the date of termination shall remain due and payable in
accordance with the terms hereof. Termination of this Amended Agreement shall
immediately terminate all licenses hereunder to the software or firmware within
the Presses, except for licenses to the software or firmware for Presses which
have been previously paid for by XEROX or Presses previously sold to customers.
24. Compliance with Laws. PRESSTEK and its manufacturers shall comply
in all material respects with (a) any applicable governmental laws and
regulations (including without limitation the Federal Trade Commission's
Enforcement Policy Statement on U.S. Origin Claims (62 F.R. 63756 [December 2,
1997]); (b) applicable governmental environmental and safety regulations and
standards (without self-certification in European Union countries, where
independent third party certification shall be obtained); and (c) those XEROX
requirements which are set forth in the Specifications applicable to this
Amended Agreement and which are in effect at the time of shipment of all
Product(s) hereunder where such approval applies to PRESSTEK and its
manufacturers. From time to time it may be necessary for the parties to review
the Amended Agreement and update the information for current requirements.
PRESSTEK shall obtain, at no cost to XEROX, full Regulatory Agency approvals as
required for Product(s) in accordance with the schedules shown in the
Specification where such approval applies to PRESSTEK/its manufacturers.
PRESSTEK shall obtain, at no cost to XEROX, any required Regulatory Agency
reapprovals for any Product(s) which are modified in any authorized manner
hereunder.
25. RELATIONSHIP OF THE PARTIES. Nothing contained in this Amended
Agreement shall be deemed to (a) make either party or any employee of such party
the agent, employee, joint venturer or partner of the other party; pr (b)
provide either party or any employee of such party with the power or authority
to act on behalf of the other party or to bind the other party to any contract,
agreement or arrangement with any other person. During the term of this
-23-
{PAGE}
Agreement, if the term "partnership", "partner" or "development partner" or the
like is used to describe the parties' relationship, XEROX and PRESSTEK agree to
make it clear to third parties that these terms refer only to the spirit of
cooperation between them and neither describe, nor expressly or implicitly
create, the legal status of partners or joint venturers. All personnel employed
or otherwise engaged by either party shall be the agents, servants, and
employees of such party only, and the other party shall incur no obligations or
liabilities, express or implied, by reason of the conduct of such personnel.
26. WAIVER. Waiver by either party hereto of any breach or default by
the other party if any of the terms and conditions of this Amended Agreement
shall not operate as a waiver of any other breach or default, whether similar to
or different from the breach or default waived.
27. COSTS AND EXPENSES. Except as otherwise provided in this Agreement,
each party hereto shall be responsible for its own expenses incurred in
connection with the performance of its obligations under such agreements.
28. ENTIRE AGREEMENT. This Agreement, together with all Exhibits,
represents the entire understanding and agreement between the parties hereto
with regard to the Products and supersedes all prior negotiations,
representations, and agreements made by and between the parties. No alteration,
amendment or modification of any of the terms or provisions of this Amended
Agreement shall be valid unless made pursuant to an instrument in writing signed
by each of the parties hereto; provided however, that the waiver by either party
hereto of compliance by the other party with any provision hereof or of any
breach or default of such other party need by signed only by the party waiving
such provision, breach or default.
29. GOVERNING LAW. This Amended Agreement and the Confidentiality
Amended Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York without regard to its conflict of laws principles.
Any action to enforce the terms of this Amended Agreement shall take place in
the courts located in the State of New York and the parties consent to the venue
and jurisdiction of such courts. The parties specifically agree that the 1980
United Nations Convention on Contracts for the International Sale of Goods, as
such may be amended from time to time, shall not apply to this Agreement. The
definitions set forth in the Incoterms of the International Chamber of Commerce,
2000 edition, shall be controlling.
30. NON-ASSIGNMENT. A party to this Amended Agreement may not assign
its rights and obligations under this Amended Agreement without the consent of
the other party; provided, however, that each party may assign this Amended
Agreement in connection with (a) the sale of all or substantially all of the
capital stock or assets of such party, or (b) the acquisition by a third party
of a party to this Amended Agreement by merger, consolidation, reorganization or
other business combination whereby more than fifty (50) percent of the voting
securities of a party to this Amended Agreement are sold or transferred to a
third party (a "Business Combination"). Notwithstanding the foregoing, in the
event of a [CONFIDENTIAL TREATMENT REQUESTED]/*/, XEROX shall have the right to
[CONFIDENTIAL TREATMENT REQUESTED]/*/
----------------------------
/*/[CONFIDENTIAL TREATMENT REQUESTED] Indicates material that has been omitted
and for which confidential treatment has been requested. All such omitted
material has been filed with the Commission pursuant to Rule 24b-2 promulgated
under the Securities and Exchange Act of 1934, as amended.
-24-
{PAGE}
and as further provided in Section 23(d). Both parties agree, however, that
PRESSTEK may delegate a portion of its obligations pursuant to this Amended
Agreement to its subcontractors and manufacturers, provided that PRESSTEX
contractually obligates and guarantees the performance of the foregoing and
indemnifies XEROX against any and all claims, losses, demands, causes of action
or other liability which may arise in connection with such delegation, subject
to the terms of this Agreement, including sections relating to warranty,
indemnity and limitation of liability.
31. NOTICES. All notices provided for in this Amended Agreement shall
be effective when they are served either by personal delivery, or sent by letter
by overnight courier service with acknowledgment of receipt required, or sent by
facsimile to the receiving party at the following address:
If to PRESSTEK:
---------------
Messrs. Richard A. Williams and Robert W. Hallman
PRESSTEK, Inc.
55 Executive Drive
Hudson, New Hampshire 03051
Fax: (603) 886-6743
With a copy to:Daniel Ebenstein, Esq.
Amster, Rothstein & Ebenstein
90 Park Avenue
New York, NY 10016
Fax: (212) 286-0854
If to XEROX:
------------
Gerhard Moll
Mailstop 129-
800 Phillips Road
Webster NY 14580
With a copy to:
Sarah Beisheim, Esq.
XEROX Square MS 21-D
100 S. Clinton Ave.
Rochester NY 14644
or such other addresses either party shall hereinafter designate in writing to
the other party.
32. INVALIDITY OF PROVISIONS. If any of the provisions of this Amended
Agreement shall contravene the laws of any country, it is agreed that such
invalidity or illegality shall not invalidate the whole agreement, but such
agreement shall be construed as if it did not
-25-
{PAGE}
contain the provisions claimed or held to be invalid or illegal in the
particular jurisdiction concerned, insofar as such construction does not
materially affect the substance of such agreement, and the rights and
obligations of the parties hereto shall be construed and enforced accordingly.
In the event, however, that such claimed invalidity or illegality shall
substantially alter the relationship between the parties hereto materially
affecting adversely the interest of either party in such jurisdiction, then the
parties hereto shall negotiate an alternative provision not conflicting with
such laws so as to maintain, to the degree reasonably possible, the business and
economic benefits and liabilities of such agreement as initially established. If
such invalidity or illegibility is such that it is not possible to reasonably
restore the business and economic benefits and liabilities of the parties, then
the party whose interests are adversely affected shall have the right to
terminate that portion of this Amended Agreement as is materially impacted by
such invalidity or illegibility.
33. ARBITRATION. In the event of any dispute, controversy or claim
arising out of, in connection with, or in relation to this Amended Agreement or
breach thereof, the parties shall attempt to resolve such matter by means of
mediation between and among the senior executives of PRESSTEK and XEROX. In the
event such mediation is unsuccessful after 60 days, then any such dispute,
controversy or claim arising out of, in connection with, or in relation to this
Amended Agreement or breach thereof (except for claims for which equitable
relief is sought or claims related to infringement) shall be settled by
arbitration in accordance with the rules of the American Arbitration Association
then in force. The parties agree to (i) appoint an arbitrator who is
knowledgeable in and familiar with the printing and imaging industry, and
instruct the arbitrator to follow substantive rules of law; (ii) require the
testimony to be transcribed; and (iii) require the award to be accompanied by
findings of fact and a statement of reasons for the decision. The arbitrator
shall have the authority to permit discovery, to the extent deemed appropriate
by the arbitrator, upon request of a party. The arbitrator shall have no power
or authority to add to or detract from the written agreement of the parties. All
costs and expenses, including attorneys' and the arbitrator's fees, of all
parties incurred in any dispute which is determined and/or settled by
arbitration pursuant to this section shall be borne equally by the parties..
Except where clearly prevented by the area of dispute, both parties agree to
continue performing their respective obligations under this Amended Agreement
while the dispute is being resolved. Any award shall be final, binding and
conclusive upon the parties and a judgment rendered thereon may be entered in
any court having jurisdiction thereof. This Section shall not limit the right of
any party to sue for injunctive relief, for a breach of the confidential
obligations under the Confidentiality Agreement, for indemnified matter or a
violation of the license rights granted herein. Arbitration shall be held in New
York, New York.
34. Export Control. PRESSTEK and XEROX shall comply in all material
respects with all applicable laws and regulations respecting the export,
directly or indirectly, of any technical data acquired fro