-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B83BTs5nFwt0kYItzoqV2e3pJnGtehOuvZgNySNv1VhYyWAVjYoHPvZZidPX1ebC rrCdO6CRVWQaJuml/Fod6w== 0000950109-96-005418.txt : 19960820 0000950109-96-005418.hdr.sgml : 19960820 ACCESSION NUMBER: 0000950109-96-005418 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19960819 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPLASH TECHNOLOGY HOLDINGS INC CENTRAL INDEX KEY: 0001020394 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 770418472 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-09591 FILM NUMBER: 96617369 BUSINESS ADDRESS: STREET 1: 555 DEL REY AVE CITY: SUNNYVALE STATE: CA ZIP: 94086 BUSINESS PHONE: 4083286300 MAIL ADDRESS: STREET 1: 555 DEL REY AVE CITY: SUNNYVALE STATE: CA ZIP: 94086 S-1/A 1 FORM S-1 AMENDMENT #1 As filed with the Securities and Exchange Commission on August 19, 1996 Registration No. 333-09591 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________________ AMENDMENT NO. 1 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 __________________________ SPLASH TECHNOLOGY HOLDINGS, INC. (Exact Name of Registrant as Specified in Its Charter) _____________________________________ DELAWARE 3577 77-0418472 ----------------- (State or other (Primary Standard (I.R.S. Employer jurisdiction of Industrial Identification No.) Incorporation or Classification Organization) Code Number) ______________________ 555 DEL REY AVENUE SUNNYVALE, CALIFORNIA 94086 (408) 328-6300 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) ___________________________________ KEVIN K. MACGILLIVRAY PRESIDENT AND CHIEF EXECUTIVE OFFICER SPLASH TECHNOLOGY HOLDINGS, INC. 555 DEL REY AVENUE SUNNYVALE, CALIFORNIA 94086 (408) 328-6300 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service) _________________________________ Copies to: JEFFREY D. SAPER, ESQ. CARLA S. NEWELL, ESQ. HOWARD S. ZEPRUN, ESQ. ANTHONY M. ALLEN, ESQ. BRETT D. BYERS, ESQ. GUNDERSON DETTMER STOUGH WILSON SONSINI GOODRICH & ROSATI, VILLENEUVE FRANKLIN & HACHIGIAN, LLP PROFESSIONAL CORPORATION 600 HANSEN WAY, SECOND FLOOR 650 PAGE MILL ROAD PALO ALTO, CALIFORNIA 94304 PALO ALTO, CALIFORNIA 94304-1050 (415) 843-0500 (415) 493-9300 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If this Form is filed to register additional securities for an Offering pursuant to rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same Offering.[_] ___________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same Offering.[_] ___________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box. [_]
CALCULATION OF REGISTRATION FEE ============================================================================================================ TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED (1) OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE PER SHARE (2) PRICE (1) (2) - ------------------------------------------------------------------------------------------------------------ Common Stock, $0.001 par value . shares $. $34,500,000 $11,896.64 ============================================================================================================ ============================================================================================================
(1) Includes up to . shares of Common Stock ($4,500,000 aggregate offering price) which may be purchased by the Underwriters to cover over-allotments, if any. (2) Estimated pursuant to Rule 457(a) solely for the purpose of calculating the registration fee. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ The purpose of this Amendment No. 1 is solely to file certain exhibits to the Registration Statement, as set forth below in Item 16(a) of Part II. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable in connection with the sale of the Common Stock being registered hereby. All amounts are estimates except the SEC registration fee and the NASD filing fee.
AMOUNT TO BE PAID BY REGISTRANT -------------- SEC Registration Fee..................................... $ 11,897 NASD Filing Fee.......................................... 3,950 Nasdaq National Market Application Fee................... 50,000 Printing................................................. 160,000 Legal Fees and Expenses.................................. 250,000 Accounting Fees and Expenses............................. 410,000 Blue Sky Fees and Expenses............................... 15,000 Director and Officer Liability Insurance................. 250,000 Custodial Fees........................................... 2,500 Transfer Agent and Registrar Fees........................ 10,000 Miscellaneous............................................ 36,653 -------- Total............................................... $1,200,000 =========
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 145 of the Delaware General Corporation Law (the "Delaware Law") authorizes a court to award, or a corporation's Board of Directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933, as amended (the "Securities Act"). Article Ten of the Registrant's Certificate of Incorporation (Exhibit 3.1 hereto) and Article VI of the Registrant's Bylaws (Exhibit 3.2 hereto) provide for indemnification of the Registrant's directors, officers, employees and other agents to the maximum extent permitted by Delaware Law. In addition, the Registrant has entered into Indemnification Agreements (Exhibit 10.1 hereto) with its officers and directors. The Underwriting Agreement (Exhibit 1.1) also provides for cross-indemnification among the Company and the Underwriters with respect to certain matters, including matters arising under the Securities Act. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES Since September 30, 1995, the Registrant has issued and sold the following unregistered securities: 1. On January 30, 1996, the Registrant issued and sold an aggregate of 152,500 shares of Common Stock to four members of management pursuant to restricted stock purchase agreements for aggregate cash consideration of $6,100. 2. On January 30, 1996, the Registrant issued and sold an aggregate of 15,426 shares of mandatorily redeemable Series A Preferred Stock to Summit Subordinated Debt Fund, Summit Ventures IV, L.P., Summit II-1 Investors III, L.P., Sigma Partners III, L.P., sigma Associates III, L.P. and Sigma Investors III, L.P. pursuant to the Purchase Agreement for an aggregate cash consideration of $15,426. 3. On January 30, 1996, the Registrant issued and sold an aggregate of 4,282 shares of Series B Preferred Stock to Radius Inc. in return for a portion of its ownership of Splash Technology, Inc. 4. On January 31, 1996, the Registrant issued a warrant to purchase an aggregate of 2,500 shares of Common Stock to Imperial Bank for an aggregate cash consideration of $1.00. There was no underwriter involved in connection with any transaction set forth above. The issuances of the securities set forth in paragraph 1 of this Item 15 were deemed to be exempt from registration under the Securities Act in reliance upon Rule 701 promulgated thereunder. The other issuances set forth in this Item 15 were deemed to be exempt from registration pursuant to Section 4(2) of the Securities Act and Regulation D promulgated thereunder as a transaction by an issuer not involving a public offering. In all of such transactions, the recipients of securities represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the securities issued. ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES (A) EXHIBITS.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT ----------- ------------------------------------------------ 1.1 Form of Underwriting Agreement. 2.1 Merger Agreement, dated December 21, 1995, among Summit Subordinated Debt Fund, L.P., Summit Ventures IV, L.P., Summit Investors II, L.P., Splash Technology Holdings, Inc. and Splash Merger Company, Inc. Radius Inc., Splash Technology, Inc., 2.2 Amendment No. 1 to Merger Agreement dated January 30, 1996. 3.1 Certificate of Incorporation of Registrant. 3.2 Form of Amended and Restated Certificate of Incorporation of Registrant. 3.3 Bylaws of Registrant. 3.4 Form of Amended and Restated Bylaws of Registrant. 3.5 Form of Amended and Restated Certificate of Incorporation of Registrant to be filed after the closing of the Offering, the redemption of the Series A Preferred Stock and the conversion of the Series B Preferred Stock. 4.1 Warrant, dated January 31, 1996, issued by Registrant to Imperial Bank. 5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation. 10.1 Form of Indemnification Agreement. 10.2 1996 Stock Option Plan and form of Stock Option Agreement. 10.3 1996 Employee Stock Purchase Plan and form of Subscription Agreement. 10.4 Registration Rights Agreement dated January 30, 1996 among the Registrant and certain stockholders of the Registrant. 10.5+ Configurable Postscript Interpreter OEM License Agreement dated September 18, 1992 between the Registrant and Adobe Systems Incorporated. 10.6+ Xerox and SMT Hardware Purchase and Software Development/License Agreement between the Registrant and Xerox Corporation dated November 13, 1993. 10.7 Property Lease covering Registrant's facilities in Sunnyvale, California. 10.8 Security and Loan Agreement dated January 31, 1996, between the Registrant and Imperial Bank. 11.1 Computation Regarding Earnings Per Share. 21.1 Subsidiaries of Registrant. 23.1 Consent of Coopers & Lybrand L.L.P. 23.2* Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1). 24.1 Power of Attorney (see page II-4). - -------------------- * To be supplied by amendment. + Confidential treatment requested.
II-2 (B) FINANCIAL STATEMENT SCHEDULES Schedule II - Valuation and Qualifying Accounts ITEM 17. UNDERTAKINGS Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions referenced in Item 14 of this Registration Statement or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of this prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the Offering of such securities at that time shall be deemed to be the initial bona fide Offering thereof. The undersigned Registrant hereby undertakes to provide to the Underwriters at the closing, as specified in the Underwriting Agreement, certificates in such denomination and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Sunnyvale, State of California, on August 19, 1996. SPLASH TECHNOLOGY HOLDINGS, INC. BY: /S/ KEVIN K. MACGILLIVRAY ------------------------------------------ Kevin K. Macgillivray, President and Chief Executive Officer PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1933, THIS REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
SIGNATURE TITLE DATE - ---------------------------------- ----------------------------- ------------------------- /s/ Kevin K. Macgillivray Director, President and Chief August 19, 1996 - ---------------------------------- Officer (Principal Executive Kevin K. Macgillivray Officer) /s/ Joan P. Platt* Chief Financial Officer and August 19, 1996 - ---------------------------------- Vice President, Finance and Joan P. Platt Administration (Principal Financial and Accounting Officer) /s/ Gregory M. Avis* Director August 19, 1996 - ---------------------------------- Gregory M. Avis /s/ Charles W. Berger* Director August 19, 1996 - ---------------------------------- Charles W. Berger /s/ Peter Y. Chung* Director August 19, 1996 - ---------------------------------- Peter Y. Chung /s/ Lawrence G. Finch* Director August 19, 1996 - ---------------------------------- Lawrence G. Finch *By: /s/ Kevin K. Macgillivray ----------------------------- Kevin K. Macgillivray Attorney-in-fact
II-4 SPLASH TECHNOLOGY HOLDINGS, INC. -------------------------------- REPORT ON FINANCIAL STATEMENT SCHEDULE -------------------------------------- In connection with our audit of the consolidated financial statements of Splash Technology Holdings, Inc., and its subsidiaries as of June 30, 1996 and for the five months ended June 30, 1996, and in connection with our audit of the Predecessor Business as of September 30, 1994 and 1995, and for the years then ended and for the four months ended January 31, 1996, which financial statements are included in the Prospectus, we have also audited the financial statement schedules listed in Item 16(b) herein. In our opinion, this financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein. Coopers & Lybrand L.L.P. San Jose, California July 31, 1996 II-5 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT ---------- ------------------------------------------------------------- 1.1 Form of Underwriting Agreement. 2.1 Merger Agreement, dated December 21, 1995, among Radius Inc., Splash Technology, Inc., Summit Subordinated Debt Fund, L.P., Summit Ventures IV, L.P., Summit Investors II, L.P., Splash Technology Holdings, Inc. and Splash Merger Company, Inc. 2.2 Amendment No. 1 to Merger Agreement dated January 30, 1996. 3.1 Certificate of Incorporation of Registrant. 3.2 Form of Amended and Restated Certificate of Incorporation of Registrant. 3.3 Bylaws of Registrant. 3.4 Form of Amended and Restated Bylaws of Registrant. 3.5 Form of Amended and Restated Certificate of Incorporation of Registrant to be filed after the closing of the Offering, the redemption of the Series A Preferred Stock and the conversion of the Series B Preferred Stock. 4.1 Warrant, dated January 31, 1996, issued by Registrant to Imperial Bank. 5.1* Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation. 10.1 Form of Indemnification Agreement. 10.2 1996 Stock Option Plan and form of Stock Option Agreement. 10.3 1996 Employee Stock Purchase Plan and form of Subscription Agreement. 10.4 Registration Rights Agreement dated January 30, 1996 among the Registrant and certain stockholders of the Registrant. 10.5+ Configurable Postscript Interpreter OEM License Agreement dated September 18, 1992 between the Registrant and Adobe Systems Incorporated. 10.6+ Xerox and SMT Hardware Purchase and Software Develpoment/License Agreement between the Registrant and Xerox Corporation dated November 13, 1993. 10.7 Property Lease covering Registrant's facilities in Sunnyvale, California. 10.8 Security and Loan Agreement dated January 31, 1996, between the Registrant and Imperial Bank. 11.1 Computation Regarding Earnings Per Share. 21.1 Subsidiaries of Registrant. 23.1 Consent of Coopers & Lybrand L.L.P. 23.2* Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation (included in Exhibit 5.1). 24.1 Power of Attorney (see page II-4). - -------------------- * To be supplied by amendment. + Confidential treatment requested.
EX-1.1 2 FORM OF UNDERWRITING AGREEMENT EXHIBIT 1.1 _______________ Shares Splash Technology Holdings, Inc. Common Stock ($_____ Par Value) UNDERWRITING AGREEMENT ---------------------- __________________, 1996 Alex. Brown & Sons Incorporated Montgomery Securities As Representatives of the Several Underwriters c/o Alex. Brown & Sons Incorporated 135 East Baltimore Street Baltimore, Maryland 21202 Ladies and Gentlemen: Splash Technology Holdings, Inc., a Delaware corporation (the "Company"), and certain stockholders of the Company (the "Selling Stockholders") propose to sell to the several underwriters (the "Underwriters") named in Schedule I hereto for whom you are acting as representatives (the "Representatives") an aggregate of _________ shares of the Company's Common Stock, $_____ par value (the "Firm Shares"), of which ________ shares will be sold by the Company and ________ shares will be sold by the Selling Stockholders. The respective amounts of the Firm Shares to be so purchased by the several Underwriters are set forth opposite their names in Schedule I hereto, and the respective amounts to be sold by the Selling Stockholders are set forth opposite their names in Schedule II hereto. The Company and the Selling Stockholders are sometimes referred to herein collectively as the "Sellers." The Company also proposes to sell at the Underwriters' option an aggregate of up to _______ additional shares of the Company's Common Stock (the "Option Shares") as set forth below. As the Representatives, you have advised the Company and the Selling Stockholders (a) that you are authorized to enter into this Agreement on behalf of the several Underwriters, and (b) that the several Underwriters are willing, acting severally and not jointly, to purchase the numbers of Firm Shares set forth opposite their respective names in Schedule I, plus their pro rata portion of the Option Shares if you elect to exercise the over-allotment option in whole or in part for the accounts of the several Underwriters. The Firm Shares and the Option Shares (to the extent the aforementioned option is exercised) are herein collectively called the "Shares." In consideration of the mutual agreements contained herein and of the interest of the parties in the transactions contemplated hereby, the parties hereto agree as follows: 1. Representations and Warranties of the Company and the Selling ------------------------------------------------------------- Stockholders. ------------ (a) The Company represents and warrants to each of the Underwriters as follows: (i) A registration statement on Form S-1 (File No. 333-_______) with respect to the Shares has been carefully prepared by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the "Act"), and the Rules and Regulations (the "Rules and Regulations") of the Securities and Exchange Commission (the "Commission") thereunder and has been filed with the Commission. Copies of such registration statement, including any amendments thereto, the preliminary prospectuses (meeting the requirements of the Rules and Regulations) contained therein and the exhibits, financial statements and schedules, as finally amended and revised, have heretofore been delivered by the Company to you. Such registration statement, together with any registration statement filed by the Company pursuant to Rule 462(b) of the Act, herein referred to as the "Registration Statement," which shall be deemed to include all information omitted therefrom in reliance upon Rule 430A and contained in the Prospectus referred to below, has become effective under the Act and no post-effective amendment to the Registration Statement has been filed as of the date of this Agreement. "Prospectus" means (a) the form of prospectus first filed with the Commission pursuant to Rule 424(b) or (b) the last preliminary prospectus included in the Registration Statement filed prior to the time it becomes effective or filed pursuant to Rule 424(a) under the Act that is delivered by the Company to the Underwriters for delivery to purchasers of the Shares, together with the term sheet or abbreviated term sheet filed with the Commission pursuant to Rule 424(b)(7) under the Act. Each preliminary prospectus included in the Registration Statement prior to the time it becomes effective is herein referred to as a "Preliminary Prospectus." (ii) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement. Each of Splash Technology, Inc. and Splash Technology S.a.r.l. (collectively, the "Subsidiaries") has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement. The Subsidiaries are the only subsidiaries, direct or indirect, of the Company. The Company and each of the Subsidiaries are duly qualified to transact business in all jurisdictions in which the conduct of their business requires such qualification. The outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable and are owned by the Company or another Subsidiary free and clear of all liens, encumbrances and equities and claims; and no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights to convert any obligations into shares of capital stock or ownership interests in the Subsidiaries are outstanding. 2 (iii) The outstanding shares of capital stock of the Company, including all shares to be sold by the Selling Stockholders, have been duly authorized and validly issued and are fully paid and non-assessable; the Shares to be issued and sold by the Company have been duly authorized and when issued and paid for as contemplated herein will be validly issued, fully paid and non- assessable; and no preemptive rights of stockholders exist with respect to any of the Shares or the issue and sale thereof. Neither the filing of the Registration Statement nor the offering or sale of the Shares as contemplated by this Agreement gives rise to any rights, other than those that have been waived or satisfied, for or relating to the registration of any shares of Common Stock. (iv) The information set forth under the caption "Capitalization" in the Prospectus is true and correct. All of the Shares conform to the description thereof contained in the Registration Statement. The form of certificates for the Shares conforms to the corporate law of the jurisdiction of the Company's incorporation. (v) The Commission has not issued an order preventing or suspending the use of any Prospectus relating to the proposed offering of the Shares nor instituted proceedings for that purpose. The Registration Statement contains, and the Prospectus and any amendments or supplements thereto will contain, all statements which are required to be stated therein by, and will conform, to the requirements of the Act and the Rules and Regulations. The Registration Statement and any amendment thereto do not contain, and will not contain, any untrue statement of a material fact and do not omit, and will not omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any amendments and supplements thereto do not contain, and will not contain, any untrue statement of material fact; and do not omit, and will not omit, to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representations or warranties as to information contained in or omitted from the Registration Statement or the Prospectus, or any such amendment or supplement, in reliance upon, and in conformity with, written information furnished to the Company by or on behalf of any Underwriter through the Representatives, specifically for use in the preparation thereof. (vi) The consolidated financial statements of the Company and the Subsidiaries, together with related notes and schedules as set forth in the Registration Statement, present fairly the financial position and the results of operations and cash flows of the Company and the consolidated Subsidiaries, at the indicated dates and for the indicated periods. Such financial statements and related schedules have been prepared in accordance with generally accepted accounting principles, consistently applied throughout the periods involved, except as disclosed herein, and all adjustments necessary for a fair presentation of results for such periods have been made. The summary financial and statistical data included in the Registration Statement presents fairly the information shown therein and such data has been compiled on a basis consistent with the financial statements presented therein and the books and records of the Company. The pro forma financial statements and other pro forma financial information included in the Registration Statement and the Prospectus present fairly the information shown therein, have been prepared in accordance with the Commission's rules and guidelines with 3 respect to pro forma financial statements, have been properly compiled on the pro forma bases described therein, and, in the opinion of the Company, the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. (vii) Coopers & Lybrand, L.L.P., who have certified certain of the financial statements filed with the Commission as part of the Registration Statement, are independent public accountants as required by the Act and the Rules and Regulations. (viii) There is no action, suit, claim or proceeding pending or, to the knowledge of the Company, threatened against the Company or any of the Subsidiaries before any court or administrative agency or otherwise which if determined adversely to the Company or any of its Subsidiaries might result in any material adverse change in the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company and the Subsidiaries taken as a whole or to prevent the consummation of the transactions contemplated hereby, except as set forth in the Registration Statement. (ix) The Company and the Subsidiaries have good and marketable title to all of the properties and assets reflected in the financial statements (or as described in the Registration Statement) hereinabove described, subject to no lien, mortgage, pledge, charge or encumbrance of any kind except those reflected in such financial statements (or as described in the Registration Statement) or which are not material in amount. The Company and the Subsidiaries occupy their leased properties under valid and binding leases conforming in all material respects to the description thereof set forth in the Registration Statement. (x) The Company and the Subsidiaries have filed all Federal, State, local and foreign income tax returns that have been required to be filed and have paid all taxes indicated by said returns and all assessments received by them or any of them to the extent that such taxes have become due. All tax liabilities have been adequately provided for in the financial statements of the Company. (xi) Since the respective dates as of which information is given in the Registration Statement, as it may be amended or supplemented, there has not been any material adverse change or any development involving a prospective material adverse change in or affecting the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise), or prospects of the Company and its Subsidiaries taken as a whole, whether or not occurring in the ordinary course of business, and there has not been any material transaction entered into or any material transaction that is probable of being entered into by the Company or the Subsidiaries, other than transactions in the ordinary course of business and changes and transactions described in the Registration Statement, as it may be amended or supplemented. The Company and the Subsidiaries have no material contingent obligations that are not disclosed in the Registration Statement. (xii) Neither the Company nor any of the Subsidiaries is or with the giving of notice or lapse of time or both, will be, in violation of or in default under its Charter or By-Laws or under any agreement, lease, contract, indenture or other instrument or obligation to 4 which it is a party or by which it, or any of its properties, is bound and which violation or default is of material significance in respect of the condition, financial or otherwise of the Company and its Subsidiaries taken as a whole or the business, management, properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company and the Subsidiaries taken as a whole. The execution and delivery of this Agreement and the consummation of the transactions herein contemplated and the fulfillment of the terms hereof will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company or any Subsidiary is a party, or of the Charter or by-laws of the Company or any order, rule or regulation applicable to the Company or any Subsidiary of any court or of any regulatory body or administrative agency or other governmental body having jurisdiction. (xiii) Each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation of the transactions herein contemplated (except such additional steps as may be required by the Commission, the National Association of Securities, Inc. (the "NASD") or such additional steps as may be necessary to qualify the Shares for public offering by the Underwriters under state securities or Blue Sky laws) has been obtained or made and is in full force and effect. (xiv) The Company and each of the Subsidiaries holds all material licenses, certificates and permits from governmental authorities which are necessary to the conduct of their businesses; except where the failure to have such licenses, certificates and permits would not, singly or in the aggregate, have a material adverse effect on the business or financial condition of the Company and the Subsidiaries, taken as a whole. (xv) The Company and each of the Subsidiaries owns or possess licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights, mask work rights, technology know-how and other intellectual property rights ("Intellectual Property") necessary to conduct the business now or proposed to be conducted by the Company and each of the Subsidiaries as described in the Prospectus, and, except as disclosed in the Prospectus, neither the Company nor any of its Subsidiaries has received any notice of infringement of or conflict with (or knows of such infringement of or conflict with) asserted rights of others with respect to the Intellectual Property which, individually or in the aggregate, could reasonably be expected to result in any material adverse effect upon the condition, financial or otherwise, of the Company and the Subsidiaries, taken as a whole; and, except as disclosed in the Prospectus and to the knowledge of the Company and each of its Subsidiaries, do not in the conduct of their business as now or proposed to be conducted as described in the Prospectus, infringe or conflict with any Intellectual Property of any third party, or any discovery, invention, product or process which is the subject of a patent application filed by any thirty party, known to the Company or any of the Subsidiaries. (xvi) Neither the Company, nor to the Company's best knowledge, any of its affiliates, has taken or may take, directly or indirectly, any action designed to cause or 5 result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the shares of Common Stock to facilitate the sale or resale of the Shares. The Company acknowledges that the Underwriters may engage in passive market making transactions in the Shares on The Nasdaq National Market in accordance with Rule 10b-6A under the Exchange Act. (xvii) Neither the Company nor any Subsidiary is an "investment company" within the meaning of such term under the Investment Company Act of 1940 and the rules and regulations of the Commission thereunder. (xviii) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (xix) The Company and each of its Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is adequate for the conduct of their respective businesses and the value of their respective properties and as is customary for companies engaged in similar industries. (xx) The Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for which the Company would have any liability; the Company has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "pension plan" or (i) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the "Code"); and each "pension plan" for which the Company would have any liability that is intended to be qualified under Section 401(a) of the code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification. (xxi) The Company has obtained the agreement of each of its officers, directors and holders of the Company's outstanding capital stock, not to sell, grant any option to sell or otherwise dispose of, directly or indirectly, any shares of Common Stock or securities convertible into, or exercisable or exchangeable for Common Stock or other rights to purchase Common Stock of the Company for a period of 180 days after the effective date of the Registration Statement without the prior written consent of Alex. Brown & Sons Incorporated. The Company has further entered into an agreement with each of the holders of its securities restricting the sale or other disposition of said securities and the Company will not permit any 6 sale or disposition of such securities for a period of 180 days after the effective date of the Registration Statement, directly or indirectly, except with the prior written consent of Alex. Brown & Sons Incorporated. (xxii) The Company confirms as of the date hereof that it is in compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198, An Act Relating to Disclosure of doing Business with Cuba, and the Company - --------------------------------------------------------- further agrees that if it commences engaging in business with the government of Cuba or with any person or affiliate located in Cuba after the date the Registration Statement becomes or has become effective with the Commission or with the Florida Department of Banking and Finance (the "Department"), whichever date is later, or if the information reported or incorporated by reference in the Prospectus, if any, concerning the Company's business with Cuba or with any person or affiliate located in Cuba changes in any material way, the Company will provide the Department notice of such business or change, as appropriate, in a form acceptable to the Department. (b) Each of the Selling Stockholders severally represents and warrants as follows: (i) Such Selling Stockholder now has and at the Closing Date (as such date is hereinafter defined) will have good and marketable title to the Firm Shares to be sold by such Selling Stockholder, free and clear of any liens, encumbrances, equities and claims, and full right, power and authority to effect the sale and delivery of such Firm Shares; and upon the delivery of, against payment for, such Firm Shares pursuant to this Agreement, the Underwriters will acquire good and marketable title thereto, free and clear of any liens, encumbrances, equities and claims. (ii) Such Selling Stockholder has full right, power and authority to execute and deliver this Agreement, the Power of Attorney, and the Custodian Agreement referred to below and to perform its obligations under such Agreements. The execution and delivery of this Agreement and the consummation by such Selling Stockholder of the transactions herein contemplated and the fulfillment by such Selling Stockholder of the terms hereof will not require any consent, approval, authorization, or other order of any court, regulatory body, administrative agency or other governmental body (except as may be required under the Act, state securities laws or Blue Sky laws) and will not result in a breach of any of the terms and provisions of, or constitute a default under, organizational documents of such Selling Stockholder, if not an individual, or any indenture, mortgage, deed of trust or other agreement or instrument to which such Selling Stockholder is a party, or of any order, rule or regulation applicable to such Selling Stockholder of any court or of any regulatory body or administrative agency or other governmental body having jurisdiction. (iii) Such Selling Stockholder has not taken and will not take, directly or indirectly, any action designed to, or which has constituted, or which might reasonably be expected to cause or result in the stabilization or manipulation of the price of the Common Stock of the Company and, other than as permitted by the Act, the Selling Stockholder will not distribute any prospectus or other offering material in connection with the offering of the Shares. 7 (iv) Without having undertaken to determine independently the accuracy or completeness of either the representations and warranties of the Company contained herein or the information contained in the Registration Statement, such Selling Stockholder has no reason to believe that the representations and warranties of the Company contained in this Section 1 are not true and correct, is familiar with the Registration Statement and has no knowledge of any material fact, condition or information not disclosed in the Registration Statement which has adversely affected or may adversely affect the business of the Company or any of the Subsidiaries; and the sale of the Firm Shares by such Selling Stockholder pursuant hereto is not prompted by any information concerning the Company or any of the Subsidiaries which is not set forth in the Registration Statement. The information pertaining to such Selling Stockholder under the caption "Principal and Selling Stockholders" in the Prospectus is complete and accurate in all material respects. 2. Purchase, Sale and Delivery of the Firm Shares. ---------------------------------------------- (a) On the basis of the representations, warranties and covenants herein contained, and subject to the conditions herein set forth, the Sellers agree to sell to the Underwriters and each Underwriter agrees, severally and not jointly, to purchase, at a price of $_____ per share, the number of Firm Shares set forth opposite the name of each Underwriter in Schedule I hereof, subject to adjustments in accordance with Section 9 hereof. The number of Firm Shares to he purchased by each Underwriter from each Seller shall be as nearly as practicable in the same proportion to the total number of Firm Shares being sold by each Seller as the number of Firm Shares being purchased by each Underwriter bears to the total number of Firm Shares to be sold hereunder. The obligations of the Company and of each of the Selling Stockholders shall be several and not joint. (b) Certificates in negotiable form for the total number of the Shares to be sold hereunder by the Selling Stockholders have been placed in custody with _______________ as custodian (the "Custodian") pursuant to the Custodian Agreement executed by each Selling Stockholder for delivery of all Firm Shares to be sold hereunder by the Selling Stockholders. Each of the Selling Stockholders specifically agrees that the Firm Shares represented by the certificates held in custody for the Selling Stockholders under the Custodian Agreement are subject to the interests of the Underwriters hereunder, that the arrangements made by the Selling Stockholders for such custody are to that extent irrevocable, and that the obligations of the Selling Stockholders hereunder shall not be terminable by any act or deed of the Selling Stockholders (or by any other person, firm or corporation including the Company, the Custodian or the Underwriters) or by operation of law (including the death of an individual Selling Stockholder or the dissolution of a corporate Selling Stockholder) or by the occurrence of any other event or events, except as set forth in the Custodian Agreement. If any such event should occur prior to the delivery of the Underwriters of the Firm Shares or the Option Shares hereunder, certificates for the Firm Shares or the Option Shares, as the case may be, shall be delivered by the Custodian in accordance with the terms and conditions of this Agreement as if such event has not occurred. The Custodian is authorized to receive and acknowledge receipt of the proceeds of sale of the Shares held by it against delivery of such Shares. 8 (c) Payment for the Firm Shares to be sold hereunder is to be made in New York Clearing House funds by certified or bank cashier's checks drawn to the order of the Company for the shares to be sold by it and to the order of _____________, "as Custodian" for the shares to be sold by the Selling Stockholders, in each case against delivery of certificates therefor to the Representatives for the several accounts of the Underwriters. Such payment and delivery are to be made at the offices of Alex. Brown & Sons Incorporated, 135 East Baltimore Street, Baltimore, Maryland, at 10:00 a.m., Baltimore time, on the third business day after the date of this Agreement or at such other time and date not later than five business days thereafter as you and the Company shall agree upon, such time and date being herein referred to as the "Closing Date." (As used herein, "business day" means a day on which the New York Stock Exchange is open for trading and on which banks in New York are open for business and not permitted by law or executive order to be closed.) The certificates for the Firm Shares will be delivered in such denominations and in such registrations as the Representatives request in writing not later than the second full business day prior to the Closing Date, and will be made available for inspection by the Representatives at least one business day prior to the Closing Date. (d) In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the several Underwriters to purchase the Option Shares at the price per share as set forth in the first paragraph of this Section 2. The option granted hereby may be exercised in whole or in part by giving written notice (i) at any time before the Closing Date and (ii) only once thereafter within 30 days after the date of this Agreement, by you, as Representatives of the several Underwriters, to the Company, setting forth the number of Option Shares as to which the several Underwriters are exercising the option, the names and denominations in which the Option Shares are to be registered and the time and date at which such certificates are to be delivered. The time and date at which certificates for Option Shares are to be delivered shall be determined by the Representatives but shall not be earlier than three nor later than 10 full business days after the exercise of such option, nor in any event prior to the Closing Date (such time and date being herein referred to as the "Option Closing Date"). If the date of exercise of the option is three or more days before the Closing Date, the notice of exercise shall set the Closing Date as the Option Closing Date. The number of Option Shares to be purchased by each Underwriter shall be in the same proportion to the total number of Option Shares being purchased as the number of Firm Shares being purchased by such Underwriter bears to the total number of Firm Shares, adjusted by you in such manner as to avoid fractional shares. The option with respect to the Option Shares granted hereunder may be exercised only to cover over-allotments in the sale of the Firm Shares by the Underwriters. You, as Representatives of the several Underwriters, may cancel such option at any time prior to its expiration by giving written notice of such cancellation to the Company. To the extent, if any, that the option is exercised, payment for the Option Shares shall be made on the Option Closing Date in New York Clearing House funds by certified or bank cashier's check drawn to the order of the Company against delivery of certificates therefor at the offices of Alex. Brown & Sons Incorporated, 135 East Baltimore Street, Baltimore, Maryland. (e) If on the Closing Date or Option Closing Date, as the case may be, any Selling Stockholder fails to sell the Firm Shares which such Selling Stockholder has agreed to 9 sell on such date as set forth in Schedule II hereto, the Company agrees that it ----------- will sell or arrange for the sale of that number of shares of Common Stock to the Underwriters which represents Firm Shares which such Selling Stockholder has failed to so sell, as set forth in Schedule II hereto, or such lesser number as ----------- may be requested by the Representatives. 3. Offering by the Underwriters. ---------------------------- It is understood that the several Underwriters are to make a public offering of the Firm Shares as soon as the Representatives deem it advisable to do so. The Firm Shares are to be initially offered to the public at the initial public offering price set forth in the Prospectus. The Representatives may from time to time thereafter change the public offering price and other selling terms. To the extent, if at all, that any Option Shares are purchased pursuant to Section 2 hereof, the Underwriters will offer them to the public on the foregoing terms. It is further understood that you will act as the Representatives for the Underwriters in the offering and sale of the Shares in accordance with a Master Agreement Among Underwriters entered into by you and the several other Underwriters. 4. Covenants of the Company and the Selling Stockholders. ----------------------------------------------------- (a) The Company covenants and agrees with the several Underwriters that: (i) The Company will (A) use its best efforts to cause the Registration Statement to become effective or, if the procedure in Rule 430A of the Rules and Regulations is followed, to prepare and timely file with the Commission under Rule 424(b) of the Rules and Regulations a Prospectus in a form approved by the Representatives containing information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rule 430A of the Rules and Regulations, and (B) not file any amendment to the Registration Statement or supplement to the Prospectus of which the Representatives shall not previously have been advised and furnished with a copy or to which the Representatives shall have reasonably objected in writing or which is not in compliance with the Rules and Regulations. (ii) The Company will advise the Representatives promptly (A) when the Registration Statement or any post-effective amendment thereto shall have become effective, (B) of receipt of any comments from the Commission, (C) of any request of the Commission for amendment of the Registration Statement or for supplement to the Prospectus or for any additional information, and (D) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus or of the institution of any proceedings for that purpose. The Company will use its best efforts to prevent the issuance of any such stop order preventing or suspending the use of the Prospectus and to obtain as soon as possible the lifting thereof, if issued. (iii) The Company will cooperate with the Representatives in endeavoring to qualify the Shares for sale under the securities laws of such jurisdictions as the Representatives may reasonably have designated in writing and will make such applications, file such documents, and furnish such information as may be reasonably required for that purpose, 10 provided the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent. The Company will, from time to time, prepare and file such statements, reports and other documents, as are or may be required to continue such qualifications in effect for so long a period as the Representatives may reasonably request for distribution of the Shares. (iv) The Company will deliver to, or upon the order of, the Representatives, from time to time, as many copies of any Preliminary Prospectus as the Representatives may reasonably request. The Company will deliver to, or upon the order of, the Representatives during the period when delivery of a Prospectus is required under the Act, as many copies of the Prospectus in final form, or as thereafter amended or supplemented, as the Representatives may reasonably request. The Company will deliver to the Representatives at or before the Closing Date, four signed copies of the Registration Statement and all amendments thereto including all exhibits filed therewith, and will deliver to the Representatives such number of copies of the Registration Statement (including such number of copies of the exhibits filed therewith that may reasonably be requested), and of all amendments thereto, as the Representatives may reasonably request. (v) The Company will comply with the Act and the Rules and Regulations, and the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution of the shares as contemplated in this Agreement and the Prospectus. If during the period in which a prospectus is required by law to be delivered by an Underwriter or dealer, any event shall occur as a result of which, in the judgment of the Company or in the reasonable opinion of the Underwriters, it becomes necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading, or, if it is necessary at any time to amend or supplement the Prospectus to comply with any law, the Company promptly will prepare and file with the Commission an appropriate amendment to the Registration Statement or supplement to the Prospectus so that the Prospectus as so amended or supplemented will not, in the light of the circumstances when it is so delivered, be misleading, or so that the Prospectus will comply with the law. (vi) the Company will make generally available to its security holders, as soon as it is practicable to do so, but in any event no later than 15 months after the effective date of the Registration Statement, an earning statement (which need not be audited) in reasonable detail, covering a period of at least 12 consecutive months beginning after the effective date of the Registration Statement, which earning statement shall satisfy the requirements of Section 11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you in writing when such statement has been so made available. (vii) The Company will, for a period of five years from the Closing Date, deliver to the Representatives copies of annual reports and copies of all other documents, reports and information furnished by the Company to its stockholders or filed with any securities 11 exchange pursuant to the requirements of such exchange or with the Commission pursuant to the Act or the Securities Exchange Act of 1934, as amended. The Company will deliver to the Representatives similar reports with respect to significant subsidiaries, as that term is defined in the Rules and Regulations, which are not consolidated in the Company's financial statements. (viii) No offering, sale, short sale or other disposition of any shares of Common Stock of the Company or other securities convertible into or exchangeable or exercisable for shares of Common Stock or derivative of Common Stock (or agreement for such) will be made for a period of 180 days after the date of this Agreement, directly or indirectly, by the Company otherwise than hereunder or with the prior written consent of Alex. Brown & Sons Incorporated except that the Company may, without such consent, issue shares upon exercise of options issued pursuant to the 1996 Stock Option Plan or the 1996 Employee Stock Purchase Plan provided that each person who receives such shares from the Company agrees to similar restrictions on transfer. (ix) The Company will use its best efforts to list, subject to notice of issuance, the Shares on the Nasdaq National Market. (x) The Company has caused each officer and director and holders of the Company's outstanding capital stock to furnish to you, on or prior to the date of this Agreement, a letter or letters, in form and substance satisfactory to the Underwriters, pursuant to which each such person shall agree not to offer, sell, sell short or otherwise dispose of any shares of Common Stock of the Company or other capital stock of the Company, or any other securities convertible, exchangeable or exercisable for Common Shares or derivative of Common Shares owned by such person or request the registration for the offer or sale of any of the foregoing (or as to which such person has the right to direct the disposition of) for a period of 180 days after the date of this Agreement, directly or indirectly, except with the prior written consent of Alex. Brown & Sons Incorporated ("Lockup Agreements"). The Company has further entered into an agreement with each of the holders of its securities restricting the sale or other disposition of said securities and the Company will not permit any sale or disposition of such securities for a period of 180 days after the effective date of the Registration Statement, directly or indirectly, except with the prior written consent of Alex. Brown & Sons Incorporated. (xi) The Company shall apply the net proceeds of its sale of the Shares as set forth in the Prospectus and shall file such reports with the Commission with respect to the sale of the Shares and the application of the proceeds therefrom as may be required in accordance with Rule 463 under the Act. (xii) The Company shall not invest, or otherwise use the proceeds received by the Company from its sale of the Shares in such a manner as would require the Company or any of the Subsidiaries to register as an investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). (xiii) The Company will maintain a transfer agent and, if necessary under the jurisdiction of incorporation of the Company, a registrar for the Common Stock. 12 (xiv) The Company will not take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities of the Company. (b) Each of the Selling Stockholders covenants and agrees with the several Underwriters that: (i) No offering, sale, short sale or other disposition of any shares of Common Stock of the Company or other capital stock of the Company or other securities convertible, exchangeable or exercisable for Common Stock or derivative of Common Stock owned by the Selling Stockholder or request the registration for the offer or sale of any of the foregoing (or as to which the Selling Stockholder has the right to direct the disposition of) will be made for a period of 180 days after the date of this Agreement, directly or indirectly, by such Selling Stockholder otherwise than hereunder or with the prior written consent of Alex. Brown & Sons Incorporated. (ii) In order to document the Underwriters' compliance with the reporting and withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982 and the Interest and Dividend Tax Compliance Act of 1983 with respect to the transactions herein contemplated, each of the Selling Stockholders agrees to deliver to you prior to or at the Closing Date a properly completed and executed United States Treasury Department Form W-9 (or other applicable form or statement specified by Treasury Department regulations in lieu thereof). (iii) Such Selling Stockholder will not take, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities of the Company. 5. Costs and Expenses. ------------------ The Company will pay all costs, expenses and fees incident to the performance of the obligations of the Sellers under this Agreement, including, without limiting the generality of the foregoing, the following: accounting fees of the Company; the fees and disbursements of counsel for the Company and the Selling Stockholders; the cost of printing and delivering to, or as requested by, the Underwriters copies of the Registration Statement, Preliminary Prospectuses, the Prospectus, this Agreement, the Underwriters' Selling Memorandum, the Underwriters' Invitation Letter, the Listing Application, the Blue Sky Survey and any supplements or amendments thereto; the filing fees of the Commission; the filing fees and expenses (including legal fees and disbursements) incident to securing any required review by the National Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of the Shares; the Listing Fee of the Nasdaq National Market; and the expenses, including the fees and disbursements of counsel for the Underwriters, incurred in connection with the qualification of the Shares under State securities or Blue Sky laws. Any transfer taxes imposed on the sale of the Share to the several Underwriters will be paid by the Sellers pro rata. The Company agrees to pay all costs and expenses of the Underwriters, including the fees and disbursements of counsel for the Underwriters, incident to the offer and sale of directed shares of the Common Stock by 13 the Underwriters to employees and persons having business relationships with the Company and its Subsidiaries. The Sellers shall not, however, be required to pay for any of the Underwriters expenses (other than those related to qualification under NASD regulation and State securities or Blue Sky laws) except that, if this Agreement shall not be consummated because the conditions in Section 6 hereof are not satisfied, or because this Agreement is terminated by the Representatives pursuant to Section 11 hereof, or by reason of any failure, refusal or inability on the part of the Company or the Selling Stockholders to perform any undertaking or satisfy any condition of this Agreement or to comply with any of the terms hereof on their part to be performed, unless such failure to satisfy said condition or to comply with said terms be due to the default or omission of any Underwriter, then the Company shall reimburse the several Underwriters for reasonable out-of-pocket expenses, including fees and disbursements of counsel, reasonably incurred in connection with investigating, marketing and proposing to market the Shares or in contemplation of performing their obligations hereunder; but the Company and the Selling Stockholders shall not in any event be liable to any of the several Underwriters for damages on account of loss of anticipated profits from the sale by them of the Shares. 6. Conditions of Obligations of the Underwriters. --------------------------------------------- The several obligations of the Underwriters to purchase the Firm Shares on the Closing Date and the Option Shares, if any, on the Option Closing Date are subject to the accuracy, as of the Closing Date or the Option Closing Date, as the case may be, of the representations and warranties of the Company and the Selling Stockholders contained herein, and to the performance by the Company and the Selling Stockholders of their covenants and obligations hereunder and to the following additional conditions: (a) The Registration Statement and all post-effective amendments thereto shall have become effective and any and all filings required by Rule 424 and Rule 430A of the Rules and Regulations shall have been made, and any request of the Commission for additional information (to be included in the Registration Statement or otherwise) shall have been disclosed to the Representatives and complied with to their reasonable satisfaction. No stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall have been issued and no proceedings for that purpose shall have been taken or, to the knowledge of the Company or the Selling Stockholders, shall be contemplated by the Commission and no injunction, restraining order, or order of any nature by a Federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance of the Shares. (b) The Representatives shall have received on the Closing Date or the Option Closing Date, as the case may be, the opinion of Wilson Sonsini Goodrich & Rosati, P.C., counsel for the Company and the Selling Stockholders, dated the Closing Date or the Option Closing Date, as the case may be, addressed to the Underwriters (and stating that it may be relied upon by counsel to the Underwriters) to the effect that: 14 (i) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement; each of the Subsidiaries has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement; the Company and each of the Subsidiaries are duly qualified to transact business in all jurisdictions in which the conduct of their business requires such qualification, or in which the failure to qualify would have a materially adverse effect upon the business of the Company and the Subsidiaries taken as a whole; and the outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued and are fully paid and non-assessable and are owned by the Company or a Subsidiary; and, to the best of such counsel's knowledge, the outstanding shares of capital stock of each of the Subsidiaries is owned free and clear of all liens, encumbrances and equities and claims, and no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights to convert any obligations into any shares of capital stock or of ownership interests in the Subsidiaries are outstanding. (ii) The Company has authorized and outstanding capital stock as set forth under the caption "Capitalization" in the Prospectus; the authorized shares of the Company's Common Stock have been duly authorized; the outstanding shares of the Company's Common Stock, including the Shares to be sold by the Selling Stockholders, have been duly authorized and validly issued and are fully paid and non-assessable; all of the Shares conform to the description thereof contained in the Prospectus; the certificates for the Shares, assuming they are in the form filed with the Commission, are in due and proper form; the shares of Common Stock, including the Option Shares, if any, to be sold by the Company pursuant to this Agreement have been duly authorized and will be validly issued, fully paid and non-assessable when issued and paid for as contemplated by this Agreement; and no preemptive rights of stockholders exist with respect to any of the Shares or the issue or sale thereof. (iii) Except as described in or contemplated by the Prospectus, to the knowledge of such counsel, there are no outstanding securities of the Company convertible or exchangeable into or evidencing the right to purchase or subscribe for any shares of capital stock of the Company and there are no outstanding or authorized options, warrants or rights of any character obligating the Company to issue any shares of its capital stock or any securities convertible or exchangeable into or evidencing the right to purchase or subscribe for any shares of such stock; and except as described in the Prospectus, to the knowledge of such counsel, no holder of any securities of the Company or any other person has the right, contractual or otherwise, which has not been satisfied or effectively waived, to cause the Company to sell or otherwise issue to them, or to permit them to underwrite the sale of, any of the Shares or the right to have any Common Shares or other securities of the Company including in the Registration Statement or the right, as a result of the filing of the Registration Statement, to require registration under the Act of any shares of Common Stock or other securities of the Company. 15 (iv) The Registration Statement has become effective under the Act and, to the best of the knowledge of such counsel, no stop order proceedings with respect thereto have been instituted or are pending or threatened under the Act. (v) The Registration Statement, the Prospectus and each amendment or supplement thereto comply as to form in all material respects with the requirements of the Act and the applicable rules and regulations thereunder (except that such counsel need express no opinion as to the financial statements and related schedules therein). (vi) The statements under the captions "Management-- Compensation Plans," "Certain Transactions," "Description of Capital Stock" and "Shares Eligible for Future Sale" in the Prospectus, and in the Registration Statement in Part II, Items 14 and 15, in each case insofar as such statements constitute a summary of documents referred to therein or matters of law, fairly present the information called for with respect to such documents and matters and fairly summarize the matters referred to therein. (vii) Such counsel does not know of any contracts or documents required to be filed as exhibits to the Registration Statement or described in the Registration Statement or the Prospectus which are not so filed or described as required, and such contracts and documents as are summarized in the Registration Statement or the Prospectus are fairly summarized in all material respects. (viii) Such counsel knows of no material legal or governmental proceedings pending or threatened against the Company or any of the Subsidiaries except as set forth in the Prospectus. (ix) The execution and delivery of this Agreement and the consummation of the transactions herein contemplated do not and will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, the Charter or by-laws of the Company, or any agreement or instrument known to such counsel to which the Company or any of the Subsidiaries is a party or by which the Company or any of the Subsidiaries may be bound. (x) This Agreement has been duly authorized, executed and delivered by the Company. (xi) No approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other governmental body is necessary in connection with the execution and delivery of this Agreement and the consummation of the transactions herein contemplated (other than as may be required by the NASD or as required by State securities and Blue Sky laws as to which such counsel need express no opinion) except such as have been obtained or made, specifying the same. (xii) The Company is not, and will not become, as a result of the consummation of the transactions contemplated by this Agreement, and application of the net 16 proceeds therefrom as described in the Prospectus, required to register as an investment company under the 1940 Act. (xiii) This Agreement has been duly authorized, executed and delivered on behalf of the Selling Stockholders. (xiv) Each Selling Stockholder has full legal right, power and authority, and any approval required by law (other than as required by State securities and Blue Sky laws as to which such counsel need express no opinion), to sell, assign, transfer and deliver the portion of the Shares to be sold by such Selling Stockholders. (xv) The Custodian Agreement and the Power of Attorney executed and delivered by each Selling Stockholder is valid and binding. (xvi) The Underwriters (assuming that they are bona fide purchasers within the meaning of the Uniform Commercial Code) have acquired good and marketable title to the Shares being sold by each Selling Stockholder on the Closing Date, and the Option Closing Date, as the case may be, free and clear of all liens, encumbrances, equities and claims. In rendering such opinion Wilson Sonsini Goodrich & Rosati, P.C. may rely as to matters governed by the laws of states other than California, Delaware or Federal laws on local counsel in such jurisdictions, provided that in each case Wilson Sonsini Goodrich & Rosati, P.C. shall state that they believe that they and the Underwriters are justified in relying on such other counsel. In addition to the matters set forth above, such opinion shall also include a statement to the effect that nothing has come to the attention of such counsel which leads them to believe that (i) the Registration Statement, at the time it became effective under the Act (but after giving effect to any modifications incorporated therein pursuant to Rule 430A under the Act) and as of the Closing Date or the Option Closing Date, as the case may be, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and (ii) the Prospectus, or any supplement thereto, on the date it was filed pursuant to the Rules and Regulations and as of the Closing Date or the Option Closing Date, as the case may be, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements, in the light of the circumstances under which they are made, not misleading (except that such counsel need express no view as to financial statements, financial data, schedules and statistical information therein). With respect to such statement, Wilson Sonsini Goodrich & Rosati, P.C. may state that their belief is based upon the procedures set forth therein, but is without independent check and verification. Fenwick & West, LLP, patent counsel for the Company, shall have furnished to the Representatives its written opinion, addressed to the Underwriters and dated the First Delivery Date, in form and substance reasonably satisfactory to the Representatives, to the effect that such counsel is familiar with the technology used by the Company in its business and the manner of its use thereof and has read the Registration Statement and the Prospectus, including particularly the portions of the Registration Statement and the Prospectus referring to patents and trade secrets, and: 17 (i) to the best of such counsel's knowledge and except as set forth in the Prospectus under the captions "Risk Factors-Dependence on Proprietary Technology" and "Business--Intellectual Property," there are no legal or governmental proceedings pending relating to patent rights or trade secrets, of the Company, and to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or others; (ii) except as set forth in the Prospectus, to the best of such counsel's knowledge, the Company is not infringing or otherwise violating any patents or trade secrets of others. (d) The Representatives shall have received from Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, counsel for the Underwriters, an opinion dated the Closing Date or the Option Closing Date, as the case may be, substantially to the effect specified in subparagraphs (iv) and (v) of Paragraph (b) of this Section 6, and that the Company is a duly organized and validly existing corporation under the laws of the State of Delaware. In rendering such opinion Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP may rely as to all matters governed other than by the laws of the States of California and Delaware or Federal laws on the opinion of counsel referred to in Paragraph (b) of this Section 6. In addition to the matters set forth above, such opinion shall also include a statement to the effect that nothing has come to the attention of such counsel which leads them to believe that (i) the Registration Statement, or any amendment thereto, as of the time it became effective under the Act (but after giving effect to any modifications incorporated therein pursuant to Rule 430A under the Act) as of the Closing Date or the Option Closing Date, as the case may be, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and (ii) the Prospectus, or any supplement thereto, on the date it was filed pursuant to the Rules and Regulations and as of the Closing Date or the Option Closing Date, as the case may be, contained an untrue statement of a material fact or omitted to state a material fact, necessary in order to make the statements, in the light of the circumstances under which they are made, not misleading (except that such counsel need express no view as to financial statements, financial data, schedules and statistical information therein). With respect to such statement, Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP may state that their belief is based upon the procedures set forth therein, but is without independent check and verification. (e) The Representatives shall have received at or prior to the Closing Date from Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP a memorandum or summary, in form and substance satisfactory to the Representatives, with respect to the qualification for offering and sale by the Underwriters of the Shares under the State securities or Blue Sky laws of such jurisdictions as the Representatives may reasonably have designated to the Company. (f) The Representatives shall have received, on each of the dates hereon, the Closing Date and the Option Closing Date, as the case may be, a letter dated the date hereof, the Closing Date or the Option Closing Date, as the case may be, in form and substance satisfactory 18 to you, of Coopers & Lybrand, L.L.P. confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and stating that in their opinion the financial statements and schedules examined by them and included in the Registration Statement comply in form in all material respects with the applicable accounting requirements of the Act and the related published Rules and Regulations; and containing such other statements and information as is ordinarily included in accountants' "comfort letters" to Underwriters with respect to the financial statements and certain financial and statistical information contained in the Registration Statement and Prospectus. (g) The Representatives shall have received on the Closing Date or the Option Closing Date, as the case may be, a certificate or certificates of the Chief Executive Officer and the Chief Financial Officer of the Company to the effect that, as of the Closing Date or the Option Closing Date, as the case may be, each of them severally represents as follows: (i) The Registration Statement has become effective under the Act and no stop order suspending the effectiveness of the Registration Statement has been issued, and no proceedings for such purpose have been taken or are, to his knowledge, contemplated by the Commission; (ii) The representations and warranties of the Company contained in Section 1 hereof are true and correct as of the Closing Date or the Option Closing Date, as the case may be; (iii) All filings required to have been made pursuant to Rules 424 or 430A under the Act have been made; (iv) He or she has carefully examined the Registration Statement and the Prospectus and, in his or her opinion, as of the effective date of the Registration Statement, the statements contained in the Registration Statement were true and correct, and such Registration Statement and Prospectus did not omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, and since the effective date of the Registration Statement, no event has occurred which should have been set forth in a supplement to or an amendment of the Prospectus which has not been so set forth in such supplement or amendment; and (v) Since the respective dates as of which information is given in the Registration Statement and Prospectus, there has not been any material adverse change or any development involving a prospective material adverse change in or affecting the condition, financial or otherwise, of the Company and its Subsidiaries taken as a whole or the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company and the Subsidiaries taken as a whole, whether or not arising in the ordinary course of business. (h) The Company and the Selling Stockholders shall have furnished to the Representatives such further certificates and documents confirming the representations and 19 warranties, covenants and conditions contained herein and related matters as the Representatives may reasonably have requested. (i) The Firm Shares and Option Shares, if any, have been approved for designation upon notice of issuance on the Nasdaq National Market. (j) The Lockup Agreements described in Section 4(a)(x) are in full force and effect. The opinions and certificates mentioned in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in all material respects satisfactory to the Representatives and to Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, counsel for the Underwriters. If any of the conditions hereinabove provided for in this Section 6 shall not have been fulfilled when and as required by this Agreement to be fulfilled, the obligations of the Underwriters hereunder may be terminated by the Representatives by notifying the Company of such termination in writing or by telegram at or prior to the Closing Date or the Option Closing Date, as the case may be. In such event, the Selling Stockholders, the Company and the Underwriters shall not be under any obligation to each other (except to the extent provided in Sections 5 and 8 hereof). 7. Conditions of the Obligations of the Sellers. -------------------------------------------- (a) The obligations of the Sellers to sell and deliver the portion of the Shares required to be delivered as and when specified in this Agreement are subject to the conditions that at the Closing Date or the Option Closing Date, as the case may be, no stop order suspending the effectiveness of the Registration Statement shall have been issued and in effect or proceedings therefor initiated or threatened. 8. Indemnification. --------------- (a) The Company and the Selling Stockholders, jointly and severally, agree to indemnify and hold harmless each Underwriter and each person, if any, who controls any Underwriter within the meaning of the Act, against any losses, claims, damages or liabilities to which such Underwriter or any such controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, any Preliminary Prospectus, the Prospectus or any amendment or supplement thereto, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; and will reimburse each Underwriter and each such controlling person upon demand for any legal or other expenses reasonably incurred by such Underwriter or such controlling person in connection with investigating or defending any such 20 loss, claim, damage or liability, action or proceeding or in responding to a subpoena or governmental inquiry related to the offering of the Shares, whether or not such Underwriter or controlling person is a party to any action or proceeding; provided, however, that the Company and the Selling Stockholders will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement, or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Prospectus, or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by or through the Representatives specifically for use in the preparation thereof. In no event, however, shall the liability of any Selling Stockholder for indemnification under this Section 8(a) exceed the proceeds received by such Selling Stockholder from the Underwriters in the offering. This indemnity agreement will be in addition to any liability which the Company or the Selling Stockholders may otherwise have. (b) Each Underwriter severally and not jointly will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the Registration Statement, the Selling Stockholders, and each person, if any, who controls the Company or the Selling Stockholders within the meaning of the Act, against any losses, claims, damages or liabilities to which the Company or any such director, officer, Selling Stockholder or controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, any Preliminary Prospectus, the Prospectus or any amendment or supplement thereto, or (ii) the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made; and will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, Selling Stockholder or controlling person in connection with investigating or defending any such loss, claim, damage, liability, action or proceeding; provided, however, that each Underwriter will be liable in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission has been made in the Registration Statement, any Preliminary Prospectus, the Prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by or through the Representatives specifically for use in the preparation thereof. This indemnity agreement will be in addition to any liability which such Underwriter may otherwise have. (c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to this Section 8, such person (the "indemnified party") shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing. No indemnification provided for in Section 8(a) or (b) shall be available to any party who shall fail to give notice as provided in this Section 8(c) if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was materially prejudiced by the failure to give such notice, but the failure to give such notice shall not relieve the indemnifying party or parties from any liability which it or they may have to the indemnified party for contribution or 21 otherwise than on account of the provisions of Section 8(a) or (b). In case any such proceeding shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party and shall pay as incurred the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel at its own expense. Notwithstanding the foregoing, the indemnifying party shall pay as incurred (or within 30 days of presentation) the fees and expenses of the counsel retained by the indemnified party in the event (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them or (iii) the indemnifying party shall have failed to assume the defense and employ counsel acceptable to the indemnified party within a reasonable period of time after notice of commencement of the action. It is understood that the indemnifying party shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm for all such indemnified parties. Such firm shall be designated in writing by you in the case of parties indemnified pursuant to Section 8(a) and by the Company and the Selling Stockholders in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. In addition, the indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding of which indemnification may be sought hereunder (whether or not any indemnified party is an actual or potential party to such claim action or proceeding) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action or proceeding. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under Section 8(a) or (b) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and the Selling Stockholders on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities, (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations. 22 The relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company and the Selling Stockholders bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Selling Stockholders on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Selling Stockholders and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 8(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 8(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to above in this Section 8(d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), (i) no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Shares purchased by such Underwriter, and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation, and (iii) no Selling Stockholder shall be required to contribute any amount in excess of the lesser of (A) that proportion of the total of such losses, claims, damages or liabilities indemnified or contributed against equal to the proportion of the total Shares sold hereunder which is being sold by such Selling Stockholder, or (B) the proceeds received by such Selling Stockholder from the Underwriters in the offering. The Underwriters' obligations in this Section 8(d) to contribute are several in proportion to their respective underwriting obligations and not joint. (e) In any proceeding relating to the Registration Statement, any Preliminary Prospectus, the Prospectus or any supplement or amendment thereto, each party against whom contribution may be sought under this Section 8 hereby consents to the jurisdiction of any court having jurisdiction over any other contributing party, agrees that process issuing from such court may be served upon him or it by any other contributing party and consents to the service of such process and agrees that any other contributing party may join him or it as an additional defendant in any such proceeding in which such other contributing party is a party. (f) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 8 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 8 and the representations and warranties of the Company set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of 23 any Underwriter or any person controlling any Underwriter, the Company, its directors or officers or any persons controlling the Company, (ii) acceptance of any Shares and payment therefor hereunder, and (iii) any termination of this Agreement. A successor to any Underwriter, or to the Company, its directors or officers, or any person controlling the Company, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 8. 9. Default By Underwriters. ----------------------- If on the Closing Date or the Option Closing Date, as the case may be, any Underwriter shall fail to purchase and pay for the portion of the Shares which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of the Company or a Selling Stockholder), you, as Representatives of the Underwriters, shall use your reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters, or any others, to purchase from the Company and the Selling Stockholders such amounts as may be agreed upon and upon the terms set forth herein, the Firm Shares or Option Shares, as the case may be, which the defaulting Underwriter or Underwriters failed to purchase. If during such 36 hours you, as such Representatives, shall not have procured such other Underwriters, or any others, to purchase the Firm Shares or Option Shares, as the case may be, agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the aggregate number of shares with respect to which such default shall occur does not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered hereby, the other Underwriters shall be obligated, severally, in proportion to the respective numbers of Firm Shares or Option Shares, as the case may be, which they are obligated to purchase hereunder, to purchase the Firm Shares or Option Shares, as the case may be, which such defaulting Underwriter or Underwriters failed to purchase, or (b) if the aggregate number of shares of Firm Shares or Option Shares, as the case may be, with respect to which such default shall occur exceeds 10% of the Firm Shares or Option Shares, as the case may be, covered hereby, the Company and the Selling Stockholders or you as the Representatives of the Underwriters will have the right, by written notice given within the next 36-hour period to the parties to this Agreement, to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of the Company or of the Selling Stockholders except to the extent provided in Section 8 hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Section 9, the Closing Date or Option Closing date, as the case may be, may be postponed for such period, not exceeding seven days, as you, as Representatives, may determine in order that the required changes in the Registration Statement or in the Prospectus or in any other documents or arrangements may be effected. The term "Underwriter" includes any person substituted for a defaulting Underwriter. Any action taken under this Section 9 shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. 10 Notices. ------- All communications hereunder shall be in writing and, except as otherwise provided herein, will be mailed, delivered, telecopied or telegraphed and confirmed as follows: if to the Underwriters, to Alex. Brown & Sons Incorporated, 135 East Baltimore Street, 24 Baltimore, Maryland 21202, Attention: ________________, with a copy to Alex. Brown & Sons Incorporated, 135 East Baltimore Street, Baltimore, Maryland 21202, Attention: General Counsel; if to the Company to: Splash Technology Holdings, Inc. 555 Del Rey Avenue Sunnyvale, California 94086 Attention: __________________ if to the Selling Stockholder, to: ____________________________ ____________________________ ____________________________ ____________________________ 11. Termination. ----------- This Agreement may be terminated by you by notice to the Sellers as follows: (a) at any time prior to the earlier of (i) the time the Shares are released by you for sale by notice to the Underwriters, or (ii) 11:30 a.m. on the first business day following the date of this Agreement; (b) at any time prior to the Closing Date if any of the following has occurred: (i) since the respective dates as of which information is given in the Registration Statement and the Prospectus, any material adverse change or any development involving a prospective material adverse change in or affecting the condition, financial or otherwise, of the Company and its Subsidiaries taken as a whole or the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole, whether or not arising in the ordinary course of business, (ii) any outbreak or escalation of hostilities or declaration of war or national emergency or other national or international calamity or crisis or change in economic or political conditions if the effect of such outbreak, escalation, declaration, emergency, calamity, crisis or change on the financial markets of the United States would, in your reasonable judgment, make it impracticable to market the Shares or to enforce contracts for the sale of the Shares, or (iii) suspension of trading in securities generally on the New York Stock Exchange or the American Stock Exchange or limitation on prices (other than limitations on hours or numbers of days of trading) for securities on either such Exchange, (iv) the enactment, publication, decree or other promulgation of any statute, regulation, rule or order of any court or other governmental authority which in your opinion materially and adversely affects or may materially and adversely affect the business or operations of the Company, (v) declaration of a banking moratorium by United States or New York State authorities, (vi) any downgrading in the rating of the Company's debt securities by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Exchange Act); (vii) the suspension of trading of the Company's common stock by the 25 Commission on the Nasdaq National Market or (viii) the taking of any action by any governmental body or agency in respect of its monetary or fiscal affairs which in your reasonable opinion has a material adverse effect on the securities markets in the United States; or (c) as provided in Sections 6 and 9 of this Agreement. 12. Successors. ---------- This Agreement has been and is made solely for the benefit of the Underwriters, the Company and the Selling Stockholders and their respective successors, executors, administrators, heirs and assigns, and the officers, directors and controlling persons referred to herein, and no other person will have any right or obligation hereunder. No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign merely because of such purchase. 13. Information Provided By Underwriters. ------------------------------------ The Company, the Selling Stockholders and the Underwriters acknowledge and agree that the only information furnished or to be furnished by any Underwriter to the Company for inclusion in any Prospectus or the Registration Statement consists of the information set forth in the last paragraph on the front cover page (insofar as such information relates to the Underwriters), legends required by Item 502(d) of Regulation S-K under the Act and the information under the caption "Underwriting" in the Prospectus. 14. Miscellaneous ------------- The reimbursement, indemnification and contribution agreements contained in this Agreement and the representations, warranties and covenants in this Agreement shall remain in full force and effect regardless of (a) any termination of this Agreement, (b) any investigation made by or on behalf of any Underwriter or controlling person thereof, or by or on behalf of the Company or its directors or officers and (c) delivery of and payment for the Shares under this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Maryland. If the foregoing letter is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicates hereof, whereupon it will become a binding agreement among the Selling Stockholders, the Company and the several Underwriters in accordance with its terms. 26 Any person executing and delivering this Agreement as Attorney-in-Fact for a Selling Stockholder represents by so doing that he has been duly appointed as Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and binding Power of Attorney which authorizes such Attorney-in-Fact to take such action. Very truly yours, SPLASH TECHNOLOGY HOLDINGS, INC. By ------------------------------- Kevin Macgillivray, President and Chief Executive Officer Selling Stockholders listed on Schedule II By ------------------------------- , Attorney-in-Fact] The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. ALEX. BROWN & SONS INCORPORATED MONTGOMERY SECURITIES As Representatives of the several Underwriters listed on Schedule I By: Alex. Brown & Sons Incorporated By: _______________________________ , Authorized Officer 27 SCHEDULE I SCHEDULE OF UNDERWRITERS
Underwriter Number of Firm Shares to be Purchased ----------- ------------------------------------- Alex. Brown & Sons Incorporated Montgomery Securities _____________ Total _____________
28 SCHEDULE II SCHEDULE OF SELLING STOCKHOLDERS
Selling Stockholder Number of Firm Shares to be Sold - ------------------- -------------------------------- _____________ Total _____________
29 SCHEDULE III SCHEDULE OF OPTION SHARES
Maximum Number of Percentage of Total Name of Seller Option Shares to be Sold Number of Option Shares - -------------- ------------------------ ------------------------ ___________ Total ___________ 100% ---
30 EX-3.2 3 FORM OF AMENDED & RESTATED CERTIFICATE OF INCORP EXHIBIT 3.2 AMENDED AND RESTATED -------------------- CERTIFICATE OF INCORPORATION OF SPLASH TECHNOLOGY HOLDINGS, INC. A DELAWARE CORPORATION ---------------------- Splash Technology Holdings, Inc., a corporation organized and existing under the laws of the State of Delaware, does hereby certify: 1. The name of the corporation is Splash Technology Holdings, Inc., (the "Corporation"). The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on December 20, 1995. 2. The restatement herein set forth has been duly approved by the Board of Directors of the Corporation and by the stockholders of the Corporation pursuant to Section 242 of the General Corporation Law of the State of Delaware ("Delaware Law"). 3. The restatement herein set forth has been duly adopted pursuant to Section 245 of the Delaware Law. This Amended and Restated Certificate of Incorporation restates and integrates and amends the provisions of the Corporation's Certificate of Incorporation. 4. The text of the Certificate of Incorporation is hereby amended and restated to read in its entirety as follows: "ARTICLE ONE ----------- The name of this corporation is Splash Technology Holdings, Inc. (the "Corporation"). ARTICLE TWO ----------- The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE THREE ------------- The Corporation shall have perpetual existence. The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. ARTICLE FOUR ------------ This Corporation is authorized to issue two classes of shares to be designated respectively Preferred Stock and Common Stock. The total number of shares of Common Stock this Corporation shall have the authority to issue is 50,000,000 shares, and shall have a par value of $0.001 per share ("COMMON"), and the total number of shares of Preferred Stock this corporation shall have authority to issue is 5,000,000, and shall have a par value of $0.001 per share ("PREFERRED"). Upon the filing of this Amended and Restated Certificate of Incorporation, each _____ issued and outstanding shares of Common Stock shall be automatically combined and reconstituted as _____ shares of Common Stock. No fractional shares shall be issued. In lieu thereof, any fractional shares resulting from the stock split (after aggregating all fractional shares to which any one stockholder shall be entitled as a result of the split) shall be rounded to the nearest whole share. Each share of Common Stock shall continue to have a par value of $0.001 following such stock split. Of the authorized Preferred, a total of 15,246 shares shall be designated Series A Redeemable Preferred Stock ("SERIES A PREFERRED"), and a total of 4,282 shares shall be designated Series B Redeemable and Convertible Preferred Stock ("SERIES B PREFERRED"), and the remaining shares shall be undesignated as to series. Any Preferred Stock not previously designated as to series may be issued from time to time in one or more series pursuant to a resolution or resolutions providing for such issue duly adopted by the Board of Directors (authority to do so being hereby expressly vested in the Board), and such resolution or resolutions shall also set forth the voting powers, full or limited or none, of each such series of Preferred Stock and shall fix the designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions of each such series of Preferred Stock. The Board of Directors is authorized to alter the designation, rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock and, within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series of Preferred Stock, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series. Each share of Preferred Stock issued by the Corporation, if reacquired by the Corporation (whether by redemption, repurchase, conversion to Common Stock or other means), shall upon such reacquisition resume the status of authorized and unissued shares of Preferred Stock, undesignated as to series and available for designation and issuance by the Corporation in accordance with the immediately preceding paragraph. -2- The Corporation shall from time to time in accordance with the laws of the State of Delaware increase the authorized amount of its Common Stock if at any time the number of shares of Common Stock remaining unissued and available for issuance shall not be sufficient to permit conversion of the Preferred Stock. The relative rights, preferences, privileges and restrictions granted to or imposed on the respective classes of the shares of capital stock or the holders thereof are as follows: Section 1. Liquidation Rights. ---------- ------------------ (a) Liquidation Preferences. In the event of any voluntary or involuntary ----------------------- liquidation, dissolution or winding up of the affairs of the Corporation (or the deemed occurrence of such event pursuant to subsection (c) of this Section 1), the holders of each share of Preferred shall be entitled to receive, prior and in preference to any distribution of any of the assets or property of the Corporation to the holders of the Common by reason of their ownership thereof, an amount equal to One Thousand Dollars ($1,000.00) per share for each share of Preferred then held by them and, in addition, an amount equal to any dividends previously accrued or declared but unpaid on such share of Preferred. All of the preferential amount to be paid to the holders of the Series A Preferred under this subsection 1(a) shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any assets of the Corporation to, the holders of the Series B Preferred or the Common in connection with any such liquidation, dissolution or winding up. All of the preferential amount to be paid to the holders of the Series B Preferred under this subsection 1(a) shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any assets of the Corporation to, the holders of the Common in connection with any such liquidation, dissolution or winding up. After the payment or the setting apart for pay ment to the holders of the Series A Preferred and Series B Preferred and of the preferential amounts so payable to them, the remaining assets of the Corporation available for distribution shall be distrib uted in accordance with the provisions of subsection (b) of this Section 1. If the assets or property to be distributed are insufficient to permit the payment to holders of the Series A Preferred of their full preferential amount, the entire assets and property legally available for distribution shall be distributed ratably among the holders of Series A Preferred in proportion to the full preferential amount each such holder is otherwise entitled to receive. If assets and property are remaining and legally available for distribution to the Series B Preferred after distri bution to the Series A Preferred but are insufficient to permit the payment to the holders of the Series B Preferred of their full preferential amount, the entire assets and property legally available for distribution to the holders of Series B Preferred shall be distributed ratably among the holders of the Series B Preferred in proportion to the full preferential amount each such holder is otherwise entitled to receive. (b) Distributions after Payment of Liquidation Preference. After the ----------------------------------------------------- payment or setting apart for payment to the holders of Preferred of the preferential amounts set forth in subsection (a) -3- above, the holders of Common shall be entitled to receive all remaining assets of the Corporation available for distribution. (c) Effect of Merger. For purposes of this Section 1, a merger or ---------------- consolidation of the Corporation with or into any other Corporation or Corporations (except where a majority of the out standing equity securities of the surviving Corporation immediately after the merger or consolidation is held by persons who were stockholders of this Corporation immediately prior to the merger or consolidation), or a sale or other transfer of all or substantially all of the assets of the Corporation (or any series of related transactions resulting in the sale or other transfer of all or substantially all of the assets of the Corporation), shall be treated as a liquidation, dissolution or winding up. (d) Consent. Each holder of an outstanding share of Preferred shall be ------- deemed to have consented, for purposes of Sections 151 and 160 of the Delaware General Corporation Law, to distributions made by the Corporation in connection with the repurchase of shares of Common issued to or held by employees or consultants upon termination of their employment or services pursuant to agreements between the Corporation and such persons providing for the Corporation's right of said repurchase. Section Conversion Rights. The holders of the Series B Preferred shall -------- ----------------- have conversion rights as follows (the "CONVERSION RIGHTS"): (a) Right to Convert. Each share of Series B Preferred shall be ---------------- convertible, without the payment of any additional consideration by the holder thereof and at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for the Series B Preferred, into such number of fully paid and nonassessable shares of Common equal to the "CONVERSION AMOUNT," which conversion amount shall initially be [116.176]/1/. Such initial Conversion Amount shall be subject to adjustment, in order to adjust the number of shares of Common into which each series of the Series B Preferred is convertible, as hereinafter provided. (b) Automatic Conversion. Each share of Series B Preferred shall -------------------- automatically be converted into the number shares of Common as determined by its then effective Conversion Amount upon (A) the closing ("CLOSING") of a firm commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common for the account of the Corporation to the public at an offering price to the public of at least [Twelve Dollars ($12.00)]/2/ per share (as adjusted for stock splits, stock dividends, reclassifications, and like events) and in which the aggregate gross proceeds received by the Corporation (net of underwriting discounts) equal or exceed $35,000,000 (a "QUALIFIED OFFERING"). In the event of a Qualified Offering, the person(s) entitled to receive the Common issuable upon such ___________________________ /1/ Adjust for stock split. /2/ Adjust for stock split. -4- conversion of the Series B Preferred shall not be deemed to have converted that Series B Preferred until immediately prior to the Closing, (B) the closing of merger or consolidation by the Corporation with or into any other corporation in which the holders of all series of the Corporation's capital stock receive an aggregate of consideration of at least $50,000,000, or (C) the closing of the sale or transfer of all or substantially all of the assets of the Corporation in a single transaction or a series of related transactions in which the Corporation receives aggregate proceeds of at least $50,000,000 (the closing of such a merger or consolidation or of such a sale or transfer, a "QUALIFIED MERGER OR SALE"). (c) Mechanics of Conversion. No fractional shares of Common shall be ----------------------- issued upon conversion of the Series B Preferred. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the result obtained by dividing (i) One Thousand Dollars ($1,000) by (ii) the then effective Conversion Amount. Before any holder of Series B Preferred shall be entitled to convert the same into full shares of Common pursuant to Section 2(a) hereof, he shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Series B Preferred, and shall give written notice to the Corporation at such office that he elects to convert the same and shall state therein his name or the name or names of his nominees in which he wishes the certificate or certificates for shares of Common to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Series B Preferred, or to his nominee or nominees, a certificate or certificates for the number of shares of Common to which he shall be entitled as aforesaid, together with cash in lieu of any fraction of a share. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series B Preferred to be converted, and the person or persons entitled to receive the shares of Common issuable upon conversion shall be treated for all purposes as the record holder or holders of such shares of Common on such date. (d) Adjustments to Conversion Amount. -------------------------------- (i) Adjustments for Subdivisions, Combinations, Consolidations or --------------------------------------------------------------- Stock Dividends. In the event the outstanding shares of Common shall be - --------------- subdivision (by stock split or otherwise), into a greater number of shares of Common, or shares of Common shall have been issued by stock dividend, the Conversion Amount then in effect shall, concurrently with the effectiveness of such subdivision or stock dividend, be proportionately increased. In the event the outstanding shares of Common shall be combined or consolidated by reclassification or otherwise, into a lesser number of shares of Common, the Conversion Amount then in effect shall, concurrently with the effectiveness of such combination or consolidation, be proportionately decreased. (ii) Adjustments for Other Distributions. In the event the ----------------------------------- Corporation any time or from time to time makes, or fixes a record date for the determination of holders of Common entitled to receive any distribution payable in securities of the Corporation other than shares of Common, then and in each such event provision shall be made so that the holders of Series B Preferred shall receive upon conversion thereof, in addition to the number of shares of Common -5- receivable thereupon, the amount of securities of the Corporation which they would have received had their Series B Preferred been converted into Common on the date of such event and had they thereafter, during the period from the date of such event to and including the date of conversion, retained such securities receivable by them as aforesaid during such period, subject to all other adjustments called for during such period under this Section 2 with respect to the rights of the holders of the Series B Preferred. In the event the Corporation shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by the Corporation or other persons, assets (excluding cash dividends), or options or rights, then, in each such case for the purpose of this subsection 2(d), the holders of the Series B Preferred shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of shares of Common of the Corporation into which their shares of Series B Preferred are convertible as of the record date fixed for the determination of the holders of Common of the Corporation entitled to receive such distribution. (iii) Adjustments for Reclassification, Exchange and Substitution. ----------------------------------------------------------- If the Common issuable upon conversion of the Series B Preferred shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for above), the Conversion Amount then in effect shall, concurrently with the effectiveness of such reorganization or reclassification, be proportionately adjusted such that the Series B Preferred shall be convertible into, in lieu of the number of shares of Common which the holders would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equivalent to the number of shares of Common that would have been subject to receipt by the holders upon conversion of the Series B Preferred immediately before that change. (iv) Reorganization, Mergers, Consolidations, or Sales of Assets. ----------------------------------------------------------- Subject to Section 1(c) hereof, if at any time or from time to time there shall be a capital reorganization of the Common (other than a subdivision, combination, reclassification, or exchange of shares provided for elsewhere in this Section 2) or a merger or consolidation of this Corporation with or into another Corporation, or the sale of all or substantially all of this Corporation's properties and assets to any other person, then, as a part of such reorganization, merger, consolidation, or sale, provision shall be made so that the holders of the Series B Preferred shall thereafter be entitled to receive upon conversion of the Series B Preferred, the number of shares of stock or other securities or property of this Corporation, or of the successor Corporation resulting from such merger or consolidation or sale, to which a holder of Common deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation, or sale. In any such case, appropriate adjustment shall be made in the application of the provisions of Section 2 with respect to the rights of the holders of the Series B Preferred after the reorganization, merger, consolidation, or sale to the end that the provisions of this Section 2 (including adjustment of the Conversion Amount then in effect) shall be applicable after that event as nearly equivalent as may be practicable. (e) No Impairment. The Corporation will not, by amendment of its ------------- Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, -6- issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation but will at all times in good faith assist in the carrying out of all the provisions of this Section 2 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series B Preferred against impairment. (f) Certificate as to Adjustments. Upon the occurrence of each adjustment ----------------------------- or readjustment of the Conversion Amount pursuant to this Section 2, the Corporation at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Series B Preferred a certificate certified by the Corporation's chief financial officer setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series B Preferred, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments and (ii) the Conversion Amount in effect at that time. (g) Notices of Record Date. In the event of any taking by the Corporation ---------------------- of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters) or other distribution, the Corporation shall mail to each holder of Series B Preferred at least ten (10) days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution. Section 3. Redemption. ---------- ---------- (a) Optional Redemption. At its option and to the extent permitted by ------------------- law, the Corporation may redeem all or any, allocated ratably among the holders thereof, outstanding shares of Series A Preferred. At its option and to the extent permitted by law, the Corporation may redeem all or any, allocated ratably among the holders thereof, outstanding shares of Series B Preferred, but only if no shares of Series A Preferred are then outstanding. (b) Mandatory Redemption. -------------------- (i) On Liquidity. Upon (A) the Closing of a Qualified Offering, or ------------ (B) a Qualified Merger Or Sale, the Corporation shall redeem all of the shares of Series A Preferred then outstanding. (ii) On Sixth and Seventh Anniversaries - Series B Preferred. To the ------------------------------------------------------- extent permitted by law and only if no shares of Series A Preferred are outstanding, the Corporation shall redeem, ratably among the holders thereof, (A) one-half of the outstanding shares of Series B Preferred on the sixth anniversary of the original issue thereof and (B) the remaining outstanding shares of the Series B Preferred on the seventh anniversary of -7- the original date of issue thereof. In the event that such redemption of the Series B Preferred is not permitted in whole or in part and only if no shares of Series A Preferred are outstanding, the Corporation shall, at the sixth anniversary of the original date of issue or the seventh anniversary of the original date of issue (as appropriate), redeem, allocated ratably among the holders thereof, as many shares of Series B Preferred as permitted by law (up to one-half of the outstanding shares of Series B Preferred Stock on the sixth anniversary of the original date of issue thereof). In such event, the shares of Series B Preferred not redeemed shall remain outstanding and be entitled to all the rights and preferences provided herein. At any time thereafter when additional funds of the Corporation are legally available for the redemption of shares of Series B Preferred and only if no shares of Series A Preferred are outstanding, such funds will immediately be used to redeem the balance of the shares which the Corporation has become obligated to redeem but which it has not redeemed. (c) Redemption Price. The redemption price for each share of Preferred ---------------- redeemed pursuant to this Section 3 shall be equal to $1,000 per share of outstanding Preferred plus all accrued and unpaid dividends on such share, calculated in accordance with Section 5 below, whether or not earned or declared, and any otherwise declared and unpaid dividends on such share, up to and including the date fixed for redemption (the "REDEMPTION PRICE"). (d) Pro Rata Basis. The redemption or repurchase of all or any portion or -------------- number of shares of the Preferred Stock, whether pursuant to the provisions of this Section 5 or otherwise, and all dividends or other distributions thereon or with respect thereto shall be on a pro rata basis in right of payment and in all other respects for each and every share of such the Preferred Stock (except as otherwise provided in Section 5(a)), without regard to the identity of the holder, except as otherwise set forth above. (e) Redemption Notice. At least 30 days prior to the date(s) fixed for ----------------- redemption (each, a "REDEMPTION DATE"), written notice (the "REDEMPTION NOTICE") shall be mailed, postage prepaid, by the Corporation to each holder of record of each series of Preferred, at its address shown on the records of the Corporation. The Redemption Notice shall contain the following information: (i) The series of Preferred to be redeemed; the number of shares of the series of Preferred held by the holder which shall be redeemed by the Corporation, and the total number of shares of such series of Preferred held by all holders to be so redeemed, (ii) The Redemption Date and the Redemption Price, and (iii) That the holder is to surrender to the Corporation at the place designated in such notice, the holder's certificate or certificates representing the shares of the series Preferred to be redeemed. (f) Payment and Surrender of Certificates. Each holder of shares of ------------------------------------- Preferred Stock to be redeemed shall surrender the certificate or certificates representing such shares to the Corporation at the place designated in the Redemption Notice on or before the Redemption Date, and thereupon the applicable Redemption Price for such shares as set forth in this Section 3 shall be paid to the order of -8- the person whose name appears on such certificate or certificates and each surrendered certificate shall be canceled and retired. (g) No Rights as Stockholder Following Redemption. If any shares of --------------------------------------------- Preferred are not redeemed solely because a holder fails to surrender the certificate or certificates representing such shares pursuant to Section 3(f) hereof, then, from and after the Redemption Date, the holders of such shares of Preferred thereupon subject to redemption shall cease to have any rights of a holder of Preferred except solely for the right to receive the Redemption Price upon surrender of the certificate or certificates representing the shares. Section 4. Voting Rights. ---------- ------------- (a) General. Except as otherwise provided herein, or as required by law, ------- each issued and outstanding share of Common shall be entitled to one vote on all matters. Except as required by law or by the provisions hereof, the holders of the Series B Preferred shall be entitled to vote on all matters with the holders of the Common on an as if converted basis. Except as required by law or the provisions hereof, the holders of the Series A Preferred shall not be entitled to vote on any matters. (b) Board of Directors. So long as any shares of Series A Preferred are ------------------ outstanding, the holders of shares of the Series A Preferred shall have the right to elect one director (the "SERIES A DIRECTOR") and the holders of the shares of Common Stock and the Series B Preferred (voting on an as-if converted basis), shall have the right to elect the remaining directors. (c) Procedures for the Election of the Series A Director. ---------------------------------------------------- (i) The Series A Director shall hold office for a term expiring at the next annual meeting of stockholders. Any vacancy caused by the death or resignation of the Series A Director may be filled only by the holders of Series A Preferred. A special meeting of the holders of the Series A Preferred entitled to vote with respect to filling the vacancy shall be called and held as promptly as practicable after any such death or resignation at the direction of a majority of the Board of Directors, and in any event shall be called within ten days, to be held within 15 days, after receipt of a written request by the holders of record of at least 50% of the then outstanding shares of Series A Preferred. In connection with any special meeting to be held for the purpose of electing the Series A Director to fill a vacancy, only holders of Series A Preferred shall be notified and be permitted to participate at such meeting. The holders of record of at least 50% of the then outstanding shares of the Series A Preferred may designate in writing one of their number to call the meeting, and the meeting may be called by the person so designated upon notice in accordance with the notice required for annual meetings of stockholders. If any special meeting of the holders of Series A Preferred required to be called by a holder of Series A Preferred for the election of directors pursuant to this Section 4(c) shall not have been duly called within ten days after the request therefor, then the secretary of the Corporation shall call the meeting. Any holders of shares of Series A Preferred shall have access to the stock record books of the Corporation for the purpose of so calling -9- a special meeting. The Corporation shall pay the reasonable expenses of calling and holding any such meeting. (ii) Any special meeting of the holders of shares of Series A Preferred to vote for the election of directors pursuant to this Section 4(c) shall be held in the city in which the preceding annual meeting of stockholders of the Corporation was held or in the city designated by the holders on record of at least 50% of the then outstanding shares of Series A Preferred. At a special or annual meeting for the election of directors by the holders of shares of Series A Preferred, the presence in person, by proxy or by telephone of the holders of 50% of the outstanding shares of Series A Preferred entitled to vote thereon shall constitute a quorum. In connection with any special meeting to be held for the purpose of electing the Series A Director to fill a vacancy, only holders of the Series A Preferred shall be notified and be permitted to participate at such meeting. A majority of the holders of the shares of Series A Preferred entitled to vote thereon present in person, by proxy or by telephone shall have the power to adjourn the meeting for the purpose of such election, from time to time without notice, other than announcement at the meeting, until a quorum shall be present. The election of the Series A Director also may be accomplished by written consent in lieu of a meeting of the holders of the Series A Preferred. (iii) In connection with any vote for the Series A Director, each holder of Series A Preferred Stock as provided herein shall be entitled to one vote for each share of Series A Preferred held by such holder that is then convertible, the nominees receiving a plurality of the votes entitled to be cast shall be elected. (d) Class Voting for Directors other than Series A Director. Following ------------------------------------------------------- the Closing of the corporation's initial public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock (the "Initial Public Offering"), all directors other than the Series A Director shall be divided into three classes designated as Class I, Class II, and Class III, respectively. Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the Board of Directors. At the first annual meeting of stockholders following the closing of the Initial Public Offering, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following the closing of the Initial Public Offering, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following the closing of the Initial Public Offering, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, such Directors shall be elected for a full term of three years to succeed the Directors of the class whose terms expire at such annual meeting. Section 5. Dividend Rights. --------- --------------- (a) From the date of issuance until January 1, 1997, no holders of the then outstanding shares of Preferred shall be entitled to receive cumulative dividends. During the same period, to the -10- extent that dividends are properly and legally declared by the Board of Directors at the rate set forth below, they shall be fully paid to (i) holders of Series A Preferred before any dividend or other distribution shall be paid on or declared and set apart for the holders of the Series B Preferred or Common, and (ii) holders of Series B Preferred before any dividend or other distribution shall be paid on or declared and set apart for the holders of the Common. (b) After January 1, 1997, the holders of outstanding Series A Preferred shall be entitled to receive, when and as declared by the Board of Directors and out of funds legally available therefore, cash dividends at the annual rate of [Sixty Dollars ($60.00)]/3/ per share of outstanding Series A Preferred (as adjusted for stock splits, stock dividends, reclassifications, and like events), payable in preference and priority to any payment of any dividend on Series B Preferred or Common, when and as declared by the Board of Directors in its discretion. Such annual dividend rate shall increase to [Eighty Dollars ($80.00)]/4/ per share of Series A Preferred (as adjusted for stock splits, stock dividends, reclassifications, and like events) after January 1, 1998, and shall further increase to [One Hundred Dollars ($100.00)]/5/ per share of Series A Preferred (as adjusted for stock splits, stock dividends, reclassifications, and like events) after January 1, 1999. Such dividends shall be cumulative whether or not earned or declared so that if such dividends in respect of any previous or current annual dividend period, at the annual rate specified above, shall not have been paid or declared, the deficiency shall be fully paid to the holders of Series A Preferred before any dividend or other distribution shall be paid on or declared and set apart for the holders of the Series B Preferred or Common. (c) After January 1, 1997, the holders of the Series B Preferred shall be entitled to receive, out of any funds legally available therefor, dividends at an annual rate of [Sixty Dollars ($60.00)]/6/ per share of outstanding Series B Preferred (as adjusted for stock splits, stock dividends, reclassifications and like events), payable in preference and priority to any payment of any dividend on the Common, when and as declared by the Board of Directors in its discretion. Such dividends shall be cumulative whether or not earned or declared so that if such dividends in respect of any previous or current annual dividend period, at the annual rate specified above, shall not have been paid or declared, the deficiency shall be fully paid to the holders of Series B Preferred before any dividend or other distribution shall be paid on or declared and set apart for the holders of the Common. (d) Dividends may be paid on the Common as and when declared by the Board of Directors, subject to the prior dividend rights of the Preferred. __________________________ /3/ Adjust for stock split. /4/ Adjust for stock split. /5/ Adjust for stock split. /6/ Adjust for stock split. -11- Section 6. Covenants. So long as any shares of Preferred shall be ---------- --------- outstanding, the Corpo ration shall not, without first obtaining the affirmative vote or written consent of holders of such outstanding shares of Preferred voting together as a class (except that for the purposes of Sections 6(a) through 6(d), if one series of Preferred is affected in a manner different than another, a majority vote of each series of Preferred so disproportionately affected, voting as a series, shall be required): (a) amend or repeal any provision of, or add any provision to, the Corporation's Certificate of Incorporation or Bylaws if such action would adversely alter or change the preferences, rights, privileges or powers of, or the restrictions provided for the benefit of, the Series A Preferred or Series B Preferred; (b) reclassify any Common or other series of its capital stock shares into shares having any preference or priority as to dividends, liquidation, redemption, blocking rights, voting rights, conversion or otherwise superior to or on a parity with any such preference or priority of the Series A Preferred or Series B Preferred (including amendment of the Series A Preferred to provide it with the right to convert into Common Stock); (c) pay or declare any dividend or distribution on any shares of Preferred, Common or any other series of its capital stock or apply any of its assets to the redemption, retirement, purchase or other acquisition directly or indirectly, through subsidiaries or otherwise, of any shares of Preferred, Common, or any other series of its capital stock (or derivative instrument therefor) except from employees of, or consultants to, the Corporation upon termination of employment or consultancy and except for redemption of Preferred or dividends on Preferred in accordance with this Certificate of Incorporation; (d) create or issue any other class or classes of stock or series of Preferred senior to or on parity with the Series A Preferred or the Series B Preferred with respect to dividends, liquidation, redemption, blocking rights, voting rights, conversion or otherwise or increase or decrease the number of shares of any series of Preferred; or (e) merge or consolidate with or into any other corporation (except where a majority of the outstanding equity securities of the surviving corporation immediately after the merger or consolidation is held by persons who were stockholders of this Corporation immediately prior to the merger or consolidation), or sell or otherwise transfer in a single transaction or a series of related transactions all or substantially all of the assets of the Corporation. Section 7. Residual Rights. All rights accruing to the outstanding shares ---------- --------------- of the Corporation not expressly provided for to the contrary herein shall be vested in the Common. Section 8. Partial Conversion or Redemption. In the event that less than ---------- -------------------------------- all of a holder's shares of Preferred shall be converted at any time pursuant to Section 2 hereof or redeemed at any time pursuant to Section 3 hereof, the Corporation shall promptly upon receipt of such holder's -12- certificate for shares to be converted or promptly after the later of the dated fixed for redemption or the receipt of such holder's certificate for shares to be redeemed, issue a new certificate to such holder representing the unconverted or unredeemed shares, as the case may be. ARTICLE FIVE ------------ The Corporation is to have perpetual existence. ARTICLE SIX ----------- Elections of directors need not be by written ballot unless a stockholder demands election by written ballot at the meeting and before voting begins or unless the Bylaws of the Corporation shall so provide. ARTICLE SEVEN ------------- The number of directors which constitute the whole Board of Directors of the Corporation shall be fixed exclusively by one or more resolution adopted from time to time by the Board of Directors. ARTICLE EIGHT ------------- In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter, amend or repeal the Bylaws of the Corporation. ARTICLE NINE ------------ (a) To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. (b) The Corporation may indemnify to the fullest extent permitted by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, admini strative or investigative, by reason of the fact that he, his testator or intestate is or was a director, officer, employee or agent of the Corporation or any predecessor of the Corporation or serves or served at any other enterprise as a director, officer, employee or agent at the request of the Corporation or any predecessor to the Corporation. -13- (c) Neither any amendment nor repeal of this Article Ten, nor the adoption of any provision of this Corporation's Certificate of Incorporation inconsistent with this Article Ten, shall eliminate or reduce the effect of this Article Ten, in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this Article Ten, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision. ARTICLE TEN ----------- Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. No action may be taken by the stockholders of the Corporation without a meeting, and no consents in lieu of a meeting may be taken pursuant to Section 228 of the Delaware Law. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation. ARTICLE ELEVEN -------------- Vacancies created by newly created directorships, created in accordance with the Bylaws of this Corporation, may be filled by the vote of a majority, although less than a quorum, of the directors then in office, or by a sole remaining director. ARTICLE TWELVE -------------- Advance notice of new business and stockholder nominations for the election of directors shall be given in the manner and to the extent provided in the Bylaws of the Corporation. ARTICLE THIRTEEN ---------------- The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation." -14- IN WITNESS WHEREOF, Splash Technology Holdings, Inc. has caused this Certificate of Restated and Amended of Certificate of Incorporation to be signed by Kevin K. Macgillivray, its President and Chief Executive Officer and attested to by Brett D. Byers, its Assistant Secretary, on __________ ___, 1996. SPLASH TECHNOLOGY HOLDINGS, INC. A Delaware Corporation By:_________________________________________ Kevin K. Macgillivray President and Chief Executive Officer ATTEST: By:___________________________ Brett D. Byers Assistant Secretary -15- EX-3.4 4 FORM OF AMENDED & RESTATED BY-LAWS EXHIBIT 3.4 AMENDED AND RESTATED BY-LAWS ---------------------------- OF -- SPLASH TECHNOLOGY HOLDINGS, INC. -------------------------------- (A Delaware Corporation) TABLE OF CONTENTS
PAGE ARTICLE I CORPORATE OFFICES.............................................. -1- 1.1 REGISTERED OFFICE............................................. -1- 1.2 OTHER OFFICES................................................. -1- ARTICLE II MEETINGS OF STOCKHOLDERS -1- 2.1 PLACE OF MEETINGS............................................. -1- 2.2 ANNUAL MEETING................................................ -1- 2.3 SPECIAL MEETING............................................... -3- 2.4 NOTICE OF STOCKHOLDERS' MEETINGS.............................. -3- 2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE.................. -4- 2.6 QUORUM........................................................ -4- 2.7 ADJOURNED MEETING; NOTICE..................................... -5- 2.8 CONDUCT OF BUSINESS........................................... -5- 2.9 VOTING........................................................ -5- 2.10 WAIVER OF NOTICE.............................................. -5- 2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING....... -6- 2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS... -6- 2.13 PROXIES....................................................... -7- 2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE......................... -7- ARTICLE III DIRECTORS.................................................... -7- 3.1 POWERS........................................................ -7- 3.2 NUMBER OF DIRECTORS........................................... -8- 3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS....... -8- 3.4 RESIGNATION AND VACANCIES..................................... -8- 3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE...................... -9- 3.6 REGULAR MEETINGS.............................................. -9- 3.7 SPECIAL MEETINGS; NOTICE...................................... -9- 3.8 QUORUM........................................................ -10- 3.9 WAIVER OF NOTICE.............................................. -10- 3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING............. -10- 3.11 FEES AND COMPENSATION OF DIRECTORS............................ -11- 3.12 APPROVAL OF LOANS TO OFFICERS................................. -11- 3.13 REMOVAL OF DIRECTORS.......................................... -11- 3.14 CLASSES OF DIRECTORS.......................................... -11-
TABLE OF CONTENTS (continued)
Page ---- ARTICLE IV COMMITTEES.................................................... -12- 4.1 COMMITTEES OF DIRECTORS....................................... -12- 4.2 COMMITTEE MINUTES............................................. -13- 4.3 MEETINGS AND ACTION OF COMMITTEES............................. -13- ARTICLE V OFFICERS....................................................... -13- 5.1 OFFICERS...................................................... -13- 5.2 APPOINTMENT OF OFFICERS....................................... -13- 5.3 SUBORDINATE OFFICERS.......................................... -13- 5.4 REMOVAL AND RESIGNATION OF OFFICERS........................... -14- 5.5 VACANCIES IN OFFICES.......................................... -14- 5.6 CHAIRMAN OF THE BOARD......................................... -14- 5.7 PRESIDENT..................................................... -14- 5.8 VICE PRESIDENTS............................................... -15- 5.9 SECRETARY..................................................... -15- 5.10 CHIEF FINANCIAL OFFICER....................................... -15- 5.11 ASSISTANT SECRETARY........................................... -16- 5.12 ASSISTANT TREASURER........................................... -16- 5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS................ -16- 5.14 AUTHORITY AND DUTIES OF OFFICERS.............................. -16- ARTICLE VI INDEMNITY..................................................... -17- 6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS..................... -17- 6.2 INDEMNIFICATION OF OTHERS..................................... -17- 6.3 INSURANCE..................................................... -17- ARTICLE VII RECORDS AND REPORTS -18- 7.1 MAINTENANCE AND INSPECTION OF RECORDS......................... -18- 7.2 INSPECTION BY DIRECTORS....................................... -18- 7.3 ANNUAL STATEMENT TO STOCKHOLDERS.............................. -19-
-ii- TABLE OF CONTENTS (continued)
Page ---- ARTICLE VIII GENERAL MATTERS............................................ -19- 8.1 CHECKS....................................................... -19- 8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS............. -19- 8.3 STOCK CERTIFICATES; PARTLY PAID SHARES....................... -19- 8.4 SPECIAL DESIGNATION ON CERTIFICATES.......................... -20- 8.5 LOST CERTIFICATES............................................ -20- 8.6 CONSTRUCTION; DEFINITIONS.................................... -20- 8.7 DIVIDENDS.................................................... -21- 8.8 FISCAL YEAR.................................................. -21- 8.9 SEAL......................................................... -21- 8.10 TRANSFER OF STOCK............................................ -21- 8.11 STOCK TRANSFER AGREEMENTS.................................... -21- 8.12 REGISTERED STOCKHOLDERS...................................... -21- ARTICLE IX AMENDMENTS................................................... -22-
-iii- AMENDED AND RESTATED BY-LAWS ---------------------------- OF -- SPLASH TECHNOLOGY HOLDINGS, INC. -------------------------------- ARTICLE CORPORATE OFFICES ----------------- 1.1 REGISTERED OFFICE ----------------- The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The name of the registered agent of the corporation at such location is The Corporation Trust Company. 1.2 OTHER OFFICES ------------- The Board of Directors may at any time establish other offices at any place or places where the corporation is qualified to do business. ARTICLE MEETINGS OF STOCKHOLDERS ------------------------ 2.1 PLACE OF MEETINGS ----------------- Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the Board of Directors. In the absence of any such designation, stockholders' meetings shall be held at the registered office of the corporation. 2.2 ANNUAL MEETING -------------- (a) The annual meeting of stockholders shall be held each year on a date and at a time designated by the Board of Directors. At the meeting, directors shall be elected and any other proper business may be transacted. (b) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be: (A) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (B) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (C) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, such stockholder's notice must be delivered to or mailed and received by the Secretary of the corporation not less than ninety (90) days prior to the meeting; provided, however, that in the event that less than one-hundred (100) days notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the corporation's books, of the stockholder proposing such business, (iii) the class and number of shares of the corporation which are beneficially owned by the stockholder, (iv) any material interest of the stockholder in such business and (v) any other information that is required to be provided by the stockholder pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "1934 Act"), in such stockholder's capacity as a proponent to a stockholder proposal. Notwithstanding the foregoing, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholder's meeting, stockholders must provide notice as required by the regulations promulgated under the 1934 Act. Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this paragraph (b). The chairman of the annual meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting and in accordance with the provisions of this paragraph (b), and, if he should so determine, he shall so declare at the meeting that any such business not properly brought before the meeting shall not be transacted. (c) Only persons who are nominated in accordance with the procedures set forth in this paragraph (c) shall be eligible for election as Directors. Nominations of persons for election to the Board of Directors of the corporation may be made at a meeting of stockholders by or at the direction of the Board of Directors or by any stockholder of the corporation entitled to vote in the election of Directors at the meeting who complies with the notice procedures set forth in this paragraph (c). Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the corporation in accordance with the provisions of paragraph (b) of this Section 2.2. Such stockholder's notice shall set forth (i) as to each person, if any, whom the stockholder proposes to nominate for election or reelection as a Director: (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) the class and number of shares of the corporation which are beneficially owned by such person, (D) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nominations are to be made by the stockholder, and (E) any other information relating to such person that is required to be disclosed in solicitations of proxies for elections of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the 1934 Act (including without limitation such person's written consent to being named in the proxy statement, if any, as a nominee and to serving as a Director if elected); and (ii) as to such stockholder giving notice, the information required to be provided pursuant to paragraph (b) of this -2- Section 2.2. At the request of the Board of Directors, any person nominated by a stockholder for election as a Director shall furnish to the Secretary of the corporation that information required to be set forth in the stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a Director of the corporation unless nominated in accordance with the procedures set forth in this paragraph (c). The chairman of the meeting shall, if the facts warrant, determine and declare at the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws, and if he should so determine, he shall so declare at the meeting, and the defective nomination shall be disregarded. 2.3 SPECIAL MEETING --------------- A special meeting of the stockholders may be called at any time by the Board of Directors, the Chairman of the Board or the President of the Corporation. No other person or persons are permitted to call a special meeting. No business may be conducted at a special meeting other than the business specified by the Board of Directors as specified in its notice of calling of the meeting delivered to the Corporation as provided below by Sections 2.4 and 2.5, the Chairman of the Board, or the President. If a special meeting is called by any person or persons other than the Board of Directors, the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the Chairman of the Board, the President, Chief Executive Officer, or the Secretary of the corporation. No business may be transacted at such special meeting except for such business as may properly be brought before the stockholders and that is specified in such notice. The officer receiving the request shall cause notice to be promptly given to the stockholders entitled to vote, in accordance with the provisions of Sections 2.4 and 2.5, that a meeting will be held at the time requested by the person or persons who called the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after the receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 2.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held. 2.4 NOTICE OF STOCKHOLDERS' MEETINGS -------------------------------- Except as set forth in Section 2.3, all notices of meetings of stockholders shall be in writing and sent or otherwise given in accordance with Section 2.5 of these bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting. The notice shall specify the place, date, and hour of the meeting and (i) in the case of a special meeting, the general nature of the business to be transacted (no business other than that specified in the notice may be transacted) or (ii) in the case of the annual meeting, those matters which the Board of Directors, at the time of giving the notice, -3- intends to present for action by the stockholders (but any proper matter may be presented at the meeting for such action). The notice of any meeting at which directors are to be elected shall include the name of any nominee or nominees who, at the time of the notice, the board intends to present for election. 2.5 MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE -------------------------------------------- Written notice of any meeting of stockholders shall be given either personally or by first-class mail or by facsimile, telegraphic or other written communication. Notices not personally delivered shall be sent charges prepaid and shall be addressed to the stockholder at the address of that stockholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice. If no such address appears on the corporation's books or is given, notice shall be deemed to have been given if sent to that stockholder by mail or telegraphic or other written communication to the corporation's principal executive office, or if published at least once in a newspaper of general circulation in the county where that office is located. Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by telegram or other means of written communication. If any notice addressed to a stockholder at the address of that stockholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice to the stockholder at that address, then all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available to the stockholder on written demand of the stockholder at the principal executive office of the corporation for a period of one (1) year from the date of the giving of the notice. An affidavit of the mailing or other means of giving any notice of any stockholders' meeting, executed by the Secretary, Assistant Secretary or any transfer agent of the corporation giving the notice, shall be prima facie evidence of the giving of such notice. 2. QUORUM ------ The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stock holders for the transaction of business except as otherwise provided by statute, by the certificate of incorporation or by the Stockholders Agreement. If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the Chairman of the meeting or (ii) the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the meeting as originally noticed. -4- 2.7 ADJOURNED MEETING; NOTICE ------------------------- When a meeting is adjourned to another time or place, unless these by- laws otherwise require, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. 2.8 CONDUCT OF BUSINESS ------------------- The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business. 2.9 VOTING ------ The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.12 of these by- laws, subject to the provisions of Sections 217 and 218 of the General Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners of stock and to voting trusts and other voting agreements). Except as may be otherwise provided in the certificate of incorporation, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder. 2.10 WAIVER OF NOTICE ---------------- Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these by-laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice unless so required by the certificate of incorporation or these by-laws. -5- 2.11 STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING ------------------------------------------------------- Unless otherwise provided in the certificate of incorporation, any action required by this chapter to be taken at any annual or special meeting of stockholders of a corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. If the action which is consented to is such as would have required the filing of a certificate under any section of the General Corporation Law of Delaware if such action had been voted on by stock holders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written notice and written consent have been given as provided in Section 228 of the General Corporation Law of Delaware. 2.12 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS ----------------------------------------------------------- In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corpo rate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If the Board of Directors does not so fix a record date: (i) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. (ii) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. (iii) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. -6- A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. 2.13 PROXIES ------- Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by a written proxy, signed by the stockholder and filed with the Secretary of the corporation, but no such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A proxy shall be deemed signed if the stockholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission or otherwise) by the stockholder or the stockholder's attorney-in-fact. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(e) of the General Corporation Law of Delaware. 2.14 LIST OF STOCKHOLDERS ENTITLED TO VOTE ------------------------------------- The officer who has charge of the stock ledger of a corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them. ARTICLE III DIRECTORS --------- 3.1 POWERS ------ Subject to the provisions of the General Corporation Law of Delaware and any limitations in the certificate of incorporation or these by-laws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board of Directors. -7- 3.2 NUMBER OF DIRECTORS ------------------- The number of directors which constitute the whole Board of Directors shall be fixed exclusively by one or more resolutions adopted from time to time by the Board of Directors. No reduction of the authorized number of directors shall have the effect of removing any director before that director's term of office expires. 3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS ------------------------------------------------------- Except as provided in Section 3.4 of these by-laws, the certificate of incorporation or the Stockholders Agreement, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the certificate of incorporation or these by-laws, wherein other qualifications for directors may be prescribed. Each director, including a director elected to fill a vacancy, shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Elections of directors need not be by written ballot. 3.4 RESIGNATION AND VACANCIES ------------------------- Any director may resign at any time upon written notice to the attention of the Secretary of the corporation. Subject to the provisions of the Stockholders Agreement and the certificate of incorporation, when one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies. Unless otherwise provided in the certificate of incorporation, these by- laws or the Stockholders Agreement: (i) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. (ii) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. -8- If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these by-laws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the General Corporation Law of Delaware. If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten (10) percent of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the General Corporation Law of Delaware as far as applicable. 3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE ---------------------------------------- The Board of Directors of the corporation may hold meetings, both regular and special, either within or outside the State of Delaware. Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting. 3.6 REGULAR MEETINGS ---------------- Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the board. 3.7 SPECIAL MEETINGS; NOTICE ------------------------ Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the Chairman of the Board, the President, any Vice President, the Secretary or any one director. Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail or telegram, charges prepaid, addressed to each director at that director's address as it is shown on the records of the corporation. If the notice is mailed, it shall be deposited in the United States mail at least four (4) days before the time of the holding of the meeting. If the notice is delivered personally or by telephone or by telegram, it shall be -9- delivered personally or by telephone or to the telegraph company at least forty- eight (48) hours before the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose or the place of the meeting, if the meeting is to be held at the principal executive office of the corporation. 3.8 QUORUM ------ At all meetings of the Board of Directors, a majority of the authorized number of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum is not present at any meeting of the Board of Directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting. 3.9 WAIVER OF NOTICE ---------------- Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these by- laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice unless so required by the certificate of incorporation or these by-laws. 3.10 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING ------------------------------------------------- Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing and the writing or writings are filed with the minutes of proceedings of the board or committee. -10- 3.11 FEES AND COMPENSATION OF DIRECTORS ---------------------------------- Unless otherwise restricted by the certificate of incorporation or these by-laws, the Board of Directors shall have the authority to fix the compensation of directors. 3.12 APPROVAL OF LOANS TO OFFICERS ----------------------------- The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section contained shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute. 3.13 REMOVAL OF DIRECTORS -------------------- Unless otherwise restricted by statute, and except as otherwise provided by the certificate of incorporation, these by-laws or the Stockholders Agreement, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors; provided, however, that, so long as stockholders of the corporation are entitled to cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against his or her removal would be sufficient to elect such director if then cumulatively voted at an election of the entire Board of Directors. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director's term of office. 3.14 CLASSES OF DIRECTORS -------------------- Following the closing of the corporation's initial public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "1933 Act"), covering the offer and sale of Common Stock of the corporation (the "Initial Public Offering"), the Directors, other than the Series A Director (as defined in the Corporation's Certificate of Incorporation), shall be divided into three classes designated as Class I, Class II and Class III, respectively. Such Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the Board of Directors. At the first annual meeting of stockholders following the closing of the Initial Public Offering, the term of office of the Class I Directors shall expire and Class I Directors shall be elected for a full term of three years. At the second annual meeting of stockholders following the closing of the Initial Public Offering, the term of office of the Class II Directors shall expire and Class II Directors shall be elected for a full term of three years. At the third annual meeting of stockholders following the closing of the Initial Public Offering, the term of office of the Class III Directors shall expire and Class III Directors shall be elected a full term of three years. At each succeeding annual -11 meeting of stockholders, such Directors shall be elected for a full term of three years to succeed the Directors of the class whose terms expire at such annual meeting. Notwithstanding the foregoing provisions of this Article, each Director shall serve until his successor is duly elected and qualified or until his earlier death, resignation or removal. No decrease in the number of Directors constituting the Board of Directors shall shorten the term of any incumbent Director. ARTICLE IV COMMITTEES ---------- 4.1 COMMITTEES OF DIRECTORS ----------------------- The Board of Directors may, by resolution passed by a majority of the whole board, designate one or more committees, with each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors or in the by-laws of the corporation, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) amend the certificate of incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors as provided in Section 151(a) of the General Corporation Law of Delaware, fix the designations and any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation or fix the number of shares of any series of stock or authorize the increase or decrease of the shares of any series), (ii) adopt an agreement of merger or consolidation under Sections 251 or 252 of the General Corporation Law of Delaware, (iii) recommend to the stockholders the sale, lease or exchange of all or substantially all of the corporation's property and assets, (iv) recommend to the stockholders a dissolution of the corporation or a revocation of a dissolution, or (v) amend the bylaws of the corporation; and, unless the board resolution establishing the committee, the by-laws or the certificate of incorporation expressly so provide, no such committee shall have the power or authority to declare a dividend, to authorize the issuance of stock, or to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of Delaware. -12- 4.2 COMMITTEE MINUTES ----------------- Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required. 4.3 MEETINGS AND ACTION OF COMMITTEES --------------------------------- Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of Article III of these by-laws, Section 3.5 (place of meetings and meetings by telephone), Section 3.6 (regular meetings), Section 3.7 (special meetings and notice), Section 3.8 (quorum), Section 3.9 (waiver of notice), and Section 3.10 (action without a meeting), with such changes in the context of those by-laws as are necessary to substitute the committee and its members for the Board of Directors and its members; provided, however, that the time of regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee, that special meetings of committees may also be called by resolution of the Board of Directors and that notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee not inconsistent with the provisions of these by-laws. ARTICLE V OFFICERS -------- 5.1 OFFICERS -------- The officers of the corporation shall be a president, a secretary, and a chief financial officer. The corporation may also have, at the discretion of the Board of Directors, a chairman of the board, one or more vice presidents, one or more assistant vice presidents, one or more assistant secretaries, one or more assistant treasurers, and any such other officers as may be appointed in accordance with the provisions of Section 5.3 of these by-laws. Any number of offices may be held by the same person. 5.2 APPOINTMENT OF OFFICERS ----------------------- The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 or 5.5 of these by-laws, shall be appointed by the Board of Direc tors, subject to the rights, if any, of an officer under any contract of employment. 5.3 SUBORDINATE OFFICERS -------------------- The Board of Directors may appoint, or empower the Chief Executive Officer of the corporation to appoint, such other officers and agents as the business of the corporation may require, -13- each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these by-laws or as the Board of Directors may from time to time determine. 5.4 REMOVAL AND RESIGNATION OF OFFICERS ----------------------------------- Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board of Directors at any regular or special meeting of the board or, except in the case of an officer chosen by the Board of Directors, by any officer upon whom such power of removal may be conferred by the Board of Directors. Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party. 5.5 VACANCIES IN OFFICES -------------------- Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors. 5.6 CHAIRMAN OF THE BOARD --------------------- The Chairman of the Board, if such an officer be elected and unless otherwise designated by the Board of Directors, shall, if present, preside at meetings of the Board of Directors. In addition, such officer shall exercise and perform such other powers and duties as may from time to time be assigned to him by the Board of Directors or as may be prescribed by these by-laws. If so designated by the Board of Directors, then the Chairman of the Board shall also be the Chief Executive Officer of the corporation and shall have the powers and duties prescribed in Section 5.7 of these by-laws. 5.7 PRESIDENT --------- Subject to such powers and duties, if any, as may be given by the Board of Directors to the Chairman of the Board or any vice chairman, if there be such an officer, the President shall be the Chief Executive Officer of the corporation and shall, subject to the control of the Board of Directors, have general supervision, direction, and control of the business and the officers of the corporation. The President shall preside at all meetings of the stockholders and, in the absence or nonexistence of a Chairman of the Board or if otherwise designated by the Board of Directors, at all meetings of the Board of Directors. The President shall have the general powers and duties of management usually vested in the office of president of a corporation and shall have such other powers and duties as may be prescribed by the Board of Directors or these by- laws. -14- 5.8 VICE PRESIDENTS --------------- In the absence or disability of the Chairman of the Board, any vice chairman and the President, the Vice Presidents, if any, in order of their rank as fixed by the Board of Directors or, if not ranked, a vice president designated by the board of directors, shall perform all the duties of the president and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors, these by-laws, the President or the Chairman of the Board. 5.9 SECRETARY --------- The Secretary shall keep or cause to be kept, at the principal executive office of the corporation or such other place as the Board of Directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show the time and place of each meeting, whether regular or special (and, if special, how authorized and the notice given), the names of those present at directors' meetings or committee meetings, the number of shares present or represented at stockholders' meetings, and the proceedings thereof. The Secretary shall keep, or cause to be kept, at the principal executive office of the corporation or at the office of the corporation's transfer agent or registrar, as determined by resolution of the Board of Directors, a share register, or a duplicate share register, showing the names of all stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates evidencing such shares, and the number and date of cancellation of every certificate surrendered for cancellation. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors required to be given by law or by these by-laws. The Secretary shall keep the seal of the corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by these by-laws. 5.10 CHIEF FINANCIAL OFFICER ----------------------- The Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director. The Chief Financial Officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board of Directors. The Chief Financial Officer shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the Chief Executive Officer and directors, whenever they request it, an account of all his or her transactions as Chief Financial Officer and of the financial condition of -15- the corporation, and shall have other powers and perform such other duties as may be prescribed by the Board of Directors or these by-laws. The Chief Financial Officer shall be the Treasurer of the corporation unless otherwise designated by the Board of Directors. 5.11 ASSISTANT SECRETARY ------------------- The Assistant Secretary, or, if there is more than one, the Assistant Secretaries in the order determined by the stockholders or Board of Directors (or if there be no such determination, then in the order of their election) shall, in the absence of the Secretary or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as may be prescribed by the Board of Directors or these by-laws. 5.12 ASSISTANT TREASURER ------------------- The Assistant Treasurer, or, if there is more than one, the Assistant Treasurers, in the order determined by the stockholders or Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Chief Financial Officer or in the event of his or her inability or refusal to act, perform the duties and exercise the powers of the Chief Financial Officer and shall perform such other duties and have such other powers as may be prescribed by the Board of Directors or these by-laws. 5.13 REPRESENTATION OF SHARES OF OTHER CORPORATIONS ---------------------------------------------- The Chairman of the Board, the President, any Vice President, the Chief Financial Officer, the Secretary or Assistant Secretary of this corporation, or any other person authorized by the Board of Directors or the President or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority. 5.14 AUTHORITY AND DUTIES OF OFFICERS -------------------------------- In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the Board of Directors or the stockholders. -16- ARTICLE VI INDEMNITY --------- 6.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS ----------------------------------------- The corporation shall, to the maximum extent and in the manner permitted by the General Corporation Law of Delaware, indemnify each of its directors and officers against expenses (including attorneys' fees), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.1, a "director" or "officer" of the corporation includes any person (i) who is or was a director or officer of the corporation, (ii) who is or was serving at the request of the corporation as a director or officer of another corporation partnership, joint venture, trust or other enterprise, or (iii) who was a director or officer of a corporation that was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation. 6.2 INDEMNIFICATION OF OTHERS ------------------------- The corporation shall have the power, to the extent and in the manner permitted by the General Corporation Law of Delaware, to indemnify each of its employees and agents (other than directors and officers) against expenses (including attorney's fees), judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.2, an "employee" or "agent" of the corporation (other than a director or officer) includes any person (i) who is or was an employee or agent of the corporation, (ii) who is or was serving at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (iii) who was an employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation. 6.3 INSURANCE --------- The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against such liability under the provisions of the General Corporation Law of Delaware. -17- ARTICLE VII RECORDS AND REPORTS ------------------- 7.1 MAINTENANCE AND INSPECTION OF RECORDS ------------------------------------- The corporation shall, either at its principal executive officer or at such place or places as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these by-laws as amended to date, accounting books, and other records. Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation's stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent so to act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in Delaware or at its principal place of business. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. 7.2 INSPECTION BY DIRECTORS ----------------------- Any director shall have the right to examine the corporation's stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the corpora tion to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper. -18- 7.3 ANNUAL STATEMENT TO STOCKHOLDERS -------------------------------- The Board of Directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the corporation. ARTICLE VII GENERAL MATTERS --------------- 8.1 CHECKS ------ From time to time, the Board of Directors shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evi dences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments. 8.2 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS ------------------------------------------------ The Board of Directors, except as otherwise provided in these by-laws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount. 8.3 STOCK CERTIFICATES; PARTLY PAID SHARES -------------------------------------- The shares of the corporation shall be represented by certificates, provided that the Board of Directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the Chairman or Vice-Chairman of the Board of Directors, or the President or Vice-President, and by the Chief Financial Officer or an assistant treasurer, or the Secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if the person were such officer, transfer agent or registrar at the date of issue. -19- The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, or upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon. 8.4 SPECIAL DESIGNATION ON CERTIFICATES ----------------------------------- If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. 8.5 LOST CERTIFICATES ----------------- Except as provided in this Section 8.5, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and canceled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or the owner's legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares. 8.6 CONSTRUCTION; DEFINITIONS ------------------------- Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the Delaware General Corporation Law shall govern the construction of these by-laws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term "person" includes both a corporation and a natural person. -20- 8.7 DIVIDENDS --------- The directors of the corporation, subject to any restrictions contained in (i) the General Corporation Law of Delaware or (ii) the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the corporation's capital stock. The directors of the corporation may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the corporation, and meeting contingencies. 8.8 FISCAL YEAR ----------- The fiscal year of the corporation shall be fixed by resolution of the Board of Directors and may be changed by the Board of Directors. 8.9 SEAL ---- The corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board of Directors, and may use the same by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. 8.10 TRANSFER OF STOCK ----------------- Upon surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books. 8.11 STOCK TRANSFER AGREEMENTS ------------------------- The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the General Corporation Law of Delaware. 8.12 REGISTERED STOCKHOLDERS ----------------------- The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on -21- the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE IX AMENDMENTS ---------- Subject to any voting requirements set forth in the corporation's certificate of incorporation, the by-laws of the corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal by-laws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal by-laws. -22- CERTIFICATE OF ADOPTION OF AMENDED AND RESTATED BY-LAWS OF SPLASH TECHNOLOGY HOLDINGS, INC. Certificate by Secretary of Adoption ------------------------------------ The undersigned hereby certifies that he is the duly elected, qualified, and acting Assistant Secretary of Splash Technology Holdings, Inc. and that the foregoing Amended and Restated By-Laws, comprising ___________________ (___) pages, were ratified as the By-Laws of the corporation by the unanimous written consent of the Board of Directors effective as of ________________________, 1996. IN WITNESS WHEREOF, the undersigned has executed this Certificate of Adoption of Amended and Restated By-laws on _________________________, 1996. By: ___________________________________ Brett D. Byers Assistant Secretary EX-3.5 5 AMENDED & RESTATED CERTIFICATE OF INCORP EXHIBIT 3.5 AMENDED AND RESTATED -------------------- CERTIFICATE OF INCORPORATION OF SPLASH TECHNOLOGY HOLDINGS, INC. A DELAWARE CORPORATION ---------------------- Splash Technology Holdings, Inc., a corporation organized and existing under the laws of the State of Delaware, does hereby certify: 1. The name of the corporation is Splash Technology Holdings, Inc., (the "Corporation"). The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on December 20, 1995. 2. The restatement herein set forth has been duly approved by the Board of Directors of the Corporation and by the stockholders of the Corporation pursuant to Section 242 of the General Corporation Law of the State of Delaware ("Delaware Law"). 3. The restatement herein set forth has been duly adopted pursuant to Section 245 of the Delaware Law. This Amended and Restated Certificate of Incorporation restates and integrates and amends the provisions of the Corporation's Certificate of Incorporation. 4. The text of the Certificate of Incorporation is hereby amended and restated to read in its entirety as follows: ARTICLE ONE ----------- The name of this corporation is Splash Technology Holdings, Inc. (the "Corporation"). ARTICLE TWO ----------- The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE THREE ------------- The Corporation shall have perpetual existence. The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. ARTICLE FOUR ------------ This Corporation is authorized to issue two classes of shares to be designated respectively Preferred Stock and Common Stock. The total number of shares of Common Stock this Corporation shall have the authority to issue is 50,000,000 shares, and shall have a par value of $0.001 per share ("COMMON"), and the total number of shares of Preferred Stock this corporation shall have authority to issue is 5,000,000, and shall have a par value of $0.001 per share and shall be undesignated as to series ("PREFERRED"). Any Preferred Stock not previously designated as to series may be issued from time to time in one or more series pursuant to a resolution or resolutions providing for such issue duly adopted by the Board of Directors (authority to do so being hereby expressly vested in the Board), and such resolution or resolutions shall also set forth the voting powers, full or limited or none, of each such series of Preferred Stock and shall fix the designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions of each such series of Preferred Stock. The Board of Directors is authorized to alter the designation, rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock and, within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series of Preferred Stock, to increase or decrease (but not below the number of shares of any such series then outstanding) the number of shares of any such series subsequent to the issue of shares of that series. Each share of Preferred Stock issued by the Corporation, if reacquired by the Corporation (whether by redemption, repurchase, conversion to Common Stock or other means), shall upon such reacquisition resume the status of authorized and unissued shares of Preferred Stock, undesignated as to series and available for designation and issuance by the Corporation in accordance with the immediately preceding paragraph. The Corporation shall from time to time in accordance with the laws of the State of Delaware increase the authorized amount of its Common Stock if at any time the number of shares of Common Stock remaining unissued and available for issuance shall not be sufficient to permit conversion of the Preferred Stock. -2- ARTICLE FIVE ------------ The Corporation is to have perpetual existence. ARTICLE SIX ----------- Elections of directors need not be by written ballot unless a stockholder demands election by written ballot at the meeting and before voting begins or unless the Bylaws of the Corporation shall so provide. ARTICLE SEVEN ------------- The number of directors which constitute the whole Board of Directors of the Corporation shall be fixed exclusively by one or more resolution adopted from time to time by the Board of Directors. The Board of Directors shall be divided into three classes designated as Class I, Class II, and Class III, respectively. Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the Board of Directors. At the first annual meeting of stockholders following the date hereof, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following the date hereof, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following the date hereof, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting. ARTICLE EIGHT ------------- In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter, amend or repeal the Bylaws of the Corporation. ARTICLE NINE ------------ (a) To the fullest extent permitted by the Delaware General Corporation Law as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. -3- (b) The Corporation may indemnify to the fullest extent permitted by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, admini strative or investigative, by reason of the fact that he, his testator or intestate is or was a director, officer, employee or agent of the Corporation or any predecessor of the Corporation or serves or served at any other enterprise as a director, officer, employee or agent at the request of the Corporation or any predecessor to the Corporation. (c) Neither any amendment nor repeal of this Article Ten, nor the adoption of any provision of this Corporation's Certificate of Incorporation inconsistent with this Article Ten, shall eliminate or reduce the effect of this Article Ten, in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this Article Ten, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision. ARTICLE TEN ----------- Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. No action may be taken by the stockholders of the Corporation without a meeting, and no consents in lieu of a meeting may be taken pursuant to Section 228 of the Delaware Law. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside of the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation. ARTICLE ELEVEN -------------- Vacancies created by newly created directorships, created in accordance with the Bylaws of this Corporation, may be filled by the vote of a majority, although less than a quorum, of the directors then in office, or by a sole remaining director. ARTICLE TWELVE -------------- Advance notice of new business and stockholder nominations for the election of directors shall be given in the manner and to the extent provided in the Bylaws of the Corporation. ARTICLE THIRTEEN ---------------- The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation." -4- IN WITNESS WHEREOF, Splash Technology Holdings, Inc. has caused this Certificate of Restated and Amended of Certificate of Incorporation to be signed by Kevin K. Macgillivray, its President and Chief Executive Officer and attested to by Brett D. Byers, its Assistant Secretary, on __________ ___, 1996. SPLASH TECHNOLOGY HOLDINGS, INC. A Delaware Corporation By:_________________________________________ Kevin K. Macgillivray President and Chief Executive Officer ATTEST: By:_________________________________ Brett D. Byers Assistant Secretary -5- EX-10.2 6 1996 STOCK OPTION PLAN EXHIBIT 10.2 SPLASH TECHNOLOGY HOLDINGS, INC. 1996 STOCK OPTION PLAN (AMENDED AS OF ___________, 1996) 1. Purposes of the Plan. The purposes of this Stock Option Plan are to -------------------- attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees and Consultants of the Company and its Subsidiaries and to promote the success of the Company's business. Options granted under the Plan may be incentive stock options (as defined under Section 422 of the Code) or nonstatutory stock options, as determined by the Administrator at the time of grant of an option and subject to the applicable provisions of Section 422 of the Code, as amended, and the regulations promulgated thereunder. 2. Definitions. As used herein, the following definitions shall apply: ----------- (a) "Administrator" means the Board or any of its Committees ------------- appointed pursuant to Section 4 of the Plan. (b) "Applicable Laws" means the requirements relating to the --------------- administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Options are, or will be, granted under the Plan. (c) "Board" means the Board of Directors of the Company. ----- (d) "Code" means the Internal Revenue Code of 1986, as amended. ---- (e) "Committee" means a Committee appointed by the Board of --------- Directors in accordance with Section 4 of the Plan. (f) "Common Stock" means the Common Stock of the Company. ------------ (g) "Company" means Splash Technology Holdings, Inc., a Delaware ------- corporation. (h) "Consultant" means any person who is engaged by the Company or ---------- any Parent or Subsidiary to render consulting or advisory services and is compensated for such services, and any director of the Company whether compensated for such services or not. (i) "Continuous Status as an Employee or Consultant" means that ---------------------------------------------- the employment or consulting relationship with the Company, any Parent, or Subsidiary, is not interrupted or terminated. Continuous Status as an Employee or Consultant shall not be considered interrupted in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. A leave of absence approved by the Company shall include sick leave, military leave, or any other personal leave approved by an authorized representative of the Company. For purposes of Incentive Stock Options, no such leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed by statute or contract, including Company policies. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 181st day of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. (j) "Employee" means any person, including Officers and directors, -------- employed by the Company or any Parent or Subsidiary of the Company. The payment of a director's fee by the Company shall not be sufficient to constitute "employment" by the Company. (k) "Exchange Act" means the Securities Exchange Act of 1934, as ------------ amended. (l) "Fair Market Value" means, as of any date, the value of Common ----------------- Stock determined as follows: (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, or; (iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator. (m) "Incentive Stock Option" means an Option intended to qualify ---------------------- as an incentive stock option within the meaning of Section 422 of the Code. (n) "Nonstatutory Stock Option" means an Option not intended to ------------------------- qualify as an Incentive Stock Option. (o) "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. (p) "Option" means a stock option granted pursuant to the Plan. ------ -2- (q) "Optioned Stock" means the Common Stock subject to an Option. -------------- (r) "Optionee" means an Employee or Consultant who receives an -------- Option. (s) "Parent" means a "parent corporation", whether now or ------ hereafter existing, as defined in Section 424(e) of the Code. (t) "Plan" means this 1996 Stock Option Plan. ---- (u) "Section 16(b)" means Section 16(b) of the Securities Exchange ------------- Act of 1934, as amended. (v) "Share" means a share of the Common Stock, as adjusted in ----- accordance with Section 11 below. (w) "Subsidiary" means a "subsidiary corporation", whether now or ---------- hereafter existing, as defined in Section 424(f) of the Code. 3. Stock Subject to the Plan. Subject to the provisions of Section 11 ------------------------- of the Plan, the maximum aggregate number of Shares which may be optioned and sold under the Plan is 900,000 Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. If an Option expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an option exchange program, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided, -------- however, that Shares that have actually been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if unvested Shares are repurchased by the Company at their original purchase price, and the original purchaser of such Shares did not receive any benefits of ownership of such Shares, such Shares shall become available for future grant under the Plan. For purposes of the preceding sentence, voting rights shall not be considered a benefit of Share ownership. 4. Administration of the Plan. -------------------------- (a) Procedure. --------- (i) Multiple Administrative Bodies. The Plan may be ------------------------------ administered by different Committees with respect to different groups of Service Providers. (ii) Section 162(m). To the extent that the Administrator -------------- determines it to be desirable to qualify Options granted hereunder as "performance-based compensation" within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more "outside directors" within the meaning of Section 162(m) of the Code. -3- (iii) Rule 16b-3. To the extent desirable to qualify ---------- transactions hereunder as exempt under Rule 16b-3, the Plan shall be administered by the Board or a Committee of two or more "non-employee directors" within the meaning of Rule 16b-3. (iv) Other Administration. Other than as provided above, the -------------------- Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable Laws. (b) Powers of the Administrator. Subject to the provisions of the --------------------------- Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, including the approval, if required, of any stock exchange upon which the Common Stock is listed, the Administrator shall have the authority, in its discretion: (i) to determine the Fair Market Value of the Common Stock; (ii) to select the Consultants and Employees to whom Options may from time to time be granted hereunder; (iii) to determine whether and to what extent Options are granted hereunder; (iv) to determine the number of shares of Common Stock to be covered by each such award granted hereunder; (v) to approve forms of agreement for use under the Plan; (vi) to determine the terms and conditions of any award granted hereunder; (vii) to determine whether and under what circumstances an Option may be settled in cash under subsection 9(e) instead of Common Stock; (viii) to reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option has declined since the date the Option was granted; and (ix) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan. (c) Effect of Administrator's Decision. All decisions, ---------------------------------- determinations and interpretations of the Administrator shall be final and binding on all Optionees and any other holders of any Options. -4- 5. Eligibility. ----------- (a) Nonstatutory Stock Options may be granted to Employees and Consultants. Incentive Stock Options may be granted only to Employees. An Employee or Consultant who has been granted an Option may, if otherwise eligible, be granted additional Options. (b) Each Option shall be designated in the written option agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. (c) The Plan shall not confer upon any Optionee any right with respect to continuation of employment or consulting relationship with the Company, nor shall it interfere in any way with his or her right or the Company's right to terminate his or her employment or consulting relationship at any time, with or without cause. (d) Upon the Company or a successor corporation being subject to Section 162(m) of the Code or upon the Plan being assumed by a corporation which is subject to Section 162(m) of the Code, the following limitations shall apply to grants of Options to Employees: (i) No Employee shall be granted, in any fiscal year of the Company, Options to purchase more than 100,000 Shares. (ii) In connection with his or her initial employment, an Employee may be granted Options to purchase up to an additional 100,000 Shares which shall not count against the limit set forth in subsection (i) above. (iii) The foregoing limitations shall be adjusted proportionately in connection with any change in the Company's capitalization as described in Section 11. (iv) If an Option is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 11), the cancelled Option will be counted against the limit set forth in subsection (i) above. For this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the Option and the grant of a new Option. 6. Term of Plan. The Plan shall become effective upon the earlier to ------------ occur of its adoption by the Board of Directors or its approval by the shareholders of the Company, as described -5- in Section 17 of the Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 13 of the Plan. 7. Term of Option. The term of each Option shall be the term stated in -------------- the Option Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement. 8. Option Exercise Price and Consideration. --------------------------------------- The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following: (i) In the case of an Incentive Stock Option (A) granted to an Employee who, at the time of the grant of such Incentive Stock Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. (B) granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. (ii) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be determined by the Administrator. In the case of a Nonstatutory Stock Option intended to qualify as "performance-based compensation" within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. (iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a merger or other corporate transaction. (b) Waiting Period and Exercise Dates. At the time an Option is --------------------------------- granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions which must be satisfied before the Option may be exercised. -6- (c) The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (1) cash, (2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares acquired upon exercise of an Option have been owned by the Optionee for more than six months on the date of surrender and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, (5) delivery of a properly executed exercise notice together with such other documentation as the Administrator and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the exercise price, or (6) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company. 9. Exercise of Option. ------------------ (a) Procedure for Exercise; Rights as a Shareholder. Any Option ----------------------------------------------- granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, including performance criteria with respect to the Company and/or the Optionee, and as shall be permissible under the terms of the Plan. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. An Option may not be exercised for a fraction of a Share. An Option shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and full payment for the Shares with respect to which the Option is exercised has been received by the Company. Full payment may, as authorized by the Administrator, consist of any consideration and method of payment allowable under Section 8(c) of the Plan. Until the issuance of Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly upon exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 11 of the Plan. Exercise of an Option in any manner shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. (b) Termination of Employment or Consulting Relationship. In the ---------------------------------------------------- event of termination of an Optionee's Continuous Status as an Employee or Consultant with the Company (but -7- not in the event of an Optionee's change of status from Employee to Consultant (in which case an Employee's Incentive Stock Option shall automatically convert to a Nonstatutory Stock Option on the date three (3) months and one day from the date of such change of status) or from Consultant to Employee), such Optionee may, but only within such period of time as is determined by the Administrator, with such determination in the case of an Incentive Stock Option not exceeding three (3) months after the date of such termination (but in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise his or her Option to the extent that Optionee was entitled to exercise it at the date of such termination. To the extent that Optionee was not entitled to exercise the Option at the date of such termination, or if Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate. (c) Disability of Optionee. In the event of termination of an ---------------------- Optionee's consulting relationship or Continuous Status as an Employee as a result of his or her disability (as defined in Section 22(e)(3) of the Code), Optionee may, but only within twelve (12) months from the date of such termination (and in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise the Option to the extent otherwise entitled to exercise it at the date of such termination. To the extent that Optionee is not entitled to exercise the Option at the date of termination, or if Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. (d) Death of Optionee. In the event of the death of an Optionee, ----------------- the Option may be exercised at any time within twelve (12) months following the date of death (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee's estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent that the Optionee was entitled to exercise the Option at the date of death. If, at the time of death, the Optionee was not entitled to exercise his or her entire Option, the Shares covered by the unexercisable portion of the Option shall immediately revert to the Plan. If, after death, the Optionee's estate or a person who acquired the right to exercise the Option by bequest or inheritance does not exercise the Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. (e) Buyout Provisions. The Administrator may at any time offer ----------------- to buy out for a payment in cash or Shares, an Option previously granted, based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 10. Non-Transferability of Options. Unless otherwise provided for by the ------------------------------ Administrator in the stock option agreement, Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. -8- 11. Adjustments Upon Changes in Capitalization or Merger. ---------------------------------------------------- (a) Changes in Capitalization. Subject to any required action by ------------------------- the shareholders of the Company, the number of shares of Common Stock covered by each outstanding Option, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option, as well as the price per share of Common Stock covered by each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option. (b) Dissolution or Liquidation. In the event of the proposed -------------------------- dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option until ten (10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon exercise of an Option shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option will terminate immediately prior to the consummation of such proposed action. (c) Merger or Asset Sale. In the event of a merger of the -------------------- Company with or into another corporation, or the sale of substantially all of the assets of the Company, each outstanding Option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Option, the Optionee shall fully vest in and have the right to exercise the Option as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Optionee in writing or electronically that the Option shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option shall be considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration -9- (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the Option, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets. 12. Time of Granting Options. The date of grant of an Option shall, for ------------------------ all purposes, be the date on which the Administrator makes the determination granting such Option, or such other date as is determined by the Board. Notice of the determination shall be given to each Employee or Consultant to whom an Option is so granted within a reasonable time after the date of such grant. 13. Amendment and Termination of the Plan. ------------------------------------- (a) Amendment and Termination. The Board may at any time amend, ------------------------- alter, suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation shall be made which would impair the rights of any Optionee under any grant theretofore made, without his or her consent. In addition, to the extent necessary and desirable to comply with Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required. (b) Effect of Amendment or Termination. Any such amendment or ---------------------------------- termination of the Plan shall not affect Options already granted, and such Options shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. 14. Conditions Upon Issuance of Shares. Shares shall not be issued ---------------------------------- pursuant to the exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with Applicable Laws, and shall be further subject to the approval of counsel for the Company with respect to such compliance. As a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned relevant provisions of law. -10- 15. Reservation of Shares. The Company, during the term of this Plan, --------------------- will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 16. Agreements. Options shall be evidenced by written agreements in such ---------- form as the Administrator shall approve from time to time. 17. Shareholder Approval. Continuance of the Plan shall be subject to -------------------- approval by the shareholders of the Company within twelve (12) months before or after the date the Plan is adopted. Such shareholder approval shall be obtained in the degree and manner required under applicable state and federal law and the rules of any stock exchange upon which the Common Stock is listed. -11- SPLASH TECHNOLOGY HOLDINGS, INC. 1996 STOCK OPTION PLAN STOCK OPTION AGREEMENT -- EARLY EXERCISE Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Stock Option Agreement. I. NOTICE OF STOCK OPTION GRANT ---------------------------- 1 Address: - -------------------------------------- - -------------------------------------- You have been granted an option to purchase Common Stock of the Company, subject to the terms and conditions of the Plan and this Stock Option Agreement, as follows: Date of Grant 2 Vesting Commencement Date 3 Exercise Price per Share $0.50 Total Number of Shares Granted 4 Total Exercise Price $5 Type of Option: X Incentive Stock Option ----- Nonstatutory Stock Option Term/Expiration Date: 10 years/2/21/2006 Exercise and Vesting Schedule: ----------------------------- This Option is exercisable immediately, in whole or in part, conditioned upon Optionee entering into a Restricted Stock Purchase Agreement with respect to any unvested Option Shares. The Shares subject to this Option shall vest and/or be released from the Company's repurchase option, as set forth in the Restricted Stock Purchase Agreement, according to the following schedule: 25% of the Shares subject to the Option shall vest twelve months after the Vesting Commencement Date and the balance of the Shares subject to the Option vesting ratably at the end of each monthly period thereafter over a period of thirty-six months. Termination Period: ------------------ This Option may be exercised, to the extent vested, for three months after termination of Optionee's employment or consulting relationship, or such longer period as may be applicable upon death or disability of Optionee as provided in the Plan, but in no event later than the Term/Expiration Date as provided above. II. AGREEMENT --------- 1. Grant of Option. Splash Technology Holdings, Inc. (the "Company"), --------------- hereby grants to the Optionee named in the Notice of Grant (the "Optionee"), an option (the "Option") to purchase the total number of shares of Common Stock (the "Shares") set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the "Exercise Price") subject to the terms, definitions and provisions of the 1996 Stock Option Plan (the "Plan") adopted by the Company, which is incorporated herein by reference. If designated in the Notice of Grant as an Incentive Stock Option ("ISO"), this Option is intended to qualify as an ISO as defined in Section 422 of the Code. However, if this Option is intended to be an ISO, to the extent that it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option ("NSO"). 2. Exercise of Option. This Option shall be exercisable during its term ------------------ in accordance with the provisions of Section 9 of the Plan as follows: (i) Right to Exercise. ----------------- (a) Subject to subsections 2(i)(b) through 2(i)(e) below, this Option shall be exercisable cumulatively according to the vesting schedule set out in the Notice of Grant. Alternatively, at the election of the Optionee, this option may be exercised in whole or in part at any time as to Shares which have not yet vested. For purposes of this Stock Option Agreement, Shares subject to Option shall vest based on continued employment of Optionee with the Company. Vested Shares shall not be subject to the Company's repurchase right (as set forth in the Restricted Stock Purchase Agreement, attached hereto as Exhibit C- 1). (b) As a condition to exercising this Option for unvested Shares, the Optionee shall execute the Restricted Stock Purchase Agreement. (c) This Option may not be exercised for a fraction of a Share. -2- (d) In the event of Optionee's death, disability or other termination of the employment or consulting relationship, the exercisability of the Option is governed by Sections 6, 7 and 8 below, subject to the limitation contained in subsection 2(i)(e). (e) In no event may this Option be exercised after the date of expiration of the term of this Option as set forth in the Notice of Grant. (ii) Method of Exercise. This Option shall be exercisable by written ------------------ notice (in the form attached as Exhibit A) which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements with respect to such shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by the Optionee and, together with an executed copy of the Restricted Stock Purchase Agreement, if applicable, shall be delivered in person or by certified mail to the Secretary of the Company. The written notice and Restricted Stock Purchase Agreement shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised upon receipt by the Company of such written notice and Restricted Stock Purchase Agreement accompanied by the Exercise Price. No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares. 3. Optionee's Representations. In the event the Shares purchasable -------------------------- pursuant to the exercise of this Option have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her Investment Representation Statement in the form attached hereto as Exhibit B, and shall read the applicable rules of the Commissioner of Corporations attached to such Investment Representation Statement. 4. Lock-Up Period. Optionee hereby agrees that if so requested by the -------------- Company or any representative of the underwriters (the "Managing Underwriter") in connection with any registration of the offering of any securities of the Company under the Securities Act, Optionee shall not sell or otherwise transfer any Shares or other securities of the Company during the 180-day period (or such longer period as may be requested in writing by the Managing Underwriter and agreed to in writing by the Company) (the "Market Standoff Period") following the effective date of a registration statement of the Company filed under the Securities Act; provided, however, that such restriction shall apply only to the first registration statement of the Company to become effective under the Securities Act that includes securities to be sold on behalf of the Company to the public in an underwritten public offering under the Securities Act. The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restrictions until the end of such Market Standoff Period. -3- 5. Method of Payment. Payment of the Exercise Price shall be by any of ----------------- the following, or a combination thereof, at the election of the Optionee: (i) cash; or (ii) check; or (iii) surrender of other shares of Common Stock of the Company which (A) in the case of Shares acquired pursuant to the exercise of a Company option, have been owned by the Optionee for more than six (6) months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being exercised; or (iv) to the extent permitted by the Administrator, delivery of a properly executed exercise notice together with such other documentation as the Administrator and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the Exercise Price. 6. Restrictions on Exercise. This Option may not be exercised until such ------------------------ time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, including any rule under Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation. 7. Termination of Relationship. In the event an Optionee's Continuous --------------------------- Status as an Employee or Consultant terminates, Optionee may, to the extent the Option was vested at the date of such termination (the "Termination Date"), exercise this Option during the Termination Period set out in the Notice of Grant. To the extent that Optionee was not vested in this Option at the date of such termination, or if Optionee does not exercise this Option within the time specified herein, the Option shall terminate. 8. Disability of Optionee. Notwithstanding the provisions of Section 6 ---------------------- above, in the event of termination of an Optionee's consulting relationship or Continuous Status as an Employee as a result of his or her disability, Optionee may, but only within twelve (12) months from the date of such termination (and in no event later than the expiration date of the term of such Option as set forth in the Stock Option Agreement), exercise the Option to the extent the Option was vested at the date of such termination; provided, however, that if such disability is not a "disability" as such term is defined in Section 22(e)(3) of the Code, in the case of an ISO such ISO shall cease to be treated as an ISO and shall be treated for tax purposes as an NSO on the ninety-first (91st) day following such termination. To the extent that Optionee is not vested in the Option at the date of termination, or if -4- Optionee does not exercise such Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 9. Death of Optionee. In the event of termination of Optionee's ----------------- Continuous Status as an Employee or Consultant as a result of the death of Optionee, the Option may be exercised at any time within twelve (12) months following the date of death (but in no event later than the date of expiration of the term of this Option as set forth in Section 10 below), by Optionee's estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent the Option was vested at the date of death. To the extent that Optionee is not vested in the Option at the date of death, or if the Option is not exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 10. Non-Transferability of Option. This Option may not be transferred in ----------------------------- any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 11. Term of Option. This Option may be exercised only within the term set -------------- out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option. The limitations set out in Section 7 of the Plan regarding Options designated as ISOs and Options granted to more than ten percent (10%) stockholders shall apply to this Option. 12. Tax Consequences. Set forth below is a brief summary as of the date ---------------- of this Option of some of the federal and state tax consequences of exercise of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. (i) Exercise of ISO. If this Option qualifies as an ISO, there will --------------- be no regular federal income tax liability or state income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum tax for federal tax purposes and may subject the Optionee to the alternative minimum tax in the year of exercise. (ii) Exercise of ISO Following Disability. If the Optionee's ------------------------------------ Continuous Status as an Employee or Consultant terminates as a result of disability that is not total and permanent disability as defined in Section 22(e)(3) of the Code, to the extent permitted on the date of termination, the Optionee must exercise an ISO within 90 days of such termination for the ISO to be qualified as an ISO. (iii) Exercise of NSO. There may be a regular federal income tax --------------- liability and state income tax liability upon the exercise of an NSO. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair -5- Market Value of the Shares on the date of exercise over the Exercise Price. If Optionee is an Employee, the Company will be required to withhold from Optionee's compensation or collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. If the Optionee is subject to Section 16 of the Securities Act of 1934, as amended, the date of income recognition may be deferred for up to six months. (iv) Disposition of Shares. In the case of an NSO, if Shares are --------------------- held for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal and state income tax purposes. In the case of an ISO, if Shares transferred pursuant to the Option are held for at least one year after exercise and are disposed of at least two years after the Date of Grant, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal and state income tax purposes. If Shares purchased under an ISO are disposed of within such one-year period or within two years after the Date of Grant, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (1) the Fair Market Value of the Shares on the date of exercise, or (2) the sale price of the Shares. (v) Notice of Disqualifying Disposition of ISO Shares. If the ------------------------------------------------- Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the Date of Grant, or (2) the date one year after the date of exercise, the Optionee shall immediately notify the Company in writing of such disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Company on the compensation income recognized by the Optionee. (vi) Section 83(b) Election for Unvested Shares Purchased Pursuant to ---------------------------------------------------------------- Nonqualified Stock Options. With respect to the exercise of a nonqualified - -------------------------- stock option for unvested Shares, an election may be filed by the Optionee with the Internal Revenue Service and, if necessary, the proper state taxing authorities, within 30 days of the purchase of the Shares, electing pursuant to -------------- Section 83(b) of the Code (and similar state tax provisions if applicable) to be taxed currently on any difference between the purchase price of the Shares and their Fair Market Value on the date of purchase. This will result in a recognition of taxable income to the Optionee on the date of exercise, measured by the excess, if any, of the fair market value of the Shares, at the time the Option is exercised over the purchase price for the Shares. Absent such an election, taxable income will be measured and recognized by Optionee at the time or times on which the Company's Repurchase Option lapses. Optionee is strongly encouraged to seek the advice of his or her own tax consultants in connection with the purchase of the Shares and the advisability of filing of the Election under Section 83(b) and similar tax provisions. A form of Election under Section 83(b) is attached hereto as Exhibit C-5 for reference. (vii) Section 83(b) Election for Unvested Shares Purchased Pursuant ------------------------------------------------------------- to Incentive Stock Options. With respect to the exercise of an incentive stock - -------------------------- option for unvested Shares, an election may be filed by the Optionee with the Internal Revenue Service and, if necessary, the proper state taxing authorities, within 30 days of the purchase of the Shares, electing -------------- pursuant to Section 83(b) of the Code (and similar state tax provisions if applicable) to be taxed currently on any difference between the purchase price of the Shares and their Fair Market Value on the date of purchase for alternative minimum tax purposes. This will result in a recognition of income to the Optionee on the date of exercise, for alternative minimum tax purposes, measured by the excess, if any, of the fair market value of the Shares, at the time the option is exercised, over the purchase price for the Shares. Absent such an election, alternative minimum taxable income will be measured and recognized by Optionee at the time or times on which the Company's Repurchase Option lapses. Optionee is strongly encouraged to seek the advice of his or her tax consultants in connection with the purchase of the Shares and the advisability of filing of the Election under Section 83(b) and similar tax provisions. A form of Election under Section 83(b) for alternative minimum tax purposes is attached hereto as Exhibit C-6 for reference. OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF OPTIONEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON OPTIONEE'S BEHALF. Splash Technology Holdings, Inc. By: ________________________________ OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE. Optionee acknowledges receipt of a copy of the Plan and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below. Dated: _____________________ _____________________________________ Optionee Residence Address: _____________________________________ _____________________________________ _____________________________________ EXHIBIT A --------- 1996 STOCK OPTION PLAN EXERCISE NOTICE Splash Technology Holdings, Inc. 555 Del Rey Avenue Sunnyvale, California 94086 1. Exercise of Option. Effective as of today, ___________, 19__, the ------------------ undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase _________ shares of the Common Stock (the "Shares") of Splash Technology Holdings, Inc. (the "Company") under and pursuant to the 1996 Stock Option Plan, as amended (the "Plan") and the [ ] Incentive [ ] Nonstatutory Stock Option Agreement dated ________, 19___ (the "Option Agreement"). 2. Representations of Optionee. Optionee acknowledges that Optionee has --------------------------- received, read and understood the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 3. Rights as Stockholder. Until the stock certificate evidencing such --------------------- Shares is issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 11 of the Plan. Optionee shall enjoy rights as a stockholder until such time as Optionee disposes of the Shares or the Company and/or its assignee(s) exercises the Right of First Refusal hereunder. Upon such exercise, Optionee shall have no further rights as a holder of the Shares so purchased except the right to receive payment for the Shares so purchased in accordance with the provisions of this Agreement, and Optionee shall forthwith cause the certificate(s) evidencing the Shares so purchased to be surrendered to the Company for transfer or cancellation. 4. Company's Right of First Refusal. Before any Shares held by Optionee -------------------------------- or any transferee (either being sometimes referred to herein as the "Holder") may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section (the "Right of First Refusal"). (a) Notice of Proposed Transfer. The Holder of the Shares shall --------------------------- deliver to the Company a written notice (the "Notice") stating: (i) the Holder's bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee ("Proposed Transferee"); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the bona fide cash price or other consideration for which the Holder proposes to transfer the Shares (the "Offered Price"), and the Holder shall offer the Shares at the Offered Price to the Company or its assignee(s). (b) Exercise of Right of First Refusal. At any time within thirty ---------------------------------- (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (c) below. (c) Purchase Price. The purchase price ("Purchase Price") for the -------------- Shares purchased by the Company or its assignee(s) under this Section shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith. (d) Payment. Payment of the Purchase Price shall be made, at the ------- option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness of the Holder to the Company (or, in the case of repurchase by an assignee, to the assignee), or by any combination thereof within 30 days after receipt of the Notice or in the manner and at the times set forth in the Notice. (e) Holder's Right to Transfer. If all of the Shares proposed in the -------------------------- Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within 120 days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred. (f) Exception for Certain Family Transfers. Anything to the contrary -------------------------------------- contained in this Section notwithstanding, the transfer of any or all of the Shares during the Optionee's lifetime or on the Optionee's death by will or intestacy to the Optionee's immediate family or a trust for the benefit of the Optionee's immediate family shall be exempt from the provisions of this Section. "Immediate Family" as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section. (g) Termination of Right of First Refusal. The Right of First Refusal ------------------------------------- shall terminate as to any Shares 90 days after the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended. 5. Tax Consultation. Optionee understands that Optionee may suffer ---------------- adverse tax consequences as a result of Optionee's purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultants Optionee deems advisable in connection with the purchase or disposition of the Shares and that Optionee is not relying on the Company for any tax advice. 6. Restrictive Legends and Stop-Transfer Orders. -------------------------------------------- (a) Legends. Optionee understands and agrees that the Company shall ------- cause the legends set forth below or legends substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Shares together with any other legends that may be required by state or federal securities laws: THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH. THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES. IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES. Optionee understands that transfer of the Shares may be restricted by Section 260.141.11 of the Rules of the California Corporations Commissioner, a copy of which is attached to Exhibit B, the Investment Representation Statement. (b) Stop-Transfer Notices. Optionee agrees that, in order to ensure --------------------- compliance with the restrictions referred to herein, the Company may issue appropriate "stop transfer" instruc tions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. (c) Refusal to Transfer. The Company shall not be required (i) to ------------------- transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred. 7. Successors and Assigns. The Company may assign any of its rights ---------------------- under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Optionee and his or her heirs, executors, administrators, successors and assigns. 8. Interpretation. Any dispute regarding the interpretation of this -------------- Agreement shall be submitted by Optionee or by the Company forthwith to the Company's Board of Directors or the committee thereof that administers the Plan, which shall review such dispute at its next regular meeting. The resolution of such a dispute by the Board or committee shall be final and binding on the Company and on Optionee. 9. Governing Law; Severability. This Agreement shall be governed by and --------------------------- construed in accordance with the laws of the State of California excluding that body of law pertaining to conflicts of law. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable. 10. Notices. Any notice required or permitted hereunder shall be given in ------- writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States mail by certified mail, with postage and fees prepaid, addressed to the other party at its address as shown below beneath its signature, or to such other address as such party may designate in writing from time to time to the other party. 11. Further Instruments. The parties agree to execute such further ------------------- instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement. 12. Delivery of Payment. Optionee herewith delivers to the Company the ------------------- full Exercise Price for the Shares. 13. Entire Agreement. The Plan and Notice of Grant/Option Agreement are ---------------- incorporated herein by reference. This Agreement, the Plan, the Option Agreement, the Restricted Stock Purchase Agreement, and the Investment Representation Statement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof. Submitted by: Accepted by: OPTIONEE: SPLASH TECHNOLOGY HOLDINGS, INC. By: _______________________________ Its: ______________________________ __________________________________ (Signature) Address: - ------- __________________________________ __________________________________ EXHIBIT B --------- INVESTMENT REPRESENTATION STATEMENT OPTIONEE : COMPANY : SPLASH TECHNOLOGY HOLDINGS, INC. SECURITY : COMMON STOCK AMOUNT : DATE : In connection with the purchase of the above-listed Securities, the undersigned Optionee represents to the Company the following: (a) Optionee is aware of the Company's business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. Optionee is acquiring these Securities for investment for Optionee's own account only and not with a view to, or for resale in connection with, any "distribution" thereof within the meaning of the Securities Act of 1933, as amended (the "Securities Act"). (b) Optionee acknowledges and understands that the Securities constitute "restricted securities" under the Securities Act and have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Optionee's investment intent as expressed herein. In this connection, Optionee understands that, in the view of the Securities and Exchange Commission, the statutory basis for such exemption may be unavailable if Optionee's representation was predicated solely upon a present intention to hold these Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one year or any other fixed period in the future. Optionee further understands that the Securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Optionee further acknowledges and understands that the Company is under no obligation to register the Securities. Optionee understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company, a legend prohibiting their transfer without the consent of the Commissioner of Corporations of the State of California and any other legend required under applicable state securities laws. (c) Optionee is familiar with the provisions of Rule 701 and Rule 144, each promulgated under the Securities Act, which, in substance, permit limited public resale of "restricted securities" acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of the grant of the Option to the Optionee, the exercise will be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer period as any market stand-off agreement may require) the Securities exempt under Rule 701 may be resold, subject to the satisfaction of certain of the conditions specified by Rule 144, including: (1) the resale being made through a broker in an unsolicited "broker's transaction" or in transactions directly with a market maker (as said term is defined under the Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the availability of certain public information about the Company, (3) the amount of Securities being sold during any three month period not exceeding the limitations specified in Rule 144(e), and (4) the timely filing of a Form 144, if applicable. In the event that the Company does not qualify under Rule 701 at the time of grant of the Option, then the Securities may be resold in certain limited circumstances subject to the provisions of Rule 144, which requires the resale to occur not less than two years after the later of the date the Securities were sold by the Company or the date the Securities were sold by an affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the Securities by an affiliate, or by a non-affiliate who subsequently holds the Securities less than three years, the satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of the paragraph immediately above. (d) Optionee further understands that in the event all of the applicable require ments of Rule 701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk. Optionee understands that no assurances can be given that any such other registration exemption will be available in such event. (e) Optionee understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities without the consent of the Commissioner of Corporations of California. Optionee has read the applicable Commissioner's Rules with respect to such restriction, a copy of which is attached. Signature of Optionee: __________________________________ Date:_______________________, 19__ ATTACHMENT 1 STATE OF CALIFORNIA - CALIFORNIA ADMINISTRATIVE CODE ---------------------------------------------------- Title 10. Investment - Chapter 3. Commissioner of Corporations 260.141.11: Restriction on Transfer. (a) The issuer of any security upon ---------- ----------------------- which a restriction on transfer has been imposed pursuant to Sections 260.102.6, 260.141.10 or 260.534 shall cause a copy of this section to be delivered to each issuee or transferee of such security at the time the certificate evidencing the security is delivered to the issuee or transferee. (b) It is unlawful for the holder of any such security to consummate a sale or transfer of such security, or any interest therein, without the prior written consent of the Commissioner (until this condition is removed pursuant to Section 260.141.12 of these rules), except: (1) to the issuer; (2) pursuant to the order or process of any court; (3) to any person described in Subdivision (i) of Section 25102 of the Code or Section 260.105.14 of these rules; (4) to the transferor's ancestors, descendants or spouse, or any custodian or trustee for the account of the transferor or the transferor's ancestors, descendants, or spouse; or to a transferee by a trustee or custodian for the account of the transferee or the transferee's ancestors, descendants or spouse; (5) to holders of securities of the same class of the same issuer; (6) by way of gift or donation inter vivos or on death; (7) by or through a broker-dealer licensed under the Code (either acting as such or as a finder) to a resident of a foreign state, territory or country who is neither domiciled in this state to the knowledge of the broker-dealer, nor actually present in this state if the sale of such securities is not in violation of any securities law of the foreign state, territory or country concerned; (8) to a broker-dealer licensed under the Code in a principal transaction, or as an underwriter or member of an underwriting syndicate or selling group; (9) if the interest sold or transferred is a pledge or other lien given by the purchaser to the seller upon a sale of the security for which the Commissioner's written consent is obtained or under this rule not required; (10) by way of a sale qualified under Sections 25111, 25112, 25113 or 25121 of the Code, of the securities to be transferred, provided that no order under Section 25140 or subdivision (a) of Section 25143 is in effect with respect to such qualification; (11) by a corporation to a wholly owned subsidiary of such corporation, or by a wholly owned subsidiary of a corporation to such corporation; (12) by way of an exchange qualified under Section 25111, 25112 or 25113 of the Code, provided that no order under Section 25140 or subdivision (a) of Section 25143 is in effect with respect to such qualification; (13) between residents of foreign states, territories or countries who are neither domiciled nor actually present in this state; (14) to the State Controller pursuant to the Unclaimed Property Law or to the administrator of the unclaimed property law of another state; or (15) by the State Controller pursuant to the Unclaimed Property Law or by the administrator of the unclaimed property law of another state if, in either such case, such person (i) discloses to potential purchasers at the sale that transfer of the securities is restricted under this rule, (ii) delivers to each purchaser a copy of this rule, and (iii) advises the Commissioner of the name of each purchaser; (16) by a trustee to a successor trustee when such transfer does not involve a change in the beneficial ownership of the securities; (17) by way of an offer and sale of outstanding securities in an issuer transaction that is subject to the qualification requirement of Section 25110 of the Code but exempt from that qualification requirement by subdivision (f) of Section 25102; provided that any such transfer is on the condition that any certificate evidencing the security issued to such transferee shall contain the legend required by this section. (c) The certificates representing all such securities subject to such a restriction on transfer, whether upon initial issuance or upon any transfer thereof, shall bear on their face a legend, prominently stamped or printed thereon in capital letters of not less than 10-point size, reading as follows: "IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES." EXHIBIT C-1 ----------- 1996 STOCK OPTION PLAN RESTRICTED STOCK PURCHASE AGREEMENT THIS AGREEMENT is made between ____________________________________ (the "Purchaser") and Splash Technology Holdings, Inc. (the "Company") as of __________________, 199__. RECITALS -------- (1) Pursuant to the exercise of the stock option granted to Purchaser under the Company's 1996 Stock Option Plan and pursuant to the Stock Option Agreement (the "Option Agreement") dated ___________ by and between the Company and Purchaser with respect to such grant, which Option Agreement is hereby incorporated by reference, Purchaser has elected to purchase _________ of those shares which have not become vested under the vesting schedule set forth in the Option Agreement ("Unvested Shares"). The Unvested Shares and the shares subject to the Option Agreement which have become vested are sometimes collectively referred to herein as the "Shares". (2) As required by the Option Agreement, as a condition to Purchaser's election to exercise the option, Purchaser must execute this Restricted Stock Purchase Agreement, which sets forth the rights and obligations of the parties with respect to Shares acquired upon exercise of the Option. 1. Repurchase Option. ----------------- (a) If Purchaser's employment or consulting relationship with the Company is terminated for any reason, including for cause, death, and disability, the Company shall have the right and option to purchase from Purchaser, or Purchaser's personal representative, as the case may be, all of the Purchaser's Unvested Shares as of the date of such termination at the price paid by the Purchaser for such Shares (the "Repurchase Option"). (b) Upon the occurrence of a termination, the Company may exercise its Repurchase Option by delivering personally or by registered mail, to Purchaser (or his transferee or legal representative, as the case may be), within ninety (90) days of the termination, a notice in writing indicating the Company's intention to exercise the Repurchase Option and setting forth a date for closing not later than thirty (30) days from the mailing of such notice. The closing shall take place at the Company's office. At the closing, the holder of the certificates for the Unvested Shares being transferred shall deliver the stock certificate or certificates evidencing the Unvested Shares, and the Company shall deliver the purchase price therefor. (c) At its option, the Company may elect to make payment for the Unvested Shares to a bank selected by the Company. The Company shall avail itself of this option by a notice in writing to Purchaser stating the name and address of the bank, date of closing, and waiving the closing at the Company's office. (d) If the Company does not elect to exercise the Repurchase Option conferred above by giving the requisite notice within ninety (90) days following the termination, the Repurchase Option shall terminate. 2. Transferability of the Shares; Escrow. ------------------------------------- (a) Purchaser hereby authorizes and directs the secretary of the Company, or such other person designated by the Company, to transfer the Unvested Shares as to which the Repurchase Option has been exercised from Purchaser to the Company. (b) To insure the availability for delivery of Purchaser's Unvested Shares upon repurchase by the Company pursuant to the Repurchase Option under Section 1, Purchaser hereby appoints the secretary, or any other person designated by the Company as escrow agent, as its attorney-in-fact to sell, assign and transfer unto the Company, such Unvested Shares, if any, repurchased by the Company pursuant to the Repurchase Option and shall, upon execution of this Agreement, deliver and deposit with the secretary of the Company, or such other person designated by the Company, the share certificates representing the Unvested Shares, together with the stock assignment duly endorsed in blank, attached hereto as Exhibit C-2. The Unvested Shares and stock assignment shall be held by the secretary in escrow, pursuant to the Joint Escrow Instructions of the Company and Purchaser attached as Exhibit C-3 hereto, until the Company exercises its purchase right as provided in Section 1, until such Unvested Shares are vested, or until such time as this Agreement no longer is in effect. As a further condition to the Company's obligations under this Agreement, the spouse of the Purchaser, if any, shall execute and deliver to the Company the Consent of Spouse attached hereto as Exhibit C-4. Upon vesting of the Unvested Shares, the escrow agent shall promptly deliver to the Purchaser the certificate or certificates representing such Shares in the escrow agent's possession belonging to the Purchaser, and the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless retain such certificate or certificates as escrow agent if so required pursuant to other restrictions imposed pursuant to this Agreement. (c) The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of its judgment. (d) Transfer or sale of the Shares is subject to restrictions on transfer imposed by any applicable state and federal securities laws. Any transferee shall hold such Shares subject to all the provisions hereof and the Exercise Notice executed by the Purchaser with respect to any Unvested Shares purchased by Purchaser and shall acknowledge the same by signing a copy of this Agreement. 3. Ownership, Voting Rights, Duties. This Agreement shall not affect in -------------------------------- any way the ownership, voting rights or other rights or duties of Purchaser, except as specifically provided herein. 4. Legends. The share certificate evidencing the Shares issued hereunder ------- shall be endorsed with the following legend (in addition to any legend required under applicable state securities laws): THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. 5. Adjustment for Stock Split. All references to the number of Shares -------------------------- and the purchase price of the Shares in this Agreement shall be appropriately adjusted to reflect any stock split, stock dividend or other change in the Shares which may be made by the Company after the date of this Agreement. 6. Notices. Notices required hereunder shall be given in person or by ------- registered mail to the address of Purchaser shown on the records of the Company, and to the Company at their respective principal executive offices. 7. Survival of Terms. This Agreement shall apply to and bind Purchaser ----------------- and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors. 8. Section 83(b) Elections. ----------------------- (a) Election for Unvested Shares Purchased Pursuant to Nonqualified --------------------------------------------------------------- Stock Options. Purchaser hereby acknowledges that he or she has been informed - ------------- that, with respect to the exercise of a nonqualified stock option for Unvested Shares, that unless an election is filed by the Purchaser with the Internal Revenue Service and, if necessary, the proper state taxing authorities, within ------ 30 days of the purchase of the Shares, electing pursuant to Section 83(b) of the - ------- Code (and similar state tax provisions if applicable) to be taxed currently on any difference between the purchase price of the Shares and their Fair Market Value on the date of purchase, there will be a recognition of taxable income to the Optionee, measured by the excess, if any, of the fair market value of the Shares, at the time the Company's Repurchase Option lapses over the purchase price for the Shares. Optionee represents that Optionee has consulted any tax consultant(s) Optionee deems advisable in connection with the purchase of the Shares or the filing of the Election under Section 83(b) and similar tax provisions. A form of Election under Section 83(b) is attached hereto as Exhibit C-5 for reference. (b) Election for Unvested Shares Purchased Pursuant to Incentive Stock ------------------------------------------------------------------ Options. Purchaser hereby acknowledges that he or she has been informed that, - ------- with respect to the exercise of an incentive stock option for Unvested Shares, that unless an election is filed by the Purchaser with the Internal Revenue Service and, if necessary, the proper state taxing authorities, within 30 days of the purchase of the Shares, electing pursuant to -------------- Section 83(b) of the Code (and similar state tax provisions if applicable) to be taxed currently on any difference between the purchase price of the Shares and their Fair Market Value on the date of purchase, there will be a recognition of income to the Optionee, for alternative minimum tax purposes, measured by the excess, if any, of the fair market value of the Shares, at the time the Company's Repurchase Option lapses over the purchase price for the Shares. Optionee represents that Optionee has consulted any tax consultant(s) Optionee deems advisable in connection with the purchase of the Shares or the filing of the Election under Section 83(b) and similar tax provisions. A form of Election under Section 83(b) for alternative minimum tax purposes is attached hereto as Exhibit C-6 for reference. PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON PURCHASER'S BEHALF. 9. Representations. Purchaser has reviewed with his own tax advisors the --------------- federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement. Purchaser is relying solely on such advisors and not on any statements or represen tations of the Company or any of its agents. Purchaser understands that he (and not the Company) shall be responsible for his own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. 10. Governing Law. This Agreement shall be governed by and construed and ------------- enforced in accordance with applicable state laws. Purchaser represents that he has read this Agreement and is familiar with its terms and provisions. Purchaser hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any questions arising under this Agreement. IN WITNESS WHEREOF, this Agreement is deemed made as of the date first set forth above. "COMPANY" SPLASH TECHNOLOGY HOLDINGS, INC. By: ____________________________________ Title: _________________________________ "PURCHASER" ________________________________________ Address: Soc. Sec. No.: _________________________ EXHIBIT C-2 ----------- ASSIGNMENT SEPARATE FROM CERTIFICATE FOR VALUE RECEIVED I, __________________________, hereby sell, assign and transfer unto __________________________________________________ (__________) shares of the Common Stock of Splash Technology Holdings, Inc. standing in my name of the books of said corporation represented by Certificate No. _____ herewith and do hereby irrevocably constitute and appoint _______________________ to transfer the said stock on the books of the within named corporation with full power of substitution in the premises. This Stock Assignment may be used only in accordance with the Restricted Stock Purchase Agreement between________________________ and the undersigned dated ______________, 19__. Dated: _______________, 19___ Signature:______________________________ INSTRUCTIONS: Please do not fill in any blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise its "repurchase option," as set forth in the Agreement, without requiring additional signatures on the part of the Purchaser. EXHIBIT C-3 ----------- JOINT ESCROW INSTRUCTIONS ------------------------- _____________, 19__ Corporate Secretary Splash Technology Holdings, Inc. 555 Del Rey Avenue Sunnyvale, California 94086 Attention: Secretary Dear _________________: As Escrow Agent for both Splash Technology Holdings, Inc. (the "Company"), and the undersigned purchaser of stock of the Company (the "Purchaser"), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Restricted Stock Purchase Agreement ("Agreement") between the Company and the undersigned, in accordance with the following instructions: 1. In the event the Company and/or any assignee of the Company (referred to collectively for convenience herein as the "Company") exercises the Company's repurchase option set forth in the Agreement, the Company shall give to Purchaser and you a written notice specifying the number of shares of stock to be purchased, the purchase price, and the time for a closing hereunder at the principal office of the Company. Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice. 2. At the closing, you are directed (a) to date the stock assignments necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver same, together with the certificate evidencing the shares of stock to be transferred, to the Company or its assignee, against the simultaneous delivery to you of the purchase price (by cash, a check, or some combination thereof) for the number of shares of stock being purchased pursuant to the exercise of the Company's repurchase option. 3. Purchaser irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and substitutions to said shares as defined in the Agreement. Purchaser does hereby irrevocably constitute and appoint you as Purchaser's attorney-in-fact and agent for the term of this escrow to execute with respect to such securities all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any required applications for consent to, or notice of transfer of, the securities. Subject to the provisions of this paragraph 3, Purchaser shall exercise all rights and privileges of a stockholder of the Company while the stock is held by you. 4. Upon written request of the Purchaser, but no more than once per calendar year, unless the Company's repurchase option has been exercised, you will deliver to Purchaser a certificate or certificates representing so many shares of stock as are not then subject to the Company's repurchase option. Within 120 days after cessation of Purchaser's continuous employment by or services to the Company, or any parent or subsidiary of the Company, you will deliver to Purchaser a certificate or certificates representing the aggregate number of shares held or issued pursuant to the Agreement and not purchased by the Company or its assignees pursuant to exercise of the Company's repurchase option. 5. If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Purchaser, you shall deliver all of the same to Purchaser and shall be discharged of all further obligations hereunder. 6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto. 7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith. 8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction. 9. You shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder. 10. You shall not be liable for the outlawing of any rights under the Statute of Limitations with respect to these Joint Escrow Instructions or any documents deposited with you. 11. You shall be entitled to employ such legal counsel and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. 12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be an officer or agent of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company shall appoint a successor Escrow Agent. 13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments. 14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings. 15. Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties thereunto entitled at the following addresses or at such other addresses as a party may designate by ten days' advance written notice to each of the other parties hereto. COMPANY: Splash Technology Holdings, Inc. 555 Del Rey Avenue Sunnyvale, California 94086 Attention: Secretary PURCHASER: __________________________________________ __________________________________________ __________________________________________ ESCROW AGENT: Corporate Secretary Splash Technology Holdings, Inc. 555 Del Rey Avenue Sunnyvale, California 94086 Attention: Secretary 16. By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement. 17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. 18. These Joint Escrow Instructions shall be governed by, and construed and enforced in accordance with, the laws of the State of California. SPLASH TECHNOLOGY HOLDINGS, INC. By: ____________________________________________ Title: _________________________________________ Purchaser: _____________________________________ (Signature) ________________________________________________ (Typed or Printed Name) Escrow Agent: ________________________________________________ Corporate Secretary EXHIBIT C-4 ----------- CONSENT OF SPOUSE ----------------- I, ____________________, spouse of ___________________, have read and approve the foregoing Agreement. In consideration of granting of the right to my spouse to purchase shares of Splash Technology Holdings, Inc., as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement. Dated: _______________, 19___ ____________________________________ EXHIBIT C-5 ----------- ELECTION UNDER SECTION 83(b) ---------------------------- OF THE INTERNAL REVENUE CODE OF 1986 ------------------------------------ The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer's gross income for the current taxable year the amount of any compensation taxable to taxpayer in connection with taxpayer's receipt of the property described below: 1. The name, address, taxpayer identification number and taxable year of the undersigned are as follows: NAME: TAXPAYER: SPOUSE: ADDRESS: IDENTIFICATION NO.: TAXPAYER: SPOUSE: TAXABLE YEAR: 2. The property with respect to which the election is made is described as follows: ______________________________ shares (the "Shares") of the Common Stock of Splash Technology Holdings, Inc. (the "Company"). 3. The date on which the property was transferred is: ____________________________, 19 ____. 4. The property is subject to the following restrictions: The Shares may not be transferred and are subject to forfeiture under the terms of an agreement between the taxpayer and the Company. These restrictions lapse upon the satisfaction of certain conditions contained in such agreement. 5. The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is: $______________________. 6. The amount (if any) paid for such property is: $______________________. The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned's receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property. The undersigned understands that the foregoing election may not be revoked - -------------------------------------------------------------------------- except with the consent of the Commissioner. - ------------------------------------------- Dated: ___________________, 19__ ______________________________ Taxpayer The undersigned spouse of taxpayer joins in this election. Dated: ___________________, 19__ ______________________________ Spouse of Taxpayer EXHIBIT C-6 ----------- ELECTION UNDER SECTION 83(b) ---------------------------- OF THE INTERNAL REVENUE CODE OF 1986 ------------------------------------ The undersigned taxpayer hereby elects, pursuant to the provisions of Sections 55-56 and 83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer's alternative minimum taxable income for the current taxable year, as compensation for services, the excess, if any, of the fair market value of the property described below at the time of transfer over the amount paid for such property. 1. The name, address, taxpayer identification number and taxable year of the undersigned are as follows: NAME: TAXPAYER: SPOUSE: ADDRESS: IDENTIFICATION NO.: TAXPAYER: SPOUSE: TAXABLE YEAR: 2. The property with respect to which the election is made is described as follows: __________ shares (the "Shares") of the Common Stock of Splash Technology Holdings, Inc. (the "Company"). 3. The date on which the property was transferred is: . 4. The property is subject to the following restrictions: The Shares may be repurchased by the Company, or its assignee, at its original purchase price, on certain events. This right lapses with regard to a portion of the Shares over time. 5. The fair market value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is: $_______________ 6. The amount paid for such property is: $_______________ The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned's receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property. The undersigned understands that the foregoing election may not be revoked - -------------------------------------------------------------------------- except with the consent of the Commissioner. - ------------------------------------------- Dated: _________________________, Taxpayer The undersigned spouse of taxpayer joins in this election. Dated: ___________________, 19__ _____________________________________________ EX-10.3 7 1996 EMPLOYEE STOCK PURCHASE EXHIBIT 10.3 SPLASH TECHNOLOGY, INC. 1996 EMPLOYEE STOCK PURCHASE PLAN The following constitute the provisions of the 1996 Employee Stock Purchase Plan of Splash Technology, Inc. 1. Purpose. The purpose of the Plan is to provide employees of the Company ------- and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 2. Definitions. ----------- (a) "Board" shall mean the Board of Directors of the Company. ----- (b) "Code" shall mean the Internal Revenue Code of 1986, as amended. ---- (c) "Common Stock" shall mean the Common Stock of the Company. ------------ (d) "Company" shall mean Splash Technology, Inc., and any Designated ------- Subsidiary of the Company. (e) "Compensation" shall mean all base straight time gross earnings ------------ including commissions, overtime, shift premium, incentive compensation, incentive payments, bonuses and other compensation. (f) "Designated Subsidiaries" shall mean the Subsidiaries which have ----------------------- been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan. (g) "Employee" shall mean any individual who is an Employee of the -------- Company for tax purposes whose customary employment with the Company is at least twenty (20) hours per week and more than five (5) months in any calendar year. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company. Where the period of leave exceeds 90 days and the individual's right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave. (h) "Enrollment Date" shall mean the first day of each Offering Period. --------------- (i) "Exercise Date" shall mean the last trading day of each Purchase ------------- Period Offering Period. (j) "Fair Market Value" shall mean, as of any date, the value of Common ----------------- Stock determined as follows: (1) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Board deems reliable, or; (2) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its Fair Market Value shall be the mean of the closing bid and asked prices for the Common Stock on the date of such determination, as reported in The Wall Street Journal or such other source as the Board deems reliable, or; (3) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Board. (4) For purposes of the Enrollment Date under the first Offering Period under the Plan, the Fair Market Value shall be the initial price to the public as set forth in the final Prospectus included within the registration statement in Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Company's Common Stock. (k) "Offering Period" shall mean the period beginning with the date an --------------- opinion is granted under the Plan and ending with the date determined by the Committee. During the term of the Plan, the duration of each Offering Period shall be determined from time to time by the Committee, provided that no Offering Period may exceed twenty-four (24) months in duration. If determined by the Committee, an Offering Period may include one or more Purchase Periods. The first Offering Period shall begin on the effective date of the Company's initial public offering of its Common Stock that is registered with the Securities and Exchange Commission (the "Effective Date") and shall end on the last Trading Day on or before April 30, 1997. (l) "Plan" shall mean this Employee Stock Purchase Plan. ---- (m) "Purchase Price" shall mean an amount equal to 85% of the Fair -------------- Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower. (n) "Purchase Period" shall mean the period commencing on an Enrollment --------------- Date or after an Exercise Date and which is of such duration as the Committee shall determine. -2- (o) "Reserves" shall mean the number of shares of Common Stock covered -------- by each option under the Plan which have not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option. (p) "Subsidiary" shall mean a corporation, domestic or foreign, of ---------- which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary. (q) "Trading Day" shall mean a day on which national stock exchanges and ----------- the Nasdaq System are open for trading. 3. Eligibility. ----------- (a) Any Employee who shall be employed by the Company on a given Enrollment Date shall be eligible to participate in the Plan. (b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) to the extent that, immediately after the grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Subsidiary, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of the Company and its subsidiaries accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the fair market value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time. 4. Offering and Purchase Periods. The Plan shall be implemented by ----------------------------- consecutive, overlapping Offering Periods, each of which shall be of such duration (not to exceed 24 months) as the Committee shall determine from time to time in its discretion, and each of which shall consist of such number of Purchase Periods as the Committee shall determine from time to time in its discretion. The Plan shall continue until terminated in accordance with Section 19 hereof. The first Offering Period shall commence on the Effective Date and shall end on the last Trading Day on or before April 30, 1997. Unless otherwise specified by the Board, the Offering Periods shall be six months in duration without any Purchase Periods with the first Offering Period commencing on the Effective Date and ending on April 30, 1997, as aforesaid, and the second commencing on May 1, 1997, and ending on October 31, 1997. The Committee shall have the power to change the duration of Offering Periods (including the commencement dates thereof) at any time or from time to time, provided that (except as the shareholders may otherwise approve) any such change shall be effected only with respect to Offering Periods commencing at least five (5) days following the date on which the change is announced. -3- 5. Participation. ------------- (a) An eligible Employee may become a participant in the Plan by completing a subscription agreement authorizing payroll deductions in the form of Exhibit A to this Plan and filing it with the Company's payroll office prior to the applicable Enrollment Date. (b) Payroll deductions for a participant shall commence on the first payroll following the Enrollment Date and shall end on the last payroll in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof. 6. Payroll Deductions. ------------------ (a) At the time a participant files his or her subscription agreement, he or she shall elect to have payroll deductions made on each pay day during the Offering Period in an amount not exceeding ten percent (10%) of the Compensation which he or she receives on each pay day during the Offering Period, provided, however, that for purposes of the first Offering Period, the maximum payroll deduction shall not exceed twenty percent (20%) of the Compensation which a participant receives during the first Offering Period. (b) All payroll deductions made for a participant shall be credited to his or her account under the Plan and shall be withheld in whole percentages only. A participant may not make any additional payments into such account. (c) A participant may discontinue his or her participation in the Plan as provided in Section 10 hereof, or may increase or decrease the rate of his or her payroll deductions during the Offering Period by completing or filing with the Company a new subscription agreement authorizing a change in payroll deduction rate. The Board may, in its discretion, limit the number of participation rate changes during any Offering Period. The change in rate shall be effective with the first full payroll period following five (5) business days after the Company's receipt of the new subscription agreement unless the Company elects to process a given change in participation more quickly. A participant's subscription agreement shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof. (d) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's payroll deductions may be decreased to zero percent (0%) at such time during any Purchase Period which is scheduled to end during the current calendar year (the "Current Purchase Period") that the aggregate of all payroll deductions which were previously used to purchase stock under the Plan in a prior Purchase Period which ended during that calendar year plus all payroll deductions accumulated with respect to the Current Purchase Period equal $21,250. Payroll deductions shall recommence at the rate provided in such participant's subscription agreement at the beginning of the first Purchase Period which is scheduled -4- to end in the following calendar year, unless terminated by the participant as provided in Section 10 hereof. (e) At the time the option is exercised, in whole or in part, or at the time some or all of the Company's Common Stock issued under the Plan is disposed of, the participant must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any time, the Company may, but shall not be obligated to, withhold from the participant's compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Employee. 7. Grant of Option. On the Enrollment Date of each Offering Period, each --------------- eligible Employee participating in such Offering Period shall be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of the Company's Common Stock determined by dividing such Employee's payroll deductions accumulated prior to such Exercise Date and retained in the Participant's account as of the Exercise Date by the applicable Purchase Price; provided that in no event shall an Employee be permitted to purchase during each Purchase Period, or during an Offering Period if such Offering Period does not contain Purchase Periods, more than a number of shares determined by dividing $12,500 by the Fair Market Value of a share of the Company's Common Stock on the Enrollment Date, and provided further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof. The option shall expire on the last day of the Offering Period. 8. Exercise of Option. ------------------ (a) Unless a participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares shall be exercised automatically on the Exercise Date, and the maximum number of full shares subject to option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. No fractional shares shall be purchased; any payroll deductions accumulated in a participant's account which are not sufficient to purchase a full share shall be retained in the participant's account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the participant as provided in Section 10 hereof. Any other monies left over in a participant's account after the Exercise Date shall be returned to the participant. During a participant's lifetime, a participant's option to purchase shares hereunder is exercisable only by him or her. [(b) In the event, on a given Exercise Date, the number of shares with respect to which options are to be exercised exceeds 25,000 shares for the calendar year, the Company shall make a pro rata allocation of the shares remaining below the 25,000 share limit in as uniform a manner as shall be practicable and as it shall determine to be equitable. Notwithstanding the above -5- sentence, for purposes of the first Offering Period under the Plan and any other Exercise Dates in 1997, the 25,000 share limit shall apply separately to each Exercise Date rather than to the 1997 calendar year.] 9. Delivery. As promptly as practicable after each Exercise Date on -------- which a purchase of shares occurs, the Company shall arrange the delivery to each participant, as appropriate, of the shares purchased upon exercise of his or her option. 10. Withdrawal; Termination of Employment. ------------------------------------- (a) A participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by giving written notice to the Company in the form of Exhibit B to this Plan. All of the participant's payroll deductions credited to his or her account shall be paid to such participant promptly after receipt of notice of withdrawal and such participant's option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for such Offering Period. If a participant withdraws from an Offering Period, payroll deductions shall not resume at the beginning of the succeeding Offering Period unless the participant delivers to the Company a new subscription agreement. (b) Upon a participant's ceasing to be an Employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant's account during the Offering Period but not yet used to exercise the option shall be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 14 hereof, and such participant's option shall be automatically terminated. The preceding sentence notwithstanding, a participant who receives payment in lieu of notice of termination of employment shall be treated as continuing to be an Employee for the participant's customary number of hours per week of employment during the period in which the participant is subject to such payment in lieu of notice. (c) A participant's withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods which commence after the termination of the Offering Period from which the participant withdraws. 11. Interest. No interest shall accrue on the payroll deductions of a -------- participant in the Plan. 12. Stock. ----- (a) The maximum number of shares of the Company's Common Stock which shall be made available for sale under the Plan shall be 50,000 shares, subject to adjustment upon changes in capitalization of the Company as provided in Section 18 hereof. If, on a given Exercise Date, the number of shares with respect to which options are to be exercised exceeds the number of shares then -6- available under the Plan, the Company shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall deter mine to be equitable. (b) The participant shall have no interest or voting right in shares covered by his option until such option has been exercised. (c) Shares to be delivered to a participant under the Plan shall be registered in the name of the participant or in the name of the participant and his or her spouse. 13. Administration. -------------- (a) Administrative Body. The Plan shall be administered by the Board ------------------- or a committee of members of the Board appointed by the Board. The Board or its committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and determination made by the Board or its committee shall, to the full extent permitted by law, be final and binding upon all parties. (b) Rule 16b-3 Limitations. Notwithstanding the provisions of ---------------------- Subsection (a) of this Section 13, in the event that Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any successor provision ("Rule 16b-3") provides specific requirements for the administrators of plans of this type, the Plan shall be administered only by such a body and in such a manner as shall comply with the applicable requirements of Rule 16b-3. Unless permitted by Rule 16b-3, no discretion concerning decisions regarding the Plan shall be afforded to any committee or person that is not "disinterested" as that term is used in Rule 16b-3. 14. Designation of Beneficiary. -------------------------- (a) A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant's account under the Plan in the event of such partici pant's death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to exercise of the option. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. (b) Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more -7- dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 15. Transferability. Neither payroll deductions credited to a --------------- participants' account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 14 hereof) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof. 16. Use of Funds. All payroll deductions received or held by the Company ------------ under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions. 17. Reports. Individual accounts shall be maintained for each participant ------- in the Plan. Statements of account shall be given to participating Employees at least annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any. 18. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, --------------------------------------------------------------------- Merger or Asset Sale. -------------------- (a) Changes in Capitalization. Subject to any required action by the ------------------------- shareholders of the Company, the Reserves, as well as the price per share and the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration". Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option. (b) Dissolution or Liquidation. In the event of the proposed -------------------------- dissolution or liquidation of the Company, the Offering Periods shall terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. (c) Merger or Asset Sale. In the event of a proposed sale of all or -------------------- substantially all of the assets of the Company, or the merger of the Company with or into another corporation, any Purchase Periods then in progress shall be shortened by setting a new Exercise Date (the "New -8- Exercise Date") and any Offering Periods then in progress shall end on the New Exercise Date. The New Exercise Date shall be before the date of the Company's proposed sale or merger. The Board shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant's option has been changed to the New Exercise Date and that the participant's option shall be exercised automatically on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof. 19. Amendment or Termination. ------------------------ (a) The Board may at any time and for any reason terminate or amend the Plan. Except as provided in Section 18 hereof, no such termination can affect options previously granted, provided that an Offering Period may be terminated by the Board on any Exercise Date if the Board determines that the termination of the Plan is in the best interests of the Company and its shareholders. Except as provided in Section 18 hereof, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other applicable law or regulation), the Company shall obtain shareholder approval in such a manner and to such a degree as required. (b) Without shareholder consent and without regard to whether any participant rights may be considered to have been "adversely affected," the Board (or its committee) shall be entitled to change the Offering Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company's processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant's Compensation, and establish such other limitations or procedures as the Board (or its committee) determines in its sole discretion advisable which are consistent with the Plan. 20. Notices. All notices or other communications by a participant to ------- the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 21. Conditions Upon Issuance of Shares. Shares shall not be issued ---------------------------------- with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance. -9- As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law. 22. Term of Plan. The Plan shall become effective upon the earlier to ------------ occur of its adoption by the Board of Directors or its approval by the shareholders of the Company. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 19 hereof. -10- EXHIBIT A --------- SPLASH TECHNOLOGY, INC. 1996 EMPLOYEE STOCK PURCHASE PLAN SUBSCRIPTION AGREEMENT _____ Original Application Enrollment Date: ___________ _____ Change in Payroll Deduction Rate _____ Change of Beneficiary(ies) 1. _____________________________________________________ hereby elects to participate in the Splash Technology, Inc. 1996 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") and subscribes to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the Employee Stock Purchase Plan. 2. I hereby authorize payroll deductions from each paycheck in the amount of ____% of my Compensation on each payday (from 1 to 20% for the first Offering Period) during the Offering Period in accordance with the Employee Stock Purchase Plan. (Please note that no fractional percentages are permitted.) 3. I understand that said payroll deductions shall be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Employee Stock Purchase Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option. 4. I have received a copy of the complete Employee Stock Purchase Plan. I understand that my participation in the Employee Stock Purchase Plan is in all respects subject to the terms of the Plan. I understand that my ability to exercise the option under this Subscription Agreement is subject to shareholder approval of the Employee Stock Purchase Plan. 5. Shares purchased for me under the Employee Stock Purchase Plan should be issued in the name(s) of (Employee or Employee and spouse only): ___________________________________________________________________________ ____________. 6. I understand that if I dispose of any shares received by me pursuant to the Plan within 2 years after the Enrollment Date (the first day of the Offering Period during which I purchased such shares) or one year after the Exercise Date, I will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were purchased by me over the price which I paid for the shares. I - hereby agree to notify the Company in writing --------------------------------------------- -11- within 30 days after the date of any disposition of my shares and I will ------------------------------------------------------------------------ make adequate provision for Federal, state or other tax withholding ------------------------------------------------------------------- obligations, if any, which arise upon the disposition of the Common Stock. ------------------------------------------------------------------------- The Company may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by me. If I dispose of such shares at any time after the expiration of the 2-year and 1-year holding periods, I understand that I will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (1) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares, or (2) 15% of the fair market value of the shares on the first day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain. 7. I hereby agree to be bound by the terms of the Employee Stock Purchase Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Employee Stock Purchase Plan. 8. In the event of my death, I hereby designate the following as my beneficiary(ies) to receive all payments and shares due me under the Employee Stock Purchase Plan: NAME: (Please print)______________________________________________ (First) (Middle) (Last) __________________________________ _______________________________________ Relationship _______________________________________ (Address) -2- Employee's Social Security Number: ____________________________________ Employee's Address: ____________________________________ ____________________________________ ____________________________________ I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME. Dated:_________________________ ________________________________________ Signature of Employee _______________________________________ Spouse's Signature (If beneficiary other than spouse) -3- EXHIBIT B --------- SPLASH TECHNOLOGY, INC. 1996 EMPLOYEE STOCK PURCHASE PLAN NOTICE OF WITHDRAWAL The undersigned participant in the Offering Period of the Splash Technology, Inc. 1996 Employee Stock Purchase Plan which began on ____________, 19____ (the "Enrollment Date") hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be automatically termi nated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned shall be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement. Name and Address of Participant: ________________________________ ________________________________ ________________________________ Signature: ________________________________ Date:__________________________ EX-10.5 8 CONFIGURABLE PS INTERPRETER OEM LICENSE AGMT EXHIBIT 10.5 ADOBE CONFIDENTIAL CONFIGURABLE POSTSCRIPT(R) INTERPRETER OEM LICENSE AGREEMENT DATED AS OF SEPTEMBER 18, 1992 BETWEEN SUPERMAC TECHNOLOGY INCORPORATED AND ADOBE SYSTEMS INCORPORATED TABLE OF CONTENTS
PAGE ---- 1. DEFINITIONS............................................................. 1 1.1 Adobe Information................................................. 1 1.2 Adobe Software.................................................... 1 1.3 Adobe Trademarks.................................................. 2 1.4 Coded Font Programs............................................... 2 1.5 Computer System................................................... 2 1.6 CPST Application.................................................. 2 1.7 CPST Application Appendix......................................... 3 1.8 Demonstration Program(s).......................................... 3 1.9 Designated Output Device(s)....................................... 3 1.10 Documentation..................................................... 3 1.11 End User.......................................................... 3 1.12 Internal Improvements............................................. 3 1.13 Licensed System................................................... 3 1.14 Other Adobe-Supplied Software..................................... 3 1.15 PostScript Language Addendum...................................... 3 1.16 PPD File.......................................................... 4 1.17 Subsidiary........................................................ 4 1.18 Trademark......................................................... 4 1.19 Typeface.......................................................... 4 2. LICENSE GRANTS.......................................................... 4 2.1 License to Sublicense Certain Software and Documentation.......... 4 2.2 [*]............................................................... 7 2.3 Conveyance of License Only........................................ 7 2.4 Similar Products.................................................. 7 2.5 Reverse Engineering............................................... 8
[*] Confidential Treatment Requested. -i- 3. DEVELOPMENT, DELIVERY AND ACCEPTANCE.................................... 8 3.1 Agreement on Future CPSI Applications............................. 8 3.2 Adobe Software Development........................................ 8 3.3 Custom Product Development........................................ 8 3.4 OEM-Loaned Equipment and Related Materials........................ 8 3.5 PPD File.......................................................... 9 3.6 Adobe Deliverables................................................ 9 3.7 OEM Modification; Adobe Assistance................................ 9 3.8 Testing........................................................... 9 3.9 PostScript Language Addendum...................................... 11 4. PROPRIETARY RIGHTS...................................................... 11 4.1 Adobe Ownership................................................... 11 4.2 Adobe Trade Secrets............................................... 11 4.3 Unauthorized Distribution or Copying.............................. 11 4.4 No Modifications.................................................. 11 5. TERM OF AGREEMENT....................................................... 12 6. EXPORT.................................................................. 12 7. PAYMENTS................................................................ 12 7.1 CPSI Application Payments......................................... 12 7.2 Coded Font Program Royalties...................................... 12 7.3 Other Payments.................................................... 12 7.4 Taxes............................................................. 13 7.5 Payment of Royalties.............................................. 13 7.6 When Royalties Are Earned......................................... 13 7.7 Right of Audit.................................................... 13 7.8 ITC Typefaces..................................................... 14 8. OEM SUPPORT............................................................. 14 9. COPYRIGHT AND OTHER NOTICES............................................. 14 9.1 Copyright Notices................................................. 14 9.2 Restricted Rights................................................. 15 9.3 Foreign Government Agreements..................................... 15
-ii- LICENSE TO USE ADOBE TRADEMARKS: NONGENERIC ADVERTISING...................... 15 10.1 Trademark License................................................. 15 10.2 Ownership of Trademarks........................................... 16 10.3 Quality Standards................................................. 16 10.4 Infringement Proceedings.......................................... 17 10.5 OEM's Use of Trademarks........................................... 17 10.6 Trademark Registrations........................................... 17 11. WARRANTIES.............................................................. 17 11.1 Infringement...................................................... 17 11.2 Adobe Software Warranty........................................... 18 11.3 Limitations on Warranties......................................... 18 12. INTERNAL IMPROVEMENTS; CONTINUING SUPPORT............................... 19 12.1 Internal Improvements............................................. 19 12.2 Continuing Support................................................ 19 13. CANCELLATION............................................................ 19 13.1 Cancellation by Adobe for Cause................................... 19 13.2 Cancellation by OEM for Cause..................................... 19 13.3 Bankruptcy........................................................ 19 13.4 Obligations on Cancellation, Termination or Expiration............ 19 14. LIMITATION OF LIABILITY................................................. 20 15. GENERAL................................................................. 21 15.1 Governing Law..................................................... 21 15.2 Notices........................................................... 21 15.3 Injunctive Relief................................................. 21 15.4 No Agency......................................................... 21 15.5 Force Majeure..................................................... 21 15.6 Waiver............................................................ 22 15.7 Severability...................................................... 22 15.8 Headings.......................................................... 22 15.9 Confidentiality of Agreement...................................... 22 15.10 No Patent License................................................. 22 15.11 Assignment........................................................ 22 15.12 Attorneys' Fees................................................... 22 15.13 Full Power........................................................ 23 15.14 Forum............................................................. 23 15.15 Entire Agreement.................................................. 23 SIGNATORIES............................................................. 23
-iii- EXHIBITS --------
Paragraph Title Exhibit Reference - ----- ------- --------- Description of Adobe Software A 1.2, Exhibit F Adobe Trademarks B 1.3 Coded Font Programs C Recitals, 1.4, 1.4.1, 1.4.2, 1.19, 2.1.1, 10.1, 10.2, Exhibit F Reproduction Locations D 2.1.1, 2.1.2, 2.1.5, 2.1.8 Minimum Terms of End User Agreement E 2.1.9 Sample Form of CPSI Application Appendix F 3.1
-iv- ADOBE SYSTEMS INCORPORATED CONFIGURABLE POSTSCRIPT INTERPRETER OEM LICENSE AGREEMENT THIS AGREEMENT is between ADOBE SYSTEMS INCORPORATED, a California corporation having a place of business at 1585 Charleston Road, P.O. Box 7900, Mountain View, California 94039-7900 ("Adobe), and SuperMac Technology, Inc., a Delaware corporation having a place of business at 485 Potrero Ave, Sunnyvale, CA 94086 ("OEM"). This Agreement is effective as of September 18, 1992. RECITALS: A. Adobe owns certain computer programs, known collectively as the Configurable PostScript Interpreter software, which converts the PostScript language text into a raster image to control raster devices such as CRT displays, dot-matrix printers, laser printers, and photo typesetters. (Adobe and PostScript are trademarks of Adobe registered in the United States.) B. Adobe also has rights to the Roman Initial lnstallation Coded Font Programs identified in Exhibit C ("Coded Font Programs") hereto and the Roman --------- Additional Coded Font Programs, if any, and Other Coded Font Programs, if any, identified in the applicable CPSI Application Appendix. C. OEM wishes to license the object code of the Configurable PostScript Interpreter software and the Coded Font Programs for incorporation in mutually agreeable OEM application programs for use in mutually agreeable computer system environments. OEM and Adobe therefore agree as follows: AGREEMENT: --------- 1. DEFINITIONS. ----------- 1.1 Adobe Information. "Adobe Information" shall mean the Adobe ----------------- Software, Other Adobe-Supplied Software, Coded Font Programs, Demonstration Program(s), Typefaces, Trademarks, Documentation and the Adobe Trademarks. 1.2 Adobe Software. "Adobe Software" shall mean (i) the computer -------------- programs known collectively as the Configurable PostScript Interpreter software as [*] Confidential Treatment Requested. 1 provided by Adobe to OEM hereunder and without any OEM modifications or additions thereto, but not including the Demonstration Program(s), (ii) any other software programs identified in Exhibit A ("Description of Adobe --------- Software") or designated as "Adobe Software" in any CPSI Application Appendix hereto, and (iii) any corrections, changes, alterations or enhancements to the Adobe Software, including Internal Improvements, supplied by Adobe to OEM pursuant to the terms hereof or any corrections or updates to the Adobe Software supplied to OEM by Adobe under the terms of a Continuing Support Agreement between the parties. 1.3 Adobe Trademarks. "Adobe Trademarks" shall mean (i) the trademarks, ---------------- stylistic marks and distinctive logotypes set forth in Exhibit B ("Adobe --------- Trademarks"), and (ii) other marks and logotypes as Adobe may from time to time designate during the term of this Agreement. 1.4 Coded Font Programs. "Coded Font Programs" shall mean the Roman ------------------- Initial Installation Coded Font Programs, Roman Additional Coded Font Programs, if any, and Other Coded Font Programs, if any, encoded in a special format (as specified in Exhibit C ("Coded Font Programs") or in the applicable CPSI - --------- Application Appendix hereto)) and in encrypted form for delivery to OEM. The term Coded Font Programs does not include any Roman Initial Installation Coded Font Programs, Roman Additional Coded Font Programs or Other Coded Font Programs which Adobe is not entitled to license to Adobe's OEM customers; provided, however, that such limitation does not apply to the Coded Font Programs identified in Exhibit C ("Coded Font Programs") or in any CPSI Application --------- Appendix. 1.4.1 Roman Initial Installation Coded Font Programs. "Roman ---------------------------------------------- Initial Installation Coded Font Programs" shall mean the digitally encoded machine readable outline programs for the Typefaces identified in Exhibit C --------- ("Coded Font Programs") or in a CPSI Application Appendix hereto, and distributed for use as a part of a licensed System. 1.4.2 Roman Additional Coded Font Programs. "Roman Additional ------------------------------------ Coded Font Programs" shall mean the digitally encoded machine readable outline programs for the Roman Typefaces identified in Exhibit C ("Coded Font Programs") --------- or in a CPSI Application Appendix hereto, and distributed for use as a part of a licensed System. 1.4.3 Other Coded Font Programs. "Other Coded Font Programs" shall ------------------------- mean the Coded Font Programs (which may include, but are not limited to, Coded Font Programs for Japanese Typefaces), which are identified in a CPSI Application Appendix hereto, and which are distributed for use as a part of a Licensed System. 1.5 Computer System. "Computer System" shall mean one (1) computer with --------------- operating system software, associated raster display and a Designated -2- Output Device, all of which must be set forth in the applicable CPSI Application Appendix. 1.6 CPST Application. "CPSI Application" shall mean any mutually ---------------- agreeable application program running in a Computer System environment, as identified in a CPSI Application Appendix hereto, which incorporates all Or Part Of the Adobe Software. 1.6.1 CPSI Application Appendix. "CPSI Application Object" shall ------------------------- mean the object code version of a CPSI Application. 1.7 CPST Application Appendix. "CPSI Application Appendix" shall mean ------------------------- any CPSI Application Appendix to this Agreement pursuant to which an OEM will be using the Adobe Software to create a CPSI Application for use as part of a new Licensed System described therein. 1.8 Demonstration Program(s). "Demonstration Program(s)" shall mean ------------------------ program(s), both in source and/or object code form, which are intended to provide OEM with an example of how to integrate the Adobe Software into an application program. 1.9 Designated Output Device(s). "Designated Output Device(s)" shall --------------------------- mean any output device designated as such in a CPSI Application Appendix and which has been approved by Adobe for use in conjunction with the CPSI Application Object to generate output. 1.10 Documentation. "Documentation" shall mean (i) the PostScript ------------- ---------- Language Reference Manual, Second Edition, as printed in English by Addison- - ----------------------------------------- Wesley, current as of April, 1991, or such other version of the PostScript Language Reference Manual as specified in a CPSI Application Appendix, (ii) the PostScript Language Addendum Template, (iii) any Adobe supplement thereto specific to the Adobe Software licensed hereunder (the "CPSI Supplement"), (iv) any other Documentation for Adobe Software identified in a CPSI Application Appendix hereto and (v) any updates, enhancements, substitutions, replacements or modifications thereof delivered to OEM by Adobe during the term of this Agreement. 1.11 End User. "End User" shall mean a single individual using the CPSI -------- Application Object on a single Computer System for its ordinary and customary business or for personal purposes, and not for redistribution. 1.12 Internal Improvements. "Internal Improvements" shall mean --------------------- modifications and enhancements to the Adobe Software which are designed by Adobe to correct or improve the performance of the Adobe Software and which are generally provided free of charge to Adobe's OEM customers, but shall not include -3- Adobe Software with enhanced functionality marketed by Adobe as a separate product. 1.13 Licensed System. "Licensed System" shall mean the Computer System, --------------- CPSI Application Object and Coded Font Programs. 1.14 Other Adobe-Supplied Software. "Other Adobe-Supplied Software" shall ----------------------------- mean any software, other than Adobe Software or Demonstration Program(s), identified in a CPSI Application Appendix hereto and any updates or modifications thereof delivered to OEM by Adobe during the term of Agreement. 1.15 PostScript Language Addendum. "PostScript Language Addendum" shall ---------------------------- mean a supplement to the Documentation for each Licensed System to be written by OEM using the PostScript Language Addendum Template as a guide and with technical content approved by Adobe, that describes the features specific to a Licensed System and the means of accessing those features via the Adobe Software. 1.16 PPD File. "PPD File" shall mean a human readable, machine -------- parseable, PostScript printer description file containing device-specific information as to how to invoke the features of a particular Licensed System, as described in the "PostScript Printer Description File Specification" (which specification is available from Adobe and subject to change by Adobe, in its sole discretion, from time to time). 1.17 Subsidiary. "Subsidiary" shall mean any corporation, partnership or ---------- other entity as to which OEM (a) owns or controls, directly or indirectly, at least fifty percent (50%) by nominal value or number of units of the outstanding stock or of the outstanding stock conferring the right to vote at a general meeting, or (b) has the right to elect a majority of the Board of Directors or its equivalent, or (c) has the right, directly or indirectly, to appoint or remove the management. 1.18 Trademark. "Trademark" shall mean the trademarks, if any, used by --------- Adobe to identify the Coded Font Programs and Typefaces. 1.19 Typeface. "Typeface" shall mean a human readable set of glyphs, -------- including letters of the alphabet, upper and/or lower case, the numerals 0-9 and additional special characters and punctuation marks as may be offered by Adobe in conjunction with such letters and numerals of one typeface design and identified in Exhibit C ("Coded Font Programs") hereto or in any CPSI Application Appendix. Each weight or version of a single typeface design (such as Roman or Italic or in an expanded or condensed form) marketed by Adobe as a separate typeface will be considered a separate Typeface. -4- 2. LICENSE GRANTS. -------------- 2.1 License to Sublicense Certain Software and Documentation. -------------------------------------------------------- 2.1.1 Adobe Software. Adobe hereby grants to OEM a worldwide, non- -------------- exclusive, non-transferable license, during the term of this Agreement (subject to OEM's compliance with Paragraph 2.1.7 ("Limited Functional Scope of License") --------------- through Paragraph 2.1.10 ("Protection Mechanisms"), Paragraph 4.3 ("Unauthorized ---------------- ------------- Distribution or Copying") and the other terms hereof), to use, and to reproduce only at the locations listed in Exhibit D ("Reproduction Locations") hereto, as --------- amended from time to time, and to Sublicense and distribute, directly and indirectly, through OEM's usual distribution channels, copies of the object code version of the Adobe Software only as part of a CPS Application Object for use by End Users solely on or in conjunction with a Computer System comprising a Licensed System, as described in a CPSI Application Appendix. Each copy of the CPSI Application Object shall be licensed for use only on a single Computer System. OEM agrees that any such distribution of the CPSI Application Object shall include at a minimum the Roman Initial Installation Coded Font Programs, as described in Exhibit C ("Coded Font Programs") hereto, or otherwise as --------- specified in the applicable CPSI Application Appendix. 2.1.2 Coded Font Programs. Adobe hereby grants to OEM a worldwide, ------------------- non-exclusive, non-transferable license, during the term of this Agreement (subject to OEM's compliance with Paragraph 2.1.7 ("Limited Functional Scope of --------------- License") through Paragraph 2.1.10 ("Protection Mechanisms"), Paragraph 4.3 ---------------- ------------- ("Unauthorized Distribution or Copying") and the other terms hereof), (a) to use, and to reproduce only at the locations listed in Exhibit D ("Reproduction --------- Locations") hereto, as amended from time to time, the Coded Font Programs provided by Adobe and to sublicense and distribute, directly and indirectly, through OEM's usual distribution channels, such Coded Font Programs to End Users bundled with the OEM Application Object solely for use as part of a Licensed System on the terms set forth herein; (b) to sublicense the Coded Font Programs to End Users for the reproduction and display of Typefaces on the applicable Licensed Systems; (c) to sublicense such End Users to reproduce and display Typefaces on the applicable Licensed System on which the Typefaces are licensed; (d) to use the Coded Font Programs to reproduce and display the Typefaces on the applicable Licensed Systems for purposes of test, evaluation, demonstration or development of applications; (e) to reproduce and display Typefaces on the applicable Licensed Systems for purposes of test, evaluation, demonstration or development of applications; and (f) to use and to sublicense such End Users to use the Trademarks used by Adobe to identify the Coded Font Programs. OEM's license under this Paragraph 2.1.2 with respect to any --------------- particular Coded Font Program will terminate, and OEM shall no longer be entitled to distribute the corresponding Coded Font Program, upon termination of the agreement between Adobe and the owner of any Trademark, if any, pertaining to such Coded Font Program. -5- 2.1.3 Demonstration Program(s). Adobe hereby grants to OEM a ------------------------ worldwide, non-exclusive, non-transferable license, during the term of this Agreement (subject to OEM's compliance with Paragraph 2.1.7 ("Limited Functional --------------- Scope of License") through Paragraph 2.1.10 ("Protection Mechanisms"), Paragraph ---------------- --------- 4.3 ("Unauthorized Distribution or Copying") and the other terms hereof), to use - --- the Demonstration Program(s) internally as a demonstration of how the Adobe Software may be used and to modify and create derivative works with the Demonstration Program(s), provided that any portion of the Demonstration Program(s) which is included in any derivative work is distributed in object code form only for use solely in conjunction with a Licensed System. Modifications made by OEM to the Demonstration Program(s), but not the original code supplied by Adobe hereunder, shall be the property of OEM; provided, however, that any portion of the Demonstration Program(s) which is included in any derivative work shall remain subject to the provisions of this Agreement. 2.1.4 PostScript Language Addendum Template. Adobe hereby grants ------------------------------------- to OEM a non-transferable, non-exclusive license, during the term of this Agreement and subject to the terms hereof, to use (but not reproduce) the single copy of the PostScript Language Addendum Template ("Template") supplied by Adobe to OEM hereunder solely as a guide for customizing and creating the PostScript Language Addendum for a specific Licensed System. 2.1.5 Other Adobe-Supplied Software. Adobe hereby grants to OEM a ----------------------------- non-exclusive, non-transferable license, during the term of this Agreement and subject to the terms hereof, to use, and to reproduce only at the locations listed in Exhibit D ("Reproduction Locations") hereto, the Other Adobe-Supplied Software for the purpose specified in a CPSI Application Appendix hereto. If the purpose specified in a CPSI Application Appendix contemplates OEM distributing a portion or all of the Other Adobe-Supplied Software, then such grant of a license by Adobe to OEM under this Paragraph shall include a non- exclusive, non-transferable license to sublicense and distribute, directly and indirectly, through OEM's usual distribution channels, copies of the object code version of the Other Adobe-Supplied Software for use by End Users solely on or in conjunction with a Computer System comprising a Licensed System, as described in the applicable CPSI Application Appendix. 2.1.6 Nondisclosure. OEM agrees to disclose the Adobe Software, ------------- Other Adobe-Supplied Software, Coded Font Programs and Demonstration Program(s) and the Template only to authorized employees and independent contractors having a need to use them as permitted by this Agreement and to take all measures reasonably required to prevent disclosure to other parties. OEM agrees that it will disclose the Adobe Software, Other Adobe-Supplied Software, Coded Font Programs and Demonstration Program(s) and Template only to employees and independent contractors with a need to know who have agreed in writing (i) not to disclose the Adobe Software, Other Adobe-Supplied Software, Coded Font Programs and Demonstration Program(s) and Template, (ii) to use the -6- Adobe Software, Other Adobe-Supplied Software, Coded Font Programs and Demonstration Program(s) and Template for the sole benefit of OEM and only as permitted by this Agreement, and (iii) to take all reasonable precautions to Prevent disclosure to other parties. OEM shall take prompt and appropriate action to prevent unauthorized use or disclosure of Adobe Software. Other Adobe- Supplied Software, Coded Font Programs and Demonstration Program(s) and Template by such authorized employees and independent contractors. 2.1.7 Limited Functional Scope of License. The licenses granted ----------------------------------- hereunder are limited to OEM's development and subsequent sublicensing Of CPSI Application Object and Coded Font Programs and Other Adobe-Supplied Software, if any, to be used to generate raster images on Computer Systems. These licenses do not extend to the development or sublicensing of End User Software that is used, directly or indirectly (a) to modify Coded Font Programs or Typefaces other than to convert them to the disk-based representation of a Coded Font Program, (b) to generate Coded Font Programs or Typefaces for use other than with a CPSI Application Object licensed hereunder, (c) to control the output from output devices other than those designated in the CPSI Application Appendix (the "Designated Output Devices") or (d) to generate output for more than one (1) Designated Output Device at a time unless OEM has issued an additional license to the End User and paid Adobe an additional per copy royalty in the amount specified in the applicable CPSI Application Appendix. 2.1.8 Subsidiaries of OEM. This Agreement applies to OEM and to ------------------- any Subsidiaries of OEM which agree with OEM in writing to be bound by the terms and conditions imposed on OEM hereunder. Notwithstanding the foregoing, OEM agrees to make all payments due Adobe under the terms of this Agreement. OEM agrees that reproduction of the CPSI Application Object and Coded Font Programs will only be done by OEM or its Subsidiaries at the locations described in Exhibit D ("Reproduction Locations"). The exercise of any right granted under - --------- this Agreement by any such Subsidiary is subject to OEM's guaranty of the performance by such Subsidiary of all of OEM's obligations hereunder. 2.1.9 End User Licensing. OEM shall take all steps necessary to ------------------ ensure that each End User signs a copy of OEM's standard software license prior to receipt of a copy of the CPSI Application Object or otherwise accepts the CPSI Application Object subject to terms of a license agreement as described in this Paragraph 2.1.9. The terms of such license will be drafted so as to apply to the CM Application Object, Coded Font Programs and Other Adobe-Supplied Software, if any. In addition, such license will include terms and conditions substantially equivalent to those set forth in Exhibit E ("Minimum Terms of End --------- User Agreement") to this Agreement. In the United States and in the other jurisdictions where an enforceable copyright covering the CPSI Application Object and Coded Font Programs exists, the software license specified above may be a written agreement signed by the End User prior to or simultaneously with the delivery of each copy of the CPSI Application Object, Other Adobe-Supplied Software or any -7- Coded Font Programs distributed by OEM, or a written agreement in the package containing the CPSI Application Object, Other Adobe-Supplied Software and Coded Font Programs or the user documentation for the CPSI Application Object, Other Adobe-Supplied Software and Coded Font Programs that is fully visible to the End User and that the End User accepts by opening the package. In all other jurisdictions such software license must be a written agreement signed by the End User. OEM agrees it shall be deemed to have materially breached this Agreement if it (a) fails to use its best efforts to enforce the corresponding provisions of End User Agreements set forth in Exhibit E ("Minimum Terms of End --------- User Agreement"), (b) distributes versions of CPSI Application Object or other software that facilitates End User violation of these limitations, or (c) otherwise licenses End Users so as to expand the rights granted herein or reduce the obligations required hereby. 2.1.10 Protection Mechanisms. OEM shall employ in conjunction with --------------------- the CPSI Application Object and Coded Font Programs licensed hereunder, copy protection, serialization, encryption or any other mechanism to restrict or monitor unauthorized use of application software, as required by Adobe and as specified in the applicable CPSI Application Appendix. If no standard for protection is specified, OEM shall ensure that the CPSI Application Object and Coded Font Programs are encrypted, and, in the case of Other Coded Font Programs for Japanese Typefaces, copy protected as well. 2.2 [*] 2.3 Conveyance of License Only. This Agreement grants OEM a license to -------------------------- the Adobe Information only and only such rights as are specifically enumerated herein. No other right, title, or interest in the Adobe Information is hereby conveyed to OEM. 2.4 Similar Products. OEM acknowledges that Adobe is currently, and will ---------------- in the future, develop and acquire other software, including software based on the Adobe Software, that such existing or planned software independently developed or acquired by Adobe may contain ideas and concepts similar to those in the CPSI Application; and that, over time, Adobe's employees may gain familiarity, pursuant to this Agreement, with such general concepts and ideas. Therefore, OEM agrees that Adobe shall not be precluded from developing acquiring or distributing software or other products containing such ideas and concepts for any purpose, without obligation to OEM. -8- [*] Confidential Treatment Requested. 2.5 Reverse Engineering. OEM agrees that it will not reverse engineer, ------------------- reverse compile, disassemble or otherwise attempt to create source code which is derived from the Adobe Software, Other Adobe-Supplied Software or Coded Font Programs or Demonstration Program(s) provided in object code form. OEM further agrees that the object code version of the Adobe Software licensed from Adobe is intended to be used as an integral part of the CPSI Application to be developed by OEM and OEM will take all reasonable precautions to prevent Its customers from extracting the Adobe Software from the CPSI Application with which it is combined and distributed. 3. DEVELOPMENT, DELIVERY AND ACCEPTANCE. ------------------------------------ 3.1 Agreement on Future CPSI Applications. The parties agree that the ------------------------------------- Adobe Software may be licensed for use with-other application programs or in other computer environments upon the mutual agreement of OEM and Adobe under the terms of a fully executed CPSI Application Appendix in a form similar to Exhibit F ("Sample Form of CPSI Application Appendix") hereto. - --------- 3.2 Adobe Software Development. Adobe shall use its best efforts to -------------------------- develop and modify the Adobe Software for use as part of the CPSI Application in the Computer System environment specified in the applicable CPSI Application Appendix, subject to the following limitations. If Adobe determines that it b not technically feasible to develop the Adobe Software for the particular CPSI Application specified in the applicable CYST Application Appendix, OEM's sole and exclusive remedy shall be to terminate the development of the Adobe Software for such CPSI Application and to obtain a refund of that portion of the software license fee, if any, paid by OEM to Adobe under Paragraph 7.1 ("CPST Application ------------- Payments") below for such CPSI Application, as specified in the applicable CPSI Application Appendix I provided that OEM has returned all existing copies of the Adobe Software for such CPSI Application and certified in writing that it has no right to use or distribute such Adobe Software. 3.3 Custom Product Development. If OEM requests a custom product -------------------------- development from Adobe (i.e. a product that requires Adobe to develop a version of the Adobe Software that is not then a current product offering of Adobe), Adobe and OEM will negotiate the business terms of this custom development, including without limitation, the scope of work, technical specification, pricing and milestone schedule, and if the parties can agree, the terms of such agreement will be set forth in a non-standard form of a CPSI Application Appendix to be executed by the parties and made a part of this Agreement. 3.4 OEM-Loaned Equipment and Related Materials. ------------------------------------------ 3.4.1 OEM-Loaned Equipment. Concurrent with, or promptly after, -------------------- the effective date of any CPSI Application Appendix hereto, OEM shall provide Adobe with the software, equipment and documentation, if any, set forth in the -9- applicable CPSI Application Appendix, to be used by Adobe for testing the CPSI Application Object in accordance with Paragraph 3.8.2 ("Adobe Testing") below. --------------- OEM shall also promptly provide Adobe with any other software, equipment, and documentation necessary for Adobe to perform development or warranty services for OEM hereunder or to provide maintenance services to OEM under a Continuing Support Agreement (collectively "OEM-Loaned Equipment"). All OEM-Loaned Equipment will be returned to OEM at its request after termination of Adobe's development, testing, warranty and maintenance activities hereunder. All OEM-Loaned Equipment shall remain the property of OEM. OEM shall pay shipping costs for delivery of the OEM-Loaned Equipment to Adobe. Any OEM-Loaned Equipment shall be returned to OEM by Adobe, shipping and insurance costs prepaid by OEM. While in the possession of Adobe, the OEM-Loaned Equipment shall be maintained by OEM in good working order and shall be fully insured by Adobe. Any delays in maintaining the OEM-Loaned Equipment by OEM shall result in corresponding delays in the milestone schedule for the applicable CPSI Application Appendix. 3.4.2 OEM Technical Contract. OEM agrees to designate in the ---------------------- particular CPSI Application Appendix a technically qualified person to respond to information requests by Adobe who, when so requested by Adobe, shall use his or her best efforts to respond within two (2) working days of receipt of such request. 3.5 PPD File. OEM shall also create and deliver to Adobe one (1) master -------- copy of the PPD File for each Licensed System at the time OEM provides a beta version of the CPSI Application Object to Adobe for testing under Paragraph --------- 3.8.2 ("Adobe Testing") and any updated version thereof in a timely manner - ----- following the availability of any updated version. OEM shall include with each licensed System a copy of the corresponding PPD File. 3.6 Adobe Deliverables. Adobe will provide OEM with one (1) master copy ------------------ of the Adobe Software for each CPSI Application, the Other Adobe-Supplied Software, if any, the Coded Font Programs and the Demonstration Program(s) in accordance with the milestones set forth in the applicable CPSI Application Appendix hereto, and one copy of the Documentation to be delivered by Adobe to OEM under the provisions of a CPSI Application Appendix. 3.7 OEM Modification; Adobe Assistance. OEM shall be responsible for ---------------------------------- producing the CPSI Application Object fully adapted to the applicable Licensed System and suitable for distribution to End Users. Adobe's sole responsibility in connection with such modification shall be to provide OEM, at no charge, with eight (8) person hours of technical assistance (or such other quantity as is specified in the applicable CPSI Application Appendix) to familiarize OEM personnel with the operation of the Adobe Software. All such assistance will be provided at Adobe's headquarters facilities in California, or such other facility as specified in the applicable CPSI Application Appendix. -10- 3.8 Testing. [*] ------- 3.8.1 [*] 3.8.2 [*] [*] Confidential Treatment Requested. -11- 3.9 [*] 4. PROPRIETARY RIGHTS. ------------------ 4.1 Adobe Ownership. OEM acknowledges that Adobe and its suppliers are --------------- the sole and exclusive owners of all rights, title and interest, including all trademarks, copyrights, patents, trade names, trade secrets and other intellectual property rights to the Trademarks and Adobe Trademarks, logos, and product names, and to all of the documentation and computer-recorded data comprising or included in the Adobe Information. Except for the rights expressly enumerated herein, OEM is not granted any rights to patents, copyrights, trade secrets, trade names, trademarks, or any other rights, franchises or licenses with respect to the Adobe Information. 4.2 Adobe Trade Secrets. OEM agrees that the Demonstration Program(s) in ------------------- source code form and those techniques, algorithms, and processes contained in the Adobe Software, Other Adobe-Supplied Software, Coded Font Programs and Demonstration program(s) and the information contained in the Template which have been developed, acquired or licensed by Adobe, or any modification or extraction thereof, constitute trade secrets of Adobe or its suppliers, and will be used by OEM only in accordance with the terms of this Agreement. In [*] Confidential Treatment Requested. -12- addition to the specific measures required hereunder, OEM shall take all measures reasonably required to protect the proprietary rights of Adobe and its suppliers in the Adobe Information. Failure to protect the proprietary rights of Adobe and its suppliers in the Adobe Information, as required by this Agreement, will be considered a material breach of this Agreement. 4.3 Unauthorized Distribution or Copying. OEM agrees that (a) ------------------------------------ distribution, copying, duplicating or otherwise reproducing all or any part of the Adobe Software, Other Adobe-Supplied Software, Demonstration Program(s), Coded Font Programs or Documentation (except as expressly permitted by this Agreement), (b) distributing copies of all or any portion of the Adobe Software, Other Adobe-Supplied Software, Demonstration Program(s) or Coded Font Programs other than in the form of royalty-bearing End User products, or (c) distributing the CPSI Application Object for use on other than a Computer System, will be considered a material breach of this Agreement. 4.4 No Modifications. OEM agrees that it shall not make any ---------------- modifications of definitions in the PostScript language as specified in the Documentation by altering or extending the function of the Adobe Software; however, should OEM wish to add custom PostScript operators, OEM must define them in a separate custom dictionary included with the CPSI Application and provide documentation that clearly specifies that these operators are not part of the PostScript language as specified in the Documentation. 5. TERM OF AGREEMENT. ----------------- The initial term of this Agreement is for [*] from the effective date of this Agreement, unless earlier terminated as provided in this Agreement. Thereafter, this Agreement may be renewed on its anniversary dates, at the option of either party, subject to the written agreement of the other party, provided that [*]. 6. EXPORT. OEM shall not knowingly, without prior authorization, if required, of ------ the Office of Export Administration ("OEA"), export or re-export (as defined in Section 779.1(b)-(c) of the Export Administration Regulations - and any amendments thereto) to Afghanistan, the People's Republic of China or to any Group Q, S, W, Y or Z country specified in Supplement No. 1 to Section 779 of the Regulations as amended from time to time (i) any Adobe Information or (ii) the immediate product (including processes and services) produced directly by use of any Adobe Information. The provisions of this Paragraph shall survive notwithstanding any cancellation, termination or expiration of this Agreement. -13- [*] Confidential Treatment Requested. 7. PAYMENTS. -------- 7.1 CPSI Application Payments. OEM shall pay Adobe in U.S. Dollars the ------------------------- software license fees and per copy royalties set forth in each CPSI Application Appendix hereto. OEM shall pay Adobe a separate fee for each copy of the CPSI Application Object which OEM distributes or uses internally. 7.2 Coded Font Program Royalties. OEM shall also pay to Adobe the ---------------------------- royalties for the Roman Initial Installation Coded Font Programs, Roman if an Additional Coded Font Programs, if any, and Other Coded Font Programs, if any, distributed with each CPSI Application Object, in the amount specified in the applicable CPSI Application Appendix hereto. 7.3 Other Payments. Certain other payments to Adobe, including but not -------------- limited to advances against royalties, will be designated in the specific CPSI Application Appendix. Advances against royalties for a specified CPSI Application are recoupable only against royalties for that CPSI Application during the eighteen (18) month period following Adobe's test and acceptance of the CPSI Application Object for that Licensed System, as defined in the applicable CPSI Application Appendix. 7.4 Taxes. In addition to any other payments due under this Agreement, ----- OEM agrees to pay, and to indemnify and hold Adobe harmless from, any sales, use, excise, import or export, value added or similar tax or duty not based on Adobe's net income, including any penalties and interest, as well as any costs associated with the collection or withholding thereof, and all governmental permit fees, license fees and customs and similar fees levied upon the delivery by Adobe of the Adobe Software and Coded Font Programs or other deliverables to OEM hereunder, which Adobe may incur in respect of this Agreement. If a resale certificate or other certificate or document of exemption is required in order to exempt all or any of the Adobe Software, Coded Font Programs or other deliverables from any such tax liability, OEM will promptly furnish it to Adobe. 7.5 Payment of Royalties. All royalties due in accordance with the terms -------------------- of this Agreement shall be paid in U.S. Dollars within 30 days after the end of each calendar quarter. With each royalty payment OEM shall include a written summary, broken out by month of sale and country categories (U.S., Canada, Europe, Far East, Rest of World), of (a) the number of copies and types of CPSI Application Object distributed or used internally by OEM during the quarter; (b) the number of copies and types of Roman and Other Coded Font Programs, by Typefaces, bundled with the CPSI Application Object for use as a part of a Licensed System and licensed to End Users or used internally by OEM during the quarter; and (c) any other information which may be required to determine whether OEM is paying the correct royalty amount hereunder. Copies of CPSI Application Object which are returned for which refunds are made or a credit is issued by OEM shall be credited by OEM against royalties due to Adobe for such copies of USI Application -14- Object; provided however, that in the event OEM provided a partial refund (or credit) of the price of a returned CPSI Application, OEM shall be entitled to obtain a corresponding partial credit against royalties due for such CPSI Application Object. At Adobe's request, OEM shall orally advise Adobe each month of its estimate of the number of copies of the CPSI Application Object and Coded Font Programs shipped or used internally by OEM during the previous month and the royalties accrued thereby. Such oral communication shall be subject to adjustment by OEM at the end of each accounting period. 7.6 When Royalties Are Earned. All royalties due hereunder be earned on ------------------------- the date OEM ships the CPSI Application Object to its customer, except that in the event of shipment of CPSI Application Object as between OEM and its Subsidiary or as between such Subsidiaries for resale, such royalties shall be earned when the CPSI Application Object is first shipped to a customer other than OEM and any such Subsidiaries. 7.7 Right of Audit. OEM shall maintain a complete, dear, accurate record -------------- of: (a) the number of copies and types of CPSI Application Object distributed or used internally by OEM during the quarter; (b) the number of copies and types of Roman and Other Coded Font Programs, by Typefaces, bundled with the CPSI Application Object for use as part of a Licensed System and licensed to End Users or used internally by OEM during the quarter; and (c) any other information which may be required to determine whether OEM is paying the correct royalty amount hereunder. To ensure compliance with the terms of this Agreement, Adobe shall have the right to conduct an inspection and audit of all the relevant accounting and sales books and records of OEM during regular business hours at OEM's offices and in such a manner as not to interfere with OEM's normal business activities. In no event shall audits be made hereunder more frequently than every six (6) months. If such inspections should disclose any underreporting, OEM shall promptly pay Adobe such amount, together with interest thereon at the rate of 1 1/2% per month or the highest interest rate allowed by law, whichever is lower, from the date on which such amount became due. 7.8 ITC Typefaces. Distribution of Coded Font Programs for any ------------- International Typeface Corporation ("IM") Typefaces licensed from Adobe for any Licensed System that includes a marking engine with maximum resolution exceeding 900 dots per inch or that outputs onto any silver based substrate (eg. photographic medium) other than a 35 millimeter transparency ("High Resolution Output Device") requires execution of a written agreement between OEM and ITC which sets forth the royalties, if any, due directly to ITC from OEM (the "ITC License Agreement"). These royalties to ITC are in addition to the royalties due to Adobe for the distribution of Coded Font Programs for ITC Typefaces under the terms of this or any other Agreement between Adobe and OEM. If OEM wants to implement the Coded Font Programs for ITC Typefaces licensed from Adobe on any High Resolution Output Device, OEM agrees to provide Adobe a written certification that -15- OEM has executed an ITC License Agreement within sixty (60) days of execution of a CPSI Application Appendix covering such a High Resolution Output Device. 8. OEM SUPPORT. OEM will have the sole responsibility for supporting End Users ----------- and will provide End Users with reasonable end user documentation, warranty service, and telephone support or other electronic support for the use of the Adobe Software and Coded Font Programs included as part of a CPSI Application. 9. COPYRIGHT AND OTHER NOTICES. --------------------------- 9.1 Copyright Notices. In order to protect Adobe's copyright and other ----------------- ownership interests, OEM agrees that, as a condition of its rights hereunder, it will cause to be preserved in each copy of all or any portion of the Adobe Software, Other Adobe-Supplied Software, Demonstration Program(s), Coded Font Programs and any Documentation reproduced by it hereunder, the same proprietary notices which appear on or in the Adobe Software, Other Adobe-Supplied Software, Demonstration Program(s), Coded Font Programs and Documentation delivered by Adobe to OEM hereunder or such other proprietary notices as Adobe may reasonably require from time to time. OEM agrees that valid copyright notices for the Adobe Software and Coded Font Programs will appear on the media. In addition, a valid Adobe copyright notice in the following format, or such other format as Adobe specifies by written notice to OEM, shall be displayed on the single user screen of the Computer System, or in some other manner consented to in writing by Adobe, when the CPSI Application Object is first invoked during an End User session: (a) the name of the program, (b) the word "Copyright" and the circled-c symbol(C), (c) the date of first publication of the Adobe Software, and (d) the name of the copyright owner and the words "All Rights Reserved". 9.2 Restricted Rights. OEM will (a) identify as developed with private ----------------- industry funds the CPSI Application Object, Other Adobe-Supplied Software, Coded Font Programs and related documentation in all proposals and agreements with the United States Government or any contractor therefor; and (b) legend or mark the CPSI Application Object, Other Adobe-Supplied Software, Coded Font Programs and related documentation provided pursuant to any agreement with the United States Government or any contractor therefor, as follows: (a) For acquisition by or on behalf of civilian agencies, as necessary to obtain protection substantially equivalent to that afforded to -16- commercial computer software and related documentation developed at private expense and which is existing computer software no part of which was developed with government funds and provided with Restricted Rights in accordance with subparagraphs (a) through (d) of the "Commercial Computer Software Restricted Rights" clause at section 52.227-19 of the Federal Acquisition Regulations and its successors; (b) For acquisition by or on behalf of units of the Department of Defense ("DoD") as necessary to obtain protection substantially equivalent to that afforded to commercial computer software and related documentation developed at private expense and provided with Restricted Rights as defined in DoD FAR Supplement 48 C.F.R. 252.227-7013(c)(1)(ii) and its successors in effect for all solicitations and resulting contracts issued on or after May 18, 1987. 9.3 Foreign Government Agreements. OEM will take all reasonable steps in ----------------------------- making proposals and agreements with foreign governments other than the United States which involve the CPSI Application Object, Other Adobe-Supplied Software, Coded Font Programs and related Documentation to ensure that Adobe's proprietary rights in the Adobe Software, Other Adobe-Supplied Software, Coded Font Programs and related Documentation receive the maximum protection available from such foreign government for commercial computer software and related documentation developed at private expense. 10. LICENSE TO USE ADOBE TRADEMARKS: NONGENERIC ADVERTISING. -------------------------------------------- ----------- 10.1 Trademark License. Adobe hereby grants to OEM a nonexclusive, ----------------- limited license to use the Adobe Trademarks on the CPSI Application Object and in OEM's advertising and printed materials for the CPSI Application Object and Coded Font Programs, provided that OEM displays the following notices of trademark status adjacent to and with the first or most prominent use of the Adobe Trademark in each piece of advertising or printed materials in which such Adobe Trademark appears and includes the respective legends adjacent to or as a footnote to the Adobe Trademarks as follows: (i) "Adobe(TM)": "Adobe is the trademark of Adobe Systems Incorporated which may be registered in certain jurisdictions"; (ii) "PostScript(TM)": "PostScript is the trademark of Adobe Systems Incorporated which may be registered in certain jurisdictions; and (iii) such other symbols and notices as may be prescribed by Adobe from time to time. OEM agrees not to use any other trademark or service mark in close proximity to any of the Adobe Trademarks or combine the marks so as to effectively -17- create a unitary composite mark without the prior written approval of Adobe. OEM agrees not to use any other name or trademarks for the Coded Font Programs except for the name or trademarks used by the Trademark Owner as set forth in Exhibit C ("Coded Font Programs") hereto, or in a CPSI Application --------- Appendix OEM will comply with all of the terms in this Paragraph 10.1 in its -------------- catalogs, advertising, packaging, and promotional materials relating to or including Coded Font Programs. 10.2 Ownership of Trademarks. OEM acknowledges the ownership of the ----------------------- Adobe Trademarks and Trademarks in Adobe and Its suppliers, agrees that it will do nothing inconsistent with such ownership, agrees to use reasonable effort to preserve Adobe's and its suppliers' rights in the Adobe Trademarks and Trademarks, and that all uses of the Adobe Trademarks and the Trademarks by OEM shall inure to the benefit of and be on behalf of Adobe and its suppliers. OEM acknowledges that the Trademarks and Adobe Trademarks are valid under applicable law and that OEM's utilization of the Trademarks and Adobe Trademarks will not create any right, title or interest in or to such Trademarks or Adobe Trademarks. OEM acknowledges the respective exclusive rights of Adobe and the Trademark Owners (as defined below) to use of the Adobe Trademarks and Trademarks and agrees not to do anything contesting or impairing the trademark rights of Adobe or its suppliers. Any use of the Trademarks must identify the applicable "Trademark Owner" set forth in Exhibit C ("Coded Font Programs") --------- hereto, or the applicable CPSI Application Appendix, as the owner of such Trademarks. OEM agrees to notify or require notification of sublicensees who receive Coded Font Programs that (i) Trademarks can only be used to identify printed output produced by the Coded Font Programs, and (ii) the Trademarks are the property of the Trademark Owners. OEM will maintain a high quality standard in producing copies of the CPSI Application Object, Coded Font Programs and Typefaces. At the request of Adobe, OEM must supply samples of any Typeface identified by a Trademark. 10.3 Quality Standards. OEM agrees that the nature and quality of the ----------------- Licensed System, CPSI Application Object, Coded Font Programs and any other products or services it supplies in connection with its use of the Adobe Trademarks shall conform to the standards set by Adobe. OEM agrees to cooperate with Adobe in facilitating Adobe's monitoring and control of the nature and quality of such OEM products and services and to supply Adobe with specimens of use of the Trademarks and Adobe Trademarks upon request. If, at any time, Adobe determines that the OEM has not met or is not meeting the Adobe quality standards, Adobe shall so advise OEM and, upon OEMS receipt of such notice by any means, OEM shall have sixty (60) days to improve the quality to the standard previously approved by Adobe. OEM shall comply with all applicable laws, Regulations and customs and obtain all appropriate government approvals pertaining to use of trademarks and trade names and to the sublicensing distribution and advertising of the CPSI Application Object, Coded Font Programs and Documentation hereunder. -18- 10.4 Infringement Proceedings. OEM agrees to notify Adobe of any ------------------------ unauthorized use of the trademarks or Adobe Trademarks by others promptly as it comes to OEM's attention. Adobe shall have the sole right and discretion to bring infringement or unfair competition proceedings involving the Trademarks or Adobe Trademarks. 10.5 OEM's Use of Trademarks. OEM agrees that it will include the Adobe ----------------------- Trademarks on all copies of the CPSI Application Object and in any advertising or printed materials concerning the CPSI Application Object and that it will use the applicable Trademarks and Adobe Trademarks on all copies, advertisements, brochures, manuals or other appropriate uses made in the promotion, distribution or use of the CPSI Application Object Coded Font Programs and Licensed Systems. OEM shall make specific reference to PostScript(TM) software from Adobe in any advertisement which refers to the CPSI Application. 10.6 Trademark Registrations. OEM, at Adobe's request, shall (i) ----------------------- promptly provide Adobe with any specimens, (ii) execute all applications for trademark registrations, assignments, or other applicable documents, and (iii) perform any other act reasonably necessary for Adobe or any Trademark Owner to secure or maintain any and all Adobe Trademark or Trademark rights in any country in which OEM is marketing the CPSI Application Object, Coded Font Programs and licensed Systems. 11. WARRANTIES. ---------- 11.1 Infringement. ------------ (a) By Adobe. Adobe agrees to defend and otherwise hold OEM -------- harmless from all costs, damages and reasonable attorneys' fees resulting from claims by third parties that uses permitted hereunder of the Adobe Software infringe any U.S. patents or U.S. copyrights, or the use of the Adobe Trademarks "Adobe" and "PostScript" (as applied to the Adobe Software) infringes any US. trademarks, provided that OEM gives Adobe prompt written notice of any such claim, tenders to Adobe the defense or settlement of such a claim, at Adobe's expense, and cooperates with Adobe, at Adobe's expense, in defending or settling such claim. If Adobe receives notice of an alleged infringement or if OEM's use of the Adobe Software shall be prevented by permanent injunction, Adobe may, at its sole option and expense, procure for OEM the right to continued use of the Adobe Software or the Adobe U.S. trademarks "Adobe" and "PostScript" as provided hereunder, modify the Adobe Software so that it no longer infringes, replace the Adobe Software with computer software of equal or superior functional capability, or in the case of trademark infringement, instruct OEM to use an alternative trademark. THE RIGHTS GRANTED TO OEM UNDER THIS PARAGRAPH SHALL BE OEM'S SOLE AND EXCLUSIVE REMEDY AND ADOBE'S SOLE OBLIGATION FOR ANY ALLEGED INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADEMARK, TRADE SECRET OR OTHER PROPRIETARY RIGHT. ADOBE WILL HAVE NO -19- LIABILITY TO OEM IF ANY ALLEGED INFRINGEMENTS OR CLAIM THEREOF IS BASED UPON (A) THE USE OF THE ADOBE SOFTWARE IN CONNECTION OR IN COMBINATION WITH EQUIPMENT, DEVICES, OR SOFTWARE NOT DELIVERED BY ADOBE (IF SUCH INFRINGEMENT OR CLAIM COULD HAVE BEEN AVOIDED BY THE USE OF THE ADOBE SOFTWARE WITH OTHER EQUIPMENT, DEVICES OR SOFTWARE), (B) THE USE OF ANY ADOBE SOFTWARE OTHER THAN AS PERMITTED UNDER THIS AGREEMENT OR IN A MANNER FOR WHICH IT WAS NOT INTENDED OR USE OF MOST CURRENT RELEASE OF THE ADOBE SOFTWARE (AND SUCH CLAIM WOULD HAVE BEEN PREVENTED BY THE USE OF SUCH RELEASE) OR (C) ANY MODIFICATIONS MADE TO THE ADOBE SOFTWARE BY OEM OR AMY THIRD PARTY (IF SUCH CLAIM WOULD HAVE BEEN AVOIDED BY THE USE OF THE UNMODIFIED ADOBE SOFTWARE). (b) By OEM. OEM agrees to defend and otherwise hold Adobe ------ harmless from all costs, damages and reasonable attorneys, fees resulting from all claims by third parties arising from the use, manufacture and distribution of the CPSI Application Object by OEM and its direct and indirect customers in any country, worldwide, provided that Adobe gives OEM prompt written notice of any such claim, tenders to OEM the defense or settlement of any such claim, at OEM's expense, and cooperates with OEM, at OEM's expense, in defending or settling such claim. OEM WILL HAVE NO LIABILITY TO ADOBE IF ANY ALLEGED PATENT OR COPYRIGHT INFRINGEMENTS OR CLAIM THEREOF ARISE SOLELY AS A RESULT OF THE CONTENT OF THE ADOBE SOFTWARE. 11.2 Adobe Software Warranty. If (a) the Adobe Software for a CPSI ----------------------- Application licensed hereunder fails to perform substantially in accordance with the Documentation in the Development Environment (as specified in the CPSI Application Appendix for such CPSI Application) from the date on which Adobe delivers the Adobe Software to OEM and ending one (1) year thereafter (the "Warranty Period"); (b) such failure is reproducible; and (c) such failure is reported to Adobe by OEM during the Warranty Period, then Adobe shall, at its expense, provide a workaround for such failure or, at Adobe's option, provide OEM with an updated version of the Adobe Software which does not cause such failure. This warranty shall not apply to any software modified by OEM or any third party, or to any failure caused by hardware or software not provided by Adobe. If OEM reports a failure to Adobe, and Adobe reasonably determines that such failure was not caused by the Adobe Software, then Adobe shall have no further obligations with respect to such report, and OEM agrees to pay Adobe's reasonable costs in making such determination. 11.3 Limitations on Warranties. The foregoing warranties by Adobe are ------------------------- made only to OEM and OEM shall be solely responsible for any warranty to, or claims by, its distributors or end user customers concerning the Adobe Software. THE FOREGOING STATES ADOBE'S SOLE AND EXCLUSIVE OBLIGATION TO OEM FOR BREACH OF WARRANTY. EXCEPT FOR THE EXPRESS -20- WARRANTIES STATED IN THIS AGREEMENT, ADOBE MAKES NO ADDITIONAL WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO ANY MATTER WHATSOEVER. IN PARTICULAR, ANY AND ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, ADOBE EXPRESSLY EXCLUDES ANY AND ALL WARRANTIES OF NONINFRINGEMENT. THIS IS A LIMITED WARRANTY AND IS THE ONLY WARRANTY MADE BY ADOBE. OEM SHALL NOT HAVE THE RIGHT TO MAKE OR PASS ON, AND SHALL TAKE ALL MEASURES NECESSARY TO ENSURE THAT NEITHER IT NOR ANY OF ITS AGENTS OR EMPLOYEES SHALL MAKE OR PASS ON ANY SUCH WARRANTY OR REPRESENTATION ON BEHALF OF ADOBE TO ANY CUSTOMER, END USER OR THIRD PARTY. 12. INTERNAL IMPROVEMENTS; CONTINUING SUPPORT. ----------------------------------------- 12.1 Internal Improvements. Adobe will notify OEM when Internal --------------------- Improvements to the Adobe Software become available, and thereafter, if it receives a written request from OEM, it will provide OEM with such Internal Improvements without charge. OEM may distribute such Internal Improvements to licensed End Users who have paid the applicable per copy royalties for use with previously distributed copies of the CPSI Application Object without payment of additional royalties. Such Internal Improvements do not include modifications, enhancements, or other software products for which Adobe charges separately or which Adobe provides only to customers receiving Continuing Support services. 12.2 Continuing Support. Following expiration of the Warranty Period, ------------------ Adobe will provide continuing support services to OEM in accordance with its standard Continuing Support Agreement, once executed by the parties, at its then current OEM rate for such services. OEM agrees that all contact regarding warranty and Continuing Support services shall be handled through a designated person from OEM who shall direct requests for Continuing Support services through Adobe's designated technical contact. For purposes of the Continuing Support Agreement, "Licensed System" shall mean the Adobe Software and Coded Font Programs. 13. CANCELLATION. ------------ 13.1 Cancellation by Adobe for Cause. If any material breach of this ------------------------------- Agreement by OEM continues after thirty (30) days written notice of the breach by Adobe to OEM, Adobe may terminate this Agreement on written notice to OEM. 13.2 Cancellation by OEM for Cause. If any material breach under this ----------------------------- Agreement by Adobe continues after thirty (30) days written notice of the breach by OEM to Adobe, OEM may seek any damages arising under this Agreement, and (a) continue this Agreement in full force and effect, or (b) terminate this Agreement on written notice to Adobe. -21- 13.3 Bankruptcy. In addition to any material breach of this Agreement, ---------- the application for, or adjudication in, bankruptcy by OEM, or dissolution of OEM shall terminate this Agreement. 13.4 Obligations on Cancellation, Termination or Expiration. Upon ------------------------------------------------------ cancellation, termination, or expiration of this Agreement. 13.4.1 Safeguarding of Trade Secrets. OEM shall continue to be ----------------------------- responsible for safeguarding the trade secrets and proprietary rights of Adobe in accordance with the terms of this Agreement after such cancellation, termination or expiration. 13.4.2 Return of Proprietary Information. Subject to Paragraph --------------------------------- --------- 13.4.6 ("Continued Support") below, OEM shall erase, destroy or return to Adobe - ------ all of Adobe's proprietary information in its possession upon Adobe's request, OEM shall warrant in writing its return or destruction of Adobe's proprietary information within thirty (30) days of cancellation, termination, or expiration. 13.4.3 OEM's Return of Adobe Softwares. Subject to Paragraph 13.4.6 ------------------------------- ---------------- ("Continued Support") below, OEM shall immediately discontinue use and distribution of, and return or destroy all copies of, the CPSI Application and Coded Font Programs in its possession (including copies placed in any storage device under OEM's control). OEM shall not retain any whole or partial copies of the Demonstration Program(s) in source or object code form. 13.4.4 End Users. End Users shall be permitted the continued and --------- uninterrupted use of the CPSI Application Object and Coded Font Programs for the balance of the term of their End User agreements, as specified in such agreements, provided that and so long as the End Users are not in default of their End User agreements. 13.4.5 Default by End Users. OEM's rights upon default of an End -------------------- User relating to the CPSI Application Object and Coded Font Programs, as specified in the End User agreement, shall automatically be assigned to Adobe to the extent relevant to the enforcement by Adobe of the proprietary rights of Adobe and/or its suppliers in the Adobe Software and Coded Font Programs. 13.4.6 Continued Support. OEM shall have the right to retain five ----------------- (5) copies of the CPSI Application Object and Coded Font Programs and use such CPSI Application Object and Coded Font Programs to the extent required for support and maintenance purposes but OEM shall have no right to sublicense or otherwise distribute the CPSI Application Object or Coded Font Programs or any other rights with respect to such software except as specifically set forth in this Paragraph 13.4.6. ---------------- -22- 13.4.7 Payment. Unless OEM has terminated this Agreement for cause, ------- the payment date of all monies due Adobe shall automatically be accelerated so that they shall become due and payable on the effective date of termination, even if longer terms had been provided previously. 14. LIMITATION OF LIABILITY. NEITHER ADOBE NOR ANY OF ITS OFFICERS, DIRECTORS, ----------------------- EMPLOYEES, AFFILIATES, OR AGENTS SHALL BE LIABLE TO OEM OR TO ANY THIRD PARTY FOR ANY LOSS OF USE, LOSS OF GOODWILL, INTERRUPTION OF BUSINESS, OR FOR INDIRECT INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST REVENUES OR PROFITS) OR SIMILAR DAMAGES, WHETHER BASED ON TORT(INCLUDING WITHOUT LIMITATION, NEGLIGENCE OR STRICT LIABILITY), CONTRACT, OR OTHER LEGAL OR EQUITABLE GROUNDS, EVEN IF ADOBE HAS BEEN ADVISED OR HAD REASON TO KNOW OF THE POSSIBILITY OF SUCH DAMAGES AND EVEN IN THE EVENT OF FAILURE OF EXCLUSIVE REMEDIES. THE FOREGOING LIMITATION OF LIABILITY IS INDEPENDENT OF ANY EXCLUSIVE REMEDIES FOR A BREACH OF WARRANTY SET FORTH IN THIS AGREEMENT. 15. GENERAL. ------- 15.1 Governing Law. This Agreement shall be governed in all respects by ------------- the laws of the United States of America and the State of California as such laws are applied to agreements entered into and to be performed entirely within California between California residents. The parties agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement. 15.2 Notices. All notices or reports permitted or required under this ------- Agreement shall be in writing and shall be delivered by personal delivery, telegram, telex, telecopier or facsimile transmission or by registered mail, return receipt requested, and shall be deemed given upon personal delivery or five (5) days after deposit in the mail or upon acknowledgment of receipt of electronic transmission. Notices shall be sent to: (i) the contract representative designated in the specific CPSI Application Appendix if the notice or report relates to one or more specific CPSI Applications and (ii) a copy to the signatory of this Agreement at the address set forth at the end of this Agreement or such other address as either party may specify in writing as well as a copy to the parties General Counsel at the same address. Notices shall be effective upon receipt, unless otherwise specified in such notice or in this Agreement. 15.3 Injunctive Relief. It is understood and agreed that, ----------------- notwithstanding any other provisions of this Agreement, breach of the provisions of this Agreement by OEM will cause Adobe irreparable damage for which recovery of money damages would be inadequate, and that Adobe shall therefore be entitled to obtain timely injunctive relief in a court of competent jurisdiction to protect -23- Adobe's rights under this Agreement in addition to any and all remedies available at law. Because of the unique and proprietary nature of the Adobe Software, OEM acknowledges that in the event OEM or any OEM customer continues to distribute the CPSI Application Object, or any portion thereof, after its right to do so has terminated or expired, Adobe shall be entitled to active or other equitable relief, including without limitation, an order directing that any copies of the CPSI Application Object, or any portion thereof, which OEM or any direct or indirect customer of OEM attempts to import into the U.S. or any other country or territory, be seized, impounded and destroyed by Customs officials in order to prevent such importation. 15.4 No Agency. Nothing contained herein shall be construed as creating --------- any agency, partnership, or other form of joint enterprise between the parties. 15.5 Force Majeure. Neither party shall be liable hereunder by reason of ------------- any failure or delay in the performance of its obligations hereunder (except for the payment of money) on account of strikes, shortages, riots, insurrection, fires, flood, storm, explosions, acts of God, war, governmental action, labor conditions, earthquakes, material shortages or any other cause which is beyond the reasonable control of such party. 15.6 Waiver. The failure of either party to require performance by the ------ other party of any provision hereof shall not affect the full right to require such performance at any time thereafter; nor shall the waiver by either party of a breach of any provision hereof be taken or held to be a waiver of the provision itself. 15.7 Severability. In the event that any provision of this Agreement ------------ shall be unenforceable or invalid under any applicable law or be so held by applicable court decision, such unenforceability or invalidity shall not render Agreement unenforceable or invalid as a whole, and, in such event, such provision shall be changed and interpreted so as to best accomplish the objectives of such unenforceable or invalid provision within the limits of applicable law or applicable court decisions. 15.8 Headings. The paragraph headings appearing in this Agreement are -------- inserted only as a matter of convenience and in no way define, limit, construe or describe the scope or extent of such paragraph, or in any way affect this Agreement. 15.9 Confidentiality of Agreement. Neither party shall make any public ---------------------------- announcement of, or otherwise disclose, the existence of or matters set forth in this Agreement except as mutually agreed in writing or as required by disclosure obligations arising under law. 15.10 No Patent License. Nothing contained herein shall be construed as ----------------- conferring by implication, estoppel or otherwise any license or right under any -24- United States or foreign patent, issued, assigned or licensed to Adobe, whether existing or later issued, except to the extent specifically required to perform the obligations and obtain the benefits expressly set forth in this agreement. Adobe agrees that OEM and OEM's customers shall have the right to exercise all rights which Adobe expressly grants to OEM or expressly authorizes OEM to grant to such customers herein, notwithstanding the existence or later issuance to Adobe of any United States or foreign patent. 15.11 Assignment. Neither this Agreement nor any rights of OEM hereunder ---------- may be assigned by OEM in whole or in part without the prior written approval of Adobe. For the purposes of this Paragraph, a change in the persons or entities who control 50% or more of the equity securities or voting interest of OEM shall be considered an assignment of OEM's rights. Adobe's rights and obligations, in whole or in part, under this Agreement may be assigned by Adobe. Adobe may exercise full transfer and assignment rights in any manner at Adobe's discretion and specifically may sell, pledge or otherwise transfer its right to receive royalties under this Agreement. 15.12 Attorneys' Fees. In the event any proceeding or lawsuit is brought --------------- by Adobe, its suppliers or OEM in connection with this Agreement, the prevailing party in such proceeding shall be entitled to receive its costs, expert witness fees and reasonable attorneys' fees, including costs and fees on appeal. 15.13 Full Power. Each party warrants to the other that it has fun power ---------- to enter into and perform this Agreement, and the person signing this Agreement on behalf of the respective party has been duly authorized and empowered to enter into this Agreement. Each party further acknowledges that it has read this Agreement, understands it and agrees to be bound by it. 15.14 Forum. All disputes arising under this Agreement may be brought in ----- Superior Court of the State of California in Santa Clara County or the Federal District Court of San Jose as permitted by law. The Superior Court of Santa Cara County and the Federal District Court of San Jose shall each have nonexclusive jurisdiction over disputes under this Agreement. OEM and Adobe consent to personal jurisdiction of the above courts; provided, that the foregoing shall not be construed as divesting any other court of such jurisdiction as such court may otherwise have over such disputes. 15.15 Entire Agreement. This Agreement, the Exhibits hereto, and any ---------------- executed CPSI Application Appendices constitute the entire agreement between the parties with respect to the subject matter hereof. This Agreement supersedes, and the terms of this Agreement govern, any prior or collateral agreements between the parties with respect to the subject matter hereof, whether oral or written. This Agreement may only be changed by mutual agreement of authorized representatives of the parties in writing. -25- IN WITNESS OF, the parties hereto have duly executed this Agreement by their respective duly authorized officers to be effective as Of the date first written above. ADOBE: OEM: ADOBE SYSTEMS INCORPORATED SUPERMAC TECHNOLOGY By:/s/ Steve MacDonald By:/s/ Louis J. Doctor ----------------------------------- ---------------------------------- Print Print Name: Steve MacDonald Name: Louis J. Doctor --------------------------------- -------------------------------- Title: V.P. SVS Products Div. Title: V.P. Business Development -------------------------------- ------------------------------- Date: September 18, 1992 Date: 9/17/92 --------------------------------- -------------------------------- Address: 1585 Charleston Road Address: 485 Potrero Avenue P.O. Box 7900 Sunnyvale, CA 94076 Mountain View, CA 94039-7900 -26- EXHIBIT A --------- Description of Adobe Software Configurable PostScript Interpreter: Interpreter for Adobe Systems Incorporated PostScript(R) page description language which takes PostScript language programs as input and generates raster images in memory. -27- EXHIBIT B --------- Adobe Trademarks
- -------------------------------------------------------------------------------- TRADEMARK TRADEMARK ATTRIBUTION --------- --------------------- Adobe(TM) . . . is a trademark of Adobe Systems Incorporated which may be registered in certain jurisdictions. The Adobe Logo . . . is a trademark of Adobe Systems [LOGO](TM) Incorporated which may be registered in certain jurisdictions. PostScript(TM) . . . is a trademark of Adobe Systems Incorporated which may be registered in certain jurisdictions. The PostScript Logo . . . is a trademark of Adobe Systems [LOGO](TM) Incorporated which may be registered in certain jurisdictions. - --------------------------------------------------------------------------------
-28- EXHIBIT C --------- Coded Font Programs A. The following Roman Initial Installation Coded Font programs shall be made available on all licensed Systems:
IDENTIFYING TRADEMARK TYPEFACE TRADEMARK OWNER - --------------- ---------- ----------------- Helvetica Linotype-Hell AG and/or it subsidiaries Helvetica Bold Linotype-Hell AG and/or it subsidiaries Helvetica Oblique Linotype-Hell AG and/or it subsidiaries Helvetica Bold Oblique Linotype-Hell AG and/or it subsidiaries Times Roman Linotype-Hell AG and/or it subsidiaries Times Bold Linotype-Hell AG and/or it subsidiaries Times Italic Linotype-Hell AG and/or it subsidiaries Times Bold Italic Linotype-Hell AG and/or it subsidiaries Symbol (Public Domain) Courier (Public Domain) Courier Bold (Public Domain) Courier Oblique (Public Domain) Courier Bold Oblique (Public Domain)
-29- EXHIBIT D --------- REPRODUCTION LOCATIONS OEM's reproduction of the CPSI Application Object and Coded Font Programs shall be restricted to the following locations:
Name of Reproduction Site: Address of Reproduction Site: ------------------------- ----------------------------- SuperMac Technology, Inc. 485 Potrero Avenue Sunnyvale, CA 94086
-30- EXHIBIT E --------- CPSI Application Object and Coded Font Programs Minimum Terms of End User Agreement Notice to User 1. Licensor grants to Licensee a nonexclusive sublicense, subject to Paragraph 7 below and the other provisions hereof (a) to use the CPSI - ----------- Application Object ("Software") solely for Licensee's own internal business purposes in a single computer, associated display with a resolution of less than one hundred fifty dots per inch, and an associated printer which is directly connected to the computer (the "Computer System"); (b) to use the digitally- encoded machine-readable outline programs ("Font Programs") provided by Licensor in a special encrypted format ("Coded Font Programs") and identified herewith to reproduce and display designs, styles, weights, and versions of letters, numerals, characters and symbols ("Typefaces") solely for Licensee's own customary business or personal purposes on the Computer System; and (c) to use the trademarks used by Licensor to identify the Coded Font Programs and Typefaces reproduced therefrom ("Trademarks"). Licensee may assign its rights under this Agreement to a licensee of all of Licensee's right, title and interest to such Software and Coded Font Programs provided the licensee agrees to be bound by all of the terms and conditions of this Agreement. 2. Licensee acknowledges that the Software, Coded Font Programs, Typefaces and Trademarks are proprietary to Licensor and its suppliers. Licensee agrees to hold the Software and Coded Font Programs in confidence, disclosing the Software and Coded Font Programs only to authorized employees having a need to use the Software and Coded Font Programs as permitted by this Agreement and to take all reasonable precautions to prevent disclosure to other parties. 3. Licensee will not make or have made, or permit to be made, any copies of the Software or Coded Font Programs or portions thereof, except as necessary for its use with a single Computer System hereunder. Licensee agrees that any such copies shall contain the same proprietary notices which appear on or in the Software or the Coded Font Program. 4. Except as stated above, this Agreement does not grant Licensee any rights to patents, copyrights, trade secrets, trade names, trademarks (whether registered or unregistered), or any other rights, franchises, or licenses in respect of the Software, Coded Font Programs, Typefaces, or Trademarks. Licensee will not adapt or use any trademark or trade name which is likely to be similar to or confusing with that of licensor or any of its suppliers or take any other action which impairs or reduces the trademark rights of licensor or its suppliers. The Trademarks can only be used to identify printed output produced by the Coded Font Programs. At the reasonable request of licensor, Licensee must supply samples of any Typeface identified by a Trademark. -31- 5. Licensee agrees that it will not attempt to alter, disassemble, decrypt or reverse engineer the Software or Coded Font Programs. 6. Licensee acknowledges that the laws and Regulations of the United States restrict the export and re-export of commodities and technical data of United States origin, including the Software or Coded Font Programs. Licensee agrees that it will not export or re-export the Software or Coded Font Programs in any form without the appropriate United States and foreign government licenses. Licensee agrees that its obligations pursuant to this section survive and continue after any termination or expiration of rights under this Agreement. 7. The Software licensed hereunder is intended to be used to generate screen displays on a single Computer System having a screen resolution of less than 150 dots per inch and to generate output on the associated printer. Licensee agrees not to make use of the Software, directly or indirectly, (i) to generate bitmap images on a screen display with a resolution of 150 dots per inch or greater, (ii) to generate Typefaces for use other than with the Computer System, or (iii) to generate printed output on other than an output device that Licensor has designated to be approved for use with the Software on the Computer System. Any failure of License to comply with this provision is a material breach of this End User Agreement. 8. NEITHER LICENSOR NOR ANY OF ITS REPRESENTATIVES MAKES OR PASSES ON TO LICENSEE OR OTHER THIRD PARTY ANY WARRANTY OR REPRESENTATION ON BEHALF OF LICENSOR'S THIRD PARTY SUPPLIERS. 9. Licensee is hereby notified that Adobe Systems Incorporated, a California corporation located at 1585 Charleston Road, Mountain View, California 94039-7900 ("Adobe") is a third-party beneficiary to this Agreement to the extent that this Agreement contains provisions which relate to Licensee's use of the Software, the Coded Font Programs, the Typefaces and the Trademarks licensed hereby. Such provisions are made expressly for the benefit of Adobe and are enforceable by Adobe in addition to Licensor. -32- EXHIBIT F --------- Sample Form of CPSI Application Appendix APPENDIX NO. ______ EFFECTIVE AS OF _______________, 19___ TO CONFIGURABLE POSTSCRIPT(R) INTERPRETER OEM LICENSE AGREEMENT BETWEEN ADOBE SYSTEMS INCORPORATION AND _____________________________________________ Name of CPSI Application:_____________________________ This Appendix sets forth additional and different terms and conditions particular to the Licensed System described below and shall be incorporated by reference into the Configurable PostScript Interpreter OEM License Agreement ("Agreement") between _______________________ ("OEM") and Adobe Systems Incorporated ("Adobe") effective as of ________________________. Such different or additional terms are applicable only to the Licensed System described below and in no way alter the terms and conditions applicable to other Licensed Systems incorporated into the Agreement by addition of an appendix. All the terms used in this Appendix shall retain the same meaning as defined in the Agreement and such definitions are incorporated herein by reference. A. Description of CPSI Application: B. Description of Computer System: (1) One computer with operating system software described as follows: (2) One Designated Output Device from the following set: OEM may use the CPSI Application to generate output from devices other than those listed in this paragraph only within the development group and only for testing purposes within that group. New devices must be added to this Appendix by an addendum before OEM may install such devices for use with the CPSI Application outside the development group. If OEM wishes to -33- add other devices, it must first submit to Adobe a letter describing the full specification of the additional device and provide output samples of type in both small and large sizes and sampled images. Adobe may subject this additional device installed for use with the CPSI Application to quality testing, as described Paragraph 3.8.2 ("Adobe Testing") and will notify OEM within thirty --------------- (30) days or such longer period if Adobe determines, in its sole discretion, that it needs a longer period, that it accepts or rejects OEM's proposed additional device. If such additional device is accepted by Adobe as a Designated Output Device, Adobe will prepare an addendum to this Appendix and forward to OEM for execution. OEM shall authorize use of the CPSI Application to generate output only on devices that have been approved by Adobe in accordance with the provisions as described in this Paragraph. C. Licensed System: (List all the hardware and software components comprising a Licensed System.) D. Development Environment (if different from the computer and operating system described in Paragraph B above): ----------- (a) Hardware platform: (b) Software platform: E. Adobe Deliverables: (1) Adobe Software: As described in Exhibit A ("Description of -------------- --------- Adobe Software") to the Agreement and in the lst [2nd] Edition of the PostScript Language Reference Manual. See Schedule 1 ("Licensed System Functional Specification"). ---------- Adobe Software will be delivered on ____________media. (2) Demonstration Program(s): The Demonstration Program(s) will ------------------------ be in "C" language source form and will provide OEM with an example of how to use the Adobe Software described in Exhibit A ("Description of Adobe Software") to interpret --------- PostScript language programs and produce raster output. See Schedule 1 ("Licensed System Functional Specification"). The ---------- Demonstration Program(s) will be delivered with the Adobe Software. (3) Other Adobe-Supplied Software: (4) Documentation: The Documentation as described below will be ------------- delivered both in hard copy (1 copy) and in PostScript page description language format on the software distribution medium (1 file per document). -34- a. CPSI Supplement b. PostScript Language Addendum Template c. Other Documentation (5) Coded Font Programs: The Roman Initial Installation Coded ------------------- Font Programs, listed in Paragraph I will be delivered on the ----------- Adobe Software distribution medium. F. Development Schedule and Testing Expectations:
MILESTONE DESCRIPTION *SCHEDULE: ------------------------- ---------------- #(1) [*] #(2) #(3) #(4) #(5) #(6) #(7)
-35- [*] Confidential Treatment Requested. #(8) [*] #(9) #(10) #(11)
G. OEM-Loaned Equipment: Terms and conditions related to the obligations of the parties concerning OEM-Loaned Equipment are set forth in Paragraph 3.4 ("OEM-Loaned Equipment and Related Materials") ------------- of the Agreement. -36- [*] Confidential Treatment Requested. H. Software License Fee: OEM shall pay Adobe a Software License Fee of U.S. $_____ upon execution of this Appendix. I. Applicable Royalties: J. Roman Initial Installation Coded Font Program: Media: ____________________________ (as distributed by OEM). Adobe will provide the graphic characters specified in ISO 8859-1: 1987, Latin, alphabet No. 1 and symbol characters, as applicable, for the following Initial Installation Coded Font Programs as fisted in Exhibit C ("Coded Font Programs") to the Agreement: --------- Identifying Trademark Typeface Trademark Owner --------------------- -------- --------------- K. Roman Additional Coded Font Programs: Media:_____________________________ (as distributed by OEM). Adobe will provide the graphic characters specified in ISO 8859-1: 1987, Latin alphabet No. 1 and symbol characters, as applicable, for the following Roman Additional Coded Font Programs: Identifying Trademark Typeface Trademark Owner --------------------- -------- --------------- L. Testing Criteria: OEM shall test a beta release version of the CPSI Application Object, and any modified version thereof, to confirm that the licensed System performs in accordance with the testing criteria described below. M. Designated Representatives: (1) Technically qualified OEM representative to respond to information requested by Adobe: _____________________________________________________________ (2) Technically qualified Adobe representative to respond to information requested by OEM: _____________________________________________________________ -37- (3) OEM's designated representative for Continuing Support services: _____________________________________________________________ (4) Adobe Contract Representative: _____________________________________________________________ (5) OEM Contract Representative: _____________________________________________________________ IN WITNESS WHEREOF, OEM and Adobe have caused this Appendix to be executed by their duly authorized officers. ADOBE: OEM: ADOBE SYSTEMS INCORPORATED SUPERMAC TECHNOLOGY By:_____________________________ By: /s/ Louis J. Doctor ----------------------------------------- Print Print Name:___________________________ Name: Louis J. Doctor --------------------------------------- Date:___________________________ Date: Sept. 17, 1992 --------------------------------------- -38- SCHEDULE-1 ---------- Licensed System Functional Specification To be provided at a later date -39- AMENDMENT NO. 1 TO THE CONFIGURABLE POSTSCRIPT INTERPRETER OEM LICENSE AGREEMENT BETWEEN ADOBE SYSTEMS INCORPORATED AND SUPERMAC TECHNOLOGY INCORPORATED Effective Date: July 28, 1993 ------------- This Amendment No. 1 to the Configurable PostScript Interpreter OEM License Agreement effective September 18,1992 (the "Agreement") is by and between Adobe Systems Incorporated, having its place of business at 1585 Charleston Road, P.O. Box 7900, Mountain View, California, 94039-7900 ("Adobe") and SuperMac Technology, Inc., having its place of business at 215 Moffett Park Drive, Sunnyvale, CA 94089 ("OEM"). WHEREAS, Adobe has revised its procedures for quality testing a CPSI Application Object since OEM and Adobe entered into the Agreement; WHEREAS, such revised testing procedures will be mutually beneficial to Adobe and OEM by providing OEM increased responsibility in the final stages of development of a CPSI Application Object; WHEREAS, Adobe has also revised its procedures for managing the number of users of the Adobe Software at any one time; NOW, THEREFORE, the parties agree to modify and amend the Agreement to add the revised testing and use procedures as follows: 1. All references in the Agreement to [*] shall hereby refer instead to [*]. 2. All references in the Agreement to Paragraph 2.1.10 ("Protection ---------------- Mechanisms") shall hereby refer instead to Paragraph 2.1.11 ("Additional ---------------- Protection Mechanism"). 3. Paragraph 1 ("Definitions"). Paragraph 1.1 ("Adobe Information") is ----------- ------------- hereby deleted in its entirety and replaced by the following: "1.1 Adobe Information. "Adobe Information" shall mean the Adobe ----------------- Software, Other Adobe-Supplied Software, Coded Font Programs, Demonstration Program(s), PostScript Product Certification Test Suite, Typefaces, Trademarks, Documentation and the Adobe Trademarks." [*] Confidential Treatment Requested. -1- 4. Paragraph 1 ("Definitions"). Paragraph 1.10 ("Documentation") is ----------- -------------- hereby deleted in its entirety and replaced by the following: "1.10 Documentation. "Documentation" shall mean (i) the PostScript ------------- ---------- Language Reference Manual, Second Edition, as printed in English by Addison- - ----------------------------------------- Wesley, current as of April, 1991, or such other version of the PostScript Language Reference Manual as specified in a CPSI Application Appendix, (ii) the printer supplement and/or addendum, if any, prepared by Adobe for a CPSI Application Appendix, (iii) the PostScript Language Addendum Template, (iv) the Configurable PostScript Interpreter Functional Specification, (v) Supplement to the PostScript Language Reference Manual, (vi) any other Documentation for Adobe Software identified in a CPSI Application Appendix hereto and (vii) any updates, enhancements, substitutions, replacements or modifications thereof delivered to OEM by Adobe during the term of this Agreement." 5. Paragraph 1 ("Definitions"). New Paragraphs 1.20 through 1.29 are ----------- --------------- ---- hereby added to the Agreement to read as follows: "1.20 [*] 1.21 CPU. "CPU" shall mean a central processing unit. --- 1.22 License Management Mechanism. "License Management Mechanism" ---------------------------- shall mean the software/and or hardware provided by OEM which controls-and monitors access to the CPSI Application Object and Coded Font Programs to ensure that use thereof is limited to licensed Uses. 1.23 Licensed Use. "Licensed Use" shall mean the executing of the ------------ CPSI Application Object and Coded Font Programs in a single CPU on a Computer System under a license purchased by the End User. The total number of licenses purchased by the End User shall never be less than the total number of CPU's executing the CPSI Application Object and Coded Font Programs concurrently on a single Licensed System or in a network on multiple Computer Systems. 1.24 Software Upgrade. A "Software Upgrade" shall mean the ---------------- installation of any software enhancement to standard software features on a previously installed Licensed System or the installation of any optional software features on a previously installed Licensed System. 1.25 Hardware Upgrade. A "Hardware Upgrade" shall mean the ---------------- installation of any hardware enhancement, with required software, to standard hardware features on a previously installed Licensed System or the installation of any [*] Confidential Treatment Requested. -2- optional hardware features, with required software, on a previously installed Licensed System. 1.26 Bitmap Font. Bitmap Font shall mean the applicable digitally ----------- encoded machine readable data in bitmap form for screen display and having a resolution of less than 150 dots per inch in the plurality of sizes then currently available from Adobe for a single Typeface in Macintosh format only delivered by Adobe to OEM for use with the associated Coded Font Program. 1.27 Authorized Third Party(ies). "Authorized Third Party(ies)" --------------------------- shall be the collective term for OEM's distributors and Authorized Service Companies (service companies that provide third party service and maintenance to End Users for OEM or OEM's distributors) who have entered into a written agreement containing the minimum terms and conditions described in Exhibit H --------- ("Authorized Third Party Agreement Minimum Terms and Conditions"). 1.28 Replacement Software. "Replacement Software" shall mean a -------------------- copy of the CPSI Application Object and Coded Font Programs intended for use in accordance with Paragraph 2.7 ("Replacement Software") as a maintenance spare ------------- for a specific Licensed System. 1.29 Authorized Printer Engine Manufacturer Distributor. -------------------------------------------------- "Authorized Printer Engine Manufacturer Distributor" shall mean a third party with whom OEM has entered into a written agreement for distribution of a Licensed System which includes a Designated Output Device supplied by such third party and other hardware and software components provided by OEM, and who are expressly identified as such in the attached Exhibit I ("Authorized Printer --------- Engine Manufacturer Distributors") to this Agreement." 6. Paragraph 2 ("License Grants"). A new paragraph at the end of ----------- Paragraph 2.1.2 ("Coded Font Programs") is hereby added to read as follows: - --------------- "OEM agrees that the Bitmap Fonts provided by Adobe will be distributed only in conjunction with the associated Coded Font Programs. OEM acknowledges that Bitmap Fonts will be available in a limited number of point sizes and may not be available at all for some Coded Font Programs. All of the terms and conditions applicable to the Coded Font Programs herein, including but not limited to the grant of rights in this Paragraph 2.1.2 and in Paragraph --------------- --------- 2.1.7 ("Limited Functional Scope of License") through Paragraph 2.1.9 ("End-User - ----- --------------- Licensing") and Paragraph 2.5 ("Reverse Engineering") shall apply to the Bitmap ------------- Fonts. Notwithstanding the foregoing, so long as the Bitmap Fonts are distributed in conjunction with the Coded Font Programs, no additional royalty is due Adobe under the terms of Paragraph 7.5 ("Payment of Royalties") for ------------- distribution of the Bitmap Fonts." 7. Paragraph 2 ("License Grants"). Paragraph 2.1.6 ("Nondisclosure") is ----------- --------------- hereby deleted in its entirety and replaced by the following: -3- "2.1.6 Nondisclosure. OEM agrees that it will disclose the Adobe ------------- Information only to employees and independent contractors with a need to know who have agreed in writing (i) not to disclose the Adobe Information to other parties, (ii) to use the Adobe Information for the sole benefit of OEM and only as permitted by this Agreement, and (iii) to take all reasonable precautions to prevent disclosure to other parties. OEM shall take all measures reasonably required, including prompt and appropriate action as required, to prevent unauthorized use or disclosure of Adobe Information by such authorized employees and independent contractors." 8. Paragraph 2 ("License Grants"). Paragraph 2.1.10 ("Protection ----------- ---------------- Mechanisms") is hereby deleted in its entirety and replaced by the following: "2.1.10 Protection Mechanisms. OEM shall employ in conjunction with --------------------- the CPSI Application Object and Coded Font Programs licensed hereunder, copy protection, serialization, encryption or other License Management Mechanism to restrict or monitor unauthorized use of application software, as required by Adobe and as specified in the applicable CPSI Application Appendix. If no standard of protection is specified, OEM shall ensure that the CPSI Application Object and Coded Font Programs are encrypted, and, in the case of Other Coded Font Programs for Japanese Typefaces, copy protected as well." 9. Paragraph 2 ("License Grants"). New Paragraph 2.1.11 ("Additional ----------- ---------------- Protection Mechanism") and 2.1.12 ("PostScript Product Certification Test ------ Suite") are hereby added to the Agreement to read as follows: "2.1.11 Additional Protection Mechanism. The parties acknowledge ------------------------------- that the Licensed System may be in a network environment with the CPSI Application Object and Coded Font Programs located on a server. OEM shall employ a License Management Mechanism which permits the End User access to the CPSI Application Object and Coded Font Programs only if such use constitutes a Licensed Use, as that term is defined herein, and thus is covered by a license purchased by the End User from OEM. In the event that it comes to Adobe's attention that the License Management Mechanism has been violated and Adobe reasonably believes that there is unlicensed use of the CPSI Application Object and Coded Font Programs, OEM will use best efforts to supply a new License Management Mechanism within thirty (30) days after OEM receives notification of such violation. Should Adobe be able to demonstrate failure of the License Management Mechanism to reasonably prevent unlicensed use of the CPSI Application Object and Coded Font Programs, OEM will immediately stop shipment of the CPSI Application Object and Coded Font Programs until corrective measures can be taken. One license is required for each concurrent Licensed Use of the CPSI Application Object and Coded Font Programs. 2.1.12 [*] -4- [*] Confidential Treatment Requested. 10. [*] 11. Paragraph 2 ("License Grants"). The first sentence of Paragraph 2.5 ----------- ------------- ("Reverse Engineering") is hereby deleted in its entirety and replaced by the following: "OEM agrees that it will not reverse engineer, reverse compile, disassemble or otherwise attempt to create source code which is derived from the Adobe Software, Other Adobe-Supplied Software or Coded Font Programs or Demonstration Program(s) provided in object code form or [*]." 12. Paragraph 2 ("License Grants"). A new Paragraph 2.6 ("Authorized ----------- ------------- Third Parties") and a new Paragraph 2.7 ("Replacement Software") are hereby added to the Agreement to read as follows: "2.6 Authorized Third Parties. ------------------------ 2.6.1 License Grant. OEM shall have the right to provide ------------- Replacement Software to Authorized Third Parties in accordance with a written agreement containing the minimum terms of Exhibit H ("Authorized Third Party --------- Agreement Minimum Terms and Conditions"), solely for the purpose of performing maintenance, support, troubleshooting and related diagnostic services for Licensed Systems. OEM will use its best efforts to ensure that every copy of Replacement Software which it supplies to an Authorized Third Party hereunder is used solely for the purposes of servicing defective Licensed Systems. Replacement Software supplied for the purpose of servicing a defective Licensed System shall contain the same Coded Font Programs and version of CPSI Application Object as the Coded -5- [*] Confidential Treatment Requested. Font Programs and CPSI Application Object it replaces in the Licensed System. 2.6.2 Right to Sublicense. OEM may permit its Authorized ------------------- Third Parties to provide the Replacement Software to their respective Authorized Service Companies solely for the purpose of performing the activities described in Paragraph 2.6.1 above so long as each such Authorized Service Company has --------------- executed a written agreement which contains the minimum terms and conditions described in Exhibit H ("Authorized Third Party Minimum Terms and Conditions") --------- prior to receipt of the Replacement Software. Upon Adobe's request, OEM agrees to supply Adobe with copies of such Authorized Third Party agreements. OEM acknowledges that it has no right to grant an Authorized Third Party the right to reproduce the Replacement Software or the Adobe Software or Coded Font Programs contained in the Replacement Software. 2.7 Replacement Software. Notwithstanding the terms of -------------------- Paragraph 2.1 ("License to Sublicense Certain Software and Documentation"), - ------------- Adobe grants OEM the right to distribute such Replacement Software either directly to End Users or through Authorized Third Parties in accordance with Paragraph 2.6 ("Authorized Third Parties"), provided that: - ------------- (i) the versions of the CPSI Application Object and Coded Font Programs previously residing on the Licensed System are destroyed by OEM, its Subsidiary, or by the Authorized Third Party, subject to its Subsidiary or Authorized Third Party providing assurance in writing to OEM that the replaced copies of CPSI Application Object and Coded Font Programs have been destroyed. Upon request by Adobe, an officer of OEM shall certify in writing that all such replaced copies of the CPSI Application Object and Coded Font Programs have been destroyed or properly disposed of as required by this subparagraph; and (ii) OEM keeps records of the number of such Replacement Software reproduced and distributed either directly or indirectly through its Subsidiary or Authorized Third Parties and supplies Adobe with copies of such records upon request; and (iii) OEM agrees that written records on the use and disposition of the Replacement Software shall be maintained by OEM, its Subsidiary and/or its Authorized Third Parties ("Service Records"), and OEM agrees to make or require its Subsidiary or Authorized Third Parties to make such Service Records available to Adobe upon request within ninety (90) days thereafter; and further, such Service Records shall be supplied to Adobe in sufficient detail to allow Adobe to reasonably ascertain for itself the use and disposition of Replacement Software; and (iv) OEM shall account for each shipment of Replacement Software in the reports submitted under Paragraph 7.5 ("Payment of Royalties") ------------- of the Agreement either as a royalty-bearing event or as a royalty-free -6- distribution. All distribution of Replacement Software by OEM shall be royalty- free unless OEM fails to comply with the requirements set forth in Subparagraphs ------------- (i), (ii), and (iii) of this Paragraph 2.7 ("Replacement Software") in which - --- ---- ----- ------------- case OEM shall pay Adobe the Licensed System royalties and Coded Font Program royalties described in the applicable CPSI Application Appendix for such Replacement Software." 13. Paragraph 3. ("Development, Delivery and Acceptance"). The first ----------- sentence of Paragraph 3.2 ("Adobe Software Development") is hereby deleted in ------------- its entirety and replaced by the following: "Adobe shall use its best efforts to develop and modify the Adobe Software for use as part of the CPSI Application in the Computer System environment specified in the applicable CPSI Application Appendix and in conformance with the functional description of the Adobe Software as described in Exhibit G ("Configurable PostScript Interpreter Functional Specification"), --------- hereto, subject to the following limitations." 14. [*] 15. [*] -7- [*] Confidential Treatment Requested. 16. [*] -8- [*] Confidential Treatment Requested. 17. Paragraph 3 ("Development, Delivery and Acceptance"). The first ----------- sentence of Paragraph 3.9 ("PostScript Language Addendum") is hereby deleted in ------------- its entirety and replaced by the following: "OEM will provided Adobe with a draft version of a PostScript Language Addendum for each Licensed System in a mutually agreeable format in advance of the time when OEM provides test results for Adobe's review under Paragraph 3.8.2 --------------- ("Adobe certification") above or in accordance with the milestone set forth in a CPSI Application Object. 18. Paragraph 3 ("Development, Delivery and Acceptance"). A new Paragraph ----------- --------- 3.10 ("OEM Training") is hereby added to the Agreement to read as follows: - ---- "3.10 OEM Training. OEM agrees that if such training has not ------------ already been completed, it will send at least two technically qualified employees and/or independent contractors to attend one of Adobe's authorized PostScript language training classes for five (5) days prior to its initiating its first development effort under this Agreement. OEM will pay the costs of travel and accommodations for its personnel and shall reimburse Adobe for such training at Adobe's then current standard rates." 19. Paragraph 4 ("Proprietary Rights"). The first sentence of Paragraph ----------- --------- 4.2 ("Adobe Trade Secrets") is hereby deleted in its entirety and replaced by - --- the following: "OEM agrees that the Demonstration Program(s) in source code form and those techniques, algorithms, and processes contained in the Adobe Software, Other Adobe-Supplied Software, Coded Font Programs and Demonstration Program(s) and the information contained in the Template and the PostScript Product Certification Test Suite which have been developed, acquired or licensed by Adobe, or any modification or extraction thereof, constitute trade secrets of Adobe or its suppliers, and will be used by OEM only in accordance with the terms of this Agreement." -9- 20. Paragraph 4 ("Proprietary Rights"). Paragraph 4.3 ("Unauthorized ----------- ------------- Distribution or Copying") is hereby deleted in its entirety and replaced by the following: "4.3 Unauthorized Distribution or Copying. OEM agrees that (a) ------------------------------------ distributing, copying, duplicating or otherwise reproducing all or any part of the Adobe Software, Other Adobe-Supplied Software, Demonstration Program(s), PostScript Product Certification Test Suite, Coded Font Programs or Documentation (except as expressly permitted by this Agreement), (b) distributing copies of all or any portion of the Adobe Software, Other Adobe- Supplied Software, Demonstration Program(s) or Coded Font Programs other than in the form of royalty-bearing End User products; (c) failing to ensure that each End User of the CPSI Application and Coded Font Programs first obtains a license and pays the appropriate royalty fee in accordance with the royalty provisions contained herein; or (d) distributing the CPSI Application Object or Coded Font Programs for use on other than a Computer System, or for use in conjunction with an output device that is not a Designated Output Device, will be considered a material breach of this Agreement." 21. Paragraph 6 ("Export"). Paragraph 6 is hereby deleted in its ----------- ----------- entirety and replaced by the following: "6. EXPORT, OEM shall not knowingly, without prior authorization, ------ required, of the Office of Export Administration ("OEA"), export or re-export (as defined in Section 779.1(b)-(c) of the Export Administration Regulations - "Regulations" - and any amendments thereto) to any Group Q, S, W, Y or Z country specified in Supplement No. 1 to Section 770 of the Regulations as amended from time to time (i) any Adobe Information or (ii) the immediate product (including processes and services) produced directly by use of any Adobe Information. The provisions of this Paragraph shall survive notwithstanding any cancellation, termination or expiration of this Agreement." 22. Paragraph 7 ("Payments"). Paragraphs 7.1 ("CPSI Application ----------- -------------- Payments") and 7.2 ("Coded Font Program Royalties") are hereby deleted in their --- entirety and replaced by the following: "7.1 CPSI Application Payments. OEM shall pay Adobe in U.S. ------------------------- Dollars the software license fees and per Licensed Use royalties set forth in each CPSI Application Appendix hereto. OEM shall pay Adobe a separate royalty for each concurrent Licensed Use of the CPSI Application Object. 7.2 Coded Font Program Royalties. OEM shall also pay to Adobe ---------------------------- the per Licensed Use royalties for the Roman Initial Installation Coded Font Programs, Roman Additional Coded Font Programs, if any, and Other Coded Font Programs, if any, distributed with each CPSI Application Object, in the amount specified in the applicable CPSI Application Appendix hereto." -10- 23. Paragraph 7 ("Payments"). Paragraphs 7.5 ("Payment of Royalties"), ----------- -------------- 7.6 ("When Royalties Are Earned") and 7.7 ("Right of Audit") are hereby deleted - --- --- in their entirety and replaced by the following: "7.5 Payment of Royalties. All royalties due in accordance with -------------------- the terms of this Agreement shall be paid in U.S. Dollars within 30 days after the end of each calendar quarter. With each royalty payment OEM shall include a written summary, broken out by month of sale and country categories (U.S., Canada, Europe, Far East, Rest of World), of: (a) the number and types of Licensed Systems distributed or used internally by OEM during the quarter; (b) the number and types of Roman and Other Coded Font Programs, by Typefaces, bundled with the CPSI Application Object for use as a part of a Licensed System and licensed to End Users or used internally by OEM during the quarter; (c) the number of licenses for licensed Use of the CPSI Application Object and Coded Font Programs purchased by End Users during the quarter; and (d) any other information which may be required to determine whether OEM is paying the correct royalty amount hereunder. Licensed Systems which are returned for which refunds are made or a credit is issued by OEM shall be credited by OEM against royalties due to Adobe for such Licensed Systems; provided however, that in the event OEM provided a partial refund (or credit) of the price of a returned Licensed System, OEM shall be entitled to obtain a corresponding partial credit against royalties due for such Licensed System. At Adobe's request, OEM shall orally advise Adobe each month of its estimate of the number of Licensed Systems shipped by OEM and the number of licenses for Licensed Use purchased by End Users during the previous month and the royalties accrued thereby. Such oral communication shall be subject to final adjustment by OEM at the end of each accounting period. 7.6 When Royalties Are Earned. All royalties due hereunder shall ------------------------- be earned on the date OEM ships a Licensed System to its customer or upon the purchase of a license for a Licensed Use of the CPSI Application Object and Coded Font Programs by an End User, except that in the event of shipment of the CPSI Application Object between OEM and its Subsidiary or as between such Subsidiaries for resale, such royalties shall be earned when the CPSI Application Object and Coded Font Programs are first shipped to a customer other than OEM and any such Subsidiaries. 7.7 Right of Audit. OEM shall maintain a complete, clear, -------------- accurate record of: (a) the number and types of licensed Systems distributed or used internally by OEM and the number of licenses for Licensed Use purchased by End Users during the quarter; (b) the number and types of Roman and Other Coded Font Programs, by Typefaces, bundled with the CPSI Application Object for use as part of a Licensed System and licensed to End Users or used internally by OEM during the quarter; and (c) any other information which may be required to determine whether OEM is paying the correct royalty amount hereunder. To ensure compliance with the terms of this Agreement, Adobe shall have the right to conduct an inspection and audit of all the relevant accounting and sales books and records of OEM during regular business hours at OEM's offices and in such a manner as not to interfere with OEM's normal business activities. In no event shall audits be made hereunder more frequently than every six -11- (6) months. If such inspections should disclose any underreporting, OEM shall promptly pay Adobe such amount, together with interest thereon at the rate of 1- 1/2% per month or the highest interest rate allowed by law, whichever is lower, from the date on which such amount became due." 24. Paragraph 12 ("Internal Improvements; Continuing Support"). The ------------ second sentence of Paragraph 12.1 ("Internal Improvements") is hereby deleted in -------------- its entirety and replaced by the following: "OEM may distribute such Internal improvements to licensed End Users who have paid the applicable Licensed Use royalties for use with previously distributed Licensed Systems containing the CPSI Application Object [*]." 25. Paragraph 13 ("Cancellation"). Paragraph 13.4.2 ("Return of ------------ ---------------- Proprietary Information") is hereby deleted in its entirety and replaced by the following: "13.4.2 Return of Proprietary Information. Subject to Paragraph --------------------------------- --------- 13.4.6 ("Continued Support") below, OEM shall erase, destroy or return to Adobe - ------ all of Adobe's proprietary information in its possession, [*]. Upon Adobe's request, OEM shall warrant in writing its return or destruction of Adobe's proprietary information within thirty (30) days of cancellation, termination, or expiration." 26. A new Paragraph 15 ("Right to Use Authorized Printer Engine ------------ Manufacturer Distributors") is added to the Agreement to read as follows: "15. Right to Use Authorized Printer Engine Manufacturer --------------------------------------------------- Distributors. OEM may distribute Licensed Systems which include a Designated Output Device through a third party identified in Exhibit I ("Authorized Printer --------- Engine Manufacturer Distributor") attached hereto. Such identified third party may, in conjunction with marketing and distributing (directly and indirectly) Licensed Systems to End Users, market and distribute Adobe Software and Coded Font Programs, provided however, that such third party shall have no right to alter, reproduce or make copies of any Adobe Software or Coded Font Programs contained in the Licensed System, manufacture any portion of the Licensed System other than the Designated Output Device specified in the applicable CPSI Application Appendix and Exhibit I hereto, alter the functionality of any portion of the Licensed System manufactured by OEM or market or distribute any portion of the Licensed System other than the applicable Designated Output Device (including cables) under such third party's trademarks. Notwithstanding the above, OEM may include the identified third party's trademarks with any portion of the Licensed System manufactured by OEM and the identified third party may market or distribute Licensed Systems with such third party's trademarks. OEM shall use best efforts to ensure that (i) such third party's distribution of the Licensed Systems will be accompanied by an OEM End User License as set forth in Paragraph 2.17 of the Agreement; and (ii) such third -------------- party uses the applicable -12- [*] Confidential Treatment Requested. Trademarks and Adobe Trademarks in its catalogs, advertising, packaging, and promotional materials relating to the Licensed System in accordance with accepted trademark practice, including identification of the Trademark Owner; provided, however, that OEM shall prohibit such distribution of a Licensed System in Taiwan in conjunction with such third party's use of the Trademarks and Adobe Trademarks. OEM shall provide in the written agreement with such third party an express statement that Adobe shall have no responsibility to provide direct support or service to such third party. OEM acknowledges that the grant of such right to use authorized third parties to distribute Licensed Systems does not in any way affect OEM's obligation to account for and pay all royalties for Licensed Systems distributed by such authorized third parties with such royalties deemed to be earned by Adobe at the time OEM ships an accelerator card, Adobe Software and accompanying Coded Font Programs to such third party." 27. A new Exhibit G ("Configurable PostScript Interpreter Functional --------- Specification") is hereby added to the Agreement and is attached hereto. 28. A new Exhibit H ("Authorized Third Party Agreement Minimum Terms and --------- Conditions") is hereby added to the Agreement and is attached hereto. 29. A new Exhibit I ("Authorized Printer Engine Manufacturer --------- Distributors") is hereby added to the Agreement and is attached hereto. 30. All other terms and conditions of the Agreement shall remain in full force and effect. 31. Paragraph 15 ("General") and all subparagraphs thereto are renumbered ------------ as Paragraph 16 ("General") and all subparagraphs thereto are renumbered ------------ appropriately. IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to the Agreement to be signed by their duly authorized representatives. Adobe: OEM: ADOBE SYSTEMS INCORPORATED SUPERMAC TECHNOLOGY INCORPORATED By: /s/ John E. Warnock By: /s/ Louis J. Doctor ------------------------------- ---------------------------- John E. Warnock Louis J. Doctor - ---------------------------------- ------------------------------- Printed Name Printed Name Title: Chief Executive Officer Title: EVP ---------------------------- ------------------------- Date: 7/28/93 Date: 7/16/93 ---------------------------- ------------------------- -13- EXHIBIT G --------- Configurable PostScript Interpreter Functional Specification -14- EXHIBIT H --------- Authorized Third Party Agreement Minimum Terms and Conditions 1. License. Licensor may provide to Licensee Software media containing ------- the CPSI Software and/or Coded Font Programs from Adobe ("Replacement Software") for maintenance or repair purposes only. Licensee may use the Replacement Software for the performance of maintenance, support, troubleshooting and related diagnostic services for the Licensed System. If Licensee is SuperMac's OEM or distributor, Licensee may provide the Replacement Software to its Authorized Service Companies performing the activities described above so long as each such Authorized Service Company has executed a written agreement containing these minimum terms and conditions, and provided SuperMac Technology, Inc. and Adobe Systems Incorporated are listed as third party beneficiaries of such written agreement. 2. Replacement. All defective copies of the Software which contain the ----------- CPSI Software or Coded Font Programs from Adobe shall be replaced with Replacement Software on a "like-for-like" basis. Licensee must destroy the version of the CPSI Software previously residing on the Licensed System or return them to SuperMac. Licensee shall keep records of the disposition of such replaced copies of the CPSI Software and shall provide SuperMac with reports containing such information upon SuperMac's request. 3. Restrictions. Licensee agrees it will not reproduce, modify, reverse ------------ assemble, reverse compile or otherwise reverse engineer the Replacement Software in whole or in part or allow any other party to do so while Replacement Software is in its possession or under its control. 4. Third Party Beneficiary. Licensee is hereby notified and ----------------------- acknowledges that Adobe Systems Incorporated, 1585 Charleston Road, Mountain View, California 94039-7900 ("Adobe") is a third-party beneficiary of any agreement between Licensee and Licensor that pertains to the Replacement Software. The provisions of such agreements are made expressly for the benefit of Adobe and are enforceable by Adobe in addition to SuperMac. Licensee further acknowledges that if it fails to comply with the applicable terms and conditions of such agreement, Adobe shall have the right to terminate this Agreement under the terms of Paragraph 5 below and further, Adobe shall be entitled to equitable ----------- relief to protect its interests, including but not limited to injunctive relief, in addition to any other rights and remedies provided by law. 5. Termination. Licensor may terminate this Agreement at any time for ----------- breach of the provisions set forth in Paragraph 2 and 3 above by providing ----------- - Licensee with a notice of termination, and upon receiving such notice Licensee shall immediately discontinue use of the Replacement Software. Within ten (10) days of such termination, -15- Licensee shall have (i) returned to Licensor all copies of the Replacement Software in its possession or under its control; and (ii) presented to Licensor a certificate signed by a corporate office of Licensee stating that all such copies of the Replacement Software have been returned or destroyed. -16- EXHIBIT I --------- Authorized Printer Engine Manufacturer Distributors Authorized Printer Engine Manufacturer Distributors must be specified in this Exhibit I. Licensed Systems must be specified in this Exhibit I. All --------- --------- requests for changes to this Exhibit must be submitted to Adobe in writing and such changes shall apply only if subsequently approved by Adobe by the issuance of an updated Exhibit I. ---------
LICENSED SYSTEMS THIRD-PARTY ACCELERATOR CARD DESIGNATED OUTPUT DEVICE/MODEL - ----------- ---------------- ------------------------------ Fuji Xerox Midrange SM-ICS A Color 630 A Color 635 Fuji Xerox High-end SM-ICS A Color 630 A Color 635 Xerox Midrange SM-ICS Majestic Xerox High-end SM-ICS Majestic Rank Xerox Midrange SM-ICS Majestic Rank Xerox High-end SM-ICS Majestic
-17- AMENDMENT NO. 3 TO THE CONFIGURABLE POSTSCRIPT(TM) INTERPRETER OEM LICENSE AGREEMENT AND AMENDMENT NO. 3 TO APPENDIX NO. 1 AND AMENDMENT NO. 1 TO APPENDICES NOS. 2 AND 3 BETWEEN ADOBE SYSTEMS INCORPORATED AND SUPERMAC TECHNOLOGY INCORPORATED Effective date: September 19, 1994 ------------------ THIS AMENDMENT NO. 3 (the "Amendment") to the Configurable PostScript Interpreter OEM License Agreement (the "Agreement") between SuperMac Technology Incorporated ("OEM") and Adobe Systems Incorporated ("Adobe") effective as of September 18, 1992, amends the Agreement and Appendices Nos. 1, 2, and 3 in certain respects as follows: WHEREAS, Adobe has revised its procedures for bundling Coded Font Programs for use with Licensed Systems incorporating a version of the CPSI Application; WHEREAS, Adobe has standardized its procedures regarding royalty payments for such bundled Coded Font Programs; NOW, THEREFORE, the parties agree to modify and amend the Agreement and Appendix No. 1 and Appendix No. 2 and Appendix No. 3 as follows: A. Adobe and OEM hereby agree to modify the Agreement as follows: 1. Paragraph 1.4 ("Coded Font Programs"): Paragraph 1.4 ("Coded Font ------------- ------------- Programs") is hereby amended by adding the phrase: ", in Schedule 1 to ---------- Exhibit K ("Licensed Use Royalties for Coded Font Programs") hereto" before --------- the phrase: "or in the applicable CPSI Application Appendix hereto" in lines four and five and before the phrase "or in any CPSI Application Appendix" in the last line. 2. Paragraph 1.4.1 ("Roman Initial Installation Coded Font Programs") --------------- and Paragraph 1.4.2 ("Roman Additional Coded Font Programs"): Paragraph --------------- --------- 1.4.1 ("Roman Initial Installation Coded Font Programs") and Paragraph ----- --------- 1.4.2 ("Roman Additional Coded Font Programs") are hereby amended to add ----- the -1- phrase: ", in Schedule 1 to Exhibit K ("Licensed Use Royalties for ---------- --------- Coded Font Programs") hereto" before the phrase: "or in a CPSI Application Appendix hereto" in line four of each Paragraph. 3. Paragraph 1.4.3 ("Other Coded Font Programs"): Paragraph 1.4.3 --------------- --------------- ("Other Coded Font Programs") is hereby amended to add the phrase: "which are identified in Schedule 2 to Exhibit K ("Licensed Use Royalties for ---------- --------- Coded FONT Programs") hereto or" before the phrase: "which are identified in a CPSI Application Appendix hereto" in lines three and four. 4. Paragraph 1.19 ("Typeface"): Paragraph 1.19 ("Typeface") is hereby -------------- -------------- amended by adding the phrase: ", in Schedules 1 or 2 to Exhibit K ----------- - --------- ("Licensed Use Royalties for Coded Font Programs") hereto" before the phrase: "or in any CPSI Application Appendix." in line 5. 5. Paragraph 7.2 ("Coded Font Program Royalties"): Paragraph 7.2 ("Coded ------------- ------------- Font Program Royalties") is hereby amended by adding the phrase: "in accordance with the terms and conditions set forth in Exhibit K ("Licensed --------- Use Royalties for Coded Font Programs") hereto or" before the phrase: "in the amount specified in the applicable CPSI Application Appendix hereto" in the last sentence. 6. Paragraph 10.1 ("Trademark License"): Paragraph 10.1 ("Trademark -------------- -------------- License") is hereby amended by adding the phrase: ", in Schedules 1 or 2 to ----------- - Exhibit K ("Licensed Use Royalties for Coded Font Programs") hereto" before --------- the phrase: "or in a CPSI Application Appendix." in line 6 of the second paragraph thereto. 7. Paragraph 10.2 ("Ownership of Trademarks"): Paragraph 10.2 -------------- -------------- ("Ownership of Trademarks") is hereby amended by adding the phrase: ", in Schedules 1 or 2 to Exhibit K ("Licensed Use Royalties for Coded Font ----------- - --------- Programs") hereto" before the phrase: "or the applicable CPSI Application Appendix," in line 15. 8. Exhibit K ("Licensed Use Royalties for Coded Font Programs"): Exhibit --------- ------- K ("Licensed Use Royalties for Coded Font Programs") is hereby added to the - Agreement and is attached hereto. B. Adobe and OEM hereby agree to modify the Appendix No. 1 to the Agreement as follows: 1. Paragraph E ("Adobe Deliverables:"). Paragraph E(5) ("Coded Font ----------- -------------- Programs:") is hereby deleted in its entirety and replaced by the following: -2- "(5) Coded Font Programs: OEM shall bundle the Roman Coded Font Programs ------------------- as per Paragraph 1(a) ("Roman Coded Font Programs") of Exhibit K -------------- --------- ("Licensed Use Royalties for Coded Font Programs") with each Licensed System distributed hereunder (a "Roman Version"). OEM agrees that with each Licensed System distributed for use in Japan (a "Japanese Version"), it shall bundle the same Roman Coded Font Programs as specified above for Roman Versions. Additionally, OEM shall bundle the Coded Font Programs for Japanese Typefaces as per Paragraph l(b) -------------- ("Coded Font Programs for Japanese Typefaces") and Paragraph 1(c) -------------- ("Distribution Media") of Exhibit K ("Licensed Use Royalties for --------- Coded Font Programs"), with every Licensed System distributed for use in Japan. OEM may license additional fonts for use with an existing Licensed System but only as described in Paragraphs 1(d) and 1(e) of --------------- ---- Exhibit K to the Agreement." --------- 2. Paragraph I ("Applicable Royalties:"). Paragraph I(2) ("Coded Font ----------- -------------- Program Royalties:") is hereby deleted in its entirety and replaced by the following: "(2) Coded Font Program Royalties: The Licensed Use Royalties for Coded ---------------------------- Font Programs distributed bundled with or as an upgrade to a Licensed System under this Appendix shall be in accordance with Exhibit K --------- ("Licensed Use Royalties for Coded Font Programs") herein." 3. Paragraph J ("Roman Initial Installation Coded Font Programs:") is ----------- hereby deleted in its entirety and replaced by the following: "J. Roman Initial Installation Coded Font Programs: The Roman Initial Installation Coded Font Programs distributed with Licensed Systems under this Appendix shall be as set forth in Paragraph 1 of Attachment 1 to Schedule 1 of Exhibit K ("Licensed Use ----------- ------------ ---------- --------- Royalties for Coded Font Programs") and in Paragraph 1 ("Coded Font ----------- Program Distribution") to Exhibit K herein." --------- 4. Paragraph K ("Roman Additional Coded Font Programs:") is hereby ----------- deleted in its entirety and replaced by the following: "K. Roman Additional Coded Font Programs: The Roman Additional Coded Font Programs distributed with Licensed Systems under this Appendix shall be as set forth in Paragraph 2 of Attachment 1 to Schedule 1 of Exhibit K ----------- ------------ ---------- --------- ("Licensed Use Royalties for Coded Font Programs") and in Paragraph 1 ("Coded Font Program Distribution") to Exhibit K ----------- --------- herein." -3- 5. Paragraph L ("Coded Font Programs for Japanese Typefaces:") is hereby ----------- deleted in its entirety and replaced by the following: "L. Coded Font Programs for Japanese Typefaces: The Coded Font Programs for Japanese Typefaces distributed with Licensed Systems under this Appendix shall be as set forth in Paragraph 1 of Schedule 2 to Exhibit K ("Licensed Use Royalties for ----------- ---------- --------- Coded Font Programs") and in Paragraph 1 ("Coded Font Program ----------- Distribution") to Exhibit K herein." --------- C. Adobe and OEM hereby agree to modify the Appendix No. 2 to the Agreement as follows: 1. Paragraph I ("Applicable Royalties:"). Subparagraph I(1)d.(ii) ----------- ----------------------- ("Japanese List Price.") is hereby deleted in its entirety and replaced by the following: "(ii) Japanese List Price. The Japanese List Price shall ------------------- mean OEM's published List Price in Japanese yen to End Users for quantity one (1) of a fully functioning Japanese Version with the minimum required Coded Font Programs for Japanese Typefaces (as described in Paragraph I(2)b, as amended, below) of a Licensed System --------------- as described in Paragraph C above, for distribution in Japan. The ----------- Japanese List Price shall apply for the purpose of royalty calculations hereunder for each Licensed Use of a Japanese Version of the Licensed System distributed for use throughout the world. The Japanese List Price shall be converted into U.S. Dollars at a rate equal to the average of the exchange rates quoted in the Wall Street Journal at the end of the first and last days of the relevant quarterly accounting period defined in Paragraph 7.5 ("Payment of ------------- Royalties") of the Agreement. OEM shall use the converted Japanese List Price to calculate the royalty for CPSI Application hereunder." 2. Paragraph I ("Applicable Royalties:"). Paragraph I(2) ("Licensed Use ----------- -------------- Royalty for CPSI Application:") is hereby deleted in its entirety and replaced by the following: "(2) Licensed Use Royalties for CPSI Application: ------------------------------------------- a. Roman Versions. OEM shall bundle the Roman Coded Font -------------- Programs in accordance with Paragraph 1(a) ("Roman Coded Font Programs") of Exhibit K ("Licensed Use Royalties for Coded Font --------- -4- Programs") with each Licensed System distributed hereunder (a "Roman Version"). [*] b. Japanese Versions. OEM agrees that with each Licensed System ----------------- distributed for use in Japan (a "Japanese Version"), it shall bundle the same Roman Coded Font Programs as specified in Paragraph I(2)a --------------- above for Roman Versions. Additionally, OEM shall bundle the Coded Font Programs for Japanese Typefaces in accordance with Paragraph --------- l(b) ("Coded Font Programs for Japanese Typefaces") and Paragraph ---- --------- l(c) ("Distribution Media") of Exhibit K ("Licensed Use Royalties for ---- --------- Coded Font Programs"), with every Licensed System distributed for use in Japan. Font upgrades may be distributed in accordance with Paragraphs l(d) ("Distribution of Japanese Versions and Font --------------- Upgrades") and 1(f) ("Distribution of CPSI Application with Font ---- Upgrade") of Exhibit K to the Agreement. --------- [*] -5- [*] Confidential Treatment Requested. 3. Paragraph I ("Applicable Royalties:"). Paragraph I(5) ("Licensed Use ----------- -------------- Royalty for Coded Font Programs:") is hereby deleted in its entirety and replaced by the following: "(5) Licensed Use Royalties for Coded Font Programs: ---------------------------------------------- The Licensed Use Royalties for Coded Font Programs distributed bundled with or as an upgrade to a Licensed System under this Appendix shall be in accordance with Paragraph 2 of Exhibit K ----------- --------- ("Licensed Use Royalties for Coded Font Programs") herein." 4. Paragraph J ("Roman Initial Installation Coded Font Programs:") is ----------- hereby deleted in its entirety and replaced by the following: "J. Roman Initial Installation Coded Font Programs: The Roman Initial Installation Coded Font Programs distributed with Licensed Systems under this Appendix shall be as set forth in Paragraph 1 of Attachment 1 to Schedule 1 of Exhibit K ("Licensed Use ----------- ------------ ---------- --------- Royalties for Coded Font Programs") and in Paragraph 1 ("Coded Font Program Distribution") to Exhibit K herein." --------- 5. Paragraph K ("Additional Coded Font Programs:") is hereby deleted in ----------- its entirety and replaced by the following: "K. Roman Additional and Other Coded Font Programs: (1) The Roman Additional Coded Font Programs distributed with Licensed Systems under this Appendix No. 2 shall be as set forth in Paragraph 2 of ----------- Attachment 1 to Schedule 1 of Exhibit K ("Licensed Use Royalties for Coded ------------ ---------- --------- Font Programs") and in Paragraph 1 ("Coded Font Program Distribution") of ----------- Exhibit K herein. --------- (2) The Coded Font Programs for Japanese Typefaces distributed with Licensed Systems under this Appendix No. 2 shall be as set forth in Paragraph 1 to Schedule 2 of Exhibit K ("Licensed Use Royalties for Coded ----------- ---------- --------- Font Programs") and in Paragraph 1 ("Coded Font Program Distribution") of ----------- Exhibit K herein." --------- D. Adobe and OEM hereby agree to modify the Appendix No. 3 to the Agreement as follows: 1. Paragraph I ("Applicable Royalties:"). Subparagraph I(1)c.(ii) ----------- ----------------------- ("Japanese List Price.") is hereby deleted in its entirety and replaced by the following: -6- "(ii) Japanese List Price. The Japanese List Price shall mean ------------------- OEM's published List Price in Japanese yen to End Users for quantity one (1) of a Japanese Version with the minimum required Coded Font Programs for Japanese Typefaces (as described in Paragraph I(2)b, as amended, below) of a Licensed System with --------------- Minimum Configuration as described in Paragraph C above, for ----------- distribution in Japan. The Japanese List Price shall apply for the purpose of royalty calculations hereunder for each Licensed Use of a Japanese Version of the Licensed System distributed for use throughout the world. The Japanese List Price shall be converted into U.S. Dollars at a rate equal to the average of the exchange rates quoted in the Wall Street Journal at the end of the first and last days of the relevant quarterly accounting period defined in Paragraph 7.5 ("Payment of Royalties") of the Agreement. OEM shall ------------- use the converted Japanese List Price to calculate the royalty for CPSI Application hereunder." 2. Paragraph I ("Applicable Royalties:"). Paragraph I(2) ("Licensed Use ----------- -------------- Royalty for CPSI Application:") is hereby deleted in its entirety and replaced by the following: "(2) Licensed Use Royalty for CPSI Application: ----------------------------------------- a. Roman Versions. OEM shall bundle the Roman Coded Font -------------- Programs in accordance with Paragraph 1(a) ("Roman Coded Font Programs") of Exhibit K ("Licensed Use Royalties for Coded Font --------- Programs") with each Licensed System distributed hereunder (a "Roman Version"). [*] -7- [*] Confidential Treatment Requested. b. Japanese Versions. OEM agrees that with each Licensed System ----------------- distributed for use in Japan (a "Japanese Version"), it shall bundle the same Roman Coded Font Programs as specified in Paragraph I(2)a --------------- above for Roman Versions. Additionally, OEM shall Bundle the Coded Font Programs for Japanese Typefaces in accordance with Paragraph --------- 1(b) ("Coded Font Programs for Japanese Typefaces") and Paragraph ---- --------- 1(c) ("Distribution Media") of Exhibit K ("Licensed Use Royalties for ---- --------- Coded Font Programs"), with every Licensed System distributed for use in Japan. Font upgrades may be distributed in accordance with Paragraphs l(d) ("Distribution of Japanese Versions and Font --------------- Upgrades") and 1(f) ("Distribution of CPSI Application with Font ---- Upgrade") of Exhibit K to the Agreement. --------- [*] 3. Paragraph I ("Applicable Royalties:"). Paragraph I(5) ("Licensed Use ----------- -------------- Royalty for Coded Font Programs:") is hereby deleted in its entirety and replaced by the following: "(5) Licensed Use Royalties for Coded Font Programs: ---------------------------------------------- The Licensed Use Royalties for Coded Font Programs distributed bundled with or as an upgrade to a Licensed System under this Appendix shall be in accordance with Paragraph 2 of Exhibit K ----------- --------- ("Licensed Use Royalties for Coded Font Programs") herein." 4. Paragraph J ("Roman Initial Installation Coded Font Programs:") is ----------- hereby deleted in its entirety and replaced by the following: "J. Roman Initial Installation Coded Font Programs: The Roman Initial Installation Coded Font Programs distributed with Licensed Systems under this Appendix shall be as set forth in Paragraph 1 of Attachment 1 to Schedule 1 of Exhibit K ("Licensed Use ----------- ------------ ---------- --------- Royalties for Coded Font Programs") and in Paragraph 1 ("Coded Font Program Distribution") to Exhibit K herein." --------- -8- [*] Confidential Treatment Requested. 5. Paragraph K ("Additional Coded Font Programs:") is hereby deleted in ----------- its entirety and replaced by the following: "K. Roman Additional and Other Coded Font Programs: (1) The Roman Additional Coded Font Programs distributed with Licensed Systems under this Appendix No. 3 shall be as set forth in Paragraph --------- 2 of Attachment 1 to Schedule 1 of Exhibit K ("Licensed Use Royalties - ------------ ---------- --------- for Coded Font Programs") and in Paragraph 1 ("Coded Font Program ----------- Distribution") of Exhibit K herein. --------- (2) The Coded Font Programs for Japanese Typefaces distributed with Licensed Systems under this Appendix No. 3 shall be as set forth in Paragraph 1 to Schedule 2 of Exhibit K ("Licensed Use Royalties for ----------- ---------- --------- Coded Font Programs") and in Paragraph 1 ("Coded Font Program ----------- Distribution") of Exhibit K herein." --------- E. All other terms and conditions of the Agreement and of Appendix No. 1 to the Agreement and of Appendix No. 2 to the Agreement and of Appendix No. 3 to the Agreement, as amended, shall remain in full force and effect. Adobe: OEM: ADOBE SYSTEMS INCORPORATED SUPERMAC TECHNOLOGY INCORPORATED By:/s/ S.A. MacDonald By:/s/ Mark Housley ------------------------------------ ---------------------------------- Print Print Name:S.A. MacDonald Name: Mark Housley ---------------------------------- ------------------------------- Title:Sr. V.P., General Manager, SPD Title General Manager --------------------------------- ------------------------------- Date: 9/22/94 Date: 9/19/94 ---------------------------------- -------------------------------- -9- EXHIBIT K --------- Licensed Use Royalties for Coded Font Programs 1. Coded Font Program Distribution. ------------------------------- OEM may reproduce the Coded Font Programs delivered by Adobe hereunder solely at the Reproduction Locations and only for distribution with Licensed Systems. (a) Roman Coded Font Programs. OEM agrees that with each Licensed System ------------------------- distributed for use outside of Japan (a "Roman Version"), OEM shall bundle the Roman Initial Installation Coded Font Programs identified in Paragraph 1 of ----------- Attachment 1 attached hereto. OEM may also distribute a Roman Version bundled - ------------ with Roman Additional Coded Font Programs or Other Coded Font Programs solely in one of the Optional Packages specified in Attachment 1 to Schedule 1 to this ------------ ---------- Exhibit K. - --------- (b) Coded Font Programs for Japanese Typefaces. OEM agrees that with each ------------------------------------------ Licensed System distributed for use in Japan (a "Japanese Version"), it shall bundle the same Roman Initial Installation Coded Font Programs as specified in Paragraph l(a) of this Exhibit K for Roman Versions. Additionally, with each - -------------- --------- Japanese Version, OEM shall bundle a minimum of the [*] Coded Font Programs for Japanese Typefaces identified in Paragraph 1 of Schedule 2 to this ----------- ---------- Exhibit K - --------- [*] OEM may also distribute a Japanese Version bundled with [*] Coded Font Programs for Japanese Typefaces in any of the bundled configurations specified in Schedule 2. (c) Distribution Media. Such Coded Font Programs for Japanese Typefaces ------------------ will be distributed on mutually agreeable distribution media and will be encrypted and copy-protected against unauthorized duplication in a manner to be specified by Adobe. In particular, to prevent an End User from substituting one font configuration for the original font configuration licensed with the Licensed System, OEM shall employ a different set of code ROMs (with a different identification code) to distinguish the original font configuration from the other font configuration. Special character set encodings are not provided. (d) Distribution of Japanese Versions and Font Upgrades. OEM is not --------------------------------------------------- required to bundle the Coded Font Programs for Japanese Typefaces with Licensed Systems distributed for use outside of Japan. However, if OEM decides to distribute -10- [*] Confidential Treatment Requested. Licensed Systems with Coded Font Programs for Japanese Typefaces for use outside of Japan, it shall bundle the Coded Font Programs for Japanese Typefaces in accordance with Paragraphs l(b) and (c) above. Where OEM has --------------- --- distributed a Roman Version and wishes to upgrade such Roman Version to the corresponding Japanese Version, OEM may do so, provided that the Coded Font Programs for Japanese Typefaces are bundled as an upgrade in accordance with Paragraphs l(b) and (c) above. Except for such initial upgrade for a Roman - -------------- --- Version, OEM may not distribute additional Coded Font Programs for Japanese Typefaces in an unbundled form for the purpose of upgrading an existing Licensed System from one font configuration to another. If OEM desires to offer to customers additional Coded Font Programs for Japanese Typefaces, it may license the additional aftermarket fonts in retail product version directly from Adobe or Morisawa to provide to OEM's End Users. (e) Font Upgrades for Roman Versions. OEM may upgrade an existing Roman -------------------------------- Version of a Licensed System by adding one or more of the Optional Packages specified in Attachment 1 hereto. ------------ (f) Distribution of CPSI Application with Font Upgrade. OEM will not -------------------------------------------------- distribute the CPSI Application Object with a font upgrade, as described in Paragraph (d) or (e) above, unless expressly permitted in the applicable CPSI - ------------- --- Application Appendix, and under applicable terms set forth therein. 2. Licensed Use Royalty Payments for Coded Font Programs. ----------------------------------------------------- (a) Roman Versions. For each Licensed Use of the Roman Initial -------------- Installation Coded Font Programs, Roman Additional Coded Font Programs and Other Coded Font Programs distributed bundled with or as an upgrade to a Licensed System or used internally by OEM or its Subsidiaries (beyond the number of Licensed Uses provided royalty-free for Internal Use under applicable CPSI Application Appendices), OEM shall pay a per Typeface or Optional Package royalty, as applicable, as set forth in Schedule 1 ("Licensed Use Royalties for ---------- Roman Coded Font Programs") hereto. (b) Japanese Versions. For each Licensed Use of the Coded Font Programs ----------------- for Japanese Typefaces distributed bundled with or as an upgrade to a Licensed System or used internally by OEM or its Subsidiaries, OEM shall pay a per Typeface royalty as set forth in Schedule 2 ("Licensed Use Royalties for Coded ---------- Font Programs for Japanese Typefaces") hereto. -11- Schedule 1 ---------- Licensed Use Royalties for Roman Coded Font Programs 1. Licensed Use Royalties for Roman Initial Installation Coded Font Programs. ------------------------------------------------------------------------- The seventeen (17) Roman Initial Installation Coded Font Programs specified in Paragraph 1 of Attachment 1 and bundled with a Licensed System shall be royalty- - ----------- ------------ free. 2. Licensed Use Royalties for Optional Packages. OEM shall pay a per Licensed -------------------------------------------- Use royalty for each Optional Package which is distributed bundled with or as an upgrade to a Licensed System or used internally by OEM or its Subsidiaries (beyond the number of Licensed Uses provided royalty-free for Internal Use under applicable CPSI Application Appendices) based on the following royalty schedule, using the published U.S. List Price for the Minimum Configuration of the Licensed System. To calculate royalties due for Optional Package 4C, add the applicable royalty due for the relevant line item in column 4C to the applicable royalty due for the relevant line item in one or more of the other columns. For example: If the published U.S. List Price of the Licensed System is greater than [*] and OEM distributes Optional Package 65 with Optional Package 4C, then the total royalty due to Adobe for the Other Coded Font Programs is equal to [*] . The Coded Font Programs included in the Optional Packages are listed in Attachment 1 hereto. ------------ [*] -12- [*] Confidential Treatment Requested. Attachment 1 ------------ Optional Packages 1. Roman Initial Installation Coded Font Programs: ----------------------------------------------- Adobe will provide the graphic characters specified in ISO 8859-1: 1987, Latin alphabet No. 1 and symbol characters as applicable, for the following Roman Initial Installation Coded Font Programs:
IDENTIFYING TRADEMARK TYPEFACE TRADEMARK OWNER --------------------- -------- --------------- Helvetica Linotype-Hell AG and/or its subsidiaries Helvetica Bold Linotype-Hell AG and/or its subsidiaries Helvetica Oblique Linotype-Hell AG and/or its subsidiaries Helvetica Bold Oblique Linotype-Hell AG and/or its subsidiaries Times Roman Linotype-Hell AG and/or its subsidiaries Times Bold Linotype-Hell AG and/or its subsidiaries Times Italic Linotype-Hell AG and/or its subsidiaries Times Bold Italic Linotype-Hell AG and/or its subsidiaries Symbol (Public Domain) Courier (Public Domain) Courier Bold (Public Domain) Courier Oblique (Public Domain) Courier Bold Oblique (Public Domain) Helvetica Narrow Linotype-Hell AG and/or its subsidiaries Helvetica Narrow Bold Linotype-Hell AG and/or its subsidiaries Helvetica Narrow Oblique Linotype-Hell AG and/or its subsidiaries Helvetica Narrow Bold Oblique Linotype-Hell AG and/or its subsidiaries
2. Roman Additional Coded Font Programs: ------------------------------------ Upon written notification by OEM, Adobe win provide the graphic characters specified in ISO 8859-1: 1987, Latin alphabet No. 1 and symbol characters as applicable, for the Roman Additional Coded Font Programs listed in the Optional Packages as described below. After receipt of written request from OEM, Adobe will provide the Macintosh compatible Bitmap Fonts in such point sizes as Adobe has available for the Roman Additional Coded Font Programs listed below. These Bitmap Fonts can only be used in conjunction with a Licensed System. (a) Optional Package 35N. "Optional Package 35N" shall consist of the -------------------- Roman Initial Installation Coded Font Programs listed in Paragraph 1 above ----------- plus the Roman Additional Coded Font Programs listed in this Paragraph 2. -----------
IDENTIFYING TRADEMARK TYPEFACE TRADEMARK OWNER ------------------------- ---------------------- ------------------------------------------ ITC Avant Garde Gothic Book International Typeface Corporation ITC Avant Garde Gothic Book Oblique International Typeface Corporation
-13- ITC Avant Garde Gothic Demi International Typeface Corporation ITC Avant Garde Gothic Demi Oblique International Typeface Corporation ITC Bookman Light International Typeface Corporation ITC Bookman Light ItalicInternational Typeface Corporation ITC Bookman Light International Typeface Corporation ITC Bookman Light Italicinternational Typeface Corporation New Century Schoolbook Roman Public Domain New Century Schoolbook Bold Public Domain New Century Schoolbook Italic Public Domain New Century Schoolbook Bold ItalicPublic Domain ITC Zapf Chancery Medium ItalicInternational Typeface Corporation ITC Zapf Dingbats International Typeface Corporation Palatino Roman Linotype-Hell AG and/or its subsidiaries Palatino Bold Linotype-Hell AG and/or its subsidiaries Palatino Italic Linotype-Hell AG and/or its subsidiaries Palatino Bold Italic Linotype-Hell AG and/or its subsidiaries
(b) Optional Package 65. "Optional Package 65" shall consist of Optional ------------------- ------------------- Package 35N listed in Paragraph 2(a) above plus the thirty (30) Other Roman -------------- Additional Coded Font Programs listed in this Paragraph 2(b). -------------- Adobe Caslon Regular Adobe Systems Incorporated Adobe Caslon Italic Adobe Systems Incorporated Adobe Caslon Semibold Adobe Systems Incorporated Adobe Caslon Semibold Italic Adobe Systems Incorporated Adobe Garamond Regular Adobe Systems Incorporated Adobe Garamond Italic Adobe Systems Incorporated Adobe Garamond Bold Adobe Systems Incorporated Adobe Garamond Bold Italic Adobe Systems Incorporated Barmeno Regular H. Berthold AG Barmeno Medium H. Berthold AG Barmeno Bold H. Berthold AG Barmeno Extra Bold H. Berthold AG Lithos Regular Adobe Systems Incorporated Lithos Black Adobe Systems Incorporated Trajan Bold Adobe Systems Incorporated Adobe Wood Type 2 Ornaments Adobe Systems Incorporated Blackoak Bold Adobe Systems Incorporated Carta Map Symbols Adobe Systems Incorporated Tekton Regular Adobe Systems Incorporated Tekton Bold Adobe Systems Incorporated Park Avenue Regular Kingsley/ATF Type Corporation Poetica Ornaments RegularAdobe Systems Incorporated Kaufmann Regular Kingsley/ATF Type Corporation Americana Regular Kingsley/ATF Type Corporation Americana Extra Bold Kingsley/ATF Type Corporation Parisian Regular Kingsley/ATF Type Corporation Formata Regular H. Berthold AG Formata Medium H. Berthold AG Formata Italic H. Berthold AG Formata Medium Italic H. Berthold AG
-14- (c) Optional Package 100. "Optional Package 100" shall consist of -------------------- Optional Package 65 listed in Paragraph 2(b) above plus the thirty-five (35) Other Roman Additional Coded Font Programs listed in this Paragraph --------- 2(c). ---- ITC Lubalin Graph Book International Typeface Corporation ITC Lubalin Graph BookOblique International Typeface Corporation ITC Lubalin Graph BookDemi International Typeface Corporation ITC Lubalin Graph BookDemi Oblique International Typeface Corporation ITC Korinna Regular International Typeface Corporation ITC Korinna Kursiv Regular International Typeface Corporation ITC Korinna Bold International Typeface Corporation ITC Korinna Kursiv Bold International Typeface Corporation ITC Kabel Book International Typeface Corporation ITC Kabel Medium International Typeface Corporation ITC Kabel Demi International Typeface Corporation ITC Kabel Bold International Typeface Corporation ITC Kabel Ultra International Typeface Corporation ITC Berkeley Oldstyle(R) Book International Typeface Corporation ITC Berkeley Oldstyle Book Italic International Typeface Corporation ITC Berkeley Oldstyle Medium International Typeface Corporation ITC Berkeley Oldstyle Italic International Typeface Corporation ITC Berkeley Oldstyle Bold International Typeface Corporation ITC Berkeley Oldstyle Bold Italic International Typeface Corporation ITC Berkeley Oldstyle Black International Typeface Corporation ITC Berkeley Oldstyle Black Italic International Typeface Corporation ITC Machine(R) Medium International Typeface Corporation ITC Machine Bold International Typeface Corporation ITC Flora(R) Medium International Typeface Corporation ITC Flora Bold International Typeface Corporation Copperplate Gothic 31AB Public Domain Copperplate Gothic 31BC Public Domain Brush Script Public Domain Hobo Public Domain Stencil Public Domain Baker Signet Visual Graphics Corporation Nuptial Script Linotype-Hell AG and/or its subsidiaries Mythos(TM) Adobe Systems Incorporated Birch(TM) Adobe Systems Incorporated Umbra Ludlow
(d) Optional Package 300. "Optional Package 300" shall consist of -------------------- Optional Roman 100 listed in Paragraph 2(c) above plus the two hundred (200) Other Roman Additional Coded Font Programs listed in this Paragraph 2(d). Goudy Old Style Public Domain Goudy Bold Public Domain Goudy Old Style Italic Public Domain Goudy Bold Italic Public Domain Goudy ExtraBold Public Domain Goudy Heavyface Public Domain
-15- Goudy Heavyface Italic Public Domain Sonata Adobe Systems Incorporated Letter Gothic Public Domain Letter Gothic Bold Public Domain Letter Gothic Slanted Public Domain Letter Gothic Bold Slanted Public Domain Cooper Black Public Domain Cooper Black Italic Public Domain ITC Stone Serif International Typeface Corporation ITC Stone Serif Semibold International Typeface Corporation ITC Stone Serif Italic International Typeface Corporation ITC Stone Serif Semibold Italic International Typeface Corporation ITC Stone Serif Bold International Typeface Corporation ITC Stone Serif Bold Italic International Typeface Corporation ITC Stone Sans Bold International Typeface Corporation ITC Stone Sans Bold Italic International Typeface Corporation ITC Stone Sans International Typeface Corporation ITC Stone Sans Semibold International Typeface Corporation ITC Stone Sans Italic International Typeface Corporation ITC Stone Sans Semibold ItalicInternational Typeface Corporation Kaufmann Bold Kingsley/ATF Type Corporation Americana Bold Kingsley/ATF Type Corporation Americana Italic Kingsley/ATF Type Corporation Century Expanded Linotype-Hell AG and/or its subsidiaries Century Expanded Italic Linotype-Hell AG and/or its subsidiaries Caslon Open Face Linotype-Hell AG and/or its subsidiaries Gothic 13 Linotype-Hell AG and/or its subsidiaries Tempo Heavy Condensed Ludlow Tempo Heavy Condensed Italic Ludlow Adobe Garamond Semibold Adobe Systems Incorporated Adobe Garamond Semibold Italic Adobe Systems Incorporated Adobe Garamond Regular, SC Adobe Systems Incorporated Adobe Garamond Semibold, SC Adobe Systems Incorporated Franklin Gothic Roman Linotype-Hell AG and/or its subsidiaries Franklin Gothic Condensed Linotype-Hell AG and/or its subsidiaries Franklin Gothic Extra Condensed Linotype-Hell AG and/or its subsidiaries Utopia Regular Adobe Systems Incorporated Utopia Semibold Adobe Systems Incorporated Utopia Italic Adobe Systems Incorporated Utopia Semibold Italic Adobe Systems Incorporated Utopia Bold Adobe Systems Incorporated Utopia Bold Italic Adobe Systems Incorporated Utopia Black Adobe Systems Incorporated Utopia Regular, SC Adobe Systems Incorporated Utopia Semibold, SC Adobe Systems Incorporated Copperplate Gothic 29AB Public Domain Copperplate Gothic 29BC Public Domain Copperplate Gothic 30AB Public Domain Copperplate Gothic 30BC Public Domain Copperplate Gothic 32AB Public Domain Copperplate Gothic 32BC Public Domain Copperplate Gothic 33BC Public Domain
-16- Charlemagne Regular Adobe Systems Incorporated Charlemagne Bold Adobe Systems Incorporated Mesquite Adobe Systems Incorporated Woodtype Ornaments 1 Adobe Systems Incorporated Tekton Oblique Adobe Systems Incorporated Tekton Bold Oblique Adobe Systems Incorporated Minion Regular Adobe Systems Incorporated Minion Semibold Adobe Systems Incorporated Minion Italic Adobe Systems Incorporated Minion Semibold Italic Adobe Systems Incorporated Minion Bold Adobe Systems Incorporated Minion Bold Italic Adobe Systems Incorporated Minion Regular, SC Adobe Systems Incorporated Minion Semibold, SC Adobe Systems Incorporated Minion Italic SC Adobe Systems Incorporated Minion Semibold Italic, SC Adobe Systems Incorporated Rockwell Monotype Corporation Rockwell Bold Monotype Corporation Rockwell Italic Monotype Corporation Rockwell Bold Italic Monotype Corporation Rockwell Light Monotype Corporation Rockwell Light Italic Monotype Corporation Willow Adobe Systems Incorporated Madrone Adobe Systems Incorporated Adobe Caslon Bold Adobe Systems Incorporated Adobe Caslon Bold Italic Adobe Systems Incorporated Adobe Caslon Regular, SC Adobe Systems Incorporated Adobe Caslon Semibold, SC Adobe Systems Incorporated Poppl-Pontifex Regular H. Berthold AG Poppl-Pontifex Medium H. Berthold AG Poppi-Pontifex Italic H. Berthold AG Poppi-Pontifex Bold H. Berthold AG Poppl-Pontifex Medium Condensed H. Berthold AG Bell Gothic Light Public Domain Bell Gothic Bold Public Domain Bell Gothic Black Public Domain MinionCyrillic Regular Adobe Systems Incorporated MinionCyrillic Semibold Adobe Systems Incorporated MinionCyrillic Italic Adobe Systems Incorporated MinionCyrillic Semibold Italic Adobe Systems Incorporated MinionCyrillic Bold Adobe Systems Incorporated MinionCyrillic Bold Italic Adobe Systems Incorporated ITC Stone Informal International Typeface Corporation ITC Stone Informal Semibold International Typeface Corporation ITC Stone Informal Italic International Typeface Corporation ITC Stone Informal Semibold Italic International Typeface Corporation ITC Stone Informal Bold International Typeface Corporation ITC Stone Informal Bold Italic International Typeface Corporation Trajan Regular Adobe Systems Incorporated Lithos Extra Light Adobe Systems Incorporated Lithos Light Adobe Systems Incorporated Lithos Bold Adobe Systems Incorporated
-17- Gill Sans Monotype Corporation Gill Sans Bold Monotype Corporation Gill Sans Italic Monotype Corporation Gill Sans Bold Italic Monotype Corporation Gill Sans Light Monotype Corporation Gill Sans Light Italic Monotype Corporation Gill Sans Condensed Monotype Corporation Gill Sans Bold Condensed Monotype Corporation Gill Sans Ultra Bold Condensed Monotype Corporation Gill Sans Extra Bold Monotype Corporation Gill Sans Ultra Bold Monotype Corporation Bembo Monotype Corporation Bembo Bold Monotype Corporation Bembo Italic Monotype Corporation Bembo Bold Italic Monotype Corporation Bembo Semibold Monotype Corporation Bembo Semibold Italic Monotype Corporation Bembo Extra Bold Monotype Corporation Bembo Extra Bold Italic Monotype Corporation Rockwell Condensed Monotype Corporation Rockwell Bold Condensed Monotype Corporation Rockwell Extra Bold Monotype Corporation Plantin Monotype Corporation Plantin Bold Monotype Corporation Plantin Italic Monotype Corporation Plantin Bold Italic Monotype Corporation Perpetua Monotype Corporation Perpetua Bold Monotype Corporation Perpetua Italic Monotype Corporation Perpetua Bold Italic Monotype Corporation Nofret Light H. Berthold AG Nofret Light Italic H. Berthold AG Nofret Regular H. Berthold AG Nofret Medium H. Berthold AG Nofret Italic H. Berthold AG Nofret Medium Italic H. Berthold AG Nofret Bold H. Berthold AG Nofret Bold Italic H. Berthold AG Plantin Light Monotype Corporation Plantin Light Italic Monotype Corporation Plantin Semibold Monotype Corporation Plantin Semibold Italic Monotype Corporation Plantin Bold Condensed Monotype Corporation Centaur Regular Monotype Corporation Centaur Bold Monotype Corporation Centaur Italic Monotype Corporation Centaur Bold Italic Monotype Corporation Joanna Regular Monotype Corporation Joanna Bold Monotype Corporation Joanna Italic Monotype Corporation Joanna Bold Italic Monotype Corporation Joanna Semibold Monotype Corporation
-18- Joanna Semibold Italic Monotype Corporation Joanna Extra Bold Monotype Corporation ITC StoneSans Phonetic IPA International Typeface Corporation ITC StoneSans Phonetic Alternate International Typeface Corporation ITC StoneSerif Phonetic IPA International Typeface Corporation ITC StoneSerif Phonetic Alternate International Typeface Corporation Poetica Chancery I Adobe Systems Incorporated Poetica Chancery II Adobe Systems Incorporated Poetica Chancery III Adobe Systems Incorporated Poetica Chancery IV Adobe Systems Incorporated Poetica Roman Small Caps Adobe Systems Incorporated Delta Jaeger Light H. Berthold AG Delta Jaeger Light Italic H. Berthold AG Delta Jaeger Book H. Berthold AG Delta Jaeger Medium H. Berthold AG Delta Jaeger Italic H. Berthold AG Delta Jaeger Medium Italic H. Berthold AG Delta Jaeger Bold H. Berthold AG Delta Jaeger Bold Italic H. Berthold AG Delta Jaeger Outline H. Berthold AG Formata Condensed H. Berthold AG Formata Medium Condensed H. Berthold AG Formata Condensed ltalic H. Berthold AG Formata Med Condensed Italic H. Berthold AG
ITC Legacy Sans Book InternationalTypeface Corporation ITC Legacy Sans Book Italic International Typeface Corporation ITC Legacy Sans Medium International Typeface Corporation ITC Legacy Sans Medium Italic International Typeface Corporation ITC Legacy Sans Bold International Typeface Corporation ITC Legacy Sans Bold Italic International Typeface Corporation ITC Legacy Sans Ultra International Typeface Corporation ITC Legacy Serif Book International Typeface Corporation ITC Legacy Serif Book Italic International Typeface Corporation ITC Legacy Serif Medium International Typeface Corporation ITC Legacy Serif Medium Italic International Typeface Corporation ITC Legacy Serif Bold International Typeface Corporation ITC Legacy Serif Bold Italic International Typeface Corporation ITC Legacy Serif Ultra International Typeface Corporation
(e) Optional Package 4C. "Optional Package 4C" shall consist of the four ------------------- (4) Roman Additional Coded Font Programs fisted in this Paragraph 2(e). -------------- Optional Package 4C may be distributed with Optional Package 35N, Optional Package 65, Optional Package 100, or Optional Package 300, for use with a Licensed System. Helvetica Condensed Linotype-Hell AG and/or its subsidiaries Helvetica Condensed Bold Linotype-Hell AG and/or its subsidiaries Helvetica Condensed Oblique Linotype-Hell AG and/or its subsidiaries Helvetica Condensed Bold Oblique Linotype-Hell AG and/or its subsidiaries
-19- Schedule 2 Licensed Use Royalties for Coded Font Programs for Japanese Typefaces 1. Coded Font Programs for Japanese Typefaces: ------------------------------------------ Upon written notification by OEM, Adobe will provide the Adobe Standard Japanese Character set, which includes JIS, Shift JIS, and EUC encodings of the JIS X 0208 1983 Level 1 and Level 2 characters, plus other characters and encodings as defined in Adobe's Kanji Glyph Collection and Glyph Sets Technical Note #5031, ---------------------------------------------------------- dated November 12, 1990, for the following Coded Font Programs for Japanese Typefaces. Generic characters listed therein are not typeface specific. OEM shall distribute the Coded Font Programs for Japanese Typefaces bundled with or as an upgrade to a Licensed System, only in the following configurations: (a) The first two (2), as listed below [*] (b) The first five (5), as listed below [*] (c) The first seven (7), as listed below, (d) All, as listed below:
Identifying Trademark Trademark Owner --------------------- --------------- Ryumin Light KL Morisawa & Co., Ltd. Gothic Medium BBB Morisawa & Co., Ltd. Futo Min A101 Morisawa & Co., Ltd. Futo Go B101 Morisawa & Co., Ltd. Jun 101 Morisawa & Co., Ltd. Midashi Min MA31 Morisawa & Co., Ltd. Midashi Go MB31 Morisawa & Co., Ltd. ShinseiKaisho CBSK1 Morisawa & Co., Ltd. Ryumin Medium M-KL Morisawa & Co., Ltd. Ryumin Ultra U-KL Morisawa & Co., Ltd. Shin Gothic L (Light) Morisawa & Co., Ltd. Shin Gothic M (Medium) Morisawa & Co., Ltd. Shin Gothic B (Bold) Morisawa & Co., Ltd. Shin Gothic U (Ultra) Morisawa & Co., Ltd.
After receipt of written request from OEM, Adobe will provide the Macintosh compatible Bitmap Fonts for Futo Min A101, Futo Go B101, Jun 101, Midashi Min, MA31, Midashi Go MB31, ShinseiKaisho CBSK1, Ryumin Medium M-KL, Ryumin Bold B- KL, Ryumin Ultra U-KL, Shin Gothic L, Shin Gothic M, Shin Gothic B and Shin -20- [*] Confidential Treatment Requested. Gothic U. OEM may distribute these Bitmap Fonts without additional charge provided that they are used only in conjunction with a Licensed System. Bitmap Fonts for Ryumin Light KL and Gothic Medium BBB will not be provided, since they are available to the End User bundled with Apple's KanjiTalk(TM) system software. 2. Licensed Use Royalties. For the Coded Font Programs for Japanese Typefaces ---------------------- described in Paragraph 1 above which are distributed or used internally by OEM ----------- or its Subsidiaries and bundled as part of a Licensed System or as an upgrade to an existing Licensed System, as permitted hereunder, OEM shall pay Adobe a per Typeface royalty for each Licensed Use of the Coded Font Programs for Japanese Typefaces as described below. (a) Licensed Systems with Color Designated Output Devices [*]: --------------------------------------------------------- For Licensed Systems with a color Designated Output device capable of [*], the per Typeface royalty for internal use or distribution of the Coded Font Programs for Japanese Typefaces shall be calculated using the following procedure and with the tables below: Step 1: Determine the number of each of the Japanese Font Bundles shipped during the quarter. Step 2: Multiply each number of Japanese Font Bundles shipped during the quarter (as determined in Step 1 above) by the applicable Base Royalty per Font Bundle as shown in Table 1 below and aggregate the result. This is the quarterly base aggregate Licensed Use royalties for Coded Font Programs for Japanese Typefaces. [*] -21- [*] Confidential Treatment Requested. [*] -22- [*] Confidential Treatment Requested. [*] -23- [*] Confidential Treatment Requested. [*] (B) Licensed Systems With a Black and White Designated Output Device [*]. -------------------------------------------------------------------- For Licensed Systems with a black and white Designated output Device [*] the per Typeface royalty for internal use or distribution of the Coded Font Programs for Japanese Typefaces can be calculated using the following procedure and with the table below: Step 1: Determine the number of Japanese typefaces shipped during the quarter. Step 2: Multiply the number of Japanese Typefaces shipped during the quarter (as determined in step 1 above) by the applicable Royalty per Typeface as shown in the Royalty Table below and aggregate the result. This is the quarterly aggregate Licensed Use royalties for Coded Font Programs for Japanese Typefaces due for the quarter. [*] -24- [*] Confidential Treatment Requested. (c) Licensed Systems With a Black and White or Color Designated Output ------------------------------------------------------------------ Device greater than 600 dpi. For Licensed Systems with a black and white or ------------ color Designated Output Device capable of [*], the per Typeface royalty for internal use or distribution of the Coded Font Programs for Japanese Typefaces shall be calculated using the following procedure and with the tables below: Step 1: Determine the number of each of the Japanese Font Bundles shipped during the quarter. Step 2: Multiply each number of Japanese Font Bundles shipped during the quarter (as determined in Step 1 above) by the applicable Royalty per Font Bundle as shown in the Royalty Table below and aggregate the result. This is the quarterly aggregate Licensed Use royalties for Coded Font Programs for Japanese Typefaces due for the quarter. [*] [*] Confidential Treatment Requested. APPENDIX NO. 1 EFFECTIVE AS OF SEPTEMBER 18, 1992 ------------ TO CONFIGURABLE POSTSCRIPT(R) INTERPRETER OEM LICENSE AGREEMENT BETWEEN ADOBE SYSTEMS INCORPORATED AND SUPERMAC TECHNOLOGY Name of CPSI Application: Macintosh Level 2 Adobe Software RIP This Appendix sets forth additional and different terms and conditions particular to the Licensed System described below and shall be incorporated by reference into the Configurable PostScript Interpreter OEM License Agreement ("Agreement") between SuperMAC Technology ("OEM") and Adobe Systems Incorporated ("Adobe") effective as of September 18, 1992. Such different or additional ------------ terms are applicable only to the Licensed System described below and in no way alter the terms and conditions applicable to other Licensed Systems incorporated into the Agreement by addition of an appendix. All the terms used in this Appendix shall retain the same meaning as defined in the Agreement and such definitions are incorporated herein by reference. A. Description of CPSI Application: ProofPositive Color Printer Software RIP running on an Apple Macintosh computer. B. Description of Computer System: [*] OEM may use the CPSI Application to generate output from devices other than those listed in this paragraph only within OEM's internal development group and only for testing purposes within that group. New devices must be added to this Appendix by an addendum before OEM may install such devices for use with the CPSI Application outside the development group. If [*]. OEM shall authorize use of the CPSI application to generate output only on devices that have been approved by Adobe in accordance with the provisions as described in this Paragraph. -1- [*] Confidential Treatment Requested. C. Licensed Systems: [*] D. Development Environment - The Adobe Development Environment is the specific computer environment in which Adobe has developed the Adobe Software and tested the Licensed System and which is defined below: (1) Hardware platform: [*] (2) Software platform: Macintosh OS version 7.0, MPW version 3.2. OEM may upgrade the Development Environment to the latest version of both the Hardware platform and the Software platform supplied by Apple or a supplier that provides a compatible computer system faster completion of Milestone #(8) in Paragraph F of this Appendix, provided that the upgrade ----------- Development Environmental described in this Paragraph D. In the event ----------- that in compatibilities are introduced by hardware or software vendor(s), OEM may notify Adobe of such incompatibilities. Adobe will assess these incompatibilities and, if necessary, OEM will upgrade the Loaned Equipment to the upgraded Development Environment. Adobe will communicate the results of the assessment to the OEM. If agreed to by Adobe, upgrades, made at the OEM's request, for incompatibilities introduced outside of the Development Environment described in Paragraph D(1) and D(2), will be provided under ----------------------- the terms of a Continuing Support Agreement or at Adobe's current consulting rates and under applicable terms. -2- [*] Confidential Treatment Requested. E. Adobe Deliverables: (1) Adobe Software: As described in Exhibit A ("Description of Adobe -------------- --------- Software") to the Agreement or as further described herein. Adobe Software will be delivered on 3.5 inch Macintosh diskettes. (2) Demonstration Program(s): The Demonstration Program(s) will be in "C" ------------------------ language source form and will provide OEM with an example of how to use the Adobe Software described in Exhibit A ("Description of Adobe Software") to --------- interpret PostScript language programs and produce faster output. The Demonstration Program(s) will be delivered with the Adobe Software. (3) Other Adobe-Supplied Software: TBD (4) Documentation: The documentation as described below will be delivered ------------- both in hardcopy (1 copy) and in PostScript page description language format on the software distribution medium (1 file per document). a. Supplement to the PostScript Language Reference Manual b. PostScript Language Addendum Template c. CPSI Demonstration Product Guide d. CPSI Product Developer's Guide e. CPSI Read Me First! All of the above specified Documentation is to be used internally solely for the purposes of developing a Licensed System and is to be treated as Confidential Information of Adobe and subject to Paragraph 2.1.6 --------------- ("Nondisclosure") of the Agreement. The PostScript Language Addendum Template supplied by Adobe hereunder is to be used by OEM solely as a guide for customizing and creating the PostScript Language Addendum for this Licensed System. The only Documentation which OEM is permitted to distribute to its End User customers, is the PostScript Language Addendum with the content written by OEM and approved by Adobe. (5) Coded Font Programs: OEM shall bundle the Roman Initial Installation ------------------- Coded Font Programs identified in Paragraph J below and the Roman Additional ----------- Coded Font Programs identified in Paragraph K below with each Licensed System ----------- (hereinafter "Roman Version"). OEM agrees that the [*] Coded Font Programs for Japanese Typefaces identified in Paragraph L of this Appendix shall be bundled ----------- with every Licensed System distributed for use in Japan (hereinafter "Japanese Version"). OEM is not required to bundle the Coded Font Programs for Japanese Typefaces with Licensed Systems distributed for use outside of Japan. However, if OEM decides to distribute Licensed Systems with Coded Font Programs for Japanese Typefaces for use outside of Japan, it shall -3- [*] Confidential Treatment Requested. bundle all of the Coded Font Programs for Japanese Typecasts listed in Paragraph L of this Appendix with each such Licensed System. - ----------- F. Development Schedule and Testing Expectations:
Milestone Description: *Schedule #(1) [*] #(2) [*] #(3) [*] #(4) [*] #(5) [*] #(6) [*] #(7) [*] #(8) [*] #(9) [*] [*] Confidential Treatment Requested.
-4- [*] G. Loaned Equipment: Adobe requires two (2) complete Licensed Systems as described in Paragraph --------- C of this Appendix. Additional Licensed Systems may be required to accelerate - - quality assurance testing. Only one (1) system is required through the warranty period. The Loaned Equipment is being supplied to Adobe for the purpose of testing the CPSI Application Object for use with the Licensed System and for testing and reference purposes when evaluating draft PPD Files and PostScript Language Addendum. Following Adobe testing and acceptance of the CPSI Application Object, and for as long as Adobe is providing testing, warranty or Continuing Support services, at Adobe's request OEM will replace the hardware and software comprising the Loaned Equipment with the most recent version thereof. Terms and conditions related to the obligations of the parties concerning OEM-Loaned Equipment are set forth in Paragraph 3.4.1 ("OEM-Loaned Equipment") --------------- of the Agreement. H. Software License Fee: [*] I. Applicable Royalties: (1) Royalties for Worldwide Distribution of Licensed Systems: -------------------------------------------------------- (a) Basis for Payments Hereunder. All royalties due to Adobe by OEM shall ---------------------------- be paid in U.S. dollars regardless of the location of the transaction or the type of currency used to consummate the transaction. All List Prices, as described below, shall mean OEM's published List Price, established in good faith, for quantity one (1) of the fully functioning Licensed System described hereunder as distributed to End Users in both Roman and Japanese Versions. Such calculations shall be exclusive of amounts received for taxes, interest, non-warranty maintenance and installation charges, finance charges, insurance, shipping and handling. -5- [*] Confidential Treatment Requested. (i) U.S. List Price. The U.S. List Price shall mean OEM's published --------------- list price to End Users in quantity one (1) for a fully functioning Licensed System as described in Paragraph C, for ----------- distribution in the United States. OEM shall pay the per copy royalty based upon the royalty schedule set forth herein in Paragraph I(1)(b)(i) below using the U.S. List Price for a fully -------------------- functioning Licensed System to calculate the per copy royalty. The Licensed System U.S. List Price shall apply for the purpose of royalty calculations hereunder for distribution of all Roman Versions of the Licensed System throughout the world. (ii) Japanese List Price. The Japanese List Price shall mean OEM's ------------------- published list price in Japanese yen for quantity one (1) for a fully functioning Licensed System as described in Paragraph C for ----------- distribution in Japan. OEM shall pay the per copy royalty based upon the royalty schedule set forth herein in Paragraph --------- I(1)(b)(ii) below by converting the Japanese List Price in yen to ----------- U.S. Dollars for a fully functioning Licensed System to calculate the per copy royalty. The Japanese List Price shall be converted into U.S. Dollars at a rate equal to the average of the exchange rates quoted in the Wall Street Journal on the first and last days of the relevant quarterly accounting period defined in Paragraph 7.5 ("Payment of Royalties") of the Agreement and then ------------- used to calculate the royalty due hereunder. (b) [*] (i) Roman Versions. For the Roman Versions of the Licensed System, -------------- OEM shall pay Adobe a royalty equal to [*] of the U.S. List Price for each Licensed System which is distributed or used internally by OEM or its Subsidiaries. (ii) Japanese Versions. For the Japanese Versions of the Licensed ----------------- System, OEM shall pay Adobe a royalty equal to [*] of the Japanese List Price for each Licensed System which is distributed or used internally by OEM or its Subsidiaries. (2) Coded Font Program Royalties. Both the Roman and Japanese Versions of the ---------------------------- Licensed System contain seventeen (17) royalty free Roman Initial Installation Coded Font Programs as defined in Paragraph J of this Appendix ----------- -6- [*] Confidential Treatment Requested. No. 1 [*]. (a) Royalties for Roman Additional Coded Font Programs. OEM shall pay the -------------------------------------------------- following royalty per Typeface for each copy of the Roman Additional coded Font Programs specified in Paragraph K of this Appendix No. 1 which are distributed ----------- or used internally by OEM and bundled as part of a Licensed System: [*] (b) Royalties for Coded Font Programs for Japanese Typefaces: The -------------------------------------------------------- royalties for the Coded Font Programs for Japanese Typefaces, described in Paragraph L of this Appendix No. 1 and bundled as part of the Licensed System, - ----------- shall be [*]. J. Roman Initial Installation Coded Font Programs: Adobe will provide the graphic characters specified in ISO 8859-1: 1987, Latin alphabet No. 1, or symbol characters where appropriate, for the following Roman Initial Installation Coded Font Programs:
Identifying Trademark Typeface Trademark Owner - ---------------------- ------- --------------- Helvetica Linotype-Hell AG and/or its subsidiaries Helvetica Bold Linotype-Hell AG and/or its subsidiaries Helvetica Oblique Linotype-Hell AG and/or its subsidiaries Helvetica Bold Oblique Linotype-Hell AG and/or its subsidiaries Times Roman Linotype-Hell AG and/or its subsidiaries Times Bold Linotype-Hell AG and/or its subsidiaries Times Italic Linotype-Hell AG and/or its subsidiaries Times Bold Italic Linotype-Hell AG and/or its subsidiaries Symbol Public Domain Courier Public Domain Courier Bold Public Domain Courier Oblique Public Domain Courier Bold Oblique Public Domain Helvetica Narrow Linotype-Hell AG and/or its subsidiaries Helvetica Narrow Bold Linotype-Hell AG and/or its subsidiaries Helvetica Narrow Oblique Linotype-Hell AG and/or its subsidiaries Helvetica Narrow Bold Oblique Linotype-Hell AG and/or its subsidiaries
-7- [*] Confidential Treatment Requested. K. Roman Additional Coded Font Programs: Upon written notification by OEM, Adobe will provide the graphic characters specified in ISO 8859-1: 1987, Latin alphabet No. 1, or symbol characters where appropriate, for the following Roman Additional Coded Font Programs:
Identifying Trademark Typeface Trademark Owner - ------------------------- ------------- ---------------------------------------- Palatino Roman Linotype-Hell AG and/or its subsidiaries Palatino Italic Linotype-Hell AG and/or its subsidiaries Palatino Bold Linotype-Hell AG and/or its subsidiaries Palatino Bold Italic Linotype-Hell AG and/or its subsidiaries ITC Avant Garde Gothic Book International Typeface Corporation ITC Avant Garde Gothic Book Oblique International Typeface Corporation ITC Avant Garde Gothic Demi International Typeface Corporation ITC Avant Garde Gothic Demi Oblique International Typeface Corporation ITC Bookman Light International Typeface Corporation ITC Bookman Light Italic International Typeface Corporation ITC Bookman Demi International Typeface Corporation ITC Bookman Demi Italic International Typeface Corporation ITC Zapf Dingbats International Typeface Corporation ITC Zapf Chancery Medium Italic International Typeface Corporation New Century Schoolbook Roman Public Domain New Century Schoolbook Italic Public Domain New Century Schoolbook Bold Public Domain New Century Schoolbook Bold Italic Public Domain
L. Coded Font Programs for Japanese Typefaces: Adobe will provide the Adobe Standard Japanese Character set, which includes all of the characters in Adobe's Kanji Glyph Collections and Glyph Sets -------------------------------------- Technical Note #5031 dated November 12, 1990, with the exception of generic -------------------- characters listed therein, for the following Coded Font Programs for Japanese Typefaces:
Identifying Trademark Trademark Owner --------------------- --------------- Ryumin Light KL Morisawa & Company Ltd. Gothic Medium BBB Morisawa & Company Ltd.
Such Coded Font Programs for Japanese Types will be distributed on mutually agreeable distribution media and will be encrypted and copy-protected against unauthorized duplication in a manner to be specified by Adobe. Special character set encodings are not provided. M. Protection Mechanisms: (1) Adobe and OEM shall mutually agree on an execution control mechanism which OEM shall utilize as a copy protection device in each Licensed System distributed under this Appendix. (2) Adobe and OEM shall mutually agree upon a secure production method for the Japanese font copy-protected keys. -8- N. Designated Representatives: (3) Technically qualified OEM representative to respond to information requested by Adobe: Jim Pendergast SuperMAC Technology Phone # (408) 254-2202 485 Potrero Ave. Fax # (408) 735-7250 Sunnyvale, CA 94086 (4) Technically qualified Adobe representative to respond to information requested by OEM: Ivor Durham Adobe Systems Incorporated Phone # (415) 962-2183 1585 Charleston Road Fax # (415) 961-3769 Mountain View, CA 94039-7900 (5) Adobe Contract Representative: Ron Richter Adobe Systems Incorporated Phone # (415) 962-6650 1585 Charlston Road Fax # (415) 965-7430 Mountain View, CA 94039-7900 (6) OEM Contact Representative: Ron Moore SuperMAC Technology Phone # (408) 254-2202 485 Potrero Ave. Fax # (408) 735-7250 Sunnyvale, CA 94086 IN WITNESS WHEREOF, each of Adobe and OEM has executed this Appendix No. 1 by its duly authorized officer. ADOBE SYSTEMS INCORPORATED SUPERMAC TECHNOLOGY By: /s/ Steve MacDonald By: /s/ Louis J. Doctor -------------------------------- ----------------------------------- Name: Steve MacDonald Name: Louis J. Doctor ----------------------------- --------------------------------- Title: V.P. Sys. Products Div. Title: V.P. Business Dev't ----------------------------- --------------------------------- Date: Sept. 18, 1992 Date: Sept. 17, 1992 ------------------------------ ---------------------------------- -9- Schedule 1 to Appendix No. 1 Specifications for the Configurable Postscript Interpreter -10- APPENDIX NO. 3 EFFECTIVE AS OF March 21 1994 ------------------------- TO THE CONFIGURABLE POSTSCRIPT(TM) INTERPRETER OEM LICENSE AGREEMENT BETWEEN ADOBE SYSTEMS INCORPORATED AND SUPERMAC TECHNOLOGY INCORPORATED Name of CPSI Application: Power PC Level 2 Adobe Software RIP This Appendix sets forth additional and different terms and conditions particular to the Licensed System described below and shall be incorporated by reference into the Configurable PostScript Interpreter OEM License Agreement ("Agreement") between SuperMac Technology Incorporated ("OEM") and Adobe Systems Incorporated ("Adobe") effective as of September 18, 1992 and as amended by Amendment No. 1 effective July 28, 1993. Such different or additional terms are applicable only to the Licensed System described below and in no way alter the terms and conditions applicable to other Licensed Systems incorporated into the Agreement by addition of an appendix. All the terms used in this Appendix shall retain the same meaning as defined in the Agreement and such definitions are incorporated herein by reference. A. Description of CPSI Application: SuperMac Color Printer Software RIP running on an Apple Power Macintosh computer. B. Description of Computer System: [*] -1- [*] Confidential Treatment Requested (2) One Designated Output Device from the following set: a. ProofPositive full page color printer, 300 dpi, dye- sublimation b. ProofPositive two-page color printer, 300 dpi, dye sublimation c. Fuji Xerox A Color copier, 400 dpi, laser d. Xerox MajestiK color copier, 400 dpi, laser OEM may use the CPSI Application to generate output from devices other than those listed in this paragraph only within OEM's internal development group and only for testing purposes within that group. New devices must be added to this Appendix by an addendum before OEM may install such devices for use with the CPSI Application outside the development group. If OEM wishes to add any other device, it must [*] OEM shall authorize use of the CPSI Application to generate output only on devices that have been approved by Adobe in accordance with the provisions as described in this Paragraph. OEM may upgrade the Computer System to the latest version of both the hardware platform and the software platform supplied by a manufacturer or a supplier that provides a compatible computer system after completion of Milestone #(13) in Paragraph F of this Appendix, provided that the upgraded Computer System is - ----------- object code compatible with the original Computer System described in this Paragraph B. In the event that incompatibilities are introduced by hardware or - ----------- software vendor(s), OEM may notify Adobe of such incompatibilities. Adobe will assess these incompatibilities and, if necessary, OEM will upgrade the Loaned Equipment to the upgraded Computer System. Adobe will communicate the results of this assessment to the OEM. If agreed to by Adobe, upgrades to the Adobe Software made by Adobe at OEM's request for incompatibilities introduced outside of the Computer System described in Paragraph B, will be provided under the ----------- terms of a Continuing Support Agreement or at Adobe's current consulting rates and under applicable terms. OEM may not distribute an upgraded Computer System that is not object code compatible with the original Computer System without first submitting such upgrade to testing and acceptance in accordance with Paragraph 3.8 ("Testing") of the Agreement. - ------------- C. Licensed System: [*] -2- [*] Confidential Treatment Requested. D. The Adobe Development environment is the specific computer environment in which Adobe has developed and tested the Adobe Software and which is defined below: a. Hardware platform: Same as described in Paragraph B(1). -------------- b. Software platform: Same as described in Paragraph B(1). -------------- E. Adobe Deliverables: (1) Adobe Software: As described in Exhibit A ("Description of Adobe -------------- --------- Software") to the Agreement and in the PostScript Language Reference Manual (Second Edition). See also Exhibit G ("Configurable PostScript --------- Interpreter Functional Specification") of the Agreement. Adobe Software will be on Macintosh diskettes. (2) Demonstration Program(s): The Demonstration Program(s) will be in "C" ------------------------ language source for-in and will provide OEM with an example of how to use the Adobe Software described in Exhibit A ("Description of Adobe --------- Software) of the Agreement to interpret PostScript language programs and produce raster output. See also Exhibit G ("Configurable --------- PostScript Interpreter Functional Specification") of the Agreement. The Demonstration Program(s) will be delivered with the Adobe Software. (3) Other Adobe-Supplied Software: Aftermarket font conversion and ----------------------------- installation utilities software for the Roman Initial Installation Coded Font Programs listed in Paragraph J, to be bundled with and ----------- used solely with a Licensed System. (4) Documentation: The Documentation as described below will be ------------- delivered in hard copy (1 copy). a. CPSI Read Me First! -3- [*] Confidential Treatment Requested. b. CPSI Developer's Guide Companion (includes Functional Specification) c. CPSI Demonstration Software Guide d. Supplement to the PostScript Language Reference Manual e. PostScript Language Addendum Template All of the above specified Documentation is to be used internally solely for the purposes of developing a Licensed System and is to be treated as confidential information of Adobe and subject to Paragraph --------- 2.1.6 ("Nondisclosure") of the Agreement. The PostScript Language ----- Addendum Template supplied by Adobe hereunder is to be used by OEM solely as a guide for customizing and creating the PostScript Language Addendum for this Licensed System. The only Documentation which OEM is permitted to distribute to its End User customers is the PostScript Language Addendum with the content written by OEM and approved by Adobe. (5) Coded Font Programs: The Roman Initial Installation Coded Font ------------------- Programs listed in Paragraph J will be delivered on the Adobe ----------- Software distribution medium. The Coded Font Programs for Japanese Typefaces listed in Paragraph K will be delivered on mutually ----------- agreeable distribution media per Paragraph K. ----------- (6) [*] F. Development Schedule and Testing Expectations:
MILESTONE DESCRIPTION *SCHEDULE: #(1) [*] #(2) [*]
-4- [*] Confidential Treatment Requested.
MILESTONE DESCRIPTION *SCHEDULE --------------------- --------- #(3) [*] #(4) [*] #(5) [*] #(6) [*] #(7) [*] #(8) [*]
-5- [*] Confidential Treatment Requested.
MILESTONE DESCRIPTION SCHEDULE --------------------- -------- #(9) #(10) [*] #(11) #(12) #(13)
[*] -6- [*] Confidential Treatment Requested. G. OEM Loaned Equipment: [*] H. [*] I. Applicable Royalties: (1) Royalties for Worldwide Distribution of Licensed Systems: -------------------------------------------------------- a. Basis for Payments Hereunder. All royalties due to Adobe by ---------------------------- OEM shall be paid in U.S. Dollars regardless of the location of the transaction or the type of currency used to consummate the transaction . b. Licensed Use Royalty. The Licensed Use royalty for CPSI -------------------- Application and for the Coded font Programs described herein shall apply to all Licensed Systems and Coded Font Programs used internally by OEM or its Subsidiaries and to all Licensed Systems and Coded Font Programs sold, leased or otherwise disposed of by OEM or its Subsidiaries directly or indirectly to End Users. royalties are calculated on a per Licensed Use basis and OEM shall ensure that it accounts for and pays royalties for each Licensed Use of the CPSI Application Object and Coded Font Programs. c. List Prices. All List Prices, as described below, shall mean ----------- OEM's published List Price, established in good faith, for quantity one (1) of the fully functioning Licensed System described hereunder as distributed to End Users in both Roman and Japanese Versions. Such calculations shall be exclusive of amounts received for taxes, interest, non-warranty maintenance and installation charges, insurance, shipping and handling costs. (i) U.S. List Price. The U.S. List Price shall mean OEM's --------------- published List Price in U.S. Dollars to End Users for quantity one (1) of a Licensed System with Minimum Configuration as described in Paragraph C above, ----------- for distribution in the United States. The U.S. List Price of the Licensed System shall apply for the purpose of royalty calculations hereunder for each Licensed Use of a Roman Version (as described in Paragraph I(2)a below) of the --------------- Licensed -7- [*] Confidential Treatment Requested. System distributed for use throughout the world excluding Japan where the distribution of Licensed Systems is limited to Japanese Versions. (ii) Japanese List Price. The Japanese List Price shall ------------------- mean OEM's published List Price in Japanese yen to End Users for quantity one (1) of a Japanese Version (with two (2) or five (5) Japanese Typefaces as described in Paragraph I(2)b below) of a Licensed System with Minimum --------------- Configuration as described in Paragraph C above, for distribution in Japan. The ----------- Japanese List Price shall apply for the purpose of royalty calculations hereunder for each Licensed Use of a Japanese Version of the Licensed System distributed for use throughout the world. The Japanese List Price shall be converted into U.S. Dollars at a rate equal to the average of the exchange rates quoted in the Wall Street Journal at the end of the first and last days of the relevant quarterly accounting period defined in Paragraph 7.5 ("Payment of ------------- Royalties") of the Agreement. OEM shall use the converted Japanese List Price to calculate the royalty for CPSI Application hereunder. (2) Licensed Use Loyalties for CPSI Application: ------------------------------------------- a. Roman Versions. OEM shall bundle the Roman Initial Installation -------------- Coded Font Programs identified in Paragraph J with each Licensed System ----------- distributed hereunder (a "Roman Version"). OEM may also distribute a Roman Version bundled with either an additional twenty-two (22) Roman Additional Coded Font Programs, as identified in Group I of Paragraph K(1) below or with all of -------------- the Roman Additional Coded Font Programs identified in Group I and the additional Roman Additional Coded Font Programs identified in Group 2 of Paragraph K(1) below. If OEM elects to distribute the Roman Additional Coded - -------------- Font Programs identified in Group 2, OEM must also bundle the Roman Additional Coded Font Programs identified in Group 1. For each Roman Version of the Licensed System which is distributed or used internally (beyond the number of Licensed Uses provided royalty-free for Internal Use under Paragraph I(6) below) by OEM or its Subsidiaries hereunder, -------------- OEM shall pay Adobe a per Licensed Use royalty based on the U.S. List Price of a Licensed System with Minimum Configuration using the following method of royalty calculation: [*] b. Japanese Versions. OEM agrees that with each Licensed System ----------------- distributed for use in Japan (a "Japanese Version"), it shall bundle the same Roman Coded Font Programs as specified in Paragraph I(2)a above for Roman --------------- Versions. Additionally, OEM shall bundle the [*] coded Font Programs for Japanese Typefaces identified in Paragraph K(2)(i), or [*] ----------------- -8- [*] Confidential Treatment Requsted. Coded Font Programs for Japanese Typefaces identified in Paragraph K(2)(ii), ------------------ with every Licensed System distributed for use in Japan. OEM is not required to bundle the Coded Font Programs for Japanese Typefaces with Licensed Systems distributed for use outside of Japan. However, if OEM decides to distribute Licensed Systems with Coded Font Programs for Japanese Typefaces for use outside of Japan, it shall bundle the Coded Font Programs for Japanese Typefaces in accordance with the above paragraph. For each Japanese Version of the Licensed System which is distributed or used internally [*] (3) Software Upgrade Royalties: --------------------------- "Software Upgrades" means the installation of both the CPSI Application Object and Coded Font Programs in a Licensed System already distributed under license in place of CPSI Application Object and Coded Font Programs previously installed in such Licensed System for the purpose of updating, enhancing or extending a Licensed System. To qualify for Software Upgrade pricing, OEM must either (i) promptly destroy the media containing the prior version of the CPSI Application Object and Coded Font Programs, or (ii) return the media containing the CPSI Application Object and Coded Font Programs to the factory where they were manufactured, and immediately accrue a new royalty when such CPSI Application and Coded Font Programs are shipped as part of a new s obligated to account for any of the replaced CPSI Application Object and Coded Font Programs which are not destroyed. OEM shall keep accurate records of the number of Software Upgrades which it distributes to its customers and the disposition of the corresponding CPSI Application Object and Coded Font Programs replaced by the Software Upgrades. OEM shall submit reports containing such Software Upgrade information in accordance with its reporting requirements pursuant to Paragraph 7.5 ("Payment ------------- of Royalties") of the Agreement. In addition, upon request from Adobe, OEM shall certify to Adobe in writing signed by its authorized representative, that it has fully complied with the requirement contained in this Paragraph I(3). -------------- [*] -9- [*] Confidential Treatment Requested. [*] The per copy royalty for each Coded Font Program not previously included in the unit being upgraded shall be determined in accordance with Paragraph I(5) below -------------- for each Roman and Japanese Typeface which is part of the Software Upgrade. (4) Hardware Upgrades for Distribution Worldwide: --------------------------------------------- [*] OEM shall pay a Hardware Upgrade royalty based on the applicable U.S. or Japanese List Price to End Users for the Hardware Upgrade equal to [*] of the applicable End User List Price. (5) Licensed Use Royalty for Coded Font Programs: --------------------------------------------- a. Licensed Use Royalties for Roman Initial Installation Coded Font ---------------------------------------------------------------- Programs. The seventeen (17) Roman Initial Installation Coded Font Programs - -------- specified in Paragraph J of this Appendix No. 3 and bundled with a Licensed ----------- System [*]. b. Licensed Use Royalties for Roman Additional Coded Font Programs. OEM ---------------------------------------------------------------- shall pay the following royalty per Typeface or sets, as applicable, for each Licensed Use of the Roman Additional Coded Font Programs specified in Paragraph --------- K of this Appendix No. 3 which are distributed or used internally by OEM or its - - subsidiaries and bundled as part of a Licensed System: [*] -10- [*] Confidential Treatment Requested. [*] c. Licensed Use Royalties for Coded Font Programs for Japanese ----------------------------------------------------------- Typefaces. For the Coded Font Programs for Japanese Typefaces described in - --------- Paragraph K(2) which are distributed or used internally by OEM or its - -------------- Subsidiaries and bundled as part of a Licensed System, OEM shall pay Adobe a per Typeface royalty for each Licensed Use of the Coded Font programs for Japanese Typefaces as follows: [*] -11- [*] Confidential Treatment Requested. J. Roman Initial Installation Coded Font Program: Adobe will provide the graphic characters specified in ISO 8859-1: 1987, Latin alphabet No. 1 and symbol characters as applicable, for the following Roman Initial Installation Coded Font Programs:
IDENTIFYING TRADEMARK TYPEFACE TRADEMARK OWNER ----------------------- ------------------------------ --------------------------------------------- Helvetica Linotype-Hell AG and/or its subsidiaries Helvetica Bold Linotype-Hell AG and/or its subsidiaries Helvetica Oblique Linotype-Hell AG and/or its subsidiaries Helvetica Bold Oblique Linotype-Hell AG and/or its subsidiaries Times Roman Linotype-Hell AG and/or its subsidiaries
IDENTIFYING TRADEMARK TYPEFACE TRADEMARK OWNER ----------------------- ----------------------- --------------------------------------------- Times Bold Linotype-Hell AG and/or its subsidiaries Times Italic Linotype-Hell AG and/or its subsidiaries Times Bold Italic Linotype-Hell AG and/or its subsidiaries Symbol (Public Domain) Courier (Public Domain) Courier Bold (Public Domain) Courier Oblique (Public Domain) Courier Bold Oblique (Public Domain) Helvetica Narrow Linotype-Hell AG and/or its subsidiaries Helvetica Narrow Bold Linotype-Hell AG and/or its subsidiaries Helvetica Narrow Oblique Linotype-Hell AG and/or its subsidiaries Helvetic Narrow Bold Oblique Linotype-Hell AG and/or its subsidiaries
K. Additional Coded Font Programs: (1) Roman Additional Coded Font Programs: Upon written notification by OEM, Adobe will provide the graphic. characters specified in ISO 8859-1: 1987, Latin alphabet No. 1 and symbol characters as applicable, for the Roman Additional Coded Font Programs listed in Group 1 below. Upon written notification by OEM, Adobe will provide the graphic characters specified in LSO 8859-1: 1987, Latin alphabet No. 1 and symbol characters, as applicable, for the Roman Additional Coded Font Programs listed in. Group 2 below. [*] Group 1: - --------
IDENTIFYING TRADEMARK TYPEFACE TRADEMARK OWNER ------------------------ ----------------------- --------------------------------------------- ITC Avant Garde Gothic Book International Typeface Corporation ITC Avant Garde Gothic Book Oblique International Typeface Corporation ITC Avant Garde Gothic Demi International Typeface Corporation ITC Avant Garde Gothic Demi Oblique International Typeface Corporation ITC Bookman Light International Typeface Corporation ITC Bookman Light Italic International Typeface Corporation
-12- [*] Confidential Treatment Requested. ITC Bookman Demi International Typeface Corporation ITC Bookman Demi Italic International Typeface Corporation New Century Schoolbook Roman Public Domain New Century Schoolbook Bold Public Domain New Century Schoolbook Italic Public Domain New Century Schoolbook Bold Italic Public Domain ITC Zapf Chancery Medium Italic International Typeface Corporation ITC Zapf Dingbats International Typeface Corporation Palatino Roman Linotype-Hell AG and/or its subsidiaries Palatino Bold Linotype-Hell AG and/or its subsidiaries Palatino Italic Linotype-Hell AG and/or its subsidiaries Palatino Bold Italic Linotype-Hell AG and/or its subsidiaries Helvetica Condensed Linotype-Hell AG and/or its subsidiaries Helvetica Condensed Bold Linotype-Hell AG and/or its subsidiaries Helvetica Condensed Oblique Linotype-Hell AG and/or its subsidiaries Helvetica Condensed Bold Oblique Linotype-Hell AG and/or its subsidiaries
Group 2: - --------
IDENTIFYING TRADEMARK TYPEFACE TRADEMARK OWNER ------------------------ -------------------------- ---------------------------------------------- Adobe Caslon(TM) Regular Adobe Systems Incorporated Adobe Caslon Italic Adobe Systems Incorporated Adobe Caslon Semibold Adobe Systems Incorporated Adobe Caslon Semibold Italic Adobe Systems Incorporated Adobe Garamond(TM) Regular Adobe Systems Incorporated Adobe Garamond Italic Adobe Systems Incorporated Adobe Garamond Bold Adobe Systems Incorporated Adobe Garamond Bold Italic Adobe Systems Incorporated Barmeno(TM) Regular H. Berthold AG Barmeno Medium H. Berthold AG Barmeno Bold H. Berthold AG Barmeno Extra Bold H. Berthold AG Lithos(TM) Regular Adobe Systems Incorporated Lithos Black Adobe Systems Incorporated Trajan Bold Adobe Systems Incorporated Adobe Wood Type(TM)2 Ornaments Adobe Systems Incorporated Blackoak(TM) Regular Adobe Systems Incorporated Carta(TM) Map Symbols Adobe Systems Incorporated Tekton(TM) Regular Adobe Systems Incorporated Tekton Bold Adobe Systems Incorporated Park Avenue(R) Regular Kingsley/ATF Type Corporation Poetica 2 Supplement Ornaments Adobe Systems Incorporated Kaufmann(R) Regular Kingsley/ATF Type Corporation Americana(R) Regular Kingsley/ATF Type Corporation Americana Extra Bold Kingsley/ATF Type Corporation Parisian Regular Kingsley/ATF Type Corporation Formata(R) Regular H. Berthold AG Formata Medium H. Berthold AG Formata Italic H. Berthold AG Formata Medium Italic H. Berthold AG
After receipt of written request from OEM, Adobe will provide the Macintosh compatible Bitmap Fonts for the Roman Additional Coded Font Programs listed in Group 1 and in Group 2 without additional charge. These Bitmap Fonts can only be used in conjunction with a Licensed System. -13- (2) Coded Font Programs for Japanese Typefaces: Upon written notification by OEM, Adobe will provide the Adobe Standard Japanese Character Set, which includes all of the characters, in Adobe's Kanji Glyph Collection and Glyph Sets Technical Note #5031, dated November ---------------------------------------------------------- 12, 1990, with the exception of generic characters listed therein, for the following Coded Font Programs for Japanese Typefaces. [*]
IDENTIFYING TRADEMARK TRADEMARK OWNER ------------------------ --------------------------------- Ryumin Light KL Morisawa & Co., Ltd. Gothic Medium BBB Morisawa & Co., Ltd. Futo Min A101 Morisawa & Co., Ltd. Futo Go B101 Morisawa & Co., Ltd. June 101 Morisawa & Co., Ltd.
Such Coded Font Programs for Japanese Typefaces will be distributed on mutually agreeable distribution media and will be encrypted and copy protected against unauthorized duplication in a manner to be specified by Adobe. [*] Special character set encodings are not provided. OEM may not distribute additional Coded Font Programs for Japanese Typefaces in an unbundled form for the purpose of upgrading an existing Licensed System from [*] for Japanese Typefaces. If OEM desires to offer to customers additional Coded Font Programs for Japanese Typefaces, it may license the additional [*] aftermarket fonts in retail product version directly from Adobe or Morisawa to provide to OEM's End Users. After receipt of written request from OEM, Adobe will provide the Macintosh compatible Bitmap Fonts for Futo Min A101, Futo Go B101 and Jun 101 without additional charge. These Bitmap Fonts can only be used in conjunction with a Licensed System. Bitmap Fonts for Ryumin light KL and Gothic Medium BBB will not be provided, since they are available to the End User bundled with Apple's KanjiTalk(TM) system software. L. Protection Mechanisms: (1) Adobe and OEM shall mutually agree on a License Management Mechanism which OEM shall utilize as a copy protection device in each -14- [*] Confidential Treatment Requested. Licensed System distributed under this appendix and as a way of ensuring that use of the CPSI Application Object and Coded Font Programs is limited to Licensed Uses. (2) OEM shall implement the os_serialnumber ( ) library procedure to guarantee that it returns a unique 32 bit identifier for each Licensed System . (3) Adobe and OEM shall mutually agree upon a secure production method for the Japanese font copy-protection keys. (4) All Coded Font Programs for Japanese Typefaces bundled with each Licensed System shall be keyed to such Licensed System's unique 32 bit identifier. M. Provisions for Raster File Output: The SuperMac Power PC Level 2 Adobe Software RIP may be used to generate raster files from PostScript files for use as a print preview or with a photo retouch or paint software package of an End User's choice residing on any workstation connected to the Licensed System. The SuperMac Power PC Level 2 Adobe Software RIP may be used to generate raster files in [*]. The raster file format shall be Unedited to the format characteristics of the Designated Output Device or to 150 dpi or less for output to a display. [*] N. Adobe Product Certification and Shipment Standards: The following Adobe standards shall apply for purposes of this Appendix No. 3: [*] -15- [*] Confidential Treatment Requested. [*] O. Designated Representatives (1) Technically qualified OEM Representative to respond to information requested by Adobe: Richard Falk Phone (408) 541-5207 SuperMac Technology Incorporated FAX (408) 541-6150 215 Moffett Park Drive Sunnyvale, CA 94089-1374 (2) Technically qualified Adobe representative to respond to information requested by OEM: Ivor Durham Phone (415) 962-2183 Adobe Systems Incorporated FAX (415) 961-4022 1585 Charleston Road Mountain View, CA 94039-7900 (3) Adobe Contract Representative: Jeffrey Eid Phone (415) 962-3962 Adobe Systems Incorporated FAX (415) 965-7430 1585 Charleston Road Mountain View, CA 94039-7900 -16- [*] Confidential Treatment Requested. (4) OEM Contract Representative: Mark Housley Phone (408) 541-5215 SuperMac Technology Incorporated FAX (408) 541-6150 215 Moffett Park Drive Sunnyvale, CA 94089-1374 IN WITNESS WHEREOF, OEM and Adobe have caused this Appendix No. 3 to be executed by their duly authorized officers. ADOBE: OEM: ADOBE SYSTEMS INCORPORATED SUPERMAC TECHNOLOGY INCORPORATED By: /s/ M. Bruce Nakao By: /s/ Jay Torborg --------------------------------- --------------------------- Print Print Name: M. Bruce Nakao Name: Jay Torborg -------------------------------- -------------------------- Title: Sr. VP & CFO Treasurer & Title: VP Engineering ------------------------------- ------------------------- Assistant Secretary ----------------------- Date: 3/21/1994 Date: 3/18/94 -------------------------------- -------------------------- -17- EX-10.6 9 XEROX & SMT HARDWARE PURCHASE DEVELOPMENT LICENSE EXHIBIT 10.6 Xerox & SMT Hareware Purshase and Software Development/License Agreement TABLE OF CONTENTS I. Definitions II. Products Development Work III. Licensed Software Development Work IV. Purchase and Sale of Products and License of Licensed Software V. Documentation and Support VI. Quality Assurance VII. Term and Termination VIII. Deliveries IX. Product And Licensed Software Changes X. Agency Approval and Safety XI. Consumables and Emergency Maintenance Support XII. Warranties XIII. Training XIV. [*] XV. Confidential and Proprietary Information XVI. Limitation of Liability XVII. Export Control XVIII. Independent Product Development XIX. Force Majeure XX. Notices XXI. Points of Contact XXII. Headings XXIII. Amendment XXIV. Assignment XXV. Product Recycling XXVI. Severability XXVII. Waiver XXVIII. Survival XXIX. Ethical Standards XXX. Arbitration XXXI. Nonpublicity XXXII. Controlling Law XXXIII. Controlling Language XXXIV. Remedies Cumulative XXXV. Integration ATTACHMENT SCHEDULE I. Specifications II. EIQP - 1000 III. Pricing IV. Development Work Schedule V. Primary Point of Contact X. Technical Support
[*] CONFIDENTIAL TREATMENT REQUESTED 1 Xerox & SMT Hardware Purchase and Software Development/License Agreement HARDWARE PROCUREMENT AND SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT This Agreement is made and entered into between SuperMac Technology, Inc., a corporation organized under the laws of the State of Delaware, with its principal offices in Sunnyvale, CA. (hereinafter referred to as "Seller") and Xerox Corporation, a corporation organized under the laws of the State of New York, U.S.A., with an office in El Segundo, CA. (hereinafter referred to as "Xerox" or "Buyer"), upon the terms and conditions set forth below. 1. DEFINITIONS 1.01 Accessories - "Accessories" shall mean an item of optional equipment marketed by Seller and which can or is specifically designed to be used in connection with Equipment and which enhances the features or functionality of such Equipment, whether or not connected to Equipment by electrical, electronic, or mechanical means. 1.02 Buyers - shall mean Xerox or Xerox Affiliated Companies, as the case may ------ be. 1.03 "Derivative Works" - shall mean any work based on, and derived from, the ---------------- original Licensed Software, which derivation was created or developed, at the expense of, or on the initiative of, Xerox as-additionally detailed in 3.01. If, however, title to any Derivative Work resides in Seller, any such Derivative Work shall be automatically deemed as Licensed Software. 1.04 "Documentation" means 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 customarily needed for use with Licensed Software. 1.05 Effective Date - shall mean the date on which this Agreement is fully -------------- executed by the parties. 1.06 Equipment - shall mean Xerox Private Label versions of Seller's equipment --------- and Accessories as set forth in Attachment 1 and modifications, enhancements and improvements thereto which are made pursuant to Article VII herein. 1.07 "Licensed Software" - shall mean all software and Documentation created or ------------------- developed, pursuant to this Agreement, from a certain computer program which Seller has either created, or has the ownership of, Documentation, and related written materials, ("Underlying Software") and conforming to the Specifications set forth in Attachment hereof, and shall include all modifications, improvements, enhancements, additions, Derivative Works, updates, releases and versions thereof. 1.08 Private Label - shall mean Equipment, specified Accessories, supplies, ------------- Spares, or Licensed Software with Xerox or Xerox Affiliated Companies' trademarks and logos as identified in Attachment 1 or Xerox or Xerox Affiliated Companies' or their respective customers' trademarks, tradedress, and logos thereon. 1.09 Production Month - shall mean the calendar month in which production of ---------------- Products or Licensed Software is scheduled. 1.10 Products - shall mean Equipment, Accessories, and Supplies. -------- 1.11 Spares - shall mean spare parts for the Equipment or Accessories and ------ modifications, enhancements and improvements thereto which are made pursuant to Article VII, herein. 1.12 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 by the government prior to delivery or marketing of the Products or Licensed Software in the United States, Puerto Rico, and the territories and possessions of the United States, and any other country listed on Attachment I hereto. 1.13 Systemic Defect - shall mean a defect of any type where the Products do not conform with the Specifications set forth in Attachment I [*] which occurs in identical or substantially similar form or from [*] CONFIDENTIAL TREATMENT REQUESTED 2 Xerox & SMT Hardware Purchase and Software Development/License Agreement a substantially similar cause where such failures are reported in at least [*] of the Current Field Population of Products within any single [*] period of time after receipt of delivery of Products. The Current Field Population shall be calculated as the number of Products of the same or substantially same design sold by Seller to Buyer within the preceding [*] period. Any failure of any Product sold by Seller more than [*] prior to failure [*] shall not be deemed a Systematic Defect failure, nor counted as a failure for the purposes of calculating the threshold under this section. 1.14 Xerox Affiliated Companies - shall mean Rank Xerox Limited, Xerox Canada, -------------------------- Inc., any entity which is owned or controlled jointly by Xerox Corporation and the Rank Organization, PLC, and any entity which is owned or controlled directly or indirectly, by any of the foregoing, but shall not include Xerox. 1.15 Xerox Unique Features - shall mean those Features of Products which are --------------------- unique to Xerox, and which are designated as Xerox Unique Features in Attachment I. Such Xerox Unique Features shall only be incorporated in Products as designated by Xerox. 1.16 Specifications - shall mean the engineering, operational and/or functional -------------- description of the Products as set forth in the SuperMac Functional Specification, Revision 0.5, dated September 13, 1993 which may change from time to time and is referenced in this Agreement as Attachment I hereto, which is expressly incorporated herein by this reference. II. PRODUCTS DEVELOPMENT WORK 2.01 a) In the event Seller, in order to deliver Products which meet the Specifications set forth in Attachment I hereto, has agreed to develop new products or modify existing products other than rendering current Products into Private Label Products ("Development Work"), then this Article II shall apply. b) Seller shall perform the Development Work in conformity to the Development Work Schedule set forth in Attachment VI. Seller shall provide Xerox with progress reports, in accordance with the schedule set forth in Attachment IV. Each such report shall reflect/indicate: i. Status of progress to current Program Schedule milestone; ii. Short description of problems in meeting such milestone; iii. Proposed recovery method to meet next milestone if needed; iv. Probability of meeting next milestone; v. Any other information related to the Development Work reasonably requested by Xerox. c) The parties agree to conduct regular program reviews as shown on the agreed Program Schedule set forth on Attachment IV to this Agreement, to ensure their mutual satisfaction with the performance of the Development Work under the Agreement. Upon reasonable notice, the parties agree to meet at a mutually agreeable time and location to discuss and inspect the status of the Development Work. d) At any time prior to acceptance by Xerox of the Products as set forth in this Article, each party is entitled to request modifications in the form of changes or additions to the Specifications as agreed and set forth in Attachment I hereto. Such requests shall be submitted in writing. Upon receipt of the other's written approval, both parties will proceed with the implementation of the prescribed changes, and the Specifications and other Attachments to the Agreement shall be modified accordingly to reflect such agreed upon changes. e) Seller shall, in accordance with the Program Schedule set forth in Attachment VI to this Agreement, develop the Products. In accordance with the Program Schedule, Seller shall deliver to Xerox both prototype validation test unit(s) ("PVT unit") and development validation test unit(s) ("DVT unit") for testing and acceptance by Xerox, hereinafter collectively referred to as "Deliverables." The PVT unit shall be a unit of the product sufficiently developed to enable Xerox to ascertain if the Product will be capable of [*] CONFIDENTIAL TREATMENT REQUESTED 3 Xerox & SMT Hardware Purchase and Software Development/License Agreement meeting the specifications set forth in Attachment I hereto, and the manufacturing cost targets, although such PVT unit may not be fully functional or manufactured with actual production tooling. The DVT unit shall be a completed unit of the Product with all required functionality and performance for final Product test purposes, manufactured with production ready tooling using the actual production methods and equipment. (f) (i) Xerox, with the assistance of the Seller if requested by Xerox, will examine and test each Deliverable upon delivery to determine whether the Deliverable conforms to the Specifications. Xerox shall, within the acceptance period for each Deliverable set forth in Attachment IV; (i) accept the Deliverable and so inform the Seller in writing; or (ii) reject the Deliverable and provide Seller with a written statement to specify in detail the Deliverable's non-conformity to applicable specification. Notwithstanding the Project Schedule, Xerox shall not be obligated to pay for any Deliverable for which Xerox has submitted to the Seller a statement of non-conformity to applicable specifications. If Xerox does not provide such a statement of non-conformity to applicable specifications within the said acceptance period, the Deliverables will be deemed to have accepted by Xerox. (f) (ii) Should any Deliverable fail to meet the Specifications after the second redelivery of that Deliverable, then the parties shall promptly meet to resolve the problem. In the event that the parties are unable to develop a plan to resolve such failure of the Deliverable to conform to applicable specifications or other problems, Xerox shall have the right to terminate this Agreement as set forth in Article VII hereof, and such impasse shall be deemed due cause for termination of this Agreement. III. LICENSED SOFTWARE DEVELOPMENT WORK 3.01 Seller will develop the Licensed Software in accordance with the Specification defined in Attachment I and will deliver the Licensed Software to Xerox in accordance with Attachment IV. 3.02 Xerox reserves the right to make changes to the Licensed Software Specifications at any time prior to delivery of the Licensed Software in accordance with 3.01 and Seller agrees to make such changes. Xerox and Seller agree to negotiate in good faith an equitable adjustment in time schedule and fee, as necessary, for substantial changes to the specification and/or changes which affect the dates for scheduled delivery. 3.03 After delivery as stated in 3.01 of the Licensed Software, Xerox will have sixty (60) days to test the same and to notify Seller in writing of either its Approval or reasons for nonconformance to the Specifications of Attachment I. The Acceptance Criteria in Attachment VI shall serve as the primary part of the criteria which Xerox will use in making its determination as to Approval. 3.04 Upon notification by Xerox in accordance with 3.03 that the Licensed Software does not meet the Specifications of Attachment I and/or contains significant program errors, or otherwise doesn't function properly, Seller will correct the Licensed Software within a correction period of thirty (30) days following receipt of written notice from Xerox, and Xerox will be relieved of its sixty (60) day Approval obligation set forth in 3.03. If Seller subsequently delivers corrected Licensed Software to Xerox within said thirty (30) day correction period, Xerox will have an additional thirty (30) days from receipt to reevaluate the corrected Licensed Software. 3.05 If Seller is unable to meet the Specifications to Attachment I and/or eliminate significant program errors, product failure, or other problems in the Licensed Software in the thirty (30) day correction period of 3.04, or within 60 days of the delivery milestone dates set forth in Attachment IV then as Xerox' sole remedy and at its option Xerox may: (a) extend the correction period by an amount of time as may be a determined by Xerox; or (b) Approve the Licensed Software; or (c) reject the Licensed Software by notifying Seller of such in writing and promptly return Licensed Software to Seller with all copies made; or (d) Elect to terminate the Agreement. 4 Xerox & SMT Hardware Purchase and Software Development/License Agreement IV. PURCHASE AND SALE OF PRODUCTS AND LICENSE OF LICENSED SOFTWARE 4.01 (a) During the term of this Agreement, Buyer may purchase from Seller, and Seller shall sell to Buyer, Products for unrestricted resale, lease and servicing by Buyer or Buyer's customers worldwide, directly or through third parties. (b) Seller grants Xerox Companies a non-exclusive licence to use any of Seller's tradenames, trademarks or logos as supplied by Seller from time to time on units of the Products in connection with the resale or sub-licensing of units of the Products. (c) Seller grants and conveys to Xerox and Xerox Affiliated Companies a perpetual, nonexclusive, world-wide right and license to market, use, maintain, display, lease, and sub-license the Licensed Software themselves, or through authorized VARs, dealers or distributors, where and when, and under terms and conditions as determined by Xerox and Xerox Affiliated Companies, in connection with the marketing of the Products. Title to Licensed Software resides with Seller. The license granted in this Agreement extends to and includes all Releases of the Licensed Software and backward compatibility to the original Release. These releases will include all error corrections. Seller will provide Xerox written notification of pending new updates, releases and versions and availability thereof, sufficiently in advance of publication on order for Xerox to react in a timely manner. (d) Seller may manufacture, use, sell, lease or otherwise market or dispose of, or license any third party to manufacture, use, sell, lease, or otherwise dispose of, any Products which do not contain any Xerox Unique Features, Xerox patents, copyrights, trade secrets or intellectual property rights (unless licensed by Xerox) or any Xerox or Xerox Affiliated Companies' trademarks or logos. Provided, however, Seller may not grant to any third party manufacturing rights for Products or Licensed Software in a manner that will interfere with Xerox' rights under this Agreement. 4.02 Prices - (a) The prices for Products are set forth in Attachment III and -------- are expressed in Buyer's currency. [*] If Xerox agrees to pay Seller a license fee for Licensed Software, the fee will be defined in Attachment III hereto. Prices for Products shall remain firm and unchanged during the first year of this Agreement. However, Seller shall reduce applicable prices for Products and Licensed Software to equitably reflect any reduction of Seller's costs of raw materials, parts, direct labor or other appropriately allocated direct or indirect costs related to the production or delivery of the Products or Licensed Software. Thereafter, [*] the prices for Products not more than [*]. (b) Prices for Products and Licensed Software shall include the cost of packaging and packing which conform to the requirements of this Agreement but shall be exclusive of applicable taxes and duties and all similar governmental levies. (c) In the event Buyer wishes to purchase Products or Licensed Software on a Private Label basis it shall so inform Seller and Seller and Buyer shall negotiate the appropriate price for the purchase of Private Label Products or the license of such Licensed Software. (d) [*] 4.03 Payment - Provided Buyer has accepted Products or Licensed software ------- developed for Buyer hereunder Products purchased or licensed hereunder shall be paid for by bank transfer or written check within thirty (30) days following [*] CONFIDENTIAL TREATMENT REQUESTED 5 Xerox & SMT Hardware Purchase and Software Development/License Agreement the receipt of Seller's invoice by Buyer and accompanying documented proof of shipment. Seller agrees not to charge late payment fees for payments made by Buyer within thirty (30) days of the payment due date. 4.04 [*] 4.05 Purchase Release Orders - All purchases of Products and licenses of ----------------------- Licensed Software hereunder shall be made only upon the issuance of written purchase release orders by Buyer. All purchase release orders for a particular Production Month shall be sent by Buyer [*] before the Production Month for such Products or Licensed Software. In placing orders for Spares, Buyer shall use Seller's Spares parts number as well as Buyer's parts number in order to avoid any possible delay in filling such orders. 4.06 Acknowledgment - Within [*] of receipt, Seller shall accept and -------------- acknowledge in writing purchase release orders issued by Buyer hereunder. Any purchase release order not acknowledged within [*] after receipt by Seller is deemed to have been accepted. All purchases hereunder shall be governed solely by the terms and conditions of this Agreement, notwithstanding any preprinted terms and conditions contained on any purchase release orders issued by Buyer or acknowledgments thereof issued by Seller. 4.07 Xerox Unique Tooling - Buyer Unique Tooling shall not be used by Seller for -------------------- any purpose other than the manufacture of Products or Licensed Software under this Agreement without the prior express written consent of the particular Buyer which owns the Xerox Unique Tooling. 4.08 Unique Design Rights - All rights in and to Product designs that result -------------------- from the use of Xerox Unique Tooling or Xerox owned patents, copyrights or other intellectual property rights shall belong exclusively to the particular Buyer which provided Seller with Xerox Unique Tooling. With respect to such Product designs, Seller agrees to assist Buyer in applying for and obtaining any design patents or other intellectual property rights upon request from Buyer. 4.9 New Models - If, during the term of this Agreement or any extension ---------- thereof, Seller decides to develop products similar to the Products or Licensed Software that may be more efficient, contain additional features or capabilities, and/or are less expensive, Seller shall promptly notify Xerox and the parties shall discuss in good faith any unique Buyer requirements for such planned future product. In the event Seller decides to market such future product Seller shall make such products available to Buyer on terms comparable to those contained herein except that the parties shall negotiate the price therefor in good faith. 4.10 Kit Assembly - In certain instances Buyer may desire to market Products in ------------ countries that request local manufacturing content. In such cases Seller agrees to meet with Xerox in a timely manner to discuss the local manufacturing content requirement. Buyer and Seller will each have an obligation to negotiate in good faith using reasonable efforts to define the contents and assembly instructions for such Manufacturing Kits. Further, to the extent Seller has the right to do so, and if desired by Buyer, Seller agrees to sell such Manufacturing Kits to Buyer or a third party designated by Xerox under the terms and conditions of this Agreement, excepting the warranty (section XII), indemnification (section XIV) and systemic defect (section 1.13) provisions of this Agreement. In such event the price of such kits shall not exceed [*] of the equivalent. Product price to Buyer or the Product price less the labor savings, whichever is greater. [*] CONFIDENTIAL TREATMENT REQUESTED 6 Xerox & SMT Hardware Purchase and Software Development/License Agreement 4.11 Discontinuance Or Change in Location Of Manufacture - During the term --------------------------------------------------- hereof, Seller may not discontinue the manufacture of any Products or Licensed Software without the express written permission of Xerox. Seller shall notify Xerox prior to changing the location where Products or Licensed Software are manufactured, and Xerox shall have the right to terminate this Agreement immediately upon nature if such change in location is not satisfactory to Xerox. 4.12 Title And Risk Of Loss - Notwithstanding Products being delivered [*] ---------------------- title and risk of loss for all Products purchased by Buyer, and risk of loss for Licensed Software licensed by Buyer, shall pass to Buyer from Seller [*]. 4.13 Enhancements To Licensed Software - Seller in good faith shall use --------------------------------- commercially reasonable efforts to provide enhancements to the Licensed Software in accordance with the Software Support Plan in Attachment X. 4.14 [*] V. DOCUMENTATION AND SUPPORT 5.01 Sales Documentation - Seller shall furnish to Buyer, on an ongoing basis ------------------- during the term hereof, free of charge, such materials as Buyer may reasonably request in electronic and camera ready form for use by Buyer to prepare documentation, brochures and other product literature, including, but not limited to, operators, maintenance and parts manuals, catalogs, specification sheets, and other data necessary or appropriate for the sale of Products. Seller grants to Buyer and its customers the royalty-fee right and license to reproduce all or any part of such documentation. Buyer is further given the right to modify any or all parts of the documentation to reflect changes made to the Products or consistency in style with other documentation used by Buyer or to satisfy legal or customer requirements. 5.02 Service Documentation - Seller shall provide to Buyer, at no cost, and in --------------------- accordance with the schedules set forth in Attachment IV, all engineering drawings, service, repair procedures, and documentation (by part number) which, in Buyer's reasonable opinion, are necessary or appropriate to fulfill Buyer's service and customer support obligations for the Products. Seller grants to Buyer and its customers the royalty-free right and license to reproduce all or any part of such documentation. Buyer is further given the right to modify any or all parts of the documentation to reflect consistency in style with other documentation used by Buyer or to satisfy legal or customer requirements. 5.03 Licensed Software Documentation And Other Information - Seller will ----------------------------------------------------- provide to Xerox one (1) full, complete, and accurate set of Licensed Software marketing information, technical specifications, and update descriptions so that Xerox and Xerox Affiliated 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 Affiliated Companies may also include Licensed Software product description and information in any Xerox or Xerox Affiliated Companies literature. The distribution of such literature by Xerox and Xerox Affiliated Companies will be at their sole expense. Xerox and Xerox Affiliated Companies may, at their option and expense, prepare their own promotional literature relating to Licensed Software and distribute the same to its sales force and customers. Seller will provide Xerox one (1) complete set of Documentation and grants to Xerox and Xerox Companies the right to reproduce such Documentation for the purpose of distribution to their customers on an as needed basis. Seller will also include with each unit of Product shipped hereunder one (1) complete set of Documentation. Under this Section, Seller shall be under no obligation to create any specific marketing collateral for distribution but shall provide Buyer with the information necessary to create such materials for Buyer's use. [*] CONFIDENTIAL TREATMENT REQUESTED 7 Xerox S SMT Hardware Purchase and Software Development/License Agreement 5.04 Technical Support - Seller shall provide technical support and maintenance ----------------- for the Licensed Software to Xerox and Xerox Affiliated Companies in conformity with Attachment X hereto. 5.05 (a) Escrow - Within thirty (30) days of the delivery of the Product and ------ Licensed Software, Seller shall place in escrow with Seller's escrow shall place in escrow with Seller's escrow agent ("Escrow Agent"): (a) one (1) complete copy of the source code and documentation for the Licensed Software contained in the Products, together with copies of all design specifications and other technical information; and (b) one (1) complete copy of the hardware design specifications for the Products, together with copies of selected drawings and other technical information (collectively "Escrow Deposit"). Seller agrees to update and maintain the Escrow Deposit held in safekeeping by the Escrow Agent to reflect all changes made to the Products and/or the Licensed Software in the Products. Seller also agrees to provide Buyer with the name of Seller's Escrow Agent and a copy of the Escrow Agreement within one week of deposit of the source code and documentation. (b) During the term of this Agreement, the Escrow Agent shall be instructed to provide Xerox with the Escrow Deposit only in the event that: [*]. However, in the event that Seller notifies the Escrow Agent that a dispute exists between Seller and Xerox with respect to the release of the Escrow Deposit, then the Escrow Agent shall release the Escrow Deposit to Xerox only if such dispute is submitted to arbitration Article XXX and such arbitration is conclusively decided in Xerox' favor. If the Escrow Deposit is released to Xerox, it shall be subject to the terms of the license and confidentiality provisions of this Agreement, which provisions shall survive any termination of this Agreement. VI. QUALITY ASSURANCE 6.01 Quality Requirements - All Products and Licensed Software produced and -------------------- delivered to Buyer shall fully comply with the specifications set forth in the Attachments hereto and shall be one hundred percent (100%) free of material defects. Reliability of Products and Licensed Software shall meet or exceed the requirements of such specifications. 6.02 IS0 9000 Quality Systems Registration Requirements - Seller or Seller's -------------------------------------------------- suppliers will have a quality system which is registered to ISO 9001, and or 9002 and 9003 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 Seller. 6.03 Product Quality Plan - Seller will develop, implement and provide to -------------------- Xerox a Quality Plan for Products in accordance with the ISO-9000 end-term quality provisions set forth in Attachment II, a copy of which Seller acknowledges having received. Such Quality Plan shall define the controls and operating systems required to assure that only defect free Products and Licensed Software will be delivered to the Buyer. Xerox's Material Quality Assurance or their authorized representatives shall source verify all deliveries until Seller achieves Product certification. Existing Seller 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's quality requirements. 6.04 Acceptance Inspection - Buyer shall have the right to conduct, at its --------------------- expense, at a location that the Buyer may reasonably select, an acceptance inspection of the Products and Licensed Software to ensure compliance with the specifications set forth in the Attachments to this Agreement. Buyer shall notify Seller of the 8 Xerox & SMT Hardware Purchase and Software Development/License Agreement result of such inspection (acceptance or rejection) for each lot delivered within thirty (30) days after receipt of such Products and Licensed Software. Should Buyer fail to notify Seller within such thirty (30) day period, the relevant Products and Licensed Software shall be deemed to have been accepted by Buyer. Such acceptance shall not however be deemed a waiver of any warranties applicable to such Products or Licensed Software. Quality and reliability failure rates observed in excess of those specified in the Seller Quality Plan may result in the return of the Product or Licensed Software or sorting at Seller's expense. 6.05 Nonconforming Product or Licensed Software - Seller agrees that it shall ------------------------------------------ correct nonconforming Product or Licensed Software that have been rejected as a result of acceptance inspection provided for in Section 6.04 by the following methods (the choice of which shall be at Buyer's option): (a) Buyer returns the Product or Licensed Software to Seller at Seller expense, and Seller shall repair or replace the Product or Licensed Software within thirty (30) days at no cost to the Buyer. (b) Buyer repairs the Product at a mutually agreed cost which Seller shall reimburse to Buyer upon receipt of Buyers invoice, or (c) Seller, at its expense, shall repair the nonconforming Product at a facility designated by Buyer. 6.06 Preliminary Data - Seller shall supply preliminary data on the Mean Time ---------------- Between Failure ("MTBF") for the Equipment as soon as practical in the planning stage of the program. Final MTBF data shall be provided as soon as design maturity testing of the Equipment is completed. Such MTBF data shall include failure data on all major subassemblies of the Equipment. Further, should any revisions or modifications to Equipment or component parts thereof affect the MTBF of the Equipment, Seller shall supply revised MTBF data within thirty (30) days of such revisions and modifications. 6.07 Mean Time Between Failure - In the event that a variance should occur such ------------------------- that the actual MTBF is below the MTBF specified in Attachment I, Seller will implement a corrective action program acceptable to Xerox to correct such variance. If the average MTBF for Equipment nonetheless remains below that specified in Attachment I after such corrective action is implemented, Seller agrees to implement a new corrective action program and repair all failed Equipment and affected Spares, at no cost to the Buyer. [*] 6.08 Replaced Products - All Products or Licensed Software repaired or replaced ----------------- by Seller pursuant to this Article shall be subject to all quality assurance and inspection requirements in accordance with the provisions of Article VI. 6.09 Program Milestone Management - The parties agree that achievement of ---------------------------- certain key milestones must be managed actively to assure that the initiation of delivery of Products and Licensed Software meets Buyer's market requirements. The program management team may identify key milestones which shall be included in Attachment IV. When such program milestones are included in Attachment IV, both parties agree to apply diligent efforts to assure that the progress of the program is kept on schedule. If it is determined by either party that the progress of key program milestones is insufficient to assure the Product market launch schedule is maintained, identified managers within each company shall be empowered to schedule a milestone exception review upon written notification to the other party. Milestone exception reviews will be held at a mutually agreed location within ten (10) working days of such written notification and will be attended by Xerox and Seller program team members that the identified managers may select. The senior managers of each company will review the problems and causes for delay in achieving the key program milestones and commit the necessary resources within their company to recover or minimize the program delay. [*] CONFIDENTIAL TREATMENT REQUESTED 9 Xerox & SMT Hardware Purchase and Software Development/License Agreement 6.10 Source Verification - Buyer shall have the right to conduct, at its ------------------- expense, source verification activities, in accordance with the Xerox Supplier Quality Assurance Procedures set forth in Attachment II at Seller's manufacturing site. All such source verification activities shall be scheduled within one (1) week of receipt of notice from Seller indicating that Products or Licensed Software are ready for verification. Any request for a repeat verification of Products or Licensed Software that did not pass initial verifications or emergency situations shall require a forty eight (48) hour notice period. VII. TERM AND TERMINATION 7.01 Term - This Agreement shall commence on the Effective Date and shall ---- continue for a period of [*] unless one party gives written notice of its intent to terminate this Agreement [*]. The provisions of this Article VII shall not apply to the sale of Spares which shall be governed solely by the provisions of Article XI. 7.02 Termination For Cause - Either party may terminate this Agreement or any --------------------- purchase order issued hereunder effective immediately upon written notice of termination to the other party in any of the following events: a) if the other party materially breaches this Agreement and such breach, if curable, is not cured within [*] after written notice of breach by terminating party: b) if the other party materially breaches this Agreement and such breach is by its nature not curable. c) if the other party's performance is delayed for more than [*] for any reason, including force majeure delays; or d) upon the rejection of the Licensed Software in accordance with 3.05(c) except that the Confidential Obligations (the obligations as to Confidential Information) herein and any other remedies available, such as return of fees, shall not be waived and shall survive termination. e) 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, or a purchase agreement is executed for all or substantially all of the other party's assets or of the shares of stock in such other party and such petition, assignment or agreement is not dismissed, vacated or terminated within [*]. To the extent applicable law prevents the non-terminating party from terminating this 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 365n. Any such Termination shall be automatically effective at the end of any applicable notice period if any. However, Xerox, as the non-defaulting party, has the unrestricted right, at its option, not to terminate this Agreement insofar as it pertains to Licensed Software and to continue as a licensee of Licensed Software and to market such Licensed Software in accordance with the terms hereof. 7.03 Termination for Convenience - Xerox reserves the right, in whole or in --------------------------- part, and in the exercise of its discretion, prior to its Approval of exercise of its discretion, prior to its Approval of the Licensed Software and Hardware to terminate this Agreement upon not less than [*] written notice to Seller. In the event of such termination of this Agreement, in addition to Xerox's obligations under Article II of this Agreement respecting Products development work, Xerox' shall be obligated with respect to Licensed Software Development Work solely to pay Seller for the development work respecting Licensed Software and Hardware work completed as of the date of termination. 7.04 Termination And Expiration Effect --------------------------------- a) Except as otherwise set forth in this Agreement or with respect to obligations which survive the termination or expiration of this Agreement, Buyer's sole liability to Seller shall be for the payment of any balance due and owing for conforming Products and Licensed Software delivered prior to the effective date of termination or expiration. [*] CONFIDENTIAL TREATMENT REQUESTED 10 Xerox & SMT Hardware Purchase and Software Development/License Agreement b) If Buyer is committed to supply Products or Licensed Software to its customers beyond such termination or expiration date, Seller and Buyer agree to negotiate in good faith, and in a timely manner, terms and conditions to allow Buyer 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 30.01 hereof. Seller shall continue to deliver Products and Licensed Software to Buyer during the pendency of such arbitration at price levels which were in effect immediately prior to such termination or expiration. The arbitrator has the authority to change the price levels retroactively. c) Each party shall immediately return to the other all proprietary, confidential or private data and all copies thereof. Buyer will not have such obligation to the extent the data is reasonably necessary to support a reasonable continuing obligation to customers as set forth in 7.03(b). In addition, notwithstanding the above, Buyer shall retain all rights and documentation necessary to continue servicing Products sold hereunder and the right to dispose of its inventory of Products and Licensed Software. d) Upon the request of Xerox, Seller shall, at Xerox' expense, return all Xerox Unique Tooling to Xerox or make disposition thereof in accordance with Xerox' written instructions. Such disposition shall be subject to verification by Xerox. e) Seller shall upon request provide a list of vendors for Products and Spares or components of Products, and Licensed Software, so that Buyer(s) may source Products, Spares, and components therefor and Licensed Software directly from such vendors. Further, Seller agrees to provide timely assistance to Buyer(s) in negotiating supply agreements with such vendors upon Buyer's request and hereby grants to Buyer(s) the non-exclusive world-wide royalty free right and license to manufacture, have manufactured, use and sell or otherwise market any Products or Licensed Software, spares, or components thereof, which are proprietary to Seller or which, for any reason, a license from Seller is necessary for Buyer to manufacture, use and sell or otherwise market any Products or Licensed Software and to the extent necessary, shall obtain from a third party the necessary licenses for Buyer to have the rights specified in this Paragraph. VIII. DELIVERIES 8.01 Transportation And Packaging - All Products and Licensed Software will be --------------------------- shipped with commercial packaging suitable for shipment via air or sea, as applicable, in standardized containers in accordance with the packaging specifications set forth or referenced in Attachment I for Products and for Licensed Software. If requested, Seller agrees to assist Buyer or the forwarder selected by Buyer in arranging the most economical transportation from the seaport or airport from which the Products or Licensed Software will be shipped. 8.02 Forecasts - Buyer shall submit to Seller a forecast covering the quantity --------- of Products it then intends to order during the [*] period covered by the forecast. No forecast is to be construed as a purchase commitment; it is offered only as an indication of Buyer's then anticipated future requirements to assist Seller in its planning. 8.03 Early Delivery - Buyer reserves the right, at its option and without -------------- liability, to: a) refuse to accept delivery of Products or Licensed Software more than [*] in advance of the delivery dates set forth in purchase orders and, if delivered to return such Products or Licensed Software to Seller at Seller's expense, for subsequent delivery in conformance with such purchase orders; or b) retain any early delivered Product or Licensed Software and hold Seller's invoice until the date it would otherwise be due if delivery had been made on the delivery date set forth in the purchase order. 8.04 Late Delivery - In consideration of increased but not easily calculable ------------- costs incurred [*] CONFIDENTIAL TREATMENT REQUESTED 11 Xerox & SMT Hardware Purchase and Software Development/License Agreement by Buyer when Seller is late in delivery of Products or Licensed Software, the parties agree that (a) if delivery is delayed more than [*] and upon request by Buyer, Seller will airship the Products or Licensed Software and pay any increase in packaging and shipping costs between air freight and land or ocean freight, and (b) if delivery is delayed more than [*], Buyer shall have the right to cancel the delayed Products or Licensed Software with no charge or penalty to Buyer and such delay, at Buyer's option, shall be deemed a material breach of this Agreement. This Section 8.04 shall only apply to Purchase Release Orders that are for quantities that are equal to or less than those that have appeared on the [*] rolling forecast for at least the [*] immediately preceding the scheduled month of shipment. Seller shall use best commercial efforts to accomodate any orders above such amount. 8.05 Manufacturing License - If Seller is unable or unwilling for any reason --------------------- other than Buyer's material breach of this Agreement, to deliver any Product or Licensed Software to Buyer hereunder for a period of [*] from the delivery date for such Product or Licensed Software, Seller hereby grants to Xerox any and all rights that Seller has that can be transferred to manufacture or have manufactured the Products or Licensed Software, as applicable. Seller shall also provide, at the request of Xerox, engineering assistance, documentation and know-how sufficient to enable Xerox to manufactured or have manufactured the Products or Licensed Software. In addition, Seller hereby grants to Xerox the right to contract with Seller's vendors for such purpose. Should such license grant be implemented, both parties agree to meet in a timely manner to negotiate in good faith the process of such implementation. 8.06 Rescheduling - Buyer may, upon written notice to Seller, reschedule ------------ Products and Licensed Software for delivery [*], and such rescheduled date must be no later than [*] after the originally scheduled date. Notwithstanding the above, Seller will use reasonable efforts to accommodate Buyer's requested schedule changes. 8.07 Cancellation Without Cause - Buyer may, upon written notice to Seller -------------------------- cancel any Product or Licensed Software then scheduled for delivery for any reason whatsoever up to, but no later than, [*] prior to the first day of the Production Month for such Products. The payment by Buyer of a cancellation charge as set forth below shall represent Seller's exclusive remedy for a cancellation by Buyer pursuant to this Section. a) if notice of cancellation is sent by Buyer at least [*] prior to the first day of the Production Month for such Products, Buyer may cancel without any cost or penalty; b) if notice of cancellation is sent by Buyer less than [*] prior to the first day of the Production Month for such Products, Buyer shall pay Seller actual costs incurred in manufacture of the Product prior to issuance of such notice of cancellation, subject to Seller (i) making its best effort in the case of Products to cancel parts sourced form external vendors, and to reschedule over the next two (2) Production Months all possible parts, at no charge to Xerox, and (ii) advising Buyer of the amount of any actual cancellation cost incurred and paid, if Seller is unable to effect such complete cancellation and/or rescheduling. Xerox shall have the right to audit such cancellation charges. The maximum charges hereunder shall be the actual costs incurred by Seller in effecting such cancellation or the cost of the canceled Products, whichever is less. 8.08 Cancellation For Cause - In the event Seller is, for any reason ---------------------- whatsoever, including reasons beyond its control, [*] or more working days delinquent in meeting the agreed upon delivery schedule of any Product or Licensed Software, Buyer may, by written notice to Seller, cancel without liability such delinquent Product or Licensed Software and such delay shall be deemed, at Buyer's option. a material breach of this Agreement. 8.09 Disposition Of Canceled Product - In the event Buyer cancels any purchase ------------------------------- order or portion thereof pursuant to 8.07 or 8.08 hereof, Seller may dispose of the canceled Products or Licensed Software, after removing all identifying marks which identify the Products or Licensed [*] CONFIDENTIAL TREATMENT REQUESTED 12 Xerox & SMT Hardware Purchase and Software Development/License Agreement Software as Private Label Products or Licensed Software provided that, unless Buyer's prior consent is obtained, all Xerox Unique Parts are to be removed from such Products. Should Seller elect to dispose of such canceled Products of Licensed Software, Buyer shall have the right of first refusal to purchase/ license such canceled Products/Licensed Software at the best price offered to any third party. IX PRODUCT AND LICENSED SOFTWARE CHANGES 9.01 Products And Licensed software Changes - The Products and Licensed -------------------------------------- Software delivered hereunder shall incorporate the latest improvements implemented by Seller, subject to Xerox' prior written agreement. Seller shall inform Xerox, in writing, of the following in requesting such approval: The date of the proposed incorporation of such changes into the Products or Licensed Software and description of changes affecting the: a) form (external appearance of finished products or piece parts; or external dimensions, dimension tolerances or shape); b) 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). c) function (changes in the Product or Licensed Software specification, Product or Licensed Software performance, or any changes affecting the Product's or Licensed Software's reliability); or d) compatibility of the Products or Licensed Software (changes to or which affect Product or Licensed Software operation or Product's Spares, internal logic or timing which might affect application of the Products or Licensed Software, 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 of the Product). Xerox shall respond within thirty (30) days to each request for Product or Licensed Software changes received from Seller indicating its acceptance or rejection of such change. 9.02 Implementation - Any changes made by Seller and accepted by Xerox pursuant -------------- to 9.01 hereof shall be implemented in accordance with the schedule indicated by Seller in the written notification of change. Such changes shall be incorporated into Products or Licensed Software shipped pursuant to purchase orders received by Seller after Xerox approved such changes. The serial number of the first such changed Product shall be identified to Xerox and Seller agrees that all Products with serial numbers greater than such serial number shall incorporate such changes. 9.03 Obsolete Inventory - In the event of changes to Products or Licensed ------------------ Software, Seller shall repurchase or exchange from Buyer all Consumables or Spares and refund any royalties paid on account of Licensed Software which are in Buyer's inventory and which have become obsolete as a result of any change to Products or Licensed Software, other than a Products or Licensed Software change requested by Buyer. 9.04 Effect of Rejection - In the event Buyer rejects a proposed change to ------------------- Products or Licensed Software, Seller shall remain obligated to deliver Products and Licensed Software conforming to the applicable specifications, set forth in this Agreement in the Attachments hereto. X. AGENCY APPROVAL AND SAFETY 10.01 Compliance - Product and Licensed Software shall comply with all ---------- applicable governmental laws, regulations and other public or private requirements in effect at the time of shipment hereunder and, in particular, the safety requirements and governmental or other agency certifications described in the specifications appearing in Attachment 1. 10.02 Regulatory Agency Approval - Seller shall obtain, at no cost to Buyer, -------------------------- full Regulatory Agency approvals as required for Products and 13 Xerox & SMT Hardware Purchase and Software Development/License Agreement Licensed Software in accordance with the schedules in Attachment IV and Specifications shown in Attachment I. Seller shall obtain, at no cost to Buyer, any required Regulatory Agency reapprovals for any Products or Licensed Software which are modified in any authorized manner hereunder. 10.03 Cost Effects of Changes - In the event that any change in the form, fit ----------------------- or function (as collectively defined in 9.01) or specification of any Products or Licensed Software which are necessitated in order to comply with Regulatory Agency requirements or standards or mutually agreed upon hereunder results in a significant increase or decrease in the cost of such Products or Licensed Software, or in the length of time required for the manufacture or delivery thereof, equitable adjustment to the price of such Products or Licensed Software or agreed upon shipping date or both shall be made by the parties pursuant to good faith negotiations. XI. CONSUMABLES AND EMERGENCY MAINTENANCE SUPPORT 11.01 Spares Listing - Seller shall supply to Xerox, in accordance with the -------------- schedule set forth in Attachment IV, a recommended Spares listing based on representative field populations. 11.02 Initial Order - Seller shall deliver to Buyer the initial Spares order ------------ in accordance with the quantities specified in such order and in accordance with the schedule set forth in Attachment IV. 11.03 Spares And Supplies - Seller shall supply Buyer Spares and Supplies for ------------------- Equipment for a period of [*] from the last delivery of Equipment under this Agreement and notwithstanding any Termination hereof pursuant to Article VII. In this regard, Buyer shall place its final purchase orders for such Spares and Supplies at least [*] prior to the expiration of such [*] period. Prices of Spares after the last delivery of Equipment under this Agreement and during this [*] will be adjusted to reflect actual total costs (manufacturing plus material) on a [*]. 11.04 Equivalent Spares - Buyer agrees to accept equivalent and/or ------------------- interchangeable (form, fit and function compatible as defined in 9.01 hereof) Spares and consumables during the [*] period defined 11.03 hereof, if Seller's source of supply should change and such change is beyond Seller's reasonable control. The determination as to whether Spares are equivalent and/or interchangeable shall be made solely by Xerox. 11.05 Emergency Spares Inventory - Seller shall at all times maintain an -------------------------- inventory of at least [*] of the total cumulative units purchased by Buyer in the preceding [*] units of each Spare, at no cost to Buyer, and use this supply solely for shipment to Buyer as emergency Spares, when requested Deliveries of emergency Spares shall be made within [*] of buyer's request thereor to Seller. 11.06 Priority - Seller shall use its best efforts to have in inventory or -------- supply Spares to Buyer on a priority basis, inside of Seller's usual lead time, to replenish any Buyer low stock condition and shall immediately upon receipt of relevant Purchase Orders, notify Buyer or customers of the anticipated shipment date of all Spares orders. 11.07 Full Set of Spares - The price of a full set of Spares shall not exceed ------------------ [*] of the then current price of one unit of Equipment. XII. WARRANTIES 12.01 Express warranties - ------------------ (a) Seller warrants that it has good and marketable title to all Products delivered to Buyer hereunder that all units of Products shall be free and clear of all liens, encumbrances, security interests or other claims. (b) Seller also warrants that it has either good and marketable title to all units of Licensed Software shipped hereunder or has the right to convey to Xerox and Xerox Affiliated Companies the right respecting Licensed Software granted in this Agreement. (c) Seller further warrants that, unless otherwise agreed in writing, all Products delivered to [*] CONFIDENTIAL TREATMENT REQUESTED 14 Xerox & SMT Hardware Purchase and Software Development/License Agreement hereunder shall be manufactured solely from new or like new parts and shall fully conform to the specifications of Attachment I. (d) Seller further warrants that all Products delivered to Buyer hereunder shall be free from defects in material and workmanship and shall fully conform to the specifications of Attachment I for a period of [*] from the date of delivery to Buyer. (e) Seller further warrants that Licensed Software shall be substantially free from program error and fully conform with specifications of Attachment I for a period of [*] after shipment of the first unit of License Software by Seller to Buyer. 12.02 Warranty Obligations - With respect to any Products or Licensed Software -------------------- found to be defective, Seller shall, without charge including freight, deliver at Buyer's option, repaired or replaced Products or licensed Software within [*] from the time of Buyer's notification that such defective Products or Licensed Software exist. Buyer's sole obligation shall be to maintain adequate records regarding the causes (if know) and dates of such failures and provide such information to Seller at Seller's request. At Buyer's option, Buyer may repair the Products or Licensed Software, and in such event Seller shall reimburse Buyer for actual expenses Buyer incurs in repairing or attempting to repair the Products or licensed Software. 12.03 Out Of Warranty Service - During the term hereof and for a period of [*] ----------------------- thereafter, Seller agrees to repair or replace, within [*] of receipt from Buyer, each product found to be defective following the warranty period of 12.01 at Seller's then flat rate exchange, if required, reasonable travel expenses when approved in advance by Xerox. 12.04 Repaired And Replaced Products - All Products or Licensed Software ------------------------------ repaired or replaced by Seller under this Article shall be subject to Buyer's inspection and acceptance in accordance with the provisions of Article VI, and if accepted, shall be extended new warranties in accordance with 12.01 hereof. 12.05 Systemic Defects - Notwithstanding the warranty requirements and ---------------- conditions of Section 12.01 hereof, Seller will undertake without charge and without delay to promptly remedy any Systemic Defect in all affected Products or Licensed Software in inventory or in the field, by delivering to Buyer a replacement Product or Licensed Software. Seller shall not be required to cure any Systemic Defect for any Products or License Software which have been subjected to accident, negligence, misuse, alteration, modification, tempering or causes other than ordinary use. 12.06 WARRANTY DISCLAIMER - THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE, ------------------- AND THE OBLIGATIONS AND LIABILITIES OF SELLER HEREUNDER, ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. XIII. TRAINING 13.01 Seller shall provide to Xerox and Xerox Affiliated Companies, at no charge for labor or materials supplied, two (2) training courses (1 sales and 1 service) for Xerox and Xerox Affiliated Companies sales and service engineers with respect to the marketing and servicing/support of Products and Licensed Software at locations designated by Xerox. The course will be held at venues and on dates to be agreed. Xerox shall be given one copy of such training materials which it may copy and distribute for purposes of training other employees or agents of Xerox and Xerox Affiliated Companies. 13.02 Should Buyer purchase customized or new Products or Licensed Software from Seller pursuant to 4.10 or 9.01, Seller agrees to offer the same training as described in 13.01 hereof for each such Product and Licensed Software, at no cost to Buyer. XIV. [*] 14.01(a) [*] [*] CONFIDENTIAL TREATMENT REQUESTED 15 [*] 14.01(b) Buyer agrees, at its expense, to defend Seller from, and pay any judgment for, any suit, claim or proceeding (hereafter "Claim") against Seller alleging that any Product sold or Licensed Software licensed hereunder has caused injury or damage to the person or property of another arising from the negligence of Buyer or any of its agents, representatives or employees provided that Buyer is promptly notified of any claim, given all reasonable assistance required, and permitted to direct the defense. Seller shall have the right at all times to participate in the defense of such claim or proceeding at Seller's expense. Buyer shall have no liability for settlement or costs incurred without its consent. 14.02 Injunction - In the event that Buyer's use of any of the Products or ---------- Licensed Software is enjoined, Seller shall, at its option and expense, either substitute fully equivalent Products or Licensed Software not subject to such injunction, modify the Product or Licensed Software so that it no longer is subject to such injunction, or obtain for Buyer and its customers the right to continue using the enjoined Products or Licensed Software. If none of the foregoing is feasible, and said injunction is in effect for more than three (3) months, Seller will take back the enjoined Products and Licensed Software from Buyer and its customers and refund to Buyer the purchase price/royalties/fees paid therefor, plus return transportation costs. 14.03 Limitations - Seller shall not be liable for any Claim arising solely out ----------- of or resulting solely from (i) Seller's compliance with or adoption of any specification, design, feature, mark or symbol, component parts or printed materials or other information or materials required by Buyer for incorporation or use with any Products or licensed Software, or (ii) any modification or reworking made by Buyer, or upon instruction of Buyer performed by Seller, to any Products or Licensed Software. 14.04 DISCLAIMER OF LIABILITY - NEITHER XEROX, XEROX AFFILIATED COMPANIES, OR ----------------------- THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS, SHALL BE LIABLE FOR ANY LOSS OR PROFIT WHICH SELLER INTENDED TO OBTAIN BY SALE OF THE "PRODUCTS" OR LICENSE OF LICENSED SOFTWARE TO BUYER OR OTHER INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND SUFFERED BY SELLER DUE TO OR IN CONNECTION WITH ANY SUCH CLAIM. XV. CONFIDENTIAL AND PROPRIETARY INFORMATION 15.01 Except as set forth in Article IV, all information furnished or disclosed by either party in writing and marked "Confidential," "Proprietary," or "Private," shall remain the property of the disclosing party. The recipient shall not disclose such information or any part thereof to any third party and shall restrict circulation of such information within its own organization on a need-to-know basis. However, if Buyer is the recipient it may disclose such information to Xerox and Xerox Affiliated Companies and such Companies shall restrict circulation of such information within their own organizations on a need-to-know basis. If either party reproduces any part of such information for use within its own organization, the recipient shall mark all reproductions by indicating the disclosing party's proprietary interest. If any such information is transferred to Buyer's or Seller's vendors, suppliers or customers, such vendors, suppliers or customers shall be required to maintain the confidentiality of such information and such transfer must be authorized in writing by the disclosing party. Such obligation to keep information confidential shall survive termination or expiration of this Agreement. [*] CONFIDENTIAL TREATMENT REQUESTED 16 Xerox & SMT Hardware Purchase and Software Development/License Agreement 15.02 Neither party hereto shall be bound by the confidentiality obligations of Section 15.01 hereof if: 15.02.1 the information was not specifically designated in writing as confidential or proprietary at the time of the disclosure or, if the disclosure was orally made, it had not been initially identified as being confidential and it had not been reduced to writing and designated as being confidential within [*] from the date of oral disclosure (and during such not more than [*] period prior confirmation that such orally disclosed information is confidential such orally disclosed information shall be treated as confidential information in accordance with this Article XV; 15.02.2 the information was in the public domain at the time of the disclosure; 15.02.3 the information becomes publicly available through no fault of the recipient; 15.02.4 the information was in the recipient's possession, free of any obligation of confidence, at the time of receipt of the information; 15.02.5 the information becomes available on an unrestricted basis to a third party from the disclosing party or from someone acting under its control; 15.02.6 the information was developed by employees or agents of the recipient independently of and without reference to the information disclosed in confidence; 15.02.7 and to the extent the recipient is obligated to produce the information under court or government action; 15.02.8 five (5) years have elapsed since the information was disclosed to the recipient; or 15.02.9 the information is determinable by the public upon reverse engineering or scrutiny upon inspection when the Products are marketed. XVI. LIMITATION OF LIABILITY 16.01 A. LIMITATION ON DIRECT DAMAGES - NOTWITHSTANDING ANY OTHER PROVISION ---------------------------- CONTAINED HEREIN TO THE CONTRARY EXCEPT ARTICLE XIV, WHICH SHALL BE GOVERNED BY ITS TERMS, UNDER NO CIRCUMSTANCES SHALL THE LIABILITY OF XEROX, XEROX AFFILIATED COMPANIES AND SELLER, SELLER AFFILIATED COMPANIES, OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS, FOR DIRECT DAMAGES EXCEED THE PURCHASE PRICE RECEIVED BY SELLER FOR THE PRODUCT OR LICENSED SOFTWARE FROM WHICH THE CLAIM AROSE OR ONE HUNDRED THOUSAND ($100,000) DOLLARS, WHICHEVER IS GREATER WHETHER ARISING IN CONTRACT IN TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE) OR ANY OTHER THEORY. B. DISCLOSURE OF OTHER DAMAGES - NOTWITHSTANDING ANY OTHER PROVISION --------------------------- CONTAINED HEREIN TO THE CONTRARY EXCEPT ARTICLE XIV, WHICH SHALL BE GOVERNED BY ITS TERMS, XEROX, XEROX AFFILIATED COMPANIES, AND SELLER SPECIFICALLY DISCLAIM AND WAIVE AS TO EACH OTHER AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, OR AGENTS ANY AND ALL LIABILITY FOR DAMAGES OTHER THAN DIRECT DAMAGES, INCLUDING BUT NOT LIMITED TO PUNITVE OR EXEMPLARY DAMAGES, HOWEVER DENOMINATED AND INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES, WHETHER ARISING IN CONTRACT, IN TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE), OR ANY OTHER THEORY EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED HEREIN. XVII. EXPORT CONTROL 17.01 Seller and Buyer shall comply with all applicable laws and regulations respecting the export, directly or indirectly, of any technical data acquired from the other under this [*] CONFIDENTIAL TREATMENT REQUESTED 17 Xerox & SMT Hardware Purchase and Software Development/License Agreement Agreement or any Products or Licensed Software utilizing any data to any country the laws or regulations of which at the time of export, require an export license or other government approval including but not limited to first obtaining such license or approval. XVII. INDEPENDENT PRODUCT DEVELOPMENT 18.01 This Agreement does not and shall not be construed to limit the rights of Xerox or Xerox Affiliated Companies or Seller and Seller Affiliated Companies (aside from restrictions contained in Article XIV) to develop competing products or software. XIX. FORCE MAJEURE 19.01 Neither Seller nor Buyer shall be liable to the other for its failure to perform any of its obligations hereunder or under any purchase order or acknowledgment thereof during any period in which such performance id delayed by unforeseeable circumstances beyond its reasonable control. XX. NOTICES 20.01 Any notice which may be or is required to be given under this Agreement shall be in writing. All written notices shall be sent by common carrier, registered or certified airmail, postage prepaid, return receipt requested. To the extent this Agreement requires notice to be given to Seller or Xerox, such notices shall be deemed to have been given when received, addressed in the manner indicated below or at such other addresses as the parties may from time to time notify each other of: BUYER XEROX CORPORATION THE XEROX CONNECTION 2200 EAST GRAND AVE ESCG 285 EL SEGUNDO, CA. 90245 Attn:Contract Administrator SELLER SUPERMAC TECHNOLOGY, INC. 215 MOFFETT PARK DRIVE SUNNYVALE, CA. 94089-1374 Atten:Contract Administrator To the extent this Agreement requires Seller to give notice to a Xerox Affiliated Company in its capacity as a Buyer then such notice will be deemed to have been given when received and addressed in the manner agreed to by Seller and the appropriate Xerox Affiliated Company. XXI. POINTS OF CONTACT 21.01 Attachment V is included in this Agreement only to provide both parties with names, addresses and telephone numbers for primary points of contract in the day to day administration of the activities defined in this Agreement. XXII. HEADINGS 22.01 The headings and titles of the Articles and Sections of this Agreement are inserted for convenience only and shall not affect the construction or interpretation of any provision. XXIII. AMENDMENT 23.01 This Agreement and the Attachments hereto may be amended only by a document in writing duly signed by authorized representatives of both parties. XXIV. ASSIGNMENT 24.01 Seller or Buyer may not assign this Agreement except as provided for in this section to any other party without the prior written consent of Buyer or Seller, which consent shall not be unreasonably withheld. Buyer or Seller may assign this Agreement only to a parent, subsidiary or affiliated firm, to a third party in connection with a merger, consolidation or joint venture, or to a third party upon a sale or transfer or substantially all of Buyer's or Seller's business assets. 18 Xerox & SMT Hardware Purchase and Software Development/License Agreement XXV. PRODUCT RECYCLING 25.01 Product Recycling - In the event Products or Licensed Software are ----------------- returned to Buyer after Buyer's sale, lease, or license thereof, Buyer has the right, without payment or renumeration of any kind or type to Seller, to use, remanufacture, refurbish, or recondition and thereafter remarket such Products. Such processes may include by way of illustration and not of limitation disassembly of Products to a standard determined by Buyer, the addition of new, used, or reprocessed components cleaning, refinishing, and retrofitting Products with all applicable retrofits. However, Buyer's right to remarket Products and Licensed Software is not contingent upon Buyer's remanufacturing, refurbishing or reconditioning of the Products and such remanufacturing, refurbishing or reconditioning by Buyer shall be deemed a repair of the Products. Such remanufacturing, refurbishing or reconditioning and thereafter remarketing of Products and Licensed Software by Buyer shall not be deemed nor constitute a violation by Buyer of any of Seller's rights,including but not limited to Seller's patents rights respecting the Products and Licensed Software. XXVI. SEVERABILITY 26.01 If any provision of this Agreement is held invalid by any law, rule, order or regulation of any government, or by the final determination of a court of last resort, such invalidity shall not affect (a) the other provisions of this Agreement, (b) the application of such provision to any other circumstance other than that with respect to which this Agreement was found to be unenforceable, or (c) the validity or enforceability of this Agreement as a whole. XXVII. WAIVER 27.01 Failure or delay of either party to exercise any right or remedy under this Agreement or to require strict performance by the other party of any provision of this Agreement shall not be construed to be a waiver of any such right or remedy or any other right or remedy hereunder. All of the rights of either party under this Agreement shall be cumulative and may be exercised separately or concurrently. XXVIII. SURVIVAL 28.01 Unless this Agreement expressly provides otherwise or by its nature a provision cannot survive this Agreement, the provisions of this Agreement shall survive the expiration or any termination of this Agreement. XXIX. ETHICAL STANDARDS 29.01 Seller agrees that, with respect to its role as supplier to Buyer including any interaction with any employee of Buyer, Seller shall not: (1) give or offer to give any gift or benefit to any such employee of Buyer, (2) solicit or accept any information, data, services, equipment, or commitment from such employee unless same is (i) required under a contract between Buyer and Seller, or (ii) made pursuant to a written disclosure Agreement between Buyer and Seller, or (iii) specifically authorized in writing by Buyer's management, (3) solicit or accept favoritism from said employee, and (4) enter into any outside business relationship with said employee without full disclosure to, and prior approval of, the appropriate management of Buyer. As used herein: "employee" includes members of the employee's immediate family and household, plus any other person who is attempting to benefit from his or her relationship to the employee. "Seller" includes all employees and agents of Seller. "Gift or benefit" includes money, goods, services, discounts, favors and the like in any form but excluding low value advertising items such as pens, pencils, and calendars. XXX. ARBITRATION 30.01 The parties shall attempt in good faith to resolve any dispute arising out of or relating to this agreement promptly by negotiations between executives who have authority to settle the controversy. Any party may give the other party(ies) written notice of any dispute not resolved in the normal course of business. Within 20 days after delivery of said notice, executives of both parties who have not been personally and substantially involved in the events leading up to the dispute, and who have authority to settle the dispute, shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem 19 Xerox & SMT Hardware Purchase and Software Development/License Agreement necessary, to exchange relevant information and to attempt to resolve the dispute. If the matter has not been resolved within 60 days of the disputing party's notice, or if the parties fail to meet within 20 days, either party may initiate arbitration of the controversy or claim as provided hereinafter. If a negotiator intends to be accompanied at a meeting by an attorney, the other negotiator shall be given at least three working days' notice of such intention and may also be accompanied by an attorney. All negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations for purposes of the Federal Rules of Evidence, state rules of evidence, and other applicable law. If the parties are unable to resolve the dispute by negotiations as set forth above, such dispute shall be settled by arbitration, conducted on a confidential basis, under the then current commercial Arbitration Rules of the American Arbitration Association ("the Association") strictly in accordance with the terms of this Agreement and the substantive law of the State of California. The arbitration shall be held at a mutually agreeable location in Los Angeles, California and conducted by one arbitrator chosen from a list of attorneys who are knowledgeable about the data processing and business equipment industries. The costs of the arbitration, including the fees to be paid to the arbitrator, shall be shared equally by the parties to the dispute. The parties to the dispute shall be limited to taking no more than three (3) depositions. The scope of document production shall be governed by the commercial Arbitration Rules of the Association and the decision of the arbitrator with respect thereto. The Judgment upon the award rendered by the arbitrator may be entered and enforced in any court of competent jurisdiction. Neither party shall be precluded hereby from seeking provisional remedies in the courts of any jurisdiction including, but not limited to, temporary restraining orders and preliminary injunctions, to protect its rights and interests, but such shall not be sought as a means to avoid or stay arbitration. To the extent this Agreement contains a limitation and/or disclaimer of liability clause, the terms of such clause will be applied by the arbitrator. If this Agreement does not contain a limitation and/or disclaimer of liability clause the maximum monetary award that can be rendered by the arbitrator will be ten (10) million dollars and such award shall not include any consequential, incidental, punitive, or exemplary damages. The parties agree that they have voluntarily agreed to arbitrate their disputes in accordance with the foregoing. XXXI. NONPUBLICITY 31.01 Without the prior written consent of either party to this Agreement, Seller nor Buyer shall not (a) make any news release, public announcement, denial or confirmation of this Agreement or its subject matter, or (b) advertise or publish any facts relating to this Agreement. XXXII. CONTROLLING LAW 32.01 This Agreement shall be governed by and construed in all respects in accordance with the laws and regulation of the State of California, U.S.A. The definitions set forth in the Incoterms of the International Chamber of Commerce, 1990 edition, shall be controlling. To the extent there may be any conflict between the law of the State of California and the Incoterms, the Incoterms shall be controlling. 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. XXXIII. CONTROLLING LANGUAGE 33.01 This Agreement is in English only, which language shall be controlling in all respects. All documents exchanged under this Agreement shall be in English only. XXXIV. REMEDIES CUMULATIVE 34.01 Except as otherwise set forth herein, any rights of cancellation or termination, or remedies prescribed in this Agreement are cumulative and are not intended to be exclusive of any other remedy of which the injured party may be entitled to herein or at law or in equity, including but not limited to the remedy of specific performance. 20 Xerox & SMT Hardware Purchase and Software Development/License Agreement XXXV. INTEGRATION 35.01 With the exception of the Tooling Agreement, this Agreement constitutes the entire agreement of the parties as to the subject matter hereof and supersedes any and all prior oral or written understandings and agreements as to such subject matter, including any preprinted terms and conditions contained in any purchase orders and acknowledgements issued hereunder. XEROX CORPORATION SELLER By:/s/ John A Lopiano By:/s/ Louis J. Doctor ------------------------------------ ----------------------- JOHN A LOPIANO LOUIS J. DOCTOR - --------------------------------------- ------------------------- (Typed/Printed Name) PRESIDENT, PRINTING SYSTEMS DIVISION EXECUTIVE VICE PRESIDENT - -------------------------------------- -------------------------- (Title) (Title) 11/11/93 NOVEMBER 01, 1993 - -------------------------------------- -------------------------- (Date) (Date) (Typed/Printed Name) (Typed/Printed Name) 21 ATTACHMENT III PRICING (FOR NEW ORDERS) There are five "Basic" board level products: 1) a 128MB v3 Splash Power Kit Pro 2) a 128MB Splash.TX v2.5 3) a 72MB PostScript print only medium range version: Splash.MX v2.5 4) a 72MB v3 version with scanning and direct Export printing: Splash Power Kit 5) a 72MB v2.5 version with scanning and direct Export printing: Splash.MXplus All the above board level products, with the exception of the Splash.MX, include the Color Central for Splash OPI server (Lite version). In addition, there are three "System Configurations", as defined in the next paragraph. Finally, spares, upgrades, and repair pricing is included. Each of these products will have a volume discount based on the total prediscount transfer revenue of purchases of all products aggregated. Xerox may choose the volume discount level at which purchases shall begin. There is also a bill back arrangement for failure to purchase a minimum aggregate revenue of products on an annual basis. SYSTEM CONFIGURATIONS: The three system configurations will be Apple Power Macintosh or Power Macintosh compatible based, with the following minimum system configuration specifications. The systems will have the Splash Hardware, Splash Software, and all other bundled software loaded and preconfigured. The warranty, service, and support for the items included other than the Splash board and Splash software will only be the standard terms provided to Customers by Adobe, Apple, Radius, and/or SuperMac. None of the clauses in the contract with respect to warranty, repair, or support will apply to these other system components. Splash Power Series P70 97K25090 ------------------- Minimum functional specification: (could also be better/later versions) 1. Splash.MX controller board set 2. Splash v3.0 release software 3. 14" color display 4. All configuration and installation 5. 66MHz Power PC Macintosh compatible with NuBus 6. System software 7.5 7. 12 MB RAM 8. 350 MB disk 9. built-in EtherTalk and LocalTalk 10. external CD ROM drive 11. keyboard and mouse 12. additional documentation Splash Power Series P85 97K22820 - ------------------ Minimum functional specification: (could also be better/later versions) 1. Splash.MXplus controller board set 2. Splash v3.0 release software 3. Color Central for Splash OPI software (Lite version) 4. Adobe Photoshop LE imaging software 5. 17" color display 6. 24-bit graphics display capability 7. All configuration and installation 8. 80MHz PowerPC Macintosh compatible with Nubus 9. System software 7.5 10. 16 MB RAM 11. 500 MB disk 12. built-in EtherTalk and LocalTalk 13. built-in CD ROM drive 14. keyboard and mouse 15. additional documentation Splash Power Series P105 97K22830 - ------------------ Minimum functional specification: (could also be better/later versions 1. Splash.TX controller board set 2. Splash v3.0 release software 3. Color Central for Splash OPI software (Lite version) 4. Adobe Photoshop LE imaging software 5. 17" color display 6. 24-bit graphics display capability 7. All configuration and installation 8. 100MHz PowerPC Macintosh compatible with Nubus 9. System software 7.5 10. 16 MB RAM 11. 500 MB disk 12. built-in EtherTalk and LocalTalk 13. built-in CD ROM drive 14. keyboard and mouse 15. additional documentation [*] [*] CONFIDENTIAL TREATMENT REQUESTED STANDARD CONTRACT PRICE FOR THE PRODUCTS: The Standard Prices for the Products are as follows: Full products: Splash.MX v2.5 board 98K23700 [*] Splash Power Series P70 v3 System (MX) 97K25090 [*] Splash.MXplus v2.5 board 98K32420 [*] Splash Power Kit v3 board (MX+) 98K39640 [*] Splash Power Series P85 v3 System 97K22820 [*] Splash.TX v2.5 board 98K32430 [*] Splash Power Kit Pro v3 board (TX) 98K39650 [*] Splash Power Series P105 v3 System 97K22830 [*] Upgrades: Splash v3 Software/Key Upgrade Kit 300K49920 [*] Other Products: Splash.MX daughter board spare 160K01960 [*] Splash.MXplus daughterboard spare 160K08280 [*] Splash.TX daughterboard spare 160K08300 [*] Splash baseboard spare 160K01950 [*] PowerPC 601/66 Controller spare TBD [*] PowerPC 601/80 Controller spare TBD [*] PowerPC 601/100 Controller spare TBD [*] 17" Color Monitor 128K00560 [*] Color Central Deluxe 300K49950 [*] 14" Color Monitor 128K00550 [*] External Mac compatible CD ROM drive TBD [*] ESD Wrist Strap 115E3970 [*] Splash Cable 152K633320 [*] Splash v2.5 User's Manual Set 709P00094 [*] Color Central Lite spare 300K49940 [*] Adobe Photoshop LE spare TBD [*] Splash v2.5 Software Spare 300K42730 [*] Splash v3.0 Manual Set 709P00108 [*] Splash v3.0 Software Spare 300K49930 [*] Keyboard 110K07450 [*] Mouse 18K00770 [*] Orders for the above items marked with * must be place with a minimum quantity of 25 per delivery date. [*] Confidential Treatment Requested. [*] Out of Warranty Repair costs: The following out of warranty standard board repair costs apply during the time that the boards are in production. This repair charge will not, however, apply to any boards rendered unrepairable due ot physical abuse or damage. Splash.MX Daughter board [*] Splash.MXplus Daughter board [*] Splash.TX Daughter board [*] Splash Baseboard [*] [*] Confidential Treatment Requested. Accepted and Agreed as a contract attachment ammendment: By: Harvey L. Huddleston By: Kevin Macgillivray ------------------------- ----------------------------- Title: Com, The Xerox Connection Title: General Manager ----------------------- -------------------------- Date: March 31, 1995 Date: 4/10/95 ----------------------- -------------------------- Xerox Corporation Radius (SuperMac Technology) [*] CONFIDENTIAL TREATMENT REQUESTED ATTACHMENT IV DEVELOPMENT WORK SCHEDULE Macro Level Milestone Date Milestone Deliverable 10/25/93 Alpha Version Mid Range Product To be determined SW and HW with preliminary User number of prototype Interface, no sorter, no Windows Mid Range boards Driver. and Software 11/22/93 Beta Version Mid Range Product To be determined with Beta Version of User number of Beta Version interface, no sorter, no Windows Mid Range boards and Driver Software 1/31/94 Final shipping version Mid Range Begin Production Product with Final User Interface, version deliveries no Windows Driver 4/18/94 Alpha Versions of High End and Lite To be determined Products HW and SW for all three number of Alpha version version including Windows Driver High End and Lite and sorter support boards and Software 5/30/94 Beta Versions of High End and Lite To be determined Products HW and SW Adobe qualified number of Beta version for Beta Release High End and Lite boards and Software 6/27/94 Final Shipping Versions of High End Begin Production and Lite Products and SW with final version deliveries Adobe qualification [*] CONFIDENTIAL TREATMENT REQUESTED ATTACHMENT "V" XEROX AND SUPERMAC TECHNOLOGY CONTACTS
XEROX CONTACTS SUPERMAC CONTACTS BUYER AND CONTACT ADMINISTRATION CONTRACT ADMINISTRATION - -------------------------------- ----------------------- Harvey L. Huddleston Ron Moore The Xerox Connection SuperMac Technologies 2200 East Grand Ave. 215 Moffett Park Dr. El Segundo, CA 90293 Sunnyvale, CA 94089-1374 Tel: 310-333-4217 Tel: 408-541-5277 Fax: 310-333-4222 Fax: 408-541-6150 SUPPLY & DEMAND ORDER ADMINISTRATION - --------------- -------------------- Joy Lipari Norma Catt The Xerox Connection SuperMac Technologies 2200 East Grand Ave. 215 Moffett Park Dr. El Segundo, CA 90293 Sunnyvale, CA 94089-1374 Tel: 310-333-4217 Tel: 408-541-5082 Fax: 310-333-4222 Fax: 408-541-5005 MAJESTIC PRODUCT MANAGEMENT GENERAL MANAGER-COLOR HARD COPY GROUP - --------------------------- ------------------------------------- Mark Audino Mark Housley Xerox Corp. SuperMac Technologies 800 Phillips Rd., Bldg. 311 215 Moffett Park Dr. Rochester, NY 14580-9701 Sunnyvale, CA 94089-1374 Tel: 716-427-4316 Tel: 408-541-5215 Fax: 716-427-4904 Fax: 408-541-6150 MAJESTIC TECHNICAL PROGRAM MANAGER TECHNICAL PROGRAM MANAGER - ---------------------------------- ------------------------- Vittal Shenoy Tim Kleffman 800 Phillips Rd., Bldg. 311 215 Moffett Park Drive Rochester, NY 14580-9701 Sunnyvale, CA 94089-1374 Tel: 716-422-4199 Tel: 408-541-5109 Fax: 716 Fax: 408-541-6150 MAJESTIC MULTINATIONAL PRODUCT LAUNCH MANAGER - --------------------------------------------- Fred Peeks 800 Phillips Rd., Bldg. 311 Rochester, NY 14580-9701 Tel: 716-427-4448
ATTACHMENT "X" - TECHNICAL SUPPORT ATTACHMENT X SOFTWARE SUPPORT SuperMac will provide support described below between the hours of [*] Monday through Friday. FIRST LEVEL SUPPORT RESPONSIBILITIES Xerox will act as the initial point of contact and provide customer assistance during the pre-sale and pre-install phases of the Products. Xerox will provide limited post-sale first level telephone hotline support as needed, and engage SuperMac for the more involved support. As a function of the initial contact, Level 1 Support shall direct customer diagnostics operation to attempt to isolate between copier and Splash failures, then to isolate hardware failures to determine if there is a Splash product hardware failure. Xerox will provide support to the customer during the installation and post installation of the Products to enhance customer satisfaction. Level 1 Support shall either (i) satisfy the customer, (ii) dispatch a hardware replacement to the customer to replace defective hardware, or (iii) For North America Customer Operations: pass the call to Level 2 Support for further diagnosis, and for Europe and Latin America: use email, fax or telephone in English to pass information to Level 2 support. The Level 1 Support provider shall always remain primarily responsible for the trouble call and shall always confirm with the customer that subsequent levels of support have satisfied their support responsibilities. SuperMac will provide reasonable additional support and training, when requested by Xerox, during the pre-sale and pre-install phases of the Products. SECOND LEVEL SUPPORT RESPONSIBILITIES SuperMac will verify Product problems reported by customers, including duplicating problems whenever possible in a controlled environment. Level 2 Support shall maintain a reasonable amount of products and other equipment to allow, if necessary, duplication of the customers operating environment to assist in diagnosis of the problem. [*] SMT will supply all other equipment. If the proposed resolution is replacement of hardware. Level 1 Support shall dispatch the required hardware and handle any further exchanges with the customer. SuperMac will report verified Product failures or unresolved problems to third level support. SuperMac will provide third level support with all available information and materials related to any Product failure or unresolved problem for resolution. SuperMac will coordinate the definition and resolution of all Product problems reported by a customer, including maintaining contact with the customer throughout the resolution process and gathering additional diagnostic information required by third level support. SuperMac will maintain an integrated file record of Product problems reported, the nature of each problem, whether or not it has been resolved and the nature of the solution. Upon the occurence of a problem for which a solution has previously been developed, SuperMac shall communicate the solution to the end user without involving third level support. THIRD LEVEL SUPPORT RESPONSIBILITIES Level 3 Support shall consist of software and hardware engineers sufficiently familiar with the design and operation of the product to allow for diagnosis of complex design and software functional issues. Level 3 Support shall examine reported failures of the product operation that fail to meet specifications and shall propose a solution to the problem and a date by which such solution will be [*] Confidential Treatment Requested. ATTACHMENT "X" - TECHNICAL SUPPORT available. The time frame in which such proposal shall be made shall be dependent on the SPAR Severity Level, in accordance with Xerox standard SPAR resolution times as shown in Attachment X-1. SuperMac will perform the analysis of reported product failures and unresolved problems and undertake any efforts to develop solutions of bypasses. SuperMac will provide first level support or second level support in machine format for updated programs and associated documentation developed in response to the resolution of product failures and non-conformances. SuperMac will provide information, where such information is not clearly described in the associated documentation, and consulting assistance regarding the operation of the Products in order to enable second level personnel to perform their second level support responsibilities. SuperMac will maintain current updated master libraries for the Product including all programs and documentation and inform Xerox of any changes or updates. HARDWARE REPAIR SUPPORT Xerox Corp. Customer Operations groups shall inventory spare parts in sufficient quantity to provide all required dispatched of hardware to resolve customer problems, both during and after the warranty period. SuperMac shall, during the warranty period, repair or replace any defective hardware returned to SuperMac by Xerox Corp. (TXC). HARDWARE REPAIR SUPPORT Xerox Corp. Customer Operations groups shall inventory spare parts in sufficient quantity to provide all required dispatched of hardware to resolve customer problems, both during and after the warranty period. SuperMac shall, during the warranty period, repair or replace any defective hardware returned to SuperMac by Xerox Corp (TXC) at no charge. SuperMac shall not be obligated to accept returns from any other source. Subsequent to the warranty period, or for failures not covered by the warranty, SuperMac shall repair or replace any defective hardware for a flat exchange fee, except that if the returned hardware is for any reason not repairable, Supermac shall have the right to charge Xerox the full new purchase price of any replacement hardware. SuperMac shall provide hardware repair support for [*] following the date of last shipment of new units of any particular version of hardware, and shall allow Xerox (TXC) to do one last spares purchase, necessary to conduct exchanges for any remaining useful life of the product, concurrent with the final build of new units. The flat rate exchange fee may be adjusted to reflect increased parts and/or repair costs during this period. [*] Confidential Treatment Requested ATTACHMENT "X" - TECHNICAL SUPPORT SOFTWARE SUPPORT SuperMac shall provide Level 2 and 3 technical support to customers for the current shipping and last previous shipping versions of the product software, or in the case of a discontinued hardware product, the last version of the software that supports such product. Users in possession of any prior version must update to the most current version in order to receive any assistance from Level 2 or Level 3 Support. Software Upgrades are defined as releases of software that are not intended to provide increase functionality or performance, but to correct errors in operation in accordance with specifications. Upgrade versions shall be identified by 1.XX.01 numbers where the XX portion refers to the Upgrade version number. Software Upgrades are defined as releases of software that are intended to provide increase functionality or performance, or to provide compatibility with application or system software that was not released for general use at the time of the previous Upgrade version. Upgrade versions shall be identified by XX.1.01 numbers where the XX portion refers to the Update version number. During the warranty period of the customer's hardware, superMac shall provide the most current Update version of the Product software at no cost to the customer. After the hardware warranty period, SuperMac shall have the right to charge the customer for software Updates. SuperMac shall use commercially reasonable efforts to include in each Update releases solutions for all level 1-3 SPAR's open as of a specified cutoff date for each Update release, and as many of the level 4 SPAR's as SuperMac in the reasonable exercise of its discretion considers desirable to incorporate into any particular Update release. SuperMac may always, at SuperMac's option substitute an Upgrade version of the software in place of an Update version to customers within the warranty period at no charge, but shall be under no obligation to do so. SuperMac shall not be required to release during the term of the Agreement any more than one Update version of the software. Acceptance testing of the software by Xerox, or Xerox and SuperMac in cooperation shall be definitive on the compliance of the Software with the specifications. SuperMac at its option may choose to make further Updates or refinements, and Xerox may request SuperMac, at Xerox' expense, to incorporate specified changes to the software and its operation, subject to the availability of engineering resources at SuperMac. ATTACHMENT X-1 -------------- MAINTENANCE & SUPPORT --------------------- SOFTWARE PROBLEM ACTION REQUEST (SPAR) 1. SuperMac will provide MAINTENANCE MODIFICATION services, which will consist of SuperMac using its reasonable best efforts to design, code, and implement programming changes to the Products and modifications to the documentation to correct reproducible errors therein such that the Products is brought into conformance with the Specifications listed in Attachment I. 2. SuperMac will respond to SPARs (Software Problem Action Requests) and will use reasonable best efforts to perform the required MAINTENANCE MODIFICATIONS, for four severity levels, in time frames as shown in TABLE A below. All times are in working days, i.e., normal business days, measured from the day the SPAR is received TABLE A -------
SPAR Resolution* Severity Level Time --- --- 1 [*] 2 [*] 3 [*] 4 [*]
All customer PROBLEMS, of which Xerox receives notice, that become SPARs, are assigned one of the four SEVERITY LEVELS agreed to between the Op Unit/CO, SMT, and the customer. In case of dispute the voice of the customer takes priority. The PROBLEM/SPAR SEVERITY LEVEL determines the process timing and priority for resource allocations to address the PROBLEM. If a customer's current operational conditions change during the process, the SEVERITY LEVEL may be adjusted, with agreement between the Op Unit/Co and the customer, based upon any of these conditions: . A satisfactory workaround (interim Solution) is found. . A software update is available that may significantly reduce the impact of the problem to the customer's business. . Additional information surfaces concerning the impact of the problem. SEVERITY LEVEL is not changed based upon business priorities or aging. The definitions used to determine the correct SEVERITY LEVEL are listed below. SEVERITY 1 Catastrophic problem; the system is down and/or user has no production capability. SEVERITY 2 Severe problem; system is up, but production capability is seriously degraded. SEVERITY 3 Moderate problem; the system is up, but production capability is reduced. SEVERITY 4 Minor problem; system is up, with no significant impact to production. 3. All services provided under this Maintenance and Support Agreement shall be provided from SuperMac's facility. *Resolution shall mean: a recommended "deliverable" proposed to meet the customer requirements for a specific problem. The deliverable medium includes, but is not limited to, any of the following: [*] Confidential Treatment Requested. . Answer to an inquiry or request . A verbal instruction . Dispatch of an electronic patch, tape, disk, or medium available for communicating code changes . Remote code download . Dispatch of corrected documentation, or . Any other solution acceptable to the customer sufficient for problem closure. An acceptable resolution is a recommended "deliverable" that totally satisfies the customer requirements for a specific problem solution, and the problem can be closed. Further assistance is no longer required. An interim solution is a recommended "deliverable" that does not totally satisfy the customer requirements. SuperMac is still responsible for providing an acceptable solution to the customer. The problem remains open. . -----END PRIVACY-ENHANCED MESSAGE-----