AMENDMENT TO APRIL 1996 AGREEMENT
This Amendment to the April 1996 Agreement ("Amendment")
entered into this 23rd day of April, 1997, by and between
International Business Machines Corporation, a New York
corporation with its principal office at Xxx Xxxxxxx Xxxx,
Xxxxxx, Xxx Xxxx 00000 ("IBM"), and Accent Color Sciences, Inc.,
a Connecticut corporation with its principal place of business at
000 Xxxxxxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000
("ACS").
WHEREAS, ACS and IBM entered into an agreement dated April
11, 1996 ("April 1996 Agreement") for the production of certain
Products, as that term is defined in the April 1996 Agreement;
AND WHEREAS IBM and ACS desire to describe in greater detail
the rights and obligations provided for in Section 13.1 of the
April 1996 Agreement, and to provide for an escrow of certain
confidential materials;
NOW THEREFORE, in consideration of the promises set forth
below and other valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows.
Introductory Note: Attached to this Amendment are three
attachments, which are incorporated into and made a part of this
Amendment:
A. Key Personnel Skills listing;
B. Letter dated April 23, 1997 from Spectra, Inc. to ACS;
C. Technology Escrow Agreement.
In the event IBM invokes its rights under Article 13.1, the
parties agree as follows:
(The following Key and Description shall apply to the
symbols referred to in Sections I, II and III:
OD Operations Directory
ED Engineering Directory
QD Quality Directory
ID Information Technology Directory
M MAX System
C Cad System
P Paper documents
D Dynamics System
FAS Fixes Asset System)
I. Business Agreements and Access to Information
ACS shall provide IBM with:
A. A listing of all of its suppliers and shall assign
all supplier contracts to IBM with the same terms
and conditions. (E.g. Spectra, Xxxxxx and the key
module suppliers. (P) With regard to Spectra, Inc., see
Attachment B.)
B. The latest detailed manufacturing cost table (M)
C. A listing of the key personnel with the skills
described in Attachment A to this Amendment.(D)
D. A listing of the infrastructure required to
replicate ACS's information technology network systems.
(P/D)
E. A listing of the ACS patents required to
manufacture the ACS products.(P)
F. The test data and documents covering all
environmental approvals worldwide.(P)
G. The latest supply/demand information, a listing of
all work in process and finished goods inventory and a
summary of all open purchase orders. (M)
II. Access to Technical Information and Intellectual Property
ACS shall provide IBM with:
A. An updated listing of machine level control by
serial number. (ED)
B. All functional specifications (ED)
C. A complete listing of the xxxx of material
highlighting all custom parts and all off the shelf
parts. (M)
D. All assembly drawings and artwork. (C)
E. All manufacturing procedures for build, test,
inspection, debug and final approval, including the key
vendor modules (QD/OD)
F. All quality control procedures covering ACS's
products and processes. (ED/OD)
G. ISO 9001 documentation and procedures (P)
H. A listing of all parts and the sources for all
parts, including all spare parts. (M)
I. A copy of all regulatory agency approvals and
letters of certification. (P)
J. A description of plans for future improvements,
cost reductions and sub-contracts with third parties,
including the timetable and current status. (ED/OD)
K. Engineering change documentation and procedures
(M/ED)
L. Problem logs and a summary of the status of fixes
in progress (ED)
M. Source code for the microcode, firmware, software
and production images, with the right to modify the
source code. (C/P)
N. All manufacturing routings (M)
O. The procedures for developing, building, testing
and adjusting the products to be provided under this
Agreement. (C)
P. Next generation engineering specifications and
parts drawings developed for IBM products. (C)
Q. A General Availability level tape, which shall
remain fixed.
III. Right to Assignment and/or Acquisition of Assets
IBM shall have the right to purchase any of the assets set
forth below at fair market value and/or replicate any asset by
utilizing the escrowed documents. In the event that IBM elects
to purchase any of these assets, ACS shall be allowed to
replicate them at ACS's expense.
A. All inventory, including work in process and
finished goods to be provided under this Agreement.(M)
B. One set of the capital equipment tools, fixtures
and drawings used to develop, manufacture and test the
240 and 300 dpi models, including printhead alignment
tools, alignment tools for input/output paper path
modules, belt break in fixtures, Print Quality lab
equipment and its code. (C)
C. All information technology infrastructure required
to develop and manufacture the Products under this
Agreement. (P/ID)
D. Emergency parts. (N)
E. One set of any custom tools and fixtures required
for IBM or a third party to get into production.
F. ACS shall provide IBM a world wide, royalty free,
non-exclusive license to the ACS patents required to
manufacture the ACS Products.
IV. Disaster Recovery.
Within sixty (60) days ACS shall enter into a disaster
recovery plan with a third party. The plan shall include, at a
minimum, all of the items listed in this Amendment.
V. Failures Caused by Spectra
In addition to the provisions contained in Attachments B and
C to this Amendment, ACS and IBM agree that IBM will not invoke
the provisions of Article 13.1 in the event that ACS's failure to
provide Products, Spare Parts and/or Supplies within the
requisite thirty (30) days is: 1) caused by Spectra, and 2)
beyond ACS's reasonable control.
IN WITNESS WHEREOF, the parties have executed this Amendment
to the April 1996 Agreement as of the day and year first set
forth above.
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
Title: Director of Business
Alliances
Date: April 23, 1997
ACCENT COLOR SCIENCES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Title: Chairman
Date: April 23, 1997
ATTACHMENT A
Key Personnel Skills Listing
Quantity Description
2 Information Technology Skills (Network
Specialist/Application Specialist)
1 Financial Analyst
2 Electrical Engineers (Circuit Board Design/
Power Design)
4 Mechanical Engineers (Paper-Path, Printhead
Operations, I/O Modules and Manufacturing
Engineer covering suppliers)
1 Print Quality (expertise in printhead and its
alignment)
1 Standards, Safety and Compliance Administrator
2 Software/Micro Coders (Functional Code/
Firmware and Operator Panel expertise)
1 Service Engineer (Parts/Process and
Documentation expertise)
2 Manufacturing Ass'y Test Technician
2 Vendor Specialist and Procurement
Administrator
2 Production Planners (Eng. Change Administrator
and Production Control Administrator)
SPECTRA, INC.
Xxxx Xxxx
X.X. Xxx 00X
Xxxxxxx, XX 00000
April 23, 1997
Xx. Xxxxxxx X. Xxxxxx, Chairman
Accent Color Sciences, Inc.
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000
Re: Rights of IBM Under OEM Supply Agreement with
Accent Color Sciences, Inc.
Dear Dick:
This will confirm and expand on our conversation of
yesterday concerning the ability of International Business
Machines Corporation ("IBM") to purchase products under the OEM
Supply Agreement dated January 8, 1996 between Spectra, Inc.
("Spectra") and Accent Color (the "OEM Supply Agreement") in the
event that IBM has become entitled under its agreements with
Accent Color to manufacture or have manufactured or distributed
by Spectra pursuant to the OEM Supply Agreement.
We wish to facilitate your arrangements with IBM which are
in our mutual interest. To that end, Spectra hereby agrees as
follows:
1. Upon either (a) written notice by IBM and ACS that IBM
is properly exercising its rights to manufacture or have
manufactured ACS Hardware Products and/or purchase ink from
Spectra, or (b) a certified copy of a final arbitration award
that states IBM is entitled to exercise those rights, Spectra
agrees to supply to IBM those Spectra Products Spectra is
supplying to ACS.
2. Terms of supply will be the terms of the OEM Supply
Agreement, including, without limitation, all applicable license
terms, all ink purchase requirements and all forecasting terms,
except:
2.1 "Customer Product" will mean those
ACS Products being supplied to IBM at the
time of notice of exercise.
2.2 Sections 9.2 and 9.3 will not apply
to IBM. Spectra will give ACS credit under
these sections for product supplied directly
to IBM by Spectra provided ACS is also
ordering Spectra Products from Spectra under
the OEM Agreement for IBM or other customers.
Very truly yours,
SPECTRA, INC.
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
President
TECHNOLOGY ESCROW AGREEMENT
This Technology Escrow Agreement ("Escrow Agreement"),
entered into this 23rd day of April, 1997, by and between
International Business Machines Corporation, a New York
corporation with its principal office at Xxx Xxxxxxx Xxxx,
Xxxxxx, Xxx Xxxx 00000 ("IBM"), Accent Color Sciences, Inc., a
Connecticut corporation with its principal place of business at
000 Xxxxxxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000
("ACS"), and Murtha, Cullina, Xxxxxxx and Xxxxxx, a professional
partnership with its principal office at 000 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 ("MCRP" or "Escrow Agent").
WHEREAS, ACS and IBM entered into an agreement dated
April 11, 1996 ("April 1996 Agreement") for the purchase of
certain Products, as that term is defined in the April 1996
Agreement;
AND WHEREAS IBM desires to have access to the technology,
contracts and certain related documents, as set forth in greater
detail below, under specified conditions;
AND WHEREAS the parties wish to use an escrow agent to
facilitate IBM's access to the technology, contracts and certain
related documents;
AND WHEREAS MCRP is willing to act as the Escrow Agent on
behalf of the parties;
NOW THEREFORE, in consideration of the promises set forth
below and other valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows.
1. Definitions.
1.1 "Confidential Materials" shall mean those items of
software (in object code or source code), drawings, diagrams,
processes, formulas, procedures, patents, specifications, test
plans, data, reports, manufacturing documents, manufacturing
costs and other materials and documents listed in Sections I and
II of Addendum I and its attachments, dated April 23, 1996, to
which this Escrow Agreement is attached.
2. Deposit of Confidential Materials.
2.1 On or before April 30, 1997, ACS will deposit the
Confidential Materials with the Escrow Agent.
2.2 ACS shall update the Confidential Materials at the end
of each month, so that the Confidential Materials reflect the
current status of development for and manufacturing information
regarding the Products.
3. IBM's Right to Inspect Confidential Materials.
3.1 Upon seven (7) day written notice to ACS and Escrow
Agent, IBM shall have the right to inspect the Confidential
Materials at the office of Escrow Agent. This inspection shall
be for the purpose of determining that the Confidential Materials
contain the current status of the technology relating to the
Products. IBM shall not make any copies of the Confidential
Information, nor make notes in such detail as to allow it to
recreate the Confidential Materials or any portion of them.
4. Conditions for Release from Escrow.
4.1 IBM shall be entitled to obtain the Confidential
Materials from the Escrow Agent in the event that ACS shall fail
or be unable for any reason to provide Products, Spare Parts
and/or Supplies within thirty (30) days following receipt of
written notice of default from IBM pursuant to 13.1 of the
April 1996 Agreement; provided, however, that if ACS objects to
the release of the Confidential Materials as set forth below, the
Escrow Agent shall not release them and the matter shall be taken
to arbitration.
4.2 Notwithstanding anything to the contrary in Section
4.1, IBM shall not exercise its rights under this Escrow
Agreement in the event that ACS's failure to provide Products,
Spare Parts and/or Supplies within the requisite thirty (30) days
is: 1) caused solely by Spectra, or 2) beyond ACS's control.
5. Procedure for Release of Confidential Materials.
5.1 In the event that IBM believes the conditions for
release from escrow have been met, it may send a written "Notice
of Default" to Escrow Agent, stating in detail the facts
supporting IBM's demand for the Confidential Materials. To the
extent that IBM relies on any documents, such as purchase orders,
it shall attach the same to its Notice of Default.
5.2 Upon receipt of the Notice of Default, the Escrow Agent
shall send a copy, by certified mail or by overnight delivery,
receipt requested, to ACS. If ACS disputes IBM's right to
receive the Confidential Materials from escrow, it shall, within
ten (10) days following its receipt of the Notice of Default from
Escrow Agent, provide the Escrow Agent with an affidavit signed
by an officer of the company stating that no default has
occurred. Upon receipt of the affidavit, Escrow Agent shall send
a copy to IBM and the provisions of Section 6 shall become
applicable.
6. Dispute Resolution.
6.1 In the event that ACS has objected to the release of
the Confidential Materials pursuant to Section 5, IBM and ACS
shall refer the matter to binding arbitration before the American
Arbitration Association. The Commercial Arbitration Rules of the
American Arbitration Association shall apply. The arbitration
panel shall consist of three persons. IBM and ACS shall each
select one arbitrator and the appointed arbitrators shall select
a third, who shall be the chair of the panel. The arbitration
shall be held in Hartford, Connecticut.
6.2 The arbitrators shall be authorized only to determine
whether or not the conditions authorizing the release of the
Confidential Materials, as set forth in Section 4, have been met.
If the arbitrators determine the conditions for release have been
met, they shall order the Escrow Agent to release the
Confidential Materials to IBM. The arbitrators may not award
damages to either party.
6.3 The award of the arbitrators may be entered into any
court having competent jurisdiction.
6.4 Each party shall be responsible for its own attorneys
fees. The parties shall each pay one-half of the cost of the
arbitration.
7. IBM's Right to Use Confidential Materials.
7.1 In the event that IBM obtains the Confidential
Materials from escrow, its right to use them shall be as set
forth in the April, 1996 Agreement and its Addendum I.
8. Appointment of Escrow Agent.
8.1 IBM and ACS hereby appoint Murtha, Cullina, Xxxxxxx and
Xxxxxx to act as Escrow Agent.
8.2 IBM and ACS acknowledge that MCRP has agreed to act as
Escrow Agent as an accommodation to them because of their need to
have an Escrow Agreement in place on or before April 25, 1997.
It is the intent of IBM and ACS that a third-party escrow agent
shall be selected within thirty to sixty days to replace MCRP.
8.3 IBM expressly acknowledges that MCRP is general counsel
to ACS and is involved in negotiating the agreements between ACS
and IBM. In the event that IBM and ACS shall become involved in
arbitration or litigation involving this Escrow Agreement or any
other agreement or matter between them, IBM expressly waives any
conflict of interest that MCRP might otherwise have by virtue of
its role as Escrow Agent. In the event of any such litigation or
arbitration, IBM expressly consents to MCRP acting as counsel to
ACS adverse to IBM.
8.4 MCRP shall act as Escrow Agent without compensation.
9. Term.
9.1 This Escrow Agreement shall remain in effect until the
earlier of the appointment of another escrow agent by IBM and
ACS, or July 1, 1997.
9.2 In the event that another escrow agent is appointed,
MCRP shall arrange for the shipment of the Confidential Materials
to the new escrow agent. The parties shall be liable for the
cost of shipment.
10. Limitation on Escrow Agent's Responsibility and
Liability.
a. The Escrow Agent shall not be obligated or
required to examine or inspect the Confidential Materials. The
Escrow Agent's obligation for safekeeping shall be limited to
providing the same degree of care for the Confidential Materials
as it maintains for its valuable documents and those of its
clients. However, the parties agree and acknowledge that the
Escrow Agent shall not be responsible for any loss or damage to
any of the Confidential Materials due to changes in such
atmospheric conditions (including, but not limited to, failure of
the air conditioning system), unless such changes are proximately
caused by the gross negligence or malfeasance of the Escrow
Agent. If the Confidential Materials are damaged in any way,
ACS shall immediately upon notice from the Escrow Agent provide
the Escrow Agent with an undamaged copy of the Confidential
Materials.
b. The Escrow Agent shall be protected in acting upon
any written notice, request, waiver, consent, receipt, or other
paper or document furnished to it, and may assume its due
execution and the validity and effectiveness of its provisions.
c. In no event shall the Escrow Agent be liable for
any act or failure to act under the provisions of this Escrow
Agreement, except where its acts are the result of its gross
negligence or malfeasance. The Escrow Agent shall have no duties
except those which are expressly set forth herein, and it shall
not be bound by any notice of a claim, or demand with respect
thereto, or any waiver, modification, amendment, termination, or
rescission of this Escrow Agreement, unless in writing received
by it, and, if its duties under this Escrow Agreement are
affected, unless it shall have given its prior written consent
thereto.
d. The parties to this Agreement hereby jointly and
severally indemnify the Escrow Agent against any loss, liability,
or damage (other than any caused by the gross negligence or
malfeasance of the Escrow Agent), including reasonable costs of
litigation and counsel fees, arising from and in connection with
the performance of its duties under this Agreement.
11. Waiver, Amendment, or Modification
This Escrow Agreement shall not be waived, amended, or
modified except by the written agreement of all the parties
hereto. Any invalidity, in whole or in part, of any provision of
this Escrow Agreement shall not affect the validity of any other
of its provisions.
12. Notifications regarding this Escrow Agreement shall be
sent to: Xxxx Xxxxxxxx, Director of Business Alliances, 0000
Xxxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000; Xxxxxx Xxxxxxxx,
President, Accent Color Sciences, Inc., 000 Xxxxxxxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000; and Xxxxxxx X.
Xxxxxx, Esq., Murtha, Cullina, Xxxxxxx and Xxxxxx, CityPlace I,
000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
13. This Escrow Agreement shall be governed by the laws of
the State of Connecticut, without regard to its choice of law
provisions.
IN WITNESS WHEREOF, the parties have executed this Escrow
Agreement as of the day and year first set forth above.
Attest INTERNATIONAL
BUSINESS MACHINES CORPORATION
By: Xxxxxxx X. Xxxxxxxx
Title:Director Business Alliances
ACCENT
COLOR SCIENCES, INC.
By: Xxxxxxx X. Xxxxxx
Title: Chairman
MURTHA,
CULLINA, XXXXXXX AND XXXXXX
By: Xxxxxxx X. Xxxxxx, Xx.
Title: Partner
