EXHIBIT 4.7
OEM AGREEMENT
BETWEEN
HEWLETT-PACKARD COMPANY
("HP")
AND
INDIGO N.V.
("INDIGO")
CONFIDENTIAL
OEM AGREEMENT
THIS AGREEMENT is entered into on this 13th day of September, 2000 ("EFFECTIVE
DATE"), by and between HEWLETT-PACKARD COMPANY, a Delaware company with its
principal offices at 0000 Xxxxxxx Xxxxxx, XX00-XX, Xxxx Xxxx, Xxxxxxxxxx, 00000
("HP"), and INDIGO N.V., a Netherlands company with its principal offices at
Xxxxxxxxxxx 0, 0000 XX Xxxxxxxxxx, Xxx Xxxxxxxxxxx ("INDIGO").
WHEREAS, HP is engaged in the development, manufacture, marketing, sale, and
service of computers, printers, and other business and consumer products, and is
a leading global provider of computing and imaging solutions and services for
personal, office and enterprise applications, currently selling printers at
prices of up to approximately $10,000; and
WHEREAS, Indigo is engaged in the development, manufacture, marketing, sale and
service of Digital Offset Color(TM) printing and imaging products that
incorporate Indigo's proprietary, ink-based digital printing technology, at
prices of approximately $150,000 and above, for commercial and industrial
applications; and
WHEREAS, on November 17, 1998, the Parties entered into a Strategic Affiliation
Agreement pursuant to which the Parties agreed, inter alia, to explore the
technical and economic feasibility of developing and selling digital color
printing products combining Indigo's and HP's technology and know-how for
applications not presently served by either firm, to identify the key "enablers"
necessary to achieve broad adoption of Indigo's technology in the corporate
enterprise environment, and to form a strategic technical alliance for exploring
such possible future products and applications; and
WHEREAS, the said feasibility exploration has been successfully completed, and
the Parties have concluded that, in collaboration with one another, they have
the opportunity to introduce products to serve production color printing and
publishing applications; and
WHEREAS, in order to capitalize upon such opportunities, the Parties wish to
enter into a commercial relationship to aggressively pursue the aforesaid
business opportunities by (a) HP's sale of certain Indigo products on an OEM
basis, on the terms and conditions set forth in this Agreement; (b) the joint
development of future products, as more fully described in the Jericho
Co-Development Agreement; and (c) an HP equity investment in Indigo, as more
fully described in the Stock Purchase Agreement.
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NOW THEREFORE, subject to the terms and conditions set forth herein, the Parties
agree as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
Capitalized terms used in this Agreement and not otherwise defined have the
meanings as follows:
"AFFILIATE" means, with respect to a Party, any Person controlling, controlled
by or under common control with such Party. For the purposes of this definition,
control of a Person shall mean the ownership of 50% or more of the voting power
of such Person.
"AGREEMENT" means this agreement and any appendices to this agreement.
"HP CUSTOMERS" means customers of HP to whom HP has supplied an OEM Printer.
"INSOLVENCY EVENT" means the occurrence of any of the following:
(a) An involuntary proceeding is commenced or an involuntary petition shall
be filed seeking (i) liquidation, reorganization or other relief in
respect of a Party or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for a Party or for a substantial part
of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 120 days or an order or decree approving or
ordering any of the foregoing shall be entered.
(b) A Party shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect, (ii) consent to the institution
of, or fail to contest in a timely (i.e., as imposed by applicable law)
and appropriate manner, any proceeding or petition described in clause
(a) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for a
Party or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any action for the purpose of effecting any of
the foregoing.
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(c) A Party shall become unable, admit in writing or fail generally to pay
its debts as they become due.
"INTELLECTUAL PROPERTY" means unpatented inventions, patent applications,
patents, design rights, copyrights (including, without limitation, rights in
computer software), know-how and other trade secret rights and all other rights
or forms of protection of a similar nature or having equivalent or similar
effect to any of these rights (but excluding trademark rights), whether or not
any of these rights is registered, and including, without limitation,
applications for registration of, and rights to apply for, any such rights.
"JERICHO CO-DEVELOPMENT AGREEMENT" means the agreement of that name entered into
by the Parties on the Effective Date.
"OEM CONSUMABLES" means all ink, imaging oil, image transfer blankets and photo
imaging plates (photoconductors) used in connection with OEM Printers.
"OEM PRODUCTS" means, collectively, the OEM Printers, the OEM Consumables and
the OEM Spare Parts supplied by Indigo to HP pursuant to this Agreement.
"OEM PRINTERS" means digital printers offered for sale by Indigo for general
commercial printing, which HP chooses to OEM under this Agreement.
"OEM SPARE PARTS" means all spare parts needed in connection with the OEM
Printers and as set forth in Indigo's spare parts catalog for each OEM Printer.
"PARTY" means either HP or Indigo (as the case may be) and "PARTIES" means both
HP and Indigo.
"PERSON" means an individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, sole proprietorship, joint venture, government (or any agency or
political subdivision thereof) or other entity.
"STOCK PURCHASE AGREEMENT" means the agreement of that name entered into by the
Parties on or about the Effective Date.
2. OEM APPOINTMENT
2.1 Appointment
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Subject to the terms of conditions of this Agreement, Indigo hereby appoints HP,
and HP hereby accepts such appointment, as an HP-branded OEM for the OEM
Products.
2.2 Applications
HP shall have the right, either itself or through its appointed distributors, to
sell, lease, or otherwise place the OEM Products for any and all applications
and in any geographical territory. Indigo warrants that this arrangement does
not violate any distribution, OEM or other agreements or arrangements it has
with third parties. Notwithstanding the above, it is understood that:
2.2.1 HP shall, until June 30, 2002, focus its sales and marketing
efforts with respect to the OEM Products primarily on corporate
customers, government, certain quick-printers (i.e., chain or franchise
street-front printing establishments) although, for the avoidance of
doubt, HP shall be free to sell or lease the OEM Products to any
customer operating in any business segment or market.
2.2.2 HP's right to market and sell the OEM Products to customers in
Japan, Australia, New Zealand, Indonesia, Thailand, Malaysia,
Singapore, Philippines, Brunei, Vietnam, Laos, Cambodia, Myanmar and
Fiji will commence only upon the expiration or termination of the
exclusive distribution rights granted by Indigo to a third party under
an agreement dated May 4, 1994 (as amended) ("Exclusive Distribution
Agreement") in respect of such countries. Indigo will not, and the
third party does not have the right to, renew, extend or modify rights
affecting exclusivity set forth in the Exclusive Distribution Agreement
(in whole or in part). Indigo shall exercise its right to terminate the
third party's exclusivity under the Exclusive Distribution Agreement
immediately after that right first arises.
2.3 Limitation on further OEM appointments by Indigo
In order to enable HP to achieve penetration through sales of OEM Products in
the corporate enterprise ("print-for-own-use") segment, Indigo shall refrain,
through December 31, 2002, from appointing additional OEMs for the same or
similar products for the same applications. Such period shall be automatically
extended through December 31 2003 if HP's purchases of OEM Products from Indigo
reaches $12.5 million in the fourth calendar quarter of 2002.
2.4 Customer relationship management.
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HP shall be the exclusive owner and manager of the relationship with HP
Customers. To this end, if Indigo is performing Services on HP's behalf, HP
shall determine the content of all interaction (if any) between Indigo and HP
Customers, including without limitation the content of all help desk scripting
and the representations made by Indigo personnel to HP Customers in all
circumstances. Further to the above, Indigo shall not contact or respond to
enquiries from any HP Customer without prior written approval of HP in each
case.
3. OEM PRODUCTS
3.1 Initial OEM Product Identification
Within 90 days of the Effective Date, HP shall select, in consultation with
Indigo, the initial OEM Printers to be supplied to HP under this Agreement from
any one or two of Indigo's range of commercial printing products. Indigo shall,
at HP's cost, offer all reasonable assistance required by HP to identify such
printing products.
3.2 Additional Products
3.2.1 Adding New Products. HP shall have the right to submit a Request
For Quotation ("RFQ") to Indigo for inclusion of additional current or
future Indigo products (and related consumables and spare parts) as OEM
Printers. Indigo shall respond to such RFQs within 30 business days.
3.2.2 Indigo Assistance. Indigo shall, from time to time, as reasonably
requested by HP, collaborate with and discuss opportunities for HP to
OEM further Indigo products.
3.3 Substitution of Alternate OEM Products
HP shall, until December 31, 2003, distribute at least one OEM Product. HP shall
have the right, in its discretion, to discontinue (temporarily or permanently)
the distribution of any OEM Product . If such discontinuance results in HP no
longer distributing any OEM Products under this Agreement, HP shall, prior to
discontinuance, substitute another OEM Product to be agreed upon. HP shall bear
Indigo's reasonable costs associated with any such discontinuance which ramps
down at a rate that is more precipitous than that set forth in the Forecast and
ordering provisions of section 6.
3.4 Product Changes
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Indigo shall not make any material adverse change to any OEM Product without
prior written consent of HP, which HP shall have the right to withhold in its
reasonable discretion. A material adverse change is any change to an OEM Product
which would in any way be disruptive to HP's business in selling or distributing
the OEM Products or any ancillary products or services. Indigo must give HP not
less than 90 days notice of any non-material adverse change to any OEM Product.
3.5 Product Enhancements
Indigo shall make available to HP, free of charge, all future improvements,
enhancements and product fixes to the OEM Products which it generally makes
available free of charge to its suppliers or customers . Such enhancements,
improvements and product fixes shall be made available no later than made
available to Indigo's suppliers or customers. To the extent that enhancements
are offered free of charge by Indigo to its own customers solely for the purpose
of providing a short-term sales incentive, Indigo shall not be obligated to
offer such enhancements to HP free of charge.
3.6 Changes suggested by HP
HP shall have the right, from time to time, to suggest changes to the OEM
Products that it wishes Indigo to incorporate. The Parties shall engage in good
faith negotiations regarding any such changes.
3.7 New documentation
If any changes are made to the OEM Products as set forth in sections 3.4-3.6,
Indigo shall, as soon as possible thereafter, provide HP with appropriately
modified use and marketing documentation in electronic form.
4. PERFORMANCE
4.1 Commercial Efforts and Promotions
HP shall use commercially reasonable efforts to aggressively promote sales of
OEM Products with a view to maximizing sales or revenue from sales of OEM
Products. All marketing and promotion of the OEM Products as sold by HP shall be
conducted by HP in a manner not inconsistent with the marketing and promotion of
other similarly situated OEM products.
4.2 Minimum purchase commitments
HP shall have no obligation to meet any minimum OEM Products sales targets.
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5. SUPPLY OF OEM CONSUMABLES AND OEM SPARE PARTS
5.1 Supplies for OEM Products
Indigo shall provide, and HP shall acquire from Indigo, all OEM Consumables and
OEM Spare Parts, and HP shall supply OEM Spare Parts and OEM Consumables only to
HP Customers.
5.2 Continuous supply by Indigo
For as long as there exist any HP Customers, Indigo will continue to supply the
relevant OEM Spare Parts and OEM Consumables to HP for its supply to HP
Customers. Termination or substitution by HP of its supply of any particular OEM
Printers under section 3.3 or termination of this Agreement shall not affect
Indigo's obligations as set forth in this section 5.2. The foregoing
notwithstanding, Indigo's aforesaid supply obligation, in the case of an OEM
Printer the manufacture of which has been discontinued, shall expire 10 years
after such discontinuance.
5.3 Indigo not to supply HP customers
Indigo shall refrain from soliciting to supply OEM Consumables or OEM Spare
Parts to HP Customers.
6. FORECASTS, PURCHASE ORDERS AND FULFILLMENT
6.1 Forecasts
6.1.1 Forecast Date. HP shall, not later than 14 days after the date on
which HP selects the OEM Printers pursuant to section 3.1, and
thereafter not later than each quarterly anniversary of that date
("FORECAST DATE"), provide Indigo with a written rolling forecast
("FORECAST") of its estimated demand for OEM Products for the calendar
quarter commencing one year after the Forecast Date ("FORECAST
QUARTER"). Subject to section 6.2, the Forecasts shall not be binding
upon HP.
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6.1.2 Non-binding estimate for 2001. HP estimates that its demand for
OEM Products for calendar year 2001 will reflect estimated aggregate
sales of OEM Products of $75-$100 million. This estimate is not binding
on HP in any way unless it is formally submitted by HP as a Forecast in
which case it will be subject to sections 6.1.1 and 6.2. HP shall,
prior to December 31, 2000, provide Indigo with a written Forecast of
its estimated quarterly requirements for OEM Products for calendar year
2001 and shall, after consultation with Indigo regarding timing and
delivery constraints, issue purchase orders accordingly and consistent
with the process set forth in section 6.2.
6.2 Variation of Forecast for OEM Printers
After the expiry of the quarter following the Forecast Date ("SUBSEQUENT
QUARTER"), the Forecast will become binding upon HP as a purchase order for the
OEM Printers set forth in the Forecast, subject to the following:
6.2.1 First Variation. HP may, at any time during the Subsequent
Quarter, give Indigo notice in writing that it would like to increase
or decrease the quantity of OEM Printers set forth in the Forecast by
up to 30%, and upon giving such notice, the quantity of OEM Printers
the subject of the purchase order will be deemed to be increased or
decreased (as the case may be) accordingly.
6.2.2 Second Variation. HP may, at any time during the quarter
following the Subsequent Quarter, give Indigo notice in writing that it
would like to either increase or decrease the quantity of OEM Printers
set forth in the Forecast by a further 15%. Upon giving such notice the
amount of OEM Printers the subject of the purchase order will be deemed
to be increased or decreased (as the case may be) accordingly.
6.3 Additional Increases for Printers
Notwithstanding section 6.2, HP may increase the quantity of OEM Printers in any
purchase order by notice in writing sent to Indigo not less 90 days before the
quarter in which delivery of the OEM Printers the subject of that purchase order
is due to take place. Indigo shall make reasonable efforts to fulfill such
demand from HP for such increased quantities. In each such case, the price for
the additional OEM Printers will be the usual price charged by Indigo under this
Agreement, unless there is additional cost to Indigo in fulfilling the order for
the additional OEM Printers. If Indigo incurs such additional cost, HP will pay
the amount of the additional cost upon Indigo providing HP with reasonable
evidence of the additional cost incurred.
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6.4 Forecast procedure review
Not less than once every year the Parties will jointly review, conduct good
faith discussions regarding, and modify (as reasonably necessary) the provisions
of sections 6.2 and 6.3 in order to ensure that those provisions simultaneously
achieve the following objectives ("OBJECTIVES") of:
6.4.1 providing HP with maximum flexibility in its ordering and
purchasing of OEM Products from Indigo; and
6.4.2 providing Indigo with adequate time to manage supply of OEM
Products to HP without incurring substantial additional costs as a
result of the flexibility granted to HP.
6.5 OEM Spare Parts and OEM Consumables
The Parties will negotiate in good faith to implement, within 90 days of the
Effective Date Forecast, variation procedures for OEM Spare Parts and OEM
Consumables similar to those set forth in sections 6.2 and 6.3 with the goal of
achieving the Objectives. Such variation procedures will be subject to review,
negotiation and modification pursuant to section 6.4. Notwithstanding the
foregoing, Indigo represents that it will be able to provide significantly
greater flexibility to HP with respect to variations in orders for OEM Spare
Parts and OEM Consumables than it is able to offer HP under sections 6.2 and
6.3, provided that such flexibility is not precluded by HP's requirement for
unique branding of OEM Consumables .
6.6 Delivery and Title Transfer
Indigo shall deliver the OEM Products the subject of a purchase order in
accordance with a schedule setting forth the destinations and delivery times (to
be reasonably distributed throughout the quarter) to be submitted by HP to
Indigo not later than 30 days before the quarter in which HP requires delivery.
Such OEM Products shall be delivered, ex-works, Indigo's Israeli subsidiary's
premises, whereupon risk of loss of such OEM Products and title thereto shall
pass to HP.
6.7 Packing, Shipping and Insurance
Prior to delivery of the OEM Products in accordance with the provisions of
section 6.6 above, Indigo shall, at its expense, pack the relevant OEM Products
in a manner suitable for shipment. Immediately following such packing, Indigo
shall, should HP so request, arrange, in accordance with HP's instructions and
at HP's expense, for the shipment of such OEM Products to HP (or, if so
directed, to HP distributors or HP Customers) as well as for the procurement of
insurance thereon.
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7. MAINTENANCE, SUPPORT, DELIVERY, INSTALLATION, AND TRAINING ("SERVICES")
7.1 Implementation Plan
The Parties will negotiate in good faith to enter into a binding implementation
plan for the provision of the Services (and the terms and conditions (including
price) for the provision thereof) within 90 days of the Effective Date. The
implementation plan shall give effect to the Parties' intention as follows:
7.1.1 Initial provision. Indigo shall initially provide all Services
required by HP or HP Customers commencing from not later than the
installation of the first OEM Printers but will be required to provide
Services to HP Customers only in geographic regions that would enable
Indigo to make a reasonable margin in providing the Services;
7.1.2 Training. Training services shall be provided by Indigo to "train
the trainers" of HP;
7.1.3 Installation. Installation services shall be provided at HP's
request.
7.1.4 Change of provider. HP may request that either HP and/or one or
more third party service providers provide any or all of the Services
where there would be material cost savings and where provision is made
to compensate Indigo for the reasonable unrecoverable costs of formerly
providing the Services;
7.1.5 Customer relationship management and branding of Services. HP's
rights set forth pursuant to section 2.4 shall apply to the provision
of the Services to any HP Customer, and, additionally, HP shall
determine the branding of products and identification tags worn by
Indigo personnel in providing the Services.
7.2 Documentation
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Commencing at the time of the first training courses, and continuing throughout
the term of this agreement, Indigo shall furnish to HP, in digital form, at no
charge, written training and sales materials equivalent to those materials
provided to Indigo's own sales personnel. In addition, along with each OEM
Product furnished to HP, Indigo shall, at its expense, supply one copy of the
standard operator's manual. Such manual shall be in the English language. At
HP's request, Indigo shall provide such operator's manuals in an HP branded
version, provided that HP has supplied Indigo with appropriate digital files.
8. PRICING AND PAYMENT
8.1 Agreement on pricing of OEM Products
The Parties shall negotiate in good faith to reach agreement upon the pricing
for OEM Products within 90 days of the Effective Date, taking into consideration
that HP shall be granted most favored nation status on pricing of all OEM
Products and will also be granted volume discounts. To allow HP to confirm that
it is being afforded such status, Indigo will, upon request by HP, provide to an
independent third party auditor designated by HP and approved by Indigo (acting
reasonably) copies of Indigo's price lists and OEM discounts for all OEM
Products.
8.2 Further considerations
In addition to the most favored nation status granted under section 8.1, the
Parties shall also conduct formal quarterly reviews of OEM-related matters,
which may include price adjustments to reflect any HP contribution to the
reduction of Indigo's manufacturing costs, whether by cost reduction efforts or
by the incorporation of HP-provided components (such as formatter boards).
8.3 Payment terms
HP shall be entitled to pay invoices 30 days following receipt of such invoices,
which may be issued upon shipment of products by Indigo. However, if at any time
Indigo makes more favorable payment terms available to any other OEM customer of
any of its products for comparable quantities and other commercial terms, it
shall immediately make such payment terms available to HP. Any payment terms
inconsistent with this section 8.3 may be implemented only by agreement between
the parties.
8.4 Method and Place of Payment
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All payments under this Agreement shall be effected by means of a bank wire
transfer to a bank account designated by Indigo. Indigo may change the bank
account into which it requires HP to make payments by giving HP not less than 60
days prior notice in writing.
8.5 Ex-Works/Net Prices
All prices for the OEM Products are ex-works, Indigo's Israel subsidiary's
premises. All payments hereunder shall be effected in U.S. dollars, net, free of
any withholding or other taxes, levies, duties, imposts, charges, or deductions
of any nature whatsoever.
8.6 Customs
Upon HP's request Indigo will provide HP with an appropriate certification
stating the country of origin for OEM Products sufficient to satisfy the
requirements of the customs authorities of the country of receipt and any
applicable export licensing regulations, including those of the United States.
Indigo will xxxx each OEM Product, or the container if there is no room on the
OEM Product, with the country of origin. Indigo will, in marking OEM Products,
comply with the requirements, as specified by HP, of the customs authorities of
the country of receipt. If OEM Products delivered under this Agreement are
imported, Indigo will when possible allow HP to be the importer of record. If HP
is not the importer of record and Indigo obtains duty drawback rights to OEM
products, Indigo will, upon HP's request, provide HP with documents required by
the customs authorities of the country of receipt to prove importation and to
transfer duty drawback rights to HP.
9. BRANDING AND ADVERTISING
9.1 OEM Products
All OEM Products distributed by HP shall be branded solely by HP in its
discretion without the need to include any branding of or reference to Indigo,
but HP reserves the right to use Indigo branding at any time in its discretion.
HP shall likewise be entitled to market and promote the OEM Products without any
reference to Indigo.
9.2 Consumables and Spare Parts
Indigo shall xxxx the packaging of OEM Consumables and OEM Spare Parts with
HP-designated branding. In the event that HP's volume requirements of such
HP-branded OEM Products does not justify the expense of such custom-branding,
prices will be adjusted by prior agreement in writing.
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10. RESPONSIBILITIES
10.1 Responsibilities
In addition to its other undertakings hereunder, each Party shall:
10.1.1 Maintain staff. Maintain a staff of well-trained professional
personnel capable of carrying out all of the Party's obligations under
this Agreement.
10.1.2 Not pledge credit. Refrain from taking any action that, in any
way, may be binding upon the other Party or may pledge the other
Party's credit, unless so authorized by that Party in writing.
10.1.3 Customer agreements. In the case of HP only, enter into
agreements with HP Customers on terms that protect Indigo and its
third-party suppliers from copyright and other Intellectual Property
infringements to no lesser an extent than similar agreements HP
requires its OEMs to enter into with their customers.
10.1.4 Markings. In the case of HP only, attach or insert such markings
and information on the OEM Products as Indigo shall reasonably request
in order to protect Indigo's rights in and to its patents and
copyrights, provided such markings do not in any way dilute the value
or impact of HP's own branding of the OEM Products.
11. INTELLECTUAL PROPERTY
11.1 Warranty
Indigo warrants that it owns or has the unrestricted right to exploit all
Intellectual Property embodied in any of the OEM Products and that the sale of
the OEM Products by HP or its distributors and the proper use of the OEM
Products by HP Customers will not infringe the rights to any Intellectual
Property of a third party. This warranty does not extend to any HP Improvements
(as defined below) to OEM Products.
11.2 Indemnity
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Indigo shall indemnify HP and shall hold HP harmless, from and against any and
all losses, costs and damages, however arising, relating to any claim by a third
party that the offer for sale, sale, importation, licensing or leasing or use of
any OEM Product infringes rights of any such third parties to any Intellectual
Property. Indigo hereby agrees to defend any suit or proceeding brought against
HP by any such third party, provided that Indigo is notified promptly in writing
of such suit or proceeding, and provided further that Indigo shall receive (i)
full and complete authority to conduct the defense of such suit or proceeding,
including its possible settlement, HP hereby agreeing to any such settlement
effected by Indigo (other than any settlement requiring HP to accept liability
or pay any money or which could result in HP being in breach of any agreement or
arrangement with a third party, which HP may decline to accept in its absolute
discretion and without in anyway affecting Indigo's obligations under the
indemnity set forth in this section 11.2), (ii) at Indigo's sole cost all
information that HP may have and that may be pertinent to said defense and (iii)
at Indigo's sole cost HP's full cooperation and assistance in conducting said
defense. In addition to providing such defense, Indigo shall pay all damages and
costs awarded therein against HP, provided that HP has given Indigo the
authority, information and assistance required of it hereunder with respect to
such defense. Anything herein to the contrary notwithstanding, in no event shall
Indigo have any liability or responsibility to any Party whatsoever under this
section 11.2 if the alleged or proven infringement would not have occurred but
for (x) any misuse and/or misapplication of the OEM Product, (y) any
modification of and/or addition to such OEM Product by HP, its distributors, or
customers (including, without limitation, the addition of a front-end product)
and/or (z) the combining by HP, its distributors or customers of the OEM Product
with any other product, system, or sub-system (including, without limitation,
integration with a front-end product). In the event that any OEM Product shall
be held to be infringing and its offer for sale, sale, importation, licensing or
leasing, or use enjoined, Indigo shall, at its own expense, procure for HP and
its distributors the right to continue to offer for sale, sell, import, license
or lease such infringing OEM Product, and for HP's customers the right to use
such infringing OEM Products and redesign any OEM Product held to be infringing
as aforesaid so that it becomes non-infringing.
11.3 Improvements
HP shall have the right to make enhancements, modifications, and improvements to
OEM Products ("IMPROVEMENTS"). HP shall own all Intellectual Property rights in
Improvements made by HP to OEM products. HP shall make products embodying such
Improvements available to Indigo on reasonable commercial terms, or, at HP's
election, HP shall grant Indigo a non-exclusive, royalty bearing (at a
reasonable rate to be negotiated between the Parties in good faith) license in
the Intellectual Property rights in such Improvements for the term of this
Agreement.
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11.4 Trademarks
Each of the Parties acknowledges the other's exclusive ownership of its
trademarks, and declares that neither Party shall acquire rights in the other's
trademarks by virtue of anything contained in this Agreement. Each Party agrees
not to file applications for registration of trademarks that are the same or
similar to the other Party's trademarks nor to challenge the exclusive rights of
the other in such trademarks.
12. LIABILITY
12.1 Limitation of Liability
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, EXEMPLARY, OR INDIRECT DAMAGES (INCLUDING, WITHOUT
LIMITATION, LOST PROFITS, LOSS OF ANTICIPATED BUSINESS, LOSS OF DATA, OR
BUSINESS LOSSES), HOWEVER CAUSED AND BASED UPON ANY THEORY OF LIABILITY, ARISING
OUT OF THIS AGREEMENT, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. FURTHER, IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER FOR ANY CLAIM OF DIRECT DAMAGES ARISING OUT OF THIS AGREEMENT IN AN
AGGREGATE AMOUNT IN EXCESS OF $500,000 PER CLAIM, OTHER THAN IN RELATION TO
CLAIMS BY HP ARISING UNDER SECTION 11.2 OR CLAIMS ARISING AS A RESULT OF A
BREACH OF CONFIDENTIALITY IN CONTRAVENTION OF SECTION 18.1, IN RELATION TO WHICH
LIABILITY SHALL BE UNLIMITED.
13. PRODUCT WARRANTY
13.1 Warranty
Indigo warrants each OEM Printer and each OEM Spare Part against defects arising
from faulty materials or workmanship, provided that (a) the defect arises during
the Warranty Period and Indigo has received written notice of the defective item
not later than a reasonable period (not to exceed 30 days) after the end of the
Warranty Period (defined below), and (b) such item has been, stored, shipped,
installed, operated and maintained in accordance with the then current
recommendations set forth in Indigo's manual and/or other written instructions
and has not been modified without Indigo's prior written approval, where such
modification substantially and materially causes the defect.
13.2 Warranty Period
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The warranty period (the "WARRANTY PERIOD") with respect to each OEM Printer and
each OEM Spare Part shall commence on the date title thereto passes to HP and
shall end three months following receipt thereof by HP or HP's designee
(distributor or an HP Customer, as the case may be).
13.3 Defects
Should any part of an OEM Printer or OEM Spare Part be found to be defective
prior to the expiration of the Warranty Period due to Indigo's faulty materials
or workmanship, Indigo undertakes, at its expense, to do all things necessary to
repair or replace (at Indigo's sole option) such part and to return the
repaired/replacement part to HP within 30 days of receiving the defective part.
The provisions of this warranty shall apply to the repaired/replacement part for
the unexpired portion, if any, of the Warranty Period. For the sake of clarity,
all costs incurred by HP and/or its customer in the disassembly and reassembly
of the OEM Printers or OEM Spare Part (as the case may be), and/or in the
removal of an allegedly defective part therefrom, and/or in the incorporation of
a repaired or replacement part therein, shall be borne solely by HP/such
customer (as the case may be). All repairable parts shall be shipped to Indigo
by HP and treated in accordance with Indigo's "Repair Parts Policy," a copy of
which is attached as Exhibit "A."
13.4 Consumables Warranty
Consumables that, upon receipt by an HP Customer, are found to be defective and
unusable (Dud on Arrival or "DOA"), and which are promptly returned to Indigo by
HP, will be replaced by Indigo at no charge to HP. No warranty is provided for
the performance or yield of any Consumables. Solely for purposes of this
paragraph, those parts that are routinely replaced by the OEM Printer operator
(defined by Indigo as Operator Maintenance Parts (OMPs)) shall be deemed to be
Consumables.
13.5 Exclusion of other warranties
17
OTHER THAN AS SET FORTH IN THIS SECTION 13 AND SECTIONS 11 (INTELLECTUAL
PROPERTY) AND 14 (GENERAL REPRESENTATIONS AND WARRANTIES), INDIGO MAKES NO
WARRANTIES, LIABILITIES OR GUARANTEES, EXPRESS OR IMPLIED (INCLUDING ANY
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
PATENT WARRANTIES), OF ANY NATURE WHATSOEVER WITH RESPECT TO THE OEM PRODUCTS OR
ANY PART THEREOF DELIVERED HEREUNDER AND/OR WITH RESPECT TO ANY NON-CONFORMANCE
OR DEFECT IN ANY SUCH OEM PRODUCT AND/OR PART THEREOF DELIVERED HEREUNDER. THERE
IS NO WARRANTY COVERING DAMAGE TO THE OEM PRODUCTS OR ANY PART THEREOF RESULTING
FROM NORMAL WEAR AND TEAR.
13.6 Notice to Customers
In any sale by HP of OEM Products to HP Customers, HP shall not misrepresent the
extent of the Indigo warranty set forth in section 13.5. In addition, HP shall,
upon request, provide Indigo with a copy of the standard warranty, if any, it
makes to HP Customers regarding OEM Products.
14. GENERAL REPRESENTATIONS AND WARRANTIES OF THE PARTIES
Indigo hereby makes, for the purposes of this Agreement and for the benefit of
HP, the representations and warranties set forth in sections 3.1, 3.3, 3.5, and
3.17 (to the extent applicable to the OEM Products) of the Stock Purchase
Agreement, and those representations and warranties are hereby incorporated by
reference into this Agreement. In addition, each Party hereby represents and
warrants:
14.1 it is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization;
14.2 the execution, delivery and performance of this Agreement have been duly
authorized by such Party;
14.3 it has all requisite authority and ability to enter into and perform under
this Agreement, including granting the licenses granted hereunder; and
14.4 its performance under this Agreement will not materially violate any
agreement with or obligation to, or require the consent of, any third party.
15. TERM AND TERMINATION
18
15.1 Term
Subject to section 15.2, this Agreement shall commence on the Effective Date and
continue in force until December 31, 2003, unless earlier terminated by either
Party.
15.2 Termination for convenience
This Agreement shall automatically be extended for additional three year periods
beyond December 31, 2003 unless HP gives Indigo not less than 90 days notice of
termination, which HP shall have the right to do at any time without cause and
without penalty provided such notice expires after December 31, 2003.
15.3 Termination for breach
A Party shall have the right to immediately terminate this Agreement if:
15.3.1 the other Party breaches a provision of this Agreement and fails
to cure such breach within 60 days of receipt of notice from the other
Party identifying the breach and requesting that it be cured;
15.3.2 the other Party is the subject of an Insolvency Event.
15.4 Termination consequences
If HP validly terminates this Agreement, Indigo shall if requested by HP:
15.4.1 supply OEM Products the subject of a binding purchase order as
at the date of such termination;
15.4.2 continue to supply OEM Consumables and OEM Spare Parts to HP for
supply to HP Customers; and
15.4.3 continue to supply Services to HP for up to a period of 12
months, unless the provision of Services is the subject of a separate
agreement between the Parties in which case such Services shall be
provided in accordance with that agreement.
15.5 Survival
Sections 5, 8.1, 11, 12, 13, 14 and 18 shall survive termination or expiry of
this Agreement.
16. COMMUNICATIONS PROGRAM
19
16.1 Scope
HP shall lead the development and execution of a comprehensive communications
program ("COMMUNICATIONS PROGRAM") based on this Agreement and the Parties'
other Agreements of even date. Key elements of the program shall include:
16.1.1 publicly promoting the strategic alliance, with involvement of
the senior management team of both Indigo and HP
16.1.2 subsequent announcements of the rollout of each element of the
Agreements
16.1.3 "vertical" public relations campaign, focused on the future of
the technology as key to the commercial printing transformation
16.1.4 prominent inclusion of Indigo in the "rolling thunder"
communications strategy for HP's commercial printing initiative.
16.1.5 Indigo may refer to itself as "an HP affiliated company" and HP
may refer to itself as "a Indigo affiliated company." Neither Party
shall make any representations which a reasonable person could
interpret and indicating that the Parties have entered into any form of
partnership or that one Party is the agent of the other Party.
16.2 Future communications
Subject to section 16.1.5, all references to HP by Indigo and public
communications of any sort by Indigo concerning HP shall be pre-approved in
writing by HP until such time as the Communications Program has been agreed
between the Parties. After the Communication Program has been so agreed, all
such references and communications shall be made in accordance with the
Communications Program.
17. DIW SERVICE
HP shall work with Indigo as the preferred "digital production color printing
appliance" partner in the rollout of the DIW and shall work with Indigo on
details of the DIW architecture, and early "developer kits" for the DIW.
18 GENERAL
18.1 Confidentiality.
20
18.1.1 Definition of Confidential Information. "CONFIDENTIAL
INFORMATION" means all information disclosed by a Party ("DISCLOSING
PARTY") to the other Party ("RECEIVING PARTY") pursuant to, or in
connection with, this Agreement, including any information disclosed
prior to or in contemplation of this Agreement prior to the Effective
Date, regardless of the form or manner of disclosure. "CONFIDENTIAL
INFORMATION" shall not include information: (a) of which the Receiving
Party was rightfully in possession prior to disclosure, as evidenced by
appropriate documentation; (b) that was independently developed by
employees or agents of the Receiving Party who have not received any
Confidential Information provided by the Disclosing Party; (c) that the
Receiving Party rightfully receives from a third party not owing a duty
of confidentiality to the Disclosing Party; (d) that is or becomes
publicly available without fault of the Receiving Party; (e) that is
published incident to patent application prosecution; or (f) that the
Parties agree in writing will not be treated as Confidential
Information. Notwithstanding sub-section (e), neither Party shall
include Confidential Information of the other Party in any patent
application without the prior written consent of the other Party, such
consent not to be unreasonably withheld.
18.1.2 Identification as Confidential. Information of the Disclosing
Party shall be deemed Confidential Information if (i) disclosed in
writing, the information is marked by an appropriate legend, such as
"HP Confidential" or "Indigo Confidential," or (ii) disclosed orally or
visually, the information is designated (orally or in writing)
contemporaneously or promptly thereafter, as "HP Confidential" or
"Indigo Confidential," or (iii) the disclosure in any form (visually,
orally, or in writing), by its very nature would reasonably be
understood to be confidential.
21
18.1.3 Confidentiality Obligations. The Receiving Party shall hold the
Confidential Information of the Disclosing Party in confidence, using
such measures as the Receiving Party uses to protect the
confidentiality of its own confidential information of like importance,
but in no event using less than reasonable care. The Receiving Party
shall not make any disclosure of such Confidential Information other
than to its employees and consultants on a need-to-know basis. The
Receiving Party shall inform each such employee and consultant of the
Receiving Party's confidentiality obligations under this Agreement and
will require each such person to sign an appropriate nondisclosure
agreement. The Receiving Party shall be liable for any breach of this
section 18.1.3 by any of its employees or consultants acting within the
scope of their authority. The Receiving Party shall use the Disclosing
Party's Confidential Information solely to perform the activities
contemplated by this Agreement and for no other purpose. The Receiving
Party shall return the Disclosing Party's tangible Confidential
Information to the Disclosing Party promptly upon the Disclosing
Party's request or termination of this Agreement, whichever occurs
first, unless the Receiving Party has a continuing right under this
Agreement to use such Confidential Information. Nothing herein shall
prevent assignment of the Parties' employees or consultants to other
projects.
18.1.4 Exceptions. Notwithstanding anything to the contrary in section
18.1.3, disclosure of Confidential Information shall be permitted to
the extent required by order of a court or governmental authority,
provided that the Disclosing Party has been given timely notice of such
requirement and that the Receiving Party must cooperate with the
Disclosing Party to limit the scope and effect of such order.
18.1.5 Residual Information. Access to Confidential Information
hereunder shall not preclude an individual who has seen or been exposed
to such Confidential Information for the purposes of this Agreement
from working on future projects for the Receiving Party which are not
prohibited hereunder and which relate to similar subject matters,
provided that such individual does not make reference to any document
or other tangible media containing the Confidential Information.
Furthermore, nothing contained herein shall be construed as imposing
any restriction on the Receiving Party's disclosure or use of any
general learning, skills, or know-how developed by the Receiving
Party's personnel under this Agreement, if such disclosure and use
would be regarded by a person of ordinary skill in the relevant area as
not constituting a disclosure or use of the Confidential Information.
22
18.1.6 Injunctive Relief. Each Party acknowledges and agrees that the
other Party would suffer irreparable harm for which monetary damages
would be an inadequate remedy if there were a breach of obligations
under this section 18.1.6. Each Party further acknowledges and agrees
that equitable relief, including injunctive relief, would be
appropriate to protect the other Party's rights and interests if such a
breach were to arise, were threatened, or were asserted.
18.2 Publicity. So long as this Agreement is in effect, no Party or any of its
Affiliates shall issue or cause the publication of any press release or other
announcement with respect to the terms or implementation of this Agreement
without the prior consultation and approval of the other Party, except as my be
required by law; provided that such approval shall not be unreasonably withheld.
Any such publicity made in accordance with the terms of a joint communications
program shall not require approval under this section 18.2.
18.3 Assignment. Neither Party may assign any of its rights and/or obligations
hereunder (except to an Affiliate), whether by operation of law or otherwise,
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld. Any assignment made in contravention of this section 18.3
shall be void. This Agreement shall inure to the benefit of and be binding upon
the Parties and their respective administrators, permitted successors and
permitted assigns.
18.4 Notices. Any notice, request, consent, approval, or communication
(collectively a "NOTICE") under this Agreement shall be effective only if it is
in writing and (i) personally delivered, (ii) sent by certified or registered
mail, return receipt requested, postage prepaid (iii) sent by a nationally
recognized overnight delivery service, with delivery confirmed, or (iv) sent by
facsimile, with receipt confirmed, addressed as follows:
(a) if to HP, to
HP
Address:
00000 Xxxxxxx Xxxxxxxxx XX 000
Xxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Address:
0000 Xxxxxxx Xxxxxx, MS20-BT
23
Xxxx Xxxx, XX 00000
Attention: Corporate Development Portfolio Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to
Skadden, Arps, Slate, Xxxxxxx & Xxxx
Address:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) if to Indigo, to
Indigo
Address:
Attention:
Telephone:
Facsimile:
with a copy to:
Xxxxxxxxxx & Xxxxx LLP
Address:
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
24
or such other persons or addresses as shall be furnished by Notice by a Party to
the other Party. A Notice shall be deemed to have been given as of the date when
(i) personally delivered, (ii) ten (10) days after properly addressed and mailed
as aforesaid, (iii) the next day when delivered during business hours to said
overnight delivery service properly addressed, or (iv) when receipt of the
facsimile is confirmed, as the case may be, unless the sending Party has actual
knowledge that a Notice was not received by the intended recipient. All Notices
shall specifically state: (i) the provision or provisions, if any, of this
Agreement with respect to which such Notice is given; and (ii) the relevant time
period, if any, in which the Party given such Notice must respond.
18.5 Amendments. The terms and provisions of this Agreement may not be modified
or amended without the written consent of each Party.
18.6 Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is held by a court of competent
jurisdiction or regulatory authority to be illegal or invalid for any reason
whatsoever, the Parties agree to negotiate in good faith a next best alternative
term or provision, as the case may be, that retains the parties' original intent
to the greatest extent possible. If the Parties are unable to negotiate such
term or provision, the original term or provision shall be enforced to the
maximum extent permitted by law, and, in any event, such illegality or
invalidity shall not affect the validity of the remainder of the Agreement, or
the validity of such tem or provision in other jurisdictions.
18.7 Non-Waiver. No provision of this Agreement shall be deemed to have been
waived except if the giving of such waiver is contained in a written Notice
given to the Party claiming such waiver and no such waiver shall be deemed to be
a waiver of any other or further obligation or liability of the Party in whose
favor the waiver was given.
18.8 No Partnership. Nothing contained in this Agreement shall be deemed or
construed to make the Parties partners or joint venturers with each other.
18.9 Third-Party Beneficiaries. This Agreement is intended to benefit the
Parties and their respective permitted successors and permitted assigns and
shall not confer upon any other Person any rights or remedies.
25
18.10 Entirety of Agreement; Relation to Related Agreements. In connection with
this Agreement, it is contemplated that the Jericho Co-development Agreement and
the Stock Purchase Agreement (collectively "RELATED AGREEMENTS") shall be
executed. This Agreement, together with the Related Agreements, constitutes the
entire agreement between the Parties with respect to the subject matter hereof,
and supersedes all prior drafts of the Agreement and all other agreements
between the Parties, express or implied, written or oral, including specifically
but not limited to the Strategic Affiliation Agreement referred to in the
recitals and all Confidentiality Agreements between the Parties prior to the
Effective Date.
18.11 Construction. As used in this Agreement, all terms used in the singular
will be deemed to include the plural, and vice versa, as the context may
require. The words "hereof," "herein," and "hereunder" refer to this Agreement
as a whole, including the attached exhibits, as the same may from time to time
be amended or supplemented, and not to any subdivision in this Agreement. When
used in this Agreement, "including" means "including, without limitation."
Unless otherwise expressly stated, when a Party's approval or consent is
required under this Agreement, such Party may grant or withhold its approval or
consent in its discretion. References to "section" or "Exhibit" shall be to the
applicable section or exhibit of this Agreement. This Agreement has been
negotiated by the Parties and reviewed by their respective counsel and shall be
fairly interpreted in accordance with its terms and without any strict
construction in favor of or against either Party.
18.12 Headings. The headings of the sections of this Agreement are inserted for
convenience only and shall not be deemed to constitute a part hereof.
18.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original.
18.14 Indemnity.
18.14.1 Subject to section 18.14.2, each Party ("INDEMNIFYING PARTY")
shall defend, indemnify, and hold harmless the other Party and its
officers, directors, agents, and representatives (collectively
"INDEMNIFIED PARTIES") from and against, and will solely and
exclusively bear and pay, any and all claims, suits, losses, penalties,
damages and all liabilities ("CLAIMS") and the associated costs and
expenses (including attorneys' fees, experts' fees, and costs of
investigation), caused in whole or in part by, (i) its breach of any
representation, warranty, covenant, term, or provision of this
Agreement; (ii) any negligent, grossly negligent, or intentional acts,
errors, or omissions by it or its employees, officers, agents, or
representatives in the performance of this Agreement; or (iii) a
product liability claim asserted against HP by any Person in respect of
any OEM Product under any theory of liability.
26
18.14.2 The Indemnified Party shall promptly notify the Indemnifying
Party of any Claim. No failure of an Indemnified Party to so notify the
Indemnifying Party shall relieve the Indemnifying Party from the
obligation to indemnify the Indemnified Party unless and to the extent
the Indemnifying Party is actually prejudiced by such failure. The
Indemnifying Party shall have control of the defense, litigation, and,
subject to the conditions set forth below, settlement of any Claims.
The Indemnified Party shall have the right, but not the obligation, to
select counsel of their choice, at their expense, to participate in the
defense of such third party claims provided however that the
Indemnifying Party shall not accept a settlement of any such third
party claim without the prior written consent of the Indemnified Party,
which consent shall not be unreasonably withheld.
27
IN WITNESS WHEREOF, the Parties have signed this Agreement, through their duly
authorized representatives, on the date first set forth hereinabove.
INDIGO N.V. HEWLETT-PACKARD COMPANY
Signed by: /s/ Xxxxxxx Xxxxx Signed by:
----------------------- -------------------------------
Name: Xxxxxxx Xxxxx Name:
----------------------------- ------------------------------------
Title: Chairman and CEO Title:
---------------------------- -----------------------------------
28
IN WITNESS WHEREOF, the Parties have signed this Agreement, through their duly
authorized representatives, on the date first set forth hereinabove.
INDIGO N.V. HEWLETT-PACKARD COMPANY
Signed by: Signed by: /s/ Xxxx Xxxxxxx
----------------------- -------------------------------
Name: Name: Xxxx Xxxxxxx
----------------------------- ------------------------------------
Title: Title: VP, GM
---------------------------- -----------------------------------
LaserJet Business Printing
29
=
EXHIBIT "A"
REPAIR PARTS POLICY
30
Hewlett-Packard Company (HP) and Indigo N.V. have previously executed an OEM
Agreement dated September 13, 2000. This document is an Addendum to that
Agreement.
1.1 Under the OEM Agreement, HP had committed to purchase thirty-five (35) 6600
units (Series 1 engine, Turbostream-based) during Q4/2001. The price per
products for the Series 1 engine is: $140,000 for the base units and $10,000 for
each additional color.
1.2 In place of the above, which would have resulted a total price of about US$
5.25 million in Q4/2001, HP will now purchase from Indigo the following products
in Q4/2001, at the following prices:
Eleven (11) UltraStream presses $395,000 per unit
One (1) MultiStream press $225,000 per unit
One (1) WebStream 50 press $240,000 per unit
Consumable products $220,000 in total
1.3 HP understands that all these products will be identical to the standard
Indigo product offering of the same product and will not have unique
consumables.
Except as otherwise specifically provided in this Addendum or in other written
agreements between the parties, all terms and conditions of the OEM Agreement
shall remain in full force and effect.
It is so agreed.
Indigo N.V. Hewlett-Packard Company
Signed by: /s/ Rafi Maor Signed by: /s/ Xxx Xxxxx
------------------------- ----------------------------
Name: Rafi Maor Name: Xxx Xxxxx
------------------------- ----------------------------
Title: President and CEO Title: Controller, Digital
Publishing Solutions
------------------------- ----------------------------
Date: December 17, 2001 Date: November 26, 2001
------------------------- ----------------------------
