AGREEMENT
THIS AGREEMENT entered into this 31st day of May 1997 by and between
Scangraphics, Inc. of 000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxxx 00000 (herein
after called "Scangraphics") and Printfold Company, Inc. of 000 Xxxxx Xxxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (herein after called "Printfold")
WITNESSETH:
WHEREAS Scangraphics has agreed with Printfold to manufacture scanners at
Printfold premises, utilizing Scangraphics equipment, inventory, processes and
people, with support from Printfold management: and
WHEREAS during the course of such discussions, Scangraphics has agreed with
Printfold to use certain machinery, tools, jigs and equipment, as more fully set
forth in Exhibit "A" attached hereto and made part hereof ("Equipment") and
certain information contained in documents listed in Exhibit "B" attached hereto
and made part hereof ("Documents"); and
WHEREAS during the course of such discussions, Scangraphics has agreed to supply
inventory including, but not limited to finished goods, work in progress and raw
materials for the purpose of producing scanners for Scangraphics. The initial
inventory shall be set forth as Exhibit "C" attached hereto and made a part
hereof. The inventory shall be increased and decreased from time to time with
all documentation of items received and items shipped in writing with copies to
each of the parties; and
WHEREAS the use of Equipment, Inventory and Documents is solely at the
discretion of Scangraphics.
NOW, THEREFORE in consideration of the foregoing premises and other good and
valuable considerations the parties hereto agree as follows:
1. The term of this Agreement is until May 31, 1998 and may be
terminated PRIOR TO SUCH DATE by either party upon 90 days written
notice ["TERM"].
2. The Equipment, Inventory and Documents shall at all times remain
sole and exclusive property of Scangraphics. Printfold shall have
no rights or property interest in the Equipment, Inventory and/or
Documents, except for the right to use them in the operation of
its business at the address set forth above for the period of this
Agreement.
3. The Equipment and Inventory shall remain personal property even if
installed in or attached to real property.
4. Printfold shall:
a.) Keep the Equipment and Inventory separate from Printfold
assets and except for claims, pledges, liens and
encumbrances created by Scangraphics, keep the Equipment
and Inventory at all times free and clear from all claims,
pledges, liens, encumbrance and process and will give
Scangraphics immediate notice of any attachment or other
judicial process attempting to affect any article of
Equipment and/or Inventory;
b.) Not Pledge, lend, create a security interest in, sublet or
part with possession of the Equipment, Inventory or
Documents or any part thereof or attempt in any other
manner to dispose of the Equipment, Inventory or
Documents, except finished goods inventory shall be
shipped in accordance with instruction of Scangraphics;
c.) To the extent utilized by Printfold personnel, cause the
equipment to be operated in accordance with MANUFACTURERS'
instructions, by competent and qualified personnel, who
will take all reasonable and necessary safety precautions
in the operation of the equipment, and
d.) Upon reasonable notice, permit Scangraphics agents to at
any time enter upon Printfold's premises for the purposes
of inspecting the items listed in Xxxxxxxx "X", "X" and
"C" hereof.
5. At the end of the term Printfold shall make the Equipment,
Inventory and Documents available to Scangraphics or its agents
for retrieval and return. Such retrieval and return shall be at
Scangraphics expense.
6. Except for the gross negligence of Printfold, Printfold shall not
be responsible of any damage to the Equipment while in its
possession.
7. As used herein, "Confidential Information" shall mean all
information contained in the Documents. Printfold acknowledges and
agrees that Confidential Information is proprietary to, and a
valuable trade secret of Scangraphics and any disclosure or
unauthorized use thereof will cause irrevocable harm and loss to
Scangraphics.
8. In consideration of the disclosure to Printfold of Confidential
Information, Printfold agrees to treat Confidential Information in
confidence and to undertake the following additional obligations
with respect thereto:
a. Use the Confidential Information solely within
its business;
b. Will not copy in whole or in part or disclose
Confidential Information outside of Printfold;
c. Limit the dissemination of Confidential
Information to only those Printfold Employees who
have a need to know and have an agreement with
said employees to ensure compliance with the
terms of this agreement; and
d. To return the Confidential Information including
all copies and records thereof including all
Documents to Scangraphics upon termination of
this Agreement.
9. Upon termination of this Agreement Printfold shall discontinue the
use of any Confidential Information which is contained in the
Documents and regardless of the termination of this Agreement, the
obligations and restrictions of Paragraph 9 and this, Paragraph 10
of this Agreement, shall survive the expiration, termination or
cancellation of this Agreement and shall continue to bind
Printfold and its successors and assigned.
10. Scangraphics shall insure the Equipment and Inventory against fire
and theft covering Printfold and Scangraphics as their interests
may appear. Scangraphics shall furnish to Printfold written
evidence of such insurance within thirty (30) days from the date
hereof. If Scangraphics fails to obtain and pay for such
insurance, Printfold may do so and Scangraphics shall pay the cost
thereof.
11. Scangraphics agrees to indemnify and hold Printfold and its
respective officers, directors, shareholders, agents and employees
(collectively "Indemnitee") harmless from any and against any
loss, claim, demand, liability, damage, suit, cost or expense,
including reasonable attorney's fees and costs, suffered or
incurred by Indemnitee in connection with the operation, control,
use or misuse of the Equipment by Scangraphics' or Printfolds'
personnel. The provision of this paragraph shall survive the
termination of this Agreement.
12. It is understood that Printfold will assist Scangraphics in the
assembly of scanners, however, all such scanners shall remain the
property of Scangraphics and will be disposed of upon the written
orders of Scangraphics. Scangraphics shall reimburse Printfold for
its management, engineering services, overhead and administration
services, and lease of space in Printfold's facility at the rate
of ten thousand dollars ($10,000.00) per month during the Term of
this Agreement.
13. No rights or licenses, expressed or implied, are hereby granted to
Printfold of any Confidential Information or trade secrets of
Scangraphics as a result of or related to this Agreement.
14. Printfold will not during the Term of this Agreement or for a
period of TWO (2) years after termination of this Agreement, as a
principal, agent, co-venturer, or in any other capacity
manufacture or cause to be manufactured, sell or cause to be sold
scanners in competition with Scangraphics.
15. This Agreement shall be construed in accordance with the laws of
the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.
SCANGRAPHICS, INC.
BY: /S/ XXXXXXXX X. XXXXXXXXX
--------------------------
Title: President and CEO
PRINTFOLD COMPANY, INC.
BY: /S/ XXXXXXX X. XXX
-------------------
Title: President
