Exhibit 10.40
LICENSE SYSTEM ADDENDUM NO. 1
to
MASTER TECHNOLOGY LICENSE AGREEMENT
between
OKI DATA CORPORATION
and
PEERLESS SYSTEMS IMAGING PRODUCTS, INC.
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.
OKI/PSIP LSA#1
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LICENSED SYSTEM ADDENDUM NO. 1
EFFECTIVE AS OF _________________
TO THE
MASTER TECHNOLOGY LICENSE AGREEMENT
BETWEEN
OKI DATA CORPORATION
AND
PEERLESS SYSTEMS IMAGING PRODUCTS, INC.
NAME OF AUTHORIZED OKI DEVICES:
Roman: Okipagel4i
Kanji: MICROLINE660PS
This Addendum sets forth the Authorized OKI Device and additional and different
terms and conditions particular to the Authorized OKI Devices described below
and shall be incorporated by reference into the Master Technology License
Agreement effective as of October 15, 1999, (the "MTLA") between Oki Data
Corporation ("OKI") and Peerless Systems Imaging Products, Inc. ("PSIP"). Such
different or additional terms are applicable only to the Authorized OKI Devices
described below and in no way alter the terms and conditions applicable to other
Authorized OKI Devices incorporated into the MTLA by addition of an Addendum.
All the terms used in this Addendum shall retain the same meaning as defined in
the MTLA and such definitions are incorporated herein by reference.
A. Authorized OKI Device:
(1) Software:
Revised Object (as defined in the MTLA) which is derived from the Adobe Camelot
Reference Port licensed from Adobe.
The Software also includes the Adobe Type Connection Technology which allows
Adobe PostScript interpreters to synthesize replacement fonts from substitution
fonts for a predetermined set of fonts that are otherwise not resident in the
Authorized OKI Device.
(2) Font Programs:
For a further description of the Authorized OKI Device features, see Schedule 1,
Authorized OKI Device Functional Specification Summary, attached hereto.
B. Media for the Software as Distributed by OKI:
The Software will be distributed on OTP ROM or mask ROM
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June 23, 2000 Page 1 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
to Master Technology License Agreement
between OKI and PSIP
OKI/PSIP LSA#1
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C. QA Certification Schedule
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Milestone Description Schedule
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(1) OKI notifies PSIP of expected date for submission of the Final Release to PSIP *
QA.
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(2) OKI provides to PSIP hard copy output, check list, test log and analysis *
of error(s) from the Adobe Certification Test Suite
demonstrating that the Final Release has passed, the PPD file and two (2)
production units (each consisting of a production level controller and
production level engine) for Final Release testing.
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(3) OKI provides to PSIP the Final Release (one set of Revised Object ROMs, *
including the Font Programs listed in Section G ("Roman Coded Font Programs")
and Section H ("Font Programs for Japanese Typefaces"), for each of the two (2)
production units of Okipage 14i and MICROLINE660PS, the final 2017 Addendum
specified in Section J ("Documentation") below and the PPD File.
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(4) PSIP reviews OKI's hard copy output for approval, completes Final Release *
testing and reports all found problems to OKI, and provides to OKI.
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(5) PSIP determines acceptance of the Revised Object ("Software") as specified in *
the MTLA and obtain certification from Adobe for all of the Authorized OKI
Devices described in this Licensed System Addendum No. 1.
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Adobe Certification. Following completion of testing and delivery to Adobe of
the test results, Adobe shall have * (*) business days following to determine
from its review of such test results whether the Authorized OKI Device (a)
conforms to the applicable Adobe Certification Test Suite and any other tests or
procedures specified in the test plan, and (b) produces output meeting Adobe's
quality standards, as reasonably determined by Adobe from time to time.
* Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.
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June 23, 2000 Page 2 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
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between OKI and PSIP
OKI/PSIP LSA#1
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Thereupon Adobe shall notify PSIP in writing either that Adobe certifies the
Authorized OKI Device or has elected to submit the Authorized OKI Device to
further testing and certification before it can be approved for First Commercial
Shipment of a Licensed System.
In the event Adobe has to run a fall Quality Assurance testing cycle, OKI shall
supply Adobe with all of the necessary Loaned Equipment, maintenance services
and consumables required by Adobe to conduct such certification testing,
including the applicable Revised Object and any updated versions thereof in a
timely manner as the updated versions become available.
Upon Adobe's determining that the Authorized OKI Device does not conform to the
Adobe Certification Test Suite and any other tests or procedures specified in
the test plan, or that the test output fails to meet Adobe's quality standards,
Adobe shall provide to OKI a report identifying the failure. OKI shall use
reasonable efforts to promptly correct any nonconformity and resubmit the
Authorized OKI Device for re-testing. This process shall continue until Adobe
certifies the Authorized OKI Device. The test procedures described above are
free of charge to OKI. In the event that OKI requested that the Authorized OKI
Device be submitted to Adobe prior to PSIP's assessment of successful
certification, OKI shall be subject to all Adobe fees in addition to the charges
for such services agreed upon between OKI and PSIP.
OKI Notification. PSIP shall notify OKI when the Adobe Certification Test Suite
is successfully completed.
D. Definition of Development Schedule Terms:
Bug Score
(1) Final Release: For submission to PSIP QA for final certification testing in
accordance with Section 2.2.3 (d) PSIP Testing and Adobe Certification test
of the MTLA. OKI shall ensure that the Final Release version of the Revised
Object passes all tests in the Adobe Certification Test Suite prior to
submission to PSIP. The Final Release shall have a Bug Score (as defined
below) of *.
(2) Bug Score: The Bug Score of a given release at any given time is
calculated according to the following formula:
n
---
---(Bi)2
i = 1
Where B i = the severity of the ith open bug and n = the total number of open
bugs.
(3) Severity: Severities of product bugs are defined as follows:
**** less than or equal to
* Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.
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June 23, 2000 Page 3 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
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OKI/PSIP LSA#1
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Severity 4: A bug that materially impairs functionality and for which there
is no workaround. Most severe; must be fixed.
Severity 3: A bug that materially impairs functionality and for which there
is no easy or convenient workaround. Fairly severe; must be
fixed.
Severity 2: A bug that has relatively low End User impact and for which a
convenient workaround exists. Should be fixed in a subsequent
release, if any.
Severity 1: A minor bug or cosmetic problem. No need to fix.
Severity 0: A specification change or request for an enhancement.
E. Loaned Equipment:
OKI will supply PSIP with two (2) production units of the Authorized OKI Device
as specified in Section C above (QA Certification Schedule) including Revised
Object for Final Release testing. OKI will ensure that such Loaned Equipment is
maintained in functional working order at all times.
F. Applicable Royalties :
Royalty for Authorized OKI Device, Font Programs described herein shall apply to
all Authorized OKI Devices, Font Programs sold, leased or otherwise disposed of
by OKI or Affiliates to distributors, OEM Remarketer Customers or End Users.
Subject to Article 12.1 (Reporting) of the MTLA and payment terms as defined
herein, hereto, within * after the end of calendar quarter, OKI shall report
total quantity of the Authorized OKI Devices distributed by or on behalf of OKI
or its Affiliates. OKI shall pay Per Unit License Fee for each Authorized OKI
Device pursuant to the payment provisions set out in Schedule 2 to Addendum no.
1.
OKI shall be entitled to deduct from earned royalties which become due and
payable pursuant to this paragraph such amounts as OKI is required to withhold
therefrom pursuant to the applicable tax provisions of U.S.A. and Japan for the
payment for PSIP account, of applicable U.S. income tax therefor, provided,
however, that OKI will furnish PSIP with appropriate documentation evidencing
the payment of such taxes.
(1) Basis for Payments Hereunder.
(a) Currency
All royalty due to PSIP shall be paid in U.S. dollars.
(b) Exchange Rate Calculation for Royalties.
The exchange rate used to convert these Japanese List Prices into U.S. dollars
for the purpose of payment by OKI of royalties due hereunder shall be the
average of the mean telegraphic transfer rates quoted by the head office of
Tokyo Mitsubishi Bank at the close of banking on each of the first and last bank
business days of the relevant quarterly accounting period.
(c) List Price
* Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.
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June 23, 2000 Page 4 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
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between OKI and PSIP
OKI/PSIP LSA#1
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All List Prices, as defined below, shall be established by OKI or Affiliates in
good faith, and shall be exclusive of amounts received for taxes, interest,
non-warranty maintenance and installation charges, insurance, shipping and
handling costs. The foregoing shall not be construed as fixing any sales price.
(i) List Price for Kanji Authorized OKI Device. The List Price for Kanji
Authorized OKI Device shall mean OKI's published list price in Japanese yen for
quantity one (1) of each model of Authorized OKI Device with Minimum
Configuration distributed to End Users in Japan.
(ii) List Price for Roman Authorized OKI Device The List Price for Roman
Authorized OKI Device shall mean OKI or Affiliates published list price in U.S.
dollars for quantity one (1) of each model of Authorized OKI Device with Minimum
Configuration distributed to End Users in U.S. The List Price for Roman
Authorized OKI Device shall apply for the purpose of royalty calculations for
distribution of all Authorized OKI Devices worldwide other than Japan.
(iii) In the event that the Roman Authorized OKI Device is not distributed in
the United States, then the published List Price of the Roman Authorized OKI
Device in a country other than the U.S. maybe used upon mutual agreement between
the parties.
(2) Minimum Configuration.
Minimum Configuration refers to a Authorized OKI Device that contains all of the
essential components required to supply the End User with the minimum level of
functionality specified for the applicable Authorized OKI Device.
For the purpose of royalty calculations to be made hereunder, the Minimum
Configuration of the Authorized OKI Device is defined as follows:
(a) Okipage 14i
* ("Roman Coded Font Programs") below.
(b) MICROLINE660PS
* and the Font Programs listed in Section H ("Font Programs for Japanese
Typefaces")Roman Coded Font Programs") below.
(3) Royalties
For each Authorized OKI Device described in this Addendum No. 2 which is sold,
leased or otherwise disposed of or used by OKI or its Affiliates, the pricing
table as defined in Schedule 2 shall apply.
G. Roman Coded Font Programs:
Extend Roman Font Program Set
PSIP will provide the graphic characters specified in ISO 8859-1: 1987, Latin
alphabet No. 1 and ISO 8859-2: 1987, Latin alphabet No. 2, and symbol characters
where appropriate, for the Extended Roman Font Program Set specified in Exhibit
B to Attachment #1 to MTLA ("Extended Roman Font Program Set").
* Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.
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June 23, 2000 Page 5 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
to Master Technology License Agreement
between OKI and PSIP
OKI/PSIP LSA#1
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Identifying
-----------
Trademark Typeface Trademark Owner
--------- -------- ---------------
1. Courier (Public Domain)
2. Courier Oblique (Public Domain)
3. Courier Bold (Public Domain)
4. Courier Bold Oblique (Public Domain)
5. Helvetica Linotype-Hell AG and/or its subsidiaries
6. Helvetica Oblique Linotype-Hell AG and/or its subsidiaries
7. Helvetica Bold Linotype-Hell AG and/or its subsidiaries
8. Helvetica Bold Oblique Linotype-Hell AG and/or its subsidiaries
9. Helvetica Narrow Linotype-Hell AG and/or its subsidiaries
10. Helvetica Narrow Oblique Linotype-Hell AG and/or its subsidiaries
11. Helvetica Narrow Bold Linotype-Hell AG and/or its subsidiaries
12. Helvetica Narrow Bold Oblique Linotype-Hell AG and/or its subsidiaries
13. Symbol (Public Domain)
14. Times Roman Linotype-Hell AG and/or its subsidiaries
15. Times Italic Linotype-Hell AG and/or its subsidiaries
16. Times Bold Linotype-Hell AG and/or its subsidiaries
17. Times Bold Italic Linotype-Hell AG and/or its subsidiaries
18. ITC AvantGarde Gothic Book International Typeface Corporation
19. ITC AvantGarde Gothic Book Oblique International Typeface Corporation
20. ITC AvantGarde Gothic Demi International Typeface Corporation
21. ITC AvantGarde Gothic Demi Oblique International Typeface Corporation
22. ITC Bookman Light International Typeface Corporation
23. ITC Bookman Light Italic International Typeface Corporation
24. ITC Bookman Demi International Typeface Corporation
25. ITC Bookman Demi Italic International Typeface Corporation
26. New Century Schoolbook Roman Linotype-Hell AG and/or its subsidiaries
27. New Century Schoolbook Italic Linotype-Hell AG and/or its subsidiaries
28. New Century Schoolbook Bold Linotype-Hell AG and/or its subsidiaries
29. New Century Schoolbook Bold Italic Linotype-Hell AG and/or its subsidiaries
30. Palatino Roman Linotype-Hell AG and/or its subsidiaries
31. Palatino Italic Linotype-Hell AG and/or its subsidiaries
32. Palatino Bold Linotype-Hell AG and/or its subsidiaries
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June 23, 2000 Page 6 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
to Master Technology License Agreement
between OKI and PSIP
OKI/PSIP LSA#1
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Identifying
-----------
Trademark Typeface Trademark Owner
--------- -------- ---------------
33. Palatino Bold Italic Linotype-Hell AG and/or its subsidiaries
34. ITC ZapfChancery Medium Italic International Typeface Corporation
35. ITC ZapfDingbats International Typeface Corporation
H. Font Programs for Japanese Typefaces:
Heisei Japanese Typefaces: PSIP will provide the Adobe Standard Japanese
Character Set which includes JIS, Shift-JIS, and EUC encodings of the JIS X
0208-1983 and JIS X 0208-1990 Level 1 and Level 2 characters plus other
characters and encodings as defined in Adobe's Technical Note #5078
(Adobe-Japan1-2 Character Collection for CID-Keyed Fonts), dated December 4,
1994, for the Font Programs for Japanese Typefaces in CID-keyed font format
listed below. Generic characters listed therein are not typeface specific.
Identifying
- -----------
Trademark Character Collection Trademark Owner
- --------- -------------------- ---------------
HeiseiMin-W3 Adobe-Japan 1-2 Japan Standards Association
Font Design Center
HeiseiKakuGo-W5 Adobe-Japan 1-2 Japan Standards Association
Font Design Center
I. Training:
None.
J. Documentation:
PostScript Language Addendum prepared by OKI, describing the features specific
to the Authorized OKI Device and the means of accessing those features via the
PostScript language.
K. Designated Persons:
(1) Technically qualified OKI person to respond to information requested by
PSIP:
Mr. Osamu Asada
General Manager, 9/th/. Engineering Development
Oki Dara Corporation
3-1 Futaba-cho, Takasaki-shi,
Gunma 370-8585, Japan
Tel: +81-27-328-6359
Fax: +81-27-328-6393
(2) Technically qualified PSIP person to respond to information requested by
OKI:
Mr. Ivan Tang
-------------------------------------
Peerless Systems Imaging Products Inc.
20415 72nd Ave. S., Suite 400
Kent, WA 98032 USA
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June 23, 2000 Page 7 of 12 OKI ___: PSIP ___
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OKI/PSIP LSA#1
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Tel: +1-253-395-8890 ex. 42
Fax: +1-253-395-8896
L. ADDITIONAL LICENSE GRANTED.
Object License. Subject to the provisions of the MTLA and this LSA #1 as well as
the payment of all applicable License Fees for the term of such license, PSIP
hereby grants to OKI the license provided for in Section 2.2 of the MTLA:
M. TERM AND TERMINATION. The term of this LSA #1 shall be coextensive with the
term of the Object Code License granted under the MTLA.
N. INDEMNIFICATION. OKI shall have the right, subject to the MTLA and this
LSA#1, to control its development, manufacturing and marketing efforts.
Accordingly, OKI shall, except to the extent that PSIP has indemnified OKI
pursuant to the MTLA, defend itself against and from any and all losses or
damages (including without limitation attorneys' fees and costs and all third
party claims or demands of any type whatsoever) arising out of, incurred in
connection with or relating to the OKI's development, manufacturing and
marketing of the Authorized OKI Device and indemnify and hold harmless PSIP
pursuant to the MTLA.
O. PROPRIETARY RIGHTS AND CONFIDENTIALITY
a) Rights not expressly granted to the OKI hereunder are reserved by the PSIP.
The right to manufacture and distribute such modified code (i.e., a Derivative
Work) other than for the Authorized OKI Device requires a separate Licensed
System Addendum.
b) Without limiting any of OKI's obligations of confidentiality imposed pursuant
to the MTLA, OKI shall (i) specifically require any employee and contractor of
OKI to execute OKI's standard confidentiality and non-disclosure agreement(s)
content of such agreement to be subject to PSIP's approval, which shall not be
unreasonably withheld; (ii) notify PSIP promptly and in writing of any
circumstances of which OKI has knowledge regarding any possible use of or access
to any Confidential Information or any part thereof by any unauthorized person
or entity; and (iii) take and allow PSIP to take, at OKI's expense but under
PSIP's control, any legal or other action necessary to prevent or stop the
access to or use of the Confidential Information by an person or entity that has
gained access to the Confidential Information due to the fault or negligence of
License or any breach by OKI of the MTLA or this LSA#1.
d) Any breach by OKI of any of its obligations under this Section P shall be
considered to be Default of the provisions of the MTLA.
P. AUDIT RIGHTS. PSIP shall have the right, not more frequently than once per
year upon one (1) business day's prior notice, to have one (1) of its employees
walk through and inspect any Authorized OKI Facility to determine whether OKI
employs adequate security procedures as required in MTLA. Such walking through
and inspection shall be (i) during OKI's regular business hours, (ii) arranged
so that, to the extent possible, OKI's regular business activities are minimally
disrupted and (iii) under the terms of an appropriate confidentiality agreement
executed by such an independent auditor.
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June 23, 2000 Page 8 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
to Master Technology License Agreement
between OKI and PSIP
OKI/PSIP LSA#1
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IN WITNESS WHEREOF, OKI and PSIP have caused this Addendum No. 2 to be executed
by their duly authorized representatives.
PSIP: OKI:
PEERLESS SYSTEMS IMAGING PRODUCTS, INC. OKI DATA CORPORATION
By: /s/ Gordon Hanson By: /s/ Jiro Tanuma
----------------------------- ---------------------
Printed Name: Gordon Hanson Printed Name: Jiro Tanuma
Title: Vice President & General Manager Title: Corporate Director,
Engineering
Date: Date:
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June 23, 2000 Page 9 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
to Master Technology License Agreement
between OKI and PSIP
OKI/PSIP LSA#1
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Schedule la to Addendum No. 1
Authorized OKI Device Functional Specification Summary
for
Roman : Okipage14I
Kanji: MICROLINE660PS
1. Introduction
This is the functional specification for the Okipagel4i / MICROLINE660PS
printers. This consists of a controller driving an Oki marking engine and
Software to implement Adobe's PostScript 2 Software revised by OKI for
Authorized OKI Device.
2. Authorized OKI Device Summary
Licensed System Summary
Controller Design *
Controller CPU *
ROM *
RAM *
Communication *
Marking Engine *
Resolution *
Marking engine speed *
Paper Size *
Paper source *
multi-feeder
Emulations *
Peripherals *
Typeface *
* Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.
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June 23, 2000 Page 10 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
to Master Technology License Agreement
between OKI and PSIP
OKI/PSIP LSA#1
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Schedule 2 to Addendum No. 1
Pricing Table
for
Roman: Okipage14i
Kanji: MICROLINE660PS
Basic Pricing Table
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Device Type Kanji Morisawa Kanji Heisei Roman Mono Roman Color Kanji Color Printers
Fonts (DTP) Fonts (Business) Printers Printers
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* List Price (LP) LP X *% $* LP X *% LP X *%
X *%
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* $*/Morisawa Font $*/Heisei Font N/A N/A $*/Morisawa Font.
*
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* * * * * *
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Pricing Table for Authorized OKI devices under this Addendum no. 1.
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Authorized OKI device Device Type # of Morisawa fonts or Heisei fonts
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Okipage14i Roman Mono Printer N/A
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MICROLINE660PS Kanji Heisei Font (Business) Heisei fonts
Printer
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* Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.
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June 23, 2000 Page 11 of 12 OKI ___: PSIP ___
Licensed System Addendum no. 1
to Master Technology License Agreement
between OKI and PSIP