Master Purchase Agreement

CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED

SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT

HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.



OEM PURCHASE AGREEMENT



JetFax, Inc., (JetFax) a Delaware corporation having its principal place of business at 1376 Willow Road, Menlo Park, CA 94025, agrees to purchase and Oki America, Inc., a Delaware corporation, through its OKIDATA divis ion, having a principal place of business at 532 Fellowship Road, Mt. Laurel, NJ 08054 (OKIDATA) agrees to sell the Product(s), Spares Accessories and Consumables (all as defined herein), together with their associated documentation, at the prices set for t h in Exhibit A and upon the terms and conditions set forth herein. "Products" as used herein pertains to facsimile engines as defined by the Specifications in Exhibit B. "Spares" as used herein means standard spare parts as listed in OKIDATA's RSPL (Recom m ended Spare Parts List) for the Products, a copy of which is contained in Exhibit C and unique spare parts as set forth in Exhibit D. "Consumables" as used herein means toner cartridges and image drums as set forth in Exhibit A. "Accessories" as used here in means a second paper tray as set forth in Exhibit A.



1. TERM OF AGREEMENT



The term of this Agreement shall be two (2) years commencing on the date on which the last of the parties executes this Agreement (the Effective Date). Orders placed during th is twenty four (24) month ordering period must be scheduled for delivery within thirty (30) months of the Effective Date.





2. CUSTOMER ORDERS



Purchases by JetFax will be by individual written JetFax purchase orders made during the term of this Agreement, which orders will be accepted by OKIDATA so long as they comply with the terms and conditions of this Agreement. Orders will be accepted with OKIDATA's Order Acknowledgement (OA) form. If an OA is not issued within ten (10) business days of receipt of or d er, the order will be deemed accepted. The first purchase order (the Initial Order) is to be issued simultaneously with the execution by JetFax of this Agreement for a quantity of no less than twenty (20) percent of the Specified Quantity of all Product(s ) listed in Exhibit A, (i.e. 1000 units) and must specify delivery within six (6) months of the Effective Date. Each purchase order, subject to the conditions set forth in Section 4 below, shall set forth the desired delivery schedule for each Product.





3. PRICES



A. The prices set forth in Exhibit A are based on purchase by JetFax of a

minimum of [*] of Product in each year of the term of this

Agreement. If, during the term of this Agreement JetFax does not purchase a

minimum of [*] of Product, OKIDATA may retroactively increase

the unit price by [*]. If, during the term of this Agreement,

JetFax purchases between [*] total units of Product, the unit

price will be increased retroactively by [*] per unit.



B. OKIDATA agrees to make Spares and Consumables available to JetFax for a

minimum of five (5) years after last shipment of Product to JetFax. During

the term of this Agreement, Spares will be invoiced at a [*] discount

from OKIDATA's U.S. Dealer list prices. Thereafter, the discount will be as

specified in Exhibit C.



C. OKIDATA will accrue an amount equal to [*] off the net invoice

value of all Product(s) purchased hereunder in an account maintained by

OKIDATA. Such accrued amount shall be applied as a credit towards the

payment of any amounts due from JetFax for the purchase of Spares





4. DELIVERY SCHEDULES



A. Requested delivery dates for Product(s), Accessories and Image Drum Kits

purchased hereunder shall be no sooner than one twenty (120) days after

receipt of a purchase order, FOB JAPAN.**



Requested delivery dates for Spares shall be no less than 90 days from

receipt of order. For non-unique Spares, OKIDATA will make reasonable

efforts to deliver reasonable quantities within in two weeks of order.



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** Image drums purchased FOB Mt. Laurel, N.J., will be 2 weeks from receipt

of purchase order by Okidata.



[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED

SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT

HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.





Requested delivery dates for toner cartridges shall be no less than

fourteen (14) days after receipt of order for product in standard packaging

and sixty (60) days in custom packaging.



Notwithstanding the above order leads, OKIDATA will, on request, make

reasonable efforts to shorten the lead for demand exceeding forecast

quantities. All or the above lead times are contingent on OKIDATA's receipt

of the monthly forecast as set out in paragraph 7, below.





5. RESCHEDULING OF DELIVERIES



A. Rescheduling of deliveries is permitted up to the 46th day prior to

scheduled delivery. Thereafter, no rescheduling will be permitted.





6. CANCELLATION CHARGES



A. Cancellation is permitted up to the 46th day prior to scheduled delivery

date. Thereafter, no cancellation is permitted.





7. CUSTOMER FORECASTS



Once each month JetFax will furnish to OKIDATA a written non-binding

forecast of its requirements for the Product(s) for the ensuing twelve





8. PAYMENT



A. Payment for purchases hereunder will be due net 30 days from date of

receipt by JetFax in the U.S. of the products invoiced. Pending

establishment of open credit terms, and prior to or simultaneous with

issuance of its initial purchase order, JetFax will establish an escrow

account or standby letter of credit acceptable to OKIDATA, in the amount of

[*] to secure the purchase price of the products ordered. For each

scheduled delivery or products the escrow or letter of credit is to be

maintained at a level at least equal to [*] of the value of each delivery.

This funding process is to occur at least 45 days prior to the dates of all

scheduled shipments. This secured ratio [*] of the second and all

subsequent shipments will remain in effect until JetFax has proven that

they are capable of sustaining open credit terms at which time the advance

security requirement and the discount described in paragraph B., below,

will cease. If JetFax does not comply with payment terms as specified

herein, OKIDATA reserves the right to modify the amount of security



B. OKIDATA will give JetFax a discount equal to [*] of the net

invoice amount on the portion of each delivery secured by the escrow or

letter of credit.



[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED

SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT

HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.



C. Prices are exclusive of any sales, use, property, and like taxes. Any such

tax OKIDATA may be required to collect or pay upon the sale or delivery

of the Products, other than taxes based on OKIDATA's income, shall be

promptly reimbursed by JetFax.



D. All prices in this Agreement are in U.S. Dollars.





9. PATENT INDEMNITY



A. OKIDATA agrees to indemnify, defend and hold JetFax harmless from and

against any claim, suit or proceeding to the extent that such claim or

proceeding is based on a claim that Products (for purposes of this Section

9, Product will include Accessories) purchased hereunder infringe any

patent rights, provided that OKIDATA is notified promptly in writing and

given complete authority, information and assistance required for defense

of same, and OKIDATA shall pay all damages and costs as a result thereof.

OKIDATA, however, shall not be responsible for any settlement made by

JetFax without OKIDATA's prior written consent.



B. In the event any Product furnished hereunder is, in OKIDATA's reasonable

opinion, likely to or does become the subject of a claim of infringement,

OKIDATA may, at its option and expense, procure for JetFax the right to

continue using the Product, replace same with a non-infringing Product or

Accessory of similar capability, or modify the Product so it becomes non-

infringing (but has similar capability). In the event none of the foregoing

alternatives is commercially reasonable, and provided that there is a bona

fide claim of infringement, in order to minimize its liabilities hereunder,

OKIDATA may terminate this Agreement and the obligation to sell Product to

JetFax hereunder by written notice to JetFax; provided however, that

notwithstanding such termination, (i) the indemnity provided in paragraph A

hereof shall still apply and remain in full force and effect, and

(ii) OKIDATA shall promptly repurchase from JetFax at full cost, all

units of Product purchased by JetFax under this Agreement and not yet

resold by JetFax and JetFax will promptly return, same per the prior

written instructions of OKIDATA, which shall not be unreasonably withheld.



C. OKIDATA shall have no responsibility or liability for any claim of

infringement (i) arising out of the use of its Products in combination with

non-OKIDATA products, or (ii) if such infringement arises out of Product

manufactured to JetFax's design, or (iii) if such infringement arises as a

result of a modification to the product not made by or for OKIDATA, if, and

only if, such infringement would have been avoided by the use of the

Product without such combination, manufacture to JetFax design or



D. The foregoing states the entire liability of OKIDATA 'with respect to

infringement of any patent by the Products or any parts thereof and,

anything herein to the contrary notwithstanding, OKIDATA's liability to

JetFax hereunder shall in no event exceed the total price plus taxes and

other associated charges paid to OKIDATA by JetFax for all infringing or





allegedly infringing Product purchased pursuant to this Agreement.





10. TERMINATION



This Agreement may be terminated or canceled as follows:





A. By either party at any time pursuant to the provisions of this Section 10,

if the other party violates any provision of this Agreement. The defaulting

party shall have a period of thirty (30) days from the date of receipt of

written notice from the non-defaulting party describing the default within

which to remedy the default. The termination shall become effective at the

end of the thirty (30) day period if the defaulting party has failed to

remedy the default.



B. If either party (i) admits in writing its inability to pay its debts

generally as they become due, or (ii) makes an assignment for the benefit

of its creditors, or (iii) institutes or consents to the filing of a

petition in bankruptcy, whether for reorganization or liquidation, under

federal or similar applicable state laws, or (iv) is adjudged bankrupt or

insolvent by a court having jurisdiction, then in either of such events,

the other party may, by written notice, immediately terminate this



C. JetFax's obligation to pay for all Products received by it hereunder shall

survive termination of this Agreement. In the event that OKIDATA terminates

the Agreement for default, OKIDATA will honor any Purchase orders which it

has accepted, but reserves the right to change payment terms as it deems





11. SHIPPING AND RISK OF LOSS



Prices of Product(s), Accessories and Image Drum Kits are FOB Japan. Prices

of Spares and Consumables are FOB OKIDATA's U.S. facilities. Title and risk

of loss pass to JetFax at the time and place of delivery as soon as OKIDATA

has put the goods in the possession of the carrier. OKIDATA will package

the Products in accordance with accepted standard commercial practices for

normal shipment considering the type of Product involved and the normal

risks' encountered in shipments. JetFax shall designate the method of

shipment on each individual purchase order issued against this Agreement.

OKIDATA shall arrange for shipment by the designated method. All

transportation charges are freight collect.





12. LIMITATION OF LIABILITY



In no event will either party be liable for loss of profits or incidental,

special, or consequential damages arising out of any breach of obligations

under this Agreement.



13. TRAINING



OKIDATA will provide one course for six (6) JetFax employees for a period

appropriate to the particular Product purchased (usually two (2) days). The

course will be given at OKIDATA's Mt. Laurel facility and will be scheduled

at a mutually agreeable time. OKIDATA will provide course material and

documentation free of charge. Travel and living expenses are to be borne by

JetFax. On-site training may be given at JetFax's expense and in accordance

with OKIDATA's policy at the time of execution of this Agreement.





14. VALUE ADDED



JetFax warrants and represents that the Products purchased hereunder are

for use and resale as part of, or as accessories to, equipment manufactured

or assembled by or for JetFax. OKIDATA grants JetFax the right to

incorporate the products purchased hereunder into any such equipment.





15. EXPORT RESTRICTIONS



JetFax agrees that it shall not at any time make or permit any export or

reexport of OKIDATA products directly or indirectly to any country, without

full compliance with United States export laws and regulations as issued by

the United States Department of Commerce, Office of Export Administration,

as amended from time to time, as those laws and regulations apply to

OKIDATA products, and all other things delivered to, or derived from things

delivered to, Customer under the OEM Purchase Agreement.





16. CONFIDENTIALITY AND PROPRIETARY RIGHTS



Each party agrees that it shall not disclose to any third party, or use for

its own benefit, except as expressly permitted herein and other than is

necessary for its performance under this Agreement, any trade secrets,

technical data, methods, processes or procedures or any other confidential,

financial, or business information or data of the other party, which is

disclosed by one party to the other in the course performance of the OEM

Purchase Agreement, without the prior written consent of the party

asserting ownership of the information. This obligation shall survive the

cancellation or other termination of the OEM Purchase Agreement.



This Section 16 shall not apply to any data or information which

(a) becomes generally known or available through no fault of the receiving

party; (b) is already known to the receiving party at the time of r ...