Development and Supply Agreement - JetFax Inc. and Samsung Electronics Corp.


                                      [*] =    CONFIDENTIAL TREATMENT REQUESTED
                                                             REDACTED

                        DEVELOPMENT AND SUPPLY AGREEMENT



                                 BY AND BETWEEN



                                  JETFAX, INC.

                                      AND

                        SAMSUNG ELECTRONICS CORPORATION



                                 JUNE 30, 1995



                                  CONFIDENTIAL

                                      -1-

 
                        DEVELOPMENT AND SUPPLY AGREEMENT


          THIS DEVELOPMENT AND SUPPLY AGREEMENT (the "Agreement") is entered
into and is effective as of June 30, 1995 (the "Effective Date"), by and between
JetFax, Inc., a corporation duly organized and existing under the laws of
Delaware, U.S.A. with its principal place of business at 1376 Willow Road, Menlo
Park, California 94025 ("JetFax"), and Samsung Electronics Corporation, a
corporation duly organized and existing under the laws of the Republic of Korea,
having its principal place of business at 20th Floor, Severance Building, 84-11,
5-Ka, Namdaemoon-Ro, Chung-Ku, Seoul, Korea ("Samsung").


A.   Samsung is in the business of manufacturing and selling a variety of
electronic products including facsimile machines;

B.   Samsung is currently developing a new product (the "Product" as
hereinafter defined) which will require certain controller electronics and
associated software;

C.   JetFax is willing, subject to the terms and conditions set forth in
this Agreement, to develop the controller electronics and associated software to
be incorporated as part of the Product, supply the custom computer chips
required by JetFax's design and license to Samsung the intellectual property on
the terms and conditions herein; and

D.   Samsung desires to have JetFax design and develop the necessary
electronics and software, procure from JetFax the custom computer chips required
by JetFax's design and to acquire a license to make, use and sell such
electronics, software and computer chips on the terms and conditions herein-,

IN CONSIDERATION of the foregoing and the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:


1.   DEFINITIONS

1.1  "Acceptance Date" shall mean the date of acceptance of a "JetFax
Deliverable" or "Samsung Deliverable," as hereinafter defined, pursuant to
Section 4.2(c) hereof.

1.2  "Affiliate" shall mean all entities and persons controlled by,
controlling or under common control with a party.

1.3  "ASIC Set" shall mean a single set of Application Specific Integrated
Circuit chips developed by JetFax for use in a single Product.

                                      -2-

 
1.4  "Bill of Materials and Source List" shall mean the identification by
manufacturer and model of certain components and the source from which such
components may be obtained.  A preliminary Bill of Materials is attached hereto
as Exhibit F.

1.5  "Deliverable" shall mean a JetFax Deliverable or Samsung Deliverable.

1.6  "Electronic" shall mean those controller electronics and "Software,"
as hereinafter defined, to be developed by JetFax and incorporated as part of
the Product.

1.7  "Errors" shall mean: (i) reproducible defects in any Deliverable which
causes it not to function in conformance with the Specifications, and (ii)
Software miscoding which results in the Software failing to function in
conformance with the Specifications, if such failure is reproducible.

1.8  "Hardware Designs" shall mean those designs for circuit boards,
including information for in-circuit testers, to be developed by JetFax in
accordance with the Specifications.

1.9  "JetFax Deliverables" shall mean, collectively or individually, JetFax
developed Electronics, Software, Hardware Designs and the Bill of Materials and
Source List.  A more detailed description of the JetFax Deliverables is set
forth in Exhibit A to this Agreement.

1.10 "Product" shall mean the new Samsung combined laser printer,
telecopier, scanner and copier with features and "Specifications," as
hereinafter defined, as provided in Exhibit B.

1.11 "Project Schedule" shall mean the schedule of events for the parties'
performance under this Agreement, as set forth in Exhibit C.

1.12 "Services" shall mean the work and labor necessary for the performance
of the respective obligations of the parties.

1.13 "Software" shall mean software object code designed in accordance with
the Specifications.

1.14 "Specifications" shall mean the engineering, operational and/or
functional descriptions, details and requirements for the Product and the
Software and the Hardware Designs, as set forth in Exhibit B and mutually agreed
to between the parties as the same may be modified as provided herein.

1.15 "Samsung Deliverables" shall mean the sample Product units (minus
motherboard), list of connectors and connector pinouts, mechanical drawings and
power supply specifications as more fully set forth in Exhibit D.

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                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

2.   SCOPE OF WORK

2.1  Services.  Upon the terms and conditions set forth in this Agreement,
JetFax and Samsung agree to perform the Services required to provide their
respective Deliverables in accordance with the terms and conditions herein.
Each party will be responsible for obtaining all the technology, labor,
material, tooling and facilities necessary for the completion of its portion of
the Services, except as otherwise set forth in this Agreement.

2.2  Progress Reports.  Each party hereto shall provide the other party
with progress reports, as reasonably requested by the other party, starting
after the Effective Date and ending on the final Acceptance Date.  Each report
shall be in such form and contain such information as may be mutually agreed
upon by the parties, including but not limited to, progress to current scheduled
milestones, description of any problems in meeting milestones, and if any
problems are encountered, proposed recovery methods.

2.3 Agency Approvals.

(a)  The parties agree that JetFax shall make all engineering changes with
respect to the Electronics necessary for obtaining any required governmental or
private agency approvals or certifications for the Product in the countries
fisted in Exhibit E. All costs of certification (except fees for FCC and IC
telecom approvals in the U.S. and Canada which shall be paid by JetFax),
including, but not limited to, testing fees, filing fees and rework charges
required in connection with applying for such approvals in such countries shall
be paid by Samsung. Alternatively, at Samsung's written election, JetFax shall
make such engineering changes and complete all necessary filings and
certifications for Samsung at a price of [*] per country, based on Samsung's
making such election for a minimum of three (3) countries. Such payment shall be
made at the time of Samsung's election to have JetFax provide such services.

(b)  The parties agree that Samsung has the responsibility for and shall bear
the expense of obtaining any necessary Republic of Korea government (the "Korean
Government") or private agency approvals or certifications which are required in
connection with this Agreement. Samsung shall make no commitment to the Korean
Government or any agency thereof regarding this Agreement without the express
written consent of JetFax. If any approval or certification is conditioned upon
changes in the terms and conditions of this Agreement, such changes shall be
effective only if a formal amendment is executed by both parties. Samsung shall
advise Jetfax immediately of the receipt of such approvals and certifications
and shall provide JetFax a copy of the documents received by Samsung related to
such approvals and certifications.

3.   DESIGN REVIEW AND SPECIFICATION CHANGES

3.1  Design Review.  The parties agree to promptly confer at the request of
either party with respect to any material issues a party may have with the
performance of the other party of its obligations under this Agreement and to
review design and engineering issues.  JetFax shall pay all travel related costs
for up to four (4) trips to Samsung's laboratory for two (2) of its employees in
providing the Services required hereunder up until the final Acceptance Date.
Airfare, transportation, housing and meal expenses associated with any trips by
JetFax employees in excess of the foregoing shall be paid for by Samsung.

3.2  Changes to the Specifications.  JetFax shall make reasonable efforts
to ensure that the Hardware Designs are cost-effective.  Each party is entitled
to request modifications in the form of changes or additions to the
Specifications at any time during the term of this Agreement.  Such requests
shall be submitted in writing, and shall not be deemed or considered binding
unless accepted by the other party in writing.  If any such modification of the
Specifications is agreed upon, the parties will negotiate an equitable
adjustment to the Agreement, including the apportionment of any additional
development, testing or tooling costs.  Upon mutual agreement to any change to
the Specifications, both parties will proceed with the implementation of the
prescribed changes, and the Specifications and other Exhibits to this Agreement
shall be modified accordingly to reflect such agreed upon changes.

                                      -4-

 
3.3  Modification to Specifications Upon Acceptance.  Jetfax and Samsung
agree that upon acceptance of each Deliverable pursuant to Section 4.2, the
Specifications shall be modified as necessary to conform to the Deliverables, as
accepted, except as to material deviations from the Specifications noted in a
writing signed by both parties.  The party responsible for such Deliverable
shall perform further work to correct such deviations.  After acceptance of each
Deliverable pursuant to Section 4.2, the term "Specifications" as used herein
shall refer in all cases to the Specifications as so modified.

4.   DELIVERABLES AND DELIVERY;  ACCEPTANCE, AND REJECTION

4.1  Deliverables.  Samsung and JetFax agree to use reasonable efforts to
perform their respective obligations hereunder and deliver their respective
Deliverables, which conform to the Specifications, in accordance with the
Project Schedule.  Each party's obligation shall be contingent upon the other
party successfully providing any prerequisite Deliverable (as specified in the
Project Schedule) in a timely fashion.  AU Deliverables shall be delivered by
the times set forth in the Project Schedule, The parties shall use such
Deliverables for testing and acceptance and marketing purposes only and shall
not sell, lease or transfer the same to any third party.

4.2  Acceptance.

(a)  Each party will examine and test each Deliverable (and/or part thereof of
the other party upon receipt. Each receiving party shall, as soon as reasonably
practicable following the receipt of same, but in no event later than fifteen
(15) business days after receipt, (i) accept the Deliverable (or part thereof)
and so inform the other party in writing or (ii) if the Deliverable (or part
thereof) contains material Errors, reject the Deliverable (or part thereof and
provide the other party with a written statement of such material Errors. The
failure of a party to respond within the specified fifteen (15) day period shall
be deemed acceptance of the Deliverable (or part thereof, but shall not limit
the provisions of Section 4.4 hereof. Either party may request a reasonable
extension of time to complete such testing if required under the circumstances,
and both parties shall reasonably consider such requests, provided that no such
extension shall be effective unless in writing and signed by a duly authorized
representative of the party granting such extension.

(b)  The developing party will promptly correct the material Errors set forth in
the statement of material Errors with respect to any Deliverable (or part
thereof) and redeliver the Deliverable (or part thereof to the receiving party
within such reasonable period of time as may be agreed upon by JetFax and
Samsung. The receiving party shall, as soon as reasonably practicable after such
redelivery, but in no event later than fifteen (15) business days thereafter,
accept or reject the redelivered Deliverable in accordance with the procedure
set forth in Section 4.2(a). Such procedure shall be repeated until the
Deliverables are accepted or the receiving party invokes the provisions of
Section 4.2(d) hereof.

(c)  "Acceptance" shall be deemed to occur upon the earlier of (i) acceptance,
pursuant to this section, of all JetFax and Samsung Deliverables or (ii) the
first sale, lease, license or other distribution or transfer of a Product by
Samsung to a customer or other third party other than solely for test purposes.

(d)  The parties further agree that if a dispute arises as to whether any
Deliverable (or part thereof) is acceptable under the foregoing procedure, and
the parties are unable after good faith negotiation to resolve such dispute, the
parties agree to submit the acceptability of any such Deliverable (or part
thereof to a mutually acceptable independent third party mutually acceptable to
the parties. Such third party shall test the Deliverable (or part thereof and
determine if the Deliverable (or part thereof meets the Specifications for the
Deliverable and thus is acceptable. The determination of such independent third
party as to the acceptability of any Deliverable (or part thereof shall be
deemed final. The cost, if any, of employing such independent third party shall
be borne by the losing party.

4.3  Rejection.  If any Deliverable is determined under Section 4.2(d) to
not be acceptable, such feature may be deemed a breach of this Agreement by such
delivering party, and the non-breaching party may elect to 

                                      -5-

 
terminate this Agreement pursuant to Section 12.2(a) hereof or may elect to
accept further resubmission of the applicable Deliverable.

4.4  JetFax Support.  For a period of one (1) year after JetFax's release
of the final production Software, JetFax shall provide Samsung with reasonable
engineering support as required to incorporate the Hardware Designs and Software
in the manufacture of the Product.  All related airfare, transportation, housing
and meal expenses incurred by JetFax during visits requested by Samsung shall be
paid by Samsung.  After the initial one (1) year period, JetFax shall make its
engineering support reasonably available to Samsung at JetFax's customary rates.
For two (2) years after the first date of production of the Product, JetFax
shall use reasonable efforts to correct all material, documented and
reproducible Errors in the Software at no additional charge.  Samsung shall
provide such assistance as JetFax may reasonably request in making such
corrections.  All such corrections to the Software and Hardware Designs shall be
deemed to be included in the licenses granted under Section 5.3 hereof JetFax
will have no obligation under this section with respect to any Error in the
Software or Hardware Designs caused by any person or entity other than JetFax,
and JetFax is not obligated to correct any Errors in the Software unless such
Error or defect causes the Software to fail to function in conformance with the
Specifications.

5.   SUPPLY AND OWNERSHIP RIGHTS

5.1  ASIC Set Procurement.  Samsung shall purchase all the ASIC Sets
Samsung or its Affiliates require from JetFax under the terms and conditions
contained herein.

5.2  Material Cost Estimates.  If Samsung is unable to procure key
semiconductor components of the Electronics at a price similar to that price at
which JetFax is able to obtain such components, JetFax shall use reasonable
efforts to supply such components to Samsung at JetFax's cost plus handling,
shipping, packaging and insurance expenses.

5.3  JetFax Hardware Designs and Software Etc,

(a)  Subject to the terms and conditions of this Agreement, JetFax hereby grants
to Samsung, effective only upon receipt of the final payment due under Section
6.1 herein, a nonexclusive, worldwide license for a period of five (5) years,
commencing on such date, to the Hardware Designs and the Software as required to
manufacture, distribute, sell and service the Product; provided, however, such
license shall not include the right to manufacture the ASIC Sets, which right
shall be retained by JetFax. All ownership rights of all intellectual property
pertaining to the Hardware Design and the Software, including documentation,
designs, schematics and software shall remain the sole property of JetFax.

(b)  The non-exclusive license granted to Samsung pursuant to Section 5.3(a) of
this Agreement shall include the right to grant sublicenses to Affiliates of
Samsung but to no other party. Samsung shall give JetFax written notice of any
such sublicense and provide JetFax with a copy of the sublicense.
Notwithstanding any such sublicense, Samsung shall remain fully liable for
compliance with all of its obligations under this Agreement, including without
limitation, the payment of the amounts due under Section 6.2 of this Agreement.

(c)  Samsung shall not alter, reverse engineer, decompile or disassemble the
Software or the ASIC Sets or the Field Programmable Gate Arrays included in the
Hardware Designs. JetFax retains all ownership rights in and to the Software,
Hardware Designs, and corresponding intellectual property.

5.4  Samsung Deliverables.  Samsung retains its ownership rights in and to
any and all intellectual property developed by it and contained in the Samsung
Deliverables.  Subject to the terms and conditions of this Agreement, Samsung
hereby authorizes JetFax to use the Samsung Deliverables and any other Samsung
"Confidential Information," as hereinafter defined, disclosed to JetFax under
this Agreement as necessary or useful to develop the JetFax Deliverables.
During the term of this Agreement, JetFax may reverse engineer, decompile or
disassemble any software provided by Samsung as necessary or useful for the
development of the JetFax Deliverables.

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                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

5.5  Third Party Confidential Disclosure Agreements.  Prior to disclosing
any JetFax Deliverables to any third party in connection with Samsung's limited
"have manufactured" license pursuant to Section 5.3 (a), Samsung shall procure
from such third party a fully executed confidential disclosure agreement in a
form acceptable to JetFax, pursuant to which such party agrees to not disclose
or use such information except pursuant to such license, and naming JetFax and
such third party as parties thereto.

6.   PAYMENTS

6.1  Development Fees.  In consideration for the Services to be performed
by JetFax hereunder, Samsung agrees to pay to JetFax a nonrefundable development
fee of [*]  paid in the following  [*]  at the times indicated:

(a)       [*]

(b)       [*]  and

[*]



6.2  ASIC Price.  Samsung shall pay JetFax for each ASIC Set procured from
JetFax pursuant to Section 5.1 an amount (the "ASIC Set Price") equal to the sum
of   [*]  Samsung shall pay the amount due hereunder to JetFax upon placing an
order for the ASIC Sets with JetFax.  Notwithstanding the foregoing, the amount
due for the first [*]  In determining the total cost of the components, the
costs used shall (i) be from the lowest cost suppliers located by JetFax or
Samsung, (ii) not include shipping, handling, taxes or other similar costs,
(iii) not include the cost of printed circuit boards, (iv) not include the cost
of additional or upgraded components required due to changes in the
Specifications or configuration after the Effective Date and (v) not include any
increase in DRAM or SRAM costs occurring after the Effective Date.

6.3  Method of Payment.  Payment shall be made by check or by wire transfer
to such bank account or other place as designated in writing by JetFax from time
to time.  All taxes, duties, imposts and similar charges which may be assessed
or imposed by any governmental authority upon the sums due to JetFax pursuant to
this Agreement shall be borne and discharged by Samsung except as may otherwise
be agreed to in writing by the parties.  No part of the charges borne and
discharged by Samsung shall be deducted by Samsung from any payment due to
JetFax under this Agreement.

6.4  Late Fees.  Any late payments shall include interest at the lesser of
(i) [*] per annum or (ii) the maximum rate allowed by applicable law.  The
payment of such late charges shall not prevent JetFax from exercising any other
rights it may have as a consequence of the lateness of any payment.

7.   REPRESENTATIONS AND INDEMNIFICATIONS

7.1  Representations.  Each party represents and warrants that:

(a)  it has full right and authority to enter into this Agreement, to perform
its obligations hereunder; and

(b)  it has full right and authority to grant the rights granted to the other
party herein.

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                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

7.2  Samsung Indemnity.  Subject to the terms hereof, Samsung agrees to
indemnify, defend and hold JetFax harmless from any claim, loss, or damage
arising from (a) any patent infringement of any third party's rights by any part
of the Product, including the Hardware Designs and Software if such items are
modified by, or on behalf of, Samsung and (b) any sale, use or other disposition
of the Product by Samsung or its transferees.  Such obligation to indemnify
shall be subject to the condition that: (i) JetFax promptly notifies Samsung in
writing of any such claim, loss or damage and permits Samsung, through counsel
of choice, to answer the charge of infringement and defend such claim; (ii)
Samsung has sole control of the defense and all related settlement negotiations;
(iii) the claim does not involve a patent that is already licensed by JetFax in
its existing patent license agreements; and (iv) JetFax provides Samsung with
the assistance, information and authority to perform the above.  If Samsung
agrees to settle the suit, both Samsung and JetFax agree not to publicize the
settlement nor to permit the party claiming infringement to publicize the
settlement.

7.3  JetFax Indemnity.  In the countries fisted in Exhibit E, JetFax agrees
to indemnify, defend and hold Samsung harmless from any claims, loss or damage
arising from any patent infringement by JetFax's Hardware Design and Software.
Such obligation to indemnify shall be subject to the condition that: (i) Samsung
promptly notifies JetFax in writing of any such claim, loss or damage and
permits JetFax, through counsel of choice, to answer the infringement and defend
such claim; (ii) JetFax has sole control of the defense and all related
settlement negotiations; (iii) the claim does not involve a patent that is
already licensed by Samsung in its existing patent license agreements; and (iv)
Samsung provides JetFax with the assistance, information, and authority to
perform the above.  If JetFax is liable for such infringement, JetFax may either
modify its design to be non-infringing or obtain a license to continue using
JetFax's design at JetFax's expense.  If JetFax is unable to obtain a license
under reasonable terms and the parties are unable to reasonably design around
such patent(s), the parties shall negotiate in good faith a settlement between
them to omit the infringing patent from this indemnity provision.

If JetFax agrees to settle the suit, both JetFax and Samsung agree not to
publicize the settlement nor to permit the party claiming infringement to
publicize the settlement.  Notwithstanding anything contained herein to the
contrary, JetFax's liability under this section of this Agreement shall be
limited to an amount not greater than the sum of [*]

Notwithstanding the foregoing, JetFax shall have no liability hereunder for any
claim, loss or damage based on modifications or other alterations made to the
Software or the Hardware Designs by a party other than JetFax or the
combination, operation or use of the Software or the Hardware Designs with other
hardware or software not furnished or developed by JetFax if such infringement
would have been avoided by the use of the Software and the Hardware Designs
without such modification or alteration or without such other hardware or
software.

8.   CONFIDENTIALITY

Samsung and JetFax acknowledge that in the course of performance hereunder, each
party may disclose to the other Confidential Information.  Confidential
Information shall include, but not be limited to, the Hardware Designs, the
Software, any other hardware designs or software provided, source lists, and
other trade secrets or proprietary information.  Confidential Information shall
be treated as confidential by the receiving party.  The receiving party shall
not disclose to others (including to any Affiliates of the receiving party not
bound by like conditions of confidentiality), nor make any use of the
Confidential Information received from the providing party for any purpose other
than as contemplated in this Agreement, without the prior written consent of the
providing party.  Each party shall not so disclose or use Confidential
Information of the other except to the extent any of the Confidential
Information: (i) was known to the receiving party prior to the disclosure
hereunder; (ii) is or becomes publicly known through no fault or omission
attributable to the receiving party; or (iii) is rightfully given to the
receiving party from sources independent of the providing party, which sources
rightfully possess such information.

9.   TRADEMARKS AND LOGOS

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                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

Samsung agrees to place JetFax's name and copyright notice on all electronic
components designed by JetFax including the firmware, the circuit boards and the
ASIC Sets.  JetFax shall also have the right to prominently display its name on
all Windows software pieces, including but not limited to, the printer and
scanner drivers and the configuration program.  JetFax shall have the right to
revoke Samsung's right to use JetFax's name and any logo or trademark if the
quality of the Products is not reasonably acceptable to JetFax.

10.  MARKETING RIGHT

Samsung agrees to manufacture and sell the Products to JetFax on an OEM basis.
If Samsung has not entered into any OEM contract to supply the Products to a
third party for sale in the United States at the time JetFax wishes to first
place an order for the Products, JetFax and Samsung shall negotiate an agreement
with mutually agreeable terms for such sales. If at any time, Samsung enters
into an agreement to supply the Products to any third party for sale in the
United States on terms more favorable than those then currently in the agreement
between JetFax and Samsung, Samsung shall offer in writing to sell the Products
on the more favorable terms to JetFax. JetFax's rights under this section shall
not prevent Samsung from selling the Product to other OEMS.

11.  TERM

This Agreement will commence on the Effective Date and will continue to be in
effect until five (5) years after the date JetFax releases the final production
Software, unless terminated earlier pursuant to other provisions in this
Agreement.

12.  TERMINATION

12.1 JetFax Default.  If JetFax breaches any of its material obligations
hereunder and fails to cure such breach within sixty (60) days of receiving
written notice thereof from Samsung, or if it is not reasonable to expect such a
cure within that period, fails to commence to cure within that period and to
continue to diligently cure the breach, the price to be paid by Samsung per ASIC
Set under Section 6.2 shall be reduced by  [*]  until such breach is cured.

12.2 Termination for Cause by Either Part . Either party may terminate this
Agreement:

(a)  upon sixty (60) days written notice to the other party if the other party
breaches any of its material obligations hereunder and fails to cure such breach
during the notice period, or if it is not reasonable to expect such a cure
within that period, does not within such time commence to cure, and continues to
diligently cure, the breach; or

(b)  upon sixty (60) days written notice to the other party if a petition in
bankruptcy or similar debtor protection law is filed by or against the other
party, or if the other party makes an assignment for the benefit of creditors,
or a receiver is appointed, and such events are not discontinued, vacated or
terminated during the notice period.

12.3 Effect of Termination.

(a)  Upon termination of this Agreement, the license set forth in Section 5.3
hereof shall terminate and Samsung shall have no further rights hereunder and
JetFax shall have no obligation to provide any additional ASIC Sets. JetFax
shall retain all rights to the Hardware Designs and the Software.

(b)  Upon termination of this Agreement, each party shall return to the other
party all Confidential Information of the other party and shall make no other or
further use of such Confidential Information. Upon termination of this Agreement
for any reason other than default by JetFax, Samsung shall immediately pay to
JetFax all amounts due hereunder which have not yet been paid.

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13.  JETFAX FAILURE TO PERFORM
     -------------------------

Subject to JetFax's rights in Article 12 and subject to Section 17. 1, if JetFax
discontinues its performance hereunder prior to the release of the final
production software and fails to make a good faith effort to complete
performance of its obligations hereunder, JetFax shall repay to Samsung, as
liquidated damages, all payments received by JetFax under Section 6. 1.

14.  RIGHT TO DEVELOP FOR OTHERS
     ---------------------------

Nothing in this Agreement will impair JetFax's right to acquire, license,
develop, manufacture, sell or distribute for itself or others similar technology
performing the same or similar functions as the technology contemplated by this
Agreement.

15.  DISPUTE RESOLUTION
     ------------------

15.1 DisputeResolution.  All disputes under this Agreement shall be
     -----------------                                             
settled, if possible, through good faith negotiations between the parties.  If
such good faith negotiations are unsuccessful, either party may, after thirty
(30) days written notice to the other party, seek arbitration as hereinafter
provided.

15.2 Arbitration.  Any dispute under this Agreement shall be settled by
arbitration in San Francisco, California, U.S.A. as follows:

(a)  The matter in dispute to be settled by arbitration shall be submitted to a
panel of three (3) arbitrators in accordance with the Rules of Arbitration and
Conciliation of the International Chamber of Commerce C'ICC") then in effect.

(b)  Each party shall appoint one arbitrator within fifteen (15) days after
giving or receiving the demand for arbitration. The two arbitrators thus
appointed shall, within fifteen (15) days after both have been appointed,
appoint the third arbitrator.

(c)  Any appointment required herein not made within the prescribed time shall
be made by the ICC.

(d)  The proceedings shall be conducted in English and all arbitrators shall be
fluent in English.

(e)  The determination of the arbitrators shall be conclusive and binding upon
the parties and judgment may be entered thereon and enforced by any court
of competent jurisdiction and each party hereby irrevocably consents to the
jurisdiction of such courts for such purpose.

16.  DISCLAIMER OF CONSEQENTIAL DAMAGES AND IMPLIED WARRANTIES
     ---------------------------------------------------------

In no event shall either party be liable to the other for any indirect, special,
incidental or consequential damages for breach of or failure to perform under
this Agreement, even if that party has been advised of the possibility of such
damages.  EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7. 1, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR UALIED, WITH RESPECT TO ANY
DELIVERABLE OR OTHERWISE, INCLUDING WITHOUT LMTATION, THE WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, TECHNICAL PERFORMANCE, OR
COMMERCIAL SUCCESS AND HEREBY DISCLAIMS ALL SUCH OTHER WARRANTIES.  EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY ASSUMES ANY RESPONSIBILITIES
WHATSOEVER WITH RESPECT TO THE DEVELOPMENT, MANUFACTURE, USE, SALE, LEASE, OR
OTHER DISPOSITION BY THE OTHER PARTY OR ITS VENDEES OF PRODUCTS INCORPORATING
DELIVERABLES LICENSED OR PROVIDED UNDER THIS AGREEMENT.

                                      -10-

 
17.  GENERAL

17.1 Force Majeure.  Neither party shall be liable for any failure or delay
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in its performance under this Agreement due to causes which are beyond its
reasonable control, including, but not limited to, acts of God, acts of civil or
military authority, fires, epidemics, floods, earthquakes, riots, wars,
sabotage, labor shortages or disputes, and governmental actions; provided that
(a) the delayed party: (i) gives the other party written notice of such cause
promptly, and in any event within fifteen (1 5) days of discovery thereof, and
(ii) uses its reasonable efforts to correct such failure or delay in its
performance, and (b) the delayed party's time for performance or cure under this
Agreement shall be extended for a period equal to the duration of the cause or
sixty (60) days, whichever is less.

17.2 Relationship of Parties.  Samsung and JetFax are independent
     -----------------------
contractors.  Neither company nor its respective employees, consultants,
contractors or agents are agents, employees or joint venturers of the other, nor
do they have any authority to bind the other by contract or otherwise to any
obligation.  They will not represent to the contrary, either expressly,
implicitly, by appearance or otherwise.  Each party will determine, in its sole
discretion, the manner and means by which the Services are accomplished, subject
to the express condition that each party will at all times comply with
applicable law.

17.3 Personnel.  The respective employees, consultants, contractors and
     ---------
agents of each party will observe the working hours, working rules and holiday
schedule of the other while working on the other's premises.  Notwithstanding
the foregoing, employees of a party shall be and remain employees of that party
and shall not be deemed or claim to be employees of the other party even when
working on such other party's premises.

17.4 Employment Taxes and Benefits.  Each party shall be responsible for
     ----------------------------- 
any and all employment taxes and benefits payable to its employees,
representatives, contractors, subcontractors and other engaged by it to perform
Services hereunder and in no event shall either party look to the other for such
payments.

17.5 Other Tax Implications.  The purpose of development of the
     ----------------------                                    
Deliverables under this Agreement is to demonstrate that the Product developed
hereunder will conform to the Specifications.  The Deliverables have no
intrinsic value as an item.  As such, no value added, sales, or use taxes are
anticipated to be required as a result of the Services performed under this
Agreement.

17.6 Export Controls.  Samsung acknowledges that it and JetFax are subject
     ---------------                                                      
to and agrees to abide by the United States laws and regulations (including the
Export Administration Act of 1979 and Arms Export Control Act) controlling the
export of technical data, computer software, laboratory prototypes, biological
material and other commodities.  The transfer of such items may require a
license from the cognizant agency of the U.S. Government or written assurances
by Samsung that it shall not export such items to certain foreign countries
without prior approval of such agency.  JetFax neither represents that a license
is or is not required or that, if required, it shall be issued.

17.7 Assignment.  Except as expressly provided herein, neither party may
     ----------
assign or delegate this Agreement, or any of its respective rights or
obligations hereunder without the prior written consent of the other party
hereto; provided, however, that JetFax may, with prior written notice to
Samsung, assign or delegate this Agreement and JetFax's rights and obligations
hereunder to any successor in interest to JetFax in connection with any sale or
transfer of all or substantially all of its assets or upon any merger,
consolidation, or dissolution.  Either party may, from time to time and upon
prior written notice to the other party, subcontract with one of its
subsidiaries for the performance of certain obligations under this Agreement
provided that the party so subcontracting shall remain liable for performance of
its obligations hereunder.  Any attempted assignment in violation of the
provisions of this section shall be void and without force or effect.  In the
event of a pen-nitted assigm-nent hereunder, this Agreement or the applicable
provisions shall be binding upon the successors, executors, and assigns of the
parties hereto.

17.8  Applicable- Law.  This Agreement shall be governed by and construed in
      ---------------  
accordance with the laws of the State of California, U.S.A. without giving
effect to the principles of conflicts of law thereunder.

                                      -11-

 
17.9  Severability.  If for any reason a court of competent jurisdiction
      ------------
finds any provision of this Agreement, or portion thereof, to be unenforceable,
that provision of the Agreement shall he enforced to the maximum extent pen-
nissible so as to effect the intent of the parties, and the remainder of this
Agreement shall continue in full force and effect.

17.10 Notices.  All notices required or permitted under this Agreement shall
      ------- 
be in writing, reference this Agreement and be deemed given when: (i) delivered
personally; (ii) when sent by confirmed telex or facsimile; (iii) fifteen (15)
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one (1) day after deposit with a commercial
overnight carrier, with written verification of receipt.  All communications
will be sent to the addresses set forth below.  Either party may change its
address by giving notice pursuant to this section.

JetFax:
-------
Rudy Prince, President
Jet Fax, Inc.
1376 Willow Road
Menlo Park, California 94025
U. S. A.


Samsung:
--------

Attn:
Samsung Electronics Corporation 
20th Floor, Severance Building 84-11, 
5-Ka, Namdaemoon-Ro, Chung-Ku 
Seoul, Korea


With a copy to:

James Prince, Esq.
4200 Texas Commerce Tower 
Houston, Texas 77002
U.S.A.

17.11  Waiver.  Failure by either party to enforce any provision of this
       ------
Agreement shall not be deemed a waiver of future enforcement of that or any
other provision.

17.12  No Rights in Third Parties. This Agreement is made for the benefit of
       --------------------------                                           
Samsung and JetFax and not for the benefit of any third parties.

17.13 Language. This Agreement is executed in original English counterparts,
      --------                                                              
each of which shall be deemed an original, but collectively shall constitute but
one and the same instrument.  The English text of the Agreement shall prevail
over any translation thereof

17.14 Headings and References.  The headings and captions used in this
      -----------------------                                         
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

17.15 Construction.  This Agreement has been negotiated by the parties and
      ------------                                                        
their respective counsel.  This Agreement will be fairly interpreted in
accordance with its terms and without any strict construction in favor of or
against either party.

17.16 Trademark Usage.  Except for the provision stated in Section 9 of this
      ---------------                                                       
Agreement, neither party shall make any use of any trademark, service mark or
trade name of the other in connection with its advertising, promotional material
or packaging for the Product without first obtaining the other party's written
consent.

                                      -12-

 
17.17 Complete Agreement.  This Agreement, including all Exhibits
      ------------------                                         
constitutes the entire agreement between the parties with respect to the subject
matter hereof, and supersedes and replaces all prior or contemporaneous
understandings or agreements, written or oral, regarding such subject matter.
No amendment to or modification of this Agreement shall be binding unless in
writing and signed by duly authorized representatives of both parties.  To the
extent any terms and conditions of this Agreement conflict with the terms and
conditions of any invoice, purchase order or purchase order acknowledgement
placed hereunder, the terms and conditions of this Agreement shall govern and
control.

17.18 Survival.  The provisions of Sections 5.3(c), 8, 12.3, 13, 14, 15 and
      --------                                                             
16 shall survive the expiration or termination of this Agreement for any reason.


IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives effective as of the Effective Date.

JETFAX, INC., a Delaware corporation  SAMSUNG ELECTRONICS
                                      CORPORATION, a Korean



Bv: /s/ Edward R. Prince III          Bv: /s/ DONGJA KIM
----------------------------          -------------------
NAME:  Rudy Prince                    NAME: Dongja Kim
       PRESIDENT                            DIRECTOR

                                      -13-

 
                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT A

                              JETFAX DELIVERABLES

[*]

                                      -14-

 
                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT B

                             PRODUCT SPECIFICATION

[*]

                                      -15-

 
                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

PRODUCT SPECIFICATION(CONTINUED)

[*]

                                      -16-

 
                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

PRODUCT SPECIFICATION(CONTINUED)

[*]

                                      -17-

 
                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT C

                                PROJECT SCHEDULE

[*]

                                      -18-

 
                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT D

                              SAMSUNG DELIVERABLES

A.   H/W DESIGN AND PRODUCTION RELATED DOCUMENTATIONS

1.   [*]

2.   [*]

3.   [*]

4.   [*]

5.   [*]

6.   [*]

7.   [*]


B: S/W RELATED DOCUMENTATIONS

1.   [*]

2.   [*]

3.   [*]

4.   [*]

5.   [*]

6.   [*]

7.   [*]

                                      -19-

 
                                   EXHIBIT E

                          COUNTRY FOR AGENCY APPROVAL



**   UNITED STATES
**   CANADA

**   UNITED KINGDOM
**   GERMANY
**   ITALY
**   SPAIN
**   SWEDEN
**   HOLLAND

                                      -20-

 
                                          [*] = CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT F

SAMSUNG LAMP Controller Component Cost Estimate Preliminary Costed Bill of
Materials
 
 
                                   Target      Extended
Item                Quantity      Unit Cost      Cost         Description
------------------------------------------------------------------------------------
                                                  
[*]

 

                                      -21-