OEM Supply Agreement - Spectra Inc. and Accent Color Sciences Inc.



                                 SPECTRA, INC.
                          ACCENT COLOR SCIENCES INC.
                             OEM SUPPLY AGREEMENT

IN THIS AGREEMENT, dated as of January 8, 1996, SPECTRA, INC. ("SPECTRA") and
ACCENT COLOR SCIENCES INC. ("Customer"), collectively the "Parties", agree as
follows:

                                  DEFINITIONS

I.   DEFINITIONS
     -----------

     1.   1. "Affiliate" means any corporation, partnership, association, or
other entity with respect to which a party, directly or indirectly through a
subsidiary, has not less than a majority beneficial ownership, but only if that
corporation, partnership, association, or other entity expressly agrees in
writing to be bound by this Agreement, and only while that ownership
relationship exists.

     1.2. "Agreement" means this Supply Agreement between Spectra and Customer.

     1.3. "Ancillary Hardware" means any hardware, other than Printheads, that
is part of a Print Engine, including but not limited to ink reservoirs, pressure
regulators, head drive electronics, ink supply tubing, etc.

     1.4. "Customer's Field" and "Customer's Exclusive Field" shall be defined
in accordance with Sections 9.1.1 and 9.2.1 below, respectively.

     1.5. "Customer Product" shall mean a digital printer, printing system or
printing subsystem, including a Mechanism and a Printhead, designed,
manufactured or marketed by or on behalf of Customer, on a retail, distribution
or OEM sales basis, the Printhead(s) in which have been purchased from Spectra.

     1.6  "Customer Program Technology" shall mean any Technology developed or
acquired by Customer in the course of developing Customer Products, whether
patented or unpatented including any know-how for practicing such Technology,
which relates directly to the operation of and the interface to Spectra
Printheads, Inks or Hardware incorporating Spectra System Technology.

 
     1.7.  "Effective Date" means [date of agreement].

     1.8.  "Hardware means Print Engines, Printheads and Ancillary Hardware
supplied by Spectra to Customer.

     1.9.  "Ink" means printing inks and other materials used in printing
processes which are used in Printheads.

     1.10. "Packaged Spectra Ink" means Spectra Ink of formulations currently
referred to as "Launch" and "Sable" packaged in accordance with the Ink
Specifications attached as Exhibit 1.

     1.11. "Print Engine" shall mean a device comprised of (i) components for
moving and controlling the movement of the Printhead and print media, paper
path, and ink supply components (collectively, the "Mechanism"), (ii) a
Printhead, and (iii) optionally a power supply and covers.

     1.12. "Printhead" shall mean a piezoelectric device with multiple jets that
eject droplets of Ink on demand.

     1.13. "Purchase Order" means any purchase order that Customer issues to
order Products from Spectra in accordance with this Agreement.

     1.14. "Products" means Hardware and Spectra Ink supplied by Spectra to
Customer.

     1.15. "Purchase Year" shall mean a twelve month period beginning on April
1, of each year and ending on March 31 of the following year, except that the
first Purchase Year shall begin on the date hereof and end on March 31, 1996.

     1.16. "Reserved Markets" shall mean those markets and applications which
Spectra has granted exclusive and/or non-exclusive rights to other Spectra
customers, as more specifically defined in Schedule 3.

 
     1.17. "Spectra Ink" shall mean Ink manufactured by or on behalf of Spectra.

     1.18. "Spectra System Technology" shall mean System Technology that Spectra
owns or has the right to sublicense to Customer, except for patents licensed to
Spectra from Xerox Corporation, on the Effective Date.

     1.19. "System Technology" shall mean Technology for the manufacture and use
of Print Engines, including but not limited to transparency enhancement, heated
platen print zone, offhead ink supply, and machine control electronics, but
specifically excluding any Technology related to the manufacture of Printheads,
or Inks.

     1.20. "Spectra Future Systems Technology" shall mean System Technology that
Spectra develops or acquires after the Effective Date, or as to which Spectra
acquires after the Effective Date the right to sublicense to Customer, except
for patents licenses to Spectra from Xerox Corporation.

     1.21. "Technology" shall mean inventions, works of authorship, know-how,
trade secrets, manufacturing processes, designs, and specifications, and shall
include patents, patent applications and copyrights.

     1.22. "Specifications" means the specifications for Spectra Products
attached in Exhibit 1, including all changes made in accordance with this
Agreement.

     1.23. "Term" means the period beginning on the Effective Date and ending on
the date on which this Agreement terminates under Section 12.

     1.24. "Total Requirements" shall mean the aggregate of all Ink used by
Customer or sold by Customer for use with Spectra Printheads.


                      GENERAL TERMS FOR SPECTRA PRODUCTS

2.   FORECASTS: PURCHASE ORDER
     -------------------------

 
     2.1. Customer will order Spectra Products through the issuance of purchase
orders at least ninety (90) days in advance of the requested delivery dates. All
preprinted terms and conditions on purchase orders are superseded entirely by
the terms and conditions of this Agreement. Each purchase order will adequately
identify the Spectra Product ordered by use of Spectra's product code, set forth
the requested quantity, and specify the requested delivery method and date.
Purchase orders must be in writing and may be sent via facsimile to Spectra's
then current facsimile number.

     2.2  Upon receipt of any purchase order submitted in accordance with this
Agreement, Spectra will either: (i) accept the order, which will establish the
delivery date; or (ii) notify Customer of Spectra's inability to deliver Spectra
Product at the time or times requested. If Spectra cannot fulfill Customer's
purchase orders as requested due to a shortage of any Spectra Product, Spectra
shall use its reasonable efforts to satisfy Customer's purchase requirements as
closely as possible. If Spectra ships an order, Spectra will have been deemed to
have accepted it.

     2.3  Spectra Products will be delivered to Customer in packaging reasonably
acceptable to Customer, given shipment, warehousing and storage requirements.
(Customer will advise Spectra in writing of any special packaging or labeling
requirements at the time in placing an order.) Delivery will be made FOB
Spectra's manufacturing, warehousing or transshipment facility.

     2.4. Customer will provide Spectra with a non-binding, rolling six (6)
month forecast of Spectra Product requirements; provided, however, that orders
placed under Section 2.1 hereunder are noncancellable and non-deferrable
beginning ninety (90) days prior to scheduled delivery date. In general, Spectra
requires up to six (6) months advance notice to add significant additional
manufacturing capacity, and may not be able to meet orders as a result of
changes in or requirements in excess of those set forth in six-month rolling
forecasts.


                            HARDWARE PURCHASE TERMS

3.   HARDWARE PRICES AND TERMS
     -------------------------

 
     3.1. Customer shall pay Spectra the amounts specified in Schedule I,
subject to the terms and provisions thereof, for each Spectra Hardware Product
which Customer orders from Spectra under Section 2.

     3.2. Customer will pay Spectra for each Spectra Hardware Product as
follows: (i) twenty-five percent (25%) no later than sixty (60) days prior to
the requested delivery date, (ii) twenty-five percent (25%) no later than thirty
(30) days prior to the requested delivery date, and (iii) the balance within
thirty (30) days after delivery to Customer by Spectra. All past due amounts
shall accrue delinquency charges at the rate of one percent (I%) per month.

4.   HARDWARE WARRANTIES AND REPAIRS
     -------------------------------

     4.1. Spectra warrants to Customer that:

          4.1.1.  Each Spectra Hardware Product shall conform to the
Specifications and be free from defects in materials and workmanship for the
lesser of 180 days after the Hardware Product is delivered to Customer's
customer or 270 days after title to that Spectra product passes to Customer
under this Agreement;

          4.1.2.  Each Spectra Hardware Product shall comply with the applicable
rules and regulations of agencies defined in the Specifications.

     4.2. THE WARRANTIES IN SECTION 4.1 ARE IN LIEU OF ALL OTHER SPECTRA
HARDWARE PRODUCT WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

     4.3. If, within the warranty period specified in Section 4.1.1, a Spectra
Hardware Product does not comply with any warranty in Section 4.1 and Customer
notifies Spectra of such noncompliance prior to 30 days after the end of s u c h
period, Customer may ship such product back to Spectra at Customer's expense.
Spectra shall at its option promptly repair or replace that Spectra Product.
Spectra shall pay the costs of any such repair or replacement, including
transportation costs incurred returning repaired or replaced products to
Customer unless (i) the Spectra Product is not defective, in which case Customer
shall pay 

 
Spectra's reasonable costs of inspection and all transportation charges, or (ii)
the Spectra product is defective due to Customer's or any third party's damage,
misuse, abuse, or failure to use ink equivalent to the Spectra Ink, in which
case Customer shall pay all costs of repair or replacement and transportation.
Customer must mark each package it returns to Spectra under this Section 4.3
with a Returned Materials Authorization ("RMA") number, which Spectra shall
furnish to Customer on request, and shall include with each returned Spectra
Product a writing which specifies the reasons why Customer rejected that Spectra
Hardware Product.

          4.4. Non-Warranty Hardware Repairs. Whenever practical, Spectra will
provide depot repair services on Hardware for repairs not covered by the
foregoing warranty. Upon authorized return to Spectra's designated facility
under an RMA, Spectra shall repair Hardware at Customer's expense, on a time and
materials basis, at Spectra's then current prices for parts and rates for
service. In cases where Hardware cannot be successfully repaired, Customer, at
its option, may either replace the returned Hardware by purchasing a new unit
from Spectra at then current prices or reimburse Spectra for its valid repair
efforts and costs on the returned unit. Repairs are warranted by Spectra for the
remainder of the original warranty period or ninety (90) days, whichever is
longer.

                              INK PURCHASE TERMS

5.   INK PURCHASE OBLIGATIONS
     ------------------------

     5.1. Customer will purchase its Total Requirements of Ink from Spectra,
provided that Customer may seek and utilize alternative or supplemental sources
of Ink to the extent and for the period Spectra is unable to fulfill Customer's
requirements. In the event Customer identifies a lower priced supplier of Ink
that is the same quality and meets the functional Specification of Spectra Ink,
Customer may present Spectra with bona fide evidence of such lower price, and
documentation that the competitive ink meets the Ink Specifications. Spectra
shall have the right to meet such price. In the event Spectra meets such price,
Customer shall continue its purchases from Spectra. In the event Spectra elects
not to meet such competitive price, Customer may purchase Ink for use i n
conjunction with Printheads from such alternative supplier. Any Inks purchased
by Customer from a third party must be qualified within a reasonable timeframe
by Spectra to  

 
Spectra's functional Specification at Customer's expense in order for Spectra
to maintain existing warranty coverage on Hardware used with such third party
Inks.

6.   INK PRICES
     ----------

     6.1.  Prices for Packaged Spectra Ink shall be determined as set forth
Schedule 1.

     6.2. Customer shall pay Spectra for Ink as follows: (i) twenty-five percent
(25%) no later than sixty (60) days prior to the requested delivery date, (ii)
twenty-five percent (25%) no later than thirty (30) days prior to the requested
delivery date, and (iii) the balance within thirty (30) days after delivery by
Spectra. All past due amounts shall accrue delinquency charges at the rate of
one percent (I%) per month.

7.   SPECTRA INK WARRANTIES
     ----------------------

     7.1. Spectra warrants to Customer that:

          7.1.1.  Each unit of Spectra Ink shall conform to the applicable
     Spectra Ink Specifications for the lesser of 180 days after the Ink is
     delivered to Customer's customer or 270 days after title to that Spectra
     Ink passes to Customer under this Agreement;

          7.1.2.  Each unit of Packaged Spectra Ink shall comply with t h e
     appropriate Ink specifications.

     7.2  THE WARRANTIES IN SECTION 7.1 ARE IN LIEU OF ALL OTHER SPECTRA INK
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

          7.3.    If, within the warranty period specified in Section 7.1.1 a
Spectra Ink Product does not comply with any warranty in Section 7.1 and
Customer notifies Spectra of such noncompliance prior to 30 days after the end
of such period, Spectra shall promptly replace that unit. Spectra shall pay the
costs of any such replacement, including transportation charges, unless (i) the
unit is not defective, in which case Customer shall pay all transportation
charges and, if  

 
Customer's determination that the unit was defective was not in good faith,
Spectra's reasonable costs of inspection, or (ii) the unit is defective due to
Customer's or any third party's damage, misuse, or abuse in which case Customer
shall pay all costs of repair or replacement and transportation. Customer must
mark each package it returns to Spectra under this Section 7.3 with a Returned
Materials Authorization number, which Spectra shall furnish to Customer on
request, and shall include with each returned unit (or with a returned lot or
batch, if the same defect occurs in more than one unit) a writing which
specifies the reasons why Customer rejected that unit, lot, or batch.

                                    GENERAL

8.   LICENSES AND ROYALTIES
     ----------------------

     8.1. Subject to the terms of this Agreement, (i) Spectra hereby grants to
Customer a worldwide right and license, with rights to sublicense only in
connection with Customer Products, under the Spectra System Technology to make,
have made, use and sell Customer Products in Customer's Field an d Customer's
Exclusive Field, and (ii) Customer hereby grants to Spectra a worldwide right
and license, with rights to sublicense only in connection with Spectra products,
under Customer Program Technology to make, have made, use and sell Spectra
Products for resale outside of Customer's Exclusive Field. Except as set forth
in Section 8.5 and 8.6, the license granted Customer herein expressly excludes
the right to manufacture Printheads or Inks.

     8.2  Spectra agrees to indemnify, defend and hold Customer and its
customers harmless from and against any claim against them by Howtek, Hitachi
Koki and Dataproducts, Inc., their affiliates, successors or assigns, that a n y
Customer Print Engine that includes a Spectra Printhead infringes any patents o
f such parties described in Schedule 2. This indemnity will apply only to those
Customer Print Engines including Spectra Printheads purchased from Spectra while
Customer is in good standing with respect to the payment of license fees and
royalties provided for in this Section 8.

     8.3. Customer will pay to Spectra those royalties and license fees set
forth in Schedule 2, "Royalties and License Fees", in connection with purchases
of Hardware in which Customer uses phase change Ink, subject to the terms and
conditions thereof. Customer shall not be obligated to pay royalties or fees 
set  

 
forth in Part I of Schedule 2 to Spectra in excess of those due from Spectra to
t h e third parties defined in Schedule 2 with respect to Customer's purchases
from Spectra. In the event of a reduction in royalties payable by Spectra to
such third parties, Customer's royalties shall be reduced accordingly. The
royalties set forth in Part 11 of Schedule 2 shall be suspended for so long as
Customer shall be purchasing its requirements of Ink from Spectra.

     8.4. Customer will provide Spectra with a written report, no later than
thirty (30) days following the end of each calendar quarter, describing for such
calendar quarter the number and type of Customer Product and Ink sold, leased or
otherwise disposed of, together with a detailed royalty calculation sufficient
to establish a statement of royalties due under Spectra's agreements with
parties identified in Schedule 2. Customer will pay any royalties due together
with such report.

     8.5  Coverage for Spectra supply risk: Within 60 days of the execution of
this Agreement, Spectra will place in escrow, with a mutually agreed escrow
agent (the charges of such agent to be borne by Customer), full details, to the
extent known to Spectra and promptly updated for material changes by Spectra
from time to time, of the compositions and methods of manufacture of the
Hardware Products and Inks to be supplied by Spectra to Customer. Customer may
inspect such materials prior to placement in escrow by Spectra. The escrow
agreement shall provide that the material to be placed in escrow shall be
available to Customer in the event that:

     a.   a Supply Failure (as defined in this paragraph) shall have occurred.
     In the event that Spectra shall be unable to fill an order for a particular
     Hardware Product or Ink that Spectra is obligated to fill under Section 2.1
     hereunder, Spectra shall so advise Customer as soon as practicable, and
     shall advise Customer of the remedial action that it intends to take. If
     such failure shall continue until twenty (20) days following the agreed
     shipment date, Customer may send personnel to Spectra to observe the
     progress toward correcting such failure to supply and to assist in
     resolving the situation. In the event that such failure shall continue for
     an additional 40 days, then a Supply failure shall be deemed to have
     occurred; or

 
     b.   Customer acquires and exercises rights under United States Code, Title
     11, Section 365(n)(1)(B) (option for licensee, whose license has been
     rejected by trustee in bankruptcy, to retain rights under the license).

8.6  In connection with Section 8.5:

          8.6.1   It is understood and agreed that if the Supply Failure relates
     only to Hardware Products or Inks, but not both, the information to be
     released from escrow will be only that related to Hardware Products or
     Inks, as appropriate.

     8.6.2  Customer may use escrowed information only to produce or have
produced those Hardware Products and Inks being supplied by Spectra to Customer
immediately prior to the occurrence of the condition giving rise to the release
of escrowed information, as such Hardware Products and Inks existed at the time
of the occurrence of the condition. In the event that a Supply Failure relates
to fewer than all of the models of Hardware Products being supplied by Spectra,
Customer may only manufacture or have manufactured those models of Hardware
Products Spectra failed to supply. Upon the occurrence of the condition in 8.5.a
above with respect to Inks, Spectra shall arrange for supply of Inks to Customer
by a third party at the request of Customer, at the same prices and terms at
which Spectra supplies Customer. Upon the occurrence of the condition in 8.5.b
above with respect to Inks, Customer shall be free to negotiate with Coates
Reprographics, Inc. for the supply of ink directly from Coates to Customer,
notwithstanding any previous agreement involving Spectra, Customer o r Coates
which would otherwise bar the supply of ink directly from Coates to Customer.
Any manufacture by or for Customer of Hardware Products o r Inks, or acquisition
of Inks from Coates, shall be subject to a royalty to Spectra of 10% of the
resale price by Customer of such Hardware Products or Inks.

     8.6.3  It is understood and agreed that Spectra does not have the right to
grant sublicenses for the manufacture of Printheads under its license with
Dataproducts and Hitachi-Koki and, accordingly, any exercise by or for Customer
of the above rights in the event of Supply Failure will require Customer to
obtain a license from them.

 
9.   DISTRIBUTION RIGHTS AND EXCLUSIVITY
     -----------------------------------

     9.1  Non-Exclusive Distribution Rights: Customer may sell, lease and u se
Customer Products and components for Customer Products bearing Customer's or its
Affiliates' marks, including without limitation worldwide marketing to any en d
user or remarketer, and use by Customer for the benefit of others; provided
however, that (i) Customer's distribution rights are limited to Customer's
Field, (ii) Customer may only resell Printheads as integral components of
Customer Products, or as spare parts for Customer Products, and (iii) Customer
may not knowingly sell Spectra Ink for use other than in conjunction with
Customer Products.

     9.1.1   For the purposes of this Agreement and subject to the Reserved
Market rights of other Spectra customers, Customer's Field shall be defined
as the worldwide market for equipment, systems, services and supplies for
full color printing for commercial printing applications.

          9.2   Exclusive Distribution Rights: Subject to Customer meeting its
obligations under this Agreement (and specifically the provisions of Section
9.2.1), and subject to the previously reserved market rights of other Spectra
customers defined in Schedule 3, Spectra hereby grants to Customer the exclusive
right to supply Customer Products into Customer's Exclusive Field.

          9.2.1 For the purposes of this Agreement and subject to the Reserved
Market rights of other Spectra customers, Customer's Exclusive Field shall be
defined as the worldwide market for equipment, systems, services and supplies
for add-on modules or subsystems for adding color to the fiber based, paper, and
paper-like output of the following production xerographic and electrographic
printing systems: IBM (3900), Xerox (4135, 4635, 4800, Docutek 135/90), Siemens
(2240), and substantially similar equipment of Delphax and Fujitsu (collectively
"the Exclusive OEM's"). Customer's Exclusive Field shall be effective during the
Exclusive Period which is defined as beginning on the Effective Date and ending
o n December 31, 2002, unless ending earlier in accordance with Section 9.2.2.
Customer's Exclusive Field shall extend (i) to the successors and assigns, if
any, of the Exclusive OEM'S, (ii) to products of the Exclusive OEM's which are
extensions of or replacement models to the models listed in this Section 9.2.1.,
and (iii) to new models of production xerographic and electrographic printing
systems of the Exclusive OEM'S, subject to Spectra's prior 

 
written approval, which approval shall not be unreasonably withheld.
Accordingly, Spectra shall not knowingly supply Printheads, Print Engines or
Inks to parties other than Customer in Customer's Exclusive Field during the
Exclusive Period.

          9.2.2  To maintain the exclusive rights under this Section 9.2,
Customer must (i) make the following scheduled payments, (ii) continue to
purchase Customer's requirements of Ink from Spectra, and (iii) purchase the
following amounts of Printheads and Inks at contract prices during the calendar
years:

     

Scheduled Payments:
- ------------------------
                                           
     January 8, 1996                          
     February 15, 1996                        
     April 1, 1996                            [*]
     July 1, 1996                             
     October 1, 1996                          
     January 1, 1997                          
     April 1, 1997                            
     July 1, 1997                             
     October 1, 1997                          
      
 
 
     
 
Minimum Volumes             Printheads:              Inks (Kilograms)
- ----------------            -----------              ---------------
                                               
     1996                    
     1997                    
     1998                 [*]                      [*]                    
     1999                                                                  
     2000                                                                  
     2001                    
     2002                    
      

     Customer shall have a cure period of 45 days after any calendar year-end to
make up any purchase deficiencies hereunder and a cure period of 15 days to make
up any payment deficiency hereunder.  In the event Customer fails to make a
    
[*] OMITTED INFORMATION SUBJECT TO PENDING CONFIDENTIAL TREATMENT REQUEST AND 
    FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION     



 
payment or payment, under Section 9.2.2, Spectra may terminate the exclusive
rights provided under Section 9.2.1 on forty-five days prior written notice if
Customer shall fail to cure such nonpayment within such forty-five day period:
but in the event of such termination, all other rights and obligations of the
parties under this Agreement shall remain unchanged.

9.2.3.  With respect to any payments received under this section 9.2, Spectra
agrees to use fifty percent (50%) of the such funds for development activities
on Spectra Products for use in Customer Products. It is understood that during
1995 and 1996, such activities shall be focused on modular carbon printhead
development (i.e. the 256 jet printhead family demonstrated to Customer
personnel); the development activities for 1997 shall be as mutually agreed upon
by the Parties.

     9.3  For so long as Customer makes the scheduled payments set forth in
Section 9.2.2. above and all royalty payments required under this Agreement,
Customer shall have the right, to the fullest extent within Spectra's rights,
(I) to purchase from Spectra ink jet products developed, manufactured and sold
by Spectra in the future, provided, however, that Customer may use such products
in Reserved Markets: and (ii) to the license granted Customer in Section 8.1
which shall include a license to Spectra Future System Technology, on the same
terms and subject to all of the conditions of the license set forth in Section
8.1, developed during the period Customer makes such payments. Thereafter
through the initial Term of this Agreement, Customer shall continue to have
rights to subsequent new products and the license in Section 8.1 shall continue
to include Spectra Future System Technology so long as Customer pays to Spectra
a fee of $250,000 at the beginning of each calendar quarter and is current in
all royalties due under this Agreement. In the event that Customer fails to make
a quarterly $250,000 payment after 1998 in accordance with this Section 9.3,
Customer's rights to participate in Spectra Future Systems Technology may be
terminated by Spectra on forty-five days prior written notice, subject to
Customer's right to cure such nonpayment within such forty-five day period; but
in the event of such termination, all other rights and obligations of the
parties under this Agreement shall remain unchanged, including but not limited
to the right to purchase Spectra Products other than those embodying Spectra
Future Systems Technology.

     9.4  To the extent Customer may directly or indirectly market Customer
Products, Spectra Products, or other items under this Agreement, Customer may do
so under any present or future Customer or Affiliate trademark or product

 
designation. Customer shall refer to any product so designated, in all Customer
sales proposals, advertising literature, and otherwise, as a Customer or
Affiliate product. Customer may ship those products in containers bearing the
Customer or Affiliate logo, class and serial number of the product, and all
other information or markings desired by Customer or required by law.

10.  CONFIDENTIALITY
     ---------------

     10.1  "Confidential Information" means all information  which one
party ("Discloser") discloses to the other party ("Recipient") during the term
of this Agreement: (I) in documents or other tangible materials clearly marked
"CONFIDENTIAL", or (ii) orally, or in any other intangible form, when first
disclosed to the Recipient, if at that time the Discloser tells the Recipient
that the information is confidential and if the Discloser describes the
information in writing or other tangible materials clearly marked "CONFIDENTIAL"
and delivers them to the Recipient within 10 calendar days after the information
is first disclosed to the Recipient. "Confidential Information" does not include
any information which the Recipient can show: (a) the Recipient knew at the time
o f disclosure, (b) the public knows or which is or becomes readily
ascertainable by the public, and through no wrongful act of the Recipient, (c)
the Recipient receives from a third party without breaching an obligation owed
to the Discloser, if the third party does not restrict the Recipient from
disclosing that information, (d) is independently developed by or for the
Recipient, the Discloser discloses to a third party without similar restrictions
on disclosure, or (e) is required to be disclosed by law, provided, however,
that in the event Recipient is ordered to disclose the Discloser's Confidential
Information pursuant to a judicial or governmental request, requirement or
order, Recipient shall immediately, and in any event prior to complying
therewith, notify the Discloser and take reasonable steps to assist Discloser in
contesting such request, requirement or order o r otherwise protecting
Discloser's rights, and Recipient may not disclose any Discloser Confidential
Information in response to any law, rule or regulation, including disclosure
rules of the Securities and Exchange Commission, without the Discloser's written
consent in each case, which consent shall not be unreasonably withheld or
delayed.

     10.2.  During the Term and for three years after the Term, the Recipient
shall use reasonable efforts to prevent the disclosure of any Confidential
Information to any other person, subject to Section 10.1. All materials
containing Confidential Information delivered by the Discloser under this
Agreement are and shall remain the property of the Discloser.  At the
Discloser's written request upon termination of the Recipient's right to possess
the Discloser's Confidential Information, the Recipient shall promptly return to
the Discloser, or destroy and

 
certify the destruction of, all those materials and any copies.

     10.3.  Except as this Agreement expressly provides, this Agreement does
not: (i) restrict either party from developing new products, improving existing
products, or marketing any new, improved, or existing products; or (ii) commit
either party to disclose any particular information or to develop, make, use,
buy, sell, or otherwise dispose of any existing or future product, or to favor 
or recommend any product or service of the other party.

     10.4.  This Agreement does not enlarge, diminish, or affect the rights and
obligations that either party may have or come to have under any other written
agreement they both sign, or, except as this Agreement expressly provides, with
respect to any patent or copyright of either party.  Except as this Agreement 
or such other written agreement specifically provides, there shall be no
restrictions on the use or disclosure of any information the parties exchange at
any time, in the past or in the future, other than restrictions that either
party may independently have a right to assert under the patent, copyright, or
mask work laws.

II.  INFRINGEMENT
     ------------

     11.1.  Spectra shall promptly investigate and defend at its expense all
claims that the manufacture, use, maintenance, sale or other disposition of any
Spectra Product infringes, induces the infringement of, or otherwise violates
any patent, copyright, mask work, trademark, trade secret, or proprietary or
other information of any third party, and Spectra shall pay and discharge all
judgments or decrees against Customer which result from those claims.  Spectra
may, with Customer's consent (which Customer shall not unreasonably withhold),
settle any such claim on terms of Spectra's choosing, if those terms do not
conflict with this Agreement; provided, however, that Spectra shall not be
obligated under this Section 11.1 to the extent (i) Customer fails to give
Spectra prompt notice of the claim, appropriate authority to settle or defend
it, or the information and assistance necessary to conduct the defense, or (ii)
the claims of infringement arise from or are based upon (A) Customer's or any
third party's enhancements, modifications, alteration or implementation of a
Spectra Product, or (B) the combination of a Spectra Product with any device
Spectra did not directly furnish to Customer.

 
     11.2.  If (i) a court, agency, or arbitrator having jurisdiction holds
that, or Spectra agrees in writing with any third party that, any Spectra
Product infringes a patent, copyright, mask work, or trademark or involves an
unlawful use of a third party's proprietary or other information, (ii) an
injunction issues against Customer's manufacturing, use, or marketing of a
Spectra Product, or (iii) in Spectra's opinion that Spectra Product is likely to
become the subject of an infringement claim, then Spectra shall at its expense
use reasonable efforts to: (x) obtain for Customer rights sufficient in scope to
allow Customer to continue to make, use, sell, and market that Spectra Product,
or (y) replace or modify that Spectra Product so that it becomes noninfringing.

     11.3.  Spectra shall not be liable under this Section 11 for any claim, and
Customer's rights under Section 11.2 shall not attach to a claim, to the extent
that claim is based on information, devices, or processed furnished by someone
other than Spectra.

12.  TERM AND TERMINATION: BANKRUPTCY
     --------------------------------

     12.1.  This Agreement is effective on and after the Effective Date and
shall expire seven years after the Effective Date, unless earlier terminated
pursuant to Section 12.2 below.  Customer shall have the right to renew this
Agreement for an additional period of seven years.  If Customer wishes to
exercise such right, it shall provide Spectra with written notice of such
exercise at least one year prior to the end of the initial term.

     12.2.  This Agreement may be terminated prior to its expiration if any of
the following occur:

            12.2.1.  Spectra and Customer may at any time agree in writing
to terminate this Agreement.

            12.2.2.  If Customer fails without cause to pay Spectra any
amount due Spectra, Spectra may terminate this Agreement if Customer does not
cure that failure within 45 days after Customer receives a written notice from
Spectra stating the facts on which Spectra based its determination that such a
failure occurred.

            12.2.3. If either party breaches a material obligation of this

 
Agreement, and such breach is not cured within 90 days after receipt of the
notice from the non-breaching party, the non-breaching party may terminate this
Agreement.

     12.3.  All financial obligations which had accrued but which were unpaid as
of the effective date of termination shall survive termination. All financial
obligations which would have accrued after the effective date of termination
shall terminate. All then-outstanding forecasts and Purchase Orders shall
terminate without liability or consequence to either party as of the effective
date of termination. All licenses granted to Customer hereunder shall terminate.
The license granted to Spectra in Section 8.1 shall survive termination.

13.  DISPUTES
     --------

     13.1.  Except for disputes concerning Spectra's obligations under Section
11.1, and except as otherwise provided in this Agreement, Customer and Spectra
shall settle by arbitration any controversy or claim between them arising
directly or indirectly under this Agreement, whether based on contract, tort,
fraud, misrepresentation, or other legal theory. The arbitration shall occur in
Massachusetts, under the then current rules and supervision of the American
Arbitration Association. If the dispute involves a claim for money in the amount
of $1,000,000 or less and does not involve any claims relating to ownership,
use, or disclosure of intellectual property (other than a claim of unlawful
ownership, use or disclosure of intellectual property arising solely from a
failure to pay a license fee or royalty), the arbitration shall be before a
single arbitrator whom Customer and Spectra shall select from a panel of persons
knowledgeable in business information and data processing systems; otherwise,
the arbitration shall b e before three arbitrators, one selected by Customer,
one selected by Spectra, and the third selected by the two arbitrators to
selected. The arbitrator or arbitrators shall not have the power to award
punitive or exemplary damages. The decision and award of the arbitrator or
arbitrators shall be final and binding and the award rendered may be entered in
any court having jurisdiction. Customer and Spectra shall each pay its own
attorney's fees associated with the arbitration, and shall pay the other costs
and expenses of the arbitration as the rules of t h e American Arbitration
Association provide.

     13.2.  Spectra and Customer may each petition a court of law for injunctive
relief to protect its respective intellectual property.

 
     13.3.  Connecticut law shall govern the interpretation and enforcement of
this Agreement, except that the Federal Arbitration Act shall govern the
interpretation and enforcement of Section 13.1. If one party files a court
action alleging claims subject to binding arbitration under Section 13.1, and
the other party successfully stays the court action or compels arbitration of
the claims, or both, the party filing the court action shall pay the other
party's costs and expenses, including attorneys' fees, of obtaining such stay or
compulsion.

     13.4.  Neither Customer nor Spectra may bring any action, regardless of
form, related to this Agreement, more than two years after the cause of action
accrues.

     13.5.  The duty to arbitrate under Section 13.1 extends to any director,
officer, employee, agent, subsidiary, or Affiliate making or defending any claim
which would otherwise be arbitrable.

     13.6.  Each part of this Section 13 is severable. A holding that any part
of this Section is unenforceable shall not affect the duty to arbitrate under
Section 13.1 or any other part of this section.

14.  MISCELLANEOUS
     -------------

     14.1.  EXCEPT TO THE EXTENT OF SPECTRA'S OBLIGATIONS UNDER SECTION 11 OF
THIS AGREEMENT, NEITHER SPECTRA NOR CUSTOMER SHALL BE LIABLE TO THE OTHER FOR
ANY SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION
LOST PROFITS) UNDER THIS AGREEMENT.

     14.2.  Spectra and Customer are contractors independent of one another.
Nothing in this Agreement is intended to or shall constitute either party as a n
agent, legal representative, partner, joint venture, franchisee, employee, or
servant of the other for any purpose. Neither party shall make any contract,
agreement, warranty, or representation on behalf of the other party, or incur
any debt or other obligation in the other party's name, or act in any manner
which has the effect of making that party the apparent agent of the other; and
neither party shall assume liability for, or be deemed liable as a result of,
any such action by the other party. Neither party shall be liable by reason of
any act or omission of the other party in the conduct of its business or for any
resulting claim or judgment, including 

 
without limitation those arising from oral or written statements the other party
makes in connection with its marketing efforts (other than statements made in
reliance on written information which the first party furnishes to the other
party).

     14.3.  Neither Spectra nor Customer may assign this Agreement or any of
their respective rights and obligations under this Agreement without the express
written consent of the other party before that assignment, except that either
party may without the other's prior consent assign this Agreement to a successor
in ownership of all or substantially all of its assets or the product line that
includes the Customer Products.  Any assignment under this Section 14.3 will not
relieve the assigning party of its outstanding financial obligations, if any,
incurred before the assignment.  This Agreement shall be finding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns.

     14.4.  A waiver of a default of any term of this Agreement shall not be
construed as a waiver of any later default of that provision or as a waiver of
the provision itself.  A party's performance after the other party's default
shall not be construed as a waiver of that default.

     14.5.  Each term of this Agreement is severable.  If a court, agency, or
arbitrator having jurisdiction determines that any term is invalid or
unenforceable under applicable law, that determination shall not affect the
other terms of this Agreement, which other terms shall continue to be enforced
as if the invalid or unenforceable provisions were omitted.

     14.6.  Except as this Agreement otherwise provides, no amendment to this
Agreement shall be binding unless agreed to in writing executed by Spectra and
Customer, and no approval, consent, or waiver shall be enforceable unless signed
by the granting party.  The pre-printed terms of any order (including without
limitation a Purchase Order), acknowledgment, or other form do not amend this
Agreement.  No document shall be deemed to amend this Agreement by implication.

     14.7.  This Agreement (including the attached Exhibits) states the complete
agreement between Spectra and Customer concerning this subject, and supersedes
all earlier oral and written communications between Spectra and Customer
concerning this subject.

 
          14.8.  All notices required or permitted under this Agreement and all
requests for approvals, consents, and waivers must be in writing and must be
delivered by a method providing for proof of delivery to the addresses listed
below:

In the case of Customer:

     Chief Executive Officer
     Accent Color Sciences, Inc.
     Riverview Square
     99 East River Drive
     East Hartford, CT 06108
     Fax Number:  860-290-4858

     with a copy to:

     Willard F. Pinney, Jr.
     Murtha, Cullina, Richter and Pinney
     CityPlace I - 185 Asylum Street
     Hartford, CT 06103-3469

     Fax Number:  860-240-6150

In the case of Spectra:

     Chief Executive Officer
     Spectra, Inc.
     Etna Road
     PO Box 68C
     Hanover, NH 03755
     facsimile:   (603) 643-5430

     with a copy to:

     Gregory E. Moore, Esq.
     Ropes & Gray
     One International Place
     Boston, MA 02110-2624

 
     facsimile:  (617) 951-7050

Any notice or request shall be deemed to have been given on the date of receipt.

Either party may change its address for the purposes of this Agreement by giving
the other party written notice of its new address.

14.9. All rights granted to Customer under this Agreement may exercised by any
Affiliate of Customer agreeing to be bound by this Agreement.


ACCEPTED BY:
SPECTRA, INC.                           ACCENT COLOR SCIENCES, INC.

By: /s/ Ronald F. Borelli               By: /s/ Richard J. Coburn


Printed: Ronald F. Borelli              Printed: Richard J. Coburn


Title: CEO                              Title: CEO


Date: January 22, 1996                  Date: January 8, 1996


 
                                                                      SCHEDULE 1
                                                                      ----------
                          PRICES FOR SPECTRA PRODUCTS
                          ---------------------------

                                   HARDWARE
                                   --------
     
 
                                                  THREE MONTH
PART NUMBER               DESCRIPTION              ORDER QTY          UNIT PRICE
- -----------               -----------             -----------         ----------
                                                              
IIDS961-631-080495     Commercial  printhead          [*]                 [*]   
                                                                 
                                                                 
                                                      [*]                 [*]  
OIIS-230-1-1-631-      Reservoir  assembly                        
080495                                                            
                                                                                
                                                                               
PR-200S-I-OUT-631-     Regular assembly                                        
080495                                                [*]                 [*]   
                                                                  
                                                                  
UM-014-631-080495      Umbilical ink tube             [*]                 [*]   
                                                                               
UM-015-631-080495      Umbilical ink tube             [*]                 [*]   
      

                                     INKS
                                     ----

Packaged Spectra Ink: Cyan. Yellow, & Magenta ink, packaged in the form of ink 
"pucks" in plastic bag:
     
 
        QUARTERLY/COLOR/KILOGRAM                  PRICE/KG
        ------------------------                  --------
                                                
           0 TO 2,000 KG                             [*]      
                                                                           
           2,000 to 10,000                           [*]             
                                                                     
           10,000 to 50,000                          [*]              
                                                                      
           50,000 to 1000,000                        [*]
      

Notes:
- ------
1. Volumes are per color per calendar quarter
2. Packaging is same as for wide format customer
3. Customer pays for ink molds, custom artwork, and any custom packaging
                                                 
[*] OMMITTED INFORMATION SUBJECT TO PENDING CONFIDENTIAL TREATMENT REQUEST
    AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION      

                                                 

 
                                                                      SCHEDULE 2
                                                                      ----------
                          ROYALTIES AND LICENSE FEES

                                    Part 1

    
                                      [*]      

    
[*]  OMITTED INFORMATION CONSISTING OF TWO (2) PAGES SUBJECT TO PENDING
CONFIDENTIAL TREATMENT REQUEST AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.     

 
                                                                      Schedule 3

                          RIGHTS RESERVED BY SPECTRA
                              TO OTHER CUSTOMERS

                                     [ * ]

    
[ * ]  OMITTED INFORMATION CONSISTING OF THREE (3) PAGES SUBJECT TO PENDING
CONFIDENTIAL TREATMENT REQUEST AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.