Exhibit 10.59
 
AMENDMENT NO. 3
TO THE
POSTSCRIPT SOFTWARE DEVELOPMENT LICENSE
AND SUBLICENSE AGREEMENT
BETWEEN
ADOBE SYSTEMS INCORPORATED
AND
PEERLESS SYSTEMS CORPORATION
 
Effective Date: October 25, 2002
 
This Amendment No. 3 (the “Amendment”) to the PostScript Software Development
License and Sublicense Agreement dated July 23, 1999 (the “Agreement”) is
between Adobe Systems Incorporated, a Delaware corporation having a place of
business at 345 Park Avenue, San Jose, CA 95110 (“Adobe”) and Peerless Systems
Corporation, a Delaware corporation, having a place of business at 2381
Rosecrans Avenue, El Segundo, California 90245 (“Peerless”).
 
WHEREAS, the purpose of this Amendment to the Agreement is to allow Peerless to
sublicense to an OEM Customer only such rights as are required to enable such
OEM Customer to reproduce and distribute Licensed Systems containing Adobe
Information that have been developed by Peerless for OEM Customer under the
terms of the Agreement.
 
NOW, THEREFORE, the parties agree as follows:
 
1.
 
Paragraph 1.10 (“Peerless OEM Agreement”) is amended to read in its entirety as
follows:

 
“1.10 Peerless OEM Agreement.    “Peerless OEM Agreement” means a development
and/or license Agreement entered into between Peerless and its OEM Customer
regarding the development of Revised Object by Peerless for the benefit of the
OEM Customer and whereby Peerless sublicenses to such OEM Customer the right to
use and distribute, but not modify (except as expressly set forth herein) the
Revised Object as part of a Licensed System. Each Peerless OEM Agreement must
contain the minimum terms and conditions set forth in EXHIBIT B (“Minimum Terms
of Peerless OEM Agreement”).
 
2.
 
Paragraph 2.2 (“Adobe Information Sublicenses”) is amended to read in its
entirety as follows:

 
“2.2 Adobe Information Sublicenses.    Subject to Peerless’ compliance with the
terms of this Agreement and the limitations set forth in Paragraph 2.2.8
(“Limitation on Sublicensing”), and provided that Peerless has executed a
Peerless OEM Agreement containing terms substantially equivalent to each of the
minimum terms listed in EXHIBIT B (“Minimum Terms of Peerless OEM Agreements”)
with each OEM Customer receiving Adobe Information, Adobe hereby grants to
Peerless a non-exclusive,
 

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non-transferable, royalty-bearing license to further sublicense the rights
enumerated in Paragraph 2.2.1 (“Revised Object License”) through Paragraph 2.2.9
(“Demonstration Program License”) below to such OEM Customers. Such sublicense
rights shall be limited to a subset of the Adobe Information and Adobe Support
Information, as specified in an SDK Appendix or Licensed System Appendix, and
Peerless’ sublicensing of such rights is contingent upon Peerless and its OEM
Customer entering into the applicable SDK Appendix or Licensed System Appendix.
Notwithstanding the above requirement, Peerless and an OEM Customer receiving
only reproduction and distribution rights, as described in Paragraph 2.2.10
(“Sublicensing of Reproduction and Distribution Rights Only”) below, shall enter
into a relevant Licensed System Appendix and not into a SDK Appendix. However,
Peerless is not hereby precluded from entering into an internal use, site
license allowing access to a subset of Adobe Information on an interim basis
pending execution of a relevant Peerless OEM Agreement in accordance with the
provisions in Paragraph 2.3 (“Use of Letter of Agreement”). Peerless shall not
grant its OEM Customers any rights to make modifications to the Adobe
information except as expressly provided for in Paragraph 2.2.1 (“Revised Object
License”) through Paragraph 2.2.7 (“Trademark License”) and Paragraph 2.2.9
(“Demonstration Program License”) below, and if the OEM Customer has
reproduction and distribution rights only in accordance with Paragraph 2.2.10
below, Peerless shall prohibit such OEM Customer from making any modifications
to Adobe Information. Further, Peerless is prohibited from sublicensing,
disclosing, transferring or providing access to Adobe Core Source to an OEM
Customer under any conditions. An OEM Customer’s right to distribute the Adobe
Information for any particular product under the sublicense rights described
herein is contingent upon the certification of the applicable Licensed System in
accordance with the requirements set forth in Paragraph 5.2 (“Testing and
Certification of Revised Object and Proposed Designated Output Devices”) herein.
A failure by Peerless to sublicense rights to Adobe Information in accordance
with the provisions in this Paragraph 2.2 (“Adobe Information Sublicenses”) and
Paragraph 6 (“Proprietary Rights and Legends”) shall constitute a material
breach by Peerless and Peerless shall be liable to Adobe for any damages or
losses arising out of such noncompliance.”
 
3.
 
A new Paragraph 2.2.10 (“Sublicensing of Reproduction and Distribution Rights
Only”) shall bedded hereto to read in its entirety as follows:

 
“2.2.10 Sublicensing of Reproduction and Distribution Rights Only.    Subject to
Peerless’ compliance with the terms of this Agreement, including but not limited
to this Paragraph 2.2.10, Peerless may choose to sublicense only those rights
enumerated in Paragraphs 2.2.1 – 2.2.8 that pertain to reproduction and
distribution of Adobe Information, to an OEM Customer under a Peerless OEM
Agreement containing terms substantially equivalent to the minimum terms listed
in EXHIBIT B (“Minimum Terms of Peerless OEM Agreements”) (but excluding those
requirements in Paragraphs 4.9 and 5.3 of EXHIBIT B which shall not apply.
Furthermore, Paragraph 3.1 of EXHIBIT B shall not apply provided the OEM
Customer does not have access to Adobe Information in source code form or access
to development tools such as plug-ins and localization kits described in
Paragraph 2.3 of EXHIBIT B. And, in addition, notwithstanding Paragraph 3.2 of
the Agreement, neither Peerless nor its OEM Customers are required to supply
Adobe with PPD files and, therefore, Paragraph 3.2 of EXHIBIT B shall not apply
unless

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Peerless or its OEM Customer voluntarily supplies PPD files to Adobe). Peerless
shall do all of the development and product testing through certification of the
OEM Customer’s Licensed System. Once the OEM Customer’s Licensed System has been
certified in accordance with the requirements set forth in Paragraph 5.2
(“Testing and Certification of Revised Object and Proposed Designated Output
Devices”), Peerless may supply the OEM Customer with Golden Master versions (as
defined below) in object code form of the Adobe Information for reproduction and
distribution as part of a Licensed System in accordance with the terms of this
Agreement. The term “Golden Master” shall mean a master tape or a compact disc
copy of the applicable Adobe Information; i.e., Revised Object, Font Programs,
Host Software, supplied by Peerless from which multiple copies of the applicable
Adobe Information may be made by the OEM Customer. Peerless shall require the
OEM Customer to faithfully reproduce all copies from the applicable Golden
Master and not to alter or replace any portion of, or alter the functionality of
any portion of the Adobe Information developed by Peerless and supplied by
Peerless to the OEM Customer. Peerless shall prohibit an OEM Customer from
granting a third party, including but not limited to an OEM Remarketer Customer,
access to Golden Masters for any purpose. Peerless may not sublicense or permit
such OEM Customer with reproduction and distribution rights only to have access
to any portion of the Adobe Information in source code form or to the Adobe
Header Files, Adobe Development Tools or Adobe Certification Test Suite or to a
Peerless SDK.”
 
4.
 
Paragraph 6 (“Proprietary Rights and Legends”) is amended to read in its
entirety as follows:

 
“6.    PROPRIETARY RIGHTS AND LEGENDS.  Adobe and its suppliers are the sole and
exclusive owners of all rights, title and interest, including all trademarks,
copyrights, patents, trade names, trade secrets, and other intellectual property
rights to the Adobe Information. Except for the rights expressly enumerated
herein, neither Peerless nor its OEM Customers are granted any rights to
patents, copyrights, trade secrets, trade names, trademarks (whether or not
registered), or any other rights, franchises or licenses with respect to the
Adobe Information, and Peerless agrees, and shall require its OEM Customers to
agree, that it will not exceed the scope of the licenses granted herein.
Peerless agrees, and shall require its OEM Customers to agree to protect the
Adobe Support Information in accordance with EXHIBIT N-1 (“Secure Procedures for
Handling Adobe Support Information”), or if the OEM Customer is granted
reproduction and distribution rights only in accordance with Paragraph 2.2.10
(“Sublicensing of Reproduction and Distribution Rights Only”), Peerless shall
require such OEM Customer to agree to protect the Adobe Information in
accordance with EXHIBIT N-3 (“Minimum Terms for Protecting Adobe Information”).
Peerless may permit a Third Party Developer to have access to and use of the
Adobe Support Information (but excluding any access to Adobe Core Source) at a
Secondary Development Site, subject to Peerless requiring the Third Party
Developer to agree to protect the Adobe Support Information in accordance with
EXHIBIT N-1 and to comply with the requirements set forth in Paragraph 2.11
(“Third Party Developers”) of the Agreement. In addition, Peerless agrees that
it shall permit the handling, use and storage of Adobe Restricted Information,
including Adobe Core Source, only by its Authorized Employees and only at a
Primary Development Site(s) and it shall protect such Adobe Restricted
Information in accordance with EXHIBIT

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N-2 (“Additional Secure Procedures for Handling Adobe Support Information”).
Peerless specifically acknowledges and agrees that other than as expressly set
forth in Paragraph 2 (“Scope of Peerless License”), Peerless shall not modify or
allow a Third Party Developer, OEM Customer or any other party to modify the
Adobe Information. A failure by Peerless to protect Adobe Support Information in
accordance with the provisions of this Paragraph 6 (“Proprietary Rights and
Legends”), EXHIBIT N-1 (“Secure Procedures for Handling Adobe Support
Information”), EXHIBIT N-2 (“Additional Secure Procedures for Handling Adobe
Information”) and EXHIBIT N-3 (“Minimum Terms for Protecting Adobe Information”)
shall constitute a material breach by Peerless and Peerless shall be liable to
Adobe for any damages or losses arising out of such non-compliance.”
 
5.
 
Paragraph 12.9.2 (“Safeguarding of Proprietary Rights”) is amended to read in
its entirety as follows:

 
“12.9.2 Safeguarding of Proprietary Rights.    Peerless, its Third Party
Developers and its OEM Customers shall continue to be responsible for
safeguarding the proprietary rights of Adobe and Adobe’s suppliers in accordance
with this Agreement, including Paragraph 6 (“Proprietary Rights and Legends”)
and EXHIBIT N-1 (“Secure Procedures for Handling Adobe Support Information”),
EXHIBIT N-2 (“Additional Secure Procedures for Handling Adobe Restricted
Information”) and EXHIBIT N-3 (“Minimum Terms for Protecting Adobe
Information”), after such termination or expiration. Paragraph 6 (“Proprietary
Rights and Legends”), Paragraph 8 (“Payments”), Paragraph 9 (“Performance
Warranty”), Paragraph 10 (“Peerless Support”), Paragraph 11 (“Proprietary Rights
Indemnity”), Paragraph 12 (“Term and Termination”), Paragraph 13 (“Limitation of
Liability”), and Paragraph 14 (“General”) shall survive any expiration or
termination of this Agreement.”
 
6.
 
Subparagraph 1.3.5(ii) of EXHIBIT B (“Minimum Terms of Peerless OEM Agreement”)
is amended to read in its entirety as follows:

 
“1.3.5(ii) OEM Customer shall continue to be responsible for safeguarding the
proprietary rights of Adobe and Adobe’s suppliers in accordance with this
Agreement, including Paragraph 4 (“Protection of Proprietary Information”) and
EXHIBIT N-1 (“Secure Procedures for Handling Adobe Support Information”) and, in
the case of an OEM Customer covered by Paragraph 2.2.10 (“Sublicensing of
Reproduction and Distribution Rights only”), EXHIBIT N-3 (“Minimum Terms for
Protecting Adobe Information”) of the Adobe and Peerless Agreement, after such
termination or expiration.”
 
7.
 
Subparagraph 2.2.2 of EXHIBIT B (“Minimum Terms of Peerless OEM Agreement”) is
amended to read in its entirety as follows:

 
“2.2.2 Adobe-supplied Wingdings® Typeface Requirements.    OEM Customer shall
reproduce, have reproduced and distribute a Font Program for the Wingdings®
Typeface supplied by Adobe hereunder (the “Wingdings Font Program”) only in the
Adobe Compact Font Format (“CFF”) or TrueType Format and either (i) embedded in

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ROM or on a hard disk that is bundled with a Licensed System or (ii) as part of
any other Adobe provided host-based component of a Licensed System. In the event
that the Wingdings Font Program is provided to OEM Customer in CFF, OEM Customer
shall treat the fact as Adobe Support Information pursuant to Paragraph 4.2 of
EXHIBIT N-1 (“Secure Procedures for Handling Adobe Support Information”) or as
Adobe Information pursuant to Paragraph 3 of EXHIBIT N-3 (“Minimum Terms for
Protecting Adobe Information”), as applicable, and OEM Customer shall not
disclose such fact to its distributors, resellers or End Users, provided however
that OEM Customer may disclose or advertise that the Wingdings Font Program is
in a compressed format, where applicable.”
 
8.
 
Paragraph 4.1 of EXHIBIT B (“Minimum Terms of Peerless OEM Agreement”) is
amended to read in its entirety as follows:

 
“4.1 Adobe Information and Adobe Support Information.    Adobe and its suppliers
are the sole and exclusive owners of all rights, title and interest, including
all trademarks, copyrights, patents, trade names, trade secrets, and other
intellectual property rights to the Adobe Information. Except for the rights
expressly enumerated herein, OEM Customer is not granted any rights to patents,
copyrights, trade secrets, trade names, trademarks (whether or not registered),
or any other rights, franchises or licenses with respect to the Adobe
Information, and OEM Customer agrees that it will not exceed the scope of the
licenses granted herein. OEM Customer agrees to protect the Adobe Support
Information in accordance with EXHIBIT N- I (“Secure Procedures for Handling
Adobe Support Information”) of the Adobe and Peerless Agreement, or if the OEM
Customer is granted reproduction and distribution rights only in accordance with
Paragraph 2.2.10 (“Sublicensing of Reproduction and Distribution Rights Only”)
of the Adobe and Peerless Agreement, the OEM Customer agrees to protect the
Adobe Information in accordance with EXHIBIT N-3 (“Minimum Terms for Protecting
Adobe Information”) of the Adobe and Peerless Agreement, attached hereto and
incorporated herein by reference. In addition, OEM Customer specifically
acknowledges and agrees that other than as expressly set forth herein, OEM
Customer shall not modify the Adobe Information, and shall in no instance
attempt to modify Adobe Information provided solely in object code form. OEM
Customer agrees that it will not attempt to alter, disassemble, decrypt, reverse
engineer or decompile the Adobe Information that is provided solely in object
code form. A failure by OEM Customer to protect Adobe Information in accordance
with the provisions of Paragraph 4 (“Protection of Proprietary Information”)
shall constitute a material breach by OEM Customer and OEM Customer shall be
liable to Adobe for any damages or losses arising out of such non-compliance.”
 
9.
 
The footnote at the end of EXHIBIT D (“Extended Roman Font Program Set”) is
amended to read in its entirety as follows:

 
“*Peerless agrees that it, and will ensure that its OEM Customers, will
reproduce, have reproduced and distribute a Font Program for the Wingdings®
Typeface supplied by Adobe hereunder (the “Wingdings Font Program”) only in the
Adobe Compact Font Format (“CFF”) or TrueType Format and either (i) embedded in
ROM or on a hard disk that is bundled with a Licensed System or (ii) as part of
any other Adobe provided host-

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based component of a Licensed System. In the event that the Wingdings Font
Program is provided to Peerless in CFF, Peerless shall treat the fact as Adobe
Support Information pursuant to Paragraph 4.2 of EXHIBIT N- 1 (“Secure
Procedures for Handling Adobe Support Information”) or as Adobe Information
pursuant to Paragraph 3 of EXHIBIT N-3 (“Minimum Terms for Protecting Adobe
Information”), as applicable, and Peerless shall ensure that its OEM Customers
shall do the same. Peerless shall, and shall ensure that its OEM Customers
shall, not disclose such fact to its distributors, resellers or End Users,
provided however that Peerless and its OEM Customers may disclose or advertise
that the Wingdings Font Program is in a compressed format, where applicable.”
 
10.
 
A new EXHIBIT N-3 (“Minimum Terms for Protecting Adobe Information”) is added to
read as attached hereto.

 
11.
 
All other terms and conditions of the Agreement shall remain in full force and
effect.

 
IN WITNESS WHEREOF, each of Adobe and Peerless has executed this Amendment No. 3
to the PostScript Software Development License and Sublicense Agreement by its
duly authorized officer.
 
Adobe:
 
     
Peerless:
ADOBE SYSTEMS INCORPORATED
     
PEERLESS SYSTEMS CORPORATION
By:
 
/s/    Jim Stephens        

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By:
 
/s/    Howard J. Nellor        

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Print
Name:  Jim Stephens
 
Title:  SVP Worldwide Sales and Field Operations
 
Date:  November 4, 2002
         
Print
Name:  Howard J. Nellor
 
Title:  President and Chief Executive Officer
 
Date:  October 25, 2002

 

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EXHIBIT N-3
 
MINIMUM TERMS FOR PROTECTING ADOBE INFORMATION
 
1.    AUTHORIZED PERSONNEL.    OEM agrees that it will disclose the Adobe
Information only to authorized employees and authorized contractors who (i)
require access thereto for a purpose authorized by this Agreement, (ii) have
signed an employee or contractor agreement in which such employee or contractor
agrees to protect third party confidential information and (iii) agree in
writing to take all reasonable precautions to prevent disclosure of Adobe
Information to a party not authorized by OEM Customer to receive such Adobe
Information. OEM Customer agrees that any breach by any authorized employees and
authorized contractors of their obligations under such confidentiality
agreements shall also constitute a breach by OEM Customer hereunder.
 
2.    ADOBE INFORMATION.
 
2.1    OEM Customer shall ensure that all Adobe Information received from
Peerless and copies made thereof, will be properly marked or otherwise
appropriately identified as Adobe Information before being made available to
authorized employees and authorized contractors
 
2.2    OEM Customer shall ensure that the same degree of care is used to prevent
the unauthorized use, dissemination, or publication of the Adobe Information as
OEM Customer uses to protect its own confidential information of a like nature,
but in no event shall the safeguards for protecting such Adobe Information be
less than a reasonably prudent business would exercise under similar
circumstances. OEM Customer shall take prompt and appropriate action to prevent
unauthorized use or disclosure of Adobe Information.
 
2.3    OEM Customer shall instruct authorized employees and authorized
contractors not to copy Adobe Information on their own, and not to disclose
Adobe information to anyone not authorized to receive it.
 
2.4    Golden Master versions of the Adobe Information shall be handled, used,
and stored solely at OEM Customer-controlled facilities. OEM Customer may use
the Golden Master versions solely for the purpose of faithfully reproducing
copies of the Revised Object, Font Programs and Host Software, as applicable,
for distribution as part of a Licensed System under the Peerless OEM Agreement.
OEM Customer shall ensure that the Golden Masters supplied by OEM Customer shall
not be supplied to any third party.
 
2.5    OEM Customer agrees that it has no development rights in and to the Adobe
Information and it shall not alter or replace any potion of or alter the
functionality of any portion of the Adobe Information supplied by Peerless
hereunder.
 
3.    TRADE SECRETS.    OEM Customer agrees that those techniques, algorithms,
and processes contained in the Adobe Information which have been developed,
acquired, or licensed by Adobe, or any modification or extraction thereof,
constitute trade secrets of Adobe and/or its

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suppliers, and will be used by OEM Customer only in accordance with the terms of
this Agreement. In addition to the specific measures required herein, OEM
Customer agrees to take all measures reasonably required to protect the
proprietary rights of Adobe and its suppliers in the Adobe Information. The
Adobe Information is being supplied to OEM Customer solely in object code form
and OEM Customer agrees that it will not attempt to alter, disassemble, decrypt,
reverse engineer or decompile any portion of the Adobe Information. A failure by
OEM Customer to protect the proprietary rights of Adobe and its suppliers in the
Adobe Information, as required by the Peerless OEM Agreement, will be considered
a material breach of the Peerless OEM Agreement and OEM Customer shall be liable
to Adobe for any damages or losses arising out of such non-compliance.
 
4.    NO COMMINGLING OF TECHNOLOGY.    The terms of this Paragraph do not
preclude OEM Customer from developing a Clone Product; however, if OEM Customer
engages in such Clone Product development during the term of this Agreement, it
shall ensure that there is no use of the Adobe Information in the design and
development of Clone Products.

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