EL SEGUNDO, Calif., March 3, 2005 Peerless Systems Corporation, a provider of advanced imaging and networking controllers to the digital document market, today announced it has signed a Memorandum Of Understanding (MOU) with Kyocera Mita Corporation (Kyocera Mita) to provide non-exclusive engineering services and high-performance imaging technologies for use in a forthcoming line of Kyocera Mita printers and multi-function peripherals. Pursuant to the MOU, Kyocera Mita has agreed to pay Peerless an aggregate of $24 million, which will be paid in $2 million quarterly payments over the initial three-year term of the MOU with the first payment to be made no later than April 29, 2005. Peerless is also eligible for certain performance incentives and will be due license fees from Kyocera Mita for all Peerless and its third-party technologies that are incorporated into Kyocera Mita products. The MOU, which states that it is binding, is effective as of February 1, 2005, and extends to January 31, 2008. The MOU will automatically renew on an annual basis after January 31, 2008, unless terminated by either party. Howard Nellor, president and chief executive officer of Peerless, stated, "With this MOU, Kyocera Mita and Peerless intend to develop and deliver products based on Peerless' high-performance imaging technologies, including our new Sierra technologies. Kyocera Mita is one of the world's leading providers of digital imaging products and this is a very positive event for Peerless. I believe the MOU represents an endorsement of Peerless' strategies and efforts to develop leading-edge imaging systems. It is also an indication of the expanding demand for high-quality, fast and reliable black & white and color printers, copiers and multi-function products." "Peerless technologies and architectures can apply to a broad spectrum of current and future office workgroup products. I believe the engineering fees associated with the initial phase of this agreement will have a positive impact on our financial performance, as we currently have the engineering staff in place to handle this effort," Nellor added. "We are excited about commencing this long-term project and look forward to a lengthy, positive and very productive relationship with Kyocera Mita."