<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 8, 1997
REGISTRATION NO. 333-34531
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
KOFAX IMAGE PRODUCTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3577 33-0114967
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
3 JENNER STREET, IRVINE, CALIFORNIA 92618
(714) 727-1733
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DAVID S. SILVER, CHAIRMAN OF THE BOARD AND PRESIDENT
KOFAX IMAGE PRODUCTS, INC.
3 JENNER STREET
IRVINE, CALIFORNIA 92618
(714) 727-1733
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
K.C. SCHAAF, ESQ. LIOR O. NUCHI, ESQ.
CHRISTOPHER D. IVEY, ESQ. WILLIAM J. NEWELL, ESQ.
WILLIAM E. GARRETT, ESQ. DAWN L. JUDD, ESQ.
MARC G. ALCSER, ESQ. WENDY M. PIZARRO, ESQ.
STRADLING, YOCCA, CARLSON & RAUTH, MCCUTCHEN, DOYLE, BROWN & ENERSEN LLP
A PROFESSIONAL CORPORATION ONE EMBARCADERO CENTER, SUITE 200
660 NEWPORT CENTER DRIVE, SUITE 1600 2100 GENG ROAD
NEWPORT BEACH, CALIFORNIA 92660 PALO ALTO, CALIFORNIA 94303
(714) 725-4000 (415) 846-4000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the sale of the Common Stock being registered hereunder. All of the amounts
shown are estimates except for the SEC registration fee, the NASD filing fee and
the Nasdaq National Market application fee.
<TABLE>
<CAPTION>
TO BE PAID BY
THE COMPANY
--------------
<S> <C>
SEC registration fee............................................ $ 9,061
NASD filing fee................................................. 3,490
Nasdaq National Market application fee.......................... 30,736
Printing expenses............................................... 115,000
Legal fees and expenses......................................... 200,000
Accounting fees and expenses.................................... 130,000
Blue sky fees and expenses...................................... 10,000
Transfer agent and registrar fees............................... 4,000
Director and Officer liability insurance........................ 250,000
Miscellaneous................................................... 47,713
--------
Total................................................. $800,000
========
</TABLE>
The Company will bear the expenses of the Selling Stockholders in
connection with the registration of their shares, other than the underwriting
discounts and commissions.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by the Delaware General Corporation Law, the Restated
Certificate of Incorporation of the Company (Exhibit 3.1 hereto) eliminates the
liability of directors to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a directors, except to the extent otherwise
required by the Delaware General Corporation Law.
The Restated Certificate of Incorporation provides that the Company will
indemnify each person who was or is made a party to any proceeding by reason of
the fact that such person is or was a director or officer of the Company against
all expense, liability and loss reasonably incurred or suffered by such person
in connection therewith to the fullest extent authorized by the Delaware General
Corporation Law. The Company's Bylaws (Exhibit 3.3 hereto) provide for a similar
indemnity to directors and officers of the Company to the fullest extent
authorized by the Delaware General Corporation Law.
The Restated Certificate of Incorporation also gives the Company the
ability to enter into indemnification agreements with each of its directors and
officers. The Company has entered into indemnification agreement with each of
its directors and officers (Exhibit 10.8 hereto), which provide for the
indemnification of directors an officers of the Company against any an all
expenses, judgments, fines, penalties and amounts paid in settlement, to the
fullest extent permitted by law.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
The following is a summary of transactions by the Company during the last
three years preceding the date hereof involving sales of the Company's
securities that were not registered under the Securities Act:
From time to time since July 1, 1994, the Registrant issued an aggregate of
410,625 incentive stock options, nonqualified stock options and rights to
purchase Common Stock pursuant to the Registrant's Amended and Restated
Incentive Stock Option, Nonqualified Stock Option and Restricted Stock Purchase
II-1
<PAGE> 3
Plan and the 1996 Incentive Stock Option, Nonqualified Stock Option and
Restricted Stock Purchase Plan (collectively the "Plans") to officers, directors
and employees of the Registrant. During the period referred to above through
August 22, 1997, 40,987 options and rights to purchase granted pursuant to the
Plans were exercised for an aggregate exercise price of $35,250. Exemption from
the registration provisions of the Securities Act is claimed, with respect to
the grant of options referred to above, on the basis that the grant of options
did not involve a "sale" of securities and, therefore, registration thereof was
not required, and with respect to the exercise of options and rights to purchase
referred to above, on the basis that such transactions met the requirements of
Rule 701 as promulgated under Section 3(b) of the Securities Act.
In February 1996, Kofax Image Products, a California corporation ("Kofax
California"), merged with and into its wholly-owned subsidiary, Kofax Image
Products, Inc., a Delaware corporation ("Kofax Delaware"). In connection with
the merger, Kofax Delaware issued an aggregate of 1,307,069 shares of Common
Stock to the holders of common stock of Kofax California and an aggregate of
2,667,002 shares of preferred stock to the holders of preferred stock of Kofax
California, such that holders of Common Stock and preferred stock of Kofax
California received a proportionate interest in Kofax Delaware common stock and
preferred stock, respectively, without giving effect to the offering. The
issuances of securities will not be registered under the Securities Act due to
the exemption from registration thereunder provided by Section 3(a)(9) thereof.
II-2
<PAGE> 4
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- ----------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.(1)
3.1 Restated Certificate of Incorporation of the Company.(1)
3.2 Bylaws of the Company, as amended.(1)
3.3 Certificate of Amendment of Certificate of Incorporation of the Company.(1)
4.1 Specimen Certificate of Common Stock.(1)
5.1 Opinion of Stradling, Yocca, Carlson & Rauth, a Professional Corporation.(1)
10.1 Amended and Restated Incentive Stock Option, Nonqualified Stock Option and
Restricted Stock Purchase Plan (the "1992 Plan"), as amended on September 11,
1992.(1)
10.2 Form of Incentive Option Agreement pertaining to the 1992 Plan.(1)
10.3 Form of Nonqualified Option Agreement pertaining to the 1992 Plan.(1)
10.4 Form of Restricted Stock Agreement pertaining to the 1992 Plan.(1)
10.5 1996 Incentive Stock Option, Nonqualified Stock Option and Restricted Stock
Purchase Plan (the "1996 Plan").(1)
10.6 Form of Stock Option Agreement pertaining to the 1996 Plan.(1)
10.7 Intentionally omitted.
10.8 Kofax Image Products, Inc. 1997 Stock Option Plan for Non-Employee Directors (the
"Director Plan").(1)
10.9 Form of Stock Option Agreement pertaining to the Director Plan.(1)
10.10 Kofax Image Products, Inc. 1997 Employee Stock Purchase Plan.(1)
10.11 Form of Indemnification Agreement for Officers and Directors of the Company.(1)
10.12 Loan and Security Agreement, dated February 28, 1992, between the Company and
Silicon Valley Bank; Amendment to Loan Agreement, dated March 9, 1993; Amendment
to Loan and Security Agreement, dated October 10, 1994; Amendment to Loan and
Security Agreement, dated October 5, 1995; Amendment to Loan and Security
Agreement, dated January 26, 1996; and Amendment to Loan and Security Agreement,
dated October 31, 1996.(1)
10.13 First Restated Registration Rights Agreement, dated as of March 6, 1989, by and
among the Company and the Purchasers identified therein.(1)
10.14 Lease, dated March 31, 1988, between The Irvine Company, as Landlord, and the
Company, as Tenant, relating to the Company's Irvine, California offices; First
Amendment to Lease, dated March 7, 1990; Second Amendment to Lease, dated May 4,
1990; Third Amendment to Lease, dated August 22, 1991; Fourth Amendment to Lease,
dated March 15, 1994; and Fifth Amendment to Lease, dated September 25, 1996.(1)
10.15 Net Lease, dated February 24, 1989, between LaserData, Inc. and Vesper Properties
I Trust; Amendment 1, dated September 11, 1991; Amendment No. 2, dated August 31,
1994; and Amendment No. 3, dated July 24, 1997.(1)
10.16 Asset Purchase Agreement, dated December 30, 1995, between the Company and
LaserData, Inc.(1)
10.17 Distributor Agreement, dated August 16, 1990, between the Company and Law-Cypress
Distributing.
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- ----------------------------------------------------------------------------------
<C> <S>
10.18 Distributor Agreement, dated March 1, 1993, between the Company and Tech Data
Corporation; Modification Agreement, dated September 24, 1996; Letter Amendment,
dated October 16, 1996; Addendum, dated October 23, 1996.*
10.19 Distributor Agreement, dated July 25, 1990, between the Company and Cranel Inc.(1)
10.20 License Agreement, dated September 10, 1996, between the Company and CAERE
Corporation.*
10.21 Software License Agreement, dated October 1, 1993, between the Company and
Softbridge Inc.*
10.22 Software License Agreement, dated June 1, 1993, between the Company and Pixel
Translations, Inc.; Modification to Software License Agreement, dated July 1,
1995; and Modification to Software License Agreement, dated June 1, 1996.*
10.23 Services Contract, dated September 25, 1995, between the Company and Midcontinent
Business Systems, Inc.*
10.24 License Contract, dated July 1, 1996, between the Company and Midcontinent
Business Systems, Inc.*
10.25 NEST SDK Developer Product Distribution License Exhibit, dated July 31, 1996,
between the Company and Novell, Inc.*
10.26 Temporary Distribution License, dated October 17, 1996, between the Company and
Novell, Inc.(1)
11.1 Computation of pro forma net income (loss) per share.(1)
23.1 Consent of Stradling, Yocca, Carlson & Rauth (see Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
24.1 Power of Attorney (see page II-6).(1)
27.1 Financial Data Schedule.(1)
</TABLE>
- ---------------
(1) Previously filed.
* Registrant has sought confidential treatment pursuant to Rule 406 for a
portion of the referenced exhibit.
(b) FINANCIAL STATEMENT SCHEDULES
Schedule II -- Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted.
ITEM 17. UNDERTAKINGS
The Company hereby undertakes to provide to the Underwriters at the closing
specified in the Underwriting Agreement certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled
II-4
<PAGE> 6
by controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The Company hereby undertakes that:
For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of a
Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of the
Registration Statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 the Registrant
has duly caused this Amendment No. 4 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Irvine,
State of California, on the 8th day of October, 1997.
KOFAX IMAGE PRODUCTS, INC.
By: /s/ DAVID S. SILVER
------------------------------------
David S. Silver
President and Chief Executive
Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 3 to Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------ ----------------
<S> <C> <C>
/s/ DAVID S. SILVER Chairman of the Board, October 8, 1997
- --------------------------------------------- President, Chief Executive
David S. Silver Officer and Director
(Principal Executive Officer)
/s/ RONALD J. FIKERT* Vice President Finance, Chief October 8, 1997
- --------------------------------------------- Financial Officer and
Ronald J. Fikert Secretary (Principal Financial
and Principal Accounting
Officer)
/s/ DEAN A. HOUGH* Vice President, Engineering October 8, 1997
- --------------------------------------------- and Director
Dean A. Hough
/s/ ALEXANDER CILENTO* Director October 8, 1997
- ---------------------------------------------
Alexander Cilento
/s/ WILLIAM E. DROBISH* Director October 8, 1997
- ---------------------------------------------
William E. Drobish
/s/ CLIFFORD L. HAAS* Director October 8, 1997
- ---------------------------------------------
Clifford L. Haas
/s/ B. ALLEN LAY* Director October 8, 1997
- ---------------------------------------------
B. Allen Lay
/s/ DAVID C. SEIGLE* Director October 8, 1997
- ---------------------------------------------
David C. Seigle
</TABLE>
*By:/s/ DAVID S. SILVER
- ------------------------------------
David S. Silver,
as Attorney-In-Fact
II-6
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------ ------------
<C> <S> <C>
1.1 Form of Underwriting Agreement(1).......................................
3.1 Restated Certificate of Incorporation of the Company(1).................
3.2 Bylaws of the Company, as amended(1)....................................
3.3 Certificate of Amendment of Certificate of Incorporation of the
Company(1)..............................................................
4.1 Specimen Certificate of Common Stock(1).................................
5.1 Opinion of Stradling, Yocca, Carlson & Rauth, a Professional
Corporation(1)..........................................................
10.1 Amended and Restated Incentive Stock Option, Nonqualified Stock Option
and Restricted Stock Purchase Plan (the "1992 Plan"), as amended on
September 11, 1992(1)...................................................
10.2 Form of Incentive Option Agreement pertaining to the 1992 Plan(1).......
10.3 Form of Nonqualified Option Agreement pertaining to the 1992 Plan(1)....
10.4 Form of Restricted Stock Agreement pertaining to the 1992 Plan(1).......
10.5 1996 Incentive Stock Option, Nonqualified Stock Option and Restricted
Stock Purchase Plan (the "1996 Plan")(1)................................
10.6 Form of Stock Option Agreement pertaining to the 1996 Plan(1)...........
10.7 Intentionally omitted...................................................
10.8 Kofax Image Products, Inc. 1997 Stock Option Plan for Non-Employee
Directors (the "Director Plan")(1)......................................
10.9 Form of Stock Option Agreement pertaining to the Director Plan(1).......
10.10 Kofax Image Products, Inc. 1997 Employee Stock Purchase Plan(1).........
10.11 Form of Indemnification Agreement for Officers and Directors of the
Company(1)..............................................................
10.12 Loan and Security Agreement, dated February 28, 1992, between the
Company and Silicon Valley Bank; Amendment to Loan Agreement, dated
March 9, 1993; Amendment to Loan and Security Agreement, dated October
10, 1994; Amendment to Loan and Security Agreement, dated October 5,
1995; Amendment to Loan and Security Agreement, dated January 26, 1996;
and Amendment to Loan and Security Agreement, dated October 31,
1996(1).................................................................
10.13 First Restated Registration Rights Agreement, dated as of March 6, 1989,
by and among the Company and the Purchasers identified therein(1).......
10.14 Lease, dated March 31, 1988, between The Irvine Company, as Landlord,
and the Company, as Tenant, relating to the Company's Irvine, California
offices; First Amendment to Lease, dated March 7, 1990; Second Amendment
to Lease, dated May 4, 1990; Third Amendment to Lease, dated August 22,
1991; Fourth Amendment to Lease, dated March 15, 1994; and Fifth
Amendment to Lease, dated September 25, 1996(1).........................
10.15 Net Lease, dated February 24, 1989, between LaserData, Inc. and Vesper
Properties I Trust; Amendment 1, dated September 11, 1991; Amendment No.
2, dated August 31, 1994; and Amendment No. 3, dated July 24, 1997(1)...
10.16 Asset Purchase Agreement, dated December 30, 1995, between the Company
and LaserData, Inc.(1)..................................................
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ------- ------------------------------------------------------------------------ ------------
<C> <S> <C>
10.17 Distributor Agreement, dated August 16, 1990, between the Company and
Law-Cypress Distributing................................................
10.18 Distributor Agreement, dated March 1, 1993, between the Company and Tech
Data Corporation; Modification Agreement, dated September 24, 1996;
Letter Amendment, dated October 16, 1996; Addendum, dated October 23,
1996*...................................................................
10.19 Distributor Agreement, dated July 25, 1990, between the Company and
Cranel Inc.(1)..........................................................
10.20 License Agreement, dated September 10, 1996, between the Company and
CAERE Corporation*......................................................
10.21 Software License Agreement, dated October 1, 1993, between the Company
and Softbridge Inc.*....................................................
10.22 Software License Agreement, dated June 1, 1993, between the Company and
Pixel Translations, Inc.; Modification to Software License Agreement,
dated July 1, 1995; and Modification to Software License Agreement,
dated June 1, 1996*.....................................................
10.23 Services Contract, dated September 25, 1995, between the Company and
Midcontinent Business Systems, Inc.*....................................
10.24 License Contract, dated July 1, 1996, between the Company and
Midcontinent Business Systems, Inc.*....................................
10.25 NEST SDK Developer Product Distribution License Exhibit, dated July 31,
1996, between the Company and Novell, Inc.*.............................
10.26 Temporary Distribution License, dated October 17, 1996, between the
Company and Novell, Inc.(1).............................................
11.1 Computation of pro forma net income (loss) per share(1).................
23.1 Consent of Stradling, Yocca, Carlson & Rauth (see Exhibit 5.1)(1).......
23.2 Consent of Deloitte & Touche LLP(1).....................................
24.1 Power of Attorney (see page II-6)(1)....................................
27.1 Financial Data Schedule(1)..............................................
</TABLE>
- ---------------
(1) Previously filed.
* Registrant has sought confidential treatment pursuant to Rule 406 for a
portion of the referenced exhibit.
<PAGE> 1
EXHIBIT 10.17
DISTRIBUTOR AGREEMENT
---------------------
BETWEEN
KOFAX IMAGE PRODUCTS INC.,
3 JENNER STREET
IRVINE, CALIFORNIA 92718
TEL: (714)727-1733
FAX: (714) 727-3144
AND
DISTRIBUTOR: LAW-CYPRESS DISTRIBUTING
ADDRESS: 560 LINCOLN AVE.
SAN JOSE, CA 95126
COMMENCEMENT DATE:
<PAGE> 2
AGREEMENT
Kofax Image Products Inc., a California corporation, with offices at 3 Jenner
St., Irvine, CA 92718, hereinafter referred to as (Kofax),
and___________________________________,a_____________________corporation with
offices at___________________ herein after referred to as (Distributor), agree
that the following terms and conditions shall govern the sale and discounting
of Products as herein defined.
1. Definitions
1.1 Parties, Party
"Parties" means Kofax and Distributor, collectively. "Party"
means either Kofax or Distributor.
1.2 Agreement
Agreement means this Authorized Industrial Distributor
Agreement.
1.3 Products
The term "Product" or "Products" as used herein shall mean the
items listed on APPENDIX "A" hereto, as changed from time to
time in accordance with the provisions of this Agreement.
2. Appointment
2.1 Authorization
Kofax hereby authorizes Distributor to advertise, demonstrate,
market, promote, distribute, and solicit orders for Products on
a non-exclusive basis subject to all the terms and conditions of
this Agreement.
2.2 Use of Trademarks/Trade Names
During the term of this Agreement, Distributor is authorized to
use Kofax's trademarks, trade names and logos in connection with
Distributor's sale, advertisement and promotion of Products.
Upon termination of this Agreement, Distributor shall cease to
use any of such marks, names or logos and shall within a
reasonable time, remove any reference to Kofax from its
advertising and promotional material.
2
<PAGE> 3
2.3 Non Assignability
Distributor's rights under this Agreement are personal, and may
not be assigned without the prior written authorization of
Kofax. Such authorization may be withheld for any reason.
2.4 No Authority to Make Agreements
Distributor shall not have the authority to make any agreement
or incur any Liability on behalf of Kofax. The authority of the
Distributor on behalf of Kofax is limited to the rights granted
in Paragraph 2.1 above.
2.5 No Authority to Accept Orders
Distributor shall not have the authority to accept any orders
from customers on behalf of Kofax. All such orders are subject
to approval and acceptance by Kofax at its principal place of
business.
2.6 Reserved Rights
Kofax reserves the right to market the Products in any manner
and without limitation both within and outside of the Territory.
Kofax reserves the right to change the scope of the Territory by
giving Distributor 60 days prior written notice.
3. Commencement Date & Term
3.1 Commencement Date
This agreement shall be effective, after execution by both
parties, on the commencement date specified herein.
3.2 Term
The initial term of this agreement shall be for Twelve (12)
months from the commencement date.
3.3 Renewal
This Agreement will be renewed for subsequent one year terms,
unless (1) one Party gives written notice of termination to the
other party, at least 60 days prior to the end of the initial
term or any one of the renewal terms. The initial term, and any
subsequent term, shall be subject to termination under the
provisions of Section 9.
3
<PAGE> 4
4. Product Changes
4.1 Product Modifications
Kofax reserves the right to modify, alter, improve, delete or
change any and all of the Products covered by this Agreement.
However, this Agreement will cover the sales of Products as they
may be modified, altered, improved, or changed.
4.2 Product Deletions
Kofax may at its discretion, and upon prior notice to
Distributor, delete Products from Appendix "A" at any time. In
the event of any such deletions, Distributor may, within thirty
(30) days after receipt of such notice, return any or all of
such Products in its inventory which have been so deleted. Any
such Products not returned within the above allotted time
period, (thirty (30) days) may no longer be returned under any
circumstances or provisions of this Agreement, nor may they be
subsequently rotatable under the provisions of paragraph 7.11
below.
All Products returned in accordance with this provision must be
returned freight pre-paid and must be previously unsold, unused,
and in their original containers. Distributor shall receive full
credit for all such Products so returned. Any such credit shall
be in the amount of the actual net invoice price paid by
Distributor for the Products less any prior credits granted by
Kofax to Distributor.
4.3 Engineering Changes
Kofax shall, if possible, give Distributor at least thirty (30)
days advance written notice of all engineering changes that will
affect form, fit or function of any Products in Distributor's
Inventory. If these modifications will adversely affect the
sales of Distributor's inventory of such Products once the
engineering modifications are implemented, then Kofax shall
cooperate with Distributor to sell such affected inventory. If,
after the aforementioned efforts (but in no event later than one
hundred twenty [120] days after the first public announcement of
such modification or the first shipment of the modified Product,
whichever occurs first), any of the affected Product still
remains in Distributor's inventory, Kofax agrees at
Distributor's election to replace it with upgraded Products, or
to rework affected inventory for engineering changes affecting
form, fit or function.
4
<PAGE> 5
5. Responsibilities of Distributor
Distributor shall have the following responsibilities:
5.1 Marketing Efforts
To exert its best efforts to advertise, demonstrate, market,
promote, distribute, and solicit orders for the Products.
5.2 Promotional Cooperation
To cooperate with and assist Kofax in promotional and selling
campaigns including attending appropriate trade shows.
5.3 Promotional Materials
To distribute promotional material to Distributor's sales
offices on a timely basis.
5.4 Product Information
To procure from Kofax and furnish to customers additional
manuals and documentation as required to support Products.
5.5 Sales Reports
To provide Kofax, within 5 working days after the end of each
Distributor's sales month, a detailed sales activities report
for sales which shall include names and zip code addresses of
purchasers, model numbers, products codes, products and
quantities purchased and dollar amounts invoiced to said
purchasers.
5.6 Complaints
To promptly report to Kofax any complaint relating to sales of
Products.
5.7 Business Expenses
To pay all of the expenses of the operation of its business,
including salaries and expenses.
5.8 Inventory
Distributor shall maintain a reasonable inventory of Products in
order to satisfy Distributor's anticipated sales and where
applicable, support thereof.
5
<PAGE> 6
5.9 Initial Stocking Order
Distributor is required to purchase an initial stocking order
and to take delivery of this order no later than 30 days after
the Effective Date of this Agreement
5.10 Demonstration System
Distributor shall, at all times, maintain a working
demonstration system including scanner and laser printer.
5.11 Forecast
Distributor shall provide to Kofax a three month rolling
forecast for Products. This forecast is to be updated every
month.
5.12 Staffing and Training
Distributor will staff and train employees as required to
demonstrate, market, promote, distribute and support Kofax
Products.
5.13 Competitive Products
To provide written notification to Kofax prior to marketing and
distributing Products which compete directly with Products sold
by Kofax.
6. Responsibilities of Kofax
In consideration of Distributor's fulfillment, of the
responsibility set forth in Section 5;
6.1 Kofax shall consistently keep Distributor informed on a timely
basis of changes and innovations in performance,
serviceability, uses and applications of all Products.
6.2 Kofax will provide Distributor with initial familiarization and
standard sales training, including materials, at no charge, for
a reasonable number of Distributor's employees at a location of
Kofax's designation. All expenses of Distributor's employees
associated with such training, such as transportation, meals and
lodging, are the responsibility of Distributor. Additional
Standard technical training courses from Kofax's Training
Department are available to Distributor at standard locations,
rates and terms.
6.3 Kofax at its expense, will provide Distributor with two hundred
(200) data sheets or brochures for each Product with a part
number beginning with either KF or TK that is marketed by
Distributor ( per APPENDIX A). Distributor may purchase
additional copies of the above materials at the current costs.
6
<PAGE> 7
Kofax will also prepare duplicate transparencies of available
photography at the Distributor's request. Cost to the
Distributor will be the reproduction cost.
7. Product Orders
7.1 Product Pricing
The prices to be paid by Distributor for any Products ordered
pursuant to this Agreement are set forth in Appendix A.
7.2 Service Pricing
The prices to be paid by Distributor for any hardware updates or
repairs for Products that are out of Warranty are set forth in
Appendix B and there are no discounts on the prices.
7.3 Purchase Orders
Distributor shall submit a written purchase orders (telex or FAX
acceptable) for all Products, services, and other items ordered
from Kofax. Purchase orders shall specify Product model numbers,
quantity ordered, Product options, sales tax status, shipping
destination, carrier, and shipping dates. In order for the
purchase orders to be valid, Kofax shall acknowledge receipt and
acceptance of such purchase order. However, all orders for
Products by Distributor are subject to the terms and conditions
set forth in this Agreement. Any other terms or conditions
contained in any order from Distributor which add to or differ
from the terms of this Agreement shall be invalid.
7.4 Terms of Payment
Terms of payment for all Products, services and other items sold
to Distributor by Kofax are the net invoice amount due within 30
days from the date of each invoice submitted to Distributor by
Kofax. Kofax shall have the unqualified right to withhold
shipment of Products and services, including repair of Products
returned by Distributor, if any payments due to Kofax by
Distributor are delinquent.
7.5 Customer Billing
Distributor shall bill its customers directly. Distributor shall
be solely responsible for any losses arising from the failure of
any customer to pay the customer's account. Kofax shall have no
liability to Distributor for any bad debt arising from the sale
by Distributor of Products. Failure of Distributor to collect
shall in no way alter Distributor's payment obligations to
Kofax.
7
<PAGE> 8
7.6 Monies, Taxes, and Duties
All prices and fees described or contemplated under this
Agreement are in U.S. dollars. Prices quoted do not include
federal, state, or local taxes, fees, duties, or licenses. All
applicable taxes, fees, duties, and licenses will be added to
the sales price and shall be paid by Distributor, (but not
including any taxes on the income or net income of Kofax) unless
Distributor furnishes an exemption certificate satisfactory to
the appropriate authorities.
7.7 Delivery
Unless otherwise agreed upon in writing by Kofax, delivery of
the Products purchased by Distributor under this Agreement shall
be made directly to Distributor and shall be FOB Kofax's place
of manufacture. All stated delivery and shipment dates are
approximate only, and will be computed from the date
Distributor's purchase order is acknowledged. Delivery dates are
given to the best of Kofax's knowledge based on conditions
existing at the time of order acknowledgment. Failure to make
shipment or delivery as quoted does not constitute a cause for
damages of any kind. If Distributor agrees to take partial
shipments of any order, each such partial shipment shall be
deemed a separate sale, and payment for such separate shipments
shall become due in accordance with the provisions of paragraph
7.3. Distributor shall designate the freight carrier to be used.
7.8 Clear Title
Kofax warrants the title to all Products to be sold to
Distributor hereunder and warrants that such Products are not
subject to any security interests, liens or other encumbrances.
7.9 Risk of Loss
From and after delivery of the Products to a carrier at Kofax's
facility, Irvine, Ca. Distributor shall be responsible for the
entire risk of Loss, theft, damage to or destruction of the
Products.
7.10 Cancellation/Reschedule
Orders accepted by Kofax are subject to cancellation or
rescheduling only upon written notice by Distributor and in
accordance with the following provision.
8
<PAGE> 9
NOTICE RECEIVED BY KOFAX CANCELLATION CHARGES
Orders may only be rescheduled twice and may not be subsequently
canceled and must thereafter be rescheduled for shipment within
sixty (60) days of the originally scheduled shipping date.
Orders not rescheduled for shipment within the above time period
will be considered canceled and become subject to the above
cancellation charges.
Distributor may not cancel or reschedule any order or portion
thereof after shipment. In the event Distributor does not accept
delivery of the Products after shipment, or causes Kofax to
withhold shipment of the Products (i.e. for nonpayment or
credit-hold) for a Period of thirty (30) days after the
scheduled delivery date, such Products will be considered
canceled and Distributor shall pay the maximum cancellation
charges specified above.
7.11 Stock Rotation
Within 30 days after the end of each March, June, September and
December during the term of this Agreement, Distributor may
return Products to Kofax for restocking only after Kofax has
given a Return Material Authorization (RMA) number to
Distributor. Distributor may only return Products which have
been shipped to the Distributor within the prior 6 months.
Distributor may return any quantity of Products to Kofax for
credit provided the total credit shall not exceed 5% of the net
sales dollars invoiced by Kofax to the Distributor during the
said 6 month period. The credit to be issued in respect of each
such Product returned shall be the actual net invoiced charged
for same, less any prior credits granted by Kofax to
Distributor. All Products returned in accordance with this
provision must be returned freight pre-paid and must be
previously unsold, unused, and in their original containers. The
Distributor will place a non-cancelable order of equal value to
offset the credit issued at the time the RMA is requested. Any
demonstration unit or non-standard special order products
purchased by Distributor as "non-cancelable/non-returnable" do
not quality for stock rotation.
7.12 Price Protection
Kofax agrees to provide Distributor with inventory price
protection under the following terms and conditions:
9
<PAGE> 10
7.12.1 Distributor acknowledges and agrees that Kofax has the
right to raise or lower prices set forth in the product
Price schedule (APPENDIX A) from time to time by giving
at least 30 days prior written notice to Distributor of
such intent.
7.12.2 In the event that Kofax permanently decreases the price
of any Product, Distributor will be entitled to a credit
equal to the difference between the net price paid by
Distributor, less any prior credits granted by Kofax,
and the new decreased Distributor's price for the
Product multiplied by the quantity of such Product in
Distributor's inventory on the effective date of the
reduction.
Similar price adjustments will also be made on all such
effected Products then on order, or in transit to
Distributor on the effective date of such price
decrease. This section does not apply to Price
reductions made by Kofax where such reductions are
initiated for reasons other than permanently reducing
prices and/or are periodic and temporary in nature.
7.12.3 To obtain the credit described above, Distributor shall
submit to Kofax, not later than twenty (20) working days
after the effective date of such price decrease, a
Product inventory report as of the effective date.
7.12.4 Upon Kofax's verification of the Product inventory
report, Kofax will apply the said credit to
Distributor's account, as of the effective date of such
price decrease. Kofax reserves the right to perform a
physical inventory at each Distributor location.
7.12.5 In the event of a price increase, Distributor shall
continue to receive current pricing for (a) all Products
then on order and scheduled for delivery within thirty
(30) days from the effective date of the increase; and
(b) all new orders received within the thirty (30) day
notification period and scheduled for shipment before
the effective date of such price increase.
7.13 Offset
Kofax may, without notice, offset any overdue payments owed by
Distributor to Kofax against any amounts that may be owing by
Kofax to Distributor.
8. Termination
8.1 This Agreement may be terminated at any time, without cause, by
either party upon giving the other party at least sixty (60)
days prior written notice. Such termination shall be effective
on the date stated in said notice.
10
<PAGE> 11
8.2 This Agreement may be terminated immediately for cause by either
party in the event the other party (i) shall become insolvent or
bankrupt, or (ii) admits in writing its inability to pay its
debts as they mature, or (iii) makes an assignment for the
benefit of creditors, or (iv) ceases to function as a going
concern or to conduct its operations in the normal course of
business, or (v) fails to perform any of the obligations imposed
upon it under the terms of this Agreement so as to be in default
hereunder and fails to cure such default within thirty (30) days
after written notice thereof.
8.3 In the event Kofax terminates this Agreement, Kofax shall
repurchase, within one hundred and eighty (180) days of the
effective termination date, all unsold Products in Distributors
inventory. The repurchase price for such unsold Products shall
be the actual net invoice price paid by Distributor less any
prior credits granted by Kofax to Distributor. All Products to
be repurchased pursuant to this paragraph 9.3 must be in unused,
factory-shipped condition and must be returned in original
cartons.
8.4 In the event Distributor terminates this Agreement, Kofax shall
repurchase, within one hundred and eighty (180) days of the
effective date, all unsold Products in Distributors inventory.
The repurchase price for such unsold Products shall be the
actual net invoice price paid by Distributor less a twenty
percent 20% restocking charge, and less any prior credits
granted by Kofax to Distributor. All Products to be repurchased
pursuant to this paragraph 9.4 must be in unused,
factory-shipped condition and must be returned in the original
cartons.
8.5 Continued Support and Pricing
If Kofax terminates this Agreement other than for the default of
Distributor, Distributor shall be eligible to receive support
and pricing as specified in this Agreement for a period of 60
days following the date on which the termination becomes
effective, to the extent such support and pricing are for the
purpose of consummating sales proposals which were in effect on
the effective date of termination. All orders subsequent to
termination, shall be on a prepaid basis.
8.6 Accrued Balances
Within 30 days after any termination of this Agreement,
Distributor must pay all outstanding account balances.
8.7 Remedies Not Limited
Neither the of this Agreement, nor the waiver of any right to
terminate under this Agreement, shall limit any other remedies
which Kofax may have for a default or breach by Distributor of
this Agreement or any provisions thereof.
11
<PAGE> 12
9. Warranty
Kofax warrants the Products in accordance with its standard
warranty terms for each particular product as set forth in
Appendix B. Distributor is authorized to pass this warranty
through to Distributor's customers.
This warranty period shall commence upon delivery of the
Products by Kofax to the Distributor and shall continue for
either the length of the warranty period plus three months
(shelf life) or the actual length of the warranty period
following delivery by Distributor to its end-user customer,
whichever occurs first.
10. Defective Products
Notwithstanding any other provision of this Agreement or of any
APPENDIX hereto, Distributor may return for full credit any and
all products found to be defective upon delivery, or within ten
(10) days thereafter, provided, however, that any such defective
Products are returned to Kofax, freight collect, within thirty
(30) days of the discovery of the defect. However, prior to any
Products being returned to Kofax, Distributor must obtain a
Return Material Authorization (RMA) Number from Kofax and Place
it on the outside of the carton containing the defective
Product.
10.1 In the event of such a return, Kofax shall provide Distributor
with a Return Material Authorization number, the location to
which Distributor shall return the Product or item, and the
method of transportation. In no event will Kofax accept any
returned part or Products which does not have a valid Return
Material Authorization number, nor will Kofax accept or pay for
any excess charges, (duties, freight, or taxes) which become due
in the event a returned item has been shipped in a manner not
designated by Kofax.
11. Limitation on Cause of Action
The Parties agree that any suit or other legal action or any
arbitration relating in any way to this Agreement or to Products
must be filed or officially commenced by party making a claim no
later that 2 years after the cause of the claim first
12. Confidentiality
If either party hereto receives from the other party written
information which is marked "Confidential" and/or "Proprietary,"
the receiving party agrees not to use such information except in
the performance of this Agreement, and to treat such information
in the same manner as it treats its own confidential
information. The obligation to keep information confidential
shall not apply to any such information that has been disclosed
in publicly available sources; is,
12
<PAGE> 13
through no fault of the party receiving the confidential
information, hereafter disclosed in a publicly available source;
is in the rightful possession of the party receiving the
confidential information without an obligation of
confidentiality; or is required to be disclosed by operation of
law. Except as otherwise provided herein, the obligation not to
disclose shall be for a period of one year after the termination
of this Agreement.
13. Compliance with Law
Distributor shall comply with all applicable Laws, statutes, and
regulations relating to the sale and distribution of Products,
and the performance of Distributor's duties and obligations
under this Agreement. In particular, Distributor agrees not to
sell any of the Products in any country or territory prohibited
by applicable U.S. laws, and agrees to obtain from its customers
representations that they will not resell, transfer, or assign
any of the Products to any such prohibited countries or
territories.
14. Patent/Copyright Indemnification
Kofax shall defend any suit or proceeding brought against
Purchaser based on a claim of a third party that the Product(s),
or any part thereof, furnished by Kofax constitutes an
infringement of any patent of the U.S., provided that Kofax is
notified promptly in writing and given Authority, information
and assistance (at Kofax's expense) for the defense of such a
suit or proceeding, and Kofax will pay all damages and costs
awarded against Purchaser. In case the Product(s) furnished by
Kofax, or any part thereof, is enjoined, Kofax shall, at its own
expense and option (i) procure for Purchaser the right to
continue using the Product(s), (ii) replace the same with
non-infringing Product(s) (iii) modify the Product(s) so it
becomes non-infringing, or (iv) grant the Purchaser 1 credit,
for such equipment in accordance with the then applicable Kofax
depreciation policy and accept its return. Kofax shall not be
liable to Purchaser hereunder if the patent infringement or
claim thereof is based upon the use of the Product in connection
with other Products not delivered by Kofax, or in a manner for
which the Kofax Product(s) was not designed, or where the
Product(s) was modified by or for the Purchaser in a manner to
become infringing.
IN NO EVENT SHALL KOFAX BE LIABLE TO DISTRIBUTOR UNDER THIS
PARAGRAPH FOR CONSEQUENTIAL OR SPECIAL DAMAGES EXCEPT WHERE A
THIRD PARTY OBTAINS SUCH DAMAGES AGAINST DISTRIBUTOR. EXCEPT AS
EXPRESSLY SET FORTH HEREIN, KOFAX SHALL HAVE NO OTHER LIABILITY
OR OBLIGATION TO DISTRIBUTOR WITH RESPECT TO PATENT OR COPYRIGHT
INFRINGEMENT MATTERS.
13
<PAGE> 14
15. General Indemnification
15.1 Kofax and Distributor each agrees to indemnify and hold the
other harmless from and against any and all claims, damages and
liabilities asserted by any person or entity resulting directly
from:
(i) Any breach by it, or by any of its employees or agents,
of this Agreement or any of its warranties,
representations, covenants or obligations as provided
for in this Agreement.
(ii) Any negligent act, affirmative act of omission to act
by it or any of its employees or agents.
Such indemnification shall include the payment of all
reasonable attorneys' fees and other costs incurred by
the party seeking indemnification in defending such
claims.
15.2 Notwithstanding anything to the contrary in this Agreement or
the Exhibits or Appendices hereto, in no event will either party
be liable to the other for (i) special, indirect or
consequential damages or (ii) any damages whatsoever resulting
from loss of use, data or profits, arising out of or in
connection with this Agreement, whether in an action of contract
or tort including negligence.
15.3 Arbitration
All disputes concerning the terms and conditions of this
Agreement and involving less than $25,000 shall be subject to
expedited binding arbitration outside of the American
Arbitration Association ("AAA") before any attorney or expert
who is knowledgeable and experienced in the data processing
equipment and services field and who is selected by mutual
agreement of the Parties. A Party shall commence arbitration by
DELIVERING written notice to the other party. Where the parties
cannot agree on an attorney as arbitrator or fail to act within
30 days after notice or a commencement of arbitration is
delivered, arbitration shall be by the AAA, subject to the rules
of the AAA then in effect. The AAA shall decide, as required, on
the number and identity of the arbitrators and the place of the
arbitration. Judgment upon the award rendered in any arbitration
may be entered in any court having jurisdiction of the matter.
15.4 Attorneys' Fees
If any arbitration, litigation, or other legal proceedings occur
between the parties relating to this Agreement, the prevailing
Party shall be entitled to recover (in addition to any other
relief awarded or granted) its reasonable costs and expenses,
including attorneys' fees, incurred in the proceeding.
14
<PAGE> 15
15.5 Notices
Unless otherwise expressly provided for, all notices, requests,
demands, consents or other communications required or pertaining
to this Agreement must be in writing and must be delivered
personally or sent by certified or registered mail (postage
prepaid and return receipt requested) to the other Party at the
address set forth below (or to any other address given by either
Party to the other Party in writing):
TO KOFAX: TO DISTRIBUTOR:
3 Jenner Street _______________________
Irvine, CA 92718 _______________________
Attention: Contracts Manager _______________________
In case of mailing, the effective date of delivery of any
notice, demand, or consent shall be considered to be 5 days
after proper mailing.
15.6 Waiver and Amendment
No waiver, amendment, or modification of this Agreement shall be
effective unless in writing and signed by the Party against whom
the waiver, amendment, or modification is sought to be enforced.
No failure or delay by either Party in exercising any right,
power, or remedy under this Agreement shall operate as a waiver
of the right, power, or remedy. No waiver of any term, condition
or default of this Agreement shall be construed as a waiver of
any other term, condition, or default.
15.7 Assignment
This Agreement is binding upon and insures to the benefit of the
successors and assigns of the Parties. However, Distributor may
not assign or transfer the rights or obligations granted to it
under this Agreement without the prior written consent of Kofax.
15.8 No Third Party Rights
This Agreement is not for the benefit of any third party and
shall not be deemed to grant any right or remedy to any third
party, whether or not referred to in this Agreement.
15
<PAGE> 16
15.9 Headings
The section and paragraph headings of this Agreement are
intended as a convenience only, and shall not affect the
interpretation of its provisions.
15.10 Singular and Plural Terms
Where the context of this Agreement requires, singular terms
shall be considered plural, and plural terms shall be considered
singular.
15.11 Severability
If any provision(s) of this Agreement is finally held by a court
or arbitration panel of competent jurisdiction to be unlawful,
the remaining provisions of this Agreement shall remain in full
force and effect to the extent that the intent of the parties
can be enforced.
15.12 Governing Law and Forum
Unless otherwise provided, the validity, construction, and
performance of this Agreement is governed by the laws of
California. Distributor agrees that this Agreement is considered
to be entered into in Orange County, California, and that all
obligations of Kofax under this Agreement are incurred in and
are to be performed in Orange County. The parties consent to
personal jurisdiction in Orange County with respect to any
arbitration or suit brought relating to this Agreement. The
Parties waive all objections to venue to the extent permitted by
law.
16. General Terms and Conditions
16.1 Relationship of the Parties
This Agreement does not constitute a partnership agreement, nor
does it create a Joint venture or agency relationship between
the Parties.
16.2 Survivorship
All obligations and duties hereunder which shall by their nature
extend beyond the expiration or termination of this Agreement,
shall survive and remain in effect beyond any expiration or
termination hereof.
16.3 Force Majeure
Neither party shall be responsible for any delay or failure in
performance of any part of this agreement or order to the extent
that such delay or failure is caused by fire, flood, explosion,
war, strike, embargo, government requirement action
16
<PAGE> 17
of civil or military authority, act of God, act or omission of
carriers or the inability to obtain necessary labor, materials,
(or manufacturing facilities or any other similar causes beyond
its control. In the event of any such delay, the time of
performance that was delayed for such causes will be extended
for a period equal to the time lost by reason of the delay.
Kofax shall have the right to cancel any order placed or to
refuse or delay the shipment thereof for failure of Distributor
to promptly meet payments due Kofax or any other reasonable
requirements established by Kofax or for any acts or omissions
of Distributor which delays Kofax's performance.
16.4 Conflicting Terms
The Parties agree that the terms and conditions of this
Agreement shall prevail, notwithstanding the contrary or
additional terms, in any purchase order, sales acknowledgment,
confirmation or any other document issued by either Party
effecting the purchase and/or sale of Products.
16.5 Export Authorization
Regardless of any disclosure made by Distributor to Kofax of any
ultimate of the Products, Distributor will not export, re-export
or re-sell to any unauthorized end use either directly or
indirectly, any Product or system incorporating such Product
without first obtaining prior written authorization from the
U.S. Department of Commerce or any other Agency or Department of
the United States Government, as and if required.
16.6 Entire Agreement
This Agreement, including all appendices, constitutes the
complete and final Agreement between the Parties, and supersedes
all prior negotiations and agreements between the parties
concerning its subject matter.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement effective as of the date first above set forth.
KOFAX IMAGE PRODUCTS INC DISTRIBUTOR
BY: DAVID E. LAW BY: RICK MURPHY
----------------- -----------------
NAME:DAVID E. LAW NAME: RICK MURPHY
--------------- ---------------
TITLE: President TITLE: V.P. Sales
-------------- --------------
DATE: 7/31/90 DATE: 8/16/90
--------------- ---------------
17
<PAGE> 1
EXHIBIT 10.18
DISTRIBUTOR CONTRACT
BETWEEN
TECH DATA CORPORATION
AND
KOFAX IMAGE PRODUCT
CONFIDENTIAL TREATMENT
<PAGE> 2
DISTRIBUTOR AGREEMENT
THIS AGREEMENT, dated this 1st day of March, 1993 (the "Effective
Date"), is between TECH DATA CORPORATION, a Florida corporation ("Tech Data"),
and KOFAX IMAGE PRODUCTS ("KOFAX").
W I T N E S S E T H:
WHEREAS, Tech Data desires to purchase certain Products from KOFAX from
time to time: and
WHEREAS, KOFAX desires to sell certain Products to Tech Data in
accordance with the terms and conditions set forth in this Agreement; and
WHEREAS, KOFAX desires to appoint Tech Data as its non-exclusive
distributor to market Products within the territory defined below;
NOW, THEREFORE, in consideration of the mutual premises herein contained
and other good and valuable consideration, Tech Data and KOFAX hereby agree as
follows:
ARTICLE I. TERM OF AGREEMENT
1.1 Term of Agreement. During the term of this Agreement, KOFAX will provide
to Tech Data the Products set forth in Purchase Orders (as defined
herein) in accordance with the terms and conditions set forth in this
Agreement. The term of this Agreement shall commence on the Effective
Date and, unless terminated by either party as set forth in this
Agreement, shall remain in full force and effect for a term of one (1)
year, and may be renewed for successive one (1) year terms upon written
confirmation of both parties.
1.2 Definitions, The following definitions shall apply to this Agreement.
(a) "Applicable Specification" shall mean the functional
performance, operational and compatibility characteristics of a
Product agreed upon in writing by the parties or, in the absence
of an agreement, as described in applicable Documentation.
(b) "Documentation" shall mean user manuals, training materials,
product descriptions and specifications, technical manuals,
license agreements, supporting materials and other printed
information relating to the Products, whether distributed in
print, electronic, or video format in effect as of the date of
the applicable Purchase Order and incorporated therein by
reference.
(c) "Products" shall mean, individually or collectively as
appropriate, hardware, licensed software, Documentation,
developed Products, supplies, accessories, and other commodities
related to any of the foregoing, provided or to be provided by
KOFAX pursuant to this Agreement.
(d) "Standard Products" shall mean Products requiring no
changes, alterations, or additions, from those Products
customarily offered by KOFAX, described in brochures and by
exhibits.
<PAGE> 3
(e) "Customized Products" shall mean any Products KOFAX must
purchase requiring KOFAX to perform changes, alterations,
assembly, additions or special packaging prior to shipping to
Tech Data, as described in brochures and by exhibits.
(f) "Territory" shall mean the United States of America and its
territories and possessions.
(g) "Customers" of Tech Data shall include dealers, resellers,
commercial Customers, value added resellers and other similar
Customers, but shall not include End Users unless specifically
set forth.
(h) "End Users" shall mean final retail purchasers or licensees
who have acquired Products for their own use and not for resale,
remarketing or redistribution, unless specifically set forth in
a separate agreement.
(i) "Services" means any warranty, maintenance, advertising,
marketing or technical support and any other services performed
or to be performed by KOFAX.
1.3 Appointment as Distributor. KOFAX hereby grants to Tech Data the
non-exclusive right to distribute Products during the term of this
agreement within the Territory as herein defined. KOFAX reserves the
right to appoint other authorized distributors. Tech Data will use its
best efforts to promote sales of the Products.
ARTICLE II. PURCHASE ORDERS
2.1 Preparation of Purchase Orders. From time to time or at Tech Data's,
request KOFAX shall inform Tech Data of Products available from KOFAX
including, but not limited to, replacement Products, new releases,
enhancements or versions of existing Products. KOFAX shall use best
efforts to notify Tech Data at least thirty (30) days prior to the date
any new Product is to be introduced and shall make such Product
available to Tech Data for distribution no later than the date it is
first introduced in the market place.
2.2 Issuance and Acceptance of Purchase Orders. Tech Data may purchase and
KOFAX shall sell to Tech Data, Products as described below:
(a) Tech Data may issue to KOFAX one or more purchase orders
identifying the Products Tech Data desires to purchase from
KOFAX. Each Purchase Order may include other terms and
conditions which are consistent with the terms and conditions of
this Agreement, or which are necessary to place a Purchase
Order, such as billing and shipping information, required
delivery dates, delivery locations, and the purchase price or
charges for Products, including any discounts or adjustments for
special marketing programs. Purchase orders will be placed by
Tech Data by fax or electronically transferred and followed by a
written confirmation within five (5) working days to avoid
cancellation of the purchase order.
(b) A Purchase Order shall be deemed accepted by KOFAX unless
KOFAX notifies Tech Data in writing within five (5) days after
receiving the Purchase Order that KOFAX does not accept the
Purchase Order.
<PAGE> 4
(c) KOFAX shall accept Purchase Orders from Tech Data for
additional Products which Tech Data is contractually obligated
to furnish to its Customers and does not have in its inventory
upon the termination of this Agreement: provided Tech Data
notifies KOFAX of any and all such transactions in writing
within sixty (60) days of the termination date.
(d) This agreement shall not obligate Tech Data to purchase any
Products or services except as specifically set forth in a
written purchase order
2.3 Purchase Order Alterations or Cancellations. No less than fifteen (15)
days prior to shipment of Standard Products, KOFAX shall accept an
alteration or cancellation to a Purchase Order in order to: (i) change a
location for delivery, (ii) modify the quantity or type of Products to
be delivered or (iii) correct typographical or clerical errors. Tech
Data may not alter or cancel any Purchase Order for Customized Products
after such time as the Products have been altered to a point where such
Products are no longer capable of resale by KOFAX after reasonable
efforts.
2.4 Product Shortages. If for any reason KOFAX's production is not on
schedule, KOFAX agrees to allocate Product to Tech Data's orders based
upon a percentage equal to the same percentage as KOFAX's like Customers
purchasing like volume of same Products.
ARTICLE III. DELIVERY AND
ACCEPTANCE OF PRODUCTS
3.1 Subsidiaries. KOFAX understands and acknowledges that Tech Data may
obtain Products in accordance with this Agreement for the benefit of
subsidiaries of Tech Data. Upon prior approval from KOFAX subsidiaries
of Tech Data shall be entitled to obtain Products directly from KOFAX
pursuant to this Agreement.
3.2 Acceptance of Products. Tech Data shall have the ability to return for
credit products which have boxes that are or become damaged, unless such
damage was caused by Tech Data or for which damages Tech Data can be
reimbursed by their insurance carrier. Tech Data shall request such RMA
prior to returning any Products and KOFAX will issue said (RMA) to Tech
Data within forty-eight (48) hours of Tech Data's request, if approved
and KOFAX shall not unreasonably withhold or delay; however, if no
response is received or if KOFAX withhold the RMA without just cause for
more than five (5) business days KOFAX will then accept returned
Products absent an RMA. An offsetting purchase order for the same
Product being returned will be placed. In addition, KOFAX will supply to
Tech Data, at no charge, any and all material(s) missing from original
packaging.
Tech Data shall have the ability to return for credit products which
have boxes that are or become damaged, unless such damage was caused by
Tech Data or for which damages Tech Data can be reimbursed by their
insurance carrier. An offsetting purchase order will be placed for all
bad box returns. In addition, KOFAX will supply to Tech Data, at no
charge, any and all material(s) missing from original packaging.
3.3 Defective Products. In the event any Products are received in a
defective condition or not in accordance with KOFAX's published
specifications or the documentation relating to such Products, Tech Data
may return the Products for full credit. Products shall be
<PAGE> 5
deemed defective if the Product, or any portion of the Product, fails to
operate properly on initial "burn in", boot, or use as applicable. Tech
Data shall have the right to return any such Products that are returned
to Tech Data from its Customers or End Users within sixty (60) days of
the Products' initial delivery date to the end-user.
3.4 Transportation of Products. KOFAX shall deliver the Products to Tech
Data at the location shown and on the delivery date set forth in the
applicable Purchase Order or as otherwise agreed upon by the parties.
Charges for transportation of the Products shall be paid by Tech Data.
KOFAX shall use only those common carriers preapproved by Tech Data or
listed in Tech Data's published routing instructions, unless prior
written approval of Tech Data is received.
3.5 Title and Risk of Loss. FOB Irvine, CA. Title to Products shall pass to
Tech Data at the time that the Products are delivered to the common
carrier. All risk of loss or damage to the Products shall be borne by
KOFAX until delivery of such Products to the common carrier.
3.6 Resale of Products by Tech Data. During the term of this Agreement, Tech
Data may market, promote, distribute and resell Products to Customers of
Tech Data, either directly or through its subsidiaries, in accordance
with the following terms and conditions:
(a) KOFAX shall extend to Tech Data and each Customer of Tech
Data the same warranties and indemnifications, with respect to
Products purchased and resold hereunder as KOFAX extends to its
end-user Customers. The term of warranties and indemnities
extended by KOFAX to an End User shall commence upon delivery of
the Product to the End User.
(b) KOFAX shall make available at no charge to Tech Data all
training, technical support and other services related to the
Products that are currently offered or that may be offered by
KOFAX. KOFAX also agrees to provide Tech Data a dedicated
telephone support representative at no charge during KOFAX's
normal business hours (6:00 am to 5:30pm PST).
(c) KOFAX shall provide at no charge to Tech Data sales
training, marketing support advertising materials and technical
training in connection with the resale of Products as are
currently offered or that may be offered by KOFAX.
(d) Tech Data is hereby authorized to use trademarks and trade
names of KOFAX and third parties used in connection with the
Products, advertising, promoting or distributing the Products.
Tech Data recognizes KOFAX or other third parties may have
rights or ownership of certain trademarks, trade names and
patents associated with the Products, Tech Data will act
consistently with such rights, and Tech Data shall comply with
any reasonable, written guidelines when provided by KOFAX or
third parties relating to such trademark or trade name usage.
Tech Data will notify KOFAX of any infringement of which Tech
Data has actual knowledge. Tech Data shall discontinue use of
KOFAX's trademarks or trade names upon termination of this
agreement, except as may be needed to sell or liquidate any
final inventories of Product.
(e) KOFAX shall clearly mark each unit package with the serial
number, product description and machine readable bar code
(employing ISBN or other industry standard bar code) approved in
writing by Tech Data.
<PAGE> 6
3.7 Inventory Adjustment. Thirty (30) days after the end of each March, June
September and December during the term of this Agreement, Tech Data may
return Products to KOFAX for inventory adjustment, only after KOFAX has
given a Return Material Authorization (RMA) number to Tech Data. Tech
Data may only return Products which have been shipped to Tech Data
within the prior six (6) months. Tech Data may return any quantity of
Products to KOFAX for credit provided the total credit shall not exceed
ten percent (10%) of the net sales dollars invoiced by KOFAX to Tech
Data during the said six (6) month period. The credit to be issued in
respect of each such Product return shall be the actual net invoiced
charge for same. All Products returned in accordance with this provision
must be returned freight pre-paid and must be unused, and in their
original containers. Tech Data will place an order of equal value to
offset the credit issued at the time the RMA is requested. Any
demonstration unit or non-standard special order Products purchased by
Tech Data as "non-cancelable/non-returnable" do not qualify for stock
rotation.
In addition, Tech Data shall have the right to return for full credit,
without limitation as to the dollar amount, all Products that become
obsolete or KOFAX discontinues or are removed from KOFAX's current price
list; provided Tech Data returns such Products within ninety (90) days
after Tech Data receives written notice that such Products are obsolete,
discontinued or are removed from KOFAX's price list.
3.8 Time of Performance. rime is hereby expressly made of the essence with
respect to each and every term and provision of this agreement.
3.9 Quality Control. KOFAX shall test and inspect Products prior to
shipment. KOFAX's standard inspection records, and a report setting
forth product defect percentage rates are to be maintained by KOFAX and
made available to Tech Data upon request with reasonable notice or, at
the option of Tech Data, on a quarterly basis.
ARTICLE IV. WARRANTIES,
INDEMNITIES AND LIABILITIES
4.1 Warranty. KOFAX hereby represents and warrants that it has not entered
into any agreements or commitments which are inconsistent with or in
conflict with the rights granted to Tech Data herein; the Products shall
be free and clear of all liens and encumbrances; Tech Data and its
Customers and end-users shall be entitled to use the Products without
disturbance; the Products will be free from latent and patent defects in
design, materials, and workmanship for a period of one (1) year from
date of delivery to the end-user, the Products have been listed with
Underwriters' Laboratories whenever such listing is available; the
Products meet all FCC requirements; the Products do and will conform to
all codes, Laws or regulations, are merchantable and fit for their
intended user, and the Products conform in all respects to the Product
warranties. KOFAX shall supply Tech Data, at no additional charge, all
services, parts or replacement Products necessary for KOFAX to comply
with its Product warranties. KOFAX agrees that Tech Data shall be
entitled to pass through to Customers of Tech Data and End Users of the
Products all warranties granted by KOFAX. KOFAX represents that the
Product warranties shall also include those set forth in literature,
specifications, documentation, advertising and printed material
distributed by KOFAX. KOFAX shall indemnify and hold Tech Data, its
subsidiaries, Customers and end-users and their respective successors,
officers, directors, employees and agents harmless from and against all
actions, claims, losses, damages, liabilities, awards, costs and
expenses (including a reasonable attorney's fee) resulting from or
arising out of any breach or claimed breach of the foregoing warranties.
<PAGE> 7
4.2 Proprietary Rights Indemnification. KOFAX shall defend any suit or
proceeding brought against Tech Data based on a claim of a third party
that the Product(s), or any part thereof, furnished by KOFAX constitutes
an infringement of any patent, copyright, trademark of the US or other
third party intellectual right, provided that KOFAX is notified promptly
in writing and given Authority, information and assistance (at KOFAX's
expense) for the defense of such a suit or proceeding, and KOFAX will
pay all damages and costs, including attorneys fees in connection
therewith. In case the Product(s) furnished by KOFAX, or any part
thereof, is enjoined, KOFAX shall, at its expense and option (i) procure
for Tech Data the right to continue using the Product(s); (ii) replace
the same with non-infringing Product(s); (iii) modify the Product(s) so
it becomes non-infringing; or (iv) grant Tech Data credit for such
equipment at the purchase price and accept its return. KOFAX shall not
be liable to Tech Data hereunder if the patent infringement or claim
hereof is based upon the use of the Product in connection with other
Products not reasonably intended for use with the Product, or in a
manner for which the KOFAX Product(s) was not designed, or where the
Product(s) was modified by or for Tech Data in a manner to become
infringing.
IN NO EVENT SHALL KOFAX BE LIABLE TO TECH DATA UNDER THIS PARAGRAPH FOR
CONSEQUENTIAL OR SPECIAL DAMAGES EXCEPT WHERE A THIRD PARTY OBTAINS SUCH
DAMAGES AGAINST TECH DATA. EXCEPT AS EXPRESSLY SET FORTH HEREIN, KOFAX
SHALL HAVE NO LIABILITY OR OBLIGATION TO TECH DATA WITH RESPECT TO
PATENT OR COPYRIGHT INFRINGEMENT MATTERS.
4.3 Cross Indemnification. In the event any act or omission of either party
or its employees, servants, agents or representatives causes or results
in (i) loss, damage to or destruction of property of the other party or
third parties, and/or (ii) death or injury to persons including, but not
limited to, employees or invitees of either party, then such party shall
indemnify, defend and hold the other party harmless from and against any
and all claims, actions, damages, demands, liabilities, costs and
expenses, including reasonable attorneys' fees and expenses, resulting
therefrom. The indemnifying party shall pay or reimburse the other party
promptly for all such loss, damage, destruction, death or injury.
4.4 Insurance.
(a) The parties shall be responsible for providing Workman's
Compensation insurance on its employees,
(b) Without in any way limiting KOFAX's indemnification obligations as
set forth in this Agreement, KOFAX shall maintain Comprehensive General
Liability (Bodily Injury and Property Damage) Insurance in such amounts
as is satisfactory to Tech Data, including the following supplementary
coverage:
(1) Personal Injury Liability with "employee" and
contractual exclusions deleted;
(2) Product and Completed Operations Liability;
(3) KOFAX shall provide certificates of all coverage to Tech
Data naming Tech Data as additional insured and
requiring thirty (30) days prior notice to Tech Data
before termination of any such insurance.
<PAGE> 8
4.5 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PURSUANT TO THIS AGREEMENT FOR AMOUNTS REPRESENTING LOSS OF PROFITS,
LOSS OF BUSINESS OR INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF THE
OTHER PARTY.
4.6 Unauthorized Representations. Tech Data shall have no authority to alter
or extend any of the warranties of KOFAX expressly contained or referred
to in this Agreement without prior approval of KOFAX.
4.7 Tech Data or Tech Data's Customer shall bear all costs of shipping and
risk of loss of in-warranty Products to KOFAX's location KOFAX shall
bear the costs of shipping and risk of loss of in-warranty Products back
to Tech Data or Tech Data's Customer.
4.8 Continuing Availability of Parts. KOFAX agrees to offer for sale to Tech
Data for the purpose of warranty or resale to its Customers during the
term of this Agreement for a period of five (5) years after the
expiration of this Agreement, functionally equivalent maintenance,
replacement and repair parts for all Products sold to Tech Data. If
KOFAX fails to supply such parts, then such inability shall be
considered noncompliance with this section, and in addition to whatever
other rights and remedies Tech Data may have at law or in equity, Tech
Data shall be entitled to require KOFAX to provide Tech Data with the
technical information or any other rights required on a non-exclusive
basis, so that Tech Data can have such parts manufactured or can obtain
such parts from other sources.
4.9 Disclaimer of Warranties. KOFAX has made expressed warranties in this
Agreement and in documentation, promotional and advertising materials.
EXCEPT AS SET FORTH HEREIN OR THEREIN, KOFAX DISCLAIMS ALL WARRANTIES
WITH REGARD TO THE PRODUCTS.
ARTICLE V. PAYMENT TO KOFAX
5.1 Charges, Prices and Fees for Products. Charges, prices, quantities and
discounts, if any, for Products shall be determined as set forth in
Exhibit A, or as otherwise agreed upon by the parties, and may be
confirmed at the time or order. In no event shall charges exceed KOFAX's
then current established charges. KOFAX shall have the right to increase
prices from time to time, upon written notice to Tech Data not less than
thirty (30) days prior to the effective date of such increase. All
orders placed prior to the effective date of the increase, for shipment
within thirty (30) days after the effective date, shall be at the old
price, Tech Data shall not be bound by any of KOFAX's suggested prices.
5.2 Most Favored Pricing and Terms. KOFAX represents that the prices charged
and the terms offered to Tech Data are and will be at least as low as
those charged or offered by KOFAX to any of its other domestic
distributors. If KOFAX offers price discounts, promotional discounts or
other special prices to its other distributors, Tech Data shall also be
entitled to participate and receive notice of the same no later than
other distributors.
5.3 Payment. Except as otherwise set forth herein, any undisputed sum due to
KOFAX pursuant to this Agreement shall be payable as follows: net thirty
(30) days after the invoice receipt. KOFAX shall invoice Tech Data no
earlier than the applicable shipping date for the Products covered by
such invoice. The due date for payment shall be extended during any time
the parties have a bona fide dispute concerning such payment.
<PAGE> 9
5.4 Taxes. KOFAX shall directly reimburse Tech Data for all taxes,
assessments, permits and fees, however designated which are levied upon
this Agreement or the Products, excluding franchise taxes, sales or
other use taxes and taxes based upon Tech Data's income.
5.5 Price Protection. KOFAX shall grant to Tech Data a retroactive price
credit for the full amount of any KOFAX price decrease on all Products
on order, in transit and in its inventory on the effective date of such
price decrease. Tech Data shall, within thirty (30) days after receiving
written notice of the effective date of the price decrease, provide a
list of all Products for which it claims a credit. KOFAX shall have the
right to a reasonable audit at KOFAX's expense. All orders scheduled for
shipment or in transit to Tech Data at the time of notice of the price
decrease shall be adjusted to the decreased price.
5.6 Invoices. A "correct" invoice shall contain (i) KOFAX's name and invoice
date, (ii) a reference to this Agreement, the Purchase Order or other
authorizing document, (iii) separate descriptions, unit prices and
quantities of the Products actually delivered, (iv) credits (if
applicable), (v) shipping charges (vi) name (where applicable), title,
phone number and complete mailing address of responsible official to
whom payment is to be sent, and (vii) other substantiating documentation
or information as may reasonably be required by Tech Data from time to
time.
5.7 Advertising Credit. KOFAX offers a two percent [2%] co-op program and
may offer additional advertising credits, promotional programs or
incentives to Tech Data as it offers its other distributors, then Tech
Data shall have the right at Tech Data's option, to participate in such
programs. KOFAX shall attach copy of its co-op program hereto.
5.8 KOFAX Reports. KOFAX shall, if requested, render monthly reports to Tech
Data setting forth the separate Products, dollars invoiced for each
Product, and total dollars invoiced to Tech Data for the month, and such
other information as Tech Data may reasonably request
5.9 Tech Data Reports. Tech Data shall, if requested, render monthly sales
out reports on diskette, in ASCII Comma Delimited Format. Information
provided will include: Month and year sales activity occurred, internal
product number (assigned by Tech Data), written description, State and
zip-code of Resellers location, unit cost (distributor's cost at
quantity 1), quantity and extended cost (cost times quantity). A monthly
inventory report, will be provided on a paper format once a month. The
reports will be delivered to the KOFAX at different times in the month.
ARTICLE VI. TERMINATION
6.1 Termination. Either party may terminate this agreement, with or without
cause, upon giving the other party sixty (60) days prior written notice.
In the event that either party materially or repeatedly defaults in the
performance of any of its duties or obligations set forth in this
Agreement, and such default is not substantially cured within thirty
(30) days after written notice is given to the defaulting party
specifying the default, then the party not in default may, by giving
written notice thereof to the defaulting party, terminate this Agreement
or the applicable Purchase Order relating to such default as of the date
specified in such notice of termination.
<PAGE> 10
6.2 Termination for Insolvency or Bankruptcy. Either party may immediately
terminate this Agreement and any Purchase Order by giving written notice
to the other party in the event of (i) the liquidation or insolvency of
the other party, (ii) the appointment of a receiver or similar officer
for the other party, (iii) an assignment by the other party for the
benefit of all or substantially all of its creditors, (iv) entry by the
other party into an agreement for the composition, extension, or
readjustment of all or substantially all of its obligations, or (v) the
filing of a meritorious petition in bankruptcy by or against the other
party under any bankruptcy or debtors' law for its relief or
reorganization.
6.3 Rights Upon Termination. Termination of any Purchase Order or this
Agreement shall not affect KOFAX's right to be paid for undisputed
invoices for Products already shipped. The termination of this Agreement
shall not affect any of KOFAX's warranties, indemnifications or
obligations relating to returns, credits or any other matters set forth
in this agreement that are to survive termination in order to carry out
their intended purpose, all of which shall survive this Agreement. Upon
termination of this Agreement, Tech Data shall discontinue holding
itself out as a distributor of KOFAX's Products. The expiration of the
term of this Agreement shall not affect the obligations of either party
to the other party pursuant to any Purchase Order previously forwarded
to KOFAX.
6.4 Repurchase of Products Upon Termination. In the event Tech Data
terminates this Agreement for cause or KOFAX terminates this Agreement,
KOFAX shall repurchase all the Products in Tech Data's inventory at the
original actual net invoice purchase price less any prior credits
granted by KOFAX to Tech Data; provided that the Products have been
unused, and are in their original factory sealed packages and factory
shipped condition.
In the event Tech Data terminates this Agreement without cause, KOFAX
shall have the option to repurchase all the Product in Tech Data's
inventory at the original actual net invoice purchase prices, less any
prior credits granted by KOFAX to Tech Data; provided that the Products
have been unused and are in their original factory sealed packages and
factory shipped condition.
ARTICLE VII. MISCELLANEOUS
7.1 Binding Nature, Assignment, and Subcontracting. This Agreement shall be
binding on the parties and their respective successors and assigns, but
neither party shall have the power to assign this Agreement without the
prior written consent of the other party.
7.2 Counterparts. This Agreement may be executed in several counterparts,
all of which taken together shall constitute one single agreement
between the parties.
7.3 Headings. The Article and Section headings used in this Agreement are
for reference and convenience only and shall not enter into the
interpretation hereof.
7.4 Relationship of Parties. Tech Data is performing pursuant to this
Agreement only as an independent contractor. Nothing set forth in this
Agreement shall be construed to create the relationship of principal and
agent between Tech Data and KOFAX. Neither party shall act or represent
itself, directly or by implication, as an agent of the other party.
7.5 Confidentiality. Each party acknowledges that in the course of
performance of its obligations pursuant to this Agreement, it may obtain
certain confidential and/or proprietary information. Each party hereby
agrees that all such information communicated to it by the other party,
its subsidiaries, or Customers, whether before or
<PAGE> 11
after the effective date, shall be and was received in strict
confidence, shall be used only for purposes of this Agreement, and shall
not be disclosed without the prior written consent of the other party,
except as may be necessary by reason of legal, accounting or regulatory
requirements beyond either party's reasonable control. The provisions of
this Section shall survive the term or termination of this Agreement for
any reason.
7.6 Arbitration. Any disputes arising under this Agreement shall be
submitted to arbitration in accordance with such rules as the parties
jointly agree. If the parties are unable to agree on arbitration
procedures, arbitration shall be conducted in Pinellas County, Florida
in accordance with the rules of the American Arbitration Association.
Any such award shall be final and binding upon both parties.
7.7 Notices. Wherever one party is required or permitted to give notice to
the other pursuant to this Agreement, such notice shall be deemed given
when delivered in hand, by telex or cable, or when mailed by registered
or certified mail, return receipt requested, postage prepaid, and
addressed as follows:
IN THE CASE OF KOFAX: IN THE CASE OF TECH DATA:
--------------------- -------------------------
Kofax Image Products Tech Data Corporation
3 Jenner Street 5350 Tech Data Drive
Irvine, CA 92718 Clearwater, FL 34620
Attn: Distribution Sales Manager Attn: Jennifer M. Dougan
Director of Marketing Operations
cc: Debi A. Schwatka
Contracts Administrator
Either party may from time to time change its address for notification
purposes by giving the other party written notice of the new address and
the date upon which it will become effective.
7.8 Force Majeure. The term "Force Majeure" shall be defined to include
fires or other casualties or accidents, acts of God, severe weather
conditions, strikes or Labor disputes, war or other violence, or any
law, order, proclamation, regulation, ordinance, demand or requirement
of any governmental agency.
(a) A party whose performance is prevented, restricted or
interfered with by reason of a Force Majeure condition shall be
excused from such performance to the extent of such Force
Majeure condition so long as such party provides the other party
with prompt written notice describing the Force Majeure
condition immediately continues performance whenever and to the
extent such causes are removed.
(b) If, due to a Force Majeure condition, the scheduled time of
delivery or performance is or will be delayed for more than
ninety (90) days after the scheduled date, the party not relying
upon the Force Majeure condition may terminate, without
liability to the other party, any Purchase Order or portion
thereof covering the delayed Products.
7.9 Return Material Authorization Numbers. When a Return Material
Authorization Number (RMA) is required by KOFAX for returning Products,
Tech Data shall request such RMA prior to returning any Products and
KOFAX will issue said (RMA) to Tech Data within forty-eight (48) hours
of Tech Data's request; however, if no response is received or if
<PAGE> 12
KOFAX withhold the RMA without just cause for more than five (5)
business days KOFAX will then accept returned Products absent an RMA.
The net purchase price, minus any adjustments of such Products returned
to KOFAX shall be credited to Tech Data's account.
7.10 Credits to Tech Data. In the event any provisions of this Agreement or
any other agreement between Tech Data and KOFAX require that KOFAX grant
credits to Tech Data's account, and such credits are not received within
thirty (30) days then, all such credits shall become effective
immediately upon notice to KOFAX. In such event, Tech Data shall be
entitled to deduct any such credits from the next monies owed to KOFAX.
In the event credits exceed any balances owed by Tech Data to KOFAX,
then KOFAX shall issue a check payable to Tech Data within ten (10) days
of such notice.
7.11 Severability. If, but only to the extent that, any provision of this
Agreement is declared or found to be illegal, unenforceable or void,
then both parties shall be relieved of all obligations arising under
such provision, it being the intent and agreement of the parties that
this Agreement shall be deemed amended by modifying such provision, to
the extent necessary to make it legal and enforceable while preserving
its intent.
7.12 Waiver. A waiver by either of the parties of any covenants, conditions
or agreements to be performed by the other or any breach thereof shall
not be construed to be a waiver of any succeeding breach thereof or of
any other covenant, condition or agreement herein contained.
7.13 Remedies. All remedies set forth in this Agreement shall be cumulative
and in addition to and not in lieu of any other remedies available to
either party at law, in equity or otherwise, and may be enforced
concurrently or from time to time.
7.14 Survival of Terms. Termination or expiration of this Agreement for any
reason shall not release either party from any liabilities or
obligations set forth in this Agreement which (i) the parties have
expressly agreed shall survive any such termination or expiration, or
(ii) remain to be performed or by their nature would be intended to be
applicable following any such termination or expiration.
7.15 Non-exclusive Market and Purchase Rights. It is expressly understood and
agreed that this Agreement does not grant to KOFAX or Tech Data an
exclusive right to purchase or sell Products and shall not prevent
either party from developing or acquiring other KOFAX's or Customers or
competing Products.
7.16 Specifications and Drawing. KOFAX agrees to provide upon Tech Data's
request, at no charge to Tech Data, quantities as requested by Tech Data
of the following: (1) the specifications, (2) published user
instructions, manuals and other training materials, and (3) current
manuals covering installation, operation and complete maintenance of the
Products. Tech Data shall have the right to copy or reproduce the
foregoing materials for use in connection with Tech Data's use or sale
of the Products.
7.17 Entire Agreement. This Agreement, including any Exhibits and documents
referred to in this Agreement or attached hereto, constitutes the entire
and exclusive statement of Agreement between the parties with respect to
its subject matter and there are no oral or written representations,
understandings or agreements relating to this Agreement which are not
fully expressed herein.
7.18 Governing Law. This Agreement shall have Florida as its situs and shall
be governed by and construed in accordance with the laws of the State of
Florida.
<PAGE> 13
7.19 Software Licenses. Whenever the Products described in this Agreement
shall include software licenses, KOFAX hereby grants to Tech Data a
non-exclusive license to market, demonstrate and distribute the software
to Customers of Tech Data. Tech Data agrees to comply with KOFAX's
reasonable software license agreements, and agrees to use reasonable
efforts to protect KOFAX's software, including using reasonable efforts
to avoid allowing Customers, individuals, or employees to make any
unauthorized copies of KOFAX's licensed software; to modify, disassemble
or decompile any software; to remove, obscure or after any notice of
patent, trademark, copyright or trade name; or authorize any person to
do anything that Tech Data is prohibited from doing under this
Agreement. Provided, however, KOFAX shall provide Tech Data with copies
of appropriate software and documentation, at no charge, for the purpose
of effectively demonstrating equipment to Customers. This demonstration
software shall be updated as appropriate to insure that current software
is available for sales demonstration. Tech Data acknowledges that no
title or ownership of the proprietary rights to any software is
transferred by virtue of this Agreement. Tech Data will use reasonable
efforts to protect KOFAX's rights under this section but Tech Data is
not authorized and shall not be required to instigate legal action on
behalf of KOFAX or its suppliers against third parties for infringement.
Tech Data will notify KOFAX of any infringement of which it has actual
knowledge.
7.20 International Business. KOFAX acknowledges that Tech Data may desire to
obtain Products or Systems for use in countries outside the United
States and its territories. The parties acknowledge that in such case it
may be necessary to enter into additional agreements between KOFAX and
Tech Data and/or the respective subsidiaries, agents, distributors or
subsidiaries authorized to conduct business in such countries or to
negotiate further terms and conditions to provide for such right. The
parties intend that any further agreements or terms and conditions will
be consistent with and based upon the applicable terms and conditions of
this Agreement, subject, however, to requirements of local law and local
business practice. All Products obtained pursuant to this Section shall
be deemed for purposes of calculating accumulated purchases and any
discounts set forth in this Agreement, to have been obtained pursuant to
this Agreement.
IN WITNESS WHEREOF, the parties have each caused this Agreement to be
signed and delivered by its duly authorized officer or representative as of the
Effective Date.
KOFAX IMAGE PRODUCTS TECH DATA CORPORATION
By: /s/ RICK MURPHY By: /s/ PEGGY K. CALDWELL
------------------------- ---------------------------
Printed Name: RICK MURPHY Printed Name: PEGGY K. CALDWELL
Title: Vice President, Sales Title: Senior Vice President
Marketing
Date: Date: 3/1/93
<PAGE> 14
MODIFICATION AGREEMENT
This Modification Agreement is effective as of the 24th day of September, 1996
(the "Effective Date") is between Tech Data Corporation, a Florida corporation
("Tech Data") and Kofax Image Products, a Delaware corporation ("Kofax").
RECITALS
A. Tech Data and Kofax entered into a Distributor Agreement, dated March 1,
1993, (the "Original Agreement") pursuant to which Tech Data acts as a
distributor of Kofax's Products.
B. Tech Data and Kofax desire to modify certain terms of the Original
Agreement in accordance with this Modification Agreement. The Original
Agreement as modified by this Modification Agreement is hereinafter
referred to as the "Agreement."
NOW THEREFORE, in consideration of mutual promises herein contained and other
good and valuable consideration, Tech Data and Kofax hereby agree as follows:
1. Modification. The Original Agreement is hereby modified and amended as stated
in this section 1.
a. Section 1.1 of the Original Agreement is hereby revised in its
entirety to read as follows:
1.1 Term of the Agreement. The term of this Agreement shall
automatically renew for successive one (1) year terms unless prior
written notification of termination is delivered by one of the parties
to the other in accordance with the notice provision of this Agreement.
b. Section 2.3 of the Original Agreement is hereby revised in its
entirety to read as follows:
2.3 Purchase Order Alterations or Cancellations, No less than 5 working
days prior to shipment of Products, Kofax shall accept alterations or
cancellation to a purchase order in order to: (i) change a location for
delivery, (ii) modify the quantity or type of Products to be delivered
or (iii) correct typographical or clerical errors.
c. Section 3.2 of the Original Agreement is hereby revised in its
entirety to read as follows:
3.2 Acceptance of Products. Tech Data shall, after a reasonable time to
inspect each shipment, accept Product (the "Acceptance Date") if the
Products and all necessary documentation delivered to Tech Data are in
accordance with the purchase order. Any Products not ordered or not
otherwise in accordance with the purchase order, (e.g. mis-shipments,
overshipments) may be returned to Kofax at Kofax's expense (including
without limitation costs of shipment or storage). Tech Data shall not be
required to accept partial shipment unless Tech Data agrees prior to
shipment.
In addition, Tech Data shall return for credit Products which have boxes
that are or become damaged. Kofax will supply to Tech Data, at no
charge, any and all material(s) which are missing in the original
Product package. Tech Data shall provide an offsetting purchase order
for such bad box returns.
d. Section 3.7 of the Original Agreement is hereby revised in its
entirety to read as follows:
3.7 Inventory Adjustment. In the first month of each calendar quarter,
Kofax agrees to accept return of overstocked Products, provided such
returns shall not exceed the value of fifteen percent (15%) of the prior
quarter's purchases. Shipments of Product being returned shall be new,
unused and in sealed cartons. Kofax shall credit Tech Data's account in
the amount of the price paid by Tech Data therefor less any price
protection credits but not including any early payment or prepayment
discounts (the "Return Credit").
<PAGE> 15
In addition, Tech Data shall have the right to return for full credit,
without limitation as to the dollar amount, all Products that become
obsolete or Kofax discontinues or are removed from Kofax's current price
list; provided Tech Data returns such Products within ninety (90) days
after Tech Data receives written notice from Kofax that such Products
are obsolete, superseded by a newer version, discontinued or are removed
from Kofax price list.
e. Section 5.3 of the Original Agreement is hereby revised in its
entirety to read as follows:
5.3 Payment. Except as otherwise set forth in this Agreement, any
undisputed sum due to Kofax pursuant to this Agreement shall be payable
net forty-five (45) days after the invoice date. Kofax shall invoice
Tech Data no earlier than the applicable shipping date for the Products
covered by such invoice. Products which are shipped from outside the
United States, shall not be invoiced to Tech Data prior to the Products
being placed on a common carrier within the United States for final
delivery to Tech Data. The due date for payment shall be extended during
any time the parties have a bona fide dispute concerning such payment.
f. Section 5.9 of the Original Agreement is hereby revised in its
entirety to read as follow:
5.9 Tech Data Reports. Tech Data shall, if requested, render monthly
sales out reports on diskette, in ASCII Comma Delimited Format.
Information provided will include: Month and year sales activity
occurred, internal product number (assigned by Tech Data), written
description, Customer name and zip code, unit cost (distributor's cost
at quantity 1), quantity and extended cost (cost times quantity). Kofax
agrees that the Customer names provided by Tech Data are for purposes of
commission reporting only, will be kept confidential by Kofax, and will
not be used in any other manner. A monthly inventory report will be
provided on a paper format.
g. Section 6.4 of the Original Agreement is hereby revised in its
entirety to read as follows:
6.4 Repurchase of Products Upon Termination or Expiration. Upon the
effective date of termination or expiration of this Agreement for any
reason, Kofax agrees to repurchase all Products in Tech Data's inventory
or which are returned to Tech Data within sixty (60) days following the
effective date of termination or expiration. Kofax will repurchase the
Products at the original purchase price; less any deductions for price
protection. The repurchase price shall not be reduced by any deductions
or offsets for early pay or prepay discounts. Such returns shall not
reduce or offset any co-op payments or obligations owed to Tech Data.
Tech Data shall submit to Kofax, within sixty-five (65) days after the
termination or expiration date, the quantity of Product that Tech Data
will be returning to Kofax for repurchase. Kofax will issue a Return
Material Authorization (RMA) to Tech Data for all such Products;
provided, however, that Kofax shall accept returned Products in
accordance with this Section absent an RMA if Kofax fails to issue said
RMA within five (5) business days of Tech Data's request. Kofax shall
credit any outstanding balances owed to Tech Data. If such credit
exceeds amounts due from Tech Data, Kofax shall remit in the form of a
check to Tech Data the excess within thirty (30) days of receipt of the
Product. Customized Products shall not be eligible for repurchase
pursuant to this Section.
h. 7.7 Notices is hereby updated as follows:
In the case of Tech Data, notices shall be sent Attn: V.P. of Marketing
Operations., cc: Contracts Administration.
i. Section 7.21 is hereby added and shall read as follows:
7.21 Financial Statements.
Kofax agrees that for the term of this Agreement, Kofax shall provide
financial statements annually. Kofax shall provide other additional
financial information upon reasonable request by Tech Data.
2. Entire Agreement. The Agreement, including any Exhibits and Schedules
attached hereto or thereto, constitute the entire agreement between Tech Data
and Kofax concerning the subject matter hereof and supersedes all prior
agreements between the parties.
<PAGE> 16
3. Ratification. Except as modified by this Modification Agreement, the parties
hereby ratify and confirm all terms and conditions of the Original Agreement.
IN WITNESS WHEREOF, each party has signed this Modification Agreement on the day
and year written above effective as of the Effective Date.
KOFAX IMAGE PRODUCTS TECH DATA CORPORATION
A Delaware corporation a Florida corporation
By: /s/ By: /s/
------------------------------ --------------------------------
Printed Name: Printed Name:
Title: Title: Senior Vice President & CFO
Date: Date: 10/23/96
<PAGE> 17
[KOFAX LETTERHEAD]
October 16, 1996
Ms. Kathy Benefield
Contracts Administrator
Tech Data Corporation
5350 Tech Data Drive
Clearwater, Florida 34620
Dear Kathy:
This letter is written to amend the Distributor Agreement dated March 1, 1993.
Kofax Image Products desires to modify Section 1.2 (f) of the agreement to read:
"Territory" shall mean the United States of America and its territories
and possessions and Canada.
All other terms and conditions of the said Agreement will remain unchanged.
KOFAX IMAGE PRODUCTS TECH DATA CORPORATION
/s/ /s/
- -------------------------------- -----------------------------------
Signature, Title Vice President Signature, Title
10-16-96 10/23/96
- -------------------------------- -----------------------------------
Date Date
<PAGE> 18
ADDENDUM TO DISTRIBUTOR AGREEMENT
Tech Data Corporation
This addendum is written to amend the Distributor Agreement dated March 1, 1993.
WHEREAS Kofax desires to appoint Tech Data as its non-exclusive distributor to
market its new NetScan Product within the territory defined as Canada, The
United States of America and its territories and possessions, and
WHEREAS Tech Data desires to sell the Kofax NetScan products within the
territory defined above,
Kofax hereby amends the Distribution Agreement to incorporate the NetScan
product into Tech Data's product line. The pricing of the product at it's
introduction is established as:
List Price [*]
Tech Data Discount [*]
All other terms and conditions of the said Agreement will remain unchanged.
KOFAX IMAGE PRODUCTS TECH DATA CORPORATION
/s/ /s/
- -------------------------------- -----------------------------------
Signature, Title Signature, Title
8-8-96 10/23/96
- -------------------------------- -----------------------------------
Date Date
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 1
EXHIBIT 10.20
CAERE CORPORATION
LICENSEE AGREEMENT
THIS LICENSEE AGREEMENT (the "Agreement") is made and entered into this
10th day of September, 1996 ("Effective Date"), by and between CAERE
CORPORATION, a Delaware corporation having its principal office at 100 Cooper
Court, Los Gatos, California 95030 ("CAERE"), and Kofax Image Products, a
California corporation having its principal office at 3 Jenner Street, Irvine,
California 92718 ("Licensee").
WHEREAS CAERE possesses certain ownership interests in proprietary
software and desires to license such software to Licensee under the terms of
this Agreement; and
WHEREAS Licensee desires to license such software from CAERE and
incorporate such software into certain Licensee hardware and/or software
products and distribute such CAERE software as incorporated into Licensee's
products;
Now THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:
1. Definitions
1.1 For purposes of this Agreement:
(a) CUSTOMER. "Customer" shall mean the resellers, value added
resellers, original equipment manufacturers, integrators and distributors to
whom Licensee distributes Final Products for further distribution to End Users.
(b) DOCUMENTATION. "Documentation" shall mean CAERE's standard user
manuals and other written and graphic materials related to the Products.
(c) END USER. "End User" shall mean a third party who acquires
Final Products from Licensee for its own internal use other than distribution
and resale and who is granted a sublicense to the Products by Licensee pursuant
to the terms of this Agreement.
(d) FINAL PRODUCTS. "Final Products" shall mean the Products and
the Licensee Products bundled together into a single package or the Products
incorporated into or installed onto the Licensee Products as a single unit or
system, which is intended to be sold and sublicensed to End Users for a single
price.
(e) LICENSEE PRODUCTS. "Licensee Products" shall mean Licensee's
hardware and/or software products as set forth in Exhibit A which add
substantial value to the Products.
(f) PRODUCTS. "Products" shall mean only those CAERE products in
object code form as described in Exhibit B.
1
CONFIDENTIAL TREATMENT
<PAGE> 2
(f) TERRITORY. "Territory" shall mean worldwide.
2. RIGHTS AND RESTRICTIONS
2.1 COPYRIGHT LICENSE. Subject to the terms of this Agreement, CAERE
hereby grants to Licensee, and Licensee accepts, the non-exclusive,
non-transferable, royalty bearing right under CAERE's copyrights to reproduce
the Products and distribute the Products, during the term of this Agreement, to
End Users in the Territory through Licensee's normal chains of distribution,
provided that the Products are bundled and used only with LICENSEE Products as
Final Products, and provided FURTHER that LICENSEE does not bundle or use, nor
does it allow a third party to bundle or use, the Licensee Products in any way
that directly or indirectly, (i) utilize the OCR functionality of the Products
or (ii) make calls to CAERE's OCR engine, without CAERE's prior written consent.
LICENSEE acknowledges that LICENSEE has not been granted the right to sublicense
its right to reproduce the Products.
2.2 PATENT LICENSE. Subject to the terms of this Agreement, CAERE
hereby grants to LICENSEE, and LICENSEE hereby accepts, the non-exclusive,
non-transferable, royalty bearing license under CAERE's patents to make the
Products and SELL the Products, during the term of this Agreement, to End Users
in the Territory through LICENSEE's normal chains of distribution, provided that
the Products are bundled with LICENSEE Products for use only as Final Products,
and provided further that LICENSEE does not bundle or use, nor does it allow
third parties to bundle or use, the Licensee Products in any way that directly
or indirectly, (i) utilize the OCR functionality of the Products or (ii) make
calls to CAERE's OCR engine, without CAERE's prior written notice. LICENSEE
acknowledges that LICENSEE has not been granted the right to sublicense its
right to make the Products.
2.3 RESTRICTIONS. Licensee acknowledges and agrees that the Products
contain CAERE's proprietary information and in order to protect such
information, Licensee shall not, nor shall it allow a third party to, decompile,
reverse engineer, disassemble or otherwise reduce the Products to a humanly
perceivable form. Licensee agrees to execute a customer agreement with End Users
to whom Products are sublicensed, which provisions shall be no less restrictive
than the provisions contained in CAERE's standard software license set forth in
Exhibit C. There are no implied licenses under this Agreement, and any rights
not expressly granted to Licensee hereunder are reserved by CAERE.
2.4 REPRODUCTION
(a) SOFTWARE. CAERE will provide Licensee with one master copy of
each Product in machine readable object code in the languages enumerated in
Exhibit B. Licensee will, at Licensee's sole cost: (i) make copies of the
Products exactly in accordance with any specifications provided by CAERE, unless
and except as otherwise agreed to in writing by CAERE; (ii) supply media on
which such copies will be made; and (iii) as applicable, manufacture and apply
on the disks pre-approved disk labels. Licensee shall not localize, alter,
modify, or change any Product or its package. CAERE is under no obligation to
provide Licensee with any new products or version of the Products under this
Agreement. Licensee expressly agrees that all copies made under this Section
will be made only for sublicense pursuant to Section 2.1 and 2.2.
2
<PAGE> 3
(b) DOCUMENTATION. Subject to the terms of this Agreement, CAERE
grants to Licensee the non-exclusive, nontransferable right to use, reproduce
and distribute the Documentation solely in conjunction with the sublicense of
the Final Products. CAERE will provide Licensee with one master copy of each
item of the Documentation in the languages enumerated in Exhibit B, in both hard
copy and machine readable text. At Licensee's sole expense, Licensee will make
copies of the Documentation without any modification. Licensee will make only
the number of copies of the Documentation necessary for the purposes of this
Agreement.
3. DELIVERY, TESTING OF PRODUCTS. To assure that the Products reproduced
by Licensee meet Caere's quality standards, Licensee shall provide Caere with a
sample of the Final Product in the form in which Licensee proposes to distribute
the Final Product prior to any distribution of the Final Product by Licensee.
Caere shall have a period of 10 business days after receipt of the media to test
the Final Product to determine whether it meets Caere's quality standards as
well as to review the placement of any required copyright, patent and trademark
notices. If Caere for any reason in its sole discretion finds that the Final
Product as reproduced does not meet its quality standards or that the notices
are not properly displayed, Caere shall notify Licensee of the deficiency and
Licensee shall correct such deficiency to Caere's satisfaction before
distributing or selling the Final Product. In no event shall any failure by
Caere to notify Licensee of any such deficiency constitute a waiver of any
rights of Caere under this Agreement or the grant of any warranty in excess of
that expressly provided herein. In addition, at Caere's request during the term
of the Agreement, Licensee shall provide Caere with a sample of the Final
Product in the form in which Licensee is distributing the Final Product for
Caere's use in on-going quality control testing. If Caere for any reason in its
sole discretion finds that the Product does not meet its quality standards or
that proprietary notices are not properly displayed; Caere shall notify Licensee
of the deficiency and Licensee shall cease distribution of the Final Product
until such time as the deficiency is remedied to Caere's satisfaction.
4. ROYALTIES AND STATEMENTS.
4.1 ROYALTY PAYMENTS. Subject to Section 4.2, Licensee agrees to pay to
Caere royalties, in U.S. Dollars and as set forth in Exhibit D, based on the
number of copies of the Products distributed by or on behalf of Licensee.
Royalty payments shall be credited first against any prepaid royalties; after
the prepaid royalties have been fully credited, Licensee shall pay royalties
directly to CAERE as set forth in Section 4.4.
4.2 PREPAID ROYALTIES. Upon the execution of this Agreement, Licensee
agrees to pay the prepaid royalty amount set forth on Exhibit D.
4.3 FORECASTS. On the first day of each calendar month, Licensee will
provide to CAERE a ninety (90) day rolling forecast of the number of Final
Products Licensee intends to distribute.
4.4 REPORTING. Within twenty (20) days following the end of each
calendar quarter during the term of this Agreement, Licensee shall render to
CAERE a statement showing in
3
<PAGE> 4
reasonable detail the number of copies of the Products and Evaluation Copies (as
that term is defined in Exhibit D) made and the number of copies of the Products
and Evaluation Copies distributed during such month. Such statement shall be
accompanied by payment of the amounts then due.
4.5 RECORDS AND INSPECTION RIGHTS. Licensee will keep and maintain, for
a period of two (2) years, proper records and books of account relating to
Licensee's marketing and distribution of the Products. CAERE may inspect such
records to verify Licensee's statements. Any such inspection will be conducted
only by independent public accountants during regular business hours at
Licensee's offices in a manner that does not unreasonably interfere with
Licensee's business activities. Such inspection shall be at CAERE's cost and
expense; provided, however, if the audit reveals overdue payments in excess of
five percent (5%) of the payments owed to date, Licensee shall pay the cost of
such audit(s) and for each such audit CAERE may conduct another audit during the
same twelve (12) month period. Licensee shall also immediately pay any overdue
payments revealed by such audit(s) plus interest at the rate of the lesser of
one and one half percent (1 1/2%) per month or the maximum then permitted by
applicable law, from the due date until paid. Except as set forth above, such
audits may be conducted no more than once in any twelve (12) month period. In
the event that CAERE wishes to inspect such books and records, Licensee will
make all relevant records available, including but not limited to all records
relating to activities outside of the United States (whether such records were
originally generated within or outside of the United States). In no event may
CAERE commence an inspection of any statement later than two (2) years from the
date of such statement.
4.6 TAXES. Licensee's payments required under this Section 4 are
exclusive of taxes except as provided herein, and Licensee agrees to bear and be
solely responsible for the payment of all such taxes, other than taxes payable
on CAERE's net income, including but not limited to all sales, use, rental
receipt, personal property or other taxes and their equivalents which may be
levied or assessed in connection with the use, manufacture or sale of the
Products or the Final Products. Notwithstanding the foregoing, in the event
Licensee is required to withhold taxes imposed upon CAERE for any payment under
this Agreement by virtue of the statutes, laws, codes or governmental
regulations of a country in which the Final Products are sold, then such
payments will be made by Licensee and deducted from Licensee's royalty
obligations under this Agreement; provided, however, that Licensee will obtain
and furnish CAERE with official tax receipts or other evidence of payment issued
by the respective tax authorities, sufficient to enable CAERE to establish
payment of such taxes in support of a claim for a credit against CAERE's United
States tax liability.
4.7 NOT FOR RESALE UNITS. Licensee will not owe any royalty for any
copy of Products distributed free of charge for Licensee's or Resellers'
marketing or promotional purposes or for Licensee's or Resellers' own internal
and demonstration uses; provided, however, Licensee shall not distribute or use
more than four hundred (400) copies of any such Products in any one year.
4.8 ROYALTY ADJUSTMENTS. CAERE may not modify the royalty rates set
forth in Exhibit D for the Products for the initial term of this Agreement.
4
<PAGE> 5
5. PRICING.
Licensee's prices for the Final Products will be at Licensee's sole
discretion; however, Licensee agrees not to offer the Products as "free"
software and shall only offer the Products for the single price offered for the
Final Products.
6. MARKETING.
6.1 WEB LINKS. Licensee shall provide to CAERE, at no cost, a link from
Licensee's home page on the Internet to CAERE's home page on the Internet and
shall permit CAERE to establish, at no cost, a link from CAERE's home page to
Licensee's home page.
7. PRODUCT WARRANTY.
7.1 WARRANTY. CAERE warrants to Licensee that, for a period of ninety
(90) days from the date of delivery to Licensee of the master disks, the
Products will substantially perform the functions described in the Documentation
for such version. CAERE DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND, EXCEPT AS PROVIDED FOR IN SECTION 13.1,
FREEDOM FROM THIRD PARTY INFRINGEMENT CLAIMS. Licensee's sole remedy for failure
of a Product to meet this warranty shall be limited to having CAERE undertake to
correct documented nonconformances within a reasonable period of time.
7.2 NO PASS THROUGH. Licensee will not pass through to End Users the
warranty in Section 6.1 and shall make no other representations to End Users on
behalf of CAERE. Licensee shall be solely responsible for providing support and
warranty service to End Users for the Final Products. Licensee shall indicate to
End Users that they must look solely to Licensee in connection with any
problems, warranty claims, or other matters regarding the Products or Final
Products. Licensee shall make no warranties to End Users on behalf of CAERE and
agrees to indemnify and hold CAERE harmless from any third party claims based on
warranties given in violation of this Agreement.
7.3 EXCLUSIONS. This limited warranty does not cover loss or damage
which: (i) occurs in shipment to or from Licensee, (ii) is due to improper
installation or maintenance, misuse, neglect, or any cause other than ordinary
commercial or industrial application; (iii) is due to adjustment, repair or
modification by any person other than as authorized by CAERE; (iv) is due to
storage or use in an improper environment, excessive or inadequate heating or
air conditioning and electrical power failures, surges or other irregularities;
or (v) is due to any statement about the Products other than as provided in this
Agreement, unless confirmed in writing by an authorized corporate officer of
CAERE.
CAERE does not warrant that the Products will meet Licensee's
requirements, that operation of the Products will be uninterrupted or
error-free, or that all software errors will be
5
<PAGE> 6
corrected. CAERE is not responsible for problems caused by computer hardware or
computer operating systems (including those making up Licensee Products) which
are not compatible with the system specifications required to run the Products
as set forth in the Product's user manual, or for problems in the interaction of
the Products with non-CAERE software. CAERE does not warrant the Licensed
Components; such software is sublicensed AS IS.
7.4 BUG FIXES. For a period of one (1) year from the date of delivery,
CAERE will provide to Licensee, at no charge, all bug fixes to the Products
which CAERE makes generally available at no charge to its customers.
8. LIMITATION OF LIABILITY.
CAERE SHALL NOT BE LIABLE TO LICENSEE, END USERS OR ANY OTHER ENTITY
CLAIMING THROUGH OR UNDER LICENSEE FOR ANY LOSS OF PROFITS OR INCOME, LOSS OF
DATA, OR OTHER TANGIBLE BUSINESS LOSS OR OTHER CONSEQUENTIAL, INCIDENTAL, OR
SPECIAL DAMAGES, OR FOR ANY CLAIM BY ANY OTHER PARTY, WHETHER IN AN ACTION IN
CONTRACT OR TORT OR BASED ON A WARRANTY, EVEN IF CAERE HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE
LICENSES GRANTED HEREUNDER. LICENSEE'S, END USERS' OR ANY OTHER ENTITY'S SOLE
AND EXCLUSIVE REMEDIES SHALL BE AS SET FORTH IN SECTIONS 7 AND 13.
CAERE'S AGGREGATE LIABILITY FOR DAMAGES UNDER THIS AGREEMENT SHALL NOT
EXCEED THE AMOUNT ACTUALLY PAID BY LICENSEE TO CAERE DURING THE TWELVE MONTH
PERIOD PRECEDING THE DATE UPON WHICH A CLAIM FOR SUCH DAMAGE AROSE.
9. LICENSEE'S OBLIGATIONS.
9.1 TECHNICAL SUPPORT. Licensee shall provide a customer support
telephone number accessible in each country in which Licensee distributes the
Final Products. The telephone number need not be free of toll charges to users.
During Licensee's customer support telephone hours (which shall be no less than
Licensee's normal business hours), Licensee will provide customer and technical
support to End Users. Licensee will include its customer support phone numbers
and hours in the documentation distributed with the Final Products. If
Licensee's personnel cannot answer an End User's question regarding the Products
after using "reasonable efforts," such personnel may contact CAERE with such
questions. "Reasonable efforts" include, at minimum, reviewing CAERE's written
reference materials. CAERE may refer End Users who first call CAERE directly to
Licensee for customer and technical support. CAERE shall not be obligated to
provide any technical support to end users of Licensee Products with which Final
Products have been integrated.
9.2 MARKETING. Licensee will use its best efforts to market the Final
Products. Licensee will retain and have available trained and specialized
personnel sufficient to market the Final Products effectively and to assure End
User satisfaction.
6
<PAGE> 7
9.3 During the term of this Agreement, Licensee agrees to bundle and/or
incorporate the Products with all Licensee Products listed on Exhibit A, which
list may be amended by mutual consent of the parties.
10. CAERE SUPPORT AND MAINTENANCE.
10.1 TECHNICAL INFORMATION. CAERE will provide Licensee with technical
information regarding the Products that CAERE provides to other similarly
situated Product licensees. Upon Licensee's written request and at CAERE's
discretion, CAERE may provide special documentation, customization and
configuration of the Products at a fee mutually determined by the parties. At
Licensee's reasonable request, CAERE will use commercially reasonable efforts to
provide on-site technical assistance visits to Licensee at CAERE's then current
applicable hourly rate (as of Effective Date,[*] per person hour), plus
out-of-pocket travel and lodging expenses. CAERE is not responsible for the
installation or field maintenance of the Products.
10.2 TRAINING. CAERE may, at its discretion, offer training classes at
CAERE's facility. The parties will mutually agree upon Licensee's personnel in
attendance and any fees for such classes.
11. TRADEMARKS; MARKINGS.
11.1 TRADEMARKS AND TRADE NAMES. Subject to Section 11.3, CAERE hereby
grants to Licensee the limited, nonexclusive right during the term of this
Agreement to use the trademarks, trade names and other marketing names used by
CAERE, a current list of which is set forth in Exhibit E hereto (the
"Trademarks"), in connection with its advertising, promotion and marketing of
the Product and in related product brochures and other materials. CAERE may from
time to time attach other or additional Trademarks or names to Products. CAERE
grants no rights other than expressly granted hereunder, and Licensee hereby
agrees to and recognizes CAERE's exclusive ownership of such marks and names and
the renown of CAERE's Trademarks and names worldwide. Licensee agrees not to
take any action inconsistent with such ownership and further agrees to take any
action, at CAERE's cost, including without limitation, the conduct of LEGAL
proceedings, which CAERE deems necessary to establish and preserve CAERE's
exclusive rights in and to its Trademarks and trade names.
11.2 MARKINGS. Any reproduction of CAERE's Trademarks, logos, symbols
and other identifying marks shall be true reproductions. Licensee will not
remove or make or permit alterations to any labels or other identifying markings
placed by CAERE on any Product or Documentation.
11.3 USE OF CAERE'S MARKS AND NAMES. Licensee may use CAERE's
Trademarks in Licensee's advertising and promotional materials subject to
CAERE's prior written approval, which approval shall not be unreasonably
withheld.
11.4 USE OF LICENSEE'S NAMES. CAERE may use Licensee's name and the
name of the Final Products in CAERE promotional literature and marketing
materials, subject to Licensee's prior written approval, which approval shall
not be unreasonably withheld.
7
<PAGE> 8
12. CONFIDENTIALITY.
12.1 CONFIDENTIAL INFORMATION. The term "Confidential Information"
means any technical or non-technical information relating to CAERE, Licensee,
the Products, Documentation and Licensee Products, such as product plans, costs,
prices, names, finances, marketing plans, business opportunities, personnel and
the like, which is disclosed by one party ("Disclosing Party") to the other
party ("Receiving Party") in a written or other tangible form clearly marked
"Confidential" or with a comparable legend. Oral or visual information shall not
be considered Confidential Information unless it is designated confidential by
Disclosing Party at the time of such oral or visual disclosure, and subsequently
reduced to writing clearly marked "Confidential" or with a comparable legend,
and sent to Receiving Party within thirty (30) days after such oral or visual
disclosure.
12.2 NO USE OF CONFIDENTIAL INFORMATION FOR OWN PURPOSE. During this
Agreement, and for one (1) year after the termination of this Agreement,
Receiving Party agrees to keep Confidential Information of Disclosing Party in
confidence, and shall neither disclose it to any third party nor use the same
for any purposes other than those contained in this Agreement. Notwithstanding
the foregoing, Receiving Party shall have no confidentiality obligation and no
use restriction with respect to any information that:
(a) the Disclosing Party approves, by prior written consent,
Receiving Party to release or disclose to any third parties;
(b) the Receiving Party already knows, as evidenced by its written
and dated records, when received from Disclosing Party;
(c) the Receiving Party receives in good faith from a third party
lawfully in possession thereof and having no similar obligation to keep such
information confidential;
(d) is or becomes publicly known to Receiving Party at or after
the Receiving Party receives it from Disclosing Party through no fault of
Receiving Party;
(e) the Disclosing Party furnishes to a third party without a
similar restriction;
(f) the Receiving Party independently develops without using the
Disclosing Party's Confidential Information; or
(g) is disclosed pursuant to the requirement of a governmental
agency or disclosure is required by operation of law.
8
<PAGE> 9
13. INFRINGEMENT INDEMNITY.
13.1 CAERE'S' INDEMNITY.
(a) CAERE shall, at its own expense, defend Licensee against any
third party claim, action, suit or proceeding, claiming that any Product
furnished and used within the scope of this Agreement or the use, sale or other
disposition thereof, infringes any U.S. copyright or U.S. patent right existing
or issued as of the Effective Date. CAERE shall indemnify Licensee for all
losses, damages and all reasonable expenses and costs incurred by Licensee as a
result of a final judgment entered against Licensee in any such claim, action,
suit or proceeding; provided that Licensee gives CAERE prompt written notice of
any such claim, grants CAERE control of the defense and any settlement thereof,
and reasonably cooperates with CAERE at CAERE's expense.
(b) If the Products, in whole or in part, are or in CAERE's
opinion may become, the subject of any claim, action, suit or proceeding for
infringement of, or if it is judicially determined that the Products, in whole
or in part, infringe any third party's U.S. copyright or U.S. patent right, or
if the Product's use is enjoined, then CAERE may, at its option and expense: (1)
procure for Licensee the right to continue the Product's sale and use; (2)
replace or modify the Product so as not to infringe such third party's copyright
or patent right while conforming, as closely as possible, to the Documentation,
or (3) terminate this Agreement as to such Products. The foregoing remedial
actions shall not affect the royalty rates and do not relieve CAERE from its
obligations under Section 13.1(a)
13.2 LIMITATION ON LIABILITY/EXCLUSIVE REMEDY.
(a) CAERE will have no liability under Section 13.1 for any
infringement claim based upon: (i) the use or combination of the Products with
software, hardware, or other materials not provided by CAERE; (ii) components or
software which were not manufactured by CAERE; (iii) the Licensed Components;
and (iv) any use of an altered version of the Products.
(b) SECTIONS 13.1 AND 13.2 STATE CAERE'S ENTIRE OBLIGATION AND
LIABILITY WITH RESPECT TO ANY CLAIMS OF PATENT, COPYRIGHT OR OTHER PROPRIETARY
RIGHT INFRINGEMENT.
14. LICENSEE'S INDEMNITY.
Licensee shall, at its own expense, defend and hold harmless CAERE
against any third party claim, action, suit or proceeding alleging that any
Licensee Product furnished and used within the scope of this Agreement or the
use, sale or other disposition thereof, infringes any U.S. copyright or patent
right existing or issued as of the Effective Date. Licensee shall indemnify
CAERE for all losses, damages and all reasonable expenses and costs incurred by
CAERE as a result of a final judgment entered against CAERE in any such claim,
action, suit or proceeding; provided that CAERE gives Licensee prompt written
notice of any such claim,
9
<PAGE> 10
grants Licensee control of the defense and any settlement thereof, and
reasonably cooperates with Licensee at Licensee's expense.
15. TERM.
The term of this Agreement shall expire 24 months from the Effective
Date unless terminated earlier by either party by delivering written notice (a)
to the other prior to thirty (30) calendar days preceding expiration of the term
of this Agreement or (b) in accordance with Section 16. This Agreement shall
automatically be renewed for an additional one year term unless terminated by
either party by delivering written notice to the other party at least 90 days
prior to the scheduled expiration of the current term.
16. TERMINATION.
16.1 TERMINATION FOR CAUSE BY EITHER PARTY. Subject to Section 16.2,
either party may, by written notice to the other party, terminate this Agreement
upon the occurrence of any one or more of the following events:
(a) Upon the failure of the other party to pay any monies when
payable hereunder, if such default continues for five (5) business days or more
after written notice to the other party;
(b) Upon material failure of the other party to observe, keep or
perform any of the covenants, terms or conditions herein (other than as provided
in (a) above), if such default continues for thirty (30) days after written
notice by the other party; or
(c) If the other party ceases to function as a going concern or to
conduct its operations in the normal course of business.
16.2 TERMINATION BY CAERE. CAERE may, by written notice to Licensee,
immediately terminate this Agreement upon the occurrence of any one or more of
the following events:
(a) In the event Licensee or its sublicensees, are in breach of
Sections 2, 11 or 12.2 of this Agreement;
(b) In the event Licensee or is sublicensees, fail to fully comply
with any and all governmental laws and regulations pertaining to the
exportation from the United States of the Products covered by this Agreement.
16.3 EFFECT OF TERMINATION. Upon termination of expiration of this
Agreement:
(a) All licenses and rights granted to Licensee under this
Agreement shall terminate;
10
<PAGE> 11
(b) Licensee shall promptly return to CAERE all marketing and
selling materials, all manuals, all technical data and all other documents and
copies thereof previously supplied by CAERE, except such documents as are
necessary for Licensee to provide support to End Users;
(c) Licensee shall cease using CAERE's name, trademarks and trade
names and refrain thereafter from representing itself as a Licensee of CAERE;
(d) Termination by either party under this Agreement shall not
affect the sublicenses previously granted by Licensee to End Users; and
(e) Any other rights of either party which may have accrued up to
the date of such termination or expiration shall not be affected.
17. GENERAL TERMS.
17.1 ASSIGNMENT. Licensee may not assign this Agreement in whole or in
part without CAERE's prior written consent which shall not be unreasonably
withheld; provided, however, that no such consent shall be required in
connection with the sale of Licensee's business by merger, reorganization, sale
of assets, sale of stock or otherwise to a party that does not compete with
Caere. Caere may assign this Agreement, its rights, obligations and duties under
this Agreement and the Agreement will inure to the benefit of and be binding on
CAERE's successors and assigns.
17.2 RIGHT TO ENTER AGREEMENT. Each party has full power and authority
to enter into and perform this Agreement, and the person signing this Agreement
on behalf of each has been properly authorized and empowered to enter into this
Agreement. Each party further acknowledges that it has read this Agreement,
understands it, and agrees to be bound by it.
17.3 NOTICES. All notices, requests, consents and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed effective when mailed by registered or certified mail, postage prepaid,
and received by the party at its respective address and representative as set
forth on the signature page below. Either party may change its address by
written notice to the other.
17.4 SEVERABILITY AND HEADINGS. If any of the provisions, or portions
thereof, of this Agreement is held by a court of competent jurisdiction to be
invalid under any applicable statute or rule of law, the parties agree that such
invalidity shall not affect the validity of the remaining portions of this
Agreement and further agree to substitute for the invalid provision a valid
provision which most closely approximates the intent and economic effect of the
invalid provision. Headings used in this Agreement are for reference purposes
only and in no way define, limit, construe or describe the scope or extent of
such section, or in any way affect this Agreement.
17.5 NON-WAIVER. No term or provisions hereof shall be deemed waived
and no breach excused, unless such waiver or consent shall be in writing and
signed by the party
11
<PAGE> 12
claimed to have waived or consented. Any consent by any party to, or waiver of,
a breach by the other, whether express or implied, shall not constitute a
consent to, waiver of, or excuse for any other different or subsequent breach.
17.6 FORCE MAJEURE. If the performance of this Agreement, or any
obligation hereunder, except the making of payments hereunder, is prevented,
restricted or interfered with by reason of fire, flood, earthquake, acts of God,
explosion or other casualty of war, labor dispute, inability to procure or
obtain delivery of parts, supplies or power, violence, any law, order,
regulation, ordinance, demand or requirement of any governmental agency, or
any other act or condition whatsoever beyond the reasonable control of the
affected party, the party so affected, upon giving prompt notice to the other
party, will be excused from such performance to the extent of such prevention,
restriction or interference.
17.7 INDEPENDENT CONTRACTOR. The parties' relationship shall be solely
that of independent contractor and nothing contained in this Agreement shall be
construed to make either party an agent, partner, co-venturer, representative or
principal of the other for any purpose, and neither party shall have any right
whatsoever to incur any liability or obligation on behalf of or binding upon the
other party.
17.8 SURVIVAL. Sections 4.5, 7, 8, and 17 of this Agreement shall
survive the termination of this Agreement.
17.9 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of California, excluding its conflicts of law
principles. Any suit hereunder shall be brought in the federal or state courts
in Santa Clara County, California and Licensee submits to the jurisdiction
thereof. The parties exclude the application of the 1980 United Nations
Convention on Contracts for the International Sale of Goods if applicable.
17.10 ENTIRE AGREEMENT; AMENDMENT. This Agreement, including Exhibits A
through E, which are hereby incorporated into and made a part of this Agreement,
constitute the final, complete and exclusive entire agreement between the
parties with respect to the subject matter hereof and supersedes any previous
proposals, negotiations, agreements, arrangements, or warranties, whether verbal
or written, made between the parties with respect to such subject matter. It is
expressly understood and agreed that sales conditions of the Products as
contained in orders or any other form or request submitted by Licensee to CAERE
shall be subject to the provisions of this Agreement, and in no event shall the
terms and conditions set forth in such order or other business form, whether it
is CAERE's standard or not, be applicable to the transactions between the
parties under this Agreement. This Agreement shall control over any additional
or conflicting term in any of Licensee's purchase orders or other business
forms. This Agreement may only be amended or modified by mutual agreement of
authorized representatives of the parties in writing.
12
<PAGE> 13
17.11 ATTORNEY'S FEES. If any legal action is brought to construe or
enforce any provision of this Agreement, the prevailing party shall be entitled
to receive its attorneys' fees and court costs in addition to any other relief
it may receive.
CAERE CORPORATION KOFAX IMAGE PRODUCTS
100 Cooper Court 3 Jenner Street
Los Gatos, CA 95030 Irvine, CA 92718
By: /s/ SERGE BLANC By: /s/ KEVIN DRUM
------------------------------ ----------------------------------
Name: Serge Blanc Name: Kevin Drum
---------------------------- --------------------------------
Title: VP, ADE Title: VP Marketing
--------------------------- -------------------------------
Date: 10/1/96 Date: 9/19/96
---------------------------- --------------------------------
By: /s/ BLANCHE M. SUTTER
------------------------------
Name: Blanche M. Sutter
----------------------------
Title: Senior VP, CFO
---------------------------
Date: 9/23/96
----------------------------
13
<PAGE> 14
EXHIBIT A
LICENSEE PRODUCTS
Products
Ascent Scan Station
Ascent Scan Lite
Ascent Workstation
14
<PAGE> 15
EXHIBIT B
PRODUCTS
Product (Version and Platform)
- ------------------------------
WordScan Plus 3.0 for Windows 3.1x and Windows 95.
Other products may be added upon mutual consent of the parties.
Lanquages
- ---------
All languages supported by WordScan Plus 3.0 for Windows 3.1x and Windows 95.
15
<PAGE> 16
EXHIBIT C
SOFTWARE LICENSE AGREEMENT
PLEASE READ CAREFULLY BEFORE OPENING THIS ENVELOPE.
THIS AGREEMENT STATES THE TERMS AND CONDITIONS UPON WHICH CAERE CORPORATION
("CAERE") OFFERS TO LICENSE THE ENCLOSED SOFTWARE ("THE SOFTWARE") TO YOU. BY
OPENING THIS ENVELOPE, YOU ARE AGREEING TO BECOME BOUND BY THE TERMS OF THIS
AGREEMENT. IF YOU DO NOT AGREE TO THE TERMS OF THIS AGREEMENT, DO NOT OPEN THE
ENVELOPE. PROMPTLY RETURN THE SOFTWARE TO THE PLACE WHERE YOU OBTAINED IT.
The Software consists, in part, of an OCR Engine the provides OCR functionality.
You acknowledge that the value of the Software in large part consists of the
utility of the OCR Engine embedded therein. You further understand and
acknowledge that the OCR Engine may have utility with or be able to be called by
other software and/or hardware, which CAERE considers to be an unauthorized use
of the OCR Engine and the Software. Accordingly, you agree that you will use the
OCR Engine only as part of the Software, and not in conjunction with, as part
of, or as a component of, other software and/or hardware which make calls to
CAERE's OCR Engine.
1. License. The enclosed Software and documentation ("Documentation")
are licensed, not sold, to you for use only under the terms of this license, and
CAERE reserves all rights not expressly granted to you. This license allows you
to:
(a) for a single-user version, install and use in a limited manner
the Software for internal purposes only on a single computer (the Software is
considered in use when it is installed in the temporary memory, i.e. RAM, or the
permanent memory, i.e. hard drive); (b) for a multi-user version (e.g., a CAERE
10-User Pack), install and use in a limited manner the Software for internal
purposes only for the number of computers or simultaneous users identified in
the Documentation; (c) make one copy of the Software in machine-readable form
solely for backup purposes, provided that your backup is not installed on any
computer. You are only permitted to use the Software and the optical character
recognition ("OCR") software engine ("OCR Engine") embedded therein as described
in the Documentation provided to you.
You must reproduce on any copy all copyright notices and any other ownership,
confidentiality or proprietary legends that are on the original copy of the
Software. The enclosed disk may contain two system versions of the Software (a
Macintosh version and a Windows version) and multiple language versions of the
Software. For a single user license, you may install one system and language
version of the Software on a single computer; you may not install the other
versions on another computer. For a multi-user license, you may install the
Software (regardless of version) only on the number of computers or for the
number of simultaneous users identified in the Documentation. For example, if
you have purchased a 10-user license, you may install, on up to 10 computers or
for 10 simultaneous users, 7 Windows and 3 Macintosh versions in one language,
or any other combination of the two system and language versions you choose that
total ten copies.
2. Restrictions: (a) You may not market, distribute or transfer copies
of the Software or Documentation to others or electronically transfer the
Software from one computer to another over a network except as provided for
above; (b) you may not decompile, reverse engineer, disassemble or otherwise
reduce the code of the Software to a human perceivable form; (c) YOU MAY NOT
MODIFY, ADAPT, TRANSLATE, RENT, LEASE OR LOAN THE SOFTWARE OR DOCUMENTATION OR
CREATE DERIVATIVE WORKS BASED ON THE SOFTWARE OR DOCUMENTATION; (d) The Software
and Documentation are copyrighted. Unauthorized copying of the Software,
including portions thereof or the written materials, is expressly forbidden; (e)
You understand that CAERE may update or revise the Software and in so doing
incurs no obligation to furnish such updates to you; (f) If you upgrade the
Software to a higher-numbered version of the Software or to a comparable CAERE
software product (including versions for different operating systems), this
license is terminated and your rights shall be limited to the license associated
with that product or version.
16
<PAGE> 17
3. Termination. This License is effective until terminated. Except for
Sections 6, 7, and 8, this License shall terminate automatically upon the
earlier of your breach of your obligations under the License or January 1. 2030.
Upon termination, you agree that you will destroy the Software and all copies.
This remedy shall be in addition to any other remedies available to CAERE.
4. Export Control. You agree that the Software and Documentation will
not be shipped, transferred or exported into any country or used in any manner
prohibited by the United States Export Administration Act or any other export
laws, restrictions or regulations.
5. Government End Users. The Software is a "commercial item," as that
term is defined at 48 C.F.R. 2.101 (OCT 1995), consisting of "commercial
computer software" and "commercial computer software documentation," as such
terms are used in 48 C.F.R. 12.212 (SEPT 1995). Consistent with 48 C.F.R. 12.212
and 48 C.F.R. 227.7202-1 through 227.7202-4 (JUNE 1995), all U.S. Government End
Users acquire the Software and Documentation with only those rights set forth
herein.
6. Limited-Warranty. CAERE warrants that the Software and the
accompanying media will perform substantially in accordance with the
specification set forth in the Documentation for a period of ninety (90) days
after your payment of the license fee, when properly installed on a computer for
which a license is granted hereunder. CAERE does not warrant that the operation
of the Software will meet your requirements or operate free from error. CAERE
DISCLAIMS ALL OTHER WARRANTIES AND CONDITIONS EITHER EXPRESS OR IMPLIED,
INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE
AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS. NO ORAL OR WRITTEN INFORMATION OR
ADVICE GIVEN BY CAERE, ITS DEALERS, DISTRIBUTORS, AGENTS OR EMPLOYEES SHALL
CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THIS WARRANTY AND YOU MAY
NOT RELY ON ANY SUCH INFORMATION OR ADVICE. SOME STATES DO NOT ALLOW THE
EXCLUSION OF IMPLIED WARRANTIES, SO THE ABOVE EXCLUSION MAY NOT APPLY TO YOU.
THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS AND YOU MAY ALSO HAVE OTHER LEGAL
RIGHTS WHICH VARY FROM STATE TO STATE.
7. Limited Remedies. If the Software or media fails to perform as
warranted, your sole and exclusive remedy shall be to return the media to CAERE,
postage prepaid, with a copy of the receipt. CAERE shall, at its option, (i)
replace the Software or media with Software or media which conforms to the
warranty, or (ii) correct the error. CAERE SHALL NOT BE LIABLE FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING DAMAGES FOR LOST BUSINESS
PROFITS, LOSS OF INFORMATION, BUSINESS INTERRUPTION, OR THE LIKE) ARISING OUT OF
THE USE OR INABILITY TO USE THE SOFTWARE EVEN IF CAERE OR ITS REPRESENTATIVE
HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME STATES DO NOT ALLOW
THE LIMITATION OR EXCLUSION OF LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES
SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU.
8. Limited Liability. The liability of CAERE for any claims arising out
of this License based upon the Software, regardless of the form of action, shall
not exceed the license fee for the Software.
9. General. This License shall be governed and interpreted in
accordance with the laws of the State of California, USA, without giving effect
to choice of law principles. This License shall not be governed by the United
Nations Convention for the International Sales of Goods, the application of
which is expressly excluded. This License contains the entire agreement between
the parties with respect to the subject matter hereof, and supersedes all prior
agreements or understandings (oral or written).
If you have any questions about this License, contact CAERE at: 100 Cooper
Court, Los Gatos, California 95030, USA, Attn: Contract Administrator.
17
<PAGE> 18
EXHIBIT D
LICENSEE ROYALTIES
ROYALTIES
a. Licensee shall pay to CAERE the following royalties for each copy of
a Product, including Products distributed with Final Product upgrades,
distributed by or on behalf of Licensee during the term of this Agreement:
Ascent Module Royalty
------------- -------
Scan Station [ * ]
Scan Lite [ * ]
Workstation [ * ]
b. Prepaid Royalties. Licensee agrees to pay [ * ] in non-refundable
prepaid royalties to CAERE upon the execution of this Agreement. Such prepaid
royalties are based on 25% of the total revenue forecasted to Caere based on
sales of 1,000 copies sold over 12 months. Prepaid royalties shall be credited
against sales of the Final Products. Additional royalties shall not accrue until
the prepaid royalties have been fully credited against future sales of Final
Products.
c. "Net Selling Price" is defined as the price Licensee charges its End
Users for the Final Products net of returns or allowances according to the
Generally Accepted Accounting Principles (GAAP).
d. Evaluation Copies. Licensee may distribute evaluation copies
("Evaluation Copies") to End Users without incurring a royalty provided that
such Evaluation Copies are designed such that all of the software on the
Evaluation Copies "times out" and becomes unusable no later than 30 days from
the date of receipt of such Evaluation Copies by the End User.
18
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 19
EXHIBIT E
TRADEMARKS, TRADE NAMES
Caere(R)
WordScan(R)
19
<PAGE> 1
EXHIBIT 10.21
SOFTWARE LICENSE AGREEMENT
This License Agreement ("Agreement") made as of October 1, 1993, between
Softbridge Inc., a corporation incorporated under the laws of the Commonwealth
of Massachusetts having its principal place of business at 125 CambridgePark
Drive, Cambridge, Massachusetts 02140 ("Softbridge") and Kofax Image Products
("Customer") having its principal place of business at 3 Jenner Street, Irvine,
CA 92718.
WITNESSETH
WHEREAS, Softbridge has developed and owns certain computer software known as
Softbridge Basic Language herein after referred to as "Product"; and,
WHEREAS, Softbridge desires to license Product to Customer and Customer desires
to license Product from Softbridge on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, license grant and mutual
covenants contained herein, the parties hereto agree as follows:
SECTION I
DEFINITIONS
1.1 "Product" - Product refers to components of the current release of
Softbridge Basic Language ("SBL"), as described in Exhibit A, that is supplied
to Customer under the terms of this Agreement. Product shall be provided in the
form of a run-time version.
1.2 "Documentation" - Documentation shall mean the "SBL - Language Reference
Manual" and the "SBL - API Reference Manual".
1.3 "Product Releases" - A new Release is a major enhancement of Product and
identified with an integer version number i.e., Release 2.0.
1.4 "Maintenance Release" - A Maintenance Release updates an existing Release by
correcting documented bugs or adds minor features and is identified by a decimal
integer appended to the Product Release number. i.e. Release 2.1.
1.5 "Customer" - Customer shall mean Kofax Image Products and its authorized
affiliates and subsidiaries.
1.6 "Application"- The set of current software programs into which Customer
wishes to integrate Product, as described in Exhibit C. Should Customer wish to
integrate Product into future software programs, it shall provide an update
Exhibit to C, and such software programs shall be covered by the terms and
conditions of this Agreement.
1.7 "Product Platform" - Product Platform shall refer to a copy of the Product
which runs within a particular operating environment, such as, Microsoft's
Windows or IBM's OS/2.
CONFIDENTIAL TREATMENT
<PAGE> 2
SECTION 2
LICENSE OF THE PRODUCT
2.1 License. Subject to the terms and conditions of this Agreement, including
the payment of fees (see section 2.2), Softbridge hereby grants to Customer a
personal, non-exclusive, non-transferable, worldwide license to incorporate the
Product in Customer's proprietary computer software Application(s), as described
in Exhibit C, and thereafter market, license and sub-license, without
restriction, the Customer's Application(s) which incorporate, have access to,
and utilize the Product and any modifications, enhancements and alterations made
by the Customer thereto.
Notwithstanding, the Customer may not sub-license the Product to any third party
for the purpose of embedding the Product into another software product nor may
the Customer sub-license the Product alone.
2.2 Consideration. The consideration which the Customer shall pay to Softbridge
for the foregoing license of the Product shall be composed of a one-time license
fee and a royalty payment based on revenues of the Customer's Application(s).
The timetable for and description of these payments are detailed in Exhibit B of
this Agreement.
2.3 Proprietary Rights. The Customer agrees that the Product is and shall remain
the sole property of and proprietary to Softbridge. Nothing in this Agreement
shall diminish or extinguish these rights and no title to or ownership of the
Product is transferred to the Customer. Softbridge agrees that all
modifications, enhancements and alterations made by or exclusively for the
Customer to the Product shall be and remain the sole property of and proprietary
to the Customer. Nothing in the Agreement shall diminish or extinguish these
rights and no rights to such modifications, enhancements and alterations are
granted hereby to Softbridge.
2.4 Delivery of Product. Upon the execution of this Agreement, Softbridge shall
deliver to the Customer the Product,(by magnetic diskettes or other media for
installation on the Customer's computers) and such other diskettes, tapes,
manuals, routines, development materials and other information as may relate to
or comprise the Product including without limitation the items described on
Exhibit A hereto. The Product will be shipped to the Customer (at the address
set forth on the signature page or such address specified by the Customer in
writing.) F.O.B. Cambridge, Massachusetts. Softbridge may package and ship the
product in any commercially reasonable manner.
2.5 Taxes. Prices and fees are exclusive of and Customer is responsible for all
applicable sales, use, personal property, excise or other similar taxes or
export and import taxes, duties and charges, however designated. Consequently,
in addition to the payments due hereunder, the amount of any present or future
sales, use, personal property, or other similar tax and export and import taxes,
duties and charges which become due based on the transactions provided for in
this Agreement shall be paid directly by the Customer or reimbursed by the
Customer to Softbridge, as necessary.
<PAGE> 3
SECTION 3
SUPPORT AND MAINTENANCE
Softbridge will provide Product support and maintenance to the Customer as
described in Exhibit B.
COVENANTS
4.1 Confidentiality. Each party hereto covenants that it will keep confidential
any confidential information relating to the Product or to the other party's
business, finances, marketing and technology to which it obtains access and that
it will take all reasonable precautions to protect such confidential information
of the other party or any part thereof from any use, disclosure or copying,
except to the extent technical information relating to the Product is used, by
the Customer for the purpose of (i) developing Application programs
incorporating the Product, (ii) obtaining any necessary governmental approvals,
or (iii) otherwise performing its rights or obligations as contemplated by this
Agreement. Confidential information of a party shall not include information
which (i) is or becomes available to the public through no fault of the other
party, (ii) is disclosed to the other party by a third party who had lawfully
obtained such information and without a breach of such third party's
confidentiality obligations, (iii) is developed independently by the other
party, or (iv) the party has given written permission to the other party to not
keep confidential.
4.2 Injunctive Relief. In the event of a breach of any of the provisions of
Section 4.1, the Customer agrees that Softbridge will not have an adequate
remedy at law, and accordingly the Customer agrees that Softbridge, in addition
to any other available legal or equitable remedies, is entitled to seek
injunctive relief against such breach without any requirement to post bond as a
condition of such relief.
4.3 Copyright Protection. Neither Softbridge nor the Customer shall publish or
distribute the Product in a manner which would jeopardize or preclude protection
thereof under applicable copyright laws, or would diminish the trade secret
status of the Product.
4.4 Reverse Compiling. The Customer shall not attempt to create or permit others
to attempt to create, by reverse compiling or disassembling or otherwise, any
part of the source program for the Product from the object code or from other
information made available to the Customer.
4.5 Copies. The Customer may make machine readable copies of each Product and
copies of the Documentation and other documents as necessary for the use
authorized in this Agreement. All copies, whether in machine readable, printed,
or other form, are part of the Product and the Customer must include on all such
material Softbridge's notice of its proprietary rights in the form set forth in
the Product as delivered to the Customer.
4.6 Access. The Customer may make the Product accessible to its employees and
agents only, to the extent needed to exercise the licenses granted hereunder.
4.7 General Payment Terms. Softbridge reserves the right to charge interest on
past due amounts at a rate equal to twelve percent (12%) per annum. In the event
that Softbridge is required to take legal action to collect unpaid amounts and
Softbridge is successful in such action, the Customer shall reimburse all costs
and reasonable attorneys fees incurred by Softbridge in such collection.
4.8 Software Certification. Softbridge may, at any time, require Customer to
certify in writing that Customer has performed its obligations pursuant to this
Software License Agreement.
<PAGE> 4
4.9 Product Source Code. Provided all monies due Softbridge have been paid and
that Customer has complied with the terms of this Agreement, Customer shall have
the option to license Product Source Code at Softbridge's then prevailing
charges, terms, and conditions. Notwithstanding the above, the one-time fee for
licensing the source code on the date of this Agreement is acknowledged to be
[*]. If Customer exercises its option to license the source code, the fee
charged to Customer shall be the lesser of the current prevailing charges as
published by Softbridge, or the current [*] fee (increased by a prorated annual
percentage of 10%). This option expires January 1, 1995.
At the request of Customer and with a mutually agreed upon escrow agreement in
place, Softbridge shall deposit one complete current copy of the source code
which comprises the Product with a mutually agreeable escrow agent and shall
promptly update the deposit to reflect the source code of the most recent
Product as Maintenance Releases and Product Releases are made. Customer will
assume all costs and expenses associated therewith including time and handling
changes at Softbridge's current rates.
SECTION 5
WARRANTY AND INDEMNIFICATION
5.1 Express Warranties. Softbridge hereby represents and warrants to Customer
that (i) Softbridge has all rights, absolute title and interest in and to the
Product subject to no adverse claim, lien, encumbrance or license or rights of
any nature of any third party, including, but not limited to, ownership, patent,
trademark, copyright or trade secrecy claims or rights of any kind, (ii) the
Product will substantially conform to its published specifications. (iii) the
Product is not in the public domain and does not infringe upon any intellectual
property rights of any other person, and (iv) Softbridge has the full and
unrestricted right, power and authority to enter into this Agreement, to license
the Product to the Customer and to consummate the transactions contemplated
hereby.
This warranty is limited and shall not apply to: (a) Components of the Product
not of Softbridge origin, or (b) failure of the Product to satisfy this warranty
if determined by Softbridge to result from (i) improper use of the Product, (ii)
operation of the Product outside the environmental conditions specified on the
User Documentation, (iii) modifications to the Product not made by Softbridge,
(iv) other conditions external to the Product that occur following delivery of
the Product by Softbridge, or (v) any Release of the Product that is designated
"beta test software" or "pre-release software" by Softbridge.
5.2 EXCLUSION OF IMPLIED WARRANTIES. ANY AND ALL OTHER WARRANTIES AS TO THE
PRODUCT AND USER DOCUMENTATION, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE OR USE, ARE SPECIFICALLY EXCLUDED, WAIVED
AND NEGATED. SOFTBRIDGE MAKES NO WARRANTIES AS TO THE ACCURACY OR COMPLETENESS
OF USER DOCUMENTATION OR THAT THE PRODUCT IS ERROR FREE.
5.3 LIMITATION OF LIABILITY. (a) NEITHER SOFTBRIDGE NOR ANYONE ELSE WHO HAS BEEN
INVOLVED IN THE CREATION, PRODUCTION OR DELIVERY OF THE PRODUCT SHALL BE LIABLE
FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, SUCH AS, BUT NOT LIMITED
TO, LOSS OF ANTICIPATED PROFITS OR BENEFITS, LOSS RESULTING FROM THE USE OF THE
PRODUCT OR ARISING OUT OF ANY BREACH OF ANY WARRANTY. EXCEPT AS EXPRESSLY
PROVIDED ABOVE, SOFTBRIDGE SHALL HAVE NO LIABILITY FOR ANY CLAIM OF ANY KIND OR
NATURE, INCLUDED BUT NOT LIMITED TO SOFTBRIDGE'S NEGLIGENCE, ARISING OUT OF OR
IN ANY WAY RELATED TO THIS AGREEMENT, OR IN CONNECTION WITH ANY USE OR OTHER
EMPLOYMENT
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 5
OF ANY PRODUCT LICENSED TO THE CUSTOMER HEREUNDER, WHETHER SUCH LIABILITY ARISES
FROM ANY CLAIM BASED UPON CONTRACT, WARRANTY, OR OTHERWISE, WHICH MAY BE
ASSERTED BY THE CUSTOMER.
(b) SOFTBRIDGE'S LIABILITY TO THE CUSTOMER FOR DIRECT LOSS OR DAMAGE WHETHER IN
NEGLIGENCE, CONTRACT OR OTHERWISE ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, OR THE OPERATION OR FAILURE TO OPERATE OF THE PRODUCT, SHALL IN ANY
EVENT BE LIMITED IN RESPECT OF ANY ONE INCIDENT OR SERIES OF CONNECTED INCIDENTS
TO THE SUM OF THE MONIES PAID TO SOFTBRIDGE BY THE CUSTOMER UNDER THIS
AGREEMENT.
5.4 Notification. Each party shall notify the other in writing of any claim or
other legal proceeding involving the Product promptly after it becomes aware of
any such claim of proceeding. The Customer will also report promptly to
Softbridge all claimed or suspected failures of the Product to conform to the
Documentation promptly after the Customer becomes aware of any such claimed or
suspected failure, during the first year of this Agreement.
5.5 Indemnification by Softbridge. Softbridge represents the Product as
delivered to the Customer does not infringe any valid claim of copyright or
trademark of any third party, or any valid claim under any U.S. patent that has
issued as of the date of delivery. Softbridge will defend, indemnify and hold
harmless the Customer against any claim of infringement of the aforementioned
rights, provided that the Customer gives Softbridge prompt written notice
thereof, grants Softbridge sole control of the defense and any related
settlement negotiations and cooperates with Softbridge in the defense of such
claim. In the event that use of the Product is finally enjoined, Softbridge, at
its option, will either (i) procure for Customer the right to use that Product,
(ii) replace the Product with a substantially equivalent program the use of
which is not so enjoined, or (iii) refund the license fee paid for the Product.
Notwithstanding the foregoing, Softbridge shall have no liability to Customer if
the infringement results from (a) use of the Product in combination with
particular software or hardware, if such infringement would not have resulted
from the use of the Product with other software or hardware, whether or not such
other software or hardware is capable of performing the same functions as the
particular software or hardware actually used in combination with the Product,
(b) modifications to the Product not made by Softbridge if such infringement
would have been avoided by the absence of such modification, or (c) use of other
than the version of the Product most recently offered to Customer if such
infringement would have been avoided by use of such a current version. THE
FOREGOING STATES THE ENTIRE LIABILITY OF SOFTBRIDGE WITH RESPECT TO INFRINGEMENT
OF INTELLECTUAL PROPERTY RIGHTS OR CONTRACTUAL RIGHTS OF THIRD PARTIES BY THE
PRODUCT(S) OR ANY PARTS THEREOF.
5.6 Exclusive Remedies. The Customer's exclusive remedies for any claims against
Softbridge arising out of the Agreement shall be limited to the following, at
the option of Softbridge: (a) replacement by Softbridge of the Product with
software that functions substantially in accordance with the User Documentation;
(b) repair by Softbridge of the Product, by patch or work around, so that it
functions substantially in accordance with the User Documentation or, (c) refund
by Softbridge of the monies paid by Customer and received by Softbridge in
respect of the Product. Customer acknowledges that this Section 5.6 limits its
remedies in the event that Softbridge has breached any of its obligations to
Customer. WITHOUT LIMITING THE FOREGOING, SOFTBRIDGE AND THE CUSTOMER AGREE THAT
IF ANY REMEDY HEREUNDER IS DETERMINED TO HAVE FAILED OF ITS ESSENTIAL PURPOSE,
ALL LIMITATIONS AND EXCLUSIONS OF LIABILITY SET FORTH HEREIN SHALL REMAIN IN
EFFECT.
<PAGE> 6
SECTION 6
TERM AND TERMINATION
6.1 Term: Termination for Convenience. This Agreement shall take effect on the
date it is executed by Softbridge and shall continue in effect for one year, and
thereafter from year to year, unless and until terminated by Customer on thirty
(30) days prior written notice, by Softbridge for noncompliance with any of the
terms of this Agreement by Customer, or at any time, by mutual written agreement
of the parties.
6.2 Termination for Cause. The occurrence of any of the following events shall
constitute a default under the terms of this Agreement:
a) The default by Customer in the payment of any amount due hereunder, if
any, after written notice of a thirty (30) day grace period to allow
Customer to cure such default,
b) The breach by Customer of the provisions of Sections 2.1, 2.3, or, 4.1,
if any, after written notice of a thirty (30) day grace period to
allow Customer to cure such breach, if such breach can be cured.
6.3 Effect of Termination. If this Agreement is terminated a) the license
granted hereunder shall be terminated; b) Customer's right to distribute the
licensed Product shall end immediately; and c) Customer shall return or destroy
all copies of Product in Customer's possession and certify in writing that all
copies of Product have been destroyed or returned.
Notwithstanding any provisions herein to the contrary, following any termination
of this Agreement and for so long as thereafter (but not to exceed 12 months) as
is necessary for Customer to satisfy, and solely to satisfy, its then existing
contractual obligations for maintenance services to its end users, Customer
shall have a limited license to use the Product solely for such purposes.
None of Customer's existing sublicenses to its end users for Product in
Customer's proprietary computer software application(s) shall be affected by any
termination of this Agreement and shall remain in full force and effect until
the end of their then respective terms.
6.4 No Damages for Termination. Neither Softbridge nor Customer shall be liable
to the other for damages of any kind, including but not limited to lost profits
or incidental, punitive or consequential damages, relative to termination of
this Agreement in accordance with Section 6.1 or 6.2, even if advised of the
possibility of such damages.
6.5 Survival. Sections 2.3 and 4.1, as well as Customer's obligations to pay
Softbridge all sums due hereunder, shall survive termination or expiration of
this Agreement.
SECTION 7
MISCELLANEOUS PROVISIONS
7.1 Headings. Headings in this Agreement are included solely for convenience of
reference and are not to be considered part of this Agreement.
7.2 No Joint Venture. This is an Agreement between separate legal entities and
neither is the agent or employee of the other for any purpose whatsoever. The
parties do not intend to create a partnership or joint venture between
themselves. Neither party shall have the right to bind the
<PAGE> 7
other to any Agreement with a third party or to incur any obligation or
liability on behalf of the other party.
7.3 Waiver. The failure of either party to exercise any of its rights under this
Agreement or to require the performance of any term or provision of this
Agreement, or the waiver by either party of such breach of this Agreement, shall
not prevent a subsequent exercise or enforcement of such rights or be deemed a
waiver of any subsequent breach of the same or any other term or provision of
this Agreement. Any waiver of the performance of any of the terms or conditions
of this Agreement shall be effective only if in writing and signed by the party
against which such waiver is to be enforced.
7.4 Validity. If any of the terms and provisions of this Agreement are invalid
or unenforceable, such terms or provisions shall not invalidate the rest of the
Agreement which shall remain in full force and effect as if such invalidated or
unenforceable terms or provisions had not been made a part of this Agreement. In
the event this Section 7.4 becomes operative, the parties agree to attempt to
negotiate a settlement that carry out the economic intent of the term(s) found
invalid or unenforceable.
7.5 Force Majeure. If circumstances beyond the control of the parties shall
temporarily make it impossible for either or both of them to perform their
agreements hereunder, then the principles of force majeure shall apply and the
rights and obligations of the parties shall be temporarily suspended during the
force majeure period to the extent that such performance is reasonably affected
thereby.
7.6 Notices. All notices and other communications herein provided for shall be
sent by postage prepaid, registered or certified mail, return receipt requested,
or delivered personally to the parties at their respective addresses as set
forth on the first page of this Agreement or to such other address as either
party shall give to the other party in the manner provided herein for giving
notice. Notice by mail shall be considered given on the date received. Notice
delivered personally shall be considered given at the time it is delivered.
7.7 Transfer, etc. Neither party may assign, transfer or delegate this Agreement
or any such party's right and obligation hereunder to any third party hereto,
without the consent of the other party, which consent shall not be unreasonably
withheld. Each party may assign this Agreement and such party's rights and
obligations hereunder to a subsidiary or affiliate so long as such party remains
primarily liable for its obligations hereunder. In addition, either party may
assign this Agreement, and its rights and obligations hereunder, to any party
that acquires substantially all of such party's stock or assets relating to
that portion of such party's business that is related to the subject of this
Agreement. Any attempted assignment, delegation, or transfer in contravention of
this Agreement shall be null and void.
7.8 Successors and Permitted Assigns. This Agreement shall inure to the benefit
of and be binding upon each of the parties hereto and their respective
successors and permitted assigns.
7.9 Complete Agreement. This Agreement contains the whole Agreement between the
parties concerning the subject matter hereof and there are no collateral or
precedent representations, agreements or conditions not specifically set forth
herein.
7.10 Modification or Amendment. Any modification or amendment of any provision
of this Agreement must be in writing, signed by the parties hereto and dated
subsequent to the date hereof.
7.11 Laws Governing Agreement. The validity of this Agreement and the rights,
obligations and relations of the parties hereunder shall be construed and
determined under and in accordance
<PAGE> 8
with the laws of the State of Massachusetts without giving effect to the
conflict of laws rules of such State.
7.12 No Third Party Beneficiaries. The provisions of this Agreement are solely
for the benefit of the parties hereto, and not for the benefit of any other
person, persons or legal entities.
Customer Softbridge Inc.
Name [SIG] Name [SIG]
----------------------------- ----------------------------------
Title CFO Title GM
---------------------------- ---------------------------------
Date Feb. 3, 1994 Date Feb. 1, 1994
----------------------------- ----------------------------------
<PAGE> 9
EXHIBIT A
SBL SOFTWARE DEVELOPMENT KIT (SDK)
The set of SBL software and documentation components necessary to integrate SBL
into the Application. This set includes
o software files to build a copy of SBL with a Customer specific name that is
different than SBL.DLL,
o C headers files and library files for linking SBL to the Customer's
Application,
o files containing the SBL on-line documentation required for the integration
of the SBL help text into the Customer's Application,
o source files and build scripts for SblEdit. SblEdit can be modified by
Customer and integrated into Application.
o the SBL - Language Reference Manual,
o the SBL - API Reference Manual.
The SBL language will implement and conform with the SBL - Language Reference
Manual. The SBL Application Programmer's Interface (API) will implement and
conform with the SBL - API Reference Manual.
SBL RUNTIME DISK(S)
Contains the SblEdit program, SBL.DLL, SBL on-line help files, and example SBL
programs.
SBL PRODUCT PLATFORMS
The currently defined Product Platforms for SBL are:
Windows and Windws/NT Product Platform
Product shall be provided for the Windows Product Platform operating environment
initially. Other commercially available Product Platform operating environments
will be provided to Customer upon request at no additional license fee.
<PAGE> 10
Exhibit B
1 LICENSE FEES AND ROYALTY PAYMENTS
Customer shall pay to Softbridge for Product a one time license fee and royalty
payments as follows:
1.1 ONE TIME LICENSE FEE. Customer shall pay a one time license fee of [*] as
follows
Date Amount
---- ------
Upon Agreement execution by Customer [ * ]
1.2. ROYALTY FEES
Within 30 days after the last day of each calendar quarter, Customer shall
report and pay Softbridge a royalty fee which is [*] multiplied by Customer's
Net Revenues for all Customer Application(s) which incorporate, have access to,
and utilize the Product commencing with the calendar quarter that Agreement is
executed by Customer.
As used in this Agreement, "Net Revenues" means all amounts actually received by
Customer from unrelated third parties in respect of the licensing of Customer
Applications but not including any taxes, shipping charges, services or like
charges.
2 CONVERSION TO OTHER SBL LICENSE ARRANGEMENTS:
2.1 CONVERTING TO UNLIMITED DISTRIBUTION LICENSE:
Customer shall have the option at the beginning of each calendar quarter
starting with the quarter that is at least two (2) years after the first
commercial shipment of Application which contains SBL to purchase a royalty
free, unlimited distribution license at Softbridge's then prevailing prices and
terms and shall be entitled to a credit based upon the below schedule:
a) [*] of royalties paid in previous four quarters, plus
b) [*] of royalties paid in the four quarter prior to a), plus
c) [*] of royalties paid in the four quarters prior to b).
2.2 CONVERTING TO OTHER ROYALTY BASED LICENSES:
Customer shall have the option at the beginning of each calendar quarter
starting with the quarter that is at least one (1) year after the first
commercial shipment of Application which contains SBL to convert to any other
royalty based license that Softbridge's currently has available. At time of
conversion, Customer will pay royalty and maintenance fees according with the
elected royalty plan.
Notwithstanding the above, the other royalty based licensing alternative at the
date of this Agreement is acknowledged as described in Exhibit D. Customer is
granted an option to convert to that license schedule on the one year
anniversary of the first commercial shipment of Application which contains SBL.
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 11
3 MAINTENANCE:
Until September 31, 1994, Softbridge will, free of charge, provide i) all
Product Releases and Maintenance Releases, as well as ii) up to twelve (12)
telephone calls for support to assist Customer in the use of Product. Technical
phone support will be provided during Softbridge's normal business hours. Phone
support in addition to the aforementioned (12) calls will be billed to Customer
at [*] per phone call.
Starting with the calendar quarter beginning October 1, 1994, Softbridge will
continue providing Product Releases and up to three (3) telephone support calls
on quarterly basis, at no charge to Customer, if at least [*] in royalties are
paid in a previous calendar quarter for each Product Platform requested. If
royalty payment is below this amount, Customer has the option to pay any
difference. If Customer converts to another royalty license schedule,
maintenance will continue as long as minimum royalty payments are paid. Phone
support in addition to the aforementioned three (3) calls will be billed to
Customer at [*] per phone call.
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 12
EXHIBIT C
CUSTOMER APPLICATION(S)
<TABLE>
- --------------------------------------------------------------------------------------------------------
Application Name Description Scheduled Release Date
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
AISP Document Capture Application that provides for indexing
System- Indexing of scanned or imported images.
Module
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 13
SCHEDULE D
SOFTBRIDGE, (embeddable) BASIC LANGUAGE
Royalty Based SBL License Schedule
Effective Date: May 10, 1993
ROYALTY AS NET
SALES % OF MINIMUM ANNUAL UP
REVENUES FRONT PAYMENT
1st Year [*] [*]
2nd Year [*] [*]
3rd Year [*] [*]
4th Year [*] [*]
5th Year and [*] [*]
beyond
Notes
1. Conversion to an unlimited distribution license is available after two
years from initial shipment of customer application that contains SBL.
Royalty payments will be credited at
[ * ]
[ * ]
[ * ]
2. SBL source code is available for an additional one-time charge of [*]
3. Maintenance will continue at no charge if at least [*] in royalties are
paid per year.
CONFIDENTIAL INFORMATION
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 1
EXHIBIT 10.22
SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT is entered into effective as of June 1, 1993 by and between
Pixel Translations, Inc., a California corporation ("Pixel") and Kofax Image
Products, a California corporation ("Kofax").
R E C I T A L S:
Whereas Pixel has developed certain software products; and
Whereas Kofax desires to license certain of the software developed by Pixel for
integration and use within certain software products developed by Kofax:
Now therefore, Pixel and Kofax agree as follows:
1. LICENSES CONVEYED
1.1 Object Code Licenses. Pixel hereby agrees to deliver to Kofax one object
code copy of each of the Products described on Schedule 1 hereto and licenses
Kofax to duplicate and sublicense all or portions of such Products to its
customers, but only integrated within software products of significant value
developed by Kofax which are licensed for use on a single computer. Kofax will
not remove any copyright notices which Pixel shall place in the Products, and a
copyright notice stating "Portions of this product, Copyright (c) 1990, 1991,
1992 Pixel Translations, Inc." (with the years identified revised to reflect
revisions by Pixel), shall be included in at least one appropriate location in
the documentation shipped with all Kofax products incorporating the Products.
Kofax shall not reverse engineer, decompile, or disassemble any object code
delivered by Pixel. Kofax shall only sublicense the object code subject to a
signed or shrink-wrap license agreement which contains all of the restrictions
set forth on Exhibit A hereto.
1.2 Source Code Licenses. Pixel also hereby agrees to deliver to Kofax one copy
of the source code described on Schedule 2 hereto and licenses Kofax to use such
source code, but only for purposes of supporting, modifying or enhancing the
object code otherwise licensed to Kofax pursuant to this Agreement. Kofax shall
not under any circumstances be permitted to duplicate any source code delivered
by Pixel, other than for archival purposes, or to sublicense any other party to
use such source code. Kofax agrees to treat all source code delivered by Pixel
under any circumstances as a confidential trade secret of Pixel and to safeguard
all copies of such source code.
1.3 License Fees. Kofax agrees to pay Pixel the license fees set forth on
Schedule 3 hereto with respect to the Products. In addition to the license fees
set forth on Schedule 3 hereto, Kofax shall pay, or reimburse Pixel for, the
gross amount of all shipping charges and any present or future sales, use,
excise or similar tax or any customs duty applicable to the license or
furnishing of any Products under this Agreement. In lieu of a specific tax,
Kofax may provide Pixel with a tax exemption certificate acceptable to the
applicable taxing authority.
1.4 Kofax Products. Kofax will provide Pixel, without charge, promptly upon
commercial release by Kofax, with one copy of, and one fully paid object code
license to use, any software licensed or sold by Kofax which contains any
portion of any of the Products, including any Product Enhancement or Product
Update. During the term of this Agreement, Kofax shall also provide Pixel with
reasonable use for evaluation purposes, at Pixel's facilities, of any hardware
products sold by Kofax which contain any portion of any of the Products.
-1-
CONFIDENTIAL TREATMENT
<PAGE> 2
2. PRODUCT UPDATES AND PRODUCT ENHANCEMENTS
2.1 Products. "Products" as used in this Agreement shall mean the software
products described on Schedule 1 hereto, any "Product Updates" and any "Product
Enhancements" provided to Kofax by Pixel pursuant to this Agreement, and any
additional products provided by Pixel which Pixel and Kofax agree shall be
provided to Kofax pursuant to this Agreement. When a Product Update, a Product
Enhancement or an additional product is delivered to Kofax pursuant to this
Agreement, it shall be added to the Products deemed to be described on Schedule
1 to this Agreement and Kofax shall have the license rights set forth in Section
1.1 of this Agreement with respect to such Product. In addition, when a Product
Update or a Product Enhancement is delivered to Kofax pursuant to this
Agreement, to the extent that any source code which Kofax has been licensed to
use pursuant to Section 1.2 of this Agreement has been modified or replaced by
such Product Update or Product Enhancement, Kofax shall receive a copy of the
licensed source code as so modified or replaced and Kofax's license pursuant to
Section 1.2 hereof shall be extended to include such additional source code upon
all the terms set forth herein with respect to source code licenses.
2.2 Product Updates. During the term of this Agreement, Pixel shall deliver to
Kofax, for the support fees set forth on Schedule 3 hereto, all Product Updates
which Pixel releases for the Products licensed by Kofax under this Agreement.
For purposes of this Agreement, a "Product Update" shall mean a revised version
of a Product which is required due to minor modifications or additions by the
provider of hardware or software which interacts with the Product or is
otherwise released by Pixel, in its discretion, as a "Product Update". To the
extent that creating the revisions to a Product required as a result of the
modifications or additions by a provider of hardware or software requires more
than eight hours of skilled professional labor by Pixel, Pixel may, in its
discretion, release the revised version of the Product as a Product Enhancement
rather than a Product Update.
2.3 Product Enhancements. Pixel shall deliver to Kofax, for the support fees set
forth on Schedule 3 hereto, four Product Enhancements per complete calendar year
during the term of this Agreement, for the ISIS Drivers licensed by Kofax as
Products under this Agreement. Each such Product Enhancement shall consist of a
new driver for support of new or substantially modified scanners or file formats
in a particular operating environment (such as, Windows, Windows NT, Macintosh,
OS-2, or MS-DOS). The obligation of Pixel to provide such Product Enhancements
shall be subject to the availability of an adequate number of new or
substantially modified available scanners (desktop scanners in production
release, free from substantial defects) for the environment.
2.4 Equipment Loans. Pixel's obligation to provide any Product Update pursuant
to Section 2.2 hereof, or any Product Enhancement pursuant to Section 2.3
hereof, shall be subject to Kofax providing all hardware and software required
for developing and testing such Product Update or Product Enhancement in those
cases when Pixel is unable to obtain, through reasonable efforts, access to such
hardware or software at no charge from the manufacturer.
3. NEW PRODUCTS
Pixel may, from time to time, offer Kofax the opportunity to obtain licenses to
additional products not previously licensed by Kofax pursuant to this agreement,
including additional and/or new products and Product Enhancements which Pixel is
not obligated to provide to Kofax pursuant to Section 2.3 hereof. To the extent
that Pixel and Kofax agree in writing, such additional products may be added to
this Agreement, upon such additional terms and conditions as may be agreed by
Pixel and Kofax in writing.
4. SUPPORT
4.1 Telephone Support. Pixel will provide telephone support for the Products
during Pixel's normal business hours for the support fees set forth on Schedule
3 hereto during the term of this Agreement.
-2-
<PAGE> 3
4.2 Correction of Defects. During the term of this Agreement, as part of Pixel's
support obligation, Pixel will use commercially reasonable efforts to respond to
and correct defects in the Products identified by Kofax within the following
time periods (in working days):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Defect Description Respond Correct
Level Within Within
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Critical Product crashes under normal use or is unusable as a whole 1 day 10 days
Serious Important feature is unusable or performance is unacceptable 2 days 30 days
Minor Less important feature is unusable or easy workaround 5 days 90 days
</TABLE>
Pixel shall have no obligation with respect to correction of any defect in the
Products other than to use commercially reasonable efforts pursuant to this
Section to correct the defect; provided, however, that to the extent the defect
is identified by Kofax during the Warranty Period for the Product, as defined in
Section 5 hereof, then Pixel shall also have the warranty obligations expressly
set forth in such Section 5.
5. LIMITITED WARRANTY
Kofax is sophisticated, experienced and technically competent with expertise in
products of the type provided under this Agreement. Kofax has tested samples of
the Products and has made its own determination that the Products meet the
requirements of Kofax. Pixel warrants to Kofax only that each Product delivered
under this Agreement will perform substantially in accordance with the
specifications set forth in Exhibit B. This warranty is made for a period of one
year from the date of delivery of the Product to Kofax (the "Warranty Period").
To the extent that Kofax advises Pixel in writing during the Warranty Period
that a Product does not perform substantially in accordance with the
specifications set forth in Exhibit B with respect to such Product, Pixel shall
correct the defect within a reasonable time period. If Pixel is unable to
correct the defect within a reasonable period of time, or in its discretion
elects not to undertake, or to discontinue, efforts to correct the defect, Pixel
will refund any license fees paid by Kofax with respect to the defective
Product. These are Kofax's sole and exclusive remedies for any breach of
warranty.
THE EXPRESS WARRANTY PROVIDED IN THIS SECTION 5 IS IN LIEU OF ALL OTHER
WARRANTIES, AND PIXEL DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
ARISING FROM THE COURSE OF DEALING BETWEEN THE PARTIES OR USAGE OF TRADE. PIXEL
WILL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE TO KOFAX, OR ANY END-USER OR
TRANSFEREE FROM KOFAX, FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
WHATEVER NATURE ARISING OUT OF THIS AGREEMENT OR RESULTING FROM THE SUBLICENSE
OR PROVISION OF PRODUCTS OR SERVICES BY KOFAX OR RELICENSE OR USE BY ANY
END-USER OR TRANSFEREE OF SUCH PRODUCTS, EVEN IF PIXEL HAS BEEN NOTIFIED OF
THE POSSIBILITY OF SUCH DAMAGES.
6. SUITABILITY/LIMITATIONS ON REMEDIES AND LIABILITY
Kofax hereby understands that it is responsible for satisfying itself as to the
suitability of Products for the purposes for which Products are licensed.
The express remedies set forth in this Agreement are in lieu of all obligations
or liabilities on the part of Pixel for damages resulting from breach of
warranty, breach of contract, negligence or on any other legal theory. The
limitations on remedies, liability and damages set forth in this Agreement, and
the corresponding allocations of risks, are essential elements of the bargain
between the parties and are knowingly agreed to by both parties.
-3-
<PAGE> 4
IN NO EVENT SHALL PIXEL BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE
PRODUCTS OR SERVICES, LOST PROFITS, OR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
INCIDENTAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING IN
ANY WAY OUT OF THE LICENSE OR PROVISION OF, OR AGREEMENT TO LICENSE OR PROVIDE,
PRODUCTS OR SERVICES TO KOFAX. THIS LIMITATION SHALL APPLY EVEN IF PIXEL HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE
OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
Neither Pixel nor Kofax shall by reason of the termination of this Agreement
under any circumstances be liable to the other for compensation, reimbursement
or damages on account of the loss of prospective profits on anticipated sales,
or on account of expenditures, investments, leases or commitments in connection
with the business or goodwill of Pixel or Kofax, or otherwise.
7. INDEMNIFICATION
7.1 Indemnity. Pixel will defend, at its own expense, any claim, suit or
proceeding brought against Kofax to the extent it is based upon a claim that any
software licensed by Pixel to Kofax pursuant to this Agreement infringes upon
any patent, copyright or trade secret of any third party. Kofax agrees that it
shall promptly notify Pixel in writing of any such claim or action and give
Pixel full information and assistance in connection therewith. Pixel shall have
the sole right to control the defense of any such claim or action and the sole
right to settle or compromise any such claim or action. If Kofax complies with
the provisions hereof, Pixel will pay all damages, costs and expenses finally
awarded to third parties against Kofax in such action. If such software is, or
in Pixel's opinion might be, held to infringe as set forth above, Pixel may, at
its option, replace or modify such software so as to avoid infringement, or
procure the right for Kofax to continue the use and sublicense of such software.
If neither of such alternatives is, in Pixel's opinion, commercially reasonable,
the infringing software shall be returned to Pixel and Pixel's sole liability,
in addition to its obligation to reimburse awarded damages, costs and expenses
set forth above, shall be to refund the amounts paid to license such software by
Kofax.
7.2 Limitations. Pixel will have no liability for any claim of infringement
arising as a result of Kofax's use of the licensed software in combination with
any items not supplied by Pixel, or any modification of the licensed software by
Kofax or third parties where such infringement would not exist through use of
the unmodified licensed software alone.
7.3 Entire Liability. THE FOREGOING STATES THE ENTIRE LIABILITY OF PIXEL TO
KOFAX OR ANY SUBLICENSEE OF SOFTWARE CONCERNING INFRINGEMENT OF INTELLECTUAL
PROPERTY RIGHTS, INCLUDING BUT NOT LIMITED TO, PATENT, COPYRIGHT AND TRADE
SECRET RIGHTS.
8. CONFIDENTIALITY
Pixel and Kofax may disclose certain information which the disclosing party
considers to be confidential. In order for any information disclosed by one
party to the other to be treated as "Confidential Information" protected by this
Section 8, it must be (i) prominently marked as confidential when disclosed in
writing, or (ii) if disclosed orally, identified as confidential at time of
disclosure and reproduced in writing, marked confidential and sent to the
receiving party within thirty (30) days after it is first communicated to such
party; provided, however, that under any circumstances all source code received
from Pixel and the pricing information set forth on Schedule 3 hereto shall be
treated as Confidential Information. Confidential Information shall not be
deemed to include information which is published or otherwise becomes available
to the public other than by a breach of this Agreement; or is lawfully received
by the receiving party from a third party without any confidentiality
obligations; or was known by the receiving party prior to its receipt from the
disclosing party.
-4-
<PAGE> 5
The receiving party shall not during the Term of this Agreement and for a period
of five years after the termination thereof, use for any purpose other than as
contemplated by this Agreement, or divulge to any third party, any Confidential
Information; provided, further, however, that such obligations with respect to
any source code received from Pixel shall continue in perpetuity.
9. TERM AND TERMINATION
9.1 Term. The term of this Agreement shall commence on the effective date set
forth above and shall continue for a period of one year from that date (the
"Initial Term"). Unless Kofax or Pixel gives written notice that it elects not
to renew the Agreement at least thirty (30) days prior to the end of the Initial
Term, the Agreement shall automatically renew for an additional one year term (a
"Subsequent Term"). Similarly, unless Kofax or Pixel gives written notice that
it elects not to renew the Agreement at least thirty (30) days prior to the end
of a Subsequent Term, the Agreement shall automatically renew for an additional
one year Subsequent Term; provided, however, that the Agreement shall not be
automatically renewed under any circumstances for more than a total of four
Subsequent Terms.
9.2 Termination. If either party defaults in the performance of any material
provision of this Agreement, then the non-defaulting party may terminate this
Agreement by written notice to the defaulting party that if the default is not
cured within thirty days (30) days the Agreement will be terminated. In
addition, in the event that any amount payable by Kofax pursuant to this
Agreement has not been paid within ten (10) days following written notice of
delinquency, Pixel shall be entitled to terminate this Agreement immediately
upon written notice to Kofax.
9.3 Effects of Termination. In the event that this Agreement is terminated by
reason of an early nonrenewal election made by Pixel pursuant to Section 9.1
hereof, or in the event that it is terminated by Kofax pursuant to Section 9.2
hereof, then Kofax shall have the right to grant object code licenses for the
Products, but only integrated with hardware and/or software products of
significant value provided by Kofax, and subject to the other restrictions on
such grants of object code licenses set forth in this Agreement, for the
remainder of the remaining possible Subsequent Terms otherwise available under
this Agreement. In the event that this Agreement is terminated pursuant to
Section 9.1, other than by reason of an early nonrenewal election made by Pixel
pursuant to Section 9.1 hereof, or in the event that this Agreement is
terminated by Pixel pursuant to Section 9.2 hereof, all rights of Kofax pursuant
to this Agreement shall be immediately terminated and Kofax shall immediately
destroy all object code copies of the Products licensed to it which have not
been sublicensed to customers of Kofax and shall immediately return to Pixel all
source code materials received from Pixel and any copies of such materials which
Kofax may have made; however, the rights of sublicensees of the Products from
Kofax shall not be affected by such termination of the Agreement. Under no
circumstances shall Pixel be obligated to refund any amount to Kofax with
respect to any licensee fee paid or Discount Allowance granted pursuant to
Schedule 3 hereto.
10. GENERAL
10.1 Audit Rights. Pixel shall have the right, at any time up to one year after
the termination of this Agreement to have Kofax's books and records related to
the sublicense of the Products examined by an independent certified public
accountant selected by Pixel. If such examination reveals that the license fees
paid by Kofax pursuant to this Agreement are understated by 5% or more for any
period, Kofax shall reimburse Pixel for the reasonable fees and expenses of such
certified public accountant.
-5-
<PAGE> 6
10.2 Notices. Any notice required to be given hereunder shall be in writing and
may be given personal delivery (including by professional courier) at, or
mailing (by first class receipted prepaid mail) to, the address of the party set
forth below, addressed to the attention of "Contracts Administrator" in the case
of Pixel and to the attention of Contracts Administrator in the case of Kofax,
or such other address as such party may have notified the other of pursuant to
this Section. In the case of personal delivery, such notice shall be deemed to
have been given upon the date of such delivery. In the case of mailing, such
notice shall be deemed to have been given seven days after such mailing.
10.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to its
provisions concerning the applicability of the laws of other jurisdictions. Any
suit hereunder shall be brought in the federal or state courts in the districts
which include Cupertino, California, and Kofax hereby agrees and submits to the
personal jurisdiction and venue thereof
10.4 Relationship of Parties. Nothing in this Agreement shall constitute or be
deemed to constitute a partnership between the parties. The relationship between
Pixel and Kofax shall be that of licensor and licensee. The officers, agents and
employees of one party shall under no circumstances be considered the agents,
employees or representatives of the other party. Neither Kofax nor Pixel shall
have the right to enter into any contracts or binding commitments, or make any
representations, in the name of or on behalf of the other in any respect
whatsoever.
10.5 Assignment. Neither party will assign any of its rights or obligations
hereunder, whether voluntarily or by operation of law, without the prior written
consent of the other party, other than as part of an acquisition of the party,
whether by merger or sale of substantially all of the assets of the party.
Subject to the foregoing, this Agreement will inure to the benefit of and be
binding upon the successors and assigns of the parties.
10.6 Force Majure. Neither party shall be liable for any failure to perform any
of its obligations hereunder (other than the payment of money) which results
from act of God, the elements, fire, flood, component shortages, force majeure,
riot, insurrection, industrial dispute, accident, war, embargoes, legal
restrictions or any other cause beyond the control of the party.
-6-
<PAGE> 7
10.7 Entire Agreement. All previous agreements and arrangements (if any) made by
the parties, and relating to the subject matter hereof, including any agreements
concerning confidentiality of information, are hereby superseded and this
Agreement embodies the entire understanding of the parties, there being no
promises, terms, conditions or obligations, oral or written, express or implied,
other than those contained herein. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument. This Agreement shall supersede any
provision of any purchase order submitted by Kofax; notwithstanding any
provision in such purchase order to the contrary.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
Pixel Translations, Inc.
10062 Miller Avenue, Suite 205
Cupertino, CA 95014
USA
By: [Sig unreadable]
--------------------------------------
Title: Vice President
-----------------------------------
Kofax Image Products
3 Jenner Street
Irvine, CA 92718
USA
By: [Sig unreadable]
--------------------------------------
Title: Vice President and Secretary
-----------------------------------
-7-
<PAGE> 8
SCHEDULE 1
OBJECT CODE LICENSES
ISIS Drivers for Windows 3.X.
ISIS Drivers for DOS.
-8-
<PAGE> 9
SCHEDULE 2
SOURCE CODE LICENSES
None.
-9-
<PAGE> 10
SCHEDULE 3
LICENSE AND SUPPORT FEES
Binary License fees for ISIS Drivers
Within thirty days of the end of each calendar quarter, any portion of which
falls within the term of the Agreement, Kofax shall notify Pixel of the number
of copies of the Product distributed by Kofax during the calendar quarter, both
in the "single driver" category and in the "driver set" category for each
licensed environment. This report shall indicate all copies of the Products
which have been distributed, including indicating any copies as to which a
royalty is not due pursuant to the provisions hereof, whether because it is a
promotional copy or a product upgrade as to which a license fee was previously
paid.
License fees due under this Agreement will be determined by one of the two
following schedules. Any licenses granted in excess of those prepaid prior to
their shipment shall be paid for under the "Quarterly Schedule" and shall be
paid for at the time of the quarterly notification either in cash or by
allocation of a previously granted Discount Allowance. Kofax may also, at any
time, elect to prepay some number of licenses under the "Prepay Schedule".
Prepayment at the time of such election may also be made either in cash or by
allocation of a previously granted Discount Allowance.
PREPAY Schedule
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Quantity 50 100 250 500 1,000 2,500 5,000 10,000
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Individual [*] [*] [*] [*] [*] [*] [*] [*]
(except Ricoh
410/510/520)
- -------------------------------------------------------------------------------------------
Set (5 or more; [*] [*] [*] [*] [*] [*] [*] [*]
except Ricoh
410/510/520)
- -------------------------------------------------------------------------------------------
Set (5 or more; [*] [*] [*] [*] [*] [*] [*] [*]
w/ Ricoh
410/510/520)
- -------------------------------------------------------------------------------------------
</TABLE>
QUARTERLY Schedule
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Quantity 1- 50- 100- 250- 500- 1,000- 2,500 5,000+
49 99 249 499 999 2,499 4,999
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Individual [*] [*] [*] [*] [*] [*] [*] [*]
(except Ricoh
410/510/520)
- ------------------------------------------------------------------------------------------
Ricoh 410/5XO [*] [*] [*] [*] [*] [*] [*] [*]
- ------------------------------------------------------------------------------------------
Set (5 or more; [*] [*] [*] [*] [*] [*] [*] [*]
except Ricoh
410/5XO)
- ------------------------------------------------------------------------------------------
Set (5 or more; [*] [*] [*] [*] [*] [*] [*] [*]
w/ Ricoh
410/5X0)
- ------------------------------------------------------------------------------------------
</TABLE>
-10-
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 11
Kofax shall have the right to distribute, royalty free, Products included as
part of Kofax products which are Promotional Distributions. For these purposes,
"Promotional Distributions" shall include only distributions of the Products,
integrated with Kofax's products, for demonstration or promotional purposes,
when the price charged is equal to or less than the actual cost of the goods
distributed, plus reasonable shipping and handling charges. However, Products
which are distributed at such a price as part of an offer or promotion including
any other Kofax product which is not being distributed at a price equal to or
less than the actual cost of the goods distributed, plus reasonable shipping and
handling charges, shall not be considered Promotional Distributions.
Kofax shall have the right to distribute, royalty free, Product Updates and
Product Enhancements as product upgrades to Kofax's customers who have been
previously licensed to use the Product which is so upgraded and for which a
license fee has previously been paid pursuant to this Agreement.
A maximum of [*] will be due for actual licenses granted during any four
consecutive calendar quarters for each licensed environment. Prepayments for
licenses used beyond the period in question will not be included for purposes of
applying this maximum.
Support Fees for ISIS Drivers
Within 30 days of each annual renewal of this Agreement, whether or not such
renewal is automatic, Kofax shall pay [*]for Support Fees for ongoing Product
Updates, Product Enhancements, and telephone support.
Notwithstanding the foregoing, if License Fees for ISIS drivers, due and paid in
the previous 12 months, exceed [*] then no Support Fees shall be due.
-11-
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 12
EXHIBIT A - LICENSE AGREEMENT
This Software License Agreement (the "Agreement") grants you a nonexclusive
license to use the software supplied to you by Kofax Image Products
("Licensor"), including the software supplied to you on disks, diskettes and/or
as part of the equipment supplied by Licensor (the "Software"). It also imposes
certain restrictions on your use of the Software. Licensor, and/or its
licensors, retains ownership of the Software and no rights are granted to you
other than a license to use the Software on the terms expressly set forth in
this Agreement.
For backup purposes, you may make a copy of the Software supplied on disks
and/or diskettes, but you may not use the backup copy other than as an archive
for the replacement of the primary copy. You must include on the backup copy all
copyright and other notices included on the Software as supplied by Licensor.
You may not otherwise make any copy of any of the Software, and you may not make
any copy of any of the written materials accompanying the Software and/or the
equipment supplied by Licensor.
You acknowledge that the underlying structure, sequence, organization and source
code of the Software is a valuable trade secret of Licensor and/or its
licensors, and you agree not to decompile, disassemble or reverse engineer, or
modify in any way, any of the Software.
You may not transfer or assign your rights to use the Software, unless Licensor
receives the written agreement of the transferee to be bound by all of the terms
of this Agreement.
Upon violation of any of the provisions of this Agreement, your rights to use
the Software shall automatically terminate and you shall be obligated to return
the Software to Licensor, or destroy all copies of the Software. This
Agreement shall be governed by California law, other than its provisions
concerning the applicability of laws of other jurisdictions.
You acknowledge that the export of the Software is governed by the export
control laws of the United States of America and other countries. You agree to
comply with all such export control laws.
If you are a unit of the Department of Defense, you acknowledge that the
Software is provided as "commercial computer software" under the terms and
conditions of this Agreement, as Licensor's standard software license agreement,
in accordance with clause 252.211 of the Federal Acquisition Regulations and its
successors. If you are a civilian agency, you acknowledge that the Software is
"restricted computer software", is licensed only with "restricted rights" and
use, reproduction or disclosure is subject to restrictions set forth in
subparagraphs (a) through (d) of clause 52.227-19 of the Federal Acquisition
Regulations and its successors, and for purposes of subparagraph (d) thereof,
you further acknowledge that the Software is unpublished and all rights are
reserved under the copyright laws of the United States.
-12-
<PAGE> 13
EXHIBIT B - PRODUCT SPECIFICATIONS
ISIS Drivers object code shall be that machine readable code which performs the
following functions and/or meets the following specifications:
1. The drivers conform to the ISIS Specification as documented in the latest
revisions of the ISIS Application Developer's Toolkit Manual and the ISIS
Scanner Driver Developer's Toolkit Manual.
2. The drivers pass the test suite "SCANTEST".
3. The drivers have reasonable performance which is not inferior to the
performance exhibited as of the effective date of this Agreement.
4. The drivers must not, in and of themselves, cause the scanner to start and
stop if such starting and stopping causes reduced image quality.
5. The drivers must not use more than 64K of memory for code and data.
6. The drivers will follow the internationalization guidelines of the applicable
operating environment and will include source code as necessary to allow
internationalization.
7. The drivers must support the following scanners and image formats: In the
Windows environment version:
Abaton Transcribe 300
Abaton 300/S
Abaton 300/GS
Abaton 300/Color
Apple One Scanner
Canon IX-12
Canon IX-12F
Canon IX-30
Chinon DS-3000
Complete PC Page Scanner
Complete PC Flatbed Scanner (HP)
Datacopy 730
Datacopy 730 GS
Datacopy 830
Datacopy GS Plus
Datacopy Jetreader
Dest PC Scan+
Dest PC Scan 1000
Dest 2000
Dest 3000
Epson ES-300C/GT-6000
Epson ES-600C/GT-6500
Epson ES-800C/GT-8000
Epson GT-4000
Fujitsu Scan Partner 10 (w/Adaptec)
Fujitsu 3093E (w/Kofax 9200)
-13-
<PAGE> 14
Fujitsu 3096E+ (w/Kofax 9200)
Fujitsu 3096G (w/ Adaptec)
Hewlett-Packard ScanJet
Hewlett-Packard ScanJet Plus
Hewlett-Packard IIc
Hewlett-Packard IIp
Hewlett-Packard Accupage 1.0
Howtek Personal Color Scanner
IBM 3119 (MCA only)
Microtek MS-300A
Microtek MS-300C
Microtek MSF-300A
Microtek MSF-300C
Microtek MSF-300G
Microtek MSF-300Q
Microtek MSF-300Z (no color support)
Microtek MS-400G
Microtek MS-II
Panasonic FX-RS307
Panasonic FX-RS505
Panasonic FX-RS506
Pentax (HP)
Princeton Graphics LS300
Ricoh IS 50
Ricoh IS 60
Ricoh IS 410
Ricoh IS 510
Ricoh IS 520
Sharp JX-320
Sharp JX-610
Tamarac TS-6000C
Tamarac TS-8000C
UMAX UG-630
UMAX UC-630
UMAX UC-840
UMAX OA-1
UMAX 1200-C
TIFF Raw (8-bit and 16-bit)
TIFF Packbits
TIFF CCITT Group 3
TIFF CCITT Group 3 modified
TIFF CCITT Group 4
PCX
PDA Raw
PDA CCITT Group 3
PDA CCITT Group 4
In the DOS environment version:
Abaton Transcribe 300
Abaton 300 / S
-14-
<PAGE> 15
Abaton 300 / GS
Abaton 300 / Color
Apple One Scanner
Canon IX-12
Canon IX-12F
Canon IX-30
Chinon DS-3000
Complete PC Page Scanner
Complete PC Flatbed Scanner (HP)
Datacopy 730
Datacopy 730 GS
Datacopy 830
Datacopy GS Plus
Datacopy Jetreader
Dest PC Scan+
Dest PC Scan 1000
Dest 2000
Dest 3000
Epson ES-300C/GT-6000
Epson ES-600C/GT-6500
Epson ES-800C/GT-8000
Epson GT-4000
Fujitsu Scan Partner 10 (w/Adaptec)
Fujitsu 3096G (w/Adaptec)
Hewlett-Packard ScanJet
Hewlett-Packard ScanJet Plus
Hewlett-Packard IIc
Hewlett-Packard IIp
Howtek Personal Color Scanner
IBM 3119 (MCA only)
Microtek MS-300A
Microtek MS-300C
Microtek MSF-300A
Microtek MSF-300C
Microtek MSF-300G
Microtek MSF-300Q
Microtek MSF-300Z (no color support)
Microtek MS-400G
Microtek MS-II
Panasonic FX-RS307
Panasonic FX-RS505
Panasonic FX-RS506
Pentax (HP)
Princeton Graphics LS300
Ricoh IS 50
Ricoh IS 60
Ricoh IS 410
Ricoh IS 510
Ricoh IS 520
Sharp JX-320
Sharp JX-610
-15-
<PAGE> 16
Tamarac TS-6000C
Tamarac TS-8000C
UMAX UG-630
UMAX UC-630
UMAX UC-840
UMAX OA-1
UMAX 1200-C
TIFF Raw (8-bit and 16-bit)
TIFF Packbits
TIFF CCITT Group 3
TIFF CCITT Group 3 modified
TIFF CCITT Group 4
PCX
PDA Raw
PDA CCITT Group 3
PDA CCITT Group 4
-16-
<PAGE> 17
MODIFICATION TO SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT is entered into effective as of July 1, 1995 by and between Pixel
Translations, Inc., a California corporation ("Pixel") and Kofax Image Products,
a California corporation ("Kofax") to modify the Software License Agreement
between the parties dated June 1, 1993 as follows:
The following Schedules and Exhibits shall be replaced by those Schedules and
Exhibits which are attached to and part of this Agreement:
Schedule 1 - Object Code Licenses
Schedule 3 - License and Support Fees
Exhibit B - Product Specifications
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in their
respective names and by their duly authorized officers.
Pixel Translations, Inc.
3031 Tisch Way, Suite 310
San Jose, CA 95128
USA
By: /s/
--------------------------------------
Title: Director, Sales & Marketing
-----------------------------------
Kofax Image Products
3 Jenner Street
Irvine, CA 92718
USA
By: /s/
--------------------------------------
Title: Director Marketing
-----------------------------------
-1-
CONFIDENTIAL TREATMENT
<PAGE> 18
SCHEDULE 1
OBJECT CODE LICENSES
ISIS Drivers for Windows 3.X.
ISIS Drivers for Kodak Imagelink Scanners for Windows 3.X.
-2-
<PAGE> 19
SCHEDULE 3
LICENSE AND SUPPORT FEES
Binary License fees for ISIS Drivers
Within thirty days of the end of each calendar quarter, any portion of which
falls within the term of the Agreement, Kofax shall notify Pixel of the number
of copies of the Product distributed by Kofax during the calendar quarter, both
in each of the "single driver" categories and in the "driver set" categories for
each licensed environment. This report shall indicate all copies of the Products
which have been distributed, including indicating any copies as to which
a royalty is not due pursuant to the provisions hereof, whether because it is a
promotional copy or a product upgrade as to which a license fee was previously
paid.
License fees due under this Agreement will be determined by one of the two
following schedules. Any licenses granted in excess of those prepaid prior to
their shipment shall be paid for under the "Quarterly Schedule" and shall be
paid for at the time of the quarterly notification either in cash or by
allocation of a previously granted Discount Allowance. Kofax may also, at any
time, elect to prepay some number of licenses under the "Prepay Schedule".
Prepayment at the time of such election may also be made either in cash or by
allocation of a previously granted Discount Allowance.
PREPAY Schedule
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Quantity 10 50 100 250 500 1,000 2,500 5,000 10,000
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Level 1 Driver [*] [*] [*] [*] [*] [*] [*] [*] [*]
- --------------------------------------------------------------------------------------------------------------
Level 2 Driver [*] [*] [*] [*] [*] [*] [*] [*] [*]
- --------------------------------------------------------------------------------------------------------------
Level 3 Driver [*] [*] [*] [*] [*] [*] [*] [*] [*]
- --------------------------------------------------------------------------------------------------------------
Set: All Level 1 [*] [*] [*] [*] [*] [*] [*] [*] [*]
- --------------------------------------------------------------------------------------------------------------
Set: All Drivers [*] [*] [*] [*] [*] [*] [*] [*] [*]
- --------------------------------------------------------------------------------------------------------------
</TABLE>
QUARTERLY Schedule
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Quantity 1-9 10- 50- 100- 250- 500- 1,000- 2,500- 5,000- 10,000-
49 99 249 499 999 2,499 4,999 9,999 24,999
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Level 1 Driver [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------------------
Level 2 Driver [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------------------
Level 3 Driver [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------------------
Set: All Level 1 [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------------------
Set: All Drivers [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Level 1 scanner drivers are most drivers listed in Exhibit B except:
Level 2 drivers:
Ricoh IS410, Fujitsu 3096G/3097G, Kofax/Xionics Simplex, Panasonic sheetfed
Level 3 drivers:
Ricoh IS510/520, Fujitsu 3099A/G/AG, Bell & Howell (SCSI), Kofax/Xionics
Duplex, Canofile, TDC 2610W
ISIS "Sets" include the ISIS drivers for file i/c; otherwise, each file driver
is considered a Level I driver.
-3-
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 20
Kofax shall have the right to distribute, royalty free, Products included as
part of Kofax products which are Promotional Distributions. For these purposes,
"Promotional Distributions" shall include only distributions of the Products,
integrated with Kofax's products, for demonstration or promotional purposes,
when the price charged is equal to or less than the actual cost of the goods
distributed, plus reasonable shipping and handling charges. However, Products
which are distributed at such a price as part of an offer or promotion including
any other Kofax product which is not being distributed at a price equal to or
less than the actual cost of the goods distributed, plus reasonable shipping and
handling charges, shall not be considered Promotional Distributions.
Kofax shall have the right to distribute, royalty free, Product Updates and
Product Enhancements as product upgrades to Kofax's customers who have been
previously licensed to use the Product which is so upgraded and for which a
license fee has previously been paid pursuant to this Agreement.
A maximum of [*] will be due for actual licenses granted during any four
consecutive calendar quarters for each Kofax product in each licensed
environment. Prepayments for licenses used beyond the period in question will
not be included for purposes of applying this maximum.
SUPPORT FEES FOR ISIS DRIVERS
Within 30 days of each annual renewal of this Agreement, whether or not such
renewal is automatic, Kofax shall pay [ * ] for Support Fees for ongoing Product
Updates, Product Enhancements, and telephone support for each licensed
environment.
Notwithstanding the foregoing, if License Fees for ISIS drivers due and paid in
the previous 12 months for a given environment exceed [*] then no Support Fees
shall be due.
BINARY LICENSE FEES FOR ISIS DRIVERS FOR KODAK IMAGELINK SCANNERS
Prior to the shipment, or within 30 days of the shipment, of any Product, Kofax
shall pay Pixel license fees according to the following schedule:
Scanner 1-5 units 6-10 units
Imagelink 500 [*] [*]
Imagelink 900, 923, 990 [*] [*]
Kofax shall have the right to distribute, royalty free, Product Updates and
Product Enhancements as product upgrades to Kofax's customers who have been
previously licensed to use the Product which is so upgraded and for which a
license fee has previously been paid pursuant to this schedule.
SUPPORT FEES FOR ISIS DRIVERS FOR KODAK IMAGELINK SCANNERS
Within 30 days of each annual renewal of this Agreement, whether or not such
renewal is automatic, Kofax shall pay [*] for Support Fees for ongoing Product
Updates, Product Enhancements, and telephone support for each licensed
environment.
Notwithstanding the foregoing, if License Fees for ISIS drivers for Kodak
Imagelink scanners due and paid in the previous 12 months for a given
environment exceed [*] then no Support Fees shall be due.
-4-
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 21
EXHIBIT B - PRODUCT SPECIFICATIONS
ISIS Drivers object code shall be that machine readable code which performs the
following functions and/or meets the following specifications:
1. The drivers conform to the ISIS Specification as documented in the latest
revisions of the ISIS Application Developer's Toolkit Manual and the ISIS
Scanner Driver Developer's Toolkit Manual.
2. The drivers pass the test suite "SCANTEST".
3. The drivers have reasonable performance which is not inferior to the
performance exhibited as of the effective date of this Agreement.
4. The drivers must not, in and of themselves, cause the scanner to start and
stop if such starting and stopping causes reduced image quality.
5. The drivers must not use more than 64K of memory for code and data.
6. The drivers will follow the internationalization guidelines of the
applicable operating environment and will include source code as necessary
to allow internationalization.
7. The drivers must support the following scanners and image formats:
In the Windows environment version:
Agfa ARCUS
Agfa ARCUS Plus
Agfa StudioScan
Agfa StudioScan II
Apple One Scanner
Bell & Howell 2135 (Adaptec)
Bell & Howell 2137/A (Adaptec)
Bell & Howell 2138 (Adaptec)
Bell & Howell 3238 (Adaptec)
Bell & Howell 3338/A (Kofax 9200, Xionics Turbo)
Bell & Howell 3338/A (Adaptec)
Bell & Howell 6338 (Kofax 9200, Xionics Turbo)
Bell & Howell 6338 (Adaptec)
Canon IX-12
Canon IX-12F
Canon IX-30
Canon IX-3010 (SI40/Adaptec)
Canon IX-4015 (SI40/Adaptec)
Chinon DS-3000
Complete PC Flatbed (HP)
Envisions 6100, 8100, 24 Pro
Epson ES-300C/GT-6000
Epson ES-600C/GT-6500
Epson ES-800C/GT-8000
Epson ES-1200C/GT-9000
Epson 300GS
-5-
<PAGE> 22
Fujitsu Scan Partner Jr.
Fujitsu Scan Partner 10
Fujitsu 3093E (Kofax 9200, Xionics Turbo)
Fujitsu 3096E+ (Kofax 9200, Xionics Turbo)
Fujitsu 3096G (Adaptec)
Fujitsu 3097E+ (Kofax 9200, Xionics Turbo)
Fujitsu 3097G (Adaptec)
Fujitsu 3096GX
Fujitsu 3099 A/AG (Adaptec, Kofax 9275)
Hewlett-Packard ScanJet
Hewlett-Packard ScanJet Plus
Hewlett-Packard ScanJet IIc
Hewlett-Packard ScanJet IIcx
Hewlett-Packard ScanJet IIp
Hewlett-Packard ScanJet IIIp
Hewlett-Packard Accupage 1.0
IBM 2456
Microtek MS-300A
Microtek MS-300C
Microtek MSF-300A
Microtek MSF-300C
Microtek MSF-300G
Microtek MSF-300Q
Microtek MSF-300Z
Microtek MS-400G
Microtek MS-II
Microtek SM 600GS
Microtek SM 600ZS
Microtek ScanMaker II, IIG, IIHR, IISP
Microtek ScanMaker III
Nikon Scantouch
Okidata DocIT 3000, 4000
Panasonic KV-SP 505 (Kofax 9200)
Panasonic KV-SS50, KV-SS60
Panasonic KV-SS55, KV-SS65
Pentax (HP)
Relisys Office 2400
Ricoh FS2
Ricoh IS50
Ricoh IS60
Ricoh IS410
Ricoh IS510/520
Ricoh 530 digital copier
Sharp JX-320
Sharp JX-325
Sharp JX-330
Sharp JX-610
TDC 2610 (Kofax 9200, Xionics Turbo)
UMAX UG-630
UMAX UC-630
-6-
<PAGE> 23
UMAX UC-840
UMAX UC-1200S
UMAX OA-1
UMAX 1200-C
TIFF Raw
TIFF 32771
TIFF Packbits
TIFF CCITT G3, G3 modified
TIFF CCITT Group 4
PCX
DCX
LZW
GIF
BMP
CALS Type 1
PDA Raw, G3, G4
ISIS Drivers for Kodak Imagelink Scanners object code shall be that machine
readable code which performs the following functions and/or meets the following
specifications:
1. The drivers conform to the ISIS Specification as documented in the latest
revisions of the PixTools/Scan Manual and the ISIS Scanner Driver Developer's
Toolkit Manual.
2. The drivers pass the test suite "SCANTEST".
3. The drivers have reasonable performance which is not inferior to the
performance exhibited as of the effective date of this Agreement.
4. The drivers will follow the internationalization guidelines of the applicable
operating environment and will include source code as necessary to allow
internationalization.
5. The drivers must support the following scanners, including the features of
those scanners which were supported as of January 1, 1995:
In the Windows environment version:
Kodak Imagelink 500
Kodak Imagelink 900
Kodak Imagelink 923
Kodak Imagelink 990
-7-
<PAGE> 24
MODIFICATION TO SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT is entered into effective as of June 1, 1996 by and between Pixel
Translations, Inc., a California corporation ("Pixel") and Kofax Image Products,
a California corporation ("Kofax") to modify the Software License Agreement
between the parties dated June 1, 1993 as follows:
The following Schedules and Exhibits shall be replaced by those Schedules and
Exhibits which are attached to and part of this Agreement:
Schedule 1 - Object Code Licenses
Schedule 3 - License and Support Fees
Exhibit B - Product Specifications
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in their
respective names and by their duly authorized officers.
Pixel Translations, Inc.
3031 Tisch Way, Suite 310
San Jose, CA 95128
USA
By: [SIG]
--------------------------------------
Title: Business Unit Partner
-----------------------------------
Kofax Image Products
3 Jenner Street
Irvine, CA 92718
USA
By: [SIG]
--------------------------------------
Title: VP Marketing
-----------------------------------
-1-
<PAGE> 25
SCHEDULE 1
OBJECT CODE LICENSES
16 Bit ISIS Drivers for Windows 3.X and Windows 95.
32 Bit ISIS Drivers for Windows NT.
16 Bit ISIS Drivers for Kodak Imagelink Scanners for Windows 3.X.
-2-
<PAGE> 26
SCHEDULE 3
LICENSE AND SUPPORT FEES
BINARY LICENSE FEES FOR ISIS DRIVERS
Within thirty days of the end of each calendar quarter, any portion of which
falls within the term of the Agreement, Kofax shall notify Pixel of the number
of copies of the Product distributed by Kofax during the calendar quarter, both
in each of the "single driver" categories and in the "driver set" categories for
each licensed environment. This report shall indicate all copies of the Products
which have been distributed, including indicating any copies as to which a
royalty is not due pursuant to the provisions hereof, whether because it is a
promotional copy or a product upgrade as to which a license fee was previously
paid.
NOTWITHSTANDING THE FOREGOING, KOFAX MAY COMBINE LICENSED ENVIRONMENTS IN THE
FOLLOWING SPECIFIC WAY: IF KOFAX HAS PREPAID "SET: ALL DRIVERS" PLUS A
THIRTY PERCENT PREMIUM OVER THE LICENSE FEES IN THE "SET: ALL DRIVERS"
PREPAY SCHEDULE BELOW, THEN KOFAX MAY SHIP 16 BIT PRODUCTS THAT RUN ON THE
WINDOWS 3.1/WINDOWS 95 ENVIRONMENT AND 32 BIT PRODUCTS THAT RUN ON EITHER
THE WINDOWS NT OR WINDOWS 95 ENVIRONMENT, AND APPLY THOSE PREPAID LICENSE
FEES TOWARDS BOTH THE 16 BIT UNITS AND THE 32 BIT UNITS SHIPPED.
SUPPORT FEES SHALL BE DUE ON THE WINDOWS NT ENVIRONMENT UNLESS OTHER LICENSE
FEES IN ADDITION TO THE ARRANGEMENT ABOVE EXCEED THE MINIMUMS STATED BELOW.
License fees due under this Agreement will be determined by one of the two
following schedules. Any licenses granted in excess of those prepaid prior to
their shipment shall be paid for under the "Quarterly Schedule" and shall be
paid for at the time of the quarterly notification either in cash or by
allocation of a previously granted Discount Allowance. Kofax may also, at any
time, elect to prepay some number of licenses under the "Prepay Schedule".
Prepayment at the time of such election may also be made either in cash or by
allocation of a previously granted Discount Allowance.
PREPAY Schedule
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
QUANTITY 10 50 100 250 500 1,000 2,500 5,000 10,000
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LEVEL 1 DRIVER [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
LEVEL 2 DRIVER [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
LEVEL 3 DRIVER [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
SET: ALL LEVEL 1 [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
SET: ALL DRIVERS [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
QUARTERLY Schedule
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
QUANTITY 1-9 10- 50- 100- 250- 500- 1,000- 2,500- 5,000- 10,000
49 99 249 499 999 2,499 4,999 9,999 24,999
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LEVEL 1 DRIVER [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
LEVEL 2 DRIVER [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
LEVEL 3 DRIVER [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
SET: ALL LEVEL 1 [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
SET: ALL DRIVERS [*] [*] [*] [*] [*] [*] [*] [*] [*] [*]
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
-3-
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 27
Level I scanner drivers are most drivers listed in Exhibit B except:
Level 2 drivers:
Ricoh IS410, Fujitsu 3096G/3097G, Kofax/Xionics Simplex, Panasonic sheetfed
Level 3 drivers:
Ricoh IS510/520, Fujitsu 3099A/G/AG, Bell & Howell (SCSI), Kofax/Xionics
Duplex, Canofile, TDC 2610W
ISIS "Sets" include the ISIS drivers for file i/o; otherwise, each file driver
is considered a Level 1 driver.
Kofax shall have the right to distribute, royalty free, Products included as
part of Kofax products which are Promotional Distributions. For these purposes,
"Promotional Distributions" shall include only distributions of the Products,
integrated with Kofax's products, for demonstration or promotional purposes,
when the price charged is equal to or less than the actual cost of the goods
distributed, plus reasonable shipping and handling charges. However, Products
which are distributed at such a price as part of an offer or promotion including
any other Kofax product which is not being distributed at a price equal to or
less than the actual cost of the goods distributed, plus reasonable shipping and
handling charges, shall not be considered Promotional Distributions.
Kofax shall have the right to distribute, royalty free, Product Updates and
Product Enhancements as product upgrades to Kofax's customers who have been
previously licensed to use the Product which is so upgraded and for which a
license fee has previously been paid pursuant to this Agreement.
A maximum of [*] will be due for actual licenses granted during any four
consecutive calendar quarters for each Kofax product in each licensed
environment. Prepayments for licenses used beyond the period in question will
not be included for purposes of applying this maximum.
SUPPORT FEES FOR ISIS DRIVERS
Within 30 days of each annual renewal of this Agreement, whether or not such
renewal is automatic, Kofax shall pay [*] for Support Fees for ongoing Product
Updates, Product Enhancements, and telephone support for each licensed
environment.
Notwithstanding the foregoing, if License Fees for ISIS drivers due and paid in
the previous 12 months for a given environment exceed [*] then no Support
Fees shall be due.
BINARY LICENSE FEES FOR ISIS DRIVERS FOR KODAK IMAGELINK SCANNERS
Prior to the shipment, or within 30 days of the shipment, of any Product, Kofax
shall pay Pixel license fees according to the following schedule:
Scanner 1-5 units 6-10 units
Imagelink 500 [*] [*]
Imagelink 900, 923, 990 [*] [*]
Kofax shall have the right to distribute, royalty free, Product Updates and
Product Enhancements as product upgrades to Kofax's customers who have been
previously licensed to use the Product which is so upgraded and for which a
license fee has previously been paid pursuant to this schedule.
SUPPORT FEES FOR ISIS DRIVERS FOR KODAK IMAGELINK SCANNERS
-4-
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 28
Within 30 days of each annual renewal of this Agreement, whether or not such
renewal is automatic, Kofax shall pay [*] for Support Fees for ongoing Product
Updates, Product Enhancements, and telephone support for each licensed
environment.
Notwithstanding the foregoing, if License Fees for ISIS drivers for Kodak
Imagelink scanners due and paid in the previous 12 months for a given
environment exceed [*] then no Support Fees shall be due.
-5-
* Confidential portions omitted and filed separately with the
Securities and Exchange Commission.
<PAGE> 29
EXHIBIT B - PRODUCT SPECIFICATIONS
ISIS Drivers object code shall be that machine readable code which performs the
following functions and/or meets the following specifications:
1. The drivers conform to the ISIS Specification as documented in the latest
revisions of the ISIS Application Developer's Toolkit Manual and the ISIS
Scanner Driver Developer's Toolkit Manual.
2. The drivers pass the test suite "SCANTEST".
3. The drivers have reasonable performance which is not inferior to the
performance exhibited as of the effective date of this Agreement.
4. The drivers must not, in and of themselves, cause the scanner to start and
stop if such starting and stopping causes reduced image quality.
5. The drivers must not use more than 64K of memory for code and data.
6. The drivers will follow the internationalization guidelines of the applicable
operating environment and will include source code as necessary to allow
internationalization.
7. The drivers must support the following scanners and image formats:
In the Windows environment version:
Agfa ARCUS
Agfa ARCUS Plus
Agfa StudioScan
Agfa StudioScan II
Apple One Scanner
Bell & Howell 2135 (Adaptec)
Bell & Howell 2137/A (Adaptec)
Bell & Howell 2138 (Adaptec)
Bell & Howell 3238 (Adaptec)
Bell & Howell 3338/A (Kofax 9200, Xionics Turbo)
Bell & Howell 3338/A (Adaptec)
Bell & Howell 6338 (Kofax 9200, Xionics Turbo)
Bell & Howell 6338 (Adaptec)
Canon IX-12
Canon IX-12F
Canon IX-30
Canon IX-3010 (SI40/Adaptec)
Canon IX-4015 (SI40/Adaptec)
Chinon DS-3000
Complete PC Flatbed (HP)
Envisions 6100, 8100, 24 Pro
Epson ES-300C/GT-6000
Epson ES-600C/GT-6500
Epson ES-800C/GT-8000
Epson ES-1200C/GT-9000
Epson 300GS
-6-
<PAGE> 30
Fujitsu Scan Partner Jr.
Fujitsu Scan Partner 10
Fujitsu 3093E (Kofax 9200, Xionics Turbo)
Fujitsu 3096E+ (Kofax 9200, Xionics Turbo)
Fujitsu 3096G (Adaptec)
Fujitsu 3097E+ (Kofax 9200, Xionics Turbo)
Fujitsu 3097G (Adaptec)
Fujitsu 3096GX
Fujitsu 3099 A/AG (Adaptec, Kofax 9275)
Hewlett-Packard ScanJet
Hewlett-Packard ScanJet Plus
Hewlett-Packard ScanJet IIc
Hewlett-Packard ScanJet IIcx
Hewlett-Packard ScanJet IIp
Hewlett-Packard ScanJet IIIp
Hewlett-Packard Accupage 1.0
IBM 2456
Microtek MS-300A
Microtek MS-300C
Microtek MSF-300A
Microtek MSF-300C
Microtek MSF-300G
Microtek MSF-300Q
Microtek MSF-300Z
Microtek MS-400G
Microtek MS-II
Microtek SM 600GS
Microtek SM 600ZS
Microtek ScanMaker II, IIG, IIHR, IISP
Microtek ScanMaker III
Nikon Scantouch
Okidata, DocIT 3000, 4000
Panasonic KV-SP 505 (Kofax 9200)
Panasonic KV-SS50, KV-SS60
Panasonic KV-SS55, KV-SS65
Pentax (HP)
Relisys Office 2400
Ricoh FS2
Ricoh IS50
Ricoh IS60
Ricoh IS410
Ricoh IS510/520
Ricoh 530 digital copier
Sharp JX-320
Sharp JX-325
Sharp JX-330
Sharp JX-610
TDC 2610 (Kofax 9200, Xionics Turbo)
UMAX UG-630
UMAX UC-630
-7-
<PAGE> 31
UMAX UC-840
UMAX UC-1200S
UMAX OA-1
UMAX 1200-C
TIFF Raw
TIFF 32771
TIFF Packbits
TIFF CCITT G3, G3 modified
TIFF CCITT Group 4
PCX
DCX
LZW
GIF
BMP
CALS Type 1
PDA Raw, G3, G4
In the Windows NT environment version:
Fujitsu Scan Partner Jr.
Fujitsu Scan Partner 10
Fujitsu 3096G (Adaptec)
Fujitsu 3097G (Adaptec)
Hewlett-Packard ScanJet
Hewlett-Packard ScanJet Plus
Hewlett-Packard ScanJet IIc
Hewlett-Packard ScanJet IIcx
Hewlett-Packard ScanJet IIp
Hewlett-Packard ScanJet IIIp
IBM 2456
Ricoh FS2
Ricoh IS50
Ricoh IS60
Ricoh IS410
Ricoh IS510/520
TIFF Raw
TIFF 32771
TIFF Packbits
TIFF CCITT G3, G3 modified
TIFF CCITT Group 4
PCX
BMP
PDA Raw, G3, G4
ISIS Drivers for Kodak Imagelink Scanners object code shall be that machine
readable code which performs the following functions and/or meets the following
specifications:
-8-
<PAGE> 32
1. The drivers conform to the ISIS Specification as documented in the latest
revisions of the PixTools/Scan Manual and the ISIS Scanner Driver Developer's
Toolkit Manual.
2. The drivers pass the test suite "SCANTEST".
3. The drivers have reasonable performance which is not inferior to the
performance exhibited as of the effective date of this Agreement.
4. The drivers will follow the internationalization guidelines of the applicable
operating environment and will include source code as necessary to allow
internationalization.
5. The drivers must support the following scanners, including the features of
those scanners which were supported as of January 1, 1995:
In the Windows environment version:
Kodak Imagelink 500
Kodak Imagelink 900
Kodak Imagelink 923
Kodak Imagelink 990
<PAGE> 1
EXHIBIT 10.23
[LOGO]
MIDCONTINENT BUSINESS SYSTEMS, INC.
- --------------------------------------------------------------------------------
SERVICES CONTRACT
THIS AGREEMENT made this TWENTY-FIFTH DAY OF SEPTEMBER, 1995, by and between
MIDCONTINENT BUSINESS SYSTEMS, INC., hereinafter referred to as "MBS," and
KOFAX IMAGE PRODUCTS, hereinafter referred to as "Client,"
WITNESSETH:
WHEREAS, Client has purchased ImagePlus software and desires to have MBS
prepare customized changes to such software;
NOW, THEREFORE, in consideration of the mutual covenants and premises contained
herein, the parties hereto agree as follows:
1. Compensation. MBS has previously delivered to Client a "Statement of
Work" for the proposed Project. A copy of such Statement of Work is
attached and details the tasks to be performed by MBS and also
represents a cost for such services. MBS hereby agrees to perform all
work related to the Statement of Work for the sum of [ * ]
[ * ] AS A GUARANTEED PRE-PAYMENT OF ROYALTY FEES AT [*] PER ASCENT
SCAN STATION LICENSE FOR THE FIRST 60 LICENSES, AND [*] PER ASCENT
SCAN STATION LICENSE FOR ALL LICENSES THEREAFTER.
2. Test and Acceptance of Project.
a. At such time as MBS has completed the Project, it shall so inform
Client. Client shall thereafter, within twenty (20) business days,
complete such acceptance testing as Client desires to determine
the functionality, performance and conformance of the Project to
the specification of the High Level Design Document, hereinafter
referred to as "Requirements." Client bears the full
responsibility of assuring that the Project has been completed in
accordance with the Requirements and to the levels of
functionality, performance, and other specifications as are
established in the Requirements. FAILURE OF THE CLIENT TO PERFORM
SUCH TESTS SHALL PRECLUDE THE CLIENT FROM RAISING ISSUES OF
FUNCTIONALITY, PERFORMANCE AND NON CONFORMANCE TO THE
SPECIFICATIONS ESTABLISHED IN THE REQUIREMENTS IN THE EVENT OF ANY
DISPUTE BETWEEN CLIENT AND MBS.
b. Upon completion of Client's pre-acceptance testing, Client shall
either give MBS a written letter of acceptance or a written letter
specifying deficiencies in the Project. Such deficiencies shall
refer with specificity to particular sections of the Requirements.
In the event of any deficiencies, MBS shall proceed as rapidly as
feasible to correct such deficiencies. After such deficiencies
have been corrected by MBS, Client shall again run such
pre-acceptance tests as it desires and thereupon deliver to MBS
either a letter of acceptance or list of additional deficiencies.
This procedure shall be repeated until Client has accepted the
Project.
3. Source Code and Customized Code. MBS will provide Client with a copy
of the source code in order to facilitate Client's use of the Project.
However, MBS shall retain all ownership rights of both the source code
and all customized codes prepared by MBS in connection with the
Project. This customized code shall be licensed to Client as set forth
below. MBS does not permit
* Confidential portions omitted and
filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL TREATMENT
<PAGE> 2
modification of the customized code except that if the Client
determines to modify the code, the following provisions apply.
a. All warranties made by MBS pursuant to this Agreement shall
immediately terminate.
b. Client agrees that it will provide MBS with a copy of the
modified source code.
4. Changes in the Requirements. To the extent that the Client, during
the course of the Project, determines that it wishes to change the
Requirements for the project, Client shall provide MBS with a proposed
change order specifying the changes in the Requirements. Upon receipt
of the proposed change order, MBS shall then provide Client with a
letter amendment to this Agreement indicating the adjustment of
acceptance of the change order on the compensation to be paid to MBS
pursuant to this Agreement. If MBS accepts the change order and the
Client accepts the adjustment in the compensation to MBS, the parties
shall enter into a written amendment of this Agreement accepting the
change order and adjusting the compensation.
5. Software to be Licensed. In addition to completion of the Project,
the parties desire to enter into a License Agreement whereby Client
will receive a limited license to utilize the custom programming
prepared by MBS for Client pursuant to this Agreement. As used
hereafter, the term Project Software Package includes all custom
programming including custom codes and source codes utilized by MBS in
modifying Client's environment to meet the specifications set forth in
the Requirements.
6. Grant of License and Restrictions of License.
a. MBS hereby grants to Client, subject to the limitations of
this Agreement, a non-exclusive license to use and market
the Project Software Package.
b. This license is limited by the following conditions:
(1) Unless terminated by MBS due to a breach of this
Agreement by Client, Client's license under this
Agreement shall be perpetual.
7. Protection of MBS's Proprietary Rights. To protect MBS's proprietary
rights to the Project Software Package, Client agrees to adhere to the
conditions listed in Section 6 above. Further, Client agrees to
instruct all of its employees who may use or have access to the
Project Software package of the conditions listed in Section 6. Client
also agrees that it will take all such steps as are necessary to
prevent any third party from having access to or using or duplicating
the Project Software Package.
8. Maintenance. MBS shall provide defect only support, directly to the
client, for the Project Software Package as part of the royalty
payment to MBS. This support shall remain in effect as long as the
client's customers maintain a valid support contract with the client.
Any support which is necessitated by any alterations, tampering or
repairs performed on the Project Software Package by Client or any
third party shall be at additional charge to a Client.
9. Payments and Special Charges. Client shall promptly pay all invoices
sent to Client by MBS in accordance with this Agreement. All charges
shall be due and payable by Client within thirty (30) days after
billing by MBS. After that time, a finance charge of 1.5% per month
will be charged to the outstanding balance.
10. Additional Duties of Client. Client shall promptly report to MBS any
suspected malfunctions or defects in the Project Software Package.
11. Enhancements; Modifications. If Client desires any modifications in
the Project Software Package, MBS shall make such modifications, if
feasible, at a price to be determined by MBS.
<PAGE> 3
12. Default. Either party shall be in default under this Agreement if it
fails to timely perform or observe any of the terms or conditions of
this Agreement.
13. Remedies. In the event of a default under this Agreement by a party,
the other party shall have the right to terminate this Agreement upon
written notice thereof to the defaulting party. In the event of a
default by MBS, Client's remedies shall be limited to the right to
recover from MBS the amount of any sums actually paid to MBS under
this Agreement. If either party terminates this Agreement due to
default by the other before delivery, acceptance and payment of the
license fee, Client shall immediately return the Project Software
package and any other property of MBS which it may have to MBS. In the
event of a default by Client, MBS shall have any and all rights
available under law and at equity, including the right to sue for all
damages incurred and to sue for specific performance. Client agrees
that upon the occurrence of any actual or threatened breach by Client
of the restrictions upon the use, sale, transfer, or disclosure of the
Software Package contained in Section 8 herein, monetary damages alone
shall not be sufficient remedy or protection for MBS, and MBS shall be
entitled to such injunctive or other equitable relief as may be deemed
proper or necessary by a court of competent jurisdiction. Except as
provided herein, all available rights and remedies shall be cumulative
and the exercise of any right or remedy shall not be deemed exclusive.
MBS SHALL IN NO EVENT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT
OR CONSEQUENTIAL DAMAGES, AND CLIENT'S RIGHT TO DAMAGES SUFFERED BY
REASON OF A DEFAULT HEREUNDER SHALL BE LIMITED TO THE REFUND OF NO
MORE THAN ANY CHARGES PAID HEREUNDER.
14. Limitations of MBS's Warranties. MBS warrants only that the Project
Software package shall function as specified by the Requirements and
that MBS has the right to grant the license contained in this
Agreement. MBS MAKES NO OTHER WARRANTIES OR REPRESENTATIONS, WHETHER
EXPRESS OR IMPLIED, REGARDING THE PROJECT SOFTWARE PACKAGE OR ITS
FUNCTIONS OR CAPABILITIES, INCLUDING NO WARRANTY REGARDING THE FITNESS
OF THE PROJECT SOFTWARE PACKAGE FOR CLIENT'S INTENDED USE(S) OR
CLIENT'S EQUIPMENT. Notwithstanding anything herein to the contrary,
however, MBS shall have no duty to correct, repair, redesign or
otherwise perform services for the Project Software package (i) once
Client has accepted the Project Software package, or (ii) if Client
has in any way modified or tampered with the Project Software Package.
In addition, MBS shall have no liability for claims concerning
installation, performance specifications, or capability of the Project
Software Package unless such claims are made in writing within one
year after delivery of the Project Software Package by MBS.
15. General Provisions. Any waiver by either party of any term or
condition of this Agreement or a default hereunder shall not be
constructed as a waiver of any subsequent performance due under that
term or condition or any other term or condition of any subsequent
default. The provisions of this Agreement are severable and in the
event that any provision hereof is held by any court to be voidable or
unenforceable, such provisions shall be deemed stricken from this
Agreement and all other terms and conditions shall remain in full
force and effect, and the parties agree to remain bound by and perform
in accordance with the terms hereof, as so amended. This Agreement
constitutes the entire agreement between the parties and supersedes
any previous written, between the parties. This Agreement may not be
amended or altered except by a writing signed by both parties.
16. Governing Law, Jurisdiction, and Venue. This Agreement shall be
deemed to be an agreement entered into in the State of South Dakota.
The laws of the State of south Dakota shall govern this agreement.
Upon request of MBS, any dispute arising under or in connection with
this agreement may be submitted to binding arbitration in Sioux Falls,
SD, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association.
<PAGE> 4
17. Exclusivity. MBS agrees that under the terms of this agreement, it
will develop proprietary and confidential information for and on
behalf of Kofax. In consideration of the foregoing, MBS agrees that
for a period of 2 years following the date of this agreement, it will
not contract to develop a Windows, Unix or OS/2-based document capture
system releasing to, or integrated with, IBM's ImagePlus/400 system on
behalf of any of the following direct competitors of Kofax:
Conerstone Imaging, Intrafed, Micro Systems, File Net (includes
Watermark), Dakota Imaging, Wang Laboratories, Avitar, and Xionics.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date set
forth above.
Midcontinent Business Systems, Inc. KOFAX Image Products
1803 Research Blvd. 3 Jenner Street
Suite 501 Irvine, CA 92718-3807
Rockville, MD 20850
Name: Mark Addink Name: Kevin Drum
------------------------ ---------------------
Signature: /s/ MARK ADDINK Signature: /s/ KEVIN DRUM
------------------------ ---------------------
Title: Branch Manager Title: VP Marketing
------------------------ ---------------------
Date: 10/30/92 Date: 10/16/95
------------------------ ---------------------
<PAGE> 1
EXHIBIT 10.24
[MIDCONTINENT BUSINESS SYSTEMS, INC. LETTERHEAD]
LICENSE CONTRACT
THIS AGREEMENT made this 1st day of July, 1996, by and between MIDCONTINENT
BUSINESS SYSTEMS, INC., hereinafter referred to as "MBS," and KOFAX IMAGE
PRODUCTS, hereinafter referred to as "Client,"
WITNESSETH:
WHEREAS, Client desires to have MBS prepare customized computer software; NOW,
THEREFORE, in consideration of the mutual covenants and premises contained
herein, the parties hereto agree as follows;
1. Compensation. MBS hereby agrees to provide the customized computer
software, hereinafter referred to as the "Software Package," developed
by MBS and described in Exhibit A, for the sum of [ * ] PLUS
ADDITIONAL ROYALTIES as described in Exhibit A.
2. Source Code and Customized Code. MBS will provide Client with a copy
of the source code in order to facilitate Client's use of the Software
Package. However, MBS shall retain all ownership rights of both the
source code and all customized codes prepared by MBS in connection
with the Software Package. This customized code shall be licensed to
Client as set forth below. MBS does not permit modification of the
customized code except that if the Client determines to modify the
code, the following provisions apply.
a. All warranties made by MBS pursuant to this Agreement shall
immediately terminate.
b. Client agrees that it will provide MBS with a copy of the
modified source code.
3. Changes in the Software Package. To the extent that the Client
determines that it wishes to change the Software Package, Client shall
provide MBS with a proposed change order specifying the changes. Upon
receipt of the proposed change order. MBS shall then provide Client
with a letter amendment to this Agreement indicating acceptance of the
change order and adjustment in the compensation to be paid to MBS
pursuant to this Agreement. If MBS accepts the change order and the
Client accepts the adjustment in the compensation to MBS, the parties
shall enter into a written amendment to this Agreement accepting the
change order and adjusting the compensation.
4. Software to be Licensed. The parties desire to enter into a License
Agreement whereby Client will receive a limited license to utilize the
Software Package prepared by MBS for Client pursuant to this
Agreement.
5. Grant of License and Restrictions of License.
a. MBS hereby grants to Client, subject to the limitations of this
Agreement, a non-exclusive license to use and market the Software
Package.
b. This license is limited by the following conditions:
(1) Unless terminated by MBS due to a breach of this Agreement
by Client, Client's license under this Agreement shall be
perpetual.
* Confidential portions omitted and
filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL TREATMENT
Page 1 of 4
<PAGE> 2
6. Protection of MBS's Proprietary Rights. To protect MBS's proprietary
rights to the Software Package, Client agrees to adhere to the
conditions listed in Section 5 above. Further, Client agrees to
instruct all of its employees who may use or have access to the
Software Package of the conditions listed in Section 5. Client also
agrees that it will take all such steps as are necessary to prevent
any third party from having access to or using or duplicating the
Software Package.
7. Maintenance. MBS shall provide defect only support, directly to the
Client, for the Software package as part of the royalty payment to
MBS. Any support which is necessitated by any alterations, tampering,
or repairs performed on the Software Package by Client or any third
party shall be at additional charge to a Client.
8. Payments and Special Charges. Client shall promptly pay all invoices
sent to Client by MBS in accordance with this Agreement. All charges
shall be due and payable by Client within thirty (30) days after
billing by MBS. After that time, a finance charge of 1.5% per month
will be charged to the outstanding balance.
9. Additional Duties of Client. Client shall promptly report to MBS any
suspected malfunctions or defects in the Software Package.
10. Enhancements and Modifications. If Client desires any modifications in
the Software Package, MBS shall make such modifications, if feasible,
at a price to be determined by MBS.
11. Default. Either party shall be in default under this Agreement if it
fails to timely perform or observe any of the terms or conditions of
this Agreement.
12. Remedies. In the event of a default under this Agreement by a party,
the other party shall have the right to terminate this Agreement upon
written notice thereof to the defaulting party. In the event of a
default by MBS, Client's remedies shall be limited to the right to
recover from MBS the amount of any sums actually paid to MBS under
this Agreement. If either party terminates this Agreement due to
default by the other before delivery, acceptance and payment of the
license fee, Client shall immediately return the Software Package and
any other property of MBS which it may have to MBS. In the event of a
default by Client, MBS shall have any and all rights available under
law and at equity, including the right to sue for all damages incurred
and to sue for specific performance. Client agrees that upon the
occurrence of any actual or threatened breach by Client of the
restrictions upon the use, sale, transfer, or disclosure of the
Software Package contained in Section 8 herein, monetary damages alone
shall not be sufficient remedy or protection for MBS, and MBS shall be
entitled to such injunctive or other equitable relief as may be deemed
proper or necessary by a court of competent jurisdiction. Except as
provided herein, all available rights and remedies shall be cumulative
and the exercise of any right or remedy shall not be deemed exclusive.
MBS SHALL IN NO EVENT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT
OR CONSEQUENTIAL DAMAGES, AND CLIENTS RIGHT TO DAMAGES SUFFERED BY
REASON OF A DEFAULT HEREUNDER SHALL BE LIMITED TO THE REFUND OF NO
MORE THAN ANY CHARGES PAID HEREUNDER.
13. Limitations of MBS's Warranties. MBS warrants only that the Software
Package shall function as specified by the Requirements and that MBS
has the right to grant the license contained in this Agreement. MBS
MAKES NO OTHER WARRANTIES OR REPRESENTATIONS, WHETHER EXPRESS OR
IMPLIED, REGARDING THE SOFTWARE PACKAGE OR ITS FUNCTIONS OR
CAPABILITIES, INCLUDING NO WARRANTY REGARDING THE FITNESS OF THE
SOFTWARE PACKAGE FOR CLIENT'S INTENDED USE(S) OR CLIENT'S EQUIPMENT.
Notwithstanding anything herein to the contrary, however, MBS shall
have no duty to correct, repair, redesign or otherwise perform
services for the Software Package (i) once Client has accepted the
Software Package, or (ii) if Client has in any way modified or
tampered with the Software Package. In addition, MBS shall have no
liability for claims concerning installation, performance
specifications, or capability of the Software Package unless such
claims are made in writing within one year after delivery of the
Software Package by MBS.
Page 2 of 4
<PAGE> 3
14. General Provisions. Any waiver by either party of any term or
condition of this Agreement or a default hereunder shall not be
constructed as a waiver of any subsequent performance due under that
term or condition or any other term or condition of any subsequent
default. The provision of this Agreement are severable and in the
event that any provision hereof is held by any court to be voidable or
unenforceable, such provisions shall be deemed stricken from this
Agreement and all other terms and conditions shall remain in full
force and effect, and the parties agree to remain bound by and perform
in accordance with the terms hereof, as so amended. This Agreement
constitutes the entire agreement between the parties and supersedes
any previous written, between the parties. This Agreement may not be
amended or altered except by a writing signed by both parties.
15. Governing Law, Jurisdiction, and Venue. This Agreement shall be deemed
to be an agreement entered into in the State of South Dakota. The laws
of the State of South Dakota shall govern this agreement. Upon request
of MBS, any dispute arising under or in connection with this agreement
may be submitted to binding arbitration in Sioux Falls, SD, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date set
forth above.
MIDCONTINENT BUSINESS SYSTEMS, INC. KOFAX IMAGE PRODUCTS
7900 XERXES AVENUE SOUTH, SUITE 1100 3 JENNER STREET
MINNEAPOLIS, MN 55431 IRVINE, CA 92718-3807
Signature: /s/ DAVID FETTERS Signature: /s/ KEVIN DRUM
-------------------------- ----------------------
Name: David Fetters Name: Kevin Drum
Title: Vice President/General Manager Title: VP Marketing
Date: 7/15/96 Date: 7/8/96
Page 3 of 4
<PAGE> 4
EXHIBIT A
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Item Total*
- --------------------------------------------------------------------------------
<S> <C>
MBS Tiff to MO:DCA Conversion Utility [ * ]
================================================================================
TOTAL* [ * ]
- --------------------------------------------------------------------------------
</TABLE>
- --------------
* All monetary amounts are in U.S. Dollars
** This amount represents a guaranteed pre-payment of royalty fees for the
first 50 licenses sold at [ * ] per license. For every license over 50
sold, an additional royalty fee of [ * ] will be due and payable by Client
to MBS.
Under the terms of this agreement, a license is considered to have been sold
each time that Client sells an Ascent Capture Scan Station license. Sales by
Client of multiple Ascent Capture Scan Station licenses to a single Client
customer constitute the sale of multiple licenses of the Software Package
described in the table above.
* Confidential portions omitted and
filed separately with the
Securities and Exchange Commission.
Page 4 of 4
<PAGE> 1
EXHIBIT 10.25
- --------------------------------------------------------------------------------
NOVELL, INC.
NEST SDK Developer Product Distribution License Exhibit
- --------------------------------------------------------------------------------
This NEST SDK Developer Product Distribution License Exhibit (the "Exhibit") to
the NEST SDK 1. x Supplement (the "Supplement") and the Novell Embedded Systems
Technology Master Agreement (the "Agreement") is entered into by Novell and
Developer. This Exhibit is effective as of July 31st, 1996 ("Distribution
License Effective Date").
1. INTRODUCTION. The purpose of this Exhibit is to allow Developer, subject to
the restrictions contained in this Exhibit and the Agreement, to
sublicense, duplicate, and distribute Qualifying Developer Products
developed under the Agreement between Novell and Developer. All terms and
conditions of the Agreement are incorporated herein by reference and shall
have full force and effect between the parties in the interpretation of
this Exhibit.
2. DEFINITIONS. Capitalized terms in this Exhibit have the meanings stated
below or defined in the Agreement.
2.1 "Software" means binary code and Program Tools or binary code produced
from Program Tools that are linked or included in Developer Product
pursuant to the Supplement and is subject to all terms and conditions
of that Supplement.
2.2 "Sublicense" means an executed agreement or shrink-wrap agreement or
electronic license that an end user consents to by performing a
physical act (e.g., pushing a button on a keyboard) before utilizing
the Qualifying Developer Product which at minimum provides the
following or equivalent protection to Novell:
2.2.1 restricts the number of copies of the Software to one operating
copy per Qualifying Developer Product;
2.2.2 permits only those number of copies of the Software as are
essential to back up or archival use of the Software;
2.2.3 states that no title to the intellectual property contained in
the Software is transferred to the sublicensee and it is
retained by Novell;
2.2.4 represents that the human readable code of the Software (source
code) is not sublicensed to the sublicensee;
2.2.5 restricts sublicensees from de-compiling and reverse assembling
the software to discover the source code; and
2.2.6 prohibits time-sharing, lease, rental, distribution, transfer,
sublicense, and unauthorized use of the Software, without prior
written consent.
3. LICENSES AND RESTRICTIONS.
3.1 Distribution License. Subject to the terms and conditions of this
Exhibit and the Agreement, Novell grants to Developer, and Developer
accepts, a non-exclusive, non-transferable, world-wide license to
reproduce and distribute (directly or indirectly) the Qualifying
Developer Products, being the Developer Products identified below that
are found to meet the Qualifying Developer Product requirements, but
only under a Sublicense between Developer and its end users or, in the
case of distribution through Developer's OEM customer, Developer must
obtain binding contractual assurances that Developer's OEM customers
will only distribute the Qualifying Developer Products under a
Sublicense between Developer's OEM customer and its end users.
Developer Product Title: NetScan(TM)
---------------------------------------
NEST Components Licensed: IPX/SPX, Nest Requester
--------------------------------------
Developer Product Title:
---------------------------------------
NEST Components Licensed:
--------------------------------------
Developer Product Title:
---------------------------------------
CONFIDENTIAL TREATMENT
PAGE 1
<PAGE> 2
- --------------------------------------------------------------------------------
NEST Components Licensed:
-------------------------------
Product names identified in this Section are solely to assist Novell
in program administration, but not for trademark licensing purposes.
Novell reserves the right to take action in the event any Developer
Product name violates Novell rights.
4. CONSIDERATION. In exchange for the rights granted by Novell to Developer
under this Exhibit, Developer agrees to pay Novell a per copy royalty per
the number of copies of the Qualifying Developer Products it transfers,
sells, sublicenses or authorizes for use. A non-refundable royalty payment
("Non-refundable Royalty Payment") is set forth in the Royalty Schedule
section below. Notwithstanding the foregoing, Developer will report all
such royalties due to Novell on a monthly basis using calendar quarters.
4.1 Monthly Royalty. In addition, Developer shall pay to Novell a royalty
based upon the number of copies of each Qualifying Developer Product
transferred, sold or licensed by Developer. Royalties shall accrue
upon transfer, sale or license of Qualifying Developer Products by
Developer and shall be paid to Novell no later than forty-five (45)
days after the end of each month.
4.2 Minimum Royalty. Developer shall pay to Novell a guaranteed annual
minimum royalty of [ * ] [ * ] for the Qualifying Developer
Product that includes the NEST Client Requester and/or NetWare IPX/SPX
Modules. In addition, should Qualifying Developer Products also
include the NPrinter modules, Developer shall pay to Novell a
guaranteed annual minimum royalty of [ * ] [ * ].
4.3 Audit. Developer shall maintain complete and accurate accounting
records, in accordance with generally accepted accounting practices,
to support and document royalty amounts due under this Exhibit and
shall retain such records for three (3) years after payment is made.
Developer shall, upon written request of Novell, provide audit access
to such records to Novell. If Developer so decides, a mutually
acceptable independent accounting firm may conduct the audit at
Developer's expense. Such access shall be granted only during normal
business hours and no more frequently than once in each calendar year.
All information received during the audit shall be held in confidence
by the parties.
4.4 Royalty Schedule
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Item Base Price Discount Schedule
- --------------------------------------------------------------------------------
Units Percentage
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
IPX/SPX [ * ] [ * ] [ * ]
NEST Requester [ * ] [ * ] [ * ]
PServer/NPrinter [ * ] [ * ] [ * ]
NEST Autoroute [ * ] [ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
</TABLE>
* Confidential portions omitted and
filed separately with the
Securities and Exchange Commission.
PAGE 2
<PAGE> 3
- --------------------------------------------------------------------------------
5. DEVELOPER'S DUTIES.
5.1 Qualifying Developer Products. Qualifying Developer Products may only
be sublicensed and distributed according to the terms and conditions
of this Exhibit.
5.2 Operating System Companies. Notwithstanding any other provision(s) of
this Agreement, Developer agrees that it may not authorize the
distribution of all or any portion of the Qualifying Developer
Products through companies that design, develop, or market computer
operating systems without the prior written consent of an authorized
Novell representative.
5.3 Protection. Developer agrees to take all reasonable steps to protect
the Program Tools and related Documentation Tools from unauthorized
copying or use. The source code of the Program Tools provided in
binary form represents and embodies trade secrets of Novell which are
not licensed to Developer. Developer agrees not to reverse assemble or
reverse compile this binary code to discover the source code.
5.4 Documentation. Developer agrees to include a conspicuous statement in
its documentation identifying Developer as the primary support contact
for the Qualifying Developer Products distributed by Developer. Upon
request, Developer agrees to provide Novell with three copies of its
then current documentation.
5.5 End-user support. Developer agrees to provide all technical support
for all aspects of the Qualifying Developer Product.
5.6 Yes Logo. Developer agrees to prominently display the Yes Logo on
Qualifying Developer Product, and all marketing materials, product
packaging, and advertising material related to Qualifying Developer
Product; to emphasize the Yes Logo in at least one Qualifying
Developer Product advertisement, Qualifying Developer Product line
advertisement, or corporate positioning advertisement in an
appropriate national publication; and provide appropriate product and
program descriptions in all materials bearing the Yes Logo.
6. TERM AND TERMINATION.
6.1 Term. The term of this Exhibit shall be one year from the Distribution
License Effective Date of and shall automatically renew for successive
one year periods unless either party provides thirty (30) days or more
prior written notice of its intent to terminate this Exhibit.
6.2 Termination for Convenience. Either party may terminate this Exhibit
and the licenses granted by Novell under the Licenses and Restrictions
Section of this Exhibit at any time without cause by giving 180
calendar days' prior written notice to the other party. In the case
that Novell exercises its right to terminate for convenience,
Developer may distribute Qualifying Developer Product then in
inventory for which Developer has already paid royalties.
7. SIGNATURES.
NOVELL, INC. (DEVELOPER) Kofax Image Products
----------------------------
Signature: /s/ JAMES T. SULLIVAN Signature: /s/ KEVIN DRUM
------------------------- -----------------------------
Name: James T. Sullivan Name: Kevin Drum
Title: VP OEM Sales Title: Vice President-Marketing
Date: 17 October 1996 Date: July 31, 1996
- -------------------------------------------------------------------------------
PAGE 3
