Sample Business Contracts

Distributor Agreement - Kofax Image Products Inc. and Cranel Inc.

Sponsored Links

                              DISTRIBUTOR AGREEMENT


                           KOFAX IMAGE PRODUCTS INC.,
                                 3 JENNER STREET
                            IRVINE, CALIFORNIA 92718

                             TEL:   (714) 727-1733

                             FAX:   (714) 727-3144


                                   CRANEL INC.

                           51OF East Wilson Bridge Rd.
                              Worthington, OH 43085
                                 (614) 433-0045

                        COMMENCEMENT DATE: JULY 25, 1990

<PAGE>   2


Kofax Image Products Inc., a California corporation, with offices at 3 Jenner
St., Irvine, CA 92718, hereinafter referred to as (Kofax), and Cranel Inc., an
Ohio corporation with offices at 51OF East Wilson Bridge Rd. Worthington, OH
43085, herein after referred to as (Distributor), agree that the following terms
and conditions shall govern the sale and discounting of Products as herein

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

        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.


<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

        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.


<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

               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 afore-
               mentioned 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


<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

        5.6    Complaints

               To promptly report to Kofax any complaint relating to sales of

        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.


<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.

        510    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

        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
               responsibilities 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.


<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 order (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.


<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

         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.

               In the event Distributor (i) cancels any order or a portion
               thereof or (ii) fails to meet any obligation hereunder causing
               cancellation of any order or portion thereof, Distributor agrees
               to pay Kofax cancellation charges, computed from the original
               scheduled shipment date, as follows:


<PAGE>   9

               30 days or less prior to 25% of dollar value original scheduled
               shipment date.

               Unless otherwise stated, cancellation charges for outstanding
               orders shall be computed based on the net dollar value of
               Purchase Orders affected.

               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

               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

         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 qualify for stock

         7.12  Price Protection

               Kofax Agrees to provide Distributor with inventory price
               protection under the following terms and conditions:


<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)
               prior written notice. Such termination shall be effective on the
               date stated in said notice.


<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

         8.4   In the event Distributor 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 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 termination 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.

<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 arises.

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,


<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

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



<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

               (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

         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.


<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                      510 F. East Wilson Bridge
               Irvine, CA 92718                     Worthington, OH 43085
               Attention: Contracts Manager         Jim Wallace

               In case of mailing, the effective date of delivery of any notice,
               demand, or consent shall be considered to be 5 days after proper

         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.


<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

         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

         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


<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 destination of the Products, Distributor will not
               export, re-export or re-sell to any unauthorized end user 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.

                  ----------------------------      ----------------------------
               NAME: RICHARD M. MURPHY           NAME: JAMES H. WALLACH
                    --------------------------        --------------------------
               TITLE: V.P. SALES                 TITLE: PRESIDENT
                     -------------------------         -------------------------
               DATE: 7-25-90                     DATE: 7-25-90
                    --------------------------        --------------------------