Sample Business Contracts

OEM Purchase Agreement - Fujitsu Computer Products of America Inc. and Kofax Image Products Inc.

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                             OEM PURCHASE AGREEMENT
                           KOFAX IMAGE PRODUCTS, INC.

This Agreement is made and entered as of January 27, 1999 ("Effective Date") by
and between KOFAX IMAGE PRODUCTS, INC. ("KOFAX") located at 3 Jenner Street,
("FCPA") located at 2904 Orchard Parkway, San Jose, CA 95134.

WHEREAS, KOFAX has developed VRS Products ("Products") as described in Exhibit A
and FCPA wishes to purchase Products and incorporate such Products into FCPA's
M-series scanner line to be resold to FCPA's customers, which include original
equipment manufacturer ("OEM") and Distribution customers. KOFAX and FCPA,
therefore, desire to enter into an OEM purchase agreement (The "Agreement") for
the VRS Products.

In consideration of the mutual promises and covenants of the parties hereto and
other valuable consideration, the parties hereby agree with each other as


        As used in this Agreement, the following words shall have only the
        following meanings:

        (a)     "Product(s)" shall mean the VRS Products, conforming to the
                specifications ("Specifications") attached hereto as
                Exhibit A.

        (b)     "Order" shall mean a written purchase Order signed by FCPA and
                sent by FCPA to KOFAX by mail or facsimile.

        (c)     "Deliver" and "Delivery" shall mean to transfer by KOFAX to
                FCPA's, designated carrier.

2.      TERM

        This Agreement shall be effective as of the Effective Date and shall
        continue in effect for an initial term of one (1) year. Thereafter, it
        will renew in one (1) year increments unless terminated pursuant to the
        provisions herein.


        (a)     FCPA shall purchase the Products pursuant to written Orders that
                will be submitted by FCPA by the twentieth (20th) day of each

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        (b)     The Terms of this Agreement prevail over any pre-printed
                conditions appearing on any form. The printed conditions
                appearing on any pre-printed form or purchase Order shall not be
                applied if they are incompatible with the provisions of this
                Agreement. Each written Order placed by FCPA pursuant to this
                Agreement shall state that it is subject to the terms of this
                Agreement, shall identify the Products Ordered and shall include
                the following information:

                (i)     Description of the Products Ordered using FCPA's
                        assigned Product number and KOFAX's assigned part

                (ii)    Quantities and requested Delivery schedule;

                (iii)   Shipping instructions including assigned carrier and
                        destination address;

        (c)     If an Order is sent by facsimile, the Order shall be followed by
                the original sent by mail.

        (d)     KOFAX shall deliver Products to FCPA pursuant to a written Order
                accepted and acknowledged by KOFAX in accordance with the
                requested Delivery schedule. Lead time required for Delivery is
                sixty (60) days from the date of KOFAX's acceptance of each
                Order for normal Orders. FCPA shall have three (3) business days
                in which to notify KOFAX that the acknowledged Delivery dates
                not meet FCPA's requirements and KOFAX shall use commercially
                reasonable efforts to reschedule the Order for an earlier date
                as mutually agreed between the parties. FCPA may cancel, without
                penalty any Order delayed in excess of sixty (60) days beyond
                the acknowledged Delivery date.

        (e)     Any Order given by FCPA will be deemed accepted by KOFAX unless
                it is rejected by KOFAX within two (2) working days after KOFAX
                receives it. KOFAX shall be obligated to accept Orders that
                conform to, but do not exceed by twenty-five percent (25%) any
                forecast provided by FCPA. Upon such acceptance, each Order
                shall constitute an individual contract for the transaction of
                Products Ordered. KOFAX shall provide a written acknowledgement
                for each Order showing acknowledged Delivery dates, quantities
                and pricing.

        (f)     In the case of Orders that do exceed by twenty-five percent
                (25%) any forecast provided by FCPA, the agreement of KOFAX is
                required before such Order shall be deemed to be accepted.

        (g)     Unless mutually agreed, Orders for Products shall not exceed the
                rolling forecast by more than twenty-five percent (25%).

        (h)     If KOFAX expects to ship Products late, Products shall be
                shipped via next day airfreight. The difference between
                airfreight and normal freight charges will be paid for by
                KOFAX, if Products arrive at KOFAX on or before the Order due
                date. However, if the Products arrive at KOFAX after the Order
                due date, the expense for air freight shall be paid for by

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<PAGE>   3


        KOFAX will maintain a buffer stock amount of Products to be ordered
        under this Agreement equal to two (2) weeks in inventory and one (1)
        week in transit according to the then current rolling forecast. This
        buffer stock will be considered consigned for FCPA and will be purchased
        upon termination of this Agreement as defined in Section 30.


        KOFAX shall maintain a stock of Product for emergency Product Orders at
        a quantity to be determined mutually between KOFAX and FCPA.

        Emergency Orders of Products shall be delivered within twenty-four (24)
        hours of receipt of such Order, provided such Products are available
        from KOFAX. If necessary KOFAX may pull Product for emergency Orders
        from the buffer stock provided KOFAX uses reasonably commercial efforts
        to replenish the buffer stock immediately. Emergency Orders are deemed
        to be those Orders in which a Product is needed immediately because of a
        service related issue and not for fulfillment purposes.

6.      FORECAST

        By the twentieth (20th) day of each month, FCPA will provide a
        non-binding six (6) month rolling forecast to KOFAX.


        (a)     Orders accepted by KOFAX may be modified or cancelled by FCPA
                with written notice to KOFAX thirty (30) calendar days prior to
                the acknowledged date of shipment. If such Orders cancelled less
                than sixty (60) days prior to the acknowledged ship date may be
                subject to reimbursement of the raw materials that are
                associated with the Product that cannot be re-used or re-sold by
                KOFAX, and provided such cost for raw materials do not exceed
                the then current price of the Product. Should KOFAX develop and
                sell other VRS products that also use the raw materials listed
                below, KOFAX will identify and remove those raw materials from
                the list. The list of raw materials subject to reimbursement at
                the time of execution of this Agreement are as follows:

                        Part Number               Description

                        12000162-000              PCB FUJI INTERNAL SCA
                        14001018-000              CAP .33uF 50V 20% 805
                        14350045-000              RES 22 OHM, 1/8W 5% 8
                        14350047-000              RES NTWK 2.2K OHM 1/8
                        14350048-000              RES NTWK 22 OHM 1/8W
                        15250764-000              IC 74FCT162245 SSOP 4
                        15501009-000              IC DS229S TRNSM/RCVR
                        15603037-000              IC PROG QUAIL 3 MACH 1

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                        15701022-000              IC FIFO MEM 5Kx8 SOIC
                        15701023-000              IC FIFO MEM 10Kx8 TSO
                        15701025-000              IC SDRAM 4X16 TSOP 54
                        15701030-000              IC PROG FLASH ROM 256
                        15800046-001              IC DS1233DZ-10 SOT
                        15800050-002              IC RISK CNTLR MCF5206
                        15801029-000              IC FPGA 10K30A 208PQF
                        15801028-000              IC ALTERA 6024A 3.3V
                        15901005-000              IC ASIC DESKEW 208PQF
                        16100008                  CONN 37 PIN FEMALE DS
                        16100063-002              HEADER2X5SMT
                        16100066-000              CONN 44 PIN DIN MALE
                        16120005                  SHUNT JUMPER

                There will be no cancellation or reimbursement fees applicable
                to orders cancelled more than sixty (60) days prior to the
                acknowledged ship date.

        (b)     Deliveries may be rescheduled one time per Order up to 100% with
                fifteen (15) days written notice from FCPA.


        Delivery terms shall be FOB Irvine, California. KOFAX shall use its best
        effort to ship the Product according to FCPA's then current freight
        routing guide, a copy of which is attached as Exhibit G. Title to and
        risk of loss of all Products purchased by FCPA hereunder shall pass from
        KOFAX to FCPA upon Delivery.


        All packaging materials and methods shall be KOFAX's standard commercial
        materials and/or the methods set forth in Exhibit B. If FCPA requests
        any special packaging materials or methods different from those noted
        above, and if KOFAX agrees to use such special materials or methods, the
        additional cost thereof shall be paid by FCPA. If FCPA and KOFAX agree
        that the standard packaging is inadequate, then KOFAX will implement
        improved packaging at no extra cost to FCPA.

10.     LABELING

        Labeling shall be designed in accordance with the specifications set
        forth in Exhibit B entitled Product Requirements.

11.     PRICES

        (a)     The price to be paid by FCPA to KOFAX for the Product is
                attached as Exhibit C.

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<PAGE>   5

        (b)     KOFAX warrants that the price and terms set forth herein do not
                exceed those charged or imposed on any other customer
                purchasing the same Product for like quantities, terms and

        (c)     If KOFAX lowers its prices for the Product that meet the pricing
                requirements summarized in paragraph 11 (b) during the term of
                the Agreement; KOFAX shall immediately extend such lower prices
                to FCPA. If KOFAX decreases the price of any Product purchased
                by FCPA and still in FCPA's inventory, FCPA will be entitled to
                a credit on Products delivered to and paid for by Distributor,
                less any prior credits granted by FCPA, in the amount of the
                purchase price less the new decreased price for the Products
                multiplied by the quantity of such Products in FCPA's inventory
                on the effective date of the price decrease. Similar price
                adjustment will also be made on (i) all such Products in transit
                to FCPA on the effective date of such price decrease, and (ii)
                all Orders for such Products previously accepted by KOFAX but
                remaining unshipped on the effective date of such price

        (d)     Upon reasonable notice and during normal working hours, FCPA may
                appoint an independent auditor to review KOFAX records to
                determine if FCPA is receiving pricing as agreed to hereunder
                and that KOFAX is complying with the terms of this Agreement.
                KOFAX shall allow such independent auditor access to all
                applicable records of KOFAX for the purpose of conducting such
                audit. The independent auditor shall only report to FCPA whether
                KOFAX is complying with the terms of this Agreement.

        (e)     KOFAX will engage in ongoing cost reduction efforts, and where
                practicable, KOFAX will pass price reductions on to FCPA.

12.     PAYMENT

        (a)     All payment for the Products shall be made in U.S. Dollars.

        (b)     Payment will be Net 45 days from date of invoice.

        (c)     FCPA shall be responsible for the payment of all taxes, tax
                levies, or tax assessments imposed on the subject transactions
                or Products. FCPA shall be responsible for providing in a timely
                manner all documentation, in the nature of exemption
                certificates or otherwise, necessary to allow KOFAX to refrain
                from collections, such as sales tax, it is otherwise obligated
                to make. FCPA's obligations shall survive the termination of
                this Agreement.


        FCPA shall be eligible to rotate Product stock in its inventory for new
        Product which has been upgraded to a new version of VRS, provided such
        new version of the Product affects the form, fit or function of the
        preceding version, under the following terms:

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        (a)     FCPA shall be eligible for, subject to full compliance with
                Subsections (b) and (c) below, stock rotation privileges for a
                dollar amount of Product not to exceed ten percent (10%) of the
                then current dollar value of Product shipped to FCPA, less any
                credits or returns, for the three month period immediately prior
                to the stock rotation months of April, July, October and
                January. No percentage of rotation allowable shall accrue from
                one period to the next. Credit shall be at the net current value
                of the Product, which is the price paid by FCPA, less any
                credits granted to FCPA.

        (b)     An off-setting, non-cancelable Order for the same dollar amount
                in different Products than those rotated, must be submitted with
                request for stock rotation. Delivery dates scheduled under this
                purchase order shall not exceed thirty (30) days.

        (c)     Product returned for stock rotation must have been purchased
                from KOFAX during the previous six (6) months, be new, unused
                and in factory sealed containers, and be returned to KOFAX
                freight prepaid.


        (a)     All Products purchased by FCPA from KOFAX under this Agreement
                shall be used, leased, rented, licensed or sold by FCPA only
                under trademarks and/or trade names of FCPA or those of FCPA's
                customers or their customers. FCPA shall not use KOFAX's
                trademarks or trade names on or in connection with Products
                except as required by law or governmental regulation or as
                expressly authorized by KOFAX.

        (b)     FCPA grants KOFAX the right and KOFAX agrees to apply FCPA's
                trademarks or those of FCPA's customers to which FCPA has the
                right to have KOFAX apply to the Products (excluding any third
                party software which KOFAX may be licensed to use) to be
                manufactured and delivered to FCPA according to this Agreement,
                but at the expense of FCPA.

        (c)     FCPA agrees to defend KOFAX against any claim of trademark
                infringement by reason of the use upon the Products and/or upon
                any printed material in connection therewith of FCPA's trademark
                and trade names or those of FCPA's customers when so directed by
                FCPA. FCPA shall indemnify and hold harmless against any damages
                and cost reasonably incurred by KOFAX in any such claim to the
                extent attributable to such claim. FCPA's obligations with
                respect to such claims are expressly conditioned upon KOFAX
                giving FCPA prompt notice of any such claim and granting FCPA in
                writing exclusive control over its defense or settlement and
                cooperation with FCPA in the defense of such claim at FCPA's

        (d)     KOFAX agrees to defend FCPA against any claim of copyright or

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<PAGE>   7

                infringement by reason of the use upon the Products and/or upon
                any printed material in connection therewith of KOFAX's
                software, trademark and trade names or those of KOFAX's
                customers when so directed by KOFAX. KOFAX shall indemnify and
                hold harmless against any damages and cost reasonably incurred
                by FCPA in any such claim to the extent attributable to such
                claim. KOFAX's obligations with respect to such claims are
                expressly conditioned upon FCPA giving KOFAX prompt notice of
                any such claim and granting KOFAX in writing exclusive control
                over its defense or settlement and cooperation with KOFAX in the
                defense of such claim at KOFAX's expense.


        (a)     Object License. KOFAX grants FCPA a non-exclusive,
                non-transferable worldwide license to reproduce and distribute
                each Licensed Software (object code form only), for which the
                Licensed Software is to be integrated or adapted, as described
                in Exhibit B.

        (b)     Internal Copies. FCPA may use the Licensed Software internally
                for testing, demonstrating, training, customer support, and
                promotional purposes. No royalty shall be due KOFAX for copies
                of the Licensed Software which have been distributed for
                testing, training, demonstration and promotional purposes.


                KOFAX hereby grants FCPA the royalty-free right to reproduce,
                use, distribute and sell in FCPA's name all documentation
                associated with the Product under this Agreement. These rights
                with respect to documentation shall extend solely to FCPA.


        (a)     KOFAX shall cause inspection of each lot of the Products, prior
                to shipment of such lot to FCPA, and shall provide to FCPA the
                records of such inspection upon written request by FCPA. KOFAX
                at FCPA's request will supply a Certificate of Conformance on
                each lot shipping to FCPA.

        (b)     FCPA may attend and witness or participate in such inspection of
                the Products at the source as made by or for KOFAX, in order to
                determine that the Products conform with the Specifications,
                prior to acceptance of Delivery.

        (c)     FCPA shall have twenty (20) days from the date of receipt of the
                Products to perform incoming inspection and acceptance testing
                on the Products to determine whether the Product performs in
                accordance with the Product Specifications as set forth in
                Exhibit A and in accordance with procedures agreed to between
                the parties.

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        (d)     In the event that any Products delivered by KOFAX fail to pass
                such incoming inspection, FCPA shall notify KOFAX of such
                failure specifying the nature of the failure within the twenty
                (20) day acceptance period.

        (e)     Within five (5) business days after receipt of the notice of
                such defective Products, KOFAX shall:

                (i)     Replace such defective Products at KOFAX's expense,

                (ii)    Replace any service parts at KOFAX's own cost, including


        (a)     KOFAX warrants that all Products shall meet the Product
                Specifications set forth in Exhibit A and that all Products
                shall be free from material defects in design and workmanship.

        (b)     KOFAX further represents and warrants that KOFAX Products
                purchased under this Agreement will be Year 2000 compliant as
                set forth in Exhibit H and therefore will process date/time data
                during the transition from, into, and between the 20th and 21st
                centuries, provided that the computer system(s) to which the
                Products are connected accurately process the transition from,
                into, and between the 20th and 21st centuries. This warranty
                does not apply to any third-party branded products that may be
                bundled with Products or otherwise distributed by KOFAX.

        (c)     If a Product is found to be defective within ninety (90) days
                from date of Delivery to FCPA, FCPA may return the defective
                Product to KOFAX for credit utilizing the then current RMA
                procedure as set forth in Exhibit D, in the container specified
                by KOFAX, transportation prepaid. Any revisions to the RMA
                Procedure shall be reasonably agreed to by both parties and
                shall be deemed incorporated into this Agreement upon its
                acceptance by FCPA.

        (d)     After the initial ninety (90) day period, should any material
                defect in the Products be discovered by FCPA within the next
                twenty-four (24) months following the Delivery of such Products,
                FCPA shall notify KOFAX in writing of such defect promptly after
                discovery of such defect. In such case, KOFAX shall, within ten
                (10) business days after receipt of the notices of such
                defective Products specifying the nature of the defect, take
                appropriate measures including but not limited to the following
                as reasonably agreed to between FCPA and KOFAX.

                (i)    To supply to FCPA, free of charge, at KOFAX's discretion
                       repair and/or replacement Product of such material
                       defective Products. FCPA will ship back defective
                       Products to a location designated by KOFAX at KOFAX's

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                (ii)    To replace such defective Products at KOFAX's expense.

                (iii)   To modify the design of any Products (either delivered
                        or undelivered to FCPA) at KOFAX's expense so as to make
                        them non-defective Products.

        (e)     In the case of Epidemic Failure, KOFAX shall repair or replace
                any Product which does not conform to the foregoing warranties
                set forth herein, including reimbursement of labor incurred by
                FCPA. FCPA will ship back defective parts to a location
                designated by KOFAX in connection with repairing such Products
                at KOFAX's expense and pursuant to its then current RMA
                procedures. Epidemic Failure means any out of specification
                Product or Part failure, resulting from the same cause or
                phenomena, which can be found (i) on a minimum of 5 units per
                shipment and (ii) affects at least 5% of the total shipments
                received by FCPA.

        (f)     The Warranty hereunder shall not apply to any Product:

                (i)     Which has not been operated in accordance with the
                        applicable operators manual, or

                (ii)    Which has not been maintained in accordance with the
                        Product Specifications.

19.     TRAINING

        For a period of ninety (90) days from the Effective Date of this
        Agreement, KOFAX will provide at no charge a reasonable amount of
        initial training, but no less than forty (40) hours of training, to
        corporate FCPA training personnel, sales persons, engineers, and all
        FCPA personnel necessary at the discretion of FCPA. After the initial
        training, FCPA and KOFAX will mutually agree on a training schedule,
        cost and location and FCPA will reimburse for actual per diem expenses
        of KOFAX Personnel. Training shall be adequate and sufficient to acquire
        all necessary information for the Product. Training shall include, at
        KOFAX's expense, the most current Product information, training
        materials updates, upgrades or enhancements to the Product.


        (a)     KOFAX will defend at its own expense any suit brought against
                FCPA to the extent that it is based on a claim that Product made
                for FCPA in the form delivered to FCPA, caused damages to
                tangible property or personal injury, including death, of third
                parties provided that (i) FCPA shall notify KOFAX promptly in
                writing of any claim, (ii) KOFAX shall have sole control of the
                defense of any claim and all negotiations for its settlement or
                compromise, and (iii) FCPA shall provide complete authority,
                information, and assistance to KOFAX and its counsel for the
                defense of such claim Subject to subsection (b)

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                hereof, KOFAX shall indemnify and hold harmless FCPA against any
                damages finally awarded against FCPA in any such suit to the
                extent attributable to such claim.

        (b)     KOFAX shall have no liability or obligation to FCPA hereunder
                with respect to such claims if the Product was used for other
                than its intended use or if the damages resulted from the gross
                negligence or willful misconduct by the end user. Neither Party
                nor its affiliates shall be liable for indirect, special or
                consequential damages.



        KOFAX shall be responsible for obtaining certification of approvals from
        agencies listed in the Specification attached hereto.


        KOFAX is an independent contractor, and is not and shall not be deemed
        to be the legal representative or agent of FCPA for any purpose
        whatsoever, and KOFAX is not authorized by FCPA to transact business,
        incur obligations (express or implied), bill goods, or otherwise act in
        any manner in the name or on behalf of FCPA, or to make any promise,
        warranty or representation with respect to the Products or any other
        matter in the name or on behalf of FCPA. FCPA shall have no control over
        the manner of performance of KOFAX except as expressly provided herein.


        FCPA agrees that it will not export, directly or indirectly, any
        Products or technical data obtained under this Agreement to any country
        without first obtaining proper governmental licenses and/or approvals.

24.     SUPPORT

        (a)     KOFAX will provide technical information (including technical
                bulletins and tips) to FCPA for support of Products and Parts.
                KOFAX hereby grants FCPA the right to duplicate and distribute
                technical information regarding Products which is not
                proprietary or confidential on an as needed basis with the prior
                approval of KOFAX. If available, KOFAX will provide to FCPA any
                user documentation and/or software (including technical
                information) for Products or similar KOFAX Products so that FCPA
                may use the contents, where applicable and allowable, in
                creating FCPA's user documentation. This does not imply any
                transfer of, and does not expressly transfer any ownership of

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                property rights from KOFAX to FCPA.

        (b)     KOFAX will provide reasonable program assistance and technical
                support capable of answering questions and resolving purchasing,
                shipment, billing and technical issues at the KOFAX location
                that processes FCPA's Orders.

        (c)     KOFAX agrees to provide Repair Service for Product during the
                term of this Agreement at a mutually agreed upon price and for a
                minimum period of five (5) years following the last shipment of
                Product hereunder based on raw material availability at the
                price in effect at the time of last shipment. Product provided
                to FCPA under repair service shall be covered by a ninety (90)
                day warranty when the warranty period on the Product has passed.
                KOFAX shall have the option of not repairing Product one (1)
                year after last shipment to FCPA, however, if KOFAX elects to
                exercise this option FCPA will be provided with an alternative
                that is acceptable to FCPA, which such acceptance shall not be
                unreasonably withheld.

        (d)     Product returned to KOFAX for repair shall be repaired and
                updated to the specifications of the original Product and
                updated with the latest Engineering Changes. KOFAX shall use
                commercially reasonable efforts to repair and ship the repaired
                Product back to FCPA within ten (IO) business days from receipt.

        (e)     The VRS Problem Escalation Process, as set forth in the attached
                Exhibit E, will be used as a communication tool between FCPA and
                KOFAX to discuss Product problems and Product enhancement


        (a)     During the term of this Agreement each party may acquire
                valuable trade secrets and/or confidential and proprietary
                information of the other party or its affiliates. Confidential
                Information means all confidential and proprietary information
                which is disclosed by one party to the other party, which is
                marked confidential or which is identified in writing to be
                confidential within thirty (30) days after disclosure to the
                receiving party ("Confidential Information").

        (b)     Each party agrees not to use the Confidential Information for
                any purpose whatsoever except for the purpose set forth herein.
                Each party agrees not to disclose the Confidential Information
                to any third person or to its employees or those of its
                affiliates except those employees who have a legitimate need to
                know and who agree to keep such information confidential. Each
                party agrees that it shall protect the confidentiality of, and
                take reasonable steps to prevent disclosure or unauthorized use
                of, the Confidential Information in order to prevent it from
                falling into the public domain or the possession of persons not
                legally bound to maintain its confidentiality, provided that in
                no event shall such party's obligations exceed the standard of
                care taken to protect its own

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<PAGE>   12

                confidential information of like importance. Each party will
                promptly advise the other party in writing of any
                misappropriation or misuse by any person of such Confidential
                Information and provide assistance to the injured party in any
                lawsuit related thereto. Each party acknowledges that its
                obligations hereunder survive in accordance with the terms
                hereof, notwithstanding the termination of the business
                relationship of the parties, for a period of five (5) years
                following the last disclosure of Confidential Information by the
                other party hereunder.

        (c)     No copies of any Confidential Information may be made except to
                implement the purposes of this Agreement. Any materials,
                documents, notes, memoranda, drawings, sketches and other
                tangible items containing, consisting of or relating to the
                Confidential Information of a party which are furnished to the
                other party in connection with this Agreement, or are in the
                possession of the other party, and all copies thereof, remain
                the property of the party to which the Confidential Information
                is proprietary and shall be promptly returned to the party
                supplying the same upon a party's request therefor. Nothing
                contained in this Agreement shall be construed as granting any
                rights, by license or otherwise, in any Confidential Information
                except as specified in this Agreement.

        (d)     Each party's obligations under this Agreement shall not apply to
                information which: (a) is known by that party or is publicly
                available at the time of disclosure by the disclosing party to
                the receiving party; (b) becomes publicly available after
                disclosure by the disclosing party to the receiving party
                through no act of either party; (c) is hereafter rightfully
                furnished to the receiving party by a third party without
                restriction as to use or disclosure; (d) is disclosed with the
                prior written consent of the disclosing party; (e) is
                information that was independently developed by the receiving
                party; or (f) is required to be disclosed pursuant to any
                judicial or administrative proceeding, provided that the
                receiving party immediately after receiving notice of such
                action notifies the disclosing party of such action to give the
                disclosing party the opportunity to seek any other legal
                remedies to maintain such information in confidence.


        (a)     KOFAX warrants that to its knowledge all of the Products
                furnished hereunder do not infringe any patent or copyright or
                other industrial property rights, trademark or tradename of a
                third party. KOFAX shall defend, indemnify and save FCPA and
                it's customers harmless from any loss, damage, cost or liability
                incurred by FCPA as a result of any action or suit based on a
                claim which, if true, would constitute a breach of the foregoing
                warranties (hereinafter "Infringement Claims"), provided,
                however, that KOFAX's said obligation shall be conditioned upon:

                (i)     FCPA's notifying KOFAX of the existence of such action
                        or suit promptly;

                (ii)    FCPA's giving KOFAX full control of the conduct,
                        including settlement

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<PAGE>   13

                        of such action or suit;

                (iii)   FCPA's cooperating with KOFAX, at KOFAX's expense.

        (b)     Following the notification of FCPA defined under Subsection
                26(a)(i), KOFAX will at its own expense, either (i) procure for
                FCPA the right to continue using such Products royalty free,
                (ii) replace such Products to FCPA's reasonable satisfaction
                with non-infringing Products or equivalent quality and
                performance, or (iii) modify such Products so that they become
                non-infringing Products of equivalent quality and performance.
                If KOFAX is unable to provide any of the above alternatives,
                KOFAX must pay FCPA for all units sold to FCPA and then may
                terminate this Agreement by giving a written notice to FCPA. The
                foregoing constitutes the sole remedies available to FCPA and
                it's customers in the event of any such infringement.


        KOFAX claims all rights, title and interest in the Products delivered by
        KOFAX under this Agreement and in all of KOFAX's patents, trademarks,
        trade names, inventions, copyrights, know-how and trade secrets relating
        to the design and operation of that Product. FCPA agrees that the
        execution of this Agreement does not in any way give FCPA rights to any
        KOFAX' intellectual property or patents. However, should there be any
        work product developed during the term of the Agreement which is a
        result of any intellectual property provided by FCPA, it shall be
        licensed subject to the terms of a separate agreement to be mutually
        agreed upon between the parties at a later date.


        (a)     KOFAX shall give FCPA at least ninety (90) days advance written
                notice of engineering changes that will affect the form, fit or
                function of any Product in FCPA's inventory.

        (b)     KOFAX shall not make any form, fit, or function changes to the
                Product without the approval of FCPA. Subject to KOFAX's Quality
                Procedure, as set forth in the attached Exhibit F, KOFAX will
                document all proposed engineering changes as an Engineering
                Review Order ("ERO"). If applicable, sample of the proposed
                product change shall be provided with each ERO. FCPA shall have
                fifteen (15) business days to accept or reject such engineering

        (c)     Following FCPA's approval of the ERO, KOFAX shall follow with an
                Engineering Change Order ("ECO") for FCPA's formal acceptance of
                the change. FCPA shall have eight (8) business days from ECO
                delivery for approval. FCPA's failure to approve the ECO within
                this stipulated time, shall deem the ECO officially accepted.

        (d)     Accepted changes will be cut-in with the next production build
                of the Product or Product delivery. If FCPA rejects a change
                which affects the form, fit or

                                 Page 13 of 28
<PAGE>   14

                function, rendering the Product unusable by FCPA, the parties
                shall work together to determine a reasonable resolution to the
                problem. Any safety related ECO's shall be corrected under

        (e)     The implementation of KOFAX's Design and Change Control
                Procedure shall commence with initial production shipments to


        Should Products be discontinued or should an ECN create modifications to
        the Product that require KOFAX to assign a new Product number to the
        affected Product then FCPA shall be entitled to make an End-of-Life
        ("EOL") buy or return the Product for credit as specified below. Should
        FCPA decide to make an EOL buy the Order must be within thirty (30) days
        of the date of notice and FCPA agrees to take Delivery of that Product
        within thirty (30) days of the date EOL Order is placed.

        FCPA shall use commercially reasonable efforts to sell any Product which
        have been deemed EOL'd during the EOL notice period. Any EOL Products
        remaining unsold and in FCPA's inventory, which was returned to FCPA by
        its OEM's and Distributors upon the date the Product is EOL'd may be
        returned for credit subject to the following terms:

        (a)     All EOL'd Product returns must be made within sixty (60) days
                from the date the Product is EOL'd.

        (b)     FCPA shall receive a credit for all such EOL'd Products
                returned, provided the EOL'd Product being returned was
                purchased and paid for by FCPA within six (6) months of the date
                of EOL notice.

        (c)     Credit shall be based on the then current list price for the
                EOL'd Product as noted on the last version of KOFAX' price list
                containing the EOL'd Product, less any previously given credits
                or returns.

        (d)     FCPA shall return the EOL'd Products utilizing KOFAX's then
                current RMA procedure.

        (e)     Products returned must be new, unused and in factory sealed

        (f)     KOFAX shall pay freight charges provided that the choice of
                carrier remains solely with KOFAX.


                                 Page 14 of 28
<PAGE>   15

        (a)     Either Party may terminate this Agreement in whole or in part
                for any reason and without liability for that termination by
                giving a written ninety (90) day notice of termination to the
                other party.

        (b)     Either party may terminate this Agreement, effective upon
                written notice to the other, if any one of the following events
                occur: (i) the other files a voluntary petition in bankruptcy;
                (ii) the other is adjudicated bankrupt; (iii) the other makes an
                assignment for the benefit of its creditors; (iv) a court
                assumes jurisdiction of the assets of the other under a federal
                bankruptcy or reorganization act; (v) a trustee or receiver is
                appointed by a court for all or a substantial portion of the
                assets of the other; (vi) there is a substantial change in the
                financial conditions of the other; or (vii) the other is unable
                to pay its debts as they become due.

        (c)     Either party may terminate this Agreement upon written notice if
                the other party breaches this Agreement and fails to correct the
                breach within thirty (30) days following the receipt to a
                written notice specifying the breach.

        (d)     Upon termination FCPA's inventory will be repurchased as
                follows: (i) KOFAX shall buy back FCPA inventory of KOFAX
                Products purchased and paid for during the previous six (6)
                months and on hand at FCPA's location as of the effective date
                of termination, and KOFAX shall have the option to buy back FCPA
                inventory of KOFAX Products purchased more than six (6) months
                previously and on hand at FCPA location as of the effective date
                of the termination. All Products returned by FCPA to KOFAX shall
                comply with the following conditions: (1) be returned freight
                prepaid within sixty (60) days of receipt of notification by
                KOFAX, (2) be shipped in the original shipping container to
                eliminate Product damage during shipment, and (3) be received at
                KOFAX's facility new, unused, undamaged and in good working

        (e)     Upon the giving by KOFAX or FCPA of notice of election to
                terminate this Agreement, excluding termination as provided in
                subsection (b) above, KOFAX agrees to accept Orders on cash
                terms, or such other terms as may be mutually agreed, for
                Products which FCPA is contractually obligated to furnish prior
                to termination and does not have in its inventory, provided that
                FCPA within ten (10) days after the expiration of this Agreement
                or termination, as hereinabove provided, furnishes evidence to
                KOFAX's satisfaction of the existence of the contractual
                obligation; and provided further that KOFAX has a sufficient
                number of Products in stock and available for distribution to
                supply the same to FCPA.


                                 Page 15 of 28
<PAGE>   16



        (a)     KOFAX agrees to cooperatively work with FCPA in developing joint
                marketing programs for KOFAX VRS Ready scanners. KOFAX will
                offer cooperative marketing funds as well as supplement joint
                efforts with its own marketing programs.

        (b)     KOFAX will terminate current plans to market a KOFAX VRS
                configuration for Fujitsu M-Series video scanners through the
                FCPA channel and will allow FCPA to OEM several VRS components
                for inclusion in new FCPA VRS Ready scanners.

        (c)     KOFAX will not allow the shipment of non Fujitsu VRS enabled
                scanners prior to the first customer ship date of the KOFAX VRS
                Ready M3097DE scanner. For purposes of this Section, first
                customer ship shall be defined to mean no sooner than twenty
                (20), but no more than sixty (60), days KOFAX delivery of the
                initial purchase order issued by FCPA ("FCS").

        (d)     KOFAX agrees to not allow the inclusion of the VRS Auto
                Adjustment brightness and contrast features in non-Fujitsu VRS
                scanners prior to six (6) months after the first shipment by
                FCPA of a mutually agreed upon version 1.03 of the Product.

        (e)     FCPA will include a VRS logo, as approved by KOFAX, which will
                be installed by FCPA in a prominent location on the front of
                each scanner.

        (f)     FCPA agrees to create an additional part number consisting of
                the three VRS components (VRS Grayscale Scanner Adapter, VRS
                cable, VRS software) which can be sold by FCPA for use with
                existing M-Series video scanners in the field as an upgrade kit.

        (g)     FCPA agrees to use commercially reasonable efforts to
                participate in cooperative marketing efforts in conjunction with
                KOFAX's VRS marketing efforts.

        (h)     A Shockwave version of the VRS interactive demo CD presentation
                will be provided to FCPA for use on the FCPA website.


        Both parties agree not to disclose the terms and conditions of this
        Agreement, except as may be required by law or government regulation,
        including, without limitation, federal securities laws, and except to a
        party's accountants and attorneys without the prior written consent of
        the other party. The foregoing notwithstanding, either party may
        disclose that an Agreement has been signed by the parties for supply of
        Products by KOFAX to FCPA on an OEM basis.

                                 Page 16 of 28
<PAGE>   17


        Neither FCPA nor KOFAX shall be liable to the other for delays in the
        performance of this Agreement if such delay is caused by strike, riots,
        wars, government regulations, acts of God, fire, flood, or other causes
        beyond its control; provided, however, if any such delay by KOFAX
        continues thirty (30) days or more, then FCPA shall have the option,
        exercisable by written notice to cancel all or any portion of Orders
        placed hereunder and to cancel this Agreement without charge or


        This Agreement shall be governed by and interpreted in accordance with
        the laws of the State of California.

35.     NOTICES

        Written notices are to be sent to FCPA at

                Fujitsu Computer Products of America, Inc.
                2904 Orchard Parkway
                San Jose, CA 95134
                Attn:   Manager, Contracts Administration

Written notices are to be sent to the KOFAX at:

                3 Jenner
                Irvine, CA 92618
                Attn:   Manager, Contracts Administration


        Neither this Agreement nor any of the rights and obligations arising
        from it may be assigned or transferred in whole or in part to any third
        party without the prior written consent of the other party and any
        attempted assignment in violation of this Section shall be void.
        Notwithstanding the aforementioned, FCPA may assign this Agreement to
        its subsidiary or parent companies without prior notice to KOFAX and
        either party may assign this Agreement in connection with the sale of
        the business to which this Agreement relates. However, FCPA shall
        provide notice of such assignment to KOFAX within thirty (30) days after


        This Agreement does not make either party the employee, agent, joint
        venture, partner or legal representative of the other for any purpose
        whatsoever. In fulfilling its obligations under this Agreement, each
        party shall be deemed to be an independent contractor.

                                 Page 17 of 28

<PAGE>   18

38.     WAIVER

        No failure by either party to assert any right hereunder shall be deemed
        to be a waiver of such right in the event of the continuation or
        repetition of the circumstances giving rise to such right. The exercise
        of any right or remedy by either party shall not be deemed a waiver of
        any other right or remedy granted under this Agreement or available at


        This Agreement may not be amended, except by written agreement signed by
        both parties.

40.     SURVIVAL

        (a)     Even when this Agreement is terminated, cancelled or expires,
                any individual contract according to this Agreement of which the
                fulfillment date is beyond the termination, cancellation or
                expiration date shall survive this Agreement until the date of
                its final fulfillment.

        (b)     The rights and obligations of the parties hereto accrued at the
                time of termination, cancellation or expiration of this
                Agreement and under Sections 12, 14, 15, 18, 20, 23, 24, 25, 26,
                27, 30, 34, 41, 42 and 43 shall survive any termination,
                cancellation or expiration of this Agreement.


        The parties recognize that termination of this Agreement in accordance
        with its terms or its failure to be renewed or extended may result in
        loss or damage to either party but hereby expressly agree that neither
        party shall be liable to the other by reason of any loss of damage
        resulting from such termination of this Agreement by the other or the
        failure of the Agreement to be renewed or extended (including, without
        limitation, any loss of prospective profits or any damage occasioned by
        loss of goodwill) or by reason of any expenditures, investments, leases
        or commitments made in anticipation of the continuance of this
        Agreement. The foregoing, however, shall not in any way relieve either
        party from liability to the other for damages arising out of any
        violation or breach of this Agreement.




                                 Page 18 of 28
<PAGE>   19



        Any controversy arising out of or relating to this Agreement, any
        modifications or extension hereof, or any Order, sale or performance
        hereunder, including any claim for damages or rescission, or both, shall
        be settled, by three arbitrators in Santa Clara County, California, if
        instituted by KOFAX, or Orange County, California if initiated by FCPA
        in accordance with the Commercial Rules then obtaining of the American
        Arbitration Association. Judgment on the award may be entered in any
        Court of competent jurisdiction. The parties consent that any process or
        notice of motion or other application to either of said courts, and any
        paper in connection with arbitration, may be served by certified mail,
        return receipt requested, or by personal service or in such other manner
        as may be permissible under the rules of the applicable court or
        arbitration tribunal, provided a reasonable time for appearance is
        allowed. The parties further agree that arbitration proceedings must be
        instituted within eighteen (18) months after the claimed breach
        occurred, and that the failure to institute arbitration proceedings
        within such period shall constitute an absolute bar to the institution
        of any proceedings and a waiver of all such claims. The prevailing party
        in any arbitration or other legal proceedings shall be entitled, in
        addition to any other rights or remedies it may have, to reimbursement
        for its expenses incurred thereby and in any subsequent enforcement of a
        judgment including court and arbitration costs, reasonable attorneys'
        fees, arbitrator's fees, and witness fees including those of expert


        This Agreement, including the attachments, constitutes the entire
        agreement of the parties with respect to the subject matter hereof, and
        supersedes all previous agreements by and between the parties, as well
        as all proposals, oral or written, and all negotiations, conversation,
        and understandings heretofore had between the parties related to the
        subject matter of the Agreement. This Agreement supersedes any terms and
        conditions stated in any Order, acceptance or confirmation of Order to
        the extent they are inconsistent with this Agreement or purport to
        create obligations or rights additional to those set forth in this

45.     HEADING

        Headings used in this Agreement are for convenience only and shall not
        be used in interpreting the provisions of this Agreement.

                                 Page 19 of 28

<PAGE>   20

IN WITNESS WHEREOF, this Agreement has been executed by duly authorized
representatives of both parties hereto as of the date first written above.


Signature:  /s/ RICHARD M. MURPHY     Signature:  /s/ K. T. PARKER
          ------------------------              -----------------------------
Name:  Richard M. Murphy              Name:  KEVIN T. PARKER
     -----------------------------         ----------------------------------

Title:  V.P. SALES                    Title:  V.P. FINANCE AND ADMINISTRATION
      --------------------------            ---------------------------------

Date:  2/5/99                         Date:  2/1/99
     -----------------------------         -----------------------------------

                                 Page 20 of 28