Technology License Agreement

TECHNOLOGY AGREEMENT


This agreement (the "Agreement") is made effective February 25, 1998 (the "Effective Date") by and between Eastman Kodak Company, 343 State Street, Rochester, NY 14650 ("Kodak") and Kofax Image Products, 3 Jenner Street, Irvine, CA 92718 ("Kofax").


WHEREAS, Kodak owns certain adaptive threshold processing (ATP) technology which is a Kodak-patented algorithm that contains intelligent filters that dramatically lower the amount of image noise and which produces sharper, cleaner scans. (The filters also minimize artifacts on white-to-black and black-to-white transitions); and


WHEREAS, Kofax desires to incorporate such ATP technology into a chip known as KATE (Kofax Advanced Thresholding Engine); and


WHEREAS, Kodak is willing to license ATP technology for such use; and


WHEREAS, Kodak may wish to purchase KATE chips from Kofax; and


WHEREAS, Kofax is willing to sell KATE chips to Kodak; and


WHEREAS, Kofax desires to purchase certain ATP chips proprietary to Kodak from NEC/RYOSAN; and


WHEREAS, Kodak is agreeable to such purchase;


NOW THEREFORE, Kodak and Kofax have agreed as follows:


1. LICENSE OF ATP TECHNOLOGY TO KOFAX


1.1 Kodak grants and agrees to grant to Kofax a nonexclusive, worldwide,
royalty-bearing license to use the Kodak schematics to derive source code
in VHDL format for Kodak ATP technology, but solely to incorporate Kodak
ATP technology in net list form into the Kofax KATE chip, and to distribute
the Kodak ATP technology, as so incorporated, to third parties. Kofax, in
turn, will provide Kodak with the modified source code, with respect to the
ATP technology, in VHDL format as implemented in the Kofax KATE chip and
Kodak shall be the owner of such modified source code and net lists with
respect to the ATP technology. Kofax shall be the owner of the KATE chip
and retain all modifications and derivations thereof, excluding the ATP
technology referred to above. Kofax has the right to use the ATP technology
in KATE as specified above. This license also applies to bug fixes, new
features and new software versions provided by Kodak hereunder; provided
that Kodak reserves the right to negotiate a different royalty structure
for new features and new software versions. 2 1.2 Kodak grants and agrees to grant to Kofax a nonexclusive, worldwide
license to use the Kodak ATP software, but solely (i) to demonstrate ATP
technology to third parties, and (ii) on a server or set up workstation
to download ATP technology to networked PCs.


2. PURCHASE OF KATE CHIPS BY KODAK


2.1 Kofax agrees to sell KATE chips to Kodak. Kodak is, however, under no
obligation to purchase KATE chips.


2.2 It is understood by Kodak that, as of the Effective Date, the
specifications for KATE were not finalized.


The parties agree to work cooperatively to incorporate maximum practical
value to Kodak in the KATE chip, including but not limited to, the desire
to incorporate backward compatibility with existing Kodak ATP chips.


2.3 KATE chips purchased by Kodak may be distributed to third parties only as
incorporated into a Kodak product. Under no circumstances may they be
sold as a stand-alone product.


2.4 Kodak may purchase KATE chips directly from Kofax. The parties will
investigate the possibility of Kodak purchasing KATE chips directly from
the Manufacturing foundry. Kodak shall purchase KATE chips at Kofax's
cost.


3. SOURCING OF ATP CHIPS FROM NEC/RYOSAN


3.1 Subject to Kofax's compliance with the terms of this Section 3, and
payment of royalties as set forth in Section 5, Kodak authorizes Kofax to
purchase Kodak's ATP Chip, Kodak P/N/ 9B6927 (NEC P/N UPD65806GD-060-LML)
directly from RYOSAN. Kodak will notify NEC/RYOSAN that Kofax is an
authorized purchaser.


Order Placement Contact:
Ryosan
1220-2 Tebiro
Kamakura-City
Kanagawa, 248 Japan
Attn: Mr. Norihiro Kimura
Tel. 81-467-32-2316
Fax. 81-467-32-1539


3.2 Kofax agrees that all claims for defective chips purchased by Kofax from
RYOSAN, and all communications relating to such defective chips will be
submitted through Kodak.


* Confidential Portions Have Been Omitted and Filed Separately with the Commission.


2


3 4. LICENSE FEES


4.1 Kofax will pay Kodak a one-time, non-refundable, non-creditable technology
license fee of [ * ] due and payable prior to first customer shipment by
Kofax of a production product containing ATP technology.


4.2 Kofax will pay Kodak a one-time, non-refundable, non-creditable software
license fee of [ * ] due and payable prior to first customer shipment by
Kofax of a production product containing ATP software technology.


4.3 Should Kodak elect to purchase KATE chips, Kodak will pay Kofax a
one-time, non-refundable, non-creditable technology license fee of [ * ]
due and payable prior to first customer shipment by Kodak of a product
containing a KATE chip.


5. ROYALTIES


5.1 For the license granted in Section 1.1, Kofax shall pay to Kodak a per
unit royalty for each unit of KATE produced by or for Kofax and sold to
parties other than Kodak.


Cumulative Units of Kate Per Unit Royalty
------------------------ ----------------


[ * ]


5.2 For each ATP chip purchased by Kofax under Section 3, Kofax shall pay
Kodak a per unit royalty as follows:


Cumulative Units of ATP Chips Per Unit Royalty
----------------------------- ----------------


[ * ]


* Confidential Portions Have Been Omitted and Filed Separately with the Commission.
3


4 5.3 For each unit of KATE purchased by Kodak, Kodak shall pay Kofax a per unit
royalty as follows:


Cumulative Units of KATE Per Unit Royalty
------------------------ ----------------


[ * ]


6. COST AND MINIMUM ORDER QUANTITY, ATP CHIPS


6.1 Kofax may purchase ATP chips from NEC/RYOSAN at the same per unit price as
is charged Kodak. Such price is currently as follows:


Cumulative Volume Unit Price (Yen)
----------------- ----------


[ * ]


6.2 Minimum order quantity is 100 pieces.


6.3 The pricing above is based on stair-step pricing and is cumulative over
the term of the agreement.


7. PAYMENT AND AUDITING


7.1 Royalty reports and royalty payments shall be made thirty (30) days after
the close of the calendar quarter in which the royalties accrued. Each
report shall show the royalty calculation.


Contacts for Royalty Payments and Invoices:
------------------------------------------
For Kodak: For Kofax:
Ms. Patricia Young Ms. Karen Rickerson
Eastman Kodak Company Kofax Image Products
343 State Street 3 Jenner Street
Rochester, NY 14650-0907 Irvine, CA 92718


4 5 7.2 Audit. Each party agrees to allow a mutually acceptable, independent,
certified public accountant to audit its accounting records upon which the
royalty reports are based, provided that such accountant shall hold such
records in strictest confidence except as necessary to provide a summary
report on the accuracy of such royalty reports. Any such audit shall be ...