1
EXHIBIT 10.24
[MIDCONTINENT BUSINESS SYSTEMS, INC. LETTERHEAD]
LICENSE CONTRACT
THIS AGREEMENT made this 1st day of July, 1996, by and between MIDCONTINENT
BUSINESS SYSTEMS, INC., hereinafter referred to as "MBS," and KOFAX IMAGE
PRODUCTS, hereinafter referred to as "Client,"
WITNESSETH:
WHEREAS, Client desires to have MBS prepare customized computer software; NOW,
THEREFORE, in consideration of the mutual covenants and premises contained
herein, the parties hereto agree as follows;
1. Compensation. MBS hereby agrees to provide the customized computer
software, hereinafter referred to as the "Software Package," developed
by MBS and described in Exhibit A, for the sum of [ * ] PLUS
ADDITIONAL ROYALTIES as described in Exhibit A.
2. Source Code and Customized Code. MBS will provide Client with a copy
of the source code in order to facilitate Client's use of the Software
Package. However, MBS shall retain all ownership rights of both the
source code and all customized codes prepared by MBS in connection
with the Software Package. This customized code shall be licensed to
Client as set forth below. MBS does not permit modification of the
customized code except that if the Client determines to modify the
code, the following provisions apply.
a. All warranties made by MBS pursuant to this Agreement shall
immediately terminate.
b. Client agrees that it will provide MBS with a copy of the
modified source code.
3. Changes in the Software Package. To the extent that the Client
determines that it wishes to change the Software Package, Client shall
provide MBS with a proposed change order specifying the changes. Upon
receipt of the proposed change order. MBS shall then provide Client
with a letter amendment to this Agreement indicating acceptance of the
change order and adjustment in the compensation to be paid to MBS
pursuant to this Agreement. If MBS accepts the change order and the
Client accepts the adjustment in the compensation to MBS, the parties
shall enter into a written amendment to this Agreement accepting the
change order and adjusting the compensation.
4. Software to be Licensed. The parties desire to enter into a License
Agreement whereby Client will receive a limited license to utilize the
Software Package prepared by MBS for Client pursuant to this
Agreement.
5. Grant of License and Restrictions of License.
a. MBS hereby grants to Client, subject to the limitations of this
Agreement, a non-exclusive license to use and market the Software
Package.
b. This license is limited by the following conditions:
(1) Unless terminated by MBS due to a breach of this Agreement
by Client, Client's license under this Agreement shall be
perpetual.
* Confidential portions omitted and
filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL TREATMENT
Page 1 of 4
2
6. Protection of MBS's Proprietary Rights. To protect MBS's proprietary
rights to the Software Package, Client agrees to adhere to the
conditions listed in Section 5 above. Further, Client agrees to
instruct all of its employees who may use or have access to the
Software Package of the conditions listed in Section 5. Client also
agrees that it will take all such steps as are necessary to prevent
any third party from having access to or using or duplicating the
Software Package.
7. Maintenance. MBS shall provide defect only support, directly to the
Client, for the Software package as part of the royalty payment to
MBS. Any support which is necessitated by any alterations, tampering,
or repairs performed on the Software Package by Client or any third
party shall be at additional charge to a Client.
8. Payments and Special Charges. Client shall promptly pay all invoices
sent to Client by MBS in accordance with this Agreement. All charges
shall be due and payable by Client within thirty (30) days after
billing by MBS. After that time, a finance charge of 1.5% per month
will be charged to the outstanding balance.
9. Additional Duties of Client. Client shall promptly report to MBS any
suspected malfunctions or defects in the Software Package.
10. Enhancements and Modifications. If Client desires any modifications in
the Software Package, MBS shall make such modifications, if feasible,
at a price to be determined by MBS.
11. Default. Either party shall be in default under this Agreement if it
fails to timely perform or observe any of the terms or conditions of
this Agreement.
12. Remedies. In the event of a default under this Agreement by a party,
the other party shall have the right to terminate this Agreement upon
written notice thereof to the defaulting party. In the event of a
default by MBS, Client's remedies shall be limited to the right to
recover from MBS the amount of any sums actually paid to MBS under
this Agreement. If either party terminates this Agreement due to
default by the other before delivery, acceptance and payment of the
license fee, Client shall immediately return the Software Package and
any other property of MBS which it may have to MBS. In the event of a
default by Client, MBS shall have any and all rights available under
law and at equity, including the right to ▇▇▇ for all damages incurred
and to ▇▇▇ for specific performance. Client agrees that upon the
occurrence of any actual or threatened breach by Client of the
restrictions upon the use, sale, transfer, or disclosure of the
Software Package contained in Section 8 herein, monetary damages alone
shall not be sufficient remedy or protection for MBS, and MBS shall be
entitled to such injunctive or other equitable relief as may be deemed
proper or necessary by a court of competent jurisdiction. Except as
provided herein, all available rights and remedies shall be cumulative
and the exercise of any right or remedy shall not be deemed exclusive.
MBS SHALL IN NO EVENT BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT
OR CONSEQUENTIAL DAMAGES, AND CLIENTS RIGHT TO DAMAGES SUFFERED BY
REASON OF A DEFAULT HEREUNDER SHALL BE LIMITED TO THE REFUND OF NO
MORE THAN ANY CHARGES PAID HEREUNDER.
13. Limitations of MBS's Warranties. MBS warrants only that the Software
Package shall function as specified by the Requirements and that MBS
has the right to grant the license contained in this Agreement. MBS
MAKES NO OTHER WARRANTIES OR REPRESENTATIONS, WHETHER EXPRESS OR
IMPLIED, REGARDING THE SOFTWARE PACKAGE OR ITS FUNCTIONS OR
CAPABILITIES, INCLUDING NO WARRANTY REGARDING THE FITNESS OF THE
SOFTWARE PACKAGE FOR CLIENT'S INTENDED USE(S) OR CLIENT'S EQUIPMENT.
Notwithstanding anything herein to the contrary, however, MBS shall
have no duty to correct, repair, redesign or otherwise perform
services for the Software Package (i) once Client has accepted the
Software Package, or (ii) if Client has in any way modified or
tampered with the Software Package. In addition, MBS shall have no
liability for claims concerning installation, performance
specifications, or capability of the Software Package unless such
claims are made in writing within one year after delivery of the
Software Package by MBS.
Page 2 of 4
3
14. General Provisions. Any waiver by either party of any term or
condition of this Agreement or a default hereunder shall not be
constructed as a waiver of any subsequent performance due under that
term or condition or any other term or condition of any subsequent
default. The provision of this Agreement are severable and in the
event that any provision hereof is held by any court to be voidable or
unenforceable, such provisions shall be deemed stricken from this
Agreement and all other terms and conditions shall remain in full
force and effect, and the parties agree to remain bound by and perform
in accordance with the terms hereof, as so amended. This Agreement
constitutes the entire agreement between the parties and supersedes
any previous written, between the parties. This Agreement may not be
amended or altered except by a writing signed by both parties.
15. Governing Law, Jurisdiction, and Venue. This Agreement shall be deemed
to be an agreement entered into in the State of South Dakota. The laws
of the State of South Dakota shall govern this agreement. Upon request
of MBS, any dispute arising under or in connection with this agreement
may be submitted to binding arbitration in Sioux Falls, SD, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date set
forth above.
MIDCONTINENT BUSINESS SYSTEMS, INC. KOFAX IMAGE PRODUCTS
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Signature: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------- ----------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President/General Manager Title: VP Marketing
Date: 7/15/96 Date: 7/8/96
Page 3 of 4
4
EXHIBIT A
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Item Total*
--------------------------------------------------------------------------------
MBS Tiff to MO:DCA Conversion Utility [ * ]
================================================================================
TOTAL* [ * ]
--------------------------------------------------------------------------------
--------------
* All monetary amounts are in U.S. Dollars
** This amount represents a guaranteed pre-payment of royalty fees for the
first 50 licenses sold at [ * ] per license. For every license over 50
sold, an additional royalty fee of [ * ] will be due and payable by Client
to MBS.
Under the terms of this agreement, a license is considered to have been sold
each time that Client sells an Ascent Capture Scan Station license. Sales by
Client of multiple Ascent Capture Scan Station licenses to a single Client
customer constitute the sale of multiple licenses of the Software Package
described in the table above.
* Confidential portions omitted and
filed separately with the
Securities and Exchange Commission.
Page 4 of 4