AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 5, 1998
REGISTRATION NO. 333-42611
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
AMENDMENT NO. 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------------------------------------------------
INFODATA SYSTEMS INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
VIRGINIA 16-0954695
(STATE OR JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
7372
(PRIMARY STANDARD
INDUSTRIAL CLASSIFICATION CODE NUMBER)
12150 MONUMENT DRIVE
FAIRFAX, VIRGINIA 22033
(703) 934-5205
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
12150 MONUMENT DRIVE
FAIRFAX, VIRGINIA 22033
(ADDRESS OF PRINCIPAL PLACE OF BUSINESS OR INTENDED PRINCIPAL PLACE OF BUSINESS)
JAMES UNGERLEIDER, PRESIDENT
INFODATA SYSTEMS INC.
12150 MONUMENT DRIVE
FAIRFAX, VIRGINIA 22033
(703) 934-5205
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
COPIES TO:
MONICA LORD, ESQ. DAVID ALAN MILLER, ESQ.
KRAMER, LEVIN, NAFTALIS & FRANKEL GRAUBARD MOLLEN & MILLER
919 THIRD AVENUE 600 THIRD AVENUE
NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10016
(212) 715-9100 (212) 818-8800
Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
------------------
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_]
------------------
If this form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [_]
------------------
If delivery of the prospectus is expected to be made pursuant to Rule
434 under the Securities Act, please check the following box. [_]
------------------
<PAGE>
EXPLANATORY NOTE
This Amendment No. 1 to this Registration Statement is an exhibit-only
filing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 10 ("Article 10") of Chapter 9 of Title 13.1 of the Virginia Stock
Corporation Act ("VSCA") authorizes a Virginia corporation to indemnify its
officers, directors, employees and agents under certain circumstances against
expenses and liabilities incurred in legal proceedings involving such persons
because of their holding or having held such positions with the corporation and
to purchase and maintain insurance for such indemnification. The Company's
Bylaws and Paragraph 10 of its Articles of Incorporation provide that the
Company shall indemnify its officers and directors to the fullest extent
permitted by Article 10 of the VSCA.
Section 13.1-692.1 of the VSCA limits the personal liability of an officer
or director to the corporation for damages arising out of certain alleged
breaches of the director's duties to the corporation. No such limitation of
liability is available if the officer or director engaged in: (i) willful
misconduct or (ii) a knowing violation of the criminal law or of any federal or
state securities law, including, without limitation, any claim of unlawful
insider trading or manipulation of the market for any security. Paragraph 9 of
the Company's Articles of Incorporation eliminates the personal liability of the
directors and officers of the Company to the fullest extent permitted by Section
13.1-692.1 of the VSCA.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant estimates that expenses payable by the Registrant in
connection with the offering described in this Registration Statement (other
than the underwriting discount and commissions and reasonable expense allowance)
will be as follows:
SEC registration fee...................................... $ 4,121.15
NASD filing fee .......................................... $ 1,897.01
Nasdaq filing fees........................................ $*
Printing and engraving expenses........................... $*
Accounting fees and expenses.............................. $*
Legal fees and expenses (except Blue Sky)................. $*
Blue sky fees and expenses................................ $*
Miscellaneous............................................. $*
--------------------
Total.......................................... $ *
====================
* To be completed by amendment.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On July 22, 1997, the Company issued an aggregate of 400,000 shares of
Common Stock to Alan Fisher and Razi Mohiuddin, the former shareholders of
AMBIA, as consideration for the purchase of all of the outstanding shares of
capital stock of AMBIA, pursuant to an Agreement of Merger and Plan of
Reorganization. The Company relied on Section 4(2) of the Securities Act, as the
basis for an exemption from registration, because the transaction did not
involve any public offering.
On October 11, 1995, the Company issued an aggregate of 210,000 shares
to Richard Tworek, Mary Margaret Styer and Andrew Fregly, the shareholders of
Merex, as consideration for the acquisition of Merex pursuant to an Asset
Purchase Agreement and Plan of Reorganization. The Company relied on Section
4(2) of the Securities Act as the basis for an exemption from registration,
because the transaction did not involve any public offering.
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<PAGE>
The Company has agreed to issue shares of Common Stock on a quarterly
basis to each of Richard Bueschel, Lawrence Glazer, Robert Leopold, Millard
Pryor, Jr., Isaac Pollak and Alan Fisher, the non-employee directors of the
Company as payment of consulting fees for 1997 in the amount of $10,000 per
non-employee director. Through September 30, 1997, each non-employee director
was entitled to 872 shares of Common Stock. Certificates evidencing such shares
and the number of shares to which the non-employee directors will be entitled
for the last quarter of 1997 will be issued in January, 1998. The Company is
relying on Section 4(2) of the Securities Act as the basis for an exemption from
registration, because these shares will be issued by the Company solely to its
non-employee directors, and thus will not involve any public offering.
II-2
<PAGE>
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS
Exhibit
Number Description of Document
- ------ -----------------------
1.1** Form of Underwriting Agreement.
2.1*** Plan and Agreement of Merger, dated as of March 10, 1995, by and
between Infodata Systems Inc. and Virginia Infodata Systems, Inc.
2.2 Asset Purchase Agreement and Plan of Reorganization, dated as of
October 6, 1995, among the Company, Merex, Inc. and Richard M.
Tworek, Mary Margaret Styer and Andrew M. Fregly (incorporated
by reference to the Company's Current Report on Form 8-K dated
October 11, 1995).
2.3 Agreement of Merger and Plan of Reorganization, dated as of July
22, 1997, by and among the Company, AMBIA Corporation, Alan
Fisher and Razi Mohiuddin, Software Partners, Inc. and Ambia
Acquisition Corporation (incorporated by reference to the
Company's Current Report on Form 8-K dated August 6, 1997 and
Form 8-K/A dated October 6, 1997).
3.1 Articles of Incorporation (incorporated by reference to Exhibit
A of the Company's Proxy Statement dated April 10, 1996).
3.2*** Articles of Amendment of Articles of Incorporation of the
Company, dated as of August 12, 1996.
3.3 By-Laws (incorporated by reference to Exhibit B to the Company's
Proxy Statement dated April 10, 1995).
4.1** Form of Representatives' Purchase Option granted to GKN
Securities Corp. and Southeast Research Partners, Inc.
5.1** Opinion of Kramer, Levin, Naftalis & Frankel regarding the
validity of the Company's Common Stock to be issued in the
public offering.
10.1*+ Cross License Agreement, dated as of December 3, 1997, by and
between the Company and Adobe Systems Incorporated.
10.2 Office Building Lease, dated as of April 12, 1993, by and
between the Company and Monument Fairfax Associates for One
Monument Drive (incorporated by reference to Exhibit 10(dd) to
the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1994).
10.3*** Lease Agreement, dated as of July 20, 1993, between The Landmark
and Software Partners, Inc. for 2013 Landings Drive, Mountain
View California.
10.4 Lease for Data Processing Service Agreement, dated as of July
29, 1994, between the Company and Financial Technologies Inc.
(incorporated by reference to Exhibit 10(ee) to the Company's
Annual Report on Form 10-KSB for the fiscal year ended December
31, 1994).
10.5 Executive Separation Agreement, dated as of October 20, 1986,
between the Company and Harry Kaplowitz (incorporated by
reference to Exhibit 10(a) to the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1993).
10.6 Executive Separation Agreement, dated as of October 20, 1986,
between the Company and Robert Loane (incorporated by reference
to Exhibit 10(b) to the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1993).
10.7*** Employment and Non-Compete Agreement, dated as of July 22, 1997,
between the Company, AMBIA Corporation and Razi Mohiuddin.
10.8*** Employment and Non-Compete Agreement, dated as of October 11,
1995, between the Company and Richard M. Tworek.
10.9*** Letter Employment Agreement, dated as of November 5, 1997,
between the Company and James Ungerleider.
10.10*** Note, Loan and Security Agreement, dated as of October 31, 1997,
between the Company and Merrill Lynch Business Financial
Services Inc.
10.11*** Loan and Registration Right Agreement, dated as of October 3,
1996, between the Company and Richard M. Tworek.
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<PAGE>
10.12 1995 Stock Option Plan (incorporated by reference to Exhibit
4(a) to the Company's Registration Statement on Form S-8, dated
as of June 13, 1995).
10.13 1997 Employee Stock Purchase Plan (incorporated by reference to
Exhibit 4(a) to the Company's Registration Statement on Form
S-8, dated as of June 27, 1997).
21.1*** Subsidiaries of the Company.
23.1*** Consent of Arthur Andersen LLP, Independent Auditors.
23.2*** Consent of Seiler & Company, Independent Auditors.
23.3** Consent of Kramer, Levin, Naftalis & Frankel (contained in
Exhibit 5.1).
27.1*** Financial Data Schedule.
- -------------
* Filed herewith
** To be filed by amendment
*** Previously filed
+ Material has been omitted from Exhibit 10.1 pursuant to a request for
confidential treatment. The omitted material has been separately
filed with the Commission.
(b) Financial Statement Schedules
Schedule Description
-------- -----------
II Valuation and
Qualifying
Accounts
ITEM 28. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement to;
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) Reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
Registration Statement;
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act, treat
each post-effective amendment as a new registration of the securities offered,
and the offering of such securities at that time to be the initial bona fide
offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the end of the
offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
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<PAGE>
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matterhas been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Amendment No. 1
to Registration Statement to be signed on its behalf by the undersigned, in the
City of New York, State of New York, on January 5, 1998.
INFODATA SYSTEMS INC.
By:/s/ James Ungerleider
---------------------
James Ungerleider
(President)
In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement has been signed by the following
persons in the capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ James Ungerleider President, Chief Executive January 5, 1998
- ------------------------------------ Officer and Director
James Ungerleider
/s/ Christopher P. Dettmar Chief Financial Officer January 5, 1998
- ------------------------------------
Christopher P. Dettmar
* Chairman of the Board January 5, 1998
- ------------------------------------- and Director
Richard T. Bueschel
* Director January 5, 1998
- -------------------------------------
Alan S. Fisher
* Director January 5, 1998
- -------------------------------------
Laurence C. Glazer
* Director January 5, 1998
- -------------------------------------
Harry Kaplowitz
* Director January 5, 1998
- -------------------------------------
Robert Leopold
* Director January 5, 1998
- -------------------------------------
Isaac M. Pollak
* Director January 5, 1998
- -------------------------------------
Millard H. Pryor, Jr.
* Director January 5, 1998
- -------------------------------------
Richard M. Tworek
* /s/ James Ungerleider
- -------------------------------------
James Ungerleider
Attorney-In-Fact
</TABLE>
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<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit Page
Number Description of Document Number
- ------ ----------------------- ----------
<S> <C> <C>
1.1** Form of Underwriting Agreement.
2.1*** Plan and Agreement of Merger, dated as of March 10, 1995, by and
between Infodata Systems Inc. and Virginia Infodata Systems, Inc.
2.2 Asset Purchase Agreement and Plan of Reorganization, dated as of
October 6, 1995, among the Company, Merex, Inc. and Richard M.
Tworek, Mary Margaret Styer and Andrew M. Fregly (incorporated
by reference to the Company's Current Report on Form 8-K dated
October 11, 1995).
2.3 Agreement of Merger and Plan of Reorganization, dated as of July
22, 1997, by and among the Company, AMBIA Corporation, Alan
Fisher and Razi Mohiuddin, Software Partners, Inc. and Ambia
Acquisition Corporation (incorporated by reference to the
Company's Current Report on Form 8-K dated August 6, 1997 and
Form 8-K/A dated October 6, 1997).
3.1 Articles of Incorporation (incorporated by reference to Exhibit
A of the Company's Proxy Statement dated April 10, 1996).
3.2*** Articles of Amendment of Articles of Incorporation of the
Company, dated as of August 12, 1996.
3.3 By-Laws (incorporated by reference to Exhibit B to the Company's
Proxy Statement dated April 10, 1995).
4.1** Form of Representatives' Purchase Option granted to GKN
Securities Corp. and Southeast Research Partners, Inc.
5.1** Opinion of Kramer, Levin, Naftalis & Frankel regarding the
validity of the Company's Common Stock to be issued in the
public offering.
10.1*+ Cross License Agreement, dated as of December 3, 1997, by and
between the Company and Adobe Systems Incorporated.
10.2 Office Building Lease, dated as of April 12, 1993, by and
between the Company and Monument Fairfax Associates for One
Monument Drive (incorporated by reference to Exhibit 10(dd) to
the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1994).
10.3*** Lease Agreement, dated as of July 20, 1993, between The Landmark
and Software Partners, Inc. for 2013 Landings Drive, Mountain
View California.
10.4 Lease for Data Processing Service Agreement, dated as of July
29, 1994, between the Company and Financial Technologies Inc.
(incorporated by reference to Exhibit 10(ee) to the Company's
Annual Report on Form 10-KSB for the fiscal year ended December
31, 1994).
10.5 Executive Separation Agreement, dated as of October 20, 1986,
between the Company and Harry Kaplowitz (incorporated by
reference to Exhibit 10(a) to the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31, 1993).
10.6 Executive Separation Agreement, dated as of October 20, 1986,
between the Company and Robert Loane (incorporated by reference
to Exhibit 10(b) to the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1993).
10.7*** Employment and Non-Compete Agreement, dated as of July 22, 1997,
between the Company, AMBIA Corporation and Razi Mohiuddin.
10.8*** Employment and Non-Compete Agreement, dated as of October 11,
1995, between the Company and Richard M. Tworek.
10.9*** Letter Employment Agreement, dated as of November 5, 1997,
between the
<PAGE>
Company and James Ungerleider.
10.10*** Note, Loan and Security Agreement, dated as of October 31, 1997,
between the
Company and Merrill Lynch Business Financial Services Inc.
10.11*** Loan and Registration Right Agreement, dated as of October 3,
1996, between the Company and Richard M. Tworek.
10.12 1995 Stock Option Plan (incorporated by reference to Exhibit
4(a) to the Company's Registration Statement on Form S-8, dated
as of June 13, 1995).
10.13 1997 Employee Stock Purchase Plan (incorporated by reference to
Exhibit 4(a) to the Company's Registration Statement on Form
S-8, dated as of June 27, 1997).
21.1*** Subsidiaries of the Company.
23.1*** Consent of Arthur Andersen LLP, Independent Auditors.
23.2*** Consent of Seiler & Company, Independent Auditors.
23.3** Consent of Kramer, Levin, Naftalis & Frankel (contained in
Exhibit 5.1).
27.1*** Financial Data Schedule.
</TABLE>
- -------------
* Filed herewith
** To be filed by amendment
*** Previously filed
+ Material has been omitted from Exhibit 10.1 pursuant to a request for
confidential treatment. The omitted material has been separately
filed with the Commission.
CONFIDENTIAL TREATMENT REQUESTED
CROSS-LICENSE AGREEMENT
This Agreement is made by and between ADOBE SYSTEMS INCORPORATED, a
Delaware corporation having a principal place of business at 345 Park Avenue,
San Jose, California 95110-2704 ("Adobe"), and INFODATA SYSTEMS INC., a Virginia
corporation having a principal place of business at 12150 Monument Drive, Suite
400, Fairfax, Virginia 22033 ("Infodata"), effective as of December 3, 1997 (the
"Effective Date").
RECITALS
A. Adobe owns certain computer programs which are useful in producing,
viewing and transmitting documents in heterogeneous computing environments,
known collectively as the Adobe Acrobat(R) software products ("Acrobat").
B. Infodata owns all right, title and interest to the Win 32 Re:mark(R)
2.04 software and related Documentation (the "Re:mark Software"). Infodata is
currently performing development work to modify the Re:mark Software in order to
provide annotation functionality for Adobe's Acrobat product and to incorporate
the modified software (the "Modified Re:mark Software") into Acrobat for this
purpose. Infodata is performing the development work pursuant to a separate
Consulting Agreement between Adobe and Infodata (the "Consulting Agreement"), a
copy of which is attached as EXHIBIT A.
C. Adobe wishes to acquire, and Infodata wishes to grant to Adobe, an
exclusive license to that portion of the Modified Re:mark Software known as the
"Residual Re:mark Software," and a non-exclusive license to the remainder of the
Modified Re:mark Software, which software is further described in EXHIBIT B
("Description of Modified Re:mark Software"). Adobe also wishes to acquire, and
Infodata wishes to grant to Adobe, an option to purchase in the future all
right, title and interest in the Residual Re:mark Source Code.
D. Adobe owns all right, title and interest in the * software (the " *
Software").
E. Infodata wishes to acquire, and Adobe wishes to grant to Infodata, a
non-exclusive license to the * Software.
F. The purposes of this Agreement are for Infodata to license the
Modified Re:mark Software to Adobe; to provide Adobe with an option to purchase
the Residual Re:mark Software portion of such software; to set forth certain
marketing arrangements between the parties with respect to the license of the
Modified Re:mark Software; and for Adobe to license the *
Software to Infodata.
- --------
* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
<PAGE>
The parties therefore agree as follows:
AGREEMENT
1. DEFINITIONS
1.1 " * SOFTWARE" shall mean the * software program and Documentation
delivered by Adobe to Infodata pursuant the license set forth in Section 3.6
hereof.
1.2 "COMMENCEMENT DATE" shall mean the date upon which delivery and
acceptance by Adobe of the Release Candidate of the Modified Re:mark Software
has been completed in accordance with the Consulting Agreement.
1.3 "COMMON SHARED LIBRARY" shall mean that portion of the Re:mark
Software consisting of a common shared library pertaining to functionalities
other than annotation, in both Object Code and Source Code form. Approximately
fifteen percent (15%) of the Re:mark Software consists of the Common Shared
Library.
1.4 "DOCUMENTATION" shall mean all technical documentation for a
software product in licensor's possession, including flowcharts, program
procedures and descriptions (including descriptions of the Source Code and build
procedures for the Object Code), procedures for maintenance and modification,
testing data and similar written material relating to the design, structure and
implementation of the software product.
1.5 "END USER" shall mean a third party who purchases a product or
component for its ordinary business purposes, but not for redistribution or
resale.
1.6 "EXCLUSIVE PERIOD" shall mean that period of time beginning on the
Commencement Date and ending on the third anniversary of the Commencement Date.
1.7 "GRAMMAR CALLS" shall mean that portion of the Re:mark Software
that consists of a collection of VFC grammar calls for annotation and
publishing, in both Object Code and Source Code form.
1.8 "INITIAL INFODATA * PRODUCT" shall have the meaning set forth in
PARAGRAPH 3.6.4.
1.9 "INTELLECTUAL PROPERTY RIGHTS" shall mean all intellectual property
rights worldwide arising under statutory law, common law or by contract and
whether or not perfected, including without limitation, all (i) patents, patent
applications, and patent rights; (ii) rights
- --------
* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
-2-
<PAGE>
associated with works of authorship including copyrights, copyright
applications, copyright registrations, mask work rights, mask work applications,
mask work registrations; (iii) rights relating to the production of trade
secrets and confidential information; (iv) any rights analogous to these set
forth in this PARAGRAPH 1.9 and any other proprietary rights relating to
intellectual property; and (v) divisions, continuations, renewals, reissues and
extension of the foregoing (as and to the extent applicable) now existing,
hereafter filed, used or acquired.
1.10 "LICENSE FEE" shall have the meaning set forth in PARAGRAPH 7.1.
1.11 "LICENSED SOFTWARE" shall mean software to which a party obtains
license rights pursuant to this Agreement; that is, with respect to the licenses
granted by Infodata to Adobe herein, the Modified Re:mark Software; and with
respect to the licenses granted by Adobe to Infodata herein, the * Software.
1.12 "MODIFIED RE:MARK SOFTWARE" shall mean the Re:mark Software as
modified by Infodata to meet Adobe's specifications for incorporation into
Adobe's Acrobat software products, in accordance with the Consulting Agreement.
The Modified Re:mark Software licensed hereunder consists of the following
components of the Re:mark Software, as modified pursuant to the Consulting
Agreement: (i) the Common Shared Library, (ii) the Grammar Calls, and (iii) the
Residual Re:mark Software.
1.13 "NET REVENUE" shall mean the gross amount of all cash, in kind or
other consideration received by Infodata at any time in consideration of the
licensing or other distribution of the * Software or VFC, as the case may be,
excluding any amounts received by Infodata for sales and use taxes, shipping,
insurance, duties, credits, and returns.
1.14 "OBJECT CODE" shall mean the machine executable object code form
of a software program.
1.15 "OPTION EXERCISE PERIOD" shall have the meaning set in forth in
PARAGRAPH 5.
1.16 "PDF" shall mean Adobe Portable Document Format.
1.17 "RELEASE CANDIDATE" shall mean that version of the Modified
Re:mark Software for which the following are true, as further described in the
Consulting Agreement: (i) the alpha version and the beta version of the product
have already been delivered and accepted; (ii) the alpha version and the beta
version have been tested and substantially all of the bugs have been fixed so
that the software performs at a level consistent with recently released products
from Adobe; (iii) the product has been successfully tested for viruses; and (iv)
all media, including floppy disks, if applicable, are completed.
1.18 "RE:MARK SOFTWARE" shall mean the Win 32 Re:mark 2.04 software and
related Documentation.
- --------
* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
-3-
<PAGE>
1.19 "RESIDUAL RE:MARK SOFTWARE" shall mean all portions of the
Modified Re:mark Software other than the Common Shared Library and the Grammar
Calls, in both Object Code and Source Code form.
1.20 "SOURCE CODE" shall mean the human readable, source code version
of a software program and the build environment required to compile the Source
Code of the software program into the Object Code version thereof.
1.21 "VFC" shall mean the commercially available product developed and
marketed by Infodata under the name VFC (which stands for "Virtual File
Cabinet") that allows End Users to create, store, organize and publish
information using Web technology. VFC consists of the VFC Document Web Server,
the foundation layer of VFC; Bridging Technology, enablers for scalable server
communications; and client-based Extensions, which add functionality to the VFC
Document Server.
1.22 "WARRANTY PERIOD" shall have the meaning set in forth in PARAGRAPH
9.5.
2. SOFTWARE DEVELOPMENT, DELIVERY AND ACCEPTANCE PROCESS.
2.1 SOFTWARE DEVELOPMENT AND ACCEPTANCE PROCESS. The software
development to be performed by Infodata for Adobe, including the specifications
and acceptance process therefor, shall be performed in accordance with the
Consulting Agreement.
2.2 DELIVERY. Following acceptance by Adobe of the Release Candidate in
accordance with the Consulting Agreement, Infodata will deliver the Modified
Re:mark Software and the associated Documentation to Adobe. The Modified Re:mark
Software will be delivered telephonically, provided that Adobe bears the costs
of such telephonic transmission. Infodata agrees not to deliver to Adobe any
Modified Re:mark Software deliverable under this Agreement in any tangible
medium unless otherwise expressly directed by Adobe in advance. Coincident with
the telephonic transmission of such deliverable items in each instance, Infodata
shall execute and deliver to Adobe a certificate within fifteen (15) days of
transmission and in a form acceptable to Adobe, which certificate shall contain
at a minimum: the date of transmission, the times such transmission was
commenced and concluded, the name(s) of Infodata personnel who made the
transmission, the signature(s) of such personnel and a general description of
the nature of the item(s) transmitted sufficient to distinguish the transmission
from other transmissions.
3. LICENSES.
3.1 MODIFIED RE:MARK SOFTWARE LICENSES. Infodata hereby grants to Adobe
the following licenses as of the Commencement Date:
3.1.1 EXCLUSIVE LICENSE TO RESIDUAL RE:MARK SOFTWARE. An
unrestricted, perpetual, irrevocable, fully-paid up, worldwide, royalty-free and
exclusive license under all of Infodata's Intellectual Property Rights in the
Residual Re:mark Software to use, reproduce, modify and create derivative works
from, distribute, publicly perform, publicly display, make, have made, sell,
offer for sale, and import the Residual Re:mark Software by all means now
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<PAGE>
known or later developed. The foregoing license shall include the right to
sublicense any or all of such rights though one or more tiers of sublicensees.
For purposes of this PARAGRAPH 3.1.1, "exclusive" shall mean that Infodata shall
have no rights to the Residual Re:mark Software except to use it as necessary
for Infodata to enable interoperability between VFC and such version(s) of
Acrobat that incorporate the Residual Re:mark Software, provided that such use
does not (i) compete with Adobe products or (ii) create or enable features or
functionality that serve as a substitute for PDF; provided further that
Infodata's rights to the Residual Re:mark Software as required for Infodata to
enable interoperability between VFC and such version(s) of Acrobat that
incorporate the Residual Re:mark Software shall be a limited right to use
internal and external interfaces and protocols as the parties determine
(collectively, the "Protocols") that manage and internetwork the Modified
Residual Re:mark Software elements incorporated in such version(s) of Acrobat to
interoperate with VFC. Notwithstanding the foregoing, Adobe may, but is not
obligated to, grant to Infodata additional licenses to use such Residual Re:mark
Software during the Exclusive Period on mutually agreeable terms and conditions.
The foregoing license shall be exclusive until the end of the Exclusive Period,
at which time the license shall become nonexclusive if Adobe has elected not to
exercise its option to purchase the Residual Re:mark Software pursuant to
PARAGRAPH 5 ("Option to Purchase Residual Re:mark Software"). Adobe acknowledges
and understands that Infodata is in the business of software development and
that it shall continue to develop software products, including annotation
applications, subject to Adobe's rights with regard to the Residual Re:mark
Software.
3.1.2 NON-EXCLUSIVE LICENSE TO THE COMMON SHARED LIBRARY AND
GRAMMAR CALLS. An unrestricted, perpetual, irrevocable, fully-paid up,
worldwide, royalty-free and non-exclusive license under all of Infodata's
Intellectual Property Rights in the Common Shared Library and Grammar Calls to
use, reproduce, modify and create derivative works from, distribute, publicly
perform, publicly display, make, have made, sell, offer for sale and import the
Common Shared Library and Grammar Calls by all means now known or later
developed. Notwithstanding the foregoing, Adobe shall have no right to modify
the Grammar Calls, although Infodata acknowledges and agrees that Adobe retains
the right to develop new grammar calls or extensions to the Grammar Calls. The
foregoing license shall include the right to sublicense any or all of such
rights though one or more tiers of sublicensees.
3.2 END USER LICENSES. Adobe may grant End Users the non-exclusive
right to use the Modified Re:mark Software pursuant to the terms of its
then-current end user license agreement, which end user license agreement shall
be no less protective than the terms as are set forth in EXHIBIT C ("Adobe End
User License Agreement"). Adobe's obligations under this PARAGRAPH 3.2 ("End
User Licenses") shall terminate upon Adobe's exercise of the Option to Purchase
Residual Re:mark Software.
3.3 FURTHER ASSISTANCE. Infodata agrees to perform all acts deemed
reasonably necessary or desirable by Adobe to permit and assist Adobe, at
Adobe's expense, to obtain and enforce the full benefits throughout the world of
Adobe's license in the Modified Re:mark Software set forth herein, including but
not limited to the execution of documents and assistance or cooperation in the
registration and enforcement of the applicable Modified Re:mark Software. By way
of example and in no way as a limitation on the foregoing, Infodata acknowledges
that
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it will register the Re:mark Software with the United States Copyright Office
and will provide Adobe with copies of the foregoing registration. Infodata
further agrees to assist Adobe in registering its exclusive license to the
Residual Re:mark Software. In the event that Adobe is unable for any reason
whatsoever to secure a signature on behalf of Infodata to any document it
believes is reasonably required in order to apply for or execute any patent,
copyright or other application with respect to the exercise of its rights set
forth herein, Infodata hereby irrevocably designates and appoints Adobe and its
duly authorized officers and agents as their agents and their attorneys-in-fact
to act for and in their benefit and instead of them, to execute and file any
such application and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyrights or other rights thereon with the
same legal force and effect as if executed by Infodata.
3.4 PATENTS. In the event that Infodata is issued any patents based on
the Modified Re:mark Software, Infodata shall not assert such patent rights
against Adobe for its use of the Modified Re:mark Software pursuant to the
licenses granted in PARAGRAPH 3.1 ("Modified Re:mark Software Licenses").
3.5 TRADEMARK LICENSE. Effective upon the Commencement Date, Infodata
shall grant to Adobe a perpetual, irrevocable, worldwide, royalty-free and fully
paid license to use the "Re:mark' trademark in connection with Adobe's marketing
and distribution of the Modified Re:mark Software. In addition, Infodata hereby
grants to Adobe a worldwide, royalty-free and fully paid license to use the
"Infodata" and "VFC" trademarks and such other trademark licenses as are
necessary for Adobe to fulfill its marketing obligations under Section 6 of this
Agreement.
3.6 * SOFTWARE LICENSE. Adobe hereby grants to Infodata the following
license as of the Effective Date:
3.6.1 * SOFTWARE SOURCE CODE LICENSE. A perpetual, irrevocable
and nonexclusive license to use, reproduce, modify and create derivative works
of the Source Code of the * Software. Infodata agrees that it will not (a) use
the Source Code at any site other than the offices of Infodata, which offices
shall be located in the United States; (b) disclose the Source Code of the *
Software, or any portion thereof, to third parties; (c) reproduce the Source
Code of the * Software, or any portion thereof, in any form or medium, except
for archival storage; or (d) use the Source Code of the * Software for any
purpose not specifically authorized in this Agreement. Infodata agrees to keep
the Source Code of the * Software on a secure computer(s) with password access
and that it will disclose the Source Code of the * Software only to those
Infodata employees and independent contractors with a need to know, and all such
employees and independent contractors will be required to sign a nondisclosure
agreement no less restrictive than Infodata's standard agreement. Infodata
agrees to allow Adobe to inspect a list of all such employees and independent
contractors at Adobe's request if Adobe has reason to believe that the Source
Code of the * Software may have been improperly disclosed.
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
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3.6.2 * SOFTWARE OBJECT CODE LICENSE. An unrestricted, worldwide,
perpetual, irrevocable and non-exclusive license to use, reproduce, distribute,
sublicense, publicly perform and display, make, and have made the Object Code of
the * Software and any modified versions thereof created by Infodata pursuant to
PARAGRAPH 3.6.1. Infodata may grant End Users the non-exclusive right to use the
* Software, in Object Code form only, pursuant to the terms of its then-current
end user license agreement, which end user license agreement shall be no less
protective than the terms as are set forth in EXHIBIT C ("Adobe End User License
Agreement").
3.6.3 PATENTS. In the event that Adobe is issued any patents
based on the * Software, Adobe shall not assert such patent fights against
Infodata for its use of the * Software pursuant to licenses granted in PARAGRAPH
3.6.1 and PARAGRAPH 3.6.2 (the " * Software Licenses").
3.6.4 LIMITATIONS ON ADOBE. Notwithstanding the non-exclusive
nature of * Software Licenses, Adobe agrees that (i) it will not develop and
market a stand-alone product based substantially on the * Software that competes
with Infodata's first commercially released stand-alone product based on the *
Software (the "Initial Infodata * Product") (ii) nor will Adobe sublicense the *
Software to a third party with rights to develop and market a stand-alone
product based substantially on the * Software that competes with the Initial
Infodata Product.
3.6.5 OWNERSHIP OF INFODATA MODIFICATIONS TO * . Infodata will
own any modifications to the * Software that Infodata develops, subject to
Adobe's ownership rights in the * Software, which Adobe expressly retains and
reserves, and the * Software, as modified, will continue to be subject to the
terms and conditions of this Agreement.
4. PROPRIETARY RIGHTS AND LEGENDS.
4.1 PROPRIETARY NOTICES.
4.1.1 BY ADOBE. Except for the rights expressly enumerated herein
or in the Consulting Agreement which is EXHIBIT A hereto, as between Adobe and
Infodata, Infodata will retain ownership of all Intellectual Property Rights in
the Re:mark Software, unless and until Adobe exercises its the Option to
Purchase Residual Re:mark Software. Adobe agrees that as a condition of its
rights hereunder, each copy of the Modified Re:mark Software shall contain the
proprietary notices of Infodata in a manner consistent with Adobe's past
practice with respect to third-party proprietary notices placed in prior
versions of the Acrobat product; provided, however, that this obligation with
respect to the Residual Re:mark Software shall expire in the event that Adobe
exercises its Option to Purchase Residual Re:mark Software pursuant to the
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
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terms of Paragraph 5 hereof. In addition, Adobe shall have such other
proprietary notices as are required pursuant to Section 6.3 hereof.
4.1.2 BY INFODATA. Except for the rights expressly enumerated
herein, as between Adobe and Infodata, Adobe will retain ownership of all
Intellectual Property Rights in the * Software. Infodata agrees that as a
condition of its rights hereunder, each copy of the * Software shall contain the
same proprietary notices which appear on or in such * Software provided by Adobe
to Infodata and as otherwise reasonably required by Adobe. More specifically,
Infodata agrees that a valid Adobe copyright notice for the * Software will
appear on the media, or, in the case of Object Code executing on a workstation
or other host-based system, displayed on the single user screen of the
workstation or other hostbased system when the Object Code is first invoked
during an End User session, in the following format or such other format as
Adobe specifies by written notice to Infodata:
"Contains Adobe(R) Acrobat(R) Media Editor and Browser licensed
from Adobe Systems Incorporated. Copyright (C) 19__ Adobe Systems
Incorporated. All rights reserved."
The copyright data shall be the first publication date of the Initial Infodata *
Product. Presence of a copyright notice does not constitute an acknowledgment of
publication,
4.2 U.S. GOVERNMENT END USERS. When distributing Licensed Software to a
U.S. Government End User, each party shall identify the Licensed Software and
related Documentation as a "commercial item," as that term is defined at 48
C.F.R. 2.101 (OCT 1995), and more specifically shall identify the Licensed
Software and related Documentation as "commercial computer software" and
"commercial computer software documentation," as such terms are used in 48
C.F.R. 12.212 (SEPT 1995). Consistent with 48 C.F.R. 12.212 and 48 C.F.R.
227.7202-1 through 227.7202-4 (JUNE 1995), each party will provide the Licensed
Software and related Documentation to U.S. Government End Users (a) only as a
Commercial Item and (b) with only those rights as are granted to all other End
Users pursuant to the terms and conditions herein.
4.3 FOREIGN GOVERNMENT AGREEMENTS. Each party will take all reasonable
steps in making proposals and agreements with foreign governments other than the
United States which involve the Licensed Software and related Documentation to
ensure that the other party's proprietary rights in such Licensed Software and
related Documentation receive the maximum protection available from such foreign
government for commercial computer software and related documentation developed
at private expense.
5. OPTION TO PURCHASE RESIDUAL RE:MARK SOFTWARE. In the event that the licenses
described in PARAGRAPH 3.1 ("Modified Re:mark Software Licenses") hereof
commence according to the terms provided herein, Adobe will have the right to
purchase all Intellectual
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
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Property Rights in the Residual Re:mark Software and the "Re:mark" trademark for
Fifty Thousand Dollars ($50,000) at any time between the second and third-year
anniversaries of the Effective Date of this Agreement (the "Option Exercise
Period"), subject only to the grant of a limited license to Infodata to use the
Residual Re:mark Software as is necessary for Infodata to enable
interoperability between VFC and such version(s) of Acrobat that incorporate the
Modified Re:mark Software, provided that such use of the Residual Re:mark
Software by Infodata does not (i) compete with Adobe products or (ii) create or
enable features or functionality that serve as a substitute for PDF; provided
further that Infodata's rights to the Residual Re:mark Software as required for
Infodata to enable interoperability between VFC and such version(s) of Acrobat
that incorporate the Residual Re:mark Software shall be a limited right to use
internal and external interfaces and protocols as the parties determine
(collectively, the "Protocols") that manage and internetwork the Modified
Residual Re:mark Software elements incorporated in such version(s) of Acrobat to
interoperate with VFC. Upon the commencement of the Option Exercise Period,
Infodata shall give written notice to Adobe of the Option to Purchase Residual
Re:mark Software. Adobe acknowledges and understands that Infodata is in the
business of software development and that it shall continue to develop software
products, including annotation applications, subject to Adobe's rights with
regard to the Residual Re:mark Software.
6. VFC
6.1 VFC PRODUCT MARKETING. Infodata hereby appoints Adobe as a
non-exclusive marketing representative for the Infodata VFC product with rights
to directly market VFC, and Adobe hereby accepts such appointment. In connection
with such appointment, and subject to the terms of this Agreement, Infodata
grants Adobe the non-exclusive right to (i) resell VFC and its Documentation,
(ii) use, display, and perform VFC and its Documentation for demonstration
purposes, and (iii) use the "Infodata" and "VFC" trademarks.
6.2 VFC BUTTON. In connection with the Modified Re:mark Software
Licenses, Acrobat Exchange 4.x versions will include a button (the "VFC Button")
which when clicked will produce a VFC splash screen, a link to Infodata's Web
site, and other mutually-agreed upon functionality.
6.3 PROPRIETARY NOTICES AND INFORMATION; PLACEMENT OF VFC BUTTON. In
connection with the Modified Re:mark Software Licenses, Acrobat Exchange 4.x
versions will include descriptive information and trademark notices regarding
VFC in the "Help" and "About Plug- ins" pull-down options, provided that the
size and placement of such notices shall be consistent with Adobe's past
practice with respect to plug-in vendors described in prior versions of the
Acrobat product. Adobe shall be entitled, in its sole discretion, to determine
the size and placement of the VFC Button, the splash screen, and any and all
proprietary notices; provided, however, that if Acrobat Exchange 4.x versions
contain an annotation menu or annotation toolbar, Adobe will place the VFC
Button within such menu, toolbar, or annotation options. Adobe shall not be
obligated to include the VFC Button in Acrobat Reader unless Acrobat Reader
contains an annotation menu, annotation toolbar, or annotation options. Adobe
reserves the right not to include an annotation menu, annotation toolbar, or
annotation options in either Acrobat Exchange 4.x or Acrobat Reader.
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7. PAYMENT, TAXES AND EXPENSES.
7.1 BY ADOBE. In consideration for the licenses to the Modified Re:mark
Software set forth in PARAGRAPH 3.1 ("Modified Re:mark Software Licenses")
herein, Adobe shall pay One Million U.S. Dollars ($1,000,000) (the "License
Fee") to Infodata, according to the following schedule:
7.1.1 Upon execution of the Letter of Intent, dated October 24,
1997, between the parties with respect to this Agreement, Adobe paid Infodata,
and Infodata acknowledges payment of, One Hundred Thousand Dollars ($100,000) as
a refundable prepayment of the License Fee.
7.1.2 Upon execution of this Agreement, Adobe shall pay Infodata
Four Hundred Thousand Dollars ($400,000) as a refundable prepayment of the
License Fee.
7.1.3 Upon delivery and acceptance of the beta version of the
Modified Re:mark Software pursuant to the terms of the Consulting Agreement,
Adobe shall pay Infodata One Hundred Thousand Dollars ($100,000) as a refundable
prepayment of the license Fee.
7.1.4 On the Commencement Date, Adobe shall pay the remaining
Four Hundred Thousand Dollars ($400,000) of the License Fee.
7.2 REFUND OF PREPAYMENT. Because Adobe's license to the Modified
Re:mark Software will not be effective, if at all, until delivery and acceptance
of the Release Candidate of the Modified Re:mark Software, Infodata shall refund
the payments described in PARAGRAPH 7.1 already made by Adobe in the event that
either of the following occur: (i) Infodata fails to deliver the Release
Candidate of the Modified Re:mark Software in accordance with the Consulting
Agreement or (ii) Adobe does not accept the Release Candidate of the Modified
Re:mark Software according to the acceptance procedures set forth in the
Consulting Agreement.
7.3 BY INFODATA.
7.3.1 * ROYALTIES. In consideration for the * Software License,
Infodata will pay to Adobe a royalty at the rate of five percent (5%) of the Net
Revenue received from distribution of the * Software as a stand-alone product,
as incorporated into another Infodata product, or as bundled with third party
products. The royalties shall be paid only for the first two (2) years following
the release of the Initial Infodata * Product, with an annual cap of Two Hundred
Thousand Dollars ($200,000) on royalty payments each year, after which the
license shall be deemed to be royalty-free and fully paid-up.
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
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7.3.2 VFC BUTTON COMMISSIONS. In consideration for the actual use
of a VFC Button and other marketing obligations undertaken by Adobe pursuant to
PARAGRAPH 6 ("VFC Button"), Infodata agrees to pay Adobe commissions on sales of
VFC in accordance with the following schedule:
<TABLE>
<CAPTION>
VFC Button Commissions
- --------------------------------------------------------------------------------------------------------------------------
Year After Commercial Estimated % of Units Sold Commission as Percentage
Release of Acrobat 4.0 Through Acrobat 4.0 of Net Revenue of the Basis
(the "Basis")
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1 60% of VFC product 4%
sales
- --------------------------------------------------------------------------------------------------------------------------
2 50% of VFC product 4%
sales
- --------------------------------------------------------------------------------------------------------------------------
3 33% of VFC product 3%
sales
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
7.3.3 TERMINATION OF COMMISSION OBLIGATIONS. Infodata's
obligation to pay commissions pursuant to PARAGRAPH 7.3.2 ("VFC Button
Commissions") shall terminate upon payment by Infodata to Adobe of two million
dollars ($2,000,000) in VFC Button Commission payments in the aggregate.
7.3.4 VFC MARKETING COMMISSIONS. In consideration for Adobe's
efforts in its capacity as a marketing representative, Infodata will pay Adobe a
commission at the rate of twenty percent (20%) of Infodata's Net Revenue from
such Adobe direct sales of VFC.
7.4 PAYMENTS AND REPORTS. Within thirty (30) days after the end of each
calendar quarter, Infodata shall, during the applicable royalty periods, provide
Adobe with a report indicating: (1) the Net Revenue from distribution of the *
Software as a stand-alone product, as incorporated into another Infodata
product, or as bundled with third party products; and (2) the Net Revenue from
sales from me sales of VFC. Infodata shall provide Adobe with payment of the
royalties due under PARAGRAPHS 7.3.1 through 7.3.4 based on the above
calculations along with such report.
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
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7.5 AUDIT RIGHTS. Adobe shall have the right to conduct an inspection
and audit of all the accounting and sales books and records of Infodata
pertaining to the transactions contemplated by Agreement during regular business
hours at Infodata's offices and in such a manner as not to interfere with
Infodata's normal business activities. In no event shall audits be made
hereunder more frequently than every six (6) months. If such inspections
disclose underreporting, Infodata shall promptly pay Adobe such amount, together
with interest thereon at the rate of one and one-half percent (1 1/2%) per month
or the highest interest rate allowed by law, whichever is lower, from the date
on which such amount became due.
7.6 TAXES. Each party agrees to be responsible for payment of its own
sales, use, excise, import or export, value added or other tax or duty, as well
as the collection or withholding thereof, including penalties and interest,
imposed upon or arising out of this Agreement with respect to its own licensed
software and the transactions contemplated herein. Both Adobe and Infodata will
accept telephonic delivery of the Licensed Software.
7.7 TRANSACTION EXPENSES. Adobe and Infodata will each be responsible
for payment of their own liabilities, costs, obligations, or expenses, including
but not limited to attorneys' and accountants' fees, incurred in connection with
this Agreement and the transactions contemplated herein.
8. MAINTENANCE AND SUPPORT.
8.1 BY INFODATA. Infodata will provide all available written
documentation (including product plans, product specifications and bug reports)
related to the Re:mark Software and the Modified Re:mark Software. At Adobe's
request, Infodata shall provide maintenance and support for the Modified Re:mark
Software. The parties shall agree to the cost for such services prior to their
commencement. Initial rates are specified in EXHIBIT A ("Consulting Agreement").
Infodata's support obligation shall be limited initially to Acrobat 4.0. The
parties may agree to establish support arrangements for subsequent versions of
Acrobat upon such terms as the parties may then agree.
8.2 BY ADOBE. Adobe will provide all available written documentation
(including product plans, product specifications, and bug reports) related to
the * Software. Infodata acknowledges that the Adobe engineering team that
developed the * Software is no longer in existence, but Adobe offers to make
commercially reasonable efforts to provide for consulting from such engineering
resources as are available.
9. REPRESENTATIONS AND WARRANTIES.
Infodata represents and warrants as follows:
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
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9.1 OWNERSHIP AND AUTHORITY. Infodata is the sole and exclusive owner
of all right, title and interest in the Re:mark Software and all Intellectual
Property Rights associated therewith. The Re:mark Software and all Intellectual
Property Rights associated with it are free and clear of all encumbrances,
including, without limitation, security interests, liens, charges or other
restrictions. Infodata represents and warrants that it has full power and
authority to make and enter into this Agreement and to grant to Adobe the rights
and licenses granted hereunder.
9.2 NON-INFRINGEMENT. The Re:mark Software, the Modified Re:mark
Software, when delivered, and VFC do not infringe or violate any third party's
copyright, trademark, trade secret or U.S. Patent.
9.3 NO OTHER LICENSES. Infodata has granted no licenses to the Re:mark
Software or the Modified Re:mark Software or otherwise granted or agreed to
grant any rights to any third party which conflict with the rights herein
granted by Infodata to Adobe.
9.4 CURRENT VERSION. The Modified Re:mark Software will contain all
revisions, updates and changes of and to the Re:mark Software as of the date on
which it is delivered to Adobe pursuant hereto.
9.5 PERFORMANCE WARRANTY. For a period of one hundred and eighty (180)
days following the Commencement Date (the "Warranty Period"), (i) the Source
Code of the Modified Re:mark Software will compile into the Object Code of the
Modified Re:mark Software to create the executable version of the Modified
Re:mark Software, and (ii) the Modified Re:mark Software will substantially
conform to the Specifications and the Documentation therefor and will not
contain any defect which would in any material and adverse respect affect
Adobe's use of the Modified Re:mark Software or the functioning of the Modified
Re:mark Software. If, during the applicable Warranty Period, Adobe reports to
Infodata a failure of such Modified Re:mark Software to conform to the foregoing
warranty, Infodata, at its expense, shall use reasonable commercial efforts to
modify or replace the Modified Re:mark Software in a timely manner to correct
such failure.
9.6 PROTECTION. Except as to independent contractors and consultants
who have each executed a nondisclosure agreement no less restrictive than
Infodata's standard agreement, the Source Code of the Re:mark Software has not
been disclosed to any third party and Infodata has used and will continue to use
safeguards to protect the Re:mark Software Source Code and the Modified Re:mark
Software Source Code against disclosure to third parties, at least as protective
as it uses to safeguard its most valuable proprietary information and in no
event less than reasonable care.
Adobe represents and warrants as follows:
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9.7 OWNERSHIP AND AUTHORITY. Adobe is the sole and exclusive owner of
all right, title and interest in the * Software and all Intellectual Property
Rights associated therewith. The * Software and all Intellectual Property Rights
associated with it are free and clear of all encumbrances, including, without
limitation, security interests, liens, charges or other restrictions. Adobe
represents and warrants that it has full power and authority to make and enter
into this Agreement and to grant to Infodata the rights and licenses granted
hereunder.
9.8 NON-INFRINGEMENT. The * Software does not infringe or violate any
third party's copyright, trademark, trade secret, or U.S. Patent.
9.9 REMEDY FOR BREACH OF REPRESENTATIONS AND WARRANTIES. Each party
(the "Indemnifying Party") hereby indemnifies and holds the other party (the
"Indemnitee") harmless with respect to all damages, costs, expenses (including
reasonable attorneys' fees), and other liabilities or obligations of any nature
incurred by the Indemnitee arising out of or relating to a breach by the
Indemnifying Party of one or more the Indemnifying Party's representations and
warranties herein. With respect to any third-party claim that is asserted
against an Indemnitee for which the Indemnitee is entitled to indemnification,
the Indemnitee will notify the Indemnifying Party of the claim as promptly as
possible; however, the Indemnitee's failure to provide such notice will not
relieve the Indemnifying Party of its obligation to indemnify the Indemnitee
except and only to the extent that the Indemnifying Party suffers damages as a
result of such failure. In the case of a breach of PARAGRAPH 9.2
("Non-Infringement") or PARAGRAPH 9.8 ("Non-Infringement"), the Indemnifying
Party will, at its option and expense, either (a) secure for the Indemnitee the
right to continue using and, as applicable, reproducing and distributing the
infringing Licensed Software or (b) replace or modify the infringing Licensed
Software so that the substituted software, documentation, and other materials
are noninfringing and have functionality no less than the infringing Licensed
Software. The Indemnifying Party will have the right to conduct the defense of
the claim and any settlement negotiations related thereto. The Indemnitee will,
at the Indemnifying Party's reasonable request and expense (including but not
limited to reasonable attorneys' fees), assist the Indemnifying Party in the
defense of the claim, and the Indemnitee will have the right to participate in
such defense at its expense. Notwithstanding the foregoing, the Indemnifying
Party will have no obligation to indemnify Indemnitee for third-party
infringement claims to the extent that such claims are based upon (i)
modifications to the Licensed Software made by the Indemnitee or by a third
party (other than the Indemnifying Party) on behalf of the Indemnitee or (ii)
the combination of the Licensed Software, in Object Code or Source Code form,
with third-party equipment or software not authorized by the Indemnifying Party
or otherwise approved by the Indemnifying Party in its specifications or
documentation. This indemnification provision shall apply to damages resulting
from breaches which are discovered within three (3) years after the execution of
this Agreement.
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
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10. DISCLAIMER
EXCEPT FOR THE EXPRESS WARRANTIES STATED IN THIS AGREEMENT, NEITHER
PARTY MAKES ANY ADDITIONAL WARRANTIES WITH RESPECT TO ITS SOFTWARE AND
DOCUMENTATION, WHETHER EXPRESS, IMPLIED, ARISING FROM COURSE OF DEALING OR USAGE
OF TRADE, STATUTORY OR OTHERWISE. IN PARTICULAR, ANY AND ALL WARRANTIES OF
FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR NON-INFRINGEMENT ARE
EXPRESSLY EXCLUDED.
11. LIMITATION OF LIABILITY
EXCEPT FOR A BREACH OF PARAGRAPH 9.2 ("NON-INFRINGEMENT") OR PARAGRAPH
9.8 ("NON-INFRINGEMENT"), IN NO EVENT SHALL ANY PARTY BE LIABLE FOR
CONSEQUENTIAL, SPECIAL, INDIRECT OR INCIDENTAL DAMAGES, INCLUDING BUT NOT
LIMITED TO ANY DAMAGES RESULTING FROM LOSS OF USE OR PROFITS ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT, WHETHER IN AN ACTION BASED ON CONTRACT, TORT
(INCLUDING NEGLIGENCE) OR ANY OTHER LEGAL THEORY, EVEN IF THE PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR ANY DAMAGES HOWSOEVER ARISING AND WHETHER DIRECT,
INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL INCLUDING, BUT NOT LIMITED TO,
ANY DAMAGES RESULTING FROM LOSS OF USE OR PROFITS, IN EXCESS OF TWO MILLION
DOLLARS (US $2,000,000).
12. TERM AND TERMINATION.
12.1 TERM. This Agreement will be effective from the Effective Date and
shall remain in effect unless terminated pursuant PARAGRAPH 12.2 ("Termination
for Material Breach").
12.2 TERMINATION FOR MATERIAL BREACH. Adobe or Infodata may terminate
this Agreement by written notice to the other party upon a failure of the other
party to observe, keep or perform any of the material covenants, terms or
conditions herein if such default continues for sixty (60) days after written
notice by the other party.
12.3 CONSEQUENCES. In the event of termination of this Agreement, the
licenses granted hereunder are irrevocable and shall continue in perpetuity, it
being agreed that the parties' sole remedy, if any, for any breach of this
Agreement shall be an action for damages. The Following paragraphs shall also
survive any termination of this Agreement: 1 ("Definitions"), 9 (Representations
and Warranties"), 10 ("Disclaimer"), 11 ("Limitation of Liability"), 12.3
("Consequences") and 13 ("General"). Notwithstanding the foregoing, the *
Software License, including without limitation all rights and licenses to the *
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
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Software, shall terminate in the event of any termination caused by Infodata's
failure to observe, keep or perform its obligations to restrict access to the
Source Code of the * Software and otherwise protect its confidentiality as set
forth in PARAGRAPH 3.6.1 (" * Software Source Code License").
13. GENERAL.
13.1 NO AGENCY. Each party will perform its obligations as an
independent contractor and will be solely responsible for its own financial
obligations. This Agreement will not create a joint venture, partnership, or
principal and agent relationship between the parties. Neither party will have
the authority or will represent that it has the authority to assume or create
any obligation, express or implied, on behalf of the other, except as expressly
provided herein.
13.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without giving effect to
principles of conflict of law, and the parties agree that the law of no other
jurisdiction shall govern or be used to construe or interpret this Agreement.
Any suit hereunder will be brought solely in the federal or state courts in the
Northern District of California and the parties hereby submit to the personal
jurisdiction hereof.
13.3 MODIFICATION. This Agreement may be modified or amended only by a
written agreement executed by an authorized representative of Adobe and
Infodata.
13.4 INVALID PROVISIONS. In the event that any provision of this
Agreement shall be unenforceable or invalid under any applicable law or be so
held by applicable court decision, such unenforceability or invalidity shall not
render this Agreement unenforceable or invalid as a whole, and, in such event,
such provision shall be changed and interpreted so as to best accomplish the
objectives of such unenforceable or invalid provision within the limits of
applicable law or applicable court decisions.
13.5 NO ASSIGNMENT. No party shall have the right to assign or
otherwise transfer its rights and obligations under this Agreement without the
prior written consent of the other parties which consent shall not unreasonably
be withheld. Any assignment prohibited hereunder shall be null and void and
shall constitute a material breach of this Agreement. All rights and obligations
under this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the parties.
13.6 EXPORT. The parties agree not to export, directly or indirectly,
any U.S. source technical data acquired from the other party or any products
utilizing such data to countries outside the United States, if such export is in
violation of the United States export laws or regulations.
- --------
* Material omitted pursuant to a request for confidential treatment. The
omitted material has been separately filed with the Commission.
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<PAGE>
13.7 BANKRUPTCY. All rights and licenses granted under or pursuant to
this Agreement by Infodata to Adobe or by Adobe to Infodata, as the case may be,
are, and shall otherwise be deemed to be, for purposes of Paragraph 365(n) of
Title 11, U.S. Code (the "Bankruptcy Code"), licenses and rights to
"intellectual property" as defined under Paragraph 101(60) of the Bankruptcy
Code. The parties agree that Adobe and Infodata, each as licensee of such rights
under this Agreement, shall retain and may fully exercise all of its rights and
elections under the Bankruptcy Code.
13.8 NOTICE. All notices or reports permitted or required under this
Agreement shall be in writing and shall be delivered by personal delivery,
telegram, telex, telecopier, facsimile transmission, or by certified or
registered mail, return receipt requested, and shall be deemed given upon
personal delivery, five (5) days after deposit in the mail, or upon
acknowledgment of receipt of electronic transmission. Notices shall be sent to
the signatory of this Agreement at the address set forth below or such other
address as either party may specify in writing. If the notice is to Adobe, a
copy shall also be sent to the attention of its General Counsel. If the notice
is to Infodata, a copy shall also be sent to the attention of Curtis Carlson at
Infodata.
To Adobe: Adobe Systems Incorporated
345 Park Avenue
San Jose, California 95110-2704
Facsimile: (408) 537-4060
Attention: George Cacioppo
To Infodata: Infodata Systems Inc.
12150 Monument Drive, Suite 400
Fairfax, Virginia 22033
Facsimile: (703) 934-7154
13.9 PUBLIC ANNOUNCEMENTS. Neither Adobe nor Infodata will make any
public announcement concerning this Agreement or the matters set forth herein
(other than to employees, shareholders or other parties with a need to know or
as required by SEC disclosure rules) without the consent of the other party;
provided, however, that in the event that Infodata is required by law to make a
public announcement concerning the matters set forth in this Agreement, Infodata
shall make the draft of such announcement available to Adobe prior to its
release with sufficient time for Adobe to comment on the draft and Infodata
shall make reasonable efforts to incorporate such comments in the draft. Adobe
and Infodata agree to issue a mutually acceptable press release regarding this
Agreement at such time as Adobe shall determine.
13.10 NONDISCLOSURE; RETURN OF MATERIALS. Except where greater
restrictions on disclosure are provided for herein, any and all information,
correspondence, financial statements and records and other documents transmitted
or communicated by either party to the other party shall be governed by the
Master Agreement for Mutual Non-Disclosure of Information, dated April 4, 1996,
by and between Adobe and Infodata, a copy of which is attached hereto as EXHIBIT
D ("Master Agreement for Mutual Non-Disclosure of Information").
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<PAGE>
13.11 PARAGRAPH HEADINGS. Paragraph headings are inserted for
convenience only and will not be considered to define, limit or affect the
interpretation or construction of the Agreement.
13.12 WAIVER. All waivers must be in writing executed by both parties.
The failure of either party to insist upon strict performance of any provision
of this Agreement, or to exercise any right provided for herein, shall not be
deemed to be a waiver for the future of such provision or right, and no waiver
of any provision or right shall affect the right of the waiving party to enforce
any other provision or fight herein.
13.13 ATTORNEYS' FEES. In the event of any dispute between the parties
hereto, the prevailing party shall be entitled to recover its costs, including
expert witness fees and reasonable attorneys' fees therein.
13.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
13.15 ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement between the parties hereto and supersedes any and all other prior or
contemporaneous agreements, whether written or oral, between the parties
relating to the same subject matter, except as may be subsequently provided in
writing and agreed upon by the parties.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by their respective representatives, duly authorized.
ADOBE SYSTEMS INCORPORATED INFODATA SYSTEMS, INC.
By: /s/ George A. Caciuppo, Jr. By: /s/ Richard M. Tworek
-------------------------------- ----------------------------
Print Name: George A. Caciuppo, Jr. Print Name: Richard M. Tworek
------------------------ --------------------
Title: Vice President Title: Executive Vice President
----------------------------- -------------------------
Date: 12/3/97 Date: 12/12/97
------------------------------ -------------------------
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