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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 30, 1998
MICROGRAFX, INC.
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(Exact name of registrant as specified in its charter)
TEXAS 0-18708 75-1952080
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(State of other (Commission File (IRS Employer
jurisdiction incorporation) Number) Identification No.)
1303 E. ARAPAHO ROAD, RICHARDSON, TEXAS 75081
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 234-1769
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(NOT APPLICABLE)
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 30, 1998, Micrografx, Inc (the "Company") granted to Cendant Software
Corporation ("Cendant") a nonexclusive, irrevocable, perpetual, worldwide right
and license to (a) a series of Personal Creativity graphics technologies, (b)
information relating to the customers who have purchased products based on the
aforementioned technologies, (c) marketing information related to those
products, and (d) all associated intellectual property rights. The Company
retains ownership of all items licensed to Cendant but the Company has agreed
not to compete with Cendant's products other than products marketed to business
users.
The Company will receive approximately $16.5 million in cash. The proceeds are
characterized as licensing revenue, the recognition of which began in the
fourth quarter of fiscal year 1998 ending June 30, and which will continue
throughout the 1999 fiscal year. However, the earnings that result for the same
periods will be impacted by the costs of transition and support that
accompanies this relationship. The measure of those costs has not yet been
determined.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
The following documents are filed as exhibits to this report. The exhibit
numbers in the exhibit list correspond to the numbers assigned to such
exhibits in the Exhibit Table of Item 601 of Regulation S-K. Portions of
the exhibits, marked by "*", have been omitted pursuant to a request for
confidential treatment and have been filed separately with the Securities
and Exchange Commission.
10.1 License Agreement between Micrografx, Inc. and Cendant
Software Corporation
10.2 Noncompetition Agreement between Micrografx, Inc. and Cendant
Software Corporation
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MICROGRAFX, INC.
(Registrant)
Date: July 15, 1998
By: /s/ Darryl R. Halbert
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Darryl R. Halbert, Chief Accounting
Officer
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INDEX TO EXHIBITS
Exhibit No. Description
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10.1 * License Agreement between Micrografx, Inc. and Cendant Software
Corporation
10.2 * Noncompetition Agreement between Micrografx, Inc. and Cendant
Software Corporation
* Portions of these exhibits have been omitted pursuant to a request for
confidential treatment.
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EXHIBIT 10.1
LICENSE AGREEMENT
This License Agreement (the "Agreement"), dated as of June 28, 1998, is made by
and between Micrografx Inc., a Texas corporation having offices at 1303 E.
Arapaho Road, Richardson, TX 75081 (along with its present and future
Affiliates, collectively, "Micrografx"), and Cendant Software Corporation, a
Delaware corporation, doing business through its subsidiary Sierra On-Line,
Inc., having offices at 3380 146th Place SE, Suite 300, Bellevue, WA 98007
(along with its present and future Affiliates, collectively, "Cendant").
Cendant and Micrografx are sometimes referred to collectively herein as the
"Parties" and individually as a "Party".
RECITALS
WHEREAS, Micrografx is the developer and publisher of, among other products,
certain computer software products and other items; and
WHEREAS, Cendant wishes to acquire, and Micrografx wishes to grant Cendant,
certain license and other rights, upon the terms and conditions set forth
below.
AGREEMENT
NOW, THEREFORE, the Parties agree as follows:
SECTION 1. DEFINITIONS; INTERPRETATION
1.1 DEFINITIONS. Whenever used in this Agreement, the following terms
shall have the following specified meanings:
"AFFILIATE" means, with respect to any Person, a Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person. For purposes of this definition,
the term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"BANKRUPTCY" means, with respect to a Party, the occurrence of any of the
following: (i) the filing of a voluntary petition for relief under the U.S.
Bankruptcy Code or an admission by such Party in a filing in a court of law or
other tribunal of such Party's inability to pay its debts as they become due;
(ii) the making by such Party of a general assignment for the benefit of
creditors; (iii) in the case of the filing of an involuntary petition in
bankruptcy against such Party, the filing of an answer admitting the material
allegations thereof or consenting to the entry of an order for relief, or a
default in answering the petition; (iv) the entry of an order for relief under
the U.S. Bankruptcy Code against such Party; or (v) the entry of an order,
judgment or decree of any court adjudicating such Party bankrupt or appointing
a trustee or receiver for such Party's assets.
"BUSINESS ENTERPRISE PRODUCT" means any computer software product marketed
primarily to business users.
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* Denotes the omission of information pursuant to the request for
confidential treatment. The complete contract has been filed separately
with the Securities and Exchange Commission.
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"CLOSING DATE" means June 28, 1998.
*
"CONFIDENTIAL INFORMATION" means: (i) Technical Information; (ii) business
information of a Party, including but not limited to any information relating
to a Party's product plans, product designs, product costs, product prices,
product names, finances, marketing plans, business opportunities, personnel,
research, development or know-how; and (iii) any information designated by any
party as "confidential" or "proprietary" or which, under the circumstances
taken as a whole, would reasonably be deemed to be confidential; and (iv) the
terms and conditions of this Agreement. "Confidential Information" does not
include any information that: (a) was in or entered the public domain through
no wrongful act of the receiving Party; (b) was rightfully received by the
receiving Party from a Third Party who is not bound by a restriction of
nondisclosure; (c) was already in the disclosing Party's possession without
restriction as to disclosure; or (d) was developed by the receiving Party
independently and without reference to any Confidential Information of the
other Party as can be shown by written records.
*
"CONTENT" means, with respect to any computer software product, all creative
content (including all artwork, templates, graphics, cards, sentiments,
copyrighted expressions in screens or interfaces, audio, visual, audiovisual
and multimedia works, sounds, text and expressions), used, included or embodied
therein and ordinarily perceptible to users thereof. "Content" does not
include any Technology or Indicia.
"COPYRIGHTS" means all copyright rights, neighboring and derivative rights and
all other similar or related rights, whether statutory or arising under common
law, and all right, title and interest in all copyrights, copyright
registrations, and certificates of copyright, including any extension and
renewals of any of the foregoing, whether arising under the laws of the United
States or any other country or jurisdiction.
"DERIVATIVE WORK" means a work that is based upon one or more preexisting
works, such as a revision, modification, adaptation, translation, abridgment,
condensation, expansion, or any other form in which such preexisting works may
be recast, transformed or adapted and that if prepared without the
authorization of the owner of the preexisting work would constitute copyright
infringement or other infringement of the IPR of the owner therein.
"DEVELOP" (or such conjugation thereof as the context may require) means
design, engineer, prepare or develop (or such conjugation thereof as the
context may require).
"DISTRIBUTE" (or such conjugation thereof as the context may require) means
sell, license, transfer or otherwise directly or indirectly distribute (or such
conjugation thereof as the context may require).
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*
"DOCUMENTATION" means manuals, user guides and other documentation that relate
to and/or describe any or all of Micrografx Properties, whether in written,
graphical, human-readable or machine-readable form and in any medium (including
any and all documentation related to the Making, Use, or Development of any
Micrografx Programs and any and all documentation relating to end-user
technical support for any Micrografx Programs).
"EXPLOIT" (or such conjugation thereof as the context may require) means to
Make, have Made, Develop, Distribute, Make Derivatives of, Use and otherwise
exploit commercially or noncommercially (and conjugations thereof as required
by the context).
"GOVERNMENTAL AUTHORITY" means any means any national, regional or foreign
government; international authority (including, in each case, any fiscal, tax
or monetary authority), the government of any state, province, county,
municipality or other political subdivision thereof, any governmental body,
agency, authority, division, department, board or commission or any
instrumentality or official acting in an official capacity of any of the
foregoing, including any court, tribunal or committee exercising any executive,
legislative, judicial, regulatory or administrative functions of government.
"IPR" means any Copyright, Patent, Trademark, rights in and to Know-How, moral
right or other intellectual property or proprietary right of any kind, whether
arising under the laws of the United States or any other nation, state or
jurisdiction (including, but not limited to, any foreign equivalents thereto).
"INDICIA" means any and all items (including trademarks, service marks, trade
dress, trade names and other names (including corporate names, company names,
business names and fictitious business names), logos, insignia, designs, trade
styles and other source or business identifiers), in all languages, which are
embodied or depicted in any manner or form, and which are subject to any
Trademark rights.
"KNOW-HOW" means all trade secrets, know-how and nonpublic information which
relates to research, development, trade secrets, know-how, inventions, source
codes, technical data, software programming, concepts, designs, procedures,
manufacturing, purchasing, accounting, engineering, marketing, merchandising,
selling, business plans or strategies and other proprietary or confidential
information, protectable under the laws of the United States or any other
jurisdiction or country.
"LAW" means any statute, decree, constitution, regulation, decision, finding,
ruling, order, rule, code, writ, decree, injunction, mandate, ordinance,
judgment or directive of any Governmental
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Authority, or any treaty, pact, compact or other agreement to which any
Governmental Authority is a signatory or Party, and includes any legislative,
judicial or administrative interpretation or application of any of the
foregoing, including any guideline, guidance, directive, interpretation, rule
or regulation of any Governmental Authority having the force of law (or, if not
having the force of law, with respect to which compliance is customary) and is
in reference to any of the foregoing as amended, substituted, reissued or
reenacted.
"MAKE" (or such conjugation thereof as the context may require) means
manufacture, assemble, produce, reproduce or make or have made (or such
conjugation thereof as the context may require).
"MICROGRAFX INDICIA" means, collectively, all Specified Micrografx Indicia,
Other Micrografx Indicia and Third Party Indicia.
"MARKETING INFORMATION" means, collectively, all plans, strategies, data,
research, film, sales materials and other information and items collected,
compiled or Developed by Micrografx relating to the promotion, marketing or
Distribution of the computer software products specified in paragraph (a) of
the definition of "Micrografx Programs".
"MICROGRAFX PROGRAMS" means, collectively, the following in source and object
code form: (a) * (but specifically excluding all Content including Content
delivered by American Greetings Corporation or its Affiliates), the Technology *
(but specifically excluding all Content belonging to Binney & Smith and Hallmark
which is directly related to the products listed above), * (working title)
computer software products for all platforms, media and languages and any and
all other computer software products planned for Development or in Development
by Micrografx other than Business Enterprise Products; (b) all computer software
and associated IPR used, included or embodied in any products of Micrografx to
provide locking and unlocking capabilities (e.g., user access codes, automatic
shutdown features, and similar devices); (c) computer software and associated
IPR * (a) through (c) above ; (e) all * used in connection with the Development
or Making of any of the foregoing (including the "Rapid Development" tool); and
(f) any Updates of any of the foregoing.
"MICROGRAFX PROPERTIES" means, collectively, the Micrografx Programs (including
all Content and Technology used, included or embodied in any of the Micrografx
Programs) and the Documentation. "Micrografx Properties" do not include any
Indicia.
"OBJECT CODE" means Source Code that has been compiled or otherwise transformed
into machine-executable binary form.
"OTHER MICROGRAFX INDICIA" means, collectively, all Indicia associated with the
Micrografx Properties other than the Specified Micrografx Indicia and the Third
Party Indicia.
"PATENT" means all patent rights (pending or issued) and all right, title and
interest in all patent or equivalent rights and applications for patent or
rights, and any extensions, reissues, divisions,
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continuations, continuations-in-part, applications, re-examinations, reissues
or equivalents thereof, whether arising under the Laws of the United States or
any other country or jurisdiction.
"PERSON" means any individual, corporation, partnership, limited liability
company, trust, association or other entity or organization, including any
Governmental Authority.
"REVISION" means, with respect to a product, any revision, update, sequel,
modification, Derivative Work and/or other enhancement (whether or not based on
the Micrografx Properties and whether or not marketed with any of the
Micrografx Indicia).
"SOCIAL EXPRESSION PRODUCT" means a combination of art and verse designed to
convey sentiment regarding an array of human interaction and emotion, in both
printed and electronically delivered format, post cards, invitations,
announcements, awards and certificates.
"SOURCE CODE" means computer software source code in human readable documentary
and electronic forms together with all schematics, notes and proprietary tools
necessary for an ordinarily skilled programmer to adapt, compile, create
derivative works of, enhance, modify and maintain and otherwise deal with the
applicable computer software.
"SPECIFIED MICROGRAFX INDICIA" means the following Micrografx Indicia:
"Snapshot".
"SUBLICENSE" means the sublicensing, grant or other authorization to a Third
Party to Exploit any or all of the rights granted under a license.
"TECHNOLOGY" means, with respect to any computer software product, all Source
Code, Object Code, HTML code and other codes, designs, formulas, algorithms,
methods, processes, procedures, ideas, concepts, inventions, discoveries,
technologies, tools, materials and devices used, included or incorporated
therein. "Technology" does not include any Indicia.
"TECHNICAL INFORMATION" includes all technical information, documentation,
binaries, libraries and source code, of the applicable Party.
"THIRD PARTY" means any Person that is not a Party or an Affiliate of a Party.
"THIRD PARTY TECHNOLOGY" means those items of Technology used in the Micrografx
Programs and specified on Exhibit A.
"THIRD PARTY CONTENT" means the artwork, templates, graphics, cards,
sentiments, and copyrighted expressions in screens or interfaces used in the
Micrografx Programs and specified on Exhibit A.
"THIRD PARTY CONTRACTS" is defined in Section 7.1(m).
"THIRD PARTY INDICIA" means those Indicia, the rights to which are owned by a
Third Party, used in the Micrografx Programs and specified on schedule 7.1(m).
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"TRADEMARKS" means all common law or registered trademark, service mark, trade
name and trade dress rights and similar or related rights arising under any of
the Laws of the United States or any other country or jurisdiction, whether now
existing or hereafter adopted or acquired.
"UPDATE" means any adaptation, change, correction, enhancement, modification,
translation or Derivative Work of any of Micrografx Programs which, in each
case, is Developed or Made by or for Micrografx and provided to Cendant
pursuant to Section 3.2 or Section 3.4.
"USE" (or such conjugation thereof as the context may require) means display,
perform, copy, use or reduce to practice (or such conjugation thereof as the
context may require).
"USER INFORMATION" means all information in Micrografx's possession or control
relating to Persons purchasing any of the computer software products specified
in paragraph (a) of the definition of "Micrografx Programs" and all prequels to
such products (including any names, contact information, product registration
information, analyses of purchasing patterns and similar data).
"WEB SITE" means, with respect to either Party, collectively, all points of
presence and/or services maintained by such Party on the Internet (including
the World Wide Web) or on any successor public data network.
1.2 INTERPRETATION
1.2.1 Reference to a given section, subsection, schedule or
exhibit is a reference to a section, subsection, schedule or exhibit of this
Agreement, unless otherwise specified. The terms "hereof," "herein," "hereto,"
"hereunder" and "herewith" refer to this Agreement as a whole.
1.2.2 Except where otherwise expressly provided or unless
the context otherwise necessarily requires: (i) references to a given Law or
rule are references to that Law or rule as amended or modified as of the date
on which the reference is made, (ii) reference to a given agreement or
instrument is a reference to that agreement or instrument as originally
executed, and as modified, amended, supplemented and restated through the date
as of which reference is made to that agreement or instrument, and (iii)
accounting terms have the meanings given to them by U.S. GAAP applied on a
consistent basis by the accounting entity to which they refer.
1.2.3 The singular includes the plural and the masculine
includes the feminine and neuter, and vice versa. "Includes" or "including"
means "including, without limitation."
1.2.4 Headings set forth in this Agreement are used for
convenience only and are not to be considered in construing or interpreting
this Agreement.
SECTION 2. LICENSES AND ASSIGNMENTS
2.1 LICENSE GRANT. Subject to the terms and conditions of this Agreement,
Micrografx hereby grants to Cendant: a nonexclusive, irrevocable (once the
final payment has been made to Micrografx under Section 6.1), perpetual,
world-wide right and license to directly and
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indirectly Exploit: (a) * (b) the User Information; (c) the Marketing
Information, owned or sublicensable by Micrografx; and (d) all IPR associated
with any of the foregoing (including the IPR specified on Exhibit D), owned or
sublicensable by Micrografx; and the right to Sublicense all or any portion of
the foregoing rights to Third Parties, subject to the limitations on such
Exploitation set forth in this Agreement.
2.2 TRADEMARKS AND INDICIA
Subject to the terms and conditions of this
Agreement, Micrografx hereby grants to Cendant a
non-exclusive, irrevocable (once the final payment
has been made to Micrografx under Section 6.1),
worldwide right and license to: (a) Make, Use and
Distribute the Other Micrografx Indicia in connection
with Cendant's exercise of its rights under Section
2.1 (including in connection with the marketing and
promotion of any computer software products based
upon the Micrografx Properties); (b) Make, Use and
Distribute under sublicense any Third Party Indicia
used, included or embodied in the Object Code version
* computer software products in connection with the
exercise of Cendant's rights under Section 2.1(b)
(including in connection with the marketing and
promotion of such computer software products). At
Cendant's option, during the period following the
Closing Date. Cendant shall have the right to Use
the "Micrografx" name and Logo in branding its
computer software products arising from the
Micrografx properties on the following basis: (I) the
right to Use such Indicia will be * chosen for the
next product release; and (ii) on succeeding product
releases, Cendant shall have the right to Use the
Micrografx Trademarks, * proper characterization as a
distribution arrangement. Thereafter, Cendant shall
continue to have the right to Use the "Micrografx"
name and logo under this Section * (i.e., so that the
applicable product is *).
2.2.2 Micrografx hereby assigns, and agrees to assign, to
Cendant, all right, title and interest in and to the
Specified Micrografx Indicia and all goodwill
associated therewith, along with all IPR solely and
exclusively associated with any of the foregoing;
and, without limitation of the foregoing, Micrografx
acknowledges and agrees that Cendant shall be
entitled to Exploit the Specified Micrografx Indicia
in any manner with no duty to account to Micrografx
for the same.
2.2.3 Cendant shall comply with such reasonable trademark
usage guidelines as Micrografx may timely notify
Cendant of in writing from time to time with respect
to Cendant's Use and Distribution of the Other
Micrografx Indicia and Third Party Indicia pursuant
to the license granted in Section 2.2.1 above. For
any use of the Other Micrografx Indicia or Third
Party Indicia that is different from a previously
approved use in more than an insubstantial way,
Cendant shall obtain Micrografx's prior approval,
which approval will not be unreasonably withheld or
delayed. Micrografx's failure to respond to any such
request within five (5) business days of its receipt
shall be deemed an approval.
2.3 LIMITATIONS. Notwithstanding any other provision of this Agreement,
Cendant shall not: (a) Exploit in any manner any of the Third Party Content;
(b) Make, Use or Distribute any Third Party Indicia except as expressly
permitted by Section 2.2.1(b); (c) Use any of the Micrografx
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Properties or Micrografx Indicia in connection with the Development, Making or
Distribution, directly or indirectly of any Business Enterprise Products; or
(d) use any Third Party Indicia in any manner not permitted by the express
written terms of any Third Party agreement concerning the same and provided to
Cendant in connection with it due diligence review. Nothing contained herein
shall constitute a conveyance, assignment or sublicense of any rights, title or
interest in and to any of the Third Party Content or Third Party Indicia except
to the extent Micrografx is permitted to convey such right, title or interest
pursuant to any of the Third Party Contracts.
2.4 ASSIGNMENT OR SUBLICENSE OF RIGHTS UNDER THIRD PARTY AGREEMENTS. Upon
request, Micrografx shall provide, at Cendant's expense, such reasonable
assistance (including participating in discussions with applicable Third
Parties, and execution of affidavits and other documents) to sublicense (and if
permissible, assign and delegate) to Cendant all of Micrografx's rights,
obligations and interests in and under the Third Party Technology and/or Third
Party Content agreements set forth in Schedule 2.4.
2.5 OWNERSHIP. Cendant acknowledges that as between the Parties, except
for the license rights granted to Cendant hereunder, Micrografx or its
licensors are and shall remain the owner of all right, title and interest in
and to the Micrografx Properties, the Other Micrografx Indicia and the Third
Party Indicia and the associated IPR, and no ownership interest therein is
hereby transferred to Cendant. Micrografx acknowledges that as between the
Parties, Cendant is and shall remain the owner of all right, title and interest
in and to the Specified Micrografx Indicia and any Derivative Works of any
Micrografx Properties Developed or Made by or for Cendant and the associated
IPR is owned by Cendant, and no ownership interest therein is hereby
transferred to Micrografx.
2.6 INTELLECTUAL PROPERTY NOTICES. Cendant will include in any computer
software products or other items that are Made or Distributed by Cendant and
that use, incorporate or embody any Micrografx Properties, Other Micrografx
Indicia or Third Party Indicia such notices, legends and credits as the Parties
may agree upon from time to time in writing relating to Micrografx's or its
licensors' ownership of the IPR associated therewith. Such notices, legends
and credits shall, as applicable, be substantially similar to the presently
existing notices, legends and credits. Micrografx acknowledges that Cendant
may, at its discretion, include in such products and items such other notices,
legends and credits as Cendant may deem appropriate.
2.7 * DISTRIBUTION. At Cendant's option, Cendant may, instead of
publishing the * upon substantially the same terms and conditions as the *
distribution arrangement, * (and no other consideration or payment obligation
concerning such distribution).
2.8 PROHIBITION. *
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SECTION 3. DELIVERABLES AND DEVELOPMENT
3.1 INITIAL DELIVERY. Upon execution of this Agreement, Micrografx will *
3.2 FURTHER DEVELOPMENT. Following the execution of this Agreement,
Micrografx shall * and/or Completed Technology along with related Documentation,
in accordance with the specifications and schedules set forth in Exhibit C. At
regular intervals during the Development and Making of the Distributable
Products and Completed Technology, Micrografx shall * to Cendant in their
then-existing state for Cendant's review and approval or disapproval (provided,
that Cendant shall only be entitled * if Cendant reasonably determines that they
fail to conform in any more than an insubstantial respect to the specifications
therefor set forth in Exhibit C). In the event that Cendant disapproves of all
or any portion of such *, Cendant will provide Micrografx with written comments
specifying in reasonable detail Cendant's concerns and objections, and
Micrografx will promptly revise such * to address such concerns and objections
and deliver the revised Distributable Products and Completed Technology to
Cendant for review and approval or disapproval as provided above. If Micrografx
fails to timely deliver * Promptly following Cendant's final approval thereof,
Micrografx shall *, upon such media as Cendant may reasonably request.
3.3 SOURCE CODE. Micrografx shall ensure that * delivered to Cendant
pursuant to Section 3.1 and Section 3.2 *, completeness and accuracy) to permit
reasonably Cendant's * in the manner contemplated by this Agreement. If Cendant
notifies Micrografx that the requirements of the preceding sentence have not
been met, then Micrografx will promptly correct and deliver the applicable
corrected Source Code to Cendant.
3.4 UPDATES, MAINTENANCE AND SUPPORT. For the first sixty (60) days after
first commercial shipment of any Distributable Product, Micrografx shall
perform the services specified on Exhibit B with respect to the maintenance and
support of the Distributable Products and Completed Technology and the
provision of Updates to Cendant.
3.5 INTENTIONALLY LEFT BLANK.
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3.6 TRANSITION PLAN.
3.6.1 For a period of six (6) months after the Closing
Date, Micrografx shall make available to Cendant at Micrografx's premises, a
transition team of qualified and experienced Micrografx employees on a
reasonable and as needed basis to assist Cendant with its understanding and
Exploitation of the Micrografx Properties and other items licensed or assigned
to Cendant hereunder. The composition and duties of such transition team, as
well as the maximum hours of assistance to be provided, shall be as set forth
in the Transition Plan attached as Exhibit E. Cendant acknowledges that the
transition team will be performing other duties for Micrografx.
3.6.2 Each party agrees that without the prior written
consent of the other Party, such Party will not, for a period of * from the
Closing Date, solicit or cause to be solicited the employment of any person who
is employed by the other party at the Closing Date.
SECTION 4. NONCOMPETITION
For a period of * Micrografx shall not (whether directly or indirectly
(including for or through any Affiliate or Third Party)), *. Nothing herein
contained shall limit Micrografx from Exploiting any of the Micrografx
Properties (including without limitation, software development tools and
component functionality) in any manner *. The Parties acknowledge and agree,
by way of example, and not by limitation, that presently: (a) *, whether
voluntarily or by operation of law (e.g., by merger, *.
SECTION 5. INTENTIONALLY LEFT BLANK
SECTION 6. CONSIDERATION
6.1 LICENSE AND DEVELOPMENT FEE. In consideration of Micrografx's
performance of its obligations hereunder: (a) On or before 2:00 Central Time on
June 30, 1998, Cendant shall pay Micrografx via completed wire *.
6.2 THIRD PARTY ROYALTIES. With respect to the sublicenses to Cendant of
rights to any Third Party Technology or Third Party Content under any agreement
with any Third Party, which agreement(s) is not assigned to Cendant *, Cendant
agrees to pay any royalties or other sums payable by Micrografx under the *.
6.3 CERTAIN DEVELOPMENT COSTS. With respect to *, Cendant shall reimburse
Micrografx on a "time and materials" basis at the rates set forth on Schedule
6.3 in connection with the Development of French and German localized versions
thereof pursuant to Section 3.2. Micrografx shall be responsible for the
management and administration of all agreements and relationships with Third
Parties involved in the Development of such foreign language localized
versions.
6.4 TAXES. Each Party will be responsible for all taxes, duties, imposts
and similar liabilities imposed upon such Party in the first instance by any
Governmental Authority and arising out of or in connection with this Agreement
or the transactions contemplated hereby.
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6.5 PAYMENT IN FULL. Payment of the amounts specified in this Section 6
will constitute the full and entire compensation due to Micrografx for the
license and other rights granted to Cendant under this Agreement and for
performance of Micrografx's obligations under this Agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 OF MICROGRAFX. Micrografx represents, warrants and (in the case of
paragraphs (a), (b), (c), (d), (g), (k), and (o) below) covenants that:
(a) the Micrografx Properties, Specified Micrografx
Indicia, and Other Micrografx Indicia, and Cendant's Exploitation of
any of the foregoing as permitted by this Agreement, do not and will
not violate, misappropriate or infringe upon any IPR of any Third
Party in the United States, Canada, Australia, and each and every
country of the European Union; provided, however, that Micrografx
provides no representation, warranty or covenant that the name * on
its own is a protectable or noninfringing tradename or trademark.
(b) to the best of Micrografx's knowledge (without
independent investigation or review) the Micrografx Properties,
Specified Micrografx Indicia, and Other Micrografx Indicia (excluding
the mark *), and Cendant's Exploitation of any of the foregoing as
permitted by this Agreement, do not and will not violate,
misappropriate or infringe upon any IPR of any Third Party in Japan.
(c) Micrografx owns and will own all right, title and
interest in and to all the Micrografx Properties and Micrografx
Indicia (other than the Third Party Content, Third Party Indicia and
Third Party Technology) and all IPR associated therewith;
(d) *
(e) *
(f) *
(g) *
(h) *
(i) Micrografx is a corporation duly organized and
validly existing under the Laws of the State of Texas;
(j) Micrografx has the necessary power and authority to
enter into and perform its obligations under this Agreement and has
properly authorized the same by all requisite action, and this
Agreement is valid, binding and enforceable against Micrografx;
(k) Micrografx will comply with all applicable Laws in
the performance of its obligations and exercise of its rights under
this Agreement (including applicable export control Laws);
<PAGE> 12
(l) *
(m) Schedule 7.1(m) sets forth a complete and correct
list of all material Third Party contracts under which Micrografx
obtains rights to use any Third Party Technology or Third Party
Indicia or under which Micrografx grants any Third Party any right to
use in any manner any Micrografx Properties or Micrografx Indicia,
including distribution agreements and OEM agreements (collectively,
the "Third Party Contracts"). Except as expressly set forth in
Schedule 7.1(m): *
(n) the schedules and exhibits hereto set forth a
complete and correct list of all Third Party Technology and Third
Party Indicia used in any manner in any of the Micrografx Programs;
(o) *
Except as expressly set forth in the exhibits and schedules
to this Agreement, knowledge gained by Cendant in connection with its
due diligence review shall in no way relieve or impair the strength
of, or obligations under, the representations, warranties and
covenants of Micrografx under this Agreement.
7.2 OF CENDANT. Cendant represents, warrants and (in the case of
paragraphs (a), (d) and (g) below) covenants that:
(a) any Derivative Works of any of the Micrografx
Properties Developed or Made by or for Cendant (excluding Development
work completed by Micrografx hereunder) do not and will not violate,
misappropriate or infringe upon the IPR of any Third Party (except to
the extent that such violation, misappropriation or infringement is
present or exists in, or would exist in connection with any
Exploitation of, any of the Micrografx Properties in unaltered form);
(b) the execution, delivery and performance of this
Agreement by Cendant will not result in breach of or default under any
agreement with any Third Party by which Cendant is bound;
(c) no action, suit, investigation or proceeding has been
instituted or threatened against Cendant or any judgment, writ, order,
injunction or decree of any Governmental Authority issued against
Cendant, to restrain or prohibit or otherwise challenge the legality
or validity of the transactions contemplated hereby, nor, to Cendant's
best knowledge after due inquiry, is there any basis for the same; and
(d) Cendant shall not enter into any agreement, the
execution, delivery or performance of which would violate, breach or
contravene this Agreement.
(e) Cendant is a corporation duly organized and validly
existing under the Laws of the State of Delaware.
(f) Cendant has the necessary power and authority to
enter into and perform its obligations under this Agreement and has
properly authorized the same by all requisite action, and this
Agreement is valid, binding and enforceable against Cendant;
<PAGE> 13
(g) Cendant will comply with all applicable Laws in the
performance of its obligations and exercise of its rights under this
Agreement (including applicable export control Laws);
7.3 INFRINGEMENT REMEDY. If Cendant is prevented (by temporary or
permanent injunction or other means) from exercising any of its rights under
this Agreement as a result of any claim that any of the items licensed or
assigned to Cendant hereunder violate, misappropriate or infringe any IPR of
any Third Party (except for any such claim to the extent the same comes within
the provisions of Section 8.3 below), Micrografx will immediately, at its
option and expense, either: (a) procure for Cendant the right to continue using
the affected items; or (b) modify or replace the affected items so there is no
infringement, misappropriation or violation, without any adverse impact on the
functionality or quality of the affected item. Micrografx will, in any event,
indemnify, defend and hold Cendant harmless from and against any and all
claims, costs, judgments, damages and expenses (including reasonable attorneys'
fees) arising out of or related to any such alleged or actual third party claim
of infringement.
7.4 INFRINGEMENT BY OTHERS
Each Party will promptly notify the other if and when a Party becomes aware of
any violation, infringement or misappropriation of the Micrografx Properties or
Micrografx Indicia Used in any Cendant product (the "Infringed Properties") by
any Third Party. Cendant shall have full power and authority to institute any
suits or actions for infringement of any IPR under license to it under this
Agreement. If Cendant takes any such action, Micrografx shall reasonably
cooperate in such action at Cendant's request and expense. If Cendant does not
request Micrografx's assistance, Micrografx may, at its option, participate in
such action on its behalf and at its own expense. In the event that Cendant,
after sixty (60) days' notice of an infringement, fails to bring suit or action
against the infringer, then Micrografx shall have the right to bring the action
at its own expense. In the event of any such suit or action brought by Cendant
or Micrografx for infringement, any recovery (after reimbursement for expenses
incurred in such suit or action) shall be *.
SECTION 8. INDEMNIFICATION; LIMITATIONS OF LIABILITY
8.1 INDEMNIFICATION. * (a "Loss") which arise out of or in connection with
any breach or alleged breach of that Party's representations, warranties or
covenants set forth in Sections 7.1 or 7.2, respectively. The Party seeking
indemnification will promptly notify the indemnifying Party of any such claim
and cooperate with the indemnifying Party in such defense.
*
SECTION 9. BREACH; BANKRUPTCY
9.1 BREACH. Each Party shall have the right to seek injunctive and other
equitable relief and/or monetary damages if the other Party breaches this
Agreement and fails to cure such breach or cease the acts or omissions
constituting such breach within thirty (30) days after such Party has been
given written notice of such breach; provided, however, that notwithstanding
the foregoing, in no event shall Micrografx have, and Micrografx hereby
expressly and irrevocably waives and disclaims, any right or privilege it may
have (whether at law, equity or otherwise) to
<PAGE> 14
terminate this Agreement or Cendant's license or other rights granted
hereunder. Micrografx hereby acknowledges that its remedies for any breach by
Cendant are limited to the relief described in the first sentence of this
Section 9.1 and that such relief is an adequate remedy.
9.2 BANKRUPTCY. The Parties intend that all rights and licenses granted
to Cendant hereunder be "intellectual property" as defined in Section 101 of
the U.S. Bankruptcy Code or its successor statute (the "Code") and that Cendant
be entitled to retain and fully exercise all of such rights and licenses as
provided in the Code. In the event of the commencement of a bankruptcy
proceeding by or against Micrografx under the Code, Cendant shall be entitled
to a complete duplicate of the Source Code, Object Code and all other
embodiments of such intellectual property and the same, if not already in the
possession of Cendant, shall be promptly delivered to Cendant upon Cendant's
written request (i) upon any such commencement of a bankruptcy proceeding or,
if Micrografx elects continues to perform all of its obligations under this
Agreement, at such other time as provided elsewhere in this Agreement; or (ii)
if not delivered under (i) above, upon the rejection of this Agreement by or on
behalf of Micrografx. In the event this Agreement is rejected by or on behalf
of Micrografx, Cendant shall have no obligation to make any of the payments
specified in Sections 6.1(b)(ii) or 6.2, which pertain solely to Micrografx's
development and support obligations hereunder.
SECTION 10. CLOSING CONDITIONS
10.1 CENDANT CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement, Cendant shall have no
obligations under this Agreement unless and until the following conditions
precedent have been met, in each instance to the reasonable satisfaction of
Cendant, and Cendant has certified the same in writing to Micrografx, on or
prior to the Closing Date:
10.1.1 DELIVERY OF DOCUMENTS
Micrografx shall have delivered, or shall have caused
to be delivered, each of the following documents, instruments and agreements to
Cendant, each of which shall be duly completed, authorized, executed and
delivered by each of the Parties thereto, shall be in full force and effect,
and shall be in form and substance reasonably satisfactory to Cendant:
(a) A true and correct copy of the minutes of the Board
of Directors of Micrografx which authorizes execution of this
Agreement;
(b) A copy of each approval, consent, filing or
registration with any Governmental Authority, the filing or issuance
of which is necessary as of the Closing Date for the execution,
delivery and performance by Micrografx of this Agreement; and
(c) The executed Distribution Transaction documents.
10.1.2 ACCURACY OF REPRESENTATIONS AND WARRANTIES
All representations and warranties contained herein,
or otherwise made in any communication to any Cendant in connection herewith or
therewith, shall be true and accurate in all
<PAGE> 15
material respects with the same effect as though such representations and
warranties had been made on and as of the Closing Date.
10.1.3 NO BREACH
There shall not have been any breach by Micrografx in
the performance of any of its obligations, agreements and covenants contained
herein.
10.1.4 NO MATERIAL ADVERSE CHANGES
There shall have been no material adverse change in
Micrografx's business, properties, assets or financial condition.
10.1.5 CONSENTS AND APPROVALS
The Parties shall have received all approvals,
consents and actions of or by any and all Third Parties (including Governmental
Authorities) that are necessary to consummate the transactions contemplated
hereby as listed on any schedule or exhibit hereto, if any.
10.2 MICROGRAFX CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement, Micrografx shall have no
obligations under this Agreement unless and until the following conditions
precedent have been met, in each instance to the reasonable satisfaction of
Cendant, and Micrografx has certified the same in writing to Cendant, on or
prior to the Closing Date:
10.2.1 DELIVERY OF DOCUMENTS
Cendant shall have delivered, or shall have caused to
be delivered, each of the following documents, instruments and agreements to
Micrografx, each of which shall be duly completed, authorized, executed and
delivered by each of the Parties thereto, shall be in full force and effect,
and shall be in form and substance reasonably satisfactory to Micrografx:
(a) A true and correct copy of the minutes of the
Executive Committee of Cendant Corporation which authorizes execution and
delivery of this Agreement;
(b) A copy of each approval, consent, filing or
registration with any Governmental Authority, the filing or issuance
of which is necessary as of the Closing Date for the execution,
delivery and performance by Cendant of this Agreement; and
(c) The executed Distribution Transaction documents.
10.2.2 ACCURACY OF REPRESENTATIONS AND WARRANTIES
All representations and warranties contained herein,
or otherwise made in any communication to any Cendant in connection herewith or
therewith, shall be true and accurate in all material respects with the same
effect as though such representations and warranties had been made on and as of
the Closing Date.
<PAGE> 16
10.2.3 NO BREACH
There shall not have been any breach by Cendant in
the performance of any of its obligations, agreements and covenants contained
herein.
10.2.4 CONSENTS AND APPROVALS
The Parties shall have received all approvals,
consents and actions of or by any and all Third Parties (including Governmental
Authorities) that are necessary to consummate the transactions contemplated
hereby as listed on any schedule or exhibit hereto, if any.
SECTION 11. GENERAL PROVISIONS
11.1 CONFIDENTIALITY. Each Party will refrain from using the other Party's
Confidential Information except as contemplated in this Agreement and from
disclosing such Confidential Information to any Third Party except to employees
(or subcontractors), legal advisors, financial advisors and in the course of
due diligence as is reasonably required in connection with the exercise of its
rights and obligations under this Agreement (and only subject to binding use
and disclosure restrictions at least as protective as those set forth in this
Agreement executed in writing by such employees, subcontractors or other
parties). The Parties will each store and protect the other party's
Confidential Information from unauthorized access with due care. The foregoing
obligations of confidentiality shall not apply to any information which is
required to be disclosed by applicable Law (but only to the extent and for the
purpose of such required disclosure); provided, that in such event, the
receiving Party shall promptly notify the disclosing Party and cooperate as
requested by the disclosing Party to minimize the scope of such disclosure.
11.2 INDEPENDENT CONTRACTOR; NO PARTNERSHIP. Each Party is an independent
contractor and not the agent or partner of the other Party. This Agreement
shall not be interpreted or construed as creating any partnership among the
Parties or as imposing any partnership obligation or liability upon either
Party, and neither Party shall have, or represent itself to any Third Party as
having, any right, power or authority to enter into any obligations or incur
any liabilities on behalf of the other Party.
11.3 NONWAIVER. The failure of either Party to insist upon or enforce
strict performance of any of the provisions of this Agreement or to exercise
any rights or remedies under this Agreement shall not be construed as a waiver
or relinquishment to any extent of such Party's right to assert or rely upon
any such provisions, rights or remedies in that or any other instance; rather,
the same shall be and remain in full force and effect.
11.4 FURTHER ASSURANCES. Each Party duly and promptly shall execute and
deliver, or cause to be executed and delivered, to the other Party such further
instruments and documents, and do and cause such further acts, as the other
Party may request to carry out more effectually the provisions and purposes of
this Agreement (including making filings and registrations with Governmental
Authorities, executing affidavits, and doing and causing such other acts as may
be
<PAGE> 17
requested to effect, perfect or confirm such other Party's ownership and
license interests as set forth in Section 2).
11.5 SEVERABILITY. If any provision of this agreement is deemed unlawful,
void, or for any reason unenforceable, such provision shall be narrowed in
scope or otherwise amended to the extent necessary to make such provision
lawful, valid and enforceable while as nearly as possible reflecting the intent
of the Parties as expressed in this Agreement, or, if such amendment is
impossible, severed from this Agreement and if so severed, the Parties shall
negotiate in good faith any amendment to this Agreement necessary to reflect
the original intent of the Parties. No amendment or severing of any provision
of this Agreement shall affect the validity or enforceability of any remaining
provisions.
11.6 NOTICES. Unless otherwise provided, any notice required or permitted
under this Agreement will be given in writing and will be deemed effectively
given upon personal delivery to the Party to be notified, upon confirmed
receipt of telecopy or other electronic facsimile transmission, or upon deposit
with the United States Post Office, postage prepaid, registered or certified
with return receipt requested and addressed to the Party to be notified at the
address indicated for such Party below:
If to Cendant: Sierra On-Line, Inc.
3380 146th Place SE, Suite 300
Bellevue, WA 98007
Attn: General Counsel
Fax: (425) 649-0340
With a copy to: Perkins Coie LLP
411 108th Avenue Northeast
Suite 1800
Bellevue, WA 98004-5584
Attn: Bruce Dick, Esq.
Fax: (425) 453-7350
If to Micrografx: Micrografx, Inc.
1303 E. Arapaho Road
Richardson, TX 75081
Attn: General Counsel
Fax: (972) 994-6030
With a copy to: Jenkens & Gilchrist
1445 Ross Ave., Suite 3200
Dallas, TX 75202
Attn: Steve Leshin, Esq.
Fax: (214) 855-4300
Either Party may change its address specified in this Section by giving the
other Party notice of such change in accordance with this Section.
<PAGE> 18
11.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding on,
enforceable by, and inure to the benefit of, the successors and assigns of
Micrografx and Cendant; provided, however, neither Party shall have the right
to assign, delegate or otherwise transfer any of its obligations or duties
hereunder, whether voluntarily or by operation of law, without the prior
written consent of the other Party, except no such prior written consent shall
be required in connection with an assignment of the entire Agreement by a party
pursuant to a sale or other transfer of all or substantially all of a Party's
assets (in the case of Cendant, a sale or transfer of substantially all the
assets of the division in which the Micrografx Programs are Exploited) or a
merger or stock sale transaction in which control of a Party is transferred..
11.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute only one and the same instrument.
11.9 GOVERNING LAW. This Agreement will be interpreted, construed and
enforced in accordance with the laws of the State of New York.
11.10 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement, and
supersedes any and all prior agreements, between the Parties regarding the
subject matter hereof. No amendment of any provision of this Agreement shall
be effective unless set forth in a written instrument signed by both Parties.
11.11 AFFILIATES. Each Party shall remain obligated for the actions or
inaction of its Affiliates to ensure that no such action or inaction results in
a breach or default of any term or condition of this Agreement.
11.12 PRESS RELEASES. Except as may be required by law, neither party shall
issue, or permit to be issued, any press release or otherwise make any public
statement or disclosure to any third party regarding the financial or other
confidential and/or competitively sensitive terms of this Agreement without the
prior written consent of the other party. Micrografx shall provide to Cendant
for its prior review and comment any confidential treatment request considering
this Agreement to be filed with the Securities and Exchange Commission or other
third party (such as the NASDAQ). A joint press release disclosing the
parties' arrangements is attached to this Agreement as Exhibit G.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
<PAGE> 19
Micrografx: Cendant:
MICROGRAFX, INC. CENDANT SOFTWARE CORPORATION
By: /s/ Douglas Richard By: /s/ Chris McLeod
--------------------------- ---------------------------
Its CEO Its CEO
-------------------------- --------------------------
<PAGE> 20
EXHIBIT A
THIRD PARTY CONTENT, THIRD PARTY TECHNOLOGY AND THIRD
PARTY MARKS
1. The Third Party Content consists of the following items:
a. All cards, banners, certificates and the like, and all sentiments,
copyrighted expressions in screens and interfaces and other intellectual
property owned by American Greeting Corporation and delivered to Micrografx
(specifically excluding any ownership claim, if any, by American Greetings to
the Micrografx Programs).
b. All content owned by Hallmark Cards, Inc. or its subsidiary, Binney &
Smith Properties.
c. All Crayola owned copyrighted expressions in screens and interfaces
used in the "Crayola" computer software product.
2. The Third Party Indicia consist of the following Indicia associated
with the CreataCard product line or the Crayola product, which are the
properties of American Greetings Corporation, Hallmark Cards, Inc. or Binney &
Smith Properties, Inc.
American Greetings(R) CreataCard(R)
Personal CardShop
Forget Me Not
Forget Me Not(TM) Reminders
Add-A-Photo(TM) Cards
Personal Delivery
Find A Card
Picture Painter(TM)
Picture Painter(TM) 2
CreataCard(TM)
CreataCard(R) Gold(TM)
Cards & More
CreataCard(R) Gold(TM) 2
CreataCard(R) Plus(TM)
CreataCard(R) Plus(TM) 2
CreataCard Internet Edition
CreataCard(R) Special Edition(TM)
CreataCard(R) Online(TM)
<PAGE> 21
3. The Third Party Technology consists of the following
*
<PAGE> 22
EXHIBIT B
MAINTENANCE, SUPPORT AND UPDATES
* There will be no maintenance, support, or updates for the other products
licensed to Cendant. Engineering and Product Management assistance will be
provided in accordance with Exhibit E for a period ending six months after
contract signing.
<PAGE> 23
EXHIBIT C
DEVELOPMENT SPECIFICATIONS AND SCHEDULES
ALL CURRENTLY SHIPPING VERSIONS
Within 5 days of signing the Gold Masters, and associated object and source
code in the form available at Micrografx for the following products including
applicable localizations will be delivered:
*
Cendant acknowledges that the following products are not shipping, are
not complete, and will be acquired "as is" and will accelerate the formation
process:
*
* (MICROGRAFX INTERNAL PRODUCT SPECIFICATION ATTACHED)
The Program is version * and includes the following executable components:
*
The Program includes the following significant feature improvements or
additions (over the previous version, *):
*
System Requirements:
o Personal of Multimedia computer with a 486 or higher processor
o For best performance a Pentium or Pentium with MMX processor is recommended
o Microsoft Windows 95 operations system or Microsoft Windows NT 4.0 or higher
o For use on Windows 95; 8 MB of RAM required, 16 MB recommended
o CD-ROM drive
o High resolution Video (VGA or higher, minimum 256 color recommended)
o Mouse or other pointing device
Delivery Schedule:
*
Weekly after Initial Delivery
*
<PAGE> 24
EXHIBIT D
CERTAIN MICROGRAFX IPR
PATENTS
*
TRADEMARKS
Micrografx Micrografx(R)
Windows Draw(R)
PhotoMagic(R)
Instant 3D(TM)
Micrografx Snapshot(TM)
Micrografx Media Manager(TM)
Cool Shapes(TM)
<PAGE> 25
EXHIBIT E
TRANSITION PLAN
*
Cendant will have the right to propose a more aggressive transition schedule
subject to the approval of Micrografx, such approval not to be unreasonably
withheld. Both parties are entering into this transition agreement with an
understanding that a more aggressive schedule is likely, and that Cendant also
agrees that such *.
SALES AND CUSTOMER SUPPORT
*
<PAGE> 26
EXHIBIT F
*
<PAGE> 27
EXHIBIT G
JOINT PRESS RELEASE
[To be attached]
<PAGE> 28
SCHEDULE 2.4
THIRD PARTY TECHNOLOGY AGREEMENTS
*
<PAGE> 29
SCHEDULE 6.1
ALLOCATION OF CONSIDERATION
[TDB]
<PAGE> 30
SCHEDULE 6.3
MICROGRAFX RATE SCHEDULE
*
<PAGE> 31
Schedule 7.1(m)
Third Party Contracts
Suppliers for * and *
* (three pages omitted pursuant to the request for confidential treatment)
<PAGE> 32
Schedule 7.1 (m)
Third Party Contracts
Suppliers for *
*
<PAGE> 33
Schedule 7.1 (m)
Third Party Contracts
Claims
*
<PAGE> 1
EXHIBIT 10.2
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is entered into as of June 28,
1998 is made by and between Micrografx Inc., a Texas corporation having offices
at 1303 E. Arapaho Road, Richardson, TX 75081 (along with its present and
future Affiliates, collectively, "Micrografx"), and Cendant Software
Corporation, a Delaware corporation, doing business through its subsidiary
Sierra On-Line, Inc., having offices at 3380 146th Place SE, Suite 300,
Bellevue, WA 98007 (along with its present and future Affiliates, collectively,
"Cendant"). Cendant and Micrografx are sometimes referred to collectively
herein as the "Parties" and individually as a "Party".
RECITALS
A. Pursuant to that certain License Agreement (the "License Agreement")
dated as of June 28, 1998 between the Parties, Cendant is licensing certain
technology and associated intellectual property rights from Micrografx.
B. Cendant is unwilling to enter into the transaction unless Micrografx
agrees not to compete with Cendant as described herein.
AGREEMENT
NOW, THEREFORE, for and in consideration of the foregoing premises and other
good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, and in order to induce Cendant to enter into the License
Agreement, the Parties hereby agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the meanings herein specified:
"AFFILIATE" means, with respect to any Person, a Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person. For purposes of this definition,
the term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"BUSINESS ENTERPRISE PRODUCT" means any computer software product marketed to
business users.
*
"CONFIDENTIAL INFORMATION" means: (i) Technical Information; (ii) business
information of a Party, including but not limited to any information relating
to a Party's product plans, product designs, product costs, product prices,
product names, finances, marketing plans, business opportunities, personnel,
research, development or know-how; and (iii) any information designated by any
party as "confidential" or "proprietary" or which, under the circumstances
taken as a whole, would reasonably be deemed to be confidential; and (iv) the
terms and conditions of this Agreement. "Confidential Information" does not
include any information that: (a) was in or entered the public domain through
no wrongful act of the receiving Party; (b) was rightfully received by the
receiving Party from a Third Party who is not bound by a restriction of
nondisclosure; (c) was already in the disclosing Party's possession without
restriction as to
- -------------------
* Denotes the omission of information pursuant to the request for
confidential treatment. The complete contract has been filed separately
with the Securities and Exchange Commission.
<PAGE> 2
disclosure; or (d) was developed by the receiving Party independently and
without reference to any Confidential Information of the other Party as can be
shown by written records.
"DERIVATIVE WORK" means a work that is based upon one or more preexisting
works, such as a revision, modification, adaptation, translation, abridgment,
condensation, expansion, or any other form in which such preexisting works may
be recast, transformed or adapted and that if prepared without the
authorization of the owner of the preexisting work would constitute copyright
infringement or other infringement of the IPR of the owner therein.
"DEVELOP" (or such conjugation thereof as the context may require) means
design, engineer, prepare or develop (or such conjugation thereof as the
context may require).
"DISTRIBUTE" (or such conjugation thereof as the context may require) means
sell, license, transfer or otherwise directly or indirectly distribute (or such
conjugation thereof as the context may require).
"EXPLOIT" (or such conjugation thereof as the context may require) means to
Make, have Made, Develop, Distribute, Make Derivatives of, Use and otherwise
exploit commercially or noncommercially (and conjugations thereof as required
by the context).
"IPR" means any Copyright, Patent, Trademark, rights in and to Know-How, moral
right or other intellectual property or proprietary right of any kind, whether
arising under the laws of the United States or any other nation, state or
jurisdiction (including, but not limited to, any foreign equivalents thereto).
"MAKE" (or such conjugation thereof as the context may require) means
manufacture, assemble, produce, reproduce or make or have made (or such
conjugation thereof as the context may require).
"MICROGRAFX PROGRAMS" means, collectively, the following in source and object
code form: (a) the Technology * (but specifically excluding all Content), the *
(but specifically excluding all Content), * (working title) computer software
products for all platforms, media and languages and any and all other computer
software products planned for Development or in Development by Micrografx other
than Business Enterprise Products; (b) all end-user traffic information and data
generated from the "Personal Creativity" section of Micrografx's Web Site and
all end user registration and customer support information concerning *; (c) all
computer software and associated IPR used, included or embodied in any products
of Micrografx to provide locking and unlocking capabilities (e.g., user access
codes, automatic shutdown features, and similar devices); (d) computer software
and associated IPR * (a) through (d) above ; (f) all * used in connection with
the Development or Making of any of the foregoing (including the "Rapid
Development" tool); and (g) any Updates of any of the foregoing.
"MICROGRAFX PROPERTIES" means, collectively, the Micrografx Programs (including
all Content and Technology used, included or embodied in any of the Micrografx
Programs) and the Documentation. "Micrografx Properties" do not include any
Indicia.
"PERSON" means any individual, partnership, joint-stock company, firm,
corporation, association, unincorporated organization, joint venture, trust or
other entity.
"REVISION" means, with respect to a product, any revision, update, sequel,
modification, Derivative Work and/or other enhancement (whether or not based on
the Micrografx Properties and whether or not marketed with any of the
Micrografx Indicia).
<PAGE> 3
"SOCIAL EXPRESSION PRODUCT" means a combination of art and verse designed to
convey sentiment regarding an array of human interaction and emotion, in both
printed and electronically delivered format, post cards, invitations,
announcements, awards and certificates.
"SUBLICENSE" means the sublicensing, grant or other authorization to a Third
Party to Exploit any or all of the rights granted under a license.
"TECHNOLOGY" means, with respect to any computer software product, all Source
Code, Object Code, HTML code and other codes, designs, formulas, algorithms,
methods, processes, procedures, ideas, concepts, inventions, discoveries,
technologies, tools, materials and devices used, included or incorporated
therein. "Technology" does not include any Indicia.
"TECHNICAL INFORMATION" includes all technical information, documentation,
binaries, libraries and source code, of the applicable Party.
"THIRD PARTY" means any Person that is not a Party or an Affiliate of a Party.
"USE" (or such conjugation thereof as the context may require) means display,
perform, copy, use or reduce to practice (or such conjugation thereof as the
context may require).
All other capitalized terms used herein shall have the meaning
provided for such term set forth in the License Agreement.
SECTION 2. NONCOMPETITION
For a period of *, Micrografx shall not (whether directly or indirectly
(including for or through any Affiliate or Third Party)), *. Nothing herein
contained shall limit Micrografx from Exploiting any of the Micrografx
Properties (including without limitation, software development tools and
component functionality) in any manner *. The Parties acknowledge and agree,
by way of example, and not by limitation, that presently: (a) *, whether
voluntarily or by operation of law (e.g., by merger, *.
3. REPRESENTATIONS AND WARRANTIES
Micrografx hereby represents and warrants to Cendant that (a) Micrografx has
all requisite power and authority and full legal right to execute and deliver,
and to perform all its obligations under, this Agreement and (b) this Agreement
has been duly executed and delivered by Micrografx and constitutes the legal,
valid and binding obligation of Micrografx, enforceable against Micrografx in
accordance with its terms.
4. SPECIFIC PERFORMANCE; DAMAGES
4.1 SPECIFIC PERFORMANCE
The parties acknowledge that it may be impossible to measure in money the
damages that Cendant shall incur on account of Micrografx's violation of any
provision of this Agreement. Consequently, in any action specifically to
enforce any provision of this Agreement, Micrografx hereby waives any claim or
defense therein that an adequate remedy at law or in damages exists.
Micrografx further agrees that Cendant shall be entitled to injunctive relief,
specific performance or other equitable relief to prevent violation of any
provision of this Agreement.
4.2 DAMAGES
Without limiting any other rights of Cendant, including, without limitation,
the rights described in Section 4.1 hereof, Micrografx shall be liable to
Cendant for all damages resulting from a breach by Micrografx of any provision
of this Agreement.
<PAGE> 4
5. NO IMPLIED WAIVERS; RIGHTS CUMULATIVE
5.1 WAIVERS
No failure on the part of Cendant to exercise and no delay in exercising any
right, power, remedy or privilege under this Agreement or provided by statute
or at law, in equity or otherwise shall impair, prejudice or constitute a
waiver of any such right, power, remedy or privilege, nor shall any single or
partial exercise of any such right, power, remedy or privilege preclude any
other or further exercise thereof or the exercise of any other right, power,
remedy or privilege. No failure on the part of Cendant at any time to request
further information or to require further action of Micrografx shall constitute
a waiver by such party of any right, power, remedy or privilege of such party
to request further information or require further action.
5.2 RIGHTS AND REMEDIES
Nothing contained in this Agreement shall be construed to limit in any way any
right, power, remedy or privilege of Cendant under this Agreement now or
hereafter existing at law or in equity. Each and every right, power, remedy
and privilege hereby given to, or retained by, Cendant in this Agreement shall
be in addition to and not in limitation of every other right, power, remedy and
privilege given under this Agreement now or hereafter existing at law or in
equity and may be exercised from time to time or simultaneously and as often
and in such order as may be deemed expedient by Cendant. All such rights,
powers, remedies and privileges shall be cumulative and not mutually exclusive
and the exercise of one shall not be deemed a waiver of the right to exercise
any other. Micrografx hereby waives, to the extent permitted by applicable
law, any right which it may have to require Cendant to choose or elect
remedies.
6. SURVIVAL
All agreements, covenants, representations, warranties and indemnities set
forth in this Agreement shall survive the execution and delivery of this
Agreement. Notwithstanding anything herein or in any other agreement to the
contrary, all agreements, covenants, representations, warranties and
indemnities set forth in this Agreement shall survive the expiration of the
noncompete provision or other termination of this Agreement.
7. FURTHER ASSURANCES
Micrografx agrees to duly execute and deliver (to Cendant or otherwise), or
cause to be duly executed and delivered (to Cendant or otherwise), such further
instruments and do and cause to be done such further acts and things that may
be necessary or as Cendant may at any time and from time to time reasonably
request in connection with its administration of this Agreement or to carry out
more effectively the provisions and purposes of, or to better assure and
confirm unto Cendant its rights and remedies under, this Agreement.
8. AMENDMENTS
No amendment, modification, waiver, termination or discharge of any provision
of this Agreement, nor consent to any departure by Cendant or Micrografx
therefrom, shall in any event be effective unless the same shall be in writing
specifically identifying this Agreement and the provision intended to be
amended, modified, waived, terminated or discharged and signed by Cendant and
Micrografx, and each such amendment, modification, waiver, termination or
<PAGE> 5
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by Cendant and Micrografx.
9. GENERAL PROVISIONS
9.1 CONFIDENTIALITY. Each Party will refrain from using the other Party's
Confidential Information except as contemplated in this Agreement and from
disclosing such Confidential Information to any Third Party except to employees
(or subcontractors), legal advisors, financial advisors and in the course of
due diligence as is reasonably required in connection with the exercise of its
rights and obligations under this Agreement (and only subject to binding use
and disclosure restrictions at least as protective as those set forth in this
Agreement executed in writing by such employees, subcontractors or other
parties). The Parties will each store and protect the other party's
Confidential Information from unauthorized access with due care. The foregoing
obligations of confidentiality shall not apply to any information which is
required to be disclosed by applicable Law (but only to the extent and for the
purpose of such required disclosure); provided, that in such event, the
receiving Party shall promptly notify the disclosing Party and cooperate as
requested by the disclosing Party to minimize the scope of such disclosure.
9.2 SEVERABILITY. If any provision of this agreement is deemed unlawful,
void, or for any reason unenforceable, such provision shall be narrowed in
scope or otherwise amended to the extent necessary to make such provision
lawful, valid and enforceable while as nearly as possible reflecting the intent
of the Parties as expressed in this Agreement, or, if such amendment is
impossible, severed from this Agreement and if so severed, the Parties shall
negotiate in good faith any amendment to this Agreement necessary to reflect
the original intent of the Parties. No amendment or severing of any provision
of this Agreement shall affect the validity or enforceability of any remaining
provisions.
9.3 NOTICES. Unless otherwise provided, any notice required or permitted
under this Agreement will be given in writing and will be deemed effectively
given upon personal delivery to the Party to be notified, upon confirmed
receipt of telecopy or other electronic facsimile transmission, or upon deposit
with the United States Post Office, postage prepaid, registered or certified
with return receipt requested and addressed to the Party to be notified at the
address indicated for such Party below:
If to Cendant: Sierra On-Line, Inc.
3380 146th Place SE, Suite 300
Bellevue, WA 98007
Attn: General Counsel
Fax: (425) 649-0340
With a copy to: Perkins Coie LLP
49 108th Avenue Northeast
Suite 1800
Bellevue, WA 98004-5584
Attn: Bruce Dick, Esq.
Fax: (425) 453-7350
<PAGE> 6
If to Micrografx: Micrografx, Inc.
1303 E. Arapaho Road
Richardson, TX 75081
Attn: General Counsel
Fax: (972) 994-6030
With a copy to: Jenkens & Gilchrist
1445 Ross Ave., Suite 3200
Dallas, TX 75202
Attn: Steve Leshin, Esq.
Fax: (214) 855-4300
Either Party may change its address specified in this Section by giving the
other Party notice of such change in accordance with this Section.
9.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding on,
enforceable by, and inure to the benefit of, the successors and assigns of
Micrografx and Cendant.
9.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original instrument, but all of
which together shall constitute only one and the same instrument.
9.6 GOVERNING LAW. This Agreement will be interpreted, construed and
enforced in accordance with the laws of the State of New York.
9.7 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement, and
supersedes any and all prior agreements, between the Parties regarding the
subject matter hereof. No amendment of any provision of this Agreement shall
be effective unless set forth in a written instrument signed by both Parties.
9.8 AFFILIATES. Each Party shall remain obligated for the actions or
inaction of its Affiliates to ensure that no such action or inaction results in
a breach or default of any term or condition of this Agreement.
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<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.
Micrografx: Cendant:
MICROGRAFX, INC. CENDANT SOFTWARE CORPORATION
By: /s/ Douglas Richard By: /s/ Chris McLeod
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Its CEO Its CEO
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