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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
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)
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TEXAS 0-18708 75-1952080
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<S> <C> <C>
(State of other jurisdiction (Commission File Number) (IRS Employer Identification
incorporation) No.)
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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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The item numbers and responses thereto are in accordance with the
requirements of Form 8-K. All capitalized terms used and not otherwise defined
herein shall have the meaning specified in the Company's Current Report on Form
8-K.
The Company hereby amends and restates in its entirety each of the
following items of the Company's Form 8-K.
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.
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: November 25, 1998 By /s/ John M. Carradine
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John M. Carradine
Chief Financial Officer
and Treasurer
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INDEX TO EXHIBITS
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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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.
"CLOSING DATE" means June 28, 1998.
"COMPETING PRODUCT" means any computer software product marketed (in all
formats, media and distribution channels) other than primarily as a Business
Enterprise Product which competes with any one or more of the following (whether
as a complete suite of products marketed and bundled together or as a
stand-alone component product competitive with one or more component product(s)
within the following described classes of products; for example, a stand-alone
product competitive with the
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"Instant 3D Print Studio" portion of the "Windows Draw" product would be deemed
a "Competing Product"; however, a computer software product that is competitive
with any product that is not currently, but is after the Closing Date, included
in a bundle with any of the following products, but that is not competitive with
the following products (or presently existing components thereof) on a stand
alone basis shall not be deemed a "Competing Product")): (a) "Windows Draw 7.0"
(with or without "Print Studio") (or any Revision); (b) "Snapshot" version X.0
(or any Revision); (c) "Murder Mystery 1.0" (or any Revision); (d) any Social
Expression Product ; or (e) any computer software product based on or similar to
the "Crayola" product source code licensed to Cendant hereunder (or any
Revision). By way of example, and not limitation, marketing primarily as other
than a Business Enterprise Product is indicated by such factors as suggested end
user price point on initial product launch, packaging design, in-store product
positioning (to the extent controlled by the product developer/publisher),
placement and nature of advertising and Third Party industry product
classification (e. g., PC Data and other published software industry reports,
surveys and reviews).
"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.
"COMPLETED TECHNOLOGIES" means the source code, object code and documentation
exclusive of Third Party Content and Third Party Indicia of CreataCard Version
3.0.
"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).
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"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).
"DISTRIBUTABLE PRODUCT(S)" means those Micrografx Programs for which Micrografx
shall complete development of the current version in accordance with the
specifications and schedules set forth in Exhibit C.
"DISTRIBUTION TRANSACTION" means the arrangements under which Cendant or its
subsidiary, Sierra On-Line, will act as exclusive distributor of the CreataCard
product line and the Windows Draw product line.
"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 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.
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"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) the Technology underlying the "CreataCard" version 3 software
product (but specifically excluding all Content including Content delivered by
American Greetings Corporation or its Affiliates), the Technology underlying the
"Crayola" software product (but specifically excluding all Content belonging to
Binney & Smith and Hallmark which is directly related to the products listed
above), "WindowsDraw 6.0", "WindowsDraw 7.0", "Photo Magic", "Instant 3D Print
Studio", "Snapshot" and "Murder Mystery" (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 used in
connection with the creation, downloading and publishing of cards and other
materials on-line by end-users; (d) all e-commerce engine technology associated
with items (a) through (c) above ; (e) all development tools and processes 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, 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).
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"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).
"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.
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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 indirectly Exploit: (a) the Micrografx Properties (excluding the
Third Party Content); (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 of the "Snapshot"
and "Murder Mystery" 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
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right to Use such Indicia will be limited to no greater prominence than that of
the Cendant Trademarks chosen for the next product release; and (ii) on
succeeding product releases, Cendant shall have the right to Use the Micrografx
Trademarks, but only with Micrografx identified as the developer in a manner
sufficient to ensure the proper characterization as a distribution arrangement.
Thereafter, Cendant shall continue to have the right to Use the "Micrografx"
name and logo under this Section in a less prominent and nonprimary manner
(i.e., so that the applicable product is not branded with the "Micrografx" name
or logo, but less prominent reference is made to the fact that Micrografx was,
for example, the developer of the underlying technology).
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 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
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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 SNAPSHOT AND MURDER MYSTERY DISTRIBUTION. At Cendant's
option, Cendant may, instead of publishing the "Snapshot" and "Murder Mystery"
products, distribute the same on Micrografx's behalf (with Micrografx branding
as the developer in a manner sufficient only to ensure the proper
characterization as a distribution arrangement), upon substantially the same
terms and conditions as the Windows Draw distribution arrangement, upon payment
of an additional Fifty Thousand Dollars ($50,000) to Micrografx (and no other
consideration or payment obligation concerning such distribution).
2.8 PROHIBITION. Cendant agrees that it will not publish a
software product based on the technology underlying the Completed Technology of
the CreataCard product prior to September 1, 1999 without the prior written
consent of Micrografx except (i) to the extent Micrografx has lost the right to
distribute the CreataCard product other than through action or inaction of
Cendant and (ii) subject to compliance with any rights of first refusal afforded
by Micrografx to American Greetings Corporation (if any) Cendant may publish a
foreign language software product based on the technology underlying the
Completed Technology of the CreataCard Product. In addition, in the event
Mindscape or any of its affiliates ship a greeting card product containing
content from American Greetings Corporation that is competitive with the
CreataCard product (other than products announced by Mindscape and its
affiliates prior to the date hereof) the foregoing restriction shall be
inapplicable. Further, Micrografx and Cendant shall cooperate in good faith with
each other to mitigate any adverse consequences of the foregoing prohibition in
the event of breach by American Greetings Corporation (or any Third Party acting
in concert with American Greetings Corporation) of the Third Party agreements
with American Greetings Corporation or the pre-announcement or introduction by
any Third Party of any competitive product using Content of American Greetings
Corporation prior to August 31, 1999.
SECTION 3. DELIVERABLES AND DEVELOPMENT
3.1 INITIAL DELIVERY. Upon execution of this Agreement,
Micrografx will deliver to Cendant: (a) one (1) copy, on all existing media, of
the complete Source Code, Object Code and Documentation of each of the
Micrografx Programs, in their then-existing state; and (b) at least one (1)
copy, on all such existing media, of all User Information and Marketing
Information.
3.2 FURTHER DEVELOPMENT. Following the execution of this
Agreement, Micrografx shall Develop and Make final "gold master" versions of the
Distributable Products and/or Completed
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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 deliver the Source Code, Object Code and related
Documentation of the same to Cendant in their then-existing state for Cendant's
review and approval or disapproval (provided, that Cendant shall only be
entitled to disapprove such Distributable Products and Completed Technology 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 Distributable
Products and Completed Technology, Cendant will provide Micrografx with written
comments specifying in reasonable detail Cendant's concerns and objections, and
Micrografx will promptly revise such Distributable Products and Completed
Technology 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
an acceptable gold master of any one of the Distributable Products and Completed
Technology, upon the date such gold master was first due under the applicable
schedule, Micrografx shall thereafter not be entitled to any further interest
payment on the $3 million unpaid portion of the license consideration under
Section 6.1. Promptly following Cendant's final approval thereof, Micrografx
shall deliver to Cendant the Source Code, Object Code and Documentation of each
of the Distributable Products and Completed Technology, upon such media as
Cendant may reasonably request.
3.3 SOURCE CODE. Micrografx shall ensure that all Source Code
delivered to Cendant pursuant to Section 3.1 and Section 3.2 is sufficiently
documented to permit an ordinarily skilled programmer to efficiently Use, Make
and Make Derivative Works of the applicable Micrografx Programs and otherwise
reasonably suitable in the form delivered (e.g., with respect to format,
completeness and accuracy) to permit reasonably Cendant's Exploitation of such
Source Code 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.
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 three (3) years 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.
<PAGE> 10
SECTION 4. NONCOMPETITION
For a period of five (5) years from the Closing Date, Micrografx shall not
(whether directly or indirectly (including for or through any Affiliate or Third
Party)), Develop, Make, or Distribute any Competing Products (except as required
in connection with the Distribution Transaction). 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 so long as such Exploitation is not in or in connection with a
Competing Product. The Parties acknowledge and agree, by way of example, and not
by limitation, that presently: (a) products such as Print Artist, Printmaster
Office, Printmaster Publishing Suite, Printmaster, Corel Printhouse, Printshop
Publishing Suite are products that would be considered to be Competing Products
with respect to the "Windows Draw 7.0" product (with or without "Print Studio");
and (b) products such as Adobe Photo Deluxe, Ulead iPhoto Express, Microsoft
Picture It, Broderbund Photo Organizer, are products that would be considered to
be Competing Products with any version of the "Snapshot" product, if such
products were Developed, Made or Distributed by Micrografx. Micrografx's
"Picture Publisher", as currently marketed and with its current type of business
oriented interfaces and functionality is not a "Competing Product." For purposes
of clarification, during the same five (5) year period, any transfer, license,
sublicense, assignment, sale or other transaction involving all or any part of
Micrografx's technology (whether present or future), whether voluntarily or by
operation of law (e.g., by merger, consolidation or reorganization), shall be
subject to and burdened by the noncompetition covenant set forth in this Section
4 and the license grants to Cendant set forth in this Agreement; provided,
however, any Third Party acquiring, licensing or otherwise obtaining rights to
such Micrografx technology whether voluntarily or by operation of law shall not
be subject to or otherwise burdened by the noncompetition covenant set forth in
this Section 4 and the license grants to Cendant set forth in this Agreement
with respect to such Third Party's preexisting, non-Micrografx technology or
Third Party independently developed technology that is not (i) a derivative of
or otherwise based on or using any Micrografx technology or (ii) developed by
persons who were Micrografx employees or independent contractors immediately
prior to such transaction.
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
transfer the sum of Thirteen Million Four Hundred Forty-five Thousand United
States Dollars (U.S. $13,445,000); and (b) thereafter, upon the later to occur
of (i) final acceptance by Cendant of the Distributable Products and Completed
Technology as contemplated by Section 3.2 and (ii) the 180th day following the
Closing Date, Cendant will pay Micrografx an additional sum of Three Million
United States Dollars (U.S. $3,000,000), in addition to interest thereon
calculated at a simple rate of one-half percent (1/2%) per month (prorated for
any partial months), accruing from the Closing Date until the date of payment
(subject to Section 3.2). The total consideration paid hereunder will be
allocated in a manner to be determined in good faith by the Parties within
forty-five (45) days following the date hereof.
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
<PAGE> 11
agreement(s) is not assigned to Cendant pursuant to Section 2.4, Cendant agrees
to pay any royalties or other sums payable by Micrografx under the terms of such
agreements as reflected in Schedule 2.4. Such payments, at Micrografx's option,
shall be made either to Micrografx for remittance to the applicable Third Party
or directly by Cendant to the applicable Third Party. Without Cendant's prior
written consent, Micrografx shall not terminate, amend or otherwise modify any
such Third Party agreement(s) and shall take no action or fail to act in any
manner that would give the applicable Third Party the right to terminate any
such agreement or make any claim or offset against Cendant thereunder.
6.3 CERTAIN DEVELOPMENT COSTS. With respect to "Windows Draw
7, Premiere Edition Print Studio", 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.
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 "Snapshot" 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
"Photo Magic"), 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) Micrografx has and will have all necessary rights to grant
the license and other rights granted to Cendant under this Agreement;
(e) no Third Parties have or will have any rights or
privileges, or are or will be contractually or otherwise entitled to
impose any obligations upon or claims against Cendant, with respect to
any Distribution of any of the Micrografx Programs (or any Derivative
Works thereof) or any Micrografx Indicia, except pursuant to the
express terms and conditions of the Third Party agreements disclosed in
the schedules and exhibits hereto;
<PAGE> 12
(f) the execution, delivery and performance of this Agreement
by Micrografx will not result in breach of or default under any
agreement with any Third Party by which Micrografx is bound;
(g) Micrografx shall not enter into any agreement, the
execution, delivery or performance of which would violate, breach or
contravene this Agreement.
(h) no action, suit, investigation or proceeding has been
instituted or threatened against Micrografx or any judgment, writ,
order, injunction or decree of any Governmental Authority issued
against Micrografx, to restrain or prohibit or otherwise challenge the
legality or validity of the transactions contemplated hereby, nor, to
Micrografx's best knowledge after due inquiry, is there any basis for
the same; and Micrografx has not received any claims from any Third
Party contesting its ownership of the Micrografx Programs.
(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);
(l) Other than assertions and matters relating to AG
previously disclosed by Micrografx to Cendant, there is no action, suit
or proceeding to which Micrografx is a party (either as a plaintiff or
defendant) pending or threatened and there is no basis for any such
action, suit or proceeding, involving in any way any of the Micrografx
Properties, Micrografx Indicia, Third Party Technology or Third Party
Indicia;
(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):
(i) each contract is a valid and binding agreement of Micrografx and
the Third Party thereto; (ii) Micrografx has fulfilled all material
obligations required to be performed by it prior to the Closing Date;
(iii) there has not occurred any material default under any such
contract on behalf of Micrografx, or to Micrografx's knowledge, by the
other party thereto; and (iv) except as set forth in Schedule 7.1(m)
there are no other continuing obligations to pay Third Parties under
royalty or otherwise to Exploit the Third Party Technology and Third
Party Indicia in the manner presently Exploited by Micrografx;
<PAGE> 13
(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) Micrografx shall take no action, or fail to take any
action, that would amend, modify, extend or otherwise change the terms
or conditions of any Third Party Contract in any manner that would
adversely affect the rights or obligations of Cendant as contemplated
by this Agreement, without the prior written consent of Cendant in its
sole discretion.
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;
(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.
<PAGE> 14
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 shared by the Parties in proportion to
their damages or injuries.
SECTION 8. INDEMNIFICATION; LIMITATIONS OF LIABILITY
8.1 INDEMNIFICATION. Micrografx and Cendant will each defend,
indemnify and hold harmless the other Party and its directors, officers,
employees, agents and representatives from any and all third party claims,
costs, judgments, damages and expenses (including reasonable attorneys' fees) (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.
8.2 MICROGRAFX INDEMNIFICATION. In addition to Micrografx's
obligations under Section 8.1, Micrografx will defend, indemnify and hold
harmless Cendant and its directors, officers, employees, agents and
representatives from any and all claims, costs, judgments, damages and expenses
(including reasonable attorneys' fees) which: (a) are related in any manner to
all or any portion of any of the Micrografx Properties or Micrografx Indicia or
any Exploitation thereof by Micrografx or any Third Party; and (b) accrued or
were incurred prior to the Closing DATE. Cendant will not be entitled to any
amount relating to a Loss as to which a claim for indemnification is made under
this Section 8, and Micrografx will not be obligated to provide such
indemnification, unless the amount of the Loss exceeds, in each instance, Ten
Thousand Dollars ($10,000) and until the aggregate amount of all Losses as to
which indemnification would otherwise be required under this Section 8 exceeds
Fifty Thousand Dollars ($50,000)(the "Threshold"), but then Cendant will be
entitled to and Micrografx will be obligated to provide indemnification for the
full amount of such Losses, including the Threshold. Other than for Losses
arising from a breach of Micrografx's representations and warranties under
Section 7 against infringement of the IPR of third parties, in no event will the
aggregate liability of Micrografx for indemnification claims under this
Agreement exceed the total consideration received by Micrografx hereunder.
<PAGE> 15
Micrografx's obligations to defend, indemnify and hold harmless Cendant from and
against Losses shall not apply to third party claims that are first raised by
the applicable third party more than (x) four (4) years after the Closing Date
concerning matters involving the Technology underlying the "CreataCard" software
product line or the Technology underlying the "Crayola" software product line
and (y) three (3) years after the Closing Date on all other claims for Losses.
8.3 CENDANT INDEMNIFICATION. In addition to Cendant's
obligations under Section 8.1 (but subject to Micrografx's obligations under
Section 8.1), Cendant will defend, indemnify and hold harmless Micrografx and
its directors, officers, employees, agents and representatives from any and all
claims, costs, judgments, damages and expenses (including reasonable attorneys'
fees) which: (a) are related in any manner to Cendant's Exploitation of any of
the Micrografx Properties or Micrografx Indicia; and (b) accrued or were
incurred after the Closing Date.
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 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:
<PAGE> 16
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 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:
<PAGE> 17
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.
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.
<PAGE> 18
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 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
<PAGE> 19
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.
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.
<PAGE> 20
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
Micrografx: Cendant:
- ---------- --------
MICROGRAFX, INC. CENDANT SOFTWARE CORPORATION
By: /s/Douglas R. Richard By /s/Chris McLeod
---------------------- --------------------------
Its CEO Its CEO
------------------- -----------------------
<PAGE> 21
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> 22
3. The Third Party Technology consists of the following
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Bitstream, Inc. TrueDoc(R)License - Fonts
- -------------------------------------------------------------------------------------------------------------
Bitstream, Inc. License - Fonts/Digital Typefaces
Including Kanji Outlines per Second Addendum
- -------------------------------------------------------------------------------------------------------------
Lead Technologies, Inc. License - Filters
- -------------------------------------------------------------------------------------------------------------
Pretty Good Privacy, Inc. License - Encryption Software
- -------------------------------------------------------------------------------------------------------------
Unisys Corporation License - LZW Technology
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
3D Planet, Inc. OEM License - MGX can bundle 3D Assistant w/any product
- -------------------------------------------------------------------------------------------------------------
Axion Software Software License - MGX License to Lens Flare Source Code
- -------------------------------------------------------------------------------------------------------------
Bitstream, Inc. TrueDoc(R)License - Fonts
- -------------------------------------------------------------------------------------------------------------
Bitstream, Inc. License - Fonts/Digital Typefaces
Including Kanji Outlines per Second Addendum
- -------------------------------------------------------------------------------------------------------------
Chezem Studio License - "Eyeball" graphic
- -------------------------------------------------------------------------------------------------------------
Classic PIO Partners License - Photographic Computer Images
- -------------------------------------------------------------------------------------------------------------
CreatiCom Corp. and Focus Designs, Inc. License - Clipart
- -------------------------------------------------------------------------------------------------------------
Digital Typeface Corp Typeface Enhancement
- -------------------------------------------------------------------------------------------------------------
Digital Typeface Corp (formerly URW) URW Typeface Agreement
- -------------------------------------------------------------------------------------------------------------
Digital Frontiers License - HVS JPEG; HVS Color
- -------------------------------------------------------------------------------------------------------------
Focus Designs, Inc. License - Ethnic Clipart
- -------------------------------------------------------------------------------------------------------------
Galaventures Joint Marketing - Mystery Packs
- -------------------------------------------------------------------------------------------------------------
GraphicCorp OEM Media Clip License
- -------------------------------------------------------------------------------------------------------------
Imageline, Inc. License - Images & Animations
- -------------------------------------------------------------------------------------------------------------
International Microcomputer License - Clipart Bundle
Software Incorporated
- -------------------------------------------------------------------------------------------------------------
IMSI License -Bundle/OEM
MasterClips 33,000
- -------------------------------------------------------------------------------------------------------------
Inso Corporation Software License - Filters
- -------------------------------------------------------------------------------------------------------------
Inso Corp (formerly InfoSoft) License - Correct Spell
- -------------------------------------------------------------------------------------------------------------
Loomis Productions Sound Recording License
- -------------------------------------------------------------------------------------------------------------
Microsoft Corporation Logo License - Windows '95, Windows '98 and Office
- -------------------------------------------------------------------------------------------------------------
PaperDirect, Inc. License - Paper Templates/Paper Packs
- -------------------------------------------------------------------------------------------------------------
Tri Energy Productions d.b.a. Energy Film Library License - Low resolution photographic images
- -------------------------------------------------------------------------------------------------------------
Unisys Corporation License - LZW Technology
- -------------------------------------------------------------------------------------------------------------
John B. Wagner License - Photographic Images
- -------------------------------------------------------------------------------------------------------------
Wood River Gallery License - Photographic Images
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 23
EXHIBIT B
MAINTENANCE, SUPPORT AND UPDATES
No maintenance, support, or updates are anticipated for either the Windows Draw
7.0 Premier Edition Print Studio or CreataCard 3.0 beyond that described in
Exhibit C or other written agreements of the parties concerning the same. 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> 24
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:
Windows Draw 5
Windows Draw 6
Premiere Print Studio
Photo Magic
Instant 3D Print Studio
Crayola Software Products
CreataCard Version 1
CreataCard Version 2
Cendant acknowledges that the following products are not shipping, are not
complete, and will be acquired "as is" and will accelerate the formation
process:
Snapshot 1.0.74
Murder Mystery 1.0
WINDOWS DRAW 7.0 PREMIER EDITION PRINT STUDIO (MICROGRAFX INTERNAL
PRODUCT SPECIFICATION ATTACHED)
The Program is version 7.0 of the Windows Draw product suite and includes the
following executable components:
o Windows Draw 7.0
o Instant 3D 1.2
o Photomagic 6.0
o Media Manager
The Program includes the following significant feature improvements or
additions (over the previous version, 6.0):
o Multi-column text support
o Justified text alignment
o Graphic text ("Word Art")
o Guides (drawing construction aids)
o Save as Wallpaper
o New graphical product front end
o Instant Draw capabilities
o Additional projects and associated content
<PAGE> 25
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:
Contract signing + 10 business days - Current product build
(Initial Delivery) - Build environment & all source code
Weekly after Initial Delivery Current product build
8/31/98 RTM of English version
9/14/98 - Final build environment and source
code
Start Final QA on German version
Start Final QA on French version
10/30/98 - RTM of German version
RTM of French version
11/13/98 - Complete archive of German version
Complete archive of French version
<PAGE> 26
EXHIBIT D
CERTAIN MICROGRAFX IPR
PATENTS
Cool Shapes (Patent Pending)
TRADEMARKS
Micrografx Micrografx(R)
Windows Draw(R)
PhotoMagic(R)
Instant 3D(TM)
Micrografx Snapshot(TM)
Micrografx Media Manager(TM)
Cool Shapes(TM)
<PAGE> 27
EXHIBIT E
TRANSITION PLAN
INITIAL RAMP UP
Within 5 days of signing this agreement, tentatively scheduled to take place on
July 1 & 2, Cendant will have the right to send a team of both Marketers and
Developers to spend no more than 12 hours of time with the corresponding
Micrgrafx Marketers and Developers to initiate the product and business
transfer.
ENGINEERING AND PRODUCT MANAGEMENT
Beginning 9/7/98 classes will be conducted by Micrografx employees on Micrografx
premises in Richardson, Texas to train Cendant employees and designees on the
structure, detail and construction of the following:
Windows Draw
Photomagic
Instant 3D
Media Manager
Installer
Content creation
Interface Modification (including Instant Draw features)
Beginning 10/5/98 classes will be conducted by Micrografx employees on
Micrografx premises in Richardson, Texas to train Cendant employees and
designees on the structure, detail and construction of the following:
CreataCard
CreataCard content preparation tools
Content Creation
Interface Modification
Unlock mechanism
For each of the above products or processes, Micrografx will provide the name
and telephone number of a Micrografx employee who will make reasonable efforts
to respond in a reasonable time to questions in their assigned area. These
employees will be incented to provide accurate, timely responses to all
inquiries.
Similarly, at least one Product Management contact for Windows Draw Premier
Edition Print Studio and one Product Management contact for CreataCard will be
provided. All time required to train and respond to inquiries will be logged in
a central database. Micrografx will provide 700 engineering hours and 300
product management hours as part of the Transition Period. Additional hours will
be billed to Cendant at the rates specified in Schedule 6.3.
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 incremental costs associated with implementing a more
aggressive schedule will be billed to them at time and materials.
<PAGE> 28
SALES AND CUSTOMER SUPPORT
Beginning July 1, Micrografx will provide 45 days (Until August 15th) of sales
and technical support assistance to ensure a smooth transition for customers who
call Micrografx support directly and for Cendant personnel. For an additional 30
day period, Cendant may use Micrografx employee assistance at the actual
budgeted compensation. After that period, Cendant may use Micrografx employee
assistance for double the actual budgeted compensation.
Cendant will be responsible, starting with expenses incurred after July 1, for
all SoftBank costs related to the consumer business, both direct and indirect,
and will insure full inventory is available to meet demand. A separate
transition plan will be necessary to make this 45-day period productive and
effective, and should be completed within 15 days of the transaction closing.
<PAGE> 29
EXHIBIT F
CREATACARD 3.0 (MICROGRAFX INTERNAL PRODUCT SPECIFICATION ATTACHED)
The Program is version 3.0 of CreataCard, standard and deluxe or Gold versions
which will contain the following key features:
o Pre-defined Banners and Calendars
o New Unlockable content
o Refreshed core content
o Gold product as an unlockable
o Alphabet typeface artwork in Artbook
SYSTEM REQUIREMENTS:
o Personal 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
o Internet connection for Personal Delivery and CreataCard Online
DELIVERY SCHEDULE:
Contract signing + 5 business days - Current product build
(Initial Delivery) - Build environment & all source code
- Content processing tools and
corresponding source
Weekly after Initial Delivery Current product build
7/27/98 Start Final QA
9/21/98 RTM of Plus & Gold
9/28/98 - Final build environment and source
code
- Final content processing tools and
corresponding source
<PAGE> 30
EXHIBIT G
JOINT PRESS RELEASE
[To be attached]
<PAGE> 31
<TABLE>
<CAPTION>
SCHEDULE 2.4
THIRD PARTY TECHNOLOGY AGREEMENTS
- -------------------------------------------------------------------------------------------------------------
<S> <C>
Bitstream, Inc. TrueDoc(R)License - Fonts
- -------------------------------------------------------------------------------------------------------------
Bitstream, Inc. License - Fonts/Digital Typefaces
Including Kanji Outlines per Second Addendum
- -------------------------------------------------------------------------------------------------------------
Lead Technologies, Inc. License - Filters
- -------------------------------------------------------------------------------------------------------------
Pretty Good Privacy, Inc. License - Encryption Software
- -------------------------------------------------------------------------------------------------------------
Unisys Corporation License - LZW Technology
- -------------------------------------------------------------------------------------------------------------
3D Planet, Inc. OEM License - MGX can bundle 3D Assistant w/any product
- -------------------------------------------------------------------------------------------------------------
Axion Software Software License - MGX License to Lens Flare Source Code
- -------------------------------------------------------------------------------------------------------------
Bitstream, Inc. TrueDoc(R)License - Fonts
- -------------------------------------------------------------------------------------------------------------
Bitstream, Inc. License - Fonts/Digital Typefaces
Including Kanji Outlines per Second Addendum
- -------------------------------------------------------------------------------------------------------------
Chezem Studio License - "Eyeball" graphic
- -------------------------------------------------------------------------------------------------------------
Classic PIO Partners License - Photographic Computer Images
- -------------------------------------------------------------------------------------------------------------
CreatiCom Corp. and Focus Designs, Inc. License - Clipart
- -------------------------------------------------------------------------------------------------------------
Digital Typeface Corp Typeface Enhancement
- -------------------------------------------------------------------------------------------------------------
Digital Typeface Corp (formerly URW) URW Typeface Agreement
- -------------------------------------------------------------------------------------------------------------
Digital Frontiers License - HVS JPEG; HVS Color
- -------------------------------------------------------------------------------------------------------------
Focus Designs, Inc. License - Ethnic Clipart
- -------------------------------------------------------------------------------------------------------------
Galaventures Joint Marketing - Mystery Packs
- -------------------------------------------------------------------------------------------------------------
GraphicCorp OEM Media Clip License
- -------------------------------------------------------------------------------------------------------------
Imageline, Inc. License - Images & Animations
- -------------------------------------------------------------------------------------------------------------
International Microcomputer Software Incorporated License - Clipart Bundle
- -------------------------------------------------------------------------------------------------------------
IMSI License -Bundle/OEM
MasterClips 33,000
- -------------------------------------------------------------------------------------------------------------
Inso Corporation Software License - Filters
- -------------------------------------------------------------------------------------------------------------
Inso Corp (formerly InfoSoft) License - Correct Spell
- -------------------------------------------------------------------------------------------------------------
Loomis Productions Sound Recording License
- -------------------------------------------------------------------------------------------------------------
Microsoft Corporation Logo License - Windows '95, Windows '98 and Office
- -------------------------------------------------------------------------------------------------------------
PaperDirect, Inc. License - Paper Templates/Paper Packs
- -------------------------------------------------------------------------------------------------------------
Tri Energy Productions d.b.a. Energy Film Library License - Low resolution photographic images
- -------------------------------------------------------------------------------------------------------------
Unisys Corporation License - LZW Technology
- -------------------------------------------------------------------------------------------------------------
John B. Wagner License - Photographic Images
- -------------------------------------------------------------------------------------------------------------
Wood River Gallery License - Photographic Images
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 32
SCHEDULE 6.1
ALLOCATION OF CONSIDERATION
[TDB]
<PAGE> 33
SCHEDULE 6.3
MICROGRAFX RATE SCHEDULE
Windows Draw 7.0 German not to exceed:
Internal Staff Cost $ 8,000.00
External Cost $60,000.00
QA Cost $12,000.00
Windows Draw 7.0 French not to exceed:
Internal Staff Cost $ 8,000.00
External Cost $60,000.00
QA Cost $12,000.00
Engineering Support* $80/hr (tracked by quarter hour)
Product Management Support* $60/hr (tracked by quarter hour)
* Beyond included hours
LOCALIZATION RATES: Not to exceed $80,000 per language.
<PAGE> 34
<TABLE>
<CAPTION>
SCHEDULE 7.1(m)
THIRD PARTY CONTRACTS
SUPPLIERS FOR WINDOWS DRAW AND SNAPSHOT
NAME TYPE OF CONTRACT ASSIGNABILITY TERM PAYMENT THIRD PARTY INDICIA
<S> <C> <C> <C> <C>
3D Planet, Inc. OEM License - MGX can bundle 3D 1/29/99 Auto 12 $.50 per unit 3D Assistant(TM)
Assistant w/any product mos renew royalty after IQ Modules(TM)
initial $25K Boundless 3D Engine(TM)
Axion Software Software License - MGX License to Lens Perpetual None None
Flare Source Code
Bitstream, Inc. TrueDoc(R)License - Fonts 11/29/99 Auto 2 None under Bitstream(R)FaceLift(TM)
yr renew current term
20% Bitstream(R) 4-l/TrueDoc(R)
increase Printing System
upon Bitstream(R) PFR
renewal Bitstream(R) FontSelect(TM)
Bitstrearn(R) Speedo(TM)
Bitstream(R) FontNavigator(TM)
Bitstream Inc. License - Fonts/Digital Typefaces 9/29/99 w/9mos None Bitstream(R)FaceLift(TM)
Including Kanji Outlines per Second sell off or Bitstream(R) Speedo(TM)
Addendum renew for $50k Bitstream(R) 4-l/TrueDoc(R)
Kanji Outlines Printing System
expire 4/15/99 Bitstream(R) PFR
Bitstream(R) FontSelect(TM)
Bitstream(R) Font Navigator(TM)
Chezem Studio License -"Eyeball" graphic Perpetual None None
Classic PIO Partners License - Photographic Computer Images 8/20/2000 Auto None (C)Classic PIO Partners All
1 yr renew Rights Reserved.
CreatiCom Corp. License - Clipart Perpetual None None
and Focus Designs,
Inc.
Digital Typeface Typeface Enhancement Perpetual None None
Corp.
Digital Typeface URW Typeface Agreement Perpetual None None
Corp (formerly
URW)
Digital Frontiers License - HVS JPEG; HVS Color Perpetual None Digital HVS(R)Frontiers
Focus Designs, Inc. License - Ethnic Clipart Perpetual None None
Galaventures Joint Marketing - Mystery Packs 10/31/2000 Royalties None
after 500
GraphicCorp OEM Media Clip License Perpetual None A portion of the
images
Provided courtesy of
GraphicCorp, Los
Angeles,
CA USA All Rights
Reserved
Imageline, Inc. License - Images & Animations Perpetual None ClipArt Copyright 1995-97
Imageline, Inc. Animations
Copyright 1997,
Imageline, Inc.
International License - Clipart Bundle 8/31/2000 Auto None IMSI CAD Symbols(R)
Microcomputer 1 yr. Renew
Software Incorporated
IMSI License -Bundle/OEM 9/4/2000 $.50 per unit As specified from time to
MasterClips 33,000 after sales time
exceed $50K
</TABLE>
<PAGE> 35
<TABLE>
<CAPTION>
SCHEDULE 7.1(M)THIRD PARTY CONTRACTS
SUPPLIERS FOR WINDOWS DRAW AND SNAPSHOT
NAME TYPE OF CONTRACT ASSIGNABILITY TERM PAYMENT THIRD PARTY INDICIA
<S> <C> <C> <C> <C> <C>
Inso Corporation Software License - Filters Perpetual Maintenance ImageStream(TM)Graphics
Maintenance charges of and Presentation Filters
expires 6/30/98 approximately Copyright (C) 1991-1995
$15K per quarter. ImageMark Software Labs,
New agreement Inc. All Rights Reserved
will be negotiated.
Inso Corp (formerly License - Correct Spell Perpetual None Int'l CorrectSpell(TM)
InfoSoft)
Loomis Productions Sound Recording License Perpetual None None
Microsoft Logo License-Windows'95,
Windows 98 Revolving 2 Periodic fees Extensive as provided by
Corporation and Office year to VeriTest Microsoft from time to
time
PaperDirect, Inc. License-Paper
Templates/Paper Packs Perpetual for Annual list PaperDirect(R)
templates of registered
11/3/98 for customers
packs, auto
renew
Tri Energy License-Low resolution Assign to 11/24/2001 None Portions of the imagery
Productions d.b.a. photo-graphic images successor on disc(s) supplied
by Energy Film Library,
Digital
Energy(TM) &
Timescape(TM)
Energy Film Library
Unisys Corporation License - LZW Sublicense Perpetual Per unit royalty "Licensed under U.S.
Technology allowed Patent No. 4,558,302 and
foreign counterparts
John B. Wagner License - Assign to Perpetual None None
Photographic Images successor
Wood River Gallery License - Assign to 11/12/2001 None None
Photographic Images successor
</TABLE>
<PAGE> 36
<TABLE>
<CAPTION>
SCHEDULE 7.1(m)
THIRD PARTY CONTRACTS
SUPPLIERS FOR CREATA
NAME TYPE OF CONTRACT ASSIGNABILITY TERM PAYMENT THIRD PARTY INDICIA
<S> <C> <C> <C> <C> <C>
Bitstream, Inc. TrueDoc(R)License - Fonts Requires prior written 11/29/99 Auto 2 None under Bitstream(R)
consent yr renew current term- FaceLift(TM)
20% increase Bitstream(R)PER
upon renewal Bitstream
4-inl/TrueDoc(R)
Printing System
Bitstream(R)
FontSelect(TM)
Bitstream(R)
Speedo(TM)
Bitstream Font
Navigator(TM)
Bitstream Inc. License - Fonts/Digital Requires prior written 9/29/99 w/9mos None Bitstream(R)
Type- faces - Including consent sell off or renew FaceLift(TM)
Including Kanji Outlines for $50k Bitstream(R)4-nl/
per Second Addemdum Kanji Outlines TrueDoc(R)
expire 4/15/99 Printing System
Bitstream(R) PFR
Bitstream(R)
FontSelect(TM)
Bitstream(R)
Speedo(TM)
Bitstream Font
Navigator(TM)
Lead Technologies, License - Filters Not addressed Perpetual Annual None
Inc. Maintenance
$2.5k
Pretty Good License - Encryption Sublicensing allowed 6/29/99 None Pretty Good Privacy(R)
Privacy, Software
Unisys License - LZW Technology Sublicensing allowed Perpetual Per unit Licensed under U.S.
Corporation royalty Patent No. 4,558,302
and foreign
counterparts
</TABLE>
<PAGE> 37
SCHEDULE 7.1(m)
THIRD PARTY CONTRACTS
CLAIMS
VARIOUS CLAIMS AND ASSERTIONS INVOLVING AMERICAN GREETINGS CORPORATION
Following is a complete listing of the American Corporation contracts with
Micrografx:
1. Master Agreement between American Greetings Corporation ("AG") and
Seller, dated February 9, 1996, as amended April l, 1997.
2. Centerpiece Product, Subagreement A, between American Greetings
Corporation ("AG") and Seller, dated February 9, 1996, as amended April
1, 1997.
3. Design Packs, Subagreement B. between American Greetings Corporation
("AG") and Seller, dated February 9, 1996, as amended April 1, 1997.
4. On-Line and Internet Special Products, Subagreement C, between American
Greetings Corporation ("AG") and Seller, dated February 9, 1996.
5. Micrografx Remote Fulfillment Software, Subagreement D, between
American Greetings Corporation ("AG") and Seller, dated April 1, 1997.
6. Centerpiece Japan Product, Subagreement E, between American Greetings
Corporation ("AG") and Seller, dated April 1, 1997.
<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.
"COMPETING PRODUCT" means any computer software product marketed (in all
formats, media and distribution channels) other than primarily as a Business
Enterprise Product which competes with any one or more of the following (whether
as a complete suite of products marketed and bundled together or as a
stand-alone component product competitive with one or more component product(s)
within the following described classes of products; for example, a stand-alone
product competitive with the "Instant 3D Print Studio" portion of the "Windows
Draw" product would be deemed a "Competing Product"; however, a computer
software product that is competitive with any product that is not currently, but
is after the Closing Date, included in a bundle with any of the following
products, but that is not competitive with the following products (or presently
existing components thereof) on a stand alone basis shall not be deemed a
"Competing Product")): (a) "Windows Draw 7.0" (with or without "Print Studio")
(or any Revision); (b) "Snapshot" version X.0 (or any Revision); (c) "Murder
Mystery 1.0" (or any Revision); (d) any Social Expression Product ; or (e) any
computer software product based on or similar to the "Crayola" product source
code licensed to Cendant hereunder (or any Revision). By way of example, and not
limitation, marketing primarily as other than a Business
<PAGE> 2
Enterprise Product is indicated by such factors as suggested end user price
point on initial product launch, packaging design, in-store product positioning
(to the extent controlled by the product developer/publisher), placement and
nature of advertising and Third Party industry product classification (e. g., PC
Data and other published software industry reports, surveys and reviews).
"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.
"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 underlying the "CreataCard" version 3 software
product (but specifically excluding all Content), the Technology underlying the
"Crayola" software product (but specifically excluding all Content),
"WindowsDraw 6.0", "WindowsDraw 7.0", "Photo Magic", "Instant 3D Print Studio",
"Snapshot" and "Murder Mystery" (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
<PAGE> 3
concerning the Windows Draw product line and CreataCard and other Micrografx
consumer card making product lines; (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 used in
connection with the creation, downloading and publishing of cards and other
materials on-line by end-users; (e) all e-commerce engine technology associated
with items (a) through (d) above ; (f) all development tools and processes 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).
"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 five (5) years from the Closing Date, Micrografx shall not
(whether directly or indirectly (including for or through any Affiliate or Third
Party)), Develop, Make, or Distribute any Competing Products (except as required
in connection with the Distribution Transaction) 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 so long as such Exploitation is not in or in connection with a
Competing Product. The Parties acknowledge and agree, by way of example, and not
by limitation, that presently: (a) products such as Print Artist, Printmaster
Office, Printmaster Publishing Suite, Printmaster, Corel Printhouse, Printshop
Publishing
<PAGE> 4
Suite are products that would be considered to be Competing Products with
respect to the "Windows Draw 7.0" product (with or without "Print Studio"); and
(b) products such as Adobe Photo Deluxe, Ulead iPhoto Express, Microsoft Picture
It, Broderbund Photo Organizer, are products that would be considered to be
Competing Products with any version of the "Snapshot" product, if such products
were Developed, Made or Distributed by Micrografx. Micrografx's "Picture
Publisher", as currently marketed and with its current type of business oriented
interfaces and functionality is not a "Competing Product." For purposes of
clarification, during the same five (5) year period, any transfer, license,
sublicense, assignment, sale or other transaction involving all or any part of
Micrografx's technology (whether present or future), whether voluntarily or by
operation of law (e.g., by merger, consolidation or reorganization), shall be
subject to and burdened by the noncompetition covenant set forth in this Section
4 and the license grants to Cendant set forth in this Agreement; provided,
however, any Third Party acquiring, licensing or otherwise obtaining rights to
such Micrografx technology whether voluntarily or by operation of law shall not
be subject to or otherwise burdened by the noncompetition covenant set forth in
this Section 4 and the license grants to Cendant set forth in this Agreement
with respect to such Third Party's preexisting, non-Micrografx technology or
Third Party independently developed technology that is not (i) a derivative of
or otherwise based on or using any Micrografx technology or (ii) developed by
persons who were Micrografx employees or independent contractors immediately
prior to such transaction.
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.
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
<PAGE> 5
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 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.
<PAGE> 6
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
If to Micrografx: Micrografx, Inc.
1303 E. Arapaho Road
Richardson, TX 75081
Attn: General Counsel
Fax: (972) 994-6030
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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> 8
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:
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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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