SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: May 16, 1996
DATA BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-20311 13-3668779
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation or Number Identification Number)
organization)
3490 Clubhouse Drive, I-2, Jackson, Wyoming 83001
(Address of principal executive offices)
Registrant's telephone number, including area code: (307) 733-9742
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Item 5. Other Events
On April 23, 1996, Capital Management Sciences ("CMS"), a
division of the Registrant, entered into an agreement
with ILX Information Systems ("ILX"), to distribute BondVu, CMS'
fixed income security analytic service expected to be launched
in the summer of 1996. ILX, a division of Thomson Financial,
Inc., is a major information provider to the broker/dealer and
institutional investment markets, and has a current subscriber
base of over 60,000 terminals in the United States. This
agreement gives ILX certain exclusive distribution rights
depending on achievement of specified revenue targets. BondVu
is a Windows-based financial information service consisting of
real-time bond market information, analytical applications,
fundamental bond data and pricing.
Item 7. Exhibits
Exhibit 1 - ILX/CMS Distribution Agreement
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.
DATA BROADCASTING CORPORATION
(Registrant)
Date: May 16, 1996 By: /s/ Andrew P. Schlotterbeck
Andrew P. Schlotterbeck
Vice President and Controller
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EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
1 ILX/CMS Distribution Agreement 4
<PAGE>
EXHIBIT NO. 1
ILX/CMS DISTRIBUTION AGREEMENT
AGREEMENT dated as of April 23, 1996, by and between Capital Management
Sciences, a division of Data Broadcasting Corporation ("Vendor"), and ILX
Systems, a division of Thomson Financial Services, Inc.
WITNESSETH
WHEREAS, Vendor is the owner of the service and related documentation
set forth in Schedule A (hereinafter, the "Service"); and
WHEREAS, ILX wishes to market, distribute and support the Service as
an additional service to third-party end users of its on-line information
system (hereinafter, "ILX End Users"); and
WHEREAS, Vendor is willing to grant to ILX the right and license set
forth in this Agreement,
NOW, THEREFORE, in consideration of the premises and mutual
undertakings set forth herein, the parties do hereby agree as follows.
1.1 Appointment of ILX
Subject to the forms and conditions of this Agreement, Vendor hereby
appoints ILX as the exclusive provider of the Service to ILX End Users for
a period of two years following the launch date of the Service, which date
is not to be later than October 1, 1996. ILX accepts the appointment and
agrees to sell the Service to ILX End Users. CMS agrees not to offer
services similar in use and function to the Service for distribution by
ILX competitors to their end users. ILX competitors are defined to be: ADP,
Reuters, Quotron, Track Data, Bridge Systems, Bloomberg, and possibly others
to be mutually agreed upon. If by the end of the two-year period following
the launch date of the Service, ILX's gross monthly revenues relating to
the Service do exceed $400,000 per month, such exclusivity shall continue for
an additional one-year period. If by the end of the one-year period
following the launch date of the Service, ILX's gross monthly revenues
relating to the Service do not exceed $100,000 per month, such exclusivity
shall cease and Vendor shall be free to market the Service to ILX competitors
for distribution to their end users. The parties hereto acknowledge that
this Agreement shall not prohibit Vendor from selling the Service directly
to persons who may also be ILX End Users who are already customers of
Vendor or who become customers as a result of general advertising if ILX
elects not to offer the Service to its customers.
1.2 Limitations on License
A. ILX shall not remove, alter, cover or obfuscate any copyright
notice appearing on any portion of the Service.
B. No right, title or interest in or to the Service or any
copyrights, trademarks or other proprietary rights relating to the Service
are transferred to ILX or otherwise conveyed by Vendor, and ILX shall have
no right to decompile or reverse engineer the Service.
C. Within 30 days following the last day of each calendar month, ILX
shall provide a written report to Vendor identifying each ILX End User as of
the last day of the preceding month by Firm name, a contact name and number,
and a list of users at each office location.
2. Marketing Efforts
A. ILX shall make all reasonable efforts, consistent with its
regular business practices, to represent effectively the Service and the
procedures of Vendor with respect thereto.
B. ILX shall expend such time and effort as is reasonably required
to train appropriate personnel to promote, use, and support the Service.
ILX also agrees to actively promote, consistent with its regular business
practices, the Service to its customers in connection with its marketing
efforts for the ILX on-line information system.
C. ILX shall make available to ILX End Users a reasonable level of
support and maintenance for the Service. If ILX is unable to provide the
level of support required by an ILX End User, ILX shall contact Vendor for
assistance in supporting the ILX End User.
3. Confidentiality
A. ILX acknowledges and agrees that all information marked as
confidential and proprietary which it has or will receive from Vendor
(attached hereto as Exhibit A), including, without limitation, the Service,
is confidential and proprietary to Vendor, and ILX agrees that it will
protect such information from disclosure with the same degree of care that
it uses to protect its own most valuable proprietary information and will
not disclose such information to any third party. The provisions of this
Section 3(A) shall not apply to information that is part of the public
domain or that subsequently enters the public domain through no fault of
ILX. ILX acknowledges that the software product designed by Vendor herein
utilizes, as an integral part of the various market indicators, data and
information that is part of the public domain, and that the presentation
of this data in the form and style of Vendor as shown in Exhibit A
constitutes confidential information and is proprietary in nature.
B. Vendor acknowledges and agrees that all information marked as
confidential and proprietary which it has received or will receive from ILX,
including, without limitation, customer lists, is confidential and
proprietary to ILX, and Vendor agrees that it will protect such information
from disclosure with the same degree of care that it uses to protect its
own most valuable proprietary information, and will not use or disclose such
information to any third party. The provision of this Section 3(B) shall
not apply to information that is part of the public domain or that
subsequently enters the public domain through no fault of Vendor.
4. ILX's Warranty
ILX represents and warrants to Vendor that ILX has the power and
authority to enter into this Agreement and to perform all of its obligations
under the terms of this Agreement, and further represents and warrants to
Vendor that the execution and performance of this Agreement by ILX does
not violate the provisions of any other agreement to which ILX is a party.
5. Vendor's Warranty
Vendor warrants to ILX that Vendor has the power and authority to enter
into this Agreement and has applied for copyright of the Service, and that
the Service does not infringe on any patent, trade name, trademark, trade
secret or copyright, or any other right of any third party.
6. Indemnification
Vendor and ILX agree, each at its own expense, to indemnify and save
the other party harmless from and against any and all suits or claims from
ILX End Users and third parties for any expenses, including reasonable
attorneys' fees, resulting from any adjudication that it has breached any
of its warranties, representations or obligations under this Agreement,
provided that the party seeking indemnification under this provision must
promptly notify the other party in writing of any claim that such a breach
has occurred. If the party providing indemnification under the provisions
of this Section 6 elects to defend any such action, then, as a condition to
obtaining indemnification hereunder, the party seeking indemnification
must give the indemnifying party full authority, information and assistance
for the defense of such action and the indemnifying party shall have sole
control of the defenses and all negotiations for settlement or compromise
of any such action, and shall pay all damages, expenses and fees awarded
in any final judgment which is unappealable or is not appealed within the
period for appeal, or agreed upon in any settlement agreement to which
the indemnifying party is signatory.
7. Limitation of Liability
IN NO EVENT SHALL EITHER PARTY'S AGGREGATE LIABILITY TO THE OTHER PARTY,
TO THE ILX END USERS, AND TO ANY THIRD PARTY, REGARDLESS OF THE FORM
OF CLAIM OR ACTION, EXCEED THE AGGREGATE AMOUNT PAID TO VENDOR BY
ILX UNDER THIS AGREEMENT. THE PROVISIONS OF THIS SECTION CONSTITUTE
AN ESSENTIAL PART OF THE BARGAIN BETWEEN THE PARTIES UNDERLYING
THIS AGREEMENT AND HAVE BEEN REFLECTED IN THE CONSIDERATION TO BE
PAID BY ILX TO VENDOR FOR EACH SUBSCRIBER OF THE SERVICE. UNDER NO
CIRCUMSTANCES SHALL EITHER PARTY BE RESPONSIBLE TO THE OTHER, TO
ANY ILX END USER, OR TO ANY THIRD PARTY FOR CONSEQUENTIAL DAMAGES,
LOST PROFITS OR OTHER SPECIAL OR INCIDENTAL DAMAGES, WHETHER DIRECT
OR INDIRECT, EVEN IF SUCH PARTY HAS BEEN APPRISED OF THE LIKELIHOOD OF
SAME, WHETHER BASED UPON A CLAIM SOUNDING IN CONTRACT, TORT, STRICT
LIABILITY OR OTHERWISE ARISING OUT OF THIS AGREEMENT, THE SOFTWARE
PRODUCT, AND/OR THE USE OR INABILITY TO USE THE SERVICE.
8. Term and Termination of This Agreement
This Agreement will become effective on the date of execution, and
shall be effective for an initial period of five (5) years and thereafter,
subject to the termination conditions covered in this and other clauses of
this Agreement. Either party may terminate this Agreement, for any reason
or for no reason, at the end of the initial term or any renewal thereof,
upon no less than ninety (90) days written notice to the other party.
9. Payment
ILX shall make monthly payments of all royalties owed to Vendor,
according to Schedule B, for the preceding month. Included with this payment
will be an accounting of all the current subscribers as defined in
Section 1.2(D) above, and any additions or deletions of the Service.
10.1 Termination for Cause
A. If at any time either party to this Agreement defaults in the
performance of, or otherwise breaches, this Agreement, and if such default
or breach continues for a period of 45 days after the other party has given
notice to such party specifying the nature of such default or breach and
demanding that it be remedied, then the party giving such notice shall
have the right to terminate this Agreement by giving further notice to
that effect to such party in default or breach. Termination shall be
effective 30 days after the receipt of such further notice.
B. If either party to this Agreement has been adjudicated bankrupt
or insolvent, or a petition seeking reorganization of either party under
any bankruptcy act or any similar applicable law has been filed; or if a
decree or order of a court having jurisdiction has been entered appointing
a receiver, liquidator, trustee, or assignee in bankruptcy or in insolvency
over either party or over all or substantially all of either party's
property, or providing for the windup or liquidation of either party's
affairs, then the other party shall have the right to terminate this
Agreement immediately by giving the aforementioned party notice to that
effect.
C. If either party to this Agreement institutes proceedings to be
adjudicated a voluntary bankrupt; or consents to the filing of a bankruptcy
proceeding against it; or files a petition, answer, or consent seeking
reorganization under any bankruptcy act or any similar applicable law, or
consents to the filing of any such petition; or consents to the appointment
of a receiver, liquidator, trustee, or assignee in bankruptcy or insolvency
over such party or over all or substantially all of such party's property;
or makes a general assignment for the benefit of creditors; or admits in
writing its inability to pay its debts generally as they fall due, then the
other party shall have the right to terminate this Agreement immediately by
bringing the aforementioned party notice to that effect.
10.2 Consequences of Termination
Upon termination of this Agreement, all rights granted by Vendor to
ILX shall terminate and revert to Vendor, provided, however, that ILX End
Users may continue to use any and all Services subscribed to prior to
termination as part of any System then in their possession, and ILX shall
have the right to continue to fulfill its outstanding service and other
obligations in respect of the Service to such ILX End Users. Promptly
upon termination of this Agreement for any reason, Vendor shall return,
or certify the destruction of, all copies of ILX proprietary information
in its possession or within its control, and all ILX systems documentation
relating thereto, and all other materials pertaining to ILX in its possession
or within its control (including all copies thereof); and ILX shall return,
or certify the destruction of, all copies of Vendor's proprietary information
in its possession or within its control, and all Vendor's systems
documentation relating thereto, and all other materials pertaining to
Vendor in its possession or within its control (including all copies thereof).
Neither the exercise nor the waiver by either party hereto of any
right or remedy provided hereunder shall be construed as limiting such
party's other rights and remedies at law or in equity with respect to either
different or continuing breaches by the other party.
11. Amendment and Non-Waiver
This Agreement cannot be changed, terminated, or amended except in
writing with the appropriate signatures of both parties. ILX and Vendor
shall be bound by the terms and conditions of this Agreement. No course
of conduct, action or inaction on behalf of Vendor will be deemed to be a
waiver of any of Vendor's rights. It is expressly understood and agreed
that no employee, agent or other representative of either party has any
authority to bind it with regard to any statement, representation, warranty
or other expression unless such statement, representation, warranty or
other expression is expressly included in the terms of this Agreement.
12. Relationship of Parties
Each party shall be regarded as an independent contractor and this
Agreement shall not be construed as having created a partnership, joint
venture or agency between the parties. ILX agrees not to take any action
which might encumber or expose the Service to any claim, lien or other form
of encumbrance.
13. Illegality and Unenforceability
Illegality and unenforceability of any term or condition of this
Agreement will have no effect on the remaining terms or conditions of
this Agreement.
14. Choice of Law
This Agreement shall be governed by and interpreted according to the
laws of the State of New York, without giving effect to the choice of law
provisions of such State. Any actions for enforcement of this Agreement
or interpretation of any of the provisions of this Agreement, or otherwise
arising out of or relating to this Agreement, shall be brought in the courts
of the State of New York or the Federal Courts sitting in the State of
New York. Both parties hereby expressly agree to the jurisdiction of
such courts.
15. General
A. This Agreement is not assignable by ILX without the prior
written consent of Vendor, except that ILX may assign this Agreement to
any successor in interest to all or substantially all of its assets or to
any affiliate of Thomson US, Inc. without the prior written consent of
Vendor. This Agreement is not assignable by Vendor without the prior
written consent of ILX, except that Vendor may assign this Agreement to
any successor in interest to all or substantially all of its assets or to
any affiliate of Vendor without the prior written consent of ILX.
B. This Agreement is the complete and exclusive statement of the
agreement between ILX and Vendor, and supersedes any prior agreements
between these parties.
C. Any obligations or duties that, by their very nature, extend
beyond the expiration or termination of this Agreement will survive and
remain in effect beyond the termination date, including, without limitation,
the confidentiality obligations of each party and the obligation of Vendor to
assist ILX in providing support to ILX End Users with valid support
agreements in effect on the date of such expiration or termination during
the period that such support agreements remain in effect without renewal
or extension. In no event shall Vendor be obligated to provide ILX or any
ILX End User with updates or enhancements to the Service following the
expiration or termination of this Agreement.
D. No trade usage or regular course of dealing within the computer
software industry or between ILX and Vendor shall modify, interpret,
supplement, or alter in any manner the express terms of this Agreement.
E. All notices and other communications required or permitted to
be made hereunder shall be in writing and shall be deemed effective when
delivered as follows:
If to Vendor: James A. Kaplan
Capital Management Sciences
11766 Wilshire Boulevard, Suite 300
Los Angeles, California 90025
If to ILX: Bernard A. Weinstein
ILX Systems, Inc.
111 Fulton Street
New York, New York 10038
Either party may change its address by so notifying the other party
in the manner provided herein.
IN WITNESS WHEREOF, the parties have caused their duly authorized
agents to execute this Agreement on the dates set forth below.
ILX SYSTEMS INC. CAPITAL MANAGEMENT SCIENCES
By: /s/ Bernard A. Weinstein By: /s/ James A. Kaplan
Bernard A. Weinstein, President & CEO James A. Kaplan, President
Date: 4/29/96 Date: 4/23/96
<PAGE>
EXHIBIT A
BondVu
Fixed Income Security Analytics
Subject to modification (enhancements and deletions) from time to time.
<PAGE>
EXHIBIT B
Prices & Responsibilities
Revenue Split
The revenues are to be divided 60/40, with 60% going to Vendor and 40%
going to ILX. The revenue split is irrespective of the selling party, but
rather, is determined by ILX's distribution and support of the Service.
ILX will have the option to distribute and support the Service at that
ILX End User's site and be entitled to 40% of the revenues paid by that
ILX End User, or not to do so and not be entitled to any share of the
revenues.
Vendor warrants that the revenue share offered to ILX shall be at
least as favorable or more favorable than that offered to any vendor of the
BondVu product with which Vendor may enter into a distribution agreement.
Notwithstanding the above, Smith Barney shall have the right to
select the distribution and support of the Service as it may elect.
Vendor will provide a schedule of ILX End User pricing for approval by
ILX. In no event will Vendor offer the Service to any end user for a lower
fee than that offered to ILX End Users.
CMS Responsibilities
Delivery of BondVu, including all analytics and data
Continuing product enhancements
Marketing
All direct (non labor-related) advertising and promotional expenses
including brochures, trade shows, workshops, etc.
Sales
Sales and support training for ILX personnel
Help desk support to ILX End User for BondVu
Field consulting on BondVu usage
ILX Responsibilities
Marketing, including, but not limited to, introduction to ILX clients
All direct advertising and promotional expenses
Sales support (e.g., leads)
Installation and training
Product distribution to primary site and intra-site
Billing
