Localization Agreement

LOCALIZATION AGREEMENT


THIS LOCALIZATION AGREEMENT (this "Agreement") is dated June 7, 1996, and is between A.D.A.M. SOFTWARE, INC., a Georgia corporation ("ADAM"), and ZEMI CORP. ("ZEMI").


For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


I. BACKGROUND. ADAM is the owner of a certain Product (as defined below) consisting of multimedia computer software programs and related user documentation. Zemi desires an exclusive, nontransferable, nonassignable and limited right and license to translate and localize such Product into a Japanese language version of the Product as set forth in this Agreement, and ADAM agrees to grant to Zemi such right and license on the terms and conditions set forth in this Agreement.


2. DEFINITIONS. The capitalized terms used in this Agreement and its Exhibits have the meanings and definitions specified below:


2.1 "Alpha Copy" means a copy of the Product in which (i) all user interface items, including but not limited to, menus, dialog boxes, messages and other text strings in the anatomy portion of the Product are translated; (ii) one or more animations are completely translated, including graphics, sounds and videos; (iii) one or more sections of the multimedia portions of the Product (for example, chapters of the scrapbook if the Product has a scrapbook) are completely translated, including but not limited to, graphics, sounds and video.


2.2 "Beta Copy" means a copy of the Product in which all translatable elements have been translated, including but not limited to, all animations, audio, video, anatomical terms, user interface items, such as dialog boxes and textual messages, online help and installer program. The Product must be fully installable and functioning, with no untranslated elements.


2.3 "Business Day" means a day, other than a Saturday, Sunday, or a day on which Zemi is closed for business pursuant to Zemi's annual list of holidays.


2.4 "Effective Date" means the date on which this Agreement is executed by both parties through their authorized representatives.


2.5 "Localization Costs" means the total out of pocket costs and expenses incurred by Zemi in producing the Localized Version of the Product which the parties have agreed 2


will be One Hundred Thousand United States Dollars (U.S. $100,000) for purposes of this Agreement.


2.6 "Localized Version" has the meaning specified in Section 3.1.


2.7 "Marks" means any trademarks, service marks or tradenames of ADAM associated with the Product (as defined below), as designated by ADAM.


2.8 "MITC" means the Matsushita Inter-Techno Co. Ltd.


2.9 "Product" means A.D.A.M.-The Inside Story, Version 2.0, including related user documentation.


2.10 "Release Candidate" means a version of the Product which is fully installable, completely functional, completely translated, with all identified significant errors (bugs) addressed and resolved. The Release Candidate becomes the Golden Master after a thorough testing process has identified all significant program problems, and those problems have been addressed and resolved to the satisfaction of ADAM.


3. GRANT.


3.1 ADAM hereby grants Zemi an exclusive, nontransferable, nonassignable and limited right and license to translate and localize the Product into a Japanese language version (the "Localized Version") of the Product, solely as set forth in this Agreement. Zemi acknowledges and agrees that the localization rights granted under this Agreement are limited solely to the right to produce a localized Japanese language adaptation of the English language version of the Product.


3.2 ADAM hereby grants Zemi a nonexclusive, nontransferable, nonassignable and limited right and license to use and incorporate the Marks and any symbols or artwork of ADAM's in the Localized Version of the Product solely in accordance with Section 10,


3.3 Except as specifically set forth in the Agreement, no express or implied license or right of any kind is granted to Zemi regarding the Product or the Marks, including, but not limited to, any right to know, use, produce, receive, reproduce, copy, market, sell, distribute, transfer, translate, modify, adapt, disassemble, decompile, or reverse-engineer the Product or create derivative works based on the Product or any portions thereof, or obtain possession of any source code or other technical material relating to the Product.


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4. PRODUCTION OF A LOCALIZED
VERSION OF THE PRODUCT BY ZEMI.


4.1 Zemi shall take any and all steps required in order to create the Localized Version of the Product in accordance with the specifications set forth in Exhibit A and the provisions of this Agreement, including without limitation, this Section 4.


4.2 Zemi shall determine the level of translation necessary to localize the Product. Text, dialogue and graphic files shall be translated by Zemi into the Japanese language and revoiced. Zemi will be responsible for engaging appropriate Japanese medical advisors as necessary to ensure the medical accuracy of all translations.


4.3 Subject to the prior approval of ADAM, Zemi may redesign the outer packaging of the Product and the CD jewel case liners, and translate all verbiage to the Japanese language. ADAM will use its commercially reasonable efforts to respond to any such proposed packaging materials/jewel case liners submitted by Zemi for ADAM's approval within ten (10) Business Days of ADAM's receipt of such materials from Zemi.


4.4 The translation of the Product will be performed by Zemi in accordance with the provisions and the timetables specified in Exhibit A and the provisions of this Section 4.4:


(a) Upon receipt of all translatable elements of the Product, Zemi will translate all translatable files included in such elements, including without limitation, anatomical terms, menus and dialog boxes, animations, graphics, audio tracks, video, online help system, textual content, installation program, user's guide and packaging. As soon as practicable following receipt of all translatable elements of the Product from ADAM, Zemi will deliver to ADAM system anatomy source images (with translated structure name labels) and translated vocabulary list.


(b) Zemi will compile the translated system anatomy images and vocabulary list delivered by ADAM with the pixel level recognition (PLR) data into ADAM's proprietary format in accordance with the timetable set forth in Exhibit A.


(c) Zemi will deliver to ADAM an Alpha Copy of the Localized Version of the Product, including packaging and jewel case liners, together with a translated copy of each translatable file, as soon as practicable after delivery by ADAM to Zemi of the updated PLR files described in paragraph (b) above. ADAM may, but shall not be obligated to, review such Alpha Copy and forward any comments to Zemi not later than (1O) Business Days following ADAM's receipt of the Alpha Copy.


(d) Zemi will make any changes to the Alpha Copy reasonably requested by ADAM and incorporate such changes in the Beta Copy of the Localized Version. Zemi will


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deliver to ADAM a Beta Copy of the Localized Version of the Product, including packaging and jewel case liners, in accordance with the timetable set forth in Exhibit A following delivery by ADAM to Zemi of all translatable elements of the Product. ADAM may, but shall not be obligated to, review such Beta Copy and will forward any comments to Zemi not later than fifteen (15) Business Days following ADAM's receipt of the Beta Copy. If ADAM has not responded to the Beta Copy within such fifteen (15) Business Day period, the Beta Copy will be deemed to be approved by ADAM.


(e) Zemi will incorporate any changes to the Beta Copy reasonably requested by ADAM and will deliver the Release Candidate to ADAM in accordance with the timetable set forth in Exhibit A, together with copies of all translated files. ADAM will review the Release Candidate and will request changes (or approve the Release Candidate) within approximately ten (10) Business Days.


(f) Once Zemi has made all requested changes to the Release Candidate and the Release Candidate has been approved by ADAM, Zemi will prepare the Golden Master and deliver it to ADAM.


5. ADAM'S OBLIGATIONS.


5.1 As soon as reasonably practicable after execution of this Agreement, ADAM will globalize the Product and shall deliver the following materials to Zemi:


(a) Three (3) copies of all CD jewel case liners (including user instructions);


(b) Copies of all translatable elements of the Product (written information about specific length of text to be considered by the way of translation/localization shall also be included);


(c) In case of included voicing in the Product, where available, copies of the script, including wordings, characters, technical information about the recording, and recording of the original voicing, and


(d) The film for the artwork for the packaging.


5.2 ADAM and MITC will each fund one-half of the Localization Costs associated with producing the Localized Version of the Product. The Localization Costs will be paid by ADAM and MITC in accordance with the payment schedule set forth on Exhibit A attached hereto. Zemi acknowledges and agrees that ADAM shall have no obligation to fund or pay any portion of MITC's share of the Localization Costs. Notwithstanding the foregoing, if MITC fails to pay any portion of its share of the Localization Costs, ADAM will pay Zemi an amount equal to fifteen percent (15%) per unit of the wholesale price of the Localized Version


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sold in Japan during the term of this Agreement until such time as Zemi has recovered that portion of the Localization Costs that MITC failed to pay.


5.3 If ADAM releases any new consumer product after the date of this Agreement, the parties will review such product and determine whether such product would be appropriate for localization into a localized version of such product. If ADAM and Zemi mutually agree that such Product would be appropriate for the Japanese market, then the parties will negotiate, in good faith, the terms under which Zemi will localize such consumer product.


5.4 ADAM will make available technical support from its engineering department to assist in Zemi's translation of the Product in accordance with Section 4, up to a maximum of 40 hours, at no charge to Zemi. Any work in excess of 40 hours of technical support will be charged to Zemi at the rate of U.S. $100 per hour.


6. OWNERSHIP OF LOCALIZED VERSION.


6.1 Zemi acknowledges and agrees that ADAM shall own the copyright of the translation and localization of the Product, the documentation and packaging used in connection therewith and all packaging and other material adapted by Zemi in connection with the production of the Localized Version of the Product in accordance with this Agreement. To the extent that, pursuant to applicable law, Zemi has any right, title or interest in or to the copyright of the Localized Version of the Product or any other material adapted by Zemi in accordance with this Agreement, Zemi hereby grants and assigns to ADAM, all right, title and interest whatsoever, throughout the world, in and to the copyright of the Localized Version of the Product and all other material adapted by Zemi in accordance with this Agreement.


6.2 It is expressly acknowledged and understood that the understanding of the parties that ADAM owns all right, title and interest in and to the Localized Version of the Product (including, without limitation, all copyright interest) is fundamental to this Agreement, and that ADAM would not enter into this Agreement (including, without limitation, grant the rights contemplated under Section 3) in the absence of the agreements specified in this Section 6.


6.3 Zemi agrees to take all actions required under this Section 6 and further covenants and agrees that it will never assert (or permit any other party to assert on its own behalf) any right, title or interest (including, without limitation, copyright) in or to the Product or the Localized Version of the Product, nor will it take any actions otherwise inconsistent with the understandings and agreements set forth in this Section 6.


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7. WARRANTIES.


7.1 ADAM warrants that ADAM has not granted and will not grant any rights in the Product to any third party inconsistent with this Agreement. ADAM further warrants that there exists no fact or event which would preclude ADAM from entering into this Agreement or carrying out its obligations under this Agreement, and ADAM has the authority to grant the rights with respect to the Product to Zemi provided for in this Agreement.


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