Software Reseller Agreement

SOFTWARE RESELLER AGREEMENT


This SOFTWARE RESELLER AGREEMENT ("Agreement") is dated as of December 13, 1995, and is between A.D.A.M. SOFTWARE, INC., a Georgia corporation ("ADAM") and PEARSON PROFESSIONAL (AUSTRALIA) PTY LTD., an Australian company ("Reseller").


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


1. BACKGROUND. ADAM is the owner of certain Products (as defined below) consisting of computer software programs and related documentation. Reseller desires to obtain the right to distribute such Products, and ADAM agrees to grant to Reseller such right to distribute the Products in the Territory (as defined below) as set forth herein.


2. DEFINITIONS. As used in this Agreement, its Exhibits, and any amendments thereto, the terms herein will have the meaning and definition as specified below:


2.1. "Confidential Information" means information, other than Trade Secrets, that is of value to its owner, that is treated by its owner as confidential, and that is identified by its owner in writing as "Confidential" at the time of disclosure or within thirty (30) days following disclosure.


2.2. "Copies for Demonstration Purposes" means copies of the Products held by Reseller for purposes of demonstration to prospective End-Users as set forth herein and not for actual production use.


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


2.4. "End-User" means any end user which obtains a Product or Products in accordance with an End-User Agreement for the purpose of using same for internal or educational use only or for use in connection with the provision of healthcare services, and not for remarketing or distribution of any kind.


2.5. "End-User Agreement" means a written license agreement with respect to a Product in favor of an End-User, in the form attached hereto as EXHIBIT C, which may be revised from time to time in the sole discretion of ADAM.


2.6. "Intended Markets" means (i) all educational markets, including K-12, universities, graduate schools, medical schools, allied health schools, and nursing schools; 2 (ii) physicians, hospitals, clinics or other healthcare providers; or (iii) pharmaceutical and medical device manufacturers or distributors.


2.7. "License Fee" means the monetary amounts specified in EXHIBIT A to be paid by Reseller to ADAM for each of the Products ordered by Reseller as set forth herein. Such amounts are subject to change as set forth in Section 5.1 below.


2.8. "Marks" means any trademarks, service marks or tradenames of ADAM associated with the Products as designated by ADAM.


2.9. "New Products" means any new software program, including but not limited to derivative works of any Product or Products, in either object code or source code form, and any related documentation, derivative or otherwise, co-developed or co-published by the parties pursuant to a separate, written co-development or co-publishing agreement between the parties.


2.10. "Orders" means written orders of Reseller for Products identifying each Product ordered, quantities desired, and shipping and invoicing addresses. Orders shall be placed by Reseller using the Order Form attached hereto as EXHIBIT E in accordance with the provisions of Section 4.1(j).


2.11. "Products" means the specific version and release of ADAM's computer software programs, in object code, machine readable form only, and the related documentation, including, without limitation, illustrative content contained therein, which are specifically identified in EXHIBIT A, and any subsequent revisions, releases or derivatives of those specific Products listed on EXHIBIT A which are intended specifically for the Intended Markets. It is understood and acknowledged that ADAM may, from time to time, develop or co-develop other computer software products or print products which are based upon or derived from ADAM's existing Products, or which include content from such Products, but which are intended primarily for markets other than the Intended Markets, and it is further acknowledged and agreed that such other products will not constitute Products for purposes of this Agreement, By way of illustration (but not limitation), products intended primarily for the mass distribution markets (consumer products), would not be considered Products for purposes of this Agreement. The term Products will not include products which are developed or co-developed by ADAM which are intended for use with the Products (such as supplemental or auxiliary products).


2.12. "Propriety Information" means Trade Secrets and Confidential Information.


2.13. "Territory" means the countries listed on Exhibit B.


2.14. "Trade Secrets" means information which: (a) derives economic value, actual or potential, from not being generally known to, and not being ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; (b) is the


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subject of efforts that are reasonable under the circumstances to maintain its secrecy, and (c) is identified by its owner in writing as a "Trade Secret," either at the time of disclosure or within thirty (30) days following disclosure.


3. GRANT.


3.1. ADAM grants Reseller a nonexclusive, nontransferable, nonassignable and limited right to market and distribute the Products to End-Users in the Territory, solely as set forth in this Agreement.


3.2. ADAM agrees that, during the term of this Agreement, ADAM will not itself distribute the Products in the Territory (except through Reseller), nor will it authorize or grant to any third party the right to distribute any of the Products in the Territory. Notwithstanding the foregoing provisions of this Section 3.2, it is understood and agreed that ADAM has authorized (and may hereafter authorize) third party distributors to distribute copies of Products in the Territory in "bundles" with products of other software publishers (where such products are sold together for a single price or are sold together with computer equipment for a single price). ADAM will inform Reseller when such a bundled distribution will be made in the Territory. Revenues received by ADAM from any copies of Products distributed in the Territory in bundles will be credited towards Reseller's Performance Objective for the year in which the bundled copies are distributed.


3.3. Notwithstanding the provisions of Section 3.2, it is understood and agreed that, if ADAM co-develops or co-publishes a product intended for use with one or more of the Products, ADAM will have the right to authorize the third party which has co-developed or co-published such product (the "Co-Developer") to distribute such co-developed or co-published product in the Territory, as well as to distribute Products in the Territory, so long as the Products are offered by the Co-Developer in conjunction with the co-developed or co-published product. Moreover, in the event that ADAM co-develops or co-publishes a Product with a third party, such third party co-developer or co-publisher may retain the right to market and distribute such new Product in the Territory on either an exclusive or nonexclusive basis.


3.4. Except with the prior written consent of ADAM, which consent may be given or withheld in ADAM's sole discretion, Reseller will in no event distribute any of the Products to (i) a party which intends to resell or redistribute such Products outside the Territory, or (ii) to any party for ultimate use outside of the Territory.


3.5. From time to time, ADAM may, in its sole discretion, make available to Reseller for distribution in the Territory (on a non-exclusive basis) products of ADAM other than the Products (such as products intended for markets other than the Intended Markets or new products intended for use with the Products). ADAM will also notify Reseller of the terms and conditions applicable to the distribution of such other products, including license fees. If Reseller elects (in its sole discretion) to distribute such other products, the terms of this Agreement will


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apply to the distribution of such products (other than the provisions of Section 3.2 above), except to the extent otherwise provided in the terms and conditions specified by ADAM as contemplated in the preceding sentence.


3.6. The grant of rights under this Paragraph 3 is personal to Reseller and does not include the right to appoint any sub-resellers or sub-distributors without the written consent of ADAM, which consent will not be unreasonably withheld by ADAM. Any sub-reseller or sub-distributor appointed by Reseller (with the consent of ADAM) will be required to enter into a sub-reseller's agreement in the form attached as EXHIBIT F. ADAM reserves the right to request that Reseller appoint third parties specified by ADAM as sub-resellers subject to Reseller's approval (which will not be unreasonably withheld).


3.7. ADAM grants Reseller a nonexclusive, nontransferable, nonassignable and limited right and license to use the Marks in marketing the Products solely in accordance with Paragraphs 4 and 11 of this Agreement.


3.8. ADAM agrees to provide Reseller with a total of twenty-six (26) fully functioning Copies for Demonstration Purposes free of charge (ADAM will determine the actual mix of Products to be included in the total). Additional Copies for Demonstration Purposes may be purchased at a cost to be agreed upon by ADAM and Reseller. ADAM grants Reseller a nonexclusive, nontransferable, nonassignable, and limited right and license to use the Copies for Demonstration Purposes solely for purposes of demonstration to prospective End-Users and not for actual production use. Reseller will use the Copies for Demonstration Purposes only for demonstration to prospective End-Users on computer systems owned or leased by Reseller or on the computer system of a prospective End-User. In each such case, Reseller will control and limit the use of the Copies for Demonstration Purposes for the specific purpose authorized above. Within ten (10) days of the termination of this Agreement, Reseller shall, at its expense, return all Copies for Demonstration Purposes to ADAM. For the purposes of this Agreement, Copies for Demonstration Purposes will be considered Products.


4. OBLIGATIONS OF THE PARTIES


4.1. Reseller.


(a) Reseller will use its commercially reasonable
efforts to promote and market the Products to End-Users in the
Territory in accordance with terms of the Annual Plan established in
accordance with this Section. To effectively market the Products,
Reseller agrees that it will:


(i) maintain appropriate computer equipment,
as defined by the then-current ADAM recommended hardware
requirements, which will permit it to demonstrate the Products
to potential End-Users at both customer sites and


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appropriate Reseller locations (the current ADAM recommended
hardware requirements are specified in EXHIBIT G);


(ii) cause its personnel to become
proficient in the use of the Products and the demonstration of
the Products to potential End-Users;


(iii) commit sufficient resources from its
sales departments towards satisfaction of the sales
performance objectives specified in Section 4.1(b) below
(the "Performance Objectives"), and cause its sales personnel
to be certified as qualified ADAM sales representatives whose
responsibilities shall include establishing, qualifying and
maintaining sales relationships wherever possible;


(iv) commit sufficient resources from its
Sales Promotion operations to promote the Products in
accordance with the initial marketing plan specified in
EXHIBIT D (the Initial Annual Plan). Such promotions shall
include without limitation direct mail, print advertising,
direct sales calls, telemarketing and exhibition attendance.


(b) Reseller's sales performance objective for the
Territory (the "Performance Objective") for the first year of this
Agreement, commencing upon execution of this Agreement and continuing
through December 31, 1996, will be distribution of Products to
End-Users in the Territory with aggregate License Fees to ADAM (as
specified in Section 5.1 below) of U.S. $95,000. In the event that
Reseller satisfies its first year Performance Objective, the term of
this Agreement will automatically be extended for a second year. If
the Performance Objective is not satisfied, then ADAM will have the
right to terminate the Agreement upon written notice to Reseller.


If this Agreement continues for a second year,
commencing January 1, 1997 and continuing through December 31, 1997,
the parties will discuss an appropriate Performance Objective for the
second year.


(c) Sixty (60) days prior to the end of the first
year of this Agreement, Reseller and ADAM will confer to review
performance and discuss Reseller's plans for the ensuing year
concerning the sale of Products. Reseller will furnish ADAM with
Reseller's marketing and sales plans for the year, which shall include
(i) sales projections for the year (on a quarterly basis), (ii)
information concerning the computer equipment in Reseller's possession
and available for use in Product demonstrations, and (iii) information
concerning the training of Reseller's personnel in the use and
demonstration of the Products (the "Annual Plan"). Upon approval of
the Annual Plan by ADAM, such Annual Plan will be effective during the
following year. A similar procedure will be used to establish an
Annual Plan for each year thereafter for so long as this Agreement
shall


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continue in existence. The initial Annual Plan for the first year
under this Agreement is attached hereto as EXHIBIT D.


(d) Reseller will furnish ADAM, on a monthly basis,
a report and review of all sales with regard to the Products. Such
report shall include but is not limited to the name, address and
telephone number of each End-User to whom Reseller has distributed a
copy of Product during the preceding month so that each End-User can
be registered as a licensed End-User.


(e) Reseller will submit to ADAM, prior to use,
distribution, or disclosure, any advertising, promotional and
marketing materials, and publicity relating to the Products proposed
to be used by Reseller (the "Marketing Materials"). Reseller may not
use, distribute, or disclose the Marketing Materials unless approved
by ADAM's Marketing Department, which approval will not be
unreasonably withheld. ADAM shall approve or disapprove such
Marketing Materials within ten (10) business days of ADAM's receipt of
Reseller's written request to use, distribute or disclose such
Marketing Materials. In the event ADAM shall fail to approve or
disapprove within such ten (10) business day period, ADAM shall be
deemed to have approved of such use, distribution or disclosure of the
Marketing Materials by Reseller. Thereafter, the parties will
mutually agree upon an appropriate procedure to be used for prior
approval of marketing and advertising materials. In all events, all
such marketing materials will comply with the guidelines furnished by
ADAM from time to time, and with the provisions of Paragraph 11 of
this Agreement.


(f) Reseller will have the authority to market the
Products under the terms and conditions of the End-User Agreement
only. Reseller has and will exercise no authority to make any
alterations to the End-User Agreement.


(g) Reseller has and will exercise no authority to
make statements, warranties or representations concerning the Products
that exceed or are inconsistent with the marketing materials or
technical specifications provided to Reseller by ADAM. Reseller has
and will exercise no authority to bind ADAM to any undertaking or
performance with respect to the Products.


(h) Reseller may offer directly to End-Users,
separate and independent of its functions as a Reseller of ADAM
Products under this Agreement, appropriate ancillary Products or
services. The terms, conditions and charges for such Products or
services will be established by Reseller with End-Users. Reseller
will inform End-Users that ADAM's obligations are limited to those
contained in the End-User Agreement with End-Users solely and that
Products or services of Reseller are offered on Reseller's own account
and that Reseller remains solely responsible for such ancillary
Products or services.


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(i) Orders will be placed by Reseller with ADAM
utilizing the Order Form attached hereto as EXHIBIT E, and will be
subject to product availability and to acceptance by ADAM. ADAM
agrees that it will not reject any orders placed by Reseller in
accordance with this Section for the sole purpose of causing Reseller
not to meet the Performance Objectives specified in Section 4.1(b)
above. If the Product is unavailable, ADAM reserves the right to
cancel an order or to reschedule shipment from a promised shipment
date. Orders may be faxed to ADAM as specified on the Order Form.
Unless otherwise specified by Reseller, all Products will be shipped
by ADAM to Reseller's authorized and identified warehouse facilities
via air freight common carrier, F.O.B. ADAM's facilities. All freight
charges, taxes, duties and customs charges, insurance and
miscellaneous costs are to be paid by Reseller. ADAM may change the
form of the Order Form or the procedures for placing orders by
sending a copy of the new form or procedures to Reseller. Upon
receipt and acceptance by ADAM of Orders delivered to ADAM by
Reseller, ADAM will invoice Reseller as set forth in Paragraph 5
below. In the event that ADAM delivers the Products to Reseller for
delivery to End-User, Reseller will deliver the Products to such
End-User only as delivered by ADAM to Reseller (that is, in the form
of complete shrink-wrapped packages as shipped by ADAM); provided
that Reseller may place a label on the outside of the packaging,
identifying Reseller as a distributor of Products (Reseller will
submit any such label to ADAM for ADAM's review and approval prior to
any such use). In no event shall any such shrink-wrapped packages
furnished by ADAM be repackaged, unless (i) prior written consent is
obtained from ADAM, or (ii) the Products have been returned, damaged
or updated and must be re-shrink wrapped,


(j) Reseller shall not during the term of this
Agreement or at any time thereafter, directly or indirectly, copy,
reproduce, manufacture, reverse engineer, disassemble, or reverse
compile the software comprising the Products, or disclose or
distribute the design, structure, or operation of any Product or part
thereof, to any person, corporation or other entity. ADAM shall have
and retain all right, title and interest in and to all intellectual
property rights relating to the Products.


4.2. ADAM. In addition to the obligations specified elsewhere in this Agreement, ADAM also agrees:


(a) to use all commercially reasonable efforts to
obtain distribution rights in the Territory for any co-published or
third party software which was designed or intended for use in
conjunction with any Products;


(b) that where it has co-developed a Product with a
third party, and that third party retains the right to market and
distribute such new Product in the Territory, or is granted the right
to market the Products in the Territory, ADAM will use its
commercially reasonable efforts to ensure that such rights retained or
granted to the third party do not substantially impair Reseller's
business interests in the Territory;


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(c) to fully inform Reseller of all marketing and
distribution of the Products outside the Territory, and to End-Users
other than those specified in Section 2.4 within the Territory;


(d) in order to assist in the transition of
distribution to Reseller, ADAM will provide Reseller with a list of
the names and addresses of all current End-Users of Products in the
Territory (to the extent that ADAM has such information);


(e) to commit sufficient technical and financial
resources to assist Reseller in the marketing, promotion and public
relations of the Products; and


(f) to exchange Reseller's inventory stock of
Products and Copies for Demonstration Purposes for upgraded versions,
and to replace all Products and Copies for Demonstration Purposes
received from ADAM in a damaged condition, provided that Reseller
shall pay all costs of return shipping to ADAM, and ADAM shall pay all
costs of reshipping to Reseller.


5. LICENSE FEES AND PAYMENT.


5.1. Reseller will pay ADAM the License Fees specified in EXHIBIT A for each of the Products ordered by Reseller and shipped by ADAM as set forth herein at payment terms specified by ADAM. Reseller will pay ADAM within forty-five (45) days of the date of invoice therefor from ADAM. License Fees owed by Reseller will be discounted by one percent (1%) if payment is received by ADAM within fifteen (15) days of the date of invoice therefor. A two percent (2%) penalty will be added to License Fees owed by Reseller if payment is not received by ADAM within forty-five (45) days of the date of invoice therefor. ADAM reserves the right to change the License Fees specified above at any time, in ADAM's sole discretion, by providing Reseller with an amended EXHIBIT A, specifying the new License Fees. Any such change in the License Fees will be effective thirty (30) days after the date such amended EXHIBIT A is provided to Reseller.


5.2. All payments from Reseller to ADAM hereunder will be in U.S. Dollars. Reseller will pay ADAM by means of a company check, bank check or wire transfer to ADAM's bank.


5.3. The amounts due to ADAM as set forth herein are net amounts to be received by ADAM, exclusive of all taxes, and are not subject to offset or reduction because of any costs, expenses, or liabilities incurred by Reseller or imposed on ADAM in the performance of this Agreement or otherwise due as a result of this Agreement.


5.4. Reseller will be responsible for and will pay directly, any and all taxes, duties and charges incurred in the performance of this Agreement, including, but not limited to, sales and use taxes, withholding taxes, duties and charges imposed by federal, state or local governmental


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authorities in the United States or elsewhere, but excluding U.S. corporate income taxes of ADAM. Reseller will also be responsible for payment of any license fee, assessment, duty, tax, levy, or similar charge imposed by any foreign government as a result of this Agreement or the transactions contemplated by the parties hereunder.


5.5. Reseller will set the license fees that it charges End-Users for copies of Products distributed by Reseller pursuant to this Agreement, in the sole discretion of Reseller. Reseller will furnish a copy of its price list to ADAM (and a copy of any updates to the price list as changes are made by Reseller from time to time).


6. NONDISCLOSURE AND CONFIDENTIALITY


6.1. Each party hereunder may disclose to the other party certain Trade Secrets and Confidential Information. For purposes of this Paragraph 6, "Owner" refers to the party disclosing Trade Secrets or Confidential Information hereunder, whether such party is ADAM or Reseller, and "Recipient" refers to the party receiving any Trade Secrets or Confidential Information hereunder, whether such party is ADAM or Reseller.


6.2. Recipient agrees to hold the Proprietary Information of Owner in strictest confidence and not to, directly or indirectly, copy, reproduce, distribute, manufacture, duplicate, reveal, report, publish, disclose, cause to be disclosed, or otherwise transfer the Proprietary Information of Owner to any third party, or utilize the Proprietary Information of Owner for any purpose whatsoever other than as expressly or impliedly contemplated by this Agreement. With regard to the Trade Secrets, this obligation will continue for so long as such information constitutes a trade secret under applicable law. With regard to the Confidential Information, this obligation will continue for the term of this Agreement and for a period of three (3) years thereafter. The foregoing obligations will not apply if and to the extent that:


(a) Recipient establishes that the information
communicated was already known to Recipient, without obligations to
keep such information confidential, at the time of the Recipient's
receipt from Owner, as evidenced by documents in the possession of
Recipient prepared or received prior to disclosure of such
information;


(b) Recipient establishes that the information
communicated was received by Recipient in good faith from a third
party lawfully in possession thereof and having no obligation to keep
such information confidential; or


(c) Recipient establishes that the information
communicated was publicly known at the time of Recipient's receipt
from O ...