I would like to know whether iText 5.4.2 is a open source. I know it is described here well:
http://itextpdf.com/terms-of-use/index.php
But I am confused as the page also says this:
Buying such a license is mandatory as soon as you develop commercial activities distributing the iText software inside your product or deploying it on a network without disclosing the source code of your own applications under the AGPL license. These activities include: offering paid services to customers as an ASP, serving PDFs on the fly in the cloud or in a web application, shipping iText with a closed source product.
AGPL stands for Affero GPL.
It basically says, when you want to sell a software product that includes iText or use iText in any commercial webservice, than you need to buy a license.
If you do an open source (with an approriate license) or private project, than you are fine and don't need to buy a license.