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EXHIBIT 10.19
*** Text Omitted and Filed Separately
CONFIDENTIAL TREATMENT REQUESTED
Under 17 C.F.R. Sections 200.80(b)(4)
and 230.406
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "Agreement") is entered into as of this
10th day of September, 1999 between First Colony Life Insurance Company, a
Virginia corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000 ("Owner"), and ChannelPoint, Inc. a Delaware
corporation having its principal place of business at 00000 Xxxxxxxx Xxxxx,
Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxx 00000 ("Purchaser").
WITNESSETH:
WHEREAS, subject to those exceptions disclosed in this Agreement, Owner
owns all right, title, and interest in and to that certain computer software
identified as "p.d.,q." (including source and object code, documentation and
related documentation, data and information used by Owner as of the Closing Date
to provide support for any of the above) as more fully set forth in Exhibit A
attached hereto (the "Programs");
WHEREAS, the Programs contain certain software components duly licensed
to Owner for inclusion in the Programs pursuant to the agreements identified in
Exhibit B attached hereto (the "Remarketing Agreements"), which are to be
assigned to, and assumed by, Purchaser pursuant to this Agreement;
WHEREAS, Owner has granted rights in copies of the Programs to third
parties pursuant to the end-user license agreements identified in Exhibit C
attached hereto (the "End-User Agreements"), which are to be assigned to, and
assumed by, Purchaser pursuant to this Agreement;
WHEREAS, Owner desires to sell, assign, grant, convey, and transfer the
Programs to Purchaser, and Purchaser desires to buy and acquire the Programs, in
accordance with the terms and conditions of this Agreement; and
WHEREAS, Owner desires to sell to Purchaser certain hardware used by
Owner to develop and maintain the Programs, as set forth in Exhibit D attached
hereto, including the specifications and documentation related thereto (the
"Hardware"), and Purchaser desires to buy and acquire the Hardware in accordance
with the terms and conditions of this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Owner and Purchaser, intending to
be legally bound, hereby agree as follows:
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ARTICLE 1. CONVEYANCE OF RIGHTS / OWNERSHIP
1.1. PROGRAMS. Effective as of the Closing Date, subject to ARTICLE 13 and
to the rights reserved and retained pursuant to ARTICLE 4, Owner hereby
agrees to transfer, grant, convey, assign, and relinquish exclusively to
Purchaser all of Owner's right, title, and interest in and to both the
tangible and the intangible property constituting the Programs, in
perpetuity (or for the longest period of time otherwise permitted by law),
including the following corporeal and incorporeal incidents to the
Programs, which shall be included within the meaning of the term "Programs"
as used herein (with the Programs and all intellectual property rights
related thereto collectively referred to herein as the "Technology"):
1.1.1. Title to and possession of the Programs, their component parts,
and all documentation relating thereto, possessed or controlled by
Owner, which are to be delivered to Purchaser pursuant to ARTICLE 3 of
this Agreement;
1.1.2. All copyright interests owned or claimed by Owner pertaining to
the Programs, including without limitation the U.S. Registered
Copyright Numbers set forth in Exhibit A together with all other
copyright interests accruing by reason of international copyright
conventions;
1.1.3. All right, title, and benefit of Owner in and to the
inventions, discoveries, improvements, ideas, trade secrets, know-how,
confidential information, and all other intellectual property owned by
Owner and embodied in the Programs;
1.1.4. All right, title and interest in and to the trademarks and the
respective registrations thereof and pending applications therefor in
the United States Patent and Trademark Office set forth in Exhibit E
attached hereto, together with the goodwill of the business symbolized
by such trademarks, the right to recover for any past, present or
future infringement thereof and the right to file foreign applications
under any convention or treaty; and
1.1.5. All of the right, title, interest, and benefit of Owner in, to,
and under the Acquisition Agreement (as defined in ARTICLE 7), the
Cybertek Agreement (as defined in ARTICLE 8), the Development Licenses
and the Maintenance Agreements (as defined in ARTICLE 10), the
Remarketing Agreements identified in Exhibit B and Owner's rights as
licensor under the End-User License Agreements identified in Exhibit C
(collectively, the "Assigned Agreements").
1.2. HARDWARE. Effective as of the Closing Date, Owner hereby agrees to
transfer, convey, assign and sell to Purchaser all right, title and
interest in and to the Hardware.
1.3. PURCHASE PRICE. As consideration for the assets, rights and ownership
interests acquired by Purchaser hereunder (the "Assets"), on the Closing
Date Purchaser shall issue and deliver to Owner One Million Fifty Eight
Thousand Four Hundred Fifty
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(1,058,450) shares of Series D Preferred Stock of Purchaser (the "Shares,"
and such Shares constituting the "Purchase Price").
1.4. PURCHASE PRICE ALLOCATION. The allocation of the Purchase Price shall
be mutually agreed to by Owner and Purchaser within sixty (60) days after
the Closing Date (as hereinafter defined). The parties acknowledge that
such allocation will fairly reflect the fair market value of the Assets,
and will use such allocation in reporting for all federal, state and local
tax purposes.
1.5. TAXES. The parties' respective responsibilities for taxes arising
under or in connection with this Agreement shall be as follows:
1.5.1. Each party shall be responsible for any personal property taxes
on property it owns or leases, for franchise and privilege taxes on
its own business, and for taxes based on its own net income or gross
receipts.
1.5.2. Owner shall xxxx Purchaser and Purchaser shall be liable for
applicable sales, use, excise, gross receipts, value-added, services,
consumption and other taxes (collectively, "Taxes") which are imposed
on the transfer of software, goods and services to Purchaser
hereunder; provided, however, that Owner shall not xxxx Purchaser and
shall bear no responsibility for such applicable Taxes if Purchaser
provides Owner with a properly completed resale or exemption
certificate with respect to any qualifying software, good or services.
1.6. NO ASSUMPTION OF LIABILITIES. Under this Agreement, Purchaser does not
assume, undertake or agree to perform, pay or discharge any of Owner's
liabilities (including liabilities for taxes and related interest and
penalties, other than as set forth in Section 1.5), obligations or the
like, except for any obligations to be performed under the Assigned
Agreements after the Closing Date.
ARTICLE 2. CLOSING
2.1. CLOSING. The closing of the transactions provided for herein (the
"Closing") shall take place at the offices of Weil, Gotshal & Xxxxxx LLP in
New York, New York, at 3:00 p.m. within five (5) business days after the
expiration of the applicable waiting period under the HSR Act (as
hereinafter defined) (the "Closing Date"), or such other place, time and
date as the parties may agree.
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ARTICLE 3. DELIVERY
3.1. PROGRAMS. On the Closing Date, Owner, at its own expense, shall
deliver to Purchaser: (a) a master copy of the Programs (in both source and
object code form) in electronic form to a location designated by Purchaser;
and (b) all system and user documentation pertaining to the Programs,
including, but not limited to, the p.d.,q. 2000 Training Manual version 3.0
and any design or development specifications in Owner's possession
(collectively, the "Documentation"), and all error reports, and related
correspondence and memoranda.
3.2. HARDWARE. Owner, at its own expense, shall deliver to Purchaser the
Hardware, except for the Hardware specified in Exhibit D as located on the
premises of third parties, in accordance with the timetable agreed upon in
the Transition Plan under Section 9.1.2.
ARTICLE 4. RIGHTS RETAINED OR RESERVED BY OWNER
4.1. RESERVATION. Notwithstanding any other provision of this Agreement,
Owner reserves and retains for its own benefit and the benefit of its
Affiliates (as hereinafter defined), and Purchaser grants Owner and its
Affiliates, effective as of the Closing Date, the non-exclusive,
royalty-free, non-assignable right and license (with no right to
sublicense) to copy, modify, and distribute internally the Programs as they
exist as of the Closing Date, and subject to the limitations set forth in
Section 4.2 below, to continue to use the Programs as they have been used
in the business of Owner and its Affiliates as of the Closing Date, in
perpetuity (or for the longest time permitted by law). In addition, Owner
and its Affiliates may retain copies of the Programs (in both object code
and source code form, and including all Documentation) solely for the
purposes set forth in this Section 4.1. Notwithstanding anything herein to
the contrary, the Programs, including its source code and all
Documentation, shall be considered Purchaser's Confidential Information for
purposes of ARTICLE 16 hereof. For the purposes of this ARTICLE 4, an
"Affiliate" of Owner is any entity which Owner controls, is controlled by,
or is under common control with, where "control" means the direct or
indirect ownership or control of more than fifty percent (50%) of an
entity's total outstanding voting power.
4.2. LICENSE RESTRICTIONS. The rights retained by Owner and its Affiliates
pursuant to Section 4.1 above shall be solely for their own internal
business purposes, and Owner and its Affiliates shall not, on or after the
Closing Date, directly or indirectly, on their own behalf or on behalf of
any person, firm, partnership, joint venture, corporation, business entity
or any other third party, (a) sell, license, sublicense, grant, transfer,
distribute or otherwise dispose of the Programs or the Documentation or (b)
use the Programs to provide services to any third party that is active in
the brokerage business or could be construed to be a "Broker General
Agent," "broker," "field agent" or "Managing General Agency," without
obtaining the prior consent of ChannelPoint.
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ARTICLE 5. REPRESENTATIONS AND WARRANTIES
5.1. OWNER REPRESENTATIONS AND WARRANTIES.
5.1.1. Owner represents and warrants that it is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, with its principal place of business as
indicated in the first paragraph of this Agreement.
5.1.2. Owner represents and warrants that the execution, delivery and
performance of this Agreement by Owner and all instruments and
documents to be delivered by Owner hereunder: (a) are within the
corporate power of Owner; (b) have been duly authorized by all
necessary or proper corporate action; (c) are not in contravention of
any provision of the certificate of incorporation or bylaws of Owner;
(d) will not violate any law or regulation or any order or decree of
any court of governmental instrumentality; (e) will not conflict with,
constitute a breach of, or in any way violate the terms of any
indenture, mortgage, deed of trust, lease, arrangement, understanding
or agreement, or other instrument to which Owner is a party or by
which Owner or any of its property is bound, to the extent any such
conflict, breach or violation would have a material adverse effect on
the financial condition of Owner or on the ability of Owner to perform
its obligations hereunder, or would have a material adverse effect on
the value of the Programs; and (f) do not require any filing or
registration with or the consent or approval of, any governmental
body, agency, authority or any other person, which has not been made
or obtained previously (excluding (i) any filings under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), and (ii) any filings Purchaser may desire to make with the
United States Copyright Office, Patent and Trademark Office or other
governmental agency to reflect its acquisition of title to certain
intellectual property assets hereunder). This Agreement has been duly
executed and delivered by Owner and constitutes a legal, valid and
binding obligation of Owner, enforceable against Owner in accordance
with its terms, except as such enforceability may be limited by
applicable insolvency and other laws affecting creditors' rights
generally or by the availability of equitable remedies.
5.1.3. Owner represents and warrants that the relevant portions of the
Programs shall substantially conform in all material respects to the
general description, features and functionality set forth in the
"p.d.,q. 2000 Training Manual, Version 3.0," or in the "p.d.,q. Lite
Version 4.0 User Manual."
5.1.4. Owner represents and warrants that neither the Programs nor the
Hardware contain any copy protection device, computer virus, Trojan
horses, worm or other software routines that are intended to disable,
erase, or otherwise harm the Programs or Hardware or other software or
hardware used with the Programs or Hardware.
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5.1.5. Owner has previously delivered to Purchaser certain unaudited
financial schedules attached hereto as Exhibit J detailing certain
historical costs (collectively, the "Financial Schedules"). The
Financial Schedules are accurate and complete in all material respects
for the periods referred to therein, and are consistent with the books
and records of the Owner.
5.1.6. The Assigned Agreements collectively constitute all of the
agreements, contracts, understanding or arrangements necessary to
enable Purchaser to support, distribute, operate and commercially
exploit the Programs in the manner in which the Programs are currently
being supported, distributed, operated and commercially exploited.
Owner has no knowledge of any basis upon which any party to any
Assigned Agreement (other than the agreements set forth in Exhibit I
hereto) may object to (a) the assignment to Purchaser of any right
under such Assigned Agreement, or (b) the delegation to or performance
by Purchaser of any obligation under such Assigned Agreement. Except
for the End-User Agreements marked "N/A" in Exhibit C, Owner has made
available to Purchaser or its advisers true and correct copies of the
Assigned Agreements for review.
5.1.7. With respect to the Technology and the Hardware, no action,
suit, proceeding or investigation of any nature (including, but not
limited to, claims that the Technology or Hardware infringe any
patent, trade secret or other intellectual property right of any third
party) is pending or, to the best of Owner's knowledge, threatened in
writing against Owner, nor, to the best knowledge of Owner, is there
any basis therefor. There is no judgment, decree, injunction, rule or
order of any court, governmental department, commission agency,
instrumentality or arbitrator or other similar ruling outstanding
against Owner affecting the Programs or the Hardware.
5.1.8. Owner represents and warrants that Purchaser shall receive,
pursuant to this Agreement as of the Closing Date, complete and
exclusive right, title, and interest in and to all tangible and
intangible property rights existing in the Programs subject only to
the rights reserved and retained pursuant to ARTICLE 4 of this
Agreement, and subject to the rights of third parties as set forth in
ARTICLE 6 (concerning software components licensed from third parties
and contained in the Programs), ARTICLE 7 (concerning software
components purchased from a third party and contained in the Programs)
ARTICLE 8 (concerning copies of the Programs licensed to end-users)
and ARTICLE 10 (concerning software used in the development and
maintenance of the Programs) of this Agreement. Subject to the
foregoing exceptions, Owner represents and warrants that it has
developed the Programs entirely through its own efforts for its own
account and that the Programs and the Hardware are free and clear of
all liens, claims, encumbrances, security interests, rights, or
equities whatsoever of any third party.
5.1.9. The Technology includes all proprietary rights, patent rights
of which Owner is aware, copyrights, trade secrets, and/or other
intellectual property rights
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required to reproduce, develop, maintain, support, distribute, operate
and create object versions of the Programs as currently operated by
Owner and to fulfill all outstanding obligations contained in the
End-User Agreements (collectively the "Intellectual Property").
5.1.10. Owner represents and warrants that all registered copyrights,
trademarks and trademark applications which are owned by Owner and are
used by Owner in connection with the Technology are listed in Exhibit
A (with respect to copyrights) and Exhibit E (with respect to
trademarks). All such trademarks and trademark applications have been
duly registered in, filed in or issued by the United States Patent and
Trademark Office or the corresponding offices of other countries, and
have been properly maintained and renewed in accordance with all
applicable provisions of law and administrative regulations in the
United States and each such country, and all such registered
copyrights have been duly registered in, filed in or issued by the
United States Copyright Office or the corresponding offices of other
countries. Owner has not prepared or filed any patent applications,
and no patents have been issued to Owner in any country, relating to
the Technology.
5.1.11. Owner represents and warrants that, except for royalties
payable under the Remarketing Agreements and Development Licenses and
sums payable under the Acquisition Agreement, Owner is not under any
obligation to pay any third party royalties or other fixed or
contingent amounts with respect to the Technology or the Intellectual
Property, including, but not limited to, any royalties or other fixed
or contingent amounts based upon the sale, license, distribution or
other use or exploitation of the Technology or the Hardware.
5.1.12. Owner represents and warrants that the Programs do not
infringe, conflict with or violate any intellectual property right of
any kind (including, without limitation, any trade secret right) or
similar rights of any third party; provided, however, that with
respect to patent rights, Owner represents and warrants only that the
Programs do not infringe, conflict with or violate the claims of any
patent existing and issued as of the date hereof. Owner is not aware
of any violation or infringement by any person of any Intellectual
Property nor is the Intellectual Property subject to any outstanding
order, decree, judgment or stipulation. Owner represents and warrants
that it has taken and will take all reasonable security measures to
protect the secrecy, confidentiality and value of all Intellectual
Property transferred in accordance with this Agreement. Owner agrees
to promptly inform the Purchaser of any such claim of which it becomes
aware arising or threatened in the future with respect to the
Intellectual Property or any part of the Technology or the Hardware.
5.1.13. Owner represents and warrants that, except with respect to
portions of the Programs supplied by third parties as set forth in
ARTICLE 6 (concerning software components licensed from third parties
and contained in the Programs), ARTICLE
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7 (concerning software components purchased from a third party and
contained in the Programs) and ARTICLE 10 (concerning software used in
the development and maintenance of the Programs) of this Agreement,
all personnel, including employees, agents, consultants, and
contractors, who have contributed to or participated in the conception
and development of the Technology either (a) have been party to a
for-hire relationship with Owner that has accorded Owner full,
effective, and exclusive original ownership of all tangible and
intangible property thereby arising with respect to the Technology or
(b) have executed appropriate instruments of assignment in favor of
Owner as assignee that have conveyed to Owner full, effective, and
exclusive ownership of all tangible and intangible property thereby
arising with respect to the Technology. Owner has made available to
Purchaser or its advisers true and correct copies of all such
instruments of assignment for review.
5.1.14. Owner represents and warrants that the Programs record, store,
process, calculate and present calendar dates falling on and after
(and, if applicable, spans of time including) January 1, 2000, and
will calculate any information dependent on or relating to such dates
in the same manner (and with the same functionality, data integrity
and performance) as the Programs record, store, process, calculate and
present calendar dates on or before December 31, 1999 or any
information dependent on or relating to such dates. None of the
Programs will lose functionality with respect to the introduction of
records containing dates falling on or after January 1, 2000.
5.1.15. Owner represents and warrants that upon delivery of the
Hardware to Purchaser and payment in full of the Purchase Price,
Purchaser shall obtain good and marketable title to the Hardware, free
from any lien or encumbrance (except for such liens or encumbrances as
may be imposed by Purchaser's creditors).
5.1.16. The representations and warranties set forth in Sections 4.2
(other than subsection (g) thereof) and 4.3 of the Purchase Agreement
dated the date hereof between Purchaser and General Electric Capital
Corporation (the "Purchase Agreement") are hereby incorporated by
reference, with Owner hereby making the representations and warranties
made by General Electric Capital Corporation in such Sections of the
Purchase Agreement. Owner further represents and warrants that the
office of Owner in which its investment decision was made is located
at the address of Owner first set forth in this Agreement.
5.2. PURCHASER REPRESENTATIONS AND WARRANTIES.
5.2.1. Purchaser represents and warrants that it is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, with its principal place of business as indicated
in the first paragraph of this Agreement.
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5.2.2. Purchaser represents and warrants that the execution, delivery
and performance of this Agreement by Purchaser and all instruments and
documents to be delivered by Purchaser hereunder: (a) are within the
corporate power of Purchaser; (b) have been duly authorized by all
necessary or proper corporate action; (c) are not in contravention of
any provision of the certificate of incorporation or bylaws of
Purchaser; (d) will not violate any law or regulation or any order or
decree of any court of governmental instrumentality; (e) will not
conflict with, constitute a breach of, or in any way violate the terms
of any indenture, mortgage, deed of trust, lease, agreement, or other
instrument to which Purchaser is a party or by which Purchaser or any
of its property is bound, to the extent any such conflict, breach or
violation would have a material adverse effect on the financial
condition of Purchaser or on the ability of Purchaser to perform its
obligations hereunder; and (f) do not require any filing or
registration with or the consent or approval of, any governmental
body, agency, authority or any other person, which has not been made
or obtained previously (excluding (i) any filings under the HSR Act,
and (ii) any filings Purchaser may desire to make with the United
States Copyright Office, Patent and Trademark Office or other
governmental agency to reflect its acquisition of title to certain
intellectual property assets hereunder). This Agreement has been duly
executed and delivered by Purchaser and constitutes a legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms, except as such enforceability may be
limited by applicable insolvency and other laws affecting creditors'
rights generally or by the availability of equitable remedies.
5.2.3. The rights, preferences, privileges and restrictions of the
Shares are as stated in the Restated Certificate of Incorporation of
the Purchaser (the "Restated Certificate") attached as Exhibit B to
the Purchase Agreement. The shares of the Purchaser's Common Stock to
be issued upon conversion of the Shares (the "Conversion Shares") have
been duly and validly reserved for issuance. When issued in compliance
with the provisions of this Agreement and the Restated Certificate,
the Shares and the Conversion Shares will be duly and validly issued,
fully paid and nonassessable, and will be free of any preemptive
rights, liens, encumbrances or other restrictions on transfer;
provided, however, that the Shares and the Conversion Shares may be
subject to restrictions on transfer under state and/or federal
securities laws as set forth in the Purchase Agreement as otherwise
required by such laws at the time a transfer is proposed. The
representations of Purchaser as to its capitalization set forth in
Section 3.2 of the Purchase Agreement are hereby incorporated by
reference.
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ARTICLE 6. THIRD-PARTY SOFTWARE COMPONENTS
6.1. THIRD PARTY AUTHORIZATION. Owner represents and warrants that it has
duly obtained the right and license to use, copy, modify, and distribute
the software components contained in the Programs pursuant to the
Remarketing Agreements identified in Exhibit B and the Acquisition
Agreement; that the Programs contain no other software components in which
any third party may claim superior or joint ownership; and that the
Programs are not derivative works of any other software programs not owned
in their entirety by Owner.
6.2. REMARKETING AGREEMENTS. Owner represents and warrants that (a) each
Remarketing Agreement is in full force and effect in accordance with its
terms without modification or amendment and without default by either party
thereto; (b) no condition exists which, with or without the giving of
notice or passage of time, would constitute a breach under any Remarketing
Agreements, (c) each Remarketing Agreement grants Owner the full and
effective right and license to use, copy, modify, display and distribute
the pertinent software components as part of the Programs; (d) each
Remarketing Agreement provides only for the payment of fees and royalties
that, to the extent accrued as of the Closing Date, will have been paid in
full; (e) except for any Remarketing Agreement specifically identified in
Exhibit I hereto, each Remarketing Agreement is freely assignable to and
assumable by Purchaser pursuant to this Agreement, without the requirement
of obtaining any consent or approval or giving any prior or subsequent
notice; and (f) Owner has not received notice that any party to any
Remarketing Agreement intends to terminate or exercise any remedy under
such Remarketing Agreement.
6.3. REMARKETING AGREEMENTS ASSIGNMENT. Effective as of the Closing Date,
Owner hereby agrees to assign, transfer, and convey the Remarketing
Agreements to Purchaser, and Purchaser hereby agrees to assume the
obligations of Owner set forth in the Remarketing Agreements and agrees to
indemnify and hold harmless Owner from and against any Damages resulting
from failure of Purchaser to perform its obligations under the Remarketing
Agreements in accordance with their terms after the Closing Date. Owner
agrees to indemnify and hold harmless Purchaser from and against any
Damages resulting from failure of Owner to perform its obligations
(including any payment obligations accruing) under the Remarketing
Agreements in accordance with their terms prior to the Closing Date. Owner
and Purchaser shall jointly notify all licensors under the Remarketing
Agreements of the foregoing assignment and assumption.
ARTICLE 7. ACQUISITION AGREEMENT
7.1. ACQUISITION AGREEMENT. Purchaser recognizes that certain components of
the software comprising the Programs were acquired by Owner from T.U.G.,
Inc., under the Agency Automation Software Package Sales Agreement between
T.U.G., Inc. and Owner dated December 29, 1995 (the "Acquisition
Agreement"), and that Owner
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remains subject to certain ongoing payment obligations under the
Acquisition Agreement. Prior to Closing, Owner shall be solely responsible
for all ongoing payment obligations under the Acquisition Agreement and
shall indemnify and hold harmless Purchaser for any liability therefor.
Owner represents and warrants that (a) all payment obligations under the
Acquisition Agreement that have accrued as of the Closing Date will have
been paid in full; (b) the Acquisition Agreement is in full force and
effect in accordance with its terms without modification or amendment and
without default by it, or to its knowledge by any other party thereto, (c)
no condition exists which, with or without the giving of notice or passage
of time, would constitute a breach under the Acquisition Agreement; (d) the
Acquisition Agreement grants Owner the full and effective right and license
to use, copy, modify, and distribute the pertinent software components as
part of the Programs; (e) the Acquisition Agreement is freely assignable to
and assumable by Purchaser pursuant to this Agreement, without the
requirement of obtaining any consent or approval or giving any prior or
subsequent notice; and (f) Owner has not received notice that T.U.G., Inc.
or any successor in interest thereto intends to terminate or exercise any
remedy under such Acquisition Agreement.
7.2. ACQUISITION AGREEMENT ASSIGNMENT. Effective as of the Closing Date, Owner
hereby agrees to assign, transfer and convey the Acquisition Agreement to
Purchaser, and Purchaser hereby agrees to assume the obligations of Owner
set forth in the Acquisition Agreement (with the exception of any remaining
payment obligations of Owner thereunder) and agrees to indemnify and hold
harmless Owner from and against any Damages resulting from failure of
Purchaser to perform its obligations under the Acquisition Agreement after
the Closing Date. Owner agrees that, as of the Closing Date, (a) it will
have terminated any provisions in the Acquisition Agreement setting forth
ongoing payment obligations, or (b) that Owner will remain liable for any
such ongoing payment obligations that are not terminated prior to the
Closing Date, and agrees to indemnify and hold harmless Purchaser from and
against any Damages resulting from Owner's failure to perform its
obligations under this sentence. Owner agrees to indemnify and hold
harmless Purchaser from and against any Damages resulting from failure of
Owner to perform its obligations (including payment obligations accruing)
under the Acquisition Agreement prior to the Closing Date. Owner and
Purchaser shall jointly notify T.U.G., Inc. or any successor in interest
thereto of the foregoing assignment and assumption. Notwithstanding the
provisions of subsection (b) above, Purchaser shall be responsible for
paying royalty payments under the Acquisition Agreement in an amount equal
to [...***...] of the license fees charged by Purchaser to any end-user or
customer (in any new or upgrade installations) in consideration for a
license to use the Agency Automation Software (as defined in the
Acquisition Agreement), to the extent such license fees exceed [...***...];
provided that the foregoing limitation shall not apply to any other pricing
mechanisms used by Purchaser in connection with the Agency Automation
Software, including transaction fees, service fees, development
* CONFIDENTIAL TREATMENT REQUESTED
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fees, maintenance fees or any other fees that are clearly distinguished
from license fees in Purchaser's license agreements with such end-user or
customer.
ARTICLE 8. END-USER AGREEMENTS
8.1. GRANTS TO THIRD PARTIES. Owner represents and warrants that it has
granted rights in the Programs to third parties solely pursuant to the
nonexclusive End-User Agreements, and the following other non-exclusive
agreements:
8.1.1. Value Added Remarketing Agreement between Owner and Cybertek
Corporation, dated August 4, 1998 (the "Cybertek Agreement").
8.2. END-USER AGREEMENTS. Owner represents and warrants that (a) each
End-User Agreement is in full force and effect in accordance with its terms
without modification or amendment and without default by it, or to its
knowledge by any other party thereto; (b) no condition exists which, with
or without the giving of notice or passage of time, would constitute a
breach under any of the End-User Agreements, (c) each End-User Agreement
grants the licensee thereunder solely the nonexclusive right and license to
use the Programs; (d) each End-User Agreement provides only for rendering
of services (including warranty coverage, maintenance, and support) that,
to the extent required to have been performed as of the Closing Date, will
have been performed in full; (e) except for any End-User Agreement
specifically identified in Exhibit I hereto, each End-User Agreement is
freely assignable to and assumable by Purchaser pursuant to this Agreement,
without the requirement of obtaining any consent or approval or giving any
prior or subsequent notice; (f) Owner has not received notice that any
party to any End-User Agreement intends to terminate or exercise any remedy
under such End-User Agreement; and (g) each End-User Agreement marked as
"N/A" in Exhibit C is substantially similar to the End-User Agreements for
the same version of the Programs marked as "Provided" in Exhibit C.
8.3. END-USER AGREEMENTS ASSIGNMENT. Effective as of the Closing Date,
Owner hereby agrees to assign, transfer, and convey the End-User Agreements
to Purchaser, and Purchaser hereby agrees to assume the obligations of
Owner set forth in such End-User Agreements and agrees to indemnify and
hold harmless Owner from and against any Damages resulting from failure of
Purchaser to perform its obligations under the End-User Agreements in
accordance with their terms after the Closing Date. Owner agrees to
indemnify and hold harmless Purchaser from and against any Damages
resulting from failure of Owner to perform its obligations under the
End-User Agreements in accordance with their terms prior to the Closing
Date. Owner and Purchaser shall jointly notify all end-users under the
End-User Agreements of the foregoing assignment and assumption. It is
mutually agreed that Owner shall retain all amounts previously paid to
Owner under the End-User Agreements and that, to the extent further
payments may be made thereunder after the Closing Date, Purchaser
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shall be entitled to receive them directly from such end-users. If such
further payments nonetheless are made to Owner, Owner shall remit such
payments to Purchaser.
8.4. CYBERTEK AGREEMENT. Owner represents and warrants that (a) the
Cybertek Agreement is in full force and effect in accordance with its terms
without modification or amendment and without default by it, or to its
knowledge by any other party thereto; (b) no condition exists which, with
or without the giving of notice or passage of time, would constitute a
breach under any Cybertek Agreement; (c) the Cybertek Agreement grants the
licensee thereunder solely the nonexclusive rights and license to market
the Programs to end-users and to install copies of the Programs internally
for testing and support purposes; and (d) Owner has not received notice
that Cybertek Corporation or any successor in interest thereto intends to
terminate or exercise any remedy under the Cybertek Agreement.
8.5. CYBERTEK AGREEMENT ASSIGNMENT. Effective as of the Closing Date, Owner
hereby agrees to assign, transfer, and convey the Cybertek Agreement to
Purchaser, and Purchaser hereby agrees to assume the obligations of Owner
set forth in the Cybertek Agreement and agrees to indemnify and hold
harmless Owner from and against any Damages resulting from failure of
Purchaser to perform its obligations under the Cybertek Agreement in
accordance with its terms after the Closing Date. Owner agrees to indemnify
and hold harmless Purchaser from and against any Damages resulting from
failure of Owner to perform its obligations under the Cybertek Agreement in
accordance with its terms prior to the Closing Date. It is mutually agreed
that Owner shall retain all amounts previously paid to Owner under the
Cybertek Agreement and that, to the extent further payments may be made
thereunder after the Closing Date, Purchaser shall be entitled to receive
them directly. If such further payments nonetheless are made to Owner,
Owner shall remit such payments to Purchaser.
ARTICLE 9. TRANSITION ASSISTANCE
9.1. COOPERATION. Owner and Purchaser shall cooperate in good faith in
order to accomplish the effective and orderly transition to Purchaser of
the Programs and support for the clients of Owner using such Programs, as
follows:
9.1.1. Attached hereto as Exhibit F is a list of employees of Owner
involved in the development, maintenance, sale and support of the
Programs (the "Programs Employees"). Owner hereby consents to
Purchaser's offering employment to the Programs Employees, on terms
and conditions to be separately negotiated by the respective Programs
Employees and Purchaser. Any decisions as to whether or not to accept
such offers of employment shall be made in the sole discretion of the
relevant Programs Employees. Purchaser shall extend offers to any
Programs Employees it wishes to employ no later than two (2) days
after the Closing Date unless otherwise agreed by the parties. Prior
to extending any such offers, Purchaser shall inform Owner of the
Programs Employees to which it intends to extend offers. Purchaser
shall cooperate with Owner in the timing of its
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communications with and making of offers to Programs Employees in
order to allow Owner to simultaneously communicate with any Programs
Employees to which Purchaser does not intend to extend offers of
employment. Any decisions regarding the continued employment by Owner
of any Programs Employees to whom Purchaser does not extend employment
offers within such two (2) day period (or such other period as is
agreed by the parties), or who do not accept any such offer extended
by Purchaser, shall be made in Owner's sole discretion. Purchaser
shall bear no responsibility with regard to any Programs Employees to
whom Purchaser does not extend offers of employment.
9.1.2. Owner shall provide transition assistance to Purchaser for the
time reasonably necessary, not to exceed six (6) months, to ensure an
effective and orderly transition of the business supported by the
Programs and the clients of Owner using such Programs, and shall
cooperate in good faith with Purchaser in the transfer to Purchaser of
responsibilities toward end-users. Such assistance shall include, but
not be limited to, (a) transferring knowledge of the Programs to
designated Purchaser personnel, (b) introducing Purchaser to end-users
through joint visits to such end-users with Owner and Purchaser
personnel and (c) assisting Purchaser with the transition of customer
support obligations to Purchaser, (d) allowing Purchaser to access and
use the facilities of Owner and to house the Hardware and Purchaser
personnel for a mutually agreed period of time for the purposes
described herein, (e) assisting Purchaser with the transition of key
customer accounts, (f) participating at Purchaser's request, subject
to Owner's discretion, in joint public or company announcements
regarding Purchaser's acquisition and support of the Programs; (g)
delivering the Hardware to Purchaser; and (h) providing such other
transition services as are reasonably requested by Purchaser and
agreed to by Owner. The parties to this Agreement shall jointly
develop and agree to a transition plan (the "Transition Plan") within
thirty (30) days of the Closing Date which shall specify each party's
responsibilities in accomplishing the foregoing objectives.
9.1.3. Owner shall pay to Purchaser, no later than sixty (60) days
after the Closing Date, the sum of [...***...] (the "Transition
Payment"). It is the intention of the parties that Purchaser will use
the Transition Payment the pay salaries and other expenses associated
with any Programs Employees hired by Purchaser under Section 9.1.1.
9.1.4. In accordance with its obligation to Support (as defined in
Section 13.1) the Programs following the Closing Date under Section
13.1, Purchaser shall maintain a staffing level with regard to the
Programs substantially similar to that maintained by Owner prior to
the Closing Date. Notwithstanding the foregoing, Purchaser shall be
free to achieve such staffing level through outsourcing, or to replace
employees involved in Supporting the Programs as it deems appropriate
in its reasonable judgment.
* CONFIDENTIAL TREATMENT REQUESTED
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9.1.5. Owner shall introduce Purchaser to Patni Computer Services
Ltd. ("Patni") and endeavor to facilitate an agreement between
Purchaser and Patni containing terms and conditions similar to the
terms and conditions under which Owner has employed the services of
Patni with respect to the Programs.
ARTICLE 10. ANCILLARY AGREEMENTS
10.1. MAINTENANCE AGREEMENTS AND DEVELOPMENT LICENSES. Exhibit G hereto
sets forth a list of (a) maintenance agreements pertaining to the Hardware
(the "Maintenance Agreements") and (b) agreements licensing to Owner
certain software packages used in the development and maintenance of the
Programs (the "Development Licenses"). Owner represents and warrants that
(a) each Maintenance Agreement and Development License is in full force and
effect in accordance with its terms without modification or amendment and
without default by it, or to its knowledge by any other party thereto; (b)
no condition exists which, with or without the giving of notice or passage
of time, would constitute a breach under any Maintenance Agreement or
Development License; (c) each Development License grants Owner the full and
effective right to use the pertinent software packages in the development
and maintenance of the Programs; (d) each Maintenance Agreement and
Development License provides only for the payment of fees and royalties
that, to the extent accrued as of the Closing Date, will have been paid in
full; and (e) Owner has not received notice that any party to any
Maintenance Agreement or Development License intends to terminate or
exercise any remedy under such Maintenance Agreement or Development
License.
10.2. MAINTENANCE AGREEMENTS AND DEVELOPMENT LICENSES ASSIGNMENT. Effective
as of the Closing Date, Owner hereby agrees to assign, transfer and convey
to Purchaser the Maintenance Agreements and the Development Licenses, and
Purchaser hereby agrees to assume the obligations of Owner set forth in
such Maintenance Agreements and Development Licenses and agrees to
indemnify and hold harmless Owner from and against any Damages resulting
from failure of Purchaser to perform its obligations under the Maintenance
Agreements or the Development Licenses in accordance with their terms after
the Closing Date. Owner agrees to indemnify and hold harmless Purchaser
from and against any Damages resulting from failure of Owner to perform its
obligations under the Maintenance Agreements or the Development Licenses in
accordance with their terms prior to the Closing Date. Owner and Purchaser
shall jointly notify all service providers under the Maintenance Agreements
and licensors under the Development Licenses of the foregoing assignment
and assumption.
ARTICLE 11. FURTHER ASSURANCES
11.1. COOPERATION IN TRANSFER. Owner shall, without further consideration,
execute and deliver such further conveyance instruments and take such
further actions as may
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be necessary to procure, maintain, perfect, and enforce the full benefits,
enjoyment, rights, title and interest, on a worldwide basis of the
Technology and the Hardware. Owner therefore agrees that upon Purchaser's
written request and at Purchaser's expense Owner shall, as reasonably
necessary, (a) execute, acknowledge, and deliver any affidavits or
documents of assignment and conveyance regarding the Technology or the
Hardware; (b) provide testimony in connection with any proceeding affecting
the right, title, or interest of Purchaser in the Technology or the
Hardware; and (c) perform any other acts deemed necessary to carry out the
intent of this Agreement.
11.2. AUDIT. After Closing, Owner and its third party auditors shall
render any assistance and cooperation reasonably required and requested in
writing by Purchaser to conduct an independent audit, which shall include
the production of audited financial statements, of the business conducted
by Owner concerning the Programs (the "P.D.,Q. Business") for three (3)
years prior to Closing. For the purposes of conducting such audit Owner
shall permit Purchaser access to pertinent books and records concerning the
P.D.,Q. Business during normal business hours at times mutually agreed upon
by the parties.
ARTICLE 12. ACKNOWLEDGMENT OF RIGHTS
12.1. PURCHASER RIGHTS. In furtherance of this Agreement, Owner hereby
acknowledges that, from and after the Closing Date, Purchaser has acceded
to all of Owner's right, title, and standing to:
12.1.1. Receive all rights and benefits pertaining to the
Technology, the Hardware, the Remarketing Agreements, the
Acquisition Agreement, the End-User Agreements, the Cybertek
Agreement, the Maintenance Agreements and the Development Licenses;
12.1.2. Institute and prosecute all suits and proceedings and take
all actions that Purchaser, in its sole discretion, may deem
necessary or proper to collect, assert, or enforce any claim, right,
or title of any kind in, to or under any and all of the Technology,
the Hardware, the Remarketing Agreements, the Acquisition Agreement,
the End-User Agreements, the Cybertek Agreement, the Maintenance
Agreements and the Development Licenses; and
12.1.3. Defend and compromise any and all such action, suits, or
proceedings relating to such transferred and assigned rights, title,
interest, and benefits, and perform all other such acts in relation
thereto as Purchaser, in its sole discretion, deems advisable.
ARTICLE 13. PROGRAMS PROMOTION; SOURCE CODE ESCROW
13.1. MAINTENANCE AND PROMOTION OF PROGRAMS. As additional consideration
for the assets, rights and ownership interests acquired by Purchaser
hereunder, Purchaser shall,
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for a period of two (2) years following the Closing Date, use commercially
reasonable efforts actively to promote, maintain, support, market and
upgrade (collectively, such activities constituting "Support") the
Programs, and in any event shall conduct such activities on a level at
least equivalent to that performed by Owner prior to the Closing Date. The
following procedure shall be used to determine whether Purchaser is
fulfilling its obligations under this Section 13.1:
13.1.1. In the event that Owner is dissatisfied with Purchaser's
activities pursuant to Section 13.1, it shall have the right to
convene an arbitration proceeding to determine whether Purchaser is
satisfying its obligations under Section 13.1. If the arbitrator(s)
determine that Owner has shown by clear and convincing evidence that
Purchaser has demonstrated a pattern of failing to (a) maintain the
Programs properly, or (b) to provide effective support to end users
of the Program, Purchaser shall be deemed in breach of its
obligations under Section 13.1. In reaching its determination, the
arbitrator shall specifically consider (a) with regard to maintaining
the Programs properly, whether Purchaser has demonstrated a pattern
of failing to maintain the distributed code to the Programs in
reasonably error-free condition, or of failing to keep current
Program functionality with regard to industry and market
requirements; and (b) with regard to providing effective support to
end users, whether Purchaser has demonstrated a pattern of
introducing defects to the Programs that are injurious to the
businesses of end users, or of failing to cure reported defects in a
timely manner consistent with industry standards and reasonable
customer expectations.
13.2. RIGHT TO REACQUIRE PROGRAMS. Purchaser acknowledges that Purchaser's
obligations under Section 13.1 constituted a material inducement to Owner's
entering into this Agreement, and accordingly agrees that any breach by
Purchaser of Purchaser's obligations under Section 13.1, as determined by
an arbitrator's ruling in Owner's favor in accordance with the procedures
set forth in Section 13.1.1 above, shall entitle Owner to reacquire from
Purchaser all right, title and interest in and to the Programs, Assigned
Agreements and Trademarks transferred to Purchaser hereunder (hereinafter,
such right to reacquire to be referred to as the "Option"). In the event of
a breach of Section 13.1, as determined by an arbitrator's ruling in
Owner's favor in accordance with the procedures set forth in Section 13.1.1
above, which breach has not been cured within thirty (30) days after Owner
has provided notice thereof to Purchaser, Owner may exercise the Option by
providing written notice (the "Option Notice") to Purchaser and paying to
Purchaser the fair market value of the Programs in their then current form,
as determined by a third party auditor mutually acceptable to the parties.
In the event that the parties are unable to agree to an acceptable auditor
within seven (7) days after the date of the Option Notice, the fair market
value of the Programs shall be determined by a panel of three auditors,
with one chosen by each party and a third chosen by the first two auditors.
Notwithstanding the foregoing, in the event that Purchaser is in Bankruptcy
(as hereinafter defined) as of the date of the Option Notice, Purchaser may
exercise the Option by either, at Owner's choice, (a) paying the fair
market value of the Programs, determined as set forth above, or
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(b) delivering to Purchaser the Shares received by Owner hereunder.
Purchaser shall cooperate fully with Owner in executing all documents
necessary to effectuate Owner's reacquisition of the Programs, Remarketing
Agreements and Trademarks under the Option. As security for Purchaser's
obligations under this ARTICLE 13, Purchaser will grant to Owner a lien and
security interest in the Programs (including without limitation all
copyright registrations thereof) and Trademarks pursuant to a security
agreement to be executed by the parties at the Closing hereunder. As used
in this Section 13.2, the term "Bankruptcy" shall mean the institution of
any proceeding by or against Purchaser seeking relief, reorganization or
arrangement under any laws relating to bankruptcy or insolvency; the
assignment for the benefit of creditors, or upon the appointment of a
receiver, liquidator or trustee, of any of Purchaser's property or assets;
or the liquidation, dissolution or winding up of Purchaser's business.
13.3. SOURCE CODE ESCROW.
13.3.1. Pursuant to a source code escrow agreement in a form to be
mutually agreed upon by both parties (the "Escrow Agreement"),
Purchaser shall deposit a copy of the source code and all
documentation for the Programs (collectively, the "Deposit") with a
third party escrow agent reasonably acceptable to both parties (the
"Escrow Agent"), no later than thirty (30) days after Purchaser's
receipt thereof under Section 3.1. The Deposit will be held in escrow
as security for the Option, for a period of two (2) years following
the Closing Date. During such two (2) year period, the Deposit will
be updated and kept current by Purchaser as changes are made to any
part of the Programs. Purchaser agrees continuously to store, deposit
and maintain the Deposit for the benefit of Owner.
13.3.2. Purchaser shall provide a copy of the Escrow Agreement to
Owner upon request, and Owner shall have the right to verify the
completeness and currency of the Deposit upon reasonable notice to
the Escrow Agent and Purchaser.
13.3.3. The Deposit shall be held in escrow by the Escrow Agent and
Owner shall, upon payment of the duplication costs and other
reasonable handling charges of the Escrow Agent, be entitled to
obtain a copy of the Deposit from the Escrow Agent upon Owner's
exercise of the Option under Section 13.2.
ARTICLE 14. LIMITED WARRANTY; NO SUPPORT
14.1. LIMITED WARRANTY. Other than the representations and warranties
explicitly set forth in this Agreement, OWNER WILL ASSIGN THE PROGRAMS AND
HARDWARE TO PURCHASER "AS IS," AND OWNER DISCLAIMS ALL WARRANTIES EXPRESS
OR IMPLIED WITH RESPECT TO THE PROGRAMS AND HARDWARE, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
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14.2. NO SUPPORT. Except as may otherwise be expressly provided in a
separate agreement, Owner shall not be responsible to Purchaser for, or
have any duty to conduct or perform, any training or instruction; any
presale or postsale marketing support; any licensing, sublicensing,
leasing, or distribution; or any modification, correction, updating,
enhancement, or technical support of the Programs.
ARTICLE 15. INDEMNIFICATION
15.1. INDEMNIFICATION FOR BREACH OF REPRESENTATION AND WARRANTIES. Each
party hereto shall indemnify and hold harmless the other party, and such
party's directors, officers, employees and agents, from and against all
Damages (as defined in Section 15.4) resulting from, arising from, based on
or relating to such party's breach of its representations and warranties
hereunder or in any certificate, document or instrument furnished by each
party pursuant to this Agreement or in connection with the transactions
contemplated hereby; provided, however, that Owner shall have no obligation
under this ARTICLE 15 with respect to any Damages to the extent such
Damages would not have been incurred but for (a) modifications made by
Purchaser to the Programs or Hardware; and/or (b) Purchaser's combination
of the Programs and/or Hardware, or operation or use thereof in combination
with, equipment, data or software not furnished by Purchaser except for any
combination which is specified in the Program documentation or that
otherwise forms part of the normal operating environment for the Programs.
15.2. TAX INDEMNIFICATION. Purchaser shall indemnify and hold harmless
Owner, and Owner's directors, officers, employees and agents, from and
against all Damages (as defined in Section 15.4) resulting from, arising
out of, based on or relating to any taxes for which Purchaser is liable
under Section 1.5.
15.3. SURVIVAL. All representations, warranties, covenants, agreements and
obligations set forth in this Agreement or any other certificate,
instrument or document furnished in connection with this Agreement or the
transactions contemplated hereby shall survive the consummation of the
transactions contemplated hereby. The representations, warranties,
covenants and obligations of Owner, and the rights and remedies that may be
exercised by Purchaser, shall not be limited or otherwise affected by or as
a result of any information furnished to, or any investigation made by or
any knowledge of, any of Purchaser or any of their representatives.
15.4. DAMAGES. "Damages" means any and all losses (including, but not
limited to liquidated damages), claims, damages, liabilities, obligations,
judgments, equitable relief granted, settlements, awards (including back
pay awards), demands, offsets, defenses, counterclaims, actions or
proceedings, reasonable out-of-pocket costs, expenses and attorneys' fees
(including any such reasonable costs, expenses and attorneys' fees incurred
in enforcing any right of indemnification or with respect to any appeal),
interest and penalties.
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ARTICLE 16. CONFIDENTIALITY
16.1. DEFINITION. "Confidential Information" means confidential and
proprietary information which relates to Owner's or Purchaser's business,
products and services, including but not limited to data, trade secrets,
discoveries, ideas, concepts, know-how, techniques, software, business
activities and operations, reports, studies and other technical and
business information. Notwithstanding the foregoing, Confidential
Information shall not include any information which (a) is known by the
receiving party at the time of disclosure, free of any obligation to keep
it confidential, as evidenced by credible evidence; (b) is or becomes
publicly available through authorized disclosure by the owner of such
information; (c) is rightfully obtained by the receiving party from a third
party who has the right to transfer or disclose it; or (d) is independently
developed by receiving party without reference to Confidential Information
of the other party.
16.2. NO DISCLOSURE. Each party shall keep in confidence for a period of
five (5) years after termination or expiration of this Agreement all
Confidential Information of the other party and that it will not directly
or indirectly disclose to any third party or use for its own benefit, or
use for any purpose other than the performance of its obligations under
this Agreement, any Confidential Information it receives from the other
party; provided, however, that obligations concerning confidentiality of
personal information relating to policyholders or potential policyholders
shall survive in perpetuity. Each party shall use reasonable care to
protect the other party's Confidential Information, and in no event less
than the same degree of care as it would employ with respect to its own
information of like importance which it does not desire to have published
or disseminated. Each party may make Confidential Information of the other
party available to those of its employees, contractors or agents who have a
need to know such information and who are subject to binding use and
disclosure restrictions at least as protective as those set forth herein.
Notwithstanding the foregoing, either party may make disclosures as
lawfully required or requested by a governmental entity or agency, as
required by any judicial authority or process or in connection with any
judicial proceeding, or in connection with seeking any governmental or
regulatory approval, provided that reasonable measures are taken to limit
such disclosure and to obtain confidential treatment or a protective order
and the disclosing party is allowed to participate in such efforts.
16.3. REMEDIES. Owner and Purchaser each agree that any breach of this
ARTICLE 16 would cause irreparable harm or injury to the other party
significantly in excess of the value received by such other party pursuant
to this Agreement, and that such other party shall be entitled to
declaratory, injunctive or other equitable relief, in addition to any other
legal or equitable remedies it may have, for any such breach.
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ARTICLE 17. NON-COMPETE
17.1. LIMITED NON-COMPETITION. Subject to ARTICLE 13, for a period of three
(3) years following the Closing Date (the "Restricted Period"), Owner shall
not compete with Purchaser by developing, marketing or distributing, or
assisting third parties to develop, market or distribute, a product or
service which is directly competitive with the Programs. Owner agrees that
neither it nor any affiliate shall during the Restricted Period, employ, or
directly or indirectly solicit for employment or advise or recommend to any
other person that he or she employ or solicit for employment, any person
employed at that time by Purchaser; provided, however, nothing contained
herein shall prevent it or any affiliate from hiring any such employee who
responds to a general hiring program conducted in the ordinary course of
business not specifically directed to such employees or who approaches
Owner or any affiliate on a wholly unsolicited basis. Following the Closing
Date, neither Owner nor any affiliate shall, without the prior written
consent of Purchaser, make any use of the trademarks listed in Exhibit E.
ARTICLE 18. CLOSING
18.1. CONDITIONS TO PURCHASER'S AND OWNER'S OBLIGATIONS AT CLOSING. The
obligations of Purchaser to purchase the Programs and Hardware hereunder
and consummate the transactions contemplated hereby, and the obligations of
Owner to transfer the Programs and Hardware hereunder and consummate the
transactions contemplated hereby, are conditioned on the satisfaction,
unless waived, of the following conditions at the Closing:
18.1.1. All applicable waiting periods under the HSR Act shall have
expired.
18.1.2. The Business and Technology Strategic Alliance Agreement in
substantially the form attached hereto as Exhibit K shall have been
executed by the parties thereto.
18.2. FAILURE TO CLOSE. If for any reason the Closing has not occurred
within sixty (60) days after the date on which this Agreement is executed,
this Agreement shall terminate except for any liability either party may
have hereunder for breach of this Agreement.
18.3. DELIVERY OF DOCUMENTS. At the Closing, Owner shall deliver to
Purchaser appropriate assignment and xxxx of sale documents in a form
reasonably acceptable to Purchaser, and Purchaser shall deliver to Owner
certificates constituting the Shares representing the Purchase Price as set
forth in Section 1.3.
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18.4. COVENANTS.
18.4.1. Owner and Purchaser shall make commercially reasonable efforts
to ensure that all conditions to Closing under Section 18.1 occur as
soon as reasonably practicable.
18.4.2. Owner shall make commercially reasonable efforts to effect the
assignment to Purchaser of all of the Assigned Agreements no later
than the Closing Date, and to obtain written consents to such
assignments from all third parties listed in Exhibit I and deliver
such consents to Purchaser no later than the Closing Date or promptly
thereafter. Purchaser shall provide reasonable assistance in effecting
such assignments and obtaining such written consents, as requested by
Owner. To the extent that any Assigned Agreements have not been
assigned to Purchaser as of the Closing Date, Owner agrees to make
available to Purchaser any benefits received thereunder after the
Closing Date, at no cost to Purchaser, and Purchaser agrees to assume
any obligations thereunder (except for any obligations explicitly
disclaimed under this Agreement) after the Closing Date.
ARTICLE 19. MISCELLANEOUS
19.1. HEADINGS AND REFERENCES. Unless otherwise stated, all references to
Articles, Sections and Exhibits refer to the articles and sections of, and
exhibits to, this Agreement. The headings of the Articles and Sections of
this Agreement are for convenience only and in no way limit or affect the
terms or conditions of this Agreement.
19.2. SEVERABILITY. If any provision or any portion of any provision of
this Agreement is construed to be illegal, invalid or unenforceable, such
provision or portion thereof shall be deemed stricken and deleted from this
Agreement to the same extent and effect as if it were never incorporated
herein, but all other provisions of this Agreement and the remaining
portion of any provision that is construed to be illegal, invalid or
unenforceable in part shall continue in full force and effect; provided
that such resulting construction of the Agreement does not frustrate the
main purpose of the Agreement.
19.3. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of,
and be binding upon, the parties hereto, together with their respective
legal representatives, successors, and assigns, and may not be assigned by
either party without the prior written consent of the other party hereto.
19.4. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Colorado.
19.5. ENTIRE AGREEMENT. This Agreement, including the Exhibits referred to
herein, which are incorporated herein and made a part hereof, merges and
supersedes all prior and contemporaneous agreements, assurances,
representations, and communications
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between the parties hereto with respect to the subject matter contained
herein, and may be amended or terminated only by a written agreement
executed by the Owner and Purchaser.
19.6. NO RELATIONSHIP BETWEEN THE PARTIES. Neither party shall represent
itself as the agent or legal representative of the other or as joint
venturers for any purpose whatsoever, and neither shall have any right to
create or assume any obligations of any kind, express or implied, for or on
behalf of the other in any way whatsoever.
19.7. NON-WAIVER. A failure of either party to enforce at any time any
term, provision or condition of this Agreement, or to exercise any right or
option herein, shall in no way operate as a waiver thereof, nor shall any
single or partial exercise preclude any other right or option herein; and
no waiver of any term, provision or condition of this Agreement shall be
valid unless in writing, signed by the waiving party, and only to the
extent set forth in such writing.
19.8. NOTICES. Unless expressly stated otherwise, all notices required
herein shall be given in writing and shall be delivered (and notice shall
be deemed effective upon delivery) in person, by courier, or sent by
certified United States mail, postage prepaid, return receipt requested, to
the address set forth in the first paragraph of this Agreement.
IN WITNESS WHEREOF, Owner and Purchaser have caused this Agreement to be signed
and delivered, all as of the date first set forth above.
First Colony Life Insurance Company ChannelPoint, Inc.
By: /s/ Xxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
-------------------------- --------------------------------
Name: Xxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President Title: President and CEO
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EXHIBIT A - PROGRAMS
1. p.d.,q.: Comprehensive AS400 based brokerage general agency
administration system, frequently referred to as "Classic" to
distinguish it from the replacement/upgrade offering p.d.,q. 2000.
o p.d.,q. source code - all versions extant in the p.d.,q. software
archives, 1 through 20 (current)
o p.d.,q. object code - all versions extant in the p.d.,q. software
archives, 1 through 20
o All p.d.,q. system documentation
o All end user documentation
2. p.d.,q. Lite: PC based status and e-mail application in support of
NAILBA standards
o U.S. Copyright Registration: TX 0-000-000, 5/1/98
o p.d.,q. Lite source code - all versions, 1 through 4 (current)
o p.d.,q. Lite object code - all versions, 1 through 4
o All system documentation
o All end user documentation
3. p.d.,q. 2000: Windows based replacement for p.d.,q. "Classic", a
comprehensive brokerage general agency administration system
o U.S. Copyright Registration: TX 0-000-000, 5/18/98
o p.d.,q. 2000 source code libraries - all modules, all application
versions, 1 through 3.21 (current), all standalone components
such as utilities, scripts, reports, and so on, all enhancements
currently in development both on shore in Lynchburg VA as well as
off shore in the offices of Patni Consulting Services in Mumbai,
India.
Modules:
o Resource module
o p.d.,q. 2000 module
o Cash Receipts module
o p.d.,q. 2000 object code - all modules, application versions, 1
through 3.21, all standalone components such as utilities,
reports, and so on.
o All system documentation
o All other manuals and documentation acquired by Owner in support
of the p.d.,q. 2000 application development environment
(.PowerBuilder, Oracle, APOL, etc.)
o All technical documentation regarding enhancements both proposed,
planned and in development
o p.d.,q. 2000 ver 3.0 end user training manual and related
documentation
o All printed copies and source files
o All on-line copies
o All p.d.,q. 2000 marketing material and software demos
24
25
4. All miscellaneous programs
o Extract Programs:
Multidata "E" series export
o Conversion programs:
Multidata "D" series to p.d.,q. "Classic" version 19
Multidata "E" series to p.d.,q. "Classic" version 19
Multidata "E" series to p.d.,q. 2000 version 3.n
p.d.,q. "Classic" version 19 to p.d.,q. "Classic" version 20
p.d.,q. "Classic" version 19 to p.d.,q. 2000 version 3.n
o Installation utilities
p.d.,q. "Classic" version 20 installation tape
p.d.,q. Lite version 4.0 installation and setup program
p.d.,q. 2000 database configuration and installation scripts
o All other miscellaneous programs and utilities developed by the
p.d.,q. department during the course of, or as part of
application development and customer support
25
26
EXHIBIT B - REMARKETING AGREEMENTS
1. NAPS Purchase Agreement, dated November 8, 1983
2. Comm-Press Software License Agreement, dated November 24, 1993
3. advantis Licensed Program Redistribution Agreement, signed by Owner on
June 28, 1995
4. Oracle Business Alliance Program Agreement, dated March 5, 1996
26
27
EXHIBIT C - END-USER AGREEMENTS
GA NAME PRODUCT COMMENT CONTRACT
1 1 Xxxxxx Associates, Inc *
2 2 Benefit Brokerage, Inc. Converted from Classic *
3 3 Bisys Insurance Services Inc. *
4 4 Brokerage Services Of Carolina Converted from Classic Provided (Original
"Classic")
5 5 Xxxxx And Xxxxx Associates Converted from Classic Provided (Original
"Classic")
6 6 Business Underwriters *
Associates
7 7 Xxxxxx & Associates Converted from Multidata *
8 8 CPS Converted from Classic *
9 9 Xxxxxx X. Love Agency, Inc. *
10 10 Financial Services Corp. *
11 11 First Northern Also Classic Provided (Original
"Classic")
12 12 First Quote *
13 13 Xxxxxxxx Xxxxx Group, LLC Converted from Classic *
14 14 IFS Agencies Converted from Classic *
15 15 Independent Financial Network 2000 *
16 16 Xxxx Agency, Inc. 2000 *
WASHINGTON
17 17 Metlife Brokerage 2000 Evaluating Multidata *
conversion
18 18 Pacific Southwest Finance 2000 *
19 19 State Life 2000 *
20 20 Target Insurance Services, 2000 Converted from Classic Provided (Original
Inc. "Classic")
21 21 Tennessee Brokerage Agency, 2000 Converted from Classic Provided (Original
Inc. "Classic")
22 22 The Xxxxxx Agency, Inc. 2000 *
23 23 The Xxxxxx Agency, Inc. 2000 Converted from Classic Provided (British
American Insurance
Intermediaries from
Classic)
24 24 Xxx Xxxxxxxx Agency 2000 *
25 25 U S A Associates Limited 2000 Converted from Classic *
26 26 Xxxx-Xxxx Underwriters Co., 2000 *
Inc.
27 27 DAI 2000 - sched Scheduled by 12/99
28 28 Life Brokerage Corporation 2000 - sched Scheduled by 12/99
29 29 Xxxxxx Insurance Agency 2000 - sched Scheduled by 12/99
30 30 Xxxxx Brokerage 2000 - sched Scheduled by 12/99
27
28
31 31 The Xxxxxx Agency 2000 - sched Scheduled by 12/99
32 32 URL 2000 - sched Scheduled by 12/99
33 33 Xxxxxxxxx Associates 2000 - sched Scheduled by 12/99
34 34 Zenith Data Systems 2000 - sched Scheduled by 12/99
35 1 Ascensus Insurance Services CLASSIC N/A
Inc.
36 2 Xxxxxxxx Financial Coporation CLASSIC Provided
37 3 Xxxxxx Xxxxx Assoc., Ltd. CLASSIC N/A
38 4 Brokerage Services, CLASSIC Provided (L&J
Inc.(Xxxxx-Xxxxx) Associates)
39 5 Brokerage Unlimited, Inc. CLASSIC N/A
40 6 Brokers Clearing House, Ltd. CLASSIC Provided
41 7 Brokers Service Marketing CLASSIC Provided
(LEA)
42 8 Brokers Source, Ltd. CLASSIC Provided
43 9 BSI, Inc. CLASSIC Provided
44 10 Charitable Estates CLASSIC Provided (Life
Insurance Counselors)
45 11 Colonial Brokerage House, Inc. CLASSIC 2000 conversion sched Provided (XxxxXxxx
Xxxxx)
46 12 Continental-Southern Ins. CLASSIC Provided
Agency
47 13 Crisis Management Agency, Inc. CLASSIC 2000 conversion sched N/A
48 14 Xxxx Xxxxxx (R & P Health) CLASSIC 2000 conversion sched Provided (R&P Health
XXXXXXXX and Financial Services)
49 15 Equity, Inc. CLASSIC Provided
50 16 Executive Underwriters CLASSIC Provided
51 17 F P A, Inc. CLASSIC Provided
52 18 Xxxxxx XxXxxxx Brokerage, Inc. CLASSIC Provided
53 19 First Northern Financial CLASSIC 2000 conversion sched Provided
Resources, Inc.
54 20 Xxxxx Assoc. Ins. Mrktg., Inc. CLASSIC Provided
55 21 Xxx-Xxxxxxx Agency, Inc. CLASSIC 2000 conversion sched Provided
56 22 Garden City Brokerage Inc. CLASSIC Provided
57 23 Guardian Of Hawaii, LTD CLASSIC 2000 conversion sched Provided
58 24 H. D. Xxxxxx & Co. CLASSIC Provided
59 25 Infinity Financial & Ins. CLASSIC Provided
Serv.
60 26 Innovative Brokers Corp. CLASSIC Provided
61 27 Insurance Marketing Concepts, CLASSIC Provided
Inc.
62 28 Insurance Marketing CLASSIC N/A
Resources, Inc.
63 29 Issue Insurance Agency,Inc. CLASSIC Provided
64 30 X. X. Xxxxxx & Co. Inc. CLASSIC 2000 conversion sched Provided (X X
Investment Company)
65 31 Xxxxx X. XxXxxx Assoc. CLASSIC Provided
66 32 Xxxxx X. Xxxxxxxx Agency, Inc. CLASSIC 2000 conversion sched Provided
28
29
67 33 Xxxxxx & Company Inc. CLASSIC N/A
68 34 Xxxx X. Xxxxx Agency CLASSIC Provided
69 35 Xxxx Agency, Inc. OREGON CLASSIC Provided
70 36 Moneymetrics CLASSIC N/A
71 37 National Benefit Corp. CLASSIC Provided
72 38 Xxxxxx Xxxxxx CLASSIC 2000 conversion sched Provided
73 39 Northern States Brokerage, CLASSIC N/A
Inc.
74 40 Oldfield Associates, Inc. CLASSIC Provided
75 41 X. Xxxxxx, Assoc. In CLASSIC N/A
Brokerage, Inc.
76 42 Profit Plans, LLC CLASSIC Provided (Xx. Xxx
Xxxxxx)
77 43 Prudential Brokerage CLASSIC N/A
78 44 Xxxxxxx X. Xxxxx Agency, Inc. CLASSIC Provided
79 45 Xxxxxx Xxxxx Insurance CLASSIC Provided
Services Inc
80 46 Security House, Inc. CLASSIC 2000 conversion sched Provided
81 47 Xxxx American Financial Corp CLASSIC Provided (American
Insurance Marketers)
82 48 South Pacific Insurance Agency CLASSIC Provided
83 49 Special Risk Underwriters, CLASSIC Provided (X. Xxxxxx
Inc. Xxxxxx)
84 50 Special Service Agency Inc. CLASSIC Provided
85 51 TGR Insurance Services, Inc. CLASSIC N/A
86 52 The Xxxxxx Group CLASSIC Provided
87 53 The Loving Insurance Group CLASSIC Provided (Xxxxxxx X
Xxxxxx)
88 54 The Xxxx Group II CLASSIC N/A
89 55 Xxxxx Brokerage Resources CLASSIC 2000 conversion sched Provided
90 56 Total Life Concepts CLASSIC 2000 conversion sched N/A
91 57 United Underwriters CLASSIC Provided (from BSI
merger)
92 58 Upstate Special Risk CLASSIC 2000 conversion sched Provided (Xxxxxxxxxx
Services, Inc. Investment Trust)
93 59 USA Brokerage Network, Inc CLASSIC N/A
94 60 X. X. Xxxx & Company CLASSIC N/A
95 61 X. X. Xxxxx Agency, Inc. CLASSIC Provided
96 1 X X Xxxxxxx & Sons, Inc. LITE Sample Agreement
Attached
97 2 Xxxx Xxxxxx Associates LITE "
98 3 American Benefits Group LITE "
99 4 AMPAC-Xxxxx Xxxxxx LITE "
100 5 Ash Brokerage Corporation LITE "
101 6 Xxxxxxx Bank - BISYS LITE "
102 7 Benefit Consultants LITE "
29
30
103 8 Xxxxx & Xxxxxx Financial LITE "
104 9 Xxxxx X. Xxxxxx LITE "
105 10 Brokerage Professionals, Inc. LITE "
106 11 Brokerage Resource Inc LITE "
107 12 Xxxxxx, Xxxxxxxx & Xxxxxx LITE "
108 13 Xxxxx Xxxxx & Associates, Inc. LITE "
109 14 Centerstone Life & Annuity LITE "
110 15 Chase Fin Srvcs-BISYS LITE "
111 16 Chase Manhattan-BISYS LITE "
112 17 CMC & Associates LITE "
113 18 Xxxxxxxx Agency LITE "
114 19 Component Insurance Service, LITE "
Inc.
115 20 Consumer Insurance Group, Inc. LITE "
116 21 Xxxxxxx Brokerage Service, LITE "
Inc.
117 22 Corporate Compensation Plans, LITE "
Inc.
118 23 Corporate Financial Services, LITE "
Inc. XXXXX
000 00 Xxxxxxxxx - XXX XXXXXX AGENCY LITE "
120 25 Xxxxx X. Xxxx, Associates, LITE "
Inc.
121 26 Xxxxxx X. Xxxxxxx & Associates LITE "
122 27 Dime X.X.Xxxxxx LITE "
123 28 Diversified Brokerage LITE "
Services Inc.
124 29 Diversified Brokerage LITE "
Specialists
125 30 Diversified Investments, Inc. LITE "
126 31 Xxxxx Xxxxxxx Xxxxx LITE "
127 32 Xxxx Xxxxx Insurance Agency LITE "
128 33 Xxxxxxxx Capital Corp. LITE "
129 34 Elite Marketing Group LITE "
130 35 Enroll American - ASH LITE "
BROKERAGE
131 36 Equity Analysts Agency, Inc. LITE "
132 37 Essex Corporation LITE "
133 38 Extra Risk Associates, Inc. LITE "
134 39 First Union East LITE "
Coast-EQUITY, INC.
135 40 First Union West LITE "
Coast-EQUITY, INC.
136 41 Fleet Insurance Agcy-ESSEX, LITE "
CORP
137 42 Xxxxx X. Xxxx LITE "
138 43 Xxxx X. Xxxxxxx LITE "
139 44 Xxxxxxxxx Agency, Inc. LITE "
140 45 Golden American LITE "
141 00 Xxxxxx, Xxxxxx LITE "
142 47 IIC Marketing, Ltd. LITE "
30
31
143 48 Ins. Professionals Of West LITE "
Tx, Inc.
144 49 Insurance Brokerage Services, LITE "
Inc.
145 50 Insurance Designers Of LITE "
Dallas, Inc.
000 00 Xxxxxxxxx Xxxxxxxx Xx Xxxxxxx LITE "
147 52 Insurance Innovations, LITE "
Unlimited
148 53 Insurance Planning, Inc. LITE "
149 54 Xxxxx Xxx Xxxxxx LITE "
150 55 Xxxxx X. Xxxxx LITE "
151 56 Xxxx X. Xxxx, III LITE "
152 57 Xxxx Xxxxxxxx LITE "
153 58 Xxxxxx Xxxxx LITE "
154 59 K. W. Brokerage, Inc. LITE "
155 60 Xxxxxxx, Xxxxxxxx & LITE "
Associates, Inc.
156 61 KMS Financial Serv. Inc LITE "
157 62 Xxxxx Xxxxxx Agency Inc. LITE "
XXXXX XXXXX
158 63 Xxxxx Xxxxxx Agency Inc. LITE "
Glenview
159 64 Xxxxx Xxxxxx Agency Inc. LITE "
Xxxxx/Firstar
160 65 Leejon Agency, Inc. LITE "
161 66 Xxxx Xxxxx Financial Services LITE "
162 67 Leisure Werden Xxxxx Xxx. LITE Sched conversion to 2000 "
Inc. LA OFF
163 68 Leisure Werden Xxxxx Xxx. LITE Sched conversion to 2000 "
Inc. SF OFF
164 69 Management Consolidated LITE "
Corp., Inc.
165 70 Xxxxxxx X. Xxxxxxxxx Ins. LITE "
Agency
166 71 Mississippi Insurance LITE "
Brokerage
167 72 Nashville Brokerage LITE "
168 73 Xxxxxx & Xxxxx Associates, LITE "
Inc.
169 74 National Brokerage Co., Inc. LITE "
170 75 National Brokerage Consortium LITE "
171 76 Northeast Risk Management LITE "
172 77 O.D.I. LITE "
173 78 Partners Marketing Group LITE "
174 79 Pension Actuaries Of LITE "
Philadephia
175 80 Personalized Brokerage LITE "
Services
176 81 Xxxxxxxx Brokerage Agency LITE "
177 82 Producers Financial Group LITE "
000 00 Xxxxx X Xxxxxx XXX R R S LITE "
Agency
179 84 Xxx Xxxxxx LITE "
180 85 Reliable Insurance Brokers LITE "
31
32
181 86 Xxxxxx X. Xxxx LITE "
182 87 Xxxxxxxx-Xxxxxxxx, Inc. LITE "
183 88 Xxxxxx Xxxxxx Agency LITE "
184 89 Selectquote Insurance Services LITE "
185 90 Xxxxxxx Brokerage Corp. LITE "
186 91 Source Brokerage, Inc. LITE "
187 92 Special Service Agency LITE "
Inc.-COMPULIFE
188 93 The Xxxxxx Agency LITE "
189 94 The Xxxxxxxx Agency, Inc. LITE "
190 95 Xxxxxx Insurance Marketing LITE "
191 96 Xxxxxx Insurance Services LITE "
192 97 Towne Brokers, Inc. LITE "
193 98 Underwriting Service Agency LITE "
194 99 Xxxxxxxxxx Agencies LITE "
195 100 W. E. Xxxxxxx/BB&T Bank LITE "
196 101 Xxxx Financial Service, Inc. LITE "
197 102 Xxxxxxx Insurance Agency, Inc LITE "
198 103 Xxxxxxx X. Xxxxxx LITE "
199 104 Xxxxxxx Xxxxxxxx & Assoc., LITE "
Inc.
200 1 Aetna Life Insurance Co. EXPRESS Provided
201 2 Connecticut General Life EXPRESS Provided
Insurance Company
202 3 Continental Casualty Company EXPRESS Provided
203 4 First Penn-Pacific Life EXPRESS Provided
Insurance Company
204 5 GECS Insurance Companies EXPRESS Provided
205 6 Grenel Financial Corporation EXPRESS Provided
(Connecticut National)
206 7 Life Insurance Company of EXPRESS Provided
Virginia
207 8 Lincoln Benefit Life EXPRESS N/A
210 9 Metropolitan Life Insurance EXPRESS Provided
Co.
211 10 North American Company for EXPRESS Provided
Life and Health
212 11 Prudential Select EXPRESS Provided
213 12 Security Connecticut Life EXPRESS Provided
Insurance Company
214 13 The Midland Mutual Life EXPRESS Provided
Insurance Company
215 14 Transamerica Occidental Life EXPRESS Provided
216 15 United of Omaha EXPRESS Provided
217 16 Zurich Xxxxxx Life and EXPRESS Provided
Fidelity Life
NOTES:
* = p.d.,q. 2000 Agencies agreed to participate subject to final contracts
being approved and offered. Issues associated with pricing and production
credits have delayed this.
N/A= Contracts were not found in the normal location and a search for them
continues.
" = p.d.,q. Lite agencies were provided an end user license agreement along
with their software at time of installation. Sample is attached as
Appendix 1.
32
33
APPENDIX 1 TO EXHIBIT C
P.D.,Q. LITE END-USER AGREEMENT
This Agreement is made between First Colony Life Insurance Company, a Virginia
Corporation, ("First Colony") and the Customer.
First Colony markets certain computer software called p.d.,q. 2000TM and/or
p.d.,q. LiteTM ("Software") to its General Agents.
The Software is the exclusive property of First Colony. First Colony grants to
the Customer a limited, non-exclusive license to use the Software in accordance
with this Agreement.
The Customer agrees not to reproduce the Software for any purpose other than as
needed as a back-up or to add to multiple computers in a single office. If the
Software is used in multiple offices, a separate license must be purchased for
each office. The Software may not be distributed to third parties without the
prior express written consent of First Colony.
This Agreement may not be assigned by Customer without the express written
consent of First Colony.
THE SOFTWARE AND RELATED DOCUMENTATION ARE PROVIDED "AS IS" WITHOUT WARRANTY OF
ANY KIND, EITHER EXPRESS OR IMPLIED, WITHOUT LIMITATION, IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL FIRST
COLONY BE LIABLE FOR ANY FOR ANY SPECIAL OR CONSEQUENTIAL DAMAGES ARISING FROM
THE USE OR OPERATION OF THE SOFTWARE.
The Customer agrees that First Colony will not be liable and that it will hold
First Colony harmless for any losses, costs, or damages arising out of the
installation, use, or failure of the Software.
This agreement may be terminated at any time upon receipt of written notice by
one party from the other. Upon termination, the Customer agrees to return all
copies of the Software, plus any related materials, to First Colony within five
working days.
This agreement is governed by the laws of the Commonwealth of Virginia.
33
34
EXHIBIT D - HARDWARE
TYPE DESCRIPTION SERIAL # GEFA # USER LOCATION LEASE
PC HP Vectra VL 6/350 US584328708 039074 Xxxxx Xxxxxx Office Yes
Monitor HP D2837 17" KR82968761 039075 Xxxxx Xxxxxx Office Yes
Printer IBM 4019 Laser 00-0000000 039076 Xxxxx Xxxxxx Office No
Laptop IBM Thinkpad 600 78-HG722 Xxxxx Xxxxxx Office Yes
Modem US Robotics Sportster 28.8 00083901534255 Xxxxx Xxxxxx Office No
Fax Modem 65
PC HP Vectra VL 6/350 US84328425 001522 Xxxxxx Office Yes
Xxxxxxxx
Monitor HP D2837 17" KR82864344 001523 Xxxxxx Office Yes
Xxxxxxxx
Laptop Toshiba Satellite PRO 68810179A 001525 All Office Yes
470CDT
Laptop IBM Thinkpad 755CX 9545-HBD 78-0043R 001524 All Office No
Laptop IBM Thinkpad 600 78-HH296 Xxxxxx Office Yes
Xxxxxxxx
PC HP Vectra VL 6/266 US82610597 014450 Xxxxx Xxxxxxx Office Yes
Monitor HP D2837 17" KR82761271 014451 Xxxxx Xxxxxxx Office Yes
Laptop IBM Thinkpad 600 78-FD051 Xxxxx Xxxxxxx Office Yes
Printer HP Laser Jet 4 (Network) USBC213966 021089 All Office No
Printer HP Laser Jet IIIP 3208JL3B7H 021222 All Office No
Scanner Fujitsu Model M3096EX 3858 All Office No
Image Scanner
PC Dell Optiplex Gs 8XPQ4 021220 Kazi Office ?
Monitor Dell D1025HT 17" 7006516 021221 Kazi Office ?
PC HP Vectra VL 6/266 US83007984 021216 Nirmal Office Yes
Monitor NEC Multisync XV17+ 7303007RA 021217 Nirmal Office ?
PC Dell Optiplex Gs 8XPNR 001518 Maya Office ?
Monitor Dell D1025HT 17" 7006519 001519 Maya Office ?
Printer HP LaserJet II D01381 001520 Maya Office No
PC Dell Optiplex Gxa C87GX 039068 Xxxxxxx Office ?
Monitor Dell D1025HT 17" 7007010 039069 Xxxxxxx Office ?
Printer Okidata 321 205C0395188 Xxxxxxx Office No
PC HP Vectra VL 6/350 US84328460 021209 Tyke Office Yes
Monitor HP D2837 17" KR82864688 021208 Tyke Office Yes
Modem US Robotics Sportster 56K 222M29G8M04F 021207 Tyke Office No
Faxmodem
Disk IOMEGA Zip 100 RBBG13A16E 021206 Tyke Office No
PC Dell Optiplex XL 575 4ZXKS 021211 Tyke Office No
Monitor Dell D1028L 17" 84779-C08RC 021210 Tyke Office No
PC HP Vectra VL 6/350 US84328485 014446 Xxxxx Office Yes
Monitor HP D2837 17" MY82867623 014447 Xxxxx Office Yes
PC Compaq Deskpro 590 6524HKW4D114 014445 Xxxxx Office No
Monitor Dell D1025HT 17" 66510A6VNGC7 014444 Xxxxx Office No
Modem US Robotics Sportster 56K 225BB3D98FI1 Xxxxx Office No
Faxmodem
PC Dell Optiplex Gn C87HF 014448 General Office No
Monitor CTX 1565D 15" 1HO-53802341 014449 General Office No
PC Dell Optiplex Gs 9VMWQ 012327 Xxxxx Office ?
Monitor Dell D1028L 17" 84779-COFQ6 012328 Xxxxx Office ?
Printer HP Laserjet IIIP 3128JG41WF 012328 Xxxxx Office No
Laptop IBM Thinkpad 760LD 78-NY182 012329 Xxxxx Office No
Laptop IBM Thinkpad 600 78-FC970 Xxxx Office Yes
34
35
Dock IBM Thinkpad 600 872100621 039070 Xxxx Office Yes
Monitor NEC Multisync M700 17" 8803832UC 039072 Xxxx Office Yes
Printer HP Laserjet IIP 3049J02W6S 039073 Xxxx Office No
Fax Pitney Xxxxx 9820 Fax 0000000 General Office ?
Machine
PC Toshiba Satellite Pro 58731618A Xxxx Office Yes
Dock Toshiba 38082624 Xxxx Office Yes
Monitor NEC Multisync M700 17" 8400646UC Xxxx Office Yes
PC HP Vectra VL 6/266 US80912200 Rightfax Office Yes
Monitor HP D2837 17" KR82761265 Rightfax Office Yes
CRT IBM 3477 23-DVH29 AS400 Office No
CRT IBM 3477 23-HXD47 AS400 Office No
PC Dell Optiplex GL5133 66X3C Tyke Home No
Monitor CTX 00163404344 Tyke Home No
Tape Interface Data 1600BPI Reel 7594 AS400 Office No
To Reel
Modem IBM 7857-017 53-A7652 AS400 Office No
Control Interface Data StOP Tape 92190003 AS400 Office No
Interface
Tape IBM 7208-012 8MM 26-40119 AS400 Office No
Modem US Robotics Sportster 28.8 00083901432265 AS400 Office No
Fax Modem 36
AS400 IBM 9404-D20 10-14935 AS400 Office No
CRT IBM 3477 23-DVL11 AS400 Office No
Printer IBM 4226-302 11-D9714 AS400 Office No
CRT IBM 3477 23-HXD42 AS400 Office No
UPS Best Power Fortress 1050 UPS 199PFE2056C AS400 Office No
AS400 IBM 9402-200 10-16377 AS400 Office No
Fax Supportnet Faxserver 401 2190 AS400 Office No
PC Compaq Deskpro 386s/20 4107HAN20818 AS400 Office No
Monitor Compaq 420T 13" 106298160285 AS400 Office No
Printer Okidata 321 909C0148619 AS400 Office No
Modem Intel 96/96E ? AS400 Office No
Modem IBM 5853 23-00E1948 AS400 Office No
CRT IBM 3477 23-HXD40 AS400 Office No
Printer Okidata 321 309C0503117 AS400 Office No
AS400 IBM 9401-P03 44-90147 AS400 Office No
CRT IBM 3477 23-HXD48 AS400 Office No
Tape IBM 3450-001 QIC1000 1/4" 26-50142 AS400 Office No
Monitor NEC Multisync 2a 1XM19400F AS400 Office No
CRT IBM 3477 23-DVH35 AS400 Office No
AS400 IBM 9401-150 10-2732R AS400 Office No
Printer IBM 4019-001 Laser 11-8025 AS400 Office No
AS400 IBM 9402-E04 10-22221 AS400 Loan-BKA No
AS400 IBM 9402-200 D93FA AS400 Loan-IFS No
CRT IBM 3486 NB093 AS400 Loan-IFS No
Modem IBM 7852-400 42-B6968 AS400 Loan-IFS No
UPS Best Power Fortress LI660B 1S21H178710D1 AS400 Loan-IFS No
DGW
AS400 IBM 9402-200 D942A AS400 Loan-TLC No
CRT IBM 3486 NB094 AS400 Loan-TLC No
Modem IBM 7852-400 42-B8070 AS400 Loan-TLC No
UPS Best Power Fortress LI660B ? AS400 Loan-TLC No
PC HP Vectra XU 6/200 NT US72357314 Test Office Yes
Server
Monitor HP Ultra VGA 1024 15" MY71476071 Test Office Yes
D2825
PC HP Vectra VL 6/266 NT US83006174 Test Office Yes
Server FS14
35
36
Monitor HP D2837 17" MY81911024 Test Office Yes
CD Philips CDD3610 Recordable 81570364 Test Office No
PCA363RW01
PC Dell Optiplex GL5133 PC WEX99 Test Office No
Win/98
Monitor Dell D1728D-LS 17" 04036A6C02 Test Office No
PC Dell Optiplex GL5133 Novell 76S1W Test Office No
Server
Monitor Dell D1025HT 17" 8097013 Test Office No
PC Dell Optiplex Gn+ C87HJ Test Office ?
Monitor Dell D1028L 17" 66746-J2FXN-97 Test Office ?
PC Dell Optiplex Gxa Xxxxxxxx X0X0X Test Office Yes
Server
Monitor Dell D1025TM 17" 7093071 Test Office Yes
PC Dell Optiplex GL5133 7SHSH Test Office No
Winfax Pro Host
Modem IBM 7852-400 42-B9508 Test Office No
Modem US Robotics Sportster 56K 22SBB3B97P10 Test Office No
Faxmodem
PC Compaq Prolinea 2500 NT D741BPT11136 Development FCL CR ?
Server (DB04)
PC HP Vectra VL 6/266 US81922843 001528 Xxxx Office Yes
Monitor HP D2837 17" KR82115030 001529 Xxxx Office Yes
Laptop IBM Thinkpad 600 78-HH147 043560 Xxxx Office Yes
Printer IBM 4019-001 Laser 11-M2613 001530 Xxxx Office Yes
PC HP Vectra VL 6/350 US84328729 012324 Xxxxxxx Office Yes
Monitor HP D2837 17" MY82867608 012325 Xxxxxxx Office Yes
PC Dell Optiplex Gxa D593S 023574 Xxxx Office Yes
Monitor Dell Trinitron 17" 7090856 023573 Xxxx Office Yes
PC Dell Optiplex GS 84C9G Xxxx Home ?
Monitor Dell Trinitron 17" 7142058 Xxxx Home ?
PC Dell Optiplex Gs 8XPPR 023545 Xxxxx Office ?
Monitor HP D28327 17" MY82980458 023546 Xxxxx Office ?
PC Dell Optiplex Gs 8XPQ1 023543 Xxxxxx Office ?
Monitor Dell D1058L 17" 84779-CODSX 023544 Xxxxxx Office ?
PC Dell Optiplex Gs 8XPPW 023541 April Office ?
Monitor CTX VL700 17" 001-63601178 023542 April Office No
Modem Intel FM-96VR/1 039408 Xxxxxx Office No
36
37
EXHIBIT E - TRADEMARKS
Xxxx Serial No. Registration No. Filing Date International Class
---- ---------- ---------------- ----------- -------------------
P.D.,Q. 2000 75-378190 2218631 10/22/1997 009
P.D.,Q. Lite 74-412193 1849814 7/12/1993 009
37
38
EXHIBIT F - PROGRAMS EMPLOYEES
Employee Title
-------- -----
[...***...] VP-Group Leader, IT
[...***...] Asst. VP-Leader, IT
[...***...] Asst. VP-Project Leader
[...***...] Sr. Programmer/Analyst
[...***...] Sr. Programmer/Analyst
[...***...] Sr. Programmer/Analyst
[...***...] Programmer/Analyst
[...***...] Programmer/Analyst
[...***...] Proj. Spec.
[...***...] Educ. Coord.
[...***...] Supp. Rep.
[...***...] Supp. Rep.
[...***...] Supp. Rep.
* CONFIDENTIAL TREATMENT REQUESTED
38
39
EXHIBIT G - ANCILLARY AGREEMENTS
MAINTENANCE AGREEMENTS:
1. IBM ServicePlan, Service Plan Offerings between Owner and International
Business Machines Corp., dated 4/9/90
DEVELOPMENT AGREEMENTS:
The following end-user/shrink wrap software licenses:
DESCRIPTION QTY
----------- ---
Microsoft Windows NT Server Version 4.0 5
Citrix WinFrame Version 1.7 (15 User License) 1
Microsoft Windows NT Workstation Version 4 20
Microsoft Windows 95 6
Microsoft Windows 98 2
Novell Netware 1
Fax/401 1
GUI/400 ADK 2
Oracle Workgroup Server Version 7.3.4 For NT 4
Oracle Workgroup Server Version 7.3.4 For Novell 1
Personal Oracle Version 7.3.3 10
Microsoft Office 97 30
Microsoft Project 98 7
Microsoft Outlook 98 30
Powerbuilder Version 4 6
Powerbuilder Version 5 6
Powerbuilder Version 6 6
Powerdoc For Powerbuilder 6
APOL 6
Intersolv PVCS 6
Powerbuilder FUNCKY 32 6
39
40
Norton Antivirus 33
Norton Utilities 1
Winfax Pro 9.0 1
Rightfax Version 6.0 1
Castelle FaxPress Version 5.0 (Includes Interface) 1
Quickbooks 1
Peachtree Accounting 1
Visual SlickEdit 4
Microsoft Visual Studio 2
Activebar 1
Sheridan Datawidgets Version 3.1 2
Sheridan Calendar Widgets 2
True DB Grid 2
Laplink 7.5 3
PC Anywhere 3
Crystal Reports 7.0 3
Crescent Internet Toolpak 1
Sheridan ActiveListBar 2
Installshield 5.1 1
Microsoft Act 1
Goldmine 1
ccMail Mobile 1
Xxxxx LabelPro 3.0 1
Hardcore Visual Basic 1
Helpbreeze 2.0 1
Sheridan Code Assist V1.1 1
VB5.0 Enterprise Edition 1
Infomaker 5.0 3
Paperclip 1
Demoshield 5.0 1
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Paintshop Pro 1
IBM AS/400 Operating System/400 Version 4.1 1
IBM AS/400 Program Development Manager Version 4.1 1
IBM AS/400 ILE RPG Version 4.1 1
IBM Query/400 Version 4.1 1
IBM Client Access/400 Version 3.2 3
IBM Operating System/400 Version 3.1 1
IBM AS/400 Program Development Manager Version 3.1 1
IBM AS/400 ILE RPG Version 3.1 1
IBM Query/400 Version 3.1 1
IBM Operating System/400 Version 3.2 3
IBM AS/400 Program Development Manager Version 3.2 3
IBM AS/400 ILE RPG Version 3.2 1
IBM Query/400 Version 3.2 3
IBM AS/400 Operating System/400 Version 2.2 1
IBM AS/400 Program Development Manager Version 2.2 1
IBM AS/400 RPG/400 Version 2.2 1
IBM Query/400 Version 2.2 1
IBM Officevision/400 Version 2.2 1
IBM Client Access/400 Version 2.2 1
Netsoft NS/Portfolio Select Version 2.2 1
Netsoft NS/Elite Version 3.1 1
IBM 3164 Remote Emulation Software 5
PKZip 6
PKWare 4
Microsoft FrontPage Express 1
Microsoft Source Safe Version 5.0 1
Mouse Xxxx NT 1
Microsoft Outlook Express 2
MGA NT Power Desk 3.32 1
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HTML Help Workshop 1
Powerbuilder 5.0 Computer Based Training - Performance Package 1
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EXHIBIT H - PURCHASE PRICE ALLOCATION
Exhibit H will be mutually agreed upon by Owner and Purchaser and incorporated
herein within sixty (60) days after the Closing Date.
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EXHIBIT I - REQUIRED CONSENTS
The following agreements require consent in order to be assigned to Purchaser
hereunder:
1. Customer Agreements for p.d.,q. Express, and Agreements for Licensed
Programs for p.d.,q. Express Customers, with the following customers:
VENDEE (CUSTOMER):
Aetna Life Insurance Co.
Connecticut General Life Insurance Company
Continental Casualty Company
Grenel Financial Corporation (Connecticut National)
First Penn.-Pacific Life Insurance Company
GECS Insurance Companies
Life Insurance Company of Xxxxxxxx
Xxxxxxx Benefit Life
Metropolitan Life Insurance Co.
North American Company for Life & Health
Prudential Select
Security Connecticut Life Insurance Company
Zurich Xxxxxx Life Ass., Co. and Fidelity Life Assoc.
The Midland Mutual Life Insurance Company
Transamerica Occidental Life
United of Omaha
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2. Oracle Business Alliance Program Agreement, dated March 5, 1996
3. Cybertek Value Added Remarketing Agreement, dated August 4, 1998
4. NAPS Exclusive Remarketing Agreement, dated November 8, 1983
The following agreements are silent as to assignability by Owner:
1. NAPS Purchase Agreement, dated November 8, 1983
2. Comm-Press Software License Agreement, dated November 24, 1993.
3. advantis Licensed Program Redistribution Agreement, signed by Owner on
June 28, 1995
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EXHIBIT J - FINANCIAL SCHEDULES
p.d.,q. EXPENSE ANALYSIS COMPARISON
1997 / 1998 / 1999
1997 1998 1999
TOTAL TOTAL TOTAL
--------- ---------- ---------
Salaries [...***...] [...***...] [...***...]
Employee Welfare [...***...] [...***...] [...***...]
Subscriptions [...***...] [...***...] [...***...]
Legal Fees [...***...] [...***...] [...***...]
Outside Consultants (see detail, below) [...***...] [...***...] [...***...]
Travel and Living [...***...] [...***...] [...***...]
Printing & Postage [...***...] [...***...] [...***...]
IVANS (Telecommunications) [...***...] [...***...] [...***...]
Agents' Balances Charged-off [...***...] [...***...] [...***...]
Agent Conferences [...***...] [...***...] [...***...]
Cost of Equipment [...***...] [...***...] [...***...]
Equipment Rental, Including PCs [...***...] [...***...] [...***...]
Hardware Maintenance [...***...] [...***...] [...***...]
Office Supplies [...***...] [...***...] [...***...]
PC Supplies [...***...] [...***...] [...***...]
Software Maintenance [...***...] [...***...] [...***...]
Write-off of p.d.,q. Inventory [...***...] [...***...] [...***...]
--------- ---------- ---------
[...***...] [...***...] [...***...]
--------- ---------- ---------
Less: Charges not part of P.D.,Q. cost
structure, but part of First Colony Life:
IVANS [...***...] [...***...] [...***...]
Y2K Consultants [...***...] [...***...] [...***...]
--------- ---------- ---------
p.d.,q. RUN RATE EXPENSES [...***...] [...***...] [...***...]
--------- ---------- ---------
* CONFIDENTIAL TREATMENT REQUESTED
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EXHIBIT K - FORM OF BUSINESS AND TECHNOLOGY STRATEGIC ALLIANCE AGREEMENT
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