Exhibit 10.2
Letter Agreement
March 20, 2003
Verticalnet, Inc.
Verticalnet Enterprises, LLC
000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxx, XX 00000
Dear Verticalnet:
Reference is made to the Security Agreement dated February 28, 2002 by
and among Converge, LLC and Converge, Inc., Verticalnet, Inc. ("VNI") and
Verticalnet Enterprises, LLC ("VNE") (the "Security Agreement"), whereby
Converge, LLC granted VNI and VNE a subordinated security interest in certain
assets of Converge, LLC as described in the Security Agreement (the
"Collateral"). VNI and VNE are sometimes collectively referred to herein as
"Vert," and Converge, Inc. and Converge, LLC are sometimes collectively referred
to herein as "Converge."
Converge has informed Vert that Converge intends to sell substantially
all the assets of Converge to PCG Trading, LLC, and in connection with such sale
transaction, PCG Trading, LLC and certain of its affiliates intend to enter into
a Credit and Security Agreement with Fleet Capital Corporation ("Fleet
Capital").
As a condition to (a) the completion of the sale transaction to PCG
Trading and (b) the closing of the Fleet Capital credit facility (collectively,
the "Sale Transactions"), PCG Trading and Fleet Capital are requiring that
Vert's security interest and lien in the Collateral be released.
In connection with the Sale Transactions and the subsequent
dissolution and winding up of Converge, Converge is also requesting the
termination of the following agreements on the terms set forth herein: (a) the
Amended and Restated Subscription License Agreement effective as of October 1,
2001, by and among VNI, VNE and Converge, as amended (the "Restated SLA"), and
(b) the Maintenance and Support Agreement effective as of October 1, 2001, by
and among VNI, VNE and Converge, as amended (the "Amended M&S Agreement").
For good and valuable consideration which the parties hereby
acknowledge, VNI, VNE, Converge, Inc., Converge, LLC and PCG Trading, LLC hereby
agree as follows:
1 (a) PCG Trading, LLC shall pay Vert $330,000, payable $33,000 per
month for ten consecutive months beginning April 1, 2003 and continuing on the
first day of each calendar month for the nine months thereafter, and Vert agrees
to assist in maintenance and support for its software installed at Converge
pursuant to the Restated SLA (the "Products") for the six month period following
the Effective Time at the resource level set forth in the Amended M&S Agreement.
(b) PCG Trading LLC shall have the right to use the Products in
accordance with the terms and conditions set forth in the Restated SLA for a
term of six (6) months from the Effective Time, at which time such right shall
terminate (unless such right is extended upon the mutual agreement of the
parties). In the event PCG Trading LLC shall default in the payment when due of
any amount set forth herein, Vert shall have the right, but not the obligation,
to make a Vert Remedy Election, exercisable by delivering written notice thereof
to PCG Trading within 10 Business Days after the occurrence of such event of
default by PCG Trading. Upon the earlier occurrence of (i) a Vert Remedy
Election or (ii) the termination of the right to use the Products as set forth
above, (A) PCG Trading shall erase, destroy or return to Vert all Products,
copies of the Source Code of such Products, any Confidential Information of Vert
or any of the Vert Subsidiaries respecting such Source Code, and any and all
Confidential Information of or provided by Vert, and, upon Vert's written
request, PCG Trading shall certify its compliance with this Section in writing,
and (B) Vert shall cease performing any maintenance and support services.
VerticalNet, Inc.
VerticalNet Enterprises, LLC
March , 2003
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Page 2
All defined terms in this paragraph not otherwise defined in this Agreement
shall have the meanings set forth in the Restated SLA.
2. The Security Agreement, the Restated SLA and the Amended M&S
Agreement shall be deemed terminated immediately preceding the consummation of
the Sale Transactions (the "Effective Time"). For purposes of clarity, this
Agreement shall not be effective (and the Security Agreement, the Restated SLA
and the Amended M&S Agreement shall remain in full force and effect) unless each
of the transactions comprising the Sale Transactions as contemplated on the date
hereof are consummated. Nothing set forth herein will relieve either Vert or
Converge from those provisions of the Restated SLA and the Amended M&S Agreement
that explicitly survive termination of the Restated SLA and the Amended M&S
Agreement and each party will comply with its obligations that are to survive
upon termination the Restated SLA and the Amended M&S Agreement, other than
those provisions in said agreements which provide for further payment of fees
for goods or services to Vert (including Section 4.1 and 4.2 of the Amended M&S
Agreement) which shall be deemed terminated.
3. There shall be no further obligations of Converge, Inc., Converge,
LLC or their respective affiliates under the Security Agreement, the Restated
SLA or the Amended M&S Agreement as of and following the Effective Time.
4. There shall be no further obligations of Vert or either of their
respective affiliates under the Restated SLA or the Amended M&S Agreement as of,
and following, the Effective Time.
5. Subject to Section 2 of this Agreement, the security interest/lien
of Vert in the Collateral or in any other assets of Converge, Inc., Converge,
LLC or its affiliates shall be released and terminated as of the Effective Time.
6. Converge is hereby authorized to file Uniform Commercial Code
financing statement terminations with respect to the Uniform Commercial Code
financing statement(s) filed in favor of VNI and VNE with respect to the
security interest and lien of VNI and VNE pursuant to the Security Agreement.
7. Any and all such terminations and lien release documents shall be
prepared by or on behalf of Converge at Converge's expense.
8. VNI and VNE confirm that they have not previously assigned their
rights or obligations under the Security Agreement, the Restated SLA or the
Amended M&S Agreement, and have the right to enter into this Agreement.
9. Converge, Inc. and Converge, LLC confirm that they have not
previously assigned their rights or obligations under the Security Agreement,
the Restated SLA or the Amended M&S Agreement, and have the right to enter into
this Agreement.
10. This Agreement shall be binding upon and inure to the benefit of
each party's successors and assigns.
11. This Agreement shall be governed by the laws of the Commonwealth
of Pennsylvania as applied to agreements entered into and to be performed
entirely within Pennsylvania between Pennsylvania residents, excluding its
conflicts of law provisions.
12. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument. A facsimile copy of this Agreement, including the
signature pages hereto, shall be deemed an original.
VerticalNet, Inc.
VerticalNet Enterprises, LLC
March , 2003
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Page 3
This Agreement is acknowledged and agreed to by the undersigned as of the
date first written above:
CONVERGE, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman of the Board
CONVERGE, LLC
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: COO
PCG TRADING, LLC
By: /s/ Xxxx Xxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxx
Title: Secretary
VERTICALNET, INC.
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: President and CEO
VERTICALNET ENTERPRISES, LLC
By: /s/ Xxxxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: President and CEO
