EXCLUSIVE SOFTWARE LICENSE REPURCHASE AGREEMENT
Exclusive Software License Repurchase Agreement, dated March 31,
1998 (the "Repurchase Agreement"), by and among SOFTWARE INVESTMENTS LIMITED, a
British Virgin Islands company ("SIL"), CARE CORPORATION LIMITED, a British
Virgin Islands company ("CCL") (both SIL and CCL having principal offices at
▇▇▇▇▇▇ Building, P.O. Box 3186, Main Street, Road Town, Tortola, British Virgin
Islands), COVER-ALL TECHNOLOGIES INC., a Delaware corporation having principal
offices at ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("CTI"), and
COVER-ALL SYSTEMS, INC., a Delaware corporation and wholly owned subsidiary of
CTI ("CASI").
W I T N E S S E T H:
WHEREAS, CCL is the exclusive worldwide owner, except in the
Commonwealth of Australia, the Dominion of New Zealand, and the United States of
America, of all rights in certain computer software and related documentation
pertaining to the administration of worker's compensation (hereinafter referred
to as the "CARE Software");
WHEREAS, on March 31, 1996, pursuant to the terms of that certain
Exclusive Software License Agreement, as amended by an Amendment to Exclusive
Software License Agreement dated March 14, 1997 (collectively, the "Original
Agreement"), by and among CCL, CTI (formerly known as Warner Insurance Services,
Inc.) and, for limited purposes of joining in certain sections of the Original
Agreement, CASI ("CASI" and both CTI and CASI together may be referred to herein
as "CTI"), CCL granted to CTI, among other things, an exclusive, fully paid up,
perpetual license for the CARE Software in Canada, Mexico, Central America and
South America, while retaining all rights outside Canada, Mexico, Central
America and South America;
WHEREAS, on March 31, 1996, pursuant to the terms of that certain
Stock Purchase Agreement, as amended by an Amendment to Stock Purchase Agreement
dated March 14, 1997 (collectively, the "Stock Purchase Agreement"), by and
among CCL, CTI and SIL, in consideration for CCL's transferring the CARE
Software rights under the Original Agreement, CTI issued to CCL 2,500,000 shares
of CTI's common stock, $.01 par value per share (the "License Shares"), and, as
further provided by the Stock Purchase Agreement, CTI was granted the right to
repurchase the License Shares if certain conditions were satisfied pursuant to
the Stock Purchase Agreement; and
WHEREAS, CCL desires to repurchase from CTI all of the rights in the
CARE Software granted to CTI pursuant to the terms of the Original Agreement
(the "CARE Software Rights") in consideration for the repurchase price of
$5,000,000 and other consideration, all as set forth herein.
03/31/98/JOD/12006/001/AGREE/262889.4
NOW, THEREFORE, in consideration of these premises, the mutual
covenants and agreements contained herein and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Repurchase of CARE Software Rights. CCL hereby repurchases from
CTI (the "Repurchase") the CARE Software Rights for the consideration and on the
terms hereinafter described.
2. Grant of Nonexclusive Reseller Rights. CTI shall grant CCL the
nonexclusive right to resell in all territories outside of the United States (i)
CTI's product line (the "TAS 2000 Software") consisting of the suite of computer
applications for property/casualty and health care insurers designed to enable a
client-driven re-engineering of the insurer's business process and (ii) CTI's
Classic product line ("Classic") consisting of a set of LAN based PC software
packages designed to automate the rating and issuance tasks in the property and
casualty insurance industry (such rights to the ▇▇▇ ▇▇▇▇ Software and Classic
are collectively referred to as the "TAS License"), in the form of Nonexclusive
Reseller Rights Agreement annexed hereto as Exhibit A (the "TAS Reseller
Agreement").
3. Consideration of Repurchase. In consideration of the Repurchase,
CCL shall pay to CTI the amount of $5,000,000 as follows: (1) $500,000 in
immediately available funds, payable on the date hereof, receipt of which is
hereby acknowledged by CTI; and (2) $4,500,000 to be paid in equal semi-annual
installments of $500,000, beginning on September 30, 1998 and on each March 31
and September 30 thereafter, unless payment is otherwise accelerated, until paid
in full, all as evidenced by a note on the terms and in the form annexed hereto
as Exhibit B (the "Note"), the repayment of which shall be secured by the pledge
of certain shares of common stock, $.01 par value per share, of CTI owned by CCL
pursuant to the terms of a pledge agreement in the form annexed hereto as
Exhibit C (the "Pledge Agreement").
4. Consideration of Grant of TAS License. In consideration of the
grant of the TAS License, CCL shall grant to CTI the nonexclusive right to
resell the CARE Software, pursuant to the terms and in the form of Nonexclusive
Reseller Rights Agreement annexed hereto as Exhibit D (the "CARE Reseller
Agreement").
5. Removal of Stock Restriction, Cancellation of Bonus Warrants and
Release of Parties. As further consideration for the transactions contemplated
by this Repurchase Agreement, the parties hereto agree that, as of the date
hereof:
(i) CTI's right to purchase the License Shares pursuant to
Section 5 of the Stock Purchase Agreement is hereby terminated;
(ii) CCL's right to receive the Bonus Warrants granted under
Section 5(k) of the Stock Purchase Agreement is hereby terminated;
(iii) all provisions of the Original Agreement are hereby
terminated and released and each of CCL, CTI and CASI hereby remise and release
each other from any claims or liabilities arising thereunder; and
(iv) each of CTI, SIL and CCL each agree that Sections 4, 5
and 6 of the Stock Purchase Agreement are hereby terminated and shall have no
further force and effect and that each of the parties hereby remises and
releases the other parties thereto from any claims or liabilities arising under
any such Sections. Except as amended aforesaid, the Stock Purchase Agreement
shall continue in full force and effect. The parties hereby expressly
acknowledge that the License Shares remain subject to those registration rights
as provided for in Section 9.2 of the Stock Purchase Agreement. CTI shall use
its best efforts to register the License Shares pursuant to such Section 9.2 as
soon as practicable after the date hereof.
6. Deliveries. Contemporaneous with the execution of this Repurchase
Agreement, the parties hereby acknowledge receipt of the following in connection
with the consummation of the transactions contemplated herein:
a. the Note, fully executed by CCL as Payor;
b. payment by CCL to CTI, by wire transfer, in the amount
of $500,000;
c. the Pledge Agreement, fully executed by CCL, as Pledgor,
and CTI, as Secured Party, and, pursuant to the Pledge Agreement, delivery by
CCL to CTI of (i) the stock certificates evidencing the Pledged Shares (as
defined in the Pledge Agreement) and (ii) stock powers relating to the Pledged
Shares executed in blank;
d. the CARE Reseller Agreement, executed by CCL and CTI; and
e. the TAS Reseller Agreement, executed by CCL and CTI.
7. Miscellaneous.
7.1 Entire Agreement. This Repurchase Agreement, the CARE Reseller
Agreement, the TAS Reseller Agreement, the Note and the Pledge Agreement,
together with all attachments thereto and made a part thereof, contain the
entire agreement among CTI, CASI, SIL and CCL with respect to the matters set
forth herein and supersede all prior agreements and understandings among them as
to the subject matter hereof. No party shall be bound by nor shall be deemed to
have made any representations, warranties or covenants except those contained
herein.
7.2 Benefits; Assignments. All of the terms and provisions of this
Repurchase Agreement, the CARE Reseller Agreement, the TAS Reseller Agreement,
the Note and the Pledge Agreement shall bind and inure to the benefit of CTI,
CASI, SIL and CCL and their respective successors and assigns.
7.3 Notices. Any notice, request, consent, instruction or other
document to be given hereunder shall be in writing and shall be deemed to be
duly given if personally delivered with receipt acknowledged, if mailed by
registered or certified mail, first class, postage prepaid, if delivered by a
nationally recognized overnight courier service or if transmitted by facsimile
machine (with a confirmation copy to be sent by first class mail) addressed as
follows:
If to CTI or CASI:
COVER-ALL TECHNOLOGIES INC.
▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
▇▇▇▇ & Priest LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
or to such other address or such other person(s) as CTI or CASI may designate by
written notice to the other parties hereto; and
if to SIL or CCL:
Software Investments Limited
Care Corporation Limited
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ House
▇▇▇▇▇ Street
St. Helier, Jersey JE4 8SG
Channel Islands
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
Gardere & ▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address or such other person(s) as CCL may designate by written
notice to the other parties hereto.
7.4 Governing Law. This Repurchase Agreement shall be governed by
and construed under and enforced in accordance with the laws of the State of New
York.
7.5 Severability. If any provision of this Repurchase Agreement
shall be held invalid or unenforceable, such invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or render
invalid or unenforceable any other severable provision of this Repurchase
Agreement, and this Repurchase Agreement shall be carried out as if any such
invalid or unenforceable provision were not contained herein.
7.6 Modification, Waivers, Etc. Neither this Repurchase Agreement
nor any provision hereof may be changed, waived, discharged or terminated orally
but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.
7.7 Headings. All section and subsection headings herein are for the
convenience of the reader and shall not be relied upon in construing this
Repurchase Agreement.
7.8 Further Assurances. At any time and from time to time, upon the
reasonable request of any party hereto, the requested party shall execute,
deliver and acknowledge, or cause to be executed, delivered and acknowledged,
such further documents and instruments and do such other acts and things as the
requesting party may reasonably request in order to fully effect the purposes of
this Repurchase Agreement and the transactions contemplated hereby.
7.9 Agent for Service of Process. (a) Each of SIL and CCL hereby
irrevocably appoints Gardere & ▇▇▇▇▇, L.L.P. as its agent for receipt of service
of process from CTI or CASI or any of their successors or assigns in accordance
with Section 7.10 hereof in respect of any matter relating to or in connection
with this Repurchase Agreement and the transactions contemplated hereby
including, but not limited to, all matters of construction, validity and
performance of this Repurchase Agreement. Each of SIL and CCL hereby agrees that
service upon it shall be effective if made by notice to Gardere & ▇▇▇▇▇, L.L.P.
pursuant to Section 7.3 hereof.
(b) Each of CTI and CASI hereby irrevocably appoints ▇▇▇▇ &
Priest LLP as its agent for receipt of service of process from SIL or CCL or any
of their successors or
assigns in accordance with Section 7.10 hereof in respect of any matter relating
to or in connection with this Repurchase Agreement and the transactions
contemplated hereby including, but not limited to, all matters of construction,
validity and performance of this Repurchase Agreement. Each of CTI and CASI
hereby agrees that service upon it shall be effective if made by notice to ▇▇▇▇
& Priest LLP pursuant to Section 7.3 hereof.
7.10 Consent to Jurisdiction. Any suit, action or proceeding against
any party hereto with respect to this Repurchase Agreement, including all
matters of construction, validity and performance hereof, or any judgment
entered in any court in respect hereof may be brought in the Supreme Court of
the State of New York, County of New York, or in the United States District
Court for the Southern District of New York and each party hereto hereby submits
to the nonexclusive jurisdiction of such courts for the purpose of any such
suit, action, proceeding or judgment. Nothing herein shall in any way be deemed
to limit the ability of any party hereto to serve any writs, process or
summonses in any other manner permitted by applicable law or to obtain
jurisdiction over the other.
7.11 Counterparts. This Repurchase Agreement may be signed in any
number of counterparts, each of which shall be deemed an original and together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Repurchase
Agreement on the date above first written.
SOFTWARE INVESTMENTS LIMITED
By:___________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
CARE CORPORATION LIMITED
By:___________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
COVER-ALL TECHNOLOGIES INC.
By:___________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
COVER-ALL SYSTEMS, INC.
By:___________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer
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