Exhibit 10.3
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TRANSITION SERVICES AGREEMENT
THIS TRANSITION SERVICES AGREEMENT, dated as of November 1, 2001 (this
"Agreement"), by and between XXXXXX XXXXXXX & COMPANY, a Delaware corporation
("Xxxxxx Xxxxxxx"), and EBENX, INC., a Minnesota corporation ("eBenX").
WHEREAS, Xxxxxx Xxxxxxx and eBenX are parties to an Asset Purchase
Agreement, dated as of October 19, 2001 (the "Asset Purchase Agreement") (all
capitalized terms used herein and not defined herein shall have the meanings set
forth in the Asset Purchase Agreement), pursuant to which Xxxxxx Xxxxxxx has
transferred (the "Transfer") to eBenX substantially all of its assets and
liabilities relating to Xxxxxx Xxxxxxx'x health and welfare services business
(the "Business");
WHEREAS, in conjunction with the Transfer, the transition of certain
functions and services from Xxxxxx Xxxxxxx to eBenX will be required over a
period of time following the Transfer; and
WHEREAS, the parties have agreed to the procedures for such transition
upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
THE SERVICES
SECTION 1.01 Provision of Xxxxxx Xxxxxxx Services.
(a) The following are the transition services relating to the Business
to be rendered by Xxxxxx Xxxxxxx and/or its Affiliates to eBenX (each, a
"Service" and, collectively, the "Services"):
(i) Finance and Accounting:
1. Xxxxxx Xxxxxxx will provide support and access to the
AEGIS billing system through March 31, 2002. eBenX
may extend these services through June 30, 2002 by
written notice to Xxxxxx Xxxxxxx no later than
January 31, 2002. Set-up costs incurred by Xxxxxx
Xxxxxxx to add eBenX to the AEGIS billing system
shall be paid by eBenX. Such costs, estimated to be,
but not limited to, approximately $10,000, will be
set forth in the billing statement described in
Section 1.05(a) hereof.
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2. Xxxxxx Xxxxxxx will provide support and access to the
EZBill system through July 31, 2002 or such earlier
date selected by eBenX on at least 60 days' advance
written notice.
3. Xxxxxx Xxxxxxx shall use reasonable commercial
efforts to provide such information as may be
required by eBenX and its auditors in connection with
the preparation of pro forma and actual financial
statements with respect to the Transfer and that
portion of fiscal year 2001 following the Transfer.
4. Xxxxxx Xxxxxxx shall use reasonable commercial
efforts to provide support for eBenX's Accounts
Receivable collection efforts described in Section
1.01(f) below.
(ii) Compensation and Benefits; COBRA. (A) Notwithstanding anything
to the contrary in the Asset Purchase Agreement, each
Transferred Employee shall, solely for purposes of
administering the payment of such Transferred Employee's base
compensation from the Closing Date through November 6, 2001 or
such other time as the parties hereto shall mutually agree
(the "Transition Date"), remain on Xxxxxx Xxxxxxx'x payroll
through the Transition Date, and eBenX shall reimburse Xxxxxxx
Xxxxx & Co. ("Xxxxxxx Xxxxx") for all payroll expenses as set
forth herein for the period from November 1, 2001 through the
Transition Date (the "Transitional Salary"); provided,
however, that each Transferred Employee shall, for all other
purposes, be deemed an employee of eBenX as of the Closing
Date. Notwithstanding the foregoing or anything to the
contrary in the Asset Purchase Agreement, the individual
listed on Exhibit A hereof shall remain an employee of Xxxxxx
Xxxxxxx until such time as the parties hereto shall mutually
agree (the "Extension Period"), and eBenX shall reimburse
Xxxxxxx Xxxxx for the expenses as set forth as an
approximation on Exhibit A hereof (and updated by Xxxxxx
Xxxxxxx before such payment is made by eBenX) (the "Extension
Expenses") related to such individual's continued employment
with Xxxxxx Xxxxxxx for the period from November 1, 2001
through the end of the Extension Period as set forth herein;
provided, however, that such individual shall, for all other
purposes, be deemed an employee of eBenX as of the Closing
Date. eBenX shall remit to Xxxxxx Xxxxxxx an amount equal to
the aggregate Transitional Salary plus the Extension Expenses
paid to all Transferred Employees as set forth as an
approximation on Exhibit A hereof (and updated by Xxxxxx
Xxxxxxx before such payment is made by eBenX) plus the
employer portion of FICA and other applicable federal payroll
taxes associated with such payment upon submission to eBenX by
Xxxxxx Xxxxxxx of the billing statement set forth in Section
1.05(a) hereof.
(B) For the period commencing on the Closing Date
through November 30, 2001, each Transferred Employee shall be
eligible to continue to participate in the medical (excluding
health care and dependent care flexible spending accounts),
dental, life and accidental death or dismemberment plans
provided by an Affiliate of Xxxxxx Xxxxxxx, in which he or she
participated
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immediately prior to the Closing Date, on the same terms and
conditions applicable to employees of Xxxxxx Xxxxxxx whose
employment is terminated other than on the last day of a
calendar month. eBenX shall reimburse Xxxxxxx Xxxxx, upon
submission to eBenX by Xxxxxx Xxxxxxx of the billing statement
set forth in Section 1.05(a) hereof, for the employer portion
of the premiums applicable to the continuation of such
coverage for the period from November 1, 2001 through November
30, 2001 as set forth as an approximation on Exhibit A hereof
(and updated by Xxxxxx Xxxxxxx before such payment is made by
eBenX) plus all reasonable costs and expenses associated with
the administration of such premium payments.
(C) For the period commencing on December 1, 2001
through December 31, 2001 (the "Benefits Transition Period"),
each Transferred Employee shall be eligible to continue his or
her coverage under the medical and dental plans provided by an
Affiliate of Xxxxxx Xxxxxxx, in which he or she participated
immediately prior to the Closing Date, under Section 4980B(f)
of the Code ("COBRA Coverage"). eBenX shall pay the same
employer portion of the applicable premiums for providing
COBRA Coverage during the Benefits Transition Period that
would have been payable by Xxxxxxx Xxxxx had such Transferred
Employee remained employed by Xxxxxx Xxxxxxx. Each Transferred
Employee shall pay the employee portion of the applicable
premiums for providing his or her COBRA Coverage during the
Benefits Transition Period. Xxxxxx Xxxxxxx shall be
responsible for providing each Transferred Employee with the
appropriate forms and processing such forms to effect such
Transferred Employee's COBRA coverage by this Section
1.01(a)(ii)(C).
(D) Except as otherwise specifically provided in this
clause (ii), the Transferred Employees shall not be entitled
to any compensation or benefits or to participate in any
employee benefit programs of Xxxxxx Xxxxxxx or its Affiliates
on or after the Closing Date.
(iii) FAS 106 Support. eBenX shall collect all revenues related to
FAS 106 opinions from Transferred Clients and those Terminated
Clients whose termination is not effective until after Closing
related to the fiscal year ending 2001. Xxxxxx Xxxxxxx shall
be conduct all work for, and shall charge eBenX for, expenses
incurred for the retirement related FAS 106 opinion work
related to the fiscal year ending 2001 as outlined in Exhibit
B. eBenx shall be conduct all work for all health and welfare
or retirement FAS 106 opinion work for fiscal year 2002, and
thereafter, and eBenX may, in its sole discretion, choose to
contract with Xxxxxx Xxxxxxx to support such work.
(iv) Real Estate. (A) Xxxxxx Xxxxxxx hereby grants to eBenX a
license (the "License") to use the Licensed Space (as
hereinafter defined) as a temporary work area for its
Transferred Employees engaged in the Business, who, on the
date hereof, are located in such Licensed Space, such License
to take effect upon the later of (1) the Closing and (2) if
necessary, the obtaining of any consent of any overlandlord
(each, a "Consent") to the License. If any Consent is not
obtained
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or, in the case of Chicago (as hereinafter defined) or Second
Avenue (as hereinafter defined), a sublease is not executed
and delivered by Xxxxxx Xxxxxxx and eBenX, in either case,
within 30 days after the Closing, the portion of the Licensed
Space to which such Consent or sublease, as applicable,
relates shall no longer be considered a part of the Licensed
Space. The "Licensed Space" shall be such portion as Xxxxxx
Xxxxxxx and eBenX shall mutually agree of the premises leased
by Xxxxxx Xxxxxxx or Xxxxxxx Xxxxx (as hereinafter defined),
as the case may be, at one or more of the following
properties: 000 Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
("Chicago"); 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000;
0000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 ("Second
Avenue"); 0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and
00 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 ("San
Francisco"). The License shall expire as to any Licensed Space
upon the earliest to occur of: (1) the execution and delivery
of, and the receipt of any necessary consents for, a sublease
of such Licensed Space, all as contemplated by Section 5.14 of
the Asset Purchase Agreement and, in the case of that portion
of the Licensed Space leased by Xxxxxxx Xxxxx, the consent
contemplated by clause (H) hereof; (2) the thirtieth day after
delivery by eBenX to Xxxxxx Xxxxxxx of notice of its intention
to terminate the License as to such Licensed Space; and (3)
one (1) year following the Closing with respect to Second
Avenue; December 31, 2001 with respect to San Francisco and
the one hundred eightieth day after the Closing with respect
to all other Licensed Space.
(B) During the term of the License, eBenX shall be
responsible for, and shall pay to Xxxxxx Xxxxxxx, all costs
and expenses attributable to the Licensed Space as set forth
on Exhibit C hereof, all such amounts being payable within ten
(10) days of demand therefor.
(C) The License is and shall at all times be subject
and subordinate to the applicable lease of the Licensed Space,
and eBenX agrees to comply with all of the terms of said lease
as applicable to the Licensed Space as fully and completely
and with the same force and effect as if set forth at length
herein.
(D) eBenX accepts the Licensed Space in its "AS IS"
condition on the date hereof, and agrees that Xxxxxx Xxxxxxx
shall not be required to construct any improvements in or make
warranties with respect to the condition of the Licensed
Space. eBenX shall not make any repairs, alterations,
installations or improvements to the Licensed Space without
the prior written consent of Xxxxxx Xxxxxxx, which may be
withheld for any reason or for no reason whatsoever.
(E) eBenX shall use the Licensed Space only for
general office use and other uses reasonably related thereto.
eBenX shall not store any garbage or refuse in the Licensed
Space. eBenX shall not create any nuisance in or about the
applicable building or the Licensed Space. eBenX shall not be
permitted to enter any areas within the applicable building,
other than the Licensed Space and the common areas, without
the prior consent of Xxxxxx Xxxxxxx in each instance.
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(F) If eBenX shall fail to (i) pay any amounts
payable hereunder with respect to such License within 10 days
after the date due or (ii) perform any of its other
obligations under the License, and such failure continues for
a period of 30 days (unless such default cannot reasonably be
cured within such 30-day period, in which case such period
shall be extended as long as eBenX has commenced the curing of
such default and thereafter prosecutes the curing of same with
diligence), Xxxxxx Xxxxxxx shall have the option to revoke the
License.
(G) Upon any default hereunder by eBenX with respect
to any of the Licensed Space or upon a failure by eBenX to
vacate any of the Licensed Space after the termination or
expiration of the License relating thereto, Xxxxxx Xxxxxxx
shall have all remedies available at law or in equity to a
landlord of real property.
(H) The parties acknowledge that a portion of the
Licensed Space is premises currently leased by Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx"). Xxxxxx
Xxxxxxx shall request the consent of Xxxxxxx Xxxxx to a
license of the applicable Licensed Space to Xxxxxx Xxxxxxx and
the sublicense of such Licensed Space to eBenX upon the terms
herein set forth. If Xxxxxxx Xxxxx grants such consent, such
premises shall be deemed a portion of the Licensed Space,
subject to and upon all of the terms hereof.
(I) Xxxxxx Xxxxxxx shall use reasonable commercial
efforts to obtain each Consent required in connection with the
License, but shall be not required to (i) expend any funds
(other than reasonable attorneys' fees and disbursements of
Xxxxxx Xxxxxxx and any such overlandlord), (ii) initiate any
legal proceeding to compel any such Consent or (iii) agree to
any amendment or modification of its lease of the Licensed
Space.
(b) Xxxxxx Xxxxxxx and eBenX shall use reasonable commercial efforts
to, and shall use reasonable commercial efforts to cause their Affiliates to,
cooperate in the transfer of responsibility from Xxxxxx Xxxxxxx to eBenX of each
of the Services, other than those Services set forth in Section 1.01(a)(iv),
described above as soon as reasonably practicable following 60 days after
Closing, and, in any event, prior to the end of the time periods set forth
above. eBenX shall notify Xxxxxx Xxxxxxx in writing when eBenX is prepared to
transfer responsibility for specific Services from Xxxxxx Xxxxxxx to eBenX.
(c) Notwithstanding the foregoing, nothing contained in this Agreement
shall be construed as restricting Xxxxxx Xxxxxxx or its Affiliates from
operating any of its businesses or services in any manner they respectively
determine to be proper or advisable; provided, however, that in the event the
foregoing construction prevents or impairs (other than immaterially) the
provision of any Service, Xxxxxx Xxxxxxx and eBenX shall cooperate with one
another regarding the provision of such Service and Xxxxxx Xxxxxxx or eBenX, as
the case may be, shall use reasonable commercial efforts to arrange for the
provision of such Service.
(d) eBenX shall follow the policies, procedures and practices in effect
before the date of this Agreement of which eBenX has knowledge (as defined
herein), including,
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without limitation, providing information and documentation reasonably
sufficient for Xxxxxx Xxxxxxx and/or its Affiliates to perform the Services in
the manner provided as of the Closing, and making available, as reasonably
requested by Xxxxxx Xxxxxxx and/or its Affiliates, sufficient resources and
timely decisions, approvals and acceptances in order that Xxxxxx Xxxxxxx may
perform its obligations under this Agreement in a timely and efficient manner.
In addition, for the period that eBenX employees shall be utilizing the
workspace of Xxxxxx Xxxxxxx, all such eBenX employees shall follow all codes
relating to dress and behavior, as well as all workplace policies, of Xxxxxx
Xxxxxxx in effect at such time. As used in this subsection (d), eBenX shall be
deemed to have knowledge of (i) that information which has been presented to it
in writing and (ii) after due inquiry, the actual knowledge of the Transferred
Employees.
(e) The parties shall use good faith efforts to cooperate with each
other in all matters relating to the provision and receipt of Services. Such
cooperation shall include obtaining all consents, licenses or approvals
necessary or required to permit each party to perform its obligations; provided,
however, that Xxxxxx Xxxxxxx or its Affiliates shall not be required to pay any
amounts to any third parties or to grant any accommodation, financial or
otherwise, to secure the same.
(f) Each party shall appoint a representative to facilitate
communications and performance under this Agreement, who shall have the
authority to act for and bind such party in connection with all aspects of this
Agreement. Each party shall have the right at any time and from time to time to
replace its representative by giving notice to the other party setting forth the
name of the replacement.
(g) Commencing immediately following the Transfer, eBenX shall, for a
period up to 90 days from Closing, have the sole right on behalf of Xxxxxx
Xxxxxxx to collect Receivables due to Xxxxxx Xxxxxxx from Transferred Clients
and those Terminated Clients whose termination is not effective until after
Closing ("Transferred Client Receivables") in accordance with the following:
(i) Xxxxxx Xxxxxxx shall provide to eBenX copies of all material
records related to Transferred Client Receivables.
(ii) In order to maintain continuous relations with its customers,
eBenX agrees to xxxx and use reasonable commercial efforts in
good faith to collect the Transferred Client Receivables in
the normal and regular course of eBenX's business, consistent
with its normal practices and policies for collection of
accounts receivable.
(iii) eBenX will apply all amounts collected on the Transferred
Client Receivables to the Transferred Client Receivables in
the manner specified by such Transferred Client from whom they
are collected. In the event the Transferred Client does not
specify the application of a payment, or there is a question
regarding the appropriate application of any amount collected,
eBenX and Xxxxxx Xxxxxxx will work in good faith with the
Transferred Client to determine the appropriate allocation of
such collected Transferred Client Receivables. eBenX will not
and
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will not permit its employees or agents to instruct, suggest
or request that a Transferred Client pay for goods sold or
services rendered by eBenX prior to payment for Transferred
Client Receivables; provided that the foregoing shall not
restrict eBenX and its employees or agents -------- from
requesting payment for goods or services rendered by eBenX so
long as they do not suggest delaying payment for Transferred
Client Receivables.
(iv) The amounts of the Transferred Client Receivables that are
collected by eBenX shall be distributed by eBenX as follows:
(A) For all amounts of the Transferred Client Receivables
with a balance under 90 days past due at Closing,
100% of such amounts shall be remitted to Xxxxxx
Xxxxxxx;
(B) For all amounts of the Transferred Client Receivables
with a balance between 90 and 180 days past due at
Closing, 85% of such amounts shall be remitted to
Xxxxxx Xxxxxxx and 15% of such amounts shall be
retained by eBenX; and
(C) For all amounts of the Transferred Client Receivables
with a balance over 180 days past due at Closing,
two-thirds of such amounts shall be remitted to
Xxxxxx Xxxxxxx and one-third of such amounts shall be
retained by eBenX;
provided, however, that (x) for a period of 90 days from the
Closing Date, 100% of all Transferred Client Receivables
collected by eBenX from Pitney Xxxxx shall be remitted to
Xxxxxx Xxxxxxx and (y) after such 90 day period, the
Transferred Client Receivables collected by eBenX shall be
allocated as set forth in clause (A), (B) and (C) of this
subsection 1.01(g)(iv).
(v) All proceeds from such Transferred Client Receivables that are
addressed to eBenX shall be remitted to Xxxxxx Xxxxxxx on each
delivery date of the Monthly Report described in clause (vi)
below. Each such payment shall be made by certified or
cashiers' check or wire transfer as Xxxxxx Xxxxxxx shall
reasonably request. All proceeds from such Transferred Client
Receivables that are addressed to Xxxxxx Xxxxxxx or its
Affiliate shall be remitted to Xxxxxx Xxxxxxx within five (5)
Business Days after receipt by eBenX. On the delivery date of
the Monthly Report, any unpaid payments of Transferred Client
Receivables that are addressed to Xxxxxx Xxxxxxx or its
Affiliate held by eBenX shall therewith be paid to Xxxxxx
Xxxxxxx.
(vi) eBenX agrees to credit all outstanding Transferred Client
Receivables when paid and to deliver such sums to Xxxxxx
Xxxxxxx as provided for herein without any set-off, recoupment
or claim against such amounts from any cause whatsoever.
(vii) eBenX shall deliver to Xxxxxx Xxxxxxx a statement or report
(the "Monthly Report") presenting all collected Transferred
Client Receivables in the previous month. Such Monthly Report
shall show all Transferred Client Receivables
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collected in the previous month. All unpaid amounts of
Transferred Client Receivables held by eBenX shall be paid to
Xxxxxx Xxxxxxx with the delivery of such Monthly Report. The
delivery date of the initial Monthly Report shall be 30 days
after the Closing Date. The delivery date of each subsequent
Monthly Report shall be 30 days following the delivery of the
prior Monthly Report.
(viii) 10 business days after receipt of the Monthly Report, Xxxxxx
Xxxxxxx shall pay to eBenX all unpaid amounts, pursuant to
subsections (iv) and (ix) hereof, of Transferred Client
Receivables held by Xxxxxx Xxxxxxx.
(ix) The sole right of eBenX to collect Transferred Client
Receivables shall expire 90 days from Closing (the "Collection
Period"); provided that if eBenX has collected at least 75% of
the Transferred Client Receivables outstanding which are less
than 90 days past due at Closing, the Collection Period shall
be extended for an additional 90 days; provided, further, that
Xxxxxx Xxxxxxx may elect to take sole control of collecting
Transferred Client Receivables from any Transferred Client
from which eBenX has not collected at least 50% of the
applicable Transferred Client Receivables which are less than
90 days past due. Xxxxxx Xxxxxxx may accept payments for
Transferred Client Receivables remitted directly to Xxxxxx
Xxxxxxx and shall report such payments to eBenX. From and
after the Collection Period, the collection of Transferred
Client Receivables shall be the dual responsibility of eBenX
and Xxxxxx Xxxxxxx; provided, however, that Xxxxxx Xxxxxxx
shall have the right, upon written notice to eBenX, to contact
any Transferred Client at its sole discretion. From and after
the Collection Period, (A) Xxxxxxx Xxxxx shall retain 100% of
any Transferred Client Receivables collected by Xxxxxxx Xxxxx
and (B) eBenX shall remit to Xxxxxx Xxxxxxx two-thirds, and
retain one-third, of any Transferred Client Receivables
collected by eBenX. Xxxxxx Xxxxxxx shall have the right, upon
written notice to eBenX to revoke the authority of eBenX under
this Section 1.01(f) for reasonable cause including but not
limited to (i) the failure of eBenX to perform its duties
hereunder or (ii) the reasonable concern of Xxxxxx Xxxxxxx
regarding the financial condition of eBenX.
(x) eBenX and Xxxxxx Xxxxxxx agree to cooperate fully with each
other as to any collection efforts instituted by either party
to collect the Transferred Client Receivables under this
Section 1.01(f).
SECTION 1.02 Provision of eBenX Services.
(a) For a period of no more than one year following the Closing, eBenX
shall maintain for Xxxxxx Xxxxxxx, with respect to the Safeway 401(k) Plan, at
least four eBenX employees who shall respond to telephone calls made to the
eBenX call center by employees of Safeway (the "Safeway Service"); provided,
however, that eBenX exercises reasonable care in the selection of personnel and
monitoring of the provision of the Safeway Service and the employees so
designated have sufficient skills and training to provide the Safeway Service as
required by this Agreement. eBenX shall use reasonable commercial efforts to
provide the
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Safeway Service in a manner consistent with the manner and level of care with
which such Safeway Service was performed by Xxxxxx Xxxxxxx or its Affiliates
prior to the Closing Date.
(b) eBenX shall provide to Xxxxxx Xxxxxxx the telephone activity report
for each month the Safeway Service is provided.
(c) Xxxxxx Xxxxxxx and eBenX shall use reasonable commercial efforts
to, and shall use reasonable commercial efforts to cause their Affiliates to,
cooperate in the transfer of responsibility from eBenX to Xxxxxx Xxxxxxx of the
Safeway Service upon notice of termination by Xxxxxx Xxxxxxx to eBenX. Xxxxxx
Xxxxxxx shall notify eBenX of such termination in writing 30 days prior to the
date Xxxxxx Xxxxxxx shall transfer responsibility for the Safeway Service from
eBenX to Xxxxxx Xxxxxxx.
SECTION 1.03 Additional Services.
(a) If, at any time during the term of this Agreement, eBenX shall
require or request an additional service which do not constitute a Service
(each, an "Additional Service"), Xxxxxx Xxxxxxx, in its sole and absolute
discretion, may perform such Additional Service. Prior to the provision of such
Additional Service, Xxxxxx Xxxxxxx shall provide to eBenX written notice of the
Additional Service to be performed and an estimate of the expected costs of such
Additional Service. If eBenX accepts such Additional Service, it will notify
Xxxxxx Xxxxxxx in writing within 10 business days. Xxxxxx Xxxxxxx will use
reasonable commercial efforts to complete the Additional Services on a timely
basis.
(b) If, at any time during the term of this Agreement, Xxxxxx Xxxxxxx
shall require or request a service to be performed by eBenX (each, an "eBenX
Additional Service"), eBenX, in its sole and absolute discretion, may perform
such eBenX Additional Service. Prior to the provision of such eBenX Additional
Service, eBenX shall provide to Xxxxxx Xxxxxxx written notice of the eBenX
Additional Service to be performed and an estimate of the expected costs of such
eBenX Additional Service. If Xxxxxx Xxxxxxx accepts such eBenX Additional
Service, it will notify eBenX in writing within 10 business days. eBenX will use
reasonable commercial efforts to complete the eBenX Additional Services on a
timely basis.
SECTION 1.04 Term and Termination.
(a) Except as otherwise set forth in this Agreement, this Agreement (or
any portion of the Services and Safeway Service rendered hereunder) may be
terminated prior to the expiration of the periods set forth in Section 1.01
above, (i) by eBenX, at any time upon not less than 60 calendar days' prior
written notice to Xxxxxx Xxxxxxx; or (ii) by either party, at any time upon not
less than 60 calendar days after delivery of notice to the other party, in the
event that the other party shall have defaulted on or breached any material term
of this Agreement and shall not have cured such breach within 30 calendar days
after receiving notice from the party specifying the nature of such default or
breach.
(b) This Agreement shall terminate one year from the date hereof or as
otherwise earlier terminated pursuant to Section 1.04(a) above, and thereafter
shall be of no further force and effect, except (i) Sections 1.07, 3.01 through
3.05, 4.02, 6.01 and 7.03 shall survive the termination of this Agreement, (ii)
nothing herein shall relieve either party hereto
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from liability for any gross negligence or willful breach hereof and (iii) any
obligation to pay for the Services hereunder shall survive the termination of
this Agreement.
SECTION 1.05 Reimbursement and Royalties for Services.
(a) eBenX shall pay Xxxxxx Xxxxxxx a monthly service fee for the
Services equal to the sum of the component pricing for said month for each
Service described in Section 1.01 as set forth on Exhibit X. Xxxxxx Xxxxxxx
shall submit to eBenX by the fifth day of the month following the month in which
such Services were provided a billing statement consistent with Exhibit D
setting forth such component fees. Such fee shall be paid by eBenX by the
fifteenth day of such month.
(b) Xxxxxx Xxxxxxx shall pay eBenX a monthly service fee of $15,000 for
the Safeway Service, which shall be applied on a monthly basis as a credit
against amounts otherwise due and payable by eBenX to Xxxxxx Xxxxxxx under this
Agreement. In the event that for any month the foregoing service fee exceeds the
aggregate amount due from eBenX to Xxxxxx Xxxxxxx, eBenX shall submit to Xxxxxx
Xxxxxxx a billing statement by the fifth day of the month following the month in
which such Safeway Service was provided. Such fee shall be paid by Xxxxxx
Xxxxxxx by the fifteenth day of such month.
(c) For all Additional Services performed by Xxxxxx Xxxxxxx, eBenX
shall pay to Xxxxxx Xxxxxxx a royalty based on the reasonable time expended,
charged at a fixed hourly rate of $150 per hour, by Xxxxxx Xxxxxxx in order to
perform such Additional Service.
(d) For all eBenX Additional Services provided by eBenX, Xxxxxx Xxxxxxx
shall pay to eBenX a royalty based on the reasonable time expended, charged at a
fixed hourly rate of $150 per hour, by eBenX in order to perform such eBenX
Additional Service.
(e) In addition to the payments set forth herein, eBenX shall be liable
for, and shall indemnify Xxxxxx Xxxxxxx or its Affiliates, as applicable, for
any sales and/or use tax, VAT, transfer tax, excise tax, tariff, duty or any
other similar tax or payment in lieu thereof imposed by any governmental
authority arising from the Services provided hereunder, or arising out of this
Agreement. eBenX shall not be responsible for payment of any income, franchise,
gross receipts or personal property taxes paid by Xxxxxx Xxxxxxx or its
Affiliates as a result of this Agreement.
(f) If, at any time during the term of this Agreement, any Law or
Governmental Order, rule, regulation or direction of any Governmental Authority,
whether domestic or foreign, relating to the administration of the Services
should be changed in a manner requiring modifications or updates to the systems
being used by Xxxxxx Xxxxxxx to provide Services hereunder, which modifications
or updates would not have been required but for Xxxxxx Xxxxxxx'x obligation to
provide Services hereunder (each a "Regulatory Charge"), in each such case,
eBenX shall be obligated to pay Xxxxxx Xxxxxxx a fee based on the reasonable
time expended (charged at Xxxxxx Xxxxxxx'x standard hourly rates for the
personnel involved) and expenses actually incurred by Xxxxxx Xxxxxxx for the
modifications or updates made to the system in order to comply with each such
Regulatory Change. As soon as reasonable commercial following the promulgation
of any Regulatory Change, eBenX shall notify Xxxxxx Xxxxxxx in writing of the
Regulatory Change, the effective date thereof and the proposed system
modifications or updates. As soon as reasonable commercial after receipt of the
eBenX notice, Xxxxxx Xxxxxxx shall provide to eBenX written notice of an
estimate of the expected costs for such modifications or updates. eBenX may at
its option either authorize Xxxxxx Xxxxxxx to effect the modification or notify
Xxxxxx
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Xxxxxxx that it will terminate the Service in question on or before the
effective date of the Regulatory Change. Any such authorization or notification
by eBenx will be made in writing, and any failure to provide such authorization
or notification within 7 days prior to the effective date of the Regulatory
Change will be deemed to be an election by eBenx to terminate the Services in
question on the effective date. Any such authorization to make modifications
shall be provided to Xxxxxx Xxxxxxx promptly in order to afford Xxxxxx Xxxxxxx
sufficient time to make such modifications or updates prior to the effective
date of the Regulatory Change. Xxxxxx Xxxxxxx shall bear no responsibility for
any consequences stemming from eBenX's failure to provide timely authorization.
SECTION 1.06 Employees. From time to time, Xxxxxx Xxxxxxx shall
designate such number of employees as it reasonably deems appropriate to perform
the Services during normal Xxxxxx Xxxxxxx operating hours; provided, however,
that Xxxxxx Xxxxxxx exercises reasonable care in the selection of personnel and
monitoring of the provision of Services and the employees so designated have
skills and training sufficient to provide the Services as required by this
Agreement.
SECTION 1.07 Records. (a) During the term of this Agreement, and for a
period of 90 days thereafter, each party shall maintain complete and accurate
books and records relating to the Services and shall provide to the other party
copies of such records as may be reasonably requested by the other party.
(b) In the event that any Service is terminated pursuant to Section
1.04 of this Agreement, eBenX shall, within 30 days of such termination, return
to Xxxxxx Xxxxxxx all documents, materials (including copies of all software
provided to eBenX) and records relating to such terminated Services (and not
used in connection with any continuing provision of Services by eBenX) and
certify to eBenX that it has complied with this Section 1.07 in all respects.
ARTICLE II
ACCESS RIGHTS
SECTION 2.01 Grant of Access. Subject to the terms and conditions of
this Agreement, Xxxxxx Xxxxxxx grants to eBenX a non-exclusive, limited right
during the period set forth in Section 1.01 to access authorized areas of Xxxxxx
Xxxxxxx'x proprietary network system (the "Network") as determined by Xxxxxx
Xxxxxxx solely in connection with the provision of Services by Xxxxxx Xxxxxxx.
eBenX shall access the Network from its desktops through a secure bridge or
interface ("Interface") provided by Xxxxxx Xxxxxxx.
SECTION 2.02 Scope of Access; Monitoring. eBenX shall ensure that only
its employees on a need-to-know basis shall access authorized portions of the
Network, in each
11
case, solely in connection with the Services. eBenX shall not, and shall ensure
that no third party will, attempt to access the Network without the express
written permission of Xxxxxx Xxxxxxx. Xxxxxx Xxxxxxx shall have the right, but
not the obligation, to have any of its personnel, including any of its database
administrators, (i) audit and monitor eBenX's access to the Network through any
means available internally to Xxxxxx Xxxxxxx, and (ii) otherwise ensure that
eBenX complies with the terms and conditions of this Agreement.
SECTION 2.03 Restrictions. Nothing herein shall limit the right of
Xxxxxx Xxxxxxx to limit eBenX's access to authorized areas of the Network or
deny access to unauthorized areas of the Network. Nothing herein shall be
construed as granting eBenX any right to access the Network for purposes other
than in connection with the Services, or in any manner other than as expressly
set forth herein. Except to the extent expressly permitted herein, or by prior
written permission of Xxxxxx Xxxxxxx, eBenX shall not, and shall not allow any
third party to: (a) sublicense, transfer, assign, rent, lease, or otherwise
convey any right of access, or any right with respect thereto, to any third
party; (b) disassemble, decompile or otherwise reverse engineer all or any
portion of any software provided by Xxxxxx Xxxxxxx in connection with the
Services; or (c) reproduce any such software on any media without the written
permission of Xxxxxx Xxxxxxx. eBenX shall ensure the security of access to the
Network from any unauthorized access or use.
SECTION 2.04 Access Protections. All interconnectivity by either party
to the computing systems and/or networks of the other party, and all attempts at
such interconnectivity, shall be only through the security gateways/firewalls of
the other party and through other security systems, protocols or devices as
agreed to by the parties. Neither party shall access, and will not permit
unauthorized persons to access, the computing systems and/or networks of the
other party without the other party's express written authorization, and any
such actual or attempted access shall be consistent with any such authorization.
SECTION 2.05 Viruses. eBenX shall use the latest Virus definition
updates available of a mutually agreed Virus detection/scanning program in
connection with the access of the Network, and transmission of data or software
to eBenX systems will be performed from Virus protected systems and computers.
Xxxxxx Xxxxxxx shall, in accordance with its customary practices, use a Virus
detection/scanning program in connection with performing its Service obligations
hereunder. Upon detecting a Virus that is not immediately eliminated, all
attempts to access the other party's computing systems and/or networks shall
immediately cease and shall not resume until any such Virus has been eliminated.
Without limiting the foregoing, each party shall use reasonable commercial
efforts to avoid the transmission of any Virus from its own systems to the other
party's systems. In the event that a party determines that a Virus has been
transmitted to the systems or computers of the other party, such party shall
promptly notify such other party of the transmission and the nature of the
Virus. For purposes hereof, "Virus" means any computer instructions, devices or
techniques that can or were designed to threaten, infect, assault, vandalize,
defraud, disrupt, damage, disable, alter, inhibit or shut down software and/or a
processing environment.
SECTION 2.06 Disabling Access. Each party shall have the right to
disable the other party's access to such party's computing systems and/or
networks to protect such party's computing systems and/or networks from a Virus
or Disabling Device on the other party's
12
computing systems and/or networks. In the event of such disabling access, the
party disabling such access shall give the other party notice of such disabling
access as soon as possible thereafter. For the purposes hereof, "Disabling
Device" means any computer software or device maliciously intended to or capable
of causing software to cease functioning after a specific period of time or on a
specific date or event.
ARTICLE III
CONFIDENTIALITY; SECURITY
SECTION 3.01 Confidentiality Obligations. The parties acknowledge that
each party (in this capacity, a "Disclosing Party") has disclosed or will
disclose certain Confidential Information to the other party (in this capacity,
a "Receiving Party"). The Receiving Party acknowledges the confidential and
proprietary nature of the Confidential Information of the Disclosing Party and
agrees not to reveal or disclose any Confidential Information of the Disclosing
Party for any purpose to any other person, or to use any Confidential
Information of the Disclosing Party for any purpose other than as contemplated
under this Agreement, in each case, without the prior written consent of the
Disclosing Party. The Receiving Party agrees to maintain adequate security
procedures and take reasonable precautions (no less rigorous than what the
Receiving Party takes with respect to its own comparable Confidential
Information) to prevent misuse, unauthorized or inadvertent disclosure or loss
of the Confidential Information of the Disclosing Party. For purposes hereof,
"Confidential Information" means any information, oral or written, relating to
or disclosed in the course of the performance of this Agreement, that is not
generally known to the public or in the trade and is or should be reasonably
understood to be confidential or proprietary to the Disclosing Party, including
without limitation, compilations, data, studies or other documents incorporating
or developed from Confidential Information. "Confidential Information" of Xxxxxx
Xxxxxxx includes all software and data accessed by eBenX hereunder and access
codes or other security devices used in connection with such access.
"Confidential Information" does not include information that: (a) is, or
becomes, known to the Receiving Party by lawful means; (b) is generally
available to the public through no act or omission by the Receiving Party; (c)
is developed by Receiving Party independent of any Confidential Information it
receives from the Disclosing Party; or (d) is obtained by the Receiving Party
from a Third Party free to make such a disclosure without breach of any legal
obligation.
SECTION 3.02 Disclosure. Notwithstanding the provisions of Section
3.01, Confidential Information may be disclosed pursuant to any statute,
regulation, order, lawful subpoena or lawful document discovery request,
provided that prior written notice of such disclosure obligation or request is
furnished to the Disclosing Party as soon as practicable in order to afford the
Disclosing Party a reasonable opportunity to seek a protective order. If the
Disclosing Party is unable to obtain or does not seek a protective order and the
Receiving Party is legally compelled to disclose Confidential Information,
disclosure of such information, to the extent compelled or required under the
applicable statute, regulation, order, lawful subpoena or lawful document
discovery request, may be made without liability.
13
SECTION 3.03 Unauthorized Disclosure. The Receiving Party shall
immediately notify the Disclosing Party upon discovery of any prohibited use or
disclosure of the Confidential Information, or any other breach of this Article
III by the Receiving Party, and shall fully cooperate with the Disclosing Party
to help the Disclosing Party regain possession of the Confidential Information
and prevent the further prohibited use or disclosure of the Confidential
Information.
SECTION 3.04 Irreparable Injury. The Receiving Party acknowledges that
unauthorized disclosure of any Confidential Information will cause irreparable
injury to the Disclosing Party, and the Receiving Party hereby agrees that in
addition to monetary damages therefor, the Disclosing Party will be entitled to
an injunction or other equitable and provisional remedies to prevent or limit
that disclosure, without any obligation to post bond or other undertakings.
SECTION 3.05 Privacy and Security. Without limiting the generality of
the foregoing confidentiality obligations, eBenX shall comply with all privacy
and security procedure and policies set forth by Xxxxxx Xxxxxxx regarding any
access to the Network.
ARTICLE IV
RESPONSIBILITY
SECTION 4.01 Relationship of the Parties. The parties hereto are
independent contractors and no party is an employee, partner or joint venturer
of the other party. Under no circumstances shall any of the employees of either
party hereto be deemed to be employees of the other party for any purpose. No
party shall have the right to bind the other party to any agreement with a third
party or to represent itself as a partner or joint venturer of the other party.
Nothing in this Agreement shall be construed as: (a) an assumption by Xxxxxx
Xxxxxxx of any obligation to maintain or increase the sales or profits of eBenX,
or otherwise to assume responsibility for eBenX's operations; (b) an assumption
by Xxxxxx Xxxxxxx of any financial obligation of eBenX; (c) the creation of any
relationship of employment or agency between eBenX and employees or consultants
of Xxxxxx Xxxxxxx, its subsidiaries or associated companies; (d) an assumption
by Xxxxxx Xxxxxxx of any responsibility for the work performed by outside
suppliers employed by eBenX at the suggestion or recommendation of Xxxxxx
Xxxxxxx; or (e) the delegation of any function or authority of eBenX to Xxxxxx
Xxxxxxx. In all matters relating to this Agreement, each party hereto shall be
solely responsible for the acts of its own employees, and employees of one party
shall not be considered employees of the other party. Except as specifically
permitted by this Agreement, no party hereto or any of its employees shall have
any authority to negotiate, enter into any contract or incur any obligation, on
behalf of the other party.
SECTION 4.02 Limitation on Liability.
(a) Neither Xxxxxx Xxxxxxx nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be liable for any
action taken or omitted to be taken by it or such person under or in connection
with this Agreement, except that Xxxxxx Xxxxxxx shall be liable for direct
losses incurred by eBenX arising out of the gross negligence, willful
14
misconduct or bad faith of Xxxxxx Xxxxxxx or any third party retained by it or
their respective officers, directors, employees, agents or attorneys-in-fact in
the performance of the Services; provided, however, that, except as expressly
limited in Article VI, with respect to the Transferred Clients and those
Terminated Clients whose termination is not effective until after Closing who
are receiving services under agreements originally executed by Xxxxxx Xxxxxxx
(the "Retained Clients"), Xxxxxx Xxxxxxx shall be liable for direct losses
incurred by eBenX relating to any claims by such Transferred Clients and such
Terminated Clients against eBenX arising out of the negligence, willful
misconduct or bad faith of Xxxxxx Xxxxxxx or any third party retained by it or
their respective officers, directors, employees, agents or attorneys-in-fact in
the performance of the Services.
(b) Neither Xxxxxx Xxxxxxx nor its Affiliates nor any of their
respective officers, directors, employees, agents or attorneys-in-fact shall be
liable for any action taken or omitted to be taken by any third party, other
than such third parties retained by Xxxxxx Xxxxxxx or any of its Affiliates to
perform any of the Services. Notwithstanding the foregoing, if Xxxxxx Xxxxxxx,
without good cause, intentionally refuses to provide the Services which Xxxxxx
Xxxxxxx is obligated to provide under this Agreement, Xxxxxx Xxxxxxx will be
liable to eBenX for an amount equal to 150% of the amount by which the expenses
actually and reasonably incurred by eBenX to obtain the Services that Xxxxxx
Xxxxxxx refused to provide exceed the amount eBenX reasonably expected Xxxxxx
Xxxxxxx to charge for such Services.
(c) Notwithstanding anything to the contrary herein, in the event that
Xxxxxx Xxxxxxx commits an error with respect to or incorrectly performs or fails
to perform any Service, at eBenX's request, Xxxxxx Xxxxxxx shall use reasonable
commercial efforts to correct such error, re-perform or perform such Service.
(d) Notwithstanding anything to the contrary herein, neither Xxxxxx
Xxxxxxx nor its Affiliates or any of their respective officers, directors,
employees, agents or attorneys-in-fact shall be liable for losses incurred by
eBenX for any action taken or omitted to be taken by Xxxxxx Xxxxxxx or such
person under or in connection with this Agreement to the extent such action or
omission directly arises from actions or inactions of eBenX, including, without
limitation, the failure of eBenX to perform any function or any other function
not included in the Services.
(e) EXCEPT AS EXPRESSLY PROVIDED HEREIN, xxxxxx xxxxxxx MAKES NO
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE SERVICES OF ANY KIND, NATURE
OR DESCRIPTION, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND XXXXXX XXXXXXX
HEREBY DISCLAIMS THE SAME. XXXXXX XXXXXXX HEREBY DISCLAIMS ANY REPRESENTATION OR
WARRANTY THAT ACCESS TO THE NETWORK AND THE TRANSMISSION OF DATA THERETO AND
THEREFROM WILL BE UNINTERRUPTED OR ERROR FREE.
(f) EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY SHALL IN ANY
EVENT HAVE ANY LIABILITY TO THE OTHER PARTY FOR CONSEQUENTIAL, SPECIAL OR
PUNITIVE DAMAGES ARISING OUT OF THE
15
PERFORMANCE OF THE SERVICES OR THIS AGREEMENT.
ARTICLE V
FORCE MAJEURE
SECTION 5.01 Force Majeure. The obligations of Xxxxxx Xxxxxxx to
provide Services shall be suspended during the period and to the extent that
Xxxxxx Xxxxxxx is prevented or hindered from complying therewith by any Law or
Governmental Order, rule, regulation or direction of any Governmental Authority,
whether domestic or foreign, or by any cause beyond the reasonable control of
Xxxxxx Xxxxxxx, including acts of God, civil disturbances, accidents, acts of
war or conditions arising out of or attributable to war (whether declared or
undeclared), shortage of necessary equipment, materials or labor, or
restrictions thereon or limitations upon the use thereof ("Event of Force
Majeure"). In such event, Xxxxxx Xxxxxxx shall give notice of suspension as soon
as reasonably practicable to eBenX stating the date and extent of such
suspension and the cause thereof, and Xxxxxx Xxxxxxx shall resume the
performance of such obligations as soon as reasonably practicable after the
removal of the cause, and Xxxxxx Xxxxxxx shall so notify eBenX. In no event
shall eBenX be obligated to pay for any Services which are not being provided to
eBenX pursuant to this Section 5.01.
SECTION 5.02 Written Notice. Xxxxxx Xxxxxxx can only claim an Event of
Force Majeure as an excuse from its performance hereunder if Xxxxxx Xxxxxxx has
given written notice to eBenX of such claim and if Xxxxxx Xxxxxxx makes a
continuing and good faith effort to lessen or avoid the effects of such Event of
Force Majeure on eBenX. Notwithstanding any other provision of this Agreement,
Xxxxxx Xxxxxxx shall be liable for such failure or delay in the performance of
its obligations to the extent that such failure or delay was caused by the fault
or negligence of Xxxxxx Xxxxxxx.
ARTICLE VI
INDEMNIFICATION
SECTION 6.01 Indemnification.
(a) Xxxxxx Xxxxxxx hereby agrees to defend, indemnify and hold harmless
eBenX and its Affiliates and their respective officers, directors, employees and
agents (collectively, "eBenX Indemnitees") from and against any and all
liabilities, losses, claims, damages and expenses of any nature, including
reasonable attorneys' fees, arising out of or resulting from any default or
breach by Xxxxxx Xxxxxxx in the performance of its obligations under this
Agreement or any failure by Xxxxxx Xxxxxxx to perform its covenants hereunder or
any third party claim against any eBenX Indemnitee.
(b) eBenX hereby agrees to defend, indemnify and hold harmless Xxxxxx
Xxxxxxx and its Affiliates and their respective officers, directors, employees
and agents (collectively, "Xxxxxx Xxxxxxx Indemnitees," and together with eBenX
Indemnitees, the "Indemnitees") from and against any and all liabilities,
losses, claims, damages and expenses of
16
any nature, including reasonable attorneys' fees, arising out of or resulting
from (i) any default or breach by eBenX in the performance of its obligations
under this Agreement or any failure by eBenX to perform its covenants hereunder
or any third party claim against any Xxxxxx Xxxxxxx Indemnitee or in the
provision of services by eBenX to its customers, including, without limitation,
any and all loss, liability, damage, cost or expense of a customer of eBenX and
(ii) except for such claims that arise out of the gross negligence, willful
misconduct or bad faith of Xxxxxx Xxxxxxx or its Affiliates, Section 1.01(a)(ii)
hereof.
(c) Claims for indemnification under Sections 6.01(a) and 6.01(b) shall
be made pursuant to the procedures set forth in Sections 9.02(b) or 9.03(b) of
the Asset Purchase Agreement, as is appropriate. Nothing herein shall limit the
rights to indemnification, or the obligations to indemnify, of the parties under
the Asset Purchase Agreement.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the maximum amount of indemnifiable Losses which may be recovered
from an Indemnitee arising out of or resulting from the causes set forth in (i)
Section 6.01(a) shall be an amount equal to 100% of the total annual charges to
eBenX by Xxxxxx Xxxxxxx for the related Services provided pursuant to this
Agreement, except that with respect to claims by Retained Clients arising out
of, other than as set forth in this Article VI, the direct actions of Xxxxxx
Xxxxxxx pursuant to this Agreement, such claims shall also be covered by the
Insurance Policy described in subsection (e) hereof in addition to the amount
set forth in this subsection (d), and (ii) Section 6.01(b) shall be amount equal
to 100% of annual revenues from Client Agreements with Clients transferred from
Xxxxxx Xxxxxxx.
(e) eBenX shall amend the current insurance policy of eBenX or purchase
a new indemnification insurance policy from a third-party provider (the
"Insurance Policy") to cover all claims by Retained Clients arising out of,
other than as set forth in this Article VI, the direct actions of Xxxxxx
Xxxxxxx. The fees, if any, for the Insurance Policy shall be divided equally
between eBenX and Xxxxxx Xxxxxxx. In the event of a claim under the Insurance
Policy, Xxxxxx Xxxxxxx will pay any deductible charges required by the Insurance
Policy up to a maximum amount of $50,000 per claim.
(f) eBenX acknowledges and agrees that (i) Xxxxxx Xxxxxxx and its
personnel shall not be responsible in any way whatsoever for any actions or
omissions by eBenX or made at the request, initiation or under the direction of
eBenX, including, without limitation, any errors or omissions arising out of or
related to processes or programming, or modifications thereof, requested,
initiated or directed by eBenX that have not been reasonably verified by eBenX,
and (ii) for the avoidance of any doubt, the indemnity obligations of Xxxxxx
Xxxxxxx hereunder shall not apply to any liabilities, losses, claims, including
third party claims, damages, expenses of any nature, including attorney's fees,
arising out of or relating to such actions or omissions set forth in clause (i)
above.
17
ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Expenses. Except as otherwise specified in this Agreement,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
SECTION 7.02 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
person, by an internationally recognized overnight courier service, by telecopy
or by registered or certified mail (postage prepaid, return receipt requested)
to the respective parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in accordance with this
Section 7.02):
(a) if to Xxxxxx Xxxxxxx:
Xxxxxx Xxxxxxx & Company
c/o Merrill Xxxxx & Co.
000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Xx., Esq.
18
(b) if to eBenX:
eBenX, Inc.
000 Xxxxx Xxxxxxx 000
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Klehr, Harrison, Xxxxxx, Branzburg & Xxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxx, Esq.
SECTION 7.03 Public Announcements; Confidentiality. Each party agrees
to comply with Section 11.03 of the Asset Purchase Agreement and each will use
reasonable best efforts, including notifying their respective employees, to keep
confidential the contents of the other party's respective information systems to
which such party's employees may have access.
SECTION 7.04 Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 7.05 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 7.06 Entire Agreement. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, with
respect to the subject matter hereof.
SECTION 7.07 Assignment. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of Xxxxxx
Xxxxxxx and eBenX (which consent may be granted or withheld in the sole
discretion of Xxxxxx Xxxxxxx or eBenX); provided, however, that eBenX may assign
this Agreement or any of its rights and obligations hereunder to one or more
Affiliates of eBenX without the consent of Xxxxxx Xxxxxxx, however, eBenX
remains liable hereunder; provided further that this Agreement may, due to the
sale of all or substantially all the assets of a party to a third party
purchaser, be assigned to such third party
19
purchaser without the written consent of the other party hereto. Any attempted
assignment in violation of this provision is void.
SECTION 7.08 No Third Party Beneficiaries. This Agreement shall be
binding upon and inure solely to the benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person, including, without limitation, any union or
any employee or former employee of Xxxxxx Xxxxxxx, any legal or equitable right,
benefit or remedy of any nature whatsoever, including, without limitation, any
rights of employment for any specified period, under or by reason of this
Agreement.
SECTION 7.09 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State.
SECTION 7.10 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 7.11 Waiver of Jury Trial. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable law any right it may have
to a trial by jury with respect to any litigation directly or indirectly arising
out of, under or in connection with this Agreement or the transactions
contemplated by this Agreement. Each of the parties hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce that foregoing waiver and (b) acknowledges that it and the other
party hereto have been induced to enter into this Agreement and the transactions
contemplated by this Agreement, as applicable, by, among other things, the
mutual waivers and certifications in this Section 7.11.
SECTION 7.12 Arbitration. Except for the right to injunctive relief
under Section 6 of this Agreement, for which judicial relief shall remain
available, any dispute, controversy or claim (a "Claim") that cannot be resolved
by the parties arising out of or relating to this Agreement or the services
covered by this Agreement shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA")
upon notice (the "Arbitration Notice") of submission given by either Xxxxxx
Xxxxxxx or eBenx to the other in accordance with subsection (i) hereof, and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The arbitration shall be held Philadelphia,
Pennsylvania, if a claim is brought by Xxxxxx Xxxxxxx or in New York County, New
York, if a claim is brought by eBenX or in such other location as the parties
may mutually agree upon. The arbitration will be conducted before a panel of
three arbitrators, with one arbitrator named by each party within 15 days of
receipt of Arbitration Notice by the non-initiating party and the third named by
the two party-appointed arbitrators, or (if they should fail to agree on the
third within 15 days after the two party-appointed arbitrators have been named)
by the AAA. The arbitrators may not award non-monetary or equitable relief of
any sort. They shall have no power to award punitive damages or any other
damages not measured by the prevailing party's actual damages. The decision of
the arbitrators made in writing shall be final and binding upon the parties
hereto; provided, however, that the award and judgment of the
20
arbitrators shall have no binding or precedential effect with respect to any
other controversy not before the arbitrators, whether or not similar to or
related to the specific controversy decided by the arbitrators. All aspects of
the arbitration shall be treated as confidential. Neither the parties nor the
arbitrators may disclose the existence, content or results of the arbitration,
except as necessary to comply with legal or regulatory requirements. Before
making any such disclosure, a party shall give written notice to all other
parties and shall afford such parties a reasonable opportunity to protect their
interests. The expenses of arbitration, including reasonable compensation to the
arbitrators, shall be borne equally by the parties hereto, except that each
party shall bear the compensation and expenses of its own counsel and employees.
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized signatory thereunto duly authorized as
of the date first above written.
XXXXXX XXXXXXX & COMPANY
By: /s/ Xxxx X. Xxxxx
------------------------------
Xxxx X. Xxxxx
Chief Financial Officer
EBENX, INC.
By: /s/ Xxxx X. Xxxxx
------------------------------
Xxxx X. Xxxxx
President and Chief
Executive Officer
