Exhibit 10.4
SOFTWARE LICENSE AGREEMENT
This Software License Agreement ("Agreement"), dated as of
July 14, 2000, by and among Reliance Insurance Company, a Pennsylvania insurance
company and an indirect, wholly-owned subsidiary of Parent ("Reliance" or
"Licensor"), Xxxxxx Casualty, Inc., a Delaware corporation ("KCI") and Xxxxxx
Casualty Insurance Company, an Illinois insurance company and wholly-owned
subsidiary of KCI ("Xxxxxx" and together with KCI, "Purchasers" or "Licensee"),
(Reliance, Xxxxxx and KCI individually, a "Party" and collectively, the
"Parties").
RECITALS:
WHEREAS, Licensor has developed the Software (as defined
below);
WHEREAS, pursuant to the Transfer and Purchase Agreement dated
as of July 14, 2000 (the "Business Transfer Agreement"), entered into by and
among Reliance Group Holdings, Inc., a Delaware corporation ("Parent"),
Reliance, Reliance National Indemnity Company, a Wisconsin insurance company and
a wholly-owned subsidiary of Reliance ("RNIC"), United Pacific Insurance
Company, a Pennsylvania insurance company and a wholly-owned subsidiary of
Reliance ("UPIC"), Reliance Insurance Company of Illinois, an Illinois insurance
company and a wholly-owned subsidiary of Reliance ("RICI") and Reliance National
Insurance Company, a Delaware insurance company and a wholly-owned subsidiary of
Reliance ("Reliance National Insurance") and Reliance Universal Insurance
Company, a California insurance company and wholly-owned subsidiary of Reliance
("XXXX") (Reliance, RNIC, UPIC, RICI, Reliance National Insurance and XXXX,
collectively, the "Seller Insurer Parties", and together with Parent, the
"Seller Parties"), Xxxxxx Casualty Insurance Company, an Illinois insurance
company and wholly-owned subsidiary of KCI ("Xxxxxx" and together with KCI,
"Purchasers") and solely for purposes of Section 7.12 therein, Lumbermens Mutual
Casualty Company, an Illinois mutual insurance company ("Lumbermens"). The
Seller Parties are transferring to Purchasers the Business (as defined in the
Business Transfer Agreement);
WHEREAS, pursuant to Section 5.16 of the Business Transfer
Agreement and subject to the terms and conditions herein, Licensor has agreed to
grant to Licensee the right and license to use the Software; and
WHEREAS, subject to the terms and conditions hereinafter set
forth, Licensee desires to obtain such license as contemplated in the Business
Transfer
Agreement and Licensor is willing to grant to Licensee such license.
NOW THEREFORE, in consideration of the promises and the mutual
covenants and undertakings contained herein and the entering into of the
Business Transfer Agreement and the Ancillary Agreements (as defined in the
Business Transfer Agreement), in reliance upon the representations, warranties,
conditions and covenants contained therein, and upon the transactions
contemplated thereby, the parties hereby agree as follows:
1. DEFINITIONS.
As used herein, the following terms have the following
respective meanings:
1.1. "Confidential Information" shall mean the items subject to Section
5.17 of
the Business Transfer Agreement and including, without limitation, the source
and object code included in Section 2.3 hereof.
1.2. "Derivative Work" means a revision, modification, abridgment,
expansion, adaptation into other operating systems, or other manipulation of the
Software, or any other form in which the Software may be recast, transferred or
adapted.
1.3. "Documentation" means all Software (as defined below)
specifications, flow charts, user and systems manuals and all other written
materials that are required to use, install, maintain and/or enhance the
Software in Licensor's possession as of the date of the Business Transfer
Agreement.
1.4. "Intellectual Property Right" means any patent, copyright,
trademark, service xxxx (and any application or registration respecting the
foregoing), trade secret, know-how and other intellectual property right of any
type.
1.5. "Software" means Proprietary Software (as defined in the Business
Transfer Agreement and listed in Schedule 3.14 (c) (i)).
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Capitalized terms used herein but not otherwise defined herein
shall have the meanings set forth in the Business Transfer Agreement.
2. GRANT OF LICENSE
2.1. Grant of License in Software. Licensor hereby grants to Licensee
and its affiliates, subsidiaries, successors and permitted assigns, a perpetual
(subject to Section 4), non-exclusive, assignable (subject to Section 3.1),
transferable (subject to Section 3.1), royalty-free license:
2.1.1 to use, copy, display and distribute the Software solely
for the use of Licensee, its customers, agents, its affiliates,
subsidiaries, successors and permitted assigns, provided each such
customer, agent or permitted assign shall have entered into a written
agreement binding such entity to the terms hereof, including without
limitation the confidentiality provisions of Section thereof, and
providing that such person or entity may not sub-license the Software
or permit any other person or entity to use same.
2.1.2 to create Derivative Works from the Software.
2.2. Nonexclusivity of License. Licensee agrees that the license
granted herein to the Software shall be non-exclusive to Licensee and that
nothing herein shall prohibit Licensor from using the Software for any purpose
and granting licenses in respect of such Software.
2.3. Delivery. As soon as reasonably practicable following the date
hereof, Licensor shall deliver to Licensee one copy of all Software (in source
and object code).
2.4. Error Correction and Training.
2.4.1 For a period of six (6) months after the Closing Date,
if either Party identifies an error or bug in the Software and such
Party corrects such error condition with a modification or addition to
the Software ("Error Correction"), such Party agrees to provide the
other Party with such Error Correction. A list of all known and
uncorrected bugs or other errors with the Software, if any, is attached
hereto as Schedule A. Each Party agrees that for a period of six (6)
months from the Closing Date, any newly discovered error or bug in the
Software shall be reported in writing to the other Party within ten
(10) business days of such discovery.
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2.4.2 Licensor shall provide user business training for up to
twelve (12) people for a total of two (2) business days and during the
Transition Period (as defined in Section 3.1 of the Transition
Agreement between Seller Parties and the Purchasers) training during
normal business hours with Seller Parties core programmer staff (as
identified on Schedule 5.13 of the Business Transfer Agreement)
sufficient to provide programming proficiency on Proprietary Software
to Purchasers' skilled programmers, all such training to be given at
Seller Parties' 00 Xxxxx Xxxxxx, Xxx Xxxx Xxxx location. Seller Parties
obligations under this Section 2.4.2 shall terminate in the event that
the persons identified on Schedule 5.13 of the Business Transfer
Agreement are no longer employed by Seller Parties or any entity to
which they have outsourced their Information Technology department or
its functions.
2.5. Ownership.
2.5.1 Title to Software. The parties acknowledge and agree
that, as between Licensee and Licensor, Licensor shall retain ownership
of the Intellectual Property Rights in the Software and Licensee will
not take any action with respect to the Software inconsistent with the
foregoing acknowledgment.
2.5.2 Derivative Works. The parties acknowledge and agree
that, as between Licensee and Licensor, Licensor shall retain ownership
of the Intellectual Property Rights in and to any Derivative Works of
the Software developed by Licensor, and Licensee shall retain ownership
of the Intellectual Property Rights in and to any Derivative Works of
the Software developed by Licensee.
2.5.3 Third Party Licenses. Licensee acknowledges that
licensor is bound by certain third party software licenses which affect
Licensee's use of the Software and agrees to act in compliance with
these third party software licenses and the Business Transfer Agreement
with respect thereto.
3. ASSIGNMENT.
3.1. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns. Except as set
forth in Article 2, this Agreement may not be transferred, sublicensed or
assigned in whole or in part by Licensee, to any third party, without the prior
written consent of the Licensor, such consent not to be unreasonably withheld,
except to affiliates, subsidiaries, permitted assigns and a successor to all or
substantially all of the business or assets of Licensee.
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4. TERMINATION.
4.1. This Agreement shall continue in effect unless terminated as
provided herein.
4.2. If either party to this Agreement materially breaches any of its
obligations under this Agreement, then the other party may terminate this
Agreement on thirty (30) days' written notice to the defaulting party; provided
that such notice of termination shall be of no further force or effect if the
default is cured by the defaulting party to the reasonable satisfaction of the
non-defaulting party within thirty (30) days after receipt of such notice.
4.3. Termination of this Agreement for any reason shall not affect (i)
those obligations which have accrued as of the date of termination and (ii)
those obligations which, from the context thereof, are intended to survive
termination of this Agreement.
5. INDEMNIFICATION.
5.1. Subject to the indemnification provisions contained in the
Business Transfer Agreement, and as shall be applied to this Agreement, Licensor
shall indemnify, defend and hold harmless Licensee, its Affiliates, and their
respective directors, officers, employees and agents, harmless from any and all
damage, loss, liability and expense (including, without limitation, reasonable
attorneys' fees in connection with any action, suit or proceeding) incurred or
suffered by Licensee or its Affiliates arising out of any breach of this
Agreement on the part of the Licensor.
5.2. Subject to the indemnification provisions contained in the
Business Transfer Agreement, and as shall be applied to this Agreement, Licensee
shall indemnify, defend and hold harmless Licensor, its Affiliates, and their
respective directors, officers, employees and agents, harmless from any and all
damage, loss, liability and expense (including, without limitation, reasonable
attorneys' fees in connection with any action, suit or proceeding) incurred or
suffered by Licensor or its Affiliates arising out of any breach of this
Agreement on the part of the Licensee.
6. INFRINGEMENT.
6.1. Licensee agrees to notify Licensor in writing promptly after
becoming aware of any actual or potential infringement of the Software by any
third party or of any actual or threatened claim of infringement by any third
party against Licensee.
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6.2. Licensor shall have the sole right to send infringement notices
and/or bring infringement actions. If requested to do so, Licensee shall
reasonably cooperate with and assist Licensor in any such action, including
joining the action as a party, if necessary, at Licensor's sole cost and
expense.
7. CONFIDENTIAL INFORMATION.
The Parties acknowledge that they may disclose certain Confidential
Information to the other Party. The Parties agree to be bound by the same
confidentiality terms and conditions as in the Business Transfer Agreement.
8. MISCELLANEOUS.
8.1. Survival. Articles 4, 5 and 6 of this Agreement shall survive the
termination of this Agreement for any reason.
8.2. Incorporation by Reference. This Agreement shall incorporate by
reference all provisions of Sections 3.14 and 5.16 of the Business Transfer
Agreement.
8.3. Supremacy. In the event of a conflict between the provisions of
this Agreement and the Business Transfer Agreement, the provisions of the
Business Transfer Agreement shall control.
8.4. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party must be in writing and shall not
operate or be construed as a waiver of any subsequent breach by such party.
8.5. Complete Agreement; Amendments; Prior Agreements. This Agreement
and the other agreements referred to herein contain the entire agreement between
the parties with respect to the subject matter contained herein and supersede
all prior agreements or understandings written or oral between the parties with
respect thereto. This Agreement may not be amended, supplemented, canceled, or
discharged except by written instrument executed by both parties hereto.
8.6. Counterparts. This Agreement may be executed in counterparts each
of which shall be deemed an original and all of which together shall constitute
but one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Software
License Agreement as of the date first above written.
RELIANCE INSURANCE COMPANY
By:/s/ Xxxxxx Xxxxx Xxx Xxxxxx
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Name: Xxxxxx Xxxxx Xxx Xxxxxx
Title: President & CEO
XXXXXX CASUALTY, INC.
By:/s/ Xxxxxx Xxxx
---------------------------------------------
Name: Xxxxxx Xxxx
Title: President & CEO
XXXXXX CASUALTY INSURANCE
COMPANY
By:/s/ Xxxxxx Xxxx
---------------------------------------------
Name: Xxxxxx Xxxx
Title: President & CEO
Schedule A
Software Errors and Bugs
PROGRAM ERROR OR BUG
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