Exhibit 10.11
LICENSE AGREEMENT
This License Agreement ("Agreement") is effective October 29, 1993, by and
between FORMMAKER SOFTWARE, INC., a Georgia corporation with principal offices
at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("FSI") and POLICY
MANAGEMENT SYSTEMS CORPORATION, a South Carolina corporation, with principal
offices at Xxx XXX Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 ("PMSC").
WHEREAS, Software Partners, Inc. and PMSC entered into a Marketing Agreement
effective October 1, 1988 (the "1988 Agreement"); and
WHEREAS, FSI acquired Software Partners, Inc. by merger; and
WHEREAS, FSI and PMSC entered into a revised Marketing Agreement effective
December 31, 1990 (the "1990 Agreement"); and
WHEREAS, the 1990 Agreement has terminated and the parties have separately
entered into a new Marketing Agreement (the "Marketing Agreement"), which
provides for certain exclusive marketing commitments, service obligations, and
other matters; and
WHEREAS, pursuant to this Agreement PMSC shall obtain a perpetual, non-
exclusive, and worldwide license to the FSI software which is more fully
described in Exhibit A attached hereto (the "Software") in consideration of the
payment and other commitments of this Agreement; and
WHEREAS, this Agreement is intended to be independent of the Marketing Agreement
and fully paid-up as provided in Section 2.1 hereof, such that this Agreement
will stand on its own terms and survive any termination of the Marketing
Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants herein
contained and each act to be performed pursuant hereto, the parties hereby agree
as follows:
1.0 Software License Rights
1.1 FSI hereby grants PMSC a license to the Software as provided below and
in consideration of such license and all the other commitments and
obligations of FSI set forth herein, PMSC agrees to pay FSI $750,000.
Said amount shall be due and payable upon execution hereof.
1.2 The license which FSI hereby grants to PMSC under this Agreement is a
perpetual, royalty-free, paid-up, worldwide license to use, execute,
copy, and/or license the Software (including derivative works thereof)
to or for the benefit of any third parties within the worldwide
"insurance industry" for use in such industry ("End Users"). Parties
within the "insurance industry" include all persons and entities that
process insurance transactions of any kind, including without
limitation property, casualty, life, and health, as well as those
parties which have some form of vendor relationship that may involve
Software-related technology with End Users that process insurance
transactions. The End User should be able to use the Software only in
the insurance industry and not for banking or any other industry.
Notwithstanding the above, in the event an End User requires
incidental use by an affiliate which is not in the insurance industry,
PMSC shall be permitted to provide same.
1.3 Contemporaneously with the execution hereof, FSI agrees that it will
provide PMSC with the complete source code, object code and
documentation for the most current versions of the Software. The
Software includes, without limitation, all object code, source code
and documentation thereto, including all intellectual property rights
pertaining thereto, as it currently exists and as it shall be
modified, enhanced, changed, improved, developed and/or acquired by
FSI in the future during the term of the Marketing Agreement.
1.4 If PMSC determines at any time that the Software it is entitled to
have and receive under this Agreement has not been fully delivered or
is incomplete in any respect, then, at PMSC's request, FSI shall
immediately provide PMSC one (1) full set of all materials included
within the meaning of "Software" under this Agreement (including any
undelivered work-in-progress relating thereto).
1.5 Notwithstanding that PMSC is hereby acquiring royalty-free, paid-up
license rights to the Software, for End Users which (i) license the
Software pursuant to agreements ("License Agreements") or (ii) hire a
PMSC service which utilizes the Software for the benefit of such End
Users pursuant to agreements ("Services"), PMSC agrees that in
consideration of FSI making certain commitments and granting certain
rights, PMSC shall pay FSI certain compensation described in the
Marketing Agreement so long as the Marketing Agreement has not
terminated or expired.
1.6 Except in the circumstances set forth in Section 5.1 below, FSI
acknowledges and agrees that it may not terminate this Agreement or
PMSC's rights herein under any condition whatsoever and that any and
all disputes FSI may have against PMSC hereunder shall only be the
subject of legal remedies (not equitable remedies) and may only result
in monetary damages, if appropriate. Except in the circumstances set
forth in Section 5.1 below, FSI expressly waives any and all rights it
may have now or in the future to seek injunctive relief for any
alleged dispute with PMSC concerning the Software. Except in the
circumstances set forth in Section 5.1 below,
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FSI expressly agrees that a monetary damages remedy at law shall be an
adequate remedy for any and all disputes with PMSC.
1.7 FSI further agrees that PMSC's license rights in the Software include
the right for PMSC to use the Software to provide services to
customers which are not licensed to use the Software. Specifically,
and without limitation, PMSC's data processing, TPM and outsourcing
services divisions may use the Software for data entry and/or data
output by PMSC employees when such is a service provided to a data
processing, TPM or outsourcing services customer. Such services use by
PMSC includes the right to create forms for the services customer as
needed. PMSC shall not be obligated under the terms of this Agreement
to pay FSI any compensation beyond the above $750,000 as a result of
providing PMSC services that utilize some or all of the Software.
However, the immediately preceding sentence shall not negate any
provisions of the Marketing Agreement concerning PMSC providing FSI
with mutually agreed upon consideration during the term of the
Marketing Agreement in return for FSI's assistance with providing the
applicable Services.
1.8 FSI hereby authorizes PMSC to make as many copies of the Software as
PMSC reasonably deems necessary to exercise its license rights granted
under this Agreement.
1.9 FSI shall, at FSI's expense, take such action from time to time as may
be necessary or prudent to protect the ownership of the intellectual
property rights embodied in the Software, including all intellectual
property associated with the Software, including by seeking to enjoin
any infringement of such intellectual property. FSI shall promptly
respond in reasonable detail to any inquiry of PMSC regarding the
scope of such efforts and the existence of any known or suspected
unauthorized or conflicting uses or applications of such intellectual
property. In the event that, following PMSC's request, FSI fails to
take any action reasonably necessary to protect its intellectual
property and preserve the value of PMSC's rights, PMSC is authorized
(but shall not be obligated) upon written notice to FSI to take such
action on FSI's behalf and in FSI's name and place and PMSC may
recover its costs of doing so from FSI.
2.0 Representations and Warranties
2.1 FSI represents and warrants that PMSC shall receive, pursuant to this
Agreement and as of the effective date of this Agreement, complete
non-exclusive licensing rights for the Software in the worldwide
insurance industry. FSI represents and warrants that it has sole title
to the Software and that the only encumbrance on such title is as set
forth in Exhibit B to X. X. Xxxx Investment Company, Inc. ("X. X.
Xxxx"). FSI represents and warrants that it has the unqualified right
to transfer to PMSC the
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license and marketing rights to the Software which are the subject of
this Agreement and that prior to execution hereof FSI has provided
PMSC with acceptable written evidence that X. X. Xxxx does not in any
way dispute same.
2.2 FSI represents and warrants that the Software does not infringe any
patent, copyright, trade secret or other intellectual property rights
of any third party; that no notice or claim alleging any such
infringement has been received by FSI; that the Software is eligible
for protection under applicable copyright law and has not been
forfeited to the public domain; and that the source code and Software
specifications have been maintained in strictest confidence.
2.3 FSI represents and warrants that all agents, consultants and
contractors who have contributed to or participated in the conception
and development of the Software either (i) have been party to a for-
hire relationship with FSI that has accorded FSI full, effective, and
exclusive original ownership of all property rights arising with
respect to the Software or (ii) have executed appropriate instruments
of assignment in favor of FSI as assignee that have conveyed to FSI
full, effective and exclusive ownership of all property rights arising
with respect to the Software, or the right to utilize, license and
market the same as contemplated herein.
2.4 FSI represents and warrants that there are no agreements or
arrangements now or previously in effect with respect to the
marketing, distribution, licensing, or promotion of the Software by
any third party where such third party can receive compensation as a
result of an entity in the insurance industry obtaining benefits from
use of the Software by itself or by a third party.
2.5 FSI represents and warrants that the Software conforms and operates in
all material respects in accordance with its documentation,
specifications and marketing brochures, and that the attached Exhibit
A is a complete and correct list and summary description of all
computer software modules currently comprising the Software.
2.6 FSI represents and warrants that the execution and delivery of this
Agreement by FSI does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of the Articles of
Incorporation, as amended, or Bylaws, as amended, of FSI. No consent,
approval, order or authorization of, or registration, declaration or
filing with, any governmental or other entity is required to be
obtained or made by or with respect to FSI in connection with the
execution and delivery by FSI of this Agreement or the consummation of
the transactions contemplated hereby.
2.7 FSI represents and warrants that FSI has the capacity and authority to
execute and deliver this Agreement, to perform hereunder and to
consummate the transactions contemplated hereby without the necessity
of any act or consent of any other person or entity other than X. X.
Xxxx. FSI shall provide X. X. Xxxx'x consent by
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obtaining X. X. Xxxx'x execution of the attached Agreement prior to
PMSC and FSI's execution of this Agreement. The execution, delivery
and performance by FSI of this Agreement have been duly authorized and
approved by the Board of Directors of FSI. This Agreement and all FSI
commitments set forth herein constitute the valid and legally binding
obligations of FSI enforceable against it in accordance with their
respective terms.
3.0 Indemnification
3.1 FSI hereby agrees to fully indemnify, defend and hold PMSC harmless
from and against all liability, loss, damages or injury and all
reasonable costs and expenses (including reasonable counsel fees and
costs and expenses related thereto) suffered or incurred by PMSC and
arising from any misrepresentation, failure to provide material
information or breach of any covenant or warranty of FSI contained in
this Agreement. FSI further agrees to submit to personal jurisdiction
in any forum in which PMSC may be sued on any claim subject to
indemnification. Any information FSI may have given PMSC prior to the
effective date hereof shall in no way limit, affect or impair the
ability of PMSC to rely upon the representations, warranties,
covenants and obligations of FSI set forth in this Agreement. All
representations and warranties made or undertaken by FSI in this
Agreement are material, have been relied upon by PMSC and shall
survive the execution and performance of this Agreement.
3.2 The foregoing indemnity is conditioned on the following:
3.2.1 Prompt written notice to FSI of any claim or proceeding subject
to indemnity; and
3.2.2 Cooperation by PMSC in the defense and settlement of such claim
at the expense of FSI; and
3.2.3 Prior written approval by FSI of any settlement, which approval
shall not be unreasonably withheld.
4.0 Further Assurances
4.1 FSI agrees that FSI shall execute, acknowledge and deliver such
further affidavits or license clarification documents or instruments
as PMSC may deem necessary or desirable to evidence more fully the
grant of the within described license of the Software to PMSC. FSI
additionally agrees to provide testimony in connection with
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any proceeding affecting PMSC's rights in the Software as described
herein and to perform any other acts deemed necessary to carry out the
intent of this Agreement.
5.0 Term and Termination
5.1 This Agreement shall be effective on the date first above written and
shall remain in force in perpetuity; provided, however, that
(1) if, at any time while the Marketing Agreement is in effect, PMSC
(a) elects to enter into a marketing agreement with a third party that
has developed a materially competitive product to the Software (such
as Image Sciences, Inc. or Computer Language Research, Inc. (EFS)) or
if PMSC receives significant compensation from licensing fees or
otherwise from the marketing of a materially competitive product or
(b) PMSC independently commences material development and marketing
efforts relative to programs and/or materials which are materially
competitive with the Software's electronic forms processing functions,
or
(2) if, during the five (5) year period after the termination or
expiration of the Marketing Agreement, PMSC enters into a marketing
agreement with a third party that has developed a materially
competitive product to the Software (such as Image Sciences, Inc. or
Computer Language Research, Inc. (EFS)) or if PMSC receives
significant compensation from licensing fees or otherwise from the
marketing of a materially competitive product,
PMSC agrees that FSI may elect to terminate this Agreement, provided
further that FSI first gives PMSC prior written notice of FSI's
election and at least 60 days to cure or otherwise resolve the
situation in writing with FSI. Notwithstanding the above, if, during
the five (5) year period after the termination or expiration of the
Marketing Agreement, FSI enters into an agreement with a third party
which has developed a materially competitive product to any of PMSC's
application software products or if FSI has received compensation
related to its Software as a result of such agreement with such third
party, then, to an extent similar to FSI's arrangement or
arrangements, PMSC may enter into an agreement or agreements with a
third party which has developed a materially competitive product to
the Software and the FSI termination right set forth in item number
(2) in the immediately preceding sentence shall not apply with respect
to such instances. If, during the five (5) year period after the
termination or expiration of the Marketing Agreement, FSI ceases to
achieve greater than $1,000,000 in reported annual revenues determined
in accordance with generally accepted accounting principles, then item
number (2) in the first sentence of this Section 5.1 shall no longer
apply.
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5.2 In the event of a termination of this Agreement, PMSC shall return or
destroy all copies of the Software and certify same to FSI.
6.0 Information
6.1 PMSC will protect the Software in a manner(s) which is similar to the
manner(s) in which PMSC protects PMSC's own proprietary software
systems; provided that if a third party infringes upon FSI's
proprietary rights in the Software, Section 1.9 shall apply. The
immediately preceding sentence shall not negate any provisions of the
Marketing Agreement concerning PMSC's obligations relative to
unauthorized disclosure during the term of the Marketing Agreement.
6.2 The obligation set forth immediately above shall not apply to the
extent (i) PMSC is required to disclose the Software under court or
governmental order; provided that PMSC shall have used reasonable and
diligent efforts to first notify FSI so that FSI could attempt to
secure an appropriate protective order respecting the Software to be
disclosed; (ii) the Software is in or comes into the public domain
through no wrongful act or omission of PMSC; (iii) information is
received by PMSC from a third party not in violation of an obligation
of confidentiality to FSI; (iv) FSI discloses or makes available the
Software to a third party on an unrestricted basis; or (v) PMSC shall
be able to demonstrate that such information or technology shall have
been independently developed by or on behalf of PMSC.
6.3 Confidentiality. FSI hereby agrees that all information, other than
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nonconfidential marketing information such as the existence of this
Agreement, communicated by PMSC to FSI, whether under the prior
agreements referred to above or after the effective date hereof, shall
be given by PMSC and received by FSI in confidence and shall be used
only for the purposes of this Agreement and only in accordance with
the terms of that certain Non-Disclosure Agreement between the parties
dated August 14, 1990, as amended. No such information, including
without limitation the specific terms of this Agreement, shall be
disclosed by FSI's employees without the prior written consent of PMSC
except FSI may share this information with its attorneys, lenders
and/or accountants provided that they are properly advised to keep
this confidential. Additionally, FSI shall not utilize PMSC's name or
any reference to this Agreement in any transaction or offering
involving new or existing equity or debt securities of FSI or any
related company without PMSC's prior written consent; provided,
however, that PMSC acknowledges that FSI has had and will continue to
have discussions with X. X. Xxxx and that such shall not constitute a
breach of the restriction in the first half of this sentence.
7.0 Freedom of Independent Development
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7.1 Nothing in this Agreement shall be construed as prohibiting or
restricting PMSC from independently developing and marketing programs
and/or materials which are in any manner competitive with the
Software. The foregoing sentence does not amend or diminish Section
5.1 above.
8.0 General
8.1 All notices which are required or permitted to be given or submitted
pursuant to this Agreement shall be in writing and shall be sent as
follows: (i) delivered in person, (ii) sent certified mail, return
receipt requested, to the address set forth herein or to such other
address as a party may from time to time designate in writing for such
purpose, (iii) using Federal Express or other reliable overnight
delivery service, or (iv) by telefax to the following numbers: PMSC -
(000) 000-0000/FSI - (000) 000-0000. Notices shall be deemed to have
been given at the time when personally delivered, the next day if by
overnight delivery, upon sending if by telefax, or if mailed in a
certified, post-paid envelope, upon the fifth (5th) calendar day after
the date such notice shall be postmarked. All notices to PMSC shall be
addressed to its General Counsel.
8.2 Neither party shall, voluntarily or by operation of law, assign this
Agreement or any of its rights or obligations hereunder without the
prior written consent of the other party.
8.3 The terms and conditions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. Nothing in this Agreement, whether express or implied, shall
be construed to give any third party (other than successors and
permitted assigns of the parties) any legal or equitable right, remedy
or claim under or in respect to this Agreement or any covenants,
conditions or provisions contained herein.
8.4 This Agreement and any Exhibits hereto: (i) constitute the entire
agreement between the parties and supersede and merge any and all
prior discussions, representations, demonstrations, negotiations,
correspondence, writings and other agreements, and together state the
entire understanding and agreement between PMSC and FSI respecting the
subject matter of this Agreement; (ii) may be amended or modified only
in writings agreed to and signed by authorized contracting officers of
PMSC and FSI; and (iii) shall be construed to be performed and
enforced in all respects in accordance with the laws of the State of
South Carolina. This Agreement does not in any way alter or amend the
Agreements dated March 1, 1992 (TPM) and September 1, 1992 (Filings
and Cancellations). This Agreement is independent of the Marketing
Agreement and neither shall be construed to be dependent on,
contingent on or in consideration for the other.
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8.5 The captions and Section numbers appearing in this Agreement are
inserted only as a matter of convenience and do not in any way define,
limit, construe or describe the scope or intent of such Sections or in
any way affect this Agreement.
8.6 If any provision of this Agreement or the application thereof is
hereafter held invalid or unenforceable, the remainder of this
Agreement shall not be affected thereby, and to this end the
provisions of this Agreement are declared severable.
8.7 No failure or delay on the part of a party in exercising any right
hereunder will operate as a waiver of any such right. Pursuit of
certain remedies with respect to all or some of the rights granted
hereunder shall not bar other remedies with respect to the rights
granted hereunder. No waiver of any provision of this Agreement shall
be deemed or shall constitute a waiver of any other provision, whether
or not similar, nor shall any waiver constitute a continuing waiver.
8.8 NEITHER PARTY SHALL BE RESPONSIBLE FOR ANY INDIRECT OR CONSEQUENTIAL
DAMAGES OR FOR ANY LOST PROFITS WHICH MAY RESULT FROM ITS PERFORMANCE
OR FAILURE TO PERFORM HEREUNDER.
8.9 PMSC and FSI hereby specifically agree and acknowledge that they are
not creating a partnership or joint venture hereby and that neither
party, nor any employee of either party, shall be deemed an employee
or agent of the other party for any purpose.
8.10 Bankruptcy.
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8.10.1 Should FSI voluntarily or involuntarily become subject to the
protection of the United States Bankruptcy Act, it is agreed that
PMSC, as licensee of the Software, shall be entitled to all of the
benefits of the Bankruptcy Act, including the amendments to the
Bankruptcy Act effected by the October 18, 1988 Intellectual Property
Bankruptcy Protection Act, both under this Agreement and any
supplemental agreements pertaining to intellectual property rights of
FSI that may be entered into between PMSC and FSI.
8.10.2 If FSI or the trustee in bankruptcy rejects this Agreement
under Section 365 of the Bankruptcy Code, 11 U.S.C., PMSC may elect
(a) to treat this Agreement as terminated or (b) to retain PMSC's
rights under this Agreement, specifically including, without
limitation, the right to exercise its rights granted herein to
Software (and to all work-in-progress relating thereto). Failure by
PMSC to assert its rights to "retain its benefits" to the intellectual
property embodied in the Program(s), pursuant to Section 365 (n) (1)
(B) of the Bankruptcy Code, 11 U.S.C., under an executory contract
rejected by the trustee in bankruptcy, shall not be
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construed by the courts as a termination of the contract by PMSC under
Section 365 (n) (1) (A) of the Bankruptcy Code.
8.10.3 Except as expressly provided herein, this Agreement and the
rights and licenses granted hereunder shall not be impaired or
diminished by the occurrence or continuance of any breach of any other
agreement between the parties, any lack of capacity or authority, any
reorganization, liquidation, dissolution, merger, or consolidation, or
any other change of circumstances of FSI or PMSC.
8.11 The covenants, obligations and warranties of this Agreement shall be
deemed to apply to any controlled or majority owned subsidiaries of
each of the parties such that a breach or violation of any of such
covenants, obligations or warranties by any such controlled or
majority owned subsidiary shall be deemed to be a breach by FSI or
PMSC, respectively, and shall give rise to the same remedies against
FSI or PMSC as if FSI or PMSC had itself breached or violated such
provision. However, nothing herein grants a direct right of action
against or places a party in privity with any such subsidiary.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first above
written.
PMSC FSI
POLICY MANAGEMENT SYSTEMS FORMMAKER SOFTWARE, INC.
CORPORATION
BY: _______________________________ BY: _____________________________
(AUTHORIZED SIGNATURE) (AUTHORIZED SIGNATURE)
_______________________________ ____________________________
(NAME) (NAME)
_______________________________ ____________________________
(TITLE) (TITLE)
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