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Exhibit
10(l)
LICENSE AND HOSTING AGREEMENT
THIS LICENSE AND HOSTING AGREEMENT (“
Agreement ”) is made effective as of the 17
th day of October, 2007 (“ Effective Date
”), by and between Transaction Applications Group, Inc., a
Nebraska corporation (“ TAG ”), and Legacy
Marketing Group, Inc., a California corporation (“ LMG
”).
BACKGROUND . This Agreement is the License
and Hosting described in Section 1.5 of the Asset Purchase
Agreement between the parties dated the date hereof (the “
Purchase Agreement ”). It describes the terms
and conditions under which TAG will Use and access the LMG Tools,
CSC Software and Other Third Party Software until the date that is
six (6) months after transition of the TPA Services for the New
Customers from LMG’s software and systems to TAG’s
software and systems. (“ Conversion Date ”) or
such other date as is specified in Exhibit A .
Capitalized terms used but not defined in this Agreement
shall have the meaning given them in the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual benefits
to be derived and the representations and warranties, conditions
and promises herein contained, and intending to be legally bound
hereby, LMG and TAG agree as follows:
ARTICLE I
AGREEMENT AND DEFINITIONS
1.1
Agreement . The parties agree that
the terms and conditions of this Agreement apply to the
provision of LMG Tools, CSC Software, Other Third Party Software
and LMG Services to TAG by LMG.
1.2
Certain Definitions . The following
definitions apply to this Agreement:
(a)
“ Applicable Specifications ”
means the functional, performance, operational, compatibility,
and other specifications or characteristics of the LMG Tools,
CSC Software and Other Third Party Software described in the
applicable Documentation or necessary for TAG to provide the TPA
Services to the New Customers and perform its obligations under
the New Customer Contracts.
(b)
“ CSC Software ” means the
computer programs identified in Exhibit A licensed by LMG
from Computer Sciences Corporation (“ CSC ”),
including object code (including microcode) and/or where
available to LMG source code, that are provided or to be
provided by LMG pursuant to this Agreement. The definition of
CSC Software also includes any enhancements, translations,
modifications, updates, releases, or other changes to CSC
Software.
(c)
“ Documentation ” means user
guides, operating manuals, education materials, product
descriptions and specifications, technical manuals, supporting
materials, and other information relating to the LMG Tools, CSC
Software and Other Third Party Software or used in conjunction with
the TPA Services, whether distributed in print, magnetic,
electronic, or video format.
(d)
“ LMG Tools ” means the
LMG-developed computer programs identified in Exhibit A ,
including, where applicable object code (including microcode)
and/or source code, that are provided or to be provided by LMG
pursuant to this Agreement. The definition of LMG Tools also
includes any enhancements, translations, modifications, updates,
releases, or other changes to LMG Tools.
(e)
“ LMG Services ” means the
support, hosting and other services, functions and
responsibilities provided or to be provided by LMG pursuant to
this Agreement.
(f)
“ Other Third Party Software
” means the computer programs identified in Exhibit
A licensed by LMG from third parties other than CSC,
including object code (including microcode) and/or where
available to LMG source code, that are provided or to be
provided by LMG pursuant to this Agreement. The definition of
Other Third Party Software also includes any enhancements,
translations, modifications, updates, releases, or other changes
to Other Third Party Software.
ARTICLE II
LICENSE OF LMG TOOLS
2.1
Grant of License . LMG grants TAG a
worldwide, nonexclusive, irrevocable, perpetual license to load,
execute, access, employ, use, store, or display (“
Use ”) the object code version of the LMG
Tools and Documentation (the “ License ”) for
the period specified in Exhibit A in accordance with the
terms and conditions of this Agreement.
(a)
TAG may Use the LMG Tools and Documentation
solely to provide TPA Services to or for the New Customers and
Terminated Customers, and perform its obligations under the
Administrative Services and Teaming Agreement, New Customer
Contracts and Subcontracts including performing disaster
recovery, disaster testing, and backup as TAG deems
necessary.
(b)
The License grant includes a license under all
current and future patents owned by or licensed to LMG that are
applicable to the LMG Tools and Documentation or the provision
or receipt of the LMG Services, to the extent necessary to
exercise any of the foregoing rights.
(c)
LMG acknowledges and agrees that the New
Customers may have access to and Use of the LMG Tools and
Documentation under the terms of the New Customer Contracts.
(d)
The License also includes the right to Use the
source code version of LMG Tools in accordance with the terms
and conditions of Section 3.7 .
(e)
Except as specified in this Agreement, the License
does not permit TAG to sublicense, rent or allow third parties to
Use the LMG Tools or Documentation.
2.2
Proprietary Markings and Duplication .
TAG shall not remove or destroy any proprietary markings or
proprietary legends placed upon or contained within the LMG Tools
or Documentation. TAG may duplicate Documentation, at no additional
charge, for TAG’s Use or for Use by a TAG in connection with
the provision of LMG Tools so long as all required proprietary
markings are retained on all duplicated copies.
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2.3
Ownership of LMG Tools and Modifications
. The LMG Tools and Documentation shall be and remain the
property of LMG, and TAG shall have no right or interest therein
except as set forth in this Agreement. TAG shall be
entitled to modify the LMG Tools and Documentation and to
develop software derivative of or interfacing with the LMG
Tools. All modifications of and software derivative of the
LMG Tools and Documentation developed by TAG shall be and remain
the property of TAG, and LMG shall have no rights or interests
therein.
2.4
Protection of LMG Tools . TAG will
treat the LMG Tools and Documentation with the same degree of
care and confidentiality that TAG provides for similar
information belonging to TAG which TAG does not wish disclosed
to the public, but not less than reasonable care. This
provision shall not apply to LMG Tools or Documentation, or any
portion thereof, which is (a) already known by TAG without
an obligation of confidentiality, (b) publicly known or
becomes publicly known through no unauthorized act of TAG,
(c) rightfully received from a third party without
obligation of confidentiality, (d) disclosed without
similar restrictions by LMG to a third party, (e) approved
by LMG for disclosure, or (f) required to be disclosed
pursuant to a requirement of a governmental agency or law so
long as TAG provides LMG with timely prior written notice of
such requirement. It will not be a violation of this
Section 2.4 if TAG provides access to and the Use of the
LMG Tools or Documentation to any third party contractor so long
as TAG secures execution by such third party contractor of a
confidentiality agreement as would normally be required by
TAG.
ARTICLE III
SUPPORT AND HOSTING SERVICES
3.1
CSC Software . LMG will maintain,
through the Conversion Date, its existing license for the CSC
Software and provide TAG access to and an irrevocable “look
access only” right and license to use the CSC Software and
applicable Documentation. Contemporaneously with the execution of
this Agreement, TAG, LMG and CSC shall execute a nondisclosure and
non-use agreement granting TAG a license in the CSC Software
sufficient for TAG to perform the TPA Services and otherwise
satisfy its obligations under the New Customer Contracts,
Subcontracts and Administrative Services and Teaming Agreement (the
“CSC Agreement”). TAG’s use of, and
LMG’s rights regarding, the CSC Software will be governed by
the terms of the CSC Agreement and not the terms of this Agreement.
At TAG’s request, LMG shall exercise and make available
to TAG all rights and benefits available to it under LMG’s
existing license with CSC including LMG’s rights to receive
error corrections, support, maintenance and upgrades to or for the
CSC Software.
3.2
Other Third Party Software . LMG
will maintain, through the Conversion Date or such other date as
is specified in Exhibit A, its existing licenses for the Other
Third Party Software and provide TAG access to and an
irrevocable “look access only” right and license to
use the Other Third Party Software and applicable Documentation.
LMG, with the reasonable cooperation of TAG, will obtain
from the applicable third party vendors all licenses, consents,
authorizations and approvals that are necessary or appropriate
for TAG to so Use the Other Third Party Software for purposes of
performing the TPA Services and fulfilling its obligations under
the New Customer Contracts, Subcontracts and Administrative
Services and Teaming Agreement. At TAG’s request,
LMG shall exercise and make available to TAG all rights and
benefits available to it under LMG’s existing license with
the applicable third party vendors including LMG’s rights
to receive error corrections, support, maintenance and upgrades
to or for the Other Third Party Software.
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3.3
Support Services . LMG shall
provide the following with respect to the LMG Tools, CSC
Software, Other Third Party Software and Documentation for the
period specified in Exhibit A :
(a)
LMG shall provide (or will cause the third party
vendor to provide) to TAG all error corrections and all
operational and support assistance necessary to cause the LMG
Tools, CSC Software and Other Third Party Software to perform in
accordance with their Applicable Specifications. LMG shall
also provide remedial support designed to provide a by-pass or
temporary fix to a defect until the defect can be permanently
corrected.
(b)
LMG shall provide (or will cause the third party
vendor to provide) to TAG all upgrades, modifications,
improvements, enhancements, extensions, and other changes to LMG
Tools developed by LMG.
(c)
LMG shall provide (or will cause the third party
vendor to provide) to TAG any revisions to the existing
Documentation developed for the LMG Tools, CSC Software and
Other Third Party Software or necessary to reflect all
corrections, updates, upgrades, modifications, improvements,
enhancements, extensions or other changes thereto.
(d)
LMG shall provide training to TAG with respect
to the use of the LMG Tools, Other Third Party Software and
Documentation as reasonably requested by TAG.
3.4
Hosting Services . LMG shall host the
LMG Tools, CSC Software and Other Third Party Software at its
existing data center facility in Petaluma, California for the
period specified in Exhibit A . Except for downtime
for scheduled maintenance, LMG shall make the LMG Tools, CSC
Software and Other Third Party Software available to users between
7:00 a.m. to 9:00 p.m. Eastern Time. Notice of scheduled
maintenance shall be provided to TAG via email at least ten (10)
days before the scheduled maintenance. LMG shall be financially and
operationally responsible for the hosting environment including
maintenance, repair, replacement and upgrade, and the performance,
availability, reliability, compatibility and interoperability of
the LMG Tools, CSC Software, Other Third Party Software and hosting
environment. LMG shall provide the hosting services through a
dedicated telecommunications connection to TAG. The
equipment, connectivity and other items located at LMG’s
existing data center facility in Petaluma, California that is
described in Exhibit C to the Administrative Services and
Teaming Agreement are included within the hosting environment and
access to be provided by LMG under this Section 3.4 .
3.5
Retained LMG Personnel . LMG shall
exercise commercially reasonable efforts to maintain the employment
of the LMG employees identified in Exhibit B (“
Retained Employees ”) for the estimated retention
period specified in Exhibit B or such other period as TAG
may reasonably request (“ Retention Period ”).
LMG shall cause them to devote the same amount of time and
attention to the performance of the services under this Agreement
as they presently devote to such services. In all events, LMG
shall retain a sufficient number of qualified personnel to perform
the LMG Services. The Retained Employees shall be employees
of LMG for all purposes. LMG shall be solely responsible for
funding and distributing benefits under the benefit plans in which
the Retained Employees participate and for paying any compensation
and remitting any income, disability, withholding and other
employment taxes for such Retained Employees. For clarity,
the foregoing shall not affect TAG’s obligation to reimburse
LMG for the costs specifically identified as reimbursable by TAG
during the period, and under the terms and conditions, set forth in
Sections 4.1 and 4.2 of this Agreement.
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3.6
Reports . LMG shall provide
TAG with reports pertaining to the performance of the LMG
Services and LMG’s other obligations under this Agreement
that permit TAG to perform the TPA Services and monitor and
manage LMG’s performance. Without limitation, TAG may
identify reports to be generated by LMG and delivered to TAG on
an ad hoc or periodic basis.
3.7
Source Code . Upon TAG’s
request, LMG will promptly provide to TAG one copy of the most
current version of the source code for the LMG Tools.
Thereafter, LMG will promptly and continuously update and
supplement the source code as necessary with all revisions,
corrections, enhancements, and other changes that LMG has
developed for the LMG Tools. If LMG breaches this
Agreement or no longer provides the LMG Services for the LMG
Tools, then LMG or its authorized agent will promptly provide to
TAG one copy of the most current version of the source code for
the LMG Tools, the License shall include the right to Use the
source code version of the LMG Tools received under this Section
as necessary to modify, maintain, and update the LMG Tools in
accordance with the terms and conditions of this Agreement.
3.8
Continued Performance . LMG
understand that TAG requires Use of the LMG Tools, CSC Software,
Other Third Party Software, Documentation and LMG Services in
order to perform the TPA Services for the New Customers.
Accordingly, LMG agrees that LMG will perform its
obligations under this Article in a manner that does not
degrade, diminish or otherwise interfere with the TPA Services
or result in any default by, or liability of, TAG under the New
Customer Contracts (including any default or liability with
respect to service levels or quality of service). Without
limitation, LMG shall not under any circumstance, even during a
dispute, suspend, terminate, diminish or degrade the performance
of the LMG Tools, CSC Software, Other Third Party Software or
LMG Services, or attempt or threaten to do the same.
ARTICLE IV
CHARGES
4.1
Reimbursement Generally . In
consideration of the LMG Services and other obligations to be
performed by LMG under this Agreement, TAG will reimburse LMG
for the following items.
(a)
reasonable actual salary and direct benefits,
consistent with past practice, paid to or on behalf of the
Retained Employees during their Retention Period;
provided that the total amount to be reimbursed under
this Section 4.1(a) shall not exceed $783,367 per
quarter, pro-rated for the number of days in any partial quarter
of the Term,
(b)
any retention bonuses, salary increases (including
for replacement personnel) or other change agreed to by the
parties, and
(c)
during the period between the Effective Date and
the date specified in Exhibit A , the designated percentage
identified in Exhibit A of the reasonable actual
out-of-pocket costs for the CSC Software and Other Third Party
Software provided that the total amount to be reimbursed
under this Sections 4.1(c) and Section 4.2 of the
Administrative Services and Teaming Agreement shall not exceed the
applicable amount identified in Section 4.2 of the
Administrative Services and Teaming Agreement.
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The parties acknowledge that since not all of
the Retained Employees will be dedicated solely to the
performance of services under this Agreement, TAG will reimburse
LMG only for a pro rata portion of the above-described salary
and benefits based upon the documented and verifiable percentage
of their working hours spent performing services for TAG.
4.2
Conditions of Reimbursement .
(a)
TAG shall have the right to approve any changes to
the salary, benefits or other compensation of the Retained
Employees and any new contracts, extensions or other changes to or
for the items for which it is reimbursing LMG. Such approval
shall not be unreasonably withheld. LMG will advise TAG of
any significant (i.e., more than ten percent (10%)) increase in any
reimbursable costs, and TAG shall have the opportunity to require
replacement or substitution of new or different sources for the
items intended to achieve an overall lower cost. LMG shall
exercise commercially reasonable efforts to minimize such costs
and, as a condition to TAG’s reimbursement obligations, shall
provide such detail and documentation as TAG may reasonably
request.
(b)
LMG will invoice TAG monthly for its reasonable
estimate of the amount due under Section 4.1 for that
month. The first such invoice shall be delivered within
five (5) days after the Effective Date and shall cover the
period between the Effective Date and October 31, 2007.
LMG shall reconcile the actual reimbursable costs incurred
by TAG for the applicable month with such estimate in the
invoice for the next month.
(c)
TAG shall make payment within twenty (20) days
after receipt of LMG’s invoice. Any amount not paid
when due will thereafter bear interest at the rate of one
percent (1%) per month.
(d)
TAG may contest, in good faith, any portion of
an invoice and withhold payment of such contested amount,
provided that TAG pays the portion of any invoice that it
does not contest and attempts to try to resolve the dispute.
Once the matter is resolved, TAG shall pay the agreed-upon
amount within five (5) days thereafter.
(d)
Except as otherwise agreed by the parties in
writing, there are no other or additional charges under this
Agreement. LMG shall be responsible for all expenses that it
may incur in connection with this Agreement. TAG agrees,
however, to reimburse LMG for all reasonable and necessary travel
and other out-of-pocket expenses that have been pre-approved by TAG
in writing.
4.3
Extension of Conversion Date . TAG and
LMG expect that the Conversion Date will occur on or before October
31, 2009. TAG may extend the Conversion Date to a date that
is six (6) months after transition of the TPA Services for the New
Customers from LMG’s software and systems to TAG’s
software and systems; provided that the foregoing shall not
be construed as requiring the extension of the license to the CSC
Software, which the parties acknowledge expires twenty-seven (27)
months after the Effective Date under the terms of the CSC
Agreement. TAG shall seek to give LMG at least ninety (90)
days (but in no event shall provide less than sixty (60) days)
prior notice of any such extension. If the delay was caused
by TAG, the parties shall negotiate and agree upon an equitable
adjustment to the reimbursable items and limits thereon based upon
LMG’s increased costs of performing the LMG Services during
the extension.
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ARTICLE V
WARRANTIES, INDEMNITIES, AND
LIABILITIES
5.1
Warranty . LMG represents and
warrants that:
(a)
The LMG Tools, CSC Software, Other Third Party
Software and Documentation are and shall be free and clear of
all liens and encumbrances, and TAG shall be entitled to Use
them without disturbance;
(b)
No portion of the LMG Tools, CSC Software and
Other Third Party Software contains, at the time of delivery,
any “back door,” “time bomb,”
“Trojan horse,” “worm,” “drop dead
device,” “virus,” or other computer software
routines or hardware components designed to (i) permit access or
Use of such software or TAG’s computer systems by LMG or a
third party not authorized by this Agreement, or (ii)
disable, damage or erase the software or data;
(c)
The LMG Tools, CSC Software and Other Third
Party Software and the design thereof shall not contain
preprogrammed preventative routines or similar devices which
prevent TAG from exercising the rights granted to TAG under this
Agreement or from utilizing the software for the purpose for
which they were designed; and
(d)
Each item of LMG Tools and, to LMG’s
knowledge, the CSC Software and Other Third Party Software
(i) shall be free from defects and (ii) shall function
properly under ordinary Use and operate in conformance with its
Applicable Specifications and Documentation.
During the period specified in Exhibit A ,
LMG will provide warranty service to TAG at no additional charge
and will include all LMG Services or replacement software necessary
to enable LMG to comply with the warranties set forth in this
Agreement.
5.2
LMG Infringement Indemnification
(a)
LMG represents and warrants that (i) no LMG Tools,
CSC Software, Other Third Party Software or Documentation provided
under this Agreement is the subject of any claim, dispute, demand
or litigation (“ Claim ”), and (ii) LMG has all
right, title, ownership interest, and/or rights necessary to
provide such software and Documentation to TAG and that the
License, the LMG Tools and Documentation and their license and Use
hereunder do not and shall not directly or indirectly violate or
infringe upon any copyright, patent, trade secret, or other
proprietary or intellectual property right of any third party or
contribute to such violation or infringement (“
Infringement ”). LMG shall indemnify and hold
TAG, its affiliates and their respective successors, officers,
directors, employees, and agents harmless from and against any and
all actions, claims, losses, damages, liabilities, awards, costs,
and expenses including legal fees (“ Losses ”)
resulting from or arising out of any breach or claimed breach
of the foregoing warranties, or which is based on a claim of an
Infringement and LMG shall defend and settle, at its expense, all
suits or proceedings arising therefrom. TAG shall inform LMG
of any such Claim against TAG and shall have the right to
participate in the defense of any such suit or proceeding at its
expense and through counsel of its choosing.
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