EXHIBIT
10(bm)
TERMINATION
AGREEMENT
This Contract Termination Agreement (“
Termination Agreement ”) is made by and
between NATIONAL WESTERN LIFE INSURANCE COMPANY, (“
NWL ”), and LIFE SYSTEMS, INCORPORATED,
(“ LSI ”), Bob Willingham, and Gale
Hasselmeier. NWL and LSI may be referred to collectively herein as
“ Parties.”
RECITALS
A. The Parties entered into a
Consulting and Software Development Agreement (“
Agreement ”) dated February 28, 2002 for
software development services as contracted for, requested, and
paid for by NWL (“ Pre-Termination
System ”).
B. The Agreement required LSI to
provide specified documentation (“
Documentation ”), and to complete certain
portions of the Pre-Termination System in a timely fashion and with
a certain level of functionality.
C. The Parties wish to agree to a
termination of the Agreement for convenience effective March 30,
2007, without ascribing any fault, subject to the terms and
conditions set forth below. Parties agree to waive any notice
required under the Agreement for termination for
convenience.
NOW, THEREFORE, in order to compromise and
settle potential and existing claims between the Parties, which
relate to or arise out of the Agreement and the recitals above, the
Parties hereby agree as follows:
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1.
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Contract Termination.
NWL and LSI agree that the Agreement
is terminated effective March 30, 2007 (“ Effective
Date ”). Except as expressly modified herein, the
terms of the Agreement survive as described in section 17.6 of the
Agreement.
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2.
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Payment.
In consideration for the
promises included herein, NWL will pay the sum of $250,000 (two
hundred fifty thousand dollars) to LSI. $150,000 will be paid
within by 5:00 p.m. on April 3, 2007, and $100,000 will be paid
within two days of performance by LSI of the transition obligation
set forth in paragraph 8(ii) hereof. NWL will make payments as described within this
paragraph. LSI acknowledges that no other or additional payments to
LSI or its principals, Bob Willingham (“Bob”) or Gale
Hasselmeier (‘Gale”), will be made for any
reason.
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3.
Employee
Transfers . NWL agrees to engage each LSI
employee (not including Bob and Gale, and their wives) at their
current levels of salary and benefits (to the extent that it is
able to obtain services from Administaff sufficient to administer
such), for at least 60 days after the Effective Date. Subject
thereto, each such LSI employee will become an at will temporary
employee of NWL on the Effective Date of this Termination
Agreement. NWL’s obligations under this paragraph 3 extend
only to LSI employees immediately working for NWL on the Effective
Date of this Termination Agreement and continuing to satisfactorily
perform duties as requested by NWL for the 60 days following the
Effective Date.
4.
Expense
Advance . LSI agrees to reimburse NWL for the
unused balance of the $200,000 expense advance currently kept in an
LSI bank account on the Effective Date. To the extent that the
expense advance has been drawn down for expenses, LSI agrees to
provide documentation acceptable to NWL to support the incurrence
of such expenses. NWL agrees that up to $5,000 of this amount may
be drawn down by LSI for payment of its attorneys fees incurred in
connection with the negotiation of this Agreement.
5.
Disposition of Developed
Works .
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a.
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Contemporaneously herewith, LSI, Bob, and Gale,
agree to execute the assignment document attached as Exhibit A
assigning to NWL, and confirming the assignment in paragraph 10.1
of the Agreement, of all LSI’s right, title and interest in
all copyrightable or patentable works developed or prepared in
whole or in part by LSI as a result of the Agreement or for NWL
during the term of the Agreement, including but not limited to
software, methodologies, tools, libraries, routines, build files,
batch files, content, databases, SQL files, templates, schemas,
metadata, queries, processes, techniques, interfaces, ASP.NET,
Visual Basic, VBScript, Assembler, C#, DTS Packages, HTML, JScript
and/or Java files, graphics files, animation files, data files,
images, artwork photographs, design layouts, visual images and/or
video content, technology, scripting and programming, both in
object and source code form, Documentation, Specifications and
other works for and related to a life insurance and annuity
policies administration system for NWL and any component thereof,
all new and useful art, discoveries, improvements, technical
developments or inventions, know-how, designs, mask works,
trademarks, formulae, processes, models, techniques, trade secrets,
ideas, artwork, software, Application Programming Interfaces (APIs)
and other copyrightable and patentable works developed or prepared
as a result of the Agreement or for NWL before the Effective Date
(collectively, the “Developed Works”).
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b.
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LSI represents
and warrants that it has accurately and completely identified the
files, and locations of files, of the Developed Works required to
make, build and operate the current production version of the
Pre-Termination System as of the Effective Date, and those files
are identified on Exhibit B, with the files comprising the current
production system flagged.
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c.
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NWL agrees to
deliver to LSI one copy of the Pre-Termination System by copying
the files which comprise it as identified in Exhibit B onto the
medium of LSI’s choice within seven days of the Effective
Date of this Contract, contingent on full execution of the License
Agreement referenced below. Notwithstanding the foregoing, however,
NWL will not disclose, release, or deliver to LSI any information
regarding any confidential National Western Information, including
but not limited to National Western’s policyholders
(“Confidential NWL Information”). To the extent any
file or database contains Confidential NWL Information, NWL will
process the file or database to remove Confidential NWL Information
before delivery. For example, NWL will not turn over any NWL data
in the database. It will turn over the database structure
only.
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d.
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Contemporaneously herewith, NWL agrees to
execute and deliver to LSI the License Agreement attached as
Exhibit C, to convey to LSI, on the terms stated therein, a
limited, “as is,” non-exclusive, perpetual,
royalty-free, worldwide, license to develop, use and grant limited
sublicenses in the Pre-Termination System.
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e.
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The parties
agree and acknowledge that NWL has the right and power after the
Effective Date to modify, or have modified, or to create or have
created derivative works based on, the Pre-Termination System, and
that NWL owes LSI (or its privies) no obligation or duty to
maintain or to convey to LSI any such modifications or derivative
works developed or prepared by or on behalf of NWL after the
Effective Date.
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f.
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The parties
acknowledge and agree that LSI has certain rights and powers after
the Effective Date, pursuant to and as stated in the terms of the
License, to modify, or have modified, or to create or have created
derivative works based on, the Pre-Termination System, and that LSI
owes NWL (or its privies) no obligation or duty to maintain or to
convey to NWL any such modifications or derivative works prepared
or developed by or on behalf of LSI after the Effective
Date.
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6.
Non-Solicitation
. Paragraph 18.3 of the
Agreement (Non-Solicitation) is hereby amended to allow NWL to
solicit or employ current or former LSI employees after the
Effective Date. LSI, Bob and Gale agree not to interfere with NWL's
efforts to hire current or former LSI employees. Subpart (ii) of
paragraph 18.3 of the Agreement shall have no further force and
effect.
7.
Release . NWL, LSI, Bob, and Gale, mutually
release each other from all claims, known or unknown, excluding any
claims that have, or do, arise under the Representations and
Warranties and Indemnities provisions in the Agreement or under
this Termination Agreement.
8.
Transition . LSI, Bob and Gale agree to be
available by telephone (and to the extent reasonably necessary in
person) for a period of four (4) weeks after the Effective Date and
to cooperate with NWL to achieve a smooth transition by answering
all questions and providing any information known to them as
reasonably requested by NWL during normal business hours. If
requested to do so by NWL in writing within 14 days of the
Effective Date, and conditioned on NWL being unable to obtain the
requested information from LSI employees who transition to NWL
hereunder, LSI, Bob, and Gale further agree to provide the
following information to NWL within 5 business days of the
request: .
(i) all accounts
and passwords used by LSI employees to access LifeCycle
systems and databases and any other relative systems and databases,
including but not limited to user accounts, administrative
accounts, service accounts, shared accounts, generic accounts,
Source Safe administrator accounts, etc., but excluding userids and
passwords (such as network passwords) provided to LSI by
NWL;
(ii) a listing of the steps
required to monitor and perform the nightly processing procedures,
including but not limited to steps for identifying and correcting
commonly known cycle problems, as well as details on automatic jobs
and job schedules) in detail sufficient to allow an NWL employee to
perform the procedures without the assistance of LSI;
(iii) A listing, or annotated
file listing, that identifies the files comprising the source
code, object code, and any other files that are used for the
current production system of LifeCycle and their
location;
(iv) a listing of the steps
required to produce the live executable production version of
LifeCycle from source code, in detail sufficient to allow an NWL
employee to perform the procedure without the assistance of
LSI;
(v) a listing of the steps
involved in monitoring daily performance of the Lifecycle system
and processes, including identification of what data is examined,
the time of examination, and where the examined data resides,
in detail sufficient to allow an NWL employee to perform the
procedure without the assistance of LSI;
(vi) a listing of the steps
involved in the known patches or workaround activities currently
used or needed in connection with the LifeCycle system, in detail
sufficient to allow an NWL employee to perform the procedure
without the assistance of LSI.
NWL agrees to
forward emails addressed to Bob and Gale at their NWL email
addresses for a period of two weeks from the Effective Date of this
Termination Agreement.
9.
Representations and
Warranties . LSI warranties that every LSI
employee and contractor who authored any part of the Developed
Works either (i) was at all times an employee of LSI for purposes
of the “work-made-for-hire” provisions of the Copyright
Act, or (ii) has provided to LSI a written assignment of all
rights, title, and interest in and to the Developed
Works.
10.
Survival of
Confidentiality Provision . Parties stipulate that Section 12
of the Agreement (Confidentiality) is not abrogated by the terms of
this Termination Agreement. LSI agrees that all tangible materials
provided to it by NWL which contain any Confidential Information
(as defined in the Agreement) are the property of NWL and must be
returned to NWL within five (5) days of the Effective Date of this
Termination Agreement.
11.
Amendment . This Termination Agreement may
only be amended by a writing signed by all Parties.
12.
No
Assignment . Each Party represents and warrants
that it has not heretofore assigned, transferred or conveyed any
right, asset, claim, demand, liability, or cause of action which is
the subject of this Termination Agreement. LSI further stipulates
that this Termination Agreement will not be assignable by LSI to
another person or legal entity, without NWL’s prior written
consent. This Termination Agreement is binding upon and inures to
the benefit of the parties hereto and their respective heirs,
successors, assigns, and legal representatives.
13.
Entire
Agreement . Each Party hereto acknowledges
having read this Termination Agreement and fully understands its
provisions and that no other representation or promise, other than
that contained herein, has been made to induce said Party to enter
into this Termination Agreement. This Termination Agreement may be
executed in counterparts, each of which shall be deemed to be an
original and all of which, taken together, shall constitute a
single document.
14.
Governing Law and
Jurisdiction; Arbitration . Sections 18.5 and 18.6 of the
Agreement shall apply to this Termination Agreement.
National Western Life Insurance
Co
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Life
Systems Incorporated
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ASSIGNMENT
WHEREAS, NATIONAL WESTERN LIFE INSURANCE
COMPANY, (“ NWL ” or
“Assignee”), and LIFE SYSTEMS, INCORPORATED, a Texas
corporation, (“ LSI ”), BOB WILLINGHAM
(“WILLINGHAM”) and GALE HASSELMEIER
(“HASSELMEIER”) (collectively, “
Parties ”) entered into a Consulting and
Software Development Agreement (“ Agreement
”) dated February 28, 2002, for software development
services.
WHEREAS, during the course of performing
software development services under the Agreement LSI, WILLINGHAM,
and/or HASSELMEIER created, authored or developed in whole or in
part software, methodo
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