SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 1, 1998
COVER-ALL TECHNOLOGIES INC.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-13124 13-2698053
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(State or other of (Commission (IRS Employer
jurisdiction incorporation) File Number) Identification No.)
18-01 Pollitt Drive, Fair Lawn, New Jersey 07410
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(Address of principal executive offices)
Registrant's Telephone Number, including Area Code: (201) 794-4800
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N/A
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS
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Cover-All Technologies Inc., a Delaware corporation (the "Company"),
has recently entered into an employment agreement with each of Dalia Ophir
and Peter C. Lynch, effective as of January 1, 1998 and March 1, 1998,
respectively. The Company also entered into a services agreement with
Turnbury Associates ("Turnbury"), regarding the retention of Brian Magowan,
a managing partner of Turnbury, as the Company's Chief Executive Officer,
effective as of January 1, 1998. Each of the employment agreements and the
services agreement described above are described in further detail in the
Company's 1998 Proxy Statement, which descriptions are incorporated by
reference into Part III of the Company's 1997 Annual Report on Form 10-K
filed with the Commission on April 1, 1998.
ITEM 7. EXHIBITS
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(C) EXHIBITS
99.1 Employment Agreement, dated as of January 1, 1998, by and
between the Company and Dalia Ophir.
99.2 Employment Agreement, dated as of March 1, 1998, by and
between the Company and Peter C. Lynch.
99.3 Services Agreement, dated as of March 1, 1998, by and
between the Company and Turnbury Associates.
<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
COVER-ALL TECHNOLOGIES INC.
Date: May 13, 1998 By: /s/ Brian Magowan
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Brian Magowan
Chairman of the Board and Chief
Executive Officer
<PAGE>
EXHIBIT INDEX
99.1 Employment Agreement, dated as of January 1, 1998, by and
between the Company and Dalia Ophir.
99.2 Employment Agreement, dated as of March 1, 1998, by and between
the Company and Peter C. Lynch.
99.3 Services Agreement, dated as of March 1, 1998, by and between
the Company and Turnbury Associates.
EMPLOYMENT AGREEMENT
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AGREEMENT made as of the 1st day of January, 1998, by
and between COVER-ALL TECHNOLOGIES INC., a Delaware corporation
(hereinafter referred to as the "Company"), having an office at
18-01 Pollitt Drive, Fair Lawn, NJ 07410 and DALIA OPHIR residing
at 27 Country Club Road, Tenafly, New Jersey 07670 (hereinafter
referred to as the "Executive").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Executive has served as a valuable
executive employee of the Company, and the Company desires to
continue to employ the services of the Executive, and the
Executive desires to render such services all upon the terms and
conditions herein contained;
NOW, THEREFORE, in consideration of the premises, the
parties agree as follows:
1. Employment. The Company hereby employs the
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Executive as Chief Technology Officer, and the Executive hereby
accepts such employment, subject to the terms and conditions
hereinafter set forth.
2. Term. The term of the Executive's employment
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hereunder shall be for a period commencing January 1, 1998 and
terminating on December 31, 2000. This Agreement may be extended
thereafter for successive one (1) year terms upon the mutual
consent in writing of the parties hereto at least thirty (30)
days prior to the applicable anniversary of such date.
3. Duties. The Executive agrees that she will serve
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the Company on a full-time basis faithfully and to the best of
her ability as the Chief Technology Officer of the Company,
subject to the direction of the President and/or Chief Executive
Officer and the general supervision of the Board of Directors of
the Company. The Executive agrees that she will not, during the
term of this Agreement, engage in any other business activity
which interferes with the performance of her obligations under
this Agreement. The Executive further agrees to serve as a
director of the Company and/or of any parent, subsidiary or
affiliate of the Company if she is elected to such directorship.
4. Compensation.
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(a) (i) Salary. In consideration of the services
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to be rendered by the Executive, in the aforesaid position or in
any other position to which the Executive may be assigned,
including, without limitation, any services rendered by her as
director of the Company or of any parent, subsidiary or affiliate
of the Company, the Company agrees to pay the Executive, and she
agrees to accept fixed compensation at the rate of One Hundred
and Eighty Thousand Dollars ($180,000.00) per annum as base
salary ("Base Salary") commencing on the date hereof, together
with such increases as may be authorized from time to time by the
Board of Directors of the Company. The Base Salary shall also be
increased commencing on January 1 of each year of the term
hereof, by an amount equal to the annual percentage increase in
the Consumer Price Index for Urban Wage Earners and Clerical
Workers, all items (U.S. city average), published by the Bureau
of Labor Statistics of the United States, Department of Labor,
multiplied by the annual Base Salary effective immediately prior
to such increase.
(ii) Bonus. In addition to the payment of the Base
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Salary, as provided for hereunder, the Company shall pay the
Executive a bonus for the year ended December 31, 1998, such
bonus to be paid on the conditions hereinafter set forth:
a) $40,000 upon successful delivery of the
Accident Fund deliverables;
b) $20,000 upon successful delivery of the
Cornhill 1998 deliverables;
c) $10,000 upon the Company achieving 1998
earnings before income taxes ("EBIT") of at least $.04 per share.
The determination as to whether the Company achieves EBIT of $.04
per share shall be made in accordance with generally accepted
accounting principles consistently applied (except that any
income or loss attributable to the repurchase of the Care
Software rights by Care Corporation Limited ("Care") shall be
excluded for purposes of such calculation), shall be based upon
the audited financial statements to be filed by the Company in
its Form 10-K Annual Report with the Securities and Exchange
Commission, and such bonus, if any, shall be paid no later than
10 days from the date of such filing; and
d) to the extent the Company's 1998 revenue
exceeds $18.453 million and its 1998 EBIT exceeds $2,000,000, as
further described below, an additional bonus (the "Super Bonus")
paid pursuant to the terms of a plan (the "Super Bonus Plan") to
be prepared by the Company's chief executive officer and approved
by the Company's Board of Directors, as evidenced by a Board
resolution. The Super Bonus Plan shall entitle each of the
Company's senior management, as identified in the Super Bonus
Plan and including the Executive, who shall participate to the
extent of 20%, in a bonus pool equal to 20% of the Company's 1998
EBIT in excess of $2,000,000, provided the Company's 1998 revenue
exceeds $18.453 million (which, pursuant to the Super Bonus Plan,
$2,000,000 shall be calculated after the deduction of a $6,000
bonus per each employee of the Company who is not eligible for
the Super Bonus for fiscal year ended December 31, 1998). The
determination as to whether the Company achieves EBIT above
$2,000,000 and revenue above $18.453 million shall be made in
accordance with generally accepted accounting principles
consistently applied (except that any income or loss attributable
to the repurchase of the Care Software rights by Care shall be
excluded for purposes of such calculation) and shall be based
upon the audited financial statements to be filed by the Company
in its Form 10-K Annual Report with the Securities and Exchange
Commission and such Super Bonus, if any, shall be paid no later
than 10 days from the date of such filing.
e) The terms for the performance bonus for
each year of the term after December 31, 1998, including any
renewal term, shall be agreed to by January 15th of the
subsequent year by the parties.
(b) The Executive shall also be entitled to
vacations, sick leave and fringe benefits in accordance with
Company policies and plans from time to time in effect for
executive officers of the Company.
(c) The Executive shall be granted 150,000
incentive stock options to purchase shares of common stock, $.01
par value per share, of the Company at a purchase price of $4.00
per share, (the "Options"), pursuant to the Company's 1995
Employee Stock Option Plan, as amended, such options to vest as
follows:
(i) as to 75,000 Options vesting on January
1, 1998; and
(ii) as to 75,000 Options vesting on
September 1, 1998.
The 150,000 Options shall be granted pursuant to an
Incentive Stock Option Agreement to be entered into between the
Executive and the Company reflecting the terms as described in
this subsection.
(d) Except as hereinafter provided in Section 5
(a), the Company shall pay the Executive, for any period during
which she is unable fully to perform her duties because of
physical or mental disability or incapacity, an amount equal to
the fixed Base Salary due her for such period less the aggregate
amount of all income disability benefits which she may receive or
to which she may be entitled under or by reason of (i) any group
health and/or disability insurance plan; (ii) any applicable
state disability law; (iii) the Federal Social Security Act; (iv)
any applicable worker's compensation law or similar law; and (v)
any plan towards which the Company or any parent, subsidiary or
affiliate of the Company has contributed or for which it has made
payroll deductions, such as group accident, health and/or
disability policies.
5. Termination on Disability or Death.
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(a) If the Executive, due to physical or mental
disability or incapacity, is unable fully to perform her duties
hereunder for three (3) consecutive months, then the Company may
terminate this Agreement and the Executive's employment hereunder
by written notice to the Executive. This provision shall not
preclude the Executive from claiming or obtaining such disability
benefits to which she may be entitled for disability incurred
during the period of her employment by the Company.
(b) If the Executive shall die during the term of
this Agreement, this Agreement and the Executive's employment
hereunder shall terminate immediately upon the Executive's death,
except that the Company shall be required to continue paying to
the Executive's husband (or estate, if there shall be no
surviving husband) the compensation payable pursuant to Section 4
consisting of a pro rata portion of the Base Salary payable in
accordance with the Company's payroll policies for a period of
three (3) months following such death.
(c) Upon the Executive's disability or death the
Company shall pay the Executive or, in the event of death, her
husband (or estate if there is no surviving husband), (x) the
bonus payments set forth in subsections a) and b) of Section
4(a)(ii) hereof, to the extent such bonuses have been earned by
the Executive and not yet paid, (y) the pro rata portion of the
bonus payment set forth in subsections c) and d) of Section
4(a)(ii) hereof, and (z) the pro rata portion of any new bonus
plan adopted pursuant to subsection e) of Section 4(a)(ii)
hereof, based upon the number of days the Executive worked during
the Company's fiscal year for which such bonus is computed, to
the extent the numerical requirements are actually met for the
fiscal year in question, which shall be payable at the time of
the determination of such bonus.
6. Termination for Cause. Notwithstanding anything
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to the contrary in this Agreement, the Company, upon notice to
the Executive, may terminate this Agreement and the employment of
the Executive hereunder for cause, which, for purposes of this
Agreement, shall mean (i) the continued and repeated failure or
refusal by the Executive to perform specific directives, relating
to the performance by the Executive of her duties as Chief
Technology Officer of the Company, of the Chief Executive
Officer, President or the Board of Directors of the Company, (ii)
embezzlement or any offense involving misuse or misappropriation
of money or other property of the Company, (iii) indictment for a
crime, (iv) any act of dishonesty, disloyalty or other conduct
that is materially injurious to the Company, or (v) material
breach by the Executive of any of the terms of this Agreement.
Any controversy, claim or dispute arising out of or relating to
this Section 6 of the interpretation thereof shall be determined
by arbitration to be conducted in Bergen County, New Jersey by
the American Arbitration Association in accordance with the then
prevailing rules of such Association, and judgments upon the
award of the arbitrators may be entered in any court having
jurisdiction thereof.
7. Severance Compensation. In the event the
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Executive's employment hereunder is not renewed by reason of the
expiration of the employment term without renewal thereof by the
Company, and other than for cause, death or disability, the
Company shall pay to the Executive as severance compensation an
amount equal to six (6) months' Base Salary. Severance
compensation shall be paid biweekly in accordance with the
Company's usual practices. In the event that the Company
terminates the employment of the Executive hereunder without
cause the Company shall be obligated to honor the balance of this
Agreement in accordance with applicable law. In addition, in the
event the Executive's employment hereunder is terminated by the
Company for any reason, including the expiration of the
employment term without renewal thereof by the Company, and other
than for cause, death or disability, the Company shall pay to the
Executive (x) the bonus payments set forth in subsections a) and
b) of Section 4(a)(ii) hereof, to the extent such bonuses have
been earned by the Executive and not yet paid, (y) the pro rata
portion of the bonus payment set forth in subsections c) and d)
of Section 4(a)(ii) hereof, and (z) the pro rata portion of any
new bonus plan adopted pursuant to subsection e) of Section
4(a)(ii) hereof, based upon the number of days the Executive
worked during the Company's fiscal year for which such bonus is
computed, to the extent the numerical requirements are actually
met for the fiscal year in question, which shall be payable at
the time of the determination of such bonus.
In the event the Executive receives severance
compensation under this Section 7, the Executive shall not be
entitled to receive any other compensation or benefits under this
Agreement after the termination of the Executive's employment
hereunder and, as a condition to receiving such severance
compensation, the Executive hereby agrees that she shall have no
other claim against the Company by reason of this Agreement.
8. Disclosure and Assignment of Discoveries.
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(a) The Executive shall (without any additional
compensation) promptly disclose in writing to the Board of
Directors of the Company all ideas, processes, devices, and
business concepts (hereinafter referred to collectively as
"discoveries"), whether or not patentable or copyrightable, which
she, while employed by the Company, conceives, develops, acquires
or reduces to practice, whether alone or with others and whether
during or after usual working hours, and which are related to the
Company's business or interests, or arise out of or in connection
with the duties performed by her hereunder; and the Executive
hereby transfers and assigns to the Company all right, title and
interest in and to such discoveries. Upon the request of the
Company, the Executive shall (without any additional
compensation), from time to time during or after the expiration
or termination of her employment, execute such further
instruments and do all such other acts and things as may be
deemed necessary or desirable by the Company to protect and/or
enforce its rights in respect of such discoveries.
(b) For purposes of this Section 8 and the
following Section 9, the term "Company" shall mean and include
any and all subsidiaries, parent, and affiliated corporations of
the company in existence from time to time.
9. Non-Disclosure of Confidential Information and
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Non-Competition.
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(a) The Executive acknowledges that she has been
informed that it is the policy of the Company to maintain as
secret and confidential all information (i) relating to the
products, processes, designs and/or systems used by the Company
and (ii) relating to the customers and employees of the Company
(all such information hereafter referred to as "confidential
information"), and the Executive further acknowledges that such
confidential information is of great value to the Company. The
parties recognize that the services to be performed by the
Executive are special and unique, and that by reason of her
employment by the Company, she has and will acquire confidential
information as aforesaid. The parties confirm that it is
reasonably necessary to protect the Company's goodwill, and
accordingly the Executive does agree that she will not directly
or indirectly (except where authorized by the Board of Directors
of the Company for the benefit of the Company):
(1) at any time during her employment by the
Company or after she ceases to be employed by the
Company, divulge to any persons, firms or corporations,
other than the Company (hereinafter referred to
collectively as "third parties"), or use or allow or
cause or authorize any third parties to use, any such
confidential information, or any other information
regarded as confidential and valuable by the Company
which she knows or should know is regarded as
confidential and valuable by the Company (whether or
not any of the foregoing information is actually novel
or unique or is actually known to others); and
(2) at any time during her employment by the
Company and for a period of one year after she ceases
to be employed by the Company, solicit or cause or
authorize directly or indirectly to be solicited, for
or on behalf of herself or third parties any business
from persons, firms, corporations or other entities who
were at any time within one year prior to the cessation
of her employment hereunder, customers of the Company
or potential customers whose business had been
solicited by the Company during the term of Executive's
employment; and
(3) at any time during her employment by the
Company and for a period of one year after she ceases
to be employed by the Company, accept or cause or
authorize directly or indirectly to be accepted, for or
on behalf of herself or third parties, any business
from any such customers of the Company; and
(4) at any time during her employment by the
Company and for a period of one year after she ceases
to be employed by the Company, solicit or cause or
authorize directly or indirectly to be solicited for
employment, for or on behalf of herself or third
parties, any persons who were at any time within one
year prior to the cessation of her employment
hereunder, employees of the Company, except that in the
event the Company does not renew this Agreement at the
expiration of any term, then the period referred to in
this subsection (4) shall be reduced to six (6) months;
and
(5) at any time during her employment by the
Company and for a period of one year after she ceases
to be employed by the Company, employ or cause or
authorize directly or indirectly to be employed, for or
on behalf of herself or third parties, any such
employees of the Company, except that in the event the
Company does not renew this Agreement at the expiration
of any term, then the period referred to in this
subsection (5) shall be reduced to six (6) months.
(b) In the event the Company does not renew this
Agreement at the expiration of any term or the Company terminates
this Agreement for other than for cause, the Executive shall not
be constrained from working for, advising, consulting or being an
officer, director, agent or employee of or otherwise associate
with in any way any person, firm, corporation or other entity in
the information technology field and/or the insurance software
and services industry. Notwithstanding the immediately preceding
sentence, in the event the Company does not renew this Agreement
at the expiration of any term, the Executive shall remain subject
to the provisions of subsections (a)(1), (a)(4), and (a)(5) of
this Section 9.
(c) The Executive agrees that, upon the
expiration of her employment by the Company for any reason, she
shall forthwith deliver up to the Company any and all records,
drawings, notebooks, keys and other documents and material, and
copies thereof in her possession or under her control which is
the property of the Company or which relate to any confidential
information or any discoveries of the Company.
(d) The Executive agrees that any breach or
threatened breach by her of any provision of this Section 9 shall
entitle the Company, in addition to any other legal remedies
available to it, to enjoin such breach or threatened breach
through any court of competent jurisdiction. The parties
understand and intend that each restriction agreed to by the
Executive hereinabove shall be construed as separable and
divisible from every other restriction, and that the
unenforceability, in whole or in part, of any restriction will
not affect the enforceability of the remaining restrictions, and
that one or more or all of such restrictions may be enforced in
whole or in part as the circumstances warrant.
10. Entire Agreement. This Agreement contains the
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entire understanding of the parties with respect to the subject
matter hereof, supersedes any prior agreement between the
parties, and may not be changed or terminated orally. No change,
termination or attempted waiver of any of the provisions hereof
shall be binding unless in writing and signed by the party to be
bound; provided, however, that the Executive's compensation may
be increased at any time by the Company without in any way
affecting any of the other terms and conditions of this
Agreement, which in all other respects shall remain in full force
and effect.
11. Negotiated Agreement. This Agreement has been
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negotiated and shall not be construed against the party
responsible for drafting all or parts of this Agreement.
12. Notices. All notices to be given pursuant to this
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Agreement shall be in writing hand-delivered to the other party,
or mailed by certified mail, return receipt requested, postage
prepaid, or by commercial overnight courier, addressed to the
President or Chief Executive Officer of the Company at the
company's principal place of business or addressed to the
Executive at the last known residence of the Executive. Notice
shall be deemed given upon receipt or on the first business day
after mailing, whichever comes first. The address for notice may
be changed by notice given in the same manner.
13. Successors and Assigns. This Agreement shall be
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binding upon and shall inure to the benefit of the respective
heirs, legal representatives, successors and assigns of the
parties hereto.
14. Partial Invalidity. If any provision contained
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herein or part thereof shall be deemed invalid, it shall be
deemed severed or modified to conform to law, and the remaining
provisions shall continue in full force and effect.
15. Governing Law. All matters concerning the
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validity and interpretation of and performance under this
Agreement shall be governed by the laws of the State of New York
whose courts shall have exclusive jurisdiction over the parties
to which they hereby consent.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
COVER-ALL TECHNOLOGIES INC.
By: /s/ Brian Magowan
------------------------------
Brian Magowan
Chief Executive Officer
/s/ Dalia Ophir
-----------------------------------
Dalia Ophir
EMPLOYMENT AGREEMENT
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AGREEMENT made as of the 1st day of March, 1998, by and
between COVER-ALL TECHNOLOGIES INC., a Delaware corporation (the
"Company") (formerly Warner Insurance Services, Inc., a Delaware
corporation), having its principal office at 18-01 Pollitt Drive,
Fair Lawn, New Jersey 07410 and PETER C. LYNCH, currently
residing at 10 Trimingham Court, Mendham, New Jersey 07945 (the
"Employee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Employee has been serving as President and
Chief Operating Officer of the Company pursuant to that certain
Employment Agreement by and among the Company, Cover-All Systems,
Inc., a Delaware corporation and the Company's subsidiary, and
the Employee, dated the 24th day of January, 1996, which expires
on February 28, 1998, and the Company and the Employee wish to
continue the Employee's employment pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the
representations, warranties and mutual covenants set forth
herein, the parties agree as follows:
1. Employment. The Company, effective March 1, 1998,
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hereby agrees to continue to retain the Employee as President of
the Company and the Employee hereby accepts such employment, all
upon and subject to the terms and conditions hereinafter set
forth.
2. Term. The term of employment under this Agreement
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(the "Employment Agreement") shall commence as of March 1, 1998
and shall continue in full force and effect until February 28,
1999 (the "Employment Term"), subject to earlier termination for
disability or for cause as provided in Section 5 hereof. This
Agreement may be renewed by the Company and Employee for a
one-year term by both the Company and the Employee providing
written notice of renewal to each other (the "Renewal Option"),
provided such written notices are given on or before December 1,
1998. Should both parties agree to renew this Agreement, the
terms for the 1999 performance bonus shall be agreed to by both
parties by January 15, 1999.
3. Duties.
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(a) The Employee will render his services to the
Company as President and shall perform such duties and services
of those offices or positions or of such other office or position
as may be assigned to him from time to time by the Board of
Directors or the Chief Executive Officer of the Company. In
addition, the Employee will hold, without additional compensation
therefor, such other offices and directorships in the Company or
any parent or subsidiary of the Company to which, from time to
time, he may be appointed or elected.
(b) Except as otherwise provided herein and except for
illness, permitted vacation periods and permitted leaves of
absence consistent with the past practice of the Company or as
otherwise approved by the Board of Directors of the Company, the
Employee agrees that during the term of his employment hereunder,
he shall devote all of his full working time and attention, and
give his best effort, skill and abilities, exclusively to the
business and interests of the Company.
4. Compensation; Benefits
----------------------
(a) (i) Salary. In consideration of the services to
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be rendered by the Employee hereunder, including, without
limitation, any services rendered by him as an officer or
director of the Company or any parent, subsidiary or affiliate of
the Company, the Company agrees to pay to the Employee, and the
Employee agrees to accept as compensation, an annual salary of
$190,000.00 (the "Base Salary"), payable in accordance with the
Company's normal payroll policies, retroactive to January 1,
1998. The Company, by action of the Board of Directors or the
Compensation Committee of the Board of Directors of the Company,
may, in its sole discretion, increase the Base Salary at any
time. The Employee's Base Salary shall be subject to all
applicable withholding and other taxes.
(ii) Bonus. In addition to the payment of the
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Base Salary, as provided for hereunder, the Company shall pay the
Employee a bonus based upon the financial results of the Company,
as reported on the Company's financial statements for the year
ended December 31, 1998 (the "1998 Fiscal Year"), such bonus to
be paid on the conditions hereinafter set forth:
A. $50,000 (the "Revenue Bonus") upon the
Company achieving aggregate revenue for the 1998 Fiscal Year
equal to or greater than its budgeted aggregate revenue for
License Fees, Maintenance Fees and Professional Services
totalling $18.453 million, as follows:
(x) $25,000 of such bonus shall be payable
if the Company has reported total revenue for the 1998 Fiscal
Year of at least $16 million; and
(y) the balance of the Revenue Bonus (up to
$25,000) shall be payable on a pro rata basis to the extent that
total revenue of the Company for the 1998 Fiscal Year exceeds $16
million and is less than $18.453 million (i.e., the amount of the
balance of the Revenue Bonus payable would be determined by
multiplying $25,000 by a ratio, the numerator of which is the
total revenue for the 1998 Fiscal Year less $16 million, and the
denominator of which is $2.453 million.)
B. $10,000 (the "EBIT Bonus") upon the
Company achieving earnings before income taxes ("EBIT") for the
1998 Fiscal Year of at least $.04 per share. The determination
as to whether the Company achieves EBIT of $.04 per share shall
be made in accordance with generally accepted accounting
principles consistently applied (except that any income or loss
attributable to the repurchase of the Care Software rights by
Care Corporation Limited ("Care") shall be excluded for purposes
of such calculation) and shall be based upon the audited
financial statements to be filed by the Company in its Form 10-K
Annual Report with the Securities and Exchange Commission and
paid no later than 10 days from the date of such filing.
C. to the extent the Company's 1998 revenue
exceeds $18.453 million and its 1998 EBIT exceeds $2,000,000, as
further described below, an additional bonus (the "Super Bonus")
paid pursuant to the the terms of a plan (the "Super Bonus Plan")
to be prepared by the Company's chief executive officer and
approved by the Company's Board of Directors, as evidenced by a
Board resolution. The Super Bonus Plan shall entitle each of the
Company's senior management, as identified in the Super Bonus
Plan and including the Employee, who shall participate to the
extent of 20%, in a bonus pool equal to 20% of the Company's 1998
EBIT in excess of $2,000,000, provided the Company's 1998 revenue
exceeds $18.453 million (which, pursuant to the Super Bonus Plan,
$2,000,000 shall be calculated after the deduction of a $6,000
bonus per each employee of the Company who is not eligible for
the Super Bonus for fiscal year ended December 31, 1998). The
determination as to whether the Company achieves EBIT above
$2,000,000 and revenue above $18.453 million shall be made in
accordance with generally accepted accounting principles
consistently applied (except that any income or loss attributable
to the repurchase of the Care Software rights by Care shall be
excluded for purposes of such calculation) and shall be based
upon the audited financial statements to be filed by the Company
in its Form 10-K Annual Report with the Securities and Exchange
Commission and such Super Bonus, if any, shall be paid no later
than 10 days from the date of such filing.
(b) Benefits. During the term of his employment
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hereunder, the Employee shall be entitled to the following
employment benefits:
(i) vacations and sick leaves in accordance with
the Company's policies from time to time in effect for
officers and executive employees of the Company; and
(ii) participation, subject to qualification and
participation requirements, in medical, life or other
insurance or hospitalization plans and any pension, profit
sharing or other employee benefit plans, presently in effect
or hereafter instituted by the Company and applicable to its
officers and executive employees.
(c) Reimbursement of Expenses. The Employee shall be
-------------------------
reimbursed for reasonable and necessary expenses incurred by the
Employee in performing his employment hereunder, provided such
expenses are adequately documented in accordance with the
Company's policies.
(d) Indemnification. To the extent and under the
---------------
conditions provided in the Company's bylaws, the Employee shall
be indemnified by the Company for judgments, costs, and expenses
for acts performed as an officer and employee of the Company
(subject to Delaware law). As of the date of this Agreement, the
Company has insurance coverage for directors and officers
liability, and if such coverage should expire during the term of
the Employee's employment, the Company shall, to the extent it is
reasonably economically feasible, use its best efforts to renew
such coverage.
5. Termination in Case of Disability, Death or for
-----------------------------------------------
Cause.
-----
(a) If the Employee, due to physical or mental injury,
illness, disability or incapacity, shall fail to render the
services provided for in this Agreement for a consecutive period
of three (3) months, or an aggregate of three (3) months in any
six (6) month period, the Company may, at its option, terminate
the Employee's employment hereunder upon fourteen (14) days'
written notice to the Employee.
(b) If the Employee shall die during the term of this
Agreement, this Agreement and the Employee's employment hereunder
shall terminate immediately upon the Employee's death, except
that the Company shall be required to continue paying to the
Employee's spouse (or estate, if there shall be no surviving
spouse) the compensation payable pursuant to Section 4 consisting
of (x) a pro rata portion of the Base Salary payable in
accordance with the Company's payroll policies for a period of
three (3) months following such death and (y) a pro rata portion
(based upon the number of days worked in the year) of the bonus
payments set forth in subsections A, B and C of Section 4(a)(ii),
to the extent the numerical requirements are actually met for the
fiscal year in question, which shall be payable at the time of
the determination of such bonus.
(c) Notwithstanding anything to the contrary in this
Agreement, the Company, upon notice to the Employee, may
terminate this Agreement and the employment of the Employee
hereunder for Cause, which, for purposes of this Agreement, shall
be defined to mean (i) the continued and repeated failure or
refusal by the Employee to perform specific directives of the
Board of Directors or the Chief Executive Officer of the Company,
(ii) embezzlement or any offense involving misuse or
misappropriation of money or other property of the Company, (iii)
conviction for a felony, (iv) any act of dishonesty, disloyalty
or other conduct that is materially injurious to the Company, or
(v) material breach by the Employee of any of the terms of this
Agreement other than those contained in this Section 5.
6. Severance Compensation.
----------------------
(a) In the event the Employee's employment hereunder
is terminated by the Company during the Employment Term for any
reason other than for Cause, death or disability, the Company
shall pay to the Employee as severance compensation an amount
equal to the remaining Base Salary that the Employee would have
been entitled if the Employee's employment had not been
terminated before the end of the Employment Term plus six (6)
months' Base Salary. In addition, in the event the Employee's
employment hereunder is terminated by the Company during the
Employment Term for any reason other than for Cause, death or
disability, the Company shall pay to the Employee as additional
severance compensation the pro rata portion (based upon the
number of days worked in the year) of the bonus payments set
forth in subsections A, B and C of Section 4(a)(ii), to the
extent the numerical requirements are actually met for the fiscal
year in question, which shall be payable at the time of the
determination of such bonus.
(b) In the event the Employee's employment hereunder
is terminated by the Company after the Employment Term for any
reason, including the expiration of the Employment Term without
renewal thereof by the Company, and other than for Cause, death
or disability, the Company shall pay to the Employee as severance
compensation (x) an amount equal to six (6) months' Base Salary
(based upon the Employee's 1998 Base Salary) and (y) the pro rata
portion (based upon the number of days worked in the year) of the
bonus payments set forth in subsections A and B of Section
4(a)(ii), to the extent the numerical requirements are actually
met for the fiscal year in question, which shall be payable at
the time of the determination of such bonus.
(c) Severance compensation shall be paid biweekly in
accordance with the Company's usual practices. Employee shall
also be paid biweekly for unused vacation time.
(d) In the event the Employee receives severance
compensation under this Section 6, the Employee shall not be
entitled to receive any other compensation or benefits under this
Agreement after the termination of the Employee's employment
hereunder and, as a condition to receiving such severance
compensation, the Employee hereby agrees that he shall have no
other claim against the Company by reason of this Agreement.
7. Disclosure and Assignment of Discoveries.
----------------------------------------
(a) The Employee shall (without any additional
compensation) promptly disclose in writing to the Board of
Directors of the Company all ideas, processes, devices and
business concepts (hereinafter referred to collectively as
"Discoveries"), whether or not patentable or copyrightable, which
he, while employed by the Company, conceives, develops, acquires
or reduces to practice, whether alone or with others and whether
during or after usual working hours, and which are related to the
Company's business or interests, or arise out of or in connection
with the duties performed by him hereunder; and the Employee
hereby transfers and assigns to the Company all right, title and
interest in and to such Discoveries. Upon the request of the
Company, the Employee shall (without any additional
compensation), from time to time during or after the expiration
or termination of his employment, execute such further
instruments and do all such other acts and things as may be
deemed necessary or desirable by the Company to protect and/or
enforce its rights in respect of such discoveries.
(b) For purposes of this Section 7 and the following
Section 8, the term "Company" shall mean and include any and all
subsidiaries, parents and affiliated corporations of the Company
in existence from time to time.
8. Non-Disclosure of Confidential Information and
----------------------------------------------
Non-Competition.
---------------
(a) The Employee represents that he has been informed
that it is the policy of the Company to maintain as secret and
confidential all information relating to (i) the products,
processes and/or business concepts used by the Company and (ii)
the customers and employees of the Company ("Confidential
Information"), and the Employee further acknowledges that such
Confidential Information is of great value to the Company and is
the property of the Company. The parties recognize that the
services to be performed by the Employee are special and unique,
and that by reason of his employment by the Company, he will
acquire Confidential Information as aforesaid. The parties
confirm that to protect the Company's goodwill, it is reasonably
necessary that the Employee agree, and accordingly the Employee
does hereby agree, that he will not directly or indirectly
(except where authorized by the Board of Directors of the Company
for the benefit of the Company):
A. at any time during his employment hereunder or
after he ceases to be employed by the Company, divulge to
any persons, firms or corporations other than the Company
(hereinafter referred to collectively as "Third Parties"),
or use, or cause to authorize any Third Parties to use, any
such Confidential Information, or any other information
regarded as confidential and valuable by the Company which
he knows or should know is regarded as confidential and
valuable by the Company (whether or not any of the foregoing
information is actually novel or unique or is actually known
to others); or
B. at any time during his employment hereunder and
for a period of one (1) year after he ceases to be employed
by the Company (the "Restricted Period"), solicit or cause
or authorize, directly or indirectly, to be solicited for
employment, for or on behalf of himself or Third Parties,
any persons who were at any time within one year prior to
the cessation of his employment hereunder, employees of the
Company; or
C. at any time during his employment hereunder and
during the Restricted Period, employ or cause or authorize,
directly or indirectly, to be employed, for or on behalf of
himself or Third Parties, any such employees of the Company;
or
D. at any time during his employment hereunder and
during the Restricted Period, unless the Employee's
employment was terminated by the Company for any reason
other than for Cause or disability or unless either party
chooses not to exercise the Renewal Option or unless agreed
to by the Company in writing, the Employee will not accept
employment with or participate, directly or indirectly, as
owner, stockholder, director, officer, manager, consultant
or agent or otherwise use his special, unique or
extraordinary skills or knowledge with respect to the
business of the Company or of any affiliate of the Company
in or with any business, firm, corporation, partnership,
association, venture or other entity or person which is
engaged in the business of designing, developing or
providing software services to the property and casualty
insurance industry, except that this paragraph D shall not
be construed to prohibit the Employee from owning up to 5%
of the securities of a corporation which are publicly traded
on a national securities exchange or in the over-the-counter
market or from being employed by an insurance or other
company which may design and market software provided the
designing and marketing of software is not a principal part
of the business of such other company or concern; or
E. at any time during his employment hereunder and
during the Restricted Period, solicit or cause or authorize,
directly or indirectly, to be solicited, for or on behalf of
himself or Third Parties, any business with respect to
designing, developing or providing software services to the
property and casualty insurance industry from Third Parties
who were, at any time within one (1) year prior to the
cessation of his employment hereunder, customers of the
Company for such business; or
F. at any time during his employment hereunder and
during the Restricted Period, accept or cause or authorize,
directly or indirectly, to be accepted, for or on behalf of
himself or Third Parties, any such business from any
customers of the Company.
(b) The Employee agrees that he will not, at any time,
remove from the Company's premises any drawings, notebooks, data
and other documents and materials relating to the business and
procedures heretofore or hereafter acquired, developed and/or
used by the Company without prior written consent of the Board of
Directors of the Company, except as reasonably necessary to the
discharge of his duties hereunder.
(c) The Employee agrees that, upon the expiration of
his employment by the Company for any reason, he shall forthwith
deliver up to the Company any and all order-books, customer
lists, logs, drawings, notebooks and other documents and
materials, and all copies thereof, in his possession or under his
control relating to any Confidential Information or any
discoveries or which is otherwise the property of the Company.
(d) The Employee agrees that any breach or threatened
breach or alleged breach or alleged threatened breach by him of
any provision of this Section 8 shall entitle the Company, in
addition to any other legal remedies available to it, to apply to
any court of competent jurisdiction to enjoin such breach or
threatened breach or alleged breach or alleged threatened breach.
The parties understand and intend that each restriction agreed to
by the Employee hereinabove shall be construed as separable and
divisible from every other restriction, and that the
unenforceability, in whole or in part, of any other restriction,
will not effect the enforceability of the remaining restrictions
and that one or more or all of such restrictions may be enforced
in whole or in part as the circumstances warrant. No waiver of
any one breach of the restrictions contained in this Section 8
shall be deemed a waiver of any future breach.
(e) The Employee hereby acknowledges that he is fully
cognizant of the restrictions put upon him by this Section 8, and
that the provisions of this Section 8 shall survive the
termination of this Employment Agreement and his employment with
the Company.
9. Life Insurance. The Employee agrees that the
--------------
Company may apply for and purchase one or more life insurance
policies on the life of the Employee in such amount or amounts as
the Company deems appropriate. The Company shall be the sole
beneficiary of such insurance policy or policies and the Employee
hereby acknowledges that the Company has an insurable interest in
his life. The Employee agrees to cooperate with the Company in
obtaining any insurance on the life or on the disability of the
Employee which the Company may desire to obtain for its own
benefit and shall undergo such physical and other examinations,
and shall execute any consents or applications, which the Company
may request in connection with the issuance of one or more of
such insurance policies.
10. Notices.
-------
(a) All notices, requests, demands or other
communications hereunder shall be deemed to have been given if
delivered in writing personally or by certified mail to each
party at the address set forth below, or at such other address as
each party may designate in writing to the other:
If to the Company:
Cover-All Technologies Inc.
18-01 Pollitt Drive
Fair Lawn, New Jersey 07410
Attention: Chief Executive Officer
with a copy to:
Reid & Priest
40 West 57th Street
New York, New York 10019
Attention: Leonard Gubar, Esq.
If to the Employee:
Peter C. Lynch
10 Trimingham Court
Mendham, New Jersey 07945
11. Entire Agreement. This Agreement and the Exhibits
----------------
annexed hereto contain the entire understanding of the parties
with respect to the subject matter hereof, supersedes any prior
agreement between the parties, and may not be changed or
terminated orally. No change, termination or attempted waiver of
any of the provisions hereof or thereof shall be binding unless
in writing and signed by the party against whom the same is
sought to be enforced. No provision hereof shall be construed
against a party because that provision or any other provision was
drafted by or at the direction of such party.
12. Successors and Assigns. This Agreement shall be
----------------------
binding upon and shall inure to the benefit of the respective
heirs, legal representatives, successors and assigns of the
parties hereto.
13. Severability. In the event that any one or more
------------
of the provisions of this Agreement shall be declared to be
illegal or unenforceable under any law, rule or regulation of any
government having jurisdiction over the parties hereto, such
illegality or unenforceability shall not affect the validity and
enforceability of the other provisions of this Agreement.
14. Counterparts. This Agreement may be executed in
------------
one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
15. Governing Law. All matters concerning the
-------------
validity and interpretation of and performance under this
Agreement shall be governed by the laws of the state of New York,
whose courts or the federal courts located in the Southern
District of New York shall have exclusive jurisdiction over the
parties to which they consent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
COVER-ALL TECHNOLOGIES INC.
By: /s/ Brian Magowan
--------------------------------
Name: Brian Magowan
Title: Chief Executive Officer
/s/ Peter C. Lynch
-----------------------------------
PETER C. LYNCH
SERVICES AGREEMENT
------------------
AGREEMENT made as of the 1st day of March, 1998, by and
between COVER-ALL TECHNOLOGIES INC., a Delaware corporation (the
"Company") (formerly Warner Insurance Services, Inc., a Delaware
corporation), having its principal office at 18-01 Pollitt Drive,
Fair Lawn, New Jersey 07410 and TURNBURY ASSOCIATES, Box 427,
1272 Turnbury Lane, Gywnedd, Pennsylvania 19436 (the
"Consultant").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Consultant has been furnishing the
services of Brian Magowan ("Magowan") to the Company and Magowan
has been serving as Chief Executive Officer of the Company, and
the Company and the Consultant wish to continue this arrangement
pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the
representations, warranties and mutual covenants set forth
herein, the parties agree as follows:
1. Services. The Company, effective as of January 1,
--------
1998, hereby agrees to continue to retain the Consultant to
provide the services of Magowan as Chief Executive Officer of the
Company and the Consultant hereby accepts such retention, all
upon and subject to the terms and conditions hereinafter set
forth.
2. Term. The term of retention under this Agreement
----
(the "Services Agreement") shall commence as of January 1, 1998
and shall continue in full force and effect until December 31,
1998 (the "Retention Term"), subject to earlier termination as
described in Section 7 herein.
3. Duties.
------
The Consultant will provide Magowan to perform the
duties as Chief Executive Officer of the Company and such other
duties and services of those offices or positions or of such
other office or position as may be assigned to him from time to
time by the Board of Directors of the Company. In addition, the
Consultant will furnish to the Company the services of Magowan to
hold, without additional compensation therefor, the position of
Chairman of the Board of Directors of the Company and such other
offices and directorships in the Company or any parent or
subsidiary of the Company to which, from time to time, he may be
appointed or elected.
4. Fees
----
(a) (i) Fees. In consideration of the services to be
----
furnished by the Consultant hereunder, including, without
limitation, any services rendered by Magowan as an officer or
director of the Company or any parent, subsidiary or affiliate of
the Company, the Company agrees to pay to the Consultant, and the
Consultant agrees to accept as a retention fee, an annual fee of
$150,000.00 (the "Fee"), payable in equal monthly installments,
retroactive to January 1, 1998. The Company, by action of the
Board of Directors may, in its sole discretion, increase the Fee
at any time.
(ii) Bonus. In addition to the payment of the
-----
Fee, as provided for hereunder, the Company shall pay the
Consultant a bonus based upon the financial results of the
Company, such bonus to be paid on the conditions hereinafter set
forth:
A. $50,000 upon the Company achieving 1998
earnings before income taxes ("EBIT") of at least $.04 per share
so long as the Company has reported a positive net income for
each three-month period ending on March 31, June 30, and
September 30, 1998. The determination as to whether the Company
achieves EBIT of $.04 per share shall be made in accordance with
generally accepted accounting principles consistently applied
(except that any income or loss attributable to the repurchase of
the Care Software rights shall be excluded for purposes of such
calculation) and shall be based upon the audited financial
statements to be filed by the Company in its Form 10-K Annual
Report with the Securities and Exchange Commission and such
bonus, if any, shall be paid no later than 10 days from the date
of such filing; and
B. an additional bonus (the "Super Bonus")
paid pursuant to the terms of a plan to be prepared by Magowan
and agreed to by the Board of Directors of the Company and
submitted to the Board of Directors of the Company for
consideration and agreement, as evidenced by a Board resolution
(the "Super Bonus Plan"). The Super Bonus Plan shall be
determined by Magowan and the participants in the Super Bonus
Plan shall be limited to the Chief Executive Officer (Magowan),
the President (Peter Lynch) and the Chief Technology Officer
(Dalia Ophir) and the Super Bonus shall be distributed 60% to the
Chief Executive Officer (Magowan), 20% to the President (Lynch)
and 20% to the Chief Technology Officer (Ophir). The bonus pool
to be distributed under the Super Bonus Plan shall be equal to
20% of the Company's 1998 EBIT in excess of $2,000,000, provided
the Company's 1998 revenue exceeds $18.453 million (which,
pursuant to the Super Bonus Plan, $2,000,000 shall be calculated
after the deduction of a $6,000 bonus per each employee of the
Company who is not eligible for the Super Bonus for fiscal year
ended December 31, 1998). The determination as to whether the
Company achieves EBIT above $2,000,000 and revenue above $18.453
million shall be made in accordance with generally accepted
accounting principles consistently applied (except that any
income or loss attributable to the repurchase of the Care
Software rights by Care shall be excluded for purposes of such
calculation) and shall be based upon the audited financial
statements to be filed by the Company in its Form 10-K Annual
Report with the Securities and Exchange Commission and such Super
Bonus, if any, shall be paid no later than 10 days from the date
of such filing.
(b) Reimbursement of Expenses. The Consultant shall
-------------------------
be reimbursed for all reasonable and necessary expenses incurred
by the Consultant and/or Magowan in performing services
hereunder, provided such expenses are adequately documented in
accordance with the Company's policies.
(c) Indemnification. To the extent and under the
---------------
conditions provided in the Company's bylaws, the Consultant and
Magowan shall be indemnified by the Company for judgments, costs,
and expenses for acts performed hereunder and as an officer and
employee of the Company (subject to Delaware law).
5. Termination for Cause.
---------------------
(a) Notwithstanding anything to the contrary in this
Services Agreement, the Company, upon written notice to the
Consultant, may terminate this Services Agreement for Cause,
which, for purposes of this Services Agreement, shall be defined
to mean (i) the continued and repeated failure or refusal by the
Consultant or its employees to perform specific written
directives of the Board of Directors of the Company, (ii)
embezzlement or any offense involving misuse or misappropriation
of money or other property of the Company, (iii) indictment for a
crime, (iv) any act of dishonesty, disloyalty or other conduct
that is materially injurious to the Company, or (v) material
breach by the Consultant of any of the terms of this Services
Agreement other than those contained in this Section 5.
(b) In the event the Consultant hereunder is
terminated by the Company pursuant to subsection (a) of this
Section 5 during the Retention Term, the Company shall pay to the
Consultant a pro rata monthly fee through the date of its
termination, and the Consultant shall not be entitled to any
bonus with respect to such year of termination.
6. Change in Control.
-----------------
(a) A "Change in Control" of the Company shall be
deemed to have occurred if (i) any person (including any
individual, firm, partnership or other entity other than Software
Investments Limited, Care Corporation Limited, the CIGNA
Companies and The Robert Plan Corporation) becomes the beneficial
owner, directly or indirectly, of securities of the Company
representing 51% or more of the combined voting power of the
Company's then outstanding common stock, $.01 par value; (ii) the
stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of
the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation, or (iii) the stockholders or the Company
approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
(b) If, at any time during the Retention Term, there
occurs a Change in Control of the Company, (i) the Consultant
shall cause Magowan to resign from his positions as Chief
Executive Officer, Chairman of the Board of Directors and a
director of the Company, and (ii) all outstanding stock options
held by Magowan upon a Change in Control shall automatically vest
in full, and such options may be exercised by Magowan in
accordance with the terms of the non-qualified stock option
agreement between Magowan and the Company dated as of April 29,
1997.
7. Severance Compensation.
----------------------
(a) In the event the services of the Consultant are
terminated by the Company prior to the expiration of the
Retention Term for any reason other than for Cause, and so long
as the Company has reported a positive net income for each three
month period ending on March 31, June 30 or September 30 of 1998
(each period hereinafter referred to as a "1998 Fiscal Quarter")
in the Company's quarterly financial statements for such 1998
Fiscal Quarter, in the respective amounts projected in the
Company's 1998 business plan, dated February 20, 1998 (and any
amendments thereto as presented by Magowan and agreed to by the
Board of Directors of the Company, as evidenced by a Board
resolution) (the "Income Statement"), such net income to be
determined in accordance with generally accepted accounting
principles consistently applied, (i) the Company shall pay to the
Consultant as severance fees an amount equal to three times the
monthly fee, (ii) the Company shall pay to the Consultant a pro
rata share of the bonuses through the date of termination payable
as and when finally calculated and (iii) all outstanding stock
options held by Magowan shall automatically vest in full, and
such options may be exercised by Magowan in accordance with the
terms of the non-qualified stock option agreement between Magowan
and the Company dated as of April 29, 1997.
(b) In the event the Consultant's services hereunder
are terminated by the Company prior to the expiration of the
Retention Term for any reason and the Consultant does not qualify
for severance fees under the provisions of subsection (a) of this
Section 7, the Company shall pay to the Consultant as severance
fees an amount equal to one (1) times the monthly fee and no
bonus shall be payable.
8. Non-Disclosure of Confidential Information.
------------------------------------------
(a) The Consultant represents that it has been
informed that it is the policy of the Company to maintain as
secret and confidential all information relating to (i) the
products, processes and/or business concepts used by the Company
and (ii) the customers and employees of the Company
("Confidential Information"), and the Consultant further
acknowledges that such Confidential Information is of great value
to the Company and is the property of the Company. The parties
recognize that the services to be performed by the Consultant are
special and unique, and that by reason of its engagement by the
Company, he will acquire Confidential Information as aforesaid.
The parties confirm that to protect the Company's goodwill, it is
reasonably necessary that the Consultant agree, and accordingly
the Consultant does hereby agree, that it will not directly or
indirectly (except where authorized by the Board of Directors of
the Company for the benefit of the Company):
at any time during his its engagement hereunder or
after it ceases to be engaged by the Company, divulge
to any persons, firms or corporations other than the
Company (hereinafter referred to collectively as "Third
Parties"), or use, or cause to authorize any Third
Parties to use, any such Confidential Information, or
any other information regarded as confidential and
valuable by the Company which it knows or should know
is regarded as confidential and valuable by the Company
(whether or not any of the foregoing information is
actually novel or unique or is actually known to
others).
(b) The Consultant agrees that any breach or
threatened breach or alleged breach or alleged threatened breach
by it of any provision of this Section 8 shall entitle the
Company, in addition to any other legal remedies available to it,
to apply to any court of competent jurisdiction to enjoin such
breach or threatened breach or alleged breach or alleged
threatened breach. The parties understand and intend that each
restriction agreed to by the Consultant hereinabove shall be
construed as separable and divisible from every other
restriction, and that the unenforceability, in whole or in part,
of any other restriction, will not effect the enforceability of
the remaining restrictions and that one or more or all of such
restrictions may be enforced in whole or in part as the
circumstances warrant. No waiver of any one breach of the
restrictions contained in this Section 8 shall be deemed a waiver
of any future breach.
(c) The Consultant hereby acknowledges that it is
fully cognizant of the restrictions put upon it by this Section
8, and that the provisions of this Section 8 shall survive the
termination of this Services Agreement and its engagement with
the Company.
(d) Where disclosure of the Confidential Information
is required by (1) law, or by a court of competent jurisdiction,
or by an order or directive having the force of law, (2) a
request for production, including, but not limited to, discovery
of documents, issued pursuant to criminal, civil or
administrative proceedings, provided always that the receiving
party is advised by outside counsel with respect to its
obligation to comply with any such request for production, or (3)
a governmental or regulatory authority the disclosing party shall
(x) use all reasonable endeavors to ensure that the entity or
person to which/whom such Confidential Information is disclosed
is informed of its confidential nature and that it should not be
disclosed or made available to Third Parties, and (y) any such
disclosure shall be made only to the extent ordered or requested.
The party receiving any such request for disclosure acknowledges
and agrees that upon receipt of any such order or request for
disclosure it shall promptly notify the other party of such order
or request so that the other party may have the opportunity to
intervene in response to any such order or request.
(e) The provisions of this Section 8 shall not apply
to any Confidential Information which:
(i) is in or enters the public domain other than
by breach of this Section 8;
(ii) is rightfully in the possession of the
Consultant without restriction in relation to disclosure before
the date of receipt from the Company;
(iii) is independently developed by the Consultant
without reference or access to the Confidential Information;
(iv) is authorized for release by the prior
written consent of the Company; or
(v) is obtained by the Consultant from a Third
Party who is lawfully entitled to disclose such Confidential
Information.
9. Notices. All notices, requests, demands or other
-------
communications hereunder shall be deemed to have been given if
delivered in writing personally or by certified mail to each
party at the address set forth below, or at such other address as
each party may designate in writing to the other:
If to the Company:
Cover-All Technologies Inc.
18-01 Pollitt Drive
Fair Lawn, New Jersey 07410
Attention: Chief Executive Officer
with a copy to:
Reid & Priest
40 West 57th Street
New York, New York 10019
Attention: Leonard Gubar, Esq.
If to the Consultant:
Turnbury Associates
Box 427, 1272 Turnbury Lane
Gywnedd, Pennsylvania 19436
10. Entire Agreement. This Services Agreement and the
----------------
Exhibits annexed hereto contain the entire understanding of the
parties with respect to the subject matter hereof, supersedes any
prior agreement between the parties, and may not be changed or
terminated orally. No change, termination or attempted waiver of
any of the provisions hereof or thereof shall be binding unless
in writing and signed by the party against whom the same is
sought to be enforced. No provision hereof shall be construed
against a party because that provision or any other provision was
drafted by or at the direction of such party.
11. Successors and Assigns. This Services Agreement
----------------------
shall be binding upon and shall inure to the benefit of the
respective heirs, legal representatives, successors and assigns
of the parties hereto.
12. Severability. In the event that any one or more
------------
of the provisions of this Services Agreement shall be declared to
be illegal or unenforceable under any law, rule or regulation of
any government having jurisdiction over the parties hereto, such
illegality or unenforceability shall not affect the validity and
enforceability of the other provisions of this Services
Agreement.
13. Counterparts. This Services Agreement may be
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executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
14. Governing Law. All matters concerning the
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validity and interpretation of and performance under this
Services Agreement shall be governed by the laws of the state of
New York, whose courts or the federal courts located in the
Southern District of New York shall have exclusive jurisdiction
over the parties to which they consent.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed
this Services Agreement as of the date first above written.
COVER-ALL TECHNOLOGIES INC.
By: /s/ Peter C. Lynch
--------------------------------
Name: Peter C. Lynch
Title: President
TURNBURY ASSOCIATES
By: /s/ Brian Magowan
--------------------------------
