Document:

Exhibit
10.1

 

March 14, 2005

 

Neco Can

[Address omitted]

 

Dear Neco:

 

We are pleased to extend
an offer to join our team as Chief Information Officer.  In this position, you will report to me.

 

J. Crew is a company
committed to creativity, quality and teamwork. 
We believe that you meet the high standards that we look for in our
associates and are confident that, if you join our team, we can provide you
with professional challenges and rewarding opportunities.  This letter sets forth the terms of our offer
to you.

 

Annual
Salary

Your annual salary will be  $300,000, payable
biweekly in accordance with our normal payroll practices.

 

Sign on Bonus 

In addition, you will
receive a $75,000 sign-on bonus, payable within 30 days after your start date.
This is contingent upon you being actively employed by us on the date of actual
payout and is subject to applicable tax withholdings.  If you voluntarily terminate your employment
for any reason within one year after your start date, you agree to repay a
prorated amount of this bonus based on your last day of employment within 30
days after your last day of employment.

 

Annual
Bonus 

Starting in fiscal year
2005, you will participate in J. Crew’s bonus plan which provides for annual
bonuses as a reward for performance.  You
will be eligible to receive an annual bonus with a target of 25% based on the
achievement of specified company financial results and individual
performance.  Bonus payment is contingent
upon you being an active associate on the date of actual payout (bonuses are
generally paid in mid-April after the end of the fiscal year) and is
subject to applicable tax withholdings. 
Any bonus that you receive for fiscal year 2005 will be prorated based
on your start date.

 

Stock Options 

You will be eligible to
participate in J. Crew’s stock option plan. 
Subject to approval of the Compensation Committee of the Board of
Directors and the provisions of the company’s stock option plan, you will
receive non-qualified stock options to purchase 15,000 shares of J. Crew Group, Inc.
common stock as soon as practicable after your start date.  The exercise price will be determined by the
Compensation Committee of the Board of Directors and 25% of these options will
vest and become exercisable each year on each anniversary of the grant date
beginning with the first anniversary thereof, provided you continue to be
actively employed by us on each vesting date.

 

Commuting
Expenses and Housing Allowance

We will reimburse you for
your reasonable commuting costs to travel between your home in Ohio and the
company’s offices in New York City, subject to applicable tax
withholdings.  We will also provide you
with a monthly housing allowance equal to your actual out-of-pocket cost to
maintain housing in the New York area (up to a maximum of  $2,500 per month), subject to applicable tax
withholdings. These will be provided for up to eighteen (18) months following
your start date, provided that you remain actively employed by us.

 

Relocation Assistance 

In
the event that you decide to relocate your primary residence to the New York
area, we will provide you with relocation assistance consistent with the terms
of our relocation policy in effect at such time.  If you voluntarily terminate your employment
for any reason within one year after your relocation date, you agree to repay
the full amount of all payments, benefits and expense reimbursements you
received in connection with your relocation within 30 days after your last day
of employment.

 

Benefits

We want you to stay
healthy, have a secure financial future and live a balanced work life.  Accordingly, we offer a competitive benefits
package to help you do this, including medical and dental insurance, paid time
off, 401(k) savings plan (after 1 year with us), tuition reimbursement, etc.

 

Confidential
Information and Ownership

You acknowledge that as
Chief Information Officer you will have access to valuable confidential,
proprietary and/or trade secret information of the Company. You agree that
during your employment and at all times thereafter you will hold in strict
confidence any proprietary or Confidential Information related to the Company
or its affiliates.  “Confidential
Information” shall mean all information of the Company and its affiliates
in whatever form which is not generally known to the public, including, without
limitation, IT systems and processes, financial information, customer and
vendor information, 

 

 

marketing plans and
strategies, designs and fit specifications, business concepts, store
information, trade secrets, and information relating to merchandising,
distribution, planning and inventory control. 
In addition, you agree that all systems, processes, designs, strategies,
materials and useful ideas developed or generated by you, in whole or in part,
in connection with your employment will constitute the Company’s sole and
exclusive property.

 

Restrictive
Covenants

As additional consideration for J.Crew extending this offer and in light of the sensitive nature of the Chief Information Officer position, you agree to comply with the following covenants: You agree that during your employment and for twelve months following your last date of employment (“Termination Date”), you will not, directly or indirectly, (i) engage (either as owner, investor, partner, employer, employee, consultant or director) in or otherwise perform services for any Competitive Business which operates within a 100 mile radius of the location of any store of the Company or its affiliates or in the same area as the Company directs its mail order operations or any other area in which the Company or any of its affiliates conducts business or in which the Company or any of its subsidiaries’ customers are located as of the Termination Date, provided that the foregoing restriction will not prohibit you from owning a passive investment of not more than 5% of the total outstanding securities of any publicly-traded company, and (ii) solicit or cause another to solicit any customers or suppliers of the Company or any of its affiliates to terminate or otherwise adversely modify their relationship with the Company or any such affiliates.  “Competitive Business” means any business in competition with the retail, mail order and internet apparel and accessories business and any other material business the Company or its affiliates is engaged in on the Termination Date.  You further agree that, during your employment and for one year thereafter, you will not, directly or indirectly, solicit, hire, or seek to influence the employment decisions of, any employee of the Company or any of its affiliates on behalf of any person or entity other than the Company.

 

Proprietary
Information and Trade Secrets of Others

You represent to J. Crew
that you do not have any other agreements, arrangements or commitments with any
other person or entity that conflict with accepting this offer or performing
your obligations and that you will not disclose to J. Crew or use any
proprietary information or trade secrets of another person or entity, including
any former employers.  You also agree that
you will keep all proprietary, confidential information of J. Crew strictly
confidential and not disclose any such information during or after your
employment without J. Crew’s prior written consent, and that you will abide by
all J. Crew policies, including, but not limited to, those contained in the J.
Crew Code of Ethics and Business Practices.

 

At
Will Employment

By reviewing and signing
this letter, you understand that your employment is “at will” and may be
terminated by you or the company at any time and for any reason, and that this
letter does not constitute an employment contract.  In addition, you acknowledge that, in light
of the highly sensitive and confidential nature of the position you are being
offered, this offer is expressly contingent upon the successful completion of
an extensive background screen and reference check once you accept and may be
withdrawn at any time.

 

If you agree that J. Crew
and this offer are right for you, kindly sign and date the enclosed copy of
this letter and return it in the enclosed self-addressed stamped envelope.  Please keep the other copy for your
records.  If you have any questions,
please do not hesitate to contact me at 212.209.2775.

 

We are truly excited to
have you join our team and look forward to working with you.

 

	
  Very truly yours,

  
	
   

  
	
  /s/ Roxane Al-Fayez

  	
   

  
	
   

  
	
  Roxane Al-Fayez

  
	
  Executive Vice
  President

  
	
  Direct Operations,
  Distribution Centers & Information Technology

  

 

AGREED TO AND ACCEPTED:

 

	
  /s/ Neco Can

  	
   

  	
  Date: March 18,
  2005

  
	
  Neco CanExhibit 10.1

 

LETTER AGREEMENT

 

This letter
agreement (“Agreement”) is between Proginet Corporation (“Proginet”) and V-ONE
Corporation (“V-One”) and sets forth the terms and conditions pursuant to which
Proginet will (i) acquire certain assets and assume certain liabilities of
V-One in the Chapter 11 bankruptcy case of V-One (the “Sale Transaction”) and
(ii) make certain financing available to V-One in the Chapter 11 bankruptcy
case for the purpose of preserving V-One’s business pending the closing of the
sale to Proginet (the “DIP Financing”). 
All references to dollars and financial terms included herein are in
U.S. DOLLARS.

 

Initial Obligations of V-One

 

V-One will, simultaneously with its filing of a Chapter 11 petition
with the United States Bankruptcy Court for the Second Southern District of
Maryland (the “Bankruptcy Case”), file an emergency motion or motions seeking:
(i) authority to borrow monies from Proginet up to the sum of $487,000, or such
greater amount in Proginet’s sole discretion, to fund certain budgeted expenses
agreed to by Proginet in exchange for the granting to Proginet of a first
priority security interest on the intellectual property of V-One, including,
without limitation, on V-One’s trademarks, patents, copyrights, domain names,
and source code and certain other first priority liens and security interests,
and which shall be treated as a super-priority administrative claim; (ii)
within five days of the receipt of an Asset Purchase Agreement from Proginet,
and in no event later than March 25, 2005, authority to sell the assets
describe below to Proginet a upon an expedited basis subject only to higher and
better offers (the “Approval Order”).  In
the absence of an Asset Purchase Agreement, the terms expressed in this letter
agreement shall govern the purchase by Proginet of all of the assets of V-One;
(iii) approval of certain buyer protections for the benefit of Proginet,
including, without limitation, (A) a break-up fee equal to 5% of the purchase
price of $2.050 million, which shall be payable to Proginet if Proginet is not
in material default of the terms and conditions of this Agreement and for
whatever reason the sale transaction to Proginet contemplated herein is not
consummated (the “Break-Up”), (B) the repayment in full of the DIP Financing
and the pre-petition secured loan made by Proginet to V-One in the original
principal amount of $63,000 (together with all accrued interest thereon, the (“Pre-Petition
Loan”) upon a Break-Up, (C) and reimbursement of Proginet’s expenses incurred
in connection with the transactions contemplated by this Agreement (the “Buyer
Protections”). The Buyer Protections shall survive termination of this
Agreement.  V-One shall use its best
efforts to obtain by the Bankruptcy Court: (i) entry of an Order approving the
Buyer Protections; (ii) entry of the Approval Order; (iii) entry of the Interim
Financing Order; and (iv) entry of Final Financing Order, as soon as
practicable but not later than the dates set forth below.

 

At the option of Proginet, the parties shall enter into an Asset
Purchase Agreement containing such additional terms and conditions as are
customary for a sale transaction of this nature.

 

1

 

Assets
Purchased

 

1.                                       Software: Proginet will acquire the
Software (VPN Software) from V-One including all intellectual property relating
thereto.  The “Software” will be free and
clear of any liens, claims, and encumbrances and will be delivered in source
and object code and all related materials. 
There shall be no third-party software embedded, or included, in the “Software”
which requires the payment of licensing fees or royalties.

 

2.                                       Customer Licenses: V-One will transfer all
customer license agreements (free and clear of all liens, claims, and encumbrances)
to Proginet and obtain all assignments where necessary or required.  V-One represents that all agreements provide
for transfer upon request and such approvals will not be unreasonably withheld,
and that all license agreement requirements have been satisfied.

 

3.                                       Third Party Agreements: Proginet will
identify prior to closing those agreements related to the V-One business,
including, without limitation, those with partners, distributors, OEM partners
or other third party relationships related to the business, which must be
assumed by V-One and assigned to Proginet.

 

4.                                       Trademarks/Patents/Copyrights: V-One will
transfer free and clear of all liens, claims and encumbrances all licenses,
rights, and ownership to all trademarks, patents, copyrights, domain names, Web
names, etc. to Proginet.  Such transfers
shall include the assignment of any past, present or future claims that may be
applicable to the transfers identified herein.

 

5.                                       Title to Assets:  Proginet requires clean title to all assets.

 

Assumptions of Obligations

 

6.                                       Customer Support: Proginet will assume
responsibility for all existing and future customers upon closing of the Sale
Transaction.  Upon closing of the Sale
Transaction, Proginet will assume full responsibility for all customer related
billings, collections, etc. V-One will through the closing of the Sale
Transaction preserve its business, conduct its business consistent with past
practices, preserve its employees, and preserve and continue to service its
customers.

 

7.                                       Agreements: V-One will assume and assign to
Proginet those agreements related to its business, including leases, equipment
maintenance agreements, etc., which are specified by Proginet.  Proginet shall not be required to assume any
obligation relating to any agreements not specified by it for assumption and
assignment.

 

8.                                       Deferred Maintenance: Represents monies
received for future services to be provided. As Proginet will assume full
maintenance support responsibility for the V-One customers upon closing of the
Sale Transaction, any and all unearned maintenance (Deferred Maintenance) shall
be assumed by Proginet.

 

9.                                       Critical Vendor Debt: Proginet through the
DIP Financing will provide funds for, among other things, specified vendors
related to V-One Critical Vendor partners,

 

2

 

including, without limitation, Macrovision and Triple Point, to
preserve such relationships as such relationships are critical to future
software sales.  The amount of DIP
Financing and the Pre-Petition Loan provided by Proginet shall be offset
against any determined purchase price in the Sale Transaction.

 

10.           Facility Lease: 
V-One will assume and assign to Proginet its facility lease,
provided that Proginet can obtain terms and conditions acceptable to Proginet
in its sole discretion.  V-One shall
provide Proginet the 60 days permitted by the Bankruptcy Code within which to
either negotiate acceptable changes to the current facility lease or to locate
another facility to relocate the operations of V-One.

 

Transition/Staff

 

11.           Transition Plan: V-One and Proginet agree
to manage the requirements of the transition plan.  Both parties understand and accept that
satisfaction of the transition plan is a critical and required activity to
consummate the Sale Transaction.

 

The critical components of the transition plan include:

 

a.             Interim approval of the DIP Financing by
Proginet to maintain the operations of V-One no later than March 14, 2005
(the “Interim Financing Order”) and final approval no later than April 5,
2005 (the “Final Financing Order”), with time being of the essence.

 

b.             The closing of the Sale Transaction by no
later than June 30, 2005, with time being of the essence.

 

c.             Arrangements acceptable to Proginet
regarding the current facility or a new corporate facility acceptable to
Proginet.

 

d.             The transfer of customer agreements and
customer records and all of V-One’s intellectual property.

 

e.             The transfer of all other records,
equipment etc.

 

f.              The selection by Proginet of employees
that will be hired by it upon closing and the negotiations of arrangements for
the hiring of such employees acceptable to Proginet.

 

12.                                 Staffing: V-One acknowledges and agrees
that it must take appropriate action(s) prior to the transfer of the business
to deal with staffing issues.  The issues
must be resolved to properly deal with V-One staff so that those critical staff
necessary for the ongoing business may be offered positions by Proginet, as
Proginet determines appropriate.

 

13.           Hire of Staff: Proginet will be provided
the opportunity to interview and extend offers to V-One employees.  The employees will be hired as new employees
with no prior service and they will be eligible for ALL benefits offered to
other Proginet employees.  Proginet

 

3

 

reserves the right to make offers at compensation levels and on other
terms, as determined by Proginet in its sole discretion.

 

14.           Conduct of V-One’s Business Prior to Closing.  From the date hereof through the closing of the
Sale Transaction, V-One shall, subject to any order of the Bankruptcy Court, as
respects its business (a) comply with the terms and conditions of the
Bankruptcy Code and all other applicable laws; (b) maintain its assets in good
operating condition and repair; (c) not sell, transfer, or otherwise dispose of
or encumber any of its assets, except for sales of Software in the ordinary
course of business; (d) not enter into any transaction with any affiliate of
V-One; (e) not commit or enter into any agreement to do any of the foregoing,
save, in all cases, with the prior written consent of Proginet; (f) maintain
the value of its business; and (g) contest any suit, action or other proceeding
that seeks to restrain or prohibit the consummation of the transactions
contemplated by this Agreement.

 

Consideration

 

15.           Purchase Price: For the purchase of assets,
assumption of certain liabilities, and other considerations provided for
herein, Proginet agrees to pay V-One’s estate as follows in connection with the
closing of the Sale Transaction:

 

Fixed Compensation

 

The amounts to be used in the calculations below are based exclusively
on the V-One financial statements for the fiscal year ended December 31,
2004.  The total purchase price is
calculated by taking the sum of a and b less c, as follows:

 

a.             The
amount equal to 1.2 times the Annual Support (Maintenance) revenue of
$1,589,000.  This amount is the current
book of business, with NO cancellations. Also, any pre-paid or multiyear
agreements must be adjusted to an annual number.

 

b.             The
amount equal to 1.5 times the Software Sales and net Hardware Sales projected
for the next 12 calendar months, which equals $300,000.

 

c.             The
amount equal to the sum of reseller fees, OEM fees, and cost of goods sold will
be subtracted from the total.

 

d.             The
above calculations result in a purchase price of $2.050 million.

 

16.                                 Adjusted Purchase Price:  will be calculated to reduce the Purchase
Price calculation by any liabilities that Proginet assumes including but not
limited to Critical Vendor debt, Deferred Maintenance fees, fees prepaid from
customers for advance payment etc.  Such
reductions amount to $950,000.  In
addition, the costs of the auditors referenced in Section 33 below and the
remaining amounts due under the Pre-Petition Loan will also result in a
reduction of the Purchase Price.

 

4

 

17.                                 Payment Terms: Proginet will make payment
to V-One of the Adjusted Purchase Price as follows:

 

a.                                       Proginet
shall, if approved by the Bankruptcy Court, provide DIP Financing on a
revolving credit basis in an amount equal up to $487,000, to be made available
as provided below.  Such loan shall bear
interest payable at the rate of 8% per annum, payable monthly on the
outstanding balance from time to time.

 

b.                                       Initial
Advance: Upon approval of the Interim Financing Order by the Bankruptcy
Court, Proginet will make an initial advance up to $162,000 to V-One solely to
pay the items set forth in Schedule M.

 

c.                                       Subsequent
Advances: Proginet will thereafter advance to V-One, as requested in
writing by V-One from time to time not less than two business days prior to the
requested advance, the amounts shown in Schedule N, solely for

V-One to pay agreed upon budgeted cash flow needs.

 

All such advances shall be due and payable no later than June 30,
2005.

 

The sum of these payments will constitute the total of the short-term
loan made to V-One, and will not (except at the absolute discretion of
Proginet) exceed $487,000.

 

Upon approval by the Bankruptcy Court of the
Sale Transaction, Proginet will complete the purchase of the assets of V-One
with the granting of a note payable 18 months from the closing date, for the
amount equal to the purchase price defined in paragraph 15(A)(d) herein, and
reduced by the amounts specified in paragraphs 15 and 16 herein and further
reduced by the amount of the DIP Financing and the Pre-Petition Loan; provided,
however, that the parties shall reconcile the calculations of the amounts
determined under Paragraph 15(a) through (c) above against such amounts as
calculated as of the closing date of the Sale Transaction within 60 days of the
closing of the Sale Transaction, with any reduction represented thereby being
applied as an offset against such note. 
Such note will bear interest at the rate of 8% per annum.  Proginet reserves the right to settle such
note for cash at the 18 month anniversary or, subject to applicable law,
provide an equal value in shares of Proginet stock, at the 20-day average
closing price prior to such 18 month anniversary date.

 

18.           Sales, Use and Transfer Taxes.  V-One shall pay all sales, use, transfer, and
documentary taxes payable in connection with the transactions contemplated by
this Agreement.  V-One and Proginet will
cooperate to minimize any such taxes and V-One will ensure that the Approval
Order will contain a provision that its sale, transfer, assignment, and
conveyance of the assets to Proginet in the Sale Transaction shall be entitled
to the protections afforded under Section 1146(c) of the Bankruptcy Code.

Notwithstanding the foregoing, the parties shall not take any actions
that will interfere with the value of the assets or Proginet’s title thereto.

 

5

 

Other
Terms

 

19.           Equipment/Software Usage: Proginet will not
assume existing lease(s) for equipment or software obligations, unless the
specific leased item is in Proginet’s view required for it to conduct business.

 

20.           Press Releases: V-One and Proginet will
jointly issue a press release, agreeable to both parties, announcing the
signing of this Agreement, to assure compliance with all regulations.

 

21.           Documentation: V-One agrees to provide
Proginet with all documentation, collateral material, and appropriate records
related to the “Software” in its possession.

 

22.           Customer Relations: V-One and Proginet
agree to work together to effectively manage customer relationships and
prospects to reasonably assure a high level of comfort and satisfaction for the
customers.

 

23.           Tech Support Database: V-One will provide
access to the information and detailed reports from the V-One Test Director 7.2
and TPR system problem database as often as requested to Proginet prior to the
closing of the Sale Transaction. V-One will use its best efforts to provide
machine-readable copies of its current problem database to Proginet, during the
period through the closing of the Sale Transaction, in a format which can be
loaded into Proginet’s CRM system.

 

24.           Product Test Suites: V-One agrees to
provide all software test cases and automated testing programs to Proginet.

 

25.           Development History Summary: V-One will
provide the development history summary to Proginet, which would include all
current and former versions of the products currently supported. V-One’s policy
requires support for the current release and two revisions back. Archive
releases, to the extent available, will be provided to Proginet.

 

26.           Schedules: The following schedules have been produced by V-One and
delivered to Proginet and are incorporated herein:

 

	
  Schedule A

  	
  - List of Customers and Software License

  
	
  Schedule B

  	
  - Software to be Acquired

  
	
  Schedule C

  	
  - Standard Software License Agreement

  
	
  Schedule D

  	
  -Third Party Agreement(s)

  
	
  Schedule E

  	
  - Accounts Prospects List

  
	
  Schedule F

  	
  - List of Staff to be Considered

  
	
  Schedule G

  	
  - Annual Maintenance Revenues

  
	
  Schedule H

  	
  - Software Revenues (past 12 months)

  
	
  Schedule I

  	
  - OEM Revenues

  
	
  Schedule J

  	
  - List of Patents and Trademarks

  
	
  Schedule K

  	
  - Exceptions to Ownership of Software

  

 

6

 

	
  Schedule L

  	
  - Outstanding Commitments of V-ONE

  
	
  Schedule M

  	
  - Key Creditors to be Paid

  
	
  Schedule N

  	
  - Monthly Cash Amounts Projected

  

 

27.           DIP Financing:  The DIP Financing shall be upon the terms and
conditions set forth in the Interim Financing Order attached hereto and such
other terms and conditions set forth herein and shall be secured by a first
priority lien on, among other things, the source and object code and all
patents and trademarks, copyrights, domain names, customer list, customer
contracts, and proceeds thereof of V-One and a super-priority administrative
claim pursuant to Sections 503(b)and 507(a)(1) of the Bankruptcy Code.  The DIP Financing loan shall be up to the sum
of $487,000 (unless Proginet agrees in its sole discretion to a greater amount)
and may only be used for budgeted items agreed to by Proginet.  Such loan shall be on a revolving credit
basis and bear interest at 8% per annum and be due and payable in full upon the
earlier of (a) June 30, 2005, (b) an event of default (including a
Break-Up), or (c) the closing of the Sale Transaction.  The outstanding amount of such loan at such
closing shall be deducted from any determined purchase price.

 

28.           Governing Law.  This Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of New
York, without regard to the rules of conflict of laws of the State of New York
or any other jurisdiction.

 

29.           Conditions to Transactions:  The obligations of Proginet to (i) purchase
the assets of V-One and assume the liabilities in the Sale Transaction and
contemplated herein or (ii) provide any DIP Financing as set forth herein,
shall be subject to satisfaction of each of the following conditions (or waived
by Proginet in its sole discretion) as of (i) the date of each advance of a
loan under the DIP Financing and (ii) the closing of the Sale Transaction.

 

(a)                                  The Bankruptcy Court
shall have entered an Order, in form and substance acceptable to Proginet,
approving bidding procedures and the Buyer Protections, and scheduling a
hearing to consider the sale of V-One’s assets on or before March 25,
2005;

 

(b)                                 V-One and Proginet
shall enter into an Asset Purchase Agreement containing usual and customary
terms and conditions, covenants, representations and warranties, and releases
in form and substance acceptable to Proginet on or before March 20, 2005
unless Proginet concludes that no agreement in addition to this Agreement is
required;

 

(c)                                  The Bankruptcy Court
shall have entered an Order, in form and substance acceptable to Proginet,
approving the sale of V-One’s assets to Proginet on or before May 25, 2005

 

(d)                                 The Bankruptcy Court
shall have entered the Interim Financing Order on or before March 15, 2005
and the Final Financing Order on or before April 5, 2005;

 

7

 

(e)                                  All pleadings to be
filed with the Bankruptcy Court by V-One relating to DIP Financing and the sale
of V-One’s assets, shall be sent to Proginet prior to filing for review and
shall be in form and substance acceptable to Proginet;

 

(f)                                    Not later than
Tuesday of each week, V-One shall furnish Proginet as of Friday of the prior
week weekly performance information;

 

(g)                                 No event shall have
occurred and be continuing which constitutes or would constitute a default of
any provision of this Agreement or any Order entered by the Bankruptcy Court or
an Event of Default (as defined below);

 

(h)                                 An Order of the
Bankruptcy Court providing that Proginet is not obligated to pay Ehrenkrantz, King
& Nussbaum any finding, brokerage, financial advisory, or other fee from
Proginet in connection with the transactions contemplated hereby; and

 

(i)                                     With respect to
Proginet’s purchase of assets, the delivery of updates to Schedules A-N and
updated financial statements of V-One.

 

30.                                 Events of Default:  The occurrence of any one or more of the
following events shall constitute an “Event of Default” under this Agreement:

 

(a)                                  A default by V-One
under any of its material contracts other than the type of default contemplated
in Section

365 (e)(1) of the Bankruptcy Code;

 

(b)                                 Receivable collections
by V-One for any given month are materially less than its projections as set
forth on Schedule N;

 

(c)                                  V-One’s expenses for
any given month are materially greater than its projections as set forth on Schedule N;

 

(d)                                 Assets of V-One [with
a fair market value in excess of $100,000] are attached, seized, levied upon,
or subjected to a writ of distress warrant, or come within the possession of
any receiver, trustee, custodian or assignee for the benefit of creditors other
than the commencement of the Bankruptcy Case;

 

(e)                                  The sale, transfer,
or disposition of any assets of V-One, except for sales of Software and
Hardware in the ordinary course of business;

 

(f)                                    The granting of any
lien, security interest, or encumbrances on any asset of V-One that is pari passu or superior to the liens,
security interest and encumbrances granted to Proginet in the DIP Financing or
the Pre-Petition Loan;

 

(g)                                 Any of the Conditions
to Transactions in Paragraph 29 of this Agreement have not or cannot or are not
satisfied (or waived by Proginet);

 

(h)                                 Any representation or
warranty contained herein or in any other agreement, statement or report
delivered to Proginet is untrue or incorrect in material respect;

 

8

 

(i)                                     The appointment of
a trustee or an examiner with expanded powers in V-One’s Chapter 11 bankruptcy
case;

 

(j)                                     Entry of an order
converting V-One’s bankruptcy case to a case under Chapter 7 of the Bankruptcy
Code or dismissing the case;

 

(k)                                  Cessation of all or a
material part of V-One’s business operations other than as a result of a sale
to Proginet;

 

(l)                                     Entry of an order
granting relief from the automatic stay to any entity other than Proginet to
permit foreclosure on any material asset of V-One;

 

(m)                               Any event other than
those otherwise specified in this Paragraph 30 shall have occurred which could
reasonably be expected to have a material adverse effect on the business,
financial condition, operations, or prospects of V-One;

 

(n)                                 With respect to the
Sale Transaction, such additional Events of Default as are customary in a
transaction of this nature as set forth in a definitive Asset Purchase
Agreement, unless Proginet in its discretion determines that no additional
Asset Purchase Agreement is required.

 

31.           Proginet’s Right Upon an Event of Default:

 

If an Event of Default occurs (which has not been cured within two (2)
business days of notice to V-One), Proginet shall have the following rights in
its sole discretion:

 

(i)                                     Immediately
cease any further DIP Financing;

 

(ii)                                  Elect
not to proceed with Sale Transaction contemplated in this agreement; and

 

(iii)          Terminate this
Agreement.

 

32.           Representations and Warranties:  V-One represents and warrants to Proginet:

 

(a)                                  All of the
information contained in this Agreement, including, without limitation, the
attached Schedules (including Schedules A-N) is true and correct, to the best
of V-One’s knowledge and belief in all respects;

 

(b)                                 There are no existing
perfected liens on any of V-One’s assets, except, those specifically provided
to Proginet and those securing the Pre-Petition Loan;

 

(c)                                  No default has
occurred, to the best of V-One’s knowledge and belief under this Agreement or
any other material agreements of V-One.

 

9

 

33.           Due Diligence and Other Conditions:  Proginet’s obligation to consummate the Sale
Transaction contemplated herein is subject to (a) approval of Proginet’s Board
of Directors, (b) the satisfactory completion of due diligence by Proginet, (c)
approval by Proginet’s lender, (d) the execution of appropriate documentation
acceptable to Proginet, (e) V-One obtaining all necessary consents and
approvals, and (f) V-One providing Proginet with audited financial statements
for the three years ended December 31, 2004, 2003, and 2002, and the
consent of V-One’s auditors to the inclusion of such financial statements and
its reports in any SEC filings required to be made by Proginet.  The fees and expenses of such auditors will
be paid by Proginet and will reduce the Purchase Price to be paid by Proginet
as set forth in Section 16 above.

 

	
   

  	
  PROGINET
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  V-ONE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]