Document:

EX-10.1

 

EXHIBIT 10.1

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH
OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED BY ***. A
COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

THIS AGREEMENT is made the 20th day of June, 2006

B E T W E E N

	(1)	 	ARKONA INC a company incorporated in Delaware with its principal offices at 10757 South
Riverfront Parkway, Suite 400, South Jordan, Utah 84095, USA (the “Company”); and
	 
	(2)	 	MCL GROUP LIMITED, Company Number 00430530, whose registered office is at 77 Mount Ephraim,
Tunbridge Wells, Kent TN4 8BS, (the “Distributor”).

RECITALS

	(A)	 	The Company is the proprietor of certain dealer management software known as “the Arkona
Dealer Management Suite”.
	 
	(B)	 	The Company has agreed to appoint the Distributor as its exclusive distributor to distribute
and sub-license such software and its associated documentation in the Territory (as
hereinafter defined) on the terms and conditions hereinafter contained.
	 
	(C)	 	The Company and the Distributor have entered into this Agreement in the spirit of mutual
collaboration and with the aim of furthering their joint interests.

NOW IT IS HEREBY AGREED as follows:

	 	 	 	 	 
	1.	 	DEFINITIONS AND INTERPRETATION
	 
	 	 	 	 
	1.1	 	In this agreement (the “Agreement”), unless the context otherwise requires, the following
expressions have the following meanings:
	 
	 	 	 	 
	 

	 	“Acceptance Date”
	 	means the date of Formal Acceptance of the UK Core Software pursuant to
Clause 9;
	 
	 	 	 	 
	 

	 	“Affiliate”
	 	in respect of any Party, means any subsidiary of that Party and
each subsidiary thereof (the term ‘subsidiary’ having the meaning given in section
736 of the Companies Act 1985);
	 
	 	 	 	 
	 

	 	“Business Day”
	 	means a day other than a Saturday, Sunday or a public holiday in the
United Kingdom or the United States;

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	 	“Confidential Information”
	 	means this Agreement and all information obtained by one Party
from the other pursuant to this Agreement, whether in writing, orally, or through
observation, that (1) is expressly marked as confidential, or (2) is manifestly of a
confidential nature, or (3) if orally presented, is identified as confidential at
the time of disclosure and is confirmed in writing to be confidential within 7 days
of its disclosure;
	 
	 	 	 	 
	 

	 	“Customer Relationship Management Product”
	 	means an application being fully
integrated with UK Core Software and including functions for customer contact
information, dealership daily work plans and other activity scheduling, showroom
sales-process management, realtime analysis of showrooms sales-process statistics,
prospect analysis and database marketing;
	 
	 	 	 	 
	 

	 	“Distributor Software”
	 	means any and all software developed by or on behalf of the
Distributor which interfaces with the UK Core Software, but excludes (1) the UK Core
Software, and (2) any software developed for the Distributor by the Company;
	 
	 	 	 	 
	 

	 	“End-User”
	 	means a person who licences the use of the End-User Software from the
Distributor pursuant to the terms of an End-User Agreement (and reference to “a
person” means a company, partnership, body corporate or sole trader);
	 
	 	 	 	 
	 

	 	“End-User Agreement”
	 	means a software licence and support agreement entered into by the
Distributor or an Affiliate and an End-User and containing such terms as are
required by Clause 10, and otherwise as the Distributor may in its sole discretion
determine;
	 
	 	 	 	 
	 

	 	“End-User Software”
	 	means the UK Core Software (or any portion thereof) and the
Modifications, whether distributed alone or in combination with any Distributor
Software;
	 
	 	 	 	 
	 

	 	“Escrow Agent”
	 	means Escrow Tech International Inc. of C7 Data Center Building, 330 South
520 West Suite 230, Lindon UT 84042, United States of America;
	 
	 	 	 	 
	 

	 	“Escrow Agreement”
	 	means an escrow agreement in the form detailed in Appendix A hereto;

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	 	“Formal Acceptance”
	 	in relation to the UK Core Software or any Modifications, means
formal acceptance of such software by the Distributor in accordance with Clause 9.4;
	 
	 	 	 	 
	 

	 	“Intellectual Property Rights”
	 	means patents, patent applications, and patent rights;
copyrights, copyright applications, and copyright registrations; trademarks,
trademark applications, trademark registrations, and trademark rights; trade
secrets; and all other intellectual property and proprietary information rights as
may exist now or hereafter come into existence; all modifications, continuations,
renewals, and extensions of any of the foregoing; and all claims, actions, causes of
action, damages, costs, expenses, profits, penalties, recoveries, and remedies
relating to any past, present, or future infringement of any of the foregoing;
arising under the laws of England, the laws of the United States, or the laws of any
other country, state, or jurisdiction in the world;
	 
	 	 	 	 
	 

	 	“Licence Fees Revenue”
	 	means with regard to an End-User the software licence fees,
excluding value added taxes, received by the Distributor from that End-User under
the terms of its End-User Agreement;
	 
	 	 	 	 
	 

	 	“Location”
	 	means the head office of the Distributor from time to time which, as of the
date of this Agreement, is at 77 Mount Ephraim, Tunbridge Wells, Kent TN4 8BS;
	 
	 	 	 	 
	 

	 	“Maintenance Release”
	 	means a release of the Software by the Company which
corrects faults, adds functionality, or otherwise amends or upgrades the Software,
but which does not constitute a New Version;
	 
	 	 	 	 
	 

	 	“Maintenance Services”
	 	means the maintenance services to be provided by the Company
pursuant to the terms of the Service Level Agreement;
	 
	 	 	 	 
	 

	 	“Mark”
	 	means the ARKONA trade mark, which is registered in the USA as
registration no.2,301,459;
	 
	 	 	 	 
	 

	 	“Mark Usage Requirements”
	 	means those requirements for the manner in which the
Mark may be used as detailed in Appendix E hereto;

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	 	“Modification”
	 	means any addition to, modification of, or
deletion from the substance or structure of: (1) any Software or other Software
Materials, (2) any prior Modifications, or (3) any Source Materials for any of the
foregoing. When any of the foregoing are provided as a series of files, a
“Modification” is: (a) any addition to, modification of, or deletion from the
contents of a file containing any Software or other Software Materials, any prior
Modifications, or any Source Materials for any of the foregoing, or (b) any new
file containing any Software or other Software Materials, any prior Modifications,
or any Source Materials for any of the foregoing;
	 
	 	 	 	 
	 

	 	“New Version”
	 	means any new version of the Software which from time to time
is publicly marketed and offered for license by the Company in the course of its
normal business, being a version which contains such significant differences from
the previous versions as to be generally accepted in the marketplace as constituting
a new product;
	 
	 	 	 	 
	 

	 	“Parties”
	 	means each of the Company and the Distributor and “Party” shall mean either of
them as the context may require;
	 
	 	 	 	 
	 

	 	“Product Description”
	 	means the product description as modified, enhanced or altered by
the Company from time to time of the Software describing the facilities and
functions thereof as supplied to the Distributor by the Company from time to time in
connection with the UK Core Software;
	 
	 	 	 	 
	 

	 	“Release”
	 	means any Maintenance Release or New Version;
	 
	 	 	 	 
	 

	 	“Restricted Territories”
	 	means South Africa, Australia, France, Germany, Italy, Spain,
Belgium, The Netherlands, Greece, Luxembourg, Portugal, Sweden, Switzerland and
Norway and “Restricted Territory” shall mean any of such countries;
	 
	 	 	 	 
	 

	 	“Quarter Day”
	 	means each of 31 March, 30 June, 30 September and 31 December in each Year
during the continuance of this Agreement;
	 
	 	 	 	 
	 

	 	“Quarterly Period”
	 	means the period during the continuance of this Agreement and
commencing on the Acceptance

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	 	 	 	Date and ending on the next occurring Quarter Day
and each successive period commencing on the day
immediately following the end of the previous
Quarterly Period and ending on the next Quarter Day;
	 
	 	 	 	 
	 

	 	“Revenue Share Fee”
	 	means a payment calculated in accordance with Appendix C, and
“Revenue Share Fees” shall be construed accordingly;
	 
	 	 	 	 
	 

	 	“Services”
	 	means the services to be performed by the Company pursuant to the terms of
this Agreement including the provision of the Maintenance Services;
	 
	 	 	 	 
	 

	 	“Service Level Agreement”
	 	means the service level agreement in the form attached to this
Agreement at Appendix D;
	 
	 	 	 	 
	 

	 	“Software”
	 	means the Arkona Dealer Management Suite software and all modifications,
enhancements, versions and replacements thereof and additions thereto, but excluding
any Distributor Software;
	 
	 	 	 	 
	 

	 	“Software Documentation”
	 	means the operating manuals and other literature (including any
and all marketing material), in an editable format, provided by the Company to the
Distributor from time to time for use by End-Users in conjunction with the UK Core
Software;
	 
	 	 	 	 
	 

	 	“Software Materials”
	 	means the UK Core Software and any Modifications, the Product
Description, and the Software Documentation;
	 
	 	 	 	 
	 

	 	“Source Materials”
	 	means any and all logic, logic diagrams, flowcharts, orthographic
representations, algorithms, routines, sub-routines, utilities, modules, file
structures, coding sheets, coding, source codes listings, functional specifications,
program specifications and all other materials and documents necessary to enable a
reasonably skilled programmer to maintain, amend and enhance the software in
question without reference to any other person or documentation and whether in
eye-readable or machine-readable form;

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	 	“Specification”
	 	means the specification for each of the Software and the UK Core
Software, each as scheduled at Appendix B;
	 
	 	 	 	 
	 

	 	“Territory”
	 	means the United Kingdom of Great Britain and Northern Ireland;
	 
	 	 	 	 
	 

	 	“Test Version”
	 	in respect of the UK Core Software or any Modifications, the
test version of such software to be delivered by the Company to the Distributor
pursuant to the terms of Clause 9.2;
	 
	 	 	 	 
	 

	 	“Test Date”
	 	has the meaning set out in Clause 9.7;
	 
	 	 	 	 
	 

	 	“UK Core Software”
	 	means the Software as adapted by the Company for the
Distributor in accordance with Clause 8.1 and made available to the Distributor
pursuant to this Agreement but excluding any Distributor Software;
	 
	 	 	 	 
	 

	 	“UK Core Software Test Date”
	 	has the meaning set out in Clause 9.5;
	 
	 	 	 	 
	 

	 	“US$ Equivalent”
	 	means the amount in US dollars of the relevant payment, as
calculated at the spot rate (immediate delivery price) published in the Financial
Times (as produced in London by The Financial Times Limited) and as determined on
the date being the Business Day immediately proceeding the date on which such
payment is made or should have been made in accordance with the terms of this
Agreement;
	 
	 	 	 	 
	 

	 	“Year”
	 	means any period of 12 months commencing on the date hereof or any anniversary of
the date hereto.

	 	 	 
	1.2

	 	The Recitals form part of this Agreement and have the same force and effect as if set out in
the body of this Agreement. Any reference to this Agreement includes the Recitals.
	 
	 	 
	1.3

	 	The headings in this Agreement do not affect its interpretation. Save where the context
otherwise requires, references to clauses are to clauses of this Agreement.
	 
	 	 
	1.4

	 	In this Agreement, unless the context otherwise requires:
	 
	 	 
	1.4.1

	 	words and expressions which are defined in the Companies Act 1985 have the same meanings as
are given to them in the Companies Act 1985, unless such words and expressions are expressly
defined otherwise in this Agreement;

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	1.4.2

	 	references to the Company and the Distributor include their permitted successors and
assigns;
	 
	 	 
	1.4.3

	 	references to statutory provisions include those statutory provisions as amended or
re-enacted;
	 
	 	 
	1.4.4

	 	references to any gender include all genders; and
	 
	 	 
	1.4.5

	 	words in the singular include the plural and in the plural include the singular.
	 
	 	 
	2.

	 	APPOINTMENT
	 
	 	 
	2.1

	 	Subject to the terms, conditions, and limitations of this Agreement, the Company hereby
appoints the Distributor, and the Distributor hereby agrees to act as, the sole and exclusive
distributor of the Company to market, distribute, license, sub-license, support and maintain
the Software Materials in the Territory.
	 
	 	 
	2.2

	 	The Company shall not (and shall procure that none of its Affiliates shall) at any time
during the continuance of this Agreement either directly or indirectly including without
limitation through any agents distributors partners representatives or any third parties
license, sub-license, market, distribute or directly support any part of the Software
Materials or the Software anywhere in the Territory. Nothing in this Clause shall prevent
the Company from fulfilling unsolicited orders received by the Company from any person in the
Territory or in relation to the supply of Software to another EU country.
	 
	 	 
	3.

	 	LICENCES
	 
	 	 
	3.1

	 	In consideration for the payment of the fees referred to in Clause 7.1, the Company hereby
with effect from the date of this Agreement grants to the Distributor an exclusive licence:-
	 
	 	 
	3.1.1

	 	for the duration of this Agreement, to use the Software Materials in accordance with the
provisions of this Agreement;
	 
	 	 
	3.1.2

	 	for the duration of this Agreement, to use the Source Materials and the Software for the
purposes of developing Distributor Software (and for the avoidance of doubt the licence
granted by this Clause 3.1.2 shall allow the Distributor read-only access to the source code
of the Software);
	 
	 	 
	3.1.3

	 	for the duration of this Agreement, to grant to any End-User within the Territory a
sub-licence to use the UK Core Software in object code only and to distribute copies of the
Software Documentation to End-Users for use pursuant to such sub-licences; and
	 
	 	 
	3.1.4

	 	for the duration of this Agreement to modify any Software Documentation solely to the extent
reasonably necessary to tailor the Software Documentation to the Distributor’s market in the
Territory, provided that Company gives its prior written

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	 	approval (which shall not be unreasonably withheld, conditioned or delayed) of any and
all such modifications before Distributor provides them to any third party.
	 
	 	 
	3.2

	 	For the purposes of Clause 3.1 above “use” shall include any act which is reasonably
incidental to such use, including (without limitation) the maintenance of a reasonable number
of back-up or test copies of the UK Core Software and the copying of any manuals or documents
relating to the use of the Software, provided that any and all copyright notices and other
proprietary rights notices are reproduced on each copy.
	 
	 	 
	3.3

	 	The Distributor agrees that it shall not, and shall not permit any other party to, reverse
engineer, decompile, disassemble, adapt, or modify any of the Software Materials, except as
specifically permitted by this Agreement or by applicable law but then only if and to the
extent that the Distributor first (i) notifies the Company of Distributor’s requirements
regarding interoperability or functional compatibility before engaging in any of the
enumerated actions, and (ii) gives the Company the opportunity to provide the Distributor with
the information necessary to achieve such interoperability or compatibility.
	 
	 	 
	3.4

	 	In consideration for the payment of the fees referred to in Clause 7.1, the Company hereby
grants the Distributor an exclusive licence to use the Mark in the Territory in the promotion,
distribution, and sub-licensing of the UK Core Software, whether alone or in conjunction with
the Distributor’s own trademarks or logos.
	 
	 	 
	3.5

	 	The Distributor acknowledges and agrees that any and all uses of the Mark pursuant to this
Agreement and all goodwill and benefit arising from such use shall inure to the Company’s sole
and exclusive benefit, and the Distributor hereby assigns all such goodwill to the Company to
hold absolutely. Whenever it uses the Mark, the Distributor shall comply in all material
respects with the Mark Usage Requirements.
	 
	 	 
	3.6

	 	The Parties agree to operate with regard to the Escrow Agreement as follows:
	 
	 	 
	3.6.1

	 	the Company and the Distributor mutually undertake to execute the Escrow Agreement promptly
following execution of this Agreement. The Company undertakes to procure that the Escrow
Agent executes the Escrow Agreement within three weeks of the date of this Agreement (as to
which time shall be of the essence), and the Company will procure that a certified copy of the
Escrow Agreement as executed by the Company, Distributor and the Escrow Agent will be provided
to the Distributor as soon as reasonably practicable after the execution by the Escrow Agent
of the Escrow Agreement;
	 
	 	 
	3.6.2

	 	the Company and the Distributor mutually undertake to abide by the terms of the Escrow
Agreement; and
	 
	 	 
	3.6.3

	 	upon the release by the Escrow Agent of the source code of the Software to the Distributor
in accordance with the Escrow Agreement:

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	 	(i)
	 	the Distributor shall cease paying any Revenue Share Fees to the
Company; and
	 
	 	 	 	 
	 

	 	(ii)
	 	the Distributor will pay the Company quarterly from the date of such
release for the duration of this Agreement (each such quarter an “Escrow Quarter”)
a sum (the “Escrow Royalty”). The Escrow Royalty shall be the US$ Equivalent of
[***]% of the total Licence Fees Revenue received by the Distributor in the Escrow
Quarter to which the Escrow Royalty relates provided that where over four
consecutive Escrow Quarters (such four Escrow Quarters, an “Escrow Year”) the total
Escrow Royalties payable for such Escrow Year exceed £[***], the Escrow Royalties
payable for that Escrow Year shall be the US$ Equivalent of £[***].
	 
	 	 	 	 
	4.	 	ENHANCEMENTS
	 
	 	 	 	 
	4.1	 	For the duration of this Agreement the Company shall:-
	 
	 	 	 	 
	4.1.1	 	keep the Distributor informed as soon as reasonably practicable of any planned or actual
technical or business developments, whether of the Company or of any relevant third party,
that may in the reasonable opinion of the Company be likely to affect the UK Core Software;
	 
	 	 	 	 
	4.1.2	 	inform the Distributor as soon as reasonably practicable of any planned or completed
Releases;
	 
	 	 	 	 
	4.1.3	 	make available to the Distributor, subject to the terms, conditions, and limitations of this
Agreement, any Releases, by not later than 2 months following the date that the Company makes
such Releases available to any of its US distributors or licensees of the Software;
	 
	 	 	 	 
	4.1.4	 	offer to the Distributor the opportunity to examine:-
	 
	 	 	 	 
	 

	 	(i)
	 	any Releases; and
	 
	 	 	 	 
	 

	 	(ii)
	 	any tests or results of tests of such Releases that the Company may
carry out, or may have carried out, which tests and test results shall be
considered Confidential Information of the Company;

	 	 	 
	4.1.5

	 	at the Distributor’s request supply to Distributor any Releases made available to
Distributor pursuant to Clause 4.1.2, together with the Source Materials for such Releases and
updated Software Documentation for the UK Core Software as upgraded or altered by such
Release. For the avoidance of doubt, in the event that the Distributor decides to acquire and
install any Release supplied in accordance with this Clause 4.1.5, the Distributor shall have
read-only access to the source code of that Release for the purpose of developing or further
developing any Distributor Software).
	 
	 	 
	4.2

	 	If the Company makes a Release available to the Distributor, and the Distributor decides not
to acquire and install such Release, then such decision shall not give rise to

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	 	any right to terminate this Agreement, nor shall it result in any adverse effect on the
performance of the Company’s obligations under this Agreement, unless Company
demonstrates that the failure to install the Release materially adversely affects the
performance of, or the Company’s ability to support, the Software Materials.
	 
	 	 
	4.3

	 	All Releases shall, at the option of the Distributor, be subject to the Acceptance Tests
detailed at Clause 9. Upon Formal Acceptance, such Releases shall be subject to the
provisions of this Agreement and (together with any Releases supplied and installed by the
Distributor but not subjected to the Acceptance Tests detailed at Clause 9) shall benefit from
the Maintenance Services.
	 
	 	 
	4.4

	 	The Company shall supply all Releases to the Distributor without additional charge and the
consideration for the supply of such Releases shall form part of the fees payable by the
Distributor to the Company pursuant to the terms of Clause 7.2.
	 
	 	 
	5.

	 	MAINTENANCE SERVICES
	 
	 	 
	5.1

	 	In consideration of the payments referred to in Clause 7.2, the Company shall provide the
Maintenance Services from the Acceptance Date in accordance with the provisions set out in
Service Level Agreement for the term of this Agreement. Notwithstanding anything else in this
Clause 5 or this Agreement to the contrary, however, the Company shall only be required to
provide Maintenance Services to the Distributor with respect to the two most recent Releases
or versions of the Software Materials (and for the avoidance of doubt no Release or version of
the Software Materials shall be deemed a recent Release or version of the Software Materials
unless that Release or version has passed the Acceptance Tests detailed at Clause 9).
	 
	 	 
	5.2

	 	In the event of a default, problem or error in the UK Core Software:-
	 
	 	 
	5.2.1

	 	all requests from the Distributor for the provision of Maintenance Services shall be made in
accordance with the Service Level Agreement; and
	 
	 	 
	5.2.2

	 	the Company shall perform such Maintenance Services in accordance with the response
requirements set out in the Service Level Agreement.
	 
	 	 
	5.3

	 	For the purposes of correcting any default, problem or error in the UK Core Software, the
Distributor acknowledges that the Company shall have the right to access the UK Core Software
remotely and will provide such reasonable assistance as the Company shall from time to time
require in connection with such access, subject to the Company adhering to the security and
access arrangements of the Distributor as notified to the Company in advance and from time to
time. Any and all corrections to the Software Materials will be made in general Maintenance
Releases.
	 
	 	 
	5.4

	 	The Company shall not be responsible for correcting problems or errors in the UK Core
Software resulting from any Distributor Software.
	 
	 	 
	5.5

	 	Unless otherwise agreed, any documentation, reports, studies, data, diagrams, materials,
software or computer programmes made available to the Distributor as part

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	 	of the Maintenance Services will be provided within the charges detailed at Clause 7.2,
and the Company shall not be entitled to any additional fee, royalty or other payment
for making such materials available to the Distributor.
	 
	 	 
	5.6

	 	The Company warrants, represents, and undertakes to the Distributor that, in performing the
Maintenance Services, all adjustments, adaptations, customisation, provision of Releases, or
other such Modifications by the Company which take place after the initial installation shall
become non-separable parts of the UK Core Software and shall thus entitle the Distributor to
the same level of support and other services as are applicable to the previously installed
parts of the UK Core Software.
	 
	 	 
	6.

	 	DURATION
	 
	 	 
	6.1

	 	This Agreement shall commence and take effect on the date first stated above and shall
continue thereafter until terminated in accordance with the provisions of this Agreement.
	 
	 	 
	6.2

	 	This Agreement may be terminated:-
	 
	 	 
	6.2.1

	 	by the Company by the giving of not less than 12 months notice in writing to the Distributor
provided that such notice may only be given on or after the fourth anniversary of the
Acceptance Date;
	 
	 	 
	6.2.2

	 	by the Distributor by the giving of not less than 12 months notice in writing to the Company
provided that such notice may only be given on or after the second anniversary of the
Acceptance Date;
	 
	 	 
	6.2.3

	 	by either Party in accordance with the provisions of Clause 20.
	 
	 	 
	6.3

	 	Save as expressly provided in this Clause 6, neither Party shall have the right to terminate
this Agreement at anytime.
	 
	 	 
	6.4

	 	The Parties shall meet to review the operation of the Agreement, such meetings to occur at
least twice in each Year (or as the Parties may otherwise agree). The designation of the
locations of the meetings shall alternate between the Parties (acting reasonably), the
location of the first meeting to be determined by the Distributor. Each Party shall be
responsible for all travel and accommodation costs of its own staff or representatives
attending such meetings.
	 
	 	 
	6.5

	 	For the term of this Agreement and for a period of one (1) year thereafter, Distributor shall
not either directly or indirectly, including without limitation through any Affiliates,
agents, distributors, partners or any third parties, license, sub-license, market, distribute,
sale or contract to support any software products competitive with the Software PROVIDED THAT
the restriction in this Clause 6.5 shall not apply to any holding company of the Distributor
or any subsidiary of such holding company (excepting the Distributor itself) and shall in no
way prevent the Distributor acting solely as a licensee of any such software product. This
provision is intended to restrict the Distributor only to the extent necessary to protect the
Company’s legitimate

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	 	interests, and the Distributor agrees that its terms are reasonable. If a court of
competent jurisdiction concludes that any provision of this Clause is too restrictive,
such provision will remain valid and enforceable to the fullest extent determined to be
reasonable.
	 
	 	 
	7.

	 	PAYMENTS
	 
	 	 
	7.1

	 	In consideration of the licence of the Software Materials and the Mark and of all other
rights and interests granted to the Distributor under or pursuant to the terms of this
Agreement, the Distributor will make payment to the Company in accordance with Appendix C.
	 
	 	 
	7.2

	 	The payments referred to in Clause 7.1 shall be paid by bank transfer to such bank account as
the Company may notify in writing to the Distributor, such notification to be given by the
Company to the Distributor at least three days prior to the due date of payment referred to in
Clause 7.1.
	 
	 	 
	7.3

	 	The payments referred to in Clause 7.1 shall be the amount payable to the Company, net of all
taxes levied by any United Kingdom taxing authority, of whatsoever nature, including but not
limited to Value Added Tax (VAT).
	 
	 	 
	7.4

	 	The Parties agree that the payments referred to in Clause 7.1 (or, if applicable, any Escrow
Royalty payable in accordance with Clause 3.6.3) constitute all of the payments due to the
Company in respect of all of the rights and licenses granted to the Distributor under this
Agreement. Without prejudice to the foregoing, the Company agrees that no royalties,
commissions, or similar payments shall be due or payable by the Distributor to the Company,
whether by reference to the fees and payments which the Distributor receives from licensees or
otherwise.
	 
	 	 
	7.5

	 	The Distributor shall be free to fix its own licence fees and annual support charges with
licensees in respect of each End-User Agreement and any additional delivery, implementation
and training fees.
	 
	 	 
	7.6

	 	If the Distributor fails to make any payment to the Company under this Agreement on the due
date then, without prejudice to any other right or remedy available to the Company, the
Company shall be entitled to receive from the Distributor interest on the amount outstanding
on a daily basis at the rate of [***] per cent ([***]%) per annum above the base rate of
Barclays Bank plc from time to time in force, such interest to be calculated from the date or
last date for payment thereof to the date of actual payment (both dates inclusive). The
provisions of this Clause 7.6 shall not apply to the payment to be made by the Distributor in
accordance with Clause 7.1 to the extent that the Company fails to notify the Distributor of
bank account payment details in accordance with Clause 7.2.
	 
	 	 
	7.7

	 	The Distributor shall furnish to the Company, at the same time the Distributor makes payment
of Revenue Share Fees, a full and complete statement, duly certified by an officer of the
Distributor to be true and accurate, showing the number of End-User

12

 

	 	 	 
	 

	 	Agreements entered into during the Quarter Period at issue, the gross license fees for
each End-User Agreement (including details of the number of concurrent users referred to
in each such agreement), any value added tax applicable to each End User Agreement, the
Revenue Share Fee payable to the Company for each End User Agreement, and the total
Revenue Share Fees payable to the Company on all End User Agreements for that period.
	 
	 	 
	8.

	 	CUSTOMISED VERSION
	 
	 	 
	8.1

	 	The Company agrees that it shall at its sole cost and expense as soon as reasonably
practicable and at any rate not later than 8 months after the date of execution of this
Agreement:-
	 
	 	 
	8.1.1

	 	convert the Software to meet the requirements of the Specification set forth in Appendix B;
and
	 
	 	 
	8.1.2

	 	provide Software Documentation in a form reasonably acceptable to the Distributor (acting in
good faith and without delay).
	 
	 	 
	8.2

	 	As part of the works referred to in Clause 8.1 the Company shall integrate the Customer
Relationship Management Product into the UK Core Software.

	 	 	 	 	 
	8.3	 	The Distributor may at its own cost and expense develop Distributor Software to interface
with the UK Core Software including, but without limitation, such that the UK Core Software
contains the following:-
	 
	 	 	 	 
	 

	 	(a)
	 	Postal Address Files
	 
	 	 	 	 
	 

	 	(b)
	 	BACS Files
	 
	 	 	 	 
	 

	 	(c)
	 	CAP Files
	 
	 	 	 	 
	 

	 	(d)
	 	Links with vehicle manufacturers marketing in the UK
	 
	 	 	 	 
	 

	 	(e)
	 	such other files as the Distributor may from time to time reasonably
consider to be necessary.
	 
	 	 	 	 
	8.4	 	All right, title, and interest, including (without limitation) Intellectual Property Rights,
in and to any Distributor Software shall vest in and be the absolute property of the
Distributor. All right, title, and interest, including (without limitation) Intellectual
Property Rights, in and to any Modifications shall vest in and be the absolute property of the
Company.
	 
	 	 	 	 
	9.	 	ACCEPTANCE TESTS

	 	 	 
	9.1

	 	The Company and the Distributor shall use all reasonable endeavours and act in good faith to
agree to changes to the Specification as soon as reasonably practicable after the date of this
Agreement. As part of this obligation, at the Distributor’s request and

13

 

	 	 	 
	 

	 	(in the case of any travel and accommodation costs reasonably and properly incurred)
expense, the Company shall as soon as reasonably practicable after the date of this
Agreement send personnel to the UK to meet and discuss with the Distributor the
modifications required to be made to the Software in order to create the Test Version of
the UK Core Software (any and all such changes, the “UK Core Software Changes”). Each
such modification shall require the Distributor’s prior consent (such consent not to be
unreasonably withheld or delayed). Any changes made to the Specification (other than
any UK Core Software Change) may result in additional charges to the Distributor. The
Distributor acknowledges that the payment schedule set forth in Appendix C is based on
the current Specification only, as the same shall include the specification for the UK
Core Software created in the development of the UK Core Software Changes in accordance
with this Clause 9.1.
	 
	 	 
	9.2

	 	Following the making of any changes to the Specification in accordance with Clause 9.1, the
Company shall proceed to develop the Test Version of, and the Software Documentation for, the
UK Core Software which the Company is to deliver to the Distributor.
	 
	 	 
	9.3

	 	The Distributor shall install the relevant Test Version at the Location in order for the
acceptance testing to be carried out to determine that the Test Version conforms with the
Specification or, in the case of a Release, that the Release performs the function it is
designed to do and that the UK Core Software as modified or replaced by such Release conforms
with the Specification.
	 
	 	 
	9.4

	 	The Company will carry out the acceptance of testing upon the Test Version installed at the
Location pursuant to Clause 9.3. When such testing establishes that the UK Core Software
complies with the Specification, the Distributor will within 5 days confirm this in writing to
the Company and the relevant software will thereupon achieve Formal Acceptance.

	 	 	 	 	 
	9.5	 	If the Test Version of the UK Core Software fails to achieve Formal Acceptance by
31st January 2007 (or such later date as the Parties may agree) (the “UK Core
Software Test Date”), the Distributor shall have the right to either:
	 
	 	 	 	 
	 

	 	(a)
	 	require the Company to use reasonable endeavours to carry out (at its
own expense) such remedial work as is necessary for the Test Version of the UK Core
Software to achieve Formal Acceptance and to resubmit the Test Version of the UK
Core Software for testing when it has done so; or
	 
	 	 	 	 
	 

	 	(b)
	 	terminate this Agreement and recover all sums previously paid to the
Company forthwith on demand.

	 	 	 
	9.6

	 	If the Distributor chooses to require the Company to carry out further work in accordance
with Clause 9.5(a), it may stipulate a reasonable period (not exceeding 21 Business Days)
after the UK Core Software Test Date within which the Test Version of the UK Core Software
must achieve Formal Acceptance. If the Test Version of the UK Core Software fails to achieve
Formal Acceptance within such period, the

14

 

	 	 	 
	 

	 	Distributor shall be entitled to exercise either of its rights in Clauses 9.5(a) or (b)
and if the Distributor chooses to require the Company to carry out further work in
accordance with Clause 9.5(a), it may stipulate a further period (not exceeding 21
Business Days) thereafter within which the Test Version of the UK Core Software must
achieve Formal Acceptance. If the Test Version of the UK Core Software again fails to
achieve Formal Acceptance within such period, the Distributor shall be entitled to
continue exercise either of its rights under Clauses 9.5(a) or (b) and this Clause 9.6
until the Test Version of the UK Core Software achieves formal acceptance or this
Agreement is terminated.

	 	 	 	 	 
	9.7	 	If the Test Version of a Release fails to achieve Formal Acceptance within 3 months of the
date of delivery to the Distributor of such test version (or such later date as the Parties
may agree) (the “Test Date”), the Distributor shall have the right to either:
	 
	 	 	 	 
	 

	 	(a)
	 	require the Company to use best endeavours to carry out (at its own
expense) such remedial work as is necessary for relevant Test Version to achieve
Formal Acceptance and to resubmit the relevant Test Version for testing when it has
done so; or
	 
	 	 	 	 
	 

	 	(b)
	 	terminate this Agreement and to recover all sums previously paid to the
Company forthwith on demand.

	 	 	 	 	 
	9.8	 	If the Distributor chooses to require the Company to carry out further work in accordance
with Clause 9.7(a), it may stipulate a reasonable period (not exceeding 21 Business Days)
after the Test Date within which the relevant Test Version must achieve Formal Acceptance. If
the relevant Test Version fails to achieve Formal Acceptance within such period, the
Distributor shall be entitled to exercise either of its rights in Clauses 9.7(a) or (b) and if
the Distributor chooses to require the Company to carry out further work in accordance with
Clause 9.7(a) it may stipulate a further period (not exceeding 21 Business Days) thereafter
within which the relevant Test Version must achieve Formal Acceptance. If the relevant Test
Version again fails to achieve Formal Acceptance within such period, the Distributor shall be
entitled to continue to exercise either of its rights under Clauses 9.7(a) or (b) and this
Clause 9.8 until the relevant Test Version achieves formal acceptance or this Agreement is
terminated.
	 
	 	 	 	 
	9.9	 	Within thirty (30) days after Formal Acceptance of the UK Core Software and of any subsequent
Releases, the Company shall provide the Distributor with one copy of the Source Materials
relating to the software in respect of which such Formal Acceptance relates which shall be
held by the Distributor at the Location.
	 
	 	 	 	 
	9.10	 	The Distributor shall use the Source Materials relating to the UK Core Software solely for
the purposes of:
	 
	 	 	 	 
	 

	 	(a)
	 	providing the support services to End-Users;

15

 

	 	 	 	 	 
	 

	 	(b)
	 	analysis to determine the correct interfaces between any other programs
supplied by the Distributor and the UK Core Software; and
	 
	 	 	 	 
	 

	 	(c)
	 	in accordance with the provisions of Clause 3;
	 
	 	 	 	 
	 	 	and shall only make such number of copies as is reasonably necessary for those purposes.

	 	 	 
	10.

	 	END-USER AGREEMENTS
	 
	 	 
	10.1

	 	The Distributor shall make the Software Materials only available to third parties who have
signed an End-User Agreement with the Distributor.
	 
	 	 
	10.2

	 	The Distributor shall not solicit End-Users in any territory other than the Territory.
	 
	 	 
	10.3

	 	The Distributor shall ensure that each End-User Agreement contains the following provisions
(each of which may, in respect of any End-User Agreement, only be varied with the Company’s
prior request):-
	 
	 	 
	10.3.1

	 	the End-User shall be granted a personal, non exclusive, non transferable, licence to access
and to use the End-User Software solely for the End-User’s internal use and solely at the
End-User’s premises through an application service provider and not otherwise;
	 
	 	 
	10.3.2

	 	the End-User acknowledges that (a) the End-User Software and any Software Documentation, any
copies thereof, and any media on which they are provided are licensed to the End-User, not
sold: (b) it obtains no ownership of the End-User Software or Software Documentation, any
copies thereof, or any media on which they are provided; (c) it does not have any rights to
any Source Materials; (d) it has no Intellectual Property Rights in the End-User Software or
in any Software Documentation supplied to the End-User and that all such Intellectual Property
Rights shall remain the property of the Distributor or its licensors, and (e) it has no rights
in or to the End-User Software or the Software Documentation, any copies thereof, or any media
on which they are provided, other than its rights as a licensee to use them in accordance with
the terms of the End-User Agreement;
	 
	 	 
	10.3.3

	 	the End-User shall have no right to copy, sell, assign, sub-licence, rent, loan or otherwise
transfer the End-User Software or Software Documentation to any other person;
	 
	 	 
	10.3.4

	 	the End-User acknowledges that, in addition to material and elements that are protected by
copyright law, the End-User Software embodies or contains confidential and commercially
valuable information and trade secrets that are proprietary to Distributor and its licensors
and protected by law (“Proprietary Information”), which may include (without limitation)
computer code, program architecture, program flow information, design definitions, design
specifications, data structures, data compilations, techniques, interfaces, calculations,
symbologies, formulas, algorithms, and other features of the End-User Software, and the
End-User shall have no right (and

16

 

	 	 	 
	 

	 	shall not permit any third party) to adapt, reverse engineer, decompile, disassemble,
modify or make error corrections to the End-User Software or make derivative works based
upon the End-User Software;
	 
	 	 
	10.3.5

	 	the End-User agrees to use all reasonable endeavours to protect the End-User Software and
the Proprietary Information it contains from unauthorised access, use, copying, and
disclosure;
	 
	 	 
	10.3.6

	 	the End-User agrees to provide prompt written notice to the Distributor of any unauthorised
use, copying, or disclosure of the End-User Software;
	 
	 	 
	10.3.7

	 	the End-User Software is not designed, manufactured, or intended for use in environments
requiring fail-safe performance;
	 
	 	 
	10.3.8

	 	the Distributor makes no warranty in regard of the Software or the UK Core Software except
as expressly set forth in Appendix F to this Agreement. To the maximum extent permitted by
law, and except for the warranties expressly set forth in Appendix F to this Agreement, the
Distributor disclaims in the End-User Agreement any and all other warranties and conditions
relating to the Software or Core Software, whether express, implied or statutory, including
but not limited to implied warranties (if any) of merchantability, fitness for a particular
purpose and satisfactory quality;
	 
	 	 
	10.3.9

	 	the Distributor will limit its liability in accordance with Appendix F to this Agreement;
and
	 
	 	 
	10.3.10

	 	the Distributor shall have the right on notice to the End-User to novate, assign or
otherwise transfer any of its rights or obligations under the End-User Agreement to such third
party as it sees fit including, but without limitation, the Company.
	 
	 	 
	11.

	 	TRAINING
	 
	 	 
	11.1

	 	Following execution of the Agreement and upon dates to be agreed by the Parties (using
reasonable endeavours and acting in good faith), the Company recommends and agrees to provide:
	 
	 	 
	11.1.1

	 	up to 160 hours of training on the Software for each nominated employee or agent of the
Distributor, up to a maximum group of three (3). Training shall be at the Company’s location
in Utah and shall consist of end user installation and support training. The training shall
be tailored to the reasonable needs of the Distributor and shall include classroom
instruction, taking actual support calls from end users, and participation in actual
installations of the Software at end user locations; and
	 
	 	 
	11.1.2

	 	up to 40 hours of ongoing end user support training for each nominated employee or agent of
the Distributor, up to a maximum group of three (3), at the Company’s Utah location during
each calendar quarter following Formal Acceptance. Such training shall be tailored to the
reasonable needs of the Distributor and shall include training on enhancements and
modifications made to the Software;

17

 

	 	 	 	 	 
	11.1.3	 	further training, upon the Distributor’s reasonable request and beyond the scope of the
training referred to in Clauses 11.1.1 and 11.1.2 above, to allow individual members of the
Distributor’s staff to have practical experience of sales and customer implementations.
	 
	 	 	 	 
	11.2	 	The training covered by Clauses 11.1.1 and 11.1.2 shall be at no charge to Distributor.
However, the Distributor shall be responsible for all related living and travel expenses for
its employees or agents to participate in the training.
	 
	 	 	 	 
	11.3	 	It is recommended by the Company, but not required, that the Distributor employ a software
engineer to reside at the Company’s location to facilitate better communication with the
Company’s software engineers and the timely development of enhancements to the UK Core
Software. The Company will make suitable workspace available to such software engineer at no
charge. The Distributor shall be responsible for all other requirements and expenses
associated with any such software engineer, including (without limitation) wages or salary,
benefits, payroll taxes, travel costs, living expenses, and office furnishings and equipment.
	 
	 	 	 	 
	12.	 	DISTRIBUTOR’S OBLIGATIONS
	 
	 	 	 	 
	12.1	 	The Distributor shall:
	 
	 	 	 	 
	12.1.1	 	not by itself or with others participate in any illegal, deceptive, misleading or unethical
practices including, but not limited to, disparagement of the Software or the Company or other
practices which may be detrimental to the Software, the Company or the public interest;
	 
	 	 	 	 
	12.1.2	 	except as expressly set forth in Appendix F to this Agreement, not make any promises or
representations or give any warranties, guarantees or indemnities in respect of the Software
Materials on behalf of the Company;
	 
	 	 	 	 
	12.1.3	 	use the Mark only in connection with the UK Core Software and not use the Mark, or any
confusingly similar name or mark, in connection with any other products or services or as part
of the corporate or any trade name of the Distributor;
	 
	 	 	 	 
	12.1.4	 	follow the Mark Usage Requirements;
	 
	 	 	 	 
	12.1.5	 	use reasonable endeavours to ensure that any Distributor Software distributed with the UK
Core Software is of high quality and properly performs its intended and stated functions and
that the services the Distributor provides in connection with the UK Core Software are
performed in a competent and professional manner in accordance with software industry
standards;
	 
	 	 	 	 
	12.1.6	 	use reasonable endeavours to cooperate with the Company in facilitating its control and
monitoring of the quality of the Software offered under the Mark;
	 
	 	 	 	 
	12.1.7	 	at the Company’s request, provide all reasonable assistance to the Company to register the
Mark, at the Company’s expense, in the Territory;

18

 

	 	 	 	 	 
	12.1.8	 	not alter, obscure, remove, interfere with, or add to any of the trade marks, trade names,
markings, or copyright or other proprietary rights notices affixed to or contained in the
Software Materials delivered to the Distributor;
	 
	 	 	 	 
	12.1.9	 	permit the Company and its authorised agents upon reasonable prior written notice to enter
any of the Distributor’s premises during the Distributor’s normal business hours for the
purpose of ascertaining that the Distributor is complying with its obligations under this
Agreement (and so that the Distributor hereby irrevocably licenses the Company, its employees
and agents to enter any such premises for such purpose);
	 
	 	 	 	 
	12.1.10	 	not knowingly take any action or permit any other person to take any action which infringes
any of the Company’s Intellectual Property Rights in any of the Software Materials or in the
Mark;
	 
	 	 	 	 
	12.1.11	 	for the duration of this Agreement and for three (3) years thereafter but solely for the
purpose of allowing the Company to take reasonable steps to verify the amount of the Revenue
Share Fee, (a) keep reasonably complete and accurate books of account and copies of all
documents and other material relating to this Agreement at its principal office; (b) allow the
Company, by its duly authorised agents and representatives, on reasonable prior notice, to
audit such books, documents, and other material, during the Distributor’s ordinary business
hours, and to make reasonable copies of such books, documents, and other material; (c) at the
Company’s reasonable request, provide an authorised employee to assist in the examination of
Distributor’s records; and (d) if any audit of the Distributor’s books and records reveals
that the Distributor has failed properly to account for and pay Revenue Share Fees owing to
the Company, and the amount of Revenue Share Fees that the Distributor has failed properly to
account for and pay for any Quarterly Period exceeds, by five percent (5%) or more, the
Revenue Share Fees actually accounted for and paid to the Company for such period, the
Distributor shall, in addition to paying the Company such past due Revenue Share Fees, with
interest as provided in clause 7.6, reimburse the Company for the reasonable professional fees
and direct out-of-pocket expenses actually and properly incurred in conducting such audit.
	 
	 	 	 	 
	13.	 	COMPANY’S OBLIGATIONS
	 
	 	 	 	 
	13.1	 	For the duration of this Agreement, the Company shall:-
	 
	 	 	 	 
	13.1.1	 	use reasonable endeavours to provide the Distributor with such marketing and technical
assistance as is reasonably necessary and as mutually agreed to assist the Distributor with
the promotion of the UK Core Software;
	 
	 	 	 	 
	13.1.2	 	endeavour to answer as soon as reasonably possible all technical queries raised by the
Distributor concerning the use or application of the UK Core Software;
	 
	 	 	 	 
	13.1.3	 	provide the Distributor with an electronic copy of any promotional literature relating to
the Software which the Company may produce from time to time;

19

 

	 	 	 	 	 
	13.1.4	 	promptly maintain and update the Software Documentation to take into account any
modifications made to the Software by Releases and inform the Distributor of all such changes
so that the Distributor can make corresponding amendments to the Software Documentation in
respect of the UK Core Software;
	 
	 	 	 	 
	13.1.5	 	without prejudice to the provisions of Clause 6.2.1 (whereby the Company must give not less
than 12 months notice in writing, such notice in any case only to be given on or after the
fourth anniversary of the Acceptance Date), give the Distributor reasonable advance written
notice of any material changes in or modifications of the Software or of the Company’s
intention to discontinue licensing or sub-licensing the Software in the Territory; and
	 
	 	 	 	 
	13.1.6	 	provide the Distributor with all information and assistance reasonably necessary to enable
the Distributor properly to perform its obligations hereunder in respect of any modified,
enhanced or replacement version of or addition to the Software.
	 
	 	 	 	 
	14.	 	WARRANTIES AND INDEMNITIES
	 
	 	 	 	 
	14.1	 	The Company warrants, represents and undertakes to the Distributor that:
	 
	 	 	 	 
	14.1.1	 	it has all necessary skill, care and expertise required to provide the UK Core Software and
the Services on the terms set out herein;
	 
	 	 	 	 
	14.1.2	 	the Company will make available suitably qualified staff in the quantities and of seniority
levels reasonably required, to perform the Services in accordance with the terms of this
Agreement;
	 
	 	 	 	 
	14.1.3	 	the Company has obtained and will obtain and maintain in the future consents from any third
parties which are reasonably required for performance of its obligations under this Agreement;
	 
	 	 	 	 
	14.1.4	 	the Services will be provided in a professional manner in accordance with software industry
standards; and
	 
	 	 	 	 
	14.1.5	 	the Company is a corporation duly organised, validly existing and in good standing under the
laws of Delaware and has full corporate power and authority to conduct its business as such
business is now being conducted and to enter into this Agreement;
	 
	 	 	 	 
	14.1.6	 	that the Company is the owner of U.S. Registration No. 2,301,459 for the Mark;
	 
	 	 	 	 
	14.2	 	Further the Company warrants, represents and undertakes to the Distributor that:
	 
	 	 	 	 
	14.2.1	 	with effect from the Acceptance Date the UK Core Software will function in accordance with
the Specification when installed and used in accordance with the Software Documentation;

20

 

	 	 	 	 	 
	14.2.2	 	any Release will function as it is designed to do and that the UK Core Software as modified
or replaced by such Release will conform with the Specification when installed and used in
accordance with the Software Documentation;
	 
	 	 	 	 
	14.2.3	 	so far as the Company is aware, having taken all reasonable precautions, the UK Core
Software and any and all Releases and any media on which such software is delivered are, as
delivered to Distributor, free from all viruses and other malware, including but not limited
to any codes or instructions that may be or will be used to access, modify, delete or damage
any data files or other computer programs used by the Distributor or any End-User;
	 
	 	 	 	 
	14.2.4	 	the Company will, prior to delivery of the UK Core Software and any Releases, use the most
comprehensive and up-to-date virus checker on such the UK Core Software and/or any Releases;
	 
	 	 	 	 
	14.2.5	 	the UK Core Software and each and every Release shall meet the requirements of the
Specification when installed and used in accordance with the Software Documentation;
	 
	 	 	 	 
	14.2.6	 	none of the Software Materials or Releases supplied by the Company to the Distributor under
this Agreement will when used by the Distributor in the Territory in accordance with the terms
of this Agreement:
	 
	 	 	 	 
	 

	 	(a)
	 	place the Company in breach of any contractual obligations to any third
party, or
	 
	 	 	 	 
	 

	 	(b)
	 	place the Distributor in breach of any proprietary rights or
Intellectual Property Rights of any third party;
	 
	 	 	 	 
	14.2.7	 	in the event that England ceases to use its national unit of currency and begins to use the
Euro as its national unit of currency under European Monetary Union:
	 
	 	 	 	 
	 

	 	(i)
	 	the UK Core Software will continue to function effectively and in
conformity with the Specification when installed and used in accordance with the
Software Documentation;
	 
	 	 	 	 
	 

	 	(ii)
	 	the UK Core Software, as modified by any upgrades, will have the
appropriate Euro symbol built into it and use of such symbol will not detrimentally
affect the functioning of the UK Core Software.
	 
	 	 	 	 
	14.3	 	In the event that the Company receives written notification from the Distributor of any
breach of the warranties set out in Clauses 14.2, the Company shall as soon as reasonably
possible and in any event within 30 days of the date of such notification and at its own
expense use best endeavours to remedy the same. The Distributor shall reasonably cooperate
with the Company, at no out-of-pocket cost to the Distributor, in remedying the alleged
breach, including but not limited to providing reasonably sufficient information to the
Company to enable it to isolate and correct any claimed non-compliance of the UK Core Software
with the Specification.

21

 

	 	 	 	 	 
	14.4	 	The warranties in Clause 14.2 shall equally apply to the UK Core Software as it may be
modified, enhanced or replaced by any Releases and shall thereafter continue to apply to the
UK Core Software following the implementation of any such Releases.
	 
	 	 	 	 
	14.5	 	The Distributor shall follow good practice and the reasonable guidance of the Company given
from time to time on matters of house-keeping and shall engage in the regular taking of
back-ups so as to minimise the risk of loss or failure from any fault in or failure of the UK
Core Software.
	 
	 	 	 	 
	14.6	 	Subject to the terms, conditions and limitations of this Agreement, the Company shall
indemnify and at all times keep indemnified the Distributor against any and all claims,
liabilities, costs, charges, losses and/or expenses (including without limitation reasonable
legal expenses) (collectively and individually “Claims”) arising out of any of the warranties
set out in Clauses 14.1 and 14.2 being breached or untrue at any time after the date of this
Agreement and the Company shall further indemnify and at all times keep indemnified the
Distributor against Claims made against the Distributor by End-Users or other third parties
arising from Clause 14.2 (with the exception of any Claims made against the Distributor by
End-Users or other third parties arising from Clause 14.2.6) being breached or untrue with
respect to the UK Core Software or any Modifications which are supplied by the Distributor to
End-Users in the Territory. Notwithstanding the foregoing, the Company shall not be liable
nor shall it indemnify the Distributor against any Claims arising from the Distributor
Software.
	 
	 	 	 	 
	14.7	 	The Distributor hereby warrants, represents, and undertakes to the Company that:
	 
	 	 	 	 
	14.7.1	 	the Distributor is a corporation duly organised, validly existing and in good standing under
the laws of England and Wales and has full corporate power and authority to conduct its
business as such business is now being conducted and to enter into this Agreement;
	 
	 	 	 	 
	14.7.2	 	the Distributor has all necessary skill, care, resources, personnel, and expertise
reasonably required to perform this Agreement;
	 
	 	 	 	 
	14.7.3	 	the Distributor’s performance of this Agreement will not conflict with or violate any (a)
provision of any law, rule or regulation to which Distributor is subject, or (b) instrument
applicable to Distributor or binding upon its assets or properties;
	 
	 	 	 	 
	14.7.4	 	any specifications that the Distributor provides to the Company for the purposes of the
creation of the UK Core Software will not cause the Company to be in breach of any
Intellectual Property Rights of any third party.
	 
	 	 	 	 
	14.8	 	Subject to the terms, conditions, and limitations of this Agreement, the Distributor shall
indemnify and hold the Company harmless from and against any and all Claims (including without
limitation reasonable legal expenses) asserted against or incurred by the Company arising out
of any of the representations and warranties set forth in Clause 14.7 being breached or untrue
at any time this Agreement is in effect.

22

 

	 	 	 	 	 
	14.9	 	The Party seeking indemnity under this Agreement shall (a) as soon as reasonably practicable,
notify the indemnifying Party in writing of any and all Claims as to which the indemnified
Party has notice and claims a right of indemnity under this Agreement: (b) not make any
admission as to liability or compromise or agree to any settlement of any such Claims, without
the prior written consent of the indemnifying Party, which consent shall not be unreasonably
withheld or delayed; (c) (upon the indemnifying Party providing adequate security to the
indemnified Party for the liability being indemnified) give the indemnifying Party the right
to control and defence and settlement of such Claims, including the right to select counsel to
defend against such Claims; and (d) provide the indemnifying Party, at the indemnifying
Party’s expense, with all reasonable assistance in connection with the defence and settlement
of such Claims.
	 
	 	 	 	 
	14.10	 	The Company makes no warranty or representation not expressly set forth in this Agreement.
To the maximum extent permitted by law, and except for the warranties expressly set forth
herein, the Company disclaims any and all other warranties and conditions, whether express,
implied, or statutory, including but not limited to implied warranties (if any) of
merchantability, fitness for a particular purpose and satisfactory quality.
	 
	 	 	 	 
	14.11	 	Neither Party shall be liable to the other Party for any indirect, consequential, punitive,
exemplary, or other special damages including without limitation loss of profits, business
data or opportunity, howsoever caused. Further, the parties’ liability under this Agreement
shall be limited to direct, objectively measured damages. The limitations of liability
contained in this Agreement shall apply (a) whether the liability arises in contract, tort
(including negligence or breach of statutory duty), misrepresentation or otherwise); (b)
notwithstanding any failure of essential purpose of any limited remedy provided herein; and
(c) even if such party knows or has reasons to know of the possibility of such damages.
	 
	 	 	 	 
	14.12	 	The Company shall not be liable nor shall it indemnify the Distributor against any Claims
arising from: (1) any fault or defect in, or failure to operate of, any Distributor Software
to the extent that the breach or liability would have been avoided but for such fault, defect
or failure to operate; (2) any modification of the Software Materials or Releases except for
Modifications made by the Company and delivered to the Distributor, to the extent that the
breach or liability would have been avoided but for the modification(s); or (3) any use or
distribution of the Software Materials or Releases that is not expressly authorised by this
Agreement.
	 
	 	 	 	 
	14.13	 	Subject to Clause 14.13, the aggregate liability of the Company to the Distributor under
this Agreement shall not exceed the total of the amounts actually paid by the Distributor to
the Company.
	 
	 	 	 	 
	14.14	 	Save for the provisions of Clauses 14.11 and 14.12, nothing shall operate to limit in any
way the financial liability of the Company to the Distributor for any claim which the
Distributor may have under this Agreement against the Company as a result of or in connection
with any claims by End Users and/or any Infringement Claim, as that

23

 

	 	 	 	 	 
	 	 	term is defined at Clause 16.5 against the Distributor (any and each such claim an “End
User or IP Claim”) PROVIDED THAT in the event of an End User or IP Claim the Distributor
and the Company will comply with the provisions of Clause 14.9 as if the End User or IP
Claim were a Claim.
	 
	 	 	 	 
	14.15	 	Each of the Distributor and the Company covenants and agrees that it will not, directly or
indirectly, solicit or endeavour to entice away from each other or hire any of its employees
for the duration of this Agreement and for six (6) months thereafter.
	 
	 	 	 	 
	15.	 	RIGHT OF FIRST REFUSAL
	 
	 	 	 	 
	15.1	 	The Company shall not enter and shall procure that none of its Affiliates enters into any
form of licence or distribution agreement pursuant to which the Company or such Affiliate
shall licence or distribute rights in the Software to be used in any of the Restricted
Territories unless and until the Company has given the Distributor the right to be the
distributor or licensee of such rights in the relevant Restricted Territory in accordance with
the provisions of this Clause 15.
	 
	 	 	 	 
	15.2	 	In the event that the Company or any of its Affiliates proposes to enter into any form of
licence or distribution agreement identified in Clause 15.1 the Company shall notify the
Distributor of the existence of such proposal. In the event that the Distributor notifies the
Company within 30 Business Days of the Distributor receiving notice from the Company pursuant
to this Clause 15.2 that it wishes to be the distributor or licensee of the Software in the
relevant Restricted Territory the Company shall grant the Distributor a period of not less
than 30 days (but not exceeding 90 days from the Company’s original notification of the
proposal to the Distributor) in which the Company and the Distributor acting in good faith,
shall use their respective reasonable endeavours to negotiate and agree to a distribution
agreement or licence for such Restricted Territory. If the Company and Distributor do not
agree to any such license or distribution agreement within that time period, the Company and
its Affiliates shall be free to enter into proposed licences or distribution agreements of the
type identified in Clause 15.1 in the Restricted Territory, and the Company shall have no
liability whatsoever to the Distributor in respect of the entry into such licence or
distribution agreement.
	 
	 	 	 	 
	15.3	 	The provisions of this Clause shall be binding on the Company and the Company shall procure
that each of it Affiliates shall be bound by the terms of this Clause save that in respect of
a Restricted Territory the provisions of this Clause shall not bind (a) the Company or any
such Affiliate to the extent that such entity supplies the Software or rights in the Software
directly to end-users in that Restricted Territory or (b) an Affiliate of the Company which
after the date of this Agreement acquires the Company and that Affiliate already has a
distributor for its software products in that Restricted Territory or supplies software
products directly to consumers or end-users in such Relevant Territory.
	 
	 	 	 	 
	16.	 	INTELLECTUAL PROPERTY RIGHTS

24

 

	 	 	 	 	 
	16.1	 	The Software Materials, all Source Materials relating to the Software, and the Intellectual
Property Rights therein or relating thereto are and shall remain the exclusive property of the
Company and all copies thereof in the Distributor’s possession, custody or control shall (to
the extent that they are not exhausted by proper use) be returned to the Company or otherwise
disposed of by the Distributor as the Company may from time to time direct.
	 
	 	 	 	 
	16.2	 	The Distributor acknowledges that the Company is the owner of the Mark and the Distributor
shall not:-
	 
	 	 	 	 
	16.2.1	 	dispute or challenge, or encourage or assist any other person to dispute or challenge, the
validity of the Mark, or the rights of the Company to the Mark; or
	 
	 	 	 	 
	16.2.2	 	apply for or obtain registration of the Mark, or any other mark confusingly similar thereto,
for any goods or services in any country.
	 
	 	 	 	 
	16.3	 	The Distributor shall notify the Company as soon as reasonably practicable if the Distributor
becomes aware of any unauthorised use of the Mark or any unauthorised access to, use, copying,
or disclosure of the Software Materials or the Source Materials relating to the Software or
any other breach of the Company’s Intellectual Property Rights therein or relating thereto and
will assist the Company to defend the Company’s rights therein in accordance with and subject
to Clause 16.8. Upon learning of such infringement, the Company shall have the right, but not
the obligation, at its sole discretion and expense, to take such action as the Company
considers necessary or appropriate to defend or enforce the Company’s Intellectual Property
Rights, including, without limitation, legal action to suppress or eliminate any infringement
or to settle any such dispute or action.
	 
	 	 	 	 
	16.4	 	The Distributor shall not use, reproduce or deal in the Software Materials or the Source
Materials relating to the Software or any copies thereof except as expressly permitted by this
Agreement.
	 
	 	 	 	 
	16.5	 	The Company undertakes to defend the Distributor from and against any claim or action that
the possession, use, sub-licensing, development, modification or maintenance of the Software,
the UK Core Software or any Releases (or any part thereof) or the Mark and/or the exercise by
the Distributor in the Territory of any rights granted to it by the Company under this
Agreement infringes the Intellectual Property Rights of a third party (“Infringement
Claim”). The Company hereby undertakes to fully indemnify and hold harmless the
Distributor from and against any losses, liabilities, damages, costs (including all legal
fees) and expenses in any way suffered or incurred by or awarded against the Distributor as a
result of or in connection with any such Infringement Claim (including without limitation all
losses incurred by it or in connection with End-User Agreements).
	 
	 	 	 	 
	16.6	 	The Distributor agrees that the requirements of Clause 14.10 shall apply to any claim for
indemnification with respect to any Infringement Claim.

25

 

	16.7	 	If any Infringement Claim is made, or in the Company’s reasonable opinion is likely to be
made, against the Distributor, the Company may at its sole option and expense:
	 
	16.7.1	 	procure for the Distributor the right to continue using, developing, modifying or
maintaining the UK Core Software (or any part thereof) in accordance with the terms of this
Agreement;
	 
	16.7.2	 	modify the UK Core Software so that it ceases to be infringing; or
	 
	16.7.3	 	replace the UK Core Software with non-infringing software;
	 
	 	 	provided that if the Company modifies or replaces the UK Core Software, the modified or
replacement UK Core Software must comply with the warranties contained in Clause 14.2
and the Specification and the Distributor shall have the same rights in respect thereof
as it would have had under those clauses had the references to the date of this licence
been references to the date on which such modification or replacement was made.
	 
	17.	 	CONFIDENTIALITY AND ANNOUNCEMENTS
	 
	17.1	 	The Distributor shall not use or divulge or communicate to any person (other than as
permitted by this Agreement or with the written authority of the Company):

	 	(a)	 	any of the Company’s Confidential Information which may come to the
Distributor’s knowledge during the continuance of this Agreement;
	 
	 	(b)	 	the Software Materials or any information concerning the same;
	 
	 	(c)	 	the Source Materials relating to the Software; or
	 
	 	(d)	 	any of the terms of this Agreement

	 	 	and the Distributor shall use all reasonable endeavours to prevent unauthorised access
to and the unauthorised use, copying, publication or disclosure of any such information,
materials or documents.
	 
	17.2	 	The Company shall not use or divulge or communicate to any person (other than with the
written authority of the Distributor):

	 	(a)	 	any of the Distributor’s Confidential Information which may come to the
Company’s knowledge during the continuance of this Agreement; or
	 
	 	(b)	 	any of the terms of this Agreement

	 	 	and the Company shall use all reasonable endeavours to prevent unauthorised access to
and the unauthorised use, copying, publication or disclosure of any such information,
materials or documents.

26

 

	17.3	 	The Distributor and the Company shall ensure that their respective employees are made aware
of and comply with the confidentiality and non-disclosure provisions contained in this Clause
17 and each of the Distributor and the Company shall indemnify the other against any loss or
damage which the other may sustain or incur as a result of any breach of confidence by any of
its employees.
	 
	17.4	 	If the Distributor or the Company becomes aware of any breach of confidence by any of its
respective employees it shall promptly notify the other and give the other Party all
reasonable assistance in connection with any proceedings which that Party may institute
against any such employees.
	 
	17.5	 	The provisions of this Clause shall survive the termination of this Agreement, but the
restrictions contained in Clauses 17.1 and 17.2 shall cease to apply to any information that
(a) comes into the public domain otherwise than through unauthorised disclosure, in the case
of Clause 17.1, by the Distributor or its employees or, in the case of Clause 17.2, by the
Company or its employees; (b) is received by the Distributor or the Company (as the case may
be) from a third party who does not breach a duty of confidence in disclosing it; (c) is
developed independently by the receiving Party: or (d) is required to be disclosed by law, by
any court of competent jurisdiction or any administrative or regulatory authority, provided
that, where permitted by law, the Party required to disclose the information provides the
other Party prior to written notice of the required disclosure.
	 
	17.6	 	The Parties shall issue a joint press announcement to announce the business relationship
established by this Agreement and shall jointly participate in such press events as they may
agree. Each Party may also issue its own press release subject to the prior approval of the
other Party (such approval not to be unreasonably withheld or delayed).
	 
	18.	 	CUSTOMER ENQUIRIES
	 
	18.1	 	The Distributor shall promptly forward to the Company any enquiries it may receive for the
Software from persons situated outside the Territory.
	 
	18.2	 	The Company shall refer to the Distributor any enquiry for the Software it may receive direct
from a potential licensee situated in the Territory.
	 
	19.	 	LEGAL RELATIONSHIP
	 
	19.1	 	During the continuance of this Agreement the Distributor shall be entitled to use the title
“SOLE UK DISTRIBUTOR OF THE ARKONA DEALER MANAGEMENT SYSTEM” and the Distributor shall only
use such title (whether on the Distributor’s business stationery, advertising material,
website or elsewhere) in accordance with the Mark Usage Requirements.
	 
	19.2	 	Nothing in this Agreement shall render either Party a partner, joint venturer, or agent of
the other Party and neither Party shall (except as expressly permitted or

27

 

	 	 	contemplated by this Agreement) purport to undertake any obligation on the other Party’s
behalf nor expose the other Party to any liability (except as expressly permitted or
contemplated by this Agreement), pledge or purport to pledge the other Party’s credit.
	 
	20.	 	TERMINATION
	 
	20.1	 	Notwithstanding anything else contained herein, this Agreement may be terminated by either
Party forthwith on giving notice in writing to the other if:

	 	(i)	 	the other commits any material breach of any term of this Agreement and
(in the case of a breach capable of being remedied) shall have failed, within 45
days if a software related breach or 30 days for any other breach after the receipt
of a request in writing from the other Party so to do, to remedy the breach;
	 
	 	(ii)	 	either:
	 
	 	(a)	 	an order is made or a resolution is passed for the winding up of the
other Party, or circumstances arise which entitle a court of competent jurisdiction
to make a winding-up order in relation to the other Party; or
	 
	 	(b)	 	an order is made for the appointment of an administrator to manage the
affairs, business and property of the other Party, or documents are filed with a
court of competent jurisdiction for the appointment of an administrator of the
other Party, or notice of an intention to appoint an administrator is given by the
other Party or its directors; or
	 
	 	(c)	 	a receiver is appointed of any of the other Party’s assets or
undertaking, or if circumstances arise which entitle a court of competent
jurisdiction or a creditor to appoint a receiver or manager of the other Party, or
if any other person takes possession of or sells the whole of, or a substantial
part of, the other Party’s assets; or
	 
	 	(d)	 	the other Party makes any arrangement or composition with its
creditors, or makes an application to a court of competent jurisdiction for the
protection of its creditors in any way, or becomes bankrupt; or
	 
	 	(e)	 	the other Party ceases, or threatens to cease, to trade

	 	 	and for the purposes of this Clause 20.1(ii), the Parties agree that any reference
therein to an English legal term for any action, remedy, method of judicial proceedings,
legal document, legal status, court, official or any legal concept or thing shall, in
respect of any jurisdiction other than England, be deemed to include a reference to what
most nearly approximates in that jurisdiction to the English legal term.

28

 

	20.2	 	The Distributor shall not be entitled to any compensation or indemnity (whether for loss of
distribution rights, goodwill or otherwise) as a result of the termination of this Agreement
in accordance with its terms.
	 
	21.	 	EFFECT OF TERMINATION
	 
	 	 	On the termination of this Agreement:
	 
	21.1	 	all rights and obligations of the Parties under this Agreement shall automatically terminate
except:

	 	(a)	 	for such rights of action as shall have accrued prior to such
termination and any obligations which expressly or by implication are intended to
come into or continue in force on or after such termination; and
	 
	 	(b)	 	that the terms of this Agreement shall remain in full force and effect
to the extent and for the period necessary to permit the Distributor properly to
perform its continuing obligations under each End-User Agreement subsisting at the
date of termination but for a period not to exceed twelve (12) months (and the
Distributor’s obligations under sub-clauses 21.2, 21.3 and 21.4 below shall be
deferred during such period as those continuing obligations subsist);
	 
	 	(c)	 	that the obligations of the Parties contained in the Service Level
Agreement shall continue in respect of each End-User Agreement subsisting at the
date of termination, but only a period not to exceed twelve (12) months.

	21.2	 	the Distributor shall immediately eliminate from all its literature, business stationery,
publications, websites, notices and advertisements all references to the title “SOLE UK
DISTRIBUTOR OF THE ARKONA DEALER MANAGEMENT SYSTEM” and all other representations of the
Distributor’s appointment hereunder and all references to the Mark.
	 
	21.3	 	the Distributor shall at its own expense forthwith return to the Company or otherwise dispose
of as the Company may instruct all promotional materials and other documents and papers
whatsoever sent to the Distributor and relating to the business of the Company (other than
correspondence between the Parties), all property of the Company, and all copies of the
Software Materials and the Source Materials relating to the Software, being in each case in
the Distributor’s possession or under its control.
	 
	21.4	 	subject to the continued operation of Clause 21.1, the Distributor shall cause the UK Core
Software to be erased from all computers of or under the control of the Distributor and shall
certify to the Company that the same has been done.
	 
	21.5	 	each End-User Agreement then subsisting shall continue in effect and shall survive the
termination of this Agreement.

29

 

	22.	 	ASSIGNMENT
	 
	 	 	Neither the Company nor the Distributor may assign or transfer all or any part of its
respective rights or obligations under this Agreement, save that either Party may assign
the benefits of this Agreement to (i) an Affiliate whose financial condition is no less
favourable than that of the assigning Party or (ii) any other entity with the prior
written consent of the other Party (such consent not to be unreasonably withheld or
delayed).
	 
	23.	 	WAIVER
	 
	 	 	No forbearance or delay by either Party in enforcing its rights shall prejudice or
restrict the rights of that Party, and no waiver of any such rights or of any breach of
any contractual terms shall be deemed to be a waiver of any other right or of any later
breach.
	 
	24.	 	SEVERABILITY
	 
	 	 	If any provision of this Agreement is judged to be illegal or unenforceable, the
continuation in full force and effect of the remainder of the provisions shall not be
prejudiced.
	 
	25.	 	AMENDMENTS
	 
	 	 	Any amendment, waiver or variation of this Agreement shall not be binding on the Parties
unless set out in writing, expressed to amend this licence and signed by or on behalf of
each of the Parties.
	 
	26.	 	THIRD PARTY RIGHTS
	 
	 	 	No term of this Agreement is intended to confer a benefit on, or to be enforceable by,
any person who is not a party to this Agreement save for the successors in title to and
the permitted assigns of the Parties, including without limitation End-Users.
	 
	27.	 	NOTICES
	 
	27.1	 	Any notice given under this Agreement shall be in writing and signed by or on behalf of the
Party giving it and shall be served by (a) delivering it personally to an officer of the Party
or (b) by e-mail and fax containing a copy (if by e-mail, in .pdf format) of the document duly
signed by the appropriate representative of the Party (to be confirmed by a signed version of
the notice being sent by the notifying Party by airmail) giving notice to the address and for
the attention of the relevant party set out in Clause 28.2 (or as otherwise notified by that
Party under this Agreement). Any such notice shall be deemed to have been received (a) if
delivered personally, at the time of delivery, and (b) in the case of air mail, email and fax,
at the moment of transmission of fax or the email, whichever the earlier.
	 
	27.2	 	The addresses and fax numbers of the Parties for the purposes of Clause 27.1 are:

30

 

	 	 	Arkona Inc
	 
	 	 	Address: As stated above
	 
	 	 	For the attention of: Alan Rudd
	 
	 	 	email: alan.rudd@arkona.com
	 
	 	 	Fax number: 001 801 501 0701
	 
	 	 	MCL Group Limited
	 
	 	 	Address: As stated above
	 
	 	 	For the attention of: Peter Varney
	 
	 	 	email: pvarney@mclgroup.co.uk
	 
	 	 	Fax number: 0044 01892 544882
	 
	 	 	or such other address, email address or fax number as may be notified in writing from
time to time by the relevant Party to the other Parties for the purposes of this Clause.
	 
	27.3	 	In proving such service it shall be sufficient to prove that the envelope containing such
notice was addressed to the address of the relevant Party set out in Clause 27.2 (or as
otherwise notified by that Party under this Agreement) and delivered to that address and that
the notice was transmitted by fax to the fax number and transmitted by email to the email
address of the relevant Party set out in Clause 27.2 (or as otherwise notified by that Party
under this Agreement).
	 
	28.	 	ENTIRE AGREEMENT
	 
	 	 	This Agreement (together with the specification referred to at Part A of Appendix B)
contains the whole agreement between the Parties relating to the subject matter hereof
and supersede all prior agreements, arrangements and understandings between the Parties
relating to that subject matter.
	 
	29.	 	GOVERNING LAW AND JURISDICTION
	 
	29.1	 	This Agreement shall be governed by and construed in accordance with the laws of England.
	 
	29.2	 	The Parties submit to the exclusive jurisdiction of the courts of England and Wales as
regards any claim, dispute or matter arising out of or relating to this Agreement or any of
the documents to be executed pursuant to this Agreement.
	 
	29.3	 	Each Party irrevocably consents to any process in any legal action or proceedings arising out
of or in connection with this Agreement being served on it in accordance with the provisions
of this Agreement relating to service of notices. Nothing

31

 

	 	 	contained in this Agreement shall affect the right to serve process in any other manner
permitted by law.
	 
	29.4	 	The Company irrevocably appoints Finers Stephens Innocent LLP of 176 Great Portland Street,
London W1W 5LS (fax: +44 (0) 207 560 7069 Att: Robert Lands) as its agent to receive on its
behalf in England service of any proceedings arising out of or in connection with this
Agreement. Such service shall be deemed completed on delivery to such agent (whether or not it
is forwarded to and received by the Company).

32

 

APPENDIX A

Escrow Agreement

SEE ESCROW AGREEMENT AND BENEFICIARY REGISTRATION FORM

ATTACHED AND INCORPORATED HEREIN AS PART OF THIS

APPENDIX A 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

33

 

APPENDIX B

Specification

Part A:

The Specification for the Software is the specification for the Aberdeen version of the Software,
as publicly available to the Company’s customers on the Arkona Application Solution Provider (ASP)
server hosted by MCI at its hosting facility in Salt Lake City Utah USA, as of 15 June 2006.

Part B: List of Arkona changes

1. File Changes

	•	 	Zip Code (from 9 numeric to Alpha/Numeric)

	•	 	Phone Number (from 10 numeric to 12 numeric)

	•	 	National Insurance Number (9 Alpha/Numeric from 9 numeric social security #)

2. File Additions

	•	 	Country Code

	•	 	CO2 Emissions

	•	 	Immobilizer Detail

	•	 	Cherished Number Plate

3. User Interface Issues

	•	 	Country to Print

	•	 	Date Format (mm/dd/yy to dd/mm/yy)

	•	 	Dollars to Pounds

	•	 	Vocabulary

4. Vocabulary

	•	 	First Name — Forename

	•	 	Last Name — Surname

	•	 	Labor — Labour

	•	 	Color — Colour

	•	 	Center — Centre

	•	 	Hood — Bonnet

	•	 	Tires — Tyres

	•	 	Favorite — Favourite

	•	 	Check — Cheque

	•	 	Gas — Petrol

	•	 	VIN — Chasis (if needed)

	•	 	License — Licence

	•	 	Any other specific non-UK vocabulary.

34

 

5. Business Rules Application Changes

	•	 	Sales Tax — VAT

	•	 	VAT Basis

	•	 	Tariff Codes

	•	 	Fees — Road Find License

	•	 	Fees Based Off of CO2 Emissions

6. Sales Type

	•	 	New

	•	 	Hire

	•	 	Lease Purchase

	•	 	Contract Hire

	•	 	Finance Lease

35

 

APPENDIX C

Schedule of Payments

	1.	 	In accordance with Clause 7.1 of the Agreement the Distributor agrees to pay the Company:-
	 
	1.1	 	the US$ Equivalent of the sum of £[***] on execution by both Parties of this Agreement;
	 
	1.2	 	the US$ Equivalent of the sum of £[***] upon the date 5 Business Days following the
Acceptance Date;
	 
	1.3	 	the US$ Equivalent of each of the Revenue Share Fees as determined and paid in accordance
with Paragraphs 2 and 3 below.
	 
	2.	 	The Revenue Share Fee shall be calculated as follows:
	 
	2.1	 	each Revenue Share Fee shall be the aggregate of all End User Share Fees paid in the
Quarterly Period to which the Revenue Share Fee relates;
	 
	2.2	 	the End User Share Fees shall, with regard to each End User, be calculated as follows:

	 	2.2.1	 	where the product (the “Product”) of the multiplication of that End User’s
Licence Fees Revenue with the Relevant Percentage is greater than £[***], the End User
Share Fees are a quarter of the Product;
	 
	 	2.2.2	 	where the Product is less than £[***], the End User Share Fees is £[***];

	2.3	 	for the purposes of this Paragraph 2, the Relevant Percentage is:

	 	2.3.1	 	[***]% in 2006, 2007 and 2008;
	 
	 	2.3.2	 	[***]% in 2009;
	 
	 	2.3.3	 	[***]% in 2010; and
	 
	 	2.3.4	 	[***]% in 2011 and all subsequent years

	 	 	 	PROVIDED THAT where in any Year prior to 2010 the total Revenue Share Fees payable for
that Year in accordance with this Paragraph exceed the US$ Equivalent of the sum of
£[***], the Distributor shall only pay the Company the US$ Equivalent of the sum of
£[***] as the total Revenue Share Fees due for that Year; and in the Years 2010 and 2011
the said figure of £[***] shall be deemed to be £[***].

	3.	 	Each Revenue Share Fee shall be paid within 30 days of the end of the relevant Quarterly
Period to which such Revenue Share Fee relates.

36

 

APPENDIX D

Service Level Agreement

1. Distributor Support Obligations. Distributor agrees to be primarily responsible for
providing all initial technical support to its End User customers pertaining to the UK Core
Software. Distributor shall maintain a standard of expertise that enables Distributor to train End
Users and to resolve End User technical questions and issues pertaining to the UK Core Software,
through its UK-based support center.

2. Company Coverage. Company agrees to provide secondary technical support for the UK Core
Software directly to Distributor at its single Site, in Tunbridge Wells, Kent, England (“Support
Services”). Distributor will escalate technical issues to the Company only after Distributor has
exhausted all reasonable avenues of solving Errors or End User issues with the UK Core Software.
Only designated Distributor employees may contact Company regarding Support Services. Company
shall respond to all Distributor requests for Support Services within four (4) Support Hours.

3. Priority Level of Errors. When reporting an Error, Distributor shall provide Company with
Distributor’s categorization of the Priority of the Error. Company and Distributor shall jointly
and reasonably determine the Priority level of the Error and Company will respond in accordance
with the following protocols:

Priority A:

(1) Company shall assign senior specialists to correct the Error; (2) provide Distributor
with a status progress at least every 24 hours; and (3) immediately commence to provide a
Workaround or a Fix that is reasonable according to industry standards with the goal of
having a Fix or Workaround within two Business Days after receipt of output or other
documentation of the Error. If the Error was generated from Distributor Software, improper
End User use, third party products, or environmental factors, then Company reserves the
right to ask Distributor to pay Company a reasonable fee in connection with identifying
and/or correcting such Error, together with out-of pocket expenses.

Priority B:

(1) Company shall assign a specialist to commence correction of the Error; and (2) provide
escalation procedures as reasonably determined by Company support staff. It is intended
that 60% of Priority B Errors will be fixed within three (3) Business Days.

Priority C:

Company shall include the Fix for the Error in the next major Software release.

4. Telephone Support. During United States Business Days, Company agrees to provide staffed
telephone Support Services between the hours of 0600 & 1900, Mountain Time (“Support Hours”). For
Priority A Errors that occur outside Support Hours (except

37

 

Sunday), Company shall have a technician on call to respond to Distributor’s need for assistance.

5. Definitions. Unless otherwise defined herein or in the UK Distribution Agreement, capitalized
terms used herein shall have the same meaning as set forth in this Appendix D.

“Error” means a malfunction in the UK Core Software which degrades the use of the UK Core Software,
or a failure of the UK Core Software or an omission, defect or deficiency in the UK Core Software,
causing it not to conform to the Software Materials.

“Fix” means the repair or replacement of source or object or executable code versions of the UK
Core Software to remedy an Error.

“Priority
A” means an Error that: (1) renders the UK Core Software inoperative; or (2) causes the
UK Core Software to fail catastrophically; or (3) causes the UK Core Software to perform an
unpredictable result.

“Priority
B” means an Error that affects performance of the UK Core Software, but does not
prohibit use of the UK Core Software.

“Priority
C” means an Error that causes only a minor impact of the use of the UK Core Software.

“Workaround” means a temporary change in the procedures followed or data supplied to avoid an Error
without significantly impairing performance of the UK Core Software.

38

 

APPENDIX E

MARK USAGE REQUIREMENTS

SEE PAGES 1-11 OF ARKONA LOGO GUIDELINES ATTACHED AND

INCORPOARTED AS PART OF THIS

APPENDIX E

[REMAINDER OF PAGE INTENTIONALLY BLANK]

39

 

APPENDIX F

END USER AGREEMENT PROVISIONS

	1.	 	WARRANTIES
	 
	 	 	In each End-User Agreement the Distributor will warrant to the End-User that:
	 
	1.1	 	with effect from the date that the UK Core Software licensed to the End-User is accepted by
the End-User in accordance with the terms of the End-User Agreement, such UK Core Software
will function in accordance with its specification;
	 
	1.2	 	the UK Core Software is, as delivered by the Distributor to the End-User, free from all
viruses and other malware, including but not limited to any codes or instructions that may be
or will be used to access, modify, delete or damage any data files or other computer programs
used by the End-User.
	 
	2.	 	LIMITATION OF LIABILITY
	 
	 	 	In each End-User Agreement the Distributor will limit its liability to provide that
(with the exception of the Distributor’s liability for death or personal injury caused
by the Distributor’s negligence, or for the Distributor’s fraud or fraudulent
misrepresentation, which liability shall not be excluded or limited in any way), the
Distributor’s liability to the End-User in respect of the Software and/or the UK Core
Software shall be limited as follows:
	 
	2.1	 	the Distributor shall not be liable for any loss of profits, loss of business, loss of data,
depletion of goodwill and/or similar losses or pure economic loss, or for any special,
indirect, punitive or consequential losses, costs, damages, charges or expenses howsoever
arising; and
	 
	2.2	 	the Distributor’s total aggregate liability in contract, tort (including negligence or breach
of statutory duty), misrepresentation, restitution or otherwise, arising in connection with the
performance of the End-User Agreement shall not exceed the total of the amounts actually paid by
the End-User to the Distributor.

40

 

THIS UK DISTRIBUTION AGREEMENT IS ENTERED INTO AS OF THE 20TH OF JUNE, 2006.

	 	 	 
	EXECUTED for and on behalf of ARKONA INC. by  
	 
	 	 
	 	 	 
	Alan Rudd
	 	 
	Chairman & Chief Executive Officer
	 	 
	 
	 	 
	EXECUTED for and on behalf of MCL GROUP LIMITED by
	 
	 	 
	 	 	 
	Ichiro Shibata
	 	 
	Chairman & Chief Executive
	 	 

41

 

DATE 20 JUNE 2006

(1) ARKONA INC

(2) MCL GROUP LIMITED

 

UK DISTRIBUTION AGREEMENT

 

TROWERS & HAMLINS

Sceptre Court

40 Tower Hill

London EC3N 4DX

 

 

ARKONA DISTRIBUTION AGREEMENT

	 	 	 	 	 	 	 
	1.

	 	DEFINITIONS AND INTERPRETATION
	 	 	1	 
	2.

	 	APPOINTMENT
	 	 	7	 
	3.

	 	LICENCES
	 	 	7	 
	4.

	 	ENHANCEMENTS
	 	 	9	 
	5.

	 	MAINTENANCE SERVICES
	 	 	10	 
	6.

	 	DURATION
	 	 	11	 
	7.

	 	PAYMENTS
	 	 	12	 
	8.

	 	CUSTOMISED VERSION
	 	 	13	 
	9.

	 	ACCEPTANCE TESTS
	 	 	13	 
	10.

	 	END-USER AGREEMENTS
	 	 	16	 
	11.

	 	TRAINING
	 	 	17	 
	12.

	 	DISTRIBUTOR’S OBLIGATIONS
	 	 	18	 
	13.

	 	COMPANY’S OBLIGATIONS
	 	 	19	 
	14.

	 	WARRANTIES AND INDEMNITIES
	 	 	20	 
	15.

	 	RIGHT OF FIRST REFUSAL
	 	 	24	 
	16.

	 	INTELLECTUAL PROPERTY RIGHTS
	 	 	24	 
	17.

	 	CONFIDENTIALITY AND ANNOUNCEMENTS
	 	 	26	 
	18.

	 	CUSTOMER ENQUIRIES
	 	 	27	 
	19.

	 	LEGAL RELATIONSHIP
	 	 	27	 
	20.

	 	TERMINATION
	 	 	28	 
	21.

	 	EFFECT OF TERMINATION
	 	 	29	 
	22.

	 	ASSIGNMENT
	 	 	30	 
	23.

	 	WAIVER
	 	 	30	 
	24.

	 	SEVERABILITY
	 	 	30	 
	25.

	 	AMENDMENTS
	 	 	30	 
	26.

	 	THIRD PARTY RIGHTS
	 	 	30	 
	27.

	 	NOTICES
	 	 	30	 
	28.

	 	ENTIRE AGREEMENT
	 	 	31	 
	29.

	 	GOVERNING LAW AND JURISDICTION
	 	 	31	 
	APPENDIX A SOFTWARE ESCROW AGREEMENT	 	 	33	 
	APPENDIX B LIST OF ARKONA CHANGES	 	 	34	 
	APPENDIX C SCHEDULE OF PAYMENTS	 	 	36	 
	SCHEDULE OF PAYMENTS	 	 	36	 
	APPENDIX D SERVICE LEVEL AGREEMENT	 	 	37	 
	 
	 	 	 	 	 	 
	SIGNATURES	 	 	40EX-10.1

 

EXHIBIT 10.1

ALLEGHANY CORPORATION

2007 LONG-TERM INCENTIVE PLAN

     1. PURPOSES OF THE PLAN. The purposes of the Alleghany Corporation 2007 Long-Term Incentive
Plan (the “Plan”) are to further the long-term growth of Alleghany Corporation (the “Corporation”),
to the benefit of its stockholders, by providing incentives to the officers and other employees of
the Corporation and its subsidiaries who will be largely responsible for such growth, and to assist
the Corporation in attracting and retaining executives of experience and ability on a basis
competitive with industry practices. The Plan permits the Corporation to provide equity-based
incentive compensation of the types commonly known as restricted stock, stock options, stock
appreciation rights, performance shares, performance units and phantom stock, as well as other
types of equity-based incentive compensation.

     2. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Compensation Committee
of the Board of Directors of the Corporation (the “Committee”). No member of the Committee, during
the one year period prior to such membership or during such membership, shall be granted or awarded
equity securities pursuant to the Plan or any other plan of the Corporation or any of its
affiliates, except as permitted by Rule 16b-3(c)(2)(i) promulgated under the Securities Exchange
Act of 1934, as amended, as such Rule may be amended from time to time. Subject to the provisions
of the Plan, the Committee shall have exclusive power to select the employees to participate in the
Plan, to determine the type, size and terms of awards to be made to each participant selected, and
to determine the time or times when awards will be granted or paid. The Committee’s interpretation
of the Plan or of any awards granted thereunder shall be final and binding on all parties
concerned, including the Corporation and any participant. The Committee shall have authority,
subject to the provisions of the Plan, to establish, adopt and revise such rules, regulations,
guidelines, forms of agreements and instruments relating to the Plan as it may deem necessary or
advisable for the administration of the Plan.

     3. PARTICIPATION. Participants in the Plan shall be selected by the Committee from among the
employees of the Corporation and its subsidiaries. The term “employee” shall mean any person
(including any officer) employed by the Corporation or a subsidiary on a salaried basis. The term
“subsidiary” shall mean any corporation, partnership or limited liability company, a majority of
the total combined voting power of whose stock or other equity interests is beneficially owned,
directly or indirectly, by the Corporation. Participants may receive multiple awards under the
Plan.

     4. AWARDS.

     (a) Types. Awards under the Plan may include, but need not be limited to, cash and/or shares
of the Corporation’s common stock, $1.00 par value (“Common Stock”), rights to receive cash and/or
shares of Common Stock, stock appreciation rights, options (“Options”) to purchase shares of Common
Stock, including options intended to qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended (“Code”), and options not intended so to qualify. The
Committee may also make any other type of award deemed by it to be consistent with the purposes of
the Plan.

     (b) Certain Qualifying Awards. The Committee, in its sole discretion, may grant an award to
any participant with the intent that such award qualifies as “performance-based compensation” under
Section 162(m) of the Code (a “Qualifying Award”). The right to receive (or retain) any award
granted as a Qualifying Award (other than an Option or a stock appreciation right granted at Fair
Market Value) shall be conditional upon the achievement of performance goals established by the
Committee in writing at the time such award is granted. Such performance goals, which may vary from
participant to participant and award to award, shall be based upon the attainment of specific
amounts of, or increases in, one or more of the following: revenues, operating income, cash flow,
management of expenses, loss reserves and loss adjustment expense reserves, underwriting expenses,
income before income taxes, net income, earnings per share, net worth, stockholders’ equity, return
on equity or assets or total return to stockholders, whether applicable to the Corporation or any
relevant subsidiary or business unit or entity in which the Corporation has a significant
investment, or any combination thereof as the Committee may deem appropriate. Prior to the payment
of any award granted as a Qualifying Award, the Committee shall certify in writing that the
performance goals were satisfied. The maximum number of shares of Common Stock with respect to
which Qualifying Awards may be granted to any participant in any calendar year shall be 50,000
shares of Common Stock, subject to adjustment as provided in Section 7(a) hereof.

     (c) Time and Deferral of Payments. At the time the Committee grants each award under the
Plan, the Committee shall specify in writing the time (which time may be a specific date or event,
or the time of satisfaction of any performance goals or other condition imposed by the Committee)
of the payment of the award. In awarding any right to receive cash and/or shares of Common Stock,
the

 

 

Committee may also specify that the payment of all or any portion of such cash and/or shares
of Common Stock may at the election of the participant be deferred until a later date. Deferrals
shall be for such periods and upon such other terms as the Committee may determine, all of which
terms (including the amount (or method for determining the amount) of the deferrals payable, the
time when such deferrals shall be payable and the terms and conditions of, and any limitations on
changes to, such elections) shall be set forth in the award agreement, which terms and any changes
to such terms, shall comply with the requirements of Section 409A of the Code and, in the case of
any Qualifying Award, shall comply with the requirements of Section 162(m) of the Code.

     (d) Vesting, Other Performance Requirements and Forfeiture. In awarding any Options or any
rights to receive cash and/or shares of Common Stock (including Qualifying Awards), the Committee
(i) may specify that the right to exercise such Options or the right to receive payment of such
cash and/or shares of Common Stock shall be conditional upon the fulfillment of specified
conditions, including, without limitation, completion of specified periods of service in the employ
of the Corporation or its subsidiaries, and the achievement of specified business and/or personal
performance goals, and (ii) may provide for the forfeiture of all or any portion of any such
Options or rights in specified circumstances. The Committee may also specify by whom and/or in what
manner the accomplishment of any such performance goals shall be determined and may waive or modify
any such performance goals or conditions.

     (e) Agreements. Any award under the Plan may, in the Committee’s discretion, be evidenced by
an agreement at the time of grant of the award or thereafter, which, subject to the provisions of
the Plan, may contain such terms and conditions as may be approved by the Committee, and shall be
executed by an officer on behalf of the Corporation; provided that in the event that payment of any
award may be deferred as provided in Section 4(c) hereof, the award must be evidenced by an award
agreement.

     5. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to adjustment as provided in Section 7(a)
hereof, the number of shares of Common Stock which may be paid to participants under the Plan
and/or purchased pursuant to Options granted under the Plan shall not exceed an aggregate of
300,000 shares. For this purpose, awards based upon, or measured by, the value or changes in the
value of shares of Common Stock (whether paid in cash or shares of Common Stock), any shares of
Common Stock retained by the Corporation in satisfaction of the participant’s obligation for
withholding taxes, and shares of Common Stock not issued as a result of a net exercise of an Option
shall be treated as shares of Common Stock paid to participants. If any award shall be forfeited or
otherwise terminates (in whole or in part) or an Option shall expire or terminate unexercised, the
shares of Common Stock covered thereby shall remain available under the Plan for payment to
participants. Shares to be delivered or purchased under the Plan may be either authorized but
unissued shares of Common Stock or shares of Common Stock held by the Corporation as treasury
shares. Any shares of Common Stock issued by the Corporation through the assumption or substitution
of outstanding grants in connection with the acquisition of another entity shall not reduce the
maximum number of shares available for delivery under the Plan.

     6. OPTIONS.

     (a) Term of Options. The term of any Option shall be determined by the Committee, but in no
event shall any Option be exercisable more than ten years after the date on which it was granted.
The Committee may grant options intended to qualify as incentive stock options under Section 422 of
the Code, and Options not intended so to qualify; provided, however, that Options intended to
qualify as incentive stock options may only be granted to employees of the Corporation and any
subsidiary corporation (within the meaning of Section 424(f) of the Code).

     (b) Option Price; Fair Market Value. The price (“Option Price”) at which shares of Common
Stock may be purchased pursuant to any Option shall be determined by the Committee at the time the
Option is granted, but in no event shall the Option Price be less than 100 percent of the Fair
Market Value of such shares on the date the Option is granted. For purposes of the Plan, Fair
Market Value is the closing sales prices of the Common Stock on the relevant date as reported on
the stock exchange or market on which the Common Stock is primarily traded, or, if no sale is made
on such date, then Fair Market Value is the weighted average of the closing sales prices of the
Common Stock on the next preceding day and the next succeeding day on which such sales were made as
reported on the stock exchange or market on which the Common Stock is primarily traded.

     (c) Payment Upon Exercise. Upon exercise of an Option, the Option Price shall be payable to
the Corporation in cash, or, at the discretion of the Committee, in shares of Common Stock valued
at the Fair Market Value thereof on the date of payment, or in a combination of cash and shares of
Common Stock.

     (d) Surrender of Options. The Corporation may, if the Committee so determines, accept the
surrender by a participant, or the personal representative of a participant, of an Option, in
consideration of a payment by the Corporation equal to the difference obtained by subtracting the
aggregate Option Price from the aggregate Fair Market Value of the Common Stock covered by the
Option on the date of such surrender, such payment to be in cash, or, if the Committee so provides,
in shares of Common Stock valued at Fair Market Value on the date of such surrender, or partly in
shares of Common Stock and partly in cash.

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     7. DILUTION AND OTHER ADJUSTMENTS.

     (a) Changes in Capital Structure. In the event of any corporate transaction involving the
Corporation (including, without limitation, any subdivision or combination or exchange of the
outstanding shares of Common Stock, stock dividend, stock split, spin-off, split-off,
recapitalization, capital reorganization, liquidation, reclassification of shares of Common Stock,
merger, consolidation, extraordinary cash or other distributions, stock repurchases or redemption
at prices in excess of book value per share, stock issuances or sales at prices less than book
value per share or sale, lease or transfer of substantially all of the assets of the Corporation or
other event similar in type or effect to an event herein listed), the Board of Directors of the
Corporation shall make such equitable adjustments as it may deem appropriate in the Plan and the
awards thereunder, including, without limitation, an adjustment in the total number of shares of
Common Stock which may thereafter be delivered or purchased under the Plan, in the maximum number
of shares of Common Stock with respect to which awards may be granted to any participant in any
year under Section 4(b) hereof and in any performance goals. Agreements evidencing Options may
include such provisions as the Committee may deem appropriate with respect to the adjustments to be
made to the terms of such Options upon the occurrence of any of the foregoing events.

     (b) Tender Offers and Exchange Offers. In the event of any tender offer or exchange offer,
by any person other than the Corporation, for shares of Common Stock, the Committee may make such
adjustments in outstanding awards and authorize such further action as it may deem appropriate to
enable the recipients of outstanding awards to avail themselves of the benefits of such offer,
including, without limitation, acceleration of the exercise date of outstanding Options so that
they become immediately exercisable in whole or in part, or offering to acquire all or any portion
of specified categories of Options for a price determined pursuant to Section 6(d) hereof, or
acceleration of the payment of outstanding awards payable, in whole or in part, in shares of Common
Stock.

     (c) Limits on Discretion to Make Adjustments. Notwithstanding any provision of this Section
7 to the contrary, no adjustment shall be made in any outstanding Qualifying Awards to the extent
that such adjustment would adversely affect the status of that Qualifying Award as
“performance-based compensation” under Section 162(m) of the Code.

     8. MISCELLANEOUS PROVISIONS.

     (a) Right to Awards. No employee or other person shall have any claim or right to be granted
any award under the Plan.

     (b) Rights as Stockholders. A participant shall have no rights as a holder of Common Stock
by reason of awards under the Plan, unless and until certificates for shares of Common Stock are
issued to the participant.

     (c) No Assurance of Employment. Neither the Plan nor any action taken thereunder shall be
construed as giving any employee any right to be retained in the employ of the Corporation or any
subsidiary.

     (d) Costs and Expenses. All costs and expenses incurred in administering the Plan shall be
borne by the Corporation.

     (e) Unfunded Plan. The Plan shall be unfunded. The Corporation shall not be required to
establish any special or separate fund nor to make any other segregation of assets to assure the
payment of any award under the Plan.

     (f) Withholding Taxes. The Corporation shall have the right to deduct from all awards
hereunder paid in cash any federal, state, local or foreign taxes required by law to be withheld
with respect to such payments and, with respect to awards paid in stock, to require the payment
(through withholding from the participant’s salary or otherwise) of any such taxes, but the
Committee may make such arrangements for the payment of such taxes as the Committee in its
discretion shall determine, including payment with shares of Common Stock (including net payments
of awards paid in Common Stock).

     (g) Limits on Transferability. No awards under the Plan nor any rights or interests therein
shall be pledged, encumbered, or hypothecated to, or in favor of, or subject to any lien,
obligation, or liability of a participant to, any party, other than the Corporation or any
subsidiary, nor shall such awards or any rights or interests therein be assignable or transferable
by the recipient thereof except, in the event of the recipient’s death, to his designated
beneficiary as hereinafter provided, or by will or the laws of descent and distribution. During the
lifetime of the recipient, awards under the Plan requiring exercise shall be exercisable only by
such recipient or by the guardian or legal representative of such recipient. Notwithstanding the
foregoing, the Committee may, in its discretion, provide that awards granted pursuant to the Plan
(other than an option granted as an incentive stock option) be transferable, without consideration,
to a participant’s immediate family members (i.e., children, grandchildren or spouse), to trusts
for the benefit of such

3

 

immediate family members and to partnerships in which such family members are the only
partners. The Committee may impose such terms and conditions on such transferability as it may deem
appropriate.

     (h) Beneficiary. Any payments on account of awards under the Plan to a deceased participant
shall be paid to such beneficiary as has been designated by the participant in writing to the
Secretary of the Corporation or, in the absence of such designation, according to the participant’s
will or the laws of descent and distribution.

     (i) Nature of Benefits. Awards under the Plan, and payments made pursuant thereto, are not a
part of salary or base compensation.

     (j) Compliance with Legal Requirements. The obligation of the Corporation to issue or
deliver shares of Common Stock upon exercise of Options or otherwise shall be subject to
satisfaction of all applicable legal and securities exchange requirements, including, without
limitation, the provisions of the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended. The Corporation shall endeavor to satisfy all such requirements in such a
manner as to permit at all times the exercise of all outstanding Options in accordance with their
terms, and to permit the issuance and delivery of shares of Common Stock whenever provided for by
the terms of any award made under the Plan.

     9. AMENDMENT OR TERMINATION OF THE PLAN. The Board of Directors of the Corporation, without
the consent of any participant, may at any time terminate or from time to time amend the Plan in
whole or in part; provided, however, that no such action shall adversely affect any rights or
obligations with respect to any awards theretofore made under the Plan; and provided, further, that
no amendment, without approval of the holders of Common Stock by an affirmative vote of a majority
of the shares of Common Stock voted thereon in person or by proxy, shall (i) increase the aggregate
number of shares subject to the Plan (other than increases pursuant to Section 7 hereof), (ii)
extend the period during which awards may be granted under the Plan, (iii) increase the maximum
term for which Options may be issued under the Plan, (iv) decrease the minimum Option Price at
which Options may be issued under the Plan, or (v) materially modify the requirements for
eligibility to participate in the Plan. With the consent of the participants affected, the
Committee may amend outstanding agreements evidencing awards under the Plan, and may amend the
terms of awards not evidenced by such agreements, in any manner not inconsistent with the terms of
the Plan.

     10. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective when approved at the
annual meeting of stockholders (the “Annual Meeting”) by a majority of the voting power of the
Voting Stock (all as defined in the Corporation’s Restated Certificate of Incorporation) present in
person or represented by proxy and entitled to vote at such Annual Meeting. The Plan shall
terminate on the date of the Annual Meeting in 2012, unless sooner terminated by action of the
Board of Directors of the Corporation. No award may be granted hereunder after termination of the
Plan, but such termination shall not affect the validity of any award then outstanding.

     11. LAW GOVERNING. The validity and construction of the Plan and any agreements entered into
thereunder shall be governed by the laws of the State of New York, but without regard to the
conflict laws of the State of New York except to the extent that such conflict laws require
application of the laws of the State of Delaware.

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