SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
(Amendment Number 1)
Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (fee required) For the fiscal year ended December 31, 1995
Commission File Number: 0-22606
Britton & Koontz Capital Corporation
(Name of Small Business Issuer in its Charter)
Mississippi 64-0665423
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
500 Main Street
Natchez, Mississippi 39120
(Address of Principal Executive Offices) (Zip Code)
(601) 445-5576
(Issuer's Telephone Number, Including Area Code)
The purpose of this amendment is to file the following documents for which
confidential treatment was previously applied:
1. Exhibits I and III, as well as, the title, introductory paragraph and
certain introductory headings of Exhibit II to Exhibit 10.5 of Britton
& Koontz Capital Corporation's (the "Company") Form 10-KSB for the
fiscal year ended December 31, 1995. Confidential treatment has been
granted by the Securities and Exchange Commission (the "Commission")
with respect to the remainder of Exhibit II.
2. Exhibits A,B and D, as well as, the title, introductory paragraph and
certain introductory headings of Exhibit C to Exhibit 10.6 of the
Company's Form 10-KSB for the year ended December 31, 1995. Confidential
treatment has been granted by the Commission with respect to the
remainder of Exhibit C.
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Cross Reference Index
To
Form 10-KSB/A
Page
Exhibits Index 1
Signature 2
<PAGE>
Exhibits Index
10.5 System Purchase Agreement along with Exhibits I,III and certain
portions of Exhibit II.
10.6 Independent Contractor Agreement along with Exhibits A,B,D and
certain portions of Exhibit C.
1
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment Number 1 to its Form 10-KSB for the
fiscal year ended December 31, 1995 to be signed on its behalf by the
undersigned thereunto duly authorized.
Britton & Koontz Capital Corporation
June 14, 1996 /s/ W. Page Ogden
By:_________________________________
W. Page Ogden
President, Chief Executive
Officer and Director
2
The Company's 10-KSB for the fiscal year ended December 31, 1995 was filed on
March 31, 1996 (the "Original 10-KSB"). In the Original 10-KSB, the Company
requested confidential treatment of Exhibits I,II and III to Exhibit 10.5.
The Company is withdrawing its request for confidential treatment with respect
to Exhibit I and III and certain portions of Exhibit II as indicated in the
revised Exhibit 10.5 that is filed herewith.
Exhibit 10.5
SYSTEM PURCHASE AGREEMENT
1. Identification of the Parties. This Agreement is made between
BRITTON & KOONTZ FIRST NATIONAL BANK ("B&K") and INTERBANK SYSTEMS, INC.
("InterBank").
2. Purpose of Agreement. B&K desires to retain InterBank as an
independent contractor to develop the computer software (the "Software")
described in the Functional Specifications attached to this Agreement as
Exhibit I and incorporated herein by reference. InterBank is ready, willing
and able to undertake the development of the Software and agrees to do so
under the terms and conditions set forth in this Agreement. Accordingly, the
parties agree as follows:
3. Preparation of Development Plan. InterBank has prepared a
development plan ("Development Plan") which is attached as Exhibit II,
satisfying the requirements set forth in the Functional Specifications.
The Development Plan includes:
(a) detailed specifications for the System;
(b) a listing of all items to be delivered to B&K under this
Agreement ("Deliverables");
(c) a delivery schedule containing a delivery date for each
Deliverable; and
(d) a payment schedule setting forth the amount and time of
InterBank's compensation.
4. Payment. The total contract price shall be $87,500. B&K
shall pay InterBank the sum of $20,000 upon execution of this Agreement.
The remainder of the contract price shall be payable in installments according
to the payment schedule included in the Development Plan.
Each installment shall be payable upon completion of each project
phase by InterBank and acceptance by B&K.
5. Payment of InterBank's Costs. B&K shall reimburse InterBank
for all reasonable travel and living expenses necessarily incurred by
InterBank or InterBank's subcontractors while away from their regular place
of business and engaged in the performance of services under this
Agreement, but not to exceed $10,000.
6. Changes in Project Scope. Mutually agreed upon changes to the
Development Plan shall be evidenced by a "Development Plan Modification
Agreement." The Development Plan Modification Agreement shall amend
the Development Plan appropriately to incorporate the desired changes and
acknowledge any effect of such changes on the provisions of this Agreement.
The Development Plan Modification Agreement shall be signed by authorized
representatives of B&K and InterBank, whereupon InterBank shall commence
performance in accordance with it.
For purposes of this Agreement, each Development Plan
Modification Agreement duly authorized in writing by B&K and InterBank
shall be deemed incorporated into and made part of this Agreement. Each
such Development Plan Modification Agreement shall constitute a formal
change to this Agreement adjusting fees and completion dates as finally
agreed upon.
<PAGE>
7. Delays. InterBank shall use all reasonable efforts to deliver the
Software on schedule. InterBank shall inform B&K at its earliest opportunity
of any anticipated delays in the delivery schedule and of the actions being
taken to assure completion of the Software within a time period acceptable to
B&K.
The delivery schedule shall be adjusted for mutually agreed-upon
delays, or for delays attributable to B&K.
Any delay or nonperformance of any provision of this Agreement
caused by conditions beyond the reasonable control of the performing party
shall not constitute a breach of this Agreement, provided that the delayed
party has taken reasonable measures to notify the other of the delay in
writing. The delayed party's time for performance shall be deemed to be
extended for a period equal to the duration of the conditions beyond its
control.
Conditions beyond a party's reasonable control include, but are not
limited to, natural disasters, acts of government after the date of the
Agreement, power failure, fire, flood, acts of God, labor disputes, riots, acts
of war and epidemics.
8. Acceptance Testing of Software. Upon completion of each
development phase set forth in the Development Plan's delivery schedule,
InterBank shall deliver and install the Software and shall deliver all
documentation and other materials required to be provided in accordance with
the delivery schedule. B&K shall have 30 days from the delivery of the
Software to inspect, test and evaluate it to determine whether the Software
satisfies the acceptance criteria in accordance with procedures set forth in the
Development Plan, or as established by InterBank and approved by B&K
prior to testing.
If the Software does not satisfy the acceptance criteria, B&K shall
give InterBank written notice stating why the Software is unacceptable.
InterBank shall have 30 days from the receipt of such notice to correct the
deficiencies. B&K shall then have 30 days to inspect, test and reevaluate the
Software. If the Software still does not satisfy the acceptance criteria, B&K
shall have the option of either: (1) repeating the procedure set forth above, or
(2) terminating this Agreement pursuant to the section of this Agreement
entitled "Termination." If B&K does not give written notice to InterBank
within the initial 30-day inspection, testing and evaluation period or any
extension of that period, that the Software does not satisfy the acceptance
criteria, B&K shall be deemed to have accepted the Software upon expiration
of such period.
Upon completion of the final development phase set out in the
Development Plan, acceptance testing shall be performed on the Software in
its entirety to determine whether the Software satisfies the acceptance criteria
and operates with internal consistency. B&K shall have 30 days to perform
such tests. If the completed Software does not satisfy the acceptance criteria,
the parties shall follow the notification and perfection standards described in
the preceding paragraph.
If and when the acceptance tests establish the Software delivered
upon completion of any phase of development complies with the acceptance
criteria, B&K shall promptly notify InterBank that it accepts the delivered
Software. The date of such notification shall be the date on which B&K shall
be obligated to make the applicable payment specified in the payment
schedule set forth in the Development Plan.
9. Training. InterBank shall provide 5 days of training in the use
of the Software by qualified personnel ("trainers"). The training will be
conducted at B&K's premises on such dates as the parties may agree.
B&K shall pay the travel expenses of the trainers, but the training
will otherwise be at no additional charge to B&K.
<PAGE>
10. Maintenance of Software. Beginning on the first day of the
first month following expiration of the warranty period set forth in the section
of this Agreement entitled "Warranties," InterBank shall provide the
following error-correction and support services:
(a) telephone hot-line support during InterBank's normal days and
hours of business operation. Such support shall include consultation on the
operation and utilization of the Software. B&K shall be responsible for all
telephone equipment and communication charges related to such support; and
(b) error correction services, consisting of InterBank using all
reasonable efforts to design, code and implement programming changes to the
Software, and modifications to the documentation, to correct reproducible
errors therein so that the Software is brought into substantial conformance
with the Specifications.
Payment for Maintenance. B&K shall pay InterBank for
error-correction and support services the annual sum of $9,000 (15% of
estimated software sales price) payable in quarterly installments beginning on
the first day of the first month following expiration of the warranty period set
forth in the section of this Agreement entitled "Warranties." Three years after
the date of B&K's final acceptance of the Software, InterBank may increase
the maintenance fee upon at least 90 days' prior written notice to B&K.
B&K's Role in Maintenance. The provision of the error-correction
and support services described above shall be expressly contingent upon B&K
promptly reporting any errors in the Software or related documentation to
InterBank in writing and not modifying the Software without InterBank's
written consent.
Term of Support. Subject to timely payment by B&K of the
maintenance fees, InterBank shall offer the maintenance described above for a
minimum of three years after completion of the development work under this
Agreement.
B&K Termination of Maintenance. B&K may discontinue the
maintenance services described above upon not less than 90 days' written
notice to InterBank.
11. Ownership of Software. Subject to payment of all
compensation due under this Agreement and all other terms and conditions
herein, InterBank hereby grants to B&K a nonexclusive, nontransferable,
royalty-free license to use the Software furnished to B&K under this
Agreement.
The license granted herein shall authorize B&K to:
(a) install the Software on computer systems owned, leased or
otherwise controlled by B&K,
(b) utilize the Software for its internal data-processing purposes,
including service bureau purposes, and
(c) copy the Software only as necessary to exercise the rights granted
herein.
InterBank shall pay B&K a royalty of five percent (5%) of the total
purchase price of each system license InterBank grants to third parties.
System license specifically excludes the cost of hardware or itemized system
installation charges. The total royalties paid to B&K shall not exceed
$500,000.
<PAGE>
12. Ownership of Background Technology. B&K acknowledges
that InterBank and its subcontractors own or hold a license to use and
sublicense various preexisting development tools, routines, subroutines and
other programs, data and materials that InterBank may include in the
Software developed under this Agreement. This material shall be referred to
hereafter as "Background Technology." InterBank's Background Technology
includes, but is not limited to, those items identified in Exhibit III, attached
hereto, and made a part of this Agreement.
B&K agrees that InterBank shall retain any and all rights InterBank
may have in the Background Technology. InterBank grants B&K an
unrestricted, nonexclusive, perpetual, fully paid-up worldwide license to use
the Background Technology in the Software developed and delivered to B&K
under this Agreement, and all updates and revisions thereto. However, B&K
shall make no other commercial use of the Background Technology without
InterBank's written consent.
13. Source Code Access. B&K agrees that the Software developed
under this Agreement shall be delivered to B&K in object code form only.
InterBank agrees that one copy of the source code version of the Software
and associated documentation shall be deposited with an escrow agent which
shall be the Britton & Koontz First National Bank trust department. B&K
and InterBank shall enter into a supplementary escrow agreement with the
escrow agent.
The source code shall be delivered to the escrow agent within 90
days after delivery of the object code to B&K. Thereafter, the source code
version of all updates, enhancements and modifications of the Software
created by InterBank on B&K's behalf, as well as associated documentation,
shall be deposited by InterBank with the escrow agent. B&K shall pay all
fees necessary to establish and maintain the escrow.
InterBank hereby grants to B&K a contingent license to receive the
source code from the escrow agent and to use the source code to support its
use of the Software in machine-readable form if one or more of the following
conditions occurs:
(a) InterBank, whether directly or through a successor or affiliate,
ceases to be in the software business.
(b) InterBank fails to fulfill its obligations to maintain the Software
as provided in this Agreement.
(c) InterBank becomes insolvent or admits insolvency or a general
inability to pay its debts as they become due.
(d) InterBank files a petition for protection under the U.S.
Bankruptcy Code, or an involuntary petition is filed against it and is not
dismissed within 60 days.
(e) InterBank comes under the control of a competitor of B&K.
The source code shall be used solely by B&K to maintain the
Software and shall be subject to every restriction on use set forth in this
Agreement. B&K agrees not to disclose the source code to third parties
except on a need-to-know basis under an appropriate duty of confidentiality.
<PAGE>
14. Warranties.
(a) Warranty of Software Performance. InterBank warrants that for
one year following acceptance of the Software by B&K, the Software will be
free from material reproducible programming errors and defects in
workmanship and materials, and will substantially conform to the
Specifications in the Development Plan when maintained and operated in
accordance with InterBank's instructions. If material reproducible
programming errors are discovered during the warranty period, InterBank
shall promptly remedy them at no additional expense to B&K. This warranty
to B&K shall be null and void if B&K is in default under this Agreement or
if the nonconformance is due to:
(1) hardware failures due to defects, power problems, environmental
problems or any cause other than the Software itself;
(2) modification of the Software operating systems or computer
hardware by any party other than InterBank; or
(3) misuse, errors or negligence of B&K, its employees or agents in
operating the Software.
InterBank shall not be obligated to cure any defect unless B&K
notifies it of the existence and nature of such defect promptly upon discovery.
(b) Warranty of Title. InterBank owns and has the right to license
or convey title to the Software and documentation covered by this
Agreement. InterBank will not grant any rights or licenses to any intellectual
property or technology that would conflict with InterBank's obligations under
this Agreement.
(c) Warranty Against Disablement. InterBank expressly warrants
that no portion of the Software contains or will contain any protection feature
designed to prevent its use. InterBank further warrants that it will not impair
the operation of the Software in any way other than by order of a court of
law.
(d) Warranty of Compatibility. InterBank warrants that the Software
shall be compatible with the B&K's hardware and software as set forth in the
Development Plan Specifications.
THE WARRANTIES SET FORTH IN THIS AGREEMENT ARE
THE ONLY WARRANTIES GRANTED BY INTERBANK. INTERBANK
DISCLAIMS ALL OTHER WARRANTIES EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
15. Intellectual Property Infringement Claims.
InterBank represents that to the best of its knowledge the Software
delivered to B&K under this Agreement will not infringe any valid and
existing intellectual property right of any third party.
InterBank shall have no liability for, and shall not indemnify B&K
for, any infringement claim resulting from B&K's:
(1) modification of the Software;
(2) combination of the Software with hardware, software or other
items provided by anyone other than InterBank; or
(3) use of the Software in any manner not specified in the
Specifications or documentation provided by InterBank.
In no event shall InterBank's liability under this Section exceed the
total amount paid to InterBank by B&K under this Agreement. The
foregoing represents InterBank's entire liability to B&K in connection with
claims alleging intellectual property infringement by the Software.
16. Limitation of InterBank's Liability to B&K. In no event shall
InterBank be liable to B&K for lost profits of B&K, or special or
consequential damages, even if InterBank has been advised of the possibility
of such damages.
<PAGE>
17. Section Omitted.
18. Confidentiality. During the term of this Agreement and for five
years afterwards, InterBank will not use or disclose to others without B&K's
written consent B&K's Confidential Information, except when reasonably
necessary to perform the services under this Agreement. "Confidential
Information" is limited to:
(1) any written or tangible information stamped "confidential,"
"proprietary" or with a similar legend; and
(2) any written or tangible information not marked with a
confidentiality legend, or information disclosed orally to Consultant, that is
treated as confidential when disclosed and later summarized sufficiently for
identification purposes in a written memorandum marked "confidential" and
delivered to Consultant within 30 days after the disclosure.
InterBank shall disclose such Confidential Information only to those
of its employees and subcontractors who need to know it for the performance
of this Agreement, and shall ensure that each of those employees and
subcontractors has signed an agreement to keep such information confidential.
(a) Software treated as confidential. B&K acknowledges that the
Software is InterBank's sole and exclusive property. B&K shall treat the
Software on a confidential basis and shall not, at any time, disclose the trade
secrets embodied in the Software or supporting documentation to any other
person, firm, organization or employee who does not need to obtain access
thereto consistent with B&K's rights under this Agreement. Under no
circumstances may B&K modify, reverse compile or reverse assemble the
object code contained in the Software. B&K shall devote its reasonable best
efforts to ensure that all persons afforded access to the Software and
supporting documentation protect InterBank's trade secrets against
unauthorized use, dissemination or disclosure.
(b) Excluded materials. InterBank and B&K shall have no obligation
to keep confidential or refrain from using any information which:
(1) was in its possession or known to it, without an obligation to
keep it confidential, before such information was disclosed to it by the other
party;
(2) is or becomes public knowledge through no fault of its own;
(3) is independently developed by or for it;
(4) is disclosed by the other party to others without any restriction
on use and disclosure; or
(5) is or becomes lawfully available to it from a source other than
the other party.
(c) B&K Customer Information. Notwithstanding the foregoing,
B&K customer account information made available during the term of this
Agreement shall forever remain confidential.
19. Noncompetition. InterBank agrees that during performance of
the services required by this Agreement and for two years after completion,
InterBank will not perform the same services for competitors of B&K
headquartered within a 50 mile radius of Natchez, Mississippi without the
consent of B&K.
<PAGE>
20. Term of Agreement. This Agreement commences on the date it
is executed and shall continue until full performance by both parties, or until
earlier terminated by one party under the terms of this Agreement.
21. Termination of Agreement. The rights and obligations under
the sections entitled "Intellectual Property Infringement Claims,"
"Confidentiality" and "General Provisions" shall continue to bind the parties
after termination of the Agreement as provided herein.
If this Agreement is terminated by B&K because of InterBank's
default, B&K shall have the option to either:
(a) return to InterBank all copies and portions of the Software and
related materials and documentation in its possession furnished by InterBank
under this Agreement, whereupon InterBank shall promptly return all monies
received from B&K under this Agreement, less the reasonable value of those
services actually received and used by B&K; if the parties are unable to agree
upon the reasonable value of such services, they shall appoint an arbitrator to
do so pursuant to the section of this Agreement entitled "Mediation and
Arbitration"; or
(b) pay InterBank all amounts owed or accrued for the work
performed under this Agreement, whereupon all rights and licenses granted to
B&K by InterBank under this Agreement shall continue and survive
royalty-free and fully paid-up.
If InterBank terminates this Agreement because of B&K's default, all
of the following shall apply:
(a) B&K shall immediately cease use of the Software.
(b) B&K shall, within 10 days of such termination, deliver to
InterBank all copies and portions of the Software and related materials and
documentation in its possession furnished by InterBank under this Agreement.
(c) All amounts payable or accrued to InterBank under this
Agreement shall become immediately due and payable.
(d) All rights and licenses granted to B&K under this Agreement
shall immediately terminate.
22. Insolvency. If either party becomes insolvent, files a
bankruptcy petition, becomes the subject of an involuntary bankruptcy
petition, makes a general assignment for the benefit of creditors, has a
receiver appointed for its assets, or ceases to conduct business, it shall be
considered in default of this Agreement. If any of these events happen to a
party, it shall immediately notify the other party.
23. Taxes. B&K shall be responsible for payment of all taxes based
on work performed or products delivered under this Agreement except for all
of InterBank's income taxes and employment taxes.
24. Assignment. Neither party may assign or subcontract its rights
or obligations under this Agreement, either in whole or in part, without the
prior written consent of the other party, which shall not be unreasonably
withheld. Any attempt to do so shall be void and of no effect. However,
B&K may assign without prior written consent its rights and obligations
under this Agreement to a successor in interest due to B&K's acquisition,
merger or reorganization. InterBank is specifically authorized to assign or
subcontract its rights or obligations under this Agreement, in whole or in
part, to Summit Research, Inc.
<PAGE>
25. Mediation and Arbitration. Except for the right of either party
to apply to a court of competent jurisdiction for a temporary restraining order
or preliminary injunction to preserve the status quo or prevent irreparable
harm pending the selection and confirmation of a panel of arbitrators, and for
the right of InterBank to bring suit on an open account for simple monies due
InterBank, any dispute arising under this Agreement shall be resolved through
a mediation-arbitration approach. The parties agree to first try to resolve the
dispute informally with the help of a mutually agreed-upon mediator. If it
proves impossible to arrive at a mutually satisfactory solution through
mediation, the parties agree to submit their dispute to binding arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association.
The arbitration may be conducted by one impartial arbitrator by
mutual agreement or by three arbitrators if the parties are unable to agree on
a single arbitrator within 30 days of first demand for arbitration. All
arbitrators are to be selected from a panel provided by the American
Arbitration Association. The chair shall be an attorney at law, and the other
arbitrators shall have a background or training either in computer law,
computer software technology or marketing of computer software products.
Upon request of a party, the arbitrators shall have the authority to
permit discovery to the extent they deem appropriate. A court reporter shall
record the arbitration hearing and the reporter's transcript shall be the
official transcript of the proceeding. The arbitrators shall have no power to
add or detract from the agreements of the parties and may not make any ruling or
award that does not conform to the terms and conditions of this Agreement.
The arbitrators shall have the authority to grant injunctive relief in a form
substantially similar to that which would otherwise be granted by a court of
law. The arbitrators shall have no authority to award punitive damages or
any other damages not measured by the prevailing party's actual damages.
The arbitrators shall specify the basis for any damage award and the types of
damages awarded. The decision of the arbitrators shall be final and binding
on the parties and may be entered and enforced in any court of competent
jurisdiction by either party.
26. General Provisions.
(a) Complete Agreement. This Agreement together with all exhibits,
appendices or other attachments, which are incorporated herein by reference,
is the sole and entire Agreement between the parties relating to the subject
matter hereof. This Agreement supersedes all prior understandings,
agreements and documentation relating to such subject matter. In the event
of a conflict between the provisions of the main body of the Agreement and
any attached exhibits, appendices or other materials, the Agreement shall take
precedence.
(b) Modifications to Agreement. Modifications and amendments to
this Agreement, including any exhibit or appendix hereto, shall be
enforceable only if they are in writing and are signed by authorized
representatives of both parties.
(c) Waiver. No term or provision of this Agreement shall be
deemed waived and no breach excused unless such waiver or consent is in
writing and signed by the party claimed to have waived or consented.
(d) No Agency. Nothing contained herein will be construed as
creating any agency, partnership, joint venture or other form of joint
enterprise between the parties.
<PAGE>
(e) InterBank an Independent Contractor. The parties acknowledge
that InterBank will perform its obligations hereunder as an independent
contractor. The manner and method of performing such obligations will be
under InterBank's sole control and discretion; B&K's sole interest is in the
result of such services. It is also expressly understood that InterBank's
employees and agents, if any, are not B&K's employees or agents, and have
no authority to bind B&K by contract or otherwise.
(f) Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be deemed given
when delivered personally, or five days after being deposited in the United
States mail, postage prepaid and addressed as follows, or to such other
address as each party may designate in writing:
B&K:
Britton & Koontz First National Bank
500 Main Street
Natchez, MS 39120
InterBank:
InterBank Systems, Inc.
500 Main Street
Natchez, MS 39120
(g) Attorney Fees. If any action at law or in equity is necessary to
enforce the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney fees, costs and expenses, in addition to any other relief to
which it may be entitled.
(h) Applicable Law. This Agreement will be governed by the laws
of the State of Mississippi.
(i) Severability. If any provision of this Agreement is held invalid,
void or unenforceable under any applicable statute or rule of law, it shall to
that extent be deemed omitted, and the balance of this Agreement shall be
enforceable in accordance with its terms.
(j) Headings Not Controlling. The headings in this Agreement are
for reference purposes only and shall not be construed as a part of this
Agreement.
27. Signatures. Each party represents and warrants that on this date
they are duly authorized to bind their respective principals by their signatures
below.
BRITTON & KOONTZ FIRST NATIONAL BANK
By: ____________________________________ Date: ____________
W. Page Ogden, President
INTERBANK SYSTEMS, INC.
By: ____________________________________ Date: ____________
Bazile R. Lanneau, Jr., President
<PAGE>
Exhibit I
Functional Specification for Electronic Banking System
This exhibit provides a high level overview of the functionality
that will be provided in the Electronic Banking System.
Customer Account Information
1. Review current balance on all available accounts at the
institution. This includes checking, savings, money
market, and credit accounts.
2. Transfer funds between available accounts.
3. Issue stop payment requests against account items.
4. View available information regarding transactions
within each account. This will be enhanced later to
include item images when a document image source is
available.
5. Transfer funds from accounts to other institutions and
accounts.
6. Generate and download Daily and Monthly summary
statements of account activity. The summaries will be
in a plain text approximation of the institutions
current statements.
7. Apply for accounts at the institution. This includes
signing up for Internet access accounts, and banking
accounts including checking, savings, credit, and money
market accounts.
8. Update customer account information, including
addresses and personal information.
9. Submit questions to account representatives.
Bank Account Information
1. Present account information and advertising including
current accounts available, current interest rates, and
available account options.
2. Calculate estimated loan payments based on the account
selected and current interest rate.
3. Submit questions to Customer Service or Sales for
details regarding available accounts.
Bank Advertising
1. Present special announcements for seasonal promotions.
2. Present separate on-line newsletters for customers and
non-customers, or a single newsletter for all users.
3. Present billable advertising space to bank customers,
and collect access information for the advertising.
The current list of deliverables does not include the following
options:
1. Bill Payments.
2. Data exports to accounting packages such as Quicken,
Managing Your Money, or Check Free.
3. Internal message processing, all messages will be
returned via Internet e-mail.
4. Digital Currency.
<PAGE>
Exhibit II
Development Plan
This section outlines the list of deliverable phases in the development process.
Each phase will be delivered to B&K and verified as described in the System
Purchase Agreement. Upon acceptance of each phase, the associated payment is
due as outlined in the Delivery & Payment Schedule which follows.
Phase One-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Phase Two-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Phase Three-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Phase Four-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Phase Five-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Delivery and Payment Schedule-[The text following this subheading has been
accorded confidential treatment by the Commission.]
Deliverable Configurations-[The text following this subheading has been
accorded confidential treatment by the Commission.]
<PAGE>
Exhibit III
InterBank's Background Technology
In delivering the Electronic Banking product to B&K, InterBank
will make use of software products developed out of the scope of
this agreement. These products are embodied in Summit Research's
goal in producing a commercial Internet Service Provider package.
These products include the following:
Kerberos Server Suite
The Kerberos Server is a DES encrypted client/server database
used as an identification authenticator for remote computer
systems and terminal servers. The Kerberos Server Suite is a
collection of programs including a server and maintenance
programs.
News Server Suite
The News Server is a database server used to supply UUCP News.
The News Server Suite is a collection of servers and maintenance
programs for supporting a full Internet news feed.
Mail Server Suite
The Mail Server Suite is a collection of servers and maintenance
programs for supporting an Internet post office.
OS/2 and Network Tools
Summit Research has developed a collection of DOS and OS/2
utilities for general and network use. These tools include
programs like CONTRAST, LS, FINDTRAP, and DUMP.
Dialup User Accounting System
The Dialup User Accounting System is used in conjunction with
Kerberos and SysLog to collect and accumulate user accesses to a
database or terminal server.
Finger Server
The Finger Server is a server allowing the use of a finger
program to inquire file information available from a data source.
SysLog
SysLog is a server which acts as a central data collection point
for receiving system error messages from other servers running on
an Internet network.
The Company's 10-KSB for the fiscal year ended December 31, 1995 was filed on
March 31, 1996 (the "Original 10-KSB"). In the Original 10-KSB, the Company
requested confidential treatment of Exhibits A,B,C and D to Exhibit 10.6.
The Company is withdrawing its request for confidential treatment of Exhibit
A,B and D and certain portions of Exhibit C as indicated in the revised Exhibit
10.6 that is filed herewith.
Exhibit 10.6
INDEPENDENT CONTRACTOR AGREEMENT
This Agreement is made as of January 22, 1996 between
INTERBANK SYSTEMS, INC. ("Client") and SUMMIT RESEARCH, INC.
("Consultant").
1. Definitions. The following definitions shall apply for
purposes of this Agreement:
(a) "Work Product" means all programs, systems, data and
materials, in whatever form, first produced or created by or for
Consultant as a result of, or related to, performance of work or
services under this Agreement. Work Product specifically includes
Consultant's contribution to the electronic banking system created
pursuant to the System Purchase Agreement between Client and
Britton & Koontz First National Bank, and further described in
Exhibits I and II of said System Purchase Agreement. Consultant
acknowledges that it has received and reviewed of a copy of the
System Purchase Agreement.
(b) "Background Technology" means all programs, systems,
data and materials, in whatever form, that do not constitute Work
Product and are: (1) included in, or necessary to, the Work Product;
and (2) owned either solely by Consultant or licensed to Consultant
with a right to sublicense.
Consultant's Background Technology includes, but is not
limited to, the items listed in the attached Exhibit A.
2. Services Performed by Consultant. Consultant agrees to
perform the services for Client required to make timely delivery of the
electronic banking system specified in the System Purchase Agreement
between Britton & Koontz First National Bank and the Client. These
services will conform to the Functional Specifications and
Development Plan outlined in the attached Exhibit's B and C, which
are incorporated and made a part hereof.
3. Consultant's Payment. As compensation in full for the
successful performance of all work and services to be performed
under this Agreement, including any grant of rights and licenses to
Consultant's Work Product and Background Technology, Client shall
pay Consultant according to the Delivery and Payment Schedule
included in the attached Exhibit C, upon acceptance by the Client.
4. Expenses. Client shall reimburse Consultant for all
reasonable travel and living expenses necessarily incurred by
Consultant while away from Consultant's regular place of business and
engaged in the performance of services under this Agreement.
Consultant agrees to maintain appropriate records and to submit copies
of all receipts necessary to verify such expenses at the time and in the
manner prescribed by Client.
5. Invoices. Consultant shall submit invoices for all services
rendered. Client shall pay the amounts agreed to herein upon receipt
of such invoices.
6. Consultant an Independent Contractor. Consultant is an
independent contractor, and neither Consultant nor Consultant's staff
is, or shall be deemed, Client's employees. In its capacity as an
independent contractor, Consultant agrees and represents, and Client
agrees, as follows:
(a) Consultant has the right to perform services for others
during the term of this Agreement subject to noncompetition
provisions set out in this Agreement, if any.
<PAGE>
(b) Consultant has the sole right to control and direct the
means, manner and method by which the services required by this
Agreement will be performed.
(c) Consultant has the right to perform the services required
by this Agreement at any place or location and at such times as
Consultant may determine.
(d) Consultant will furnish all equipment and materials used to
provide the services required by this Agreement, except to the extent
that Consultant's work must be performed on or with Client's
computer or existing software.
(e) The services required by this Agreement shall be
performed by Consultant, or Consultant's staff, and Client shall not be
required to hire, supervise or pay any assistants to help Consultant.
(f) Consultant is responsible for paying all ordinary and
necessary expenses of its staff.
(g) Neither Consultant nor Consultant's staff shall receive any
training from Client in the professional skills necessary to perform the
services required by this Agreement.
(h) Neither Consultant nor Consultant's staff shall be required
to devote full-time to the performance of the services required by this
Agreement.
(i) Client shall not provide any insurance coverage of any kind
for Consultant or Consultant's staff.
(j) Client shall not withhold from Consultant's compensation
any amount that would normally be withheld from an employee's pay.
7. Ownership of Consultant's Work Product. Consultant
hereby assigns to Client its entire right, title and interest in the Work
Product including all patents, copyrights, trade secrets and other
proprietary rights in or based on the Work Product.
Consultant shall execute and aid in the preparation of any
papers that Client may consider necessary or helpful to obtain or
maintain any patents, copyrights, trademarks or other proprietary
rights at no charge to Client, but at Client's expense. Client shall
reimburse Consultant for reasonable out-of-pocket expenses incurred.
8. Ownership of Background Technology. Client agrees that
Consultant shall retain any and all rights Consultant may have in the
Background Technology. Consultant hereby grants Client an
unrestricted, nonexclusive, perpetual, fully paid-up worldwide license
to use and sublicense the use of the Background Technology and any
enhancements thereto for the purpose of developing and marketing its
products, but not for the purpose of marketing Background
Technology separate from its products.
9. Confidential Information.
(a) Consultant agrees that the Work Product is Client's sole
and exclusive property. Consultant shall treat the Work Product on a
confidential basis and not disclose it to any third party without Client's
written consent, except when reasonably necessary to perform the
services under this Agreement. Consultant shall be relieved of this
confidentiality obligation if and when Client discloses the Work
Product without any restriction upon further disclosure.
<PAGE>
(b) During the term of this Agreement and for three years
afterwards, Consultant will not use or disclose to others without
Client's written consent Client's confidential information, except when
reasonably necessary to perform the services under this Agreement.
(c) Client acknowledges and agrees that the confidentiality
restrictions contained in this Agreement shall not apply to the general
knowledge, skills and experience gained by Consultant or Consultant's
employees while engaged by Client.
(d) All information concerning the existence of this Agreement
and the existence of any relationship between Consultant and Client
shall be kept in confidence.
(e) Consultant will not disclose to Client information or
material that is a trade secret of any third party.
10. Noncompetition. Consultant agrees that during
performance of the services required by this Agreement and for two
years after completion, Consultant will not perform the same services
for any competitor of Client in the specific field in which Consultant
is performing services for Client.
11. Term of Agreement. This Agreement will become
effective on the date indicated in the introductory paragraph of this
Agreement, and will remain in effect for twelve (12) months from
such date or until terminated as set forth in the section of this
Agreement entitled "Termination of Agreement."
12. Termination of Agreement.
(a) Each party has the right to terminate this Agreement if the
other party has materially breached any obligation herein and such
breach remains uncured for a period of 30 days after notice thereof is
sent to the other party.
(b) If at any time after commencement of the services required
by this Agreement, Client shall, in its sole reasonable judgment,
determine that such services are inadequate, unsatisfactory, no longer
needed or substantially not conforming to the descriptions, warranties
or representations contained in this Agreement, Client may terminate
this Agreement upon 30 days' written notice to Consultant.
(c) Upon termination of this Agreement for any reason, each
party shall be released from all obligations and liabilities to the other
occurring or arising after the date of termination. However, no
termination shall invalidate the provisions of this agreement which by
their terms are to be performed or continue after termination,
including without limitation, Sections 6, 7, 8, 9, 10, 13, 14, 15, 17
and 18; and, any termination of this Agreement shall not relieve
Client from the obligation to pay Consultant for services rendered
prior to receipt of the notice of termination and for work performed or
hours reserved for Client during the 30-day termination notice period.
13. Return of Materials. Upon termination of this
Agreement, each party shall promptly return to the other all data,
materials and other property of the other held by it.
<PAGE>
14. Warranties and Representations. Consultant warrants
and represents that:
(a) Consultant will not infringe upon any copyright, patent,
trade secret or other property right of any former client, employer or
third party in the performance of the services required by this
Agreement.
(b) Consultant has the authority to enter into this Agreement
and to perform all obligations hereunder, including, but not limited to,
the grant of rights and licenses to the Work Product and Background
Technology and all proprietary rights therein or based thereon.
(c) Consultant has not granted any rights or licenses to any
intellectual property or technology that would conflict with
Consultant's obligations under this Agreement.
15. Indemnities. Consultant agrees to indemnify and hold
harmless Client against all losses and liabilities arising out of or
resulting from any breach of representations, warranties and covenants
in this agreement and against all injuries or death or damage to
property, including theft, on account of performance of work or
services by Consultant or Consultant's employees or subcontractors
pursuant to this Agreement. Consultant shall maintain liability
insurance with respect to damages to property or person sufficient to
fulfill its obligations under this paragraph, in amounts acceptable to
Client, and shall submit proof of such insurance to Client upon
request. Such insurance may not be changed by Consultant during the
term of this Agreement without Client's prior written consent.
16. Employment of Assistants.
(a) Consultant may, at Consultant's own expense, employ such
assistants or subcontractors as Consultant deems necessary to perform
the services required by this Agreement. However, Client shall have
the right to reject any of Consultant's assistants or subcontractors
whose qualifications in Client's good faith and reasonable judgment
are insufficient for the satisfactory performance of the services
required by this Agreement.
(b) Consultant represents that before an employee or
subcontractor of Consultant performs any services required by this
Agreement, Consultant shall either:
(1) provide Client with a signed copy of an employment or
independent contractor/consulting agreement effecting the assignment
to Consultant of such employee's or subcontractor's rights in all
copyrightable or patentable software or other materials he or she
creates as a result of the performance of work or services under this
Agreement; or
(2) deliver to Client an Assignment of Rights ("the
Assignment") in substantially the form attached hereto as Exhibit D
signed by such employee or subcontractor. Consultant shall orally
inform each employee or subcontractor of the substance of the
Assignment before he or she executes such form.
<PAGE>
17. Mediation and Arbitration. Except for the right of
Consultant to bring suit on an open account for simple monies due
Consultant, any dispute arising under this Agreement shall be resolved
through a mediation--arbitration approach. The parties agree to select
a mutually agreeable, neutral third party to help them mediate any
dispute that arises under the terms of this Agreement. If the
mediation is unsuccessful, the parties agree that the dispute shall be
decided by binding arbitration under the rules of the American
Arbitration Association. The decision of the arbitrators shall be final
and binding on the parties and may be entered and enforced in any
court of competent jurisdiction by either party. Costs and fees
associated with the mediation shall be shared equally by the parties.
The prevailing party in the arbitration proceedings shall be awarded
reasonable attorney fees, expert witness costs and expenses, and all
other costs and expenses incurred directly or indirectly in connection
with the proceedings, unless the arbitrators shall for good cause
determine otherwise.
18. General Provisions.
(a) This Agreement is the sole and entire Agreement between
the parties relating to the subject matter hereof, and supersedes all
prior understandings, agreements and documentation relating to such
subject matter. Any modifications to this Agreement must be in
writing and signed by both parties.
(b) If any provision in this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions will continue in full force without being impaired
or invalidated in any way.
(c) This Agreement will be governed by the laws of the State
of Mississippi.
(d) All notices and other communications required or
permitted under this Agreement shall be in writing and shall be
deemed given when delivered personally, or five days after being
deposited in the United States mails, postage prepaid and addressed as
follows, or to such other address as each party may designate in
writing:
Client: InterBank Systems, Inc.
500 Main St.
Natchez, MS 39120
Consultant: Summit Research, Inc.
3321 Lauren Way
Lewisville, TX 75028
(e) This Agreement does not create any agency or partnership
relationship.
(f) This Agreement is not assignable by either party without
the prior written consent of the other.
19. Signatures. Each party represents that they are duly
authorized to bind their respective principals by their signatures
below:
<PAGE>
InterBank Systems, Inc.
_____________________________________ Date:__________
Bazile R. Lanneau, Jr.
President
Summit Research, Inc.
_____________________________________ Date:__________
Richard J. Reppert
President
TIN ___________________
<PAGE>
Exhibit A
Summit's Background Technology
In delivering the Electronic Banking product to InterBank, Summit
will make use of software products developed out of the scope of
this agreement. These products are embodied in Summit Research's
goal of producing a commercial Internet Service Provider package.
These products include the following:
Kerberos Server Suite
The Kerberos Server is a DES encrypted client/server database
used as an identification authenticator for remote computer
systems and terminal servers. The Kerberos Server Suite is a
collection of programs including a server and maintenance
programs.
News Server Suite
The News Server is a database server used to supply UUCP News.
The News Server Suite is a collection of servers and maintenance
programs for supporting a full Internet news feed.
Mail Server Suite
The Mail Server Suite is a collection of servers and maintenance
programs for supporting an Internet post office.
OS/2 and Network Tools
Summit Research has developed a collection of DOS and OS/2
utilities for general and network use. These tools include
programs like CONTRAST, LS, FINDTRAP, and DUMP.
Dialup User Accounting System
The Dialup User Accounting System is used in conjunction with
Kerberos and SysLog to collect and accumulate user accesses to a
database or terminal server.
Finger Server
The Finger Server is a server allowing the use of a finger
program to inquire file information available from a data source.
SysLog
SysLog is a server which acts as a central data collection point
for receiving system error messages from other servers running on
an Internet network.
<PAGE>
Exhibit B
Functional Specification for Electronic Banking System
This exhibit provides a high level overview of the functionality
that will be provided in the Electronic Banking System.
Customer Account Information
1. Review current balance on all available accounts at the
institution. This includes checking, savings, money
market, and credit accounts.
2. Transfer funds between available accounts.
3. Issue stop payment requests against account items.
4. View available information regarding transactions
within each account. This will be enhanced later to
include item images when a document image source is
available.
5. Transfer funds from accounts to other institutions and
accounts.
6. Generate and download Daily and Monthly summary
statements of account activity. The summaries will be
in a plain text approximation of the institutions
current statements.
7. Apply for accounts at the institution. This includes
signing up for Internet access accounts, and banking
accounts including checking, savings, credit, and money
market accounts.
8. Update customer account information, including
addresses and personal information.
9. Submit questions to account representatives.
Bank Account Information
1. Present account information and advertising including
current accounts available, current interest rates, and
available account options.
2. Calculate estimated loan payments based on the account
selected and current interest rate.
3. Submit questions to Customer Service or Sales for
details regarding available accounts.
Bank Advertising
1. Present special announcements for seasonal promotions.
2. Present separate on-line newsletters for customers and
non-customers, or a single newsletter for all users.
3. Present billable advertising space to bank customers,
and collect access information for the advertising.
The current list of deliverables does not include the following
options:
1. Bill Payments.
2. Data exports to accounting packages such as Quicken,
Managing Your Money, or Check Free.
3. Internal message processing, all messages will be
returned via Internet e-mail.
4. Digital Currency.
<PAGE>
Exhibit C
Development Plan
This section outlines the list of deliverable phases in the development process.
Each phase will be delivered to InterBank pursuant to this agreement. Upon
acceptance of each phase, the associated payment is due as outlined in the
Delivery & Payment Schedule which follows.
Phase One-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Phase Two-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Phase Three-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Phase Four-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Phase Five-[The text following this subheading has been accorded confidential
treatment by the Commission.]
Delivery and Payment Schedule-[The text following this subheading has been
accorded confidential treatment by the Commission.]
Deliverable Configurations-[The text following this subheading has been
accorded confidential treatment by the Commission.]
<PAGE>
EXHIBIT D
ACKNOWLEDGMENT OF INDEPENDENT CONTRACTOR STATUS AND ASSIGNMENT OF RIGHTS
1. Independent Contractor Status. I am an employee or
subcontractor of Summit Research, Inc. ("Consultant"). I
acknowledge and agree that Consultant and its employees and
subcontractors are performing the services required by this
Independent Contractor Agreement as independent contractors of
InterBank Systems, Inc. ("Client"), and not as Client's
employees.
2. Assignment of Rights. I assign to Consultant my entire
right, title and interest (including all copyright and patent
rights) in all copyrightable or patentable inventions,
discoveries, improvements, innovations, ideas, designs, drawings,
computer programs, computer code or writings produced or created
by me for Consultant as a result of, or related to, performance
of work or services under this Independent Contractor Agreement.
This assignment is effective as of the date of the creation of
any protectible works created under this Independent Contractor
Agreement.
I will cooperate with all lawful efforts of Consultant to
register and enforce this assignment. I shall execute and aid in
the preparation of any papers that Consultant may consider
necessary or helpful to obtain or maintain any patents,
copyrights, trademarks or other proprietary rights at no charge
to Consultant, but at its expense. Consultant shall reimburse me
for reasonable out-of-pocket expenses incurred.
3. Confidentiality. I acknowledge that all information and
materials I may acquire about Client's business is Client's
confidential and proprietary information. I agree during and
after the term of this Independent Contractor Agreement to hold
such confidential information in strict confidence. I will not
disclose Client's confidential information to anyone other than
employees or agents of Consultant working on this project who
must have such information to perform Consultant's obligations
under this Independent Contractor Agreement unless I obtain
Client's prior written authorization. Upon Client's request, I
will promptly return to Client all originals and copies of all
documents, records, software programs, media and other materials
containing any confidential information of Client.
Employees/Subcontractors
Name (typed or printed) Signature Date
________________________ ________________________ _______________
________________________ ________________________ _______________
________________________ ________________________ _______________
________________________ ________________________ _______________
Accepted by Client: ______________________ Date: _______________
