<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
MAY 15, 1996
------------
Commission File Number: 0-20034
BROADWAY & SEYMOUR, INC.
------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 41-1522214
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
128 SOUTH TRYON STREET, CHARLOTTE NORTH CAROLINA 28202
- ------------------------------------------------ -----
(Address of principal executive offices) (Zip code)
(704) 372-4281
--------------
(Registrant's telephone number, including area code)
Page 1 of 7
<PAGE> 2
Broadway & Seymour, Inc.
Form 8-K Current Report Dated May 15, 1996
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective May 15, 1996, Broadway & Seymour, Inc., a Delaware
corporation ("BSI" or the "Company"), sold certain assets, subject to certain
related liabilities, including the Company's AMtrust and TrustProcessor
software products, to Fidelity Investments Institutional Services Company, Inc.
("Fidelity"), pursuant to an Asset Purchase Agreement (the "Agreement"). In
connection therewith, the Company and Fidelity entered into various ancillary
agreements which relate to the Company licensing to Fidelity certain other
software, the Company providing to Fidelity certain software maintenance and
transition services and Fidelity contracting with the Company for certain
minimum systems integration work in the twenty-four months following execution
of the agreements. The aggregate consideration paid and to be paid to the
Company in connection with these transactions is approximately $30.5 million,
of which approximately $24.2 million was paid at closing for the purchase of
net assets and license of certain software and approximately $6.3 million will
be paid over the next twenty four months for certain software maintenance,
software training, transition services and professional services.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Pro Forma condensed consolidated financial information
(unaudited) of Broadway & Seymour, Inc. as of March 31, 1996 and for
the year ended December 31, 1995 and the three months ended March 31,
1996.
(c) Exhibits.
2.1 Asset Purchase Agreement, dated as of April 10, 1996, by and
among Fidelity Investments Institutional Services Company, Inc.
and Broadway & Seymour, Inc., BancCorp Systems, Inc., Heebink
Group, Incorporated and National Systems Group, Inc. The Exhibits
and Schedules referenced in the table of contents and elsewhere
in the Asset Purchase Agreement have been omitted and will be
furnished to the Commission upon request.
2.1a Amendment No. 1 to Asset Purchase Agreement.
2.2 Quantech License and Services Agreement, dated April 10, 1996,
by and between Fidelity Investments Institutional Services
Company, Inc. and Corbel & Company.
2.3 Licenses and Services Agreement, dated April 10, 1996, by and
between Fidelity Investments Institutional Services Company,
Inc. and BancCorp Systems, Inc.
2.4 Temporary Professional Services Agreement, dated May 15, 1996,
by and between Fidelity Investments Institutional Services
Company, Inc. and Broadway & Seymour, Inc.
2.5 Guaranty and Indemnity Agreement, dated April 10, 1996, by and
between Fidelity Investments Institutional Services Company,
Inc. and Broadway & Seymour, Inc.
2.5a Amendment No. 1 to Guarantee and Indemnity Agreement.
2.6 Transition Services and Support Agreement, dated May 15, 1996,
by and between Fidelity Investments Institutional Services
Company, Inc. and Broadway & Seymour, Inc.
2.7 Agreement and Mutual Release, dated April 10, 1996, by and
between Broadway & Seymour, Inc., BancCorp Systems, Inc.,
Phillip E. Sorrel and Martha A. Sorrell.
99.1 Text of Press Release of Broadway & Seymour, Inc. dated April
11, 1996.
- 2 -
<PAGE> 3
Broadway & Seymour, Inc.
Form 8-K Current Report Dated May 15, 1996
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
OF BROADWAY & SEYMOUR, INC.
(UNAUDITED)
The following information sets forth, for the periods and dates
indicated, unaudited pro forma condensed consolidated financial information for
Broadway & Seymour, Inc. This pro forma information is derived from the
historical consolidated financial statements and reflects the unaudited
condensed consolidated results of operations as if the sale of assets referred
to in Item 2 had occurred as of December 31, 1994 and the unaudited condensed
consolidated balance sheet as if the transaction had occurred on March 31,
1996.
The unaudited pro forma condensed financial information reflects (1)
the estimated impact of the sale of assets to Fidelity and (2) the decrease in
interest expense resulting from the assumed repayment of borrowings with
proceeds from the sale.
The net gain on sale of assets is not reflected in the pro forma
condensed consolidated statement of operations for the periods presented nor
has any interest income from the assumed investment of excess cash during the
periods been reflected. The pro forma condensed consolidated statement of
operations also do not give effect to the nonrecurring service revenues
described in Item 2 "Acquisition or Disposition of Assets."
The pro forma unaudited consolidated financial information is not
necessarily indicative of the consolidated results of operations had the sale
transaction actually been consummated on the assumed dates and should be read
in conjunction with the historical financial statements of Broadway & Seymour,
Inc. included in the respective filings on Form 10-K and Form 10-Q.
- 3 -
<PAGE> 4
Broadway & Seymour, Inc.
Form 8-K Current Report Dated May 15, 1996
BROADWAY & SEYMOUR, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
(a)
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 459 $11,897 $12,356
Receivables 27,644 (6,564) 21,080
Inventories 257 (30) 227
Deferred income taxes 4,507 4,507
Other current assets 1,609 (87) 1,522
------- -------- -------
Total current assets 34,476 5,216 39,692
Property and equipment 9,284 (1,259) 8,025
Software costs 9,286 (1,774) 7,512
Intangible assets 23,678 (3,221) 20,457
Other assets 371 (9) 362
------- -------- -------
$77,095 ($ 1,047) $76,048
======= ======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of
long-term debt $11,588 ($11,303) $ 285
Accounts payable-trade 4,090 4,090
Accrued compensation 1,998 1,998
Estimated liabilities for contract losses 4,517 4,517
Other accrued liabilities 2,847 1,700 4,547
Deferred revenue 11,439 (3,806) 7,633
Income taxes payable 6,800 6,800
------- -------- -------
Total current liabilities 36,479 (6,609) 29,870
------- -------- -------
Long-term debt 443 443
------- -------- -------
Deferred tax liabilities 6,769 (1,855) 4,914
------- -------- -------
Other liabilities 458 458
------- -------- -------
Stockholders' equity:
Common stock 89 89
Paid-in capital 35,128 35,128
Retained earnings (2,271) 7,417 5,146
------- -------- -------
32,946 7,417 40,363
------- -------- -------
$77,095 ($ 1,047) 76,048
======= ======== =======
</TABLE>
(a)
(i) Reflects the assumed sale of certain assets and liabilities to
Fidelity for cash proceeds of approximately $23.2 million and
the estimated gain on the sale, net of income taxes;
(ii) Reflects the assumed repayment of borrowings and the accrual
of certain costs arising in connection with the sale.
- 4 -
<PAGE> 5
Broadway & Seymour, Inc.
Form 8-K Current Report Dated May 15, 1996
BROADWAY & SEYMOUR, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
(a)
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Services $16,914 ($3,937) $12,977
Products 7,819 (511) 7,308
-------- ------ --------
Total revenue 24,733 (4,448) 20,285
-------- ------ --------
Cost of revenue:
Services 16,109 (4,179) 11,930
Products 1,952 (308) 1,644
-------- ------ --------
Total cost of revenue 18,061 (4,487) 13,574
-------- ------ --------
Research and development 1,825 - 1,825
Sales and marketing 3,270 (682) 2,588
General and administrative 2,762 (150) 2,612
Restructuring charge (credit) (205) - (205)
-------- ------ --------
Total expenses 7,652 (832) 6,820
-------- ------ --------
Operating income (980) 871 (109)
Interest income (expense) (175) 175 -
-------- ------ --------
Income (loss) before income taxes (1,155) 1,046 (109)
Provision (benefit) for income taxes (320) 290 (30)
-------- ------ --------
Net income (loss) ($ 835) $ 756 ($ 79)
======== ====== ========
Net income (loss) per common and common
equivalent share: ($ 0.09) ($ 0.01)
======== ========
Weighted average common and common
equivalent shares outstanding 8,856 8,856
</TABLE>
(a)
(i) Reflects decrease in revenue, costs and expenses resulting
from sale of certain net assets to Fidelity;
(ii) Reflects decrease in interest expense resulting from
assumed repayment of borrowings;
(iii) Reflects the income tax effects of the reduction in the
operating loss for the period based on the Company's effective
tax rate.
- 5 -
<PAGE> 6
Broadway & Seymour, Inc.
Form 8-K Current Report Dated May 15, 1996
BROADWAY & SEYMOUR, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
(a)
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
Revenue:
Services $ 74,553 ($12,063) $62,490
Products 40,185 (3,431) 36,754
--------- ------- --------
Total revenue 114,738 (15,494) 99,244
--------- ------- --------
Cost of revenue:
Services 77,777 (17,342) 60,435
Products 15,830 (3,669) 12,161
--------- ------- --------
Total cost of revenue 93,607 (21,011) 72,596
--------- ------- --------
Research and development 6,729 - 6,729
Sales and marketing 15,760 (3,051) 12,709
General and administrative 11,566 (700) 10,866
Restructuring and impairment charges 2,921 - 2,921
--------- ------- --------
Total expenses 36,976 (3,751) 33,225
--------- ------- --------
Operating income (15,845) 9,268 (6,577)
Interest income (expense) (493) 493 -
--------- ------- --------
Income (loss) before income taxes (16,338) 9,761 (6,577)
Provision (benefit) for income taxes (4,958) 2,962 (1,996)
--------- ------- --------
Net income (loss) ($ 11,380) $ 6,799 ($ 4,581)
========= ======= ========
Net income (loss) per common and common
equivalent share: ($ 1.26) ($ 0.51)
========= ========
Weighted average common and common
equivalent shares outstanding 9,043 9,043
</TABLE>
(a)
(i) Reflects decrease in revenue, costs and expenses resulting
from sale of certain net assets to Fidelity;
(ii) Reflects decrease in interest expense resulting from
assumed repayment of borrowings;
(iii) Reflects the income tax effects of the reduction in the
operating loss for the period based on the Company's effective
tax rate.
- 6 -
<PAGE> 7
Broadway & Seymour, Inc.
Form 8-K Current Report Dated May 15, 1996
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BROADWAY & SEYMOUR, INC.
5/30/96 /s/ David A. Finley
----------------- -----------------------------------------------
Date David A. Finley, Executive Vice President and
Chief Financial Officer
- 7 -
<PAGE> 1
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
AMONG
FIDELITY INVESTMENTS INSTITUTIONAL SERVICES
COMPANY, INC.,
as Buyer,
AND
BROADWAY & SEYMOUR, INC., BANCCORP SYSTEMS, INC.
HEEBINK GROUP, INCORPORATED, and
NATIONAL SYSTEMS GROUP, INC., as Sellers
April 10, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
1. Defined Terms..................................................... 1
2. Acquisition of Assets by Buyer.................................... 1
2.1. Purchase and Sale of Assets.................... 1
2.2. Excluded Assets................................ 3
2.3. Assumption of Liabilities...................... 3
2.4. Liabilities Not Assumed........................ 3
2.5. Purchase Price................................. 4
2.6. Adjustment of Purchase Price................... 5
2.7. The Closing.................................... 5
2.8. Deliveries at the Closing...................... 5
2.9. Allocation of Purchase Price................... 5
3. Representations and Warranties of the Sellers..................... 6
3.1. Organization of the Sellers.................... 6
3.2. Authorization of Transaction................... 6
3.3. Noncontravention............................... 6
3.4. Brokers' Fees.................................. 7
3.5. Title to Assets................................ 7
3.6. All Assets Necessary to Conduct Business....... 7
3.7. Subsidiaries................................... 7
3.8. Financial Statements........................... 7
3.9. Absence of Changes............................. 8
3.10. Absence of Undisclosed Liabilities............. 9
3.11. Legal and Other Compliance..................... 9
3.12. Taxes.......................................... 9
3.13. Property, Plant and Equipment.................. 10
3.14. Intellectual Property.......................... 12
3.15. Contracts...................................... 15
3.15.1 General............................... 15
3.15.2 Tier One Customers.................... 15
3.15.3 Proposals............................. 15
3.16. Notes and Accounts Receivable.................. 16
3.17. Powers of Attorney............................. 16
3.18. Insurance and Risk Management.................. 16
3.19. Litigation..................................... 16
3.20. Employees...................................... 16
3.21. Employee Benefits.............................. 17
3.22. Environment, Health, and Safety................ 17
3.23. Affiliated Transactions........................ 18
</TABLE>
-2-
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
3.24. Government Contracts........................... 19
3.25. No Illegal Payments............................ 19
3.26. Consents....................................... 19
3.27. Disclosure..................................... 19
4. Representations and Warranties of the Buyer....................... 19
4.1. Organization of the Buyer...................... 20
4.2. Authority for Agreement........................ 20
4.3. Noncontravention............................... 20
4.4. Brokers' Fees.................................. 20
5. Covenants......................................................... 20
5.1. General........................................ 20
5.2. Hart-Scott-Rodino Act.......................... 21
5.3. Notice of Developments......................... 21
5.4. Sellers' Covenants............................. 21
5.4.1. Operation of Business.................. 21
5.4.2. Preservation of Business............... 21
5.4.3. Full Access............................ 21
5.4.4. Exclusivity............................ 21
5.4.5. Employee Matters....................... 22
5.4.6. Reports................................ 22
5.4.7. Certain Information.................... 22
5.4.8. Royalty Payments....................... 23
5.5. Buyer's Covenants.............................. 23
5.5.1. Employee Matters....................... 23
5.5.2. Revenue Trailer........................ 23
5.5.3. Full Access............................ 23
5.5.4. Assurances............................. 23
6. Conditions to Obligation to Close................................. 23
6.1. Conditions to Obligation of the Buyer.......... 23
6.2. Conditions to Obligations of the Sellers....... 25
7. Covenants after the Closing....................................... 26
7.1. Mutual Non-Solicitation of Employees........... 26
7.2. Non-Competition Agreements..................... 26
7.3. Confidentiality................................ 27
8. Indemnification................................................... 27
8.1. Survival of Representations and Warranties..... 27
8.2. Indemnity by the Sellers....................... 28
</TABLE>
-3-
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
8.3. Indemnity by Buyer............................. 28
8.4. Matters Involving Third Parties................ 28
9. Termination....................................................... 31
9.1. Termination of Agreement....................... 31
9.2. Effect of Termination.......................... 31
10. Definitions....................................................... 31
11. Miscellaneous..................................................... 38
11.1. Press Releases and Public Announcements........ 38
11.2. No Third Party Beneficiaries................... 38
11.3. Entire Agreement............................... 38
11.4. Succession and Assignment...................... 38
11.5. Counterparts................................... 39
11.6. Headings....................................... 39
11.7. Notices........................................ 39
11.8. Further Assurances; Consents................... 40
11.9. Governing Law.................................. 41
11.10. Amendments and Waivers......................... 41
11.11. Severability................................... 41
11.12. Expenses....................................... 41
11.13. Construction................................... 41
11.14. Incorporation of Exhibits and Schedules........ 41
11.15. Specific Performance........................... 42
</TABLE>
-4-
<PAGE> 5
EXHIBITS
<TABLE>
<S> <C>
A - Assignment and Assumption Agreement
B - [OMITTED]
C - AMSG Statement
D-1 - Transition Services and Support Agreement
D-2 - Termination of Alliance Agreement
D-3 - Temporary Professional Services Agreement
E - License and Services Agreement
</TABLE>
SCHEDULES
<TABLE>
<S> <C>
Schedule 2.1 - (a) Furniture, fixture and leasehold improvements
- (b) Leases
- (c) Permits
- (d) Intellectual Property
- (f) Contracts
- (g) Software
- (h) AMSG Software
Schedule 2.2 - Excluded Assets
Schedule 2.3 - Assumed Liabilities
Schedule 2.6 - True-up Procedures
Schedule 3 - Disclosure Schedule -- Exceptions to Representations and
Warranties and Tier One Customer Profile Summaries
Schedule 5.5.2 - Revenue Trailer
Schedule 10.1 - Master Documentation and Test Tables for Amtrust
and AssetManager
Schedule 10.2 - Tier One Customers
</TABLE>
-5-
<PAGE> 6
<TABLE>
<S> <C>
Schedule 10.3 - Amtrust Software
Schedule 10.4 - Asset Manager Software
Schedule 10.5 - Trust Processor Software
</TABLE>
-6-
<PAGE> 7
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into on April
10, 1996 by and among FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY,
INC., a Massachusetts corporation, (the "Buyer"), and BROADWAY & SEYMOUR, INC.
("BSI"), a Delaware corporation, BANCCORP SYSTEMS, INC., a North Carolina
corporation ("BancCorp"), HEEBINK GROUP, INCORPORATED, an Ohio corporation
("Heebink"), and NATIONAL SYSTEMS GROUP, INC., a North Carolina corporation
doing business as Trust Systems, Inc. ("TSI"). BSI, BancCorp, Heebink and TSI
are referred to collectively as the "Sellers" and the Buyer and the Sellers are
referred to collectively herein as the "Parties."
WHEREAS, Buyer desires to purchase from the Sellers, and the Sellers
desire to sell to Buyer, upon the terms and conditions set forth herein,
certain assets of BSI and the other Sellers that relate to BSI's Asset
Management Services Group ("AMSG") and to the business conducted thereby, and
in connection therewith the Buyer will assume certain liabilities relating to
the AMSG Business (as hereinafter defined) and BSI will undertake to provide
certain support services to Buyer, all as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Defined Terms. Certain capitalized terms are used herein with the
meanings provided in Section 10 hereof.
2. Acquisition of Assets by Buyer.
2.1. Purchase and Sale of Assets.
2.1.1. Sellers agree to sell and transfer to the Buyer, and the
Buyer agrees to purchase from Sellers at the Closing for the
consideration hereinafter set forth, subject to and upon the terms and
conditions contained herein, free and clear of any Lien or other
encumbrance of any kind whatsoever, good and marketable title to the
following properties and assets (other than the Excluded Assets) of the
Sellers (collectively, the "Acquired Assets") at their present locations
or such other locations as the Parties may agree:
2.1.1(a) All assets of the Sellers relating to the AMSG Business
reflected on the AMSG Statement and all assets of the Sellers of the same
nature as those reflected on the AMSG Statement that are acquired in the
Ordinary Course of Business between March 31, 1996 and the Closing, other
than any assets reflected on the AMSG Statement which have been disposed
of in the Ordinary Course of Business since
<PAGE> 8
March 31, 1996, all subject to adjustment in accordance with Schedule 2.6
(collectively, the "Balance Sheet Assets"), including without limitation:
(i) all inventory and supplies relating to the AMSG Business;
(ii) all accounts receivable, notes receivable and other
current assets relating to the AMSG Business; and
(iii) all furniture, fixtures and leasehold improvements
owned by the Sellers relating to the AMSG Business, including
without limitation those listed on Schedule 2.1(a);
2.1.1(b) All rights of the Sellers with respect to leasehold
interests relating to the real and personal property used in the AMSG
Business including without limitation those listed on Schedule 2.1(b)
(the "Leases"); provided, however, that the Parties intend that a
leasehold interest in the entire fourth floor of 128 South Tryon Street,
Charlotte, North Carolina at the same rental rate as in BSI's current
real property lease for those premises (the "New Premises") will be
substituted for the space currently occupied by the AMSG Business on the
sixteenth floor of that building and that a sublease of the furniture
(including all partitions, cubicles, desks and chairs) presently located
in the New Premises at the same rental rate as in BSI's current personal
property lease for such furniture will be substituted for the comparable
lease of furniture on said sixteenth floor;
2.1.1(c) All rights of the Sellers under all governmental licenses,
permits, authorizations, approvals, consents and franchises used in
connection with the operation of the AMSG Business or any pending
applications relating to any of the foregoing, including without
limitation all governmental permits, licenses, authorizations, approvals
and consents described in Schedule 2.1(c);
2.1.1(d) All Intellectual Property used in the operation of the
AMSG Business, including without limitation the Intellectual Property
described in Schedule 2.1(d) hereto;
2.1.1(e) All customer, supplier and mailing lists relating to the
AMSG Business;
2.1.1(f) All rights of the Sellers under all the contracts or
agreements relating to the AMSG Business including without limitation all
rights of Sellers under the contracts and agreements listed on Schedule
2.1(f) (the "Contracts");
-2-
<PAGE> 9
2.1.1(g) All Software owned by the Sellers or licensed to the
Sellers, used in the operation of the AMSG Business, including without
limitation all Software listed on Schedule 2.1(g);
2.1.1(h) All AMSG Software, including without limitation that
listed in Schedule 2.1(h); and
2.1.1(i) All other assets of the Sellers of every kind and
description, tangible or intangible, pertaining to or used in the AMSG
Business (other than the Excluded Assets).
2.2. Excluded Assets. There shall be excluded from the Acquired Assets
to be sold, assigned, transferred, conveyed and delivered to Buyer hereunder,
and to the extent in existence on the Closing Date there shall be retained by
the Sellers, all assets, properties and rights of BSI and its Subsidiaries
listed on Schedule 2.2 (collectively, the "Excluded Assets").
2.3. Assumption of Liabilities. On the terms and subject to the
conditions set forth herein, and subject to adjustment in accordance with
Schedule 2.6, from and after the Closing, the Buyer will assume and satisfy or
perform when due only the following Liabilities and obligations of the Sellers
(the "Assumed Liabilities") including:
(a) all Liabilities and obligations of the Sellers under the Leases
listed in Schedule 2.1(b) to the extent they relate to the period after
the Closing;
(b) all Liabilities and obligations of the Sellers under the
Contracts listed in Schedule 2.1(f) except to the extent inconsistent with
the Sellers' representations and warranties in Section 3.15; and
(c) all Liabilities and obligations of the Sellers listed on
Schedule 2.3.
2.4. Liabilities Not Assumed. The Buyer will not assume or perform any
Liabilities or obligations not described in Section 2.3 hereof or, without
limiting the generality of the foregoing, any of the following Liabilities and
obligations:
(a) all Liabilities of the Sellers relating to the AMSG Business
existing as of the date of the AMSG Statement (rather than in any notes
thereto), including all Sellers' costs and expenses in connection with
the Agreement reflected thereon;
(b) all Liabilities of the Sellers relating to the AMSG Business
incurred after the date of the AMSG Statement in the Ordinary Course of
Business;
-3-
<PAGE> 10
(c) any Liability or obligation of the Sellers or any of the
Sellers for income, franchise, transfer, sales, use and other Taxes;
(d) any Liability of the Sellers for the unpaid Taxes of any Person
(other than the Buyer) including Taxes imposed on the Sellers, as a
transferee or successor, by contract, or otherwise;
(e) any Liability of the Sellers for or in respect of any
Indebtedness;
(f) any Liability or obligation of the Sellers to indemnify or
compensate any Person by reason of the fact that such Person was a
director, officer, employee, or agent of the Sellers or was serving at
the request of such entity as a partner, trustee, director, officer,
employee, or agent of another entity;
(g) any Liability of the Sellers for costs and expenses incurred in
connection with this Agreement, the making or performance of this
Agreement and the transactions contemplated hereby;
(h) any Liability or obligation of BancCorp under the Federated
Agreement;
(i) any Liability or obligation of the Sellers to their
employees for wages or benefits, profit-sharing or arising out of any
Employee Benefit Plan established or maintained by the Sellers or to
which the Sellers contribute or any liability or the termination of any
such plan, including without limitation accrued obligations with respect
to paid leave, catastrophic leave, tuition allowances, 401(k) loans
and employee stock purchase plans or any other Liability of Sellers to
any employees relating to compensation or bonuses;
(j) any Liability or obligation of the Sellers to their contractors
and consultants (except as expressly otherwise provided herein); and
(k) any Liability pertaining to the Sellers or their business and
arising out of or resulting from Sellers' noncompliance prior to the
Closing Date with any national, regional or local laws, statutes,
ordinances, rules, regulations, orders, determinations, judgments, or
directives, whether legislatively, judicially or administratively
promulgated (including, without limitation, any Environmental Liabilities
and Costs and Safety Liabilities and Costs whether or not arising out of
or resulting from the Sellers' noncompliance with Environmental Laws or
Safety Laws).
2.5. Purchase Price. As consideration for the Acquired Assets, Buyer
agrees to pay to the Sellers at the Closing an aggregate amount (the "Purchase
Price") equal to the sum of $20,500,000, subject to adjustment as provided in
Section 2.6 hereof, in cash payable by wire
-4-
<PAGE> 11
transfer to the Sellers. Written wire instructions shall be given to
the Buyer by the Sellers at least two business days prior to the Closing.
2.6. Adjustment of Purchase Price. The Parties agree that at the
Closing the Purchase Price shall be calculated and adjusted in accordance with
the true-up procedures set forth in Schedule 2.6.
2.7. The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Ropes & Gray,
One International Place, Boston, Massachusetts, commencing at 10:00 a.m.
eastern time on May 15, 1996 or on such earlier or later date as the Parties
may mutually determine, provided, however, that the Closing shall not be later
than June 30, 1996 (the "Closing Date").
2.8. Deliveries at the Closing. At the Closing, (i) the Sellers will
deliver to the Buyer or its nominee the various certificates, instruments, and
documents referred to in Section 6.1 below; (ii) the Sellers will execute,
acknowledge (if appropriate), and deliver to the Buyer or its nominee (A) the
deeds, bills of sale, licenses and other conveyances relating to the transfer
of the Acquired Assets, (B) to the extent obtained prior to the Closing,
assignments of the Leases and subleases (or delivery of substitute leases),
Intellectual Property listed in Schedule 2.1(d) and Contracts (including
Intellectual Property transfer documents), together with all required consents
thereto, and (C) such other instruments of sale, transfer, conveyance, and
assignment as the Buyer and its counsel may reasonably request; (iii) the Buyer
will execute, acknowledge (if appropriate), and deliver the Assignment and
Assumption Agreement in the form attached hereto as Exhibit A; and (iv) the
Buyer will deliver the consideration specified in Section 2.5, as adjusted
pursuant to Section 2.6.
Delivery of the Acquired Assets shall be made at such locations as the
Buyer shall designate at least ten days prior to the Closing Date. Title to
the Acquired Assets shall pass at the location where delivery is made.
Simultaneously with such delivery, the Sellers will use their best efforts and
take all action as may be necessary to put Buyer in possession and operating
control of the Acquired Assets.
At any time and from time to time after the Closing, at the request of the
Buyer and without further consideration, the Sellers will execute and deliver
such other instruments of sale, transfer, conveyance, assignment and
confirmation and take such action as Buyer may reasonably determine is
necessary to transfer, convey and assign to Buyer or its nominee, and to
confirm Buyer's or Buyer's nominee's title to or interest in the Acquired
Assets, to put Buyer in actual possession and operating control thereof and to
assist Buyer in exercising all rights with respect thereto.
2.9. Allocation of Purchase Price. The Parties agree that the allocation
of the Purchase Price and Assumed Liabilities (and all other capitalized costs)
for the Acquired
-5-
<PAGE> 12
Assets of the Sellers shall be determined on or before the Closing Date. The
Sellers and Buyer shall use such final allocation in all Tax Returns.
3. Representations and Warranties of the Sellers. The Sellers,
jointly and severally, represent and warrant to the Buyer that the
statements contained in this Section 3 are correct and complete as of
the date of this Agreement, except as set forth in the Schedule 3 hereto
(the "Disclosure Schedule"). The Disclosure Schedule will be arranged in
paragraphs corresponding to the numbered subsections contained in this
Section 3.
3.1. Organization of the Sellers. BSI, BancCorp, Heebink and TSI are
corporations, duly organized, validly existing, and in good standing under the
laws of Delaware, North Carolina, Ohio and North Carolina, respectively.
Copies of the articles or certificate of incorporation and bylaws of each of
the Sellers, as amended to date, have been heretofore delivered to Buyer and
are accurate and complete. BSI is qualified to do business as a foreign
corporation in Massachusetts, North Carolina, Texas and every other
jurisdiction in which it is required to be so qualified except for those
jurisdictions where the failure to be so qualified will not have a material
adverse effect on BSI and its Subsidiaries taken as a whole. Each of the other
Sellers is qualified to do business as a foreign corporation in every
jurisdiction in which it is required to be so qualified, except for those
jurisdictions where the failure to be so qualified will not have a material
adverse effect on such other Sellers.
3.2. Authorization of Transaction. Each of the Sellers has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. No approval by the stockholders of BSI of
this Agreement and the transactions contemplated hereby is required by the
charter or by-laws of BSI or by applicable corporate law. All corporate and
other actions or proceedings to be taken by or on the part of each of the
Sellers to authorize and permit the execution and delivery by it of this
Agreement and the instruments required to be executed and delivered by it
pursuant hereto, the performance by each of the Sellers of its obligations
hereunder, and the consummation by each of the Sellers of the transactions
contemplated herein, have been duly and properly taken. This Agreement has
been duly executed and delivered by each of the Sellers and constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms
and conditions.
3.3. Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above),
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any of BSI or its
Subsidiaries is subject or any provision of the charter or by-laws of any of
BSI or its Subsidiaries or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any material agreement, contract (including the Federated Agreement),
lease, license, instrument, or other
-6-
<PAGE> 13
arrangement to which BSI or its Subsidiaries is a party or by which it is bound
or to which any of its assets is subject (or result in the imposition of any
Lien upon any of its assets). None of BSI or its Subsidiaries needs to give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Section 2 above), except for the
required filings under the Hart-Scott-Rodino Act, which filings will be made
promptly after the date hereof.
3.4. Brokers' Fees. The Sellers have no Liability or obligation to
pay any fees or commissions to any broker, finder, agent or financial advisor
with respect to the transactions contemplated by this Agreement for which the
Buyer could become liable or obligated.
3.5. Title to Assets. The Sellers have good and marketable title to,
or a valid and subsisting leasehold interest in, and the power to sell the
Acquired Assets, free and clear of all Liens and adverse claims of any kind.
3.6. All Assets Necessary to Conduct Business. Except for the
Excluded Assets, the Acquired Assets comprise all of the assets, properties and
rights of every type and description, real, personal, tangible and intangible,
currently used by the Sellers in the conduct of the AMSG Business as currently
conducted.
3.7. Subsidiaries. BSI holds of record and owns beneficially all of
the outstanding shares of each of the other Sellers, free and clear of any
restrictions on transfer, Taxes, Liens, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. The minute books
(containing the records of meetings of stockholders, the board of directors,
and any committees of the board of directors), the stock certificate books, and
the stock record books of each Seller are correct and complete in all material
respects. None of the Sellers is in default under or in violation of any
provision of its charter or bylaws.
3.8. Financial Statements. The Sellers have heretofore delivered
(and, in the case of the 1995 Financial Statements, will deliver on or before
April 15, 1996) to the Buyer true, correct and complete copies of the following
financial statements (collectively the "Financial Statements") audited
consolidated balance sheets and statements of income, changes in stockholders'
equity, and cash flow as of and for the fiscal years ended 1993, 1994 and
December 31, 1995 (the latter being referred to herein as the "1995 Financial
Statements") for BSI and its Subsidiaries. The Financial Statements
(including, with respect to the audited financial statements only, the notes
thereto) have been, and the interim financial statement referred in Section
5.4.6 will be, prepared in accordance with GAAP applied on a basis consistent
with BSI's past practices throughout the periods covered thereby, present
fairly the financial condition of BSI and its Subsidiaries as of such dates and
the results of operations of BSI and its Subsidiaries for such periods and are
consistent with the books and records of BSI and its Subsidiaries (which books
and records are correct and complete in all material respects),
-7-
<PAGE> 14
except in the case of the interim financial statements for the lack of footnotes
and subject to year-end adjustments which consist of normally occurring accruals
which will not in the aggregate be material.
Attached hereto as Exhibit C is the AMSG Statement. The AMSG Statement
has been prepared on a basis consistent with the Financial Statements, fairly
reflects the carrying value of the material assets used in the AMSG Business
(except for the Excluded Assets), and is consistent with the books and records
of BSI and its Subsidiaries.
3.9. Absence of Changes. Since December 31, 1995, there has not been
any material adverse change in the business, financial condition, operations or
results of operations of the AMSG Business as a segregated division or of BSI
and its Subsidiaries as a whole, except as heretofore publicly disclosed.
Without limiting the generality of the foregoing, since that date, except as
contemplated by this Agreement:
(a) none of BSI or its Subsidiaries has sold, leased,
transferred or assigned any of its assets, tangible or intangible, other
than for a fair consideration in the Ordinary Course of Business;
(b) none of BSI or its Subsidiaries has entered into any agreement,
contract, lease, or license (or series of related agreements, contracts,
leases, and licenses) except in the Ordinary Course of Business;
(c) no party has imposed any Lien upon any of the assets,
tangible or intangible of BSI and its Subsidiaries;
(d) none of BSI or its Subsidiaries has delayed or postponed the
payment of accounts payable and other Liabilities outside the Ordinary
Course of Business;
(e) none of BSI or its Subsidiaries has granted any license or
sublicense of any rights under or with respect to any Intellectual
Property or the AMSG Software except in the Ordinary Course of Business;
(f) none of BSI or its Subsidiaries has failed to make payment
when due on its outstanding liabilities;
(g) BSI has not modified or changed the application of GAAP
from the manner in which it was applied in the Financial Statements;
(h) there has not been any other occurrence, event, incident,
action, failure to act, or transaction outside the Ordinary Course of
Business involving any of BSI or its Subsidiaries; and
-8-
<PAGE> 15
(i) none of BSI or its Subsidiaries has committed to any of the
foregoing;
except for such transactions which individually or in the aggregate would not
have a material adverse effect on BSI and its Subsidiaries taken as a whole or
the Sellers.
3.10. Absence of Undisclosed Liabilities. None of BSI and its
Subsidiaries has any Liability, except for (i) Liabilities set forth on the
1995 Financial Statements (including the notes thereto); (ii) Liabilities which
have arisen after the date of the 1995 Financial Statements in the Ordinary
Course of Business; (iii) Liabilities arising from the transactions
contemplated by this Agreement; (iv) executory obligations under contracts to
which BSI or any of its Subsidiaries is a party; (v) Liabilities heretofore
publicly disclosed; and (vi) Liabilities which would not have a material
adverse effect on the financial condition of BSI and its Subsidiaries, taken as
a whole.
3.11. Legal and Other Compliance. Each of BSI, its Subsidiaries and
any of their predecessors is in material compliance with all now applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof) the violation of which could
have a material adverse effect on BSI, its Subsidiaries or their operations
taken as a whole, and no action, suit, proceeding, hearing, demand, or notice
nor, to the Knowledge of BSI and its Subsidiaries, any investigation, charge,
complaint, or claim, has been filed or commenced against any of them alleging
any failure so to comply. Neither the ownership nor use of BSI's and its
Subsidiaries' properties nor the conduct of their business as a whole, or the
AMSG Business as a separate division thereof, illegally infringes the rights of
any other Person or violates, with or without the giving of notice or the
passage of time or both will violate, conflict with or result in a default,
right to accelerate or loss of rights under, any terms or provisions of any of
their respective certificates of incorporation or by-laws or license,
agreement, understanding, law, ordinance, rule or regulation, or any order,
judgment or decree to which BSI or its Subsidiaries is a party or by which any
of them may be bound or affected, except for such matters as would not have a
material adverse effect on BSI and its Subsidiaries taken as a whole.
3.12. Taxes.
(a) Each of BSI and the Subsidiaries have filed all Tax
Returns that they were required to file. All such Tax Returns were
correct and complete in all material respects. All Taxes owed by any of
BSI and the Subsidiaries (whether or not shown on any Tax Return) have
been paid. Neither BSI nor any of the Subsidiaries currently are the
beneficiary of any extension of time within which to file any Tax Return.
No claim has ever been made by an authority in a jurisdiction where any
of BSI and the Subsidiaries does not file Tax Returns that it is or may
be subject to taxation by that
-9-
<PAGE> 16
jurisdiction. There are no Liens on any of the assets of any of BSI and
its Subsidiaries that arose in connection with any failure (or alleged
failure) to pay any Tax.
(b) BSI and the Subsidiaries have withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid
or owing to any employee, independent contractor, creditor, stockholder,
or other third party.
(c) Neither BSI nor any Subsidiary expects any authority to
assess any additional Taxes for any period for which Tax Returns have
been filed or should have been filed. There is no dispute or claim
concerning any Tax Liability of BSI or the Subsidiaries either (A)
claimed or raised by any authority in writing or (B) as to which any of
the BSI or its Subsidiaries has Knowledge, or should have had knowledge,
based upon contact with any agent of such authority. Paragraph 3.12
of the Disclosure Schedule identifies all Tax Returns that currently are
the subject of audit.
(d) None of BSI and its Subsidiaries has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency.
(e) None of BSI and its Subsidiaries is a party to any Tax
allocation or sharing agreement. None of BSI and its Subsidiaries has
been a member of an Affiliated Group filing a consolidated federal income
Tax Return (other than a group the common parent of which was BSI).
Neither BSI nor any of its Subsidiaries has any Liability for the Taxes
of any Person (other than BSI and its Subsidiaries) under Treas. Reg.
Section 1.1502-6 (or any provision of state, local or foreign law) as a
transferee or successor, by contract, or otherwise.
3.13. Property, Plant and Equipment.
(a) BSI and its Subsidiaries do not own any real property used in
connection with the AMSG Business.
(b) Schedule 2.1(b) lists and describes all leases of real
property and personal property used in connection with the AMSG Business.
BSI has delivered to the Buyer correct and complete copies of such leases
and subleases which have not been amended or modified since the date
thereof. With respect to each lease and sublease listed in such Schedule:
(i) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect;
-10-
<PAGE> 17
(ii) subject to receiving any necessary consents, the
lease or sublease will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section
2 above);
(iii) the Sellers are not, and to their knowledge no other
party to the lease or sublease, is in breach or default, and no
event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification,
or acceleration thereunder;
(iv) no party to the lease or sublease has repudiated any
provision thereof;
(v) there are no disputes, oral agreements, or forbearance
programs in effect as to the lease or sublease;
(vi) with respect to each sublease, the representations and
warranties set forth in subsections (i) through (v) above are true
and correct with respect to the underlying lease;
(vii) none of BSI or its Subsidiaries has assigned,
transferred, conveyed, mortgaged, deeded in trust, or encumbered
any interest in the leasehold or subleasehold;
(viii) all facilities leased or subleased thereunder have
received all approvals of governmental authorities (including
licenses and permits) required in connection with the operation
thereof as currently operated and have been operated and maintained
in all material respects in accordance with applicable laws, rules,
and regulations; and
(ix) all facilities leased or subleased thereunder are
supplied with utilities and other services necessary for the
operation of said facilities as currently operated.
(c) The Sellers own or lease all machinery, equipment, and other
tangible assets, necessary for the conduct of the AMSG Business as
presently conducted. Each such tangible asset is free from material
defects (patent and latent), has been maintained in accordance with
normal industry practice, is in good operating condition and repair
(subject to normal wear and tear), and is suitable, adequate and
sufficient for the purposes for which it presently is used.
-11-
<PAGE> 18
3.14. Intellectual Property; Software.
(a) BSI and its Subsidiaries own or have the right to use
pursuant to license, sublicense, agreement, or permission all
Intellectual Property and Software necessary or desirable for the
operation of the AMSG Business as presently conducted. Each such item of
Intellectual Property and Software owned or used by any of BSI and its
Subsidiaries in the AMSG Business immediately prior to the Closing
hereunder will be owned or available for use by the Buyer on identical
terms and conditions immediately subsequent to the Closing hereunder.
Except as disclosed in Paragraph 3.14(a) of the Disclosure Schedule, BSI
and its Subsidiaries have taken all necessary action to maintain and
protect (in the United States) each item of Intellectual Property and
Software that BSI and its Subsidiaries own.
(b) BSI and its Subsidiaries own good and marketable title to
the AMSG Software and any Intellectual Property embodied therein, free
and clear of any Liens or adverse claims of any kind. Each item of AMSG
Software owned by any of BSI and its Subsidiaries will be owned and
available for use by the Buyer on identical terms and conditions
immediately subsequent to the Closing hereunder. Except as disclosed in
Paragraph 3.14(b) of the Disclosure Schedule, BSI and its Subsidiaries
have taken all necessary action to maintain and protect each item of AMSG
Software.
(c) Except as disclosed in Paragraph 3.14(c) of the Disclosure
Schedule, none of BSI and its Subsidiaries has in the conduct of the AMSG
Business infringed upon misappropriated or violated any Intellectual
Property rights of third parties, and none of BSI and its Subsidiaries
and the directors and officers (and employees with responsibility for
Intellectual Property matters) of BSI has ever received any charge,
complaint, claim, demand, or notice alleging any such infringement,
misappropriation, or violation (including any claim that BSI must license
or refrain from using any Intellectual Property rights of any third
party). To the Knowledge of any of BSI and its Subsidiaries and the
directors and officers (and employees with responsibility for
Intellectual Property matters) of BSI and the Subsidiaries, no third
party has within the scope of the AMSG Business infringed upon,
misappropriated, or violated any Intellectual Property rights of BSI and
its Subsidiaries.
(d) The use of the AMSG Software by the Buyer in its conduct
of the AMSG Business will not violate the Intellectual Property rights of
any third party. The AMSG Software is free and clear of any claim of
third party infringement of any Intellectual Property right, and there
are no actions proceeding, pending, or to the best knowledge of Sellers,
threatened which claim that the AMSG Software, or any part thereof,
infringes upon any Intellectual Property right of any third party.
-12-
<PAGE> 19
(e) Paragraph 3.14(e) of the Disclosure Schedule identifies
each patent or registration which has been issued to BSI or the
Subsidiaries with respect to any of BSI and its Subsidiaries'
Intellectual Property and Software and AMSG Software used in the AMSG
Business, identifies each pending patent application or application for
registration which the Sellers have made with respect to such
Intellectual Property, Software and AMSG Software, and identifies each
license, agreement, or other permission which BSI and the Subsidiaries
have granted to any third party with respect to such patent or
registration (together with any exceptions). BSI has delivered to the
Buyer correct and complete copies of all such patents, registrations,
applications, licenses, agreements, and permissions (as amended to date)
and has made available to the Buyer correct and complete copies of all
other written documentation evidencing ownership and prosecution (if
applicable) of each such item. Paragraph 3.14(e) of the Disclosure
Schedule also identifies each trade name or unregistered trademark used
by any of BSI and its Subsidiaries in connection with the AMSG Business.
With respect to each item required to be identified in Paragraph 3.14(e)
of the Disclosure Schedule:
(i) except as disclosed in Paragraph 3.14(e) of the
Disclosure Schedule, BSI and its Subsidiaries possesses all right,
title, and interest in and to the item, free and clear of any Lien,
license, or other restriction;
(ii) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(iii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or,
to the Knowledge of BSI and its Subsidiaries, is threatened, which
challenges the legality, validity, enforceability, use, or
ownership of the item; and
(iv) none of BSI and its Subsidiaries has agreed to
indemnify any Person for or against any infringement,
misappropriation, or other violation with respect to the item.
(f) Paragraph 3.14(f) of the Disclosure Schedule identifies
each item of Intellectual Property and Software (other than Excluded
Assets) that any third party owns and that BSI and its Subsidiaries use
in connection with the AMSG Business pursuant to license, sublicense,
agreement, or permission. BSI has delivered to the Buyer correct and
complete copies of all such licenses, sublicenses, agreements, and
permissions (as amended to date). With respect to each item of
Intellectual Property and third party Software required to be identified
in Paragraph 3.14(f) of the Disclosure Schedule:
(i) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and in
full force and effect;
-13-
<PAGE> 20
(ii) the license, sublicense, agreement, or permission
will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of
the transactions contemplated hereby (including the assignments and
assumptions referred to in Section 2 above);
(iii) to the knowledge of BSI and its Subsidiaries, no
party to the license, sublicense, agreement, or permission is in
breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(iv) to the Knowledge of BSI and its Subsidiaries, no party to
the license, sublicense, agreement, or permission has repudiated
any provision thereof;
(v) with respect to each sublicense, the representations and
warranties set forth in subsections (i) through (iv) above are true
and correct with respect to the underlying license;
(vi) the underlying item of Intellectual Property or Software
is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge that would its use by Buyer as it is
presently in the AMSG Business; and
(vii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or,
to the Knowledge of the Sellers, is threatened, which challenges
the legality, validity, or enforceability of the underlying item of
Intellectual Property and Software.
(g) To the Knowledge of any of the Sellers, BSI and
the Subsidiaries will not infringe upon, misappropriate, or otherwise
violate any Intellectual Property rights of third parties as a result of
the continued operation of the AMSG Business as presently conducted or
the continued use of any Intellectual Property or Software as presently
used in the AMSG Business.
(h) The AMSG Software conforms in all material respects with the
Functional Specifications.
(i) BSI and its Subsidiaries either developed the AMSG Software
internally or acquired the AMSG Software by (i) acquisition of the former
developer of such software or (ii) valid assignments. From and after the
date upon which BSI and its Subsidiaries acquired any individual item of
AMSG Software, BSI and its Subsidiaries have developed all proprietary
modifications, enhancements, new versions and
-14-
<PAGE> 21
derivative works relating to such AMSG Software (A) through the internal
efforts of employees of BSI and its Subsidiaries or (B) through the use of
independent contractors or other third parties, all of whom have assigned
all rights in such modifications, enhancements, new versions and
derivative works to BSI and its Subsidiaries.
3.15. Contracts. Except as disclosed in Paragraph 3.15 of the
Disclosure Schedule, the Contracts and Leases listed on Schedule 2.1 include
all the contracts and other agreements relating to the AMSG Business to which
any of BSI or its Subsidiaries is a party, except for the Excluded Assets.
3.15.1 General. BSI has delivered to the Buyer a correct and
complete copy of each written agreement listed in Schedule 2.1 and
Paragraph 3.15 of the Disclosure Schedule contains a written summary
setting forth the terms and conditions of each oral agreement with any of
the customers of the AMSG Business. Except as disclosed in Paragraph 3.15
of the Disclosure Schedule, with respect to each agreement listed in
Schedule 2.1 or Paragraph 3.15 of the Disclosure Schedule: (A) there is no
commitment, obligation or liability of the Sellers which does not appear
on the face of such agreement; (B) the agreement is legal, valid, binding,
enforceable, and in full force and effect; (C) subject to receiving
necessary consents, the agreement will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2
above); (D) to the Knowledge of the Sellers, no party is in breach or
default, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification,
or acceleration, under the agreement; (E) no party has repudiated any
provision of the agreement; and (F) all Documentation with respect to each
such agreement with any Tier One Customer is in compliance in all material
respects with the requirements thereof.
3.15.2 Tier One Customers. The Customer Profile Summaries set
forth in Paragraph 3.15 of the Disclosure Schedule together with the
related Contracts contain all of the material terms, conditions,
commitments and agreements of BSI and its Subsidiaries under or relating
to the Contracts between BSI and its Subsidiaries and the Tier One
Customers. The AMSG Software listed in Schedule 2.1(h) contains all of
the Software and Documentation necessary as of the date hereof for the
performance of all of the material terms, conditions, commitments and
agreements of BSI and its Subsidiaries under or relating to the Contracts
between BSI and its Subsidiaries and the Tier One Customers, except to the
extent of any software development commitments set forth in Paragraph 3.15
of the Disclosure Schedule.
3.15.3 Proposals. Paragraph 3.15.3 of the Disclosure Schedule
sets forth all current and pending proposals to current or prospective
customers of the AMSG Business, correct and complete copies of which have
been provided to the Buyer. All such proposals have been entered into in
good faith, in the Ordinary Course of Business and on terms that are fair
and equitable to the AMSG Business in the good faith opinion of the
Sellers.
-15-
<PAGE> 22
3.16. Notes and Accounts Receivable. All notes and accounts
receivable of BSI and its Subsidiaries related to the AMSG Business are
reflected properly on its books and records in accordance with GAAP, are valid
receivables, arose from bona fide transactions in the Ordinary Course of
Business, subject to no setoffs or counterclaims except as recorded as a
Liability and except as reflected as net of allowance for bad debts or reserve
therefor on the face of the 1995 Financial Statements (rather than in any notes
thereto) as adjusted for the passage of time in accordance with GAAP and past
practice and custom of the Sellers.
3.17. Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of any of the Sellers in respect of the Acquired Assets,
Assumed Liabilities or the AMSG Business.
3.18. Insurance and Risk Management. BSI and its Subsidiaries have in
effect insurance policies (including policies providing property, casualty,
liability, and workers' compensation coverage and bond and surety arrangements)
which provide adequate coverage for all normal risks incident to their assets,
properties and business operations, are in character and amount substantially
similar to that carried by Persons engaged in a business subject to the same or
similar risks, perils or hazards and are in compliance with the insurance
requirements of the Contracts.
3.19. Litigation. Except as disclosed in Paragraph 3.19 of the
Disclosure Schedule, there are no judicial or administrative actions, claims,
suits, proceedings or investigations pending or, to the best of the Sellers'
Knowledge, threatened against any of the Sellers, that might result in any
material adverse change in the condition (financial or otherwise), properties,
assets, business or operations of BSI and its Subsidiaries or the Acquired
Assets or which might materially interfere with the AMSG Business or any part
of the business of BSI and its Subsidiaries as currently conducted, that arise
out of or in connection with the conduct or operation of BSI and its
Subsidiaries or that question the validity of this Agreement or of any action
taken or to be taken pursuant to or in connection with the provisions of this
Agreement. There are no material judgments, orders, decrees, citations, fines
or penalties heretofore assessed against BSI and its Subsidiaries currently
affecting the Acquired Assets under any federal, state or local law.
3.20. Employees. Except as contemplated by this Agreement, none of
the Sellers has any notice that any executive, key employee, or group of
employees has any plans to terminate employment with BSI or its Subsidiaries.
Paragraph 3.20 of the Disclosure Statement sets forth a list of all the
employment agreements, non-competition agreements and confidentiality
agreements entered into by BSI or any of its Subsidiaries with employees
currently engaged in the AMSG Business. BSI and its Subsidiaries have not
experienced any labor disputes or work stoppage due to labor disagreements.
BSI and its Subsidiaries are in compliance in all material respects with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours and have not been and are not
engaged in any
-16-
<PAGE> 23
unfair labor practice as defined in the National Labor Relations Act, as
amended, the violation of which could have a material adverse effect on BSI and
its Subsidiaries or their operations. There is no unfair labor practice charge
or complaint against any of BSI and its Subsidiaries pending or threatened
before the National Labor Relations Board. No grievance which might have an
adverse affect on BSI and its Subsidiaries and their operations or prospects nor
any arbitration proceeding arising out of or under any collective bargaining
agreement is pending and no pending claims therefore have been made. BSI and
its Subsidiaries have no collective bargaining agreement or other agreement
which restricts BSI or any of its Subsidiaries from relocating, closing or
subcontracting any of its operations.
3.21. Employee Benefits. The Sellers have made available to the Buyer
copies of each Employee Benefit Plan relating to the AMSG Business that any of
BSI and its Subsidiaries maintains or to which any of BSI and its Subsidiaries
contributes relating to employees of BSI and its Subsidiaries and any other
profit sharing, stock option, stock purchase, stock appreciation, deferred
compensation, severance, or other material plan or arrangement for the benefit
of current or former directors, officers, or employees.
3.22. Environment, Health, and Safety.
(a) Except as disclosed in Paragraph 3.22 of the Disclosure
Schedule:
(i) BSI and its Subsidiaries are in compliance with all
applicable Environmental Laws and Safety Laws the violation of
which would have a material adverse effect on BSI and its
Subsidiaries and their operations;
(ii) BSI and its Subsidiaries have obtained, and are in
material compliance with the conditions of, all Environmental
Permits required for the continued conduct of the business of BSI
and its Subsidiaries in the manner now conducted the lack of which
or the violation of which would have a material adverse effect on
BSI and its Subsidiaries and its operations;
(iii) BSI and its Subsidiaries have filed all required
applications, notices and other documents necessary to effect the
timely renewal or issuance of all Environmental Permits
required for the continued conduct of the business of BSI and its
Subsidiaries in the manner now conducted the lack of which would
have a material adverse effect on BSI and its Subsidiaries and its
operations;
(iv) none of BSI and its Subsidiaries has received within the
past three years written notice indicating that BSI and its
Subsidiaries, are: (a) in violation of any Environmental Law; (b)
in violation of any Safety Laws; (c) responsible for the on-site or
off-site storage or Release of any Chemical Substance; or, (d)
liable for any Environmental Liabilities and Costs or Safety
Liabilities and
-17-
<PAGE> 24
Costs which would have a material adverse effect on
BSI and its Subsidiaries and its operations;
(v) the Sellers have no knowledge that any of BSI and its
Subsidiaries will become subject to a matter identified in
subsection (iv); and, to Sellers' Knowledge, no investigation or
review with respect to such matters is pending or threatened, nor
has any Authority or other third-party indicated by written notice
to BSI or its Subsidiaries an intention to conduct the same;
(vi) No property presently leased, owned or operated by BSI
and its Subsidiaries (and the area within that property) has been
used by BSI and its Subsidiaries or by any other Person (including
a prior owner or operator) for the storage or disposal of material
quantities of Chemical Substances;
(vii) There are no off-site locations, including, without
limitation, commercial waste disposal facilities or municipal
landfills, to which BSI or its Subsidiaries has, in the last year,
disposed of or at which BSI or its Subsidiaries has, in the last
year, disposed of Chemical Substances originating from BSI, its
Subsidiaries, the Acquired Assets or the business of BSI and its
Subsidiaries in amounts and of a type that would require a waste
manifest under the Resource Conservation and Recovery Act of 1976
as now in effect for treatment, storage, disposal, reuse or
recycling; and
(viii) There are no underground storage tanks owned or
operated at any time by BSI and its Subsidiaries and, to Sellers'
Knowledge, no such tank is leaking or has leaked at any time in the
past in a material manner during the period the tank was owned or
operated by BSI and its Subsidiaries.
(b) For purposes of this Section 3.22 only, all references to the
"BSI" are intended to include any and all other entities to which BSI may
be considered a successor under applicable Environmental Laws. The
representations and warranties in this section are the only
representations and warranties with respect to Environmental Laws or
Environmental Liabilities and Costs, or Safety Laws or Safety Liabilities
and Costs notwithstanding any other language in this Agreement of general
applicability.
3.23. Affiliated Transactions. Except as set forth in Paragraph 3.23
of the Disclosure Schedule or as set forth in the Financial Statements
(including the notes thereto), none of BSI and its Subsidiaries is a party to
or bound by any material contract, commitment or understanding with any of the
stockholders of BSI or any of their Affiliates and none of the BSI's
stockholders and their Affiliates (other than BSI and its Subsidiaries) owns
any asset, tangible or intangible, which is used in the business of any of BSI
and its Subsidiaries.
-18-
<PAGE> 25
3.24. Government Contracts. Except as set forth in Paragraph 3.24 of
the Disclosure Schedule, none of BSI and its Subsidiaries has been and is not
a party to any contract or arrangement with any federal, state or local
government agency relating to the AMSG Business.
3.25. No Illegal Payments, Etc. None of the officers, employees or
agents of BSI and its Subsidiaries, has (a) directly or indirectly given or
agreed to give any illegal gift, contribution, payment or similar benefit to
any supplier, customer, governmental official or employee or other person who
was, is or may be in a position to help or hinder any of BSI and its
Subsidiaries (or assist in connection with any actual or proposed transaction)
or made or agreed to make any illegal contribution, or reimbursed any illegal
political gift or contribution made by any other person, to any candidate for
federal, state, local or foreign public office (i) which might subject any of
BSI and its Subsidiaries to any damage or penalty in any civil, criminal or
governmental litigation or proceeding or (ii) the non-continuation of which has
had or might have, individually or in the aggregate, a material adverse effect
on any of BSI and its Subsidiaries or (b) established or maintained any
unrecorded fund or asset or made any false entries on any books or records for
any purpose described in clause (a) hereof.
3.26. Consents. Paragraph 3.26 of the Disclosure Schedule sets forth a
true, correct and complete list of the identities of any Person whose consent
or approval is required and the matter, agreement or contract to which such
consent relates in connection with the transfer, assignment or conveyance by
the Sellers of any of the Acquired Assets.
3.27. Disclosures. The representations and warranties contained in
this Section 3 (including the Disclosure Schedule) do not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements and information contained in this
Section 3 not misleading.
3.28. Fairness Opinion. The Sellers have received from Goldman, Sachs &
Co. an opinion as to the fairness of the transaction as set forth in this
Agreement which is in form satisfactory to the Board of Directors of BSI.
3.29. Key Employees. The Sellers have reached binding agreements,
contingent only upon consummation of the Closing, with each of Messrs. Spencer,
Wojcieszak, Village, Scott and Sorrell which terminate their respective
employment and non-competition agreements with BSI, provide for the settlement
of all compensation, benefit and earn-out rights of such individuals and
provide for the release any rights such individuals may have to bar the sale
of the AMSG Business or any portion thereof.
4. Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Sellers that the statements contained in this Section
4 are correct and complete as of the date of this Agreement.
-19-
<PAGE> 26
4.1. Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
4.2. Authority for Agreement. The Buyer has full corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. All corporate and other actions and proceedings to be
taken by or on the part of the Buyer to authorize and permit the execution and
delivery by it of this Agreement and the instruments required to be executed
and delivered by it pursuant hereto, the performance of its obligations
hereunder, and the consummation by it of the transactions contemplated herein,
has been duly and properly taken. This Agreement has been duly executed and
delivered by the Buyer and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms and conditions.
4.3. Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above),
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Buyer is subject or any
provision of its charter or bylaws or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Buyer is a party or by which it is bound or to which
any of its assets is subject. The Buyer does not need to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments and
assumptions referred to in Section 2 above), except for filings under the
Hart-Scott-Rodino Act, which filings promptly after the date of this Agreement
will be made.
4.4. Brokers' Fees. The Buyer has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Sellers could become
liable or obligated for which Buyer agrees to indemnify Sellers from all such
claims.
5. Covenants. Except as otherwise provided in Section 7, the
Parties agree that prior to the Closing:
5.1. General. Each of the Parties will use its best efforts to take
all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Section 6 below).
-20-
<PAGE> 27
5.2. Hart-Scott-Rodino Act. Promptly after the date hereof, each of
the Parties will file Notification and Report Forms and related material that
may be required to be filed with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the Hart-Scott-Rodino
Act, and will make any further filings pursuant thereto that may be necessary
in connection therewith.
5.3. Notice of Developments. Each Party will give prompt written
notice to the other Parties of any material adverse development causing a
breach of any of its own representations and warranties in Section 3 and
Section 4 above. No disclosure by any Party pursuant to this Section 5.3,
however, shall be deemed to amend or supplement the Disclosure Schedule or to
prevent or cure any misrepresentations, breach of warranty, or breach of
covenant.
5.4. Sellers' Covenants. The Sellers covenant and agree with the
Buyer as follows:
5.4.1. Operation of Business. Prior to the Closing, BSI will
not (and will not cause or permit any of its Subsidiaries, including
BancCorp, Heebink and TSI, to) engage in any practice, take any action,
or enter into any transaction which affects the AMSG Business except in
the Ordinary Course of Business. Without limiting the generality of the
foregoing, BSI will (and will cause its Subsidiaries to) (i) use best
reasonable efforts to keep available to Buyer the services of BSI and its
Subsidiaries's present officers, employees, agents and independent
contractors relating to the AMSG Business; (ii) use best reasonable
efforts to preserve for the benefit of Buyer the goodwill of Sellers'
customers, suppliers, landlords and others having business relations with
it relating to the AMSG Business; or (iii) not otherwise engage in any
practice, take any action, or enter into any transaction that would have
a material adverse effect on the financial condition of BSI and its
Subsidiaries taken as a whole.
5.4.2. Preservation of Business. BSI will (and will
cause each of its Subsidiaries to) (i) use best reasonable efforts to
keep its business and properties substantially intact, including its
present operations, physical facilities, working conditions, and
relationships with lessors, licensors, suppliers, customers, and
employees, and, (ii) keep, for a period of seven years after the Closing,
all of its financial books and records through the Closing, including
specifically the seven fiscal years ended December 31, 1995.
5.4.3. Full Access. BSI will permit (and will cause each of its
Subsidiaries to permit) representatives of the Buyer to have full access
at all reasonable times, to all premises, properties, personnel, books,
records (including Tax records), contracts, and documents of or
pertaining to the AMSG Business and cause their personnel to cooperate as
reasonably necessary with the Buyer's tax and other representatives.
5.4.4. Exclusivity. BSI will not (and BSI will not cause or
permit any of its Subsidiaries to): (i) solicit, initiate, or
encourage the submission of any proposal or offer from any Person
relating to the acquisition of any capital stock or other voting
securities of any of
-21-
<PAGE> 28
BancCorp, Heebink or TSI, or any substantial portion of the assets of
any of the AMSG Business (including any acquisition structured as a
merger, consolidation, or share exchange) or (ii) participate in any
discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other manner
any effort or attempt by any Person to do or seek any of the foregoing.
BSI and its Subsidiaries will notify the Buyer promptly if any Person
makes any proposal, offer, inquiry, or contact with respect to any of the
foregoing.
5.4.5. Employee Matters. Without creating any Liability which could
become an obligation of the Buyer, the Sellers agree to (i) sever their
relationship with all the employees utilized in the conduct of the AMSG
Business immediately prior to Closing and to pay any and all Liabilities
relating to their employment, including, without limitation any payments
and benefits due such employees up to the Closing Date, including accrued
salary, accrued vacation, wages, bonuses, sales commission, pension,
retirement, savings, health, welfare and other benefits and severance
payments, relocation or similar payments to such employees, (ii) provide
to all such employees any notice (which notice shall be reasonably
acceptable to Buyer) required under any law or regulations in respect of
such termination including, without limitation COBRA, and (iii) release
all such employees from any non-compete or confidentiality restraints
which could affect their continued participation in the AMSG Business
after the Closing.
5.4.6. Reports. BSI agrees to provide Buyer with a copy of its 1995
Annual Report on Form 10-K as soon as it is filed with the Securities and
Exchange Commission and, on or before April 19, 1996, a copy of the
preliminary unaudited consolidated balance sheets and statements of
income, changes in stockholders' equity and cash flows of BSI and its
Subsidiaries for the three months ended March 31, 1996.
5.4.7. Certain Information. During the period between the date of
this Agreement and the Closing, BSI will deliver to the Buyer, within one
business day after entering into the same, a true and complete copy of
(1) any Contract (including, without limitation, any proposal or license)
that may reasonably be expected to involve payments in excess of $100,000
over the term of such Contract or the provision of services having a
value in excess of $100,000 over the term of such Contract, or the
termination of which may reasonably be expected to require payments in
excess of $100,000; and (2) any Contract that involves non-standard
payment terms (whether as to timing, amount or otherwise). BSI will also
deliver to the Buyer, every second Monday, a detailed accounts receivable
aging report showing the status of all accounts receivable of the AMSG
Business as of the previous Friday in form and substance reasonably
satisfactory to the Buyer and, in addition, BSI will promptly inform the
Buyer of (i) any material new commitments or undertakings by the Sellers
which alter the Customer Profile Summaries and (ii) any additions to
Schedule 3.15.3. In addition, BSI will give the Buyer reasonable notice
of any change to the Disclosure Schedule which it deems material. The
Sellers will also provide the Buyer prior to the Closing a list of all
the
-22-
<PAGE> 29
jurisdictions where the Sellers file federal, state, local and foreign
income and sales Tax Returns or with respect to which an extension has
been requested with respect to the Sellers.
5.4.8. Royalty Payments. BSI and TSI agree that, if any claim is
asserted at any time by any customer, including without limitation Bank
of America California, against Buyer for royalties due on enhancements to
the AMtrust Software provided prior to the Closing by such bank which are
subsequently released to other customers or licensees, then BSI and TSI
will dispose of such claim and will hold Buyer harmless against damages
resulting therefrom.
5.5. Buyer's Covenants. The Buyer covenants and agrees with Seller as
follows:
5.5.1. Employee Matters. The Buyer will offer employment at will
to all the employees referred to in Section 5.4.5 who meet Buyer's
customary employment policies and will pay sign-up bonuses in an aggregate
amount of $1,000,000 to Messrs. Spencer, Wojcieszak, Village and Scott at
the time they sign their respective employment agreements with the Buyer.
5.5.2. Revenue Trailer. The Buyer agrees to pay to BSI a portion
of any excess Technology Revenue which may be earned by the Buyer during
the period from the Closing Date through December 31, 2000 as determined
in accordance with Schedule 5.5.2.
5.5.3. Full Access. The Buyer will permit representatives of
the Sellers to have full access at all reasonable times to its personnel,
records (including tax records) and documentation with respect to the
operations of the AMSG Business prior to the Closing and will cause its
personnel to cooperate as reasonably necessary with the Sellers' tax and
other representatives.
5.5.4. Assurances. The Buyer has adequate financial resources
to meet all its obligations hereunder.
6. Conditions to Obligation to Close.
6.1. Conditions to Obligation of the Buyer. The obligation of the
Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(a) Representations and Warranties. All representations and
warranties in Section 3 hereof shall be true and correct in all material
respects at the time of the Closing with the same effect as if made at
that time, subject only to changes in the Ordinary Course of Business
since the date of the AMSG Statement which in the aggregate do not result
-23-
<PAGE> 30
in a material adverse change in the results of operations or the financial
condition of the AMSG Business; all of the terms, conditions and covenants
of this Agreement to be complied with, satisfied and performed by the
Sellers at or before the Closing shall have been complied with, satisfied
and performed; and a certificate to the foregoing effect dated this
Closing Date and signed by the Seller shall have been delivered to the
Buyer.
(b) No Litigation. No action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (i) prevent consummation of any of the
transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (iii) affect materially and adversely the right of the
Buyer to own the Acquired Assets or to operate the AMSG Business as
formerly operated by BSI and its Subsidiaries (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect).
(c) Antitrust Matters. All applicable waiting periods (and any
extensions thereof) under the Hart-Scott-Rodino Act shall have expired or
otherwise been terminated.
(d) Due Diligence. The Buyer shall have completed to its
satisfaction its due diligence investigation of (i) BancCorp Contracts
and Tier One Customer Contracts (including verification of the Customer
Profile Summaries), (ii) Intellectual Property and AMSG Software of the
Sellers and (iii) the AMSG Statement. Without limiting the generality of
the foregoing, all Contracts delivered (or required to be delivered) to
the Buyer pursuant to Section 5.4.7 shall be reasonably satisfactory to
the Buyer in form and substance.
(e) Additional Agreements. The relevant parties shall have
entered into agreements in substantially the form and substance set forth
in Exhibits D-1 through D-3 attached hereto and such agreements shall be
in full force and effect.
(f) Releases and Consents. The Sellers shall have obtained (i)
releases of any Liens affecting the Acquired Assets, including, without
limitation, the Lien held by NationsBank, N.A., and any other Liens
referred to in Paragraph 3.5 of the Disclosure Schedule, (ii) written
consents from the four Tier One Customers identified in Schedule 10.2 to
the assignment by the applicable Seller to Buyer of such Seller's rights
and obligations under their respective Contracts with such Seller and
consents to such assignments, in form and substance satisfactory to Seller
in its sole discretion, from not less than five of the nine other Tier One
Customers identified in Schedule 10.2, (iii) releases from the holders of
any incentive payment agreements, and (iv) consents
-24-
<PAGE> 31
from the Lessors to the assignments or subleases of the Leases identified
in Schedule 2.1(b).
(g) Employees. The employment relationship between the
Sellers and the employees, as contemplated by Section 5.4.5, shall have
been concluded on terms consistent with Section 5.4.5.
(h) All Necessary Actions. All actions to be taken by BSI and its
Subsidiaries in connection with the consummation of the transactions
contemplated hereby and all certificates, opinions, instruments and other
documents, including specifically those enumerated in Section 2.8,
required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Buyer.
(i) Opinion. The Buyer shall have received from Robinson,
Bradshaw & Hinson, PA, counsel to the Sellers, an opinion in the form and
substance reasonably acceptable to the Buyer and its counsel, addressed
to the Buyer, and dated as of the Closing Date.
The Buyer may waive any condition specified in this Section 6.1 if it executes
a written notice so stating at or prior to the Closing and such waiver shall
not be considered a waiver of any other provision in this Agreement unless the
writing specifically so states.
6.2. Conditions to Obligations of the Sellers. The obligation of the
Sellers to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Buyer set forth in Section 4 above shall be true and
correct in all material respects at and as of the Closing Date, subject
only to changes in the Ordinary Course of Business since the date of this
Agreement which in the aggregate do not materially adversely affect the
Buyer; all of the terms, covenants and conditions of this Agreement to be
complied with, performed and satisfied by the Buyer at or before the
Closing shall have been complied with, performed and satisfied; and a
certificate to the foregoing effect dated the Closing Date and signed by
the Buyer shall have been delivered to the Sellers;
(b) Absence of Litigation. No action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign
jurisdiction wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect);
-25-
<PAGE> 32
(c) Antitrust Matters. All applicable waiting periods (and
any extensions thereof) under the Hart-Scott-Rodino Act shall have
expired or otherwise been terminated;
(d) Sublicense. The Buyer and BSI shall have entered into a
Sublicense Agreement substantially in the form of Exhibit E hereto.
(e) Other Agreements. The conditions in clauses (e) and (f)
of Section 6.1 shall have been satisfied.
(f) Opinion. The Sellers shall have received from Ropes &
Gray, counsel to the Buyer an opinion in the form and substance
reasonably acceptable to the Sellers and their counsel, addressed to the
Sellers, and dated as of the Closing Date.
The Sellers may waive any condition specified in this Section 6.2 if they
execute a written notice so stating at or prior to the Closing and such waiver
shall not be considered a waiver of any other provision in this Agreement
unless the writing specifically so states.
6.3. Satisfaction of Conditions. Without waiving any of their rights
under the foregoing Sections 6.1 and 6.2 and in recognition of the fact
that consummation of the transactions contemplated by this Agreement at the
earliest date reasonably practicable is the desired goal of each of the
Parties, the Parties agree that they will cooperate in good faith to seek and
achieve mutually acceptable accommodations to any obstacles to the satisfaction
of the conditions precedent enumerated in this Section 6, including, if
necessary, the designation of a pledgeholder, nominee trust or other vehicle to
hold any rights (other than those specified in Section 6.1(f)(ii)) which may
not be transferable from the Sellers to the Buyer at the Closing.
Notwithstanding the foregoing, each Party acknowledges that economic, business
and legal interests of each other Party may reasonably require that it enforce
any of its rights under Sections 6.1 or 6.2 or elsewhere in this
Agreement.
7. Covenants after the Closing. In addition to the covenants in
Sections 5.4.2, 5.4.3, 5.4.8 and 5.5 which remain in effect after
the Closing, the Parties agree as follows with respect to this period
following the Closing:
7.1. Mutual Non-Solicitation of Employees. The Sellers and the Buyer
mutually covenant and agree that, for a period of one year after the
Closing, neither Party will directly or indirectly without the written consent
of the other Party, recruit, offer employment, employ (including employment as
a consultant), lure or entice away any of the individuals employed by the other
Party in Charlotte, North Carolina, or otherwise to induce such individuals to
leave the employ of the other Party.
7.2. Non-Competition Agreements. The Sellers agree with the Buyer
that on and after the Closing Date (i) each of the individuals who was an
employee of the AMSG Business
-26-
<PAGE> 33
immediately prior to the Closing and who is thereafter offered employment by the
Buyer in accordance with Section 5.5.1 hereof shall be, without further act of
the Sellers, fully and forever released from the non-competition and
confidentiality agreements which he or she had with any of the Sellers and (ii)
that the Sellers will neither assert against any such individual any claim for
damages or specific performance with respect to such agreements nor assert any
claim for damages or interference against the Buyer or its Affiliates as a
result of employing any such individual. The Sellers hereby assign to the Buyer
all non-compete and confidentiality agreements still in effect which they have
with former employees of the AMSG Business to the extent permitted by such
agreements.
7.3. Confidentiality. Each of the Parties will treat and hold as such
all of the Confidential Information of the other Parties, refrain from using
any of the Confidential Information except in connection with this Agreement,
and deliver promptly to the Party to which it relates or destroy, at the
request and option of such Party, all tangible embodiments (and all copies) of
the Confidential Information which are in its possession. In the event that
any of the Parties is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena,
civil investigative demand, or similar process) to disclose any Confidential
Information of any other Party, such Party will notify the other Party promptly
of the request or requirement so that the other Party may seek an appropriate
protective order or waive compliance with the provisions of this Section 7.3.
If, in the absence of a protective order or the receipt of a waiver hereunder,
any of the Parties is, on the advice of counsel, compelled to disclose
Confidential Information of any other Party, to any tribunal or else stand
liable for contempt, such Party may disclose the Confidential Information to
the tribunal; provided, however, that the disclosing Party shall use its best
efforts to obtain, at the request of the other Party, an order or other
assurance that confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as the other Party shall
designate.
Notwithstanding the foregoing, BSI and its Subsidiaries may, after the
Closing, utilize in their continuing business operations any Confidential
Information relating to the AMSG Business which was in its possession prior to
the Closing.
8. Indemnification.
8.1. Survival of Representations and Warranties. All of the
representations and warranties of the Sellers and the Buyers contained herein
or in any document, certificate or other instrument required to be delivered
hereunder shall survive the Closing and continue in full force and effect,
subject to Section 8.5(b) and to any applicable statutes of limitations. All
covenants and indemnities of any Party in this Agreement or in any document or
certificate delivered hereunder shall, unless otherwise specifically provided
therein, remain in full force and effect forever. The rights of
indemnification set forth in this Section 8 are the exclusive
-27-
<PAGE> 34
remedy of any of the Parties with respect to any of the matters within the scope
of this Section 8.
8.2. Indemnity by the Sellers. The Sellers hereby agree to indemnify,
defend and hold harmless Buyer and its directors, officers and Affiliates
against and in respect of all Liabilities, obligations, judgments, Liens,
injunctions, charges, orders, decrees, rulings, damages, dues, assessments,
Taxes, losses, fines, penalties, expenses, fees, costs or amounts paid in
settlement (including reasonable attorneys' and expert witness fees and
disbursements in connection with investigating, defending or settling any
action or threatened action), arising out of any claim, damages, complaint,
demand, cause of action, audit, investigation, hearing, action, suit or other
proceeding asserted or initiated or otherwise existing in respect of any
matter (a "Loss" or collectively, the "Losses") that results from:
(a) the breach of any representation, warranty or covenant
made by the Sellers herein, or resulting from any misrepresentation or
breach of warranty or from any misrepresentation in or omission from any
Schedule or certificate required to be furnished by Sellers hereunder;
and
(b) any Liability of the Sellers which is not an Assumed
Liability (including any Liability of the Sellers that becomes a
Liability of the Buyer under any bulk transfer law of any jurisdiction,
under any common law doctrine of de facto merger or successor liability,
or otherwise by operation of law).
8.3. Indemnity by Buyer. Buyer hereby agrees to indemnify, defend and
hold harmless Sellers and their respective directors, officers and Affiliates
against and in respect of all Losses arising out of any claim, complaint,
demand, cause of action, audit, investigation, hearing, action, suit or other
proceeding asserted or initiated in respect of any matter that results from the
inaccuracy of any representation or warranty made by Buyer herein, or resulting
from any misrepresentation, breach of warranty or nonfulfillment of any
agreement or covenant of Buyer, including Buyer's agreement to assume certain
Liabilities of BSI and its Subsidiaries pursuant to Section 2.3 of this
Agreement, contained herein or in any agreement or instrument required to be
entered into in connection herewith or from any misrepresentation in or
omission from any schedule, document, certificate or other instrument required
to be furnished by Buyer hereunder.
8.4. Matters Involving Third Parties.
(a) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any other
Party (the "Indemnifying Party") under this Section 8, then the
Indemnified Party shall promptly notify each Indemnifying Party thereof
in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying any
-28-
<PAGE> 35
Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A)
the Indemnifying Party notifies the Indemnified Party in writing within
15 days after the Indemnified Party has given notice of the Third Party
Claim that the Indemnifying Party will indemnify the Indemnified Party
from and against the entirety of any Losses within the scope of Section
8.2(a) or (b) or Section 8.3, respectively, the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified
Party that the Indemnifying Party will have the financial resources to
defend against the Third Party Claim and fulfill its indemnification
obligations hereunder, (C) the Third Party Claim involves only money
damages and does not involve an injunction or other equitable relief
which, in the reasonable opinion of the Indemnified Party, materially
affects its business and (D) the Indemnifying Party conducts the defense
of the Third Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the
defense of the Third Party Claim in accordance with Section 8.4(b) above,
(A) the Indemnified Party may retain separate co-counsel at its sole cost
and expense and participate in the defense of the Third Party Claim, (B)
the Indemnified Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim without
the prior written consent of the Indemnifying Party (which consent shall
not unreasonably be withheld), and (C) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim unless written agreement is obtained
releasing the Indemnified Party from all liability thereunder.
(d) In the event any of the conditions in Section 8.4(b) above
is or becomes unsatisfied, however, (A) the Indemnified Party may defend
against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it may
deem appropriate (provided that the Indemnified Party shall consult with
and obtain the consent (which shall not be unreasonably withheld), of any
Indemnifying Party in connection therewith), (B) the Indemnifying Parties
will reimburse the Indemnified Party promptly and periodically for the
costs of defending against the Third Party Claim (including reasonable
attorneys' fees and expenses), and (C) the Indemnifying Parties will
remain responsible for any Losses the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused
by the Third Party Claim to the fullest extent provided in this Section
8. In the event the Indemnified Party assumes control of the defense of
any Third Party claim as herein
-29-
<PAGE> 36
provided, the Indemnifying Party may nevertheless retain separate counsel
at its sole cost and expense to participate in the defense thereof and to
consult with counsel for the Indemnified Party with respect to conduct of
the defense and to considerations relating to entry of judgment or
settlement.
(e) In the event of a Third Party Claim arises out of a breach
of warranty or contract claim against the Sellers with respect to any
Contract assumed by the Buyer under the Agreement and the Sellers elect
to resolve such claim by providing remedial services, then at the request
of the Sellers the Buyer agrees to provide the services requested on its
usual and customary terms and conditions, at the Sellers' sole expense.
8.5. Limitations on Indemnification.
(e) Monetary Limits. Except with respect to (i) Losses
arising out of representations or warranties contained in Section 3.14
or any Schedule referred to in such Section, (ii) Losses arising out of
Excluded Liabilities, (iii) Losses of the type referred to in Section
8.4(e), and (iv) Losses based upon fraud or which arise out of or are
attributable to acts or omissions taken or made prior to the Closing in
connection with the AMSG Business that constitutes willful misconduct or
malfeasance, gross negligence or criminal conduct, the Sellers as
Indemnifying Parties shall have no obligations to indemnify the Buyer in
respect of any Loss of a type identified in Sections 8.2 and 8.4
incurred by the Buyer unless the aggregate cumulative total of all such
Losses exceeds $250,000, whereupon the Buyer shall be entitled to
indemnification for each additional amount of such Losses described
above; provided, that the Sellers' indemnity obligations under this
Section 8.5 shall be joint and several; and provided, further, that in no
event shall the aggregate indemnity obligation of the Sellers exceed the
Purchase Price. With respect to claims referred to in clauses (i), (ii)
and (iii) of this Section 8.5(a), the $250,000 cumulative deductible
shall not apply.
The Buyer as Indemnifying Party shall have no obligation to
indemnify the Sellers in respect of any Loss of a type identified in
Sections 8.3 and 8.4 incurred by the Sellers unless the aggregate
cumulative total of all such Losses exceeds $250,000, whereupon the
Sellers shall be entitled to indemnification for each additional amount
of such Losses. With respect to claims arising from Assumed Liabilities,
the $250,000 cumulative deductible shall not apply.
(b) Time Limitation. Except for claims asserted by the Buyer
for Losses related to unpaid Taxes of the Sellers or their predecessors
and Losses referred to in clause (i) of Section 8.5(a), no claim may be
made or suit instituted under any provision of this Section 8 following
the second anniversary of the Closing Date.
-30-
<PAGE> 37
9. Termination.
9.1. Termination of Agreement. Certain of the Parties may terminate
this Agreement as provided below:
(a) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Closing;
(b) the Buyer may terminate this Agreement by giving written
notice to the Sellers at any time prior to the Closing (A) in the event
the Sellers have breached any representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has
notified the Sellers of the breach, and the breach has continued without
cure for a period of 30 days after the notice of breach or (B) if the
Closing shall not have occurred on or before June 30, 1996, by reason of
the failure of any condition precedent under Section 6.1 hereof (unless
the failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
(c) the Sellers may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event the
Buyer has breached any representation, warranty, or covenant contained in
this Agreement in any material respect, BSI and its Subsidiaries has
notified the Buyer of the breach, and the breach has continued without
cure for a period of 30 days after the notice of breach or (B) if the
Closing shall not have occurred on or before June 30, 1996, by reason of
the failure of any condition precedent under Section 6.2 hereof (unless
the failure results primarily from BSI and its Subsidiaries itself
breaching any representation, warranty, or covenant contained in this
Agreement).
9.2. Effect of Termination. If any Party terminates this Agreement
pursuant to Section 9.1 above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other Party
(except for obligations under Section 7.3) and any Liability of any Party then
in breach.
10. Definitions.
"Acquired Assets" shall have the meaning set forth in Section 2.1.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
Section 1504(a) or any similar group defined under a similar provision of
state, local, or foreign law.
-31-
<PAGE> 38
"Agreement" means this Agreement, including all Schedules and Exhibits, as
the same may be amended from to time to time.
"AMSG Business" means the licensing of AMSG Software to users (in the
trust and investment markets) and the provision to such users of services
related to the AMSG Software, including installation, conversion, consulting,
product integration, customization, maintenance and enhancements, support and
the operation of the AMSG Software in a service bureau environment.
"AMSG Statement" means the schedule of assets and liabilities of the AMSG
Business as a separate division (as distinct from the consolidated figures for
BSI and its Subsidiaries as a whole) as of March 31, 1996 prepared by the
Sellers, together with detailed itemization and appropriate aging of the
accounts receivable listed. Such schedule does not reflect shared assets or
related Liabilities.
"AMSG Software" means the TrustProcessor Software, the AMtrust Software
and the Asset Manager Software.
"AMtrust Software" means the AMtrust base system developed by TSI,
including each subsystem and part thereof, and all proprietary subsequent
enhancements, modifications and improvements thereto, up to and including
version 9.0 or the latest version, including without limitation all related
Documentation, whether in source code, object code or human readable form, as
further described in Schedule 10.3.
"Asset Manager Software" means the suite of client/server products
developed by BSI, designed to run on workstations either in connection with the
Amtrust Software, AMpreferred or in a stand alone environment, including each
subsystem and part thereof, and all proprietary enhancements, modifications and
improvements through the most recent version available, including all related
Documentation and materials, whether in source code, object code or human
readable form, as further described in Schedule 10.4.
"Assumed Liabilities" shall have the meaning in Section 2.3.
"Buyer" has the meaning set forth in the preamble above.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements.
"Chemical Substance" means any chemical substance, including but not
limited to any: (i) pollutant, contaminant, irritant, chemical, raw material,
intermediate, product, by-product, slag, construction debris; (ii) industrial,
solid, liquid or gaseous toxic or hazardous substance, material or waste, (iii)
petroleum or any fraction thereof; (iv) asbestos or asbestos-containing
-32-
<PAGE> 39
material; (v) polychlorinated biphenyl; (vi) chlorofluoracarbons; and, (vii)
any other substance, material or waste, which is regulated under any
Environmental Law or Safety Law, as now and hereinafter in effect, or other
comparable laws.
"Closing" has the meaning set forth in Section 2.7.
"Closing AMSG Statement" means a schedule of the assets and liabilities of
the AMSG Business as of the close of business on the day immediately preceding
the Closing Date, prepared on a basis consistent with the AMSG Statement.
"Closing Date" has the meaning set forth in Section 2.7.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any and all information concerning the
businesses and affairs of any of the Parties that is not already generally or
readily obtainable by the public, including without limitation all such
information contained in the Disclosure Schedule or otherwise disclosed in
connection with this Agreement. "Confidential Information" shall not include
information that is or becomes publicly known or is otherwise lawfully acquired
by any Party through no breach of this Agreement or which any Party had in its
possession prior to its disclosure by another Party.
"Contracts" has the meaning set forth in Section 2.1.1(f).
"Controlled Group of Corporations" has the meaning set forth in Code
Section 1563.
"Copyrights" means United States and foreign copyrights, whether
registered or unregistered, and pending applications to register the same.
"Customer Profile Summary" means summaries of the contractual arrangements
with each of the fifteen (15) Tier One Customers which are incorporated in
Paragraph 3.15 of the Disclosure Schedule.
"Deferred Intercompany Transaction" has the meaning set forth in Treas.
Reg. Section 1.1502-13.
"Disclosure Schedule" has the meaning set forth in Section 3.
"Documentation" means all written, graphic and electronic materials
currently in BSI and its Subsidiaries' possession that describe the structure,
function or use of the AMSG Software, including all specifications, system
documentation and user manuals.
-33-
<PAGE> 40
"Employee Benefit Plan" means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan,
(b) qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(1).
"Environment" means real property and any improvements thereon, and also
includes, but is not limited to, ambient air, surface water, drinking water,
groundwater, land surface, subsurface strata and water body sediments.
"Environmental Laws" mean any federal, state, local and foreign law,
regulation or legal requirement relating to pollution, or protection or cleanup
of the Environment, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act of 1976, as amended, the Clean Air Act,
as amended, the Clean Water Act, as amended, and any other law or legal
requirement, as now in effect (including rules, regulations, codes, plans,
injunctions, judgments, order, decrees, rulings and charges thereunder),
relating to: (a) the Release, containment, removal, remediation, response,
cleanup or abatement of any sort of any Chemical Substance; (b) the
manufacture, generation, formulation, processing, labeling, distribution,
introduction into commerce, use, treatment, handling, storage, recycling,
disposal or transportation of any Chemical Substance; (c) exposure of persons,
including employees, to any Chemical Substance; or, (d) the physical structure,
use or condition of a building, facility, fixture or other structure,
including, without limitation, those relating to the management, use, storage,
disposal, cleanup or removal of asbestos, asbestos-containing materials,
polychlorinated biphenyls or any other Chemical Substance.
"Environmental Liabilities and Costs" means all Losses incurred: (i) that
are required by a governmental agency or third party in order to comply with
any Environmental Law; (ii) that are required by a governmental agency or third
party as a result of a Release of any Chemical Substance; or, (iii) that are
required by a governmental agency or third party as a result of any
environmental conditions present at, created by or arising out of the past or
present operations of Sellers through the Closing Date or of any prior owner or
operator of a facility or site at which Sellers now operate or have previously
operated.
"Environmental Permit" means any Permit or authorization from any
governmental authority required under, issued pursuant to, or authorized by any
Environmental Law.
-34-
<PAGE> 41
"Excluded Assets" has the meaning set forth in Section 2.2 below.
"Extremely Hazardous Substance" has the meaning set forth in Section 302
of the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"Federated Agreement" means the Agreement, dated as of June 1, 1994, among
BancCorp, Federated Administrative Services, Inc., Federated Administrative
Services and Federated Securities Corp.
"Fiduciary" has the meaning set forth in ERISA Section 3(21).
"Functional Specifications" means the functional specifications with
respect to the AMSG Software set forth in the most current version of the user
documentation, either written or on line, including all materials outlined in
Schedule 10.1.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Indebtedness" has the meaning set forth in Section 3.9.
"Indemnified Party" has the meaning set forth in Section 8.4.
"Indemnifying Party" has the meaning set forth in Section 8.4.
"Intellectual Property" means Patent Rights, Copyrights, Trademarks, Trade
Secrets and proprietary information.
"Knowledge" means as to any Party actual knowledge of the executive
officers of such Party after reasonable investigation and, with respect to
Section 3.12, the individual with primary responsibility for tax matters.
"Leases" has the meaning set forth in Section 2.1.1(b).
"Liability" means any Liability or obligation (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, whether incurred or
consequential and whether due or to become due), including any liability for
Taxes.
-35-
<PAGE> 42
"Lien" means any mortgage, pledge, lien, charge, claim, equity,
encumbrance, restriction on transfer, conditional sale or other title retention
device or arrangement (including, without limitation, a capital lease),
transfer for the purpose of subjection to the payment of any Indebtedness, or
restriction on the creation of any of the foregoing, whether relating to any
property or right or the income or profits therefrom; provided, however, that
the term "Lien" shall not include (i) statutory liens for Taxes to the extent
that the payment thereof is not in arrears or otherwise due or to the extent
the taxpayer is contesting in good faith through appropriate proceedings, (ii)
encumbrances in the nature of zoning restrictions, easements, rights or
restrictions of record on the uses of real property if the same do not detract
from the value of the property encumbered thereby or impair the use of such
property in the business of BSI and its Subsidiaries as currently conducted,
(iii) statutory or common law liens to secure landlords, lessors or renters
under leases or rental agreements confined to the premises rented to the extent
that no payment or performance under any such lease or rental agreement is in
arrears or is otherwise due, (iv) deposits or pledges made in connection with,
or to secure payment of, worker's compensation, unemployment insurance, old age
pension programs mandated under applicable laws or other social security
regulations and (v) statutory or common law liens in favor of carriers,
warehousemen, mechanics and materialmen, statutory or common law liens to
secure claims for labor, materials or supplies and other like liens, which
secure obligations to the extent that payment thereof is not in arrears or
otherwise due.
"Loss" or "Losses" has the meaning set forth in Section 8.2.
"New Premises" has the meaning set forth in Section 2.1.1(b).
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).
"Parties" has the meaning set forth in the preamble above.
"Patent Rights" means United States and foreign patents, patent
applications, continuations, continuations-in-part, divisions, reissues, patent
disclosures, inventions (whether or not patentable) or improvements thereto.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Purchase Price" has the meaning set forth in Section 2.5.
"Release" means any actual, threatened or alleged spilling, leaking,
pumping, pouring, emitting, dispersing, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing of any Chemical Substance into the
Environment that may cause an Environmental Liability and
-36-
<PAGE> 43
Cost (including the abandonment or discarding of barrels, containers, tanks or
other receptacles containing or previously containing any Chemical Substance).
"Safety Laws" means any federal, state, local and foreign law, regulation
or legal requirement relating to health or safety, including the Occupational
Safety and Health Act, as amended, as now in effect relating to (a) exposure of
employees to any Chemical Substance or (b) the physical structure, use or
condition of a building, facility, fixture or other structure, including,
without limitation, those relating to equipment or manufacturing processes, or
the management, use, storage, disposal, cleanup or removal of any Chemical
Substance.
"Safety Liabilities and Costs" means all Losses incurred to comply with
any Safety Law or as a result of any health or safety conditions present at,
created by or arising out of the past or present operations of BSI and its
Subsidiaries through the Closing Date.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Software" means computer software programs and software systems (other
than the AMSG Software and the Excluded Assets), used in the AMSG Business as
presently conducted.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Tax" or "Taxes" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar, including FICA), unemployment, disability, real property,
personal property, sales, use, transfer, registration, value added, alternative
or add-on minimum, estimated, or other tax of any kind whatsoever, including
any interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Tier One Customers" means the institutions listed in Schedule 10.
"Trademarks" means United States and foreign trademarks, service marks,
trade dress, trade names and logos, whether registered or unregistered, and
pending applications to register
-37-
<PAGE> 44
the foregoing, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith.
"Trade Secrets" means confidential ideas, trade secrets, know-how,
concepts, methods, processes, formulas, reports, data, customer lists, mailing
lists, business plans, or other proprietary information.
"TrustProcessor Software" means the current version of the trust
accounting software system owned by BancCorp known as "TrustProcessor",
including each subsystem and part thereof, and all proprietary enhancements,
modifications and improvements through the most recent version available, and
all related Documentation, whether in source code, object code or human
readable form, as further described in Schedule 10.5.
11. Miscellaneous.
11.1. Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written
approval of the other Party; provided, however, that any Party may make any
public disclosure it believes in good faith, based on the opinion of its
counsel, is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing Party
will use its best efforts to advise the other Party prior to making the
disclosure).
11.2. No Third Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns, except for the release and
discharge in Section 7.2 which is intended to benefit the identified AMSG
employees.
11.3. Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
11.4. Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other Party and any such attempted assignment shall be
null and void; provided, however, that the Buyer may (i) assign any or all of
its rights and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations hereunder,
provided that such assignment shall not release the Buyer from its obligations.
-38-
<PAGE> 45
11.5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
11.6. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.7. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) upon
confirmation of facsimile, (ii) when sent by overnight delivery and (iii) when
mailed by registered or certified mail return receipt requested and postage
prepaid at the following address:
If to the Sellers:
Broadway & Seymour, Inc.
128 South Tryon Street
Charlotte, North Carolina 28202
Attention: General Counsel
Telecopy: (704) 344-3542
Copy to:
Robinson, Bradshaw & Hinson, PA
One Independence Center
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246-1900
Attention: Robert Bryan, Esq.
Telecopy: (704) 378-4000
If to the Buyer:
Fidelity Investments Institutional Services Company, Inc.
Fidelity Systems Company
82 Devonshire Street
Boston, MA 02109
Attention: Jay Freedman
Telecopy: (617) 476-0932
-39-
<PAGE> 46
Copy to:
Ropes & Gray
One International Place
Boston, MA 02110
Attention: John A. Ritsher
Telecopy: (617) 951-7050
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient.
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Party notice in the manner herein set forth.
11.8. Further Assurances; Consents. From time to time, at the Buyer's
request and without further consideration, the Sellers will execute and
deliver, or cause to be executed and delivered, such other instruments of
conveyance and transfer and take such other actions, or cause such other
actions to be taken, as the Buyer may reasonably deem necessary or desirable
more effectively to convey and transfer to, and vest in, the Buyer the property
to be transferred hereunder and to effectuate the purposes of this Agreement.
To the extent that any transfers contemplated by this Agreement shall not have
been consummated on or prior to the closing date, the parties shall cooperate
to effect such transfers as promptly following the closing date as shall be
practicable. Nothing herein or in any deeds, endorsements, assignments, or
other instruments of conveyance executed hereunder shall be deemed to require
the transfer of any assets or the assumption of any liabilities which by their
terms or operation of law cannot be transferred or assumed without necessary
consents or approvals; provided, however, that the Sellers and Buyer shall
cooperate to seek to obtain any such consents or approvals necessary for the
transfer and assumption contemplated by this Agreement. In the event that any
such transfer of assets or liabilities has not been consummated by the closing
date, Sellers shall thereafter hold such asset in trust for the use and benefit
of the Buyer (at the expense of the Buyer) or retain such liability for the
account of the Buyer, such that, insofar as reasonably possible, the Parties
shall be placed in the same position as would have existed had such asset or
liability been transferred or assumed on the closing date as contemplated
hereby. Neither party shall be liable to the other party for any delay in
making any transfer contemplated by this Agreement or any failure to obtain any
consent or approval required in connection with any such transfer (or the
termination of any contract, permit, or lease as a result of such failure),
provided that such delay, failure or termination was not the result of gross
negligence or willful misconduct by the party causing such result.
-40-
<PAGE> 47
11.9. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the Commonwealth of
Massachusetts without giving effect to any choice or conflict of law provision
or rule (whether of the Commonwealth of Massachusetts or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the Commonwealth of Massachusetts.
11.10. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent
occurrence.
11.11. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
11.12. Expenses. Unless otherwise expressly provided herein, each of
the Buyer and the Sellers will bear its own costs and expenses (including legal
fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.
11.13. Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule
identifies the exception with particularity sufficient to provide reasonable
notice of the matter being disclosed. The Parties intend that each
representation, warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in
breach of the first representation, warranty, or covenant.
11.14. Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
-41-
<PAGE> 48
11.15. Specific Performance. Each of the Parties acknowledges and
agrees that the other Party would be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter in addition to any other remedy to
which it may be entitled, at law or in equity.
-42-
<PAGE> 49
*****
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
FIDELITY INVESTMENTS INSTITUTIONAL SERVICES
COMPANY, INC.
By: _________________________________________
Title: President
BROADWAY & SEYMOUR, INC.
By: __________________________________________
Title: President
BANCCORP SYSTEMS, INC.
By: __________________________________________
Title: Vice President
HEEBINK GROUP, INCORPORATED
By: __________________________________________
Title: Vice President
NATIONAL SYSTEMS GROUP, INC.
By: __________________________________________
Title: Vice President
-43-
<PAGE> 1
EXHIBIT 2.1A
AMENDMENT NO. 1
TO
ASSET PURCHASE AGREEMENT
This AMENDMENT NO. 1, dated May 15, 1996, to the Asset Purchase
Agreement, dated April 10, 1996 (the "Purchase Agreement"), among Fidelity
Investments Institutional Services Company, Inc., as Buyer, and Broadway &
Seymour, Inc., BancCorp Systems, Inc., Heebink Group, Incorporated and National
Systems Group, Inc., as Sellers.
WHEREAS, the parties hereto, being the parties to the Purchase
Agreement, desire in connection with the Closing under the Purchase Agreement,
to correct certain errors in the Purchase Agreement and to provide for the
assignment of the Buyer's rights, interests and obligations under the Purchase
Agreement to Fidelity Asset Management Services, LLC. Certain terms defined in
the original Purchase Agreement are used herein with the meanings there
provided.
NOW, THEREFORE, in consideration of the premises and the mutual
premises contained, the Parties agree as follows:
1. Corrections to Purchase Agreement. The following sections of
the Purchase Agreement are being modified as follows:
1.1. Sections 2.4(a) and 2.4(b) are each amended by
inserting "(other than those referenced in Section 2.3)" after the
word "Liabilities".
1.2. Section 2.4(i) is amended by changing the third "or"
in line 3 to "for".
1.3. Section 3.1 is amended by deleting the reference to
"Massachusetts" in the sixth line thereof
1.4. Section 3.14(a) is amended by deleting the words
"or desirable" from the first sentence thereof.
1.5. Section 3.14(f)(vi) is amended to change the
final clause to read: "that would preclude its use by Buyer as it is
presently used in the AMSG Business."
1.6. Section 6.1(f) is amended to change "satisfactory
to Seller" to "satisfactory to Buyer".
1.7. Section 7 is amended to change the reference to
"Section 5.4.2" to Section 5.4.2(ii)".
1.8. Section 8.3 is amended to change the final clause
to read:
<PAGE> 2
"including Buyer's agreement to assume certain
Liabilities of BSI and its Subsidiaries pursuant to
Section 2.3 of this Agreement, contained herein or
from any misrepresentations in or omission from any
Schedules or certificates required to be furnished by
Buyer hereunder."
1.9. Schedule 2.1(b) is amended by deleting the
text of item 18 of such Schedule and inserting in lieu thereof the
following, "Intentionally left blank".
1.10. Schedule 2.1(d) is amended by deleting the list of
"Tradenames" and inserting in lieu thereof the following:
"Tradenames
1. BancCorp
2. Trust Systems, Inc.
Common Law Trademarks
1. AMpreferred
2. Asset Manager
3. Trust Processor
4. Trust Processor International
5. Preneed Processor"
Schedule 2.1(d) is further amended by adding a new list called
"Copyrights (registered)" naming the copyrights listed on Attachment
A.
1.11. Schedule 2.1(f) is hereby amended by:
(a) adding the following contracts under the heading
"Customer Contracts" of such Schedule:
35a.* License Agreement for AMtrust System between
TSI, executed by PNC on January 31, 1994 and by TSI on March
11, 1994, as amended by the Addendum thereto executed by PNC
on March 24, 1994.
35b.* Maintenance Agreement between PNC and TSI
dated November 13, 1984 (as amended by the Consent and
Assignment Agreement dated as of January 28, 1994).
-2-
<PAGE> 3
35c.* License Agreement for AMtrust System between
TSI and First Tennessee Bank National Association, executed by
First Tennessee Bank on January 28, 1994 and by TSI on March
11, 1994.
35d.* Maintenance Agreement between First Tennessee
Bank and TSI dated November 13, 1984 (as amended by the
Consent and Assignment Agreement dated as of January 28,
1994).
35e.* License Agreement for AMtrust System between
TSI and NationsBank, executed by NationsBank on January 31,
1994 and by TSI on March 11, 1994, as amended by the Addendum
thereto executed by NationsBank on March 17, 1994.
35f.* Maintenance Agreement between NationsBank and
TSI dated November 13, 1984 (as amended by the Consent and
Assignment Agreement dated as of January 28, 1994).
35g.* License Agreement for AMtrust System between
National Systems Group, Inc., doing business as Trust Systems,
Inc. and First Fidelity Bank, N.A., executed by First Fidelity
on January 31, 1994 and by TSI on March 11, 1994, as amended
by the Addendum thereto executed by First Fidelity on April
25, 1994; and
(b) adding a contract under a new section at the end
of such Schedule as follows:
"Other Contracts:"
57. Furniture purchase contract relating to the Las
Colinas facility between BSI and Las Colinas Executive Suites
pursuant to the letter agreement dated March 12, 1996.
1.12. Schedule 2.2 is amended by adding the following item:
36. All other contracts listed on Schedule A to the
Temporary Professional Services Agreement.
1.13. Schedule 2.3 is amended by deleting item (2) thereof.
1.14. Attachment 2.1(h) and Schedules 10.3, 10.4
and 10.5 are hereby deleted in their entirety and the attached
revisions, dated May 14,1996 of Attachment 2.1(h) and Schedules 10.3,
10.4 and 10.5 are inserted in lieu thereof.
-3-
<PAGE> 4
1.15. Paragraph 3.3 of Schedule 3 is hereby amended by adding
the following item:
(7) Potential conflicts with provisions of Contracts
the assignment of which has not yet been consummated, or with
Excluded Assets.
1.16. The text of Schedule 10.6 is hereby incorporated as
a final section of Schedule 10.3 and Schedule 10.6 is deleted.
2. Assignment by Buyer
In implementation of the proviso in Section 11.4 of the
Purchase Agreement, Buyer hereby assigns to Fidelity Asset Management
Services, LLC, and Fidelity Asset Management Services, LLC hereby
agrees to assume and perform, all of Buyer's rights, interests and
obligations under the Purchase Agreement, as amended by this Amendment
No. 1., except for the rights (and related obligations) with respect
to certain leases and other agreements which will be assigned to the
Buyer at the Closing.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment
No. 1 on the date first above written.
FIDELITY INVESTMENTS INSTITUTIONAL
SERVICES COMPANY, INC.
By: /s/ Paul J. Hondros
----------------------------
Title:
BROADWAY & SEYMOUR, INC.
By: /s/ Alan C. Stanford
----------------------------
Title:
BANCCORP SYSTEMS, INC.
By: /s/ Alan C. Stanford
----------------------------
Title:
HEEBINK GROUP, INCORPORATED
By: /s/ Alan C. Stanford
----------------------------
Title:
NATIONAL SYSTEMS GROUP, INC.
By: /s/ Alan C. Stanford
----------------------------
Title:
For the purposes of Section 2 of the foregoing Amendment No. 1:
FIDELITY ASSET MANAGEMENT SERVICES,
LLC
By: /s/ Alan C. Stanford
----------------------------
Title:
<PAGE> 6
ATTACHMENT A
COPYRIGHTS (registered)
TX-1-705-170
TITL: Trust training program words.
PHYS: 1 v.
CLNA: the acHeebink Group, Inc.
DCRE: 1985 DPUB: 26Apr85 DREG: 24Oct85
APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I.
Heebink.
TX-1-705-171
TITL: Trust accounting reporting: 5.
PHYS: 1 v.
CLNA: the acHeebink Group, Inc.
DCRE: 1985 DPUB: 26Apr85 DREG: 24Oct85
APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I.
Heebink.
TX-1-705-172
TITL: Trust accounting functions: 4.
PHYS: 1 v.
CLNA: the acHeebink Group, Inc.
DCRE: 1985 DPUB: 26Apr85 DREG: 24Oct85
APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I.
Heebink.
TX-1-705-173
TITL: The accounting concepts: 3
PHYS. 1 v.
CLNA: the acHeebink Group, Inc.
DCRE: 1985 DPUB: 26APR85 DREG24Oct85
APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I.
Heebink.
TX-1-705-174
TITL: The Trust Business: 2
PHYS. 1 v.
CLNA: the acHeebink Group, Inc.
DCRE: 1985 DPUB: 26APR85 DREG24Oct85
APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I.
Heebink.
<PAGE> 1
EXHIBIT 2.2
EXECUTION COPY
QUANTECH LICENSE AND SERVICES AGREEMENT
This Agreement is entered into this 10th day of April , 1996 by and
between CORBEL & COMPANY, a Florida corporation with its principal place of
business in Jacksonville, Florida, on behalf of itself and its wholly-owned
subsidiary, TOTAL ADMINISTRATIVE BENEFIT SYSTEMS, INC. (d/b/a Pentab) (referred
to hereinafter collectively, for all purposes, as "Licensor") and FIDELITY
INVESTMENTS INSTITUTIONAL SERVICES, INC. ("Licensee"), a Massachusetts
corporation with its principal place of business in Boston, Massachusetts, who
agree for themselves, their successors and assigns as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings set forth below:
1.1. "Affiliate" means any other Person directly or
indirectly Controlling, Controlled by or under common Control with a Person.
1.2. "Agreement" means this Agreement, including all
Schedules and Exhibits, as the same may be amended from time to time.
1.3. "Confidential Information" means any and all
information concerning the businesses and affairs of any of the parties that is
not already generally or readily obtainable by the public or is publicly known
or becomes publicly known through no fault of such party.
1.4. "Control" means an ownership interest of forty
percent (40%) or more.
1.5. "Copyrights" means United States and foreign
copyrights, whether registered or unregistered, and pending applications to
register the same.
1.6. "Documentation" means all written, graphic and
electronic materials currently in Licensor's possession, that describe the
structure, function or use of the Quantech Software or any Enhancement,
including all specifications, system documentation and user manuals.
1.7. "Enhancements" means any modification, enhancement,
refinement, variation or new version of the Quantech Software, in both object
code and source code form, and all Documentation relating thereto, that is
created by Licensor and made generally commercially available to the then
current licensees of the Quantech Software as an upgrade (whether or not a
maintenance fee is charged to such licensee for the upgrade), during the period
commencing on the date hereof and ending two years thereafter. Enhancement
shall not include any new version of, or a replacement to, the Quantech
Software that is available only as a newly licensed product.
-1-
<PAGE> 2
1.8. "Intellectual Property" means Patent Rights,
Copyrights, Trade Secrets and proprietary information, all applications for any
of the foregoing, and any license or agreements granting rights related to the
foregoing.
1.9. "Knowledge" means actual knowledge after reasonable
investigation.
1.10. "Licensor" has the meaning set forth in the preamble
above.
1.11. "Patent Rights" means United States and foreign
patents, patent applications, continuations, continuations-in-part, divisions,
reissues, patent disclosures, inventions (whether or not patentable) or
improvements thereto.
1.12. "Person" means an individual, a partnership, a
corporation, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
1.13. "Trademarks" means United States and foreign
trademarks, service marks, trade dress, trade names and logos, whether
registered or unregistered, and pending applications to register the foregoing,
together with all translations, adaptations, derivations, and combinations
thereof and including all goodwill associated therewith.
1.14. "Trade Secrets" means confidential ideas, trade
secrets, know-how, concepts, methods, processes, formulas, reports, data,
customer lists, mailing lists, business plans, or other proprietary
information.
1.15. "Quantech Software" means the most current, premium
version, as of the date of this Agreement, of the computer software program
described in Schedule A, attached hereto and incorporated herein, and commonly
referred to by Licensor as "Quantech", in both object code and source code
form, and all Documentation relating thereto.
2. LICENSE.
2.1. Perpetual License. Licensor hereby grants to Licensee,
and Licensee hereby accepts from Licensor, subject to payment of the one-time
license fee pursuant to Section 3.1, a perpetual, irrevocable, nonexclusive,
worldwide right and license, with a right to grant sublicenses (to the extent
provided herein), to use, reproduce, modify, display, distribute and create
derivative works of the Quantech Software. Licensor further grants to
Licensee, and Licensee hereby accepts from Licensor, subject to payment of the
one-time license fee pursuant to Section 3.1, a perpetual, irrevocable,
nonexclusive, worldwide right and license, with a right to grant sublicenses
(to the extent provided herein), to use any of Licensor's Intellectual Property
that is embodied in the Quantech Software or the Documentation. Except as
otherwise provided herein, the rights granted to Licensee hereunder are
noncancellable, transferable and assignable.
-2-
<PAGE> 3
2.2. Enhancements. Subject to the terms and conditions
hereof, Licensor hereby grants to Licensee, and Licensee hereby accepts from
Licensor, a perpetual, irrevocable, nonexclusive, worldwide right and license,
with a right to grant sublicenses (to the extent provided herein), to use,
reproduce, modify, display, distribute and create derivative works of the
Enhancements. Subject to the terms and conditions hereof, Licensor further
grants to Licensee, and Licensee hereby accepts from Licensor, a perpetual,
irrevocable, nonexclusive, worldwide right and license, with a right to grant
sublicenses (to the extent provided herein), to use any of Licensor's
Intellectual Property (whether or not patentable or patented) that is embodied
in the Enhancements. Except as otherwise provided herein, the rights granted
to Licensee hereunder are noncancellable, transferable and assignable.
2.3. Sublicense Rights.
2.3.1. Object Code. Licensee may sublicense to its
Affiliates and to third parties the rights granted in Sections 2.1 and 2.2
above with respect to all or any part of the object code version of the
Quantech Software or any Enhancements.
2.3.2. Source Code. Licensee may sublicense to its
Affiliates and to third parties the rights granted in Sections 2.1 and 2.2
above with respect to all or any part of the source code version of the
Quantech Software or any Enhancements, provided that, during the period
commencing on the date hereof and ending three years thereafter, Licensee shall
not (and shall not permit any Affiliate to), directly or indirectly, disclose,
license, sublicense, assign, transfer or otherwise provide to any third party
all or any part of the source code version of the Quantech Software or any
Enhancements or any related Documentation or Intellectual Property.
2.4. Ownership Rights. Except as expressly provided herein,
Licensor retains all right, title and interest in the Quantech Software and the
Enhancements and in all Intellectual Property rights in or relating thereto.
As between Licensor and Licensee, and subject to Licensor's retained rights
with respect to the underlying Quantech Software and any Enhancements and the
Intellectual Property in or relating thereto, Licensee shall own all right,
title and interest in all modifications, enhancements, refinements, variations
or new versions of the Quantech Software, and in all Intellectual Property
rights in or relating thereto, hereafter developed by Licensee.
2.5 Delivery of Materials. Simultaneously with the execution
hereof, Licensor shall deliver to Licensee one source code copy and one object
code copy of the Quantech Software, together with one copy of all of the then
existing Documentation, to Licensee's site in Massachusetts. Licensor shall
promptly deliver to Licensee one source code copy and one object code copy of
any Enhancements, together with one copy of all the then existing Documentation
relating thereto, upon first making such Enhancement commercially available.
3. PAYMENTS.
-3-
<PAGE> 4
3.1. License Fees. In consideration of the rights granted to
Licensee under Section 2 hereof, Licensee shall pay Licensor a one-time license
fee of Three Million Dollars ($3,000,000), to become payable upon the
execution of this Agreement, and to be paid by the close of business on April
12, 1996, by wire transfer of immediately available funds in accordance with
written wire transfer instructions provided to Licensee by Licensor on or prior
to the date hereof. Licensor and Licensee agree that of the total amount of
the license fee due hereunder, Two Hundred Fifty Thousand Dollars ($250,000)
shall be in consideration for the rights granted under Section 2.1 above, with
respect to Licensee's internal use of the Software and Enhancements. Upon
payment of the one-time license fee hereunder, the license granted to licensee
under Section 2 hereof shall be fully paid but not royalty free.
3.2. Royalties.
3.2.1. Obligation to Pay Royalties. Commencing on
the date hereof and continuing thereafter for a period of two (2) years,
Licensee shall pay to Licensor royalty payments, as calculated in Section
3.2.2, if, and only if, Licensee or any of its Affiliates enters into one or
more agreements to sublicense third party end-users, in accordance with Section
2.3 hereof, the right to use the Quantech Software, any Enhancements or any
modifications, enhancements, refinements, or variations created by Licensee,
installed at any such third party end-user's site for its internal use.
3.2.2. Calculation of Royalties. In the event a
royalty payment is due with respect to any third party end-user (as described
in Section 3.2.1), such royalty payment shall be equal to the lesser of (a)
$25,000 or (b) 25% of any license fee paid to Licensee or its Affiliates by
that third-party end-user, whether or not payable to Licensee in installments,
to become payable upon the signing of a binding agreement between Licensee or
its Affiliates and such third party end-user. No royalties shall be paid in
respect of any service bureau, maintenance or other non-license related
recurring revenue.
3.2.3. Payment Terms. Licensee shall pay royalties
to Licensor hereunder on a quarterly basis. Such payment shall be made no
later than forty-five (45) days following the end of each calendar quarter
based on the license fees actually received by Licensee and its Affiliates
during such calendar quarter. At the time of each payment, Licensee shall
provide Licensor with a royalty statement in sufficient detail to allow
Licensor to understand the calculation of royalties reflected thereon and, upon
reasonable advance written request to Licensee by Licensor, Licensee shall
permit Licensor (but no more than twice in any 12 month period) to audit such
books, contracts and records of Licensee as may be reasonably required to
confirm the accuracy of such calculations. Upon payment of any royalties due
Licensor under this Section 3.2, the license granted herein shall be
royalty-free.
3.3. Additional Payments. Subject to the provisions of
Section 3.4 hereof, Licensee shall pay Licensor Two Million Dollars
($2,000,000), to become payable upon the Closing of the transaction
contemplated in that certain Asset Purchase Agreement, dated as of
-4-
<PAGE> 5
April 10, 1996, by and among Licensee, Broadway & Seymour, Inc. and certain
wholly-owned subsidiaries of Broadway & Seymour (the "Purchase Agreement"),
with such funds to be paid by wire transfer of immediately available funds in
accordance with written wire transfer instructions provided to Licensee by
Licensor, as follows:
3.3.1. Closing Under Purchase Agreement. Licensee
shall pay Licensor, upon the Closing under the Purchase Agreement, One Million
Dollars ($1,000,000), with such funds to be paid by wire transfer of
immediately available funds in accordance with written wire transfer
instructions provided to Licensee by Licensor on or before the date of such
Closing.
3.3.2. Completion of Training Services. Within ten
(10) days of completion of Licensor's obligation to provide the Training
Services set forth in Section 4 hereof, Licensee shall pay Licensor One
Million Dollars ($1,000,000), with such funds to be paid by wire transfer of
immediately available funds in accordance with written wire transfer
instructions provided to Licensee by Licensor.
Licensor and Licensee agree that of the total amount of the additional payments
due under this Section 3.3, Nine Hundred Thousand Dollars ($900,000) shall be
in consideration for the Transition Services, One Hundred Thousand Dollars
($100,000) shall be in consideration of the Training Services and One Million
Dollars ($1,000,000) shall be in consideration of the rights granted under
Section 2.2 above.
3.4. Certain Additional Payments Conditioned upon Closing.
In the event that no Closing occurs under the Purchase Agreement, the parties
agree as follows:
3.4.1. Licensee shall have no obligation whatsoever
to make the payment as provided for in Section 3.3.1.
3.4.2. Licensee shall have no obligation to make the
payment as provided for in Section 3.3.2, provided that Licensee shall pay
Licensor $100,000 in respect of the Training Services, within ten (10) days of
completion of Licensor's obligation to provide the Training Services set forth
in Section 4 hereof.
3.4.3. Licensor shall have no further obligation (a)
to provide Licensee with Enhancements, as provided in Section 2.2 or (b) to
provide the Transition Services, as set forth in Section 4. Licensee shall,
however, continue to be obligated to provide the Training Services as set forth
in Section 4 and the Consulting Services as set forth in Section 5.
4. TRAINING AND TRANSITION SERVICES.
4.1. Transition Services. Subject to provisions of Section
3.4 hereof, to facilitate the transfer of knowledge between the parties
contemplated by this Agreement, Licensor agrees that, during the period
commencing on the date payment is first made to Licensor under Section
-5-
<PAGE> 6
3.3.1, and ending on September 30, 1996, Licensor shall provide to Licensee
consulting and advisory services (the "Transition Services"), including
consultation and advice on product development, strategic planning and similar
issues, relating to the Quantech Software and Enhancements. Notwithstanding
the foregoing, Licensor shall not be required to perform any Transition
Services that (a) would cause it to breach any agreement binding on it, (b)
would require disclosure of confidential or proprietary information of
Licensor, (c) or would be otherwise unreasonably burdensome with respect to the
continuing business of Licensor.
4.2. Training Services. Subject to provisions of Section 3.4
hereof, to further facilitate the transfer of knowledge between the parties
contemplated by this Agreement, Licensor agrees that, during the period
commencing on the date payment is first made to Licensor under Section 3.3.1,
or, in the event such payment is not made on or before May 31, 1996, as
provided in Section 3.4.2, and ending on September 30, 1996, Licensor shall
provide to Licensee training services (the "Training Services"), subject to
the following terms and conditions:
4.2.1. Personnel; Location; Hours; Schedule. In
order to fulfill its obligation to provide Training Services, Licensor shall
make available to Licensee at Licensee's facilities in Massachusetts, or at
such other location as is mutually agreed to by the parties, the following
specific employees of Licensor for the stated amount of time:
Ken Simmons 20 business days (160 man-hours)
John Stinmeyer 20 business days (160 man-hours)
Paul Schneider 20 business days (160 man-hours)
In the event that one or more of the above employees is no longer an employee
of Licensor, Licensor shall make available to Licensee substitute employee(s),
subject to the prior approval of Licensee (which approval shall not be
unreasonably withheld), which employee(s) shall possess a level of skill and
competence consistent with that of skilled and competent computer industry
professionals with a combination of experience at the systems level and
specific experience with the Quantech Software appropriate for the provision of
the required Training Services. The parties shall work out a mutually
agreeable schedule, in minimum increments of one day, for the Training Services
to be provided by Licensor.
4.2.2. Expenses. Licensee shall reimburse Licensor
for any reasonable out-of-pocket expenses incurred by Licensor in providing the
Training Services.
4.2.3. Ownership Rights. Licensor hereby
acknowledges that Licensee shall own all right, title and interest in and to
the Copyright in any and all software and Documentation developed by employees
of Licensor pursuant to this Section 4. All code, documentation and other
written, graphic or electronic materials developed by employees of Licensor
pursuant to this Section 4 (whether individually or jointly with other persons)
are intended to be a "work made for hire" and Licensor hereby assigns to
Licensee any Copyright rights that it may have therein. Licensor agrees to
execute and deliver to Licensee any
-6-
<PAGE> 7
assignments or other documents as may be reasonably required to vest all such
Copyright rights in Licensee. Licensee hereby acknowledges that Licensor shall
retain all Intellectual Property rights other than the Copyright in such
software and Documentation.
5. CONSULTING SERVICES. Subject to the provisions of Section 3.4, in
addition to the Training Services provided by Licensor to Licensee pursuant to
Section 4 hereof, during the period commencing on (a) the date payment is first
made to Licensor under Section 3.3.1, or (b) in the event such payment is not
made, as provided in Section 3.4.2, on May 31, 1996, and ending two (2) years
thereafter, Licensor shall provide Licensee with additional consulting services
(the "Consulting Services"), to complete the transfer of knowledge contemplated
by this Agreement, subject to the following terms and conditions:
5.1. Personnel; Location. In order to fulfill its obligation
to provide Consulting Services, Licensor shall make available to Licensee at
Licensee's facilities in Massachusetts, or at such other location as is
mutually agreed to by the parties, the following specific employees of
Licensor:
Ken Simmons
John Stinmeyer
Paul Schneider
The Consulting Services shall be provided by Licensor, from time to time, upon
request by Licensee and upon reasonable prior notice to Licensor. In the event
that one or more of the above employees is no longer an employee of Licensor,
Licensor shall make available to Licensee substitute employee(s), subject to
the prior approval of Licensee, which employee(s) shall possess a level of
skill and competence consistent with that of skilled and competent computer
industry professionals with a combination of experience at the systems level
and specific experience with the Quantech Software appropriate for the
provision of the required Consulting Services.
5.2. Minimum Number of Hours; Hourly Rate; Schedule. If
requested by Licensee, Licensor shall provide up to 250 man-hours of Consulting
Services pursuant to this Section 5. Licensee shall pay Licensor at Licensor's
then prevailing rates for similar consulting services, which rates shall not be
unreasonable in light of the scope of work to be provided, and which rates
shall not exceed $150.00 per hour. The parties shall work out a mutually
agreeable schedule for the Consulting Services to be provided by Licensor;
provided that any work performed in Massachusetts shall be in minimum
increments of 1 day.
5.3. Expenses. Licensee shall reimburse Licensor for any
reasonable out-of-pocket expenses incurred by Licensor in providing the
Consulting Services.
5.4. Ownership Rights. Licensor hereby acknowledges that
Licensee shall own all right, title and interest in and to the Copyright in any
and all software and Documentation developed by employees of Licensor pursuant
to this Section 5. All code, documentation and
-7-
<PAGE> 8
other written, graphic or electronic materials developed by employees of
Licensor pursuant to this Section 5 (whether individually or jointly with other
persons) are intended to be a "work made for hire" and Licensor hereby assigns
to Licensee any Copyright rights that it may have therein. Licensor agrees to
execute and deliver to Licensee any assignments or other documents as may be
reasonably required to vest all such Copyright rights in Licensee. Licensee
hereby acknowledges that Licensor shall retain all Intellectual Property rights
other than the Copyright in such software and Documentation.
6. REPRESENTATIONS AND WARRANTIES OF LICENSOR. Licensor hereby
represents and warrants to Licensee, the following:
6.1. Authorization; Enforceability. Licensor has the
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement has been duly executed and
delivered by Licensor and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms and conditions.
6.2. Ownership. Licensor has all the necessary right, title
and interest in the Quantech Software and the Enhancements to grant the
licenses contemplated herein, including all necessary rights to any portion of
the Quantech Software or any Enhancement created by an independent contractor
or other third party. The foregoing warranty shall not apply to any
modifications, changes, enhancements, updates, conversions, upgrades, or
additions made to the Quantech Software or any Enhancement by any person or
entity other than Licensor unless approved by Licensor. The exclusive remedy
for any breach of this Section 6.2 shall be indemnification as provided in
Section 9 hereof.
6.3. Infringement. The use of the Quantech Software and any
Enhancements by the Licensee will not violate (a) the Patent Rights of any
third party in the United States or Canada, (b) the Copyright of any third
party in any country that is a party to the Berne Convention or (c) the Trade
Secrets of any third party. The foregoing warranty shall not apply to any
modifications, changes, enhancements, updates, conversions, upgrades, or
additions made to the Quantech Software or any Enhancement by any person or
entity other than Licensor unless approved by Licensor. The Quantech Software
and any Enhancements are free and clear of any claim of third party
infringement of any Intellectual Property right, and there are no actions
proceeding, pending, or to the best Knowledge of Licensor, threatened which
claim that the Quantech Software or any Enhancements, or any part thereof,
infringes upon or is infringed by any Intellectual Property right of any third
party. The exclusive remedy for any breach of this Section 6.3 shall be
indemnification as provided in Section 9 hereof
6.4. Conformance with Specifications. For a period of two
(2) years after the initial installation of the Quantech Software on Licensee's
site (the "Warranty Period"), the Quantech Software and any Enhancements will
be free of any defect rendering the program unfit for the purpose of the
functions described in the Documents listed in Schedule A hereto. The
foregoing warranty shall not apply to any modifications, changes, enhancements,
updates,
-8-
<PAGE> 9
conversions, upgrades, or additions made to the Quantech Software or any
Enhancement by any person or entity other than Licensor unless approved by
Licensor. If during the Warranty Period the Quantech Software or any
Enhancement does not comply with the provisions of this Section 6.4, and
Licensee promptly delivers written notice thereof to Licensor, Licensor shall
correct, cure or otherwise remedy the Quantech Software or Enhancement so that
it complies with this Section 6.4.
6.5. Security Measures, etc. The Quantech Software and any
Enhancement does not contain any mechanism that would enable Licensor or any
other party to disable the Quantech Software or any Enhancement or make it
inaccessible to a user. Licensor agrees to use its best efforts to ensure that
the Quantech Software and any Enhancement in the form delivered to Licensee
does not contain any computer virus or worm.
6.6. Disclaimer; Limitation of Liability. EXCEPT AS
OTHERWISE PROVIDED HEREIN, LICENSOR EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES,
WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE. NEITHER PARTY SHALL BE LIABLE FOR
INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO
LOST PROFITS ARISING OUT OF THIS AGREEMENT, WHETHER BASED ON CONTRACT, TORT, OR
ANY OTHER LEGAL THEORY, AND EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
7. COVENANTS. The parties agree as follows:
7.1 Licensor Covenants.
7.1.1. Independent Contractors. Licensor will not
use any independent contractor or other third party to develop proprietary
components of the Enhancements, unless all rights in proprietary components
developed by independent contractors or other third parties have been or will
be assigned to Licensor and licensed to Licensee.
7.1.2. Linkages. Licensor covenants and agrees to
modify the Quantech Software to include linkage functionality for
electronically clearing transactions, including an optional, nonexclusive
capability for Quantech Software licensees to link to Licensee's clearing
capability, all as described more fully in Schedule B, attached hereto and
incorporated herein, in addition to any other linkage functionality or clearing
capabilities that Licensor elects to include, such modification to be completed
by December 31, 1996. Until such time as the parties mutually agree that the
linkage functionality described above in the Quantech Software has become
obsolete or otherwise impracticable, Licensor shall (subject to the provisions
of Schedule B) include in all future versions, modifications and enhancements
of the Quantech Software, as soon as reasonably practicable, given the
magnitude of the work required, as an optional function, the capability for
Quantech Software licensees to link to Licensee's clearing capability.
-9-
<PAGE> 10
7.1.3. Effect of Bankruptcy of Licensor. Licensor
agrees that if Licensor as a debtor-in-possession or if a trustee in
bankruptcy rejects this agreement, Licensee may elect to retain its rights
under the Agreement as provided in Section 365(n) of the United States
Bankruptcy Code. Upon written request of Licensee to Licensor or the trustee
in bankruptcy, Licensor or such trustee shall allow Licensee to exercise its
rights under this Agreement and shall not interfere with the rights of the
Licensee as provided in this Agreement. The foregoing shall survive the
termination or expiration of this Agreement for any reason whatsoever.
7.1.4. General Right to Develop and Market. With
the exception of Licensor's obligations under Section 7.1.2 hereof, nothing in
this Agreement shall be construed as limiting or restricting Licensor's right
to modify, enhance and develop new versions of the Quantech Software and to
market such software to third parties, in whatever manner Licensor determines,
in its sole discretion, to be in its best interest.
7.1.5. No Other Licensor Obligations. Except as
expressly provided herein or as provided in any subsequent agreement between
the parties, Licensor has no obligation to create or provide to Licensee any
enhancements, modifications or updates to the Quantech Software or
Documentation or to provide any maintenance, training or other services to
Licensee of any nature whatsoever. Licensee acknowledges that the Quantech
Software will not function properly without the use of hardware and software
owned by third parties and Licensee agrees that it shall have the sole
responsibility for purchasing any such hardware and obtaining licenses to any
such software.
7.2. Licensee Covenants.
7.2.1. No Use of Quantech Trademark. Licensee shall
not use the trademark "Quantech", or any phrase that is confusingly similar to
the trademark "Quantech", to market or identify the Quantech Software or any
derivative work thereof or any other software product that performs similar
functions. Except as required by Section 7.2.3 hereof, Licensee shall not
identify Licensor as the source of Licensee's software programs based on the
Quantech Software.
7.2.2. Exports. In no event may Licensee export any
Quantech Software or Documentation or use any Quantech Software or
Documentation outside the United States unless it has complied fully with all
relevant regulations of the U.S. Department of Commerce and with the U.S.
Export Administration Act.
7.2.3. Protection of Licensor's Intellectual
Property Rights. Licensee shall take reasonable steps to protect Licensor's
intellectual property rights in the Quantech Software and Documentation
including, without limitation, retaining all legends relating to copyright on
all copies of the Quantech Software and Documentation and advising Licensor
should Licensee discover that any third party is infringing Licensor's
intellectual property rights in the Quantech Software or Documentation.
-10-
<PAGE> 11
7.2.4. Non-Hire and Non-Solicitation of Employees.
Licensee covenants and agrees that, during the period commencing on the date
hereof and ending on September 30, 1996, Licensee will not, directly or
indirectly without the written consent of Licensor, recruit, offer employment,
employ (including employment as a consultant), lure or entice away any of the
individuals referenced in Sections 4 and 5 hereof employed by the Licensor, or
otherwise to induce such individuals to leave the employ of the Licensor.
Licensee covenants and agrees that, during the period commencing on September
30, 1996 and ending on December 31, 1996, Licensee will not, directly or
indirectly without the written consent of Licensor, recruit, lure or entice
away any of the individuals referenced in Sections 4 and 5 hereof employed by
the Licensor, or otherwise take affirmative steps to induce such individuals to
leave the employ of the Licensor.
8. CONFIDENTIALITY. Each of the parties will treat and hold as such
all of the Confidential Information of the other party, refrain from using any
of the Confidential Information except in connection with this Agreement, and
deliver promptly to the party to which it relates or destroy, at the request
and option of such party, all tangible embodiments (and all copies) of the
Confidential Information which are in its possession. In the event that any of
the parties is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena,
civil investigative demand, or similar process) to disclose any Confidential
Information of any other party, that such party will notify the other party
promptly of the request or requirement so that the other party may seek an
appropriate protective order or waive compliance with the provisions of this
Section 8. If, in the absence of a protective order or the receipt of a waiver
hereunder, any of the parties is, on the advice of counsel, compelled to
disclose Confidential Information of any other party, to any tribunal or else
stand liable for contempt, that such party may disclose the Confidential
Information to the tribunal; provided, however, that the disclosing party shall
use its best efforts to obtain, at the request of the other party, an order or
other assurance that confidential treatment will be accorded to such portion of
the Confidential Information required to be disclosed as the other party shall
designate.
9. INDEMNIFICATION. Licensor shall indemnify, defend and hold
Licensee harmless from and against any and all suits, actions, damages, losses,
costs and expenses (including court costs and attorneys' fees should Licensor
breach its obligation to defend) and other liabilities arising from or in
connection with any claim arising out of a breach of Licensor's representations
and warranties contained in Sections 6.2 and 6.3 hereof and shall pay all costs
and damages awarded. Licensee shall promptly notify Licensor of any such
claim. Licensor shall retain sole control over the defense and settlement of
such claim, and Licensee shall cooperate with Licensor in the defense of the
claim. Licensee shall have the right, at its option, to participate in the
defense of any such claim at its sole expense. At Licensor's option, Licensor
may satisfy its entire obligation under this Section (other than claims for
damages brought by third parties and any expenses incurred in defending any
third party claims) by: (a) with the prior written consent of Licensee (such
consent not to be unreasonably withheld) modifying the Quantech Software or
Documentation or any Enhancement so that it performs comparable functions
without infringement; or (b) obtaining a royalty-free, perpetual, irrevocable,
nonexclusive, transferable
-11-
<PAGE> 12
right and license for Licensee to use, transfer, copy, display, distribute,
sublicense and prepare derivative works of source code and object code copies
of the infringing Quantech Software or Documentation in accordance with the
terms of this Agreement.
10. MISCELLANEOUS.
10.1. No Third Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the parties and their
respective successors and permitted assigns.
10.2. Entire Agreement. This Agreement (including the
documents referred to herein) constitutes the entire agreement between the
parties and supersedes any prior understandings, agreements, or representations
by or between the parties, written or oral, to the extent they related in any
way to the subject matter hereof.
10.3. Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties named herein and their
respective successors and permitted assigns. This Agreement shall, subject to
the terms and conditions hereof, be freely assignable by the parties; provided,
however, for a period commencing on the date hereof and ending three years
thereafter, Licensee shall not assign this Agreement or its rights or
obligations hereunder to any Person which is not an Affiliate of Licensee
without the prior written consent of Licensor, and provided further that
Licensee shall require any Affiliates who are assignees to comply with
provisions of this Agreement, including this Section 10.3.
10.4. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
10.5. Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
10.6. Notices. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) upon
confirmation of facsimile, (ii) when sent by overnight delivery and (iii) when
mailed by registered or certified mail return receipt requested and postage
prepaid at the following address:
If to Licensor:
1660 Prudential Drive
Jacksonville, FL 32207
Telefax: 904-399-5551
-12-
<PAGE> 13
Attn: President
Copy to:
-------
Broadway & Seymour, Inc.
128 South Tryon Street
Charlotte, NC 28202
Attn: General Counsel
Telefax: (704) 344-3542
If to Licensee:
--------------
82 Devonshire Street
Boston, MA 02109
Telefax: (617) 476-0932
Attn: President
Copy to:
-------
82 Devonshire Street
Boston, MA 02109
Telefax: (617) 476-0932
Attn: General Counsel
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient.
Any party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
party notice in the manner herein set forth.
10.7. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of The Commonwealth of
Massachusetts without giving effect to any choice or conflict of law provision
or rule (whether of The Commonwealth of Massachusetts or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than The Commonwealth of Massachusetts.
10.8. Amendments and Waivers. No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing and signed
by the parties. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default,
-13-
<PAGE> 14
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent occurrence.
10.9. Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
10.10. Expenses. Each of the Licensor and Licensee will bear
its own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby.
10.11. Relationship of Parties. This Agreement is not
intended to and does not create a partnership or joint venture relationship
among the parties. No employee of Licensor shall be entitled to any Licensee
benefits and no such employee is covered by the workers compensation insurance
of Licensee. Neither party has authority to enter into any contracts or
agreements on behalf of the other or to make any warranties or representations
that purport to bind the other.
[this space intentionally left blank]
-14-
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
the year and date first above written.
CORBEL & CO. FIDELITY INVESTMENTS INSTITUTIONAL
SERVICES, INC.
By: /s/ Alan C. Stanford By: /s/ Paul J. Hondros
--------------------------- ---------------------------
Title: Vice President Title: President
-15-
<PAGE> 16
SCHEDULE A
QUANTECH SOFTWARE DELIVERABLES
1. Quantech is defined as the source code, object code, database and data
definitions for the components listed below to handle 401(k), Profit
Sharing, Money Purchase Plans, etc.:
1.1 Quantech Professional and optional modules including, but not
limited to the following:
1.1.1 10 1/2 with Calculations
1.1.2 1099's
1.1.3 Compliance testing
1.1.4 Standard Reports
1.1.5 Global Transactions
1.1.6 Electronic Census Import/Export Data Entry Routines
1.1.7 Data Collection Module
1.1.8 Age Weighted/Cross-Testing
1.1.9 Participant Loans
1.1.10 Target Benefit
1.1.11 Client Management System
1.1.12 Trust Accounting
1.1.13 Allocation Import Link Package
1.1.14 Investment Download
1.1.15 Insurance
1.2 Delrina Form Flow software required for:
1.2.1 Administrative Government Forms
1.2.2 Legal Government Forms
1.3 Voice Response interfaces to:
1.3.1 Edify
1.3.2 Intervoice
1.4 Crystal Report Writer interface
1.5 Proprietary Database Wrapper
1.6 Security device for licensing key
-16-
<PAGE> 17
2. The warranty contained in Section 6.4 shall correspond to the
following Quantech Documentation:
2.1 Quantech Starter's Guide
2.2 Quantech Government Forms Nonintegrated System Users Guide
2.3 Quantech Client Management System Users Guide
2.4 Quantech Owners and Installation Manual
2.5 Quantech Report Writer Users Guide
2.6 Quantech Defined Contribution and Integrated Applications
Users Guide
2.7 Quantech System Reference Manual (3 page overview that
accompanies license agreements)
-17-
<PAGE> 18
SCHEDULE B
QUANTECH LINKAGES
Corbel will develop, maintain and enhance linkage interfaces from Quantech to
AMTrust/AMPreferred and FTS as highlighted below and fully defined in the
Fidelity Investments Linkage Project-Business Requirements and Functional
Specifications Document attached as Exhibit A hereto (Section 6; dated
11/6/95).
The interface development responsibility is limited to the files referenced
below, or files of similar nature, required to accomplish the stated business
purpose of maintaining Quantech links with AMTrust/AMPreferred and FTS.
1. TRUST LINKAGES (QUANTECH TO AMTRUST/AMPREFERRED)
1.1 Implement interfaces between the record keeping system and the
trust system. The interfaces will enable single processing or
data entry for like processing events occurring on both the
trust and record keeping systems.
1.2 The interfaces include, but are not limited to, the following:
1.2.1 Contribution Data File
1.2.2 Trade Order Processing
1.2.3 Acknowledgment Processing
1.2.4 Trade Confirm Processing
1.2.5 Position Reconciliation
1.2.6 Price/Rate File Processing
1.2.7 Dividend/Capital Gain Processing
1.2.8 Deposit Advice
1.2.9 Cusip File Processing
1.2.10 Security Master Updates
1.3 All interfaces will be defined, tested and in production by
12/31/96.
1.4 Future modifications resulting from Fidelity initiated
changes, will be performed by Corbel at the expense of
Fidelity, and be delivered in a timely manner.
2. TRADING LINKAGES (QUANTECH TO FTS)
-18-
<PAGE> 19
2.1 Implement full interfaces between the record keeping system
and the mutual fund trade order processing system. The
linkages will enable automatic trade placement/execution for
401(k) activity originating on the record keeping system.
These interfaces will be used when AMTrust/AMPreferred is not
the trust solution.
2.2 The interfaces include, but are not limited to, the following:
2.2.1 Trade Order Processing
2.2.2 Acknowledgment Processing
2.2.3 Trade Confirm Processing
2.2.4 Position Reconciliation
2.2.5 Price/Rate File Processing
2.2.6 Dividend/Capital Gain Processing
2.2.7 Reinvest Trade Confirmation
2.2.8 Cusip File Processing
2.2.9 Security Master Updates
2.3 All interfaces will be defined, tested and in production by
12/31/96.
2.4 Future modifications resulting from Fidelity initiated
changes, will be performed by Corbel at the expense of
Fidelity, and be delivered in a timely manner.
-19-
<PAGE> 1
EXHIBIT 2.3
LICENSE AND SERVICES AGREEMENT
This Agreement is entered into this ___ day of May, 1996, by and
between Fidelity Asset Management Services, LLC ("Licensor"), a Delaware
limited liability company with a principal place of business in Boston,
Massachusetts, and BancCorp Systems, Inc. ("Licensee"), a North Carolina
corporation with its principal place of business in Amarillo, Texas.
BACKGROUND STATEMENT
Licensee entered into an Agreement with Federated Administrative
Services, Inc. and two related entities ("Federated") dated as of June 1, 1994
(the "Federated Agreement") pursuant to which Licensee developed certain
software for Federated. Broadway & Seymour, Inc. ("BSI"), Licensee, Licensor's
assignor and certain other parties have entered into an Asset Purchase
Agreement, dated as of April 10, 1996, as amended (the "Purchase Agreement")
pursuant to which Licensee has transferred and assigned substantially all of
its assets to Licensor. Licensee has not assigned the Federated Agreement to
Licensor and the sole purpose of this Agreement is to ensure that Licensee will
be able to continue complying with its obligations under the Federated
Agreement.
AGREEMENT
NOW, THEREFORE, the parties hereto agree for themselves, their
permitted successors and assigns as follows:
1. LICENSE Licensor hereby grants to Licensee and Licensee hereby
accepts from Licensor, subject to the terms and conditions of this Agreement, a
limited, nonexclusive, worldwide, royalty-free, nontransferable right and
license to use, reproduce, modify, display, distribute and create derivative
works of all versions of the software listed on Schedule A, attached hereto and
incorporated herein, including the object code and source code therefor and all
documentation relating thereto, and any generally commercially available
up-grades or revisions thereto developed by Licensor during the term hereof
(the "Software"), subject to the following conditions and restrictions:
1.1. Restricted Use. Licensee may exercise the rights
granted above solely for the purpose of complying with its continuing
obligations under the Federated Agreement and for no other purpose whatsoever.
Upon the expiration or termination of the Federated Agreement and Licensee's
obligations thereunder, Licensee shall have no further right of any nature
whatsoever in the Software or the related documentation.
-1-
<PAGE> 2
1.2. Sublicensing; Transfer. Except to the extent necessary
to fulfill its continuing obligations under the Federated Agreement, or as
otherwise provided herein, Licensee may not sell, sublicense, convey, assign,
or otherwise transfer the Software or any Modifications (as hereinafter
defined) to any third parties without Licensor's prior written consent, which
may be withheld for any or no reason.
1.3. Copying. Except to the extent necessary to fulfill its
continuing obligations under the Federated Agreement, the Software and
Modifications may only be copied for distribution to the Licensee's facilities,
or for archival or back-up purposes.
1.4. Notices. All copies of the Software and Modifications
shall reproduce the Licensor's copyright and confidentiality notices, to the
extent that the Software and Modifications provided by the Licensor contain
such notices.
2. MODIFICATIONS.
2.1. Development of Modifications. To the extent necessary
to fulfill its continuing obligations under the Federated Agreement, the
Licensee may modify, develop enhancements to, or refinements or variations of
the Software, or use the Software as a basis for creating alternative software,
or request Licensor, pursuant to the provisions of Section 3.1 below, to do so.
Such modifications or alternative software resulting from such use of the
Software shall be referred to herein as the "Modifications."
2.2. Ownership of Modifications. The Licensee agrees that
all right, title and interest in and to the Modifications created by or on
behalf of the Licensee, shall be and remain in the Licensor. The Licensee
shall promptly deliver to the Licensor the Modifications and any and all
documentation relating thereto, but may retain copies thereof to the extent
necessary to fulfill its continuing obligations under the Federated Agreement.
The Licensee further agrees to cause its employees or agents, as needed, to
execute any and all documents necessary to assign ownership of any and all
rights in the Modifications to the Licensor or to otherwise perfect the
Licensor's rights therein.
2.3. No duty. Except as otherwise provided herein or unless
the parties agree in a separate document, the Licensor has no duty to update,
modify, or enhance the Software for the benefit of the Licensee.
3. SERVICES.
3.1. Provision of Support Services. From time to time, upon
reasonable prior written notice to Licensor, Licensee may request that Licensor
develop such Modifications or perform the support and maintenance services
described in Schedule B attached hereto and incorporated herein ("Support and
Maintenance") as Licensee determines to be required in order to comply with its
continuing obligations under the Federated Agreement. Licensee
-2-
<PAGE> 3
shall only request the development of such Modifications and the performance of
such Support and Maintenance as Licensee determines in good faith is required
in order for Licensee to comply with its continuing obligations under the
Federated Agreement.
3.2. Leased Employee(s). The parties agree that any
development of Modifications or performance of Support and Maintenance pursuant
to this Agreement shall be provided by such Employee(s) of Licensor as Licensor
shall designate, in its sole discretion, which Employee(s) shall be leased to
Licensee on the terms and conditions provided below. Such Employee(s) shall
possess a level of skill and competence consistent with that of skilled and
competent computer industry professionals with a combination of experience at
the systems level and specific experience with the Software appropriate for the
specific task.
3.3. Statement of Work. At the time Licensee submits any
request for the development of Modifications or the provision of Support and
Maintenance pursuant to Section 3.1, the parties shall work together to develop
a schedule for each Modification or for the performance of such Support and
Maintenance and shall agree to a Statement of Work covering the same, which
Statement of Work shall include the estimated duration of the required work
(the "Lease Term").
4. EMPLOYEE LEASING. Upon any request for the development of any
Modification or the provision of Maintenance and Support pursuant to Section
3.1 hereof, Licensee shall enter into a lease arrangement with respect to the
employee(s) designated by Licensor (the "Assigned Employees"), which shall
continue for the duration of the Lease Term and any commercially reasonably
required extension thereof, upon the following terms and conditions:
4.1. Taxes, etc. During the Lease Term, Licensor will be
responsible for all matters related to the payment of federal, state and local
payroll taxes, workers' compensation insurance, salaries and fringe benefits
for the Assigned Employees.
4.2. Direction and Control. Licensee agrees that it shall be
responsible for the direction and control of the Assigned Employees during the
Lease Term, that it shall be solely responsible for the acts, omissions and
work product of such Assigned Employees during the Lease Term, and that it
shall have the sole responsibility for providing all facilities, furnishings,
equipment and supplies for the Assigned Employees.
4.3. Employee Reversion. At any time during the Lease Term,
Licensee may notify Licensor of any of the Assigned Employees whose services
Licensee no longer requires. Such notice shall constitute an "Employee
Reversion" with respect to each Assigned Employee listed in the notice,
effective at midnight on the fifteenth day of the month in which the
notification is received, or at midnight on the last day of that month if
notice is given after the fifteenth day. At the end of the Lease Term or any
extension thereof, there shall automatically occur an Employee Reversion with
respect to all remaining Assigned Employees, effective on
-3-
<PAGE> 4
such date. Following the effective date of an Employee Reversion relating to
any specific Assigned Employee, the Assigned Employee will no longer perform
any services for Licensee and Licensee shall not have any further obligation
with respect to such Assigned Employee.
4.4. Employee Termination. Licensor retains the right to
terminate any Assigned Employee at any time during the term of this Agreement,
without the consent of Licensee, for appropriate cause in accordance with
Licensor's standard personnel policies. Licensor shall consult in good faith
with Licensee before terminating any Assigned Employee. Licensor shall
promptly replace any Assigned Employee who resigns, is terminated, or otherwise
ceases to perform services other than in connection with an Employee Reversion.
4.5. Compensation. In consideration of Licensor providing
the development of Modifications and Software Support and Maintenance requested
in Section 3.1, Licensee shall pay Licensor the leased employee fees specified
in Schedule C.
5. OWNERSHIP RIGHTS. The Licensee hereby acknowledges and agrees that
the Software and all Modifications are the valuable, confidential and secret
property of the Licensor and the Licensor owns all right, title and interest in
and to the Software and Modifications, including, without limitation, all
ancillary and interface system software, all current and future enhancements,
modifications, revisions, upgrades, new releases, and derivative works thereof,
all documentation related thereto, and all copyrights, trade secrets, and
patents therein and/or any registrations in, or the right to register, the
copyrights, trade secrets or patents, and any and all renewals, reversions and
extensions of any such copyrights, trade secrets or patents, in the United
States and every other country in the world.
6. DISCLAIMER OF WARRANTY; LIMITATION OF LIABILITY. LICENSEE AGREES
THAT THE SOFTWARE AND DOCUMENTATION IS LICENSED HEREUNDER ON AN "AS IS" BASIS
WITHOUT ANY WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, OF ANY NATURE
WHATSOEVER, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL
LICENSOR BE LIABLE FOR LOSS OF PROFITS, USE OR INTERRUPTION OF BUSINESS,
DIRECT, INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR OTHER DAMAGES ARISING
OUT OF OR RELATING TO THE LICENSEE'S USE OF THE SOFTWARE, EVEN IF THE LICENSOR
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
7. COVENANTS.
7.1. Licensor. Licensor agrees, during the term hereof, that
it will not use or sublicense the Software in a manner that violates Section
2(b) of the Federated Agreement. Licensor further agrees, during the term
hereof, to make available Support and Maintenance
-4-
<PAGE> 5
services to clients of Federated which are valid licensees of the Software,
upon terms and conditions comparable to those commercially available to
licensee's of the Software, generally.
7.2. Licensee. Licensee agrees, during the term hereof, to
comply with its obligations under the Federated Agreement, including its
obligations under Section 2(a) of the Federated Agreement.
8. INDEMNIFICATION. The Licensee agrees to indemnify, defend and hold
harmless the Licensor against any and all claims, liabilities, damages, costs
and expenses (including reasonable attorneys' fees and costs) arising out of or
related to (a) the exercise by Licensee of any of the rights granted to
Licensee herein, (b) the performance of any services as set forth in Section 4
hereof, and (c) any breach by Licensee of any representation, warranty or
covenant of Licensee hereunder. Licensor agrees to indemnify, defend and hold
harmless the Licensee against any and all claims, liabilities, damages, costs
and expenses (including reasonable attorneys' fees and costs) arising out of
any breach of Licensor's obligations under Section 7.1 hereof.
9. MISCELLANEOUS.
9.1. Term. This Agreement becomes effective upon the
execution by both of the parties hereto and shall continue in effect until the
earlier of (a) the expiration or termination of the Federated Agreement and the
obligations of Licensee thereunder or (b) the fifth anniversary date of the
First Installation (as defined in Section 1 of the Federated Agreement), at
which time this Agreement shall terminate and shall have no further effect.
9.2. Successors and Assigns. None of the rights granted to
or obligations assumed by the Licensee hereunder may be assigned, sold,
subcontracted or otherwise transferred without the prior written consent of the
Licensor; provided that Licensee may assign all or any part of its rights or
obligations hereunder to any of its Affiliates (as defined below), but shall
remain fully responsible for the compliance by its Affiliate with all of the
terms, conditions, limitations and restrictions contained herein. As used in
this Agreement, the term "Affiliate" means any entity that, directly or
indirectly, controls, is controlled by, or is under common control with,
Licensee. Any attempt to assign or transfer any of the rights, duties or
obligations under this Agreement in contravention of this paragraph is void.
9.3. Governing Law. This Agreement shall be governed by the
laws of The Commonwealth of Massachusetts.
9.4. Notices. All notices, including notices of address
changes, required to be sent hereunder shall be in writing and shall be deemed
to have been given when received by certified mail, return receipt requested,
or sent by telefax to the party at the address set forth with its signature
below.
-5-
<PAGE> 6
9.5. Amendment and Modification. This Agreement may be
amended, modified or supplemented only by a written agreement signed by both
parties.
9.6. Interpretation of Agreement. In the event that any
provision of this Agreement is held to be invalid or unenforceable, the
remaining provisions of this Agreement will remain in full force and effect.
The waiver by any party of any default or breach of this Agreement shall not
constitute a waiver of any other subsequent default or breach.
9.7. Multiple Counterparts. This Agreement may be executed
in several counterparts, all of which taken together shall constitute one
single Agreement between the parties.
9.8. Section Headings. The section and subsection headings
used herein are for reference and convenience only and shall not enter into the
interpretation hereof.
9.9. Entire Agreement. This Agreement and the Purchase
Agreement constitute the complete understanding between the parties with
respect to the subject matter hereof and supersedes all previous written or
oral agreements and representations.
9.10. Relationship of Parties. This Agreement is not
intended to and does not create a partnership or joint venture relationship
among the parties. No employee of Licensor shall be entitled to any Licensee
or BSI benefits and no such employee is covered by the workers compensation
insurance of Licensee or BSI. Licensor has no authority to enter into any
contracts or agreements on behalf of Licensee or to make any warranties or
representations that purport to bind Licensee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
the year and date first above written.
BANCCORP SYSTEMS, INC. FIDELITY ASSET MANAGEMENT SERVICES, LLC
By: /s/ Alan C. Stanford By: /s/ Paul J. Hondros
--------------------------- ---------------------------
Title: President Title: President
------------------------ ------------------------
NOTICE: NOTICE:
Broadway & Seymour, Inc. 82 Devonshire Street
128 South Tryon Street, Suite 1000 Boston, MA 02110
Charlotte, North Carolina 28101-5050 Attn: Jay Freedman, Esq.
Fax: (704) 344-3542 Fax: (617) 476-0932
-6-
<PAGE> 7
SCHEDULE A
TO
LICENSE AND SUPPORT SERVICES AGREEMENT
TRUSTPROCESSOR SOFTWARE
Technical Description of Trust Processor
TrustProcessor is a general ledger based system that is used by bank trust
departments, trust companies, private family trusts, non-profit foundations,
universities and religious organizations to manage personal trusts, charitable
trusts, pooled funds and common funds.
TrustProcessor International is a general ledger based asset management system
used by private off-shore banks for asset management and shareholder accounting
for mutual funds. Current value for bid and offer price can be calculated for
each mutual fund through the system's Net Asset Value Calculator. Calculations
may be defined differently for each fund and may be run on any frequency as
needed. A Shareholder Register may also be produced for each fund. Provides
multi- currency functionality.
The Key Functionality and Features of TrustProcessor Include:
- General Ledger Based
- Trade/Settlement Date Accounting
- Manages Charitable Trusts
CRUTS, CRATS, Pooled
Income Funds
- Manages Mutual Funds and
Common Trust Funds
- Consolidates Multiple Asset
Managers
- Self Directed IRA's
- Customized Reports and Forms
- Multiple Report Controllers
- Purchase/Sale Advice Notices
- On-Line Customer Inquiry
- 1099 Forms/Magnetic Media
Reporting
- Central Name & Address File
- Automatic Market Pricing and
Dividend Mapping
<PAGE> 8
- Automatic Cash Sweep and
Interest Accruals
- Expense and Beneficiary Check
Writing
- Regenerating Tickler File
- Automatic Trust Fee Calculations
- Multi-Level System Security
- Automatic Conversion of
Customer Data, Balances,
and History available
- Portfolio Modeling
Add-on Module available
- Net Asset Value Calculator
Add-on Module available
- Interfaces to IRS Tax Form
Preparation Software
- Interfaces with several Cash
Management Firms
- Interfaces with Lotus 1-2-3
-8-
<PAGE> 9
SCHEDULE B
TO
LICENSE AND SUPPORT SERVICES AGREEMENT
SUPPORT AND MAINTENANCE
"Support and Maintenance" means customary maintenance services
relating to the Software, including, without limitation, (i) the installation
of modifications and improvements to the Software in order to prevent or remedy
unintended results, to provide greater efficiency and ease of operations, or to
fulfill federal regulatory requirements, and (ii) the provision of cooperation
and assistance in obtaining and providing relevant information, documentation
and related materials concerning errors, issues, needs and priorities and in
implementing support and maintenance corrections and procedures.
-9-
<PAGE> 10
SCHEDULE C
TO
LICENSE AND SUPPORT SERVICES AGREEMENT
LEASED EMPLOYEE FEES
Development of Modifications Services:
Licensor's then prevailing rates
Support and Maintenance Services:
Licensor's then prevailing rates
-10-
<PAGE> 1
EXHIBIT 2.4
TEMPORARY PROFESSIONAL SERVICES AGREEMENT
TEMPORARY PROFESSIONAL SERVICES AGREEMENT (the "Agreement"), dated as
of May 15, 1996, by and between BROADWAY & SEYMOUR, INC., a Delaware
corporation ("BSI") and FIDELITY ASSET MANAGEMENT SERVICES, LLC, a Delaware
Limited Liability Company (the "Buyer").
WHEREAS, pursuant to an Asset Purchase Agreement dated as of April 10,
1996, as amended (the "Purchase Agreement"), the Buyer is, concurrently
herewith, purchasing certain assets relating to BSI's Asset Management
Service Group and the business conducted thereby, including certain
intellectual property owned by BancCorp System, Inc. (the "AMSG Business")
from BSI and certain of its subsidiaries; and
WHEREAS, because of BSI's prior experience with the operation of the
AMSG Business and its existing knowledge of the sources of expertise and
know-how available to furnish consulting services to that type of business, the
Buyer desires to retain BSI's assistance in providing such services, and BSI is
willing to provide such services to the Buyer, on the terms set forth herein;
and
WHEREAS, in connection herewith, BSI and Personnel (as defined below)
will have access to confidential and proprietary information of Buyer and its
affiliates, all of which is non-public, including, but not limited to, all
products designed, developed or enhanced by the Personnel.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, provisions, covenants and conditions contained in this Agreement,
BSI and the Buyer hereby agree as follows:
SECTION SECTION 1. Definitions. Capitalized terms used
herein and not otherwise defined in this Agreement (including the schedules to
this Agreement (each a "Schedule" and,
<PAGE> 2
collectively, the "Schedules") shall have the meanings assigned such terms in
the Purchase Agreement.
SECTION 2. Effective Date. This Agreement shall become effective
and binding on the parties hereto from and after the Closing (if the Closing
shall occur).
SECTION 3. Preferred Provider. Buyer hereby designates BSI as a
preferred provider to Buyer of services of the types required by the Buyer's
customers in connection with the AMSG Business.
SECTION 4. Engagement of Personnel. (a) Buyer hereby engages BSI
to provide personnel to perform services as set forth in work orders submitted
by Buyer as hereinafter provided.
(b) During the Initial Term, as hereinafter defined, upon
receipt of a work order from Buyer, BSI agrees to locate, submit for Buyer's
approval, and contract for personnel (the "Personnel") and for Tryon (as
defined below) to provide programming and other analytical services with
respect to the AMSG Business (the "Services") as may be designated in such work
order, either utilizing those consultants of BSI listed on Schedule A or other
consultants located by BSI. BSI shall submit each Personnel-candidate to Buyer
for Buyer's approval before BSI formally contracts for his or her Services.
Thereafter, when requested by the Buyer, BSI shall ensure that Buyer's standard
Non-Disclosure Agreement for independent contractors (the "Buyer Non-Disclosure
Agreement", a copy of which shall be provided to BSI as soon as possible after
the execution of this Agreement and which shall be substantially in the form of
the document attached hereto as Schedule D, modified as appropriate to reflect
that the Personnel will be independent contractors) is completed and executed
by Personnel prior to their arrival at Buyer for any required fingerprinting,
badging and other clearances, including providing evidence of requisite
Workmen's Compensation Insurance or the waiver thereof. Whenever Personnel is
subsequently terminated or removed prior to completion of the Services, BSI
shall promptly locate a replacement in accordance with the foregoing
procedures. During the Initial Term Buyer will use its best efforts to
continue to operate the AMSG Business in a commercially reasonable manner.
-2-
<PAGE> 3
(c) After the Personnel has been contracted for they shall be
under the sole supervision and direction of Buyer with respect to the content
and performance of their Services. Personnel shall perform their assignments
in accordance with the directions of Buyer's project manager in charge of the
project to which such Personnel have been assigned, and in accordance with
Buyer's standards. While Personnel are on Buyer's premises, they shall comply
with Buyer's rules, regulations, policies and security procedures.
(d) Buyer shall have the right to have any Personnel supplied
by BSI hereunder removed as a provider of any Services, with or without cause,
upon written notice to BSI. BSI may terminate any Personnel for cause or for
unwillingness to work at Buyer's location, or for refusal to execute any
document required hereunder, whereupon BSI shall immediately notify Buyer and
withdraw such Personnel from the Buyer's location. Whenever Personnel have
been terminated as herein provided, BSI shall use reasonable efforts to furnish
Buyer with a qualified replacement as promptly as possible.
(e) Each work order submitted by Buyer to BSI shall identify
the type of Services required, the terms within which the Services are to be
performed, and an estimate of the number of hours required and the appropriate
rate.
(f) BSI agrees to use reasonable efforts to provide the Buyer
access for the purposes of the Buyer consulting with BSI personnel with regard
to the Buyer's establishment of systems and procedures to be used to replace
the Services following the expiration of this Agreement; provided, however,
that the Buyer will reimburse BSI for any direct incremental cost incurred by
BSI in providing such consultation, including, but not limited to, travel
expenses.
(g) BSI currently has a contract with Tryon System
Corporation ("Tryon") dated December 16, 1994 (the "Tryon Agreement", a copy of
which is attached hereto as Exhibit E), effective through January 1, 1997,
whereby Tryon is obligated, as a subcontractor, to perform support services for
BSI or its clients. Buyer believes it will receive a substantial benefit if
BSI does not exercise its rights to terminate the Tryon Agreement on or after
the Closing but rather subcontracts services requested by Buyer to
-3-
<PAGE> 4
the extent available under the Tryon Agreement. All such services will be
performed under Buyer's sole supervision and direction with respect to the
content and performance of such services.
SECTION 5. Payment.
(a) Buyer agrees to compensate BSI for Services rendered by
BSI's Personnel as well as services performed by Tryon on an hourly basis at
the rates specified in Schedule B, or on such other negotiated basis as BSI and
Buyer may hereafter agree in writing with respect to a specific request for
Services. The rates specified in Schedule B have been jointly developed by the
parties and reflect BSI's current average weighted cost for the Services to be
provided. Schedule B shall be reviewed by the parties at the end of each
six-month period and adjusted as appropriate to reflect any verified increase
in costs to BSI in providing such Services, including, but not limited to,
higher supply, service or equipment expenses.
In addition, any expenses reasonably incurred by Tryon and Personnel
in the performance of Services hereunder, including travel and living expenses,
if applicable, to the extent incurred in accordance with the Tryon Agreement or
previously authorized in writing by Buyer, as the case may be, shall be
reimbursed by Buyer to such Personnel or Tryon at cost upon submission of
documentation and itemization thereof.
(b) The parties estimate that Buyer will use that average
number of hours of service each month that is specified in Schedule B (the
"Estimated Service Level") during the Initial Term of this Agreement. To
provide BSI with adequate cash flow to cover its expenses in carrying out its
obligations hereunder, Buyer will, subject to the provisions of Section 9
hereof and subject to the provisions of a letter agreement between the parties
dated May 15, 1996, pay BSI for each month during the Initial Term an amount
equal to (i) 1/3 of the hourly rates specified in Schedule B for each type of
consultant multiplied by the Estimated Service Level for such type of
consultant (the "Monthly Basic Payment") plus (ii) 2/3 of the hourly rates
specified in Schedule B for the actual hours of services provided during such
month, adjusted to reflect any difference between the estimated average
weighted cost for the Services, as provided in Schedule B, and the actual cost
of the Services during such month. At the end
-4-
<PAGE> 5
of each calendar year, the parties shall make such adjustments as may be
necessary to reconcile the total payments made by Buyer with the total amount
payable by Buyer hereunder.
(c) All charges payable by the Buyer hereunder shall be
invoiced by BSI on a monthly basis (with the first month to end on the first
monthly anniversary of the Closing). All invoices must be sent to Fidelity
Asset Management Services, LLC., 82 Devonshire Street - A3C, Boston,
Massachusetts, 02109, Attention: Joseph M. Collins and shall conspicuously
bear the purchase order number to which the invoice relates and the rate
charged based upon the rate schedule. All payments from the Buyer in respect
of the Services shall be due thirty (30) days from the date of the invoice.
SECTION 6. Committed Services. Buyer agrees that, during each
month during the Initial Term, it will obtain from BSI sufficient services from
Personnel and Tryon to provide no less than the Estimated Service Level
specified on Schedule B, at the rates specified in Schedule B, as adjusted
herein. In addition, Buyer agrees that, of such aggregate hours, Buyer will
obtain sufficient services from Tryon, of the nature provided for in the Tryon
Agreement, to provide no less than the Estimated Service Level specified for
Tryon in Schedule B. In addition, Buyer agrees that, of such aggregate hours,
Buyer will obtain a sufficient number of hours of services from Tryon to cover
the minimum fixed fees under the Tryon Agreement.
In addition, BSI and the Buyer agree to negotiate in good faith
regarding the provision by BSI to the Buyer of other Personnel to perform any
other services (and the terms and conditions thereof) as are reasonably
requested by the Buyer and are not covered by this Agreement or the Schedules.
If any agreement is reached regarding such other services, it shall be
evidenced by an amendment to the Schedules, at which time such services shall
be subject to the provisions of this Agreement.
SECTION 7. Term. The term of this Agreement shall be twenty-four
(24) months after the Closing Date (the "Initial Term"), unless sooner
terminated. Any extension of the term of this Agreement must be in writing as
mutually agreed by the parties.
-5-
<PAGE> 6
SECTION 8. Termination and Cancellation Penalty
This Agreement shall automatically terminate upon the occurrence of
any of the following events: (i) BSI becomes insolvent or makes a general
assignment for the benefit of its creditors; (ii) BSI files a voluntary
petition of bankruptcy, suffers or permits the appointment of a receiver or
trustee in bankruptcy over any or all of its business or assets; (iii) BSI
becomes subject to any proceedings under any bankruptcy or insolvency law,
whether domestic or foreign, or has wound up or liquidated, voluntarily or
otherwise; (iv) BSI's admission of its inability to pay its debts generally as
they come due ((i) through (iv) collectively shall be referred to herein as
"Bankruptcy Defaults") or (v) the assignment by BSI of any of its rights or
obligations under this Agreement without Buyer's permission.
In addition, Buyer may in its discretion terminate this Agreement at
any time upon at least 30 days prior written notice.
BSI may not terminate this Agreement except in the event that Buyer
fails to cure a material breach hereof committed by Buyer within ten days after
Buyer's receipt of written notice from BSI of such breach.
Upon any termination of this Agreement by either Party hereto
(including a termination for cause by Buyer) the Tryon Agreement and all then
existing BSI contracts with Personnel for Services shall be deemed to be
assigned to, and the executory obligations thereunder assumed by, Buyer and, to
the extent that Buyer has not fulfilled its minimum commitment to obtain
Services under Section 6 hereof, Buyer shall, subject to the provisions of
Section 9, pay to BSI a cancellation penalty in an amount calculated in
accordance with Schedule C hereto; provided, however, that if this Agreement is
terminated due to a Bankruptcy Default, any amount owing to Personnel or Tryon
by BSI for services rendered prior to such Bankruptcy Default shall be deducted
from the cancellation penalty payable to BSI and paid by Buyer to such
Personnel or Tryon.
-6-
<PAGE> 7
SECTION 9. Buyer's Offset Rights. BSI and Buyer acknowledge that
in the Purchase Agreement each of them has indemnified the other against
certain Losses (as therein defined) (the "Indemnity Provisions").
BSI hereby agrees that during the Initial Term of this Agreement,
whenever Buyer has a liquidated claim against BSI under the Indemnity
Provisions, Buyer shall have the right to offset such claim or claims against
the Monthly Basic Payments otherwise due to BSI under Section 5(b) hereof until
the claim or claims have been paid in full.
BSI further agrees that, beginning with the eleventh month of the
Initial Term, whether or not Buyer has a then current claim under the Indemnity
Provisions, Buyer shall each month withhold an amount equal to the Monthly
Basic Payment for such month until it has accumulated withholdings in an
aggregate amount equal to $2,000,000 less the amount of any claims paid under
the preceding paragraph or as hereinafter provided, such amount to be held in
escrow by Buyer for the ultimate benefit of BSI and to be applied first toward
the payment of any of Buyer's liquidated claims against BSI under the Indemnity
Provisions during the balance of the Initial Term with any remaining balance at
the end of the Initial Term to be paid to BSI by Buyer.
BSI further agrees that, if this Agreement is for any reason
terminated prior to the end of the Initial Term, then Buyer may withhold and
offset against any cancellation penalty then due pursuant to Section 8 hereof
an amount equal to $2,000,000 (less the amount of the liquidated claims, if
any, paid prior thereto in accordance with the two preceding paragraphs) and
less any amounts already escrowed pursuant to the next preceding paragraph,
such amount to be held in escrow by Buyer until the second anniversary of the
date of this Agreement for the ultimate benefit of BSI and to be applied first
toward the payment of any of Buyer's liquidated claims against BSI under the
Indemnity Provisions which arise prior to such anniversary with any balance
remaining on such anniversary to be paid to BSI; provided, however, that, if on
such second anniversary there are any pending unliquidated claims by Buyer
under the Indemnity Provisions, then that portion of the balance of said escrow
fund as of such date reasonably required to pay Buyer's good faith estimate of
the amount of such claims shall continue to be held in
-7-
<PAGE> 8
escrow as aforesaid until such claims have been paid or otherwise disposed of
at which time any remaining balance shall be paid to BSI.
For purposes of this Section, "liquidated claim" shall mean any claim
of Buyer under the Indemnity Provisions which has been reduced to a final
amount either by mutual agreement of the Buyer and BSI or by a final judgment
or settlement in accordance with the Indemnity Provisions.
The Parties agree that the provisions of this Section 9 shall survive
any Termination of this Agreement and continue in full force and effect until
the escrow provisions hereof have been fulfilled.
SECTION 10. Limitation of Liability. Neither party shall be
liable for any delays beyond its reasonable control or for any direct,
consequential or incidental damages, including, without limitation, loss of
profits or damage to or loss of use of any property arising out of or directly
or indirectly relating to the provision of the Services pursuant to this
Agreement, except to the extent of either party's willful misconduct or gross
negligence. Nothing in this Section 10 shall be construed as limiting Buyer's
obligation to pay BSI the amount required by Section 5, 6, 8 and 9 hereunder.
SECTION 11. Access to Information. The Buyer agrees to provide to
BSI all information necessary for BSI to provide the Services required pursuant
to this Agreement. BSI shall maintain all such information in confidence in
accordance with the provisions of Section 13 hereof.
SECTION 12. Successors and Assigns. This Agreement shall be
binding on and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement shall not be assigned by
either party, without the consent of the other party hereto and such attempted
assignment shall be null and void, provided, however, that the Buyer shall have
the right to assign its rights hereunder to any Affiliate of the Buyer which
succeeds to the business of the Buyer relating to the AMSG Business; provided
further, however, that such assignee shall execute a counterpart of this
Agreement agreeing to be bound by the provisions hereof as the "Buyer," and
agreeing to
-8-
<PAGE> 9
be jointly and severally liable with the assignor and any other assignee for
all of the obligations of the assignor hereunder, but no such assignment of
this Agreement or any of the rights or obligations hereunder shall relieve the
Buyer of its obligations under this Agreement.
SECTION 13. Confidentiality. BSI agrees not to disclose to others,
advertise or publish that it is performing or has performed any work or service
on behalf of Buyer whether under this Agreement or otherwise.
BSI acknowledges and understands the competitive value and
confidential nature of internal, non-public financial and business information
of Buyer. BSI also understands that all information relating thereto
("Proprietary Information") is confidential, proprietary and trade secrets of
Buyer and its Affiliates. BSI agrees to use its best efforts (the same being
not less than that employed to protect its own proprietary information) to
safeguard the Proprietary Information and to prevent the unauthorized,
negligent or inadvertent use or disclosure thereof. Specifically and without
limiting the foregoing, BSI agrees to require Personnel to be bound by a
written Buyer Non-Disclosure Agreement.
BSI shall not, without the prior written approval of an
officer of Buyer, directly or indirectly, use or disclose the Proprietary
Information to any person or business entity except to a limited number of
employees of BSI on a need-to-know basis. BSI shall not in any manner copy or
reproduce all or any portion of the Proprietary Information without the prior
written approval of an officer of Buyer.
Notwithstanding anything in this Agreement to the contrary,
BSI may disclose such Proprietary Information: (a) as may be legally required
in response to any summons, order or subpoena issued by a court or governmental
agency, provided BSI provides Buyer with immediate notification of such
summons, order or subpoena; (b) which is or becomes available to the general
public through no act or failure by BSI; (c) which is subsequently disclosed to
BSI on a non-confidential basis by a third party not having a confidential
relationship with Buyer or its Affiliates which rightfully acquired such
information.
-9-
<PAGE> 10
BSI shall, upon completion or other termination of any
Personnel's engagement or upon demand by Buyer, whichever is earlier, promptly
return to Buyer any and all Proprietary Information relating to such engagement
in BSI's possession together with any copies or reproductions thereof in BSI's
possession. BSI shall at such time provide Buyer with a certificate signed by
an officer of BSI certifying that all such Proprietary Information has been
returned to Buyer.
BSI shall promptly notify Buyer in writing upon learning of
any unauthorized, negligent or inadvertent use or disclosure of Proprietary
Information.
BSI acknowledges and understands that the use or disclosure of
the Proprietary Information in any manner inconsistent with this Agreement will
cause Buyer irreparable damage. Buyer shall have the right to: (i) equitable
and injunctive relief to prevent such unauthorized, negligent or inadvertent
use or disclosure; and (ii) recover the amount of all such damage (including
attorneys' fees and expenses) to Buyer in connection with such use or
disclosure.
BSI authorizes Buyer, its Affiliates and their agents to
conduct a security and background investigation of Personnel including, but not
limited to, parties for whom Personnel have performed services, governmental
agencies, credit reporting institutions, educational institutions, and other
companies, agencies, and organizations.
The provisions of this Article shall survive the termination
or cancellation of this Agreement or any agreement for services between BSI and
Buyer.
SECTION 14. Ownership. BSI shall require each Personnel to sign
the Buyer Non-Disclosure Agreement. In addition, BSI hereby assigns to Buyer
all of its rights, title and interest under Section 5.4 of the Tryon Agreement.
BSI agrees when requested by Buyer to execute all rightful
oaths, assignments, instruments of transfer, powers of attorney and other
papers and to communicate to Buyer all facts known to BSI relating to the
development, implementation and reduction to practice of any inventions by
Personnel or Tryon within the scope of this
-10-
<PAGE> 11
Agreement and to do everything reasonably possible which Buyer may consider
desirable for securing and maintaining protection of any copyrights, inventions
and trade secrets created within the scope of this Agreement and vesting title
thereto in Buyer. BSI further agrees, where necessary to obtain the agreement
and cooperation of all employees, officers, agents and subcontractors of BSI
who may reasonably be considered an inventor or co-inventor of an
implementation, development, modification or reduction to practice of any such
inventions or an author of any such copyright to assign their entire right,
title and interest in and to the inventions and/or copyright to Buyer and to
execute all oaths, declarations, powers of attorney and the like as Buyer may
reasonably request in furtherance of its attempts to protect the inventions by
way of patent or otherwise.
SECTION 15. Independent Contractor. The relationship of each party
that is created hereunder is that of an independent contractor. This Agreement
is not intended to create and shall not be construed as creating between the
parties the relationship of affiliate, principal and agent, joint venture,
partnership, or any other similar relationship, the existence of which is
hereby expressly denied. Nothing in this Agreement shall be construed to
create an employer-employee relationship between Buyer and any Personnel
supplied by BSI.
SECTION 16. Insurance. BSI, at its own expense, shall procure and
maintain policies of insurance to include the following coverage:
(i) Workers' Compensation Insurance coverage for its own
employees that meets or exceeds the applicable
statutory limits, as well as Employer's Liability
coverage with limits of at least $500,000;
(ii) Comprehensive General Liability Insurance of at least
$1,000,000 combined single limit; and
(iii) Comprehensive Automobile Liability Insurance,
including Automobile Non-Ownership Liability, with a
limit of not less than $1,000,000 and Umbrella or
Excess Liability Insurance in an amount not less than
$5,000,000.
-11-
<PAGE> 12
BSI shall furnish Buyer with a Certificate of Insurance evidencing the
coverage listed above and, where applicable, naming Buyer as an additional
insured. No insurance policies listed above may be canceled by BSI unless
Buyer has received ten (10) business days prior written notice of BSI's intent
to cancel such policy. Nothing in this Section 16 shall be deemed to limit
BSI's responsibility under this Agreement to the amounts stated above or to any
limits of BSI's insurance policies.
SECTION 17. Notice. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other party (other
than the written documentation which is part of the Services, which shall be
furnished to the Buyer at its address as requested by it) shall be in writing
and shall be given (and will be deemed to have been duly given upon receipt) by
delivery in person, by electronic facsimile transmission, cable, telegram,
telex or other standard form of telecommunications, by overnight courier or by
registered or certified mail, postage prepaid, addressed as follows.
if to BSI:
Broadway & Seymour, Inc.
128 South Tryon Street
Charlotte, North Carolina 28202
Attention: General Counsel
Telecopy: (704) 344-3542
-12-
<PAGE> 13
with a copy to:
Robinson, Bradshaw & Hinson, PA
One Independence Center
101 North Tryon Street, Suite 1900
Charlotte, North Carolina 28246-1900
Attention: Robert Bryan, Esq.
Telecopy: (704) 378-4000
if to the Buyer to:
Fidelity Asset Management Services, LLC
Fidelity Systems Company
82 Devonshire Street
Boston, MA 02109
Attention: Joseph M. Collins
Telecopy: (617) 476-6699
With copies to:
Ropes & Gray
One International Place
Boston, MA 02110
Telecopy: 617-951-7050
Attention: John A. Ritsher, Esq.
or at such other address for a party as shall be specified by written notice.
SECTION 18. Modification and Waiver. No amendment, modification or
alteration of the terms or provisions of this Agreement or any Schedule shall
be binding unless the same shall be in writing and duly executed by the parties
hereto, except that any of the terms or provisions of this Agreement or any
Schedule may be waived in writing at any time by the party which is entitled to
the benefits of such waived terms or provisions. No waiver of any of the
provisions of this Agreement or any Schedule shall be deemed to or shall
constitute a waiver of any other provision of this Agreement or any Schedule,
whether or not similar. No waiver by any party of any breach or violation of
this Agreement or any Schedule shall be deemed or construed as a waiver of any
subsequent
-13-
<PAGE> 14
breach or violation thereof, whether or not similar. No delay on the part of
any party in exercising any right, power or privilege hereunder or under any
Schedule shall operate as a waiver thereof.
SECTION 19. Entire Agreement. Except for and without limiting any
party's rights under the Purchase Agreement, this Agreement and the Schedules
constitute the entire agreement and understanding between the parties and
supersede all prior proposals, commitments, negotiations and understandings,
whether written or oral, and all other communications between the parties
relating to the subject matter hereof.
SECTION 20. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic substantive laws of the Commonwealth
of Massachusetts, without giving effect to any choice or conflict of law
provision or rule that would cause the application of the laws of any other
jurisdiction.
SECTION 21. Severability. The provisions of this Agreement and the
Schedules shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof or of any Schedule. If any provision of this Agreement or
any Schedule, or the application thereof to any person or entity or any
circumstance, is invalid or unenforceable: (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision; and (ii) the remainder of this Agreement and the Schedules and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
SECTION 22. Third Party Beneficiaries. Except as expressly
provided herein, nothing in this Agreement or in any Schedule shall entitle any
Person other than the parties or their respective successors and assigns
permitted hereby to any claim, cause of action, remedy or right of any kind.
SECTION 23. Force Majeure. BSI shall be excused for failure to
provide the Services hereunder to the extent that such failure is directly or
indirectly caused by an occurrence commonly known as force majeure. In the
event that BSI's performance hereunder is affected by an event of force
majeure, BSI shall promptly notify the Buyer of the same, giving reasonably
full particulars thereof, and insofar as known, the probable
-14-
<PAGE> 15
extent to which it will be unable to perform, or will be delayed in performing,
its obligations hereunder and shall use its reasonable efforts to remove such
force majeure as quickly as possible.
SECTION 24. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and all
of which together shall be deemed to be one and the same document.
-15-
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
BROADWAY & SEYMOUR, INC.
By: /s/ Alan C. Stanford
-----------------------------------
Name: Alan C. Stanford
Title: President
FIDELITY ASSET MANAGEMENT
SERVICES, LLC
By: /s/ Paul Hondros
-----------------------------------
Name:
Title: President
-16-
<PAGE> 17
TEMPORARY PROFESSIONAL SERVICES AGREEMENT
SCHEDULE A
CONSULTANTS
<TABLE>
<CAPTION>
Company Individual
- ------- ----------
<S> <C>
Tryon Systems
Computer Personnel
CAI
Rishavy, Adreinne
Sawyer & Associates Sawyer, P.
Advanced Software Maas, J.
Advanced Software Shaw, D.
Strategic Staffing Cooper, A
Strategic Staffing Denkler, D.
Strategic Staffing Geiger, R.
Strategic Staffing Moffitt, W.
IMI Systems Cocivera, J.
IMI Systems Francis, L.
IMI Systems Spilker, A.
IMI Systems Moreno, R.
Olmstead Bennet, M.
Olmstead Brayman, L.
Olmstead Bracken, P.
Olmstead Ramsdel, L.
Olmstead Wilson, R.
Olmstead Marinilli, N.
Computer Professionals (CPI) Sciranko, R.
Computer Professionals (CPI) St. Vincent, L.
Corporate Staffing Ryan, S.
Corporate Staffing McBride, S.
Ciber Rowan, M.
Ciber Gordon, K.
Ciber Coffey, M.
Adia Personnel Services Ferguson, P.
Adia Personnel Services Amidan, P.
Dawn Personnel Cooper, M.
Dawn Personnel Cassidy, D.
</TABLE>
<PAGE> 18
<TABLE>
<S> <C>
Office Team Sisk, T.
Fusion Systems Group Hogan, J.
Fusion Systems Group Holzinger, S.
Fusion Systems Group Kraffmiller, E.
Fusion Systems Group Nash, M.
Seek Consulting Lypka, D.
Seek Consulting Gaines, J.
Seek Consulting Mehta, M.
Seek Consulting Abraham, I.
Seek Consulting Gordon, K.
Computer People, Inc. Abraham, I.
Kelly Services Lowrey, M.
SPC Midwinter, R.
Premier Alliance Shivaiah, V.
Premier Alliance Chaware, R.
</TABLE>
<PAGE> 19
TEMPORARY PROFESSIONAL SERVICES AGREEMENT
SCHEDULE B
FEE SCHEDULE
<TABLE>
<CAPTION>
Est. Service Level Average Weighted
(per month) Cost/hour
<S> <C> <C>
Tryon Consultants 1,500 $136.49
Personnel 2,889 $80.58
-----
4,389
</TABLE>
<PAGE> 20
SCHEDULE C
CANCELLATION PENALTY
The cancellation penalty shall be calculated by multiplying the Monthly Basic
Payment by the number of months remaining until the originally scheduled end of
the Initial Term.
<PAGE> 1
EXHIBIT 2.5
EXECUTION COPY
GUARANTEE AND INDEMNITY AGREEMENT
This Agreement is entered into this 10th day of April, 1996 by and
between BROADWAY & SEYMOUR, INC., a Delaware corporation with its principal
place of business in Charlotte, North Carolina, ("BSI") and FIDELITY
INVESTMENTS INSTITUTIONAL SERVICES, INC. ("FIIS"), a Massachusetts corporation
with its principal place of business in Boston, Massachusetts. Certain
capitalized terms used herein but not defined herein shall have the meanings
ascribed to such terms in the Asset Purchase Agreement dated as of April 10,
1996, by and among BSI and certain of its subsidiaries and FIIS (the "Purchase
Agreement).
BACKGROUND
WHEREAS, FIIS, BSI and certain wholly-owned subsidiaries of BSI (the
"Sellers"), have entered into the Purchase Agreement, wherein the Sellers have
agreed to sell the AMSG Business to FIIS;
WHEREAS, FIIS and CORBEL & COMPANY, a Florida corporation with its
principal place of business in Jacksonville, Florida (on behalf of itself and
its wholly-owned subsidiary TOTAL ADMINISTRATIVE BENEFIT SYSTEMS, INC. (d/b/a
Pentab) (referred to hereinafter collectively, for all purposes, as "Corbel")
have entered into that certain Quantech License and Services Agreement of even
date herewith (the "Quantech License");
WHEREAS, it is a condition to the execution of the Quantech License
that FIIS and BSI enter into this Agreement, pursuant to which, among other
things, BSI unconditionally guarantees the obligations of Corbel under the
Quantech License and agrees to indemnify FIIS with respect to certain matters
thereunder and hereunder.
NOW, THEREFORE, the parties hereto agree for themselves, their
successors and assigns as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings set forth below:
1.1. "Affiliate" means any other Person directly or
indirectly Controlling, Controlled by or under common Control with a Person.
1.2. "Control" means an ownership interest of forty
percent (40%) or more.
1
<PAGE> 2
1.3. "Documentation" means all written, graphic and
electronic materials currently in Corbel's possession, that describe the
structure, function or use of the Quantech Software or any Enhancement,
including all specifications, system documentation and user manuals.
1.4. "Enhancements" means any modification, enhancement,
refinement, variation or new version of the Quantech Software, in both object
code and source code form, and all Documentation relating thereto, that is
created by Corbel and made generally commercially available to the then current
licensees of the Quantech Software as an upgrade (whether or not a maintenance
fee is charged to such licensee for the upgrade), during the period commencing
on the date hereof and ending two years thereafter. Enhancement shall not
include any new version of, or a replacement to, the Quantech Software that is
available only as a newly licensed product. Solely for the purposes of the
representations and warranties contained in Section 3 hereof, Enhancement shall
not include any Enhancement created by any successor to or assignee of Corbel
or the Quantech Software, if but only if, such successor or assignee is not an
Affiliate of BSI.
1.5. "Knowledge" means actual knowledge after reasonable
investigation.
1.6. "Quantech Software" means the most current, premium
version, as of the date of this Agreement, of the computer software program
described in Schedule A, attached to the Quantech License and incorporated
herein, and commonly referred to by Licensor as "Quantech", in both object code
and source code form, and all Documentation relating thereto.
2. GUARANTEE. For value received and to induce FIIS to enter into the
Quantech License, BSI hereby unconditionally guarantees the performance of all
of the obligations of Corbel, its successors and assigns, under the Quantech
License. Upon any default under the Quantech License, FIIS may at its option
proceed directly and at once, without further notice, against BSI hereunder,
without proceeding against Corbel or its successors or assigns, or any other
person for the obligations secured by this guarantee. BSI hereby waives and
relinquishes to the fullest extent now or hereafter not prohibited by
applicable law (a) all suretyship defenses and defenses in the nature thereof,
(b) any right or claim of right to cause a marshalling of the assets of Corbel,
(c) all rights and remedies, including any rights of subrogation or
contribution now or hereafter accorded to indemnitors, guarantors, sureties or
accomodation parties, and (d) notice of acceptance hereof, presentment, and
demand for payment.
The above notwithstanding, FIIS agrees to cooperate in good faith with
BSI and to provide reasonable assistance to BSI (at BSI's expense) should BSI
decide to enforce the obligation of any successor of Corbel to provide FIIS
Enhancements under the Quantech License, by bringing suit against such
successor. Without limitation, FIIS agrees to join in such suit for the
purpose of assisting BSI in enforcing FIIS's rights thereunder.
-2-
<PAGE> 3
3. REPRESENTATIONS AND WARRANTIES OF BSI. BSI hereby represents and
warrants to FIIS, for itself and where applicable for Corbel, that, except as
disclosed in the attached Corbel Disclosure Statement:
3.1. Organization. Corbel and BSI are corporations, duly
organized, validly existing, and in good standing under the laws of Florida and
Delaware, respectively. Corbel and BSI are qualified to do business as a
foreign corporation in every jurisdiction in which each is required to be so
qualified, except for those jurisdictions where the failure to be so qualified
will not have a material adverse effect on Corbel or BSI.
3.2. Authorization of Transaction. Corbel has the corporate
power and authority to execute and deliver the Quantech License and to perform
its obligations thereunder. BSI has the corporate power and authority to
execute and deliver this Agreement. No approval by the stockholders of Corbel
or BSI of the Quantech License or this Agreement and the transactions
contemplated thereby and hereby is required by the charter or by-laws of Corbel
or BSI or by applicable corporate law. All corporate and other actions or
proceedings to be taken by or on the part of Corbel and BSI to authorize and
permit the execution and delivery by Corbel of the Quantech License and to
permit the execution and delivery by BSI of this Agreement, the instruments
required to be executed and delivered by Corbel and BSI pursuant thereto and
hereto, the performance by Corbel and BSI of their obligations thereunder and
hereunder, and the consummation by Corbel and BSI of the transactions
contemplated therein and herein, have been duly and properly taken. The
Quantech License has been duly executed and delivered by Corbel and constitutes
its legal, valid and binding obligation, enforceable in accordance with its
terms and conditions. This Agreement has been duly executed and delivered by
BSI and constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms and conditions.
3.3. Noncontravention. Neither the execution and the
delivery of the Quantech License and the consummation of the transactions
contemplated thereby, nor the execution and the delivery of this Agreement and
the consummation of the transactions contemplated hereby will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which Corbel or BSI is subject or any provision of the charter or
by-laws of Corbel or BSI or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any material agreement, contract, lease, license, instrument, or other
arrangement to which Corbel or BSI is a party or by which it is bound or to
which any of its assets is subject (or result in the imposition of any Lien
upon any of its assets). Neither Corbel nor BSI need give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the parties to consummate the
transactions contemplated by the Quantech License and this Agreement.
-3-
<PAGE> 4
3.4. Brokers' Fees. Neither Corbel nor BSI has any
liability or obligation to pay any fees or commissions to any broker, finder,
agent or financial advisor with respect to the transactions contemplated by the
Quantech License or this Agreement for which FIIS could become liable or
obligated.
3.5 Title to Quantech Software. Corbel has good and
marketable title to the Quantech Software and the Enhancements, including all
rights to the Intellectual Property embodied therein, free and clear of all
Liens and encumbrances and free from all claims and demands of third parties.
Corbel has all the necessary right, title and interest in the Quantech Software
and the Enhancements to grant the licenses contemplated in the Quantech
License, including all necessary rights to any portion of the Quantech Software
or any Enhancement created by an independent contractor or other third party.
Corbel has taken all necessary action to maintain and protect the Quantech
Software and any Enhancements.
3.6. Intellectual Property.
3.6.1. The use of the Quantech Software and any
Enhancements by FIIS will not violate the Intellectual Property rights of any
third party. The Quantech Software and any Enhancements are free and clear of
any claim of third party infringement of any Intellectual Property right, and
there are no actions proceeding, pending, or to the best Knowledge of BSI,
threatened which claim that the Quantech Software or any Enhancements, or any
part thereof, infringes upon or is infringed by any Intellectual Property right
of any third party.
3.6.2. Corbel either developed the Quantech Software
and any Enhancements internally or acquired the Quantech Software or
Enhancements by (a) acquisition of the former developer of such software or (b)
valid assignments. From and after the date upon which Corbel acquired the
Quantech Software and any Enhancements, Corbel has developed all proprietary
modifications, enhancements, new versions and derivative works relating to such
Quantech Software and any Enhancements (i) through the internal efforts of
employees of Corbel or (ii) through the use of independent contractors or other
third parties, all of whom have assigned all rights in such modifications,
enhancements, new versions and derivative works to Corbel.
3.7. Subsidiaries. BSI holds of record and owns beneficially
all of the outstanding shares of Corbel, free and clear of any restrictions on
transfer, taxes, Liens, options, warrants, purchase rights, contracts,
commitments, equities, claims, and demands. The minute books (containing the
records of meetings of stockholders, the board of directors, and any committees
of the board of directors), the stock certificate books, and the stock record
books of each of Corbel and BSI are correct and complete in all material
respects. Neither Corbel nor BSI is in default under or in violation of any
provision of its charter or bylaws.
-4-
<PAGE> 5
3.8. Powers of Attorney. There are no outstanding powers of
attorney executed on behalf of either Corbel or BSI in respect of the Quantech
Software.
3.9. Security Measures, etc. The Quantech Software and any
Enhancement does not contain any mechanism that would enable Corbel or any
other party to disable the Quantech Software or any Enhancment or make it
inaccessible to a user. Corbel and BSI agree to use their best efforts to
ensure that the Quantech Software and any Enhancement does not contain any
computer virus or worm.
3.10. Disclaimer. EXCEPT AS OTHERWISE PROVIDED HEREIN, BSI
EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
3.11. Disclosure. The representations and warranties
contained in this Section 3 (including the Corbel Disclosure Statement) do not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements and information contained in
this Section 3 not misleading.
4. BSI COVENANTS. The parties agree as follows:
4.1. Sales Tax. BSI agrees to pay fifty percent (50%) of any
sales tax applicable to the Quantech License or this Agreement.
4.2. Other Sales by BSI or Corbel. BSI agrees that it will
not sell the stock of Corbel to a competitor of FIIS, and will not permit
Corbel to sell substantially all of its assets relating to the Quantech
Software to a competitor of FIIS, during the four (4) month period commencing
on the earlier of (a) the date of the Closing under the Purchase Agreement or
(b) May 31, 1996.
4.3. Bidding Rights. BSI agrees that, if after the date
hereof, a determination is made to market that portion of Corbel's business
which relates to the Quantech Software, either standing alone or as part of
Corbel's business as a whole, BSI will provide FIIS an opportunity, on the same
terms as all other third parties, to bid for that business.
5. CONFIDENTIALITY. Each of the parties will treat and hold as such
all of the Confidential Information of the other parties, refrain from using
any of the Confidential Information except in connection with this Agreement,
and deliver promptly to the party to which it relates or destroy, at the
request and option of such party, all tangible embodiments (and all copies) of
the Confidential Information which are in its possession. In the event that
any of the parties is requested or required (by oral question or request for
information or documents in any legal proceeding, interrogatory, subpoena,
civil investigative demand, or
-5-
<PAGE> 6
similar process) to disclose any Confidential Information of any other party,
such party will notify the other party promptly of the request or requirement
so that the other party may seek an appropriate protective order or waive
compliance with the provisions of this Section 5. If, in the absence of a
protective order or the receipt of a waiver hereunder, any of the parties is,
on the advice of counsel, compelled to disclose Confidential Information of any
other party, to any tribunal or else stand liable for contempt, such party may
disclose the Confidential Information to the tribunal; provided, however, that
the disclosing party shall use its best efforts to obtain, at the request of
the other party, an order or other assurance that confidential treatment will
be accorded to such portion of the Confidential Information required to be
disclosed as the other party shall designate.
6. INDEMNIFICATION.
6.1. Survival of Representations and Warranties. All of the
representations and warranties of BSI contained herein or in any document,
certificate or other instrument required to be delivered hereunder shall
survive the date hereof and continue in full force and effect, subject to
Section 6.4.2 hereof and any applicable statutes of limitations. All covenants
and indemnities of BSI in this Agreement or in any document or certificate
delivered hereunder shall, unless otherwise specifically provided therein,
remain in full force and effect forever. Except for the rights of FIIS under
Section 2 hereof, the indemnification rights set forth in this Section 6 shall
be the exclusive remedy of any of the parties with respect to any matters
within the scope of this Section 6.
6.2. Indemnity by BSI. BSI hereby agrees to indemnify,
defend and hold harmless FIIS and its directors, officers and Affiliates
against and in respect of all Liabilities, obligations, judgments, Liens,
injunctions, charges, orders, decrees, rulings, damages, dues, assessments,
Taxes, losses, fines, penalties, expenses, fees, costs or amounts paid in
settlement (including reasonable attorneys' and expert witness fees and
disbursements in connection with investigating, defending or settling any
action or threatened action), arising out of any claim, damages, complaint,
demand, cause of action, audit, investigation, hearing, action, suit or other
proceeding asserted or initiated or otherwise existing in respect of any
matter (a "Loss" or collectively, the "Losses") that results from the breach of
any representation, warranty or covenant made by BSI herein, or resulting from
any misrepresentation or breach of warranty or from any misrepresentation in or
omission from any schedule or certificate required to be furnished by BSI
hereunder.
6.3. Matters Involving Third Parties.
6.3.1. If any third party shall notify FIIS (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against BSI (the "Indemnifying
Party") under this Section 6, then the Indemnified Party shall promptly notify
the Indemnifying Party thereof in writing; provided, however, that no delay on
the part of the Indemnified Party in notifying the Indemnifying Party shall
relieve
-6-
<PAGE> 7
the Indemnifying Party from any obligation hereunder unless (and then solely to
the extent) the Indemnifying Party thereby is prejudiced.
6.3.2. The Indemnifying Party will have the right to
defend the Indemnified Party against the Third Party Claim with counsel of its
choice reasonably satisfactory to the Indemnified Party so long as (A) the
Indemnifying Party notifies the Indemnified Party in writing within 15 days
after the Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Losses within the scope of Section 6.2 the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (B) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder,
(C) the Third Party Claim involves only money damages and does not involve an
injunction or other equitable relief which, in the reasonable opinion of the
Indemnified Party, materially affects its business and (D) the Indemnifying
Party conducts the defense of the Third Party Claim actively and diligently.
6.3.3. So long as the Indemnifying Party is
conducting the defense of the Third Party Claim in accordance with Section
6.3.2 above, (A) the Indemnified Party may retain separate co-counsel at its
sole cost and expense and participate in the defense of the Third Party Claim,
(B) the Indemnified Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnifying Party (which consent shall not
unreasonably be withheld), and (C) the Indemnifying Party will not consent to
the entry of any judgment or enter into any settlement with respect to the
Third Party Claim unless written agreement is obtained releasing the
Indemnified Party from all liability thereunder.
6.3.4. In the event any of the conditions in Section
6.3.2 above is or becomes unsatisfied, however, (A) the Indemnified Party may
defend against, and consent to the entry of any judgment or enter into any
settlement with respect to, the Third Party Claim in any manner it may deem
appropriate (provided that the Indemnified Party shall consult with and obtain
the consent (which shall not be unreasonably withheld) of the Indemnifying
Party in connection therewith), (B) the Indemnifying Party will reimburse the
Indemnified Party promptly and periodically for the costs of defending against
the Third Party Claim (including reasonable attorneys' fees and expenses), and
(C) the Indemnifying Party will remain responsible for any Losses the
Indemnified Party may suffer resulting from, arising out of, relating to, in
the nature of, or caused by the Third Party Claim to the fullest extent
provided in this Section 6. In the event the Indemnified Party assumes
control of the defense of any Third Party claim as herein provided, the
Indemnifying Party may nevertheless retain separate counsel at its sole cost
and expense to participate in the defense thereof and to consult with counsel
for the Indemnified Party with respect to conduct of the defense and to
considerations relating to entry of judgment or settlement.
-7-
<PAGE> 8
6.4. Limitations on Indemnification.
6.4.1. Monetary Limits. Except with respect to (i)
Losses arising out of representations or warranties contained in Section 3.5
or 3.6 or any Schedule referred to in such Section and (ii) Losses based upon
fraud or which arise out of or are attributable to acts or omissions that
constitute willful misconduct or malfeasance, gross negligence or criminal
conduct, BSI, as the Indemnifying Party shall have no obligations to indemnify
FIIS in respect of any Loss of a type identified in Section 6.2 incurred by
FIIS unless the aggregate cumulative total of all such Losses exceeds $250,000,
whereupon FIIS shall be entitled to indemnification for each additional amount
of such Losses described above; provided, that in no event shall the aggregate
indemnity obligation of BSI exceed $5,000,000. With respect to claims referred
to in clauses (i) and (ii) of this Section 6.4.1, the $250,000 cumulative
deductible shall not apply.
6.4.2. Time Limitation. Except for claims asserted
by FIIS for Losses referred to in clause (i) of Section 6.4.1, no claim may be
made or suit instituted under any provision of this Section 6 following the
second anniversary of the date hereof.
7. MISCELLANEOUS.
7.1. Press Releases and Public Announcements. Neither FIIS
nor BSI or Corbel shall issue any press release or make any public announcement
relating to the subject matter of the Quantech License or this Agreement
without the prior written approval of the other party; provided, however, that
any party may make any public disclosure it believes in good faith, based on
the opinion of its counsel, is required by applicable law or any listing or
trading agreement concerning its publicly-traded securities (in which case the
disclosing party will use its best efforts to advise the other party prior to
making the disclosure).
7.2. No Third Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the parties and their
respective successors and permitted assigns.
7.3. Entire Agreement. This Agreement, the Purchase
Agreement and the Quantech License (including the documents referred to herein
and therein) constitute the entire agreement between the parties and supersedes
any prior understandings, agreements, or representations by or between the
parties, written or oral, to the extent they related in any way to the subject
matter hereof.
7.4. Succession and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties named herein and their
respective successors and permitted assigns. BSI shall not assign this
Agreement without the prior written consent of FIIS. FIIS may assign this
Agreement to the extent that FIIS may assign its rights under Section 10.3 of
the Quantech License.
-8-
<PAGE> 9
7.5. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
7.6. Headings. The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.7. Notices. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) upon
confirmation of facsimile, (ii) when sent by overnight delivery and (iii) when
mailed by registered or certified mail return receipt requested and postage
prepaid at the following address:
If to BSI:
Broadway & Seymour, Inc.
128 South Tryon Street
Charlotte, NC 28202
Attn: President
Telecopy: (704) 344-3542
Copy to:
Broadway & Seymour, Inc.
128 South Tryon Street
Charlotte, NC 28202
Attn: General Counsel
Telecopy: (704) 344-3542
If to FIIS:
82 Devonshire Street
Boston, MA 02109
Telefax: (617) 476-0932
Attn: President
-9-
<PAGE> 10
Copy to:
82 Devonshire Street
Boston, MA 02109
Telefax: (617) 476-0932
Attn: General Counsel
Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended recipient.
Any party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
party notice in the manner herein set forth.
7.8. Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of The Commonwealth of
Massachusetts without giving effect to any choice or conflict of law provision
or rule (whether of The Commonwealth of Massachusetts or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than The Commonwealth of Massachusetts.
7.9. Amendments and Waivers. No amendment of any provision
of this Agreement shall be valid unless the same shall be in writing and signed
by the parties. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent occurrence.
7.10. Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
7.11. Expenses. Each of BSI and FIIS will bear its own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.
7.12. Relationship of Parties. This Agreement is not
intended to and does not create a partnership or joint venture relationship
among the parties.
-10-
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
the year and date first above written.
BROADWAY & SEYMOUR, INC. FIDELITY INVESTMENTS INSTITUTIONAL
SERVICES, INC.
By: /s/ Alan C. Stanford By: /s/ Paul J. Hondros
--------------------------- ---------------------------
Title: President Title: President
-11-
<PAGE> 12
CORBEL DISCLOSURE STATEMENT
3.5 Title to Quantech Software
(1) All assets owned by Corbel are subject to a lien in favor of
NationsBank securing the guarantee executed by Corbel of all
obligations of BSI under the Credit Facility. In addition,
certain software and support materials owned by Corbel is
pledged to secure a subordinated promissory note owing to Mr.
Dubois.
(2) Solely with respect to the representation contained in the
third sentence of Section 3.5, BSI makes the following
disclosures: (A) Corbel has not registered any Copyrights on
the Quantech Software or any Enhancements, (B) in addition,
Corbel has not applied for or obtained any Patents with
respect to the Quantech Software or any Enhancements (C)
Corbel has not required all of its employees to execute
confidentiality agreements or assignment of invention rights
agreements and has not required all independent contractors to
execute agreements subjecting them to an obligation of
confidentiality, or an assignment of copyrights, invention
rights or other intellectual property rights.
3.6 Intellectual Property
(1) Corbel has received notice that the name "Quantec" has been
registered with the U.S. Patent and Trademark Office (PTO) by
a British Company. In response to an application by Corbel to
register the trademark "Quantech," the PTO, in March 1995,
notified Corbel of its intention to deny registration of the
mark.
3.7 Subsidiaries
(1) The stock of Corbel is pledged to NationsBank to secure BSI's
obligations under the Credit Facility.
-12-
<PAGE> 1
EXHIBIT 2.5A
AMENDMENT NO. 1
TO
GUARANTEE AND INDEMNITY AGREEMENT
This Amendment No. 1 to Guarantee and Indemnity Agreement ("Agreement")
is entered into this 15th day of May, 1996 by and between BROADWAY & SEYMOUR,
INC., a Delaware corporation with its principal place of business in Charlotte,
North Carolina, ("BSI") and FIDELITY INVESTMENTS INSTITUTIONAL SERVICES, INC.
("FIIS"), a Massachusetts corporation with its principal place of business in
Boston, Massachusetts. Certain capitalized terms used herein but not defined
herein shall have the meanings ascribed to such terms in the Guarantee and
Indemnity Agreement dated April 10, 1996 ("Guaranty"), by and between BSI and
FIIS.
BACKGROUND
WHEREAS, FIIS, BSI and certain wholly-owned subsidiaries of BSI (the
"Sellers"), have entered into the Purchase Agreement, wherein the Sellers have
agreed to sell the AMSG Business to FIIS;
WHEREAS, FIIS and CORBEL & COMPANY, a Florida corporation with its
principal place of business in Jacksonville, Florida (on behalf of itself and
its wholly-owned subsidiary TOTAL ADMINISTRATIVE BENEFIT SYSTEMS, INC. (d/b/a
Pentab) (referred to hereinafter collectively, for all purposes, as "Corbel")
have entered into that certain Quantech License and Services Agreement dated
April 10, 1996 (the "Quantech License");
WHEREAS, as a condition to the execution of the Quantech License, FIIS
and BSI entered into the Guaranty, pursuant to which, among other things, BSI
unconditionally guaranteed the obligations of Corbel under the Quantech License
and agreed to indemnify FIIS with respect to certain matters thereunder and
under the Guaranty;
WHEREAS, the parties now desire to amend the Guaranty as set forth
below.
NOW, THEREFORE, for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto agree for themselves, their
successors and assigns as follows:
1. Section 7 of the Guaranty is hereby amended to add a new
Section 7.13, as follows:
-1-
<PAGE> 2
"7.13. Transfer or License of Quantech Software and
Enhancements. Notwithstanding any other provision of this Agreement,
including the limitation of remedies set forth in Section 6, BSI
covenants and agrees, in perpetuity, that (a) in the event of any sale,
assignment or other transfer of substantially all the assets of Corbel,
including the Quantech Software and Enhancements, to any party (other
than licenses to end-users granted in the ordinary course), BSI shall
cause Corbel to sell, assign, or otherwise transfer to such party the
entire Quantech License and all of Corbel's rights and obligations
thereunder and shall cause such party to expressly assume in writing
all the obligations under the Quantech License or to agree in a written
instrument of which FIIS is expressly made a third party beneficiary
that such party will comply with all of the obligations of Corbel
thereunder, and (b) in the event of any other sale, assignment,
transfer or license of any rights in the Quantech Software and
Enhancements by Corbel to any party (other than licenses to end-users
granted in the ordinary course), BSI shall cause Corbel to require such
party to comply with all of Corbel's obligations under Section 7.1.2 of
the Quantech License.
2. The remainder of the Guaranty shall remain unchanged and in
full force and effect.
[This space intentionally left blank]
-2-
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
the year and date first above written.
BROADWAY & SEYMOUR, INC. FIDELITY INVESTMENTS INSTITUTIONAL
SERVICES, INC.
By: /s/ Alan C. Stanford By: /s/ Paul J. Hondros
--------------------------- ---------------------------
Title: President Title: President
-3-
<PAGE> 1
EXHIBIT 2.6
TRANSITION SERVICES AND SUPPORT AGREEMENT
THIS TRANSITION SERVICES AND SUPPORT AGREEMENT (this "Agreement") is
entered into this day of May, 1996 by and between Broadway & Seymour, Inc., a
Delaware corporation with its principal place of business in Charlotte, North
Carolina ("BSI"), acting on behalf of itself and its subsidiaries, and Fidelity
Asset Management Services, LLC, a Delaware limited liability company with a
principal place of business in Massachusetts ("Buyer").
BACKGROUND STATEMENT
Contemporaneously herewith, pursuant to an Asset Purchase Agreement,
dated as of April 10, 1996, as amended (the "Asset Purchase Agreement"), Buyer
has purchased the Asset Management Services Group of BSI (the "Division")
through a purchase of substantially all of the assets and the assumption of
certain obligations of the Division. In connection with that transaction, the
parties agreed that BSI will provide certain transition services to Buyer for a
period of approximately one year from the Closing, and that BSI will also make
available to Buyer certain other assets, and provide certain other support
services to Buyer, all as set forth herein. Terms used but not defined herein
shall have the meaning given to them in the Asset Purchase Agreement.
AGREEMENT
In consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Transition Services. During the term of this Agreement, BSI shall
provide to Buyer, upon Buyer's request, consulting and advisory
services (the "Transition Services") relating to the business of the
Division and its transition to Buyer ownership. The Transition
Services may include consultation and advice with respect to customer
relationships, product development, marketing, strategic planning and
similar management issues relating to the business of the Division.
The Transition Services may also include contacting existing BSI
customers to encourage such customers to continue their relationship
with the Division after the acquisition thereof by Buyer.
Notwithstanding the foregoing, BSI shall not be required to perform
any Transition Services that (a) would cause it to breach any
agreement binding on it, (b) would require disclosure of confidential
or proprietary information of BSI, (c) or would be otherwise
unreasonably burdensome with respect to the continuing business of BSI.
<PAGE> 2
2. Fee for Transition Services. In exchange for the Transition Services,
Buyer shall pay to BSI a fee (the "Transition Fee") of One Million
Dollars ($1,000,000), payable in six monthly installments on the 15th
of each month, commencing May 15, 1996.
3. Additional Services. BSI shall provide to Buyer the additional
services (the "Support Services") described on Schedule 1 to this
Agreement, including both BSI-performed services, such as
administrative services relating to office operational support and
finance services relating to payroll, taxes, accounts payable, and the
provision of access to and use of tangible goods, such as telephone
equipment, computer PC Software and hardware, such services to be
provided in a manner generally consistent with the provision of such
services by BSI for its own use. In exchange for these Support
Services, Buyer agrees to the pay the fees related to such Support
Services specified on Schedule 1 in each case pro-rated on a per diem
basis where said resources are only utilized for a partial month, and
to reimburse BSI for any out-of-pocket costs related to such Support
Services, such as telephone charges incurred by BSI on behalf of
Buyer. The parties acknowledge that the fees set forth in Schedule 1
are based on good faith estimates of BSI's costs (or BSI's good faith
estimate of the percentage of cost incurred by BSI) in providing the
Support Services. The parties agree to review and, if appropriate,
adjust such fees at the end of each month.
Fees for Support Services hereunder shall be payable
monthly in arrears, commencing May 31, 1996, upon receipt of BSI's
invoice detailing such fees.
4. Term. This Agreement shall commence on the Closing Date and shall
continue for one year, subject to the earlier termination of the
Support Services as provided herein.
Buyer shall have the right to terminate separately priced,
discrete portions of the Support Services as of stated dates by
providing prior written notice to BSI: in the case of any
Administrative or MIS Services, not less than 30 days' prior notice of
the termination date shall be given; in the case of tangible property
use, not less than 60 days prior notice of the termination date shall
be given. Notwithstanding the foregoing, whenever the payment
obligation hereunder is based upon an underlying lease or purchase
obligation of BSI, such payment obligation shall terminate upon
Buyer's assumption of such underlying obligation. To the extent
reasonably practicable, Buyer shall endeavor to provide BSI with
advance projections of its anticipated termination to assist BSI in
planning its own cost containment efforts. Sections 8, 9 and 15
hereof shall survive and continue in full force and effect
notwithstanding the termination of this Agreement.
5. Warranties. BSI MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY NATURE
WHATSOEVER RELATING TO THE SUPPORT SERVICES AND EXPRESSLY DISCLAIMS ANY
EXPRESS OR IMPLIED WARRANTIES REGARDING THE NATURE OR QUALITY OF THE
SUPPORT SERVICES THAT IT IS PROVIDING AND THE TANGIBLE GOODS BEING
USED TO PROVIDE SUCH SUPPORT SERVICES.
-2-
<PAGE> 3
6. Indemnification.
(a) BSI shall indemnify, defend and hold harmless Buyer, its
affiliates, directors, officers, employees, agents and permitted
assigns from and against all liabilities, expenses, costs, damages
and/or losses of any kind, including, without limitation, reasonable
attorneys' fees, caused by or arising out of any breach of its
obligations under this Agreement.
(b) Buyer shall indemnify, defend and hold harmless BSI, its
affiliates, directors, officers, employees, agents and permitted
assigns from and against all liabilities, expenses, costs, damages
and/or losses of any kind, including, without limitation, reasonable
attorneys' fees, caused by or arising out of (i) any breach of its
obligations under this Agreement or (ii) the acts or omissions of
Buyer's agents and employees with respect to their use of the premises
or tangible property, including without limitation any claims against
BSI by the owners of third-party software relating to the use by Buyer
thereof.
(c) Notwithstanding anything in this Agreement to the contrary,
neither party shall have any liability for any special, indirect,
incidental or consequential damages of the other party arising under
this Agreement or arising out of the performance by either party of
its obligations under this Agreement.
7. Renewal. By the mutual written consent of the parties hereto, this
Agreement may be extended through December 31, 1997.
8. Information. For a period of five years subsequent to the date
hereof, each party hereto covenants and agrees to provide the other
party with all information regarding itself and transactions under
this Agreement as are required by such party to comply with all
applicable federal, state, county and local laws, ordinances,
regulations and codes, including, but not limited to, securities laws
and regulations.
9. Confidential Information. The parties hereto covenant and agree to
hold in trust and maintain confidential, except as otherwise required
be law, all Confidential Information relating to the other party or
any of their subsidiaries. "Confidential Information" shall mean all
information disclosed by either party to the other in connection with
this Agreement, whether orally, visually, in writing or in any other
tangible form, and includes, but is not limited to, technical,
economic and business data, know-how, flow sheets, drawings, business
plans, computer information, and the like. Without prejudice to the
rights and remedies of any party to this Agreement, a party disclosing
any Confidential Information shall be entitled to equitable relief by
way of an injunction if any other party hereto breaches or threatens
to breach any provision of this Section 9. Notwithstanding the
foregoing, BSI and its subsidiaries may utilize in
-3-
<PAGE> 4
their continuing business operations any Confidential Information
relating to their business which was in their possession prior to the
date hereof.
10. Notices. All notices, including notices of address changes, required
to be sent hereunder shall be in writing and shall be deemed to have
been given when received by certified mail, return receipt requested,
or sent by telefax to the party at the address set forth with its
signature below.
11. Assignment. Any party hereto may assign all or any part of its rights
and duties hereunder to any of its Affiliates (as defined below), but
such party shall remain fully responsible for the compliance by its
Affiliate with all of the terms, conditions, limitations and
restrictions contained herein. As used in this Agreement, the term
"Affiliate" of any party means any entity that, directly or
indirectly, controls, is controlled by, or is under common control
with, such party. Except as otherwise provided in this Agreement,
neither party may assign or transfer any of its rights or duties under
this Agreement to any person or entity, without the prior written
consent of the other party.
12. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of North Carolina.
13. Suspension. The obligations of any party to perform any acts
hereunder may be suspended if such performance is prevented by fires,
strikes, embargoes, riot, invasion, governmental interference,
inability to secure goods or materials, or other similar circumstances
outside the control of the parties.
14. Interpretation. In the event that any provision of this Agreement is
held to be invalid or unenforceable, the remaining provisions of this
Agreement will remain in full force and effect. The waiver by any
party of any default or breach of this Agreement shall not constitute
a waiver of any other subsequent default or breach.
15. Rights Upon Orderly Termination. Upon termination or expiration of
this Agreement, any of the Transition Services or any of the Support
Services each party shall, upon request, forthwith return to the other
party all reports, paper, materials and other information required to
be provided to the other party by this Agreement and shall assist the
other party in any other actions reasonably required for the orderly
termination of this Agreement, any of the Transition Services or any
of the Support Services.
16. Amendment. This Agreement may only be amended by a written agreement
executed by all of the parties hereto.
-4-
<PAGE> 5
17. Entire Agreement. This Agreement, including any schedules hereto,
constitutes the entire agreement between the parties, and supersedes
all prior agreements, representations, negotiations, statements or
proposals related to the subject matter hereof.
18. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and all of
which, when taken together, shall constitute one agreement.
19. Section Headings. The section and subsection headings used herein are
for reference and convenience only and shall not enter into the
interpretation hereof.
-5-
<PAGE> 6
IN WITNESS WHEREOF, the parties have caused this Agreement to be
signed by their duly authorized representatives as of the date and year first
above written.
BROADWAY & SEYMOUR, INC. FIDELITY ASSET
MANAGEMENT SERVICES, LLC
By: /s/ Alan C. Stanford By: Fidelity Investment
---------------------------- Institutional Services
Title: President Company, Inc.
------------------------- its managing member
---------------------------
Title: Paul J. Hondros
------------------------
Notice: Notice:
Broadway & Seymour, Inc. 260 Franklin Street, 11th Floor
128 South Tryon St., Suite 1000 Boston, Massachusetts 02110
Charlotte, North Carolina 28202 Attention: Joseph M. Collins
Attention: General Counsel Fax: (617) 476-6699
Fax: (704) 344-3542
<PAGE> 1
EXHIBIT 2.7
AGREEMENT AND MUTUAL RELEASE
THIS AGREEMENT AND MUTUAL RELEASE (this "Agreement") is made and
entered into as of the ________ day of April, 1996, by and between BROADWAY &
SEYMOUR, INC. ("BSI" or the "Company"), a Delaware corporation with its
principal office in Charlotte, North Carolina, BANCCORP SYSTEMS, INC.
("BancCorp"), a North Carolina corporation and a wholly owned subsidiary of BSI
with its principal office in Amarillo, Texas, and PHILLIP E. SORRELL ("Phil
Sorrell") and MARTHA A. SORRELL ("Martha Sorrell" and together with Phil
Sorrell, the "Former Shareholders"), citizens and residents of the State of
Texas.
BACKGROUND STATEMENT
WHEREAS, in connection with BSI's acquisition of BancCorp pursuant to
an Agreement and Plan of Merger dated as of January 27, 1995 (the "Merger
Agreement"), BSI agreed to pay certain Shareholder Profits to the Former
Shareholders if BancCorp achieved certain financial targets, all as more
specifically set forth in the Merger Agreement. Capitalized terms used herein
and not defined shall have the meanings ascribed to such terms in the Merger
Agreement.
WHEREAS, in connection with the transactions contemplated by the
Merger Agreement, BancCorp and Phil Sorrell entered into an Employment and
Non-Competition Agreement dated January 27, 1995 (the "Employment Agreement")
pursuant to which Phil Sorrell agreed to provide certain services to BancCorp
in exchange for BancCorp's payment of certain compensation, all as more
specifically set forth in the Employment Agreement. In addition, since January
27, 1995, Martha Sorrell has been employed by BancCorp on an at-will basis.
WHEREAS, in connection with the transactions contemplated by the
Merger Agreement, BSI issued to the Former Shareholders promissory notes in the
aggregate principal amount of $825,000 (the "BSI Notes") on which the principal
is payable on January 26, 1997 and interest is payable quarterly at the rate of
8.5% per annum.
WHEREAS, on the Effective Date (as hereafter defined), BSI entered
into an Asset Purchase Agreement with Fidelity Investments Institutional
Services Company, Inc. ("FIIS") pursuant to which BSI has agreed to sell to
FIIS substantially all the assets of BSI's Asset Management Services Group
("AMSG"), including, without limitation, the Marketable Proprietary Software
and certain other assets of BancCorp (the "Asset Purchase Agreement").
WHEREAS, in the event that the Four-Year Period has not expired or
Shareholder Profits of $1,000,000 have not been paid to the Former
Shareholders, Section 11.7 of the Merger Agreement requires the prior written
consent of the Former Shareholders to the sale of the Marketable Proprietary
Software to a third party. In order to consummate the transactions
<PAGE> 2
contemplated by the Asset Purchase Agreement, BSI wishes to pay the amounts set
forth below and the parties wish to terminate the Merger Agreement, the
Employment Agreement and the BSI Notes and to cancel their respective duties
and obligations to each other thereunder and in connection with the Former
Shareholders' employment by BancCorp, and they enter into this Agreement and
Mutual Release for that purpose.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter made by BSI, BancCorp and the Former Shareholders, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
expressly acknowledged by the parties hereto, it is agreed that:
1. Specific Obligations of BSI. Upon the closing of the
transactions contemplated by the Asset Purchase Agreement (the "Effective
Date"), BSI shall pay, in cash, by wire transfer:
(i) to the Former Shareholders (a) an aggregate $1,000,000 plus
(b) an aggregate amount equal to the net present value of the BSI Notes on the
Effective Date, discounted at a 6% interest rate compounded annually from the
Effective Date to January 26, 1997; and
(ii) to Phil Sorrell, individually, (a) $158,000 plus (b) a total
of thirteen (13) days of accrued but unused vacation time calculated at Phil
Sorrell's current rate of pay of $100,000 per annum, which amount shall equal
$5,138.34.
Written wire instructions shall be given to BSI at least two business
days prior to the Effective Date. All payments made under this Agreement shall
be less any required state and federal withholding deductions.
2. Specific Obligations of the Former Shareholders. Each Former
Shareholder hereby resigns voluntarily his or her employment with BancCorp,
effective upon the Effective Date and shall, as a condition of and immediately
upon execution of this Agreement, execute a letter of resignation substantially
in the form as attached hereto as Exhibit A. Upon receipt of the amounts set
forth in Section 1 above, the former Shareholders shall deliver to BSI a
receipt for such payments and the BSI Notes marked "Cancelled."
3. Consent to the Sale of Marketable Proprietary Software.
Without limiting the generality of the releases set forth below, each of the
Former Shareholders hereby expressly consents to the sale of the Marketable
Proprietary Software to FIIS pursuant to the Asset Purchase Agreement and
waives any and all provisions of the Merger Agreement or any other agreement to
which it is a party that may be violated by such sale.
-2-
<PAGE> 3
4. Release by Former Shareholders and Agreement Not to Sue. In
exchange for the undertakings provided in this Agreement and for the payments
set forth in Section 1 above, each of the Former Shareholders, for himself and
his heirs, successors, assigns and agents, hereby releases, remises,
quitclaims, and forever discharges BSI and BancCorp, and their parent,
affiliated, subsidiary and related entities, benefit plans (except with respect
to any vested benefit) and divisions, and their respective officers, directors,
employees, agents, legal representatives, successors, heirs and assigns, from
any and all duties, obligations or other responsibilities BSI or BancCorp may
have under the Merger Agreement or the BSI Notes or the Employment Agreement
and from any and all actions, causes of action, suits, claims, counterclaims,
charges, complaints, demands, liabilities or obligations of any kind
whatsoever, in law or equity, that such Former Shareholder has or may have
which arise out of, relate to or are in any way connected with the Merger
Agreement or the BSI Notes or the Employment Agreement of such Former
Shareholder's work for, employment relationship with or termination of
employment with BancCorp, specifically including, but not limited to, all
claims arising under the Age Discrimination in Employment Act, 29 U.S.C.
Section 621, et seq. This Release shall not apply to any rights or duties
arising hereunder; and each of the Former Shareholders further waives any right
he may have to file any lawsuit, charge, claim, complaint or other proceeding
related to any of the foregoing before any federal, state or local
administrative agency, court or other forum against BSI or BancCorp and agrees
that he will not file any such action.
5. Release by BSI and BancCorp and Agreement Not to Sue. In
exchange for the undertakings provided in this Agreement, each of BSI and
BancCorp, for itself and its affiliated, subsidiary and related entities,
benefit plans, divisions, successors and assigns, and the employees, officers,
directors, legal representatives and agents thereof, both in their official and
individual capacities, hereby releases, remises, quitclaims and forever
discharges each of the Former Shareholders and his agents, legal
representatives, successors, heirs and assigns, from any and all duties,
obligations or other responsibilities such Former Shareholder may have under
the Merger Agreement or the BSI Notes or the Employment Agreement and from any
and all actions, causes of actions, suits, claims, counterclaims, charges,
complaints, demands, liabilities or obligations of any kind whatsoever, in law
or equity, arising at any time prior to and through the date of this Agreement
and that BSI or BancCorp has or may have which arise out of, relate to or are
in any way connected with the Merger Agreement or the BSI Notes or the
Employment Agreement or such Former Shareholder's work for, employment
relationship with or termination of employment with BancCorp. This Release
shall not apply to any rights or duties arising hereunder; and each of BSI and
BancCorp further waives any right it may have to file any lawsuit, charge,
claim complaint or other proceeding related to any of the foregoing before any
federal, state or local administrative agency, court or other forum against
either of the Former Shareholders, and agrees that it will not file any such
action.
6. Representations and Warranties by all Parties. Each of the
parties represents and warrants, as to himself or itself that (a) he or it has
the capacity, full power, and authority to enter into this Agreement, (b) the
individuals signing on behalf of the corporate parties are authorized to do so,
(c) he or it has not assigned, encumbered, or in any manner transferred all or
any portion of the claims covered by this Agreement, (d) there are no charges,
complaints,
-3-
<PAGE> 4
suits, arbitrations, or other claims or proceedings pending between the parties
in any court, before any agency, or in any forum, and (e) no other person,
party, or corporation has any right, title, or interest in any of the claims
covered by this Agreement.
7. Effectiveness. It is agreed and acknowledged by the parties
hereto that the transactions and agreements contemplated by this Agreement
(including, without limitation, the payment obligations, consents, waivers and
releases set forth in Sections 1, 2, 3 and 4) are expressly subject to the
consummation of the sale of the Marketable Proprietary Software to FIIS on the
Effective Date and this Agreement shall have no force or effect if such sale is
not consummated.
8. Return of Property. Promptly after the termination of each
Former Shareholder's employment as provided in Section 2 above, each Former
Shareholder shall return and deliver to BSI all property or documents of BSI or
BancCorp not directly relating to the business of AMSG, including without
limitation all credit cards, club memberships, master keys, etc.
9. Repayment of Monies Owed. Each Former Shareholder agrees that
all monies owed by such Former Shareholder to BSI or BancCorp, if any, of which
BSI or BancCorp is aware prior to the Effective Date may be deducted from BSI's
payments to such Former Shareholder under Section 1. Any amounts owed by such
Former Shareholder which are not so deducted will be paid promptly by such
Former Shareholder upon demand by BSI or BancCorp.
10. Conditional on Performance. Each Former Shareholder
understands and agrees that BSI's obligation to perform hereunder is
conditioned upon the Former Shareholder's agreements and covenants to BSI as
set forth herein. In the event such Former Shareholder breaches any such
agreement or covenant, or causes any such covenant or agreement to be breached,
BSI's obligations to perform any of its obligations under this Agreement shall
automatically terminate. The remainder of this Agreement will remain in full
force and effect.
11. Knowing and Voluntary Consent. Each Former Shareholder
represents that he or she knows and understands the contents of this Agreement,
that he or she intents to be legally bound by this Agreement and the release
contained herein and that, after having the opportunity to consult and be
represented by legal counsel, he or she is voluntarily entering into this
Agreement, including the release, of his or her own freewill and without
coercion.
12. Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof,
integrates all the terms and conditions mentioned or incidental to this
Agreement, and supersedes all prior negotiations or writings, and, in
particular, supersedes and replaces the Merger Agreement, the BSI Notes and the
Employment Agreement. No modification or waiver of any provisions of this
Agreement shall be valid unless in writing and signed by all parties hereto.
-4-
<PAGE> 5
13. Binding Effect. This Agreement shall be binding upon the
parties hereto, their heirs, successors and assigns.
14. Applicable Law. This Agreement shall be construed and
governed by the laws of the State of North Carolina. The parties consent to
jurisdiction and venue in North Carolina in any action brought to enforce the
terms of this Agreement.
15. Severability. If any provision contained in this Agreement
shall for any reason be held invalid, illegal, or unenforceable in any respect,
such invalidity, illegality, or enforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein.
16. Construction. This Agreement is not to be construed against
any party but shall be construed equally as to each party hereto.
17. Counterparts. This Agreement may be executed in counterparts,
each of which may be enforceable as an original, but all of which together
shall constitute but one agreement.
-5-
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date and year indicated above.
BROADWAY & SEYMOUR, INC.
ATTEST: By: /s/ Alan C. Stanford
------------------------
Name: Alan C. Stanford
Title: President
- ----------------------------
Assistant Secretary
BANCCORP SYSTEMS, INC.
ATTEST: By:/s/ Phillip E. Sorrell
------------------------
Name: Phillip E. Sorrell
Title: President
- ----------------------------
Secretary
/s/ Martha A. Sorrell
-----------------------
Martha A. Sorrell
/s/ Phillip E. Sorrell
-----------------------
Phillip E. Sorrell
-6-
<PAGE> 1
EXHIBIT 99.1
NASDAQ:BSIS
FOR IMMEDIATE RELEASE
- ---------------------
CONTACTS: PERRY CHLAN DAVID A. FINLEY
FIDELITY INVESTMENTS BROADWAY & SEYMOUR
(617) 563-6573 (704) 344-3010
FIDELITY INVESTMENTS TO ACQUIRE
BROADWAY & SEYMOUR'S AMSG UNIT
CHARLOTTE, N. C., APRIL 11, 1996 -- Fidelity Investments and Broadway &
Seymour, Inc., (NASDAQ:BSIS) today announced they have signed a Purchase
Agreement for Fidelity to acquire the assets of the Asset Management Services
Group of Broadway & Seymour.
The companies expect to complete the transaction by May 30, 1996, subject
to satisfaction of standard and customary closing conditions in the Purchase
Agreement. Financial terms were not disclosed.
Under the agreement, Fidelity Investments will acquire Broadway &
Seymour's trust accounting operations that comprise the Asset Management
Services Group. This group provides processing and professional services to
bank trust and investment institutions. Fidelity will acquire the large bank
trust processing product, AMtrust, used by 14 of the 50 largest banks,
representing over $400 billion in discretionary trust assets. Fidelity also
will acquire the AMpreferred, AssetManager and TrustProcessor products.
Fidelity also announced James R. Spencer III, 45, Senior Vice President,
Broadway & Seymour, will join Fidelity when the transaction is closed to manage
the newly-acquired unit.
-more-
<PAGE> 2
Fidelity Acquires BSI Unit - Page 2
Spencer will report to Paul J. Hondros, President, Fidelity Investments
Institutional Services Company. Fidelity also said it intends to offer
employment to the 160 people currently working in the Broadway & Seymour unit
and manage this new unit as a separate technology business.
In August 1995, Fidelity and Broadway & Seymour announced an alliance to
jointly integrate and market their trust processing, and investment
capabilities to bank trust institutions.
"We continue to believe this is a growth market where there is an
opportunity for innovation in technology. This acquisition accelerates
Fidelity's commitment and focus on offering comprehensive processing products
and services for the bank trust and investment management business. We can now
be more responsive to customer demands in the bank asset management and
brokerage business," said Paul Hondros. "Through management of the new unit
and by leveraging other Fidelity resources such as National Services Corp., we
will be well-positioned to commit and accelerate the financial and technical
support that will enable us to dramatically improve the technology solutions
available to banks."
With the acquisition announced today, Fidelity plans to offer the
combination of front-end workstations to support investment management and
relationship management with core trust accounting technology and further
automation of securities processing and brokerage services.
Broadway & Seymour's President and Chief Operating Officer, Alan Stanford,
said, "This transaction allows Broadway & Seymour to concentrate on its core
competencies of providing customer service and financial industry technology
solutions along with our existing
-more-
<PAGE> 3
Fidelity Acquires BSI Unit - Page 3
investment and professional services businesses. Our clients will continue to
be well served by Fidelity, and Broadway & Seymour will better focus on its
growth markets with the resources made possible from the agreement."
Broadway & Seymour is an innovative information technology company
providing integrated business solutions to the financial services industry and
selected markets worldwide. Headquartered in Charlotte, N.C., this
publicly-held company had revenues of $114 million in 1995.
Fidelity Investments, with total managed assets of $428.4 billion as of
February 29, 1996, is one of the country's leading providers of financial
services. Fidelity is the nation's largest mutual fund company and second
largest discount brokerage company, with more than 80 Investor Centers around
the U. S. Fidelity is also the nation's largest provider of 401(k) retirement
savings plans to corporations, and the third largest provider of retirement
plans to not-for-profit institutions.
# # #
