Exhibit 10.12
ASIAN ACQUISITION AGREEMENT
THIS ASIAN ACQUISITION AGREEMENT (this "Agreement") made this ____ day of
December, 1996 by and between BANK OF AMERICA NATIONAL TRUST & SAVINGS
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ASSOCIATION, a national banking association ("Bank"), and ▇▇ ▇▇▇▇▇▇▇▇ SERVICES,
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INC., a Delaware corporation ("BAMSI"):
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RECITALS
A. Bank. Bank is an existing national banking association duly organized
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and in good standing under the laws of the United States with its principal
executive offices located in San Francisco, California.
B. BAMSI. BAMSI is an existing corporation, formed under the laws of the
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State of Delaware, with its principal executive offices located in San
Francisco, California.
C. Corporate Approvals. Each of the parties to this Agreement has
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obtained all necessary corporate approvals for the execution and delivery of
this Agreement.
D. Arm's Length Relationship. The parties to this Agreement intend to
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conduct their relationships hereunder on an arm's length basis.
E. BAC/BAMSI Transactions. Bank and Bank of America NW, National
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Association ("BANW"), each a subsidiary of BankAmerica Corporation, a Delaware
corporation ("BAC"), currently own 100% of the outstanding common stock of
BAMSI. Bank and BANW have entered into certain agreements dated as of December
3, 1996 with BAMSI transferring Bank's domestic processing businesses and BANW's
merchant processing business to BAMSI effective as of such date. BAMSI is
currently considering an initial public offering of shares of its Class A common
stock, $.01 par value per share ("Class A Common Stock").
F. Related Agreements. BAMSI has entered or will enter into (1) a Non-
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Competition and Corporate Opportunities Allocation Agreement dated as of
December 3, 1996 between BAC and BAMSI (the "Corporate Opportunities
Agreement"), (2) a Marketing Agreement dated as of December 3, 1996 among BAMSI,
Bank and BANW (the "Marketing Agreement"), (3) Processing Services Agreements
dated as of December 3, 1996 between BAMSI and other subsidiary banking
institutions of BAC (the "Affiliate Bank Processing Agreements"), (4) an
Administrative Services Agreement dated as of December 3, 1996 between Bank and
BAMSI (the "Administrative Services Agreement"), (5) a Trademark License
Agreement dated as of December 3, 1996 between BAC and BAMSI (the "License
Agreement"), (6) a Registration Rights Agreement to be entered into among BAMSI,
Bank and BANW (the "Registration Rights Agreement"), (7) a Tax Allocation
Agreement dated as of December 3, 1996 between BAC and BAMSI (the "Tax
Agreement") and (8) a Sponsorship Processing Agreement dated as of December 3,
1996 between Bank and BAMSI (the "Sponsorship Agreement"). The Corporate
Opportunities Agreement, the
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Marketing Agreement, the Affiliate Bank Processing Agreements, the
Administrative Services Agreement, the Trademark Agreement, the Registration
Rights Agreement, the Tax Agreement and the Sponsorship Agreement are herein
collectively referred to as the "Related Agreements."
G. Asian Merchant Processing Businesses. Bank owns and operates merchant
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processing businesses in Thailand (the "Thailand Business") and the Philippines
(the "Philippines Business" and together with the Thailand Business, the "Asian
Businesses" and individually, each an "Asian Business"), Taiwan (the "Taiwan
Business"), India (the "Indian Business") and South Korea (the "Korean
Business"). In addition, Bank has established a program to operate a merchant
processing business in The Peoples Republic of China (the "PRC Business") and
has applied for a license or has explored opportunities to conduct a merchant
processing business in Indonesia (the "Indonesian Business") and Vietnam (the
"Vietnamese Business" and together with the Taiwan Business, the Indian
Business, the Korean Business and the Indonesian Business, the "Additional Asian
Businesses" and individually, each an "Additional Asian Business").
H. Acquisition of Asian Businesses. Pursuant to the terms and conditions
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set forth in this Agreement, (i) Bank desires to transfer each of the Asian
Businesses to BAMSI, and BAMSI desires to acquire each of the Asian Businesses,
by purchasing the Assets (as hereinafter defined) in exchange for shares of
Class B Common Stock, par value $.01 per share ("Class B Common Stock") of BAMSI
and the assumption by BAMSI of the Assumed Liabilities (as hereinafter defined)
as set forth herein, and (ii) Bank and BAMSI desire to work cooperatively to
enable BAMSI to acquire the Additional Asian Businesses in the future.
NOW, THEREFORE, in consideration of the premises, representations,
warranties, mutual covenants and agreements hereinafter set forth, and for good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Bank and BAMSI hereby covenant and agree as follows:
ARTICLE I
TRANSFER OF ASSETS
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Section 1.1 Transferred Assets. At each Closing (as hereinafter defined)
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for an Asian Business, Bank shall sell, assign, grant, convey, transfer and
deliver to BAMSI, and BAMSI shall acquire from Bank, all of Bank's right, title
and interest in and to all of the tangible and intangible assets primarily
related to and used primarily by such Asian Business, as they exist as of the
Closing (as hereinafter defined) for such Asian Business, together with all
accrued benefits and rights pertaining thereto (collectively, the "Assets"),
other than the Excluded Assets (as hereinafter defined), including, without
limitation:
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(a) Receivables. All accounts receivable, drafts in transit, notes
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receivable, prepayments by or on behalf of such Asian Business, advances by or
on behalf of such Asian Business and outstanding at the Closing;
(b) Claims. All claims, demands and causes of action in favor of Bank
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arising primarily out of such Asian Business;
(c) Inventories. All raw materials, work-in-process, finished goods,
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supplies and other inventories in each case intended for use or sale by such
Asian Business;
(d) Real Property. Those certain premises or parcels of land, in each case
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leased by Bank and used in the conduct of the Business as listed on Schedule
l.l(d) ("Real Property"), together with any and all buildings, plants and other
structures and improvements thereon, any and all rights and privileges
pertaining thereto, including, without limitation, ownership interests,
leasehold interests, easements, transferable permits, licenses, rights of way,
leases, and purchase and option agreements with respect to any such Real
Property and, any and all fixtures, machinery, equipment and other property
appurtenant thereto;
(e) Personal Property. Any and all machinery, furniture, tools, spare
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parts, automobiles and other vehicles, office and computer equipment and other
personal property in each case used exclusively in the operation of such Asian
Business;
(f) Contracts. Subject to Section 7.1, all contracts, agreements, leases
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and offers open for acceptance of any nature, whether written or oral,
exclusively relating to such Asian Business, including, without limitation, all
assignable merchant customer agreements for the provision of merchant processing
services by such Asian Business ("Merchant Agreements") and all other customer
contracts, leases of personal property and purchase orders;
(g) Merchant Accounts. All security interests in each demand deposit or
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current or similar account, either with Bank or another financial institution,
linked to a customer under a Merchant Agreement, in accordance with Section 5.3;
(h) Operating Permits. Subject to Section 7.1, all licenses, permits and
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authorizations, environmental or otherwise, in each case exclusively used to
operate such Asian Business;
(i) Computer Programs. All interests of such Asian Business in the
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software and computer programs and documentation used exclusively in conducting
such Asian Business, including flow charts, diagrams, descriptive texts and
programs, computer printouts, underlying tapes, computer data bases and similar
items;
(j) Books and Records. All books and records exclusively relating to such
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Asian Business, including, without limitation, all customer and supplier lists,
accounts and records, forms and office supplies, advertising and promotional
literature and price lists, all manuals and reports and other publications
relating exclusively to such Asian Business;
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(k) Cash balances for such Asian Business existing on the date of Closing;
(l) Any employee plan assets ("Plan Assets") maintained by Bank for the
benefit of the employees of any of the Asian Business (collectively, the
"Employee Benefit Plans"); and
(m) In the case of the Philippines Business, certificates evidencing all of
the outstanding shares of BA Card Services, Inc., a Philippines corporation ("BA
Card Services"), owned by Bank.
Without limiting the foregoing, the Assets shall consist of all assets
relating to such Asian Business that would be reflected on a consolidated
balance sheet prepared on the date of Closing in accordance with generally
accepted accounting principles consistent with the audited balance sheet of ▇▇
▇▇▇▇▇▇▇▇ Services (Asia) at December 31, 1995 and the unaudited balance sheet of
▇▇ ▇▇▇▇▇▇▇▇ Services (Asia) at September 30, 1996.
Section 1.2 Assets Held by Affiliates. Bank shall, prior to each Closing
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for an Asian Business, acquire from its Affiliates and sell, assign, convey or
transfer to BAMSI, without additional consideration from BAMSI, and BAMSI shall,
at each such Closing, acquire from Bank, subject to transfer at the Closing, all
of such Affiliates' right, title and interest, if any, in any of the Assets
related to such Asian Business. For purposes of this Agreement, "Affiliate"
means any person directly or indirectly controlling or controlled by or under
direct or indirect "common" control with the Bank (including without limitation,
their respective officers, directors and employees); provided, that in no event
shall BAMSI or the Business be treated as an Affiliate of Bank, nor shall any
person directly or indirectly controlled by BAMSI (including without limitation
for this purpose, its officers, directors and employees) as a result of such
person's relationship with BAMSI be treated as an Affiliate of Bank. For this
purpose, "control" means the power to direct the management and policies of a
person through the ownership of securities, by contract or otherwise and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
Section 1.3 Excluded Assets. Notwithstanding anything contained herein to
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the contrary, the Assets shall not include, and Bank will not, and will not
cause any Affiliate to, transfer to BAMSI and BAMSI will not accept any of the
following (collectively, the "Excluded Assets"):
(a) Books of original financial entry and internal accounting documents and
records relating to any Asian Business and any other books and records relating
to any Asian Business that Bank is required to retain pursuant to statute, rule
or regulation, but BAMSI in such event shall have the right to inspect and copy
for any proper purpose;
(b) Any assets of employee benefit plans, other than the Plan Assets;
(c) All rights to refunds of all federal, state, local, foreign and
provincial income, capital gains, gross receipts, profits, property, transfer,
sales, mercantile, value added, capital stock, franchise or other taxes,
including estimated taxes relating thereto and any interest
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and penalties imposed thereon (collectively, "Taxes") relating to the Assets or
the Asian Businesses to the extent such Taxes relate to a period commencing
prior to the Closing and were not paid by BAMSI;
(d) Any of the right, title and interest in the bank accounts of the Asian
Businesses, subject to Section 5.3;
(e) Policies of insurance, fidelity, surety or similar bonds and the
coverages afforded thereby;
(f) Any assets of Bank or any Affiliate thereof not primarily related to or
used primarily by an Asian Business as conducted prior to the Closing for such
Asian Business; and
(g) All rights, causes of action and claims to the extent arising out of
any of the Excluded Assets described in paragraphs (a) through (g) hereof or any
of the Retained Liabilities (as hereinafter defined), including, without
limitation, any rights to reimbursement for damages, fees or expenses.
Section 1.4 Terms Related to the Transfer of Assets. Title to and risk of
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loss or damage to the Assets for each Asian Business shall pass to BAMSI at the
Closing for such Asian Business. Bank's insurance coverage for such Asian
Business and the related Assets shall cease as of such Closing as to losses
arising from events occurring on or after the date thereof.
Section 1.5 Warranty.
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(a) Bank represents and warrants that at each Closing (i) the Assets
constitute all of the assets necessary for the conduct of the business of such
Asian Business as contemplated by the Registration Statement (No. 333-13985)
relating to the proposed offering of shares of Class A Common Stock of BAMSI and
(ii) Bank will have transferred to BAMSI good and marketable title to or a valid
leasehold interest in all personal property and other assets relating to such
Asian Business, free and clear of all liens, encumbrances and defects except
such as are described in such Registration Statement or such as do not
materially affect the value of such assets and do not materially interfere with
the use made and proposed to be made of such Assets by BAMSI.
(b) Bank agrees to assign to BAMSI such rights as Bank may have the right
to assign under any warranty made by any vendor, manufacturer or contractor with
respect to any of the Assets. Except as otherwise provided herein, all of the
Assets shall remain "as is" and "where is" on the date of this Agreement through
such Closing.
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ARTICLE II
ASSUMPTION OF LIABILITIES
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Section 2.1 Assumed Liabilities and Obligations. At each Closing for
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an Asian Business, Bank shall delegate to BAMSI, and BAMSI shall assume and
agree to thereafter pay, satisfy, perform and discharge, as if such Asian
Business had been operated by BAMSI from the commencement thereof and had never
been owned by Bank, all of the obligations and liabilities to the extent arising
out of or relating to such Asian Business or the related Assets, known or
unknown, accrued, absolute, contingent or otherwise, whether arising from
pending or threatened claims against Bank related to such Asian Business or the
related Assets, including, without limitation, environmental liabilities,
whether arising as a result of the transactions contemplated hereby, whether
existing at such Closing or arising at any time or from time to time after the
Closing, and whether based on circumstances, events or actions arising
theretofore or thereafter, and whether or not such obligations and liabilities
shall have been disclosed herein or reflected on the books and records of such
Asian Business (collectively, the "Assumed Liabilities"), other than the
Retained Liabilities (as hereinafter defined).
Section 2.2 Retained Liabilities and Obligations. The Assumed
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Liabilities shall not include, and Bank will not assign to BAMSI, and BAMSI will
not assume any of the following (collectively, the "Retained Liabilities"):
(a) Any liability to the employees of an Asian Business prior to or as
of the Closing for such Asian Business to provide benefits to such employees
under those employee benefit plans which provide medical, dental, disability or
life insurance coverage (collectively, "Employee Insurance Plans") for claims
arising from occurrences (as defined in the relevant plan) prior to the Closing
for such Asian Business;
(b) Any liability for vested benefits under the Employee Benefit Plans
which have accrued to any employee of an Asian Business as of the Closing for
such Asian Business, as if such employee was terminated as of such Closing;
(c) Liabilities for which an insurer has liability under a Bank
insurance policy, to the extent of actual coverage under such policy, and to the
extent arising out of occurrences (as defined in such policy) prior to Closing;
provided that, notwithstanding the foregoing, Bank shall not retain any
environmental liabilities of any Asian Business whether based on circumstances,
events or actions arising before or after the Closings or whether arising under
present or future laws or any actual or alleged contractual obligations of Bank
or BAMSI or any Asian Business;
(d) Liabilities solely for Taxes relating to the Assets or the Asian
Businesses to the extent such Taxes relate to any period prior to the respective
Closing dates;
(e) Liabilities exclusively arising out of or related to any of the
Excluded Assets; and
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(f) With respect to liabilities that are required to be reflected on a
balance sheet prepared in accordance with generally accepted accounting
principles, those liabilities that would not be reflected on a consolidated
balance sheet prepared on the date of Closing in accordance with generally
accepted accounting principles consistent with the audited balance sheet of ▇▇
▇▇▇▇▇▇▇▇ Services (Asia) at December 31, 1995 and the unaudited balance sheet of
▇▇ ▇▇▇▇▇▇▇▇ Services (Asia) at September 30, 1996.
ARTICLE III
PURCHASE PRICE
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Section 3.1 Purchase Price. With respect to each Asian Business, BAMSI
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will assume the Assumed Liabilities and will deliver shares of its Class B
Common Stock to Bank as consideration for Bank's selling, granting, assigning,
conveying, transferring and delivering to BAMSI all of its right, title and
interest in and to the Assets relating to such Asian Business as follows:
Thailand Business 150,000 shares (the "Thailand Consideration")
Philippines Business 550,000 shares (the "Philippines Consideration")
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
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Section 4.1 Representations and Warranties of Bank. Bank hereby
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represents and warrants to BAMSI that:
(a) Incorporation and Good Standing. Bank is a national banking
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association duly organized, validly existing and in good standing under the laws
of the United States of America, with requisite corporate power to own and
operate the Assets and to carry on the Asian Businesses as now being conducted.
(b) Authorization. The execution, delivery and performance by Bank of this
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Agreement are within the corporate power of Bank, has been duly authorized by
all necessary corporate action and does not contravene or constitute a default
under any provision of the articles of association or by-laws of Bank. To the
knowledge of Bank, except for the Fed Approval (as hereinafter defined) and the
Asian Approvals (as hereinafter defined), the execution, delivery and
performance by Bank of this Agreement requires no action by or in respect of, or
filing with, any governmental body, agency or official, and no consents or
approvals of any public body or authority. This Agreement constitutes a valid
and binding agreement of Bank, enforceable against Bank in accordance with its
terms.
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(c) Absence of Restrictions. To the knowledge of Bank, the execution and
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delivery of this Agreement by Bank and the performance by Bank of its
obligations hereunder does not and will not contravene, constitute a default
under, or give rise to or result in any right of termination, cancellation or
acceleration or in the creation of any lien under, any material agreement,
judgment, injunction, order, decree or other instrument to which Bank or BA Card
Services is a party.
(d) Litigation. To the knowledge of Bank, there is no action, proceeding
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or investigation pending or threatened against Bank or BA Card Services which
questions or challenges the validity of this Agreement or any action taken or to
be taken by Bank or BA Card Services pursuant to this Agreement or in connection
with the transactions contemplated hereby.
(e) Compliance With Laws. To the knowledge of Bank, neither Bank nor BA
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Card Services is in violation of any applicable federal, state, or local law,
regulation or order or any other requirement of any governmental, regulatory or
administration agency or authority or court or other tribunal relating
specifically to the Assets or the Asian Businesses, where such violation could
reasonably be expected to have a material adverse effect on such Assets, such
Asian Businesses or Bank's ability to transfer the Asian Businesses to BAMSI.
(f) Financial Statements. The audited financial statements of ▇▇ ▇▇▇▇▇▇▇▇
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Services (Asia) at and for the year ended December 31, 1995 and the unaudited
financial statements of ▇▇ ▇▇▇▇▇▇▇▇ Services (Asia) at and for the nine months
ended September 30, 1996 have been prepared in accordance with generally
accepted accounting principles on a consistent basis and fairly present the
financial position and results of operations of the Asian Businesses and the
Taiwan Business on a combined basis and reflect all assets and liabilities that
are part of such businesses.
Section 4.2 Representations and Warranties of BAMSI. BAMSI hereby
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represents and warrants to Bank that:
(a) Incorporation and Good Standing. BAMSI is a corporation duly
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incorporated, validly existing and in good standing under the laws of the State
of Delaware with requisite corporate power to own and operate its assets and
properties and to carry on its business as now being conducted and as proposed
to be conducted. BAMSI is duly qualified to do business and is in good standing
as a foreign corporation in the State of California.
(b) Authorization. The execution, delivery and performance of this
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Agreement by BAMSI is within BAMSI's corporate power and has been duly
authorized by all necessary corporate action and does not contravene or
constitute a default under any provision of BAMSI's certificate of incorporation
or by-laws. To the knowledge of BAMSI, except for the Fed Approval and the
Asian Approvals, BAMSI's execution, delivery and performance of this Agreement
requires no action by or in respect of, or filing with, any governmental body,
agency or official, and no consents or approvals of any public body or
authority. This
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Agreement constitutes a valid and binding agreement of BAMSI, enforceable
against BAMSI in accordance with its terms.
(c) Absence of Restrictions. To the knowledge of BAMSI, the execution and
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delivery of this Agreement and the performance by BAMSI of its obligations
hereunder does not and will not contravene, constitute a default under, or give
rise to or result in any right of termination, cancellation or acceleration or
in the creation of any lien under, any material agreement, judgment, injunction,
order, decree or other instrument to which BAMSI is a party.
(d) Litigation. To the knowledge of BAMSI, there is no action, proceeding
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or investigation pending or threatened against or involving BAMSI, which
questions or challenges the validity of this Agreement or any action taken or to
be taken by BAMSI pursuant to this Agreement or in connection with the
transactions contemplated hereby.
(e) Compliance With Laws. To the knowledge of BAMSI, BAMSI is not in
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violation of any applicable federal, state, or local law, regulation or order or
any other requirement of any governmental, regulatory or administration agency
or authority or court or other tribunal relating to it, where such violation
could reasonably be expected to have a material adverse effect on its ability to
carry out the transactions contemplated under this Agreement.
ARTICLE V
COVENANTS OF BANK
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Section 5.1 Pre-Closing Activities. From and after the date of this
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Agreement until the earlier of the Closing for each Asian Business or until this
Agreement shall terminate pursuant to Article XI, except as otherwise agreed in
writing, Bank will use reasonable commercial efforts (a) to conduct such Asian
Businesses in the ordinary course and in a manner consistent with past
practices, except as may otherwise be permitted hereby, or (b) as necessary or
appropriate to consummate the transactions contemplated hereby.
Section 5.2 Approvals and Consents.
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(a) Bank shall use reasonable commercial efforts to obtain any governmental
or regulatory approvals or consents, including the Fed Approvals and the Asian
Approvals, and make or cause to be made (or assist BAMSI in making) any
declarations, filings and registrations with governmental or regulatory
authorities, which are necessary for Bank to consummate the sale of each of the
Asian Businesses; provided, however, that Bank shall not be obligated to pay any
consideration therefor (except for filing fees and other similar charges).
(b) Bank shall use reasonable commercial efforts to obtain any consent,
substitution, approval or amendment required to novate or assign all agreements,
leases,
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licenses and other rights of any nature whatsoever relating to the Asian
Businesses; provided, however, that Bank shall not be obligated to pay any
consideration therefor (except for filing fees and other similar charges) to the
third party from whom such consents, approvals, substitutions and amendments are
requested.
Section 5.3 Bank Accounts and Powers; Merchant Accounts.
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(a) As of the Closing for each Asian Business, Bank will close all of the
bank accounts of such Asian Business and revoke, and shall hereby be deemed to
have revoked, all guarantees by Bank made with respect to such bank accounts and
the related Assets, and will revoke, and shall hereby be deemed to have revoked,
authorizations and powers of attorney of employees of such Asian Business to act
on behalf of such Asian Business, except (i) with respect to the accounts listed
on Schedule 5.3 as to which Bank will use reasonable efforts to transfer to
BAMSI's name at such Closing, subject to agreement by the relevant financial
institution if not Bank, and (ii) any such accounts shall remain open and any
funds contained in such accounts at the Closing shall remain on deposit therein
to the extent necessary pursuant to the following sentence. Bank agrees that
any outstanding claims against funds contained in those accounts at the Closing
due to checks or drafts written against such funds in the ordinary course of
business consistent with past practice but not yet cleared by the financial
institution shall be paid when presented for payment to the appropriate
financial institution, in the order in which presented up to but not in excess
of the amount of funds contained in the respective accounts at the Closing.
(b) As a part of the Closing for each Asian Business, Bank will, at BAMSI's
reasonable request and without further consideration, except for reimbursement
of out-of-pocket expenses, execute such additional security agreements,
instruments or other documents as BAMSI may require to effect the assignment and
transfer to BAMSI of Bank's security interest in each Merchant Account pursuant
to Section 1.1(g).
Section 5.4 Further Assurances. After the Closing for each Asian
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Business, Bank will, at BAMSI's reasonable request and without further
consideration, except for reimbursement of out-of-pocket expenses, execute such
additional instruments of conveyance and transfer and provide to BAMSI such
additional documents as BAMSI may require to effect or evidence the transfer of
such Asian Business and related Assets to BAMSI.
Section 5.5 Employee Benefit Plans and Employee Insurance Plans. Bank
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agrees that with respect to the employee benefit plans listed on Schedule
1.3(b), benefits accrued to employees of each Asian Business who participate in
those plans will become vested on the Closing date for such Asian Business, and,
for purposes of such plans, such employees will cease to be employees of Bank as
of the Closing for such Asian Business and will be treated as "terminated" as of
the Closing.
ARTICLE VI
COVENANTS OF BAMSI
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Section 6.1 Approvals and Consents.
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(a) BAMSI shall use reasonable commercial efforts to obtain all
governmental or regulatory approvals and consents, including the Fed Approval
and the Asian Approvals, and make or cause to be made (or assist Bank in making)
any declarations, filings and registrations with governmental or regulatory
authorities which are necessary for BAMSI to consummate the purchase and sale of
each of the Asian Businesses.
(b) BAMSI shall use reasonable commercial efforts to obtain any consent,
substitution, approval or amendment required for the assignment or novation of
all agreements, leases, licenses and other rights of any nature whatsoever
relating to the Asian Businesses.
Section 6.2 Further Assurances. After the Closing for each Asian
------------------
Business, BAMSI will, at Bank's reasonable request, and without further
consideration, except for reasonable out-of-pocket expenses, execute such
additional instruments of assumption and provide to Bank such additional
documents as Bank may require to effect or ensure the proper assignment and
assumption of the Assumed Liabilities by BAMSI.
Section 6.3 Preservation of Books and Records Post-Closing Access. From
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and after the Closing Date for each Asian Business, BAMSI agrees that it shall
preserve and keep the books and records of such Asian Business delivered to it
hereunder for such period of time as may be required by any government agency or
ongoing investigation, litigation or proceeding, and shall make its books,
records and employees available to Bank as may be reasonably required in
connection with any legal proceedings against or governmental investigations of
Bank, in connection with any tax examination or filing of Bank, or for any other
reasonable business purpose arising from or relating to the Assumed Liabilities
or the Retained Liabilities.
Section 6.4 Employees. Effective as of the Closing for each Asian
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Business, all employees of such Asian Business will cease to be employees of
Bank. BAMSI agrees that it will offer employment to every employee of such
Asian Business. All current employees are listed on Schedule 6.4, which
schedule shall be updated by Bank as of such Closing.
ARTICLE VII
FURTHER COVENANTS OF THE PARTIES
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Section 7.1 Non-assignable Contracts and Permits. Nothing in this
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Agreement shall be construed as an attempt to assign to BAMSI any contract,
commitment, or other agreement or permit, license or authorization which is by
law or its terms nonassignable or the assignment of which would constitute a
violation of statute, rule, regulation, contract, commitment or other agreement.
If, as of the Closing for any Asian Business, an attempted assignment of any
contract, commitment or other agreement would be ineffective or would affect
Bank's rights thereunder so that BAMSI would not in fact receive all such
rights, Bank shall cooperate with BAMSI in a mutually acceptable arrangement, at
BAMSI's cost,
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to provide for BAMSI the benefit (including the economic benefit) of such
contract, commitment or other agreement (other than legal title). If and so
long after the Closing as such assignment shall not have been made, Bank will
(a) to the extent that such action will not result in a violation of such
contract, commitment or other agreement, transfer to BAMSI all assets and
rights, including all monies, received in respect of such contract and hold such
contract, commitment or other agreement in trust for BAMSI and (b) to the extent
that the provisions of clause (a) above are not sufficient to transfer all of
the benefits (including the economic benefit) of such contract, commitment or
other agreement (other than legal title), or any of such contract, commitment or
other agreement has been canceled as a result of the attempted assignment, take
such actions (which, without limitation, may include entering into
subcontracting arrangements with BAMSI, but in no event shall Bank be obligated
to enter into a commercially unreasonable arrangement) as are necessary to
provide all of the benefits (or the equivalent thereof, including the economic
benefit) of such contract, commitment or other agreement (other than legal
title) to BAMSI. BAMSI shall obtain, at its own expense, as of the Closing or
as soon thereafter as practicable, all permits, licenses or authorizations
required by any governmental agency with respect to such Asian Business or
related Assets without any guaranty or liability of Bank with respect thereto,
except for those permits, licenses or authorizations which can be assigned by
Bank at the Closing without the consent of any third party. Subsequent to the
Closing, Bank shall have the right to cancel any permits, licenses or
authorizations and bonds or guarantees related thereto which are applicable to
such Asian Business or related Assets but are unable to be assigned within 90
days from the Closing. BAMSI shall reimburse Bank for any and all costs
associated with the assignment or failure to cancel any such non-assignable
contracts, commitments or other agreements (including, without limitation, the
costs of providing to BAMSI the benefits thereunder) or permits, licenses or
authorizations.
Section 7.2 Conduct of Litigation. BAMSI and Bank shall cooperate fully
---------------------
in the prosecution or defense of any action, proceeding or claim arising out of
or relating to the Retained Liabilities, on the one hand, and the Assumed
Liabilities, on the other hand, and shall consult and confer with one another
with respect thereto, at no cost to BAMSI, on the one hand, or Bank, on the
other hand.
Section 7.3 Modification of Marketing Agreement. As a part of the Closing
-----------------------------------
for each Asian Business, BAMSI and Bank shall modify the Marketing Agreement and
the Administrative Services Agreement to provide for the inclusion of such Asian
Business within the provisions thereof on mutually agreeable terms.
Section 7.4 Additional Asian Businesses. During the term of this
---------------------------
Agreement, Bank and BAMSI agree to work cooperatively and use their reasonable
commercial efforts to enable BAMSI to acquire the Additional Asian Businesses.
In addition, Bank and BAMSI agree to work cooperatively and evaluate the
possibility of entering into an outsourcing or other arrangement that would
permit the Company to participate meaningfully in Bank's merchant processing
business in Taiwan. Bank will assist BAMSI in obtaining any governmental or
regulatory approvals or consents and in making any declarations, filings and
registrations with governmental or regulatory authorities which are necessary to
transfer each of the Additional Asian Businesses to BAMSI; provided, however,
that,
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notwithstanding anything to the contrary contained herein, Bank shall not be
obligated to (a) pay any consideration, fees or incur any other costs in
obtaining such approvals or consents, or (b) maintain, pursue, expand or develop
a merchant processing business in any Additional Asian Country. The purchase
price to be paid by BAMSI to acquire an Additional Asian Business will be
mutually agreed upon by BAMSI and Bank prior to any such acquisition, and may
consist of cash, Common Stock of BAMSI or any combination thereof.
ARTICLE VIII
TAX MATTERS
-----------
Section 8.1 Cooperation. BAMSI will cooperate with the Bank in connection
-----------
with any audit by the United States Internal Revenue Service or any other tax
authority of any tax return in connection with the operations of the Asian
Businesses prior to any of the Closing Dates.
Section 8.2 Tax Agreement. Bank and BAMSI agree that the Tax Agreement
-------------
shall govern all tax matters between them following the Closings.
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ARTICLE IX
CONDITIONS PRECEDENT TO
OBLIGATIONS OF BANK AND BAMSI FOR EACH CLOSING
----------------------------------------------
The obligations of Bank and BAMSI to be discharged under this Agreement on
or prior to each Closing are subject only to receipt of (a) the United States
regulatory approval set forth in Section 9.1 and (b) the local regulatory
approvals (collectively, the "Asian Approvals"), as set forth for the Asian
Businesses in Sections 9.2 and 9.3.
Section 9.1 Closing of the Purchase and Sale of each Asian Business. BAC
-------------------------------------------------------
and Bank shall have received approval from the Board of Governors of the Federal
Reserve System to establish the non-United States operations of BAMSI (the "Fed
Approval").
Section 9.2 Closing of the Purchase and Sale of the Thailand Business.
---------------------------------------------------------
Bank and/or BAMSI shall have received the following (collectively, the "Thailand
Approvals"):
(a) Approval from the Thai Ministry of Finance to establish a branch of
BAMSI in Thailand;
(b) Registration by BAMSI of its branch under the U.S.-Thai Treaty of
Amity and Economic Relations; and
(c) Such other governmental approvals and consents as are necessary for
Bank to transfer the Thailand Business to BAMSI.
Section 9.3 Closing of the Purchase and Sale of the Philippines Business.
------------------------------------------------------------
Bank and/or BAMSI shall have received the following (collectively, the
"Philippine Approvals"):
(a) Approval from the Philippines Securities and Exchange Commission to
establish a branch office of BAMSI in the Philippines;
(b) Receipt of a favorable ruling from the Philippines Bureau of Internal
Revenue regarding the transfer by Bank of the Philippines Business to
BAMSI; and
(c) Such other governmental approvals and consents as are necessary for
Bank to transfer the Philippines Business to BAMSI.
Section 9.4 Conditions Independent of One Another. Except for receipt of
-------------------------------------
the Fed Approval under Section 9.1, none of the closing conditions in this
Article IX are dependent upon any other closing condition.
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ARTICLE X
CLOSINGS
--------
Section 10.1 The Closings.
------------
(a) The consummation of the purchase and sale of each Asian Business
(each a "Closing") contemplated by this Agreement shall take place at 10:00 a.m.
local time on a date determined in accordance with Sections 10.1(b), (c) and (d)
at the offices of Bank, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or at such other time, date and place as the parties hereto may agree.
(b) The Closing for the purchase and sale of the Thailand Business and
the related Assets shall take place on a date as soon as practicable following
satisfaction of the conditions set forth in Sections 9.1 and 9.2, but in no
event later than the Final Closing Date.
(c) The Closing for the purchase and sale of the Philippines Business
and the related Assets shall take place on a date as soon as practicable
following satisfaction of the conditions set forth in Sections 9.1 and 9.3, but
in no event later than the Final Closing Date.
(d) Notwithstanding anything to the contrary contained herein, in no
event shall any Closing be consummated after December 31, 1997 (the "Final
Closing Date").
Section 10.2 Deliveries at the Closings.
--------------------------
(a) At each of the Closings, Bank and BAMSI shall deliver or cause to
be delivered, the following documents duly executed by the appropriate parties
and acknowledged where appropriate:
(i) in the case of the Closing for the Thailand Business, delivery
by BAMSI to Bank of the Thailand Consideration;
(ii) in the case of the Closing for the Philippines Business,
delivery by BAMSI to Bank of the Philippines Consideration;
(iii) a ▇▇▇▇ of Sale in the form of Exhibit A, executed by Bank;
(iv) an Instrument of Assumption of Liabilities in the form of
Exhibit B, executed by BAMSI;
(v) in the case of the Closing for the Philippines Business,
certificates evidencing all of the outstanding shares of BA
Card Services owned by Bank, executed by Bank; and
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(vi) such other documents, certificates and instruments as are
required to assign and transfer the Assets to BAMSI and to effect
the assumption of the Assumed Liabilities by BAMSI, including
such documents, certificates and instruments that may be required
under applicable local laws and regulations.
(b) The delivery of all documents and the performance of all acts at each
Closing shall be deemed to have occurred or to have been taken simultaneously.
ARTICLE XI
NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES
---------------------------------------------
Section 11.1 Survival. The representations, warranties and covenants made
--------
by Bank and BAMSI, including, without limitation, statements contained in any
certificate or Schedule or Exhibit delivered by Bank to BAMSI pursuant to this
Agreement, shall not survive the Closings.
ARTICLE XII
TERMINATION
-----------
Section 12.1 Termination. This Agreement and the transactions
-----------
contemplated hereby may be terminated as to any Asian Business at any time prior
to the Closing therefor and as to any Additional Asian Business (a) by mutual
agreement of Bank and BAMSI in writing, or (b) by Bank or BAMSI on or after
December 31, 1997, provided that, with respect to any such Asian Business, one
or more of the conditions provided in Article IX of this Agreement shall not yet
have been fulfilled by December 31, 1997. No such termination shall affect a
Closing which shall have been previously consummated.
Section 12.2 Nondisclosure. If this Agreement is terminated, BAMSI will
-------------
not, for a period of five years from the date of this Agreement, use in any
manner or disclose to any third party any documents or information regarding the
Asian Business or the transactions contemplated by this Agreement, without
Bank's prior written consent. Upon any such termination, BAMSI will immediately
return to Bank all such documents.
ARTICLE XIII
MISCELLANEOUS
-------------
Section 13.1 Amendments. BAMSI and Bank may only amend, modify or
----------
supplement this Agreement in such manner as may be agreed upon by both of them
in writing.
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Section 13.2 Waivers. Either BAMSI or Bank may, by written notice to the
-------
other, (i) waive any of the conditions to its obligations hereunder or extend
the time for the performance of any of the obligations or actions of the other,
(ii) waive any inaccuracies in the representations of the other contained in
this Agreement or in any documents delivered pursuant to this Agreement, (iii)
waive compliance with any of the covenants of the other contained in this
Agreement, and (iv) waive or modify performance of any of the obligations of the
other. No action taken pursuant to this Agreement, including without limitation
any investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, condition or agreement contained herein. Waiver of the breach of any
one or more provisions of this Agreement shall not be deemed or construed to be
a waiver of other breaches or subsequent breaches of the same provisions.
Section 13.3 Public Announcements. Neither of the parties shall make,
--------------------
issue or release any oral or written public announcement or statement
concerning, or acknowledge the existence of, or reveal the terms, conditions and
status of, the transactions contemplated by this Agreement, without the other
party's prior approval of, or concurrence in, the contents of such announcement,
acknowledgment or statement.
Section 13.4 Notices. Any notice, request, instruction or other document
-------
to be given hereunder shall be in writing and delivered personally or sent by
telecopy or prepaid overnight courier: if to BAMSI, ▇▇ ▇▇▇▇▇▇▇▇ Services, Inc.,
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention:
General Counsel #3710; and if to Bank, Bank of America NT & SA, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention: Corporate Secretary
#3018, with a copy to BankAmerica Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention: General Counsel #3017. Any notice or other
communication transmitted in accordance with this Section 13.4 shall for all
purposes of this Agreement be treated as given or effective, if personally
delivered, upon receipt, or, if sent by courier, upon the earlier of receipt or
the end of the business day following the date of delivery to such courier, or,
if telecopied, upon transmission and confirmation of receipt.
Section 13.5 Entire Agreement. The Schedules and Exhibits are
----------------
incorporated into this Agreement by reference. This Agreement and the Schedules
and Exhibits hereto embody the entire agreement between the parties and any and
all prior oral or written agreements, representations or warranties, contracts,
understandings, correspondence, conversations, and memoranda, whether written or
oral, between BAMSI and Bank or between or among any agents, representatives,
parents, subsidiaries, affiliates, predecessors in interest or successors in
interest, with respect to the subject matter hereof, are merged herein and
replaced hereby.
Section 13.6 Assignability; Third Party Rights. Neither this Agreement
---------------------------------
nor any of the party's rights hereunder shall be assignable by either party
hereto without the prior written consent of the other party. In the event that
any such assignment is made, this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns. Nothing in this Agreement, express or implied, shall
-17- Asian Acquisition Agreement
be deemed to confer upon any other person, including without limitation,
employees of any of the Asian Businesses, any rights or remedies under, or by
reason of, this Agreement; provided, that such other persons shall not be deemed
to include Affiliates, successors or permitted assigns of any party.
Section 13.7 Governing Law; Arbitration.
--------------------------
(a) This Agreement shall be construed in accordance with the laws of the
State of California without giving effect to principles of conflict of laws.
(b) Any dispute, controversy or claim between Bank and BAMSI arising out of
or relating to this Agreement or any agreements or instruments relating hereto
or delivered in connection herewith, if unable to be resolved by mutual
agreement of the parties, will be resolved by arbitration conducted in San
Francisco, California under the auspices and according to the Commercial
Arbitration Rules of the American Arbitration Association. The arbitration
shall be conducted in accordance with the United States Arbitration Act (Title
9, U.S. Code), notwithstanding any choice of law provision in this Agreement.
Section 13.8 Expenses of Agreement. Each party shall pay its own costs
---------------------
and expenses incident to the negotiation, preparation and execution of this
Agreement and the consummation of the transactions contemplated hereby,
including, without limitation, attorneys' and accounting fees, whether or not
the transactions contemplated herein are consummated. Bank and BAMSI shall
share equally the cost of any sales, transfer, use or value added taxes, plus
any interest or penalties related thereto, payable with respect to the sale,
conveyance and transfer of the Assets and the transactions contemplated by this
Agreement.
Section 13.9 Limitation on Liability. Neither BAMSI nor Bank shall have
-----------------------
any liability to the other for costs, loss of anticipated profits or otherwise
if the transactions contemplated by this Agreement are terminated pursuant to
the provisions of this Agreement.
Section 13.10 Headings, Definitions. The section and other headings
---------------------
contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement. Wherever in this
Agreement words indicating the plural number appear, such words shall be
considered as words indicating the singular number and vice versa where the
context indicates the propriety of such use.
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Section 13.11 Counterparts. This Agreement may be executed in
------------
counterparts, each of which when so executed shall be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, BAMSI and Bank have each caused this Agreement to be
executed as of the date first above written.
BANK OF AMERICA NATIONAL TRUST & SAVINGS
ASSOCIATION
By:______________________________
Name:
Title:
▇▇ ▇▇▇▇▇▇▇▇ SERVICES, INC.
By:______________________________
Name:
Title:
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