TRANSITION SERVICES AGREEMENT
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This TRANSITION SERVICES AGREEMENT ("AGREEMENT") is made
this 16th day of April 1999, and is by, between and among FISERV,
INC., a Wisconsin corporation ("FISERV"), FISERV CLEARING, INC., a
Delaware corporation and a wholly owned subsidiary of Fiserv
("BUYER"), JWGENESIS FINANCIAL CORP., a Florida corporation ("JWGFC"),
JWGENESIS FINANCIAL SERVICES, INC., a Florida corporation and a wholly
owned subsidiary of JWGFC ("SELLER"), and JWGENESIS CLEARING CORP., an
Iowa corporation ("COMPANY").
WHEREAS, Fiserv, Buyer, JWGFC, Seller and the Company have
entered into that certain Stock Purchase Agreement dated as of April
16, 1999 (the "SPA"). Capitalized terms used herein and not defined
are used as defined in the SPA.
WHEREAS, pursuant to the SPA, Seller has agreed to sell to
Buyer and Buyer has agreed to purchase from Seller all of the Shares
of the Company.
WHEREAS, in order for Buyer to fully, efficiently and
effectively operate the Company immediately following the Closing
Date, it will be necessary for the Company to continue to receive
certain assistance and services, and use certain facilities,
(collectively, the "Services"), as more fully described herein, from
or through JWGFC and/or Seller, in the same manner and at the same
service quality levels as the Company received such Services on and
prior to the Closing Date.
WHEREAS, for the period beginning immediately after the
Closing and continuing until the earlier of the date on which all of
the Company's records and processing shall be transferred and/or
converted to Buyer's subsidiary Fiserv Correspondent Services, Inc.
("FCS") or September 1, 1999, or for such other period as may be
specified herein or as otherwise may be agreed in writing by the
parties, JWGFC and Seller desire and agree, jointly and severally, to
provide or cause to provide to Buyer all of the Services, and Buyer is
willing to receive such Services, upon and subject to the terms and
conditions set forth herein
NOW THEREFORE, for good and valuable consideration, and
intending to be legally bound, the parties agree as follows:
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ARTICLE I
General Agreements
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Section 1.01. Recitals. The Recitals set forth above are
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incorporated as if fully set forth herein.
Section 1.02. "Pass Through" of Costs. Whenever reference
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is made herein to the "pass through" (or any variations of said term)
of certain allocated costs, that shall mean that said costs shall be
charged and billed at the actual cost of same as incurred under the
applicable contractual arrangements and proportionate with the agreed
allocation, with no additional xxxx-ups, service charges or processing
fees of any kind.
Section 1.03. Laws, Rules and Regulations. The parties
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shall implement this Agreement in accordance with all laws, rules and
regulations applicable to the Company and to each of them.
ARTICLE II
Services Arrangements
Section 2.01. Employees, Contractors and Agents. From and
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after the date hereof and prior to Closing, JWGFC and Seller shall
remove from the Company's employ or service all employees, contractors
or agents other than the forty-one individuals specified in EXHIBIT
2.01 hereto (the "WORKERS"). JWGFC and Seller shall use all
commercially reasonable efforts to insure that all the Workers remain
in the Company's employ or service consistent with and to carry out
this Agreement and the SPA. Exhibit 2.01 lists the position and
compensation of each of the Workers. Upon and after Closing, all of
the Workers, plus the Company's NYSE representatives Xxxxx Xxxxxxx and
Xxxx Xxxxxxxx, shall become employees, contractors or agents of Buyer
or FCS.
Section 2.02. Fixed Assets and Leasehold Improvements. From
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and after the date hereof and prior to Closing, JWGFC and Seller shall
remove from the Company and/or its use all fixed assets and leasehold
improvements not associated with the direct support of the Workers.
Set forth in EXHIBIT 2.02 hereto are all fixed assets and leasehold
improvements of or relating to the Company and/or the direct support
of the Workers which the Buyer will purchase pursuant to the SPA,
including the book value of each of same. In addition, from and after
the date of Closing and until of the date on which all of the
Company's records and processing shall be transferred and/or converted
to FCS, Buyer shall use (but not purchase) certain fixed assets and
leasehold improvements of JWGFC or Seller as mutually agreed; JWGFC
shall provide directly or otherwise make available the same to Buyer
and the Company, and for same Buyer shall pay to JWGFC a flat fee of
$1,512 per calendar month.
Section 2.03. Office Space. All leasing and other
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obligations respecting the office space used in Boca Raton, Florida as
of the date hereof by JWGFC, Seller and/or Company shall be the sole
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responsibility of JWGFC. However, and as specified in EXHIBIT 2.03
hereto, a reasonable amount of square feet of said office space shall
be designated and allocated for the Company's continued operations and
the direct usage of the Workers. From and after the Closing and for
such time as Buyer uses said square feet of office space, Buyer shall
pay to JWGFC a flat monthly fee of $6,062.16 for the said allocated
square feet. Buyer shall use said square feet of office space for all
time periods during which JWGFC or any of its subsidiaries or
affiliates leases the office space used as of the date hereof by
JWGFC, Seller and/or Company. As soon as practicable following
execution of this Agreement, the parties shall mutually designate and
agree to the separate and distinct area(s) and square footage within
the said office space where, post-Closing, the physical operations of
the Company will be housed (including the physical location of the
Workers and the fixed assets and leasehold improvements referenced in
Section 2.02) and from which the business of the Company will be
carried out.
Section 2.04. Telephone and Facsimile System. All
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obligations respecting the telephone and facsimile system used as of
the date hereof by JWGFC, Seller and/or Company shall be the sole
responsibility of JWGFC. However, from and after the Closing, and for
such time as Buyer elects to use all or part of said system, JWGFC
shall provide directly or otherwise make available the same to Buyer
and the Company. Buyer shall pay to JWGFC the "pass through" costs of
same allocated based on the direct usage of the Workers.
Section 2.05. Utilities. All obligations respecting the
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utilities used as of the date hereof by JWGFC, Seller and/or Company
shall be the sole responsibility of JWGFC. However, from and after
the Closing, and for such time as Buyer elects to use all or part of
office space described in Section 2.03, JWGFC shall provide directly
or otherwise make available the same to Buyer and the Company. Buyer
shall pay to JWGFC the "pass through" costs for same based on the
square footage used directly by the Workers.
Section 2.06. Quotation Services. All obligations respecting
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the quotation services used as of the date hereof by JWGFC, Seller
and/or Company, including leases and quotation services, shall be the
sole responsibility of JWGFC. However, from and after the Closing,
and for such time as Buyer elects to use all or part of said services,
JWGFC shall provide directly or otherwise make available the same to
Buyer and the Company. Buyer shall pay to JWGFC the "pass through"
costs for the actual equipment (number of devices) and features as are
used directly by the Workers. Set forth in EXHIBIT 2.06 hereto are
the number and location of the quotation equipment of or relating to
the Company which will continue to be used for Company business from
and after the Closing.
Section 2.07. Information Systems and Information
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Technology. From and after the Closing, and for such time as Buyer
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elects to use all or part of the information systems and information
technology systems and services currently provided by or through JWGFC
or Seller for or relating to the Company, JWGFC shall provide or
otherwise make available the same to Buyer and the Company, and Buyer
shall pay the "pass through" costs for same as are used directly by
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the Workers. The said information systems and information technology
systems and services include, but are not limited to, incorporating
new correspondent requirements as well as expanding internet
capabilities as needed, and providing service concerning all present
and newly installed devices (including but not limited to voice and
data communications) used by or for the Company. JWGFC's and/or the
Company's ADP/SIS contract for or relating to the Company shall be the
sole responsibility of JWGFC. However, for the period beginning
immediately after the Closing and continuing until the end of the
month of the date on which all of the Company's records and processing
shall be transferred and/or converted to FCS, or such later time as
Buyer or FCS requests, JWGFC shall provide or otherwise make available
the same to Buyer and the Company, and Buyer shall pay the "pass
through" costs for same as are used for the Company's business.
For the Services described below in Sections 2.08, 2.09,
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2.10, 2.11 and 2.12, Buyer shall pay to JWGFC a flat fee of $230,000
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per calendar month.
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Section 2.08. Operations. From and after the Closing, and
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for such time as Buyer elects to use the operations, securities
handling, dividends, reorganizations, ACAT, mail room and back office
services currently provided by or through JWGFC or Seller for or
relating to the Company, JWGFC shall provide directly or otherwise
make available the same to Buyer and the Company. The said cash
management services include, but are not limited to, receipt and
delivery of securities and the handling of cash instruments to and
from clients, banks and depositaries. With respect to mail room and
related services, Buyer shall cause the Company, at such times as are
reasonable to implement this Agreement and the SPA, to acquire (by
lease or purchase) and use such mail systems and post office boxes as
may be necessary to operate the Company as a separate and independent
business.
Section 2.09. Regulatory Reporting; Preparation of Financial
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and Tax Statements, and Reports. From and after the Closing, and for
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such time as Buyer elects to use the regulatory reporting, financial
statement, tax, ledger, register, log, blotter, reporting and working
paper preparation and related services currently provided by or
through JWGFC or Seller for or relating to the Company, JWGFC shall
provide directly or otherwise make available the same to Buyer and the
Company.
Section 2.10. Execution Services. From and after the
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Closing, and for such time as Buyer elects to use the execution and
trading desk services (including listed, agency OTC and NASDAQ
transactions, equities and options block trading, and related clerical
functions) currently provided by or through JWGFC or Seller for or
relating to the Company, JWGFC shall provide directly or otherwise
make available the same to Buyer and the Company.
Section 2.11. Securities Compliance. From and after the
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Closing, and for such time as Buyer elects to use the securities
compliance services currently provided by or through JWGFC or Seller
for or relating to the Company, JWGFC shall provide directly or otherwise
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make available the same to Buyer and the Company. The said securities
compliance services include, but are not limited to:
receiving, acknowledging and recommending to Buyer and the Company
responses to customer complaints; receiving, processing and
recommending to Buyer and the Company responses to regulatory reviews
and inquiries; processing restricted and other Rule 144 certificates;
preparing and filing all registrations and applications required for
the Company to conduct its business; enforcing and implementing the
Company's present policies and procedures; consistent with present
policies and procedures; and providing standard risk management
reports for Buyer's and/or FCS's review. It is understood and agreed,
however, that Buyer and the Company shall be responsible for all
compliance-related decisions made by Buyer and/or the Company, whether
in response to recommendations made pursuant to this Section 2.10 or
otherwise.
Section 2.12. Warehouse Facilities. From and after the
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Closing, and for such time as Buyer elects to use the warehouse
facilities currently used by JWGFC, Seller or the Company, JWGFC shall
continue to staff, support and provide such facilities to store and
retain, per regulatory retention rules, and make available for
reasonable access and retrieval, all documents and records of or
relating to the Company. JWGFC shall provide to Fiserv and Buyer at
least six months prior written notice before the termination or
material alteration of any arrangements respecting said warehouse
facilities. The parties shall cooperate in good faith and take
reasonable actions concerning the proper handling of both past and
future documents and records of or relating to the Company.
Section 2.13. Standard of Performance. JWGFC shall perform
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or cause the performance of all of the Services competently,
accurately, timely and professionally, and in compliance with all
applicable laws, rules, regulations and orders, at all times of a
quality level consistent with same as performed and provided
previously.
Section 2.14. Billing and Payment. JWGFC shall invoice
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Buyer monthly in arrears for the Services provided hereunder. Such
invoices shall set forth such detail as reasonably requested by Buyer.
Buyer shall pay the undisputed portion of such invoices within 30 days
of receipt thereof. Buyer and JWGFC shall work diligently to resolve
promptly (within no more than five business days) any disputed portion
of such invoices.
Section 2.15. Audit. For purposes of implementing this
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Agreement, Fiserv and Buyer (themselves or via their authorized
representatives) shall have the right, at reasonable times and upon
reasonable notice, to review and audit the books, records, documents
and accounts of the other parties relating to the Services and/or all
xxxxxxxx hereunder.
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ARTICLE III
Indemnification
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Section 3.01. Indemnification of Buyer by Seller. JWGFC
shall defend, indemnify and hold harmless Buyer, Fiserv and their
subsidiaries and affiliates, along with their respective officers,
directors, employees, agents, representatives, successors and assigns
(collectively the "BUYER INDEMNIFIED PERSONS") from and against any
losses, damages, claims, suits, proceedings, liabilities, costs and
expenses (including without limitation reasonable attorneys fees and
related expenses) which may be imposed on, sustained, incurred or
suffered by or asserted against any Buyer Indemnified Person, directly
or indirectly, as a result of or relating to or arising out of any
failure by JWGFC and/or Seller to perform or cause the performance of
the Services in accordance with the terms hereof.
Section 3.02. Procedures for Indemnification. (a) If any
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Buyer Indemnified Person who is entitled to assert a claim for
indemnification under this Agreement shall receive notice of the
assertion by any person or entity of any claim or of the commencement
by any such person or entity of any action or proceeding (a "THIRD
PARTY CLAIM") with respect to which JWGFC is obligated to provide
indemnification to the Buyer Indemnified Person, the said Buyer
Indemnified Person shall give prompt notice thereof to JWGFC. Such
notice shall describe the Third Party Claim in reasonable detail.
(b) JWGFC may elect to compromise or defend, at JWGFC's
own expense and effort, and by JWGFC's own counsel, any Third Party
Claims provided, however, that JWGFC shall not settle or compromise,
or enter into a commitment with respect to settlement or compromise
of, such Third Party Claim without the prior written consent of Buyer.
If JWGFC elects to defend a Third Party Claim it shall, within 30 days
of receipt of the notice referred to in Section 3.02(a) above (or
sooner, if the nature of such Third Party Claim so requires), notify
the Buyer Indemnified Person of its intent to do so, and the Buyer
Indemnified Person shall reasonably cooperate in the compromise of, or
defense against, such Third Party Claim. JWGFC shall pay such Buyer
Indemnified Person all actual and reasonable out-of-pocket expenses
incurred in connection with such cooperation. After notice from JWGFC
to such Buyer Indemnified Person of its election to assume the defense
of a Third Party Claim, JWGFC shall not be liable to such Buyer
Indemnified Person for any legal expenses subsequently incurred by
such Buyer Indemnified in connection with the defense thereof
provided, that such Buyer Indemnified Person shall have the right to
employ one counsel for each Third Party Claim to represent such Buyer
Indemnified Person if, in such Buyer Indemnified Person's good faith
judgment, (i) a conflict of interest between such Buyer Indemnified
Person and JWGFC exists in respect of such Third Party Claim or (ii)
where JWGFC is also a party to such Third Party Claim, different or
conflicting expenses of such separate counsel shall be paid by JWGFC.
If JWGFC elects not to defend against a Third Party Claim, or fails to
notify a Buyer Indemnified Person of its election not to defend, such
Buyer Indemnified Person may, without advance notice to JWGFC, pay,
compromise or defend such Third Party Claim reasonably and in good
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faith on behalf of and for the account and risk of JWGFC to the extent
that the Buyer Indemnified Person is entitled to receive
indemnification from JWGFC hereunder. JWGFC shall not consent to
entry of any judgment or entry into any settlement against or with
respect to any Buyer Indemnified Person without the written consent of
such Buyer Indemnified Person, unless such judgment or settlement (A)
provides solely for money damages or other payments for which such
Buyer Indemnified Person is entitled to indemnification hereunder and
(B) includes as an unconditional term thereof the giving by the
claimant or plaintiff to such Buyer Indemnified Person of a full and
unconditional release for all liability in respect of such Third Party
Claim.
Section 3.03. Applicability. For the avoidance of doubt,
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no Buyer Indemnified Person shall be entitled to assert a claim for
indemnification under this Article III based on any matter(s) that
was/were expressly and in writing directed or approved by said Buyer
Indemnified Person.
Section 3.04. Limitation. Unless the indemnity obligations
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specified in Section 3.01 are triggered by actions or inactions which
rise to the level of gross negligence or intentional misconduct,
JWGFC's indemnity payments pursuant to this Article III shall not
exceed the amount of money it receives from Buyer for payment of the
Services as provided herein. No such dollar limitation shall apply if
the indemnity obligations specified in Section 3.01 are triggered by
actions or inactions that rise to the level of gross negligence or
intentional misconduct.
ARTICLE IV
Miscellaneous
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Section 4.01. Further Assurances. On and after the
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Closing Date, the parties shall execute all documents, instruments or
conveyances of any kind which may be necessary or advisable to carry
out any of the provisions hereof and to consummate the transactions
contemplated hereby.
Section 4.02. Notices. All notices hereunder shall be
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given in accordance with Section 7.05 of the SPA.
Section 4.03. Assignment. This Agreement shall not be
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assignable by any party hereto without the prior written consent of
the other parties, which consent shall not be unreasonably withheld
except that Buyer may without such consent assign its rights (or a
portion of its rights) hereunder to a wholly-owned subsidiary or
subsidiaries of Buyer.
Section 4.04. Entire Agreement. With respect to the
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subject matter hereof, this Agreement constitutes the entire agreement
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between or among the parties, and supersedes and cancels any and all
other agreements between or among the parties relating thereto.
Section 4.05. Invalidity. If any one or more of the
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provisions contained in this Agreement, or in any other instrument
referred to herein, shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this
Agreement or any such other instrument.
Section 4.06. Counterparts. This Agreement may be
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executed simultaneously in two or more counterparts, each of which
shall be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.
Section 4.07. Governing Law and Dispute Resolution.
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These matters shall be as provided in Section 7.09 and Section 7.10 of
the SPA.
Section 4.08. Amendments. This Agreement may be
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modified or amended only if all parties hereto sign a written
agreement which specifies all said modifications or amendments.
Section 4.09. Successors and Assigns. This Agreement
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shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns. No
person or entity other than the parties hereto is a beneficiary
hereunder.
WITNESS the due execution of this Agreement as of the day
and year first above written.
FISERV, INC.
By /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Executive Vice
President
FISERV CLEARING, INC.
By /s/ Xxxxxxxx X. Xxxxxx
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Xxxxxxxx X. Xxxxxx, Senior Vice
President
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JWGENESIS FINANCIAL CORP.
By /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Vice Chairman and
Chief Operating Officer
JWGENESIS FINANCIAL SERVICES, INC.
By /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Executive Vice
President
JWGENESIS CLEARING CORP.
By /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, Executive Vice
President
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