EXHIBIT 10.8
BONUS AGREEMENT
---------------
THIS BONUS AGREEMENT (this "Agreement") is made as of October 2, 1997 by
and among Compass International Services Corporation, a Delaware corporation
("Compass"), National Credit Management Corp., a Maryland corporation (the
"Company"), and the stockholders of the Company identified in Schedule A to this
Agreement (the "Stockholders").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution of this Agreement, the parties
hereto are entering into a Stock Purchase Agreement (the "Purchase Agreement"),
whereby Compass is purchasing all of the issued and outstanding shares of
capital stock of the Company; and
WHEREAS, the Company is a party to certain litigation regarding United
States Letter Patent No. 5,504,667 entitled "Automatic Payment System and
Method" (the "Patent"), of which it is the owner, and which litigation is as
follows:
A. National Credit Management Corporation v. Western Union Financial
-----------------------------------------------------------------
Services, Inc., DC. SD. NY. Civil Action Xx. 00 Xxx. 0000 (xxx "Western Union
--------------
Litigation"); and
B. National Credit Management Corporation v. Novus Services, Inc. and
------------------------------------------------------------------
Xxxx Xxxxxx, Discovery & Co., DC. M.D. Civil Action No. K 96-3833 (the "Xxxx
----------------------------
Xxxxxx Litigation"); and
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:
1. Defined Terms.
--------------
(a) Terms used herein with their initial letter capitalized shall, unless
otherwise defined herein, shall have the same meanings given such terms as in
the Purchase Agreement.
(b) "Applicable Transactions" shall mean, with respect to the Western Union
Litigation and the Xxxx Xxxxxx Litigation, those transactions on which a damage
award is based.
(c) "Closing Date" shall mean the date on which the transactions provided
for in the Purchase Agreement have closed.
(d) "Plaintiff Litigation" shall mean the Western Union Litigation and the
Xxxx Xxxxxx Litigation.
(e) "Pre-Closing Damages" shall mean, with respect to the Western Union
Litigation and the Xxxx Xxxxxx Litigation, that portion of the Proceeds (defined
herein) which are for or otherwise relate to the Applicable Transactions which
occurred prior to the Closing Date.
(f) "Proceeds" shall mean a monetary settlement or judgment in the Western
Union Litigation or the Xxxx Xxxxxx Litigation.
2. Western Union Litigation and Xxxx Xxxxxx Litigation.
----------------------------------------------------
(a) The Company intends to continue to pursue the Western Union Litigation
and Xxxx Xxxxxx Litigation. In the event that the Company receives Proceeds
from the Plaintiff Litigation, subject to subsection (b) below, such Proceeds
shall be divided between the Company and certain individuals, when and as
received by the Company, in the following order:
(1) First, to the Company in an amount necessary to pay any income or
other taxes, if any, which will be owed by the Company as a
result of receipt of the Proceeds;
2
(2) Second, to the Company in an amount necessary to reimburse it for
all fees and costs incurred in pursuing the Plaintiff Litigation,
including, without limitation, attorney fees and costs,
accountant fees and costs and other court costs;
(3) Third, an amount representing Pre-Closing Damages to be
distributed to certain individuals in such amounts to be
determined by the president of the Company with the approval of
Compass, such approval to not be unreasonably withheld.
(4) Fourth, all remaining Proceeds to the Company.
From and after the date of the judgment or settlement, all royalties or
other amounts received from exploitation of the Patent shall belong to the
Company.
(b) In the event that any portion of the Proceeds are not awarded on the
basis of Applicable Transactions or other criteria which can be determined as
occurring prior to or after the Closing Date, then such portion of the Proceeds
shall, after allocation of amounts set forth in (a)(1) and (2) above, be
allocated between the Company and those certain individuals in the same
proportion that the number of pre-Closing Date Applicable Transactions are to
the number of post-Closing Date Applicable Transactions. In the event that the
parties are unable to determine the number of Applicable Transactions which
occurred pre-Closing Date and which occurred post-Closing Date, Proceeds shall
be allocated between the Company and those certain individuals, after allocation
of amounts set forth in (a)(1) and (2) above, based on a percentage determined
by taking the number of days prior to the Closing Date (for the certain
individuals) or after the Closing Date (for the Company) and dividing said
number in each case by the total
3
number of days from the date reasonably determined to be the first day of
infringement to the date of settlement or judgment.
(c) Any disputes between the parties as to the allocation of the Proceeds
shall be submitted to a mutually agreeable "Big-Six" (or "Big-Five") accounting
firm, other than one which then provides services to the Stockholders, the
Company or Compass, or, if the parties are unable to agree or no such accounting
firm agrees to take this engagement, then the Company's regularly engaged
auditors shall select any accounting firm (other than themselves) or other party
they believe suitable to resolve the dispute. The decision by the accounting
firm or other arbitor shall be binding upon the parties. Each of the parties
shall, if required, agree to indemnify such accounting firm or other arbitor for
any damages resulting from the engagement, other than damages which are a result
of willful misconduct or fraud. The fees of the accounting firm or other arbitor
shall be split equally between the parties hereto.
3. This Agreement and the performance hereunder shall be governed and
construed in accordance with the laws of the State of Delaware and the United
States of America.
4. The Agreement constitutes the entire Agreement between the parties with
respect to the subject matter hereof, supersedes all other agreements and
understanding, whether written or oral and no agreements, warranties or
representations have been made by either of the parties to the other with
respect to said subject matter except as herein or therein expressly set forth
provided that nothing herein shall be deemed to affect or change any of the
provisions of the Merger Agreement.
4
5. Notwithstanding anything to the contrary which may be contained herein,
nothing in this Agreement shall be construed to modify any of the terms and
conditions of the Purchase Agreement, which Purchase Agreement remains in full
force and effect.
5
IN WITNESS WHEREOF, the parties have agreed to this Agreement as of the
date first above written.
COMPASS INTERNATIONAL SERVICES CORPORATION
/s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------------
NATIONAL CREDIT MANAGEMENT CORP.
/s/ Leeds Xxxxxxx
------------------------------------------
STOCKHOLDERS
/s/ Leeds Xxxxxxx
------------------------------------------
LEEDS XXXXXXX
/s/ Xxxxxxxx Xxxxxxx
------------------------------------------
XXXXXXXX XXXXXXX
/s/ Xxxxxx Xxxxxxxxx, Xx.
------------------------------------------
XXXXXX XXXXXXXXX, XX.
/s/ Xxxxxxxx X. XxXxxxxxx
------------------------------------------
XXXXXXXX X. XxXXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxx
------------------------------------------
XXXX X. XXXXXX
/s/ Xxxx Xxxx
------------------------------------------
XXXX XXXX
/s/ Xxxxxx Xxxxxx
------------------------------------------
XXXXXX XXXXXX
6
