EXHIBIT 10.31
[CONFIDENTIAL TREATMENT REQUESTED]
PURCHASE AGREEMENT
ULTRADATA'S CALIFORNIA SERVICE BUREAU
ULTRADATA Corporation, a Delaware corporation ("ULTRADATA") and Premier Systems,
Incorporated, an Iowa corporation ("PSI") hereby enter into this agreement for
the transfer of ULTRADATA's service bureau located at 0000 Xxxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000 (the "California Bureau"):
1. "CU CONTRACTS" means all of ULTRADATA's rights under its data processing
contracts with the credit unions listed below (the "Contracted CUs").
ULTRADATA hereby assigns to PSI, and PSI hereby assumes, all of its rights in
and obligations under the CU Contracts, effective as of September 30,
1997(the "Closing Date"). If ULTRADATA does not have the right to
unilaterally assign a CU Contract, then the sale of that contract is subject
to ULTRADATA's ability to obtain that credit union's consent to this
assignment. PSI agrees to use its best efforts to assist ULTRADATA in
obtaining from each Contracted CU a novation of its respective CU Contract
eliminating ULTRADATA as a party thereto as soon as practicable following the
Closing Date.
2. PURCHASE PRICE. PSI will buy, and ULTRADATA will sell, Hardware and CU
Contracts as detailed in sections 1 and 4, and ULTRADATA will license the
Software as detailed in section 3, for a purchase price of $1,100,000 as
adjusted pursuant to section 1 and subsection 2.C. Hardware and Software
that is licensed or assigned to PSI as applicable under this Agreement is
listed on Schedules A-1 through A-4, attached hereto and incorporated by this
Agreement. PSI will pay the purchase price in cash as follows:
A. A $250,000 down payment payable upon execution of this Agreement.
B. Four quarterly payments of $125,000 each payable on December 31, 1997,
March 31, 1998, June 30, 1998, and September 30, 1998.
C. Four quarterly "Hold Back" payments of $87,500 each payable during the
second year of this Agreement on December 31, 1998, March 31, 1999,
June 30, 1999, and September 30, 1999. Quarterly Hold Back payments
described herein are contingent upon the Contracted CU remaining on the
PSI bureau through out the calendar quarters ended on the above dates;
provided however, the second year Hold Back payments assigned to each
Contracted CU, as listed on Schedule B, will be paid to ULTRADATA
within 30 days of the Contracted CU signing a PSI contract of three
years or greater. The balance of the remaining Quarterly Hold Back
payments will be reduced by the acceleration of payments to ULTRADATA
by PSI, if a PSI Agreement with a Contracted CU is signed prior to the
end of the scheduled payment.
______________
* Confidential treatment has been requested with respect to certain portions of
this exhibit. Confidential portions have been omitted from the public filing
and filed separately with the Securities and Exchange Commission.
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D. If a Contracted CU converts off the PSI bureau any time prior to
signing a contract with PSI or September 30, 1999, whichever is
earlier, the Quarterly Hold Back payments will be reduced on a pro-rata
basis as defined on Schedule B.
3. "SOFTWARE" when capitalized means all of the software currently used by
ULTRADATA in the operation of the California Bureau for the benefit of the
Contracted CUs, including operating programs, data base programs, modules,
custom programs, interfaces, and related programs, whether developed by
ULTRADATA or by one or more third parties. Schedules A-1 through A-4 as
applicable, detail Software licensed and or assigned under this Agreement.
A. ULTRADATA STANDARD PROGRAMS. To the extent the Software is comprised of
programs developed by ULTRADATA of a type that ULTRADATA is currently
licensing to PSI pursuant to the Software Agreement, these programs
(including AIX/UNIX, UniData, Uniplex, ALPS, and FSP), such Software
will be deemed to be licensed under the Software Agreement, and PSI's
rights in the Software will be determined pursuant to the Software
Agreement. For purposes of this Agreement, "Software Agreement" means
that certain Software and Services Agreement between ULTRADATA and PSI
effective as of July 1, 1997.
B. ULTRADATA CUSTOM PROGRAMS. ULTRADATA grants PSI a nonexclusive license,
pursuant to the terms and conditions of the Software Agreement, to use
all Software which is comprised of programs developed by ULTRADATA
which are not of a type that ULTRADATA is currently licensing to PSI
pursuant to the Software Agreement. This includes custom programs and
related third party interfaces, such as online ATM interfaces and
shared branching interfaces. PSI will have the right under this license
to use this Software on any system operated by PSI within the scope of
the licenses granted under the Software Agreement. ULTRADATA will
provide PSI with a copy of the source code for this Software upon
request to enable PSI to support and maintain this Software.
C. OTHER PROGRAMS. ULTRADATA will assign to PSI all of its rights in the
license's of Software which is comprised of programs developed by
someone other than ULTRADATA and used solely by the California Bureau,
subject to the terms and conditions of the agreement under which
ULTRADATA obtained such Software.
4. "HARDWARE" means the equipment listed on Schedules A-1 through A-4 as
applicable, whether located at the California Bureau or at a Contracted CU.
To the extent the Hardware is leased to Contracted CUs, ULTRADATA hereby
assigns to PSI, and PSI hereby assumes, all of ULTRADATA's rights in and
obligations under
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these leases, and ULTRADATA's sale of the leased items is subject to the
rights of the Contracted CUs pursuant to these leases. Schedule A includes a
list of all such leases. ULTRADATA warrants that it has good title to the
Hardware, free and clear of all liens and encumbrances other than the leases
to the Contracted CUs of equipment located at these credit unions and any
rights or encumbrances imposed by the original lessor of any Hardware not
owned by ULTRADATA. ULTRADATA warrants that the Hardware is in good operating
condition, and that the IBM R40 CPU located at the California Bureau is under
a maintenance contract with IBM. ULTRADATA assigns to PSI all of ULTRADATA's
rights in the manufacturer's warranties for the Hardware. PSI will coordinate
moving the Hardware from ULTRADATA to PSI and will assume the costs of
packaging, shipping and other related costs. PSI agrees to use its best
efforts to assist ULTRADATA in obtaining from each Contracted CU a novation
of any Hardware lease eliminating ULTRADATA as a party thereto as soon as
practicable following the Closing Date.
5. TRANSITION PROVISIONS.
A. HOLD HARMLESS. PSI is not assuming any of ULTRADATA's contracts with
third party vendors, including maintenance contracts and contracts
for data lines, other than lease agreements with respect to the
Hardware as specified in section 4 above. Subject to the terms and
conditions hereof, ULTRADATA agrees to hold PSI harmless from any
claims under these vendor contracts and from any claims by a
Contracted CU for services performed or which should have been
performed by ULTRADATA pursuant to a CU Contract prior to the Closing
Date. PSI agrees to hold ULTRADATA harmless from any claims by a
Contracted CU for services performed or which should have been
performed, and for any other claim or liability arising out of the CU
Contracts, Hardware, assigned Hardware leases or activities of PSI as
contemplated under this Agreement, on or after the Closing Date. The
party granting a hold harmless will also hold the other party
harmless from the costs of defending against such a claim, including
reasonable attorneys' fees; provided that as a condition to the
obligations of the party responsible for holding harmless (the
"Indemnifying Party") under this subsection 5.A, the other party (the
"Indemnified Party") will (a) promptly notify the Indemnifying Party
of any such claim; (b) tender full control of the defense and
settlement of such claim to the Indemnifying Party, provided that the
Indemnified Party will have the right to reasonably approve the
counsel selected by the Indemnifying Party and to participate at its
own expenses in such defense and settlement, and provided further
that the Indemnifying Party will not settle any such claim in a
manner materially adverse to the Indemnified Party without the
Indemnified Party's written consent, which will not be unreasonably
withheld or delayed; and (c) provide such assistance as the
Indemnifying Party may reasonably request.
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B. OPERATIONAL SUPPORT. ULTRADATA will provide operational support to
the California Bureau consistent with the operational support
provided by ULTRADATA prior to the Closing Date until April 30, 1998
or until an earlier date specified by PSI with at least 30 days
advanced written notice. This operational support will include full
staffing of the California Bureau in accordance with current levels
of personnel including the weekend work necessary to convert
Contracted CUs to PSI's facility, first level CRC to the California
Bureau, disaster recovery and back up support for the California
Bureau. PSI will pay ULTRADATA **** per month for this operational
support. Payment will be made on the last business day for each month
by wire transfer, under this operational contract. During this period
of operational support, ULTRADATA will provide PSI with remote access
to the computer system at the California Bureau under specifications
established by PSI and mutually agreed upon by both parties.
C. CONVERSION SUPPORT. ULTRADATA will assist PSI in the planning and
conversion of Contracted CUs from the California Bureau to PSI's West
Des Moines facility. ULTRADATA will provide reasonable levels of
training to PSI personnel on the custom modules and interfaces used
at the California Bureau, and ULTRADATA will provide support in
accordance with the support provided under the Software Agreement for
these modules and interfaces for a reasonable time after the
conversion to PSI's West Des Moines facility as mutually agreed upon
by both parties.
D. LICENSE FEES. **** PSI will use best efforts to obtain signed
processing agreements with each Contracted CU as soon as practicable
following the Closing Date. Within 24 months after the Closing Date
and provided a Contracted CU has signed a processing agreement with
PSI, PSI will pay ULTRADATA **** of the software license and
maintenance fees specified in the Software Agreement or other
applicable agreement. During this 24 month period, the members of the
Contracted CU's will be treated as members in excess of **** members
for purposes of applying the license and maintenance fees under
section 6.2 of the Software and Services Agreement. After the end of
this 24 month period, PSI will pay the full amount of the software
license and maintenance fees specified in the Software Agreement or
other applicable agreement; provided however, at all times following
the Closing Date, PSI will pay to ULTRADATA the full cost of software
license and maintenance fees applicable to new software licensed for
use by a Contracted CU. PSI shall obtain ULTRADATA's prior written
______________
* This information has been omitted as the Company is seeking confidential
treatment for such information.
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approval of any processing agreement between PSI and a Contracted CU,
which has a term of less than 36 months.
E. NON-COMPETE. ULTRADATA will not convert a Contracted CU to an in-
house system utilizing the ULTRAFIS software for a period of ****
following the Closing Date. ULTRADATA will not Participate in
the Business of operating a service bureau to service any of the
Contracted CUs utilizing ULTRAFIS software for a period of ****
after the Closing Date. "Participate in the Business" means to
operate or invest in such a service bureau, or to license the use of
ULTRAFIS software to an unrelated service bureau if ULTRADATA has
received written notice at the time of licensing that the service
bureau intends to service any of the Contracted CUs.
6. LIMITATION OF WARRANTIES. Except as set forth in this agreement, ULTRADATA
will provide the Software and the Hardware "AS IS" WITH NO WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
WARRANTIES ARISING FROM A COURSE OF DEALING OR TRADE PRACTICE.
7. LIMITATIONS OF LIABILITY. The Software Agreement is unaffected by this new
Agreement. With the exception of the Software Agreement, the commitments
explicitly stated in this Agreement will be the only obligations of the
parties with respect to the subject matter of this Agreement. NEITHER PARTY
WILL BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, OR
EXEMPLARY DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT,
whether based on breach of contract, tort, negligence, product liability,
or otherwise, or whether the party has been advised of the possibility of
such damage.
8. GENERAL PROVISIONS.
A. ASSIGNMENT. Neither party may assign this Agreement without the prior
written consent of the other party.
B. INTERPRETATION OF THIS AGREEMENT. With the exception of the Software
Agreement, this Agreement constitutes the entire contract between the
parties as of the Closing Date. With respect to the Software
Agreement, the provisions of section 5.D of this Agreement will
control over the provisions of the Software Agreement to the extent
specified in Section 5.D.. This Agreement revokes and replaces all
other prior written or oral contracts between the parties covering
the same subject matter with respect to performance after the Closing
Date. This Agreement can only be modified by a written letter or
other document signed by both parties. The use of the term
"including" followed by
* This information has been omitted as the Company is seeking confidential
treatment for such information.
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examples means that the examples are illustrative of the general
concept, but the examples are not intended to be an exhaustive
recitation of the general concept. If any provision of this Agreement
is found invalid or unenforceable, that provision will be enforced to
the maximum extent permissible, and other provisions of this
agreement will remain in force.
C. VENUE AND GOVERNING LAW. If PSI deems it appropriate to initiate
litigation, such litigation will be commenced in California and be
pursuant to California law. If ULTRADATA deems it appropriate to
initiate litigation, such litigation will be commenced in Iowa and be
pursuant to Iowa law.
D. FORCE MAJEURE. Neither party will be responsible for any failure to
perform due to causes beyond its reasonable control, including but
not limited to, acts of God, war, riot, civil or military
authorities, fire, flood, earthquake, accident, or labor dispute.
E. INDEPENDENT CONTRACTOR. The parties are independent contractors.
There is no relationship of partnership, joint venture, franchise, or
agency between the parties.
F. NOTICES. A party will give formal notices required by this agreement
to the other party's chief executive officer at the other party's
principal office. Formal notices will be given by either first class
mail or overnight courier service.
ULTRADATA CORPORATION PREMIER SYSTEMS, INCORPORATED
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx Xxxxxxxxx
Title: Vice President and CFO Title: Chairman
Date: September 30, 1997 Date: September 30, 1997
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Purchase Agreement
Schedule A-1
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SERVICE BUREAU EQUIPMENT INVENTORY
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ITEM # SERIAL # DESCRIPTION MAKE MODEL QUANTITY USE
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1 CPU HP H70 1 Host CPU
2 CPU HP E45 1 Optical Server
3 CPU REST 2 Remote Banking Servers
4 CPU Intervoice IBM PS/2 77s 1 VRIII PC
5 Terminal/Keyboard HP 700/96 2 Host & Optical Console
6 Terminal/Keyboard Optiquest 1000S 2 Remote Banking Console & Terminal
7 Terminal/Keyboard IBM 14L8 1 VRIII Console
8 UPS Xxxxxxx AccuTower 1 Host System UPS
9 UPS Xxxxxxx AccuPower Gold 2 Comm Equip UPS
10 UPS A{C SmartUPS 1400 1 Remote Banking UPS
11 SureStore Optical HP 330fx 1 Optical Disk Storage
12 Printer Okidata MicroLine 184 Turbo 1 Host Monitor Printer
13 Terminal/Keyboard Wyse Wyse50 1 Host Terminal
14 REST SupraExpress 33.6 1 Remote Banking
15 Annex Xylogics Annex3 3
16 Synchronous Engine Telamon N/A 12 Bisynch 0
17 Bisynch 1
18 Bisynch 2
19 Bisynch 3 (LBS)
20 ESP Live ATMs
21 PAR ATMs
22 SIL Shared Branch
23 SSS ATMs
24 BVF ATMs
25 OAK ATMs
26 SIL Live ATMs
27 Modem AJ 1445 2 Security Modems
28 Modem Codex 3512 1 JEF Shared Branch
29 Modem Codex 2660 1 (Not connected)
30 Modem Codex 3380 1 PARISHIONERS
31 Modem Codex 3261 2 Bisynch Transmissions
32 Modem Codex 3260 2 Bisynch Transmissions
33 Modem Codex 2205 1 Bisynch Transmissions
34 Modem Racal-Milgo OmniMode 96 1 SIL ATM's (owned by EDS)
35 Modem Practical Peripherals PM144MT2 2 ALPS Credit Report
36 Modem Practical Peripherals PM288MT II V.34 1 ALPS Credit Report
37 DSU Codex 3500 4 JEF
38 OAK
39 SIL3
40 SIL2
41 DSU ADTRAN DSU SW56 DBU 3 CAL
42 SIL Main(1)
43 SIL Main(2)
44 DSU Motorola UDS SW 56 11 1 Dial Backup (owned by Deluxe)
45 DSU Motorola 3520 1 Owned by Deluxe
46 ISU Terminal Adaptor ADTRAN ISU 2X64 1 ISDN restoral for CU's
47 Router 3COM Netbuilder II 1 Frame Relay
48 T1DSU ADTRAN TSU 2 MCI Frame Relay
49 GST Frame Relay
50 Power Sensor Sensaphone 1000 1
51 Hub Gateway G/EtherTwist 1 LAN Connection
52 Open Network Server TyLink ONS150 1
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Purchase Agreement
Schedule A-2
Service Bureau IBM Information
------------------------------------------------------------------------------------------------------------------------
IBM System
------------------------------------------------------------------------------------------------------------------------
------------------
Unix Licenses
------------------
UniData Licenses
------------------
Uniplex Licenses
------------------
Uniplex Release
------------------
Ultrafis Release
------------------
ALPS Release
------------------
ALPS Licenses
------------------
VR Level (2,3,4)
------------------
VR @ UD?
------------------
ATM Online/Offline
------------------
ATM Vendor
------------------
Shared Branch y/n
------------------
SB Vendor
------------------
Optical MR y/n
------------------ * * * *
UA Release
------------------
Debit/Visa Vendor
------------------
VISA Level (1,4)
------------------
ACH/Deposit
Network Vendor
------------------
Share Draft
Processor
------------------
System
Hardware:
------------------
Model
------------------
Memory
------------------
Disk
------------------
Tape Drives
------------------
IBM System SIL FAM BV CSC SSS CVA
Unix Licenses
------------------
UniData Licenses
------------------
Uniplex Licenses
------------------
Uniplex Release
------------------
Ultrafis Release
------------------
ALPS Release
------------------
ALPS Licenses
------------------
VR Level (2,3,4)
------------------
VR @ UD?
------------------
ATM Online/
Offline
------------------
ATM Vendor
------------------
Shared Branch * * * *
y/n
------------------
SB Vendor
------------------
Optical MR y/n
------------------
UA Release
------------------
Debit/Visa
Vendor
------------------
VISA Level (1,4)
------------------
ACH/Deposit
Network Vendor
------------------
Share Draft
Processor
------------------
System
Hardware:
------------------
Model
------------------
Memory
------------------
Disk
------------------
Tape Drives
------------------
______________
* This information has been omitted as the Company is seeking confidential
treatment for such information.
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Purchase Agreement
Schedule A-3
-------------------------------------------------------------------------------
Service Bureau Credit Unions Using ALPS
-------------------------------------------------------------------------------
CREDIT UNION NUMBER OF MEMBERS
* * * *
------------------
Total * * * *
______________
* This information has been omitted as the Company is seeking confidential
treatment for such information.
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Purchase Agreement
Schedule A-4
-------------------------------------------------------------------------------
Third Party Interfaces on the Service Bureau
-------------------------------------------------------------------------------
Interface For: Interface With (vendor):
Share Drafts WesCorp
Bank of the West
First National Bank
Travelers
Federal Reserve Bank
Colorado CU League
------------------------------------------------
ACH & Deposit Federal Reserve Bank
Network EIS
WesCorp
------------------------------------------------
Debit/Visa EIS
Equifax/First Security
------------------------------------------------
ATM Deluxe on-line
FiServ off-line
Deluxe off-line
Trans Alliance off-line
EDS on-line
EDS off-line
------------------------------------------------
Shared Branch Deluxe
------------------------------------------------
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SCHEDULE B
Contracted CU's and Holdback Allocation
--------------------------------------------------------------------------------
Second Year Monthly
"Contracted CU" Hold Back Hold Back
Allocation Allocation
--------------------------------------------------------------------------------
Total Hold Back Allocation $350,000 $29,167
================================================================================
______________
* This information has been omitted as the Company is seeking confidential
treatment for such information.
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