Exhibit 10.8
ASSET TRANSFER AGREEMENT
THIS ASSET TRANSFER AGREEMENT is executed and delivered by and among BANK
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OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA" or a "Seller"), BANK
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OF AMERICA NW, NATIONAL ASSOCIATION ("BANW" or a "Seller" and together with
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BofA, the "Sellers") and XX XXXXXXXX SERVICES, INC., a Delaware corporation
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("BAMSI").
RECITALS
A. Sellers. Each of the Sellers is an existing national banking
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association duly organized and in good standing under the laws of the United
States and a subsidiary of BankAmerica Corporation, a Delaware corporation
("BAC"). BofA's principal executive offices are located in San Francisco,
California. BANW's principal offices are located in Seattle, Washington. BofA
currently owns 100% of the outstanding common stock of BAMSI.
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 hereto intend to conduct their
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relationships hereunder on an arm's length basis.
E. BAMSI Transactions; Related Agreements. BAMSI is currently
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considering an initial public offering of shares of its Class A common stock,
$.01 par value per share ("Class A Common Stock"). BAMSI has entered or will
enter into (1) a Non-Competition and Corporate Opportunities Allocation
Agreement of even date herewith between BAC and BAMSI, (2) a Marketing Agreement
of even date herewith among BAMSI, BofA and BANW, (3) Processing Services
Agreements of even date herewith between BAMSI and other subsidiary banking
institutions of BAC, (4) an Administrative Services Agreement of even date
herewith between BofA and BAMSI, (5) a Trademark License Agreement of even date
herewith between BAC and BAMSI, (6) a Registration Rights Agreement to be
entered into among BAMSI, BofA and BANW, (7) a Tax Allocation Agreement of even
date herewith between BAC and BAMSI, (8) a Lease Agreement of even date herewith
between BofA and BAMSI covering various BAMSI premises and operating locations,
and (9) a Sponsorship Processing Agreement of even date herewith between BofA
and BAMSI.
F. Merchant Processing Business. Each Seller is engaged in the business
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of providing an array of payment processing and related information products and
services to merchants who accept credit, charge and debit cards as payments for
goods and services throughout the United States (collectively, the "Business").
The Sellers wish to transfer the Business to BAMSI and BAMSI desires to acquire
the Business, by purchasing the Assets (as hereinafter defined) in exchange for
shares of Class B Common Stock, par value $.01 per share ("Class B Common
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Stock"), of BAMSI and the assumption by BAMSI of the Assumed Liabilities (as
hereinafter defined) as set forth herein.
NOW, THEREFORE, in consideration of the matters described above and 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, BofA, BANW and BAMSI hereby
covenant and agree as follows:
1. Sale and Purchase of Assets. Each Seller hereby irrevocably sells,
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grants, assigns, conveys, transfers and delivers to BAMSI, and BAMSI hereby
purchases, assumes and accepts delivery of, all of such Seller's right, title
and interest in and to all of the tangible and intangible assets primarily
related to and used primarily by the Business, as they exist as of the date
hereof, together with all accrued benefits and rights pertaining thereto
(collectively, the "Assets"), other than the Excluded Assets (as hereinafter
defined), including, without limitation:
(i) Receivables and Other Items. All of those accounts receivable,
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notes receivable, prepayments by or on behalf of the Business, advances by or on
behalf of the Business and other receivables arising in each case exclusively
out of the Business and outstanding as of the date hereof;
(ii) Claims. All claims, demands, causes of action, judgments and
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decrees in favor of each Seller arising exclusively out of the Business;
(iii) 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 the
Business;
(iv) 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 the
Business;
(v) Contracts. All contracts, agreements, leases and offers open for
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acceptance of any nature, whether written or oral, exclusively relating to the
Business, including, without limitation, all merchant customer agreements for
the provision of merchant processing services by each Seller ("Merchant
Agreements") and all other customer contracts, leases of personal property and
purchase orders;
(vi) Merchant Accounts. All security interests in each demand deposit or
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similar account, either with a Seller or another financial institution, linked
to a customer under a Merchant Agreement;
(vii) Operating Permits. All licenses, permits and authorizations,
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environmental or otherwise, in each case exclusively used to operate the
Business;
(viii) Computer Programs. All interests of the Business in the software
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and computer programs and documentation used exclusively in conducting the
Business, including flow charts, diagrams, descriptive texts and programs,
computer printouts, underlying tapes, computer data bases and similar items;
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(ix) Books and Records. All books and records exclusively relating to
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the 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 the Business; and
(x) Cash Balances. Cash balances for the Business existing on the date
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hereof.
Without limiting the foregoing, the Assets shall consist of all assets (except
as provided in Section 2(i)) that would be reflected on a consolidated balance
sheet prepared on the date hereof in accordance with generally accepted
accounting principles consistent with the audited balance sheet of BAMSI at
December 31, 1995 and the unaudited balance sheet of BAMSI at September 30,
1996.
Section 2. Excluded Assets. Notwithstanding anything contained herein to
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the contrary, the Assets shall not include, and each Seller 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"):
(i) Drafts in transit outstanding as of the date hereof which are
retained by each Seller;
(ii) Books of original financial entry and internal accounting documents
and records relating to the Business and any other books and records relating to
the Business that either Seller is required to retain pursuant to statute, rule
or regulation, which BAMSI shall have the right to inspect and copy for any
proper purpose;
(iii) 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 and penalties
imposed thereon (collectively, "Taxes") relating to the Assets or the Business
to the extent such Taxes relate to a period commencing prior to the date hereof
and were not paid by BAMSI;
(iv) All of the right, title and interest in the bank accounts of the
Business;
(v) Policies of insurance, fidelity, surety or similar bonds and the
coverages afforded thereby;
(vi) Any assets of either Seller not primarily related to or used
primarily by the Business as conducted prior to the date hereof for the
Business; and
(vii) All rights, causes of action and claims arising out of any of the
Excluded Assets described in paragraphs (i) through (vii) hereof or any of the
Retained Liabilities (as hereinafter defined), including, without limitation,
any rights to reimbursement for damages, fees or expenses.
Section 3. Terms Related to the Transfer of Assets. Title to and risk of
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loss or damage to the Assets for the Business shall pass to BAMSI as of the date
hereof. Each Seller's insurance coverage for the Business and the related
Assets shall cease as of the date hereof as to losses arising from events
occurring on or after the date hereof.
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Section 4. Warranty.
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(a) Bank represents and warrants that: (i) the Assets constitute all of
the assets necessary for the conduct of the business of BAMSI as contemplated by
the Registration Statement (No. 333-13985) relating to the proposed offering of
shares of Class A Common Stock of BAMSI; (ii) at the Closing, 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 the 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; and (iii) the audited financial statements of
BAMSI at and for the year ended December 31, 1995 and the unaudited financial
statements of BAMSI 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 Business and reflect all assets and liabilities that are part
of the Business.
(b) Each Seller agrees to assign to BAMSI such rights as each Seller
may have the right to assign under any warranty made by any vendor, manufacturer
or contractor with respect to any of the Assets.
Section 5. Assumed Liabilities and Obligations. Each Seller hereby
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assigns and delegates to BAMSI, and BAMSI hereby assumes and agrees to
thereafter pay, satisfy, perform and discharge, as if the Business had been
operated by BAMSI from the commencement thereof and had never been owned by the
Sellers, all of the obligations and liabilities arising out of or relating to
the Business or the Assets, known or unknown, accrued, absolute, contingent or
otherwise, whether arising from pending or threatened claims against each
related to the Business or the Assets, including, without limitation,
environmental liabilities, whether arising as a result of the transactions
contemplated hereby, whether existing on the date hereof or arising at any time
or from time to time after the date hereof, 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 the Business (collectively, the "Assumed Liabilities"),
other than the Retained Liabilities (as hereinafter defined).
Section 6. Retained Liabilities and Obligations. The Assumed Liabilities
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shall not include, and each Seller will not assign to BAMSI, and BAMSI will not
assume any of the following (collectively, the "Retained Liabilities"):
(i) Any liability to the employees of the Business prior to or as of
the Closing for the Business to provide benefits to such employees under BofA
employee benefit plans which provide medical, dental, disability or life
insurance coverage for claims arising from occurrences (as defined in the
relevant plan) prior to the date hereof;
(ii) Any liability for vested benefits under BofA 401(k) and other
employee benefit plans which have accrued to any employee of the Business as of
the date hereof, as if such employee was terminated as of the date hereof;
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(iii) Liabilities (a) for which an insurer has liability under an
insurance policy of either Seller, to the extent of actual coverage under such
policy, and (b) that arise out of occurrences (as defined in such policy) prior
to the date hereof;
(iv) Liabilities only for Taxes relating to the Assets or the Business
to the extent such Taxes relate to any period prior to the date hereof;
(v) Liabilities exclusively arising out of or related to any of the
Excluded Assets; and
(vi) 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
BAMSI at December 31, 1995 and the unaudited balance sheet of BAMSI at September
30, 1996.
Section 7. Purchase Price. With respect to the Business, BAMSI will
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assume the Assumed Liabilities and will deliver 25,670,000 shares of its Class B
Common Stock of BofA and 4,530,000 shares of its Class B Common Stock to BANW as
consideration for BofA's and BANW's selling, granting, assigning, conveying,
transferring and delivering to BAMSI all of their right, title and interest in
and to the Assets relating to the Business.
Section 8. Further Assurances. After the date hereof, each Seller will,
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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 Assets to BAMSI. As soon as
practicable, but no later than 60 days from the date hereof the parties hereto
shall prepare and a schedule evidencing the assets transfered and liabilities
assumed hereunder, which schedule shall be attached to and become a part of this
Agreement.
Section 9. Limitation on Liability. Neither Seller nor BAMSI shall have
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any liability for costs, loss of anticipated profits or otherwise as a result of
the transactions contemplated by this Agreement. Nothing in this Agreement,
express or implied, shall be deemed to confer upon any other person 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.
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Section 10. Governing Law. This Agreement and all transfers of property
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and other actions confirmed hereby shall be governed by and construed in
accordance with the terms and conditions of the Agreement and the laws of the
State of California.
Dated as of December 3, 1996.
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION XX XXXXXXXX SERVICES, INC.
By /s/ Xxxxxx X. Xxxxxxxx By /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxx
Vice Chairman President
BANK OF AMERICA NW, NATIONAL
ASSOCIATION
By /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
President of the
Seafirst Bank Division
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