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ADMINISTRATIVE OFFICE
ACQUISITION AGREEMENT
THIS TAIWAN BUSINESS AND HONG KONG ADMINISTRATIVE OFFICE ACQUISITION AGREEMENT
(this "Agreement") is made this 30th day of September, 1997 by and between BANK
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OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION, a national banking association
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("Bank"), and XX XXXXXXXX SERVICES, INC., a Delaware corporation ("BAMS")
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effective as of August 1, 1997 (the "Effective Date") nunc pro tunc.
RECITALS
A. Bank. Bank is an existing national banking association duly
----
organized and in good standing under the laws of the United States with its
principal executive offices located in San Francisco, California.
B. BAMS. BAMS is an existing corporation, formed under the laws
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of the State of Delaware, with its principal executive offices located in San
Francisco, California.
C. Corporate Approvals. Each of the parties to this Agreement
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has obtained all necessary corporate approvals for the execution and delivery of
this Agreement.
D. Arm's Length Relationship. The parties to this Agreement
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intend to conduct their relationships hereunder on an arm's length basis.
E. BAC/BAMS Transactions. Bank, a subsidiary of BankAmerica
---------------------
Corporation, a Delaware corporation ("BAC"), currently owns 65.5% of the total
outstanding common stock of BAMS, and 100% of the total outstanding shares of
Class B Common Stock.
F. Asian Acquisition Agreement. Bank and BAMS have entered into
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an Asian Acquisition Agreement dated as of December 3, 1996, as amended, (the
"Asian Acquisition Agreement") pursuant to which Bank and BAMS have agreed to
(1) transfer to BAMS certain merchant processing businesses conducted by Bank in
Thailand and the Philippines, and (2) work cooperatively and use their
reasonable commercial efforts to enable BAMS to acquire the merchant processing
business conducted by the Bank in Taiwan (the "Taiwan Business") and certain
other Asian countries.
G. Acquisition of Taiwan Business. Pursuant to the terms and
------------------------------
conditions set forth in this Agreement, Bank desires to transfer the Taiwan
Business to BAMS, and BAMS desires to acquire the Taiwan 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 Stock") of
1
BAMS and the assumption by BAMS of the Assumed Liabilities (as hereinafter
defined) as set forth herein.
H. Acquisition of Hong Kong Administrative Office. Pursuant to
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the terms and conditions set forth in this Agreement, Bank desires to transfer
the Hong Kong Administrative Office to BAMS, and BAMS desires to acquire the
Hong Kong Administrative Office, by purchasing the Assets (as herein defined)
and the assumption by BAMS of the Assumed Liabilities (as hereafter defined).
The Hong Kong Administrative Office includes, primarily, personnel expenses and
office equipment and does not generate revenue. The purchase of the Assets and
assumption of the Assumed Liabilities relating to the Hong Kong Administrative
Office have been included in calculating the number of shares of Class B Stock
comprising the Consideration (as hereinafter defined).
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 BAMS hereby covenant and agree as follows:
ARTICLE I
TRANSFER OF ASSETS
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Section 1.1 Transferred Assets. At the Closing (as hereinafter
------------------
defined), Bank shall sell, assign, grant, convey, transfer and deliver to BAMS,
and BAMS 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 the Taiwan Business and the Hong Kong Administrative Office, as
they exist as of the Effective Date, together with all accrued benefits and
rights pertaining thereto (collectively, the "Assets"), other than the Excluded
Assets (as hereinafter defined), including, without limitation:
(a) Receivables. All accounts receivable, notes receivable,
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prepayments by or on behalf of the Taiwan Business, advances by or on behalf of
the Taiwan Business;
(b) Claims. All claims, demands and causes of action in favor of
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Bank arising primarily out of the Taiwan 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 the
Taiwan Business;
(d) Real Property. Those certain premises or parcels of land, in each
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case leased by Bank and used in the conduct of the Taiwan Business and the Hong
Kong Administrative Office 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
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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 the Taiwan
Business and the Hong Kong Administrative Office;
(f) Contracts. Subject to Section 7.1, all contracts, agreements,
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leases and offers open for acceptance of any nature, whether written or oral,
exclusively relating to the Taiwan Business and the Hong Kong Administrative
Office, including, without limitation, all assignable merchant customer
agreements for the provision of merchant processing services by the Taiwan
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
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or 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
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and authorizations, environmental or otherwise, in each case exclusively used to
operate the Taiwan Business and the Hong Kong Administrative Office;
(i) Computer Programs. All interests of the Taiwan Business and the
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Hong Kong Administrative Office in the software and computer programs and
documentation used exclusively in conducting the Taiwan Business and the Hong
Kong Administrative Office, 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
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the Taiwan Business and the Hong Kong Administrative Office, 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 Taiwan
Business and the Hong Kong Administrative Office;
(k) Cash balances for the Taiwan Business existing as of the
Effective Date; and
(l) Any employee plan assets ("Plan Assets") maintained by Bank for
the benefit of the employees of the Taiwan Business and the Hong Kong
Administrative Office (collectively, the "Employee Benefit Plans") effective
control of which was conveyed to BAMS by Bank as of July 22, 1997.
Without limiting the foregoing, the Assets shall consist of all assets
relating to the Taiwan Business and the Hong Kong Administrative Office that
would be reflected on a consolidated balance sheet prepared as of the Effective
Date in accordance with generally accepted accounting principles consistent with
the audited balance sheet of XX Xxxxxxxx
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Services (Asia) at December 31, 1995 and the unaudited balance sheet of XX
Xxxxxxxx Services (Asia) at June 30, 1996.
Section 1.2 Excluded Assets. Notwithstanding anything contained
---------------
herein to the contrary, the Assets shall not include, and Bank will not transfer
to BAMS and BAMS will not accept any of the following (collectively, the
"Excluded Assets"):
(a) Drafts in transit outstanding as of the Effective Date which are
retained by Bank;
(b) Books of original financial entry and internal accounting
documents and records relating to the Taiwan Business and the Hong Kong
Administrative Office and any other books and records relating to the Taiwan
Business and the Hong Kong Administrative Office that Bank is required to retain
pursuant to statute, rule or regulation, but BAMS in such event shall have the
right to inspect and copy such books, documents and records for any proper
purpose;
(c) Any assets of employee benefit plans, other than the Plan
Assets;
(d) 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 Taiwan
Business and the Hong Kong Administrative Office to the extent such Taxes relate
to a period commencing prior to the Effective Date and were not paid by BAMS;
(e) Any of the right, title and interest in the bank accounts of the
Taiwan Business, subject to Section 5.3;
(f) Policies of insurance, fidelity, surety or similar bonds and the
coverages afforded thereby;
(g) Any assets of Bank or any affiliate thereof not primarily related
to or used primarily by the Taiwan Business or the Hong Kong Administrative
Office as conducted prior to the Effective Date; and
(h) All rights, causes of action and claims to the extent arising out
of any of the Excluded Assets described in paragraphs (a) through (h) hereof or
any of the Retained Liabilities (as hereinafter defined), including, without
limitation, any rights to reimbursement for damages, fees or expenses.
Section 1.3 Terms Related to the Transfer of Assets. Title to and
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risk of loss or damage to the Assets for the Taiwan Business and the Hong Kong
Administrative Office shall pass to BAMS as of the Effective Date. Bank's
insurance coverage for the Taiwan Business and the Hong Kong Administrative
Office and the Assets shall cease as of the Effective Date as to losses arising
from events occurring on or after the date thereof.
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Section 1.4 Warranty.
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(a) Bank represents and warrants that at the Effective Date (i) the
Assets constitute all of the assets necessary for the conduct of the Taiwan
Business and the Hong Kong Administrative Office and (ii) Bank will have
transferred to BAMS good and marketable title to or a valid leasehold interest
in all personal property and other assets relating to the Taiwan Business and
the Hong Kong Administrative Office, free and clear of all liens, encumbrances
and defects which could materially affect the value of such assets or materially
interfere with the use made and proposed to be made of such Assets by BAMS.
(b) Bank agrees to assign to BAMS 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 Effective
Date.
ARTICLE II
ASSUMPTION OF LIABILITIES
-------------------------
Section 2.1 Assumed Liabilities and Obligations. As of the Effective
-----------------------------------
Date, Bank shall delegate to BAMS, and BAMS shall assume and agree to thereafter
pay, satisfy, perform and discharge, as if the Taiwan Business and the Hong Kong
Administrative Office had been operated by BAMS 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 the Taiwan Business and the Hong Kong
Administrative Office or the Assets, known or unknown, accrued, absolute,
contingent or otherwise, whether arising from pending or threatened claims
against Bank related to the Taiwan Business and the Hong Kong Administrative
Office or the Assets, including, without limitation, environmental liabilities,
whether arising as a result of the transactions contemplated hereby, whether
existing as of the Effective Date or arising at any time or from time to time
after the Effective Date, 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 Taiwan Business and the Hong Kong Administrative Office
(collectively, the "Assumed Liabilities"), other than the Retained Liabilities
(as hereinafter defined).
Section 2.2 Retained Liabilities and Obligations. The Assumed
------------------------------------
Liabilities shall not include, and Bank will not assign to BAMS, and BAMS will
not assume any of the following (collectively, the "Retained Liabilities"):
(a) Any liability to the employees of the Taiwan Business and the Hong
Kong Administrative Office prior to or as of the Effective Date 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 Effective Date;
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(b) 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 the
Effective Date; provided that, notwithstanding the foregoing, Bank shall not
retain any environmental liabilities of the Taiwan Business and the Hong Kong
Administrative Office whether based on circumstances, events or actions arising
before or after the Effective Date or whether arising under present or future
laws or any actual or alleged contractual obligations of Bank or BAMS or the
Taiwan Business and the Hong Kong Administrative Office;
(c) Liabilities solely for Taxes relating to the Assets or the Taiwan
Business and the Hong Kong Administrative Office to the extent such Taxes relate
to any period prior to the Effective Date;
(d) Liabilities exclusively arising out of or related to any of the
Excluded Assets; and
(e) 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 as of the Effective Date in accordance with generally
accepted accounting principles consistent with the audited balance sheet of XX
Xxxxxxxx Services (Asia) at December 31, 1995 and the unaudited balance sheet of
XX Xxxxxxxx Services (Asia) at June 30, 1996.
ARTICLE III
PURCHASE PRICE
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Section 3.1 Purchase Price. BAMS will assume the Assumed Liabilities
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and will deliver 1,500,000 shares of its Class B Common Stock (the
"Consideration") to Bank as consideration for Bank's selling, granting,
assigning, conveying, transferring and delivering to BAMS all of its right,
title and interest in and to the Assets relating to the Taiwan Business and the
Hong Kong Administrative Office.
ARTICLE VII
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 BAMS 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 Taiwan Business and the Hong Kong
Administrative Office as now being conducted.
(b) Authorization. The execution, delivery and performance by Bank of
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this Agreement are within the corporate power of Bank, has been duly authorized
by all necessary
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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 approval of the Board of Governors of the Federal Reserve
System (which was obtained on December 9, 1996) and the Taiwan 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 except after the fact approval of the transfer of the
Hong Kong Administrative Office to BAMS. This Agreement constitutes a valid and
binding agreement of Bank, enforceable against Bank in accordance with its
terms.
(c) Absence of Restrictions. To the knowledge of Bank, the execution
-----------------------
and 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 is a
party.
(d) Litigation. To the knowledge of Bank, there is no action,
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proceeding or investigation pending or threatened against Bank which questions
or challenges the validity of this Agreement or any action taken or to be taken
by Bank pursuant to this Agreement or in connection with the transactions
contemplated hereby.
(e) Compliance With Laws. To the knowledge of Bank, Bank 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 administrative agency
or authority or court or other tribunal relating specifically to the Assets or
the Taiwan Business and the Hong Kong Administrative Office, where such
violation could reasonably be expected to have a material adverse effect on the
Assets, the Taiwan Business and the Hong Kong Administrative Office or Bank's
ability to transfer the Taiwan Business and the Hong Kong Administrative Office
to BAMS.
(f) Financial Statements. The audited financial statements of BA
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Merchant Services (Asia) at and for the year ended December 31, 1995 and the
unaudited financial statements of XX Xxxxxxxx Services (Asia) at and for the
nine months ended June 30, 1996 have been prepared in accordance with generally
accepted accounting principles on a consistent basis and fairly present as of
the periods then ended the financial position and results of operations of the
Bank's Asian merchant processing businesses on a combined basis and reflect all
assets and liabilities that are part of such businesses.
Section 4.2 Representations and Warranties of BAMS. BAMS hereby
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represents and warrants to Bank that:
(a) Incorporation and Good Standing. BAMS 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. BAMS is duly qualified to do business and is in good standing
as a foreign corporation in the State of California.
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(b) Authorization. The execution, delivery and performance of this
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Agreement by BAMS is within BAMS' corporate power and has been duly authorized
by all necessary corporate action and does not contravene or constitute a
default under any provision of BAMS' certificate of incorporation or by-laws.
To the knowledge of BAMS, except for the Taiwan Approvals, BAMS' 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 Agreement constitutes a
valid and binding agreement of BAMS, enforceable against BAMS in accordance with
its terms.
(c) Absence of Restrictions. To the knowledge of BAMS, the execution
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and delivery of this Agreement and the performance by BAMS 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 BAMS is a party.
(d) Litigation. To the knowledge of BAMS, there is no action,
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proceeding or investigation pending or threatened against or involving BAMS,
which questions or challenges the validity of this Agreement or any action taken
or to be taken by BAMS pursuant to this Agreement or in connection with the
transactions contemplated hereby.
(e) Compliance With Laws. To the knowledge of BAMS, BAMS 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 administrative 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.
(f) Class B Stock. The Class B Stock, upon delivery to Bank as part
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of the Consideration, will be fully paid, validly issued and non-assessable
shares of BAMS' Class B common stock, issued upon proper corporate approval from
BAMS' authorized and unissued shares, and will be free from liens or
encumbrances on its title.
ARTICLE VI
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 or until this Agreement shall
terminate pursuant to Article XII, except as otherwise agreed in writing, Bank
will use reasonable commercial efforts (a) to conduct the Taiwan Business and
the Hong Kong Administrative Office 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 Taiwan
Approvals, and make or cause to be
8
made (or assist BAMS in making) any declarations, filings and registrations with
governmental or regulatory authorities, which are necessary for Bank to
consummate the sale of the Taiwan Business and the Hong Kong Administrative
Office; 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, licenses and other rights of any nature whatsoever relating
to the Taiwan Business and the Hong Kong Administrative Office; 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.
-------------------------------------------
(a) As of the Effective Date, Bank will close all of the bank accounts
of the Taiwan Business and revoke, and shall hereby be deemed to have revoked,
all guarantees by Bank made with respect to such bank accounts and the Assets,
and will revoke, and shall hereby be deemed to have revoked, authorizations and
powers of attorney of employees of the Taiwan Business to act on behalf of the
Taiwan Business or otherwise, except (i) with respect to the accounts listed on
Schedule 5.3 as to which Bank will use reasonable efforts to transfer to BAMS'
name, 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 as of the Effective Date 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 as of the Effective Date 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 as of the Effective Date.
(b) As a part of the Closing, Bank will, at BAMS' reasonable request
and without further consideration, except for reimbursement of out-of-pocket
expenses, execute such additional security agreements, instruments or other
documents as BAMS may require to effect the assignment and transfer to BAMS of
Bank's security interest in each Merchant Account pursuant to Section 1.1(g).
Section 5.4 Further Assurances. After the Closing, Bank will, at
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BAMS' 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 BAMS such additional documents as BAMS
may require to effect or evidence the transfer of the Taiwan Business and the
Hong Kong Administrative Office and the Assets to BAMS.
Section 5.5 Employee Benefit Plans and Employee Insurance Plans.
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Bank agrees that with respect to the employee benefit plans listed on Schedule
5.5, benefits accrued to employees of the Taiwan Business and the Hong Kong
Administrative Office who participate in those plans will become vested on the
Effective Date, and, for purposes of such plans, such employees will cease to be
employees of Bank as of the Effective Date and will be treated as "terminated"
as of the Effective Date.
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ARTICLE VI
COVENANTS OF BAMS
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Section 6.1 Approvals and Consents.
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(a) BAMS shall use reasonable commercial efforts to obtain all
governmental or regulatory approvals and consents, including the Taiwan
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 BAMS to consummate the purchase and sale of
the Taiwan Business and the Hong Kong Administrative Office.
(b) BAMS 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 Taiwan Business and the Hong Kong Administrative
Office.
Section 6.2 Further Assurances. After the Closing, BAMS will, at
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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 BAMS.
Section 6.3 Preservation of Books and Records Post-Closing Access.
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From and after the Effective Date, BAMS agrees that it shall preserve and keep
the books and records of the Taiwan Business and the Hong Kong Administrative
Office 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 Effective Date, all
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employees of the Taiwan Business and the Hong Kong Administrative Office will
cease to be employees of Bank. BAMS agrees that it will offer employment to
every employee of the Taiwan Business and the Hong Kong Administrative Office.
All current employees are listed on Schedule 6.4, which schedule shall be
updated by Bank as of the Effective Date.
ARTICLE VII
FURTHER COVENANTS OF THE PARTIES
--------------------------------
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 BAMS 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
10
agreement. If, as of the Effective Date, an attempted assignment of any
contract, commitment or other agreement would be ineffective or would affect
Bank's rights thereunder so that BAMS would not in fact receive all such rights,
Bank shall cooperate with BAMS in a mutually acceptable arrangement, at BAMS'
cost, to provide for BAMS the benefit (including the economic benefit) of such
contract, commitment or other agreement (other than legal title). If and so long
after the Effective Date 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 BAMS all assets and rights,
including all monies, received in respect of such contract and hold such
contract, commitment or other agreement in trust for BAMS 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 BAMS, 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 BAMS. BAMS shall obtain, at its own expense, as of the Effective Date
or as soon thereafter as practicable, all permits, licenses or authorizations
required by any governmental agency with respect to the Taiwan Business and the
Hong Kong Administrative Office or the 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 the Taiwan Business and the Hong Kong
Administrative Office or the Assets but are unable to be assigned within 90 days
from the Closing. BAMS 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 BAMS the benefits thereunder) or permits, licenses or
authorizations.
Section 7.2 Conduct of Litigation. BAMS 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 BAMS, on the one hand, or Bank, on the other
hand.
Section 7.3 Modification of Marketing and Administrative Services
-----------------------------------------------------
Agreements. As a part of the Closing, BAMS and Bank shall modify the Marketing
----------
Agreement and the Administrative Services Agreement, each between Bank and BAMS
and dated as of December 3, 1996, to provide for the inclusion of the Taiwan
Business within the provisions thereof on mutually agreeable terms.
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ARTICLE VIII
TAX MATTERS
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Section 8.1 Cooperation. BAMS 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
Taiwan Business prior to the Effective Date.
Section 8.2 Tax Agreement. Bank and BAMS agree that the Tax
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Allocation Agreement between BankAmerica Corporation and BAMS dated December 3,
1996 (the "Tax Agreement") shall govern all tax matters between them relating to
the Taiwan Business following the Effective Date.
ARTICLE IX
CONDITIONS PRECEDENT TO
OBLIGATIONS OF BANK AND BAMS FOR THE CLOSING
--------------------------------------------
The obligations of Bank and BAMS to be discharged under this Agreement
on or prior to the Closing are subject only to receipt of the local regulatory
approvals (collectively, the "Approvals"), as set forth for in Section 9.1.
Section 9.1 Closing of the Purchase and Sale. Bank and/or BAMS
--------------------------------
shall have received:
(a) Such approvals of the Ministry of Finance of Taiwan ("MOF")
necessary for BAMS to engage in the Taiwan Business, including
without limitation approval of the MOF for BAMS to process
merchant payment and debit card transactions in Taiwan;
(b) Such approvals as are necessary to ensure that BAMS revenue from
the conduct of the Taiwan Business will be taxed on a net revenue
basis and not on a gross revenue basis; and
(c) Such other governmental approvals and consents as are necessary
for Bank to transfer the Taiwan Business and the Hong Kong
Administrative Office to BAMS.
ARTICLE X
CLOSING
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Section 10.1 The Closing.
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(a) The consummation of the purchase and sale of the Taiwan Business
and the Hong Kong Administrative Office (the "Closing") contemplated by this
Agreement shall take
12
place at 10:00 a.m. local time on a date determined in accordance with Sections
10.1(b) and (c) at the offices of Bank, 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, or at such other time, date and place as the parties hereto
may agree.
(b) The Closing for the purchase and sale of the Taiwan Business and
the Hong Kong Administrative Office and the Assets shall take place on a date as
soon as practicable following satisfaction of the conditions set forth in
Article IX, but in no event later than the Final Closing Date.
(c) Notwithstanding anything to the contrary contained herein, in no
event shall the Closing be consummated after September 30, 1997 (the "Final
Closing Date").
Section 10.2 Deliveries at the Closing.
-------------------------
(a) At the Closing, Bank and BAMS shall deliver or cause to be
delivered, the following documents duly executed by the appropriate parties and
acknowledged where appropriate:
(i) delivery by BAMS to Bank of the Consideration;
(ii) a Xxxx of Sale in the form of Exhibit A, executed by
Bank;
(iii) an Instrument of Assumption of Liabilities in the form
of Exhibit B, executed by BAMS;
(iv) such other documents, certificates and instruments as are
required to assign and transfer the Assets to BAMS and to
effect the assumption of the Assumed Liabilities by BAMS,
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 the Closing shall be deemed to
have occurred or to have been taken simultaneously,
effective August 1, 1997.
(b) The delivery of all documents and the performance of all acts
at the Closing shall be deemed to have occurred or to have been taken
simultaneously, effective August 1, 1997.
ARTICLE XI
NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES
---------------------------------------------
Section 11.1 Survival. The representations, warranties and covenants
--------
made by Bank and BAMS, including, without limitation, statements contained in
any certificate or Schedule or Exhibit delivered by Bank to BAMS pursuant to
this Agreement, shall survive the Closing.
13
ARTICLE XII
TERMINATION
-----------
Section 12.1 Termination. This Agreement and the transactions
-----------
contemplated hereby may be terminated at any time prior to the Closing (a) by
mutual agreement of Bank and BAMS in writing, or (b) by Bank or BAMS on or after
December 31, 1997, provided that one or more of the conditions provided in
Article IX of this Agreement shall not yet have been fulfilled by December 31,
1997.
Section 12.2 Nondisclosure. If this Agreement is terminated, BAMS
-------------
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
Taiwan Business and the Hong Kong Administrative Office or the transactions
contemplated by this Agreement, without Bank's prior written consent. Upon any
such termination, BAMS will immediately return to Bank all such documents.
ARTICLE XIII
MISCELLANEOUS
-------------
Section 13.1 Amendments. BAMS and Bank may only amend, modify or
----------
supplement this Agreement in such manner as may be agreed upon by both of them
in writing.
Section 13.2 Waivers. Either BAMS 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 BAMS, XX Xxxxxxxx Services,
Inc., Xxx Xxxxx Xxx Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, XX 00000, attention:
General Counsel; and if to Bank, Bank of America NT & XX,
00
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, XX 00000, attention: Corporate
Secretary #3018, with a copy to BankAmerica Corporation, 000 Xxxxxxxxxx Xxxxxx,
0xx Xxxxx, Xxx Xxxxxxxxx, XX 00000, 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 BAMS 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 be deemed to
confer upon any other person, including without limitation, employees of the
Taiwan Business and the Hong Kong Administrative Office, 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 BAMS 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 BAMS 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.
15
Section 13.9 Limitation on Liability. Neither BAMS 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.
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.
16
IN WITNESS WHEREOF, BAMS 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: /s/ XXXXX X. XXXX
-------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President
XX XXXXXXXX SERVICES, INC.
By: /s/ XXXXXX X. XXXXXXX
-------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President & Chief
Executive Officer
17
List of Exhibits, Schedules and Related Documents
Exhibit A: Xxxx of Sale
Exhibit B: Instrument of Assumption of Liabilities
Schedule of Real Property (Section 1.1(d))
Schedule of Accounts (Section 5.3)
Schedule of Employees (Section 6.4)
Modified Marketing Agreement (Section 7.3)
Modified Administrative Services Agreement (Section 7.3)
18
Exhibit A
XXXX OF SALE
This Xxxx of Sale dated as of September 30, 1997 effective as of
August 1, 1997, is by Bank of America National Trust and Savings Association
("Bank"), as seller, to XX Xxxxxxxx Services, Inc. ("BAMS"), as purchaser.
Capitalized terms not otherwise defined shall have the meaning given in the
Taiwan Business and Hong Kong Administrative Office Acquisition Agreement
between Bank and BAMS, dated September 30, 1997 (the "Acquisition Agreement").
Bank, for value received and in accordance with the Acquisition
Agreement, without recourse, has transferred, sold, assigned, conveyed, granted,
bargained, set over and delivered, and by these presents, does hereby transfer,
sell, assign, convey, grant, bargain, set over and deliver, to BAMS and its
successors and assigns forever, all of Bank's right, title and interest in and
to the Assets other than the Excluded Assets as of the Effective Date.
Seller:
Bank of America National Trust and
Savings Association
By /s/ XXXXX X. XXXX
----------------------------
Xxxxx X. Xxxx
Senior Vice President
19
Exhibit B
INSTRUMENT OF ASSUMPTION OF LIABILITIES
This Instrument of Assumption of Liabilities dated as of September 30,
1997 effective as of August 1, 1997 is between Bank of America National Trust
and Savings Association ("Bank"), and XX Xxxxxxxx Services, Inc. ("BAMS"), and
is executed in accordance with the Taiwan Business and Hong Kong Administrative
Office Acquisition Agreement between Bank and BAMS dated September 30, 1997 (the
"Acquisition Agreement"). Capitalized terms not otherwise defined shall have the
meaning given in the Acquisition Agreement.
BAMS hereby assumes and agrees to pay, satisfy, perform and discharge,
as if the Taiwan Business and the Hong Kong Administrative Office had been
operated by BAMS from the commencement thereof and had never been owned by Bank,
all of the Assumed Liabilities other than the Retained Liabilities.
Seller: Purchaser:
BANK OF AMERICA NATIONAL XX XXXXXXXX SERVICES, INC.
TRUST AND SAVINGS ASSOCIATION
By /s/ XXXXX X. XXXX By /s/ XXXXXX X. XXXXXXX
------------------------ ------------------------------
Xxxxx X. Xxxx Xxxxxx X. Xxxxxxx
Senior Vice President President & Chief Executive
Officer
20
SCHEDULE OF REAL PROPERTY
(SECTION 1.1(D))
A. Leased Premises
Lessor: Shen Shin Enterprise Corp.
Location: 00/xx/ Xxxxx, XXX Xxxxxxxx
0 Xxx Xxx Xxxxx Xx.
Xxxxxxx 0
Xxxxxx, Xxxxxx
B. Leased Premises
Approximately 470 square feet will be utilized for the Hong Kong
Administrative office under service memorandum or "Letter of
understanding" with Bank of America NT&SA
Lessor: Bank of America, NT&SA
Location: Approximately 470 square feet
Xxxxx Xxxxx, 00/xx/ Xxxxx
000 Xxxx'x Xxxx
Xxxxxx Xxx
Xxxx Xxxx
Rent: Approximately US $2,028 per month, varies based on exchange rate.
21
SCHEDULE OF ACCOUNTS
(SECTION 5.3)
Bank accounts used in the operation of the Taiwan Business which Bank will use
reasonable efforts to transfer to BAMS.
None
22
SCHEDULE OF EMPLOYEES
(SECTION 6.4)
#9803 STAFF LIST
ENGLISH EMPLOYEE DEPARTMENT POSITION GRADE
NAME DATE
Xxx, Xxxxx 02/19/68 Admini VP: Business Manager L4
Xxxx, Xxxx 07/04/78 Admini AVP: Risk Management 78
Xxxxx, Xxxxx 03/04/89 Admini Vice President L5
Xxxx, Xxxx 04/21/97 Admini Secretary 52
Pan, Xxxxxx 08/02/96 Credit Credit Review Officer 75
I, Xxxxxxx 09/11/95 Credit Sr. Clerical Specialist 54
Xxxx, Xxxx 08/01/95 Credit Sr. Clerical Technician 51
Ke, Xxxxx 06/27/96 Credit Filing Clerk 51
Xxxx, Xxxxxx 06/29/77 Custom Associate Oprs. Specialist 75
Xxxx, Xxxxxxx 08/18/93 Custom Branch Specialist 52
Xxxxx, Xxxx 05/12/97 Custom Branch Specialist 52
Xx, Xxxxxx 05/12/97 Custom Branch Specialist 52
Xxxxx, Xxxxxxxxx 03/03/97 Legal Branch Specialist 52
Xxxx, Xxxx 01/23/67 Operati AVP 79
Xxxxx, Xxx 03/01/94 Operati Authorization Officer 75
Xxxx, Xxxxxxxx 01/22/96 Operati Operations Manager 76
Xxxx, Xxxxxxxx 05/15/96 Operati Associate Oprs. Specialist 75
Xxxx, Xxxx 03/23/79 Operati Operations Assistant 55
Xxxxxx, Xxxxxxxxx 07/09/84 Operati Sr. Clerical Specialist 54
Xxx, Xxxxxxxxxx 06/19/97 Operati Sr. Clerical Specialist 54
Xxx, Xxxxxxx 11/10/87 Operati Clerical Specialist 53
Xxx, Xxxxxxx 11/14/95 Operati Clerical Specialist 53
Sun, Xxxxxxx 03/07/94 Operati Clerical Specialist 53
Xxx, Xxxxxxx 03/06/92 Operati Branch Specialist 52
Xxxxx, Xxxx 04/21/97 Operati Branch Specialist 52
Lin, Fion 05/02/97 Operati Branch Specialist 52
Xxx, Xxxxx 05/29/97 Operati Branch Specialist 52
Yang, Vinecin 12/04/95 Operati Sr. Clerical Technician 51
Xxxxx, Xxxxxx 02/26/96 Operati Sr. Clerical Technician 51
Chi, Maggie 06/26/96 Operati Sr. Clerical Technician 51
Xxxx, Xxxxxx 07/17/96 Operati Sr. Clerical Technician 51
Lin, Kitty 07/29/96 Operati Sr. Clerical Technician 51
Xxx, Xxxxxxx 08/26/96 Operati Sr. Clerical Technician 51
Xxx, Xxxxx 04/14/97 Operati Sr. Clerical Technician 51
Xxxx, Xxx 05/02/97 Operati Sr. Clerical Technician 51
Xxxx, Xxxxxxxxx 05/28/97 Operati Sr. Clerical Technician 51
Xxx, Xxx 07/01/96 Operati Data Capture 50
23
Xxx, Xxxxx 07/14/97 Operati Mail/Reception Clerk 50
Xxxxx, Xxxxxx 05/19/97 Operati Data Capture 50
Xxxx, Xxxxxxxxx 05/26/97 Operati Data Capture 50
Xxxx, Xxxxx 03/19/97 Operati Data Capture 50
Xx, Xxxxx 06/02/97 Operati Data Capture 50
Xxx, Xxxxxxx 10/26/77 Portfoli AVP: Portfolio Management 79
Xxx, Xxxxx 02/15/74 Portfoli Sr. Cust. Liaison Officer 75
Xxx, Xxxxx 07/06/78 Portfoli Associate Opers. Specialist 75
Xxxxx, Xxxxxx 12/01/95 Project Account Manager 77
Xxxxx, Xxxxx 10/03/88 Project Associate Account Manager 76
Xxxx, Xxxxxxx 10/26/95 Project Associate Account Manager 76
Xx, Xxxx 03/17/97 Project Sr. Clerical Technician 51
Xxxx, Xxxx 06/13/88 Sales AVP: Merchant Rel. Rep. 78
Xxxxxx, Xxxxx 03/08/85 Sales Sr. Merchant Rel. Rep. 76
Bih, Xxxxxxx 10/20/89 Sales Sr. Merchant Rel. Rep. 76
Xxx, Xxxxxxxx 03/21/90 Sales Sr. Merchant Rel. Rep. 76
Xxxx, Xxxxx 05/03/93 Sales Sr. Cust. Liaison Officer 75
Xxxx, Xxxxx 07/05/94 Sales Sr. Merchant Svc. Sales Rep. 54
Xxx, Xxxxx X. 09/10/96 Sales Merchant Svc. Sales Rep. 53
Xxxx, Xxxxx 09/12/94 Sales Merchant Svc. Sales Rep. 52
Xxxxx, Xxxxx 01/05/95 Sales Merchant Svc. Sales Rep. 52
Xxxxx, Xxxxx 09/06/96 Sales Merchant Svc. Sales Rep. 52
Xx, Xxxxx 03/17/97 Sales Merchant Svc. Sales Rep. 52
Xx, Xxxx 08/31/92 Tech S Sr. Clerical Specialist 54
Ni, Xxxx 05/13/96 Tech S. Sales Support Clerk 53
Xx, Xxx 03/04/96 Tech S. Sr. Clerical Technician 51
Xxx, Xxxxx 05/03/96 Tech S. Sr. Clerical Technician 51
Xxxx, Xxxxxx 04/07/97 Tech S. Sr. Clerical Technician 51
CONTRACTUAL EMPLOYEES
Date: 07/17/97
Employee English Employee
Number Name Date
Xxxx, Xxxxxx 08/16/93
Xxx, Hurries 10/29/94
Xxxxx, Xxxx 04/02/96
24
Xxxx, Xxxxxx 06/19/96
Xxxxx, Xxxxxxx 08/10/96
Chen, Shadow 09/15/96
Xxx, Xxx 09/16/96
Xxx, Xxxx 01/20/97
Xxxxx, Xxxxx 01/20/97
Xxxx, Xxxxx 02/03/97
Xxxx, Xxxx 04/02/97
Xxxx, Xxxx 06/02/97
Xxxxx, Xxxxxx 07/13/97
Xxxx, Xxxxx 07/03/97
BAMSI HONG KONG
Xxxx-Xxx, Le IA L3
Xxxxxx, Xxxx X. IA L4
25
MODIFIED MARKETING AGREEMENT
(SECTION 7.3)
Marketing Agreement dated December 3, 1996 between Bank, Bank of America NW,
N.A. (subsequently merged with Bank) and BAMS
No amendment is necessary. The Agreement contemplates, in Recital D, the
transfer of Bank's Taiwan merchant services business. Section 1.(a)(1) of the
Agreement defines "BAMSI Services" as those "...that are provided by or may be
transferred to BAMSI..."
26
MODIFIED ADMINISTRATIVE SERVICES AGREEMENT
(SECTION 7.3)
Administrative and Support Services Agreement dated December 3, 1996 by and
between Bank of America National Trust and Savings Association, a national
banking association, and XX Xxxxxxxx Services, Inc., a Delaware corporation.
No amendment is necessary. The Agreement contemplates the provision of certain
services, as specifically set forth in Service Memorandum, which may include
services related to the Taiwan business and Hong Kong Administrative Office.
27
