Exhibit 10.4
ADMINISTRATIVE AND SUPPORT SERVICES AGREEMENT
This ADMINISTRATIVE AND SUPPORT SERVICES AGREEMENT (this "Agreement") is
made this 3rd day of December, 1996, by and between BANK OF AMERICA NT & SA, a
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national banking association (the "Bank"), BANK OF AMERICA NW, NATIONAL
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ASSOCIATION, a national banking association ("BANW" and together with the Bank,
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the "Providers"), and XX XXXXXXXX SERVICES, INC., a Delaware corporation
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("BAMSI").
RECITALS
A. Providers. The Bank and BANW are each an existing national banking
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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. 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 to this Agreement intend to
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conduct their relationships hereunder on an arm's length basis.
E. BAC/BAMSI Transactions. The Bank and BANW, each a subsidiary of
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BankAmerica Corporation, a Delaware corporation ("BAC"), currently own 100% of
the outstanding common stock of BAMSI. The Bank and BANW have entered or will
enter into certain agreements with BAMSI (1) transferring the Bank's United
States domestic merchant processing business and the BANW merchant processing
business to BAMSI and (2) covering the contemplated transfer of the Philippine
and Thailand merchant processing businesses of the Bank to BAMSI upon the
receipt of certain governmental approvals. BAMSI is currently considering an
initial public offering of shares of its Class A common stock, $.01 par value
per share.
F. Related Agreements. BAMSI has entered or will enter into (1) a Non-
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Competition and Corporate Opportunities Allocation Agreement of even date
herewith between BAC and BAMSI (the "Corporate Opportunities Agreement"), (2) a
Marketing Agreement of even date herewith among BAMSI, the Bank and BANW (the
"Marketing Agreement"), (3) a Sponsorship and Processing Services Agreement of
even date herewith between BAMSI and the Bank (the "Sponsorship Agreement") (4)
Processing Services Agreements of even date herewith between BAMSI and other
subsidiary banking institutions
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of BAC (the "Affiliate Bank Processing Agreements"), (5) a Trademark License
Agreement of even date herewith between BAC and BAMSI (the "License Agreement"),
(6) a Registration Rights Agreement to be entered into among BAMSI, the Bank and
BANW (the "Registration Rights Agreement"), and (7) a Tax Allocation Agreement
of even date herewith between BAC and BAMSI (the "Tax Agreement"). The
Corporate Opportunities Agreement, the Marketing Agreement, the Sponsorship
Agreement, the Affiliate Bank Processing Agreement, the License Agreement, the
Registration Rights Agreement and the Tax Agreement are herein collectively
referred to as the "Related Agreements."
G. Administrative Services. BAMSI desires to receive from the Providers
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and the Providers are willing to provide to BAMSI certain administrative and
support services as described hereunder pursuant to the terms and conditions of
this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the
premises and agreements set forth herein, the parties hereto, intending to be
legally bound, do hereby agree as follows:
1. Administrative and Support Services.
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(a) The Bank and BANW shall make available and provide to BAMSI, in
accordance with the terms and conditions of this Agreement, certain
administrative and support services (the "Services"). The Services available to
BAMSI shall include, without limitation, purchasing, advertising, publicity,
marketing, data processing (including procurement, maintenance and support),
personnel and human resources (including hiring), training, legal services,
regulatory and compliance services, payroll services, accounting, appraisal and
audit services, treasury and tax services, insurance, corporate security, credit
review and analysis, credit bureau services, and facilities (including lease
administration), as set forth in the service memoranda attached as Schedules A-1
to A-14 hereto.
(b) From time to time, BAMSI may request and the Bank and BANW may make
available and provide to BAMSI, as the parties may mutually agree,
administrative and support services in addition to those set forth in Schedules
A-1 to A-14 ("Additional Services"). Such Additional Services shall be reflected
in separate service memoranda which shall be attached hereto as additional
consecutively numbered Schedules (beginning with Schedule B-1) and executed by
both parties hereto. The terms of this Agreement shall govern all such
additional Schedules.
(c) The Bank and BANW shall use good faith efforts to provide the Services
and any Additional Services in a good, workmanlike and professional manner.
(d) Subject to the provisions of Section 6, (i) BAMSI shall afford to the
Bank and BANW, their employees and authorized agents and representatives
reasonable access to
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the properties, books, records, contracts, documents, files and other
information in order to enable the Bank and BANW to perform and provide the
Services and the Additional Services, and (ii) the Bank and BANW shall afford to
BAMSI, its employees and authorized agents and representatives reasonable access
to all information related to the Services or the Additional Services produced
or generated by the Bank or BANW in the course of providing the same, including
without limitation, technical, economic and business data, computer information
data bases and the like.
2. Fees. BAMSI shall compensate the Bank and BANW for each Service
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provided to BAMSI at the rates set forth on Schedules A-1 to A-14 hereto. The
rates and fees for any Additional Services shall be set forth on the additional
Schedules covering such Additional Services. The Bank or BANW, as the case may
be, may change its fees from time to time with 90 days' written notice to BAMSI.
Such changes shall be determined by the Bank or BANW, as the case may be, and
shall be based upon market competitive pricing terms for the Services or
Additional Services, as the case may be. BAMSI shall pay fees to the Bank and
BANW in accordance with the attached Schedules and any additional Schedules on a
quarterly basis, in arrears or on such other basis as the parties may mutually
agree, commencing on December 31, 1996, and at the end of each subsequent fiscal
quarter for as long as this Agreement remains in effect.
3. Term and Termination.
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(a) The Bank and BANW shall provide the Services to BAMSI hereunder for
the period beginning on the effective date of this Agreement, and ending on a
date five years from the date hereof or, with respect to each particular Service
or Additional Service, on the date specified in a notice of termination
delivered pursuant to Section 3(b) below with respect to such Service or
Additional Service. Thereafter, on the anniversary of this Agreement, BAMSI may
renew this Agreement for successive one-year terms (each such successive one-
year term, an "Additional Term") at its option; provided, however, that the Bank
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and BANW may exercise their right to change its fees during an Additional Term
pursuant to the provisions of Section 2 hereunder.
(b) BAMSI may terminate any portion of the Services or Additional Services
by giving 90 days' prior written notice to the Bank and BANW, provided that any
terminated Service or Additional Service may be renewed by the parties in
accordance with Section 1(b) above. If either party shall default in the
performance of any of its material obligations under this Agreement and shall
fail or refuse to remedy such default to the reasonable satisfaction of the
other party within 30 days after receipt of written notice, the non-breaching
party may terminate this Agreement. If the default in performance relates only
to a specific Service or Additional Service, termination will be limited to
termination of that Service or Additional Service. If any party shall become
insolvent, be placed in receivership, make an assignment for the benefit of
creditors or seek relief or have a petition
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filed against it under federal bankruptcy law, the other party may terminate
this Agreement immediately upon written notice.
(c) If action by a federal, state or other governmental regulatory agency
materially affects a party's rights or obligations hereunder, such party may
terminate any portion of the Services or Additional Services or this Agreement
by giving 90 days' prior written notice to the other, or such shorter period as
may be required by such agency or by law.
(d) The Bank or BANW may terminate this Agreement at any time upon 90
days' prior written notice to BAMSI in the event BAC and its affiliates (other
than BAMSI) beneficially own shares representing less than a majority of the
voting power of the outstanding common stock of BAMSI.
(e) The Bank or BANW may terminate this Agreement upon expiration or
termination of the Corporate Opportunities Agreement, the License Agreement or
the Marketing Agreement.
(f) Expiration or termination of all or a portion of this Agreement for
any reason shall not terminate the obligations described in Sections 3(g), 4 and
6 which shall survive any such termination.
(g) Expiration or termination of this Agreement for any reason shall not
terminate either party's obligations or rights arising out of any act or
omission of such party occurring prior to such termination or expiration.
4. Indemnification. Each party shall hold harmless and indemnify the
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other party and its officers, directors, employees, agents, representatives and
attorneys-in-fact from and against any claims or liabilities which may arise in
connection with the Services and/or Additional Services, unless such claims or
liabilities arise directly out of the gross negligence or willful misconduct of
the party or person seeking indemnification.
5. Relationship.
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(a) Nothing in this Agreement shall be deemed to create a partnership,
joint venture or agency relationship between the parties. Both parties are
independent contractors and neither party is to be considered the agent or legal
representative of the other for any purpose whatsoever.
(b) The Bank and BANW, in providing the Services and the Additional
Services, will be solely responsible for (i) determining the terms and
conditions of employment between itself and its employees, agents and
representatives, including without limitation,
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hiring, termination, hours of work, rates and payment of compensation, and (ii)
the payment, reporting, collection and withholding of taxes and similar
contributions.
6. Confidential Information.
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(a) The parties hereto agree: (i) to hold in trust and maintain
confidential, (ii) not to disclose to others without prior written approval from
the disclosing party, (iii) not to use for any purpose, other than for the
purpose intended or such purpose as may be authorized in writing by the
disclosing party, and (iv) to prevent duplication of and disclosure to any other
party, any Information (as hereinafter defined) received from the disclosing
party or developed, presently held or continued to be held, or otherwise
obtained by the receiving party, under this Agreement.
(b) "Information" shall include all results of the Services and Additional
Services, information disclosed by either party orally, visually, in writing, or
in other tangible form in the course of providing or receiving Services or
Additional Services, and shall include, without limitation, technical, economic
and business data, know-how, flow sheets, drawings, business plans, computer
information data bases, and the like.
(c) The foregoing obligations of confidentiality, non-disclosure and non-
use shall not apply to any Information to the extent that the obligated party
demonstrates that:
(i) such Information is or becomes knowledge generally available to
the public other than through the acts or omissions of the obligated party
which constitute a breach of this Agreement;
(ii) such Information is subsequently received by the obligated
party on a non-confidential basis from a third party who did not receive it
directly or indirectly from the disclosing party;
(iii) such Information is developed independently by the obligated
party without reference to the Information; or
(iv) disclosure of such Information is required under applicable law
or regulations or in connection with a lawsuit, claim, litigation or other
proceeding or in connection with tax or regulatory matters.
Specific Information shall not be deemed to fall within the above exceptions
merely because it is embraced by more general Information which is or becomes
public knowledge.
(d) The parties hereto further agree that any specific agreements between
them containing confidentiality provisions shall supersede the general
provisions set forth in this Section.
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7. Excusable Delay or Failure in Performance. No party to this Agreement
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shall be liable for failure to perform any of its obligations under this
Agreement during any time such party is unable to perform due to any act of God,
sabotage, military operation, national emergency, civil commotion, labor
disturbance, utility or computer failure, or the order, requisition, request or
recommendation of any government agency or acting government authority, or any
party's compliance therewith, or government proration, regulation, or priority,
or any change in laws or regulations which prevent any party from providing
services required by this Agreement, or any other cause beyond any party's
reasonable control whether similar or dissimilar to the foregoing causes. This
paragraph does not apply to the amounts owed or owing to any party on or before
the date of the occurrence of any force majeure.
8. Supervision and Regulation. The Bank and BANW are each an insured
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institution subject to regulation and supervision by the Office of the
Comptroller of the Currency (the "OCC") and various of the Services and
Additional Services may constitute bank services under 12 U.S.C. (S)1867(c). To
the extent required by law or regulation, the parties will advise the OCC of the
existence of this Agreement and will cooperate with any examination which the
OCC or any other governmental regulatory agency may conduct in connection with
this Agreement or the Services or the Additional Services provided thereunder.
9. Notices. Any notice permitted or required by this Agreement shall be
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deemed given when sent by personal service, by certified or registered mail
return receipt requested, postage prepaid, by facsimile transmission or by
overnight delivery by a nationally recognized courier and addressed as follows:
if to BAMSI, to XX Xxxxxxxx Services, Inc., Xxx Xxxxx Xxx Xxxx, 0xx Xxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, attention: General Counsel #3710; if to the Bank,
to Bank of America NT & SA, 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, attention:
General Counsel #3017; and, if to BANW, to Bank of America NW, N.A., 000 Xxxxx
Xxxxxx, Xxxxxxx, XX 00000, attention: General Counsel #3922. Actual receipt of
notice or other communication shall overcome any deficiency in manner of
delivery thereof.
10. Governing Law. This Agreement shall be governed by the laws of the
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State of California without giving effect to the conflict of laws provisions
thereof.
11. Arbitration. Any dispute, controversy or claim between the Bank and
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BANW, on the one hand, and BAMSI, on the other, arising out of or relating to
this Agreement, the Services, any Additional Services or any agreements or
instruments relating hereto or delivered in connection herewith, 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
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with the United States Arbitration Act (Title 9, U.S. Code), notwithstanding any
choice of law provision in this Agreement.
12. Entire Agreement. This Agreement constitutes the entire agreement,
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and supersedes all prior agreements, between the parties with respect to the
subject matter hereof. No change or modification of this Agreement shall be
valid and binding on either party unless set forth in a writing signed by both
parties.
13. Severability. Any provision of this Agreement that is held by a court
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of competent jurisdiction to violate applicable law shall be limited or
nullified only to the extent necessary to bring the Agreement within the
requirements of such law.
14. No Assignment. Neither of the parties hereto may assign or transfer
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any of its rights or delegate any of its obligations (whether by operation of
law or otherwise) under this Agreement to any other person or entity, provided,
however, that the Bank and BANW may each assign any of its rights or delegate
any of its duties under this Agreement, in whole or in part, without any prior
consent of BAMSI, to an Affiliate of the Bank or BANW, as the case may be, who
has the ability to perform the Services and Additional Services in substantially
the same manner as the Bank or BANW, as the case may be. For purposes of this
Agreement, an "Affiliate" means any person which directly or indirectly
controls, is controlled by, or is under common control with, such person. A
person is regarded in control of another person if it owns, or directly or
indirectly controls, at least 50% of the voting stock or other ownership
interest of the other person, or if it directly or indirectly possesses the
power to direct or cause the direction of the management and policies of the
other person by any means whatsoever; provided however that, for the purposes of
this Agreement, BAMSI shall not be an Affiliate of the Bank or BANW. Any
purported assignment or delegation that is made other than in accordance with
this Section 14 shall be void and of no effect. Subject to the foregoing
provisions of this Section 14, this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
14. Third Party Beneficiaries. Except as expressly provided in this
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Agreement, the parties hereto intend that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than the
parties hereto.
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15. Counterparts. This Agreement may be executed in counterparts and each
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such counterpart shall be deemed an original hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and each of the undersigned hereby warrants and represents that he or
she has been and is, on the date of this Agreement, duly authorized by all
necessary and appropriate action to execute this Agreement.
BANKAMERICA CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Vice Chairman
BANK OF AMERICA NW, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
President of the
Seafirst Bank Division
XX XXXXXXXX SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President
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SCHEDULES A-1 to A-14
Schedule Service
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A-1 Legal Services
A-2 Audit & Investigative Services
A-3 Forms Management & Field Services
A-4 Credit Reports
A-5 Support Services
A-6 Data Processing Services
A-7 Funds Transfer Services
A-8 Accounting Services
A-9 Investment Management & Cash Management
A-10 Human Resources
A-11 Credit Administration
A-12 Marketing/Advertising/Publications
A-13 Insurance
A-14 Corporate Secretary Services
