-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F5VXdGLFmjjIujblZ0icztNJrlgfJJMWoGrI/EMklo8YAS8XZ6d5daLtcGMPd/Kd Q5jTJv+AEhES8XGpzoDUFA== 0000950144-96-003025.txt : 19960531 0000950144-96-003025.hdr.sgml : 19960531 ACCESSION NUMBER: 0000950144-96-003025 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19960515 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960530 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BROADWAY & SEYMOUR INC CENTRAL INDEX KEY: 0000885533 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 411522214 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20034 FILM NUMBER: 96574687 BUSINESS ADDRESS: STREET 1: 128 S TRYON STREET CITY: CHARLOTTE STATE: NC ZIP: 28202 BUSINESS PHONE: 7043724281 MAIL ADDRESS: STREET 1: 128 SOUTH TRYON STREET CITY: CHARLOTTE STATE: NC ZIP: 28202 8-K 1 BROADWAY & SEYMOUR INC 8-K 5-15-96 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) MAY 15, 1996 ------------ Commission File Number: 0-20034 BROADWAY & SEYMOUR, INC. ------------------------ (Exact name of registrant as specified in its charter) DELAWARE 41-1522214 -------- ---------- (State or other jurisdiction (I.R.S. Employer of incorporation) Identification Number) 128 SOUTH TRYON STREET, CHARLOTTE NORTH CAROLINA 28202 - ------------------------------------------------ ----- (Address of principal executive offices) (Zip code) (704) 372-4281 -------------- (Registrant's telephone number, including area code) Page 1 of 7 2 Broadway & Seymour, Inc. Form 8-K Current Report Dated May 15, 1996 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Effective May 15, 1996, Broadway & Seymour, Inc., a Delaware corporation ("BSI" or the "Company"), sold certain assets, subject to certain related liabilities, including the Company's AMtrust and TrustProcessor software products, to Fidelity Investments Institutional Services Company, Inc. ("Fidelity"), pursuant to an Asset Purchase Agreement (the "Agreement"). In connection therewith, the Company and Fidelity entered into various ancillary agreements which relate to the Company licensing to Fidelity certain other software, the Company providing to Fidelity certain software maintenance and transition services and Fidelity contracting with the Company for certain minimum systems integration work in the twenty-four months following execution of the agreements. The aggregate consideration paid and to be paid to the Company in connection with these transactions is approximately $30.5 million, of which approximately $24.2 million was paid at closing for the purchase of net assets and license of certain software and approximately $6.3 million will be paid over the next twenty four months for certain software maintenance, software training, transition services and professional services. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) Financial Statements of Business Acquired. Not applicable. (b) Pro Forma Financial Information. Pro Forma condensed consolidated financial information (unaudited) of Broadway & Seymour, Inc. as of March 31, 1996 and for the year ended December 31, 1995 and the three months ended March 31, 1996. (c) Exhibits. 2.1 Asset Purchase Agreement, dated as of April 10, 1996, by and among Fidelity Investments Institutional Services Company, Inc. and Broadway & Seymour, Inc., BancCorp Systems, Inc., Heebink Group, Incorporated and National Systems Group, Inc. The Exhibits and Schedules referenced in the table of contents and elsewhere in the Asset Purchase Agreement have been omitted and will be furnished to the Commission upon request. 2.1a Amendment No. 1 to Asset Purchase Agreement. 2.2 Quantech License and Services Agreement, dated April 10, 1996, by and between Fidelity Investments Institutional Services Company, Inc. and Corbel & Company. 2.3 Licenses and Services Agreement, dated April 10, 1996, by and between Fidelity Investments Institutional Services Company, Inc. and BancCorp Systems, Inc. 2.4 Temporary Professional Services Agreement, dated May 15, 1996, by and between Fidelity Investments Institutional Services Company, Inc. and Broadway & Seymour, Inc. 2.5 Guaranty and Indemnity Agreement, dated April 10, 1996, by and between Fidelity Investments Institutional Services Company, Inc. and Broadway & Seymour, Inc. 2.5a Amendment No. 1 to Guarantee and Indemnity Agreement. 2.6 Transition Services and Support Agreement, dated May 15, 1996, by and between Fidelity Investments Institutional Services Company, Inc. and Broadway & Seymour, Inc. 2.7 Agreement and Mutual Release, dated April 10, 1996, by and between Broadway & Seymour, Inc., BancCorp Systems, Inc., Phillip E. Sorrel and Martha A. Sorrell. 99.1 Text of Press Release of Broadway & Seymour, Inc. dated April 11, 1996. - 2 - 3 Broadway & Seymour, Inc. Form 8-K Current Report Dated May 15, 1996 PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION OF BROADWAY & SEYMOUR, INC. (UNAUDITED) The following information sets forth, for the periods and dates indicated, unaudited pro forma condensed consolidated financial information for Broadway & Seymour, Inc. This pro forma information is derived from the historical consolidated financial statements and reflects the unaudited condensed consolidated results of operations as if the sale of assets referred to in Item 2 had occurred as of December 31, 1994 and the unaudited condensed consolidated balance sheet as if the transaction had occurred on March 31, 1996. The unaudited pro forma condensed financial information reflects (1) the estimated impact of the sale of assets to Fidelity and (2) the decrease in interest expense resulting from the assumed repayment of borrowings with proceeds from the sale. The net gain on sale of assets is not reflected in the pro forma condensed consolidated statement of operations for the periods presented nor has any interest income from the assumed investment of excess cash during the periods been reflected. The pro forma condensed consolidated statement of operations also do not give effect to the nonrecurring service revenues described in Item 2 "Acquisition or Disposition of Assets." The pro forma unaudited consolidated financial information is not necessarily indicative of the consolidated results of operations had the sale transaction actually been consummated on the assumed dates and should be read in conjunction with the historical financial statements of Broadway & Seymour, Inc. included in the respective filings on Form 10-K and Form 10-Q. - 3 - 4 Broadway & Seymour, Inc. Form 8-K Current Report Dated May 15, 1996 BROADWAY & SEYMOUR, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1996 (IN THOUSANDS)
(a) Historical Adjustments Pro Forma ---------- ----------- --------- ASSETS Current assets: Cash and cash equivalents $ 459 $11,897 $12,356 Receivables 27,644 (6,564) 21,080 Inventories 257 (30) 227 Deferred income taxes 4,507 4,507 Other current assets 1,609 (87) 1,522 ------- -------- ------- Total current assets 34,476 5,216 39,692 Property and equipment 9,284 (1,259) 8,025 Software costs 9,286 (1,774) 7,512 Intangible assets 23,678 (3,221) 20,457 Other assets 371 (9) 362 ------- -------- ------- $77,095 ($ 1,047) $76,048 ======= ======== ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable and current portion of long-term debt $11,588 ($11,303) $ 285 Accounts payable-trade 4,090 4,090 Accrued compensation 1,998 1,998 Estimated liabilities for contract losses 4,517 4,517 Other accrued liabilities 2,847 1,700 4,547 Deferred revenue 11,439 (3,806) 7,633 Income taxes payable 6,800 6,800 ------- -------- ------- Total current liabilities 36,479 (6,609) 29,870 ------- -------- ------- Long-term debt 443 443 ------- -------- ------- Deferred tax liabilities 6,769 (1,855) 4,914 ------- -------- ------- Other liabilities 458 458 ------- -------- ------- Stockholders' equity: Common stock 89 89 Paid-in capital 35,128 35,128 Retained earnings (2,271) 7,417 5,146 ------- -------- ------- 32,946 7,417 40,363 ------- -------- ------- $77,095 ($ 1,047) 76,048 ======= ======== =======
(a) (i) Reflects the assumed sale of certain assets and liabilities to Fidelity for cash proceeds of approximately $23.2 million and the estimated gain on the sale, net of income taxes; (ii) Reflects the assumed repayment of borrowings and the accrual of certain costs arising in connection with the sale. - 4 - 5 Broadway & Seymour, Inc. Form 8-K Current Report Dated May 15, 1996 BROADWAY & SEYMOUR, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(a) Historical Adjustments Pro Forma ---------- ----------- --------- Revenue: Services $16,914 ($3,937) $12,977 Products 7,819 (511) 7,308 -------- ------ -------- Total revenue 24,733 (4,448) 20,285 -------- ------ -------- Cost of revenue: Services 16,109 (4,179) 11,930 Products 1,952 (308) 1,644 -------- ------ -------- Total cost of revenue 18,061 (4,487) 13,574 -------- ------ -------- Research and development 1,825 - 1,825 Sales and marketing 3,270 (682) 2,588 General and administrative 2,762 (150) 2,612 Restructuring charge (credit) (205) - (205) -------- ------ -------- Total expenses 7,652 (832) 6,820 -------- ------ -------- Operating income (980) 871 (109) Interest income (expense) (175) 175 - -------- ------ -------- Income (loss) before income taxes (1,155) 1,046 (109) Provision (benefit) for income taxes (320) 290 (30) -------- ------ -------- Net income (loss) ($ 835) $ 756 ($ 79) ======== ====== ======== Net income (loss) per common and common equivalent share: ($ 0.09) ($ 0.01) ======== ======== Weighted average common and common equivalent shares outstanding 8,856 8,856
(a) (i) Reflects decrease in revenue, costs and expenses resulting from sale of certain net assets to Fidelity; (ii) Reflects decrease in interest expense resulting from assumed repayment of borrowings; (iii) Reflects the income tax effects of the reduction in the operating loss for the period based on the Company's effective tax rate. - 5 - 6 Broadway & Seymour, Inc. Form 8-K Current Report Dated May 15, 1996 BROADWAY & SEYMOUR, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(a) Historical Adjustments Pro Forma ---------- ----------- --------- Revenue: Services $ 74,553 ($12,063) $62,490 Products 40,185 (3,431) 36,754 --------- ------- -------- Total revenue 114,738 (15,494) 99,244 --------- ------- -------- Cost of revenue: Services 77,777 (17,342) 60,435 Products 15,830 (3,669) 12,161 --------- ------- -------- Total cost of revenue 93,607 (21,011) 72,596 --------- ------- -------- Research and development 6,729 - 6,729 Sales and marketing 15,760 (3,051) 12,709 General and administrative 11,566 (700) 10,866 Restructuring and impairment charges 2,921 - 2,921 --------- ------- -------- Total expenses 36,976 (3,751) 33,225 --------- ------- -------- Operating income (15,845) 9,268 (6,577) Interest income (expense) (493) 493 - --------- ------- -------- Income (loss) before income taxes (16,338) 9,761 (6,577) Provision (benefit) for income taxes (4,958) 2,962 (1,996) --------- ------- -------- Net income (loss) ($ 11,380) $ 6,799 ($ 4,581) ========= ======= ======== Net income (loss) per common and common equivalent share: ($ 1.26) ($ 0.51) ========= ======== Weighted average common and common equivalent shares outstanding 9,043 9,043
(a) (i) Reflects decrease in revenue, costs and expenses resulting from sale of certain net assets to Fidelity; (ii) Reflects decrease in interest expense resulting from assumed repayment of borrowings; (iii) Reflects the income tax effects of the reduction in the operating loss for the period based on the Company's effective tax rate. - 6 - 7 Broadway & Seymour, Inc. Form 8-K Current Report Dated May 15, 1996 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BROADWAY & SEYMOUR, INC. 5/30/96 /s/ David A. Finley ----------------- ----------------------------------------------- Date David A. Finley, Executive Vice President and Chief Financial Officer - 7 - EX-2.1 2 ASSET PURCHASE AGREEMENT 1 EXHIBIT 2.1 ASSET PURCHASE AGREEMENT AMONG FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC., as Buyer, AND BROADWAY & SEYMOUR, INC., BANCCORP SYSTEMS, INC. HEEBINK GROUP, INCORPORATED, and NATIONAL SYSTEMS GROUP, INC., as Sellers April 10, 1996 2 TABLE OF CONTENTS 1. Defined Terms..................................................... 1 2. Acquisition of Assets by Buyer.................................... 1 2.1. Purchase and Sale of Assets.................... 1 2.2. Excluded Assets................................ 3 2.3. Assumption of Liabilities...................... 3 2.4. Liabilities Not Assumed........................ 3 2.5. Purchase Price................................. 4 2.6. Adjustment of Purchase Price................... 5 2.7. The Closing.................................... 5 2.8. Deliveries at the Closing...................... 5 2.9. Allocation of Purchase Price................... 5 3. Representations and Warranties of the Sellers..................... 6 3.1. Organization of the Sellers.................... 6 3.2. Authorization of Transaction................... 6 3.3. Noncontravention............................... 6 3.4. Brokers' Fees.................................. 7 3.5. Title to Assets................................ 7 3.6. All Assets Necessary to Conduct Business....... 7 3.7. Subsidiaries................................... 7 3.8. Financial Statements........................... 7 3.9. Absence of Changes............................. 8 3.10. Absence of Undisclosed Liabilities............. 9 3.11. Legal and Other Compliance..................... 9 3.12. Taxes.......................................... 9 3.13. Property, Plant and Equipment.................. 10 3.14. Intellectual Property.......................... 12 3.15. Contracts...................................... 15 3.15.1 General............................... 15 3.15.2 Tier One Customers.................... 15 3.15.3 Proposals............................. 15 3.16. Notes and Accounts Receivable.................. 16 3.17. Powers of Attorney............................. 16 3.18. Insurance and Risk Management.................. 16 3.19. Litigation..................................... 16 3.20. Employees...................................... 16 3.21. Employee Benefits.............................. 17 3.22. Environment, Health, and Safety................ 17 3.23. Affiliated Transactions........................ 18
-2- 3 3.24. Government Contracts........................... 19 3.25. No Illegal Payments............................ 19 3.26. Consents....................................... 19 3.27. Disclosure..................................... 19 4. Representations and Warranties of the Buyer....................... 19 4.1. Organization of the Buyer...................... 20 4.2. Authority for Agreement........................ 20 4.3. Noncontravention............................... 20 4.4. Brokers' Fees.................................. 20 5. Covenants......................................................... 20 5.1. General........................................ 20 5.2. Hart-Scott-Rodino Act.......................... 21 5.3. Notice of Developments......................... 21 5.4. Sellers' Covenants............................. 21 5.4.1. Operation of Business.................. 21 5.4.2. Preservation of Business............... 21 5.4.3. Full Access............................ 21 5.4.4. Exclusivity............................ 21 5.4.5. Employee Matters....................... 22 5.4.6. Reports................................ 22 5.4.7. Certain Information.................... 22 5.4.8. Royalty Payments....................... 23 5.5. Buyer's Covenants.............................. 23 5.5.1. Employee Matters....................... 23 5.5.2. Revenue Trailer........................ 23 5.5.3. Full Access............................ 23 5.5.4. Assurances............................. 23 6. Conditions to Obligation to Close................................. 23 6.1. Conditions to Obligation of the Buyer.......... 23 6.2. Conditions to Obligations of the Sellers....... 25 7. Covenants after the Closing....................................... 26 7.1. Mutual Non-Solicitation of Employees........... 26 7.2. Non-Competition Agreements..................... 26 7.3. Confidentiality................................ 27 8. Indemnification................................................... 27 8.1. Survival of Representations and Warranties..... 27 8.2. Indemnity by the Sellers....................... 28
-3- 4 8.3. Indemnity by Buyer............................. 28 8.4. Matters Involving Third Parties................ 28 9. Termination....................................................... 31 9.1. Termination of Agreement....................... 31 9.2. Effect of Termination.......................... 31 10. Definitions....................................................... 31 11. Miscellaneous..................................................... 38 11.1. Press Releases and Public Announcements........ 38 11.2. No Third Party Beneficiaries................... 38 11.3. Entire Agreement............................... 38 11.4. Succession and Assignment...................... 38 11.5. Counterparts................................... 39 11.6. Headings....................................... 39 11.7. Notices........................................ 39 11.8. Further Assurances; Consents................... 40 11.9. Governing Law.................................. 41 11.10. Amendments and Waivers......................... 41 11.11. Severability................................... 41 11.12. Expenses....................................... 41 11.13. Construction................................... 41 11.14. Incorporation of Exhibits and Schedules........ 41 11.15. Specific Performance........................... 42
-4- 5 EXHIBITS A - Assignment and Assumption Agreement B - [OMITTED] C - AMSG Statement D-1 - Transition Services and Support Agreement D-2 - Termination of Alliance Agreement D-3 - Temporary Professional Services Agreement E - License and Services Agreement
SCHEDULES Schedule 2.1 - (a) Furniture, fixture and leasehold improvements - (b) Leases - (c) Permits - (d) Intellectual Property - (f) Contracts - (g) Software - (h) AMSG Software Schedule 2.2 - Excluded Assets Schedule 2.3 - Assumed Liabilities Schedule 2.6 - True-up Procedures Schedule 3 - Disclosure Schedule -- Exceptions to Representations and Warranties and Tier One Customer Profile Summaries Schedule 5.5.2 - Revenue Trailer Schedule 10.1 - Master Documentation and Test Tables for Amtrust and AssetManager Schedule 10.2 - Tier One Customers
-5- 6 Schedule 10.3 - Amtrust Software Schedule 10.4 - Asset Manager Software Schedule 10.5 - Trust Processor Software
-6- 7 ASSET PURCHASE AGREEMENT This Asset Purchase Agreement (the "Agreement") is entered into on April 10, 1996 by and among FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC., a Massachusetts corporation, (the "Buyer"), and BROADWAY & SEYMOUR, INC. ("BSI"), a Delaware corporation, BANCCORP SYSTEMS, INC., a North Carolina corporation ("BancCorp"), HEEBINK GROUP, INCORPORATED, an Ohio corporation ("Heebink"), and NATIONAL SYSTEMS GROUP, INC., a North Carolina corporation doing business as Trust Systems, Inc. ("TSI"). BSI, BancCorp, Heebink and TSI are referred to collectively as the "Sellers" and the Buyer and the Sellers are referred to collectively herein as the "Parties." WHEREAS, Buyer desires to purchase from the Sellers, and the Sellers desire to sell to Buyer, upon the terms and conditions set forth herein, certain assets of BSI and the other Sellers that relate to BSI's Asset Management Services Group ("AMSG") and to the business conducted thereby, and in connection therewith the Buyer will assume certain liabilities relating to the AMSG Business (as hereinafter defined) and BSI will undertake to provide certain support services to Buyer, all as set forth herein. NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows. 1. Defined Terms. Certain capitalized terms are used herein with the meanings provided in Section 10 hereof. 2. Acquisition of Assets by Buyer. 2.1. Purchase and Sale of Assets. 2.1.1. Sellers agree to sell and transfer to the Buyer, and the Buyer agrees to purchase from Sellers at the Closing for the consideration hereinafter set forth, subject to and upon the terms and conditions contained herein, free and clear of any Lien or other encumbrance of any kind whatsoever, good and marketable title to the following properties and assets (other than the Excluded Assets) of the Sellers (collectively, the "Acquired Assets") at their present locations or such other locations as the Parties may agree: 2.1.1(a) All assets of the Sellers relating to the AMSG Business reflected on the AMSG Statement and all assets of the Sellers of the same nature as those reflected on the AMSG Statement that are acquired in the Ordinary Course of Business between March 31, 1996 and the Closing, other than any assets reflected on the AMSG Statement which have been disposed of in the Ordinary Course of Business since 8 March 31, 1996, all subject to adjustment in accordance with Schedule 2.6 (collectively, the "Balance Sheet Assets"), including without limitation: (i) all inventory and supplies relating to the AMSG Business; (ii) all accounts receivable, notes receivable and other current assets relating to the AMSG Business; and (iii) all furniture, fixtures and leasehold improvements owned by the Sellers relating to the AMSG Business, including without limitation those listed on Schedule 2.1(a); 2.1.1(b) All rights of the Sellers with respect to leasehold interests relating to the real and personal property used in the AMSG Business including without limitation those listed on Schedule 2.1(b) (the "Leases"); provided, however, that the Parties intend that a leasehold interest in the entire fourth floor of 128 South Tryon Street, Charlotte, North Carolina at the same rental rate as in BSI's current real property lease for those premises (the "New Premises") will be substituted for the space currently occupied by the AMSG Business on the sixteenth floor of that building and that a sublease of the furniture (including all partitions, cubicles, desks and chairs) presently located in the New Premises at the same rental rate as in BSI's current personal property lease for such furniture will be substituted for the comparable lease of furniture on said sixteenth floor; 2.1.1(c) All rights of the Sellers under all governmental licenses, permits, authorizations, approvals, consents and franchises used in connection with the operation of the AMSG Business or any pending applications relating to any of the foregoing, including without limitation all governmental permits, licenses, authorizations, approvals and consents described in Schedule 2.1(c); 2.1.1(d) All Intellectual Property used in the operation of the AMSG Business, including without limitation the Intellectual Property described in Schedule 2.1(d) hereto; 2.1.1(e) All customer, supplier and mailing lists relating to the AMSG Business; 2.1.1(f) All rights of the Sellers under all the contracts or agreements relating to the AMSG Business including without limitation all rights of Sellers under the contracts and agreements listed on Schedule 2.1(f) (the "Contracts"); -2- 9 2.1.1(g) All Software owned by the Sellers or licensed to the Sellers, used in the operation of the AMSG Business, including without limitation all Software listed on Schedule 2.1(g); 2.1.1(h) All AMSG Software, including without limitation that listed in Schedule 2.1(h); and 2.1.1(i) All other assets of the Sellers of every kind and description, tangible or intangible, pertaining to or used in the AMSG Business (other than the Excluded Assets). 2.2. Excluded Assets. There shall be excluded from the Acquired Assets to be sold, assigned, transferred, conveyed and delivered to Buyer hereunder, and to the extent in existence on the Closing Date there shall be retained by the Sellers, all assets, properties and rights of BSI and its Subsidiaries listed on Schedule 2.2 (collectively, the "Excluded Assets"). 2.3. Assumption of Liabilities. On the terms and subject to the conditions set forth herein, and subject to adjustment in accordance with Schedule 2.6, from and after the Closing, the Buyer will assume and satisfy or perform when due only the following Liabilities and obligations of the Sellers (the "Assumed Liabilities") including: (a) all Liabilities and obligations of the Sellers under the Leases listed in Schedule 2.1(b) to the extent they relate to the period after the Closing; (b) all Liabilities and obligations of the Sellers under the Contracts listed in Schedule 2.1(f) except to the extent inconsistent with the Sellers' representations and warranties in Section 3.15; and (c) all Liabilities and obligations of the Sellers listed on Schedule 2.3. 2.4. Liabilities Not Assumed. The Buyer will not assume or perform any Liabilities or obligations not described in Section 2.3 hereof or, without limiting the generality of the foregoing, any of the following Liabilities and obligations: (a) all Liabilities of the Sellers relating to the AMSG Business existing as of the date of the AMSG Statement (rather than in any notes thereto), including all Sellers' costs and expenses in connection with the Agreement reflected thereon; (b) all Liabilities of the Sellers relating to the AMSG Business incurred after the date of the AMSG Statement in the Ordinary Course of Business; -3- 10 (c) any Liability or obligation of the Sellers or any of the Sellers for income, franchise, transfer, sales, use and other Taxes; (d) any Liability of the Sellers for the unpaid Taxes of any Person (other than the Buyer) including Taxes imposed on the Sellers, as a transferee or successor, by contract, or otherwise; (e) any Liability of the Sellers for or in respect of any Indebtedness; (f) any Liability or obligation of the Sellers to indemnify or compensate any Person by reason of the fact that such Person was a director, officer, employee, or agent of the Sellers or was serving at the request of such entity as a partner, trustee, director, officer, employee, or agent of another entity; (g) any Liability of the Sellers for costs and expenses incurred in connection with this Agreement, the making or performance of this Agreement and the transactions contemplated hereby; (h) any Liability or obligation of BancCorp under the Federated Agreement; (i) any Liability or obligation of the Sellers to their employees for wages or benefits, profit-sharing or arising out of any Employee Benefit Plan established or maintained by the Sellers or to which the Sellers contribute or any liability or the termination of any such plan, including without limitation accrued obligations with respect to paid leave, catastrophic leave, tuition allowances, 401(k) loans and employee stock purchase plans or any other Liability of Sellers to any employees relating to compensation or bonuses; (j) any Liability or obligation of the Sellers to their contractors and consultants (except as expressly otherwise provided herein); and (k) any Liability pertaining to the Sellers or their business and arising out of or resulting from Sellers' noncompliance prior to the Closing Date with any national, regional or local laws, statutes, ordinances, rules, regulations, orders, determinations, judgments, or directives, whether legislatively, judicially or administratively promulgated (including, without limitation, any Environmental Liabilities and Costs and Safety Liabilities and Costs whether or not arising out of or resulting from the Sellers' noncompliance with Environmental Laws or Safety Laws). 2.5. Purchase Price. As consideration for the Acquired Assets, Buyer agrees to pay to the Sellers at the Closing an aggregate amount (the "Purchase Price") equal to the sum of $20,500,000, subject to adjustment as provided in Section 2.6 hereof, in cash payable by wire -4- 11 transfer to the Sellers. Written wire instructions shall be given to the Buyer by the Sellers at least two business days prior to the Closing. 2.6. Adjustment of Purchase Price. The Parties agree that at the Closing the Purchase Price shall be calculated and adjusted in accordance with the true-up procedures set forth in Schedule 2.6. 2.7. The Closing. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place at the offices of Ropes & Gray, One International Place, Boston, Massachusetts, commencing at 10:00 a.m. eastern time on May 15, 1996 or on such earlier or later date as the Parties may mutually determine, provided, however, that the Closing shall not be later than June 30, 1996 (the "Closing Date"). 2.8. Deliveries at the Closing. At the Closing, (i) the Sellers will deliver to the Buyer or its nominee the various certificates, instruments, and documents referred to in Section 6.1 below; (ii) the Sellers will execute, acknowledge (if appropriate), and deliver to the Buyer or its nominee (A) the deeds, bills of sale, licenses and other conveyances relating to the transfer of the Acquired Assets, (B) to the extent obtained prior to the Closing, assignments of the Leases and subleases (or delivery of substitute leases), Intellectual Property listed in Schedule 2.1(d) and Contracts (including Intellectual Property transfer documents), together with all required consents thereto, and (C) such other instruments of sale, transfer, conveyance, and assignment as the Buyer and its counsel may reasonably request; (iii) the Buyer will execute, acknowledge (if appropriate), and deliver the Assignment and Assumption Agreement in the form attached hereto as Exhibit A; and (iv) the Buyer will deliver the consideration specified in Section 2.5, as adjusted pursuant to Section 2.6. Delivery of the Acquired Assets shall be made at such locations as the Buyer shall designate at least ten days prior to the Closing Date. Title to the Acquired Assets shall pass at the location where delivery is made. Simultaneously with such delivery, the Sellers will use their best efforts and take all action as may be necessary to put Buyer in possession and operating control of the Acquired Assets. At any time and from time to time after the Closing, at the request of the Buyer and without further consideration, the Sellers will execute and deliver such other instruments of sale, transfer, conveyance, assignment and confirmation and take such action as Buyer may reasonably determine is necessary to transfer, convey and assign to Buyer or its nominee, and to confirm Buyer's or Buyer's nominee's title to or interest in the Acquired Assets, to put Buyer in actual possession and operating control thereof and to assist Buyer in exercising all rights with respect thereto. 2.9. Allocation of Purchase Price. The Parties agree that the allocation of the Purchase Price and Assumed Liabilities (and all other capitalized costs) for the Acquired -5- 12 Assets of the Sellers shall be determined on or before the Closing Date. The Sellers and Buyer shall use such final allocation in all Tax Returns. 3. Representations and Warranties of the Sellers. The Sellers, jointly and severally, represent and warrant to the Buyer that the statements contained in this Section 3 are correct and complete as of the date of this Agreement, except as set forth in the Schedule 3 hereto (the "Disclosure Schedule"). The Disclosure Schedule will be arranged in paragraphs corresponding to the numbered subsections contained in this Section 3. 3.1. Organization of the Sellers. BSI, BancCorp, Heebink and TSI are corporations, duly organized, validly existing, and in good standing under the laws of Delaware, North Carolina, Ohio and North Carolina, respectively. Copies of the articles or certificate of incorporation and bylaws of each of the Sellers, as amended to date, have been heretofore delivered to Buyer and are accurate and complete. BSI is qualified to do business as a foreign corporation in Massachusetts, North Carolina, Texas and every other jurisdiction in which it is required to be so qualified except for those jurisdictions where the failure to be so qualified will not have a material adverse effect on BSI and its Subsidiaries taken as a whole. Each of the other Sellers is qualified to do business as a foreign corporation in every jurisdiction in which it is required to be so qualified, except for those jurisdictions where the failure to be so qualified will not have a material adverse effect on such other Sellers. 3.2. Authorization of Transaction. Each of the Sellers has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. No approval by the stockholders of BSI of this Agreement and the transactions contemplated hereby is required by the charter or by-laws of BSI or by applicable corporate law. All corporate and other actions or proceedings to be taken by or on the part of each of the Sellers to authorize and permit the execution and delivery by it of this Agreement and the instruments required to be executed and delivered by it pursuant hereto, the performance by each of the Sellers of its obligations hereunder, and the consummation by each of the Sellers of the transactions contemplated herein, have been duly and properly taken. This Agreement has been duly executed and delivered by each of the Sellers and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms and conditions. 3.3. Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above), will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which any of BSI or its Subsidiaries is subject or any provision of the charter or by-laws of any of BSI or its Subsidiaries or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any material agreement, contract (including the Federated Agreement), lease, license, instrument, or other -6- 13 arrangement to which BSI or its Subsidiaries is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Lien upon any of its assets). None of BSI or its Subsidiaries needs to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in Section 2 above), except for the required filings under the Hart-Scott-Rodino Act, which filings will be made promptly after the date hereof. 3.4. Brokers' Fees. The Sellers have no Liability or obligation to pay any fees or commissions to any broker, finder, agent or financial advisor with respect to the transactions contemplated by this Agreement for which the Buyer could become liable or obligated. 3.5. Title to Assets. The Sellers have good and marketable title to, or a valid and subsisting leasehold interest in, and the power to sell the Acquired Assets, free and clear of all Liens and adverse claims of any kind. 3.6. All Assets Necessary to Conduct Business. Except for the Excluded Assets, the Acquired Assets comprise all of the assets, properties and rights of every type and description, real, personal, tangible and intangible, currently used by the Sellers in the conduct of the AMSG Business as currently conducted. 3.7. Subsidiaries. BSI holds of record and owns beneficially all of the outstanding shares of each of the other Sellers, free and clear of any restrictions on transfer, Taxes, Liens, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. The minute books (containing the records of meetings of stockholders, the board of directors, and any committees of the board of directors), the stock certificate books, and the stock record books of each Seller are correct and complete in all material respects. None of the Sellers is in default under or in violation of any provision of its charter or bylaws. 3.8. Financial Statements. The Sellers have heretofore delivered (and, in the case of the 1995 Financial Statements, will deliver on or before April 15, 1996) to the Buyer true, correct and complete copies of the following financial statements (collectively the "Financial Statements") audited consolidated balance sheets and statements of income, changes in stockholders' equity, and cash flow as of and for the fiscal years ended 1993, 1994 and December 31, 1995 (the latter being referred to herein as the "1995 Financial Statements") for BSI and its Subsidiaries. The Financial Statements (including, with respect to the audited financial statements only, the notes thereto) have been, and the interim financial statement referred in Section 5.4.6 will be, prepared in accordance with GAAP applied on a basis consistent with BSI's past practices throughout the periods covered thereby, present fairly the financial condition of BSI and its Subsidiaries as of such dates and the results of operations of BSI and its Subsidiaries for such periods and are consistent with the books and records of BSI and its Subsidiaries (which books and records are correct and complete in all material respects), -7- 14 except in the case of the interim financial statements for the lack of footnotes and subject to year-end adjustments which consist of normally occurring accruals which will not in the aggregate be material. Attached hereto as Exhibit C is the AMSG Statement. The AMSG Statement has been prepared on a basis consistent with the Financial Statements, fairly reflects the carrying value of the material assets used in the AMSG Business (except for the Excluded Assets), and is consistent with the books and records of BSI and its Subsidiaries. 3.9. Absence of Changes. Since December 31, 1995, there has not been any material adverse change in the business, financial condition, operations or results of operations of the AMSG Business as a segregated division or of BSI and its Subsidiaries as a whole, except as heretofore publicly disclosed. Without limiting the generality of the foregoing, since that date, except as contemplated by this Agreement: (a) none of BSI or its Subsidiaries has sold, leased, transferred or assigned any of its assets, tangible or intangible, other than for a fair consideration in the Ordinary Course of Business; (b) none of BSI or its Subsidiaries has entered into any agreement, contract, lease, or license (or series of related agreements, contracts, leases, and licenses) except in the Ordinary Course of Business; (c) no party has imposed any Lien upon any of the assets, tangible or intangible of BSI and its Subsidiaries; (d) none of BSI or its Subsidiaries has delayed or postponed the payment of accounts payable and other Liabilities outside the Ordinary Course of Business; (e) none of BSI or its Subsidiaries has granted any license or sublicense of any rights under or with respect to any Intellectual Property or the AMSG Software except in the Ordinary Course of Business; (f) none of BSI or its Subsidiaries has failed to make payment when due on its outstanding liabilities; (g) BSI has not modified or changed the application of GAAP from the manner in which it was applied in the Financial Statements; (h) there has not been any other occurrence, event, incident, action, failure to act, or transaction outside the Ordinary Course of Business involving any of BSI or its Subsidiaries; and -8- 15 (i) none of BSI or its Subsidiaries has committed to any of the foregoing; except for such transactions which individually or in the aggregate would not have a material adverse effect on BSI and its Subsidiaries taken as a whole or the Sellers. 3.10. Absence of Undisclosed Liabilities. None of BSI and its Subsidiaries has any Liability, except for (i) Liabilities set forth on the 1995 Financial Statements (including the notes thereto); (ii) Liabilities which have arisen after the date of the 1995 Financial Statements in the Ordinary Course of Business; (iii) Liabilities arising from the transactions contemplated by this Agreement; (iv) executory obligations under contracts to which BSI or any of its Subsidiaries is a party; (v) Liabilities heretofore publicly disclosed; and (vi) Liabilities which would not have a material adverse effect on the financial condition of BSI and its Subsidiaries, taken as a whole. 3.11. Legal and Other Compliance. Each of BSI, its Subsidiaries and any of their predecessors is in material compliance with all now applicable laws (including rules, regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and charges thereunder) of federal, state, local, and foreign governments (and all agencies thereof) the violation of which could have a material adverse effect on BSI, its Subsidiaries or their operations taken as a whole, and no action, suit, proceeding, hearing, demand, or notice nor, to the Knowledge of BSI and its Subsidiaries, any investigation, charge, complaint, or claim, has been filed or commenced against any of them alleging any failure so to comply. Neither the ownership nor use of BSI's and its Subsidiaries' properties nor the conduct of their business as a whole, or the AMSG Business as a separate division thereof, illegally infringes the rights of any other Person or violates, with or without the giving of notice or the passage of time or both will violate, conflict with or result in a default, right to accelerate or loss of rights under, any terms or provisions of any of their respective certificates of incorporation or by-laws or license, agreement, understanding, law, ordinance, rule or regulation, or any order, judgment or decree to which BSI or its Subsidiaries is a party or by which any of them may be bound or affected, except for such matters as would not have a material adverse effect on BSI and its Subsidiaries taken as a whole. 3.12. Taxes. (a) Each of BSI and the Subsidiaries have filed all Tax Returns that they were required to file. All such Tax Returns were correct and complete in all material respects. All Taxes owed by any of BSI and the Subsidiaries (whether or not shown on any Tax Return) have been paid. Neither BSI nor any of the Subsidiaries currently are the beneficiary of any extension of time within which to file any Tax Return. No claim has ever been made by an authority in a jurisdiction where any of BSI and the Subsidiaries does not file Tax Returns that it is or may be subject to taxation by that -9- 16 jurisdiction. There are no Liens on any of the assets of any of BSI and its Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Tax. (b) BSI and the Subsidiaries have withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party. (c) Neither BSI nor any Subsidiary expects any authority to assess any additional Taxes for any period for which Tax Returns have been filed or should have been filed. There is no dispute or claim concerning any Tax Liability of BSI or the Subsidiaries either (A) claimed or raised by any authority in writing or (B) as to which any of the BSI or its Subsidiaries has Knowledge, or should have had knowledge, based upon contact with any agent of such authority. Paragraph 3.12 of the Disclosure Schedule identifies all Tax Returns that currently are the subject of audit. (d) None of BSI and its Subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. (e) None of BSI and its Subsidiaries is a party to any Tax allocation or sharing agreement. None of BSI and its Subsidiaries has been a member of an Affiliated Group filing a consolidated federal income Tax Return (other than a group the common parent of which was BSI). Neither BSI nor any of its Subsidiaries has any Liability for the Taxes of any Person (other than BSI and its Subsidiaries) under Treas. Reg. Section 1.1502-6 (or any provision of state, local or foreign law) as a transferee or successor, by contract, or otherwise. 3.13. Property, Plant and Equipment. (a) BSI and its Subsidiaries do not own any real property used in connection with the AMSG Business. (b) Schedule 2.1(b) lists and describes all leases of real property and personal property used in connection with the AMSG Business. BSI has delivered to the Buyer correct and complete copies of such leases and subleases which have not been amended or modified since the date thereof. With respect to each lease and sublease listed in such Schedule: (i) the lease or sublease is legal, valid, binding, enforceable, and in full force and effect; -10- 17 (ii) subject to receiving any necessary consents, the lease or sublease will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above); (iii) the Sellers are not, and to their knowledge no other party to the lease or sublease, is in breach or default, and no event has occurred which, with notice or lapse of time, would constitute a breach or default or permit termination, modification, or acceleration thereunder; (iv) no party to the lease or sublease has repudiated any provision thereof; (v) there are no disputes, oral agreements, or forbearance programs in effect as to the lease or sublease; (vi) with respect to each sublease, the representations and warranties set forth in subsections (i) through (v) above are true and correct with respect to the underlying lease; (vii) none of BSI or its Subsidiaries has assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in the leasehold or subleasehold; (viii) all facilities leased or subleased thereunder have received all approvals of governmental authorities (including licenses and permits) required in connection with the operation thereof as currently operated and have been operated and maintained in all material respects in accordance with applicable laws, rules, and regulations; and (ix) all facilities leased or subleased thereunder are supplied with utilities and other services necessary for the operation of said facilities as currently operated. (c) The Sellers own or lease all machinery, equipment, and other tangible assets, necessary for the conduct of the AMSG Business as presently conducted. Each such tangible asset is free from material defects (patent and latent), has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear), and is suitable, adequate and sufficient for the purposes for which it presently is used. -11- 18 3.14. Intellectual Property; Software. (a) BSI and its Subsidiaries own or have the right to use pursuant to license, sublicense, agreement, or permission all Intellectual Property and Software necessary or desirable for the operation of the AMSG Business as presently conducted. Each such item of Intellectual Property and Software owned or used by any of BSI and its Subsidiaries in the AMSG Business immediately prior to the Closing hereunder will be owned or available for use by the Buyer on identical terms and conditions immediately subsequent to the Closing hereunder. Except as disclosed in Paragraph 3.14(a) of the Disclosure Schedule, BSI and its Subsidiaries have taken all necessary action to maintain and protect (in the United States) each item of Intellectual Property and Software that BSI and its Subsidiaries own. (b) BSI and its Subsidiaries own good and marketable title to the AMSG Software and any Intellectual Property embodied therein, free and clear of any Liens or adverse claims of any kind. Each item of AMSG Software owned by any of BSI and its Subsidiaries will be owned and available for use by the Buyer on identical terms and conditions immediately subsequent to the Closing hereunder. Except as disclosed in Paragraph 3.14(b) of the Disclosure Schedule, BSI and its Subsidiaries have taken all necessary action to maintain and protect each item of AMSG Software. (c) Except as disclosed in Paragraph 3.14(c) of the Disclosure Schedule, none of BSI and its Subsidiaries has in the conduct of the AMSG Business infringed upon misappropriated or violated any Intellectual Property rights of third parties, and none of BSI and its Subsidiaries and the directors and officers (and employees with responsibility for Intellectual Property matters) of BSI has ever received any charge, complaint, claim, demand, or notice alleging any such infringement, misappropriation, or violation (including any claim that BSI must license or refrain from using any Intellectual Property rights of any third party). To the Knowledge of any of BSI and its Subsidiaries and the directors and officers (and employees with responsibility for Intellectual Property matters) of BSI and the Subsidiaries, no third party has within the scope of the AMSG Business infringed upon, misappropriated, or violated any Intellectual Property rights of BSI and its Subsidiaries. (d) The use of the AMSG Software by the Buyer in its conduct of the AMSG Business will not violate the Intellectual Property rights of any third party. The AMSG Software is free and clear of any claim of third party infringement of any Intellectual Property right, and there are no actions proceeding, pending, or to the best knowledge of Sellers, threatened which claim that the AMSG Software, or any part thereof, infringes upon any Intellectual Property right of any third party. -12- 19 (e) Paragraph 3.14(e) of the Disclosure Schedule identifies each patent or registration which has been issued to BSI or the Subsidiaries with respect to any of BSI and its Subsidiaries' Intellectual Property and Software and AMSG Software used in the AMSG Business, identifies each pending patent application or application for registration which the Sellers have made with respect to such Intellectual Property, Software and AMSG Software, and identifies each license, agreement, or other permission which BSI and the Subsidiaries have granted to any third party with respect to such patent or registration (together with any exceptions). BSI has delivered to the Buyer correct and complete copies of all such patents, registrations, applications, licenses, agreements, and permissions (as amended to date) and has made available to the Buyer correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such item. Paragraph 3.14(e) of the Disclosure Schedule also identifies each trade name or unregistered trademark used by any of BSI and its Subsidiaries in connection with the AMSG Business. With respect to each item required to be identified in Paragraph 3.14(e) of the Disclosure Schedule: (i) except as disclosed in Paragraph 3.14(e) of the Disclosure Schedule, BSI and its Subsidiaries possesses all right, title, and interest in and to the item, free and clear of any Lien, license, or other restriction; (ii) the item is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge; (iii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the Knowledge of BSI and its Subsidiaries, is threatened, which challenges the legality, validity, enforceability, use, or ownership of the item; and (iv) none of BSI and its Subsidiaries has agreed to indemnify any Person for or against any infringement, misappropriation, or other violation with respect to the item. (f) Paragraph 3.14(f) of the Disclosure Schedule identifies each item of Intellectual Property and Software (other than Excluded Assets) that any third party owns and that BSI and its Subsidiaries use in connection with the AMSG Business pursuant to license, sublicense, agreement, or permission. BSI has delivered to the Buyer correct and complete copies of all such licenses, sublicenses, agreements, and permissions (as amended to date). With respect to each item of Intellectual Property and third party Software required to be identified in Paragraph 3.14(f) of the Disclosure Schedule: (i) the license, sublicense, agreement, or permission covering the item is legal, valid, binding, enforceable, and in full force and effect; -13- 20 (ii) the license, sublicense, agreement, or permission will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above); (iii) to the knowledge of BSI and its Subsidiaries, no party to the license, sublicense, agreement, or permission is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default or permit termination, modification, or acceleration thereunder; (iv) to the Knowledge of BSI and its Subsidiaries, no party to the license, sublicense, agreement, or permission has repudiated any provision thereof; (v) with respect to each sublicense, the representations and warranties set forth in subsections (i) through (iv) above are true and correct with respect to the underlying license; (vi) the underlying item of Intellectual Property or Software is not subject to any outstanding injunction, judgment, order, decree, ruling, or charge that would its use by Buyer as it is presently in the AMSG Business; and (vii) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to the Knowledge of the Sellers, is threatened, which challenges the legality, validity, or enforceability of the underlying item of Intellectual Property and Software. (g) To the Knowledge of any of the Sellers, BSI and the Subsidiaries will not infringe upon, misappropriate, or otherwise violate any Intellectual Property rights of third parties as a result of the continued operation of the AMSG Business as presently conducted or the continued use of any Intellectual Property or Software as presently used in the AMSG Business. (h) The AMSG Software conforms in all material respects with the Functional Specifications. (i) BSI and its Subsidiaries either developed the AMSG Software internally or acquired the AMSG Software by (i) acquisition of the former developer of such software or (ii) valid assignments. From and after the date upon which BSI and its Subsidiaries acquired any individual item of AMSG Software, BSI and its Subsidiaries have developed all proprietary modifications, enhancements, new versions and -14- 21 derivative works relating to such AMSG Software (A) through the internal efforts of employees of BSI and its Subsidiaries or (B) through the use of independent contractors or other third parties, all of whom have assigned all rights in such modifications, enhancements, new versions and derivative works to BSI and its Subsidiaries. 3.15. Contracts. Except as disclosed in Paragraph 3.15 of the Disclosure Schedule, the Contracts and Leases listed on Schedule 2.1 include all the contracts and other agreements relating to the AMSG Business to which any of BSI or its Subsidiaries is a party, except for the Excluded Assets. 3.15.1 General. BSI has delivered to the Buyer a correct and complete copy of each written agreement listed in Schedule 2.1 and Paragraph 3.15 of the Disclosure Schedule contains a written summary setting forth the terms and conditions of each oral agreement with any of the customers of the AMSG Business. Except as disclosed in Paragraph 3.15 of the Disclosure Schedule, with respect to each agreement listed in Schedule 2.1 or Paragraph 3.15 of the Disclosure Schedule: (A) there is no commitment, obligation or liability of the Sellers which does not appear on the face of such agreement; (B) the agreement is legal, valid, binding, enforceable, and in full force and effect; (C) subject to receiving necessary consents, the agreement will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above); (D) to the Knowledge of the Sellers, no party is in breach or default, and no event has occurred which with notice or lapse of time would constitute a breach or default, or permit termination, modification, or acceleration, under the agreement; (E) no party has repudiated any provision of the agreement; and (F) all Documentation with respect to each such agreement with any Tier One Customer is in compliance in all material respects with the requirements thereof. 3.15.2 Tier One Customers. The Customer Profile Summaries set forth in Paragraph 3.15 of the Disclosure Schedule together with the related Contracts contain all of the material terms, conditions, commitments and agreements of BSI and its Subsidiaries under or relating to the Contracts between BSI and its Subsidiaries and the Tier One Customers. The AMSG Software listed in Schedule 2.1(h) contains all of the Software and Documentation necessary as of the date hereof for the performance of all of the material terms, conditions, commitments and agreements of BSI and its Subsidiaries under or relating to the Contracts between BSI and its Subsidiaries and the Tier One Customers, except to the extent of any software development commitments set forth in Paragraph 3.15 of the Disclosure Schedule. 3.15.3 Proposals. Paragraph 3.15.3 of the Disclosure Schedule sets forth all current and pending proposals to current or prospective customers of the AMSG Business, correct and complete copies of which have been provided to the Buyer. All such proposals have been entered into in good faith, in the Ordinary Course of Business and on terms that are fair and equitable to the AMSG Business in the good faith opinion of the Sellers. -15- 22 3.16. Notes and Accounts Receivable. All notes and accounts receivable of BSI and its Subsidiaries related to the AMSG Business are reflected properly on its books and records in accordance with GAAP, are valid receivables, arose from bona fide transactions in the Ordinary Course of Business, subject to no setoffs or counterclaims except as recorded as a Liability and except as reflected as net of allowance for bad debts or reserve therefor on the face of the 1995 Financial Statements (rather than in any notes thereto) as adjusted for the passage of time in accordance with GAAP and past practice and custom of the Sellers. 3.17. Powers of Attorney. There are no outstanding powers of attorney executed on behalf of any of the Sellers in respect of the Acquired Assets, Assumed Liabilities or the AMSG Business. 3.18. Insurance and Risk Management. BSI and its Subsidiaries have in effect insurance policies (including policies providing property, casualty, liability, and workers' compensation coverage and bond and surety arrangements) which provide adequate coverage for all normal risks incident to their assets, properties and business operations, are in character and amount substantially similar to that carried by Persons engaged in a business subject to the same or similar risks, perils or hazards and are in compliance with the insurance requirements of the Contracts. 3.19. Litigation. Except as disclosed in Paragraph 3.19 of the Disclosure Schedule, there are no judicial or administrative actions, claims, suits, proceedings or investigations pending or, to the best of the Sellers' Knowledge, threatened against any of the Sellers, that might result in any material adverse change in the condition (financial or otherwise), properties, assets, business or operations of BSI and its Subsidiaries or the Acquired Assets or which might materially interfere with the AMSG Business or any part of the business of BSI and its Subsidiaries as currently conducted, that arise out of or in connection with the conduct or operation of BSI and its Subsidiaries or that question the validity of this Agreement or of any action taken or to be taken pursuant to or in connection with the provisions of this Agreement. There are no material judgments, orders, decrees, citations, fines or penalties heretofore assessed against BSI and its Subsidiaries currently affecting the Acquired Assets under any federal, state or local law. 3.20. Employees. Except as contemplated by this Agreement, none of the Sellers has any notice that any executive, key employee, or group of employees has any plans to terminate employment with BSI or its Subsidiaries. Paragraph 3.20 of the Disclosure Statement sets forth a list of all the employment agreements, non-competition agreements and confidentiality agreements entered into by BSI or any of its Subsidiaries with employees currently engaged in the AMSG Business. BSI and its Subsidiaries have not experienced any labor disputes or work stoppage due to labor disagreements. BSI and its Subsidiaries are in compliance in all material respects with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours and have not been and are not engaged in any -16- 23 unfair labor practice as defined in the National Labor Relations Act, as amended, the violation of which could have a material adverse effect on BSI and its Subsidiaries or their operations. There is no unfair labor practice charge or complaint against any of BSI and its Subsidiaries pending or threatened before the National Labor Relations Board. No grievance which might have an adverse affect on BSI and its Subsidiaries and their operations or prospects nor any arbitration proceeding arising out of or under any collective bargaining agreement is pending and no pending claims therefore have been made. BSI and its Subsidiaries have no collective bargaining agreement or other agreement which restricts BSI or any of its Subsidiaries from relocating, closing or subcontracting any of its operations. 3.21. Employee Benefits. The Sellers have made available to the Buyer copies of each Employee Benefit Plan relating to the AMSG Business that any of BSI and its Subsidiaries maintains or to which any of BSI and its Subsidiaries contributes relating to employees of BSI and its Subsidiaries and any other profit sharing, stock option, stock purchase, stock appreciation, deferred compensation, severance, or other material plan or arrangement for the benefit of current or former directors, officers, or employees. 3.22. Environment, Health, and Safety. (a) Except as disclosed in Paragraph 3.22 of the Disclosure Schedule: (i) BSI and its Subsidiaries are in compliance with all applicable Environmental Laws and Safety Laws the violation of which would have a material adverse effect on BSI and its Subsidiaries and their operations; (ii) BSI and its Subsidiaries have obtained, and are in material compliance with the conditions of, all Environmental Permits required for the continued conduct of the business of BSI and its Subsidiaries in the manner now conducted the lack of which or the violation of which would have a material adverse effect on BSI and its Subsidiaries and its operations; (iii) BSI and its Subsidiaries have filed all required applications, notices and other documents necessary to effect the timely renewal or issuance of all Environmental Permits required for the continued conduct of the business of BSI and its Subsidiaries in the manner now conducted the lack of which would have a material adverse effect on BSI and its Subsidiaries and its operations; (iv) none of BSI and its Subsidiaries has received within the past three years written notice indicating that BSI and its Subsidiaries, are: (a) in violation of any Environmental Law; (b) in violation of any Safety Laws; (c) responsible for the on-site or off-site storage or Release of any Chemical Substance; or, (d) liable for any Environmental Liabilities and Costs or Safety Liabilities and -17- 24 Costs which would have a material adverse effect on BSI and its Subsidiaries and its operations; (v) the Sellers have no knowledge that any of BSI and its Subsidiaries will become subject to a matter identified in subsection (iv); and, to Sellers' Knowledge, no investigation or review with respect to such matters is pending or threatened, nor has any Authority or other third-party indicated by written notice to BSI or its Subsidiaries an intention to conduct the same; (vi) No property presently leased, owned or operated by BSI and its Subsidiaries (and the area within that property) has been used by BSI and its Subsidiaries or by any other Person (including a prior owner or operator) for the storage or disposal of material quantities of Chemical Substances; (vii) There are no off-site locations, including, without limitation, commercial waste disposal facilities or municipal landfills, to which BSI or its Subsidiaries has, in the last year, disposed of or at which BSI or its Subsidiaries has, in the last year, disposed of Chemical Substances originating from BSI, its Subsidiaries, the Acquired Assets or the business of BSI and its Subsidiaries in amounts and of a type that would require a waste manifest under the Resource Conservation and Recovery Act of 1976 as now in effect for treatment, storage, disposal, reuse or recycling; and (viii) There are no underground storage tanks owned or operated at any time by BSI and its Subsidiaries and, to Sellers' Knowledge, no such tank is leaking or has leaked at any time in the past in a material manner during the period the tank was owned or operated by BSI and its Subsidiaries. (b) For purposes of this Section 3.22 only, all references to the "BSI" are intended to include any and all other entities to which BSI may be considered a successor under applicable Environmental Laws. The representations and warranties in this section are the only representations and warranties with respect to Environmental Laws or Environmental Liabilities and Costs, or Safety Laws or Safety Liabilities and Costs notwithstanding any other language in this Agreement of general applicability. 3.23. Affiliated Transactions. Except as set forth in Paragraph 3.23 of the Disclosure Schedule or as set forth in the Financial Statements (including the notes thereto), none of BSI and its Subsidiaries is a party to or bound by any material contract, commitment or understanding with any of the stockholders of BSI or any of their Affiliates and none of the BSI's stockholders and their Affiliates (other than BSI and its Subsidiaries) owns any asset, tangible or intangible, which is used in the business of any of BSI and its Subsidiaries. -18- 25 3.24. Government Contracts. Except as set forth in Paragraph 3.24 of the Disclosure Schedule, none of BSI and its Subsidiaries has been and is not a party to any contract or arrangement with any federal, state or local government agency relating to the AMSG Business. 3.25. No Illegal Payments, Etc. None of the officers, employees or agents of BSI and its Subsidiaries, has (a) directly or indirectly given or agreed to give any illegal gift, contribution, payment or similar benefit to any supplier, customer, governmental official or employee or other person who was, is or may be in a position to help or hinder any of BSI and its Subsidiaries (or assist in connection with any actual or proposed transaction) or made or agreed to make any illegal contribution, or reimbursed any illegal political gift or contribution made by any other person, to any candidate for federal, state, local or foreign public office (i) which might subject any of BSI and its Subsidiaries to any damage or penalty in any civil, criminal or governmental litigation or proceeding or (ii) the non-continuation of which has had or might have, individually or in the aggregate, a material adverse effect on any of BSI and its Subsidiaries or (b) established or maintained any unrecorded fund or asset or made any false entries on any books or records for any purpose described in clause (a) hereof. 3.26. Consents. Paragraph 3.26 of the Disclosure Schedule sets forth a true, correct and complete list of the identities of any Person whose consent or approval is required and the matter, agreement or contract to which such consent relates in connection with the transfer, assignment or conveyance by the Sellers of any of the Acquired Assets. 3.27. Disclosures. The representations and warranties contained in this Section 3 (including the Disclosure Schedule) do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Section 3 not misleading. 3.28. Fairness Opinion. The Sellers have received from Goldman, Sachs & Co. an opinion as to the fairness of the transaction as set forth in this Agreement which is in form satisfactory to the Board of Directors of BSI. 3.29. Key Employees. The Sellers have reached binding agreements, contingent only upon consummation of the Closing, with each of Messrs. Spencer, Wojcieszak, Village, Scott and Sorrell which terminate their respective employment and non-competition agreements with BSI, provide for the settlement of all compensation, benefit and earn-out rights of such individuals and provide for the release any rights such individuals may have to bar the sale of the AMSG Business or any portion thereof. 4. Representations and Warranties of the Buyer. The Buyer represents and warrants to the Sellers that the statements contained in this Section 4 are correct and complete as of the date of this Agreement. -19- 26 4.1. Organization of the Buyer. The Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation. 4.2. Authority for Agreement. The Buyer has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. All corporate and other actions and proceedings to be taken by or on the part of the Buyer to authorize and permit the execution and delivery by it of this Agreement and the instruments required to be executed and delivered by it pursuant hereto, the performance of its obligations hereunder, and the consummation by it of the transactions contemplated herein, has been duly and properly taken. This Agreement has been duly executed and delivered by the Buyer and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms and conditions. 4.3. Noncontravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby (including the assignments and assumptions referred to in Section 2 above), will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Buyer is subject or any provision of its charter or bylaws or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which the Buyer is a party or by which it is bound or to which any of its assets is subject. The Buyer does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement (including the assignments and assumptions referred to in Section 2 above), except for filings under the Hart-Scott-Rodino Act, which filings promptly after the date of this Agreement will be made. 4.4. Brokers' Fees. The Buyer has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which the Sellers could become liable or obligated for which Buyer agrees to indemnify Sellers from all such claims. 5. Covenants. Except as otherwise provided in Section 7, the Parties agree that prior to the Closing: 5.1. General. Each of the Parties will use its best efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 6 below). -20- 27 5.2. Hart-Scott-Rodino Act. Promptly after the date hereof, each of the Parties will file Notification and Report Forms and related material that may be required to be filed with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the Hart-Scott-Rodino Act, and will make any further filings pursuant thereto that may be necessary in connection therewith. 5.3. Notice of Developments. Each Party will give prompt written notice to the other Parties of any material adverse development causing a breach of any of its own representations and warranties in Section 3 and Section 4 above. No disclosure by any Party pursuant to this Section 5.3, however, shall be deemed to amend or supplement the Disclosure Schedule or to prevent or cure any misrepresentations, breach of warranty, or breach of covenant. 5.4. Sellers' Covenants. The Sellers covenant and agree with the Buyer as follows: 5.4.1. Operation of Business. Prior to the Closing, BSI will not (and will not cause or permit any of its Subsidiaries, including BancCorp, Heebink and TSI, to) engage in any practice, take any action, or enter into any transaction which affects the AMSG Business except in the Ordinary Course of Business. Without limiting the generality of the foregoing, BSI will (and will cause its Subsidiaries to) (i) use best reasonable efforts to keep available to Buyer the services of BSI and its Subsidiaries's present officers, employees, agents and independent contractors relating to the AMSG Business; (ii) use best reasonable efforts to preserve for the benefit of Buyer the goodwill of Sellers' customers, suppliers, landlords and others having business relations with it relating to the AMSG Business; or (iii) not otherwise engage in any practice, take any action, or enter into any transaction that would have a material adverse effect on the financial condition of BSI and its Subsidiaries taken as a whole. 5.4.2. Preservation of Business. BSI will (and will cause each of its Subsidiaries to) (i) use best reasonable efforts to keep its business and properties substantially intact, including its present operations, physical facilities, working conditions, and relationships with lessors, licensors, suppliers, customers, and employees, and, (ii) keep, for a period of seven years after the Closing, all of its financial books and records through the Closing, including specifically the seven fiscal years ended December 31, 1995. 5.4.3. Full Access. BSI will permit (and will cause each of its Subsidiaries to permit) representatives of the Buyer to have full access at all reasonable times, to all premises, properties, personnel, books, records (including Tax records), contracts, and documents of or pertaining to the AMSG Business and cause their personnel to cooperate as reasonably necessary with the Buyer's tax and other representatives. 5.4.4. Exclusivity. BSI will not (and BSI will not cause or permit any of its Subsidiaries to): (i) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of any capital stock or other voting securities of any of -21- 28 BancCorp, Heebink or TSI, or any substantial portion of the assets of any of the AMSG Business (including any acquisition structured as a merger, consolidation, or share exchange) or (ii) participate in any discussions or negotiations regarding, furnish any information with respect to, assist or participate in, or facilitate in any other manner any effort or attempt by any Person to do or seek any of the foregoing. BSI and its Subsidiaries will notify the Buyer promptly if any Person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing. 5.4.5. Employee Matters. Without creating any Liability which could become an obligation of the Buyer, the Sellers agree to (i) sever their relationship with all the employees utilized in the conduct of the AMSG Business immediately prior to Closing and to pay any and all Liabilities relating to their employment, including, without limitation any payments and benefits due such employees up to the Closing Date, including accrued salary, accrued vacation, wages, bonuses, sales commission, pension, retirement, savings, health, welfare and other benefits and severance payments, relocation or similar payments to such employees, (ii) provide to all such employees any notice (which notice shall be reasonably acceptable to Buyer) required under any law or regulations in respect of such termination including, without limitation COBRA, and (iii) release all such employees from any non-compete or confidentiality restraints which could affect their continued participation in the AMSG Business after the Closing. 5.4.6. Reports. BSI agrees to provide Buyer with a copy of its 1995 Annual Report on Form 10-K as soon as it is filed with the Securities and Exchange Commission and, on or before April 19, 1996, a copy of the preliminary unaudited consolidated balance sheets and statements of income, changes in stockholders' equity and cash flows of BSI and its Subsidiaries for the three months ended March 31, 1996. 5.4.7. Certain Information. During the period between the date of this Agreement and the Closing, BSI will deliver to the Buyer, within one business day after entering into the same, a true and complete copy of (1) any Contract (including, without limitation, any proposal or license) that may reasonably be expected to involve payments in excess of $100,000 over the term of such Contract or the provision of services having a value in excess of $100,000 over the term of such Contract, or the termination of which may reasonably be expected to require payments in excess of $100,000; and (2) any Contract that involves non-standard payment terms (whether as to timing, amount or otherwise). BSI will also deliver to the Buyer, every second Monday, a detailed accounts receivable aging report showing the status of all accounts receivable of the AMSG Business as of the previous Friday in form and substance reasonably satisfactory to the Buyer and, in addition, BSI will promptly inform the Buyer of (i) any material new commitments or undertakings by the Sellers which alter the Customer Profile Summaries and (ii) any additions to Schedule 3.15.3. In addition, BSI will give the Buyer reasonable notice of any change to the Disclosure Schedule which it deems material. The Sellers will also provide the Buyer prior to the Closing a list of all the -22- 29 jurisdictions where the Sellers file federal, state, local and foreign income and sales Tax Returns or with respect to which an extension has been requested with respect to the Sellers. 5.4.8. Royalty Payments. BSI and TSI agree that, if any claim is asserted at any time by any customer, including without limitation Bank of America California, against Buyer for royalties due on enhancements to the AMtrust Software provided prior to the Closing by such bank which are subsequently released to other customers or licensees, then BSI and TSI will dispose of such claim and will hold Buyer harmless against damages resulting therefrom. 5.5. Buyer's Covenants. The Buyer covenants and agrees with Seller as follows: 5.5.1. Employee Matters. The Buyer will offer employment at will to all the employees referred to in Section 5.4.5 who meet Buyer's customary employment policies and will pay sign-up bonuses in an aggregate amount of $1,000,000 to Messrs. Spencer, Wojcieszak, Village and Scott at the time they sign their respective employment agreements with the Buyer. 5.5.2. Revenue Trailer. The Buyer agrees to pay to BSI a portion of any excess Technology Revenue which may be earned by the Buyer during the period from the Closing Date through December 31, 2000 as determined in accordance with Schedule 5.5.2. 5.5.3. Full Access. The Buyer will permit representatives of the Sellers to have full access at all reasonable times to its personnel, records (including tax records) and documentation with respect to the operations of the AMSG Business prior to the Closing and will cause its personnel to cooperate as reasonably necessary with the Sellers' tax and other representatives. 5.5.4. Assurances. The Buyer has adequate financial resources to meet all its obligations hereunder. 6. Conditions to Obligation to Close. 6.1. Conditions to Obligation of the Buyer. The obligation of the Buyer to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions: (a) Representations and Warranties. All representations and warranties in Section 3 hereof shall be true and correct in all material respects at the time of the Closing with the same effect as if made at that time, subject only to changes in the Ordinary Course of Business since the date of the AMSG Statement which in the aggregate do not result -23- 30 in a material adverse change in the results of operations or the financial condition of the AMSG Business; all of the terms, conditions and covenants of this Agreement to be complied with, satisfied and performed by the Sellers at or before the Closing shall have been complied with, satisfied and performed; and a certificate to the foregoing effect dated this Closing Date and signed by the Seller shall have been delivered to the Buyer. (b) No Litigation. No action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (iii) affect materially and adversely the right of the Buyer to own the Acquired Assets or to operate the AMSG Business as formerly operated by BSI and its Subsidiaries (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect). (c) Antitrust Matters. All applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been terminated. (d) Due Diligence. The Buyer shall have completed to its satisfaction its due diligence investigation of (i) BancCorp Contracts and Tier One Customer Contracts (including verification of the Customer Profile Summaries), (ii) Intellectual Property and AMSG Software of the Sellers and (iii) the AMSG Statement. Without limiting the generality of the foregoing, all Contracts delivered (or required to be delivered) to the Buyer pursuant to Section 5.4.7 shall be reasonably satisfactory to the Buyer in form and substance. (e) Additional Agreements. The relevant parties shall have entered into agreements in substantially the form and substance set forth in Exhibits D-1 through D-3 attached hereto and such agreements shall be in full force and effect. (f) Releases and Consents. The Sellers shall have obtained (i) releases of any Liens affecting the Acquired Assets, including, without limitation, the Lien held by NationsBank, N.A., and any other Liens referred to in Paragraph 3.5 of the Disclosure Schedule, (ii) written consents from the four Tier One Customers identified in Schedule 10.2 to the assignment by the applicable Seller to Buyer of such Seller's rights and obligations under their respective Contracts with such Seller and consents to such assignments, in form and substance satisfactory to Seller in its sole discretion, from not less than five of the nine other Tier One Customers identified in Schedule 10.2, (iii) releases from the holders of any incentive payment agreements, and (iv) consents -24- 31 from the Lessors to the assignments or subleases of the Leases identified in Schedule 2.1(b). (g) Employees. The employment relationship between the Sellers and the employees, as contemplated by Section 5.4.5, shall have been concluded on terms consistent with Section 5.4.5. (h) All Necessary Actions. All actions to be taken by BSI and its Subsidiaries in connection with the consummation of the transactions contemplated hereby and all certificates, opinions, instruments and other documents, including specifically those enumerated in Section 2.8, required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Buyer. (i) Opinion. The Buyer shall have received from Robinson, Bradshaw & Hinson, PA, counsel to the Sellers, an opinion in the form and substance reasonably acceptable to the Buyer and its counsel, addressed to the Buyer, and dated as of the Closing Date. The Buyer may waive any condition specified in this Section 6.1 if it executes a written notice so stating at or prior to the Closing and such waiver shall not be considered a waiver of any other provision in this Agreement unless the writing specifically so states. 6.2. Conditions to Obligations of the Sellers. The obligation of the Sellers to consummate the transactions to be performed by them in connection with the Closing is subject to satisfaction of the following conditions: (a) Representations and Warranties. The representations and warranties of the Buyer set forth in Section 4 above shall be true and correct in all material respects at and as of the Closing Date, subject only to changes in the Ordinary Course of Business since the date of this Agreement which in the aggregate do not materially adversely affect the Buyer; all of the terms, covenants and conditions of this Agreement to be complied with, performed and satisfied by the Buyer at or before the Closing shall have been complied with, performed and satisfied; and a certificate to the foregoing effect dated the Closing Date and signed by the Buyer shall have been delivered to the Sellers; (b) Absence of Litigation. No action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement or (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect); -25- 32 (c) Antitrust Matters. All applicable waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act shall have expired or otherwise been terminated; (d) Sublicense. The Buyer and BSI shall have entered into a Sublicense Agreement substantially in the form of Exhibit E hereto. (e) Other Agreements. The conditions in clauses (e) and (f) of Section 6.1 shall have been satisfied. (f) Opinion. The Sellers shall have received from Ropes & Gray, counsel to the Buyer an opinion in the form and substance reasonably acceptable to the Sellers and their counsel, addressed to the Sellers, and dated as of the Closing Date. The Sellers may waive any condition specified in this Section 6.2 if they execute a written notice so stating at or prior to the Closing and such waiver shall not be considered a waiver of any other provision in this Agreement unless the writing specifically so states. 6.3. Satisfaction of Conditions. Without waiving any of their rights under the foregoing Sections 6.1 and 6.2 and in recognition of the fact that consummation of the transactions contemplated by this Agreement at the earliest date reasonably practicable is the desired goal of each of the Parties, the Parties agree that they will cooperate in good faith to seek and achieve mutually acceptable accommodations to any obstacles to the satisfaction of the conditions precedent enumerated in this Section 6, including, if necessary, the designation of a pledgeholder, nominee trust or other vehicle to hold any rights (other than those specified in Section 6.1(f)(ii)) which may not be transferable from the Sellers to the Buyer at the Closing. Notwithstanding the foregoing, each Party acknowledges that economic, business and legal interests of each other Party may reasonably require that it enforce any of its rights under Sections 6.1 or 6.2 or elsewhere in this Agreement. 7. Covenants after the Closing. In addition to the covenants in Sections 5.4.2, 5.4.3, 5.4.8 and 5.5 which remain in effect after the Closing, the Parties agree as follows with respect to this period following the Closing: 7.1. Mutual Non-Solicitation of Employees. The Sellers and the Buyer mutually covenant and agree that, for a period of one year after the Closing, neither Party will directly or indirectly without the written consent of the other Party, recruit, offer employment, employ (including employment as a consultant), lure or entice away any of the individuals employed by the other Party in Charlotte, North Carolina, or otherwise to induce such individuals to leave the employ of the other Party. 7.2. Non-Competition Agreements. The Sellers agree with the Buyer that on and after the Closing Date (i) each of the individuals who was an employee of the AMSG Business -26- 33 immediately prior to the Closing and who is thereafter offered employment by the Buyer in accordance with Section 5.5.1 hereof shall be, without further act of the Sellers, fully and forever released from the non-competition and confidentiality agreements which he or she had with any of the Sellers and (ii) that the Sellers will neither assert against any such individual any claim for damages or specific performance with respect to such agreements nor assert any claim for damages or interference against the Buyer or its Affiliates as a result of employing any such individual. The Sellers hereby assign to the Buyer all non-compete and confidentiality agreements still in effect which they have with former employees of the AMSG Business to the extent permitted by such agreements. 7.3. Confidentiality. Each of the Parties will treat and hold as such all of the Confidential Information of the other Parties, refrain from using any of the Confidential Information except in connection with this Agreement, and deliver promptly to the Party to which it relates or destroy, at the request and option of such Party, all tangible embodiments (and all copies) of the Confidential Information which are in its possession. In the event that any of the Parties is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information of any other Party, such Party will notify the other Party promptly of the request or requirement so that the other Party may seek an appropriate protective order or waive compliance with the provisions of this Section 7.3. If, in the absence of a protective order or the receipt of a waiver hereunder, any of the Parties is, on the advice of counsel, compelled to disclose Confidential Information of any other Party, to any tribunal or else stand liable for contempt, such Party may disclose the Confidential Information to the tribunal; provided, however, that the disclosing Party shall use its best efforts to obtain, at the request of the other Party, an order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed as the other Party shall designate. Notwithstanding the foregoing, BSI and its Subsidiaries may, after the Closing, utilize in their continuing business operations any Confidential Information relating to the AMSG Business which was in its possession prior to the Closing. 8. Indemnification. 8.1. Survival of Representations and Warranties. All of the representations and warranties of the Sellers and the Buyers contained herein or in any document, certificate or other instrument required to be delivered hereunder shall survive the Closing and continue in full force and effect, subject to Section 8.5(b) and to any applicable statutes of limitations. All covenants and indemnities of any Party in this Agreement or in any document or certificate delivered hereunder shall, unless otherwise specifically provided therein, remain in full force and effect forever. The rights of indemnification set forth in this Section 8 are the exclusive -27- 34 remedy of any of the Parties with respect to any of the matters within the scope of this Section 8. 8.2. Indemnity by the Sellers. The Sellers hereby agree to indemnify, defend and hold harmless Buyer and its directors, officers and Affiliates against and in respect of all Liabilities, obligations, judgments, Liens, injunctions, charges, orders, decrees, rulings, damages, dues, assessments, Taxes, losses, fines, penalties, expenses, fees, costs or amounts paid in settlement (including reasonable attorneys' and expert witness fees and disbursements in connection with investigating, defending or settling any action or threatened action), arising out of any claim, damages, complaint, demand, cause of action, audit, investigation, hearing, action, suit or other proceeding asserted or initiated or otherwise existing in respect of any matter (a "Loss" or collectively, the "Losses") that results from: (a) the breach of any representation, warranty or covenant made by the Sellers herein, or resulting from any misrepresentation or breach of warranty or from any misrepresentation in or omission from any Schedule or certificate required to be furnished by Sellers hereunder; and (b) any Liability of the Sellers which is not an Assumed Liability (including any Liability of the Sellers that becomes a Liability of the Buyer under any bulk transfer law of any jurisdiction, under any common law doctrine of de facto merger or successor liability, or otherwise by operation of law). 8.3. Indemnity by Buyer. Buyer hereby agrees to indemnify, defend and hold harmless Sellers and their respective directors, officers and Affiliates against and in respect of all Losses arising out of any claim, complaint, demand, cause of action, audit, investigation, hearing, action, suit or other proceeding asserted or initiated in respect of any matter that results from the inaccuracy of any representation or warranty made by Buyer herein, or resulting from any misrepresentation, breach of warranty or nonfulfillment of any agreement or covenant of Buyer, including Buyer's agreement to assume certain Liabilities of BSI and its Subsidiaries pursuant to Section 2.3 of this Agreement, contained herein or in any agreement or instrument required to be entered into in connection herewith or from any misrepresentation in or omission from any schedule, document, certificate or other instrument required to be furnished by Buyer hereunder. 8.4. Matters Involving Third Parties. (a) If any third party shall notify any Party (the "Indemnified Party") with respect to any matter (a "Third Party Claim") which may give rise to a claim for indemnification against any other Party (the "Indemnifying Party") under this Section 8, then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying any -28- 35 Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced. (b) Any Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified Party in writing within 15 days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any Losses within the scope of Section 8.2(a) or (b) or Section 8.3, respectively, the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim, (B) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (C) the Third Party Claim involves only money damages and does not involve an injunction or other equitable relief which, in the reasonable opinion of the Indemnified Party, materially affects its business and (D) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently. (c) So long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 8.4(b) above, (A) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, (B) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not unreasonably be withheld), and (C) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim unless written agreement is obtained releasing the Indemnified Party from all liability thereunder. (d) In the event any of the conditions in Section 8.4(b) above is or becomes unsatisfied, however, (A) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it may deem appropriate (provided that the Indemnified Party shall consult with and obtain the consent (which shall not be unreasonably withheld), of any Indemnifying Party in connection therewith), (B) the Indemnifying Parties will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys' fees and expenses), and (C) the Indemnifying Parties will remain responsible for any Losses the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this Section 8. In the event the Indemnified Party assumes control of the defense of any Third Party claim as herein -29- 36 provided, the Indemnifying Party may nevertheless retain separate counsel at its sole cost and expense to participate in the defense thereof and to consult with counsel for the Indemnified Party with respect to conduct of the defense and to considerations relating to entry of judgment or settlement. (e) In the event of a Third Party Claim arises out of a breach of warranty or contract claim against the Sellers with respect to any Contract assumed by the Buyer under the Agreement and the Sellers elect to resolve such claim by providing remedial services, then at the request of the Sellers the Buyer agrees to provide the services requested on its usual and customary terms and conditions, at the Sellers' sole expense. 8.5. Limitations on Indemnification. (e) Monetary Limits. Except with respect to (i) Losses arising out of representations or warranties contained in Section 3.14 or any Schedule referred to in such Section, (ii) Losses arising out of Excluded Liabilities, (iii) Losses of the type referred to in Section 8.4(e), and (iv) Losses based upon fraud or which arise out of or are attributable to acts or omissions taken or made prior to the Closing in connection with the AMSG Business that constitutes willful misconduct or malfeasance, gross negligence or criminal conduct, the Sellers as Indemnifying Parties shall have no obligations to indemnify the Buyer in respect of any Loss of a type identified in Sections 8.2 and 8.4 incurred by the Buyer unless the aggregate cumulative total of all such Losses exceeds $250,000, whereupon the Buyer shall be entitled to indemnification for each additional amount of such Losses described above; provided, that the Sellers' indemnity obligations under this Section 8.5 shall be joint and several; and provided, further, that in no event shall the aggregate indemnity obligation of the Sellers exceed the Purchase Price. With respect to claims referred to in clauses (i), (ii) and (iii) of this Section 8.5(a), the $250,000 cumulative deductible shall not apply. The Buyer as Indemnifying Party shall have no obligation to indemnify the Sellers in respect of any Loss of a type identified in Sections 8.3 and 8.4 incurred by the Sellers unless the aggregate cumulative total of all such Losses exceeds $250,000, whereupon the Sellers shall be entitled to indemnification for each additional amount of such Losses. With respect to claims arising from Assumed Liabilities, the $250,000 cumulative deductible shall not apply. (b) Time Limitation. Except for claims asserted by the Buyer for Losses related to unpaid Taxes of the Sellers or their predecessors and Losses referred to in clause (i) of Section 8.5(a), no claim may be made or suit instituted under any provision of this Section 8 following the second anniversary of the Closing Date. -30- 37 9. Termination. 9.1. Termination of Agreement. Certain of the Parties may terminate this Agreement as provided below: (a) the Parties may terminate this Agreement by mutual written consent at any time prior to the Closing; (b) the Buyer may terminate this Agreement by giving written notice to the Sellers at any time prior to the Closing (A) in the event the Sellers have breached any representation, warranty, or covenant contained in this Agreement in any material respect, the Buyer has notified the Sellers of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (B) if the Closing shall not have occurred on or before June 30, 1996, by reason of the failure of any condition precedent under Section 6.1 hereof (unless the failure results primarily from the Buyer itself breaching any representation, warranty, or covenant contained in this Agreement); and (c) the Sellers may terminate this Agreement by giving written notice to the Buyer at any time prior to the Closing (A) in the event the Buyer has breached any representation, warranty, or covenant contained in this Agreement in any material respect, BSI and its Subsidiaries has notified the Buyer of the breach, and the breach has continued without cure for a period of 30 days after the notice of breach or (B) if the Closing shall not have occurred on or before June 30, 1996, by reason of the failure of any condition precedent under Section 6.2 hereof (unless the failure results primarily from BSI and its Subsidiaries itself breaching any representation, warranty, or covenant contained in this Agreement). 9.2. Effect of Termination. If any Party terminates this Agreement pursuant to Section 9.1 above, all rights and obligations of the Parties hereunder shall terminate without any Liability of any Party to any other Party (except for obligations under Section 7.3) and any Liability of any Party then in breach. 10. Definitions. "Acquired Assets" shall have the meaning set forth in Section 2.1. "Affiliate" has the meaning set forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange Act. "Affiliated Group" means any affiliated group within the meaning of Code Section 1504(a) or any similar group defined under a similar provision of state, local, or foreign law. -31- 38 "Agreement" means this Agreement, including all Schedules and Exhibits, as the same may be amended from to time to time. "AMSG Business" means the licensing of AMSG Software to users (in the trust and investment markets) and the provision to such users of services related to the AMSG Software, including installation, conversion, consulting, product integration, customization, maintenance and enhancements, support and the operation of the AMSG Software in a service bureau environment. "AMSG Statement" means the schedule of assets and liabilities of the AMSG Business as a separate division (as distinct from the consolidated figures for BSI and its Subsidiaries as a whole) as of March 31, 1996 prepared by the Sellers, together with detailed itemization and appropriate aging of the accounts receivable listed. Such schedule does not reflect shared assets or related Liabilities. "AMSG Software" means the TrustProcessor Software, the AMtrust Software and the Asset Manager Software. "AMtrust Software" means the AMtrust base system developed by TSI, including each subsystem and part thereof, and all proprietary subsequent enhancements, modifications and improvements thereto, up to and including version 9.0 or the latest version, including without limitation all related Documentation, whether in source code, object code or human readable form, as further described in Schedule 10.3. "Asset Manager Software" means the suite of client/server products developed by BSI, designed to run on workstations either in connection with the Amtrust Software, AMpreferred or in a stand alone environment, including each subsystem and part thereof, and all proprietary enhancements, modifications and improvements through the most recent version available, including all related Documentation and materials, whether in source code, object code or human readable form, as further described in Schedule 10.4. "Assumed Liabilities" shall have the meaning in Section 2.3. "Buyer" has the meaning set forth in the preamble above. "Cash" means cash and cash equivalents (including marketable securities and short term investments) calculated in accordance with GAAP applied on a basis consistent with the preparation of the Financial Statements. "Chemical Substance" means any chemical substance, including but not limited to any: (i) pollutant, contaminant, irritant, chemical, raw material, intermediate, product, by-product, slag, construction debris; (ii) industrial, solid, liquid or gaseous toxic or hazardous substance, material or waste, (iii) petroleum or any fraction thereof; (iv) asbestos or asbestos-containing -32- 39 material; (v) polychlorinated biphenyl; (vi) chlorofluoracarbons; and, (vii) any other substance, material or waste, which is regulated under any Environmental Law or Safety Law, as now and hereinafter in effect, or other comparable laws. "Closing" has the meaning set forth in Section 2.7. "Closing AMSG Statement" means a schedule of the assets and liabilities of the AMSG Business as of the close of business on the day immediately preceding the Closing Date, prepared on a basis consistent with the AMSG Statement. "Closing Date" has the meaning set forth in Section 2.7. "Code" means the Internal Revenue Code of 1986, as amended. "Confidential Information" means any and all information concerning the businesses and affairs of any of the Parties that is not already generally or readily obtainable by the public, including without limitation all such information contained in the Disclosure Schedule or otherwise disclosed in connection with this Agreement. "Confidential Information" shall not include information that is or becomes publicly known or is otherwise lawfully acquired by any Party through no breach of this Agreement or which any Party had in its possession prior to its disclosure by another Party. "Contracts" has the meaning set forth in Section 2.1.1(f). "Controlled Group of Corporations" has the meaning set forth in Code Section 1563. "Copyrights" means United States and foreign copyrights, whether registered or unregistered, and pending applications to register the same. "Customer Profile Summary" means summaries of the contractual arrangements with each of the fifteen (15) Tier One Customers which are incorporated in Paragraph 3.15 of the Disclosure Schedule. "Deferred Intercompany Transaction" has the meaning set forth in Treas. Reg. Section 1.1502-13. "Disclosure Schedule" has the meaning set forth in Section 3. "Documentation" means all written, graphic and electronic materials currently in BSI and its Subsidiaries' possession that describe the structure, function or use of the AMSG Software, including all specifications, system documentation and user manuals. -33- 40 "Employee Benefit Plan" means any (a) nonqualified deferred compensation or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b) qualified defined contribution retirement plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or arrangement which is an Employee Pension Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe benefit plan or program. "Employee Pension Benefit Plan" has the meaning set forth in ERISA Section 3(2). "Employee Welfare Benefit Plan" has the meaning set forth in ERISA Section 3(1). "Environment" means real property and any improvements thereon, and also includes, but is not limited to, ambient air, surface water, drinking water, groundwater, land surface, subsurface strata and water body sediments. "Environmental Laws" mean any federal, state, local and foreign law, regulation or legal requirement relating to pollution, or protection or cleanup of the Environment, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Resource Conservation and Recovery Act of 1976, as amended, the Clean Air Act, as amended, the Clean Water Act, as amended, and any other law or legal requirement, as now in effect (including rules, regulations, codes, plans, injunctions, judgments, order, decrees, rulings and charges thereunder), relating to: (a) the Release, containment, removal, remediation, response, cleanup or abatement of any sort of any Chemical Substance; (b) the manufacture, generation, formulation, processing, labeling, distribution, introduction into commerce, use, treatment, handling, storage, recycling, disposal or transportation of any Chemical Substance; (c) exposure of persons, including employees, to any Chemical Substance; or, (d) the physical structure, use or condition of a building, facility, fixture or other structure, including, without limitation, those relating to the management, use, storage, disposal, cleanup or removal of asbestos, asbestos-containing materials, polychlorinated biphenyls or any other Chemical Substance. "Environmental Liabilities and Costs" means all Losses incurred: (i) that are required by a governmental agency or third party in order to comply with any Environmental Law; (ii) that are required by a governmental agency or third party as a result of a Release of any Chemical Substance; or, (iii) that are required by a governmental agency or third party as a result of any environmental conditions present at, created by or arising out of the past or present operations of Sellers through the Closing Date or of any prior owner or operator of a facility or site at which Sellers now operate or have previously operated. "Environmental Permit" means any Permit or authorization from any governmental authority required under, issued pursuant to, or authorized by any Environmental Law. -34- 41 "Excluded Assets" has the meaning set forth in Section 2.2 below. "Extremely Hazardous Substance" has the meaning set forth in Section 302 of the Emergency Planning and Community Right-to-Know Act of 1986, as amended. "Federated Agreement" means the Agreement, dated as of June 1, 1994, among BancCorp, Federated Administrative Services, Inc., Federated Administrative Services and Federated Securities Corp. "Fiduciary" has the meaning set forth in ERISA Section 3(21). "Functional Specifications" means the functional specifications with respect to the AMSG Software set forth in the most current version of the user documentation, either written or on line, including all materials outlined in Schedule 10.1. "GAAP" means United States generally accepted accounting principles as in effect from time to time. "Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "Indebtedness" has the meaning set forth in Section 3.9. "Indemnified Party" has the meaning set forth in Section 8.4. "Indemnifying Party" has the meaning set forth in Section 8.4. "Intellectual Property" means Patent Rights, Copyrights, Trademarks, Trade Secrets and proprietary information. "Knowledge" means as to any Party actual knowledge of the executive officers of such Party after reasonable investigation and, with respect to Section 3.12, the individual with primary responsibility for tax matters. "Leases" has the meaning set forth in Section 2.1.1(b). "Liability" means any Liability or obligation (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether incurred or consequential and whether due or to become due), including any liability for Taxes. -35- 42 "Lien" means any mortgage, pledge, lien, charge, claim, equity, encumbrance, restriction on transfer, conditional sale or other title retention device or arrangement (including, without limitation, a capital lease), transfer for the purpose of subjection to the payment of any Indebtedness, or restriction on the creation of any of the foregoing, whether relating to any property or right or the income or profits therefrom; provided, however, that the term "Lien" shall not include (i) statutory liens for Taxes to the extent that the payment thereof is not in arrears or otherwise due or to the extent the taxpayer is contesting in good faith through appropriate proceedings, (ii) encumbrances in the nature of zoning restrictions, easements, rights or restrictions of record on the uses of real property if the same do not detract from the value of the property encumbered thereby or impair the use of such property in the business of BSI and its Subsidiaries as currently conducted, (iii) statutory or common law liens to secure landlords, lessors or renters under leases or rental agreements confined to the premises rented to the extent that no payment or performance under any such lease or rental agreement is in arrears or is otherwise due, (iv) deposits or pledges made in connection with, or to secure payment of, worker's compensation, unemployment insurance, old age pension programs mandated under applicable laws or other social security regulations and (v) statutory or common law liens in favor of carriers, warehousemen, mechanics and materialmen, statutory or common law liens to secure claims for labor, materials or supplies and other like liens, which secure obligations to the extent that payment thereof is not in arrears or otherwise due. "Loss" or "Losses" has the meaning set forth in Section 8.2. "New Premises" has the meaning set forth in Section 2.1.1(b). "Ordinary Course of Business" means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency). "Parties" has the meaning set forth in the preamble above. "Patent Rights" means United States and foreign patents, patent applications, continuations, continuations-in-part, divisions, reissues, patent disclosures, inventions (whether or not patentable) or improvements thereto. "Person" means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof). "Purchase Price" has the meaning set forth in Section 2.5. "Release" means any actual, threatened or alleged spilling, leaking, pumping, pouring, emitting, dispersing, emptying, discharging, injecting, escaping, leaching, dumping, or disposing of any Chemical Substance into the Environment that may cause an Environmental Liability and -36- 43 Cost (including the abandonment or discarding of barrels, containers, tanks or other receptacles containing or previously containing any Chemical Substance). "Safety Laws" means any federal, state, local and foreign law, regulation or legal requirement relating to health or safety, including the Occupational Safety and Health Act, as amended, as now in effect relating to (a) exposure of employees to any Chemical Substance or (b) the physical structure, use or condition of a building, facility, fixture or other structure, including, without limitation, those relating to equipment or manufacturing processes, or the management, use, storage, disposal, cleanup or removal of any Chemical Substance. "Safety Liabilities and Costs" means all Losses incurred to comply with any Safety Law or as a result of any health or safety conditions present at, created by or arising out of the past or present operations of BSI and its Subsidiaries through the Closing Date. "Securities Act" means the Securities Act of 1933, as amended. "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended. "Software" means computer software programs and software systems (other than the AMSG Software and the Excluded Assets), used in the AMSG Business as presently conducted. "Subsidiary" means any corporation with respect to which a specified Person (or a Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors. "Tax" or "Taxes" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Section 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar, including FICA), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. "Tax Return" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. "Tier One Customers" means the institutions listed in Schedule 10. "Trademarks" means United States and foreign trademarks, service marks, trade dress, trade names and logos, whether registered or unregistered, and pending applications to register -37- 44 the foregoing, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith. "Trade Secrets" means confidential ideas, trade secrets, know-how, concepts, methods, processes, formulas, reports, data, customer lists, mailing lists, business plans, or other proprietary information. "TrustProcessor Software" means the current version of the trust accounting software system owned by BancCorp known as "TrustProcessor", including each subsystem and part thereof, and all proprietary enhancements, modifications and improvements through the most recent version available, and all related Documentation, whether in source code, object code or human readable form, as further described in Schedule 10.5. 11. Miscellaneous. 11.1. Press Releases and Public Announcements. No Party shall issue any press release or make any public announcement relating to the subject matter of this Agreement prior to the Closing without the prior written approval of the other Party; provided, however, that any Party may make any public disclosure it believes in good faith, based on the opinion of its counsel, is required by applicable law or any listing or trading agreement concerning its publicly-traded securities (in which case the disclosing Party will use its best efforts to advise the other Party prior to making the disclosure). 11.2. No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns, except for the release and discharge in Section 7.2 which is intended to benefit the identified AMSG employees. 11.3. Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement between the Parties and supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, to the extent they related in any way to the subject matter hereof. 11.4. Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other Party and any such attempted assignment shall be null and void; provided, however, that the Buyer may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (ii) designate one or more of its Affiliates to perform its obligations hereunder, provided that such assignment shall not release the Buyer from its obligations. -38- 45 11.5. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 11.6. Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 11.7. Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) upon confirmation of facsimile, (ii) when sent by overnight delivery and (iii) when mailed by registered or certified mail return receipt requested and postage prepaid at the following address: If to the Sellers: Broadway & Seymour, Inc. 128 South Tryon Street Charlotte, North Carolina 28202 Attention: General Counsel Telecopy: (704) 344-3542 Copy to: Robinson, Bradshaw & Hinson, PA One Independence Center 101 North Tryon Street, Suite 1900 Charlotte, North Carolina 28246-1900 Attention: Robert Bryan, Esq. Telecopy: (704) 378-4000 If to the Buyer: Fidelity Investments Institutional Services Company, Inc. Fidelity Systems Company 82 Devonshire Street Boston, MA 02109 Attention: Jay Freedman Telecopy: (617) 476-0932 -39- 46 Copy to: Ropes & Gray One International Place Boston, MA 02110 Attention: John A. Ritsher Telecopy: (617) 951-7050 Any Party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Party notice in the manner herein set forth. 11.8. Further Assurances; Consents. From time to time, at the Buyer's request and without further consideration, the Sellers will execute and deliver, or cause to be executed and delivered, such other instruments of conveyance and transfer and take such other actions, or cause such other actions to be taken, as the Buyer may reasonably deem necessary or desirable more effectively to convey and transfer to, and vest in, the Buyer the property to be transferred hereunder and to effectuate the purposes of this Agreement. To the extent that any transfers contemplated by this Agreement shall not have been consummated on or prior to the closing date, the parties shall cooperate to effect such transfers as promptly following the closing date as shall be practicable. Nothing herein or in any deeds, endorsements, assignments, or other instruments of conveyance executed hereunder shall be deemed to require the transfer of any assets or the assumption of any liabilities which by their terms or operation of law cannot be transferred or assumed without necessary consents or approvals; provided, however, that the Sellers and Buyer shall cooperate to seek to obtain any such consents or approvals necessary for the transfer and assumption contemplated by this Agreement. In the event that any such transfer of assets or liabilities has not been consummated by the closing date, Sellers shall thereafter hold such asset in trust for the use and benefit of the Buyer (at the expense of the Buyer) or retain such liability for the account of the Buyer, such that, insofar as reasonably possible, the Parties shall be placed in the same position as would have existed had such asset or liability been transferred or assumed on the closing date as contemplated hereby. Neither party shall be liable to the other party for any delay in making any transfer contemplated by this Agreement or any failure to obtain any consent or approval required in connection with any such transfer (or the termination of any contract, permit, or lease as a result of such failure), provided that such delay, failure or termination was not the result of gross negligence or willful misconduct by the party causing such result. -40- 47 11.9. Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the Commonwealth of Massachusetts without giving effect to any choice or conflict of law provision or rule (whether of the Commonwealth of Massachusetts or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Massachusetts. 11.10. Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Buyer and the Sellers. No waiver by any Party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence. 11.11. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. 11.12. Expenses. Unless otherwise expressly provided herein, each of the Buyer and the Sellers will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. 11.13. Construction. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. Nothing in the Disclosure Schedule shall be deemed adequate to disclose an exception to a representation or warranty made herein unless the Disclosure Schedule identifies the exception with particularity sufficient to provide reasonable notice of the matter being disclosed. The Parties intend that each representation, warranty, and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty, or covenant. 11.14. Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof. -41- 48 11.15. Specific Performance. Each of the Parties acknowledges and agrees that the other Party would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties agrees that the other Party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action instituted in any court of the United States or any state thereof having jurisdiction over the Parties and the matter in addition to any other remedy to which it may be entitled, at law or in equity. -42- 49 ***** IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date first above written. FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC. By: _________________________________________ Title: President BROADWAY & SEYMOUR, INC. By: __________________________________________ Title: President BANCCORP SYSTEMS, INC. By: __________________________________________ Title: Vice President HEEBINK GROUP, INCORPORATED By: __________________________________________ Title: Vice President NATIONAL SYSTEMS GROUP, INC. By: __________________________________________ Title: Vice President -43- EX-2.1A 3 AMENDMENT NO 1 TO ASSET PURCHASE AGREEMENT 1 EXHIBIT 2.1A AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT This AMENDMENT NO. 1, dated May 15, 1996, to the Asset Purchase Agreement, dated April 10, 1996 (the "Purchase Agreement"), among Fidelity Investments Institutional Services Company, Inc., as Buyer, and Broadway & Seymour, Inc., BancCorp Systems, Inc., Heebink Group, Incorporated and National Systems Group, Inc., as Sellers. WHEREAS, the parties hereto, being the parties to the Purchase Agreement, desire in connection with the Closing under the Purchase Agreement, to correct certain errors in the Purchase Agreement and to provide for the assignment of the Buyer's rights, interests and obligations under the Purchase Agreement to Fidelity Asset Management Services, LLC. Certain terms defined in the original Purchase Agreement are used herein with the meanings there provided. NOW, THEREFORE, in consideration of the premises and the mutual premises contained, the Parties agree as follows: 1. Corrections to Purchase Agreement. The following sections of the Purchase Agreement are being modified as follows: 1.1. Sections 2.4(a) and 2.4(b) are each amended by inserting "(other than those referenced in Section 2.3)" after the word "Liabilities". 1.2. Section 2.4(i) is amended by changing the third "or" in line 3 to "for". 1.3. Section 3.1 is amended by deleting the reference to "Massachusetts" in the sixth line thereof 1.4. Section 3.14(a) is amended by deleting the words "or desirable" from the first sentence thereof. 1.5. Section 3.14(f)(vi) is amended to change the final clause to read: "that would preclude its use by Buyer as it is presently used in the AMSG Business." 1.6. Section 6.1(f) is amended to change "satisfactory to Seller" to "satisfactory to Buyer". 1.7. Section 7 is amended to change the reference to "Section 5.4.2" to Section 5.4.2(ii)". 1.8. Section 8.3 is amended to change the final clause to read: 2 "including Buyer's agreement to assume certain Liabilities of BSI and its Subsidiaries pursuant to Section 2.3 of this Agreement, contained herein or from any misrepresentations in or omission from any Schedules or certificates required to be furnished by Buyer hereunder." 1.9. Schedule 2.1(b) is amended by deleting the text of item 18 of such Schedule and inserting in lieu thereof the following, "Intentionally left blank". 1.10. Schedule 2.1(d) is amended by deleting the list of "Tradenames" and inserting in lieu thereof the following: "Tradenames 1. BancCorp 2. Trust Systems, Inc. Common Law Trademarks 1. AMpreferred 2. Asset Manager 3. Trust Processor 4. Trust Processor International 5. Preneed Processor" Schedule 2.1(d) is further amended by adding a new list called "Copyrights (registered)" naming the copyrights listed on Attachment A. 1.11. Schedule 2.1(f) is hereby amended by: (a) adding the following contracts under the heading "Customer Contracts" of such Schedule: 35a.* License Agreement for AMtrust System between TSI, executed by PNC on January 31, 1994 and by TSI on March 11, 1994, as amended by the Addendum thereto executed by PNC on March 24, 1994. 35b.* Maintenance Agreement between PNC and TSI dated November 13, 1984 (as amended by the Consent and Assignment Agreement dated as of January 28, 1994). -2- 3 35c.* License Agreement for AMtrust System between TSI and First Tennessee Bank National Association, executed by First Tennessee Bank on January 28, 1994 and by TSI on March 11, 1994. 35d.* Maintenance Agreement between First Tennessee Bank and TSI dated November 13, 1984 (as amended by the Consent and Assignment Agreement dated as of January 28, 1994). 35e.* License Agreement for AMtrust System between TSI and NationsBank, executed by NationsBank on January 31, 1994 and by TSI on March 11, 1994, as amended by the Addendum thereto executed by NationsBank on March 17, 1994. 35f.* Maintenance Agreement between NationsBank and TSI dated November 13, 1984 (as amended by the Consent and Assignment Agreement dated as of January 28, 1994). 35g.* License Agreement for AMtrust System between National Systems Group, Inc., doing business as Trust Systems, Inc. and First Fidelity Bank, N.A., executed by First Fidelity on January 31, 1994 and by TSI on March 11, 1994, as amended by the Addendum thereto executed by First Fidelity on April 25, 1994; and (b) adding a contract under a new section at the end of such Schedule as follows: "Other Contracts:" 57. Furniture purchase contract relating to the Las Colinas facility between BSI and Las Colinas Executive Suites pursuant to the letter agreement dated March 12, 1996. 1.12. Schedule 2.2 is amended by adding the following item: 36. All other contracts listed on Schedule A to the Temporary Professional Services Agreement. 1.13. Schedule 2.3 is amended by deleting item (2) thereof. 1.14. Attachment 2.1(h) and Schedules 10.3, 10.4 and 10.5 are hereby deleted in their entirety and the attached revisions, dated May 14,1996 of Attachment 2.1(h) and Schedules 10.3, 10.4 and 10.5 are inserted in lieu thereof. -3- 4 1.15. Paragraph 3.3 of Schedule 3 is hereby amended by adding the following item: (7) Potential conflicts with provisions of Contracts the assignment of which has not yet been consummated, or with Excluded Assets. 1.16. The text of Schedule 10.6 is hereby incorporated as a final section of Schedule 10.3 and Schedule 10.6 is deleted. 2. Assignment by Buyer In implementation of the proviso in Section 11.4 of the Purchase Agreement, Buyer hereby assigns to Fidelity Asset Management Services, LLC, and Fidelity Asset Management Services, LLC hereby agrees to assume and perform, all of Buyer's rights, interests and obligations under the Purchase Agreement, as amended by this Amendment No. 1., except for the rights (and related obligations) with respect to certain leases and other agreements which will be assigned to the Buyer at the Closing. -4- 5 IN WITNESS WHEREOF, the Parties hereto have executed this Amendment No. 1 on the date first above written. FIDELITY INVESTMENTS INSTITUTIONAL SERVICES COMPANY, INC. By: /s/ Paul J. Hondros ---------------------------- Title: BROADWAY & SEYMOUR, INC. By: /s/ Alan C. Stanford ---------------------------- Title: BANCCORP SYSTEMS, INC. By: /s/ Alan C. Stanford ---------------------------- Title: HEEBINK GROUP, INCORPORATED By: /s/ Alan C. Stanford ---------------------------- Title: NATIONAL SYSTEMS GROUP, INC. By: /s/ Alan C. Stanford ---------------------------- Title: For the purposes of Section 2 of the foregoing Amendment No. 1: FIDELITY ASSET MANAGEMENT SERVICES, LLC By: /s/ Alan C. Stanford ---------------------------- Title: 6 ATTACHMENT A COPYRIGHTS (registered) TX-1-705-170 TITL: Trust training program words. PHYS: 1 v. CLNA: the acHeebink Group, Inc. DCRE: 1985 DPUB: 26Apr85 DREG: 24Oct85 APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I. Heebink. TX-1-705-171 TITL: Trust accounting reporting: 5. PHYS: 1 v. CLNA: the acHeebink Group, Inc. DCRE: 1985 DPUB: 26Apr85 DREG: 24Oct85 APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I. Heebink. TX-1-705-172 TITL: Trust accounting functions: 4. PHYS: 1 v. CLNA: the acHeebink Group, Inc. DCRE: 1985 DPUB: 26Apr85 DREG: 24Oct85 APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I. Heebink. TX-1-705-173 TITL: The accounting concepts: 3 PHYS. 1 v. CLNA: the acHeebink Group, Inc. DCRE: 1985 DPUB: 26APR85 DREG24Oct85 APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I. Heebink. TX-1-705-174 TITL: The Trust Business: 2 PHYS. 1 v. CLNA: the acHeebink Group, Inc. DCRE: 1985 DPUB: 26APR85 DREG24Oct85 APAU: entire text; the Heebink Group, Inc., employer for hire of Dennis I. Heebink. EX-2.2 4 QUANTECH LICENSE & SERVICE AGREEMENT 1 EXHIBIT 2.2 EXECUTION COPY QUANTECH LICENSE AND SERVICES AGREEMENT This Agreement is entered into this 10th day of April , 1996 by and between CORBEL & COMPANY, a Florida corporation with its principal place of business in Jacksonville, Florida, on behalf of itself and its wholly-owned subsidiary, TOTAL ADMINISTRATIVE BENEFIT SYSTEMS, INC. (d/b/a Pentab) (referred to hereinafter collectively, for all purposes, as "Licensor") and FIDELITY INVESTMENTS INSTITUTIONAL SERVICES, INC. ("Licensee"), a Massachusetts corporation with its principal place of business in Boston, Massachusetts, who agree for themselves, their successors and assigns as follows: 1. DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth below: 1.1. "Affiliate" means any other Person directly or indirectly Controlling, Controlled by or under common Control with a Person. 1.2. "Agreement" means this Agreement, including all Schedules and Exhibits, as the same may be amended from time to time. 1.3. "Confidential Information" means any and all information concerning the businesses and affairs of any of the parties that is not already generally or readily obtainable by the public or is publicly known or becomes publicly known through no fault of such party. 1.4. "Control" means an ownership interest of forty percent (40%) or more. 1.5. "Copyrights" means United States and foreign copyrights, whether registered or unregistered, and pending applications to register the same. 1.6. "Documentation" means all written, graphic and electronic materials currently in Licensor's possession, that describe the structure, function or use of the Quantech Software or any Enhancement, including all specifications, system documentation and user manuals. 1.7. "Enhancements" means any modification, enhancement, refinement, variation or new version of the Quantech Software, in both object code and source code form, and all Documentation relating thereto, that is created by Licensor and made generally commercially available to the then current licensees of the Quantech Software as an upgrade (whether or not a maintenance fee is charged to such licensee for the upgrade), during the period commencing on the date hereof and ending two years thereafter. Enhancement shall not include any new version of, or a replacement to, the Quantech Software that is available only as a newly licensed product. -1- 2 1.8. "Intellectual Property" means Patent Rights, Copyrights, Trade Secrets and proprietary information, all applications for any of the foregoing, and any license or agreements granting rights related to the foregoing. 1.9. "Knowledge" means actual knowledge after reasonable investigation. 1.10. "Licensor" has the meaning set forth in the preamble above. 1.11. "Patent Rights" means United States and foreign patents, patent applications, continuations, continuations-in-part, divisions, reissues, patent disclosures, inventions (whether or not patentable) or improvements thereto. 1.12. "Person" means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof). 1.13. "Trademarks" means United States and foreign trademarks, service marks, trade dress, trade names and logos, whether registered or unregistered, and pending applications to register the foregoing, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith. 1.14. "Trade Secrets" means confidential ideas, trade secrets, know-how, concepts, methods, processes, formulas, reports, data, customer lists, mailing lists, business plans, or other proprietary information. 1.15. "Quantech Software" means the most current, premium version, as of the date of this Agreement, of the computer software program described in Schedule A, attached hereto and incorporated herein, and commonly referred to by Licensor as "Quantech", in both object code and source code form, and all Documentation relating thereto. 2. LICENSE. 2.1. Perpetual License. Licensor hereby grants to Licensee, and Licensee hereby accepts from Licensor, subject to payment of the one-time license fee pursuant to Section 3.1, a perpetual, irrevocable, nonexclusive, worldwide right and license, with a right to grant sublicenses (to the extent provided herein), to use, reproduce, modify, display, distribute and create derivative works of the Quantech Software. Licensor further grants to Licensee, and Licensee hereby accepts from Licensor, subject to payment of the one-time license fee pursuant to Section 3.1, a perpetual, irrevocable, nonexclusive, worldwide right and license, with a right to grant sublicenses (to the extent provided herein), to use any of Licensor's Intellectual Property that is embodied in the Quantech Software or the Documentation. Except as otherwise provided herein, the rights granted to Licensee hereunder are noncancellable, transferable and assignable. -2- 3 2.2. Enhancements. Subject to the terms and conditions hereof, Licensor hereby grants to Licensee, and Licensee hereby accepts from Licensor, a perpetual, irrevocable, nonexclusive, worldwide right and license, with a right to grant sublicenses (to the extent provided herein), to use, reproduce, modify, display, distribute and create derivative works of the Enhancements. Subject to the terms and conditions hereof, Licensor further grants to Licensee, and Licensee hereby accepts from Licensor, a perpetual, irrevocable, nonexclusive, worldwide right and license, with a right to grant sublicenses (to the extent provided herein), to use any of Licensor's Intellectual Property (whether or not patentable or patented) that is embodied in the Enhancements. Except as otherwise provided herein, the rights granted to Licensee hereunder are noncancellable, transferable and assignable. 2.3. Sublicense Rights. 2.3.1. Object Code. Licensee may sublicense to its Affiliates and to third parties the rights granted in Sections 2.1 and 2.2 above with respect to all or any part of the object code version of the Quantech Software or any Enhancements. 2.3.2. Source Code. Licensee may sublicense to its Affiliates and to third parties the rights granted in Sections 2.1 and 2.2 above with respect to all or any part of the source code version of the Quantech Software or any Enhancements, provided that, during the period commencing on the date hereof and ending three years thereafter, Licensee shall not (and shall not permit any Affiliate to), directly or indirectly, disclose, license, sublicense, assign, transfer or otherwise provide to any third party all or any part of the source code version of the Quantech Software or any Enhancements or any related Documentation or Intellectual Property. 2.4. Ownership Rights. Except as expressly provided herein, Licensor retains all right, title and interest in the Quantech Software and the Enhancements and in all Intellectual Property rights in or relating thereto. As between Licensor and Licensee, and subject to Licensor's retained rights with respect to the underlying Quantech Software and any Enhancements and the Intellectual Property in or relating thereto, Licensee shall own all right, title and interest in all modifications, enhancements, refinements, variations or new versions of the Quantech Software, and in all Intellectual Property rights in or relating thereto, hereafter developed by Licensee. 2.5 Delivery of Materials. Simultaneously with the execution hereof, Licensor shall deliver to Licensee one source code copy and one object code copy of the Quantech Software, together with one copy of all of the then existing Documentation, to Licensee's site in Massachusetts. Licensor shall promptly deliver to Licensee one source code copy and one object code copy of any Enhancements, together with one copy of all the then existing Documentation relating thereto, upon first making such Enhancement commercially available. 3. PAYMENTS. -3- 4 3.1. License Fees. In consideration of the rights granted to Licensee under Section 2 hereof, Licensee shall pay Licensor a one-time license fee of Three Million Dollars ($3,000,000), to become payable upon the execution of this Agreement, and to be paid by the close of business on April 12, 1996, by wire transfer of immediately available funds in accordance with written wire transfer instructions provided to Licensee by Licensor on or prior to the date hereof. Licensor and Licensee agree that of the total amount of the license fee due hereunder, Two Hundred Fifty Thousand Dollars ($250,000) shall be in consideration for the rights granted under Section 2.1 above, with respect to Licensee's internal use of the Software and Enhancements. Upon payment of the one-time license fee hereunder, the license granted to licensee under Section 2 hereof shall be fully paid but not royalty free. 3.2. Royalties. 3.2.1. Obligation to Pay Royalties. Commencing on the date hereof and continuing thereafter for a period of two (2) years, Licensee shall pay to Licensor royalty payments, as calculated in Section 3.2.2, if, and only if, Licensee or any of its Affiliates enters into one or more agreements to sublicense third party end-users, in accordance with Section 2.3 hereof, the right to use the Quantech Software, any Enhancements or any modifications, enhancements, refinements, or variations created by Licensee, installed at any such third party end-user's site for its internal use. 3.2.2. Calculation of Royalties. In the event a royalty payment is due with respect to any third party end-user (as described in Section 3.2.1), such royalty payment shall be equal to the lesser of (a) $25,000 or (b) 25% of any license fee paid to Licensee or its Affiliates by that third-party end-user, whether or not payable to Licensee in installments, to become payable upon the signing of a binding agreement between Licensee or its Affiliates and such third party end-user. No royalties shall be paid in respect of any service bureau, maintenance or other non-license related recurring revenue. 3.2.3. Payment Terms. Licensee shall pay royalties to Licensor hereunder on a quarterly basis. Such payment shall be made no later than forty-five (45) days following the end of each calendar quarter based on the license fees actually received by Licensee and its Affiliates during such calendar quarter. At the time of each payment, Licensee shall provide Licensor with a royalty statement in sufficient detail to allow Licensor to understand the calculation of royalties reflected thereon and, upon reasonable advance written request to Licensee by Licensor, Licensee shall permit Licensor (but no more than twice in any 12 month period) to audit such books, contracts and records of Licensee as may be reasonably required to confirm the accuracy of such calculations. Upon payment of any royalties due Licensor under this Section 3.2, the license granted herein shall be royalty-free. 3.3. Additional Payments. Subject to the provisions of Section 3.4 hereof, Licensee shall pay Licensor Two Million Dollars ($2,000,000), to become payable upon the Closing of the transaction contemplated in that certain Asset Purchase Agreement, dated as of -4- 5 April 10, 1996, by and among Licensee, Broadway & Seymour, Inc. and certain wholly-owned subsidiaries of Broadway & Seymour (the "Purchase Agreement"), with such funds to be paid by wire transfer of immediately available funds in accordance with written wire transfer instructions provided to Licensee by Licensor, as follows: 3.3.1. Closing Under Purchase Agreement. Licensee shall pay Licensor, upon the Closing under the Purchase Agreement, One Million Dollars ($1,000,000), with such funds to be paid by wire transfer of immediately available funds in accordance with written wire transfer instructions provided to Licensee by Licensor on or before the date of such Closing. 3.3.2. Completion of Training Services. Within ten (10) days of completion of Licensor's obligation to provide the Training Services set forth in Section 4 hereof, Licensee shall pay Licensor One Million Dollars ($1,000,000), with such funds to be paid by wire transfer of immediately available funds in accordance with written wire transfer instructions provided to Licensee by Licensor. Licensor and Licensee agree that of the total amount of the additional payments due under this Section 3.3, Nine Hundred Thousand Dollars ($900,000) shall be in consideration for the Transition Services, One Hundred Thousand Dollars ($100,000) shall be in consideration of the Training Services and One Million Dollars ($1,000,000) shall be in consideration of the rights granted under Section 2.2 above. 3.4. Certain Additional Payments Conditioned upon Closing. In the event that no Closing occurs under the Purchase Agreement, the parties agree as follows: 3.4.1. Licensee shall have no obligation whatsoever to make the payment as provided for in Section 3.3.1. 3.4.2. Licensee shall have no obligation to make the payment as provided for in Section 3.3.2, provided that Licensee shall pay Licensor $100,000 in respect of the Training Services, within ten (10) days of completion of Licensor's obligation to provide the Training Services set forth in Section 4 hereof. 3.4.3. Licensor shall have no further obligation (a) to provide Licensee with Enhancements, as provided in Section 2.2 or (b) to provide the Transition Services, as set forth in Section 4. Licensee shall, however, continue to be obligated to provide the Training Services as set forth in Section 4 and the Consulting Services as set forth in Section 5. 4. TRAINING AND TRANSITION SERVICES. 4.1. Transition Services. Subject to provisions of Section 3.4 hereof, to facilitate the transfer of knowledge between the parties contemplated by this Agreement, Licensor agrees that, during the period commencing on the date payment is first made to Licensor under Section -5- 6 3.3.1, and ending on September 30, 1996, Licensor shall provide to Licensee consulting and advisory services (the "Transition Services"), including consultation and advice on product development, strategic planning and similar issues, relating to the Quantech Software and Enhancements. Notwithstanding the foregoing, Licensor shall not be required to perform any Transition Services that (a) would cause it to breach any agreement binding on it, (b) would require disclosure of confidential or proprietary information of Licensor, (c) or would be otherwise unreasonably burdensome with respect to the continuing business of Licensor. 4.2. Training Services. Subject to provisions of Section 3.4 hereof, to further facilitate the transfer of knowledge between the parties contemplated by this Agreement, Licensor agrees that, during the period commencing on the date payment is first made to Licensor under Section 3.3.1, or, in the event such payment is not made on or before May 31, 1996, as provided in Section 3.4.2, and ending on September 30, 1996, Licensor shall provide to Licensee training services (the "Training Services"), subject to the following terms and conditions: 4.2.1. Personnel; Location; Hours; Schedule. In order to fulfill its obligation to provide Training Services, Licensor shall make available to Licensee at Licensee's facilities in Massachusetts, or at such other location as is mutually agreed to by the parties, the following specific employees of Licensor for the stated amount of time: Ken Simmons 20 business days (160 man-hours) John Stinmeyer 20 business days (160 man-hours) Paul Schneider 20 business days (160 man-hours) In the event that one or more of the above employees is no longer an employee of Licensor, Licensor shall make available to Licensee substitute employee(s), subject to the prior approval of Licensee (which approval shall not be unreasonably withheld), which employee(s) shall possess a level of skill and competence consistent with that of skilled and competent computer industry professionals with a combination of experience at the systems level and specific experience with the Quantech Software appropriate for the provision of the required Training Services. The parties shall work out a mutually agreeable schedule, in minimum increments of one day, for the Training Services to be provided by Licensor. 4.2.2. Expenses. Licensee shall reimburse Licensor for any reasonable out-of-pocket expenses incurred by Licensor in providing the Training Services. 4.2.3. Ownership Rights. Licensor hereby acknowledges that Licensee shall own all right, title and interest in and to the Copyright in any and all software and Documentation developed by employees of Licensor pursuant to this Section 4. All code, documentation and other written, graphic or electronic materials developed by employees of Licensor pursuant to this Section 4 (whether individually or jointly with other persons) are intended to be a "work made for hire" and Licensor hereby assigns to Licensee any Copyright rights that it may have therein. Licensor agrees to execute and deliver to Licensee any -6- 7 assignments or other documents as may be reasonably required to vest all such Copyright rights in Licensee. Licensee hereby acknowledges that Licensor shall retain all Intellectual Property rights other than the Copyright in such software and Documentation. 5. CONSULTING SERVICES. Subject to the provisions of Section 3.4, in addition to the Training Services provided by Licensor to Licensee pursuant to Section 4 hereof, during the period commencing on (a) the date payment is first made to Licensor under Section 3.3.1, or (b) in the event such payment is not made, as provided in Section 3.4.2, on May 31, 1996, and ending two (2) years thereafter, Licensor shall provide Licensee with additional consulting services (the "Consulting Services"), to complete the transfer of knowledge contemplated by this Agreement, subject to the following terms and conditions: 5.1. Personnel; Location. In order to fulfill its obligation to provide Consulting Services, Licensor shall make available to Licensee at Licensee's facilities in Massachusetts, or at such other location as is mutually agreed to by the parties, the following specific employees of Licensor: Ken Simmons John Stinmeyer Paul Schneider The Consulting Services shall be provided by Licensor, from time to time, upon request by Licensee and upon reasonable prior notice to Licensor. In the event that one or more of the above employees is no longer an employee of Licensor, Licensor shall make available to Licensee substitute employee(s), subject to the prior approval of Licensee, which employee(s) shall possess a level of skill and competence consistent with that of skilled and competent computer industry professionals with a combination of experience at the systems level and specific experience with the Quantech Software appropriate for the provision of the required Consulting Services. 5.2. Minimum Number of Hours; Hourly Rate; Schedule. If requested by Licensee, Licensor shall provide up to 250 man-hours of Consulting Services pursuant to this Section 5. Licensee shall pay Licensor at Licensor's then prevailing rates for similar consulting services, which rates shall not be unreasonable in light of the scope of work to be provided, and which rates shall not exceed $150.00 per hour. The parties shall work out a mutually agreeable schedule for the Consulting Services to be provided by Licensor; provided that any work performed in Massachusetts shall be in minimum increments of 1 day. 5.3. Expenses. Licensee shall reimburse Licensor for any reasonable out-of-pocket expenses incurred by Licensor in providing the Consulting Services. 5.4. Ownership Rights. Licensor hereby acknowledges that Licensee shall own all right, title and interest in and to the Copyright in any and all software and Documentation developed by employees of Licensor pursuant to this Section 5. All code, documentation and -7- 8 other written, graphic or electronic materials developed by employees of Licensor pursuant to this Section 5 (whether individually or jointly with other persons) are intended to be a "work made for hire" and Licensor hereby assigns to Licensee any Copyright rights that it may have therein. Licensor agrees to execute and deliver to Licensee any assignments or other documents as may be reasonably required to vest all such Copyright rights in Licensee. Licensee hereby acknowledges that Licensor shall retain all Intellectual Property rights other than the Copyright in such software and Documentation. 6. REPRESENTATIONS AND WARRANTIES OF LICENSOR. Licensor hereby represents and warrants to Licensee, the following: 6.1. Authorization; Enforceability. Licensor has the corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly executed and delivered by Licensor and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms and conditions. 6.2. Ownership. Licensor has all the necessary right, title and interest in the Quantech Software and the Enhancements to grant the licenses contemplated herein, including all necessary rights to any portion of the Quantech Software or any Enhancement created by an independent contractor or other third party. The foregoing warranty shall not apply to any modifications, changes, enhancements, updates, conversions, upgrades, or additions made to the Quantech Software or any Enhancement by any person or entity other than Licensor unless approved by Licensor. The exclusive remedy for any breach of this Section 6.2 shall be indemnification as provided in Section 9 hereof. 6.3. Infringement. The use of the Quantech Software and any Enhancements by the Licensee will not violate (a) the Patent Rights of any third party in the United States or Canada, (b) the Copyright of any third party in any country that is a party to the Berne Convention or (c) the Trade Secrets of any third party. The foregoing warranty shall not apply to any modifications, changes, enhancements, updates, conversions, upgrades, or additions made to the Quantech Software or any Enhancement by any person or entity other than Licensor unless approved by Licensor. The Quantech Software and any Enhancements are free and clear of any claim of third party infringement of any Intellectual Property right, and there are no actions proceeding, pending, or to the best Knowledge of Licensor, threatened which claim that the Quantech Software or any Enhancements, or any part thereof, infringes upon or is infringed by any Intellectual Property right of any third party. The exclusive remedy for any breach of this Section 6.3 shall be indemnification as provided in Section 9 hereof 6.4. Conformance with Specifications. For a period of two (2) years after the initial installation of the Quantech Software on Licensee's site (the "Warranty Period"), the Quantech Software and any Enhancements will be free of any defect rendering the program unfit for the purpose of the functions described in the Documents listed in Schedule A hereto. The foregoing warranty shall not apply to any modifications, changes, enhancements, updates, -8- 9 conversions, upgrades, or additions made to the Quantech Software or any Enhancement by any person or entity other than Licensor unless approved by Licensor. If during the Warranty Period the Quantech Software or any Enhancement does not comply with the provisions of this Section 6.4, and Licensee promptly delivers written notice thereof to Licensor, Licensor shall correct, cure or otherwise remedy the Quantech Software or Enhancement so that it complies with this Section 6.4. 6.5. Security Measures, etc. The Quantech Software and any Enhancement does not contain any mechanism that would enable Licensor or any other party to disable the Quantech Software or any Enhancement or make it inaccessible to a user. Licensor agrees to use its best efforts to ensure that the Quantech Software and any Enhancement in the form delivered to Licensee does not contain any computer virus or worm. 6.6. Disclaimer; Limitation of Liability. EXCEPT AS OTHERWISE PROVIDED HEREIN, LICENSOR EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS ARISING OUT OF THIS AGREEMENT, WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER LEGAL THEORY, AND EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 7. COVENANTS. The parties agree as follows: 7.1 Licensor Covenants. 7.1.1. Independent Contractors. Licensor will not use any independent contractor or other third party to develop proprietary components of the Enhancements, unless all rights in proprietary components developed by independent contractors or other third parties have been or will be assigned to Licensor and licensed to Licensee. 7.1.2. Linkages. Licensor covenants and agrees to modify the Quantech Software to include linkage functionality for electronically clearing transactions, including an optional, nonexclusive capability for Quantech Software licensees to link to Licensee's clearing capability, all as described more fully in Schedule B, attached hereto and incorporated herein, in addition to any other linkage functionality or clearing capabilities that Licensor elects to include, such modification to be completed by December 31, 1996. Until such time as the parties mutually agree that the linkage functionality described above in the Quantech Software has become obsolete or otherwise impracticable, Licensor shall (subject to the provisions of Schedule B) include in all future versions, modifications and enhancements of the Quantech Software, as soon as reasonably practicable, given the magnitude of the work required, as an optional function, the capability for Quantech Software licensees to link to Licensee's clearing capability. -9- 10 7.1.3. Effect of Bankruptcy of Licensor. Licensor agrees that if Licensor as a debtor-in-possession or if a trustee in bankruptcy rejects this agreement, Licensee may elect to retain its rights under the Agreement as provided in Section 365(n) of the United States Bankruptcy Code. Upon written request of Licensee to Licensor or the trustee in bankruptcy, Licensor or such trustee shall allow Licensee to exercise its rights under this Agreement and shall not interfere with the rights of the Licensee as provided in this Agreement. The foregoing shall survive the termination or expiration of this Agreement for any reason whatsoever. 7.1.4. General Right to Develop and Market. With the exception of Licensor's obligations under Section 7.1.2 hereof, nothing in this Agreement shall be construed as limiting or restricting Licensor's right to modify, enhance and develop new versions of the Quantech Software and to market such software to third parties, in whatever manner Licensor determines, in its sole discretion, to be in its best interest. 7.1.5. No Other Licensor Obligations. Except as expressly provided herein or as provided in any subsequent agreement between the parties, Licensor has no obligation to create or provide to Licensee any enhancements, modifications or updates to the Quantech Software or Documentation or to provide any maintenance, training or other services to Licensee of any nature whatsoever. Licensee acknowledges that the Quantech Software will not function properly without the use of hardware and software owned by third parties and Licensee agrees that it shall have the sole responsibility for purchasing any such hardware and obtaining licenses to any such software. 7.2. Licensee Covenants. 7.2.1. No Use of Quantech Trademark. Licensee shall not use the trademark "Quantech", or any phrase that is confusingly similar to the trademark "Quantech", to market or identify the Quantech Software or any derivative work thereof or any other software product that performs similar functions. Except as required by Section 7.2.3 hereof, Licensee shall not identify Licensor as the source of Licensee's software programs based on the Quantech Software. 7.2.2. Exports. In no event may Licensee export any Quantech Software or Documentation or use any Quantech Software or Documentation outside the United States unless it has complied fully with all relevant regulations of the U.S. Department of Commerce and with the U.S. Export Administration Act. 7.2.3. Protection of Licensor's Intellectual Property Rights. Licensee shall take reasonable steps to protect Licensor's intellectual property rights in the Quantech Software and Documentation including, without limitation, retaining all legends relating to copyright on all copies of the Quantech Software and Documentation and advising Licensor should Licensee discover that any third party is infringing Licensor's intellectual property rights in the Quantech Software or Documentation. -10- 11 7.2.4. Non-Hire and Non-Solicitation of Employees. Licensee covenants and agrees that, during the period commencing on the date hereof and ending on September 30, 1996, Licensee will not, directly or indirectly without the written consent of Licensor, recruit, offer employment, employ (including employment as a consultant), lure or entice away any of the individuals referenced in Sections 4 and 5 hereof employed by the Licensor, or otherwise to induce such individuals to leave the employ of the Licensor. Licensee covenants and agrees that, during the period commencing on September 30, 1996 and ending on December 31, 1996, Licensee will not, directly or indirectly without the written consent of Licensor, recruit, lure or entice away any of the individuals referenced in Sections 4 and 5 hereof employed by the Licensor, or otherwise take affirmative steps to induce such individuals to leave the employ of the Licensor. 8. CONFIDENTIALITY. Each of the parties will treat and hold as such all of the Confidential Information of the other party, refrain from using any of the Confidential Information except in connection with this Agreement, and deliver promptly to the party to which it relates or destroy, at the request and option of such party, all tangible embodiments (and all copies) of the Confidential Information which are in its possession. In the event that any of the parties is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process) to disclose any Confidential Information of any other party, that such party will notify the other party promptly of the request or requirement so that the other party may seek an appropriate protective order or waive compliance with the provisions of this Section 8. If, in the absence of a protective order or the receipt of a waiver hereunder, any of the parties is, on the advice of counsel, compelled to disclose Confidential Information of any other party, to any tribunal or else stand liable for contempt, that such party may disclose the Confidential Information to the tribunal; provided, however, that the disclosing party shall use its best efforts to obtain, at the request of the other party, an order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed as the other party shall designate. 9. INDEMNIFICATION. Licensor shall indemnify, defend and hold Licensee harmless from and against any and all suits, actions, damages, losses, costs and expenses (including court costs and attorneys' fees should Licensor breach its obligation to defend) and other liabilities arising from or in connection with any claim arising out of a breach of Licensor's representations and warranties contained in Sections 6.2 and 6.3 hereof and shall pay all costs and damages awarded. Licensee shall promptly notify Licensor of any such claim. Licensor shall retain sole control over the defense and settlement of such claim, and Licensee shall cooperate with Licensor in the defense of the claim. Licensee shall have the right, at its option, to participate in the defense of any such claim at its sole expense. At Licensor's option, Licensor may satisfy its entire obligation under this Section (other than claims for damages brought by third parties and any expenses incurred in defending any third party claims) by: (a) with the prior written consent of Licensee (such consent not to be unreasonably withheld) modifying the Quantech Software or Documentation or any Enhancement so that it performs comparable functions without infringement; or (b) obtaining a royalty-free, perpetual, irrevocable, nonexclusive, transferable -11- 12 right and license for Licensee to use, transfer, copy, display, distribute, sublicense and prepare derivative works of source code and object code copies of the infringing Quantech Software or Documentation in accordance with the terms of this Agreement. 10. MISCELLANEOUS. 10.1. No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the parties and their respective successors and permitted assigns. 10.2. Entire Agreement. This Agreement (including the documents referred to herein) constitutes the entire agreement between the parties and supersedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they related in any way to the subject matter hereof. 10.3. Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. This Agreement shall, subject to the terms and conditions hereof, be freely assignable by the parties; provided, however, for a period commencing on the date hereof and ending three years thereafter, Licensee shall not assign this Agreement or its rights or obligations hereunder to any Person which is not an Affiliate of Licensee without the prior written consent of Licensor, and provided further that Licensee shall require any Affiliates who are assignees to comply with provisions of this Agreement, including this Section 10.3. 10.4. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 10.5. Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 10.6. Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) upon confirmation of facsimile, (ii) when sent by overnight delivery and (iii) when mailed by registered or certified mail return receipt requested and postage prepaid at the following address: If to Licensor: 1660 Prudential Drive Jacksonville, FL 32207 Telefax: 904-399-5551 -12- 13 Attn: President Copy to: ------- Broadway & Seymour, Inc. 128 South Tryon Street Charlotte, NC 28202 Attn: General Counsel Telefax: (704) 344-3542 If to Licensee: -------------- 82 Devonshire Street Boston, MA 02109 Telefax: (617) 476-0932 Attn: President Copy to: ------- 82 Devonshire Street Boston, MA 02109 Telefax: (617) 476-0932 Attn: General Counsel Any party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other party notice in the manner herein set forth. 10.7. Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of The Commonwealth of Massachusetts without giving effect to any choice or conflict of law provision or rule (whether of The Commonwealth of Massachusetts or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than The Commonwealth of Massachusetts. 10.8. Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the parties. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, -13- 14 misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence. 10.9. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. 10.10. Expenses. Each of the Licensor and Licensee will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. 10.11. Relationship of Parties. This Agreement is not intended to and does not create a partnership or joint venture relationship among the parties. No employee of Licensor shall be entitled to any Licensee benefits and no such employee is covered by the workers compensation insurance of Licensee. Neither party has authority to enter into any contracts or agreements on behalf of the other or to make any warranties or representations that purport to bind the other. [this space intentionally left blank] -14- 15 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as the year and date first above written. CORBEL & CO. FIDELITY INVESTMENTS INSTITUTIONAL SERVICES, INC. By: /s/ Alan C. Stanford By: /s/ Paul J. Hondros --------------------------- --------------------------- Title: Vice President Title: President -15- 16 SCHEDULE A QUANTECH SOFTWARE DELIVERABLES 1. Quantech is defined as the source code, object code, database and data definitions for the components listed below to handle 401(k), Profit Sharing, Money Purchase Plans, etc.: 1.1 Quantech Professional and optional modules including, but not limited to the following: 1.1.1 10 1/2 with Calculations 1.1.2 1099's 1.1.3 Compliance testing 1.1.4 Standard Reports 1.1.5 Global Transactions 1.1.6 Electronic Census Import/Export Data Entry Routines 1.1.7 Data Collection Module 1.1.8 Age Weighted/Cross-Testing 1.1.9 Participant Loans 1.1.10 Target Benefit 1.1.11 Client Management System 1.1.12 Trust Accounting 1.1.13 Allocation Import Link Package 1.1.14 Investment Download 1.1.15 Insurance 1.2 Delrina Form Flow software required for: 1.2.1 Administrative Government Forms 1.2.2 Legal Government Forms 1.3 Voice Response interfaces to: 1.3.1 Edify 1.3.2 Intervoice 1.4 Crystal Report Writer interface 1.5 Proprietary Database Wrapper 1.6 Security device for licensing key -16- 17 2. The warranty contained in Section 6.4 shall correspond to the following Quantech Documentation: 2.1 Quantech Starter's Guide 2.2 Quantech Government Forms Nonintegrated System Users Guide 2.3 Quantech Client Management System Users Guide 2.4 Quantech Owners and Installation Manual 2.5 Quantech Report Writer Users Guide 2.6 Quantech Defined Contribution and Integrated Applications Users Guide 2.7 Quantech System Reference Manual (3 page overview that accompanies license agreements) -17- 18 SCHEDULE B QUANTECH LINKAGES Corbel will develop, maintain and enhance linkage interfaces from Quantech to AMTrust/AMPreferred and FTS as highlighted below and fully defined in the Fidelity Investments Linkage Project-Business Requirements and Functional Specifications Document attached as Exhibit A hereto (Section 6; dated 11/6/95). The interface development responsibility is limited to the files referenced below, or files of similar nature, required to accomplish the stated business purpose of maintaining Quantech links with AMTrust/AMPreferred and FTS. 1. TRUST LINKAGES (QUANTECH TO AMTRUST/AMPREFERRED) 1.1 Implement interfaces between the record keeping system and the trust system. The interfaces will enable single processing or data entry for like processing events occurring on both the trust and record keeping systems. 1.2 The interfaces include, but are not limited to, the following: 1.2.1 Contribution Data File 1.2.2 Trade Order Processing 1.2.3 Acknowledgment Processing 1.2.4 Trade Confirm Processing 1.2.5 Position Reconciliation 1.2.6 Price/Rate File Processing 1.2.7 Dividend/Capital Gain Processing 1.2.8 Deposit Advice 1.2.9 Cusip File Processing 1.2.10 Security Master Updates 1.3 All interfaces will be defined, tested and in production by 12/31/96. 1.4 Future modifications resulting from Fidelity initiated changes, will be performed by Corbel at the expense of Fidelity, and be delivered in a timely manner. 2. TRADING LINKAGES (QUANTECH TO FTS) -18- 19 2.1 Implement full interfaces between the record keeping system and the mutual fund trade order processing system. The linkages will enable automatic trade placement/execution for 401(k) activity originating on the record keeping system. These interfaces will be used when AMTrust/AMPreferred is not the trust solution. 2.2 The interfaces include, but are not limited to, the following: 2.2.1 Trade Order Processing 2.2.2 Acknowledgment Processing 2.2.3 Trade Confirm Processing 2.2.4 Position Reconciliation 2.2.5 Price/Rate File Processing 2.2.6 Dividend/Capital Gain Processing 2.2.7 Reinvest Trade Confirmation 2.2.8 Cusip File Processing 2.2.9 Security Master Updates 2.3 All interfaces will be defined, tested and in production by 12/31/96. 2.4 Future modifications resulting from Fidelity initiated changes, will be performed by Corbel at the expense of Fidelity, and be delivered in a timely manner. -19- EX-2.3 5 LICENSE & SERVICE AGREEMENT 1 EXHIBIT 2.3 LICENSE AND SERVICES AGREEMENT This Agreement is entered into this ___ day of May, 1996, by and between Fidelity Asset Management Services, LLC ("Licensor"), a Delaware limited liability company with a principal place of business in Boston, Massachusetts, and BancCorp Systems, Inc. ("Licensee"), a North Carolina corporation with its principal place of business in Amarillo, Texas. BACKGROUND STATEMENT Licensee entered into an Agreement with Federated Administrative Services, Inc. and two related entities ("Federated") dated as of June 1, 1994 (the "Federated Agreement") pursuant to which Licensee developed certain software for Federated. Broadway & Seymour, Inc. ("BSI"), Licensee, Licensor's assignor and certain other parties have entered into an Asset Purchase Agreement, dated as of April 10, 1996, as amended (the "Purchase Agreement") pursuant to which Licensee has transferred and assigned substantially all of its assets to Licensor. Licensee has not assigned the Federated Agreement to Licensor and the sole purpose of this Agreement is to ensure that Licensee will be able to continue complying with its obligations under the Federated Agreement. AGREEMENT NOW, THEREFORE, the parties hereto agree for themselves, their permitted successors and assigns as follows: 1. LICENSE Licensor hereby grants to Licensee and Licensee hereby accepts from Licensor, subject to the terms and conditions of this Agreement, a limited, nonexclusive, worldwide, royalty-free, nontransferable right and license to use, reproduce, modify, display, distribute and create derivative works of all versions of the software listed on Schedule A, attached hereto and incorporated herein, including the object code and source code therefor and all documentation relating thereto, and any generally commercially available up-grades or revisions thereto developed by Licensor during the term hereof (the "Software"), subject to the following conditions and restrictions: 1.1. Restricted Use. Licensee may exercise the rights granted above solely for the purpose of complying with its continuing obligations under the Federated Agreement and for no other purpose whatsoever. Upon the expiration or termination of the Federated Agreement and Licensee's obligations thereunder, Licensee shall have no further right of any nature whatsoever in the Software or the related documentation. -1- 2 1.2. Sublicensing; Transfer. Except to the extent necessary to fulfill its continuing obligations under the Federated Agreement, or as otherwise provided herein, Licensee may not sell, sublicense, convey, assign, or otherwise transfer the Software or any Modifications (as hereinafter defined) to any third parties without Licensor's prior written consent, which may be withheld for any or no reason. 1.3. Copying. Except to the extent necessary to fulfill its continuing obligations under the Federated Agreement, the Software and Modifications may only be copied for distribution to the Licensee's facilities, or for archival or back-up purposes. 1.4. Notices. All copies of the Software and Modifications shall reproduce the Licensor's copyright and confidentiality notices, to the extent that the Software and Modifications provided by the Licensor contain such notices. 2. MODIFICATIONS. 2.1. Development of Modifications. To the extent necessary to fulfill its continuing obligations under the Federated Agreement, the Licensee may modify, develop enhancements to, or refinements or variations of the Software, or use the Software as a basis for creating alternative software, or request Licensor, pursuant to the provisions of Section 3.1 below, to do so. Such modifications or alternative software resulting from such use of the Software shall be referred to herein as the "Modifications." 2.2. Ownership of Modifications. The Licensee agrees that all right, title and interest in and to the Modifications created by or on behalf of the Licensee, shall be and remain in the Licensor. The Licensee shall promptly deliver to the Licensor the Modifications and any and all documentation relating thereto, but may retain copies thereof to the extent necessary to fulfill its continuing obligations under the Federated Agreement. The Licensee further agrees to cause its employees or agents, as needed, to execute any and all documents necessary to assign ownership of any and all rights in the Modifications to the Licensor or to otherwise perfect the Licensor's rights therein. 2.3. No duty. Except as otherwise provided herein or unless the parties agree in a separate document, the Licensor has no duty to update, modify, or enhance the Software for the benefit of the Licensee. 3. SERVICES. 3.1. Provision of Support Services. From time to time, upon reasonable prior written notice to Licensor, Licensee may request that Licensor develop such Modifications or perform the support and maintenance services described in Schedule B attached hereto and incorporated herein ("Support and Maintenance") as Licensee determines to be required in order to comply with its continuing obligations under the Federated Agreement. Licensee -2- 3 shall only request the development of such Modifications and the performance of such Support and Maintenance as Licensee determines in good faith is required in order for Licensee to comply with its continuing obligations under the Federated Agreement. 3.2. Leased Employee(s). The parties agree that any development of Modifications or performance of Support and Maintenance pursuant to this Agreement shall be provided by such Employee(s) of Licensor as Licensor shall designate, in its sole discretion, which Employee(s) shall be leased to Licensee on the terms and conditions provided below. Such Employee(s) shall possess a level of skill and competence consistent with that of skilled and competent computer industry professionals with a combination of experience at the systems level and specific experience with the Software appropriate for the specific task. 3.3. Statement of Work. At the time Licensee submits any request for the development of Modifications or the provision of Support and Maintenance pursuant to Section 3.1, the parties shall work together to develop a schedule for each Modification or for the performance of such Support and Maintenance and shall agree to a Statement of Work covering the same, which Statement of Work shall include the estimated duration of the required work (the "Lease Term"). 4. EMPLOYEE LEASING. Upon any request for the development of any Modification or the provision of Maintenance and Support pursuant to Section 3.1 hereof, Licensee shall enter into a lease arrangement with respect to the employee(s) designated by Licensor (the "Assigned Employees"), which shall continue for the duration of the Lease Term and any commercially reasonably required extension thereof, upon the following terms and conditions: 4.1. Taxes, etc. During the Lease Term, Licensor will be responsible for all matters related to the payment of federal, state and local payroll taxes, workers' compensation insurance, salaries and fringe benefits for the Assigned Employees. 4.2. Direction and Control. Licensee agrees that it shall be responsible for the direction and control of the Assigned Employees during the Lease Term, that it shall be solely responsible for the acts, omissions and work product of such Assigned Employees during the Lease Term, and that it shall have the sole responsibility for providing all facilities, furnishings, equipment and supplies for the Assigned Employees. 4.3. Employee Reversion. At any time during the Lease Term, Licensee may notify Licensor of any of the Assigned Employees whose services Licensee no longer requires. Such notice shall constitute an "Employee Reversion" with respect to each Assigned Employee listed in the notice, effective at midnight on the fifteenth day of the month in which the notification is received, or at midnight on the last day of that month if notice is given after the fifteenth day. At the end of the Lease Term or any extension thereof, there shall automatically occur an Employee Reversion with respect to all remaining Assigned Employees, effective on -3- 4 such date. Following the effective date of an Employee Reversion relating to any specific Assigned Employee, the Assigned Employee will no longer perform any services for Licensee and Licensee shall not have any further obligation with respect to such Assigned Employee. 4.4. Employee Termination. Licensor retains the right to terminate any Assigned Employee at any time during the term of this Agreement, without the consent of Licensee, for appropriate cause in accordance with Licensor's standard personnel policies. Licensor shall consult in good faith with Licensee before terminating any Assigned Employee. Licensor shall promptly replace any Assigned Employee who resigns, is terminated, or otherwise ceases to perform services other than in connection with an Employee Reversion. 4.5. Compensation. In consideration of Licensor providing the development of Modifications and Software Support and Maintenance requested in Section 3.1, Licensee shall pay Licensor the leased employee fees specified in Schedule C. 5. OWNERSHIP RIGHTS. The Licensee hereby acknowledges and agrees that the Software and all Modifications are the valuable, confidential and secret property of the Licensor and the Licensor owns all right, title and interest in and to the Software and Modifications, including, without limitation, all ancillary and interface system software, all current and future enhancements, modifications, revisions, upgrades, new releases, and derivative works thereof, all documentation related thereto, and all copyrights, trade secrets, and patents therein and/or any registrations in, or the right to register, the copyrights, trade secrets or patents, and any and all renewals, reversions and extensions of any such copyrights, trade secrets or patents, in the United States and every other country in the world. 6. DISCLAIMER OF WARRANTY; LIMITATION OF LIABILITY. LICENSEE AGREES THAT THE SOFTWARE AND DOCUMENTATION IS LICENSED HEREUNDER ON AN "AS IS" BASIS WITHOUT ANY WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL LICENSOR BE LIABLE FOR LOSS OF PROFITS, USE OR INTERRUPTION OF BUSINESS, DIRECT, INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR OTHER DAMAGES ARISING OUT OF OR RELATING TO THE LICENSEE'S USE OF THE SOFTWARE, EVEN IF THE LICENSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 7. COVENANTS. 7.1. Licensor. Licensor agrees, during the term hereof, that it will not use or sublicense the Software in a manner that violates Section 2(b) of the Federated Agreement. Licensor further agrees, during the term hereof, to make available Support and Maintenance -4- 5 services to clients of Federated which are valid licensees of the Software, upon terms and conditions comparable to those commercially available to licensee's of the Software, generally. 7.2. Licensee. Licensee agrees, during the term hereof, to comply with its obligations under the Federated Agreement, including its obligations under Section 2(a) of the Federated Agreement. 8. INDEMNIFICATION. The Licensee agrees to indemnify, defend and hold harmless the Licensor against any and all claims, liabilities, damages, costs and expenses (including reasonable attorneys' fees and costs) arising out of or related to (a) the exercise by Licensee of any of the rights granted to Licensee herein, (b) the performance of any services as set forth in Section 4 hereof, and (c) any breach by Licensee of any representation, warranty or covenant of Licensee hereunder. Licensor agrees to indemnify, defend and hold harmless the Licensee against any and all claims, liabilities, damages, costs and expenses (including reasonable attorneys' fees and costs) arising out of any breach of Licensor's obligations under Section 7.1 hereof. 9. MISCELLANEOUS. 9.1. Term. This Agreement becomes effective upon the execution by both of the parties hereto and shall continue in effect until the earlier of (a) the expiration or termination of the Federated Agreement and the obligations of Licensee thereunder or (b) the fifth anniversary date of the First Installation (as defined in Section 1 of the Federated Agreement), at which time this Agreement shall terminate and shall have no further effect. 9.2. Successors and Assigns. None of the rights granted to or obligations assumed by the Licensee hereunder may be assigned, sold, subcontracted or otherwise transferred without the prior written consent of the Licensor; provided that Licensee may assign all or any part of its rights or obligations hereunder to any of its Affiliates (as defined below), but shall remain fully responsible for the compliance by its Affiliate with all of the terms, conditions, limitations and restrictions contained herein. As used in this Agreement, the term "Affiliate" means any entity that, directly or indirectly, controls, is controlled by, or is under common control with, Licensee. Any attempt to assign or transfer any of the rights, duties or obligations under this Agreement in contravention of this paragraph is void. 9.3. Governing Law. This Agreement shall be governed by the laws of The Commonwealth of Massachusetts. 9.4. Notices. All notices, including notices of address changes, required to be sent hereunder shall be in writing and shall be deemed to have been given when received by certified mail, return receipt requested, or sent by telefax to the party at the address set forth with its signature below. -5- 6 9.5. Amendment and Modification. This Agreement may be amended, modified or supplemented only by a written agreement signed by both parties. 9.6. Interpretation of Agreement. In the event that any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement will remain in full force and effect. The waiver by any party of any default or breach of this Agreement shall not constitute a waiver of any other subsequent default or breach. 9.7. Multiple Counterparts. This Agreement may be executed in several counterparts, all of which taken together shall constitute one single Agreement between the parties. 9.8. Section Headings. The section and subsection headings used herein are for reference and convenience only and shall not enter into the interpretation hereof. 9.9. Entire Agreement. This Agreement and the Purchase Agreement constitute the complete understanding between the parties with respect to the subject matter hereof and supersedes all previous written or oral agreements and representations. 9.10. Relationship of Parties. This Agreement is not intended to and does not create a partnership or joint venture relationship among the parties. No employee of Licensor shall be entitled to any Licensee or BSI benefits and no such employee is covered by the workers compensation insurance of Licensee or BSI. Licensor has no authority to enter into any contracts or agreements on behalf of Licensee or to make any warranties or representations that purport to bind Licensee. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as the year and date first above written. BANCCORP SYSTEMS, INC. FIDELITY ASSET MANAGEMENT SERVICES, LLC By: /s/ Alan C. Stanford By: /s/ Paul J. Hondros --------------------------- --------------------------- Title: President Title: President ------------------------ ------------------------ NOTICE: NOTICE: Broadway & Seymour, Inc. 82 Devonshire Street 128 South Tryon Street, Suite 1000 Boston, MA 02110 Charlotte, North Carolina 28101-5050 Attn: Jay Freedman, Esq. Fax: (704) 344-3542 Fax: (617) 476-0932 -6- 7 SCHEDULE A TO LICENSE AND SUPPORT SERVICES AGREEMENT TRUSTPROCESSOR SOFTWARE Technical Description of Trust Processor TrustProcessor is a general ledger based system that is used by bank trust departments, trust companies, private family trusts, non-profit foundations, universities and religious organizations to manage personal trusts, charitable trusts, pooled funds and common funds. TrustProcessor International is a general ledger based asset management system used by private off-shore banks for asset management and shareholder accounting for mutual funds. Current value for bid and offer price can be calculated for each mutual fund through the system's Net Asset Value Calculator. Calculations may be defined differently for each fund and may be run on any frequency as needed. A Shareholder Register may also be produced for each fund. Provides multi- currency functionality. The Key Functionality and Features of TrustProcessor Include: - General Ledger Based - Trade/Settlement Date Accounting - Manages Charitable Trusts CRUTS, CRATS, Pooled Income Funds - Manages Mutual Funds and Common Trust Funds - Consolidates Multiple Asset Managers - Self Directed IRA's - Customized Reports and Forms - Multiple Report Controllers - Purchase/Sale Advice Notices - On-Line Customer Inquiry - 1099 Forms/Magnetic Media Reporting - Central Name & Address File - Automatic Market Pricing and Dividend Mapping 8 - Automatic Cash Sweep and Interest Accruals - Expense and Beneficiary Check Writing - Regenerating Tickler File - Automatic Trust Fee Calculations - Multi-Level System Security - Automatic Conversion of Customer Data, Balances, and History available - Portfolio Modeling Add-on Module available - Net Asset Value Calculator Add-on Module available - Interfaces to IRS Tax Form Preparation Software - Interfaces with several Cash Management Firms - Interfaces with Lotus 1-2-3 -8- 9 SCHEDULE B TO LICENSE AND SUPPORT SERVICES AGREEMENT SUPPORT AND MAINTENANCE "Support and Maintenance" means customary maintenance services relating to the Software, including, without limitation, (i) the installation of modifications and improvements to the Software in order to prevent or remedy unintended results, to provide greater efficiency and ease of operations, or to fulfill federal regulatory requirements, and (ii) the provision of cooperation and assistance in obtaining and providing relevant information, documentation and related materials concerning errors, issues, needs and priorities and in implementing support and maintenance corrections and procedures. -9- 10 SCHEDULE C TO LICENSE AND SUPPORT SERVICES AGREEMENT LEASED EMPLOYEE FEES Development of Modifications Services: Licensor's then prevailing rates Support and Maintenance Services: Licensor's then prevailing rates -10- EX-2.4 6 TEMPORARY PROFESSIONAL SERVICE AGREEMENT 1 EXHIBIT 2.4 TEMPORARY PROFESSIONAL SERVICES AGREEMENT TEMPORARY PROFESSIONAL SERVICES AGREEMENT (the "Agreement"), dated as of May 15, 1996, by and between BROADWAY & SEYMOUR, INC., a Delaware corporation ("BSI") and FIDELITY ASSET MANAGEMENT SERVICES, LLC, a Delaware Limited Liability Company (the "Buyer"). WHEREAS, pursuant to an Asset Purchase Agreement dated as of April 10, 1996, as amended (the "Purchase Agreement"), the Buyer is, concurrently herewith, purchasing certain assets relating to BSI's Asset Management Service Group and the business conducted thereby, including certain intellectual property owned by BancCorp System, Inc. (the "AMSG Business") from BSI and certain of its subsidiaries; and WHEREAS, because of BSI's prior experience with the operation of the AMSG Business and its existing knowledge of the sources of expertise and know-how available to furnish consulting services to that type of business, the Buyer desires to retain BSI's assistance in providing such services, and BSI is willing to provide such services to the Buyer, on the terms set forth herein; and WHEREAS, in connection herewith, BSI and Personnel (as defined below) will have access to confidential and proprietary information of Buyer and its affiliates, all of which is non-public, including, but not limited to, all products designed, developed or enhanced by the Personnel. NOW, THEREFORE, in consideration of the premises and of the mutual agreements, provisions, covenants and conditions contained in this Agreement, BSI and the Buyer hereby agree as follows: SECTION SECTION 1. Definitions. Capitalized terms used herein and not otherwise defined in this Agreement (including the schedules to this Agreement (each a "Schedule" and, 2 collectively, the "Schedules") shall have the meanings assigned such terms in the Purchase Agreement. SECTION 2. Effective Date. This Agreement shall become effective and binding on the parties hereto from and after the Closing (if the Closing shall occur). SECTION 3. Preferred Provider. Buyer hereby designates BSI as a preferred provider to Buyer of services of the types required by the Buyer's customers in connection with the AMSG Business. SECTION 4. Engagement of Personnel. (a) Buyer hereby engages BSI to provide personnel to perform services as set forth in work orders submitted by Buyer as hereinafter provided. (b) During the Initial Term, as hereinafter defined, upon receipt of a work order from Buyer, BSI agrees to locate, submit for Buyer's approval, and contract for personnel (the "Personnel") and for Tryon (as defined below) to provide programming and other analytical services with respect to the AMSG Business (the "Services") as may be designated in such work order, either utilizing those consultants of BSI listed on Schedule A or other consultants located by BSI. BSI shall submit each Personnel-candidate to Buyer for Buyer's approval before BSI formally contracts for his or her Services. Thereafter, when requested by the Buyer, BSI shall ensure that Buyer's standard Non-Disclosure Agreement for independent contractors (the "Buyer Non-Disclosure Agreement", a copy of which shall be provided to BSI as soon as possible after the execution of this Agreement and which shall be substantially in the form of the document attached hereto as Schedule D, modified as appropriate to reflect that the Personnel will be independent contractors) is completed and executed by Personnel prior to their arrival at Buyer for any required fingerprinting, badging and other clearances, including providing evidence of requisite Workmen's Compensation Insurance or the waiver thereof. Whenever Personnel is subsequently terminated or removed prior to completion of the Services, BSI shall promptly locate a replacement in accordance with the foregoing procedures. During the Initial Term Buyer will use its best efforts to continue to operate the AMSG Business in a commercially reasonable manner. -2- 3 (c) After the Personnel has been contracted for they shall be under the sole supervision and direction of Buyer with respect to the content and performance of their Services. Personnel shall perform their assignments in accordance with the directions of Buyer's project manager in charge of the project to which such Personnel have been assigned, and in accordance with Buyer's standards. While Personnel are on Buyer's premises, they shall comply with Buyer's rules, regulations, policies and security procedures. (d) Buyer shall have the right to have any Personnel supplied by BSI hereunder removed as a provider of any Services, with or without cause, upon written notice to BSI. BSI may terminate any Personnel for cause or for unwillingness to work at Buyer's location, or for refusal to execute any document required hereunder, whereupon BSI shall immediately notify Buyer and withdraw such Personnel from the Buyer's location. Whenever Personnel have been terminated as herein provided, BSI shall use reasonable efforts to furnish Buyer with a qualified replacement as promptly as possible. (e) Each work order submitted by Buyer to BSI shall identify the type of Services required, the terms within which the Services are to be performed, and an estimate of the number of hours required and the appropriate rate. (f) BSI agrees to use reasonable efforts to provide the Buyer access for the purposes of the Buyer consulting with BSI personnel with regard to the Buyer's establishment of systems and procedures to be used to replace the Services following the expiration of this Agreement; provided, however, that the Buyer will reimburse BSI for any direct incremental cost incurred by BSI in providing such consultation, including, but not limited to, travel expenses. (g) BSI currently has a contract with Tryon System Corporation ("Tryon") dated December 16, 1994 (the "Tryon Agreement", a copy of which is attached hereto as Exhibit E), effective through January 1, 1997, whereby Tryon is obligated, as a subcontractor, to perform support services for BSI or its clients. Buyer believes it will receive a substantial benefit if BSI does not exercise its rights to terminate the Tryon Agreement on or after the Closing but rather subcontracts services requested by Buyer to -3- 4 the extent available under the Tryon Agreement. All such services will be performed under Buyer's sole supervision and direction with respect to the content and performance of such services. SECTION 5. Payment. (a) Buyer agrees to compensate BSI for Services rendered by BSI's Personnel as well as services performed by Tryon on an hourly basis at the rates specified in Schedule B, or on such other negotiated basis as BSI and Buyer may hereafter agree in writing with respect to a specific request for Services. The rates specified in Schedule B have been jointly developed by the parties and reflect BSI's current average weighted cost for the Services to be provided. Schedule B shall be reviewed by the parties at the end of each six-month period and adjusted as appropriate to reflect any verified increase in costs to BSI in providing such Services, including, but not limited to, higher supply, service or equipment expenses. In addition, any expenses reasonably incurred by Tryon and Personnel in the performance of Services hereunder, including travel and living expenses, if applicable, to the extent incurred in accordance with the Tryon Agreement or previously authorized in writing by Buyer, as the case may be, shall be reimbursed by Buyer to such Personnel or Tryon at cost upon submission of documentation and itemization thereof. (b) The parties estimate that Buyer will use that average number of hours of service each month that is specified in Schedule B (the "Estimated Service Level") during the Initial Term of this Agreement. To provide BSI with adequate cash flow to cover its expenses in carrying out its obligations hereunder, Buyer will, subject to the provisions of Section 9 hereof and subject to the provisions of a letter agreement between the parties dated May 15, 1996, pay BSI for each month during the Initial Term an amount equal to (i) 1/3 of the hourly rates specified in Schedule B for each type of consultant multiplied by the Estimated Service Level for such type of consultant (the "Monthly Basic Payment") plus (ii) 2/3 of the hourly rates specified in Schedule B for the actual hours of services provided during such month, adjusted to reflect any difference between the estimated average weighted cost for the Services, as provided in Schedule B, and the actual cost of the Services during such month. At the end -4- 5 of each calendar year, the parties shall make such adjustments as may be necessary to reconcile the total payments made by Buyer with the total amount payable by Buyer hereunder. (c) All charges payable by the Buyer hereunder shall be invoiced by BSI on a monthly basis (with the first month to end on the first monthly anniversary of the Closing). All invoices must be sent to Fidelity Asset Management Services, LLC., 82 Devonshire Street - A3C, Boston, Massachusetts, 02109, Attention: Joseph M. Collins and shall conspicuously bear the purchase order number to which the invoice relates and the rate charged based upon the rate schedule. All payments from the Buyer in respect of the Services shall be due thirty (30) days from the date of the invoice. SECTION 6. Committed Services. Buyer agrees that, during each month during the Initial Term, it will obtain from BSI sufficient services from Personnel and Tryon to provide no less than the Estimated Service Level specified on Schedule B, at the rates specified in Schedule B, as adjusted herein. In addition, Buyer agrees that, of such aggregate hours, Buyer will obtain sufficient services from Tryon, of the nature provided for in the Tryon Agreement, to provide no less than the Estimated Service Level specified for Tryon in Schedule B. In addition, Buyer agrees that, of such aggregate hours, Buyer will obtain a sufficient number of hours of services from Tryon to cover the minimum fixed fees under the Tryon Agreement. In addition, BSI and the Buyer agree to negotiate in good faith regarding the provision by BSI to the Buyer of other Personnel to perform any other services (and the terms and conditions thereof) as are reasonably requested by the Buyer and are not covered by this Agreement or the Schedules. If any agreement is reached regarding such other services, it shall be evidenced by an amendment to the Schedules, at which time such services shall be subject to the provisions of this Agreement. SECTION 7. Term. The term of this Agreement shall be twenty-four (24) months after the Closing Date (the "Initial Term"), unless sooner terminated. Any extension of the term of this Agreement must be in writing as mutually agreed by the parties. -5- 6 SECTION 8. Termination and Cancellation Penalty This Agreement shall automatically terminate upon the occurrence of any of the following events: (i) BSI becomes insolvent or makes a general assignment for the benefit of its creditors; (ii) BSI files a voluntary petition of bankruptcy, suffers or permits the appointment of a receiver or trustee in bankruptcy over any or all of its business or assets; (iii) BSI becomes subject to any proceedings under any bankruptcy or insolvency law, whether domestic or foreign, or has wound up or liquidated, voluntarily or otherwise; (iv) BSI's admission of its inability to pay its debts generally as they come due ((i) through (iv) collectively shall be referred to herein as "Bankruptcy Defaults") or (v) the assignment by BSI of any of its rights or obligations under this Agreement without Buyer's permission. In addition, Buyer may in its discretion terminate this Agreement at any time upon at least 30 days prior written notice. BSI may not terminate this Agreement except in the event that Buyer fails to cure a material breach hereof committed by Buyer within ten days after Buyer's receipt of written notice from BSI of such breach. Upon any termination of this Agreement by either Party hereto (including a termination for cause by Buyer) the Tryon Agreement and all then existing BSI contracts with Personnel for Services shall be deemed to be assigned to, and the executory obligations thereunder assumed by, Buyer and, to the extent that Buyer has not fulfilled its minimum commitment to obtain Services under Section 6 hereof, Buyer shall, subject to the provisions of Section 9, pay to BSI a cancellation penalty in an amount calculated in accordance with Schedule C hereto; provided, however, that if this Agreement is terminated due to a Bankruptcy Default, any amount owing to Personnel or Tryon by BSI for services rendered prior to such Bankruptcy Default shall be deducted from the cancellation penalty payable to BSI and paid by Buyer to such Personnel or Tryon. -6- 7 SECTION 9. Buyer's Offset Rights. BSI and Buyer acknowledge that in the Purchase Agreement each of them has indemnified the other against certain Losses (as therein defined) (the "Indemnity Provisions"). BSI hereby agrees that during the Initial Term of this Agreement, whenever Buyer has a liquidated claim against BSI under the Indemnity Provisions, Buyer shall have the right to offset such claim or claims against the Monthly Basic Payments otherwise due to BSI under Section 5(b) hereof until the claim or claims have been paid in full. BSI further agrees that, beginning with the eleventh month of the Initial Term, whether or not Buyer has a then current claim under the Indemnity Provisions, Buyer shall each month withhold an amount equal to the Monthly Basic Payment for such month until it has accumulated withholdings in an aggregate amount equal to $2,000,000 less the amount of any claims paid under the preceding paragraph or as hereinafter provided, such amount to be held in escrow by Buyer for the ultimate benefit of BSI and to be applied first toward the payment of any of Buyer's liquidated claims against BSI under the Indemnity Provisions during the balance of the Initial Term with any remaining balance at the end of the Initial Term to be paid to BSI by Buyer. BSI further agrees that, if this Agreement is for any reason terminated prior to the end of the Initial Term, then Buyer may withhold and offset against any cancellation penalty then due pursuant to Section 8 hereof an amount equal to $2,000,000 (less the amount of the liquidated claims, if any, paid prior thereto in accordance with the two preceding paragraphs) and less any amounts already escrowed pursuant to the next preceding paragraph, such amount to be held in escrow by Buyer until the second anniversary of the date of this Agreement for the ultimate benefit of BSI and to be applied first toward the payment of any of Buyer's liquidated claims against BSI under the Indemnity Provisions which arise prior to such anniversary with any balance remaining on such anniversary to be paid to BSI; provided, however, that, if on such second anniversary there are any pending unliquidated claims by Buyer under the Indemnity Provisions, then that portion of the balance of said escrow fund as of such date reasonably required to pay Buyer's good faith estimate of the amount of such claims shall continue to be held in -7- 8 escrow as aforesaid until such claims have been paid or otherwise disposed of at which time any remaining balance shall be paid to BSI. For purposes of this Section, "liquidated claim" shall mean any claim of Buyer under the Indemnity Provisions which has been reduced to a final amount either by mutual agreement of the Buyer and BSI or by a final judgment or settlement in accordance with the Indemnity Provisions. The Parties agree that the provisions of this Section 9 shall survive any Termination of this Agreement and continue in full force and effect until the escrow provisions hereof have been fulfilled. SECTION 10. Limitation of Liability. Neither party shall be liable for any delays beyond its reasonable control or for any direct, consequential or incidental damages, including, without limitation, loss of profits or damage to or loss of use of any property arising out of or directly or indirectly relating to the provision of the Services pursuant to this Agreement, except to the extent of either party's willful misconduct or gross negligence. Nothing in this Section 10 shall be construed as limiting Buyer's obligation to pay BSI the amount required by Section 5, 6, 8 and 9 hereunder. SECTION 11. Access to Information. The Buyer agrees to provide to BSI all information necessary for BSI to provide the Services required pursuant to this Agreement. BSI shall maintain all such information in confidence in accordance with the provisions of Section 13 hereof. SECTION 12. Successors and Assigns. This Agreement shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by either party, without the consent of the other party hereto and such attempted assignment shall be null and void, provided, however, that the Buyer shall have the right to assign its rights hereunder to any Affiliate of the Buyer which succeeds to the business of the Buyer relating to the AMSG Business; provided further, however, that such assignee shall execute a counterpart of this Agreement agreeing to be bound by the provisions hereof as the "Buyer," and agreeing to -8- 9 be jointly and severally liable with the assignor and any other assignee for all of the obligations of the assignor hereunder, but no such assignment of this Agreement or any of the rights or obligations hereunder shall relieve the Buyer of its obligations under this Agreement. SECTION 13. Confidentiality. BSI agrees not to disclose to others, advertise or publish that it is performing or has performed any work or service on behalf of Buyer whether under this Agreement or otherwise. BSI acknowledges and understands the competitive value and confidential nature of internal, non-public financial and business information of Buyer. BSI also understands that all information relating thereto ("Proprietary Information") is confidential, proprietary and trade secrets of Buyer and its Affiliates. BSI agrees to use its best efforts (the same being not less than that employed to protect its own proprietary information) to safeguard the Proprietary Information and to prevent the unauthorized, negligent or inadvertent use or disclosure thereof. Specifically and without limiting the foregoing, BSI agrees to require Personnel to be bound by a written Buyer Non-Disclosure Agreement. BSI shall not, without the prior written approval of an officer of Buyer, directly or indirectly, use or disclose the Proprietary Information to any person or business entity except to a limited number of employees of BSI on a need-to-know basis. BSI shall not in any manner copy or reproduce all or any portion of the Proprietary Information without the prior written approval of an officer of Buyer. Notwithstanding anything in this Agreement to the contrary, BSI may disclose such Proprietary Information: (a) as may be legally required in response to any summons, order or subpoena issued by a court or governmental agency, provided BSI provides Buyer with immediate notification of such summons, order or subpoena; (b) which is or becomes available to the general public through no act or failure by BSI; (c) which is subsequently disclosed to BSI on a non-confidential basis by a third party not having a confidential relationship with Buyer or its Affiliates which rightfully acquired such information. -9- 10 BSI shall, upon completion or other termination of any Personnel's engagement or upon demand by Buyer, whichever is earlier, promptly return to Buyer any and all Proprietary Information relating to such engagement in BSI's possession together with any copies or reproductions thereof in BSI's possession. BSI shall at such time provide Buyer with a certificate signed by an officer of BSI certifying that all such Proprietary Information has been returned to Buyer. BSI shall promptly notify Buyer in writing upon learning of any unauthorized, negligent or inadvertent use or disclosure of Proprietary Information. BSI acknowledges and understands that the use or disclosure of the Proprietary Information in any manner inconsistent with this Agreement will cause Buyer irreparable damage. Buyer shall have the right to: (i) equitable and injunctive relief to prevent such unauthorized, negligent or inadvertent use or disclosure; and (ii) recover the amount of all such damage (including attorneys' fees and expenses) to Buyer in connection with such use or disclosure. BSI authorizes Buyer, its Affiliates and their agents to conduct a security and background investigation of Personnel including, but not limited to, parties for whom Personnel have performed services, governmental agencies, credit reporting institutions, educational institutions, and other companies, agencies, and organizations. The provisions of this Article shall survive the termination or cancellation of this Agreement or any agreement for services between BSI and Buyer. SECTION 14. Ownership. BSI shall require each Personnel to sign the Buyer Non-Disclosure Agreement. In addition, BSI hereby assigns to Buyer all of its rights, title and interest under Section 5.4 of the Tryon Agreement. BSI agrees when requested by Buyer to execute all rightful oaths, assignments, instruments of transfer, powers of attorney and other papers and to communicate to Buyer all facts known to BSI relating to the development, implementation and reduction to practice of any inventions by Personnel or Tryon within the scope of this -10- 11 Agreement and to do everything reasonably possible which Buyer may consider desirable for securing and maintaining protection of any copyrights, inventions and trade secrets created within the scope of this Agreement and vesting title thereto in Buyer. BSI further agrees, where necessary to obtain the agreement and cooperation of all employees, officers, agents and subcontractors of BSI who may reasonably be considered an inventor or co-inventor of an implementation, development, modification or reduction to practice of any such inventions or an author of any such copyright to assign their entire right, title and interest in and to the inventions and/or copyright to Buyer and to execute all oaths, declarations, powers of attorney and the like as Buyer may reasonably request in furtherance of its attempts to protect the inventions by way of patent or otherwise. SECTION 15. Independent Contractor. The relationship of each party that is created hereunder is that of an independent contractor. This Agreement is not intended to create and shall not be construed as creating between the parties the relationship of affiliate, principal and agent, joint venture, partnership, or any other similar relationship, the existence of which is hereby expressly denied. Nothing in this Agreement shall be construed to create an employer-employee relationship between Buyer and any Personnel supplied by BSI. SECTION 16. Insurance. BSI, at its own expense, shall procure and maintain policies of insurance to include the following coverage: (i) Workers' Compensation Insurance coverage for its own employees that meets or exceeds the applicable statutory limits, as well as Employer's Liability coverage with limits of at least $500,000; (ii) Comprehensive General Liability Insurance of at least $1,000,000 combined single limit; and (iii) Comprehensive Automobile Liability Insurance, including Automobile Non-Ownership Liability, with a limit of not less than $1,000,000 and Umbrella or Excess Liability Insurance in an amount not less than $5,000,000. -11- 12 BSI shall furnish Buyer with a Certificate of Insurance evidencing the coverage listed above and, where applicable, naming Buyer as an additional insured. No insurance policies listed above may be canceled by BSI unless Buyer has received ten (10) business days prior written notice of BSI's intent to cancel such policy. Nothing in this Section 16 shall be deemed to limit BSI's responsibility under this Agreement to the amounts stated above or to any limits of BSI's insurance policies. SECTION 17. Notice. Any notice, request, instruction or other document to be given hereunder by any party hereto to any other party (other than the written documentation which is part of the Services, which shall be furnished to the Buyer at its address as requested by it) shall be in writing and shall be given (and will be deemed to have been duly given upon receipt) by delivery in person, by electronic facsimile transmission, cable, telegram, telex or other standard form of telecommunications, by overnight courier or by registered or certified mail, postage prepaid, addressed as follows. if to BSI: Broadway & Seymour, Inc. 128 South Tryon Street Charlotte, North Carolina 28202 Attention: General Counsel Telecopy: (704) 344-3542 -12- 13 with a copy to: Robinson, Bradshaw & Hinson, PA One Independence Center 101 North Tryon Street, Suite 1900 Charlotte, North Carolina 28246-1900 Attention: Robert Bryan, Esq. Telecopy: (704) 378-4000 if to the Buyer to: Fidelity Asset Management Services, LLC Fidelity Systems Company 82 Devonshire Street Boston, MA 02109 Attention: Joseph M. Collins Telecopy: (617) 476-6699 With copies to: Ropes & Gray One International Place Boston, MA 02110 Telecopy: 617-951-7050 Attention: John A. Ritsher, Esq. or at such other address for a party as shall be specified by written notice. SECTION 18. Modification and Waiver. No amendment, modification or alteration of the terms or provisions of this Agreement or any Schedule shall be binding unless the same shall be in writing and duly executed by the parties hereto, except that any of the terms or provisions of this Agreement or any Schedule may be waived in writing at any time by the party which is entitled to the benefits of such waived terms or provisions. No waiver of any of the provisions of this Agreement or any Schedule shall be deemed to or shall constitute a waiver of any other provision of this Agreement or any Schedule, whether or not similar. No waiver by any party of any breach or violation of this Agreement or any Schedule shall be deemed or construed as a waiver of any subsequent -13- 14 breach or violation thereof, whether or not similar. No delay on the part of any party in exercising any right, power or privilege hereunder or under any Schedule shall operate as a waiver thereof. SECTION 19. Entire Agreement. Except for and without limiting any party's rights under the Purchase Agreement, this Agreement and the Schedules constitute the entire agreement and understanding between the parties and supersede all prior proposals, commitments, negotiations and understandings, whether written or oral, and all other communications between the parties relating to the subject matter hereof. SECTION 20. Governing Law. This Agreement shall be governed by and construed in accordance with the domestic substantive laws of the Commonwealth of Massachusetts, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction. SECTION 21. Severability. The provisions of this Agreement and the Schedules shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof or of any Schedule. If any provision of this Agreement or any Schedule, or the application thereof to any person or entity or any circumstance, is invalid or unenforceable: (i) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision; and (ii) the remainder of this Agreement and the Schedules and the application of such provision to other persons, entities or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction. SECTION 22. Third Party Beneficiaries. Except as expressly provided herein, nothing in this Agreement or in any Schedule shall entitle any Person other than the parties or their respective successors and assigns permitted hereby to any claim, cause of action, remedy or right of any kind. SECTION 23. Force Majeure. BSI shall be excused for failure to provide the Services hereunder to the extent that such failure is directly or indirectly caused by an occurrence commonly known as force majeure. In the event that BSI's performance hereunder is affected by an event of force majeure, BSI shall promptly notify the Buyer of the same, giving reasonably full particulars thereof, and insofar as known, the probable -14- 15 extent to which it will be unable to perform, or will be delayed in performing, its obligations hereunder and shall use its reasonable efforts to remove such force majeure as quickly as possible. SECTION 24. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same document. -15- 16 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. BROADWAY & SEYMOUR, INC. By: /s/ Alan C. Stanford ----------------------------------- Name: Alan C. Stanford Title: President FIDELITY ASSET MANAGEMENT SERVICES, LLC By: /s/ Paul Hondros ----------------------------------- Name: Title: President -16- 17 TEMPORARY PROFESSIONAL SERVICES AGREEMENT SCHEDULE A CONSULTANTS
Company Individual - ------- ---------- Tryon Systems Computer Personnel CAI Rishavy, Adreinne Sawyer & Associates Sawyer, P. Advanced Software Maas, J. Advanced Software Shaw, D. Strategic Staffing Cooper, A Strategic Staffing Denkler, D. Strategic Staffing Geiger, R. Strategic Staffing Moffitt, W. IMI Systems Cocivera, J. IMI Systems Francis, L. IMI Systems Spilker, A. IMI Systems Moreno, R. Olmstead Bennet, M. Olmstead Brayman, L. Olmstead Bracken, P. Olmstead Ramsdel, L. Olmstead Wilson, R. Olmstead Marinilli, N. Computer Professionals (CPI) Sciranko, R. Computer Professionals (CPI) St. Vincent, L. Corporate Staffing Ryan, S. Corporate Staffing McBride, S. Ciber Rowan, M. Ciber Gordon, K. Ciber Coffey, M. Adia Personnel Services Ferguson, P. Adia Personnel Services Amidan, P. Dawn Personnel Cooper, M. Dawn Personnel Cassidy, D.
18 Office Team Sisk, T. Fusion Systems Group Hogan, J. Fusion Systems Group Holzinger, S. Fusion Systems Group Kraffmiller, E. Fusion Systems Group Nash, M. Seek Consulting Lypka, D. Seek Consulting Gaines, J. Seek Consulting Mehta, M. Seek Consulting Abraham, I. Seek Consulting Gordon, K. Computer People, Inc. Abraham, I. Kelly Services Lowrey, M. SPC Midwinter, R. Premier Alliance Shivaiah, V. Premier Alliance Chaware, R.
19 TEMPORARY PROFESSIONAL SERVICES AGREEMENT SCHEDULE B FEE SCHEDULE
Est. Service Level Average Weighted (per month) Cost/hour Tryon Consultants 1,500 $136.49 Personnel 2,889 $80.58 ----- 4,389
20 SCHEDULE C CANCELLATION PENALTY The cancellation penalty shall be calculated by multiplying the Monthly Basic Payment by the number of months remaining until the originally scheduled end of the Initial Term. EX-2.5 7 GUARANTEE AND INDEMNITY AGREEMENT 1 EXHIBIT 2.5 EXECUTION COPY GUARANTEE AND INDEMNITY AGREEMENT This Agreement is entered into this 10th day of April, 1996 by and between BROADWAY & SEYMOUR, INC., a Delaware corporation with its principal place of business in Charlotte, North Carolina, ("BSI") and FIDELITY INVESTMENTS INSTITUTIONAL SERVICES, INC. ("FIIS"), a Massachusetts corporation with its principal place of business in Boston, Massachusetts. Certain capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Asset Purchase Agreement dated as of April 10, 1996, by and among BSI and certain of its subsidiaries and FIIS (the "Purchase Agreement). BACKGROUND WHEREAS, FIIS, BSI and certain wholly-owned subsidiaries of BSI (the "Sellers"), have entered into the Purchase Agreement, wherein the Sellers have agreed to sell the AMSG Business to FIIS; WHEREAS, FIIS and CORBEL & COMPANY, a Florida corporation with its principal place of business in Jacksonville, Florida (on behalf of itself and its wholly-owned subsidiary TOTAL ADMINISTRATIVE BENEFIT SYSTEMS, INC. (d/b/a Pentab) (referred to hereinafter collectively, for all purposes, as "Corbel") have entered into that certain Quantech License and Services Agreement of even date herewith (the "Quantech License"); WHEREAS, it is a condition to the execution of the Quantech License that FIIS and BSI enter into this Agreement, pursuant to which, among other things, BSI unconditionally guarantees the obligations of Corbel under the Quantech License and agrees to indemnify FIIS with respect to certain matters thereunder and hereunder. NOW, THEREFORE, the parties hereto agree for themselves, their successors and assigns as follows: 1. DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth below: 1.1. "Affiliate" means any other Person directly or indirectly Controlling, Controlled by or under common Control with a Person. 1.2. "Control" means an ownership interest of forty percent (40%) or more. 1 2 1.3. "Documentation" means all written, graphic and electronic materials currently in Corbel's possession, that describe the structure, function or use of the Quantech Software or any Enhancement, including all specifications, system documentation and user manuals. 1.4. "Enhancements" means any modification, enhancement, refinement, variation or new version of the Quantech Software, in both object code and source code form, and all Documentation relating thereto, that is created by Corbel and made generally commercially available to the then current licensees of the Quantech Software as an upgrade (whether or not a maintenance fee is charged to such licensee for the upgrade), during the period commencing on the date hereof and ending two years thereafter. Enhancement shall not include any new version of, or a replacement to, the Quantech Software that is available only as a newly licensed product. Solely for the purposes of the representations and warranties contained in Section 3 hereof, Enhancement shall not include any Enhancement created by any successor to or assignee of Corbel or the Quantech Software, if but only if, such successor or assignee is not an Affiliate of BSI. 1.5. "Knowledge" means actual knowledge after reasonable investigation. 1.6. "Quantech Software" means the most current, premium version, as of the date of this Agreement, of the computer software program described in Schedule A, attached to the Quantech License and incorporated herein, and commonly referred to by Licensor as "Quantech", in both object code and source code form, and all Documentation relating thereto. 2. GUARANTEE. For value received and to induce FIIS to enter into the Quantech License, BSI hereby unconditionally guarantees the performance of all of the obligations of Corbel, its successors and assigns, under the Quantech License. Upon any default under the Quantech License, FIIS may at its option proceed directly and at once, without further notice, against BSI hereunder, without proceeding against Corbel or its successors or assigns, or any other person for the obligations secured by this guarantee. BSI hereby waives and relinquishes to the fullest extent now or hereafter not prohibited by applicable law (a) all suretyship defenses and defenses in the nature thereof, (b) any right or claim of right to cause a marshalling of the assets of Corbel, (c) all rights and remedies, including any rights of subrogation or contribution now or hereafter accorded to indemnitors, guarantors, sureties or accomodation parties, and (d) notice of acceptance hereof, presentment, and demand for payment. The above notwithstanding, FIIS agrees to cooperate in good faith with BSI and to provide reasonable assistance to BSI (at BSI's expense) should BSI decide to enforce the obligation of any successor of Corbel to provide FIIS Enhancements under the Quantech License, by bringing suit against such successor. Without limitation, FIIS agrees to join in such suit for the purpose of assisting BSI in enforcing FIIS's rights thereunder. -2- 3 3. REPRESENTATIONS AND WARRANTIES OF BSI. BSI hereby represents and warrants to FIIS, for itself and where applicable for Corbel, that, except as disclosed in the attached Corbel Disclosure Statement: 3.1. Organization. Corbel and BSI are corporations, duly organized, validly existing, and in good standing under the laws of Florida and Delaware, respectively. Corbel and BSI are qualified to do business as a foreign corporation in every jurisdiction in which each is required to be so qualified, except for those jurisdictions where the failure to be so qualified will not have a material adverse effect on Corbel or BSI. 3.2. Authorization of Transaction. Corbel has the corporate power and authority to execute and deliver the Quantech License and to perform its obligations thereunder. BSI has the corporate power and authority to execute and deliver this Agreement. No approval by the stockholders of Corbel or BSI of the Quantech License or this Agreement and the transactions contemplated thereby and hereby is required by the charter or by-laws of Corbel or BSI or by applicable corporate law. All corporate and other actions or proceedings to be taken by or on the part of Corbel and BSI to authorize and permit the execution and delivery by Corbel of the Quantech License and to permit the execution and delivery by BSI of this Agreement, the instruments required to be executed and delivered by Corbel and BSI pursuant thereto and hereto, the performance by Corbel and BSI of their obligations thereunder and hereunder, and the consummation by Corbel and BSI of the transactions contemplated therein and herein, have been duly and properly taken. The Quantech License has been duly executed and delivered by Corbel and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms and conditions. This Agreement has been duly executed and delivered by BSI and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms and conditions. 3.3. Noncontravention. Neither the execution and the delivery of the Quantech License and the consummation of the transactions contemplated thereby, nor the execution and the delivery of this Agreement and the consummation of the transactions contemplated hereby will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Corbel or BSI is subject or any provision of the charter or by-laws of Corbel or BSI or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any material agreement, contract, lease, license, instrument, or other arrangement to which Corbel or BSI is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Lien upon any of its assets). Neither Corbel nor BSI need give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the parties to consummate the transactions contemplated by the Quantech License and this Agreement. -3- 4 3.4. Brokers' Fees. Neither Corbel nor BSI has any liability or obligation to pay any fees or commissions to any broker, finder, agent or financial advisor with respect to the transactions contemplated by the Quantech License or this Agreement for which FIIS could become liable or obligated. 3.5 Title to Quantech Software. Corbel has good and marketable title to the Quantech Software and the Enhancements, including all rights to the Intellectual Property embodied therein, free and clear of all Liens and encumbrances and free from all claims and demands of third parties. Corbel has all the necessary right, title and interest in the Quantech Software and the Enhancements to grant the licenses contemplated in the Quantech License, including all necessary rights to any portion of the Quantech Software or any Enhancement created by an independent contractor or other third party. Corbel has taken all necessary action to maintain and protect the Quantech Software and any Enhancements. 3.6. Intellectual Property. 3.6.1. The use of the Quantech Software and any Enhancements by FIIS will not violate the Intellectual Property rights of any third party. The Quantech Software and any Enhancements are free and clear of any claim of third party infringement of any Intellectual Property right, and there are no actions proceeding, pending, or to the best Knowledge of BSI, threatened which claim that the Quantech Software or any Enhancements, or any part thereof, infringes upon or is infringed by any Intellectual Property right of any third party. 3.6.2. Corbel either developed the Quantech Software and any Enhancements internally or acquired the Quantech Software or Enhancements by (a) acquisition of the former developer of such software or (b) valid assignments. From and after the date upon which Corbel acquired the Quantech Software and any Enhancements, Corbel has developed all proprietary modifications, enhancements, new versions and derivative works relating to such Quantech Software and any Enhancements (i) through the internal efforts of employees of Corbel or (ii) through the use of independent contractors or other third parties, all of whom have assigned all rights in such modifications, enhancements, new versions and derivative works to Corbel. 3.7. Subsidiaries. BSI holds of record and owns beneficially all of the outstanding shares of Corbel, free and clear of any restrictions on transfer, taxes, Liens, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. The minute books (containing the records of meetings of stockholders, the board of directors, and any committees of the board of directors), the stock certificate books, and the stock record books of each of Corbel and BSI are correct and complete in all material respects. Neither Corbel nor BSI is in default under or in violation of any provision of its charter or bylaws. -4- 5 3.8. Powers of Attorney. There are no outstanding powers of attorney executed on behalf of either Corbel or BSI in respect of the Quantech Software. 3.9. Security Measures, etc. The Quantech Software and any Enhancement does not contain any mechanism that would enable Corbel or any other party to disable the Quantech Software or any Enhancment or make it inaccessible to a user. Corbel and BSI agree to use their best efforts to ensure that the Quantech Software and any Enhancement does not contain any computer virus or worm. 3.10. Disclaimer. EXCEPT AS OTHERWISE PROVIDED HEREIN, BSI EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 3.11. Disclosure. The representations and warranties contained in this Section 3 (including the Corbel Disclosure Statement) do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this Section 3 not misleading. 4. BSI COVENANTS. The parties agree as follows: 4.1. Sales Tax. BSI agrees to pay fifty percent (50%) of any sales tax applicable to the Quantech License or this Agreement. 4.2. Other Sales by BSI or Corbel. BSI agrees that it will not sell the stock of Corbel to a competitor of FIIS, and will not permit Corbel to sell substantially all of its assets relating to the Quantech Software to a competitor of FIIS, during the four (4) month period commencing on the earlier of (a) the date of the Closing under the Purchase Agreement or (b) May 31, 1996. 4.3. Bidding Rights. BSI agrees that, if after the date hereof, a determination is made to market that portion of Corbel's business which relates to the Quantech Software, either standing alone or as part of Corbel's business as a whole, BSI will provide FIIS an opportunity, on the same terms as all other third parties, to bid for that business. 5. CONFIDENTIALITY. Each of the parties will treat and hold as such all of the Confidential Information of the other parties, refrain from using any of the Confidential Information except in connection with this Agreement, and deliver promptly to the party to which it relates or destroy, at the request and option of such party, all tangible embodiments (and all copies) of the Confidential Information which are in its possession. In the event that any of the parties is requested or required (by oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or -5- 6 similar process) to disclose any Confidential Information of any other party, such party will notify the other party promptly of the request or requirement so that the other party may seek an appropriate protective order or waive compliance with the provisions of this Section 5. If, in the absence of a protective order or the receipt of a waiver hereunder, any of the parties is, on the advice of counsel, compelled to disclose Confidential Information of any other party, to any tribunal or else stand liable for contempt, such party may disclose the Confidential Information to the tribunal; provided, however, that the disclosing party shall use its best efforts to obtain, at the request of the other party, an order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed as the other party shall designate. 6. INDEMNIFICATION. 6.1. Survival of Representations and Warranties. All of the representations and warranties of BSI contained herein or in any document, certificate or other instrument required to be delivered hereunder shall survive the date hereof and continue in full force and effect, subject to Section 6.4.2 hereof and any applicable statutes of limitations. All covenants and indemnities of BSI in this Agreement or in any document or certificate delivered hereunder shall, unless otherwise specifically provided therein, remain in full force and effect forever. Except for the rights of FIIS under Section 2 hereof, the indemnification rights set forth in this Section 6 shall be the exclusive remedy of any of the parties with respect to any matters within the scope of this Section 6. 6.2. Indemnity by BSI. BSI hereby agrees to indemnify, defend and hold harmless FIIS and its directors, officers and Affiliates against and in respect of all Liabilities, obligations, judgments, Liens, injunctions, charges, orders, decrees, rulings, damages, dues, assessments, Taxes, losses, fines, penalties, expenses, fees, costs or amounts paid in settlement (including reasonable attorneys' and expert witness fees and disbursements in connection with investigating, defending or settling any action or threatened action), arising out of any claim, damages, complaint, demand, cause of action, audit, investigation, hearing, action, suit or other proceeding asserted or initiated or otherwise existing in respect of any matter (a "Loss" or collectively, the "Losses") that results from the breach of any representation, warranty or covenant made by BSI herein, or resulting from any misrepresentation or breach of warranty or from any misrepresentation in or omission from any schedule or certificate required to be furnished by BSI hereunder. 6.3. Matters Involving Third Parties. 6.3.1. If any third party shall notify FIIS (the "Indemnified Party") with respect to any matter (a "Third Party Claim") which may give rise to a claim for indemnification against BSI (the "Indemnifying Party") under this Section 6, then the Indemnified Party shall promptly notify the Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve -6- 7 the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced. 6.3.2. The Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified Party in writing within 15 days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any Losses within the scope of Section 6.2 the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim, (B) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (C) the Third Party Claim involves only money damages and does not involve an injunction or other equitable relief which, in the reasonable opinion of the Indemnified Party, materially affects its business and (D) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently. 6.3.3. So long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 6.3.2 above, (A) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, (B) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not unreasonably be withheld), and (C) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim unless written agreement is obtained releasing the Indemnified Party from all liability thereunder. 6.3.4. In the event any of the conditions in Section 6.3.2 above is or becomes unsatisfied, however, (A) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it may deem appropriate (provided that the Indemnified Party shall consult with and obtain the consent (which shall not be unreasonably withheld) of the Indemnifying Party in connection therewith), (B) the Indemnifying Party will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys' fees and expenses), and (C) the Indemnifying Party will remain responsible for any Losses the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this Section 6. In the event the Indemnified Party assumes control of the defense of any Third Party claim as herein provided, the Indemnifying Party may nevertheless retain separate counsel at its sole cost and expense to participate in the defense thereof and to consult with counsel for the Indemnified Party with respect to conduct of the defense and to considerations relating to entry of judgment or settlement. -7- 8 6.4. Limitations on Indemnification. 6.4.1. Monetary Limits. Except with respect to (i) Losses arising out of representations or warranties contained in Section 3.5 or 3.6 or any Schedule referred to in such Section and (ii) Losses based upon fraud or which arise out of or are attributable to acts or omissions that constitute willful misconduct or malfeasance, gross negligence or criminal conduct, BSI, as the Indemnifying Party shall have no obligations to indemnify FIIS in respect of any Loss of a type identified in Section 6.2 incurred by FIIS unless the aggregate cumulative total of all such Losses exceeds $250,000, whereupon FIIS shall be entitled to indemnification for each additional amount of such Losses described above; provided, that in no event shall the aggregate indemnity obligation of BSI exceed $5,000,000. With respect to claims referred to in clauses (i) and (ii) of this Section 6.4.1, the $250,000 cumulative deductible shall not apply. 6.4.2. Time Limitation. Except for claims asserted by FIIS for Losses referred to in clause (i) of Section 6.4.1, no claim may be made or suit instituted under any provision of this Section 6 following the second anniversary of the date hereof. 7. MISCELLANEOUS. 7.1. Press Releases and Public Announcements. Neither FIIS nor BSI or Corbel shall issue any press release or make any public announcement relating to the subject matter of the Quantech License or this Agreement without the prior written approval of the other party; provided, however, that any party may make any public disclosure it believes in good faith, based on the opinion of its counsel, is required by applicable law or any listing or trading agreement concerning its publicly-traded securities (in which case the disclosing party will use its best efforts to advise the other party prior to making the disclosure). 7.2. No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any Person other than the parties and their respective successors and permitted assigns. 7.3. Entire Agreement. This Agreement, the Purchase Agreement and the Quantech License (including the documents referred to herein and therein) constitute the entire agreement between the parties and supersedes any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they related in any way to the subject matter hereof. 7.4. Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. BSI shall not assign this Agreement without the prior written consent of FIIS. FIIS may assign this Agreement to the extent that FIIS may assign its rights under Section 10.3 of the Quantech License. -8- 9 7.5. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. 7.6. Headings. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. 7.7. Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) upon confirmation of facsimile, (ii) when sent by overnight delivery and (iii) when mailed by registered or certified mail return receipt requested and postage prepaid at the following address: If to BSI: Broadway & Seymour, Inc. 128 South Tryon Street Charlotte, NC 28202 Attn: President Telecopy: (704) 344-3542 Copy to: Broadway & Seymour, Inc. 128 South Tryon Street Charlotte, NC 28202 Attn: General Counsel Telecopy: (704) 344-3542 If to FIIS: 82 Devonshire Street Boston, MA 02109 Telefax: (617) 476-0932 Attn: President -9- 10 Copy to: 82 Devonshire Street Boston, MA 02109 Telefax: (617) 476-0932 Attn: General Counsel Any party may send any notice, request, demand, claim, or other communication hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other party notice in the manner herein set forth. 7.8. Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of The Commonwealth of Massachusetts without giving effect to any choice or conflict of law provision or rule (whether of The Commonwealth of Massachusetts or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than The Commonwealth of Massachusetts. 7.9. Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the parties. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence. 7.10. Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. 7.11. Expenses. Each of BSI and FIIS will bear its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby. 7.12. Relationship of Parties. This Agreement is not intended to and does not create a partnership or joint venture relationship among the parties. -10- 11 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as the year and date first above written. BROADWAY & SEYMOUR, INC. FIDELITY INVESTMENTS INSTITUTIONAL SERVICES, INC. By: /s/ Alan C. Stanford By: /s/ Paul J. Hondros --------------------------- --------------------------- Title: President Title: President -11- 12 CORBEL DISCLOSURE STATEMENT 3.5 Title to Quantech Software (1) All assets owned by Corbel are subject to a lien in favor of NationsBank securing the guarantee executed by Corbel of all obligations of BSI under the Credit Facility. In addition, certain software and support materials owned by Corbel is pledged to secure a subordinated promissory note owing to Mr. Dubois. (2) Solely with respect to the representation contained in the third sentence of Section 3.5, BSI makes the following disclosures: (A) Corbel has not registered any Copyrights on the Quantech Software or any Enhancements, (B) in addition, Corbel has not applied for or obtained any Patents with respect to the Quantech Software or any Enhancements (C) Corbel has not required all of its employees to execute confidentiality agreements or assignment of invention rights agreements and has not required all independent contractors to execute agreements subjecting them to an obligation of confidentiality, or an assignment of copyrights, invention rights or other intellectual property rights. 3.6 Intellectual Property (1) Corbel has received notice that the name "Quantec" has been registered with the U.S. Patent and Trademark Office (PTO) by a British Company. In response to an application by Corbel to register the trademark "Quantech," the PTO, in March 1995, notified Corbel of its intention to deny registration of the mark. 3.7 Subsidiaries (1) The stock of Corbel is pledged to NationsBank to secure BSI's obligations under the Credit Facility. -12- EX-2.5A 8 AMENDMENT NO 1 TO GUARANTEE AND INDEMNITY AGREEMNT 1 EXHIBIT 2.5A AMENDMENT NO. 1 TO GUARANTEE AND INDEMNITY AGREEMENT This Amendment No. 1 to Guarantee and Indemnity Agreement ("Agreement") is entered into this 15th day of May, 1996 by and between BROADWAY & SEYMOUR, INC., a Delaware corporation with its principal place of business in Charlotte, North Carolina, ("BSI") and FIDELITY INVESTMENTS INSTITUTIONAL SERVICES, INC. ("FIIS"), a Massachusetts corporation with its principal place of business in Boston, Massachusetts. Certain capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Guarantee and Indemnity Agreement dated April 10, 1996 ("Guaranty"), by and between BSI and FIIS. BACKGROUND WHEREAS, FIIS, BSI and certain wholly-owned subsidiaries of BSI (the "Sellers"), have entered into the Purchase Agreement, wherein the Sellers have agreed to sell the AMSG Business to FIIS; WHEREAS, FIIS and CORBEL & COMPANY, a Florida corporation with its principal place of business in Jacksonville, Florida (on behalf of itself and its wholly-owned subsidiary TOTAL ADMINISTRATIVE BENEFIT SYSTEMS, INC. (d/b/a Pentab) (referred to hereinafter collectively, for all purposes, as "Corbel") have entered into that certain Quantech License and Services Agreement dated April 10, 1996 (the "Quantech License"); WHEREAS, as a condition to the execution of the Quantech License, FIIS and BSI entered into the Guaranty, pursuant to which, among other things, BSI unconditionally guaranteed the obligations of Corbel under the Quantech License and agreed to indemnify FIIS with respect to certain matters thereunder and under the Guaranty; WHEREAS, the parties now desire to amend the Guaranty as set forth below. NOW, THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree for themselves, their successors and assigns as follows: 1. Section 7 of the Guaranty is hereby amended to add a new Section 7.13, as follows: -1- 2 "7.13. Transfer or License of Quantech Software and Enhancements. Notwithstanding any other provision of this Agreement, including the limitation of remedies set forth in Section 6, BSI covenants and agrees, in perpetuity, that (a) in the event of any sale, assignment or other transfer of substantially all the assets of Corbel, including the Quantech Software and Enhancements, to any party (other than licenses to end-users granted in the ordinary course), BSI shall cause Corbel to sell, assign, or otherwise transfer to such party the entire Quantech License and all of Corbel's rights and obligations thereunder and shall cause such party to expressly assume in writing all the obligations under the Quantech License or to agree in a written instrument of which FIIS is expressly made a third party beneficiary that such party will comply with all of the obligations of Corbel thereunder, and (b) in the event of any other sale, assignment, transfer or license of any rights in the Quantech Software and Enhancements by Corbel to any party (other than licenses to end-users granted in the ordinary course), BSI shall cause Corbel to require such party to comply with all of Corbel's obligations under Section 7.1.2 of the Quantech License. 2. The remainder of the Guaranty shall remain unchanged and in full force and effect. [This space intentionally left blank] -2- 3 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as the year and date first above written. BROADWAY & SEYMOUR, INC. FIDELITY INVESTMENTS INSTITUTIONAL SERVICES, INC. By: /s/ Alan C. Stanford By: /s/ Paul J. Hondros --------------------------- --------------------------- Title: President Title: President -3- EX-2.6 9 TRANSITION SERVICES AND SUPPORT AGREEMENT 1 EXHIBIT 2.6 TRANSITION SERVICES AND SUPPORT AGREEMENT THIS TRANSITION SERVICES AND SUPPORT AGREEMENT (this "Agreement") is entered into this day of May, 1996 by and between Broadway & Seymour, Inc., a Delaware corporation with its principal place of business in Charlotte, North Carolina ("BSI"), acting on behalf of itself and its subsidiaries, and Fidelity Asset Management Services, LLC, a Delaware limited liability company with a principal place of business in Massachusetts ("Buyer"). BACKGROUND STATEMENT Contemporaneously herewith, pursuant to an Asset Purchase Agreement, dated as of April 10, 1996, as amended (the "Asset Purchase Agreement"), Buyer has purchased the Asset Management Services Group of BSI (the "Division") through a purchase of substantially all of the assets and the assumption of certain obligations of the Division. In connection with that transaction, the parties agreed that BSI will provide certain transition services to Buyer for a period of approximately one year from the Closing, and that BSI will also make available to Buyer certain other assets, and provide certain other support services to Buyer, all as set forth herein. Terms used but not defined herein shall have the meaning given to them in the Asset Purchase Agreement. AGREEMENT In consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Transition Services. During the term of this Agreement, BSI shall provide to Buyer, upon Buyer's request, consulting and advisory services (the "Transition Services") relating to the business of the Division and its transition to Buyer ownership. The Transition Services may include consultation and advice with respect to customer relationships, product development, marketing, strategic planning and similar management issues relating to the business of the Division. The Transition Services may also include contacting existing BSI customers to encourage such customers to continue their relationship with the Division after the acquisition thereof by Buyer. Notwithstanding the foregoing, BSI shall not be required to perform any Transition Services that (a) would cause it to breach any agreement binding on it, (b) would require disclosure of confidential or proprietary information of BSI, (c) or would be otherwise unreasonably burdensome with respect to the continuing business of BSI. 2 2. Fee for Transition Services. In exchange for the Transition Services, Buyer shall pay to BSI a fee (the "Transition Fee") of One Million Dollars ($1,000,000), payable in six monthly installments on the 15th of each month, commencing May 15, 1996. 3. Additional Services. BSI shall provide to Buyer the additional services (the "Support Services") described on Schedule 1 to this Agreement, including both BSI-performed services, such as administrative services relating to office operational support and finance services relating to payroll, taxes, accounts payable, and the provision of access to and use of tangible goods, such as telephone equipment, computer PC Software and hardware, such services to be provided in a manner generally consistent with the provision of such services by BSI for its own use. In exchange for these Support Services, Buyer agrees to the pay the fees related to such Support Services specified on Schedule 1 in each case pro-rated on a per diem basis where said resources are only utilized for a partial month, and to reimburse BSI for any out-of-pocket costs related to such Support Services, such as telephone charges incurred by BSI on behalf of Buyer. The parties acknowledge that the fees set forth in Schedule 1 are based on good faith estimates of BSI's costs (or BSI's good faith estimate of the percentage of cost incurred by BSI) in providing the Support Services. The parties agree to review and, if appropriate, adjust such fees at the end of each month. Fees for Support Services hereunder shall be payable monthly in arrears, commencing May 31, 1996, upon receipt of BSI's invoice detailing such fees. 4. Term. This Agreement shall commence on the Closing Date and shall continue for one year, subject to the earlier termination of the Support Services as provided herein. Buyer shall have the right to terminate separately priced, discrete portions of the Support Services as of stated dates by providing prior written notice to BSI: in the case of any Administrative or MIS Services, not less than 30 days' prior notice of the termination date shall be given; in the case of tangible property use, not less than 60 days prior notice of the termination date shall be given. Notwithstanding the foregoing, whenever the payment obligation hereunder is based upon an underlying lease or purchase obligation of BSI, such payment obligation shall terminate upon Buyer's assumption of such underlying obligation. To the extent reasonably practicable, Buyer shall endeavor to provide BSI with advance projections of its anticipated termination to assist BSI in planning its own cost containment efforts. Sections 8, 9 and 15 hereof shall survive and continue in full force and effect notwithstanding the termination of this Agreement. 5. Warranties. BSI MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY NATURE WHATSOEVER RELATING TO THE SUPPORT SERVICES AND EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTIES REGARDING THE NATURE OR QUALITY OF THE SUPPORT SERVICES THAT IT IS PROVIDING AND THE TANGIBLE GOODS BEING USED TO PROVIDE SUCH SUPPORT SERVICES. -2- 3 6. Indemnification. (a) BSI shall indemnify, defend and hold harmless Buyer, its affiliates, directors, officers, employees, agents and permitted assigns from and against all liabilities, expenses, costs, damages and/or losses of any kind, including, without limitation, reasonable attorneys' fees, caused by or arising out of any breach of its obligations under this Agreement. (b) Buyer shall indemnify, defend and hold harmless BSI, its affiliates, directors, officers, employees, agents and permitted assigns from and against all liabilities, expenses, costs, damages and/or losses of any kind, including, without limitation, reasonable attorneys' fees, caused by or arising out of (i) any breach of its obligations under this Agreement or (ii) the acts or omissions of Buyer's agents and employees with respect to their use of the premises or tangible property, including without limitation any claims against BSI by the owners of third-party software relating to the use by Buyer thereof. (c) Notwithstanding anything in this Agreement to the contrary, neither party shall have any liability for any special, indirect, incidental or consequential damages of the other party arising under this Agreement or arising out of the performance by either party of its obligations under this Agreement. 7. Renewal. By the mutual written consent of the parties hereto, this Agreement may be extended through December 31, 1997. 8. Information. For a period of five years subsequent to the date hereof, each party hereto covenants and agrees to provide the other party with all information regarding itself and transactions under this Agreement as are required by such party to comply with all applicable federal, state, county and local laws, ordinances, regulations and codes, including, but not limited to, securities laws and regulations. 9. Confidential Information. The parties hereto covenant and agree to hold in trust and maintain confidential, except as otherwise required be law, all Confidential Information relating to the other party or any of their subsidiaries. "Confidential Information" shall mean all information disclosed by either party to the other in connection with this Agreement, whether orally, visually, in writing or in any other tangible form, and includes, but is not limited to, technical, economic and business data, know-how, flow sheets, drawings, business plans, computer information, and the like. Without prejudice to the rights and remedies of any party to this Agreement, a party disclosing any Confidential Information shall be entitled to equitable relief by way of an injunction if any other party hereto breaches or threatens to breach any provision of this Section 9. Notwithstanding the foregoing, BSI and its subsidiaries may utilize in -3- 4 their continuing business operations any Confidential Information relating to their business which was in their possession prior to the date hereof. 10. Notices. All notices, including notices of address changes, required to be sent hereunder shall be in writing and shall be deemed to have been given when received by certified mail, return receipt requested, or sent by telefax to the party at the address set forth with its signature below. 11. Assignment. Any party hereto may assign all or any part of its rights and duties hereunder to any of its Affiliates (as defined below), but such party shall remain fully responsible for the compliance by its Affiliate with all of the terms, conditions, limitations and restrictions contained herein. As used in this Agreement, the term "Affiliate" of any party means any entity that, directly or indirectly, controls, is controlled by, or is under common control with, such party. Except as otherwise provided in this Agreement, neither party may assign or transfer any of its rights or duties under this Agreement to any person or entity, without the prior written consent of the other party. 12. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of North Carolina. 13. Suspension. The obligations of any party to perform any acts hereunder may be suspended if such performance is prevented by fires, strikes, embargoes, riot, invasion, governmental interference, inability to secure goods or materials, or other similar circumstances outside the control of the parties. 14. Interpretation. In the event that any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions of this Agreement will remain in full force and effect. The waiver by any party of any default or breach of this Agreement shall not constitute a waiver of any other subsequent default or breach. 15. Rights Upon Orderly Termination. Upon termination or expiration of this Agreement, any of the Transition Services or any of the Support Services each party shall, upon request, forthwith return to the other party all reports, paper, materials and other information required to be provided to the other party by this Agreement and shall assist the other party in any other actions reasonably required for the orderly termination of this Agreement, any of the Transition Services or any of the Support Services. 16. Amendment. This Agreement may only be amended by a written agreement executed by all of the parties hereto. -4- 5 17. Entire Agreement. This Agreement, including any schedules hereto, constitutes the entire agreement between the parties, and supersedes all prior agreements, representations, negotiations, statements or proposals related to the subject matter hereof. 18. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one agreement. 19. Section Headings. The section and subsection headings used herein are for reference and convenience only and shall not enter into the interpretation hereof. -5- 6 IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their duly authorized representatives as of the date and year first above written. BROADWAY & SEYMOUR, INC. FIDELITY ASSET MANAGEMENT SERVICES, LLC By: /s/ Alan C. Stanford By: Fidelity Investment ---------------------------- Institutional Services Title: President Company, Inc. ------------------------- its managing member --------------------------- Title: Paul J. Hondros ------------------------ Notice: Notice: Broadway & Seymour, Inc. 260 Franklin Street, 11th Floor 128 South Tryon St., Suite 1000 Boston, Massachusetts 02110 Charlotte, North Carolina 28202 Attention: Joseph M. Collins Attention: General Counsel Fax: (617) 476-6699 Fax: (704) 344-3542 EX-2.7 10 AGREEMENT AND MUTUAL RELEASE 1 EXHIBIT 2.7 AGREEMENT AND MUTUAL RELEASE THIS AGREEMENT AND MUTUAL RELEASE (this "Agreement") is made and entered into as of the ________ day of April, 1996, by and between BROADWAY & SEYMOUR, INC. ("BSI" or the "Company"), a Delaware corporation with its principal office in Charlotte, North Carolina, BANCCORP SYSTEMS, INC. ("BancCorp"), a North Carolina corporation and a wholly owned subsidiary of BSI with its principal office in Amarillo, Texas, and PHILLIP E. SORRELL ("Phil Sorrell") and MARTHA A. SORRELL ("Martha Sorrell" and together with Phil Sorrell, the "Former Shareholders"), citizens and residents of the State of Texas. BACKGROUND STATEMENT WHEREAS, in connection with BSI's acquisition of BancCorp pursuant to an Agreement and Plan of Merger dated as of January 27, 1995 (the "Merger Agreement"), BSI agreed to pay certain Shareholder Profits to the Former Shareholders if BancCorp achieved certain financial targets, all as more specifically set forth in the Merger Agreement. Capitalized terms used herein and not defined shall have the meanings ascribed to such terms in the Merger Agreement. WHEREAS, in connection with the transactions contemplated by the Merger Agreement, BancCorp and Phil Sorrell entered into an Employment and Non-Competition Agreement dated January 27, 1995 (the "Employment Agreement") pursuant to which Phil Sorrell agreed to provide certain services to BancCorp in exchange for BancCorp's payment of certain compensation, all as more specifically set forth in the Employment Agreement. In addition, since January 27, 1995, Martha Sorrell has been employed by BancCorp on an at-will basis. WHEREAS, in connection with the transactions contemplated by the Merger Agreement, BSI issued to the Former Shareholders promissory notes in the aggregate principal amount of $825,000 (the "BSI Notes") on which the principal is payable on January 26, 1997 and interest is payable quarterly at the rate of 8.5% per annum. WHEREAS, on the Effective Date (as hereafter defined), BSI entered into an Asset Purchase Agreement with Fidelity Investments Institutional Services Company, Inc. ("FIIS") pursuant to which BSI has agreed to sell to FIIS substantially all the assets of BSI's Asset Management Services Group ("AMSG"), including, without limitation, the Marketable Proprietary Software and certain other assets of BancCorp (the "Asset Purchase Agreement"). WHEREAS, in the event that the Four-Year Period has not expired or Shareholder Profits of $1,000,000 have not been paid to the Former Shareholders, Section 11.7 of the Merger Agreement requires the prior written consent of the Former Shareholders to the sale of the Marketable Proprietary Software to a third party. In order to consummate the transactions 2 contemplated by the Asset Purchase Agreement, BSI wishes to pay the amounts set forth below and the parties wish to terminate the Merger Agreement, the Employment Agreement and the BSI Notes and to cancel their respective duties and obligations to each other thereunder and in connection with the Former Shareholders' employment by BancCorp, and they enter into this Agreement and Mutual Release for that purpose. STATEMENT OF AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter made by BSI, BancCorp and the Former Shareholders, and for other good and valuable consideration, the receipt and sufficiency of which is hereby expressly acknowledged by the parties hereto, it is agreed that: 1. Specific Obligations of BSI. Upon the closing of the transactions contemplated by the Asset Purchase Agreement (the "Effective Date"), BSI shall pay, in cash, by wire transfer: (i) to the Former Shareholders (a) an aggregate $1,000,000 plus (b) an aggregate amount equal to the net present value of the BSI Notes on the Effective Date, discounted at a 6% interest rate compounded annually from the Effective Date to January 26, 1997; and (ii) to Phil Sorrell, individually, (a) $158,000 plus (b) a total of thirteen (13) days of accrued but unused vacation time calculated at Phil Sorrell's current rate of pay of $100,000 per annum, which amount shall equal $5,138.34. Written wire instructions shall be given to BSI at least two business days prior to the Effective Date. All payments made under this Agreement shall be less any required state and federal withholding deductions. 2. Specific Obligations of the Former Shareholders. Each Former Shareholder hereby resigns voluntarily his or her employment with BancCorp, effective upon the Effective Date and shall, as a condition of and immediately upon execution of this Agreement, execute a letter of resignation substantially in the form as attached hereto as Exhibit A. Upon receipt of the amounts set forth in Section 1 above, the former Shareholders shall deliver to BSI a receipt for such payments and the BSI Notes marked "Cancelled." 3. Consent to the Sale of Marketable Proprietary Software. Without limiting the generality of the releases set forth below, each of the Former Shareholders hereby expressly consents to the sale of the Marketable Proprietary Software to FIIS pursuant to the Asset Purchase Agreement and waives any and all provisions of the Merger Agreement or any other agreement to which it is a party that may be violated by such sale. -2- 3 4. Release by Former Shareholders and Agreement Not to Sue. In exchange for the undertakings provided in this Agreement and for the payments set forth in Section 1 above, each of the Former Shareholders, for himself and his heirs, successors, assigns and agents, hereby releases, remises, quitclaims, and forever discharges BSI and BancCorp, and their parent, affiliated, subsidiary and related entities, benefit plans (except with respect to any vested benefit) and divisions, and their respective officers, directors, employees, agents, legal representatives, successors, heirs and assigns, from any and all duties, obligations or other responsibilities BSI or BancCorp may have under the Merger Agreement or the BSI Notes or the Employment Agreement and from any and all actions, causes of action, suits, claims, counterclaims, charges, complaints, demands, liabilities or obligations of any kind whatsoever, in law or equity, that such Former Shareholder has or may have which arise out of, relate to or are in any way connected with the Merger Agreement or the BSI Notes or the Employment Agreement of such Former Shareholder's work for, employment relationship with or termination of employment with BancCorp, specifically including, but not limited to, all claims arising under the Age Discrimination in Employment Act, 29 U.S.C. Section 621, et seq. This Release shall not apply to any rights or duties arising hereunder; and each of the Former Shareholders further waives any right he may have to file any lawsuit, charge, claim, complaint or other proceeding related to any of the foregoing before any federal, state or local administrative agency, court or other forum against BSI or BancCorp and agrees that he will not file any such action. 5. Release by BSI and BancCorp and Agreement Not to Sue. In exchange for the undertakings provided in this Agreement, each of BSI and BancCorp, for itself and its affiliated, subsidiary and related entities, benefit plans, divisions, successors and assigns, and the employees, officers, directors, legal representatives and agents thereof, both in their official and individual capacities, hereby releases, remises, quitclaims and forever discharges each of the Former Shareholders and his agents, legal representatives, successors, heirs and assigns, from any and all duties, obligations or other responsibilities such Former Shareholder may have under the Merger Agreement or the BSI Notes or the Employment Agreement and from any and all actions, causes of actions, suits, claims, counterclaims, charges, complaints, demands, liabilities or obligations of any kind whatsoever, in law or equity, arising at any time prior to and through the date of this Agreement and that BSI or BancCorp has or may have which arise out of, relate to or are in any way connected with the Merger Agreement or the BSI Notes or the Employment Agreement or such Former Shareholder's work for, employment relationship with or termination of employment with BancCorp. This Release shall not apply to any rights or duties arising hereunder; and each of BSI and BancCorp further waives any right it may have to file any lawsuit, charge, claim complaint or other proceeding related to any of the foregoing before any federal, state or local administrative agency, court or other forum against either of the Former Shareholders, and agrees that it will not file any such action. 6. Representations and Warranties by all Parties. Each of the parties represents and warrants, as to himself or itself that (a) he or it has the capacity, full power, and authority to enter into this Agreement, (b) the individuals signing on behalf of the corporate parties are authorized to do so, (c) he or it has not assigned, encumbered, or in any manner transferred all or any portion of the claims covered by this Agreement, (d) there are no charges, complaints, -3- 4 suits, arbitrations, or other claims or proceedings pending between the parties in any court, before any agency, or in any forum, and (e) no other person, party, or corporation has any right, title, or interest in any of the claims covered by this Agreement. 7. Effectiveness. It is agreed and acknowledged by the parties hereto that the transactions and agreements contemplated by this Agreement (including, without limitation, the payment obligations, consents, waivers and releases set forth in Sections 1, 2, 3 and 4) are expressly subject to the consummation of the sale of the Marketable Proprietary Software to FIIS on the Effective Date and this Agreement shall have no force or effect if such sale is not consummated. 8. Return of Property. Promptly after the termination of each Former Shareholder's employment as provided in Section 2 above, each Former Shareholder shall return and deliver to BSI all property or documents of BSI or BancCorp not directly relating to the business of AMSG, including without limitation all credit cards, club memberships, master keys, etc. 9. Repayment of Monies Owed. Each Former Shareholder agrees that all monies owed by such Former Shareholder to BSI or BancCorp, if any, of which BSI or BancCorp is aware prior to the Effective Date may be deducted from BSI's payments to such Former Shareholder under Section 1. Any amounts owed by such Former Shareholder which are not so deducted will be paid promptly by such Former Shareholder upon demand by BSI or BancCorp. 10. Conditional on Performance. Each Former Shareholder understands and agrees that BSI's obligation to perform hereunder is conditioned upon the Former Shareholder's agreements and covenants to BSI as set forth herein. In the event such Former Shareholder breaches any such agreement or covenant, or causes any such covenant or agreement to be breached, BSI's obligations to perform any of its obligations under this Agreement shall automatically terminate. The remainder of this Agreement will remain in full force and effect. 11. Knowing and Voluntary Consent. Each Former Shareholder represents that he or she knows and understands the contents of this Agreement, that he or she intents to be legally bound by this Agreement and the release contained herein and that, after having the opportunity to consult and be represented by legal counsel, he or she is voluntarily entering into this Agreement, including the release, of his or her own freewill and without coercion. 12. Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof, integrates all the terms and conditions mentioned or incidental to this Agreement, and supersedes all prior negotiations or writings, and, in particular, supersedes and replaces the Merger Agreement, the BSI Notes and the Employment Agreement. No modification or waiver of any provisions of this Agreement shall be valid unless in writing and signed by all parties hereto. -4- 5 13. Binding Effect. This Agreement shall be binding upon the parties hereto, their heirs, successors and assigns. 14. Applicable Law. This Agreement shall be construed and governed by the laws of the State of North Carolina. The parties consent to jurisdiction and venue in North Carolina in any action brought to enforce the terms of this Agreement. 15. Severability. If any provision contained in this Agreement shall for any reason be held invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or enforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. 16. Construction. This Agreement is not to be construed against any party but shall be construed equally as to each party hereto. 17. Counterparts. This Agreement may be executed in counterparts, each of which may be enforceable as an original, but all of which together shall constitute but one agreement. -5- 6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal as of the date and year indicated above. BROADWAY & SEYMOUR, INC. ATTEST: By: /s/ Alan C. Stanford ------------------------ Name: Alan C. Stanford Title: President - ---------------------------- Assistant Secretary BANCCORP SYSTEMS, INC. ATTEST: By:/s/ Phillip E. Sorrell ------------------------ Name: Phillip E. Sorrell Title: President - ---------------------------- Secretary /s/ Martha A. Sorrell ----------------------- Martha A. Sorrell /s/ Phillip E. Sorrell ----------------------- Phillip E. Sorrell -6- EX-99.1 11 TEXT OF PRESS RELEASE 4-11-96 1 EXHIBIT 99.1 NASDAQ:BSIS FOR IMMEDIATE RELEASE - --------------------- CONTACTS: PERRY CHLAN DAVID A. FINLEY FIDELITY INVESTMENTS BROADWAY & SEYMOUR (617) 563-6573 (704) 344-3010 FIDELITY INVESTMENTS TO ACQUIRE BROADWAY & SEYMOUR'S AMSG UNIT CHARLOTTE, N. C., APRIL 11, 1996 -- Fidelity Investments and Broadway & Seymour, Inc., (NASDAQ:BSIS) today announced they have signed a Purchase Agreement for Fidelity to acquire the assets of the Asset Management Services Group of Broadway & Seymour. The companies expect to complete the transaction by May 30, 1996, subject to satisfaction of standard and customary closing conditions in the Purchase Agreement. Financial terms were not disclosed. Under the agreement, Fidelity Investments will acquire Broadway & Seymour's trust accounting operations that comprise the Asset Management Services Group. This group provides processing and professional services to bank trust and investment institutions. Fidelity will acquire the large bank trust processing product, AMtrust, used by 14 of the 50 largest banks, representing over $400 billion in discretionary trust assets. Fidelity also will acquire the AMpreferred, AssetManager and TrustProcessor products. Fidelity also announced James R. Spencer III, 45, Senior Vice President, Broadway & Seymour, will join Fidelity when the transaction is closed to manage the newly-acquired unit. -more- 2 Fidelity Acquires BSI Unit - Page 2 Spencer will report to Paul J. Hondros, President, Fidelity Investments Institutional Services Company. Fidelity also said it intends to offer employment to the 160 people currently working in the Broadway & Seymour unit and manage this new unit as a separate technology business. In August 1995, Fidelity and Broadway & Seymour announced an alliance to jointly integrate and market their trust processing, and investment capabilities to bank trust institutions. "We continue to believe this is a growth market where there is an opportunity for innovation in technology. This acquisition accelerates Fidelity's commitment and focus on offering comprehensive processing products and services for the bank trust and investment management business. We can now be more responsive to customer demands in the bank asset management and brokerage business," said Paul Hondros. "Through management of the new unit and by leveraging other Fidelity resources such as National Services Corp., we will be well-positioned to commit and accelerate the financial and technical support that will enable us to dramatically improve the technology solutions available to banks." With the acquisition announced today, Fidelity plans to offer the combination of front-end workstations to support investment management and relationship management with core trust accounting technology and further automation of securities processing and brokerage services. Broadway & Seymour's President and Chief Operating Officer, Alan Stanford, said, "This transaction allows Broadway & Seymour to concentrate on its core competencies of providing customer service and financial industry technology solutions along with our existing -more- 3 Fidelity Acquires BSI Unit - Page 3 investment and professional services businesses. Our clients will continue to be well served by Fidelity, and Broadway & Seymour will better focus on its growth markets with the resources made possible from the agreement." Broadway & Seymour is an innovative information technology company providing integrated business solutions to the financial services industry and selected markets worldwide. Headquartered in Charlotte, N.C., this publicly-held company had revenues of $114 million in 1995. Fidelity Investments, with total managed assets of $428.4 billion as of February 29, 1996, is one of the country's leading providers of financial services. Fidelity is the nation's largest mutual fund company and second largest discount brokerage company, with more than 80 Investor Centers around the U. S. Fidelity is also the nation's largest provider of 401(k) retirement savings plans to corporations, and the third largest provider of retirement plans to not-for-profit institutions. # # # -----END PRIVACY-ENHANCED MESSAGE-----