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AMENDMENT NO. 1
TO ASSET PURCHASE AND CONTRIBUTION AGREEMENT
THIS AMENDMENT NO. 1 (the "Amendment") TO THE ASSET PURCHASE AND
CONTRIBUTION AGREEMENT (the "Agreement") dated as of February 22, 1996 by and
among NATIONAL DATA CORPORATION, a Delaware corporation ("NDC"), MASTERCARD
INTERNATIONAL INCORPORATED, a Delaware corporation ("Seller"), and GLOBAL
PAYMENT SYSTEMS LLC (formerly known as POS ACQUISITION COMPANY LLC) ("Newco"),
a Georgia limited liability company, is effective as of the 31st day of March,
1996, and is by and among NDC, SELLER, NEWCO, NATIONAL DATA PAYMENT SYSTEMS,
INC., a New York corporation ("NDPS"), NATIONAL DATA CORPORATION OF CANADA,
LTD., a Canadian corporation ("NDCC"), GLOBAL PAYMENT HOLDING COMPANY, a
Delaware corporation ("GPHC"), NDC INTERNATIONAL, LTD. ("NDCI") and GPS HOLDING
LIMITED PARTNERSHIP ("Holding"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Agreement;
WITNESSETH:
WHEREAS, NDC, Seller and Newco entered into the Agreement to provide for
the sale and contribution by Seller to Newco of certain assets utilized in
Seller's Indirect Merchant Network Business and the contribution by NDC of
certain assets utilized in Parent's Indirect Merchant Network Business; and
WHEREAS, NDC desires to effect its obligation to transfer all of its
rights, title and interest in and to the Parent Contributed Assets to Newco
indirectly rather than directly as contemplated by the Agreement; and
WHEREAS, NDC desires to effect such indirect transfer by:
(a) first transferring to Holding and to GPHC, in return for all of the
stock of Holding and a general partnership and a portion of the limited
partnership interest in Holding, all of NDC's rights, title and interest in and
to the Parent Contributed Assets (other than such portion of the Parent
Contributed Assets as is described in the succeeding clause (b)); and then
transferring and contributing its limited partnership interest in Holding to
GPHC (such that NDC will then hold solely a one percent (1%) general
partnership interest in Holding and GPHC will hold a ninety-nine percent (99%)
limited partnership interest in Holding); and
(b) causing NDPS, NDCC and NDCI to transfer and assign directly to Newco,
in return for Membership Interests in Newco (in accordance with the provisions
of the Operating Agreement attached hereto as Exhibit D), certain assets held
by NDPS, NDCC and NDCI which are utilized in Parent's Indirect Merchant Network
Business (including the stock of 3245098 Canada Inc., a wholly-owned subsidiary
of NDCC to
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which NDCC shall have contributed immediately prior to the Closing all of its
assets which constitute Parent Contributed Assets); and
WHEREAS, each of NDC, Seller and Newco desires to amend the Agreement on
the following terms, and each of NDPS, NDCC, GPHC, NDCI and Holding desires to
become a party to the Agreement, as amended hereby; and
WHEREAS, Section 16.7 of the Agreement provides that amendments to the
Agreement shall be in writing;
NOW, THEREFORE, in consideration of the premises, covenants and agreements
contained herein and in the Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Introductory Paragraph. The first paragraph of the Agreement is hereby
amended to add NDPS, NDCC, GPHC, NDCI and Holding as parties to the Agreement,
and the definition of "Parent" is hereby amended to mean, collectively and
individually, NDC, NDPS, NDCI, NDCC, GPHC and Holding;
2. Recitals. The second and fourth recitals are hereby amended to read in
their entirety, as follows:
(a) Second Recital.
"WHEREAS, Parent is currently engaged in the business of providing
electronic transaction processing services involving the authorization
(including voice authorization), capture, settlement and clearing of
transactions involving Credit Cards, check verification, cash management,
electronic data interchange, electronic tax payment and filing, and other
ancillary services directly ("Parent's Direct Merchant Network Business")
and indirectly (including through Modular Data, Inc., a wholly owned
subsidiary of NDC ("MDI") and 3245098 Canada, Inc., a wholly-owned
subsidiary of NDCC ("NDCC Sub" and, together with MDI, hereinafter
collectively defined as "Subsidiary")) ("Parent's Indirect Merchant
Network Business") to Merchants through utilization of an electronic
telecommunications and computer network;"
(b) Fourth Recital.
"WHEREAS, certain assets utilized in providing support services to
Parent's Direct and Indirect Merchant Network Business, including certain
assets held by NDPS, will be included in the assets to be contributed by
Parent;"
3. Section 1.3. Section 1.3(d) and Section 1.3(j) are hereby amended to
read in their entirety as follows:
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"(d) All of Parent's and Subsidiary's rights and interests under the
terms of the contracts, agreements, personal property leases, license
agreements, warranties, commitments, arrangements, credit guaranties and
purchase and sales orders to which it is a party which principally relate
to Parent's Indirect Merchant Network Business, whether oral or written,
and pursuant to which Parent or Subsidiary enjoys any right or benefit,
including the assignment of telephone numbers identified in SECTION
1.3(D) OF THE PARENT DISCLOSURE MEMORANDUM and any agreements pursuant to
which Parent or Subsidiary has received any revenues reflected in the
Parent Financial Statements (as hereinafter defined) or will receive any
revenues through the Closing Date that would be reflected in financial
statements prepared for Parent's Indirect Merchant Network Business using
the accounting principles and conventions employed in preparing the
Parent Financial Statements, together with the rights of Parent and
Subsidiary to receive income in respect of such contracts, agreements,
license agreements, warranties, commitments, arrangements (individually,
a "Parent Contract" and collectively, the "Parent Contracts"), except (i)
those Contracts identified in SECTION 1.3(D) OF THE PARENT DISCLOSURE
MEMORANDUM, (ii) Parent's or Subsidiary's lease and usage agreements for
telecommunication services, (iii) those Parent Contracts or rights under
the Parent Contracts that relate solely to Parent Excluded Assets or
Parent Excluded Liabilities, and (iv) those Parent Contracts of NDCI
relating to shared-environment processing identified on Exhibit J hereto
(the Contracts described in (i), (ii), (iii) and (iv) are hereinafter
collectively referred to as the "Parent Excluded Contracts");"
"(j) The outstanding common stock of MDI and NDCC Sub."
4. Section 1.4. Section 1.4 is hereby amended to add a new subsection
1.4(m) as follows:
"(m) The limited partnership interests in Holding held by GPHC."
5. Section 2.5.
(a) Section 2.5(d) and Section 2.5(e) are hereby amended to read in their
entirety as follows:
"(d) NDC shall loan funds to Newco or obtain other loans for Newco
or secure funds for Newco through any combination of the foregoing so
that Newco will have sufficient funds at the Closing Date to pay the
Purchase Price; and"
"(e) NDC and Newco will enter into services agreements substantially
in the form of Exhibit C (the "Parent Services Agreement") governing the
provision (i) by NDC of certain services, including telecommunications
and general management and administrative services, and (ii) by Newco of
certain support services required by Parent and its subsidiaries."
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(b) Section 2.5 is also amended to add new subsections (f), (g), and (h)
as follows:
(f) NDCI shall grant Newco an exclusive, fully paid, royalty-free
and transferable license to its "PC NETS" software substantially in the
form of Exhibit K hereto;
(g) NDCI shall sublease to Newco the real property (and the
furniture, fixtures, equipment and improvements located thereon owned by
NDCI) leased by NDCI in Peterborough Cambridgeshire, England for the term
of such lease pursuant to a sublease substantially in the form of Exhibit
L hereto (the "NDCI Sublease");
(h) NDCI and Newco shall enter into a service agreement
substantially in the form of Exhibit M hereto governing the provision by
Newco of certain services required by NDCI (the "NDCI Service Agreement")
which shall provide that Newco shall charge, and NDCI shall pay,
reasonable rates for such services, subject to increase as required such
that Newco will not incur a loss in connection with providing such
services."
5. Section 4.1. Section 4.1 is hereby amended to read in its entirety as
follows:
"4.1 Issuance of Membership Interests. Subject to the provisions of this
Agreement, at the Closing, Newco shall deliver (i) to Holding, NDCC, NDCI and
NDPS in exchange for their respective portions of the Parent Contributed
Assets, certificates representing, in the aggregate, a ninety-two and one-half
percent (92.5%) membership interest in Newco, with each of their respective
membership interests in Newco to be in the amount set forth beside their name
in Exhibit B hereto, and (ii) to Seller in exchange for the Seller Contributed
Assets, a certificate representing a seven and one-half percent (7.5%)
membership interest in Newco."
6. Section 4.2. Section 4.2 is hereby amended to read in its entirety as
follows:
"4.2 Operating Agreement. Subject to the terms of this Agreement,
at the Closing, NDC and MDI shall withdraw as members of Newco, and
Seller, Holding, NDPS, NDCC and NDCI will enter as the sole members of
Newco into an Operating Agreement describing the term, management,
termination and other provisions governing Newco and the authorities and
duties of its members and managers, in substantially the form of Exhibit
D hereto (the "Operating Agreement")."
7. Article 7. The first sentence of Article 7 is hereby amended to read
as follows: "NDC, NDPS, NDCI, NDCC and Holding hereby represent and warrant,
jointly and severally, to Seller as follows:".
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8. Articles 13 and 14.
(a) Sections 13.1(a), 13.3, 13.4 (except for the first and third
sentences of Section 13.4(d)), 13.7, 13.9 (except for 13.9(c)) and 14.1
are hereby amended by replacing the word "Parent" at every place it
appears in such Sections with the term "NDC". In addition, Section
14.1(d) is hereby amended by replacing the first three words in such
section with the words "by either NDC or Seller".
(b) Article 13 is hereby amended to add a new Section 13.13 as
follows:
"Section 13.13. NDCI Service Agreement. Newco shall be paid
reasonable fees in connection with providing services to NDCI in
connection with the NDCI Service Agreement, such that Newco's
costs in connection with providing such services shall not exceed
the fees paid to Newco by NDCI in connection with such services.
In the event and to the extent that NDCI is unable or otherwise
fails to meet its obligations described in the preceding sentence
in a timely manner, NDC shall be obliged to do so."
9. Exhibits. Exhibits D and G shall be revised to reflect the changes set
forth herein in the forms attached hereto as Exhibits D and G, respectively.
Exhibits J, K, L and M called for by this Amendment shall be in the forms
attached hereto as Exhibits J, K, L and M, respectively.
10. Parent Disclosure Memorandum. SECTION 7.7 OF THE PARENT DISCLOSURE
MEMORANDUM shall be deemed automatically amended by this Amendment to delete
all references to the Contracts relating to shared-environment processing
identified on Exhibit J hereto, which deletion shall be deemed to have been
made immediately prior to the time of the initial delivery of the Parent
Disclosure Memorandum.
11. Waiver and Consent. Seller hereby waives any limitations or
restrictions contained in the Agreement regarding the transactions described
herein and consents to such transactions as described herein; provided,
however, that such waiver and consent is not intended, and shall not be
construed, to constitute a waiver or consent to any action or failure to act
which would put either Seller or Newco in a worse economic position than if the
transactions contemplated by this Amendment had not been entered into.
12. Miscellaneous.
(a) Agreement. Except as expressly amended by this Amendment, the
Agreement shall be and remain in full force and effect, unamended,
unaltered and unmodified in any way or manner whatsoever, and each of the
parties hereto ratifies and confirms the Agreement in all respects.
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(b) Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment
to be executed by its duly authorized signatory, effective as of the date first
set forth above.
MASTERCARD INTERNATIONAL
INCORPORATED
By: /s/ William I Jacobs
--------------------------------
William I Jacobs
Executive Vice President
NATIONAL DATA CORPORATION
By: /s/ E. Michael Ingram
--------------------------------
E. Michael Ingram
Senior Vice President
GLOBAL PAYMENT SYSTEMS LLC
By: GPS Holding Limited Partnership,
a Member
By: National Data Corporation,
its General Partner
By: /s/ E. Michael Ingram
--------------------------------
E. Michael Ingram
Senior Vice President
GPS HOLDING LIMITED PARTNERSHIP
By: National Data Corporation,
its General Partner
By: /s/ E. Michael Ingram
--------------------------------
E. Michael Ingram
Senior Vice President
THIS IS THE FIRST SIGNATURE PAGE OF THE AMENDMENT TO THAT CERTAIN ASSET
PURCHASE AND CONTRIBUTION AGREEMENT DATED AS OF FEBRUARY 22, 1996
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NATIONAL DATA CORPORATION OF
CANADA, LTD.
By: /s/ E. Michael Ingram
--------------------------------
Name: E. Michael Ingram
Title: Secretary
NATIONAL DATA PAYMENT SYSTEMS, INC.
By: /s/ E. Michael Ingram
--------------------------------
Name: E. Michael Ingram
Title: Secretary
NDC INTERNATIONAL, LTD.
By: /s/ E. Michael Ingram
--------------------------------
Name: E. Michael Ingram
Title: Secretary
THIS IS THE SECOND SIGNATURE PAGE OF THE AMENDMENT TO THAT CERTAIN ASSET
PURCHASE AND CONTRIBUTION AGREEMENT DATED AS OF FEBRUARY 22, 1996
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GLOBAL PAYMENT HOLDING COMPANY
By: /s/ Marion P. Stevenson
--------------------------------
Name: Marion P. Stevenson
Title: President
THIS IS THE SECOND SIGNATURE PAGE OF THE AMENDMENT TO THAT CERTAIN ASSET
PURCHASE AND CONTRIBUTION AGREEMENT DATED AS OF FEBRUARY 22, 1996
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EXHIBITS TO AMENDMENT NO. 1 TO
ASSET PURCHASE AND CONTRIBUTION AGREEMENT
EXHIBIT LETTER EXHIBIT NAME
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Exhibit D Form of Operating Agreement
Exhibit G Form of Opinion of Counsel to Parent
Exhibit J Shared Environment Contracts
Exhibit K Form of Software License
Exhibit L Form of Sublease
Exhibit M Form of NDCI Services Agreement
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EXHIBIT D
OPERATING AGREEMENT
OF
GLOBAL PAYMENT SYSTEMS LLC
AS OF MARCH 31, 1996
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TABLE OF CONTENTS
Page
----
Article 1 Definitions .......................................................... 1
Article 2 Formation of Company ................................................. 9
Article 3 Name and Principal Office of Company; Registered Agent;
Statutory Compliance.................................................. 9
3.1 Name 9
3.2 Principal Office and Place of Business; Registered Agent ............. 9
3.3 Statutory Compliance ................................................. 10
Article 4 Purpose of Company; Use of Company Assets; Title to Property;
Limited Liability of Members.......................................... 10
4.1 Company Purposes ..................................................... 10
4.2 Title to Property .................................................... 10
4.3 Limited Liability of Members ......................................... 10
Article 5 Duration of Company .................................................. 10
Article 6 Percentage Ownership Interests; Net Earnings Interest; Certificates .. 11
6.1 Percentage Ownership Interest ........................................ 11
6.2 Net Earnings Interest ................................................ 11
6.3 Certificates; Authorized Units ....................................... 11
Article 7 Capital of Company ................................................... 12
7.1 Contribution by MasterCard ........................................... 12
7.2 Contribution by the National Data Members ............................ 12
7.3 MasterCard Purchased Assets .......................................... 12
7.4 Capital Accounts ..................................................... 12
7.5 Interest On and Return of Capital .................................... 13
7.6 No Third-Party Rights ................................................ 13
Article 8 Additional Financial Contributions ................................... 14
8.1 Working Capital Commitment ........................................... 14
8.2 Additional Funds for Company ......................................... 14
Article 9 Allocation of Profits and Losses ..................................... 14
9.1 Net Profit ........................................................... 15
9.2 Allocation of Sale Gain .............................................. 15
9.3 Net Loss and Sale Loss ............................................... 15
9.4 Book Depreciation .................................................... 15
9.5 Section 704(c) Allocation ............................................ 16
9.6 Limitation on Net Loss Allocation .................................... 16
9.7 Qualified Income Offset .............................................. 16
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9.8 Gross Income Allocation .............................................. 16
9.9 Minimum Gain and Member Minimum Gain Chargeback ...................... 16
9.10 Member Nonrecourse Deductions ........................................ 17
9.11 Target Final Balances ................................................ 17
9.12 Tax Allocations ...................................................... 17
Article 10 Distribution of Company Property ..................................... 17
10.1 Annual Distributions ................................................. 17
10.2 Net Sales Proceeds ................................................... 18
10.3 Consent to Distributions ............................................. 18
10.4 Withholding .......................................................... 18
Article 11 Management of Company ................................................ 18
11.1 Board of Directors ................................................... 18
11.2 Initial Board of Directors ........................................... 19
11.3 Meetings of Board of Directors ....................................... 19
11.4 Action by Board of Directors ......................................... 19
11.5 Expenses and Compensation of Board of Directors ...................... 21
11.6 Restrictions on Authority of Board of Directors ...................... 21
11.7 Voting Rights of Members ............................................. 22
11.8 Authority of Members; Meetings; Action by Members Without a Meeting... 22
11.9 Waiver of Notice ..................................................... 22
11.10 Officers ............................................................. 22
11.11 Removal of Officers .................................................. 23
11.12 Compensation for Services ............................................ 23
11.13 Liability of the Members, Officers and Directors ..................... 23
11.14 Indemnity ............................................................ 23
Article 12 Related Party Transactions ........................................... 23
Article 13 Banking .............................................................. 24
Article 14 Accounting; Appraisal ................................................ 24
14.1 Books of Account ..................................................... 24
14.2 Method of Accounting ................................................. 24
14.3 Financial and Operating Statements ................................... 24
14.4 Income Tax Returns ................................................... 25
14.5 Tax Matters Partner .................................................. 25
Article 15 Conversion of the Company ............................................ 25
Article 16 Admission of Additional Members ...................................... 26
Article 17 Withdrawals .......................................................... 26
Article 18 Transfer of Members' Interests; Admission of Additional Members ...... 27
18.1 Transfers of Members' Interests ...................................... 27
18.2 Section 754 Election ................................................. 28
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Article 19 Damages .............................................................. 28
Article 20 Put Rights ........................................................... 28
20.1 Put Right ............................................................ 28
20.2 Exercise of Put Right ................................................ 28
20.3 Determination of Put Price ........................................... 29
20.4 Payment of Put Price ................................................. 29
Article 21 Right to Compel Sale; Right to Participate in Sale ................... 30
21.1 Obligation to Sell ................................................... 30
21.2 Right to Participate in Sale ......................................... 31
21.3 Consideration ........................................................ 31
21.4 Withdrawal from Sale ................................................. 32
21.5 Participation by MasterCard .......................................... 32
21.6 Priorities and Termination ........................................... 32
Article 22 Arbitration .......................................................... 33
22.1 Location and Governing Rules ......................................... 33
22.2 Selection of Arbitrators ............................................. 33
Article 23 Dissolution and Liquidation of the Company ........................... 33
23.1 Dissolving Events .................................................... 33
23.2 Method of Liquidation ................................................ 34
23.3 Reasonable Time for Liquidating ...................................... 34
23.4 Date of Liquidation .................................................. 34
23.5 Right to Continue Business ........................................... 34
Article 24 General Provisions ................................................... 34
24.1 Waiver of Right of Partition ......................................... 34
24.2 Notices............................................................... 35
24.3 Modifications ........................................................ 36
24.4 Binding Effect ....................................................... 36
24.5 Counterparts ......................................................... 36
24.6 Construction ......................................................... 36
24.7 Exhibits ............................................................. 36
24.8 Sections ............................................................. 37
24.9 Time of Essence ...................................................... 37
24.10 Additional Documents and Acts ........................................ 37
24.11 Terms................................................................. 37
24.12 Severability ......................................................... 37
24.13 Complete Agreement ................................................... 37
24.14 Legend................................................................ 37
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OPERATING AGREEMENT OF
GLOBAL PAYMENT SYSTEMS LLC LIMITED LIABILITY COMPANY
THIS AGREEMENT is made and entered into as of this 31st day of March,
1996, by and between MASTERCARD INTERNATIONAL INCORPORATED, a Delaware
corporation ("MasterCard"), GPS HOLDING LIMITED PARTNERSHIP, a Georgia limited
partnership ("GPS"), NATIONAL DATA CORPORATION OF CANADA, LTD., an Ontario
Canada corporation ("NDC Canada"), NATIONAL DATA CORPORATION, a Delaware
Corporation ("National Data"), NDC INTERNATIONAL, LTD., a Georgia Corporation
("NDCI") and NATIONAL DATA PAYMENT SYSTEMS, INC., a New York corporation
("NDPS");
W I T N E S S E T H:
WHEREAS, National Data has formed a limited liability company under the
provisions of the Georgia Limited Liability Company Act for the limited
purposes hereinafter described and desires to admit MasterCard, GPS, NDC
Canada, NDCI, and NDPS as members on the terms hereinafter described, with
Modular Data, Inc. and National Data withdrawing as members without having put
any assets in Company;
WHEREAS, National Data is the ultimate parent Company of GPS, NDC Canada,
NDCI and NDPS, and National Data is vitally interested in Company, has
undertaken several obligations with respect to Company, and is joining in this
Agreement to recognize such obligations; and
WHEREAS, the parties hereto desire to set forth their respective rights,
duties and responsibilities with respect to the Company;
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00), the
mutual promises, obligations and agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, do hereby
agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, each of the following terms, when used in
the singular or plural form, shall have the meaning hereinafter provided:
1.1 "AAA" has the meaning set forth in Section 22.1.
1.2 "ACT" means the Georgia Limited Liability Company Act, as it may be
amended from time to time.
1.3 "ADJUSTED CAPITAL ACCOUNT DEFICIT" means, as of any particular date,
the deficit balance, if any, in such Member's capital account as of such date,
as determined in the manner
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provided in Section 7.4 hereof and by then adjusting such capital account as so
determined as follows:
(a) such capital account shall be increased to reflect the amounts,
if any, which such Member is deemed to be obligated to restore pursuant to
Treasury Regulations Section Section 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) such capital account shall be reduced to reflect any items
described in Treasury regulations Section Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition shall be interpreted in a manner consistent with the
provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
1.4 "ADJUSTMENT EVENT" means a Conversion.
1.5 "AFFILIATE" means, with respect to any Entity, an Entity controlling,
controlled by or under common control with such original Entity.
1.6 "APPROVAL OF" or "APPROVED BY THE BOARD OF DIRECTORS" means the
affirmative vote of a majority of Directors then in office, provided, however,
unless waived by GPS , such approval must include the affirmative vote of at
least one (1) of the three (3) Directors designated by the National Data
Members.
1.7 "APPROVE," "APPROVED," or "APPROVAL" means, as to the subject matter
thereof and as the context may require or permit, an express ratification or
approval contained in a written statement signed by or on behalf of an
approving Entity.
1.8 "ARTICLES" means the Articles of Organization of the Company dated
February 21, 1996, as amended hereafter.
1.9 "BANKRUPTCY OF A MEMBER" means (a) a general assignment for the
benefit of creditors by a Member; (b) the insolvency of a Member (the term
"insolvency" means the inability of the party to pay its debts as they come due
in the ordinary course of its business) which continues for more than sixty
(60) consecutive days after notice thereof has been given to the insolvent
party by the complaining Member; (c) the appointment of a receiver, trustee or
custodian for all or any substantial part of the property and assets of a
Member in, or the commencement by a Member of, any voluntary proceeding under
present or future federal bankruptcy laws or under any other state or local
bankruptcy, insolvency or other laws respecting debtor's rights which is not
dismissed within sixty (60) days thereafter; or (d) the entry against a Member
of any "order for relief" or of any other judgment or decree by any court of
competent jurisdiction in any involuntary proceeding against a Member under
present or future federal bankruptcy laws or under any other state or local
bankruptcy, insolvency or other laws respecting debtor's rights, but only if
such order, judgment or decree continues unstayed and in effect for a period of
sixty (60) consecutive days.
1.10 "BANKRUPTCY OF THE COMPANY" means (a) a general assignment by the
Company for the benefit of creditors, (b) the appointment of a receiver,
trustee or custodian for all or any substantial part of the Company's property
and assets which is not dismissed within sixty (60) days thereafter, (c) the
entry of any "order for relief" against the Company in, or the commencement by
the Company of, any voluntary proceeding under present or future federal
bankruptcy laws or
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under any other state or local bankruptcy, insolvency or other laws respecting
debtor's rights which is not dismissed within sixty (60) days thereafter, or (d)
the entry against the Company of any "order for relief" or any other judgment or
decree by any court of competent jurisdiction in any involuntary proceeding
against the Company under present or future federal bankruptcy laws or under any
other state or local bankruptcy, insolvency or other laws respecting debtor's
rights, but only if such order, judgment or decree continues unstayed and in
effect for a period of sixty (60) consecutive days.
1.11 "BENEFICIAL OWNER", "BENEFICIAL OWNERSHIP", BENEFICIALLY OWN and
"BENEFICIALLY OWNED" have the meanings contemplated by Rule 13d-3 under the
Exchange Act.
1.12 "BOARD OF DIRECTORS" means the Board of Directors established
pursuant to Article 11 hereof and having the powers and duties delegated to it
by the Members as set out in this Agreement; provided, however, that it is
mutually agreed and understood that the management and control of the Company
is vested exclusively in the Members in the manner and under the terms provided
in this Agreement, and that the Board of Directors does not constitute, for the
purposes hereof, a separate managing Entity, but rather is a body of agents
appointed as set forth in Article 11 by the Members and represents the
administrative mechanism chosen by the Members to exercise absolute management
and control of the Company.
1.13 "BOOK DEPRECIATION" means, for each Fiscal Year, an amount computed
for each asset equal to the depreciation, amortization or other cost recovery
deduction allowable for federal income tax purposes with respect to such asset
for such year or other period, except that if the Book Value of such asset
differs from its adjusted basis for federal income tax purposes at the
beginning of such year or other period, Book Depreciation shall be an amount
which bears the same ratio to such beginning Book Value as the federal income
tax depreciation, amortization or other cost recovery deduction for such year
or other period bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization or other cost
recovery deduction for such year is zero because the basis of such asset has
been fully recovered, Book Depreciation shall be determined with reference to
such beginning Book Value using any reasonable method selected by Approval of
the Board Of Directors. All computations with respect to assets contributed or
deemed contributed to the Company called for herein shall be made in a manner
consistent with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(g)(3).
1.14 "BOOK VALUE" means, as of any particular date, the asset's adjusted
basis for federal income tax purposes, except that with respect to any asset
contributed or deemed contributed to the Company the initial Book Value shall
be the agreed-upon fair market value thereof as reflected by the values
determined for purposes of valuing the Capital Account of the contributing
Member with respect to such asset. With respect to the National Data Group
Contributed Assets and the MasterCard Contributed Assets, the Book Values
thereof shall be as set forth in the Purchase Agreement and as set forth in
Sections 7.1 and 7.2 and with respect to all other circumstances the Book Value
of contributed assets shall be determined by Approval of the Board of
Directors. The Book Value of any Company assets distributed to a Member shall
be the gross fair market value of such asset on the date of distribution as
determined by Approval of the Board of Directors, provided the determination of
the value of assets distributed to a Member having a Majority in Interest shall
be subject to the related party transaction provisions of Article 12. The Book
Value of Company assets shall be adjusted to equal their respective gross fair
market values as of the following times: (a) the acquisition (other than a pro
rata acquisition by existing Members) of an additional Membership Interest in
the Company by any new or existing Member in exchange for more than a de minimis
contribution of capital to the Company and other than occurring in the first
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six (6) months of this Company, (b) the distribution other than a pro rata
distribution to existing Members by the Company to any Member of more than a de
minimis amount of assets as consideration for an interest in the Company; (c)
the liquidation of the Company; and (d) a Conversion.
1.15 "BREACH" means a breach by a Member of any provision of this
Agreement, the Purchase Agreement, or the Parent Services Agreement which
remains uncured for a period of thirty (30) days after receipt of written
notice of such breach from another Member.
1.16 "BUSINESS" means the business of providing electronic transaction
processing services involving the authorization (including voice authorization)
and capture, settlement and clearing of transactions involving credit, debit
and similar cards through utilization of an electronic telecommunications and
computer network indirectly to persons or entities that honor credit, debit and
similar cards through banks and other associations and institutions that
participate in the handling of transactions involving credit, debit and similar
cards throughout the United States as well as check verification, cash
management, electronic data interchange, electronic tax payment and filing, and
other ancillary services directly and indirectly to merchants through
utilization of an electronic telecommunications and computer network and any
other legal business or businesses in any area or areas Approved by the Board
of Directors.
1.17 "CAPITAL ACCOUNT" or "CAPITAL ACCOUNT" has the meaning set forth in
Section 7.4 hereof.
1.18 "CHANGE IN CONTROL" means any transaction, other than an IPO,
whereby, directly or indirectly, National Data Group ceases to be the largest
Beneficial Owner of Company, or after a Conversion, its successor.
1.19 "CODE" means the Internal Revenue Code of 1986, as amended from time
to time. All references herein to specific sections of the Code shall be
deemed to refer also to corresponding provisions of any succeeding law.
1.20 "COMPANY" means Global Payment Systems LLC, a Georgia limited
liability company operated pursuant to this Agreement.
1.21 "CONVERSION" means a change in the legal status of the Company from a
limited liability company into a business corporation organized under the laws
of Delaware or one of the other United States, in such form and manner
(including, without limitation, by merger, reorganization, liquidation,
transfer of Membership Interests or assets of the Company, or by any other
means permissible under applicable law) and with such classes of stock having
such rights, preferences and other terms as may be approved by a Majority in
Interest; provided, however, that immediately following the effective time of
the Conversion, the interests of the Members in the corporation into which
Company is converted shall be exactly proportionate to their Percentage
Ownership Interest immediately prior to such effective time.
1.22 "COST OF FUNDS" means, with respect to any loan made by any member of
the National Data Group (or any Affiliate thereof,) to the Company, a variable
rate equal to (a) the lowest rate of interest reasonably available to that
Entity for Available Loans of the same term and having the same collateral (if
any), either individually or pursuant to a larger credit facility (the "Senior
Credit Agreement") or (b) if there shall be no Senior Credit Agreement in
existence, the rate applicable to the 13 week Treasury Bill as published in the
Wall Street Journal (or other
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nationally recognized business publication in the event the Wall Street Journal
is not published) on the first Monday of each month. "Available Loans" means
any loans pursuant to which such Entity can draw down funds at the time any such
loan is made to Company.
1.23 "DIRECTOR" has the meaning set forth in Section 11.1 hereof.
1.24 "DISABLING EVENT" means the dissolution of a Member or the Bankruptcy
of a Member.
1.25 "ENTITY" means any person, corporation, limited liability company,
partnership (general or limited), joint venture, association, joint stock
company, trust or other business entity or organization.
1.26 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
1.27 "FISCAL YEAR" means the annual period of the Company for purposes of
accounting and tax reporting selected by Approval of the Board of Directors.
The first Fiscal Year shall commence on the date hereof, and each succeeding
Fiscal Year shall commence on the date immediately following the last day of
the immediately preceding Fiscal Year, unless otherwise Approved by the Board
of Directors. Each Fiscal Year shall end on the earliest to occur after the
commencement of such Fiscal Year of (a) the Fiscal Year end, or (b) the date on
which the Company is liquidated under Section 23.4 hereof.
1.28 "IPO" means (a) a public offering of equity securities of the
Company, or its successor after a Conversion, that is effected through a firm
commitment underwriting and pursuant to a registration statement declared
effective under the Securities Act of 1933; (b) a distribution of equity
securities of the Company, or its successor after a Conversion, by National
Data to its shareholders; (c) a distribution of equity securities of all of the
businesses of National Data and subsequent merger of the Company, or its
successor after a Conversion, with and into National Data; or (d) any other
transaction which has the effect of causing the equity securities or additional
equity securities of the Company, or its successor after a Conversion, to
become publicly traded in an established market, including but not limited to a
transaction with another Entity.
1.29 "LAST DAY" has the meaning set forth in Section 9.2 hereof.
1.30 "LIQUIDATION PROCEEDS" means all cash or other assets held by the
Company at the time of the happening of a dissolving event described in Section
23.1 hereof and all cash or other assets received by the Company after the
happening of such dissolving event (irrespective of whether such cash or other
assets were or would otherwise have been considered Net Cash Flow or Net Sales
Proceeds under the terms of this Agreement).
1.31 "MAJORITY IN INTEREST" means Members owning more than fifty percent
(50%) of the Percentage Ownership Interests, or, with respect to its successor
after a Conversion, more than 50% of the voting common stock.
1.32 "MANAGER" has the meaning set forth in the Act.
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1.33 "MASTERCARD" means MasterCard International Incorporated, a Delaware
corporation, and any permitted transferees of MasterCard's Membership Interest
pursuant to Article 18 hereunder.
1.34 "MASTERCARD CONTRIBUTED ASSETS" has the meaning ascribed to the term
"Seller Contributed Assets" in the Purchase Agreement.
1.35 "MASTERCARD PURCHASED ASSETS" has the meaning ascribed to the term
"Purchased Assets" in the Purchase Agreement.
1.36 "MEMBER" means MasterCard, each Entity which is a member of the
National Data Group, each Entity that acquires all or any percentage (excluding
the acquisition of only an Economic Interest) of the respective Membership
Interests originally issued to any of the foregoing, and any Entity admitted as
a Member with respect to newly issued Membership Interests. Any Entity ceases
to be a Member when the Entity no longer owns any Membership Interest or when
the Entity withdraws from the Company in accordance with this Agreement.
1.37 "MEMBERSHIP INTEREST" means all of those rights (including rights to
Net Cash Flow, Net Sales Proceeds and other distributions and rights to
participate in the management of the Company) and duties held by a particular
Member as defined herein and under applicable law.
1.38 "MINIMUM EQUITY" means, with respect to MasterCard, a Percentage
Ownership Interest or the equivalent equity of a successor after a Conversion
equal to 50% times the result of its initial Percentage Ownership Interest or
the equivalent equity of a successor after a Conversion less any dilution
therein from the issue of new Membership Interests or the equity of a successor
after a Conversion.
1.39 "NATIONAL DATA" means National Data Corporation, a Delaware
corporation.
1.40 "NATIONAL DATA GROUP" means collectively the National Data Members
and National Data.
1.41 "NATIONAL DATA GROUP CONTRIBUTED ASSETS" has the meaning ascribed to
the term "Parent Contributed Assets" in the Purchase Agreement.
1.42 "NATIONAL DATA MEMBER" means each of GPS, NDC Canada, NDCI, NDPS, and
any permitted transferees of the Membership Interest of any of those Entities
pursuant to Article 18 hereunder. Any action to be taken by the National Data
Members shall be done by GPS and any writing signed by GPS shall be binding on
all National Data Members as if signed by all such Members.
1.43 "NDCI SERVICE AGREEMENT" has the meaning ascribed to the term "NDCI
Service Agreement" in the Purchase Agreement.
1.44 "NET CASH FLOW" means, for any given period, all receipts (including
working capital loan proceeds) from the conduct of the business of the Company
for such period, from whatever source derived (but specifically excluding any
Net Sale Proceeds), which are available for distribution by the Company
following (a) the payment of all operating, debt service and capital expenses
of the Company for such period to the extent not paid from reserves (including,
without limitation, any principal and interest due during any such period with
respect to any debt of the
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Company), and (b) the establishment or replenishment, as deemed reasonably
necessary by Approval of the Board of Directors, of reserves for taxes, debt
service, maintenance, repairs and other expenses and other working capital
requirements of the Company or for contingent and unforeseen liabilities of the
Company, or for any other Company purpose.
1.45 "NET EARNINGS" means for each Fiscal Year the net operating earnings
of the Company, before extraordinary gains or losses, as computed in accordance
with generally accepted accounting principles consistently applied ("GAAP").
Such extraordinary gains or losses are those that are reported separately as
extraordinary pursuant to GAAP.
1.46 "NET EARNINGS INTEREST" has the meaning set forth in Article 6.
1.47 "NET PROFIT" and/or "NET LOSS" means, for each Fiscal Year, the
Company's taxable income or taxable loss for such Fiscal Year, as determined
under Section 703(a) of the Code and Treasury Regulation Section 1.703-1. For
this purpose, all items of income, gain, loss or deduction required to be
stated separately pursuant to Section 703(a)(1) of the Code shall be included
in taxable income or taxable loss, but with any adjustments required by
Treasury Regulations Section 1.704-1(b) and the following adjustments:
(a) any tax-exempt income, as described in Section 705(a)(1)(B) of
the Code, realized by the Company during such Fiscal Year shall be taken
into account in computing such taxable income or taxable loss as if it
were taxable income;
(b) any expenditures of the Company described in Section 705(a)(2)(B)
of the Code for such Fiscal Year, including any items treated under
Treasury Regulation Section 1.704-1(b)(2)(iv)(i) as items described in
Section 705(a)(2)(B) of the Code, shall be taken into account in computing
such taxable income or taxable loss as if they were deductible items;
(c) in lieu of the depreciation, amortization, or other cost recovery
deductions taken into account in computing such taxable income or loss,
there shall be taken into account Book Depreciation for such Fiscal Year
or other period;
(d) any gain or loss included in the computation of Sale Gain or Sale
Loss shall not be included in the computation of Net Profit or Net Loss
and any other gain or loss resulting from any disposition of property with
respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Book Value of the asset
disposed of, notwithstanding that the adjusted tax basis of such asset is
different;
(e) any item of income, gain, loss or deduction that is required to
be allocated to the Members under Section 9.4, 9.5, 9.7, 9.8, 9.9 or 9.10
hereof shall not be taken into account in computing such taxable income or
taxable loss.
If the Company's taxable income or taxable loss for such Fiscal Year, as
adjusted in the manner provided above, is a positive amount, such amount shall
be the Company's Net Profit for such Fiscal Year; and if negative, such amount
shall be the Company's Net Loss for such Fiscal Year.
1.48 "NET SALES PROCEEDS" means (a) the net proceeds from all sales and
other dispositions of all or any part of the assets of the Company (other than
a sale or exchange of a de minimis portion of the Company's assets occurring in
the ordinary course of business), less any reserves established by the Board of
Directors, and (b) all loan proceeds (other than any working capital
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22
loans) from borrowings by the Company, less any portion thereof (i) used to
establish reserves, (ii) used for the expansion or financing of the business of
the Company, or (iii) applied in payment of any outstanding indebtedness as, in
each case, approved by the Board of Directors.
1.49 "NOTICE" has the meaning set forth in Section 24.2 hereof.
1.50 "OFFICERS" has the meaning set forth in Section 11.5(m) hereof.
1.51 "PERCENTAGE OWNERSHIP INTEREST" has the meaning set forth in
Article 6.
1.52 "PROHIBITED ACTIVITY" means each of (i) the business of providing
electronic transaction processing services involving the authorization
(including voice authorization) and capture, settlement and clearing of
transactions involving credit, debit and similar cards through utilization of
an electronic telecommunications and computer network directly to an Entity
that honors credit, debit or similar cards, and (ii) the business of issuing
credit, debit and similar cards, provided, however, that it shall not
constitute a Prohibited Activity for the Company (x) to provide services
pursuant to any Parent Contract (as defined in the Purchase Agreement)
consistent with past practices of National Data or (y) to engage in any conduct
the purpose of which is to retain, renew or expand any Parent Contract
(provided that any such retention, renewal or expansion of such Parent Contract
does not expand the scope of services to be provided by the Company to include
a service described in either of the preceding clauses (i) or (ii)).
1.53 "PROHIBITED TRANSFEREE" means each of Visa International Services
Association, American Express Company, and Dean Witter, Discovery, Inc.
1.54 "PURCHASE AGREEMENT" means that certain Asset Purchase and
Contribution Agreement, dated as of February 22, 1996, by and among National
Data, GPS, NDPS, NDCI and NDC Canada, MasterCard and the Company, as amended by
Amendment No. 1 thereto dated as of March 31, 1996.
1.55 "PUT" has the meaning set forth in Section 20.2 hereof.
1.56 "PUT DATE" has the meaning set forth in Section 20.2 hereof.
1.57 "PUT EQUITY" has the meaning set forth in Section 20.1 hereof.
1.58 "PUT EVENT" has the meaning set forth in Section 20.1 hereof.
1.59 "PUT NOTICE" has the meaning set forth in Section 20.2 hereof.
1.60 "PUT PRICE" has the meaning set forth in Section 20.3 hereof.
1.61 "PUT RIGHT" has the meaning set forth in Section 20.1 hereof.
1.62 "RULES" has the meaning set forth in Section 22.1 hereof.
1.63 "SALE" has the meaning set forth in Section 21.1 hereof.
1.64 "SALE GAIN" and/or "SALE LOSS" means any gain or loss realized by the
Company for income tax purposes in any Fiscal Year by reason of the sale or
exchange of all or any part of
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the assets of the Company (other than a sale or exchange of a minor portion of
the Company's assets occurring in the ordinary course of business) and any
adjustment in the Book Value of assets provided in the last sentence of Section
1.16, except that, with respect to any item of property the Book Value of which
differs from its adjusted basis for federal income tax purposes, Sale Gain and
Sale Loss means any gain or loss recognized by the Company for book purposes in
any Fiscal Year by reason of the sale or exchange of any such item of property,
and such book gain and book loss with respect to any such item of property shall
be computed by reference to the Book Value of such item of property as of the
date of such sale rather than by reference to the tax basis of the item of
property as of such date.
1.65 "SALE NOTICE" has the meaning set forth in Section 21.1 hereof.
1.66 "SALE PRICE" has the meaning set forth in Section 21.1 hereof.
1.67 "TARGET FINAL BALANCES" has the meaning set forth in Section 9.11
hereof.
1.68 "TAX MATTERS PARTNER" has the meaning set forth in Section 14.5
hereof.
1.69 "TRANSFEROR" has the meaning set forth in Section 18.4 hereof.
1.70 "TREASURY REGULATIONS" means the federal income tax regulations
promulgated under the Code, as such regulations may be amended from time to
time. All references herein to a specific section of the Treasury Regulations
shall be deemed also to refer to any corresponding provisions of succeeding
Treasury Regulations.
ARTICLE 2
FORMATION OF COMPANY
National Data has formed the Company under the Act and, notwithstanding
the withdrawal by National Data and Modular Data, Inc. from the Company, all
Members are hereby consenting to continue the Company in accordance with the
Act.
ARTICLE 3
NAME AND PRINCIPAL OFFICE OF COMPANY; REGISTERED AGENT;
STATUTORY COMPLIANCE
3.1 NAME. The name of the Company is "Global Payment Systems LLC."
3.2 PRINCIPAL OFFICE AND PLACE OF BUSINESS; REGISTERED AGENT. The
registered agent of the Company shall be National Data. The principal and
registered office of the Company shall be located at c/o National Data
Corporation, National Data Plaza, Atlanta, Georgia 30329-2010 or at such other
place designated by Approval of the Board of Directors from time to time and at
any time after giving written notice of such designation to the Members. The
principal place of business in the State of Georgia shall be at National Data
Plaza, Atlanta, Georgia 30329-2010 or at such other place designated by
Approval of the Board of Directors from time to time and at any time after
giving written notice of such designation to the Members.
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3.3 STATUTORY COMPLIANCE. The Company shall exist under and be governed
by, and this Agreement shall be construed in accordance with, the internal laws
of the State of Georgia, without reference to the conflicts of laws or choice
of law provisions thereof. GPS, on behalf of the Members, shall make all
filings and disclosures required by, and shall otherwise comply with, all such
laws. GPS, on behalf of the Members, shall have executed and filed in the
appropriate records any certificate or certificates and reports required by law
to be filed in connection with the formation and operation of the Company or
any amendments to this Agreement and shall execute and file such other
documents and instruments as may be necessary or appropriate with respect to
the formation of, or the conduct of business by, the Company or the amendment
of this Agreement in accordance with the terms of this Agreement, including in
every instance any amendments to the Articles.
ARTICLE 4
PURPOSE OF COMPANY; USE OF COMPANY ASSETS; TITLE TO PROPERTY;
LIMITED LIABILITY OF MEMBERS
4.1 COMPANY PURPOSES. The sole purposes of the Company shall be to
operate the Business in accordance with the terms of this Agreement. The
Company may also engage in such other activities and businesses as Approved by
the Board of Directors or as a Majority in Interest Approves, subject to the
terms and conditions of this Agreement and to compliance with, and any
limitations imposed by, applicable law, provided, however, Company shall not
engage, so long as MasterCard is a Member and there has been no IPO, in the
Prohibited Activities without Approval of MasterCard.
4.2 TITLE TO PROPERTY. All real and personal property owned by the
Company shall be owned by the Company as an Entity and, insofar as permitted by
applicable law, no Member shall have any ownership interest in such property in
its individual name or right and each Membership Interest shall be personal
property for all purposes.
4.3 LIMITED LIABILITY OF MEMBERS. Each Member's liability shall be
limited as set forth in this Agreement, the Act and other applicable law. A
Member shall not be bound by, or be personally liable for, the expenses,
liabilities or obligations of the Company beyond the amount contributed by the
Member to the capital of the Company.
ARTICLE 5
DURATION OF COMPANY
The duration of the Company shall continue until the Company is dissolved
and liquidated as provided in Article 23 hereof.
ARTICLE 6
PERCENTAGE OWNERSHIP INTERESTS; NET EARNINGS INTEREST; CERTIFICATES
6.1 PERCENTAGE OWNERSHIP INTEREST. The National Data Members and
MasterCard shall be the initial Members of the Company. The initial
"Percentage Ownership Interest" in the Company of each of the Members shall be
as follows:
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25
MEMBER PERCENTAGE OWNERSHIP INTEREST
------ -----------------------------
GPS 78.79% [15,758,000 Units]
NDC Canada 0.3% [60,000 Units]
NDPS 13.4% [2,680,000 Units]
NDCI 0.01% [2,000 Units]
Total National Data Group 92.5% [18,500,000 Units]
MasterCard 7.5% [1,500,000 Units]
The Percentage Ownership Interest of a Member may change from time to time as
provided in Articles 8, 16, and 18.
6.2 NET EARNINGS INTEREST. Notwithstanding the foregoing, the "Net
Earnings Interests" of the National Data Members and MasterCard shall be 99%
for National Data Members and 1% for MasterCard through May 31, 1998; 97% for
the National Data Members and 3% for MasterCard from June 1, 1998, through May
31, 1999; 95% for the National Data Members and 5% for MasterCard from June 1,
1999, through May 31, 2000; and at the Percentage Ownership Interests of the
Members after May 31, 2000, provided, however, the above percentages are based
on the National Data Members having an aggregate Percentage Ownership Interest
of 92.5% and MasterCard's having a Percentage Ownership Interest of 7.5% and if
the Members have different Percentage Ownership Interests, the respective Net
Earnings Interests will be adjusted proportionally. For example if at any time
MasterCard's Percentage Ownership Interest were reduced to 3.75%, its Net
Earnings Interest thereafter would be 50% of the above amounts. The aggregate
Net Earnings Interest allocated to the National Data Members shall be
reallocated among the National Data Members based on their respective
Percentage Ownership Interests.
6.3 CERTIFICATES; AUTHORIZED UNITS. A Membership Interest shall be
evidenced by a certificate issued by the Company in the name of the Member,
which certificate shall bear the legend set forth in Section 24.14. Such
certificate shall be based on units, with the total number of authorized units
of the Company initially being 20,000,000. The number of authorized units may
be adjusted from time to time by a Majority in Interest.
ARTICLE 7
CAPITAL OF COMPANY
7.1 CONTRIBUTION BY MASTERCARD. Contemporaneously with the execution of
this Agreement and pursuant to the Purchase Agreement, MasterCard shall
contribute to the Company the MasterCard Contributed Assets. On account of its
contribution to the Company of the MasterCard Contributed Assets, MasterCard
shall receive a credit to its Capital Account in an amount equal to 7.5% of the
initial aggregate Capital Accounts of all of the Members.
7.2 CONTRIBUTION BY THE NATIONAL DATA MEMBERS. Contemporaneously with the
execution of this Agreement and pursuant to the Purchase Agreement, the
National Data Members
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shall collectively contribute to the Company the National Data Group
Contributed Assets and sixty million and 00/100 dollars ($60,000,000) in cash.
On account of their contribution to the Company of the National Data Group
Contributed Assets and the $60,000,000, GPS shall receive a credit to its
Capital Account in an amount equal to 78.79% of all Capital Accounts, NDC
Canada shall receive a credit to its Capital Account in an amount equal to 0.3%
of all Capital Accounts, NDCI shall receive a credit to its Capital Account in
an amount equal to 0.01% of all Capital Accounts, and NDPS shall receive a
credit to its Capital Account in an amount equal to 13.4% of all Capital
Accounts (which in the aggregate constitute 92.5% of the initial aggregate
Capital Accounts of all of the Members).
7.3 MASTERCARD PURCHASED ASSETS. Contemporaneously with the execution of
this Agreement and pursuant to the Purchase Agreement, MasterCard shall sell
and the Company shall buy the MasterCard Purchased Assets. The value of the
MasterCard Purchased Assets shall not be a credit to the MasterCard Capital
Account and the price for such assets shall not be a debit thereto, the sale of
the MasterCard Purchased Assets constituting a transaction between a partner
and a partnership other than in its capacity as a partner for federal income
tax purposes.
7.4 CAPITAL ACCOUNTS. A separate capital account (each a "Capital
Account") shall be maintained for each Member, and the amount of such capital
account, as of any particular date, shall be the sum of the following amounts:
(a) the aggregate amount of cash that has been contributed to the
capital of the Company by such Member as of such date; plus
(b) the net fair market value (as Approved by the Board of Directors
as of the date of contribution) of any property that has been contributed
by such Member to the capital of the Company as of such date; plus
(c) the aggregate amount of the Company's Net Profit and Sale Gain
for all Fiscal Years ending prior to such date that has been, or is
required to be, allocated to such Member pursuant to Sections 9.1 and 9.2
hereof; plus
(d) the aggregate amount of items of income for all Fiscal Years
ending prior to such date that has been, or is required to be, allocated
to such Member pursuant to Sections 9.7, 9.8 and 9.9 hereof and the
positive items described in Sections 9.4 and 9.11; minus
(e) the aggregate amount of the Company's Net Loss and Sale Loss for
all Fiscal Years ending prior to such date that has been, or is required
to be, allocated to such Member pursuant to Section 9.3 hereof; and minus
(f) the aggregate amount of items that have been, or are required to
be, allocated to such Member pursuant to Sections 9.6 and 9.10 and the
negative items described in Sections 9.4 and 9.11 hereof for all Fiscal
Years ending prior to such date; and minus
(g) the aggregate amount of cash and the agreed upon net fair market
value (as of the date of distribution) of all other property that has been
distributed to such Member by the Company as of such date.
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The value of any property contributed by or distributed to a Member which holds
a Majority in Interest shall be subject to the provisions of Article 12. A
Member's capital account shall also be increased or decreased to reflect any
items described in Treasury Regulation Section 1.704-1(b)(2)(iv) that are
required to be reflected in such Member's capital account under such Regulation
and which are not otherwise taken into account in computing such capital
account as provided above.
7.5 INTEREST ON AND RETURN OF CAPITAL. No Member shall be entitled to any
interest on such Member's Capital Account or on such Member's contributions to
the capital of the Company; and except as otherwise provided in Articles 10 and
23 hereof, no Member shall have the right to demand or to receive the return of
all or any part of such Member's Capital Account or of such Member's
contributions to the capital of the Company.
7.6 NO THIRD-PARTY RIGHTS. Nothing contained in this Article 7 nor any
other provision of this Agreement shall be construed to create any rights or
benefits in any Entity, other than the Members, and their respective legal
representatives and permitted transferees, successors and assigns, subject to
the limitations on transfer contained herein.
ARTICLE 8
ADDITIONAL FINANCIAL CONTRIBUTIONS
8.1 WORKING CAPITAL COMMITMENT. National Data shall make available to
Company working capital of no less than $15 million through (a) direct loans to
Company from one or more members of the National Data Group, (b) loans to
Company from third party lenders, or (c) retained earnings or other cash flow
of Company. Any such working capital loans from any member of the National
Data Group (or any Affiliate thereof) shall bear interest at National Data's
Cost of Funds plus the amount computed in accordance with Exhibit A. To the
extent that the Company has at any time a working capital loan from an Entity
or Entities other than National Data or has retained earnings or cash flow
available for working capital purposes, National Data's obligation hereunder
shall be correspondingly reduced; and at the earlier of an IPO or the time that
such other funds available for working capital purposes equals or exceeds $15
million, National Data's obligation hereunder shall cease.
8.2. ADDITIONAL FUNDS FOR COMPANY. Unless otherwise provided in this
Agreement, the Members may, but are not obligated to, make such additional
contributions of capital to the Company in such manner and at such times as the
Members unanimously may agree. In addition, the National Data Members shall
have the right at any time to make additional contributions of capital to the
Company in such manner and on such terms as are determined by Approval of the
Board of Directors to be fair to and in the best interests of the Company and
the Members. The additional capital provided by any National Data Member
shall, at such National Data Member's sole election, be treated as either (i) a
loan, or (ii) as an acquisition of additional equity. In the event such
capital contribution is treated as a Term Loan (as hereinafter defined) or as
an acquisition of additional equity, MasterCard shall have the right to
participate in such Term Loan or acquisition of equity on the same terms as the
National Data Member(s). MasterCard's participation shall not exceed a
percentage equal to its Percentage Ownership Interest at the time of the
contribution divided by the sum of (x) MasterCard Percentage Ownership Interest
and (y) the aggregate Percentage Ownership Interests of all of the National
Data Members. A "Term Loan" shall be any loan, other than (a) extensions of
credit consistent with the terms in Section 8.1, (b) loans that bear interest
at no more than National Data's Cost of Funds, or (c) unsecured loans that have
an aggregate principal balance at any time in the aggregate of less than ten
million dollars
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($10,000,000). Any transaction involving a Term Loan or additional equity in
which MasterCard has been offered the opportunity to participate in accordance
with the terms of this Section 8.2 shall not be subject to the provisions of
Article 12. MasterCard shall be given written notice of any such opportunity
to make a capital contribution or loan and shall be given sixty (60) days to
elect to make such contribution or loan. A National Data Member or Members may
make the entire contribution in accordance with the provisions of Article 12
for the period preceding the time MasterCard communicates its decision to
participate in the contribution or loan. The participation rights granted to
MasterCard under this Article 8 shall cease to exist upon the first to occur of
(a) an IPO or (b) MasterCard's having less than the Minimum Equity.
ARTICLE 9
ALLOCATION OF PROFITS AND LOSSES
9.1 NET PROFIT. The Company's Net Profit, if any, for each Fiscal Year
shall be allocated to the Members in the following manner and in the following
order of priority:
(a) first, to the Members, in proportion to, and to the extent of,
their respective shares of any distributions made or to be made by the
Company pursuant to Section 10.1 hereof with respect to such Fiscal Year;
then
(b) second, to the Members, in proportion to, and to the extent of,
the respective excesses, if any, of any distributions made or to be made
by the Company pursuant to Section 10.1 hereof with respect to such Fiscal
Year and for all prior Fiscal Years over the respective aggregate amounts
of Net Profit theretofore allocated to such Members pursuant to Section
9.1(a) hereof above (including Net Profit allocated to the Members under
Section 9.1(a) hereof for such Fiscal Year) and this Section 9.1(b); and
then
(c) to the Members in proportion to their Percentage Ownership
Interests.
9.2 ALLOCATION OF SALE GAIN. Any Sale Gain recognized by the Company in
any Fiscal Year shall be allocated in the following order of priority:
(a) first, to the Members in an amount and in a manner so as to cause
their Capital Accounts to be in proportion to their respective Percentage
Ownership Interests; and
(b) second, to the Members in proportion to their respective
Percentage Ownership Interests as of the last day of such Fiscal Year (the
"Last Day").
For purposes of this Section 9.2, the amount of a Member's capital account as
of a Last Day shall be computed as of such Last Day in the manner provided in
Section 7.4 hereof, but shall be adjusted to reflect the allocation to such
Member of all amounts required to be allocated to such Member for such Fiscal
Year under Article 9 hereof (other than pursuant to this Section 9.2).
9.3 NET LOSS AND SALE LOSS. The Company's Net Loss and any Sale Loss for
each Fiscal Year shall be allocated to the Members:
(a) first in such amount and in such proportion as to cause their
respective Capital Accounts to be in proportion to their respective
Percentage Ownership Interests; and
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(b) thereafter, in proportion to their respective Percentage
Ownership Interests.
9.4 BOOK DEPRECIATION. Book Depreciation and any other loss or deduction
(including loss on sale) with respect to ownership of the Company's assets
shall be included in the calculation of Net Income and Net Loss provided,
however, that the Book Depreciation and any other loss or deduction (including
loss on sale) with respect to the following assets shall not be so included,
but shall be allocated in the manner indicated:
(a) With respect to $60,000,000 of the MasterCard Purchased Assets, such
items shall be specially allocated to the Members in accordance with their Net
Earnings Interests until an Adjustment Event;
(b) With respect to the National Data Group Contributed Assets, such items
shall be specially allocated to the Members in accordance with their Net
Earnings Interests until an Adjustment Event;
(c) With respect to $50,000,000 of the MasterCard Purchased Assets, such
items shall be allocated to the Members in accordance with their Percentage
Ownership Interests until an Adjustment Event.
9.5 SECTION 704(C) ALLOCATION. Any items of income, gain, loss and
deduction with respect to any property that has been contributed by a Member to
the capital of the Company and which is required or permitted to be allocated
to the Members for income tax purposes under Section 704(c) of the Code so as
to take into account the variation between the tax basis of such property and
its agreed upon fair market value at the time of its contribution shall be
allocated to the Members solely for income tax purposes in accordance with the
traditional method set forth in Treasury Regulation Section 1.704-3(b) with
respect to contributions by MasterCard and the National Data Members and
otherwise by Approval of the Board of Directors.
9.6 LIMITATION ON NET LOSS ALLOCATION. Notwithstanding the provisions of
Section 9.3 hereof, if the amount of Net Loss and Sale Loss that would
otherwise be allocated to a Member in any Fiscal Year under Section 9.3 hereof
would cause (or increase) an Adjusted Capital Account Deficit for any Member as
of the Last Day of such Fiscal Year, then a proportionate part of such Net Loss
and Sale Loss equal to the sum of such Net Loss and Sale Loss, to the extent it
creates (or increases) such Member's Adjusted Capital Account Deficit, shall be
allocated to the other Member(s) to the extent possible.
9.7 QUALIFIED INCOME OFFSET. Notwithstanding any provision hereof to the
contrary, if any Member unexpectedly receives in any Fiscal Year any
adjustment, allocation or distribution described in Treasury Regulations
Section Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and if such Member has
an Adjusted Capital Account Deficit as of the Last Day of such Fiscal Year,
then all items of income and gain (including Sale Gain) of the Company
(consisting of a pro rata portion of each item of Company income and gain,
including gross income and Sale Gain) for such Fiscal Year (and, if necessary,
for subsequent Fiscal Years) shall be allocated to such Member in the amount
and in the manner necessary to eliminate such Adjusted Capital Account Deficit
as quickly as possible.
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9.8 GROSS INCOME ALLOCATION. Notwithstanding any provision hereof to the
contrary, if a Member has an Adjusted Capital Account Deficit as of the Last
Day of any Fiscal Year, then items of income and gain (including Sale Gain) of
the Company (after taking into account allocations otherwise to be made to such
Member other than those provided in Section 9.7 and this Section 9.8) shall be
allocated to such Member in the amount and in the manner necessary to eliminate
such Adjusted Capital Account Deficit as quickly as possible.
9.9 MINIMUM GAIN AND MEMBER MINIMUM GAIN CHARGEBACK. Notwithstanding any
provision hereof to the contrary, any item of Company income or gain (including
Sale Gain) for any Fiscal Year (or any portion of any such item) that is
required to be allocated to the Members under Treasury Regulations Section
Section 1.704-2(f) or 1.704(2)(i)(4) shall be allocated to the Members for
such Fiscal Year (and, if necessary, for succeeding years) in the manner so
required by such Treasury Regulations.
9.10 MEMBER NONRECOURSE DEDUCTIONS. Except to the extent otherwise
allocated pursuant to Section 9.4, any item of Company loss, deduction or
expenditure described in Section 705(a)(2)(B) of the Code for any Fiscal Year
(or any portion of any such item) that is required to be allocated to the
Members under Treasury Regulation Section 1.704-2(i)(1) shall be allocated to
the Members in proportion to their respective allocations of Net Income or Net
Loss for such Fiscal Year.
9.11 TARGET FINAL BALANCES. The allocations of Net Profit, Net Loss, Sale
Gain and Sale Loss and the allocations in Section 9.4 of this Agreement are
intended to produce final Capital Account balances (Capital Account balances
immediately prior to the liquidation of the Company or of a Membership
Interest, after taking into account all allocations for fiscal periods through
such point in time) that are at levels ("Target Final Balances") that permit
liquidating distributions which, if made in accordance with such final Capital
Account balances would equal the distributions that would occur if such
liquidating proceeds were distributed in accordance with Percentage Ownership
Interests at that time. To the extent that the allocation provisions of this
Agreement would not produce the Target Final Balances, the Members agree to
take such actions as are necessary to amend such allocation provisions to
produce such Target Final Balances. Notwithstanding the other provisions of
this Agreement, allocations of income, gain, loss and deduction (including
items of gross income, gain, loss and deduction) shall be made to the maximum
extent possible to produce such Target Final Balances.
9.12 TAX ALLOCATIONS. Except to the extent otherwise provided
specifically in this Article 9, all items of Company income, gain, loss, and
deduction for federal, state, and local income tax reporting for any Fiscal
Year shall be divided among the Members in the same proportion as the sum of
items that are allocated to their respective Capital Accounts for the year are
divided.
ARTICLE 10
DISTRIBUTION OF COMPANY PROPERTY
10.1 ANNUAL DISTRIBUTIONS. The Company shall distribute to the Members as
soon as possible following the close of a Fiscal Year (except in the year of a
Conversion in which case such distribution shall be made no later than
immediately prior to the Conversion) the following amounts in the following
order and priority:
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(a) For any period prior to an Adjustment Event, an amount equal to
the Net Earnings of the Company shall be distributed to the Members in
proportion to their respective Net Earnings Interests and any Net Cash
Flow in excess of the Net Earnings shall be distributed to the Members in
proportion to their respective Percentage Ownership Interests. If
Company does not have sufficient Net Cash Flow to make the foregoing
distribution, to the extent such actual distributions are less than the
required amount, the Company will be deemed to have made the distribution
and to have borrowed the funds from the Members in accordance with
Section 8.2.
(b) For any period following an Adjustment Event, Net Cash Flow
shall be distributed to the Members in proportion to their respective
Percentage Ownership Interests.
The total amount distributed to the Members under paragraph (a) or (b) hereof
shall, with respect to each Fiscal Year, be no less than the total federal,
state and local income taxes that the Company would have paid if it had been a
corporation.
10.2 NET SALES PROCEEDS. Subject to the provisions of Section 23.2
hereof, Net Sales Proceeds shall be distributed by the Company to the Members
in the proportion to their respective Percentage Ownership Interests.
10.3 CONSENT TO DISTRIBUTIONS. All distributions provided for herein
shall be made only as and when determined by Approval of the Board of
Directors, consistent with the provisions of this Article 10.
10.4 WITHHOLDING. If the Code or applicable state law requires the
Company to withhold any tax with respect to a distributive share of Company
income, gain, loss, deduction or credit, or a distribution of cash or property,
the Company shall withhold and pay the tax. If at any time the amount required
to be withheld exceeds the amount that would otherwise be distributed to the
Member to whom the withholding requirement applies, then that Member shall make
a contribution to the Company equal to the excess of the amount required to be
withheld over the amount, if any, that would otherwise be distributed to that
Member and which is available to be withheld. Any amount withheld with respect
to a Member shall be deducted from the amount that would otherwise be
distributed to that Member but shall be treated as though it had been
distributed to such Member.
ARTICLE 11
MANAGEMENT OF COMPANY
11.1 BOARD OF DIRECTORS. The management and control of the business
affairs of the Company shall be vested in the Members, which have chosen, as a
matter of administrative convenience, to exercise such management and control
through the Board of Directors, composed of one member designated by
MasterCard, three members (in the aggregate) designated by the National Data
Members, and such additional members as may from time to time be designated by
a Majority in Interest (the members of the Board of Directors being hereinafter
collectively referred to as the "Directors," and individually as a "Director");
provided, however, that (a) in no event shall the Board of Directors have fewer
than two (2) members and (b) until an IPO, no employee or director of a
Prohibited Transferee shall serve as a Director without first obtaining the
Approval of the Director designated by MasterCard; and provided further that
MasterCard shall not be entitled
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to appoint a Director after an IPO or after MasterCard owns less than the
Minimum Equity. The foregoing restriction on the designation of an employee or
director of a Prohibited Transferee shall not apply to any person from and
after such person's retirement, resignation or other termination of services as
such employee or director of a Prohibited Transferee. Each Member agrees that
the Director(s) appointed by such Member shall have the authority to act on
such Member's behalf to effectuate the purposes of this Agreement, to execute
documents on its behalf (unless such Member provides to the other Member(s)
prior written notice to the contrary) and, acting as a member of the Board of
Directors, to determine policy for the Company. Directors serve solely at the
pleasure of the Member or Members appointing them and a Member or Members may
at any time and from time to time replace such Director(s). Each Director
shall have the right to rely on the authority of the other Directors to act
hereunder until such time as the Director receives written notice that a
Director has been removed or his authority has been limited. Each Member
entitled to designate a Director, by written notice to the other, may designate
an individual to serve as an alternate Director but each Director shall have
only one (1) vote on the Board of Directors, in connection with an Approval by
the Board of Directors under this Agreement. No Director shall have the
authority to execute any instrument or bind the Company in any way without the
express Approval of the Board of Directors.
11.2 INITIAL BOARD OF DIRECTORS. The initial Board of Directors shall be
as follows:
Director appointed by MasterCard: William I Jacobs
Directors appointed by the Robert A. Yellowlees
National Data Members: Edward L. Barlow
Neil Williams
11.3 MEETINGS OF BOARD OF DIRECTORS. Meetings of the Board of Directors
may be called by any Director on no less than 36 hours notice; provided,
however, that any Director may, within 24 hours of a called meeting, request a
delay in such meeting by up to 24 hours, and such delay shall be granted if it
is impractical for such Director to attend the meeting at the original time.
The Board of Directors may meet at any place within or without the State of
Georgia, as set forth in the notice of the meeting; a Director who is unable to
attend a meeting in person may attend at his election via telephone by
providing notice of such participation and the telephone number at which he can
be reached at least three (3) hours prior to such meeting. Regular and special
meetings shall be held at any place designated from time to time by Approval of
the Board of Directors, including, but not limited to, meetings by telephone
conference call in which each participant is able to speak to and hear each
other participant.
11.4 ACTION BY BOARD OF DIRECTORS. Any action required herein to be
Approved or taken by the Board of Directors may be Approved or taken only upon
(a) Approval of the Board of Directors at a validly-held meeting, or (b)
through an executed written consent signed by all of the Directors specifying
the actions Approved and/or to be taken and such consent is filed in the minute
book of the Company. Any such written consent shall be sent to each Director
as promptly as practicable. Notwithstanding the provisions of . Section
14-11-308(b) of the Act, except as expressly limited by this Agreement, the
Board of Directors shall have the sole and exclusive right to manage and
control, and complete and exclusive discretion in the management and control
of, the affairs and business of the Company on behalf of the Members; and shall
have all of the rights and powers
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of a Manager (as defined in the Act) of a limited liability company to the
extent permitted by the Act, including, without limitation but subject to the
other provisions of this Agreement, the exclusive right and power to:
(a) acquire by purchase, lease, or otherwise any real or personal
property;
(b) borrow money for the Company from such Entities, including
banks, other lending institutions, Members, or Affiliates of any one
or more Members and on such terms as the Directors deem appropriate,
and in connection with such borrowing, to hypothecate, encumber and
grant security interests in any and all of the Property to secure
repayment of the borrowed sums;
(c) purchase liability and other insurance on behalf of the
Company;
(d) hold and own any property in the name of the Company;
(e) invest any Company funds (directly or by loans to any Entity
in the National Data Group or any Affiliate thereof) temporarily (by
way of example but not limitation) in time deposits, short-term
governmental obligations, commercial paper or other investments;
(f) transfer any or all of the property;
(g) execute or cause to be executed and delivered on behalf of
the Company all contracts in such form as the Directors may approve,
including, without limitation, checks, drafts, notes and other
negotiable instruments, mortgages, security agreements, financing
statements, documents providing for the acquisition or disposition
of property, assignments, bills of sale, leases, partnership
agreements, operating agreements, and any other instruments or
documents necessary or appropriate, in the opinion of the Directors,
to the business of the Company;
(h) employ accountants, legal counsel, consultants, agents and
other Entities to perform services for the Company and to compensate
them from Company funds;
(i) distribute funds to Members by way of cash, income, return of
capital, or otherwise, all in accordance with this Agreement;
(j) institute, prosecute, defend, settle, compromise, and dismiss
lawsuits and other judicial or administrative proceedings brought
on, in behalf of or against the Company, Directors or Members in
connection with activities arising out of, connected with, or
incidental to this Agreement, and to engage counsel or others in
connection therewith;
(k) do and perform all other acts necessary or appropriate to the
conduct of the Company's business;
(l) take, or refrain from taking, all actions, not expressly
proscribed or limited by this Agreement, necessary or appropriate to
accomplish the purposes of the Company;
(m) establish offices of the Company, such as but not limited to
president, vice president, secretary and treasurer, designate
persons ("Officers") to serve in
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such offices at the pleasure of the Board of Directors, and
delegate certain of the above-described authority to such officers
as provided in Section 11.11 below; and
(n) make any and all elections and decisions with respect to any
federal, state, local or foreign tax or the reporting thereof.
11.5 EXPENSES AND COMPENSATION OF BOARD OF DIRECTORS. All the
out-of-pocket expenses incurred by each of the Directors in connection with
their service on the Board of Directors and any compensation to Directors that
are not officers or employees of MasterCard or any Entity in the National Data
Group for service on such Board of Directors, as determined by a Majority in
Interest, shall be borne by the Company.
11.6 RESTRICTIONS ON AUTHORITY OF BOARD OF DIRECTORS.
(a) Without the consent of each Member and except as otherwise
expressly permitted herein, the Board of Directors may not:
(i) do any act in contravention of this Agreement;
(ii) possess property, or assign rights in specific
property, for other than a Company purpose; or
(iii) knowingly perform any act that would subject
any Member to liability for the obligations of the Company in
any jurisdiction.
(b) Without the consent of a Majority in Interest and MasterCard
(prior to the earlier of an IPO or MasterCard's no longer being a
Member), the Board of Directors may not:
(i) amend the Articles or this Agreement except to
admit new Members in accordance with this Agreement;
(ii) cause or permit the issuance or transfer of any
equity interest in the Company or any successor to a
Prohibited Transferee, or otherwise cause or permit a
Prohibited Transferee to become a Beneficial Owner of any
such equity interest;
(iii) amend Section 7.2(c) of the Parent Services
Agreement (relating to indemnification of the Company by
National Data with respect to the Parent Benefit Plans), the
NDCI Service Agreement or the Software License Agreement
(each as defined in the Purchase Agreement) or take any other
action (including without limitation canceling such
agreements) if the effect of such amendment or other action
would be to adversely affect the benefits and protections
afforded to the Company by Section 7.2(c) of the Parent
Services Agreement, the NDCI Service Agreement or the
Software License Agreement; or
(iv) cause or permit the Company to guarantee or
furnish any collateral for any obligation of any Member or
any Affiliate of any Member.
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(c) Without the consent of a Majority in Interest and except as
otherwise expressly permitted herein, the Board of Directors may
not:
(i) do any act which would (A) make it impossible
to carry on the ordinary Business of the Company or (B)
change the Business of the Company;
(ii) dissolve and liquidate the Company except in accordance with
Article 23;
(iii) merge the Company;
(iv) sell all or substantially all of the assets of the Company;
or
(v) admit new members to the Company and amend the
Articles and/or the Agreement to reflect such admissions.
11.7 VOTING RIGHTS OF MEMBERS. Except as provided in Section 11.6(a) of
this Agreement, the consent of a Majority in Interest is required to take any
action or give any Approval as Members including, but not limited to, any of
the actions listed in Section 14-11-308(b) of the Act. The Members expressly
agree that unanimous approval of Members is not required for the actions in
Section 14-11-308(b) of the Act.
11.8 AUTHORITY OF MEMBERS; MEETINGS; ACTION BY MEMBERS WITHOUT A MEETING.
Members shall have no authority to execute any instrument or bind the Company
in any way without the express Approval of a Majority in Interest. A meeting
of Members shall be called by the Directors whenever they deem necessary or by
any Member. Any such meeting shall be held at the principal place of business
of the Company, or at such other location as the Members may mutually agree,
and may be held in person or by telephonic conference call in which each
participant can speak to and hear each other participant. The Board of
Directors or the Member shall send each Member a written notice of each
meeting, stating the time, date, place and purpose of the meeting, not less
than five (5) days before the scheduled date of such meeting. Action required
or permitted to be taken at a meeting of Members may be taken without a
meeting if the action is evidenced by one or more written consents describing
the action taken, signed by a Majority in Interest or such other vote as may be
required pursuant to Section 11.6 and delivered to the Secretary or other
person designated by the Members for inclusion in the minutes or for filing
with the Company records. Any such consent shall be sent to each Member as
promptly as practicable. Action taken under this Section 11.8 is effective
when a Majority in Interest, or all Members, as the case may be, has signed the
consent, unless the consent specifies a different effective date. The record
date for determining Members entitled to take action without a meeting shall be
the date the first Member signs a written consent.
11.9 WAIVER OF NOTICE. When any notice is required to be given to any
Director or Member, a written waiver of notice signed by the Member or Director
entitled to such notice, whether before, at, or after the time stated in the
notice, shall be equivalent to the giving of such notice.
11.10 OFFICERS. The Board of Directors is hereby authorized by the
Members to appoint Officers by resolution to implement the decisions of the
Board of Directors, including, but not limited to, the administration of the
day-to-day business of the Company, and, subject to the terms of Section 11.7
hereof and the other provisions of this Agreement, the administration of the
ordinary and usual business affairs of the Company, except as expressly limited
by this Agreement,
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and the Officers so appointed shall be responsible for such
implementation. Except as expressly provided to the contrary in this
Agreement, and except as otherwise directed by the Board of Directors, the
Officers are authorized to make decisions relating to the day-to-day affairs of
the Company and to implement such decisions. In addition, the Board of
Directors is hereby authorized to delegate to the Officers such
responsibilities as deemed appropriate by Approval of the Board of Directors,
including, but not limited to, the right to execute and deliver instruments on
behalf of the Company.
11.11 REMOVAL OF OFFICERS. Any of the Officers may be removed by Approval
of the Board of Directors, by written notice of such removal given without any
prior notice or warning, for any reason whatsoever, and the Board of Directors
shall appoint such Officer's successor.
11.12 COMPENSATION FOR SERVICES. No Member or Affiliate of any Member
shall receive any compensation from the Company for its services as a Member of
the Company without having first obtained the Approval of the Board of
Directors for the payment of any such compensation by the Company.
Compensation of Officers shall be as Approved by the Board of Directors.
11.13 LIABILITY OF THE MEMBERS, OFFICERS AND DIRECTORS. As long as a
Member, an Officer or a Director, as applicable, shall act in good faith with
respect to the conduct of the business and affairs of the Company, no such
Member, Officer or Director shall be liable to the Company or to the Members,
in damages or otherwise, for any error of judgment, for any mistake of fact or
of law, or for any other act or thing which such Member, Officer or Director,
as applicable, may do or refrain from doing in connection with the business and
affairs of the Company, except in the case of gross negligence, willful
misconduct, fraud or bad faith.
11.14 INDEMNITY. The Company does hereby agree to indemnify and to hold
the Officers, the Directors, and the Members wholly harmless from any loss,
expense or damage suffered by any Officer, Director or Member by reason of
anything such Officer, Director or Member, as applicable, may do or refrain
from doing hereafter for and on behalf of the Company and in furtherance of its
interests to the extent authorized hereunder; provided, however, that the
Company shall not be required to indemnify any Officer, Director or Member for
any loss, expense or damage which such Officer, Director, or Member, as
applicable, might suffer as a result of such Officer's, Director's or Member's,
as applicable, gross negligence, willful misconduct, fraud or bad faith.
ARTICLE 12
RELATED PARTY TRANSACTIONS
Except as otherwise provided in this Article 12 and elsewhere in this
Agreement, any of the Members or their Affiliates may engage in transactions
with the Company in addition to those contemplated by this Agreement (an
"Affiliate Transaction"), provided, that each Member shall, in good faith,
cause the transaction with the Company to be on a commercial arm's length
basis, and the Board of Directors shall not permit or Approve any such
transaction, including but not limited to any transaction involving matters
affecting the working capital of the Company, unless it shall have determined
that the transaction satisfies the foregoing requirement and is in the best
interest of the Company and the Members, provided, however, that the foregoing
obligations shall not apply to MasterCard with respect to transactions not
involving MasterCard or any of its Affiliates. In determining whether a
particular transaction with the Company satisfies the criteria of this Article
12, all aspects of such transaction and all facts and circumstances surrounding
such
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transaction taken together (and if such transaction is one of a series of
related transactions, including pursuant to any pre-established contract or
arrangement, then all of such related transactions, and the terms of such
contract or arrangement) shall be taken into account. In the event that a
Member reasonably believes that any Member has entered into an Affiliate
Transaction with the Company that does not comply with the foregoing
provisions, such Member shall have the right to submit the question to
Arbitration as provided in Article 22. Notwithstanding anything to the
contrary contained in Section 11.8, MasterCard shall have the right to enforce
on behalf of the Company any and all agreements between the Company and any
Entity in the National Data Group (or any Affiliate thereof) including, without
limitation, the Purchase Agreement, the NDCI Service Agreement and the Software
License Agreement. The rights granted to MasterCard under this Article shall
cease to exist upon the first to occur of (a) an IPO or (b) MasterCard's having
less than the Minimum Equity.
ARTICLE 13
BANKING
The funds of the Company shall be kept in one or more separate bank
accounts in the name of the Company in such banks or other federally-insured
depositories as may bed by the Board of Directors, or shall otherwise be
invested in the name of the Company upon such terms and conditions as Approved
by the Board of Directors from time to time. All withdrawals from any such
bank accounts or investments established by the Company hereunder shall be made
on such signature or signatures as may from time to time be Approved by the
Board of Directors.
ARTICLE 14
ACCOUNTING; APPRAISAL
14.1 BOOKS OF ACCOUNt. GPS shall maintain for the Company true and
accurate books of account at such locations as may receive Approval of the
Board of Directors, and each Member shall at all times have access thereto.
14.2 METHOD OF ACCOUNTING. The Company's books of account shall be
maintained, and its income, gains, losses and deductions shall be determined
and accounted for in accordance with GAAP and using the methods Approved by the
Board of Directors.
14.3 FINANCIAL AND OPERATING STATEMENTS. Within seventy-five (75) days
after the close of each Fiscal Year, GPS, at the expense of the Company, shall
have a full audit and financial statements of the Company for such Fiscal Year
prepared and distributed to the Members. Such financial statements and audit
results shall be prepared by the Company and shall be true and correct, shall
be certified in the customary manner by a so-called "Big Six" firm of
independent certified public accountants as may be Approved by the Board of
Directors, shall be in accordance with the Board of Directors' requirements and
specifications therefor, and shall include an income and expense statement and
balance sheet which shall reflect the results of the operations of the Company
for such Fiscal Year, the financial condition of the Company, and all other
information customarily reflected in financial statements prepared in
accordance with generally-accepted accounting principles. Within forty-five
(45) days after the end of each quarter, the Company shall also have prepared
and delivered to each Member (a) a profit and loss statement and Company
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balance sheet, and a comparison to the income and expenses of the Company
through the previous calendar quarter, and (b) a cash flow statement, setting
out current quarter and year-to-date figures.
14.4 INCOME TAX RETURNS. Following the close of each Fiscal Year, the
Company shall have prepared and delivered to each Member, at the expense of the
Company, information with respect to the business transactions of the Company
for such Fiscal Year in sufficient detail to enable each Member to prepare such
Member's federal, state and local income tax returns in accordance with all
then applicable laws, rules and regulations. The Company shall also cause any
federal, state or local income tax returns to be prepared and submitted for
review and Approval of the Board of Directors prior to the due date thereof (as
the same may be extended), and following appropriate modifications and final
approval thereof shall cause the same to be properly filed. The Members
acknowledge and agree that the Company is a partnership for income tax
purposes, and that they shall file tax returns and otherwise conduct their
affairs in a manner consistent with such characterization.
14.5 TAX MATTERS PARTNER. GPS shall be the "Tax Matters Partner" for Code
purposes and shall notify the Members promptly of any tax audit or other tax
examination or determination of which it is notified materially affecting the
Company or the Members and shall provide any Member upon request copies of all
notices or communications with respect thereto. GPS specifically shall have
the power to (a) extend the statute of limitations or any period of limitations
with respect to the Company in any matter; (b) agree to any settlement of any
tax matter affecting the Company, (c) file any petition for judicial review, or
any other judicial proceeding with respect to the Company in any matter; or (d)
file any requests for administrative review or adjustment, or other
administrative relief, on behalf of the Company, in any matter.
ARTICLE 15
CONVERSION OF THE COMPANY
At any time on or after Closing, GPS may request a Conversion. Upon such
request, GPS and the Board of Directors shall prepare and GPS shall have the
right to require the Company and any of its Members to execute and deliver any
agreements, instruments or other documents reasonably required by GPS to
consummate the Conversion. The articles of incorporation, bylaws and
organizational minutes of the surviving corporation shall be Approved by GPS.
Each Member agrees that it will execute and deliver all such agreements,
instrument and documents as are required, in the reasonable judgment of GPS, to
be executed by such Member in order to consummate the Conversion, provided
those documents otherwise satisfy all the requirements of this Agreement.
Upon consummation of a Conversion, each Member will be entitled to receive
that number of shares of stock of the surviving corporation obtained by
multiplying the total number of shares of common stock to be issued by the
surviving corporation in connection with the Conversion by the Percentage
Ownership Interest held by such Member as of the date of Conversion. Such
Member's Percentage Ownership Interest may be changed immediately prior to the
Conversion pursuant to Article 20. In addition, the surviving corporation will
assume all of the outstanding debt and other liabilities of the Company. No
Member shall be subject to any obligations in any way permitting, restricting
or limiting its ability to participate fully in such Conversion. Except as the
provisions of this Agreement specifically state otherwise, all rights,
protections and benefits of the Members
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under this Agreement shall continue to be available to them in their capacity
as stockholders of the surviving corporation. Further, the articles of
incorporation and bylaws of the surviving corporation shall incorporate the
governance and other operating provisions of this Agreement and a shareholders'
agreement shall incorporate the various rights, protections and benefits
provided to a Member by this Agreement, including but not limited to the rights
provided for in Articles 20 and 21 hereof, except to the extent expressly
waived in writing by the Member or Members entitled to such right, protection
or benefit.
The Members acknowledge that a Conversion may be undertaken in connection
with other events, such as an IPO, an acquisition of another business or Entity
or the sale of equity in the surviving corporation to other persons and that
such Conversion shall be deemed completed immediately prior to any such event.
ARTICLE 16
ADMISSION OF ADDITIONAL MEMBERS
Subject to and except as otherwise provided in Article 18, no additional
Entity shall be admitted to the Company as a Member (whether as a result of
issuance of new Membership Interests or transfers of existing Membership
Interests) without the Approval of the Board of Directors and Approval of a
Majority in Interest. Any adjustment to the Membership Interests of the Member
that may occur as a result of the issuance of new Membership Interests when
admitting another Entity to the Company as a Member shall be shared by all
Members on a pro-rata basis according to such Member's Percentage Ownership
Interest.
ARTICLE 17
WITHDRAWALS
Each of the Members does hereby covenant and agree that such Member will
not withdraw or retire from the Company except as the result of a permitted
transfer of such Member's entire interest in the Company pursuant to Article
18, 20 or 21 hereof, and that such Member will otherwise carry out such
Member's duties and responsibilities hereunder until the Company is dissolved
and liquidated pursuant to Article 23 hereof.
ARTICLE 18
TRANSFER OF MEMBERS' INTERESTS;
ADMISSION OF ADDITIONAL MEMBERS
18.1 TRANSFERS OF MEMBERS' INTERESTS. Each of the Members hereby
covenants and agrees that such Member will not at any time sell, assign,
transfer, mortgage, pledge, encumber, hypothecate or otherwise dispose of all
or any part of such Member's interest (excluding, however, such Member's right
to distributions hereunder, if such Member otherwise retains its status as a
Member) in the Company to any Entity, other than pursuant to the following
provisions of this Section 18.1 or the applicable provisions of Article 20 or
21 hereof, without first having obtained the Approval of any such proposed
disposition from a Majority in Interest of the other Members
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(excluding Affiliates) and without having complied with all applicable federal
and state securities laws. Notwithstanding the foregoing, a Member other than
GPS may assign or otherwise transfer all or any part of such Member's
Membership Interest in the Company to an Affiliate of such Member or by
operation of law (any such transfer being deemed "Approved" for purposes of the
remaining provisions of this Section 18.1). Any transfer in excess of those
permitted under the preceding two sentences must be approved by a Majority in
Interest of the Members that are not Affiliates of the Member making the
transfer. Following a Conversion or an IPO, all of the foregoing restrictions
on transfer shall terminate. Any Member seeking to transfer solely the
economic portion of its Membership Interest (including a Member seeking to
transfer its Membership Interest under the applicable provisions of Article 21)
may do so without such approval and any transferee of such rights shall not be
considered a Member. In order to effectuate any assignment or transfer of a
Member's interest in the Company to any Entity which is Approved hereunder to
be admitted as a Member in the Company as permitted under this Section 18.1,
the retiring Member shall require any such assignee or transferee to accept in
writing all of the applicable terms of this Agreement and may require such
assignee or transferee to execute any other instruments and agreements and pay
any fees desired by the retiring Member. The remaining Member(s) agree(s), at
the retiring Member's request, to join with the retiring Member and any such
assignee or transferee in the execution of an amendment to this Agreement
admitting such assignee or transferee as a Member and, if only a portion of the
retiring Member's interest in the Company is being transferred, modifying such
terms hereof as are reasonably necessary to allocate, between the retiring
Member and such assignee or transferee, such of the retiring Member's rights
and obligations hereunder as the retiring Member wishes to allocate. The
foregoing procedure for effectuating transfers or assignments of the retiring
Member's interest in the Company and the substitution or admission as a Member
of the Company of such transferees or assignees shall apply to all such
transfers, substitutions and admissions, but shall have no effect after an IPO
or with respect to any stock of a corporation into which the Company may be
converted pursuant to Article 15. The foregoing restrictions have no
application to any new Membership Interests in the Company that are issued
pursuant to the terms of this Agreement except and to the extent this Article
is made to apply to such Membership Interests after they have been issued by
Approval of the Board of Directors and a Majority in Interest. The Members
agree that, until an IPO, no Membership Interest or a Member's right to
distributions under this Agreement will be transferred to a Prohibited
Transferee without the Approval of MasterCard provided MasterCard is then a
Member or to a competitor of the Company without the Approval of a Majority in
Interest. NDC agrees that, until an IPO, NDC shall not cause of permit any
Prohibited Transferee to Beneficially Own any equity or debt security of any
Entity which is controlled by NDC (but specifically excluding NDC itself), such
that as a result of such Beneficial Ownership such Prohibited Transferee would
Beneficially Own any Membership Interest, provided MasterCard is then a Member.
18.2 SECTION 754 ELECTION. In the event of a transfer of all or part of a
Member's interest in the Company, the Company shall elect, at the request of
any existing Member or any person being admitted as a Member, to adjust the
basis of the Company's assets pursuant to Section 754 of the Code or the
corresponding provision of subsequent law. In the case of a newly-admitted
Member, the election shall be filed by the Company as constituted prior to such
admission. The transferee of the Membership Interest shall pay all costs of
preparing and filing such election and for any increased accounting costs
thereafter attributable to such election.
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ARTICLE 19
DAMAGES
Any payment of a damage, loss, liability, tax or expense (including
without limitation reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any action, suit or proceeding)
(collectively referred to herein as "Damages") incurred or suffered by the
Company with respect to the National Data Group Contributed Assets, or the
MasterCard Contributed Assets or the MasterCard Purchased Assets arising out
of, or attributable to, any misrepresentation or breach of warranty, covenant
or agreement made or to be performed by either Member pursuant to the Purchase
Agreement shall not be treated as a transaction between a partner and a
partnership. Notwithstanding the foregoing, in the event any National Data
Member or MasterCard fails to pay for any Damages in accordance with its
obligations under the Purchase Agreement, the amount of such Damages may be
withheld from any amount otherwise distributable or payable to such Member
hereunder.
ARTICLE 20
PUT RIGHTS
20.1 PUT RIGHT. At any time after the Closing of the Purchase Agreement
and from time to time, but not sooner than the earlier of (a) four (4) years
after the date hereof, (b) a Change in Control of the Company, or (c) a knowing
or intentional Breach of this Agreement by any National Data Member (a "Put
Event") (and no later in the case of clause (a) than the earlier of six (6)
years after the date hereof or the completion of an IPO and no later in the
case of clause (c) than the completion of an IPO), MasterCard may put to the
Company ("Put Right") all or any portion of its Membership Interest in the
Company (the "Put Equity"). In addition, an IPO shall be a Put Event for up to
fifty percent (50%) of MasterCard's Membership Interest; and three (3) years
after the date hereof without an IPO having occurred (but ending this Put Event
with the earlier of an IPO or six (6) years after the date hereof) shall be a
Put Event for up to fifty percent (50%) of MasterCard's Membership Interest,
provided MasterCard must retain the Minimum Equity after the exercise of any
and all such Put Rights with respect to the Put Events in this sentence.
20.2 EXERCISE OF PUT RIGHT. MasterCard's Put Right shall be exercised
("Put") by providing the Company with notice (the "Put Notice") specifying (i)
the percentage of its Membership Interest to be put; (ii) the date on which the
Put Price (as hereinafter defined) is to be paid (the "Put Date"); and (iii)
the proposed Put Price. The Put Notice shall be given at least ninety (90)
days in advance of a Put Date. If the event is an IPO, the Put Price shall be
due at the initial closing pursuant to the IPO. MasterCard may not exercise
more than two (2) Puts during any twelve (12) month period.
20.3 DETERMINATION OF PUT PRICE. If a Put Event occurs, the value of
MasterCard's Membership Interest (the "Put Price") shall be determined as
follows:
(a) in the event of an IPO by the Company, or its successor after a
Conversion, that is a Put Event, the Put Price shall be the initial IPO
price per share, less Registration Expenses per share that would be
payable by MasterCard pursuant to the Registration Rights Agreement of
even date herewith if MasterCard were to sell its Put Equity in the IPO,
including, but not limited to, any underwriters' commissions or
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discounts, all as reflected on the cover page of the final prospectus of
the IPO, times the number of shares that MasterCard would have been
entitled to receive for the Put Equity in the Conversion; and
(b) in any other event, that is a Put Event, the Put Price shall be
approved by MasterCard and GPS, or failing such approval shall be
determined by an appraiser appointed by agreement between MasterCard and
GPS. If there is no agreement upon a single appraiser within thirty (30)
days after notice of the Put Event, the Put Price shall be determined by
the majority vote of a board of three (3) appraisers, GPS appointing one
(1) appraiser, MasterCard appointing one (1) appraiser and the two
appointed appraisers appointing the third appraiser. If either of the
two appraisers is not so appointed or if the two appraisers refuse or
fail to appoint the third appraiser within thirty (30) days after notice
of the Put Event, either MasterCard or GPS may request the American
Arbitration Association to make the appointments in default in accordance
with its rules then obtaining and the parties shall abide by any
appointment so made. The appraisers shall determine the value of the Put
Equity based on the fair market value of the Company on a stand alone
basis without regard to the rights of any controlling person multiplied
by the Percentage Ownership Interests in the Put Equity. The costs of
the appraisal shall be borne equally by MasterCard and the Company. The
Put Date shall be extended to such time after completion of the appraisal
as MasterCard may reasonably designate.
(c) MasterCard may withdraw a Put if the Put Price determined by the
appraisal is not satisfactory to MasterCard.
20.4 PAYMENT OF PUT PRICE. On the Put Date, upon delivery to the Company
of Certificates representing the Put Equity, which instrument shall contain a
full warranty of title, to the effect that MasterCard has good and marketable
title to the Put Equity free and clear of all claims and encumbrances (other
than the restrictions created by or provided for in this Agreement), and such
other instruments as the Company may reasonably request, the Company shall pay
to MasterCard or its designee the Put Price in cash for the Put Equity so
delivered. If the Put Event is an IPO, the Put Price (payable in cash) shall
be due at the initial closing pursuant to the IPO.
20.5 TERMINATION OF PUT . All Puts and Calls shall terminate at an IPO
except the Put Right provided with respect to the Put Event related to a Change
In Control, which shall terminate and be of no further force and effect at any
time that (a) MasterCard no longer has any equity interest in the Company or
its successor after a Conversion, (b) MasterCard's equity interest in the
Company or its successor after a Conversion is tradable in an established
market without restrictions pursuant to the federal securities laws, or (c) the
aggregate interest of the National Data members in the Company or its successor
after a Conversion becomes less than a Majority in Interest as a result of any
IPO. In addition after an IPO, but before the earlier of (i) MasterCard's
having the right to cause its equity interest in the Company or its successor
after a Conversion to be registered under the Registration Rights Agreement, or
(ii) MasterCard's equity interest in the Company or its successor after a
Conversion is tradable in an established market without restrictions pursuant
to the federal securities laws, if the Company or its successor after a
Conversion permits an employee or director of a Prohibited Transferee to become
a Director without the Approval of MasterCard, MasterCard will be entitled to
treat such permission as a Put Event with respect to its remaining equity
interest in the Company or its successors after a Conversion and to exercise
its Put Right in respect thereof, but any such Put Right must be exercised
within 90 days of such Put Right becoming known to MasterCard.
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ARTICLE 21
RIGHT TO COMPEL SALE; RIGHT TO PARTICIPATE IN SALE
21.1 OBLIGATION TO SELL. If the National Data Members, in the aggregate
and as part of a single transaction, should sell any of their Membership
Interests in a bona fide transaction to any Third Party, or if National Data,
in the aggregate and as part of a single transaction, should sell issue or
cause or permit to be issued any equity or debt securities of any Entity which
is controlled by NDC (but specifically excluding NDC itself and the Company),
such that, as a result of such sale(s) or issuance(s), the Third Party would,
together with such Third Party's Affiliates, Beneficially Own directly or
indirectly, more than 50% of the Membership Interests in the Company and on
terms such that no National Data Member retains any direct or indirect
beneficial interest in or option or right over the Membership Interest(s) being
disposed of other than as a bona fide creditor with a bona fide security
interest therein and that National Data does not retain any direct or indirect
beneficial interest in or option or right over the securities being sold or
issued other than as a bona fide creditor with a bona fide security interest
therein (a "Sale"), the National Data Members may, at their option, except as
set forth below in Section 21.3, require MasterCard to participate in such
Sale. National Data shall provide written notice of such Sale to MasterCard
("Sale Notice"). The Sale Notice shall identify the purchaser, the amount of
Membership Interest, the consideration for which a sale is proposed to be made
(the "Sale Price") and all other material terms and conditions of the Sale.
MasterCard shall be required, as set forth below, to tender a percentage of its
respective Percentage Ownership Interest equal to the percentage of the
aggregate Percentage Ownership Interests of all of the National Data Members
that the National Data Members intend to sell. MasterCard shall cooperate with
the representative of the National Data Members designated in the Sale Notice
and shall deliver all documents the representative may reasonably request that
may be required to be executed in connection with such Sale. A transfer under
this Article 21 is subject to the provisions of Section 18.1 and any transfer
made hereunder without the Approval therein required shall be a transfer solely
of the economic portion of such Membership Interest, and references in this
Article 21 to Membership Interest in such context shall be a reference solely
to such economic portion, the remaining rights of such Membership Interest
continuing to reside in the transferring Member.
21.2 RIGHT TO PARTICIPATE IN SALE. For purposes of this Section 21.2
(and the corresponding provisions of the remaining Sections of this Article
21), the requirement in the definition of "Sale" in Section 21.1 that the sale
or issuance of equity or debt securities in any Entity controlled by NDC be "as
a part of a single transaction" shall not apply prior to a Conversion. If the
National Data Members should participate in a Sale, National Data shall give
MasterCard a Sale Notice and MasterCard shall have the right and option,
exercisable as set forth below, to participate in such Sale pro rata in
accordance with its respective Membership Interests based on Percentage
Ownership Interests in the Company in the Sale, in which event the Membership
Interest(s) or the securities to be sold by the National Data Members or
National Data, as the case may be, in the Sale shall be reduced to the extent
MasterCard elects to participate and such reduction is required. Within
fifteen (15) business days after the date the Sale Notice is given, MasterCard
shall provide National Data with written irrevocable notice authorizing
National Data to sell or otherwise dispose of MasterCard's Membership Interest
pursuant to the terms of the Sale. Delivery of such notice authorizing
National Data to sell or otherwise dispose of such Membership Interests shall
constitute an irrevocable acceptance of the Sale on the terms set forth in the
Sale Notice. After delivery of such notice, MasterCard shall not be entitled to
participate in the sale of Membership Interests pursuant to the Sale if it does
not execute any
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agreements, certificates or other documents required to consummate the transfer
of the Membership Interests pursuant to this Section. If MasterCard shall have
elected not to participate in the Sale, (i) MasterCard will be deemed to have
waived any of and all of its rights under this Section 21.2 with respect to the
sale or other disposition of its Membership Interests pursuant to the Sale, and
(ii) the National Data Members or National Data, as the case may be, shall have
ninety (90) days from the date the Sale Notice is given in which to sell the
applicable Membership Interests or securities on terms no more favorable to the
National Data Members or National Data than those set forth in the Sale Notice,
and in no event at a price higher than that contained in the Sale Notice.
MasterCard's sole remedy for a Breach of this provision is to exercise its Put
Right pursuant to Section 20.1(c).
21.3 CONSIDERATION. The consideration to be paid to the National Data
Members or National Data, as the case may be, and MasterCard in a Sale shall be
their respective share of the Sale Price based upon their respective
percentages of the Membership Interests based on Percentage Ownership Interests
included in the Sale. In the event the consideration to be paid pursuant to
the Sale is (a) other than cash, debt or Marketable Securities or (b)
marketable securities of a Prohibited Transferee, unless MasterCard agrees to
participate in the Sale, the Company shall be obligated to pay MasterCard's
share of the Sale Price to MasterCard in cash. If MasterCard receives cash
hereunder, it shall be entitled to use the appraisal procedure with respect to
the consideration received by the National Data Members or National Data as set
out in Section 20.3(b) (except that the value shall be the fair market value of
the consideration received by the National Data Members and shall not be the
value of the Company) to determine its appropriate amount of cash. "Marketable
Securities" are securities traded on NASDAQ or a national securities exchange
or any comparable successor markets for public trading of securities if the
number of shares traded in such markets are sufficiently large to permit
MasterCard to dispose of its shares reasonably promptly after closing and any
holding period for pooling of interest accounting without materially adversely
affecting the market price for such shares. The provisions of this Section
21.3 are applicable to the consideration payable to MasterCard in any sale of
its Membership Interest in connection with any merger of the Company with, or
sale of all or substantially all of the assets or Membership Interests of the
Company to, another Entity, and none of the rights, protections, benefits or
obligations in this Agreement with respect to Members, including MasterCard and
the National Data Members, shall be applicable after a transaction referred to
in this sentence.
21.4 WITHDRAWAL FROM SALE. If, within one hundred twenty (120) days after
National Data gives the Sale Notice, the sale of all the Membership Interests
subject to the Sale has not been completed, any Member shall be entitled to
withdraw its Membership Interest from such Sale and National Data shall not be
permitted to require MasterCard to include its Membership Interest in any Sale
without again complying with the provisions of this Section. Notwithstanding
anything contained in this Article 21 to the contrary, there shall be no
liability on the part of the National Data Members or National Data to
MasterCard if the Sale of the Membership Interests or securities pursuant to
Section 21.1 or 21.2 is not consummated for whatever reason. Any decision as
to whether to sell Membership Interests shall be within the sole and absolute
discretion of National Data.
21.5 PARTICIPATION BY MASTERCARD. MasterCard shall have the right to
participate in the closing for the Sale and to inspect all documents executed
in connection therewith. Promptly after the consummation of the Sale of the
Membership Interests of the National Data Members and MasterCard pursuant to
this Article 21, the National Data Members shall remit or cause to be remitted
to MasterCard the total consideration for its Membership Interest sold pursuant
thereto as computed pursuant to this Article 21, and shall furnish such other
evidence of the completion and
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time of completion of such sale or other disposition and the terms thereof as
may be reasonably requested by MasterCard.
21.6 PRIORITIES AND TERMINATION. If at any time after notice of a Sale
has been given to MasterCard hereunder in good faith, the contemplated Sale
involves a pooling of interest accounting and a tax free transaction with
respect to the securities serving as consideration in the Sale, exercise of the
Put Right could cause the Sale not to qualify for such accounting and the Sale
is proceeding to completion in a diligent manner and in good faith, MasterCard
shall not be entitled to a Put, provided that this prohibition shall not extend
for longer than 90 days after receipt of such Sale notice plus such reasonable
time (not to exceed an additional 90 days) as may be necessary to get any
regulatory or stockholder approvals that are required for the Sale. In the
event MasterCard is prevented from exercising its Put Right because of a
proposed Sale during the period commencing on the fifth (5th) anniversary and
ending on the sixth (6th) anniversary hereof and the Sale does not occur, the
six year limit for exercising the Put Right shall be extended for the period
during which MasterCard was prevented from exercising the Put Right pursuant to
this section The provisions of this Article 21 shall terminate and have no
further force and effect upon an IPO.
ARTICLE 22
ARBITRATION
22.1 LOCATION AND GOVERNING RULES. Any dispute arising out of or in
connection with this Agreement, including any question regarding its existence,
validity or termination, shall be referred to and finally resolved by
arbitration in Washington, D.C. under the Rules of Commercial Arbitration (the
"Rules") of the American Arbitration Association (the "AAA"), which Rules are
deemed to be incorporated by reference into this Section 22.1. Judgment upon
the award rendered by the arbitrators in any such arbitration may be entered in
any court having jurisdiction thereof. Except as the arbitrators may otherwise
award or assess the expenses of any such arbitration and except as otherwise
provided in this Agreement, each party shall bear its own costs and expenses,
including the expense of its counsel. The parties agree that service of any
notice in the course of any such arbitration at their respective addresses for
notice and in the manner provided in Section 24.2 of this Agreement shall be
valid and sufficient notice for purposes of such arbitration.
22.2 SELECTION OF ARBITRATORS. In any arbitration pursuant to this
Article 22, the award shall be rendered by a majority of the members of a board
of arbitration consisting of three members. One arbitrator shall be appointed
by a party to the dispute and one arbitrator shall be appointed by the other
party to the dispute within sixty (60) days after the commencement of the
arbitration proceeding. The third arbitrator shall be appointed by mutual
agreement of the two selected arbitrators and shall be experienced in corporate
contractual matters relating to transactions of the nature contemplated by this
Agreement. In the event of the failure of said two arbitrators to agree as to
the third arbitrator within sixty (60) days after the appointment of the last
of the two arbitrators, the third arbitrator shall be appointed by the
Washington, D.C. office of the AAA in accordance with its then-existing rules.
Notwithstanding the foregoing, in the event that either party shall fail to
appoint the arbitrator it is required to appoint within the specified time
period, such arbitrator and the third arbitrator shall be appointed by the
Washington, D.C. office of the AAA in accordance with its then-existing rules.
For purposes of this Section 22.2, the commencement of the arbitration
proceeding shall be deemed to be the date upon which a written demand for
arbitration is received by the Washington, D.C. office of the AAA from one of
the parties.
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ARTICLE 23
DISSOLUTION AND LIQUIDATION OF THE COMPANY
23.1 DISSOLVING EVENTS. Subject to the right, if applicable, to elect to
continue the business of the Company pursuant to Section 23.5, the Company
shall be dissolved and liquidated in the manner hereinafter provided upon the
happening of any of the following events:
(a) the agreement of a Majority in Interest to dissolve the Company;
(b) the sale of all or substantially all of the Company's assets;
(c) the Bankruptcy of the Company;
(d) the occurrence of a Disabling Event with respect to a Member; or
(e) if not previously terminated, December 31, 2045.
23.2 METHOD OF LIQUIDATION. Upon the happening of any of the events
specified in Section 23.1 hereof which require the Company to be dissolved and
liquidated, the Company, unless otherwise required by the Act, shall apply and
distribute any Liquidation Proceeds in the following manner and in the
following order of priority:
(a) to the payment of the debts and liabilities of the Company (other
than the capital accounts of the Members) and to the expenses of
liquidation in the order of priority as provided by law; then
(b) to the establishment of any reserves deemed reasonably necessary
by Approval of the Board of Directors for the payment of any contingent or
unforeseen liabilities or obligations of the Company and, at the
expiration of such period as reasonably deemed advisable by Approval of
the Board of Directors , the balance of such reserves shall be applied and
distributed in the manner hereinafter provided in this Section 23.2; then
(c) to the Members in proportion to, and in payment of, the remaining
respective capital accounts of the Members as of the date of distribution,
as adjusted and computed pursuant to Article 9 and any other applicable
provisions hereof through the anticipated liquidation of the Company.
23.3 REASONABLE TIME FOR LIQUIDATING. A reasonable time shall be allowed
for the orderly liquidation of the Company's assets pursuant to Section 23.2
hereof in order to reduce the risk of losses which might be attendant upon such
a liquidation.
23.4 DATE OF LIQUIDATION. The Company shall be deemed liquidated and
wound up when all of its assets shall have been applied and distributed in
accordance with the provisions of Section 23.2 hereof. The establishment of
any reserves in accordance with the provisions of Section 23.2 hereof shall not
have the effect of extending the duration of the Company, but any such reserves
shall be distributed in the manner provided in Section 23.2 hereof upon
expiration of the period of such reserve.
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23.5 RIGHT TO CONTINUE BUSINESS. Upon an event of Dissolution, the
Members shall have the right pursuant to Section 14-11-602(4) of the Act to
continue the Company by written consent of a Majority in Interest.
ARTICLE 24
GENERAL PROVISIONS
24.1 WAIVER OF RIGHT OF PARTITION. Each of the Members does hereby agree
to and does hereby waive any right such Member may otherwise have to cause any
of the Company's assets to be partitioned among the Members or to file any
complaint or to institute any proceeding at law or in equity seeking to have
any such assets partitioned.
24.2 NOTICES. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be delivered (a) in person or by
courier, (b) mailed by first class registered or certified mail, or (c)
delivered by facsimile transmission, as follows:
(a) If to MasterCard:
MasterCard International Incorporated
2000 Purchase Street
Purchase, New York 10577-2509
Attn: William I Jacobs
Executive Vice President
Telephone: (914) 249-5200
Telecopier: (914) 249-5475
with a copy (which shall not constitute notice) to:
MasterCard International Incorporated
2000 Purchase Street
Purchase, New York 10577-2509
Attn: Robert E. Norton, Jr., Esq.
General Counsel
Telephone: (914) 249-5301
Telecopier: (914) 249-4262
with a copy (which shall not constitute notice) to:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attn: John A. Healy, Esq.
Telephone: (212) 878-8000
Telecopier: (212) 878-8375
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(b) If to any National Data Member:
National Data Corporation
National Data Plaza
Atlanta, Georgia 30329-2010
Attn: Mr. Robert A. Yellowlees
Chief Executive Officer
Telephone: (404) 728-2000
Telecopier: (404) 728-3509
with a copy (which shall not constitute notice) to:
National Data Corporation
National Data Plaza
Atlanta, Georgia 30329-2010
Attn: E. Michael Ingram, Esq.
General Counsel
Telephone: (404) 728-2504
Telecopier: (404) 728-2551
with a copy (which shall not constitute notice) to:
Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309
Attention: B. Harvey Hill, Jr., Esq.
Telephone: (404) 881-7446
Telecopier: (404) 881-7777
or to such other address as the parties hereto may designate in writing to the
other in accordance with this Section 24.2. Any party may change the address
to which notices are to be sent by giving written notice of such change of
address to the other parties in the manner above provided for giving notice.
If delivered personally or by courier, the date on which the notice, request,
instruction or document is delivered shall be the date on which such delivery
is made and if delivered by facsimile transmission or mail as aforesaid, the
date on which such notice, request, instruction or document is received shall
be the date of delivery.
24.3 MODIFICATIONS. No change or modification of this Agreement or the
Articles shall be valid or binding upon the Members, nor shall any waiver of
any term or condition hereof, unless such change, modification or waiver shall
be in writing and signed by all of the Members.
24.4 BINDING EFFECT. This Agreement shall inure to the benefit of and
shall be binding upon the Members, their legal representatives, permitted
transferees, heirs, successors and permitted assigns.
24.5 COUNTERPARTS. For the convenience of the Members, this Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original, and all of which, when taken together, shall constitute but one
and the same instrument.
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24.6 CONSTRUCTION. This Agreement shall be governed by, and interpreted
and construed in accordance with, the internal laws of the State of Georgia,
without reference to conflicts of laws or choice of laws provisions thereof.
The titles of the Articles and Sections herein have been inserted as a matter
of convenience of reference only and shall not control or affect the meaning or
construction of any of the terms or provisions herein.
24.7 EXHIBITS. Any and all exhibits which are referenced herein and
attached hereto are incorporated herein by this reference.
24.8 SECTIONS. References herein to specific sections shall be deemed to
refer to sections of this Agreement, unless otherwise provided.
24.9 TIME OF ESSENCE. Time is of the essence of this Agreement and each
and every provision hereof.
24.10 ADDITIONAL DOCUMENTS AND ACTS. In connection with this Agreement,
as well as all transactions contemplated by this Agreement, each Member agrees
to execute and deliver such additional acts as may be necessary or appropriate
to effectuate, carry out and perform all of the terms, provisions and
conditions of this Agreement, and all such transactions.
24.11 TERMS. Common nouns and pronouns shall be deemed to refer to the
masculine, feminine, neuter, singular, and plural, as the identity of the
person or persons, firm or corporation may in the context require. Any
reference to the Code or other statutes or laws shall include all amendments,
modifications, or replacements of the specific sections and provisions
concerned.
24.12 SEVERABILITY. If any provision of this Agreement or the application
thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provisions
to other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
24.13 COMPLETE AGREEMENT. This Agreement together with the Purchase
Agreement constitutes the complete and exclusive statement of the agreement
between the Members with respect to the operation of the Company. This
Agreement supersedes all prior written and oral statements and no
representation, statement, or condition or warranty not contained in this
Agreement shall be binding on the Members or have any force or effect
whatsoever. It is agreed that no Member has rendered any services to or on
behalf of either the other Members or the Company and that no Member shall have
any rights with respect to any services which might be alleged to have been
rendered.
24.14 LEGEND. Each certificate representing a Membership Interest shall
be endorsed with the following legend:
PURCHASERS OF MEMBERSHIP INTERESTS ("INTERESTS") IN GLOBAL PAYMENT
SYSTEMS LLC (THE "COMPANY") WILL BE REQUIRED TO BEAR THE RISK OF
THEIR INVESTMENTS FOR AN INDEFINITE PERIOD OF TIME. THE INTERESTS
HAVE NOT BEEN REGISTERED (I) UNDER ANY STATE SECURITIES LAW (THE
"STATE ACT"), OR (II) UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "FEDERAL ACT"), AND NEITHER
- 35 -
50
THE INTERESTS NOR ANY PART THEREOF MAY BE SOLD, EXCHANGED OR OTHERWISE
TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF ARTICLE
18 OF THE OPERATING AGREEMENT OF THE COMPANY, WHICH RESTRICT THE TRANSFER
OF INTERESTS, AND (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER EACH APPLICABLE STATE ACT OR IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER SUCH STATE ACT OR FOR WHICH SUCH REGISTRATION OTHERWISE
IS NOT REQUIRED, AND (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE FEDERAL ACT OR IN A TRANSACTION WHICH IS EXEMPT
FROM REGISTRATION UNDER THE FEDERAL ACT OR FOR WHICH SUCH
REGISTRATION OTHERWISE IS NOT REQUIRED.
THESE INTERESTS, IF CONSTITUTING SECURITIES UNDER APPLICABLE LAW,
HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF CODE
SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973, AND MAY NOT
BE SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT
UNDER SUCH ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH
ACT.
[Signatures on following page]
- 36 -
51
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to
be executed by its duly authorized signatory, effective as of the date first
set forth above.
MASTERCARD INTERNATIONAL
INCORPORATED
By:
-------------------------------
William I Jacobs
Executive Vice President
GPS HOLDING LIMITED PARTNERSHIP
By: National Data Corporation,
its General Partner
By:
-------------------------------
E. Michael Ingram
Senior Vice President
[signatures continued on the following page]
THIS IS THE FIRST SIGNATURE PAGE OF THAT CERTAIN OPERATING AGREEMENT OF GLOBAL
PAYMENT SYSTEMS LLC DATED AS OF MARCH 31, 1996
52
NDC INTERNATIONAL, LTD.
By:
-------------------------------
E. Michael Ingram
Secretary
NATIONAL DATA CORPORATION OF
CANADA, LTD.
By:
-------------------------------
E. Michael Ingram
Secretary
NATIONAL DATA PAYMENT SYSTEMS, INC.
By:
-------------------------------
E. Michael Ingram
Secretary
NATIONAL DATA CORPORATION
By:
-------------------------------
E. Michael Ingram
Senior Vice President
THIS IS THE SECOND SIGNATURE PAGE OF THAT CERTAIN OPERATING
AGREEMENT OF GLOBAL PAYMENT SYSTEMS LLC DATED AS OF MARCH 31, 1996
53
OPERATING AGREEMENT
EXHIBIT A
Pursuant to Section 8.1 of the Operating Agreement, the additional charges
for loans from any Entity in the National Data Group (or any Affiliate thereof)
shall be equal to the pro rata portion of out-of-pocket costs incurred by such
Entity (or such Affiliate) with respect to such loans including, without
limitation, the pro rata portion of any loan commitment, legal fees and
expenses and other fees.
54
EXHIBIT G
April 1, 1996
MasterCard International Incorporated
2000 Purchase Street
Purchase, New York 10577-2509
Ladies and Gentlemen:
I am general counsel to National Data Corporation, a Delaware corporation
("NDC"). In connection with and pursuant to Section 11.7 of the Asset Purchase
and Contribution Agreement, dated as of February 22, 1996, as amended (the
"Agreement"), by and among NDC, NDC International, Ltd., a Georgia corporation
("NDCI"), National Data Payment Systems, Inc., a New York corporation ("NDPS"),
National Data Corporation of Canada, Ltd., a Canadian corporation ("NDC
Canada," and together with NDCI and NDPS, the "Subsidiaries"), GPS Holding
Limited Partnership, a Georgia limited partnership ("Holding"), MasterCard
International Incorporated, a Delaware corporation ("MasterCard") Global
Payment Systems LLC, a Georgia limited liability company ("GPS") (formerly
named POS Acquisition Company LLC), and Global Payment Holding Company, a
Delaware corporation ("GPHC"), I have been requested by NDC to furnish you with
this opinion.
This opinion letter is limited by, and is in accordance with, the January
1, 1992 edition of the Interpretive Standards Applicable to Legal Opinions to
Third Parties in Corporate Transactions ("Interpretive Standards") adopted by
the Legal Opinion Committee of the Corporate and Banking Law Section of the
State Bar of Georgia, which Interpretive Standards are incorporated in this
opinion letter by this reference. A copy of the Interpretive Standards is
attached to this letter as Appendix 1. Capitalized terms used in this opinion
letter and not otherwise defined herein shall have the meanings assigned to
such terms in the Interpretive Standards or the Agreement.
In connection with this opinion letter I have reviewed or relied upon only
the following:
(i) a fully executed counterpart of the Agreement (including
Amendment No. 1 thereof dated April 1, 1996), the Operating
Agreement (the "Operating Agreement"), the Service Agreement
between NDCI and GPS (the "NDCI Service Agreement"), the Service
Agreements between NDC and GPS (the "NDC Service Agreements")
(collectively, the NDCI Service Agreement and the NDC Service
Agreements are hereinafter referred to as the "Service
Agreements"), the MasterCard Transition Services Agreement (the
"Transition Agreement"), the Registration Rights Agreement and the
Assignment and Assumption Agreement between GPS and MasterCard (the
"Assignment and Assumption Agreement") (the Operating Agreement,
the Service Agreements the Transition Agreement, the Registration
Rights Agreement and the Assignment and Assumption Agreement are
collectively referred to as the "Transaction Agreements");
55
MasterCard International Incorporated
April 1, 1996
Page 2
(ii) those certain Bills of Sale from NDC to GPHC, from NDC to
Holding, from Holding to GPS, from GPHC to Holding, from NDPS
to GPS and from NDC Canada to GPS, each of which is dated April 1,
1996 (collectively, the "Bills of Sale"), those certain Assignment
and Assumption Agreements by and between NDC and GPHC, by and
between GPHC and Holding, by and between NDC and Holding, by and
between Holding and GPS, by and between NDCI and GPS, and by and
between NDPS and GPS, each of which is dated April 1, 1996
(collectively, the "Assignment and Assumption Agreements" and
together with the Bills of Sale, the "Intercompany Transfer
Documents");
(iii) the factual representations made by NDC, the Subsidiaries,
Holding, GPHC and MasterCard in the Transaction Documents;
(iv) the Restated Certificate of Incorporation of NDPS, as
amended through the date hereof;
(v) the Certificate of Incorporation of NDC, as amended
through the date hereof;
(vi) the Restated Certificate of Incorporation of NDCI, as
amended through the date hereof;
(vii) the Certificate of Incorporation of GPHC dated March 27,
1996, as file stamped by the Secretary of State of Delaware;
(viii) the limited partnership agreement of Holding;
(ix) the Certificate of Limited Partnership of Holding dated
March 29, 1996 certified by the Secretary of State of Georgia;
(x) the Bylaws of NDC;
(xi) the Bylaws of NDCI;
(xii) the Bylaws of GPHC;
(xiii) a Certificate of Subsisting Corporation with respect to NDPS
dated March 27, 1996 certified by the Secretary of State of New
York;
(xiv) a Certificate of Existence with respect to NDCI dated April
1, 1996 certified by the Secretary of State of Georgia;
(xv) a Certificate of Good Standing with respect to NDC dated
March 14, 1996 certified by the Secretary of State of Delaware;
56
MasterCard International Incorporated
April 1, 1996
Page 3
(xvi) a review of the minutes and consent action of the Board of
Directors of NDC, NDCI, NDPS and GPHC; and
(xvii) a review of the minutes and consent action of the
Shareholders of NDPS and GPHC.
I have made no independent investigations with regard thereto and,
accordingly, do not express any view or belief as to matters that might have
been disclosed by independent verification.
The opinions set forth herein are limited to the laws of the States of
Georgia, the corporate laws of the State of Delaware and applicable federal
laws.
Based upon and subject to the foregoing, I am of the opinion that:
1. Each of NDC and GPHC is existing and in good standing under
the laws of the State of Delaware. NDCI is existing and in good
standing under the laws of the State of Georgia. NDPS is a
subsisting corporation under the laws of the State of New York.
Holding is a limited partnership existing and in good standing
under the laws of the State of Georgia.
2. Each of NDC, NDCI, GPHC and Holding has the power and
authority to execute and deliver the Transaction Agreements and the
Intercompany Transfer Documents, as applicable, and to perform its
respective obligations thereunder, and to own and use its
respective Assets, including its respective portion of the Parent
Contributed Assets.
3. Each of NDC, NDCI, GPHC and Holding has duly authorized the
execution and delivery of the Transaction Agreements and the
Intercompany Transfer Documents to which it is a party and all
performance by it thereunder and each of NDC, NDCI and Holding has
duly executed and delivered the Transaction Agreements and the
Intercompany Transfer Documents to which it is a party.
4. No consent, approval, authorization or other action by, or
filing with, any governmental authority pursuant to the laws of the
State of Georgia, federal laws or pursuant to the corporate laws of
the States of Delaware is required for the execution and delivery
of the Transaction Agreements and the Intercompany Transfer
Documents to which NDC, NDCI, GPS or Holding is a party or the
consummation of the transactions contemplated thereby.
5. Each of the Transaction Agreements and the Intercompany
Transfer Documents is enforceable against each of NDC, NDCI, GPHC
and Holding, as applicable.
57
MasterCard International Incorporated
April 1, 1996
Page 4
This opinion letter is provided to you for your exclusive use solely in
connection with the Transaction, and may not be relied upon by any other person
or for any other purpose without my prior written consent.
Very truly yours,
E. Michael Ingram
General Counsel
National Data Corporation
58
April 1, 1996
MasterCard International Incorporated
2000 Purchase Street
Purchase, New York 10577-2509
Ladies and Gentlemen:
We have served as legal counsel to National Data Corporation ("NDC") in
connection with the Asset Purchase and Contribution Agreement, dated as of
February 22, 1996, as amended (the "Agreement"), by and among NDC, NDC
International, Inc. ("NDCI"), National Data Payment Systems ("NDPS"), National
Data Corporation of Canada, Ltd. ("NDC Canada," and together with NDCI and
NDPS, the "Subsidiaries"), GPS Holding Limited Partnership ("Holding"),
MasterCard International Incorporated ("MasterCard") and Global Payment Systems
LLC (formerly named POS Acquisition Company LLC)(the "Company"). We have been
requested by NDC to furnish you with this opinion pursuant to Section 11.7 of
Agreement.
This opinion letter is limited by, and is in accordance with, the January
1, 1992 edition of the Interpretive Standards Applicable to Legal Opinions to
Third Parties in Corporate Transactions ("Interpretive Standards") adopted by
the Legal Opinion Committee of the Corporate and Banking Law Section of the
State Bar of Georgia, which Interpretive Standards are incorporated in this
opinion letter by this reference. A copy of the Interpretive Standards is
attached to this letter as Appendix 1. Capitalized terms used in this opinion
letter and not otherwise defined herein shall have the meanings assigned to
such terms in the Interpretive Standards or the Agreement.
In the capacity described above, we have considered such matters of law
and fact, including the examination of originals or copies, certified or
otherwise identified to our satisfaction, of such records and documents of NDC
and the Company, certificates of officers and representatives of NDC and the
Company, certificates of public officials and such other documents as we have
deemed appropriate as a basis for the opinions herein set forth. In such
consideration we have assumed the genuineness of all signatures on all original
documents, the conformity to the original documents of all copies submitted to
us, and (except where this opinion expressly addresses execution and delivery)
the due execution and delivery of all documents where due execution and
delivery are prerequisites to the effectiveness thereof.
As to questions of fact material to this opinion, we have relied as to
factual matters upon the representations and warranties contained in
certificates and statements of officers and representatives of NDC and certain
public officials and upon the accuracy and completeness of the representations
and warranties of the parties to the Agreement. We have made no independent
investigations with regard thereto and, accordingly, do not express any view or
belief as to matters that might have been disclosed by independent
verification.
The opinions set forth herein are limited to the laws of the State of
Georgia.
59
MasterCard International Incorporated
April 1, 1996
Page 2
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company was duly organized as a limited liability
company and is existing and in good standing under the laws of the
State of Georgia.
2. The Company has the power and authority to execute and
deliver the Agreement, the Parent Services Agreement, the
Registration Rights Agreement, the NDCI Service Agreement, the
Seller Transition Services Agreement, the Newco Subleases, the
Assignment and Assumption Agreement (all as such terms are defined
in the Agreement) and the Assignment and Assumption Agreement
(collectively, all such agreements are referred to as the
"Transaction Agreements"), and to perform its obligations
thereunder, and to own and use its assets.
3. The Company has duly authorized the execution and delivery
of the Transaction Agreements and all performance by the Company
thereunder and has duly executed and delivered the Transaction
Agreements.
4. No consent, approval, authorization or other action by, or
filing with, any governmental authority of the State of Georgia is
required for the Company's execution and delivery of the
Transaction Agreements and consummation of the transactions
contemplated thereby.
5. The Agreement, the Parent Services Agreement, the
Registration Rights Agreement, the NDCI Service Agreement, the
Seller Transition Services Agreement, the Assignment and Assumption
Agreement and the Newco Assignment and Assumption Agreement are
enforceable against the Company.
6. The Newco Subleases, solely to the extent governed by
Georgia law, if at all, are enforceable against the Company.
This opinion letter is provided to you for your exclusive use solely in
connection with the Transaction, and may not be relied upon by any other person
or for any other purpose without our prior written consent.
Very truly yours,
Alston & Bird
60
EXHIBIT J
NDC INTERNATIONAL
CONTRACTS REMAINING WITH NDC
# Customer Name Service
- --- ------------- -------
1 Arab Banking Corporation CMX Services
2 ABN AMRO Bank N.V. CMX Services
3 Allied Irish Bank CMX Services
4 Banco Di Roma CMX Services
5 Christiania Bank CMX Services
6 Christiania New York Branch CMX Services
7 Christiania Bank Singapore CMX Services
8 Dresdner Bank AG CMX Services
9 Fides Trust Company CMX Services
10 Girobank Plc CMX Services
11 lbstock Building Products Ltd CMX Services
12 Ing Bank CMX Services
13 Matheson Bank CMX Services
14 Unilever CMX Services
15 Lloyds Bank Plc CMX Services
16 Nordbanken CMX Services
17 National Westminster Bank CMX Services
18 Royal Bank of Canada CMX Services
19 The Royal Bank of Scotland CMX Services
20 Ulster Bank Limited CMX Services
61
EXHIBIT K
SOFTWARE LICENSE AGREEMENT
This SOFTWARE LICENSE AGREEMENT (this "Agreement") made this 31st day of
March,1996 (the "Effective Date"), by and between NDC International, Ltd., a
Georgia corporation with its principal offices located at
_____________________________________________________, (hereinafter referred to
as "Licensor"), and GLOBAL PAYMENT SYSTEMS LLC, a Georgia limited liability
company, with its principal offices located at 4 Corporate Square, Atlanta,
Georgia 30329-2010, (hereinafter referred to as "Licensee").
WHEREAS, Licensor has developed, or otherwise has rights to, the computer
software products and documentation described on Exhibit A, and desires to
license these products and documentation to Licensee, and
WHEREAS, Licensee desires to obtain the benefits of such a license, in
return for which Licensee is willing to abide by the obligations set forth in
this Agreement.
NOW THEN, for good and valuable consideration, including but not limited
to the license granted in accordance with this Agreement by Licensor to
Licensee, the parties hereto agree as follows:
SECTION 1: GRANT OF LICENSE
1.1 License Grant. Subject to the terms and conditions of this Agreement,
Licensor hereby grants and Licensee accepts: (1) a worldwide, fully paid,
transferable, exclusive license to install, use, execute, reproduce, modify,
display, perform, distribute (internally and externally) copies of, and prepare
derivative works based on, the computer program products, both in object and
source code (to the extent such source code exists as of the Effective Date),
described on Exhibit A, together with any related documentation (the
"Software"); and (2) the right to authorize others to do any of the former.
Exhibit A is attached hereto and incorporated herein by reference.
1.2 Limitations. In addition to those terms and conditions elsewhere in this
Agreement, Licensee's right and license to possess and use the Software is and
shall remain subject to the following limitations:
(i) Licensee shall take all reasonable precautions, which will be at least
equal to those precautions that Licensee takes to protect its own valuable
and proprietary information, to prevent persons who are not acting pursuant
to Licensee's authorization from obtaining access to or use of the Software.
(ii) Licensee shall not cause or knowingly allow violation of any of
Licensor's patents, copyrights, trademarks, trade secrets or other
proprietary rights related to the Software.
62
(iii) The Software may be subject to certain export restrictions. Licensee
will not cause or knowingly allow the Software to be exported, re-exported,
or imported to any country, except in compliance with all applicable laws,
including United States Export Administration Regulations.
(iv) Licensee agrees to pay any and all applicable taxes (including sales,
use and value-added taxes) arising out of this Agreement or the license and
delivery of the Software hereunder, except for income taxes payable by
Licensor arising out of the conduct of Licensor's business generally. Any
taxes payable by Licensee hereunder shall be paid directly by Licensee where
appropriate, or shall be reimbursed to Licensor on a timely basis after
receipt by Licensee of a tax statement or other explanation of the tax and
evidence of Licensor's payment of the same.
(v) Licensee acknowledges that certain of the Software may consist of
software licensed to Licensor by third parties (the "Third Party
Software"). Licensee agrees that its use of any Third Party Software, and
the rights granted in such Third Party Software to Licensee under this
Agreement, shall be subject to the terms and conditions of any applicable
license agreements that Licensor has with such third parties. Licensor
represents and warrants that Licensee has the rights to utilize such Third
Party Software.
SECTION 2: PROPRIETARY RIGHTS
2.1 Ownership. Licensee agrees that Licensor retains exclusive ownership of
the trademarks represented by its company name and logo and product names
including, but not limited to, the Software. Licensee also agrees that all
techniques, algorithms and processes contained in the Software or any
modification or extraction thereof constitute patents, copyrights or trade
secrets of Licensor and will be safeguarded by Licensee. In no event shall
Licensee exercise less than due diligence and care in accordance with the laws
of the country of purchase and international law, whichever operates to best
protect the interest of Licensor. Licensee agrees that the failure to protect
the Software will actually and materially damage Licensor. Licensee agrees
that in the event Licensee breaches this Agreement, Licensee will be liable for
damages as may be determined by a court of competent jurisdiction or shall be
subject to injunction. Licensee also agrees not to remove or modify any
Licensor trademarks, service marks, logos, proprietary notices or other product
identification incorporated within the Software.
2.2 Modifications. Any modifications made to the Software by Licensee,
including all intellectual property rights therein, shall be owned exclusively
by Licensee.
SECTION 3: TRANSFER OF RIGHTS
Either party may transfer its rights under this Agreement to any third
party (a "Transferee"), so long as the Transferee agrees in writing to be bound
by all of the provisions of this Agreement applicable to the transferring
party. Licensor shall not transfer any of its rights hereunder to a
non-affiliate without first providing Licensee with the opportunity to have
such
2
63
rights transferred to Licensee on the same terms and conditions as proposed
to be transferred to the non-affiliate.
SECTION 4: NO WARRANTY; LIMITATION OF LIABILITY; INDEMNITY
4.1 No Warranty. LICENSEE ACCEPTS THE SOFTWARE "AS IS" AND "WITH ALL FAULTS".
LICENSOR MAKES NO EXPRESS OR IMPLIED WARRANTY OF ANY KIND WITH REGARD TO THE
PERFORMANCE OF THE SOFTWARE OR ACCURACY OF THE RESULTS OBTAINED FROM THE
SOFTWARE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. LICENSOR DOES NOT INSURE
UNINTERRUPTED OPERATION OF THE SOFTWARE OR THAT THE SOFTWARE WILL MEET ANY
PARTICULAR REQUIREMENTS OF LICENSEE OR ANY OTHER PARTY. It is the sole
responsibility of the Licensee to evaluate whether the Software is appropriate
for its particular circumstances and to monitor continually the suitability of
the Software. SHOULD THE SOFTWARE PROVE DEFECTIVE, LICENSEE AND ITS
DISTRIBUTEES AND LICENSEES ASSUME THE COST OF ALL NECESSARY SERVICING, REPAIR
OR CORRECTION. LICENSOR REPRESENTS AND WARRANTS THAT THE SOFTWARE AS DELIVERED
TO LICENSEE UNDER THIS AGREEMENT WILL NOT INFRINGE ANY VALID AND EXISTING
INTELLECTUAL PROPERTY RIGHT OF ANY THIRD PARTY.
4.2 Limitation of Liability. UNDER NO CIRCUMSTANCES AND UNDER NO LEGAL THEORY,
TORT, CONTRACT, OR OTHERWISE, SHALL LICENSOR, OR ANY OTHER PERSON WHO HAS BEEN
INVOLVED IN THE CREATION, PRODUCTION, OR DELIVERY OF THE SOFTWARE, BE LIABLE TO
LICENSEE OR ANY OTHER PERSON FOR ANY GENERAL, DIRECT, INDIRECT, SPECIAL,
INCIDENTAL, CONSEQUENTIAL, OR OTHER DAMAGES OF ANY CHARACTER ARISING OUT OF
THIS AGREEMENT OR THE USE OR INABILITY TO USE THE SOFTWARE, INCLUDING BUT NOT
LIMITED TO PERSONAL INJURY, TANGIBLE OR INTANGIBLE PROPERTY DAMAGE, LOSS OF
PROFITS, LOSS OF DATA, OUTPUT FROM THE SOFTWARE OR DATA BEING RENDERED
INACCURATE, FAILURE OF THE SOFTWARE TO OPERATE WITH ANY OTHER PROGRAMS, DAMAGES
FOR LOSS OF GOODWILL, BUSINESS INTERRUPTION, COMPUTER FAILURE OR MALFUNCTION,
OR ANY AND ALL OTHER DAMAGES OR LOSSES OF WHATEVER NATURE, EVEN IF LICENSOR HAS
BEEN INFORMED OF THE POSSIBILITY OF SUCH DAMAGES.
4.3 Indemnity. Licensee shall defend, indemnify and hold harmless Licensor
from any claim, demand, liability, damage award, suit, judgment, or other legal
action (including reasonable attorneys' fees) arising out of Licensee's, or its
distributee's or licensee's, use, distribution, modification, or duplication of
the Software.
SECTION 5: TERM AND TERMINATION
3
64
5.1 Term. Unless otherwise terminated as provided herein, the initial term of
this Agreement is twenty (20) years, beginning on the Effective Date. The
Agreement shall be automatically renewed for successive five (5) year terms (up
to a total of ten (10) renewal terms) upon the termination of the initial term
or any renewal term.
5.2 Termination Rights. This Agreement may be terminated by Licensee
without cause upon thirty (30) days prior written notice to Licensor.
5.3 Effects of Termination. Upon any termination or expiration of this
Agreement, Licensee shall immediately and permanently cease all use of the
Software. Licensee shall remove all Software from its computers and shall
return all Software to Licensor (including all copies) within thirty (30) days
after any termination hereof, or provide a written statement certifying that
all Software in its possession or under its control (including all copies) has
been destroyed.
5.4 Remedies. Subject to the limitations upon liability and available remedies
set forth herein, each party shall be entitled to exercise all remedies
available at law or in equity for any breach of this Agreement.
5.5 Survival. Termination of this Agreement shall not affect the covenants and
obligations of the parties that, by their express terms, are intended to apply
upon or after termination, or any obligations that have accrued prior to the
date of termination.
5.6 Non-competition. Licensor agrees that for a period commencing on the date
hereof and ending upon termination of this Agreement, Licensor will not, either
directly or indirectly (including through any Affiliate other than through
Licensee), own, manage, control or operate or participate in the ownership,
management, operation or control of, any business whether in corporate
proprietorship or partnership form or otherwise, which is engaged in the
business of utilizing the Software to provide cash management or other
financial services.
5.7 Injunctive Relief. It is understood and agreed that, notwithstanding any
other provisions of this Agreement, Licensor has the unequivocal right to
obtain timely injunctive relief to protect the property rights of Licensor,
damages being an insufficient remedy of Licensor under such circumstances.
Licensee shall also have the unequivocal right to obtain timely injunctive
relief to protect its rights under Section 5.6, damages being an insufficient
remedy of Licensee under such circumstances.
SECTION 6: MISCELLANEOUS
6.1 Governing Law. This Agreement shall be interpreted in accordance with the
laws of the State of Georgia, without reference to conflict of laws principles
and without regard to the United Nations 1980 Convention on Contracts for the
International Sale of Goods and any amendments thereto. To the extent any part
of this Agreement is invalidated by court or legislative action of competent
jurisdiction, the remainder of this Agreement shall nevertheless remain binding
and enforceable.
4
65
6.2 Merger. This Agreement is the complete and exclusive statement of the
agreement between the parties, which supersedes all proposals, oral or written,
and all other communications between the parties relating to the subject matter
of this Agreement.
6.3 Amendments. This Agreement may be amended only in writing and by mutual
consent of the parties hereto.
6.4 Waiver. The failure of either party to strictly enforce any rights set
forth in this Agreement, or granted at law or in equity, shall in no way be
construed to be a waiver of such right.
6.5 Notices. All notices required by or relating to this Agreement shall be in
writing and shall be sent to the parties to this Agreement at their addresses
set forth on the first page hereof, or to such other address as either party
may substitute by written notice to the other.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterpart originals as of the Effective Date by their respective
duly authorized representatives.
LICENSOR:
NDC INTERNATIONAL, LTD.
By:
----------------------------------------
Title:
-------------------------------------
Date:
-------------------------------------
LICENSEE:
GLOBAL PAYMENT SYSTEMS LLC
By: GPS Holding Limited Partnership, a
Member
By: National Data Corporation, its General
Partner
By:
--------------------------------------
E. Michael Ingram
Senior Vice President
5
66
EXHIBIT A
TO SOFTWARE LICENSE
Software Description:
1. That software commonly known as "PC NETS" which is a microcomputer based
program that performs functions such as corporate cash management, financial
information transfers and electronic data interchange.
67
EXHIBIT L
S U B L E A S E A G R E E M E N T
THIS SUBLEASE AGREEMENT ("Sublease") is made this _____ day of _______,
1996 between NDC International Ltd. ("Sublandlord"), and Global Payment Systems
LLC, a Georgia limited liability company ("Subtenant").
R E C I T A L S:
WHEREAS, Commission for the New Towns as Landlord ("Prime Landlord") and
Sublandlord, as Tenant did enter into a certain Lease (together with any
certain amendments or modifications thereof, the "Prime Lease"), dated
_________, for the lease by Sublandlord of certain space (the "Sublandlord's
Premises") more particularly described in the Prime Lease and located in Prime
Landlord's building (the "Building") known as Peterscourt Building, Peterscourt
City Road, Peterborough, Cambridgeshire, England. Sublandlord and Subtenant
desire to enter into this Sublease, pursuant to which Subtenant will lease from
Sublandlord, and Sublandlord will lease to Subtenant, a portion of
Sublandlord's Premises.
NOW THEREFORE, for and in consideration of the mutual covenants and
obligations:
1. SUBLEASED PREMISES. Sublandlord does hereby lease to Subtenant, and
Subtenant leases and rents from Sublandlord, up to 90% of the Sublandlord's
Premises (the "Subleased Premises"). The Subleased Premises are being leased
by Sublandlord to Subtenant in their condition existing on the date hereof "AS
IS", and Sublandlord shall not be obligated to construct any demising walls or
make any improvements whatsoever with regard to the Subleased Premises.
Subtenant shall be obligated to construct any demising walls necessary on the
Subleased Premises at its own expense and cost.
This Sublease shall also include all of the furniture, fixtures, equipment
and improvements thereon located on the Subleased Premises owned by
Sublandlord.
2. TERM. The term of this Sublease shall commence on the date first above
written (the "Commencement Date") and shall end at the expiration of the term
of the Prime Lease. Subtenant may cancel this Sublease at any time upon ninety
(90) days' notice to Sublandlord.
3. RENT. Subtenant shall pay to Sublandlord a monthly base rent (the
"Base Rent") equal to Subtenant's Share of rent, additional rent and other
obligations of Sublandlord payable to the Prime Landlord under the Prime Lease,
with respect to each month during the term of this Sublease, prorating such
obligations as may be required to the term of this Sublease, and adjusting such
amounts, from time-to-time as they may be adjusted between Prime Landlord and
Sublandlord under the Prime lease, all without offset, deduction or abatement,
except as otherwise expressly provided for herein. The Base Rent shall be
payable by Subtenant to Sublandlord in advance on or before the first
68
day of each calendar month during the term of this Sublease with appropriate
prorations for partial months. The Base Rent, together with any and all other
amounts from time to time due under this Sublease from Subtenant to
Sublandlord, is hereinafter referred to collectively as the "Rent".
If Subtenant fails to pay any installment of the Rent, within five (5)
business days following Subtenant's receipt of notice of Sublandlord's
non-receipt of such payment to help defray the additional cost to Sublandlord
for processing such late payments, Subtenant shall pay, upon receipt of a
written notice from Sublandlord, to Sublandlord, a late charge of four percent
(4%) of such amount plus interest from and after the due date of such rent
computed at a rate of eighteen percent (18%) per annum for the number of days
from the due date until the unpaid amount plus the late charge has been paid in
full.
4. RELATIONSHIP TO PRIME LEASE. This Sublease and Subtenant's rights
hereunder are expressly subject to and subordinate to the Prime Lease.
Subtenant shall not allow any action or omission of Subtenant, its employees,
agents, contractors or affiliates, to place Sublandlord in default or at
risk of being declared in default under the Prime Lease. Sublandlord shall not
allow any action or omission of Sublandlord, its employees, agents, contractors
or affiliates to place either Sublandlord or Subtenant in default under the
Prime Lease.
5. USE. The Subleased Premises shall be used and occupied by Subtenant as
office space for the purpose of conducting computer data operations and for
related uses specifically permitted under the Prime Lease and for no other
purposes. Subtenant will not occupy or use, nor permit to be occupied or used,
any portion of the Subleased Premises for any business or purpose which is
unlawful in part or in whole or deemed to be disreputable in any manner, or
extra hazardous on account of fire, nor permit anything to be done which is not
in compliance with the foregoing and which will increase the rate of fire
insurance on the Sublandlord's Premises or the Building, and if, by reasons of
acts of Subtenant inconsistent with the foregoing, there shall be any increase
in the rate of insurance on the Sublandlord's Premises or the Building or its
contents created by Subtenant's acts or conduct of business, Subtenant shall
pay the amount of such increase on demand.
6. REQUIREMENTS OF LAW. Subtenant at its sole expense shall comply with
all laws, orders and regulations of federal, state, county and municipal
authorities and with any direction of any public officer or officers, pursuant
to law. Notwithstanding the foregoing, Subtenant shall not be required to
comply with any applicable law if such compliance would necessitate
improvements or changes being made to the Subleased Premises and such
improvements or changes are required to be made by all other tenants of the
Building, provided the cause for such improvements or changes is not related to
Subtenant's specific manner and use of the Subleased Premises, in such case,
Sublandlord shall make such improvements and changes to the Subleased Premises
or use Sublandlord's reasonable efforts to cause the Prime Landlord to do so,
provided that Subtenant shall have no obligation to pay rent at any time that
the Subleased Premises
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become substantially unusable for Subtenant's normal operations as a result of
such lack of compliance unless caused by Subtenant.
7. SERVICES AND REPAIRS. (a) Under the Prime Lease, Prime Landlord has
agreed to furnish certain services to Sublandlord's Premises. The times and
days on which such services shall be provided are set forth in such Prime Lease
and any attachment thereto. Sublandlord shall use reasonable efforts not to
block the provisions of such services to Subtenant and to cause Prime Landlord
to provide those services which Prime Landlord provides to Sublandlord, but
failure to any extent to furnish or any stoppage of these defined services,
resulting from causes beyond control of Sublandlord or from any cause not the
fault of Sublandlord, shall not render Sublandlord liable in any respect for
damages to person, property or business, nor be construed as an eviction of
Subtenant or work an abatement of rent, nor relieve Subtenant from fulfillment
of any covenant or agreement hereof except payment of Rent if the Subleased
Premises become substantially unusable for Subtenant's normal business
operations as a result of such lack of service and as a result thereof
Sublandlord is relieved of its obligation to pay Rent under the Prime Lease.
Notwithstanding anything to the contrary herein, Subtenant shall be entitled to
a pro rata share of any rent abatement received by Sublandlord from Prime
Landlord in accordance with Paragraph 5(a) of the Prime Lease. Subtenant shall
pay to Sublandlord within twenty (20) days such charges as Sublandlord may
reasonably prescribe based on a reasonable portion of Prime Landlord's charges
and Sublandlord's costs for any electric service requested by Subtenant and
supplied by Sublandlord or Prime Landlord, for heat or air conditioning service
for times other than as set forth in the Prime Lease or for computers and other
electrical equipment or other electric service deemed by Prime Landlord not to
be standard.
(b) Under Paragraph 5.3.1 of the Prime Lease, Prime Landlord has agreed to
keep and maintain in good condition the Common Parts, Retained Parts,
Structure, Service Installations and roofs of the Building adequately renewed,
repaired, maintained, heated, cleaned and lighted. Sublandlord shall use
reasonable efforts to cause Prime Landlord to provide above defined services to
Subtenant. Provided Sublandlord has used reasonable efforts to cause Prime
Landlord to provide such services, Sublandlord shall have no responsibility for
the foregoing obligations of Prime Landlord and shall have no liability if such
services have not been provided, but Subtenant shall have no obligation to pay
Rent at any time that the Subleased Premises become substantially unusable for
Subtenant's normal business operations as a result of such lack of repair
provided that during such period Sublandlord is relieved of its obligation to
pay Rent under the Prime Lease.
8. SUBTENANT'S REPAIRS AND ALTERATIONS. (a) Subtenant shall not in any
manner deface, damage or injure the Subleased Premises or the Building, and
shall pay the cost of repairing any damage or injury done to the Subleased
Premises or the Building or any part thereof by Subtenant or Subtenant's
agents, employees, contractors, customers or invited guests. Subtenant shall
during the term of this Sublease take good care of the Subleased Premises and
keep them free from waste of any kind. Subtenant shall keep the Subleased
Premises in good condition and make all necessary repairs,
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subject to Sublandlord's and Prime Landlord's obligations under Paragraph 7(b)
hereof. At the expiration or earlier termination of this Sublease, Subtenant
shall deliver to Sublandlord the Subleased Premises with all improvements
thereon in good repair and condition, reasonable wear and tear, casualty and
condemnation excepted. Subtenant shall not make or allow to be made any
alterations, additions or improvements in or to the Subleased Premises without
the prior written consent of Sublandlord which consent unless the consent of
the Prime Landlord is required, as hereinafter contemplated, shall not be
unreasonably withheld, conditioned or delayed if the aggregate cost of
restoration of all changes and alterations to be made by such tenant under this
Sublease shall not exceed $50,000.00 or if the aggregate cost of restoration
shall exceed such amount, such consent shall not be unreasonably withheld,
conditioned or delayed other than the agreement of Subtenant to pay such excess
amount of restoration cost may be imposed as a condition to such approval. Any
such work shall be done at Subtenant's sole expense and without the creation of
mechanics' or materialmen's liens. If such alterations, additions or
improvements would require Prime Landlord's written consent prior to their
performance by Sublandlord under the Prime Lease, then Sublandlord may at its
sole discretion withhold its consent to Subtenant's performance of such
alterations, additions or improvements, until receipt of Prime Landlord's
written consent, provided, however that Sublandlord shall use reasonable and
timely efforts to obtain Prime Landlord's written consent for such alterations,
additions or improvements. Notwithstanding the foregoing, for structural
alterations, additions, or improvements, Sublandlord shall respond promptly to
Subtenant's request and may attach reasonable conditions to its consent
(including, but not limited to, removal of the alteration, addition or
improvement and restoration to its original state at termination or expiration
of the Sublease). If a lien is placed against the Sublandlord's Premises or
the Building by reason of action by Subtenant, Subtenant shall post a proper
bond in or deposit with a title company or other escrow agent, an amount
sufficient to cover all amounts due under said lien within twenty (20) days.
At the termination or expiration of this Sublease, unless Subtenant is to
remove structural alterations, additions or improvements erected by Subtenant
and restore the Subleased Premises to their original condition as a prior
condition to Sublandlord's consent above, such alterations, additions and
improvements shall be delivered to Sublandlord with the Subleased Premises.
All furniture and moveable trade fixtures installed by Subtenant may be removed
by Subtenant at the termination of this Sublease if Subtenant so elects, and
shall be removed if Sublandlord or Prime Landlord so elects. All such removals
and restoration shall be accomplished in a good workerlike manner so as not to
damage the Building.
9. ASSIGNMENT AND SUBLETTING. Subtenant may not assign this Sublease, nor
allow same to be assigned by operation of law or otherwise, nor sublet the
Subleased Premises or any part thereof without the prior written consent of
Sublandlord which consent shall not be unreasonably withheld, and without the
prior written consent of Prime Landlord. Sublandlord will not unreasonably
withhold, delay or condition its consent to such subletting provided that
Subtenant has given Sublandlord not less than twenty (20) days' notice of such
subletting, during which time Sublandlord may elect, by notice to Subtenant to
cancel this Sublease with respect to the space proposed to be
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sublet, and in such event, the Rent shall thereafter be adjusted based on the
portion of the Subleased Premises then remaining.
10. MAINTENANCE. Subtenant, at its sole expense, shall maintain the
Subleased Premises in a clean and healthful condition, and subject to Paragraph
6 comply with all laws, ordinances, orders, rules, and regulations (state,
federal, municipal, and other agencies or bodies having any jurisdiction
thereof) with reference to use, condition, or occupancy of the Subleased
Premises. Sublandlord shall maintain those portions of Sublandlord's Premises
outside the Subleased Premises in a clean and healthful condition and subject
to Paragraph 6 comply with all laws, ordinances, orders, rules and regulations
(state, federal, municipal, and other agencies or bodies have jurisdiction
thereof) with reference to use, condition, or occupancy of said portions of the
Sublandlord's Premises and the Building in accordance with the Prime Lease.
11. INDEMNITY. Neither party shall be liable for, and the other party
will indemnify and save harmless said party from, any and all fines, suits,
claims, costs, expenses, demands, and actions of any kind (including reasonable
attorney's fees) by reason of any negligence, misconduct, or any breach,
violation, or non-performance of any covenant hereof on the part of the other
party or its agents, employees, and/or invitees. Neither party shall be liable
or responsible for any loss or damage to any property or person occasioned by
theft, fire, act of God, public enemy, injunction, riot, strike, insurrection,
war, court order, requisition or order of governmental body or authority or
other matter beyond such party's reasonable control, or for any damage or
inconvenience which may arise through repair or alteration of any part of the
Building, or failure to make repairs, or from any cause whatever except such
party's negligent act or omission, or willful misconduct or intentional breach
of this Sublease. This Paragraph shall not preclude one party from seeking
reimbursement from the other for work or monies expended which is the
responsibility of the other party. This Paragraph shall survive termination or
expiration of this Sublease.
12. RULES AND REGULATIONS. Subtenant and Subtenant's agents, employees,
and invitees, shall comply fully with all requirements of the Rules and
Regulations ("Rules and Regulations") of the Building, if any. Subtenant
acknowledges that if pursuant to the Prime Lease, Prime Landlord may change
such Rules and Regulations or amend them from time to time, then upon receipt
thereof, Sublandlord shall deliver copies of all changes, and amendments
thereto, to Subtenant, and Subtenant shall comply therewith.
13. INSPECTION. Sublandlord and Prime Landlord, or their officers,
agents, and representatives, may enter into and upon any and all parts of the
Subleased Premises upon one (1) day's notice at all reasonable hours to inspect
same or clean or make repairs or alterations or additions as Sublandlord shall
reasonably deem necessary or as Prime Landlord may be entitled to under the
Prime Lease, except that in cases of emergency the right to enter shall not be
subject to any notice or time restrictions.
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14. CONDUCT OF BUSINESS. Subtenant shall conduct its business, and
control its agents, employees, contractors, customers and invited guests in
such a manner as not to unreasonably interfere with, annoy or disturb other
tenants or Sublandlord or Prime Landlord in the management of the Building.
Sublandlord will conduct its business, and control its agents, employees,
contractors, customers and invited guests in such a manner as not to
unreasonably interfere with, annoy or disturb Subtenant's normal business
activities.
15. CONDEMNATION. If the Subleased Premises shall be taken or condemned
in whole or substantial part for public purposes, this Sublease shall
terminate.
In the event of a partial condemnation, either Sublandlord or Subtenant
may elect, in its sole discretion, by notice to the other to terminate this
Sublease provided that if this Sublease shall not terminate, there shall be an
abatement of the Rent, on a square footage basis, to the extent and degree that
the Subleased Premises may no longer be utilized by Subtenant as a result of
the condemnation.
If any part of the Subleased Premises shall be so taken and this Sublease
shall not be terminated under the provisions of this Paragraph, then
Sublandlord shall use reasonable efforts to cause Prime Landlord to perform
restoration, at Prime Landlord's own cost and expense, of the remaining portion
of the Subleased Premises to the extent necessary to render it reasonably
suitable for the purposes for which it was leased. Sublandlord shall have no
responsibility to perform such restoration or liability in connection thereto
but, to the extent that Sublandlord is relieved of its obligation to pay rent
pursuant to the Prime Lease, Subtenant shall have no obligation to pay Rent at
any time the Subleased Premises become substantially unusable for Subtenant's
normal business operations as a result of such condemnation.
16. FIRE & OTHER CASUALTY. If the Building should be totally or partially
destroyed by fire, tornado or other casualty, either Sublandlord or Subtenant
may, in its sole discretion, terminate this Sublease by notice to the other,
given within ninety (90) days of such casualty or, if Prime Landlord terminates
the Prime Lease pursuant thereto, this Sublease shall terminate. If this
Sublease is not so terminated, Subtenant acknowledges that Prime Landlord is
required under the Prime Lease to rebuild and repair Sublandlord's Premises.
Sublandlord shall have no responsibility for such rebuilding and repair but, to
the extent that Sublandlord is relieved of its obligation to pay rent pursuant
to the Prime Lease, Subtenant shall have no obligation to pay Rent at any time
the Subleased Premises become substantially unusable for Subtenant's normal
business operations as a result of such casualty.
Sublandlord and Subtenant shall each look first to any insurance in its
favor before making any claim against the other party for recovery for loss or
damage resulting from fire or other casualty and to the extent that such
insurance is in force and collectible and to the extent permitted by law.
Sublandlord and Subtenant each hereby releases and waives all right of recovery
against the other or any one claiming through or under each of them by way of
subrogation or otherwise. The foregoing release and waiver shall be in force
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only if both releasors' insurance policies contain a clause providing that such
a release or waiver shall not invalidate such insurance. If such coverage is
available for a reasonable additional premium each party shall pay such
additional premium under its policy. Subtenant acknowledges that Sublandlord
will not carry insurance on Subtenant's furniture and/or furnishings or any
fixtures or equipment improvements or appurtenances removable by Subtenant and
agrees that Sublandlord will not be obligated to repair any damage or replace
the same. Throughout the term of this Sublease, Sublandlord shall carry
insurance on the leasehold improvements within the Subleased Premises to the
extent of the coverage as of the date of this Sublease.
Subtenant shall carry and maintain (a) public liability insurance in the
amount of at least $1,000,000 and (b) property damage insurance in the amount
of at least $500,000.
17. HOLDING OVER. Should Subtenant, or any of its successors in interest,
hold over the Subleased Premises, or any part thereof, after the expiration of
the term of this Sublease or after the termination of this Sublease by
Sublandlord as a result of a default by Subtenant, unless otherwise agreed in
writing, such holding over shall constitute and be construed as a tenancy at
will only, at 150% of the Base Rent paid for the last month of the term of this
Sublease for that portion of the Subleased Premises held over. If the holding
over continues for more than 180 days after notice given by Sublandlord to
Subtenant to vacate such space held over, the Base Rent shall be two (2) times
the above described Base Rent paid for that portion of the Subleased Premises
held over. The inclusion of the preceding sentence shall not be construed as
Sublandlord's consent for Subtenant to hold over, nor require any notice from
Sublandlord to terminate Subtenant's tenancy, except as specifically provided
for herein, it being agreed that unless otherwise specifically agreed,
Sublandlord shall be entitled to immediate possession of the Subleased Premises
upon any termination of this Sublease. Furthermore, in the event that such
holding over shall result in additional obligations or liability on the part of
Sublandlord to Prime Landlord, then Subtenant shall be responsible for such
additional obligations or liability and shall promptly satisfy such obligations
or liability on behalf of Sublandlord.
18. TAXES ON SUBTENANT'S PROPERTY. Subtenant shall be liable for all
taxes levied or assessed against personal property, furniture or fixtures of
Subtenant situated in the Subleased Premises. If any such taxes for which
Subtenant is liable are levied or assessed against Sublandlord or Prime
Landlord or Sublandlord's or Prime Landlord's property and if Sublandlord or
Prime Landlord elects to pay the same or if the assessed value of Sublandlord's
or Prime Landlord's property is increased by inclusion of personal property,
furniture or fixtures placed by Subtenant in the Subleased Premises, and
Sublandlord or Prime Landlord elects to pay the taxes based an such increase,
Subtenant shall pay to Sublandlord or Prime Landlord, as applicable, within
fifteen (15) days after written notice that part of such taxes for which
Subtenant is primarily liable hereunder.
19. EVENTS OF DEFAULT. The occurrence of any one or more of the following
shall be deemed events of default by Subtenant under this Sublease.
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(a) Subtenant shall fail to pay any installment of the Base Rent or
additional rent hereby reserved or late charge and such failure shall continue
for ten (10) days after notice by Sublandlord of its non-receipt of such Rent.
(b) Subtenant shall fail to comply with any material term, provision, or
covenant of this Sublease, other than the payment of the Rent, and shall not
have cured such failure within twenty (20) days or such further period if it is
of such a nature that it cannot be reasonably cured within such twenty (20) day
period after written notice thereof to Subtenant.
(c) Subtenant shall make a statutory and/or common law assignment for the
benefit of creditors.
(d) Subtenant shall file a petition under any section or chapter of the
Bankruptcy Code, as amended, or under any similar liquidation, reorganization,
insolvency, dissolution or arrangement law or statute of the United States or
any State thereof; or Subtenant shall be adjudged bankrupt or insolvent in
proceedings filed against Subtenant thereunder and such adjudication shall not
be vacated, set aside or dismissed within sixty (60) days or stayed within five
(5) working days.
(e) A receiver, Trustee, custodian or similar official shall be appointed
for all or substantially all of the assets of Subtenant and such receivership
shall not be terminated or stayed within the time permitted by law.
(f) Subtenant shall have commenced a judicial and/or non-judicial
corporate dissolution proceeding.
20. REMEDIES. On the occurrence of any event of default specified in
Paragraph 19 hereof, which is not cured within five (5) business days of
Subtenant's receipt of subsequent notice from Sublandlord that the respective
cure periods in Paragraph 19 have expired, without Subtenant's curing, or if
applicable, commencing diligent efforts to cure the same, Sublandlord shall
have the option to pursue any one or more of the following remedies without any
notice or demand whatsoever:
(a) Terminate this Sublease in which event Subtenant shall immediately
surrender the Subleased Premises to Sublandlord, and if Subtenant fails to do
so, Sublandlord may, without prejudice to any other remedy which it may have
for possession or arrearages in rent, enter upon and take possession and expel
or remove Subtenant and any other person who may be occupying the Subleased
Premises or any part thereof, by force if necessary, without being liable for
prosecution or any claim of damages thereof; and Subtenant agrees to pay to
Sublandlord on demand the amount of all loss and damage which Sublandlord may
suffer by reason of such termination, whether through inability to relet the
Subleased Premises on satisfactory terms or otherwise, said loss and damage to
include all damages to which Sublandlord is entitled at law arising from
Subtenant's breach and the termination of this Sublease.
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(b) Enter upon the Subleased Premises by reasonable force if necessary
without being liable for prosecution or any claim for damages therefor, and do
whatever Subtenant is obligated to do under the terms of this Sublease; and
Subtenant agrees to reimburse Sublandlord on demand for any reasonable expenses
which Sublandlord may incur in thus effecting compliance with Subtenant's
obligations under this Sublease, and Subtenant further agrees that Sublandlord
shall not be liable for any damages resulting to the Subtenant from such
action.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any
of the other remedies herein provided or any other remedies provided by law,
nor shall pursuit of any remedy herein provided constitute a forfeiture or
waiver of any rent due to Sublandlord hereunder or of any damages occurring to
Sublandlord by reason of the violation of any of the terms, provisions and
covenants herein contained. Sublandlord's acceptance of rent following an
event of default hereunder shall not be construed as Sublandlord's waiver of
such event of default. No waiver by Sublandlord of any violation or breach of
any of the terms, provisions and covenants herein contained shall be deemed or
construed to constitute a waiver of any other violation or breach of any of the
terms, provisions, and covenants herein contained. Forbearance by Sublandlord
to enforce one or more of the remedies herein provided upon an event of default
shall not be deemed or construed to constitute a waiver of such default. None
of the foregoing shall diminish or eliminate Sublandlord's obligation to
mitigate damages to the extent such obligation exists under the laws of the
state in which the Subleased Premises are located.
21. SURRENDER OF PREMISES. No act or thing done by Sublandlord or its
agents during the term hereby granted shall be deemed an acceptance of a
surrender of the Subleased Premises, and no agreement to accept a surrender of
the Subleased Premises shall be valid unless the same be made in writing and
subscribed by Sublandlord.
22. ATTORNEY'S FEES. If it should be necessary or proper for either
Sublandlord or Subtenant to bring any action under this Sublease to recover any
amount payable hereunder, or for the enforcement of any of Sublandlord's or
Subtenant's rights hereunder, the party prevailing completely on all issues
shall have the right to recover in any such case a reasonable attorney's fee.
23. RECEIPTS FROM ASSIGNEE OR SUBTENANT. The receipt by Sublandlord or
Prime Landlord of rent from any assignee, subtenant or occupant of the
Subleased Premises shall not be deemed a waiver of the covenant in this
Sublease contained against assignment and subletting or an acceptance of the
assignee, subtenant or occupant as tenant or a release of Subtenant from the
further observance or performance by Subtenant of the covenants in this
Sublease contained, on the part of Subtenant to be observed and performed. No
provision of this Sublease shall be deemed to have been waived by the parties
unless such waiver be in writing signed by said party.
24. QUIET ENJOYMENT; SUBLANDLORD'S REPRESENTATIONS. Subtenant, upon the
payment of the rentals and performance of the covenants on Subtenant's part to
be performed hereunder, shall and may peaceably and quietly have,
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hold and enjoy the Subleased Premises during the term hereof and any
extensions thereof, free from interference or disturbance from Sublandlord,
but subject to the terms and conditions of this Sublease and the Prime Lease.
Notwithstanding anything to the contrary, Sublandlord shall not be liable for
any interference or disturbance from other tenants or third persons, nor shall
Subtenant be released from any of the obligations of this Sublease because of
such interference or disturbance, unless such results from a third party
claiming through Sublandlord or Sublandlord fails to enforce diligently its
rights to cause such interference or disturbance to cease; provided that, to
the extent that Sublandlord is relieved of its obligation to pay rent pursuant
to the Prime Lease, Subtenant shall not be obligated to pay Rent at any time the
Subleased Premises become substantially unusable for Subtenant's normal
business operations as a result of any such disturbance of Subtenant's
possession of the Subleased Premises.
If Sublandlord shall fail to comply with any material term, provision, or
covenant of this Sublease, Subtenant may give notice to Sublandlord to correct
such default. Sublandlord shall have the right to correct or remedy such
default before Subtenant may take any action under this Sublease by reason of
such default. If such default shall continue for forty-five (45) days after
such written notice, or such further period as may be reasonably required to
cure such default if it is of such a nature that it cannot reasonably be cured
within such forty-five (45) day period, the Rent shall be abated on a square
footage basis during the period the Subleased Premises or a part thereof is
unfit for occupancy.
Sublandlord represents and warrants to Subtenant that:
(a) Sublandlord has heretofore provided Subtenant with a copy of the Prime
Lease and all amendments and modifications thereof;
(b) there has been no assignment of Sublandlord's interest therein or
sublease of the Subleased Premises, other than pursuant to this Sublease;
(c) Sublandlord is fully authorized to enter into this Sublease and no
consent from any third party (except Prime Landlord) is required to authorize
Sublandlord to enter into this Sublease; and
(d) to the best knowledge of Michael Manchisi, Vice President - Global
Operations Administration of Sublandlord, (i) there is no current major dispute
or litigation between Sublandlord and Landlord with respect to the Prime Lease,
(ii) no material default of the Landlord or Sublandlord currently exists under
the Prime Lease, and (iii) Sublandlord has received no any written notice of
any material problem regarding the compliance of the Subleased Premises with
local and federal codes, statutes and laws, including without limitation the
Americans with Disabilities Act and environmental laws.
Sublandlord shall hold Subtenant harmless from and against any costs,
damage or liability to Subtenant arising out of Sublandlord's default or
failure to comply with the
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Prime Lease or any provision of law compliance with which is required by the
Prime Lease.
25. OTHER AGREEMENTS. Subtenant agrees that it accepts this Sublease
subject to and subordinate to any mortgage or deed of trust now or any time
constituting a lien or charge upon the Subleased Premises, the Sublandlord's
Premises and the Building.
26. NOTICES. Each provision of this Sublease, or of any applicable
governmental laws, ordinances, regulations, and other requirements with
reference to the sending, mailing, or delivery of any notice, or with reference
to the making of any payment by Subtenant to Sublandlord, shall be deemed to be
complied with when and if the following steps are taken:
(a) All Rent and other payments required to be made by Subtenant to
Sublandlord hereunder shall be payable to Sublandlord at the address
hereinbelow set forth, or at such other address as Sublandlord may specify from
time to time by written notice delivered in accordance herewith;
(b) Except as otherwise expressly provided herein, any notice or document
required to be delivered hereunder shall be deemed to be delivered when
actually hand-delivered or delivered by air express or surface courier, which
courier shall obtain a receipt from the addressee, or when actually received
(unless deliberately refused) after deposit in the United States mail, postage
prepaid, certified mail (with return receipt requested), addressed to the
parties hereto at the respective addresses set out below, or at such other
address as they have theretofore specified by written notice delivered in
accordance herewith:
Sublandlord:
NDC International Ltd. of Mansell Court
69 Mansell Street
London, England E1 8AN
Attention:
Subtenant:
Global Payment Systems LLC of Mansell Court
69 Mansell Street
London, England E1 8AN
Attention:
Fax No.:
A copy of any notice given to Sublandlord or Subtenant shall be sent by
telefax at the time of dispatch of such notice.
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27. NO BROKERS. Each party hereby represents and warrants to each other
that no real estate or leasing broker or agent has been employed, retained or
involved in this transaction, and each party hereby agrees to indemnify and
hold the other harmless from and against any liabilities and claims for
commissions and fees due or claimed to be due by any party claiming to have
dealt with the indemnifying party in connection with this Sublease.
28. FORCE MAJEURE. Whenever a period of time is herein prescribed for
action to be taken by, or any obligation is required of, Sublandlord or
Subtenant, other than the payment of money owed hereunder (unless payment is
not due as a result of any force majeure), neither Sublandlord nor Subtenant
shall be liable or responsible for, and there shall be excluded from the
computation for any such period of time, any delays in performance due to
strikes, riots, acts of God, shortages of labor or materials, war, governmental
laws, regulations, or restrictions, or any other causes of any kind whatsoever
which are beyond the control of said party. This Paragraph shall apply only to
the extent the party has taken reasonable steps to avoid the force majeure and,
once it occurs, diligently seeks to overcome it. Any force majeure occurrence
will not extend the term of this Sublease.
29. SEPARABILITY. If any clause or provision of this Sublease is illegal,
invalid or unenforceable under present or future laws effective during the term
of this Sublease, the remainder of this Sublease shall not be affected thereby,
and in lieu of each clause or provision of this Sublease that is illegal,
invalid or unenforceable, there shall be deemed added as a part of this
Sublease a clause or provision as similar in terms to such illegal, invalid, or
unenforceable clause or provision as may be possible and be legal, valid, and
enforceable.
30. AMENDMENTS; BINDING EFFECT. This Sublease may not be altered,
changed, or amended, except by instrument in writing signed by both parties
hereto. The terms, provisions, covenants and conditions contained in this
Sublease shall apply to, inure to the benefit of, and be binding upon the
parties hereto, and upon their respective successors in interest and legal
representatives, except as otherwise herein expressly provided. This Sublease
shall not be binding upon either party until it is signed and delivered by such
party.
31. GENDER. Words of any gender used in this Sublease shall be held and
construed to include any other gender, and words in the singular number shall
be held to include the plural, unless the contest otherwise requires.
32. CAPTIONS. The captions contained in this Sublease are for convenience
of reference only, and in no way limit or enlarge the terms and conditions of
this Sublease.
33. MEMORANDUM. Subtenant agrees that it shall not record any memorandum
or instrument with respect to this Sublease without the prior written consent
of Sublandlord and Prime Landlord.
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34. GOVERNING LAW. This Sublease shall be construed in accordance with
the law of the state in which the Subleased Premises are situate.
35. PARKING. To the extent Sublandlord has rights to parking under the
Prime Lease or by other agreement with the Prime Landlord, Subtenant shall,
without additional cost, be entitled to a portion of such parking privileges
based on its share of the Sublandlord's Premises.
36. LICENSED AREAS. Also shown on Exhibit A(1) are certain portions of
the Building (the "Licensed Areas") of which Sublandlord is tenant under the
Prime Lease, which Sublandlord hereby licenses to Subtenant to use, on a
non-exclusive basis, to provide ingress and egress to the Subleased Premises,
access to fire exits and emergency facilities and for bathrooms and access
thereto. Subtenant's use of the Licensed Areas shall be limited to those uses
ancillary to its occupancy of the Subleased Premises and for no other purpose
and shall be exercised in a manner which shall (a) not unreasonably interfere
with Sublandlord's use of such areas, (b) be in compliance with all laws,
orders and regulations of federal, state, county and municipal authorities and
with any directions of any public officer or officers pursuant to law, (c) be
in compliance with Prime Landlord's Rules and Regulations and (d) be in
compliance with such other reasonable rules and regulations as Sublandlord
shall prescribe from time to time and give notice of to Subtenant. The license
for the Licensed Areas shall be and extend through the term of this Sublease as
the same may be shortened or terminated pursuant hereto. Subtenant's
obligations to insure and indemnify Sublandlord with respect to the Subleased
Premises shall also extend to the Licensed Areas. A violation by Subtenant of
any provision of this License shall constitute a violation of this Sublease.
37. SUBTENANT'S SHARE. Whenever a calculation shall be required or
permitted of subtenant's share (referred to in this Sublease as "Subtenant's
Share") of Sublandlord's Premises or Sublandlord's costs, such calculation
shall be made by using as the numerator the area of the Subleased Premises and
as the denominator the area of the Sublandlord's Premises diminished by the
area of the Licensed Areas.
IN WITNESS WHEREOF, the parties have executed this Sublease on the dates
set forth below and this Sublease shall be effective as of the latter of such
dates.
SUBLANDLORD:
NDC INTERNATIONAL LTD.
By:
-------------------------------------
Title:
------------------------------
By:
-------------------------------------
Title:
-----------------------------
[Affix Corporate Seal]
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SUBTENANT:
GLOBAL PAYMENT SYSTEMS LLC, a Georgia limited
liability company
By:
-----------------------------------------
Name: E. Michael Ingram
Title: Secretary
[Affix Corporate Seal]
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EXHIBIT M
NDCI
SERVICE AGREEMENT
THIS NDCI SERVICE AGREEMENT ("Agreement") dated as of March 31, 1996 is
between GLOBAL PAYMENT SYSTEMS LLC, a Georgia limited liability company, (the
"Company") and NDC International, Ltd., a Georgia corporation ("NDCI").
WHEREAS, NDCI, National Data Corporation, a Delaware corporation, National
Data Payment Systems, Inc., a New York corporation, National Data Corporation
of Canada, Ltd., a Canadian corporation, GPS Holding Limited Partnership, a
Georgia limited partnership, MasterCard International Incorporated, a Delaware
corporation, and the Company have entered into an Asset Purchase and
Contribution Agreement dated as of February 22, 1996, as amended (the "Purchase
Agreement"). Each capitalized term used herein but not defined herein shall
have the meaning given it in the Purchase Agreement.
WHEREAS, the Purchase Agreement provides that the Company and NDCI shall
enter into this Agreement;
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants contained herein, the Company and NDCI agree as follows:
TERMS AND CONDITIONS
1. NEWCO SERVICES: According to the terms of this Agreement, the Company
will furnish NDCI and its Affiliates with the data processing services
described in Exhibit A, Service Description, attached hereto and
incorporated herein by reference. Additional requested Services, if
available, will be furnished to NDCI under the general terms and
conditions of this Agreement and in accordance with pricing as set forth
in Paragraph 2, below. Any such additional Services will be as described
in additional Exhibits A to this Agreement, each of which shall be signed
by both parties hereto. Any Exhibit A may contain terms different than
those contained in this Agreement, and in such event the terms of each
such Exhibit A shall control with respect to the Services described in
such Exhibit A.
2. CHARGES: Charges for the Services shall be equal to the Company's
actual cost (including a reasonable allocation of the administrative
overhead of the Company relating to the provision of such services) for
providing the Services. In addition, NDCI will be charged an amount
equal to any taxes, however designated, levied or based on any of the
above referred to charges or Services, including State and local taxes
paid or payable by the Company, excluding any federal, State or local
taxes based on the Company's net income.
82
The Company will bill NDCI monthly for all charges incurred by NDCI,
including any authorized charges incurred by the Company on NDCI's behalf
for NDCI's use of the Services as provided for in this Agreement. NDCI
agrees to pay the Company upon receipt of each monthly invoice, and
agrees further to pay a one percent (1%) per month service charge on all
invoices that are not paid within thirty (30) days following such
receipt. All payments shall be made in United States Dollars. In the
event that any invoice is not timely paid as provided herein, the Company
may, in addition to any other right or remedy which it may have under
this Agreement or at law, terminate this Agreement and NDCI's use of the
Services if NDCI does not effect payment in full within ten (10) days of
the Company's written demand therefor. NDCI agrees to reimburse the
Company for all costs and expenses, including reasonable attorney's fees,
incurred by the Company in enforcing collection of any moneys due it
under this Agreement.
3. TERM AND TERMINATION:
a. This Agreement shall remain in full force and effect for an
initial term of five (5) years, beginning upon the effective date
set forth above, and shall be automatically extended for successive
one (1) year periods on the same terms and conditions expressed
herein, or as may be amended, unless either party gives the other
party written notice of termination at least thirty (30) days prior
to the expiration of the initial term or any extensions or renewals
thereof. Termination of this Agreement shall not terminate NDCI's
obligation to pay the Company for all services performed under the
Agreement prior to discontinuance of performance by the Company due
to termination.
b. Except as provided in Paragraph 2 above, in the event that
either party hereto fails in the performance of its obligations
hereunder or breaches the terms or conditions hereof, the other
party may, at its option, give written notice to the party which has
failed to perform or has breached this Agreement of its intention to
terminate this Agreement unless such breach or failure in
performance is remedied within thirty (30) days of such notice.
Failure to remedy such a breach shall make this Agreement
terminable, at the option of the aggrieved party, at the end of such
thirty (30) day period unless notification is withdrawn.
4. CHANGE OF CHARGES: The Company shall have the right to increase
the fees and charges paid by NDCI to offset any increase in rates
charged by any third party service providers utilized by the Company in
the provision of Services hereunder. Any such increase shall become
effective on the same day as the increase in rates charged by the
communications common carrier becomes effective.
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The Company shall also have the right to increase such fees and charges
to offset any increase to the Company in the costs of providing the
Services hereunder. Any such increase shall become effective as of the
date on which the Company notifies NDCI of such increase.
5. USE OF THE SERVICES: NDCI agrees to utilize the Services in
accordance with this Agreement, its exhibits, and the Company's
reasonable Service instructions and specifications and to provide the
Company with the necessary data in the proper format to enable the
Company to properly furnish the Services.
6. LIMITATION OF LIABILITY:
a. The Company shall not be liable for failure to provide the
Services if such failure is due to any cause or condition beyond its
reasonable control. Such causes or conditions shall include but
shall not be limited to, acts of God or of the public enemy, acts
of the Government in either its sovereign or contractual capacity,
fires, floods, epidemics, quarantine restrictions, strikes,
shortages of labor or materials, freight embargoes, unusually
severe weather, electrical power failures, or other similar causes
beyond the Company's control and the Company shall have no
liability for losses, expenses or damages, ordinary, special or
consequential resulting directly or indirectly from such causes. If
the Company's failure to provide the Services is caused by the
default of a subcontractor, and if such default arises out of
causes beyond the control of both the Company and the subcontractor,
the Company shall not be liable unless the supplies or Services to
be furnished by the subcontractor were obtainable from other
sources in sufficient time to permit the Company to fulfill its
obligations hereunder.
b. The Company agrees to use its best efforts at all times to
provide prompt and efficient services; however, the Company makes no
warranties or representations regarding the Services except as
specifically stated in this Paragraph 6.b. The Company shall use
due care in processing all work submitted to it by NDCI and agrees
that it will, at its expense, correct any errors which are due
solely to malfunction of the Company's computers, operating systems
or programs, or errors by the Company's employees or agents.
Correction shall be limited to rerunning of the job or jobs and/or
recreating of data or program files. The Company shall not be
responsible in any manner for errors or failures of or errors in
proprietary systems and programs other than those of the Company,
nor shall the Company be liable for errors or failures of NDCI's
software or operational systems, including any software licensed to
the Company by NDCI. THIS WARRANTY IS EXCLUSIVE AND IS IN LIEU OF
ALL OTHER WARRANTIES, AND SUBSCRIBER HEREBY WAIVES ALL OTHER
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WARRANTIES, EXPRESS, IMPLIED, OR STATUTORY INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE FOR A
PARTICULAR PURPOSE. Should there be any failure in performance or
errors or omissions with respect to the information being
transmitted, the Company's liability shall be limited to using its
best efforts to correct such failure in performance or errors or
omissions. In no event, except as specifically set forth herein,
shall the Company be liable to NDCI or any third parties (including
NDCI's customers) for any claim, loss or damage, ordinary, special
or consequential, or otherwise, even if the Company has been advised
of the possibility of such damage.
Due to the nature of the services being performed by the Company,
it is agreed that in no event will the Company be liable for any
claim, loss, liability, correction, cost, damage or expense caused
by the Company's performance or failure to perform hereunder which
is not reported by NDCI within one hundred twenty (120) days of
such failure to perform.
c. NDCI shall indemnify and hold harmless the Company from and
against any and all loss, damage, or expense or claims of damage or
liability, ("Claims") asserted against the Company by third parties
arising out of the performance of Services under this Agreement or
from information provided to the Company by NDCI or NDCI's
customers, or arising out of the use of such information when
furnished by the Company to NDCI's customers or to other third
persons at NDCI's request, or to officers, employees and agents of
NDCI; provided, however, that such indemnity obligation does not
apply in cases where such Claims arise primarily from the gross
negligence or intentional misconduct of the Company.
d. Liability of the Company in any and all categories and for
any and all causes arising out of this Agreement shall, in the
aggregate, not exceed six (6) month's average billing to NDCI taken
over the twelve (12) months preceding the month in which the damage
or injury is alleged to have occurred, but if this Agreement has not
been in effect for twelve (12) months preceding such date, then over
such fewer number of preceding months that this Agreement has been
in effect.
7. PROPRIETARY INFORMATION:
a. All proprietary information disclosed by either party to the
other in connection with this Agreement shall be identified as such
in writing if not already identified as such herein, and shall be
protected by the recipient party from disclosure to others. All
software, data, or other intellectual property provided by the
Company under this Agreement is hereby
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identified as proprietary to the Company and may not be copied
or used in any way other than as specifically authorized in this
Agreement. Any software or data furnished by NDCI to the Company in
connection with this Agreement is identified as proprietary to NDCI,
but may be used as required by the terms of this Agreement and
retained by the Company until performance under this Agreement is
completed or until this Agreement is terminated, whichever occurs
first, at which time such information and all copies thereof shall
be returned to NDCI upon request.
b. The Company and NDCI acknowledge that all proprietary
information disclosed by either party to the other party for the
purpose of work, or which comes to the attention of one of the
parties, its employees, officers, and agents during the course of
such work, constitutes a valuable asset. Therefore, the Company and
NDCI agree to hold such information in confidence and shall not,
except in the performance of the duties under this Agreement or with
the express prior written consent of the other party, disclose or
permit access to any such information to any person, firm or
corporation other than persons, firms or corporations authorized
by that party, and the Company and NDCI shall cause their
officers, employees, agents, and representatives to take such
action as shall be necessary or advisable to preserve and protect
the confidentiality of such information.
c. The Company's and NDCI's obligations and agreements under
this Paragraph shall not apply to any information supplied that:
(1) was known to either party prior to the
disclosure by the other, or
(2) is or becomes generally available to the public
other than by breach of this Agreement, or
(3) otherwise becomes lawfully available on a
nonconfidential basis from a third party who is not under an
obligation of confidence to either party.
8. MISCELLANEOUS:
a. This Agreement shall be construed in all respects under the
laws of the State of Georgia without reference to conflicts of laws
provisions.
b. This Agreement contains the full understanding of the parties
with respect to the subject matter hereof, and no waiver, alteration
or modification of any of the provisions hereof shall be binding
unless in writing and signed by officers of both parties. In the
event NDCI issues a purchase order or memorandum or other instrument
covering the Services
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86
herein offered and provided, it is hereby specifically agreed
and understood that such purchase order or memorandum or instrument
is for NDCI's internal purposes only and any and all terms and
conditions contained therein, whether printed or written, shall be
of no force or effect.
c. If any part of this Agreement shall be held to be void or
unenforceable, such part will be treated as severable, leaving valid
the remainder of this Agreement notwithstanding the part or parts
found to be void or unenforceable.
d. Except as otherwise provided in this Agreement, notices
required to be given pursuant to this Agreement shall be effective
when received, and shall be sufficient if given in writing, hand
delivered, sent by telegraph or First Class United States Mail,
postage prepaid and addressed to the appropriate party at the
address set forth on the signature page hereof.
The parties hereto may change the name and address of the
person to whom all notices or other documents required under this
Agreement must be sent at any time by giving written notice to the
other party.
e. Neither party to this Agreement may assign its rights or
obligations under this Agreement without the express written consent
of the other party, except that the obligations of the Company under
this Agreement may be provided or fulfilled by any parent,
subsidiary, affiliate, successor corporation or subcontractor of the
Company so long as the Company assumes full responsibility for such
obligations.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and to be effective as of the date
first set forth above.
GLOBAL PAYMENT SYSTEMS LLC NDC INTERNATIONAL, LTD.
By: GPS Holding Limited
Partnership, a ---------------------------------
Member E. Michael Ingram
Secretary
By: National Data
Corporation, its
General Partner
Date:
- ------------------------ ----------------------------
E. Michael Ingram Address:
Senior Vice President National Data Plaza
Atlanta, Georgia 30329
Date:
------------------ Attn:
Address: ----------------------------
National Data Plaza
Atlanta, Georgia 30329
Attn:
------------------
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EXHIBIT A
TO
SERVICE AGREEMENT
OPERATIONS
TERM: Five years, with year-to year renewals.
TERMINATION: By NDCI, in part or in full, at any time upon not less than 90
days prior written notice.
DESCRIPTION: