EXHIBIT 10.12
EBT SUPPORT SERVICES AGREEMENT
This EBT Support Services Agreement, dated April 17, 2000, but effective as
of April 1, 1996 ("Effective Date") is entered into by and between DELUXE
GOVERNMENT SERVICES, a division of eFunds Corporation, ("Contractor"), a
Delaware corporation, having its principal place of business at 000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000-0000 and CITICORP SERVICES INC. ("CSI"), a
New York corporation, having its principal place of business at 0000 Xxxx Xxxx
Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
WHEREAS, in accordance with the U.S. Department of Treasury Invitation for
Expressions of Interest to Acquire Electronic Benefits Transfer Services for the
Southern Alliance of States, Citibank, F.S.B. ("Citibank") was awarded the right
to enter into contracts (each, a "Contract") for the delivery of comprehensive
electronic benefits transfer ("EBT") services (the "Project") to those states
participating in the Southern Alliance of States ("SAS") and the Financial
Management Service of the United States Department of Treasury ("FMS"); and
WHEREAS, Citibank has contracted with CSI to act as its prime contractor
for the provision of EBT services to the SAS; and
WHEREAS, Contractor has been and is providing certain services in
connection with the Project in the States of Alabama (AL), Arkansas (AR),
Kentucky (KY), Missouri (MO), and Tennessee (TN), and in Florida (FL), Georgia
(GA) and North Carolina (NC) (each, a "State") in anticipation of the execution
of an EBT Support Services Agreement between the parties; and
WHEREAS, Contractor is willing to continue to provide, and CSI desires that
Contractor provide, the services on the terms and conditions set forth below.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties agree as follows:
1. Services to be Performed. Contractor will, unless otherwise stated,
provide the services described in Attachment A ("Services"), attached hereto and
made a part hereof, in support of the Project in each of the States. In
performing such services, Contractor will:
(a) Provide all services on a basis consistent with the Contract,
including without limitation, the IEI, amendments to the IEI, applicable
federal and state requirements and those of the question and answer
documents, the Citibank proposal, Citibank's BAFO pricing (for reference
purposes only; Contractor's pricing is as set forth in this Agreement),
Citibank's clarification document dated 1/23/96 and the oral presentations
to the extent any or all are expressly incorporated into the Contract ;
(b) Provide delivery of direct Federal benefits as described in
Attachment A;
(c) Monitor all systems under its control to maintain the level of
system performance and availability required by the Contract;
(d) Maintain a suitable operating environment for all computer and
other equipment in Contractor's possession used in performing the Services;
and
(e) Meet all other requirements associated with the Services as
defined by this Agreement.
Attachment A represents a general statement of work only and includes
references to the Contract for general descriptive purposes only. In the event
of any conflict between Attachment A and Contractor's required scope of work,
the parties shall promptly negotiate and resolve same in accordance with Section
22, Interpretations and Disputes.
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2. Contractor Responsibilities. Contractor agrees to undertake the
following responsibilities in connection with its performance of the Services:
(a) Contractor's employees shall provide the Services on behalf of
Contractor on a scheduled basis, which schedule shall be in accordance with
the project plans and other agreements with the States.
(b) Contractor will assist CSI in problem investigation, as reasonably
necessary for the performance of the Contract, including the preparation of
written reports as may be required by the State and Federal agencies, when
such investigations and reports concern matters that are reasonably within
the scope of Contractor's services hereunder. For purposes hereof,
investigation shall consist of such examinations and inquiries as are
reasonably necessary to determine the substance of any problem brought to
Contractor's attention and the appropriate resolution thereof.
(c) To facilitate and track all deliverables and major communications,
Contractor will utilize a transmittal system that will number and log such
deliverables and major communications.
(d) Contractor will notify the CSI SAS Project Director of all matters
affecting the scope of Contractor's performance of services hereunder,
including, without limitation, any requests for change orders by the State
or any alternatives to the required scope of work that Contractor desires
to offer to the State. Contractor will submit all deliverables and major
communications to CSI for review and approval prior to delivery to the
State. Contractor and CSI shall comply with the procedures set forth in
Section 21 with respect to any change order request from a State or other
change in scope of performance of this Agreement. Contractor will keep CSI
and, where agreed, other subcontractors of CSI informed with regular
reports of Project status. In addition, copies of all correspondence
between Contractor and the States will be provided to CSI.
(e) Any information provided by the States to Contractor from the Food
and Nutrition Service ("FNS") or Administration for Children and Families
("ACF") shall be communicated promptly to the CSI State Project Director.
Contractor shall cooperate with the CSI State Project Director to resolve
issues raised by FNS or ACF.
(f) Contractor will coordinate its delivery of Services with the
delivery of Service by other subcontractors under the Contract. In the
event of any conflict between Contractor and such other subcontractors,
Contractor shall promptly notify CSI of such conflict and will cooperate
with CSI to resolve such conflict and ensure the timely performance of the
Contract at no additional cost to Contractor, other than as may be agreed
by the parties.
(g) Contractor will provide CSI and its other subcontractors with
reasonable access to Contractor's system via Contractor's administrative
application and Contractor's software for PIN selection (where required).
Contractor will provide, as necessary, administrative and POS software to
the other subcontractors at no cost, subject to reasonable and appropriate
intellectual property protection. Such subcontractors will provide PCs, POS
equipment and a telecommunications line to Contractor at such
subcontractors' own expense.
(h) Contractor will ensure that its system will support card issuance,
PIN selection by mail, EBT-only POS processing, and linkage of the card and
PIN as agreed among CSI, Contractor, and the other subcontractors.
Contractor will only support the TRANZ 330 PIN select hardware for the
State.
(i) Contractor is responsible within the States for card support
services, including:
(i) Technical design and interfaces with the States and the card
vendor;
(ii) Selection of PIN encryption equipment and PIN selection
processes;
(iii) System and help desk related card replacement procedures.
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(j) Any card or PIN decisions or changes to core services, other than
ARU PIN issuance, by CSI or the State that impact the benefit recipient
help desk must be approved by Contractor prior to implementation.
(k) Contractor will be responsible for training state and local
personnel in the States as set forth in Attachment A.
(l) To facilitate the interchange of transactions originating within
the Project and transactions that occur outside the Project that require
authorization and/or settlement by Contractor pursuant hereto, Contractor
will connect to, and route all transactions authorized or settled by
Contractor pursuant hereto, to CSI's designated switch; provided that the
cost of authorizing and/or switching and/or settling transactions that are
either initiated within the Project with non-SAS cards or initiated outside
the Project with SAS cards is not subject to this Agreement and such costs
shall be addressed by amendment to this Agreement. The interface to the CSI
designated switch will be ISO 8583 as published by ANSI. Notwithstanding
the foregoing, in Alabama, Arkansas, Kentucky, Missouri and Tennessee,
intra-Project transactions (i.e. transactions initiated within a State
using cards issued by that State or another SAS State) that originate at
EBT-only terminals driven by Contractor do not need to be routed to CSI's
designated switch. For all transactions that are authorized by Contractor
and which are not settled through CSI's designated switch, Contractor shall
be responsible for settlement of such transactions through Contractor's
designated financial institution, subject to any right of approval of the
applicable State. Such settlement shall include, as necessary, the
origination at its expense of a debit(s) to the State(s) in the amount of
authorized transactions and of credits to retailers in the amount of
authorized transactions for such retailer. Contractor shall ensure the
reporting requirements of the States are met if transactions are intercept
processed by Contractor.
(m) With respect to the Services provided by Contractor in States that
have required adherence to the Quest Rules promulgated by the National
Automated Clearing House Association, as amended from time-to-time, (the
"Quest Rules"), the Contractor shall undertake the responsibilities of a
Cardholder Authorization System and a Third Party Service Provider to the
extent the Quest Rules are applicable to its Services hereunder.
(n) The parties acknowledge that they have entered into an Agreement
for Switching Services, dated January 31, 1997 (the "Switch Agreement")
whereby Contractor will provide CSI transaction switch services as CSI's
designated switch. Contractor will provide the EBT switching services as
defined in the Switch Agreement. Should the Switch Agreement be terminated
as provided therein and CSI chooses a designated switch provider other than
Contractor, Contractor agrees:
(i) To the extent Contractor acts as a third party acquirer for
EBT-only POS transactions, provide a line to the CSI designated switch
and certify to the CSI designated switch.
(ii) To route EBT-only transactions initiated in Florida and
Georgia, if acquired by Contractor, to the CSI designated switch.
(iii) To reimburse CSI for switching provided by the CSI
designated switch for Alabama, Arkansas, Kentucky, Missouri and
Tennessee Third Party Processor (TPP) acquired transactions (including
Contractor acting as a TPP) and Network acquired EBT transactions
switched to Contractor based upon the following formula: number of TPP
and Network acquired and switched EBT transactions in the Five States
times the appropriate switch fee from Table A below.
(iv) Unless otherwise agreed, Contractor is not responsible to
acquire non-SAS transactions initiated in any of the States.
(v) Contractor will not be required to route EBT-only
intra-Project transactions (i.e. transactions initiated within a State
using cards issued by that State or another SAS State)
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acquired by Contractor in Alabama, Arkansas, Kentucky, Missouri or
Tennessee to the CSI designated switch.
TABLE A
------------------------------------- -------------------
All Monthly Transaction Volumes* Switch Fee
Through the CSI Designated Switch
------------------------------------- -------------------
0 - 10,000,000 $0.018
------------------------------------- -------------------
10,000,001 - 50,000,000 $0.0175
------------------------------------- -------------------
Any and all over 50,000,000 $0.0165
*Transactions switched regardless of
source
------------------------------------- -------------------
(o) Contractor is responsible for complying with performance standards
set forth in the Contracts applicable to Services of Contractor as set
forth in Attachment A and the payment of liquidated damages attributable to
Contractor as set forth in Attachment B that are collected by the State in
connection therewith under the Contracts. Determination of Contractor's
(and CSI's vis-a-vis Contractor) responsibility for failure to meet a
performance standard shall be in accordance with the applicable Contract.
Contractor will not be responsible for liquidated damages to the extent
that Contractor's failure to meet Contract performance standards is a
result of CSI's acts or omissions. When two or more performance standards
are not met in any one month and the failure to meet one performance
standard (the "preceding standard") is determined to be the preceding cause
of the failure to meet any other performance standard (the "succeeding
standard"), then the party responsible for failing to meet the preceding
standard shall be responsible for any liquidated damages assessed for
failure to meet the succeeding standard, to the extent that the failure to
meet the succeeding standard is attributable to the failure to meet the
preceding standard.
(p) When Contractor serves as CSI's designated switch, CSI shall be
responsible for all costs for switching Florida, Georgia and North Carolina
transactions to CSI for authorization in accordance with the Switch
Agreement for so long as the Switch Agreement remains in effect, and, if at
any time applicable after termination of the Switch Agreement, in
accordance with switching terms and conditions to be agreed upon in writing
by the parties.
(q) Contractor is responsible for all Network Qualifying Expenses, as
defined and as set forth in Attachment B.
(r) Contractor may debit each Federal recipient each month the
appropriate case/month fee as set forth in Attachment B, from Schedule
1(d). For a non-federal recipient, Contractor may debit $0.85 from the
recipient's account for each cash withdrawal at an ATM/POS in excess of the
state-subsidized cash withdrawal transactions for that month. For a federal
recipient, Contractor may debit $0.85 from the recipient's account for each
cash withdrawal at an ATM/POS in excess of one that occurs within a month.
For recipients receiving both Federal and non-Federal benefits, Contractor
may debit $0.85 from the recipient's account for each cash withdrawal at an
ATM/POS in excess of the sum of (i) the State-subsidized cash withdrawal
transactions, and (ii) one cash withdrawal for that month. Upon request by
CSI and subject to Section 21 (a) of this Agreement, Contractor may debit
fees, as determined by CSI, from federal or non-federal recipients for
balance inquiry and denied transactions performed at ATMs or POS locations.
(s) With respect to the Women, Infants and Children Program ("WIC"),
Contractor's responsibilities are set forth in subpart 10 of Attachment A.
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3. The Contract. Contractor acknowledges receipt of each extant Contract
with each State in which it will provide Services under this Agreement, and will
familiarize itself with such Contract. In the event that a Contract has not been
executed as of the date hereof for any State, CSI will consult with Contractor
prior to execution and upon execution of a Contract with such State, such
Contract will be deemed a Contract for the purposes of this Section to the
extent Contractor has not advised CSI that it is unwilling to abide by a
particular term or terms of such Contract. CSI shall deliver to Contractor a
copy of each fully executed Contract immediately after execution by the State
and CSI. Contractor further agrees that this Agreement is subordinate to the
Contract and that any provisions contained herein that conflict with any term of
the Contract is superseded by the Contract, unless Contractor has notified CSI
in writing that it is unwilling to abide by a particular term or terms of the
Contract. Subject to the foregoing, Contractor covenants that it will abide by
all applicable terms of each Contract, including without limitation, any
provisions concerning the audit of Contractor's books and records, access to
Contractor's facilities, confidentiality of information received pursuant to
performance of the Contract, employment practices, indemnification of the
particular State, and termination of the Contract.
4. CSI Responsibilities. CSI agrees to undertake the following
responsibilities to support Contractor's performance of the Services:
(a) Act in the capacity of general contractor under each Contract and
provide overall Project management and responsibility for all other
subcontractors on the Project to ensure their timely delivery of services
as follows:
(i) As general contractor, CSI will be lead negotiator with the
SAS, the States and retailers. CSI will invite support and
participation from Contractor in all negotiations and meetings with
the SAS and the States concerning the Services.
(ii) Except to the extent otherwise provided in this Agreement,
CSI is responsible for the schedule, approach, documentation, and
correspondence to retailers in the States. CSI will be responsible for
its other subcontractors meeting the retail installation schedule
contained in the Work Plan. Contractor will be included, as necessary,
in all retailer meetings with CSI or its other subcontractors.
(iii) CSI is responsible for service planning for retail
installation.
(iv) CSI will develop a retailer agreement, in consultation with
the Contractor and its other subcontractors, for use in the States and
will maintain all retailer contracts for the States.
(v) CSI is responsible for all third party processor and regional
network agreements, which will be developed by CSI, with the
assistance of Contractor, as requested by CSI, and held by CSI.
(vi) CSI is responsible for client training, including approval
of the schedule, approach, documentation and correspondence used for
recipient training, both in-person and mail training, and ensuring
coordination with the retailer installation schedule. Contractor will
acquire from the States the necessary data in form and format to set
up recipients for training, and training of state and local personnel
in the States.
(b) Provide contractual interface with the States. CSI shall confer
with Contractor on all matters which directly and/or materially affect
Contractor's performance or costs and shall formalize in a jointly signed
writing CSI's and Contractor's understanding prior to entering into any
agreement with any State for changes in Project scope, deliverables, due
dates, schedules, fees, costs, or Contractor responsibilities.
(c) Provide and manage all other services to be provided under the
Contract, except as specifically delegated to Contractor hereunder.
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(d) Confer with Contractor and negotiate, as necessary, an amendment
to this Agreement reflecting changes in Project scope, deliverables, due
dates, schedules, fees, costs, or Contractor responsibilities hereunder in
the event that any State desires to effect any changes that affect
Contractor's performance or cost under this Agreement.
(e) With respect to WIC, CSI, for Florida, Georgia and North Carolina,
will develop systems requirements and will manage its own system
development and implementation. CSI will be responsible for WIC retailer
participation unless subcontracted to Contractor in the States where
Contractor's system is utilized.
(f) The interface from CSI to CSI's designated switch will be EBT ISO
8583 as published by ANSI.
(g) With respect to card services:
(i) CSI will produce all cards for the SAS. CSI will be
responsible for the distribution of all cards and PINs, which PINs for
the States will be generated by Contractor in accordance with the
Project Plan.
(ii) Each State will have a separate BIN for state and for
federal programs.
(iii) CSI will assist the States and Contractor in applying for
the BIN numbers.
(iv) CSI will confer with Contractor regarding any Merchant or
State help desk related issues that are outside Contractor's required
scope of work.
(h) Take lead responsibility for conferring with the SAS Management
Council and include Contractor in all such meetings or discussions, as
practicable.
(i) Take lead responsibility for interface with federal agencies (FMS,
FNS, ACF). Problems with federal cooperation will be handled by State
Project Directors and escalated to the CSI SAS Project Director when
necessary. Unless prohibited by the Contract or federal law or law of the
applicable State, the contents of all written or verbal communications from
FMS or the States to CSI that are directly related to or affect the Project
for the States will promptly be made known to Contractor.
(j) CSI will develop, with participation from Contractor, and execute
a strategy to obtain participation from banks, networks, third party
processors, and merchant processors. CSI will negotiate all agreements with
third parties, networks and other parties, as may be required, for
interoperability between projects. In its EFT Network Agreement, CSI will:
(i) Require that all EFT networks xxxx CSI on a monthly basis by
BIN number for ATM/POS transactions during the prior month.
(ii) Reimburse all EFT networks under contract for ATM/POS
interchange and switch fees for the month.
(iii) Provide Contractor with supporting documentation by BIN for
the expenses.
(k) CSI shall assist Contractor in acquiring authorized retailer
information from FNS for CSI's designated switch data base loading.
(l) Cause its designated switch to be connected with all third party
processors, networks, merchant processors and all other parties desiring
authorization of Project transactions and routing of non-Project
transactions to the appropriate party for authorization in accordance with
the Quest Rules. CSI shall cause its designated switch to route to
Contractor transactions for Alabama, Arkansas, Kentucky, Missouri and
Tennessee for authorization. CSI shall be responsible for the settlement of
all CSI host
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processor transactions processed through its designated switch. The
responsibilities of the parties when CSI chooses a designated switch
provider other than Contractor are contained in Paragraph 2(n) of this
Agreement.
(m) CSI shall comply with the Quest Rules with respect to transactions
routed to Contractor for authorization. CSI shall enter into agreements
with its affiliates to serve as issuer pursuant to the Quest Rules with
respect to transactions processed by Contractor pursuant hereto.
5. Term of Agreement. This Agreement becomes effective upon execution and
delivery by CSI and Contractor as of the Effective Date first written above (the
"Effective Date") and shall continue in effect for the initial term of the
Contract, and, subject to Section 6 (h) below, through the term of any properly
exercised renewal options in the Contract, which shall be limited to those
extensions or renewals of any Contract beyond such Contract's initial term that
are at the sole option of the State and on exactly the same terms and conditions
as in effect during such initial term, except as may be modified by an amendment
to such Contract and agreed to by the Contractor pursuant hereto or as otherwise
agreed by the parties pursuant to this Agreement. Unless expressly agreed by the
parties hereto in writing, this Agreement shall have no force or effect beyond
the term set forth above or with respect to any re-bidding of any Contract and
neither party shall have any obligation to acquire or provide the services
covered by this Agreement with respect to a State beyond such term or on a
re-bid. In the event that the Contract contains an extension or renewal term
upon exercise of a mutual option and Contractor elects not to continue to
perform the services hereunder upon the exercise of such option, Contractor
shall transition such services to CSI upon the expiration of the term of the
Contract and Contractor shall bear at its own expense all of its costs related
to the transition of services to CSI.
6. Payment.
(a) Within ten (10) days of the Execution Date (as defined below) of
this Agreement, Contractor shall pay to CSI in immediately available funds
the amount of $4,000,000. Upon the first and second anniversary of the
Execution Date, Contractor shall pay to CSI on each such date in
immediately available funds the amount of $1,000,000 (two additional
payments of one million dollars each). Upon receipt of the initial
$4,000,000 payment, in accordance with the foregoing, CSI shall recalculate
the fees paid by CSI to Contractor for services performed by Contractor
from the Effective Date through the date of execution of this Agreement by
both parties ("Execution Date"), using the fees set forth in Attachment B
of this Agreement. Within thirty (30) days of the Execution Date, CSI shall
pay to Contractor in immediately available funds the difference between the
fees paid by CSI to Contractor prior to the Execution Date and the fees
payable to the Contractor as calculated in accordance with Attachment B
hereto.
(i) During the period between the Effective Date and the
Execution Date, Contractor and CSI have engaged in a dispute over the
existence and terms of any contract between them related to the
relationship to be encompassed by this Agreement. During the dispute,
Contractor and CSI provided services to the States referred to in this
Agreement. The provision of services to the States caused additional
dispute between Contractor and CSI concerning the basis for and the
amount of compensation to which each party was entitled for the
services provided to the States. Contractor and CSI have agreed to
resolve their differences and settle their disputes by executing this
Agreement. All rights that Contractor and CSI may have had to payment
of money or any other remedy arising from their disputes existing
between the Effective Date and the Execution Date relating to the
services and disputes described in this paragraph are merged into this
Agreement and by the execution of this Agreement and the payments
described in paragraph 6(a) above. Contractor and CSI agree that they
have been fully compensated and paid for these claims and disputes,
except as indicated below. In consideration of and subject to the
complete satisfaction of the respective obligations of the parties
under this Section 6(a), both Contractor and CSI (each, a "Releasing
Party") hereby fully, freely, completely and absolutely releases and
forever discharges the other party and the other party's parents,
subsidiaries and affiliates, the present, former and future officers,
directors, agents, employees and stockholders of those entities, and
such persons' heirs, executors, administrators and assigns
(collectively, the "Released Party"), of and from any and all claims,
suits, charges, demands, causes of action, expenses, injuries, costs,
losses, debts, or damages of any kind, whether known
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or unknown ("Claim"), which the Releasing Party now has, could have,
or ever has had against Released Party arising from or in any way
related to any dispute between the parties described in this paragraph
for the period from the Effective Date through and including the
Execution Date, except for (a) Claims related to ACH transmission
services; (b) Claims to the extent caused by and to the extent
attributable to fraud of the Released Party; or (c) Claims by a State
related to the performance of either party from the Effective Date to
the Execution Date.
(b) From and after the Execution Date, in exchange for its performance
of the Services, Contractor shall be entitled to receive fees as described
in Attachment B. The compensation paid to Contractor shall be adjusted
pursuant to change orders as agreed between the parties in accordance with
Section 21 hereof. Payment shall be made monthly the later of (i) within
thirty (30) days following receipt of an invoice(s) from Contractor with
necessary supporting documentation or (ii) within ten (10) business days
after receipt of payment by CSI from the State. In the event that CSI fails
to timely pay Contractor following receipt of funds from the State or fails
to xxxx the State within fifteen (15) days following receipt of
Contractor's invoice, Contractor shall be entitled to payment of interest
on the outstanding balance for the period of the delay by CSI (i) in paying
Contractor following receipt of payment from the State or (ii) in
submitting an invoice for payment at an annual rate equal to the reference
rate of Citibank, N.A. (New York) for loans to its large corporate
customers plus one per cent. Delay in submitting an invoice shall be the
period from fifteen days after CSI receives an invoice from Contractor in
the correct format for a State to the date upon which CSI submits the
invoice to the State in the correct format for such State.
(c) Contractor shall ensure that all invoices submitted hereunder are
for the correct amounts in format as agreed by the parties and, in the
event of any error, shall be solely responsible for reimbursing the State
through CSI in the amount of such error and for any penalties incurred
thereby. CSI will xxxx States within ten (10) working days following
receipt of Contractor's invoice for Services hereunder for the immediately
preceding period or such other period for which payment is then due. Any
late payment penalties incurred by and paid to CSI by the State will be
passed onto Contractor to the extent Contractor's payment is delayed.
(d) CSI may deduct from payment to Contractor amounts reflecting
liquidated damages, costs, penalties or adjustments attributable to
Contractor that are collected by the State after exhaustion of Contractor's
administrative remedies or withheld by the State prior to any
administrative remedy; provided that in the event that the State withholds
from payment any amounts claimed as liquidated damages, penalties or
adjustments attributable to Contractor prior to the exhaustion of
administrative or judicial remedies, CSI will take all necessary steps to
obtain payment from the State in accordance with Section 22 hereof.
(e) Notwithstanding (b) above, if funds are withheld by any State due
to actions by CSI or any subcontractor other than Contractor, Contractor
will be paid in full within thirty (30) days of receipt of the invoice from
Contractor. If a State withholds payment of funds due to a dispute
involving Contractor's service, Contractor will be paid in full for
services not in dispute to the extent payment of funds for those services
are not also withheld by the State, and CSI will take all necessary steps
to obtain payment for Services not in dispute.
(f) In the event of a dispute between CSI and Contractor, CSI will pay
Contractor all amounts and for all Services not in dispute.
(g) Contractor shall be responsible for all sales and use taxes
imposed in connection with the Services.
(h) From and after the Execution Date, CSI agrees that in the event
that (a) CSI initiates a claim with any State for pricing improvements
relative to the Services provided by Deluxe to such State, CSI agrees that
CSI shall seek Deluxe's input for such claim and shall use its best efforts
to obtain pricing improvements for the benefit of Deluxe and (b) for
renewal or extension of a Contract, CSI is offered by a State pricing
improvements relative to the Services provided by Deluxe to such State, CSI
agrees to offer Deluxe a pricing improvement for any such renewal or
extension. Should the State request any change in
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Services for such renewal or extension, pricing improvements offered Deluxe
will conform to Section 21 (b) hereof. Deluxe agrees that it will share the
expense of any such claim (outside counsel fees and costs and CSI's
out-of-pocket expenses) on a proportionate basis.
7. Proprietary Information.
(a) Confidential Information of the Parties. The parties acknowledge
that all information, including software described in paragraph 7(b),
regarding a party or its affiliates (the "Disclosing Party") provided to
the other (the "Receiving Party") and identified by the Disclosing Party to
the Receiving Party as confidential in connection with this Agreement is
commercially valuable, proprietary information of the Disclosing Party.
This expressly includes copyrighted material, such as functional design
documents, and retailer and other training or informational manuals, videos
and other materials. Any such copyrighted information may be used by the
other party for the SAS, NCS (Northeast Coalition of States) EBT project or
WSEA (Western States EBT Alliance) EBT project, provided that the
Disclosing Party's copyright notice be included with any such use and the
Receiving Party identify that such is "used with permission". If portions
of copyrighted information are used in a new document created by the
Receiving Party, the portions used must be identified and acknowledged as
"used with permission". Under no circumstances will any existing
information be "jointly copyrighted" without the express written agreement
of the Disclosing Party. The Receiving Party acquires no ownership rights
to such information under this Agreement. The Receiving Party further
acknowledges that such information is CONFIDENTIAL AND PROPRIETARY
INFORMATION disclosed to the Receiving Party on a confidential basis to be
used only as may be expressly permitted by the terms and conditions of this
Agreement. The Receiving Party further agrees that it shall not, before or
at any time after the termination of this Agreement, disclose or
negligently cause the disclosure of any information to any other person (to
include local, county, state or federal government), firm, organization or
employee. As against any third party, the Receiving Party agrees to
cooperate with the Disclosing Party in the event of any litigation
concerning the Disclosing Party's confidential and proprietary information
provided to the Receiving Party under this Agreement. Neither the Receiving
Party nor a State may obtain rights in CONFIDENTIAL AND PROPRIETARY
INFORMATION under the provisions of Sections 23(f) or 8(a) of this
Agreement or any provision of the Contract. Any such information in the
Receiving Party's possession at the termination of this Agreement shall be
returned or destroyed upon the Disclosing Party's request, which identifies
the information to be returned or destroyed with reasonable specificity and
the Receiving Party's right to use such information shall be terminated
subject to any State's right under its Contract.
(b) Confidential Information of Others. The parties further
acknowledge that in order for Contractor to perform the Services it may be
necessary to disclose certain computer software developed by Contractor or
CSI ("Proprietary Software") or licensed to CSI or Contractor ("Licensed
Software") and printed material in support of the Proprietary Software and
the Licensed Software. Therefore, the parties acknowledge that the
Proprietary Software (specifically including, but not limited to, the
design, architectural programming techniques, source code and documentation
thereof) and the Licensed Software is CONFIDENTIAL AND PROPRIETARY
INFORMATION AND A TRADE SECRET which may be disclosed solely for the
purpose of enabling Contractor to perform the Services under this
Agreement; that the parties shall not reveal to any third party any
information regarding the Proprietary or the Licensed Software; that the
Proprietary Software and the Licensed Software shall be disclosed by the
parties to their respective officers, agents, employees and subcontractors
only on a "need to know" basis, provided that such individuals have agreed
in writing to maintain the confidentiality of the Proprietary Software or
the Licensed Software and other confidential and proprietary information
disclosed or developed hereunder; and that the parties shall secure and
protect the Proprietary Software and the Licensed Software with the same
degree of care as would be appropriate to secure and protect their own
confidential and proprietary information. Upon its discovery of any
unauthorized possession, use or knowledge of the Proprietary Software or
the Licensed Software, the party shall immediately notify the other party
of the same. The parties shall fully cooperate, at their own expense, to
regain possession or prevent further unauthorized use of the Proprietary
Software or the Licensed Software and to obtain redress for injury caused
by any such unauthorized possession or use.
9
(c) Confidentiality of Agreement. The parties acknowledge that the
disclosure of the terms and conditions of this Agreement may be required by
a governmental agency or entity in connection with a prospective or actual
government contract. Except as so required or as otherwise required by
order of a court of competent jurisdiction, the parties agree to keep the
terms and conditions of this Agreement confidential.
(d) General Confidentiality Obligations. In addition to the foregoing
confidentiality obligations, Contractor, CSI, Citibank, Citicorp or its
subsidiaries or affiliates, their officers, agents and employees, and
subcontractors, shall treat all information which may be obtained by or
through their performance under this Agreement, as confidential information
to the extent required by the laws of the United States and the laws of the
state wherefrom such information was received, and any regulations
promulgated thereunder. Without limiting the generality of the foregoing,
the parties agree as follows:
(i) Individually identifiable information relating to any
eligible recipients or providers of government benefits shall be held
confidential and shall not be disclosed by Contractor, its officers,
agents and employees or subcontractors, to anyone other than CSI.
(ii) The use of information obtained by Contractor, in the
performance of its duties under this Agreement shall be limited to
purposes directly connected with such duties.
(iii) Contractor shall promptly advise CSI of all requests (other
than from an authorized State agency) for information described in
subsection (i).
(iv) Contractor and CSI shall be responsible for assuring that
any agreement between it and any of its officers, agents and employees
or subcontractors contains a provision which conforms to the
provisions of Section 7(d).
(e) Remedy for Unlawful Disclosure. Each party shall have all rights
at law or in equity (including injunctive relief without the necessity of
posting bond) to enforce the provisions of this Section 7 including the
right to recover reasonable attorney's fees, costs, and necessary
disbursements from the other party in addition to any other relief to which
it may be entitled.
(f) Separate Agreements. The provisions of this Section 7 shall be
construed as an agreement independent of any other provision of this
Agreement, and the provisions of this Section 7 shall be considered a
separate, irrevocable agreement surviving termination of the other terms
and provisions of this Agreement.
8. Ownership of Work Product.
(a) Contractor acknowledges that, subject to Section 7, Proprietary
Information, work prepared by Contractor out of funds authorized and
appropriated by the State or federal government in connection with this
Agreement shall be subject to the terms and conditions of the Contract.
(b) Contractor shall execute and deliver to CSI such instruments of
transfer and take such other action that CSI reasonably requests,
including, without limitation, executing and filing, at CSI's expense,
patent or copyright applications, assignments and other documents required
for the protection of a right of any State to any materials described in
the foregoing paragraph arising under the Contract.
(c) As may be required by the Contract, Contractor shall identify to
CSI all software products, programs, or material to be used in its
performance hereunder. If such identification is not required by the
Contract, all software products, programs and/or materials provided by
Contractor shall be deemed proprietary to Contractor, unless otherwise
agreed in writing. Contractor will be solely responsible for all costs and
expenses incurred in the defense of any claim by the State of ownership or
other interest in Contractor's software products, programs or materials.
10
9. Records Retention; Audit.
(a) Contractor and CSI agree (i) to maintain all books, records and
documents relating to this Agreement and the Contracts to support that the
Services are being provided and that fees earned are in accordance herewith
and the Contracts and (ii) to preserve such records during the course of
this Agreement and for a period of six (6) years following termination of
this Agreement or the Contracts, whichever is later, or for such additional
period as applicable regulations may require. Records involving matters in
litigation will be kept for a period of not less than three (3) years
following the termination of the litigation. Copies of any documents in
media other than paper (e.g. microfilm, etc.) related to this Agreement may
be substituted for the originals to the extent permitted under applicable
law and provided that legible paper copies can be reproduced within a
reasonable time following written notice.
(b) Contractor agrees to promptly make such records available for
audit upon request by representatives of a State, or other authorized State
or Federal government agency during normal business hours for the
performance of financial or performance audits, if deemed necessary. To
assure compliance with this Agreement, CSI, the State, or other authorized
State or Federal governmental agency, will at all times, upon reasonable
advance notice, except in the case of suspected fraud or other criminal
activity, have the right to enter, during normal business hours,
Contractor's premises to inspect or evaluate any work performed under this
Agreement, or to obtain any other information required to be provided by
Contractor or otherwise related to this Agreement.
(c) In addition to the foregoing, Contractor shall ensure that audits
are regularly performed, but in any event, not less than annually, by an
independent auditor and conducted in accordance with the American Institute
of Certified Public Accountants' Statement on Auditing Standards No. 70 and
shall be of a scope reasonably acceptable to CSI. Contractor shall make
such reports available to CSI within thirty (30) days of its receipt. In
the event that any audit is other than unqualified, Contractor shall submit
to CSI a plan describing what actions Contractor will undertake to correct
the situation that caused the auditor to submit a qualified report, a
timetable for correcting the situation, and a process for monitoring
compliance with the timetable.
(d) Contractor and CSI agree to promptly make relevant records
available for audit upon reasonable prior request to verify performance of
obligations hereunder.
10. Independent Contractor Relationship.
(a) Contractor shall perform all Services hereunder as an independent
contractor, and nothing contained herein shall be deemed to create any
association, partnership, joint venture, or relationship of principal and
agent or employer and employee between the parties hereto or any parents,
affiliates or subsidiaries thereof, or to provide either party with the
right, power or authority, whether express or implied, to create any such
duty or obligation on behalf of the other party. Each party agrees that it
will not hold itself out as an affiliate of or partner, joint venturer,
co-principal or co-employer of the other, or any of its parents,
subsidiaries or affiliates by reason of this Agreement and that the party
will not knowingly permit any of its employees, agents or representatives
to hold themselves out as, or claim to be, officers or employees of the
other, or any of its parents, subsidiaries or affiliates by reason of this
Agreement.
(b) Apart from the payment of the agreed-upon fees described in
Attachment B, CSI is not responsible for any other compensation, nor for
employee benefits and/or matters relating thereto respecting Contractor or
Contractor employees or Contractor's subcontractors providing Services
hereunder (including but not limited to the withholding and/or payment of
all federal, state and local income and other payroll taxes), nor for
worker's compensation, disability benefits and all such additional legal
requirements of like nature. CSI shall have no obligation to secure or
maintain applicable worker's compensation insurance or employer's liability
and disability insurance with regard to Contractor employees or
Contractor's subcontractors providing Services hereunder.
11
11. Limitation of Liability.
(a) Force Majeure. The performance by either party of any obligation
hereunder shall be excused if such failure to perform is caused by any
event or circumstance beyond such party's reasonable control or not
reasonably foreseeable, and such party will not be deemed to be in default
and will not be responsible or liable for any loss or other damages,
liquidated or unliquidated, for the delay or failure in performance under
this Agreement directly or indirectly due to any such excused performance.
Notwithstanding the foregoing, such party shall use its best efforts to
perform during the period of such event or circumstance, and in any event
shall promptly perform upon the cessation of such event or circumstance.
Notwithstanding anything herein to the contrary, this Section shall be
interpreted in a manner consistent with the provisions of any force majeure
or similar clause in the Contract.
(b) EXCLUSION OF DAMAGES. NEITHER PARTY SHALL BE LIABLE FOR ANY
INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL DAMAGES EVEN IF SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
12. Warranties and Indemnification.
(a) Contractor warrants that it will perform the Services in a
professional and workmanlike manner. Contractor further warrants that any
data, information or materials that Contractor prepares for or delivers to
CSI or State shall not infringe the trademark, copyright, patent or trade
secret rights of any third parties, except to the extent such data,
information or materials are based upon data, information or materials
supplied by CSI or the State. THERE ARE NO OTHER REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, ORAL OR WRITTEN, IN FACT, WITH RESPECT TO
THE SERVICES ARISING BY OPERATION OF LAW OR OTHERWISE.
(b) Contractor hereby certifies that neither it nor its principals is
presently debarred, suspended, proposed for debarment, declared ineligible,
or voluntarily excluded from participation in this transaction by any
Federal or State agency.
(c) Each party shall indemnify and hold the other harmless from all
claims, defense costs and judgments, and defaults under agreements with
governmental entities or agencies for the providing of benefit processing
services arising out of, or on account of, a contention that any materials
delivered by such party to the other or State (except for materials based
primarily on data or information provided by such party) infringes the
trademark, copyright, patent or trade secret rights of such third parties.
(d) Each party shall indemnify and hold the other harmless from all
claims, defense costs and judgments arising out of, or in connection with
its provision of Services under this Agreement, to the extent arising out
of, or in connection with, the acts or omissions of its employees, agents
or subcontractors, including without limitation, any claims arising from
such party's acts or omissions in the authorization of benefits issuance,
except to the extent arising out of the other party's gross negligence or
willful misconduct.
(e) Each party shall indemnify and hold the other harmless from all
material increases in costs and expenses arising out of, or in connection
with its performance under this Agreement to the extent arising out of, or
in connection with the indemnifying party's failure to promptly perform any
of its obligations hereunder when such failure to promptly perform is not
excused by reason of force majeure.
(f) CSI and Contractor each represent and warrant that it has full
right, power and authority to execute, deliver and perform its obligations
under this Agreement, and that its rights and obligations under this
Agreement are not in conflict with its rights and obligations under any
other pre-existing agreement(s) or instrument(s) nor do the parties
undertaking and acceptance of the rights and obligations herein cause the
parties to breach any obligations it may have under any other agreement(s)
or instrument(s) to which it is a party.
12
13. Insurance. Contractor shall maintain, throughout the performance of its
obligations under this Agreement, a policy of worker's compensation insurance
with coverage limits in the amount as may be required by the law of the State in
which the Services are to be performed. Contractor further agrees to maintain
general liability insurance, naming CSI as an additional party insured,
providing coverage against liability for bodily injury, death and property
damage in the amount of $1,000,000, which may arise out of or is based upon any
act or omission of Contractor or any of its employee(s), agent(s) or
subcontractor(s) under this Agreement. Upon written request, Contractor shall
promptly provide certificate(s) from its insurers indicating the amount of
insurance coverage, nature of such coverage and expiration date(s) of each
applicable policy.
14. Staff and Facilities.
(a) Contractor represents, warrants and covenants that all persons
assigned by Contractor to provide Services are and shall be at all relevant
times employees of Contractor or independent contractors who have
effectively assigned all intellectual property rights in work product to
Contractor, and that it maintain sufficient personnel to perform all
Services required hereunder in a timely and professional manner. Contractor
may substitute key Project personnel, only upon prior approval of CSI.
Prior approval may not be unreasonably withheld, and prior approval must be
consistent with the procedures for substitution in the Contract.
(b) Contractor will designate one or more managers of the Project who
will be responsible for managing and coordinating all Contractor activities
with CSI. The Contractor Project Director(s) or other Contractor designated
representative(s) will participate in the Project status meetings of the
States or other related State meetings.
(c) CSI will select a state project manager for each state after
consultation with Contractor. The state project managers will be CSI
employees or subcontractors and will be the single point of contact with
the State. Contractor shall keep the CSI state project manager advised of
ongoing Project implementation and management.
(d) CSI will provide office space, including telephone, utilities,
supplies, furniture, and equipment, and an office manager or clerical staff
in each State, if required by the Contract.
15. Right to Hire. CSI and Contractor shall not, directly or indirectly,
hire or solicit for employment, for itself or for any other affiliated or
related person or entity engaged in providing services similar to those
contemplated under this Agreement, personnel employed by the other or any
subcontractor engaged under the Contract in connection with the provision of EBT
services within one (1) year of the date on which such person's employment was
terminated for any reason; provided that, in the event that this Agreement has
been terminated as it pertains to a State for Contractor's default, CSI shall be
permitted to offer employment to any person on the staff of Contractor provided
such person was delivering services under this Agreement only for the State in
which Contractor is in default and is to perform Services for the State in which
Contractor is in default.
16. Non-Discrimination. Contractor agrees that this Agreement is subject to
applicable laws, regulations and executive orders relating to equal opportunity
and nondiscrimination in employment. Neither Contractor nor its agents(s) and/or
subcontractor(s) shall discriminate in its employment practices against any
person by reason of race, religion, color, sex or national origin or other
classification prohibited by law. Contractor agrees to comply and to cause its
agent(s) and/or subcontractors to comply with the provisions of said laws,
orders and regulations, as well as other laws, orders and regulations relating
to the employment of the handicapped, the employment of veterans, and the use of
minority business enterprises, to the extent any such laws, orders and
regulations are applicable in the performance of their work or furnishing of
Services hereunder. For the purpose of this Agreement, the provisions of such
laws, orders and regulations shall be deemed an integral part of this Agreement
to the same extent as if they were written at length herein.
17. Compliance with Applicable Law. Each party agrees that it will comply
with all applicable federal, state, county and local laws, ordinances,
regulations and codes in the performance of its obligations under this
Agreement, including the procurement of permits and certificates where required.
13
18. Non-Subornation. Each party agrees that in the performance of its
obligations under this Agreement, it will not make or offer to make any payment
to, or confer or offer any benefit upon, any employee, agent or fiduciary of any
third party, with the intent to influence the conduct of such employee, agent or
fiduciary in relation to the business of such third party, in connection with
this Agreement.
19. Publicity. During the term of this Agreement and prior to publication,
Contractor will provide CSI an opportunity to review and comment on any sales or
marketing publication or advertisement that publicizes or otherwise promotes
Contractor's delivery of services under this Agreement. CSI agrees to promptly
review such material upon submission and provide its comments to Contractor.
This Section shall not apply to any documents or oral responses provided in
response to a Request for Proposal or other solicitation issued by a government
agency or commercial concern. Notwithstanding the foregoing, Contractor shall
not use, and shall keep its employee(s), agent(s) and/or subcontractor(s) from
using, the name of CSI, Citibank, Citicorp or its subsidiaries or affiliates in
any such response, without the prior written consent of CSI other than
identification of any of them in their capacity with respect to a project and
CSI, Citibank, Citicorp and its subsidiaries and affiliates shall not use, and
shall keep its employees, agents and subcontractors from using the name of
Contractor, Deluxe Corporation or its subsidiaries or affiliates in any such
response, without the prior written consent of Contractor other than
identification of any of them in their capacity with respect to a project.
20. Notice. All notices and other communications hereunder shall be in
writing, except as herein specifically provided, and shall be deemed to have
been given when mailed by first class, registered or certified mail, return
receipt requested, postage prepaid, or recognized overnight courier, to the
intended recipient thereof at its address shown hereinabove or to such other
address as the intended recipient may specify in a notice pursuant to this
Section 20.
21. Changes.
(a) CSI may, at any time, by notice to Contractor, request changes in
the scope of this Agreement. If any such change causes an increase or
decrease in the cost of performance of this Agreement, the costs for such
changes will be negotiated with Contractor on an individual task basis. For
all change orders requested under this Section 21, the Contractor will
respond to all such requests on a formal basis, including in its response,
a recitation of the services to be provided (including all services
reasonably necessary to properly perform the services), and a pricing
proposal consistent with Contractor's commercial practices. Contractor has
the right to decline any request for change that Contractor determines in
its reasonable opinion is not technically or commercially feasible. Upon
CSI's written request, Contractor shall provide reasonable evidence that
any service proposed by Contractor pursuant to this Section is being
offered on a basis consistent with Contractor's commercial practices.
(b) In the event that a State requests a change or change order
affecting the scope of Contractor's performance of services hereunder,
Contractor shall prepare all necessary documentation, including pricing, to
support the change or change order requested by the State for approval and
submission by the CSI SAS Project Director, which approval will not be
unreasonably withheld. Prior to submission to the State, CSI and Contractor
shall agree to the change or change order, including performance and
payment terms, in accordance with this Section 21. In the event that the
change or change order is accepted by the State, the Contractor shall
perform the required services and be compensated therefor as agreed between
CSI and Contractor. Unless otherwise expressly agreed upon in writing by
Contractor, in no event shall CSI present to a State any change order
information provided by Contractor to CSI hereunder in the format provided
by Contractor to CSI or in any form, format or context that would suggest
to the State that the information was provided by Contractor.
(c) Should Federal, State or County laws or regulations, including
amendments to Title 7 of the Code of Federal Regulations, or the Quest
Operating Rules represent a change in scope of performance, the parties
will negotiate an amendment to this Agreement providing for an equitable
adjustment of the Agreement. If the parties cannot agree to an equitable
adjustment of this Agreement, then the Contractor may, at its option, and
with one hundred eighty (180) days prior notice to CSI, terminate this
Agreement.
14
(d) Nothing in this Agreement shall be deemed to require Contractor to
bear the cost of changes in scope of performance without an equitable
adjustment of this Agreement.
22. Interpretations and Disputes.
(a) Interpretations. Contractor shall promptly notify the CSI SAS
Project Director in the event of any conflict or any event that could
detrimentally affect Contractor's ability to perform as contemplated
hereby. In the absence of any State interpretation, the CSI SAS Project
Director's reasonable interpretation of the scope of work shall govern. In
the event that any portion of the Contractor's work is the subject of a
State interpretation, the State interpretation shall control, subject to
rights of appeal. CSI shall negotiate in good faith with the State on
behalf of the Contractor. Contractor may use the dispute process described
in Section 22(b)-(d) to resolve Contractor disagreements with a CSI
interpretation of the Contract.
(b) Disputes. The parties will act in good faith and in the best
interests of the Project as it is defined in the Contract in attempting to
resolve any disputes or differences of opinion that may arise during the
term of this Agreement. Should the parties not be able to resolve a
conflict through informal discussions, either party may by notice to the
other request resolution of the dispute by reference to the procedure as
follows. Within fifteen (15) business days of the notice one representative
from CSI and Contractor with management-level authority to bind the
respective parties shall meet to consider the dispute. The representatives
shall complete their consideration of the dispute within ten (10) business
days or such further time as is mutually agreed. In the event that the
dispute cannot be resolved at this level within such period, the parties
may present the dispute to a committee comprised of one representative of
each party at the next senior level for resolution within five business
days. In the event that the dispute cannot be resolved at the next senior
level in such period, the parties may seek resolution through arbitration
as hereinafter provided.
(c) Arbitration. Any controversy or claim, whether such claim sounds
in contract, tort or otherwise, arising out of or relating to this
Agreement, after good-faith negotiations in an attempt to resolve any such
controversy or claim and, if necessary reference to the higher management
of the parties as provided in subsection (b) hereof, shall at the request
of either party be resolved by a de novo review of the dispute in
accordance with Title 9 of the United States Code and the then-current
Commercial Arbitration Rules of the American Arbitration Association, by a
sole arbitrator. In the event of any inconsistency between such rules and
the arbitration provisions of this Agreement, these provisions shall
supersede such rules. Judgment upon any award rendered by the arbitrator
may be entered in any court having jurisdiction thereof. Any such
arbitration shall be conducted in Chicago, Illinois. The arbitrator shall
give effect to all statutes of limitation which would otherwise be
applicable under this Agreement. At any time prior to arbitration, the
parties may, without waiving or otherwise affecting their rights to request
arbitration as provided above, agree to submit any controversy to
mediation. Such mediation shall be governed by the then-current American
Arbitration Association's Commercial Mediation Rules. All expenses and
American Arbitration Association fees for any arbitration or mediation
shall be borne by the parties equally. Each party shall bear the expenses
of its own counsel, experts, witnesses, and preparation and presentation of
proof. Notwithstanding the foregoing, the arbitrator, at his sole and
absolute discretion, shall have the authority to award the prevailing party
expenses and reasonable attorneys' fees. In any and all arbitration
proceedings, the arbitrator shall not have the power or authority to award
punitive damages to any party.
(d) Appeal of Dispute with State. Disputes between Contractor and the
State will be resolved, to the extent permitted thereby, by the disputes
process in the Contract. If State law or the Contract preclude Contractor
from filing a dispute directly with the State, CSI will file such dispute
in CSI's name on behalf of Contractor without cost to CSI.
23. Termination.
(a) Termination for Convenience of the State. In the event that a
State elects to terminate at its convenience or for reasons other than
cause permitted by the Contract under the provisions therein, CSI and
Contractor shall determine Contractor's reasonable costs resulting from
such termination. CSI shall
15
seek to ensure a complete recovery for Contractor of Contractor's
reasonable costs or other entitlements under the provisions of the
Contract; provided, however, that in the event that the amount recovered
from the State is less than that estimated by CSI and Contractor, then CSI
and Contractor shall negotiate an equitable allocation of the amount paid
by the State for termination.
(b) Termination for Default: Contractor. CSI may terminate this
Agreement as it pertains to a State if at any time Contractor defaults in
the performance of the Services for such State and fails to remedy such
default as provided hereunder. In the event that the State notifies CSI
that CSI is in default under the Contract, and CSI believes that such
default is attributable to Contractor's performance, CSI shall provide
written notice to Contractor specifying in reasonable detail why the
Services performed by Contractor are not satisfactory to CSI. Contractor
shall have eighty per cent (80%) of the cure period provided to CSI under
the Contract to effect a cure in which to remedy Contractor's performance.
In the event that the default is such that it cannot reasonably be cured
within the set period contained in the Contract and the State allows CSI a
reasonable period in which to cure such default so long as it promptly
commences and diligently proceeds to effect such cure, then so long as
Contractor promptly commences and diligently proceeds to effect such cure,
then this Agreement shall continue in full force and effect. If Contractor
disputes that it is in default, or disputes that it has not cured its
performance within the period allotted, such dispute may be referred for
resolution in accordance with the procedures in Section 22. CSI may
terminate the Agreement as it pertains to the State only after Contractor
and CSI have exhausted their administrative remedies within the State and
as provided by Section 22 hereof, and the State has determined that
Contractor and CSI are in default. The Agreement shall remain in effect for
Contractor to provide the Services to any State in which Contractor is not
in default. Nothing in this Agreement shall preclude Contractor from
pursuing judicial or other legal remedies available to it under State or
federal law.
(c) Termination for Change in Control of Contractor. CSI may also
terminate this Agreement for cause upon the acquisition of a controlling
interest in the Contractor by an unrelated third party or the sale or
transfer of the assets to an unrelated third party of Contractor's business
necessary to provide the Services hereunder and (i) the acquirer thereof is
unable to provide CSI with reasonably satisfactory assurances of its
financial, professional and management ability to continue performance of
this Agreement in a manner equivalent to or better than the performance of
Contractor prior to the date of the intended change in control, or (ii) the
acquirer is a parent, subsidiary or affiliate of any of the following:
GTech Corporation or Transactive Corporation. In the event of any such
acquisition, sale or transfer and CSI elects to terminate this Agreement,
CSI shall provide not less than one hundred and eighty (180) days prior
written notice of such termination to Contractor. Prior to the effective
date of such termination, Contractor shall assist in the transition of
delivery of Services from Contractor to CSI to the extent and in the manner
as agreed by the parties prior to the commencement of such transition, but
in any event Contractor shall comply with subsection 23(f) hereof.
Contractor shall be compensated for such transition services at its actual
and reasonable costs for providing such transition services, as agreed by
the parties prior to the commencement of any such service.
(d) Termination for Default: CSI. In the event that CSI fails to
perform its obligations under this Agreement and such failure materially
affects Contractor's ability to comply with its performance obligations
hereunder, Contractor may declare CSI in default of this Agreement.
Contractor shall provide written notice to CSI specifying the default in
reasonable detail and CSI shall have thirty (30) days in which to effect a
cure of its default other than for failure to make a payment hereunder
(which must be cured within ten (10) days); provided that if a cure cannot
reasonably be effected within such thirty (30) day period, then so long as
CSI promptly commences, and diligently proceeds, to effect such cure, then
this Agreement shall continue in full force and effect. If CSI fails to
cure a default within a reasonable period of time, Contractor may terminate
this Agreement on thirty (30) days' written notice to CSI. In addition to
the foregoing, a termination of the Contract by the State for reason of
default by CSI through no fault of Contractor shall constitute a material
breach of this Agreement. In the event of a breach of this Agreement by CSI
that does not give rise to termination, Contractor shall be entitled to
claim indemnification pursuant to Section 12 hereof.
16
(e) Effect of Termination by a State. Termination of the Contract by
any State for other than default will not terminate this Agreement.
Termination of the Contract by any State for reason of default by
Contractor will not terminate this Agreement as to any other State except
as hereinafter provided. In the event that a State terminates its Contract
for other than default, Contractor will continue to perform the Services
for the remainder of the States. In the event of the termination of a
Contract by a State for reason of default by Contractor, CSI may terminate
this Agreement for cause upon its determination that Contractor is unable
to provide reasonably satisfactory assurances of its financial,
professional and management ability to continue performance of this
Agreement in remaining states in a manner substantially in accordance with
the terms of this Agreement.
(f) Return of State Materials. To the extent required by the Contract,
and subject to Sections 7 and 8 of this Agreement, upon expiration or
termination of this Agreement, all unfinished and unprocessable work,
together with all finished or unfinished original documents or copies,
reports or other materials, prepared by Contractor under this Agreement in
performance of the Contractor's obligations arising under the Contract
shall, at the option of CSI or the States, become CSI's or a State's
exclusive property, whether or not in either of their possession, free from
any claim or retention of right thereto on the part of Contractor, except
as specifically provided herein, and shall be promptly delivered by
Contractor to the requesting party. Each party shall promptly return to the
other all of its property not covered by the foregoing.
24. Miscellaneous Provisions.
(a) Complete Agreement. This Agreement, together with any attachments
hereto, constitutes the entire agreement between the parties with respect
to the subject matter hereof and supersedes in all respects all prior
proposals, negotiations, conversations, discussions and agreements between
the parties, including but not limited to that certain letter agreement
between the parties hereto regarding EBT Support Services, dated August 16,
1995 and accepted by Contractor on August 23, 1995. Each Attachment revised
and attached to the terms of this Agreement subsequent to the Execution
Date shall supersede the existing versions of such Attachment and become a
part of this Agreement.
(b) Further Assurances. Contractor and CSI each acknowledge that this
Agreement may be subject to the review and approval of the State in
accordance with the Contract. Contractor and CSI shall negotiate in good
faith any changes in this Agreement that may be required by the State under
the approval provision of the Contract or necessitated by a conflict
between the terms of this Agreement and the Contract. In addition, this
Agreement shall be subject to any order, decree or similar directive issued
by any court of competent jurisdiction, or any agreement among the parties
and any agency or instrumentality of the federal or any state government to
which the parties are bound, and the failure of either party to comply with
any provision of the Agreement due to compliance with any such order,
decree or agreement shall not constitute a breach of this Agreement,
provided that should a party to this Agreement not be a party to such
order, decree or agreement, the party subject to such order, decree or
agreement shall notify the other party of such order, decree or agreement
as soon as practicable (including advising the other party prior to the
entry of an order or decree or execution of an agreement of the substance
of the proposed order, decree or agreement).
(c) Modification. No modification, waiver or amendment of any term or
condition of this Agreement shall be effective unless and until it shall be
reduced to writing and signed by both of the parties hereto or their legal
representatives.
(d) Assignment. This Agreement may not be assigned in whole or in
part, by either party without prior written consent of the other, which
consent may not be unreasonably withheld consistent with the standards set
forth in Section 23(c), and the State, if so provided in the Contract. To
the extent that State approval is required, consent by the State shall be
deemed approval by CSI. CSI hereby reserves the right to assign this
Agreement to any of its subsidiaries or affiliates. Contractor hereby
reserves the right to assign this Agreement to its parent, a subsidiary or
an affiliate as a part of a general assignment of the assets which comprise
Contractor's government benefits business and with the consent or approval
of such States as may be required.
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(e) Severability . If any term or provision of this Agreement should
be declared invalid by a court of competent jurisdiction, the remaining
terms and provisions of this Agreement shall be unimpaired.
(f) Waiver. Failure by either party at any time to require performance
by the other party or to claim a breach of any term of this Agreement will
not be construed as a waiver of any right under this Agreement, will not
affect any subsequent breach, will not affect the effectiveness of this
Agreement or any part thereof, and will not prejudice either party as
regards any subsequent action.
(g) Survival of Provisions. The terms and provisions of this Agreement
that by their sense and context are intended to survive the performance or
termination of this Agreement shall so survive, including without
limitation the making of any and all payments due hereunder. As provided in
Section 23, termination of the Contract by the State does not terminate the
terms and provisions of this Agreement.
(h) Section Headings. Section headings are for convenience only and
shall not be considered a part of the Terms and Conditions of this
Agreement.
(i) References to States and Contract. Any reference to "State" shall
mean the State of Alabama, Arkansas, Kentucky, Missouri, or Tennessee
acting in its individual capacity. Any reference to "States" shall mean any
or all of the five States of Kentucky, Missouri, Alabama, Tennessee and
Arkansas (the "Five States"), as the context may reasonably require. Any
reference to a Contact shall mean any Contract between one of the Five
States and Citibank.
(j) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
(k) Effective Date. This Agreement shall be effective upon its
acceptance and due execution and delivery by Contractor and CSI.
IN WITNESS WHEREOF, the parties hereto have executed this EBT Support
Services Agreement on the day and year shown below in each instance.
DELUXE GOVERNMENT SERVICES, A CITICORP SERVICES INC.
DIVISION OF EFUNDS CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxx X. XxxXxxxxx
------------------------------------- ----------------------------------
(Authorized Signature) (Authorized Signature)
Printed Printed
Name: Xxxxxxxx X. Xxxxxx Name: Xxxx X. XxxXxxxxx
----------------------------------- --------------------------------
Title: Vice Chairman, Deluxe Corporation Title: President
--------------------------------- -------------------------------
Date: April 17, 2000 Date: April 18, 2000
--------------------------------- --------------------------------
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