MASTER RESOURCE MANAGEMENT SERVICES AGREEMENT between Precision Computer Systems, Inc. Sioux Falls, SD 57106-4213 and First Security Bank of Lexington, Inc. Lexington, KY 40507 Date: May 27, 2005
EXHIBIT
10.8
[Missing
Graphic Reference]
between
Precision
Computer Systems, Inc.
0000
Xxxxx Xxxxxxxxxx Xxxxx
Xxxxx
Xxxxx, XX 00000-0000
and
First
Security Bank of Lexington, Inc.
000
Xxxx
Xxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Date:
May
27, 2005
THIS
MASTER RESOURCE MANAGEMENT SERVICES AGREEMENT dated as of May 27, 2005
("Agreement") between Precision Computer Systems, Inc., a South Dakota
corporation ("PCS"), and First Security Bank of Lexington, Inc., a Kentucky
banking corporation ("Customer").
PCS
and
Customer hereby agree as follows:
1.
Term.
The
term of this Agreement shall be as set forth at the end of this Agreement.
This
Agreement shall be effective on the day services are first provided to Customer
by PCS ("Effective Date"). Effective Date shall be defined as the date that
the
Client’s Deposit and Loan accounts are updated on the PCS System. In the event
Customer elects to terminate this Agreement under circumstances not involving
a
termination of the License Agreement, then, upon payment to PCS by Customer
of a
License Conversion Fee, as reasonably determined by PCS, PCS shall deliver
to
Customer the PCS software required for Customer to conduct its processing
on a
CPU owned or leased by Customer and of a size specified in the License
Agreement.
2.
Services.
(a)
Services
Generally.
PCS,
itself and through its affiliates, agrees to provide Customer, and Customer
agrees to obtain from PCS, services ("Services") and products ("Products")
(collectively, "PCS Services") described in the attached Exhibits and
Attachments.
The
Exhibits and Attachments hereto set forth specific terms and conditions
applicable to the Services and/or Products, and, where applicable, the PCS
affiliate so performing. Customer may select additional services and products
from time to time by incorporating an appropriate Exhibit or Attachment to
this
Agreement.
(b)
Implementation
Services.
PCS
will provide services (i) to convert Customer's existing applicable data
and/or
information to the PCS Services; and/or (ii) to implement the PCS Services.
These activities are referred to as "Implementation Services". Customer agrees
to cooperate with PCS in connection with PCS's provision of Implementation
Services and to provide all necessary information and assistance to facilitate
the conversion and/or implementation. Customer is responsible for all reasonable
out-of-pocket expenses associated with Implementation Services. PCS will
provide
Implementation Services as required in connection with PCS
Services.
(c)
Training
Services.
PCS
shall provide training, training aids, user manuals, and other documentation
for
Customer's use as PCS finds necessary in the exercise of its reasonable judgment
to enable Customer personnel to become familiar with PCS Services. If requested
by Customer, classroom training in the use and operation of PCS Services
will be
provided at a training facility designated by PCS. All such training aids
and
manuals remain PCS's property. Customer will be responsible to its own employees
for salaries and any costs of travel, room and board for such
training.
(d)
Third
Party Services and Products.
Customer and PCS acknowledge that certain existing and future products and
services which are required for the performance of the existing and future
services are being or may be provided by Third Parties who will contract
directly with Customer. PCS shall have no liability to Customer for products,
services or information supplied by such Third Parties in conjunction with
the
services.
(e)
Hours
of Operation.
PCS
shall make the services available to Customer between the hours of 7:00 a.m.
and
7:00 p.m. CST on each week day (Monday - Friday) in which national or state
banks are required to be open for business at Customer’s place of business. In
addition, PCS shall make the services available to Customer between the hours
of
7:00 a.m. and 4:00 p.m. CST on Saturdays in which national or state banks
are
traditionally open for business at Customer’s place of business.
3.
Fees
for PCS Services.
(a)
General.
Customer agrees to pay PCS:
(i)
actual fees for PCS Services for the previous month as specified in the Exhibits
and Attachments;
(ii)
reasonable out-of-pocket charges for the month payable by PCS for the account
of
Customer; and
(iii)
Taxes (as defined below) thereon (collectively, "Fees").
Fees
may
be increased from time to time as set forth in the Exhibits and Attachments.
Upon notification to and acceptance by Customer pursuant to Section 16(f)
herein, PCS may increase its fees in excess of amounts listed in the Exhibits
and Attachments in the event that PCS implements major system enhancements
to
comply with changes in law, government regulation, or industry
practices.
(b)
Additional
Charges.
Fees
for out-of-pocket expenses, such as telephone, microfiche, courier, and other
charges incurred by PCS for goods or services obtained by PCS on Customer's
behalf, shall be billed to Customer at cost. Such out-of-pocket expenses
may be
changed from time to time upon notification of a fee change from an unaffiliated
vendor/provider (in an amount equal to the subject fee change). The Fees
do not
include, and Customer shall be responsible for, furnishing transportation
or
transmission of information between PCS's resource management division(s)
and
Customer's site(s).
(c)
Taxes.
PCS
shall add to each invoice any sales, use, excise, value added, and like taxes
and duties that are levied by any taxing authority relating to the PCS Services
("Taxes"). In no event shall "Taxes" include Federal, state or local taxes
based
upon PCS's net income.
(d)
Payment
Terms.
Fees
are due and payable monthly upon receipt of invoice. In the event any amounts
due remain unpaid beyond the 30th
day
after payment is due, Customer shall pay a late charge of 1.5% per month.
Customer agrees that it shall neither make nor assert any right of deduction
or
set-off from Fees on invoices submitted by PCS for PCS Services.
4.
Access
to PCS Services.
(a)
Procedures.
Each of
PCS and Customer agrees to comply in all material respects with applicable
regulatory requirements and procedures for use of Services established by
PCS.
(b)
Changes.
PCS
continually reviews and modifies PCS systems used in the delivery of Services
(the "PCS System") to improve service and comply with government regulations,
if
any, applicable to the data and information utilized in providing Services.
PCS
reserves the right to make changes (in the exercise of its reasonable judgment
in light of said governmental regulations) in Services, including but not
limited to operating procedures, type of equipment or software resident at,
and
the location of PCS's facility. PCS will notify Customer of any material
change
that affects Customer's normal operating procedures, reporting, or service
costs
prior to implementation of such change.
(c)
Communications
Lines.
PCS
shall order the installation of appropriate communication lines and equipment
to
facilitate Customer's access to Services. Customer
understands and agrees to pay charges relating to the installation and use
of
such lines (if any) and equipment as set forth in the Exhibits and Attachments,
currently
Attachment 4, subject to changes by the provider.
(d)
Work
Stations and Related Equipment.
Customer shall obtain necessary and sufficient work stations and other
equipment, approved by PCS and compatible with the PCS System, to transmit
and
receive data and information between Customer's location(s), PCS's facilities,
and/or other necessary location(s). PCS and Customer may mutually agree to
change the type(s) of work station and equipment used by Customer.
5.
Customer
Obligations.
(a)
Input.
Customer shall be solely responsible for the input, transmission, or delivery
to
and from PCS of all information and data required by PCS to perform Services
unless Customer has retained PCS to handle such responsibilities, as
specifically set forth in the Exhibits and Attachments. The information and
data
shall be provided in a format and manner approved by PCS. Customer will provide
at its own expense or procure from PCS all equipment, computer software,
communication lines (currently Attachment 4, subject to changes by the
provider) and
interface devices required to access the PCS System. If Customer has elected
to
provide such items itself, PCS shall provide Customer with a list of compatible
equipment and software. Customer agrees to pay PCS's standard fee for
recertification of the PCS System resulting therefrom.
(b)
Customer
Personnel.
Customer shall designate appropriate Customer personnel for training in the
use
of the PCS System, shall supply PCS with reasonable access to Customer's
site
during normal business hours for Implementation Services and shall cooperate
with PCS personnel in their performance of Services.
(c)
Use
of
PCS System.
Customer shall (i) comply with any operating instructions on the use of the
PCS
System provided by PCS; (ii) review all reports furnished by PCS for accuracy;
and (iii) work with PCS to reconcile any out of balance conditions or
discrepancies. Customer shall determine and be responsible for the authenticity
and accuracy of all information and data submitted to PCS.
(d) Contact
Representative.
Customer will designate a qualified individual (the “Representative”) who will
handle all relations with PCS. PCS will train the Representative in the use
of
PCS’s data processing system(s). Customer shall pay such fees for training as
are set forth in this Agreement and shall reimburse PCS for all reasonable
costs
incurred by PCS in connection with such training.
(e) Obligation
to Manage Accounts.
If
applicable, Customer agrees that it will periodically monitor its closed
accounts and take all reasonable steps in order to ensure that closed accounts
are deleted from the system as appropriate. In the event the number of
Customer’s closed accounts ever exceeds the number of open accounts, PCS will
impose additional charges for the excess closed accounts.
6.
Ownership
and Confidentiality.
(a)
Definition.
(i)
Customer
Information.
"Customer Information" means: (A) confidential plans, customer lists,
information, and other proprietary material of Customer that is marked with
a
restrictive legend, or if not so marked with such legend or is disclosed
orally,
is identified as confidential and proprietary at the time of disclosure (and
written confirmation thereof is promptly provided to PCS); and (B) any
information and data concerning the business and financial records of Customer's
customers prepared by or for PCS, or used in any way by PCS in connection
with
the provision of PCS Services (whether or not any such information is marked
with a restrictive legend).
(ii) PCS
Information.
"PCS
Information" means: (A) confidential plans, information, research, development,
trade secrets, business affairs (including that of any PCS Customer, supplier,
or affiliate), and other proprietary material of PCS that is marked with
a
restrictive legend, or if not so marked with such legend or is disclosed
orally,
is identified as confidential and proprietary at the time of disclosure (and
written confirmation thereof is promptly provided to Customer); and (B) PCS's
proprietary computer programs, including custom software modifications, software
documentation and training aids, and all data, code, techniques, algorithms,
methods, logic, architecture, and designs embodied or incorporated therein
(whether or not any such information is marked with a restrictive
legend).
(iii)
Information.
"Information" means Customer Information and PCS Information. No obligation
of
confidentiality applies to any Information that the receiving party
("Recipient") (A) already possesses without obligation of confidentiality;
(B)
develops independently; or (C) rightfully receives without obligation of
confidentiality from a third party. No obligation of confidentiality applies
to
any Information that is, or becomes, publicly available without breach of
this
Agreement.
(b)
Obligations.
Subject
to Section 6(a)(iii) above, Recipient agrees to hold as confidential all
Information it receives from the disclosing party ("Discloser"). All Information
shall remain the property of Discloser or its suppliers and licensors.
Information will be returned to Discloser at the termination or expiration
of
this Agreement. PCS specifically agrees that it will not use any non-public
personal information about Customer's customers in any manner prohibited
by
Title V of the Xxxxx-Xxxxx-Xxxxxx Act. Recipient will use the same care and
discretion to avoid disclosure of Information as it uses with its own similar
information that it does not wish disclosed, but in no event less than a
reasonable standard of care. Recipient may only use Information in accordance
with the purpose of this Agreement. Recipient may disclose Information to
(i)
employees and employees of affiliates who have a need to know and (ii) any
other
party with Discloser's written consent. Before disclosure to any of the above
parties, Recipient will have a written agreement with such party sufficient
to
require that party to treat Information in accordance with this Agreement.
Recipient may disclose Information to the extent required by law. However,
Recipient agrees to give Discloser prompt notice so that it may seek a
protective order. The provisions of this sub-section survive any termination
or
expiration of this Agreement.
(c)
Residuals.
Nothing
contained in this Agreement shall restrict Recipient from the use of any
ideas,
concepts, know-how, or techniques contained in Information that are related
to
Recipient's business activities ("Residuals"), provided that in so doing,
Recipient does not breach its obligations under this Section. However, this
does
not give Recipient the right to disclose the Residuals except as set forth
elsewhere in this Agreement.
(d)
PCS
System.
The PCS
System contains information and computer software that are proprietary and
confidential information of PCS, its suppliers, and licensors. Customer agrees
not to attempt to circumvent the devices employed by PCS to prevent unauthorized
access thereto, including, but not limited to, alterations, decompiling,
disassembling, modifications, and reverse engineering thereof.
(e)
Information
Security.
PCS
shall implement and maintain appropriate measures designed to meet the
objectives of the guidelines establishing standards for safeguarding non-public
Customer client information as adopted by any federal regulatory agencies
having
jurisdiction over Customer's affairs.
(f)
Confidentiality
of this Agreement.
PCS and
Customer agree to keep confidential the prices, terms and conditions of this
Agreement, without disclosure to third parties.
7.
Regulatory
Agencies, Regulations and Legal Requirements.
(a)
Customer
Files.
Records
maintained and produced for Customer ("Customer Files") may be subject to
examination by such Federal, State, or other governmental regulatory agencies
as
may have jurisdiction over Customer's business to the same extent as such
records would be subject if maintained by Customer on its own premises. Customer
agrees that PCS is authorized to give all reports, summaries, or information
contained in or derived from the data or information in PCS's possession
relating to Customer when formally requested to do so by an authorized
regulatory or government agency. Customer will pay any reasonable fees incurred
for producing such information. PCS agrees to notify Customer promptly of
any
such regulatory request if authorized to do so.
(b)
Compliance
with Regulatory Requirements.
Customer agrees to comply in all material respects with applicable regulatory
and legal requirements, including without limitation:
(i)
submitting a copy of this Agreement to the appropriate regulatory agencies
prior
to the date Services commence;
(ii)
providing adequate notice to the appropriate regulatory agencies of the
termination of this Agreement or any material changes in Services;
(iii)
retaining records of its accounts as required by regulatory
authorities;
(iv)
obtaining and maintaining, at its own expense, any Fidelity Bond required
by any
regulatory or governmental agency; and
(v)
maintaining, at its own expense, such casualty or business interruption
insurance coverage for loss of records from fire, disaster, or other causes,
and
taking such precautions regarding the same, as may be required by regulatory
authorities.
8.
Warranties.
(a)
PCS
Warranties.
PCS
represents and warrants that:
(i)(A)
Services will conform to the specifications set forth in the Exhibits and
Attachments; (B) PCS will perform Customer's work accurately and in a
workmanlike manner in accord with industry standards provided that Customer
supplies accurate data and information, and follows in all material respects
the
procedures described in all PCS documentation, notices, and advisorys; (C)
PCS
personnel will exercise due care in provision of Services; and (D) the PCS
System will comply in all material respects with all applicable Federal
regulations governing Services. In the event of an error or other default
caused
by PCS personnel, systems, or equipment, PCS shall correct the data or
information and/or reprocess the affected item or report at no additional
cost
to Customer. Customer agrees to supply PCS with a written request for correction
of the error within three business days after Customer's receipt of the error
work containing the error. Work reprocessed due to errors in data supplied
by
Customer, on Customer's behalf by a third party, or by Customer's failure
to
follow procedures set forth by PCS shall be billed to Customer at PCS's then
current time and material rates; and (ii) it owns or has a license to furnish
all software comprising the PCS System. PCS shall indemnify Customer and
hold it
harmless against any claim or action that alleges that the PCS System use
infringes a United States patent, copyright, or other proprietary right of
a
third party. Customer agrees to notify PCS promptly of any such claim and
grants
PCS the sole right to control the defense and disposition of all such claims.
Customer shall provide PCS with reasonable cooperation and assistance in
the
defense of any such claim.
THE
WARRANTIES STATED HEREIN ARE LIMITED WARRANTIES AND ARE THE ONLY WARRANTIES
MADE
BY PCS. CUSTOMER AGREES TO ASSUME THE ENTIRE RISK OF USING THE SERVICES.
PCS
DOES NOT MAKE, AND CUSTOMER HEREBY EXPRESSLY WAIVES, ALL OTHER WARRANTIES,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
THE STATED EXPRESS WARRANTIES ARE IN LIEU OF ALL LIABILITIES OR OBLIGATIONS
OF
PCS ARISING OUT OF OR IN CONNECTION WITH THE DELIVERY, USE, OR PERFORMANCE
OF
PCS SERVICES.
(b)
Customer
Warranties.
Customer represents and warrants that: (i) no contractual obligations exist
that
would prevent Customer from entering into this Agreement; (ii) it has complied
in all material respects with all applicable regulatory requirements in
connection with entering into this Agreement; and (iii) it has requisite
authority to execute, deliver, and perform this Agreement. Customer shall
indemnify and hold harmless PCS, its officers, directors, employees, and
affiliates against any claims or actions arising out of the use by Customer
of
the PCS System in a manner other than that provided in this Agreement; and
any
and all claims by third parties through Customer arising out of the performance
and non-performance of PCS Services by PCS..
9.
Limitation
of Liability.
(a)
General
IN NO
EVENT SHALL PCS BE LIABLE FOR LOSS OF GOODWILL, OR FOR SPECIAL, INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING FROM CUSTOMER'S USE OF PCS
SERVICES, OR PCS'S SUPPLY OF EQUIPMENT OR SOFTWARE, REGARDLESS OF WHETHER
SUCH
CLAIM ARISES IN TORT OR IN CONTRACT. CUSTOMER MAY NOT ASSERT ANY CLAIM AGAINST
PCS MORE THAN 2 YEARS AFTER SUCH CLAIM ACCRUED. PCS'S AGGREGATE LIABILITY
FOR
ANY PARTICULAR CAUSE OF ACTION RELATING TO THIS AGREEMENT SHALL BE LIMITED
TO
THE TOTAL FEES PAYABLE BY CUSTOMER TO PCS FOR THE PCS SERVICE RESULTING IN
SUCH
LIABILITY IN THE 2 MONTH PERIOD PRECEDING THE DATE THE CLAIM ACCRUED. PCS'S
AGGREGATE LIABILITY FOR A DEFAULT RELATING TO THIRD PARTY EQUIPMENT OR THIRD
PARTY SOFTWARE, OBTAINED FROM OR THROUGH PCS, SHALL BE LIMITED TO THE AMOUNT
PAID BY CUSTOMER TO PCS FOR SUCH THIRD PARTY EQUIPMENT OR THIRD PARTY SOFTWARE.
(b)
Lost
Records.
If
Customer’s records or other data submitted for processing are lost or damaged as
a result of any failure by PCS, its employees, or agents to exercise reasonable
care to prevent such loss or damage, PCS’s liability on account of such loss or
damage shall not exceed the reasonable cost of reproducing such records or
data
from exact duplicates thereof in Customer’s possession.
(c) Backup
Records.
PCS
shall maintain back-up records and media reasonably necessary to reconstruct
at
least three (3) days of Customer’s data files. Such back-up records shall be
maintained in a fireproof vault located off premises.
10.
Disaster
Recovery.
(a)
General.
PCS
maintains a disaster recovery plan ("Disaster Recovery Plan") for each Service.
A "Disaster" shall mean any unplanned interruption of the operations of or
inaccessibility to PCS's facility in which PCS, using reasonable judgment,
requires relocation of processing to a recovery location. PCS shall notify
Customer as soon as possible after PCS deems a service outage to be a Disaster.
PCS shall move the processing of Customer's standard services to a recovery
location as expeditiously as possible and shall coordinate the cut-over to
back-up telecommunication facilities with the appropriate carriers. Customer
shall maintain adequate records of all transactions during the period of
service
interruption and shall have personnel available to assist PCS in implementing
the switchover to the recovery location. During a Disaster, optional or
on-request services shall be provided by PCS only to the extent adequate
capacity exists at the recovery location and only after stabilizing the
provision of base services.
(b)
Communications.
PCS
shall work with Customer to establish a plan for alternative communications
in
the event of a Disaster.
(c)
Disaster
Recovery Test.
PCS
shall test the Disaster Recovery Plan on at least an annual basis. Customer
agrees to participate in and assist PCS with such test, if requested by PCS.
Upon Customer's request, test results will be made available to Customer's
management, regulators, auditors, and insurance underwriters.
(d)
Customer
Plans.
PCS
agrees to release information necessary to allow Customer's development of
a
disaster recovery plan that operates in concert with the Disaster Recovery
Plan.
(e)
No
Warranty.
Customer understands and agrees that the Disaster Recovery Plan is designed
to
minimize, but not eliminate, risks associated with a Disaster affecting PCS's
facilities. PCS does not warrant that PCS Services will be uninterrupted
or
error free in the event of a Disaster; no performance standards shall be
applicable for the duration of a Disaster. Customer maintains responsibility
for
adopting a disaster recovery plan relating to disasters affecting Customer's
facilities and for securing business interruption insurance or other insurance
necessary for Customer's protection.
11.
Termination.
(a)
Material
Breach.
Except
as provided elsewhere in this Section 11, either party may terminate this
Agreement in the event of a material breach by the other party not cured
within
90 days following written notice stating, with particularity and in reasonable
detail, the nature of the claimed breach.
(b)
Failure
to Pay.
In the
event any invoice remains unpaid by Customer 45
days
after due, or Customer deconverts any material amount of data or information
from the PCS System without prior written consent of PCS, PCS, at its sole
option, may terminate this Agreement and/or Customer's access to and use
of PCS
Services. Any invoice submitted by PCS shall be deemed correct unless Customer
provides written notice to PCS within 15 days of Customer’s receipt of any such
invoice date specifying the nature of the disagreement.
(c)
Remedies.
Remedies contained in this Section 11 are cumulative and are in addition
to the
other rights and remedies available to any party under this Agreement, by
law or
otherwise.
(d)
Defaults.
If:
(i)
Customer defaults in the payment of any sum of money due in Section
11(b);
(ii)
either party breaches this Agreement in any material respect or otherwise
defaults in any material respect in the performance of any of its obligations
hereunder; or
(iii)
either party commits an act of bankruptcy or becomes the subject of any
proceeding under the Bankruptcy Code or becomes insolvent or if any substantial
part of its property becomes subject to any levy, seizure, assignment,
application, or sale for or by any creditor or governmental agency;
then,
in
any such event, the non-defaulting party may, upon written notice, terminate
this Agreement. In the event such terminating party is PCS, PCS shall be
entitled to recover from Customer as liquidated damages an amount equal to
the
present value of all payments remaining to be made hereunder for the remainder
of the term of this Agreement. For purposes of the preceding sentence, present
value shall be computed using the "prime" rate (as published in The Wall
Street Journal)
in
effect at the date of termination and "all payments remaining to be made"
shall
be calculated based on the average bills for the 3 months immediately preceding
the date of termination. Each party agrees to reimburse the non-defaulting
party
for any expenses it may incur, including reasonable attorneys' fees, in taking
any of the foregoing actions.
(e)
Convenience.
Customer may terminate this Agreement by paying a termination fee based on
the
remaining unused portion of the term of this Agreement, such fee to be equal
to
eighty percent (80%) of the amount determined by multiplying Customer's average
monthly processing fees incurred during the previous six (6) months xxxxxxxx,
multiplied by the number of months remaining in the term of this Agreement,
plus
third party costs existing on PCS's books on the date of termination. Customer
understands and agrees that PCS losses incurred as a result of early termination
of the Agreement would be difficult or impossible to calculate as of the
effective date of termination since they will vary based on, among other
things,
the number of Customers using the PCS System on the date the Agreement
terminates. Accordingly, the amount set forth in the first sentence of this
subsection represents Customer's agreement to pay and PCS's agreement to
accept
as liquidated damages (and not as a penalty) such amount for any such Customer
termination. Notwithstanding the foregoing if Client elects to terminate
this
Agreement prior to the Effective Date, Client agrees to pay a fee of $50,000
and
all costs and fees incurred by PCS while performing Implementation Services
as
defined in Attachment 3.
(f)
Return
of Data Files.
Upon
expiration or termination of this Agreement, PCS shall furnish to Customer
such
copies of Customer Files as Customer may request in a PCS standard format
along
with such information and assistance as is reasonable and customary to enable
Customer to deconvert from the PCS System, provided,
however,
that
Customer consents and agrees and authorizes PCS to retain Customer Files
until
(i) PCS is paid in full for (A) all Services provided through the date such
Customer Files are returned to Customer; and (B) any and all other amounts
that
are due or will become due under this Agreement; (ii) PCS is paid its then
standard rates for the services necessary to return such Customer Files;
(iii)
if this Agreement is being terminated, PCS is paid any applicable termination
fee pursuant to subsection (d) or (e) above; and (iv) Customer has returned
to
PCS all PCS Information. Unless directed by Customer in writing to the contrary,
PCS shall be permitted to destroy Customer Files any time after 30 days from
the
final use of Customer Files for processing.
(g)
Miscellaneous.
Customer understands and agrees that Customer is responsible for the
de-installation and return shipping of any PCS-owned equipment located on
Customer's premises.
12.
Dispute
Resolution.
(a)
General.
Except
with respect to disputes arising from a misappropriation or misuse of either
party's proprietary rights, any dispute or controversy arising out of this
Agreement, or its interpretation, shall be submitted to and resolved exclusively
by arbitration under the rules then prevailing of the American Arbitration
Association, upon written notice of demand for arbitration by the party seeking
arbitration, setting forth the specifics of the matter in controversy or
the
claim being made. The arbitration shall be heard before an arbitrator mutually
agreeable to the parties; provided, that if the parties cannot agree on the
choice of arbitrator within 10 days after the first party seeking arbitration
has given written notice, then the arbitration shall be heard by 3 arbitrators,
1 chosen by each party, and the third chosen by those 2 arbitrators. The
arbitrators will be selected from a panel of persons having experience with
and
knowledge of information technology and at least 1 of the arbitrators selected
will be an attorney. Discovery shall not be permitted. A hearing on the merits
of all claims for which arbitration is sought by either party shall be commenced
not later than 60 days from the date demand for arbitration is made by the
first
party seeking arbitration. The arbitrator(s) must render a decision within
10
days after the conclusion of such hearing. Any award in such arbitration
shall
be final and binding upon the parties and the judgment thereon may be entered
in
any court of competent jurisdiction.
(b)
Applicable
Law.
The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
§§1-16 and the Federal Rules of Evidence. The arbitrators shall apply the
substantive law of the State of South Dakota, without reference to provisions
relating to conflict of laws. The arbitrators shall not have the power to
alter,
modify, amend, add to, or subtract from any term or provision of this Agreement,
nor to rule upon or grant any extension, renewal, or continuance of this
Agreement. The arbitrators shall have the authority to grant any legal remedy
available had the parties submitted the dispute to a judicial
proceeding.
(c)
Situs.
If
arbitration is required to resolve any disputes between the parties, the
proceedings to resolve such dispute shall be held in Sioux Falls, South Dakota
if Customer is the party seeking arbitration, while any such proceeding to
resolve a dispute shall be held in Lexington, Kentucky if PCS is the party
seeking arbitration.
13.
Network
and Data Security, and Record Retention.
PCS
will take commercially reasonable and responsible steps to maintain security
in
a manner consistent with industry standards. However, Customer recognizes
that
there can be no guarantee of absolute security of information transmitted
over
any commercial medium. PCS will continue to update its security procedures
as
technology and security threats evolve to provide commercially reasonable
security capabilities. PCS will maintain appropriate systems to log and preserve
an audit trail for all material events occurring as part of our Intrusion
Detection Policy. Records will be retained for a minimum of one year or as
otherwise agreed. Customer will take reasonable steps to maintain security
of
its own computer systems. Such steps are at Customer’s expense and will include
implementation of reasonable security measures agreed upon by the parties.
PCS
provides for monitoring, penetration and intrusion testing of its systems.
PCS
shall commit to Customer that it will perform periodic security audits and
provide the audit results at Customer request. PCS shall disclose to Customer
any breaches in security, which result in unauthorized intrusions to PCS’s
systems directly affecting the Customer’s information, and the corrective action
PCS has taken to respond to the intrusion or breach in security. PCS will
be
responsible for data and other information of Customer from the time that
such
is received by PCS at its facilities until it is, in the case of data, processed
and files based thereon are transmitted back to
Customer and, in the case of other information, released for pickup at PCS’s
facility to a courier or other representative designated by Customer. Customer
will have access to any and all Customer records
at any time they are in the possession of PCS.
14.
Insurance.
PCS
shall maintain appropriate property and casualty insurance coverage, as it
determines in the exercise of its reasonable judgment, for all of its facility
personnel and insurance coverage for loss from fire, disaster or other causes
contributing to interruption of normal services, including, without limitation,
replacement of hardware, reconstruction of data file media, including related
processing costs, additional expenses incurred to continue operation, and
business interruption from suspension of PCS’s operations due to physical loss
of equipment. Nothing in this Agreement shall be construed as to permit Customer
to receive any of such proceeds, or to be named as an additional loss payee
under any insurance policy.
15.
Audit.
PCS
shall engage a qualified third party to conduct an annual “Third Party Review”
of its operations (including its Disaster Recovery Plan) in accordance with
AICPA SAS 70 (Type 2) standards. In consideration of the Fees paid by Customer,
PCS will provide one copy of the Third Party Review at no additional charge.
Upon request, a copy of such audit shall be provided promptly upon its
completion to Customer. Customer (or a representative of Customer) shall
have
the right to perform additional audit procedures on PCS. Customer assumes
responsibility for all costs associated with the performance of Customer’s
additional audit procedures, including expenses incurred by PCS related to
such
procedures.
16.
General.
(a)
Binding
Agreement.
This
Agreement is binding upon the parties and their respective successors and
permitted assigns. Neither this Agreement nor any interest may be sold,
assigned, transferred, pledged, or otherwise disposed of by Customer, whether
pursuant to change of control or otherwise, without PCS’s prior written
consent (which
consent may not be unreasonably withheld, conditioned or delayed). Customer
agrees that PCS may subcontract any services to be performed hereunder. Any
such
subcontractors shall be required to comply with all applicable terms and
conditions.
(b)
Entire
Agreement.
This
Agreement, including its Exhibits and Attachments, which are expressly
incorporated herein by reference, constitutes the complete and exclusive
statement of the agreement between the parties as to the subject matter hereof
and supersedes all previous agreements with respect thereto, including oral
and
written proposals. Modifications of this Agreement must be in writing and
signed
by duly authorized representatives of the parties. Each party hereby
acknowledges that it has not entered into this Agreement in reliance upon
any
representation made by the other party not embodied herein. In the event
any of
the provisions of any Exhibit or Attachment are in conflict with any of the
provisions of this Agreement, the terms and provisions of this Agreement
shall
control unless the Exhibit or Attachment in question expressly provides that
its
terms and provisions shall control.
(c)
Severability.
If any
provision of this Agreement is held to be unenforceable or invalid, the other
provisions shall continue in full force and effect.
(d)
Governing
Law.
This
Agreement will be governed by the substantive laws of the State of South
Dakota,
without reference to provisions relating to conflict of laws. The United
Nations
Convention on Contracts for the International Sale of Goods shall not apply
to
this Agreement.
(e)
Force
Majeure.
Neither
party shall be responsible for delays or failures in performance resulting
from
acts reasonably beyond the control of that party.
(f)
Notices.
Any
written notice required or permitted to be given hereunder shall be given
by:
(i) Registered or Certified Mail, Return Receipt Requested, postage prepaid;
(ii) confirmed facsimile; or (iii) nationally recognized courier service
to the
other party at the addresses listed on the cover page or to such other address
or person as a party may designate in writing. All such notices shall be
effective upon receipt.
(g)
No
Waiver.
The
failure of either party to insist on strict performance of any of the provisions
hereunder shall not be construed as the waiver of any subsequent default
of a
similar nature.
(h)
Financial
Statements.
PCS
shall provide Customer and the appropriate regulatory agencies so requiring
a
copy of the relevant audited consolidated financial statements.
(i)
Prevailing
Party.
The
prevailing party in any arbitration, suit, or action brought against the
other
party to enforce the terms of this Agreement or any rights or obligations
hereunder, shall be entitled to receive its reasonable costs, expenses, and
attorneys' fees of bringing such arbitration, suit, or action.
(j)
Survival.
All
rights and obligations of the parties under this Agreement that, by their
nature, do not terminate with the expiration or termination of this Agreement
shall survive the expiration or termination of this Agreement.
(k)
Exclusivity.
Customer agrees that during the term of this Agreement PCS shall be the sole
and
exclusive provider of the services that are the subject matter of this
Agreement. For purposes of the foregoing, the term "Customer" shall include
Customer affiliates. During the term of this Agreement, Customer agrees not
to
enter into an agreement with any other entity to provide these services (or
similar services) without PCS's prior written consent. If Customer acquires
another entity, the exclusivity provided to PCS hereunder shall take effect
with
respect to such acquired entity as soon as practicable after the expiration
(for
whatever reason, including the natural expiration) of the term of such acquired
entity's previously existing arrangement for these services. If Customer
is
acquired by another entity, the exclusivity provided to PCS hereunder shall
apply with respect to the level or volume of these services provided immediately
prior to the signing of the definitive acquisition agreement relating to
such
acquisition and shall continue with respect to the level or volume of these
services until any termination or expiration of this Agreement.
(l)
Recruitment
of Employees.
Customer agrees not to hire PCS's employees during the term of this Agreement
and for a period of 6 months after any termination or expiration thereof,
except
with PCS's prior written consent.
(m)
Publicity.
Customer and PCS shall have the right to make general references about each
other publicly and the type of services being provided hereunder to third
parties, such as auditors, regulators, financial analysts, and prospective
customers and Customers. The parties shall mutually agree on a press release
relating to the execution of this Agreement. In conjunction with this, the
party
initiating such release shall give the other party a reasonable opportunity
to
review and comment on the content thereof prior to its release.
Term
of
this Agreement - 60
months
This
Agreement consists of the products or services described on the forms listed
and
checked below:
|
EXHIBIT
OR ATTACHMENT
|
FEES
AND CHARGES
|
|
1:
Attachment
1
|
$840.00
|
|
2:
Attachment
2
|
$11,676.55
per month
|
|
3:
Attachment
3
|
$58,750.00
with $630.00 per year ALF
|
|
4:
Attachment
4
|
$4,030.75
per month (Estimated)
|
|
5:
Exhibit
B
|
See
Attached Schedule
|
Payment
terms:
Customer
agrees to pay a fee at the time of execution of this Agreement - $14,897.50.
(25% of
Attachments 1and 3, with the balance to be paid upon conversion).
Monthly
Charges will be reviewed annually (“Annual Review”) and may be adjusted to PCS’s
then current Monthly Charges based on the asset size of Customer. If Customer’s
asset size changes during the Term of this Agreement, and such change is
a
result of a merger or acquisition by Customer, the Monthly Charge shall be
adjusted as of the month of such merger or acquisition. If Customer’s asset size
changes during the Term of this Agreement solely as a result of growth of
Customer’s business, the Monthly Charge shall be adjusted as of the Annual
Review Date.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their
duly authorized representatives as of the date indicated below.
|
For
Customer:
First Security Bank of Lexington,
Inc.
[Name of Customer]
|
For
PCS:
Precision Computer Systems,
Inc.
|
||
| /s/ R. Xxxxxxx Xxxxxxxxxx | /s/ | ||
|
|
|
||
|
Name:
R. Xxxxxxx
Xxxxxxxxxx
Title: President & CEO Date: June 22,
2005
|
Name:
______________________________ Title: _______________________________ Date: _______________________________ |
