EXHIBIT 10.29
ITEM PROCESSING AGREEMENT
BY AND BETWEEN
SYSTEMATICS FINANCIAL SERVICES, INC.
AND
PAN AMERICAN SAVINGS BANK
APRIL 20, 1993
Systematics Financial Services, Inc.
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ITEM PROCESSING AGREEMENT
This Item Processing Agreement ("Agreement") dated 26th day of April 1993
("Effective Date") is by and between SYSTEMATICS FINANCIAL SERVICES, INC, an
Arkansas corporation, having its principal place of business at 0000 Xxxxxx
Xxxxxx Xxxx, Xxxxxx Xxxx, Xxxxxxxx, 00000-0000 (hereinafter "Systematics") and
PAN AMERICAN SAVINGS BANK, A CALIFORNIA CORPORATION, having its principal place
of business, at 0000 Xxxxx Xx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000
(hereinafter "Client").
In consideration of the payments to be made and the services to be provided
pursuant to this Agreement, as well as the mutual promises and covenants of the
parties, Systematics and Client agree as follows:
1. SERVICES.
Systematics will provide for Client the item processing and related
services described in this Agreement and the attached exhibits, each of
which is made a part hereof and is incorporated herein by reference.
2. TERM.
The term of this Agreement is five (5) years (60 months), beginning the
Effective Date stated above. The end of such term shall be the "Expiration
Date". At least nine (9) months prior to the Expiration Date, Systematics
will submit to Client a Written proposal for renewal of this Agreement.
Client will respond to such proposal within 90 days following receipt
thereof.
This Agreement may be terminated by Client before the Expiration Date
twelve (12) months after the Effective Date without penalty and with no
increase in the fees specified in Exhibit B-1 "SERVICE FEES" if Client is
acquired (as defined below); provided that Client notifies Systematics at
least ninety (90) days prior to the date of its intention to terminate this
Agreement. If such notice is not given to Systematics by the date
specified, this Agreement will continue in full force and effect until
Expiration Date. Client shall be deemed to have been acquired if it shall
merge with and into, consolidate with, or sell substantially all of its
assets and/or stock to, one or more financial institutions, acting in
concert.
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3. SERVICE FEES.
Service fees for the services provided by Systematics to Client under this
Agreement are as stated in Exhibit B - Service Fees and shall be paid in
accordance with Section 11 below.
4. AUDIT.
4.1 ANNUAL AUDIT. Systematics will provide an annual audit of its
operations at the Systematics IP Site (as described in Section 6.1) by
an independent accounting firm.
4.2 REGULATORY AGENCIES. Systematics will cooperate fully with Client with
regard to examinations by regulatory authorities relating to services
performed under this agreement.
5. CONFIDENTIALITY.
All information concerning Client, its business or customers submitted to
Systematics pursuant to this Agreement shall be held in confidence by
Systematics and shall not be disclosed to third parties.
6. FACILITY.
6.1 PREMISES. Systematics will provide adequate item processing premises
at a location of its choice for the discharge of its responsibilities
under this Agreement. Such premises are hereinafter referred to as the
"IP Site".
6.2 SECURITY. Systematics will use prudent safeguards to prevent access
to Client's data and the IP Site by unauthorized persons.
6.3 INSPECTION OF RECORDS. Systematics will not permit any person or
entity other than Systematics' employees to have access to Client's
data without written authorization from Client. All of Client's data
shall be available for examination by Client at any reasonable time.
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7. TIME OF PERFORMANCE.
7.1 SUBMISSION OF INPUT. Client agrees that Systematics' time to perform
the services described in this Agreement and the exhibits hereto shall
be enlarged to the extent reasonably necessary if Client does not
submit items and data to Systematics for processing at the times and
in the condition required by this Agreement and its exhibits.
Systematics is responsible for safekeeping Client's documents while in
Systematics' possession in the IP Site.
7.2 SPECIAL REQUESTS. Special requests by Client or any governmental
agency authorized to regulate or supervise Client which impact
Systematics' normal servicing schedule shall result in an enlargement
of Systematics' time of performance if and to the extent reasonably
necessary. Systematics will notify Client of the estimated impact on
its service schedule, if any.
7.3 CORRECTION OF PROCESSING ERRORS. In the event of an error in
processing Client's data, Systematics will promptly correct such
error. Such correction of error shall be without charge to Client
unless caused by the nature of the data submitted by Client.
7.4 CLIENT REVIEW. Client will review and inspect carefully all reports
prepared by Systematics, Client agrees to promptly notify Systematics
of any erroneous processing. If Client fails to so notify Systematics,
it shall be deemed to have waived its rights in respect of such error
and to have assumed all risks in respect thereof.
8. BACKUP, STORAGE, FILES AND PROGRAMS.
8.1 FILES AND PROGRAMS. Systematics agrees to provide and maintain
adequate backup files on magnetic media of Client data and all
programs and documentation utilized to process Client's data.
8.2 STORAGE. Systematics will provide off-site storage for backup data
files and programs. Systematics will deliver the data files and
programs to its off-site storage location, and retain for a period of
time consistent with published Systematics operating standards and
applicable regulatory requirements. Such standards will be furnished
to the Client upon request. Systematics is responsible for the
physical security of such files.
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8.3 DISASTER RECOVERY. Systematics will maintain Disaster Recovery backup
agreements as described herein. Such arrangements are intended to deal
with circumstances which are reasonably expected to render a
substantial portion of the item processing services unavailable for a
period of 72 consecutive hours ("Disaster"). Declaration of a.
Disaster shall be at the sole discretion of Systematics.
8.3.1 DISASTER RECOVERY PLAN. Systematics agrees to maintain a
specific written plan for dealing with its item processing
obligations during a Disaster. Systematics will maintain
current copies of its plan at off-site locations, and will
provide Client with documentation of such plan sufficient for
Client's use in developing an associated plan of its actions
during a Disaster.
8.3.2 DISASTER RECOVERY TESTING. Systematics agrees to test its
Disaster Recovery Plan at least annually.
8.3.3 PROCESSING FREQUENCY. Systematics does not guarantee that all
applications will be processed as frequently during a Disaster
as they are normally processed under the Item Processing
Agreement. The applications processed will be consistent with
the priorities set forth by Client.
8.3.4 TIME OF PERFORMANCE. Systematics will use diligence to provide
the item processing services set forth hereunder at the times
required herein. Client acknowledges, however, that the
circumstances of a Disaster are likely, to adversely impact
Systematics' time of performance and that the provisions of the
Time of Performance section shall not continue to be applicable
during a Disaster.
9. EFFECTIVE PLANNING AND COMMUNICATION.
Systematics and Client agree that effective planning and communication are
necessary to provide overall direction for Client's item processing, and
that each will work to promote a free and open exchange of information
between Systematics personnel, Client senior management and Client user
departments. Member of Systematics' IP Site management will participate
actively with Client's management and users to review, discuss and track
quality of performance, service reliability and availability for Client's
item processing.
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10. TERMINATION.
10.1 RIGHT TO TERMINATE. In addition to any other rights which either party
may have in law or equity, either Systematics or Client may terminate
this Agreement if the defaulting party fails to cure any material
default hereunder within thirty (30) days of written notice from the
other party, specifying the nature and extent of any such default.
10.2 METHOD OF TERMINATION. Exercise of the right to terminate under this
Section must be accomplished by written notice to the defaulting
party, specifying the basis for such termination and fixing a date, on
the last day of a month, not less than 90 days following the date of
receipt of such notice for cessation of services hereunder (the
"Termination date").
10.3 TRANSITIONAL COOPERATION. Upon any termination or expiration of this
Agreement, Systematics will cooperate fully and provide additional
assistance at standard rates then in effect with a view to assuring a
smooth transition to whatever method (s) of item processing Client may
select.
11. PAYMENT AND BILLING.
Client agrees to pay Systematics for the services performed hereunder in
accordance with the fees set forth in Exhibit B - Service Fees, pursuant to
invoices prepared and delivered to Client. All fees shall be payable on
the first business day of each month, for services rendered during the
prior month.
12. NO INTERFERENCE WITH CONTRACTUAL RELATIONSHIP.
Client warrants that, as of the date hereof, it is not subject to any
contractual obligation that would prevent Client from entering into this
Agreement, and that Systematics' offer to provide such services in no way
caused or induced Client to breach any contractual obligation.
13. NO WAIVER OF DEFAULT.
The failure of either party to exercise any right of termination hereunder
shall not constitute a waiver of the rights granted herein with respect to
any subsequent default.
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14. MERGERS AND ACQUISITIONS.
Upon written request by Client, Systematics will process additional volumes
resulting from any merger or acquisition involving Client; subject, however
to a mutually agreeable adjustment to the fees payable in respect thereof.
Client will notify Systematics of any such proposed merger or acquisition
as soon as reasonably practicable.
15. ENTIRE AGREEMENT.
Expiration or termination of any part of this Agreement shall terminate the
entire Agreement except for any portion hereof which expressly remains in
force and in effect notwithstanding such termination or expiration.
Modification or amendment of this Agreement or any part thereof may be made
only be written instrument executed by both parties. If any provision, or
any part or application of any provision of this Agreement shall be held to
be invalid, illegal, or unenforceable, the validity, legality and
enforceability of the remainder of this Agreement or other parts or
applications of such provisions, shall not be affected or impaired thereby.
If any portion of this Agreement are held by a court of competent
jurisdiction to conflict with any federal, state or local law or
regulation, such portion or portions of this Agreement are hereby declared
to be of such force and effect as is permissible in such jurisdiction.
16. ASSIGNMENT.
Neither party hereto shall assign or otherwise convey or delegate its
rights or duties hereunder to any other party without the prior written
consent of the other party to this Agreement, which consent shall provide
that it is subject to all the terms and conditions of this Agreement. No
such consent shall be required in the event of a merger, consolidation,
sale of substantially all of the assets, or any other change of control of
either party hereto, in which event, this Agreement shall apply to, inure
to the benefit of, and be binding upon the parties hereto and upon their
respective successors in interest.
17. CONFIDENTIAL AGREEMENT.
This Agreement is a confidential agreement between Systematics and Client.
In no event may this Agreement be reproduced or copies shown to any third
parties by either Client or Systematics without the prior written consent
of the other party, except as may be necessary by reason of legal,
accounting or regulatory requirements beyond the reasonable control of
Systematics or Client, as the case may be, in which event Systematics and
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Client agree to exercise diligence in limiting such disclosure to the
minimum necessary under the particular circumstances.
18. INCREASE FOR TAXES.
Client will pay directly or reimburse Systematics for all sales, use or
excise taxes, however designated, levied or based, on amounts payable
pursuant to this Agreement including state and local privilege or excise
taxes based on gross revenues under this Agreement or taxes on services
rendered. Client shall not be responsible for any taxes levied on the
personal property or net income of Systematics.
19. INDEPENDENT CONTRACTOR.
It is agreed that Systematics is an independent contractor and that Client
has no power to supervise, give directions or otherwise regulate
Systematics' operations to employees, except as herein provided for
security of Client's data and detection of errors in processing.
20. CLIENT AND SYSTEMATICS EMPLOYEES.
Client and Systematics agree not to offer employment to any employee of the
other without the prior written consent of the other.
21. PREVIOUS LIABILITIES.
The parties hereto agree to indemnify the other and hold the other harmless
against any loss (including attorney's fees and expenses) arising out of
any claims or lawsuits filed or subsequently filed as a result of the acts
of the other party which occurred prior to the Effective Date of this
Agreement.
22. NOTICES.
All notices, requests and demands, other than routine operational
communication under this Agreement, shall be in writing and shall be deemed
to have been duly given when deposited in the United States mail,
registered or certified postage prepaid, and addressed to the other party
at the address first shown above and to the attention of the president of
said party. Notice of changes of address, if any shall be given in like
manner.
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23. COVENANT OF GOOD FAITH.
Systematics and Client agree that, in their respective dealings arising out
of or related to this Agreement, they shall act fairly and in good faith.
24. STANDARD OF CARE.
Systematics shall use reasonable and diligent efforts to make the services
provided hereunder available and operational at all necessary times and in
so doing shall take reasonable steps to safeguard against events which
would adversely impact the delivery thereof. SYSTEMATICS MAKES NO OTHER
WARRANTIES, EITHER EXPRESSED OR IMPLIED, WITH REGARD TO THE SERVICES
PROVIDED HEREUNDER.
25. LIMITATION OF LIABILITY.
Systematics shall not be liable to Client or any other person:
(i) for claims, damages, loss, destruction, or delay which result from
any failure, delay or interruption beyond Systematics' control
including, but not limited to, floods, tornados, snowstorms, or other
weather related disasters, earthquakes, acts of God, fires, national
emergencies, acts of any federal, state or local government, labor
difficulties insurrection, war, riot, rebellion, equipment failure,
disruption of communications, utility outages, or any events, whether
of a similar or dissimilar nature to the foregoing, that are beyond
the control of Systematics.
(ii) for any items while such items are in transit to or from Systematics'
IP Site or while such items are in the possession, custody or control
of any other party;
(iii) when the negligence, misconduct or default of any third party
including, but not limited to, Client or Client's agent,
correspondent banks, clearing houses, the Federal Reserve System or
any other endorsing institution contributed to the loss;
(iv) for the nonpayment of any item unless such nonpayment results solely
from the negligence or willful misconduct of Systematics;
(v) when Systematics performed the services hereunder in accord with
Client's procedures or pursuant to Client's direction;
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(vi) for any amount in excess of direct damages actually incurred,
resulting from the breach of any covenant, agreement or undertaking
required under this Agreement; or
(vii) for any incidental, special or consequential damages or any claim or
demand made by any third party.
26. SECTION TITLES.
Section titles as to the subject matter of particular sections herein are
for convenience only and are in no way to be construed as part of this
Agreement or as a limitation of the scope of the particular sections to
which they refer.
27. COUNTERPARTS.
This Agreement may be executed in several Counterparts, each of which shall
be deemed to be an original, but all of which shall constitute one and the
same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by the undersigned
officers, thereunto duly authorized, as of the Effective Date.
SYSTEMATICS FINANCIAL PAN AMERICAN SAVINGS BANK
SERVICES, INC.
By: /s/ F. XXXXXX XXXX By: /s/ XXXXX X. XXXXXXX
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Name: F. Xxxxxx Xxxx Name: Xxxxx X. Xxxxxxx
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Title: General Manager Title: Managing Agent
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Date: 4/29/93 Date: April 26, 1993
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EXHIBIT B1 - SERVICE FEES
In consideration for the services to be provided herein, Client shall pay to
Systematics the fees set out as follows:
For the period beginning upon the date on which Systematics begins providing
services described herein at its California DMS Item Processing Center and
continuing for the term of the Agreement, the Service Fees will be as follows,
except for the annual CPI inflation adjustment shown in Exhibit B-2.
SERVICE PER ITEM FEES
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TRANSIT PROCESSING:
Minimum Monthly Charge $400.00
Item Capture .015 per item
Encoding .02 per item
Cash Ltr/Brch Dep Tickets 1.00 each
Transit Return Items/Reclear 1.75 each
End-Point Analysis Reports 40.00 per month (As Requested)
Presentment Points 50.00 each
INCLEARING SERVICES:
Minimum Monthly Charge $500.00
Capture, Finesort, Microfilm .015 per item
Return Item Processing 2.00 per item
Large Dollar Returns 4.25 per item
Late Returns 5.00 per item
Photocopies/Facsimile 2.00 per item
Original Item Retrieval 6.00 per item
Finesort Microfilm 10.45 per cycle - .005 per item
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EXHIBIT B1 - SERVICE FEES (CONTINUED)
SERVICE PER ITEM FEES
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COMPREHENSIVE:
Minimum Monthly Charge $750.00
Stdrd Stmts Bar Coded .50 each
Stdrd Stmts non-Bar Coded .55 each
Inserts .03 each
Truncated (Checking) .35 each
Truncated (Savings) .16 each
Avg. # of cks over 25 per stmt. .025 per item
Non Stdrd Stmts Individually priced
On-Us (Over-the-Counter) items .25 each
OTHER CHARGES:
Research $35.00 per hour in 1/2 hour increments
Postage Passthrough + 15% Surcharge or Fund Monthly
Supplies Passthrough + 15% Surcharge
Courier Service Passthrough + 15% Surcharge or Client
makes own transit/lockbox arrangement
Courier Service Passthrough + $45 (inclearings)
Signature Verification Pricing Upon Request
Statement Laser Printer Pricing Upon Request
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EXHIBIT B
SERVICE FEES
MONTHLY ITEM PROCESSING SCHEDULE
PAN AMERICAN SAVINGS BANK
MAY 1997
In consideration of the services provided herein, for the period beginning May
1, 1997, Client shall pay to Fiserv the fees set out as follows:
SERVICE PER ITEM FEE
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TRANSIT PROCESSING
Minimum Monthly Charge 432.5351
Item Capture 0.0162
Encoding 0.0216
Cash Ltr/Brh Dep Tickets 1.0813
Transit Return Items/Reclear 1.8923
End-Point Analysis Report (per month) 43.2535
Presentment Points 54.0669
INCLEARING SERVICES
Minimum Monthly Charge 540.6689
Capture, Finesort, Microfilm 0.0162
Return item processing 2.1627
Large dollar returns 4.5957
Late Returns 5.4067
Photocopies/Facsimiles 2.1627
Original item retrieval 6.4880
Finesort Microfilm 11.3000
Additional Items 0.0054
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EXHIBIT B
COMPREHENSIVE
Minimum Monthly Charge 811.0033
Stdrd stmts bar coded 0.5407
Stdrd stmts non-bar coded 0.5947
Inserts 0.0324
Truncated (Checking) 0.3785
Truncated (Savings) 0.1730
Avg. # or cks over 25 per stmt. 0.0270
Non Stndrd Stmts. Individually priced
On-Us (Over-the-Counter) items 0.2703
OTHER ADDITIONAL CHARGES
Research per hour - 1/2 hour increments) 37.8468
Postage Pass-thru + 15% or client funds postage meters
Supplies Pass-through plus 15%
Courier Service
Depository/Lockbox Pass-thru + 15% or client makes own arrangements
Inclearings Pass-thru + $48.6602 or client makes own arrangements
Statement laser printing Pricing upon request
Signature Verification Pricing upon request
CPI - INFLATION ADJUSTMENT
The fees and prices shown in this Agreement will be increased, but not
decreased, based on the effects of inflation. Effective with the monthly
billing for the thirteenth contract month, and annually thereafter, such fees
and prices will be adjusted using the Consumer Price Index for All Urban
Consumers - Other Goods and Services (the "CPI-U") as published by the US
Department of Labor, Bureau of Labor Statistics. The percentage increase in the
CPI-U used in computing the inflation adjustment that is to become effective
with the thirteenth month shall be the percentage increase in such index over
the one-year period ended with the eighth contractual month. The percentage
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increase in the index used in computing the inflation adjustments that are
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to become effective in subsequent annual periods shall be the percentage
increase for the corresponding annual periods commencing with the ninth, twenty-
first, thirty-third, etc. contract months. (2.6% for the San Francisco region -
December 1996)
Accounting Approval ANW
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April 20, 1993 Item Processing Agreement
