EXHIBIT 99.h(v)
PURCHASE AGREEMENT
CONFIDENTIAL
THIS AGREEMENT, made and entered into this _____ day of _______________ , 2001 ,
by and between XXXX X. XXXXXXX COMPANY (hereinafter "Xxxxxxx") and the American
AAdvantage Mileage Funds (hereinafter "Buyer").
WHEREAS, the parties are desirous of having Xxxxxxx become Buyer's primary
supplier of checks and other related services.
NOW, THEREFORE, in consideration of the mutual covenants and premises contained
herein, the parties hereto agree as follows:
1. TERM
1.1 The Initial Term of this Agreement shall commence on January 1,
2002, (the "Effective Date") and, unless otherwise cancelled pursuant
to the provisions of this Agreement, shall continue in effect until
December 31, 2005. This Agreement will renew automatically after the
Initial Term for additional consecutive one-year terms unless either
party at least ninety days prior to the expiration of the then-current
term provides written notice to the other party that the Agreement
shall not renew.
2. QUANTITY AND PRODUCTS
2.1 Buyer agrees to purchase from Xxxxxxx all check products and
investment products (hereinafter "Products") that are ordered by or
through Buyer.
3. PRICES
3.1 Schedule A sets forth prices Xxxxxxx will charge Buyer during the
term of this Agreement. In addition to the prices, Buyer shall be
liable for postage, handling and delivery, non-standard services
requested by Buyer and all applicable taxes, including sales and use
taxes.
4. INVOICING AND TERMS OF PAYMENT
4.1 Xxxxxxx will provide Buyer with itemized invoices detailing
customer's name, account number, product description, base price, tax,
postage, handling and delivery.
4.2 Payment will be due within fifteen days of Buyer's receipt of
invoice from Xxxxxxx. Late payments will be subject to an interest
charge of 1 1/2% per month or the maximum allowable by applicable law.
5. SERVICE LEVEL REQUIREMENTS
5.1 All checks will be printed on paper that meets or exceeds all
paper specifications in ANSI standard X9.18.
5.2 All MICR printing will conform to ANSI standard X9.27.
5.3 See Schedule B for service level standards and expectations.
5.4 Xxxxxxx will provide telephone coverage sufficient to ensure
timely response to service calls from Buyer under normal operating
conditions. 5.5 All shipping packages shall be of sufficient
durability to withstand ordinary wear and tear during the shipping
process.
5.6 Xxxxxxx will reprint at its own expense any order containing
defective materials (including materials that fail to comply with the
standards set forth in this Section 5) or defective workmanship
(including printing errors).
5.7 While due care shall be taken to manufacture, print, bind and ship
all Products, and Xxxxxxx inspects all Products, the parties
acknowledge it is commercially impossible to detect all errors and
imperfections. Products with errors attributed to the Buyer will be
replaced and invoiced at the price indicated in Schedule A.
6. PRODUCT CHANGES
6.1 Xxxxxxx may, at its option, modify designs on any Product
(including standard checks and deposit tickets). Xxxxxxx will notify
Buyer of significant Product changes thirty days in advance of such
changes.
6.2 Xxxxxxx may, at its option, change check package sizes on all
Products as long as an appropriate price adjustment is made. Xxxxxxx
may introduce new Products periodically and offer these Products at
recommended prices to Buyer.
7. PERFORMANCE EXPECTATIONS OF BUYER
7.1 If documentation of excessive errors by Buyer is presented, Buyer
will take immediate action to correct the situation.
8. CUSTOM DESIGN STOCK
8.1 Custom stock requested by Buyer will be billed at time stock is
produced. Xxxxxxx will warehouse custom stock and use it for Buyer's
orders. Client-shareholders of the Buyer ("Customers") will be charged
processing cost only at time of production, plus applicable taxes and
delivery.
9. CONFIDENTIAL AND PROPRIETARY INFORMATION
9.1 Each party at all times shall hold in confidence, and shall at no
time advise, use or disclose to any person, except those having a
specific need to know in performance of obligations under this
Agreement , the terms of this Agreement or any proprietary or
confidential information (including Buyer's customers' information and
Harland's prices) of one party disclosed to the other. Following
termination of this Agreement, Xxxxxxx shall delete from its systems
all Customer information. Xxxxxxx acknowledges and agrees that any
non-public personal information relating to customers of the Fund(s)
for which Xxxxxxx provides services pursuant to this agreement will be
provided to Xxxxxxx solely for the purpose of enabling it to perform
such services and may not be re-used by Xxxxxx for any other purpose.
Xxxxxx represents and warrants to the Buyer that it has adopted and
implemented procedures to safeguard non-public personal information
relating to customer records and information, and that such procedures
are reasonably designed to: (i) insure the security and confidentiality
of customer records and information; (ii) protect against any
anticipated threats or hazards to the security or integrity of customer
records and information; (iii) protect against unauthorized access to
or use of customer records or information that could result in
substantial harm or inconvenience to any customer.
9.2 All proprietary artwork, photographs, designs and negatives
furnished by Buyer to Xxxxxxx (hereinafter "Artwork") shall remain the
property of Buyer. Artwork shall, at Buyer's request or upon
termination of this Agreement, be returned to Buyer in the same
condition as received, ordinary wear and tear excepted. Xxxxxxx will
make no use of the Artwork except to satisfy and complete its
obligations under this Agreement or as otherwise approved in writing by
Buyer.
9.3 Computer tapes received from Buyer will be placed in the Xxxxxxx
tape scratch pool after the job order is completed, unless specified
otherwise. Computer tapes that Buyer requests Xxxxxxx to hold and
maintain more than 30 days after work order completion will be subject
to a storage fee.
10. LIMITATION OF LIABILITY
10.1 Notwithstanding any other provision of this Agreement, neither
Xxxxxxx nor Buyer shall be liable to the other or to any Customer for
any indirect or consequential damages, even if the parties have
knowledge of the possibility of such damages.
10.2 Notwithstanding any other provision of this Agreement, Harland's
liability, if any, for items lost, stolen or unlawfully used, whether
before or after shipment, shall be limited to the replacement of such
items. Xxxxxxx shall not be held liable for any mailing that violates
any financial institution regulation or legislative action regarding
financial disclosure, release of information or discrimination. IN NO
EVENT SHALL XXXXXXX BE LIABLE FOR PUNITIVE, SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES ARISING FROM ANY CAUSE WHATSOEVER.
10.3 EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, THERE
ARE NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
11. INDEMNIFICATION
11.1 The Buyer agrees to defend, indemnify and hold Xxxxxxx harmless in
any suit or court action brought against Xxxxxxx for alleged damages,
costs and reasonable attorney fees resulting from Buyer's failure to
perform its obligations under this Agreement or Harland's printing or
mailing any copy, photographs or illustrations furnished to Xxxxxxx by
or on behalf of Buyer, provided that the alleged harm was not the
result of Harland's bad faith, gross negligence or willful misconduct
in performing its obligations under this Agreement.
11.2 Xxxxxxx agrees to defend, indemnify and hold Buyer harmless in any
suit or court action brought against Buyer for alleged damages, costs
and reasonable attorney fees resulting from Harland's failure to
perform its obligations under this Agreement in accordance with the
service level requirements set forth herein, provided that the alleged
harm was not the result of Buyer's bad faith, gross negligence or
willful misconduct in providing information to Xxxxxxx.
12. EXCUSABLE DELAYS
12.1 Strikes, fires, accidents or other causes beyond the control of
Xxxxxxx which shall affect Harland's ability to perform hereunder shall
constitute valid ground for suspension of Harland's performance
standards until such time as the event causing the delay has ceased to
affect Harland's ability to perform.
13. DEFAULTS AND REMEDIES
13.1 If Xxxxxxx or Buyer materially or repeatedly defaults in the
performance of any of its material duties or obligations or service
level requirements hereunder, and said default is not substantially
cured within ninety days after receipt by the defaulting party of
written notice specifically identifying the default, or, with respect
to those defaults that cannot reasonably be cured within ninety days,
if the defaulting party fails to provide in writing within ninety days
of receipt to the other party a reasonable plan for curing such default
and thereafter proceed with all due diligence to substantially cure the
same in accordance with such plan, then at that time the other party
may, by giving written notice thereof to the defaulting party,
terminate this Agreement by providing thirty days' written notice of
termination. If either party becomes or is declared insolvent or
bankrupt, is the subject of any proceedings relating to its liquidation
or insolvency or for the appointment of a receiver for it, or makes an
assignment for the benefit of all or substantially all of its
creditors, then the other party may, by giving thirty days' written
notice thereof to such party, terminate this Agreement. This Agreement
may not be terminated or cancelled for breach or default except
pursuant to the provisions of this Section.
13.2 All notices or other communication which shall be or may be given
pursuant to this Section shall be in writing and shall be delivered by
personal service, or by certified mail (return receipt requested), or
by a receipted delivery service, or by actual delivery by hard-copy
message or acknowledged facsimile, addressed to the other party at the
address indicated below or as the same may be changed from time to
time. Such notice shall be deemed given on the day on which personally
served or the day such notice is transmitted or deposited in the U.S.
mail.
If to Buyer: If to Xxxxxxx:
American AAdvantage Funds Xxxx X. Xxxxxxx Company
0000 Xxxx Xxxxxx Xxxx., XX 0000 0000 Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000 Xxxxxxx, XX 00000
Attention: President Attention: Contract Administration
14. TERRITORIAL SCOPE
14.1 The terms and conditions of this Agreement shall apply only to
Harland's sale of Products to or through Buyer's branches and
affiliates located in the United States and/or Puerto Rico.
15. ACQUISITION
15.1 This Agreement may not be assigned without the prior written
consent of both parties hereto, which consent shall not be unreasonably
withheld.
16. MISCELLANEOUS
16.1 Wherever this Agreement requires either party's approval, consent
or satisfaction, such approval, consent or satisfaction may not be
unreasonably or arbitrarily withheld or delayed.
16.2 Article headings are included for convenience only and are not to
be used to construe or interpret this Agreement.
16.3 Neither party's officers or employees, agents or subcontractors
will be deemed officers, employees, agents or subcontractors of the
other party for any purpose.
16.4 No delay, failure or waiver of either party's exercise or partial
exercise of any right or remedy under this Agreement shall operate to
limit, impair, preclude, cancel, waive or otherwise affect such right
or remedy; provided, however, that this section in no way permits other
than actual compliance with the provisions of Section 13.
16.5 The provisions of Sections 9, 10, 11 and 16 and any attachments
and riders shall survive termination of this Agreement.
16.6 If any provision of this Agreement is held invalid, illegal or
unenforceable, the validity, legality or enforceability of the
remaining provisions shall in no way be affected or impaired thereby.
16.7 This Agreement may be executed by the parties hereto in one or
more counterparts each of which when so executed shall be an original;
but all such counterparts shall constitute but one and the same
instrument.
16.8 This Agreement shall be governed by the laws of the State of New
York.
16.9 This Agreement, together with all exhibits referenced herein,
constitutes the entire agreement between Xxxxxxx and Buyer and
supersedes all other proposals, offers, understandings or agreements,
oral or written, between the parties on this subject. This Agreement
may be modified only in writing and with the mutual consent of the
parties hereto.
17.0 Each party expressly acknowledges the provision in the Declaration
of Trust of the Buyer limiting the personal liability of shareholders
and the officers and trustees of the Buyer. The parties hereto agree
and acknowledge that the Buyer has entered into this Agreement solely
on behalf of the Funds and no series of the Buyer shall have any
obligation hereunder with respect to any liability of the Buyer arising
hereunder.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
XXXX X. XXXXXXX COMPANY ("Xxxxxxx")
AMERICAN AADVANTAGE MILEAGE FUNDS ("Buyer")
By: By:
--------------------------------- ---------------------------------------
Title: Title: President
------------------------------ ------------------------------------
Date: Date:
------------------------------- ------------------------------------
Version 4/99
SCHEDULE A
PRODUCT PRICING
UP TO 250 251-1000 1001-2000 2001-5000 5001+
20 CHECK
WALLET BLUE $2.52 $2.20 $1.85 $1.67 $1.59
20 CHECK/5DT
WALLET BLUE $2.70 $2.35 $1.99 $1.81 $1.73
20 CHECK
COMMCL BLUE $2.80 $2.47 $2.15 $1.95 $1.86
20 CHECK/5DT
COMMCL BLUE $2.95 $2.61 $2.29 $2.04 $1.94
25 INVEST
WHITE $3.09 $2.75 $2.40 $2.15 $2.02
o SEE SCHEDULE C FOR STANDARD PRODUCT SETS
o ALL PRICING IS BASED ON AGGREGATE VOLUME OF ALL OTS CONVERTED CUSTOMERS, PER
PRODUCT PER MONTH
o INITIAL TIER PRICING IS HIGHLIGHTED. THIS WILL APPLY THROUGH MARCH 31,2002.
BEGINNING APRIL 1, 2002 PRICING WILL BE ADJUSTED QUARTERLY BASED ON THE
AGGREGATE VOLUME ACHIEVED IN THE PREVIOUS QUARTER BY ALL CONVERTED CUSTOMERS
o APPLICABLE TAXES AND FIRST CLASS POSTAGE BASED ON WEIGHT WILL BE ADDED
o PRIORITY ORDER REQUESTS WILL BE SUBJECT TO FOLLOWING FEES: FOR 3RD PARTY
BILLING $15.00 PER ORDER; IF HARLAND'S ACCOUNT IS USED SHIPPING WILL BE
CHARGED AT $25.95 PER ORDER.
SCHEDULE B
PROCESSING & COMMUNICATION GUIDELINES:
Xxxxxxx will accept electronic transmission of orders 24 hours a day, 7 days a
week. Buyer will be notified if file was not received on schedule.
SERVICE LEVEL DEFINITIONS:
o Orders must be received by 1:00PM to be considered today's orders. Orders
received after 1:00PM are considered by our system to have been received
the next business day.
o Two day, or 48 hour service, is defined as an order that ships by 11:00PM
on the second business day after the order is received.
Note: any order that is commingled and metered, will automatically have a meter
date of the next business day. This allows for mail processing by our presort
vendor.
RUSH ORDERS
Any order received by 11:00AM EST and designated as a rush order will be printed
that same day and shipped the same day.
PRODUCTION SCHEDULE/PERFORMANCE
STANDARD ORDERS
Xxxxxxx will complete 95% of check orders within 48 hours as defined in the
above Service Level Definitions.
PERFORMANCE STANDARDS:
ERRORS MAXIMUM REJECT %
---------------------------- -------------------------
MICR Lines 0.2
Printing Accuracy 0.2
Image ability 0.2
Package composition 0.2
SCHEDULE C
XXXXXXX / OTS STANDARD PRODUCT SETS
COMMERCIAL SIZE COMBO 20 CHECKS / 5 INVESTMENT SLIPS
BASE STYLE: M-OTS-BL-20-1
Component Product
Description Quantity Code Instruction
----------- -------- ------- -----------
Standard Mail Label 1 598HK0
VIP Blue Front Cover 1 29K8M1 Duplex w/ register- Print
Fund name on Front
Standard White Sheet 1 598HK0 Register page
Standard White Sheet 1 598HK0 Instruction message page
VIP Blue commercial 15 2918X1 Lasered Bank logo's and Fund
checks Names
Reorder 1 598HK0 Reorder Form message
VIP Blue commercial 5 2918X1 Lasered Bank logo's and Fund
checks Names
Investment slips 5 598HK0 Investment Form
Address Labels 1 X68P10
Back cover 1 592JE0 Xxxxxxx barcode
Insert Components
OSE 1 501JH0 Xxxxxxx standard window
envelope
Window Reorder 1 504GD0 Custom
Envelope
25 COMMERCIAL INVESTMENT SLIP PACKAGE
BASE STYLE: M-XXXX-XX-25
Component Product
Description Quantity Code Instruction
----------- -------- ------- -----------
Standard Mail Label 1 598HK0
Standard White Front 1 592JE0 Laser Fund Name
Cover
Standard White Sheet 1 598HK0 Instruction message page
Standard White Sheet 2 598HK0 2 register sheets
Investment Slip 20 598HK0 Investment Form
Reorder 1 598HK0 Reorder Form message
Investment Slip 5 598HK0 Investment Form
Address Labels 3 X68P10
Back cover 1 592JE0
Insert Components
OSE 1 501JH0 Xxxxxxx standard window
envelope
Window Reorder 1 504GD0 Custom
Envelope
COMMERCIAL SIZE 20 CHECK PACKAGE
BASE STYLE: M-HAR-BL-20-0
Component Product
Description Quantity Code Instruction
----------- -------- ------- -----------
Standard Mail Label 1 598HK0
VIP Blue Front Cover 1 29K8M1 Duplex w/ register- Print
Fund name on Front
Standard White Sheet 1 598HK0 Register page
Standard White Sheet 1 598HK0 Instruction message page
VIP Blue commercial 13 2918X1 Lasered Bank logo's and Fund
checks Names
Reorder 1 598HK0 Reorder Form message
VIP Blue commercial 7 2918X1 Lasered Bank logo's and Fund
checks Names
Back cover 1 592JE0 Xxxxxxx barcode
Insert Components
OSE 1 501JH0 Xxxxxxx standard window
envelope
Window Reorder 1 504GD0 Custom
Envelope
WALLET COMBO PACKAGE 20 CHECK AND 5 INVESTMENT SLIPS
BASE STYLE: 8-OTS-BL-20-5
Component Product
Description Quantity Code Instruction
----------- -------- ------- -----------
Standard Mail Label 1 28R740
VIP Blue Front Cover 1 2WK8H1 Duplex w/ register- Print
Fund name on Front
Standard White Sheet 1 28R740 register form
Standard White Sheet 2 28R740 Instruction Message Page
VIP Blue wallet 15 2WK8K1 Lasered Bank logo's and Fund
checks Names
Reorder 1 28R740 Reorder Form message
VIP Blue wallet 5 2WK8K1 Lasered Bank logo's and Fund
checks Names
Investment Slips 5 28R740 Investment Form
Address Labels 1 XW6HM0
Back cover 1 7W4003 Xxxxxxx barcode
Insert Components
OSE 1 501JC0 Xxxxxxx standard window
envelope
Window Reorder 1 504GE0 Custom
Envelope
WALLET SIZE 20 CHECK PACKAGE
BASE STYLE: 8-OTS-BL-20
Component Product
Description Quantity Code Instruction
----------- -------- ------- -----------
Standard Mail Label 1 28R740
VIP Blue Front Cover 1 2WK8H1 Duplex w/ register- Print
Fund name on Front
Standard white sheet 1 28R740 Instruction message page
VIP Blue wallet 15 2WK8K1 Lasered Bank logo's and Fund
checks Names
Reorder 1 28R740 Reorder Form message
VIP Blue wallet 5 2WK8K1 Lasered Bank logo's and Fund
checks Names
Back cover 1 7W4003 Xxxxxxx barcode
Insert Components
OSE 1 501JC0 Xxxxxxx standard window
envelope
Window Reorder 1 504GE0 Custom
Envelope
