SERVICE AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this October 15,
1999, by and between U.S. Bancorp-Registered Trademark-, having its principal
place of business at 000 0xx Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000 ("Customer")
and Northstar Computer Forms, Inc., having principal place of business at 0000
Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxx, XX 00000, ("Supplier"), collectively the
"Parties".
INDUCEMENTS
A WHEREAS, SUPPLIER IS AN EXPERIENCED PROVIDER OF CERTAIN FINANCIAL FORMS
PRODUCTS; AND
WHEREAS, Customer has submitted to Supplier a Request For Proposal dated April
15, 1999 which is attached as Exhibit D (the "RFP") setting forth certain
information regarding (I) services related to the production of Customer's
financial forms printing requirements, (ii) Customer's desire to add value and
to improve its capability for delivering effective business transaction through
such documents, and (iii) certain requirements to fulfill the present and future
needs of Customer over the next two (2) years; and
WHEREAS, based on the results of Supplier's review and analysis of the RFP,
Supplier has prepared and delivered to Customer a Proposal dated May 11, 1999
which is attached as Exhibit E (the "Proposal") setting forth representations
including conclusions, recommendations, and benefits regarding the appropriate
products required to provide Customer with certain financial forms requirements
as specified in the RFP's criteria; and to further provide Customer with the
capability and the flexibility sufficient to handle its current and reasonable
anticipated growth in the next two (2) years in an economical and commercially
reasonable manner; and
WHEREAS, on the basis of the representations contained in Supplier's proposal,
presentations, other printed material, correspondence and in reliance upon the
expertise of Supplier as an experienced provider of certain financial forms
products for companies such as Customer; and
WHEREAS, Customer has a need for such products and desires to have Supplier
provide such products as described herein; and
NOW, THEREFORE, in consideration of the foregoing and the mutual promises set
forth below, the sufficiency of which are hereby acknowledged, the Parties agree
as follows:
1. DEFINITIONS. For the purposes of this Agreement, in addition to the
definitions set forth above, the following terms will be defined as
follows:
a) "Customer" shall include all agents, officers, directors,
representatives and employees of U.S. Bancorp.
b) "Customer Designated Personnel shall include the appropriate
procurement analyst and the document originator.
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c) "MICR Form" shall mean magnetic ink character recognition encoded
financial forms.
d) "Products" shall mean the products to be provided to Customer by
Supplier as described in all Statement of Work Exhibits to this
Agreement or as deemed necessary in order to provide the products
described therein.
e) "Rush Orders" shall mean such orders as identified in all
Statement of Work Exhibits to this Agreement.
f) "Standard Orders" shall mean such orders as identified in all
Statement of Work Exhibits to this Agreement.
g) "Supplier" shall include all agents, officers, directors,
representatives and employees of Northstar Computuer Forms, Inc.
h) "Start-up Date" shall mean January 01,2000-the date the supplier
will begin filling orders.
I) "Performance Standards" shall mean such performance criteria as
defined in all Statement of Work Exhibits to this Agreement.
2. SCOPE OF WORK
a) Supplier shall provide the Products described in any Statement of
Work Exhibits to this Agreement which shall be attached hereto
and incorporated herein by reference (the "Products").
b) Supplier shall take all necessary steps, shall procure, order and
furnish all of the required tools, materials, labor and equipment
to complete all of the Products as described in this Agreement.
c) The Parties agree that all Products provided by Supplier to
Customer during the term of this Agreement shall be provided in
accordance with the provisions of this Agreement, which shall
supersede and take precedence over any contrary or additional
terms stated in Supplier's acknowledgment, invoice or other
document unless the Parties expressly agree by written
modification to this Agreement, signed by the individuals who
executed this Agreement or their respective successors or
superiors, that the provisions of this Agreement shall not apply.
d) Customer will purchase its requirements of the Products from
Supplier. Notwithstanding the foregoing, in the event that
Supplier is unable to perform its obligations under this
Agreement Customer shall have the right to purchase the Products
elsewhere. In addition, in the event of an acquisition by
Customer of another entity Customer will not be obligated to
purchase such entities' requirements of Products from Supplier if
i) such entity is expressly prohibited from purchasing Products
elsewhere, ii) such Products are being purchased under superior
economic terms. In the case of a merger of Customer with another
entity, the surviving entity will not be obligated to purchase
the requirements of the Products of the entity with which it
merged if i) such entity is expressly prohibited from purchasing
Products elsewhere, ii) such Products are being purchased under
superior economic terms. In these instances Customer expressly
reserves the right to request Products from alternate sources
which are identical or similar to the Products described herein.
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e) Supplier will furnish Customer, in a timely manner, any and all
information and materials that Customer may from time to time,
request in connection with all matters contemplated by this
Agreement. Supplier warrants and represents that it is a
corporation in good standing and duly authorized to do business
and perform its obligations under this Agreement. Supplier will
comply with all applicable federal, state and local laws.
3. TERM
Subject to the rights of termination provided for elsewhere herein, the initial
term of this Agreement will be for a period commencing January 01, 2000 and
remaining in full force and effect through December 31, 2001, inclusive, at
which time it shall automatically renew for one (1) year renewal periods until
Customer or Supplier provides written notice of termination to the other party
no later than one-hundred twenty (120) days prior to the end of the original
term or any renewal period.
4. TERMINATION
a) Customer may terminate this Agreement immediately, in whole or in
part, in the event Supplier:
i) upon thirty (30) days prior written notice from Customer to
Supplier of a breach by Supplier in the performance of its
respective obligations under this Agreement, which breach is
not cured or a plan for cure is not accepted in writing by
nondefaulting party within such thirty (30) days.
ii) upon the happening of any event or condition which may, in
Customer's good faith judgment, impair Supplier's ability to
perform hereunder, Customer may demand, in writing, adequate
assurance of Supplier's ability to continue performance of
this Agreement. If Supplier does not provide adequate
written assurance within forty-eight (48) hours of receipt
of Customer's demand, Supplier shall be deemed to have
rejected continued performance hereunder and to have
materially breached this Agreement. In such event, Customer
shall have no further liability hereunder.
b) Either party may terminate this Agreement at any time after the
filing of any petition of bankruptcy or for reorganization or debt
consolidation under the federal bankruptcy laws or under any
comparable law by or against the other party, or upon the other
party's making of an assignment of any of its assets for the
benefit of creditors, or upon the application by the other party
for the appointment of a receiver or trustee of its assets.
c) Customer may terminate this Agreement at any time in the event
Supplier is acquired by a third party. Customer may also terminate
this Agreement in the event Supplier is merged with a third party
in which either Supplier is not the surviving entity of the merger
or Senior Management of the Supplier does not remain the Senior
Management of the surviving entity after the merger. Customer may
also terminate this Agreement if Supplier forms an alliance with an
unrelated third party that performs services and/or sells products
similar to those of Customer or that is considered a competitor of
Customer. In anysuch an event, Customer shall provide Supplier
notice of its intention to terminate
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this Agreement in writing at least one-hundred twenty (120) days
prior to the date of such termination.
d) Customer may, at its sole and complete discretion, terminate this
Agreement at any time in the event Customer is acquired by a third
party organization. In addition, in the event of an acquisition by
Customer of another entity Customer will not be obligated to
purchase such entities requirements of Products from Supplier if
i) such entity is expressly prohibited from purchasing Products
elsewhere, ii) such Products are being purchased under superior
economic terms. In the case of a merger of Customer with another
entity, the surviving entity will not be obligated to purchase the
requirements of the Products of the entity with which it merged if
i) such entity is expressly prohibited from purchasing Products
elsewhere, ii) such Products are being purchased under superior
economic terms. In such an event, Customer shall provide Supplier
notice of its intention to terminate this Agreement in writing at
least one-hundred twenty (120) days prior to the date of such
termination.
e) In the event of termination pursuant to Section 4.b, Customer's
sole responsibility to Supplier shall be to purchase within ninety
(90) days of termination of this Agreement, any inventory of the
Products so long as the inventory of Products meets all of the
following criteria:
i) The Products are in compliance with all quality standards;
ii) The inventory of Products is not in excess of any quantities
approved in writing by Customer to be produced and entered
into inventory.
f) In the event of termination pursuant to Section 3, 4.a.,, 4.c.,
4.d. . Customer's sole responsibility to Supplier shall be to
purchase within ninety (90) days of termination of this Agreement,
any inventory of the Products so long as the inventory of Products
meets all of the following criteria:
i) The Products are in compliance with all quality standards;
The inventory of Products is not in excess of any quantities
approved in writing by Customer to be produced and entered
into inventory.
g) In the event of termination pursuant to Section 3, 4.a., 4.b.,
4.c., 4.d. . Supplier's responsibilities to Customer shall
include, but not be limited to, the following:
i) Supplier shall continue to provide Services to Customer in a
professional and businesslike manner as described herein and
in accordance with the Performance Standards contained herein
until the termination date.
ii) Supplier shall use its best efforts provide to Customer all
information and data regarding the provision and management of
the Services in a timely manner and in a format and upon such
media as requested by Customer.
iii) Supplier shall use its best efforts to cooperate fully with
Customer and any alternative supplier which may be a
successor to Supplier in performing the Services for
Customer.
iv) Supplier shall stop work on the termination date of the
Agreement or before, if mutually agreed upon by both Parties.
5. PRICING
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a) Except as expressly provided for herein, prices shall remain firm
throughout the initiall term of this Agreement pursuant to the pricing
identified in Exhibit B and incorporated herein by reference.
b) Notwithstanding the foregoing, if pricing for raw materials for the
Products of the nature contemplated herein is increased/decreased by
more than 10% throughout the term of this Agreement, Supplier and
Customer shall negotiate in good faith an increase/reduction in
pricing in this Agreement. Supplier is limited to exercising this
option to two (2) times per year after the first 12 (twelve) months
of the Agreement effective date. It is agreed that prices will never
increase in aggregate more than 15% during the initial term of this
Agreement. Per Section 15, Customer has the right to perform an audit
and require sufficient evidence of Supplier's increased cost of raw
materials.
c) Prices for renewal periods shall be as mutually agreed upon by the
parties which agreement must be reached no less than one hundred
thirty (130) days prior to the end of the initial term or the current
renewal period.
d) In the event Customer acquires a third party that has an existing
agreement with Supplier to provide substantially the same Products or
a portion thereof, the most favorable clauses from Customer's
perspective in either this Agreement or the acquired entity's
agreement shall become part of a new Agreement. In no way shall the
resulting terms and conditions be more onerous to either party than
the original terms and conditions for the same type, frequency and
quality of products in either Agreement.
e) Supplier shall pay to Customer on a quarterly basis 2.5% of the
previous quarter's sales. In the event Customer's purchases during
the first year of the contract or any subsequent year exceed two
million five hundred thousand dollars ($2,500,000.00), subsequent to
paper price increase pursuant to 5b, Supplier shall pay to Customer at
the end of each contract year or subsequent year, an amount equal to
0.5% of Customer's purchases for such year which are in excess of two
million five hundred thousand dollars ($2,500,000.00), pursuant to
Section 3 renewal prices will increase proportionately due to paper
price increases negotiated by both parties. All such payment shall be
made in the form of a check and received by Customer no later than the
tenth (10th) business day of each quarter. Upon the termination of
this Agreement, any such refund due and owing Customer at the
termination of this Agreement shall survive the termination of this
Agreement so long as Customer's total purchases during the term of
this Agreement were in excess of $2,500,000.00. Accordingly,
Supplier's obligation to pay the 2.5% refund shall apply to Products
purchased pursuant to this Agreement after termination of this
Agreement so long as Customer's total purchases during the term of
this Agreement were in excess of $2,500,000.00.
6. SALES TAX.
Supplier shall collect, report and remit all applicable local, county and state
sales and use taxes assessed on all sales of products made pursuant to this
Agreement. Customer agrees to reimburse
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Supplier for all such taxes, except any taxes based on the income of the
Supplier, so long as such amounts are included in the normal billing process.
7. INVOICING
a) Supplier shall submit charges for all Products plus any allowable
shipping charges and sales and/or use taxes via Visa-Registered
Trademark- account numbers provided by Customer to Supplier for
each company/cost center receiving Products. Such charges shall
not be submitted until Product has shipped to Customer. Supplier
shall submit such charges to Visa-Registered Trademark- at least
monthly for all charges for that month. Supplier shall not
prepare or submit paper invoices to Customer unless otherwise
agreed upon in writing by Customer. The service fee and/or
discount amounts, if any, associated with billing Visa-Registered
Trademark- accounts are not reimbursable to Supplier by Customer
but rather have already been acknowledged by Supplier and
included in the pricing agreed upon in this Agreement. If
Customer disputes any charges Supplier has submitted to
Visa-Registered Trademark-, such issues shall be resolved to the
mutual agreement of Customer and Supplier and any corrective
transactions shall occur during the next billing cycle. In the
event the Visa-Registered Trademark- system is not available for
charging and collection of fees, for no fault of Supplier,
Supplier shall submit standard invoices for the billable
activities at the same frequency as noted above and Customer
shall pay such undisputed invoices within thirty (30) days of
receipt thereof.
b) In no event, shall any charges be due and owing by Customer when
such charges are for Products provided more than ninety (90) days
prior to the submission of charges to VISA-Registered Trademark-
or receipt of invoice by Customer. In the event Supplier
identifies charges which are for Products provided more than
ninety (90) days prior to the current date and for which no
VISA-Registered Trademark- charges were submitted and for which
no invoice was submitted to Customer, notwithstanding any other
provisions of this Agreement, Supplier shall waive all such
charges and Customer shall have no obligation to pay such
charges.
8. PERFORMANCE.
If Supplier does not provide the Products on or before the time specified or
within the performance standards stated here in at least ninety-two (92)
percent of the time for two consecutive months, Customer reserves the right,
subject to paragraph 4.a.i., to terminate the entire Agreement or any part
thereof, and to purchase the Products elsewhere. In such event, Supplier shall
pay to Customer an amount equal to the five percent (5%) of the total charges
for the previous month. Supplier shall not make any material commitment or
production arrangement in excess of the amounts necessary to meet the
performance schedule for Products covered by this Agreement. Any excess
commitments or arrangements without Customer approval shall be made at
Supplier's own risk and Customer will not be liable for payment of such
Products.
9. INSPECTION AND ACCEPTANCE
All Products produced pursuant to this Agreement shall exceed existing and
prospective ANSI/ABA standards for printing of such financial forms, including
but not limited to, MICR documents. All Products shall be subject to inspection
and acceptance by Customer when
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Product is used by Customer. Customer shall have the right to reject and have
defective Products replaced. Such defective Products shall be replaced with
acceptable Products, at Supplier's sole expense within five (5) business days
of notification to Supplier by Customer, however, the quantity of such
replacement Product replaced within the five (5) day period shall not be
greater than Supplier's equipment physical capacities. Any remaining
replacement Products, if any, shall be produced as quickly as possible by
Supplier.
10. EMPLOYMENT TAXES AND BENEFITS
To the extent required under applicable law, Supplier shall report as income all
compensation received by Supplier pursuant to this Agreement and pay all taxes
due on such compensation. Supplier shall indemnify and hold harmless Customer
and its employees, officers, directors, representatives and agents, and their
respective heirs, personal representatives, successors and assigns, from any and
all claims, actions, causes of action, demands, liability, losses, costs and
expenses (including court costs and reasonable fees of attorneys and other
professionals) arising from any obligation imposed on Customer to pay any
withholding taxes, social security, unemployment insurance, workers'
compensation insurance, disability insurance or similar items, including
interest and penalties therefrom, in connection with any payments made to
Supplier by Customer pursuant to this Agreement.
11. DATA/INFORMATION OWNERSHIP
All data, information, reports, and records created as a result of the provision
of Products by Supplier under this Agreement shall be deemed property of
Customer including any ideas generated by Customer or Customer and Supplier but
as may be carried out and/or implemented by Supplier during its provision of
Products hereunder so long as such information is unique or proprietary to the
Customer or the Customer's operations. Ideas generated jointly by Supplier and
Customer which simply relate to efficiencies and cost savings with respect to
the provision of products shall be deemed part of the public domain and Supplier
shall be free to use such information with the understanding that Supplier will
also share with Customer such general information regarding efficiencies and
cost savings that it learns or develops from its relationship with other of
Supplier's customers. Supplier agrees to, and hereby grants, conveys, and
assigns to Customer, all ownership rights to any such proprietary ideas, data,
information, reports, and records to Customer. The data, information, reports
and records shall be the sole and exclusive property of Customer and Customer
shall own all rights therein, including without limitation, the copyright
therein, throughout the world. Supplier may not publish or in any way disclose
or use the data collected under this agreement without the prior written
approval of Customer.
12. DATA/INFORMATION EXCHANGE
Throughout the term of this Agreement, any and all hardware and software
applications where the resulting files and information created or stored by such
application is intended to be shared and/or transferred between the Parties will
be in compliance with and/or compatible to Customer's systems, hardware and
software applications. Such applications include, but are not limited to,
e-mail, word processing, spreadsheet, database and others.
13. REPRESENTATIONS AND WARRANTIES
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a) The Parties represent to each other that each party has all
necessary right, title, license and authority to enter into this
Agreement, and the persons signing this Agreement have full
authority to bind the respective parties they represent to the
terms and conditions hereof. The Parties represent that each:
i) is within its authorized powers;
ii) has been duly authorized by all necessary board and
management action;
iii) is not currently in violation and will not violate any
provision of its articles of incorporation; articles of
association or by-laws, or any amendment thereof; and
iv) is not currently in violation of and will not take any
action or fail to take any action which would constitute or
result in a violation or breach under, or conflict with, any
local, state, and/or federal statutes or other laws, any
orders or rulings of any court or tribunal, or any rules or
regulations thereof; and
v) is not currently in violation of and will not violate any
provision of, nor constitute or result in, a violation or
default under, or conflict with, any indenture , contract,
agreement, lease, instrument or other undertaking to which
it is a party or by which it or any of its properties or
assets may be bound or affected.
b) Supplier represents that it is not a party to any pending
litigation the resolution of which is reasonably likely to affect
adversely the ability of Customer or Supplier to fully perform
their respective obligations hereunder, nor is any such
litigation reasonably contemplated. Supplier agrees to inform
Customer in the event any such litigation occurs or becomes
reasonably contemplated during the Term of the Agreement.
c) Throughout the term of this Agreement and any applicable statute
of limitations thereafter, Supplier hereby
i) indemnifies and holds harmless Customer from and against all
loss or damage arising out of or in connection with the
breach of the foregoing representations, and
ii agrees on notice from Customer to promptly remedy and cure
any such breach at the sole cost and expense of Supplier.
d) Supplier warrants that the work performed hereunder does not
and will not infringe any third party patent, copyright,
trademark, trade secret or other proprietary right ("Intellectual
Property"). Supplier agrees to defend, indemnify and hold
harmless Customer, its officers, directors, employees, agents and
affiliates from all liabilities, obligations, costs and expenses
(including reasonable attorneys' fees and costs), claims or
demands for actual or alleged infringement of any Intellectual
Property arising from the purchase, use or sale of goods required
by this Agreement, except to the extent that infringement or
alleged infringement arises by reason of design for such work
furnished to Supplier by Customer.
e) Supplier agrees to treat Customer as a "Most Favored
Customer." Supplier represents that any fees, costs, or expenses
charged to Customer are, and will continue to be, equal to, or
better than, the fees, costs, or expenses
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charged to similar customers for similar Products. If requested
by Customer, Supplier shall submit documentation to Customer's
reasonable satisfaction, of Supplier's compliance hereto. If
non-compliance is discovered, a penalty as follows will become
due and owing to the Customer:
i. the amount calculated as the difference between Customer
pricing and any reduced pricing, applied retroactively to
the date of any lower fees, costs, or expenses,
ii. any expenses incurred by Customer in determining compliance
hereto, and
iii. an additional 5% of any difference calculated.
f) Supplier shall comply with all Customer's brand identity
standards as identified in the Graphic Standards Manual provided
by Customer. Customer shall be responsible for ensuring that all
subsequent updates to this manual are distributed to the Supplier
in a timely manner.
14.YEAR 2000 COMPLIANCE
a) Definitions. As used in this Section, these terms shall
have the following meaning:
i) "Products" means products which Supplier provides to
Customer.
ii) "Program" means Supplier's program to ensure that the
Products and Systems are or become Year 2000 Compliant by
assessing and remediating Year 2000 issues associated with
the Products and Systems, including functions provided by
third parties.
iii) "Systems" means Supplier's computer systems and
equipment and such systems maintained by Supplier's third
party service providers which are material to Supplier's
performance of this Agreement.
iv) "Year 2000 Compliant" means that the Products and
Systems:
a) will function accurately, completely, without
error, and without interruption before, during, and
after January 1, 2000 (including, without limitation,
on the "Critical Test Dates" listed in the FFIEC
Interagency Statement dated April 10, 1998), without
any change in operations associated with the year 2000
and any leap years,
b) will process all information before, during and
after January 1, 2000, including, but not limited to
accepting date input, providing date output, and
performing accurate calculations involving dates or
portions of dates,
c) will respond to two digit year dates in a way that
resolves the ambiguity as to century in a disclosed,
defined, and predetermined manner, and
d) will store and provide output of date information
in ways that are unambiguous as to century.
b) Commitments. Supplier represents and warrants that the
Products and Systems are Year 2000 Compliant except where lack of
compliance will not have a
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material adverse effect on performance of this Agreement.
Customer may test the Products and Systems using such tests as
Customer reasonably requires in Customer's sole discretion, and
if Customer does so Supplier will cooperate with Customer in
such testing, including in scheduling such tests during periods
which are convenient for Customer and in making Supplier's
resources available for such tests. Upon five (5) days advance
written notice to Supplier, Supplier shall allow Customer and
Customer's agents to inspect and conduct an audit of the
Program. Any actions or omissions by Customer under this
Section shall not relieve Supplier of any responsibility or
liability under this Agreement. Any breach by Supplier arising
under this Section is a default under this Agreement and shall
allow Customer to immediately terminate this Agreement, obtain
reimbursement for any amounts paid by Customer to Supplier but
not earned by Supplier's performance, and exercise any other
remedies permitted by law or this Agreement.
c). Reports. Supplier must immediately notify Customer in
writing if Supplier becomes aware of facts or circumstances that
may adversely affect Supplier's obligations under this Section,
in order that Customer and Supplier may make mutually agreed upon
contingency plans. Also, as reasonably requested by the
Customer, Supplier will promptly deliver to Customer in writing
information pertaining to this Section, including without
limitation a complete description of the Program and any changes,
updates, or amendment thereto, copies of any assessments, audits,
or public statements concerning the Program, costs data and
estimates concerning the Program, and Supplier's contingency
plans in the event the Program fails.
d) Supplier agrees to provide adequate and reasonable staffing
levels on December 31, 1999, January 1, 2000 and January 2, 2000
and also to have additional staff prepared and on call to work on
a twenty-four hour basis during those days in the event it
becomes necessary due to unforeseen and unplanned events
resulting from the change in year date regardless of whether such
an event is related to Supplier's Products, Systems or Products
or Customer's system or products.
15. RIGHT TO AUDIT
Customer will have the right at all times during the term of this Agreement and
for twelve (12) months after termination of the Agreement to audit the books,
records, information, personnel, facilities and operations of Supplier insofar
as may be necessary or desirable, in Customer's judgment, to determine
Supplier's compliance with the terms and conditions of this Agreement and with
any applicable laws and regulations. Such information shall be accessed without
breaching the confidentiality that Supplier may have with other parties. In
such an event, Customer will accept redacted information that has been gathered
by a third party auditor. Customer and Customer's independent auditors will have
access, no more than once every six months, unless Customer has reasonable
business purposes for doing so, to Supplier's books, records and operations at
all reasonable times, with at least 24 hours prior notice and Supplier agrees to
cooperate in all respects necessary to enable Customer and its independent
auditors to carry out the intent and purposes of this section. Customer and its
representatives must comply with all reasonable security and confidentiality
procedures established by Supplier at any facility to which access is granted,
and
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audits or inspections will not unreasonably interfere with Supplier's normal
business operation. Supplier agrees to provide Customer, upon written request,
a copy of Supplier's annual audit results of its products.
16. LIMITATION OF LIABILITY.
a) Supplier's liability hereunder for any claim of whatever nature
shall be limited to:
i) a maximum of the insurance amounts stated in Section 22 of
the Agreement if such claim is covered by insurance;
ii) a maximum aggregate limit of two million dollars
($2,000,000.00) if such claim is not covered by insurance
and such claim is for or relating to the provision of
Products under this Agreement;
iii) a maximum per occurrence limit of five hundred thousand
dollars ($500,000.00) if such claim is not covered by
insurance.
17. INDEMNIFICATION BY SUPPLIER.
Notwithstanding any provisions herein to the contrary, but subject to the limits
of liability set forth in Section 16 above, Supplier does hereby agree to
indemnify and hold Customer harmless from all losses, claims of losses, damages,
fines, costs and expenses (including without limitation court costs and
attorneys' fees) ("Losses") incurred by Customer or asserted against Customer by
third parties and directly and proximately caused by the negligent acts or
omissions or misconduct or breach of this Agreement by Supplier, its officers,
agents, employees, or authorized representatives. Subject to the limitations of
liability set forth in Section 16 above, this indemnification provision
includes, but is not limited to Losses relating to the following matters:
a) Any loss relating to or arising out of the installation,
maintenance, or operation of equipment at Customer's facilities
by Supplier;
b) Any Losses arising out of the hiring, termination, supervision,
and maintenance of Supplier's employees, including, but not
limited to, claims that Customer is an employer or co-employer
of any of Supplier's employees, agents, or authorized
representatives. Indemnification under this Section 17.b. shall
be unlimited in dollar amount except to the extent any such
Losses are caused by the acts or omissions of Customer
18. INDEMNIFICATION BY CUSTOMER
Customer will indemnify Supplier and hold Supplier harmless from any action or
claim and will defend at its expense any action brought against Supplier to the
extent that it is based on a claim that materials provided by Customer to
Supplier infringe a United States patent or copyright or the trade secret or
other proprietary rights of a third party ("Infringement"). Customer will pay
any costs, direct damages, and reasonable attorneys' fees finally awarded
against Supplier in such action which are attributable to such claim, provided
that Supplier notifies Customer promptly in writing of the claim and Customer
may fully participate in the defense and/or agrees to any settlement of such
claim.
19. DEFAULT AND REMEDIES.
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Subject to Section 17 above in the event that Supplier or any of its
Representatives breach the covenants contained in this Agreement or in the event
of the occurrence of an event entitling Customer to indemnification, Supplier
recognizes that irreparable injury will result to Customer or third parties and
that Customer's remedy at law for damages will be inadequate. In such event,
Customer shall further be entitled to recover from Supplier:
a) actual damages to Customer or its directors, officers,
employees or agents;
b) any costs, losses or damages associated with any claims by
third parties against
Customer;
c) reasonable attorneys' and other professionals' fees and
all other costs and expenses incurred in connection
with the enforcement of this Agreement, and any
other rights and remedies which Customer may have
at law or in equity.
CONFIDENTIALITY
a) DEFINITION OF CONFIDENTIAL INFORMATION. The term "Confidential
Information" as used in this Agreement, shall include all
confidential commercial or financial information of Customer or
its affiliates, now in existence or hereafter created, including
without limitation, the following:
i) All customer related information of the Customer, including,
but not limited to, customer account numbers and account
balances;
ii) All information marked as "confidential" or with similar
designation;
iii) All information protected by rights embodied in copyrights,
whether registered or unregistered, patents or pending
patent applications, "know how," trade secrets, and any
other intellectual property rights of Customer, and
iv) All proprietary business, financial or technical information
of Customer or its affiliates and any of their respective
customers or vendors (including, but not limited to account
numbers, general ledger numbers and software licensed from
third parties or owned by Customer).
b) EXCLUSION TO CONFIDENTIAL INFORMATION. Notwithstanding the
foregoing, the term "Confidential Information" shall not include
any portion of such information which Supplier can establish by
clear and convincing evidence to have become publicly known
without breach of an Agreement.
c) USE OF CONFIDENTIAL INFORMATION. Supplier may use the
Confidential Information only for the purpose of rendering the
Products to Customer. Unless otherwise agreed to in writing
between Customer and Supplier, from and after the date of this
Agreement, Supplier shall:
i) not reproduce, copy, duplicate, divulge or use any
Confidential Information, or allow any Confidential
Information to be reproduced, copied, duplicated, divulged
or used, except as expressly permitted above;
ii) require that all persons, employees, agents, partners,
consultants, contractors, representatives and any other
third parties (collectively, the "Representatives") who are
permitted access to any Confidential
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Information to agree to assume all of the same obligations
regarding the protection of the Confidential Information
assumed by Supplier under this Agreement; and
iii) keep all Confidential Information in a physically secure
place which will prevent anyone, except the Representatives
who are permitted access to the Confidential Information to
satisfy the purposes of this Agreement, from using or
disclosing any Confidential Information.
d) DEFAULT AND REMEDIES. In the event that Supplier or any of its
officers, agents, employees, or representatives breaches the
covenants contained in this section, Supplier recognizes that
irreparable injury will result to Customer or third parties
entrusting Confidential Information to Customer, that Customer's
remedy at law for damages will be inadequate, and that Customer
will be entitled to an injunction to restraint by continuing
breach by Supplier and Supplier's Representatives, or any other
persons or entities acting for or with Supplier. In such event,
Customer shall further be entitled to recover from Supplier:
i) actual damages to Customer or its directors, officers,
employees or agents;
ii) any costs, losses or damages associated with any claims by
third parties against Customer;
reasonable attorneys' and other professionals' fees and all other
costs and expenses incurred in connection with the
enforcement of this Agreement, and any other rights and
remedies which Customer may have at law or in equity.
21. DISASTER RECOVERY.
Supplier shall establish, maintain and test from time to time, but not less than
annually, a disaster recovery plan, and if necessary, shall implement the
provisions thereof applicable to any Supplier site at which the Products
contemplated by this Agreement are then being performed. Such plan will include
details pertaining to Supplier's alternative production and/or distribution
facilities in order for Supplier to be operating as near normal as possible but
not less than twenty four (24) hours from the time of the disaster. Supplier
shall make such disaster recovery plan available to Customer for Customer's
review at any time as requested by Customer. If, for any reason, the Supplier's
disaster recovery plan is implemented, the implementation of such plan shall be
at no cost or expense to Customer.
22. ACCOUNTING PRINCIPLES.
Where the character or amount of any item of income, revenue, costs, expenses
or similar monetary calculation is required to be determined or other accounting
computation is required to be made for purposes of this Agreement, this will be
done in accordance with generally accepted accounting principles consistently
applied. The provision of this section will survive any termination of this
Agreement.
23. INSURANCE.
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Supplier agrees to maintain the following indicated types and levels of
insurance during the term of this Agreement with carriers that maintain:
a) Workers' compensation and employers liability insurance and to
the extent required by law covering all persons employed by
Supplier in performance of Products to be rendered under this
Agreement;
b) Public liability insurance with broad form coverage covering,
liability for bodily and personal injury, damage to property,
false arrest, false imprisonment, malicious prosecution,
defamation, liable, slander, legal liability caused by any act of
Supplier or its employees or agents, and contractual liability
coverage. The amount of this insurance must not be less than the
amount reasonably prudent and necessary to carry out Supplier's
obligations under this Agreement but in no event less than $1
million per occurrence plus an $2 million umbrella policy for a
total aggregate limit of not less than $3 million.
c) After execution of this Agreement and before beginning work under
this Agreement, Supplier will deliver to Customer and attach to
this Agreement as Exhibit C a Certificate of Insurance showing
the coverage specified above, which names Customer as an
additional insured, and which provides a thirty (30) day notice
period for cancellation or reduction in coverage or limits.
d) Fidelity bonding of at least $1,000,000 aggregate for claims
arising from fraudulent or dishonest acts, thefts or other acts,
covered by its Fidelity Bond, on the part of Supplier or its
officers, agents, employees, or representatives.
e) Errors and Omissions insurance of at least $2,000,000 per
occurrence.
c) Supplier will immediately notify Customer in the event any
insurance required under this section is not in force at any
time during the term of this Agreement. Supplier will not take
any action that would invalidate or reduce coverage and will
take all action necessary to prevent coverage from being
invalidated or reduced.
24. FORCE MAJEURE.
Neither party shall be liable for performing service where cause for such
failure to perform service is directly or indirectly beyond the control of such
party. Any delay hereunder will be excused to the extent approved in writing by
the other party. Neither party will be considered to have breached its
obligations under this Agreement as a consequence of delays or failures in
performance resulting from occurrences beyond the parties control, provided the
party has taken reasonable measures to prevent loss from any such reasonably
foreseeable occurrence. Such occurrence will include, without limitation; acts
of God; riots; acts of war; epidemics; governmental regulations imposed after
the fact; earthquakes or other disasters; provided that written notice thereof
must be given by such party to the other party within three (3) days of the
occurrence of such cause or event, and best efforts are made to restore
performance to its obligations under this Agreement or delay will be considered
a breach of the Agreement. In the event the Force Majeure event causes a delay
that lasts more than five (5) business days, Customer has the right to
terminate this Agreement without further obligation, financial or otherwise,
except for non-financial obligations which expressly survive the termination of
this Agreement. In addition, Supplier shall return any monies paid by Customer
for products or services not delivered.
25. WAIVER.
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Failure of either party to complain of any act or omission of the other party,
no matter how long the same may continue, shall not be deemed to be a waiver by
such party of any of its rights hereunder. No waiver by any party at any time
of any other provision of this Agreement shall be deemed a waiver or breach of
any other provision of this Agreement or consent to any subsequent breach of the
same of any other provision hereunder. If any act or omission by any party
shall require the consent or approval of another party, such consent or approval
of such act or omission on any one occasion shall not be deemed a consent to or
approval of said act or omission on any subsequent occasion or consent to or
approval of any other act or omission on the same or any subsequent occasion.
Waiver of any rights or remedies must be in a signed writing by the waiving
party.
26. SEVERABILITY.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof; and the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of each such illegal, invalid or unenforceable provision,
there shall be added automatically as a part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable.
27. GOVERNING LAW.
This Agreement will be construed and enforced in accordance with and governed
by the substantive laws of the state of Minnesota; provided, that laws regarding
conflicts of laws will not defeat application of the substantive laws of the
state of Minnesota. The provisions of this section will survive any termination
of this Agreement.
28. JURISDICTION.
Supplier hereby irrevocably submits to the nonexclusive jurisdiction of any
court of the State of Minnesota or the United States of America sitting in
Minneapolis, Minnesota, in any action or proceeding arising out of or relating
to this Agreement, and the Supplier hereby irrevocably agrees that all claims in
respect of such action or proceeding may be heard and determined in any such
court. Supplier hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action or proceeding.
29. ASSIGNMENT.
Neither party may assign this Agreement without the prior written consent of
the other, and any non-approved attempted assignment shall be null and void,
except that Customer may assign this Agreement without such approval to any
parent, subsidiary or affiliate. This Agreement shall be binding upon, and inure
to benefit of, the successors and permitted assigns of the parties hereto.
30.USE OF NAME.
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Except as otherwise required by law, Supplier agrees not to refer to Customer
directly or indirectly in any promotion or advertisement, any metatag, any news
release or release to any general or trade publication or any other media,
without the prior written consent of Customer, which consent may be withheld at
Customer's sole and complete discretion.
31. RELATIONSHIP OF THE PARTIES.
No joint venture, partnership, agency, employment relationship or other joint
enterprise is contemplated by this Agreement. No employee or representative of
Supplier shall be considered an employee of Customer. Supplier shall take all
actions and do all things which are necessary ensure that it has complied with
all laws respecting its position as provider of the Products pursuant to this
Agreement. In making and performing this Agreement, the Parties shall act at
all times as independent contractors, and at no time shall either party make any
commitments or incur any charges or expenses for or in the name of the other
party.
32. NOTICES.
Any notice permitted or required by this Agreement must be in writing and shall
be deemed given when sent by registered or certified mail, return receipt
requested, or overnight delivery and addressed as follows:
If to Supplier: (insert information)
If to Customer: U.S. Bancorp-Registered Trademark-
MNRB0175/Contract Services
0000 Xxxxxxx Xxxx
Xx. Xxxx, XX 00000
33. COUNTERPARTS.
This Agreement may be executed simultaneously in multiple counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
34. HEADINGS.
The paragraph headings contained in this Agreement are for convenient reference
only, and shall not in any way affect the meaning or interpretation of this
Agreement.
35. ENTIRE AGREEMENT.
This Agreement contains the entire understanding of the Parties with respect to
the subject matter hereof and supersedes all prior agreements relating thereto,
written or oral, between the Parties. Amendments to this Agreement must be in
writing, signed by the duly authorized agents of the Parties.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement the date
first above written.
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U.S. Bancorp-Registered Trademark- (INSERT INFORMATION)
__________________________________ _____________________________
Signature Signature
__________________________________ _____________________________
By: Name By: Name
__________________________________ _____________________________
Its: Title Its: Title
__________________________________ _____________________________
Date Date
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EXHIBIT A
STATEMENT OF WORK
SUPPLIER AGREES TO PROVIDE PRODUCTS TO CUSTOMER IN ACCORDANCE WITH THE
PERFORMANCE STANDARDS DESCRIBED IN THE STATEMENT OF WORK ATTACHED HERETO
AND MADE PART OF THE AGREEMENT AND INCORPORATED HEREIN AS EXHIBIT A.
Services to be provided:
CHANGES TO THE STATEMENT OF WORK
- The Statement of Work may not be changed or amended except by an agreement
in writing signed by the parties hereto.
BUSINESS CONTINUATION AND RECOVERY
- Supplier will maintain a viable Business Continuation Plan throughout the
term of this agreement in conjunction with Customer's corporate Business
Continuation Plan, which will contain planning for uninterrupted service
during work stoppages longer than six (6) hours, of Supplier's provision of
Services to Customer.
- Supplier will maintain a viable Business Recovery Plan throughout term of
this agreement in conjunction with Customer's corporate Business Recovery
Plan, which will provide for business resumption and continuation of
service within twenty-four (24) hours of such occurrence.
IMPLEMENTATION
- Supplier shall, timely complete all tasks, included but not limited to, the
Implementation plan set forth in Attachment A.
- In the event such task will not be completed on the date noted in the
Implementation plan, Supplier shall notify Customer on such date, in
writing and Customer, in it's sole discretion, shall advise if the delay is
acceptable or unacceptable to Customer.
- In the event that such delay is acceptable to Customer, in writing,
Supplier and Customer shall mutually agree to a new date, for the task to
be completed.
- In the event that such delay is unacceptable, Supplier shall be responsible
for all additional costs associated with, Customer having the Products
provided by alternative sources plus such costs incorporated as a result of
such provision of alternative sources.
PACKAGING OF PRODUCTS
Suppliers responsibility shall be, including but not limited to:
- Provide packaging to facilitate the handling of product from one point
to another. Sufficient packaging methodology used must be compatible
with the physical facilities of the receiving location to ensure
receipt of product in an unaltered condition.
- Batch, Block and Tracer tickets packaged in cartons that will prevent
curl to the product. Customer, in it's sole discretion, may required
these product to be shrink wrapped, if requested by Customer.
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- Package Products using pallets that comply with recommended guidelines
for standard pallet size of 40" x 48" with no overhang. The maximum
height is 48". Plastic shrink-wrap must be used for protection and to
fasten the load to the pallet.
- Package Official Receipts such that inner cartons contain 2500
receipts and a total of 20,000 Official Receipts will be in a carton.
- When shipping negotiable documents, ensure product name is not
identified on the outside of the carton, when packaging product.
- Delivery of Products that are sequentially numbered must be packaged
in a manner that will keep items in the sequential order during
shipping.
- Establish parameters, upon mutual agreement, for packaging
requirements on all Products and have procedures within 60 days after
execution of the agreement.
ORDERING PROCESS
- Supplier shall accept orders on Customer's purchase requisition form unless
both Supplier and Customer mutually agree upon an alternative process for
efficient ordering.
- Supplier shall provide toll free fax number, at no charge to the Customer,
for requisitions.
PRODUCTION
- Supplier and Customer shall establish approved quantities for printing
Products that are cost effective for Customer, within 30 days after
execution of the agreement.
- Supplier shall not print quantities outside established parameter without
written approval from Customer. If approval for Product outside parameters
is not received in writing, cost of Product will be refunded to Customer.
RELEASE QUANTITIES
- Supplier and Customer shall establish quantities for release of Products
from warehouse, within 30 days after execution of the agreement. These
parameters will vary according to product and will be released in
quantities that are cost effective for Customer.
- Any Product released outside the set parameters must receive approval from
Customer. If Supplier has released Product that is not in compliance with
such parameters, the cost of Product will be refunded to Customer and
unused product returned to Supplier..
WAREHOUSED PRODUCTS
Suppliers responsibility shall be, including but not limited to:
- Supplier will warehouse certain products per Customer's request.
These products will be billed upon release. Such Products will not
exceed a three-month usage level.
- Supplier will notify Customer when an individual Product on-hand
inventory level reaches a 6-week supply based on usage levels during
the most previous six month period.
- Re-order notice will include a summary of the most recent 12-month
usage history of Product.
- No Product will be replenished without prior written approval by
Customer designated personnel
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- All negotiable instruments will be stored in a secure, locked area
with limited access by mutually approved personnel.
- Provide Customer access upon demand for unannounced random audits of
warehousing locations.
- Provide quarterly, audit of all Products held in warehouse.
Adjustments to inventory levels shall be reported to Customer within
forty-eight (48) hours of such audit. Accuracy level must be
maintained at 90%.
- All warehouse locations shall be secured; climate controlled, and
reasonable and prudent measures are taken to ensure risk against
rodent, fire and water damage.
- Supplier shall assume ownership of all Products until such Products
are released from Supplier inventory and shipped to Customer.
NON-STOCK PRODUCTS
- Any item not included on the product list in Exhibit B, must be approved in
writing by Customer's Designated Personnel, for pricing and product
requirements prior to manufacturing. Product sold without such prior
written Customer approval will be fully refunded to Customer.
Production Time
Suppliers responsibility shall be, including but not limited to:
- Release and shipment of Product from Warehouse for shipment within 24
hours from receipt of requisition.
- Print on Demand Production ("PODP") will within ten (10) business days
of receipt of requisition, except for PODP orders for bank conversion
purposes only which shall be shipped before a deadline specified by
Customer.
- Exact reprints on warehoused Product not to exceed 45 business days
upon written approval by Customer.
Any order that requires fulfillment outside the above mentioned time frames
(Standard Order) will be considered a Rush Order and will be accepted on an
individualized priority basis at no additional cost to the Customer so long
as the quantity of Rush Orders does not exceed four percent (4%) of the
total number of orders per month. If Customer's Rush Orders exceed four
percent (4%) of Customer's total orders for the month, Customer's price for
any such Rush Orders shall incur a Rush Order penalty fee of thirty percent
(30%) of the order total. Any such Rush Order penalty fees shall be
deducted from Customer's quarterly rebate, as defined in Section 5.e.
NEGOTIABLE DOCUMENTS
- Supplier shall hold all negotiable instruments in a secured location in
Supplier's warehouse with limited access to only mutually approved
personnel.
- Supplier will shred all, including but not limited to, negatives, film,
direct to plate material used for manufacturing Products.
CUSTOMER SERVICE
- Supplier shall provide a toll free customer service number that will be
staffed Monday through Friday between the hours of 8:00 AM CST and 7:00 PM
CST.
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- Supplier will provide at a minimum three (3) full-time, dedicated Customer
Service Representatives. The Customer Service Representative's
responsibilities include, but are not limited to, providing the following
services:
- Pricing and product information to requesters
- Order status upon request
- Response to Customer's inquires within twenty four (24) hours of
receipt.
- Problem solving and documentation; reporting all account issues
to Supplier Account Manager
- Supplier will provide a dedicated Account Manager based in Minnesota with
assigned back up for Customer. The Account Manager's responsibilities
include, but are not limited to, the following:
- Primary contact with Customer Designated Personnel.
- Primary contact for implementing new forms.
- Managing Product release during Customer's acquisitions and
conversions
- Escalation contact for issue resolution by Customer designated
personnel.
- Scheduling monthly and quarterly account performance reviews.
- Propose cost savings initiatives pursuant to customer's Products
and implement such initiatives upon the written approval of
Customer.
PRODUCT SHIPMENT
Customer's Product will be shipped using the most economical and efficient
method with sufficient tracking capabilities. In no event shall the cost to
Customer exceed the current Zone 2 rate as defined by United Parcel Service
(UPS). Zone 2 rate will be based on location of production plant Supplier
shall absorb all costs incurred above the Zone 2 rate.
QUALITY PERFORMANCE
Suppliers responsibility shall be, including but not limited to:
- Supplier shall perform, without error, encoding of customer data on
Product as received by Customer
- Monthly review and report of performance standards for Products
purchased during the previous month, including but not limited to:
- On time delivery status
- Percent of orders on back order status
- Number of orders returned for quality issues - brief explanation
of returned item.
- Accuracy of Orders
- Accuracy of Documents
- Number of Rush Orders
- MICR Readability Rates: MICR documents shall have a readability rate
of no less than 98.5% during each monthly period. If MICR readability
rate is less than 98.5% for two (2) consecutive months, Supplier shall
rebate to Customer an amount equal to 5% of all MICR purchased made by
Customer pursuant to this Agreement during such monthly period. A
21
rebate check shall be issued to Customer within 5 business days of
receipt of 3rd party analysis.
- In order to obtain MICR readability rate information, Supplier shall
provide, to an unrelated third party, one sample document for each
MICR order produced. Samples will be tested by the third party on a
weekly basis. If MICR is found defective, that order shall be
replaced within forty eight hours of discovery and shipped overnight
at no expense to the Customer. Test results must be provided to
Customer on monthly basis for the previous months work.
SAMPLE TEST DOCUMENTS
Supplier's responsibilities include, but are not limited to:
- Provision of MICR test documents, of no less than 10 samples per document
type, to Customer's Document Quality Department for each new branch and
with each Customer's acquisition, at no charge to the customer. Test
documents will be based on Products requisitioned. Test Documents will be
shipped within timeframes requested.
- If MICR read rate falls below 98.5%, one sample test document for each MICR
production order for 30 prospective days will be provided, at no charge to
Customer.
Customer has the option of requesting MICR test samples for one (1) week's
worth of production no more than four (4) times a year. One MICR document
will be provided to customer for each MICR order filled, at no charge to
the customer.
PROCESS IMPROVEMENT
- Supplier shall provide ongoing information to Customer, in a timely manner
on cost savings opportunities, quality and process improvement, and service
enhancements.
- Supplier shall provide ongoing information to Customer for technology
enhancements and improvements in manufacturing MICR Documents. Such
opportunities will be analyzed and presented to the Customer designated
personnel for decisions on implementation.
- Supplier shall develop and, upon Customer's approval, implement program(s)
for controlling costs and educating Customer employees and representatives
of the Financial Forms Program.
SUPPLIER'S TRAINING
- Supplier shall provide at a minimum, annual education to Customer personnel
through various formats, including fliers, open houses, service guides, and
presentations, on all Financial Forms related topics. All materials must
be approved by Customer.
REPORTS
SUPPLIER'S RESPONSIBILITY SHALL BE TO PROVIDE:
- No later than the fifth working day of each month the following reports:
- TOTAL DOLLARS SPENT FOR THE PREVIOUS CALENDAR MONTH WITH BREAKDOWN OF
FREIGHT CHARGES AND SALES TAX.
- Inventory Report on Warehoused Product including but not limited to:
- Last Months Usage
- Six month average usage of each Product
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- Twelve month total usage of each Product
- On Hand Quantity of each Product
- Sell Price of each Product
- Inventory Value of each Product
- Must have the capability of issuing monthly usage reports for requesting
company/cost centers.
- Total dollars of approved cost savings
- Customer Service response time, including but not limited to, number or
calls received, average hold time statistics on a monthly basis.
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EXHIBIT B
PRICE GRID
EXHIBIT C
INSURANCE CERTIFICATES
[To be incorporated upon Supplier selection]
24
EXHIBIT D
CUSTOMER'S REQUEST FOR PROPOSAL
[To be incorporated upon Supplier selection]
25
EXHIBIT D
SUPPLIER PROPOSAL TO CUSTOMER'S REQUEST FOR PROPOSAL
[To be incorporated upon Supplier selection]
26
