EXHIBIT 10.6
AGREEMENT
between
FISERV SOLUTIONS, INC.
000 Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
and
HARBOR CAPITAL NATIONAL BANK
Rockville, MD
Date: February 19, 1999
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AGREEMENT dated as of February 19, 1999 ("Agreement") between FISERV SOLUTIONS,
INC., a Wisconsin corporation ("Fiserv'), and HARBOR CAPITAL NATIONAL BANK, a
Rockville, MD ("Client").
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Fiserv and Client hereby agree as follows:
1. Term. The initial term of this Agreement shall be 5 years and, unless
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written notice of non-renewal is provided by either party at least 180 days
prior to expiration of the initial term or any renewal term, this Agreement
shall automatically renew for a renewal term of 5 years. Client reserves the
option to cancel the Agreement after initial thirty-six (36) months of the term,
provided Fiserv is given one hundred and eighty (180) days advance written
notice. Exercise of this option shall not be considered termination for
convenience. This Agreement shall commence on the day Fiserv Services are first
used by Client.
2. Services. (a) Services Generally. Fiserv, itself and through its
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affiliates, agrees to provide Client, and Client agrees to obtain from Fiserv
services ("Services") and products ("Products") (collectively, "Fiserv
Services") described in the attached Exhibits:
Exhibit A - Account Processing Services
The Exhibits set forth specific terms and conditions applicable to the
Services and/or Products, and, where applicable, the Fiserv affiliate so
performing. Client may select additional services and products from time to time
by incorporating an appropriate Exhibit to this Agreement.
(b) Conversion Services. Fiserv will convert Clients existing applicable
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data and/or information to the Fiserv Services. Those activities designed to
transfer the processing from Clients present servicer to the Fiserv Services are
referred to as "Conversion Services". Client agrees to cooperate with Fiserv in
connection with Fiserv's provision of Conversion Services and to provide all
necessary information and assistance to facilitate the conversion. Client is
responsible for all reasonable out-of-pocket expenses associated with the
Conversion Services. Fiserv will provide Conversion Services as required in
connection with Fiserv Services.
(c) Training Services. Fiserv shall provide training, training aids,
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user manuals, and other documentation for Client's use as Fiserv finds necessary
to enable Client personnel to become familiar with Fiserv Services. If requested
by Client, classroom training in the use and operation of Fiserv Services will
be provided at a training facility. All such training aids and manuals remain
Fiserv's property.
3. Fees for Fiserv Services. (a) General. Client agrees to pay Fiserv:
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(i) estimated fees for Fiserv Services for the following month as
specified in the Exhibits;
(ii) estimated out-of-pocket charges for the following month
payable by Fiserv for the account of Client; and
(iii) estimated Taxes (as defined below) thereon (collectively,
"Estimated Fees").
Fiserv shall timely reconcile Estimated Fees paid by Client for the Fiserv
Services for the month and the fees and charges actually due Fiserv based on
Clients actual use of Fiserv Services for such month. Fiserv shall either issue
a credit to Client or provide Client with an invoice for any additional fees or
other charges owed. Fiserv may change the amount of Estimated Fees billed to
reflect appropriate changes in actual use of Fiserv Services. Estimated Fees may
be increased from time to time as set forth in the Exhibits. Upon notification
to and acceptance by Client, Fiserv may increase its fees in excess of amounts
listed in the Exhibits in the event that Fiserv implements major system
enhancements to comply with changes in law, government regulation, or industry
practices.
(b) Additional Charges. Fees for out-of-pocket expenses, such as
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telephone, microfiche, courier, and other charges incurred by Fiserv for goods
or services obtained by Fiserv on Client's behalf shall be billed to Client at
cost plus the applicable Fiserv administrative fee. Such out-of-pocket expenses
may be changed from time to time upon notification of a fee change from a
vendor/provider.
(c) Taxes. Fiserv shall add to each invoice any sales, use, excise,
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value added, and other taxes and duties however designated that are levied by
any taxing authority relating to the Fiserv Services ("Taxes"). In no event
shall "Taxes" include taxes based upon the net income of Fiserv.
(d) Exclusions. The Estimated Fees do not include, and Client shall be
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responsible for, fumishing transportation or transmission of information between
Fiserv's service center(s), Client's site(s), and any applicable clearing house,
regulatory agency, or Federal Reserve Bank.
(e) Payment Terms. Estimated Fees are due and payable monthly upon
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receipt of invoice. Client shall pay Fiserv through the Automated Clearing
House. In the event any amounts due remain unpaid beyond the 30th day after
payment is due, Client shall pay a late charge of 1.5% per month. Client agrees
that it shall neither make nor assert any right of deduction or set-off from
Estimated Fees on invoices submitted by Fiserv for Fiserv Services.
4. Access to Fiserv Services. (a) Procedures. Client agrees to comply with
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applicable regulatory requirements and procedures for use of Services
established by Fiserv.
(b) Changes. Fiserv continually reviews and modifies Fiserv systems used
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in the delivery of Services (the "Fiserv System") to improve service and comply
with government regulations, if any, applicable to the data and information
utilized in providing Services. Fiserv reserves the right to make changes in
Services, including but not limited to operating procedures, type of equipment
or software resident at, and the location of Fiserv's service center(s). Fiserv
will notify
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Client of any material change that affects Client's normal operating procedures,
reporting, or service costs prior to implementation of such change. Should
Fiserv discontinue the use of the Fiserv "ITI" System, the client shall have the
right to terminate this agreement.
(c) Communications Lines. Fiserv shall order the installation of
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appropriate communication lines and equipment to facilitate Client's access to
Services. Client understands and agrees to pay charges relating to the
installation and use of such lines and equipment as set forth in the Exhibits.
(d) Terminals and Related Equipment Client shall obtain necessary and
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sufficient terminals and other equipment, approved by Fiserv and compatible with
the Fiserv System, to transmit and receive data and information between Client's
location(s), Fiserv's service center(s), and/or other necessary location(s).
Fiserv and Client may mutually agree to change the type(s) of terminal and
equipment used by Client.
5. Client Obligations. (a) Input Client shall be solely responsible for
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the input, transmission, or delivery to and from Fiserv of all information and
data required by Fiserv to perform Services unless Client has retained Fiserv to
handle such responsibilities, as specifically set forth in the Exhibits. The
information and data shall be provided in a format and manner approved by
Fiserv. Client will provide at its own expense or procure from Fiserv all
equipment, computer software, communication lines, and interface devices
required to access the Fiserv System. If Client has elected to provide such
items itself, Fiserv shall provide Client with a list of compatible equipment
and software; Client agrees to pay Fiserv's standard fee (prevailing hourly
programming rate) for recertification of the Fiserv System resulting therefrom.
(b) Client Personnel. Client shall designate appropriate Client
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personnel for training in the use of the Fiserv System, shall supply Fiserv with
reasonable access to Client's site during normal business hours for Conversion
Services and shall cooperate with Fiserv personnel in their performance of
Services, including Conversion Services.
(c) Use of Fiserv System. Client shall (i) comply with any operating
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instructions on the use of the Fiserv System provided by Fiserv; (ii) review all
reports furnished by Fiserv for accuracy; and (iii) work with Fiserv to
reconcile any out of balance conditions. Client shall determine and be
responsible for the authenticity and accuracy of all information and data
submitted to Fiserv.
(d) Client's Systems. Client shall be responsible for ensuring that its
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systems are Year 2000 compliant and capable of passing and/or accepting date
formats from and/or to the Fiserv System.
6. Ownership and Confidentiality. (a) Definition.
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(i) Client Information. "Client Information" means: (A)
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confidential plans, customer lists, information, and other proprietary material
of Client that is marked with a restrictive
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legend, or if not so marked with such legend or is disclosed orally, is
identified as confidential at the time of disclosure (and written confirmation
thereof is promptly provided to Fiserv); and (B) any information and data
concerning the business and financial records of Client's customers prepared by
or for Fiserv, or used in any way by Fiserv in connection with the provision of
Fiserv Services (whether or not any such information is marked with a
restrictive legend); and (C) information that is not discloseable pursuant to
applicable Federal and/or state law
(ii) Fiserv Information. "Fiserv Information" means: (A)
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confidential plans, information, research, development, trade secrets, business
affairs (including that of any Fiserv client supplier, or affiliate), and other
proprietary material of Fiserv that is marked with a restrictive legend, or if
not so marked with such legend or is disclosed orally, is identified as
confidential at the time of disclosure (and written confirmation thereof is
promptly provided to Client); and (B) Fiserv's proprietary computer programs,
including custom software modifications, software documentation and training
aids, and all data, code, techniques, algorithms, methods, logic, architecture,
and designs embodied or incorporated therein (whether or not any such
information is marked with a restrictive legend).
(iii) Information. "Information" means Client Information and Fiserv
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Information. No obligation of confidentiality applies to any Information that
the receiving party ("Recipient") (A) already possesses without obligation of
confidentiality; (B) develops independently; or (C) rightfully receives without
obligation of confidentiality from a third party. No obligation of
confidentiality applies to any Information that is, or becomes, publicly
available without breach of this Agreement.
(b) Obligations. Recipient agrees to hold as confidential all
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Information it receives from the disclosing party ("Discloser"). All Information
shall remain the property of Discloser or its suppliers and licensors.
Information will be returned to Discloser at the termination or expiration of
this Agreement. Recipient will use the same care and discretion to avoid
disclosure of Information as it uses with its own similar information that it
does not wish disclosed, but in no event less than a reasonable standard of
care. Recipient may use Information for any purpose that does not violate such
obligation of confidentiality. Recipient may disclose Information to (i)
employees and employees of affiliates who have a need to know; and (ii) any
other party with Discloser's written consent. Before disclosure to any of the
above parties, Recipient will have a written agreement with such party
sufficient to require that party to treat Information in accordance with this
Agreement. Recipient may disclose Information to the extent required by law.
However, Recipient agrees to give Discloser prompt notice so that it may seek a
protective order. The provisions of this sub-section survive any termination or
expiration of this Agreement.
(c) Residuals. Nothing contained in this Agreement shall restrict
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Recipient from the use of any ideas, concepts, know-how, or techniques contained
in Information that are related to Recipient's business activities
("Residuals"), provided that in so doing, Recipient does not breach its
obligations under this Section. However, this does not give Recipient the right
to disclose the Residuals except as set forth elsewhere in this Agreement.
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(d) Fiserv System. The Fiserv System contains information and computer
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software that are proprietary and confidential information of Fiserv, its
suppliers, and licensors. Client agrees not to attempt to circumvent the devices
employed by Fiserv to prevent unauthorized access to the Fiserv System,
including, but not limited to, alterations, decompiling, disassembling,
modifications, and reverse engineering thereof.
(e) Confidentiality of this Agreement. Fiserv and Client agree to keep
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confidential the prices, terms and conditions of this Agreement without
disclosure to third parties.
7. Regulatory Agencies. Regulations and Legal Requirements. (a) Client
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Files. Records maintained and produced for Client ("Client Files") may be
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subject to examination by such Federal, State, or other governmental regulatory
agencies as may have jurisdiction over Client's business to the same extent as
such records would be subject if maintained by Client on its own premises.
Client agrees that Fiserv is authorized to give all reports, summaries, or
information contained in or derived from the data or information in Fiserv's
possession relating to Client when formally requested to do so by an authorized
regulatory or government agency.
(b) Compliance with Regulatory Requirements. Client agrees to comply
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with applicable regulatory and legal requirements, including without limitation:
(i) submitting a copy of this Agreement to the appropriate
regulatory agencies prior to the date Services commence;
(ii) providing adequate notice to the appropriate regulatory
agencies of the termination of this Agreement or any
material changes in Services;
(iii) retaining records of its accounts as required by regulatory
authorities;
(iv) obtaining and maintaining, at its own expense, any Fidelity
Bond required by any regulatory or governmental agency; and
(v) maintaining, at its own expense, such casualty and business
interruption insurance coverage for loss of records from
fire, disaster, or other causes, and taking such precautions
regarding the same, as may be required by regulatory
authorities.
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8. Warranties. (a) Fiserv Warranties. Fiserv represents and warrants
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that:
(I) (A) Services will conform to the specifications set forth in the
Exhibits and to all applicable Fiserv documentation; (B) Fiserv will perform
Client's work accurately (include but not limited to: (i) the provision of
Fiserv Services before, during and after the Year 2000 and (ii) the processing
of date information, regardless of the century) provided that Client supplies
accurate data and information, and follows the procedures described in all
Fiserv documentation, notices, and advices; (C) Fiserv personnel will exercise
due care and follow applicable industry standards in provision of Services; (D)
the Fiserv System will comply in all material respects with all applicable
Federal and State regulations governing Services; and (E) the Fiserv System is
Year 2000 compliant (as defined below). In the event of an error or other
default caused by Fiserv personnel, systems, or equipment, Fiserv shall correct
the data or information and/or reprocess the affected item or report at no
additional cost to Client. Client agrees to supply Fiserv with a written request
for correction of the error within 7 days after Client's receipt of the work
containing the error. Work reprocessed due to errors in data supplied by Client
on Client's behalf by a third party, or by Client's failure to follow procedures
set forth by Fiserv shall be billed to Client at Fiserv's then current time and
material rates provided, however, that Fiserv agrees to obtain Client's prior
approval before performing such time and material work; and (II) it owns or has
a license to furnish all equipment or software comprising the Fiserv System.
Fiserv shall indemnify Client, its officers, directors, employees, and
affiliates and hold it harmless against any claim or action that alleges that
the Fiserv System use infringes a United States patent, copyright, or other
proprietary right of a third party. Client agrees to notify Fiserv promptly of
any such claim and grants Fiserv the sole right to control the defense and
disposition of all such claims. Client shall provide Fiserv with reasonable
cooperation and assistance in defense of any such claim. (III) (A) Fiserv
represents and warrants that the Fiserv system will: (a) calculate, sort,
report, and otherwise operate correctly and in a consistent manner for all date
information processed by the Fiserv System whether before; during or after the
Year 2000; (b) calculate, sort, report and otherwise operate correctly, in a
consistent manner and without material interruption regardless whether the date
on which the Fiserv System is operated or is executed is before, during or after
the Year 2000; and (c) handle all leap years including but not limited to the
Year 2000 leap year, correctly. Fiserv also represents and warrants that
neither the transition to Year 2000 nor any other date will have a material
adverse affect on Fiserv's provision of the Fiserv Services. Fiserv further
represents and warrants that it will perform all necessary testing to ensure
compliance with the other warranties contained in this paragraph. Fiserv shall
provide Client with regular monthly updates on the status of compliance and
testing related to Year 2000. In the event that Fiserv fails to meet the
compliance obligations contained in this paragraph, the Client may, at Client's
sole option: (1) demand a cure for such default, which Fiserv shall correct
promptly; (2) demand Fiserv to move Client to another Fiserv platform that is
Year 2000 compliant at no additional cost to Client; or (3) elect to terminate
this Agreement without the payment of any early termination fees. (B) The
Fiserv System and information delivered to Client, will not knowingly contain
any pre-programmed devices or "viruses" that would cause the Fiserv System or
any client system to be erased, become inoperable of processing or affect
operations of other systems, and (ii) Fiserv will employ throughout the term
commercially reasonable virus screening and other software and technology
designed to detect and/or prevent such viruses.
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THE WARRANTIES STATED ABOVE ARE LIMITED WARRANTIES AND ARE THE ONLY WARRANTIES
MADE BY FISERV. FISERV DOES NOT MAKE, AND CLIENT HEREBY EXPRESSLY WAIVES, ALL
OTHER WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. THE STATED EXPRESS WARRANTIES AND OTHER OBLIGATIONS SET
FORTH IN THIS AGREEMENT ARE IN LIEU OF ALL LIABILITIES OR OBLIGATIONS OF FISERV
FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE DELIVERY, USE, OR
PERFORMANCE OF FISERV SERVICES.
(b) Client Warranties. Client represents and warrants that: (A) no
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contractual obligations exist that would prevent Client from entering into this
Agreement; (B) it has complied with all applicable regulatory requirements; and
(C) Client has requisite authority to execute, deliver, and perform this
Agreement. Client shall indemnify and hold harmless Fiserv, its officers,
directors, employees, and affiliates against any claims or actions arising out
of (X) the use by Client of the Fiserv System in a manner other than that
provided in this Agreement; and (Y) any and all claims by third parties through
Client arising out of the performance and non-performance of Fiserv Services by
Fiserv, provided that the indemnity listed in clause (Y) hereof shall not
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preclude Client's recovery of direct damages pursuant to the terms and subject
to the limitations of this Agreement
9. Limitation of Liability. (a) General. IN NO EVENT SHALL FISERV BE
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LIABLE FOR LOSS OF GOODWILL, OR FOR SPECIAL, INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES ARISING FROM CLIENT'S USE OF FISERV SERVICES, OR FISERV'S
SUPPLY OF EQUIPMENT OR SOFTWARE, REGARDLESS OF WHETHER SUCH CLAIM ARISES IN TORT
OR IN CONTRACT. CLIENT MAY NOT ASSERT ANY CLAIM AGAINST FISERV MORE THAN 2 YEARS
AFTER SUCH CLAIM ACCRUED. FISERV'S AGGREGATE LIABILITY FOR ANY AND ALL CAUSES OF
ACTION RELATING TO SERVICES SHALL BE LIMITED TO THE TOTAL FEES PAID BY CLIENT TO
FISERV FOR SERVICES RESULTING IN SUCH LIABILITY IN THE 2 MONTH PERIOD PRECEDING
THE DATE THE CLAIM ACCRUED. FISERV'S AGGREGATE LIABILITY FOR A DEFAULT RELATING
TO EQUIPMENT OR SOFTWARE SHALL BE LIMITED TO THE AMOUNT PAID BY CLIENT FOR THE
EQUIPMENT OR SOFTWARE.
(b) Lost Records. If Client's records or other data submitted for
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processing are lost or damaged as a result of any failure by Fiserv, its
employees, or agents to exercise reasonable care to prevent such loss or damage,
Fiserv's liability on account of such loss or damages shall not exceed the
reasonable cost of reproducing such records or data from exact duplicates
thereof in Client's possession.
10. Disaster Recovery. (a) General. Fiserv maintains a disaster recovery
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plan ("Disaster Recovery Plan") for each Service. A "Disaster" shall mean any
unplanned interruption of the operations of or inaccessibility to Fiserv's
service center in which Fiserv, using reasonable judgment, requires relocation
of processing to a recovery location. Fiserv shall notify Client as soon as
possible after Fiserv deems a service outage to be a Disaster. Fiserv shall move
the processing of Client's
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standard services to a recovery location as expeditiously as possible and shall
coordinate the cut-over to back-up telecommunication facilities with the
appropriate carriers. Client shall maintain adequate records of all transactions
during the period of service interruption and shall have personnel available to
assist Fiserv in implementing the switchover to the recovery location. During a
Disaster, optional or on-request services shall be provided by Fiserv only to
the extent adequate capacity exists at the recovery location and only after
stabilizing the provision of base services.
(b) Communications. Fiserv shall work with Client to establish a plan
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for alternative communications in the event of a Disaster.
(c) Disaster Recovery Test. Fiserv shall test the Disaster Recovery
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Plan periodically. Client agrees to participate in and assist Fiserv with such
test, if requested by Fiserv. Upon Client request, test results will be made
available to Client's management, regulators, auditors, and insurance
underwriters.
(d) Client Plans. Fiserv agrees to release information necessary to
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allow Client's development of a disaster recovery plan that operates in concert
with the Disaster Recovery Plan.
(e) No Warranty. Client understands and agrees that the Disaster
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Recovery Plan is designed to minimize, but not eliminate, risks associated with
a Disaster affecting Fiserv's service center(s). Fiserv does not warrant that
Fiserv Services will be uninterrupted or error free in the event of a Disaster;
no performance standards shall be applicable for the duration of a Disaster.
Client maintains responsibility for adopting a disaster recovery plan relating
to disasters affecting Client's facilities and for securing business
interruption insurance or other insurance necessary for Client's protection.
11. Termination. (a) Material Breach. Except as provided elsewhere in this
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Section 11, either party may terminate this Agreement in the event of a material
breach by the other party not cured within 90 days following written notice
stating, with particularity and in reasonable detail, the nature of the claimed
breach.
(b) Failure to Pay. In the event any invoice remains unpaid by Client
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30 days after due, or Client deconverts any data or information from the Fiserv
System without prior written consent of Fiserv, Fiserv, at its sole option, may
terminate this Agreement and/or Client's access to and use of Fiserv Services.
Any invoice submitted by Fiserv shall be deemed correct unless Client provides
written notice to Fiserv within 15 days of the invoice date specifying the
nature of the disagreement.
(c) Remedies. Remedies contained in this Section 11 are cumulative
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and are in addition to the other rights and remedies available to Fiserv under
this Agreement by law or otherwise.
(d) Defaults. If Client:
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(i) defaults in the payment of any sum of money due;
(ii) breaches this Agreement in any material respect or
otherwise defaults in any material respect in the
performance of any of its obligations; or
(iii) commits an act of bankruptcy or becomes the subject of any
proceeding under the Bankruptcy Code or becomes insolvent
or if any substantial part of Client's property becomes
subject to any levy, seizure, assignment, application, or
sale for or by any creditor or governmental agency;
then, in any such event Fiserv may, upon written notice, terminate this
Agreement and be entitled to recover from Client as liquidated damages an amount
equal to the present value of all payments remaining to be made hereunder for
the remainder of the initial term or any renewal term of this Agreement. For
purposes of the preceding sentence, present value shall be computed using the
"prime" rate (as published in The Wall Street Journal) in effect at the date of
termination and "all payments remaining to be made" shall be calculated based on
the average bills for the 3 months immediately preceding the date of
termination. Client agrees to reimburse Fiserv for any expenses Fiserv may
incur, including reasonable attorneys' fees, in taking any of the foregoing
actions.
(e) Convenience. Client may terminate this Agreement during any term
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by paying a termination fee based on the remaining unused term of this
Agreement, the amount to be determined by multiplying Client's largest monthly
invoice for each Fiserv Service received by Client during the term (or if no
monthly invoice has been received, the sum of the estimated monthly billing for
each Fiserv Service to be received hereunder) by 80% times the remaining months
of the term, plus any unamortized conversion fees or third party costs existing
on Fiserv's books on the date of termination. Client understands and agrees that
Fiserv losses incurred as a result of early termination of the Agreement would
be difficult or impossible to calculate as of the effective date of termination
since they will vary based on, among other things, the number of clients using
the Fiserv System on the date the Agreement terminates. Accordingly, the amount
set forth in the first sentence of this subsection represents Client's agreement
to pay and Fiserv's agreement to accept as liquidated damages (and not as a
penalty) such amount for any such Client termination.
(f) Merger. In the event of a merger between Client and another
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organization in which Client is not the surviving organization and where the
other organization was not previously a user of Fiserv services similar to the
Services, Fiserv will allow an early termination of this Agreement upon the
following terms and conditions:
(i) written notice must be given 3 months in advance,
specifying the termination date;
(ii) Fiserv may specify a deconversion date based on its
previous commitments and work loads; and
(iii) Fiserv may charge a termination fee in accordance with
subsection (e) above.
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(g) Return of Data Files. Upon expiration or termination of this
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Agreement, Fiserv shall furnish to Client such copies of Client Files as Client
may request in Fiserv's standard machine readable format along with such
information and assistance as is reasonable and customary to enable Client to
deconvert from the Fiserv System, provided, however, that Client consents and
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agrees and authorizes Fiserv to retain Client Files until (i) Fiserv is paid in
full for (A) all Services provided through the date such Client Files are
returned to Client; and (B) any and all other amounts that are due or will
become due under this Agreement; (ii) Fiserv is paid its then standard rates for
the services necessary to return such Client Files; (iii) if this Agreement is
being terminated, Fiserv is paid any applicable termination fee pursuant to
subsection (d), (e), or (f) above; and (iv) Client has returned to Fiserv all
Fiserv Information. Unless directed by Client in writing to the contrary, Fiserv
shall be permitted to destroy Client Files any time after 30 days from the final
use of Client Files for processing.
(h) Miscellaneous. Client understands and agrees that Client is
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responsible for the deinstallation and return shipping of any Fiserv-owned
equipment located on Client's premises.
(i) In the event the bank does not open as the result of the
Client's inability to obtain a charter, this agreement shall be deemed null and
void. In this case, Client agrees to pay Fiserv a termination fee of $ 5,000.00,
less any one-time amount previously paid for conversion services, and reimburse
Fiserv for all out of pocket expenses.
12. Arbitration. (a) General. Except with respect to disputes arising from
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a misappropriation or misuse of either party's proprietary rights, any dispute
or controversy arising out of this Agreement, or its interpretation, shall be
submitted to and resolved exclusively by arbitration under the rules then
prevailing of the American Arbitration Association, upon written notice of
demand for arbitration by the party seeking arbitration, setting forth the
specifics of the matter in controversy or the claim being made. The arbitration
shall be heard before an arbitrator mutually agreeable to the parties; provided,
that if the parties cannot agree on the choice of arbitrator within 10 days
after the first party seeking arbitration has given written notice, then the
arbitration shall be heard by three arbitrators, one chosen by each party, and
the third chosen by those two arbitrators. The arbitrators will be selected from
a panel of persons having experience with and knowledge of information
technology and at least one of the arbitrators selected will be an attorney. A
hearing on the merits of all claims for which arbitration is sought by either
party shall be commenced not later than 60 days from the date demand for
arbitration is made by the first party seeking arbitration. The arbitrator(s)
must render a decision within 10 days after the conclusion of such hearing. Any
award in such arbitration shall be final and binding upon the parties and the
judgment thereon may be entered in any court of competent jurisdiction.
(b) Applicable Law. The arbitration shall be governed by the United
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States Arbitration Act 9 U.S.C. 1-16. The arbitrators shall apply the
substantive law of the State of Wisconsin, without reference to provisions
relating to conflict of laws. The arbitrators shall not have the power to alter,
modify, amend, add to, or subtract from any term or provision of this Agreement
nor to rule upon or grant any extension, renewal, or continuance of this
Agreement. The arbitrators
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shall have the authority to grant any legal remedy available had the parties
submitted the dispute to a judicial proceeding.
(c) Situs. If arbitration is required to resolve any disputes between
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the parties, the proceedings to resolve the first such dispute shall be held in
Milwaukee, Wisconsin, the proceedings to resolve the second such dispute shall
be held in Baltimore, Maryland and the proceedings to resolve any subsequent
disputes shall alternate between Milwaukee, Wisconsin and Baltimore, Maryland.
13. Insurance. Fiserv carries the following types of insurance policies:
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(i) Comprehensive General Liability in an amount not less than
$1 million per occurrence for claims arising out of bodily
injury and property damage;
(ii) Commercial Crime covering employee dishonesty in an amount
not less than $5 million;
(iii) All-risk property coverage including Extra Expense and
Business Income coverage; and
(iv) Workers Compensation as mandated or allowed by the laws of
the state in which Services are being performed, including
$500,000 coverage for Employer's Liability.
14. Audit Fiserv employs an internal auditor responsible for ensuring the
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integrity of its processing environments and internal controls. In addition,
Fiserv provides for periodic independent audits of its operations. Fiserv shall
provide Client with a copy of the audit of the Fiserv service center providing
Services within a reasonable time after its completion and shall charge each
client a fee based on the pro rata cost of such audit. Fiserv shall also provide
a copy of such audit to the appropriate regulatory agencies, if any, having
jurisdiction over Fiserv's provision of Services.
15. General. (a) Binding Agreement. This Agreement is binding upon the
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parties and their respective successors and permitted assigns. Neither this
Agreement nor any interest may be sold, assigned, transferred, pledged, or
otherwise disposed of by Client whether pursuant to change of control or
otherwise, without Fiserv's prior written consent. Client agrees that Fiserv may
subcontract any Services to be performed hereunder. Any such subcontractors
shall be required to comply with all applicable terms and conditions.
(b) Entire Agreement. This Agreement including its Exhibits, which
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are expressly incorporated herein by reference, constitutes the complete and
exclusive statement of the agreement between the parties as to the subject
matter hereof and supersedes all previous agreements with respect thereto.
Modifications of this Agreement must be in writing and signed by duly authorized
representatives of the parties. Each party hereby acknowledges that it has not
entered into this Agreement in reliance upon any representation made by the
other party not embodied herein. In the event any of the provisions of any
Exhibit are in conflict with any of the provisions of this Agreement
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the terms and provisions of this Agreement shall control unless the Exhibit in
question expressly provides that its terms and provisions shall control.
(c) Severability. If any provision of this Agreement is held to be
------------
unenforceable or invalid, the other provisions shall continue in full force and
effect.
(d) Governing Law. This Agreement will be governed by the substantive
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laws of the State of Wisconsin, without reference to provisions relating to
conflict of laws. The United Nations Convention of Contracts for the
International Sale of Goods shall not apply to this Agreement.
(e) Force Majeure. Neither party shall be responsible for delays or
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failures in performance resulting from acts reasonably beyond the control of
that party.
(f) Notices. Any written notice required or permitted to be given
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hereunder shall be given by: (i) Registered or Certified Mail, Return Receipt
Requested, postage prepaid; (ii) confirmed facsimile; or (iii) nationally
recognized courier service to the other party at the addresses listed on the
cover page or to such other address or person as a party may designate in
writing. All such notices shall be effective upon receipt.
(g) No Waiver. The failure of either party to insist on strict
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performance of any of the provisions hereunder shall not be construed as the
waiver of any subsequent default of a similar nature.
(h) Financial Statements. Upon request, Fiserv shall provide Client
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and the appropriate regulatory agencies so requiring a copy of Fiserv, Inc.'s
audited consolidated financial statements.
(i) Prevailing Party. The prevailing party in any arbitration, suit
----------------
or action brought against the other party to enforce the terms of this Agreement
or any rights or obligations hereunder, shall be entitled to receive its
reasonable costs, expenses, and attorneys' fees of bringing such arbitration,
suit or action.
(j) Survival. All rights and obligations of the parties under this
--------
Agreement that, by their nature, do not terminate with the expiration or
termination of this Agreement shall survive the expiration or termination of
this Agreement.
(k) Exclusivity. Client agrees that Fiserv shall be the sole and
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exclusive provider of the services that are the subject matter of this
Agreement. For purposes of the foregoing, the term "Client" shall include Client
affiliates, excluding non-traditional banking entities. During the term of this
Agreement, Client agrees not to enter into an agreement with any other entity to
provide these services (or similar services) without Fiserv's prior written
consent. If Client acquires another entity, the exclusivity provided to Fiserv
hereunder shall take effect with respect to such acquired entity as
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soon as practicable after termination of such acquired entity's previously
existing arrangement for these services. If Client is acquired by another
entity, the exclusivity provided to Fiserv hereunder shall apply with respect to
the level or volume of these services provided immediately prior to the signing
of the definitive acquisition agreement relating to such acquisition and shall
continue with respect to the level or volume of these services until any
termination or expiration of this Agreement.
(l) Recruitment of Employees. Client agrees not to hire Fiserv's
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employees during the term of this Agreement and for a period of 6 months after
any termination or expiration thereof, except with Fiserv's prior written
consent
________________________________________________________________________________
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date indicated below.
For Client For Fiserv:
HARBOR CAPITAL NATIONAL BANK FISERV SOLUTIONS, INC.
(In Formation)
By:________________________________ By:________________________________
Name:______________________________ Name:______________________________
Title:_____________________________ Title:_____________________________
Date:______________________________ Date:______________________________
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Exhibit A
Account Processing Services
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Client agrees with Fiserv as follows:
1. Services. Fiserv will provide Client the Account Processing Services
--------
("Account Processing Services") specified in Exhibit A-1.
2. Fees. Client shall pay Fiserv fees and other charges for Account
----
Processing Services specified in Exhibit A-1.
3. Responsibility for Accounts. Client shall be responsible for balancing
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its accounts each business day and notifying Fiserv immediately of any errors or
discrepancies. Provided that Client immediately notifies Fiserv of any
discrepancy in Client's accounts, Fiserv shall, at its expense, promptly
recompute accounts affected by discrepancies solely caused by the Fiserv Systems
or provide for another mutually agreeable resolution. Fiserv will use its
commercially reasonable efforts to correct errors attributable to Client or
Client's other third party servicers. Reconstruction of error conditions
attributable to Client or to third parties acting on Client's behalf will be
done at prevailing rates as set forth in Exhibit A-1.
4. Annual Histories. Fiserv currently maintains annual histories, where
----------------
applicable, for its clients. These histories can be used to reconstruct Client
Files in an emergency. However, in order to permit prompt and accurate
reconstruction of accounts, Client agrees to retain at all times and make
available to Fiserv upon request the most recent data printout(s) received from
Fiserv, together with copies or other accurate and retrievable records of all
transactions to be reflected on the next consecutive printout(s).
5. Hours of Operation. Account Processing Services will be available for
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use by Client during standard Fiserv business hours, excluding holidays, as
specified in Exhibit A-2. Account Processing Services may be available during
additional hours, during which time Client may use Services at its option and
subject to additional charges.
6. Performance Standards. The Fiserv performance standards for the
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Account Processing Services ("Performance Standards") are set forth. In no event
shall Fiserv be liable to Client for damages of any nature arising solely from
failure by Fiserv to meet Performance Standards.
7. Protection of Data. (a) For the purpose of compliance with applicable
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government regulations, Fiserv has an operations backup center, for which Client
agrees to pay the charges indicated in Exhibit A-1. Copies of transaction files
are maintained by Fiserv off premises in secured vaults.
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(b) Fiserv provides "on-line" security via utilization of the frame
relay network and associated appropriate Client connectivity.
(c) Upon Client providing access to Client Files through Client's
customers' personal computers or voice response system, Client agrees to
indemnify and hold harmless Fiserv, its officers, directors, employees, and
affiliates against any claims or actions arising out of such access to Client
Files or any Fiserv files (including the files of other Fiserv clients) or the
Fiserv System or other Fiserv systems.
8. Processing Priority. Fiserv does not subscribe to any processing
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priority; all users receive equal processing consideration.
9. Forms and Supplies. Client assumes and will pay the charges for all
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customized forms, supplies, and delivery charges. Custom forms ordered through
Fiserv will be subject to a 15% administrative fee for warehousing and inventory
control. Forms ordered by Client and warehoused at Fiserv will be subject to the
administrative fee.
10. Regulatory Supervision. By entering into this Agreement, Fiserv agrees
----------------------
that the Office of the Comptroller of the Currency, FDIC, or other regulatory
agencies having authority over Client's operations shall have the authority and
responsibility provided to the regulatory agencies pursuant to the Bank Service
Corporation Act, 12 U.S.C. 1867(C) relating to services performed by contract or
otherwise.
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