EXHIBIT 10.11
NORTH CAROLINA
MASTER SERVICE AGREEMENT
GUILFORD COUNTY
THIS MASTER SERVICE AGREEMENT, made and entered into this 23 day of June,
1997 by and between CENTRAL SERVICE CORPORATION, a North Carolina corporation,
hereinafter referred to as "CSC", and Capital Bank (Proposed), with its
principal office in Raleigh, North Carolina, hereinafter referred to as
"Customer".
1. SERVICES SCHEDULE. Subject to the other provisions of this Agreement,
CSC shall provide to the Customer, and the Customer shall obtain exclusively
from CSC, the services referred to in the Schedule of Services made by the
parties contemporaneously herewith, as such Schedule of Services may be amended
from time to time, and any services required or contemplated by other Sections
of this Agreement (collectively, the "Services"). The Schedule of Services,
including all Addendums thereto, as it may be so amended (the "Services
Schedule") are hereby incorporated into, and shall be deemed a part of, this
Agreement for all purposes.
2. TERM.
(a) General Term. The initial term of this Agreement shall be for 5
years commencing on June 23, 1997, subject to successive extensions as provided
in this Section 2(a). The term of this Agreement shall automatically extend for
another 5 years at the end of the then current term, unless at least one hundred
twenty (120) days prior to the end of the then current term either party gives
written notice to the other party that there shall be no extension.
Notwithstanding the foregoing, the term of this Agreement shall be subject to
early termination under Sections 7(e) and 7(f). The term of this Agreement, as
it may be extended from time to time as provided in this Section 2(a) or
terminated as provided in Sections 7(e) and 7(f), is hereinafter referred to as
the "General Term".
(b) Service Term. The "Service Term" for a Service shall mean the
term for which the Service is to be provided, as it may be extended from time to
time by agreement of the parties. A Service Term may be shorter than, but not
exceed, the General Term. If no particular Service Term is provided for a
Service in the Services Schedule, the Service Term for the Service shall be
coextensive with the General Term. Notwithstanding the foregoing, a Service Term
shall be subject to early termination under Section 7(e).
3. CHANGES IN SERVICES. The Customer acknowledges that CSC provides to
other customers services the same as or similar to the Services, and that
updating and modifying its services (including the Services) from time to time
is an appropriate part of CSC's business. Accordingly, the Customer agrees that
the format and nature of any Service may be changed by CSC upon sixty (60) days'
advance written notice to the Customer, provided that, except when mandated by
law or regulation, said changes do not unreasonably alter the Customer's
business practices and operations. In addition, the parties acknowledge that CSC
may not be able to provide Services in a manner to accommodate the particular
practices, designs or formats of the
Customer, and therefore agree that before the Customer adopts or changes any of
the Customer's practices, designs or formats (including without limitation to
the extent relevant for the Services or those relating to calculating or
reporting interest rates, fees, charges, loan terms, and account terms), the
Customer shall determine that such adoption or change will be consistent with
the manner in which CSC provides the Services.
4. CSC PROPERTY. Except as the parties may hereafter agree in writing, all
programs, specifications, tapes and other materials used in connection with the
Services are and remain the sole and absolute property of CSC. The Customer
shall not use, cause to be used, sell, rent, loan or otherwise disclose, any
such material to any other person or entity. CSC shall have the right to obtain
an injunction to prevent such breach and shall have such further rights as are
available at law or in equity.
5. CUSTOMER'S DATA RESPONSIBILITIES.
(a) Customer Information. The Customer shall furnish to CSC all
records, data and other information necessary to enable CSC to perform its
obligations under this Agreement, all of which shall be provided in the manner,
in the form, and at the times, reasonably required by CSC. The Customer shall
ensure that all records, data and other information provided to CSC are complete
and accurate, and CSC shall have no responsibility for errors resulting from
incomplete or incorrect records, data (whether electronic or paper items) or
other information provided by the Customer.
(b) Remote Transmission Facility. Without limiting its obligations
under Section 5(a), the Customer shall comply with all security procedures which
CSC may prescribe from time to time to protect the data transmitted through the
Remote Transmission Facility. Customer shall indemnify, defend, and hold
harmless CSC and CSC's directors, officers, shareholders, employees, and agents
for, from and against, any and all liability, loss, cost, damage or expense,
including without limitation reasonable attorneys' fees, arising out of the
Customer's, its employees' or agent's unauthorized use or handling of data
resulting from transmission of any data through the Remote Transmission
Facility.
(c) Customer Review. The Customer shall promptly review all reports,
data and other information provided or returned to it by CSC, and shall in any
event notify CSC in writing of any errors or omissions in such reports, data or
other information within seven (7) business days of receipt from CSC.
Notwithstanding the provisions of Section 8, CSC shall not be liable to the
Customer for damages or corrections resulting from the Customer's failure to
give such timely written notification.
(d) Compliance with Applicable Laws. The Customer shall be solely
responsible for ensuring that this Agreement and all Services, reports and forms
provided pursuant to this Agreement comply with all applicable laws and
regulations and the terms of the Customer's contracts with its customers,
including without limitation all applicable laws, regulations and contractual
provisions concerning the Customer's operations or consumers. The Customer shall
indemnify, defend. and hold harmless CSC and CSC's directors, officers,
shareholders, employees, and agents for, from, and against any and all
liability, loss, cost, damage or expense, including without limitation
reasonable attorneys' fees, arising out of any such violation of applicable laws
or regulations or the Customer's contractual obligations.
6. CONFIDENTIALITY & PRESERVATION OF CUSTOMER DATA.
(a) Confidentiality. CSC shall use reasonable care to maintain the
confidentiality of any confidential information provided to CSC by the Customer.
For purposes of the foregoing, CSC's delivery of materials to the Customer by
means of the United States Postal Service or insured or bonded carriers shall be
deemed to constitute reasonable care. In addition to any and all rights and
remedies available to the Customer at law or in equity, CSC shall indemnify,
defend and hold harmless the Customer, Customer's shareholders, directors,
officers, employees and agents for, from and against any and all liability,
loss, cost,
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damage or expense, including without limitation reasonable attorney's fees,
arising out of any breach of the confidentiality of any information provided to
CSC by or on behalf of the Customer.
(b) Preservation. Subject to Section 8, CSC shall use reasonable
care (i) to protect Customer's records in CSC's possession from loss or damage
through fire, power failure, and other accidental causes, and (ii) to provide
the equipment and/or procedures necessary to maintain the integrity of such
records while in CSC's possession.
7. CHARGES FOR SERVICES.
(a) Charges. The Customer shall pay CSC its charges for the Services
and for expenses incurred in rendering Services, in accordance with the Services
Schedule and the other terms of this Agreement. Upon at least ninety (90) days
written notice, CSC may change any or all of the terms of this Agreement
relating to such charges including without limitation the amounts thereof;
provided (i) that any increase in charges for a Service set forth in the
Services Schedule shall become effective on the date specified in the notice,
but in any event no earlier than the later of the beginning of the next
extension of the Service Term for the Service or 90 days after the notice is
given, and (ii) that any decrease in charges for a Service set forth in the
Services Schedule shall be effective on the date specified in the notice.
(b) Billing. Following the end of each calendar month during the
General Term CSC shall submit its statement charges for each Service rendered
and expenses incurred in connection therewith during that month. Additional
charges pursuant to Section 11 may be reflected in the monthly invoices.
Invoices are due and payable within fifteen (15) days from the date of the
receipt of the invoice by the Customer. Any portion of the invoice not paid by
such fifteenth (15th) day shall bear interest, payable on demand, after such day
at a per diem rate equal to the lesser of (i) .06575% or (ii) the maximum rate
allowed to be charged by controlling law. If the Customer determines in good
faith that an invoice contains an error, the Customer shall give written
notification of the same to CSC within fifteen (15) days from the date of the
receipt of the invoice. Notwithstanding any such notification, the undisputed
portion of the invoice shall be paid as provided above on any portion thereof
which is mutually agreed to have not been in error. After any error is resolved,
any remaining amounts determined to be due shall be payable on demand, with
interest as provided above on any portion thereof which is mutually agreed to
have not been in error.
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(c) Sales, etc. Taxes. Except to the extent expressly otherwise
provided therein, the charges contained in the Services Schedule do not include
any sales, use, gross receipt or other taxes, and the Customer agrees to pay
such taxes if any apply.
(d) Telephone Services. Any private long-line telephone services
provided by CSC pursuant to this Agreement will remain under the control of CSC.
If the Customer requires special telephone line configurations due to its
terminal requirements, CSC reserves the right to charge for this service.
(e) Termination for Customer Breach. If the Customer breaches this
Agreement by failing to timely pay any charge or other amount due to CSC, or
otherwise is in breach of this Agreement, and the breach continues uncured for
ten (10) days following the Customer's receipt of written notice by CSC noting
the breach and demanding its cure, CSC may discontinue any or all of the
Services to the Customer until the breach is cured. If such breach continues for
thirty (30) days following receipt of such notice, CSC may terminate the Service
Term of any one or more of the Services and/or terminate the General Term.
(f) Termination for CSC Breach. If CSC breaches this Agreement by
failing to perform any of its obligations hereunder, and the breach continues
uncured for ten (10) days following the CSC's receipt of written notice by the
Customer noting the breach and demanding its cure, the Customer may withhold
payment until the breach is cured. If such breach continues for thirty (30) days
following receipt of such notice, the Customer may terminate the Service Term of
any one or more of the Services and/or terminate the General Term.
8. CSC LIABILITY FOR ERRORS OR DELAYS; LIMITATION OF REMEDIES.
(a) Errors or Omissions by CSC.
(1) In the event any error or omission in CSC's performance of
Services ("Error") results from the negligence or willful misconduct
of CSC's employees following the timely, accurate, and complete
submission of the relevant records, data, and other information by
Customer to CSC, and the Customer notifies CSC of the Error in
accordance with Section 5, as soon as practicable following receipt
of such notice given CSC's obligations to others at that time, CSC
shall correct such Error by reprocessing the data without any
additional charge to the Customer for such correction. Any other
Errors shall be corrected by CSC reprocessing the data at the
Customer's expense based on CSC's then prevailing rates, as soon as
practicable following receipt of such written notice of such Error
from the Customer given CSC's obligations to others at that time,
provided that CSC shall in no event have any obligation with respect
to any Error if Customer does not provide CSC with such written
notice within one year of the Customer's receipt of the material
containing the Error.
(2) Notwithstanding Sections 8(a)(1) and (2), CSC shall not be
liable to the Customer for Errors resulting from defects in, or
malfunctions of, the
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mechanical or electronic equipment used by CSC in performing
Services. If the Customer desires to obtain insurance protection
against any such Errors, or desires coverage of fidelity losses
through an endorsement to its own blanket bond coverage, CSC agrees
to cooperate with the Customer in obtaining such insurance or
endorsement. It is understood that all costs and expenses of such
insurance or endorsement shall be paid by the Customer.
(b) Delays. CSC shall not be responsible for delays in processing or
in the delivery of reports, data, or other information, that are caused by
strikes, lockouts, riots, epidemics, war, government regulations, fire, acts of
God, failure of transmission or power supply, mechanical difficulties with
equipment, or other causes beyond CSC's reasonable control.
(c) LIABILITY AND REMEDIES LIMITATIONS; INDEMNIFICATION. THE
PROVISIONS OF SECTION 8(a) ARE IN LIEU OF ALL EXPRESS OR IMPLIED WARRANTIES OF
ANY KIND WHATSOEVER, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE REMEDIES SPECIFIED IN
SECTION 8(a) FOR ERRORS ARE EXCLUSIVE, AND THE CUSTOMER HEREBY WAIVES ALL OTHER
REMEDIES. CSC SHALL IN NO EVENT BE LIABLE TO THE CUSTOMER OR ANY OTHER PERSON OR
ENTITY FOR LOST PROFITS OR OTHER SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES WITH RESPECT TO THIS AGREEMENT (REGARDLESS OF WHETHER CSC HAS NOTICE OF
THE POSSIBILITY OF SUCH DAMAGES), ANY ERROR, OR ANY OTHER ACTION OR OMISSION IN
CONNECTION WITH THIS AGREEMENT, AND CUSTOMER SHALL INDEMNIFY, DEFEND AND HOLD
HARMLESS CSC AND CSC'S DIRECTORS, OFFICERS, SHAREHOLDERS, EMPLOYEES AND AGENTS
FOR, FROM AND AGAINST ANY AND ALL LIABILITY, LOSS, COST, DAMAGE OR EXPENSE
INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEYS' FEES, ARISING OUT OF ANY
CLAIM BY ANY PERSON OR ENTITY RELATING TO THIS AGREEMENT, ANY ERROR OR ANY SUCH
OTHER ACTION OR OMISSION.
9. REGULATORY AGENCY REQUIREMENTS.
(a) Examinations. The records produced, maintained, and magnetically
stored on premise at CSC and at other off-site locations by CSC for the Customer
in the performance of this Agreement shall be subject to examination by such
Federal and State regulatory agencies as may have jurisdiction over the
Customer's business, including without limitation (as applicable) the Federal
Reserve Board, the Office of Thrift Supervision ("OTS"), the Federal Deposit
Insurance Corporation ("FDIC"), the Office of the Comptroller of the Currency,
to the same extent as such records would be subject if they were maintained and
produced by the Customer itself on its own premises. By entering into this
Agreement CSC agrees that OTS will have the authority and responsibility
provided to the other regulatory agencies pursuant to the Bank Service
Corporation Act, 12 U.S.C. ss.1867(C) relating to services performed by contract
or otherwise.
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(b) Notices. CSC agrees to provide adequate notice to any
appropriate regulatory agency of any termination of this Agreement, if such
termination is initiated by CSC. The Customer, however, is responsible for all
other notices and communications with regulatory agencies relative to this
Agreement.
(c) CSC Financial Statements. A copy of CSC's current audited
financial statements and service auditor's report will be sent annually to the
District Directors of OTS, OCC, FDIC, and/or the state regulatory agency that
has jurisdiction over the Customer's business, as applicable, and to the
managing officer of the Customer.
(d) Disaster Contingency Plans. CSC shall remain in compliance with
the existing guidelines of OCC and OTS regarding disaster coverage. CSC shall
release all information reasonably requested to permit the Customer to develop a
disaster contingency plan that will work in concert with CSC's plan.
10. DECONVERSION.
(a) Deconversion Services. Upon termination of any Service (whether
or not such termination is in connection with termination of this Agreement)
("Deconversion"), CSC shall provide information available within the on-line
computer record relating to the terminated Service, in magnetic tape or in
printout form, for the Customer's use under some other system and shall provide
all other reasonable assistance for the Customer's conversion to such other
system, provided that CSC reserves the right to charge in accordance with its
then prevailing rates for programming, personnel time and/or computer time used
in the Deconversion. In accordance with Section 4, all data files and programs
maintained by CSC shall remain the property of CSC. If the Customer desires CSC
to continue providing a Service temporarily following the end of the Service
Term for the Service, CSC on a temporary basis may provide such Service at its
then prevailing rates for providing such Service on a temporary basis. After one
hundred eighty (180) days following termination of a Service, the records, data
and information files maintained for the Customer by CSC for the Service may be
destroyed by CSC unless other satisfactory written arrangements are made by the
parties prior to that time.
(b) Payment of Deconversion Charges. All amounts payable to CSC
pursuant to Section 9(a) shall be paid, on demand by CSC, by the Customer in the
form of a certified or official check; CSC may require payment in advance of the
Service or action for which it is to be paid pursuant to Section 10(a).
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11. MINIMUM SERVICES AND LIQUIDATED DAMAGES.
(a) In General. The parties agree that at the time of execution of
this Agreement, it is difficult or impossible to accurately assess the damages
that would be sustained by CSC as a result of a significant reduction in the
volume of any Service prior to the end of the full Service Term. Among other
things, CSC amortizes the cost of programs, equipment, and personnel training
for a Service over the Service Term and plans its future commitments based on
the expectation that each Service will continue at a consistent volume
throughout its full Service Tenn. The Customer acknowledges and agrees that CSC
would suffer great financial harm if the volume of a Service were significantly
reduced prior to the end of the full Service Term, because CSC would not be able
to recover its start-up costs or realize its anticipated future revenues with
respect to the Service.
(b) Minimum Service Requirements. With respect to each Service shown
on the Services Schedule (as it may be amended from time to time), the Customer
shall utilize the Service throughout the full Service Term (as it may be
extended from time to time) such that the charges due to CSC pursuant to Section
7 for the Service rendered for each calendar month (an "Applicable Month")
beginning with the fifth full month following the month in which the Service is
initiated, shall equal or exceed the greater of (i) eighty percent (80%) of the
average monthly charges for the Service for the four calendar months immediately
preceding the Applicable Month or (ii) eighty percent (80%) of the average
monthly charges for the Service for the first full four calendar months
following the initiation of the Service (the greater of (i) or (ii) determined
with respect to an Applicable Month shall be the "Monthly Minimum" for the
Applicable Month). In the event that the charges for a Service for an Applicable
Month, determined before application of this Section 11(b), are less than the
Monthly Minimum for such Applicable Month, the charges for the Service for such
Applicable Month shall be increased to the Monthly Minimum for such Applicable
Month, regardless of the actual amount of the Service rendered or expenses
incurred by CSC during such Applicable Month.
In determining the Monthly Minimum for an Applicable Month, that portion
of the charges in the relevant four-month periods that is attributable to the
Service rendered for a portion of the Customer's operations that the Customer
has discontinued as a result of a Qualified Reduction in the Customer's
Operations occurring prior to the Applicable Month, shall not be counted. For
purposes of the foregoing, (i) a "Qualified Reduction in the Customer's
Operations" shall mean and be limited to a reduction in the Customer's
operations directly resulting from an arms' length sale or other arms' length
disposition of Customer assets that is not motivated in whole or in part by a
desire to reduce the volume of Service, all as determined by CSC in the good
faith exercise of its sole discretion, and (ii) the portion of the charges that
is attributable to the Service rendered for any portion of the Customer's
operations shall be determined by CSC in the good faith exercise of its sole
discretion.
The operation of this Section 11(b) may be illustrated by the following
examples.
Example 1. Assume that the Applicable Month is the seventh full calendar
month following the initiation of the Service, and that the charges for the
Service for such Applicable Month, determined before application of this Section
10(b), are $700. Assume further (i) that the
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average monthly charges for the Service for the immediately preceding four
calendar months are $700 and (ii) that the average monthly charges for the first
full four calendar months following the initiation of the Service are $1,000.
The Monthly Minimum would be $800, which is the greater of (i) 80% of $700 or
(ii) 80% of $1,000. Since the Monthly Minimum exceeds the charges for the
Applicable Month (determined before application of this Section 11(b)), the
charges for the Applicable Month would be the Monthly Minimum of $800.
Example 2. Assume that the charges for the first Applicable Month for a
Service (i.e., the fifth full calendar month following the initiation of the
Service), determined before application of this Section 11(b), are $700.00.
Assume further that the average monthly charges for the Service for the
immediately preceding four calendar months are $1,000.00. The Monthly Minimum
would be 80% of $1,000, or $800. Since the Monthly Minimum exceeds the charges
for the Applicable Month (determined before application of this Section 11(b)),
the charge for the Applicable Month would be the Monthly Minimum of $800.
Example 3. Assume the same facts as in Example 2, and (i) that the
Customer sold a branch office in one of the four months preceding the Applicable
Month in an arms' length transaction not motivated in whole or in part by a
desire to reduce the volume of the Service, (ii) that the sale of the branch
office is determined by CSC in the good faith exercise of its sole discretion,
to be a Qualified Reduction in the Customer's Operations, and (iii) that the
average monthly charges for such four months, excluding the charges for the
Service attributable to the branch office as determined by CSC in the good faith
exercise of its sole discretion, are $900. The Monthly Minimum would be 80% of
$900, or $720. Since the Monthly Minimum exceeds the charges for the Applicable
Month (determined before application of this Section 11(b)), the charges for the
Applicable Month would be the Monthly Minimum of $720.
(c) Liquidated Damages for Termination. In the event (i) a party
hereto in breach of this Agreement terminates a Service shown on the Services
Schedule prior to the expiration of the full Service Term of the Service as
provided in Section 2 (whether before or after commencement of the Service Term)
or (ii) pursuant to Section 7(e) or 7(f), terminates a Service prior to the
expiration of the full Service Term of the Service as provided in Section 2
(whether before or after commencement of the Service Term) because of the other
party's breach of this Agreement, the breaching party shall pay the other
liquidated damages calculated by first determining the average monthly charges,
before discounts, for the Service for the twelve (12) full calendar months
preceding the calendar month in which such early termination ("Early
Termination") occurs. If the Service has not been provided by CSC to the
Customer for at least twelve (12) fall calendar months prior to the month of
termination, the average monthly charges shall be determined by using the actual
monthly charges, before discounts, for the full calendar months, if any, in
which the Service was provided and the non-breaching party's good faith estimate
of the charges for the number of month(s) less than twelve in which the Service
was not provided, based on said party's good faith projection of the volume of
the Service the Customer would have required during such month(s) but for the
Early Termination.
The average monthly charge as so determined pursuant to the preceding
paragraph shall be multiplied by fifty percent (50%). The resulting product
shall then be multiplied by the number of calendar months in the Service Term
(determined without regard to the Early
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Termination) for the Service following the month of the Early Termination, with
any fractional months counted as full months for this purpose. The result of the
preceding sentence shall be the amount of liquidated damages; such amount shall
be paid in full by the breaching party to the non-breaching party prior to any
Deconversion or termination with respect to the Service.
12. NOTICES. All notices contemplated by this Agreement shall be deemed
sufficiently given and effective if sent by means of certified or registered
mail; and if intended for CSC, the notice shall be sent to Central Service
Corporation, P. 0. Xxx 00000, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000; if intended for
the Customer, the notice shall be sent to the Customer's business address
recorded at CSC. Either party may change the address to which it wants notice
sent by means of a notice of the change given to the other party.
13. ASSIGNMENT/MERGER.
(a) Assignment. No right or obligation of either party may be
assigned or delegated to, or otherwise vested in, another person or entity,
whether by operation of law or otherwise, without the express written consent of
the other party, which consent shall not be unreasonably withheld. Subject to
the foregoing, all of the terms of this Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective successors and
assigns.
(b) Merger, Etc. In the event the Customer merges with another
entity, or all or a portion of the Customer's assets are otherwise in any way
combined with the assets of another entity, and in either case such other entity
has already in place an agreement pursuant to which CSC renders any service to
such other entity, this Agreement and such other agreement shall each continue
in effect subject, if CSC so elects, to any such amendments as CSC in the good
faith exercise of its sole discretion may determine to be appropriate to
eliminate duplication or conflicting terms.
14. MISCELLANEOUS.
(a) Entire Agreement; Amendments; Nonwaiver. This Agreement,
including the Services Schedule and all Addendums thereto, contains the entire
agreements between the parties with respect to the subject matter hereof, in
which all prior agreements, understandings, or negotiations are merged. Any
additions to or other amendments of this Agreement must be in a writing signed
by both parties. The failure of either party at any time or times to require
strict performance of any term of this Agreement shall not waive, affect or
diminish the right to demand strict performance of such term at any time or
times thereafter.
(b) Governing Law; Severability. The laws of the State of North
Carolina shall govern the validity, interpretation, performance and enforcement
of this Agreement. If any of the terms of this Agreement or the application
thereof to any entity or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the application of such terms
to any entity or circumstance other than those to which it is held invalid and
unenforceable, shall not be affected thereby, and each term of this Agreement
shall be valid and enforceable to the fullest extent permitted by law.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers under seal effective as of the date first
above written.
CUSTOMER: CENTRAL SERVICE CORPORATION
Capital Bank (Proposed)
By: /s/ By: /s/
------------------------------- ------------------------------
Its Its
------------------ ------------------
Attest: /s/ Attest: /s/
------------------------------- ------------------------------
Its Its
------------------ ------------------
[Corporate Seal] [Corporate Seal]
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SCHEDULE OF SERVICES
FOR
MASTER SERVICE AGREEMENT
Pursuant to the Master Service Agreement (the "Agreement") between Central
Service Corporation ("CSC") and Capital Bank (Proposed) (the "Customer"), the
Services selected below shall be provided by CSC to the Customer pursuant to the
terms of the Agreement and the terms of the applicable Addendum(s).
This Schedule of Services including all such Addendums as they may be
amended from time to time ("Services Schedule") constitutes a part of the
Agreement for all purposes. Capitalized terms used but not otherwise defined in
this Services Schedule shall have the meanings given in the main text of the
Agreement.
The terms of this Schedule of Services, including its Addendums, shall be
interpreted in a manner consistent with, and so as to avoid conflict with, the
terms in the main body of the Agreement.
Selection of Services
The Service(s) to be provided are indicated below by initialing by both
the Customer and CSC. If no expiration is specified below for the Service Term
for a Service, the Service Term for the Service shall be the General Term
provided in the Agreement.
A. Dollar System Data Processing
Service. If this Services selected,
the Service shall be subject to the
additional terms provided in the
Customer ______ Addendum entitled "Data Processing
Service", as it may be amended from
CSC ______ time to time.
Service Term begins June 23, 1997 and
expires June 22, 2002.
B. Item Processing Service. If
this Service is selected, the
Service shall be subject to the
additional terms provided in the
Customer ______ Addendum entitled "Item Processing
Service", as it may be amended from
CSC ______ time to time.
Service Term begins 6/23/97 and
expires 6/22/02.
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C. Locbox Service. If this
Service is selected, the Service
shall be subject to the additional
Customer ______ terms provided in the Addendum
entitled "Locbox Service", as it
CSC ______ may be amended from time to time.
Service Term begins _______ and
expires _____________.
D. Premier Banking System
Service. If this Service is
selected, the Service shall be
subject to the additional terms
Customer ______ provided in the Addendum entitled
"Premier Service", as it may be
CSC ______ amended from time to time.
Service Term begins 6/23/97 and
expires 6/22/02.
E. Automated Teller Machine
Service. If this Service is
selected, the Service shall be
subject to the additional terms
Customer ______ provided in the Addendum entitled
"ATM Service", as it may be amended
CSC ______ from time to time.
Service Term begins 6/23/97 and
expires 6/22/02
CUSTOMER CENTRAL SERVICE CORPORATION
Capital Bank (Proposed)
By: /s/ By: /s/
------------------------ -------------------------
Its Its
------------ --------------
Attest: /s/ Attest: /s/
------------------------ -------------------------
[Corporate Seal] [Corporate Seal]
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Addendum A
a. This addendum specifies pricing to be in effect for the Customer during
the initial term of this Agreement, and as such supersedes paragraph 6 (a),
Exhibit B of the Premier System Schedule, and Exhibit B of the Items Processing
Schedule.
b. The following discounts will be applied against the Customer's total
Premier and Items Processing charges:
Months 1 through 6 .......... 64.00%
Months 7 through 12 ......... 49.00%
Months 13 through 18 ........ 34.00%
Months 19 through 24 ........ 19.00%
Months 25 and over .......... 0.00%
This monthly discount applies to all Premier and Item Processing services except
those specifically noted in this Addendum A.
c. The Customer shall be charged at the standard rate for IRS 1099 forms.
The Customer shall also be charged for postage and handling incurred in the
mailing of IRS 1099 forms.
d. Costs incurred by CSC on behalf of the Customer for Data Communications
equipment and Data Communications line installation shall be paid by the
Customer.
e. The Customer shall pay the costs for custom forms (e.g., envelopes,
checks, etc.), all postage, and couriers (other than those between CSC and the
Federal Reserve Bank).
f. Charges for services or products purchased by CSC for resale to the
Customer are excluded from this Addendum A.
g. Initial Fees are modified as detailed below, and as such supersede
paragraph 6(a), Exhibit B of the Premier System Schedule, Exhibit B of the Item
Processing Schedule, Exhibit B of the ATM Schedule, the TELEBANC Schedule, and
the VISA Check Schedule. The Customer shall pay CSC a one-time Initial Fee of
$15,000.00, which covers the following:
Premier System Conversion Fee
ATM System Initial Fee(per ATM)
VISA Check Initial Fee
TELEBANC Initial Fee
Platform System Interface Fee
Imaging Implementation Fee
Data Line Installation (one site)
Data Communications DAP (modem, one)
h. The following miscellaneous prices are guaranteed for the term of this
agreement.
13
Data Line Installation (per line) 500.00
ATM Data Line Installation (per ATM) 500.00
DataComm Equipment (1 DSU, 1 Splitter per office) 1,000.00
ATM DSU 1,000.00
LOGO/Signature Digitization 400.00
Documentation Manuals (per set) 1,000.00
i. CSC agrees to maintain the following minimum service levels:
1. Encoding errors not to exceed 2 per 10,000 items processed in a
month. It is the Customer's responsibility to document such errors and notify
CSC of them. CSC is only responsible for errors committed by CSC's staff and
cannot be held accountable for encoding errors made by others. Likewise, CSC is
not responsible for encoding errors resulting from incorrect or improper forms
supplied by the Customer.
2. Commercial and Personal Checking to be mailed within two business
days of the statement date, except in the case of "crippled" statements, or if
CSC has implemented its Disaster Recovery plan, or for causes outside CSC's
control.
3. Incidents of statements containing incorrect check images,
missing pages, etc. not to exceed one twentieth of one percent (0.05%) of
statements mailed during any given calendar month.
4. The online system will be available no later than 7:30am, unless
CSC has implemented its Disaster Recovery plan, or for causes outside CSC's
control.
5. The online system will be available no less than 95% of scheduled
business hours during any month, unless CSC has implemented its Disaster
Recovery plan, or for causes outside CSC's control.
If the Customer feels that CSC has unreasonably failed to meet these
performance standards in any given month, the Customer will so notify CSC in
writing within ten days following the end of the month in question, said
notification to contain documented evidence of the failure. The Customer will be
entitled to an additional five percent (5%) discount on all Premier and Item
Processing charges for the month identified.
14
PREMIER SERVICE
ADDENDUM
TO
SCHEDULE OF SERVICES
FOR
MASTER SERVICE AGREEMENT
1. Service Description CSC shall provide the services referred to in the
attached Exhibit A, subject to Section 3 and the other provisions of the Master
Service Agreement.
2. Charges for Service. The charges for the Service and CSC's expenses
incurred in the performance thereof shall be as provided in the attached Exhibit
B, subject to Section 7 and the other provisions of the Master Service
Agreement.
15
EXHIBIT A
TO
PREMIER SERVICE ADDENDUM
List of Services
Central Information System
Demand Deposit Accounting
Savings Accounting
Certificate of Deposit Accounting
Loan Accounting
Financial Management System
Item Entry System
Express Exceptions
Retirement Accounting
Credit Reporting
Check Reconciliation System
Federal Call Reporting
Bond Accounting
Accounts Payable
Asset/Liability Management
On-Line Loan Collection
Premier Reference System
Paperless Item Module (PIM)
Currency Transaction Reporting Module
16
EXHIBIT B
TO
PREMIER SERVICE ADDENDUM
CATEGORY PRICE
-------- -----
Central Information System
Demand Deposit Accounting
Savings Accounting
Certificate of Deposit Accounting
Loan Accounting
Financial Management System
Item Entry System
Express Exceptions
Premier Reference System
Paperless Item Module (PDA)
Initial Conversion Fee $30,000.00
---------------------- ----------
Monthly Fees:
-------------
Accounts
--------
First 5,000 $0.270
Next 5,000 $0.250
Over 10,000 $0.200
Transaction Account Supplement
------------------------------
First 5,000 $0.250
Next 5,000 $0.200
Over 10,000 $0.150
Loan and G.L. Account Supplement
--------------------------------
First 5,000 $0.270
Next 5,000 $0.250
Over 10,000 $0.200
Closed Accounts $0.040
---------------
DataComm Site Charge $350.00
Additional Modules (monthly)
----------------------------
Retirement Accounting $0.00
Credit Reporting $0.00
Check Reconciliation System $0.00
Federal Call Reporting $0.00
Bond Accounting $0.00
Accounts Payable $0.00
17
Asset/Liability Management $0.00
On-Line Loan Collection $0.00
Currency Transaction Reporting Module $0.00
Platform System Interface $4,000.00
(Initial Fee)
18
ITEM PROCESSING SERVICE
ADDENDUM
TO
SCHEDULE OF SERVICES
FOR
MASTER SERVICE AGREEMENT
1. Service Description. CSC shall process the items of the Customer and
the Customer's customers, including performing items processing, data
transmissions, daily service functions and bookkeeping, as more particularly
described in the attached Exhibit A subject to Section 3 and the other
provisions of the Master Service Agreement.
2. Charges for Service. The charges for the Service and CSC's expenses
incurred in the performance thereof shall be as provided in the attached Exhibit
B, subject to Section 7, Addendum A, and the other provisions of the Master
Service Agreement.
19
EXHIBIT A
TO
ITEM PROCESSING ADDENDUM
1. CHECK PROCESSING OPERATIONS
(a) GENERAL DESCRIPTION. CSC will receive the Customer's inclearing checks
and teller work (items) from the Customer and the Federal Reserve Bank. CSC will
read and sort the items, transcribing the data onto magnetic media for
subsequent processing. Items will be balanced to the Federal Reserve cash
letters for the Customer. After posting, the institution will notify CSC of
items to be returned to Federal Reserve. Settlement with the Federal Reserve
will be made by the Client. Periodic statements will be prepared by CSC for
matching with items and mailing.
(b) RECEIVING ITEMS FROM THE FEDERAL RESERVE BANK. CSC will designate a
point to which inclearing checks of the Customer are to be delivered. The
Customer will notify the Federal Reserve of this delivery point. Each business
day, beginning at approximately 6:00 am., the Federal Reserve will deliver to
the designated delivery point all Customer items, together with all other items
being sent to that delivery point and covering cash letter(s).
(c) CAPTURE AND BALANCE. Upon receipt of all debit items from the Federal
Reserve, CSC will read and sort ("capture") inclearing items and transcribe the
item data onto magnetic media, including transit/routing number, account number,
dollar amount, and check serial number. Any MICR reject items will be manually
processed. Each inclearing item will be endorsed with a "paid" endorsement,
which will be canceled if the item is returned. Paid items will be bulk filed at
the CSC facility in Greensboro.
CSC will balance the tape total of captured items to the total(s)
furnished by the cash letter(s) from the Federal Reserve. During this process,
CSC will identify missing items (listed but not included), free items (included
but not listed), listing errors (discrepancies between MICR line and cash letter
line for a given item), and other conditions contributing to an imbalance
between the cash letter total and the tape total. Once all imbalance conditions
have been accounted for, CSC will adjust the tape as required and prepare
adjustment entries for return to the Federal Reserve.
(d) RECEIVING ITEMS FROM CUSTOMER. CSC will designate a point to which
Customer shall deliver transactions generated at Customer offices. These items
will be inscribed by CSC to insure that full MICR data is encoded on each item,
and that all transactions are in balance. CSC will establish dollar control
totals for subsequent balancing after the capture and reject reentry process.
Imbalances detected will be resolved according to Customers instructions.
Capture and balance functions will occur as (in "c") above.
(e) RETURN ITEMS. CSC will process overnight the transactions received
from CSC and make the results of that processing available to the Customer. The
Customer will identify items to be returned to the Federal Reserve (for
insufficient funds, stop payment, etc.). According to a schedule established by
CSC, and in no event later that 2:00 p.m. of the business day
20
following posting of the transaction, the Customer will advise CSC of all items
to be returned to the Federal Reserve according to Federal Reserve operating
rules.
(f) EXCEPTION ITEMS. All decisions to pay or return exception items,
including, but not limited to, stop pay suspects, drafts on uncollected or
insufficient funds, drafts on closed, blocked, or dormant accounts, will be made
by the Customer, and CSC will have no right, duty or obligation to make any
decision with regard to whether any items should be honored by the Customer.
(g) STATEMENTS. CSC will match retained items or images with statements,
count and compare the items with the number of items shown on the statement, and
prepare statement for mailing. The cycle dates for the preparation of statement
will be as mutually agreed upon. CSC will have a minimum of two (2) business
days after printing of statement to complete the processing of a statement of
accounts in each cycle.
(h) SETTLEMENT. The Customer will select and notify CSC and the Federal
Reserve of the financial institution and the account number at that institution
to be used for settlement of the Customer's items. The Federal Reserve will
charge that account for the total of checks presented each day and make
adjustments for return items and cash letter discrepancies. CSC will assume no
responsibility for accuracy of settlement.
2. CHECK MICR REQUIREMENTS. CSC will employ specialized equipment to read the
check MICR characters for the purpose of physically sorting the items, capturing
the data on magnetic media for computer processing and listing the checks. The
Customer will ensure that the MICR line specifications are compatible with CSC
processing requirements. Customer will provide CSC with a description of account
number structure, a list of valid account number ranges, check digit formulas,
and sample checks to facilitate validation of account number formats by CSC.
The Customer will provide to its customers only checks compatible with CSC
processing equipment meeting reasonable quality standards. Upon request, CSC
will provide the Customer with a list of check vendors who furnish checks with
formats compatible with CSC equipment.
3. SIGNATURE CARDS. The Customer will retain on file a signature verification
card for each account. CSC will assist with signature verification but assumes
no responsibility for the accuracy of any signature verification as requested by
the Customer.
4. RECORD RETENTION. During the read/sort process, all inclearing items of the
Customer will be recorded and will be retained in retrievable form by CSC for a
period as required by law. During this period, CSC will provide the Customer
with copies of such items upon request with a corresponding service charge to
the Customer under the fee schedule in effect at the time of the request. CSC
will maintain an indexed history of return items and paid items in account
number sequence to assist the institution when it requests copies of checks.
21
EXHIBIT B
TO
ITEM PROCESSING ADDENDUM
PROOF ENCODING
First 50,000 $0.040
Next 50,000 $0.035
Over 100,000 $0.030
Teller/Customer Corrections $1.000
PER ITEM, PRIME ENTRY
First 50,000 $0.025
Next 50,000 $0.020
Over 100,000 $0.015
IMAGING IMPLEMENTATION FEE $2,500.00
IMAGING SUPPLEMENT (PER ITEM)
Negative-Only Implementation $0.010
Positive Implementation $0.015
CUSTOMER SERVICE OPTIONS
Returns $2.00
Large Dollar Returns $4.00
Returns Qualification $0.35
Federal Reserve Adjustments $2.00
Null/Account Number Rejects $2.00
Large Dollar Item Notification $2.00
Item Search $2.00
Photocopy $2.00
STATEMENT SERVICE OPTIONS
DDA Statement Rendering-Traditional Accounts $0.350
Image DDA, Savings/CD Statement Rendering $0.100
Inserts (per stmt) $0.020
Enclosure Photocopies $10.00 / hour + $1.00 per copy
Serial Sort (Check #) $0.020
(Commercial or special accounts only)
Mailing (other than checking accounts) $0.040
22
SERVICE EXPLANATION/NOTES
Postage and any item delivery expenses will be charged to the institution.
23
ATM SERVICE
ADDENDUM
TO
SCHEDULE OF SERVICES
FOR
MASTER SERVICE AGREEMENT
1. Service Description. CSC shall process data supplied by the Customer to
CSC through telecommunication from automated teller machines ("ATM"). The
following standard terms shall apply, subject to the Master Service Agreement
and any contrary agreement made in writing from time to time by the Customer and
CSC:
(a) CSC's ATM system will be in operation 24 hours per day, every
day of the year, except for those times during which maintenance must be
performed.
(b) CSC shall make available to the Customer at the office of CSC
daily reports on the morning of the working day following the day on which the
reported transaction occurred.
(c) The Customer shall pay the cost of transportation for any
reports delivered to the Customer, whether via ground transportation, electronic
data transmission or otherwise. Additional copies, special preprinted forms
including but not limited to PIN mailers and audit confirmations, and any
mailing and handling service, shall be provided under the terms set forth in the
attached Exhibit A. The design and format of any such forms to be used on the
CSC computer system must be approved by CSC.
2. Charges for Service. The charges for the Service and CSC's expenses
incurred in the performance thereof, shall be as provided in the attached
Exhibit A.
24
EXHIBIT A
TO ATM SERVICE ADDENDUM
ATM SYSTEM PRICING
Initial Charges:
Client Admission Fee $5,000.00
Each ATM $1,500.00
Monthly Charges:
Transaction Fee $ 0.080
ATM Charge per ATM $ 300.00
COMMUNICATION INSTALLATION COSTS
Any cost incurred for installation of new or alteration of existing
communication lines from the telephone company will be billed at the rate from
the telephone company plus twelve percent (12%).
COMPUTER OUTPUT MICROFICHE (COM) CHARGES
Original $1.375
Copies $0.275
SPECIAL PROGRAMMING AND CONSULTING
If any special or custom programming becomes necessary for the Customer for
reports, transactions, services, or additional applications, the programming
charges shall be borne by the Customer and billed based upon CSC's then
prevailing rates. If additional processing time is required due to such
programming, the Customer shall be required to pay for such additional time at
CSC's then prevailing rates. CSC reserves the right to decline Customer requests
for special programming if the changes would adversely affect the overall system
or if the resources are not available to accomplish the request. Charges for CSC
consulting services will be based upon CSC's then prevailing rates plus
out-of-pocket expenses.
COSTS INCURRED BY CSC
Costs incurred by CSC for any special preprinted forms, mailing service, or
special handling will be charged to the Customer on a time and materials basis
and will be included in the monthly invoice.
25
Note 1 CSC can presently provide files to the following plastic card
vendors in their requested format:
1. First Data Resources (FDR)
2. Deluxe
3. EFT Source
4. Faraday
5. Specialty Network Services
A charge shall be assessed for the conversion of any data files to any other
format not listed above. In addition, a conversion fee shall be assessed for the
conversion of other types of data files, account balances, etc., as necessary
for CSC to provide such services.
26
June 23, 1997
-------------
DATE
Central Service Corporation
P. O. Xxx 00000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear CSC,
Please accept this letter as authorization to set us up on the TELEBANC
Interactive Voice Response system.
The attached Schedule N, which outlines the charges for the TELEBANC System,
will become a part of my existing contract.
Sincerely,
/s/
-----------------------------
(SIGNATURE)
Xxxxx X. Xxxx
-----------------------------
(NAME)
President
-----------------------------
(TITLE)
Capital Bank (Proposed)
-----------------------------
(INSTITUTION)
27
SCHEDULE N
CENTRAL SERVICE CORPORATION
TELEBANC VOICE RESPONSE SYSTEM
CLIENT CHARGES:
STANDARD
PRICE
-----
1. INITIAL LICENSE FEE $ 12,000.00
(Includes custom greeting,
closing, and 800 number)
2. MONTHLY FEES
MONTHLY BASE FEE $ 250.00
PER CALL $ 0.10
PER FAX $ 0.25
3. TELEPHONE COMPANY CHARGES $ 0.10 per minute
4. CUSTOM MESSAGE RECORDING $ 500.00 per hour
28
6/23/97
-------
DATE
Central Service Corporation
P. O. Xxx 00000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Dear CSC,
Please accept this letter as authorization to set us up on the VISA CHECK debit
card program.
The attached Schedule O, which outlines the charges for the VISA CHECK program,
will become a part of my existing contract.
Sincerely,
/s/
-----------------------------
(SIGNATURE)
Xxxxx X. Xxxxx
-----------------------------
(NAME)
Senior Vice President
-----------------------------
(TITLE)
Capital Bank (Proposed)
-----------------------------
(INSTITUTION)
29
SCHEDULE O
CENTRAL SERVICE CORPORATION
VISA CHECK CARD SERVICE
BY SPECIAL ARRANGEMENT WITH
SPECIALTY NETWORK SERVICES, INC.
MAITLAND, FLORIDA
CLIENT CHARGES:
1. ONE TIME SET-UP FEE $ 2,500.00
2. MONTHLY FEES
MONTHLY BASE FEE $ 100.00
AUTHORIZATION FEES $ 0.10 per authorization
SETTLEMENT FEES $ 0. 10 per settlement
MONTHLY FILE RESIDENCY $ 0. 15 per card
LOST/STOLEN CARDS $ 12.00 each
NEGATIVE FILE UPDATES $ 1.25 each
CHARGEBACKS/DISPUTES $ 2.00 each
3. VISA AND SES FEES, DUES, ASSESSMENTS variable
(assessed directly by VISA and SES)
30
