Exhibit 10.9
Agreement Number:
AGREEMENT
between
Fiserv Solutions, Inc.
255 Fiserv Drive
Brookfield, WI 53045-5815
and
Westsound Bank
190 Pacific Avenue
Bremerton, WA 98337
Date: August 11, 2006
[FISERVE LOGO]
@ Copyright 2000 by Fiserv Solutions, Inc.
All Rights Reserved
This document contains proprietary and confidential information of Fiserv
Solutions, Inc. and may not be copied, published, disclosed or distributed
without the express written consent of Fiserv Solutions, Inc. The material in
this document, including terms, procedures, fees and other conditions, comprise
an agreement to consider which will remain valid for ninety (90) days from July
26, 2006.
AGREEMENT dated as of August 11, 2006 ("Agreement") between FISERV SOLUTIONS,
INC., a Wisconsin corporation ("Fiserv"), and Westsound Bank ("Client").
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Fiserv and Client hereby agree as follows:
1. Term. ***
2. Services. (a) Services Generally. Fiserv, itself and through its
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
Exhibit B - Item Processing services
Exhibit C - EFT Services
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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) Implementation Services. Fiserv will provide services (i) to
convert Client's existing applicable data and/or information to the Fiserv
Services; and/or (ii) to implement the Fiserv Services. These activities are
referred to as "Implementation Services". Client agrees to cooperate with Fiserv
in connection with Fiserv's provision of Implementation Services and to provide
all necessary information and assistance to facilitate the conversion and/or
implementation. Client is responsible for all out-of-pocket expenses associated
with Implementation Services. Fiserv will provide Implementation Services as
required in connection with Fiserv Services.
(c) Training Services. Fiserv shall provide training, training aids,
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 designated by Fiserv. All such training aids
and manuals remain Fiserv's property.
3. Fees for Fiserv Services. (a) General. Client agrees to pay
Fiserv:
(i) Fees for Fiserv Services for the month as specified in the
Exhibits;
(ii) out-of-pocket charges for the month payable by Fiserv
for the account of Client; and
(iii) Taxes (as defined below) thereon (collectively, "Fees").
Fiserv shall timely reconcile Fees paid by Client for the Fiserv Services for
the month and the fees and charges actually due Fiserv based on Client's 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 Fees billed to reflect
appropriate changes in actual use of Fiserv Services. 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
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 as set forth in the
Exhibits. Such out-of-pocket expenses may be changed from time to time upon
notification of a fee change from a vendor/provider. The Fees do not include,
and Client shall be responsible for, furnishing
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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.
(c) Taxes. Fiserv shall add to each invoice any sales, use, excise, 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 Fiserv's net income.
(d) Payment Terms. Estimated Fees are due and payable monthly upon
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
Fees on invoices submitted by Fiserv for Fiserv Services.
4. Access to Fiserv Services. (a) Procedures. Client agrees to comply
with applicable regulatory requirements and procedures for use of Services
established by Fiserv.
(b) Changes. Fiserv continually reviews and modifies Fiserv systems used
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 Client of any material change that affects Client's normal
operating procedures, reporting, or service costs prior to implementation of
such change.
(c) Communications Lines. Fiserv shall order the installation of
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
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 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 for
recertification of the Fiserv System resulting therefrom.
(b) Client Personnel. Client shall designate appropriate Client 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
Implementation Services and shall cooperate with Fiserv personnel in their
performance of Services.
(c) Use of Fiserv System. Client shall (i) comply with any operating
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 or discrepancies. Client shall
determine and be responsible for the authenticity and accuracy of all
information and data submitted by Fiserv.
(d) Client's Systems. Client shall be responsible for ensuring that its
systems are Year 2000 compliant and otherwise capable of passing and/or
accepting data from and/or to the Fiserv System.
6. Ownership and Confidentiality. (a) Definition.
(i) Client Information. "Client Information" means: (A) confidential
plans, customer lists, information, and other proprietary material of
Client 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 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).
(ii) Fiserv Information. "Fiserv Information" means: (A) 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
Westsound Bank August 11, 2006 3 (FISERV LOGO)
embodied or incorporated therein (whether or not any such information is
marked with a restrictive legend).
(iii) Information. "Information" means Client Information and Fiserv
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 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. Fiserv specifically agrees that it will not use any non-public
personal information about Client's customers in any manner prohibited by Title
V of the Gramm-Leach-Bliley Act. 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 only use Information in accordance
with the purpose of this Agreement. 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 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.
(d) Fiserv System. The Fiserv System contains information and computer
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 thereto, including,
but not limited to, alterations, decompiling, disassembling, modifications, and
reverse engineering thereof.
(e) Information Security. Fiserv has implemented and shall maintain
appropriate measures designed to meet the objectives of the guidelines
establishing information security standards as adopted by any federal
regulatory agencies having jurisdiction over Client's affairs. These measures
include appropriate disposal of consumer information as required, and taking
appropriate actions to address incidents of unauthorized access to Client's
sensitive customer information, including notification to Client as soon as
possible of any such incident.
(f) Confidentiality of this Agreement. Fiserv and Client agree to keep
confidential the prices, terms and conditions of this Agreement, without
disclosure to third parties.
7. Regulatory Agencies, Regulations and Legal Requirements. (a) Client
Files. Records maintained and produced for Client ("Client Files") may be
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 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.
8. Warranties. (a) Fiserv Warranties. Fiserv represents and warrants that:
(i)(A) Services will conform to the specifications set forth in the
Exhibits; (B) Fiserv will perform Client's work accurately provided that
Client supplies accurate data and information, and follows the procedures
described in
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all Fiserv documentation, notices, and advices; (C) Fiserv personnel will
exercise due care in provision of Services; (D) the Fiserv System will
comply in all material respects with all applicable Federal regulations
governing Services; and (E) the Fiserv System is Year 2000 compliant. 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; and (ii) it owns or has a license to furnish all equipment or
software comprising the Fiserv System. Fiserv shall indemnify Client and
hold it harmless against any claim or action that alleges that the Fiserv
System use infringes a United State 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 the defense of any such claim.
THE WARRANTIES STATED HEREIN 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 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: (i) no
contractual obligations exist that would prevent Client from entering into this
Agreement; (ii) it has complied with all applicable regulatory requirements; and
(iii) it 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 (iv) the use by Client of the Fiserv System in a manner other than that
provided in this Agreement; and (v) 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 (v) hereof shall not
preclude Client's recovery of direct damages pursuant to the terms and subject
of the limitations of this Agreement.
9. Limitation of Liability. (a) General. IN NO EVENT SHALL FISERV BE 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 THIS AGREEMENT SHALL BE LIMITED TO THE ****. FISERV'S
AGGREGATE LIABILITY FOR A DEFAULT RELATING TO THIRD PARTY 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
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
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 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 for
alternative communications in the event of a Disaster.
(c) Disaster Recovery Test. Fiserv shall test the Disaster Recovery Plan
periodically. Client agrees to participate in and assist Fiserv with such test,
if requested by Fiserv. Upon Client's request, test results will be made
available to Client's management, regulators, auditors, and insurance
underwriters.
Westsound Bank August 11, 2006 (FISERV LOGO)
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(d) Client Plans. Fiserv agrees to release information necessary to 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 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
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 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 and are
in addition to the other rights and remedies available to Fiserv under this
Agreement, by law or otherwise.
(d) Defaults. If Client:
(i) defaults in the payment of any sum of money due and fails to remedy
such breech as set forth in Section 11(b);
(ii) breaches this Agreement in any material respect or otherwise defaults
in any material respect in the performance of any of its obligations in
Section 11(a); 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 attorney's fees, in taking any of the
foregoing actions.
(e) Convenience. Client may terminate this Agreement 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) Return of Data Files. Upon expiration or termination of this
Agreement, Fiserv shall furnish to Client such copies of Client Files as Client
may request in a Fiserv standard 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 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) or (e) 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.
(g) Miscellaneous. Client understands and agrees that Client is
responsible for the deinstallation and return shipping of any Fiserv-owned
equipment located on Client's premises.
12. Dispute Resolution. (a) General. Except with respect to disputes
arising from a misappropriation or misuse of either party's proprietary rights,
any dispute or controversy
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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 3 arbitrators, 1 chosen by each party, and the third chosen by those 2
arbitrators. The arbitrators will be selected from a panel of persons having
experience with an knowledge of information technology and at least 1 of the
arbitrators selected will be and attorney. Discovery shall not be permitted. 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 States
Arbitration Act, 9 U.S.C. 1-16 and the Federal Rules of Evidence. The
arbitrators shall apply the substantive law of the State of Washington, 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 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 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 Kitsap County, Washington, and the proceedings to resolve any
subsequent disputes shall alternate between Milwaukee, Wisconsin and Kitsap
County, Washington.
13. Insurance. Fiserv carries the following types of insurance policies:
(i) Commercial 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 $1 million coverage for
Employer's Liability.
14. Audit. Fiserv employs an internal auditor responsible for ensuring
the integrity of its processing environments and internal controls. In addition,
as may be required by law or regulation, 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
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 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, 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
laws of the State of Washington, 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
failures in performance resulting from acts reasonably beyond the control of
that party.
(f) Notices. Any written notice required or permitted to be given
hereunder shall be given by: (i) Registered or Certified
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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
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. Fiserv shall provide Client 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
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. 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 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
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.
(m) Publicity. Client and Fiserv shall have the right to make general
references about each other publicly and the type of services being provided
hereunder to third parties, such as auditors, regulators, financial analysts,
and prospective customers and clients. The parties shall mutually agree on a
press release relating to the execution of this Agreement. In conjunction with
this, the party initiating such release shall give the other party a reasonable
opportunity to review and comment on the content thereof prior to its release.
(n) Independent Contractors. Client and Fiserv expressly agree they are
acting as independent contractors and under no circumstances shall any of the
employees of one party be deemed the employees of the other for any purpose.
This Agreement shall not be construed as authority for either party to act for
the other party in any agency or other capacity, or to make commitments of any
kind for the account of or on behalf of the other except as expressly
authorized herein.
================================================================================
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:
Westsound Bank Fiserv Solutions, Inc.
By: /s/ Mark Freeman By: /s/ Sam Langham
-------------------------- --------------------------
Name: Mark Freeman Name: Sam Langham
Title: Senior Vice President, Title: President, Western Region
Chief Financial Officer
Date: 8/1/06 Date: 8/1/06
------------------------ -------------------------
8
Westsound Bank August 11, 2006 [FISERV LOGO]
ACCOUNT PROCESSING SERVICES EXHIBIT A
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 the fees and other charges for the
Account Processing Services specified in Exhibit A-1. The fees listed in Exhibit
A-2 are valid for the account processing services Client contracts for as of the
date of the Agreement. If Client seeks additional services from Fiserv during
the term of the Agreement, Fiserv's fees therefor will be quoted to Client upon
request. Fiserv agrees to give at least 30 days notice to Client of any changes
in the rules and procedures established for processing, unless such changes are
caused by changes made by the Federal Reserve System or otherwise beyond the
control of Fiserv, not permitting Fiserv to give such advance notice. Fiserv
reserves the right to make such changes to the Exhibits without notice as may be
necessary to cover any increases in Federal Reserve System costs and charges or
in other costs and charges beyond Fiserv's control, including changes required
by applicable law or regulatory activity. The fees listed in Exhibit A-2 may be
changed annually effective each January 1 beginning in the year 2007 upon 30
days notice to Client. Each change shall be limited to the change in the U.S.
Department of Labor, Consumer Price Index for All Urban Households - Pacific
Northwest, published by the United States Department of Labor, Bureau of Labor
Statices ("CPI") for the 12-month period preceding each January 1 not to exceed
3% unless the CPI exceeds 6%. Any percent or fraction thereof above 6% will be
added to the 3%. Fiserv will deliver to Client the notification of the fee
change
3. Responsibility for Accounts. Client shall be responsible for balancing
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
re-compute 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 providers. 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-2.
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
use by Client during standard Fiserv business hours, excluding holidays, as
specified in Exhibit A-3. Account Processing Services may be available
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
Account Processing Services ("Performance Standards") are set forth in Exhibit
A-4. 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
government regulations, Fiserv has an operations backup center, for which Client
agrees to pay the charges indicated in Exhibit A-2. Copies of transaction files
are maintained by Fiserv off premises in secured vaults.
(b) Fiserv provides systems security utilizing commercially reasonable
standards to protect Client Files from unauthorized access in compliance with
applicable governmental regulations.
(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
priority; all users receive equal processing consideration.
9. Forms and Supplies. Client assumes and will pay the charges for all
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 set forth in Exhibit A-2.
10. Regulatory Supervision. By entering into this Agreement, Fiserv
agrees that 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.
9
Westsound Bank August 11, 2006 [FISERV LOGO]
EXHIBIT A
ACCOUNT PROCESSING SERVICES
================================================================================
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:
Westsound Bank Fiserv Solutions, Inc.
By: /s/ Mark Freeman By: /s/ Sam Langham
------------------------------ -----------------------------
Name: Mark Freeman Name: Sam Langham
Title: Senior Vice President, Title: President, Western Region
Chief Financial Officer
Date: 8/1/06 Date: 8/8/06
----------------------------- ----------------------------
10
Westsound Bank August 11, 2006 [FISERV LOGO]
ACCOUNT PROCESSING SERVICES
EXHIBIT A-1
Client and Fiserv agree as follows:
1. Fiserv Responsibilities. Fiserv will provide Client with the following ITI
Software Account Processing Services for the fees and charges out lined in
Exhibit A-2:
a. Base Services:
- Account Analysis
- ACH Processing - Item Entry System (IES)
- ATM Processing/Batch Interface
- Automatic Account Transfers
- Bulk File Processing
- Certificates of Deposits
- Commercial Loans
- Combined Statements
- Consumer Loans
- Standard Statement Formats
- Customer Information File (CIF)
- Demand Deposit Accounting
- Financial Management System (G/L)
- Host Disaster Recovery Back Up (FM clients not included)
- Investor Reporting, Standard Core
- Lines of Credit
- Loan Account Processing
- Loan Investor Reporting
- Mortgage Loans
- On-line NSF/OD Return Processing (EIM)
- Product Release Installation Management
- Savings Account Processing
- Sweep Accounting
- Tape - (NCP Format) Fiserv Forms & Graphics or Deluxe Generation
for Coupon Books (Weekly) - 1 included
- Tape (TRW) Format Generation for Credit Bureau (Monthly) - 1
included
- Transaction Management System (TMS)
b. Interfaces:
- ATM Positive Balance File
- Premier Deposit Platform
- Premier Teller
- Fiserv Item Processing
c. Network Support Services:
- Data Communication line between Fiserv's account processing
center and Client's primary banking location.
- Staffing and maintenance to undertake investigations, inquiries,
and problem resolution associated with the Network Support
Services software.
- Applications support personnel will be available to assist and
support Client's support services staff.
- Account Management Staff to call on Client.
d. Training:
- Refresher training available (at then current fees)
e. Help Desk Services:
- Staffing and maintenance to undertake investigations, inquiries,
and problem resolution associated with the Application
Processing Services software.
- Applications support personnel will be available to assist and
support Client's support services staff.
11
Westsound Bank August 11, 2006 [FISERV LOGO]
ACCOUNT PROCESSING SERVICES
EXHIBIT A-1
- Account Management Staff to call on Client.
2. Client Responsibilities. Client will be responsible for the following
activities:
a. Personnel:
- Project Manager
- Staff necessary to assist in Implementation Services
b. Third Party Software:
- Evaluation, selection, licensing, and procurement of maintenance
for third party application software as mutually agreed by Fiserv
and Client.
- Obtain any necessary consents to utilize third party software
licensed to Client as of the Effective Date, which consents shall
be provided to Fiserv (the obtaining of such consents shall be a
condition precedent to performance by Fiserv of its obligations).
- Advising Fiserv of any connections, upgrades, or enhancements
that become available from third party vendors so that they may
be installed on a mutually agreeable schedule and in accordance
with the third party vendor's recommended time schedule.
- Providing Fiserv with a complete copy of all license and
maintenance agreements related to third party software.
Westsound Bank August 11, 2006 12 [FISERV LOGO]
Exhibit B
Item Processing Services
Client agrees with Fiserv as follows:
1. Services. Fiserv will provide Client the Item Processing Services
("Item Processing Services") specified in Exhibit B-1 and, if applicable,
Exhibit B-5.
2. Due Diligence. All necessary information concerning Client's
requirements for Item Processing Services shall be set forth in a business
assumptions list (the "IP Business Assumptions List"), which Client shall
complete prior to Fiserv rendering Item Processing Services hereunder. Client
acknowledges that Fiserv has relied on the information contained in the IP
Business Assumptions List in determining pricing and performance levels for the
Item Processing Services. In the event of material change(s) in the actual
volumes, types of items, and delivery times for work received from Client, as
compared to the IP Business Assumptions List, Fiserv shall have the right to
adjust its fees and/or performance standards accordingly upon 30 days' notice to
Client. Any increase in fees resulting from this due diligence process shall not
be subject to the CPI limitations as set forth in Section 3 below.
3. Fees. Client shall pay Fiserv the fees and other charges for Item
Processing Services as specified in Exhibit B-2 and, if applicable, Exhibit B-5.
Fees listed in Exhibits B-2 and B-5 are valid for Item Processing Services and
locations that Client contracts for as of the Effective Date. If Client wishes
to obtain additional services and/or use additional locations from Fiserv during
the term of the Agreement, Fiserv fees for available services will be quoted to
Client upon request. Fiserv agrees to give at least 30 days' notice to Client of
any changes in the rules and procedures established for processing items, unless
such changes are caused by changes made by the Federal Reserve System or
otherwise beyond Fiserv's control, not permitting Fiserv to give such advance
notice. Fiserv reserves the right to make such changes to the Exhibits without
notice as may be necessary to cover any increases in Federal Reserve System
costs and charges or in other costs and charges beyond Fiserv's control,
including changes required by applicable law or regulatory activity. The fees
listed in Exhibit B-2 and B-5 may be changed annually effective each January 1
beginning in the year 2007 upon 30 days notice to Client. Each change shall be
limited to the change in the U.S. Department of Labor, Consumer Price Index for
All Urban Households -- Pacific Northwest, published by the United States
Department of Labor, Bureau of Labor Statistics ("CPI") for the 12-month period
preceding each January 1 not to exceed 3% unless the CPI exceeds 6%. Any percent
or fraction thereof above 6% will be added to the 3%. Fiserv will deliver to
Client the notification of the fee change.
4. Performance Standards. Fiserv will perform the Item Processing
Services in accordance with the performance standards specified in Exhibit B-3
and, if applicable, Exhibit B-5 (the "Performance Standards"), subject to Client
meeting its performance obligations as set forth in Exhibits B-1, B-3, and B-5.
Fiserv shall not be liable for any damages or losses to Client for errors
occurring within the limits of the Performance Standards. For each month during
the term of this Exhibit B, Fiserv will calculate and prepare a performance
standard report within 45 days following the month to which such report relates.
Client will have 15 days to review such report and provide written notice to
Fiserv of any discrepancies relating to such report. If Client provides such
notice and the discrepancies have been resolved between Fiserv and Client, or in
the alternative if Client fails to give notice of any discrepancies within the
required time frame, the report will be final.
5. No Fiduciary Relationship. Fiserv shall perform such Item Processing
Services for which Fiserv shall subscribe as agent of Client, and Fiserv shall
not have by reason of this Agreement a fiduciary relationship with respect to
Client.
6. Lost, Destroyed, and Misplaced Items. Fiserv assumes no liability for
any item lost, destroyed, or misplaced while in transit before the item
physically arrives at the premises of Fiserv and is received by Fiserv. In the
event any items are lost, destroyed, or misplaced, and such event is not due to
gross negligence or intentional misconduct by Fiserv, Client shall be solely
responsible for the costs and expenses incurred by Fiserv in reconstructing any
such items and for any damages or other losses that may be incurred by Fiserv
due to the collection of such items. In the event Fiserv loses, destroys, or
misplaces deposited items as a result of gross negligence or intentional
misconduct after acceptance of said deposit, Fiserv shall be liable only for
reasonable reconstruction costs of the deposit. Reasonable reconstruction costs
shall be only those costs that arise from reconstruction of a microfilmed
deposit. Fiserv shall not be liable for reconstruction costs associated with a
deposit for which Client cannot provide a microfilmed record of such item(s)
contained in the deposit. In no event shall Fiserv be liable for the face value
of any lost or missing item(s).
7. Governmental Regulation. This Exhibit shall be governed by and is
subject to: the applicable laws, regulations, rules, terms and conditions, as
presently in effect or hereafter amended or adopted, of the United States of
America, Federal Reserve Board, Federal Reserve Banks, Federal Housing Finance
Board, and any other governmental agency or instrumentality having jurisdiction
over the subject matter of this Exhibit. Client agrees to abide by such
requirements and to execute and deliver such agreements, documents, or other
1
Westsound Bank [FISERV LOGO]
Exhibit B
forms as may be necessary to comply with the provisions hereof, including,
without limitation, agreements to establish Fiserv as Client's Agent for
purposes of delivery of items processed hereunder from or to the Federal
Reserve Banks. Any such agreements shall be made a part of this Agreement and
are incorporated herein. A change or termination of such laws, regulations,
rules, terms, conditions, and agreements shall constitute, respectively, a
change or termination as to this Exhibit. Client data and records shall be
subject to regulation and examination by government supervisory agencies to the
same extent as if such information were on Client's premises.
8. Client Responsibilities. Client shall submit all items to Fiserv and
otherwise comply with all Client obligations in accordance with the requirements
set forth in Exhibits B - 1 and B - 5. Client shall maintain adequate supporting
materials (i.e. exact copies of items, records, and other data supplied to
Fiserv) in connection with the provision of Item Processing Services. Client
shall provide written notice of confirmation and/or verification of any
instructions given by Client, its agents, employees, officers, or directors to
Fiserv in connection with Fiserv's provision of Item Processing Services. Client
shall be responsible for balancing its accounts each business day and notifying
Fiserv, within 7 business days, or any errors or discrepancies. In the event
Fiserv discovers an error or defect (Client understands that Fiserv shall be
under no duty to discover any such error or defect), Fiserv is authorized, in
its sole discretion, to correct any such error or defect and to make any
adjustments in order to correct such error or defect.
9. Definition of Item. An item is defined as all checks and other documents
presented to Fiserv for processing, transactional entities generated by Client,
such as teller cash tickets, general ledger entries, loan entries and all
control documents such as batch tickets.
10. Check 21 Items: When Fiserv prepares "Substitute Checks" (as that term
is defined in the Check Clearing for the 21st Century Act, known as Check 21 and
implemented through Regulation CC) to facilitate the deposit and collection of
items as required by Client, Client understands and agrees that it is the
Reconverting and Truncating Bank and is responsible for all warranties or
indemnifications as defined in Check 21. Fiserv shall have no obligation to
screen items for legal compliance. Client agrees that Fiserv shall not be liable
for any damages or otherwise for any claims, obligations, or causes of action
regarding any such Substitute Checks, including without limitation any liability
arising out of Fiserv's keying errors on reject items, (collectively,
"Substitute Check Claims"), and Client further agrees to defend, indemnify, and
hold Fiserv harmless from and against all liability, damage and loss arising out
of any Substitute Check Claims.
11. Holdover. Upon any termination or expiration of this Exhibit B, Item
Processing Services provided subsequent to the termination or expiration date
will be charged at then-current fees being charged to Client, plus a holdover
premium of 25%. In the event Client terminates this Exhibit B pursuant to
Section 11(e) of the Agreement, Client shall specify a final processing date. If
this date is changed at Client's request less than 90 days prior to the final
processing date, the holdover premium of 25% will be applied to the then-current
fees being charged to Client for Item Processing Services pursuant to this
Exhibit B, for all Item Processing Services provided after the
originally-schedule final processing date.
================================================================================
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit B to the
Agreement to be executed by their duly authorized representatives as of the
date indicated below.
For Client: For Fiserv:
Westsound Bank Fiserv Solutions, Inc.
By: /s/ Mark Freeman By: /s/ Jeff Thares
------------------------------- ------------------------------
Name: Mark Freeman Name: Jeff Thares
Title: EVP & CFO Title: President, Western Region
IP Operations
Date: 8-1-06 Date: 7-21-06
----------------------------- -----------------------------
2
Westsound Bank [FISERV LOGO]
Exhibit B-1
Item Processing Description of Services
---------------------------------------
1. Proof: On each business day (excluding Saturdays, Sundays, and holidays),
Client will deliver to the Fiserv center(s) providing Item Processing
Services under this Exhibit (each, a "Fiserv Center"), checks and other
items deposited to accounts with Client. Client will provide extra
deliveries in support of proof operations for peak day processing. Peak day
processing is defined as any day when Client's volume is expected to exceed
the previous month's daily average volume by 20% (previous month's average
determined by dividing the total volume the number of business days in the
previous month).
a. Client will contract with and pay for a courier, to pick up and deliver
all work between Client and Fiserv. Both parties will mutually agree
upon the times of pick-up and delivery. If Fiserv has not received the
items from Client locations by the agreed upon delivery times, Fiserv
may, in its sole discretion and without liability, delay the processing
of such items until the next business day. Fiserv will contact Client's
after-hours contact and apprise said contact of the situation. Client
agrees to provide an after-hours contact and update that contact should
there be any change in Client personnel.
b. Client agrees to MICR encode documents to meet Fiserv requirements (ABA
and Account Numbers and Trancodes)
c. Client is responsible for microfilming or imaging all items submitted
to Fiserv.
d. Client agrees that all transactional entries, involving tellers' cash
tickets, general ledger entries, or loan entries shall be in balance,
and that Fiserv may return to Client, unprocessed, any transactional
entries that are not in balance.
e. Client agrees to segregate all over-the-counter items into batches not
to exceed 3" in depth and to identify each such batch with an
appropriate batch header, which batch header shall meet written
requirements provided by Fiserv. Client further agrees to segregate
all items by type (i.e., single deposit items will be batched
separately from multiple deposit items), and to provide a total for each
single batch.
f. Client agrees to include a batch manifest for each bag of work submitted
to Fiserv.
g. From the items submitted to Fiserv, Fiserv shall retrieve such "on-us"
information as may be necessary for the proper accounting of the items
and shall transmit this information, through telephone lines or by such
other means as Fiserv may, from time to time, deem appropriate to
Client's data processor for data processing.
h. Client authorizes Fiserv to create ledger holdover entries, deposit
corrections, or such other entries to balance transactions, except for
those transactions outlined in subsection 1.d. above, as may be necessary
to the efficient processing of the items.
i. After Fiserv has completed the process of retrieving and transmitting to
Client's data processor the information necessary for data processing,
all over-the-counter items not drawn against Client shall be forwarded
for collection to such correspondent banks as Client may designate from
time to time in writing to Fiserv.
j. All items drawn against Client and those items internally generated shall
be returned to Client or held by Fiserv in accordance with Client's
written instructions.
2. Encoding: Fiserv will encode the dollar amount on all items needing encoding
and presented to Fiserv as part of the Proof function described above.
Fiserv may encode additional fields, such as account numbers, deposit ticket
totals, or other items as specified by Client. Any such encoding will be
according to terms agreed to by Fiserv. In no event will Fiserv be liable
for losses to Client due to encoding errors if Client has not satisfied all
of its obligations set forth in Section 1 above. Should Fiserv's encoding
services fail to meet the performance standard for proof of deposit set
forth in Exhibit B-3, and Client incurs a potential loss due to an encoding
error, Client shall use its best efforts to collect the amount in question
from its customer (including without limitation, commencing legal action
against the customer, obtaining a judgment, and attempting collection
efforts based on said judgment) prior to submitting a claim for damages to
Fiserv.
3. Exception Item Processing: Fiserv will either reject or pay items listed on
the appropriate report, in accordance with written instructions, by Client's
authorized officer or employee. The name of Client's officer or employee
giving such instruction shall be noted on the item or on such other record
as Fiserv may establish, together with the nature of the instruction. If
Client has not instructed Fiserv regarding the disposition of any exception
item drawn against Client by the agreed upon time each day, then Fiserv
shall return it through the presentment chain to the depository bank or
institution. Instructions to Fiserv on disposition of items that are
received after the agreed upon deadline or are changed can result in a late
charge. Should Fiserv's exception item processing fail to meet the
performance standard for exception item processing set forth in Exhibit
B-3, and Client incurs a potential loss due to an error, Client shall use
its best efforts to collect the amount in
Westsound Bank 3 [FISERV LOGO]
Exhibit B - 1
question from its customer (including without limitation, commencing legal
action against the customer, obtaining a judgment, and attempting collection
efforts based on said judgment) prior to submitting a claim for damages to
Fiserv.
4. Statement Services: All checks, drafts, and other orders for the payment of
money drawn against accounts at Client that are to be stored by Fiserv,
will be retained by Fiserv until the end of each Client's checking account
cycle. The items will be sorted and filed or composed with the monthly
statement, and mailed to the depositor. Client agrees to have statements
printed according to predefined cycles and print classes. Statement
enclosure counts will be accurately and clearly reported in the top fold of
the statement. If required, Client agrees to expedite the return of any
paid exception items to Fiserv in order to facilitate timely statement
processing. Fiserv will apply proper postage, which will be pre-paid
monthly (or as agreed upon by Client and Fiserv) on an estimated basis by
Client. Automated Statements must contain bar coding compatible to the
equipment being used. The bar coding must reflect the number of enclosures
and page identification. The enclosure count must accurately reflect the
number of expected items excluding stuffers. Bar coding must reflect if the
statement is a "Special Pull" or a "Hold" statement. The checks to be
rendered must have "stop document dividers" between accounts. Maximum
number of items and statement stuffers (as defined by Fiserv Center) must
not be exceeded. The envelopes must meet size criteria, defined by Fiserv
and must be a "wet seal" not "self seal". Truncated accounts must be
separated from accounts receiving checks.
5. Inclearings: Client authorizes Fiserv to receive its inclearing items daily
from the Federal Reserve Bank. Fiserv will balance the inclearing items to
their cash letters, capture the items on magnetic media or image scan and
transmit the account information to Client's data processor. Fiserv will
also pull out for further handling the appropriate items for exception
handling or scrutinizing, and deliver the items to bulk file storage or to
Client for further processing.
6. Courier Service: The parties hereto acknowledge that it will be necessary
to make arrangements for the transport of items, records, and other data
from Client to Fiserv and from the Federal Reserve or Correspondent bank to
Fiserv. After Fiserv has provided the Item Processing Services, selected
items, records, and data must be transported from Fiserv to Client and the
Federal Reserve. The parties further acknowledge that the cost of such
transportation shall be Client's sole responsibility.
a. Client has the right to make provision for its own courier service to
provide the needed transportation as set forth in subsection 1.a.
above. Should Client not make provision for such courier service, or
should Client request that Fiserv make arrangements for such courier
service, then Fiserv, for Client benefit, shall make arrangements for
such a courier service. Client must notify Fiserv to provide such
courier service no less than 30 days prior to the date that Fiserv is
to begin providing Item Processing Services.
b. Client shall pay Fiserv for any and all charges, expenses, or costs
incurred by Fiserv in contracting for said courier service.
c. Client understands and agrees that Fiserv shall not have or assume any
liability or responsibility for such items, records, or data until
they reach Fiserv premises and that Fiserv shall have no further
responsibility or liability for them after they leave Fiserv premises.
d. The courier service shall at all times be deemed Client's independent
contractor, and shall not, at any time or under any circumstances, be
deemed Fiserv's agent or employee, regardless of whether said courier
service, at any pertinent time herein, is affiliated with or employed
by Fiserv.
e. Fiserv will monitor and track deliveries for Client. Should a delivery
be missing, Fiserv will notify Client through appropriate channels.
Should there be a dispute as to the proper delivery of any records,
Fiserv's records of delivery will be accepted as the undisputed record
of delivery.
7. Conversion Services: Fiserv will provide conversion services based on the
information provided by Client during the due diligence process. Following
Client's initial conversion to Item Processing Services, any additional
requests will be submitted to Fiserv at least 90 days prior to the required
implementation date. An estimate for the additional conversion services
will be provided. The implementation time for the conversion will be
delayed if Client requires more than 3 days to approve or decline the
conversion estimate. Client also acknowledges that Fiserv must approve any
changes to the MICR line and/or Account Number structure for Client prior
to proceeding with a conversion. Fiserv will make every reasonable attempt
to convert new MICR line and/or Account Number structures. Client agrees to
eliminate any non-standard MICR line and/or Account number structure as
identified during the due diligence process from its daily capture service
with 120 days after the initial conversion date. Client acknowledges that
Fiserv may elect to charge a fee such as the Special Statements Fee listed
in Exhibit B-2, for all non-standard items processed in the service. Client
acknowledges that Fiserv may not be able to achieve the stated performance
standards on accounts, transactions, or services involving non-standard
Westsound Bank 4 (FISERV LOGO)
Exhibit B-1
MICR lines and/or Account Number structures. In the event that the Account
Number appearing on the statement does not equal the Account Number on the
MICR line, Fiserv will not be responsible for any performance standards
relating to statement preparation and rendition.
Initial Client conversion is based on the IP Business Assumptions List
obtained during the due diligence process. This work includes an
inclearings, POD and bulk file sort pattern. In addition, it includes a
single extraction program to support the transmission of a daily
inclearings and POD file to a host site for processing. Sort specifications
will be developed in support of statement rendition services. Standard
reporting will be provided to Client to include a daily transaction report
sorted in transaction and account order, recaps of transmissions and cash
letters, and a daily cash report if required.
8. Research Services: Fiserv will provide research and photocopy services upon
request by Client or third party through legal process such as subpoena or
search warrant. Client agrees to pay Fiserv for all such research work,
regardless of whether it is requested by Client or a third party. Upon
receipt of a request for subpoena work or other significant or voluminous
research work, Fiserv will attempt to provide Client with an estimate of
the time required and corresponding cost to complete the request prior to
commencing the research services. Client must have selected an archival
storage service with Fiserv in order to provide Research Services.
9. Data Transmission: Client and Fiserv acknowledge and agree that if the
Client has contracted with a data processor other than Fiserv to provide
data processing services for Client, Fiserv shall have no responsibility
for the timeliness or quality of the service provided by Client's data
processor. Client's data processor shall deliver directly to Client all
reports generated from the data transmitted by Fiserv. If a data processor
other than Fiserv is used, then Fiserv shall have no responsibility for the
timeliness of such delivery or for the adequacy or accuracy of the reports
supplied by Client's data processor, except for errors caused by Fiserv
failure to transmit information.
10. ImageStream Archive Services: Fiserv will provide image item archiving
services to Client, as requested by Client. Items may be maintained in a
migrated storage media technology. Services include:
a. Seven Year on-line storage of images.
b. Import and export of images through a Fiserv approved format.
c. Viewing access of images through an approved Fiserv Viewer and/or
approved API (Application Program Interface).
d. Creation of a disk containing retrievable images of processed items in
a format compatible with an approved Fiserv Viewer.
11. Fraud Guard Services:
a. Digital Signature Verification. All designated on-us items drawn
against accounts at Client, which are to be captured by Fiserv, will
be processed through the Digital Signature Verification Technology
("DSV") to provide Client with a scoring of the presented item
signature as compared to the reference signatures. It is Client's
responsibility to maintain correct reference signatures and account
rules on DSV. Client acknowledges that Fiserv only provides a scoring
service and does not accept any responsibility for forged or
counterfeit items improperly paid through Client's use of DSV. Client
is responsible for designating the items for return with the
appropriate return reason each business day by 2:00 p.m. local time.
b. Secure Seal Positive Pay. All designated DDA items drawn against
accounts at Client, which are to be captured by Fiserv will be
processed through the FraudGuard Positive Pay Plus and Secure Seal
Technology to provide Client with a scoring and matching of the
presented items as compared to the data that is decoded in the Secure
Seal. The comparison process and the identification of exceptions will
follow the account rules setup according to the Client's
specifications. It is the Client's responsibility to maintain
relationship with their customer to support the Secure Seal encoding,
account rules on the technology and check stock. Client acknowledges
that Fiserv only provides a scoring and matching service and does not
accept any responsibilities for forged, altered or counterfeit items
improperly paid by either Client or technology. Client is responsible
for designating the items for return with the appropriate return
reason each business day by 2:00 p.m. local time.
Westsound Bank 5 [Fiserv Logo]
Exhibit B-1
12. ImageStream Remote Capture Services:
a. ImageStream Branch Capture Services: Fiserv will provide remote
capture services to facilitate the capture of items from Client's
image capture platform. Client agrees to purchase and configure
equipment and software according to Fiserv's standards. Client is
responsible for providing telecom services that connect to the Fiserv
System as required by Fiserv. Client is also responsible for periodic
scanning of items throughout the day to insure timely delivery of
images to Fiserv for subsequent processing. Fiserv will also proof and
balance any items/transactions captured through Fiserv's remote
capture service. All items captured will be used by Fiserv to provide
image services to Client. Client is responsible for having adequate
equipment, telecom and plans to facilitate its contingency planning
requirement for this service. Client is also responsible to ensure
that items processed through the remote capture service meet the ANSI
X9.37 standards for image quality. Client may be required to
interrogate items for Fiserv to facilitate the processing of items for
balancing of transactions, or such items will be placed in suspense
for Client's investigation. Client's use of the Back Office
Workstation Software and/or Teller Workstation Software listed on
Exhibit B-2 (collectively, "Branch Capture Software") is subject to
the additional terms and conditions set forth in Exhibit B-6.
b. ImageStream Merchant Capture Services: Client elects to use Fiserv's
Merchant Capture end-to-end solution ("Merchant Capture Solution").
Fiserv will provide a browser-based user interface and scanner
(pursuant to Exhibit L) to Client for use by Client's corporate
customer ("Customer"). This solution will be used by Customer to scan
checks to be deposited at the Client. At the point of scan Fiserv
agrees to perform an image quality assessment of the item. Items
failing the quality assessment will not be included in the electronic
deposit. A CAR/LAR read of the item will be performed at point of
scan. Images of the check items will be converted into IRDs and
processed with other POD work. Use of the Merchant Capture Solution is
subject to the following additional terms:
(i) Client shall ensure that Customer uses the Merchant Capture
Solution only for Customer's own internal business use in
accordance with the terms of this Agreement. Without limiting
the generality of the foregoing, Customer shall agree not to
make the Merchant Capture Solution available or allow use of it
in a computer bureau service business, timesharing, or otherwise
disclose or allow use of the Merchant Capture Solution by or for
the benefit of any third party.
(ii) Customer's access to and use of the Merchant Capture Solution
shall be pursuant to a Customer agreement, sufficient to enable
Client to comply with its obligations herein. Upon Fiserv's
request, Client shall provide Fiserv with a copy of each such
Customer agreement.
(iii) Fiserv shall have the right to each Customer's performance and
observance of the obligations and limitations set forth in the
agreements between Client and Customers. Fiserv shall be a third
party beneficiary of each agreement between Client and
Customers.
(iv) Client agrees that in its dealings with Customers, Client will
not make any representation or warranties in the name of Fiserv
concerning the Merchant Capture Solution.
c. ImageStream IRD Print Services: Client elects to use IRD Print
Services for the purpose of converting original checks to "Substitute
Checks" for deposit. This service consists of an image quality
assessment of the image file, routing of the image file to the print
destination, printing of Substitute Checks including all consumables
such as toner and paper, and printing and verification of the detail
list(s) and cash letter. To achieve required integrated services, IRDs
may then be processed into the Client's POD Capture Services.
d. Maintenance Services. Maintenance Services for Branch Capture Software
and the Merchant Capture Solution (collectively, "Products") shall
consist of the services set forth in this paragraph. Fiserv shall
provide Client with upgrades and changes to the Products designed or
developed by Fiserv or its licensors and released generally to its
other customers that pay for such maintenance services. Fiserv
reserves the right to make changes in operating procedures, program
language, file structures, access techniques, general purpose
programs, data storage requirements, input and output formats, report
formats, types of hardware supported, throughput, and other related
programming and documentation improvements required to maintain the
currency of the Product. As part of these services, Fiserv will
provide Client the changes with written instructions concerning
implementation. It is understood and agreed that Fiserv's provision of
upgrades and changes under this paragraph does not include providing
new product to Client which may result from rewriting the Product.
Fiserv alone shall determine whether work product related to the
Product constitutes new product as a result of a complete rewrite
(which is not provided to Client hereunder) or an improvement or
enhancement of the Product which is included as part of maintenance
services.
Westsound Bank 6 [FISERV LOGO]
Exhibit C
EFT SERVICES
Fiserv Solutions, Inc., a Wisconsin corporation ("Fiserv") and
WESTSOUND BANK ("Client") are executing this Exhibit C with the intention
that it shall form part of the Agreement between Fiserv and Client dated July
26, 2006, as amended through the date hereof (collectively, the "Agreement").
Client agrees with Fiserv as follows:
1. Services. Fiserv will provide Client the EFT Services (the "EFT"
Services") specified in Exhibit C-1 hereto.
2. Network Support Services. Fiserv will provide Network Support Services
(monitoring, service, and maintenance for equipment) in accordance with
instructions supplied by the Client. If any or all of the communication network
should fail, Fiserv or its designated agents will locate the problem and correct
any malfunction not associated with equipment or circuits provided by common
carriers. If the problem is located in the equipment or circuits of the common
carriers, Fiserv will contact the common carriers and request that the problem
be corrected. Maintenance fees incurred by Fiserv for repairs caused by faulty
electrical power, inadequate physical facilities, physical abuse, or other
Client-supplied or controlled factors will be reimbursed by Client.
3. Fees. CLIENT SHALL PAY FISERV THE FEES AND OTHER CHARGES FOR THE ACCOUNT
PROCESSING SERVICES SPECIFIED IN EXHIBIT C-2. THE FEES LISTED IN EXHIBIT C-2 ARE
VALID FOR THE ACCOUNT PROCESSING SERVICES CLIENT CONTRACTS FOR AS OF THE DATE OF
THE AGREEMENT. IF CLIENT SEEKS ADDITIONAL SERVICES FROM FISERV DURING THE TERM
OF THE AGREEMENT, FISERV'S FEES THEREFOR WILL BE QUOTED TO CLIENT UPON REQUEST.
FISERV AGREES TO GIVE AT LEAST 30 DAYS NOTICE TO CLIENT OF ANY CHANGES IN THE
RULES AND PROCEDURES ESTABLISHED FOR PROCESSING, UNLESS SUCH CHANGES ARE CAUSED
BY CHANGES MADE BY THE FEDERAL RESERVE SYSTEM OR OTHERWISE BEYOND THE CONTROL OF
FISERV, NOT PERMITTING FISERV TO GIVE SUCH ADVANCE NOTICE. FISERV RESERVES THE
RIGHT TO MAKE SUCH CHANGES TO THE EXHIBITS WITHOUT NOTICE AS MAY BE NECESSARY TO
COVER ANY INCREASES IN FEDERAL RESERVE SYSTEM COSTS AND CHARGES OR IN OTHER
COSTS AND CHARGES BEYOND FISERV'S CONTROL, INCLUDING CHANGES REQUIRED BY
APPLICABLE LAW OR REGULATORY ACTIVITY. THE FEES LISTED IN EXHIBIT C-2 MAY BE
CHANGED ANNUALLY EFFECTIVE EACH JANUARY 1 BEGINNING IN THE YEAR 2007 UPON 30
DAYS NOTICE TO CLIENT. EACH CHANGE SHALL BE LIMITED TO THE CHANGE IN THE U.S.
DEPARTMENT OF LABOR, CONSUMER PRICE INDEX FOR ALL URBAN HOUSEHOLDS - PACIFIC
NORTHWEST, PUBLISHED BY THE UNITED STATES DEPARTMENT OF LABOR, BUREAU OF LABOR
STATISTICS ("CPI") FOR THE 12-MONTH PERIOD PRECEDING EACH JANUARY 1 NOT TO
EXCEED 3% UNLESS THE CPI EXCEEDS 6%. ANY PERCENT OR FRACTION THEREOF ABOVE 6%
WILL BE ADDED TO THE 3%. FISERV WILL DELIVER TO CLIENT THE NOTIFICATION OF THE
FEE CHANGE Notwithstanding the foregoing limitations, Fiserv EFT shall have the
right to bill the Client the full amount of any increases in third-party
telecommunications costs, Network pass-through fees or other out-of-pocket
expenses incurred on behalf of Client as of the same effective date such
increases are billed to Fiserv EFT.
4. Responsibility for Accounts. Client shall be responsible for balancing
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 own expense, promptly
recompute accounts affected by discrepancies solely caused by Fiserv computer or
software systems or provide for another mutually agreeable resolution. Fiserv
will use its commercially reasonable efforts to correct errors attributable to
Client or other third party services of Client.
5. Reports. Fiserv will provide output reports to Client for daily,
weekly, monthly, and annual transactions.
6. Backup Records. Fiserv currently retains historical files at a
location separate from the data center sufficient to recreate files for the
most recent week and month-end. A daily transaction log of all Client
transactions for the most recent ten business days will also be maintained at
this location.
7. Hours of Operation. The EFT Services will be available for use by
Client during standard Fiserv business hours, excluding company holidays, as
specified in Exhibit C-3 hereto.
8. Performance Standards. The EFT Services shall be performed in
accordance with the standards specified in Exhibit C-4 hereto.
9. Software Modifications (a) Custom Programming. Fiserv will develop a
preliminary estimate of the anticipated man hours and costs plus or minus fifty
(50) percent associated with the implementation of said change. This estimate
will be returned to Client within four weeks. Written acceptance by Client to
proceed with the project will be required prior to beginning the final
specifications. Fiserv will assign a projected completion date to the project,
provided no additional changes or modifications to the original specifications
occur once the project is in development.
(b) Regulatory Software Changes. Software changes required by government
bodies will be quoted in accordance with subsection (a) above and such costs
will be distributed to all clients on an equitable basis.
(c) Major Software Enhancements. All major software enhancements will be
subject to additional charges for processing and development in accordance with
Exhibit C-1 hereto. Fiserv is under no obligation to upgrade its software
during the term of this Agreement.
10. Hardware. (a) Client will obtain written approval from Fiserv prior
to connecting any equipment to the data communication equipment provided by
Fiserv. Equipment, if any connected to the Fiserv System must be configured in
a manner acceptable to Fiserv. Client agrees to pay Fiserv for the testing and
acceptance of such equipment by Fiserv at its then current rates.
(b) Client shall at all reasonable times permit the authorized personnel
of Fiserv and the equipment manufacturers to have access to any Fiserv owned or
leased equipment provided under this Agreement, and shall permit removal of
such equipment upon termination of this Agreement.
11. Protection of Data. Fiserv has developed an operations backup center
for which Client has agreed to pay the charges indicated in Exhibit C-2. Fiserv
tests the procedure periodically to ensure compliance. Copies of transactions
files are maintained by Fiserv off premises in secured vaults.
12. Regulatory Compliance. (a) Client is solely responsible for
ascertaining that its use of EFT Services complies with all applicable state
and federal statutory and regulatory requirements. Fiserv agrees, however, to
monitor such applicable requirements, and to make changes in the EFT Services
as Fiserv believes is necessary to bring the EFT Services into compliance.
(b) Upon the written request of Client or a governmental regulatory
authority, Fiserv shall make output available to such regulatory authority for
purposes of audits and supervisory examinations of Client. The Client shall pay
Fiserv its then current rate for any time devoted to such examination, audit,
consulting, or other similar related effort.
(c) On an annual basis, Fiserv shall engage a qualified, independent
auditing firm to review and evaluate its internal control environment, in
accordance with relevant AICPA audit standards (a "SAS-70 Type II" Audit). Upon
completion of the engagement, a copy of the service auditor's report shall be
made available to Client at Fiserv's then current rate.
13. On-Line Security. Fiserv will provide access to the Client, after
the execution of appropriate "on-line" security measures, to allow the Client
to perform Cardholder maintenance on Client's data files in the Fiserv system.
14. Network Agreement. Fiserv provides access to electronic fund
transfer networks for the purpose of participating in the exchange of
transactions on an inter-network basis. Client may participate in such networks
subject to the following terms and conditions:
(a) Client will enter into an agreement with each such network in which
Client elects to participate, and will operate within and abide by the
operating rules established by each such network, and pay any associated fees
imposed by each such network; and
(b) The clearing of transactions and reconciliation of payments will be
in accordance with settlement procedures established between Fiserv and each
such network.
15. Exclusivity. Client agrees that Fiserv shall be the exclusive
provider of electronic transaction services (i.e. ATM driving, ATM Cards, VISA
Check or MasterCard debit cards) that are the subject of this Exhibit. During
the term of this Agreement, Client agrees not to enter into any agreement with
any other entity to provide EFT Services (or similar services) provided
hereunder without the prior written consent of Fiserv.
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit C to the
Agreement to be executed by their duly authorized representative as of the date
indicated below.
FOR CLIENT: FOR FISERV:
WESTSOUND BANK FISERV SOLUTIONS, INC.
DBA FISERV EFT
By: /s/ Mark Freeman By: /s/ Martin N. Singer
- -------------------------------------- --------------------------------------
Martin N. Singer
- -------------------------------------- --------------------------------------
Name Name
Senior Vice President
- -------------------------------------- --------------------------------------
Title Title
8/1/06 8/11/06
- -------------------------------------- --------------------------------------
Date Date
Exhibit C-1
EXECUTIVE OVERVIEW
Fiserv will provide Client with the following EFT Services:
1. On-Line Host Interface. The operational environment that allows an
electronic transaction to be processed against a cardholder's account.
2. ATM Driving/Monitoring. The process of providing an ATM with the on-line
instructions necessary to process transactions and verifying equipment
and telephone operability.
3. Networks. Those regional or national ATM associations who provide electronic
access to financial transactions for cardholders of member financial
institutions. Networks are as set forth in Exhibit C-2.
4. Web Connectivity. Links Client's IBM compatible PC to the Fiserv System,
allowing Client to retrieve reports, retrieve transaction history, and
perform network adjustments.
5. Card Management. An automated system for plastic card ordering, pin
ordering, card re-issue tracking and "Hot Carding", accessible to
Client via On-Line Terminal Dial-Up PC or Batch Processing.
6. Transmissions. Transactions reports and settlement information transmitted
to Client's host data processing system.
7. Business Continuity. Fiserv's disaster recovery program.
8. Telecommunications and Equipment. ATM phone line and modems relevant to
driving and monitoring Client's ATMs.
9. Conversion Date. On mutually agreed upon date by Client and Fiserv.