EXHIBIT 10.8
Standard Internet Banking System Licensing Agreement
prepared for
Pacific Mercantile Bank, Newport Beach, CA
1. The Agreement.
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Q-UP Systems (QUP), a d.b.a. of Sage Systems Incorporated, grants to
Pacific Mercantile Bank doing business at, 450 Newport Center Drive, Suite
100, Newport Beach, CA 92660-7610 (Client), a license to use QUP's Internet
Banking System software and any additional module listed in Exhibit A. The
license is non-exclusive and non-transferable and is limited to the
conditions of this Agreement.
2. The System.
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The Internet Banking System software, any additional module listed in
Exhibit A, all of the peripheral attachments such as pertinent
documentation and any future upgrades, will be hereafter referred to as
"The System".
3. The System Title and License.
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Client's title rights to The System consist only of the license to use The
System as detailed by the terms of this Agreement. Otherwise, title to The
System remains the sole possession of QUP. Client will have access to a
complete copy of QUP's source code and any related updates and
documentation for The System in the event that QUP should cease its
business operations. The code will be stored in escrow.
Under the terms of this license Agreement, Client shall have no right to
sub-license, sell, reproduce, manipulate the code or combine The System in
any manner. Use of The System is restricted to processing the data needs of
Client named in this Agreement only, which thus prohibits time-sharing or
servicing The System on behalf of a third party.
4. Purchase Price.
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A deposit as listed in Exhibit A is due upon execution of this Agreement.
The remaining balance is due and payable upon receipt of an invoice from
QUP subsequent to the Installation. Costs for The System are listed in
Exhibit A.
5. Pre-Installation Requirements.
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Client must provide and have ready prior to the day of installation the
following:
a) Internet Connectivity.
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Client is responsible for acquiring Internet connectivity through an
Internet Service Provider. Email, browsers, chat programs and other
Internet services not directly related to The System are also the
responsibility of the Client.
b) Fully Tested Communication Line.
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Client must install a line of communication (minimum required - ISDN line)
from the demarcation point outside to the ultimate link inside Client's
building. Client must certify in writing to QUP prior to installation that
the line is connected and operating. Client bears all responsibility and
all associated costs for the connection. QUP can advise Client on how to
accomplish the communication line, if necessary. In the event that a failed
communication line delays installation, Client will be responsible for the
extra costs associated with the delay.
In order to fully test the communication line, a router must be installed.
Client is responsible for installing the router. QUP can provide this
service for the compensation of time, materials and travel expenses.
c) Hardware.
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As Client has chosen to house The System on-site, Client is responsible for
procurement of the minimum hardware requirements as listed in Exhibit A. At
Client's request, QUP may provide turnkey assistance in the procurement of
all of the necessary hardware with all bills being sent to Client.
d) Core Software Data Interface.
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QUP will provide the correct interface between Client's host computer
system and The System. Client is responsible for providing the "Pull" files
in the required formats to extract the necessary data from the host
computer system to be utilized by The System. Provided that Client provides
all required files in the correct format, QUP will assume responsibility
for proper functioning of the interface and will cooperate fully with
client to ensure continued proper functioning of this interface. Client,
however, is responsible for any and all costs associated with providing the
required "Pull" files for this interface, including any billing(s) by the
Client's host vendor or other computer professionals employed by Client to
facilitate such process.
6. Server Procedures.
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Client will ship its server to QUP's Corporate Headquarters for preparation
of installation. QUP will install and configure The System onto the WinNT
4.0 server, the router, secure access firewall software, and Verisign
Security Digital ID. QUP will pre-test the server before delivery to ensure
it is functioning properly. QUP will then deliver the secured, configured
server to Client on the installation date agreed to by both parties.
7. On-Site Responsibilities.
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Client must acknowledge and agree to accept the indirect responsibilities
of operating and maintaining The System "in-house". For every subparagraph
below, QUP can provide assistance at Client's request. However, QUP
reserves the right to charge Client at standard service rates for any
assistance that does not specifically relate to The System.
a) NT Server.
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Q-UP Systems In-Bank License Agreement Page 2
Client assumes full responsibility for the server on which The System and
the NT software platform rests. Troubleshooting issues that arise from the
NT server should be addressed to the manufacturer of that server. QUP will
provide at time of installation the appropriate contact number for
assistance with the NT Server.
b) NT Software.
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Client assumes full responsibility for its NT server software. Support
issues arising over the NT software should be addressed to Microsoft Corp.
c) Router.
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Client assumes full responsibility for the router. Troubleshooting issues
arising over the router should be addressed to the manufacturer of that
router. QUP will provide at time of installation the appropriate contact
number for assistance with the router.
d) Tape Back Up.
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The System comes equipped with pre-installed, pre-configured tape back up
software. Client is also provided with instructions that detail how the
software works and needs to be maintained on a daily basis. Client must
procure the tape drive, as noted in the hardware requirements in Exhibit A.
QUP can assist Client on how to operate the tape back up, but it is
Client's full responsibility to ensure daily completion of the tape back up
procedure.
8. Installation.
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QUP will deliver and install The System. Client and QUP will mutually agree
upon time and date for delivery at some point after the Agreement is
executed and the deposit has been tendered, unless QUP executives and
Client have made other arrangements. Installation includes testing The
System to ensure that it is functioning properly and training of designated
representatives.
a) Costs.
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All reasonable costs associated with installation, including travel, meals,
lodging, etc are to be reimbursed by Client.
9. Training.
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Client must appoint one or more technical representatives to be present on
the day of installation. Training includes educating Client's technical
representatives about the day to day operations and general maintenance of
The System. QUP will provide the Client's designated personnel with an
Internal User's Guide that explains the utilities of The System. If Client
wishes, QUP will also hold a general training session for customer
representatives, tellers, etc to teach them how to use The System from the
customer's perspective in order to help facilitate answers to possible
questions from customers.
10. Installation Packet.
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Client will receive a packet that includes operational guidelines, a back
up installation diskette and procedural forms.
11. Support Services.
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Client can reach QUP at its headquarters Monday through Friday, 8:00 a.m.
to 5:00 p.m., CST to get assistance for The System. When upgrades are made
to The System, QUP will contact Client to arrange for transfer of the
enhanced files.
12. Termination.
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This Agreement may be terminated if either party fails in the performance
of any of its duties or obligations under this Agreement. In such an event,
the harmed party may terminate this Agreement by sending written notice to
the breaching party. A party receiving written notice of a harm has ninety
(90) days from receipt of written notice in which to remedy the Breach to
the reasonable satisfaction of the harmed party. If no cure has been
reached within ninety (90) days this Agreement automatically terminates. In
the event of termination, Client will uninstall The System and return all
marketing, operating, procedural and all other material information, and
other property relating to The System, to QUP within thirty (30) days of
termination.
13. Limited Warranty; Warranty Disclaimer; Limitation of Liability.
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(a) Limited Warranty. QUP warrants that is has full corporate power
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and authority to enter into this Agreement, and further warrants that all
computer software included as part of The System is Year 2000 Compliant,
which means that all such software will operate prior to, during, and after
the calendar year 2000, A.D., and that the software will operate during
each such time period without substantial error relating to date data,
specifically including error relating to, or the product of, date data
which represents or references different centuries or more than one
century.
(b) Warranty Disclaimer. THE LIMITED WARRANTY SET FORTH IN
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SUBSECTION 13 (a) ABOVE IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, AND QUP EXPRESSLY CLAIMS ALL OTHER WARRANTIES, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF NON-INFRINGEMENT, FITNESS FOR A PARTICULAR
PURPOSE OR MERCHANTABILITY WITH RESPECT THERETO.
(c) Sole Remedies. In the event that the magnetic media on which The
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System is recorded is defective as to material or workmanship under normal
at any time during the sixty (60) day period immediately following the date
of installation of The System, QUP shall repair or replace any such
defective magnetic media, at its sole option, upon receipt of notice of
such defect from Client, provided that such notice is received within a
reasonable time after such defect is or should have been known by Client.
Client's sole and exclusive remedy for such defective magnetic media shall
be its repair or replacement by QUP.
Q-UP Systems In-Bank License Agreement Page 3
In the event that The System fails to substantially conform to either
the operational guidelines discussed in Section 10 of this Agreement or to
the Year 2000 limited warranty set out in Section 13 (a) at any time during
the initial term of this Agreement QUP will, at its sole option upon
receipt of written notice from Client received by QUP within a reasonable
time after such failure is or should have been known by Client of such
failure of The System to so substantially conform, either repair or replace
The System so that it thereafter substantially conforms to such operational
guidelines. In the event that QUP is unable to either so repair or replace
The System within a reasonable period of time after QUP's receipt of
written notice from the Client, QUP shall refund all amounts previously
paid by Client pursuant to this Agreement, this Agreement shall thereupon
terminate, and Client shall uninstall The System and return The System and
all marketing, operating, procedural and other material information
relating to The System to QUP within thirty (30) days of receiving said
refund from QUP. QUP's repair or replacement of The System or, in the
alternative, QUP's refund to Client of all funds paid pursuant to this
Section 13, constitutes Client's sole and exclusive remedy for any
applicable failure of The System to substantially conform to the
operational guidelines for The System.
(d) Limitation of Damages. QUP SHALL NOT BE LIABLE TO CLIENT OR ANY
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THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT
DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, ARISING OUT OF THIS
AGREEMENT, WHETHER OR NOT QUP HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY. QUP'S LIABILITY UNDER THIS AGREEMENT FOR ANY AND ALL ACTS
OR OMISSIONS SHALL NOT EXCEED THE AMOUNTS ACTUALLY PAID TO QUP UNDER THIS
AGREEMENT. PROVIDED, HOWEVER, THE LIMITATION OF LIABILITY SHALL NOT APPLY
TO QUP'S OBLIGATIONS PURSUANT TO SECTION 29 OF THIS AGREEMENT.
14. Server Responsibility.
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QUP is responsible for the presence and continued operation of The System
on Client's server.
a) FTP Requirements. In the event that Client's server runs FTP, it
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is a security requirement that the FTP service be turned off. On occasion,
a QUP representative will need to transfer files to Client, at which time
the QUP representative will arrange a specific and fixed time for the FTP
service to be turned on. The FTP session between QUP and Client will be
password-controlled. At the end of any FTP session, the QUP representative
will instruct Client to stop the FTP service.
15. Network Security.
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QUP agrees to secure the stand-alone Web server that is responsible for the
storage of data received from the bank's core system. This stand-alone
server is equipped with industry standard security measures to protect it
from intrusion and corruption. If Client links the stand-alone server to
any other of its networks or PC's, Client is fully responsible for the
connection, configuration and security components involved with the
additional connection(s).
QUP SHALL NOT BE LIABLE TO CLIENT OR TO ANY THIRD PARTY FOR ANY BREACH OF
SECURITY OR VIOLATION OF PRIVACY ISSUES THAT MAY OCCUR WITH RELATION TO THE
SYSTEM. CLIENT SHALL DEFEND OR SETTLE, AT ITS OWN EXPENSE, ANY CLAIMS OR
CAUSE OF ACTION OR PROCEEDING DUE TO A BREACH OF SECURITY OR VIOLATION OF
PRIVACY.
16. Confidentiality.
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QUP and Client agree that this Agreement, and the relationship it
represents, requires the exchange of confidential information over the
course of normal business. QUP and Client further agree that this
confidential information is to be communicated and handled in the strictest
of confidence. QUP and Client agree not to disclose any information about
the other to third parties that is not already readily available to the
public. In short, QUP and Client agree to treat each other's confidential
business data with the same sensitivity and propriety as they would their
own.
17. Electronic Bill Payment.
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Client agrees that for the life of this licensing agreement Client will not
utilize any other software than The System for the settlement and
disbursement of electronic bill payments as they originate from The System.
Exclusive use of The System for originating, settling and disbursement of
electronic bill payments originating from The System is a condition of this
Agreement. All fees associated with Bill Payment are enumerated in Exhibit
A. To activate Bill Payment, Client must execute the Bill Payer Activation
Form- Attachment B, of this Agreement.
a.) Monthly Report and Fees.
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QUP will record the number of users per month and bill Client as per the
Bill Pay fees listed in Exhibit A. Client will be invoiced and remittance
is due by the 10th of the following month.
18. Annual License and Maintenance.
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An annual license fee is to be paid to QUP at the amount listed in Exhibit
A. Client will receive thirty (30) days advance notice of any fee increase
prior to its effective date. Fees may increase annually, but are guaranteed
not to exceed 5% of the previous year's total.
Q-UP Systems In-Bank License Agreement Page 4
19. Federal Compliance.
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QUP agrees to maintain compliance with any new federal regulations that may
require programming changes to the System. These required changes are to be
covered under Client's annual license and maintenance agreement. Client
agrees to accept financial responsibility for any costs (both hardware and
software) associated with conforming to Federal banking regulations, with
the exception of the programming changes mention above.
20. Copyrights and Trademarks.
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QUP has the sole right to copyright or trademark all components of The
System, The System name and all logos associated with The System.
21. Changes to The System.
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Requests by Client to modify The System will be taken and reviewed on a
quarterly basis. QUP reserves the right to determine the schedule of
changes for a given quarter.
22. Jurisdiction.
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The enforceability of this Agreement is subject to the laws of the State of
Texas. Jurisdiction and venue for any action arising out of the
relationship between QUP and Client shall exclusively be in state or
federal court located in Travis County, Texas.
23. Agreement.
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Once executed, this Agreement constitutes the complete understanding
between Client and QUP as to the nature of their business relationship and
thereon supercedes any previous agreements whether oral or written between
the parties. This Agreement is executed when QUP receives the signed
Agreement. This Agreement may be modified or supplemented only by a further
execution of the change in writing by an authorized representative of both
parties. This Agreement is binding on all heirs, successors and assignees
of Client and QUP.
24. Term and Renewal.
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This Agreement extends to one year beyond the date named below (with
signature). The Agreement renews automatically for additional one year
periods unless either party notifies the other in writing of the desire to
discontinue the Agreement sixty (60) days prior to the renewal date.
25. Notices.
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Please send notices to QUP Headquarters:
Q-UP Systems
8303 Mopac
B 450
Austin, Texas 78759
26. Hold Period.
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QUP strongly recommends that after installation Client wait 30 days before
introducing The System to its customer base in order to fully test and
fine-tune the interface between The System and Client's core software
system.
27. Client Responsibilities for Check Imaging.
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Client is fully responsible for providing the data interface program that
transfers data between The System and Client's Host System, as well as all
associated costs related to the interface.
It is Client's responsibility, in conjunction with Client's check imaging
vendor, to supply QUP with the required check image file format for images
and indices, if available. QUP will write a check imaging interface to meet
these file format specifications. In addition, Client, in conjunction with
Client's check imaging vendor, is responsible for providing the application
that retrieves and delivers the image files to the Web server, either
through direct connection to the Web server or shared space on Client's
Local Area Network (LAN).
28. Web Site Fee Schedule.
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See Exhibit B for specifics on product and services to be provided by QUP.
29. Indemnification.
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QUP hereby agrees to indemnify Client and hold Client harmless, subject to
the limitation of liability stated in Section 13(d) of this Agreement, from
and against any claims of infringement of any copyright or trade secret
protected under the laws of the United States, including reasonable legal
fees and expenses. QUP's obligation to so indemnify and hold harmless
Client is expressly conditioned on Client notifying QUP in writing promptly
after Client becomes aware of any such claim, and Client will allow QUP to
control the proceedings. Client will cooperate fully with QUP during such
proceedings. In the event any permanent injunction is entered prohibiting
Client from utilizing all or any part of The System, QUP may but shall not
be obligated to replace, in whole or in part, the subject of the injunction
with substantially compatible and functionally equivalent software and/or
items, or modify such software or other items to avoid infringement.
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30. Signatures
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By signing this page, authorized parties of both Client and Q-UP agree to
the terms and conditions set forth in the entire agreement.
Sage Systems, dba QUP Systems Pacific Mercantile Bank
By: Mr. L. D. Martin By: Mr. John P. Cronin
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(print or type name) Mr. Daniel L. Erickson
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(print or type name)
Title: President Title: EVP
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EVP
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Date: 1-28-99 Date: 1-28-99
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/s/ John P. Cronin
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/s/ L.D. Martin /s/ Daniel L. Erikson
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Q-UP Signature Client Signature