ITEM PROCESSING AGREEMENT
by and between
FIDELITY INFORMATION SERVICES, INC.
and
AMERICAN RIVER BANK
April 22, 2005
Page 4 of 43
TABLE OF CONTENTS
1. SERVICES..................................................................5
1.1 DESCRIPTION OF SERVICES..............................................5
1.2 METHOD OF DELIVERY...................................................5
1.3 APPLICABLE TERMS.....................................................5
1.4 TIME ZONE............................................................5
2. DATA......................................................................5
2.1 FORM.................................................................5
2.2 DATA DELIVERY........................................................5
3. PROCESSING................................................................5
4. CONVERSION AND COMMENCEMENT...............................................6
5. FEES AND EXPENSES.........................................................6
5.1 FEES TO FIDELITY.....................................................6
5.2 DISPUTED CHARGES.....................................................6
5.3 ADJUSTMENT OF FEES...................................................6
5.4 PAYMENT OF ONE-TIME FEES.............................................7
5.5 PAYMENT OF RECURRING FEES............................................7
5.6 TRAVEL AND EXPENSES..................................................7
5.7 MERGERS AND ACQUISITIONS.............................................7
6. TAXES.....................................................................7
7. REPROCESSING..............................................................7
8. RISK OF LOSS DURING TRANSIT OR TRANSMISSION...............................7
8.1 ELECTRONIC TRANSMISSION..............................................7
8.2 MESSENGER............................................................7
8.3 EDT..................................................................7
8.4 TRANSMISSION.........................................................8
8.5 LIMITATION...........................................................8
9. PRINTING..................................................................8
10. CLIENT REVIEW..........................................................8
11. TERM, TERMINATION AND RENEWAL..........................................8
11.1 TERM.................................................................8
11.2 RIGHT TO TERMINATE...................................................8
11.3 METHOD OF TERMINATION................................................8
11.4 NO WAIVER OF DEFAULT.................................................9
11.5 EXTENDED SERVICES....................................................9
11.6 TERMINATION FOR CONVENIENCE..........................................9
11.9 DATE FEES ARE PAYABLE................................................9
12. RETENTION OF DATA......................................................9
13. FORCE MAJEURE AND LIMITATION OF LIABILITY..............................9
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13.1 FORCE MAJEURE........................................................9
13.2 LIMITATION OF LIABILITY.............................................10
13.3 TIME OF PERFORMANCE AND INCREASED COSTS.............................10
14. WARRANTIES............................................................10
14.1 LICENSES AND PERMITS................................................11
14.2 COMPLIANCE WITH LAWS................................................11
14.3 NO INTERFERENCE WITH CONTRACTUAL RELATIONSHIP.......................11
14.4 COVENANT OF GOOD FAITH..............................................11
14.5 AUTHORIZATION AND EFFECT............................................11
14.6 CLIENT SOFTWARE.....................................................11
14.7 PROFESSIONAL AND WORKMANLIKE........................................11
14.8. DISCLAIMER OF WARRANTIES.........................................11
15. INDEMNIFICATION.......................................................11
15.1 PERSONAL INJURY AND PROPERTY DAMAGE.................................12
15.2 INFRINGEMENT OF FIDELITY SOFTWARE...................................12
15.3 INFRINGEMENT OF CLIENT-PROVIDED SOFTWARE............................12
16. CONTINGENCY PLAN......................................................13
16.1 BUSINESS CONTINUITY PLANNING........................................13
16.2 FILE BACKUP.........................................................13
16.3 RETENTION...........................................................13
17. CONFIDENTIAL INFORMATION..............................................13
17.1 OWNERSHIP...........................................................14
17.2 CONFIDENTIALITY OBLIGATION..........................................14
17.3 NONDISCLOSURE COVENANT..............................................14
17.4 EXCEPTIONS..........................................................14
17.5 CONFIDENTIALITY OF THIS AGREEMENT; PROTECTIVE ARRANGEMENTS..........15
17.6 SECURITY MEASURES...................................................15
17.7 REMEDIES............................................................15
18. AUDIT RECORDS.........................................................15
19. REGULATORY COMPLIANCE.................................................15
20. INSURANCE.............................................................15
21. AUDITOR'S REVIEW......................................................15
22. SECURITY..............................................................15
23. GOVERNMENTAL EXAMINATIONS.............................................16
24. SUBCONTRACTING........................................................16
25. GENERAL...............................................................16
25.1 INDEPENDENT CONTRACTOR..............................................16
25.2 NOTICES.............................................................16
25.3 HEADINGS AND CONSTRUCTION...........................................16
25.4 SURVIVAL OF PARAGRAPHS..............................................17
25.5 ENTIRE AGREEMENT AND AMENDMENTS.....................................17
25.6 SEVERABILITY........................................................17
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25.7 THIRD PARTY BENEFICIARIES...........................................17
25.8 EXECUTED IN COUNTERPARTS............................................17
25.9 REMEDIES CUMULATIVE.................................................17
25.10 PUBLICITY........................................................17
25.11 ASSIGNMENT.......................................................17
25.12 GOVERNING LAW....................................................17
26. DISPUTE RESOLUTION....................................................18
26.1 DISPUTE RESOLUTION PROCEDURES.......................................18
26.2 CLAIMS PROCEDURES...................................................18
26.4 ARBITRATION PROCEDURES..............................................18
26.5 CLAIM EXPIRATION....................................................19
27. FINANCIAL STATEMENTS..................................................19
EXHIBIT A.....................................................................20
EXHIBIT B.....................................................................21
EXHIBIT C.....................................................................22
ATTACHMENT 1
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ITEM PROCESSING AGREEMENT
This Item Processing Agreement (the "Agreement"), dated as of the 22nd day of
April, 2005, (the "Effective Date"), by and between FIDELITY INFORMATION
SERVICES, INC., an Arkansas corporation with offices located at 601 South Lake
Destiny Drive, Maitland, Florida 32751 ("Fidelity"), and AMERICAN RIVER BANK,
having its principal place of business at 1545 River Park Drive Suite #107,
Sacramento, CA 95815 ("Client").
NOW, THEREFORE, in consideration of the payments to be made and
services to be performed hereunder, the parties agree as follows:
1. SERVICES.
1.1 Description of Services. Fidelity shall provide the item
processing services ("Services") described in this Agreement, its Exhibits and
Attachments (all of which are attached to and made a part of this Agreement),
and such additional services as may be added by the parties from time to time
pursuant to a written amendment to this Agreement. Services shall be provided in
accordance with applicable Fidelity user and operation manuals, bulletins,
guidelines, procedures, policies and similar materials, as established and
revised from time to time. Fidelity will provide the Services on its own and/or
through one or more Fidelity affiliates and/or subcontractors and shall be the
sole and exclusive provider of the Services to Client. Fidelity shall process
MICR data, statistical data, records, and all other input furnished to Fidelity
(collectively, "Data") and shall prepare and make available, in accordance with
such procedures and schedules established by Fidelity, all documents, reports,
customer statements and other output (collectively, "Output").
1.2 Method of Delivery. The method of delivery of reports shall be
either (1) by messenger delivery of printed reports or (2) by remote print at
the designated Client location. The method of delivery will be selected during
implementation of the Services. A request from Client to change such method must
be received by Fidelity at least sixty (60) days prior to the requested change
date. Any fees or charges resulting from such change shall be in accordance with
Fidelity's then-prevailing fee schedule. If Client receives report Output
electronically, to be printed at Client's location, then Client will furnish, at
its own expense, all printers, manpower, forms and paper for printing, unless
stated otherwise in this Agreement.
1.3 Applicable Terms. The general terms applicable to Services
provided pursuant to this Agreement are set forth below in this Agreement.
Specific terms and conditions applicable to a particular Service shall be as set
forth in the Exhibits to this Agreement.
1.4 Time Zone. For purposes of this Agreement, it is understood
that any times that are listed are for the time zone in which Client is
headquartered, unless otherwise stated or agreed.
2. DATA.
2.1 Form. Data shall be delivered by messenger or electronic
transmission to the designated Fidelity facility at the times and in the form
prescribed by Fidelity. Fidelity shall not be liable for the accuracy,
completeness and authenticity of Data furnished to Fidelity by Client, a Federal
Reserve Bank, an Automated Clearing House, or any other third party, and shall
have no obligation or responsibility to audit, check or verify the Data. Client
shall be solely responsible for determining the correctness of magnetic ink
encoding on items submitted for Client's payment, including but not limited to
checks and drafts ("Items"); for verifying dates, signatures, amounts,
endorsements, authorizations, payment notices, collection times, fees and
charges to Client's customers and all other similar matters on Data submitted
for processing, including Items; and for placing stop payments and holds on
accounts.
2.2 Data Delivery. Fidelity must receive all Data, electronically,
at its facility no later than 9:00 p.m., Monday through Thursday and 10:00 p.m.
on Fridays, except as may be otherwise specifically stated in this Agreement or
the Exhibits.
3. PROCESSING. Fidelity shall follow such procedures and time schedules as
it may deem appropriate in processing Data and posting entries on behalf of
Client. Client authorizes Fidelity to create and process such entries, including
but not limited to adjusting or correcting entries, as it deems necessary or
appropriate to process the Data. Fidelity shall provide a report of any such
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adjusting or correcting entries to Client. It shall be Client's sole
responsibility to effect a timely return of any Item, or to pursue any claim or
right of action in a timely manner against any third party arising from such
Item. If Data is received by Fidelity prior to the time limits required by this
Agreement, Fidelity may process such Data immediately. If Fidelity receives Data
after the time limits required by this Agreement, or Data is delivered by any
method other than that indicated in this Agreement or agreed to in writing by
the parties, Fidelity may delay the processing of such Data. However, if
Fidelity does process such Data, Client shall pay any additional fees and
charges required by Fidelity.
4. CONVERSION AND COMMENCEMENT. Fidelity shall provide reasonable
assistance to Client during its conversion to the Services through and until the
Commencement Date for Services, at no cost to Client ("Conversion Assistance").
Initial training of Client's trainers will be performed during the initial
implementation of the Services outlined in this Agreement. All documentation for
the Services will be provided to Client on a CD ROM, at no additional charge.
Any additional training or documentation requested by Client after the
Commencement Date for Services ("Special Projects") will be charged at
Fidelity's then prevailing rates. The "Commencement Date for Services" is the
date that the Services are first installed and available for Client's use in a
production environment which is signified by Fidelity turning the system over to
Fidelity support.
5. FEES AND EXPENSES.
5.1 Fees to Fidelity. Client shall pay Fidelity for the Services
provided hereunder, and for any additional services that are added to this
Agreement, the fees specified in the Schedule of Fees for Contracted Services -
Attachment 1 (hereinafter, "Attachment 1"). Client shall receive a monthly
credit in the amount of Three Thousand One Hundred and Ten ($3,110.00) Dollars
for the Term of this Agreement as reflected in Attachment 1. Unless otherwise
agreed by the parties, Client shall make all payments under this Section to
Fidelity by wire transfer of immediately available funds to an account or
accounts designated by Fidelity. In the event that the due date of any payment
is not a day upon which banks are open in the United States, then the due date
of the payment shall be the immediately following date upon which banks are open
in the United States. Any amount not received within fifteen (15) days after the
payment due date by Fidelity shall be subject to interest on the balance overdue
at a rate equal to the lesser of: (i) the prime rate plus one percent (1%) per
annum, as published in the Wall Street Journal on the first Monday (or next bank
business day) following the due date; or (ii) the highest rate permitted by law,
in each case for the number of days from payment due date up to and including
the date payment is actually made by Client (calculated on the basis of the
actual days in the applicable calendar year). However, if any amount is not paid
within forty five (45) days of the due date, Fidelity may, at its option,
immediately suspend performance hereunder until payment is made, in addition to
any other rights or remedies provided to Fidelity by this Agreement or
applicable law.
5.2 Disputed Charges. Should Client dispute in good faith all or a
portion of the amount due on any invoice or require any adjustment to an
invoiced amount, Client shall notify Fidelity in writing prior to the due date
of that invoice, of the nature and basis of the dispute and/or adjustment as
soon as possible using the dispute resolution procedures set forth in Section 26
of this Agreement. Each party shall use its reasonable best efforts to resolve
the dispute prior to the payment due date. If the parties are unable to resolve
the dispute prior to the payment due date, Client shall nevertheless pay the
entire undisputed amount to Fidelity by the due date. If it is ultimately
determined that Client should have paid the full amount to Fidelity, Client
shall be responsible for payment of said amount, plus interest in accordance
with Section 26.1 of this Agreement on Client's next invoice.
5.3 Adjustment of Fees. The recurring fees, as outlined in
Attachment 1 (non-pass through and non-one-time fees), payable each year shall
be adjusted annually during the month in which the anniversary of the
Commencement Date for Services ("Adjustment Date") falls, as follows. Fees shall
be increased, but not decreased, by the percentage increase in the Consumer
Price Index for All Urban Consumers-Other Goods and Services (the "CPI-U") as
published by the U.S. Department of Labor, Bureau of Labor Statistics for the
month of December preceding the Adjustment Date over the CPI-U for the month of
December in the immediately preceding year. If additional Services are added to
the Agreement, the fees shall be adjusted on such Adjustment Date in accordance
with this Section. In the event the CPI-U is unavailable in time to allow the
adjustment to be made on the Adjustment Date, Client shall continue to pay the
then current fees for the Services until the CPI-U is made public, at which time
the adjustment shall be calculated retroactively to the Adjustment Date, and
Client shall immediately pay to Fidelity any difference between the fees
actually paid and adjusted fees. The adjustments shall be compounded and
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cumulative. In the event the CPI-U is discontinued or revised during the Term of
this Agreement and any extensions hereof, Fidelity and Client shall select
another governmental index or computation as a substitute CPI-U in order to
obtain substantially the same result as if the CPI-U had not been discontinued
or revised.
5.4 Payment of One-Time Fees. Client shall pay Fidelity any
one-time fees specified in Attachment 1 to this Agreement, and for any
additional services which are added to this Agreement. Method of payment shall
be as specified in Section 5.1. Except as may be specifically stated in
Attachment 1, the one-time fees shall be due in the following manner: fifty
percent (50%) due upon signing of this Agreement, and the remaining fifty
percent (50%) due on the Commencement Date for Services.
5.5 Payment of Recurring Fees. Fidelity will commence invoicing
Client for the recurring fees set forth in Attachment 1 on the Commencement Date
for Services.
5.6 Travel and Expenses. Client shall reimburse Fidelity for all
reasonable travel and expenses related to the performance of any Special
Projects requested by the Client.
5.7 Mergers and Acquisitions. At Client's request and subject to
Section 25.11 below and Attachment 1, Fidelity will process additional data and
perform additional services resulting from any merger, acquisition, affiliation,
or restructuring (regardless of form) involving Client for fees to be mutually
agreed upon prior to the time Fidelity begins the additional processing.
6. TAXES. All charges and fees to be paid by Client under this Agreement
are exclusive of any applicable withholding, sales, use, value added, excise,
services or other United States or foreign tax which may be assessed on the
provision of the Services. In the event that a withholding, sales, use, value
added, excise, value added, services or other United States or foreign tax is
assessed on the provision of any of the Services provided to Client under this
Agreement, Client will pay directly, reimburse or indemnify Fidelity for such
taxes, as well as any applicable interest, penalties and other Fidelity fees and
expenses. The parties will cooperate with each other in determining the extent
to which any tax is due and owing under the circumstances, and shall provide and
make available to each other any resale certificates, information regarding
out-of-state or country use of materials, services or sale, and other exemption
certificates or information reasonably requested by either party. Client shall
not be liable for payment of any taxes based on Fidelity's net income.
7. REPROCESSING. If any Data submitted to Fidelity is incorrect,
incomplete or not in the format required, Fidelity, may require Client to
resubmit the Data or Fidelity may correct and complete the Data itself, and
Client shall pay additional fees and charges for any additional work incurred by
Fidelity in connection therewith. In addition, any reprocessing required because
of incorrect or incomplete Data shall be at Client's expense, in accordance with
Fidelity's the-current fee for such Service. Fidelity shall attempt to notify
Client prior to incurring any expenses for which Client would be liable under
this Section.
8. RISK OF LOSS DURING TRANSIT OR TRANSMISSION.
8.1 Electronic Transmission. The following shall apply to all
aspects of electronic transmissions.
8.2 Messenger. Client shall be solely responsible for and shall
bear all costs associated with having a messenger service transport Data, Output
or any other information relating to Client or the Services to or from
Fidelity's facility or other delivery location. The messenger delivering all of
such material shall be deemed to be the agent of Client.
8.3 EDT. Client may elect to capture its own Data and to transmit
such Data to Fidelity for processing through electronic data transmission
("EDT"), and/or to receive reports by EDT. Client shall be responsible for
acquiring at its own expense all equipment needed for such transmission unless
otherwise provided as part of this Agreement. If equipment is not provided, as
part of this Agreement, then Client equipment shall conform to Fidelity
specifications and applicable rules. After installation, and prior to the
commencement of transmission, Client shall notify Fidelity and Fidelity shall
inspect the equipment, and if such equipment conforms to all applicable Fidelity
specifications, Fidelity shall certify thereto.
Page 10 of 43
8.4 Transmission. Client may elect to transmit MICR Data and/or to
receive reports over (i) Client's own telephone line to one or more telephone
numbers at Fidelity's facility which may be shared with other data transmitters
("Dial-Up Line"); or (ii) a dedicated telephone line leased from the appropriate
telephone utility. If Client elects to utilize a dedicated line, Fidelity shall
arrange for the installation of such line and Client shall bear all costs
associated therewith, including but not limited to line rentals, installation
charges and any required deposits. If Client elects to utilize a Dial-Up Line,
Client shall bear all cost in connection therewith, including but not limited to
any long-distance charges. Dial-Up and dedicated phone lines must conform to
Fidelity's specifications and applicable rules.
8.5 Limitation. FIDELITY SHALL NOT BE LIABLE OR RESPONSIBLE FOR
ANY LOSS OR DELAY OF DATA, OUTPUT OR ANY OTHER INFORMATION WHICH PERTAINS TO
CLIENT OR THE SERVICES DURING ANY PERIOD OF TRANSIT OR ELECTRONIC TRANSMISSION
TO OR FROM FIDELITY's FACILITY OR OTHER AGREED DELIVERY LOCATION IF THROUGH NO
FAULT OF FIDELITY'S PERSONNEL.
9. PRINTING. If Client receives report output electronically to be printed
at Client's location, then Client will furnish, at its own expense, all
printers, manpower, forms and paper for printing, unless stated otherwise as
part of this Agreement.
10. CLIENT REVIEW. It shall be Client's responsibility to review, verify
and make a final audit of all Output. Client will balance reports to verify
master file information and will inspect and review all reports and other Output
(whether printed or electronically transmitted) created from data provided by
Client to Fidelity. Client will reject all incorrect reports or Output (a)
within two (2) business days after receipt of daily reports or Output, (b)
within five (5) business days after receipt of annual, quarterly or monthly
reports or Output and (c) within three (3) business days after receipt of all
other reports or Output. Fidelity will correct any errors in Client's files that
result in errors in reports or other Output where such errors are solely because
of either malfunctions of Fidelity's equipment or its systems or errors of
Fidelity's operators, programmers or other personnel and are called to
Fidelity's attention within the time frames specified for balancing and
rejecting reports. Fidelity will, to the extent reasonably practicable, correct
any other errors for an additional charge as listed in Attachment 1. The
foregoing are Client's exclusive remedies for errors in reports or other Output
provided by Fidelity under this Agreement.
11. TERM, TERMINATION AND RENEWAL.
11.1 Term. The term of this Agreement shall commence on the
Effective Date hereof and shall expire seven (7) years after the Commencement
Date for Services ("Term") ("Expiration Date"), unless terminated pursuant to
Paragraphs 11.2, 11.6 or 11.7 below. The Commencement Date for Services for a
renewal Term shall be the day immediately following the last day of the
preceding Term.
11.2 Right to Terminate. In addition to any other right which
either party may have in law or equity (subject to Section 13), either Fidelity
or Client may elect to terminate this Agreement if: (a) the defaulting party
fails to cure any default hereunder within ninety (90) days after receipt of
written notice from the other party, specifying the nature and extent of any
such default (except in default caused by nonpayment by Client, which is
addressed in Section 5 above) and except for defaults under this Section 11.2
(b), (c), (d) and (e) below for which no notice and cure period is provided);
(b) the other party becomes insolvent, commits an act of bankruptcy, or makes a
general assignment for the benefit of its creditors; (c) any proceeding is
commenced by or against the other party under any bankruptcy or insolvency laws
or relating to the relief of debtors; (d) an application is filed for the
appointment of a receiver or conservator of the properties of the other party;
or (e) any procedure is initiated for the voluntary dissolution, liquidation or
suspension of the business of the other party.
11.3 Method of Termination. Exercise of the right to terminate
under Section 11.2 must be accomplished by written notice (in accordance with
Section 25.2) to the defaulting party, specifying the basis for such
termination, and fixing a date following the date of such notice for complete
termination of Services hereunder (the "Termination Date"). If either party is
terminating under clause (a) of Section 11.2 above in which the other party has
failed to cure default, such written notice will allow ninety (90) days
following date of such notice for complete termination of Services. If either
party is terminating under clause (b), (c), (d), or (e) of Section 11.2 above,
Page 11 of 43
no notice of default and cure period is required and such written notice will
allow thirty (30) days following the date of such notice for complete
termination of Services.
11.4 No Waiver of Default. The failure of either party to exercise
any right of termination hereunder shall not constitute a waiver of the rights
granted herein with respect to any subsequent default.
11.5 Extended Services. Any Services that are provided to Client
after the expiration or termination of this Agreement, for which a written
agreement has not been entered into by the parties, shall be provided on a
month-to-month basis, and are subject to the terms and conditions of this
Agreement, except that the fees for such Services shall be one hundred ten
percent (110%) of Fidelity's then-current fees.
11.6 Termination.
(a) Client shall have the right to terminate this
Agreement for convenience and without cause at any time during the Agreement
provided that Client is not in breach of any of its obligations, the parties are
not in any dispute pursuant to Section 26 of this Agreement and so long as
Client:
(i) Notifies Fidelity in writing of its intention to
terminate the Agreement at least one hundred eighty
(180) days' notice ("Early Termination Notice") prior to the proposed early
termination date ("Early Termination Date") pursuant to this Section 11.6; and
(ii) Pays to Fidelity, concurrently with such Early
Termination Notice, a termination fee ("Early
Termination Fee") in an amount equal to the lesser of: a) thirty percent (30%)
of the average monthly amount of the prior six (6) months of the fees set forth
in the in Attachment 1, multiplied by the number of months between the Early
Termination Date and the Expiration Date; or b) $300,000.00 ("Early Termination
Fee Cap").
(b) Upon the expiration of thirty two (32) months after
the Commencement Date for Services, the Early Termination Fee Cap set forth
above shall decrease by $9,350.00 and shall decrease by such amount every thirty
(30) days thereafter.
(c) If, upon the expiration of sixty (60) months after
the Commencement Date for Services, Client terminates this Agreement in
accordance with Section 11.6(a) and 11.6(a)(i) above, Fidelity shall waive the
Early Termination Fees described above.
(d) Notwithstanding the provisions of Sections (a)
through (c) above, in the event of early termination by Client in accordance
with this Section 11.6, Client shall pay to Fidelity the fees defined in Exhibit
B.
11.7 Date Fees are Payable. All known fees outlined in Section 11
are due and payable sixty (60) days prior to termination of this Agreement. The
described fees in Section 11 are exclusive of any fees associated with
deconversion fees outlined in Exhibit B of this Agreement. Notwithstanding
delivery of an Early Termination Notice by Client or payment of an Early
Termination Fee by Client, Client shall continue to make all payments due and
payable to Fidelity pursuant to this Agreement until the Early Termination Date.
12. RETENTION OF DATA. Unless directed by Client to the contrary, Fidelity
may destroy the Data and other materials of Client at any time after the final
use by Fidelity of such Data and materials for processing. Pursuant to Client's
written request, which must be received by Fidelity within thirty (30) days
after the termination or expiration of this Agreement, Fidelity will furnish to
Client, at Fidelity's then-current charges, copies of Client's data files and
layouts as may be maintained by Fidelity from time to time. In the absence of
such notice by Client, Fidelity may dispose of or destroy such material at
Fidelity's discretion. However, notwithstanding any other provision in this
Agreement, Fidelity may retain any materials of Client, including but not
limited to Data, Reports and data files, until all fees, interest and other
charges payable hereunder have been paid in full.
13. FORCE MAJEURE AND LIMITATION OF LIABILITY.
13.1 Force Majeure. Fidelity shall not be liable for any loss,
expense, error or delay, including but not limited to delays in processing of
Data or delivery of Output or Items to Client, or any inability to provide
Page 12 of 43
Services hereunder, from any cause beyond its reasonable control and without its
fault or negligence, including, but not limited to, acts of God, acts of civil
or military authority, government regulations, government agencies, delay or
failure to receive any required government approvals, embargoes, epidemics, war,
terrorist acts, riots, insurrections, fires, explosions, earthquakes, nuclear
accidents, floods, power blackouts affecting facilities unusually severe weather
conditions, inability to secure products or services of other persons or
transportation facilities, or acts or omissions of transportation carriers or
omissions of third parties (including but not limited to acts or omissions of
any third party service provider or equipment vendor, messenger service or
telephone carrier). Upon the occurrence of a condition described in this Section
13.1, Fidelity shall give written notice to Client describing the affected area
of performance, and the parties shall promptly confer, in good faith, to agree
upon equitable, reasonable action to minimize the impact, on both parties, of
such condition, including, without limitation, implementing the disaster
recovery services. Fidelity shall use commercially reasonable efforts to
minimize the delay caused by the force majeure events and recommence the
performance of Services affected by the force majeure event. In the event the
delay caused by the force majeure event lasts for a period of more than thirty
(30) days, the parties shall negotiate an equitable modification to this
Agreement with respect to the Services affected by the force majeure event. If
the parties are unable to agree upon an equitable modification within fifteen
(15) days after the expiration of such thirty (30)-day period, then Client shall
be entitled to serve thirty (30) days' written notice of termination to
Fidelity. If the force majeure event continues to affect performance of Services
on the expiration of such thirty (30)-day notice period, the portion of this
Agreement relating to the affected Service shall automatically terminate. The
remaining portion of the Agreement that does not involve the affected Service
shall continue in full force and effect. In such event Fidelity shall be
entitled to be paid for that portion of the affected Service which Fidelity has
completed or in the process of completing through the termination date.
13.2 Limitation of Liability. As a condition precedent to any
liability of Fidelity, Client must notify Fidelity in writing of any alleged
negligence or breach of this Agreement as promptly as reasonably possible, but
in no event later than five (5) business days following the day on which such
alleged negligence or breach was, or could reasonably have been, discovered by
Client. FIDELITY's LIABILITY, IF ANY, FOR ANY CLAIM, CAUSE OF ACTION OR
LIABILITY WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE ARISING UNDER OR IN
ANY WAY RELATED TO THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LIABILITY FOR
PROCESSING ERRORS OR NEGLIGENCE, SHALL BE LIMITED TO CLIENT's DIRECT DAMAGES,
ACTUALLY INCURRED, WHICH UNDER NO CIRCUMSTANCES SHALL EXCEED ITS CHARGES DURING
THE SIX-MONTH PERIOD PRECEDING THE DATE OF THE ALLEGED NEGLIGENCE OR BREACH FOR
THE PARTICULAR SERVICE TO WHICH CLIENT's CLAIM PERTAINS. IN NO EVENT SHALL
FIDELITY BE LIABLE FOR INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL
DAMAGES OF ANY KIND WHATSOEVER, FOR LOSS OF REVENUE OR PROFITS OR FOR CLAIMS OR
DEMANDS MADE BY THIRD PARTIES, EVEN IF FIDELITY WAS ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES. FIDELITY SHALL HAVE NO LIABILITY, EXPRESS OR IMPLIED, WHETHER
ARISING UNDER CONTRACT, TORT OR OTHERWISE WHICH RESULTS DIRECTLY OR INDIRECTLY
FROM THE INTERNAL OPERATIONS AND PERFORMANCE OF ANY CLIENT-PROVIDED SOFTWARE OR
ANY ENHANCEMENT, DEVELOPMENT OR MAINTENANCE THEREOF. This Paragraph also limits
the liability of any agent, employee or affiliate of Fidelity.
13.3 Time of Performance and Increased Costs. Fidelity's time of
performance with respect to Services performed under this Agreement shall be
adjusted, if and to the extent reasonably necessary, in the event that (a)
Client fails to timely submit data or materials in the prescribed form or in
accordance with the requirements of this Agreement, (b) Client fails to perform
on a timely basis, the functions or other responsibilities of Client described
in this Agreement, (c) there occurs a force majeure event which prevents timely
performance, (d) Client or any governmental agency authorized to regulate or
supervise Client makes any special request which affects Fidelity's normal
performance schedule, (e) Client fails to provide any Client resources called
for by this Agreement, (f) any Client-provided third party software, Client
software or Client resource does not perform in accordance with its
specifications and, in each case, the same is necessary for Fidelity's
performance hereunder. In addition, if any of the above events occur, and such
event will result in an increased cost to Fidelity for providing the affected
Service, Fidelity shall so advise Client and Client may either pay any and all
of such increased costs to Fidelity or relieve Fidelity of its responsibilities
hereunder.
Page 13 of 43
14. WARRANTIES.
14.1 Licenses and Permits. Fidelity and Client shall each secure
and maintain in force all licenses and permits required of it and its employees
in the performance of its respective obligations under this Agreement, and shall
conduct its business in full compliance with all laws, ordinances and
regulations applicable to its business or applicable to the other party's
business to the extent that the other party has notified Fidelity or Client, as
the case may be, of the specific laws, ordinances or regulations with which the
other party must comply.
14.2 Compliance with Laws. Fidelity and Client shall each shall
comply, at its own expense, with the provisions of all applicable laws and
regulations which may be applicable to each party in the performance of their
respective obligations under this Agreement.
14.3 No Interference with Contractual Relationship. Each party
warrants that, as of the date hereof, it is not subject to any contractual
obligation that would prevent it from entering into this Agreement. Client and
Fidelity each further warrant to the other that entering into this Agreement
shall not cause or induce it to breach any of its other contractual obligations.
14.4 Covenant of Good Faith. Each of the parties agree that, in its
respective dealings with each other party arising out of or related to this
Agreement, it shall act fairly and in good faith.
14.5 Authorization and Effect.
(a) The execution and delivery by Fidelity of its
obligations under this Agreement have been duly authorized by all necessary
corporate action on the part of Fidelity. This Agreement has been duly executed
and delivered by Fidelity and, assuming the due execution and delivery of this
Agreement by Client, constitutes a valid and binding obligation of Fidelity,
except as the same may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditor's rights generally, and subject to the qualification that general
equitable principles may limit the enforcement of certain remedies, including
the remedy of specific performance.
(b) The execution and delivery by Client of this
Agreement and the fulfillment of its obligations under this Agreement have been
duly authorized by all necessary corporate action on the part of Client. This
Agreement has been duly executed and delivered by Client and, assuming the due
execution and delivery of this Agreement by Fidelity, constitutes a valid and
binding obligation of Client, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
the enforcement of creditor's rights generally, and subject to the qualification
that general equitable principles may limit the enforcement of certain remedies,
including the remedy of specific performance.
14.6 Client Software. Client represents and warrants to Fidelity
that any Client software shall perform in all material respects with its
documentation and specifications.
14.7 Professional and Workmanlike. Each party represents and
warrants to the other that they shall perform their respective personnel
obligations under this Agreement, including Exhibits, in a professional and
workmanlike manner.
14.8 Disclaimer of Warranties. EXCEPT AS SPECIFICALLY PROVIDED IN
THIS AGREEMENT, FIDELITY MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND CLIENT
AGREES THAT ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES THAT ARE NOT PROVIDED
IN THIS AGREEMENT ARE HEREBY EXCLUDED AND DISCLAIMED.
THE PARTIES ACKNOWLEDGE THAT FIDELITY HAS SET ITS PRICES AND ENTERED INTO THIS
AGREEMENT IN RELIANCE UPON THE LIMITATIONS OF LIABILITY AND THE DISCLAIMERS OF
WARRANTIES AND DAMAGES SET FORTH HEREIN, AND THAT THE SAME FORM AN ESSENTIAL
BASIS OF THE BARGAIN BETWEEN THE PARTIES. THE PARTIES AGREE THAT THE LIMITATIONS
AND EXCLUSIONS OF LIABILITY AND DISCLAIMERS SPECIFIED IN THIS AGREEMENT WILL
SURVIVE AND APPLY EVEN IF FOUND TO HAVE FAILED OF THEIR ESSENTIAL PURPOSE.
Page 14 of 43
15. INDEMNIFICATION.
15.1 Personal Injury and Property Damage. Subject to Section 13.2,
each party shall indemnify, defend and hold harmless the other and its officers,
directors, employees, affiliates (including, where applicable, Fidelity's
affiliates and Client affiliates), and agents from any and all liabilities,
losses, costs, damages and expenses (including reasonable attorneys' fees)
arising from or in connection with the damage, loss (including theft) or
destruction of any real property or tangible personal property of the
indemnified party resulting from the actions or inactions of any employee, agent
or subcontractor of the indemnifying party insofar as such damage arises out of
or in the course of fulfilling its obligations under this Agreement and to the
extent such damage is due to any negligence, breach of statutory duty, omission
or breach of the indemnifying party, its employees, agents or subcontractors.
The foregoing represents the sole and exclusive remedy of each party with regard
to any matter described in this Section 15.1.
15.2 Infringement of Fidelity Software. Subject to Section 13.2,
Fidelity shall defend at its own expense, any claim or action brought by any
third party against Client or against its officers, directors, employees, Client
affiliates, and agents for actual or alleged infringement of any patent,
copyright or other intellectual property right (including, but not limited to,
misappropriation of trade secrets) based upon any software furnished hereunder
by Fidelity to provide Services to Client hereunder. Furthermore, Fidelity shall
indemnify and hold Client and the Client affiliates harmless from and against
any and all liabilities, losses, costs, damages, and expenses (including
reasonable attorneys' fees) associated with any such claim or action incurred by
Client and the Client affiliates. Fidelity shall have the sole right to conduct
and control the defense of any such claim or action and all negotiations for its
settlement or compromise, unless otherwise mutually agreed to in writing between
the parties hereto. Fidelity shall give Client, and Client shall give Fidelity,
as appropriate, prompt written notice of any written threat, warning or notice
of any such claim or action against Fidelity or Client, as appropriate, or any
other user or any supplier of components of such software, which could have an
adverse impact on Client's use of same, provided Fidelity or Client, as
appropriate, knows of such claim or action. If, in any such suit so defended,
all or any part of such software (or any component thereof) is held to
constitute an infringement or violation of any other party's intellectual
property rights and is enjoined, or if in respect of any claim of infringement,
and if Fidelity deems it advisable to do so, Fidelity shall at its sole option
take one or more of the following actions at no additional cost to Client: (a)
procure the right to continue the use of the same without material interruption
for Client; (b) replace the same with non-infringing software or component
thereof; (c) modify such software or component thereof so as to be
non-infringing; or (d) take back the infringing software or component thereof
and credit Client with an amount equal to its appropriate fee. The foregoing
represents the sole and exclusive remedy of Client with regard to any of the
above infringements or alleged infringements.
15.3 Infringement of Client-Provided Software. Client shall defend
at its own expense, any claim or action brought by any third party against
Fidelity or against its officers, directors, employees, Fidelity affiliates, and
agents for actual or alleged infringement of any patent, copyright or other
intellectual property right (including, but not limited to, misappropriation of
trade secrets) based upon the Client-provided software furnished hereunder by
Client, if any. Furthermore, Client shall indemnify and hold Fidelity and
Fidelity's affiliates harmless from and against any and all liabilities, losses,
costs, damages, and expenses (including reasonable attorneys' fees) associated
with any such claim or action incurred by Fidelity and Fidelity's affiliates.
Client shall have the sole right to conduct the defense of any such claim or
action and all negotiations for its settlement or compromise, unless otherwise
mutually agreed to in writing between the parties hereto. Client shall give
Fidelity, and Fidelity shall give Client, as appropriate, prompt written notice
of any written threat, warning or notice of any such claim or action against
Fidelity or Client, as appropriate, or any other user or any supplier of
components of Client-provided software covered hereunder, which could have an
adverse impact on Fidelity's use of same, provided Fidelity or Client, as
appropriate, knows of such claim or action. If in any such suit so defended, all
or any part of the Client-provided software (or any component thereof) is held
to constitute an infringement or violation of any other party's intellectual
property rights and is enjoined, or if in respect of any claim of infringement,
Client deems it advisable to do so, Client shall at is sole option take one or
more of the following actions at no additional cost to Fidelity: (a) procure the
right to continue the use of the same without material interruption for
Fidelity; (b) replace the same with non-infringing software; (c) modify said
Client-provided software (to the extent permitted by such third party) so as to
be non-infringing; or (d) relieve Fidelity of its obligation to use such
Client-provided software to perform the applicable Services hereunder. The
foregoing represents the sole and exclusive remedy of Fidelity with regard to
any of the above infringements or alleged infringements.
Page 15 of 43
16. CONTINGENCY PLAN.
16.1 Business Continuity Planning. Each party will develop,
maintain and, as necessary in the event of business interruption, execute a
business resumption plan, and will provide to the other party, its auditors and
regulators reasonable access to the plan and to plan test results, as such other
party may reasonably request from time to time, including such information that
may be reasonably required to determine the compatibility of the plans.
(a) Fidelity shall provide disaster recovery services for
its batch and on-line processing obligations to Client at a dedicated facility
which is equipped to handle the Fidelity data center processing in the event
disaster recovery is needed. Client shall provide an alternate control point for
data communications access to a backup network in the case of a disaster.
Throughout the Term of this Agreement, Fidelity will maintain in effect
contracts and/or arrangements for disaster recovery that are substantially
equivalent to those which are in effect as of the Effective Date. At Client's
request, Fidelity will make Fidelity's disaster recovery plans available for
Client's review.
(b) Client acknowledges that disaster recovery
arrangements are designed to deal with circumstances that are expected to cause
a substantial portion of the capabilities at the Fidelity's data center to be
unavailable for a period exceeding forty-eight (48) consecutive hours.
(c) Fidelity will test its disaster recovery capabilities
at least once per calendar year. Client shall participate in the disaster
recovery test when deemed appropriate by Fidelity. Fidelity will provide a
report of the test and its results to Client by January 31st of each year for
the test conducted during the immediately preceding calendar year.
(d) Fidelity will assist Client in establishing procedure
and practices, which will enable Client to satisfy its responsibilities under
this Agreement.
(e) Upon request, Fidelity will review and comment upon
those portions of the Client's overall business resumption plan related to the
Services provided under this Agreement and will provide a written report setting
forth any discrepancies between Client's overall business resumption plan and
the Fidelity disaster recovery plan.
(f) Each party will be responsible for training its own
personnel as required in connection with all applicable contingency planning
activities.
(g) Each party's contingency planning activities will
comply with such regulatory policies as may be applicable to Client's business.
If compliance with any of these policies would significantly increase Fidelity's
cost of providing products and services, Fidelity may increase the fees and
charges under this Agreement by an amount that reflects a pro rata allocation of
Fidelity's increased costs among the Fidelity customers affected by the change.
16.2 File Backup. Fidelity will provide and maintain adequate
backup files of Client's data received by Fidelity and all programs utilized to
process Client's data in order to execute to the business continuity plans as
described in this Section 16.
16.3 Retention. Client shall maintain copies of all of Client's
input data submitted to Fidelity for processing hereunder (whether submitted to
Fidelity directly or through third parties) to permit reconstruction of such
input data if required. Fidelity shall use Fidelity's standard practices to
maintain copies of all input data for processing hereunder to permit
reconstruction of such data if required. Client assumes all risks of loss and
expenses of reconstruction of such input data, except for loss caused by
Fidelity's failure to perform to Fidelity's standard practices. In the event
that reconstruction of data is required, the parties shall mutually agree on the
schedule for such reproduction based on the needs of the parties at that time.
Reconstruction will be performed in accordance with Fidelity's data retention
policy then in effect.
Page 16 of 43
17. CONFIDENTIAL INFORMATION.
17.1 Ownership. All Data, Items, and Output and any Client-provided
third party software, and any modifications to the foregoing, are and shall
remain the sole property of Client. All specifications, manuals, tapes,
programs, user documentation, Fidelity software and other materials and any
modifications to the foregoing ("Materials") developed by Fidelity and furnished
to Client by Fidelity in connection with this Agreement are and shall remain the
sole property of Fidelity, unless agreed to otherwise in writing by the parties.
The parties acknowledge that this Agreement in no way limits or restricts
Fidelity or any Fidelity affiliates from developing or marketing on their own or
for any third party in the United States or any other country, software or
services, as from time to time constituted (including, but not limited to, any
modification, enhancement, interface, upgrade, or change, and all software,
source code, blueprints, diagrams, flow charts, specifications, functional
descriptions or training materials relating thereto) without payment of any
compensation, or delivery of any notice, to Client.
17.2 Confidentiality Obligation. All information of a non-public
nature disclosed by Client or Fidelity to the other during the Term of this
Agreement ("Confidential Information") (1) shall be deemed the property of the
disclosing party, (2) shall be used solely for the purposes of administering and
otherwise implementing the terms of this Agreement, and (3) shall be protected
by the receiving party in accordance with the terms of this Section 17. Fidelity
acknowledges that the Data and Output are the "Confidential Information" of
Client, and Client acknowledges that the Materials are the "Confidential
Information" of Fidelity. "Confidential Information" shall also include all
"non-public personal information" as defined in Title V of the
Gramm-Leach-Bliley Act (15 U.S.C. Section 6801, et seq.) and the implementing
regulations thereunder (collectively, the "GLB Act"), as the same may be amended
from time to time, that Fidelity receives from or at the direction of Client and
that concerns any of Client's "customers" and/or "consumers" (as defined in the
GLB Act).
17.3 Nondisclosure Covenant. Except as set forth in this Article
17, the parties agree that they shall not disclose any Confidential Information
of the other party in whole or in part, including derivations, to any third
party, without the prior written consent of the other party, except that
Fidelity may disclose Client's Confidential Information to Fidelity's
subcontractors and agents in order to carry out its responsibilities under this
Agreement, provided that Fidelity first executes a confidentiality agreement
with each such subcontractor and/or agent. Confidential Information shall be
held in confidence by the receiving party and its employees, contractors,
subcontractors, and agents and shall be disclosed to only those of the receiving
party's employees, contractors, subcontractors or agents who have a need for it
in connection with the administration and implementation of this Agreement. The
receiving party shall cause such contractors and agents to execute
confidentiality agreements that contain terms that are consistent with this
Section 17. Under no circumstances shall Client disclose any Fidelity software
to, or use any Fidelity software on behalf of, a competitor of Fidelity.
17.4 Exceptions. Confidential Information shall not be deemed
proprietary and the receiving party shall have no obligation with respect to any
such information which:
(a) is or becomes publicly known through no wrongful act,
fault or negligence of the receiving party;
(b) was known by the receiving party prior to disclosure
and the receiving party was not under a duty of non-disclosure;
(c) was disclosed to the receiving party by a third party
who was free of obligations of confidentiality to the party providing the
information;
(d) is approved for release by written authorization of
the disclosing party;
(e) is publicly disclosed pursuant to a requirement or
request of a governmental agency or disclosure is required by operation of law;
or
(f) is furnished to a third party by the disclosing party
owning the Confidential Information without a similar restriction on the third
party's rights.
Notwithstanding anything to the contrary contained herein,
either party may disclose Confidential Information of the other pursuant to (1)
a requirement or official request of a governmental agency, a court or
administrative subpoena or order, or any applicable legislative or regulatory
requirement; (2) in defense of any claim or cause of action asserted against
such party or any of its affiliates, officers, directors, employees or agents;
(3) as otherwise permitted by the GLB Act; (4) as required by law or national
stock exchange rule; or (5) as otherwise permitted under the Agreement.
Page 17 of 43
17.5 Confidentiality of this Agreement; Protective Arrangements.
(a) The parties acknowledge that this Agreement contains
confidential information that may be considered proprietary by one or both of
the parties, and agree to limit distribution of this Agreement to those
individuals with a need to know the contents of this Agreement. In no event may
this Agreement be reproduced or copies shown to any third parties (exclusive of
contractors, subcontractors and agents who have a need for it) without the prior
written consent of the other party, except as may be necessary by reason of
legal, accounting, tax or regulatory requirements, in which event Client and
Fidelity shall exercise reasonable diligence in limiting such disclosure to the
minimum necessary under the particular circumstances. Furthermore, the parties
will seek commercial confidential status for this Agreement with any regulatory
commission with which this Agreement must be filed, to the extent such a
designation can be secured.
(b) In addition, each party shall give notice to the
other parties of any demands to disclose or provide Confidential Information
received from the other or any third party under lawful process prior to
disclosing or furnishing Confidential Information, and shall cooperate in
seeking reasonable protective arrangements requested by the other party.
17.6 Security Measures. Fidelity has implemented certain security
measures designed to safeguard Client's customer information and to satisfy
Fidelity's confidentiality obligations set forth above. Upon Client's written
request, Fidelity will adhere to security measures in addition to those measures
previously implemented by Fidelity. If adherence to such Client-requested
security measures will increase Fidelity's costs of operation, Client will
reimburse Fidelity for the implementation and/or adherence to such additional
security measures requested by Client. Fidelity will disclose to Client any
breach in security of its systems following discovery or notification of the
breach of "unencrypted customer personal data" that was, or is reasonably
believed to have been, acquired by an unauthorized person. Fidelity shall
disclose the aforementioned information to Client by the most expedient means
possible and without unreasonable delay, unless and to the extent instructed by
law enforcement, or similar government agency to do otherwise.
17.7 Remedies. The parties hereto agree that the remedy at law for
the breach of any provision of this Section 17 by the other party may be
inadequate and that the non-breaching party shall be entitled to seek injunctive
relief without bond, in addition to any rights or remedies that the
non-breaching party may have for such breach. The rights and obligations of the
parties hereto under this Article 17 shall survive any termination of this
Agreement.
18. AUDIT RECORDS. Client shall be responsible for maintaining all
necessary audit records required by law or any regulatory authority having
jurisdiction over Client.
19. REGULATORY COMPLIANCE. During the Term of this Agreement, the Services
will comply with the applicable federal banking data processing output
requirements specified by the federal authorities applicable to Client. Client
will make Fidelity aware of any applicable local and/or state regulatory
requirements that are different from those imposed by federal banking regulatory
authorities. Any changes required by such state or local requirements which
Fidelity agrees to make shall be paid for by Client, and to the extent possible,
Fidelity shall endeavor to obtain consents to share the costs of such charges
required by such state and local requirements among the Fidelity clients
affected.
20. INSURANCE. A schedule of Fidelity's current insurance coverage has been
furnished in Exhibit A. Fidelity shall maintain property insurance coverage at
least as comprehensive as set forth in the attached Exhibit A for the Term of
the Agreement.
21. AUDITOR'S REVIEW. A certified public accounting firm shall perform an
annual review of Fidelity's computer facility. Client agrees that such firm
shall have sole authority and responsibility for such review. Fidelity will
provide Client with a copy of the report.
22. SECURITY. Client shall implement all necessary security procedures,
including but not limited to any security procedures required by Fidelity, with
regards to the Services. Client acknowledges that Client is fully responsible
for security at its facilities, and that Fidelity has NO control over the
security of the terminals located at Client's facilities or those individuals
accessing information through those terminals. Client assumes full
Page 18 of 43
responsibility for any unauthorized persons utilizing such terminals or for the
unauthorized use of any information obtained from them. Client hereby expressly
waives any claim against Fidelity arising out of a breach of those terminals.
23. GOVERNMENTAL EXAMINATIONS. If required by a regulatory authority,
agency or commission, Client authorizes Fidelity to furnish Data and/or Output
thereto at Client's expense. Client hereby authorizes Fidelity to comply with
all applicable provisions of any statute, law, regulation or ordinance of any
governmental authority having jurisdiction, including but not limited to any
laws pertaining to governmental regulation and examination of services.
24. SUBCONTRACTING. Client agrees that Fidelity may, in its sole
discretion, subcontract all or any part of its obligations hereunder to one or
more subcontractors, but in no event shall Client be required, without prior
written consent, to look to any such subcontractor directly for performance of
any such obligation or to make any payment directly to any subcontractor.
25. GENERAL.
25.1 Independent Contractor. It is agreed that Fidelity is an
independent contractor and that:
(a) Client Supervisory Powers. Client has no power to
supervise, give directions or otherwise regulate Fidelity's operations or its
employees.
(b) Employees. Each party shall be solely responsible for
payment of compensation to its respective personnel and for any injury to them
in the course of their employment. Each party shall assume full responsibility
for payment of all federal, state, local and foreign taxes or contributions
imposed or required under unemployment insurance, social security and income tax
laws with respect to such persons.
(c) Relationship. The parties declare and agree that each
party is engaged in a business which is independent from that of the other party
and each party shall perform its obligations as an independent contractor.
Neither party is an agent of the other party and has no authority to represent
the other party as to any matters, except as authorized herein.
25.2 Notices. All notices required by this Agreement shall be in
writing; shall be mailed or personally delivered to the other party at the
address set forth below, or such other address as subsequently shall be given by
either party to the other in writing; and shall be deemed effective upon
personal delivery to the other party or three (3) days after mailing if mailed
with sufficient postage and properly addressed.
If to Fidelity: Fidelity Information Services, Inc.
601 South Lake Destiny Drive
Maitland, Florida 32751
Attn.: President, Integrated Financial Solutions
With a copy to: Fidelity Information Services, Inc.
601 Riverside Avenue, 12th Floor
Jacksonville, Florida 32204
Attn.: General Counsel
If to Client: American River Bank
1545 River Park Drive Suite #107
Sacramento, CA 95815
Attn.: Chief Information Officer
25.3 Headings and Construction. The headings used in this Agreement
are for convenience only and shall not be used in constructing the provisions
hereof.
Page 19 of 43
25.4 Survival of Paragraphs. Termination or expiration of this
Agreement will not affect the rights or obligations of the parties that arose
prior to, or that are expressly intended by their terms to continue beyond, any
such termination or expiration, and such rights or obligations, and the dispute
resolution procedures set forth in this Agreement will survive any such
termination or expiration.
25.5 Entire Agreement and Amendments. This Agreement contains the
entire agreement of the parties hereto. No other agreement, statement or promise
made by any party hereto or by any employee, officer, or agent of any party
hereto that is not in writing and signed by the parties is binding. This
Agreement may not be amended in any fashion except by written instrument,
executed by the parties hereto, specifically providing for the amendment of this
Agreement. Notwithstanding the foregoing, Fidelity shall not discontinue any
Services hereunder without providing at least 180 days' prior written notice to
Client. Such notice will contain a reasonable alternative to the Services being
discontinued. If this discontinuation of Services causes the Client any one-time
financial impact, Fidelity agrees to reimburse Client for those one-time
expenses on an actual costs basis. It will be assumed that the referenced notice
will be considered delivered per Section 25.2.
25.6 Severability. In the event that any one or more of the
provisions contained herein shall for any reason be held to be unenforceable in
any respect under law, such unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
unenforceable provision or provisions had never been contained herein, provided
that the removal of such offending term or provision does not materially alter
the burdens or benefits of either of the parties under this Agreement or any
Exhibit.
25.7 Third Party Beneficiaries. The provisions of this Agreement
are for the benefit of the parties and not for any other person. Should any
third party institute proceedings, this Agreement shall not provide any such
person with any remedy, claim, liability, reimbursement, cause of action, or
other right. Client agrees that the Services are for the benefit of Client only.
Client agrees not to resell or re-market the Services to any third party.
25.8 Executed in Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same document.
25.9 Remedies Cumulative. Unless otherwise provided for under this
Agreement, all rights of termination or cancellation, or other remedies set
forth in this Agreement, are cumulative and are not intended to be exclusive of
other remedies to which the injured party may be entitled by law or equity in
case of any breach or threatened breach by the other party of any provision of
this Agreement. Use of one or more remedies shall not bar the use of any other
remedy for the purpose of enforcing any provision of this Agreement.
25.10 Publicity. The parties shall consult with each other in
preparing any news release, public announcement, news media response or other
form of release of information concerning this Agreement or the transactions
contemplated hereby that is intended to provide such information to the news
media or the public (a "Press Release"). Neither party shall issue or cause the
publication of any such Press Release without the prior written consent of the
other party; except that nothing herein will prohibit either party from issuing
or causing publication of any such Press Release to the extent that such action
is required by applicable law or the rules of any national stock exchange
applicable to such party or its affiliates, in which case the party wishing to
make such disclosure will, if practicable under the circumstances, notify the
other party of the proposed time of issuance of such Press Release and consult
with and allow the other party reasonable time to comment on such Press Release
in advance of its issuance.
25.11 Assignment. This Agreement shall inure to the benefit of and
be binding upon the parties hereto, their successors and assigns. Client shall
not make any assignment hereof without the prior written consent of Fidelity.
Nothing in this Agreement is to be construed to limit or restrict the right of
Fidelity to effect any assignment of this Agreement by merger, reorganization,
sale of corporate assets or other corporate change as long as the Services
outlined in this Agreement, continue.
25.12 Governing Law. The laws of the State of California govern this
Agreement. Any action brought as a result, directly or indirectly, of this
Agreement in accordance with Section 26.3 (e) shall be brought in a court of
competent jurisdiction.
Page 20 of 43
26. DISPUTE RESOLUTION.
26.1 Dispute Resolution Procedures. In the event a dispute arises
between Fidelity and Client with respect to the terms and conditions of this
Agreement, or any subject matter governed by this Agreement, such dispute shall
be settled as set forth in this Section. If either party exercises its right to
initiate the dispute resolution procedures under this Section, then during such
procedure any time periods providing for termination of the Agreement or curing
any material breach under Section 11 shall be automatically suspended, except
with respect to any termination or breach arising out of Client's failure to
make timely and complete payments to Fidelity under this Agreement. At such time
as the dispute is resolved, interest at a rate equal to the prime rate per annum
as published in the Wall Street Journal, or the highest rate permitted by law
(as calculated on the basis of the actual days in the applicable calendar year)
for the period of dispute shall be paid to the party entitled to receive the
disputed monies to compensate for the lapsed time between the date such disputed
amount originally was to have been paid (or was paid) through the date monies
are paid (or credited) in settlement of the dispute.
26.2 Claims Procedures. If any party shall have any dispute with
respect to the terms and conditions of this Agreement, or any subject matter
referred to in or governed by this Agreement, that party shall notify the
President, Integrated Financial Solutions, of Fidelity and the President of
Client for resolution. Upon receipt by the other party of such written notice,
the President, Integrated Financial Solutions, of Fidelity and the President of
Client shall negotiate in good faith and each use its reasonable best efforts to
resolve such dispute or claim. The location, format, frequency, duration and
conclusion of these elevated discussions shall be left to the discretion of the
representatives involved. Upon agreement, the representatives may utilize other
alternative dispute resolution procedures to assist in the negotiations.
Discussions and correspondence among the representatives for purposes of these
negotiations shall be treated as confidential information developed for purposes
of settlement, exempt from discovery and production, which shall not be
admissible in any subsequent proceedings between the parties. Documents
identified in or provided with such communications, which are not prepared for
purposes of the negotiations, are not so exempted and may, if otherwise
admissible, be admitted in evidence in such subsequent proceeding.
26.3 Arbitration Procedures. In the event that a claim, controversy
or dispute between the parties with respect to the terms and conditions of this
Agreement, or any subject matter governed by this Agreement, which is subject to
arbitration hereunder and which has not been resolved by use of the claims
procedures described in Section 26.2, either party may, within thirty (30) days
after the representatives have met to address such claims, controversy or
dispute, request mediation and binding arbitration of the issue in accordance
with the following procedures:
(a) Except as otherwise provided in this Agreement, the
parties shall mediate any dispute that arises between them concerning this
Agreement or its terms, interpretation or enforcement. Mediation shall be held
in Sacramento County before JAMS Arbitration and Mediation Services, with the
parties agreeing on the selection of a mediator. The cost of the mediation shall
be borne equally by the parties.
(b) Only after a party has participated in mediation and
is dissatisfied with the outcome may such party demand arbitration as
hereinafter set forth. A written notice of claim and demand for arbitration must
be given to the other party not more than twenty (20) days after concluding
mediation. Response to the demand for arbitration shall be due not later than
twenty (20) days after receipt. Arbitration will be conducted pursuant to the
California Code of Civil Procedure, Sections 1280 et seq., before JAMS or such
other arbitration service on which the parties shall agree. The parties hereby
irrevocably agree that any arbitration demanded will be located in Los Angeles,
California. The arbitration service shall provide a list of at least five (5)
potential arbitrators who are not disqualified by business, financial, family or
other relationship with any party. The parties shall alternately strike names
from the list until only one arbitrator remains who shall serve as the single
neutral arbitrator.
(c) The arbitrator may construe or interpret but shall
not ignore the terms of this Agreement and shall be bound by California
substantive law. The arbitrator does not have any authority to alter, amend, or
modify any of the terms of this Agreement, and may not grant any remedy that is
either barred by the terms of this Agreement or not available in a court of law.
Page 21 of 43
(d) All costs of the arbitration, including but not
limited to the arbitrator's fee, any administration fees, and the cost for use
of the facilities during the arbitration proceedings, will be borne equally by
the parties to the arbitration, unless otherwise assessed against the
non-prevailing party by the arbitrator. The prevailing party (or the most
prevailing party) shall be entitled to an award of reasonable attorney's fees
and related costs. The parties agree that, except as set forth above, the
decision of the arbitrator(s) shall be final and binding as to each of them, and
that the arbitration award may be enforced in any court having jurisdiction
thereof (except as provided above), by the filing of a petition to enforce said
award. The parties waive their right to trial by jury and agree that the
procedure set forth in this paragraph shall be their sole dispute resolution
procedure.
(e) Notwithstanding the provisions of this Section 26.3,
the parties to this Agreement agree that the only circumstance in which disputes
between them will not be subject to the provisions of this Section exists when:
i) a party defaults under the provisions of Section 17.5 of this Agreement; or
ii) a party makes a good faith determination that a breach of the terms of this
Agreement by the other party is such that the damages to such party resulting
therefrom will be so immediate, so large or severe and so incapable of adequate
redress after the fact that a temporary restraining order and/or other immediate
injunctive relief is the only adequate remedy for such breach. If a party making
such a determination files a pleading with a court seeking such immediate
injunctive relief and this pleading is challenged by the other party to this
Agreement and the challenging party succeeds in such challenge, the party filing
such pleading seeking immediate injunctive relief shall pay all of the costs and
attorneys' fees of the party successfully challenging such pleading.
26.4 Claim Expiration. No claims to be resolved under this Section
26 may be made more than one (1) year after the date by which the fault or
failure was or should reasonably have been discovered; failure to make such a
claim within the one (1) year period shall forever bar the claim.
27 FINANCIAL STATEMENTS. As of the Effective Date, Fidelity is a
wholly owned subsidiary of a publicly traded company, Fidelity National
Financial ("FNF"). As a publicly traded company, FNF discloses its financial
information pursuant to United States securities laws and regulations. That
financial information includes the financial statement segment reporting of
Fidelity. A copy of FNF's financial information is available at www.FNF.com or
through the Securities and Exchange Commission's EDGAR website. If at any time
in the future Fidelity's financial segment information is no longer publicly
available, Fidelity agrees to provide Client with such information.
THIS AGREEMENT IS EFFECTIVE AS OF THE EFFECTIVE DATE AND HAS BEEN EXECUTED BY
THE DULY AUTHORIZED OFFICERS OF THE PARTIES HERETO.
Fidelity Information Services, Inc. American River Bank
Signature: /s/ GARY NORCROSS Signature: /s/ MITCHELL A. DERENZO
----------------------------------------- ------------------------------------------
Date: April 22, 2005 Date: April 22, 2005
----------------------------------------- ------------------------------------------
Print Name: Gary Norcross Print Name: Mitchell A. Derenzo
----------------------------------------- ------------------------------------------
Title: President, Integrated Financial Solutions Title: Executive VP & Chief Financial Officer
----------------------------------------- ------------------------------------------
Page 22 of 43
INSURANCE COVERAGE
EXHIBIT A
- ------------------------------------------------------------------------------------------------------------------------
Coverage Limit Insurance Co. Expires
- ------------------------------------------------------------------------------------------------------------------------
Commercial General $1mm each occurrence Hartford Fire Insurance Company 4/1/06
Liability $2mm Annual Aggregate
- ------------------------------------------------------------------------------------------------------------------------
$400mm Direct Damage & Business 4/1/06
Interruption
$25mm Valuable Papers Allianz (45%), Axis (20%), ACE (17.5%)
$10mm Service Interruption &
Property Insurance Fine Arts Arch (17.5%)
$1mm Transit
Various Other Sublimits, Incl
Flood and Earthquake and $100mm
Mechanical Breakdown
- ------------------------------------------------------------------------------------------------------------------------
EDP Equipment Included above Included above 4/1/06
- ------------------------------------------------------------------------------------------------------------------------
Automobile $1mm/Occurrence (CSL) Hartford Fire Insurance Company 4/1/06
$1mm UIM/UM
- ------------------------------------------------------------------------------------------------------------------------
Umbrella $25mm xs Underlying ACE American Insurance Company 4/1/06
- ------------------------------------------------------------------------------------------------------------------------
Coverage A - statutory Hartford Casualty Insurance Company 4/1/06
Workers' Coverage B -
Compensation $1mm each accident
$1mm each employee-disease (except Monopolistic states)
$1mm policy limit - disease
- ------------------------------------------------------------------------------------------------------------------------
Fidelity (Primary) $15mm/loss AIG (National Union) 11/18/05
$30mm/aggregate
- ------------------------------------------------------------------------------------------------------------------------
Primary Corp. E&O $15mm AIG (National Union) 11/18/05
- ------------------------------------------------------------------------------------------------------------------------
Page 23 of 43
DECONVERSION FEES
EXHIBIT B
1. Preliminary Requirements.
Nondisclosure agreement to be signed by all parties
Deconversion questionnaire to be signed by Client
Both documents are to be completed and returned to Fidelity at least
sixty (60) days prior to the date of deconversion.
2. Charges.
Extract Tape $ 200.00 per tape
Trial Balances (Hard Copy) $ 100.00 per application
Histories (Hard Copy) $ 0.06 per History Card
Request of Changes (if less than five days) $ 500.00 per change
Programming/Consulting $ 150.00 per hour
Deconversion Coordination Fee $ 7,500.00 flat fee
Deinstallation of Telecommunications Equipment $ 150.00 per hour + expenses
There may be additional charges based upon the parameters selected on
Client's deconversion questionnaire and cost of terminating Fidelity's
services at Client's location(s).
The fees and charges quoted above are for the physical deconversion and
the coordination of such deconversion from the Fidelity system.
Page 24 of 43
ITEM PROCESSING SERVICES
EXHIBIT C
Fidelity shall provide the Item Processing Services described in this Exhibit.
All of the Services described in this Exhibit will be performed pursuant to
Client's reasonable specifications, subject to the capabilities of Fidelity's
hardware and software utilized to deliver the Services. All times indicated in
this Exhibit refer to the time zone in which the Service Center is located.
1. DEFINITIONS. The following definitions apply to the Services described
in this Exhibit and are provided as a supplement to definitions included in the
Agreement:
1.1 "Account" means a demand deposit, negotiable order of
withdrawal, other checking type of account, money market deposit account, or
other savings type account offered by Client to its end-customer(s).
1.2 "Branch Image Capture" or "BIC" is the capture of Item Images
at any location other than the Service Center.
1.3 "BIC Product" is the BIC Services described in this Exhibit.
1.4 "Business Day" is each weekday, Monday through Friday, which
is not a holiday of the Federal Reserve Bank for the Federal Reserve District in
which Client's principal office is located.
1.5 "Consumer" is the Client's account holder that will be using
the Positive Pay Product.
1.6 "Conversion Services" will mean a mutually agreeable schedule
that Fidelity will provide services and instructions reasonably required for
Client to convert to and use the Services.
1.7 "Crippled Statement" will mean an end-customer statement whose
number of Items to be enclosed is greater than or less than the enclosure count
for that statement or as the result of missing Images.
1.8 "Client's Data Processing Services Provider" is the customer
itself or vendor appointed by Client to perform Client's core data processing
services.
1.9 "Exception Item" will mean an Item, the automated processing
of which is interrupted because of a condition defined by Client, such
definitions which may be changed from time to time.
1.10 "Exception Item File" will mean the file of Exception Items
that Client's Data Processing Services Provider or Client's end customer creates
and transmits to Fidelity.
1.11 "Fidelity Business Hours" are each Business Day from 07:00 to
18:00.
1.12 "Fidelity Image Archive" will mean the electronic storage of
the bitonal front and back item images at a Fidelity designated facility.
1.13 "Fraud Filter Service" is the Fidelity fraud filter
application described in this Exhibit.
1.14 "Internet Banking Access to Check Images" is the Fidelity home
banking archive interface described in this Exhibit.
1.15 "Inclearing Item" will mean a Client Item that Fidelity
receives from the Federal Reserve Bank or other financial institution with an
incoming cash letter for the purpose of performing Services.
1.16 "Item Image" is a digitized black and white image of the front
and back of each Item.
Page 25 of 43
1.17 "Item" is a document or other segment of media on which is
recorded information evidencing a withdrawal from or draft against (i) a demand
deposit, negotiable order of withdrawal, or other checking account offered by
Client to its customers, or (ii) an internal Client general ledger account,
deposit ticket, loan coupon or cash ticket.
1.18 "Item Posting File" will mean a file that Fidelity creates
from captured Items for transmission to Client's Data Processing Services
Provider.
1.19 "Item Processing Services" are the Services Fidelity will
provide to Client, and Client will purchase from Fidelity, for their total
requirements for Item Processing Services.
1.20 "MICR" is the magnetic ink character recognition information
that is encoded on Items for processing.
1.21 "MICR Rejects" will mean Items captured during prime pass that
are rejected due to the inability to properly interpret the MICR encoding. The
inability to interpret the MICR encoding may be caused by a variety of reasons,
including but not limited to: (a) poor MICR encoding; (b) missing MICR encoding;
(c) physical document damage. Fidelity will electronically repair and may
physically repair the MICR Rejects.
1.22 "Microfilm Replacement" is the capture of Item Images at any
Client location as a means to replace microfilm.
1.23 "Microfilm Replacement Product" is the application described
in this Exhibit.
1.24 "On-Us Item" will mean an Item that is drawn on the Client or
Client's end-customer.
1.25 "Original Item Retrieval" will mean occasionally removing
Items from the check vault upon Client's request.
1.26 "Over-the-Counter" will mean Items submitted by Client branch
offices, departments, or Client's end-customers for the purpose of performing
Item Processing Services.
1.27 "Pay-no-Pay Item Decision Process" is the Client act of
marking an Item to be returned or paid using the Fraud Filter, Positive Pay and
Signature Verification Products.
1.28 "Positive Pay Product" is the Fidelity positive pay
application described in this Exhibit.
1.29 "Posting Reversals" will mean the monetary reversal of posted
Items.
1.30 "Pre-encoded Item" will mean an Item received by Fidelity that
has required MICR line fields encoded, which Fidelity will capture.
1.31 "Prime Pass Item Volume" is defined as the total number of
Inclearing and Over-the-Counter or Proof and Transit Items.
1.32 "Return Item" will mean an Item that Client instructs Fidelity
to return. Client will provide Fidelity with a reason for the return of Return
Items.
1.33 "Serial Fine Sort" will mean the sorting of check Items into
account, amount, and or check number order.
1.34 "Service" or "Services" are all of the services to be provided
by Fidelity under this Exhibit, which include Item Processing Services and
Conversion Services.
1.35 "Service Center" is the space at one or more locations where
Fidelity performs Item Processing Services.
Page 26 of 43
1.36 "Signature Verification" is the act of verifying a written
signature on an Item as that of an authorized signatory.
1.37 "Signature Verification Services" is the Fidelity signature
verification application described in this Exhibit.
1.38 "Special Programming" will mean the provision of programming
resources to support Client's request for new or modified products or services.
1.39 "Statement Cycle Date" will mean the ending cycle date printed
on end-customer's Account statement.
1.40 "Statement/Notice Rendering" will mean the insertion of an
end-customer statement/notice and required Items and inserts into an envelope,
sealing the envelope in preparation for mailing to the end-customer. Fidelity
may apply postage, which will be recovered by the Client.
1.41 "System" or "Systems" are (i) computer programs, including
without limitation software, firmware, application programs, operating systems,
files, and utilities; (ii) supporting documentation for such computer programs,
including without limitation input and output formats, program listings,
narrative descriptions, operating instructions and procedures, user and training
documentation, special forms, and source code; and (iii) the tangible media upon
which such programs are recorded, including without limitation chips, tapes,
disks, diskettes, and any other storage media.
1.42 "Transit Item" is an encoded or Unencoded Item drawn on
another financial institution that Fidelity will capture for the purpose of
creating an outgoing cash letter.
1.43 "Unencoded Item" will mean a document received by Fidelity
where the dollar amount or any other required data field is not encoded.
2. ITEM PROCESSING SERVICES. Fidelity will provide the following Services
to Client:
2.1 Back Office Services.
(a) Proof of Deposit (POD) - Balancing/ Power Encoding.
Fidelity will receive unencoded and pre-encoded Items processed at Client's and
Client's end-customer locations in accordance with mutually agreed upon delivery
time. All Unencoded Items delivered to Fidelity by the required delivery
deadline will be processed to meet Client's outgoing correspondent cash letter
deadline; provided, however, that Fidelity will have at least three (3) hours to
process the work. Fidelity will use best reasonable efforts to handle Client's
work received after the required deadline. Fidelity will encode the dollar
amount on transit Items.
(b) Item Capture - POD. Fidelity will digitize and
capture the black and white images of the front and back of each Pre-encoded
Item and each Over-the-Counter Item and assign a batch and sequence number to
each Item. Fidelity will electronically pass all captured Unencoded Items
through amount recognition software for the purpose of interpreting the courtesy
amount and/or legal amount. The dollar amount information record from the MICR
line will be completed either automatically or manually for an unsuccessful
read.
Fidelity will process Items through a transport that
automatically encodes MICR data onto selected Items without an operator keying
each Item. Fidelity will complete the transmission of an Item Posting File
containing all Over-the-Counter Items to Client's Data Processing Services
Provider by the timeframe documented in Section 11, Processing Times.
(c) Item Capture - Inclearings. Fidelity will receive
Client's Inclearing cash letter from the Federal Reserve Bank or other financial
institution and balance the Items to the cash letter amount. Fidelity will
Page 27 of 43
digitize and capture black and white images of the front and back of each Item
and assign a sequential trace number, which becomes a part of the Inclearing
transaction. Items rejected from the capture will be corrected and re-entered.
The daily incoming cash letter will be reconciled to the
dollar amount charged by the Federal Reserve Bank or other financial
institution. All cash letter differences, missing items, extra items, etc., will
be reconciled and the proper balancing reports and/or entries will be prepared.
All errors detected during the incoming cash letter process are to be adjusted
the same Business Day by the timeframe detailed on Section 11, Processing Times.
Fidelity will provide Client with copies of all adjusting entries that are
prepared and the supporting documentation substantiating the adjustment.
Fidelity will complete the transmission of an Item Posting
File containing all Inclearing Items to Client's Data Processing Services
Provider no later than timeframe detailed on Section 11, Processing Times.
(d) Image Item Capture Manual Repair. Upon Client's
request, Fidelity will manually repair the MICR line of transit Items which were
unreadable by high speed processing equipment for the purposes of including such
Items in a high speed cash letter.
(e) Image Storage. All captured Images will be stored in
the Fidelity Image Archive. Fidelity agrees to provide Client with on-line
access to Item Images for a period not to exceed three (3) months after the Item
Images have been created. Images will be captured and stored in the Fidelity
archive and will be available seven (7) days per week, except for time periods
designated by Fidelity for performance of system maintenance, repair, and
component upgrade or replacement.
Fidelity will grant the ability for Client to use the
applicable computer software to retrieve Item Images by utilizing Client's LAN
equipment and telecommunications circuitry to access the Item Image archive
located at the Fidelity Service Center. Fidelity will authorize access to Item
Images for (25) user workstations and allow the Client permission to define user
administration.
(f) Image Capture Reject/Reentry. For Items not
interpreted using amount recognition software, Fidelity will manually complete
the electronic dollar amount information record from the MICR line. The higher
the successful read rate from the recognition software, the lower the pricing
tier.
(g) Balancing Adjustment. Any deposit adjustment of $1.00
or less (said dollar amount may reasonably be adjusted over time, based on
Client requirements) will be charged to a Client specified sundry general ledger
account, using a system generated entry. All errors detected during the
Over-the-Counter process are to be adjusted the same day. Original copies of
adjustments will be processed with the proof transactions; and the offsetting
side of the adjustment entry will be sent to the Client for processing.
Any deposit adjustment of more than $1.00 (said dollar amount
may reasonably be adjusted over time, based on then current industry standard
practices) will be charged to Client's end-customer or Client's designated
general ledger account using forms. All errors detected during the
Over-the-Counter process are to be adjusted the same day. Original copies of
adjustments will be processed with the proof transactions; and the offsetting
side of the adjustment entry will be sent to the Client for processing.
Fidelity will prepare proof corrections to Client's
end-customer on forms for reasons including but not limited to:
(i) Error(s) found in addition or subtraction
(ii) Check Item was listed for the wrong amount
(iii) Check Item listed was not enclosed
(iv) Check Item enclosed, not listed
(v) Cash not included in deposit total
(vi) Collections not included in deposit
(vii) Non-Negotiable Item in deposit
(viii) Items drawn on foreign institutions
Page 28 of 43
Fidelity will prepare proof corrections to Client's designated
general ledger account on forms for reasons including but not limited to:
(ix) Cash ticket missing
(x) Cash ticket for wrong amount
(xi) Wrong cash ticket used
(xii) Currency included in work
(xiii) Cashed check Item missing
(xiv) Cashed check Item enclosed was not listed
(xv) Cashed check Item for wrong amount
(xvi) Other miscellaneous correction
(xvii) Items drawn on foreign institutions
(h) Fine Sort. At Statement cycle time, the Items
scheduled for return to Client's end-customer will be fine sorted into statement
order, which is generally Account number within one or more levels of groups, in
preparation for statement rendition. Rejects from the fine sort process will be
filed manually.
On a daily basis, at Client's request, Fidelity may fine sort
internal Client documents. Daily fine-sorted Items will be available for pickup
by Client or Client's courier by the timeframe documented in Section 11,
Processing Times.
(i) Warehousing and Destruction. Fidelity will store by
cycle and date Items returned in Client's end-customer statement. For Items not
returned in Client's end-customer statements. Fidelity will store for one (1)
calendar month and then turn over items to a destruction agent.
(j) Exception Item Pull. According to the documented
timeframe in Section 11, Processing Times, the transmission of Client's complete
Account Exception Item File from Client's Data Processing Services Provider to
Fidelity will be completed. Fidelity will make Exception Items available for
Client review and available for pickup by Client or Client's courier by the
timeframe documented in Section 11, Processing Times; provided, however, that
Fidelity will have at least four (4) hours to process the Exception Items file
from Client's Data Processing Service Provider.
(k) Return Items - Outgoing. Items designated by the
Client as Return Items will be returned by Fidelity to the Federal Reserve Bank
the same Business Day; provided Client has met the applicable Fidelity Return
Item deadline. Items to be returned by Fidelity will be marked in accordance
with Federal Reserve regulations.
After Client has reviewed its Exception Item reports and made
the necessary pay/no-pay decisions, Client's Data Processing Services Provider
will complete transmission of a file in a format mutually agreed to by the
parties containing all Return Item requests with reason for return by the
timeframe in Section 11, Processing Times, for Items captured the previous
Business Day. Fidelity will out sort, balance to Client provided control total
and properly stamp each Item to be returned with the Client's designated reason,
and prepare the Return Item cash letter to be picked up by the Client or
Client's courier for delivery to the Federal Reserve Bank the timeframe detailed
on Section 11, Processing Times. Such Items to be returned will be contained in
a file transmitted by Client's Data Processing Service Provider. One cash letter
copy is to be retained by Fidelity and one copy will be forwarded to Client.
Fidelity will qualify each Return Item in accordance with
Regulation "J" specifications; provided that the applicable Return Item deadline
has been met by Client.
(l) Large Item Returns. Fidelity will, as designated by
the Client, begin to notify the financial institution of first deposit of all
dishonored checks for $2,500.00 or more, or other amount to remain in compliance
with Regulation CC and J and any other applicable Federal laws and regulations.
By the timeframe detailed in Section 11, Processing Times, Fidelity will have
completed transmission of large Item notifications for those Items requiring
them that were presented the previous Business Day. Fidelity will make a report
of all large Item notices processed on the previous Business Day available for
pickup by Client or Client's courier by the timeframe detailed in Section 11,
Processing Times of the Business Day following dispatch of the Return Item cash
Page 29 of 43
letter and transmission of the large Item notification. Fidelity requires a ten
(10) Business Day written notification to commence this service. Client must
notify EARNS and establish a contract for this service. Any fees from EARNS or
Fedline will be directly billed to the Client.
(m) Image CD Production. For end-customers who receive an
Image statement, if purchased Fidelity will retrieve check Images from the
Fidelity-controlled online archive; merging those check Images with the
corresponding periodic statement text; and write that data to a CD for delivery
to and use by the end-customer. The Client must purchase from Fidelity, software
that will enable their customers to retrieve their Item Images from a CD. The
software can be licensed for the Client's customers for a one-time fee of
$400.00 per copy.
(n) Image DVD Production. Fidelity will create two (2)
sets of DVD's, an original and a duplicate, for Client's record retention.
Client acknowledges that the DVD's delivered by Fidelity to Client for record
retention are Client's source of archived data for regulatory compliance and
future conversion purposes and should be retained by Client for these and all
other purposes. In the event Client requests Fidelity to provide DVD's of Item
Images previously provided to Client on DVD, Fidelity will provide such Item
Images to Client, if available to Fidelity, and Client agrees to pay Fidelity
for such services at Fidelity's then-current hourly rate.
(o) CD or DVD Viewing Software. Client will purchase from
Fidelity, one (1) version of the software that will enable a Client's
workstation to retrieve their Item Images from a CD or DVD.
(p) Statement Printing. Fidelity will receive a statement
print text file(s) and a statement reconciliation file(s) in a format mutually
agreed to from Client's Data Processing Service Provider according to the
timeline detailed in Section 11, Processing Times. If necessary, the file should
contain the following segregation categories: (a) Image statements, (b) with
Item enclosures less than fifty (50), (c) with Item enclosures fifty (50) or
greater; (d) zero Item enclosure; and (e) special request statements. Fidelity
will print statement text and Item Images for Image statements in simplex or
duplex mode, as is mutually agreed to by Client and Fidelity, in preparation for
statement rendering. The print quality will be consistent with that required by
automated ZIP code sorting equipment and acceptable to Client, Fidelity and the
United States Postal Service.
(q) Rendering. Fidelity will use an insertion machine to
read the intelligent insertion marks or bar code imprinted on the
statement/notice, fold the correct number of pages, insert the statement/notice
and inserts into a Client provided standard window envelope that is of a quality
consistent with that required by automated Statement/Notice Rendering equipment
and acceptable to Client and Fidelity and seal the envelope and place a generic
postage indicia before mailing. Fidelity will invoice Client for, and Client
will pay all of such postage expenses invoiced by Fidelity.
(r) Traditional Statement Printing and Rendering with
Enclosures. Fidelity will manually render traditional statements and will count
all Items and match this count against the number of enclosures indicated on the
statement. If the count matches, Fidelity will insert the statement, Items and
any inserts into a Client provided envelope that is acceptable to Client and
Fidelity and seal the envelope. Fidelity will invoice Client for, and Client
will pay all of such postage expenses invoiced by Fidelity.
Fidelity will review fine sort reject Items and where possible
resolve Item count discrepancies prior to categorizing a statement as a Crippled
Statement. If any Item count discrepancy cannot be resolved, Fidelity will
follow Client's written instructions for statement handling; such instructions
to be mutually agreed to in advance for statement handling. Fidelity will
process as exceptions any statements that are not to be mailed to the
end-customer via pre-sort first class mail. These exception statements will be
identified by unique intelligent insertion marks or bar code, which will be
mutually agreed upon by Fidelity and Client. From information printed on the
statement or provided separately by Client, Fidelity will forward the statement
to the appropriate location as designated.
Fidelity will process all statements that are deemed crippled
and forward to the appropriate location as designated. These could be made
available for pickup by Client or Client's courier according to the timeline
detailed in Section 11, Processing Times, following determination of the
Crippled Statement condition.
Page 30 of 43
(s) First Statement Insert. Fidelity will insert one (1)
statement/notice inserts into a Client provided standard window envelope. The
statement inserts will be of a size, format and quality that is consistent with
that required by automated Statement Rendering equipment and acceptable to
Fidelity. The proposed statement/notice inserts will be submitted to Fidelity at
least ten (10) Business Days in advance of the Statement Cycle Date.
(t) Additional Statement Inserts. Fidelity will insert up
to two (2) additional statement/notice inserts into a Client provided standard
window envelope. The statement inserts will be of a size, format and quality
that is consistent with that required by automated Statement Rendering equipment
and acceptable to Fidelity. The proposed statement/notice inserts will be
submitted to Fidelity at least ten (10) Business Days in advance of the
Statement Cycle Date.
(u) Faxes and Photocopies. At Client's request, Fidelity
will provide a facsimile or photocopy of an Item.
(v) Research. At Client's request, Fidelity will provide
Client with assistance to resolve out-of-balance conditions in particular,
inbound or outbound check processing operations.
(w) Additional Cash Letters. Outgoing cash letters will
be prepared in accordance with Client's cash letter requirements. Items for cash
letter endpoints greater than one (1) will be charged an additional $200.00 per
month, then all other endpoints greater than two (2) will be charged $125.00 per
month. One cash letter endpoint is included at no cost.
(x) External File Transmissions. Fidelity will transmit
and receive all files mentioned above in this schedule that pertain to Image
Item Processing and documented in Section 11, Processing Times. The fee for this
service is WAIVED if Fidelity is Client's Data Processing Service Provider.
2.2 Other Services.
(a) Item Posting File Transmission Contingency. In the
event that Fidelity is unable to successfully transmit any Item Posting File to
Client, Fidelity will burn a CD-ROM or DVD containing the data and make it
available for pickup by Client or Client's courier, or, arrange for courier
delivery to Client's Data Processing Services Provider.
(b) Image Processing System Reports. Fidelity will
provide standard reports - All Items Listing, Cash Letter Detail, Cash Letter
Summary, Change Log, and the Item Balancing Sheet - in a mutually acceptable
format each Business Day and make the file available for pickup by Client using
a TCP/IP transfer utility or physically available by the timeframe documented in
Section 11, Processing Times.
2.3 Miscellaneous.
(a) Programming Support. Fidelity will provide Special
Programming at Client's request for new or modified products or services at the
current programming hourly rate.
(b) On-site Consulting. Fidelity will provide item
processing consulting services at Client's request for new or modified products
or services at the current hourly rate.
(c) Courier Services. Client will be responsible for the
selection, expense and overall management of the couriers that are used for the
transportation of all Items, records, and other data between Client offices and
the Service Center, the Inclearing Items from the Federal Reserve Bank to the
Service Center, and for the transportation of Transit Items to the Federal
Reserve Bank or other upstream correspondent banks. The parties agree that such
courier service may be either an existing courier service shared by other
Fidelity customers or, if Client in its sole discretion determines that it is
not feasible or desirable to utilize such existing courier service, such other
courier service as is designated by Client.
(d) Change of Core Provider. Client will provide Fidelity
with at least 180 days advance written notice of its intent to change Client's
Data Processing Services Provider. If Client elects to change its Data
Page 31 of 43
Processing Services Provider, Client will pay to Fidelity the certification and
related charges necessary for Fidelity to determine how the image item capture
services provided under this Exhibit may continue to be provided following such
change.
3. INTERNET BANKING ACCESS TO CHECK IMAGES.
3.1 Statement of Services. This Internet Banking Access to Check
Images Product is designed and usage is intended to enable the access,
retrieval, and transfer of a single Item Image from the Fidelity Image Archive
to the Client's home banking application utilized by account holders of Client
for presentation of a single Item Image per each account holder's request. Use
of the Home Banking Archive Interface Product for all other purposes is
expressly prohibited without the written approval of Fidelity. This Exhibit
authorizes use of the Home Banking Archive Interface Product to interface with
the following home banking application (check one box only):
[ ] Fidelity eBanking - Home Banking
[ ] Fidelity eBanking - Business Banking
[ ] Digital Insight Home Banking
[ ] Digital Insight Business Banking
[ ] Fundtech
[X] Q-Up
[ ] OSI
[ ] PremiereCom and/or PremiereCorp
[ ] S1
[ ] FundsXpress
[ ] Online Resources
Fidelity or its designees will perform all modifications or
customizations to the Home Banking Archive Interface Product requested by Client
under an approved written professional services agreement between the parties.
3.2 Payment for Services. In consideration for the provision set
forth above, Client will pay Fidelity the amounts set forth in Attachment 1
attached hereto after the Implementation Date of the Home Banking Archive
Interface Product. Monthly fees are for management and operation of the Home
Banking Archive Interface Product as defined and exclude all other charges,
specifically necessary telecommunication connectivity requirements.
3.3 Client Responsibilities. Client will (i) provide all
telecommunications components necessary for connectivity between the Home
Banking Archive Interface Product and Client's home banking application; (ii)
provide Fidelity specifications necessary for the implementation and testing of
the Home Banking Archive Interface Product; (iii) grant Fidelity access to data
generated by the Home Banking Archive Interface Product for support purposes;
(iv) contract with Fidelity for Fidelity Image Archive services; and (v) perform
all commercially reasonable user authentication, data encryption, "firewall
protection", and security management related to connecting and using the Home
Banking Archive Interface Product and accessing the Fidelity Image Archive that
is accordance with: (a) generally accepted industry standards, (b) industry
regulatory requirements, and (c) Fidelity published network connectivity
standards.
3.4 Performance Standards. The Home Banking Archive Interface
Product will be available seven days per week except for time periods designated
by Fidelity to perform system maintenance, repair, and component upgrades or
replacement. Images captured by Fidelity will be available to the Home Banking
Archive Interface Product by 08:00 a.m. local time the following Business Day.
Images will remain available to the Home Banking Archive Interface Product for a
period not to exceed ninety (90) days.
Fidelity's failure to achieve this performance standard will
not be conclusive evidence of a material breach by Fidelity of its obligations
under this Exhibit. Client may, however, if the facts and circumstances of such
failure so warrant, declare a material breach of this Exhibit.
3.5 Home Banking Archive Interface Product Warranty. CLIENT'S SOLE
WARRANTY WITH RESPECT TO COMPUTER HARDWARE AND SOFTWARE SUPPLIED BY THIRD
PARTIES AND USED BY FIDELITY IN PROVIDING THE SERVICE UNDER THIS EXHIBIT, IS THE
Page 32 of 43
WARRANTY PROVIDED BY SUCH THIRD PARTY AS IT MAY BE AVAILABLE TO CLIENT. FIDELITY
HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY WHATSOEVER ABOUT THE PERFORMANCE
OR LEGAL OR REGULATORY COMPLIANCE, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF ANY COMPUTER HARDWARE AND SOFTWARE SUPPLIED
BY THIRD PARTIES. Client acknowledges that Fidelity has no duty or
responsibility to modify any such third-party product, except to the extent that
the vendor thereof has such a duty or responsibility to modify such product
pursuant to the applicable license agreement between Fidelity and such vendor.
4. FRAUD FILTER SERVICES.
Not applicable at this time.
5. SIGNATURE VERIFICATION.
5.1 Statement of Services. Fidelity will provide to Client access
to and use of the Signature Verification Product including: (i) the one-time
automated conversion of signatures; (ii) seat licenses for online access to the
Signature Verification Product; (iii) rights to acquire additional seat licenses
at current Fidelity price; (iv) process Client's data utilizing the Signature
Verification Product and report Signature Verification Product processing
results; (v) one day of training and one copy of user documentation to enable
Client to utilize the Signature Verification Product; and (vi) Signature
Verification Product support during Fidelity Business Hours.
5.2 Payment for Services. In consideration for the provision set
forth above, Client will pay Fidelity the amounts set forth in Attachment 1
attached hereto after the Implementation Date of the Signature Verification
Product.
5.3 Client Responsibilities. Client will (i) provide resources
necessary for the installation of certain Signature Verification Product
components at Client's premise including, but not limited to, recommended
hardware, software, and telecommunications; (ii) provide specifications
necessary for the implementation and testing of the Signature Verification
Product; (iii) grant Fidelity access to data generated by the Signature
Verification Product for support purposes; (iv) provide adequate resources to
maintain integrity of the database information, any significant re-installs or
conversions required by misuse or neglect by Client will be at the then current
hourly rates of Fidelity or its designees; (v) enter account information and
other data as required to operate the Signature Verification Product; (vi)
perform Pay-no-Pay Item Decision Process by a mutually agreed upon time; (vii)
install all Fidelity provided Signature Verification Product enhancements and
corrections in the manner instructed by Fidelity; and (viii) restrict usage of
the Signature Verification Product to its stated purpose.
Without Fidelity's prior written consent, Client will not (i)
sell, assign, rent, lease, transfer, or disclose to any third party the
Signature Verification Product; (ii) use the service for the commercial benefit
of any third party; or (iii) copy, reproduce, reverse engineer, decompile,
disassemble or separate component parts of the software that is made available
to Client pursuant to this Exhibit. Client may transfer its use of the software
that is made available to Client pursuant to this Exhibit to a backup or
replacement system on a temporary or permanent basis provided Client gives prior
written notice to Fidelity and discontinues use of such software on the original
equipment.
5.4 Performance Standards. Fidelity will run the update cycle for
the Signature Verification Product each regular processing day. Updated result
files will be ready for Client's review by 08:00 a.m. local time each Business
Day.
Fidelity's failure to achieve this performance standard will
not be conclusive evidence of a material breach by Fidelity of its obligations
under this Exhibit. Client may, however, if the facts and circumstances of such
failure so warrant, declare a material breach of this Exhibit.
5.5 Signature Verification Product Warranty. Client acknowledges
that Fidelity does not employ experts in detecting fraud and that use of the
Signature Verification Product will not eliminate the risk or exposure to fraud
Page 33 of 43
that is inherent in Client's business. Client agrees to accept full
responsibility for the payment of all instruments, whether or not the instrument
passed the scrutiny of the Signature Verification Product and Client will
indemnify, defend and hold harmless Fidelity against any claim made by any
person that is based on Fidelity's providing access to and use of the Signature
Verification Product.
WITH RESPECT TO COMPUTER HARDWARE AND SOFTWARE SUPPLIED BY
THIRD PARTIES AND USED BY FIDELITY IN PROVIDING THE SERVICE UNDER THIS EXHIBIT,
FIDELITY DOES NOT MAKE ANY REPRESENTATION OR WARRANTY WHATSOEVER ABOUT THEIR
PERFORMANCE OR LEGAL OR REGULATORY COMPLIANCE, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Client acknowledges that
Fidelity has no duty or responsibility to modify any such third-party product,
except to the extent that the vendor thereof has such a duty or responsibility
to modify such product pursuant to the applicable license agreement between
Fidelity and such vendor.
6. POSITIVE PAY.
6.1 Statement of Services. Fidelity will provide: (i) Consumer
access to and use of the Positive Pay Product via the Internet; (ii) process
Consumer's data utilizing the Positive Pay Product and report the Positive Pay
Product processing results back to the Client and Consumer; (iii) one day of
training and one copy of user documentation to enable Client to employ the
Positive Pay Product; and (iv) Positive Pay Product support during Fidelity
Business Hours.
6.2 Payment for Services. In consideration for the provision by
Fidelity of the Additional Services set forth above, Client will pay Fidelity
the amounts set forth in Attachment 1 attached hereto after the Implementation
Date of the Positive Pay Product.
6.3 Client Responsibilities. Client will (i) grant Fidelity access
to data generated by the Positive Pay Product for support purposes; (ii) provide
account information and other data as required to activate the Positive Pay
Product; (iii) ensure the Consumer transmits an issue file in the proper format
and performs the Pay-no-Pay Item Decision Process by a mutually agreed upon
time; (iv) authorize Fidelity to return and qualify no-pay items contained in
the Pay-no-Pay Decision Process; (v) agree that if no Pay-no-Pay Item Decisions
are transmitted, Fidelity will use `pay all' or `pay none' as a default
settings; and (vi) provide first line of support for Consumers using the
Positive Pay Product.
Without Fidelity's prior written consent, Client will not (i)
sell, assign, rent, lease, transfer, or disclose to any third party the Positive
Pay Product; (ii) use the service for the commercial benefit of any third party;
or (iii) copy, reproduce, reverse engineer, decompile, disassemble or separate
component parts of the software that is made available to Client pursuant to
this Exhibit.
6.4 Performance Standards. Fidelity will utilize each Consumer
issue file during the prime pass capture process and then transmit the results
to the Positive Pay Product for Consumer review and processing. Files will be
electronically distributed to Client's Consumers by 08:00 a.m. local time each
Business Day. Consumers must complete the Pay-no-Pay Item Decision Process by
12:00 local time each Business Day.
Fidelity's failure to achieve this performance standard will
not be conclusive evidence of a material breach by Fidelity of its obligations
under this Exhibit. Client may, however, if the facts and circumstances of such
failure so warrant, declare a material breach of this Exhibit.
6.5 Positive Pay Product Warranty. Client acknowledges that
Fidelity does not employ experts in detecting fraud and that use of the Positive
Pay Product will not eliminate the risk or exposure to fraud that is inherent in
Client's business. Client agrees to accept full responsibility for the payment
of all instruments, whether or not the instrument passed the scrutiny of the
Positive Pay Product and Client will indemnify, defend and hold harmless
Fidelity against any claim made by any person that is based on Fidelity's
providing access to and use of the Positive Pay Product.
Page 34 of 43
WITH RESPECT TO COMPUTER HARDWARE AND SOFTWARE SUPPLIED BY
THIRD PARTIES AND USED BY FIDELITY IN PROVIDING THE SERVICE UNDER THIS EXHIBIT,
FIDELITY DOES NOT MAKE ANY REPRESENTATION OR WARRANTY WHATSOEVER ABOUT THEIR
PERFORMANCE OR LEGAL OR REGULATORY COMPLIANCE, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Client acknowledges that
Fidelity has no duty or responsibility to modify any such third-party product,
except to the extent that the vendor thereof has such a duty or responsibility
to modify such product pursuant to the applicable license agreement between
Fidelity and such vendor.
7. BIC SERVICES.
Not applicable at this time.
8. MICROFILM REPLACEMENT.
Not applicable at this time.
9. CLIENT RESPONSIBILITIES. Client will do the following:
9.1 Deliver to Fidelity all Items, in a condition and form
consistent with the generally accepted requirements of a high-speed item
processing operation. Client assumes full responsibility for the accuracy,
completeness, and authenticity of all Items furnished to Fidelity, and Fidelity
will thus be entitled to rely thereon and will have no obligation or
responsibility to audit, check, or verify the Items. Without limiting the
generality of the foregoing, Client will have sole responsibility for (a)
verifying dates, signatures, amounts, authorizations, endorsements, payment
notices, collection times, fees and charges imposed by Client on its customers
and other similar matters on all Items delivered to Fidelity; (b) placing stop
payments and holds on Accounts; and (c) determining the correctness of all
magnetic ink inscribed or appearing on Items, regardless of by whom or when
inscribed. If any Items submitted to Fidelity are incorrect, or in a condition
inconsistent with the generally accepted requirements of a high speed item
processing operation, Fidelity may, in its sole discretion, either (i) require
Client to resubmit completed and corrected Items, or (ii) correct and complete
the Items itself and Client will pay Fidelity the charges for any additional
services provided by Fidelity to correct or complete such Items or otherwise
prepare such Items for processing.
9.2 Provide Inclearing, Unencoded and Pre-encoded Items to
Fidelity Business Day according to the schedule contained in Section 11,
Processing Times.
9.3 Provide to Fidelity by mutually agreeable means, current
information reasonably required by Fidelity concerning the Accounts offered by
Client to its end-customers and internal Client general ledger accounts.
9.4 Ensure that all Items and other documents or media which
Fidelity may be required to process under this Exhibit are in a format
acceptable to Fidelity and contain, in machine readable form, the data and
information required by Fidelity.
9.5 Ensure appropriate personnel of Client are properly trained to
utilize the Item Processing Services.
9.6 In a manner prescribed by Fidelity, Client will balance
non-business Account statement cycles for monthly periodic statements so that
approximately the same number of statements are to be prepared on each of the
statement cycles (not more than twenty (20) Business Days during the month). The
monthly statement print files will be transmitted, in a format acceptable to
Fidelity, including intelligent insertion marks or bar coding indicating the
number of Items to be enclosed with each statement.
9.7 Communicate any changes or modifications to the statement
cycle, permanent or temporary, to Fidelity at least five (5) Business Days in
advance of the Statement Cycle Date.
Page 35 of 43
9.8 Cooperate with Fidelity in the performance of Item Processing
Services and provide to Fidelity such data and information, management
decisions, regulatory interpretations and policy guidelines as Fidelity
reasonably requires.
9.9 Provide Fidelity with contact list and escalation procedures
to insure that production problems and other issues requiring Client attention
are addressed on a timely basis by the appropriate individual(s).
9.10 Be responsible for the transportation of all Items, records,
and other data between Client offices and the Service Center and the related
costs.
9.11 Appoint Fidelity as its agent for purposes of receiving Items
from and returning Items to clearing organizations. Client will notify all
appropriate third parties of such appointment and pay or reimburse Fidelity for
any charges payable to such clearing organizations for, or required as a
condition to, so receiving or returning Items.
9.12 Forward directly to Fidelity any On-Us Items or other Items
that are posted by or on behalf of Client without being entered into the
clearing process.
9.13 Networking and communication devices provided by Client must
be approved by Fidelity to insure compatibility with the Fidelity System.
9.14 Provide adequate space for the installation of telephone
drop(s) necessary to connect Client's terminals with the telephone lines that
communicate with the Fidelity Systems. Fidelity agrees to schedule with the
telephone company the technical aspects of said installation of the data
communications telephone lines. Charges made by the telephone company for the
initial installation and ongoing costs of the data communications telephone
lines along with any additional drops or changes to the drop locations in the
future will be the responsibility of the Client.
10. SERVICE CHARGES. The fees and charges applicable to the Services are
set forth in Attachment 1.
11. PROCESSING TIMES.
11.1 Client Delivery Requirements.
-----------------------------------------------------------------------------------------------------------
Over-the-Counter Items Business Day - Monday through Friday
50% by 16:00
100% by 18:00
-----------------------------------------------------------------------------------------------------------
Inclearing Items Business Day - Monday through Friday
RCPC by 09:30
City by 13:30
-----------------------------------------------------------------------------------------------------------
11.2 File Transmission Requirements
-----------------------------------------------------------------------------------------------------------
Over-the-Counter Transmission by Fidelity Business Day - Tuesday through Thursday
24:00
Business Day - Monday (or day following holiday) 01:00
Business Day - Friday 02:00
-----------------------------------------------------------------------------------------------------------
Inclearing Transmission by Fidelity Business Day - Monday through Friday
22:00
-----------------------------------------------------------------------------------------------------------
Statement Print Text File Transmission(s) First Business Day following Statement Cycle Date
Completed by Client 04:00
-----------------------------------------------------------------------------------------------------------
Statement Reconciliation File Transmission(s) First Business Day following Statement Cycle Date
Completed by Client - Image Statement Only 04:00
-----------------------------------------------------------------------------------------------------------
Exception Item File Transmission Completed by Next Calendar Day
Client 02:30
-----------------------------------------------------------------------------------------------------------
Page 36 of 43
-----------------------------------------------------------------------------------------------------------
Return Item File Transmission by Client Business Day - Monday through Friday
13:00
-----------------------------------------------------------------------------------------------------------
11.3 Image Archive Available by Fidelity.
-----------------------------------------------------------------------------------------------------------
Image Archive Available by Fidelity Next Calendar Day
07:30
-----------------------------------------------------------------------------------------------------------
11.4 Return Items and Large Item Returns by Fidelity.
-----------------------------------------------------------------------------------------------------------
Return Item Cash Letter Available for Pick-Up Business Day - Monday through Friday 23:59
-----------------------------------------------------------------------------------------------------------
Large Item Notifications Business Day - Monday through Friday 23:59
-----------------------------------------------------------------------------------------------------------
Large Item Notification Report Available for Next Business Day - Monday through Friday 07:30
Pick-Up
-----------------------------------------------------------------------------------------------------------
11.5 Exception Items or Crippled Statements Available for Pickup by Client.
-----------------------------------------------------------------------------------------------------------
Exception Items Available for Pickup by Next Business Day Monday through Friday
Client 07:30
-----------------------------------------------------------------------------------------------------------
11.6 Print Available for Pickup by Client.
-----------------------------------------------------------------------------------------------------------
Print Available for Pickup by Client Next Business Day - Monday through Friday
07:30
-----------------------------------------------------------------------------------------------------------
12. PERFORMANCE STANDARDS. The parties acknowledge that the following is a
list of acceptable time performance standards. In the event any performance is
suspected or deemed to be unacceptable, Fidelity shall research the cause, with
Client's reasonable assistance, and will take corrective action (where Fidelity
is responsible) or recommend corrective action (where Client is responsible) and
initiate action for correction as soon as reasonably practicable. Fidelity shall
not be held liable for a delay or failure in performance of all or a portion of
the performance standards that results from Client's failure to perform its
obligations pursuant to this Exhibit, that results from any cause beyond
Fidelity's control or that results without Fidelity's fault or negligence.
Beginning on the first day of the calendar month immediately following
the expiration of one hundred and twenty (120) days after the date Client begins
using the Item Processing Services in a production environment, Fidelity will
perform the Item Processing Services in such a manner so as to meet or exceed
the following performance standards. Compliance with the performance standards
will be determined on a monthly basis. Client will report incidents of
non-compliance to Fidelity and Fidelity will keep accurate records relating to
such compliance. A failure by Fidelity to meet a performance standard will be
deemed to be an "Occurrence." When reasonably possible, Client must report
incidents suspected to be Occurrences to Fidelity within seventy-two (72) hours,
or immediately upon becoming aware of the incident after the seventy-two
(72)-hour deadline.
12.1 Performance Standards.
(a) Inclearing Capture and Posting File Transmission.
- --------------------------------------------------------------------------------
Service Description As set forth in this Exhibit.
- --------------------------------------------------------------------------------
Prerequisites Inclearing Items are presented in the industry
standard format of:
- not greater than 250-300 items per batch and
- listing for each bundle and
- Item order matching listing and
- one cash letter summary listing per sending
endpoint.
- --------------------------------------------------------------------------------
Page 37 of 43
- --------------------------------------------------------------------------------
Inclearings Items are delivered to Fidelity
according to the schedule shown in Section 11,
Processing Times.
The MICR reject rate will not exceed 1%.
- --------------------------------------------------------------------------------
Performance Standard Fidelity will initiate the transmission of the
Inclearing Item Posting File to Client's Data
Processing Services Provider or Fidelity's core
system, as appropriate, according to Section 11,
Processing Times, not missing the deadline more
than twice (2) of each month's Business Day's
processing. Failure to initiate the Inclearings
Item Posting File transmission by the applicable
deadline is not considered to be a Performance
Standard Occurrence unless Client's Data Processing
Services Provider or Fidelity's core system is
unable to post the Inclearing Item Posting File in
a timely manner.
- --------------------------------------------------------------------------------
Measurement Fidelity daily transmission report.
Monthly Inclearing Item volume.
Late transmissions reported by Client to Fidelity
for review, validation and tracking.
- --------------------------------------------------------------------------------
(b) Over-the-Counter Item Processing and Posting File Transmission.
- --------------------------------------------------------------------------------
Service Description As set forth in this Exhibit.
- --------------------------------------------------------------------------------
Prerequisites Proofs of Deposit Items are presented in a clean
and orderly fashion.
Pre-encoded Items are presented in the industry
standard format of:
- not greater than 250-300 items per batch and
- listing for each bundle and
- Item order matching listing
All items oriented in the same direction
Single in separate bundles
Proof of Deposit and Pre-encoded Items are
delivered to Fidelity according to the schedule
shown in Section 11, Processing Times.
The Pre-encoded Items MICR reject rate will not
exceed 1%.
- --------------------------------------------------------------------------------
Performance Standard Fidelity will initiate the transmission of the
Over-the-Counter Item Posting File to Client's Data
Processing Services Provider or Fidelity's core
system, as appropriate, according to Section 11,
Processing Times, not missing the deadline more
than twice (2) of each month's Business Day's
processing. Failure to initiate the
Over-the-Counter Item Posting File transmission by
the applicable deadline is not considered to be a
Performance Standard Occurrence unless Client's
Data Processing Services Provider or Fidelity's
core system, as appropriate, is unable to post the
Over-the-Counter Item Posting File in a timely
manner.
- --------------------------------------------------------------------------------
Measurement Fidelity daily transmission report.
Late transmissions reported by Client to Fidelity
for review, validation and tracking.
- --------------------------------------------------------------------------------
(c) Statement Rendering.
- --------------------------------------------------------------------------------
Service Description As set forth in this Exhibit.
- --------------------------------------------------------------------------------
Prerequisites Delivery of printed statements, image match file
and statement fine sort file according to the
schedule contained in Section 11, Processing Times.
Marketing inserts are available ten (10) Business
Days prior to insertion; must be of a size, format
and quality acceptable to Fidelity.
- --------------------------------------------------------------------------------
Performance Standard 95% of non-Crippled DDA Statements that
can be machine-rendered will be rendered and bear a
postmark date not exceeding two (2) Business Days
after the Business Day upon which Fidelity receives
the statement file for non-month-end statements and
three (3) Business Days for month-end statements,
not missing the deadline more than twice (2) of
each month's Business Day's processing.
- --------------------------------------------------------------------------------
Page 38 of 43
- --------------------------------------------------------------------------------
Measurement Monthly statement volume.
Monthly report of statement activity maintained by
Fidelity.
- --------------------------------------------------------------------------------
(d) Outgoing Return Item Processing and Large Item Notification.
- --------------------------------------------------------------------------------
Service Description As set forth in this Exhibit.
- --------------------------------------------------------------------------------
Prerequisites Complete Return Item data file transmission from
Client's Data Processing Services Provider or
Fidelity's core system, as appropriate, has been
received by the time specified in Section 11,
Processing Times.
- --------------------------------------------------------------------------------
Performance Standard 1. On-time release of Return Item cash letter
within time frames required by applicable law not
missing the deadline more than once (1) of each
month's Business Day's processing.
2. On-time electronic notification of dishonored
Items of $2,500.00 or more within time frames
required by law not missing the deadline more than
once (1) of each month's Business Day's processing.
- --------------------------------------------------------------------------------
Measurement Fidelity daily transmission log.
Monthly Return Item volume.
Monthly large item notification volume.
Client maintained log of late Return Items volume.
Client maintained log of late large item
notifications volume. Late Return Items reported to
Fidelity for review, validation and tracking. Late
large Item notifications reported to Fidelity for
review, validation and tracking.
- --------------------------------------------------------------------------------
(e) Image Item Storage and Archive.
- --------------------------------------------------------------------------------
Service Description As set forth in this Exhibit.
- --------------------------------------------------------------------------------
Prerequisites The Inclearing Items MICR reject rate will not
exceed 1%.
The Pre-encoded Items MICR reject rate will not
exceed 1%.
Proof of Deposit Items are presented in a clean and
orderly fashion.
Pre-encoded Items are presented in the industry
standard format of:
- not greater than 250-300 items per batch and
- listing for each bundle and Item order matching
listing
All items oriented in the same direction
Inclearings, Proof of Deposit and Pre-encoded Items
are delivered to Fidelity according to the schedule
shown in Section 11, Processing Times.
- --------------------------------------------------------------------------------
Performance Standard Availability each Business Day by the time
specified in Section 11, Processing Times of
archived image Items not missing the deadline more
than twice (2) of each month's Business Day's
processing.
- --------------------------------------------------------------------------------
Measurement Fidelity daily on-line reports.
Client reported instances where archived image Item
access was late.
- --------------------------------------------------------------------------------
12.2 Certain Exceptions. Notwithstanding anything contrary in this
Exhibit, Fidelity will not be responsible for, and may exclude from the
calculation of compliance with the Performance Standards, any failure to meet a
Performance Standard if, during, and to the extent that such failure is related
to or caused by (i) any matter constituting force majeure, (ii) Client's failure
to perform its obligations under this Exhibit where such failure was the
proximate cause of the failure to meet the Performance Standard, (iii) special
production jobs, testing procedures or other services which are given priority
at the request of the Client, (iv) any significant increase in processing
volumes or business resulting from the acquisition, directly or indirectly, of
assets or stock of a financial institution by Client, whether by merger or
otherwise, (in each case during a reasonable transition period), (v) significant
Page 39 of 43
unforeseen increases in processing volumes or business or any significant change
in the nature or scope of Services provided under this Exhibit (in each case
during a reasonable transition period), (vi) any significant change in the
manner in which Client conducts its business (in each case during a reasonable
transition period). Multiple Occurrences on consecutive Business Days for the
same Performance Standard which are the result of the same System related cause
will be considered a single Occurrence. An incident which results in missing
multiple Performance Standards will be considered a single Performance Standard
Occurrence which will be categorized (for tracking purposes) based on how Client
reports the failure to Fidelity.
12.3 Performance Standard Credits. For each Occurrence related to a
particular service addressed in the above performance standards, Fidelity shall
credit Client with an amount equal to one percent (1%) of the fees associated
with the affected service. Any such credits shall be reflected on the next
regular invoice submitted to Client.
Page 40 of 43
SERVICE BUREAU PROCESSING AGREEMENT
SCHEDULE OF FEES FOR CONTRACTED SERVICES
AMERICAN RIVER BANK
REVISED: April 22, 2005
ATTACHMENT 1
- ------------------------------------------------------------------------------------------------------------------------------------
Item Processing
- ------------------------------------------------------------------------------------------------------------------------------------
Monthly Processing Fees
---------------------------------------------------
1 = Yes Monthly
Description or Unit Monthly
Volume Fee Fee
- ------------------------------------------------------------------------------------------------------------------------------------
Items
- ------------------------------------------------------------------------------------------------------------------------------------
Proof of Deposit (POD) - Balancing/ Power Encoding 281,925 $0.0100 $2,819.25
- ------------------------------------------------------------------------------------------------------------------------------------
Item Capture (POD/Inclearings)
- ------------------------------------------------------------------------------------------------------------------------------------
Item Count < 400,000 Items 400,000 $0.0269 $10,760.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Count < 600,000 Items 98,096 $0.0200 $1,961.92
- ------------------------------------------------------------------------------------------------------------------------------------
Item Count < 1,000,000 Items - $0.0169 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Count < 3,000,000 Items - $0.0113 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Count > 2,999,999 Items - $0.0097 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Image Item Capture Manual Repair - $0.2000 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Storage - Number of Items added to On-line Archive (standard 90 days) 498,096 $0.0010 $498.10
- ------------------------------------------------------------------------------------------------------------------------------------
Item Storage - Number of Items added to On-line Archive (6 month archive) - $0.0020 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Storage - Number of Items added to On-line Archive (24 month archive) - $0.0040 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Storage - Number of Items added to On-line Archive (60 month archive) - $0.0080 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Capture Reject/Re-entry (POD/Inclearings) - < 50% read rate - $0.0500 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Capture Reject/Re-entry (POD/Inclearings) - < 65% read rate - $0.0350 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Capture Reject/Re-entry (POD/Inclearings) - < 70% read rate - $0.0275 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Item Capture Reject/Re-entry (POD/Inclearings) - > 70% read rate 87,163 $0.0225 $1,961.16
- ------------------------------------------------------------------------------------------------------------------------------------
Balancing Adjustment 404 $1.0000 $404.00
- ------------------------------------------------------------------------------------------------------------------------------------
Image File - Export (per image) - $0.0020 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Image File - Import (per item) - $0.0050 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Fine Sort (account number order) - per pass 26,010 $0.0130 $338.13
- ------------------------------------------------------------------------------------------------------------------------------------
Warehousing and Destruction - All on us items passed (Standard 90 days) 243,633 $0.0020 $487.27
- ------------------------------------------------------------------------------------------------------------------------------------
Returns/Exceptions
- ------------------------------------------------------------------------------------------------------------------------------------
Exception Item Pull - All On us items passed 236,171 $0.0040 $944.68
- ------------------------------------------------------------------------------------------------------------------------------------
Return Items - Outgoing 739 $1.2500 $923.75
- ------------------------------------------------------------------------------------------------------------------------------------
Large Item Returns (EARNS) 52 $5.0000 $260.00
- ------------------------------------------------------------------------------------------------------------------------------------
Exception Item Notices with Image (per notice/per page) - $0.5000 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Exception Item Notices without Image (per notice/per page) - $0.2500 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Research Media Provided to the Bank or Bank's Clients
- ------------------------------------------------------------------------------------------------------------------------------------
Image - CD Production (per media) - $15.0000 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Image - DVD Production (per media) 6 $75.0000 $450.00
- ------------------------------------------------------------------------------------------------------------------------------------
CD/DVD Storage in Jukebox - $15.0000 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
CD/DVD Viewing Software 1 $24.0000 $24.00
- ------------------------------------------------------------------------------------------------------------------------------------
Internet Banking Access to Check Images 1 $250.0000 $250.00
- ------------------------------------------------------------------------------------------------------------------------------------
Printing/Rendering of Documents
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous print - Stock Paper per impression - $0.1000 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Statement Printing - per impression
- ------------------------------------------------------------------------------------------------------------------------------------
0 - 60,000 impressions 60,000 $0.0900 $5,400.00
- ------------------------------------------------------------------------------------------------------------------------------------
60,001 - 120,000 impressions 9,975 $0.0800 $798.00
- ------------------------------------------------------------------------------------------------------------------------------------
Greater than 120,000 impressions - $0.0700 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Rendering - per mail piece 15,550 $0.0500 $777.50
- ------------------------------------------------------------------------------------------------------------------------------------
Traditional Statement Printing and Rendering with Enclosure 400 $0.7000 $280.00
- ------------------------------------------------------------------------------------------------------------------------------------
First Statement Insert 9,895 $0.0200 $197.90
- ------------------------------------------------------------------------------------------------------------------------------------
Additional Statement Inserts (per insert) - $0.0100 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Fraud Services
- ------------------------------------------------------------------------------------------------------------------------------------
Signature Verification Services
- ------------------------------------------------------------------------------------------------------------------------------------
Per Prime Pass Item 498,096 $0.0045 $2,241.43
- ------------------------------------------------------------------------------------------------------------------------------------
Positive Pay Services
- ------------------------------------------------------------------------------------------------------------------------------------
Assets < 100 million - $900 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Assets < 300 million - $1,500 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Assets < 600 million 1 $2,000 $2,000.00
- ------------------------------------------------------------------------------------------------------------------------------------
Assets < 850 million - $2,600 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Assets < 1,000 million - $3,200 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Assets < 2,400 million - $4,000 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Assets > 2,401 million - priced per million - $1.50 $0.00
- ------------------------------------------------------------------------------------------------------------------------------------
Fidelity /s/ GN (Initials) ATTACHMENT 1-1 Client /s/ MD (Initials)
------ Company Confidential ------
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SERVICE BUREAU PROCESSING AGREEMENT
SCHEDULE OF FEES FOR CONTRACTED SERVICES
AMERICAN RIVER BANK
REVISED: April 22, 2005
ATTACHMENT 1
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Item Processing - continued
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Monthly Processing Fees
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1 = Yes Monthly
Description or Unit Monthly
Volume Fee Fee
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Other Services
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Faxes and Photocopies - $1.5000 $0.00
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Research (per hour) - $35.0000 $0.00
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Additional Cash Letters - $0.00
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External File Transmission (per transmission) 20 $25.0000 $500.00
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Interoffie Generated Postage Processing - $0.0300 $0.00
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Total Fidelity Item Processing Offerings $34,277.08
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Total One-Time Testing, License, Setup and Training Fees - (reflects a 100% discount on fees) Waived
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Assumptions Regarding Item Processing Services:
1. One Cash Letter Endpoint Included. First Additional is $200 per month, all
other endpoints greater than 2, are $125 per additional endpoint.
2. Chargebacks and signature verifications (unless signature verification
service is being utilized) are the responsibility of the Client.
3. Fidelity will prepare the Federal Reserve Bank Return Item Cash Letter.
Couriers, if applicable, will be the responsibility of the Client.
4. Workstations will be connected via the Client's TCP/IP wide area network to
the Fidelity check processing center.
5. Common Output File format for input is v1.3 and for output is v1.4.
6. Statement text printed on Client provided stock paper. Images printed on
three hole punched Fidelity provided paper. Statement inserts will be
provided by Client.
7. Statement envelopes provided by Client. Postage costs paid for by Client on
a pass through basis. Presort postal rates will apply.
8. Total disclosed one-time fees include $28,200 for Item Processing Services.
9. The standard conversion includes the following items:
- Inclearings Sort Pattern - POD Sort Patterns - up to 2
- CAR document definition (no onsite - CAR Setup
consulting)
- Power Encode sort patterns - Exception File Processing
- 25 seats of online image access - Image Statements - no
- Setup of 10 standard image codes customization
10. Disclosed Item Volumes as of November 2004. Minimum Monthly Item Processing
Fee of $23,000.
Assumptions Regarding Fraud Services:
1. A circuit of 128KB with a 64KB PVC is required for fraud filters or
signature verification. To run fraud filter and signature verification
combined, a total of 384KB circuit is required.
2. Fraud Filter and Signature Verification recommended PC configuration
includes a 500 mhz Pentium 4 with 500 MB of RAM, 17" monitor or larger, 2 GB
of free space and Windows NT Server Service Pack 6a or higher or Windows
2000 server.
3. For Positive Pay services, Fidelity will be responsible for returns.
Fidelity will default decisions to either pay-all or pay-none. Client's
customer must finalize return decisions by noon. Fidelity will communicate
all return decisions back to the Client before returns are made. Client is
responsible for entering return decisions from positive pay into their core
application. Client's customer must provide check issue file in approved
format.
Fidelity /s/ GN (Initials) ATTACHMENT 1-2 Client /s/ MD (Initials)
------ Company Confidential ------
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SERVICE BUREAU PROCESSING AGREEMENT
SCHEDULE OF FEES FOR CONTRACTED SERVICES
AMERICAN RIVER BANK
REVISED: April 22, 2005
ATTACHMENT 1
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RECAP OF ALL FEES
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One Time Monthly
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Total Enhancement Fee $0
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Total Dedicated Resource(s) - 0 FTE(s) $0
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Total Fidelity Fees $0 $34,277
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Special Monthly Discount ($3,110)
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Total Monthly Fees with Rebates $31,167
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Total All Fees $0 $34,277
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Assumptions Regarding Overall Fee Schedule:
1. All stated fees subject to the CPI adjustments pursuant to the Agreement.
2. All travel and travel related expenses are not included with any of products
outlined above. They will be invoiced on a pass-through basis.
3. Pricing subject to change if any assumptions are not valid as stated in this
Attachment.
4. Tax and Shipping Charges are not included as part of this pricing.
5. Telecommunications is an extremely important part of this Attachment.
Currently there has not been an estimate for these services. This proposal
will be updated with telecommunication costs when estimate is complete.
Fidelity /s/ GN (Initials) ATTACHMENT 1-3 Client /s/ MD (Initials)
------ Company Confidential ------
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