CUSTOMER ALLIANCE AGREEMENT
THIS AGREEMENT is entered into this 5th day of November, 1998, by NCR
Corporation, a Maryland (USA) corporation, whose principal place of business
is Dayton, Ohio (hereinafter, "NCR") and Northstar Computer Forms, Inc., a
Minnesota corporation, whose principal place of business is 7130 Northland
Circle North, Brooklyn Park, Minnesota 55428, (hereinafter, "NSCF").
Recitals
A. NCR would like to compliment its product line and marketing and sales
resources by utilizing NSCF's manufacturing resources to provide a
private label product line of financial forms and negotiable documents
described in Exhibit "A" attached hereto ("Products").
B. NCR appoints NSCF as its exclusive supplier of the Products for the
Territory defined below.
C. Both Parties plan to work together to cultivate NCR's current customer
base by developing new accounts and market requirements in the banking
and financial industries.
D. NSCF would like to expand sales coverage to the Top 200 U.S. banks.
E. NCR would like to offer the Products to all its banking customers.
NOW THEREFORE, in consideration of the mutual promises set forth herein, the
Parties hereby agree as follows:
1.0 Definitions
1.1 Territory shall mean both a geographic and vertical Territory
consisting of the entire United States, including its territories and
possessions. Although NCR will primarily focus its sales and marketing
activities on the 200 largest banks, saving institutions, and credit
unions, NCR may provide Products to other financial institutions within
the Territory. Any sales outside the Territory will be by mutual
agreement of both parties.
1.2 Products shall mean financial products and negotiable documents as
listed in Exhibit A, and as modifies from time to time in writing per
the mutual agreement of the parties.
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1.3 Purchase Order or Order shall mean any purchase order issued by NCR for
the purpose of ordering Products from NSCF pursuant to this Agreement.
1.4 NCR Technology shall mean certain NCR trademarks and tradenames and
technical expertise provided to NSCF (which NSCF does not already have
and which is not generally known or in the public domain) that is
associated with financial products, negotiable documents, NCR
Systemedia's business processes and NCR's financial equipment operating
specifications.
1.5 Private Label shall mean the Products, with an NCR trademark, tradename,
or logo printed thereon, that is offered exclusively to NCR's customers
by NSCF.
1.6 Product Specifications will be defined by Purchase Orders or referenced
to in published Product catalogs.
2.0 Sales Terms and Conditions
2.1 NCR hereby appoints NSCF as its exclusive supplier of the Products in
the Territory during the term of this Agreement. NSCF will provide NCR
pricing of Products on a wholesale basis.
2.2 NSCF agrees to sell Products to NCR in accordance with the terms and
conditions of this Agreement. Specific quantities of Products shall be
ordered by NCR for purchase by the placement of Purchase Orders or via
EDI. This agreement is not a Purchase Order. NCR shall have no
obligation to purchase any Products hereunder until NCR has placed a
Purchase Order, and then only to the extent of the products covered
under such Purchase Order. It is acknowledged that neither party can
project to what extent NCR may achieve market penetration in the
Territory or in what quantities NCR may place Orders for the Products.
In the event that NSCF can not meet NCR capacity requirements, NSCF will
be responsible to outsource production. NSCF shall assure outsourced
Products meet both NCR and NSCF specifications. In the event that NCR
sells a large block of new business which exceeds NSCF's internal
capacity and outsourcing resources, both parties will work together to
establish a time frame when the capacity will be available to accept the
business. This "ramp up" time should not exceed four months.
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2.3 NSCF will continue to sell the products it currently manufactures to
its existing customer base. NSCF will not sell, deliver or provide
Products marked with NCR "Private Label" directly or indirectly to any
third party, but will only provide these products to NCR. NCR will
assist in this effort with known requirements and publication of a NCR
catalog of product information and pricing. NSCF may sell similar
Products to others without the NCR "Private Label."
2.4 NSCF and NCR will work together to develop new accounts and market
segments. The Parties will meet quarterly to review NSCF and NCR
performance and establish action plans to expand the relationship and
develop opportunities.
2.5 If a customer has already entered into a contract either directly with
NSCF or one of its distributors to purchase products which could be used
as Product replacements, then during the term of the contract NSCF shall
not be obligated to accept Orders for Products for that customer from
NCR. Similarly, if NCR enters into a contract for purchase of Products
with one of its customers, which is not already subject to a contract to
purchase products which could be used as Product replacements from NSCF
or one of its distributors, then during the term of this Agreement, NSCF
will only accept Orders for that customer from NCR.
3.0 Pricing and Payment
3.1 With the exception of existing bank contracts, NSCF will provide NCR
with NSCF's most competitive price. Existing bank contracts may contain
certain custom products specifically designed for a function that
prohibits comparison with NCR's "Private Label" products.
3.2 It is understood that some of NCR's customers may enter into contractual
commitments with NCR to provide Products for a specified period of time
during the term hereof and any Orders issued hereunder pursuant to a
contract are hereinafter referred to as a "Contract Order." Prior to
entering into any Contract Order with a customer, NCR will consult with
NSCF regarding the pricing terms of that order. This pricing will then
remain in effect for the agreed upon terms of the contract order.
3.3 The parties will establish pricing annually for standard Orders. Subject
to 45 days written notice, NSCF reserves the right to increase its
pricing if the increase is attributable to variances of greater than
five percent in the cost of raw materials. In addition, NSCF agrees to
pass cost savings attributable to decreases greater than five percent in
the cost of raw
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materials. Any modifications to the pricing terms such as cost decreases
as the result of manufacturing process improvements will be subject to
the mutual agreement of the parties.
3.4 NSCF will invoice within 24 hours of shipment. The invoice will be sent
via fax to the corresponding location which issued the purchase order.
As purchased volumes increase, both parties will work together to
implement an automated invoicing system, such as EDI. Invoice terms will
be 2% 10 net 30. Any outstanding billing issues will be finalized, paid
or credited within two business days after the quarterly review meetings.
4.0 Customer Service and Delivery
4.1 NSCF will establish NCR service contracts within its operation to
provide NCR timely feedback on requests for quotes, order data,
scheduling changes and shipping requirements.
4.2 NSCF will respond to all customer service requests concerning stock
items within 24 hours and 48 hours for non stock items.
4.3 NSCF will send order acknowledgements within 24 hours of receipt. If
NSCF cannot accommodate an Order due to limits in production capacity as
provided in Section 2.2 above, it shall notify NCR within 24 hours and
shall indicate when the Order can be produced. NCR shall then have 24
hours in which to approve the delayed production date or withdraw the
Order. If the order is withdrawn due to insufficient production
capacity, and the inability of NSCF to outsource, NCR may purchase the
products elsewhere.
4.4 Packaging will consist of a generic box and include a NCR logo carton
label.
4.5 NSCF will maintain competitive delivery schedules for NCR orders based
on marketplace requirements. NSCF will provide a delivery schedule for
stock and custom items. NSCF and NCR will agree on schedules to meet
NCR's customer's requirements. Delivery may be either to the end user
customer or to the NCR warehouse. Modifications to the delivery schedule
shall be subject to NSCF and NCR approval.
5.0 Specifications, Inspections and Testing
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5.1 All data submitted to NSCF in connection with the Product is hereby
incorporated by reference. All Products ordered to NCR's specifications
will comply with then-current Specifications, unless otherwise
authorized by NCR. All Products will adhere to both ABA and ANSI print
standards. The Products shall be subject to inspection and test by NCR
at all times and places. If any inspection or test is made on NSCF's
premises, NSCF shall, without additional charge, provide reasonable
assistance for the safety and convenience of NCR's inspectors. NCR
reserves the right to reject Products which do not comply with the
warranty hereinafter stated. If rejected after delivery, rejected
Products will be returned to NSCF at NSCF's expense period Payment for
any Products shall not be deemed acceptance of those Products, and if such
Products are rejected after payment NCR shall be entitled to return the
same for replacement or refund. Consumption of the Product by NCR's
customers will constitute acceptance unless prior arrangements have been
agreed to by both NSCF and NCR.
6.0 Warranty
6.1 NSCF warrants for a period of one year after date of receipt that the
Products furnished hereunder will be in full conformity with all
Specifications and/or other descriptions and will be merchantable and of
good quality material and workmanship, and free from defects. NSCF does
not recommend storage of carbonized or carbonless products for longer
than one year. This warranty shall survive inspection, test, acceptance,
and payment, and shall run to NCR, its successors, assigns, and
customers. NCR may, at its option, either return for replacement or
credit, or require prompt correction of defective or nonconforming
Products. Return to NSCF of any defective or nonconforming Products
shall be made at NSCF's expense and no replacements of defective or
nonconforming Products shall be made unless specified by NCR.
Replacement or reworked Products shall be subject to this warranty to
the same extent as Products originally delivered under this Agreement.
7.0 NCR Technology
7.1 NCR hereby grants NSCF a license to use NCR Technology to manufacture,
market and distribute the Products exclusively to NCR. NSCF agrees that
NCR technology will not be used by NSCF to manufacture products on
behalf of any third Party without the prior written consent of NCR.
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7.2 In the case of jointly developed new technology, both parties shall have
equal rights of use and access to same.
7.3 NCR and NSCF may enter into joint development agreements to develop new
technology associated with financial forms.
7.4 NSCF agrees it use of NCR trademarks and tradenames will comply with
NCR's applicable policies and that NCR will be given the opportunity to
approve any such use prior to publication or product distributed by NSCF.
8.0 Confidentiality
8.1 Except as otherwise specifically agreed, all information disclosed by
NCR and NSCF to each other shall be in confidence and is not, in any
way, intended to be for public disclosure, provided such information is
marked "Confidential" or the like. NSCF and NCR shall take all
reasonable precautions to prevent any such information from being
divulged to any person for any purpose other than to perform this
Agreement, including having recipients acknowledge the confidential
status of such information and agreeing to like restrictions on
divulging such information. This obligation of confidence shall survive
termination of this Agreement and will continue for three (3) years
thereafter. Information in the public domain, or which is rightfully
received by NSCF or NCR from a third party, or information which both
NCR and NSCF agree in writing may be disclosed, shall not be considered
confidential. As to publicity, NSCF and NCR shall not, without first
obtaining each other's consent in writing, advertise or otherwise
disclose the fact that NSCF has furnished Products and services to NCR
under this Agreement; provided, however, both parties acknowledge that
NSCF and NCR are publicly owned companies and that this Agreement may
have to be disclosed as a material contract as part of any securities
offerings or filings with the Securities and Exchange Commission.
9.0 Indemnification
9.1 NCR will defend at its expense any claim or suit brought against NSCF
that NCR Technology infringes a patent, copyright, trade secret, or
other intellectual property rights of another and will pay all costs and
damages finally awarded, if NSCF promptly notifies NCR of the claim and
gives NCR (a) the information and cooperation that NCR reasonable asks
for, and (b) sole authority to defend or settle the claim. THIS SECTION
STATES NCR'S ENTIRE LIABILITY FOR INFRINGEMENT OF
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PATENTS, COPYRIGHTS, TRADE SECRETS, AND OTHER INTELLECTUAL PROPERTY
RIGHTS.
9.2 NSCF will defend at its expense any claim or suit brought against NCR
alleging that any Product infringes a patent, copyright, trade secret or
other intellectual property rights and will pay all costs and damages
finally awarded, if NCR promptly notifies NSCF of the claim and gives
NSCF (a) the information and cooperation that NSCF reasonably asks for,
and (b) sole authority to defend or settle the claim. In handling the
claim, NSCF may obtain for NCR the right to continue using the Product
or replace or modify the Product so that it becomes non-infringing. If
NSCF is unable to reasonably secure those remedies, as a last resort
NSCF will refund the purchase price for infringing Products. NSCF is not
obligated to indemnify NCR under this Section if the alleged
infringement is based on the use specifications or instructions provided
by NCR. THIS SECTION STATES NSCF'S ENTIRE LIABILITY FOR INFRINGEMENT OF
PATENTS, COPYRIGHTS, TRADE SECRETS, AND OTHER INTELLECTUAL PROPERTY
RIGHTS.
10.0 Limitation of Liability
10.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES UNDER THIS AGREEMENT
REGARDLESS OF WHETHER THE PARTY HAS BEEN NOTIFIED OF THE POSSIBILITY OF
ANY SUCH DAMAGES.
11.0 Compliance with Laws
NSCF and NCR shall at all times comply with all applicable federal,
state, and local laws, regulations, rules, and orders. Any provision
which is required to be a part of this Agreement by virtue of any such
law, regulation, rule, or order is incorporated by reference.
12.0 Reservation of Rights
No failure by either party to insist upon strict compliance by the
other party with any of the terms, provisions, or conditions of this
Agreement, in any instance, shall be construed as a waiver or
relinquishment by either party of the other party's rights to insist
upon strict compliance therewith in the future.
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13.0 Term and Termination
13.1 This Agreement shall continue for an initial term of three years from
the date first set forth above and shall be automatically renewed for
successive one year terms thereafter, unless notice of termination is
given by one party to the other at least one hundred and eighty (180)
days prior to the termination date of the initial term or of any yearly
renewal term, or unless earlier terminated under any other provision of
this Agreement.
13.2 Either party may terminate this Agreement upon sixty (60) days written
notice to the other party for failure of such other party to fulfill
any of its material obligations hereunder, provided, however, if during
the period of such notice the other party shall have remedied such
failure, this Agreement shall continue in full force and effect as it
would have had such failure not occurred. Nothing contained herein shall
be deemed to bar or prohibit NSCF from suspending its performance at any
time that NCR is in default in payment in accordance with Section 3.3
hereof or otherwise in default hereunder. In the event of termination
under this paragraph, each party shall be entitled to return of any
amounts paid in anticipation of performance not rendered by the other
party.
13.3 This Agreement shall terminate forthwith, at the option of either party
by notice in writing to the other party, upon the other party ceasing to
carry on its business or in the event the other party becomes the subject
of any proceedings under the law of any jurisdiction for the relief of
debtors or otherwise becomes insolvent, bankrupt, or makes an assignment
for the benefit of creditors, or upon the appointment of a receiver for
the other party, or its reorganization for the benefit of creditors. The
sale or change in control of a party shall not be deemed cessation of
that party's business under the terms of this Section 13.3 or considered
grounds for termination.
13.4 Upon termination of this Agreement, the terms of Section 6.1, 8.1, 9.0,
10.0, 11.0 and 17.0, shall survive termination. Upon termination of this
Agreement, NCR shall remain liable and pay for all Orders shipped during
the Term hereof.
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14.0 Assignment
Neither this Agreement nor any right or obligations at governs may be
assigned or delegated by either party without the prior written consent
of the other party, which consent shall not unreasonably be withheld.
15.0 Notices and Communications
Except as otherwise specifically provided herein, notices and other
communications by a party under this Agreement shall be provided in
writing to:
To NCR: Tracy Drew
Manager Product Service and Alliance
9095 Washington Church Road
Miamisburg, OH 45342
To NSCF: John Christenson
National Sales Manager
7130 Northland Circle North
Brooklyn Park, MN 55428
16.0 Applicable Law
This Agreement shall be construed in accordance with the internal
substantive laws of the state of Minnesota.
17.0 Dispute Resolution
17.1 Except as otherwise specifically provided herein, any controversy or
claim, whether based on a contract, statute, fraud, misrepresentation or
other tort legal theory, arising out of or related to this Agreement
shall be resolved by arbitration in accordance with this paragraph.
17.2 The arbitration shall be conducted before a single arbitrator who is
knowledgeable in the field of financial and business forms. The
arbitrator shall be selected from a panel proposed by the American
Arbitration Association ("AAA"), and both the arbitrator's selection and
the arbitration proceedings shall be administered by the AAA. The U.S.
Federal Arbitration Act, 9 U.S.C. Sections 1-15, shall govern any and
all issues concerning the arbitrability of claims. The arbitrator's
award shall be final and binding, and may be entered for enforcement in
any court of
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competent jurisdiction. The arbitrator shall not have the power to award
lost profits or other consequential, special, punitive, exemplary, or
other non-compensatory damages to either party. The arbitration shall be
held in a location that is mutually agreeable to the parties and each
party shall be responsible for paying its own expenses. The costs of
the arbitration itself, including facilities and fees, shall be borne
equally by the parties.
17.3 If either party pursues a claim arbitrable under this paragraph through
means other than arbitration, then the other party shall be entitled to
recover any costs it incurs in compelling arbitration, including
reasonable attorney's fees.
17.4 Nothing in this paragraph shall be construed as limiting NCR's and
NSCF's right to seek injunctive or other special or equitable relief
through any judicial forum for potential or actual violations of this
Agreement's provisions on Confidentiality.
IN WITNESS WHEREOF, NCR AND NSCF have caused this instrument to be
executed by their duly authorized representatives.
Northstar Computer Forms, Inc. NCR Corporation
By: /s/ Kenneth E. Overstreet By: /s/ Daniel J. Enneking
------------------------------- -------------------------------
Name: Kenneth E. Overstreet Name: Daniel J. Enneking
----------------------------- -----------------------------
Title: President Title: Sr. Vice President
---------------------------- ----------------------------
Date: Nov 6, 1998 Date: Nov 6, 1998
----------------------------- -----------------------------
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EXHIBIT A
PRODUCT LIST
I. NEGOTIABLE DOCUMENTS (Security Documents)
- Money Orders
- Official Checks (Cashier's, Expense, Dividend, Accounts Payable)
- Gift Certificates
- Letter Checks (MICR Variable Image Printing)
II. INTERNAL BANK FORMS (Non-Negotiable)
- Cash Tickets
- General Ledger Tickets
- Teller Receipts
- Process Control Documents
- Drive Up Envelopes
III. OTHER FORMS
- Currency Envelopes
- Holiday Bank Items (Letter Checks, Statements, Receipts, Envelopes)
- Document Carriers
- Counter Forms (Savings Deposits/Withdrawals, Deposit Tickets)
- Forms Management/Distribution
- Imprint Programs (Commercial Deposit Ticket Books)
- Business Checks
- Test Documents (NCR, IBM, and Lundy Sorters)
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