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EXHIBIT 10.4
RDSI BANKING SYSTEMS
DATA PROCESSING AGREEMENT
FIVE (5) YEAR AGREEMENT
Prepared For:
NORTH OAKLAND COMMUNITY BANK
STERLING HEIGHTS, MICHIGAN
(ROCHESTER HILLS, MICHIGAN)
AGREEMENT PERIOD:
JUNE 01, 1998 THROUGH MAY 31, 2003
FIVE (5) YEAR AGREEMENT
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RURBANC DATA SERVICES
DATA PROCESSING AGREEMENT
This Agreement dated March 24, 1998 is entered between Rurbanc Data Services,
Inc., a wholly owned subsidiary of Rurban Financial Corporation, an Ohio
Corporation located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (thereafter
referred to as "RDSI"), and
NORTH OAKLAND COMMUNITY BANK
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇ (▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇)
(hereinafter referred to as "Bank.")
This Agreement sets forth the basic contractual terms for providing an
electronic data processing service in accordance with the stipulations and rates
hereinafter set forth, and provided by RDSI to the Bank.
I. PURPOSE OF THE AGREEMENT
The Bank agrees that RDSI may perform certain services for the Bank in
the schedule(s) attached hereto, and RDSI agrees to performing such services
pursuant to the terms and conditions of this Agreement. RDSI shall receive data
from the Bank via data communication lines or ground courier for processing, and
shall process such data, producing reports and/or journals daily for the Bank.
It is agreed that if source documents are ever in transit, via ground courier,
between the Bank and RDSI, the responsible party should maintain adequate
insurance coverage and/or accept financial responsibility. The Bank agrees to
compensate RDSI for its services herein in accordance with the attached fee
schedules.
II. TERM OF THE AGREEMENT
This Agreement shall become effective June 01, 1998 and shall extend
for a period of Five (5) Years, continuous, day-to-day, which is the term of
this Agreement. However, at the request of the Bank, the term does not commence
until the "core" applications, (Demand Deposits, Savings, Certificates of
Deposit, Loans and Financial General Ledger Management Systems), have been
successfully converted and operational.
This Agreement shall automatically continue after the initial Term
unless terminated by either party upon at least 180 days prior written notice to
the other. The Bank's and RDSI's continuing obligations under the Agreement
including, without limitation, those relating to Ownership and Confidentiality
shall survive the termination of this Agreement. RDSI reserves the right to
reduce charges at any time, however,
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any increase will not become effective until thirty (30) days after prior
written notice has been given to the Bank. RDSI and the Bank have agreed that
during the first TWO (2) Years OF THIS Agreement, rates shall be fixed at such
rate(s) as described in the attached fee schedule(s).
III. RETURN OF BANK'S WORK
RDSI will process the Bank's items in connection with any service
agreed upon and will assure transmission or delivery to the Bank by 9:00 a.m. on
the next business day. The only exceptions granted for non-delivery on time,
will be those due to abnormal climatic conditions, equipment and software
failures, or other unforeseen contingencies not due to negligence and equipment
in effect throughout the period covered by this Agreement.
IV. CONVERSION
Expenses of the conversion will be paid by the Bank, such as quoted
conversion and training fees, equipment purchases and modifications,
communication equipment and lines. ITI formal training classes, new forms and
supplies and other conversion cost items as detailed in the attached RDSI
proposal. The RDSI conversion charge has been established at $5,000.00 plus any
expenses incurred due to deconversion from the Bank's existing processing
system, to be paid directly to RDSI upon completion of the first application
converted. RDSI assures the Bank that conversion of the "core" application
systems will be completed no later than thirty (30) days after commencement of
the first application. The bank will receive a 25% discount applied against the
first three (3) months' processing invoice from RDSI for each month the
conversion is delayed by RDSI, with an additional 25% discount for each
additional month the conversion is delayed thereafter. No discount penalty will
be applied if the Bank delays the conversion at the Bank's own request. Test
conversion procedures will be performed and provided prior to the actual
conversion and will require the Bank's approval to proceed.
V. COMPLIANCE WITH SECTION 5 OF THE BANK SERVICE CORPORATION ACT
RDSI hereby agrees it will be subject to regulations and examinations,
including auditing, to the same extent as if the services being provided by RDSI
were being performed by the Bank itself on its own premises.
VI. EXAMINATION OF RIGHTS
Each year RDSI will contract an outside accounting firm for the
purposes of performing a third party review. If the Bank wishes to participate
in the third party audit and review, cost will be divided equally among all RDAs
bank customers being
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processed according to asset size. The Bank still has the right to perform an
examination of RDAs independently at the Bank's own expense.
VII. CORRECTION OF ERRORS
RDAS shall have the right to reprocess the Bank's materials to correct
any errors for which RDSI may be responsible in full satisfaction of all Bank's
claims, provided the Bank has notified RDSI in writing of any claimed error
within thirty (30) days after receipt of service results and furnished
supporting documentation of such claim. All services furnished hereunder are
deemed acceptable to the Bank unless proper notice and proof of claim have been
made within the thirty (30) day period.
VIII. LIMITATION OF LIABILITY
A. RDSI shall be liable for loss, destruction or damage of Bank
supplied materials only if due to the negligence of RDSI, and
then only to the extent of restoring the loss, destroyed or
damaged materials; provided such restoration can be reasonably
performed by RDSI and the Bank furnishes RDSI with all source
data necessary for such restoration.
B. RDSI shall continue to maintain during the duration of this
Agreement an errors and omissions policy of insurance, in the
amount as set forth and contained in Section XII. Hereto.
C. RDSI shall not be liable for any incidental, special or
consequential damages of any nature whatsoever, such as, but
not limited to, loss of anticipated profits or other economic
loss in connection with, or arising out of the existence or
services provided for in this Agreement, or for specific
performance.
D. RDSI shall not be liable for failure to provide, or delays in
providing, services hereunder, if due to any cause beyond
RDSI's reasonable control, including but not limited to the
following: (1) mechanical failures or breakdowns of electronic
data processing equipment due to power failures dues to a
declared disaster; (2) shortages in supplies or materials from
RDSI's supplier, due to strike, riots, civil disturbances,
flood, fire, snow storms, acts of God, or any other act of
occurrences not under the controls of RDSI; (3) strikes,
riots, civil disturbances, war, law suits, or lockouts; (4)
fire, epidemics or other casualties; (5) windstorms,
earthquakes, tornadoes, floods, weather, or other acts of God;
(6) unusual delay in transportation beyond the control of
RDSI; (7) destruction of data communication lines; (8)
governmental regulations or interference, except to the extent
agreed to herein.
E. RDSI's total liability arising out of or any way connected to
its performance under this Agreement, including malfunction of
RDSI's equipment, failure or negligent of RDSI's employees and
agents, and defective programs, shall be limited to the
coverage as set forth under RDSI's errors and omissions
insurance policy. However, RDSI may remedy future claims,
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with the Bank's agreement, in the case where repetitive
processing services are being provided, to general money
damages in the amount not excess of the total amount paid by
the Bank for services for services performed by RDSI under
this Agreement during the period of ninety (90) days
immediately preceding the occurrence giving rise to any claims
by the Bank; claims exceeding this remedy may be submitted to
errors and omissions insurance coverage. In the case where
non-repetitive processing services are being supplied, RDSI's
total liability shall be limited to the general money damages
not to exceed the total amount paid for such services by the
Bank.
F. RDSI warrants that the services provided under this Agreement
comply with all existing applicable Federal, State and Local
laws, regulations and guidelines. If after the date hereof,
any modifications to those services shall be required by law
or by any governmental regulatory authority having authority
over the Bank's business, RDSI shall, upon ninety (90) days
advance written notice to the Bank and to RDSI, conform the
services to be in compliance with such modified laws or
governmental regulations. Except as otherwise provided in this
Agreement, RDSI shall not be liable for any other express or
implied warranty, including any warranty of merchantability or
fitness.
G. RDSI agrees to (1) monitor for and detect service
deficiencies, (2) take prompt action to determine the cause of
and to correct the deficiencies, (3) shoulder the costs of
correcting the deficiencies and (4) provide substitute
services until such time as the deficiencies are corrected.
Moreover, the fees due RDSI under this Agreement may be
adjusted for so long as the specific deficiencies exist so
that RDSI will have an economic incentive to correct
deficiencies promptly and to prevent deficiencies in the first
instance. The adjustment in fees due RDSI will be adjusted for
such deficiencies in accordance with Section VIII.
Limitation of Liability.
with the Bank's agreement, in the case where repetitive
processing services are being provided, to general money
damages in the amount not excess of the total amount paid by
the Bank for services for services performed by RDSI under
this Agreement during the period of ninety (90) days
immediately preceding the occurrence giving rise to any claims
by the Bank; claims exceeding this remedy may be submitted to
errors and omissions insurance coverage. In the case where
non-repetitive processing services are being supplied, RDSI's
total liability shall be limited to the general money damages
not to exceed the total amount paid for such services by the
Bank.
F. RDSI warrants that the services provided under this
Agreement comply with all existing applicable Federal, State
and Local laws, regulations and guidelines. If after the date
hereof, any modifications to those services shall be required
by law or by any governmental regulatory authority having
authority over the Bank's business, RDSI shall, upon ninety
(90) days advance written notice to the Bank and to RDSI,
conform the services to be in compliance with such modified
laws or governmental regulations. Except as otherwise provided
in this Agreement, RDSI shall not be liable for any other
express or implied warranty, including any warranty of
merchantability or fitness.
G. RDSI agrees to (1) monitor for and detect service
deficiencies, (2) take prompt action to determine the cause of
and to correct the deficiencies, (3) shoulder the costs of
correcting the deficiencies and (4) provide substitute
services until such time as the deficiencies are corrected.
Moreover, the fees due RDSI under this Agreement may be
adjusted for so long as the specific deficiencies exist so
that RDSI will have an economic incentive to correct
deficiencies promptly and to prevent deficiencies in the first
instance. The adjustment in fees due RDSI will be adjusted for
such deficiencies in accordance with Section VIII. Limitation
of Liability.
IX. OWNERSHIP AND CONFIDENTIAL
A. It is understood that the Bank is the legal owner of
all data and records relative to itself, which may be in the
possession RDSI and may be obtained by the Bank via machine
readable form at a reasonable charge determined by RDSI, as
stated in Section XVIL Deconversion Considerations, of this
Agreement. RDSI is the owner of all programs and
documentation
B. RDSI and the Bank each agree that all information including,
but not limited to business methods, internal operation data
and customer records, communicated to it by the other either
before or after the effective date of this Agreement, was and
shall be received in strict confidence, shall be used only
for the purposes of this Agreement, and that no such
information shall be disclosed by the recipient party without
the prior written consent of the other party, and each agrees
that each party will prevent the disclosure to outside
parties of the terms and provisions hereof, except as may be
necessary by reasons of legal, accounting, or regulatory
requirements beyond the reasonable control of RDSI or the
Bank, as the case may be.
C. This Agreement absolutely prohibits either party from
disclosing confidential information of the other, with the
usual exceptions of disclosure required by law or court order
or disclosure of information already in the public domain
through no fault of either party to the Agreement. Both
parties agree to notify the other of any breach of
confidentiality.
D. RDSI and the Bank agree to indemnify and hold harmless the
other from any direct loss, damage cost or expense which the
other may sustain or incur by reason of any wrongful use by
RDSI or the Bank, as the case may be, or confidential
information of the other obtained in the course of the
performance of this Agreement. In no event, shall such
indemnification extend to claims by or information
communicated by third parties not subject to this Agreement.
E. RDSI agrees that it will comply with all applicable Federal,
State and Local laws and regulations governing the use of
disclosure of information provided by the Bank.
F. RDSI shall establish and maintain reasonable safeguards
against the destruction or loss of the Bank's data in the
possession of RDSI.
G. RDSI will notify the Bank of any system changes that will
effect the Bank's procedures, reports, etc.
H. RDSI and the Bank each agree that all Bank information,
including hard copy report media as well as on-line data, and
all Bank customer data, shall be held in strict confidence,
and shall be used only for purposes of this Agreement, and
that no such information shall be disclosed by the recipient
party without the prior written consent of the Bank, and each
agrees to take all reasonable precautions to prevent the
disclosure to outside parties of the terms of this Agreement.
However, disclosure required by law may be excepted from the
general prohibition against disclosure and the Bank, the
Bank's parent company and the Bank's counsel may decide
whether the Agreement or its terms must be disclosed.
I. Upon the occurrence of any default under this Agreement,
remedies upon default as outlined in Section XI. Of this
Agreement will apply.
X. PAYMENTS AND BILLING
The Bank agrees to pay RDSI for services performed hereunder in
accordance with the changes set forth in this Agreement. RDSI shall
invoice during the first ten (10) days of each month for services
performed during the prior month. Payment by the Bank shall be net ten
(10) days from the invoice date. Any invoice aged thirty-one (31) days
from the date is subject to a service charge of one percent (1%) of the
unpaid balance. No late charge will be imposed by RDSI to the Bank in
the case of amounts past due that are reasonably in dispute.
XI. DEFAULT: REMEDIES UPON DEFAULT AND ARBITRATION
A. Any of the following events will constitute a default under
this Agreement: (1) nonpayment of any amounts due RDSI by the
Bank; (2) nonperformance of any of the Bank's or RDSI's other
material obligations; (3) if any representation or warranty of
the Bank or RDSI proves to be false in any material respect;
(4) if the Bank or RDSI commits an act of bankruptcy or
becomes insolvent or the subject of any proceeding under the
Bankruptcy Act; (5) if any substantial part of the Bank's
property becomes subject to any levy, seizure, assignment,
application or sale for or by any creditor or government
agency; or (6) failure of the RDSI backup disaster recovery
contingency plan to be implemented as a result of a service
disrupting disaster, causing the inability of RDSI, in
accordance to this Agreement, to perform data processing
services for the Bank for an unreasonable length of time, in
excess of twenty-four (24) to forty-eight (48) hours.
B. Upon the occurrence of any default under this Agreement, RDSI
and the Bank, at its option provided at least thirty (30) days
(or such longer period as may be required by the applicable
regulatory authorities) prior written notice has been given to
the other and such default has not been cured within such
period, may terminated this Agreement. In addition, RDSI or
the Bank shall have all other rights and remedies available to
it under this Agreement or by operation of law or otherwise.
C. Upon the occurrence of default under this Agreement as stated
in paragraph A. (6)(, of this section, if service provided by
RDSI to the Bank is disrupted for an extended period of time,
exceeding forty-eight (48)
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hours, resulting from the failure of the RDSI disaster
recovery contingency plan, being implemented in response to an
actual disaster, the Bank may terminate this Agreement and
take action to protect itself by seeking alternative data
processing services.
D. RDSI believes its systems and equipment to be Year 2000
compliance and will make every effort to test all RDSI systems
and equipment to assure functionality. Failure of RDSI to be
Year 2000 compliance would be in violation of bank regulations
and would constitute a default under this Agreement.
E. ARBITRATION. Any dispute, controversy or claim arising out of,
connected with, or relating to this Agreement, or the breach,
termination, validity or enforceability of any provision of
this Agreement, will be resolved by final and binding
arbitration by a panel of three arbitrators in accordance with
and subject to the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") then in effect.
Following notice of a party's election to require arbitration,
each party will within thirty (30) days select one (1)
arbitrator, and those two arbitrators will within thirty (30)
days thereafter select a third arbitrator. If the two
arbitrators are unable to agree on a third arbitrator within
thirty (30) days, the AAA will within thirty (30) days
thereafter select such arbitrator. Discovery as permitted by
the Federal Rules of Civil Procedure then in effect will be
allowed in connection with arbitration to the extent
consistent with the purpose of the arbitration and as allowed
by the arbitrators. Judgment upon the award rendered in any
arbitration may be entered in any court of competent
jurisdiction, or application may be made to such court for
judicial acceptance of the award and an enforcement, as the
law of the state having jurisdiction may require or allow.
During any arbitration proceedings, RDSI shall continue to
provide services under this Agreement and the Bank shall
continue to make payments hereunder. The fact that arbitration
is or may be allowed will not impair the exercise of any
termination right under this Agreement.
F. CHANGE IN OWNERSHIP. RDSI and the Bank agree that in the event
that Rurbanc Data Services, Inc. (RDSI) has a change of
ownership (through merger, acquisition or sale of the
company), upon such occurrence, the Bank may exercise its
option, provided at least a six (6) month prior written notice
has been given to the other, may terminate this Agreement.
Change in the Bank ownership does not apply and will not
affect the terms of this Agreement.
G. This Agreement provides that RDSI and the Bank will use their
best efforts to resolve disputes expeditiously.
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H. If material deficiencies are found in RDSI's operation by
third party audit review or by bank regulatory examination
reports; or if RDSI's external auditors issue a qualified
going concern opinion on the financial statements of RDSI; or
if RDSI should be declared insolvent, and RDSI has not taken
action to remedy, these should also be considered events of
default.
XII. ERRORS AND OMISSIONS INSURANCE
RDSI will carry Errors and Omissions Insurance Coverage as follows:
Electronic Data Processing Errors and Omissions Declared Coverage:
Limit of Liability $1,000,000.00
Deductible of $1,000.00 per claim
Errors and Omissions Insurance Coverage is carried with:
Royal Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RDSI agrees to provide the Bank notification in the event of a change in
insurance carriers or cancellation of the policy by the insurance carrier. RDSI
will provide the Bank with a fiscal year-end financial statement each year,
which is December 31st.
XIII. GENERAL
A. Bank acknowledges that it has not been induced to enter this
Agreement by any representation or warranty not set forth in
this Agreement. The capabilities, functions and operational
requirements are described in the RDSI Proposal, dated
February 04, 1998, supplied to the Bank by RDSI and contained
in Appendix A, which Appendix A is incorporated in the
Agreement by reference hereof. The services shall include, in
addition to the description contained in Appendix A, any
improvements, additions or modifications of the services which
RDSI provides to the Bank and materials related thereto and
all materials, documentation and technical information
provided to the Bank in written form and identified in
Appendix A for use in connection with the services. This
Agreement contains the entire agreement of the parties with
respect to its subject matter and supersedes all existing
agreements and all other oral, written or other communications
between them concerning this matter. This Agreement shall not
be modified in any way except by a writing signed by both
parties. Any and all additional services not previously
mentioned and made part of this Agreement that shall be
provided, shall become part of this Agreement by an Addendum
signed by both parties attached hereto.
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B. The Agreement may not be assigned by the Bank, in whole or
part, without the prior written consent of RDSI. This
Agreement shall binding upon and shall inure to the benefit of
RDSI and the Bank and their respective successors and
permitted assigns.
C. If any provisions of the Agreement (or any portion thereof)
shall be held to be invalid, illegal or unenforceable, the
validity, legality or enforceability of the remainder of this
Agreement shall not in any way be affected or impaired
thereby.
D. The Headings in this Agreement are intended for convenience of
reference and shall not affect its interpretation.
E. The individuals executing this Agreement on behalf of RDSI and
the Bank do each hereby represent and warrant that they are
duly authorized by all necessary action to execute this
Agreement on behalf of their respective principals.
F. In addition, it is agreed that an RDSI Customer Service
Representative shall be designated as the Bank's client
relations representative, and shall visit the Bank once every
six weeks.
G. This Agreement shall be governed and construed in accordance
with the laws of the State of Ohio.
H. If either party commences an action against the other to
enforce any of the terms of this Agreement, the action must be
brought in the State of Ohio in a court of competent
jurisdiction.
I. This Agreement provides that the Bank may request changes in
services, software and equipment as the Bank deems necessary,
the costs of which would presumably be borne by the Bank.
XIV. FILE BACK-UP AND DISASTER RECOVERY CONTINGENCY PLAN
A. This section of this Agreement is provided in summary form and
provides an attempt and best effort to inform the Bank of the
main points of RDSI's Disaster Recovery Contingency System and
Plan. RDSI's Disaster Recovery Contingency System and Plan is
an ever changing and growing plan and does not lend itself to
inclusion within this Agreement. RDSI will provide the Bank
with periodic updates and modifications to the plan as they
occur and are included within the plan and effect this
Agreement. The Bank is encouraged to review the RDSI Disaster
Recovery Plan in detail and at length at any time as deemed
necessary.
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B. RDSI agrees to provide MASTER and transaction file BACK-UP and
Disaster Recovery Contingency Plan, in order to secure and
limit any disruption to the Bank's data processing services as
provided by this Agreement.
C. All Master and Transaction Files (daily activity) are backed
up on a daily basis. The Transaction Files are backed up after
the day shift and after the nightly update. One copy of the
Transaction File is taken off-site, while a second copy is
maintained in an on-site vault. Master Files are backed up
each Wednesday and taken to off-site storage each Friday.
Since RDSI processes the Information Technology, Inc. (ITI)
Premier II Software, source code is no longer maintained at
RDSL. All on-site files are stored in the computer room in
locked fileproof cabinets. There is a manual operator log and
the Tape Librarian is responsible for logging, storing and
pulling tapes. Computer operators then mount and scratch tape
files prior to the beginning of the nightly operations.
D. A summary of the back-up tapes and files maintained in
off-site vault storage are as follows:
- UNISYS OPERATING SOFTWARE and UTILITIES
Backed up when changes occur - copy
maintained off-site.
- TRANSACTION FILE TAPES
Backed up daily - taken off-site daily.
Master Files
Backed up weekly - taken off-site weekly.
Source Code Programs
Maintained by ITI, Lincoln, Nebraska
E. RDSI and its management has secured a Disaster Recovery
Hotesite contractual agreement with SunGard Recovery Services,
Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, 1-610/314-8700 or
1-800/247-7832. RDSI is licensed at the Warminster, PA Mega
Center. Complete testing at the Warminster Center Facility,
including all applications, as well as capture testing is
conducted by RDSI personnel on an annual basis.
F. In addition, RDSI has developed and maintain a written
comprehensive Disaster Recovery Contingency Plan encompassing
RDSI's data processing operations, as well as communications
and imaging capture center and its service to the Bank. In the
event of a declared disaster emergency, the Bank's transaction
items may be picked up by RDSI
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personnel and ground courier or transmitted directly to
Warminster Mega Center where processing will be completed.
G. Hard copy reports may be delivered to the Bank by ground
courier or transmitted via dial-up communications or dedicated
data line communications. This process will continue until
service is restored at the RDSI Data Processing Center or
RDSI's Cold Site in Oklahoma, Ohio or Alternative Center
location. The actual RDSI Disaster Recovery Contingency Plan
may be reviewed in its entirety, by Bank personnel or
examiners, but the Plan must be reviewed in RDSI's secured
facilities. RDSI maintains power surge protection and an
Uninterrupted Power Supply (UPS) system on its Enterprise
Servers and computer equipment. IF RDSI and the SunGard
Recovery System Plan fails for any reason, RDSI will provide
the Bank copies of necessary files in order to assure the Bank
alternative servicing options.
H. The Bank agrees to have arrangements for back-up facilities
relating to the Bank's own internal operation and equipment,
in effect throughout the period covered by this Agreement
failure of said equipment is not the responsibility of RDSI.
I. RDSI maintain insurance coverage intended to cover data
processing equipment and media, extra expenses for emergency
processing, data reconstruction and emergency daily usage of
the Hotsite.
J. SunGard invoices RDSI monthly for the cost of the RDSI and
SunGard Recovery Contingency Plan, Hotsite membership and
testing resources and time. RDSI passes this cost directly
onto its customers, including the Bank via monthly data
processing invoices. The Bank's portion of this cost is
determined by asset size and actual number of accounts
processed, and its subject to change in direct relation to the
contractual agreement between RDSI and SunGard. These terms
may override the Line Item "Disaster Recovery Contingency Plan
Services" found on Addendum A Fee Schedule of this Agreement.
K. Declaration of Disaster. If RDSI center or equipment will be
operable within 48 hours of a loss, outage, disaster or
emergency, notification of the SunGard Recovery Center is not
required, however, RDSI reserves the right to declare a
disaster if center recovery is unsure. If outrage or loss of
equipment is expected to last beyond twenty-four (24) to
forty-eight (48) hours, the RDSI Management Team will notify
the SunGard Recovery Center and begin recovery procedures in
Warminster, PA.
L. RDSI assures the Bank that any individual service interruption
duration's be limited to a period of twenty-four (24) to
forty-eight (48) hours. Failure
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to comply by RDSI would constitute default under the terms of
this Agreement.
XV. INTERNAL REVENUE SERVICE
A. RDSI will process and provide, according to the Terms of this
Agreement, the required Internal Revenue Service magnetic
media or transmission reporting, as specified by the Internal
Revenue Service.
B. RDSI will make every reasonable effort to satisfy magnetic
media or transmission reporting requirements set forth by the
Internal Revenue Service and this Agreement. In an effort to
satisfy and verify all Internal Revenue Service requirements
RDSI will produce a magnetic media or transmission reporting
test, to be forwarded to the Internal Revenue Service in
December of each year for advance testing and verification by
the Internal Revenue Service.
C. In addition, if the Bank is levied a penalty by the Internal
Revenue Service, based upon information provided the IRS by
magnetic media as filed by RDSI, and it is determined that the
penalty levied was not a result of erroneous input by the
Bank, but from a magnetic media of transmission reporting
error, the Banks shall be held harmless, and RDSI will assume
responsibility to resolve the penalty with the Internal
Revenue Service. If the penalty stands, Section VII,
Limitation of Liability, shall be applied.
XVI. ON-LINE AVAILABILITY
A. RDSI will make every reasonable effort to have the On-Line
Inquiry Services available during the hours as indicated in
this Agreement as follows:
On Line Availability Schedule
-------------------- --------
8:00 a.m. - 7:00 p.m. Monday
8:00 a.m. - 7:00 p.m. Tuesday
8:00 a.m. - 7:00 p.m. Wednesday
8:00 a.m. - 7:00 p.m. Thursday
8:00 a.m. - 7:00 p.m. Friday
8:00 a.m. - 3:00 p.m. Saturday
Not Available Unless Previously Arranged Sunday
Not Available Unless Previously Arranged Scheduled Holidays
(Based on Federal
Reserve Holiday
Schedule)
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B. RDSI will provide system updates nightly for the Bank. Monday
through Friday, based on the Federal Reserve Schedule.
Saturday's work will be posted or updated during Monday's
nightly update. In addition, Friday's actual reports should
not be expected to be delivered to the Bank until the
following Monday morning, delivery either by ground courier or
via the MACROFICHE Report Storage and Retrieval System or the
RECALL Optical Disk System. However, the on-line system will
be available to the Bank on Saturday, so that regular business
may be conducted.
C. RDSI assures on-line availability for balance verification and
transaction authorization to the RDSI Enterprise Server (host
computer) at least ninety-five (95%) of the processing time
each month (excluding scheduled down time for normal system
maintenance) provided the Bank's network and data
communications lines are available. The Bank shall be notified
at least one week in advance of any scheduled Enterprise
Server (host computer) downtime.
D. On a monthly basis, RDSI will ensure that its on-line
computing facilities are available for the processing of the
Bank's on-line transactions at a minimum of ninety-five (95%)
of the time, as prescribed by the Bank, measured over a
calendar month at the point of departure from the RDSI
Enterprise Server (host computer).
E. On-line response time is a direct function of the data
communication line speed and the Bank's internal network. RDSI
will assist the Bank in analyzing and maintaining an
acceptable and satisfactory response time and will assist the
Bank in improving the response time when necessary.
F. Customer Service is perceived as a significant benefit from
RDSI. RDSI will provide Bank responses to questions as
follows: (1) average response within two (2) hours of calling
the RDSI Customer Support Center; and (2) a resolution on
average of forty-eight (48) hours.
G. In the event of human error on the part of RDSI which could be
expected to create an impact on the Bank or the Bank's
customers, RDSI agrees to: (1) notify the Bank of the error
within four (4) hours during normal business hours; (2)
develop and implement a plan of action to be shared with the
Bank within eight (8) hours during normal business hours; (3)
resolve the error to limit the impact to the Bank, as soon as
commercially reasonably.
H. RDSI shall notify the Bank of any errors in the RDSI software
or operating system procedures when detected by or reported to
RDSI, that appear to impact the Bank. Such notification shall
include a plan for correction of the error.
13
I. RDSI will provide the Bank two (2) weeks notices of any change
in routine operating procedures. Changes falling into this
category include but are not limited to: (1) persons to notify
in the event of a problem; (2) form of communications; (3)
change in processing or contact location; and (4) hours of
service; etc.
J. RDSI will notify the Bank, in writing, of any enhancements or
new releases of the RDSI software not less than one (1) week
prior to implementation of such changes. RDSI shall make
available to the Bank, in accordance with the published
curriculum, training adequate on all such changes not less
than one (1) week prior to implementation. Training usually is
only required should the changes be system releases and
upgrades requiring additional training or should the Bank
elect to use the new functionality. RDSI will determine if
training is necessary and notify the Bank of the scheduling.
XVII. DECONVERSION CONSIDERATIONS
A. Upon termination of this Agreement, the Bank may obtain data
files and records relative to itself for the purposes of
deconversion to an alternative data processing solution via
machine readable media based on the following Pricing
Agreement Schedule:
1. Magnetic Machine Readable Media - $150.00 per tape.
2. Bank agrees to purchase from RDSI all used special
form inventory previously purchased at RDSI's
expense, at cost..
3. All data processing line charges yet to be invoiced,
calculated to the estimated date of deconversion and
actual line disconnect order.
4. Programming and Software Deconversion Charges -
$1,500.00
5. Additional charges, if any, directly relating to the
deconversion, as assessed by Information Technology,
Inc. (ITI), Lincoln, Nebraska. These charges, if any,
as determined by ITI will be passed through directly
to the Bank.
6. Reports, trials, listings, etc. - $50.00 per report.
B. All deconversion charges as stated above should be paid by the
Bank to RDSI prior to the release of the final deconversion
magnetic readable media, however, RDSI will waive lien rights
in relationship to the Bank's data and good will.
C. RDSI agrees to waive the deconversion fees as previously
stated to the Bank in the event the Bank terminates the
Agreement due to RDSI's inability to restore service following
a declared disaster.
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XVIII. PRICING POLICIES
A. As previously stated within the Agreement, RDSI reserves the
right to reduce charges at any time, however, any increase
will not become effective until thirty (30) days, after prior
written notice has been given to the Bank. RDSI and the Bank
have agreed that during the first (1st) two (2) years of this
Agreement, rates shall be fixed at such rates as described in
the attached Addendum A - Fee Schedule. Most favored nation
provision exists and provides that the Bank's fee schedule are
no less favorable than those to any client.
B. It is also agreed that RDSI will not increase its fee
schedules in excess of six percent (6%) annually in years
three, four and five of this Agreement.
C. The only exceptions to this Pricing Agreement will be those
related to increased account and transaction volumes of the
Bank; new applications and services not presently utilized by
the Bank; increased number of terminals or workstations
supported; Saturday processing; and services not presently
covered by this Agreement. The Bank agrees to buy its own
paper supplies: ex: report paper, statements, checks, notice
paper, etc.
D. In addition, ground transportation (Courier Services) charges
if needed, are not covered in the pricing schedule and Terms
of Agreement contained within this Agreement. Transportation
charges will be calculated and invoiced based on allowable IRS
mileage and maintenance guidelines, plus salary
considerations, and are subject to change by RDSI. If ground
transportation ever becomes necessary RDSI will advise the
Bank, and obtain the Bank's approval before ground
transportation it utilized.
E. Future price increases relating to Saturday Processing may
supersede the price ceilings as previously stated. However, if
the Bank does not utilize Saturday Processing, price ceilings
referred to in this Agreement shall govern the pricing policy.
RDSI will provide nightly updates for the Bank, Monday through
Friday, based on the Federal Reserve Schedule. However,
On-Line Services will be available to the Bank on Saturdays,
based on the schedule as outlined in Section XVI of this
Agreement.
XIX. YEAR ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ represents and warrants that the services provided are, or will by
September 30, 1999, be, capable of supporting Year 2000 functionality and will
function in accordance with the specifications in a multi-century,
multi-millennium environment. For purposes of this section, "supporting Year
2000 functionality" shall mean that the services
15
provided hereunder must provide fault-free performance in the processing of
dates and date-related data, including but not limited to calculating, comparing
and sorting individually and in combination with other RDSI products and
services. "Fault-free performance" shall mean the correct manipulation of data
containing dates prior to, through and beyond January 1, 2000 (including leap
year computations) without human intervention. Any modifications required to
conform the data processing services provided by RDSI to Year 2000 functionality
will be made by RDSI at their own expense. However, associated cost for
assistance and testing of the Bank's own data and files and equipment that may
be required by the various regulatory authorities will be the responsibility of
the Bank. Any such charges will be reviewed and authorized by the Bank with
prior written notice.
XX. NONSOLICITATION OF EMPLOYEES
HIRING OF EMPLOYEES. During the term of this Agreement and for a period of
twelve (12) months thereafter, RDSI and the Bank will not, without prior written
consent of the other, offer employment to or employ any person employed by the
other if the person was involve din providing or receiving services under this
Agreement.
XXI. PATENT INDEMNITY
Each of RDSI and the Bank shall indemnity, defend and hold harmless the other
from any and all claims, actions, damages, liabilities, costs and expenses,
including without limitation reasonable attorney's fees and expenses, arising
out of any claims of infringement of any United States letters patent, any trade
secret, or any copyright, trademark, service ▇▇▇▇, trade name or similar
proprietary rights conferred by common law or by any law of the United States or
any state alleged to have occurred because of systems provided or work
performed. However, this indemnity will not apply unless the party seeking
indemnity informs the party from whom indemnification is sought full opportunity
to control the defense thereof, including without limitation any agreement
relating to settlement.
XXII. ENTIRE AGREEMENT AND NOTICES
A. This Agreement, together with all addendum's, appendices or
other attachments referenced herein, is complete and exclusive
statement of the Agreement between the parties, the Bank and
RDSI.
B. NOTICES. All notices by hand or in the United States mail,
first class (or in the case of a breach, registered or
certified, return receipt requested with proper postage,
registration and certification fees prepaid), addressed to the
party for whom intended at the respective addresses set forth
below, or such other address as may be designated, pursuant
hereto:
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If to RDSI: If to the Bank:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President Chairman
Dated: ▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ DATA SERVICES, INC.
By:____________________________
Title:_________________________
NORTH OAKLAND COMMUNITY BANK
STERLING HEIGHTS, MICHIGAN
By:____________________________
Title:_________________________
