BSC, INC AND FIRST SECURITY BANK LEXINGTON, KENTUCKY
Exhibit
10.6
BSC,
INC
AND
FIRST
SECURITY BANK
LEXINGTON,
KENTUCKY
This
agreement, made and entered into this 14th
day of
November, 2005 by and between BSC, Inc. of 000 Xxx Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx, hereinafter referred to as BSC and First Security Bank, Lexington,
Kentucky, hereinafter referred to as First Security Bank.
WITNESSETH:
That
for
good and valuable consideration, the same being the mutual covenants contained
herein, BSC and First Security Bank agree and contract as follows:
1. DESCRIPTION
OF SYSTEM
BSC
will
provide “on-line” data processing service to First Security Bank in Lexington,
using the Comprehensive Banking System (CBS) software licensed by FISERV, Inc.
The software modules included in this system are:
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a.
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Common
File Subsystem - A single, real time, on-line parameter file which
controls all processing.
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b.
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Customer
Information File Subsystem - A centralized file which automatically
tracks
and correlates all of a customer’s banking
relationships.
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c.
|
Proof
of Deposit Subsystem - A central point of distribution and control
for all
monetary transactions.
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d.
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Transactions
Subsystem - An integrated deposit system which handles the processing
of
all transaction-based deposit products, including Checking, Regular
Savings, Club, NOW, Money Market,
etc.
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e.
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Loan
Subsystem - A combined subsystem which supports the automated processing
of Real Estate, Commercial and Consumer Lending
operation.
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f.
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Time
Subsystem - A system for processing all investment or term-deposit
accounts, Repurchase Agreements,
etc.
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g.
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General
Ledger Subsystem - An integrated accounting and financial control
system
designed to support the detailed information requirements of the
entire
organization.
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2. DESCRIPTION
OF SERVICES
The
service provided by BSC will also include the following features:
|
a.
|
First
Security Bank or BSC entry, update, and retrieval (by authorized
employees) of data stored in a central processing unit located on
BSC
premises through the use of display stations and printers located
at First
Security Bank.
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| b. | An average response time for "on-line" users at First Security Bank display stations not to exceed eight seconds. |
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c.
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On
line communication access to the system is available during all
workdays
and regular work hours of First Security Bank. Processing times
usually
occur after normal work hours of First Security Bank. First Security
Bank
is responsible for informing BSC of their holiday and special weekend
schedules.
|
|
d.
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BSC
begins daily processing in the late afternoon after regular banking
hours
for First Security Bank. It is First Security Bank’s responsibility to
deliver their work to BSC to all BSC sufficient time for the daily
capture, sorting, and processing of the proof and transmit items
prior to
the Federal Reserve deadline and pickup by the courier service. Work
not
received timely will be processed, however, it may not meet the current
day deadline with the Federal Reserve. After transmission of all
proof and
transit items to the AS/400 to update all the subsystems, the daily
processing begins.
|
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e.
|
The
ability to process data in batches, if desired, by Grant County Deposit
Bank personnel, and to have high volume output, such as transaction
listing and master listings, printed at BSC and delivered to Grant
County
Deposit Bank on an emergency basis.
|
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f.
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The
utilization of data base management concepts and techniques built
into the
system software operating on the central processing
unit.
|
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g.
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The
maintenance of BSC’s standard backup and recovery procedures
which
|
|
1)
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Provide
for off-site storage of backup versions of data files and
programs,
|
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2)
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Ensure
proper control of the status of data files and their activity since
last
backup,
|
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3)
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Provide
for alternative location availability for computer operation in emergency
situation, and
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4)
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Activate
reconstruction procedures for data lost through hardware or software
malfunction, operator error, or other unforeseen
destruction.
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2
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h.
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Transmit
to First Security Bank’s ATM processor a current updated balance file
after daily processing and receive daily transaction files from the
processor for posting at the next scheduled processing
cycle.
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i.
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The
daily transmission of balance information to First Security Bank’s
Internet Banking system
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j.
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The
daily transmission of balance information to the Voice Response
system
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k.
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Customer
credit information on magnetic media to First Security Bank’s Credit
Reporting Agency
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l.
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1098
and 1099 information on magnetic media to the Internal Revenue
Service
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m.
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The
receipt of Automated Clearing House items origination from other
financial
institutions.
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n.
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All
data and information received from First Security Bank will be available
for audit and review by any banking or governmental agency having
supervision over First Security Bank, including internal or external
auditors employed by First Security Bank. These audits and reviews
may be
conducted during BSC’s regular business
hours.
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o.
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Processing
priorities are controlled by the AS/400 operating
system.
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p.
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Immediate
Report availability at First Security Bank upon completion of daily
processing.
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q.
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BSC’s
customer service representatives will make notification of all system
changes that will affect procedures and reports to First Security
at least
three days in advance of such
changes
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3. DESCRIPTION
OF HARDWARE
The
hardware BSC will use in order to provide this service will include the
following:
|
a.
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Located
at BSC
|
|
1)
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Central
processing unit with magnetic disk, diskette, and tape
storage,
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| 2) | Multiple display stations |
| 3) | Line printer |
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b.
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Leased
dedicating communication lines including necessary attachments at
BSC and
each location. Security for these dedicated communication lines is
the
responsibility of the communication company and BSC is responsible
for the
attachments.
|
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4. MAINTENANCE
BSC
will,
at its expense, maintain all equipment furnished to First Security in good
and
proper working order with any necessary maintenance and repair performed in
a
timely fashion. In the event that repair of equipment named herein is necessary
and the loss of use of said equipment during repair causes hardship to First
Security Bank, BSC will furnish similar equipment on loan until the original
equipment is restored to proper working order. BSC will provide for use of
additional equipment if needed at BSC’s offices as alternate data entry
stations.
5. COURIER
SERVICE
First
Security Bank shall provide for all courier service, when needed.
6. FEE
SCHEDULE
First
Security Bank agrees to pay to BSC the monthly fee of $12,000.00 for the
performance of the above services rendered. If the costs to provide data
transmission lines to First Security Bank increase by more than 25 percent
during the life of this contract, then the amount that exceeds 25 percent may
be
billed to First Security Bank and an additional monthly charge.
7. TRAINING
SERVICES
Training
services shall be provided at BSC, for a fee of $400.00 per day. Training
necessitated by new releases or updates by the software vendor are excluded
from
any additional charges. First Security Bank will not be limited as to the number
of employees who may attend.
8. ADDITIONAL
PROGRAMMING SERVICES
Programming
service for major modifications or major additions to the above system shall
be
performed for a contracted fee not to exceed $60.00 per hour at the time such
modifications or additions are defined.
9. DURATION
AND TERMINATION
The
period of this contract shall be for six consecutive months beginning with
the
date of this contract. First Security Bank may terminate this agreement after
this period with one month written notice to BSC. BSC may terminate this
agreement after this period with one month written notice to First Security
Bank. In the event of termination by either party, BSC will provide all required
First Security Bank data on standard magnetic media at no additional cost and
First Security Bank will return all of BSC’s equipment to BSC. No monetary
penalties will be imposed by BSC for
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termination
as long as one month notice is given. In the event First Security Bank or BSC
is
merged or sold to another institution; receivership or bankruptcy will also
require one month notice. This contract contains no provisions that would limit
the ability of a regulator to arrange an orderly and reasonable conversion
of
data to another service provider or receiver. Should either party terminate
this
agreement without at least one month notice, then a termination fee may be
assessed by the other party and it will be calculated at the rate of $12,000.00
per month for each remaining month of the required one month notice period.
Licensed software and any related documentation will remain the property of
BSC.
10. INSURANCE
BSC
is
covered under the standard business policy which includes errors and omission
coverage with a liability limit of $1,000,000.00 and blanket employee dishonesty
protections with a liability limit of $100,000.00.
11. SECURITY
BREACH
BSC
agrees to promptly notify First Security Bank when any malicious activity is
suspected or known. Any security breach of policy and/or procedures will be
immediately reported to First Security Bank and it will be the responsibility
of
First Security Bank to inform the proper authorities of such
violations.
12. AUDITS
AND DISASTER RECOVERY PLAN
BSC
will
provide First Security Bank, on an annual basis, a copy of the current year
financial audit and Level 2 SAS-70 operation audit conducted by BSC’s
independent third party CPA or CPA firm at no additional cost to First Security
Bank. The Level SAS-70 operations audit will include the results of disaster
recovery plan tests conducted at BSC. BSC will provide First Security Bank
with
a current copy of BSC’s Disaster Recovery Plan.
13. PROPRIETARY
NATURE OF DATA
It
is
agree that all data and information furnished to BSC by First Security Bank
are
to be regarded by the parties as confidential and are to be held in confidence
and safekeeping by BSC for the sole use of First Security Bank.
14. LIMITATION
OF LIABILITY
BSC
agrees to use due care in processing First Security Bank work, which care shall
conform to proper data processing standards, BSC shall be responsible for
correcting any errors which are due to machine malfunctions or programming
error, provided that such errors are reported to BSC within 60 days of receipt
of information by First Security Bank.
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15. This
contract, and written amendments thereto, contain all the terms and conditions
agreed upon by the hereto, and no other agreements, oral or otherwise, regarding
the subject matter of this contract shall be deemed to exist or to bind any
of
the parties hereto. All previous communications, representations, warranties,
promises, conditions, or agreements of any kind or nature whatsoever shall
not
be binding upon the parties unless incorporated into this contract without
the
other’s consent. BSC and First Security Bank may modify the contract terms with
regard to the addition or deletions of applications or services with sixty
days
written notices. Changes in the monthly fee will be negotiated in good faith
by
both BSC and First Security Bank when the changes requirements are known. BSC
and First Security Bank will not engage in negotiations involving the receipt
of
gifts, premiums, or bonuses for singing this contract. This contract covers
and
includes the entire agreement between the parties.
16. This
contract shall be governed by the laws of the Commonwealth of Kentucky both
as
to interpretation and performance.
IN
WITNESS WHEREOF,
the parties hereto, individually and by their respective and duly authorized
officers, have hereunto set their name.
| BSC, INC. | ||
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| By: | /s/ Xxxxxxx X. Xxxxxx | |
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DATE:
8/19/05
| First Security Bank | ||
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| By: | /s/ R. Xxxxxxx Xxxxxxxxxx | |
|
President & CEO |
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