Exhibit 10.39



 




EXHIBIT 10.39

CONFIDENTIAL TREATMENT REQUESTED




TERM SHEET




FOR SHIPPING LABEL PRODUCTS



Intuit Inc. (“Intuit”) and the John H. Harland Company (“Harland”) are parties
to a Supply Agreement entered into as of January 1, 2000 (“Supply Agreement”).
This Term Sheet is not intended to be binding on either party but shall serve
as the basis of a definitive Addendum to the Supply Agreement to be negotiated
and, if agreed upon, executed by the parties; which will cover certain
additional products that is consistent with the provisions of this Term Sheet
and will contain such other customary terms as the parties may agree.





	1.	 	TERM. The term of the Addendum will be one year starting from the
implementation date and is non-exclusive. In addition to the grounds for
termination mentioned in Section 45 of the Supply Agreement, Intuit shall
have the right to review and terminate without penalty the Addendum at any
time upon sixty (60) day notification and cure period per Section 45,
should the product selection, quality, and/or service provided by Harland
for the products covered by this Term Sheet not meet the specifications
that were mutually agreed to by Harland and Intuit. Such termination of
the Addendum would be subject to the same process relating to notification
and cure as is contained in the Supply Agreement. In case of termination,
any unsold inventory and work in process covered by the Addendum, will be
the responsibility of Harland. If termination of the Addendum occurs,
this will not automatically cause termination of the Supply Agreement.
	 
	2.	 	SCOPE.
	 
	(a)	 	Addendum Products. The products to be provided under this Term Sheet and
the Addendum are the custom shipping label products listed in Exhibit A
(“Addendum Products”).
	 
	(b)	 	Warehousing and Fulfillment. Harland or its third party provider will be
responsible for the warehousing and the fulfillment of the custom shipping
labels.
	 
	(c)	 	Systems. Harland will fund the development of connections to Intuit’s
order entry and billing systems and any changes needed to meet new
businesses and services. Harland’s system support is limited to
Harland’s controlled hardware and/or software, and the level of support
will be prorated above the levels specified in the Supply Agreement based
on the additional volumes resulting from additional products.
	 
	3.	 	TARGET DATES FOR PRODUCT IMPLEMENTATION.
	 
	(a)	 	The Addendum Products will be implemented and orderable at Harland by
June 3rd, 2003.
	 
	(b)	 	An implementation plan will be jointly developed with Intuit and Harland.
	 
	(c)	 	Intuit reserves the right to adjust the target completion dates for these
Addendum Products.
	 
	4.	 	PERFORMANCE METRICS. Harland will measure and report their performance
against the performance scorecard set forth in the Addendum.



*  We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (the “SEC”). We omitted such portions from
this filing and filed them separately with the SEC.




	 	 	 	 	 
	 	 	
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	5.	 	ORDER PROCESS. Intuit shall forward Orders to Harland in accordance with
the current Order transmission process. Orders shall be processed in
accordance with the Supply Agreement. Harland shall provide ship
confirmation to Intuit. Harland shall establish an order transmission
connection to its third-party supplier prior to June 3, 2003.
	 
	6.	 	TURN AROUND TIME. Harland shall process and ship all Addendum Products
within 24 hours after receipt of the Order.
	 
	7.	 	QUALITY. Harland warrants and guarantees to FSG the quality of all
Addendum Products in line with Intuit’s expectations and as specified in
the product specifications and other requirements document in Exhibit B.
	 
	8.	 	PRICING AND COSTS. Pricing/costs under this Term Sheet and the Addendum
shall be in accordance with the Exhibit A attached to this Term Sheet, and
in accordance with the existing Supply Agreement. These mutually agreed
upon prices should be competitive in the market, and will remain in effect
for the term of the Addendum subject to the following provisions of the
Supply Agreement: Section 38 (Future Cost Savings), and Section 40
(Allowable Price Adjustments).
	 
	9.	 	OWNERSHIP OF LABEL DESIGN. Harland and Intuit agree that the PSLK and
PSLL labels (“Specially Designed Labels”) have been designed exclusively
for Intuit by Harland’s third-party supplier, and Intuit owns such
Specially Designed Labels, including any and all intellectual property
rights. During the term of the Addendum and following any termination of
the Addendum, Harland shall not use Specially Designed Labels for any
purpose other than the fulfillment of the Intuit Orders. Following any
termination of the Addendum, Intuit may continue to use the design or
layout of any Addendum Products.
	 
	10.	 	PRIVACY AND SECURITY STANDARDS. Harland and Intuit agree that Harland’s
performance under the Addendum and the Supply Agreement will be subject to
Harland’s compliance with Intuit’s then-current privacy and security
standards, and package handling requirements.
	 
	11.	 	OTHER PROVISIONS. If not listed above, other provisions in the Addendum
will closely follow those under the Supply Agreement, including but not
limited to the following sections of the Supply Agreement: 18(c)
(Turnaround Time); 20(b) (Error Correction); 21 (Rush Shipments); 22
(Service Failures); 40 (Allowable Price Adjustments); 41 (Shipping
Charges); and 45 (Termination). Harland and Intuit agree that the
following sections of the Supply Agreement are incorporated into this Term
Sheet: 5 (Confidentiality of Terms of Agreement and Purchase
Information); 6 (Confidentiality of Supply); 7 (Ownership and
Confidentiality of Intuit Customer Information); 8 (Ownership and
Confidentiality of Bank File and Intuit Systems and Processes); 11 (Direct
Orders and Inquiries); 42 (Payment Terms)—exception listed below; 46 (No
Consequential Damages); 49 (Assignment); 50 (Governing Law) ; and 55
(Entire Agreement). The exception to Section 42 (Payment Terms) is the
two percent (2%) discount for early payment within ten (10) business days
of Intuit’s receipt of Harland’s invoices for the Addendum products. The
Addendum products will not receive this discount, and will be billed on a
separate invoice from the other FSG products.
	 
	12.	 	NEGOTIATION OF CONTRACT OR ADDENDUM. The parties intend to negotiate and
sign the Addendum in accordance with the provisions of this Term Sheet by
June 15, 2003.





	 	 	 	 	 
	 	 	
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	JOHN H. HARLAND COMPANY	 	INTUIT
	 	 	 	 	 	 	 
	By:	 	
/s/ Martin E. Kerner
	 	By:
	 	/s/ Jeffrey Goodman
	 	 	


	 	 	 	

	 	 	 	 	 	 	 
	Printed Name:	 	
Martin E. Kerner
	 	Printed Name:
	 	Jeffrey Goodman
	 	 	


	 	 	 	

	 	 	 	 	 	 	 
	Title:	 	
VP, General Manager
	 	Title:
	 	General Manager
	 	 	


	 	 	 	

	 	 	 	 	 	 	 
	Date:	 	
06/09/03
	 	Date:
	 	6/13/03
	 	 	


	 	 	 	





	 	 	 	 	 
	 	 	
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Exhibit A




Product Price list




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Shipping Labels	 	 	 	 	 	100	 	200	 	300	 	400	 	500
	
	 	 	 	 	 	
	 	
	 	
	 	
	 	

	Personalized — standard design
	 	6-up (Avery 5164)	 	 	[ * ]	 	 	 	[ * ]	 	 	 	[ * ]	 	 	 	[ * ]	 	 	 	[ * ]	 
	Blank
	 	6-up (Avery 5164)	 	 	[ * ]	 	 	 	[ * ]	 	 	 	[ * ]	 	 	 	[ * ]	 	 	 	[ * ]	 




	 	 	 	 	 	 	 	 	 
	Upcharges	 	Intuit cost	 	Suggested retail
	
	 	
	 	

	Custom logo upload
	 	 	[ * ]	 	 	 	[ * ]	 
	Art Touch up
	 	 	[ * ]	 	 	 	[ * ]	 
	Bend and Peel cutting charge
	 	 	[ * ]	 	 	 	[ * ]	 
	Cancellation/Changes to an order (once order is processed)
	 	 	[ * ]	 	 	 	[ * ]	 
	Black and White Proof
	 	 	[ * ]	 	 	 	[ * ]	 
	Color Proof
	 	 	[ * ]	 	 	 	[ * ]	 




 

Designs:







*  We have requested confidential treatment for certain portions of this
document pursuant to an application for confidential treatment sent to the
Securities and Exchange Commission (the “SEC”). We omitted such portions from
this filing and filed them separately with the SEC.




	 	 	 	 	 
	 	 	
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Exhibit B




Product specifications & other requirements




Shipping Labels – styles supported





	 	•	 	The following six standard designs of Discount Labels shipping
labels should be supported for 6-up laser sheets: ML2, ML3, ML8, ML12,
ML13, JML. For the initial launch, manual shipping label rolls will not
be supported due to differences in their imprintable area.
	 
	 	•	 	All styles of labels will have the same imprintable area of 3 1/8”
in length by 7/8” in height. This imprint box should begin 3/8” from
the top of the label and 7/16” from the left of the label.




Shipping Labels – Customization Options





	 	•	 	Three layout types will be offered on this product line – Left
Logo, Right Logo, and No Logo. Label stock designs have been selected
so that across these three templates, there will be a single, standard
imprintable area. The logo must fit into a box that is 7/8” x 7/8”,
and a 1/8” margin should be placed between the logo bounding box and
the text bounding box. Therefore, for the two layout types with logos,
the area available for text will be 2 1/8” in length. For the template
with no logo option, the imprintable area will be 3 1/8” x 7/8”.
	 
	 	•	 	Up to four (4) lines of imprint text will be supported for
custom-printed shipping labels in the “From” box of the label.
	 
	 	•	 	The following Intuit standard fonts will be supported. As with
business cards & stationery, customers will be able to select and use
any of these fonts at no additional charge. The fonts include:
Auriol, Calvert, Helvetica, Hobo, Kauffman, Korinna, Improv, Cascade
Script, Nueva, Palatino, Sabon, Garamond. The default font shall be
Helvetica, as in our business cards & stationery line.
	 
	 	•	 	The customer will have the ability to specify that one or more
lines of text be printed in bold type.
	 
	 	•	 	The default point size will be 12 point bold for the first line of
imprint, and 10 point bold for the second, third, and fourth lines of
imprint. The customer will be able to reduce the point size to 11
point or 10 point (if top line) or 9 point or 8 point (if any line),
but they will not be able to enlarge the point size.
	 
	 	•	 	Customers should have the ability to enter 27 characters per line
of imprint.
	 
	 	•	 	The following nine standard ink colors will be supported. These
nine ink colors do not exactly match FSG’s current ink colors, but it
is necessary to allow for some variation in this area given that
vendors offer different standard color offerings. Other than the nine
colors below, no other colors will be offered at this time.





	 	 	 	Black

Red — PMS 185

Blue — Reflex blue

Green — PMS 349

Brown — PMS 477

Light Blue — Process blue

Maroon — PMS 208

Violet — PMS Violet

Teal — PMS 321





	 	•	 	The imprint text block should be centered vertically in the imprint
area. This is particularly important if the customer only enters a 1,
2, or 3 line imprint, rather than a 4 line imprint.




	 	 	 	 	 
	 	 	
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Logos





	 	•	 	Customers should have the ability to use their custom logo –
either newly uploaded, or existing from a previous order – on their
custom printed shipping labels with design formats that support
custom logos.
	 
	 	•	 	Customers should have the ability to use any standard or
monogram logo on their custom printed shipping labels.
	 
	 	•	 	Logos must be printed in the same standard ink color in which
the imprint text is printed.
	 
	 	•	 	Logos uploaded for use on custom printed shipping labels must
also be made available for use on other Intuit products – both on
IntuitMarket/Logo Locker and in Cosmos.
	 
	 	•	 	Custom logos and standard logos will be able to be applied to
custom printed shipping labels at no additional cost to the customer
or to Intuit.




.

Shipment & packaging requirements





	 	•	 	Labels shipped directly from a label vendor, Harland’s shipper numbers will be used.
	 
	 	•	 	Intuit customers will be given the option of ground shipping,
second day shipping, and next day shipping for any label product
ordered.
	 
	 	•	 	Harland will make available to Intuit updated, electronic
information about the ship status of boxes (fulfilled from either
Harland or the label vendor) on at least an hourly basis.
	 
	 	•	 	For any labels shipped directly from the label vendor, the boxes
will be labeled with a return address of Intuit (Harland’s Milton
return address), and any materials (packing slip, etc.) contained
within the box will be branded as Intuit and will be subject to
Intuit’s approval.
	 
	 	•	 	For any labels shipped directly from the label vendor, the vendor
will not insert any materials into the box without Intuit’s written
express consent.
	 
	 	•	 	The label vendor will insert an Intuit Supplies Catalog, and any
other materials specified by Intuit, into outgoing labels orders. The
label vendor will be responsible for managing an inventory of these
written materials, as supplied by Intuit, which will remain the
property of Intuit until they are fulfilled in outgoing orders.




	 	 	 	 	 
	 	 	
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