first security 10qsb 93005 exhibit 10-7


     

    Exhibit
      10.7

    


    


    
      	
              OUTSOURCE

              CONTRACT

            


    

    


    


    BSC,
      INC

    


    


    


    AND

    


    


    


    FIRST
      SECURITY BANK

    


    


    


    LEXINGTON,
      KENTUCKY

    


    


    


    


    


    


    


    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    CONTRACT

    


    This
      agreement made and entered into this 14th
      day of
      November 2005, by and between BSC, Inc., of 450 Old East Vine Street, Lexington,
      Kentucky, hereinafter referred to as BSC, and First Security Bank of Lexington,
      KY, hereinafter referred to as First Security Bank.

    


    


    WITNESSETH:

    


    


    WHEREAS
      BSC is a company authorized to do business in the State of Kentucky, who
      provides operational outsourcing services for certain financial institutions
      and,

    


    WHEREAS
      First Security Bank desires to contract with BSC for the services as described
      herein, the parties agree and covenant as follows:

    


    1. DESCRIPTION
      OF SERVICE AND FEES

    


    BSC
      agrees to provide to First Security Bank the following services with attendant
      fees:

    
      	a)  	
              Items
                captured and imaged at 3 cents per
                item

            


    

    
      	b)  	
              Items
                encoded at 3 cents per item

            


    

    
      	c)  	
              Preparation
                of statements including the printing of statements with images of
                checks
                and deposit tickets. Stuffing of envelopes including statements and
                enclosures.

            


    

    
      	1)  	
              savings
                statements at 35 cents per
                statement

            


    

    
      	2)  	
              regular
                statements at 75 cents per
                statement

            


    

    
      	3)  	
              business
                statements at $1.35 per statement

            


    

    
      	4)  	
              analysis
                statements at 20 cents per
                statement

            


    

    
      	5)  	
              statement
                enclosures at 2 cents per enclosure

            


    

    
      	d)  	
              Document
                shredding service at the rate of $50.00 per
                month.

            


    

    
      	e)  	
              Stock
                paper (3-hole) for statement printing at the rate of $100.00 per
                month.

            


    

    
      	f)  	
              Perform
                extensive research activities. Once a research request is received
                by BSC,
                BSC shall have seven (7) days in which to respond to said request.
                Such
                research will be charged at $15.00 per hour and 25 cents per copy
                or
                fax.

            


    

    All
      fees
      to become due and payable by the 10th
      of the
      month following services rendered.

    



    
      
        
        

      

      
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    2. DOCUMENT
      SHREDDING

    BSC
      will
      retain cancelled documents for First Security Bank for a period of 90 days
      after
      the item captures date. BSC has contracted with a third party vendor to provide
      on site document shredding services. An audit of the shredding activity will
      be
      party of the annual Level 2 SAS-70 operations audit that is conducted by BSC’s
      independent third party CPA firm. BSC’s liability is covered under BSC’s
      standard business policy, which includes errors and omissions.

    


    3. COURIER
      SERVICE

    


    First
      Security Bank shall provide for all courier service.

    


    4. DURATION
      AND TERMINATION

    


    The
      period of this contract shall be for six (6) consecutive months beginning with
      the date of this contract.

    


    5. INSURANCE

    


    BSC’s
      outsource services 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 protection with a liability limit of $100,000.00


    


    6. PROPRIETARY
      NATURE OF DATA

    


    It
      is
      agreed that all data and information furnished to BSC by First Security Bank
      is
      to be regarded by the parties as confidential and is to be held in confidence
      and safekeeping by BSC for the sole use of First Security Bank. BSC may not
      sell, assign, or in any way divulge any lists of First Security Bank customers
      or business regarding any customer of First Security Bank.

    


    7. LIMITATION
      OF LIABILITY

    


    BSC
      agrees to use due care in processing Firs Security Bank work, which care shall
      conform to acceptable bank processing standards. BSC shall be responsible for
      correcting any errors which are due to machine malfunctions or human error,
      provided that such errors are reported to BSC within 60 days of receipt or
      information by First Security Bank.

    


        8. It
      is
      distinctly understood that BSC cannot assign or sublet the rights of this
      contract without the express written consent of First Security
      Bank.

    


        9. It
      is
      distinctly understood by and between the parties that BSC is an independent
      contractor for all purposes.

    



    
      
        
        

      

      
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    10. This
      contract, and written amendments thereto, contain all the terms and conditions
      agreed upon by the parties hereto, and no other agreement, 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
      directly or by reference. This contract covers and includes the entire agreement
      between the parties.

    


    11. This
      contract shall be governed by the laws of the Commonwealth of Kentucky both
      as
      to interpretation and performance.

    


    


    IN
      TESTIMONY WHEREOF, the parties hereto, individually and by their respective
      and
      duly authorized officers, have hereunto set their name.

    
      
        	 	 	 
	 	BSC,
                INC.
	 
 	 
 	 
 
	 	By:  	/s/ Michael
                A. Hunter
	 	
                

              
	 	 


      



     

    DATE:   
      8/19/05        

     

    
      	 	 	 
	 	FIRST
              SECURITY BANK
	 
 	 
 	 
 
	 	By:  	/s/ R.
              Douglas Hutcherson
	 	
              
President
&
              CEO
	 	 


    

    


     

     

    
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