Document:

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.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    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.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    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
	 	 

    

    

     

     

    
      3first security 10qsb 93005 exhibit 10-8

    

      EXHIBIT
        10.8

      

      

        [Missing
          Graphic Reference]

      

      

      

      

      

      

      

      

      MASTER
        RESOURCE MANAGEMENT SERVICES AGREEMENT

      

      between

      

      Precision
        Computer Systems, Inc.

      4501
        South Technology Drive

      Sioux
        Falls, SD 57106-4213

      

      and

      

      

      First
        Security Bank of Lexington, Inc.

      318
        East
        Main Street

      Lexington,
        KY 40507

      

      

      

      

      

      

      

      Date:
        May
        27, 2005

      

      

      

      

      

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      THIS
        MASTER RESOURCE MANAGEMENT SERVICES AGREEMENT dated as of May 27, 2005
        ("Agreement") between Precision Computer Systems, Inc., a South Dakota
        corporation ("PCS"), and First Security Bank of Lexington, Inc., a Kentucky
        banking corporation ("Customer").

      

      PCS
        and
        Customer hereby agree as follows:

      

      1.
        Term.
        The
        term of this Agreement shall be as set forth at the end of this Agreement.
        This
        Agreement shall be effective on the day services are first provided to Customer
        by PCS ("Effective Date"). Effective Date shall be defined as the date that
        the
        Client’s Deposit and Loan accounts are updated on the PCS System. In the event
        Customer elects to terminate this Agreement under circumstances not involving
        a
        termination of the License Agreement, then, upon payment to PCS by Customer
        of a
        License Conversion Fee, as reasonably determined by PCS, PCS shall deliver
        to
        Customer the PCS software required for Customer to conduct its processing
        on a
        CPU owned or leased by Customer and of a size specified in the License
        Agreement.

      

      2.
        Services.
        (a)
Services
        Generally.
        PCS,
        itself and through its affiliates, agrees to provide Customer, and Customer
        agrees to obtain from PCS, services ("Services") and products ("Products")
        (collectively, "PCS Services") described in the attached Exhibits and
        Attachments.

      

      The
        Exhibits and Attachments hereto set forth specific terms and conditions
        applicable to the Services and/or Products, and, where applicable, the PCS
        affiliate so performing. Customer may select additional services and products
        from time to time by incorporating an appropriate Exhibit or Attachment to
        this
        Agreement.

      

      (b)
        Implementation
        Services.
        PCS
        will provide services (i) to convert Customer's existing applicable data
        and/or
        information to the PCS Services; and/or (ii) to implement the PCS Services.
        These activities are referred to as "Implementation Services". Customer agrees
        to cooperate with PCS in connection with PCS's provision of Implementation
        Services and to provide all necessary information and assistance to facilitate
        the conversion and/or implementation. Customer is responsible for all reasonable
        out-of-pocket expenses associated with Implementation Services. PCS will
        provide
        Implementation Services as required in connection with PCS
        Services.

      

      (c)
        Training
        Services.
        PCS
        shall provide training, training aids, user manuals, and other documentation
        for
        Customer's use as PCS finds necessary in the exercise of its reasonable judgment
        to enable Customer personnel to become familiar with PCS Services. If requested
        by Customer, classroom training in the use and operation of PCS Services
        will be
        provided at a training facility designated by PCS. All such training aids
        and
        manuals remain PCS's property. Customer will be responsible to its own employees
        for salaries and any costs of travel, room and board for such
        training.

      

      (d)
        Third
        Party Services and Products.
        Customer and PCS acknowledge that certain existing and future products and
        services which are required for the performance of the existing and future
        services are being or may be provided by Third Parties who will contract
        directly with Customer. PCS shall have no liability to Customer for products,
        services or information supplied by such Third Parties in conjunction with
        the
        services.

      

      (e)
        Hours
        of Operation.
        PCS
        shall make the services available to Customer between the hours of 7:00 a.m.
        and
        7:00 p.m. CST on each week day (Monday - Friday) in which national or state
        banks are required to be open for business at Customer’s place of business. In
        addition, PCS shall make the services available to Customer between the hours
        of
        7:00 a.m. and 4:00 p.m. CST on Saturdays in which national or state banks
        are
        traditionally open for business at Customer’s place of business. 

      

      3.
        Fees
        for PCS Services.
        (a)
General.
        Customer agrees to pay PCS:

      

      (i)
        actual fees for PCS Services for the previous month as specified in the Exhibits
        and Attachments;

      (ii)
        reasonable out-of-pocket charges for the month payable by PCS for the account
        of
        Customer; and

      (iii)
        Taxes (as defined below) thereon (collectively, "Fees").

      

      Fees
        may
        be increased from time to time as set forth in the Exhibits and Attachments.
        Upon notification to and acceptance by Customer pursuant to Section 16(f)
        herein, PCS may increase its fees in excess of amounts listed in the Exhibits
        and Attachments in the event that PCS implements major system enhancements
        to
        comply with changes in law, government regulation, or industry
        practices.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)
        Additional
        Charges.
        Fees
        for out-of-pocket expenses, such as telephone, microfiche, courier, and other
        charges incurred by PCS for goods or services obtained by PCS on Customer's
        behalf, shall be billed to Customer at cost. Such out-of-pocket expenses
        may be
        changed from time to time upon notification of a fee change from an unaffiliated
        vendor/provider (in an amount equal to the subject fee change). The Fees
        do not
        include, and Customer shall be responsible for, furnishing transportation
        or
        transmission of information between PCS's resource management division(s)
        and
        Customer's site(s).

      

      (c)
        Taxes.
        PCS
        shall add to each invoice any sales, use, excise, value added, and like taxes
        and duties that are levied by any taxing authority relating to the PCS Services
        ("Taxes"). In no event shall "Taxes" include Federal, state or local taxes
        based
        upon PCS's net income.

      

      (d)
        Payment
        Terms.
        Fees
        are due and payable monthly upon receipt of invoice. In the event any amounts
        due remain unpaid beyond the 30th
        day
        after payment is due, Customer shall pay a late charge of 1.5% per month.
        Customer agrees that it shall neither make nor assert any right of deduction
        or
        set-off from Fees on invoices submitted by PCS for PCS Services.

      

      4.
        Access
        to PCS Services.
        (a)
Procedures.
        Each of
        PCS and Customer agrees to comply in all material respects with applicable
        regulatory requirements and procedures for use of Services established by
        PCS.

      

      (b)
        Changes.
        PCS
        continually reviews and modifies PCS systems used in the delivery of Services
        (the "PCS System") to improve service and comply with government regulations,
        if
        any, applicable to the data and information utilized in providing Services.
        PCS
        reserves the right to make changes (in the exercise of its reasonable judgment
        in light of said governmental regulations) in Services, including but not
        limited to operating procedures, type of equipment or software resident at,
        and
        the location of PCS's facility. PCS will notify Customer of any material
        change
        that affects Customer's normal operating procedures, reporting, or service
        costs
        prior to implementation of such change.

      

      (c)
        Communications
        Lines.
        PCS
        shall order the installation of appropriate communication lines and equipment
        to
        facilitate Customer's access to Services. Customer
        understands and agrees to pay charges relating to the installation and use
        of
        such lines (if any) and equipment as set forth in the Exhibits and Attachments,
        currently
        Attachment 4, subject to changes by the provider.

      

      (d)
        Work
        Stations and Related Equipment.
        Customer shall obtain necessary and sufficient work stations and other
        equipment, approved by PCS and compatible with the PCS System, to transmit
        and
        receive data and information between Customer's location(s), PCS's facilities,
        and/or other necessary location(s). PCS and Customer may mutually agree to
        change the type(s) of work station and equipment used by Customer.

      

      5.
        Customer
        Obligations.
        (a)
Input.
        Customer shall be solely responsible for the input, transmission, or delivery
        to
        and from PCS of all information and data required by PCS to perform Services
        unless Customer has retained PCS to handle such responsibilities, as
        specifically set forth in the Exhibits and Attachments. The information and
        data
        shall be provided in a format and manner approved by PCS. Customer will provide
        at its own expense or procure from PCS all equipment, computer software,
        communication lines (currently Attachment 4, subject to changes by the
        provider) and
        interface devices required to access the PCS System. If Customer has elected
        to
        provide such items itself, PCS shall provide Customer with a list of compatible
        equipment and software. Customer agrees to pay PCS's standard fee for
        recertification of the PCS System resulting therefrom.

      

      (b)
        Customer
        Personnel.
        Customer shall designate appropriate Customer personnel for training in the
        use
        of the PCS System, shall supply PCS with reasonable access to Customer's
        site
        during normal business hours for Implementation Services and shall cooperate
        with PCS personnel in their performance of Services.

      

      (c)
        Use
        of
        PCS System.
        Customer shall (i) comply with any operating instructions on the use of the
        PCS
        System provided by PCS; (ii) review all reports furnished by PCS for accuracy;
        and (iii) work with PCS to reconcile any out of balance conditions or
        discrepancies. Customer shall determine and be responsible for the authenticity
        and accuracy of all information and data submitted to PCS.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (d) Contact
        Representative.
        Customer will designate a qualified individual (the “Representative”) who will
        handle all relations with PCS. PCS will train the Representative in the use
        of
        PCS’s data processing system(s). Customer shall pay such fees for training as
        are set forth in this Agreement and shall reimburse PCS for all reasonable
        costs
        incurred by PCS in connection with such training.

      

      (e)  Obligation
        to Manage Accounts.
        If
        applicable, Customer agrees that it will periodically monitor its closed
        accounts and take all reasonable steps in order to ensure that closed accounts
        are deleted from the system as appropriate. In the event the number of
        Customer’s closed accounts ever exceeds the number of open accounts, PCS will
        impose additional charges for the excess closed accounts.

      

      6.
        Ownership
        and Confidentiality.
        (a)
Definition.

      

      (i)
        Customer
        Information.
        "Customer Information" means: (A) confidential plans, customer lists,
        information, and other proprietary material of Customer that is marked with
        a
        restrictive legend, or if not so marked with such legend or is disclosed
        orally,
        is identified as confidential and proprietary at the time of disclosure (and
        written confirmation thereof is promptly provided to PCS); and (B) any
        information and data concerning the business and financial records of Customer's
        customers prepared by or for PCS, or used in any way by PCS in connection
        with
        the provision of PCS Services (whether or not any such information is marked
        with a restrictive legend).

      

      (ii) PCS
        Information.
        "PCS
        Information" means: (A) confidential plans, information, research, development,
        trade secrets, business affairs (including that of any PCS Customer, supplier,
        or affiliate), and other proprietary material of PCS that is marked with
        a
        restrictive legend, or if not so marked with such legend or is disclosed
        orally,
        is identified as confidential and proprietary at the time of disclosure (and
        written confirmation thereof is promptly provided to Customer); and (B) PCS's
        proprietary computer programs, including custom software modifications, software
        documentation and training aids, and all data, code, techniques, algorithms,
        methods, logic, architecture, and designs embodied or incorporated therein
        (whether or not any such information is marked with a restrictive
        legend).

      

      (iii)
        Information.
        "Information" means Customer Information and PCS Information. No obligation
        of
        confidentiality applies to any Information that the receiving party
        ("Recipient") (A) already possesses without obligation of confidentiality;
        (B)
        develops independently; or (C) rightfully receives without obligation of
        confidentiality from a third party. No obligation of confidentiality applies
        to
        any Information that is, or becomes, publicly available without breach of
        this
        Agreement.

      

      (b)
        Obligations.
        Subject
        to Section 6(a)(iii) above, Recipient agrees to hold as confidential all
        Information it receives from the disclosing party ("Discloser"). All Information
        shall remain the property of Discloser or its suppliers and licensors.
        Information will be returned to Discloser at the termination or expiration
        of
        this Agreement. PCS specifically agrees that it will not use any non-public
        personal information about Customer's customers in any manner prohibited
        by
        Title V of the Gramm-Leach-Bliley Act. Recipient will use the same care and
        discretion to avoid disclosure of Information as it uses with its own similar
        information that it does not wish disclosed, but in no event less than a
        reasonable standard of care. Recipient may only use Information in accordance
        with the purpose of this Agreement. Recipient may disclose Information to
        (i)
        employees and employees of affiliates who have a need to know and (ii) any
        other
        party with Discloser's written consent. Before disclosure to any of the above
        parties, Recipient will have a written agreement with such party sufficient
        to
        require that party to treat Information in accordance with this Agreement.
        Recipient may disclose Information to the extent required by law. However,
        Recipient agrees to give Discloser prompt notice so that it may seek a
        protective order. The provisions of this sub-section survive any termination
        or
        expiration of this Agreement.

      

      (c)
        Residuals.
        Nothing
        contained in this Agreement shall restrict Recipient from the use of any
        ideas,
        concepts, know-how, or techniques contained in Information that are related
        to
        Recipient's business activities ("Residuals"), provided that in so doing,
        Recipient does not breach its obligations under this Section. However, this
        does
        not give Recipient the right to disclose the Residuals except as set forth
        elsewhere in this Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (d)
        PCS
        System.
        The PCS
        System contains information and computer software that are proprietary and
        confidential information of PCS, its suppliers, and licensors. Customer agrees
        not to attempt to circumvent the devices employed by PCS to prevent unauthorized
        access thereto, including, but not limited to, alterations, decompiling,
        disassembling, modifications, and reverse engineering thereof.

      

      (e)
        Information
        Security.
        PCS
        shall implement and maintain appropriate measures designed to meet the
        objectives of the guidelines establishing standards for safeguarding non-public
        Customer client information as adopted by any federal regulatory agencies
        having
        jurisdiction over Customer's affairs.

      

      (f)
        Confidentiality
        of this Agreement.
        PCS and
        Customer agree to keep confidential the prices, terms and conditions of this
        Agreement, without disclosure to third parties.

      

      7.
        Regulatory
        Agencies, Regulations and Legal Requirements.
        (a)
Customer
        Files.
        Records
        maintained and produced for Customer ("Customer Files") may be subject to
        examination by such Federal, State, or other governmental regulatory agencies
        as
        may have jurisdiction over Customer's business to the same extent as such
        records would be subject if maintained by Customer on its own premises. Customer
        agrees that PCS is authorized to give all reports, summaries, or information
        contained in or derived from the data or information in PCS's possession
        relating to Customer when formally requested to do so by an authorized
        regulatory or government agency. Customer will pay any reasonable fees incurred
        for producing such information. PCS agrees to notify Customer promptly of
        any
        such regulatory request if authorized to do so.

      

      (b)
        Compliance
        with Regulatory Requirements.
        Customer agrees to comply in all material respects with applicable regulatory
        and legal requirements, including without limitation:

      

      (i)
        submitting a copy of this Agreement to the appropriate regulatory agencies
        prior
        to the date Services commence;

      (ii)
        providing adequate notice to the appropriate regulatory agencies of the
        termination of this Agreement or any material changes in Services;

      (iii)
        retaining records of its accounts as required by regulatory
        authorities;

      (iv)
        obtaining and maintaining, at its own expense, any Fidelity Bond required
        by any
        regulatory or governmental agency; and

      (v)
        maintaining, at its own expense, such casualty or business interruption
        insurance coverage for loss of records from fire, disaster, or other causes,
        and
        taking such precautions regarding the same, as may be required by regulatory
        authorities.

      

      8.
        Warranties.
        (a)
PCS
        Warranties.
        PCS
        represents and warrants that:

      

      (i)(A)
        Services will conform to the specifications set forth in the Exhibits and
        Attachments; (B) PCS will perform Customer's work accurately and in a
        workmanlike manner in accord with industry standards provided that Customer
        supplies accurate data and information, and follows in all material respects
        the
        procedures described in all PCS documentation, notices, and advisorys; (C)
        PCS
        personnel will exercise due care in provision of Services; and (D) the PCS
        System will comply in all material respects with all applicable Federal
        regulations governing Services. In the event of an error or other default
        caused
        by PCS personnel, systems, or equipment, PCS shall correct the data or
        information and/or reprocess the affected item or report at no additional
        cost
        to Customer. Customer agrees to supply PCS with a written request for correction
        of the error within three business days after Customer's receipt of the error
        work containing the error. Work reprocessed due to errors in data supplied
        by
        Customer, on Customer's behalf by a third party, or by Customer's failure
        to
        follow procedures set forth by PCS shall be billed to Customer at PCS's then
        current time and material rates; and (ii) it owns or has a license to furnish
        all software comprising the PCS System. PCS shall indemnify Customer and
        hold it
        harmless against any claim or action that alleges that the PCS System use
        infringes a United States patent, copyright, or other proprietary right of
        a
        third party. Customer agrees to notify PCS promptly of any such claim and
        grants
        PCS the sole right to control the defense and disposition of all such claims.
        Customer shall provide PCS with reasonable cooperation and assistance in
        the
        defense of any such claim.

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      THE
        WARRANTIES STATED HEREIN ARE LIMITED WARRANTIES AND ARE THE ONLY WARRANTIES
        MADE
        BY PCS. CUSTOMER AGREES TO ASSUME THE ENTIRE RISK OF USING THE SERVICES.
        PCS
        DOES NOT MAKE, AND CUSTOMER HEREBY EXPRESSLY WAIVES, ALL OTHER WARRANTIES,
        INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
        THE STATED EXPRESS WARRANTIES ARE IN LIEU OF ALL LIABILITIES OR OBLIGATIONS
        OF
        PCS ARISING OUT OF OR IN CONNECTION WITH THE DELIVERY, USE, OR PERFORMANCE
        OF
        PCS SERVICES.

      (b)
        Customer
        Warranties.
        Customer represents and warrants that: (i) no contractual obligations exist
        that
        would prevent Customer from entering into this Agreement; (ii) it has complied
        in all material respects with all applicable regulatory requirements in
        connection with entering into this Agreement; and (iii) it has requisite
        authority to execute, deliver, and perform this Agreement. Customer shall
        indemnify and hold harmless PCS, its officers, directors, employees, and
        affiliates against any claims or actions arising out of the use by Customer
        of
        the PCS System in a manner other than that provided in this Agreement; and
        any
        and all claims by third parties through Customer arising out of the performance
        and non-performance of PCS Services by PCS..

      

      9.
        Limitation
        of Liability.
        (a)
General
        IN NO
        EVENT SHALL PCS BE LIABLE FOR LOSS OF GOODWILL, OR FOR SPECIAL, INDIRECT,
        INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING FROM CUSTOMER'S USE OF PCS
        SERVICES, OR PCS'S SUPPLY OF EQUIPMENT OR SOFTWARE, REGARDLESS OF WHETHER
        SUCH
        CLAIM ARISES IN TORT OR IN CONTRACT. CUSTOMER MAY NOT ASSERT ANY CLAIM AGAINST
        PCS MORE THAN 2 YEARS AFTER SUCH CLAIM ACCRUED. PCS'S AGGREGATE LIABILITY
        FOR
        ANY PARTICULAR CAUSE OF ACTION RELATING TO THIS AGREEMENT SHALL BE LIMITED
        TO
        THE TOTAL FEES PAYABLE BY CUSTOMER TO PCS FOR THE PCS SERVICE RESULTING IN
        SUCH
        LIABILITY IN THE 2 MONTH PERIOD PRECEDING THE DATE THE CLAIM ACCRUED. PCS'S
        AGGREGATE LIABILITY FOR A DEFAULT RELATING TO THIRD PARTY EQUIPMENT OR THIRD
        PARTY SOFTWARE, OBTAINED FROM OR THROUGH PCS, SHALL BE LIMITED TO THE AMOUNT
        PAID BY CUSTOMER TO PCS FOR SUCH THIRD PARTY EQUIPMENT OR THIRD PARTY SOFTWARE.
        

      

      (b)
        Lost
        Records.
        If
        Customer’s records or other data submitted for processing are lost or damaged as
        a result of any failure by PCS, its employees, or agents to exercise reasonable
        care to prevent such loss or damage, PCS’s liability on account of such loss or
        damage shall not exceed the reasonable cost of reproducing such records or
        data
        from exact duplicates thereof in Customer’s possession.

      (c) Backup
        Records.
        PCS
        shall maintain back-up records and media reasonably necessary to reconstruct
        at
        least three (3) days of Customer’s data files. Such back-up records shall be
        maintained in a fireproof vault located off premises.

      

      10.
        Disaster
        Recovery.
        (a)
General.
        PCS
        maintains a disaster recovery plan ("Disaster Recovery Plan") for each Service.
        A "Disaster" shall mean any unplanned interruption of the operations of or
        inaccessibility to PCS's facility in which PCS, using reasonable judgment,
        requires relocation of processing to a recovery location. PCS shall notify
        Customer as soon as possible after PCS deems a service outage to be a Disaster.
        PCS shall move the processing of Customer's standard services to a recovery
        location as expeditiously as possible and shall coordinate the cut-over to
        back-up telecommunication facilities with the appropriate carriers. Customer
        shall maintain adequate records of all transactions during the period of
        service
        interruption and shall have personnel available to assist PCS in implementing
        the switchover to the recovery location. During a Disaster, optional or
        on-request services shall be provided by PCS only to the extent adequate
        capacity exists at the recovery location and only after stabilizing the
        provision of base services.

      

      (b)
        Communications.
        PCS
        shall work with Customer to establish a plan for alternative communications
        in
        the event of a Disaster.

      

      (c)
        Disaster
        Recovery Test.
        PCS
        shall test the Disaster Recovery Plan on at least an annual basis. Customer
        agrees to participate in and assist PCS with such test, if requested by PCS.
        Upon Customer's request, test results will be made available to Customer's
        management, regulators, auditors, and insurance underwriters.

      

      (d)
        Customer
        Plans.
        PCS
        agrees to release information necessary to allow Customer's development of
        a
        disaster recovery plan that operates in concert with the Disaster Recovery
        Plan.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (e)
        No
        Warranty.
        Customer understands and agrees that the Disaster Recovery Plan is designed
        to
        minimize, but not eliminate, risks associated with a Disaster affecting PCS's
        facilities. PCS does not warrant that PCS Services will be uninterrupted
        or
        error free in the event of a Disaster; no performance standards shall be
        applicable for the duration of a Disaster. Customer maintains responsibility
        for
        adopting a disaster recovery plan relating to disasters affecting Customer's
        facilities and for securing business interruption insurance or other insurance
        necessary for Customer's protection.

      

      11.
        Termination.
        (a)
Material
        Breach.
        Except
        as provided elsewhere in this Section 11, either party may terminate this
        Agreement in the event of a material breach by the other party not cured
        within
        90 days following written notice stating, with particularity and in reasonable
        detail, the nature of the claimed breach.

      

      (b)
        Failure
        to Pay.
        In the
        event any invoice remains unpaid by Customer 45
        days
        after due, or Customer deconverts any material amount of data or information
        from the PCS System without prior written consent of PCS, PCS, at its sole
        option, may terminate this Agreement and/or Customer's access to and use
        of PCS
        Services. Any invoice submitted by PCS shall be deemed correct unless Customer
        provides written notice to PCS within 15 days of Customer’s receipt of any such
        invoice date specifying the nature of the disagreement.

      

      (c)
        Remedies.
        Remedies contained in this Section 11 are cumulative and are in addition
        to the
        other rights and remedies available to any party under this Agreement, by
        law or
        otherwise.

      

      (d)
        Defaults.
        If:

      

      (i)
        Customer defaults in the payment of any sum of money due in Section
        11(b);

      (ii)
        either party breaches this Agreement in any material respect or otherwise
        defaults in any material respect in the performance of any of its obligations
        hereunder; or

      (iii)
        either party commits an act of bankruptcy or becomes the subject of any
        proceeding under the Bankruptcy Code or becomes insolvent or if any substantial
        part of its property becomes subject to any levy, seizure, assignment,
        application, or sale for or by any creditor or governmental agency;

      

      then,
        in
        any such event, the non-defaulting party may, upon written notice, terminate
        this Agreement. In the event such terminating party is PCS, PCS shall be
        entitled to recover from Customer as liquidated damages an amount equal to
        the
        present value of all payments remaining to be made hereunder for the remainder
        of the term of this Agreement. For purposes of the preceding sentence, present
        value shall be computed using the "prime" rate (as published in The Wall
        Street Journal)
        in
        effect at the date of termination and "all payments remaining to be made"
        shall
        be calculated based on the average bills for the 3 months immediately preceding
        the date of termination. Each party agrees to reimburse the non-defaulting
        party
        for any expenses it may incur, including reasonable attorneys' fees, in taking
        any of the foregoing actions.

      

      (e)
        Convenience.
        Customer may terminate this Agreement by paying a termination fee based on
        the
        remaining unused portion of the term of this Agreement, such fee to be equal
        to
        eighty percent (80%) of the amount determined by multiplying Customer's average
        monthly processing fees incurred during the previous six (6) months billings,
        multiplied by the number of months remaining in the term of this Agreement,
        plus
        third party costs existing on PCS's books on the date of termination. Customer
        understands and agrees that PCS losses incurred as a result of early termination
        of the Agreement would be difficult or impossible to calculate as of the
        effective date of termination since they will vary based on, among other
        things,
        the number of Customers using the PCS System on the date the Agreement
        terminates. Accordingly, the amount set forth in the first sentence of this
        subsection represents Customer's agreement to pay and PCS's agreement to
        accept
        as liquidated damages (and not as a penalty) such amount for any such Customer
        termination. Notwithstanding the foregoing if Client elects to terminate
        this
        Agreement prior to the Effective Date, Client agrees to pay a fee of $50,000
        and
        all costs and fees incurred by PCS while performing Implementation Services
        as
        defined in Attachment 3.

      

      (f)
        Return
        of Data Files.
        Upon
        expiration or termination of this Agreement, PCS shall furnish to Customer
        such
        copies of Customer Files as Customer may request in a PCS standard format
        along
        with such information and assistance as is reasonable and customary to enable
        Customer to deconvert from the PCS System, provided,
        however,
        that
        Customer consents and agrees and authorizes PCS to retain Customer Files
        until
        (i) PCS is paid in full for (A) all Services provided through the date such
        Customer Files are returned to Customer; and (B) any and all other amounts
        that
        are due or will become due under this Agreement; (ii) PCS is paid its then
        standard rates for the services necessary to return such Customer Files;
        (iii)
        if this Agreement is being terminated, PCS is paid any applicable termination
        fee pursuant to subsection (d) or (e) above; and (iv) Customer has returned
        to
        PCS all PCS Information. Unless directed by Customer in writing to the contrary,
        PCS shall be permitted to destroy Customer Files any time after 30 days from
        the
        final use of Customer Files for processing.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (g)
        Miscellaneous.
        Customer understands and agrees that Customer is responsible for the
        de-installation and return shipping of any PCS-owned equipment located on
        Customer's premises.

      

      12.
        Dispute
        Resolution.
        (a)
General.
        Except
        with respect to disputes arising from a misappropriation or misuse of either
        party's proprietary rights, any dispute or controversy arising out of this
        Agreement, or its interpretation, shall be submitted to and resolved exclusively
        by arbitration under the rules then prevailing of the American Arbitration
        Association, upon written notice of demand for arbitration by the party seeking
        arbitration, setting forth the specifics of the matter in controversy or
        the
        claim being made. The arbitration shall be heard before an arbitrator mutually
        agreeable to the parties; provided, that if the parties cannot agree on the
        choice of arbitrator within 10 days after the first party seeking arbitration
        has given written notice, then the arbitration shall be heard by 3 arbitrators,
        1 chosen by each party, and the third chosen by those 2 arbitrators. The
        arbitrators will be selected from a panel of persons having experience with
        and
        knowledge of information technology and at least 1 of the arbitrators selected
        will be an attorney. Discovery shall not be permitted. A hearing on the merits
        of all claims for which arbitration is sought by either party shall be commenced
        not later than 60 days from the date demand for arbitration is made by the
        first
        party seeking arbitration. The arbitrator(s) must render a decision within
        10
        days after the conclusion of such hearing. Any award in such arbitration
        shall
        be final and binding upon the parties and the judgment thereon may be entered
        in
        any court of competent jurisdiction.

      

      (b)
        Applicable
        Law.
        The
        arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
        §§1-16 and the Federal Rules of Evidence. The arbitrators shall apply the
        substantive law of the State of South Dakota, without reference to provisions
        relating to conflict of laws. The arbitrators shall not have the power to
        alter,
        modify, amend, add to, or subtract from any term or provision of this Agreement,
        nor to rule upon or grant any extension, renewal, or continuance of this
        Agreement. The arbitrators shall have the authority to grant any legal remedy
        available had the parties submitted the dispute to a judicial
        proceeding.

      

      (c)
        Situs.
        If
        arbitration is required to resolve any disputes between the parties, the
        proceedings to resolve such dispute shall be held in Sioux Falls, South Dakota
        if Customer is the party seeking arbitration, while any such proceeding to
        resolve a dispute shall be held in Lexington, Kentucky if PCS is the party
        seeking arbitration.

      

      13.
        Network
        and Data Security, and Record Retention.
        PCS
        will take commercially reasonable and responsible steps to maintain security
        in
        a manner consistent with industry standards. However, Customer recognizes
        that
        there can be no guarantee of absolute security of information transmitted
        over
        any commercial medium. PCS will continue to update its security procedures
        as
        technology and security threats evolve to provide commercially reasonable
        security capabilities. PCS will maintain appropriate systems to log and preserve
        an audit trail for all material events occurring as part of our Intrusion
        Detection Policy. Records will be retained for a minimum of one year or as
        otherwise agreed. Customer will take reasonable steps to maintain security
        of
        its own computer systems. Such steps are at Customer’s expense and will include
        implementation of reasonable security measures agreed upon by the parties.
        PCS
        provides for monitoring, penetration and intrusion testing of its systems.
        PCS
        shall commit to Customer that it will perform periodic security audits and
        provide the audit results at Customer request. PCS shall disclose to Customer
        any breaches in security, which result in unauthorized intrusions to PCS’s
        systems directly affecting the Customer’s information, and the corrective action
        PCS has taken to respond to the intrusion or breach in security. PCS will
        be
        responsible for data and other information of Customer from the time that
        such
        is received by PCS at its facilities until it is, in the case of data, processed
        and files based thereon are transmitted back to
        Customer and, in the case of other information, released for pickup at PCS’s
        facility to a courier or other representative designated by Customer. Customer
        will have access to any and all Customer records
        at any time they are in the possession of PCS. 

      

      14.
        Insurance.
        PCS
        shall maintain appropriate property and casualty insurance coverage, as it
        determines in the exercise of its reasonable judgment, for all of its facility
        personnel and insurance coverage for loss from fire, disaster or other causes
        contributing to interruption of normal services, including, without limitation,
        replacement of hardware, reconstruction of data file media, including related
        processing costs, additional expenses incurred to continue operation, and
        business interruption from suspension of PCS’s operations due to physical loss
        of equipment. Nothing in this Agreement shall be construed as to permit Customer
        to receive any of such proceeds, or to be named as an additional loss payee
        under any insurance policy.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      15.
        Audit.
        PCS
        shall engage a qualified third party to conduct an annual “Third Party Review”
        of its operations (including its Disaster Recovery Plan) in accordance with
        AICPA SAS 70 (Type 2) standards. In consideration of the Fees paid by Customer,
        PCS will provide one copy of the Third Party Review at no additional charge.
        Upon request, a copy of such audit shall be provided promptly upon its
        completion to Customer. Customer (or a representative of Customer) shall
        have
        the right to perform additional audit procedures on PCS. Customer assumes
        responsibility for all costs associated with the performance of Customer’s
        additional audit procedures, including expenses incurred by PCS related to
        such
        procedures.

      

      16.
        General.
        (a)
Binding
        Agreement.
        This
        Agreement is binding upon the parties and their respective successors and
        permitted assigns. Neither this Agreement nor any interest may be sold,
        assigned, transferred, pledged, or otherwise disposed of by Customer, whether
        pursuant to change of control or otherwise, without PCS’s prior written
        consent (which
        consent may not be unreasonably withheld, conditioned or delayed). Customer
        agrees that PCS may subcontract any services to be performed hereunder. Any
        such
        subcontractors shall be required to comply with all applicable terms and
        conditions.

      

      (b)
        Entire
        Agreement.
        This
        Agreement, including its Exhibits and Attachments, which are expressly
        incorporated herein by reference, constitutes the complete and exclusive
        statement of the agreement between the parties as to the subject matter hereof
        and supersedes all previous agreements with respect thereto, including oral
        and
        written proposals. Modifications of this Agreement must be in writing and
        signed
        by duly authorized representatives of the parties. Each party hereby
        acknowledges that it has not entered into this Agreement in reliance upon
        any
        representation made by the other party not embodied herein. In the event
        any of
        the provisions of any Exhibit or Attachment are in conflict with any of the
        provisions of this Agreement, the terms and provisions of this Agreement
        shall
        control unless the Exhibit or Attachment in question expressly provides that
        its
        terms and provisions shall control.

      

      (c)
        Severability.
        If any
        provision of this Agreement is held to be unenforceable or invalid, the other
        provisions shall continue in full force and effect.

      

      (d)
        Governing
        Law.
        This
        Agreement will be governed by the substantive laws of the State of South
        Dakota,
        without reference to provisions relating to conflict of laws. The United
        Nations
        Convention on Contracts for the International Sale of Goods shall not apply
        to
        this Agreement.

      

      (e)
        Force
        Majeure.
        Neither
        party shall be responsible for delays or failures in performance resulting
        from
        acts reasonably beyond the control of that party.

      

      (f)
        Notices.
        Any
        written notice required or permitted to be given hereunder shall be given
        by:
        (i) Registered or Certified Mail, Return Receipt Requested, postage prepaid;
        (ii) confirmed facsimile; or (iii) nationally recognized courier service
        to the
        other party at the addresses listed on the cover page or to such other address
        or person as a party may designate in writing. All such notices shall be
        effective upon receipt.

      

      (g)
        No
        Waiver.
        The
        failure of either party to insist on strict performance of any of the provisions
        hereunder shall not be construed as the waiver of any subsequent default
        of a
        similar nature.

      

      (h)
        Financial
        Statements.
        PCS
        shall provide Customer and the appropriate regulatory agencies so requiring
        a
        copy of the relevant audited consolidated financial statements.

      

      (i)
        Prevailing
        Party.
        The
        prevailing party in any arbitration, suit, or action brought against the
        other
        party to enforce the terms of this Agreement or any rights or obligations
        hereunder, shall be entitled to receive its reasonable costs, expenses, and
        attorneys' fees of bringing such arbitration, suit, or action.

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (j)
        Survival.
        All
        rights and obligations of the parties under this Agreement that, by their
        nature, do not terminate with the expiration or termination of this Agreement
        shall survive the expiration or termination of this Agreement.

      

      (k)
        Exclusivity.
        Customer agrees that during the term of this Agreement PCS shall be the sole
        and
        exclusive provider of the services that are the subject matter of this
        Agreement. For purposes of the foregoing, the term "Customer" shall include
        Customer affiliates. During the term of this Agreement, Customer agrees not
        to
        enter into an agreement with any other entity to provide these services (or
        similar services) without PCS's prior written consent. If Customer acquires
        another entity, the exclusivity provided to PCS hereunder shall take effect
        with
        respect to such acquired entity as soon as practicable after the expiration
        (for
        whatever reason, including the natural expiration) of the term of such acquired
        entity's previously existing arrangement for these services. If Customer
        is
        acquired by another entity, the exclusivity provided to PCS hereunder shall
        apply with respect to the level or volume of these services provided immediately
        prior to the signing of the definitive acquisition agreement relating to
        such
        acquisition and shall continue with respect to the level or volume of these
        services until any termination or expiration of this Agreement.

      

      (l)
        Recruitment
        of Employees.
        Customer agrees not to hire PCS's employees during the term of this Agreement
        and for a period of 6 months after any termination or expiration thereof,
        except
        with PCS's prior written consent.

      

      (m)
        Publicity.
        Customer and PCS shall have the right to make general references about each
        other publicly and the type of services being provided hereunder to third
        parties, such as auditors, regulators, financial analysts, and prospective
        customers and Customers. The parties shall mutually agree on a press release
        relating to the execution of this Agreement. In conjunction with this, the
        party
        initiating such release shall give the other party a reasonable opportunity
        to
        review and comment on the content thereof prior to its release.

      
        
          

        

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Term
        of
        this Agreement - 60
        months

      

      This
        Agreement consists of the products or services described on the forms listed
        and
        checked below:

      
        
          

        

      

      
        	
                EXHIBIT
                  OR ATTACHMENT

              	
                FEES
                  AND CHARGES

              
	 	 
	
                1:
                  Attachment
                  1

              	
                $840.00

              
	
                2:
                  Attachment
                  2

              	
                $11,676.55
                  per month

              
	
                3:
                  Attachment
                  3

              	
                $58,750.00
                  with $630.00 per year ALF

              
	
                4:
                  Attachment
                  4

              	
                $4,030.75
                  per month (Estimated)

              
	
                5:
                  Exhibit
                  B

              	
                See
                  Attached Schedule

              

      

      

      

      Payment
        terms:

      

      Customer
        agrees to pay a fee at the time of execution of this Agreement - $14,897.50.
        (25% of
        Attachments 1and 3, with the balance to be paid upon conversion). 

      

      Monthly
        Charges will be reviewed annually (“Annual Review”) and may be adjusted to PCS’s
        then current Monthly Charges based on the asset size of Customer. If Customer’s
        asset size changes during the Term of this Agreement, and such change is
        a
        result of a merger or acquisition by Customer, the Monthly Charge shall be
        adjusted as of the month of such merger or acquisition. If Customer’s asset size
        changes during the Term of this Agreement solely as a result of growth of
        Customer’s business, the Monthly Charge shall be adjusted as of the Annual
        Review Date.

      

      IN
        WITNESS WHEREOF, the parties have caused this Agreement to be executed by
        their
        duly authorized representatives as of the date indicated below.

      

      
        
          	
                   For
                    Customer:

                   

                  First Security Bank of Lexington,
                    Inc.

                   [Name of Customer]

                   

                   

                	 	 	
                   For
                    PCS:

                   

                  Precision Computer Systems,
                    Inc.

                
	/s/ R.
                  Douglas Hutcherson	 	 	/s/ 
	
                  

                	 	 	
                  

                
	
                  Name:
                    R. Douglas
                    Hutcherson                           
                    
Title:  President &
                    CEO                                         
                    

                  Date: June 22,
                    2005                                                  
                    

                	 	 	Name:
                  ______________________________
Title:
                  _______________________________
Date:
                  _______________________________

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