Document:

Master Service Agreement dated January 21, 2003

  Confidential Treatment Requested
 EXHIBIT 10.38
 MASTER SERVICES AGREEMENT
 This Master Services Agreement (the “Agreement”), is entered into as of JANUARY 21, 2003, (“Effective Date”) by and between SOVEREIGN BANK a federally chartered thrift
institution with offices at 1130 Berkshire Blvd., Wyomissing, PA 19610, on its own behalf and for the benefit of its Affiliates (“Client”), and INTERCEPT, INC. a corporation organized
under the laws of Georgia with its principal business address at 3150 Holcomb Bridge Road, Suite 200, Norcross, GA 30071 on its own behalf and for the benefit of its Affiliates (“Vendor”). In consideration of the mutual agreements
contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
 1.         SERVICES
 1.1           General. This Agreement establishes the general terms under which Vendor will provide to Client certain services as provided in
Schedule 1.1 to this Agreement and any additional schedules for services that may later be agreed to in writing by the parties and attached hereto (“Services”). The conversion and implementation of the Services will be conducted according
to the then current version of the Project Plan, which the parties hereby mutually agree to perform, as it may exist from time to time. Unless otherwise indicated, defined terms used in this Agreement shall have the meanings set forth in Section
17.
 1.2           Schedules. Schedule 1.1 and any
additional schedules for services that may later be agreed to by the parties and attached hereto shall: (i) describe the Services, including but not limited to the assets to be leased or sold and other resources to be provided or obligations to
be discharged by Vendor under the schedule; (ii) describe any obligations of Client related to the Services; and (iii)specify any other terms appropriate to the Services and the obligations of the parties. Any amendments to this Agreement or to
any Schedules (including portions of Schedules that the parties have agreed may be completed at a later time) shall be in writing, signed by the parties, dated, and refer to the Schedule or other provision being amended.
 1.3           Change Requests. 
 1.3.1        A party desiring a modification of the Services or Schedule that would affect the scope, pricing or functionality of
the Services shall submit a change request (“Change Request”) to the other party. The Change Request will set forth in reasonable detail the change requested and impact on pricing, implementation timing, Commencement Date and Services.
Neither party is obligated to proceed with any Service changes unless and until such change is reflected in a Change Request that is mutually executed by the parties. The parties shall bear their own expenses associated with the negotiation of any
Service changes or Change Request. Client shall bear the cost of changes it requests in systems, applications features, functions or methods that are unique to Client. All other such changes shall be at Vendor’s expense. 
 1.3.2        If Client requests any services not covered by the fees listed on Schedule 2.1, Vendor shall submit
to Client a written estimate of the fees for such additional services before performing such additional services. If Client approves such fee estimate, Client shall pay Vendor fees for such additional services properly performed as set forth in
Section 2.1 hereof. 
 1.3.3        Client will be given a mutually agreeable share (but
absent agreement, no less than fifty percent (50%)) of the net profits accruing to the Vendor (e.g., from products sold, software or other intellectual property licensed or processing fees associated with services provided, to Vendor’s other
clients) from the marketing and sale of all products, services changes or enhancements implemented at Client’s request and expense. This provision is intended to address products, services and enhancements that are jointly developed by Client
and Vendor or otherwise developed by Client or Vendor in connection with the Services, and shall not be construed to address any products, services, or enhancements that are developed by Vendor as part of its business in the ordinary course without
Client’s input or funding even if ultimately used to provide the Services. 
 1.4           Service Level Standards. The Service Level Standards set forth in Schedule 1.4 are incorporated herein by reference. Any
amendment to Schedule 1.4 shall be embodied in a written document signed by the parties and attached hereto.
 1.5           Delivery System. Vendor shall provide the Delivery System necessary to provide the Services, including telecommunications and
electronic data transmissions to and from the location where the care, custody and control of such communications are transferred from Client to Vendor. Vendor shall encrypt all data sent and received electronically as required by Client. Vendor
shall notify Client of any security breaches or other intrusions into or breaches of the Delivery System used to perform the Services as soon as possible but in any event within twenty-four (24) hours of such occurrence.
 1.6           Service Improvements. In providing the Services, Vendor
agrees to use commercially reasonable efforts to (i) use state-of-the-art technology, (ii) at least meet industry standards, (iii) continually seek to adopt 
  
 
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 improvements, enhancements and
updates to reduce costs to Client and (iv) maintain the Services as generally competitive with other large scale item processing systems and vendors. Section (iv) above will be evaluated in terms of the following
characteristics:(1) ability of the Delivery System to process significant volumes of items and maintain comprehensive data; (2) accuracy; reliability and compliance with Service Level Standards; (3) ease of accessibility of data
stored on the Delivery System; (4) ability to interface or connect and access the Delivery System to other third party systems; (5) flexibility of the Delivery System to incorporate new data; (6) degree to which Client may customize,
create and format reports of the data generated, used or stored on the Delivery System; and (7) such other characteristics as the parties shall include in a Schedule. 
 1.7           Resource Allocation. This Agreement provides Client with the first call on Vendor’s Services but
does not give Client sole or exclusive call on those Services. The parties agree that Vendor may also provide services similar to the Services to other customers and share communications and facilities, infrastructure and other resources with other
customers, but not to the extent a Schedule provides for dedication of such resources to Client. If Client’s demand for Services exceeds Vendor’s resources or capacity, Vendor agrees to allocate such resources as may be required to meet
the servicing requirements of Client.
 1.8           On-site
Representatives.
 1.8.1        If requested by Client, Client may have one or more
employees or representatives on-site at the facilities providing the Services (“Client On-Site Reps”), at any time during the term of this Agreement. Vendor shall not be responsible for any costs of compensation, benefits, travel or
similar expenses of Client On-Site Reps. Client’s On-Site Reps shall be answerable solely to Client, and shall have the authority to observe and monitor all facets of the Services for quality control purposes. Vendor shall provide Client
On-Site Reps with office space and work environment, security access, utilities, supplies, telecommunications and network connections and access to all records of Vendor relating to the Services. Client On-Site Reps shall comply with all work place
safety and security standards and other policies applicable to Vendor’s employees and servicers.
 1.8.2        Vendor shall assign one or more employees as requested by Client to work on-site at two (2) mutually agreeable Client facilities to assure the quality and performance of the
Services and to facilitate the communications between the parties (“Vendor On-Site Reps”). Client shall not be responsible for any costs of compensation, benefits, travel or similar expenses of Vendor On-Site Reps. Vendor’s On-Site
Reps shall be answerable solely to Vendor. Client shall provide Vendor’s On-Site Reps with appropriate office space and work environment, security access, utilities, telecommunications and network connections and access to all networks,
servers, applications and data used by Vendor in providing the Services. Vendor’s personnel located at Client’s facilities shall comply with all work place safety and security standards and other policies applicable to Client’s
employees and servicers.
 1.9           Vendor Training. Vendor agrees to provide to Client personnel training regarding the Services, including but not limited to implementation, conversion, operations, and changes in the Services, in a manner and degree reasonably satisfactory to
Client.
 1.10         Scheduled Outages. Vendor shall keep
Client informed of the times and durations of scheduled outages for preventive maintenance which shall be allowed only during the times and for the durations set forth in the Service Level Standards, and shall notify Client of all other outages and
interruptions in the Services as soon as practicable, but in any case within one hour of their occurrence. Vendor shall provide Client with on-line (24/7/365 subject to routine scheduled
maintenance) read only remote access to monitoring capabilities maintained by Vendor for the telecommunication facilities, lines and services provided by or on behalf of Vendor in connection with the Services, such access to be consistent with
Vendor’s then current capabilities, but no less than Vendor’s capabilities as of the Effective Date
 2.             PAYMENT.
 2.1           Fees. Client shall pay Vendor the fees set forth in Schedule 2.1 (“Fees”) for Services properly performed by credit of
immediately available funds to an account (which Vendor shall maintain at Sovereign Bank unless Vendor’s senior lenders require the account to be maintained elsewhere). Except as may be otherwise
expressly provided in this Agreement, the Fees are all-inclusive and Client assumes no responsibility for other costs associated with the Services including, but not limited to, the following:(i) training costs; (ii) utilities, supplies,
travel, lodging, income taxes or any other costs incurred in performing the Services; and (iii) any other costs, charges, duties, general administrative expense, overhead, or out-of-pocket expenses. For services Vendor provides at the request
of Client that are not covered by Schedule 2.1 or another Schedule specifically setting forth applicable pricing, Client will pay Vendor’s normal rates for the applicable services less a standard discount of [****] percent ([****]%) plus
reimbursement of out-of-pocket expenses without mark-up, as further provided in this Section. Client shall pay to Vendor a one-time implementation fee of [****] dollars ($[****]) upon Successful Conversion of Client’s New England
region.
 2.2           Fee Increases. The Fees
under this Agreement shall remain fixed for [****] ([****]) years from the Commencement 
  
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 Date. Thereafter, the Fees may
be increased on the anniversary of the Commencement Date at a rate not to exceed [****] or (ii) [****]%. Vendor shall provide Client with at least sixty (60) Days written notice before the effective date of such increase.
 2.3           Invoices. Unless otherwise provided in the applicable
Schedule, Vendor shall invoice Client monthly for all Fees and, subject to Sections 2.4 through 2.7, Vendor’s invoices shall be due within thirty (30) Days of receipt. If any undisputed amounts remain unpaid more than fifteen (15) Days
after the day payment is due, Vendor may accrue interest on such amount at a rate equal to the Fed Funds Rate in effect on the first day the amount is overdue until paid in full. Invoices shall break out all Fees in reasonable detail, (consolidating
a summary of all fees on a single page) and all costs and charges for development, enhancement and other charges shall be invoiced separately.
 2.4           Expense Reimbursement. Except as set forth herein or in Schedule 2.1, Vendor shall bear its own employees’ and
contractors’ travel and living expenses incurred with respect to the Services. Travel and living expenses connected with the routine implementation of the Services, initial conversion, and ongoing routine administration, and in connection with
rectification of deficiencies in Services caused by Vendor or its Representatives shall be Vendor’s responsibility. Reasonable expenses for travel and lodging caused by Client’s request for additional services or enhancements shall be
Client’s responsibility, except to the extent such services are performed by persons already dedicated to Client’s service team, pursuant to Section 4. Expenses for Client’s account shall be invoiced monthly, be accompanied by copies
of paid receipts and be subject to the limitations contained in Client’s then current T&E policy for vendors, a current copy of which will be provided to Vendor’s Account Manager. Client shall reimburse Vendor for any Pass-Through
Expenses identified in the Schedules. Client shall receive the direct benefit of any discounts that Vendor may receive when incurring the Pass-Through Expenses and Client shall receive all savings achieved by Vendor through the pre-sorting of
postage items on a pro-rated basis.
 2.5           Invoice
Disputes. Client may dispute invoiced amounts or billing errors and/or credits under this Agreement, and withhold the disputed amount while the parties negotiate to resolve the dispute. Client shall not be in default under
this Agreement if Client reasonably disputes the fees as provided in this Section 2.5. To do so, Client shall inform Vendor of the basis for such dispute in writing as soon as reasonably practicable after discovering the facts forming the basis for
such dispute, and Client and Vendor shall use reasonable efforts to resolve such dispute within ten (10) days. Pending such dispute resolution, the parties shall continue to meet their other obligations under this Agreement.
 2.6           Holdback and Service Level Standard Credits. To secure
the full performance of Vendor’s deconversion and other obligations following notice by either party that this Agreement or any Services are to be terminated (or not renewed), Client shall have the right to retain [****] percent ([****]%) of
the amount billed on each invoice, up to an aggregate of [****] U.S. dollars ($[****]) (the “Holdback”). The Holdback shall be released to Vendor on successful completion of Vendor’s deconversion and other obligations as set forth in
Section 10.1, provided Vendor has given all reasonable cooperation to Client and its other vendors and complied in full with its obligations, including all Service Level Standards and other performance measures. Client may offset against the
Holdback, Fees and invoices any Service Level Standard credits or other adjustments to which Client becomes entitled.
 2.7           Taxes. Client agrees to pay Vendor the federal or state sales, use or excise taxes which are measured directly by payments made
under this Agreement and are required by law to be collected by Vendor from Client. Without limiting the foregoing, the taxes paid by Client shall exclude, however, franchise taxes, taxes based upon Vendor’s income, capital stock or assets, and
any employment related taxes. If Client pays any tax to Vendor and the tax is later determined not to be due or is subject to a refund, Vendor shall immediately refund the amount thereof to Client. If Client disputes and refuses to pay any tax,
Client agrees to indemnify and hold Vendor harmless if such tax is later determined to be due and payable by Client. Vendor agrees that Client is not responsible hereunder for paying, collecting or withholding any federal, state or local employment
taxes or any workmen’s compensation, unemployment or social security taxes or contributions. Vendor shall, when reasonably requested by Client, assist and cooperate with Client in challenging the validity of any such tax that Client is required
to pay under the terms of this Agreement.
 3.             TERM
OF AGREEMENT. 
 3.1           Term.
This Agreement shall commence as of the Effective Date and shall continue in effect until [****] ([****]) months after full conversion and implementation of full Services with respect to Client’s New England region (the
“Initial Term”). Following that conversion, the parties will sign a letter or certificate that specifies the actual date of such conversion but, if they do not, the Initial Term will be deemed to have begun on December 31, 2003. This
Agreement shall automatically renew for successive periods of [****] ([****]) years unless (a) either party 
  
 
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 provides written notice of its
intent to terminate the Agreement one hundred and eighty (180) days prior to the end of the then-current term or (b) this Agreement has been terminated earlier by one or both of the parties as provided in this Agreement. With the exception of
Schedule 1.1, a schedule of services under this Agreement may, by its own terms, be terminated or expire earlier than this Agreement, provided that such a termination shall not terminate this Agreement or Schedule 1.1 or any other schedules, unless
otherwise agreed by the parties in writing. 
 3.2           Special
Services. Certain Services may need to be implemented in phases, as further provided in the Project Plan and in such case Vendor and Client will cooperate as necessary with each other and with other applicable vendors to
effectuate successful conversions.
 4.             VENDOR
PERSONNEL.
 4.1           Vendor Account Manager and Key Personnel.
Vendor shall assign an Account Manager who shall oversee and manage the performance of Vendor’s obligations under this Agreement and shall serve as Vendor’s primary point of contact with Client, and shall meet at
least once monthly with Client. Any replacement of the Account Manager or other key personnel shall be subject to the review and approval of Client.
 4.2           Vendor Personnel Replacement. Except as prohibited by law, Client may request at any time the removal of any individual
performing Services in connection with this Agreement. Vendor shall immediately remove such individual from the Services but may, at its sole discretion, reassign such individual to another client of Vendor’s.
 4.3           Client Policies; Special Employee Provisions. Vendor
agrees to comply with, and to require its Representatives who are assigned to perform the Services to comply with Client’s information security policies, guidelines and standards, as amended from time to time, and with the Special Employee
Provisions set forth in Schedule 4.3.
 5.             REPRESENTATIONS, WARRANTIES AND COVENANTS.
 5.1           Vendor’s Representations, Warranties and Covenants. Vendor represents, warrants and covenants that:
 5.1.1        it is validly organized and existing under the laws of its state of incorporation and qualified to do business at the location(s) where Services are provided, and has full
power and authority to execute and deliver this Agreement, which constitutes a legal, valid and binding agreement of Vendor enforceable in accordance with its terms, and to perform the Services;
 5.1.2        this Agreement does not conflict, breach or cause a material default of its organizational documents or any agreements
or other obligations to which it is a party;
 5.1.3        no action, suit, proceeding or
investigation is pending or, to the knowledge of Vendor, threatened against Vendor or Vendor’s Representatives that would adversely affect the performance of the Services;
 5.1.4        it shall procure for Client such records of Vendor’s Representatives as are required to establish compliance with this Agreement;

5.1.5        it owns or otherwise enjoys all necessary licenses and other rights in and to all
facilities, equipment, systems and software used to perform the Services, including, but not limited to, all operating systems, backup and disaster recovery systems;
 5.1.6        it shall keep Client advised of all application and operating system software and other programs utilized by Vendor to perform the Services, all
of which shall be versions currently supported by the owners, licensors or vendors thereof; 
 5.1.7        its facilities used to provide the Services shall at all times be under the complete care, custody and control of Vendor and shall be equipped with all systems, utilities,
software, hardware, personnel, management teams and other resources necessary to perform the Services;
 5.1.8        it will provide the Services in a professional and workmanlike manner consistent with industry standard practices and will not do or omit to do anything which might have a
material adverse effect on Client;
 5.1.9        it shall maintain at all times required by
this Agreement a Disaster Recovery Plan at least meeting the regulatory and other requirements of Client; 
 5.1.10      it agrees to maintain a Delivery System that shall meet Client’s current needs for Services and that shall:(i) support normal growth; (ii) support such needs in busiest times; (iii)
support Client’s needs under the Disaster Recovery Plan consistent with Sections 14 and 15; and (iv) support, in five years, a 100% increase over Client’s current needs for Services. Vendor shall participate in due diligence and conversion
planning regarding future needs for Services in connection with any Client acquisition.
 5.1.11      it is and at all times during the term of this Agreement will be in compliance with Laws and Regulations applicable to Vendor and/or Client in connection with the Services the violation of which might 
  
 
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 have a material adverse effect
on Client; and shall procure for Client such records of Vendor’s Representatives as are required to establish compliance with this Agreement and all such applicable laws. Vendor shall also generate, retain and provide Client with such reports,
data and files in such formats as Client reasonably requires to comply with requirements of applicable laws and regulations, its regulatory bodies and its auditors and to determine compliance by Vendor and Client with their obligations
herein;
 5.1.12      it will at all times comply with Client’s policies regarding outsourced
system and data security, as they exist from time to time. A current copy of such policies is attached hereto as Schedule 5.1.12; 
 5.1.13      it is an equal opportunity employer and does not discriminate in employment of persons or awarding of subcontracts because of a person’s race, sex, age, religion, national origin,
sexual orientation, veteran or disabled status. Vendor further understands that Client’s policy is that discrimination against any person, for reason of race, sex, age, religion, national origin, sexual orientation, veteran or disabled status
is specifically prohibited. Client considers as one of its purchasing criteria the action of its vendors in providing opportunities to small or under-utilized business enterprises, in particular those that are owned, operated or controlled by
minorities, women, veterans and/or disabled individuals or groups;
 5.1.14      it will at all times
maintain capital and other financial resources sufficient to permit Vendor to perform its obligations under this Agreement, including a Tangible Net Worth of not less than One Dollar ($1.00);
 5.1.15      it will pay its debts generally as they become due, and use all reasonable efforts to avoid the disruption of the normal
operations of Client;
 5.1.16      within one hundred twenty (120) days of the end of each fiscal year
of Vendor, it will provide to Client audited, annual financial statements as prepared for Vendor in the ordinary course of its business, along with other related documents which Client may require to demonstrate Vendor’s creditworthiness and
ability to perform under the Agreement (“Financial Information”) and at such time represent and warrant that such Financial Information is complete and correct and presents fairly in all material respects the financial condition of the
Vendor as of the date of the Financial Information and for the periods referenced therein;
 5.1.17      will notify Client immediately in the event there is a Material Adverse Change; 
 5.1.18      it will, promptly upon Client’s request, provide Client with copies of all transaction and configuration files and copies of all corresponding file layouts as applicable to the Services and which are in the control of Vendor and its
Representatives; and
 5.1.19      it will comply in all respects with its obligations under the
Registration Rights Agreement between the parties dated on or about the date hereof.
 5.2           Client’s Representations & Warranties. Client represents, warrants and covenants that:
 5.2.1        it is validly organized and existing under the laws of the United States of America, and has full
power and authority under its organizational documents and the laws of the United States of America to execute and deliver this Agreement, which constitutes a legal, valid and binding agreement of Client enforceable in accordance with its terms, and
to perform its obligations hereunder; 
 5.2.2        this Agreement does not conflict,
breach or cause a material default of its organizational documents or any agreements or other obligations to which it is a party;
 5.2.3        no action, suit, proceeding or investigation is pending or, to the knowledge of Client, threatened against Client or Client’s Representatives that would adversely affect
Client’s obligations under this Agreement or the performance of the Services; 
 5.2.4        it will keep Vendor apprised of Client’s future servicing needs as such needs become known to Client; 
 5.2.5        it is and at all times during the term of this Agreement will be in compliance with Laws and Regulations applicable to Client a violation of which might have a material
adverse effect on Vendor’s provision of the Services; and
 5.2.6        it will comply
in all respects with its obligations under the Registration Rights Agreement between the parties dated on or about the date hereof.
 6.             COMPLIANCE. Vendor agrees to comply with all laws and regulations applicable to vendor and/or client in connection with the
services the violation of which might have a material adverse effect on client promptly (and in any case within the time required by such laws and regulations); provided, however, if compliance with changes in such laws and regulations after the
commencement date would materially increase vendor’s costs of providing the services, the parties shall promptly meet to consider the available options, including sharing of such costs, spreading such costs over vendor’s other customers
similarly situated, and if commercially reasonable, a cost-effective solution is not available, client may terminate this agreement pursuant to section 9.1. Each party shall notify the other of any changes in Laws 
  
 
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 and Regulations which may
adversely impact the services and vendor, subject to the preceding sentence, shall make all changes necessary to the services to comply with all laws and regulations.
 7.             RECORDKEEPING AND AUDITS.
 7.1           Client’s Audits. As reasonably requested by Client or as requested by Client’s regulators,
Vendor shall cooperate with Client and its internal or external auditors for the purpose of Client’s regulatory compliance with respect to the performance of the Services provided by Vendor to Client hereunder. Promptly following any such
audit, whether conducted by Client’s internal or external auditors, Client will instruct its auditors to conduct an exit conference with Vendor and provide Vendor as soon thereafter as reasonably possible a copy of each report prepared as a
result of such audit examination relating to the Services, whether in draft or final form. Vendor shall be given the opportunity to review and comment on any reports reflecting negatively on the Services before such report(s) are finalized. Vendor
shall cause its Representatives to cooperate in the same manner as Vendor is required by this Section. Client shall maintain the confidentiality of any report pertaining to Vendor and shall not provide such report to any third party, except as
required by any Laws or Regulations.
 7.2           SAS-70 Audit.
Vendor agrees to have an annual “SAS 70 Type II” audit of its operations at the Vendor facilities (which scope shall be in accordance with generally accepted industry standards) by an independent accounting firm at
Vendor’s sole expense. After receipt of the SAS-70 report, Vendor shall promptly provide a copy of such report to Client. In addition to the SAS 70 reporting, Vendor shall provide Client with a report which shall contain Vendor’s
management’s response to the exception comments, if any, contained in the SAS 70 report, together with appropriate target dates for completion of required changes. If SAS 70 is no longer in effect, such review shall be conducted under the
accounting standards that replaced SAS 70 as applicable to financial institutions.
 7.3           Correcting Deficiencies. Should an audit (including any examination by any regulatory authority) reveal unresolved material
deficiencies without a management plan to correct them, Client may require Vendor to promptly provide a management plan to cure the deficiency and to provide documentation to demonstrate such cure to Client’s reasonable satisfaction. Vendor
shall bear the costs of the management plan and of any required remedial action.
 8.             CONFIDENTIALITY. 
 8.1           Confidentiality Agreement. The parties agree to the terms and conditions of the Confidentiality Agreement set forth in
Schedule 8, attached to and made a part of this Agreement. Vendor also agrees to require its third party Representatives who are assigned to perform the Services to agree in writing to the terms and conditions of Schedule 8. Vendor agrees
that Client’s archived image files are Confidential Information under Schedule 8 and Vendor agrees to restrict access thereto in accordance with the requirements of Schedule 8. 
 8.2           International Requirements. Vendor shall adhere to all applicable regulatory requirements pertaining
to privacy and handling of customer information, including those that become applicable by reason of international business activities of Client or Vendor. Vendor shall not use any processing facility located outside the United States to process any
data relating to Client or its customers or otherwise transmit any data relating to Client or its customers across national borders without Client’s express written consent. If Vendor proposes to do so, Vendor shall ensure that all related
processing facilities and systems comply with all applicable laws, regulations, treaties, and other legal requirements of the United States, all other affected countries, and any international organizations having jurisdiction, including without
limitation, those with regard to data security and privacy, data processing and transmittal of data across national borders.
 8.3           Hard Copy. Vendor shall see that its systems and protocols provide assurance that all hard copy printouts and other storage media
containing Client data are properly secured at all times and securely destroyed when no longer needed in accordance with Client’s data security and retention procedures and requirements.
 8.4           Copy Protection. Programs, data and written materials of Client and Vendor
shall be protected from unauthorized copy, use, duplication, and storage. 
 9.             TERMINATION. 
 9.1           Termination by Client. Client may terminate this Agreement or any Schedule or portion thereof under Sections 9.2 through 9.4
without payment of any termination fee or any other penalty or charge (with the exception of Fees owed for Services properly performed prior to the termination date). Client agrees to provide written notice of termination with a reasonably detailed
reason for the termination and, unless a shorter or longer time period is specified in such sections, at least thirty (30) Days to remedy the default or reason for termination. 
 9.2           Vendor Defaults. Pursuant to Section 9.1, Client may terminate this Agreement or applicable
Schedule upon the occurrence of any of the following ((each a “Vendor Default”):
  
 
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 9.2.1        A material breach of this Agreement by Vendor that substantially impairs the ability of Client to conduct business and that is not cured within seven (7) Days.
 9.2.2        A material breach of this Agreement by Vendor that does not substantially impair the ability
of Client to conduct business but that is not cured within thirty (30) Days.
 9.2.3        Vendor’s Services do not substantially conform to applicable specifications or the Services are not implemented or delivered substantially as set forth in the applicable Schedule.
 9.2.4        A Service Level Termination Event occurs.
 9.2.5        Vendor becomes the subject of any voluntary or involuntary insolvency or bankruptcy proceeding; becomes insolvent; or if any substantial part of
Vendor’s property becomes subject to any levy, seizure, assignment, application, or sale for or by any creditor or governmental agency.
 9.2.6        The suspension of the operation of Vendor’s business that substantially impairs the ability of Client to conduct any material aspect of its business and that is not
cured within seven (7) Days, unless otherwise provided in Section 9.3.
 9.2.7        Vendor’s loss, suspension, revocation or failure to renew any license or permit material to the Agreement or the Services.
 9.2.8        One or more judgments are entered against Vendor in the aggregate amount of five million U.S. dollars ($5,000,000) and Vendor does not obtain the satisfaction, release, stay
or dismissal thereof within thirty (30) Days.
 9.2.9        The indictment of or
commencement of proceedings against Vendor or any of its executive officers involved in the business unit that provides the Services under any criminal statute involving material crimes of dishonesty or moral turpitude.
 9.2.10      Losses incurred by Client to the extent caused by Vendor or its Representatives in connection with the Services
and not reimbursed by Vendor or covered by insurance, that exceed $3,000,000 in the aggregate during the term of this Agreement or $500,000 in any twelve (12) months.
 9.2.11      Financial Condition. Client reasonably believes the purpose of the Agreement or the prospect of receiving the Services reliably
in compliance with the Agreement to be materially impaired by reason of a breach of paragraphs 5.1.14, 5.1.15, 5.1.16 or 5.1.17. 
 9.2.12      Downgrade. There has been a double notch or more downgrade by one or more agencies used to rate debt securities issued by Vendor or its direct or indirect
parent organization or Vendor’s securities are no longer considered “investment grade” by the rating agencies. Such agencies may include Moody’s, Standard & Poors, Fitch or such other similarly situated and industry accepted
organization that is used to rate the credit worthiness of companies. By way of example, and not limitation, a double notch downgrade would occur if the credit rating changed from AA+ to AA- at Standard & Poors or Aa1 to Aa3 at Moody’s; a
downgrade such that the securities are no longer investment grade would be to a rating of BB+ or below at Standard & Poors, or Ba1 or below at Moody’s. Client acknowledges Vendor’s debt securities are not currently rated by any such
rating agencies. 
 9.3           Force Majeure Event or Disaster.
Client may terminate this Agreement or applicable Schedule if a Force Majeure Event prevents Vendor from performing any of its obligations for a period of more than five (5) business days in any ten (10) business day period
or in the event a mission critical portion of the Services are wholly inoperable for five (5) consecutive business days as a result of a Disaster.
 9.4           Agreement Contested. This Agreement or applicable Schedule may be terminated by Client if the validity or enforceability of any
material provision of this Agreement shall be contested by any governmental agency or authority.
 9.5           Convenience. This Agreement may be terminated by Client for convenience, subject to Section 9.10.1 below.
 9.6           Termination by Vendor. Vendor may terminate this
Agreement or any Schedule or portion thereof pursuant to Sections 9.7 through 9.9. Vendor agrees to provide written notice of termination with a reasonably detailed reason for the termination and, unless a shorter or longer time period is
specified in such sections, at least ninety (90) Days to remedy the default or reason for termination. 
 9.7           Client Defaults. Pursuant to Section 9.8, Vendor may terminate this Agreement or applicable Schedule upon the occurrence of
any of the following (each a “Client Default”):
 9.7.1        Client’s
material breach of any representations, warranties or covenants in this Agreement that is not cured within thirty (30) Days following written notice stating in reasonable detail the nature of the claimed breach; provided, however, that in the case
of any breach which is susceptible to cure but cannot be cured within thirty (30) Days through the exercise of reasonable diligence, so long as Client commences such cure within thirty (30) Days, such breach remains susceptible to cure, and Client

  
 
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 diligently pursues such cure
and effectuates it within one hundred twenty (120) days, such breach shall not be deemed to create a Default hereunder.
 9.7.2        Client’s failure to pay any invoice within thirty (30) Days after it is due (except for amounts disputed in good faith, holdbacks and Service Level Standard
credits).
 9.7.3        Client becomes the subject of any voluntary or involuntary
insolvency proceeding; becomes insolvent; or if any substantial part of Client’s property becomes subject to any levy, seizure, assignment, application, or sale for or by any creditor or governmental agency.
 9.7.4        One or more judgments are entered against Client in the aggregate amount of One Hundred Million U.S.
Dollars ($100,000,000) and Client shall not obtain the satisfaction, release, stay or dismissal thereof within thirty (30) Days.
 9.8           Force Majeure. Vendor may terminate this Agreement or applicable Schedule if a Force Majeure event prevents Client from
performing any of its obligations for a period of more than thirty (30) consecutive days.
 9.9           Agreement Contested. This Agreement or applicable Schedule may be terminated by Vendor if the validity or enforceability of any
material provision of this Agreement shall be contested by any governmental agency or authority.
 9.10         Termination Payments. 
 9.10.1      If the Agreement is terminated by Client for convenience, without cause or because of no fault of Vendor during the first 12 months of the Initial Term after Successful Conversion of
Client’s New England region to the Delivery System, the Client agrees to pay Vendor liquidated damages equal to [****]% of the “Average Monthly Fees” (the average of the processing fees
paid to Vendor under Schedule 2.1 during the 3 months prior to termination, (less Pass-Through Expenses and third party charges)) multiplied by the number of months remaining in the initial [****] month term. Thereafter, the percentage in the above
calculation shall be as follows:
 •          [****]% of the Average Monthly Fees if terminated during the second 12 months
 •          [****]% of the Average Monthly Fees if terminated during the third 12
months
 •          [****]% of the Average Monthly Fees if terminated during the fourth 12 months
 •          [****]% of the Average Monthly Fees if terminated during the fifth 12 months
 •          [****]% of the Average Monthly Fees if terminated during the sixth 12
months
 9.10.2      If this Agreement is terminated by either party prior to the Successful Conversion
of Client’s New England region or Mid-Atlantic region to the Delivery System (for convenience, without cause or because of no fault of the other party), then the terminating party agrees to pay the other party capital costs actually incurred by
such other party in connection with such conversion effort (net after resale or re-deployment) and documented, in an amount not to exceed [****] dollars ($[****]). 
 9.10.3      Should Client terminate this Agreement prior to a Successful Conversion of its New England region to the Delivery System (for any reason whatsoever), Client
shall pay to Vendor a fee in the amount of $[****] (“Settlement Fee”).
 If this Agreement is terminated by Client for any reason during the first 12 months of the
initial term after Successful Conversion of Client’s New England region, Client agrees to pay Vendor a Settlement Fee of $[****], which is in addition to the terms of 9.10.1 above. Thereafter the Settlement Fee shall be as follows:

•          $[****] if
terminated during the second 12 months
 •          $[****] if terminated during the third 12 months
 •          $[****] if terminated during the fourth 12 months
 •          $[****] if terminated during the fifth 12
months
 •          $[****] if terminated during the sixth 12 months
 9.11         SovCor
Project. Vendor understands that the successful implementation of the Services is part of a fundamental core services replacement project (“SovCor”). The overall success of SovCor will depend on, among other things,
(a) successful and timely deconversion from systems of prior core services vendors (collectively, “Prior Vendors”); and (b) successful and timely conversion and implementation of core services with Alltel Information Services, Inc.
(“Alltel”), Vendor and Midwest Payment Systems, Inc. (“Vendor”) (collectively, the New Vendors”). Vendor will cooperate with the New Vendors and any other vendors of Client in integrating the Services with such third
parties’ services in a manner that shall be beneficial to Client.
 10.           DECONVERSION AND TERMINATION PROCESS.
 10.1         Continued Performance. Vendor acknowledges that continuous performance of the Services is essential to Client’s business.
Notwithstanding anything to the contrary contained in this Agreement, if either party terminates this Agreement or any Schedule(s) or Services, Vendor shall (i) continue to perform the applicable Services until Client completes the transfer of
the terminated Services from Vendor, for up to one (1) year after the termination date; and (ii) cooperate with Client in
  
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 arranging for said transfer of
Services. All obligations and restrictions under this Agreement and all Schedules, including but not limited to those set forth in Section 2.2 hereof, shall continue until the deconversion services end or as otherwise agreed by the parties. Vendor
shall remain obligated to meet all applicable Service Level Standards and shall be subject to all Service Level Standard credits (as applicable) and all insurance carried by Vendor shall continue to remain in effect. All obligations under this
Agreement shall continue until the deconversion services described in this section end or as otherwise agreed by the parties.
 10.2         Return of Client Files. Before expiration or termination of this Agreement or a particular Schedule, Vendor shall return Client’s
information and other property, including but not limited to data in a machine readable format requested by Client (including by way of example, digitized images, flat files, information, materials, lists, databases, transcripts, and other data
maintained and produced by Vendor) and files as Client may request along with such information and assistance as is reasonable and customary to enable Client to transfer the Services successfully, that is on time, within budget and without error.
Unless otherwise requested by Client in writing, Vendor shall maintain a copy of Client data in electronic format for at least six (6) months after termination of the Services.
 10.3         Costs. If Client terminates this Agreement pursuant to Sections 9.2, 9.3, or other material default of
Vendor, Vendor shall pay all fees for deconversion under this Section 10. Otherwise, the fees for deconversion shall be as mutually negotiated between the parties, but in any event not to exceed the then current fees applicable to other
customers of Vendor for similar deconversion services.
 11.       INDEMNIFICATION.
 11.1         Vendor Indemnification. Subject to Section 12, Vendor agrees to indemnify and hold harmless Client and its Representatives (individually and collectively the “Client Indemnified Parties”), from and against all Losses arising out of (i) Vendor or
its Representative’s breach of this Agreement, (ii) Vendor or its Representative’s wrongful act or omission, negligence or willful misconduct in connection with the Services, including failure to implement the Services when and as
required by the Project Plan (to the extent not due to Client’s or its Representatives’ or third party vendors’ acts or omissions); (iii) any third party’s allegation that the
Services or any intellectual property or products used in providing the Services infringe or misappropriate any copyright, patent, trade secret, trademark, trade name or other property interest or proprietary rights of such third party, and/or
(iv) claims made in connection with Vendor or its Representative’s personnel. Notwithstanding the foregoing, Vendor shall not be liable to Client for Losses incurred to the extent arising from Vendor or its Representative’s compliance
with Client’s instructions.
 11.2         Client Indemnification.
Subject to Article 12, Client shall indemnify and hold harmless Vendor and its Representatives (individually and collectively the “Vendor Indemnified Parties”), from and against all Losses arising out of Client
or its Representative’s (i) breach of this Agreement; and/or (ii) wrongful act or omission, negligence or willful misconduct in connection with the Services. Notwithstanding the foregoing, Client shall not be liable to Vendor for
Losses incurred to the extent arising from Client or its Representative’s compliance with Vendor’s instructions.
 11.3         Notification.
 11.3.1      Any party seeking indemnification (the “Indemnitee”) under this Section 11 shall give the other party (the “Indemnitor”) prompt written notice (a “Notice of
Claim”), in accordance with Section 16.12; provided that the failure to give notice shall not relieve the Indemnitor of its obligations under this Section 11 unless such failure materially adversely affects the Indemnitor. The Notice
of Claim shall specify in reasonable detail the particulars of the claim.
 11.3.2      The Indemnitor
shall assume its obligation to indemnify the Indemnitee in writing within 30 Days of its receipt of a Notice of Claim.
 11.3.3      With respect to any third party claim which is the subject of a Notice of Claim, the Indemnitor shall have the right to defend, contest or otherwise protect against any such claim at its
own expense. The Indemnitee shall have the right, but not the obligation, to participate in the defense thereof through counsel of its own choice and to assert any and all claim or other pleading it may desire; provided, that the fees and expenses
of counsel to Indemnitee shall be at the Indemnitee’s own expense unless (i) the payment of such fees and expenses have been authorized by the Indemnitor or covered by available insurance, or (ii) there are specific defenses available
to Indemnitee that are different from or additional to those available to the Indemnitor, or (iii) the claim concerns matters beyond the scope of the indemnity agreements contained herein (in which case the Indemnitor, to the extent made
necessary by such different or additional defense or other effects, shall not have the right to direct the defense of such claim on behalf of the Indemnitee). The Indemnitee shall at all times cooperate in all reasonable ways with the Indemnitor,
and the Indemnitor shall reimburse the Indemnitee for its reasonable out-of-pocket expenses in connection therewith.
  
 
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 11.3.4      In the event that the Indemnitor elects not to or fails to timely defend, contest or otherwise protect against any such third party claim, the Indemnitee shall have the right to assume
or participate in the defense thereof through counsel of its own choice and to assert any and all claim or other pleading it may desire. No compromise or settlement of any claim may be made at the Indemnitor’s expense unless the Indemnitee
obtains the prior written consent of the Indemnitor. 
 11.3.5      The Indemnitor shall make no
settlement of any claims which Indemnitor has undertaken to defend without Indemnitee’s consent, unless (i) the Indemnitor fully indemnifies the Indemnitee for all Losses; (ii) the Indemnitee receives an unconditional release with
respect to the claim; (iii) there is no finding or admission of violation of law by, or effect on any other claims that may be made against the Indemnitee; and (iv) the relief granted requires no action or inaction on the part of and has
no other material effect on the Indemnitee.
 12.           LIMITATION OF
LIABILITY.
 12.1         Exclusion of Certain Damages. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY LOST PROFIT, LOSS OF BUSINESS, LOSS OF GOODWILL, INDIRECT OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO OR RESULTING FROM BREACH OF
ANY OF THE PROVISIONS OF THIS AGREEMENT. Notwithstanding the foregoing, Vendor shall be liable for all loss of funds availability (and interest thereon), fines and penalties incurred by Client or its customers; employee overtime; additional employee
expenses; consulting fees and other remedial fees and costs of implementing contingency plans and procedures to “work around” or mitigate Vendor’s processing errors or Service failures; customer and investor communications, statement
reproduction or other reasonably necessary remedial communications; and all applicable deconversion costs in the event Client terminates this Agreement or any Services as a result of Vendor or its Representative’s breach of this Agreement or
performance failures.
 12.2         Limitation of Liability. Notwithstanding anything in the Agreement to the contrary, any limitations on liability shall not apply to Losses to the extent arising from breaches of confidentiality, gross negligence, willful misconduct, defalcation, fraud, personal
injury, property damage, or claims of intellectual property infringement. 
 12.3         Limitation on Vendor’s Liability. Vendor’s total monetary liability to Client under any provision of this Agreement (whether based on tort, contract, or any other theory), with respect to Losses incurred by
Client other than Losses described in Section 12.2 above, shall be limited to the greater of:
 (i)        (a)    [****] dollars ($[****]) if the claim arises in the first 12 months after the date hereof ;
 (b)      [****] dollars ($[****]) if the claim arises in the second 12 months after the date
hereof;
 (c)       [****] dollars ($[****]) if the claim arises
in the third 12 months after the date hereof;
 (d)      [****] dollars ($[****]) if the claim arises in the fourth 12 months after the date hereof;
 (e)       [****] dollars ($[****]) if the claim arises in the fifth 12 months after the date hereof;
 (f)       [****] dollars ($[****]) if the claim arises at a later time; or
 (ii)       the aggregate Fees (excluding pass-through expenses and postage) billed for the [****] ([****]) full consecutive
months before the date claim arose.
 12.4         Limitation on Client’s
Liability. Client’s’ total monetary liability to Vendor under any provision of this Agreement (whether based on tort, contract, or any other theory), with respect to Losses incurred by Vendor other than payment for
Services properly provided shall be limited the greater of:
 (i)        (a)               [****] dollars ($[****]) if the claim
arises in the first 12 months after the date hereof ;
 (b)      [****] dollars ($[****]) if the claim arises in the second 12 months after the date hereof;
 (c)       [****] dollars ($[****]) if the claim arises in the third 12 months after the date hereof;
  (d)     [****] dollars ($[****]) if the claim arises in the fourth 12 months after the date hereof;
 (e)       [****] dollars ($[****]) if the claim arises in the fifth 12 months after the date
hereof;
 
 
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 (f)       [****] dollars ($[****]) if the claim arises at a later time; or
 (ii)       the aggregate Fees (excluding pass-through expenses and postage) billed for the [****]
([****]) full consecutive months before the date claim arose.
 12.5         Limitations Acknowledgement. The parties acknowledge that each of them relied upon the inclusion of the limitations of this Section 12 in consideration of entering into this Agreement.
 13.           INSURANCE.
 13.1         Vendor Insurance. Vendor agrees to maintain the following insurance, said coverage to be maintained at all times
except for the coverage referred to in paragraphs 13.1.2 (Commercial Crime), 13.1.6 (“Umbrella”) and 13.1.7 (Professional Liability) which shall be provided within ninety (90) days of execution of this Agreement and thereafter maintained
at all times.
 13.1.1      Commercial general liability insurance, which shall provide coverage for
bodily injury, property damage or loss, personal injury and advertising injury arising from the Services, at least in an amount of one million U.S. dollars ($1,000,000). Such insurance shall (i) be written on a per occurrence basis,
(ii) be endorsed to include blanket contractual liability, owner’s, landlord’s, tenant’s and owner’s contractor’s protective coverages, and (iii) not have a deductible or self insurance retention.
 13.1.2      Commercial Crime coverage, including employee theft and third party coverage with respect to its
employees, agents and subcontractors at least in an amount of five million U.S. dollars ($5,000,000).
 13.1.3      Workers’ compensation insurance that is customary in the industry but not less than what is required by law. 
 13.1.4      Property insurance covering “All Risk” of loss or damage to real and personal property including equipment, situated in, on or about the locations
where Services will be provided in an amount sufficient to cover the full cost to repair or replace the property with like kind or quality and without coinsurance penalty.
 13.1.5      Automobile liability insurance (including coverage for all owned, non-owned, hired and leased vehicles of Vendor) with bodily injury and property damage
limits of not less than one million U.S. dollars ($1,000,000).
 13.1.6      “Umbrella”
liability insurance in an amount not less than twenty million U.S. dollars ($20,000,000) to cover claims in excess of the coverage limits of the insurance above.
 13.1.7      Professional Liability insurance to provide coverage in the event that in the delivery of the agreed upon Service, Vendor causes Client a loss as a result
of an act, error or omission caused by Vendors employees or representatives. Such insurance shall be in an amount no less than eight million U.S. dollars ($8,000,000).
 13.2         Additional Insured; Proof of Insurance. Client shall be named as Additional Insured under the Commercial General
Liability, Automobile Liability, Umbrella Liability and Professional Liability policies required above. Vendor shall provide Client with Certificates of Insurance evidencing compliance with the terms of this Section and/or copies of the insurance
policies obtained and any riders and exclusions under such policies should Client believe it is necessary to do so. All policies shall be underwritten through insurance companies licensed to do business in the Commonwealth of Pennsylvania and
reasonably acceptable to Client. The insurance companies underwriting the insurance policies shall at all times maintain a minimum A.M. Best Rating of A- (XII). Vendor shall have its respective policies of insurance as required herein to be endorsed
to provide that such policies of insurance shall not be canceled, non-renewed or materially altered without at least sixty (60) Days prior written notice to Client’s Corporate Insurance Risk Manager. Vendor shall cause all insurance policies
required by this Section to be issued in a form and substance which would permit Client to obtain all relief available to it under this Agreement and which shall effectuate the intention of this Agreement.
 14.           DISASTER RECOVERY PLAN.
 14.1         General. Within ninety (90) Days of execution of this Agreement, Vendor shall develop
disaster recovery plans (collectively, the “Disaster Recovery Plan”) for the Services and Delivery System satisfactory to Client and shall maintain such Disaster Recovery Plan at all times during the Term. The Disaster Recovery Plan shall
include, without limitation, immediate notification to Client in the event of a Disaster or Force Majeure Event (as defined in Section 17 of this Agreement); daily backups of all Client data and files; remote on-line mirroring of intra-day files;
daily transmission of the backup data and files to Client; alternative communication capabilities; off-site storage of Client backup data and files; and alternative facilities to provide the Services.
 14.2         Response. Should a Disaster occur, Vendor shall execute the Disaster Recovery Plan in a
time frame and manner necessary to arrange for the prompt restoration of the Services within the time frames provided by the Disaster Recovery Plan.
 14.3         Testing the Plan. Vendor will complete a cycle test of its disaster recovery capabilities for each of the Services once per calendar year, so
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 later than July 1, 2004. Client
is allowed to observe and to participate in the disaster recovery test to the extent required to verify the effectiveness of Vendor’s Disaster Recovery Plan; provided that Client personnel shall not interfere or disrupt the test and shall be
subject to the standard security procedures at the disaster recovery facilities. Vendor will provide a report of the test and its results to Client within sixty (60) calendar Days of the test completion.
 15.           DISASTER AND FORCE MAJEURE EVENT. If a Disaster or Force Majeure Event
occurs (or when the parties reasonably anticipate that an event might become a Disaster or Force Majeure Event), Vendor shall immediately notify Client and shall invoke its Disaster Recovery Plan within two (2) hours after the occurrence of the
Disaster or Force Majeure Event, or in such longer period of time that Client may permit, and restore all Services within 24 hours after the occurrence. A Force Majeure Event shall not excuse Vendor’s performance if Vendor’s failure to
perform resulted from Vendor’s failure to properly implement its Disaster Recovery Plan or its failure to properly service or maintain the facilities used to provide the Services or the Delivery System.
 16.           GENERAL.
 16.1         Independent Contractor. The parties are independent contractors and have no power or authority to assume or
create any obligation or responsibility on behalf of each other. This Agreement shall not be construed to create or imply any partnership, agency, joint venture or employer-employee relationship between the parties.
 16.2         Applicable Law, Jurisdiction and Jury Trial Waiver. This Agreement
shall be governed by the laws of the Commonwealth of Pennsylvania without reference to provisions relating to conflict of laws. The parties agree that any dispute or claim under this Agreement shall be subject to the jurisdiction of and shall be
brought in the courts in of Common Pleas of Allegheny County, Pennsylvania or the United Stated District Court for the Western District of Pennsylvania, and each of the parties agrees that service of any process, summons, notice or document by U. S.
registered mail or certified mail to the address set forth in Section 16.12 hereof (or to any other address given in accordance with the terms of that Section) shall be effective service of process for any action, suit or proceeding brought
against such party in enforcing any rights hereunder. Each of the parties to this Agreement hereby irrevocably waives all right to a trial by jury in any action, proceeding or counterclaim between them arising out of or relating to this Agreement or
the transactions contemplated hereby.
 16.3         Remedies. All remedies contained in this Agreement are cumulative, are in addition to the other rights, and remedies available to either party under this Agreement, by law or otherwise.
 16.4         Successors and Assignment. Neither this Agreement nor any interest may be sold, assigned, transferred, pledged,
or otherwise disposed of by Client or by Vendor without the other party’s prior written consent. Notwithstanding the foregoing, Client may at any time assign this Agreement and delegate all duties hereunder to (a) an affiliate of Client or (b)
to any successor to Client’s business in its entirety. In the case of (b), such successor shall be solely responsible for all obligations of Client hereunder accruing after the effective date of such assignment. Subject to the foregoing, this
Agreement is binding upon the parties and their respective successors and permitted assigns. Any transfer or assignment of this Agreement in violation of this Section shall be null and void. Vendor acknowledges and agrees that the Affiliates of
Client are third party beneficiaries of this Agreement and all rights and benefits granted to Client hereunder.
 16.5         Subcontractors. Vendor may, but only with Client’s prior approval, subcontract any of the Services to its affiliates or third parties
but shall remain primarily liable and fully responsible for the performance of the obligations under this Agreement. Client’s approval may be conditioned on the following factors, among others:(a) a subcontractor’s experience in
performing the Services; (b) a subcontractor’s creditworthiness as determined by Client; (c) a subcontractor’s insurance coverage; and (d) USOFAC standards, guidelines and lists. Vendor shall cause each of Vendor’s
subcontractors to comply with the terms of this Agreement as they are applicable to it including, but not limited to, the Service Level Standards set forth in the applicable Schedule(s), compliance with Schedule 4.3 and obtaining the
Confidentiality, Privacy and Security Agreement in the form of Schedule 8. Vendor assumes full responsibility for its subcontractors’ compliance with the terms and conditions of this Agreement.
 16.6         Exclusivity. Client is not prohibited at any time from using any vendor for any
Services or to provide such services for itself throughout the term of this Agreement, except that Client agrees to use Vendor exclusively to provide the Services described in Schedule 1.1 for the following:
 16.6.1           The average volume of items available for processing under this Agreement after
Successful Conversion and normal growth of business but this exclusivity commitment is subject to the following: (a) it does not extend beyond an increase in annual volumes of 15%, (b) any increase in volumes of more than 15% is at the discretion of
Client and the parties agree to renegotiate pricing for the Services to reflect such increase in volumes, and (c) such volume commitment related to the Successful Conversion is subject to adjustment given business 
 
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 divestitures, downturns or other
reductions in annual volumes provided, however, that if such annual volumes decrease by more than 15% the parties agree to renegotiate pricing for the Services to reflect the reduction in volumes.
 16.6.2           For the avoidance of doubt, Client’s commitment above shall not (a) impair
Client’s right to receive Services under agreements to which it is a party as of the date hereof, other than the Agreement dated September 16, 1997 between Sovereign Bancorp, Inc. and Fiserv Solutions, Inc. (as amended) which the parties
understand shall be phased out on or before the end of its current term as determined by Client; or (b) apply in the case of (i) any acquisition that involves another third party agreement for similar services; or (ii) acquired item processing
volumes of more than 15%and the normal growth associated with such acquired volume.
 16.7         Legacy Agreements. If Client directly or indirectly acquires control (in whatever manner) of another Person having an agreement (the
“Legacy Agreement”) with Vendor for services similar to those provided to Client hereunder, Client shall have the following options:
 16.7.1      Client may, without affecting this Agreement, keep the Legacy Agreement in effect (including all pricing, terms and conditions) for the term or any renewal term thereof and extend such
agreement only to the item processing volumes to which it had applied immediately before the acquisition, and no termination or similar fees shall be required other than normal fees for conversion to Client connected with the acquisition in
accordance with the rates provided under this Agreement;
 16.7.2      Client may terminate the Legacy
Agreement in its entirety and allow the acquired Person to receive services from Client or other vendors, without penalty or fee, except such buy out or termination charges as may be required under the terms of the Legacy Agreement or as otherwise
may be negotiated between the parties; 
 16.7.3      Client may terminate the Legacy Agreement in its
entirety and allow the acquired Person to receive the Services under the pricing, term, terms and conditions of this Agreement without penalty, buy-out or termination fee, but if the remaining term of the Legacy Agreement when acquired is more than
12 months, Client agrees to compensate Vendor over the remaining term of this Agreement for (a) any unamortized startup, conversion or similar expenses Vendor can demonstrate it reasonably incurred in connection with the Legacy Agreement and that
were not recovered under such Legacy Agreement, and (b) the fees for services under this Agreement, but also including the volumes under such Legacy Agreement, are subject to reduction for processing volume increases as provided in Section
16.6.1;
 16.7.4      If the Legacy Agreement provides a volume increase in item processing services
when the Legacy Agreement is acquired by Client, of greater than 15% of Client’s then current processing volumes, Client may require Vendor to enter into negotiations for a new agreement which will entirely replace this Agreement and the Legacy
Agreement, at such prices and on such terms and conditions as Client and Vendor may reasonably agree, in such case this Agreement and the Legacy Agreement shall terminate without penalty buy-out or termination fee and be replaced by such new
agreement.
 The foregoing options may be exercised by Client upon written notice to Vendor no later than ninety (90) days after the relevant acquisition closes and shall apply
regardless of anything inconsistent contained in the Legacy Agreement. Notwithstanding the foregoing, any exclusivity provision contained in any Legacy Agreement that is acquired by Client and is not terminated is limited to the business applicable
to the Legacy Agreement prior to the acquisition
 16.8         Headings.
Headings contained in this Agreement are for reference purposes only and have no substantive effect.
 16.9         No Waiver. No delay or omission by a party in enforcing or exercising any right, power or remedy shall impair that right, power or remedy or
be construed to be a waiver of it. Any consent or waiver by a party of any of its rights, powers or remedies or of any breach shall not be construed to be a consent or waiver of any other right, remedy or power or any succeeding breach. No waiver or
discharge of any kind shall be valid unless in writing and signed by an authorized representative of the party against whom such waiver or discharge is sought to be enforced. Vendor’s correction of errors as provided in this Agreement is a
non-exclusive remedy and shall be in addition to all other rights and remedies that Client may have.
 16.10       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 including, without limitation, Sections 2.5,8, 9.11, 10, 11, 12, 16.2, and 16.3.
 16.11       Severability. Should any provision of this Agreement or the application thereof, to any extent, be held invalid or
unenforceable, the remainder of this Agreement and the application thereof to other jurisdictions or persons shall not be affected thereby and shall continue valid and enforceable to the fullest extent permitted by law or equity.
 
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 16.12       Notices. Any written notice required or permitted to be given hereunder shall be given by:(i) personal delivery; (ii) registered or certified
mail, return receipt requested, postage prepaid; (iii) confirmed facsimile; or (iv) nationally recognized courier service to the other party at the addresses listed below or to such other address or person as a party may designate in
writing. All such notices shall be effective upon receipt.
 If to Client:
 Sovereign Bank
75 State Street
Boston, Massachusetts 02109
Attn:  Chief Information Officer
 with a copy to:
 Senior Vice President & General Counsel
Sovereign Bank
1130 Berkshire Blvd.
Wyomissing, PA 19610, M.C.
11-900-LG2
 If to Vendor:
 President, InterCept, Inc.
3150 Holcomb Bridge Road, Suite
200
Norcross, Georgia 30071
 with a copy to:
 Vice President & General
Counsel
InterCept, Inc.
3150 Holcomb Bridge Road, Suite 200
Norcross, GA 30071
 16.13       Letter of Intent Superseded. This Agreement supersedes and terminates the Letter of Intent in its entirety, provided that the parties shall continue to
negotiate and conclude the Registration Rights Agreement referred to therein as soon as practicable.
 16.14       Entire Agreement. This Agreement, including its Schedules, 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. Modifications of this Agreement must be in writing and signed by duly authorized representatives of the
parties.
 16.15       Relationship of Agreement to Schedules and Project Plan.
All terms and conditions set forth in this Agreement shall apply to all services under Schedules. This Agreement shall supersede any provision in any Schedule to the extent the Schedule conflicts with this Agreement, unless
the Schedule specifically references and amends the conflicting provision in this Agreement. Schedules must be executed by authorized representatives of both parties to be effective. In case of any inconsistency between the Project Plan and this
Agreement, this Agreement shall control.
 17.           CERTAIN DEFINED
TERMS. The following terms used herein shall have the following meanings:
 17.1         “Affiliate” shall mean with respect to a party any other person at any time now or hereafter controlling, controlled by or under common control with such
party and includes, but is not limited to, present and future subsidiaries, parents, related persons, partners, joint venture participants and successors in interest.
 17.2         “Average Monthly Fees” is defined in Section 9.10.1.
 17.3         “Change in Control” means, with respect to a party:(i) any transaction or series of transactions that results in one or more
new Person(s) controlling directly or indirectly more than fifty percent (50%) of the stock or interests entitled to vote for members of that party’s board of directors; (ii) any transaction or series of transactions that results in one or
more new Person(s) owning substantially all of such party’s assets; or (iii) a binding written agreement is executed providing for a sale, exchange, transfer or other disposition of all or substantially all of the assets of the party,
except to an affiliate of the party.
 17.4         “Change Request” shall
have the meaning given in Section 1.3 hereof.
 17.5         “Client
Default” shall have the meaning given in Section 9.7.
 17.6         “Commencement Date” is the date the Services in a particular Schedule are first provided successfully in a live production environment.
 17.7         “Days” (whether or not capitalized) shall mean calendar days, unless the context otherwise requires.
 17.8         “Delivery System” shall mean the facilities and all equipment, networks, systems, software,
applications, interfaces, skills, know how, methods, processes, procedures, telecommunication systems and equipment, personnel, training materials, manuals, procedures and other resources necessary for Vendor to provide the Services.
 17.9         “Disaster” shall mean any unplanned interruption of the operations of the
Delivery System or inaccessibility to the facilities used to provide the Services, for more than twenty-four (24) hours.
 
14

  Confidential Treatment Requested
 17.10       “Disaster Recovery Plan” shall have the meaning given in Section 14 hereof.
 17.11       “Force Majeure Event” refers to the following events: war, hostilities, acts of the public enemy, sabotage, revolution, insurrection,
terrorist activity, riot or disorder; confiscation, embargo, nationalization or other similar government action, breakdown of the telecommunication links; acts of God, fire, frost, earthquake, storm, lightning, flood, or perils of the sea; epidemic;
or any other cause beyond the reasonable control of the parties.
 17.12       “Holdback” shall have the meaning given in Section 2.6 hereof.
 17.13       “Initial Term” shall have the meaning given in Section 3 hereof.
 17.14       “Laws and Regulations” shall mean all Federal, State and local laws, rules, regulations, guidelines, statutes, codes, ordinances, case law, judgments, orders, decrees and/or consent
orders applicable to the parties or to the Services.
 17.15       “Letter of Intent”
refers to the letter between the parties dated October 3, 2002 and the attachments thereto, namely the Confidentiality Agreement and Schedule A.
 17.16       “Losses” shall mean all claims, losses, liabilities, obligations, payments, damages, charges, judgments, fines, penalties, costs and expenses of any kind or character,
including but not limited to reasonable attorneys’ fees and costs and expenses resulting from any claims, demand, action, suit or similar proceeding.
 17.17       “Material Adverse Change” means any event, occurrence, circumstance, change, or effect, of any kind or nature, in the Vendor that
individually or in the aggregate with any other such events, occurrences, circumstances, changes, or effects, is, or could reasonably be expected to be, materially adverse to (i) the Vendor or to its assets, liabilities, operations, profits,
financial condition, or business of the Vendor, (ii) the ability of the Vendor to perform its services and obligations under this Agreement or any other agreement related hereto, or (iii) the validity or enforceability of this Agreement or
any other agreement related hereto, or any of the rights and remedies of Client hereunder or thereunder.
 17.18       “Pass-Through Expenses” mean those costs or expenses incurred by Vendor under this Agreement and identified in the Schedules that may be passed through to Client by
Vendor without mark-up.
 17.19       “Person” shall mean an individual, corporation,
partnership, sole proprietorship, joint venture, or other form of organization or entity, now existing or hereinafter formed or acquired. 
 17.20       “Project Plan” shall mean such project implementation and management plan and timetable as may be in existence from time to time between the parties relating to
implementation, conversion, and changes in Services and deconversion. The Project Plan is incorporated by reference herein. 
 17.21       “Representatives” refers to a party’s affiliates and its and their officers, directors, partners, employees, agents, consultants, subcontractors, successors and
permitted assigns.
 17.22       “Schedules” shall have the meaning given in
Section 1.
 17.23       “Services” shall have the meaning given in
Section 1.
 17.24       “Service Level Termination Event” shall have the meaning
given in Schedule 1.4.
 17.25       “Service Level Standard” shall be as defined in
Schedule 1.4.
 17.26       “Settlement Fee” shall have the meaning given in
Section 9.10.3.
 17.27       “Successful Conversion” shall mean the parties have
fulfilled their respective obligations as set forth in the Project Plan has been successfully implemented or completed in accordance with its terms.
 17.28       “Client On-Site Reps” and “Vendor On-Site Reps” are referenced in Section 1.8.
 17.29       “Tangible Net Worth” shall mean, at any time, the amount by which (a) the par value (or value stated on the books) of all classes of
Vendor’s capital stock, plus (or minus in the case of a deficit) the amount of surplus, whether capital or earned, of Vendor and its subsidiaries, if any, exceeds (b) the aggregate amount carried as assets on the books of the Vendor and its
subsidiaries, if any, for (i) goodwill, patents, trademarks, treasury stock, and unamortized debt discount and expense, (ii) accounts receivable from, investments in, and any other amount carried as assets arising out of or in connection with any
transaction between Vendor and any affiliate, (iii) cost of purchased assets and other investments in excess of the net book value thereof as of the time of the acquisition by the Vendor or any subsidiary, if any, and (iv) write-up in the book value
of any assets of the Vendor or its subsidiaries, if any, resulting from a revaluation thereof, as determined in accordance with GAAP applied on a consistent basis.
 
15

  Confidential Treatment Requested
 17.30       “Vendor Default” shall have the meaning given in Section 9.2.
 IN WITNESS
WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date first above written.
   

	 Sovereign Bank
 	 InterCept, Inc.
 
	 
 By:
 	 
 /s/ PAUL A. WATERS
JR.
 	  
 	 
 By:
 	 
 /s/ RANDY FLUITT
 
	  
 	 
 	  
 	  
 	 
 
	  
 	 Name:
 	 Paul A. Waters Jr.
 	  
 	 Name:
 	 Randy Fluitt
 
	  
 	 Title:
 	 Executive Director,
 Transaction Services
 	  
 	 Title:
 	 Executive Vice President
 
								

 
 Schedules
   

	 1.1
 	  
 	 Services
 	  
 
	 1.4
 	  
 	 Service Level Standards
 	  
 
	 2.1
 	  
 	 Fees
 	  
 
	 4.3
 	  
 	 Special Employee Provisions
 	  
 
	 5.1.12
 	  
 	 Outsourced System and Data Security
 	  
 
	 8
 	  
 	 Confidentiality Agreement
 	  
 

 
 
16

  Confidential Treatment Requested 
 SCHEDULE 1.1
 IMAGE/TRADITIONAL ITEM PROCESSING DESCRIPTION OF SERVICES
 PROOF AND
ENCODE
 Over the counter (teller) work is bundled, then routed to Vendor. Vendor will log and track all incoming work. Debit and Credit totals are established and outgoing
Cash Letter items are encoded using Vendor’s Image Processing equipment.
 Capture
 Over
the counter, Incoming Cash letter and Inclearing items are read by the high speed reader sorter. Images of all documents are digitized and stored on magnetic media along with information needed to post and/or track each document. 
 •         Intelligent recognition
of check amount through courtesy and legal amount recognition.
 •         Customer adjustments prepared when an error is in excess of Client’s write-off limit. A general ledger adjustment is prepared when the error meets Client’s
write-off limit.
 •         Image Capture of items presented by the Federal Reserve, clearinghouse, International clients or other designated institution. This includes batching, capturing, re-entering rejects, microfilming of items, endorsement at the Client level,
balancing at the batch level, preparing adjustments, extracting and creating the Client defined MICR/DDA Data file and transmitting it to the Client.
 •         Items received from the POD work and Client back office departments. Includes image capture
of on-us and transit items, balancing at the deposit level, microfilming of items, endorsement at the Client level, preparing and dispatching cash letters, extracting and creating bank defined files and transmitting MICR/Data to core
system
 •         Repair of rejected items from the capture process. Items that reject are stripped, captured, repaired as might be required for subsequent processing.
 •         Keying of amounts on items that were not recognized by CAR/LAR.
 •         Power encoding of check amounts
for transit items.
 NSF/Unposted/Outbound Returns (Exceptions)
 All exception items will be
reviewed with the Client if necessary and will then be processed by Vendor. This includes preparation and disposition of NSF notices and outgoing return cash letters. Unposted/unmatched items will be corrected and resubmitted for posting.

•         When exceptions are
identified, images of each item to the operational workstation for review and decisioning. Once the item is decisioned by Client, Vendor will prepare the items to be returned according to bank requirements and create adjustments for updating
appropriate accounts. Adjustments will be posted in batch mode to the DDA, and notices will be mailed to the customer. A future option will include images of the related items with the notice.
 •         EARNS reporting of items over $2,500.
 •         Processing of returns as
requested by the Client that are outside of the normal processing window.
 •         Paid exception items are sorted into specified statement cycles or truncation.
 •         Items prepared for return to the bank of first deposit will be qualified and dispatched.
This includes encoding each item with the return destination (bank of first deposit) and dollar amounts, reconciliation to the cash letter and dispatch to the Federal Reserve or clearinghouse members in accordance to scheduled deadlines.

Incoming Returns
 
17

  Confidential Treatment Requested
 Vendor will process Client’s FRB and Clearing House return cash letters. Returned items will be resubmitted, charged back to the customer account or processed in other manner based on prearranged agreements.
 •         Returns that are charged in from
the Federal Reserve or Clearing House. Inbound returns will be captured upon arrival and dispositioned according to Client’s requirements. Required adjustments will be prepared and forwarded to the Client in a batch mode for posting. Notices
will be prepared for mailing to the customer. A future option will be to include images of the related items with the notice
 •         Print and mail return item notices with checks.
 Statement Rendering
 Imaged statements and CD’s will be printed, metered and mailed by Vendor for all Checking and Savings accounts based on Client’s
instructions. Vendor will also verify enclosure counts, meter and mail statements on non-imaged accounts. Any account having an image or document discrepancy (cripple statement) that can not be resolved by Vendor will be forwarded to Client for
handling. At their request, Vendor will insert marketing or other informational material in out-going statements.
 Document Storage
 Vendor will store Client’s physical items at its facility for safekeeping until they are disposed of unless instructed to deliver them to Client.
 Optical Image Storage
 Vendor will archive document images from Client’s designated RAID unit to Vendor’s Optical Disk
system as needed for long term storage.
 Report Printing
 All daily and periodic stock paper
reports will be printed by Vendor for distribution to Client.
 Notices and Special Forms
 Any
printed system output requiring special forms will be produced by Vendor for distribution to Client or its customer.
 Application Output Files
 Vendor will create application output files and make them available to designated third party processors per list and schedule TBD.
 Electronic File Transmission
 Vendor will transmit captured item data to Client’s Account Processing vendor via high speed data
communications for input to Participating Bank’s processing system and third party processors as defined in transmission schedule.
 Sort Pattern Changes

 Vendor will receive requests for sort pattern changes from Client for testing and implementation.
 
18

  Confidential Treatment Requested
  
 SCHEDULE 1.4
 
 Service Level Standards
 

[****]
 
 
 19

  Confidential Treatment Requested
 Table 1
 Service Level Agreements Applicable to Vendor
  

	  
 	  
 	 Functional
 Area
 	  
 	 Agreement
 	  
 	 Goal
 	  
 	 Minimal
 Acceptable
 Level

(MAL)
 	  
 	 Service
 Level
 Agreement
 Default
 	  
 	 Comment
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 1
 	  
 	 Transit             
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Client will supply, and keep updated all presentment schedules
 Measurement:
 Timely
deliveries/total deliveries
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 2
 	  
 	 Same day Settlement
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Timely deliveries/total deliveries
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 3
 	  
 	 Same day settlement
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Timely deliveries/total deliveries
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 4
 	  
 	 Reports
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Timely deliveries/total deliveries
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 5
 	  
 	 Reports
 	  
 	 [****] 
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Items to be included to be determined by Client.
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 6
 	  
 	 Quality
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Timely requests/total requests
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 7
 	  
 	 Quality
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	  
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 8
 	  
 	 Quality
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 # Not Reported/Total Differences in Excess of $100,000
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 9
 	  
 	 Quality
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Exceptions mutually agreed to by Client and the Vendor group.
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 10
 	  
 	 Quality
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Branch, customer and 
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 

 
 

 
 
 20

  Confidential Treatment Requested
  

	  
 	  
 	  
 	  
 	 [****]
 	  
 	  
 	  
 	  
 	  
 	  
 	  
 	 department reported errors
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 11
 	  
 	 Transmission
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Detailed schedule attached.
 Measurement:
 Timely transmissions/ total
trans.
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 12
 	  
 	 Image Archive
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Daily Production Mgt Report
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 13
 	  
 	 Image Archive
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Peak Hours 7am-5pm M-F
 Measurement: TBD
 Scheduled down time must be mutually agreed
to by both vendor and bank.
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 14
 	  
 	 Image Archive
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Near term storage
 Peak Hours 7am-5pm M-F
 Measurement:
 TBD.

 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 15
 	  
 	 Image Archive
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Scheduling to be agreed on by Vendor and bank
 Measurement:
 TBD
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 16
 	  
 	 Power Encode
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Quality reports prepared by customer
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 17
 	  
 	 Processing
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Monthly quality reports
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 18
 	  
 	 Statement Quality
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Monthly quality reports
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 19
 	  
 	 Statement Mailing
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Mutually agreed upon schedule.
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 20
 	  
 	 Returns
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Timely days/working days
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 21
 	  
 	 Item Retrieval
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Timely requests/total requests
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 22
 	  
 	 Check Sorting
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Timely sorts/total sorts
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 23
 	  
 	 Check Capture
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Detailed schedule 
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 

 

 21

  Confidential Treatment Requested
  

	  
 	  
 	  
 	  
 	  
 	  
 	  
 	  
 	  
 	  
 	  
 	  
 	 attached.
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 24
 	  
 	 Check Capture
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Requirements defined case by case.
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 

 
 Part II - SLA Detailed Schedule for Vendor
 SLA information
 1.        Statement Processing: The purpose of this goal is to insure the timely delivery of Customer Statements. “Statement date” is the date on
the statement
 a.        [****]
 b.        [****]
 c.        [****]
 d.        [****]

e.        [****]
 f.         [****]
 2.        Capture Sort Tables 
 Sort pattern/Tables to be established and agreed upon
between Client and Vendor no later than 30 days prior to conversion.
  

	 Day
 	  
 	 Sort Type
 	  
 	 Start Time
 	  
 	 Stop Time
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	  
 	  
 	  
 	  
 	  
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	  
 	  
 	  
 	  
 	  
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 

 
 3.        Transmission Schedule
  

	 Transmission
 	  
 	 Completion Time
 	  
 
	 
 	 
 	 
 	 
 
	 Core application transmission to AP Vendor
 	  
 	 1 AM Monday—Friday
 	  
 
	 
 	 
 	 
 	 
 
	  
 	  
 	  
 	  
 
	 
 	 
 	 
 	 
 

 
 Remaining application schedules to be agreed
upon between Client and Vendor and all other vendors as necessary within 60 days of contract signing.
 4.        Daily Report Requirements
 Reportable items to be
determined by Client and Vendor and embodied in an addendum signed by the parties referring hereto.
 5.        Quality Reporting
 

 
 
 22

  Confidential Treatment Requested
 Reportable items to be determined by Bank and Vendor and embodied in an addendum signed by the parties referring hereto.
 
 23

  Confidential Treatment Requested
 Part III - Item Processing
Instructions for Client
 1.         If Client
Service Level Agreement (“SLA”) goal is not met, Vendor expects Client to make necessary adjustments to attain agreed upon goals. Until adjustments are made and performance goals are met Vendor will be relieved from meeting related SLA
requirements or reimbursed for agreed upon extraordinary expenses incurred to meet SLA despite Client’s lack of performance.
 2.         Client will appoint an individual to be designated as a Liaison Officer responsible for providing a common point for receipt of all notification
as it relates to items described in Part I above.
 3.         Should Client utilize subcontractors to provide services that interface to Vendor, Client will continue to be accountable for all SLA’s set forth in Table 2.
 4.         A monthly in person review meeting of Vendor/Client performance and projects will be held with the
Vendor location manager, Client Liaison Officer and other invited individuals that are required to ensure communications between Vendor and Client are occurring on a regular basis. 
 5.         Client will contact Vendor with any exceptions in processing as soon as reasonably practicable upon
awareness of occurrence. Client will request an action plan, if appropriate, to be delivered by Vendor within one business day of notification to recover or resolve the exception event.
 6.         When Client requests changes to sort patterns or processes Client will supply at the time of the
request a test script and test documents to be used to validate the results.
 7.         Client will allow Vendor to review and approve all CAR/LAR documents to be ordered with a reasonable lead time to ensure compliance with document standards.

8.         Client will seek to ensure Vendor that Client and/or
any third party processors are meeting or exceeding applicable industry security requirements as defined in “Sovereign Bank Policies Regarding Outsourced System and Data Security”.
 Table 2 
 Service Level Agreements Applicable to Client
  

	  
 	  
 	 Functional Area
 	  
 	 Agreement
 	  
 	 Goal
 	  
 	 Comments
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 2
 	  
 	 Branch Input Quality
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Errors/Branch/Month
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 3a
 	  
 	 Return Items-Exceptions
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Daily Release Times
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 3b
 	  
 	  
 	  
 	 [****]
 	  
 	  
 	  
 	  
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 4
 	  
 	 Item Quality
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 CAR/LAR Statistics Report
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 5a
 	  
 	 Statements
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Check Return statements per month/ total statements
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 

 
  
 
 24

  Confidential Treatment Requested
  

	 5b
 	  
 	  
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Statement Data Receipt on
 time/Processing Days
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 6
 	  
 	 Supplies
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Monthly inventory report of stock on hand.
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 7
 	  
 	 Quality
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Exceptions mutually agreed to by Client and Vendor.
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 8
 	  
 	 Transmission
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Detailed scheduleTBD.
 Measurement:
 Timely transmissions/ total trans.

	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 
	 9
 	  
 	 Missing Report
 Log
 	  
 	 [****]
 	  
 	 [****]
 	  
 	 Measurement:
 Monthly Missing Report Log
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 	 
 

 

 25

  Confidential Treatment Requested
 Part V — SLA Detailed
Schedule For Client
 SLA Information required by Vendor from Client
 1.             Delivery of Transaction Processing Items:
 The purpose of this
measurement is to insure the input documents are available to be processed in a timely basis to meet the Federal Reserve clearing deadlines and input to the Account Processing provider provides for timely delivery of balances and exception
processing to serve the customers and Business Associates as agreed.
 Specific delivery requirements will be defined for New England within ninety (90) days and for Mid-Atlantic
within one hundred fifty (150) days after this Agreement is executed.
 2.             Transmission Schedule: 
 To be developed by Client and Vendor with
Account Processor and embodied in an addendum signed by the parties referring hereto.
 3.             Report Schedule Distribution: 
 To be developed by Client and
Vendor prior to Implementation after transportation mapping is completed and embodied in an addendum signed by the parties referring hereto.
  
 
 26

    Confidential Treatment Requested
 SCHEDULE 2.1
 FEES
   

	 Implementation 
 Cost:
 	  
 	 $[****]
 	  
 
	  
 	  
 	  
 	  
 
	 License Fees:
 	  
 	 Included in monthly production charges
 	  
 
	  
 	  
 	  
 	  
 
	 Production Cost:
 	  
 	 $[****] per prime pass item plus additional costs as detailed
below
 	  
 

 Functions
included:
   

	 Function
 	  
 	 Service
 	  
 	 Yes / No
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Proof / Capture / Balancing
 	  
 	 ATM Deposit Processing
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 CAR/LAR
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Cash Received in Proof
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Cash Deposits received from Teller
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Deposit Corrections
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 E. I. P Sort
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Image In-Clearing Capture
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Image POD/Transit Capture
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 In-Clearing Reject Re-entry
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Key Entry
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Power Encoding
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Proof Encoding
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Receipt log & tracking
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Research & Adjustments
 	  
 	 Yes ($[****]/item)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Same Day Settlement
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Sort Pattern Changes
 	  
 	 Yes (Program’s fee $[****]/hr = [****]% discount of standard rate)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Sort Pattern Endpoint Changes
 	  
 	 Yes (Program’g fee $[****]/hr = [****]% discount of standard rate)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Availability Changes
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Custom Programming
 	  
 	 [****]% of Vendor standard rate
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Transit Cash Letter Preparation
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Transit Reject Re-entry
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	  
 	  
 	  
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Exception Processing
 	  
 	 Exception Images
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Image In-bound
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Inbound Returns – RDIs 
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Large $ Return Process-EARNS
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Manual/ Late Returns
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Notice and Mail Print – Returns
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Qualified Outbound Returns
 	  
 	 Yes ($[****]/item)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Raw Out-Bound Returns
 	  
 	 Yes ($[****]/item)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Return Image System
 	  
 	 Interface for new SOV product
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 OverDraft Notice Mailing
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Paid Exception Sort
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 

   

	 Statement Production
 	  
 	 Bulk File
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 CD Creation (originals & duplicates)
 	  
 	 Yes ($[****]/CD & $[****]/dupl)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 

 

 
 
 27

  Confidential Treatment Requested
   

	  
 	  
 	 Cripple Statement Rendering
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Enclosure Statements - Automated
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Enclosure Statements - Manual
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Image Statement print
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Image Statement Rendering
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Non- Enclosure Statements
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Printing – “Other”
 	  
 	 Yes (Daily IP related)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Serial Sort over 2%
 	  
 	 Yes ($[****]/item)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Special Account Filing (B Bulk)
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Statement Enhancements
 	  
 	 Yes (Pre-conversion)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Statement fine sort
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Statement Inserts
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Statement Pages to Tape
 	  
 	 N/A
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Statement print
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Statement Reformat
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	  
 	  
 	  
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Application Output Files
 	  
 	 Atchley BSA output file
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Carreker ASI 16 & 19 Output file
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Controlled Disbursement processing
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 IP Capture File Transmission
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Official Checks/Money Orders output file
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Research & Adjustments output file
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Safe Deposit Box Payments output file
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	  
 	  
 	  
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Microfilm
 	  
 	 Microfilm Duplicates
 	  
 	 N/A
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Microfilm Item Retrieval
 	  
 	 N/A
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Microfilm Originals
 	  
 	 N/A
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	  
 	  
 	  
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Other
 	  
 	 Archive Access – Image view
 	  
 	 Yes – [****] seats ($[****] per seat for 
 any additional seats)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Image Depot
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Home Banking API
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Internet/Intranet Image View Access
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Statements with Check Images
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Carreker Float Module Processing
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Daily Fax
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Data Communication & Telecom Costs
 	  
 	 No
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Envelopes/Boxes/Print Stock
 	  
 	 No
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Microfiche (original & duplicates)
 	  
 	 N/A
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Non-statement Mailing
 	  
 	 Yes (Daily IP related)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Physical Item Pull
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Printing – paper stock
 	  
 	 Yes (Daily DDA related)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Programming of Residual Paper
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Travel Expenses
 	  
 	 If requested by Client
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Postage
 	  
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 

 
 ______________

      1    Each month Vendor
will give Client an estimate of the projected postage reimbursement to which Vendor will be entitled hereunder for the upcoming months’ mailings and Client will pay Vendor such estimated amount. Vendor’s monthly invoice shall reconcile and
adjust (up or down) for the actual postage charge incurred by Vendor for the applicable month for which Vendor is entitled to reimbursement hereunder versus the estimated amount collected from Client for that month.
  
 

 
 28

   Confidential Treatment Requested  
  

	  
 	  
 	 Courier Charges Client to Vendor
 	  
 	 Banks expense
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Courier Charges Vendor to End Point
 	  
 	 Pass Thru Vendor
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Courier Charges Vendor to Vendor
 	  
 	 Vendor cost
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Courier Charges Vendor to Client
 	  
 	 Only if Client SLA’s are
 not met
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Data Communication Lines
 	  
 	 Pass thru bank expense
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Add Internal R/T for Deposits
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Add New ARP Customers
 	  
 	 Yes
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Research Time
 	  
 	 Yes ($[****]/hr)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	  
 	  
 	 Storage & Destruction of paper items
 	  
 	 Yes (Storage 45 days)
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 

 

 

  
 29

  Confidential Treatment Requested 
 

	 Description
 	  
 	 New England
 	  
 	 Mid-Atlantic
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 A.        PROOF OF DEPOSIT
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 POD – unencoded
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 In-clearing
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Reject re-entry: Transit 
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Reject re-entry: In-clearing
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Deposit Corrections
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Deposit Error write-off
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 POD Research & Adjustments
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 In-clearing POD Research & Adjustments
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Exception / Cycle Sort
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Exception Processing
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Outbound Returns
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Large $ Notifications
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Item Retrievals
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Microfilm – Originals
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Microfilm – Duplicates
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Microfiche
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Statement Sort
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Bulk/Truncated Storage
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Statements – Image
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Statement Pages – Image
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Statements – Truncated
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Statement Pages – Truncated
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Statements – Conventional
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Statement Pages – Conventional
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Statement Items Inserted
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Crippled Statements
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 Other non-laser print pages
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 
	 CD-Rom Creation
 	  
 	 [****]
 	 
 	 [****]
 	  
 
	 
 	 
 	 
 	 
 	 
 	 
 

 
 •          There is no limit on volume of transaction images stored in the archive and/or a maximum volume of inquiries.
 •          Pricing Includes
[****] hours per month ([***] hours per year) for system development. Vendor commits that the monthly programming bill for any routine modifications or other minor enhancements or changes to services that are currently being provided and any
services included in the proposed solution will not exceed $[****] per month.
 

 30

  Confidential Treatment Requested 
 SCHEDULE 4.3
 SPECIAL EMPLOYEE PROVISIONS 
 Vendor understands that Client and Client’s Affiliates operate
under various laws and federal regulatory agencies that are unique to the security sensitive banking industry. As such, persons engaged by Vendor to provide services under this Agreement are held to a higher standard of conduct and scrutiny than in
other industries or business enterprises. Vendor understands and acknowledges that its employee(s) (“Employee(s)”) shall possess appropriate character, disposition and honesty conducive to the environment where services are provided under
the Agreement. Vendor shall to the extent permitted by law, exercise reasonable and prudent efforts to comply with the security provisions of the Agreement.
 1.        Access. Vendor shall not knowingly permit an Employee(s) to have access to the premises, records or data, or to engage in the
conduct of Client’s affairs of Client or Client’s affiliates when such Employee(s):(a) has been convicted of a crime or has agreed to or entered into a pretrial diversion or similar program in connection with (i) a dishonest act
or a breach of trust, as stipulated under Section 19 of the Federal Deposit Insurance Act, 12 U.S.C. 1829(a); and/or (ii) a felony; (b) uses illegal drugs; (c) is an individual identified, known or suspected to have connections
with any person or organization identified by the United States Department of the Treasury Office of Foreign Asset Control (“USOFAC”) as a criminal, terrorist or criminal or terrorist organization.
 2.        Compliance. Upon request from Client, Vendor shall provide evidence of
Vendor’s actions to comply with the above provisions for its Employee(s). Such evidence of compliance may include the following:(1) a written affirmation by the Employee that he/she had not been convicted of any criminal offense involving
dishonesty, a breach of trust, or money laundering and had not agreed to enter in a pre-trial diversion or similar program in connection with the same; (2) evidence that Vendor took reasonable steps to verify the truth of the Employee’s
statement, including conducting a criminal record check; (3) certification by Vendor that its investigation did not reveal any (i) conviction or any pre-trial diversion agreement relating to any criminal offense involving dishonesty, a
breach of trust or money laundering, or (ii) USOFAC violation. 
 3.        Notification. Client shall notify Vendor of any act of dishonesty or breach of trust committed against Client or Client’s affiliates which may involve an Employee(s) and Vendor shall notify Client if it becomes
aware of any such offense. Following such notice, at the request of Client and to the extent permitted by law, Vendor shall cooperate with investigations conducted by or on behalf of Client or Client’s affiliates. Such cooperation may include
access to Vendor’s Employee(s) for personal interviews related to such investigations. In addition, at the request of Client Vendor shall conduct its own investigations into the activities of said Employee(s), which may include polygraph
examinations when permitted by law and not specifically prohibited by, existing collective bargaining (union) agreements or state statutes, with the results of such investigations and all files and records related thereto being made available to
Client.
 4.        Internal Controls. Vendor shall
cooperate with the internal operating controls and security processes of Client and Client’s affiliates where products and/or services are provided under this Agreement.
 When requested by Client, Vendor shall cooperate with Client, and third parties retained by Client, in conducting background investigations concerning the Vendor’s Employees, including but not limited to causing
fingerprint cards to be processed through the screening program administered by the American Bankers Association (“ABA”) for each Employee having access to the premises, records or data of Client or Client’s affiliates. The completed
fingerprint cards and resulting Employee(s) background reports are to be returned directly to Client, who will then inform Vendor of exceptions to any Employee(s) whose background proves unacceptable to Client.
 Vendor acknowledges the Federal Drug Free Workplace Act of 1998 (“Federal Act”). Client has adopted the guidelines of this Federal Act for its corporate substance abuse
policy. Vendor shall, when requested by Client, cause a drug test to be performed on each Employee having access to the premises, records or data of Client or Client’s affiliates, in accordance with the guidelines set forth in the Federal Act.
Vendor shall deliver to Client the results of such tests for evaluation and exception to any Employee whose drug test proves unacceptable to Client.
 Subject
to the provisions of the Employee Polygraph Protection Art of 1988 (the “Polygraph Act”), Vendor agrees to fully cooperate with Client in situations where Client or Client’s affiliates have suffered an economic loss or injury (as
interpreted under the Polygraph Act). Without limiting the foregoing when requested by Client where Client evidences an economic loss or injury and it is shown that:
 
 31

  Confidential Treatment Requested
 (a)    An Employee(s) had access to the premises, records or data that are the subject of the investigation, and
 (b)    There is basis for reasonable suspicions that such Employee was involved in the incident or activity under investigation, then Vendor shall request the
Employee(s) to take a polygraph examination with an examiner approved by Client. In all situations where the polygraph test is utilized as a part of the investigative process, Vendor shall be solely responsible for the administration of the
polygraph test, in accordance with the Polygraph Act.
 5.        Policies
and Procedures of Bank. Vendor and its employees assigned to Client and any employees assigned to Client by an agent, contractor or subcontractor of Vendor shall comply with this Schedule and the policies and procedures of
Client, as in effect from time to time. Vendor shall be responsible for its agents, contractors and subcontractors. 
 
 32

  Confidential Treatment Requested 
 SCHEDULE 5.1.12
 Sovereign Bank Policies Regarding
Outsourced System and Data Security
 This Schedule is attached to and forms a part of the Master Services Agreement (the “Agreement”) between Sovereign Bank (“Client”) and InterCept Inc. (“Vendor”). If provisions in the
Agreement and this Schedule impose inconsistent obligations on Vendor, the provisions of this Schedule shall control. Obligations set forth herein that are more stringent than (or additional to) those of the Agreement shall be deemed cumulative, not
inconsistent.
 1.             Vendor agrees to comply with, and require
its Representatives who are assigned to perform services under this contract to comply with, industry standards for information security. 
 2.             Vendor shall name an information security liaison (“VISL”) (and a named backup person) to work with Client’s information security
(“SIS”) team to review and coordinate information security policy requirements, standards and practices. Any changes in the VISL shall require advance written notice to Client. 
 3.             In addition to the general covenants of legal compliance set forth in the Agreement, Vendor shall
adhere to all applicable regulatory requirements pertaining to privacy and handling of customer information, including those that become applicable by reason of international business activities of Client or Vendor. If vendor intends to use any
processing facility located outside the United States to process any data relating to Client or its customers or otherwise transmit any data relating to Client or its customers across national borders, vendor shall provide advance written notice to
Client. If Vendor proposes to do so, Vendor shall see that all related processing facilities and systems comply with all applicable laws, regulations, treaties, and other legal requirements of the United States, all other affected countries, and any
international organizations having jurisdiction, including without limitation, those with regard to data security and privacy, data processing and transmittal of data across national borders. 
 4.             In addition to any audits required by the Agreement, at Client’s request, Vendor shall submit
its privacy statement and policy as well as its data privacy and information systems security measures and policies to an audit by Client and its counsel and representatives, or a mutually agreeable third party. Vendor shall remedy any shortcomings
identified in such audit and make all changes necessary to comply with applicable law, and otherwise see that its policies and systems conform to any reasonable requests made by Client or such auditors.
 5.             The vendor shall maintain Client’s data in separate datasets at all times and shall maintain a
hardware/software configuration that ensures no other clients will have a logical path to Client’s data
 6.             Vendor shall encrypt all data transmissions in accordance with Client’s encryption policy and standards.
 7.             Vendor shall provide evidence that an intrusion detection system is installed
and that monitoring is performed on a continuing basis. Vendor shall maintain sufficient software, hardware, systems, personnel and other resources to ascertain whether a penetration attempt is being made against any part of the network, mainframe,
server or other infrastructure or facilities used by Vendor to process or transport Client information. Vendor will identify and advise Client of any internal and external risks noted that could result in unauthorized disclosure, misuse, alteration
or destruction of or access to customer information or Client information systems and implement appropriate internal technical and procedural controls to prevent such intrusions.
 8.             Vendor shall periodically perform or contract with an independent party to perform appropriate vulnerability scans and
penetration testing, shall advise Client thereof of the scope (in advance, unless impractical or such notice would invalidate the integrity of the simulation) and of the results of such testing.
 9.             Vendor shall assure that appropriate audit trails and logs of all activities affecting Client
processing and data are captured, periodically reviewed and retained by Vendor for a period of at least 1 year after termination of the Agreement.
 10.           Vendor shall provide Client, upon request, with documentation of the validity of all licenses for operating system and non-client provided application
software used in performing services for Client, including all database and storage systems, product names, version and release numbers and patch revision history being used by Vendor or its subcontractors in the processing of Client software and
data.
 
 33

  Confidential Treatment Requested
 11.           Ownership and licensing rights with respect to Vendor’s system (including source code of software used by Vendor or its subcontractors to perform
Services, processes, concepts, etc.) shall be clearly documented and disclosed to Client in writing in advance. Vendor shall enter into escrow agreements (and see that its mission-critical subcontractors do the same) in commercially reasonable form
and substance ensuring Vendor (or its subcontractors, as the case may be) the right to access the appropriate object and source code should the software provider become insolvent or fail or refuse to provide any necessary software maintenance and
support.
 12.           System controls associated with all platforms and the
networks or network interfaces used to process Client applications and data shall be managed and maintained in accordance with industry standards, including remediation of vulnerabilities and known bugs that could cause exposure to malfunctions,
errors or malicious activity as soon as possible.
 13.           The information and
materials processed or stored by Vendor on behalf of Client shall be handled in accordance with the classification (e.g., confidential, sensitive, public) of the information under applicable regulations as well as Vendor’s standards and
policies, as in effect from time to time.
 14.           Use of data by Vendor for
data mining or for any purpose other than the processing directly contracted by Client shall not be allowed without the express written permission of an executive officer of Client or Chief Privacy Officer.
 15.           The release of any user information, such as access rights, shall be made only to the appropriately authorized
personnel as defined by the Client application owner.
 16.           Production data
shall not be copied to any test environment unless appropriate masking is performed or adequate controls are implemented.
 17.           Software, data, written materials, hardcopy of printouts, and storage media containing Client data shall be secured at all times from unauthorized copying,
use, duplication, and storage, and shall be securely destroyed when no longer required. Vendor shall ensure the proper degaussing, cleansing, disposal or destruction of data contained on all media (e.g., shredding of paper, microfiche, degaussing of
optical, magnetic and other media, computer drives and disks).
 18.           Access
to production data and software for non-Client and Vendor employees shall be based on authorized job-related responsibilities. A record of all access requests and authorization shall be maintained and used by authorized parties alone to verify the
work of the personnel implementing the access capability to the systems. A record of all access requests and authorizations granted shall be maintained for use by authorized parties to verify the work of the personnel implementing the access
capability to the systems. 
 19.           Vendor shall log all actual or attempted
log-on violations as well as access violations and provide them on a daily basis to an appropriately identified person within Client Bank for action. 
 20.           Vendor shall generate access history logs for critical application transactions, retain the logs for at least one year, and keep them accessible in a format
mutually agreeable to by Client and Vendor, for Client’s review, search, copying and reproduction. 
 21.           Where possible, the access ID, password format or other access device (e.g., smartcard) shall be consistent with the criteria set forth in the Client
policies. Requirements include ID and password minimum characters, logging, suspension, and reset.
 22.           Vendor shall ensure at least the same level of separation of duties as provided in Client’s applicable policy. Separation of duties shall be stated for
security administration, review of access and violation reports when those responsibilities remain the responsibility of Vendor, and Vendor shall maintain separation between development personnel and operations, as well as other potentially
conflicting roles as necessary or as reasonably requested by Client.
 23.           Vendor shall procure for Client the right to audit all contracts between Vendor and Vendor’s service providers who support, store, recover, or otherwise handle the systems or data associated with the Client relationship.
 24.           Vendor shall validate the accuracy of all access control lists that allow any
Vendor or Client users to access Client data, software, files and operational software, and on semi-annual basis provide SIS with the evidence of such validations. Such validations will include application transactions, application datasets and
files, any operating system special privileges, system utilities and tools authorities, database software privileges, software management functions, console command authorities, security administration authorities, operating system and security
parameters definitions.
 
 34

  Confidential Treatment Requested
 25.           Vendor shall provide SIS with the capability to review all access control and security parameter definition lists that directly or indirectly control the
access to Client data. Vendor will provide SIS with real-time tools or batch reporting facilities, as for example RACF auditor privilege, that enable SIS to review and to produce effective security information at both application and file and
dataset levels.
 26.           An incident response process based on a collaborative
approach among Client and Vendor shall be developed to respond rapidly and effectively to security incidents. The incident notification process shall be outlined in the Agreement and will include whom to notify, how to notify, and when notification
will occur. Vendor will provide Client with access to all related logs, audit trails, system configuration data and security reports related to any security incident. VISL and SIS shall validate that any security weakness has been corrected. The
responsibility for filing the required incident reports for regulators and management will be directed by SIS in cooperation with VISL.
 
 35

  Confidential Treatment Requested 
 SCHEDULE 8
 CONFIDENTIALITY AGREEMENT
 DATED: January 21, 2003
 This Confidentiality Agreement (the “Agreement”) is made and entered into as of the above date by and between INTERCEPT
INC. (“Vendor”), a Georgia corporation with offices located at 3150 Holcomb Bridge Road, Suite 200, Norcross Georgia 30071 and SOVEREIGN BANK, a federal savings bank
with offices located at 1130 Berkshire Blvd, Wyomissing, PA 19610, on its own behalf and for the benefit of its affiliates (“Bank”). In connection with the business dealings between Vendor and Bank, a party (the “receiving
party”) may have access to confidential and proprietary technical, financial, business and other information of the other party and its affiliates (the “disclosing party”). In consideration of the foregoing and such other good and
valuable consideration, the receipt of which is hereby acknowledged, and intending to be legally bound, Bank and Vendor agree as follows:
 1.             The term “Information” refers to specifications, samples, reports, plans, forecasts, current or historical data, computer programs,
documentation, market and business research and plans, trade secrets, notes, analyses, compilations, studies, interpretations, employee or customer information, the information of the disclosing party’s suppliers or other vendors, and all
technical, financial, business or other information of the disclosing party, whether received prior to, on or after the date of this Agreement, orally, in writing, in electronic format, by electronic or other means.
 2.             Vendor acknowledges that Bank, in disclosing to Vendor certain customer
information that may be part of the Information (the “Nonpublic Personal Information”), must comply with the provisions of the federal Gramm-Leach-Bliley Act and its implementing regulations (“GLBA”), regulatory standards for
information security, and other federal and state laws regarding the privacy and confidentiality of customer records. Consistent with the provisions of GLBA and such other laws and regulations, Vendor shall implement appropriate measures designed to
ensure the security and confidentiality of the Nonpublic Personal Information, protect against any anticipated threats or hazards to the security or of such information, and protect against unauthorized access or use of such information. Vendor
shall provide to Bank copies of all audits and summaries of test results performed periodically by Vendor or Vendor’s external auditors relating to Vendor’s information security measures. From time to time, Bank, its auditors, its
regulators and/or third party auditor(s) designated by Bank may conduct examinations and audits of Vendor, its Representatives (as defined below), and the system and facilities used to provide Vendor’s services. Vendor shall cooperate with all
such audits. Bank shall give Vendor, as permitted, reasonable advance notice of all audits and shall perform all audits at reasonable times. Vendor acknowledges that GLBA, among other things, limits the right of recipients to use and redisclose the
Nonpublic Personal Information, and Vendor agrees that its use of the Nonpublic Personal Information will be consistent with the limits imposed by GLBA and other applicable laws and regulations.
 3.             The receiving party agrees to: (a) keep the Information of the disclosing party confidential
and secure; (b) restrict disclosure of such Information solely to its officers, employees, affiliates, agents and consultants with a need to know such Information for purposes of the business dealings between the parties (the persons to whom
disclosure is permissible being collectively called “Representatives”); (c) not disclose to any other person or copy such Information without the approval of the disclosing party; (d) use such Information solely for purposes of the
business dealings between the parties and not in any way directly or indirectly detrimental to the disclosing party; and (e) inform the Representatives of the confidential nature of such Information and obtain their agreement to the obligations
herein set forth.
 4.             The obligations imposed in this
Agreement do not apply to Information: (a) which is made public by the disclosing party; (b) which rightfully becomes generally available to the public; (c) which is rightfully received from a third party without restriction and without breach of
this Agreement; or (d) which is independently developed by the receiving party without any reference to the Information of the disclosing party.
 5.             Nothing contained in this Agreement shall be construed as granting or conferring any rights by license or otherwise in any Information disclosed
to the receiving party. All rights in and to the Information of the disclosing party shall remain with the disclosing party. The Information of the disclosing party and all notes, abstracts, memoranda, or other documents or media which contain
Information of the disclosing party or any discussion thereof, shall be destroyed or returned to the disclosing party upon written request of the disclosing party. No disclosure of any Information hereunder shall be construed a public disclosure of
such Information by either party.
 
 36

  Confidential Treatment Requested
 6.             In the event that the receiving party or any of its Representatives become legally compelled (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process) to disclose any Information of the disclosing party, the receiving party shall provide the disclosing party with prompt prior written notice of such requirement so that the
disclosing party may seek a protective order or other appropriate remedy. 
 7.             The furnishing of Information hereunder shall not obligate either party to enter into any further agreement or negotiation with the other or to
refrain from entering into an agreement or negotiation with any other person.
 8.             The termination of any agreement or business relationship between, or involving both Vendor and Bank, shall not relieve Vendor or Bank of its
obligations with respect to Information disclosed pursuant to the terms of this Agreement. The receiving party shall be liable for breaches of this Agreement by its Representatives.
 9.             The parties acknowledge and agree that any breach or threatened breach of any of the provisions hereunder will result
in immediate and irreparable harm to the disclosing party’s business interests and that remedies at law in such event will be inadequate. The disclosing party shall therefore have the right to seek immediate injunctive relief against such
breach. This right shall, however, be in addition to and not in lieu of any other remedies at law or in equity. 
 10.           This Agreement contains the entire understanding of the parties and supersedes all prior agreements and understandings between them with respect to the
subject matter in this Agreement. No amendment of this Agreement may be made or rider added except in writing duly signed by Bank and Vendor. A fax copy of this Agreement and signature shall have the same effect and be legally enforceable as an
originally executed Agreement. This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania without regard to conflicts of law principles. Limitations of liability or damages in any other
agreement(s) between the parties shall not apply to the extent of any breaches of or liability arising under this Agreement. 
 11.           Neither Vendor nor Bank shall, without the prior written consent of the other, assign this Agreement; provided, however, Bank shall have the right to
transfer or assign this Agreement, without such consent, to any affiliate (as defined in Section 12 below). An assignment in violation of this Section 11 shall be null and void. 
 12.           As used in this Agreement, the term “affiliate” shall mean with respect to a party hereto any other person at any time
now or hereafter controlling such party, or controlled by or under common control with such party and the term “person” includes any individual or corporation, partnership or other entity.
 Accepted and agreed as of the date set forth above.
  

	 SOVEREIGN BANK
 	  
 	 INTERCEPT INC
 
	 By: 
 	 
 /s/ PAUL A. WATERS
JR.
 	  
 	 By: 
 	 
 /s/ RANDY FLUITT
 
	  
 	 
 	  
 	  
 	 
 
	 Print Name: 
 	 Paul A. Waters Jr.
 	  
 	 Print Name: 
 	 Randy Fluitt
 
	 Title: 
 	 Executive Director,
 Transaction Services
 	  
 	 Title: 
 	 Executive Vice President
 
							

 
  

	 [****]
 	 Omitted pursuant to a request for confidential treatment and filed separately with the Commission.
 

 
 
 37Consent and Release dated December 4, 2002

  EXHIBIT 10.39
  December 4th, 2002
  Netzee, Inc.
 6190 Powers Ferry Road, Suite 400
 Atlanta, Georgia  30339
 Attention:  Jarett J. Janik, Vice President and Chief Financial Officer
            Re:     Consent and Release under Amended and Restated Credit Agreement
  Dear Mr.
Janik:
            Reference is made to that certain Amended and Restated Credit Agreement dated as of February 2, 2001 among Netzee, Inc.
(“Borrower”), John H. Harland Company, as a Lender (“Harland”), and InterCept, Inc., as a Lender (“Intercept”) and as Agent for the Lenders (in such capacity, the “Agent”), as amended on March 29, 2002 (as
further amended, restated, supplemented and otherwise modified from time to time, the “Credit Agreement”).  Capitalized terms used herein but without definition shall have the meanings ascribed to such terms in the Credit
Agreement.
            Borrower has requested that the Agent and the Lenders (a) grant their consent to the sale  (the “Asset Sale”)
by Borrower to Certegy Inc., either alone or through one or more of its affiliates (“Purchaser”), pursuant to that certain Asset Purchase Agreement of even date herewith between Borrower and Purchaser (the “Purchase Agreement”),
of the “Purchased Assets” (as defined in the Purchase Agreement), which Purchased Assets comprise substantially all the assets of Borrower; and (b) agree that receipt by the Agent on behalf of the Lenders of not less than $3,334,000 of the
net proceeds of the Asset Sale (the “Agreed Satisfaction Amount”) shall constitute satisfaction and payment in full of all of Borrower’s outstanding indebtedness to the Lenders under the Credit Agreement, and that upon such receipt,
(i) the commitments of each of the Lenders to extend further credit to Borrower under the Credit Agreement shall terminate, and (ii) the Agent shall release its security interest in the Assets.  The consents and agreements by Agent and the
Lenders set forth in this paragraph shall be referred to collectively as the “Consents and Release.”
           In order to induce the
Agent and the Lenders to grant their approval as provided herein, Borrower represents and warrants to the Agent and the Lenders that, after giving effect to the Consents and Release:
            (i)          all of the representations and warranties set forth in the Credit Agreement and the other Loan
Documents were accurate in all material respects as of the date hereof, except to the extent that such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been true and
correct on and as of such date; and
            (ii)          the Asset Sale does not, and when
consummated, will not, violate any term or provision of the Credit Agreement or create a Default or Event of Default thereunder, provided, 

   however, that the Agent on behalf of the Lenders, at the closing of the Asset Sale, receives cash proceeds of the sale of not less than the Agreed Satisfaction
Amount.
            In reliance upon the representations, warranties and undertakings herein provided by Borrower to the Agent and the Lenders, the
Agent and the Lenders hereby grant to Borrower the Consents and Release, provided, however, that the Agent on behalf of the Lenders, at the closing of the Asset Sale, receives cash proceeds of the sale of not less than the Agreed
Satisfaction Amount.
            Agent agrees to deliver to Borrower or Purchaser, at the closing of the Asset Sale and from time to time
thereafter, such Uniform Commercial Code (“UCC”) termination statements and statements of release, intellectual property releases, and other documents and instruments as Borrower or Purchaser shall reasonably request to evidence the
release of the Agent’s liens in the Assets, and if delivered to Borrower, Borrower shall be authorized to deliver such documents to Purchaser for recordation by Purchaser.
           Upon the closing of the Asset Sale and the receipt by the Agent on behalf of the Lenders, at the closing of the Asset Sale, of cash proceeds of the sale of not less
than of the Agreed Satisfaction Amount, (a) the commitments of each of the Lenders to extend further credit to Borrower under the Credit Agreement shall terminate, and (b) all of Borrower’s outstanding debts, liabilities and obligations under
all Loan Documents shall be satisfied in full and all persons obligated therefor, whether by guaranty or otherwise, shall be hereby released and discharged from any liability therefor and Borrower shall be hereby released and discharged from any and
all obligations, covenants and agreements under the Loan Documents, provided, however, that (i) Borrower shall continue to be obligated to each of the Lenders with respect to any indemnification and related obligations owed to each
such Lender under the Loan Documents, which obligations expressly survive the termination thereof; and (ii) the Loan Documents shall be automatically reinstated if at any time payment, in whole or in part, of any of Borrower’s outstanding
debts, liabilities and obligations under the Loan Documents is rescinded or must otherwise be restored or returned by the Agent or any Lender as a preference, fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar law, all as
though such payment had not been made, and provided, further, that if payment of all or any part of Borrower’s outstanding debts, liabilities and obligations under the Loan Documents is rescinded or must be restored or returned,
all reasonable costs and expenses (including without limitation any reasonable legal fees and disbursements) incurred by the Agent or any Lender in defending and enforcing such reinstatement shall be deemed to be included as an obligation of
Borrower under the Loan Documents.
            This approval letter may be executed by facsimile signature and issued in one or more counterparts,
each of which shall be an original and all of which together shall constitute one and the same agreement.  Borrower acknowledges and agrees that this approval letter constitutes a Loan Document and shall be governed by, construed and enforced
in accordance with the laws of the State of Georgia, without reference to the conflicts or choice of law principles thereof.  Please evidence your acknowledgment of and agreement to the foregoing by executing this letter below in the place
indicated.
 2

	  
 	  Yours very truly,
 
	  
 	  
 	  
 
	  
 	  INTERCEPT, INC., as Agentand Lender
 
	  
 	  *InterCept’s consent is predicated upon the satisfaction of all terms and conditions being satisfied in full as outlined on Attachment 1, which is made a
part hereof.
 
	  
 	  
 
	  
 	  By:
 	  /s/ GREGORY L. BOGGS
 
	  
 	 
 
	  
 	  Title: 
 	  President
 
	  
 	  
 	   
 
	  
 	 JOHN H. HARLAND COMPANY, as Lender
 
	  
 	  *Harland’s consent is predicated upon the satisfaction of all terms and conditions being satisfied in full as outlined on Attachment 2, which is made a part
hereof.
 
	  
 	  
 
	  
 	  By:
 	  /s/ JOHN W. WALTERS
 
	  
 	  
 	 
 
	  
 	  Title:
 	  VP
 
	  
 	  
 	   
 
	            The foregoing is accepted, and each term agreed to, as of the date first set forth above, by Netzee,
Inc. 
 
	   
 
	  
 	 NETZEE, INC.
 
	  
 	  
 
	  
 	  By: 
 	  /s/ JARRETT JANIK
 
	  
 	  
 	 
 
	  
 	  Title:  
 	  VP, CFO and Secretary
 
				

  3

   Attachment 1
  Conditions for InterCept Consent

	  •
 	  InterCept’s principal balance outstanding under Credit Agreement at time of closing will not be greater than $10,205,000
 
	  •
 	  All accrued and unpaid interest owed to InterCept under the Credit Agreement will be paid prior to Asset Sale
 
	 •
 	  No additional advances under the Credit Agreement will be made after December 3, 2002.
 
	  •
 	  The minimum payment to InterCept at Asset Sale to satisfy obligations owed to it under the Credit Agreement is $2,334,000.
 
	  •
 	  Netzee will place the source code for Netzee’s internet banking, bill payment, and integrated voice response software into escrow so that InterCept will have access thereto
in the event that Certegy ceases providing those services and supporting the software for customers who are mutual customers of InterCept and Netzee as of the closing date of the Asset Purchase.
 

 
4

   Attachment 2
  Conditions for Harland Consent

	  •
 	  Harland’s principal balance outstanding under Credit Agreement at time of closing will not be greater than $3,033,000
 
	  •
 	  All accrued and unpaid interest owed to Harland under Credit Agreement will be paid prior to Asset Sale
 
	  •
 	  No additional advances under the Credit Agreement will be made after December 3, 2002
 
	 •
 	 Harland and Netzee will provide mutual releases of liability
 
	 •
 	 The minimum payment to Harland at Asset Sale to satisfy obligations owed to it under the Credit Agreement is $1,000,000.
 
	 •
 	 Prior to the Asset Sale, Netzee will transfer to Harland either originals or copies of physical records, bank statements, electronic tapes and any other media, to allow Harland
in its sole and absolute discretion to perform reconcilement activity on the bill payment escheatment activities.
 
	 •
 	 Netzee will grant a limited use software license (royalty free) and provide the source code of Netzee’s  bill payment software. Harland will only use the software and
source code to assist it in the bill payment escheatment activities.
 
	 •
 	 Prior to the Asset Sale, Netzee will transfer to Harland the remaining balance in the US Bank bill payment account of approximately $143,000.
 
	 •
 	 Harland will release Netzee from all liability for bill payment activities related to any state escheatment issues for the period prior to March 12, 2001.
 

 5

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