FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 33-86993
Smith River Bankshares, Inc.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Virginia 54-1956616
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Suite 12, Patrick Henry Mall
730 East Church St. Martinsville, Virginia 24112
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(Address of principal executive offices) (Zip Code)
(540) 632-8092
- ------------------------------------------------------------
(Issuer's telephone number)
- ----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if
changed since last report.)
Check whether the issuer (1) filed all reports required to be filed by Section
12, 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. _ Yes X No [This Form 10-QSB is the first Exchange Act filing required
of the issuer. The issuer has been subject to Exchange Act filing requirements
for less than 90 days.]
12 shares outstanding as of November 30, 1999
Transitional Small Business Disclosure Format: ___Yes X No
1
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SMITH RIVER BANKSHARES, INC.
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis
Or Plan of Operation 12
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 15
Item 4. Submission of Matters to a Vote of
Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
Index to Exhibits 18
2
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SMITH RIVER BANKSHARES, INC.
PART I. FINANCIAL INFORMATION
---------------------
Item l. Financial Statements
--------------------
The financial statements filed as a part of Item 1 of Part I are as follows:
1. Balance Sheet as of September 30, 1999 (unaudited)
2. Statements of Loss for the quarter and inception-to-date periods ended
September 30, 1999 (unaudited)
3. Statement of Shareholders' Deficit for the inception-to-date period ended
September 30, 1999 (unaudited)
4. Statement of Cash Flows for the inception-to-date period ended September 30,
1999 (unaudited)
3
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SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Balance Sheet
(Unaudited)
September 30, 1999
ASSETS
Cash $ 102,153
Deferred stock issuance costs 62,868
---------
Total current assets 165,021
Furniture and fixtures 3,375
Other assets 2,187
---------
Total Assets $ 170,583
=========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable and accrued expenses $ 37,000
Advances from related parties 335,000
---------
Total Liabilities 372,000
---------
Shareholders' equity:
Preferred stock, no par value. Authorized
10,000,000 shares; none issued -
Common stock, no par value. Authorized
10,000,000 shares; issued and outstanding
12 shares 12
Deficit accumulated during the development
stage (201,429)
--------
Total shareholders' deficit (201,417)
--------
Total Liabilities and
Shareholders' Deficit $ 170,583
==========
See accompanying notes to financial statements.
4
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SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Statements of Loss
(Unaudited)
December 15, 1998
(Date of Inception)
Three Months Ended through
September 30, 1999 September 30, 1999
------------------ ------------------
REVENUES
Interest income $ 562 2,188
---------- -------
EXPENSES
Salaries and employee benefits 37,818 91,024
Occupancy expense, supplies and other 17,881 26,473
Professional fees 6,475 68,595
Regulatory application fees - 17,525
---------- -------
Total expenses 62,174 203,617
---------- -------
Net Loss $ (61,612) (201,429)
========== ========
Net Loss Per Share $ (5,134) (16,785)
========== ========
See accompanying notes to financial statements.
5
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SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Statement of Shareholders' Deficit
(Unaudited)
For the Period December 15, 1998
(Date of Inception)
Through September 30, 1999
Deficit
Number Accumulated
of During the Total
Common Common Development Shareholders'
Shares Stock Stage Deficit
------ ------ ------------ -------------
Issuance of common stock 12 $ 12 - 12
Net loss since inception - - (201,429) (201,429)
-------- -------- ------- -------
Balances at
September 30, 1999 12 $ 12 (201,429) (201,417)
======== ======== ======= =======
See accompanying notes to financial statements.
6
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SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Statement of Cash Flows
(Unaudited)
For the Period December 15, 1998
(Date of Inception)
Through September 30, 1999
Cash Flows From Operating Activities
Net loss $(201,429)
Increase in other assets (2,187)
Increase in accounts payable and accrued expenses 37,000
--------
Net cash used by operating activities (166,616)
--------
Cash Flows From Investing Activities
Purchase of fixed assets (3,375)
Net cash used by investing activities (3,375)
--------
Cash Flows From Financing Activities
Proceeds from advances from related parties 335,000
Proceeds from issuance of common stock 12
Costs of stock issuance (62,868)
--------
Net cash provided by financing activities 272,144
--------
Net increase in cash 102,153
Cash at inception -
Cash at end of period $102,153
========
See accompanying notes to financial statements.
SMITH RIVER BANKSHARES, INC.
7
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(A Development Stage Enterprise)
Notes to Financial Statements
(Unaudited)
September 30, 1999
1. SUMMARY OF ACCOUNTING POLICIES
(a) General
-------
The accompanying financial statements of Smith River Bankshares,
Inc. are unaudited. However, in the opinion of management, all
adjustments necessary for a fair presentation of the financial
statements have been included. All adjustments were of a normal
recurring nature, except as otherwise disclosed herein.
Smith River Bankshares, Inc. (the "Company"), a development stage
enterprise, was incorporated as a Virginia corporation effective
January 14, 1999, primarily to serve as a holding company for
Smith River Community Bank, N.A. (the "Bank"), upon formation of
the Bank. Prior to the formation of the Company, the Company's
shareholders (the "Organizers") formed FCNB LLC (the "LLC"), a
limited liability company, to organize the Company and the Bank
and provide for financing of organizational and other costs. The
financial statements reflect the operations of the Company and the
LLC since the date of formation, December 15, 1998. The Company is
in the process of completing the filing applications necessary to
form the Bank with the applicable regulatory authorities.
The Company anticipates raising between $6,250,000 and $10,000,000
through a public sale of its common stock. The Company filed a
registration statement on Form SB-2 to register the stock in
conjunction with its initial public offering. The registration
statement was declared effective by the Commission on November 4,
1999. Subject to the regulatory approval of the Bank's formation,
the Company plans to acquire all of the common stock of the Bank
with the proceeds from the sale of its common stock. Following the
acquisition, the business of the Company will be conducted through
the Bank, which will be its wholly-owned subsidiary. The Company's
year end is December 31. The Bank's market area will be south
central Virginia.
The offering also contemplates that the shares purchased by the
Organizers (maximum of 87,500 shares) would each have one common
stock warrant attached. The warrants will vest over a three year
period. Each warrant would entitle the holder to purchase one
share of common stock for $10.
8
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SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
(Unaudited)
The Company is totally dependent upon the successful completion of
the proposed offering as well as securing all required regulatory
approvals for its ability to commence its intended banking
operations. Based on current facts and circumstances, the
Organizers believe that the $6,250,000 minimum amount of capital
to be raised from the proposed sale of its common stock will be
sufficient to permit the Company to conduct its initial operations
as currently planned. To the extent the total capital raised in
this offering exceeds the $6,250,000 minimum, additional funds
will be available to invest in loans, securities and other earning
assets, subject to the limitations of the Board's investment and
lending policies. Such additional capital could also provide
additional funds to enable the Bank to open additional branches.
Preliminary approval from both the Office of the Comptroller of
the Currency ("OCC") and the Federal Deposit Insurance Corporation
("FDIC") have been obtained, and the Company has received bank
holding company approval from the Federal Reserve. However,
banking operations may not begin until final regulatory approvals
have been secured.
(b) Organizational Costs
The American Institute of CPA's has issued Statement of Position
98-5, "Reporting on the Costs of Start-Up Activities." In general,
the SOP requires that organizational and similar start-up costs be
expensed. Examples of such costs that have been incurred by the
Company are legal fees, consulting fees, and application fees paid
to regulatory agencies. Prior to the effective date of the SOP,
generally accepted accounting principles permitted such costs to
be capitalized and amortized to expense. The Company adopted the
requirements of the SOP from its inception and has expensed
organizational costs.
(c) Deferred Stock Issuance Costs
Costs totaling approximately $63,000 incurred through September
30, 1999 related to registering and issuing the securities being
offered are included in the balance sheet under "deferred stock
issuance costs." Such costs are comprised primarily of
professional fees and securities registration fees, and will be
charged against paid-in-capital upon the successful completion of
the stock offering. It is anticipated that additional deferred
stock issuance costs will be incurred.
9
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SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
(Unaudited)
(d) Income Taxes
------------
The Company is subject to federal income taxes. No taxes have been
accrued or paid because of operating losses incurred during the
development stage, and the Company has not completed an operating
period requiring the filing of a tax return. No deferred tax
assets have been recorded to recognize potential future tax
benefits of (1) losses to date, and (2) future deductions for tax
purposes of organizational costs, because any deferred tax asset
would be fully offset by a valuation allowance under Statement of
Financial Accounting Standards No. 109. Such a valuation allowance
would be required in order to reflect the high degree of
uncertainty regarding the ultimate realization of the related tax
benefits.
(e) Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
2. ADVANCES FROM RELATED PARTIES
Through September 30, 1999, all costs and disbursements associated with
forming the Company and the Bank, including attorneys' fees, consulting
fees, feasibility studies, market analysis, rent, salary and other
costs, have been funded by advances from the LLC. Amounts advanced by
the LLC through September 30, 1999 totaled $335,000. Upon successful
completion of the Company's proposed sale of common stock, these and
future funds advanced by the LLC are to be reimbursed by the Company,
without interest. If the offering of stock is not successful in raising
the minimum capitalization required, or if required regulatory
approvals are not obtained, the Company will be unable to reimburse the
LLC for most of the expenses, and the Organizers (who are members of
the LLC) will bear those costs.
10
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SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Notes to Financial Statements
(Unaudited)
3. LEASES AND COMMITMENTS
The Company has entered into a lease for administrative office space
with a term beginning May 1, 1999 and expiring in 39 months. Rent paid
for the first three months was $750 per month, and thereafter increased
to $1,000 per month. The Company may cancel the lease with 90 days'
notice.
The Company has also entered into separate leases for property to be
used as bank branches. One lease has a term of 36 months commencing
August 1, 1999, and requires a monthly rental of $2,500. The other
lease has a term of 36 months beginning when the branch begins
operations. At that point, the monthly rental will be $2,500. Prior to
that date, interim monthly rent of $500 is being paid beginning June
1999. Both leases are cancelable by the Company if it is unable to
organize and commence operations as planned.
The Company has entered into an employment agreement with its President
and Chief Executive Officer. The agreement has a three year term and is
automatically extended by one year if not terminated at least 90 days
prior to each anniversary date. It provides for a base annual salary of
$90,000. Additionally, after operations begin, 30,000 stock options
will be granted to the officer. One-third of the options will become
exercisable in each of the three years following the inception of
operations. The exercise price for all such options will be the fair
market value of the stock on the date of grant. Under the terms of the
agreement, the individual will continue in a consulting capacity after
the end of the period of employment.
11
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Item 2. MANAGEMENT'S PLAN OF OPERATION
General
- -------
Smith River Bankshares, Inc. (the "Company") was incorporated under the laws of
the Commonwealth of Virginia on January 14, 1999, for the purpose of becoming a
bank holding company that would own all of the outstanding shares of capital
stock of the proposed national bank, Smith River Community Bank, N.A. (the
"Bank"). The Company anticipates raising between $6,250,000 and $10,000,000
through a public sale of its common stock. The Company filed a registration
statement on Form SB-2 to register the stock in conjunction with its initial
public offering. The registration statement was declared effective by the
Commission on November 4, 1999. Subject to the regulatory approval of the Bank's
formation, the Company plans to acquire all of the common stock of the Bank with
the proceeds from the sale of its common stock. Following the acquisition, the
business of the Company will be conducted through the Bank, which will be its
wholly-owned subsidiary. The Company's year end is December 31. The Bank's
market area will be south central Virginia.
The Company is totally dependent upon the successful completion of the proposed
offering as well as securing all required regulatory approvals for its ability
to commence its intended banking operations. Based on current facts and
circumstances, the Organizers believe that the $6,250,000 minimum amount of
capital to be raised from the proposed sale of its common stock will be
sufficient to permit the Company to conduct its initial operations as currently
planned. To the extent the total capital raised exceeds the $6,250,000 minimum,
additional funds will be available to invest in loans, securities and other
earning assets, subject to the limitations of the Board's investment and lending
policies. Such additional capital could also provide additional funds to enable
the Bank to open additional branches.
Preliminary approvals from both the Office of the Comptroller of the Currency
("OCC") and the Federal Deposit Insurance Corporation ("FDIC") have been
obtained, and the Company has received bank holding company approval from the
Federal Reserve. However, banking operations may not begin until final
regulatory approvals have been secured. The organizers anticipate that such
final regulatory approvals will be received during the first quarter of 2000,
assuming the offering is successful, and that the Bank will be opened shortly
after that.
To date, the only material source of funds for the Company has been the
investments for this purpose by the Company's organizers, which are also the
Company's directors. These investments have been received through FCNB LLC, a
limited liability company formed to organize the Company and the Bank and
provide for financing of organizational and other costs. Through December 15,
1999, the organizers have invested a total of $515,000 in the LLC, which is
being used to pay the costs of the offering, organizational costs, equipment and
fixtures, software, etc. Of this amount, it is expected that organizational and
offering costs will total approximately $465,000. It is the intent of the
organizers that all remaining costs incurred prior to the successful completion
of the sale of the stock will continue to be funded by advances from the
organizers. All advances will be repaid by the Company and the Bank from the
proceeds of the offering, if it is successful.
12
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The Company is newly formed, and neither it nor the Bank has any prior operating
history. The Company's operating results and profitability will depend on that
of the Bank, which in turn will depend in large part on its ability to attract a
customer base and on the economy in general in Martinsville, Virginia and the
surrounding counties. The Bank will incur operating expenses, and there are no
assurances as to when, if ever, it will make a profit. Assuming that the minimum
net proceeds from the offering ($6,250,000) are raised, the organizers presently
believe that such amount will represent sufficient capital resources to meet all
commitments over the next twelve months.
Currently the Company employs six employees, including its Chief Executive
Officer, Chief Financial Officer, and its Senior Loan Officer. During the first
year of operations, it is presently anticipated that the Company and the Bank
will employ approximately fourteen (14) full time employees.
We have entered into three leases, one of which is for the executive offices of
the Company. The other two leases are for the anticipated main banking office
and another branch office of the Bank. The Company is currently paying rent on
all three leases. Management expects to spend approximately $410,000 on the main
banking office for additional furnishings and an automated teller machine. An
additional $220,000 is expected to be invested in leasehold improvements,
furniture and equipment, and an ATM for the branch banking office.
On October 25, 1999, the Company entered into a contract with Unisys and four
license agreements with Information Technology, Inc. These contracts provide the
Company with data processing equipment, PC's, file servers and computer hardware
and software. The Company has agreed to pay Unisys $232,500 and Information
Technology, Inc. a total of $92,000.
Income Taxes
- ------------
The Company will be subject to both Federal and state income taxes. While the
Bank will be subject to Federal income taxes, a bank is exempt from state income
tax in Virginia. Instead, a bank in Virginia must pay a franchise fee based on
the bank's capital level. However, management does not expect that operations
will be profitable until at least the third full year of operations, if then.
Because of this, and because of the substantial start-up costs, a substantial
net loss may accumulate before becoming profitable. Under current Federal tax
laws, these net operating losses will be available to offset future taxable
profits. Specifically, a net operating loss may be carried forward for a period
of up to 20 years to offset taxable income in those years. This could reduce
taxes in the initial years of profitability. However, if the offering is not
successful, if required regulatory approvals are not obtained, or if operations
are not ultimately profitable, then it is unlikely that these tax benefits will
be realized.
Year 2000 Readiness
- -------------------
An important business issue has surfaced relating to how existing computer
software programs and operating systems will accommodate the calendar change to
13
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Year 2000. Many software products were designed to accommodate only a two-digit
year, storing 1998, for example, as "98," and these same programs may read "00"
as 1900 rather than 2000. This is expected to have an adverse effect on
businesses that rely on programs that are not "Year 2000" or "Y2K" compliant.
After commencing business, the Bank intends to use third-party vendors for
processing most bank operations and for some other ancillary products and
computer needs. Management intends to purchase equipment that is warranted for
Y2K compliance, and management will ensure that any vendor chosen uses only bank
applications and programs that can handle the coming calendar change and are Y2K
compliant. Management also expects to put clauses in all contracts protecting
the Bank against the potential problem. The Bank will use internal
communications and training to educate employees and keep them up to date on
this subject, and it will use questionnaires and continued dialogue with all
bank customers to make them aware of the issues. Finally, the Bank will include
Y2K risk management parameters in its loan policy in order to minimize the issue
as a part of credit risk.
In short, management does not believe the Y2K issue will have a material effect
on the Bank's financial condition. We estimate the total costs for Y2K
readiness, including equipment testing and employee and customer education, to
be less than $25,000. However, if the Bank's vendors or customers, the Federal
Reserve Bank of Richmond, or other regulatory agencies do not achieve Y2K
compliance in time, Smith River Bank's business and financial condition would be
adversely affected.
14
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Part II. OTHER INFORMATION
-----------------
Item 2. Changes in Securities and Use of Proceeds
-----------------------------------------
The registrant filed a registration statement on Form SB-2 to register
securities in conjunction with its initial public offering. The registration
statement was declared effective by the Commission on November 4, 1999.
Subsequent to the effective date the registrant began accepting subscriptions to
purchase the securities registered. However, all of the proceeds from accepting
the subscriptions have been deposited in an escrow account pursuant to the
escrow agreement. Consequently, as of the date of the filing of this Form
10-QSB, none of the stock subscription proceeds have been used for any purpose.
However, various expenditures continue to be made for offering expenses,
operating expenses, equipment and other costs as disclosed in the accompanying
financial statements and the notes thereto and in Management's Plan of Operation
in this Form 10-QSB. Those expenditures continue to be funded by advances from
the organizers.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
A special meeting of the shareholders of the Company was held on July 13, 1999.
Nine shareholders were present and two shareholders voted by proxy. The
following matters were voted on:
(1) The resignations of three directors were accepted by unanimous vote of all
shareholders present and voting by proxy, and the Company was authorized to
redeem the shares held by the three directors who resigned.
(2) Shareholders voted to adopt the employment agreement of the Chief Executive
Officer by unanimous vote of the two shareholders voting by proxy and by
all shareholders present, except that the Chief Executive Officer as a
shareholder abstained.
A special meeting of the shareholders of the Company was held on July 27, 1999.
Eleven shareholders were present. Shareholders adopted a Warrant Plan and
Certificate by unanimous vote of all shareholders present.
A special meeting of the shareholders of the Company was held on August 26,
1999. Nine shareholders were present. The following matters were voted on:
(1) Shareholders voted to adopt the amended employment agreement of the Chief
Executive Officer by unanimous vote of all shareholders present, except
that the Chief Executive Officer, as a shareholder, abstained.
(2) Shareholders voted to adopt an amended Warrant Plan and Certificate by
15
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unanimous vote of all shareholders present.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(A) Exhibits:
--------
See index to exhibits
(B) Reports on Form 8-K:
-------------------
None
16
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Signatures
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Smith River Bankshares, Inc.
Date December 17, 1999 By: s/Cecil R. McCullar
------------------ ------------------------------------
Cecil R. McCullar
President & Chief Executive Officer
Date December 17, 1999 By: s/Brenda H. Smith
----------------- ----------------------------------
Brenda H. Smith
Senior Vice President/Chief Financial
Officer
17
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INDEX TO EXHIBITS
-----------------
Exhibit #
- ---------
3.1 Restated Articles of Incorporation of the Registrant, dated July 8,
1999, filed with the Commission by Registrant on September 13, 1999 as
exhibit 3.1 to its registration statement on Form SB-2, is incorporated
herein by reference.
3.2 By-Laws of the Registrant, dated August 5, 1999, filed with the
Commission by Registrant on September 13, 1999 as exhibit 3.2 to its
registration statement on Form SB-2, is incorporated herein by
reference.
4.1 Warrant Plan and Certificate as adopted July 27, 1999 and amended
August 26, 1999, filed with the Commission by Registrant on September
13, 1999 as exhibit 4.1 to its registration statement on Form SB-2, is
incorporated herein by reference.
4.2 Provisions in Registrant's Articles of Incorporation and Bylaws
defining the rights of Holders of the Registrant's common stock
(included in Exhibits 3.1 and 3.2, respectively).
4.3 Form of Shares Subscription Agreement included as Appendix A to the
Prospectus, which is part of registration statement on Form SB-2A filed
with the Commission by Registrant on November 2, 1999, is incorporated
herein by reference.
4.4 Form of Units Subscription Agreement included as Appendix B to the
Prospectus, which is part of registration statement on Form SB-2A filed
with the Commission by Registrant on November 2, 1999, is incorporated
herein by reference.
10.1 Contract to purchase hardware and software license and service
agreement between Unisys and the Registrant dated October 25, 1999.
10.2 Related contracts to purchase equipment and software between
Information Technology, Inc. and the Registrant dated October 25, 1999.
27 Financial Data Schedule
Exhibit 10.1
Agreement Number
UNISYS Consolidated
Agreement
Client Name and Mailing Address
-------------------------------
Smith River Bankshares, Inc.
-----------------------------------
730 E. Church Street
-----------------------------------
Martinsville, VA 24112
-----------------------------------
-----------------------------------
Client acknowledges it has read and understands this Agreement (including all
attached schedules and amendments) and is not entering into this Agreement on
the basis of any representations not expressly set forth in it.
Agreed and Accepted
Unisys Corporation Client
- ----------------------------------- ---------------------------------
(Signature) (Date) (Signature) (Date)
- ----------------------------------- ---------------------------------
(Printed/typed name) (Printed/typed name)
- ----------------------------------- ---------------------------------
(Title) (Title)
Page 1 of 17
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UNISYS Consolidated Agreement
Unisys Corporation (Unisys) will sell and license Products and services and
Client agrees to purchase and license those Products and services under the
following terms and conditions:
1. Definitions
1.1 Software means the object code version of computer programs and any
related documentation, excluding maintenance diagnostics. Software also
means the source code version where provided by Unisys. Software also
means microcode, not embedded in a circuit element, that enables the
equipment to function according to its published specifications.
1.2 Products means equipment, Software, documentation (including manuals
and education materials) and Software maintenance releases and updates.
1.3 Software Processing Unit ("SPU") means equipment which controls and
executes Software.
1.4 SURETY Support Services means various forms of installation and
support for the Products.
1.5 Proprietary Information means Software, diagnostics, documentation,
including manuals, and any other information confidential to Unisys or its
licensors.
1.6 Information Services means all technical and consultative services
other than SURETY Support Services.
1.7 Installation Date means the date Unisys completes installation (as
determined by Unisys) or, if equipment or Software is to be installed by
Client, the tenth day following shipment.
2. Effective Date
This Agreement will become effective when signed by duly authorized
representatives of both parties and will continue in effect until
terminated according to its terms.
3. Schedules - Ordering Procedure
3.1 Unisys will furnish to Client and Client will accept and pay for the
Products and services itemized on the following Schedules which, together
with the terms on the Schedules, are an integral part of this Agreement.
Schedule name
Equipment Sale
SURETY Support Services
Software Licenses
Information Services
All references to Products and services in this Agreement are to the
Products and services listed on the Schedules and on any Schedules
submitted to and accepted by Unisys pursuant to Section 3.2 and to any
Products and services supplied by Unisys with such listed Products and
services.
3.2 Client may order additional Products and services under this Agreement
by submitting properly completed Unisys Supplemental Schedule Orders
referencing this Agreement. All Orders will refer to this Agreement by
number and will be signed by Client. All education lecture courses must be
ordered on a Client Education Enrollment Application.
3.3 All orders are subject to acceptance by Unisys. Acceptance by Unisys
will be effective when communicated in writing to Client. The receipt or
deposit by Unisys of a Client down payment will not constitute acceptance
of an order. Any down payment received from Client will be returned if the
order is not accepted by Unisys.
3.4 Unisys may substitute Products of equivalent or superior functionality
and performance in the event that any of the Products ordered are not
available at the time of shipment.
4. Delivery and Installation
4.1 Unisys will arrange for delivery of Products and Client will pay for
transportation in accordance with the Unisys published transportation
charges in effect at the time of delivery or, if Unisys has not published
any such charges, Client will pay Unisys for transportation charges
actually incurred. Client will also pay for all cables and site-specific
installation materials required to install the equipment at Client's site.
4.2 Unisys will provide Client with one copy of the then-current user
documentation, in paper or electronic form at the option of Unisys, for
use with the Products ordered and environmental specifications for
equipment, where applicable. Prior to delivery of equipment, Client will
prepare the installation site and will continue to maintain the
installation site in accordance with such specifications.
Page 2 of 17
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4.3 Client will install all items of equipment with the designation "Y" in
the "Client installable" column when there is no installation charge
listed on the Equipment Sale Schedule. Unisys will install all other items
of equipment. Client will install all items of Software other than those
for which a fixed installation charge is indicated on the Software
Licenses Schedule. All Products to be installed by Unisys will be
installed during Unisys normal working hours, unless otherwise provided in
this Agreement.
4.4 Client may arrange for installation by Unisys of Client installable
Products, subject to the then-current standard Unisys charges and
conditions.
4.5 If additional labor and rigging is required for installation due to
Client's special site requirements, Client will pay those costs including
costs to meet union or local law requirements.
5. Payment
5.1 Charges for Products will be invoiced upon shipment.
5.2 Charges for SURETY Support Services will be invoiced in advance,
quarterly, annually, or at other periodic intervals; otherwise, charges
will be invoiced after the services are performed. Hourly use, page and
remote service charges will be invoiced monthly unless otherwise
indicated.
5.3 Charges for Information Services will be invoiced as the services are
performed.
5.4 All charges must be paid no later than 30 days from the date of the
invoice. Unisys may impose a late payment charge equal to the lesser of
(a) 1-1/2% per month or (b) the maximum rate allowed by law.
5.5 Additional charges may apply to services rendered outside contracted
hours or beyond normal coverage at Client's request, e.g., travel
expenses, premium and minimum charges.
6. Taxes
6.1 Client will pay any tax Unisys becomes obligated to pay by virtue of
this Agreement, exclusive of taxes based on the net income of Unisys.
6.2 All personal property and similar taxes assessed after shipment will
be paid by Client.
7. Price Protection
7.1 The charges for Products in any accepted order will remain firm
through delivery, unless through no fault of Unisys shipment takes place
more than one year after the date of the order. If Unisys notifies Client
that an increase in charges will apply to its order, Client may terminate
the affected part of its order by giving written notice to Unisys within
ten days of the date of notification of the increase.
7.2 SURETY Support Services charges will not be increased during the first
twelve months following the commencement of those services. The charges
may be increased thereafter on each anniversary of the commencement date
following 90 days prior written notice to Client, unless otherwise noted
on the SURETY Support Services Schedule.
7.3 Charges for Software Licenses and Information Services will not be
increased during any one-year term, but may be increased prior to any
subsequent term upon 90 days prior written notice to Client. If Software
or services are contracted on a month-to-month basis the charges may be
increased at any time following 90 days prior written notice.
8. Security Interest
Unisys reserves a purchase money security interest in equipment until
payment in full is received for all equipment delivered to Client and, for
that purpose, this Agreement is a security agreement, By signing this
Agreement, Client authorizes Unisys or its agent to sign on behalf of
Client the necessary financing statements, or to file a reproduction of a
financing statement. Alternatively, Unisys may file this Agreement or a
copy of this Agreement to perfect its security interest. If this Agreement
or a copy of it is filed, information concerning the security interest may
be obtained from Unisys at the address stated in Section 17.
9. Client's Operational Responsibilities
9.1 Client acknowledges it has independently determined that the Products
and services ordered under this Agreement meet its requirements.
9.2 Client has sole responsibility for use of the Products, including
operating procedures, audit controls, accuracy and security of input and
output data, restart and recovery routines, and other procedures necessary
for Client's intended use of the Products.
9.3 Client will ensure that its personnel are, at all times, educated and
trained in the proper use and operation of the Products and that the
Products are used in accordance with applicable Unisys manuals and
instructions.
9.4 Client will maintain back-up data necessary to replace critical Client
data in the event of loss or damage to such data from any cause.
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9.5 If Unisys is providing SURETY Support Services, Client will (a)
maintain the operating environment in accordance with Unisys
specifications, (b) provide adequate working and storage space for use by
Unisys personnel near the equipment, (c) provide Unisys full access to the
equipment and sufficient computer time, subject only to Client's security
rules, (d) follow Unisys procedures for placing service requests and
determining if remedial service is required, (e) follow Unisys
instructions for operator maintenance and obtaining services, (f) provide
a memory dump and additional data in machine readable form if requested
(g) reproduce suspected errors or malfunctions in Software, and (hi
install all error corrections and maintenance releases supplied by Unisys.
9.6 Information Services supplied by Unisys under this Agreement are
provided to assist Client. Client, not Unisys, will be responsible for
determining objectives and obtaining the desired results.
10. Protection of Proprietary Information
10.1 Client will keep in confidence and protect Proprietary Information
from disclosure to third parties and restrict its use as provided in this
Agreement. Client acknowledges that unauthorized disclosure of Proprietary
Information may cause substantial economic loss to Unisys or its
licensors. All materials containing Proprietary Information will be marked
with "Proprietary," "Confidential," or in a manner which gives notice of
its proprietary nature. Proprietary Information will not be copied, in
whole or in part. except when essential for correcting, generating or
modifying Proprietary Information for Client's authorized use. Each copy,
including its storage media, will be marked by Client with all notices
which appear on the original.
10.2 Upon termination or cancellation of any license granted under this
Agreement, Client will destroy (and, in writing, certify destruction) or
return to Unisys all copies of the Software the license for which has been
so terminated or canceled and any other related Proprietary Information in
Client's possession (including Proprietary Information incorporated in
other software or writings).
10.3 Any ideas, concepts, know-how, data processing techniques, Software,
documentation, diagrams, schematics or blueprints developed by Unisys
personnel (alone or jointly with Client) in connection with Information
Services provided to Client will be the exclusive property of Unisys.
Unisys grants to Client a non-exclusive, royalty-free license to use any
of the foregoing in accordance with the terms of this Agreement.
10.4 Client acknowledges that all support materials, including without
limitation, diagnostic software, are the property of and include
Proprietary Information of Unisys. Client assures that such materials will
be used only by Unisys maintenance personnel, and that Unisys has the
right to remove such materials from Client's facility at any time. This
provision applies even though such materials may be listed in the Unisys
price lists, catalogs, invoices or contracts.
10.5 Client will inform its employees of their obligations under this
Section 10 and instruct them so as to ensure such obligations are met.
10.6 This Section 10 will survive termination or cancellation of this
Agreement.
11. License
11.1 Unisys grants to Client a personal, non-exclusive and nontransferable
license to use Software and related documentation according to the terms
and conditions of this Agreement, solely for Client's internal data
processing requirements on the Unisys SPU in the United States on which
Software is initially installed. Client's use of Software will also be
governed by any additional conditions which Unisys may provide on or prior
to delivery of Software. Client agrees that Unisys may periodically
inspect the computer site in order to audit Software supplied by Unisys
installed at Client's site at mutually agreed upon times. If a separate
license agreement accompanies non Unisys commodity Software, then the
separate license agreement terms will supersede the license terms in this
Agreement for that Software,
11.2 Client may modify any Unisys application Software and may combine
this Software with other programs or materials to form an updated work,
provided that upon termination of the license, the Unisys application
Software will be removed from the updated work and returned to Unisys.
Client will not decompile or disassemble any Software provided under this
Agreement or modify Software which bears a copyright notice of any third
party.
11.3 Unisys provides no media or documentation for Software designated
"LO"(License Only). Client may make (a) one archival copy (for backup
purposes) of each item of Software, and (b) one copy, as required, for
each license granted of Software designated "LO" Each copy will contain
all legends and notices and will be subject to the same conditions and
restrictions as the original. Software designated "SUBSCRN" (subscription)
entitles Client to functional updates that Unisys releases for the same
eligible base Software during the applicable term of the subscription,
provided Client has a current license and the latest applicable Software
Maintenance Releases for the eligible base Software. Software designated
"DRIVER" is for use solely with those models of device types specified in
the driver's then-current published specification and a license is
required for each separately addressable unit of a device type.
11.4 If the SPU on which any item of Software is licensed becomes
temporarily unavailable, use of such Software may be temporarily
transferred to an alternative SPU until the original SPU becomes
available.
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11.5 No license is granted to Client to use any Unisys proprietary
operating system Software to assess, test or develop any hardware products
or device handler software or operating system software that will be
marketed by Client or others for compensation. Client may develop other
software programs and may test fully developed, commercially available non
Unisys hardware products or software programs where such testing is solely
intended for Client's internal evaluation of the fitness of such product
or program for Client's own internal data processing purposes.
11.6 If Client desires to: (a) use Software in a service bureau mode, (b)
use Software at another location, (c) use Software as restricted in
Section 11.5, or (d) transfer operational use of the Software to a third
party; then Client must request prior permission in writing from Unisys.
Unisys will then advise Client whether, and under what terms and
conditions, Unisys will license the Software as requested. All
restrictions applicable to Client will also apply to any permitted service
bureau or third party users.
11.7 This Agreement does not transfer to Client title to any intellectual
property contained in any Software, documentation or Proprietary
Information.
11.8 No party is entitled to use any Software unless the party has a valid
written license to use such Software and all applicable charges for the
use of such Software have been paid, except that Client may authorize
temporary use of Software by a third party, only for Client's benefit, to
assess, test or develop software programs to the extent authorized by
Section 11.5 or to perform consulting services and studies, provided such
third party agrees in writing to be bound by the provisions of this
Agreement regarding Proprietary Information and Software,
11.9 This section applies to all procurements of Software and
documentation by or for the U.S. federal government. By accepting delivery
of the Software and documentation, the government hereby agrees that the
Software and documentation qualifies as "commercial" computer software and
commercial software documentation within the meaning of the acquisition
regulations) applicable to this procurement. The terms and conditions of
this license shall prescribe the government's use and disclosure of the
Software and documentation, and shall supersede any contrary provisions.
The government agrees to return the Software and documentation unused if
any provision of this License does not meet the government's actual
minimum needs or if the government objects to any term of this license and
the parties are unable to reach agreement on the terms of the license. The
following statement applies only to procurements governed by DFARS Part
227.4 (OCT 1988): "Restricted Rights - Use, duplication and disclosure by
the Government is subject to restrictions as set forth in subparagraph
(c)(1)(ii) of the Rights in Technical Data and Computer Software clause at
DFARS 252.227-7013 (OCT 1988)."
12. Warranties and Disclaimers
12.1 EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, THERE ARE NO
WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE. UNISYS
DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE AS TO BOTH UNISYS AND NON UNISYS PRODUCTS AND SERVICES.
UNISYS WARRANTIES EXTEND SOLELY TO CLIENT. YEAR 2000 WARRANTIES OF
EQUIPMENT AND SOFTWARE ARE MADE SOLELY IN SECTION 12.4.
12.2 Equipment:
(a) Unisys warrants that equipment will be free from defects in material
and workmanship and will substantially conform to relevant Unisys
published specifications for a period of twelve months from its
Installation Date. Equipment (i) may be newly manufactured, (ii) may be
assembled from new or serviceable used parts that are equivalent to new
parts in performance, or (iii) may have been previously installed. During
this twelve month warranty period, Unisys will repair or replace any
defective item of equipment or part or component of equipment promptly
reported or sent to Unisys by Client which Unisys determines was defective
due to faulty material or workmanship. Client will pay transportation and
insurance costs to ship equipment if an off-site repair location is
designated by Unisys; Unisys will pay the return costs if the equipment
was defective. Labor costs of diagnosis are not included in this warranty.
(b) Because equipment requires on-going maintenance, the preceding
warranty is not a substitute for SURETY Support Services, which are
available to Client for a charge.
(c) Unisys makes no representation or warranty as to non Unisys equipment
provided to Client, all of which is sold or licensed to Client "AS IS."
Client agrees to look solely to the warranties and remedies, if any,
provided by the manufacturer.
12.3 Software:
(a) Each item of Software with the designation "W" is, in its unaltered
form, warranted for-90 days from its Installation Date to conform
substantially to the then-current published functional specifications,
provided such Software is used in a manner consistent with any applicable
Unisys minimum equipment and software configuration specifications. Unisys
will make reasonable efforts to correct such errors reflecting significant
deviations from the functional specifications as are reported by Client to
Unisys during such warranty period.
(b) Because not all errors in Software can or need be corrected, Unisys
does not warrant that all Software defects will be corrected. Similarly,
Unisys does not warrant that the functions contained in the Software will
meet Client's requirements or that the Software will operate in
combinations selected for use by Client.
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(c) All other Software delivered is not warranted by Unisys and is
licensed "AS IS." In the case of non Unisys Software, Client agrees to
look solely to the warranties and remedies, if any, provided by the Unisys
licensor or vendor.
12.4 Year 2000 - Equipment and Software
(a) Unisys warrants that the Products designated "R" in the Y2K Ready
column in the relevant Schedule to this Agreement will be capable, when
used in accordance with the applicable Product documentation provided by
Unisys, of accurately processing date data (including, but not limited to
calculating, comparing and sequencing) from, into and between the 20th and
21st centuries and 1999 and 2000, including leap year calculations,
provided that all third party products and Client's customized data
processing materials used in combination with the Products properly
exchange date data with the Products (hereinafter "Year 2000 Ready").
Unisys will repair or replace Products that do not accurately process date
data as set forth above, provided: (i) Client notifies Unisys before March
31, 2000 or, if later, before the expiration of any general warranty
period for the Products under Sections 12.2 or 12.3 above; and (ii) Client
keeps the Products at the then-current release level(s) and, in the
absence of a general warranty or after any general warranty period,
enrolled continuously under Unisys maintenance.
(b) Unisys makes no warranty for date data functionality for Products
designated "V" in the Y2K Ready column. Unisys obtains these Products from
third parties and will pass on to Client such date data functionality
warranties, if any, as the Product vendor permits Unisys to pass along on
the Product vendor's behalf to end users. Client agrees to look solely to
such Product vendors for correction or repair of defects in date data
functionality of such Products.
(c) Products designated "RC" in the Y2K Ready column are obtained from
third parties and are warranted as "R" according to Section 12.4(a),
above, when: (i) acquired from Unisys; and (ii) designated by Unisys for
use as a component in a Unisys packaged style designated "R;" and (iii)
used by Client only as a component in that Unisys packaged style. In all
other instances, a Product designated "RC" will be deemed and treated as a
'V' Product under Section 12.4(b), above.
(d) Unisys makes no warranty for date data functionality for Products
designated "N" or "U" or for Products with no designation in the Y2K
Ready column. Client acknowledges that it understands that Products
designated "N" are not and will not be made Year 2000 Ready and that
Unisys disclaims any warranty of the Product's ability to function
correctly when dealing with dates. Client has independently evaluated the
Products and, notwithstanding the foregoing, confirms its order for the
said Products and agrees its use of such Products will be at its sole
risk.
12.5 SURETY Support Services:
(a) Unisys warrants that equipment and Software will be supported in
accordance with the specific SURETY Support Service selected, Unisys sole
and exclusive obligations under this warranty will be to conform to the
SURETY Support Service Descriptions. Equipment parts which are removed for
replacement by Unisys become the property of Unisys.
(b) To determine eligibility and prerequisites for SURETY Support
Services, Unisys may require inspection, at Client expense, of equipment
which (i) has not been maintained continuously by Unisys from the date of
purchase by Client or (ii) has been relocated.
(c) Unisys requires the same SURETY Support Service Level for the SPU and
all equipment and Software that is eligible for SURETY Support Services
and interoperates with the SPU. Application software, local area networks,
workstations, and remote data communications Products are excluded from
this requirement.
(d) SURETY Support Services do not cover the parts and service required to
repair damage or correct errors attributable to (i) alterations or
out-of-specification supplies, (ii) accidents, misuse, negligence or
failure of Client to follow instructions for proper use, care and cleaning
of equipment, (iii) external factors (e.g., failure or fluctuation of
electrical power or air conditioning, fire, flood), or (iv) failure by
Client to comply with Unisys environmental specifications.
(e) SURETY Support Services apply only to properly configured Products at
the minimum hardware and software levels designated by Unisys for support
of the applicable Product specification. SURETY Support Services will
include repair or correction of material deviations that prevent the
Product from being Year 2000 Ready only if the Product is warranted as "R"
according to Sections 12.4(a) and (c) and Unisys is then currently
providing development center support (also called engineering support) for
the Product or, if Unisys discontinues development center support, a
Unisys created repair or correction already exists for the same deviation.
Except as provided in the immediately preceding sentence, all SURETY
Support Services provided by Unisys exclude repair of damage or correction
of errors related to date data functionality.
(f) SURETY Support Services do not include correction or repair of
defects, including any related to date data functionality, in the design,
manufacture, materials or workmanship of either (i) non Unisys services or
products without a Unisys brand, or (ii) Product(s) for which Unisys has
discontinued development center support.
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12.6 Information Services:
(a) Unisys will endeavor to provide Information Services on a timely basis
subject to availability of qualified personnel and the difficulty and
scope of the services to be provided.
(b) Unisys may assign, reassign and substitute personnel at any time and
may provide the same or similar services and materials to other clients.
(c) Information Services under this Agreement do not include any services
related to date data functionality, including services pertaining to Year
2000.
13. Alterations and Attachments
13.1 If Unisys is providing SURETY Support Services, Client will give
Unisys prior written notice of any proposed alterations or attachments to
equipment, Unisys has no obligation to provide SURETY Support Services for
non Unisys attachments, altered equipment or modified Software. Should
Unisys agree to maintain, support or correct altered Products, Unisys may
impose additional charges.
13.2 Unisys is not responsible for any malfunction, nonperformance or
degradation of performance of Products, supplies or maintenance support
materials caused by or resulting directly or indirectly from any
alteration or attachment unless Unisys is maintaining and Client has
notified Unisys of the alteration or attachment that causes the
malfunction.
13.3 Unisys warranties will not apply if attachment of non Unisys
equipment or alteration of Products directly or indirectly results in any
malfunction, nonperformance or degradation of performance of Unisys
Products; in addition, Client will be solely responsible for resulting
infringement, personal injury or damage to property and Products. 13.4 For
purposes of this Agreement, "alterations" includes, but is not limited to,
the incorporation of non Unisys components, boards and subassemblies into
equipment, as well as modifications to Software. "Attachments" includes,
but is not limited to, any non Unisys equipment, software, components or
devices which are connected to Unisys Products.
14. Limitation of Liability
14.1 UNLESS FURTHER LIMITED ELSEWHERE IN THIS AGREEMENT, THE ENTIRE
LIABILITY OF UNISYS AND CLIENT'S EXCLUSIVE REMEDY FOR DAMAGES FROM ANY
CAUSE RELATED TO OR ARISING OUT OF THIS AGREEMENT, REGARDLESS OF THE FORM
OF ACTION, WHETHER IN CONTRACT OR IN TORT, WILL NOT EXCEED THE GREATER OF
(a) $100,000 OR (b) THE CHARGES PAID TO UNISYS DURING THE 24-MONTH PERIOD
IMMEDIATELY PRIOR TO CLIENT'S NOTICE PURSUANT TO SECTION 18.1 FOR THE
PRODUCTS OR SERVICES WHICH ARE THE SUBJECT MATTER OF OR DIRECTLY RELATED
TO THE CAUSES OF ACTION ASSERTED. THIS SECTION 14.1 DOES NOT APPLY TO
CLAIMS COVERED BY SECTION 15.
14.2 IN NO EVENT WILL UNISYS BE LIABLE FOR (a) ANY INCIDENTAL, INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF
USE, REVENUES, PROFITS OR SAVINGS, EVEN IF UNISYS KNEW OR SHOULD HAVE
KNOWN OF THE POSSIBILITY OF SUCH DAMAGES, (b) CLAIMS, DEMANDS OR ACTIONS
AGAINST CLIENT BY ANY PERSON, EXCEPT AS PROVIDED IN SECTION 15, OR (c)
LOSS OF OR DAMAGE TO CLIENT DATA FROM ANY CAUSE.
14.3 The entire liability of Unisys and Client's exclusive remedy for any
defective non Unisys Products provided under this Agreement is limited to
their return to Unisys within 90 days after shipment for refund of the
amount paid to Unisys for such Products (not including any amounts paid
for related services).
14.4 Unisys may direct Client to third parties having products or services
which may be of interest to Client for use in conjunction with the
Products. Notwithstanding any Unisys recommendation, referral or
introduction, Client will independently investigate and test non Unisys
products and services and will have sole responsibility for determining
suitability for use of non Unisys products and services. Unisys has no
liability with respect to claims relating to or arising from use of non
Unisys products and services, including, without limitation, claims
arising from failure of non Unisys products to provide proper time and
date functionality.
15. Patent, Copyright and Trade Secret Indemnification
15.1 Unisys, at its own expense, will defend and indemnify Client against
claims that Products furnished under this Agreement infringe a United
States patent or copyright or misappropriate trade secrets protected under
United States law, provided Client (a) gives Unisys prompt written notice
of such claims pursuant to Section 17, (b) permits Unisys to defend or
settle the claims, and (c) provides all reasonable assistance to Unisys in
defending or settling the claims.
15.2 As to any Product which is subject to a claim of infringement or
misappropriation, Unisys may (a) obtain the right of continued use of the
Product for Client or (b) replace or modify the Product to avoid the
claim. If neither alternative is available on commercially reasonable
terms, then, at the request of Unisys, any applicable Software license and
its charges will end, Client will stop using the Product, and Client will
return the Product to Unisys. Upon return of the Product, Unisys will give
Client a credit for the price paid to Unisys, less a reasonable offset for
use and obsolescence.
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15.3 Unisys will not defend or indemnify Client if any claim of
infringement or misappropriation (a) is asserted by a parent, subsidiary
or affiliate of Client, (b) results from Client's design or alteration of
any Product, (c) results from use of any Product in combination with any
non Unisys product, or (d) relates to a non Unisys Product alone.
15.4 This Section 15 states the entire liability of Unisys and Client's
sole and exclusive remedies for patent or copyright infringement and trade
secret misappropriation.
16. Termination and Cancellation
16.1 Unisys may suspend SURETY Support Services if any payment for such
service under this Agreement is past due more than 30 days.
16.2 Unisys may terminate SURETY Support Services or change support to
Client for a Product upon six months written notice or at the expiration
of the then-current term for SURETY Support Services, whichever occurs
earlier.
16.3 Either party may terminate any license for Software or any SURETY
Support Services upon expiration of the applicable term by providing 30
days prior written notice. Failure to give such notice will result in a
renewal or extension of the license or service in accordance with the
provisions of this Agreement. The licenses for any Software automatically
terminate upon Client's discontinuance of use of the SPU on which the
Software was licensed, at which time Client must either destroy or return
the Software and documentation to Unisys. Upon termination or
cancellation of SURETY Support Services, all diagnostics will be returned
to Unisys.
16.4 Without prejudice to other remedies, Unisys may cancel this
Agreement or any order placed under it, for default and repossess
Products (excluding only equipment for which the purchase price has been
fully paid), if, upon written notice, Client fails to (a) make any
payment identified as delinquent (including payment of charges for
services) within ten days or (b) cure any default relating to Sections 10
or 11 within 30 days.
16.5 Unisys may terminate SURETY Support Services on 30 days prior
written notice if Unisys determines that any alterations, attachments,
Client Software modification or failure to install a maintenance release
will interfere with the provision of such services.
16.6 Termination or cancellation of this Agreement will not affect any
rights or duties arising under it with respect to Proprietary Information
or security interest.
17. Notices
17.1 All notices required by this Agreement to be given to Client will be
sent to its address on the cover page of this Agreement.
17.2 All notices required by Sections 15 and 18.1 and all requests for
information under Section 8 will be sent by certified or registered mail
and, when given to Unisys, addressed to:
Office of General Counsel
Unisys Corporation
Unisys Way
Blue Bell PA 19424
cc: Regional Vice President
17.3 All other notices to Unisys will be sent to the Unisys office which
has been servicing Client.
18. Dispute Resolution
18.1 Disputes and Demands - ANY CLAIM OR CONTROVERSY RELATED TO OR
ARISING OUT OF THIS AGREEMENT WHETHER IN CONTRACT OR IN TORT ("DISPUTE"),
WILL BE RESOLVED ON A CONFIDENTIAL BASIS ACCORDING TO THE FOLLOWING
PROCESS, WHICH EITHER PARTY MAY START BY DELIVERING TO THE OTHER PARTY A
WRITTEN NOTICE DESCRIBING THE DISPUTE AND THE AMOUNT INVOLVED ("DEMAND").
18.2 Negotiation and Meditation - AFTER RECEIPT OF A DEMAND, AUTHORIZED
REPRESENTATIVES OF THE PARTIES WILL MEET AT A MUTUALLY AGREED UPON TIME
AND PLACE TO TRY TO RESOLVE THE DISPUTE BY NEGOTIATION. IF THE DISPUTE
REMAINS UNRESOLVED AFTER THIS MEETING, EITHER PARTY MAY START MANDATORY
NON-BINDING MEDIATION UNDER THE COMMERCIAL MEDIATION RULES OF THE
AMERICAN ARBITRATION ASSOCIATION (AAA).
18.3 Arbitration - IF THE DISPUTE REMAINS UNRESOLVED 45 DAYS AFTER THE
RECEIPT OF THE DEMAND, EITHER PARTY MAY START BINDING ARBITRATION UNDER
THE COMMERCIAL ARBITRATION RULES OF THE AAA. THE ARBITRATION WILL BE
BEFORE ONE ARBITRATOR: HOWEVER, BEFORE THE SELECTION OF THE ARBITRATOR, A
PARTY (WHOSE IDENTITY WILL NOT BE REVEALED TO THE ARBITRATORS) MAY
REQUIRE, AT ITS SOLE ADDITIONAL EXPENSE, A THREE ARBITRATOR PANEL. AT
LEAST ONE ARBITRATOR WILL BE AN ATTORNEY. NO STATEMENTS BY, OR
COMMUNICATIONS BETWEEN, THE PARTIES DURING NEGOTIATION OR MEDIATION, OR
BOTH, UNDER SECTION 18.2, ABOVE, WILL BE ADMISSIBLE FOR ANY PURPOSE IN
ARBITRATION. THE ARBITRATOR(S) WILL HAVE NO AUTHORITY TO AWARD PUNITIVE
DAMAGES OR ANY OTHER MONETARY RELIEF NOT MEASURED BY THE PREVAILING
PARTY'S ACTUAL DAMAGES (ADJUSTMENTS FOR TIME VALUE OF MONEY PERMITTED),
AND WILL NOT MAKE ANY DECISION INCONSISTENT WITH THE TERMS AND CONDITIONS
OF THIS AGREEMENT. EACH PARTY WILL BEAR ITS OWN INTERNAL EXPENSES AND
ATTORNEY'S FEES.
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18.4 Court - NOTHING IN THIS SECTION 18 WILL PRECLUDE A PARTY'S RECOURSE
TO A COURT OF COMPETENT JURISDICTION TO (a) ENFORCE THE TERMS OF, OR AN
ARBITRATION AWARD UNDER, THIS SECTION; (b) SEEK TEMPORARY EQUITABLE
RELIEF NECESSARY TO PROTECT ITS INTERESTS; OR (c) RECOVER SPECIFIC
PROPERTY, INCLUDING AN ACTION IN REPLEVIN.
18.5 Time Limit - NEITHER ARBITRATION UNDER THIS SECTION NOR ANY LEGAL
ACTION, REGARDLESS OF ITS FORM, RELATED TO OR ARISING OUT OF THIS
AGREEMENT MAY BE BROUGHT MORE THAN 2 YEARS AFTER THE CAUSE OF ACTION
FIRST ACCRUED, EXCEPT IF A DEMAND IS MADE WITHIN 45 DAYS BEFORE THE END
OF THIS 2 YEAR PERIOD, THE PARTIES WILL HAVE 60 ADDITIONAL DAYS FROM THE
DEMAND TO START ARBITRATION UNDER THIS AGREEMENT.
19. Other Provisions
19.1 All risk of loss or damage to Products will pass to Client upon
delivery to Client's location.
19.2 Neither party will be liable for failure to fulfill its obligations
when due to causes beyond its reasonable control.
19.3 Any failure or delay by either party in exercising any right or
remedy will not constitute a waiver.
19.4 THIS AGREEMENT WILL BE GOVERNED BY THE LOCAL LAW OF THE COMMONWEALTH
OF PENNSYLVANIA.
19.5 This Agreement constitutes the entire agreement between the pates
with respect to the Products and services provided hereunder and
supersedes all prior proposals and agreements, both written and oral, and
all other written and oral communications between the parties. Statements
made to you in the course of this sale are subject to the Year 2000
Information and Readiness Disclosure Act (15 U.S.C. 1-note). In the case
of a dispute, this Act may reduce your legal rights regarding the use of
any such statements, unless otherwise specified by your contract or
tariff. The terms and conditions of this Agreement will supersede all
other terms and conditions submitted by Client, including any preprinted
terms on any Client purchase orders,
19.6 Unisys may assign this Agreement or its interest in any equipment,
or assign the right to receive payments, without Client's consent, Any
such assignment, however, will not change the obligations of Unisys to
Client. Client will not assign or transfer its rights or obligations
under this Agreement without prior written consent of Unisys. Any
assignment or transfer prohibited by this provision will be void. Unisys
may subcontract any services described in this Agreement to third parties
selected by Unisys.
19.7 The terms and conditions of this Agreement may be modified only by a
writing signed by a Unisys Vice President, General Manager or Contracts
Manager.
19.8 Each paragraph and provision of this Agreement is severable, and if
one or more paragraphs or provisions are declared invalid, the remaining
provisions of this Agreement will remain in full force and effect.
19.9 Products and services provided under this Agreement may be subject
to U.S. and other government export control regulations. Client assures
that it will comply with all applicable export laws and regulations
related to the use, disclosure, export, or reexport of these Products and
services.
Page 9 of 17
<PAGE>
<TABLE>
<CAPTION>
Agreement Number
UNISYS Equipment Sale Schedule -----------------------------------
Equipment Location
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Southern Community Bank and Trust, 13563 Midlothian Turnpike, Midlothian, VA 23113
- ------------------------------------------------------------------------------------------------------------------------------------
List of Products Applicable to this Agreement
- ------- ------------------- -------------------------- ---------- -------- --------- ------------- --------- ------------ ----------
Item Style Description Warranty Y2K Quantity Unit Client Installation Total
no. ready purchase install- Charge purchase
price able price
- ------- ------------------- -------------------------- ---------- -------- --------- ------------- --------- ------------ ----------
Page Page
subtotal subtotal--
Installation
charge Purchase
$ price
$
------------ ----------
Total Total
installation purchase
charge price
$ $
------------ ----------
Other
$
---------------------------
Grand total
$
---------------------------
Less: down payment
$
---------------------------
Total
amount due
$
--------------------------
</TABLE>
Service Warranty
Unisys will provide a Service Warranty for equipment designated A, B, C or D in
the Warranty column. Support Center Service for Client installable equipment is
included in the Service Warranty for 90 days from the Installation Date. Service
Warranty also includes Mail-In Service or Equipment On-Call Remedial Maintenance
according to the following description:
For equipment designated "A" which is within 60 miles of the center of a Unisys
concentration city, Unisys will provide Same Day Service(2). For equipment
designated "A" which is more than 60 miles from the center of the nearest Unisys
concentration city and for equipment designated "B," Unisys will provide Next
Day Service(1). For equipment designated "C," Unisys will provide Second Day
Service(1). For equipment designated "D," Unisys will provide Mail-In Service.
The number immediately following the A, B, C or D designation identifies the
number of months, following the Installation Date, that the Service Warranty
will be performed.
1) Refer to SURETY "Definitions and Service Descriptions".
2) Second Day Service means Unisys will make every reasonable effort to respond
to on-site service requests two business days from call placement during the
PPM.
Page 10 of 17
<PAGE>
<TABLE>
<CAPTION>
Agreement Number
UNISYS Equipment Sale Schedule -----------------------------------
Equipment Location Bill To Location Service Level
- -------------------------------------------- ----------------------------------- -----------------------------------
<S> <C>
(C) Comprehensive Platinum
(G) Comprehensive Gold
(P) Performance Gold
(S) Performance Silver
(A) Partner Silver
- -------------------------------------------- ----------------------------------- (B) Partner Bronze
Administrator Telephone number Administrator Telephone number
- ------------------------------------------------------------------------------------------------------------------------------------
Initial Term (Check if more than one year) Annual rate increase cap SURETY Support Services
[ ] 2-Years [ ] 3-Years [ ] Other: Years (3-year initial term or longer) Commencement Date
- ------------------------------------------------------------------------------------------------------------------------------------
Service Access (Check one) Billing period (Check one)
[ ] Standard [ ] Premium [ ] Quarterly [ ] Annual [ ] Other:
List of Products Applicabel to this Agreement
- ------------------ -------------- ---------------- -------------- --------------- ---------------- ---------------- ------------
Level Style Description Quantity Monthly Warranty Monthly SURETY
(Include Service Upgrade Unit charge Total charge
vendor name Warranty Total charge
and model if Upgrade
non Unisys Unit charge
product)
- ------------------ -------------- ---------------- -------------- --------------- ---------------- ---------------- ----------------
Page subtotal - Upgrade charges Page subtotal - Monthly charges
$ $
--------------- ---------------- ---------------- ----------------
Total upgrade Total montly
charges charges
$ $
--------------- ---------------- ---------------- ----------------
Other Other
$ $
--------------- ---------------- ---------------- ----------------
Upgrade Grand Grand Total
Total $
$
--------------- ---------------- ---------------- ----------------
</TABLE>
Charges
If Client is ordering SURETY Support Services for equipment that also has a
Service Warranty Period, the following applies. During the Service Warranty
Period, or any portion of this period, the equipment receives the Surety Support
Services ordered. The Monthly SURETY charge for equipment will not apply during
the Service Warranty period; however, the Monthly Service Upgrade charge will
apply.
Page 11 of 17
<PAGE>
Definitions and Service Descriptions
- --------------------------------------------------------------------------------
A. Definitions
Principal Period of Maintenance ("PPM") means 8:00 AM to 5:00 PM, Client's local
time, Monday through Friday, excluding Unisys designated holidays.
Off Hours means all hours other than the PPM.
Client Operational Hours ("COH") means all times when Client uses the Products.
Failed Unit means a unit of equipment enrolled under SURETY Support Services,
which is deemed eligible by Unisys for exchange, that is identified by Client as
not in working order.
Exchange Unit means new, repaired, or previously used equipment in working
order that Unisys conveys to Client as a replacement for a Failed Unit. The
Failed Unit will become the property of Unisys upon Client's receipt of the
Exchange Unit or, if later, upon receipt of the Failed Unit by Unisys. Client
warrants that title to the Failed Unit, and Unisys warrants that title to the
Exchange Unit, will be free and clear of all claims, liens, and encumbrances
including security interests.
Same Day Service means Unisys will make every reasonable effort to respond to
Client's requests for on-site SURETY Support Services within four (4) hours
provided the request is received no later than four (4) hours prior to the end
of Client's hours of coverage.
Next Day Service means Unisys will make every reasonable effort to respond to
Client's request for on-site SURETY Support Services received during a PPM no
later than the next PPM.
B. Service Descriptions
Unless specified on the Schedule or in this Section, the Initial Term for SURETY
Support Services will be 12 months and will commence on the later of the
Installation Date of the applicable Products or the date Unisys accepts the
Services order. Unless specified on the Schedule. the Initial Term of SURETY
Support Services for Products added to a system already enrolled under SURETY
Support Services will be coterminous with the applicable term of the Services on
that system and, for purposes of changes to SURETY Support Service charges, will
be deemed to have the same commencement date as the applicable term of the
Services on that system. Following the Initial Term, SURETY Support Services
will continue on an annual renewal basis at Unisys then-current prices until
terminated or canceled according to the terms of this Agreement. The specific
services for each Service Level are identified on the next page.
1. Support Center Services provides assistance by electronic or voice
communication during the PPM on operating the Products, identifying Product
errors or malfunctions and advising on known detours, reporting software
problems via a User Communication Form (UCF), and determining the need for
on-call remedial service. Support Center Services during Off Hours consist of
expediting response to network down and system emergencies. Some non Unisys
products are not included in this service.
2. User Communication Services provides for reporting of suspected Product
errors or malfunctions or suggested new feature changes. Unisys will make
reasonable efforts to provide detours or corrections for Unisys Products or non
Unisys Products if available to Unisys at no additional charge from the vendor.
Client will install all error corrections. User Communication Services and UCF
submissions are available only for Products for which Unisys is then currently
providing development center support (also called engineering support).
3. Essential Engineering Changes are changes released by Unisys for
safety purposes or changes Unisys determines are essential to the performance of
equipment. Changes will be installed at a mutually acceptable time during the
applicable hours of coverage. For non Unisys equipment, Unisys will install
Essential Engineering Changes based upon the availability of required materials
at no cost to Unisys and additional labor charges will apply for Service Levels
other than Comprehensive Gold and Platinum.
4. Equipment Maintenance Parts are parts required for repairs made by Unisys
personnel.
5. Mail-In Service allows Client, at its expense and risk, to ship or to bring a
Failed Unit to the Unisys designated location. Within 7 business days of
receipt, Unisys repairs the Failed Unit or gives Client an Exchange Unit.
6. Software Maintenance Releases are error corrections and maintenance releases
that Unisys develops or provides for currently supported Software level(s).
Unisys licenses these releases only for use on the designated computer system(s)
under the applicable license agreement. Client will install all applicable error
corrections and maintenance releases.
7. Electronic Self Services provides Client with access to an Internet web site
to place equipment service and Software support requests, to obtain information
on known errors and corrections, and to get information on Unisys products and
services.
8. Advance Exchange Service allows Client to notify the Unisys designated point
of contact of a Failed Unit enrolled in the Service. Upon notification, Unisys
will ship an Exchange Unit to the Client using a next day delivery service.
Client will install the Exchange Unit and, at its expense and risk, ship the
Failed Unit to Unisys within 14 days after Client's receipt of the Exchange
Unit. Advance Exchange Service is limited to selected equipment.
9. Equipment On-Call Remedial Maintenance includes on-site repair or Exchange
Unit service, at Unisys option, of equipment, if a problem remains unresolved
after Client has utilized Support Center Services as prescribed.
10. Electronic On-Site Services allows the Support Centers to receive system
data from Client and perform remote failure analysis. Client will supply the
equipment, software, and communication facilities to use the electronic support
service capabilities of the Products as outlined in the Unisys product support
plan.
11. Equipment Preventive Maintenance, including the installation of engineering
changes deemed appropriate by Unisys, will be performed at Client's location
according to the manufacturer's recommendations at a mutually acceptable time
during the applicable hours of coverage.
12. Systems Operations Review provides that Unisys will meet with Client's
personnel once annually, at a mutually acceptable location and time, to conduct
computer systems operation reviews with respect to the Products. Client is
responsible for scheduling the meeting. This service applies to systems
designated by Unisys as enterprise servers or mainframes.
13. Software On-Call Support provides on-site service if Unisys determines that
a Software problem remains unresolved and on-site assistance is required, after
Client has used Support Center Services as prescribed. Desktop products are not
included in this service.
14. Equipment On-Call Remedial Maintenance Guaranteed Response means that if
Client is located within a 60 mile radius from the center of a Unisys
concentration city, Unisys commits to have a client service representative
arrive at Client's site within two (2) hours during PPM and within three (3)
hours outside of PPM. Response is measured from the time that Unisys receives
the request for service from Client until Unisys arrives at Client's site. If
Unisys moves its concentration city or Client relocates its site so that
Client's site is no longer within a 60 mile radius from the center of a Unisys
concentration city, Unisys reserves the right to adjust or eliminate the Service
Level.
15. Support Center Guaranteed Response (available only during the PPM) provides
that Unisys will respond to Client's declared emergencies no later than one (1)
hour after receipt of Client's request at the Support Center designated by
Unisys.
C. Descriptions of Service Access
Standard Access to Support Center Services provides Client with unlimited use of
Electronic Self Services. Voice contacts are chargeable on a per call basis at
Unisys then-current rates.
Premium Access to Support Center Services provides Client with unlimited use of
Electronic Self Services and an unlimited number of voice contacts with the
Unisys Support Centers.
D. Descriptions of Response to On-Call Service Requests
Performance Silver provides Next Day Service for Equipment On-Call Remedial
Maintenance.
Performance Gold and Comprehensive Gold provide Same Day Service for Equipment
On-Call Remedial Maintenance.
Comprehensive Platinum provides Equipment On-Call Remedial Maintenance
Guaranteed Response.
Page 12 of 17
<PAGE>
Unisys SURETY Support Servcie Levels
- --------------------------------------------------------------------------------
The Service Levels as described below are cumulative (e.g., the services defined
under Performance are in addition to those defined under Partner). Not all
services and Service Levels are available on all Products; please see the
Service Descriptions for additional details. The hours of coverage for
Partner and Performance Service Levels are during the PPM. The hours of
coverage for Comprehensive Service Levels are during the COH, unless
designated PPM only. Individual Unisys SURETY Support Services contained
in a higher Service Level than contracted are provided at Client request, as
available, at then-current Unisys conditions and charges.
- --------------------------------------------------------------------------------
Service Levels
Comprehensive - Platinum
Equipment On-Call Remedial Maintenance Guaranteed Response
Support Center Guaranteed Response (PPM only)
Comprehensive - Gold
Systems Operations Review
Software On-Call Support
Performance - Silver/Gold
Equipment On-Call Remedial Maintenance
Electronic On-Site Services
Equipment Preventive Maintenance
Partner - Silver
Advance Exchange Service
Partner - Bronze
[GRAPH]
Support Center Services
User Communication Services
Essential Engineering Changes
Equipment Maintenance Parts
Mail-In Service
Software Maintenance Releases
Electronic Self Services
- --------------------------------------------------------------------------------
Page 13 of 17
<PAGE>
<TABLE>
<CAPTION>
Agreement Number
UNISYS Equipment Sale Schedule -----------------------------------
Equipment Location
Smith River Bankshares, Inc. 730 E. Church Street, Martinsville, VA 24112
List of Products Applicable to this Agreement
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Item Style Description Quantity Warr. Y2K License License Initial Installation
no. ready plan charge license charge
(Specify charge
1 NTS40-L NT4.0 S/W 4 R ETP 4420
2 NDP250-INT DOC PROC S/W 1 R term) 6000
3 NTW40-P NT S/W 1 R OTC 0
4 DPC300-DPT DEPCON S/W 1 R OTC 2420
5 DPC300-AFK DEPCON DEPT S/W 1 R OTC 825
OTC
OTC
These license are being paid on customers behalf by
information Technology, Inc. (ITC) provided that customer
has executed the necessary ITI agreements.
- -------- ------------ --------------------------------- --------- ------- ------- ------------ ------------ ----------- ------------
Page Page Page
subtotal - subtotal - subtotal -
License Initial Installation
Charge license charge
charge
$ 13,665 $ $
------------ ----------- ------------
Total Total Total
license initial installation
charge license charge
charge
$ 13,665 $ $
------------ ----------- ------------
Grand total
$ 13,665
------------ ----------- ------------
</TABLE>
License Plans
1. Licenses of Software for which Unisys charges either an Annual License Charge
(ALC) or a Montly License Charge (MLC) will have an initial term of twelve
months commencing on the Installation Date. The MLC license will continue on a
month-to-month basis and the ALC will renew annually until the license is
terminated or cancelled in accordance with the Termination and Cancellation
section of this Agreement.
2. For certain licenses, Unisys may charge an Initial License Charge which will
include the first monthly or annual charge.
3. Extended Term Plan (ETP): Certain licenses of Software for which Unisys
charges a single fee may have a 36 or 60 month extended term commencing on the
Installation Date. Upon expiration of the extended term, the license will be
automatically continued on a month-to-month basis for a Monthly License Charge,
unless terminated in accordance with the Termination and Cancellation section of
this Agreement, or Client may pay another ETP fee for an additional extended
term, if available.
4. One Time Charge (OTC): For certain Software, upon payment of a one-time
charge (invoiced upon shipment of the Software), Unisys will license Client to
use the Software so long as Client continues to use the Software on the SPU on
which it was originally licensed for use.
5. Software that has no license charge listed on this Schedule will have a
license term which is coterminous with Client's possession and use of the
equipment on which the Software is installed.
Page 14 of 17
<PAGE>
<TABLE>
<CAPTION>
Agreement Number
UNISYS Equipment Sale Schedule -----------------------------------
Periodic Basis
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Item Type of services No. of Hourly Period Total hours Total periodic charge
no. personnel charge Days/Weeks/Months
- ------------------------------------------------------------------------------------------------------------------------------------
Page subtotal - Periodic
$
-------------------------
Grand total - Periodic
$
-------------------------
Fixed Charges
- ------------------------------------------------------------------------------------------------------------------------------------
Item Type of service Description Fixed charge
no.
- ------------------------------------------------------------------------------------------------------------------------------------
Page subtotal - Fixed
$
-------------------------
Grand total - Fixed
$
-------------------------
</TABLE>
Information Services may also be called Professional Services or Systems
Services. Client will be invoiced for travel and lodging and premium service
charges in addition to those set forth above, as applicable.
Page 15 of 17
<PAGE>
Agreement Number
----------------
Description of Information Services
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Page 16 of 17
<PAGE>
Agreement Number
----------------
Description of Information Services (Cont.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Page 17 of 17
Exhibit 10.2
INFORMATION TECHNOLOGY INC.
EQUIPMENT SALE AGREEMENT
Agreement made between Information Technology, Inc. (the "Vendor"), and the
"Customer" identified below.
I. PURCHASE
1.1 Customer hereby purchases from Vendor and Vendor hereby sells to
Customer the equipment identified in Appendix A (the "Equipment"), upon the
terms set forth in this agreement.
II. DELIVERY
2.1 Delivery and installation of the Equipment will be made by the
manufacturer of the Equipment identified in Appendix A (the "Manufacturer"), at
Customer's address set forth below. Customer agrees to have a site adequately
and properly prepared, in accordance with Manufacturer's instructions, to
receive and accept delivery of the Equipment. In no event shall Vendor be
responsible to Customer for any delays in delivery or installation or any
damages to Customer resulting from such delays.
III. CONSIDERATION
3.1 PURCHASE PRICE. As and for the purchase price for the Equipment,
Customer agrees to pay Vendor and Vendor agrees to accept from Customer, the
purchase price specified in Appendix A.
3.2 TAXES AND OTHER CHARGES. In addition to the purchase price, Customer
shall pay all transportation charges and all taxes (including, without
limitation, sales, use, privilege, ad valorem or excise taxes) and customs
duties paid or payable by Vendor, however designated, levied or based on amounts
payable to Vendor under this agreement, but exclusive of federal, state and
local taxes based on Vendor's net income. If additional labor and rigging are
required for installation due to Customer's special site requirements, Customer
will pay those costs, including costs to meet union or local law requirements.
Customer shall not deduct from payments to Vendor any amounts paid or payable to
third parties for transportation charges, customs duties or taxes, however
designated.
3.3 MANNER OF PAYMENTS. The purchase price and other charges arising under
this agreement shall be payable by Customer to Vendor in the following manner:
(A) A percentage of the purchase price, as specified in Appendix A, shall be
payable upon execution of this agreement by Customer; the receipt or deposit of
such payment, however, shall not constitute Vendor's acceptance of this
agreement.
(B) The balance of the purchase price, together with any transportation
charges and any taxes and duties theretofore incurred by Vendor, shall be
payable upon delivery of the Equipment to Customer.
(C) Any taxes, duties, or other charges incurred by Vendor following
delivery of the Equipment shall be payable within ten (10) days of receipt by
Customer of Vendor's invoice therefor.
3.4 CURRENCY. The purchase price and any other charges arising under this
agreement shall be invoiced and be payable in U.S. Dollars.
3.5 LATE PAYMENT. Customer shall pay a late payment charge of one and
one-half percent (1 1/2%) per month, or the maximum late any payment charge
permitted by applicable law, whichever is less, on any amount payable by
Customer under this Agreement and not paid when due. Said late payment charge
shall be applied for each calendar month (or fraction thereof) that such payment
is not made following its due date.
IV. TITLE
4.1 Until such time as the purchase price and any other charges payable to
Vendor as of the date of delivery have been paid in full, the Equipment and all
instruction manuals therefor shall remain the property of Vendor and, at the
option of Vendor, shall be returned to Vendor at Customer's expense in the event
the purchase price is not paid as hereinabove provided.
V. SECURITY
5.1 Vendor reserves and Customer grants to Vendor a security interest in the
Equipment as security for the performance by Customer of its obligations
hereunder including, but not limited to, payment of the purchase price and other
charges as specified in Section III above. A copy of this agreement may be filed
in appropriate filing offices at any time after signature by Customer as a
financing statement or Vendor may require and Customer shall execute a separate
financing statement for purposes of perfecting Vendor's security interest
granted pursuant to the provisions of this paragraph.
VI. CUSTOMER OBLIGATIONS
6.1 RISK OF LOSS. From and after the date of delivery, the risk of loss or
damage to the Equipment shall be on the Customer.
6.2 OPERATION. Customer acknowledges and agrees that it is exclusively
responsible for the operation, supervision, management and control of the
Equipment, including, but not limited to, providing adequate training for its
personnel, instituting appropriate security procedures, and implementing
reasonable procedures to examine and verify all output before use. Vendor shall
have no responsibility or liability for Customer's selection or use of the
Equipment or any associated equipment.
VII. WARRANTIES
7.1 WARRANTY. Vendor warrants to Customer that it has the right to transfer
title of the Equipment to Customer. Vendor's sole liability under this warranty
shall be to obtain any title or authorization necessary to transfer such title
to Customer.
7.2 DISCLAIMER. THE FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES
AND NO OTHER WARRANTY IS EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
7.3 MANUFACTURER'S WARRANTY. Customer expressly understands and agrees that
warranties regarding patents, materials, workmanship or use of the Equipment
(the "Manufacturer's Warranty"), if any, are made exclusively by the
Manufacturer and not by Vendor, and if made, shall be encompassed within a
separate agreement. Customer's exclusive remedy under Manufacturer's Warranty
shall be as provided therein and shall lie exclusively against and be obtainable
only from the Manufacturer, and Customer expressly agrees that it shall have no
claim or cause of action against Vendor in the event the Manufacturer is for any
reason unwilling or unable to perform under the terms of Manufacturer's
Warranty.
7.4 LIMITATION OF LIABILITY. Customer expressly agrees that Vendor's
responsibilities in the event of its breach of the warranties contained in
paragraph 7.1 of this agreement are as set forth in said paragraph. Vendor's
liability for damages, regardless of the form of action shall not exceed the
purchase price set forth in Appendix A to this agreement and shall arise only if
the remedies set forth in paragraph 7.1 are not fulfilled by Vendor. Customer
further agrees that Vendor will not be liable for any lost profits, or for any
claim or demand against Customer by any other party. IN NO EVENT WILL VENDOR BE
LIABLE FOR CONSEQUENTIAL DAMAGES EVEN IF VENDOR HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. No action, regardless of form, arising out of the
transactions under this agreement, may be brought by either party more than one
(1) year after the cause of action has accrued, except that an action for
non-payment may be brought within one (1) year after the date of the last
payment.
<PAGE>
THE CUSTOMER'S REMEDIES SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE.
VIII. DEFAULT
8.1 REMEDY. Upon the occurrence of an event of default, as hereinafter
defined, by Customer, if the Equipment has theretofore been delivered, Vendor
may recover, together with any incidental damages, any unpaid portion of the
purchase price of the Equipment as specified in Appendix A hereto. If the
Equipment has not been delivered, in which event Vendor may withhold delivery of
such Equipment, or if the Equipment is returned to Vendor upon Vendor's election
pursuant to Section IV, Vendor shall resell the Equipment. Upon such resale,
Vendor shall recover from Customer the difference between the unpaid portion of
the purchase price, as specified in Appendix A, and the resale price, together
with any incidental damages, including expenses of resale, sustained by Vendor
by reason of Customer's breach. If the resale price exceeds the unpaid portion
of the purchase price and Vendor's incidental damages, Vendor shall remit the
excess to Customer.
8.2 EVENTS OF DEFAULT. As utilized in this agreement, an event of default is
defined as any of the following:
(A) Customer's failure to pay any amounts required to be paid to Vendor
under this agreement on a timely basis;
(B) Until the purchase price has been paid in full, any attempt by Customer
to assign, sell, mortgage, or otherwise convey the Equipment;
(C) Prior to the payment in full of the purchase price, Customer causing or
permitting any encumbrance, of any nature whatsoever, to attach to Customer's
interest in the Equipment in favor of any person or entity other than Vendor;
(D) The entry of any order for relief under any provision of the federal
bankruptcy code in any bankruptcy proceedings initiated by or against Customer;
or
(E) Customer's breach of any of the terms or conditions of this agreement.
IX. GENERAL
9.1 TITLES. Titles and paragraph headings are for reference purposes only
and are not to be considered a part of this agreement.
9.2 FORCE MAJEURE. No party shall be liable for delay in performance
hereunder due to causes beyond its control, including but not limited to acts of
God, fires, strikes, delinquencies of suppliers, intervention of any
governmental authority or acts of war and each party shall take steps to
minimize any such delay.
9.3 WAIVER. No waiver of any breach of any provision of this agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of the same or
any other provisions hereof and no waiver shall be effective unless made in
writing and signed by an authorized representative of the party to be charged
therewith.
9.4 SEVERABILITY. In the event that any provision of this agreement shall be
illegal or otherwise unenforceable, such provision shall be severed from this
agreement and the entire agreement shall not fail on account thereof, the
balance of the agreement continuing in full force and effect.
9.5 NOTICES. Any notice which either party hereto is required or permitted
to give hereunder shall be addressed to the party to be charged therewith at the
address set forth below and shall be given by certified or registered mail. Any
such notice shall be deemed given on the date of deposit in the mail.
9.6 ENTIRE AGREEMENT. THE PARTIES HERETO ACKNOWLEDGE THAT EACH HAS READ THIS
AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS. THE PARTIES
FURTHER AGREE THAT THIS AGREEMENT AND ANY MODIFICATIONS MADE PURSUANT TO IT
CONSTITUTE THE COMPLETE AND EXCLUSIVE WRITTEN EXPRESSION OF THE TERMS OF THE
AGREEMENT BETWEEN THE PARTIES, AND SUPERSEDE ALL PRIOR OR CONTEMPORANEOUS
PROPOSALS, ORAL OR WRITTEN, UNDERSTANDINGS, REPRESENTATIONS, CONDITIONS,
WARRANTIES, COVENANTS, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT. THE PARTIES FURTHER AGREE THAT THIS
AGREEMENT MAY NOT IN ANY WAY BE EXPLAINED OR SUPPLEMENTED BY A PRIOR OR EXISTING
COURSE OF DEALINGS BETWEEN THE PARTIES, BY ANY USAGE OF TRADE OR CUSTOM, OR BY
ANY PRIOR PERFORMANCE BETWEEN THE PARTIES PURSUANT TO THIS AGREEMENT OR
OTHERWISE. IN THE EVENT CUSTOMER ISSUES A PURCHASE ORDER OR OTHER INSTRUMENT
COVERING THE EQUIPMENT HEREIN SPECIFIED, IT IS UNDERSTOOD AND AGREED THAT SUCH
PURCHASE ORDER OR OTHER INSTRUMENT IS FOR CUSTOMER'S INTERNAL USE AND PURPOSES
ONLY AND SHALL IN NO WAY AFFECT ANY OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT.
9.7 GOVERNING LAW. This agreement is accepted in the State of Nebraska, and
shall be enforced in accordance with and governed by the laws of the State of
Nebraska.
9.8 CHOICE OF FORUM. Any action arising out of or related to this agreement
or the transaction herein described, whether at law or in equity, may be
instituted in and litigated in the state or federal courts of the State of
Nebraska. In accordance herewith, the parties hereto submit to the jurisdiction
of the courts of said state. Any party being not a resident of Nebraska at the
time of suit hereby appoints the Secretary of State of Nebraska as its agent for
receipt of service of process.
9.9 ATTORNEY'S FEES. In the event that any action or proceeding is brought
in connection with this agreement the prevailing party therein shall be entitled
to recover its costs and reasonable attorney's fees.
9.10 EFFECTIVE DATE. This agreement shall be effective on the date accepted
and executed by an authorized representative of Vendor.
<PAGE>
CUSTOMER: VENDOR:
<TABLE>
<CAPTION>
<S> <C>
Smith River Bankshares, Inc. INFORMATION TECHNOLOGY, INC.
- -----------------------------------------------------
Signature: Signature:
-------------------------------------------- --------------------------------------------
Name: Name:
-------------------------------------------- --------------------------------------------
Title: Title:
-------------------------------------------- --------------------------------------------
Address: 730 E. Church Street, Suite #12 Address: 1345 Old Cheney Road
-------------------------------------------- --------------------------------------------
Martinsville, VA 24112 Lincoln, NE 68512
-------------------------------------------- --------------------------------------------
Date: 10/25/99 Date Accepted:
-------------------------------------------- -------------------------------------
</TABLE>
<PAGE>
Exhibit 10.2(Continued)
<TABLE>
<CAPTION>
Appendix A1-Unisys Hardware/PC Systems
Smith River Community Bank, 730 East Church St., Martinsville, VA 24112
Item Qty Style Number Description List % Disc Selling Monthly
Price Surety
<S> <C>
Small File Server
2 ES202131-GXN SVR:ES2023 DUAL PII/III NT $ 2,800.00 $ 2,800.00 $ 24.00
2 ESS202101-N SYS MGT:2X $ 2.00 $ 2.00 $ 4.00
2 DIM10072-128 MEM:128MB DIM $ 800.00 $ 800.00 $ 12.00
1 EVG2100-P DISPLAY:15" PERFORM COL $ 300.00 $ 300.00 $ -
2 ADP68501-FTF ADPTR:68 TO 50 PIN FEMAL $ 68.00 $ 68.00 $ -
4 HDL917-W DISK:9GB 1"UW $ 2,320.00 $ 2,320.00 $ 32.00
2 CPU3500-512 500MZ PIII W/ACT FAN-HEATSINK $ 1,670.00 $ 1,670.00 $ 40.00
1 PWM1-PS2 MOUSE:2 BUTTON MOUSE/PS2 $ 20.00 $ 20.00 $ -
2 NTS40-L O/S: NT 4.0 SERVER $ 2,210.00 $ 2,210.00 $ 32.00
2 TWM22047-CHK Director Check Load $ 60.00 $ 60.00 $ -
2 TWM22045-COL Director Cold Load $ 60.00 $ 60.00 $ -
2 TWM22046-SCN Director Scanner Sw Load $ 60.00 $ 60.00 $ -
1 TWM10051-NTS ArcserveIT Workgroup Edition For Windows NT Load $ 28.00 $ 28.00 $ -
2 TWM10082-NT3 InoculateIT Workgroup edition for Win NT Server Load $ 57.00 $ 57.00 $ -
2 TWM10051-DRC ArcserveIT NT Disaster Recovery Load $ 56.00 $ 56.00 $ -
2 TWM10024-COM PII Teller S/W Load Commercial $ 57.60 $ 57.60 $ -
2 TWM60001-001 Plus/PII Teller/Primier II Server Label $ - $ - $ -
1 PCK104-SKB KEYBD:SPACE SAVER $ 35.00 $ 35.00 $ -
ITI Check Print Server - SVGA - 64MB
1 D8440-AV SYS:VLi8 BASE SYS W/UNISYS KIT $ 1.00 $ 1.00 $ -
1 D7880-AV ACC:UNISYS DT KIT $ 1.00 $ 1.00 $ -
1 D2828-A DISPLAY:15" COLOR HP52 $ 215.00 $ 215.00 $ 4.00
1 D7850-AV SYS:VLi8 SMALL FORM FACTOR $ 555.00 $ 555.00 $ 15.00
1 D8451-AV DISK:FDD SMALL FORM FACTOR $ 1.00 $ 1.00 $ -
1 C4735-AV KEYBD:VL KYBD W/WIN95KEY $ 30.00 $ 30.00 $ -
1 D8747-AV PROC: C500MHZ CPU $ 306.00 $ 306.00 $ -
1 D6502-AV MEM:64MB SDRAM NON-ECC $ 130.00 $ 130.00 $ -
1 D8446-AV DISK:8.4GGB IDE ULTRA ATA33 $ 190.00 $ 190.00 $ 9.00
1 D8450-AV CDR:24XIDE CDROM $ 70.00 $ 70.00 $ 4.00
1 D8471-LAV O/S:NT 4.0 FOR VLI 8 $ 110.00 $ 110.00 $ -
1 D8453-AV O/S:NT 4.0 RECOVERY CD VLI8 $ 1.00 $ 1.00 $ -
1 S4507-A ACC:VECTRA Basic Integration Service $ 79.00 $ 79.00 $ -
1 D7576710-AV Print Server Label $ - $ - $ -
TELLER Workstation
4 D9046-A SYS:SMC C400,6.4G, 32M, WIN $ 4,316.00 $ 4,316.00 $ -
4 TD86016 14" Color Display $ 564.00 $ 564.00 $ -
4 D7476716-AV Premier II Teller Label $ - $ - $ -
4 D7577004-AV Desktop Load - Combo $ 112.00 $ 112.00 $ -
DEPCON Workstation
1 D8120-AV SYS:VLI7 Base $ 455.00 $ 455.00 $ -
1 D7880-AV ACC:UNISYS KIT $ 1.00 $ 1.00 $ -
1 D6502-AV MEM:64MB DIM $ 130.00 $ 130.00 $ 4.00
1 D8464-AV DISK:8.4GB IDE ULTRA ATA33 $ 190.00 $ 190.00 $ 9.00
1 D8072-AV CDR:48XIDE CDROM $ 70.00 $ 70.00 $ 4.00
1 D8470-AV KEYBD:VL KYBD W/WIN95KEY $ 30.00 $ 30.00 $ -
1 D8927-AV PROC: C500MHZ CPU $ 159.00 $ 159.00 $ -
1 D8478-AV LAN HW:3COM LAN CARD $ 50.00 $ 50.00 $ -
1 D8471-EAV O/S: NT 4.0 FOR VEI 7/8 $ 110.00 $ 110.00 $ -
1 D2828-A 15" Color Monitor $ 215.00 $ 215.00 $ -
1 S4507-A ACC:VECTRA Basic Integration Service $ 79.00 $ 79.00 $ -
1 D8468-AV O/S: NT 4.0 RECOVERY CD VLI8 $ 1.00 $ 1.00 $ -
Check/Director CD Authoring Workstation
1 D8440-AV SYS:VLi8 BASE SYS W/UNISYS KIT $ 1.00 $ 1.00 $ -
1 D7950-AV SYS:VLi8 DESKTO[P BASE SYS $ 581.00 $ 581.00 $ 15.00
1 D6502-AV MEM:64MB SDRAM NON-ECC $ 130.00 $ 130.00 $ -
2 D8465-AV DISK: $ 280.00 $ 280.00 $ 4.00
1 D6951-A ACC:SCSI CONTROL $ 250.00 $ 250.00 $ -
1 D2828-A DISPLAY:15" COLOR HP52 $ 215.00 $ 215.00 $ 4.00
1 D84790-AV DISK:32X IDE CDROM $ 70.00 $ 70.00 $ 4.00
1 D8478-AV LAN HW:3COM LAN CARD $ 50.00 $ 50.00 $ -
1 D8472-LAV O/S:WIN98 FOR VLI 8 $ 10.00 $ 10.00 $ -
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Appendix A1-Unisys Hardware/PC Systems
Smith River Community Bank, 730 East Church St., Martinsville, VA 24112
Item Qty Style Number Description List % Disc Selling Monthly
Price Surety
<S> <C>
1 D8445-AV PROC:500MZ PIII $ 345.00 $ 345.00 $ -
1 C4735-AV KEYBD:VL KYBD W/WIN95KEY $ 30.00 $ 30.00 $ -
1 D7880-AV ACC:UNISYS DT KIT $ 1.00 $ 1.00 $ -
1 TD076143 SCSI Wide To narrow Converter $ 35.00 $ 35.00 $ -
1 D7576712-AV CD Authoring Workstation Label $ - $ - $ -
1 D7577004-AV Desktop Load - Combo $ 28.00 $ 28.00 $ -
1 S4507-A ACC:VECTRA Basic Integration Service $ 79.00 $ 79.00 $ -
1 D8455-AV O/S:WIN98 RECOVERY CD $ 1.00 $ 1.00 $ -
Client Workstations - 64MB - SVGA Color
4 D8440-AV SYS:VLi8 BASE SYS W/UNISYS KIT $ 4.00 $ 4.00 $ -
4 D7850-AV SYS:VLi8 DESKTOP BASE SYS $ 2,220.00 $ 2,220.00 $ 45.00
4 D6502-AV MEM:64MB SDRAM NON-ECC $ 520.00 $ 520.00 $ -
4 D8901-a DISPLAY:17" MONITOR $ 1,224.00 $ 1,224.00 $ 15.00
4 D84470AV DISK:6.4GB IDE ULTRA ATA33 $ 680.00 $ 680.00 $ 18.00
4 D8450-AV DISK: 24XIDE CDROM $ 280.00 $ 280.00 $ 12.00
4 D8472-LAV O/S:WIN98 FOR VLI 8 $ 40.00 $ 40.00 $ -
4 D7880-AV ACC:UNISYS DT KIT $ 4.00 $ 4.00 $ -
4 D8452-AV ACC: COVER PLATE $ 4.00 $ 4.00 $ -
4 C4735-AV KEYBD:VL KYBD W/WIN95KEY $ 120.00 $ 120.00 $ -
4 D8731-AV PROC: C466MHZ CPU $ 600.00 $ 600.00 $ -
4 D7576702-AV Director Client Label $ - $ - $ -
4 D757004-AV Desktop Load - Combo $ 112.00 $ 112.00 $ -
4 S4507-A ACC: VECTRA Basic Integration Service $ 316.00 $ 316.00 $ -
4 D8455-AV O/S:WIN98 RECOVERY CD $ 4.00 $ 4.00 $ -
Operations Workstations -128MB - Color
3 D8160-AV SYS: VEi7-8 Base Sys $ 1,419.00 $ 1,419.00
3 D7880-AV ACC: Unisys Kit $ 3.00 $ 3.00
3 D8462-AV PROC: 500MHZ PIII CPU $ 1,035.00 $ 1,035.00
3 D6503-AV MEM: 128MD SDRAM $ 705.00 $ 705.00
3 D8470-AV KEYBD $ 90.00 $ 90.00
3 D8745-AV DISK: 6.4MB $ 510.00 $ 510.00
3 D8072-AV DISK: 48X CDROM $ 210.00 $ 210.00
3 D8478-AV LAN:3COM Card $ 150.00 $ 150.00
3 D8720-AV O/S Windows 98 Recovery CD $ 3.00 $ 3.00
3 D4545-A ACC: Amplified Speakeres $ 225.00 $ 225.00
3 D8901-A 17" Color Display $ 918.00 $ 918.00
Connect3 Communication Server
1 D7029-AV SYS:LC3 450MZ HS W/CDROM $ 1,730.00 $ 1,730.00 $ 25.00
1 D6098-AV MEM:128MB SDRAM $ 218.00 $ 218.00 -
1 D5025-AV ACC:ULTA/WIDE SCSI ADPT $ 208.00 $ 208.00 -
1 D8901-A 17" Color Monitor $ 306.00 $ 306.00 -
1 D4289-AV DISK:LC3 9GB HOTSWAP HDD $ 617.00 $ 617.00 $ 12.00
1 D2199-A ACC:HDD TRAYS 5.5" H/S $ 69.00 $ 69.00 $ -
1 D5013-AV ACC: 10/100TX PCI NIC LAN $ 94.00 $ 94.00 $ -
1 D7051-NT O/S:NT PRE-LOAD $ 940.00 $ 940.00 $ 16.00
1 S4523-A Advanced Server Integration Load $ 139.00 $ 139.00 $ -
1 D7075-AV ACC: UNISYS LC3 KIT $ 1.00 $ 1.00 $ -
1 D7053-AV ACC:LC3NT SRV KIT $ 1.00 $ 1.00 $ -
1 D7017-AV ACC:USER MANUAL D5025AV $ 1.00 $ 1.00 -
1 D5983-AV ACC:LC3 HOTSWAP HDD KIT $ 1.00 $ 1.00 $ -
Small Director/Image Server
1 DS200082-BAS SYS:DS/2B BASE NT PKG $ 3,075.00 $ 3,075.00 $ 25.00
1 DSR3500-512 PROC:500MZ/512K $ 835.00 $ 835.00 $ 25.00
1 CAG32-291 ACC:3 DRIVE CAGE INTAKE $ 175.00 $ 175.00 $ 2.00
2 DIM10072-128 MEM:128MB DIM $ 800.00 $ 800.00 $ 12.00
2 HDL91102-C DISK:9GB 10K LVD SCA W/RAILS $ 1,400.00 $ 1,400.00 $ 16.00
1 HDL91102-C DISK:9GB 10K LVD SCA W/RAILS $ 700.00 $ 700.00 $ 8.00
1 CDR1740-SI CDR:17-40X SCSI CD-ROM $ 180.00 $ 180.00 $ 3.00
1 RAD302-PCI CTRL:3CHAN RAID W/O MEM $ 1,825.00 $ 1,825.00 $ 15.00
1 RAD3642-MEM MEM:64M SIM - RAD302-PCI $ 300.00 $ 300.00 $ 4.00
1 RAD302-BAT ACC:CACHE MEM BKUP BATT $ 240.00 $ 240.00 -
1 HDL91102-C DISK:9GB 10K LVD SCA W/RAILS $ 700.00 $ 700.00 $ 8.00
2 HDL18110-C DISK 18GB 10K LVD SCA W/RAILS $ 2,800.00 $ 2,800.00 $ 32.00
2 ETH1010071-PCI COMM HW:10/100MB TX PCI $ 268.00 $ 268.00 -
1 PCI400-1UD CTRL: 1CHAN ULT SCSI DIFF $ 525.00 $ 525.00 $ 3.00
1 INF10051-ANS Arcserv For Windows NT ENTerprise Load $ 28.00 $ 28.00 -
2 B25-LC PWR CORD: LINE CORD $ 2.00 $ 2.00 -
1 INF22040-CON ITI Connect Suite $ 30.00 $ 30.00 -
1 INF22045-COL Director Cold Load $ 30.00 $ 30.00 -
</TABLE>
Page 2
<PAGE>
<TABLE>
<CAPTION>
Appendix A1-Unisys Hardware/PC Systems
Smith River Community Bank, 730 East Church St., Martinsville, VA 24112
Item Qty Style Number Description List % Disc Selling Monthly
Price Surety
<S> <C>
1 INF22046-SCN Director Scanner Sw Load $ 30.00 $ 30.00 -
1 INF22047-CHK Director Check Load $ 30.00 $ 30.00 -
1 INF10051-DRC Arcserv NT Disaster Recovery Load $ 28.00 $ 28.00 -
2 DSA400-PWR POWER: AC P/S 400W TOWER $ 700.00 $ 700.00 $ 6.00
1 INF22001-SDS S/J Config $ 28.00 $ 28.00 -
3 CBL23341-F3 AC: INT u/WIDE 40IN SCSI $ 180.00 $ 180.00 -
1 ADP687501-FTF ADPTR:68 to 50 PIN FEMAL $ 34.00 $ 34.00 -
1 NTS40-L O/S: NT 4.0 SERVER $ 1,105.00 $ 1,105.00 $ 16.00
NT Proof File Server (PFS)
1 ES202131-GZN SVR:ES2023 DUAL PII/III NT $ 1,400.00 $ 1,400.00 $ 12.00
1 DIM10072-128 MEM: 128MB DIM $ 400.00 $ 400.00 $ 6.00
1 NTS40-L O/S:NT 4.0 SERVER $ 1,105.00 $ 1,105.00 $ 16.00
5 HDS917-W DISK:9GB 1" WIDE SCSI $ 4,000.00 $ 4,000.00 $ 10.00
1 ESS202010-N SYS MGT:2X $ 1.00 $ 1.00 $ 2.00
1 EVG2100-P DISPLAY:15" PERFORM COL $ 300.00 $ 300.00 -
1 TWM10051-DRC ArcservelT NT Disaster Recovery Load $ 27.00 $ 27.00 -
1 TWM22040-CON ITI Connect Suite $ 28.80 $ 28.80 -
1 S4521-A Basic Server Integration Load $ 79.00 $ 79.00 -
3 ETH1010071-PCI COMM: HW:10\100MB TX PCI $ 402.00 $ 402.00 -
1 CPU3500-512 500MZ PIII W/ACT FAN-HEAT SINK $ 835.00 $ 835.00 $ 20.00
1 PWM1-PS2 MOUSE:2 BUTTON MOUSE/PS2 $ 20.00 $ 20.00 -
1 PCK104-SKB KEYBD: SPACE SAVER $ 35.00 $ 35.00 -
1 RAD302-PCI CTRL: 3CHAN RAID W/O MEM $ 1,825.00 $ 1,825.00 $ 15.00
1 RAD3162-MEM MEM: 16M SIM RAD302-PCI $ 55.00 $ 55.00 -
1 RAD302-BAT ACC:CACHE MEM BKUP BATT $ 240.00 $ 240.00 -
Check Image - Reject/Re-Entry Workstation
1 D8120-AV SYS:VE17 BASE BOX $ 455.00 $ 455.00 $ 15.00
1 D8470-AV KEYBD:KERMIT LOW COST KYBD $ 30.00 $ 30.00 -
1 D8901-A DISPLAY: 17"MONITOR $ 306.00 $ 306.00 $ 5.00
1 D8736-AV PROC:C466 MHZ CPU $ 169.00 $ 169.00 -
1 D6502-AV MEM:64MB SDRAM NON-ECC $ 130.00 $ 130.00 -
1 D8745-AV DISK:6.4GB HDD $ 170.00 $ 170.00 $ 6.00
1 D8472-EAV O/S: WIN98 FOR VEI 7/8 $ 10.00 $ 10.00 -
1 D7880-AV ACC:UNISYS DT KIT $ 1.00 $ 1.00 -
1 D8479-AV KISK:32X IDE CDROM $ 70.00 $ 70.00 $ 4.00
1 D8478-AV LAN HW:3COM LAN CARD $ 50.00 $ 50.00 -
1 D7576717-AV CIP Reject/Reentry Workstation Label - - -
1 D7577004-AV Desktop Load - Combo $ 28.00 $ 28.00 -
1 S4507-A ACC:VECTRA Basic Integration Service $ 79.00 $ 79.00 -
1 D8720-AV O/S: Win98 RECOVERY CD $ 1.00 $ 1.00 -
Printer Equipment
5 EFP9847 V&R Receipt W/Journal - Serial $ 3,875.00 $ 3,875.00 $ 72.00
5 B25-LX PWR CORD: LINE CORD $ 5.00 $ 5.00 -
5 FP10-XP2 10' Dos Cable - 9 Pin to 9 Pin $ 225.00 $ 225.00 -
1 UDS9908-110 UDS9608 8ppm laser printer $ 499.00 $ 499.00 $ 10.00
1 UDS9700-8MB UDS9700 8MB MEMORY $ 99.00 $ 99.00 -
1 EFP9800-SW1 EFP Software Upgrade $ 40.00 $ 40.00 -
1 UDS9718-110 18PPM PRT (110v) $ 1,499.00 $ 1,499.00 -
2 90-9718-025 18ppm Network Rdy (110V) $ 3,698.00 $ 3,698.00 $ 17.00
1 UDS9700-DUP UDS9700 DUPLEX OPTION $ 399.00 $ 399.00 -
3 UDS9700-8MB UDS9700 8MB MEMORY $ 297.00 $ 297.00 -
1 UDS9700-SD5 UDS9700 500 SHT DRAWER $ 349.00 $ 349.00 -
1 90-3034-106 34ppm Printer (110v) $ 2,899.00 $ 2,899.00 $ 30.00
1 UDS9700-2KD UDS9700 2000 SHT DRAWER $ 1,179.00 $ 1,179.00 -
1 UDS9700-16M UDS9700 16MB MEMORY $ 149.00 $ 149.00 -
DEPCON Software
1 DPC300-DPT FILE MGT: DEPARTMENT SVR (DEPCON) $ 2,420.00 $ 2,420.00 $ 17.00
1 DPC300-AFK DEPARTMENTAL ADV FUNCTION KEYS $ 825.00 $ 825.00 $ 6.00
============= ==========================
Appendix A1 Total: $83,358.40 $83,358.40 $ 801.00
============= ==========================
ITI Discount $ 4,167.00 $ 4,167.00
============= ==========================
Appendix A1 Grand Total: $79,191.40 $79,191.40 $ 801.00
</TABLE>
Page 3
<TABLE>
<CAPTION>
Appendix A1A-Document Processing Hardware
Smith River Community Bank, 730 East Church St., Martinsville, VA 24112
Exhibit 10.2(Continued)
<S> <C>
Component Qty Style Number Description List % Disc Selling Monthly
Price Surety
Document Processing
1 DP250-SNT SYS:STD HEIGHT NT $ 23,141.00 $ 23,141.00 $ 140.00
1 DP510-MPR PRINTER MASTER $ 1,570.00 $ 1,570.00 $ 7.00
1 DP205-RMJ ENDORSER:REAR 250 MJE $ 2,790.00 $ 2,790.00 $ 15.00
1 DP506-NSO ENDORSER:NO STAMP OPTION $ 1.00 $ 1.00 -
1 DP503-EME ENCODER E138 MICR $ 1,915.00 $ 1,915.00 $ 9.00
1 DP212-SHP STACKER:12POCKETS, STD HT $ 4,458.00 $ 4,458.00 $ 45.00
1 DP500-IQM DOC SW:IMG QUALITY MONTR $ 995.00 $ 995.00 -
2 DP530-CCI ACC:CCITT COMPRESSION $ 9,990.00 $ 9,990.00 $ 92.00
2 DP528-CLR ACC:CLEAR FILTER $ 990.00 $ 990.00 -
1 DP215-SIQ SYS:STD HGT NT IMG MOD $ 7,563.00 $ 7,563.00 $ 13.00
1 DP250-INT DOC SW:IMAGE NT SYS S/W $ 6,000.00 $ 6,000.00 $ 23.00
1 DP529-CFR CAMERA:FRONT REAR $ 13,540.00 $ 13,540.00 $ 174.00
1 DP552-ENI READER:E138.NO CODLINE $ 3,495.00 $ 3,495.00 $ 31.00
1 DP575-NT4 SYS:NDP575 NT TRACK PC $ 2,100.00 $ 2,100.00 $ 43.00
1 NTW40-P DOC SW:NT WS TRACK PC - - $ 2.00
1 KB100-100 KEYBD:UNIVERSAL F $ 345.00 $ 345.00 -
1 CBL100-DP1 CABLE:KEYBOARD $ 50.00 $ 50.00 -
1 DP590-ITI ACC:ITI INTEGRATION STYL
============= ===========================
Appendix A1 Total: $ 78,943.00 $ 78,943.00 $ 594.00
ITI Discount $ 10,500.00 $ 10,500.00
============= ===========================
Appendix A1 Grand total: $ 68,443.00 $ 68,443.00 $ 594.00
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Appendix A2 - Enable
Smith River Community Bank, 730 East Church St., Martinsville, VA 24112
Exhibit 10.2(Continued)
Item Qty Style Description List % Disc Selling Monthly
Price Surety
<S> <C>
BTCO COMPONENTS
Small File Server
1 TWM8505-EXD Tape Drive purchase and install $ 1,995.00 $ 1,995.00 $ 75.00
1 21-2773-931 ARCserveIT 6.61 Workgroup Edition for Windows NT $ 695.00 $ 695.00 $ 7.00
Connect3 Communication Server
1 21-2773-931 ARCservIT 6.61 Workgroup Edition for Windows NT $ 695.00 $ 695.00 $ 7.00
4 65-2315-979 Courier V.Everything Ext 33.6 D/F Modern Pc/MAc $ 1,040.00 $ 1,040.00 -
4 15-1196-102 EF Printer & Modem Cable $ 208.00 $ 208.00 -
1 TWM33038-SVR Connect3 Load Incls Tape Drive And Pcanywhere $ 2,350.00 $ 2,350.00 -
1 TWM22090-DG8 PC/8EM (DB25) digi bd $ 995.00 $ 995.00 -
1 57-8959-900 SURGE, 7 RECEPTACLES, 6FT CORD $ 89.00 $ 89.00 -
4 57-8963-902 SURGE, DIAL UP, 2W, RJ11 $ 128.00 $ 128.00 -
NETWORK OPERATING SYSTEMS
1 TD454504 Micorosoft Sql Svr V7.0 - 5 User $ 1,399.00 $ 1,399.00 -
1 TD454505 Microsoft Sql Svr V7.0 - 10 User $ 1,999.00 $ 1,999.00 -
ETHERNET COMPONENTS
2 86-1730-927 10BASE T Hub 12 Port, North Amer. $ 1,698.00 $ 1,698.00 $ 14.00
1 48-6365-976 BAYSTACK 350-24T SWITCH $ 2,495.00 $ 2,495.00 $ 25.00
1 15-1877-107 10' Serial Cable DB9F to DB9F $ 29.00 $ 29.00 -
INFOAccess COMPONENTS
13 86-1439-875 RJ45 Pvc Patch Cables - Pc to Wall - 10 Ft $ 191.10 $ 191.10 -
13 86-1439-842 RJ45 Pvc Patch Panel Cables - 5 Ft $ 102.96 $ 102.96 -
2 86-1686-400 RJ45 Patch Panel 24 Ports W/110Blocks $ 252.00 $ 252.00 -
2 86-0860-477 19" Equipment Rack - 7 Foot $ 570.00 $ 570.00 -
2 57-8956-906 SURGE, 7 RECEPTACLES, 6 FT CORD $ 118.00 $ 118.00 -
6 85-0197-906 19" Shelf $ 312.00 $ 312.00 -
ANCILLARY COMPONENTS, SUPPLIES
4 81150930 UPS 1000VA W SOFTWARE 8MIN BATT @ $ 2,996.00 $ 2,996.00 -
5 02-0499-935 UP710M & UP715M 4 Year Advanced Extended Warranty $ 875.00 $ 875.00 -
1 81157935 UPS 1500VA W SOFTWARE, 8 MIN BATT @ $ 899.00 $ 899.00 -
1 21-2766-935 InoculateIT v4.53 Workgroup/Advanced Edition, Client
Agents- $ 49.00 $ 49.00 -
2 21-2767-933 InoculateIT v4.53 Workgroup/Advanced Edition, Client
Agent- $ 790.00 $ 790.00 $ 8.00
1 21-2772-933 ARCserveIT 6.61 Advanced Edition for Windows NT $ 1,395.00 $ 1,395.00 $ 14.00
1 TD497268 Microtek Scan Maker X6 $ 149.00 $ 149.00 $ 13.00
1 TD888911 Exb EX17DWK 8900 DW /ext 8MM Autoloader 140/280 $ 5,285.00 $ 5,285.00 $ 77.53
30 TD888675 307265-000 Exabyte 8Mm Tape Media $ 660.00 $ 660.00 -
2 21-2784-938 ARCserveIT Workgroup/Advanced Edition Backup Agent
for Mic $ 1,990.00 $ 1,990.00 -
4 15-1025-665 DB25M/CENT35M ASSY PARALEL 6.6 PVC $ 154.60 $ 154.60 $ 20.00
3 21-2762-934 InoculateIT v4.53 Workgoup Edition for Windows NT $ 1,485.00 $ 1,485.00 -
5 21-2778-930 ARCserveIT Workgoup/Advanced Edition Disaster Recover O $ 2,475.00 $ 2,475.00 $ 15.00
3 15-2061-107 10' Serial Cable DB9F/DB25M - FAX/PcAnywhere $ 99.00 $ 99.00 $ 25.00
1 68-0520-988 Robohelp 7 $ 695.00 $ 695.00 -
1 TD459132 M/S Word 2000 $ 339.00 $ 339.00 -
9 68-3300-982 ITI Connect 16 bit Fourth Edition $ 1,755.00 $ 1,755.00 -
9 68-3321-988 Maintenance for ITI Connect 16 bit Fourth Edition $ 270.00 $ 270.00 -
3 68-3918-981 ITI Connect 32 bit Fourth Edition $ 585.00 $ 585.00 -
3 68-3919-989 Maintenance for ITI Connect 32bit Emerald Edition $ 90.00 $ 90.00 -
1 68-3322-986 Combo Pack 16/32 bit ITI Connect $ 295.00 $ 295.00 -
1 68-3921-985 Maintenance of ITI Combo Pack $ 60.00 $ 60.00 -
1 21-2763-932 InoculateIT v4.53 Advanced Edition ofr Windows NT $ 695.00 $ 695.00 $ 7.00
2 TD888656 Exapak Mammouth Tape Drive ACC Kit 10 Tapes w/Cleaner $ 1,972.00 $ 1,972.00 -
7 TD459129 Office 2000 $ 3,493.00 $ 3,493.00 -
7 TD619925 7' Cable $ 290.00 $ 290.00
1 TD619609 8 Port switch $ 908.00 $ 908.00
STORAGE EQUIPMENT
1 TD091789 TEAC 6X/2 X EXT CDR RTL SGL W/PCI CONTROLLER & SO $ 449.00 $ 449.00 -
1 65-2041-971 Fuijitsu 15 Ppm Scanpartner Color Flatbed $ 1,845.00 $ 1,845.00 $ 22.49
8 TD940707 USRobotics Sportster Ext 33.6 V.34 $ 880.00 $ 880.00 -
</TABLE>
Page 1
<PAGE>
<TABLE>
<CAPTION>
Appendix A2 - Enable
Smith River Community Bank, 730 East Church St., Martinsville, VA 24112
Item Qty Style Description List % Disc Selling Monthly
Price Surety
<S> <C>
2 15-8235-887 SCSI 1 Terminator $ 64.00 $ 64.00 -
2 15-8217-067 SCSI 1 to SCSI 2 6FT Cable $ 178.00 $ 178.00 -
2 TD892589 PcAnywhere 32B V 9.0 $ 430.00 $ 430.00 -
10 64-1429-964 TDK74CDR 74 Min 650 MB Disk $ 49.90 $ 49.90 -
UNISYS CONNECT SERVICES
1 LAN-SRV INSTALLATION SERVICES $ 17,250.00 $ 17,250.00
1 WAN-SRV ENABLE NETWORK DESIGN SERVICES $ 775.00 $ 775.00
1 PRM-WRG Estimated Premise Wiring Charges for Drops $ 2,444.00 $ 2,444.00
1 PRJ-MGT UNISYS GCS PROJECT COORDINATION $ 1,789.00 $ 1,789.00
1 680583986 ITI Image Base HotStage $ 10,615.38 $ 10,615.38
=============== ===========================
Appendix A2 Total: $ 84,878.94 $ 84,878.94 $ 330.02
ITI Discount - - -
=============== ===========================
Appendix A2 Grand Total: $ 84,878.94 $ 167,067.88 $ 578.04
</TABLE>
Page 2
Exhibit 10.2(Continued)
INFORMATION TECHNOLOGY INC.
PRODUCT LICENSE AGREEMENT
Agreement made between Information Technology, Inc. (the "Vendor"), and
the "Customer" identified below.
I. LICENSED PRODUCT
1.1 LICENSE. Vendor grants to Customer and Customer accepts from Vendor a
nonexclusive and nontransferable license to use the products identified in
Appendix A (the "Product") under the terms set forth in this agreement. The
license herein granted shall commence upon the date of delivery of the Product
and shall remain in effect for so long as Vendor's warranties set forth in
Article V remain in effect.
1.2 PROPRIETARY NATURE OF PRODUCT AND TITLE.The Product and any operations
manuals, instructions, and other documents or written materials provided to
Customer as instruction in the use of the Product (the "Documentation") are
acknowledged by Customer to be and contain Vendor's proprietary information and
trade secrets, whether or not any portion thereof is or may be validly
copyrighted or patented, acknowledged to be protected by civil and criminal law,
and acknowledged to be of great value to Vendor. Except as specifically licensed
under this agreement, title and all ownership rights to the Product and the
Documentation remain with Vendor. Customer shall retain or affix such evidences
of ownership and proprietary notices as Vendor may reasonably request. This
paragraph shall survive the term or termination of this agreement.
1.3 USE OF PRODUCT. The Product may be used only for, by and on behalf of
Customer and only in connection with Customer's business operations. This
license is granted only for use at the single location identified in Appendix A,
upon a single computer system (CPU) as identified in Appendix A, and is limited
to processing of not more than the number of accounts (as hereinafter defined)
specified in Appendix A. This license may not be used upon any other computer or
at any other location except as provided under paragraph 1.4. In the event
Customer's usage exceeds the account limitation set forth in Appendix A, a new,
upgraded Product License Agreement shall be required, including the payment of
an additional license fee. For purposes of this Agreement, "accounts" are
defined as the total of all accounts (open or closed) for demand deposit, demand
deposit loan, savings, time savings, IRA, certificate of deposit, and loan
accounts, processed by Customer, for the institutions being serviced with the
Product licensed hereunder.
1.4 BACKUP AND EMERGENCY USE. In the event Customer is unable to use the
Product at the location identified in Appendix A due to an emergency, or to test
emergency procedures, Vendor grants to Customer the right to use the Product at
a location other than the location defined in Appendix A. Any such use shall be
subject to all other restrictions of this agreement and shall continue only so
long as the condition giving rise to such use continues. Prior to commencing
such use, if possible, and in any event within forty-eight (48) hours of such
use, Customer shall give Vendor written notice of the circumstance, location and
the expected length of such use. Failure to give notice shall nullify Customer's
right of emergency use, as herein granted.
1.5 ASSIGNMENT. Customer rights under this agreement and in and to the
Product may not be assigned, licensed, sublicensed, pledged, or otherwise
transferred voluntarily, by operation of law or otherwise without Vendor's prior
written consent, and any such prohibited assignment shall be null and void.
II. CONSIDERATION
2.1 LICENSE FEE. In consideration of the license of the Product granted
under this agreement, Customer shall pay to Vendor the license fee specified in
Appendix A. Such license fee does not include, except as expressly provided in
this agreement or Appendix A hereto, installation or maintenance of the Product,
data base conversion, media, transportation charges, or taxes, all of which
costs and taxes shall be the obligation of Customer.
2.2 MANNER OF PAYMENT. The license fee listed in Appendix A shall be
payable in the following manner: (A)A percentage of the license fee, as
specified in Appendix A, upon execution of this license agreement by Customer.
(B)The balance, including any applicable taxes, upon delivery of the Product by
Vendor to Customer. Invoices respecting the license fee shall be rendered in
accordance with the above payment schedule and are payable to Vendor at Vendor's
address set forth below within ten (10) days of receipt.
2.3 TAXES. In addition to the license fee payable hereunder, Customer
shall pay all taxes (including, without limitation, sales, use, privilege, ad
valorem or excise taxes) and customs duties paid or now or hereafter payable,
however designated, levied or based on amounts payable to Vendor hereunder or on
Customer's use or possession of the Product under this agreement or upon the
presence of the Product at the location identified in Appendix A, but exclusive
of federal, state and local taxes based on Vendor's net income. Customer shall
not deduct from payments to Vendor any amounts paid or payable to third parties
for customs duties or taxes, however designated.
2.4 CURRENCY. The purchase price and any other charges arising under
this agreement shall be invoiced and be payable in U.S. Dollars.
2.5 LATE PAYMENT. Customer shall pay a late payment charge of one and
one-half percent (1 1/2%) per month, or the maximum late payment charge
permitted by applicable law, whichever is less, on any amount payable by
Customer under this Agreement and not paid when due. Said late payment charge
shall be applied for each calendar month (or fraction thereof) that such payment
is not made following its due date.
2.6 SECURITY. Vendor reserves and Customer grants to Vendor a security
interest in the rights of Customer for use of the Product and in the
Documentation as security for the performance by Customer of its obligations
hereunder including, but not limited to, payment of the license fee set forth in
Appendix A. A copy of this agreement may be filed in appropriate filing offices
at any time after signature by Customer as a financing statement or Vendor may
require and Customer shall execute a separate financing statement for purposes
of perfecting Vendor's security interest granted pursuant to the provisions of
this paragraph.
III. DELIVERY, TRAINING AND OPERATION
3.1 DELIVERY. Vendor shall deliver the Product and Customer shall accept
delivery of the Product at Customer's address set forth below. Unless delayed,
as hereinafter provided for, delivery shall be completed within one (1) year of
the date this agreement is accepted by Vendor.
3.2 DELIVERY DELAYS. In the event Customer requests delay of delivery,
Vendor shall not be obligated to effect delivery of the Product except upon
thirty (30) days written notice by Customer to Vendor. If delay in delivery is
due to any cause beyond the control of Vendor, the date upon which delivery is
to be completed shall be extended by the number of days of such delay.
3.3 TRAINING. Classes in the operation of the Product are available at the
offices of Vendor, on a regularly scheduled basis at Vendor's normal rates with
respect thereto. All travel, meal and lodging expenses of Customer in connection
with such training shall be borne by Customer. On-site training or assistance
will be available solely at Vendor's discretion and will be charged to Customer
at Vendor's normal rates together with reasonable expenses for travel, meals,
lodging and local transportation.
Page 1 of 5
<PAGE>
3.4 ASSISTANCE BY CUSTOMER. Customer shall provide reasonable assistance
and cooperation to Vendor in preparation of the Product and the delivery or
installation thereof. Such assistance and cooperation shall include, as
appropriate, reasonable access to Customer's facility and to Customer's records,
as necessary.
3.5 DOCUMENTATION. Operations manuals in respect to the Product will be
delivered to Customer prior to or contemporaneously with the delivery of the
Product.
3.6 RISK OF LOSS. If the Product or the Documentation is lost or damaged,
in whole or in part, during shipment, Vendor will replace said Product or
Documentation at no additional charge to Customer. Upon delivery in good
condition of the Product and the Documentation, Customer shall be responsible
therefor and bear the risk of loss for said Product and Documentation.
3.7 INSTALLATION ASSISTANCE. Vendor may, at its sole discretion, assist
Customer in any required installation of the Product at Vendor's normal charges
for such assistance. Expenses, including but not limited to computer time,
travel, meals, lodging and local transportation incurred in connection
therewith, shall be borne by Customer. In no event shall Vendor be liable to
Customer for loss of profits, consequential, incidental, indirect or special
damages arising from Vendor's efforts to assist in such installation. Vendor
agrees to treat Customer's confidential business with the same security as it
would its own.
3.8 OPERATION. Customer acknowledges and agrees that it is exclusively
responsible for the operation, supervision, management and control of the
Product, including, but not limited to, providing adequate training for its
personnel, instituting appropriate security procedures, and implementing
reasonable procedures to examine and verify all output before use. Vendor shall
have no responsibility or liability for Customer's selection or use of the
Product or any associated equipment.
3.9 CUSTOMER OBLIGATIONS. In order to maintain the continuing integrity
and proper operation of the Product, Customer agrees to implement, in the manner
instructed by Vendor, each error correction and each enhancement and improvement
provided to Customer by Vendor. Customer's failure to do so shall relieve Vendor
of any responsibility or liability whatsoever for any failure or malfunction of
the Product as modified by a subsequent correction or improvement, but in no
such event shall Customer be relieved of the responsibility for payment of fees
and charges otherwise properly invoiced during the term hereof. If requested by
Vendor, Customer agrees to provide written documentation and details to Vendor
to substantiate problems and to assist Vendor in the identification and
detection of problems, errors and malfunctions; and Customer agrees that Vendor
shall have no obligation or liability for said problems until it has received
such documentation and details from Customer.
3.10 SECURITY AND CONFIDENTIALITY. The security and confidentiality of
Customer's data, including the information of its depositors and other customers
contained therein is expressly agreed to be the sole responsibility of Customer.
Customer warrants that it will take all steps reasonably necessary to protect
the confidentiality of such data and to prevent unauthorized disclosure of or
access thereto. Customer hereby releases Vendor from any claim arising from or
in any way related to access to Customer's database using the Software via use
of the Internet or any similar means of electronic communication. Customer
indemnifies and holds Vendor harmless from and against any loss suffered by
Customer and any third party claim arising from any unauthorized access of (i)
Customer's data, or (ii) the information of Customer's account holders or other
customers.
IV. VENDOR'S PROPRIETARY RIGHTS
4.1 NON-DISCLOSURE. Customer shall take all reasonable steps necessary,
including any required by Vendor, to ensure that neither the Product nor the
Documentation, nor any portion thereof, on magnetic tape or disk or in any other
form, is made available or disclosed by Customer or any of its agents or
employees to any other person, firm or corporation. Customer may disclose
relevant aspects of the Product and Documentation to its employees and, with
Vendor's prior written consent, agents to the extent such disclosure is
reasonably necessary to Customer's use of the Product, provided, however,
Customer agrees that it will cause all persons permitted such access to the
Product and the Documentation to observe and perform the foregoing
non-disclosure covenant, and that it will advise Vendor of the procedures
employed for this purpose. Customer shall hold Vendor harmless against any loss,
cost, expense, claim or liability, including reasonable attorney's fees,
resulting from Customer's breach of this non-disclosure obligation. This
paragraph shall survive the term or termination of this agreement.
4.2 COPIES. Customer agrees that while the Product and the Documentation
are in its custody and possession, it will not (a) copy or duplicate or permit
anyone else to copy or duplicate any of the Product, Documentation or
information furnished by Vendor, or (b) create or attempt to create, or permit
others to create or attempt to create, by reverse engineering or otherwise, the
Product, the Documentation or other information made available under this
agreement or otherwise, (whether oral, written, tangible or intangible).
Notwithstanding the foregoing, Customer may make and retain two (2) copies of
the Product, including all enhancements and changes thereto, only for use in
emergencies or to test emergency procedures and may copy for its own use and at
its own expense the Documentation, but shall advise Vendor of the specific item
copied, the number of copies made and their distribution. The original and any
copies in whole or in part of the Product or Documentation which are made
pursuant to this provision shall be the exclusive property of Vendor and shall
be fully subject to the provisions of this agreement. Customer agrees to retain
or place Vendor's proprietary notice on any copies or partial copies made
pursuant to this provision.
4.3 UNAUTHORIZED ACTS. Customer agrees to notify Vendor immediately of the
unauthorized possession, use, or knowledge of the Product, Documentation or any
information made available to Customer pursuant to this agreement, by any person
or organization not authorized by this agreement to have such possession, use or
knowledge. Customer will, thereafter, fully cooperate with Vendor in the
protection and redress of Vendor's proprietary rights. Customer's compliance
with this paragraph shall not, however, be construed in any way as a waiver of
Vendor's rights against Customer for Customer's negligent or intentional harm to
Vendor's proprietary rights, or for breach of Vendor's contractual rights.
4.4 INSPECTION. To assist Vendor in the protection of its proprietary
rights, Customer shall permit representatives of Vendor to inspect the Product
and Documentation and their use, including inspection of any location in which
they are being used or kept at all reasonable times.
4.5 INJUNCTIVE RELIEF. If Customer attempts to use, copy, license,
sublicense, sell or otherwise convey or to disclose the Product or
Documentation, in any manner contrary to the terms of this agreement or in
derogation of Vendor's proprietary rights, whether such rights are explicitly
herein stated, determined by law or otherwise, Vendor shall have, in addition to
any other remedies available to it, the right to injunctive relief enjoining
such actions, Customer hereby acknowledging that other remedies are inadequate.
4.6 VENDOR'S EMPLOYEES. Customer acknowledges the relationship of Vendor
and its employees is of significant value to Vendor and that Vendor's employees
are possessed of specialized training and knowledge regarding Vendor and its
proprietary property, imparted to such employees at significant expense to
Vendor. Accordingly, Customer agrees that during the term hereof and for a
period of eighteen (18) months thereafter, Customer shall not, directly or
indirectly, solicit for employment or employ any person who is or within the
preceding twelve (12) months has been an employee of Vendor. Vendor shall have,
in addition to any other remedies available to it, the right to injunctive
relief enjoining any violations of this paragraph 4.6, Customer hereby
acknowledging that other remedies are inadequate. At Vendor's sole option,
Vender may waive its right to injunctive relief and its right to exercise any
other remedy which might be available to it. In consideration of such waiver,
Customer shall thereupon pay Vendor as liquidated damages a fee equal in amount
to the total compensation paid by Vendor to the former employee for the twelve
(12) months next preceding the date of termination of employment of such
employee by Vendor.
Page 2 of 5
<PAGE>
V. MAINTENANCE, ENHANCEMENTS AND WARRANTIES
5.1 PRODUCT WARRANTY. Vendor warrants that at delivery, the Product will
perform in accordance with the then current Documentation provided Customer, and
further warrants that it has the right to authorize the use of the Product under
this agreement. Vendor's obligation and liability under this paragraph shall,
however, be limited to the replacement and correction of the Product so that it
will so perform, or to obtaining any authorization necessary to make effective
the grant of license to Customer of the use of the Product.
5.2 PATENT INFRINGEMENTS. Vendor shall hold harmless and defend Customer
from any claim or any suit based on any claim that the use of the Product by
Customer under this agreement infringes on any patent, copyright, trademark, or
other proprietary right of any third party, provided that Customer gives Vendor
prompt and written notice of any such claim or suit and permits Vendor to
control the defense thereof.
5.3 WARRANTY DISCLAIMER. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES AND NO OTHER WARRANTY IS EXPRESSED OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
5.4 RENEWAL OF WARRANTIES. Unless sooner terminated pursuant to the
provisions of paragraph 5.6, the warranties granted by paragraphs 5.1 and 5.2
(subject, however, to all limitations and disclaimers contained within this
agreement) and the right to any enhancements or corrections developed by Vendor
under paragraph 5.5, shall be subject to extension for successive one-year
warranty periods commencing on the date of the delivery of the Product. Each one
year extension (the "Warranty Period") shall be deemed to automatically occur
unless notice is given by either Customer or Vendor of an election not to so
extend, such notice to be given on or prior to the sixtieth (60th) day preceding
the Warranty Period. Any such extension shall in no event be effective unless
Customer shall have paid to Vendor on or prior to the beginning of the Warranty
Period its then current annual maintenance fee.
5.5 ENHANCEMENTS AND CHANGES. Vendor shall provide Customer with all
enhancements and changes to the Product designed or developed by Vendor and
released to its other customers during the Warranty Period. Any change or
enhancement to the Product, whether developed or designed by Vendor or by
Customer shall be and remain the property of Vendor, provided, however, that
Customer shall be entitled to a perpetual license without additional license fee
of any enhancements or corrections developed by Customer. Vendor reserves the
right to make changes in operating procedures, program language, file
structures, access techniques, general purpose programs, data storage
requirements, input and output formats, report formats, types of hardware
supported, throughput, and other related programming and documentation
improvements required to maintain the Product current. As part of these
services, Vendor will provide Customer the changes with written instructions
concerning implementation. It is understood and agreed that Vendor provision of
improvements and enhancements under this paragraph does not include providing to
Customer new product which may result from rewriting the Product. Vendor alone
shall determine whether the work product of Vendor constitutes new product as a
result of a complete rewrite (which is not provided to Customer hereunder) or an
improvement or enhancement of the Product (which will be provided to Customer).
5.6 TERMINATION OF WARRANTIES. The warranties expressed in paragraphs 5.1
and 5.2 and Customer's rights under paragraph 5.5 shall immediately terminate if
the Product is revised, changed, enhanced, modified or maintained by any one
other than Vendor without the prior specific direction or written approval of
Vendor.
5.7 LIMITATION OF LIABILITY. Customer expressly agrees that Vendor's
responsibilities in the event of its breach of the warranties contained in
paragraphs 5.1 and 5.2 are as set forth in said paragraphs. Vendor's liability
for damages, including but not limited to liability for patent or copyright
infringement, regardless of the form of action, shall not exceed the license fee
set forth in Appendix A to this agreement and shall arise only if the remedies
provided in paragraphs 5.1 and 5.2 are not fulfilled by Vendor. Customer further
agrees that Vendor will not be liable for any lost profits, or for any claim or
demand against Customer by any other party, except a claim for patent or
copyright infringement as provided herein. IN NO EVENT WILL VENDOR BE LIABLE FOR
CONSEQUENTIAL DAMAGES EVEN IF VENDOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. No action, regardless of form, arising out of this agreement, may be
brought by either party more than one (1) year after the cause of action has
accrued, except that an action for non-payment may be brought within one (1)
year after the date of last payment. No action by Vendor for wrongful disclosure
or use of the Product or Documentation shall be deemed to have accrued until
Vendor receives actual notice of such wrongful disclosure or use. THE CUSTOMER'S
REMEDIES SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE.
5.8 THIRD PARTY SOFTWARE. The Software licensed hereunder may include
software developed and owned by third party licensors. Vendor's sole warranty
with respect to such third party software is that Vendor possesses the legal
right and authority to relicense such third party software to Customer. Specific
warranties regarding performance of such third party software shall be limited
to the warranties, if any, provided by such third party licensors. In exchange
for Customer's agreement not to assert any claim for breach of such third party
licensor's warranties against Vendor, Vendor hereby assigns to Customer such
right, if any, as Vendor may possess to assert a claim for breach of warranty
against the third party licensor.
VI. DEFAULT
6.1 TERMINATION. Vendor may terminate this agreement and the license
granted hereunder in the event of a default by Customer unless Customer shall
have cured the event of default, as hereinafter defined, within twenty (20) days
after notice of such event of default given by Vendor to Customer. This
agreement and the license granted hereunder shall automatically terminate if
Vendor's warranties are not renewed as contemplated in paragraph 5.4 hereof.
Upon any termination of this agreement, Customer shall deliver to Vendor the
Product, the Documentation and all copies thereof and shall also warrant in
writing that all copies have been returned to Vendor or destroyed.
6.2 EVENTS OF DEFAULT. An event of default is defined as any of the
following :
(A) Customer's failure to pay any amounts required to be paid to
Vendor under this agreement on a timely basis;
(B) Any attempt (i) to assign, sell, mortgage, lease, sublease,
license, sublicense or otherwise convey, (ii) to grant any interest in,
right of use of, or access to, or (iii) to otherwise disclose the Product or
the Documentation, except, in any such case, as herein expressly permitted
or as consented to in writing by the Vendor;
(C) Causing or permitting any encumbrance, of any nature whatsoever to
attach to Customer's interest in the Product in favor of any person or
entity other than Vendor;
(D) The entry of any order for relief under any provision of the
federal bankruptcy code in any bankruptcy proceedings initiated by or
against Customer; or
(E) Customer's breach of any of the terms or conditions of this
agreement.
6.3 DAMAGES. Upon the occurrence of an event of default without cure
within the period of time above-provided, all license or other fees payable to
Vendor under this agreement shall without notice or demand by Vendor become
immediately due and payable as liquidated damages. This provision for liquidated
damages shall not be regarded as a waiver by Vendor of any other rights to which
it may be entitled in the event of Customer's default, but rather, such remedy
shall be an addition to any other remedy lawfully available to Vendor.
Page 3 of 5
<PAGE>
VI. GENERAL
7.1 TITLES. Titles and paragraph headings are for reference purposes only
and are not to be considered a part of this agreement.
7.2 FORCE MAJEURE. No party shall be liable for delay in performance
hereunder due to causes beyond its control, including but not limited to acts of
God, fires, strikes, delinquencies of suppliers, acts of war or intervention by
any governmental authority, and each party shall take steps to minimize any such
delay.
7.3 WAIVER. No waiver of any breach of any provision of this agreement
shall constitute a waiver of any prior, concurrent or subsequent breach of the
same or any other provisions hereof and no waiver shall be effective unless made
in writing and signed by an authorized representative of the party to be charged
therewith.
7.4 SEVERABILITY. In the event that any provision of this agreement shall
be illegal or otherwise unenforceable, such provision shall be severed from this
agreement and the entire agreement shall not fail on account thereof, the
balance of the agreement continuing in full force and effect.
7.5 NOTICES. Any notice which either party hereto is required or permitted
to give hereunder shall be addressed to the party to be charged therewith at the
address set forth below and shall be given by certified or registered mail. Any
such notice shall be deemed given on the date of deposit in the mail.
7.6 ENTIRE AGREEMENT. THE PARTIES HERETO ACKNOWLEDGE THAT EACH HAS READ
THIS AGREEMENT. UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS. THE PARTIES
FURTHER AGREE THAT THIS AGREEMENT AND ANY MODIFICATIONS MADE PURSUANT TO IT
CONSTITUTE THE COMPLETE AND EXCLUSIVE WRITTEN EXPRESSION OF THE TERMS OF THE
AGREEMENT BETWEEN THE PARTIES, AND SUPERSEDE ALL PRIOR OR CONTEMPORANEOUS
PROPOSALS, ORAL OR WRITTEN, UNDERSTANDINGS, REPRESENTATIONS, CONDITIONS,
WARRANTIES, COVENANTS. AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT. THE PARTIES FURTHER AGREE THAT THIS
AGREEMENT MAY NOT IN ANY WAY BE EXPLAINED OR SUPPLEMENTED BY A PRIOR OR EXISTING
COURSE OF DEALINGS BETWEEN THE PARTIES, BY ANY USAGE OF TRADE OR CUSTOM, OR BY
ANY PRIOR PERFORMANCE BETWEEN THE PARTIES PURSUANT TO THIS AGREEMENT OR
OTHERWISE. IN THE EVENT CUSTOMER ISSUES A PURCHASE ORDER OR OTHER INSTRUMENT
COVERING THE SERVICES OR DOCUMENTATION HEREIN SPECIFIED, IT IS UNDERSTOOD AND
AGREED THAT SUCH PURCHASE ORDER OR OTHER INSTRUMENT IS FOR CUSTOMER'S INTERNAL
USE AND PURPOSES ONLY AND SHALL IN NO WAY AFFECT ANY OF THE TERMS AND CONDITIONS
OF THIS AGREEMENT.
7.7 GOVERNING LAW. This agreement is accepted in the State of Nebraska,
and shall be enforced in accordance with and governed by the laws of the State
of Nebraska.
7.8 CHOICE OF FORUM. Any action arising out of or related to this
agreement or the transaction herein described, whether at law or in equity,
shall be instituted in and litigated in the state or federal courts of the State
of Nebraska. In accordance herewith, the parties hereto submit to the
jurisdiction of the courts of said state. Any party being not a resident of
Nebraska at the time of suit hereby appoints the Secretary of State of Nebraska
as its agent for receipt of service of process.
7.9 ATTORNEY'S FEES. In the event that any action or proceeding is brought
in connection with this agreement the prevailing party therein shall be entitled
to recover its costs and reasonable attorney's fees.
7.10 COUNTERPARTS/FACSIMILES. This agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature to this
agreement may be transmitted by fax and a facsimile signature received by a
party hereto shall for all purposes be deemed an original signature hereto.
7.11 EFFECTIVE DATE. This agreement shall be effective on the date
accepted and executed by an authorized representative of Vendor.
Page 4 of 5
<PAGE>
CUSTOMER: VENDOR:
SMITH RIVER COMMUNITY BANK INFORMATION TECHNOLOGY, INC.
- -------------------------------
Signature:------------------------ Signature:--------------------------
Name: Name: Michael K. Young
----------------------------- -----------------------------
Title: Title: President
---------------------------- ------------------------------
Address: 730 East Church Street Address: 1345 Old Cheney Road
------------------------- ----------------------------
Martinsville VA 24112 Lincoln, NE 68512
------------------------- ----------------------------
Date: 11/5/99 Date Accepted: November 9, 1999
------------------------- ----------------------
APPENDIX A
DUE UPON EXECUTION: 30% LOCATION WHERE THE PRODUCT(S) WILL BE USED:
--------
COMPUTER SYSTEM (CPU): N/A (A99) Smith River Community Bank
------------ 730 East Church Street
Martinsville, VA 24112
PRODUCT(S) AND LICENSE FEE(S):
<TABLE>
<CAPTION>
<S> <C>
107-400 Premier II Teller Sears (4 @ $1000) $ 4,000
110-002 Director Network Report & Document Archive Module (Includes 5 Named Users) 17,985
112-901 Director Named User Workstation Software (1 @ $595) 595
113-200 Director CD-ROM Interface 495
506-008 Premier II Teller Release Upgrade Utility 3,000
----------------
TOTAL: $ 26,075
</TABLE>
Page 5 of 5
<PAGE>
Exhibit 10.2(Continued)
INFORMATION TECHNOLOGY INC.
SOFTWARE LICENSE AGREEMENT
Agreement made between Information Technology, Inc. (the "Vendor"), and the
"Customer" identified below.
1. LICENSED SOFTWARE
1.1 LICENSE. Vendor grants to Customer and Customer accepts from Vendor a
nonexclusive and nontransferable license to use the software identified in
Appendix A (the "Software") under the terms set forth in this agreement. The
license herein granted shall commence upon the date of delivery of the software
and shall remain in effect for so long as Vendor's warranties set forth in
Article V remain in effect.
1.2 PROPRIETARY NATURE OF SOFTWARE AND TITLE. The Software and any
operations manuals, instructions, and other documents or written materials
provided to Customer as instruction in the use of the Software (the
"Documentation") are acknowledged by Customer to be and contain Vendor's
proprietary information and trade secrets, whether or not any portion thereof is
or may be validly copyrighted or patented, acknowledged to be protected by civil
and criminal law, and acknowledged to be of great value to Vendor. Except as
specifically licensed under this agreement, title and all ownership rights to
the Software and the Documentation remain with Vendor. Customer shall retain or
affix such evidences of ownership and proprietary notices as Vendor may
reasonably request. This paragraph shall survive the term or termination of this
agreement.
1.3 USE OF SOFTWARE. The Software may be used only for, by and on behalf
of Customer and only in connection with Customer's business operations. This
license is granted only for use at the single location identified in Appendix A,
upon a single computer system (CPU) as identified in Appendix A, and is limited
to processing of not more than the number of accounts (as hereinafter defined)
specified in Appendix A. This license may not be used upon any other computer or
at any other location except as provided under paragraph 1.4. In the event
Customer's usage exceeds the account limitation set forth in Appendix A, a new,
upgraded Software License Agreement shall be required, including the payment of
an additional license fee. For purposes of this Agreement, "accounts" are
defined as the total of all accounts (open or closed) for demand deposit, demand
deposit loan, savings, time savings, IRA, certificate of deposit, and loan
accounts, processed by Customer, for the institutions being serviced with the
Software licensed hereunder.
1.4 BACKUP AND EMERGENCY USE. In the event Customer is unable to use the
Software at the location identified in Appendix A due to an emergency, or to
test emergency procedures, Vendor grants to Customer the right to use the
Software at a location other than the location defined in Appendix A. Any such
use shall be subject to all other restrictions of this agreement and shall
continue only so long as the condition giving rise to such use continues. Prior
to commencing such use, if possible, and in any event within forty-eight (48)
hours of such use, Customer shall give Vendor written notice of the
circumstance, location and the expected length of such use. Failure to give
notice shall nullify Customer's right of emergency use, as herein granted.
1.5 ASSIGNMENT. Customer rights under this agreement and in and to the
Software may not be assigned, licensed, sublicensed, pledged, or otherwise
transferred voluntarily, by operation of law or otherwise without Vendor's prior
written consent, and any such prohibited assignment shall be null and void.
II. CONSIDERATION
2.1 LICENSE FEE. In consideration of the license of the Software granted
under this agreement, Customer shall pay to Vendor the license fee specified in
Appendix A. Such license fee does not include, except as expressly provided in
this agreement or Appendix A hereto, installation or maintenance of the
Software, data base conversion, media, transportation charges or taxes, all of
which costs and taxes shall be the obligation of Customer.
2.2 MANNER OF PAYMENT. The license fee listed in Appendix A shall be
payable in the following manner:
(A) A percentage of the license fee, as specified in Appendix A,
upon execution of this license agreement by Customer.
(B) The balance, including any applicable taxes, upon delivery of the
Software by Vendor to Customer.
Invoices respecting the license fee shall be rendered in accordance with the
above payment schedule and are payable to Vendor at Vendor's address set forth
below within ten (10) days of receipt.
2.3 TAXES. In addition to the license fee payable hereunder, Customer
shall pay all taxes (including, without limitation, sales, use, privilege, ad
valorem or excise taxes) and customs duties paid or now or hereafter payable,
however designated, levied or based on amounts payable to Vendor hereunder, on
Customer's use or possession of the Software under this agreement or upon the
presence of the Software at the location identified in Appendix A, but exclusive
of federal, state and local taxes based on Vendor's net income. Customer shall
not deduct from payments to Vendor any amounts paid or payable to third parties
for customs duties or taxes, however designated
2.4 CURRENCY. The purchase price and any other charges arising under this
agreement shall be invoiced and be payable in U.S. Dollars.
2.5 LATE PAYMENT. Customer shall pay a late payment charge of one and
one-half percent (1 1/2%) per month, or the maximum late payment charge
permitted by applicable law, whichever is less, on any amount payable by
Customer under this Agreement and not paid when due. Said late payment charge
shall be applied for each calendar month (or fraction thereof) that such payment
is not made following its due date.
2.6 SECURITY. Vendor reserves and Customer grants to Vendor a security
interest in the rights of Customer for use of the Software and in the
Documentation as security for the performance by Customer of its obligations
hereunder including, but not limited to, payment of the license fee set forth in
Appendix A. A copy of this agreement may be filed in appropriate filing offices
at any time after signature by Customer as a financing statement or Vendor may
require and Customer shall execute a separate financing statement for purposes
of perfecting Vendor's security interest granted pursuant to the provisions of
this paragraph.
III. DELIVERY, TRAINING AND OPERATION
3.1 DELIVERY. Vendor shall deliver the Software and Customer shall accept
delivery of the Software at Customer's address set forth below. Unless delayed,
as hereinafter provided for, delivery shall be completed within one (1) year of
the date this agreement is accepted by Vendor.
3.2 DELIVERY DELAYS. In the event Customer requests delay of delivery,
Vendor shall not be obligated to effect delivery of the Software except upon
thirty (30) days written notice by Customer to Vendor. If delay in delivery is
due to any cause beyond the control of Vendor, the date upon which delivery is
to be completed shall be extended by the number of days of such delay.
Page 1 of 5
<PAGE>
3.3 TRAINING. Classes in the operation of the Software are available at
the offices of Vendor on a regularly scheduled basis. Customer's entitlement, if
any, to such training is as set forth in Appendix A for such additional charges,
if any, as may be set forth therein. Reasonable additional training will be
provided to customer at the offices of Vendor upon Customer's request, at
Vendor's normal rates with respect thereto. All travel, meal and lodging
expenses of Customer in connection with such training shall be borne by
Customer. On-site training or assistance will be available solely at Vendor's
discretion and will be charged to Customer at Vendor's normal rates together
with reasonable expenses for travel, meals, lodging and local transportation.
3.4 ASSISTANCE BY CUSTOMER. Customer shall provide reasonable assistance
and cooperation to Vendor in preparation of the Software and the delivery or
installation thereof. Such assistance and cooperation shall include, as
appropriate, reasonable access to Customer's facility and to Customer's records,
as necessary.
3.5 DOCUMENTATION. Operations manuals in respect to the Software will be
delivered to Customer prior to or contemporaneously with the delivery of the
Software.
3.6 RISK OF LOSS. If the Software or the Documentation is lost or damaged,
in whole or in part, during shipment, Vendor will replace said Software or
Documentation at no additional charge to Customer. Upon delivery in good
condition of the Software and the Documentation, Customer shall be responsible
therefor and bear the risk of loss for said Software and Documentation.
3.7 CONVERSION ASSISTANCE. Vendor may, at its sole discretion, assist
Customer in the conversion of Customer's files from a computer processor or
in-house computer system at Vendor's normal charges for such assistance.
Expenses, including but not limited to computer time, travel, meals, lodging and
local transportation incurred connection therewith, shall be borne by Customer.
In no event shall Vendor be liable to Customer for loss of profits,
consequential, incidental, indirect or special damages arising from Vendor's
efforts to assist in the conversion of Customer's files. Vendor agrees to treat
Customer's confidential business with the same security as it would its own.
3.8 OPERATION. Customer acknowledges and agrees that it is exclusively
responsible for the operation, supervision, management and control of the
Software, including, but not limited to, providing adequate training for its
personnel, instituting appropriate security procedures, and implementing
reasonable procedures to examine and verify all output before use. Vendor shall
have no responsibility or liability for Customer's selection or use of the
Software or any associated equipment.
3.9 CUSTOMER OBLIGATIONS. In order to maintain the continuing integrity
and proper operation of the Software, Customer agrees to implement, in the
manner instructed by Vendor, each error correction and each enhancement and
improvement provided to Customer by Vendor. Customer's failure to do so shall
relieve Vendor of any responsibility or liability whatsoever for any failure or
malfunction of the software as modified by a subsequent correction or
improvement, but in no such event shall Customer be relieved of the
responsibility for payment of fees and charges otherwise properly invoiced
during the term hereof. If requested by Vendor, Customer agrees to provide
written documentation and details to Vendor to substantiate problems and to
assist Vendor in the identification and detection of problems, errors and
malfunctions: and Customer agrees that Vendor shall have no obligation or
liability for said problems untilithas received such documentation and details
from Customer.
3.10 SECURITY AND CONFIDENTIALITY The security and confidentiality of
Customer's data, including the information of its depositors and other customers
contained therein is expressly agreed to be the sole responsibility of Customer.
Customer warrants thatitwill take all steps reasonably necessary to protect the
confidentiality of such data and to prevent unauthorized disclosure of or access
thereto. Customer hereby releases Vendor from any claim arising from or in any
way related to access to Customer's database using the Software via use of the
Internet or any similar means of electronic communication. Customer indemnifies
and holds Vendor harmless from and against any loss suffered by Customer and any
third party claim arising from any unauthorized access of (i) Customer's data,
or (ii) the information of Customer's account holders or other customers.
IV. VENDOR'S PROPRIETARY RIGHTS
4.1 NON-DISCLOSURE. Customer shall take all reasonable steps necessary,
including any required by Vendor, to ensure that neither the Software nor the
Documentation, nor any portion thereof, on magnetic tape or disk or in any other
form, is made available or disclosed by Customer or any of its agents or
employees to any other person, firm or corporation. Customer may disclose
relevant aspects of the Software and Documentation to its employees and, with
Vendor's prior written consent, agents to the extent such disclosure is
reasonably necessary to Customer's use of the Software, provided, however,
Customer agrees that R will cause all persons permitted such access to the
Software and the Documentation to observe and perform the foregoing
nondisclosure covenant, and that it will advise Vendor of the procedures
employed for this purpose. Customer shall hold Vendor harmless against any loss,
cost, expense, claim or liability, including reasonable attorneys fees,
resulting from Customer's breach of this non-disclosure obligation. This
paragraph shall survive the term or termination of this agreement.
4.2 COPIES. Customer agrees that while the Software and the Documentation
are in its custody and possession, it will not (a) copy or duplicate or permit
anyone else to copy or duplicate any of the Software, Documentation or
information furnished by Vendor, or (b) create or attempt to create, or permit
others to create or attempt to create, by reverse engineering or otherwise, the
source programs or any part thereof from the object program for the Software,
the Documentation or other information made available under this agreement or
otherwise, (whether oral, written, tangible or intangible). Notwithstanding the
foregoing. Customer may make and retain two (2) copies of the Software,
including all enhancements and changes thereto, only for use in emergencies or
to test emergency procedures and may copy for its own use and at its own expense
the Documentation, but shall advise Vendor of the specific item copied, the
number of copies made and their distribution. The original and any copies in
whole or in part of the Software or Documentation which are made pursuant to
this provision shall be the exclusive property of Vendor and shall be fully
subject to the provisions of this agreement Customer agrees to retain or place
Vendor's proprietary notice on any copies or partial copies made pursuant to
this provision.
4.3 UNAUTHORIZED ACTS. Customer agrees to notify Vendor immediately of the
unauthorized possession, use, or knowledge of the Software, Documentation or any
information made available to Customer pursuant to this agreement, by any person
or organization not authorized by this agreement to have such possession, use or
knowledge. Customer will, thereafter, fully cooperate with Vendor in the
protection and redress of Vendor's proprietary rights. Customer's compliance
with this paragraph shall not, however, be construed in any way as a waiver of
Vendor's rights against Customer for Customer's negligent or intentional harm to
Vendor's proprietary rights, or for breach of Vendor's contractual rights.
4.4 INSPECTION. To assist Vendor in the protection of its proprietary
rights, Customer shall permit representatives of Vendor to inspect the Software
and Documentation and their use, including inspection of any location in which
they are being used or kept at all reasonable times.
Page 2 of 5
<PAGE>
4.5 INJUNCTIVE RELIEF. If Customer attempts to use, copy, license,
sublicense, sell or otherwise convey or to disclose the Software or
Documentation, in any manner contrary to the terms of this agreement or in
derogation of Vendor's proprietary rights, whether such rights are explicitly
herein stated, determined by law or otherwise, Vendor shall have, in addition to
any other remedies available to it, the right to injunctive relief enjoining
such actions, Customer hereby acknowledging that other remedies are inadequate.
4.6 ACCESS TO SOURCE CODE. Vendor has deposited the Software in source code
form and Documentation sufficient to facilitate maintenance, modification or
correction of the Software with the custodial agent named in Appendix A. Vendor
reserves the right to change said custodial agent at any time with written
notification to Customer within sixty (60) days of said change. If Vendor, its
successors or assigns shall cease to conduct business for any period in excess
of thirty (30) days, Customer shall have the right to obtain, for its own and
sole use only, a single copy of the then current version of the source code form
of the Software supplied under this agreement, and a single copy of the
Documentation associated therewith, upon payment to the person in control of the
said source code form of the Software of the reasonable cost of making each
copy. The source code form of the Software supplied to Customer under this
paragraph shall be subject to each and every restriction on use set forth in
this agreement. Customer acknowledges that the source code form of the Software
and the associated Documentation are extraordinarily valuable proprietary
property of Vendor and will be guarded against unauthorized use or disclosure
with great care.
4.7 VENDOR'S EMPLOYEES. Customer acknowledges the relationship of Vendor and
its employees is of significant value to Vendor and that Vendor's employees are
possessed of specialized training and knowledge regarding Vendor and its
proprietary property, imparted to such employees at significant expense to
Vendor. Accordingly, Customer agrees that during the term hereof and for a
period of eighteen (18) months thereafter, Customer shall not, directly or
indirectly, solicit for employment or employ any person who is or within the
preceding twelve (12) months has been an employee of Vendor. Vendor shall have,
in addition to any other remedies available to it, the right to injunctive
relief enjoining any violations of this paragraph 4.7, Customer hereby
acknowledging that other remedies are inadequate. At Vendor's sole option,
Vendor may waive its right to injunctive relief and its right to exercise any
other remedy which might be available to it. In consideration of such waiver,
Customer shall thereupon pay Vendor as liquidated damages a fee equal in amount
to the total compensation paid by Vendor to the former employee for the twelve
(1 2) months next preceding the date of termination of employment of such
employee by Vendor.
V. MAINTENANCE, ENHANCEMENTS AND WARRANTIES
5.1 SOFTWARE WARRANTY. Vendor warrants that during the first twelve (12)
months following delivery of the Software (the "Warranty Period"), the Software
will perform in accordance with the then current Documentation provided
Customer, and further warrants that it has the right to authorize the use of the
Software under this agreement. Vendor's obligation and liability under this
paragraph shall, however, be limited to the replacement and correction of the
Software so that it will so perform, or to obtaining any authorization necessary
to make effective the grant of license to Customer of the use of the Software.
5.2 PATENT INFRINGEMENTS. Vendor shall hold harmless and defend Customer
from any claim or any suit based on any claim that the use of the Software by
Customer under this agreement infringes on any patent, copyright, trademark, or
other proprietary right of any third party, provided that Customer gives Vendor
prompt and written notice of any such claim or suit and permits Vendor to
control the defense thereof.
5.3 WARRANTY DISCLAIMER. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES AND NO OTHER WARRANTY IS EXPRESSED OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
5.4 RENEWAL OF WARRANTIES. Unless sooner terminated pursuant to the
provisions of paragraph 5.6, the warranties granted by paragraphs 5.1 and 5.2
(subject, however, to all limitations and disclaimers contained within this
agreement) and the right to any enhancements or corrections developed by Vendor
under paragraph 5.5, shall be subject to extension for successive one-year
warranty periods commencing on the first anniversary date of the delivery of the
Software for four (4) successive years. Such extension shall be deemed to
automatically occur unless notice is given by either Customer or Vendor of an
election not to so extend, such notice to be given on or prior to the sixtieth
(60th) day preceding the anniversary date of delivery. Any such extension shall
in no event be effective unless Customer shall have paid to Vendor on or prior
to the anniversary date of delivery an annual maintenance fee set forth in
Appendix A. Extension of Vendor's warranties beyond the fifth (5th) anniversary
shall be governed by Vendor's maintenance extension agreement.
5.5 ENHANCEMENTS AND CHANGES. Vendor shall provide Customer with all
enhancements and changes to the Software designed or developed by Vendor and
released to its other customers during the Warranty Period. Any change or
enhancement to the Software, whether developed or designed by Vendor or by
Customer shall be and remain the property of Vendor, provided, however, that
Customer shall be entitled to a perpetual license without additional license fee
of any enhancements or corrections developed by Customer. Vendor reserves the
right to make changes in operating procedures, program language, file
structures, access techniques, general purpose programs, data storage
requirements, input and output formats, report formats, types of hardware
supported, throughput, and other related programming and documentation
improvements required to maintain the Software current. As part of these
services, Vendor will provide Customer the changes with written instructions
concerning implementation. It is understood and agreed that Vendor provision of
improvements and enhancements under this paragraph does not include providing to
Customer a new set of software which may result from rewriting the Software.
Vendor alone shall determine whether the work product of Vendor constitutes new
software as a result of a complete rewrite (which is not provided to Customer
hereunder) or an improvement or enhancement of the Software (which will be
provided to Customer).
5.6 TERMINATION OF WARRANTIES. The warranties expressed in paragraphs 5.1
and 5.2 and Customer's rights under paragraph 5.5 shall immediately terminate if
the Software is revised, changed, enhanced, modified or maintained by any one
other than Vendor without the prior specific direction or written approval of
Vendor.
5.7 LIMITATION OF LIABILITY. Customer expressly agrees that Vendor's
responsibilities in the event of its breach of the warranties contained in
paragraphs 5.1 and 5.2 are as set forth in said paragraphs. Vendor's liability
for damages, including but not limited to liability for patent or copyright
infringement, regardless of the form of action, shall not exceed the license fee
set forth in Appendix A to this agreement and shall arise only if the remedies
provided in paragraphs 5.1 and 5.2 are not fulfilled by Vendor. Customer further
agrees that Vendor will not be liable for any lost profits, or for any claim or
demand against Customer by any other party, except a claim for patent or
copyright infringement as provided herein. IN NO EVENT WILL VENDOR BE LIABLE FOR
CONSEQUENTIAL DAMAGES EVEN IF VENDOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. No action, regardless of form, arising out of this agreement, may be
brought by either party more than one (1) year after the cause of action has
accrued, except that an action for non-payment may be brought within one (1)
year after the date of last payment. No action by Vendor for wrongful disclosure
or use of the Software or Documentation shall be deemed to have accrued until
Vendor receives actual notice of such wrongful disclosure or use.
Page 3 of 5
<PAGE>
THE CUSTOMER'S REMEDIES SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE.
5.8 THIRD PARTY SOFTWARE. The Software licensed hereunder may include software
developed and owned by third party licensors, Vendor's sole warranty with
respect to such third party software is that Vendor possesses the legal right
and authority to relicense such third party software to Customer. Specific
warranties regarding performance of such third party software shall be limited
to the warranties, if any, provided by such third party licensors. In exchange
for Customer's agreement not to assert any claim for breach of such third party
licensor's warranties against Vendor, Vendor hereby assigns to Customer such
right, if any, as Vendor may possess to assert a claim for breach of warranty
against the third party licensor.
VI. DEFAULT
6.1 TERMINATION. Vendor may terminate this agreement and the license granted
hereunder in the event of a default by Customer unless Customer shall have cured
the event of default, as hereinafter defined, within twenty (20) days after
notice of such event of default given by Vendor to Customer. This agreement and
the license granted hereunder shall automatically terminate if Vendor's
warranties are not renewed as contemplated in paragraph 5.4 hereof. Upon any
termination of this agreement, Customer shall deliver to Vendor the Software,
the Documentation and all copies thereof and shall also warrant in writing that
all copies have been returned to Vendor or destroyed.
6.2 EVENTS OF DEFAULT. An event of default is defined as any of the
following:
(A) Customer's failure to pay any amounts required to be paid to Vendor
under this agreement on a timely basis;
(B) Any attempt (i) to assign, sell, mortgage, lease, sublease, license,
sublicense or otherwise convey, (ii) to grant any interest in, right of use
of, or access to, or (iii) to otherwise disclose the Software or the
Documentation, except, in any such case, as herein expressly permitted or as
consented to in writing by the Vendor;
(C) Causing or permitting any encumbrance, of any nature whatsoever to
attach to Customer's interest in the Software in favor of any person or
entity other than Vendor;
(D) The entry of any order for relief under any provision of the federal
bankruptcy code in any bankruptcy proceedings initiated by or against
Customer; or
(E) Customer's breach of any of the terms or conditions of this
agreement.
6.3 DAMAGES. Upon the occurrence of an event of default without cure within
the period of time above-provided, all license or other fees payable to Vendor
under this agreement shall without notice or demand by Vendor become immediately
due and payable as liquidated damages, This provision for liquidated damages
shall not be regarded as a waiver by Vendor of any other rights to which it may
be entitled in the event of Customer's default, but rather, such remedy shall be
an addition to any other remedy lawfully available to Vendor.
VI. GENERAL
7.1 TITLES. Titles and paragraph headings are for reference purposes only
and are not to be considered a part of this agreement,
7.2 FORCE MAJEURE. No party shall be liable for delay in performance
hereunder due to causes beyond its control, including but not limited to acts of
God, fires, strikes, delinquencies of suppliers, acts of war or intervention by
any governmental authority, and each party shall take steps to minimize any such
delay.
7.3 WAIVER. No waiver of any breach of any provision of this agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of the same or
any other provisions hereof and no waiver shall be effective unless made in
writing and signed by an authorized representative of the party to be charged
therewith.
7.4 SEVERABILITY. In the event that any Provision of this agreement shall be
illegal or otherwise unenforceable, such provision shall be severed from this
agreement and the entire agreement shall not fail on account thereof, the
balance of the agreement continuing in full force and effect.
7.5 NOTICES. Any notice which either party hereto is required or permitted
to give hereunder shall be addressed to the party to be charged therewith at the
address set forth below and shall be given by certified or registered mail. Any
such notice shall be deemed given on the date of deposit in the mail.
7.6 ENTIRE AGREEMENT. THE PARTIES HERETO ACKNOWLEDGE THAT EACH HAS READ THIS
AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS. THE PARTIES
FURTHER AGREE THAT THIS AGREEMENT AND ANY MODIFICATIONS MADE PURSUANT TO IT
CONSTITUTE THE COMPLETE AND EXCLUSIVE WRITTEN EXPRESSION OF THE TERMS OF THE
AGREEMENT BETWEEN THE PARTIES, AND SUPERSEDE ALL PRIOR OR CONTEMPORANEOUS
PROPOSALS, ORAL OR WRITTEN, UNDERSTANDINGS, REPRESENTATIONS, CONDITIONS,
WARRANTIES, COVENANTS, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT. THE PARTIES FURTHER AGREE THAT THIS
AGREEMENT MAY NOT IN ANY WAY BE EXPLAINED OR SUPPLEMENTED BY A PRIOR OR EXISTING
COURSE OF DEALINGS BETWEEN THE PARTIES. BY ANY USAGE OF TRADE OR CUSTOM, OR BY
ANY PRIOR PERFORMANCE BETWEEN THE PARTIES PURSUANT TO THIS AGREEMENT OR
OTHERWISE. IN THE EVENT CUSTOMER ISSUES A PURCHASE ORDER OR OTHER INSTRUMENT
COVERING THE SOFTWARE HEREIN SPECIFIED, IT IS UNDERSTOOD AND AGREED THAT SUCH
PURCHASE ORDER OR OTHER INSTRUMENT IS FOR CUSTOMER'S INTERNAL USE AND PURPOSES
ONLY AND SHALL IN NO WAY AFFECT ANY OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT.
7.7 GOVERNING LAW. This agreement is accepted in the State of Nebraska,
and shall be enforced in accordance with and governed by the laws of the State
of Nebraska
7.8 CHOICE OF FORUM. Any action arising out of or related to this agreement
or the transaction herein described, whether at law or in equity, shall be
instituted in and litigated in the state or federal courts of the State of
Nebraska. In accordance herewith, the parties hereto submit to the jurisdiction
of the courts of said state. Any party being not a resident of Nebraska at the
time of suit hereby appoints the Secretary of State of Nebraska as its agent for
receipt of service of process.
7.9 ATTORNEY'S FEES. In the event that any action or proceeding is brought
in connection with this agreement the prevailing party therein shall be entitled
to recover its costs and reasonable attorneys fees.
7.10 COUNTERPARTS/FACSIMILES. This agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature to this
agreement may be transmitted by fax and a facsimile signature received by a
party hereto shall for all purposes be deemed an original signature hereto.
7.11 EFFECTIVE DATE. This agreement shall be effective on the date accepted
and executed by an authorized representative of Vendor.
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<PAGE>
CUSTOMER: VENDOR:
SMITH RIVER COMMUNITY BANK INFORMATION TECHNOLOGY, INC.
- -----------------------------------
<TABLE>
<CAPTION>
<S> <C>
Signature: Signature:
----------------------------------------- -------------------------------------
Name: Name: Michael K. Young
----------------------------------------------- ------------------------------------------
Title: Title: President
------------------------------------------- -----------------------------------------
Address: 730 East Church Street Address: 1345 Old Cheney Road
------------------------------------------- ----------------------------------------
Martinsville VA 24112 Lincoln, NE 68512
------------------------------------------- ----------------------------------------
Date: 11/5/99 Date Accepted: November 9, 1999
------------------------------------------- ---------------------------------
</TABLE>
APPENDIX A
<TABLE>
<CAPTION>
<S> <C>
DUE UPON EXECUTION: 100% CUSTODIAL AGENT:
------------------------
COMPUTER SYSTEM (CPU): N/A (A99) West Gate Bank, 1204 West 0 Street, Lincoln, NE 68528
--------------------
LOCATION WHERE THE SOFTWARE PRODUCT(S) WILL BE USED:
CUSTOMER'S ENTITLEMENT TO TRAINING:
Customer is entitled to 0 days training for 0 Smith River Community Bank
--------- ---------
person(s) at $ 0 730 East Church Street
----------
Martinsville, VA 24112
ANNUAL MAINTENANCE FEE:
Twenty percent ( 20 %) of license fee exclusive of any discounts.
---------------- ----------
SOFTWARE PRODUCT(S) AND LICENSE FEE(S):
370-202 Connect3 Comm Server (Per Server) $ 1,466
--------------
TOTAL: $ 1,466
</TABLE>
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<PAGE>
Exhibit 10.2 (Continued)
INFORMATION TECHNOLOGY INC.
SOFTWARE LICENSE AGREEMENT
Agreement made between Information Technology, Inc. (the "Vendor"), and the
"Customer" identified below.
1. LICENSED SOFTWARE
1.1 LICENSE. Vendor grants to Customer and Customer accepts from Vendor a
nonexclusive and nontransferable license to use the software identified in
Appendix A (the "Software") under the terms set forth in this agreement. The
license herein granted shall commence upon the date of delivery of the software
and shall remain in effect for so long as Vendor's warranties set forth in
Article V remain in effect.
1.2 PROPRIETARY NATURE OF SOFTWARE AND TITLE. The Software and any
operations manuals, instructions, and other documents or written materials
provided to Customer as instruction in the use of the Software (the
"Documentation") are acknowledged by Customer to be and contain Vendor's
proprietary information and trade secrets, whether or not any portion thereof is
or may be validly copyrighted or patented, acknowledged to be protected by civil
and criminal law, and acknowledged to be of great value to Vendor. Except as
specifically licensed under this agreement, title and all ownership rights to
the Software and the Documentation remain with Vendor. Customer shall retain or
affix such evidences of ownership and proprietary notices as Vendor may
reasonably request. This paragraph shall survive the term or termination of this
agreement.
1.3 USE OF SOFTWARE. The Software may be used only for, by and on behalf
of Customer and only in connection with Customer's business operations. This
license is granted only for use at the single location identified in Appendix A,
upon a single computer system (CPU) as identified in Appendix A, and is limited
to processing of not more than the number of accounts (as hereinafter defined)
specified in Appendix A. This license may not be used upon any other computer or
at any other location except as provided under paragraph 1.4. In the event
Customer's usage exceeds the account limitation set forth in Appendix A, a new,
upgraded Software License Agreement shall be required, including the payment of
an additional license fee. For purposes of this Agreement, "accounts" are
defined as the total of all accounts (open or closed) for demand deposit, demand
deposit loan, savings, time savings, IRA, certificate of deposit, and loan
accounts, processed by Customer, for the institutions being serviced with the
Software licensed hereunder.
1.4 BACKUP AND EMERGENCY USE. In the event Customer is unable to use the
Software at the location identified in Appendix A due to an emergency, or to
test emergency procedures, Vendor grants to Customer the right to use the
Software at a location other than the location defined in Appendix A. Any such
use shall be subject to all other restrictions of this agreement and shall
continue only so long as the condition giving rise to such use continues. Prior
to commencing such use, if possible, and in any event within forty-eight (48)
hours of such use, Customer shall give Vendor written notice of the
circumstance, location and the expected length of such use. Failure to give
notice shall nullify Customer's right of emergency use, as herein granted.
1.5 ASSIGNMENT. Customer rights under this agreement and in and to the
Software may not be assigned, licensed, sublicensed, pledged, or otherwise
transferred voluntarily, by operation of law or otherwise without Vendor's prior
written consent, and any such prohibited assignment shall be null and void.
II. CONSIDERATION
2.1 LICENSE FEE. In consideration of the license of the Software granted
under this agreement, Customer shall pay to Vendor the license fee specified in
Appendix A. Such license fee does not include, except as expressly provided in
this agreement or Appendix A hereto, installation or maintenance of the
Software, data base conversion, media, transportation charges or taxes, all of
which costs and taxes shall be the obligation of Customer.
2.2 MANNER OF PAYMENT. The license fee listed in Appendix A shall be
payable in the following manner:
(A) A percentage of the license fee, as specified in Appendix A,
upon execution of this license agreement by Customer.
(B) The balance, including any applicable taxes, upon delivery of the
Software by Vendor to Customer.
Invoices respecting the license fee shall be rendered in accordance with the
above payment schedule and are payable to Vendor at Vendor's address set forth
below within ten (10) days of receipt.
2.3 TAXES. In addition to the license fee payable hereunder, Customer
shall pay all taxes (including, without limitation, sales, use, privilege, ad
valorem or excise taxes) and customs duties paid or now or hereafter payable,
however designated, levied or based on amounts payable to Vendor hereunder, on
Customer's use or possession of the Software under this agreement or upon the
presence of the Software at the location identified in Appendix A, but exclusive
of federal, state and local taxes based on Vendor's net income. Customer shall
not deduct from payments to Vendor any amounts paid or payable to third parties
for customs duties or taxes, however designated
2.4 CURRENCY. The purchase price and any other charges arising under this
agreement shall be invoiced and be payable in U.S. Dollars.
2.5 LATE PAYMENT. Customer shall pay a late payment charge of one and
one-half percent (1 1/2%) per month, or the maximum late payment charge
permitted by applicable law, whichever is less, on any amount payable by
Customer under this Agreement and not paid when due. Said late payment charge
shall be applied for each calendar month (or fraction thereof) that such payment
is not made following its due date.
2.6 SECURITY. Vendor reserves and Customer grants to Vendor a security
interest in the rights of Customer for use of the Software and in the
Documentation as security for the performance by Customer of its obligations
hereunder including, but not limited to, payment of the license fee set forth in
Appendix A. A copy of this agreement may be filed in appropriate filing offices
at any time after signature by Customer as a financing statement or Vendor may
require and Customer shall execute a separate financing statement for purposes
of perfecting Vendor's security interest granted pursuant to the provisions of
this paragraph.
III. DELIVERY, TRAINING AND OPERATION
3.1 DELIVERY. Vendor shall deliver the Software and Customer shall accept
delivery of the Software at Customer's address set forth below. Unless delayed,
as hereinafter provided for, delivery shall be completed within one (1) year of
the date this agreement is accepted by Vendor.
3.2 DELIVERY DELAYS. In the event Customer requests delay of delivery,
Vendor shall not be obligated to effect delivery of the Software except upon
thirty (30) days written notice by Customer to Vendor. If delay in delivery is
due to any cause beyond the control of Vendor, the date upon which delivery is
to be completed shall be extended by the number of days of such delay.
Page 1 of 5
<PAGE>
3.3 TRAINING. Classes in the operation of the Software are available at
the offices of Vendor on a regularly scheduled basis. Customer's entitlement, if
any, to such training is as set forth in Appendix A for such additional charges,
if any, as may be set forth therein. Reasonable additional training will be
provided to customer at the offices of Vendor upon Customer's request, at
Vendor's normal rates with respect thereto. All travel, meal and lodging
expenses of Customer in connection with such training shall be borne by
Customer. On-site training or assistance will be available solely at Vendor's
discretion and will be charged to Customer at Vendor's normal rates together
with reasonable expenses for travel, meals, lodging and local transportation.
3.4 ASSISTANCE BY CUSTOMER. Customer shall provide reasonable assistance
and cooperation to Vendor in preparation of the Software and the delivery or
installation thereof. Such assistance and cooperation shall include, as
appropriate, reasonable access to Customer's facility and to Customer's records,
as necessary.
3.5 DOCUMENTATION. Operations manuals in respect to the Software will be
delivered to Customer prior to or contemporaneously with the delivery of the
Software.
3.6 RISK OF LOSS. If the Software or the Documentation is lost or damaged,
in whole or in part, during shipment, Vendor will replace said Software or
Documentation at no additional charge to Customer. Upon delivery in good
condition of the Software and the Documentation, Customer shall be responsible
therefor and bear the risk of loss for said Software and Documentation.
3.7 CONVERSION ASSISTANCE. Vendor may, at its sole discretion, assist
Customer in the conversion of Customer's files from a computer processor or
in-house computer system at Vendor's normal charges for such assistance.
Expenses, including but not limited to computer time, travel, meals, lodging and
local transportation incurred connection therewith, shall be borne by Customer.
In no event shall Vendor be liable to Customer for loss of profits,
consequential, incidental, indirect or special damages arising from Vendor's
efforts to assist in the conversion of Customer's files. Vendor agrees to treat
Customer's confidential business with the same security as it would its own.
3.8 OPERATION. Customer acknowledges and agrees that it is exclusively
responsible for the operation, supervision, management and control of the
Software, including, but not limited to, providing adequate training for its
personnel, instituting appropriate security procedures, and implementing
reasonable procedures to examine and verify all output before use. Vendor shall
have no responsibility or liability for Customer's selection or use of the
Software or any associated equipment.
3.9 CUSTOMER OBLIGATIONS. In order to maintain the continuing integrity
and proper operation of the Software, Customer agrees to implement, in the
manner instructed by Vendor, each error correction and each enhancement and
improvement provided to Customer by Vendor. Customer's failure to do so shall
relieve Vendor of any responsibility or liability whatsoever for any failure or
malfunction of the software as modified by a subsequent correction or
improvement, but in no such event shall Customer be relieved of the
responsibility for payment of fees and charges otherwise properly invoiced
during the term hereof. If requested by Vendor, Customer agrees to provide
written documentation and details to Vendor to substantiate problems and to
assist Vendor in the identification and detection of problems, errors and
malfunctions: and Customer agrees that Vendor shall have no obligation or
liability for said problems untilithas received such documentation and details
from Customer.
3.10 SECURITY AND CONFIDENTIALITY The security and confidentiality of
Customer's data, including the information of its depositors and other customers
contained therein is expressly agreed to be the sole responsibility of Customer.
Customer warrants thatitwill take all steps reasonably necessary to protect the
confidentiality of such data and to prevent unauthorized disclosure of or access
thereto. Customer hereby releases Vendor from any claim arising from or in any
way related to access to Customer's database using the Software via use of the
Internet or any similar means of electronic communication. Customer indemnifies
and holds Vendor harmless from and against any loss suffered by Customer and any
third party claim arising from any unauthorized access of (i) Customer's data,
or (ii) the information of Customer's account holders or other customers.
IV. VENDOR'S PROPRIETARY RIGHTS
4.1 NON-DISCLOSURE. Customer shall take all reasonable steps necessary,
including any required by Vendor, to ensure that neither the Software nor the
Documentation, nor any portion thereof, on magnetic tape or disk or in any other
form, is made available or disclosed by Customer or any of its agents or
employees to any other person, firm or corporation. Customer may disclose
relevant aspects of the Software and Documentation to its employees and, with
Vendor's prior written consent, agents to the extent such disclosure is
reasonably necessary to Customer's use of the Software, provided, however,
Customer agrees that R will cause all persons permitted such access to the
Software and the Documentation to observe and perform the foregoing
nondisclosure covenant, and that it will advise Vendor of the procedures
employed for this purpose. Customer shall hold Vendor harmless against any loss,
cost, expense, claim or liability, including reasonable attorneys fees,
resulting from Customer's breach of this non-disclosure obligation. This
paragraph shall survive the term or termination of this agreement.
4.2 COPIES. Customer agrees that while the Software and the Documentation
are in its custody and possession, it will not (a) copy or duplicate or permit
anyone else to copy or duplicate any of the Software, Documentation or
information furnished by Vendor, or (b) create or attempt to create, or permit
others to create or attempt to create, by reverse engineering or otherwise, the
source programs or any part thereof from the object program for the Software,
the Documentation or other information made available under this agreement or
otherwise, (whether oral, written, tangible or intangible). Notwithstanding the
foregoing. Customer may make and retain two (2) copies of the Software,
including all enhancements and changes thereto, only for use in emergencies or
to test emergency procedures and may copy for its own use and at its own expense
the Documentation, but shall advise Vendor of the specific item copied, the
number of copies made and their distribution. The original and any copies in
whole or in part of the Software or Documentation which are made pursuant to
this provision shall be the exclusive property of Vendor and shall be fully
subject to the provisions of this agreement Customer agrees to retain or place
Vendor's proprietary notice on any copies or partial copies made pursuant to
this provision.
4.3 UNAUTHORIZED ACTS. Customer agrees to notify Vendor immediately of the
unauthorized possession, use, or knowledge of the Software, Documentation or any
information made available to Customer pursuant to this agreement, by any person
or organization not authorized by this agreement to have such possession, use or
knowledge. Customer will, thereafter, fully cooperate with Vendor in the
protection and redress of Vendor's proprietary rights. Customer's compliance
with this paragraph shall not, however, be construed in any way as a waiver of
Vendor's rights against Customer for Customer's negligent or intentional harm to
Vendor's proprietary rights, or for breach of Vendor's contractual rights.
4.4 INSPECTION. To assist Vendor in the protection of its proprietary
rights, Customer shall permit representatives of Vendor to inspect the Software
and Documentation and their use, including inspection of any location in which
they are being used or kept at all reasonable times.
Page 2 of 5
<PAGE>
4.5 INJUNCTIVE RELIEF. If Customer attempts to use, copy, license,
sublicense, sell or otherwise convey or to disclose the Software or
Documentation, in any manner contrary to the terms of this agreement or in
derogation of Vendor's proprietary rights, whether such rights are explicitly
herein stated, determined by law or otherwise, Vendor shall have, in addition to
any other remedies available to it, the right to injunctive relief enjoining
such actions, Customer hereby acknowledging that other remedies are inadequate.
4.6 ACCESS TO SOURCE CODE. Vendor has deposited the Software in source
code form and Documentation sufficient to facilitate maintenance, modification
or correction of the Software with the custodial agent named in Appendix A.
Vendor reserves the right to change said custodial agent at any time with
written notification to Customer within sixty (60) days of said change. If
Vendor, its successors or assigns shall cease to conduct business for any period
in excess of thirty (30) days, Customer shall have the right to obtain, for its
own and sole use only, a single copy of the then current version of the source
code form of the Software supplied under this agreement, and a single copy of
the Documentation associated therewith, upon payment to the person in control of
the said source code form of the Software of the reasonable cost of making each
copy. The source code form of the Software supplied to Customer under this
paragraph shall be subject to each and every restriction on use set forth in
this agreement. Customer acknowledges that the source code form of the Software
and the associated Documentation are extraordinarily valuable proprietary
property of Vendor and will be guarded against unauthorized use or disclosure
with great care.
4.7 VENDOR'S EMPLOYEES. Customer acknowledges the relationship of Vendor
and its employees is of significant value to Vendor and that Vendor's employees
are possessed of specialized training and knowledge regarding Vendor and its
proprietary property, imparted to such employees at significant expense to
Vendor. Accordingly, Customer agrees that during the term hereof and for a
period of eighteen (18) months thereafter, Customer shall not, directly or
indirectly, solicit for employment or employ any person who is or within the
preceding twelve (12) months has been an employee of Vendor. Vendor shall have,
in addition to any other remedies available to it, the right to injunctive
relief enjoining any violations of this paragraph 4.7, Customer hereby
acknowledging that other remedies are inadequate. At Vendor's sole option,
Vendor may waive its right to injunctive relief and its right to exercise any
other remedy which might be available to it. In consideration of such waiver,
Customer shall thereupon pay Vendor as liquidated damages a fee equal in amount
to the total compensation paid by Vendor to the former employee for the twelve
(1 2) months next preceding the date of termination of employment of such
employee by Vendor.
V. MAINTENANCE, ENHANCEMENTS AND WARRANTIES
5.1 SOFTWARE WARRANTY. Vendor warrants that during the first twelve (12)
months following delivery of the Software (the "Warranty Period"), the Software
will perform in accordance with the then current Documentation provided
Customer, and further warrants that it has the right to authorize the use of the
Software under this agreement. Vendor's obligation and liability under this
paragraph shall, however, be limited to the replacement and correction of the
Software so that it will so perform, or to obtaining any authorization necessary
to make effective the grant of license to Customer of the use of the Software.
5.2 PATENT INFRINGEMENTS. Vendor shall hold harmless and defend Customer
from any claim or any suit based on any claim that the use of the Software by
Customer under this agreement infringes on any patent, copyright, trademark, or
other proprietary right of any third party, provided that Customer gives Vendor
prompt and written notice of any such claim or suit and permits Vendor to
control the defense thereof.
5.3 WARRANTY DISCLAIMER. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES AND NO OTHER WARRANTY IS EXPRESSED OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
5.4 RENEWAL OF WARRANTIES. Unless sooner terminated pursuant to the
provisions of paragraph 5.6, the warranties granted by paragraphs 5.1 and 5.2
(subject, however, to all limitations and disclaimers contained within this
agreement) and the right to any enhancements or corrections developed by Vendor
under paragraph 5.5, shall be subject to extension for successive one-year
warranty periods commencing on the first anniversary date of the delivery of the
Software for four (4) successive years. Such extension shall be deemed to
automatically occur unless notice is given by either Customer or Vendor of an
election not to so extend, such notice to be given on or prior to the sixtieth
(60th) day preceding the anniversary date of delivery. Any such extension shall
in no event be effective unless Customer shall have paid to Vendor on or prior
to the anniversary date of delivery an annual maintenance fee set forth in
Appendix A. Extension of Vendor's warranties beyond the fifth (5th) anniversary
shall be governed by Vendor's maintenance extension agreement.
5.5 ENHANCEMENTS AND CHANGES. Vendor shall provide Customer with all
enhancements and changes to the Software designed or developed by Vendor and
released to its other customers during the Warranty Period. Any change or
enhancement to the Software, whether developed or designed by Vendor or by
Customer shall be and remain the property of Vendor, provided, however, that
Customer shall be entitled to a perpetual license without additional license fee
of any enhancements or corrections developed by Customer. Vendor reserves the
right to make changes in operating procedures, program language, file
structures, access techniques, general purpose programs, data storage
requirements, input and output formats, report formats, types of hardware
supported, throughput, and other related programming and documentation
improvements required to maintain the Software current. As part of these
services, Vendor will provide Customer the changes with written instructions
concerning implementation. It is understood and agreed that Vendor provision of
improvements and enhancements under this paragraph does not include providing to
Customer a new set of software which may result from rewriting the Software.
Vendor alone shall determine whether the work product of Vendor constitutes new
software as a result of a complete rewrite (which is not provided to Customer
hereunder) or an improvement or enhancement of the Software (which will be
provided to Customer).
5.6 TERMINATION OF WARRANTIES. The warranties expressed in paragraphs 5.1
and 5.2 and Customer's rights under paragraph 5.5 shall immediately terminate if
the Software is revised, changed, enhanced, modified or maintained by any one
other than Vendor without the prior specific direction or written approval of
Vendor.
5.7 LIMITATION OF LIABILITY. Customer expressly agrees that Vendor's
responsibilities in the event of its breach of the warranties contained in
paragraphs 5.1 and 5.2 are as set forth in said paragraphs. Vendor's liability
for damages, including but not limited to liability for patent or copyright
infringement, regardless of the form of action, shall not exceed the license fee
set forth in Appendix A to this agreement and shall arise only if the remedies
provided in paragraphs 5.1 and 5.2 are not fulfilled by Vendor. Customer further
agrees that Vendor will not be liable for any lost profits, or for any claim or
demand against Customer by any other party, except a claim for patent or
copyright infringement as provided herein. IN NO EVENT WILL VENDOR BE LIABLE FOR
CONSEQUENTIAL DAMAGES EVEN IF VENDOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. No action, regardless of form, arising out of this agreement, may be
brought by either party more than one (1) year after the cause of action has
accrued, except that an action for non-payment may be brought within one (1)
year after the date of last payment. No action by Vendor for wrongful disclosure
or use of the Software or Documentation shall be deemed to have accrued until
Vendor receives actual notice of such wrongful disclosure or use.
Page 3 of 5
<PAGE>
THE CUSTOMER'S REMEDIES SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE.
5.8 THIRD PARTY SOFTWARE. The Software licensed hereunder may include
software developed and owned by third party licensors, Vendor's sole warranty
with respect to such third party software is that Vendor possesses the legal
right and authority to relicense such third party software to Customer. Specific
warranties regarding performance of such third party software shall be limited
to the warranties, if any, provided by such third party licensors. In exchange
for Customer's agreement not to assert any claim for breach of such third party
licensor's warranties against Vendor, Vendor hereby assigns to Customer such
right, if any, as Vendor may possess to assert a claim for breach of warranty
against the third party licensor.
VI. DEFAULT
6.1 TERMINATION. Vendor may terminate this agreement and the license
granted hereunder in the event of a default by Customer unless Customer shall
have cured the event of default, as hereinafter defined, within twenty (20) days
after notice of such event of default given by Vendor to Customer. This
agreement and the license granted hereunder shall automatically terminate if
Vendor's warranties are not renewed as contemplated in paragraph 5.4 hereof.
Upon any termination of this agreement, Customer shall deliver to Vendor the
Software, the Documentation and all copies thereof and shall also warrant in
writing that all copies have been returned to Vendor or destroyed.
6.2 EVENTS OF DEFAULT. An event of default is defined as any of the
following:
(A) Customer's failure to pay any amounts required to be paid to Vendor
under this agreement on a timely basis;
(B) Any attempt (i) to assign, sell, mortgage, lease, sublease, license,
sublicense or otherwise convey, (ii) to grant any interest in, right of use
of, or access to, or (iii) to otherwise disclose the Software or the
Documentation, except, in any such case, as herein expressly permitted or as
consented to in writing by the Vendor;
(C) Causing or permitting any encumbrance, of any nature whatsoever to
attach to Customer's interest in the Software in favor of any person or
entity other than Vendor;
(D) The entry of any order for relief under any provision of the federal
bankruptcy code in any bankruptcy proceedings initiated by or against
Customer; or
(E) Customer's breach of any of the terms or conditions of this
agreement.
6.3 DAMAGES. Upon the occurrence of an event of default without cure
within the period of time above-provided, all license or other fees payable to
Vendor under this agreement shall without notice or demand by Vendor become
immediately due and payable as liquidated damages, This provision for liquidated
damages shall not be regarded as a waiver by Vendor of any other rights to which
it may be entitled in the event of Customer's default, but rather, such remedy
shall be an addition to any other remedy lawfully available to Vendor.
VI. GENERAL
7.1 TITLES. Titles and paragraph headings are for reference purposes only
and are not to be considered a part of this agreement,
7.2 FORCE MAJEURE. No party shall be liable for delay in performance
hereunder due to causes beyond its control, including but not limited to acts of
God, fires, strikes, delinquencies of suppliers, acts of war or intervention by
any governmental authority, and each party shall take steps to minimize any such
delay.
7.3 WAIVER. No waiver of any breach of any provision of this agreement
shall constitute a waiver of any prior, concurrent or subsequent breach of the
same or any other provisions hereof and no waiver shall be effective unless made
in writing and signed by an authorized representative of the party to be charged
therewith.
7.4 SEVERABILITY. In the event that any Provision of this agreement shall
be illegal or otherwise unenforceable, such provision shall be severed from this
agreement and the entire agreement shall not fail on account thereof, the
balance of the agreement continuing in full force and effect.
7.5 NOTICES. Any notice which either party hereto is required or permitted
to give hereunder shall be addressed to the party to be charged therewith at the
address set forth below and shall be given by certified or registered mail. Any
such notice shall be deemed given on the date of deposit in the mail.
7.6 ENTIRE AGREEMENT. THE PARTIES HERETO ACKNOWLEDGE THAT EACH HAS READ
THIS AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS. THE PARTIES
FURTHER AGREE THAT THIS AGREEMENT AND ANY MODIFICATIONS MADE PURSUANT TO IT
CONSTITUTE THE COMPLETE AND EXCLUSIVE WRITTEN EXPRESSION OF THE TERMS OF THE
AGREEMENT BETWEEN THE PARTIES, AND SUPERSEDE ALL PRIOR OR CONTEMPORANEOUS
PROPOSALS, ORAL OR WRITTEN, UNDERSTANDINGS, REPRESENTATIONS, CONDITIONS,
WARRANTIES, COVENANTS, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT. THE PARTIES FURTHER AGREE THAT THIS
AGREEMENT MAY NOT IN ANY WAY BE EXPLAINED OR SUPPLEMENTED BY A PRIOR OR EXISTING
COURSE OF DEALINGS BETWEEN THE PARTIES. BY ANY USAGE OF TRADE OR CUSTOM, OR BY
ANY PRIOR PERFORMANCE BETWEEN THE PARTIES PURSUANT TO THIS AGREEMENT OR
OTHERWISE. IN THE EVENT CUSTOMER ISSUES A PURCHASE ORDER OR OTHER INSTRUMENT
COVERING THE SOFTWARE HEREIN SPECIFIED, IT IS UNDERSTOOD AND AGREED THAT SUCH
PURCHASE ORDER OR OTHER INSTRUMENT IS FOR CUSTOMER'S INTERNAL USE AND PURPOSES
ONLY AND SHALL IN NO WAY AFFECT ANY OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT.
7.7 GOVERNING LAW. This agreement is accepted in the State of Nebraska,
and shall be enforced in accordance with and governed by the laws of the State
of Nebraska
7.8 CHOICE OF FORUM. Any action arising out of or related to this
agreement or the transaction herein described, whether at law or in equity,
shall be instituted in and litigated in the state or federal courts of the State
of Nebraska. In accordance herewith, the parties hereto submit to the
jurisdiction of the courts of said state. Any party being not a resident of
Nebraska at the time of suit hereby appoints the Secretary of State of Nebraska
as its agent for receipt of service of process.
7.9 ATTORNEY'S FEES. In the event that any action or proceeding is brought
in connection with this agreement the prevailing party therein shall be entitled
to recover its costs and reasonable attorneys fees.
7.10 COUNTERPARTS/FACSIMILES. This agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature to this
agreement may be transmitted by fax and a facsimile signature received by a
party hereto shall for all purposes be deemed an original signature hereto.
7.11 EFFECTIVE DATE. This agreement shall be effective on the date
accepted and executed by an authorized representative of Vendor.
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
CUSTOMER: VENDOR:
SMITH RIVER COMMUNITY BANK INFORMATION TECHNOLOGY, INC.
- ---------------------------------
Signature: Signature:
---------------------------------- ---------------------------------------
Name: Name: Michael K. Young
--------------------------------------- ---------------------------------------------
Title: Title: President
----------------------------------- --------------------------------------------
Address: 730 East Church Street Address: 1345 Old Cheney Road
---------------------------------- ------------------------------------------
Martinsville VA 24112 Lincoln, NE 68512
---------------------------------- ------------------------------------------
Date: 11/5/99 Date Accepted: November 9, 1999
---------------------------------- ------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
APPENDIX A
DUE UPON EXECUTION: 30% CUSTODIAL AGENT:
------------------------
COMPUTER SYSTEM (CPU): NDP250 (A99) West Gate Bank, 1204 West 0 Street, Lincoln, NE 68528
--------------------
LOCATION WHERE THE SOFTWARE PRODUCT(S) WILL BE USED:
CUSTOMER'S ENTITLEMENT TO TRAINING:
Customer is entitled to 0 days training for 0 Smith River Community Bank
--------- ---------
person(s) at $ 0 730 East Church Street
----------
Martinsville, VA 24112
ANNUAL MAINTENANCE FEE:
Twenty percent (20%) of license fee exclusive of any discounts.
------------- ----------
SOFTWARE PRODUCT(S) AND LICENSE FEE(S):
106-912 NDP250 MICR/Image Capture $ 24,437
---------------
TOTAL: $ 24,437
</TABLE>
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<PAGE>
Exhibit 10.2(Continued)
INFORMATION TECHNOLOGY INC.
SOFTWARE LICENSE AGREEMENT
Agreement made between Information Technology, Inc. (the "Vendor"), and the
"Customer" identified below.
1. LICENSED SOFTWARE
1.1 LICENSE. Vendor grants to Customer and Customer accepts from Vendor a
nonexclusive and nontransferable license to use the software identified in
Appendix A (the "Software") under the terms set forth in this agreement. The
license herein granted shall commence upon the date of delivery of the software
and shall remain in effect for so long as Vendor's warranties set forth in
Article V remain in effect.
1.2 PROPRIETARY NATURE OF SOFTWARE AND TITLE. The Software and any
operations manuals, instructions, and other documents or written materials
provided to Customer as instruction in the use of the Software (the
"Documentation") are acknowledged by Customer to be and contain Vendor's
proprietary information and trade secrets, whether or not any portion thereof is
or may be validly copyrighted or patented, acknowledged to be protected by civil
and criminal law, and acknowledged to be of great value to Vendor. Except as
specifically licensed under this agreement, title and all ownership rights to
the Software and the Documentation remain with Vendor. Customer shall retain or
affix such evidences of ownership and proprietary notices as Vendor may
reasonably request. This paragraph shall survive the term or termination of this
agreement.
1.3 USE OF SOFTWARE. The Software may be used only for, by and on behalf of
Customer and only in connection with Customer's business operations. This
license is granted only for use at the single location identified in Appendix A,
upon a single computer system (CPU) as identified in Appendix A, and is limited
to processing of not more than the number of accounts (as hereinafter defined)
specified in Appendix A. This license may not be used upon any other computer or
at any other location except as provided under paragraph 1.4. In the event
Customer's usage exceeds the account limitation set forth in Appendix A, a new,
upgraded Software License Agreement shall be required, including the payment of
an additional license fee. For purposes of this Agreement, "accounts" are
defined as the total of all accounts (open or closed) for demand deposit, demand
deposit loan, savings, time savings, IRA, certificate of deposit, and loan
accounts, processed by Customer, for the institutions being serviced with the
Software licensed hereunder.
1.4 BACKUP AND EMERGENCY USE. In the event Customer is unable to use the
Software at the location identified in Appendix A due to an emergency, or to
test emergency procedures, Vendor grants to Customer the right to use the
Software at a location other than the location defined in Appendix A. Any such
use shall be subject to all other restrictions of this agreement and shall
continue only so long as the condition giving rise to such use continues. Prior
to commencing such use, if possible, and in any event within forty-eight (48)
hours of such use, Customer shall give Vendor written notice of the
circumstance, location and the expected length of such use. Failure to give
notice shall nullify Customer's right of emergency use, as herein granted.
1.5 ASSIGNMENT. Customer rights under this agreement and in and to the
Software may not be assigned, licensed, sublicensed, pledged, or otherwise
transferred voluntarily, by operation of law or otherwise without Vendor's prior
written consent, and any such prohibited assignment shall be null and void.
II. CONSIDERATION
2.1 LICENSE FEE. In consideration of the license of the Software granted
under this agreement, Customer shall pay to Vendor the license fee specified in
Appendix A. Such license fee does not include, except as expressly provided in
this agreement or Appendix A hereto, installation or maintenance of the
Software, data base conversion, media, transportation charges or taxes, all of
which costs and taxes shall be the obligation of Customer.
2.2 MANNER OF PAYMENT. The license fee listed in Appendix A shall be payable
in the following manner:
(A) A percentage of the license fee, as specified in Appendix A,
upon execution of this license agreement by Customer.
(B) The balance, including any applicable taxes, upon delivery of the
Software by Vendor to Customer.
Invoices respecting the license fee shall be rendered in accordance with the
above payment schedule and are payable to Vendor at Vendor's address set forth
below within ten (10) days of receipt.
2.3 TAXES. In addition to the license fee payable hereunder, Customer shall
pay all taxes (including, without limitation, sales, use, privilege, ad valorem
or excise taxes) and customs duties paid or now or hereafter payable, however
designated, levied or based on amounts payable to Vendor hereunder, on
Customer's use or possession of the Software under this agreement or upon the
presence of the Software at the location identified in Appendix A, but exclusive
of federal, state and local taxes based on Vendor's net income. Customer shall
not deduct from payments to Vendor any amounts paid or payable to third parties
for customs duties or taxes, however designated
2.4 CURRENCY. The purchase price and any other charges arising under this
agreement shall be invoiced and be payable in U.S. Dollars.
2.5 LATE PAYMENT. Customer shall pay a late payment charge of one and
one-half percent (1 1/2%) per month, or the maximum late payment charge
permitted by applicable law, whichever is less, on any amount payable by
Customer under this Agreement and not paid when due. Said late payment charge
shall be applied for each calendar month (or fraction thereof) that such payment
is not made following its due date.
2.6 SECURITY. Vendor reserves and Customer grants to Vendor a security
interest in the rights of Customer for use of the Software and in the
Documentation as security for the performance by Customer of its obligations
hereunder including, but not limited to, payment of the license fee set forth in
Appendix A. A copy of this agreement may be filed in appropriate filing offices
at any time after signature by Customer as a financing statement or Vendor may
require and Customer shall execute a separate financing statement for purposes
of perfecting Vendor's security interest granted pursuant to the provisions of
this paragraph.
III. DELIVERY, TRAINING AND OPERATION
3.1 DELIVERY. Vendor shall deliver the Software and Customer shall accept
delivery of the Software at Customer's address set forth below. Unless delayed,
as hereinafter provided for, delivery shall be completed within one (1) year of
the date this agreement is accepted by Vendor.
3.2 DELIVERY DELAYS. In the event Customer requests delay of delivery,
Vendor shall not be obligated to effect delivery of the Software except upon
thirty (30) days written notice by Customer to Vendor. If delay in delivery is
due to any cause beyond the control of Vendor, the date upon which delivery is
to be completed shall be extended by the number of days of such delay.
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<PAGE>
3.3 TRAINING. Classes in the operation of the Software are available at the
offices of Vendor on a regularly scheduled basis. Customer's entitlement, if
any, to such training is as set forth in Appendix A for such additional charges,
if any, as may be set forth therein. Reasonable additional training will be
provided to customer at the offices of Vendor upon Customer's request, at
Vendor's normal rates with respect thereto. All travel, meal and lodging
expenses of Customer in connection with such training shall be borne by
Customer. On-site training or assistance will be available solely at Vendor's
discretion and will be charged to Customer at Vendor's normal rates together
with reasonable expenses for travel, meals, lodging and local transportation.
3.4 ASSISTANCE BY CUSTOMER. Customer shall provide reasonable assistance and
cooperation to Vendor in preparation of the Software and the delivery or
installation thereof. Such assistance and cooperation shall include, as
appropriate, reasonable access to Customer's facility and to Customer's records,
as necessary.
3.5 DOCUMENTATION. Operations manuals in respect to the Software will be
delivered to Customer prior to or contemporaneously with the delivery of the
Software.
3.6 RISK OF LOSS. If the Software or the Documentation is lost or damaged,
in whole or in part, during shipment, Vendor will replace said Software or
Documentation at no additional charge to Customer. Upon delivery in good
condition of the Software and the Documentation, Customer shall be responsible
therefor and bear the risk of loss for said Software and Documentation.
3.7 CONVERSION ASSISTANCE. Vendor may, at its sole discretion, assist
Customer in the conversion of Customer's files from a computer processor or
in-house computer system at Vendor's normal charges for such assistance.
Expenses, including but not limited to computer time, travel, meals, lodging and
local transportation incurred connection therewith, shall be borne by Customer.
In no event shall Vendor be liable to Customer for loss of profits,
consequential, incidental, indirect or special damages arising from Vendor's
efforts to assist in the conversion of Customer's files. Vendor agrees to treat
Customer's confidential business with the same security as it would its own.
3.8 OPERATION. Customer acknowledges and agrees that it is exclusively
responsible for the operation, supervision, management and control of the
Software, including, but not limited to, providing adequate training for its
personnel, instituting appropriate security procedures, and implementing
reasonable procedures to examine and verify all output before use. Vendor shall
have no responsibility or liability for Customer's selection or use of the
Software or any associated equipment.
3.9 CUSTOMER OBLIGATIONS. In order to maintain the continuing integrity and
proper operation of the Software, Customer agrees to implement, in the manner
instructed by Vendor, each error correction and each enhancement and improvement
provided to Customer by Vendor. Customer's failure to do so shall relieve Vendor
of any responsibility or liability whatsoever for any failure or malfunction of
the software as modified by a subsequent correction or improvement, but in no
such event shall Customer be relieved of the responsibility for payment of fees
and charges otherwise properly invoiced during the term hereof. If requested by
Vendor, Customer agrees to provide written documentation and details to Vendor
to substantiate problems and to assist Vendor in the identification and
detection of problems, errors and malfunctions: and Customer agrees that Vendor
shall have no obligation or liability for said problems untilithas received such
documentation and details from Customer.
3.10 SECURITY AND CONFIDENTIALITY The security and confidentiality of
Customer's data, including the information of its depositors and other customers
contained therein is expressly agreed to be the sole responsibility of Customer.
Customer warrants thatitwill take all steps reasonably necessary to protect the
confidentiality of such data and to prevent unauthorized disclosure of or access
thereto. Customer hereby releases Vendor from any claim arising from or in any
way related to access to Customer's database using the Software via use of the
Internet or any similar means of electronic communication. Customer indemnifies
and holds Vendor harmless from and against any loss suffered by Customer and any
third party claim arising from any unauthorized access of (i) Customer's data,
or (ii) the information of Customer's account holders or other customers.
IV. VENDOR'S PROPRIETARY RIGHTS
4.1 NON-DISCLOSURE. Customer shall take all reasonable steps necessary,
including any required by Vendor, to ensure that neither the Software nor the
Documentation, nor any portion thereof, on magnetic tape or disk or in any other
form, is made available or disclosed by Customer or any of its agents or
employees to any other person, firm or corporation. Customer may disclose
relevant aspects of the Software and Documentation to its employees and, with
Vendor's prior written consent, agents to the extent such disclosure is
reasonably necessary to Customer's use of the Software, provided, however,
Customer agrees that R will cause all persons permitted such access to the
Software and the Documentation to observe and perform the foregoing
nondisclosure covenant, and that it will advise Vendor of the procedures
employed for this purpose. Customer shall hold Vendor harmless against any loss,
cost, expense, claim or liability, including reasonable attorneys fees,
resulting from Customer's breach of this non-disclosure obligation. This
paragraph shall survive the term or termination of this agreement.
4.2 COPIES. Customer agrees that while the Software and the Documentation
are in its custody and possession, it will not (a) copy or duplicate or permit
anyone else to copy or duplicate any of the Software, Documentation or
information furnished by Vendor, or (b) create or attempt to create, or permit
others to create or attempt to create, by reverse engineering or otherwise, the
source programs or any part thereof from the object program for the Software,
the Documentation or other information made available under this agreement or
otherwise, (whether oral, written, tangible or intangible). Notwithstanding the
foregoing. Customer may make and retain two (2) copies of the Software,
including all enhancements and changes thereto, only for use in emergencies or
to test emergency procedures and may copy for its own use and at its own expense
the Documentation, but shall advise Vendor of the specific item copied, the
number of copies made and their distribution. The original and any copies in
whole or in part of the Software or Documentation which are made pursuant to
this provision shall be the exclusive property of Vendor and shall be fully
subject to the provisions of this agreement Customer agrees to retain or place
Vendor's proprietary notice on any copies or partial copies made pursuant to
this provision.
4.3 UNAUTHORIZED ACTS. Customer agrees to notify Vendor immediately of the
unauthorized possession, use, or knowledge of the Software, Documentation or any
information made available to Customer pursuant to this agreement, by any person
or organization not authorized by this agreement to have such possession, use or
knowledge. Customer will, thereafter, fully cooperate with Vendor in the
protection and redress of Vendor's proprietary rights. Customer's compliance
with this paragraph shall not, however, be construed in any way as a waiver of
Vendor's rights against Customer for Customer's negligent or intentional harm to
Vendor's proprietary rights, or for breach of Vendor's contractual rights.
4.4 INSPECTION. To assist Vendor in the protection of its proprietary
rights, Customer shall permit representatives of Vendor to inspect the Software
and Documentation and their use, including inspection of any location in which
they are being used or kept at all reasonable times.
Page 2 of 5
<PAGE>
4.5 INJUNCTIVE RELIEF. If Customer attempts to use, copy, license,
sublicense, sell or otherwise convey or to disclose the Software or
Documentation, in any manner contrary to the terms of this agreement or in
derogation of Vendor's proprietary rights, whether such rights are explicitly
herein stated, determined by law or otherwise, Vendor shall have, in addition to
any other remedies available to it, the right to injunctive relief enjoining
such actions, Customer hereby acknowledging that other remedies are inadequate.
4.6 ACCESS TO SOURCE CODE. Vendor has deposited the Software in source code
form and Documentation sufficient to facilitate maintenance, modification or
correction of the Software with the custodial agent named in Appendix A. Vendor
reserves the right to change said custodial agent at any time with written
notification to Customer within sixty (60) days of said change. If Vendor, its
successors or assigns shall cease to conduct business for any period in excess
of thirty (30) days, Customer shall have the right to obtain, for its own and
sole use only, a single copy of the then current version of the source code form
of the Software supplied under this agreement, and a single copy of the
Documentation associated therewith, upon payment to the person in control of the
said source code form of the Software of the reasonable cost of making each
copy. The source code form of the Software supplied to Customer under this
paragraph shall be subject to each and every restriction on use set forth in
this agreement. Customer acknowledges that the source code form of the Software
and the associated Documentation are extraordinarily valuable proprietary
property of Vendor and will be guarded against unauthorized use or disclosure
with great care.
4.7 VENDOR'S EMPLOYEES. Customer acknowledges the relationship of Vendor and
its employees is of significant value to Vendor and that Vendor's employees are
possessed of specialized training and knowledge regarding Vendor and its
proprietary property, imparted to such employees at significant expense to
Vendor. Accordingly, Customer agrees that during the term hereof and for a
period of eighteen (18) months thereafter, Customer shall not, directly or
indirectly, solicit for employment or employ any person who is or within the
preceding twelve (12) months has been an employee of Vendor. Vendor shall have,
in addition to any other remedies available to it, the right to injunctive
relief enjoining any violations of this paragraph 4.7, Customer hereby
acknowledging that other remedies are inadequate. At Vendor's sole option,
Vendor may waive its right to injunctive relief and its right to exercise any
other remedy which might be available to it. In consideration of such waiver,
Customer shall thereupon pay Vendor as liquidated damages a fee equal in amount
to the total compensation paid by Vendor to the former employee for the twelve
(1 2) months next preceding the date of termination of employment of such
employee by Vendor.
V. MAINTENANCE, ENHANCEMENTS AND WARRANTIES
5.1 SOFTWARE WARRANTY. Vendor warrants that during the first twelve (12)
months following delivery of the Software (the "Warranty Period"), the Software
will perform in accordance with the then current Documentation provided
Customer, and further warrants that it has the right to authorize the use of the
Software under this agreement. Vendor's obligation and liability under this
paragraph shall, however, be limited to the replacement and correction of the
Software so that it will so perform, or to obtaining any authorization necessary
to make effective the grant of license to Customer of the use of the Software.
5.2 PATENT INFRINGEMENTS. Vendor shall hold harmless and defend Customer
from any claim or any suit based on any claim that the use of the Software by
Customer under this agreement infringes on any patent, copyright, trademark, or
other proprietary right of any third party, provided that Customer gives Vendor
prompt and written notice of any such claim or suit and permits Vendor to
control the defense thereof.
5.3 WARRANTY DISCLAIMER. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES AND NO OTHER WARRANTY IS EXPRESSED OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
5.4 RENEWAL OF WARRANTIES. Unless sooner terminated pursuant to the
provisions of paragraph 5.6, the warranties granted by paragraphs 5.1 and 5.2
(subject, however, to all limitations and disclaimers contained within this
agreement) and the right to any enhancements or corrections developed by Vendor
under paragraph 5.5, shall be subject to extension for successive one-year
warranty periods commencing on the first anniversary date of the delivery of the
Software for four (4) successive years. Such extension shall be deemed to
automatically occur unless notice is given by either Customer or Vendor of an
election not to so extend, such notice to be given on or prior to the sixtieth
(60th) day preceding the anniversary date of delivery. Any such extension shall
in no event be effective unless Customer shall have paid to Vendor on or prior
to the anniversary date of delivery an annual maintenance fee set forth in
Appendix A. Extension of Vendor's warranties beyond the fifth (5th) anniversary
shall be governed by Vendor's maintenance extension agreement.
5.5 ENHANCEMENTS AND CHANGES. Vendor shall provide Customer with all
enhancements and changes to the Software designed or developed by Vendor and
released to its other customers during the Warranty Period. Any change or
enhancement to the Software, whether developed or designed by Vendor or by
Customer shall be and remain the property of Vendor, provided, however, that
Customer shall be entitled to a perpetual license without additional license fee
of any enhancements or corrections developed by Customer. Vendor reserves the
right to make changes in operating procedures, program language, file
structures, access techniques, general purpose programs, data storage
requirements, input and output formats, report formats, types of hardware
supported, throughput, and other related programming and documentation
improvements required to maintain the Software current. As part of these
services, Vendor will provide Customer the changes with written instructions
concerning implementation. It is understood and agreed that Vendor provision of
improvements and enhancements under this paragraph does not include providing to
Customer a new set of software which may result from rewriting the Software.
Vendor alone shall determine whether the work product of Vendor constitutes new
software as a result of a complete rewrite (which is not provided to Customer
hereunder) or an improvement or enhancement of the Software (which will be
provided to Customer).
5.6 TERMINATION OF WARRANTIES. The warranties expressed in paragraphs 5.1
and 5.2 and Customer's rights under paragraph 5.5 shall immediately terminate if
the Software is revised, changed, enhanced, modified or maintained by any one
other than Vendor without the prior specific direction or written approval of
Vendor.
5.7 LIMITATION OF LIABILITY. Customer expressly agrees that Vendor's
responsibilities in the event of its breach of the warranties contained in
paragraphs 5.1 and 5.2 are as set forth in said paragraphs. Vendor's liability
for damages, including but not limited to liability for patent or copyright
infringement, regardless of the form of action, shall not exceed the license fee
set forth in Appendix A to this agreement and shall arise only if the remedies
provided in paragraphs 5.1 and 5.2 are not fulfilled by Vendor. Customer further
agrees that Vendor will not be liable for any lost profits, or for any claim or
demand against Customer by any other party, except a claim for patent or
copyright infringement as provided herein. IN NO EVENT WILL VENDOR BE LIABLE FOR
CONSEQUENTIAL DAMAGES EVEN IF VENDOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. No action, regardless of form, arising out of this agreement, may be
brought by either party more than one (1) year after the cause of action has
accrued, except that an action for non-payment may be brought within one (1)
year after the date of last payment. No action by Vendor for wrongful disclosure
or use of the Software or Documentation shall be deemed to have accrued until
Vendor receives actual notice of such wrongful disclosure or use.
Page 3 of 5
<PAGE>
THE CUSTOMER'S REMEDIES SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE.
5.8 THIRD PARTY SOFTWARE. The Software licensed hereunder may include software
developed and owned by third party licensors, Vendor's sole warranty with
respect to such third party software is that Vendor possesses the legal right
and authority to relicense such third party software to Customer. Specific
warranties regarding performance of such third party software shall be limited
to the warranties, if any, provided by such third party licensors. In exchange
for Customer's agreement not to assert any claim for breach of such third party
licensor's warranties against Vendor, Vendor hereby assigns to Customer such
right, if any, as Vendor may possess to assert a claim for breach of warranty
against the third party licensor.
VI. DEFAULT
6.1 TERMINATION. Vendor may terminate this agreement and the license granted
hereunder in the event of a default by Customer unless Customer shall have cured
the event of default, as hereinafter defined, within twenty (20) days after
notice of such event of default given by Vendor to Customer. This agreement and
the license granted hereunder shall automatically terminate if Vendor's
warranties are not renewed as contemplated in paragraph 5.4 hereof. Upon any
termination of this agreement, Customer shall deliver to Vendor the Software,
the Documentation and all copies thereof and shall also warrant in writing that
all copies have been returned to Vendor or destroyed.
6.2 EVENTS OF DEFAULT. An event of default is defined as any of the
following:
(A) Customer's failure to pay any amounts required to be paid to Vendor
under this agreement on a timely basis;
(B) Any attempt (i) to assign, sell, mortgage, lease, sublease, license,
sublicense or otherwise convey, (ii) to grant any interest in, right of use
of, or access to, or (iii) to otherwise disclose the Software or the
Documentation, except, in any such case, as herein expressly permitted or as
consented to in writing by the Vendor;
(C) Causing or permitting any encumbrance, of any nature whatsoever to
attach to Customer's interest in the Software in favor of any person or
entity other than Vendor;
(D) The entry of any order for relief under any provision of the federal
bankruptcy code in any bankruptcy proceedings initiated by or against
Customer; or
(E) Customer's breach of any of the terms or conditions of this
agreement.
6.3 DAMAGES. Upon the occurrence of an event of default without cure within
the period of time above-provided, all license or other fees payable to Vendor
under this agreement shall without notice or demand by Vendor become immediately
due and payable as liquidated damages, This provision for liquidated damages
shall not be regarded as a waiver by Vendor of any other rights to which it may
be entitled in the event of Customer's default, but rather, such remedy shall be
an addition to any other remedy lawfully available to Vendor.
VI. GENERAL
7.1 TITLES. Titles and paragraph headings are for reference purposes only
and are not to be considered a part of this agreement,
7.2 FORCE MAJEURE. No party shall be liable for delay in performance
hereunder due to causes beyond its control, including but not limited to acts of
God, fires, strikes, delinquencies of suppliers, acts of war or intervention by
any governmental authority, and each party shall take steps to minimize any such
delay.
7.3 WAIVER. No waiver of any breach of any provision of this agreement shall
constitute a waiver of any prior, concurrent or subsequent breach of the same or
any other provisions hereof and no waiver shall be effective unless made in
writing and signed by an authorized representative of the party to be charged
therewith.
7.4 SEVERABILITY. In the event that any Provision of this agreement shall be
illegal or otherwise unenforceable, such provision shall be severed from this
agreement and the entire agreement shall not fail on account thereof, the
balance of the agreement continuing in full force and effect.
7.5 NOTICES. Any notice which either party hereto is required or permitted
to give hereunder shall be addressed to the party to be charged therewith at the
address set forth below and shall be given by certified or registered mail. Any
such notice shall be deemed given on the date of deposit in the mail.
7.6 ENTIRE AGREEMENT. THE PARTIES HERETO ACKNOWLEDGE THAT EACH HAS READ THIS
AGREEMENT, UNDERSTANDS IT, AND AGREES TO BE BOUND BY ITS TERMS. THE PARTIES
FURTHER AGREE THAT THIS AGREEMENT AND ANY MODIFICATIONS MADE PURSUANT TO IT
CONSTITUTE THE COMPLETE AND EXCLUSIVE WRITTEN EXPRESSION OF THE TERMS OF THE
AGREEMENT BETWEEN THE PARTIES, AND SUPERSEDE ALL PRIOR OR CONTEMPORANEOUS
PROPOSALS, ORAL OR WRITTEN, UNDERSTANDINGS, REPRESENTATIONS, CONDITIONS,
WARRANTIES, COVENANTS, AND ALL OTHER COMMUNICATIONS BETWEEN THE PARTIES RELATING
TO THE SUBJECT MATTER OF THIS AGREEMENT. THE PARTIES FURTHER AGREE THAT THIS
AGREEMENT MAY NOT IN ANY WAY BE EXPLAINED OR SUPPLEMENTED BY A PRIOR OR EXISTING
COURSE OF DEALINGS BETWEEN THE PARTIES. BY ANY USAGE OF TRADE OR CUSTOM, OR BY
ANY PRIOR PERFORMANCE BETWEEN THE PARTIES PURSUANT TO THIS AGREEMENT OR
OTHERWISE. IN THE EVENT CUSTOMER ISSUES A PURCHASE ORDER OR OTHER INSTRUMENT
COVERING THE SOFTWARE HEREIN SPECIFIED, IT IS UNDERSTOOD AND AGREED THAT SUCH
PURCHASE ORDER OR OTHER INSTRUMENT IS FOR CUSTOMER'S INTERNAL USE AND PURPOSES
ONLY AND SHALL IN NO WAY AFFECT ANY OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT.
7.7 GOVERNING LAW. This agreement is accepted in the State of Nebraska,
and shall be enforced in accordance with and governed by the laws of the State
of Nebraska
7.8 CHOICE OF FORUM. Any action arising out of or related to this agreement
or the transaction herein described, whether at law or in equity, shall be
instituted in and litigated in the state or federal courts of the State of
Nebraska. In accordance herewith, the parties hereto submit to the jurisdiction
of the courts of said state. Any party being not a resident of Nebraska at the
time of suit hereby appoints the Secretary of State of Nebraska as its agent for
receipt of service of process.
7.9 ATTORNEY'S FEES. In the event that any action or proceeding is brought
in connection with this agreement the prevailing party therein shall be entitled
to recover its costs and reasonable attorneys fees.
7.10 COUNTERPARTS/FACSIMILES. This agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Any signature to this
agreement may be transmitted by fax and a facsimile signature received by a
party hereto shall for all purposes be deemed an original signature hereto.
7.11 EFFECTIVE DATE. This agreement shall be effective on the date accepted
and executed by an authorized representative of Vendor.
Page 4 of 5
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
CUSTOMER: VENDOR:
SMITH RIVER COMMUNITY BANK INFORMATION TECHNOLOGY, INC.
- --------------------------------------
Signature: Signature:
------------------------------------------- ------------------------------------------
Name: Name: Michael K. Young
------------------------------------------------ -----------------------------------------------
Title: Title: President
---------------------------------------------- -------------------------------------------
Address: 730 East Church Street Address: 1345 Old Cheney Road
-------------------------------------------- -------------------------------------------
Martinsville VA 24112 Lincoln, NE 68512
-------------------------------------------- -------------------------------------------
Date: 11/5/99 Date Accepted: November 9, 1999
-------------------------------------------- --------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
APPENDIX A
DUE UPON EXECUTION: 30% CUSTODIAL AGENT:
------------------------
COMPUTER SYSTEM (CPU): N/A (A99) West Gate Bank, 1204 West 0 Street, Lincoln, NE 68528
--------------------
LOCATION WHERE THE SOFTWARE PRODUCT(S) WILL BE USED:
CUSTOMER'S ENTITLEMENT TO TRAINING:
Customer is entitled to 0 days training for 0 Smith River Community Bank
--------- ---------
person(s) at $ 0 730 East Church Street
----------
Martinsville, VA 24112
ANNUAL MAINTENANCE FEE:
Twenty percent (20%) of license fee exclusive of any discounts.
------------------ ---------
SOFTWARE PRODUCT(S) AND LICENSE FEE(S):
106-729 Director Check Archive - Less Than 3,500 Average Daily Item Volume $ 17,214
----------------
TOTAL: $ 17,214
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION DERIVED FROM THE FINANCIAL
STATEMENTS IN THE FORM 10-QSB FOR THE PERIOD ENDED 9-30-99, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL INFORMATION.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 102,153
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 170,583
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 372,000
<LONG-TERM> 0
0
0
<COMMON> 12
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 170,583
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 2,188
<INTEREST-TOTAL> 2,188
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 0
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 203,617
<INCOME-PRETAX> (201,429)
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (201,429)
<EPS-BASIC> (16,785)
<EPS-DILUTED> (16,785)
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
