Exhibit 10.1
MASTER SERVICES AGREEMENT
Between
INSpire Insurance Solutions, Inc.
and
Each Millers Entity Executing a Service Addendum
Dated as of [12-30], 1999
This Agreement is subject to arbitration under
the rules and regulations of the American
Arbitration Association as provided
in Article IX hereof.
TABLE OF CONTENTS
Page
ARTICLE I. TERMS OF ENGAGEMENT FOR SERVICES..............................................................1
Section 1.1 Terms and Conditions; Service Addendum..................................................1
Section 1.2 Engagement to Provide the Addendum Services.............................................8
Section 1.3 Exclusivity of the Addendum Services....................................................8
Section 1.4 Addendum Service Fees; Adjustment and Discount of Addendum
Service Fees............................................................................8
Section 1.5 Taxes..................................................................................10
Section 1.6 Right of First Refusal for Additional Services.........................................10
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF EACH CUSTOMER..............................................11
Section 2.1 Corporate Status; Qualification........................................................11
Section 2.2 Corporate Power and Authority..........................................................11
Section 2.3 Enforceability.........................................................................11
Section 2.4 No Conflict; Consents..................................................................12
Section 2.5 Infringement...........................................................................12
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF INSPIRE....................................................12
Section 3.1 Corporate Status; Qualification........................................................12
Section 3.2 Corporate Power and Authority..........................................................12
Section 3.3 Enforceability.........................................................................12
Section 3.4 No Conflict; Consents..................................................................12
Section 3.5 Year 2000..............................................................................13
Section 3.6 Infringement...........................................................................13
ARTICLE IV. PERFORMANCE OF THE ADDENDUM SERVICES.........................................................13
Section 4.1 Designated Representatives.............................................................13
Section 4.2 Evaluation and Review Process..........................................................13
Section 4.3 Access to Records and Facilities.......................................................13
Section 4.4 Ownership of Property..................................................................14
Section 4.5 Customer's Performance Obligations and Acknowledgements................................14
Section 4.6 Maintenance of Documents and Files.....................................................14
Section 4.7 Ultimate Discretion....................................................................15
Section 4.8 Mail Received..........................................................................15
Section 4.9 Service Error..........................................................................15
Section 4.10 Year 2000 Compliance...................................................................15
ARTICLE V. CONFIDENTIALITY..............................................................................16
Section 5.1 Nondisclosure..........................................................................16
Section 5.2 No Solicitation or Hiring..............................................................16
Section 5.3 Required Disclosure....................................................................16
Section 5.4 Remedies for Breach....................................................................17
Section 5.5 Survival...............................................................................17
ARTICLE VI. TRADE SECRET AND PROPRIETARY RIGHTS..........................................................17
Section 6.1 No Rights to Software..................................................................17
Section 6.2 Nondisclosure..........................................................................17
Section 6.3 Survival...............................................................................17
ARTICLE VII. TERMINATION..................................................................................17
Section 7.1 Temination of Agreement................................................................17
Section 7.2 Procedure Upon Expiration and Termination..............................................18
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ARTICLE VIII. REMEDIES AND LIMITATION OF LIABILITY.........................................................19
Section 8.1 Indemnification of the Parties.........................................................19
Section 8.2 Liability Limitation...................................................................19
Section 8.3 Notice of Claim........................................................................20
ARTICLE IX. ARBITRATION..................................................................................21
Section 9.1 Condition Precedent....................................................................21
Section 9.2 Choosing the Arbitrators...............................................................21
Section 9.3 Procedure..............................................................................21
Section 9.4 Costs..................................................................................21
ARTICLE X. MISCELLANEOUS................................................................................21
Section 10.1 Amendment..............................................................................21
Section 10.2 Counterparts...........................................................................22
Section 10.3 Entire Agreement.......................................................................22
Section 10.4 Expenses...............................................................................22
Section 10.5 Governing Law..........................................................................22
Section 10.6 No Assignment..........................................................................22
Section 10.7 No Third Party Beneficiaries...........................................................22
Section 10.8 Notices................................................................................22
Section 10.9 Public Announcements...................................................................23
Section 10.10 Representation by Legal Counsel........................................................23
Section 10.11 Severability...........................................................................23
Section 10.12 Successors.............................................................................23
Section 10.13 Time of the Essence....................................................................23
Section 10.14 Waiver.................................................................................23
Section 10.15 Force Majeure..........................................................................23
Section 10.16 Attorney's Fees........................................................................24
Section 10.17 Relationship of the Parties............................................................24
Section 10.18 Drafting...............................................................................24
Section 10.19 Headings...............................................................................24
APPENDIX A Definitions and Interpretations
SCHEDULE 1.4(e) Service Levels
EXHIBIT 1.1 Form of Service Addendum
SERVICE ADDENDUMS
Service Addendum 1.1.1 - Millers Specialty
Service Addendum 1.1.2 - Millers Florida - Policy
Service Addendum 1.1.3 - Millers - Claims
Service Addendum 1.1.4 - Millers Florida - Claims
Service Addendum 1.1.5 - Millers MGA - IT
Service Addendum 1.1.6 - Millers - Nobel
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MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT (together with Appendix A, Exhibit 1.1
and each Service Addendum executed on or after the date hereof, this
"Agreement"), dated as of [12-30], 1999 (the "Signing Date), is between INSpire
Insurance Solutions, Inc., a Texas corporation ("INSpire"), and each Millers
entity that executes a Service Addendum on or after the Signing Date (each a
"Customer"). INSpire and each Customer are sometimes collectively referred to as
the "Parties," and individually referred to as a "Party."
PRELIMINARY STATEMENTS
A. Each Customer desires INSpire to provide certain policy, claims and
other administration services to Customer, and INSpire desires to provide such
services to each Customer.
B. Each Party is willing to provide for such services in accordance
with the terms and conditions set forth in this Agreement.
C. Capitalized terms used in this Agreement are defined or indexed in
Appendix A. Appendix A is incorporated into this Agreement by this reference.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the preliminary statements and the
mutual agreements, covenants, representations and warranties set forth in this
Agreement and for other good, valid and binding consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, hereby agree as follows:
ARTICLE I.
TERMS OF ENGAGEMENT FOR SERVICES
Section 1.1 Terms and Conditions; Service Addendum.
(a) General Applicability of this Agreement. This Agreement sets forth
the terms and conditions applicable to each Service Addendum. A Party's
execution of a Service Addendum will be deemed to be such Party's (i)
acknowledgement and acceptance of the terms and conditions set forth in this
Agreement and (ii) execution and delivery of this Agreement. If a conflict
exists between the terms and conditions of this Agreement and any Service
Addendum, then the terms and conditions set forth in such Service Addendum will
prevail.
(b) Service Addendum. Each Service Addendum will be in substantially
the form attached to this Agreement as Exhibit 1.1. Each Service Addendum will
specify, among other things, (i) the date on which such Service Addendum was
executed, (ii) the parties to such Service Addendum, (iii) the services to be
provided by INSpire pursuant to such Service Addendum (the "Addendum Services"),
(iv) the time period during which INSpire will perform the Addendum Services
(the "Addendum Term"), (v) the fees payable by Customer to INSpire in
consideration of the Addendum Services (the "Addendum Service Fees") and (vi)
any other terms and conditions applicable to such Service Addendum. Each Service
Addendum will constitute a separate, distinct and independent agreement and
contractual obligation of the Parties executing such Service Addendum.
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(c) Policy Administration Services. If policy services are to be
provided pursuant to a particular Service Addendum, then, unless otherwise
specifically noted in such Service Addendum, that Service Addendum will be
deemed to require the policy administration services set forth in this
subsection. Specifically, INSpire will:
(i) provide the technical and administrative services to
support the acquisition of policies;
(ii) provide the necessary functions to satisfy all applicable
insurance department instructions for the specific services provided under this
Agreement;
(iii) develop expert system rules to incorporate Customer's
desired risk profiles. Each Party acknowledges and understands that INSpire will
not be defining any underwriting guidelines for any Customer;
(iv) issue Customer's policies, process renewals,
cancellations, and reinstatements. INSpire will use such non-renewal or
cancellation notices as may be required by policy wording or regulatory
authority. Customer will advise INSpire of appropriate wording;
(v) process invoices for additional premiums and renewal
bills;
(vi) process refunds for return premiums;
(vii) handle inquiries from Producers, insureds, premium
finance and mortgage companies and other relevant third parties (e.g.
mortgagees);
(viii) provide data processing support for policy processing,
including imaging of documents, data entry; editing, expert system underwriting,
electronic workflow, rating, coding, reporting, accounting, and maintenance of
policy records;
(ix) insure that personnel assigned to support Customer are
appropriately licensed and trained and are provided with the necessary space,
furniture, fixtures, electrical power, computer connections, telephones, and
other required assets to support the services;
(x) mail all necessary policy documents and promotional
material/marketing items at Customer's expense to relevant parties;
(xi) support Customer billing through direct xxxx;
(xii) provide accounting services for premiums by receiving
and distributing premiums, maintaining trust accounts, agency accounts and
paying Producer commissions, in accordance with Customer's obligations
including, but not limited to:
(A) Premium Bank Account. Promptly upon
receipt thereof, INSpire will deposit all premiums and other
funds collected for business written by or on behalf of
Customer into a deposit-only bank account to be established
and controlled by Customer. INSpire will be deemed to have a
fiduciary responsibility to Customer with regard to such funds
of Customer;
(B) Operating Account. Customer will
establish and fund a separate bank account which INSpire may
draw upon to pay return premium due policyholders and
commissions due Producers (hereinafter called the "Operating
Account"), INSpire will reconcile all disbursements from the
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Operating Account each month by type and amount of
disbursement (e.g., return premium, commissions due to or from
Producers) and furnish a copy to Customer;
(C) Monthly Reports. All month-end management reports in
printed format will be provided to Customer within 3 business days after the end
of each month. Further, a cash journal will be provided to Customer within 3
business days after the end of each month and all bank reconciliations will be
provided to Customer within 20 business days after the end of the month with no
material reconciling items carried over from the prior month. All accounting end
of the month electronic system downloads will be transferred to Customer within
2 business days after the end of each month;
(D) Required Reports. Reports with the information and
statistical data required by Insurance Services Office and necessary for
Customer to prepare any reports required by the National Association of
Insurance Commissioners will be provided to Customer as necessary or required to
prepare such reports.
(xiii) will calculate and pay commissions to the producer on Customer's
behalf, or will invoice and receive the return of commission from the producer
on return premium transactions and will prepare and mail a Federal 1099 tax
statement for each producer paid a commission during a tax year;
(xiv) will handle non underwriting questions from policyholders,
insured and producers concerning policy and/or endorsement issuance or billing;
(xv) will provide policy, premium and payment information and on-line
access to the policy master file;
(xvi) will establish and maintain written operational procedures to
handle all business related to the policies;
(xvii) will charge Customer for all agreed upon additional reports or
modifications as requested in writing by Customer on a time and materials basis
utilizing the appropriate mix of service personnel required to perform the
modifications or produce new reports. Rates for such personnel are listed in the
applicable Service Addendum;
(xviii) will maintain a disaster recovery plan to be implemented in the
event of an occurrence of a catastrophic event; and
(xix) Positive Pay will be established for all business currently being
serviced by INSpire for all the entities executing this Agreement as it becomes
available for programs, but no later than 180 days after the execution of this
agreement. Future business serviced by INSpire under the terms of a Service
Addendum will have Positive Pay established on the Addendum Effective Date of
such Service Addendum.
(d) Claims Administration Services. If claims services are to be
provided pursuant to a particular Service Addendum, then, unless otherwise
specifically noted in such Service Addendum, that Service Addendum will be
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deemed to require the claims administration services set forth in this
subsection. Specifically, INSpire will:
(i) Investigate, evaluate, and handle each claim reported
according to applicable state law, the terms and conditions of the policy and
any written standards provided by Customer using appropriately trained and
licensed personnel. Customer grants INSpire the authority to provide the
foregoing claims administration services; provided, however that INSpire will
not have any authority to alter or discharge any policy or waive any policy
provision or condition.
(ii) establish a claims operation center that will function as
a control unit;
(iii) verify coverage on all cases;
(iv) administer the appraisal/assessment process using a
combination of staff, independent appraisers and direct repair facilities
reasonably acceptable to Customer;
(v) perform all reasonable and necessary administrative and
clerical work in connection with claim or loss reports;
(vi) establish and maintain a claim file for each reported
claim or loss. The claim file will have a daily activity log, which will be
available for review at any and all reasonable times by Customer subject to the
provisions of the Agreement;
(vii) record and report each claim promptly to Customer with a
recommended reserve; and will consult with, and seek consent from, Customer with
respect to any of the following:
(A) any loss or claim resulting in legal
action being instituted against Customer's insured, INSpire or
Customer;
(B) any loss or claim causing a complaint to
be filed with any regulatory authority;
(C) any inquiry from any regulatory
authority, including but not limited to any insurance
department, with respect to any claim or claims, even if no
complaint causes such inquiry;
(D) any claim in which INSpire deems
appropriate to rescind policy coverage for material
misrepresentation;
(E) any claim involving an allegation of
extra contractual obligations, or bad faith claim handling;
(F) any claim involving a fatality, major
amputation, spinal cord or brain damage, loss of eyesight,
extensive xxxxx, poisoning or multiple fractures;
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(G) any claim that Customer desires to be
kept advised of during the life of the claim; or
(H) any claim where there has been a demand
for policy limits and INSpire does not evaluate the value of
the claim to include settlement at that amount;
(I) any claim involving asbestos, pollution,
toxic waste and lead or paint poisoning;
(J) potential subrogation in excess of
$40,000;
(K) any claim which is very likely to result
in the commencement of litigation within 30 days;
(L) any claim involving pharmaceuticals,
communicable diseases, rape, child molestation or multiple
food poisoning;
(viii) provide monthly and year-to-date reports on all claims activity
including new claims reported, claims pending, claims closed and reserve
changes. The reports will include:
(A) information and statistical data (1)
required by Insurance Services Office, (2) necessary for
Customer to prepare any reports required by National
Association of Insurance Commissioners, or (3) other reports
reasonably requested by Customer;
(B) loss runs with paid claims and
outstanding reserves remaining at the end of each monthly
report period; categorized as indemnity, medical payment, loss
adjustment expense separated by other expense and legal
expense (to the extent that Customer properly inputs the
necessary data), plus any other information required by the
Annual Statement instructions or state regulatory agencies;
(C) check registers;
(D) reports needed by Customer for the
filing of reinsurance claims or quarterly reinsurance updates;
(ix) perform a periodic review at mutually agreed upon intervals of
outstanding claim reserves, and recommend changes to outstanding claim reserves;
(x) prepare checks and vouchers, compromises, releases, agreements and
any other documents reasonably necessary to finalize and close claims. INSpire
will issue payments of claims and allocate loss adjustment expenses only within
the guidelines as authorized by Customer. For purposes of settling claims and
paying claim-related expenses, Customer has agreed to establish, maintain and
fund a separate bank account from which INSpire may draw against as hereinafter
set forth (the "Claim Account"). Customer agrees to deposit additional funds
into the Claim Account on a weekly basis if necessary to maintain it at a level
sufficient to allow INSpire to carry out its obligations under this Agreement.
INSpire will regularly provide information and estimates to Customer to enable
Customer to maintain the Claim Account at an appropriate level. Customer will
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provide to INSpire such information as is necessary for INSpire to draw checks
on the Claim Account. INSpire hereby guarantees that any check it prepares will
be signed and issued only in accordance with the procedures set forth below:
Check Amount Number Type of Signature Authorized
Signatures Signatory
Required
0.01 - $1,999.99 1 1 Facsimile INSpire
$2,000.00 - $9,999.99 2 2 Facsimile & 1 Original INSpire
$10,000.00 - $19,999.99 2 2 Original signatures INSpire
$20,000+ 2 2 Original signatures 1 INSpire
1 Customer
Facsimile signatures can be replaced with original signatures. Original
signatures may not be replaced with facsimile signatures. Exceptions will be
submitted to INSpire in writing by Customer.
INSpire will promptly deposit any monies collected through salvage and
subrogation to the Claim Account, and maintain a register of all such
collections and deposits (the "Salvage and Subrogation Register"). The Salvage
and Subrogation Register will include, but will not be limited to, the following
information: date of deposit, date of receipt of funds, the claim number, the
payer, and the amount and purpose of such payment. (The "Claim Register" will
include, but will not be limited to, the following information: claim number;
date of check; payee; amount; and check number.) INSpire will reconcile the
Claim Register and the Salvage and Subrogation Register to the Claim Account on
a monthly basis;
(xi) maintain service standards and claims documentation in accordance
with standards set by Customer and agreed to by INSpire. INSpire will be in
compliance with all state regulations dealing with the adjusting and handling of
claims. INSpire will periodically review the development of the claims handling
procedure with Customer to identify problems and recommend corrective action;
(xii) pursue and prosecute diligently Customer's salvage and
subrogation rights relating to any losses. INSpire will use reasonable efforts
to collect and deposit funds arising from the enforcement of such rights into
the Claim Account. INSpire will report monthly on salvage/subrogation receipts;
(xiii) provide Special Investigative Services in accordance with
guidelines agreed to by Customer on a time and expense basis;
(xiv) provide Customer claim information to prepare reports (A)
required by the Internal Revenue Service, and (B) other reports reasonably
requested by Customer;
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(xv) will maintain a disaster recovery plan to be implemented in the
event of an occurrence of a catastrophic event;
(xvi) upon (A) receipt by INSpire of a demand for arbitration or notice
that litigation has been filed concerning a claim or feature or (B) a
determination by Customer that it is necessary to commence litigation of a
claim, feature, or salvage or subrogation claim, INSpire will promptly provide
the Designated Representative with written notice of Customer's option to assume
all further responsibility for the written notice of Customer's option to assume
all further responsibility for the administration of the disputed claim or
feature; and, in the event Customer elects within ten (10) days to assume such
responsibility for the disputed claim or feature, INSpire will promptly transfer
to Customer such disputed claim or feature, and, will promptly deliver to
Customer the original claim file, notes, photographs and any Special
Investigation Unit files, which material will be returned to INSpire at the
conclusion of the arbitration or litigation. Notwithstanding Customer's election
with respect to the Party responsible for the administration of any disputed
claim or feature, Customer will be responsible for all expenses, including
attorneys' fees, incurred after receipt by INSpire of a demand for arbitration
or after receipt by INSpire of notice that litigation has been filed concerning
a claim or feature; and
(xvii) Positive Pay will be established for all business currently
being serviced by INSpire for all the entities executing this Agreement as it
becomes available for programs, but no later than 180 days after the execution
of this agreement. Future business serviced by INSpire under terms of a Service
Addendum will have Positive Pay established on the Addendum Effective Date of
such Service Addendum.
Section 1.2 Engagement to Provide the Addendum Services. Each Customer engages
INSpire to provide the Addendum Services set forth in each Service Addendum to
which such Customer is a Party, and INSpire will provide the Addendum Services
to such Customer, each upon the terms and conditions set forth in this
Agreement.
Section 1.3 Exclusivity of the Addendum Services. During each Addendum Term,
INSpire will be the sole and exclusive provider of the Addendum Services to
Customer (other than Customer's rendering an incidental amount of the Addendum
Services on its own behalf, which will not in any way affect the amount of
Addendum Service Fees due to INSpire). In furtherance of the immediately
preceding sentence, Customer acknowledges that during each Addendum Term (a)
INSpire will have the sole and exclusive right to provide the Addendum Services
to Customer, (b) Customer will not use or engage any other person or entity
(including Customer or an Affiliate of Customer) to render the Addendum
Services, (c) Customer will not take any actions or do any things the intent or
effect of which is to circumvent or affect adversely the provisions of this
Section and (d) INSpire will have no restrictions on its right to market to, and
perform services for, the property and casualty insurance industry which are
similar to the Addendum Services provided pursuant to this Agreement.
Section 1.4 Addendum Service Fees; Adjustment and Discount of Addendum Service
Fees.
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(a) Monthly Addendum Service Fees. During each Addendum Term, Customer
will pay to INSpire for the performance of the Addendum Services the monthly
Addendum Service Fees set forth on the applicable Service Addendum. Customer
will pay to INSpire the Addendum Service Fees within 15 days of Customer's
receipt of INSpire's invoice for the Addendum Services performed during the
previous calendar month. Customer's payment of the Addendum Service Fees will
not be deemed to be Customer's acceptance regarding the amount or calculation of
such Addendum Service Fees, and each Party agrees to resolve in good faith any
dispute regarding the amount or calculation of Addendum Service Fees.
(b) Negotiated Adjustment of Addendum Service Fees. Each Party agrees
to negotiate in good faith for an adjustment to the Addendum Service Fees in the
event (i) of any statutory, regulatory or judicial change or other circumstance
not within the control of any Party that results in a material increase or
decrease in the Addendum Services to be provided pursuant to the applicable
Service Addendum or (ii) the Parties agree to a material increase or decrease in
the Addendum Services to be provided pursuant to the applicable Service
Addendum.
(c) Discount of Addendum Services Fees. The amount of the monthly
Addendum Service Fees due and payable to INSpire will be reduced when such
monthly Addendum Service Fees reach certain levels, as set forth below. The
Parties agree that the following discounts will be based on and apply to the
aggregate monthly amount of Addendum Service Fees due to INSpire as a result of
performing the Addendum Services for all Service Addendums attached hereto. In
calculating the aggregate monthly amount of Addendum Service Fees, the service
fees paid to INSpire pursuant to the Millers American Group/INSpire Service
Agreement dated September 1, 1999 will also be used to calculate the discount
pursuant to this section.
Aggregate Monthly
Addendum Service Fees
(excluding Catastrophe Fees) Discount
---------------------------- --------
up to 2,125,000 $0
from 2,125,001 to 2,375,000 $0 + 10% of amount over $2,125,000
from 2,375,001 to 2,625,000 $25,000 + 12% of amount over $2,375,000
from 2,625,001 to 2,875,000 $55,000 + 14% of amount over $2,625,000
from 2,875,001 to 3,125,000 $90,000 + 16% of amount over $2,875,000
from 3,125,001 to 3,375,000 $130,000 + 18% of amount over $3,125,000
from 3,375,001 to 3,625,000 $175,000 + 19% of amount over $3,375,000
over 3,625,000 $222,500 + 20% of amount over $3,625,000
(d) Benchmark Adjustment. After the completion of the fifth Contract
Year of each Service Addendum, the then-effective Addendum Service Fees
applicable to such Service Addendum will be adjusted, if at all, through the use
of an independent third party benchmarking services. Prior to the completion of
the fifth Contract Year of each Service Addendum, the Parties will mutually
agree on the scope of, and the methodology to be used in, the benchmarking
process. The fees and services charged by the party conducting the benchmark
service will be borne equally by the parties to such Service Addendum. If the
benchmark process demonstrates that the quality of the Addendum Services
received by Customer in relation to the Addendum Service Fees are not in the
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upper half of the comparison group used in the benchmark process, then INSpire
will promptly adopt a plan (including corrective action and/or a reduction in
the Addendum Service Fees) that will remedy any deficiencies identified in the
benchmark process.
(e) Penalty/Award Payments. From (i) the later to occur of an Addendum
Effective Date or the termination of an Addendum Implementation Period (if
applicable), until (ii) the earlier of the termination of that Service Addendum
or its Addendum Expiration Date, INSpire will achieve each of those service
levels set forth on Schedule 1.4(e) that are applicable to the Addendum Services
set forth on the applicable Service Addendum (the "Service Levels"). If INSpire
fails to achieve or exceeds the Service Levels with the frequency or in the
manner set forth on Schedule 1.4(e), then INSpire will be responsible for the
penalty payments, or entitled to the award payments, as the case may be,
specified on Schedule 1.4(e). After the Parties have reviewed and agreed upon
the content of the Monthly Service Report, the penalty payments and award
payments will be detailed on INSpire's monthly invoice, and will be subject to
the same payment terms specified in subsection (a) above. Each Party
acknowledges that the payments specified on Schedule 1.4(e) will not subject to
the limitations set forth in Section 8.2(a).
(f) Adjustment for Changes in the Consumer Price Index. For purposes of
calculating the Addendum Services Fees payable with respect to each Service
Addendum, all fixed dollar amounts set forth in Paragraph 5 (or the applicable
Addendum Service Fee paragraph of such Service Addendum) of each Service
Addendum will be subject to increase or decrease at the beginning of each
Contract Year equal to the percentage change in the Consumer Price Index-All
Urban User Fort Worth, Texas) for the latest twelve month period ending on the
date of each anniversary of the Addendum Effective Date.
Section 1.5 Taxes. Customer will pay all tariffs and taxes, however designated
or levied, that are applicable to any Addendum Services and/or any Addendum
Service Fees. Such tariffs and taxes include state and local sales and use taxes
and any other tariff or tax based on the Addendum Services performed or the
payment of the Addendum Service Fees. Notwithstanding the foregoing, Customer
will not be responsible for, and INSpire will pay (a) any franchise or income
taxes based upon the income of INSpire and (b) any personal property or similar
taxes based upon the personal or real property owned or leased by INSpire. All
Parties will take all reasonable actions necessary to minimize and mitigate any
tariffs or taxes, however designated, that may be levied on or after the Signing
Date and will confer with the other Party prior to making any filing on or
behalf of such Party.
Section 1.6 Right of First Refusal for Additional Services.
(a) Notice of Bid for Additional Services. Subject to Section 1.3, if,
at any time and from time to time during an Addendum Term, any Customer elects
to solicit a bid from third parties (a "Bid") to perform any services similar to
the Addendum Services set forth in the Services Addendums (such additional
services, the "Additional Services"), such Customer will provide to INSpire all
the information necessary for INSpire to submit a Bid on a timely basis for such
Additional Services.
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(b) Grant of Right of First Refusal. If such Customer decides to accept
any bona fide Bid other than INSpire's Bid, then, prior to such Customer's
acceptance of such competing bona fide Bid, such Customer will provide to
INSpire written notice setting forth the terms of such competing Bid, including
the price, service levels, technology to be employed and time table to implement
the Additional Services (the terms of such competing Bid, the "Competing
Terms"). At any time during the fifteen (15) day period immediately following
INSpire's receipt of the notice setting forth the Competing Terms, INSpire will
have the exclusive right, but not the obligation, to amend its Bid to meet or
exceed the Competing Terms (or terms as similar as reasonably possible).
(c) Exercise of the Right of First Refusal. INSpire will exercise its
right of first refusal granted pursuant to this Section, if at all, by
delivering written notice thereof ("Exercise Notice") to such Customer within
the fifteen (15) day period specified above. If INSpire timely delivers the
Exercise Notice, then INSpire will implement the Additional Services on terms
substantially the same as set forth in INSpire's amended Bid.
(d) Failure to Deliver an Exercise Notice. If INSpire fails to timely
deliver the Exercise Notice or, having timely delivered such Exercise Notice,
fails to implement the Additional Services within the time period specified in
INSpire's amended Bid, then such Customer, at any time within one hundred
thirty-five (135) days after INSpire's failure to take such appropriate action,
may accept the competing Bid on the Competing Terms. If Customer does not accept
the competing Bid on the Competing Terms within such one hundred thirty-five
(135) day period, then such Customer will again be required to comply with the
provisions of this Section.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF EACH CUSTOMER
Each Customer represents and warrants that the statements contained in
this Article are correct and complete as of the Signing Date and as of the
Addendum Effective Date, except in each case as specifically stated:
Section 2.1 Corporate Status; Qualification. Customer is an entity duly
organized, validly existing and in good standing under the laws of the state of
its formation. Customer is duly qualified and in good standing as a foreign
entity under the laws of each jurisdiction where qualification is required,
except where the lack of such qualification would not have a Material Adverse
Effect.
Section 2.2 Corporate Power and Authority. Customer has the requisite power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder, to consummate the transactions contemplated hereby. Customer has
taken all requisite action necessary to authorize the execution and delivery of
this Agreement, the performance of its obligations hereunder and the
consummation of the transactions contemplated hereby.
Section 2.3 Enforceability. This Agreement has been duly executed and delivered
by Customer and constitutes a legal, valid and binding obligation of Customer
enforceable against it in accordance with the terms of this Agreement, except as
the same may be limited by applicable bankruptcy, insolvency,
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reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
Section 2.4 No Conflict; Consents. The execution, delivery and performance by
Customer of this Agreement will not (a) violate any code, statute, law, rule,
regulation, judgment, decree or injunction of any governmental authority
("Law"), (b) violate the articles or certificate of incorporation or the bylaws
of Customer, (c) violate any consent decree, decree, injunction, judgment, order
or writ of any arbitrator or governmental authority ("Order") to which Customer
is a party or by which any of its assets are bound, (d) breach any material
contract, real property lease or personal property lease to which Customer is a
party, (e) result in the creation of an encumbrance of any kind on Customer or
any of its assets or (f) require any consent or approval from any person, entity
or governmental authority.
Section 2.5 Infringement. During the Term, Customer's Owned Software and the use
by Customer of its Systems as contemplated by this Agreement does not and will
not violate or infringe, or constitute an infringement or misappropriation of,
any patent, copyright, trademark, trade secret or other proprietary or
contractual rights of any third party.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF INSPIRE
INSpire represents and warrants that the statements contained in this
Article are correct and complete as of the Signing Date and as of the Addendum
Effective Date, except in each case as specifically stated:
Section 3.1 Corporate Status; Qualification. INSpire is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas. INSpire is duly qualified and in good standing as a foreign entity under
the laws of each jurisdiction where qualification is required, except where the
lack of such qualification would not have a Material Adverse Effect.
Section 3.2 Corporate Power and Authority. INSpire has the corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. INSpire has
taken all corporate action necessary to authorize its execution and delivery of
this Agreement, the performance of its obligations hereunder and the
consummation of the transactions contemplated hereby.
Section 3.3 Enforceability. This Agreement has been duly executed and delivered
by INSpire and constitutes a legal, valid and binding obligation of INSpire
enforceable against it in accordance with the Terms of this Agreement, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.
Section 3.4 No Conflict; Consents. The execution, delivery and performance by
INSpire of this Agreement will not (a) violate any Law, (b) violate the articles
of incorporation or the bylaws of INSpire, (c) violate any Order to which
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INSpire is a party or by which any of its assets are bound, (d) breach any
material contract, real property lease or personal property lease to which
INSpire is a party, (e) result in the creation of an encumbrance of any kind on
INSpire or any of its assets or (f) require any consent or approval from any
person, entity or governmental authority.
Section 3.5 Year 2000. All of INSpire's Systems are and will continue to be Year
2000 Compliant.
Section 3.6 Infringement. During the Term, INSpire's Owned Software and the use
by INSpire of its Systems as contemplated by this Agreement does not and will
not violate or infringe, or constitute an infringement or misappropriation of,
any patent, copyright, trademark, trade secret or other proprietary or
contractual rights of any third party.
ARTICLE IV.
PERFORMANCE OF THE ADDENDUM SERVICES
Section 4.1 Designated Representatives. Each Party will designate a person (such
person, or the person designated in writing from time to time by the appropriate
Party to replace such person, a "Designated Representative" who (a) oversee and
manage the performance of such Party's obligations under this Agreement, (b)
serve as such Party's primary managerial point of contact with the other
effected Party, (c) be authorized to act for such Party and on its behalf with
respect to all operational matters relating to this Agreement and (d) review the
operational, procedural and such other changes mutually agreed upon in writing
by the Parties. The Designated Representative will not have the authority
(acting in such person's capacity as a Designated Representative) to amend this
Agreement pursuant to Section 10.1.
Section 4.2 Evaluation and Review Process.
(a) Delivery of Monthly Service Reports. During the Term, INSpire will
provide Customer with a monthly service report within 30 days after the end of
each calendar month that measures actual service levels for the most recently
completed month against the Service Levels set forth on Schedule 1.4(e)
applicable to Customer (the "Monthly Service Report").
(b) Review of the Addendum Services. The Designated Representatives
will meet on a monthly basis after the delivery of the Monthly Service Report to
review INSpire's performance hereunder and will meet at such other times as may
be reasonably requested by either Designated Representative to discuss any
related matters. The senior executives of each Party to whom such Designated
Representatives report will meet on a periodic basis to review the relationship
between the Parties and to discuss ways to improve the relationship.
Section 4.3 Access to Records and Facilities.
(a) Customer's Access to INSpire's Records and Facilities. INSpire will
provide Customer and its Affiliates and Representatives reasonable access to
INSpire's facilities and all books, records and accounts necessary to verify
INSpire's compliance with this Agreement. Such access will be made available
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upon prior written notice during normal business hours and during the periods in
which INSpire is required to maintain such records. INSpire will provide the
appropriate state insurance departments reasonable access to its facilities and
all necessary books, records and accounts in their then-current form. Customer
will be responsible for ensuring that all persons given access pursuant to this
subsection comply with the confidentiality provisions of Article V.
(b) INSpire's Access to Customer's Records and Facilities. Customer
will provide, and will cause each of its Affiliates to provide, to INSpire and
its Affiliates and Representatives reasonable access to Customer's and its
Affiliates' facilities and all books, records and accounts necessary to verify
Customer's compliance with this Agreement. Such access will be made available
upon prior written notice during normal business hours and during the periods in
which Customer is required to maintain such records. Customer will provide the
appropriate state insurance departments reasonable access to its facilities and
all necessary books, records and accounts in their then-current form. INSpire
will be responsible for ensuring that all persons given access pursuant to this
subsection comply with the confidentiality provisions of Article V.
Section 4.4 Ownership of Property.
(a) Customer's Property. Customer will own all right, title and
interest in and to the content of the policy or claims files, accounting and
Producer files and computer images and storage discs products (back-up of data)
created or developed in connection with, as a result of or incident to the
performance of the Addendum Services.
(b) INSpire's Property. Subject to the foregoing, INSpire will own all
right, title and interest in and to any and all tools, techniques, processes,
procedures, inventions, software, patents, know how, trade secrets and other
copyrights existing on the Signing Date or first discovered, created or
developed by INSpire in connection with, as a result of or incident to the
performance of the Addendum Services.
Section 4.5 Customer's Performance Obligations and Acknowledgements. INSpire's
performance of the Addendum Services require the support and cooperation of
Customer. As such, Customer agrees and acknowledges as follows:
(a) Provide Information. Customer will provide, in a timely manner and
in a format reasonably acceptable to INSpire, the data necessary for INSpire to
perform the Addendum Services, including policy jackets, Customer's banking
institution account information, corporate and subsidiary logos (if applicable),
style and specifications of printed documents such as insurance policies.
(b) Access to Third Party Software. Subject to Section 2.6 and any
lawful right or restriction, Customer will provide INSpire access to all of
Customer's Software that is necessary for INSpire to perform the Addendum
Services.
Section 4.6 Maintenance of Documents and Files. During each Addendum Term,
INSpire will maintain, as applicable, (a) records of amounts billable to and
payments made on behalf of Customer, (b) records of claims made and losses
incurred, and (c) copies of all policies and applications and correspondence
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relating to such policies. INSpire will not destroy these records and documents
without the written permission of Customer for a period of at least five years
from the loss or termination date of the applicable policy, or the period
specified by the applicable state or federal statute regulating preservation of
records, whichever is longer. INSpire may, at its discretion, use magnetic,
optical, and other types of technology to store such data. INSpire agrees to
provide to Customer reasonable supporting documentation regarding any disputed
invoice or claim amount within fifteen days after Customer provides written
notification of the dispute to INSpire.
Section 4.7 Ultimate Discretion. INSpire acknowledges and agrees that Customer,
being at risk and having ultimate responsibility for the policy and claims to be
administered by INSpire, will at all times have ultimate discretion with respect
to all issues pertaining to such matters.
Section 4.8 Mail Received. INSpire may receive and open all mail addressed to
Customer or its Affiliates and deal with the contents thereof in its discretion
to the extent that such mail and the contents thereof relate to the Addendum
Services. INSpire agrees to deliver, or to cause to be delivered, to Customer
all mail received by INSpire which is addressed to Customer and does not relate
to the Addendum Services.
Section 4.9 Service Error. If data is processed in error due to an error or
defects in the Addendum Services provided by INSpire, then, upon INSpire
receiving notice of such error or defect, INSpire will reprocess such data
without charge to Customer. If data is processed in error due to an error caused
by Customer or its Representatives, then upon INSpire'receiving notice of such
error or defect, INSpire will reprocess such data at Customer's expense. Each
Party will be responsible for all remedial expenses related to its error,
including all expenses associated with remailings, help lines and processing
time. Each Party acknowledges that the remedial expenses specified in this
Section will not be subject to the limitations set forth in Section 8.2(a).
Section 4.10 Year 2000 Compliance. To the extent that it is reasonably
determined by any Party that a Party's Systems, the Systems that a Party is
providing access to or use of in accordance with this Agreement or any portion
thereof are not Year 2000 Compliant, INSpire, on the one hand, and each
Customer, on the other hand, agrees to assist in any reasonable manner and to
cooperate and conform its work processes and methodologies to the extent it is
reasonably necessary to assist a Party to formulate and implement promptly a
plan of action to modify its System so that such System is Year 2000 Compliant.
INSpire, on the one hand, and each Customer, on the other hand, will be
obligated to (a) reimburse the other Party for any reasonable expenses incurred
by the other Party in connection with complying with the terms of this Section
and (b) indemnify, defend, and hold harmless the other Party from and against
any Claim incurred by the other Party that arises out of or directly relates to
such Party's Systems not being Year 2000 Compliant. If any of Customer's Systems
are determined not to be Year 2000 Compliant, then the Parties agree (y) to
adjust equitably the Service Levels applicable during the period in which the
plan of action to modify Customer's Systems is being implemented and (z) the
applicable Addendum Implementation Period or Addendum Term, as the case may be.
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ARTICLE V.
CONFIDENTIALITY
Section 5.1 Nondisclosure. The Parties hereby agree as follows:
(a) Use of Information. All Confidential Information will be used
solely for the purpose of performing the Addendum Services. In no event will
Confidential Information be used by any party or person receiving Confidential
Information for business or competitive purposes.
(b) Confidentiality. All Confidential Information will be kept strictly
confidential by the Receiving Party and the Receiving Party will restrict
disclosure of Confidential Information to only those employees, agents and
advisors of the Receiving Party who have a need to know such information for the
purpose of performing the Addendum Services.
(c) Disclosure to Representatives. Representatives of the Receiving
Party will be informed by the Receiving Party of the confidential nature of such
information and the covenant of confidentiality by the Receiving Party
hereunder, and they will be directed by the receiving Party to treat such
information confidentially. Before any disclosure or dissemination of any
Confidential Information subject to this Agreement is made to any person, other
than an officer or director of the Receiving Party or its counsel or independent
accountants, the Receiving Party will provide the person to whom such disclosure
is made with a copy of this Agreement.
Section 5.2 No Solicitation or Hiring. During each Addendum Term and for the six
month period immediately following the Addendum Expiration Date, each Party
agrees that, without the effected Party's prior written consent, no Party nor
any of its Affiliates will solicit for employment, employ or otherwise contract
for the services of any person who is or was employed by any other Party,
provided that this Section will not apply to (a) general commercially published
solicitations for employment by a Party or its Affiliates, (b) the solicitation
or hiring of an employee who was not an employee of any other Party at any time
during the six months immediately preceding such solicitation or hiring.
Section 5.3 Required Disclosure. In the event the Receiving Party or its
Representatives are requested or required in a judicial, administrative or
governmental proceeding to disclose any Confidential Information, the Receiving
Party will cooperate with the Disclosing Party and provide it with prompt notice
of any such request so that the Disclosing Party may seek an appropriate
protective order or waive the Receiving Party's compliance with the provisions
of this Agreement. If, in the absence of a protective order or the receipt of a
waiver hereunder, the Receiving Party or its Representatives are nonetheless, in
the opinion of the Receiving Party's attorneys, legally required to disclose
Confidential Information to any tribunal or else stand liable for contempt or
suffer other penalty, the Receiving Party may disclose such information to such
tribunal without liability hereunder, provided that the Receiving Party complies
with the notice provisions of this paragraph.
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Section 5.4 Remedies for Breach. The Parties acknowledge that a breach
of the covenant of confidentiality contained in this Agreement will result in
irreparable and continuing damage to the Disclosing Party for which there will
be no adequate remedy at law. In the event of any breach of this Agreement, the
Receiving Party agrees that the Disclosing Party will be entitled to seek and
obtain specific performance of this Agreement by the Receiving Party, including,
upon making the requisite showing that it is entitled thereto, provisional
injunctive relief restraining the Receiving Party from committing such breach,
in addition to such other and further relief, including monetary damages, as
provided by law.
Section 5.5 Survival. THE OBLIGATIONS UNDER THIS ARTICLE V WILL CONTINUE AFTER
THIS AGREEMENT EXPIRES OR IS TERMINATED.
ARTICLE VI.
TRADE SECRET AND PROPRIETARY RIGHTS
Section 6.1 No Rights to Software. Notwithstanding INSpire's use of its Systems
in the performance of the Addendum Services, neither this Agreement nor the
performance of any Addendum Services hereunder will be construed as a grant to
Customer of a license or any other interest in or to INSpire's Systems. Further,
this Agreement grants to Customer no right to possess or reproduce, or any other
interest in, any of INSpire's software used in the performance of all or any
part of the Addendum Services or their specifications in any tangible or
intangible medium. Customer may not mortgage, hypothecate, sell, assign, pledge,
lease, transfer, license or sublicense any of INSpire's Software used in the
performance of all or any part of the Addendum Services, nor allow any person or
entity to transmit, copy of reproduce any such Software. In the event Customer
comes into possession of any of INSpire's Software used in the performance of
all or any part of the Addendum Services, Customer will immediately notify
INSpire and return such Software and all copies of any kind thereof to INSpire.
Section 6.2 Nondisclosure. Other than Customer's employees who need access to
INSpire's Systems for the performance of their duties, Customer covenants and
agrees not to use, disclose or otherwise make available to any person any of
INSpire's Systems used in the performance of all or any part of the Addendum
Services. Customer agrees to take all reasonable steps necessary to obligate
each of its employees who is given access to INSpire's Systems to a level of
care sufficient to protect such Systems from unauthorized use or disclosure.
Section 6.3 Survival. THE OBLIGATIONS OF CUSTOMER UNDER THIS ARTICLE VI WILL
CONTINUE AFTER THIS AGREEMENT EXPIRES OR IS TERMINATED.
ARTICLE VII.
TERMINATION
Section 7.1 Termination of Agreement. This Agreement will be deemed terminated
upon the termination or expiration of all Service Addendums, whether such
Service Addendums are executed on or after the Signing Date. Each Service
Addendum may be terminated prior to the Addendum Expiration Date only as
follows:
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(a) with respect to any material breach of this Agreement or any
material breach of the applicable Service Addendum, by written notice from the
non-breaching Party; provided, however, such termination will be effective only
after such breach remains substantially uncured for 30 days after written notice
specifying such breach is received by the breaching Party.
(b) by a Party in the event (i) the other Party makes a general
assignment for the benefit of creditors, (ii) the other Party files a voluntary
petition in bankruptcy or petitions for reorganization or similar arrangement
under the bankruptcy laws, (iii) a petition in bankruptcy is filed against the
other Party by a third party and such petition is not dismissed within ninety
days of its filing date, or (iv) a receiver or trustee is appointed for all or
any part of the property and assets of the other Party;
(c) with respect to a program specified in a Service Addendum, by
Customer in the event Customer discontinues (by sale or abandonment) such
program; provided, however, that a termination pursuant to this subsection will
be effective no earlier than six months after INSpire's receipt of written
notice of such program's termination pursuant to this subsection; or
(d) with respect to any state in which Customer maintains a program
specified in a Service Addendum, by written notice from Customer in the event
such Customer becomes subject to a cease and desist order or decree issued by a
public authority exercising valid jurisdiction over such Customer in such state.
Section 7.2 Procedure Upon Expiration and Termination. Upon expiration or
termination of this Agreement or any Service Addendum:
(a) Return of Supplies. INSpire will promptly return to Customer any
forms or other supplies imprinted with Customer's or its Affiliate's name,
regardless of who incurred the cost for same as well other supplies paid for by
Customer;
(b) Provide Files. INSpire will provide promptly to customer a tape (or
other then-current technology) back-up of all data files in a format reasonably
requested by Customer and the personnel necessary to assist with the records
layout and file structures of the data files for Customer. The costs and
expenses associated with complying with this subsection will be borne by (i) the
breaching Party in the event of a termination pursuant to Section 7.1(a), (ii)
by the other Party in the event of a termination pursuant to Section 7.1(b) and
(iii) by Customer in the event of a termination pursuant to Section 7.1(c).
(c) No Relief for Breach. Such expiration or termination will not in
any way limit, restrict or relieve any Party of liability for any breach of this
agreement or the applicable Service Addendum.
(d) Payment of Termination Fee. Each Party acknowledges that INSpire
agree to provide Customer an option to terminate a program pursuant to Section
7.1(c) in reliance on, and in anticipation of, Customer's absolute obligation to
pay the applicable Termination Fee associated with the terminated program. As
used in this subsection, "Termination Fee" means the aggregate amount of
INSpire's unamortized costs associated with the terminated program, including
17
(i) tangible and intangible assets, (ii) implementation costs and (iii)
transaction costs (e.g. legal fees, accounting fees, etc.). Each Party further
acknowledges that the amount of the Termination Fee is not punitive in nature
and represents the Parties' best estimate of INSpire's stranded costs associated
with an early termination of the specific program. As such, Customer will pay to
INSpire, upon the termination of the program pursuant to Section 7.1(c), the
Termination Fee.
(e) Payment Obligation. Each Party acknowledges that Customer's
termination of a program pursuant to Section 7.1(d) will (i) impose certain
financial hardships on INSpire and (ii) result in Customer's absolute obligation
to pay an amount equal to the Addendum Services Fees (associated with the
terminated program in such state) paid to INSpire for the six (6) months
immediately preceding the termination pursuant to Section 7.1(d). Each Party
further acknowledges that such amount is not punitive in nature and represents
the Parties' best estimate of the financial hardship suffered by INSpire
associated with an early termination of the specific program in such state. As
such, Customer will pay to INSpire, upon the termination of a program in a
particular state pursuant to Section 7.1(d), the amount specified in this
subsection.
ARTICLE VIII.
REMEDIES AND LIMITATION OF LIABILITY
Section 8.1 Indemnification of the Parties. Each Party (the "Indemnitor") will
indemnify, defend, and hold harmless any other Party (the "Indemnitee") from and
against any arbitration award, claim, cost, damage, demand, expense, fine,
liability, lawsuit, obligation, payment or penalty of any kind or nature
whatsoever, including any reasonable attorneys' fees and expenses (a "Claim")
incurred by the Indemnitee that arises out of or directly relates to the
Indemnitor's performance or breach of this Agreement or any Service Addendum.
Any series of Claims incurred by an Indemnitee that arise out of or relate to a
common cause or occurrence will be deemed to be a single Claim for purposes of
this Agreement. Upon an Indemnitee's request, the Indemnitor will indemnify the
Indemnitee's directors, employees, officers, agents, attorneys, Representatives
and shareholders to the same extent as such Indemnitee. No such person, however,
will be a third party beneficiary of the indemnification provision set forth in
this Agreement. To the extent that an Indemnitee requests the Indemnitor to
indemnify such Party's directors, employees, officers, agents, attorneys,
Representatives and shareholders, the Indemnitee will cause such persons or
entities to comply with the indemnification provisions and abide by the
indemnification limitations set forth in this Agreement.
Section 8.2 Liability Limitation.
(a) Liability Limitation: Subject to subsection (b) below:
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(i) Deductible. No Party will be liable for any Claim for
damages or indemnification under this Agreement or any Service Addendum until
the aggregate amount of a Claim for damages and indemnification for which such
Party would otherwise be responsible exceeds $175,000 (such amount, the
"Deductible") and then such Party will only be responsible for the amount in
excess of the Deductible;
(ii) Single Claim Maximum Amount. No Party will be liable for
any Claim for damages or indemnification under this Agreement or any Service
Addendum to the extent that the amount of any single Claim paid by such Party
exceeds the aggregate amount of all the Addendum Services Fees paid by the
Customers to INSpire under all then-effective Service Addendums in the one month
immediately prior to the establishment of liability for such Claim (or the last
one month immediately prior to the expiration or termination of this Agreement
and all Service Addendums if applicable); and
(iii) Maximum Aggregate Amount. No Party will be liable for
any Claim for damages or indemnification under this Agreement or any Service
Addendum to the extent that the aggregate amount of all Claims paid by a Party
exceeds twenty percent of the aggregate amount of all the Addendum Services Fees
paid by the Customers to INSpire since the Addendum Effective Dates under all
Service Addendums prior to the establishment of liability for such Claims (or
prior to the expiration or termination of this Agreement and all Service
Addendums if applicable).
(b) Exclusions from Liability Limitation. Notwithstanding the
provisions of subsection (a) above, the limitations or exculpations of liability
set forth in subsection (a) above are not applicable to any Claim for damages or
indemnification under this Agreement or any Service Addendum resulting from (i)
a breach of Articles V or VI, (ii) the willful misconduct or fraud of a Party or
its Representatives, (iii) any violation, infringement or misappropriation of
any patent, copyright, trademark, trade secret or other proprietary or
contractual rights of a Party or any third party and or (iv) any payments
required, or any costs or expenses incurred, pursuant to Section 1.4(e), Section
4.9 and Section 4.10.
(c) Exclusion of Certain Types of Damages. No Party will be liable for
any consequential; incidental, punitive or special damages with respect to any
breach of this Agreement; provided, however, that this subsection will not limit
the amount of a Claim for indemnification (as opposed to a Claim for damages)
which is based on an amount paid by an Indemnitee to an unrelated third party
that contains consequential, incidental, punitive or special damages as a
component of such amount paid by the Indemnitee to the unrelated third party.
(d) Limitation Acknowledgment. Each Party expressly acknowledges that
the limitations set forth in this Section represent the express agreement of the
Parties with respect to the allocation of risks between the Parties, including
the level of risk to be associated with the performance of the Addendum Services
as related to the amount of the payments to be made to INSpire for such Addendum
Services, and each Party fully understands and irrevocably accepts such
limitations.
Section 8.3 Notice of Claim. Any award of damages or indemnification pursuant to
this Agreement is conditioned upon the Indemnitor having received full and
prompt notice in writing of the Claim and the Indemnitee allowing the Indemnitor
19
to direct fully the defense or settlement of such Claim; provided, however, that
the failure to receive prompt notice relieves the Indemnitor of its obligations
under this Article only if the Indemnitor is materially prejudiced by the
failure to receive such notice. The Indemnitor will not be responsible for any
settlement or compromise made without its consent.
ARTICLE IX.
ARBITRATION
Section 9.1 Condition Precedent. As a condition precedent to any right of action
hereunder, any dispute arising out of the interpretation, performance or breach
of this Agreement, including the formation or validity thereof, shall be
submitted for decision to a panel of three arbitrators. Notice requesting
arbitration will be in writing and sent certified or registered mail, return
receipt requested.
Section 9.2 Choosing the Arbitrators. One arbitrator shall be chosen by each
Party and the two arbitrators shall, before instituting the hearing, choose an
impartial third arbitrator who shall preside at the hearing. If either party
fails to appoint its arbitrator within thirty (30) days after being requested to
do so by the other party, the latter, after ten (10) days notice by certified or
registered mail of its intention to do so, may appoint the second arbitrator
If the two arbitrators are unable to agree upon the third arbitrator
within thirty (30) days of their appointment, the third arbitrator shall be
selected from a list of six individuals (three named by each arbitrator) by a
judge of the District court for the Northern District of Texas, Fort Worth
Division, or if the District Court declines to act, the state court having
general jurisdiction in such area.
Section 9.3 Procedure. Within thirty (30) days after notice of appointment of
all arbitrators, the panel shall meet and determine timely periods for briefs,
discovery procedures and schedules for hearings.
The panel shall be relieved of all judicial formality and shall not be
bound by the strict rules of procedure and evidence. Arbitration shall take
place in Fort Worth, Texas. Insofar as the arbitration panel looks to
substantive law, it shall consider the law of the State of Texas. The decision
of any two arbitrators when rendered in writing shall be final and binding. The
panel is empowered to grant interim relief as it may deem appropriate.
Section 9.4 Costs. Each party shall bear the expense of its own arbitrator and
shall jointly and equally bear with the other party the cost of the third
arbitrator. The remaining costs of the arbitration shall be allocated by the
panel. The panel may, at its discretion, award such further costs and expenses
as it considers appropriate, including but not limited to attorneys fees, to the
extent permitted by law.
ARTICLE X.
MISCELLANEOUS
Section 10.1 Amendment. No amendment of this Agreement will be effective unless
in a writing signed by the Parties.
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Section 10.2 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original agreement, but all
of which will constitute one and the same agreement.
Section 10.3 Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the Parties and supersedes all prior agreements and
understandings, both written and oral, with respect to the subject matter of
this Agreement.
Section 10.4 Expenses. Each Party will bear its own expenses with respect to the
negotiation and preparation of this Agreement.
Section 10.5 Governing Law. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE
STATE OF TEXAS REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER THE
CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE.
Section 10.6 No Assignment. No Party may assign its benefits or delegate its
duties (other than a delegation of minor or incidental tasks related to the
Addendum Services) under this Agreement without the prior consent of the other
effected Parties. Any attempted assignment or delegation without such prior
consent will be void. Notwithstanding the foregoing, any Party may assign its
rights or delegate its duties under this Agreement to a purchaser of all the
assets or equity of such Party without the other effected Party's consent, and
any such purchaser and any subsequent purchasers of all of the assets or equity
of such Party may similarly assign or delegate such rights.
Section 10.7 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the Parties and no other person or entity will have any right,
interest, or claim under this Agreement.
Section 10.8 Notices. All claims, consents, designations, notices, waivers, and
other communications in connection with this Agreement will be in writing. Such
claims, consents, designations, notices, waivers, and other communications will
be considered received (a) on the day of actual transmittal when transmitted by
facsimile with written confirmation of such transmittal, (b) on the next
following actual transmittal when transmitted by a nationally recognized
overnight courier, or (c) on the third Business Day following actual transmittal
when transmitted by certified mail, postage prepaid, return receipt requested;
in each case when transmitted to a Party at its address set forth below (or to
such other address to which such Party has notified the other Parties in
accordance with this Section to send such claims, consents, designations,
notices, waivers and other communications).
INSpire
Attn: President
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
21
Customer
Attn: Chief Executive Officer
The Millers American Group, Inc.
000 Xxxx xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Section 10.9 Public Announcements. The Parties will agree on the terms of any
press releases or other public announcements related to this Agreement, and will
consult with each other before issuing any press releases or other public
announcements related to this Agreement; provided, however, that any Party may
make a public disclosure if in the opinion of such Party's counsel it is
required by law or the rules of the NASDAQ National Market to make such
disclosure. The Parties agree, to the extent practicable, to consult with each
other regarding any such public announcement in advance thereof.
Section 10.10 Representation by Legal Counsel. Each Party is a sophisticated
entity that was advised by experienced legal counsel and other advisors in the
negotiation and preparation of this Agreement.
Section 10.11 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction will not invalidate the remaining
provisions of this Agreement or affect the validity or enforceability of such
provision in any other jurisdiction. In addition, any such prohibited or
unenforceable provision will be given effect to the extent possible in the
jurisdiction where such provision is prohibited or unenforceable.
Section 10.12 Successors. This Agreement will be binding upon and will inure to
the benefit of each Party and its heirs, legal representatives, permitted
assigns and successors, provided that this Section will not permit the
assignment or other transfer of this Agreement, whether by operation of law or
otherwise, if such assignment of other transfer is not otherwise permitted under
this Agreement.
Section 10.13 Time of the Essence. Time is of the essence in the performance of
this Agreement and all dates and periods specified in this Agreement.
Section 10.14 Waiver. No provision of this Agreement will be considered waived
unless such waiver is in writing and signed by the Party that benefits from the
enforcement of such provision. No waiver of any provision in this Agreement,
however, will be deemed a waiver of a subsequent breach of such provision or a
waiver of a similar provision. In addition, a waiver of any breach or a failure
to enforce any term or condition of this Agreement will not in any way affect,
limit, or waive a Party's rights under this Agreement at any time to enforce
strict compliance thereafter with every term and condition of this Agreement.
Section 10.15 Force Majeure. The Parties will not be liable or deemed to be in
default for any delay or failure in performance under this Agreement or
interruption of the Addendum Services resulting, directly or indirectly, from
22
acts of God, civil or military authority, labor disputes, shortages of suitable
materials, labor or transportation or any similar cause beyond the reasonable
control of the Parties.
Section 10.16 Attorney's Fees. In the event of any action, arbitration, claim,
proceeding or suit between or among the Parties seeking enforcement of any of
the terms and conditions of this Agreement, the prevailing party in such action,
arbitration, claim, proceeding or suit will be awarded its reasonable costs and
expenses, including its court costs and reasonable attorneys' fees.
Section 10.17 Relationship of the Parties. The Parties are independent
contractors of one another, and there should be no instance in which they should
be construed as partners or joint venturers.
Section 10.18 Drafting. Neither this Agreement nor any provision contained in
this Agreement will be interpreted in favor of or against any Party because such
Party or its legal counsel drafted this Agreement or such provision. No prior
draft of this Agreement or any provision contained in this Agreement will be
used when interpreting this Agreement or its provisions.
Section 10.19 Headings. Article and section headings are used in this Agreement
only as a matter of convenience and will not have any effect upon the
construction or interpretation of this Agreement.
23
IN WITNESS WHEREOF, each Party has caused this Agreement to be executed
and delivered by a duly authorized officer as of the Signing Date.
INSpire: INSpire Insurance Solutions, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxxx, President and
Chief Operating Officer
Customer: The Millers Insurance Company
By: /s/ Illegible Executive VP & CFO
----------------------------------------
[Name, Title]
The Millers Casualty Insurance Company
By: /s/ Illegible Executive VP & CFO
----------------------------------------
[Name, Title]
Millers General Agency, Inc.
By: /s/ Illegible Chief Financial Officer
----------------------------------------
[Name, Title]
24
APPENDIX A
DEFINITIONS AND INTERPRETATIONS
Definitions. Unless the context otherwise requires, the terms defined
in this Appendix will have the meanings specified below for all purposes of this
Agreement:
"Addendum Effective Date" will have the meaning established in
each applicable Service Addendum.
"Addendum Expiration Date" will have the meaning established
in each applicable Service Addendum.
"Addendum Implementation Period" will have the meaning
established in each applicable Service Addendum
"Addendum Service Fees" will have the meaning set forth in
Section 1.1(b), but will be established in each applicable Service Addendum.
"Addendum Services" will have the meaning set forth in Section
1.1(b), but will be established in each applicable Service Addendum.
"Addendum Term" will have the meaning set forth in Section
1.1(b), but will be established in each applicable Service Addendum.
"Additional Services" will have the meaning set forth in
Section 1.6(a).
"Affiliate" will mean with respect to a Party, any entity at
any time Controlling, Controlled by, under common Control with, or in the same
consolidated group for federal tax purposes as, such Party. "Control" and its
derivatives mean: (a) with regard to any entity, the legal, beneficial, or
equitable ownership, directly or indirectly, of more than fifty percent (50%) of
the capital stock (or other ownership interest, if not a corporation) of such
entity ordinarily having voting rights or (b) with regard to any entity, the
management control over such entity. For purposes of this Agreement, INSpire
will not be deemed to be an Affiliate of any Customer.
"Agreement" will mean have the meaning set forth in the first
paragraph of the Agreement.
"Bid" will have the meaning set forth in Section 1.6(a).
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York, New
York are authorized or obligated by law to close.
"Claim" will have the meaning set forth in Section 8.1.
"Competing Terms" will have the meaning set forth in Section
1.6(b).
1
"Confidential Information" will mean any information that is
expressly marked or identified as "Confidential" prior to its disclosure,
whether prepared by the Disclosing Party, its Representatives or otherwise,
which is furnished to the Receiving Party or on behalf of the Disclosing Party
after the date of this Agreement relating to the Disclosing Party or its
Affiliates or their respective businesses or operations. The term "Confidential
Information" does not include: (a) information which is or becomes generally
available to the public other than as a result of any unauthorized disclosure or
any wrongful acts of the Receiving Party; (b) information which is independently
developed by the Receiving Party without the use of or reference to Confidential
Information of the Disclosing Party; (c) information which is rightfully
received from a third party whose disclosure does not constitute a violation of
any confidentiality obligation or a breach of any agreement; or (d) information
which is approved for release by the Disclosing Party in a writing signed by the
Disclosing Party and specifying the information to be released.
"Contract Year" will mean, with respect to each Service
Addendum, each of the twelve month periods during the Addendum Term beginning on
the anniversary of the Addendum Effective Date (or the Addendum Effective Date
in the case of the first Contract Year of each Service Addendum) and ending on
the day immediately preceding the next anniversary of the Addendum Effective
Date.
"Customer" will have the meaning set forth in the first
paragraph of this Agreement, but will be established in each applicable Service
Addendum.
"Customer Group" will mean Customer, its Affiliates, any
parent corporation, subsidiaries and Representatives.
"Date Data" will mean any data, formula, algorithm, process,
input or output that includes, calculates or represents a date, a reference to a
date or a representation of a date.
"Deductible" will have the meaning set forth in Section
8.2(a).
"Designated Representative" will have the meaning set forth in
Section 4.1.
"Direct Written Premiums" will mean the premiums written by an
insurer in consideration for the insurance coverage being provided before ceding
to a reinsuer less any cancellations and returns.
"Disclosing Party" will mean Customer Group or INSpire Group,
as the case may be, with respect to any Confidential Information provided by
such party to any other party.
"Earned Premiums" will mean monthly Direct Written Premium,
plus beginning unearned premium, minus ending unearned premium.
"Equipment" will mean all the computer hardware, including
central processing units, networking equipment and other peripheral devices, of
the named entity that is used in connection with this Agreement, whether such
equipment is owned or licensed by such entity.
"Exercise Notice" will have the meaning set forth in Section
1.6(c).
2
"Indemnitor" will have the meaning set forth in Section 8.1.
"Indemnitee" will have the meaning set forth in Section 8.1.
"INSpire" will have the meaning set forth in the first
paragraph of this Agreement.
"INSpire Group" will mean INSpire, its Affiliates, any parent
corporation, subsidiaries and Representatives.
"Law" will have the meaning set forth in Section 2.4.
"Licensed Software" will mean any computer software program
(including the available documentation, manuals and other materials necessary
for the use thereof) used in connection with this Agreement by the named entity
pursuant to a license or other arrangement.
"Material Adverse Effect" will mean, with respect to any
Party, the occurrence of an event or the existence of a circumstance that has a
material adverse effect on such Party's assets, business, cash flows, financial
condition, liabilities, operations, prospects, or relationships, including the
occurrence of any event or the existence of any circumstance that will cause
such an effect in the foreseeable future.
"Monthly Service Report" will have the meaning set forth in
Section 4.2(a).
"Order" will have the meaning set forth in Section 2.4.
"Owned Software" will mean any computer software program used
in connection with this Agreement that is owned by the named entity, including
the available documentation, manuals and other materials necessary for the use
thereof.
"Party" and "Parties" will have the meanings set forth in the
first paragraph of this Agreement.
"Positive Pay" will mean a process by which a data file
containing information related to checks issued (i.e., check number, check date
and check amount) is created and forwarded to a banking institution. The banking
institution will use this file to verify all checks presented for payment prior
to paying any check. The banking institution will create a listing of items that
did not match or were otherwise not included in the data file, hereby referred
to as the exception list. The exception list is made available for research and
a resolution on whether the exception items presented should be paid or returned
unpaid. The aforementioned is done daily.
"Producer" will mean any person, entity, individual or
association that acts as an agent of, a broker for, or in any other similar
capacity on behalf of, a Customer for the solicitation and production of
insurance products.
"Receiving Party" will mean Customer Group or INSpire Group,
as the case may be, with respect to any Confidential Information received by
such party from any other party.
3
"Representative" will mean any director, officer, employee,
agent, attorney, accountant, advisor or other person acting on behalf of a Party
in connection with this Agreement; provided, however, "Representative" will not
include any person or entity which is a direct or indirect competitor of
INSpire.
"Service Correction" will mean a written request by Customer
to have INSpire remedy its System's inability to perform, respond, function or
operate as set forth in the applicable requirements document.
"Service Levels" will have the meaning set forth in Section
1.4(e).
"Signing Date" will have the meaning set forth in the first
paragraph of this Agreement.
"Software" will mean the Owned Software and Licensed Software
of the named entity.
"System Modification" will mean a written request by Customer
to alter programming code where such alteration to the coding specifically
changes, adds or otherwise alters the presentation or function of the existing
program with that being Customer's intent. Each Party acknowledges that a System
Modification is a separate and distinct concept from that concept embodied in
the definition of Service Correction.
"Systems" will mean the Equipment and Software of the named
entity.
"Termination Fee" will have the meaning set forth in Section
7.1(d).
"Year 2000 Compliant" will mean, with respect to the Systems of a
Party, (a) the functions, calculations, and other computing processes of the
System (collectively, "Processes") perform in a consistent manner regardless of
the date in time on which the Processes are actually performed and regardless of
the Date Data input to the System, whether before, on, during or after January
1, 2000 and whether or not the Date Data is affected by leap years, (b) the
System accepts, calculates, compares, sorts, extracts, sequences, and otherwise
processes Date Data, and returns and displays Date Data, in a consistent manner
regardless of the dates used in such Date Data, whether before, on, during or
after January 1, 2000, (c) the System will function without interruptions caused
by the date in time on which the Processes are actually performed or by the Date
Data input to the System, whether before, on, during, or after January 1, 2000,
(d) the System accepts and responds to two-digit year-date input in a manner
that resolves any ambiguities as to the century in a defined, pre-determined and
appropriate manner, (e) the System Stores and displays Date Data in ways that
are unambiguous as to the determinations of the century and (f) no Date Data
will cause the System to perform an abnormally ending routine or function within
the Processes or generate incorrect values of invalid results as a result of the
date element included in the Date Data.
Accounting Terms. Except as otherwise provided in this Agreement, all
accounting terms defined in this Agreement will be construed, and all
calculations required by this Agreement will be performed, in accordance with
generally accepted accounting principles applied on a consistent basis.
4
Articles, Sections, Exhibits and Schedules. Except as specifically
stated otherwise, references to Articles, Sections, Exhibits and Schedules refer
to the Articles, Sections, Exhibits and Schedules of this Agreement.
Drafting. Neither this Agreement nor any provision contained in this
Agreement will be interpreted in favor of or against any Party because such
Party or its legal counsel drafted this Agreement or such provision. No prior
draft of this Agreement or any provision contained in this Agreement will be
used when interpreting this Agreement or its provisions.
Headings. Article and section headings are used in this Agreement only
as a matter of convenience and will not have any effect upon the construction or
interpretation of this Agreement.
Include. The term "include" or any derivative of such term does not
mean that the terms following such term are the only types of such items.
Or. The term "or" will not be interpreted as excluding any of the items
described.
Plural and Singular Words. Whenever the plural form of a word is used
in this Agreement, that word will include the singular form of that word.
Whenever the singular form of a word is used in this Agreement, that word will
include the plural form of that word.
Pronouns. Whenever a pronoun of a particular gender is used in this
Agreement, if appropriate that pronoun also will refer to the other gender and
the neuter. Whenever a neuter pronoun is used in this Agreement, if appropriate
that pronoun also will refer to the masculine and feminine gender.
Statutes. Any reference to Law or any specific statute will include any
changes to such law or statute after the Signing Date, any successor law or
statute, and any regulations and rules promulgated under such law or statute and
any successor law or statute, whether promulgated before or after the Signing
Date.
5
EXHIBIT 1.1
FORM OF
SERVICE ADDENDUM
THIS SERVICE ADDENDUM IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THAT
CERTAIN MASTER SERVICES AGREEMENT DATED AUGUST __, 1999. A PARTY'S EXECUTION OF
A SERVICE ADDENDUM WILL BE DEEMED TO BE SUCH PARTY'S (I) ACKNOWLEDGEMENT AND
ACCEPTANCE OF THE TERMS AND CONDITIONS SET FORTH IN THE MASTER SERVICE AGREEMENT
AND (II) EXECUTION AND DELIVERY OF THE MASTER SERVICES AGREEMENT.
1. Date of this Addendum:
---------------------
[Insert the date of this Addendum.]
2. Parties to this Service Addendum:
--------------------------------
o INSpire Insurance Solutions, Inc. ("INSpire").
o [Insert the appropriate Millers' party/parties] ("Customer").
3. Addendum Term:
-------------
The term during which INSpire will provide the Addendum Services (as
defined below) to Customer will commence on [date] (the "Addendum
Effective Date") and will expire on [date] (as such date may be
extended pursuant to this paragraph, the "Addendum Expiration Date")
unless extended pursuant to the terms of this paragraph or terminated
pursuant to the terms of the Agreement (the "Addendum Term"). The
Addendum Expiration Date will be extended automatically for a period of
one (1) year unless the parties to this Service Addendum gives written
notice of non-extension to the other effected party or parties at least
six (6) months prior to the then current Addendum Expiration Date.
4. Addendum Services; Lines of Business; Authorized States
-------------------------------------------------------
a. [Policy/Claims] Administration Services. Except as
specifically noted in this Section 4.a, INSpire will provide the
[policy/claims] administration services set forth in Section
1.1[(c)/(d)] of the Agreement and the general management of such
services:
[INSERT ANY ADDITIONS TO, OR EXCLUSIONS FROM, THE
[POLICY/CLAIMS] ADMINISTRATION SERVICES SPECIFIED IN SECTION
1.1(c) OF THE AGREEMENT.]
b. Authorized Lines of Business: [insert lines of business]
c. Authorized States: [insert states]
1
5. Addendum Service Fees:
---------------------
[Insert the service fees for the services to be provided pursuant to
this Addendum].
IN WITNESS WHEREOF, each party to this Service Addendum has caused this
Service Addendum to be executed and delivered by a duly authorized officers as
of the date written above.
INSpire: INSpire Insurance Solutions, Inc.
By:
---------------------------------------
Xxxxxxx X. Xxxxxxxx, President and Chief Operating Officer
Customer: [insert a signature block for each applicable Millers entity]
By:
------------------------------------------
[Name, Title]
2
SERVICE ADDENDUMS
[See attached]
SCHEDULE 1.4(e)
Service Levels
The following definitions apply to the documentation titled Schedule 1.1e:
Service Level Description:
Description of service level being measured.
Measurement:
Performance of service level required for determination of performance
score only applies to business processed on INSpire Systems.
Daily Factor:
Based on frequency of requirement for this service level or on
frequency of interface availability as appropriate. The daily factor
will be based on Monday through Friday and be assigned a daily factor
of 5%. If the service level is not measured the value of N/A (not
applicable) is present.
Weight:
Weighting factor used to determine relative impact on respective
service level standards.
Monthly Rating:
The purpose of the monthly rating is to develop an aggregate score for
measuring INSpire's performance as it relates to agreed upon service
levels. The aggregate score will be used to determine, in aggregate if
INSpire's performance will result in additional or reduced service fees
for the month.
The methodology used to determine the aggregate score is to determine,
for each measurement, whether or not INSpire met the desired service
level, exceeded the service level or fell below the service level. For
example, the service level average hold time is 60 seconds. Each day
the average hold time is 60 seconds, INSpire will have met the service
level. If the average hold time is greater than 60 seconds due to a
reason resulting from a direct omission or commission on the part of
INSpire, INSpire will have fallen below the service level. If the
average hold time is less than 60 seconds, INSpire will have exceeded
the service level.
Every time, (daily in this example) that INSpire meets the service
level, a score of one (1) is earned. If the service level is not met
for a reason that INSpire is responsible for, a score of zero (0) is
earned. If the service level is not met, but not due to a reason that
INSpire is responsible for, a score of one (1) is earned. Should the
1
service level be exceeded, INSpire will earn a score of two (2). The
following provides an example of one (1) month results:
DAY RESULT SCORE
1 Met SLA 1
2 Met SLA 1
3 Met SLA 1
4 Below SLA 0
5 Met SLA 1
6 Met SLA 1
7 Exceed SLA 2
8 Met SLA 1
9 Met SLA 1
10 Met SLA 1
11 Met SLA 1
12 Met SLA 1
13 Exceed SLA 2
14 Met SLA 1
15 Met SLA 1
16 Met SLA 1
17 Below SLA 0
18 Met SLA 1
19 Met SLA 1
20 Met SLA 1
--
TOTAL SCORE 20
The total score for the SLA is then divided by the number of times the
SLA is applicable for the month. In this case 20/20=1, for a score of
100% for this SLA. The individual score is then multiplied by the
weighing factor of %, resulting in a weighed score, in this example, of
5%.
At the end of each month, a weighed score using the same methodology
will be used to determine an aggregate score. The aggregate score of
each individual SLA will be added together. INSpire and the Customer
will mutually agree upon aggregate scores each month.
If the aggregate score is between 100% and 95%, no adjustment to the
service fees will be made. For every percentage point above 100%,
INSpire will receive an additional .5% in service fees subject to a
maximum of 5%. For every percentage point below 95%, the monthly
service fee will be reduced by .5%, subject to a maximum of 5%.
Service fees subject to this provision include only those fees
indicated for policy and claims administration.
2
Service Level Descriptions Measurement Daily Factor Weighing Factor
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Call Center Availability Available between 8:00 a.m. until 5:30 p.m., Monday-Friday,
local time, utilizing toll free service. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Call Center Response Time Average hold time will not exceed 60 seconds. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Call Center Abandonment No more than 5% of calls will be abandoned. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Major Error Rate Transactions will be processed with a Major Error rate
(defined as those errors effecting coverage or premium) 5% 4.76%
of less than 3%.
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Overall Error Rate Transactions will be processed with an Overall Error
rate of less than 6%. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
New Policy Transactions 90% of all new policies will be issued within three
business days of receipt of all of the information necessary 5% 4.76%
to process the transaction.
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Renewal Transactions 95% of all renewal transactions will be processed 30 days
(or the number of days agreed to by Customer and INSpire) 5% 4.76%
prior to expiration of the policy. Renewals not processed
at the request of the customer due to pending rate
changes will not be included in this measurement.
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Endorsement Transactions 90% of all endorsement transactions will be issued within 5% 4.76%
six business days of receipt all the information necessary
to process the transaction.
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Billing Invoices 95% of all billing invoices will be mailed by the end of 5% 4.76%
the business day in which they are produced.
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Refunds 95% of premium refunds will be mailed by the end of the
business day in which they are produced. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Cancellation Notices 99.9% of all cancellation notices will be mailed by the end
of the business day in which they are produced. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Non-renewal Notices 99.9% of all non-renewal notices will be mailed by the end
of the business day in which they are produced. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Loss Reporting Loss reports will be taken 24 hours a day, 7 days a week
utilizing toll free service. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
3
Claim Payments 90% of claim payments will be sent within two business days
after settlement and notification to INSpire by the Customer. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Table Change Updates 80% of customer requested modifications requiring table
updates only, will be delivered for testing within fifteen 5% 4.76%
working days after written request.
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Modification Estimates High level time and cost estimates for Customer requested
system program modifications will be completed within 10 5% 4.76%
working days after written request.
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Cash Deposits 95% of all cash will be deposited within 2 business days of
receipt. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Claims Contact to Insureds 85% of claimants contacted within 1 business day. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Claims Reserve Setup 90% of claims reserves will be setup within 2 business days. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
NSF Posting 99.9% of all NSF checks will be posted into the system within
2 business days. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
Stop Payment of Checks 99.9% of all requests for stop payment to the bank will be
posted to the proper bank account. 5% 4.76%
-------------------------------------- -------------------------------------------------------------- ------------- ---------------
4
SERVICE ADDENDUM 1.1.1
MILLERS IN-HOUSE POLICY PROCESSING
THIS SERVICE ADDENDUM IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
IN THAT CERTAIN MASTER SERVICES AGREEMENT DATED AUGUST __, 1999 (THE
"AGREEMENT"). A PARTY'S EXECUTION OF A SERVICE ADDENDUM WILL BE DEEMED
TO BE SUCH PARTY'S (I) ACKNOWLEDGMENT AND ACCEPTANCE OF THE TERMS AND
CONDITIONS SET FORTH IN THE AGREEMENT AND (II) EXECUTION AND DELIVERY
OF THE AGREEMENT.
1. Date of this Addendum:
---------------------
October 1, 1997
2. Parties to this Service Addendum:
--------------------------------
o INSpire Insurance Solutions, Inc. ("INSpire")
o The Millers Insurance Company and The Millers
Casualty Insurance Company (together, "Customer").
3. Addendum Term:
-------------
The term during which INSpire will provide the Addendum
Services (as defined below) to Customer will commence on
October 1, 1997 (the "Addendum Effective Date") and will
expire on December 31, 2004 (as such date may be extended
pursuant to this paragraph, the "Addendum Expiration Date")
unless extended pursuant to the terms of this paragraph or
terminated pursuant to the terms of the Agreement (the
"Addendum Term"). The Addendum Expiration Date will be
extended automatically for an additional term or terms of 12
months unless a party to this Service Addendum gives written
notice of non-extension to the other effected party or parties
at least six months prior to the then current Addendum
Expiration Date.
4. Addendum Services; Lines of Business; Authorized States;
Programs:
a. Policy Administration Services. Except as
specifically noted in this Section 4.a, INSpire will
provide the policy claims services set forth in
Section 1.1(c) of the Agreement and the general
management of such services:
b. Authorized Lines of Business:
(1) Personal Lines. Automobile, Dwelling Fire,
Homeowners, Inland Marine, Non-Standard Auto, Umbrella.
1
(2) AgriBusiness. Policies underwritten by the
AgriBusiness Department of Customer.
c. Authorized States: Alabama, Idaho, Louisiana, New
Mexico, Oregon and Texas and such other jurisdictions
as the parties may from time to time agree upon.
d. Programs: AgriBusiness; Network Insurance Agents in
California; Non Standard Auto in New Mexico and
Alabama; Standard Auto/Homeowners/Bonds in Alabama,
Idaho, New Mexico and Texas.
e. Location of Provision of Addendum Services: INSpire
will provide the Addendum Services at an INSpire
service center designated by INSpire.
5. Addendum Service Fees:
---------------------
a. Consultants: $125.00 per hour
b. Programmers: $125.00 per hour
c. Policy Administration Services: $6.68 per month,
per in-force policy. Policy administration fees are subject to
a minimum of $100,000 per month, during which services are
provided. Effective January 1, 2000, the administration fees
are subject to a minimum of $30,000 per month. In lieu of all
other fees listed in this Policy Administration Services
section of Section 5, Customer agrees to pay, with regard to
the AgriBusiness program, a monthly service fee to INSpire of
0.5% of the in-force premium on said policies, but subject to
a minimum monthly fee of $28,000 for so long as Customer has
any in-force premium on said policies. At such time as there
is no in-force premium on said policies INSpire will have no
obligations with respect to said policies.
d. Special Fees: When requested and authorized by
Customer, processing system modifications will be charged to
Customer, on a time and materials basis utilizing the
appropriate mix of service personnel required to perform the
modifications. Hourly rates for such personnel are listed
above.
e. Travel: Customer will reimburse INSpire for all
travel requested by Customer in connection with the work
performed under this Service Addendum.
IN WITNESS WHEREOF, each party to this Service Addendum has
caused this Service Addendum to be executed and delivered by a duly
authorized officer as of the date written above.
2
INSpire: INSpire Insurance Solutions, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxxxx, President and Chief
Operating Officer
Customer: The Millers Insurance Company
By: /s/ Illegible Executive VP & CFO
--------------------------------------------------
[Name, Title]
The Millers Casualty Insurance Company
By: /s/ Illegible Executive VP & CFO
-------------------------------------------------
[Name, Title]
3
SERVICE ADDENDUM 1.1.2
MILLERS POLICY ADMINISTRATION-HOMEOWNERS
THIS SERVICE ADDENDUM IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
IN THAT CERTAIN MASTER SERVICES AGREEMENT DATED AUGUST __, 1999 (THE
"AGREEMENT"). A PARTY'S EXECUTION OF A SERVICE ADDENDUM WILL BE DEEMED
TO BE SUCH PARTY'S (I) ACKNOWLEDGMENT AND ACCEPTANCE OF THE TERMS AND
CONDITIONS SET FORTH IN THE AGREEMENT AND (II) EXECUTION AND DELIVERY
OF THE AGREEMENT.
1. Date of this Addendum:
---------------------
May 1, 1997
2. Parties to this Service Addendum:
--------------------------------
o INSpire Insurance Solutions, Inc. ("INSpire")
o The Millers Insurance Company and The Millers
Casualty Insurance Company (together, "Customer").
3. Addendum Term:
-------------
The term during which INSpire will provide the Addendum
Services (as defined below) to Customer will commence on May
1, 1997 (the "Addendum Effective Date") and will expire on
December 31, 2004 (as such date may be extended pursuant to
this paragraph, the "Addendum Expiration Date") unless
extended pursuant to the terms of this paragraph or terminated
pursuant to the terms of the Agreement (the "Addendum Term").
The Addendum Expiration Date will be extended automatically
for an additional term or terms of 36 months unless a party to
this Service Addendum gives written notice of non-extension to
the other effected party or parties at least six months prior
to the then current Addendum Expiration Date.
4. Addendum Services; Lines of Business; Authorized States;
Programs:
a. Except as specifically noted in this Section
4.a, INSpire will provide the policy
administration services set forth in Section
1.1(c) of the Agreement and the general
management of such services:
Including agency xxxx
x. Authorized Lines of Business: Homeowners
(HO3).
1
c. Authorized States: Florida, Nevada
d. Programs: EWB, Harbor
e. Location of Provision of Addendum Services:
INSpire will provide the Addendum Services
at an INSpire service center.
5. Addendum Service Fees:
---------------------
a. Consultants: $125.00 per hour
b. Programmers: $125.00 per hour
c. Policy Administration Services: 6.25% of Direct
Written Premium subject to a $56.00 per policy minimum. At the
end of each month, beginning on the effective date hereof, an
adjustment will be made if the number of policies issued
multiplied by the per policy minimum exceed 6.25% of direct
written premium for the same period.
d. Billing Fees: Installment fees will be retained by
INSpire.
e. Special Fees: Processing system modifications will
be charged to Customer on a time and materials basis utilizing
the appropriate mix of service personnel required to perform
the modification. Additional reports or modifications to
agreed upon reports will also be charged to Customer on a time
and material basis utilizing the appropriate mix of service
personnel required to perform the modifications or produce new
reports. Hourly rates for such personnel are listed above.
f. Travel: Customer will reimburse INSpire for all
travel requested by Customer in connection with the work
performed under this Service Addendum.
IN WITNESS WHEREOF, each party to this Service Addendum has
caused this Service Addendum to be executed and delivered by a duly
authorized officer as of the date written above.
INSpire: INSpire Insurance Solutions, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxxxxx, President and Chief Operating
Officer
2
Customer: The Millers Insurance Company
By: /s/ Illegible Executive VP & CFO
--------------------------------------------------
[Name, Title]
The Millers Casualty Insurance Company
By: /s/ Illegible Executive VP & CFO
-------------------------------------------------
[Name, Title]
3
SERVICE ADDENDUM 1.1.3
MILLERS CLAIMS ADMINISTRATION
THIS SERVICE ADDENDUM IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
IN THAT CERTAIN MASTER SERVICES AGREEMENT DATED AUGUST __, 1999 (THE
"AGREEMENT"). A PARTY'S EXECUTION OF A SERVICE ADDENDUM WILL BE DEEMED
TO BE SUCH PARTY'S (I) ACKNOWLEDGMENT AND ACCEPTANCE OF THE TERMS AND
CONDITIONS SET FORTH IN THE AGREEMENT AND (II) EXECUTION AND DELIVERY
OF THE AGREEMENT.
1. Date of this Addendum:
---------------------
October 1, 1997
2. Parties to this Service Addendum:
--------------------------------
o INSpire Insurance Solutions, Inc. ("INSpire")
o The Millers Insurance Company and The Millers
Casualty Insurance Company (together, "Customer").
3. Addendum Term:
-------------
The term during which INSpire will provide the Addendum
Services (as defined below) to Customer will commence on
October 1, 1997 (the "Addendum Effective Date") and will
expire on December 31, 2004 (as such date may be extended
pursuant to this paragraph, the "Addendum Expiration Date")
unless extended pursuant to the terms of this paragraph or
terminated pursuant to the terms of the Agreement (the
"Addendum Term"). The Addendum Expiration Date will be
extended automatically for an additional term or terms of 36
months unless a party to this Service Addendum gives written
notice of non-extension to the other effected party or parties
at least six months prior to the then current Addendum
Expiration Date.
4. Addendum Services; Lines of Business; Authorized States;
Programs:
a. Except as specifically noted in this Section 4.a,
INSpire will provide the claims administration services set
forth in Section 1.1(d) of the Agreement and the general
management of such services:
b. Authorized Lines of Business: Private Passenger
Automobile, Homeowners, Commercial Casualty Multi-Peril,
Commercial Property, Farm-owners, Umbrella.
1
c. Authorized States:
Alabama Louisiana Oklahoma
Connecticut Delaware Georgia
Maine Maryland New Hampshire
New Jersey New York Vermont
Virginia Pennsylvania West Virginia
Arizona Michigan Oregon
Arkansas Minnesota South Carolina
California Mississippi South Dakota
Colorado Missouri Tennessee
Florida Montana Texas
Idaho Nebraska Utah
Illinois Nevada Washington
Indiana New Mexico Wisconsin
Iowa North Carolina Wyoming
Kansas North Dakota
Kentucky Ohio
d. Programs: Millers, Suncoast, Lane, Pinnacle, WE
Love
e. Location of Provision of Addendum Services:
INSpire will provide the Addendum Services at an INSpire
service center.
5. Addendum Service Fees:
---------------------
a. Consultants: $125.00 per hour
b. Programmers: $125.00 per hour
c. Claims Administration Services: Prior to January
1, 2000 for all programs and January 1, 2000 and later for any
discontinued programs, fees will be based on a charge per
claim as defined below. A claim is defined as an open feature
as shown below. Monthly maintenance fees are for claims open
greater than 31 days at each month end. Customer will not be
responsible for any of the fees set forth below that are
incurred in connection with a claim opened in error.
2
Feature Claim Fee Monthly Fee
Auto BI/UM $450 $100
Auto Non-BI/UM $250 $50
Auto First Party $150 $50
Homeowners $600 $60
Commercial Property $700 $70
Commercial Casualty $1,000 $100
Effective January 1, 2000, all programs other than
discontinued programs will be charged at the following rates:
Line of Business Percent of Earned Premium
Residential Property 7.0%
Personal Auto 7.5%
Commercial Lines 9.5%
Other Fees:
----------
Subrogation 25% of recoveries
Salvage 15% of recoveries
SIU Services $60.00/hr. plus outside fees
Homeowner, Commercial Property and Commercial Casualty claims
with an incurred loss greater than $100,000 will be billed at
"time and expense," rather than the rates shown on the above
schedule. "Time and expense" is defined as $60.00 per hour
plus any outside adjusting fees.
d. Expenses Excluded: Legal, Reconstruction Experts,
Agronomist and Engineers.
e. Special Fees: Claim system modifications requested
and approved by Customer will be charged to Customer on a time
and materials basis utilizing the appropriate mix of service
personnel required to perform the modification. Additional
reports not currently being provided pursuant to this Service
Addendum or modifications to agreed upon reports currently
being provided pursuant to this Service Addendum will also be
charged to Customer on a time and materials basis utilizing
the appropriate mix of service personnel required to perform
the modifications or produce new reports. Hourly rates for
such personnel are listed above.
3
IN WITNESS WHEREOF, each party to this Service Addendum has
caused this Service Addendum to be executed and delivered by a duly
authorized officer as of the date written above.
INSpire: INSpire Insurance Solutions, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxxxxx, President and Chief
Operating Officer
Customer: The Millers Insurance Company
By: /s/ Illegible Executive VP & CFO
--------------------------------------------------
[Name, Title]
The Millers Casualty Insurance Company
By: /s/ Illegible Executive VP & CFO
--------------------------------------------------
[Name, Title]
4
SERVICE ADDENDUM 1.1.4
MILLERS CLAIMS ADMINISTRATION-HOMEOWNERS
THIS SERVICE ADDENDUM IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
IN THAT CERTAIN MASTER SERVICES AGREEMENT DATED AUGUST __, 1999 (THE
"AGREEMENT"). A PARTY'S EXECUTION OF A SERVICE ADDENDUM WILL BE DEEMED
TO BE SUCH PARTY'S (I) ACKNOWLEDGMENT AND ACCEPTANCE OF THE TERMS AND
CONDITIONS SET FORTH IN THE AGREEMENT AND (II) EXECUTION AND DELIVERY
OF THE AGREEMENT.
1. Date of this Addendum:
---------------------
June 1, 1997
2. Parties to this Service Addendum:
--------------------------------
o INSpire Insurance Solutions, Inc. ("INSpire")
o The Millers Insurance Company and The Millers
Casualty Insurance Company (together, "Customer").
3. Addendum Term:
-------------
The term during which INSpire will provide the Addendum
Services (as defined below) to Customer will commence on June
1, 1997 (the "Addendum Effective Date") and will expire on
December 31, 2004 (as such date may be extended pursuant to
this paragraph, the "Addendum Expiration Date") unless
extended pursuant to the terms of this paragraph or terminated
pursuant to the terms of the Agreement (the "Addendum Term").
The Addendum Expiration Date will be extended automatically
for an additional term or terms of 36 months unless a party to
this Service Addendum gives written notice of non-extension to
the other effected party or parties at least six months prior
to the then current Addendum Expiration Date.
4. Addendum Services; Lines of Business; Authorized States;
Programs:
a. Except as specifically noted in this Section
4.a, INSpire will provide the policy
administration services set forth in Section
1.1(d) of the Agreement and the general
management of such services:
b. Authorized Lines of Business: Homeowners
(HO3).
c. Authorized States: Florida, Nevada
1
d. Programs: EWB, Harbor
e. Location of Provision of Addendum Services:
INSpire will provide the Addendum Services
at an INSpire service center.
5. Addendum Service Fees:
---------------------
a. Consultants: $125.00 per hour
b. Programmers: $125.00 per hour
c. Claims Life Cycle Services: Fees will be based
upon 7% of earned premium for non-catastrophe claims and 5% of
incurred loss for catastrophe claims.
e. Special Fees: Claim system modifications will be
charged to Customer on a time and materials basis utilizing
the appropriate mix of service personnel required to perform
the modification. Additional reports or modifications to
agreed upon reports will also be charged to Customer on a time
and material basis utilizing the appropriate mix of service
personnel required to perform the modifications or produce new
reports. Hourly rates for such personnel are listed above.
Legal expenses are excluded from all fees and will be passed
through to Customer.
Gross direct earned premium for the billing month and incurred
catastrophe loss, if any, will be the basis of fees for that
month.
IN WITNESS WHEREOF, each party to this Service Addendum has
caused this Service Addendum to be executed and delivered by a duly
authorized officer as of the date written above.
INSpire: INSpire Insurance Solutions, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxxxxx, President and Chief Operating
Officer
2
Customer: The Millers Insurance Company
By:
--------------------------------------------------
[Name, Title]
The Millers Casualty Insurance Company
By:
--------------------------------------------------
[Name, Title]
3
SERVICE ADDENDUM 1.1.5
MILLERS MGA-IT
THIS SERVICE ADDENDUM IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THAT
CERTAIN MASTER SERVICES AGREEMENT DATED AUGUST ___, 1999 (THE "AGREEMENT"). A
PARTY'S EXECUTION OF A SERVICE ADDENDUM WILL BE DEEMED TO BE SUCH PARTY'S (I)
ACKNOWLEDGEMENT AND ACCEPTANCE OF THE TERMS AND CONDITIONS SET FORTH IN THE
AGREEMENT AND (II) EXECUTION AND DELIVERY OF THE AGREEMENT.
1. Date of this Addendum:
----------------------
January 1, 1998
2. Parties to this Service Addendum:
o INSpire Insurance Solutions, Inc. ("INSpire")
x Xxxxxx'x General Agency, Inc. ("Customer")
3. Addendum Term:
-------------
The term during which INSpire will provide the Addendum
Services (as defined below) to Customer will commence on
January 1, 1998 (the "Addendum Effective Date") and will
expire on December 31, 2004 (as such date may be extended
pursuant to this paragraph, the "Addendum Expiration Date")
unless extended pursuant to the terms of this paragraph or
terminated pursuant to the terms of the Agreement (the
"Addendum Term"). The Addendum Expiration Date will be
extended automatically for an additional term or terms of 12
months unless a party to this Service Addendum gives written
notice of non-extension to the other effected party or parties
at least six months prior to the then current Addendum
Expiration Date.
4. Addendum Term:
-------------
a. During the term of this Agreement, INSpire will
provide the Technical Services defined below for the Lines of
Business (Section 4.c below) for the States specified (Section
4.d below) written by or through Customer. INSpire will, in
accordance with guidance and direction provided by Customer,
provide all Technical Services and general management of such
services for the subject business as follows:
(1) INSpire will provide implementation and customization of the
Windows for Property Casualty Base system.
1
(2) INSpire will provide nightly data processing services for each
business day and a monthly run per Customer's schedule.
(3) INSpire will provide 24 hour toll free help-desk support.
(4) INSpire will provide Customer access to the system from 7:00
A.M. to 7:00 P.M. C.S.T. daily.
(5) The printing of all data center generated output.
(6) Maintenance of the system.
(7) Non-code change customizations, as may be required by
Customer.
(8) System code modifications and enhancements as may be required
by Customer at the rates specified in Section F below.
(9) Preparation of a magnetic tape of commission data for Customer
to prepare Federal 1099 tax statements for commissions paid to
agents.
(10) Information and statistical data (i) required by Insurance
Services Office, (ii) necessary for Customer to prepare any
reports required by the National Association of Insurance
Commissioners, and (iii) required by Texas Insurance Checking
Office.
(11) Includes agency xxxx
x. Authorized Companies: The Millers Insurance Company and The
Millers Casualty Insurance Company.
c. Authorized Lines of Business: Commercial Property, General
Liability, Inland Marine, Crime, Auto, Garage, TX Commercial Property,
TX EEP, TX Glass, TX Auto, TX Garage, BOP/CAP, Truckers, TX ISO
Property, Workers Comp, Umbrella, ISO Package, TX Package, TX ISO
Package
d. Authorized States:
Alabama Louisiana Oklahoma
Arizona Michigan Oregon
Arkansas Minnesota South Carolina
California Mississippi South Dakota
Colorado Missouri Tennessee
Florida Montana Texas
Idaho Nebraska Utah
Illinois Nevada Washington
Indiana New Mexico Wisconsin
Iowa North Carolina Wyoming
Kansas North Dakota
Kentucky Ohio
2
e. Location of Provision of Addendum Services: INSpire will
provide the Addendum Services at an INSpire service center.
5. Addendum Services Fees:
----------------------
a. Consultants: $130.00 per hour
b. Programmers: $130.00 per hour
c. Technical Services:
Monthly Premium* Fee**
--------------- ---
$0 - 4,000,000 3.00%
$4,000,001-8,000,000 2.50%
Above $8,000,000 2.00%
* Gross Written Direct Premium
** Percent of Gross Written Direct Premium
Technical service fees are to be inclusive of any Texas state
sales tax that would result from these services.
d. Special Fees: When requested and authorized by
Customer, processing system modifications will be charged to
Customer on a time and materials basis utilizing the
appropriate mix of service personnel required to perform the
modifications. Hourly rates for such personnel are listed
above.
e. Travel: Customer will reimburse INSpire for all
travel requested by Customer in connection with the work
performed under this Service Addendum.
f. Implementation: $250,000 for the Implementation of
the Windows for Property and Casualty Base system.
Implementation will include table customization as required by
Customer. Additional programming, if any, will be provided on
a time and material basis at the hourly rates listed above. No
programming will commence without prior approval by Customer.
3
IN WITNESS WHEREOF, each party to this Service Addendum has
caused this Service Addendum to be executed and delivered by a duly
authorized officer as of the date written above.
INSpire: INSpire Insurance Solutions, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------------------
Xxxxxxx X. Xxxxxxxx, President and Chief Operating
Officer
Customer: Millers General Agency, Inc.
By: /s/ Illegible CFO
-------------------------------------------------
[Name, Title]
4
SERVICE ADDENDUM 1.1.6
IT SERVICE
THIS SERVICE ADDENDUM IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
IN THAT CERTAIN MASTER SERVICES AGREEMENT DATED AUGUST __, 1999 (THE
"AGREEMENT"). A PARTY'S EXECUTION OF A SERVICE ADDENDUM WILL BE DEEMED
TO BE SUCH PARTY'S (I) ACKNOWLEDGMENT AND ACCEPTANCE OF THE TERMS AND
CONDITIONS SET FORTH IN THE AGREEMENT AND (II) EXECUTION AND DELIVERY
OF THE AGREEMENT.
1. Date of this Addendum:
---------------------
July 1, 1997
2. Parties to this Service Addendum:
--------------------------------
o INSpire Insurance Solutions, Inc. ("INSpire")
o The Millers Insurance Company and The Millers
Casualty Insurance Company (together, "Customer").
3. Addendum Term:
-------------
The term during which INSpire will provide the Addendum
Services (as defined below) to Customer will commence on July
1, 1997 (the "Addendum Effective Date") and will expire on
December 31, 2004 (as such date may be extended pursuant to
this paragraph, the "Addendum Expiration Date") unless
extended pursuant to the terms of this paragraph or terminated
pursuant to the terms of the Agreement (the "Addendum Term").
The Addendum Expiration Date will be extended automatically
for subsequent one year periods unless a party to this Service
Addendum gives written notice of non-extension to the other
effected party or parties at least 60 days prior to the then
current Addendum Expiration Date.
4. Addendum Services; Lines of Business; Authorized States;
Programs:
INSpire will provide information system services for and on
behalf of Customer which will include, but will not be limited
to:
(a) telecommunications services (such services to be
eliminated in the event Customer moves from its current
location);
(b) hardware services;
(c) application software services;
1
(d) system software services;
(e) network services;
(f) system integration services.
5. Addendum Service Fees:
---------------------
The compensation due INSpire from Customer for the Addendum
Services is as follows:
Category A*, *** Category B**, *** ***
--------------------------- ------------------------ ------------------------ ---------------------
Calendar Year Percent of Direct Percent of Net Monthly
Written Premium Written Premium Minimum
--------------------------- ------------------------ ------------------------ ---------------------
1997 6.0% 6.0% $375,000
--------------------------- ------------------------ ------------------------ ---------------------
1998 5.5% 5.5% $300,000
--------------------------- ------------------------ ------------------------ ---------------------
1999 5.0% 5.0% $275,000
--------------------------- ------------------------ ------------------------ ---------------------
2000-2001 4.0% 4.0% $208,333
--------------------------- ------------------------ ------------------------ ---------------------
2002-2003 3.5% 3.5% $166,667
--------------------------- ------------------------ ------------------------ ---------------------
2004 2.5% 2.5% $125,000
--------------------------- ------------------------ ------------------------ ---------------------
* Category A represents premiums written by Customer
for which Customer utilizes the Addendum Services to
process policies and/or claims.
** Category B represents premiums written by Customer
for which Customer utilizes the Addendum Services to
process management and bureau report processing only.
*** The Service Fees associated with telecommunications
services will be eliminated in the event Customer
moves from its current location;
At the request and approval of Customer, INSpire will make
Systems Modifications to INSpire supplied application
software. Work will be done at a rate of $130.00 per hour.
Cost for any modifications required by Customer of application
software licensed by Customer from sources other than INSpire
will be the responsibility of Customer. Service Corrections
will not be billed to Customer.
INSpire will xxxx Customer monthly for services within 15 days
after the end of each calendar month during the Addendum Term.
Payment will be made by Customer within 30 days after the
delivery of such invoice.
Any amount owing from Customer to INSpire that has not been
paid by the due date will be subject to a late payment charge
of 1% per month.
2
IN WITNESS WHEREOF, each party to this Service Addendum has
caused this Service Addendum to be executed and delivered by a duly
authorized officer as of the date written above.
INSpire: INSpire Insurance Solutions, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxxxxx, President and Chief Operating
Officer
Customer: The Millers Insurance Company
By: /s/ Illegible Executive VP & CFO
--------------------------------------------------
[Name, Title]
The Millers Casualty Insurance Company
By: /s/ Illegible Executive VP & CFO
-------------------------------------------------
[Name, Title]
3
SERVICE ADDENDUM 1.1.7
MILLERS--NOBEL
THIS SERVICE ADDENDUM IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
IN THAT CERTAIN MASTER SERVICES AGREEMENT DATED AUGUST __, 1999 (THE
"AGREEMENT"). A PARTY'S EXECUTION OF A SERVICE ADDENDUM WILL BE DEEMED
TO BE SUCH PARTY'S (I) ACKNOWLEDGMENT AND ACCEPTANCE OF THE TERMS AND
CONDITIONS SET FORTH IN THE AGREEMENT AND (II) EXECUTION AND DELIVERY
OF THE AGREEMENT.
1. Date of this Addendum:
---------------------
July 1, 1999
2. Parties to this Service Addendum:
--------------------------------
o INSpire Insurance Solutions, Inc. ("INSpire")
o Policies Assumed from Nobel Insurance Company
("Customer").
3. Addendum Term:
-------------
The term during which INSpire will provide the Addendum
Services (as defined below) to Customer will commence on July
1, 1999 (the "Addendum Effective Date") and will expire on
December 31, 2004 (as such date may be extended pursuant to
this paragraph, the "Addendum Expiration Date") unless
extended pursuant to the terms of this paragraph or terminated
pursuant to the terms of the Agreement (the "Addendum Term").
The Addendum Expiration Date will be extended automatically
for an additional term or terms of 12 months unless a party to
this Service Addendum gives written notice of non-extension to
the other effected party or parties at least six months prior
to the then current Addendum Expiration Date.
The "Addendum Implementation Period" will commence on the
Addendum Effective Date and will terminate upon completing the
implementation of INSpire's processes and Systems and
completing the conversion of Customer's data to INSpire's
Systems. During the Addendum Implementation Period, (i)
INSpire will prepare an analysis of the lines of business
included within the terms of this Service Addendum, (ii)
Customer will reasonably assist INSpire with the gathering of
appropriate data, information, background, and other facts
necessary to enable INSpire to perform the Addendum Services
and (iii) INSpire will design, procure and implement all
Systems and personnel necessary to perform the Addendum
Services in accordance with this Service Addendum.
1
4. Addendum Services; Lines of Business; Authorized States;
Programs:
a. Except as specifically noted in this Section 4.a,
INSpire will provide the policy administration services set
forth in Section 1.1(c) of the Agreement and the general
management of such services:
Includes agency xxxx
x. Except as specifically noted in this Section 4.a,
INSpire will provide the claims administration services set
forth in Section 1.1(d) of the Agreement and the general
management of such services:
c. Authorized Lines of Business. Fire, Allied Lines,
Homeowners, Inland Marine, Other Liability.
d. Authorized States. Alabama, Georgia, Illinois,
Indiana, Kentucky, Minnesota, Mississippi, North Carolina,
Ohio, South Carolina, Tennessee, Wisconsin.
e. Location of Provisions of Addendum Services.
INSpire will provide the Addendum Services at an INSpire
service center.
5. Addendum Service Fees:
---------------------
a. Consultants: $125.00 per hour
b. Programmers: $125.00 per hour
c. Policy Administration Services. Policy
administration fees for each month from the Addendum Effective
Date until October 31, 1999 (the "Initial Period") will be
equal to 15.10% of the Direct Written Premiums recognized by
Customer for such month, subject to a minimum monthly policy
administration fee of $251,667. Policy administration fees for
each month subsequent to the Initial Period will be equal to
10.00% of the Direct Written Premiums recognized by Customer
for each such month, subject to a minimum monthly policy
administration fee of $150,000.
d. Claims Administration Services. Claims
administration fees for each of the months during the Initial
Period will be equal to 6.67% of the Earned Premium recognized
by Customer for such month. Claims administration fees for
each month subsequent to the Initial Period will be equal to
6.50% of the Earned Premium recognized by Customer for each
such month. Effective July 1, 2000, the claim administration
fee will be subject to a minimum of $105,000.
e. Special Investigation Unit. When requested and
authorized by Customer, special investigation unit services
will be charged to Customer on a time and materials basis. The
hourly rate for personnel performing these services is $60.000
2
f. Salvage and Subrogation. INSpire will be entitled
to retain twenty-five percent (25%) of the total amount of all
salvage and subrogation recoveries actually collected by
INSpire. Effective January 1, 2000, the retention fee for
salvage will be 15%.
g. Catastrophe Fees. The Addendum Service Fees
related to catastrophe services will equal 5% of incurred loss
resulting from catastrophes.
h. Special Fees. When requested and authorized by
Customer, processing system modifications will be charged to
Customer, on a time and materials basis utilizing the
appropriate mix of service personnel required to perform the
modifications. Hourly rates for such personnel are listed
above.
i. Travel. Customer will reimburse INSpire for all
travel requested by Customer in connection with the work
performed under this Service Addendum.
3
IN WITNESS WHEREOF, each party to this Service Addendum has
caused this Service Addendum to be executed and delivered by a duly
authorized officer as of the date written above.
INSpire: INSpire Insurance Solutions, Inc.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxxxxx, President and Chief Operating
Officer
Customer: The Millers Insurance Company
By: /s/ Illegible Executive VP & CFO
--------------------------------------------------
[Name, Title]
4
INSpire
INSURANCE SOLUTIONS
LETTER OF UNDERSTANDING
The parties executing this letter below, recognize and agree that the Master
Services Agreement entered into by INSpire Insurance Solutions, Inc. and Millers
American Group, and its affiliates, effective December 30, 1999 is subject to
approval by the Texas Department of Insurance. Both parties agree to use all
reasonable efforts to ensure such approval. Both parties further agree that they
are unaware of any reason or impediment to the granting of such approval.
INSpire Insurance Solutions, Inc. Millers American Group
(and its affiliates)
Signed: /s/ Xxxxxxx X. Xxxxxxxx Signed: /s/ Xxx X. Xxxxxx
------------------------------------ ----------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxx X. Xxxxxx
-------------------------------------- -----------------------------
Title: President Title: EVP & CFO
------------------------------------- -----------------------------
Date: December 30, 1999 Date: December 30, 1999
-------------------------------------- ------------------------------
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000-0000
000-000-0000
FAX 000-000-0000
xxx.xxxx.xxx
1
b. Except as specifically noted in this Section 4.a,
INSpire will provide the claims administration services set
forth in Section 1.1(d) of the Agreement and the general
management of such services.
c. Authorized Lines of Business. Fire, Allied Lines,
Homeowners, Inland Marine, Other Liability.
d. Authorized States. Alabama, Georgia, Illinois,
Indiana, Kentucky, Minnesota, Mississippi, North Carolina,
Ohio, South Carolina, Tennessee, Wisconsin.
e. Location of Provision of Addendum Services.
INSpire will provide the Addendum Services at an INSpire
service center.
5. Addendum Service Fees:
---------------------
a. Consultants. $125.00 per hour.
b. Programmers. $125.00 per hour.
c. Policy Administration Services. Policy
administration fees for each month from the Addendum Effective
Date until October 31, 1999 (the "Initial Period") will be
equal to 15.10% of the Direct Written Premiums recognized by
Customer for such month, subject to a minimum monthly policy
administration fee of $251,667. Policy administration fees for
each month subsequent to the Initial Period will be equal to
10.00% of the Direct Written Premiums recognized by Customer
for each such month, subject to a minimum monthly policy
administration fee of $150,000.
d. Claims Administration Services. Claims
administration fees for each of the months during the Initial
Period will be equal to 6.67% of the Earned Premium recognized
by Customer for such month, subject to a minimum monthly
claims administration fee of $111,167. Claims administration
fees for each month subsequent to the Initial Period will be
equal to 6.50% of the Earned Premium recognized by Customer
for each such month, subject to a minimum monthly claims
administration fee of $108,333. Effective January 1, 2000, the
claim administration fee will be 7.0% of the earned premium
subject to a minimum of $105,000.
e. Special Investigation Unit. When requested and
authorized by Customer, special investigation unit services
will be charged to Customer on a time and materials basis. The
hourly rate for personnel performing these services is $60.00.
2
f. Salvage and Subrogation. INSpire will be entitled
to retain twenty-five (25%) of the total amount of all salvage
and subrogation recoveries actually collected by INSpire.
Effective January 1, 2000, the retention fee for salvage will
be 15%.
g. Catastrophe Fees. The Addendum Service Fees
related to catastrophe services will equal 5% of incurred loss
resulting from catastrophes.
5. Addendum Service Fees:
---------------------
a. Consultants: $130.000 per hour
b. Programmers: $130.00 per hour
c. Technical Services:
Monthly Premium* Fee**
--------------- ---
$0 - 4,000,000 3.00%
$4,000,001-8,000,000 2.50%
Above $8,000,000 2.00%
* Gross Written Direct Premium
** Percent of Gross Written Direct Premium
Technical service fees are subject to a minimum of $75,000 per
month, during which services are provided.
d. Special Fees: When requested and authorized by
Customer, processing system modifications will be charged to
Customer on a time and materials basis utilizing the
appropriate mix of service personnel required to perform the
modifications. Hourly rates for such personnel are listed
above.
e. Travel: Customer will reimburse INSpire for all
travel requested by Customer in connection with the work
performed under this Service Addendum.
f. Implementation: $250,000 for the Implementation of
the Windows for Property and Casualty Base system.
Implementation will include table customization as required by
Customer. Additional programming, if any, will be provided on
a time and material basis at the hourly rates listed above. No
programming will commence without prior approval by Customer.
3
IN WITNESS WHEREOF, each party to this Service Addendum has
caused this Service Addendum to be executed and delivered by a duly
authorized officer as of the date written above.
INSpire: INSpire Insurance Solutions, Inc.
By:
--------------------------------------------------
Xxxxxxx X. Xxxxxxxx, President and Chief Operating
Officer
Customer: Millers General Agency, Inc.
By:
--------------------------------------------------
[Name, Title]
4
AMENDMENT 2.0
TO
SERVICE ADDENDUM 1.1.6
"TECHNICAL SERVICES"
THIS AMENDMENT, AS OF THE EFFECTIVE DATE CITED BELOW, HEREBY SUPERCEDES
AND REPLACES FOR ALL PURPOSES AMENDMENT 1.0 TO SERVICE ADDENDUM 1.1.6.
THIS AMENDMENT IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THAT
CERTAIN MASTER SERVICES AGREEMENT DATED DECEMBER 30, 1999 ("THE
AGREEMENT") AS AMENDED HEREBY. A PARTY'S EXECUTION OF A SERVICE
ADDENDUM AMENDMENT WILL BE DEEMED TO BE SUCH PARTY'S (1)
ACKNOWLEDGEMENT AND ACCEPTANCE OF THE TERMS AND CONDITIONS SET FORTH IN
THE AGREEMENT AS AMENDED HEREBY AND (2) EXECUTION AND DELIVERY OF THE
AGREEMENT.
1. Amendment 2.0 Effective Date:
----------------------------
September 25, 2001
2. Parties to this Amendment 2.0:
-----------------------------
o INSpire Insurance Solutions, Inc. ("INSpire")
o Millers American Group, Inc. ("Customer").
3. Amendment 2.0 Term:
------------------
It is hereby agreed that commencing as of the effective date
set forth above, the monthly fees for Technical Services ("IT"
services) shall be reduced from $134,920.00 to $99,341.26 per
month pro-rated for September, 2001 and for a period of three
(3) consecutive months ("Initial Period") thereafter. At the
end of such three (3) month initial period, the fee shall be
further reduced to $81,769.46 per month as set forth on
Schedule "A", attached hereto and incorporated herein by
reference, and shall continue at that monthly rate until the
sooner occurrence of (1) the expiration of the Master Services
Agreement (12/31/2004) or (2) until INSpire receives written
notice from Millers of a change in processing needs as set
forth below.
At the end of the "Initial Period" Millers may give INSpire 60
days written notice of an expected change in processing needs
in order to further reduce the monthly IT service fees to
reflect the then current processing needs of Millers. Such
sixty (60) day notice of a change in processing needs may not
be given more frequently than once per calendar month.
Within thirty (30) days of receipt by INSpire of the above
sixty (60) day notice, INSpire shall create and deliver to
Millers for review and approval, a Statement of Work ("SOW")
containing a fee reduction analysis based upon the then
current processing needs of Millers as set forth in the
notice. The additional fee reductions set forth and described
in the SOW shall be implemented subject to approval by
Millers.
4. Amendment 2.0 Support Services:
------------------------------
For the "Initial Period", INSpire will continue to provide the
services set forth on Schedule "A" for and on behalf of
Customer including:
(a) Desktop Support;
(b) Help Desk Support;
(c) Application Support;
(d) E-mail Support;
(e) Operations Support;
(f) Hardware Support;
(g) System Software Support;
(h) Network Support;
(i) Disaster Recovery Support.
o During the Initial Period, all support services
except for Operations Support, shall have a "no
charge" cap of 130 hours per month. All time beyond
the 000 "xx xxxxxx" hours will be billed back to
Millers at a rate of $130.00 per hour with a minimum
time charge of 15 minutes or 1/4 hour. Upon
expiration of the Initial Period, the "no charge" cap
will be eliminated.
o During the Initial Period and continuing thereafter,
INSpire shall, without charge, provide break/fix
support to all hardware and third party software that
reside at INSpire, as long as the problem is not
caused by Millers personnel or activities. This
break/fix support time will not count toward the 130
hour cap and shall be in addition thereto.
o During the Initial Period and continuing thereafter,
INSpire shall provide Data Center processing
activities for required Millers systems. Such
Operations Support hours will not be counted toward
the 130 hour cap.
Customer is responsible for the costs of:
(a) Network Support - phone line charges,
including South Carolina (currently billed
directly to Customer), as well as data line
charge billed to INSpire, and
(b) Hardware Support - maintenance and lease
expenses of hardware owned by Customer
residing at INSpire (currently billed
directly to Customer) as well as leased
hardware residing at Customer and billed to
INSpire. No hardware relating to Customer's
business shall be added to reside at INSpire
or Customer without Customer's prior
knowledge and consent.
5. Definitions of Amendment 2.0 Support Services: All services
covered by these definitions are subject to the provisions of
Section 4 above and the hours cap defined therein.
o Help Desk Support - first level phone support, i.e.,
user access needs, password support, and other items
listed in Section 4.
o Desktop Support - second level support for individual
users, i.e., hardware repair, software installs, and
other items listed in Section 4.
o Application Support - software installation and
configuration for PCA, WPC, NEON, NOTES and
reasonable training.
o E-mail Support - user setup, database access, and
maintenance of user setup and database access.
o Operations Support - system backups of all Customer
applications and data residing at INSpire, and report
management consisting of daily and monthly reports
distributed via CD or printed output.
o Hardware Support - Customer's servers, hubs, routers,
maintenance and configuration management thereof.
o System Software Support - Windows 9X, NT, Oracle,
AIX, Novell and Windows 2000.
o Network Support - configuration management, security,
data communications, remote access, Internet access
and maintenance thereof.
o Disaster Recovery Support:
o If Customer is displaced, INSpire will be
responsible for reconfiguration of Customers
owned hardware, software, and application
use in connection with business administered
by INSpire.
o Restoration of Customer's current
application platforms at a disaster recovery
location.
o Application Modifications - redesign and/or
create databases, etc.
6. Additional Terms:
----------------
As consideration for the above pricing structure, it is further agreed
that:
o As of Effective Date:
o Millers Casualty system becomes a Claims only
environment. No further policy processing or cycles
will be run except that the system must continue to
run Claims and Accounting cycles for as long as there
is Claims activity. All Test and QA environments will
be disassembled and data removed from all systems. If
any changes or technical support are required for
this system after Effective Date, all programming
efforts and/or technician time will be billable
except as otherwise provided herein. Any changes will
be made directly in the production environment.
o INSpire will not cover the WINS system as part of its
disaster recovery plan. In the event of a disaster,
INSpire will not recover the WINS system in INSpire's
disaster site. INSpire will continue to run backups
on the system which would enable it to recover this
system at a later date.
o INSpire will not cover the Millers Casualty system as
part of its disaster recovery plan. In the event of a
disaster, INSpire will not recover the Millers
Casualty system at INSpire's disaster site. INSpire
will continue to run backups on the system which
would enable it to recover this system at a later
date.
o All hardware and information pertaining to the
Coverall system as it resides within the INSpire Data
Center, will be eliminated.
o There will no longer be a scheduled time for a
Desktop technician on-site at Millers.
o Millers will be responsible for tape mounts and tape
rotation planning for the systems that reside at the
Millers premise.
o All efforts required to make the system changes
necessary to enable INSpire to reduce the cost of the
IT Contract per Millers request, will count toward
the 130 hour cap but such reduction in the cap shall
not exceed 40 hours.
o This agreement has taken into consideration, the following
future events. Subject to the above sixty (60) day notice
requirement relating to reduction in processing needs, no
further price reduction will occur as a result of these
specific events:
o 01/01/02 - Harbor system becomes a claims only
environment. No further policy processing or cycles
will be run (INSpire will continue to run Claims and
Accounting cycles as long as there is Claims
activity). All Test and QA environments will be
disassembled and data removed from all systems. If
any changes or technical support are required to this
system after 01/01/02, all programming efforts and/or
technician time will be billable. Any changes will be
made directly to the Production Environment.
o 11/01/02 - Millers SPL/WPC system becomes a claims
only environment. No further policy processing or
cycles will be run (INSpire will continue to run
Claims and Accounting cycles as long as there is
Claims activity). All Test and QA environments will
be disassembled and data removed from all systems. If
any changes or technical support are required to this
system after 11/01/02, all programming efforts and/or
technician time will be billable. Any changes will be
made directly to the Production Environment.
o 01/01/03 - WINS system can be completely turned off
and removed from the systems and WINS only hardware
can be eliminated.
IN WITNESS WHEREOF, each party to this Amendment has caused this
Amendment to be executed and delivered by a duly authorized officer as
of the date written above.
INSpire: INSpire Insurance Solution s, Inc.
By: /s/ Xxxxxx X. Xxxx, Chief Technology Officer
--------------------------------------------------
(Signature and Title)
Xxxxxx X. Xxxx 10/3/01
-------------------------------------------------
(Printed Name and Date)
Customer: Millers American Group, Inc.
By: /s/ Xxxxx X. Illegible, Chairman
--------------------------------------------------
(Signature and Title)
Xxxxx X. Illegible 10/2/01
--------------------------------------------------
(Printed Name and Date)
SCHEDULE "A"
SERVICES TO BE PERFORMED
-------------------------------- -------------------------------------- --------------------- ------------------------
Category Product Initial Period Subsequent Periods
-------------------------------- -------------------------------------- --------------------- ------------------------
Technical Support: Desktop/Notebooks/Printer $ 7,740.76 Hourly
Support/Help Desk
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Application Support: Millers SPL - WPC Becomes a claims $ 16,070.69 $ 11,006.12
only system by 11/1/2002.
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
WINS - System is no longer required $ 3,553.02 $ -0-
by 1/1/2003.
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Millers Casualty - PCA - Becomes $ 12,553.02 $ 12,493.08
claims only environment as of
Effective Date.
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Millers Harbor - PCA - Becomes a $ 4,257.92 $ 3,044.47
claims only system by 1/1/2002.
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Cover All $ -0- $ -0-
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Neon $ 19,026.36 $ 19,026.36
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Lotus Notes: Email, Databases, Development $ 2,576.43 $ 2,576.$3
Administration
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Operations: Backups/Data Management $ 8,229.54 $ 8,229.54
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Change Management: Application Changes No charge No charge
Infrastructure Changes
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Server Infrastructure: Terminal Servers $ 1,781.28 $ 1,781.28
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Oracle Financials $ 385.33 $ 358.33
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Operating Systems - NT, Novell, $ 1,484.40 $ 1,484.,40
Windows 9X, AIX
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Configuration Management, Security $ 2,279.08 $ 2,279.80
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Communications Frame Relay Configuration (Includes $ 2,145.98 $ 2,145.98
Infrastructure: SC)
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Hardware-routers, hubs, etc. $ 1,484.40 $ 1,484.40
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Remote Access-VPN, Shiva, etc. $ 86.10 $ 86.10
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Internet Access-brows, file $ 215.24 $ 215.24
transfer, e-mail
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Topcall Server - fax $ 172.19 $ 172.19
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Disaster Recovery: Hot Site, User Suites, DR Planning $ 15,156.17 $ 15,156.17
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Reporting: Bureau $ 230.29 $ 230.29
-------------------------------- -------------------------------------- --------------------- ------------------------
-------------------------------- -------------------------------------- --------------------- ------------------------
Totals $ 99,341.26 $ 81,769.46
-------------------------------- -------------------------------------- --------------------- ------------------------
AMENDMENT 1.0
TO
SERVICE ADDENDUM 1.1.7
MILLERS - NOBEL
THIS AMENDMENT IS SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THAT
CERTAIN MASTER SERVICES AGREEMENT DATED DECEMBER 30, 1999 (THE
"AGREEMENT") AS AMENDED HEREBY. A PARTY'S EXECUTION OF A SERVICE
ADDENDUM WILL BE DEEMED TO BE SUCH PARTY'S (1) ACKNOWLEDGEMENT AND
ACCEPTANCE OF THE TERMS AND CONDITIONS SET FORTH IN THE AGREEMENT AS
AMENDED HEREBY AND (II) EXECUTION AND DELIVERY OF THE AGREEMENT.
1. Effective Date of this Amendment:
--------------------------------
August 1, 2001
2. Parties to this Amendment:
-------------------------
o INSpire Insurance Solutions, Inc. ("INSpire")
o Policies Assumed from Nobel Insurance Company ("Customer")
3. Paragraph 5.d of Service Addendum 1.1.7 is hereby replaced with the
following:
d. Claims Administration Services. Effective January 1, 2000, the
claim administration fee will be 7.0% of the Earned Premium
recognized by Customer subject to a minimum of $105,000.00
until August 31, 2001 when the minimum monthly fee shall be
completely eliminated and no minimum shall be required
thereafter.
IN WITNESS WHEREOF, each party to this Amendment 1.0 to Service
Addendum 1.1.7 has caused this Amendment to be executed and delivered
by a duly authorized officer as of the date written above.
INSpire: INSpire Insurance Solutions, Inc.
By: /s/ Xxxx Xxxxxx, Vice President
-------------------------------------------------
Signature & Title
Xxxx Xxxxxx 8/16/01
-------------------------------------------------
Printed Name & Date
Customer: Millers American Group, Inc.
By: /s/ Xxxxx X. Xxxx, Vice President &
General Counsel
-------------------------------------------------
Signature & Title
Xxxxx X. Xxxx 8/16/01
------------------------------------------------
Printed Name & Date
AMENDMENT I
TO
MASTER SERVICES AGREEMENT
This Amendment I changes and amends the pricing for Claim
Administration Services provided under the Master Services Agreement
between INSpire Insurance Solutions, Inc. and Millers American Group,
Inc. and its affiliates, dated December 30, 1999, and the Service
Addendums apart thereof, including any prior amendments thereto and the
Harbor Agreement dated April 1, 1998. The effective date of this
Amendment I is August 1, 2001. To the extent that the terms of this
Amendment are inconsistent with Service Addendums 1.1.3 and 1.1.4, this
Amendment controls.
A. The Programs Affected by this Amendment are:
-------------------------------------------
(1) Lane, Pinnacle, Classic Auto, Harbor and Millers Florida
Homeowners. (Suncoast and Nobel are not affected by this
Amendment until such time as they become Discontinued Programs
as defined herein. All W.E. Love claims (new and pending) have
already been returned without additional charge to Millers by
INSpire effective August 1, 2001 and are not subject to this
Amendment).
(2) Pending Millers MGA claims arising out of Millers
Commercial and Millers Specialty/Personal Lines business
existing as of December 31, 2001 will be subject to the
pricing in accordance with section D(2) below.
B. New Per Claim File Pricing (billed monthly): For new claims
reported on and after August 1, 2001 arising out of policies
written in those programs subject to this Amendment as set
forth in section A(1) above, the per file charge (life of
file) shall be as follows:
Service Pricing Comments
1. Auto BI 490.00 per file Regardless of number of
claimants. Outside
adjustment expenses & SIU
charges are included.
2. MP/PIP 150.00 per file Regardless of number of
claimants. Outside
adjustment expenses & SIU
charges are included.
3. Property Damage 250.00 per file Regardless of number of
claimants. Outside
adjustment expenses & SIU
charges are included.
4. Auto Collision & Auto 240.00 per file Regardless of number of
Comprehensive claimants. Outside
adjustment expenses & SIU
charges are included.
5. Homeowner 490.00 per file Regardless of number of
claimants. Outside
adjustment expenses & SIU
charges are included.
Cause and origin expenses
are additional.
6. Salvage 15% Percentage of net
recoveries paid at time of
recovery.
7. Subrogation 25% Percentage of net
recoveries paid at time of
recovery.
Note: For items 1-7 Experts such as
agronomists,
reconstruction, etc., are
additional (prior approval
from Millers is required).
C. The above pricing (section B(1) through (5)) applies on a per
coverage basis. (For example, if a claim file is opened and it
has one or more bodily injury features and it also has one or
more property damage features, the charge for these two
coverages would be a total of $490.00 for the Bodily Injury
features and $250.00 for the property damage features for a
grand total of $740.00 for the file.)
D. EXISTING CLAIMS (Claim Files):
------------------------------
(1) The pending claim files on the Lane, Pinnacle, Classic Auto,
Harbor and Millers Florida Homeowners shall be those open
claim files in existence as of July 31, 2001. These files will
be handled by INSpire at a flat rate of $300.00 per file for
life of file handling or into litigation, whichever comes
first. The fee for handling the pending will be paid by
Millers in three equal installments on September 1, 2001,
December 1, 2001 and March 1, 2002. (1/3 each)
(2) Commencing January 1, 2002, Millers will begin handling the
new Millers MGA claims reported on and after January 1, 2002.
The pending Millers MGA claims in existence as of 12:01 a.m.,
January 1, 2002 will be handled by INSpire at a flat rate of
$300.00 per file for life of file handling or into litigation,
whichever comes first. The fee for handling the pending will
be paid by Millers in three equal installments on February 1,
2002, April 1, 2002, and June 1, 2002 (1/3 each).
E. REOPENED CLAIMS: If a rile is reopened because a new claim (not
previously known or ascertainable by INSpire) is presented, it shall be
treated like a new claim. If a file is opened for any other reason
(such as an issue was not finally resolved at the time of closing),
there shall be no charge for continued handling of such file.
F. DEFINITIONS: As used in this Amendment, the term "Discontinued Program"
shall have the following meaning:
"Discontinued Program" shall mean a program for which no new
business or renewals are written or accepted and that has a
systemic play in place for non-renewing any remaining
business.
IN WITNESS WHEREOF, each party to this Amendment I has caused this
Amendment to be executed and delivered by a duly authorized
representative as of the date written above.
INSpire Insurance Solutions, Inc. Millers American Group, Inc.
By: /s/ Xxxx Xxxxxx 8/16/01 By: /s/ Xxxxx X. Xxxx
---------------------------------- ---------------------------
Signature & Date Signature & Date
Vice President and
Vice President General Counsel
---------------------------------- ---------------------------
Title Title
