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EXHIBIT 10.3
AMENDED INFORMATION SERVICES CONTRACT
THIS AMENDED INFORMATION SERVICES CONTRACT ("Agreement") dated as
of July 1, 1997, is made by and between The Millers Mutual Fire Insurance
Company, a Texas mutual insurance company ("Millers Mutual"), The Millers
Casualty Insurance Company, a Texas insurance company ("Millers Casualty"), and
MiliRisk, Inc., a Texas corporation ("MiliRisk," and together with Millers
Mutual and Millers Casualty, the "Parties").
PRELIMINARY STATEMENTS
A. Millers Mutual, MiliRisk, and Millers Casualty are parties to an
information services contract, effective as of October 1, 1996 (the "Prior
Services Contract"), pursuant to which MiliRisk provides certain information
system services to Millers Mutual and Millers Casualty.
B. Millers Mutual, MiliRisk, and Millers Casualty desire to amend in
its entirety the Prior Services Contract.
C. Millers Mutual and Millers Casualty desire to procure certain
information system services from MiliRisk in connection with the business of
Millers Mutual and Millers Casualty and MiliRisk is willing to provide such
services.
NOW, THEREFORE, in consideration of the foregoing preliminary statements
and the mutual covenants and agreements contained herein, the parties hereto,
intending to be legally bound hereby, agree as follows:
STATEMENT OF AGREEMENT
ARTICLE I.
DEFINITIONS
Unless the context otherwise requires, the terms defined in this Article
I shall, for the purposes of this Agreement, have the meanings herein
specified:
"Effective Date" means July 1, 1997.
"Fiscal Year" shall mean the period from January 1 through December 31
of each year.
"Term of Agreement" means the period from the Effective Date until the
Agreement is terminated pursuant to Article 5.
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ARTICLE II.
DUTIES AND OBLIGATIONS OF MILIRISK
Section 2.1 Information System Services. MiliRisk shall provide
information system services for and on behalf of Millers Mutual and Millers
Casualty which shall include, but shall not be limited to:
(a) telecommunications services;
(b) hardware services;
(c) application software services;
(d) system software services;
(e) network services;
(f) system integration services.
ARTICLE III.
COMPENSATION, EXPENSES AND PAYMENT
Section 3.1 Fee. The compensation due MiliRisk from Millers Mutual
and Millers Casualty for services provided pursuant to Section 2.1 of this
Agreement shall be an amount equal to (A) the monthly net written premiums,
multiplied by (B) a certain percentage (the "Premium Percentage"), which such
percentage shall be (I) 6% for the remainder of 1997, (ii) 5.5% in calendar
year 1998, (iii) 5% in calendar year 1999, and (iv) thereafter, the Premium
Percentage shall be adjusted annually by agreement between the Parties;
provided, however, that if the Parties cannot agree on the Premium Percentage
within 60 days after the end of the calendar year, such percentage shall remain
the same as the previous calendar year.
Section 3.2 Invoicing and Payment. MiliRisk shall xxxx Xxxxxxx Mutual
and Millers Casualty monthly for services within 15 days after the end of each
calendar month during the Term of Agreement. Payment shall be made by Millers
Mutual and Millers Casualty within 30 days after the delivery of such invoice.
Section 3.3 Late Payment. Any amount owing from Millers Mutual and/or
Millers Casualty to MiliRisk that has not been paid by the due date shall be
subject to a late payment charge of 1% per month.
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ARTICLE IV.
ACCESS TO INFORMATION, BOOKS AND RECORDS
MiliRisk and its duly authorized representatives shall have access, to
the extent necessary to perform the services pursuant to Section 2.1, to each
of Millers Mutual and Millers Casualty's offices, facilities and records
wherever located, in order to discharge MiliRisk's responsibilities hereunder;
provided, however, Millers Mutual and Millers Casualty shall provide and make
available to MiliRisk and its duly authorized representatives at MiliRisk's
Fort Worth, Texas, USA offices, at MiliRisk's request, all such records
required by MiliRisk to perform its duties pursuant to this Agreement. All
records and materials furnished to MiliRisk by Millers Mutual and Millers
Casualty in performance of this Agreement shall at all times during the Term of
Agreement remain the property of Millers Mutual and Millers Casualty, as
appropriate.
ARTICLE V.
TERM AND TERMINATION OF THE AGREEMENT
Section 5.1 Initial Term. This Agreement shall be effective from the
Effective Date and shall continue for three (3) years thereafter (the "Initial
Term"); subject, however, to the terms of Section 5.2 hereof. At the end of
the Initial Term, this Agreement shall continue in force and effect for
subsequent one (1) year periods unless terminated by any Party by written
notice at least sixty (60) days prior to the anniversary date of the Effective
Date.
Section 5.2 Termination. This Agreement may be sooner terminated on
the first to occur of the following:
(a) Termination by Mutual Agreement
In the event the Parties shall mutually agree in writing, this
Agreement may be terminated on the terms and dates stipulated
therein.
(b) Uncorrected Material Breach
In the event any Party shall fail to discharge any of its
material obligations hereunder, or shall commit a material breach
of this Agreement, and such default or breach shall continue for
a period of thirty (30) days after any other Party has served
notice of such default, this Agreement may then be terminated at
the option of any nonbreaching Party by notice thereof to the
breaching Party.
Section 5.3 Effects of Termination. Except for covenants or other
provisions herein that, by their terms, expressly extend beyond the Term of
Agreement, the Parties' obligations hereunder are limited to the Term of
Agreement.
Section 5.4 Reimbursement by MiliRisk. In the event of termination
under this Agreement, MiliRisk shall reimburse Millers Mutual and Millers
Casualty within 30 days after such termination for fees paid by Millers Mutual
and Millers Casualty but unearned by MiliRisk.
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Section 5.5 Force Majeure. If any Party shall be prevented from
performing any portion of this Agreement (except the payment of money) by
causes beyond its control, including labor disputes, civil commotion, war,
governmental regulations or controls, casualty, inability to obtain material or
services or acts of God, the defaulting party shall be excused from performance
for the period of the delay and for a reasonable time thereafter.
ARTICLE VI.
INDEMNIFICATION OF MILIRISK
Section 6.1 Limitation of Liability. In providing services hereunder,
MiliRisk shall have a duty to act, and cause its affiliates and designees to
act, in a reasonably prudent manner. Neither MiliRisk, nor any officer,
director, employee or agent of MiliRisk shall be liable to Millers Mutual
and/or Millers Casualty for any error of judgment or for any loss incurred by
Millers Mutual and/or Millers Casualty in connection with the matters to which
this Agreement relates, except a loss resulting from the gross negligence or
willful misconduct on the part of MiliRisk.
Section 6.2 Indemnification. Millers Mutual and Millers Casualty
hereby agree to indemnify and hold harmless MiliRisk from and against any and
all claims, causes of action, liabilities, damages, costs, charges, fees,
expenses (including reasonable attorneys' fees and expenses to be reimbursed as
incurred), suits, orders, judgments, adjudications and losses of whatever
nature and kind which MiliRisk or its affiliates or designees or for which
MiliRisk or its affiliates or designees become liable as the result of the
performance of MiliRisk's obligations and duties pursuant to this Agreement;
provided, MiliRisk shall not be indemnified for gross negligence or willful
misconduct on the part of MiliRisk.
ARTICLE VII.
MISCELLANEOUS
Section 7.1 Relationship of Parties. This Agreement does not create a
partnership, joint venture or association; nor does this Agreement, or the
operations hereunder, create the relationship of lessor and lessee or xxxxxx
and bailee. Nothing contained in this Agreement or in any agreement made
pursuant hereto shall ever be construed to create a partnership, joint venture
or association, or the relationship of lessor and lessee or xxxxxx and bailee,
or to impose any duty, obligation or liability that would arise therefrom with
respect to either or both of the Parties. Specifically, but not by way of
limitation, except as otherwise expressly provided for herein, nothing
contained herein shall be construed as imposing any responsibility on MiliRisk
for the debts or obligations of Millers Mutual or Millers Casualty or any of
its affiliates. It is hereby expressly understood that MiliRisk is hereby
engaged by Millers Mutual and Millers Casualty to provide information system
services as an agent of Millers Mutual and Millers Casualty . MiliRisk, its
affiliates and designees shall have the right to render similar services for
other business entities and persons, including its own, whether or not engaged
in the same business as Millers Mutual or Millers Casualty , and may
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enter into such other business activities as MiliRisk and its affiliates, in
their sole discretion, may determine.
Section 7.2 No Third Party Beneficiaries. Except to the extent a
third party is expressly given rights herein, any agreement herein contained,
expressed or implied, shall be only for the benefit of the Parties and their
respective legal representatives, successors and assigns, and such agreements
or assumption shall not inure to the benefit of any other party whomsoever, it
being the intention of the Parties hereto that no person or entity shall be
deemed a third party beneficiary of this Agreement except to the extent a third
party is expressly given rights herein.
Section 7.3 General Representations. Each Party represents and
warrants that on the Effective Date: (i) it is a corporation, duly established,
validly existing and in good standing under the laws of its state or
jurisdiction of incorporation, with power and authority to carry on the
business in which it is engaged and to perform its respective obligations under
this Agreement; (ii) the execution and delivery of this Agreement have been
duly authorized and approved by all requisite corporate action; (iii) it has
all the requisite corporate power and authority to enter into this Agreement
and to perform its obligations hereunder; and (iv) the execution and delivery
of this Agreement do not, and consummation of the transactions contemplated
herein will not, violate any of the provisions of its charter or bylaws or any
applicable state or federal laws applicable to them.
Section 7.4 Assignment. No assignment of this Agreement or any of the
rights or obligations set forth herein by any Party shall be valid without the
specific written consent of the other Parties.
Section 7.5 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally, mailed by first class mail postage prepaid and return receipt
requested or sent by recognized overnight delivery service or facsimile
transmission to the address below indicated:
If to Millers Mutual: The Millers Mutual Fire Insurance Company
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000-0000
Attn: Xxx X. Xxxxxx
Facsimile: (000) 000-0000
If to Millers Casualty: The Millers Casualty Insurance Company
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000-0000
Attn: Xxx X. Xxxxxx
Facsimile: (000)000-0000
If to MiliRisk: MiliRisk, Inc.
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
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or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
Notice so given shall, in the case of notice so given by mail, be deemed to be
given and received on the fourth calendar day after posting, in the case of
notice so given by recognized overnight delivery service, on the date of actual
delivery and, in the case of notice so given by facsimile transmission or
personal delivery, on the date of actual transmission or, as the case may be,
personal delivery.
Section 7.6 Failure to Pursue Remedies. The failure of any party to
seek redress for violation of, or to insist upon the strict performance of, any
provision of this Agreement shall not prevent a subsequent act, which would
have originally constituted a violation, from having the effect of an original
violation.
Section 7.7 Cumulative Remedies. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive its right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
Section 7.8 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of all of the parties and, to the extent permitted by this
Agreement, their successors, legal representatives and assigns.
Section 7.9 Interpretation. Throughout this Agreement, nouns,
pronouns and verbs shall be construed as masculine, feminine, neuter, singular
or plural, whichever shall be applicable. All references herein to "Articles,"
"Sections" and paragraphs shall refer to corresponding provisions of this
Agreement.
Section 7.10 Headings. Headings are solely for convenience and ease of
reference and are not to be considered in the construction or interpretation of
any provision of this Agreement.
Section 7.11 Severability. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted unless such invalid or
unenforceable provision affects the fundamental purpose of this Agreement.
Section 7.12 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, with the same effect as if all parties hereto had signed the same
document. All such counterparts shall be deemed an original, shall be
construed together and shall constitute one and the same instrument. This
Agreement may also be executed and delivered by exchange of facsimile
transmissions of originally executed copies.
Section 7.13 Integration. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
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Section 7.14 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW, AND NOT THE LAW OF
CONFLICTS, OF THE STATE OF TEXAS.
Section 7.15 Arbitration.
(a) To the fullest extent permitted by law, any controversy or claim
arising out of or relating to any alleged breach shall be resolved by
arbitration by a panel of three (3) arbitrators under the American Arbitration
Association ("AAA") Arbitration Rules in force (the "AAA Rules") in accordance
with the following:
(1) In the event of any conflict between the AAA Rules and the
provisions of this Agreement, the provisions of this Agreement
shall prevail.
(2) Either party may refer a matter to arbitration by written notice
to the other party by giving notice as provided in this
Agreement.
(3) The place of the arbitration shall be Fort Worth, Texas.
(4) The claimant party shall appoint one arbitrator and the
respondent party shall appoint one arbitrator, and the two
arbitrators so appointed shall appoint the third arbitrator, in
accordance with the AAA Rules. In the event of an inability to
agree on a third arbitrator, the appointing authority shall be
the AAA.
(5) The decision of the arbitrators shall be made by majority vote
and shall be in writing.
(6) The decision of the arbitrators shall be final and binding on the
parties save in the event of fraud, manifest mistake or failure
by any of the arbitrators to disclose any conflict of interest.
(7) The decision of the arbitrators may be enforced by any court of
competent jurisdiction and may be executed against the person and
assets of the losing party in any jurisdiction.
(b) In the event any dispute is submitted to arbitration pursuant to
Section 7.15(a) above, the panel of arbitrators may, if it deems such award
appropriate, award a party costs and expenses incurred by such party in
enforcing its rights. Except as so awarded, each party shall bear its own
costs and expenses of enforcing its rights to arbitrate under this Section
7.15.
(c) Except for arbitration proceedings pursuant to Section 7.15(a)
above, no action (other than the enforcement of any arbitration decision) or
lawsuit shall be brought by or between MiliRisk and Millers Mutual and/or
Millers Casualty concerning or arising out of this Agreement.
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Section 7.16 Agreement to Perform Necessary Acts. Each party agrees to
perform any further acts and execute and deliver any and all further documents
and/or instruments which may be reasonably necessary to carry out the
provisions of this Agreement and the transactions contemplated hereby.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
THE MILLERS MUTUAL FIRE
INSURANCE COMPANY
By: /s/ XXX X. XXXXXX
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Name: Xxx X. Xxxxxx
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Title: Chief Financial Officer
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THE MILLERS CASUALTY
INSURANCE COMPANY
By: /s/ XXX X. XXXXXX
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Name: Xxx X. Xxxxxx
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Title: Chief Financial Officer
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MILIRISK, INC.
By: /s/ F. XXXXXX XXXXXX, III
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Name: F. Xxxxxx Xxxxxx, III
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Title: President and Chief Executive
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Officer
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