OUTSOURCING AGREEMENT
VIRTUAL
ITEM PROCESSING SYSTEMS, INC.
0000
Xxxxxxxxx Xxxxxxxxxx, #000
Xxxxxxxx
Xxxx, Xxxxxxxx 00000
BETWEEN
VIRTUAL
ITEM PROCESSING SYSTEMS, INC.
And
BROKERS
NATIONAL LIFE ASSURANCE COMPANY
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This
Outsourcing Agreement (" Agreement") is executed as of this 1st
day of
May 2006, by and between Virtual Item Processing Systems, Inc. ("VIP"), with
its
principal place of office at 0000 XX Xxxxxxxxxx, Xxxxx 000 Xxxxxxxx Xxxx,
Xxxxxxxx 00000, and Brokers National Life Assurance Company ("BNL"), with its
principal place of office at 0000 Xxx. 00 X., Xxxxx 000, Xxxxxx, Xxxxx
00000.
WHEREAS,
VIP is engaged in the business of providing Electronic Data Processing services
("EDP Services") and related consultation and services to insurance companies
pursuant to computer software systems developed and owned by VIP , (the "VIP
System");
WHEREAS,
BNL is an insurance company domiciled in the State of Arkansas and licensed
to
do business in numerous additional states; and
WHEREAS,
VIP desires to provide EDP Services to BNL; and
WHEREAS,
BNL desires to obtain EDP services from VIP for the processing and
administration of its insurance policies;
NOW,
THEREFORE, in consideration of the above premises and in consideration of other
good and valuable consideration, the receipt and sufficiency is hereby
acknowledged, the parties agree as follows:
1.
PURCHASE
OF EQUIPMENT.
BNL at
its expense shall obtain, install, maintain and upgrade as necessary any and
all
hardware, software, data and telephone lines, other communications equipment
and
any other equipment (hereinafter collectively referred to as the "Equipment")
which it determines is necessary to allow it to use and access the VIP System
pursuant to the terms of this Agreement. Such Equipment shall be fully
compatible with the VIP System. VIP will provide BNL such information as is
reasonably necessary to allow BNL to acquire all such Equipment which meets
the
requirements of this paragraph. If requested by BNL and at BNL's expense, VIP
shall inspect all such Equipment and acknowledge its compatibility in writing
prior to its use with the VIP System.
2.
VIP's EQUIPMENT AND SERVICES.
A.
During
the term of this Agreement, VIP shall provide BNL such access as necessary
to
the VIP System to allow BNL to attach one data communication line and up to
seventy (70) addressable data communications devices to said VIP System. Should
BNL desire to attach additional communication lines or additional communication
devices to the VIP System, BNL shall pay to VIP the additional fees set forth
in
paragraph 5(F) of this Agreement.
B.
VIP,
at its sole discretion and expense, may, but is not obligated to, make
appropriate enhancements to the VIP System. Any such enhancements shall be
deemed to be included in the EDP Services and VIP System to be provided to
BNL,
whether developed by VIP before or
during
the time when services are to be provided by VIP pursuant to this Agreement.
During the term of this Agreement, VIP shall be responsible at its expense
for
the proper maintenance and documentation of the VIP System.
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.SCHEDULED
AND UNSCHEDULED DOWN TIME. BNL
acknowledges that there will be scheduled downtime for the routine preventive
maintenance of VIP's System performed by either VIP or its vendors. VIP shall
give BNL reasonable advance notice of all such scheduled downtime. BNL further
acknowledges that there will also be unscheduled down-time that might occur
as a
result of electrical power failures and equipment failures and other acts
outside of the control of VIP as contemplated in paragraph 16(J). In the event
that any such down-time extends for more than two (2) consecutive working days,
VIP, at its expense, will make available to BNL access to a backup facility
designated by VIP for the continued processing of BNL's business. To ensure
that
a backup facility will be available in
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case
of
such a failure, VIP will maintain disaster and/or business interruption
insurance adequate to establish alternate site processing, as provided for
in
paragraph 12(A) of this Agreement.
4.
INCLUDED SERVICES IN THE VIP SYSTEM. It is agreed and understood by BNL
that:
A.
It has
reviewed and inspected the VIP System existing as of the Effective Date of
this
Agreement, which VIP System includes (i) a New Business System, (ii) a Policy
Administration System, (iii) an Agency Administration System, (iv) a Financial
Administration System. (v) a Claims System, (vi) a Vendor Provider System,
(vii)
a Transaction Tracking System and (viii) a Mail Tracking System;
B.
Such
VIP System as identified in paragraph 4(A) is adequate to meet the needs of
BNL;
C.
VIP
shall provide EDP Services to BNL for such Initial Policies and policies
identical thereto and renewals thereof by the use of such VIP System existing
as
of the Effective Date of this Agreement, except as such VIP System may be
modified from time to time by VIP , at the discretion of VIP;
D.
BNL
has reviewed the security system (Security System") included in the VIP System
existing as of the Effective Date of this Agreement;
E.
BNL
acknowledges and agrees that such Security System is adequate to protect the
confidential information and data of BNL processed by the VIP
System;
F.
BNL,
throughout the term of this Agreement, shall be solely responsible for choosing,
implementing and utilizing any or all of such of the security measures and
protections offered by said Security System for the use of or access to the
VIP
System by any of its officers, directors, shareholders, employees and
agents;
G.
VIP
shall not have any duty to either monitor or enforce such security measures
and
protections chosen, implemented or utilized by BNL;
H.
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BNL
shall
be solely responsible for any acts or omissions of any of its officers,
directors, shareholders, employees and agents;
I. Notwithstanding
anything to the contrary in this Agreement, VIP at any time during the term
of
this Agreement may change the platform upon which the VIP System is operated
and
through which the EDP Services are provided to BNL by VIP under this Agreement.
Before VIP shall make such platform change VIP shall give BNL prior reasonable
written notice of such change, and VIP's warranties under this Agreement shall
continue notwithstanding such change and VIP agrees to pay any cost created
for
or imposed on BNL for equipment, training or similar matters arising from such
change.
5.
PAYMENTS TO VIP.
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A.
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For
EDP Services provided pursuant to this Agreement, BNL will pay to
VIP the
charges set forth in the Payment Schedule attached hereto as Schedule
B:
provided however and notwithstanding anything to the contrary herein.
The
minimum monthly fee shall not be less than five thousand dollars
($5,000)
per month (as applicable, "Minimum
Fee").
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B.
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For
any additional VIP Services provided hereunder, BNL will pay to VIP
the
charges set charges set forth in the Payment Schedule attached hereto
as
Schedule
A.
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C.
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The
fees due hereunder are subject to the following
provisions:
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1. The
fee
for each new policy submitted into the VIP System is set forth in Schedule
B.
2. VIP
will
process all policies that have thirteen (13) or more months expired from their
original policy date at the annual rates set forth in Schedule
B. with
a
separate fee for each renewal base policy and each rider, for each plan,
prorated to the actual number of months each policy is represented to be in
force on the VIP System. Such representation of "policy status" includes the
"grace period" and "Late payment offer" that each policy may enjoy and in which
case exceeds a time frame not bound by each policy's actual paid for period.
The
payment amount for each group of policies in a rate category will be calculated
by determining the actual number of policies and riders in force that are
included in the rate category, as set forth in Schedule
B at
the
end of each calendar month and then multiplying the number of policies by the
base policy renewal amount and the number of riders by the rider renewal amount
then adding the totals together and dividing the resulting amount by twelve
(12). The amounts calculated for all rate categories are added together and
this
amount is the fee payable in advance at the beginning of the month.
3. VIP
shall
not be obligated to process any amended policies or new products
that
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are
written or acquired by BNL unless and until the parties hereto have mutually
executed a written addendum to this Agreement modifying Schedule
B to
include the fees for any such products.
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D.
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Any
sum due VIP hereunder for which a time for payment is not otherwise
specified will be due and payable within ten (10) days after the
date of
the postmark for an invoice therefor from VIP. If BNL fails to pay
any
amount due within ten (10) days from the date of the postmark for
the
invoice, late charges of 1-1/2% per month, or the maximum amount
allowable
by law, whichever is less, shall also become payable by BNL to
VIP.
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E.
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In
addition to the communication line and devices which BNL is authorized
to
attach to the VIP System pursuant to paragraph 2 of this Agreement,
BNL
may, for the monthly fee(s) hereinafter set forth, attach additional
communication lines or the following devices to the VIP System. The
monthly fee(s) for such additional lines) or devices is as
follows:
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1.
each
communication line and adapter $200,
2.
each
visual station whether CRT, PC or similar device $25,
3.
each
addressable printer under 299 lines per minute ("LPM") $25
4.
each
addressable printer over 299 LPM $150.
F.
There
are certain other expenses which are directly related to VIP's performance
of
this Agreement that are directly billable by VIP and payable by BNL. The purpose
and intent of this provision is not to describe all contemplated charges covered
by this provision, but rather to identify some of the charges that may fall
into
this category . Such charges include but are not limited to the
following:
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1.
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Cost
of all business forms, continuous or non-continuous used by
BNL;
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2.
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All
telephone calls initiated on behalf of BNL business and
operations;
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3.
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All
travel, food and lodging expenses incurred by VIP personnel related
to the
performance of this Agreement, subject to BNL's prior written
approval;
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4.
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All
postage and shipping expenses for materials used by
BNL;
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5.
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All
expenses incurred for computer output micro-film "COM" which is contracted
by VIP with a service bureau independent of VIP , subject to BNL'
s prior
written approval;
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6.
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Any
other charges directly related to BNL ' use or benefit of the VIP
System
pursuant to this Agreement is subject to BNL ' prior written
approval.
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G.
All
sums due under this Agreement are payable in U.S. dollars.
6.
PROPRIETARY AND RELATED RIGHTS.
A. CLIENT
DATA.
Any
original documents or files provided to VIP hereunder by BNL ("BNL Data") are
and shall remain BNL's property and, upon the termination of this Agreement
for
any reason, such BNL Data will be returned to BNL by VIP, subject
to
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the
terms
hereof. Subject to paragraphs 4(F) and (G), VIP agrees to make the same effort
to safeguard such BNL Data as it does in protecting its own proprietary
information. BNL Data will not be utilized by VIP for any purpose other than
those purposes related to rendering EDP Services to BNL under this Agreement,
nor will BNL Data or any part thereof be disclosed to third parties by VIP
, its
employees or agents except for purposes related to VIP's rendering ofEDP
Services to BNL under this Agreement or as required by law, regulation, or
order
of a court or regulatory agency or other authority having jurisdiction
thereover. Notwithstanding the foregoing, VIP shall have the right to retain
in
its possession all work papers and files prepared by it in performance of EDP
Services hereunder which may include necessary copies of BNL Data. VIP shall
have access to BNL Data, at reasonable times, during the term of this Agreement
and thereafter for purposes related to VIP's 'rendering of EDP Services to
BNL
pursuant to this Agreement, or as required by law, regulation or order of a
court or regulatory agency or other authority having jurisdiction thereover.
Notwithstanding the foregoing, the confidentiality obligations set forth in
this
paragraph will not apply to any information which (i) is or becomes publicly
available without breach of this Agreement, (ii) is independently developed
by
VIP outside the scope of this Agreement and without reference to the
confidential information received under this Agreement, or (iii) is rightfully
obtained by VIP from third parties which are not obligated to protect its
confidentiality.
7.
TERMINATION FOR CAUSE. This
Agreement may be terminated by the non- breaching party upon any of the
following events:
A.
In the
event that BNL fails to pay any sums of money due to VIP hereunder and does
not
cure such default within thirty (30) days after receipt of written notice of
such nonpayment from VIP , provided that if BNL notifies VIP in writing that
BNL
disputes a billing and BNL pays any undisputed portion of such billing VIP
shall
not institute formal proceedings by arbitration or judicial review or terminate
this Agreement with respect to such disputed billing until after VIP has
afforded BNL an opportunity for a meeting to discuss such dispute.
B.
In the
event that a party hereto breaches any of the material terms, covenants or
conditions of this Agreement (other than a breach under paragraph (A) above)
and
fails to cure the same within thirty (30) days after receipt of written notice
of such breach from the non-breaching party.
C.
In the
event that a party hereto becomes or is declared insolvent or bankrupt, is
the
subject of any proceedings relating to its liquidation, insolvency or for the
appointment of a receiver or similar officer for it, makes an assignment for
the
benefit of all or substantially all of its creditors, or enters into an
agreement for the composition, extension, or readjustment of all or
substantially all of its obligations or admits of its general inability to
pay
its debts as they become due.
D.
In the
event of termination under this section, VIP will give BNL, at its request
and
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direction,
such copies of BNL data maintained on the VIIP system in a format and in a
manner as designated by BNL. BNL shall pay a fee to VIP for preparing such
data.
Such fee shall be $100 per hour for programming time and $150 per hour computer
processing time.
8.
INDEMNIFICATION.
A.
BNL
agrees to indemnify, defend and hold VIP and its officers, directors,
stockholders, employees, agents and representatives harmless from any and all
claims, actions, damages, liabilities, costs and expenses reasonable attorneys'
fees and expenses arising out of or relating to (i) any acts or omissions of
BNL
pertaining to the EDP Services, including without limitation any breach of
this
Agreement by BNL or (ii) any information provided by or on behalf of, or any
instruction, approval or decision by, BNL pertaining to the EDP Services relied
upon by VIP .
B.
VIP
shall indemnify, defend and hold BNL and its officers, directors, stockholders,
employees, agents and representatives harmless from any and all claims, actions,
damages, liabilities, costs and expenses, including reasonable attorneys' fees
and expenses, arising out of any third party claims of infringement of any
United States patents, or a trade secret, or any copyright, trademark, service
xxxx, trade name or similar proprietary rights alleged to have occurred related
to VIP's providing of EDP Services pursuant to this Agreement or relating to
the
VIP System used in providing such EDP Services.
C.
Subject to the limitations set forth in paragraphs 9(E), 9(F) and 9(G) of this
Agreement and not including the claims covered by paragraph 8(B) of this
Agreement, VIP shall indemnify, defend and hold BNL and its officers, directors,
stockholders, employees, agents and representatives harmless from any and all
claims, actions, damages, liabilities, costs and expenses, including reasonable
attorneys' fees and expenses, arising out of or relating to (i) any acts or
omissions of VIP pertaining to the EDP Services, including without limitation
any breach of this Agreement by VIP , or (ii) any information provided by or
on
behalf of, or any instruction, approval or decision by, VIP pertaining to the
EDP Services relied upon by BNL.
D.
The
provisions of this paragraph 8 shall survive the termination of this
Agreement.
9.
VIP
REPRESENTATIONS AND WARRANTIES: DISCLAIMER: LIMITATIONS. In
addition to the other obligations of VIP under this Agreement VIP represents,
warrants and covenants to BNL both at the execution of this Agreement and at
all
times during the term of this Agreement that:
A.
VIP is
and will remain duly organized and validly existing as an Oklahoma corporation
(or another state) authorized to engage in the business of providing EDP
Services to its customers;
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B.
VIP is
not a party to or otherwise subject to any note, debenture, shareholder
agreement or other contractual arrangement, Order, Judgment Decree or
Adjudication which prohibits any act or conduct of VIP contemplated by this
Agreement or which would cause VIP to be in violation of or default respect
thereto;
C.
VIP
owns all necessary rights and interests in and to the VIP System and related
programs to fulfill its obligations under this Agreement. The VIP System does
not infringe on any United States patent or any trade secret, copyright,
trademark, service xxxx, trade name or similar third party proprietary right;
and
D.
VIP
warrants that all EDP Services shall be performed in a prompt and workmanlike
manner. Furthermore, the VIP System contains no programming condition which
will
limit the VIP System's use after a period of time elapses (such as a fixed
calendar limit) and thus thereafter prevent BNL ' s use of the VIP System
without further maintenance.
E.
Except
as set forth in paragraphs 9(a) through 9(d) inclusive of this agreement, with
respect to its EDP services or other work provided under this agreement, VIP
makes no warranties, express or implied, including, but not limited to, implied
warranties of merchantability and fitness for a particular purpose except as
set
forth in paragraphs 9(a) through 9(d) inclusive of this agreement, VIP does
not
warrant that the services shall meet BNL's requirements or that the services
shall be uninterrupted or error-free.
F.
Limitation of liability. VIP shall have no liability with respect to its
obligations under this agreement or otherwise for consequential, exemplary,
special, indirect, incidental or punitive damages even if it has been advised
of
the possibility of such damages in any event, other than claims covered by
paragraph 8(b) or paragraph 6(a) of this agreement (which claims are excluded
from this paragraph 9(f) limitation), the liability of VIP to BNL for any reason
and upon any cause of action or claim in contract, tort or otherwise shall
be
limited to the amount paid by BNL to VIP in the twelve (12) month period prior
to the accrual of the action or claim for the specific service which is the
subject of the action or claim (or, if such accrual occurs during the first
twelve (12) months of the initial term, then the liability shall be limited
to
the minimum fees payable by BNL to VIP during the first twelve (12) months
of
the initial term). except for the claims excluded by the preceding sentence,
this limitation applies to all causes of action or claims in the aggregate
including without limitation breach of contract, breach of warranty, negligence,
strict liability, misrepresentation and other torts. BNL and VIP acknowledge
and
agree that the limitations and exclusions contained herein represent the
parties' agreement as to the allocation of risk between the parties in
connection with VIP's obligations under this agreement. the payments payable
to
VIP in connection herewith reflect this allocation of risk and the exclusion
of
consequential damages in this agreement.
G.
Notwithstanding anything to the contrary in this Agreement, VIP shall not be
liable in
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any
manner to BNL for any costs, expenses, injury or damages of any kind or nature
which are caused by any of the following:
1. The
failure of computer hardware which are not covered by the standard warranties
and indemnification's of such manufacturers;
2. Software
designated and supplied by the computer hardware supplier; or by software
designed and implemented by other parties at BNL' request for which the
integrity of said software is BNL' sole responsibility;
3. Erroneous
data input or otherwise provided by BNL and/or failure of BNL to monitor and
for
the failure of BNL to respond to the auditing controls of the
system;
4. A
breach
by BNL of any of the terms, covenants, representations or conditions of this
Agreement;
5. The
failure by BNL to report to VIP in writing an error within a reasonable time
after BNL discovers or reasonably should have discovered such
error.
10.
COVENANTS
AND REPRESENTATIONS OF BNL.
In
addition to the other obligations of BNL under this Agreement BNL covenants
and
warrants to VIP both at the execution of this Agreement and at all times during
the term of this Agreement that:
A.
It is
and will remain a duly organized and validly existing corporation and insurance
company under the laws of the State of Arkansas (or another state) and is
otherwise authorized to do business in the State of Arkansas;
B.
It
holds and will continue to hold all permits, licenses and other governmental
authorization necessary for it to conduct its insurance business;
and
C.
It is
not a party to or otherwise subject to any note, debenture, shareholder
agreement or other contractual arrangement, Order, Judgment, Decree of
Adjudication which prohibits any act or conduct of BNL contemplated by this
Agreement or which would cause it to be in violation of or default with respect
thereto.
BNL
acknowledges that BNL, and not VIP, has the responsibility for compliance with
the maintenance and environmental standards for the operation of the on-site
user Equipment specified in paragraph 1.
11.
BNL
LIMITATION OF LIABILITY. BNL
shall
have no liability with respect to its obligations under this agreement or
otherwise for consequential, exemplary, special, indirect, incidental or
punitive damages even if it has been advised of the possibility
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of
such
damages. in any event, other than claims covered by the next sentence, the
liability of BNL to VIP for any reason and upon any cause of action and claim
in
contract, tort or otherwise shall be limited to the amounts paid by BNL to
VIP
in the twelve (12) month period prior to the accrual of the action or claim
for
the specific service which is the subject of the action or claim (or, if such
accrual occurs during the first twelve (12) months of the initial term, then
the
liability shall be limited to the minimum fees payable by BNL to VIP during
the
first twelve (12) months of the initial term) claims by VIP for the minimum
fees
and other fees and expenses owing by BNL under paragraphs 5, 15(a) and 15(c),
or
for a breach by BNL of VIP's proprietary rights as set forth in paragraph 13
are
excluded from this paragraph II limitation except for the claims excluded by
the
preceding sentence, this limitation applies to all causes of action or claims
in
the aggregate including without limitation breach of contract, breach of
warranty, negligence, strict liability, misrepresentation and other torts.
VIP
and BNL expressly acknowledge and agree that the limitations and exclusions
contained herein represent the parties' agreement as to the allocation of risk
between the parties in connection with BNL's obligations under this agreement
the payments payable to VIP in connection herewith reflect this allocation
of
risk and the exclusion of consequential damages in this agreement.
12.
VIP
OBLIGATION.
During
the term of this Agreement, in addition to its other obligations set forth
in
this Agreement, VIP shall:
A.
Maintain property insurance in an amount sufficient to replace or reconstruct
the hardware, software, data and facilities necessary for VIP to operate the
VIP
System and otherwise provide the EDP Services set forth in this Agreement and,
upon written request, shall provide BNL with evidence of the coverage, including
all applicable limits and conditions, and, upon written request, shall provide
BNL with evidence of all renewals, cancellations, expirations or modifications
of the coverage;
B.
Update
on a daily basis, sets of back-up data files for the BNL Data in the VIP System
at an off-site location and/or fire-proof safe that provides for its safety
from
destruction or theft. BNL will pay its prorata share based upon the number
of
the total users of the VIP System of the cost of storage and/or transportation
of back-up data files to and from the storage facility;
C.
At
BNL' s option and sole expense, micro-film, all reports or other records as
so
designated by BNL and store the same in a safe facility on or off the
operational location of VIP;
D.
Except
in instances beyond VIP's reasonable control under paragraph 16(J) or as
provided in paragraph 3, ensure the availability of the VIP system for BNL
' use
at least during the hours of7:00 a.m. through 5:00 p.m. (central time) each
day
Monday through Friday.
13. OWNERSHIP
OF THE VIP SYSTEM.
The VIP
System and related programs
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(including
software in connection herewith), are and shall at all times remain the sole
and
exclusive property of VIP. During the term of this Agreement or any extension
thereof, BNL shall have a non-exclusive license to use the VIP System on-line
as
designated by VIP. BNL shall not use the VIP System except as authorized by
this
Agreement Upon the expiration or earlier termination of this Agreement, neither
BNL nor any third party shall have any further right to use the VIP System
after
the retrieval of the BNL data pursuant to paragraph 6(A) of this
Agreement.
14.
ADDITIONAL
SERVICES.
A.
Subject to the terms of paragraph 14(C), and for the sums set forth in paragraph
14(B) hereof, VIP , during the term of this Agreement, agrees to provide the
following added services to BNL upon request:
1.
All
consultation, systems development, conversion services, programming, debugging
and testing of software, hardware, and for other services other than the VIP
System and which are unique to BNL products and/or method of doing
business;
2.
All
machine time used in connection with systems development, conversion services,
programming, debugging and testing of software, hardware and other vendor
services which are unique to BNL products and/or method of doing
business;
3.
Assistance of VIP in connection with the termination of either parties of its
services under this Agreement and the implementation of EDP service
by BNL with another data processing company;
4.
Additional processing resulting from changes in regulatory
requirements;
5.
Special, unscheduled, and/or non-standard system application
processing;
6.
Bank
draft processing.
B.
VIP
will provide BNL the above enumerated additional services at the hourly rates
set
forth
in
Schedule
A Schedule
of Charges and Fees for Additional Services, for the initial twelve (12) months
of this Agreement. After the initial twelve months of this Agreement, VIP may
adjust the rates in Schedule
A to
VIP's
then current standard rates for such services, provided that it provides BNL
with notice of any such adjustment not less ~han thirty (30) days prior to
any
such adjustment and that such rates shall not increase by more than ten ( 10%
)
percent per year .
C.
VIP
performance of such additional services for BNL is subject to availability
of
resources and the development of a schedule for delivery of such services which
is agreeable to both parties. VIP agrees to make a best effort attempt to
develop the required schedules with BNL.
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15.
TERM.
A.
The
initial term ("Initial Term") of this Agreement shall be for one year commencing
on the 1st day of May, 2006 ("Effective Date"). Payments under this Agreement
by
BNL shall commence as provided in paragraph 5(A) hereof.
B.
Unless
either party gives written notice to terminate this Agreement at least six
(6)
months prior to the end of said Initial Term, this Agreement shall continue
on a
year to year basis ("Extended Term(s)") until terminated by either party by
giving written notice of termination thereof to the other party at least six
(6)
months prior to the end of the then current Extended Term.
C.
However, if, after the Initial Term, BNL terminates this Agreement during an
Extended Term by giving less than six (6) months notice, in addition to any
other sums due VIP under this Agreement, BNL shall pay to VIP a cancellation
fee
equal to the greater of (i) the Minimum Fee multiplied by the remaining number
of months in the then current term, (ii) the average of the monthly xxxxxxxx
for
the six (6) month period immediately preceding the date upon which the notice
of
termination is received by VIP from BNL multiplied by the remaining number
of
months in the then current term or (iii) thirty thousand dollars ($30,
000).
E.
From
and after notice of termination is received by VIP, any new reports or other
services provided by VIP other than routine processing services which have
been
done for BNL under this Agreement shall be deemed to be additional services
and
shall be performed by VIP at VIP's then current rates for such termination
services as specified on Schedule
A.
F.
Upon
termination or expiration of this Agreement, BNL shall return all software
and
related manuals, if any, provided by VIP to BNL during the term of this
Agreement.
16.
MISCELLANEOUS.
A.
ADVERTISING.
During
the term of this Agreement BNL consents to the use of the name of BNL by VIP
in
identifying BNL as a client, in advertising, publicity, or similar materials
distributed to prospective clients. Except as set forth in this paragraph 16(A),
the terms of this Agreement shall be kept confidential.
B.
AMENDMENTS.
No
amendment, change, waiver, or discharge hereof shall be valid unless in writing
and signed by an authorized representative of the party against which such
amendment, change, waiver, or discharge is sought to be enforced. Any provision
of BNL' purchase' order or other request for services shall not bind VIP. VIP's
failure to object to any such provision shall not be construed as a waiver
of
the terms and conditions of this Agreement nor as acceptance of any such other
provision(s).
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C.
ARBITRATION.
Any
controversy or claim arising out of or relating to this Agreement, or its
breach, or its validity or interpretation, except claims for injunctive relief
and claims involving necessary third parties who refuse to participate, shall
be
settled by binding arbitration in accordance with the then current Commercial
Arbitration Rules of the American Arbitration Association (" AAA") subject,
however, to the following:
1.
The
location for the arbitration shall be at such location reasonably designated
by
the arbitrators.
2.
Such
arbitration shall be heard and determined by a panel of three (3) arbitrators
in
accordance with the then current rules or regulations of the AAA relating to
commercial disputes. One arbitrator shall be appointed by each party to serve
on
the panel. One neutral arbitrator shall be appointed by the AAA and shall serve
as chairperson of the three arbitrator panel. Such neutral arbitrator shall
be
an attorney with experience in handling disputes relating to the providing
of
out sourced electronic data processing services.
3.
The
arbitration award shall be binding on the parties and may be enforced in any
court of competent jurisdiction.
4.
The
prevailing party in such arbitration shall be entitled to recover its reasonable
attorneys' fees and costs incurred in such arbitration proceeding.
D.
ASSIGNMENT.
Neither
party to this Agreement shall assign, subcontract, or otherwise conveyor
delegate its rights or duties hereunder to any third party without the prior
written consent of the other party hereto, such consent not to be unreasonably
withheld.
E.
ATTORNEY
FEES.
In the
event that litigation is instituted between the parties in connection with
any
controversy or dispute arising out of or relating to this Agreement, the
prevailing party in such litigation shall be entitled to recover its reasonable
attorney fees and costs.
F.
BINDING.
This
Agreement is binding on, and shall inure to the benefit of VIP, BNL and their
respective successors and assigns.
G.
CHOICE
OF LAW.
This
Agreement and performance hereunder shall be governed by the laws of the State
of Oklahoma without regard to conflict of laws. Subject to the requirement
for
arbitration under paragraph 16(C), VIP and BNL hereby agree on behalf of
themselves and any person claiming by or through them that jurisdiction and
venue for any litigation arising from or relating to this Agreement shall be
in
the appropriate federal or state court located in Austin, Texas, or in Oklahoma
City, Oklahoma, and that any arbitration shall be conducted in the location
selected pursuant to paragraph 16(C)(1).
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H.
COUNTERPARTS.
This
Agreement may be executed in several counterparts, all of which taken together
shall constitute one single agreement between the parties hereto.
I.
ENTIRE
AGREEMENT.
This
Agreement, including any Schedules referred to herein or attached hereto, each
of which is incorporated herein for all purposes, constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and no prior or contemporaneous representations, inducements, promises, or
agreements, oral or otherwise, between VIP and BNL with reference thereto shall
be of any force or effect.
J.
FORCE
MAJEURE. Notwithstanding
anything to the contrary in this Agreement, but except to the extent provided
in
paragraph 2, VIP shall not be liable to BNL for any delay or failure to perform
any of the EDP Services or other obligations set forth in this Agreement due
to
cause(s) beyond its reasonable control, including, without limiting the
generality of the foregoing, (i) accidents, (ii) acts of God, (iii) labor
disputes, (iv) BNL's failure to submit data or information in the prescribed
form or in accordance with the agreed upon schedules; (v) special requests,
outside the VIP Systems' functions routinely utilized by BNL, by BNL or any
governmental agency authorized to regulate or supervise BNL or any authority
having jurisdiction over BNL; (vi) BNL's failure to provide any equipment,
software, facility or performance called for by this Agreement, and the same
is
necessary for VIP's performance hereunder, (vii) BNL's material breach of any
of
the terms, covenants, or representations set forth in this Agreement or (viii)
the actions of any government agency or common carrier or other third party
over
whom VIP has no control. Performance times shall be considered extended for
a
period of time equivalent to the time lost because of such delay.
K.
HEADINGS.
The
paragraph headings used herein are for reference and convenience only and shall
not enter into the interpretation hereof.
L.
INDEPENDENT
CONTRACTOR.
VIP and
BNL are strictly independent contractors. Neither party has the right to bind
the other in any manner, and nothing in this Agreement shall be interpreted
to
make either party the agent or legal representative of the other or to make
the
parties joint venturers or partners.
M.
LIMIT
A TIONS OF ACTIONS.
Any
claim of action of any kind which one party to this Agreement may have against
the other party relating to or arising out of this Agreement must be commenced
within two (2) years from the date such claim or cause of action shall have
first accrued.
N.
NOTICES.
Any
notice provided pursuant to this Agreement, if specified to be in writing,
shall
be in writing and shall be deemed given (i) if by hand delivery, upon receipt
thereof (ii) if mailed, three (2) days after deposit in the United States mails,
postage prepaid, certified mail return receipt requested, or (iii) if by next
day delivery service, upon such delivery .All notices shall be addressed to
a
party at the address first set forth above or at such other address as either
party may in the future specify in writing to the other .
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0.
SERVICES
FOR OTHERS.
BNL
understands and agrees that VIP may perform for third. parties similar services
using the same personnel, subject to VIP's confidentiality obligations
hereunder, and that VIP may utilize such personnel for rendering services for
BNL hereunder.
P.
SEVERABILITY.
If any
provision of this Agreement shall be invalid or unenforceable, the remaining
provisions of this Agreement shall not be affected thereby and each remaining
provision shall be valid and enforceable to the fullest extent permitted by
law.
Q.
SURVIVAL.
All
provisions of this Agreement relating to confidentiality and indemnity shall
survive the termination of this Agreement.
R.
NO
THIRD PARTY BENEFICIARY.
No third
party is intended to be nor shall any such third party be deemed to be a third
party beneficiary of this Agreement nor shall any third party acquire any rights
or remedies under or through this Agreement.
S.
WAIVER,
Any
waiver by a party of any breach of any provision of this Agreement shall not
be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of that provision itself or a waiver of any other right(s) under this
Agreement.
The
parties agree and acknowledge that they have read this Agreement. The persons
signing below on behalf of the respective parties represent and warrant that
they have the authority to bind the party on which behalf they have executed
this Agreement. This Agreement is executed on the dates shown below and
effective as of the Effective Date identified above.
VIRTUAL
ITEM PROCESSING SYSTEMS INC. BROKERS
NATIONAL LIFE ASSURANCE
COMPANY
/s/
Xxxxx X.
Xxxxxxx
/s/
Xxxxx X. Xxxxxx
By:
_____________________________________ By:
_________________________________
Xxxxx
X.
Xxxxxxx Xxxxx
X.
Xxxxxx
President Executive
Vice President
May
17,
2006 May
18,
2006
Date:
___________________________________ Date:
_______________________________
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SCHEDULE
A
SCHEDULE
OF CHARGES AND FEES
FOR
ADDITIONAL
SERVICES
SYSTEMS
AND PROGRAMMING SERVICES HOURLY
RATE
1.
CONSULTATION $100.00
2.
SYSTEMS DEVELOPMENT
100.00
3.
SYSTEMS REQUIREMENTS DEFINITION
100.00
4.
SYSTEMS ANALYSIS
100.00
5.
COMPUTER PROGRAMMING:
SENIOR
ANALYST
100.00
JUNIONANALYST
85.00
COMPUTER
TIME FOR SYSTEM DEVELOPMENT
6.
COMPUTER CHARGED TIME
$150.00
TERMINATION
SERVICES
7.
CONSULTATION
$100.00
8.
PROGRAMMING
$185.00
9.
COMPUTER CHARGED TIME
$250.00
ADDITIONAL
REGULATORY PROCESSING
10.
COMPUTER CHARGED TIME
$150.00
SPECIAL
OR NON-STANDARD APPLICATION PROCESSING
11.
COMPUTER CHARGED TIME
$150.00
EDUCATION
AND HELP
12.
EDUCATION: IN VIP OFFICES $
50.00
13.
EDUCATION: ON-SlTE
90.00
14.
PROCEDURAL HELP VIA TELEPHONE
50.00
BANK
DRAFTS UNIT
RATE
15.
BANK
DRAFT PROCESSING (PER DRAFT)
$
.06
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SCHEDULE
B
SCHEDULE
OF PROCESSING FEES
PLAN
NAME
OF
CATEGORY
All
BNL
Plans
Fee
=
$.305/per policy per month
