EXHIBIT 10(e)
AMENDED AND RESTATED AGREEMENT
AGREEMENT effective as of the 1st day of January, 1998,
between the American Association of Retired Persons ("AARP"), and
the Foremost Corporation of America, a Delaware Corporation
("Foremost").
WITNESSETH
WHEREAS, AARP has reviewed and assessed the license of
Foremost to use the AARP Trademarks and Member Mailing List for
the AARP Mobile Home Insurance Program provided since 1989 by
Foremost and has determined that the Program, as provided by
Foremost, has achieved success in making available to AARP
members mobile home Insurance with unique features tailored to
meet the needs of mobile homeowners, warranting the continuation
of the Program, as provided by Foremost, pursuant to the terms
hereof. The parties consider it desirable to continue said
Program under an amended and restated agreement; and
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WHEREAS, AARP and Foremost desire to amend and restate their
agreement so as to more clearly set forth the rights and
obligations of the parties.
NOW THEREFORE, IT IS AGREED:
I. Definitions
(a) "AARP" means the American Association of Retired
Persons and any of its divisions or categories of membership.
(b) "Foremost" means the Foremost Corporation of America
and any of its wholly-owned subsidiary insurance corporations and
Foremost County Mutual Insurance Company through which Foremost
shall elect to offer or make available mobile homeowners
insurance to members of AARP.
(c) "Mobile Home" means a factory fabricated transportable
permanent housing unit, built on a chassis, designed to be used
as a dwelling with or without a permanent foundation when
connected to the required utilities. It may be equipped with one
or more room sections that fold, collapse or telescope into a
principal structure when being transported and which can be
expanded at the site to provide additional living area. The
comprehensive mobile home coverage is to include the value of
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built-on additions to the mobile home, as well as insured
property purchased with the home and included within the
installment contract, i.e., stove, refrigerator and other items
which come as part of the mobile home, unless covered under the
personal property section of the policy. The term mobile home
shall also include a manufactured home as defined in the National
Manufactured Housing Construction and Safety Standards Act of
1974, 42 U.S.C. 5401-5426 and shall include any subsequent or
successor amendments. The term "mobile home" shall also include
modular or prefabricated homes, that are valued at less than
$35,000 or are not located on a permanent foundation, even if not
built on a chassis.
(d) "Best Efforts" means Foremost's efforts to remedy any
failure to meet standards set in Sections VI. (b) and (c) as well
as the efforts required by Section VIII. (b) (iv). Best Efforts
shall include Foremost's design and implementation of a plan,
satisfactory to AARP, to reach a standard, in as timely a manner
as possible and shall also include the utilization of the
resources needed to meet the standard. Foremost may suggest for
AARP's consideration, the amendment of a standard or a timetable
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for meeting a standard. Should AARP fail to approve the course
of action determined by Foremost as necessary to meet or modify a
standard or to design a plan pursuant to Section VIII. (b) (iv),
Best Efforts would require the retention by Foremost of a neutral
expert (knowledgeable and experienced in the industry),
acceptable to both parties, to recommend a range of options to
achieve the standard or plan.
(e) "The Program" means the AARP Mobile Homeowners
Insurance Program.
(f) "Written Premium" means all premium written by
Foremost under this Program, minus reductions, credits or refunds
due to cancellations by the insured or by Foremost.
(g) "Quality Control" means any and all standards imposed
by this Agreement upon Foremost to ensure that activities of
Foremost with respect to the Program comply with the terms of
this Agreement and do not deprecate the value of the AARP name,
symbol, xxxx, logo and acronym being licensed to Foremost in
connection with its operation, administration and offering of the
Program.
(h) "Policyholder(s)" means members who, in conjunction
with the Program, elect to purchase insurance from Foremost.
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(i) "Policyholder(s) Data" means information generated or
accumulated by Foremost from any source, excluding Member Mailing
List, regarding Policyholder(s) including, but not limited to,
insurance applications, insurance policies, claim records,
underwriting information, financial information, expiration
dates, coverage, and other Policyholder information.
(j) "Prospect(s)" are AARP members who, in conjunction
with the Program, request information about insurance coverage
within the past six months, but who have not yet purchased an
insurance product from Foremost.
(k) "Prospect(s) Data" means information generated or
accumulated by Foremost from any source, excluding Member Mailing
List, regarding Prospect(s) including, but not limited to
insurance applications, insurance policies, underwriting
information, financial information, expiration dates, coverage,
and other Prospect information.
(l) "Non-Active Prospect(s)" means any Prospect(s) whose
file does not have an open diary in Foremost's Direct Marketing
System.
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II. Exclusive Riqht to Use of AARP Name, Symbol, Xxxx, Logo
and Acronym.
For the term of the Agreement, AARP grants to Foremost the
exclusive right and license to use its name, symbol and acronym
("AARP Trademark"), solely in connection with the Program.
Use of the AARP Trademark will be subject to the prior
quality control approval of AARP, including without limitation,
Foremost generated direct mailings, advertisements, brochures, or
any other form of member contact initiated by Foremost.
III. Property Rights In and Confidentiality
of Information
(a) Foremost will have access to AARP names, addresses, and
member identification number(s), ("Member Mailing List") in order
to communicate information concerning the Program and to broadly
inform the AARP members who are mobile home owners of the
Program's availability. The Member Mailing List is and at all
times shall remain the exclusive property of AARP and at any
time upon request by AARP will be returned to AARP. Foremost
agrees that the use of AARP Member Mailing List will be
restricted exclusively to the development and offering of the
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Program and will be subject at all times to prior approval of
AARP.
(b) Upon termination of this Agreement and at AARP's
direction, Foremost shall turn over to AARP all copies, tapes and
duplication of the Member Mailing List specified in Section (a)
then in its or its agents' possession, and shall retain no Member
Mailing List, except that Foremost expressly reserves the right
to information arising out of specific insurance transactions.
(c) The parties acknowledge that many of the materials to
be used in connection with the Program will contain Foremost
trademarks, service marks, logos, slogans, etc. (collectively
"marks") which are the property of and have been duly registered
or identified to AARP by Foremost for its exclusive use. AARP
agrees that it does not have, and by reason of this Agreement
will not acquire, any property right or rights to use such marks
without Foremost's prior written consent. In the event of
termination of this Agreement, AARP will not use such marks
without express written consent of Foremost. Other than such
Foremost marks, any trade or service name or xxxx which is used
in connection with the Program shall be the property of AARP and
Foremost shall have no property or other rights thereto.
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(d) The Member Mailing List, referred to in Section (a) may
not be provided by Foremost to any vendor or any other person,
corporation, firm or entity not a party to this Agreement without
the prior written consent of AARP. Such AARP written consent may
be conditioned upon the execution by such vendor or other person,
firm, corporation or entity of a security and confidentiality
agreement, acceptable to AARP, to safeguard the confidentiality
of such Member Mailing List.
Foremost has established and will maintain a system to
ensure that, should the computer tapes, disks, electronic or
other records containing Policyholder Data and Prospect Data that
Foremost has in its possession be destroyed or damaged by fire or
other casualty, such Policyholder Data and Prospect Data shall be
recaptured and reconstituted by Foremost's information systems.
(e) In performing its obligations under this Agreement and
in providing the insurance products sold under the Program,
Foremost will generate and have the right to maintain
Policyholder Data and Prospect Data. AARP agrees that the
Policyholder Data and Prospect Data shall be and remain the sole
property of Foremost unless a Policyholder or a Prospect requests
transfer of their data pursuant to Section VIII. (f).
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(f) Each party recognizes that in the exercise of rights
granted under this Agreement, it may from time to time receive
information relating to the business or affairs of the other
which has been identified as confidential, or which from
the circumstances in good faith should be treated as
confidential. All such information is and shall remain
exclusively the property of the other party (the "Discloser"),
who shall retain all title, right and interest therein. The
recipient of such confidential information (the "Recipient")
shall hold all such information in confidence and shall safeguard
it all, and the Recipient shall make use of any such information
solely for the purposes of this Agreement or as otherwise agreed
between the parties. The Recipient shall use all reasonable
efforts not to disclose any such information to any person except
such of its employees or consultants who need the information to
accomplish purposes permitted by this Agreement and who have been
properly advised of the obligations of the Recipient hereunder
and have agreed to abide by such obligations in writing.
Information received from the Discloser shall not be deemed
to be proprietary information and/or confidential information,
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and the Recipient shall have no obligations with respect to such
information which is: (A) already known to the Recipient from
sources other than the Discloser; (B) publicly known through no
wrongful act of the Recipient; (C) received by the Recipient from
a third party without similar restriction and without breach of
this Agreement; (D) independently developed by the Recipient; (E)
approved for release to a third party by written authorization of
the Discloser; or (F) disclosed pursuant to the lawful
requirement or request of a court of competent jurisdiction or
government agency.
Information developed by AARP and Foremost may not be
disclosed to any third party unless AARP and Foremost mutually
agree to such disclosure.
The provisions of this Section (f) shall survive termination
of this Agreement.
IV. Royalty
(a) Solely for the right to use the AARP Trademark and
Member Mailing List, Foremost shall pay a royalty fee to AARP in
an amount equal to 3% of Written Premium, including new policies
and renewal policies sold to AARP members pursuant to
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this Agreement. Such fee shall be paid monthly during the term
hereof on such premiums written during the previous month.
(b) Upon the termination of the Agreement, as long as AARP
shall thereafter not enter into a license agreement for the use
of the AARP Trademark by another insurance company as the carrier
for mobile homeowners insurance written under any other program
which succeeds the Program, Foremost will continue to pay to AARP
for seven years a royalty fee of l.5% of Written Premiums by
Foremost on the renewal of mobile homeowners insurance policies
initially written by Foremost through the Program during the term
of this Agreement.
(c) The foregoing royalty fees constitute the sole and
entire payment which AARP is entitled to receive hereunder or
otherwise from Foremost for the license granted hereunder.
V. Advertising Fees
In addition to the royalty provided for in Section IV.,
Foremost shall pay to AARP on an as used basis the following:
(a) Foremost shall pay to AARP a fee for the right
described in Section VI (b) (v) to advertise the
Program in the AARP publications which accept
advertising.
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(b) Foremost shall pay to AARP a fee for the right to place
Program materials, or "inserts", on an as used basis,
into new and renewing membership kits distributed by
AARP.
VI. Quality Assurance Standards
In order to protect the AARP Trademark and Member Mailing
List, the following standards will be maintained by Foremost:
(a) Insurance Policies Offered
(i) Foremost agrees to offer or make
available mobile homeowners property and
casualty insurance products on a direct
response basis, without the intervention
of agents (except to the
extent that state insurance laws or
regulations may require resident agents,
recording agents or countersigning
agents), to all AARP members who own
mobile homes. The insurance product
will be an exclusive policy or policies
designed for offering to AARP members.
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(ii) The parties agree that Foremost retains
the right to make changes in the
provisions, coverages and features of
policies offered to AARP members. As
Foremost develops such changes, it shall
present same to AARP for Quality Control
review before using same in connection
with the rights granted to Foremost to
use the AARP Trademark and Member
Mailing List.
(iii) All policies issued to AARP members
shall be governed by the terms of the
policies, by applicable state statutes
and by governmental regulations. The
parties agree that it is not intended
that this Agreement shall amend or
become a part of any insurance policy
issued to an AARP member, but that this
Agreement only governs the contractual
obligations between AARP and Foremost.
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(iv) This Agreement shall be construed as
having the Program available to AARP
members only. Notwithstanding, this
Agreement does not prevent Foremost from
complying with applicable state and
local laws that may require Foremost to
make available the same or similar
insurance policies to insureds who
otherwise qualify but are not members of
AARP and who request a policy.
(v) AARP shall assure to its satisfaction
that Foremost is offering a Program
uniquely responsive to the needs of
older mobile homeowners as reflected by
a combination of coverage features,
pricing, availability and service
quality designed to be of particular
value to the older population. Foremost
shall provide to AARP such information
as is reasonably necessary to monitor
the Program.
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(vi) This Agreement shall not be construed as
preventing Foremost from offering mobile
home insurance policies to persons who
are not AARP members.
(b) Customer Service Structure
(i) Foremost shall provide a special service
unit dedicated to the Program.
(ii) Foremost shall provide special training
for its staff dedicated to the Program
to provide an awareness to its staff of
the needs of the population served by
the Program.
(iii) Foremost shall maintain a claims
structure which provides timely service
to Program participants who file claims.
(iv) Foremost agrees to provide a high level
of service to people interacting with
the Program. Service standards,
contained in Appendix "A", shall be met
or exceeded by Foremost in the time
frame stated in the Appendix. Foremost
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will report to AARP at least quarterly
on its performance under the standards,
and will make its Best Efforts to modify
any deficiencies.
(v) Foremost will perform all marketing of,
and advertising for, the Program, and
will advertise the Program in AARP
publications, MODERN MATURITY, and the
AARP Bulletin. These advertisements
will be in addition to Foremost's direct
mail solicitation. Foremost will take
all appropriate means to make sure that
all AARP member mobile homeowners are
aware of the Program's availability and
have an opportunity, pursuant to
applicable underwriting guidelines to
enroll in the Program.
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(c) Economic Standards Necessary to Protect the AARP
Trademark
(i) Foremost has developed a comprehensive
mobile homeowners policy for direct
offering to AARP members. The premium
rates associated with such offering
depend upon various factors, including
but not limited to, weather patterns,
exposure to natural perils, loss
experience, inflation, market
conditions, policy acquisition costs and
other underwriting factors. Foremost
retains the right to establish the
policy premium rates and AARP retains
the right to review the premium rates.
On the occasions on which Foremost deems
it necessary to adjust premium rates
during the term of this Agreement,
Foremost agrees to give written notice
of said adjustment to AARP for prior
review.
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(ii) Program premiums shall be between 5% and
l0% (percent) below the national average
rates charged by selected competitors
for mobile home insurance policies, by
year-end 1999, with a goal of at least
l0% (percent) below the national average
rates charged by selected competitors.
The measurement to determine the percent
to the national average rates is set
forth in Appendix "B."
(iii) Foremost shall report to AARP on the
Program as compared to the standard at
least quarterly, and Foremost shall
review the Program as compared to the
standard in the 20 states with the
largest AARP mobile homeowners
population at least annually. All other
states shall be reviewed for determining
compliance with the standard at least
bi-annually.
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(iv) The parties agree that Foremost retains
full underwriting authority as to the
acceptance and rating of any given risk
or policy issued to AARP members. A
copy of the current underwriting
guidelines are in Appendix C which
Foremost may change from time to time.
Foremost will provide a copy of its
underwriting guides applicable to this
Program to AARP.
(v) As a Program availability standard,
Foremost agrees that a minimum national
Program availability rate of 80%
(percent) will be reached by year-end
1999. By the end of 1999, Foremost
shall develop a plan outlining its Best
Efforts in attaining and maintaining a
minimum national Program availability
rate of 85% (percent) by the end of
2002. Foremost shall report national
availability rates to AARP at least
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quarterly. Should the national
availability rate fall below these
percentages, Foremost shall make its
Best Efforts to bring the rate to or
above these percentages. If any of
AARP's top 5 membership states for
mobile homeowners fall outside of the
80% (percent) national average, Foremost
shall inform AARP and will use its Best
Efforts to develop a plan to reach the
national average.
(vi) Should Foremost fail to meet the
standard(s) set by Subsections (ii) and
(v), Foremost shall use its Best Efforts
to meet the standard(s).
(vii) For policies issued pursuant to the
Program, Foremost shall guarantee their
lifetime continuation, except for the
reasons set forth in Appendix "D".
(d) Appendices "A" - "D" may be amended by mutual agreement
of the parties.
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VII. Foremost's Responsibility for Planning, Budgets and
Reporting to AARP to Comply with Quality Control
Requirements.
(a) Operating Plan For the purpose of assisting AARP in
enforcing Quality Control, Foremost shall prepare at least once
a year a comprehensive Operating Plan for the upcoming year, to
enable evaluation of performance standards as set out in this
Agreement. The 1998 Operating Plan shall become Appendix "E" to
this Agreement, provided that, should there be a conflict between
Appendix "E" and the Agreement, the Agreement shall prevail.
Through such plan Foremost shall demonstrate how it proposes to
perform in relation to the:
(i) Quality assurance standards (as
described in Section VI;
(ii) Program service standard (as
described in Section VI (b) (iv);
(iii) Program competitive standard (as
described in Section VI (c) (ii);
(iv) Program availability standard (as
described in Section VI (c) (v);
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In addition, as part of the Operating Plan,
Foremost shall provide:
(v) estimated royalty payments and
(vi) its strategy for communicating the
availability of the Program to AARP
members.
(b) To enable AARP to verify the ability of Foremost to
fulfill its obligations set out in this Agreement, Foremost shall
provide to AARP:
(1) annual audited financial statements upon their
completion and (2) upon reasonable request, financial information
necessary for AARP to determine Foremost's financial capacity to
fully perform under this Agreement.
(c) Audits and Inspections As part of Quality Control,
AARP or its authorized representatives may review information
requested of and provided by Foremost as AARP determines
necessary. Foremost shall afford AARP or its authorized
representatives reasonable access to such information, including
records and data relating to the Operating Plan, service
standards, and other aspects of the Program, as AARP may
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reasonably request in order to assure Quality Control. Neither
AARP nor its representative shall have access to Policyholders'
claim files unless the express written consent of the
Policyholder has been secured, or such access is necessary either
to respond fully to any written inquiry received from a
Policyholder by AARP or otherwise to fulfill the responsibilities
of AARP to a Policyholder, subject to Policyholder privacy
rights.
(d) Foremost and AARP or its representative(s) shall review
annually the level of reinsurance that may be needed to
adequately protect the solvency of the Program.
VIII. Terms and Termination of Agreement
(a) The term of the Agreement shall commence January 1,
1998 and continue until December 31, 2004. If either party
intends to permit the Agreement to terminate on December 31,
2004, it shall so notify the other in writing on or before
January 1, 2004. In the absence of any such notice, and unless
otherwise agreed to in writing by the parties, the Agreement will
automatically extend for one year beyond December 31, 2004.
Thereafter, the Agreement will automatically extend for
additional annual periods beyond the dates specified herein if
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notice is not given before January 1 of any year subsequent to
January 1, 2004, it being the intention of the parties that the
Agreement shall always be one (1) year from termination in order
to assure an orderly termination or transfer of the Program.
(b) Anything herein to the contrary notwithstanding, the
Agreement may be terminated prior to the time set forth in
Section (a) above for the following reasons:
(i) by mutual agreement;
(ii) by either party if the other
becomes insolvent, assigns all or
any part of its assets for the
benefit of creditors, or upon the
filing of any petition in
bankruptcy, voluntarily or
involuntarily;
(iii) by either party if the other is in
material default of its obligations
under the Agreement and
if such default continues for more
than ninety (90) days following
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written notice to cure and failure
to do so;
(iv) in any jurisdiction, by Foremost,
if any law or regulation of
federal, state or local government
shall render the Agreement illegal
insofar as it applies to such
jurisdiction and after Foremost's
Best Efforts cannot effect
satisfactory changes to eliminate
the problem causing such illegality
or its inability to operate in such
jurisdiction would render
Foremost's continued performance
under the Agreement unduly
burdensome or impossible, by
Foremost giving notice to AARP to
such effect.
(v) by AARP in the event control of
Foremost Insurance Company is
transferred to an extent that
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entitles the transferee(s) or gives
power to the transferee(s) to
appoint or elect a majority of the
Board of Directors of Foremost
Corporation of America or in the
event Foremost sells or otherwise
disposes of any substantial portion
or all of its assets.
In order to allow AARP
sufficient time to decide whether
to assert its right to terminate in
accordance with this subparagraph,
Foremost shall provide written
notification about the proposed
transfer or sale to AARP at the
earliest possible date (subject to
advice of Foremost's counsel as to
insider information issues)
provided, however, that if AARP
asserts a right to terminate, it
shall notify Foremost in writing of
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its assertion within 30 days after
notice from Foremost.
(vi) By AARP, if after using its Best
Efforts, Foremost fails to meet its
pricing and service standards as
set forth in the appendices and
outlined in the performance
standards sections and as modified
during the course of this Agreement
and if such failure continues for
more than ninety days following
written notice by AARP to Foremost.
If AARP asserts a right to
terminate in accordance with this
subparagraph, said termination
shall occur one year following
written notice to cure and failure
to do so.
(vii) By AARP in its reasonable judgment,
if after AARP disapproval, Foremost
eliminates any feature, implements
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a premium rate or changes
underwriting guidelines that
materially reduce the uniqueness of
the Program so that if it had been
that way initially, AARP would not
have had the Program. If AARP
asserts a right to terminate in
accordance with this subparagraph,
said termination shall occur one
year following written notice.
(viii) By AARP, if in its reasonable and
good faith judgment, it determines
that Foremost's financial situation
has changed to such an extent that
Foremost will be unable to
adequately perform its obligation
under the Agreement.
(c) Upon termination of this Agreement, Foremost will
within 30 days notify all Policyholders insured under the former
Program of the termination of the license to use the AARP
Trademark and Member Mailing List.
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(d) Upon termination of this Agreement, Foremost has the
obligation to inform Prospect(s), at the next contact with said
Prospect(s), about the status of the Program, including if
appropriate, the termination of the license to use the AARP
Trademark and Member Mailing List and Foremost shall not further
solicit any Non-Active Prospects.
(e) Upon the termination of this Agreement, AARP shall have
sole right, title and interest in the Member Mailing List and
Non-Active Prospect list.
(f) If this Agreement terminates for any reason and AARP
shall have licensed or does thereafter within two years license
the AARP Trademark to another insurance company or companies to
provide for its members a program similar to the Program, AARP
and Foremost will provide for an orderly transfer of Policyholder
Data and Prospect Data, the intent being to respond
to Policyholder and Prospect requests to transfer their data to
the succeeding company, if such transfer of data will not violate
any state or federal privacy laws. However Foremost has the
obligation to offer to renew the Policyholders' policies.
Policyholders have the option of remaining Foremost insureds.
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(g) In the event of notice by either party in accordance
with Section (a) or (b), Foremost may, in its discretion, reduce
or entirely eliminate its marketing and sales activities.
IX. Dispute Resolution
Any dispute arising out of or relating to the Agreement or
Program including, but not limited to, interpretation, validity
or breach of the Agreement shall be settled by arbitration
conducted in the District of Columbia pursuant to the rules of
the American Arbitration Association then in effect. Any such
arbitration shall be conducted before a panel of three
arbitrators, one of whom shall be selected by Foremost and a
second of whom shall be selected by AARP. Each arbitrator
selected by the parties hereto shall be chosen within ten
business days after the receipt of a written demand for
arbitration. The two arbitrators so selected shall, within
twenty days of their own selection, jointly choose the third
arbitrator and, failing agreement upon the third arbitrator
within such time, any party may apply to the American Arbitration
Association for the selection of the third arbitrator. Any award
of the arbitrators may be rendered by majority vote.
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The parties hereto consent to personal jurisdiction over
them in the courts of the District of Columbia in connection with
any application to compel arbitration pursuant to this Section or
for the entry of judgment upon any arbitration award. Service of
process upon any party shall be sufficient if made in accordance
with the laws of the District of Columbia or in accordance with
the notice provision of Section KIll. (g) hereof.
X. Relationship of The Parties
Neither AARP nor Foremost are now, nor shall they
become or be considered as, either principal or agent of the
other in connection with the Program, nor shall AARP and Foremost
be joint venturers or partners either in carrying out their
respective duties and obligations under this Agreement or for any
other purpose. AARP is not, nor will it become or be considered,
as having an ownership interest in the Program or in Foremost
(except AARP is the sole and exclusive owner of all proprietary
and other property rights and interests in and to the AARP
Trademark), and AARP shall not be liable or responsible in any
such capacity or capacities. Accordingly, Foremost shall at no
time and in no medium or manner state or
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imply that the AARP has any such interest in, or connection with,
Foremost or the Program except that Foremost may, in promotional
materials, describe or provide information about the license
granted hereunder.
XI. Representations and Warranties
(a) AARP represents and warrants to Foremost:
(i) AARP has full power and authority to execute,
deliver and perform the Agreement and the
transactions contemplated hereby, and the
Agreement has been duly authorized, executed
and delivered by AARP and constitutes a
legal, valid and binding obligation of AARP,
enforceable against it in accordance with its
terms except as the same may be limited by
bankruptcy, insolvency, reorganization or
other laws relating to or affecting
creditors' rights generally.
(ii) No consent, approval, authorization, order,
registration or qualification of or with any
court or government agency or body having
jurisdiction over AARP, is required for the
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execution, delivery or performance of the
Agreement by AARP.
(iii) The execution, delivery and performance of
the Agreement by AARP has been approved by
all necessary action, corporate or otherwise,
and neither the execution, delivery nor
performance of this Agreement will conflict
with or result in a material breach of or
default under any of the terms or provisions
of its certificate of incorporation, bylaws,
any statute, any order, rule or regulation of
any court or government agency or body having
jurisdiction over it or any indenture,
mortgage, deed of trust, loan agreement or
other material agreement or instrument to
which AARP is a party.
(b) Foremost represents and warrants to AARP:
(i) Foremost has full power and authority to
execute, deliver and perform this
Agreement and the transactions
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contemplated hereby and this Agreement
has been duly authorized, executed and
delivered by Foremost and constitutes a
legal, valid and binding obligation of
Foremost enforceable against it in
accordance with its terms, except as the
same may be limited by bankruptcy,
insolvency, reorganization or other laws
relating to or affecting creditors'
rights generally.
(ii) No consent, approval, authorization,
order, registration or qualification of
or with any court or government agency
or body having jurisdiction over
Foremost is required for the execution,
delivery or performance of the Agreement
by Foremost, except with respect to
those filings and approvals of insurance
policies, and advertising required by
state regulatory authorities.
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(iii) The execution, delivery and performance
of the Agreement by Foremost has been
approved by all necessary action,
corporate or otherwise, and neither the
execution, delivery nor performance of
the Agreement by Foremost will conflict
with or result in a material breach of,
or default under, any of the terms or
provisions of its certificate of
incorporation, or bylaws or any present
statute, order, rule or regulation of
any court or government agency or body
having jurisdiction over it or any
indenture, mortgage, deed of trust, loan
agreement or other material agreement or
instrument to which Foremost is a party.
(c) Survival of Representations All representations and
warranties made by the parties in the Agreement shall survive the
execution and delivery hereof.
XII. Indemnifications
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(a) Foremost shall, at its own expense, defend, indemnify
and hold harmless AARP, its officers, directors, trustees,
employees and agents, subsidiaries and affiliates with respect to
any claims by insureds, arising out of their participation in the
Program for actual damage or loss or punitive damages arising out
of or relating to disputes over insurance benefits received or
due from Foremost, policyholder administration or service by
Foremost, lack of diligence or good faith on the part of Foremost
in the issuance of policies or processing or settlement of claim
disputes, provided, however, that AARP shall give prompt notice
to Foremost of any such claim asserted against them or their
officers, directors, trustees, employees, agents, subsidiaries or
affiliates, and shall give Foremost the opportunity to defend
against any such claim. Foremost shall also, at its own expense,
defend, indemnify and hold harmless AARP, its officers,
directors, trustees, employees, and agents with respect to any
claim by any person for actual damage or loss or punitive damages
arising out of or relating to the use by Foremost of the
information concerning such member insured or nonmember,
provided, however, that prompt notice shall be given to Foremost
36
of any such claim asserted against them or the above described
persons associated with them and Foremost shall be given the
opportunity to defend against such claim.
(b) Each party hereto shall indemnify and hold harmless the
other from, against and in respect to any and all liabilities,
damages, claims, costs and expenses (including reasonable fees
and expenses of counsel) arising out of, resulting from or
incurred in connection with any breach by it, of its
representations, warranties, covenants or agreements contained in
the Agreement.
(c) Notwithstanding anything to the contrary in Section
(a) or (b), no party hereto shall indemnify or hold harmless any
other party from, against or in respect to any or all
liabilities, damages, claims, costs or expenses (including
reasonable fees and expenses of counsel) arising out of or
resulting from the negligence, intentional misconduct or bad
faith of such other party.
XIll. General Provisions
(a) This Agreement constitutes the entire agreement among
the parties with respect to the matters treated herein and
supersedes
37
and replaces the prior Agreement between the parties dated
December 7, 1989. Modifications or amendments to the Agreement
shall be effective only if in writing and signed by the parties.
(b) The parties shall keep each other reasonably informed
about legal or any other developments affecting the Program,
shall cooperate with one another to carry out and implement the
terms and objectives of the Agreement and shall perform such
further acts, execute such further documents, and enter into such
further agreements as may be necessary or appropriate to these
ends. Without limiting the foregoing, each shall permit the
other party (and its authorized representatives) reasonable
access to its files and records and shall make available to the
other party (and its authorized representatives) for consultation
responsible officials for the purpose of more fully carrying out
the terms and objectives of the Agreement, provided that the same
be requested during normal business hours and upon reasonable
notice.
(c) Foremost may from time to time propose to AARP, for its
approval, additional products to include within the Program.
Should AARP desire to enter into a license of the AARP
Trademark with a provider of any property casualty insurance
38
products not covered by the terms of this Agreement, AARP shall
first give Foremost a reasonable opportunity to make a proposal
to provide such a product. AARP retains the right, in its sole
discretion, following timely receipt of the Foremost proposal and
discussion with Foremost to seek competitive bids for such a
product.
(d) The Agreement confers no rights whatsoever upon any
persons, including any AARP members or Policyholder(s) or
Prospect(s), other than the parties hereto.
(e) The Agreement shall be governed by and interpreted in
accordance with the laws of the District of Columbia applicable
to agreements made and to be performed wholly within the District
of Columbia.
(f) The parties recognize that damages would be an
inadequate remedy for the breach of many of the provisions of the
Agreement and that prompt, equitable relief, prohibitory or
mandatory, may be appropriate in many circumstances. In the
event of any arbitration arising out of or relating to the
Agreement, the arbitrators are encouraged to take account of this
recognition and to fashion appropriate equitable relief when
circumstances warrant.
39
(g) Notices required or appropriate to be given under the
Agreement shall be given by hand delivery or facsimile
transmission and by certified mail, as follows:
To Foremost:
Foremost Corporation of America
0000 Xxxxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, XX 00000
FACSIMILE NUMBER: (000) 000-0000
Attention: Executive Vice President Xxxxx Xxxxxxxxx
With Copy to General Counsel
To AARP:
American Association of Retired Persons
000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
FACSIMILE NUMBER: (000) 000-0000
Attention: Executive Director
With copy to:
American Association of Retired Persons
000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
40
FACSIMILE NUMBER: (000) 000-0000
Attention: Director, Membership Division
With Copy to General Counsel
(h) Whenever possible, each provision of the Agreement shall
be interpreted in such manner as to be effective and valid under
the applicable law set forth in Section (e), but if any provision
of the Agreement shall be held to be prohibited or invalid under
such applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining
provisions of the Agreement. No failure on the part of any party
to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof, nor shall any single or
partial exercise of any right hereunder by any party preclude any
other or further exercise of any other right and no waiver
whatever shall be valid unless in a signed writing, and then only
to the extent specifically set forth in such writing. No waiver
of any right hereunder shall operate as a waiver of any other or
of the same or similar right on another occasion.
(i) The Article and Section headings contained in the
Agreement are not part of the Agreement, are for the convenience
41
of reference only and shall not affect the meaning, construction
or interpretation of the Agreement.
(j) The Agreement shall be binding upon and shall inure to
the benefit of each of the parties hereto and their respective
successors and assigns.
(k) The Agreement may be executed in counterparts, each of
which shall be deemed to be an original.
42
IN WITNESS WHEREOF, the parties have executed the Agreement this
13th day of October, 1997.
AMERICAN ASSOCIATION OF RETIRED PERSONS
BY:
-----------------------------------------
Xxxxxx X. Xxxxx, Executive Director
Foremost Corporation of America
BY:
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, President and CEO
43
