Exhibit 10.56
MONITORING AGREEMENT
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Monitoring Agreement ("Agreement"), dated as of January 2, 1995, between
Information Management Associates, Inc., a Connecticut corporation ("IMA"), and
Wand Partners L.P., a Delaware limited partnership ("Wand").
RECITALS
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Affiliates of Wand have invested in IMA in 1990 and on two occasions in each of
1991 and 1994, and Wand has designated two persons to serve as Directors of IMA.
Wand, by and through its partners, agents and affiliates (and their respective
officers and employees), has developed knowledge in the fields of
(a) management, finance and strategic planning and (b) acquisitions and
divestitures, as well as other corporate finance matters and planning. Wand
regularly meets with IMA management to review operating results, business
strategies and financial requirements. IMA wishes to continue to avail itself of
Wand's knowledge and expertise (hereinafter referred to as the "Services").
AGREEMENT
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The parties hereby agree as follows:
1. Services.
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IMA hereby retains Wand to render the Services to IMA, and Wand hereby
agrees to render the Services, for the period commencing on the date hereof
and continuing during the term of this Agreement.
The consulting and other services to be provided by Wand pursuant to this
Agreement specifically do not include any role in any sale or distribution
of securities, as Wand does not offer such services. Wand's engagement
pursuant to this Agreement is subject to IMA providing reasonable indemnity
to Wand as detailed below under item 6, "Indemnity".
2. Term.
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This Agreement shall commence on January 2, 1995 and shall remain in effect
until the earlier of (a) an initial public offering by IMA involving sale of
common stock with gross proceeds to IMA of at least $10 million; or (b) sale
by IMA of substantially all of its stock or assets; or (c) January 2, 1998.
3. Compensation.
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As compensation for the Services pursuant to Section 1, IMA shall pay Wand a
fee (the "Monitoring Fee") of $40,000 per year, payable in arrears in equal
quarterly installments of $10,000. The first installment shall be paid on
April 1, 1995, and the succeeding installments shall be paid on each July 1,
October 1, January 1, and April 1 (each a "Payment Date") thereafter during
the term of this Agreement.
Any directors' fees paid by IMA to Xxxxx X. Xxxxxxx or his successor as
representative of Wand in any quarter shall reduce the Monitoring Fee
payment for such quarter.
4. Reimbursement of Expenses.
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In addition to the compensation to be paid pursuant to Section 3 hereof, IMA
agrees to reimburse Wand, promptly following demand therefor, together with
invoices or reasonably detailed descriptions thereof, for all reasonable
out-of-pocket expenses (including, without limitation, all reasonable
attorneys' fees and expenses) incurred by Wand in connection with the
performance by it of the Services contemplated by Section 1 hereof.
5. Late Payments and Defaults.
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In the event IMA shall fail to pay all or any part of the Monitoring Fee
when due, and IMA does not cure such failure prior to the 30th day following
the date on which such payment is due, then Wand shall be entitled to
interest on the unpaid amount equal to the prime interest rate plus 2% per
annum from the date such payment was due until the date payment is made.
6. Indemnity.
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IMA shall indemnify and hold harmless Wand and its controlling persons, and
each of their respective stockholders, partners, directors, and officers, as
well as agents and employees thereof, to the full extent lawful, from and
against any losses, settlements, claims, damages or liabilities related to
or arising out of this engagement or Wand's role in connection herewith,
including related activities prior to the date hereof, and shall promptly
reimburse Wand and any other party entitled to be indemnified hereunder for
all reasonable out-of-pocket expenses (including attorneys' fees and
expenses) as incurred by Wand or any such party in connection with
investigating, preparing or defending any such claim, regardless of whether
Wand or any other party entitled to be indemnified hereunder is a party to
any such pending or threatened claim, action, litigation or other
proceeding. IMA will not, however, be responsible for any claims,
liabilities, losses, damages or expenses which are finally judicially
determined to have resulted primarily from Wand's willful misconduct or
gross negligence. IMA also agrees that neither Wand nor any
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person affiliated with Wand shall have any liability to IMA or its
affiliates for or in connection with this engagement, except for such
liability for losses incurred by IMA which is finally judicially determined
by a court of competent jurisdiction to have resulted primarily from the
willful misconduct or gross negligence of such person.
Neither IMA nor Wand shall, without the other party's prior consent, settle
or compromise any pending or threatened claim, action or suit in respect of
which indemnification or contribution may be sought hereunder which consent
shall not be unreasonably withheld. IMA hereby consents to personal
jurisdiction, service and venue in any court in which any claim which is
subject to this Agreement is brought against Wand or any other party
entitled to be indemnified hereunder. Any right to trial by jury with
respect to any claim or action arising out of or contemplated by this
section is hereby waived. The provisions of this section shall survive the
expiration of this Agreement
7. Litigation Expenses.
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In the event of any claim, litigation, arbitration or other dispute
resolution proceedings between IMA, on the one hand, and Wand on the other
hand, relating to or arising out of this Agreement, all costs, charges and
expenses incurred by the prevailing party in connection with such claim,
litigation, arbitration or other dispute resolution proceedings (including
attorneys' fees) shall be borne by the other party in such litigation or
other proceedings.
8. Notices.
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Any notice required or permitted to be given hereunder shall be in writing
and shall be deemed sufficient if (a) delivered in person, (b) mailed by
certified mail, return receipt requested, or (c) sent by facsimile
transmission, with a copy sent simultaneously by the U.S. mail, as follows:
If to IMA, to:
Information Management Associates, Inc.
Xxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxxx
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With a copy to:
LeBouef, Lamb, Xxxxxx & XxxXxx
Xxxxxxx Square
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
If to Wand, to:
Wand Partners Inc.
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Any party, by notice to the other parties hereto, may designate additional
or different addresses for subsequent notices or communications.
9. Permissible Activities.
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Nothing herein shall in any way preclude Wand from engaging in any business
activities or from performing services for its own account or for the
account of others.
10. Amendments.
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This Agreement is intended as a complete and exclusive statement of the
terms of the Agreement among the parties with respect thereto and cannot be
amended or terminated orally. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement. A
waiver by any party of any breach of this Agreement shall not operate as, or
be construed to be, a waiver of any subsequent breach. Any waiver must be
in writing.
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11. Monitoring Relationship
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It is understood and agreed that nothing contained herein shall be deemed to
create an employer/employee relationship between IMA, on the one hand, and
Wand, on the other hand. No federal, provincial, state or local withholding
deductions shall be withheld from the fees payable to Wand pursuant to this
Agreement
12. Governing Law.
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This Agreement shall be construed, interpreted and enforced in accordance
with the laws of the State of Connecticut, excluding any choice-of-law
provisions thereof.
13. Counterparts.
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This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument, and the signature of any party to any counterpart
shall be deemed a signature to, and may be appended to, any other
counterpart.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
INFORMATION MANAGEMENT ASSOCIATES, INC.
By: /s/ Xxxx X. Xxxxxxx
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WAND PARTNERS L.P.
By: WAND PARTNERS INC.
as general partner
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
President
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