Exhibit 99.1
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT (the "Agreement"), dated as of August
28, 2002 (the "Effective Date"), is made by and among THE MIIX GROUP, INC., a
Delaware corporation ("MIIX Group"), its wholly-owned subsidiary, NEW JERSEY
STATE MEDICAL UNDERWRITERS, INC., a New Jersey corporation ("Underwriter"), MIIX
ADVANTAGE HOLDINGS, INC., a New Jersey corporation ("Holdings"), and its
wholly-owned subsidiary, MIIX ADVANTAGE INSURANCE COMPANY OF NEW JERSEY, a New
Jersey corporation ("MIIX Advantage").
BACKGROUND
A. Holdings and MIIX Advantage (collectively, "Advantage") were formed to
enable MIIX Advantage to issue to (i) certain physicians, osteopaths, surgeons,
dentists and podiatrists (collectively, "Physicians") who are licensed to
practice medicine, dental or podiatry in New Jersey and who conduct at least 51%
of such practice in New Jersey and (ii) entities formed for the purpose of such
Physicians' practices which are not wholly-owned by one or more Institutional
Providers, as defined in Section 11a hereof (those persons described in clauses
(i) and (ii) collectively referred to as "New Jersey Physicians") medical
professional liability and associated general liability insurance policies (the
"Insurance Business").
B. MIIX Group is engaged in the business of owning, and Underwriter is
engaged in the business of operating, insurance companies that market,
underwrite, distribute and service medical professional liability and associated
general liability policies to Physicians in New Jersey and other states. MIIX
Group and Underwriter are collectively referred to hereinafter as "MIIX."
C. Pursuant to an Intellectual Property License Agreement entered into by
and among the parties hereto contemporaneously herewith (the "License
Agreement"), MIIX will license to Advantage the "MIIX" name and associated marks
for use in connection with the Insurance Business.
D. Pursuant to a Non-competition and Renewal Rights Agreement entered into
by and among the parties hereto contemporaneously herewith (the "Renewal Rights
Agreement"), MIIX Group will inform New Jersey Physicians that MIIX Insurance
can no longer issue policies and advise such physicians that MIIX Advantage may
issue new policies provided certain conditions are satisfied.
E. Pursuant to a Reimbursement Agreement among Holdings, MIIX Advantage
and MIIX Insurance Company, a New Jersey corporation ("MIIX Insurance") entered
into contemporaneously herewith (the "Reimbursement Agreement") MIIX Insurance,
together with its affiliates, have agreed to pay certain costs and expenses of
Advantage incurred in connection with the organization of the Insurance
Business, and
Advantage has agreed to reimburse MIIX Insurance for such costs and expenses
pursuant to the terms and conditions set forth in the Reimbursement Agreement.
F. In connection with the License Agreement, the Renewal Rights Agreement
and the Reimbursement Agreement (together with this Agreement, the "Definitive
Agreements"), Advantage desires to obtain certain Management Services (defined
below) from MIIX, and MIIX desires to provide the Management Services to
Advantage, all upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing background recitals and
the mutual representations, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. APPOINTMENT/EXCLUSIVITY/STANDARD OF CARE. Advantage hereby appoints
MIIX, and MIIX hereby accepts such appointment, under the terms and conditions
hereinafter set forth, to provide the Management Services. During the Term
hereof (as defined in Section 2 below) and subject to the restrictions and
limitations set forth in Section 11 hereof, Advantage agrees that, except as
otherwise specifically provided herein, Advantage shall not itself perform nor
directly nor indirectly engage any person or entity, other than MIIX, to perform
the Management Services. MIIX shall perform such Management Services in a
competent manner, exercising reasonable judgment in accordance with generally
accepted business practices consistent with the financial well-being and general
welfare of Advantage, in compliance in all material respects with applicable
laws, rules and regulations, in accordance with generally accepted industry
standards and practices with at least that degree of care as MIIX takes in the
management of its own business and for others, and shall conduct its activities
and performance of Management Services in compliance with any and all
obligations of Advantage in connection with the Insurance Business and the
Definitive Agreements to which Advantage is a party.
2. COMMENCEMENT DATE AND TERM. The term of this Agreement (the "Term")
shall commence on the Effective Date and shall continue for an initial period of
eight (8) years, and thereafter shall be automatically renewed for successive
five (5) year terms, unless (a) either MIIX Group or Holdings shall provide to
the other written notice at least twenty-four (24) months prior to the
expiration of the original or then current Term of (i) its intention not to
renew this Agreement or (ii) its intention to renew this Agreement subject to
the negotiation and agreement by the parties hereto of new terms to be
applicable during the applicable renewal Term, or (b) terminated as hereinafter
provided. In the event that a party provides the other party with written notice
of its intent to renew this Agreement subject to the negotiation and agreement
by the parties hereto of new terms to be applicable during the applicable
renewal Term, the parties shall have a period of six (6) months from the date of
such notice (the "Negotiation Period") to negotiate in good faith the terms that
shall be applicable during the applicable renewal Term and shall set forth any
such agreed upon terms in a written amendment to this Agreement. If the parties
are unable to reach agreement on the new terms applicable during the applicable
renewal Term, then, either party may, by written notice to the other
-2-
party delivered prior to the expiration of the Negotiation Period, elect not to
renew this Agreement.
3. DUTIES AND RESPONSIBILITIES OF UNDERWRITER. During the Term, MIIX shall
provide to Advantage all of the services reasonably required or necessary to
conduct and perform the Insurance Business in the ordinary course of business,
excluding those services or activities required to be performed by Advantage
hereunder, but including, without limitation, the following services
(collectively, the "Management Services") set forth below; provided, however,
that notwithstanding the foregoing, MIIX shall not be required to provide any
additional Management Services that are not consistent with generally accepted
industry practice unless the parties mutually agree otherwise:
a. EXECUTIVE AND ADMINISTRATIVE. MIIX shall provide all reasonably
necessary executive and administrative services to Advantage and shall provide
sufficient personnel with the appropriate experience, expertise, capability and
skill necessary to perform the Management Services. In order to render the
Management Services and to promote the efficient and economic operation of
Advantage, certain of MIIX's executive and administrative personnel shall keep
themselves informed of all aspects of Advantage's operations and regularly visit
its facilities. MIIX shall work with Advantage to develop management policies
and programs; financial policies and programs; operating procedures and
practices; additions to and improvements of property, plant and equipment; and
development and modification of Advantage's marketing means and methods and
business plans and programs (collectively, "Procedures"). Such Procedures shall
be approved by Advantage, and in the event MIIX desires to amend or modify the
Procedures in any material manner ("Modified Procedures") it must first obtain
the written approval of Advantage.
b. PREMIUM COLLECTION AND REFUNDS. MIIX shall perform the following
services with respect to amounts due from and to policyholders of MIIX
Advantage:
(i) Collect premiums or other amounts due from policyholders
(and, if appropriate, assist policyholders in obtaining
necessary financing) and other sources, including agents
and brokers.
(ii) Deposit all such premiums in the Deposit Account (as
defined in Section 3k hereof in the name of MIIX
Advantage directly in the form received.
(iii) Maintain necessary and appropriate records of the
deposits in the Deposit Account (as defined in Section
3k) and provide, upon request of Advantage, copies of
such records.
(iv) Process and administer all requests for refunds properly
due to policyholders.
-3-
c. LEGAL. MIIX shall advise Advantage of material legal matters
which arise with respect to Advantage's business, and shall consult with
Advantage on such legal matters as Advantage may request, and review or assist
in the preparation of documents relating to Advantage, its operations and the
Insurance Business, including, but not limited to, leases, contracts, charters,
franchises, licenses, filings and regulatory compliance matters. MIIX shall also
keep abreast of and provide Advantage with such advice and consultation as may
be requested in respect of regulatory matters and developments affecting
Advantage, its operations, and the Insurance Business. MIIX's obligations under
this Section 3c shall be subject to, and limited by, Section 8 (relating to
required third-party professional services).
d. UNDERWRITING. MIIX shall have the following authority and shall
perform the following underwriting services in connection with the Insurance
Business:
(i) Promptly review and evaluate the applications,
enrollment forms and examination reports received in
connection with the Insurance Business to ensure
completeness and compliance with the Underwriting
Guidelines (as defined below).
(ii) Obtain such reports and financial statements necessary
to evaluate applications for insurance to be included in
the Insurance Business.
(iii) Provide written notice to the applicant if the coverage
sought under any insurance plans or programs included in
the Insurance Business is declined.
(iv) Review the applications seeking coverage to be included
in the Insurance Business to determine the accuracy of
the information provided and proper calculation of
premium rates.
(v) Periodically evaluate and recommend underwriting
guidelines to MIIX Advantage to utilize in evaluating
applications for coverage to be included in the
Insurance Business ("Underwriting Guidelines"). The
initial Underwriting Guidelines shall be approved by
Advantage and any material amendments thereto shall
require the prior written approval of Advantage. At a
minimum, such Underwriting Guidelines shall:
(1) specify the basis of the rates to be charged;
(2) specify the types of risks which may be
written;
(3) provide for maximum limits of liability;
-4-
(4) specify applicable exclusions;
(5) specify policy cancellation provisions; and
(6) specify the maximum policy period.
(vi) Consistent with the Underwriting Guidelines and within
the limits on writings provided therein, Underwriter
shall receive applications, select risks and underwrite
and issue all policies, contracts, binders, endorsements
and other insuring documents.
e. CLAIMS. MIIX will be responsible for the supervision, adjustment
and payment of all claims arising under contracts of insurance entered into on
behalf of MIIX Advantage, including the following services:
(i) Review, examine, defend, adjust and pay on behalf of
MIIX Advantage those benefits provided by the terms of
the policies included in the Insurance Business all in
accordance with the Claims Procedure Manual (as defined
below in Section 3e(v).
(ii) Establish reserves for claims filed on policies included
in the Insurance Business in accordance with statutory
accounting principles.
(iii) Provide to MIIX Advantage within forty-five (45) days
after the end of each quarter an accounting of the
benefits paid and claims received or noticed to MIIX in
respect of the Insurance Business during the prior
quarter.
(iv) In the event a policy included in the Insurance Business
is canceled, lapses or otherwise terminates, MIIX shall
continue to process claims for benefits incurred with
respect to such policy prior to termination, as well as
those claims arising thereafter which remain the
liability of MIIX Advantage.
(v) Periodically evaluate and recommend claims handling
guidelines setting forth the practices and procedures
MIIX Advantage employs in handling and processing claims
with respect to the Insurance Business (the "Claims
Procedure Manual"). The initial Claims Procedure Manual
shall be approved by Advantage and any material
amendments thereto shall require the prior written
approval of Advantage.
-5-
f. DATA PROCESSING. MIIX shall furnish Advantage with all
reasonable, necessary and appropriate data processing, maintenance and
protection services, equipment and facilities required by Advantage, its
operations and the management and administration of the Insurance Business and
shall take all commercially reasonable steps necessary to perform such services
including, for example, granting to Advantage (or, if applicable, arranging with
any third-party supplier of software for the granting of) a non-exclusive,
non-transferable right and license (or sublicense, as applicable) to use the
computer programs, tutorials and related documentation used by MIIX in providing
Management Services for Advantage's internal, end-user purposes during the term
of this Agreement.
g. TREASURY. MIIX, directly or through its affiliates, shall provide
treasury services to Advantage, including advice on the development and
implementation of financing programs, reinsurance programs (which includes,
without limitation, advising on appropriate reinsurance contracts and taking all
measures required thereunder), preparation of financial analyses and studies,
advice concerning arrangements for bonds or escrow accounts and assistance in
the preparation of necessary papers, documents, statements, applications and
declarations. Subject to the overall policies, control, direction and review of
Advantage's Board of Directors, MIIX will establish cash management programs,
bank credit lines, collection policies, and develop and implement investment
programs and practices. MIIX shall adhere in all respects to any investment
guidelines and objectives adopted by Advantage's Board of Directors. In
addition, within forty-five (45) days after the end of each quarter or as
otherwise requested, MIIX shall provide Advantage's Board of Directors with a
report of its activities hereunder.
h. CORPORATE SECRETARIAL. MIIX shall assist in the maintenance of
Advantage's official corporate records, minute books, charters, by-laws,
contracts, deeds and stockholder records; prepare and issue stock certificates,
debt instruments and the like; and perform duties related to the transfer of
stock. MIIX shall perform such other corporate secretarial functions as may be
requested by Advantage from time to time.
i. MARKETING. MIIX shall provide Advantage with general marketing
consultation to include, by way of example only, product development,
recruitment of agents and brokers, organization and management of distribution
networks, and structuring of joint venture and other business combinations with
third parties. MIIX shall also assist MIIX Advantage with appointing and paying
producers and brokers to act respectively as producers and brokers of MIIX
Advantage.
j. RECORD-KEEPING AND REPORTING. MIIX shall provide Advantage with
record keeping and reporting in the following areas:
(i) Recordation and reporting of the Insurance Business,
including all premiums written, collected, earned and
unearned; all policy acquisition costs; all return
premiums paid and owing; all expenses paid and owing;
all charges,
-6-
fees and expenses owed by, received by or owing to MIIX
and the data necessary to support all such charges and
fees.
(ii) Preparation, maintenance and reporting of Advantage's
general accounting records, financial reports,
regulatory reports and filings, reserve and actuarial
studies, accountings and reports rendered to the
insurers and reinsurers of the Insurance Business, and
payroll and employee benefit records.
(iii) Recordation and reporting relative to federal, state and
local tax returns and regulatory filings.
(iv) Preparation for, assistance in and coordination of
required financial audits and examinations.
(v) Compliance with record retention rules and requirements
for the data files, records and reports of the Insurance
Business in accordance with applicable laws,
regulations, third-party contract terms and Advantage's
internal record retention policies including, without
limitation, maintaining the relevant statistical
information required in any statement furnished to any
regulatory authority.
k. BANK ACCOUNTS.
(i) MIIX shall establish and maintain at a banking institution
acceptable to Advantage (the "Bank") the following accounts in the name of
Advantage (together, the "Accounts") and any such other Accounts as Advantage
may require: (1) a deposit account to be used for general purposes (the "Deposit
Account"), (2) a controlled disbursement checking account to be used for claims
and operating related disbursements (the "Controlled Account"), and (3) a
lock-box account for the processing of claims and miscellaneous remittances, and
custodial accounts with respect to invested assets.
(ii) Based on a daily report generated by the Bank regarding
activity in the Controlled Account, MIIX will via an automatic debit, transfer
necessary funds from the Deposit Account into the Controlled Account.
(iii) Subject to such requirements for approval by specified
officers of Advantage as shall be established from time to time by the
Procedures, MIIX shall have drawing rights upon the Accounts and will make
payments from such accounts for benefits payable on account of claims paid with
respect to the Insurance Business and for the payment of Direct Costs and
Overhead Allowance as provided herein.
(iv) MIIX shall forward to Advantage within forty-five (45)
days after the end of each quarter bank records showing all amounts debited
against the Accounts in the previous quarter, together with a copy of the
reconciliation made to the
-7-
monthly statements of the Bank as to amounts withdrawn and deposits added to the
Accounts.
(v) All monies collected or received by MIIX in respect of
Advantage, its operations and/or the Insurance Business or otherwise on behalf
of either Holdings or MIIX Advantage shall be deemed trust funds held by MIIX
Group and/or Underwriter in a fiduciary capacity for the benefit of Advantage,
shall be maintained separately by MIIX and not commingled with any other funds
of MIIX, and shall be used solely for the benefit of or in connection with
Advantage, the Insurance Business or the performance by MIIX of the Management
Services hereunder.
l. VALUE ADDED SERVICES. MIIX may provide to the New Jersey
Physicians preparation of the courses and manuals to provide the New Jersey
Physicians with resources and updated information concerning compliance, policy
and procedure, OSHA, Clinico-legal correspondence and risk management, and may
make presentations and sponsor seminars on such topics.
4. LIMITED AUTHORITY. Notwithstanding anything herein to the contrary,
MIIX's performance hereunder shall in all events be subject to the direction and
control of Advantage's Board of Directors and officers. Furthermore,
notwithstanding the broad authority delegated to MIIX hereunder, MIIX shall have
no authority to enter into, in the name and on behalf of Advantage, any producer
agreements, reinsurance intermediary agreements, reinsurance contracts or any
other agreements specifically prohibited by Advantage's Board of Directors.
5. INSURANCE. During the Term, MIIX shall maintain such insurance
coverages as are required by law in connection with the performance of its
functions and duties hereunder. The insurance policies evidencing this coverage
shall name each of Holdings and MIIX Advantage as an additional insured and
copies thereof shall be forwarded to Advantage.
6. COST OF SERVICES. MIIX Advantage shall pay Underwriter for the
Management Services provided hereunder in accordance with the following
provisions of this Section 6.
a. DIRECT COSTS. MIIX Advantage shall pay to Underwriter an amount
equal to the "Direct Costs." For purposes of this Section 6a, "Direct Costs"
shall include:
(i) An allocated share of MIIX personnel costs based
on actual time devoted to the Management Services
(the "personnel cost allocation") and allocated
depreciation charges (which depreciation charges
shall be allocated to Advantage in proportion to
the sum of claims paid and gross premiums earned
for or on behalf of Advantage to the sum of the
claims paid and gross premiums earned for all MIIX
companies). The personnel costs to be allocated
shall
-8-
consist of (x) the actual salaries and wages
of such personnel while engaged in performing the
Management Services, plus (y) that percentage of
such salaries and wages as is necessary to cover
the cost of fringe benefits, including federal and
state employment taxes. Where the Management
Services are rendered by MIIX personnel jointly
for the benefit of Advantage and its affiliates,
on the one hand, and MIIX and its affiliates, on
the other, the related personnel costs shall be
allocated in the same manner as the personnel cost
allocation noted above.
(ii) Payments made to third parties (including, without
limitation, governmental agencies) retained or
employed to assist in the delivery or performance
of the Management Services other than (a) legal
fees and expenses of claims defense counsel
retained by Advantage directly, or by MIIX on
Advantage's behalf, (b) auditing fees and expenses
of independent accountants retained by Advantage
directly, or by MIIX on Advantage's behalf, (c)
brokerage commissions and (d) premium taxes, all
of which shall be paid directly by Advantage.
(iii) Materials, supplies, information systems costs
(other than depreciation or amortization),
license/permit fees, and travel costs and expenses
directly incurred by Underwriter in the
performance of the Management Services and solely
for the benefit of Advantage.
b. OVERHEAD. MIIX Advantage shall pay to MIIX Group an overhead
allowance ("Overhead Allowance") equal to "MIIX's Overhead" multiplied by a
fraction, the numerator of which shall be the personnel costs allocated to
Advantage under Section 6a above and the denominator of which shall be MIIX's
total personnel costs. For purposes of this Section 6b, "MIIX's Overhead" shall
mean (i) office and equipment rentals, utilities, insurance, general office and
other similar expenses incurred by MIIX; and (ii) taxes (excluding employer
payroll taxes, including benefits, and income taxes) and interest payable by
MIIX.
c. INCENTIVE PAYMENT. In addition to the payment of Direct Costs and
the Overhead Allowance, MIIX Advantage shall pay to Underwriter an amount (the
"Incentive Payment") equal to the product of (A) the sum of (i) Direct Costs
plus (ii) Overhead Allowance multiplied by (B) an amount equal to the percentage
set forth in the following table:
OPERATING EXPENSE RATIO INCENTIVE PERCENTAGE OF
(DEFINED BELOW) DIRECT COSTS AND OVERHEAD ALLOWANCE
------------------------- -----------------------------------
31.1% or higher 6%
-9-
30.1 to 31 7%
29.1 to 30 8%
28.1 to 29 9%
27.1 to 28 10%
26.1 to 27 11%
25.1 to 26 12%
24.1 to 25 13%
23.1 to 24 14%
22.1 to 23 15%
less than 22.1% 16%
For purposes of this Section 6, "Operating Expense Ratio" shall mean the
quotient obtained by dividing (A) the sum of Direct Costs, Overhead Allowance,
commissions paid to third parties involved in the generation of premiums for
MIIX Advantage, premium taxes, the consideration for Renewals (as defined in the
Renewal Rights Agreement) pursuant to Section 3a of the Renewal Rights Agreement
and net reinsurance costs, including ceding commission income, by (B) Net
Written Premium.
d. COMPLIANCE WITH SAP. MIIX and Advantage agree that cost
accountings and allocation methodologies used under this Agreement shall in all
respects be consistent with Statutory Accounting Principles ("SAP") to the
extent applicable. To the extent the cost accountings and allocation
methodologies reflected in this Section 6, except the percentage component set
forth in Section 6a are inconsistent with, or with the passage of time may
hereafter conflict with, recommended cost accountings and allocation
methodologies under SAP, this Agreement shall be deemed amended accordingly so
as to comply with SAP.
e. PAYMENT.
(i) Payment by Advantage of all Direct Costs and Overhead
Allowance shall be made at the time the cost is paid by MIIX and such Direct
Costs and Overhead Allowance may be paid by MIIX from Advantage's funds as
provided in Section 3k of this Agreement, subject to adjustment as provided in
this paragraph (i) of Section 6e. Within forty-five (45) days following the
close of each calendar quarter during the Term of this Agreement, MIIX shall
render to MIIX Advantage a detailed statement that reflects (i) the Direct Costs
incurred by or on behalf of Advantage for such calendar quarter, (ii) the
Overhead Allowance allocated to Advantage for such calendar quarter and (iii)
the accounting and allocation methodologies specified in this Section 6 used to
determine such costs or allocations for such calendar quarter (a "Quarterly
-10-
Statement"). If the amount payable by Advantage reflected in a Quarterly
Statement is less than the amounts actually paid by Advantage during such
quarter, Advantage shall receive a credit of such excess towards the Direct
Costs and Overhead payable for the following quarter. If the amount payable by
Advantage reflected in a Quarterly Statement is greater than the amounts
actually paid by Advantage during such quarter, then, within thirty (30) days
after receipt of such statement, Advantage shall pay to MIIX Group the
difference between the amounts actually paid by Advantage during such quarter
and the amounts reflected on the Quarterly Statement.
(ii) Within thirty (30) days after the audited financial
statements for a fiscal year of Underwriter and MIIX Advantage have been
received by MIIX Advantage, MIIX Advantage shall pay to Underwriters the
Incentive Payment due for such calendar year, if any.
(iii) Notwithstanding any provision in this Agreement to the
contrary, in the event of any dispute with respect to this Section 6, all
payment obligations that are in dispute shall not be due and payable by
Advantage until resolved by an independent public accounting firm mutually
selected by MIIX Advantage and MIIX.
7. RECORDS AND INSPECTION; ANNUAL AUDIT.
a. MIIX and Advantage shall keep their respective facilities, books
and records relating to this Agreement or performance hereunder available during
regular business hours for inspection by any regulators, auditors or authorized
representatives of the other. The parties agree to cooperate with each other
(and, as applicable, to request cooperation from any third party providers)
during such inspection in all reasonable respects. All expenses with regard to
inspections shall be borne by the party on whose behalf such inspection is being
performed.
b. MIIX shall maintain books and records on behalf of Advantage in
connection with the performance of the Management Services. Upon request, MIIX
will furnish such information as may be required by Advantage to evaluate the
business practices, books and records of MIIX relating to the Management
Services, as well as to audit and confirm the Management Services rendered,
costs allocated and charges assessed hereunder, and shall afford Advantage the
opportunity to review such books and records during normal business hours. Upon
the termination of this Agreement, all books and records maintained by MIIX on
behalf of Advantage with respect to the Management Services promptly shall be
delivered to Advantage.
c. On an annual basis, upon the request of MIIX Advantage, the
books, records and financial statements of Underwriter may be audited by an
independent public accounting firm selected by MIIX Advantage in its sole
discretion, and Underwriter shall fully cooperate in such audit and provide
access of its books, records, financial statements and employees to such
auditors in connection with their audit of Underwriter's financial statements.
All audited financial statements, reports, recommendations or other information
resulting from such audit shall be the sole and
-11-
exclusive property of MIIX Advantage and shall be disclosed to or used by
Underwriter only with the prior written consent of MIIX Advantage; provided that
any such disclosure or use shall be upon such terms and conditions as the
parties may mutually agree. All costs and expenses incurred in connection with
the annual audit of Underwriter requested by MIIX Advantage hereunder shall be
borne by MIIX Advantage, unless otherwise agreed by the parties.
8. THIRD-PARTY PROFESSIONAL SERVICES. With the prior written approval of
Advantage, MIIX may from time to time engage third-party providers to provide
any professional services to Advantage that MIIX, in its discretion, deems
reasonably necessary, including by way of example but not limitation, the
following:
a. Legal.
b. Accounting, audit and actuarial.
c. Investment and investment management.
d. Information Technology
The charges of such service providers shall either be paid by MIIX Advantage
directly or, if advanced by MIIX, shall be reimbursed by MIIX Advantage within
thirty (30) days after MIIX Advantage receives a copy of the written invoice
with respect to such service (and such costs shall be treated as Direct Costs to
the extent provided in Section 6a(ii)).
9. PROPRIETARY INFORMATION.
a. CONFIDENTIALITY OBLIGATIONS OF MIIX.
(i) During the Term, MIIX and its respective agents, officers,
directors, employees and representatives may obtain or have access to certain
confidential and proprietary information of Advantage ("Advantage Proprietary
Information"). For purposes of this Agreement, Advantage Proprietary Information
shall mean information regarding Advantage's business practices, financial
information, policyholders, including, policyholder lists and related
information, the identity and types of insurance purchased by policyholders,
claims histories, the underwriting experience of policyholders, the identity of
its brokers and agents, and non-public, personal information required to be kept
confidential by statute or regulation. Recognizing that the Advantage
Proprietary Information is the exclusive property of Advantage to which MIIX has
no right, MIIX agrees that, during the Term of this Agreement and any time
thereafter, the Advantage Proprietary Information will be maintained on a
strictly confidential basis, will be used solely for the purposes contemplated
herein and as specified in Section 9a(iii) below, and will be disclosed only to
the respective agents, officers, directors, employees, representatives and
contractors of MIIX who require such for purposes of performance hereunder and
to wind down the insurance business of MIIX Insurance.
(ii) The restrictions contained in subsection (i) above shall
not apply to: (1) any Advantage Proprietary Information which is generally known
to the
-12-
public at the time of disclosure to MIIX; (2) any Advantage Proprietary
Information that thereafter becomes generally known to the public through no
fault of MIIX; and (3) any Advantage Proprietary Information that is required to
be disclosed by law or court order (provided that prompt notice of such
disclosure shall be given as far in advance as possible to Advantage and
Advantage shall be given reasonable opportunity to determine whether disclosure
is required and to assess the extent of the Advantage Proprietary Information
required to be disclosed).
(iii) Notwithstanding anything herein to the contrary, the
parties agree that MIIX shall be permitted during the Term and thereafter to use
for internal purposes only the list of Insureds (as defined in the Renewal
Rights Agreement) and related information, including the identity of Insureds,
the types of insurance purchased by Insureds, the Insureds' claims histories and
underwriting experience (the "Claims Experience Information"). Advantage agrees
to provide MIIX with the Claims Experience Information for a period of 25 years
after the Insureds first become policyholders of Advantage; provided that (A)
the parties shall negotiate in good faith the terms and conditions governing the
collection and provision of Claims Experience Information by Advantage after the
Term, which shall be set forth in a supplemental agreement by and between MIIX
and Advantage, and (B) the supplemental agreement referenced in (A) shall
provide for MIIX to pay Advantage an amount commensurate with the value of the
Claims Experience Information to MIIX.
b. CONFIDENTIALITY OBLIGATIONS OF ADVANTAGE.
(i) During the Term, Advantage and its respective agents,
officers, directors, employees and representatives may obtain or have access to
certain confidential and proprietary information of MIIX ("MIIX Proprietary
Information"). For purposes of this Agreement, MIIX Proprietary Information
shall mean trade secrets, confidential business means and methods, know-how,
confidential and proprietary information, knowledge, data or any other
non-public information of MIIX, including, without limitation, investment
guidelines, Underwriting Guidelines, the Claims Procedure Manual, its customer
lists, the underwriting and claims experience of MIIX's customers, underwriting
methodologies and models and data derived therefrom, any non-public, personal
information required to be kept confidential by statute or regulation, and the
identity of its brokers and agents. Notwithstanding the foregoing, MIIX
Proprietary Information shall not include any trade secrets, business means and
methods, know-how, confidential and proprietary information, knowledge, data or
any other non-public information used or developed in connection with the
performance of the Management Services hereunder. Recognizing that the MIIX
Proprietary Information is the exclusive property of MIIX to which Advantage has
no right, Advantage agrees that, during the Term of this Agreement and at any
time thereafter, the MIIX Proprietary Information will be maintained on a
strictly confidential basis, will be used solely for the purposes contemplated
herein and as specified in Section 9b(iii) below, and will be disclosed only to
the respective agents, officers, directors, employees, representatives and
contractors of Advantage who require such for purposes of performance hereunder.
-13-
(ii) The restrictions contained in subsection (i) above shall
not apply to: (1) any MIIX Proprietary Information which is generally known to
the public at the time of disclosure to Advantage; (2) any MIIX Proprietary
Information that thereafter becomes generally known to the public through no
fault of Advantage; and (3) any MIIX Proprietary Information that is required to
be disclosed by law or court order (provided that prompt notice of such
disclosure shall be given as far in advance as possible to MIIX and MIIX shall
be given reasonable opportunity to determine whether disclosure is required and
to assess the extent of the MIIX Proprietary Information required to be
disclosed).
(iii) Notwithstanding anything herein to the contrary, the
parties agree that Advantage shall be permitted to use for internal purposes
only the Underwriting Guidelines and Claims Procedures Manual in connection with
the Insurance Business during the Term and thereafter.
c. ENFORCEMENT. MIIX and Advantage agree that a breach by either of
them or their respective officers, directors, employees, agents or
representatives of the obligations and conditions set out under this Section 9
will cause immediate and irreparable harm. Accordingly, in addition to any other
rights and remedies available at law, the aggrieved party shall be entitled to
injunctive relief to restrain and enjoin such violations without the necessity
of showing damage or harm.
d. RETURN OF PROPRIETARY INFORMATION. Upon the termination of this
Agreement, each party will promptly return the Proprietary Information of the
other party to at a minimum, ensure a smooth and effective transition for
Advantage to a new provider of Management Services.
e. SURVIVAL. This Section 9 shall survive the termination of this
Agreement.
10. TERMINATION.
a. Except for those provisions identified in this Agreement as
surviving the termination of this Agreement, this Agreement shall terminate upon
the occurrence of any of the following events:
(i) The expiration of the Term or renewal Term.
(ii) The mutual agreement of the parties.
(iii) The dissolution, liquidation or bankruptcy of MIIX
Group, Underwriter, Holdings, or MIIX Advantage.
(iv) Upon the written election of Advantage upon a Change of
Control of MIIX Group or Underwriter (as defined in
paragraph b of this Section 10), unless in connection
with such Change of Control, the Acquiror (as defined in
paragraph b of this Section 10) agrees (i) to be bound
by
-14-
the Revised Non-Compete Provisions (as defined in
Section 10b); and (ii) to implement special procedures
satisfactory to MIIX Advantage to protect the
disclosure, dissemination and use, including internal
use, by the Acquiror of the confidential information of
MIIX Advantage; provided, that such termination shall be
deemed effective on the date specified by Advantage in
such written election, such date not to exceed 24 months
after the date of the Change of Control.
(v) Upon the written election of either party in the event
that the other party commits or omits any action
constituting For Cause (as defined in paragraph b of
this Section 10).
b. For purposes of this Section 10, the following terms shall have
the following meanings:
(i) "Acquiror" shall mean any entity, person or group of
entities or persons which or who acquire MIIX Group or
Underwriter in connection with a Change of Control and
shall include their affiliates.
(ii) "Change of Control" shall mean: (1) a merger,
consolidation or other business combination involving
MIIX Group or Underwriter as a result of which fifty
percent (50%) or more of the voting stock of the
surviving entity is held by persons other than persons
who are shareholders of MIIX Group or Underwriter
immediately prior to such transaction, (2) a sale,
transfer or other disposition of all or substantially
all of the assets of MIIX Group and/or Underwriter (in a
single transaction or a series of related transactions),
or (3) a sale, transfer or other disposition or business
combination (in a single transaction or a series of
related transactions) that results in an ownership
change of more than fifty percent (50%) of the voting
stock of MIIX Group and/or Underwriter (based on the
shareholders of MIIX Group or Underwriter immediately
prior to such transaction or series of related
transactions).
(iii) "For Cause" shall mean: (1) a willful violation of
material applicable insurance laws and regulations; (2)
a violation of any material provision of a Definitive
Agreement after written notice of such violation, which
notice shall specify in reasonable detail the nature of
such violation, and the expiration of a thirty (30) day
cure period or such other period as may be mutually
agreed to by the parties (other
-15-
than a violation described below in clause (4)); (3) a
material willful disregard of lawful instructions or
directions of any officer or director of Advantage to
MIIX relating to a material matter under this Agreement,
or (4) a violation by the Acquiror of the Revised
Non-Compete Provisions.
(iv) "New Jersey Premium Threshold" shall mean the lesser of
(a) five percent (5%) of the direct written premiums of
MIIX Advantage and (b) $2,500,000; provided that for the
first fiscal year of MIIX Advantage, the New Jersey
Premium Threshold shall mean Seven Hundred Fifty
Thousand Dollars ($750,000).
(v) "Revised Non-Compete Provisions" shall mean the
provisions set forth in Sections 9a and 11a of this
Agreement, except that Section 11a shall be deemed to
allow, solely for the purposes of this definition, an
Acquiror to engage in the Insurance Business so long as
the direct written premiums from New Jersey Physicians
earned by such Acquiror in any fiscal year is less than
the New Jersey Premium Threshold for that same year.
c. In the event that this Agreement is terminated for any reason
whatsoever, then MIIX Advantage shall be required to pay MIIX Group for
Management Services rendered pursuant to this Agreement for the period ending on
the date upon which the Agreement terminates. In addition, the parties
acknowledge that MIIX will suffer substantial and irreparable harm in the event
this Agreement is terminated by MIIX For Cause, the amount of which could not be
ascertained and determined by mathematical computation. Accordingly, except for
claims arising under Sections 9b and 11b hereof, if this Agreement is terminated
by MIIX For Cause, Advantage shall pay to MIIX as liquidated damages, an amount,
which at the time of termination, is equal to the product of (A) the weighted
average of the Incentive Payment earned by MIIX for the two calendar years
immediately prior to the calendar year in which the termination occurs pursuant
to Section 6c, with such weighted average calculated as 75% of the most recent
year and 25% of the year immediately preceding the most recent year, multiplied
by (B) the number of years remaining in the Term or the renewal Term, as
applicable. The liquidated damages set forth in this Section 10c shall be the
sole and exclusive remedy available to MIIX, except for equitable remedies and
claims for indemnification as set forth in Section 15b in the event of a breach
by Advantage of its obligations under Sections 9b and 11b hereof.
d. In the event this Agreement is terminated prior to the Term as
set forth in Section 10a above, MIIX agrees to cooperate with Advantage or its
designees as necessary in connection with the transition of the Management
Services contemplated hereunder to another service provider or as otherwise
requested by Advantage. MIIX shall be reimbursed for only the actual costs of
services undertaken during such transition
-16-
period. Notwithstanding anything herein to the contrary, this provision shall
survive the termination of the Agreement.
11. NONCOMPETITION. During the term of this Agreement and any renewal
thereof and for two years after any termination of this Agreement, MIIX and
Advantage agree as follows:
a. Without the prior written consent of Advantage (which consent may
be given or withheld in the sole discretion of Advantage), MIIX shall not
directly or indirectly: (i) perform or submit any bid or proposal to perform any
Management Services in connection with the Insurance Business of any other
entity; (ii) engage in the Insurance Business; (iii) be or become a stockholder,
partner, owner, member or agent of, or give financial or other assistance to,
any person or entity considering engaging in any such activities or so engaged;
(iv) seek in competition with Advantage to procure insurance policies from or do
business with any New Jersey Physician; or (v) engage in or participate in any
effort or act to induce any of the New Jersey Physicians to take any action
which might be disadvantageous to Advantage or its affiliates. Notwithstanding
any provision of this Section 11a, nothing in Section 11a shall in any manner
prohibit, restrict or impair the right of MIIX to:
(i) perform Management Services outside of New Jersey;
(ii) perform Management Services for a "Non-New Jersey
Provider Insurer," which shall mean any entity engaged
in the insurance business (y) that is owned or
controlled by an Institutional Provider and/or one or
more associations or trade groups in which Physicians
are members, and (z) in which the number of New Jersey
Physicians to whom such entity has issued medical
professional liability and/or associated general
liability insurance policies is less than ten percent
(10%) of the total number of Physicians for whom such
entity issues such insurance policies;
(iii) engage in any premium finance business or activities;
(iv) perform Management Services within New Jersey in
connection with the wind-down of MIIX Insurance;
(v) perform Management Services within New Jersey for or in
connection with an Institutional Provider that directly
or through an affiliate self-funds or self-insures
professional liability and/or associated general
liability risks, with "Institutional Provider" being
defined as an entity (x) that is not owned nor
controlled by one or more Physicians, and (w) that
provides any type of health care product or service,
including, without limitation, hospitals, health
systems, clinics, medical schools and universities.;
-17-
(vi) perform claims and related administrative and data
processing services for any company;
(vii) issue Policies during the Transition Period in
accordance with Section 2.1(b) of the Renewal Rights
Agreement or engage in the insurance business in
connection with Policies issued to Insureds prior to the
Effective Date or during the Transition Period (each, as
defined in the Renewal Rights Agreement) as permitted
pursuant, to the Renewal Rights Agreement, provided, in
each instance, such Policies are nonrenewed in
accordance with the terms of the Renewal Rights
Agreement;
(viii)perform Management Services for or issue medical
professional liability and associated general liability
insurance policies to an Institutional Provider;
(ix) provide business consulting services and informational
seminars to New Jersey Physicians.
(x) own, as passive investors, in the aggregate no more than
5% of the outstanding publicly traded stock of any
corporation engaged in the activities set forth in this
Section 11a.
b. Without the prior written consent of MIIX Group (which consent
may be given or withheld in the sole discretion of MIIX Group), Advantage shall
not directly or indirectly: (i) engage in any business other than the Insurance
Business (including, without limitation, with entities that are not owned or
controlled by New Jersey Physicians); (ii) be or become a stockholder, partner,
owner, member or agent of, or give financial or other assistance to, any person
or entity considering engaging in any business other than the Insurance Business
or so engaged; (iii) seek in competition with MIIX to procure insurance policies
from or do business with any physician who is not a New Jersey Physician; (iv)
engage in or participate in any effort or act to induce any physician who is not
a New Jersey Physician and who is a policyholder of MIIX or any of its
affiliates to take any action which might be disadvantageous to MIIX or its
affiliates or (v) solicit or contact with a view to engagement or employment any
person who is an employee of MIIX; provided, however, that nothing herein shall
prohibit Advantage and its affiliates from owning, as passive investors, in the
aggregate no more than 5% of the outstanding publicly traded stock of any
corporation so engaged.
c. MIIX and Advantage agree that damages alone shall not be an
adequate remedy for any breach by either party of their respective covenants set
forth in this Section 11 and accordingly expressly agree that the a
non-breaching party shall be entitled to the remedies set forth in Section 9c
hereof.
-18-
d. The provisions of this Section 11 shall survive the termination
of this Agreement for the specific periods identified herein.
12. MIIX NOT INSURANCE AGENT. Notwithstanding anything to the contrary in
this Agreement, neither MIIX Group nor Underwriter or any of their respective
officers, directors, employees, agents or representatives are acting as or
deemed to be acting as an insurance or reinsurance producer or broker of any
kind in connection with performance of the Management Services.
13. NO THIRD-PARTY BENEFICIARIES. This Agreement is solely among the
parties hereto, and is not intended to create any right or legal relationship
between any of the parties hereto, on the one hand, and any third party,
including, without limitation, any policyholders of MIIX Advantage or New Jersey
Physicians who contributed to Holdings and/or MIIX Advantage, on the other hand.
14. WAIVER OF BREACH. The failure of any party to insist upon the strict
performance and due observance of any of the terms, covenants and conditions
hereof shall not be a waiver of its right thereafter to insist upon the strict
performance and due observance of any of the terms, covenants and conditions
hereof.
15. INDEMNIFICATION.
a. INDEMNIFICATION BY MIIX GROUP AND UNDERWRITER. MIIX Group and
Underwriter, jointly and severally, shall indemnify, defend and hold harmless
Advantage, its officers, directors, employees and agents (other than MIIX)
(each, an "Advantage Indemnified Person") against all expenses (including
attorneys' fees), judgments, losses, fines and amounts paid in settlement
actually and reasonably incurred by an Advantage Indemnified Person in
connection with any claim, action, suit or proceeding, whether civil, criminal,
administrative or investigative, before or by any court or any administrative or
legislative body or authority, in which the Advantage Indemnified Person is
involved, as a party or otherwise, or with which the Advantage Indemnified
Person may be threatened, arising out of or relating to (i) a material breach by
MIIX of this Agreement, or (ii) any act or action performed or omitted to be
performed or any inaction of MIIX Group or the Underwriters or any of their
officers, directors, employees or agents in connection with the performance of
the Management Services which constitutes fraud, gross negligence or willful
misconduct by such person. In addition, MIIX Group and Underwriter, jointly and
severally, shall indemnify. defend and hold harmless a MIIX Indemnified Person
against all reasonable attorneys fees and expenses incurred by such Advantage
Indemnified Person in connection with the enforcement of this Agreement or any
of its rights hereunder.
b. INDEMNIFICATION BY ADVANTAGE. Advantage shall indemnify, defend
and hold harmless MIIX, its officers, directors, employees and agents (each, a
"MIIX Indemnified Person") against all expenses (including attorneys' fees),
judgments, losses, fines and amounts paid in settlement actually and reasonably
incurred by a MIIX Indemnified Person in connection with any claim, action, suit
or proceeding, whether civil, criminal, administrative or investigative, before
or by any court or any
-19-
administrative or legislative body or authority, in which the MIIX Indemnified
Person is involved, as a party or otherwise, or with which the MIIX Indemnified
Person may be threatened, arising out of or relating to a material breach by
Advantage of Sections 9b or 11b of this Agreement. Advantage shall also
indemnify, defend and hold harmless a MIIX Indemnified Person against all
reasonable attorneys fees and expenses incurred by such MIIX Indemnified Person
in connection with the enforcement of this Agreement or any of its rights
hereunder.
c. SURVIVAL. The provisions of this Section 15 shall survive the
termination of this Agreement.
16. ARBITRATION. Except for claims for equitable relief as provided in
Sections 9 and 11, as to which all rights and judicial remedies are reserved,
all disputes hereunder shall be referred to arbitration before a single
disinterested arbitrator, who is a past or present officer of a property or
casualty insurance company. MIIX and Advantage shall act in good faith in the
selection of the single arbitrator by submitting to the other party a list of
acceptable arbitrators until the parties have narrowed the selection to a single
arbitrator. If the parties are unable to select an arbitrator within thirty (30)
days of the date that a party submits a written demand for arbitration, either
party may petition a court or request the American Arbitration Association
("AAA") to immediately select an arbitrator in accordance with this Agreement.
Arbitration proceedings shall be held at the MIIX offices, and shall be
conducted in accordance with the Commercial Arbitration Rules of the AAA unless
the arbitrator agrees to a different procedure. The decision of the arbitrator
will be final and binding on the parties, and judgment thereon may be entered in
any court of competent jurisdiction. The parties shall bear their own costs, but
the expenses of arbitration, including the arbitrator's fees, will be shared
equally by the parties.
17. RIGHT OF FIRST REFUSAL. In the event of a proposed sale or other
disposition of Underwriter (a "Proposed Disposition") (defined as (i) a merger
or consolidation in which Underwriter will not be the surviving entity; (ii) a
sale, transfer, or other disposition of all or substantially all of the assets
of Underwriter (in a single transaction or a series of related transactions
where the existing shareholders of Underwriter will not own at least fifty
percent (50%) or more of the buyer's voting stock; and (iii) a sale, transfer or
other disposition of more than fifty percent of the voting stock of Underwriter
to persons other than MIIX or its affiliates); and (iv) any other business
combination in which fifty percent (50%) or more of Underwriter's voting stock
is transferred to persons other than MIIX or its affiliates (in a single or
series of related transactions)), MIIX Advantage shall have the right of first
refusal to engage in the Proposed Disposition strictly in accordance with this
Section 17. In that respect, should MIIX (whether directly or through any of its
affiliates or representatives) at any time receive a written bona fide offer of
a Proposed Disposition, MIIX shall give prompt written notice (the "Disposition
Notice") thereof, and provide a copy of such offer, to MIIX Advantage. The
Disposition Notice shall set forth all relevant information with respect to the
Proposed Disposition, including without limitation, the name and address of the
prospective acquirer (if permitted by any applicable confidentiality
restrictions), the nature of the transaction, the purchase price, and the terms
of any delayed payment of
-20-
the purchase price. MIIX Advantage shall have an optional preferential right (to
be exercised by written notice to MIIX given not later than thirty (30) days
after Advantage's receipt of such Disposition Notice) to acquire Underwriter for
the same purchase price and on the same terms and conditions that are set forth
in the Disposition Notice. If MIIX Advantage elects not to exercise the optional
right set forth in the immediately preceding sentence within the time period set
forth therein, MIIX shall have the right to engage in the Proposed Disposition
described in the Disposition Notice in accordance with the terms of the
Disposition Notice for a period of ninety (90) days after the expiration of the
above described thirty (30) day preferential right period. If MIIX fails to sell
or dispose of Underwriter within such ninety (90) day period substantially in
accordance with the terms set forth in the Disposition Notice or the terms of
the Disposition Notice are materially modified, the Proposed Disposition shall
again become subject to the preferential rights set forth in this Section 17.
This right of first refusal shall not apply if Underwriter's stock becomes
publicly traded. Notwithstanding anything herein to the contrary, nothing in
this Section 17 shall obligate, impair or in any manner limit the power and
authority of the Board of Directors of Underwriter and MIIX to authorize,
approve and consummate a sale of Underwriter.
18. BENEFITS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
19. NO ASSIGNMENT. No party hereto may assign or delegate any of the
rights or obligations hereunder without the prior written consent of the other
parties.
20. NOTICES. Any notice required or which may be given hereunder shall be
in writing and shall be deemed to have been given (i) when delivered to the
addressee in person, (ii) if telexed or faxed, then on the date shown on the
confirming receipt, and, if notice is telexed or faxed, a copy shall be mailed
by registered or certified mail, return receipt requested and postage prepaid,
(iii) when sent by registered or certified mail, return receipt requested and
postage prepaid, on the date shown on the receipt or (iv) when sent by express
mail or courier service, postage or charges prepaid, on the date of delivery as
shown on the receipt or confirmation therefor, in each case, addressed to the
parties as set forth below or at such other address as the party may specify in
a notice complying with this Section 20; provided that notice sent by any other
method shall be effective only when received by the party to which such notice
was addressed:
If to MIIX Group or Underwriter:
New Jersey State Medical Underwriters, Inc
Xxx Xxxxxxxx Xxxx, Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Corporate Secretary
The MIIX Group, Inc.
Two Xxxxxxxx Xxxx, Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Corporate Secretary
-21-
If to Holdings or MIIX Advantage:
MIIX Advantage Holdings, Inc.
Xxx Xxxxxxxx Xxxx, Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Corporate Secretary
MIIX Advantage Insurance Company of Xxx Xxxxxx
Xxx Xxxxxxxx Xxxx, Xxxxxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Corporate Secretary
21. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New Jersey without giving effect to its choice or conflict of law
principles.
22. AMENDMENTS. This Agreement may not be changed, altered or modified
unless the same shall be in writing executed by the parties hereto.
23. HEADINGS. The headings in this Agreement are for convenience of
reference only and are not part of the substance of this Agreement and
references to the masculine, feminine, singular, plural or neuter shall apply in
all cases.
24. ENTIRE AGREEMENT. This Agreement and other Definitive Agreements
contain the entire agreement between the parties with respect to the subject
matter hereof and thereof and shall supercede any and all prior agreements and
understandings, whether oral or written, relating to the subject matter hereof
or thereof.
25. SEVERABILITY. It is the intention of the parties that the provisions
of this Agreement shall be enforced to the fullest extent permissible under the
laws and public policies of each state and jurisdiction in which such
enforcement is sought, but that the non-enforceability of any provisions hereof
shall not render non-enforceable or impair the remainder of this Agreement.
Accordingly, if any provisions of this Agreement shall be determined to be
invalid or non-enforceable, either in whole or in part, this Agreement shall be
deemed amended to delete or modify, as necessary, the offending provisions and
to alter the balance of this Agreement in order to render the same valid and
enforceable to the fullest extent permissible.
26. COUNTERPARTS. This Agreement may be executed in several counterparts
each of which shall be deemed an original but when taken together shall
constitute one and the same agreement.
27. INDEPENDENT CONTRACTOR. The parties acknowledge and agree that MIIX
and Advantage shall be an independent contractor as to each other in the
performance of their respective duties and responsibilities under this Agreement
and that no officer, director, employee, agent or representative of MIIX, on the
one hand, and Advantage, on the other, shall be regarded as an officer,
director, employee, agent or representative of the other solely as a result of
this Agreement, unless expressly provided herein.
Signatures on Next Page
-22-
IN WITNESS WHEREOF, the parties hereto have executed this Management
Services Agreement as of the day and year first above written.
THE MIIX GROUP, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
NEW JERSEY STATE MEDICAL UNDERWRITERS, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Chairman and Chief Executive Officer
MIIX ADVANTAGE HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Interim Chief Financial Officer
MIIX ADVANTAGE INSURANCE COMPANY OF NEW JERSEY
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Interim Chief Financial Officer
-23-
