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EXHIBIT 10.14(1)
LICENCE, IMPROVEMENT & SUPPORT AGREEMENT
THIS AGREEMENT is dated this 30 day of August, 1995.
BETWEEN:
TRITECH FINANCIAL SYSTEMS INC.,
a Corporation with a place of business at:
0 Xxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx X0X 0X0
(hereinafter referred to as the "Vendor")
AND:
XXXXXX INTERNATIONAL GROUP INC.
a Corporation with a place of business at:
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx, 00000
(hereinafter referred to as the "Client")
1. DEFINITIONS
GROSS ANNUAL PREMIUM means the Gross written insurance premiums of the
Client's business for the latest year end, processed through the GIMS
Application Programs, excluding sales taxes and service charges.
LICENCE OF COMPUTER SOFTWARE means that certain licence agreement
between the parties hereto dated the same date as herewith.
CONFIDENTIAL INFORMATION of one party means any information including
information on documents or magnetic media which is disclosed to or
known by the other as a result of the negotiation or performance of this
Agreement and which is of a confidential nature and is not generally known
to the trade or industry in which the parties are engaged and including
information the dissemination of which might prove prejudicial to the
other party about the party's products, proposed products, activities,
affairs, methods, proposed methods, customers, contracts, plans, policies
and Services including research, development, purchasing, finance,
marketing, merchandising and selling; and corresponding information of
associates of that party and including the specifications, material and
information developed during performance of this Agreement.
FUNCTIONAL SPECIFICATIONS means the GIMS System specifications as
described in the Licence of Computer Software Agreement.
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GIMS means the General Insurance Management System software provided by
Tritech.
HOTLINE SUPPORT means the Services described in subsection 2. 1. (a) of
this Agreement.
GIMS APPLICATION PROGRAM means any computer programming in
machine readable or interpreted form which constitutes a part of GIMS.
XXXX means this LICENCE, IMPROVEMENT & SUPPORT AGREEMENT.
SERVICES means the Services described in Section 2 hereof.
ZIM means the 4th Generation Language/DBMS Software provided by
Sterling Software International (Canada) Inc.
The initial three year term will commence on JANUARY 1, 1996.
2. SERVICES
The Services identified in this section shall be made available to the
Client by the Vendor in respect of each unaltered GIMS Application Program
or GIMS Application Program altered by the Vendor.
The level of Services and fees associated therewith are indicated in
the Schedule contained in Exhibit A. The selection of Services chosen may
be changed at any time by the Client upon six (6) months prior written
notice.
I. OPTIONAL SERVICES
(a) Hotline Support
The Client shall have access to specialist assistance related to:
(i) questions related to the operational use of GIMS by the Client;
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(ii) assistance in identifying and verifying the causes of suspected
errors or malfunctions in GIMS;
(iii) advice on detours for such identified errors or malfunctions, where
reasonably possible;
(iv) advice on the features and capabilities of GIMS; and
(v) basic ZIM queries related to the GIMS application are supported by
the Vendor. The Vendor is responsible for communicating any ZIM "bugs"
or problems to Sterling Software International (Canada) Inc., and shall
forward all ZIM updates and intra-version updates to the Client.
This HotLine Service shall be available to the Client during the
Vendor's normal business hours (8:00 a.m. to 8:00 p.m. Eastern time Monday
through Friday, save and except for statutory and civic holidays), and is
intended to provide answers to basic queries. More complex questions requiring
lengthy in-depth advice and analysis may also be accommodated via the HotLine
wherever reasonably possible.
II. ANNUAL LICENCE IMPROVEMENT AND UPGRADE
(a) Correction of Reported Errors or Malfunctions
(i) The Vendor shall make every reasonable effort to provide a detour
or code correction to GIMS for errors or malfunctions reported.
Each detour or code correction shall be made available in the form
of either a written correction notice, by remote telephone support
or machine documentation adequate to inform the Client of the
resolution of the problem and any significant operational
differences resulting from the correction which are known to the
Vendor.
(ii) All errors or malfunctions of GIMS as defined by the accepted
Functional Specifications shall be corrected by the Vendor. For
any other errors or malfunctions, the Vendor shall provide the
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Client with its best recommendation or an explanation. As part
of the error or malfunction correction process the Vendor
shall update the applicable documentation and GIMS' source
code to reflect the changes.
(iii) Upon the Client notifying the Vendor that the Client cannot, due
to an error or malfunction of the GIMS software:
- input or produce insurance policies;
- process insurance claims; or
- update its sub-ledgers or General Ledger;
(collectively, a "Critical Error"), the Vendor shall have two (2)
business days (the "Critical Error Correction Period") to remedy
the GIMS software so that the Client may resume using the
system. Should the Vendor not remedy the Critical Error within
the Correction Period, the Vendor will have failed to perform its
support services and the Vendor agrees to waive the next three
payments of monthly "XXXX" support fees as a penalty to the
Client.
(iv) Upon the Client notifying the Vendor of an error or malfunction
of the GIMS software, other than a Critical Error as set forth in
subparagraph (iii) (a "Non-Critical Error"), the Vendor shall
have two (2) months (the "Non-Critical Error Correction Period")
to remedy the Non-Critical Error. Should the Vendor not remedy
the Non-Critical Error within the Correction Period, the Vendor
will have failed to perform its support services and the Vendor
agrees to waive the next three payments of monthly "XXXX" support
fees as a penalty to the Client.
(b) New Feature Requests/Documentation Changes
(i) Client Requests shall be reviewed according to the Vendor's
established procedures. Any new features specific to the
Client will be quoted and if accepted, a separate document
will be signed between the parties, detailing the cost and
implementation schedule.
(ii) New Features that are created by the Vendor and are made part of
the GIMS product will be offered to the Client at no additional
costs except for implementation and/or installation fees at the
Vendor's then current fee schedule. Out of pocket expenses will
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also be billed to the client to cover media, transportation,
telephone and other sundry expenses.
(iii) The Vendor shall provide a quarterly review of new features and
or improvements that are available to its Clients.
(iv) The Vendor agrees to provide a copy of the latest version of
GIMS during the period of this agreement, upon receiving a
written request from the Client.
(c) Regulatory Changes
(i) Changes to GIMS that are required to satisfy future regulatory
requirements will be provided to the Client at no additional
costs except for implementation and/or installation fees at the
Vendor's then current fee schedule. Out of pocket expenses will
also be billed.
(ii) Regulatory requirements that will be covered by this service shall
include Federal or State laws, Insurance Bureau filling as
mandated by a recognised governing body.
(iii) The Vendor and the Client shall establish an implementation date
for the modified programs. Should the Vendor not provide the
modified programs by the implementation date, the Vendor will have
failed to perform its support services and the Vendor agrees to
waive the next three payments of monthly "XXXX" support fees as a
penalty to the Client.
(d) Performance and System Tuning
(i) The Vendor will periodically analyse the Clients system and
determine if it is running optimally. The Vendor will then
make any required changes to the system parameters or files that
will increase system performance. This will be provided at no
additional costs to the client, except for out of pocket expenses
which will be billed to the client.
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(ii) The Client will be notified in advance when this
activity is due for analysis, the Client will have
the final say in when this activity will be conducted.
(e) NEW HARDWARE AND SOFTWARE ENVIRONMENTS
(i) The Vendor will evaluate and test new environments as
they become available on the market. When a new
environment has proven itself to be commercially
attractive and desirable the Vendor will port GIMS
to this new environment.
(ii) If the Client wishes to convert from their existing
environment to one of the Vendor's other supported
environments, the Vendor will provide the Client with
a suitable version of GIMS that works in this new
environment at no additional costs except that the
Client will be subject to the Vendor's fees for
converting the Client to the new environment.
3. CLIENT RESPONSIBILITIES
(a) The Client shall undertake the proper supervision, control
and management of its use of GIMS including, but not limited
to:
- assuring proper configuration of the System,
being the configuration appropriate for
GIMS as contemplated by the License of Computer
Software Agreement as it may be modified or
enhanced from time to time to reflect changed
conditions, including without limitation
increases in client volumes;
- program installation, verification, audit
controls, and operating methods; and
- ensuring proper procedures for the security
of data, accuracy of input and output, and
backup plans including restart and recovery
in the event of hardware or software error
or malfunction.
(b) The Client is responsible for ensuring that its staff is
properly trained in the operation and usage of GIMS and that
they shall undertake its operation in accordance with any
reasonable advice given by the Vendor.
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(c) The Client shall apply its best efforts within a reasonable amount of
time to apply error corrections and install update releases upon receipt
from the Vendor.
(d) The Client is responsible for notifying the Vendor of all identified
errors or malfunctions on GIMS.
(e) The Client shall ensure that only properly trained and suitable
personnel are made available to implement the corrections suggested by the
Vendor.
(f) When a significant problem occurs, which after reasonable investigation
the Client believes to be an error or malfunction which affects the
operation of GIMS and which the Client cannot adequately resolve, then
the Client should contact the Vendor using the HotLine Service. The
Client shall perform the problem diagnostic activities and routines
requested by the Vendor. The Client must also keep a log of all GIMS
System problems whether they are resolved in-house by the Client or by
the Vendor.
4. CHARGES
The Client shall pay the Vendor the amounts set forth in Exhibit "A"
attached, any invoices for expenses incurred shall be payable within
thirty (30) days of Client's receipt of invoice. Out of pocket expenses
are subject to Exhibit "B" attached.
The Vendor may change its XXXX Charges at the end of each contract renewal
period. Unless mutually agreed, any increases in charges shall not exceed
the immediately preceding period charges by more than the lesser of 20% or
the increase in payroll costs of computer software programmers and
analysts as documented in the Metro Toronto Board of Trade Annual "Data
Processing Compensation Survey". Any increase in payroll costs in excess
of the 20% can be recovered in the next renewal period.
Expenses incurred by the Vendor for media (such as disks, cartridge tapes,
floppy disks, magnetic tapes, etc.) and their delivery, which are provided
by the Vendor under this Agreement, shall be reimbursed by the Client and,
in addition, the Client shall reimburse the Vendor for any costs the
Vendor must pay based on this Agreement, the Services or charges rendered
under it (such as long
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distance charges, out-of-pocket expenses, etc.), provided that once the
aggregate of the aforesaid outstanding costs and expenses has reached
$1,000, the Vendor must seek and receive the Client's written approval
before incurring any additional costs and expenses. The charges do not
include, and the Vendor shall invoice for, and the Client shall pay, as
hereinafter stated, all taxes lawfully levied against or upon the Software
or its use, or arising out of this Agreement, exclusive, however, of taxes
based on the Vendor's income, and franchise taxes, or taxes on any
withholding at the source obligation of the Vendor which taxes shall be
paid by the Vendor.
5. PERFORMANCE OF SERVICES
The Vendor reserves the right to assign personnel or to subcontract ZIM
maintenance to Sterling Software International (Canada) Inc., and
otherwise to retain consultants working under the direction of the Vendor
who are, in the Vendor's judgement, qualified to render the Services
requested, however, the Vendor retains final responsibility for the
quality of Services rendered.
6. TERM
This Agreement shall commence upon acceptance of the GIMS system by the
Client as defined in Section 5 of the Licence of Computer Software
Agreement and shall continue for an initial term of three years. At the
end of the initial three year term, unless terminated or cancelled by
paragraph 7, the Agreement shall automatically renew for successive three
year terms.
7. TERMINATION/CANCELLATION
In the event of any material breach of this Agreement by either party
hereto, the other party may (reserving cumulatively all other
remedies and rights under this Agreement and in law and in equity)
terminate this Agreement in whole or in part by giving thirty (30) days'
prior written notice hereof; provided, however, that this Agreement shall
not terminate at the end of said thirty (30) days' notice period if the
party in breach has cured the breach of which it has been notified prior
to the expiration of said thirty (30) days.
Cancellation or termination of this Licence, Improvement & Support
Agreement due to any material breach of this Agreement does not constitute
the
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cancellation or termination of the overall Licence of Computer Software
Agreement.
Should the Client voluntarily wish to terminate this agreement, the Client
may do so by providing ninety (90) days written notice to the
Vendor. In which case the termination of this Agreement will also
terminate the Licence of Computer Software Agreement.
8. DISCLAIMER
The Vendor does not make and expressly disclaims, all representations and
warranties other than those expressly made herein or in the "Licence of
Computer Software Agreement", whether oral or written, express or implied,
by statute or otherwise, included without limitation any warranties of
merchantability or fitness for purpose. The Vendor shall in no event be
liable for economic, incidental, consequential, indirect, special,
punitive or exemplary damages, whether claimed under contract, tort or any
other legal remedy or theory or for any loss of or damage to the Client
data or programming. Any action against the Vendor by the Client must be
brought within six (6) months after the cause of action accrues.
9. LIMITATION
The Services to be supplied hereunder are limited to the Programs
specified in the LICENCE OF COMPUTER SOFTWARE agreement between the
parties hereto dated the same date herewith, and shall not include or
extend to any other Software or other programs of the Vendor or any part
thereof, whether released by the Vendor before or after the date of this
Agreement. Any Services which are performed by the Vendor at the request
of the Client, in addition to the grant of the License expressly provided
for herein, including, without limitation, Programming Services, Training
Services, Data Conversion Services or products shall require the payment
of additional fees to the Vendor. Such fees shall be calculated utilizing
the Vendor's then current fees. Any such Services or products provided by
the Vendor to the Client shall be provided subject to the disclaimers and
limitations on liability provided for herein.
10. CONFIDENTIALITY
(a) Neither party shall:
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(i) use or disclose Confidential Information of the other for any
purpose other than the performance of this Agreement;
(ii) disclose Confidential Information of the other to any person who
is not bound by suitable non-disclosure arrangements made with the
party so disclosing which adequately protect Confidential
Information;
(iii) copy any Confidential Information of the other without the prior
written consent of that other party unless otherwise provided in
this Agreement; or
(iv) directly or indirectly induce or attempt to induce any employee or
consultant of the other to terminate his or her employment with the
other party; nor shall either party, without prior written consent
of the other, offer employment to any employee or consultant of
the other, or to terminated employees and consultants of the other
during the six (6) month period immediately following the
employee's or consultant's termination. For purposes of this
paragraph, the Client and the Vendor agree that the terms
"employee" and "consultant" shall mean only those employees and
consultants of either party who are substantially involved in the
development, marketing, servicing, distribution or use of any of
the Vendor's Systems. The parties agree that the sum of Ten
Thousand Dollars ($10,000.00) shall become payable forthwith upon
breach of this paragraph by the party in breach to the other, as a
reasonable pre-estimate of damages and not as a penalty.
(b) Confidential Information of either party in the possession of the other
shall be returned forthwith on written request after use thereof has been
completed for purposes of performance of this Agreement.
(c) This paragraph does not apply to information that was or later becomes
generally known or available to the public or the trade or industry in
which either party is engaged by means other than breach of this
Agreement by the other party.
(d) The terms and conditions of this Agreement are the Confidential
Information of both parties.
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11. GOVERNING LAW
This Agreement shall be construed and interpreted solely in accordance
with the laws of the State of Indiana.
12. HEADINGS
The Headings to the Articles of this Agreement are solely for the
convenience of the parties and shall in no way be held to explain,
modify, amplify or aid in the interpretation of any of the
provisions hereof.
13. NOTICES
Any notices or other communications required or permitted to be given
or delivered under this Agreement shall be in writing (unless otherwise
specifically provided herein) and shall be sufficiently given if
delivered personally or mailed by first-class mail, postage prepaid
or sent by electronic facsimile with satisfactory evidence of
transmission together with a confirmation copy by first class mail,
postage prepaid, to the addresses on page one (1) of this agreement
or to such other address or addressee as either party may from time
to time designate to the other by written notice.
Any such notice or other communications shall be deemed to be given
when personally delivered or transmitted electronically or as of the
fourth business day after it is placed in the mail in the manner
specified. In the event of disruption of postal Services or the
reasonably anticipated disruption thereof, notice shall be given by
personal delivery or electronic facsimile.
14. ASSIGNMENT
Neither party may assign this Agreement, or any of its rights and
obligations hereunder, without the prior written consent of the other
party.
15. SEVERABILITY
In the event any one or more of the provisions of this Agreement shall
for any reason be held to be invalid, illegal or unenforceable, the
remaining provisions of this Agreement shall be unimpaired, and
the invalid, illegal or unenforceable
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provisions shall be replaced by a mutually acceptable provision, which,
being valid, legal and enforceable, comes closest to the intention of
the parties underlying the invalid, illegal or unenforceable
provisions."
16. FORCE MAJEURE
Delay or failure of either party to fulfil or perform any of its
obligations hereunder shall be excused by any cause beyond the
reasonable control of the party so delaying or failing including
without limitation, sabotage, fire, flood, differences with employees,
riot, insurrection, war, inability to obtain components at competitive
prices, act of governmental authority, interruption of or delay in
transportation, communication line failure, power failure and acts of
God. The party so delaying or failing shall promptly notify the other
of any such event, the expected duration thereof and its anticipated
effects and make reasonable efforts to remedy the effects of such
event.
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18. ENTIRE AGREEMENT
This Agreement together with all appendices, schedules, Amendment and
other attachments hereto, constitutes the entire agreement between
the parties hereto and any waiver, amendment or modification hereto is
not binding unless in writing and signed by an authorized
representative of the parties.
IN WITNESS WHEREOF, the parties hereto each acting under due and proper
authority have executed this Amendment as of the day, month and year
written below.
TRITECH FINANCIAL XXXXXX INTERNATIONAL
SYSTEMS INC. GROUP INC.,
Per: /s/ Cannot read signature Per: /s/ Xxxxxxx X. Xxxxxx
------------------------- -----------------------
Title Chairman Title President
-------------------- -----------------------
Date June 12, 1995 Date August 30, 1995
------------------- ----------------------
Affixed with Corporate Seal Affixed with Corporate Seal
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EXHIBIT A
SCHEDULE OF FEES
The on-going ANNUAL "XXXX" payments are:
MANDATORY - Base annual licence and upgrade fee - as per BASE
ANNUAL FEE on table below. (Includes one State).
OPTIONAL - Additional States - to be determined.
OPTIONAL - Hot Line Support, includes the first site, Additional sites will
be quoted.
GROSS BASE HOT LINE
ANNUAL ANNUAL SUPPORT
PREMIUM FEE FEE
------- -------- -------
1 - 5,000,000 15,000 15,000
$ 5,000,001 - 15,000,000 20,000 16,000
$ 15,000,001 - 20,0001000 25,000 17,000
$ 20,000,001 - 25,000,000 30,000 19,000
$ 25,000,001 - 35,000,000 35,000 21,000
$ 35,000,001 - 50,000,000 40,000 24,000
$ 50,000,001 - 75,000,000 50,000 27,000
$ 75,000,001 - 100,000,000 60,000 30,000
$100,000,001 - 150,000,000 70,000 45,000
$150,000,001 - 200,000,000 80,000 60,000
$200,000,001 - 350,000,000 110,000 90,000
$350,000,001 - 500,000,000 150,000 120,000
$500,000,001 - 750,000,000 200,000 145,000
GROSS ANNUAL PREMIUM of Client: 55 million
BASE ANNUAL FEE: $ 50,000.00
ADDITIONAL Sates supported: Based on time and materials
HOT LINE support: $ 27,000.00
ADDITIONAL SITES supported: One $ 6,000.00
TOTAL ANNUAL XXXX PAYMENTS: $ 83,000.00
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Paid in monthly instalments of: $ 6,916.67
-----------
It is understood and agreed that the Client's Gross Annual Premium for the
term shall be calculated based on Fifty five Million dollars ($55,000,000).
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EXHIBIT B
GUIDELINES FOR OUT-OF-POCKET EXPENSES
BASIC POLICY
When the Vendor has to incur out of pocket expenses on behalf of the Client,
then the Client shall reimburse for reasonable, actual and necessary
out-of-pocket expenses in connection with the performance of the consulting
Services. Reasonable expenses are those that are not lavish or extravagant.
It is the responsibility of the Client and the Vendor to ensure that these
guidelines are followed. Should a site visit be required, the Vendor will
obtain a written authorization from the Client before any travel plans shall be
made.
OUT-OF-POCKET EXPENSES GUIDELINES
Travel
a) Air Transportation
All air transportation is to be at discounted coach fares or as
approved by the client.
b) Transportation To/From Airports
Hotel courtesy shuttles should be used whenever possible. After
that, airport limousine Services and airport buses should be
used. Taxis should be used as a last choice and shared as
appropriate.
c) Other Ground Transportation
Use of personal cars shall be reimbursed at the rate of 25 cents per
kilometre. Car rental shall be reimbursed for a compact or
mid-size car. Reimbursement shall be made for tolls and parking.
Lodging
Reimbursement shall be made for standard rooms. No reimbursement
shall be made for deluxe or upgraded rooms or for suites.
Meals
A daily allowance of $30 should be followed unless agreed to
otherwise.
