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EXHIBIT 10.12
ADMINISTRATION SERVICES AGREEMENT
ADMINISTRATION SERVICES AGREEMENT ("Agreement") made effective as of the
1st day of January, 1998, by and between Bankers Insurance Group, Inc., a
Florida corporation (herein, "Bankers") and Insurance Management Solutions
Group, Inc., a Florida corporation (herein, "IMSG").
WHEREAS, Bankers has extensive experience in the management of
property/casualty insurance business; and
WHEREAS, IMSG is a subsidiary of Bankers and desires Bankers to perform
certain administrative and special services (collectively "services") for IMSG
in its operations and as IMSG may request; and
WHEREAS, Bankers and IMSG contemplate that such an arrangement will
achieve certain operating economies, and improve services to the mutual benefit
of both Bankers and IMSG; and
WHEREAS, Bankers and IMSG wish to assure that all charges for services and
the use of Facilities incurred hereunder are reasonable and to the extent
practicable reflect actual costs and are arrived at in a fair and equitable
manner, and that estimated costs, whenever used, are adjusted periodically, to
bring them into alignment with actual costs;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants herein contained, and intending to be legally bound hereby, Bankers
and IMSG agree as follows:
1. PERFORMANCE OF SERVICES AND USE OF FACILITIES. Bankers agrees to the
extent requested by IMSG to perform such services for IMSG as IMSG determines to
be reasonably necessary in the conduct of its operations. Bankers agrees to the
extent requested by IMSG to make available its Facilities to IMSG as IMSG may
determine to be reasonably necessary in the conduct of its operations, including
but not limited to: human resource services, such as recruiting, hiring,
benefits administration and training, legal services, certain corporate
accounting functions, buildings and services, cash management, agency accounting
and corporate communications. Bankers agrees at all times to use its best
efforts to maintain sufficient personnel and Facilities of the kind necessary to
perform this Agreement.
(a) Capacity of Personnel: Status of Facilities. Whenever Bankers
utilizes its personnel to perform services for IMSG pursuant to the this
Agreement, such personnel shall at all times remain employees of Bankers or its
affiliates and Bankers shall alone retain full liability to such employees for
their welfare, salaries, fringe benefits, legally required employer
contributions and tax obligations. No Facility of Bankers used in performing
services for or subject to use by IMSG shall be deemed to be transferred,
assigned, conveyed or leased by performance or use pursuant to this Agreement.
(b) Exercise of Judgment in Rendering Services. In providing any
services hereunder which require the exercise of judgment by Bankers, Bankers
shall perform any such service in accordance with any standards and guidelines
IMSG develops and communicates to Bankers. In performing any services hereunder,
Bankers shall at all times act in a manner reasonably calculated to be in, or
not opposed to, the best interests of IMSG, and in any event in accordance with
the written standards and guidelines of IMSG.
(c) Control. The performance of services by Bankers for IMSG pursuant
to this Agreement shall in no way impair the absolute control of the business
and operations of Bankers or IMSG by their respective Boards of Directors.
Bankers shall act hereunder so as to assure the separate operating identity of
IMSG.
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2. SERVICES
A. Custodial Services. Subject to the direction and control of the
Board of Directors of IMSG, IMSG does hereby appoint Bankers and Bankers does
accept such appointment to act as a custodian of cash and similar assets, with
full power and authority to act for, on behalf of, and in the name of IMSG in
the maintenance and management of monies, or other sums as IMSG may entrust to
Bankers under this Agreement; provided that:
(1) Bankers shall keep and maintain proper books and records wherein
shall be recorded the business transacted by it on behalf of, in the name of, or
on account of IMSG. Bankers shall monthly submit to an officer of IMSG
designated by IMSG for that purpose a transaction report for the preceding
month.
(2) Subject to the direction and control of the Board of Directors
of IMSG, and subject to compliance with investment guidelines established by
IMSG, Bankers shall make, manage, and dispose of all investments of IMSG in
accordance with the terms and conditions of a separate agreement to be entered
into between the parties hereto.
(3) Whenever Bankers receives and collects monies for the account of
IMSG, Bankers will not commingle such monies with its own, but will deposit such
monies in an appropriate separate account in the name of IMSG.
B. Functional Support Services. Subject to the ultimate control and
direction of the IMSG Board of Directors, Bankers shall provide legal services,
including the negotiation and preparation of contracts, agreements and agency
documents, governmental relations and advising on regulatory compliance and
rendering opinions on various legal matters, assisting IMSG with the selection
and performance management of third party legal counsel associated for purposes
of the prosecution or defense of actions. Other services to be provided include
Human Resources, payroll and employee relations services. Also provided is
Agency Accounting and Accounts Payable, Cash Management, Property Accounting,
Audit Services and Agency Licensing.
C. Location. Except as is herein specifically set forth to the
contrary, it is understood Bankers shall be providing all of the services for
which provision is herein set forth from its principal place of business located
in St. Petersburg, FL.; provided that such facility may be relocated from time
to time to such reasonable location as IMSG may determine upon 60 days' advance
notice to IMSG.
3. CHARGES.
(a) IMSG agrees to reimburse Bankers for services and Facilities
provided by Bankers to IMSG pursuant to this Agreement. The charge to IMSG for
such services and Facilities shall include all direct and directly allocable
expenses, reasonably and equitably determined to be attributable to IMSG by
Bankers, plus a reasonable charge for direct overhead, the amount of such charge
for overhead to be agreed upon by the parties from time to time. Quarterly
charges for Calendar Year 1998 are identified in Exhibit A.
(b) Bankers' determination of charges hereunder shall be presented to
IMSG, and if IMSG objects to any such determination, it shall so advise Bankers
within thirty (30) days of receipt of notice of said determination. Unless the
parties can reconcile any such objection, they shall agree to the selection of a
firm of independent certified public accountants which shall determine the
charges properly allocable to IMSG and shall, within a reasonable time, submit
such determination, together with the basis therefore, in writing to Bankers and
IMSG whereupon such determination shall be binding. The expenses of such a
determination by a firm of independent certified public accountants shall be
borne equally by Bankers and IMSG.
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4. PAYMENT.
(a) IMSG shall advance such funds to Bankers as the parties may
mutually agree are reasonably necessary to cover the charges (provision for
which is set forth in paragraph 3 hereof) of IMSG for the ensuing calendar
quarter.
(b) Within thirty (30) days after the end of each month, Bankers will
submit to IMSG a detailed written statement and accounting of the charges due
from IMSG to Bankers for services and the use of Facilities pursuant to this
Agreement in the preceding calendar quarter, including charges not included in
any previous statements. Any amount advanced by IMSG to Bankers under Section
4(a) hereof in excess of (i) the actual charges for services and Facilities
rendered and received plus (ii) such amount as is reasonably required for such
charges for the subsequent calendar quarter shall be refunded to IMSG by Bankers
along with the detailed written statement and accounting.
5. RECORDS AND DOCUMENTS RELATING TO CHARGES. Bankers shall be responsible
for maintaining full and accurate accounting records of all services rendered
and Facilities used pursuant to this Agreement and such additional information
as IMSG may reasonable request for purposes of its internal bookkeeping and
accounting operations. Bankers shall make such accounting records insofar as
they pertain to the computation of charges hereunder available at its principal
offices for audit, inspection and copying by IMSG or any governmental agency
having jurisdiction over IMSG during all reasonable business hours.
6. OTHER RECORDS AND DOCUMENTS.
(a) All books, records, and files established and maintained by Bankers
by reason of its performance under this Agreement which, absent this Agreement,
would have been held by IMSG, shall be the property of IMSG and shall be subject
to examination by IMSG and persons authorized by it at all times. IMSG may at
any time require Bankers to surrender possession of such books, records and
files, whereupon Bankers shall deliver them to IMSG.
(b) Without limiting the generality of the foregoing and
notwithstanding anything in this Agreement appearing to the contrary, it is
mutually understood and agreed that IMSG shall maintain the originals of its
books of account at its home office in Florida. For the purposes of this
Agreement, the term "books of account" means: the Charter and By-laws; the
record containing the names and addresses of shareholders, the number and class
of shares held by each and the dates when they respectively became the owners of
record thereof; the minutes of any meetings of shareholders and of the board of
directors and any committees thereof; the general ledger; the investment ledger;
journals; the cash book; subsidiary ledgers; annual and quarterly statements;
and all minutes supporting annual, quarterly and other statements and reports
filed with or submitted to supervisory and regulatory authorities.
7. TERMINATION AND MODIFICATION. This Agreement or any part thereof shall
commence and be effective as of the day and year first above set forth and shall
remain in effect for a period of one year. IMSG has the option of renewing this
Agreement for two successive one year periods upon 30 days prior written notice.
Thereafter, the term of this Agreement shall be perpetual, but can be
terminated, at no penalty, by either party upon 60 days prior written notice to
the other party. Upon termination, Bankers shall promptly deliver to IMSG all
books and records that are, or are deemed by this Agreement to be, the property
of IMSG. This Agreement may be amended only by mutual consent in writing signed
by the parties.
8. SETTLEMENT ON TERMINATION. No later than ninety (90) days after the
effective date of termination of this Agreement, Bankers shall deliver to IMSG a
detailed written statement for all charges incurred and not included in any
previous statement to the effective date of termination. The amount owed by
either party hereunder shall be due and payable within thirty (30) days of
receipt of such statement.
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9. ASSIGNMENT. This Agreement and any rights pursuant hereto shall not be
assignable by either party hereto, except by operation of law. Nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto, or their respective legal successors, any rights, remedies,
obligations or liabilities, or to relieve any person other that the parties
hereto, or their respective legal successors, from any obligations or
liabilities that would otherwise be applicable.
10. GOVERNING LAW. This Agreement is made pursuant to and shall be
governed by, interpreted under, and the right of the parties determined in
accordance with, the laws of the State of Florida.
11. NOTICE. All notices, statements or requests provided for hereunder
shall be in writing and shall be deemed to have been duly given when delivered
by hand to an officer of the other party, or when deposited with the U.S. Postal
Service, as certified or registered mail, postage prepaid, addressed
(a) If to Bankers to:
000 Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xx. Xxxxxxxxxx, XX 00000
Attn: G. Xxxxxxx Xxxxxx
(000) 000-0000 FAX (000) 000-0000
(b) If to IMSG to:
000 Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Chairman
(000) 000-0000 x 0000 FAX (000) 000-0000
or to such other person or place as each party may from time to time designate
by written notice sent as aforesaid.
12. HEADINGS. The headings of the various paragraphs of this Agreement are
for convenience only, and shall be accorded no weight in the construction of
this Agreement.
13. ENTIRE AGREEMENT. This Agreement, together with such Amendment as may
from time to time be executed in writing by the parties, constitutes the entire
Agreement between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate by their respective officers duly authorized so to do, and their
respective corporate seals to be attached hereto as of the date and year first
above written.
WITNESSES: INSURANCE MANAGEMENT
SOLUTIONS GROUP, INC.
/s/ C. Xxxxxxx Xxxxxx BY: /s/ Xxxxxxx X. Xxxxx
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AS ITS: COO
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DATE: 5/15/98
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WITNESSES: BANKERS INSURANCE GROUP, INC.
/s/ Xxxxx Xxxxx BY: /s/ G. Xxxxxxx Xxxxxx
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AS ITS: Corporate Secretary
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DATE: 5/18/98
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Exhibit A Fee Schedule
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Exhibit A
Management Agreement
Bankers Insurance Group, Inc. Services to Insurance Management Solutions Group
Functions performed by Bankers Insurance Group, Inc. for the benefit of
Insurance Management Solutions Group, Inc. for the Calendar year 1998 by
quarter:
Human Resources: Quarter 1 $ 175,000
Quarter 2 $ 175,000
Quarter 3 $ 175,000
Quarter 4 $ 175,000
Accounts Payable: Quarter 1 $ 11,250
Quarter 2 $ 11,250
Quarter 3 $ 11,250
Quarter 4 $ 11,250
Agency Accounting: Quarter 1 $ 137,500
Quarter 2 $ 137,500
Quarter 3 $ 137,500
Quarter 4 $ 137,500
Cash Management: Quarter 1 $ 21,250
Quarter 2 $ 21,250
Quarter 3 $ 21,250
Quarter 4 $ 21,250
Property Accounting: Quarter 1 $ 5,000
Quarter 2 $ 5,000
Quarter 3 $ 5,000
Quarter 4 $ 5,000
Audit Services: Quarter 1 $ 37,500
Quarter 2 $ 37,500
Quarter 3 $ 37,500
Quarter 4 $ 37,500
Agency Licensing: Quarter 1 $ 5,000
Quarter 2 $ 5,000
Quarter 3 $ 5,000
Quarter 4 $ 5,000
Affiliated Senior Management: Quarter 1 $ 3,750
Quarter 2 $ 3,750
Quarter 3 $ 3,750
Quarter 4 $ 3,750
Total Contract Based on 1998 Budgets and Projections: $1,570,000
IMS may, from time to time as needed, require Corporate Legal Services and
Corporate Communications Services. Such services will be provided on an Hourly
Basis as follows:
Legal Services: $150.00 per Hour
Corporate Communications: $40.00 per Hour
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It is understood by both IMS and Bankers Insurance Group, Inc. that should
material fluctuations in either a positive or negative direction impact IMS,
either party has the right to re-negotiate those contemplated services and
corresponding fees in light of material changes in demand for said services.
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ADDENDUM TO
ADMINISTRATION SERVICES AGREEMENT
This is an addendum to an Administration Services Agreement ("Agreement")
executed to be effective the 1st day of January, 1998, by and between Bankers
Insurance Group, Inc. (herein "Bankers") and Insurance Management Solutions
Group, Inc. (herein "IMSG").
WHEREAS, as part of the Agreement, Bankers agreed to provide certain legal
services to IMSG, and
WHEREAS, the parties wish to establish the appropriate remuneration for
such legal services.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound thereby, Bankers
and IMSG agree as follows:
1. For the full term of the Agreement Bankers shall provide the
routine, ordinary and necessary legal services to IMSG as generally
described in Section 2B of the Agreement in consideration for the
payment of $120,000 annually.
2. Legal services for other than routine matters shall be
performed as required by IMSG and shall be billed at a negotiated
price. Examples of non-routine legal matters shall include but not be
limited to, mergers or acquisitions with unrelated third parties, and
significant equity or debt securities offerings.
3. Except for the terms of this Addendum, all other terms of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals in
St. Petersburg, Florida.
WITNESSES: BANKERS INSURANCE GROUP, INC.
By: /s/ J. Xxxxxxx Xxxxxx
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As Its: Corporate Secretary
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Date:
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WITNESSES: INSURANCE MANAGEMENT SOLUTIONS
GROUP, INC.
By: /s/ Xxxxx X. Xxxx
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As Its: Chief Financial Officer
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Date: 12/2/98
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ADDENDUM TO ADMINISTRATION SERVICE AGREEMENT
Administrative Service Agreement ("Agreement") by and between Insurance
Management Solutions Group, Inc. ("IMSG") and Bankers Insurance Group, Inc.
("BIG") was entered into effective January 1, 1998,
WHEREAS, the parties desire to amend that Agreement effective January
1, 1999.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained and intending to be legally bound hereby, IMSG and
BIG agree as follows:
1. Revised service fees attached as Exhibit "A" are adopted by the
parties.
2. Except for the terms of this Addendum, all other terms of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate by their respective officers duly authorized so to do, and
their respective corporate seals to be attached hereto as of the date and year
first above written.
WITNESSES: INSURANCE MANAGEMENT SOLUTIONS
GROUP, INC.
BY: /s/ Xxxxx X. Xxxx
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AS ITS: CFO
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DATE:
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WITNESSES: BANKERS INSURANCE GROUP, INC.
BY: /S/ G. Xxxxxxx Xxxxxx
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AS ITS: Corporate Secretary
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DATE:
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EXHIBIT A
MANAGEMENT SERVICES AGREEMENT
BANKERS INSURANCE GROUP, INC. SERVICES TO INSURANCE MANAGEMENT SOLUTIONS GROUP
FUNCTIONS PERFORMED BY BANKERS INSURANCE GROUP, INC. FOR THE BENEFIT OF
INSURANCE MANAGEMENT SOLUTIONS GROUP, INC. FOR THE CALENDAR YEAR 1999 BY
QUARTER:
HUMAN RESOURCES: QUARTER 1 $175,000
QUARTER 2 $175,000
QUARTER 3 $175,000
QUARTER 4 $175,000
AGENCY ACCOUNTING: QUARTER 1 $27,500
QUARTER 2 $27,500
QUARTER 3 $27,500
QUARTER 4 $27,500
CASH MANAGEMENT: QUARTER 1 $21,250
QUARTER 2 $21,250
QUARTER 3 $21,250
QUARTER 4 $21,250
AGENCY LICENSING: QUARTER 1 $5,000
QUARTER 2 $5,000
QUARTER 3 $5,000
QUARTER 4 $5,000
CORPORATE LEGAL SERVICES QUARTER 1 $30,000
QUARTER 2 $30,000
QUARTER 3 $30,000
QUARTER 4 $30,000
IMS MAY, FROM TIME TO TIME AS NEEDED, REQUIRE CORPORATE COMMUNICATIONS SERVICES.
SUCH SERVICES WILL BE PROVIDED ON AN HOURLY BASIS AS FOLLOWS:
CORPORATE COMMUNICATIONS: $40.00 PER HOUR
IT IS UNDERSTOOD BY BOTH IMSG AND BANKERS INSURANCE GROUP, INC. THAT SHOULD
MATERIAL FLUCTUATIONS IN EITHER A POSITIVE OR NEGATIVE DIRECTION IMPACT IMSG,
EITHER PARTY HAS THE RIGHT TO RE-NEGOTIATE THOSE CONTEMPLATED SERVICES AND
CORRESPONDING FEES IN LIGHT OF MATERIAL CHANGES IN DEMAND FOR SAID SERVICES.
