Exhibit (8)(g)
MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT (the "AGREEMENT") is made as of the 17th day of
November, 2000 by and between GENERAL AMERICAN LIFE INSURANCE COMPANY ("GENERAL
AMERICAN"), a Missouri corporation having its principal office and place of
business at 00000 Xxxxxx Xxxxx Xxxx, Xx. Xxxxx, Xxxxxxxx 00000 and LIBERTY
INSURANCE SERVICES CORPORATION ("LIS"), a South Carolina corporation having
offices located at 0000 Xxxxxxxx Xxxxxxx Xxxxx, Xx. Xxxxx, Xxxxxxxx 00000.
BACKGROUND
GENERAL AMERICAN desires to engage LIS to perform certain Services and LIS
desires to perform those Services for GENERAL AMERICAN, through its Outsourcing
Solutions division based in St. Louis, Missouri, all on the terms and conditions
set forth in this Agreement and one or more Engagement Schedules (as defined in
Section 2 [Definitions], below) that are entered into now or from time to time
in the future.
AGREEMENT
Accordingly, GENERAL AMERICAN and LIS agree as follows:
SECTION 1: STRUCTURE OF AGREEMENT
1.01 USE OF THIS AGREEMENT. The services to be performed under this
Agreement will be defined in written Engagement Schedules that are executed by
both parties, through Authorized Representatives of LIS and of GENERAL AMERICAN.
This Agreement provides the basic terms and conditions which apply to all
Engagement Schedules, unless otherwise provided in the relevant Engagement
Schedule.
1.02 DEFINITIONS. Capitalized terms shall have the meanings given
to them in Section 2 (Definitions), below, unless they are otherwise defined in
the Engagement Schedule.
1.03 CONTENTS OF ENGAGEMENT SCHEDULE. Each Engagement Schedule
should address the following points:
a) the scope of the services to be performed and any agreed upon
administration procedures, and accounting guidelines;
b) the compensation arrangement or structure;
c) a specific reference to this Agreement; and
d) any other information, terms and conditions.
1.04 SERVICES SPECIFIED. It is understood and agreed by the parties
that LIS shall not be obligated to perform any services that are not expressly
provided for in an Engagement Schedule, as the same may be amended in writing
from time to time.
1.05 SEPARATE CONTRACT. It is understood and agreed by the parties
that, unless otherwise expressly provided in a particular Engagement Schedule or
Engagement Schedules, each Engagement Schedule (as it is supplemented and
amended by the terms and conditions of this Agreement) shall be deemed a
separate contract by and between GENERAL AMERICAN and LIS. Unless the context
indicates otherwise, any reference in an Engagement Schedule or this Agreement
to an "Engagement Schedule" shall, accordingly, be deemed to refer solely to the
relevant Engagement Schedule (and any schedules, attachments or addenda to that
particular Engagement Schedule), as supplemented and amended by the terms and
conditions of this Agreement. Any reference to "the Agreement" shall be deemed
to refer (unless expressly otherwise so provided) to the relevant Engagement
Schedule (which incorporates the terms and conditions of this Agreement).
SECTION 2: DEFINITIONS
The following capitalized terms shall have the following meanings when used in
this Agreement or an Engagement Schedule:
"AUTHORIZED REPRESENTATIVE" shall mean an individual authorized to
execute this Agreement and an Engagement Schedule (or an amendment thereto) on
behalf of a Party, which individual, for LIS and GENERAL AMERICAN, shall be at
the Vice-President level or above.
"ENGAGEMENT SCHEDULE" shall mean a document signed by an Authorized
Representative of GENERAL AMERICAN and by an Authorized Representative of LIS
and delineating certain Services (defined below) to be performed pursuant to
this Agreement. An Engagement Schedule should address the items mentioned in
Section 1.03 (Contents of Engagement Schedule), above, and is subject to the
terms and conditions of this Agreement, as provided in Section 1.05 (Separate
Contract), above.
"MATERIALS" shall mean software code, documentation, other written
materials or tangible or intangible items, including machine readable media with
code or documentation recorded on it, or any combination of these items and all
information embodied in any of these items or disclosed by any of these items,
but excluding (a) any of LIS' proprietary methodologies, techniques and tools
(including conversion tools) and (b) any other pre-existing materials owned by
LIS.
"LIS-CREATED MATERIALS" shall mean any Materials created by LIS;
however, LIS-Created Materials shall not include pre-existing works of LIS
unless the relevant Engagement Schedule specifically identifies those
pre-existing works and states that ownership of them is to be transferred to
GENERAL AMERICAN by LIS, nor shall LIS-created Materials include GENERAL
AMERICAN Materials or any Materials of third parties.
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"PASS THROUGH EXPENSES" shall mean those expenses actually incurred by
LIS in the performance of the Services, which are described more fully in the
applicable Engagement Schedule, and which are reimbursable thereunder.
"PARTY" shall mean either GENERAL AMERICAN or LIS, and "PARTIES" shall
mean both GENERAL AMERICAN and LIS.
"SERVICES" shall mean those services to be provided by LIS or its
affiliate pursuant to a particular Engagement Schedule.
"TAXES" shall mean present or future sales, use, income, stamp, or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
governmental authority, and all liabilities with respect thereto, but Taxes
shall not include income or franchise taxes imposed on LIS by the jurisdiction
under the laws of which LIS is organized or any political subdivision or taxing
authority thereof or therein or as a result of a connection between LIS and any
jurisdiction other than a connection resulting solely from an Engagement
Schedule.
"GENERAL AMERICAN MATERIALS" shall mean Materials in which GENERAL
AMERICAN is the sole owner of all related intellectual property rights.
SECTION 3: CHANGES TO TERMS OF ENGAGEMENT SCHEDULE
3.01 CHANGES GENERALLY. Changes to the terms of the Engagement Schedule
or the Master Services Agreement may only be made by a written amendment that is
signed by an Authorized Representative of each Party and that refers to the
particular Engagement Schedule or Master Services Agreement that is to be
changed. If a change is made to or by an Engagement Schedule, that change shall
apply only with respect to that Engagement Schedule.
3.02 INCREASES TO WORK. Without limiting the generality of Section 3.01
(Changes Generally) above, if a change might increase LIS' cost or work effort
and LIS agrees to perform such change, LIS shall be compensated on a time and
materials basis for such additional work, unless compensation for such
additional work on that basis cannot practically be arranged or the Parties
otherwise agree in writing, in which case LIS shall propose an equitable
adjustment in payments and schedule. The Parties shall negotiate such
adjustments in good faith, recognizing that adjustments are subject to the
availability of trained personnel and other required resources.
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SECTION 4: OBLIGATIONS GENERALLY
4.01 PERFORMANCE GENERALLY. LIS and GENERAL AMERICAN agree to
render and discharge all of the duties, obligations and performance that it may
assume or undertake pursuant to an Engagement Schedule from time to time,
subject to, and in accordance with the terms and conditions of this Agreement.
It is understood and agreed, however, that LIS' obligations are subject to and
conditioned upon the full realization of any assumptions set forth in the
Engagement Schedule. Any performance schedule applicable to the particular
Services to be provided by LIS shall be attached to the relevant Engagement
Schedule.
4.02 MODE OF COMPENSATION. The relevant Engagement Schedule shall
indicate whether the compensation for LIS for the Services performed by or on
behalf of LIS will be based on a time and materials basis, on a per item rate or
on some other basis.
SECTION 4A: REGULATORY REQUIREMENTS FOR THE SERVICES
4A.01 LIS agrees to provide the Services in accordance with standard
insurance industry practice, conducting itself in a manner which complies either
with the Model Statute for Third Party Administrators as promulgated by the
National Association of Insurance Commissioners ("Model Statute"), as the Model
Statute is amended from time to time, or, alternatively, in a manner which
complies with appropriate state regulations or legislation governing the
Services to be provided herein, and in any event in compliance with all
applicable laws, rules and regulations governing third party administrators.
4A.02 LIS agrees that all claims paid by LIS from funds collected on
behalf of GENERAL AMERICAN shall be paid only on checks or drafts of GENERAL
AMERICAN and as authorized by GENERAL AMERICAN.
4A.03 To the extent required by applicable state law, LIS agrees to
provide a written notice to the annuitants or insureds or policyholders, as
mutually agreed upon by LIS and GENERAL AMERICAN, advising GENERAL AMERICAN's
annuitants or insureds or policyholders of the identity of and relationship
among LIS, the annuitant or insured or policyholder, and GENERAL AMERICAN. The
cost of such notices, however, shall be borne solely by GENERAL AMERICAN as
pass-through costs.
4A.04 LIS agrees that information which identifies an individual
covered by an ERISA plan is confidential, and that all such information
furnished by GENERAL AMERICAN to LIS hereunder is confidential. During the time
such ERISA confidential information is in LIS's custody or control, LIS agrees
to hold such information in compliance with Section 10 "CONFIDENTIALITY" and to
take all reasonable precautions to prevent disclosure or use of the ERISA
confidential information for a purpose unrelated to the administration of the
ERISA plan. LIS agrees to disclose such ERISA confidential information only: (a)
in response to a court order; (b) for an examination conducted by the applicable
insurance regulator for an audit or
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investigation conducted under ERISA; (c) to or at the request of GENERAL
AMERICAN; or (d) with the written consent of the identified individual or his or
her legal representative.
4A.05 LIS agrees to comply with the bond and insurance requirements
of each state in which LIS administers claims for GENERAL AMERICAN.
4A.06 LIS agrees to establish and maintain facilities and procedures
for the safekeeping of GENERAL AMERICAN's annuity and policy forms, check forms
and facsimile signature imprinting devices, if any, and all other documents,
reports, records, books, files, and other materials relative to this Agreement
and to the Services to be provided by LIS hereunder, and all transactions
between LIS and the annuitants or insureds or policyholders of GENERAL AMERICAN,
which shall include the identity and addresses of such persons (collectively,
"Books and Records"). Except as otherwise provided by regulatory authority, LIS
agrees to maintain the Books and Records of GENERAL AMERICAN at either GENERAL
AMERICAN's place of operations, at LIS's principal administrative office, or at
such other designated site mutually agreed upon, for the duration of this
Agreement and for a period of six (6) years thereafter, unless otherwise
instructed by GENERAL AMERICAN, or, at GENERAL AMERICAN'S request, shall
transfer such Books and Records to GENERAL AMERICAN or GENERAL AMERICAN's
designee, at GENERAL AMERICAN's cost. Such retention period for Books and
Records may be extended by GENERAL AMERICAN if required by regulatory or taxing
authority. Any additional expense associated with the longer retention period
shall be borne by GENERAL AMERICAN.
4A.07 LIS agrees that GENERAL AMERICAN, and any applicable insurance
regulator, shall have reasonable access, during LIS's normal business hours, to
all pertinent Books and Records of GENERAL AMERICAN which relate to the Services
to be performed under this Agreement for the purpose of examination, audit and
inspection, in a media usable by them. LIS shall assist GENERAL AMERICAN in any
regulatory examination relating to the annuities or policies or to the Books and
Records of GENERAL AMERICAN. GENERAL AMERICAN shall keep confidential any of
LIS's confidential information or trade secrets contained in the Books and
Records of GENERAL AMERICAN. LIS agrees that GENERAL AMERICAN, or its duly
authorized independent auditors, or appropriate insurance regulatory examiners
who are performing regulatory examinations of GENERAL AMERICAN, shall have the
right under this Agreement to perform on-site audits of the Books and Records of
GENERAL AMERICAN directly pertaining to the annuities or policies for which LIS
is performing the Services under this Agreement, in accordance with reasonable
procedures and at reasonable frequencies.
4A.08 In addition to the provisions of Section 10 "CONFIDENTIALITY",
LIS, and any employee, agent, attorney, accountant, advisor, consultant, or
other representative of LIS with a need to know, shall keep the customer data
and Private Information to which LIS is directly accessible in the
implementation and performance of the Services in strictest confidence and,
except for disclosures strictly required by public agencies having jurisdiction
over LIS or GENERAL AMERICAN or made as required by law or applicable
regulation, will not disclose any such data and/or information to third parties
without the express written consent of GENERAL AMERICAN.
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4A.09 In addition to those Services expressly delineated elsewhere
in the Agreement, LIS agrees that LIS shall be responsible for the following
functions:
(1) LIS agrees to maintain detailed books and records that reflect
all administered transactions under this Agreement, including, without
limitation, premiums received for the annuities and policies, agents'
commissions for the annuities and policies, LIS's administrator's fees,
contributions received and deposited on behalf of GENERAL AMERICAN, claims paid
on behalf of GENERAL AMERICAN, and authorized expenses paid on behalf of GENERAL
AMERICAN.
(2) The detailed preparation, journalizing, and posting of Books
and Records shall be made in accordance with the terms and conditions of this
Agreement, and, if applicable, in accordance with ERISA, as amended, and in such
a manner as to enable GENERAL AMERICAN to complete its annual financial
statement in accordance with the National Association of Insurance
Commissioners' guidelines, as amended, or other reports as may be required by
any applicable law or insurance regulatory authority.
(3) LIS shall maintain a cash receipts register of all premiums
and contributions received.
(4) The description of a disbursement shall be in sufficient
detail to identify the source document substantiating the purpose of the
disbursement, and shall include all of the following: (i) the check number; (ii)
the date of disbursement; (iii) the person to whom the disbursement was made;
(iv) the amount disbursed; and (v) ledger account number. If the amount
disbursed does not agree with the amount billed or authorized, LIS shall prepare
a written record as to the application for the disbursement. If the disbursement
is for the earned administrative fee or commission, the disbursement shall be
supported by evidential matter. The evidential matter must be referenced in the
journal entry so that it may be traced for verification.
(5) LIS shall prepare and maintain monthly financial institution
account reconciliations, if such service is requested by GENERAL AMERICAN as
part of the Services.
(6) LIS shall render and reconcile accounts detailing all
transactions and remit all money due to GENERAL AMERICAN under this Agreement at
least monthly. LIS will not less often than monthly render an accounting to
GENERAL AMERICAN detailing all transactions performed by LIS pertaining to the
annuities and policies for which LIS is performing Services under this
Agreement.
4A.10 LIS agrees that it will maintain complaint records and logs
and death claim logs for GENERAL AMERICAN as required by respective insurance
regulatory authorities. LIS will follow prescribed GENERAL AMERICAN standards
for response to such complaints and for other complaints which are not received
through an insurance regulatory authority. LIS will make available all records
and logs required in connection with any audits or examinations of GENERAL
AMERICAN. LIS will notify GENERAL AMERICAN of any suspected employee
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or agent fraud or defalcations within forty-eight (48) hours of LIS becoming
aware of such suspected problem. LIS will promptly notify GENERAL AMERICAN of
any threatened or filed lawsuits which have any connection to the annuities or
policies or to this Agreement. LIS will provide GENERAL AMERICAN with a copy of
any proposed written response to an insurance regulatory authority complaint on
behalf of GENERAL AMERICAN, and GENERAL AMERICAN shall either approve said
proposed written response or make suggested changes within forty eight (48)
hours of receipt of said proposed written response in order to facilitate a
timely response to the insurance regulatory authority on behalf of GENERAL
AMERICAN.
4A.11 Notwithstanding anything to the contrary herein, LIS shall not
receive commissions, fees, or charges contingent upon savings obtained in the
adjustment, settlement and payment of losses covered by GENERAL AMERICAN's
obligations, but LIS may receive compensation based on premiums or charges
collected or the number of claims paid or processed. LIS shall not receive from
GENERAL AMERICAN, or from any covered individual, any compensation or other
payments except as expressly set forth in this Agreement.
4A.12 In addition to the provisions of Section 10 "CONFIDENTIALITY";
LIS shall not use any Private Information for any purpose other than providing
the Services to GENERAL AMERICAN.
4A.13 Except as specifically granted in this Agreement, this
Agreement grants to LIS no right to use, possess, or reproduce any products or
customer lists or other Private Information of GENERAL AMERICAN or any GENERAL
AMERICAN affiliate company.
4A.14 Upon termination of this Agreement, any monies held by LIS on
behalf of GENERAL AMERICAN and owing to GENERAL AMERICAN shall immediately
become due and payable and shall be forwarded to GENERAL AMERICAN. Thereafter,
any additional funds payable by annuitants or policyholders of GENERAL AMERICAN
which are received by LIS shall immediately be sent to GENERAL AMERICAN.
4A.15 Any annuities, policies, certificates, booklets, termination
notices or other written communications delivered by GENERAL AMERICAN to LIS for
delivery to annuitants or policyholders shall be delivered by LIS promptly after
receipt of instructions from GENERAL AMERICAN to do so.
4A.16 Payments received by LIS for insurance on behalf of GENERAL
AMERICAN shall be deemed received by GENERAL AMERICAN. The payment of return
premiums or claims by GENERAL AMERICAN to LIS is not considered payment to
GENERAL AMERICAN or claimant until the payments are received by GENERAL AMERICAN
or claimant.
4A.17 LIS may only use advertising pertaining to the business of
GENERAL AMERICAN which has been approved in writing by GENERAL AMERICAN, and
which has been approved by state regulatory authorities as required by
applicable insurance laws.
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4A.18 In performing the Services, LIS must use the underwriting
standards which are set by GENERAL AMERICAN in writing. GENERAL AMERICAN shall
be responsible for determining the benefits, premium rates, underwriting
criteria and claims payment procedures applicable to the coverage and for
securing reinsurance, if any. The rules pertaining to these matters shall be
provided to LIS by GENERAL AMERICAN in writing and LIS shall follow these
written rules in performing the Services. The responsibility for maintaining a
Special Investigative Unit (SIU) pursuant to applicable insurance law or
regulation shall remain with GENERAL AMERICAN.
4A.19 Notwithstanding any other provision in this Agreement to the
contrary, whenever an annuity or policy is issued to a trustee, a copy of the
trust agreement and any amendments to it must be furnished to GENERAL AMERICAN
by LIS and be retained as part of the official records of both LIS and GENERAL
AMERICAN for the duration of the annuity or policy and for five (5) years
thereafter.
4A.20 All insurance charges, premiums, returned premiums, or other
money collected by LIS on behalf of GENERAL AMERICAN shall be held by LIS in a
fiduciary capacity and deposited in an account established and maintained by LIS
on behalf of GENERAL AMERICAN, or such other account as GENERAL AMERICAN may
designate.
SECTION 4B: PROVISIONS RELATED TO CERTAIN SPECIFIC STATE INSURANCE LAWS
GOVERNING THIRD PARTY ADMINISTRATORS
LIS and GENERAL AMERICAN each agree as follows:
4B.01 Pursuant to A.R.S. Section 20-485.01.B of the Insurance Laws
of the State of Arizona which specifies that the insurer must provide fifteen
(15) days written notice to the Director of Insurance for the State of Arizona
in the event of termination, cancellation or any other change in the Agreement,
LIS and GENERAL AMERICAN agree to provide such notice in compliance therewith in
the event any of the Services provided under this Agreement are provided in
ARIZONA.
4B.02 In the event any of the Services provided under this Agreement
are provided in GEORGIA: LIS agrees to maintain for GENERAL AMERICAN, at LIS's
principal administrative office, a complete file of all GENERAL AMERICAN's
advertisements, regardless of by whom written, created or designed, which are
used with respect to annuitants, potential annuitants, policyholders or
potential policyholders of GENERAL AMERICAN located in Georgia, with a notation
indicating the manner and extent of distribution and the form number of any such
annuity or policy contract advertised. Such file shall be subject to inspection
by the Office of Commissioner of Insurance of the State of Georgia. All such
advertisements shall be maintained in said file for a period of not less than
five (5) years. GENERAL AMERICAN shall prepare, with LIS's assistance, and LIS
shall, on behalf of GENERAL AMERICAN, file with the Commissioner of Insurance of
the State of Georgia on or before March 1 in each year, a certification executed
by an authorized officer of GENERAL AMERICAN wherein it is stated that to the
best of his knowledge, information and belief, the advertisements disseminated
by
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LIS, on behalf of GENERAL AMERICAN, during the preceding calendar year complied,
or were made to comply in all respects, with the advertising regulations of
GEORGIA.
4B.03 Pursuant to Sections 41-905, 41-909, 41-910, and 41-911 of the
Idaho Code, in the event any of the Services provided under this Agreement are
provided in IDAHO:
(1) Notwithstanding any other provision in this Agreement to the
contrary, LIS may only use advertising pertaining to the business underwritten
by GENERAL AMERICAN which has been approved in writing by GENERAL AMERICAN.
GENERAL AMERICAN shall have the prior approval of the Director of Insurance
before approving advertising for use by LIS.
(2) Notwithstanding any other provision in this Agreement to the
contrary, any policies, certificates, booklets, termination notices or other
written communications delivered by GENERAL AMERICAN to LIS for delivery to its
policyholders shall be delivered by LIS promptly after receipt of instructions
from GENERAL AMERICAN to do so.
(3) Notwithstanding any other provision in this Agreement to the
contrary, compensation to LIS for any Services where LIS adjusts or settles
claims shall in no way be contingent on a claim experience.
(4) Notwithstanding any other provision in this Agreement to the
contrary, LIS will retain records of GENERAL AMERICAN for a period of six (6)
years.
(5) Notwithstanding any other provision in this Agreement to the
contrary, LIS shall be bonded in an amount not less than ten percent (10%) of
the amount of total funds handled with a minimum bonding amount of $5,000. For
purposes of fixing the amount of such bond, the amount of funds handled shall be
determined by the total funds handled by LIS during the preceding year, or if no
funds were handled during the preceding year, the amount of funds reasonably
estimated to be handled during the current calendar year by LIS. Such bond shall
provide protection to GENERAL AMERICAN against loss by reason of acts of fraud
or dishonesty and may include individual bonds or schedule or blanket forms of
bonds. Only one (1) such bond shall be required of LIS for all insureds which
utilize the services of LIS, unless provided otherwise in this Agreement or any
amendments thereto.
4B.04 Pursuant to Section 00-00-000, Montana Code Annotated, in the
event any of the Services provided under this Agreement are provided in MONTANA:
(1) Notwithstanding any other provision in this Agreement
to the contrary, payments received by LIS for insurance on behalf of GENERAL
AMERICAN shall be deemed received by GENERAL AMERICAN. The payment of return
premiums or claims by GENERAL AMERICAN to LIS is not considered payment to
GENERAL AMERICAN or claimant until the payments are received by GENERAL AMERICAN
or claimant.
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(2) Notwithstanding any other provision in this Agreement
to the contrary, LIS may only use advertising pertaining to the business of
GENERAL AMERICAN which has been approved in writing by GENERAL AMERICAN.
(3) Notwithstanding any other provision in this Agreement
to the contrary, underwriting standards are set by GENERAL AMERICAN.
(4) Notwithstanding any other provision in this Agreement
to the contrary, any policies, certificates, booklets, termination notices, or
other written communications delivered by GENERAL AMERICAN to LIS for delivery
to annuitants and policyholders of GENERAL AMERICAN shall be delivered by LIS
promptly after receipt of instructions from GENERAL AMERICAN to do so.
(5) Notwithstanding any other provision in this Agreement
to the contrary, this Agreement must be retained as part of the official records
of both LIS and GENERAL AMERICAN for the duration of this Agreement and for five
(5) years thereafter.
(6) Notwithstanding any other provision in this Agreement
to the contrary, whenever a policy is issued to a trustee, a copy of the trust
agreement and any amendments to it must be furnished to GENERAL AMERICAN by LIS
and be retained as part of the official records of both LIS and GENERAL AMERICAN
for the duration of the policy and for five (5) years thereafter.
(7) Notwithstanding any other provision in this Agreement
to the contrary, with respect to any policies where LIS adjusts or settles
claims, the compensation to LIS with regard to the contracts or policies shall
in no way be contingent on claim experience, but may be based on premiums or
charges collected or number of claims paid or processed.
4B.05 Pursuant to N.R.S. 683A.0857 of the insurance Laws of the
State of Nevada, in the event any of the Services provided under this Agreement
are provided in NEVADA:
(1) Notwithstanding any other provision in this Agreement
to the contrary, LIS will retain records of GENERAL AMERICAN for a period of at
least five (5) years.
(2) Notwithstanding any other provision in this Agreement
to the contrary, LIS will hold in a fiduciary capacity all insurance charges or
premiums collected by it on behalf of or for GENERAL AMERICAN with respect to
insureds, and return premiums received from GENERAL AMERICAN. LIS shall comply
with all applicable fiduciary account statutes and regulations. LIS will
immediately (and in any event within fifteen days) remit such funds to the
person or persons entitled thereto, or shall promptly (and in any event within
fifteen days) deposit them in a fiduciary account established and maintained by
LIS in the name of GENERAL AMERICAN, which fiduciary account, with respect to
funds relating to Nevada policyholders, shall be deposited in an account located
at a financial institution located in Nevada. LIS shall require the bank in
which such fiduciary account is maintained to keep records clearly recording the
deposits in and withdrawals from such account on behalf of or for each insurer
for which LIS
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may collect charges or premiums. LIS shall promptly obtain and keep copies of
all such records and, upon request of GENERAL AMERICAN, furnish GENERAL AMERICAN
with copies of such records pertaining to deposits and withdrawals on behalf of
or for GENERAL AMERICAN. LIS may make withdrawals from such account for:
i. remittance to GENERAL AMERICAN when entitled
thereto;
ii. transfer to and deposit in a claims paying
account, with claims to be paid as provided in this Agreement; or
iii. remittance of return premiums to the person
or persons entitled thereto.
4B.06 Pursuant to Chapter IV of the Wyoming Insurance Regulations,
in the event any of the services provided under this Agreement are provided in
WYOMING:
(1) Notwithstanding any other provision in this Agreement
to the contrary, payments received by LIS for insurance on behalf of GENERAL
AMERICAN shall be deemed received by GENERAL AMERICAN.
(2) Notwithstanding any other provision in this Agreement
to the contrary, LIS may only use advertising pertaining to GENERAL AMERICAN
which has been approved in writing by GENERAL AMERICAN.
(3) Notwithstanding any other provision in this Agreement
to the contrary, underwriting standards are to be set by GENERAL AMERICAN.
(4). Notwithstanding any other provision in this Agreement
to the contrary, withdrawals from any bank account shall be made for the
following items: (i) remittance to GENERAL AMERICAN; (ii) deposit into account
for GENERAL AMERICAN; (iii) transfer to or deposit in claims paying account;
(iv) payment to a group policy; (v) payment to LIS for its commissions (if any);
and (vi) remittance of returned premiums to persons.
(5) Notwithstanding any other provision in this Agreement
to the contrary, LIS may only act in the capacity in which it is licensed.
(6) Notwithstanding any other provision in this Agreement
to the contrary, when LIS is used as an administrator, GENERAL AMERICAN shall
provide such information in writing to the insured.
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SECTION 5: COMPENSATION AND PAYMENT
5.01 TIME AND MATERIALS COMPENSATION.
a. With respect to those Services or any portion thereof that
are, under a particular Engagement Schedule, to be paid for on a time
and materials basis, GENERAL AMERICAN shall pay for the time spent by
LIS in performing such Services thereunder (including any billable
travel time) in accordance with LIS' established policies, charges and
rates in effect at the time the Services are rendered. LIS may change
its said policies, charges and rates by giving GENERAL AMERICAN not
less than thirty days' prior notice.
b. GENERAL AMERICAN agrees that, regarding such Services provided
on a time and materials basis, LIS' compensation shall be based on the
time spent providing Services and any Pass Through Expenses incurred.
LIS shall invoice GENERAL AMERICAN after every calendar month, for the
Services rendered and the Pass Through Expenses incurred during the
period just ended.
c. LIS may provide in a particular Engagement Schedule or
elsewhere an estimate of charges for the information technology
services covered by that Engagement Schedule, but no such estimate, or
any other estimate provided by LIS to GENERAL AMERICAN, whether written
or oral, shall be binding on LIS or convert such services otherwise to
be performed on a time and materials basis into a fixed price contract,
unless there is an express written agreement to that effect, signed by
Authorized Representatives of the Parties. If GENERAL AMERICAN fails to
compensate LIS for any necessary implementation services or fails to
allow LIS' completion of any necessary implementation services,
including without limitation any custom modifications or client set-up,
LIS reserves the right to terminate this Agreement.
d. With respect to any other Services or any portion thereof,
GENERAL AMERICAN shall pay LIS in accordance with LIS' then current
policies, charges and rates in effect at the time the Services are
rendered.
5.02 PAYMENT; INTEREST. Whether compensation is on a time and
materials basis or some type of fixed-price basis, LIS' invoices shall be due
and payable in full upon receipt, without withholding, deduction or offset of
any amounts for any purpose. Unless otherwise specified in the applicable
invoice, payments to LIS shall be made at the address to which notices to LIS
are to be sent (if more than one address has been specified for those notices,
the address for the main notice, rather than the address for copies of notices,
shall be used for this purpose). LIS may change the address to which payments
are to be sent by GENERAL AMERICAN at any time by giving GENERAL AMERICAN
written notice of such change. If any amount is not paid within thirty (30) days
after it becomes due, LIS reserves the right to charge GENERAL AMERICAN interest
on that past due amount for the period from its due date until it is paid in
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full. That interest, if imposed by LIS, shall be calculated at a rate equal to
one and one half percent (1.5%) per month (or the maximum rate permitted by
applicable law, if lower) and shall be payable on demand. (It is understood and
agreed by the parties that in the event LIS does not impose such late charges or
interest in one or more instances, it shall not be deemed to have waived the
right to impose such charges with respect to future instances of late payments.)
In. the event that GENERAL AMERICAN fails to pay when due, GENERAL AMERICAN
shall be liable for all resulting collection costs, including reasonable
attorney's fees.
5.03 EXPENSES. GENERAL AMERICAN shall reimburse LIS monthly for all
reasonable Pass Through Expenses (identified in the applicable Engagement
Schedule) incurred by LIS in the performance under an Engagement Schedule
executed pursuant to this Agreement.
5.04 TAXES. GENERAL AMERICAN shall pay to LIS all sales, use and
excise taxes (but not including any personal property taxes or taxes based on
LIS' net income) based on the provision by LIS of the Services which are found
to be applicable and that LIS is required under applicable law to collect. The
appropriate amount of tax shall be invoiced to and paid by GENERAL AMERICAN at
the same time and on the same conditions as set forth in Section 5.02. If
GENERAL AMERICAN disagrees with LIS' determination that any tax is due with
respect to the subject matter of this Agreement, and LIS is attempting to
invoice GENERAL AMERICAN for such tax as provided in this Section 5.04 then
GENERAL AMERICAN shall have the right to seek an administrative determination
from the applicable taxing authority, or alternatively, GENERAL AMERICAN shall
have the right to legally contest any asserted claim for taxes and, to the
extent allowed by law, withhold payment of such contested taxes. GENERAL
AMERICAN shall have the right to control any such administrative or legal
proceedings, and in connection therewith LIS shall (i) be consulted, and (ii)
cooperate with GENERAL AMERICAN and take any and all actions reasonably
requested by GENERAL AMERICAN (at GENERAL AMERICAN's expense). GENERAL AMERICAN
shall not be required to pay or otherwise be liable or responsible for, and LIS
hereby indemnifies, defends and holds GENERAL AMERICAN harmless against, any
penalty, additional tax, costs or interest that may be assessed or levied by any
taxing authority as a result of the failure of LIS to file any return, form, or
information statement that may be duly required from LIS by such taxing
authority or to pay any tax amounts collected from GENERAL AMERICAN pursuant to
this Section 5.04.
SECTION 6: BUSINESS DAYS
6.01 With respect to any Services provided under a particular
Engagement Schedule, a "business" day shall be deemed to be a day that is not a
weekend or holiday for LIS. LIS' holidays (for its St. Louis-based Outsourcing
Solutions Division) for the calendar year 2000 are as follows: New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the day after
Thanksgiving Day, and Christmas Day. Provided, however, LIS reserves the right
to change the holidays it observes from year to year, in its sole discretion.
Notwithstanding the foregoing, however, if the Services are related to variable
products, a "business" day shall be deemed to be any day defined as a business
day pursuant to the variable product prospectus.
PAGE 13
SECTION 7. TERM, EXPIRATION AND TERMINATION
7.01 INITIAL TERM. Each Engagement Schedule shall be effective upon
the Effective date and shall then remain in force and effect for that time
period (the "Initial Term") set forth the applicable Engagement Schedule
document. At the end of the Initial Term, the Engagement Schedule shall be
automatically renewed for successive one-year periods unless, at least sixty
(60) days prior to any renewal date, either Party notifies the other that the
Engagement Schedule shall not be automatically renewed. The Engagement Schedule
may terminate earlier provided in this Agreement or as the Parties may otherwise
agree in writing. It is further understood and agreed by the parties that the
termination of one Engagement Schedule shall not, less expressly agreed
otherwise in writing by the Parties, result in the termination of any other
Engagement Schedule executed pursuant to this Agreement.
7.02 TERMINATION FOR CAUSE. If a Party breaches any material
provision or requirement of any Engagement Schedule, the non-breaching Party may
terminate that Engagement Schedule provided the Party has given the breaching
Party not less than thirty (30) days' written notice of that breach, except that
such a termination shall not take effect if the each is capable of being cured
and the breaching Party cures that breach in all material respects before the
end of that thirty-day period. In addition, if GENERAL AMERICAN fails to pay
LIS' invoices as they become due, LIS may terminate the applicable Engagement
Schedule by giving GENERAL AMERICAN thirty (30) days' notice of that
termination, except that such a termination shall not take effect if GENERAL
AMERICAN pays all outstanding invoices and all secured interest before the end
of that thirty day period. The right to terminate an Engagement Schedule
described in this Section shall be in addition to any other remedies the
non-breaching party may have under the circumstances.
7.03 TERMINATION FOR BANKRUPTCY, ETC. A Party may terminate an
Engagement Schedule immediately by giving notice to the other Party if that
other Party makes an assignment for the benefit of creditors, dissolves or
liquidates or files a voluntary petition in bankruptcy or a similar proceeding;
if an involuntary petition in bankruptcy or a similar proceeding is filed
against that other Party and is not stayed or dismissed within thirty (30) days;
if a receiver is appointed for all or substantially all of that other Party's
assets; or if execution is made on all or substantially all of that other
Party's assets.
7.04 STEPS UPON TERMINATION, EXPIRATION. Upon or within ten
business days after the effective date of termination or expiration, LIS shall,
upon request by GENERAL AMERICAN, inform GENERAL AMERICAN of the extent to which
LIS' Services have been performed through such date. Unless the Parties agree
otherwise in writing, then within ten business days after the expiration or
termination of the term of a particular Engagement Schedule, each Party shall
return to the other all Private Information and any other proprietary or
confidential information of the other Party, and, upon request, the Party
returning such information shall notify in writing that all such information has
been returned. In addition, upon termination, LIS
PAGE 14
shall, on a time and materials basis, provide reasonable assistance to
GENERAL AMERICAN related to the conversion of the services.
7.05 EFFECT OF TERMINATION, EXPIRATION.
a. If one or more of the Engagement Schedules executed pursuant
to this Agreement expires or is terminated, but one or more Engagement Schedules
remain in effect and are not also terminated, then this Agreement shall remain
in effect with respect to each of those Engagement Schedules until that
particular Engagement Schedule expires or is itself terminated or performance
under that particular Engagement Schedule is otherwise completed.
b. In the event of the expiration of an Engagement Schedule or
the termination thereof, whether due to the default by LIS or GENERAL AMERICAN,
in any such event, the terms of:
1) this Section 7 (Effect of Termination, Expiration) and of
Sections 5 (Compensation. and Payment), 9 (Ownership Of Proprietary
Methodologies, Right To Use Concepts), 10 (Confidentiality), and 13 (Limitation
of Liability, Etc.), and
2) Sections 11 (Representations and Warranties), 12 (GENERAL
AMERICAN Representations and Warranties), 14 (Indemnification), 16
(Non-Solicitation), 19 (Arbitration), and 21 (Miscellaneous), below, and
3) any other provisions (whether in this Agreement or the
applicable Engagement Schedule) regarding confidentiality or
non-disclosure of LIS or GENERAL AMERICAN proprietary
information, or regarding the payment obligation(s) of GENERAL
AMERICAN for Services performed by LIS,
shall survive and continue in effect following any expiration or termination of
this Agreement and any Engagement Schedule.
SECTION 8. LIS' USE OF GENERAL AMERICAN'S MATERIALS
8.01 Unless expressly agreed in writing, no license or right is
granted under this Agreement or any Engagement Schedule to LIS to use, execute,
reproduce, display, perform, distribute externally, sell copies of any GENERAL
AMERICAN Materials (defined in Section 2 [Definitions], above), except that LIS
may exercise the foregoing rights of use, execution, and reproduction within its
own organization solely for the purpose of rendering performance as required by
an Engagement Schedule. Upon completion of such performance, all GENERAL
AMERICAN Materials (excluding any adaptations thereof) shall be returned in
their entirety to GENERAL AMERICAN unless included in a category of material
that is exempted from return or destruction under Section 10.4 (Disposition of
Private Information) below. The terms of this Section do not, however, affect
the obligations of the Parties under Section 10 (Confidentiality) below.
PAGE 15
SECTION 9. OWNERSHIP OF PROPRIETARY METHODOLOGIES, RIGHT TO.
USE CONCEPTS.
9.01 GENERAL AMERICAN acknowledges that LIS, in the normal conduct
of its business, may use concepts or modifications of concepts developed while
serving other customers. GENERAL AMERICAN acknowledges the benefit which may
accrue from this practice to GENERAL AMERICAN, and GENERAL AMERICAN expressly
and irrevocably permits LIS to continue in perpetuity, and without payment of a
royalty, this practice of using concepts developed while serving GENERAL
AMERICAN and modifications of such concepts. The terms of this Section do not,
however, affect the obligations of the Parties under Section 10
(Confidentiality) below. GENERAL AMERICAN further acknowledges and agrees that
LIS has proprietary methodologies, techniques and tools which are valuable
assets of LIS and which (together with all enhancements and modifications) shall
remain the sole and exclusive property of LIS. Nothing in this Agreement or in
any Engagement Schedule shall grant to or confer upon GENERAL AMERICAN expressly
or by implication any rights or license to such methodologies, techniques or
tools.
SECTION 10. CONFIDENTIALITY
10.01 CONFIDENTIALITY GENERALLY. Each Party (for this purpose, the
"RECEIVING PARTY") shall, and shall cause its personnel to, hold and deal with
the following in strict confidence: (a) information relating to the business of
the other Party (for this purpose, the "DISCLOSING PARTY") if that information
is clearly designated as private; (b) any unannounced product(s) or Service(s)
of the Disclosing Party; (c) the terms, conditions and subject matter of the
Engagement Schedules; (d) all information and reports that may be generated by
the Disclosing Party pursuant to any Engagement Schedule; (e) interim reports
and work product that may be generated by the Disclosing Party in connection
with the Engagement Schedules; (f) all Deliverables; (g) proprietary
methodologies, techniques and tools of the Disclosing Party; (h) any
information, which by its nature should be treated as private; and (i) any other
information of Materials that are designated as "private". All of these items
constitute "PRIVATE INFORMATION" unless excluded by Section 10.02 (Exclusions
from Private Information) below.
10.02 EXCLUSIONS FROM PRIVATE INFORMATION. Despite the terms of
Section 10.1 (Confidentiality Generally) above, Private Information does not
include information that is
(a) approved for release or disclosure without
restriction by the Disclosing Party's Authorized
Representative in writing;
(b) publicly known or becomes publicly known, so long as
it is not through the acts or omissions of the
Receiving Party (or someone under the Receiving
Party's control) that it is or becomes publicly
known;
(c) rightfully received by the Receiving Party from a
third party without restriction and without violation
of any agreement;
(d) independently developed by the Receiving Party
without reference to the Disclosing Party's Private
Information; or
PAGE 16
(e) legally required to be disclosed by the Receiving
Party under a requirement of a governmental agency or
court of law having jurisdiction, but only if (1) the
Receiving Party provides the Disclosing Party with
prompt notice prior to disclosure so that the
Disclosing Party may seek judicial protection and (2)
the Receiving Party discloses only that information
which, in the reasonable opinion of its counsel, is
required to be disclosed.
10.03 DUTIES WITH RESPECT TO PRIVATE INFORMATION. The Receiving
Party shall protect the Disclosing Party's Private Information that is in the
Receiving Party's possession or control using at least the same means it uses to
protect its own Private Information, but in any event not less than reasonable
means.
10.04 DISPOSITION OF PRIVATE INFORMATION. Upon the termination of a
particular Engagement Schedule, the Receiving Party shall, unless that
Engagement Schedule allows otherwise,
(a) return to the Disclosing Party all Private
Information received from the Disclosing Party and
any copies of that Private Information (or if the
Disclosing Party so requests, shall destroy that
Private Information and any such copies and shall
certify to the Disclosing Party that it has done so)
and
(b) destroy any notes or other materials prepared by the
Receiving Party (or prepared on its behalf) which
contain Private Information received from the
Disclosing Party.
However, this requirement shall not require the return or destruction of (1) any
Engagement Schedule, or drafts or copies of Engagement Schedules; (2) Materials
which are contemplated to be owned by LIS and regarding which GENERAL AMERICAN
was to receive a license or comparable interest; (3) copies of the Deliverables
as delivered to GENERAL AMERICAN; (4) accounting, financial and corporate
records; (5) LIS' work-papers or (6) other materials which are required to be
retained for audit, regulatory or legal reasons.
SECTION 11. REPRESENTATIONS AND WARRANTIES
11.01 REPRESENTATIONS AND WARRANTIES - GENERAL. LIS represents and
warrants to GENERAL AMERICAN that:
a. LIS is a corporation duly organized and existing and in good
standing under the laws of the State of South Carolina.
b. LIS is empowered under the applicable laws and regulations and
by its charter and bylaws to enter into and perform the Services under
a particular Engagement Schedule.
PAGE 17
c. All requisite corporate proceedings have been taken to
authorize LIS (or its corporate affiliate) to enter into and perform
the Services and other obligations provided for in any Engagement
Schedule (including this Agreement) it may execute.
d. It has and will continue to comply with all laws and it has
and will continue to make all required filings with regulatory agencies
in connection with the offer, sale, or administration of policies or
other interests in the insurance products and the policies.
11.02 REPRESENTATIONS AND WARRANTIES ON SERVICES AND - LIS-CREATED
MATERIALS.
(a) SERVICES ENGAGEMENT SCHEDULE. LIS represents and
warrants that LIS personnel shall perform the Services
pursuant to the reasonable instructions of GENERAL AMERICAN,
which shall be solely responsible for providing instructions
to LIS personnel. In the event of a breach of the foregoing
warranty, LIS shall perform again the Services in respect of
which the foregoing has been breached to bring them into
compliance with that warranty. Any claim for breach of the
foregoing warranty must be made by written notice to LIS
within twenty one days after the performance of the Services
in respect of which the claim is made or said claim shall be
waived.
(b) YEAR 2000 COMPLIANCE. LIS warrants that, as of the
date of first providing such Services, any LIS-Created
Materials used in providing LIS' Services shall be Year 2000
Compliant, as defined below. LIS further warrants that, where
it performs Services to integrate or implement GENERAL
AMERICAN Materials or Third-Party Materials, LIS shall not
cause such Materials which are Year 2000 Compliant to cease to
be Year 2000 Compliant. For the purposes of this Section
11.02, the term "YEAR 2000 COMPLIANT" shall mean that, to the
extent applicable with respect to the Services being rendered
by LIS, the appropriateness of the processing of dates will
not be adversely affected by those dates being in or after the
Year 2000. Notwithstanding the foregoing, GENERAL AMERICAN
acknowledges and agrees that LIS is not responsible for and
does not warrant that any GENERAL AMERICAN Materials or the
Materials of third parties are Year 2000 Compliant, including
where LIS integrates or implements such Materials as part of
providing Services. GENERAL AMERICAN further acknowledges and
agrees that, except as expressly otherwise agreed in writing,
LIS is not responsible and shall not be liable for the
interaction between LIS-owned software and other elements of
GENERAL AMERICAN'S environment. (For purposes of any
Engagement Schedule executed pursuant to this Agreement, any
software owned by an affiliate of LIS shall be deemed "LIS
owned software".) Without limiting the foregoing, GENERAL
AMERICAN recognizes that environmental factors, including
system software, the operating system and hardware, and the
inability to control certain occurrences on the World Wide
Web, may affect the Services regarding Year 2000 compliance,
and GENERAL AMERICAN acknowledges and agrees that LIS has no
obligation to address these factors.
11.03 OTHER REPRESENTATIONS AND WARRANTIES DISCLAIMED.
EXCEPT AS PROVIDED IN THIS SECTION 11 (REPRESENTATIONS AND WARRANTIES), ALL
WARRANTIES, CONDITIONS, REPRESENTATIONS AND GUARANTEES,
PAGE 18
WHETHER EXPRESS OR IMPLIED, WHETHER ARISING BY LAW, CUSTOM, ORAL, OR WRITTEN
STATEMENTS OF LIS, ITS AGENTS OR SUBCONTRACTORS OR OTHERWISE (INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE)
ARE HEREBY SUPERSEDED, EXCLUDED AND DISCLAIMED. WITHOUT LIMITING THE FOREGOING,
LIS EXPRESSLY DISCLAIMS ANY WARRANTY OR LIABILITY WITH RESPECT TO DESIGN OR
LATENT DEFECTS OR WITH RESPECT TO THE YEAR 2000. GENERAL AMERICAN recognizes and
agrees that the terms of this Section 11 (Representations and Warranties) are an
integral part of LIS' pricing and an important factor in LIS' willingness to
enter into the Engagement Schedules and to agree to perform Services under them.
SECTION 12 GENERAL AMERICAN REPRESENTATIONS AND WARRANTIES
GENERAL AMERICAN represents and warrants to LIS as follows:
12.01 It is a corporation duly organized and existing and in good
standing under the laws of the State of Missouri.
12.02 It is empowered under the applicable laws and regulations and
by its charter and bylaws to enter into and perform this Agreement and any
Engagement Schedule it may execute.
12.03 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement and any Engagement
Schedule it may execute.
12.04 All of the policies and other forms provided by GENERAL
AMERICAN shall have been approved by all required regulatory agencies and shall
be in compliance with all federal, state, and local laws and regulations.
12.05 It has and will continue to comply with all laws and it has
and will continue to make all required filings with regulatory agencies in
connection with the offer, sale, or administration of policies or other
interests in the insurance products and the policies.
SECTION 13. LIMITATION OF LIABILITY, ETC.
13.01. EXCLUSION OF CONSEQUENTIAL DAMAGES, LIMITATION ON LIABILITY,
ETC.
IN NO EVENT SHALL LIS OR ITS SUBCONTRACTORS, EMPLOYEES, REPRESENTATIVES OR
SUBSIDIARIES BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, PUNITIVE, INCIDENTAL OR
SPECIAL DAMAGES, WHETHER FORESEEABLE OR UNFORESEEABLE (AND WHETHER OR NOT LIS OR
ANYONE ELSE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES), WHETHER
PAGE 19
BASED UPON LOST GOODWILL, LOST PROFITS, LOSS OF USE OF MONEY, LOSS OF DATA OR
INTERRUPTION IN lTS USE OR AVAILABILITY, STOPPAGE OF WORK, IMPAIRMENT OF ASSETS
OR OTHERWISE ARISING OUT OF BREACH OF ANY EXPRESS OR IMPLIED WARRANTY, BREACH OF
CONTRACT, NEGLIGENCE, MISREPRESENTATION, STRICT LIABILITY IN TORT OR OTHERWISE,
AND WHETHER BASED ON ANY TERM IN ANY ENGAGEMENT SCHEDULE, ANY TRANSACTION
PERFORMED OR UNDERTAKEN UNDER OR IN CONNECTION WITH ANY ENGAGEMENT SCHEDULE OR
OTHERWISE LIS' AND ITS SUBCONTRACTORS', EMPLOYEES', REPRESENTATIVES' AND
SUBSIDIARIES' AGGREGATE LIABILITY FOR DAMAGES, REGARDLESS OF THE FORM OF ACTION,
SHALL IN NO EVENT EXCEED AN AMOUNT EQUAL TO TEN PERCENT (10%) OF THE TOTAL
AMOUNTS ACTUALLY PAID BY GENERAL AMERICAN TO LIS UNDER THE RELEVANT ENGAGEMENT
SCHEDULE IN ADMINISTRATIVE SERVICE FEES (AS SPECIFIED IN THE ENGAGEMENT
SCHEDULE), DURING THE TWELVE MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO THE
CLAIM OF DAMAGES.
13.02 LIMITATION GENERALLY. GENERAL AMERICAN recognizes and agrees
that the terms of this Section 13 (Limitation of Liability, Etc.) are an
integral part of LIS' pricing and an important factor in LIS' willingness to
enter into the Engagement Schedules and to agree to perform Services under them.
SECTION 14. INDEMNIFICATION
14.01 GENERAL AMERICAN INDEMNIFICATION. LIS shall not be responsible
for, and GENERAL AMERICAN shall indemnify and hold LIS harmless from and
against, any and all costs, expenses, losses, damages, charges, counsel fees,
payments and liability, which may be asserted against LIS or for which it may be
held to be liable, arising out of or attributable to:
a) Any actions taken by LIS in good faith and with due diligence
in compliance with the terms of the applicable Engagement Schedule;
b) GENERAL AMERICAN's refusal or failure to comply with the terms
of the applicable Engagement Schedule, or which arise out of GENERAL
AMERICAN's negligence or misconduct or which arise out of the breach of
any representation or warranty of GENERAL AMERICAN contained in this
Master Services Agreement or the applicable Engagement Schedule;
c) Reliance on or use of by LIS in accordance with the terms of
the applicable Engagement Schedule information and materials provided
by or at the direction of GENERAL AMERICAN and instructions or
directions given by authorized representatives of GENERAL AMERICAN;
d) The offer, sale, or administration of policies or other
interests in the insurance products and the policies by GENERAL
AMERICAN.
PAGE 20
14.02 LIS INDEMNIFICATION GENERAL AMERICAN shall not be responsible
for, and LIS shall indemnify and hold GENERAL AMERICAN harmless from and
against, any and all costs, expenses, losses, damages, charges, counsel fees,
payments, and liability, which may be asserted against GENERAL AMERICAN or for
which it may be held to be liable, arising out of or attributable to:
a) Any actions taken by GENERAL AMERICAN in good faith and with
due diligence in compliance with the terms of this Master
Services Agreement and the applicable Engagement Schedule.
b) LIS's refusal or failure to comply with the terms of the
applicable Engagement Schedule, or which arise out of LIS's
negligence or misconduct or which arise out of the breach of
any representation or warranty of LIS contained in this Master
Services Agreement or the applicable Engagement Schedule.
SECTION 15. INDEPENDENT CONTRACTOR, WORKER'S COMPENSATION, SUBCONTRACTORS,
ETC.
15.01 GENERALLY. Each of GENERAL AMERICAN and LIS is and shall
remain an independent contractor with respect to all performance rendered under
the Engagement Schedules. Neither LIS nor its employees shall be considered an
employee or agent of GENERAL AMERICAN for any purpose. Neither Party shall have
the authority to bind or make commitments on behalf of the other Party for any
purpose, and neither shall hold itself out as having such authority. LIS shall
have sole responsibility for the supervision, daily direction and control
(except in the case of a Staffing Engagement Schedule, where such direction is
GENERAL AMERICAN's responsibility), payment of salary (including withholding of
income taxes and social security), worker's compensation, disability benefits
and the like of LIS personnel.
15.02 SUBCONTRACTING. LIS may, at its option, subcontract work under
Engagement Schedules, but LIS' subcontracting work shall not affect its
responsibilities under the Engagement Schedules. Moreover, unless the Engagement
Schedules specify otherwise, LIS shall be as responsible for work done by its
subcontractors within the scope of the Engagement Schedules as it is for work
done by its own employees.
SECTION 16. NON-SOLICITATION
16.01 Except as otherwise mutually agreed by the parties in writing,
GENERAL AMERICAN shall not, and shall not permit any affiliated entity to,
directly or indirectly, employ or offer employment to (or utilize as an
independent contractor) any individual while he or she is a Covered Individual.
During the period that an LIS employee performs Services under an Engagement
Schedule or supervises someone who does so, and for a period of twelve months
afterwards, that LIS employee is a "COVERED INDIVIDUAL" for purposes of this
Section 16
PAGE 21
(regardless of whether he or she remains an employee of LIS during that period).
Except as otherwise mutually agreed by the parties in writing, LIS shall not,
during the term of an Engagement Schedule or in the period of twelve (12) months
afterwards, employ or offer employment to any individual who was employed by
GENERAL AMERICAN and of whom LIS became aware in connection with its performance
of Services in connection with that Engagement Schedule.
SECTION 17. NOTICES
17.01 Any notices required or permitted under the Engagement
Schedules shall be in writing and deemed given as indicated when delivered
(unless the applicable Engagement Schedule requires otherwise) by any of the
following methods: within three business days after being sent certified U.S.
mail, return receipt requested, postage prepaid; upon receipt when sent by hand
delivery; or within one business day after being sent by reputable overnight
courier, charges prepaid. Notices shall be sent to the following addresses and
to the attention of the following individuals (or to such other addresses or to
the attention of such other individuals as a Party may specify in such a notice
to the other Party):
In the case of LIS:
Liberty Insurance Services Corporation
c/o Genelco Outsourcing Solutions Division
0000 Xxxxxxxx Xxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
with a required copy to:
Liberty Insurance Services Corporation
0000 Xxxx Xxxxxxx Xxxx.
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
In the case of GENERAL AMERICAN:
General American Life Insurance Company
0000 Xxxxxxxx Xxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Vice President
with a required copy to
General American Life Insurance Company
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Law Division
PAGE 22
SECTION 18: DELIVERABLES
18.01 GENERAL. It is the expectation of the parties that much of the
Services provided by LIS pursuant to a particular Engagement Schedule(s)
executed by the Parties will not consist of or contemplate the delivery to
GENERAL AMERICAN of a Deliverable. (For purposes of this Agreement, the term
"DELIVERABLE" shall mean Materials procured or prepared by LIS and required to
be delivered to GENERAL AMERICAN by virtue of their description or specification
as a Deliverable in an Engagement Schedule.) However, with respect to any
Deliverables that are to be delivered to GENERAL AMERICAN under a particular
Engagement Schedule, LIS shall furnish to GENERAL AMERICAN the said Deliverables
described in the applicable Engagement Schedule in accordance with the terms and
conditions of that Engagement Schedule in all material respects.
18.02 WORK SUBJECT TO LIS OWNERSHIP. Unless otherwise expressly
provided in the relevant Engagement Schedule, GENERAL AMERICAN shall only have a
non-exclusive license in any LIS-Created Deliverables, and all U.S. copyrights
in those LIS-Created Deliverables, and all LIS-Created Deliverables shall remain
with and be owned by LIS.
SECTION 19 ARBITRATION
19.01 Any dispute arising under an Engagement Schedule shall, except
as expressly provided otherwise in this Section 19, be submitted to binding
arbitration, at a site chosen by the arbitrators, under the rules then
prevailing of the American Arbitration Association, and judgment upon the award
rendered may be entered and enforced in any court of competent jurisdiction. LIS
and GENERAL AMERICAN, before entering into arbitration, shall each appoint an
arbitrator, and these two arbitrators shall select a third arbitrator to be a
member of the panel. Should the two arbitrators not be able to agree on a choice
of the third, then the American Arbitration Association shall make the
appointment of a person who is neutral to the parties in controversy. None of
the arbitrators shall be officers or employees of the parties to this Agreement.
Each arbitrator shall be a recognized expert in the administrative services and
the information technology field. Notwithstanding the foregoing provisions
neither Party shall be precluded from applying to a court of competent
jurisdiction for a temporary restraining order, a preliminary injunction or
other equitable relief to preserve the status quo or prevent irreparable harm
pending the issuance of a ruling by the panel of arbitrators.
19.02 The written decision of the majority of the three arbitrators
shall be binding on both LIS and GENERAL AMERICAN. Except as otherwise provided
in Section 21.13 (Attorney's Fees), below (regarding attorney's fees), all costs
of arbitration, including fees per arbitrator, shall be borne equally by the
parties. The resulting arbitration award may be enforced by all lawful remedies,
including without limitation, injunctive or other equitable relief in any court
of competent jurisdiction.
PAGE 23
SECTION 20 SPECIAL COVENANTS
20.01 LIS shall establish and maintain facilities and procedures for
the safekeeping of policy forms, check forms and facsimile signature imprinting
devices, if any, and all other documents, reports, records, books, files, and
other materials relative to this Agreement.
20.02 GENERAL AMERICAN shall have full and free access, during
ordinary business hours, to all documents, records, reports, books, files, and
other materials relative to this Agreement and maintained by LIS or by a third
party to whom LIS has subcontracted for the performance of functions under this
Agreement. LIS shall also allow such access to the Missouri Commissioner of
Insurance and the Securities and Exchange Commission (or any other state or
federal regulatory authority) for the purpose of examination, audit and
inspection.
20.03 It is expressly understood and agreed that all documents,
reports, records, books, files and other materials relative to this Agreement
shall be the sole property of GENERAL AMERICAN and that such property shall be
held by LIS, as agent, during the effective terms of this Agreement.
20.04 LIS shall maintain backup computer tape files on a daily basis
stored in a secure fireproof, flood proof, off-premises location. The purpose of
back up and recovery procedures is to permit file recovery in the event of
destruction of normal processing files. GENERAL AMERICAN may review the
procedures in effect and inspect the storage facility upon demand.
20.05 GENERAL AMERICAN shall, upon request from time to time,
provide LIS with current forms of policies, applications, names and states of
license of all insurance and/or broker-dealer agents and representatives
authorized to sell GENERAL AMERICAN's Policies.
SECTION 21 MISCELLANEOUS
21.01 INSURANCE. While it is performing Services under an Engagement
Schedule, LIS shall, maintain comprehensive general liability insurance for
claims for damages because of bodily injury (inclusive of death) and property
damages caused by, or arising out of, acts or omissions of its employees in an
amount equal to or greater than two million dollars ($2,000,000.00). A
certificate of that insurance shall be furnished to GENERAL AMERICAN promptly
after GENERAL AMERICAN's written request at any time while LIS is performing
Services under this Agreement. Notwithstanding the foregoing provisions, the
insurance described above shall not be canceled, or allowed to expire without
renewal on similarly conforming terms, during the period while LIS is performing
Services under this Agreement without prior written notice to GENERAL AMERICAN
by LIS or LIS' insurer(s) or insurance broker(s).
21.02 FORCE MAJEURE. Neither Party shall be liable for failure to
fulfill its obligations under the Engagement Schedules (other than a failure to
pay money), if that failure is caused, directly or indirectly, by flood,
communications failure, extreme weather, fire, mud slide, earthquake, or other
natural calamity, interruption in water, electricity, heating or air
conditioning
PAGE 24
(depending on the season), riots, civil disorders, rebellions or revolutions,
acts of governmental agencies quarantines, embargoes, malicious acts of third
parties, labor disputes affecting vendors or authorized subcontractors and for
which the Party claiming force majeure is not responsible, or similar causes
beyond the control of that Party. If such force majeure prevents or
substantially disrupts performance, the Parties shall negotiate in good faith
any appropriate changes in the price of the affected Services or other
appropriate changes in the terms of the affected Engagement Schedules.
21.03 CERTAIN REMEDIES. The Parties acknowledge that the breach of
Section 10 (Confidentiality) or 16 (Non-Solicitation) above may give rise to
irreparable injury to the non-breaching Party inadequately compensable in
damages. Accordingly, the Parties agree that injunctive relief may be sought as
an appropriate remedy to prevent violation of the Parties' respective rights
and/or obligations under those two sections. However, nothing in this section
shall limit a Party's right to any other remedies in equity or at law,
including, the recovery of damages.
21.04 LIS' RECORDS. LIS shall maintain materially complete and
accurate accounting records to support and document all expenses that are
payable by GENERAL AMERICAN and all other charges for which compensation is to
be made on a time-and-materials basis, as well as records documenting the
authorship of LIS-Created Deliverables. LIS shall retain those records for a
period of at least one year after work has concluded under the Engagement
Schedule to which those expenses or charges relate or those LIS-Created
Deliverables were delivered.
21.05 AUDIT BY GENERAL AMERICAN. GENERAL AMERICAN (or an accounting
organization retained by GENERAL AMERICAN, provided said organization is not, or
is not affiliated with, a direct competitor of LIS) shall have access to the
said records of LIS, upon reasonable prior written notice (which such notice
shall be no less than thirty days prior to the commencement of such audit), for
purposes of audit (an "GENERAL AMERICAN audit") subject to the other terms and
conditions set forth below. It is understood and agreed that:
a. any such GENERAL AMERICAN Audit shall be conducted during LIS'
regular business hours;
b. GENERAL AMERICAN must have a reasonable basis for conducting
the audit;
c. in the absence of substantial willful misconduct on the part
of LIS, in no event may such GENERAL AMERICAN Audit be conducted during
the month of January, during a time that would substantially disrupt
business, or other times during the calendar year that are
traditionally busy for LIS; and
d. in the absence of substantial willful misconduct on the part
of LIS, in no event may an GENERAL AMERICAN Audit be conducted more
often than once each calendar year.
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In the absence of findings in the audit that LIS has committed substantial acts
of willful misconduct, then LIS shall be reimbursed on a time and materials
basis, for any time spent by its personnel gathering materials requested by the
auditor(s) or otherwise assisting or attending to the audit if such audit is
conducted more frequently than once per year.
21.06 NO EXCLUSIVITY. Nothing in any Engagement Schedule shall be
construed as prohibiting or restricting LIS from independently developing or
acquiring materials and/or programs which are competitive with those products or
Materials of GENERAL AMERICAN to which LIS may have access in providing
Services, provided that the confidentiality undertakings of LIS set forth in
Section 10 are respected and General American Materials are not misused.
21.07 GOVERNING LAW; VENUE. The Engagement Schedules shall be
governed by and construed in all respects in accordance with the laws of the
State of Missouri without regard to principles of conflicts of laws. The Parties
agree, with respect to those suits permitted to be brought hereunder, to the
exclusive jurisdiction of the federal and state courts located in St. Louis
County, in the State of Missouri, for any and all disputes arising under the
Engagement Schedules, to the exclusion of all other federal and state courts.
21.08 HANDLING INCONSISTENCIES BETWEEN THIS AGREEMENT AND ENGAGEMENT
SCHEDULE. If there is an inconsistency between the terms of this Agreement and
the terms of an Engagement Schedule, the terms of that Engagement Schedule
control over the terms of this Agreement and its attachments (other than that
Engagement Schedule).
21.9 SEVERABILITY. Each Engagement Schedule is intended to
constitute an independent and distinct agreement of the Parties, even though
each of them shall be construed to incorporate all applicable provisions of this
Agreement. If any provision of any Engagement Schedule is held by a court of
competent jurisdiction to be unenforceable or contrary to law, it shall be
modified where practicable to the extent necessary so as to be enforceable
(giving effect to the intention of the parties) and the remaining provisions of
that Engagement Schedule and all other Engagement Schedules shall not be
affected.
21.10 CLOSURE. No actions, regardless of form, arising out of or in
connection with the transactions covered by any Engagement Schedule may be
brought by either Party more than one year after the cause of action has
accrued, except that if an Engagement Schedule specifies a shorter period, that
shorter period shall apply.
21.11 WAIVERS, ETC. No waiver of any of the provisions of the
Engagement Schedules shall be effective unless it is made in a writing which
refers to the provisions so waived and which is executed by an Authorized
Representative of the Party waiving its rights. No course of dealing and no
delay or failure of a Party in exercising any right under any Engagement
Schedule shall affect any other or future exercise of that right or any exercise
of any other right. A Party shall not be precluded from exercising a right by
its having partially exercised that right or its having previously abandoned or
discontinued steps to enforce that right.
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21.12 ATTORNEY'S FEES. If, either party to any Engagement Schedule
is required to engage in any proceedings, legal or otherwise to enforce its
rights under the said Schedule, the prevailing party shall be entitled to
recover from the other, in addition to any other sums due, the reasonable
attorney's fees, costs and necessary disbursements involved in said proceedings.
21.13 COMPLETE AGREEMENT. The provisions of the Engagement
Schedules, as in effect from time to time by their terms, constitute the entire
agreement between the Parties relating to their subject matter and supersede all
prior agreements, oral or written, and all other communications relating to that
subject matter.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized officers
as of the day and year first above written.
GENERAL AMERICAN LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Duly Authorized Officer
Print Officer's Name: Xxxxxxx X. Xxxxxx
Officer's Title: Senior Vice President
Date: 11/23/01
LIBERTY INSURANCE SERVICES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Duly Authorized Officer
Print Officer's Name: Xxxxxx X. Xxxxxxx
Officer's Title: President
Date: 1/19/01
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