EXHIBIT 10.58
AGREEMENT FOR THE TRANSFER
OF CLAIM PROCESSING SERVICES
THIS AGREEMENT FOR THE TRANSFER OF CLAIM PROCESSING
SERVICES ("Agreement") is effective the 1st day of December,
1997, between Citizens Security Mutual Insurance Company,
Citizens Fund Insurance Company, Insurance Company of Ohio
(collectively, "Citizens Security Companies") and Virtual
Insurance Solutions Network, Inc. ("Visn").
WHEREAS, on or about July 31, 1996 Citizens Security
Companies and Visn entered into a Claims Administration
Agreement ("Claims Agreement"), which agreement had a term
of three years from its Commencement Date as defined
therein; and
WHEREAS, the parties to the Claims Agreement have
agreed to terminate said agreement effective December 1,
1997; and
WHEREAS, the parties wish to provide for the orderly
transfer of claim processing services from Visn to Citizens
Security Companies and resolve matters between them relating
to the Claims Agreement.
NOW, THEREFORE, in consideration of the foregoing, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
agree as follows.
1. Termination of Claims Agreement. The claims
Agreement between the parties is terminated as of the
effective date of this Agreement. Notwithstanding, the
indemnification provisions of sections 8.1 and 8.2 of the
Claims Agreement shall remain in effect.
2. Term of Agreement. This Agreement shall be for a
term of five months, beginning December 1, 1997 and ending
April 30, 1998.
3. Services to be Performed by Visn.
3.1 From the effective date of this Agreement
through February 28, 1998, Visn shall assist with the
orderly and professional transfer to Citizens Security
Companies of the claim processing services provided
pursuant to the Claims Agreement. The assistance to be
rendered by Visn shall include fair and reasonable
systems support from the same general group of
individuals who provided claim processing services
pursuant to the Claims Agreement.
3.2 Visn agrees to obtain the approval of Citzens
Security Companies before (a) setting reserves; (b)
changing reserves; or (c) making any indemnity payment,
if such action involves funds in the amount of Fifteen
Thousand and no/100ths Dollars ($15,000) or more. Visn
shall forward to Citizens Security Companies all
correspondence, mail and other information that relate
to matters to be handled by Citizens Security Companies
after the term of this Agreement.
3.3 The services referenced in paragraphs 3.1 and
3.2 above shall be provided at the locations and during
the times that such services were routinely rendered
pursuant to the Claims Agreement.
3.4 The parties recognize and acknowledge that Visn
has assigned certain rights and obligations pursuant to
the Claims Agreement to Claim Solutions, Inc., and that
the employees of Claims Solutions, Inc. will provide
the services referenced in this section 3.
3.5 The obligations of Visn pursuant to this
section 3 shall cease as of February 28, 1998.
4. Services to be Performed by Citizens Security
Companies.
4.1 Citizens Security Companies shall timely
respond to any request made by Visn pursuant to
paragraph 3.2 above.
4.2 Citizens Security Companies shall participate
in the transfer contemplated hereunder by providing on-
site assistance in Red Wing, Minnesota. Citizen
Security Companies may have at least one individual,
and up to two individuals if it so desires, on-site two
days each week during the term of this Agreement. It
is contemplated that the following individuals will be
providing the assistance referenced: Xx. Xxxx Xxx, Xx.
Xxxx Xxxx, Xx. Xxxx Xxxxxx, and Xx. Xxxx Xxxxxx.
Citizens Security Companies will provide a schedule
that details (a) the dates on which it will provide on-
site assistance and (b) its anticipated schedule for
the transfer of claim processing services.
5. Compensation.
5.1 During the term of this Agreement, Citizens
Security Companies shall pay to Visn a monthly fee of
Two Hundred Thirty Thousand Dollars and no/100ths
($230,000). Said fee shall be paid on the first day of
each month, with the fee for the first month being paid
in full by December 19, 1997. The last monthly payment
owed to Visn under this contract shall be paid by April
1, 1998.
5.2 Compensation for salvage and subrogation
services shall remain a monthly fee of fifteen percent
(15%) of Net Recoverables. "Net Recoverables" shall
mean funds obtained in the preceeding month as a result
of the salvage and subrogation efforts of Visn (or its
assignee), less collection expenses and administrative
fees incurred by Visn (or its assignee), less any
deductible recoveries made and issued to policyholders.
6. Notice; Off-Site Services; Travel. Citizens
Security Companies shall provide Visn with twenty-four (24)
hours notice of any site visit. In the event Citizens
Security Companies desires that the services agreed to
herein be provided at a location other than the locations at
which such services were routinely rendered pursuant to the
Claims Agreement, Citizens Security Companies shall pay a fee
of One Thousand Dollars and no/100ths ($1,000) per day for each
person providing services off-site. Citizens Security Companies
shall pay all travel and out-of-pocket expenses incurred in
providing the services off-site. Visn shall be available, upon
three (3) calendar days notice, to provide off-site services.
7. Termination of Sublease. With regard to the office
space that Visn has subleased from Citizens Security
Companies, Visn has given notice of its intent to terminate
the parties' Sublease Agreement effective December 1, 1998.
The parties agree that the rent and all other payments owed
pursuant to the Sublease Agreement, including utilities, will be
proportionately abated commencing March 1, 1998, through
December 1, 1998. Said abatement shall be the pro rata
square footage of the lease vacated by Visn's removal of
personnel and functions related to the performance of
services provided under the Claims Agreement. During the
transfer of services contemplated hereunder, all file
cabinets and other equipment owned by Citizens Security Companies
and used by Visn in providing claim processing services will be
returned to Citizens Security Companies.
8. Cooperation; Futher Assurances.
8.1 The parties agree to be at all times positive
and mutually supportive of each other. The parties agree to use
their best efforts to complete the transfer of the
claim processing services within ninety (90) days from
the effective date of this Agreement. Each party, in
its sole discretion, shall decide the timing, method,
and nature of the communication of the decision by the
parties to transfer the claim processing services.
8.2 The parties acknowledge that during the term of
this Agreement, and thereafter, additional matters will arise
that will require the mutual cooperation of the parties. Both
parties agree to take the action reasonably required to
deal with such anticipated but unknown matters,
including, but not limited to, inquiries from third
parties and government agencies that may arise from the
claim files handled under the Claims Agreement.
9. Choice of Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of
Minnesota, notwithstanding any state's choice of law rules to
the contrary.
10. Effect of Agreement. Except as modified
herein, this Agreement shall not effect the terms of the Sublease
Agreement, the computer support agreements or any other contract
or agreement between or among the parties.
Virtual Insurance Solutions Network, Inc.
Date: __________________ _________________________________________
Xxxxx X. Xxxxxxxxx
Chief Executive Officer
Citizens Security Mutual Insurance Company
Citizens Fund Insurance Company
Insurance Company of Ohio
Date: __________________ _________________________________________
Xxxxx X. Xxxx
President and Chief Executive Officer
