1
Exhibit 10.3
DEVELOPMENT SERVICES AGREEMENT
THIS DEVELOPMENT SERVICES AGREEMENT ("Agreement") is made and
effective as of the 30th day of June, 2000 ("Effective Date"), by and between
INSURANCE MANAGEMENT SOLUTIONS, INC. ("IMS"), a corporation organized and
existing under the laws of the State of Florida with its principal place of
business located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and
INSTANT INSURANCE HOLDINGS, INC. ("Instant"), a corporation organized and
existing under the laws of the State of Delaware with its principal place of
business located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, and
its designated or wholly owned subsidiaries, collectively, INSTANT AUTO
INSURANCE COMPANY ("Instant Auto"), a corporation organized and existing under
the laws of the State of Delaware with its principal place of business located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇. Where used in this
Agreement, the term "Customer" shall include within it's meaning both Instant
and Instant Auto.
WHEREAS, Customer wishes to engage the services of IMS to provide
certain development services to Customer, and
WHEREAS, IMS wishes to provide such services as set forth herein,
NOW THEREFORE, IN CONSIDERATION OF the mutual covenants and agreements
hereinafter set forth, and intending to be legally bound hereby, the parties
hereto do covenant and agree as follows:
ARTICLE I. DEFINITIONS
Unless the context clearly requires otherwise, the following terms
when used in this Agreement shall have the meanings set forth below:
A. "Affiliate" is any company which controls, is controlled by, or under
common control with a party, and "control" is defined as owning 50% or
more of such entity.
B. For purposes of legal notice only, "Business Day" means any day other
than a Saturday, Sunday or other day which is a bank holiday for
Florida State Banks or an IMS paid holiday (New Year's Day, Memorial
Day, Independence Day, Thanksgiving Day, day after Thanksgiving,
Christmas Eve (after 12 P.M. Eastern Standard Time) and Christmas
Day).
C. "Change of Control" means (a) a sale, transfer or pledge, or the
issuance to a new shareholder, of fifty (50%) percent or more of the
voting stock of a party hereto to any third party that is not an
affiliate of such party; or (b) a sale, transfer or pledge of a
substantial portion of the material assets of a party, or any merger
or consolidation of a party with another entity or entities. Both
parties agree as respects this paragraph E, that a change of control
includes the above definitions when the sale or purchase is transacted
with a company included within the portfolio of Customer's investment
group or a distribution partner(s) of Customer.
D. "Distribution Partner(s)" means the Customer's business partners which
are authorized by Customer to transact business on Customer's behalf.
E. "Development Services" means the services set forth in this Agreement
and EXHIBIT I hereto in accordance with the terms of the Agreement,
and all applicable laws and regulations.
F. "Technical Information" means and shall include (without limitation)
computer programs, databases, designs, algorithms, processes,
structures, data formats, business methods, know how, and research and
development information.
2
ARTICLE II. TERM
A.. The term of the Agreement ("Term") shall commence on the Effective
Date and shall terminate when the Development Services described in
EXHIBIT I are completed. In the event all services described in
EXHIBIT I are not completed within 120 days of the Effective Date, the
terms of SCHEDULE A. II will apply.
ARTICLE III. RESPONSIBILITIES OF IMS
A. IMS shall dedicate the human, equipment and computer resources
commercially reasonably required to provide Customer with the
Development Services, during the term of this Agreement.
B. IMS shall designate an employee ("Account Manager") of sufficient
status and authority to act as liaison with Customer to facilitate
IMS' performance of the Development Services under this Agreement. The
Account Manager shall provide written and oral communication of the
status of administration of the Development Services as agreed to by
and between Account Manager and Customer.
ARTICLE IV. RESPONSIBILITIES OF CUSTOMER
A. During the term of this Agreement, Customer shall, by mutual agreement
with IMS, provide to IMS, in a timely manner, any and all data,
information and other items required to enable IMS to perform the
Development Services specified in EXHIBIT I of this Agreement.
Customer acknowledges and agrees that delays in delivery of required
documentation, data and/or information by Customer will result in a
similar delay in performing Development Services, and that such a
delay in performing the Development Services shall not be deemed a
breach of the Agreement, and the penalties described in SCHEDULE A.II
of this Agreement will not apply.
B. CUSTOMER ACKNOWLEDGES AND AGREES THAT IMS ASSUMES NO INSURANCE RISK
UNDER THIS AGREEMENT.
C. Customer shall designate manager level employees of sufficient status
and binding decision making authority to act as liaisons with IMS and
to facilitate Customer's role as IMS performs the Development Services
enumerated in EXHIBIT I of this Agreement.
ARTICLE V. CUSTOMER ACCESS TO RECORDS / CONFIDENTIAL INFORMATION
A. At Customer's expense, Customer will be permitted access (as set forth
herein) to all IMS and Customer records and information (excluding,
specifically, proprietary IMS' technical design information)
reasonably necessary to: (i) audit the completeness and accuracy of
the Development Services provided under this Agreement and reports
produced for Customer pursuant to this Agreement; (ii) verify the
accuracy and validity of all ▇▇▇▇▇▇▇▇ and charges to Customer under
this Agreement, including any travel and living expenses; and (iii)
verify IMS' overall compliance with the terms of this Agreement and
applicable laws and regulations. Customer will bear the cost of access
to the above records, including the costs of travel, personnel,
computer hardware and software, and data line charges.
Access to the above records, for the foregoing purposes, will be
provided during normal business hours upon five (5) Business Days
prior written notice to IMS by Customer for so long as IMS is required
to maintain such records under this Agreement; except in case of
regulatory inquiry, in which case access will be granted within twenty
four (24) hours of written notice to IMS.
At Customer's expense, using a copy service of Customer's choice,
Customer will be permitted to copy those IMS records subject to audit
in accordance with this Article.
IMS will provide adequate workspace as mutually agreed upon between
Customer and IMS for Customer to conduct audits in accordance with
this Article. Further, Customer or its
2
3
representatives shall take reasonable precautions, when conducting
audits under this Article, not to materially disrupt IMS' ongoing
business activities. IMS shall provide Customer with workspace,
resources (both physical and human) and amenities necessary to enable
Customer to conduct the audit. Any additional costs incurred by IMS in
providing the human resources pursuant to this paragraph A shall be
borne by Customer.
B. The recipient ("Recipient") of confidential data and/or information
pursuant to this Agreement shall maintain the confidentiality of all
data and/or information which is the property of the other party
("Disclosing Party"), whether originally supplied by the Disclosing
Party, or whether generated by the Disclosing Party in the course of
performing or facilitating the Development Services under this
Agreement and which is directly accessible to the Recipient or is in
the possession of Recipient in the implementation, facilitation and/or
performance of the Development Services. During the term of this
Agreement, Recipient may acquire, know, or have within its possession,
information (including, but not limited to, Technical Information)
and/or data of the Disclosing Party concerning commercial and trade
affairs, rating and underwriting rules and guidelines, the identity of
clients, the identity of insureds and beneficiaries, claims, benefits,
rates and agents, financial information, Proprietary System (as
defined at Article VII, A herein), and business practices of the
Disclosing Party ("Confidential Information"). Confidential
Information which is provided in tangible form must be clearly marked
"Confidential", "Proprietary" or the substantial equivalent thereof,
or if orally disclosed must be clearly identified as "Confidential" or
"Proprietary" at the time of the disclosure (except for IMS' Technical
Information, Customer's underwriting rules and guidelines, the
identity of Customer's clients, the identity of Customer's insureds
and beneficiaries, claims, benefits, rates and agents, and, the
following documents provided by Customer to IMS prior to the Effective
Date of this Agreement: all Flex ▇▇▇▇(R)documentation (including
presentation, matrices, billing guides), `The eCoverage Report',
discount flow charts, network diagram, call reason code documentation,
initial data mapping with Amis, sample hierarchy reports, initial web
flow, point of sale specifications, and initial tiered rating
spreadsheet which will be deemed "Confidential Information" under this
Agreement, regardless of whether marked as such). Except as required
by law, Recipient shall keep Disclosing Party's Confidential
Information confidential and shall only use the Confidential
Information in performing or facilitating the Development Services
under this Agreement. Recipient shall not disclose the Confidential
Information without Disclosing Party's prior written permission except
to Recipient's employees who require the information to perform or
facilitate the Development Services under this Agreement. Each party
hereto, as a Recipient, warrants to the other that appropriate
measures shall be taken by Recipient to safeguard the confidentiality
of the Confidential Information, with a level of care at least equal
to the level of care with which Recipient safeguards its own
confidential or proprietary information. All employees of Recipient,
agents and representatives, and any third parties who are given access
to the Confidential Information shall be under written obligation to
Recipient to maintain such information in confidence.
IMS and Customer agree that Recipient shall have no obligation with
respect to any information or data which:
a) is already rightfully known to Recipient through means other
than Disclosing Party; or
b) is or becomes publicly known through no wrongful act of
Recipient; or
c) is rightfully obtained by Recipient from a third-party
without similar restriction and without breach of this
Agreement; or
d) is independently developed by Recipient without breach of
this Agreement.
Disclosing Party shall retain title to all Confidential Information
(whether tangible or intangible) delivered thereby pursuant to this
Agreement. Recipient shall not copy, reproduce or use any Confidential
Information without written authorization of Disclosing Party, except
as may be required to accomplish the Development Services under this
Agreement. Recipient shall promptly return or destroy, on written
request of Disclosing Party, all tangible copies containing
Confidential Information, except those copies kept in the regular
course of business, or that are required to be kept pursuant to any
state or federal administrative, regulatory or statutory mandates. The
obligations under this Paragraph shall survive the termination of this
Agreement. Notwithstanding the foregoing, this Article shall not
prevent the disclosure of Confidential Information to the extent
legally required by any court or regulatory entity having jurisdiction
over the parties.
3
4
C. For purposes of Article V, Recipient and Disclosing Party shall
include within their meaning all respective subsidiaries, distribution
partners, agents, representatives, affiliates or fronting companies of
the Recipient and Disclosing Party.
D. The obligations of Customer and IMS under this Article V. shall
continue and remain in effect after termination of this Agreement.
ARTICLE VI. EXPENSES AND FEES
A. In consideration of IMS providing Development Services as described
herein, Customer shall pay IMS fees and expenses (collectively
"Development Fees"), as specified in SCHEDULE A.
B. Customer shall reimburse IMS for actual travel, living and
out-of-pocket expenses incurred by IMS personnel, provided such
expenses are approved in writing by Customer. Customer shall not pay
IMS for IMS' travel time.
C. Customer agrees to pay any and all tariffs and taxes that are now or
may become applicable to the Development Services rendered hereunder,
including, but not limited to, sales, use, and personal property
taxes, or any other form of tax based on Development Services
performed, equipment used by IMS solely for Customer, and the
communicating of storage of data used by IMS solely for Customer, but
excluding taxes on the net income of IMS.
D. Subject to the terms of this Agreement, all fees and expenses to be
payable by Customer to IMS shall be paid pursuant to the terms of
SCHEDULE A. Customer's failure to pay all fees and expenses when due
shall be considered a material breach of this Agreement.
4
5
ARTICLE VII. LICENSE, TRADE SECRET AND PROPRIETARY RIGHTS
A. IMS from time to time may use its own proprietary computer software
products and account servicing methods and procedures ("Proprietary
System"), which are identified, described or referenced in Exhibits I
and II hereto, but specifically excluding any IMS/IAIEC, as defined
below, in the performance of the Insurance Administration Services.
During any term of this Agreement, IMS grants a personal,
non-transferable, non-assignable, non-exclusive license with the
restrictions set forth below to Customer and its appointed insurance
sales agents, representatives, or distribution partners to use
portions of the Proprietary System as necessary for IMS to perform the
Insurance Administration Services to be performed by IMS under this
Agreement.
B. Any modifications or enhancements to Proprietary System that IMS
specifically designs and develops for Customer pursuant to this
Agreement and/or Exhibits I and II of this Agreement and during any
term of the Agreement ("IMS/IAIEC") which are mutually agreed by IMS
and Customer to be special modifications and enhancements for this
Customer alone, will be specifically marked with the legend
"IMS/IAIEC" and shall constitute the sole and exclusive property of
Customer, including source code, object code, databases, tables and
documentation. IMS and Customer agree that the parties shall act in a
commercially reasonable manner in determining whether any modification
or enhancement to the Proprietary System is "proprietary" or
"exclusive" to Customer and thus shall be marked as an "IMS/IAIEC".
Notwithstanding the foregoing, it is hereby agreed by the parties that
Flex Billing(R), Equity Specific Billing Forms, Reporting Hierarchy,
Instant Rater, Point of Sale Interface, and Web Rater Interface, and
Rating Engine Module are IMS/IAIEC,. Further, no provision within this
Agreement shall be interpreted as prohibiting IMS from selling or
licensing its Proprietary System or modifications and enhancements to
the Proprietary System (not specifically designed or developed for
Customer pursuant to the terms of this Agreement and not specifically
marked "IMS/IAIEC") to any other customer or prospective customer of
IMS. IMS agrees that it will not sell to, or use in full or in part on
behalf of, any other customer of IMS, an IMS/IAIEC.
C. Other than the limited rights to use the Proprietary System, in
Article VII, this Agreement grants to Customer no right to possess or
reproduce, the Proprietary System or its specifications in any
tangible or intangible medium. Customer may not mortgage, hypothecate,
sell, assign, pledge, lease, transfer, license, sublicense, reverse
engineer, modify, make derivative works of, or obtain any other
interest in the Proprietary System, nor allow any person, firm, entity
or corporation to transmit, copy, reproduce, download, reverse
engineer, modify, make derivative works of, or obtain any other
interest in the Proprietary System or its specifications in whole or
in part. Customer shall not permit third parties to benefit from the
use or functionality of the Proprietary system via time-sharing,
service bureau, facilities management, or other similar arrangement.
In the event Customer shall come into possession of any source or
object code associated with the Proprietary System, Customer shall
immediately notify IMS and return the source or object code associated
with Proprietary System in its possession and all copies of any kind
thereof to IMS. Customer acknowledges that the IMS/IAIEC is designed
to work with the Proprietary System and that the IMS/IAIEC are not
functional apart from the Proprietary System, and that the Customer
has no rights in the Proprietary System except for the specific
license granted in this Article VII.
D. Customer covenants and agrees not to disclose or otherwise make the
Proprietary System available to any person other than employees,
distribution partners, insurance sales agents or representatives of
the Customer required to have access or use of the Proprietary System
to facilitate IMS' or Customer's performance under this Agreement.
Customer agrees to obligate each such employee, appointed insurance
sales agent, distribution partner or representative to a level of care
sufficient to protect the Proprietary System from unauthorized
disclosure or reverse engineering.
E. Upon termination of this Agreement, IMS shall be prohibited from
possessing or reproducing, downloading, reverse engineering, or
obtaining any other interest in the IMS/IAIEC. Further, upon
termination of this Agreement, IMS shall have no right to possess or
reproduce, the IMS/IAIEC or its specifications in any tangible or
intangible medium. During and after the termination of this Agreement,
except as to Customer, IMS may not mortgage, hypothecate, sell,
assign, pledge,
5
6
lease, transfer, license, sublicense, reverse engineer, modify, make
derivative works of, or obtain any other interest in a IMS/IAIEC, nor
allow any person, firm, entity or corporation to transmit, copy,
reproduce, download, reverse engineer, modify, make derivative works
of, or obtain any other interest in a IMS/IAIEC or its specifications
in whole or in part. IMS shall not permit third parties to benefit
from the use or functionality of a IMS/IAIEC via time-sharing, service
bureau, facilities management, or other similar arrangement. After the
termination of this Agreement, in the event IMS shall come into
possession of any source or object code associated with a IMS/IAIEC,
IMS shall immediately notify Customer and return the source or object
code associated with IMS/IAIEC in its possession and all copies of any
kind thereof to Customer.
F. IMS covenants and agrees not to disclose or otherwise make a IMS/IAIEC
available to any person other than employees, distribution partners,
agents or representatives of IMS required to have access or use of a
IMS/IAIEC to facilitate IMS' or Customer's performance under this
Agreement. IMS agrees to obligate each such employee, agent,
distribution partner or representative to a level of care sufficient
to protect a IMS/IAIEC from unauthorized disclosure or reverse
engineering.
G. IMS will notify Customer in writing at least five (5) days prior to
the implementation of any and all modifications IMS proposes to make
to the IMS Proprietary System that may affect Customer's business and
IMS's performance of IMS duties and services under this Agreement.
H. Any global changes or enhancements made by IMS to the Proprietary
System will be used by IMS in connection with providing the Insurance
Administration Services hereunder.
I. The obligations of the parties under this Article shall continue and
remain in effect after this Agreement is terminated for any reason.
ARTICLE VIII. TERMINATION
A. This Agreement will terminate at the end of the Term.
B. This Agreement may also terminate prior to the end of the Term:
a) at the election of the Customer, upon written notice to IMS,
if IMS becomes insolvent, if it makes an assignment for the
benefit of its creditors, if a petition for relief under the
Bankruptcy Act is filed by or against it and it is not
dismissed within thirty (30) days of being filed, or if a
trustee, receiver or other custodian of its assets is
appointed;
b) at the election of IMS, upon written notice to Customer, if
Customer becomes insolvent, if it makes an assignment for the
benefit of its creditors, if a petition for relief under the
Bankruptcy Act is filed by or against it and it is not
dismissed within thirty (30) days of being filed, or if a
trustee, receiver or other custodian of its assets is
appointed; including, but not limited to, any proceeding
pursuant to any state or federal action governing insurer
insolvency.
c) at the election of the Customer, if IMS materially breaches
any provision of this Agreement and fails to cure such breach
within ten (10) days after written notice thereof is given to
IMS by the Customer;
d) at the election of IMS, if Customer materially breaches any
provision of this Agreement and fails to cure such breach
within ten (10) days after written notice thereof is given to
Customer by IMS (except for Customer's failure to pay any and
all fees and expenses due under Article VI of this Agreement,
in which case Customer must cure such breach within thirty
(30) days after written notice thereof is given to Customer
by IMS);
e) at the election of the Customer, upon written notice to IMS,
in the event of a Change of Control of IMS, unless IMS has
provided Customer not less than sixty (60) days advance
written notice of the proposed Change of Control; or
6
7
f) at the election of IMS, upon written notice to Customer, in
the event of a Change of Control of Customer unless Customer
has provided IMS not less than sixty (60) days advance
written notice of the proposed Change of Control.
C. The initiation under this Agreement of any dispute resolution
procedure shall not prevent a party from terminating this Agreement in
accordance with this Article VIII.
7
8
D. On expiration or termination of this Agreement, IMS shall return to
Customer all of Customer's information, either in electronic or hard
copy form, in IMS' possession and delete any electronic copies thereof
related to the Development Services provided by IMS during the term of
this Agreement; Customer shall do the same and cause Customer's agents
to do the same relative to IMS' Confidential Information. Customer
shall pay IMS (in accordance with SCHEDULE A then in effect) any and
all Service Fees, miscellaneous fees and third party fees due IMS for
Development Services performed prior to the termination date of this
Agreement.
ARTICLE IX. WARRANTIES AND COVENANTS
IMS covenants that: (a) all Development Services shall materially conform to
the descriptions set forth in EXHIBIT I of this Agreement; (b) all Development
Services shall be performed in a good and workmanlike manner; and (c) IMS will
comply in all material respects with the law of the state or states covered by
this Agreement and with the rules and regulations of all regulatory authorities
having jurisdiction over IMS' activities, and shall, whenever necessary,
maintain at its own expense all required licenses to transact business in such
states. IMS warrants to Customer that (a) IMS owns or otherwise has the right
to use the Proprietary System used to perform the Development Services, and the
rights to such Proprietary System granted hereunder will not knowingly infringe
upon a third party's copyright or patent rights; (b) IMS is duly authorized to
transact the business of servicing insurance companies; and (c) the express
warranties provided here and elsewhere in this Agreement are IMS' only
warranties and no other warranty, express or implied, including any warranty of
merchantability, fitness or fitness for a particular purpose, will apply to the
provision of Development Services under this Agreement.
ARTICLE X. LIABILITY, LIMIT OF LIABILITY, INDEMNITIES AND REMEDIES
A. The parties shall assume the following obligations and liabilities as
specified below and subject to the limitations on liability set forth
in Paragraph B below:
(a) IMS shall indemnify, defend and hold harmless Customer, its
officers, directors, employees and controlling persons from
any liability, cost, loss, fine, penalty, claim, demand,
damage or expense, including reasonable attorneys' fees,
incurred solely and directly as a result of any material
breach of IMS' obligations under this Agreement or the
material breach of any representation or warranty made by IMS
to Customer pursuant hereto;
(b) Customer shall indemnify, defend and hold harmless IMS, its
officers, directors, employees and controlling persons from
any liability, cost, loss, fine, penalty, claim, demand,
damage or expense, including reasonable attorney's fees,
incurred solely and directly as a result of any material
breach of Customer's obligations under this Agreement or the
material breach of any representation or warranty made by
Customer to IMS pursuant hereto.
(c) Customer agrees to, and shall cause its affiliates,
subsidiaries, agents and fronting companies, jointly and
severally, to indemnify, defend and hold harmless IMS, its
officers, directors, employees, agents, representatives, and
controlled and controlling persons (collectively "IMS
Indemnitees") from and against any and all liabilities,
losses, damages, demands, claims, suits, actions, causes of
action, proceedings, assessments, judgments, awards,
penalties, settlements, fees, costs and/or expenses of any
kind or nature whatsoever asserted against, resulting to,
imposed upon or incurred by IMS or any of IMS' Affiliates,
directly or indirectly, by reason of, arising out of,
relating to or resulting from any agreement, obligation or
relationship, contractual or otherwise, that Customer has or
ever had with INSpire Insurance Solutions, Inc., or any of
its affiliates or subsidiaries.
8
9
B. Except for: (i) Service Fee and other amounts owed to IMS by Customer
in consideration of IMS providing the Insurance Administration
Services, miscellaneous services or third party services hereunder;
(ii) acts of fraud, or willful misconduct; (iii) penalties payable by
IMS under Article XIII of this Agreement, and (iv) violations of
Article VII, Article V.B, Article VII.D of this Agreement, each
party's maximum liability ("Maximum Liability") to the other party for
any cause whatsoever, during any one calendar year (including, but not
limited to, amounts payable to either party by the other for
regulatory fines, settlements and penalties) shall be limited to
direct damages incurred by that party. In no event shall IMS' or
Customer's liability for breach of this Agreement or any of its
provisions exceed the amount of compensation paid by Customer under
Schedule B of this Agreement for the three months immediately
preceding the breach. Neither party shall be liable for any lost
profits, business goodwill, or other consequential, punitive, special
or incidental damages incurred by the other.
C. In the event of any IMS Proprietary System error or omission which
materially affects IMS' ability to perform the Development Services
under this Agreement, IMS will correct same at no cost to Customer.
D. All parties agree to promptly give the others notice upon being
notified or becoming aware of any and all allegations or claims, which
could give rise to a claim under this Article.
E. Notwithstanding any other provision of this Agreement, Customer shall
be liable to IMS for all damages resulting from a breach of Customer's
obligations under Article VII.C.
ARTICLE XI. GENERAL AGREEMENTS
A. This Agreement and all matters arising hereunder shall be governed by
and determined in accordance with the laws of the State of Texas
without giving effect to any choice of law provisions, except for
matters arising out of or pertaining to IMS' Proprietary Systems,
which shall be governed by and determined in accordance with the laws
of the State of Florida.
B. The parties shall not be liable or deemed to be in default hereunder
for any delay or failure in performance under this Agreement or
interruption of the Development Services resulting, directly or
indirectly, from acts of God (including but not limited to weather
catastrophes such as floods, hurricanes, tornadoes, windstorms, ice
storms, blizzards and hail storms), civil or military authority, labor
disputes, shortages of suitable parts, materials, labor or
transportation or any similar cause beyond the reasonable control of
the parties. IMS acknowledges that it has a detailed emergency
recovery plan for interruption of the Development Services and has
contracted with an emergency "Hot Site". IMS shall follow its recovery
plan, which provides recovery priority to "Production Customers" and
is designed to re-establish the Development Services following a
disaster causing an interruption thereof. IMS acknowledges that
Customer is a Production Customer. Customer acknowledges that the Hot
Site is only a temporary bridge and that there may be a diminution in
the performance levels of the Development Services until the main data
center capabilities are re-established. IMS will maintain and update
its recovery plan and will conduct annual testing of its recovery
plan. IMS will provide the results of such annual testing to Customer
within ten (10) days of receipt of such results.
C. Customer and IMS agree that, during the Term of this Agreement and for
a period of six (6) months following the termination of this
Agreement, neither party will directly or indirectly induce any
employee of the other to terminate his or her employment with the
other party, nor will either party, without prior written consent of
the other, offer employment to any employee of the other party or to
former employees of the other party during the six (6) month period
immediately following such employee's termination. This Paragraph C.
shall survive termination of this Agreement. The provisions of this
paragraph apply to each party's respective subsidiaries, agents,
affiliates and other related entities.
9
10
D. Any and all notices, designations, consents, offers, acceptances, or
any other communication provided for herein shall be given in writing
by hand delivery, by overnight carrier, by registered or certified
mail or by facsimile transmission and shall be addressed as follows:
As to Customer: Instant Insurance Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
As to IMS: Insurance Management Solutions, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
Notices sent by hand delivery shall be deemed effective on the date of
actual hand delivery. Notices sent by overnight carrier shall be
deemed effective on the next Business Day after being placed into the
hands of the overnight carrier. Notices sent by registered or
certified mail shall be deemed effective on the fifth Business Day
after being deposited into the post office. Notices sent by facsimile
transmission shall be deemed to be effective on the day when sent if
sent prior to 4:30 p.m. (the time being determined by the time zone of
the recipient), otherwise they shall be deemed effective on the next
Business Day.
E. This Agreement, and the exhibits, schedules and addenda attached
hereto, contain all of the prior oral and/or previously written
agreements, representations, and arrangements between the parties
hereto. There are no representations or warranties other than those
set forth herein. No change or modification of this Agreement,
including the exhibits, schedules and addenda hereto, shall be valid
unless the same shall be in writing and signed by all of the parties
hereto. All schedules, addendum of any kind, or attachments to this
Agreement shall be made a part of this Agreement and shall be subject
to all terms and conditions of this Agreement. Articles V (B), VII, XI
(C) shall survive any termination of this Agreement.
F. Words of a gender used in this Agreement shall be held to include any
other gender, the words in a singular number held to include the
plural, when the sentence so requires. Article headings are intended
for purposes of description only and shall not be used for purposes of
interpretation of this Agreement.
G. Should any part of this Agreement for any reason be declared invalid,
such decision shall not effect the validity of any remaining portion,
which remaining portion shall remain in full force and effect as if
the Agreement had been executed with the invalid portion thereof
eliminated. It is, therefore, declared the intention of the parties
hereto that each of them will have executed the remaining portion of
this Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared void.
H. If either party should bring a Court action alleging breach of this
Agreement or seeking to enforce, rescind, renounce, declare, void or
terminate this Agreement or any provisions thereof, the prevailing
party shall be entitled to recover all of its legal expenses,
including reasonable attorneys' fees and costs (including legal
expenses for any appeals taken), and to have the same awarded as part
of the judgment in the proceeding in which such legal expenses and
attorneys' fees were incurred.
I. Neither IMS nor Customer shall assign this Agreement or any of its
rights hereunder without the prior written consent of the
non-assigning party.
J. The parties agree not to disclose the terms and conditions of this
Agreement to any third party, except (i) as required in the normal
conduct of Customer's business, or (ii) as required by law or
regulation including, without limitation, any Federal securities law,
or regulation.
10
11
ARTICLE XII. DISPUTE RESOLUTION PROCEDURES
A. The parties will attempt in good faith to promptly resolve any dispute
arising under this Agreement by negotiations between senior management
("Senior Management") of the parties. Senior Management of each party
will meet within ten (10) calendar days of notice ("Notice of
Dispute") by a party of the existence of a dispute, at a mutually
agreed time and place, to resolve the dispute. Notwithstanding any
provisions in this Agreement pertaining to IMS' rights to cure any
service standard deficiencies or Customer's rights pursuant to
Schedule ▇.▇▇, Senior Management, who shall have the authority to
settle the dispute, shall prepare and exchange memoranda stating the
issues in the material dispute and their positions. If the material
dispute is not resolved to the mutual satisfaction of the parties
within seven (7) calendar days of the meeting of Senior Management,
then the parties may attempt to resolve the controversy using
mediation.
B. If the matter has not been resolved pursuant to the aforesaid
mediation procedure within thirty (30) calendar days of the issuance
of a party of a Notice of Dispute, or if either party will not
participate in mediation, then either party may initiate arbitration
upon fifteen (15) calendar days written notice to the other party.
Notwithstanding the foregoing, all deadlines specified above may be
extended upon mutual written agreement of the parties.
C. Except for the right of either party to apply to a court of competent
jurisdiction for review of the award of arbitration, for a temporary
restraining order, preliminary injunction or other equitable relief to
preserve the status quo, or disputes relating to breach of the
confidentiality, non-disclosure or trade secret provisions of this
Agreement, all claims, disputes, controversies and other matters
relating to breach of this Agreement, and which cannot be resolved by
the parties shall be settled by arbitration in accordance with this
Agreement.
D. Notice requesting arbitration ("Arbitration Notice"), or any other
notice made in connection therewith, shall be made in writing by one
party and sent by certified mail, return receipt requested, to the
other party. The Arbitration Notice shall state in particular all
issues to be resolved in the view of the complaining party, shall
appoint the arbitrator selected by the complaining party and shall set
a tentative date for the hearing, which date shall be no sooner than
forty-five (45) calendar days and no later than ninety (90) calendar
days from the date that the Arbitration Notice is mailed. Within
twenty (20) calendar days of receipt of the complaining party's
Arbitration Notice, the respondent shall notify the complaining party
of the location for conducting arbitration and the name of its
appointed arbitrator. When the two arbitrators have been appointed,
they shall agree on a third independent arbitrator and shall appoint
such person by written notice to the parties signed by both
arbitrators within thirty (30) calendar days from the date of the
appointment of the second arbitrator. If the two arbitrators fail to
agree upon the appointment of an independent arbitrator at the end of
thirty (30) calendar days following the appointment of the second
arbitrator, then the independent arbitrator shall be appointed by the
American Arbitration Association ("AAA"), or its successor, in
accordance with its then prevailing commercial arbitration rules then
in effect. The three (3) arbitrators shall constitute the Arbitration
Board ("Board").
E. The members of the Board shall be active or retired (i) lawyers or
professionals familiar with insurance and/or (ii) active or former
officers or management employees of insurance and/or data processing
firms and/or software development companies. The person selected by
the two respective arbitrators appointed by the parties shall be the
umpire or chief arbitrator and must be a licensed attorney.
F. Arbitration shall be conducted in accordance with the Commercial Rules
of the American Arbitration Association ("AAA") then in effect except
as modified herein.
G. The parties agree that all then current employees of each with
material relevant information will be voluntarily produced, at the
employer's expense, for all proper discovery and arbitration hearings.
11
12
H. The cost of the arbitration relative to the arbitrators and the AAA
("Costs") shall be borne equally pending the arbitrators' award. Each
party shall bear its own expenses for attorneys' fees. The prevailing
party in any arbitration proceeding hereunder shall be entitled, in
addition to such other relief as may be granted, to recover the
portion of the Costs incurred by that party in connection with
arbitration under the Agreement prior to the award.
I. The parties agree that the arbitrators shall be required to render
their decision in writing within thirty (30) calendar days of the
conclusion of the arbitration proceedings, unless such time shall be
extended by mutual written agreement of the parties.
J. With respect to any matter brought before the Board, the Board shall
make a decision having regard to the intentions of the parties, the
terms of this Agreement, and custom and usage of the insurance and
data processing industry. Such decisions shall be in writing and shall
state the findings of fact and conclusions of law upon which the
decision is based, provided that such decision may not (i) award
consequential, punitive, special, incidental or exemplary damages, or
(ii) include a suspension of this Agreement or any provisions hereof.
The decision shall be based exclusively upon the evidence presented by
the parties at a hearing in which evidence shall be allowed. Said
decisions may be reviewable and vacated, modified or corrected, in
whole or in part, by appropriate courts of competent jurisdiction for
clear abuses of discretion or errors at law by the Board. If the
decision is not vacated, modified, or corrected in whole or in part
upon an appeal, such decision shall be final and binding upon all
parties to the proceeding and may be entered by either party in any
court having competent jurisdiction.
IN WITNESS WHEREOF, the parties hereto by their respective duly
authorized representatives have executed this Agreement to be effective as of
the 30th day of June, 2000.
"IMS": "Customer":
INSURANCE MANAGEMENT SOLUTIONS, INC. INSTANT INSURANCE HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇▇
--------------------------------- -----------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇
As its: CFO As its: President/CEO
----------------------------- -------------------------
Date: 7-3-00 Date: 6-30-00
------------------------------- ---------------------------
12
13
SCHEDULE "A" - FEE SCHEDULE
EXHIBIT I - DEVELOPMENT SERVICES
14
SCHEDULE A
FEE SCHEDULE
I. Fees
Customer will pay IMS $____*____ for the Development Services
described in EXHIBIT I of this Agreement, to be paid to IMS as
follows:
o $____*____ due upon execution of this Agreement
o $____*____ due upon completion by IMS and delivery to Customer of
the Development Services described in EXHIBIT I.
o $____*____ due thirty (30) days after live production.
II. Penalty for Late Completion
In the even the Development Services described in EXHIBIT I are not
completed within 120 days from the Effective Date of this Agreement,
the amount due from Customer to IMS will be reduced by $____*____ per
week for each week beyond 120 days from the Effective Date.
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the SEC pursuant to Rule 24b-2.
15
EXHIBIT I
DEVELOPMENT SERVICES
I. Definitions
A. Phase I - Project segment to result in Customer's Automobile
Insurance Internet Site ("The Site") being functional in one
(1) state for quoting, policy issuance, policy inquiry,
policy payments, and on-line chat.
B. Phase II - Project segment to result in The Site being
functional in five (5) states for quoting, policy issuance,
policy inquiry, policy payments, on-line chat, Internet
Customer Affinity Programs, and business to business
interfaces.
II. Services
IMS will perform the following Development Services on Customer's
behalf. Completion of the tasks listed below will result in the
following functionality in support of Phase I and Phase II of The
Site:
A. Interfaces not common to Customer's Instant Rater
B. Interfaces for Policy Inquiry
C. Interfaces for Payments
D. Interfaces for Policy Issuance
E. Interfaces for Quoting