Exhibit 10.4
INSpire - Millers Agreement - 2/1/02
SPL Pricing
Effective November 1, 2001, the Specialty Personal Lines printing and cycle turn
charges shall be billed at a flat rate of $7,633.00 per month with subsequent
months according to the attached schedule.
Phoenix Minimums
Effective 1/1/02, the minimum monthly policy administration and claim
administration fees referenced in Addendum 1.1.1 (Phoenix), sections 5(c) and
(d), attached to and made part of the Master Services Agreement dated September
1, 1999 and relating to policies written by Phoenix Indemnity Insurance Company,
shall be calculated as follows:
X. Xxxxxxx will provide to INSpire a twelve (12) month forecast by state and
month of the monthly premium expected to be written and earned;
B. The average monthly premium shall be the total sum of the twelve month
projected earned premium of each state divided by 12;
C. The minimum policy administration fee shall be calculated by multiplying the
average monthly premium times 7.15%;
D. The minimum claim administration fee shall be calculated by multiplying the
average monthly premium times 7.75%;
Millers may, at its sole discretion, update its premium forecast once every
three (3) months. If Xxxxxx'x premium forecast is expected to decline in any
upcoming three month period from its current level, the then current fees will
remain in effect for an additional 90 days, at the end of which, the monthly
fees will be recalculated as set forth in steps A through D above to reflect the
decline in the premium forecast. If the actual earned premium exceeds the
projection, then INSpire shall receive the additional fees resulting from the
increased premium.
INSpire shall at all times maintain sufficient competent resources necessary to
provide and maintain the high quality service standards set forth in the
applicable Master Services Agreement.
Employee Dishonesty
INSpire shall pay to Xxxxxxx the amount of $64,907.00 in full and final
settlement of the employee dishonestly [sic] claim. Upon receipt of payment,
Xxxxxxx agrees to assign its right of recovery against the responsible party to
INSpire. Xxxxxxx agrees to assist Inspire in the recovery process. Xxxxxxx will
forward any and all payments received from the responsible party to INSpire.
Xxxxxxx will not incur any costs in so doing.
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Response to #4 (Phoenix)
Phoenix Service Addendum 1.1.1 dated September 1, 1999 and modified by Letter of
Agreement dated July 24, 2000, section 3 states in part "If the parties are
unable to reach a good faith renegotiation of the contract at the end of any
three year period, INSpire shall be entitled to a prorata refund of the $3.5
million, which was to be amortized over ten (10) years, based upon the
unrealized portion of the contract between the date of termination and
8/31/2009. Further, Millers American Group, Inc. will be entitled to the return
of all assets transferred to INSpire under the original agreement dated
September 1, 1999. Further, in the event of a termination of the Master Services
Agreement or any Addendum thereto, parties agree to negotiate in good faith for
the sale and transfer to Millers of any software and/or hardware necessary for
it to resume and operate its business."
Section 7.2 (d) of the Master Services Agreement between Millers American Group,
Inc. and INSpire Insurance Solutions, Inc. dated September 1, 1999 of which
Phoenix Addendum 1.1.1 as modified is attached and made a part thereof, states:
"Payment of Termination Fee. Each Party acknowledges that INSpire agreed to
provide Customer an option to terminate a program pursuant to Section 7.1 (c) in
reliance on and in anticipation of, Customer's absolute obligation to pay the
applicable Termination Fee associated with the terminated program. As used in
this subsection. "Termination Fee" means the aggregate amount of INSpire's
unamortized costs associated with the terminated program, including (i) tangible
and intangible assets, (ii) implementation costs and (iii) transaction costs
....."
In the event of a sale or divestiture of Phoenix Indemnity Insurance Company to
a third party, INSpire agrees that:
(1) It shall NOT invoke the above cited provisions (Section 7.2 (d) of the
Master Service Agreement between Millers American Group, Inc. and INSpire
Insurance Solutions, Inc. dated September 1, 1999 as amended and Section 3 of
the Phoenix Addendum 1.1.1 dated September 1, 1999 as modified by Letter of
Agreement dated July 24, 2000) so long as the Purchaser or recipient is willing
to allow INSpire to continue to process the business at the current MAG/INSpire
rate or at a rate acceptable to Purchaser/recipient and INSpire, whichever is
lower; and/or
(2) It shall NOT expect to receive and shall NOT receive any money or other
thing of value upon a cancellation or liquidation unless Phoenix is sold for
more than $17 million.
Board Seats
Upon determination of all outstanding issues, events, and concerns that could be
perceived as his having insider knowledge in order to better the position of
Xxxxxxx and any conflicts of interest and upon development of a plan to address
and eliminate all of those identified issues, INSpire shall make a formal offer
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to Xxx Xxxxxxx, or other Xxxxxxx designee, to sit on INSpire's Board of
Directors.
Agreed to this day, 2/1/02
For: Millers American Group For: INSpire Insurance Solutions
/s/ Xxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxx
----------------------------------- ------------------------------------
By: Xxxxx Xxxxxxx By: Xxxxxxx Xxxxxx
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