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EXHIBIT 10.7
AMENDED AND RESTATED
MANAGEMENT INFORMATION SERVICES AGREEMENT
Effective January 1, 1995
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TABLE OF CONTENTS
Page
----
I. Definitions...........................................................1
Section 1.1 AGI and Its Subsidiaries..........................1
Section 1.2 ALFC and Its Subsidiaries.........................1
Section 1.3 Coordinating Committee............................1
Section 1.4 Licensee..........................................1
Section 1.5 Management Information Services...................1
Section 1.6 Methods/Procedures................................2
Section 1.7 Mutual and Its Subsidiaries.......................2
Section 1.8 PC................................................2
Section 1.9 PC Support........................................2
Section 1.10 Pooling Agreement.................................2
Section 1.11 Pool Participants.................................2
Section 1.12 Programming/Development...........................2
Section 1.13 Software..........................................2
II. Services To Be Performed..............................................3
Section 2.1 General MIS.......................................3
Section 2.2 PC Support........................................3
Section 2.3 PC Maintenance....................................3
Section 2.4 PC Rating Disc Updates............................3
Section 2.5 Agency Automation.................................3
Section 2.6 Flexible Premium Payment Plans....................3
Section 2.7 Printing..........................................4
Section 2.8 Policy Assembly...................................4
Section 2.9 Postage/Mail Processing...........................4
Section 2.10 Supply Services...................................4
Section 2.11 Telephone/Communications..........................4
Section 2.12 Equipment Leasing.................................4
Section 2.13 License of Software...............................5
Section 2.14 Other Services....................................5
Section 2.15 XXXX Rights.......................................6
III. Payment For Services..................................................6
Section 3.1 General...........................................6
Section 3.2 Fees..............................................6
IV. Term, Termination, and Change of Control..............................6
Section 4.1 Term and Termination..............................6
Section 4.2 Change of Control of ALFC.........................6
Section 4.3 Change of Control of AGI..........................7
V. Dispute Resolution....................................................7
Section 5.1 AGI and Its Subsidiaries..........................7
Section 5.2 Mutual and Its Subsidiaries.......................8
Section 5.3 ALFC and Its Subsidiaries.........................8
Section 5.4 All Other Disputes................................8
Section 5.5 Arbitration.......................................8
VI. Confidential Information and Trade Secrets............................9
Section 6.1 Obligation to Keep Confidential ..................9
VII. Miscellaneous........................................................10
Section 7.1 Assignment.......................................10
Section 7.2 Waiver; Remedies.................................10
Section 7.3 Permissive Release of Confidential Information...10
Section 7.4 Notices..........................................11
Section 7.5 Governing Law....................................11
Section 7.6 Enforceability...................................11
Section 7.7 Survival of Representations, Warranties,
and Covenants....................................11
Section 7.8 Counterparts ....................................11
Section 7.9 Headings.........................................11
Section 7.10 Entire Agreement.................................11
Section 7.11 Amendments.......................................12
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Signature Page...............................................................13
Addendum A
Addendum B
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AMENDED AND RESTATED
MANAGEMENT INFORMATION SERVICES AGREEMENT
THIS AGREEMENT is made as of this ____ day of December, 1995, to be
effective January 1, 1995, by and among ALLIED Group Information Systems, Inc.
("AGIS"), ALLIED Mutual Insurance Company ("Mutual"), ALLIED Group, Inc.
("AGI"), AMCO Insurance Company ("AMCO"), ALLIED General Agency Company ("AGA"),
ALLIED Group Mortgage Company ("AGMC"), ALLIED Group Leasing Corporation
("AGLC"), ALLIED Life Financial Corporation ("ALFC"), ALLIED Life Insurance
Company ("ALLIED Life"), ALLIED Life Brokerage Agency ("ALBA"), ALLIED Group
Merchant Banking Corporation ("AGMBC"), and ALLIED Group Insurance Marketing
Company ("AGIMC"). Mutual, AGI, AMCO, AGA, AGMC, AGLC, ALLIED Life, ALBA, ALFC,
AGMBC, and AGIMC shall be hereinafter referred to collectively as the
"Companies".
WITNESSETH:
WHEREAS, the Companies and AGIS entered into an Amended and Restated
Management Information Services Agreement effective January 1, 1994 (the
"Agreement") on February 27, 1995; and
WHEREAS, the parties desire to amend and restate the terms of the
Agreement to update the fees and other services that AGIS is providing to the
Companies for the 1995 calendar year.
NOW, THEREFORE, in consideration of the foregoing premises, and for and
in consideration of the mutual covenants and agreements contained herein, the
parties agree as follows:
I. DEFINITIONS
1.1. "AGI and Its Subsidiaries" shall mean the following companies which
are parties to this Agreement: AGI, AMCO, AGA, AGMC, AGLC, and AGIS.
1.2 "ALFC and Its Subsidiaries" shall mean the following companies which
are parties to this Agreement: ALFC, ALLIED Life, ALBA and AGMBC.
1.3. "Coordinating Committee" shall mean the joint meeting of the
coordinating committees established by Mutual, AGI, and ALFC in accordance with
their respective bylaws or pursuant to resolution for the purpose, among others,
of resolving issues under this Agreement.
1.4 "Licensee" shall mean AMCO.
1.5. "Management Information Services" or "MIS" shall mean the
Programming/Development, Methods/Procedures, processing, and support of all
insurance-related information and data functions, including, but not limited to,
policy processing, claims processing, data processing, accounting, billing,
rating, marketing, recordkeeping, statistical and regulatory reporting, and
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insurance-related services necessary or helpful in the operation of the
Companies. MIS does not include: (a) third-party data processing services
provided to any of the Companies by contract; (b) processing flexible premium
payment plans; or (c) printing services, unless otherwise provided herein.
1.6. "Methods/Procedures" shall mean studies or work flow analysis,
training on software systems, and other computer support.
1.7. "Mutual and Its Subsidiaries" shall mean the following companies
which are parties to this Agreement: Mutual and AGIMC.
1.8. "PC" shall mean personal computer.
1.9. "PC Support" shall mean PC installation, training, and assistance,
but shall not include PC maintenance.
1.10. "Pooling Agreement" shall mean the Second Amended and Restated
Reinsurance Pooling Agreement dated December 14, 1992, as amended February 18,
1993, pursuant to which AMCO as the pool administrator provides certain services
to Mutual, ALLIED Property and Casualty Insurance Company, and Depositors
Insurance Company.
1.11. "Pool Participants" shall mean AMCO, Mutual, ALLIED Property and
Casualty Insurance Company, and Depositors Insurance Company.
1.12. "Programming/Development" shall mean the analysis, design,
programming, and development of PC and mainframe Software and shall include
mainframe Software consulting and maintenance services. The maintenance services
shall include, but not be limited to, error corrections, enhancements, and
updates. Programming/Development shall not include those programming functions
performed by any of the Companies on personal computers, which are generally
limited to actuarial functions, unique branch office recordkeeping requirements,
and internal accounting reports.
1.13. "Software" shall mean any and all computer programs, models,
plans, outlines, packages, or systems thereof and related documentation or
manuals as developed, or which may be developed in the future by AGIS, and used
by the Companies for MIS, but does not include those computer programs which are
used by any of the Companies pursuant to license agreements with third parties.
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II. SERVICES TO BE PERFORMED
2.1. General MIS. AGIS shall provide all MIS required by AMCO, ALLIED
Life, AGI's human resources department, and AGIMC. The MIS to be provided during
the term of this Agreement shall be substantially the same as those services
presently provided to or utilized by AMCO, ALLIED Life, AGI's human resources
department, and AGIMC as of the effective date of this Agreement. In addition,
AGIS shall provide MIS to any of the Companies if requested by such Companies.
The scope and extent of MIS provided under this Agreement may be amended or
modified from time to time by written agreement between AGIS and the party
receiving the MIS.
2.2. PC Support. AGIS shall provide PC Support to AMCO, ALLIED Life,
ALBA, AGI's human resources department, AGA, AGMC, AGLC, AGMBC, and AGIMC. AGIS
shall also provide AGIMC with PC Support for its phone system.
2.3. PC Maintenance. AGIS will assist in coordinating with each of the
Companies for third-party vendor maintenance on the personal computers, and each
of the Companies shall be responsible for payment to such third-party vendor.
2.4. PC Rating Disc Updates. AGIS shall provide to AMCO custom software
updates to the branch office PC rating discs.
2.5. Agency Automation. AGIS shall provide to AMCO access to data
processing on an automated management and accounting ("AMANDA+") data processing
system which will be offered by the Pool Participants to certain of their
insurance agencies until December 31, 1995 and AGIS and the Pool Participants
will negotiate, in good faith, fees applicable to this continued service.
2.6. Flexible Premium Payment Plans. AGIS shall perform the processing,
billing, scanline, and remittance services with regard to the flexible premium
payment plan offered by the Pool Participants to their insureds. All service
charges and reinstatement fees assessed to insureds pursuant to the flexible
premium payment plan shall be retained by the Pool Participants. AGIS also shall
perform the remittance services for the Motor Club of Iowa Insurance Company
pursuant to the Assumption Reinsurance Agreement between AMCO and the Motor Club
of Iowa Insurance Company. It is contemplated that AMCO may enter similar
agreements with other insurance companies for which AGIS will perform
processing, billing, scanline, or remittance services for these other insurance
companies, and AGIS agrees to provide such services provided that AMCO obtains
AGIS' written consent prior to entering such agreements. AMCO shall be
responsible for payment to AGIS for the services rendered with respect to the
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flexible premium payment plan and the remittance services for the Motor Club of
Iowa Insurance Company and other insurance companies which may be provided these
services as contemplated above.
2.7. Printing.
(a) Forms and Reports. AGIS shall generate the following data and
record output for AMCO and ALLIED Life: (i) policy forms, (ii) claim forms,
(iii) billing forms, and (iv) internal reports not generated by personal
computers. AGIS shall generate internal reports for AGI's human resources
department which cannot be generated by personal computers.
(b) Typesetting and Other Printing. AGIS shall provide typesetting
services to such Companies requesting typesetting services. Any other printing
services including, but not limited to, specialty printing or brochures, shall
be provided by AGIS to the Companies, or any of them, if requested.
2.8. Policy Assembly. AGIS shall provide policy assembly for AMCO and
ALLIED Life. The policy assembly shall include the preparing, handling, and
mailing of insurance policies.
2.9. Postage and Mail Processing. AGIS shall provide mail processing for
the offices of the Companies which are located in Polk County, State of Iowa.
This mail processing shall include internal and external distribution of mail
among such Companies and to the proper post office facilities and may include
inserting and sorting mail services.
2.10. Supply Services. For those Companies which desire to use the
supply service, AGIS shall administer and manage the storage, warehousing, and
distribution of the inventory of office supplies owned by such Companies. The
supply service provided by AGIS shall include, but not be limited to, the
ordering of paper used in processing forms for AMCO and ALLIED Life.
2.11. Telephone and Communications. AGIS shall provide telephone
equipment, long-distance communication services, or both, for such Companies
requesting equipment and/or service upon mutually agreeable terms and
conditions. AGIS shall also provide computer and telephone port access to those
Companies which office at 000 Xxxxx Xxxxxx, Xxx Xxxxxx, Xxxx.
2.12. Equipment Leasing. AGIS shall lease to each of AMCO, ALLIED Life,
AGI, and AGIMC certain electronic data processing equipment as agreed to by the
parties and under such specific lease term and fees as follows:
(a) Reports will be given to AMCO, ALLIED Life, AGI, and AGIMC by
AGIS on a monthly basis which shall identify the items of equipment
subject to the lease (the "Equipment"). For each item of Equipment, the
report shall specify any serial or model number, the term of the lease,
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the monthly lease fee, the Equipment location, and the amount of lease
deposit, if any.
(b) AGIS shall be responsible for the installation of the
Equipment and for the coordination of any movement of such Equipment.
(c) AMCO, ALLIED Life, AGI, and AGIMC shall notify AGIS if there
is a change in the location of each piece of leased Equipment.
(d) AMCO, ALLIED Life, AGI, and AGIMC shall be responsible for the
use and maintenance of the Equipment and shall bear all risks of loss,
theft, damage, or destruction of the Equipment.
(e) The Equipment shall have no warranties, and AGIS supplies the
Equipment "as is".
(f) At the expiration of the lease term for each item of
Equipment, the lease term will automatically extend on a month-to-month
basis unless AMCO, ALLIED Life, AGI, or AGIMC provide AGIS with 30 days
written notice of termination for identified equipment.
(g) After the expiration of the lease term for each item of
Equipment, AMCO, ALLIED Life, AGI, and AGIMC shall promptly return to
AGIS the Equipment unencumbered and in the same operating order, repair,
condition, and appearance as when received (excepting only reasonable
wear and tear resulting from proper use).
(h) This lease may be assigned and may be terminated by AMCO,
ALLIED Life, AGI, and AGIMC with thirty (30) days written notice.
(i) This lease shall be construed and interpreted under the laws
of the State of Iowa.
2.13 License of Software. AGIS shall license Software to the Licensee
pursuant to the License Agreement effective January 1, 1993 which is
incorporated into this Agreement and is included as Addendum A hereto. AGIS
recognizes that AMCO, the Pool Participants, Motor Club of Iowa Insurance
Company, and other third-party insurance companies which AMCO may enter into
agreements with and AGIS may consent to, will utilize the Software set forth in
Addendum A. In the event of a termination of this Agreement, the License
Agreement will continue in effect in perpetuity.
2.14. Other Services. Any other services provided by AGIS to the
Companies, or any of them, shall be negotiated between AGIS and such company on
such terms and conditions as are mutually agreeable.
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2.15. XXXX Service Rights. AGIS shall have a right of first refusal to
provide MIS to XXXX. Prior to XXXX obtaining MIS from a source other than AGIS,
XXXX shall present its requirements to AGIS in the form of a specifications
sheet which will include a description of the services requested and a pricing
target or range, and AGIS shall within 30 days (i) provide the MIS as specified
by XXXX at the pricing target or within the range or (ii) decline in writing to
provide the MIS. If AGIS declines in writing to provide the MIS, XXXX shall be
entitled to seek and obtain such MIS from whatever source available.
III. PAYMENT FOR SERVICES
3.1. General. The fees described in this Article III may be renegotiated
in the future at the agreement of the affected parties. The amount of the
renegotiated fee to be paid by any of the Companies shall reflect any market
prices charged by AGIS under agreements with, or available to the Companies
from, unaffiliated third parties for similar services; provided, however, that
the services requested and provided to the Companies under this Agreement and
contracted to or available from unaffiliated third-party purchasers of AGIS'
services are reasonably comparable. If there are no unaffiliated third-party
comparisons available, the fees shall be renegotiated on an arm's length basis.
3.2. Fees. The Companies shall pay the fees set forth in Addendum B to
this Agreement.
IV. TERM, TERMINATION, AND CHANGE OF CONTROL
4.1. Term and Termination. This Agreement shall be effective on January
1, 1995 and shall continue in effect until December 31, 2004, and shall continue
thereafter unless prior to December 31, 2002, a party to this Agreement delivers
to the other parties a written notice that such party intends to cease
participation and terminate the Agreement as to it on December 31, 2004 or as of
a specified date thereafter. This Agreement may be terminated by a party to this
Agreement, as to such party's participation in the Agreement, effective after
December 31, 2004, provided that such party has given written notice of
termination to the others at least two (2) years prior to the proposed
termination date. In the event of a termination of this Agreement, the License
Agreement will continue in effect in perpetuity.
4.2. Change of Control of ALFC. In the event of a Change of Control (as
hereinafter defined in this section) of ALFC, either Mutual or AGI may, in its
sole discretion, at any time after such Change of Control: (i) terminate the
Intercompany Operating Agreement ("IOA Agreement") and this Agreement upon six
(6) months notice to ALFC; (ii) extend the term of the IOA Agreement and this
Agreement for up to ten (10) additional years beyond December 31, 2004 upon six
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(6) months notice to ALFC; or (iii) allow such agreements to continue in effect.
"Change of Control" for purposes of this section shall mean an event whereby a
person, group, or entity that is not affiliated with ALFC or Mutual acquires the
ownership of 50% or more of the voting stock of ALFC. A person, group, or entity
"affiliated" with ALFC or Mutual shall mean a person, group, or entity that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with ALFC or Mutual.
4.3 Change of Control of AGI.
(a) In the event of a Change of Control (as hereinafter defined in this
section) of AGI, Mutual may, in its sole discretion, at any time after such
Change of Control: (i) terminate all three of the Pooling Agreement, IOA
Agreement, and this Agreement upon six (6) months notice to AGI; (ii) extend the
term of the Pooling Agreement, IOA Agreement, and this Agreement for up to ten
(10) additional years beyond December 31, 2004 upon six (6) months notice to
AGI; or (iii) allow such agreements to continue in effect. "Change of Control"
for purposes of this section shall mean an event whereby a person, group, or
entity that is not affiliated with AGI or Mutual acquires the ownership of 50%
or more of the voting stock of AGI. A person, group, or entity "affiliated" with
AGI or Mutual shall mean a person, group, or entity that directly or indirectly
through one or more intermediaries controls, is controlled by, or is under
common control with AGI or Mutual.
(b) In the event of a Change of Control (as hereinafter defined in this
section) of AGI, ALFC may, in its sole discretion, at any time after such Change
of Control: (i) terminate both the IOA Agreement and this Agreement upon six (6)
months notice to AGI; (ii) extend the term of the IOA Agreement and this
Agreement for up to ten (10) additional years beyond December 31, 2004 upon six
(6) months notice to AGI; or (iii) allow such agreements to continue in effect.
"Change of Control" for purposes of this section shall mean an event whereby a
person, group, or entity that is not affiliated with AGI or Mutual acquires the
ownership of 50% or more of the voting stock of AGI. A person, group, or entity
"affiliated" with AGI or Mutual shall mean a person, group, or entity that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with AGI or Mutual.
V. DISPUTE RESOLUTION
5.1. AGI and Its Subsidiaries. Any controversy, claim, or dispute
arising out of or relating to this Agreement, or breach thereof, among or
between AGI and Its Subsidiaries shall be resolved by AGI's Board of Directors,
the decision of which shall be binding.
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5.2. Mutual and Its Subsidiaries. Any controversy, claim, or dispute
arising out of or relating to this Agreement, or breach thereof, among or
between Mutual and Its Subsidiaries shall be resolved by Mutual's Board of
Directors, the decision of which shall be binding.
5.3. ALFC and Its Subsidiaries. Any controversy, claim, or dispute
arising out of or relating to this Agreement, or breach thereof, among or
between ALFC and Its Subsidiaries shall be resolved by ALFC's Board of
Directors, the decision of which shall be binding.
5.4. All Other Disputes. All other disputes under this Agreement shall
be referred for resolution to the Coordinating Committee. Each of the
coordinating committees of Mutual, AGI, and ALFC (a) has the right to
participate in each and every Coordinating Committee deliberation unless it
elects to abstain therefrom and (b) has one vote which shall be cast for or
against any such decision unless it elects to abstain. Each such coordinating
committee shall be comprised of two persons, one of whom shall constitute a
quorum for the transaction of any business. All decisions of the Coordinating
Committee must be unanimous, except for abstentions. All decisions of the
Coordinating Committee are binding on the parties hereto.
5.5. Arbitration. If a controversy, claim, or dispute cannot be resolved
by the Coordinating Committee pursuant to Section 5.4, then it will be submitted
to arbitration as set forth hereafter.
(a) Consent to Arbitration. Each party to this Agreement hereby
consents and agrees that any dispute between the parties hereto with respect to
the interpretation, performance, or breach of any of the terms of this Agreement
or the transactions contemplated hereby which cannot be resolved by the
Coordinating Committee shall be referred to arbitration conducted in accordance
with the rules and procedures of the American Arbitration Association ("AAA"),
upon written request of the disputing party hereto delivered to the party with
which it has a dispute. Within thirty (30) days of the delivery of such written
notice, each party involved shall nominate an AAA-licensed arbitrator (the
"Party Arbitrators"). Within thirty (30) days of their nomination, if there are
two Party Arbitrators, the Party Arbitrators shall select a third AAA-licensed
arbitrator (the "Third-Arbitrator") and shall give the parties hereto written
notice of such choice. If there are three parties to the dispute and each party
selects a Party Arbitrator, the three Party Arbitrators selected shall
constitute the Arbitrators without further selection. If there are more than
three parties to the dispute, the parties to this Agreement agree that Mutual
shall represent Mutual and Its Subsidiaries, ALFC shall represent ALFC and Its
Subsidiaries, and AGI shall represent AGI and Its Subsidiaries.
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(b) Authority of Arbitrators. The arbitrators shall be empowered
to decide all issues submitted to arbitration using principles of law and equity
and, if required, by application of any customary practices in the insurance and
reinsurance industries. The arbitrators shall be relieved of all judicial
formalities and shall not be required to follow any rules of evidence except as
such rules may be imposed on arbitration proceedings conducted in accordance
with the laws of the State of Iowa, but the arbitrators shall attempt to enforce
the intents and purposes of this Agreement to the extent practicable and in
accordance with Iowa law. The decision of a majority of the arbitrators shall be
final and binding on each of the parties to the arbitration proceeding.
(c) Expenses; Location. Each party to the dispute shall bear the
expenses of its respective Party Arbitrator. If only two parties are involved in
the arbitration, the involved parties shall jointly share all other expenses of
the arbitration proceeding and the expenses of the Third Arbitrator. The
arbitration proceeding shall take place at Des Moines, Iowa unless another
location is mutually agreed upon by the parties. The arbitration proceeding
shall be governed by the laws of the State of Iowa. The parties hereto hereby
agree that any information respecting any matters submitted to arbitration in
accordance with the foregoing or any aspect of the arbitration proceeding itself
shall be treated as confidential and will not be disclosed to anyone not
employed or acting on behalf of a party hereto in connection with such
arbitration or used at any time in any manner that is adverse to the interests
of either party hereto but, in any such case, such information may be disclosed
if such disclosure is made in connection with either party's prosecution or
defense of any legal proceedings or if such disclosure is required pursuant to a
subpoena or other legal order issued by any judicial or regulatory body or is
otherwise required by law.
(d) Restriction. Anything set forth herein to the contrary
notwithstanding, with respect to any issue to be determined by arbitration, each
of the parties to the arbitration proceeding shall submit in writing to the
arbitrators the party's proposed resolution of such issue. The arbitrators shall
be constrained in their decision relating to such issue to select only between
the proposed resolutions of the parties, and the arbitrators shall have no
discretion to fashion any compromise or other resolution of the issue submitted
for arbitration.
VI. CONFIDENTIAL INFORMATION AND TRADE SECRETS
6.1. Obligation to Keep Confidential.
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(a) Each party to this Agreement shall keep confidential, except
as the other party or parties may otherwise consent in writing, and, except for
the other parties' benefit, not disclose or make any use of at any time and for
any purpose whatsoever, any trade secrets, confidential information, knowledge,
data, trademarks or trade names, or other information of any of the Companies to
their products, know-how, designs, customer lists, business plans, marketing
plans and strategies, pricing strategies, or other subject matter pertaining to
any business of the Companies or any of their clients, customers, consultants,
licensees, or affiliates, which the party has obtained or may obtain, or
otherwise acquire during the course of contacts, discussions, negotiation, or
agreement with any of the other parties, except as herein provided (hereafter,
collectively, "Confidential Information"). No party shall deliver, reproduce or
in any way allow any Confidential Information of the other parties or any
documentation relating thereto, to be delivered to or used by any third parties
without specific written direction or consent of a duly authorized officer of
the other party.
(b) Upon termination of this Agreement for any reason whatsoever
each party shall promptly surrender and deliver to each other party all records,
materials, equipment, drawings, documents, data, and all Confidential
Information of the other parties and shall not retain any description containing
or pertaining to any Confidential Information of the other parties, unless
otherwise consented to in writing by a duly authorized officer of the other
party.
VII. MISCELLANEOUS
7.1. Assignment. This Agreement, including any or all rights and
obligations hereunder, shall not be assigned by any of the parties to any third
party without the prior written consent of all of the other parties. Except as
otherwise provided in this Agreement, the obligations and rights of the parties
shall be binding upon and inure to the benefit of any assignee, transferee,
successor, or receiver of each of the parties.
7.2 Waiver; Remedies. No delay or omission of any party to this
Agreement to exercise any right or power hereunder shall impair such right or
power or be a waiver of any default or an acquiescence therein; and any single
or partial exercise of any such right or power shall not preclude other or
further exercise thereof or the exercise of any other right. In addition to any
rights granted herein, the parties hereto shall have and may exercise any and
all rights and remedies now or hereafter provided by law except as may be
limited by Section V of this Agreement.
7.3 Permissive Release of Confidential Information. Notwithstanding the
provisions of Section VI of this Agreement, any Confidential Information may be
used in connection with any arbitration relating to the transactions
contemplated by this Agreement and such information may be disclosed if such
disclosure is made in connection with the parties' prosecution or defense of any
128
legal proceedings or if such disclosure is required pursuant to a subpoena or
other legal order issued by any judicial or regulatory body or is otherwise
required by law.
7.4 Notices. All notices, requests, demands, and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or if mailed by certified or registered mail (return
receipt requested) to the party at its address as set forth on the signature
page of this Agreement. Any notice given as provided in this Section 7.4, if
given personally, shall be effective upon delivery, or if given by certified or
registered mail, shall be effective three days after deposit in the mail. Any
party hereto may change the address at which it is to be given notice by giving
notice to the other party as provided in this Section 7.4.
7.5 Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of Iowa and shall be construed and interpreted under
the laws of such state applicable to contracts made and to be performed entirely
within such state.
7.6 Enforceability. If any one or more of the covenants, agreements,
provisions, or other terms of this Agreement shall be for any reason whatsoever
determined to be invalid, then such terms shall be deemed severable from the
remaining terms of this Agreement and shall in no way affect the validity or
enforceability of the other terms of this Agreement and such invalid terms shall
be replaced by valid terms bearing the closest possible similarity in substance
so that the intentions and purposes being the basis of this Agreement could be
enforced to the greatest extent permitted by law.
7.7 Survival of Representations, Warranties, and Covenants. All
covenants, agreements, representations, and warranties made in this Agreement by
any of the parties hereto, including but not limited to, the indemnification
provisions set forth herein, shall be effective on the effective date hereof and
thereafter.
7.8 Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
7.9 Headings. The headings in the sections and subsections of this
Agreement are inserted for convenience only and shall not constitute a part
hereof.
7.10 Entire Agreement. This Agreement, including the schedules and
addenda referred to herein and any documents executed by the parties
simultaneously herewith constitute the entire understanding and agreement of the
parties hereto and supersede all other prior agreements and understandings,
written or oral, between the parties with respect to the transactions
contemplated herein. Provided, however, the foregoing shall not operate or be
129
construed to prohibit proof of prior understandings and agreements between or
among the parties to the extent necessary to properly construe or interpret this
Agreement.
7.11 Amendments. Any changes to this Agreement and any further
obligations of the parties to each other must be in writing and executed by
their respective duly authorized officers.
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Management Information Services Agreement to be signed by their
duly-authorized officers all as of the date and year first written above.
ALLIED Mutual Insurance Company ALLIED Group, Inc.
000 0xx Xxx. 000 0xx Xxx.
Xxx Xxxxxx, XX 00000-0000 Xxx Xxxxxx, XX 00000-0000
By:S/S Xxxxxxx X. Xxxxxxxx By:S/S Xxxxx X. Xxxxxxx
------------------------------- -------------------------------
Title: President Title: President
--------------------------- ---------------------------
AMCO Insurance Company ALLIED General Agency Company
000 0xx Xxxxxx 000 0xx Xxx.
Xxx Xxxxxx, XX 00000-0000 Xxx Xxxxxx, XX 00000-0000
By:S/S Xxxxxxx X. Xxxxxxxx By:S/S Xxxxxx X. Fever
------------------------------- -------------------------------
Title: President Title: Vice President
--------------------------- ---------------------------
ALLIED Life Financial ALLIED Group Leasing Corporation
Corporation
000 0xx Xxx. 000 0xx Xxx.
Xxx Xxxxxx, XX 00000-0000 Xxx Xxxxxx, XX 00000-0000
By:S/S Xxxxxx X. Xxxxx By:S/S Xxxxx X. Xxxxxxx
------------------------------- -------------------------------
Title: President Title: President
--------------------------- ---------------------------
ALLIED Group Mortgage Company ALLIED Life Insurance Company
0000 00xx Xx. 000 0xx Xxx.
Xxxx Xxx Xxxxxx, XX 00000-0000 Xxx Xxxxxx, XX 00000-0000
By:S/S Xxxxxxx X. Xxxxx By:S/S Xxxxxx X. Xxxxx
------------------------------- -------------------------------
Title: President Title: President
--------------------------- ---------------------------
ALLIED Group Merchant Banking ALLIED Group Insurance
Corporation Marketing Company
000 0xx Xxx. 000 0xx Xxx.
Xxx Xxxxxx, XX 00000-0000 Xxx Xxxxxx, XX 00000-0000
By:S/S Xxxx X. XxXxxxxxxxx By:S/S Xxxxxxx X. Xxxxxxxxx
------------------------------- -------------------------------
Title: President Title: President
--------------------------- ---------------------------
ALLIED Group Information ALLIED Life Brokerage Agency
Systems, Inc.
000 0xx Xxx. 000 0xx Xxx.
Xxx Xxxxxx, XX 00000-0000 Xxx Xxxxxx, XX 00000-0000
By:S/S Xxx X. Xxxxx By:S/S Xxxxxx X. Xxxxx
------------------------------- -------------------------------
Title: President Title: President
--------------------------- ---------------------------
131
ADDENDUM A
LICENSE OF SOFTWARE
This Computer Software License Agreement ("Agreement") between ALLIED Group
Information Systems, Inc. ("AGIS") and AMCO Insurance Company ("Licensee") shall
be effective January 1, 1993.
1. Definitions.
1.1. "Distribution" or "to distribute" means any act or failure to act
by Licensee, its employees, or its agents which violates accepted business
practices for protecting the confidentiality of computer software and which
results, directly or indirectly, in the possession of the Software Product by
any person(s) or entity(ies) other than AGIS or Licensee for any purpose other
than Licensee's business operations.
1.2. "Documentation" means the written description of a computer program
in the form of a manual(s) which shall accompany the Program in order to assist
the Licensee.
1.3. "Mainframe Computer" means a large computer occupying a specially
air-conditioned room and supporting typically 100-500 users at a time.
1.4. "Object Code" means the Program after compilation or interpretation
and in a form understandable only to a computer unless disassembled.
1.5. "Personal Computer" means a computer designed to be used by only
one person.
1.6. "Program" means the computer programs and modules thereof in Source
Code. A "computer program" is an organized set of instructions developed for the
purpose of causing a computer to accomplish a desired result or outcome by
acting on data.
1.7. "Reproduction" or "to reproduce" means to make copies of the Source
or Object Code version of the Software Product for purposes of "distribution".
Reproduction shall include the making of copies of the Software Product in any
form currently used in the industry or in any form which may be developed.
1.8. "Software Product" means the Program(s) listed in Paragraph 3 and
the Documentation, collectively, in the form in which it is distributed to
Licensee.
1.9. "Source Code" means the Program when written in human
understandable form in a higher level computer language.
1.10. All terms used herein are defined in the Management Information
Services Agreement dated August 25, 1993 ("MIS Agreement"), and shall have the
meaning therein attributed to them unless they are defined otherwise herein,
whether or not the MIS Agreement has been terminated.
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2. Grant of License. AGIS hereby grants to Licensee a non-exclusive right to use
the Software Product specifically set forth in Paragraph 3 herein for the
purposes of Licensee's business operations. As used in this Agreement,
Licensee's "business operations" shall mean the corporate business activities of
Licensee and its affiliates inclusive of its arrangement with Motor Club of Iowa
Insurance Company and other insurance companies which Licensee and AGIS agree in
writing shall be allowed access to the Software Product. Such business
operations shall expressly include use of the Software Product by Pool
Participants' insurance agents via the AMANDA+ program and by Licensee in its
position as administrator of the Pooling Agreement. AGIS and Licensee
acknowledge that full and adequate consideration for the granting of the license
has been provided to AGIS pursuant to the Asset Transfer Agreement dated
December 31, 1986, the Management Information Services Agreement dated December
31, 1986 (as amended from time to time), and among other things, the assistance
of Pool Participants' employees to AGIS programmers in the development of the
Software Product licensed hereunder. AGIS and Licensee further acknowledge that
it was the intent of the parties to the Asset Transfer Agreement and the
Management Information Services Agreement, both dated December 31, 1986, that
AGIS provide a perpetual license of the Software Product to AMCO and the other
Pool Participants.
3. Software Product Licensed. The Software Product referenced in said Agreement
shall consist of the following Programs:
ABC DAILY EDIT AND BALANCE MICROFILM INDEXING
ACCOUNTING REPORTING DIRECT MARKETING MOTOR VEHICLE REPORT
SYSTEM ACCOUNT PAK CONTROL
ADVICE/REVIEW DIVIDENDS PAYROLL
AGENCY PROCESSING GUIDES DRAFT LOG SYSTEM PERSONAL AUTO
AGENCY PRODUCTION DRAFT RECONCILIATION PERSONNEL
AGENTS ACCOUNT CURRENT DWELLING FIRE PLANNING DEPARTMENT
AGENTS CONTEST ENDORSEMENT TEXT FILE PLEASURE BOATOWNERS
AGENTS MASTERFILE EXPENSE REPORTING POLICY ENTRY
AGENTS STATEMENT AND EXPERIENCE RATING POLICY EXPIRATIONS
AGING SYSTEM POLICY REGISTER
ALPHA SEARCH EXPIRATIONS PROCESS CASH/SUSPENSE
XXXXXX PLUS FARM PROCESSING SUSPENSE AND
ASSIGNED RISK FLEX BILLING CASH PRODUCTIVITY
BALANCING SYSTEM FLEXIBLE BENEFITS INFORMATION DEPARTMENT
BONDS FORM LETTER GENERATOR PROFIT SHARE
BUREAU AND STATISTICAL FORMATION PROMPTING
BUSINESSOWNERS FORMS AND PRINTING RECORDS MANAGEMENT
CASH CONCENTRATION FUND FREEDOM PACKAGE RECREATIONAL VEHICLE
CASH DISBURSEMENT GENERAL LIABILITY REINSURANCE
CBI GROUP 1 REMINDER/REMARKS
CERTIFICATE SYSTEM HOMEOWNERS SAFETY MANAGEMENT
CHECK RECONCILIATION HUMAN RESOURCES STATISTIC CLASS MASTER
CLAIMS REPORTS INLAND MARINE STATUTORY AND FINANCIAL
CLAIMS INPUT/OUTPUT MODULES SURETY BOND BILLING
CODE CARD ENTRY INTERNAL REVENUE SYSM
CODING MANUAL AND BUREAU INVENTORY AND SUPPLY TABLE SYSTEM
COMMERCIAL AUTO MANAGEMENT EXPERIENCE TELEMARKETING
COMMERCIAL PROPERTY REPORTS UNDERWRITING
CORRESPONDENCE SYSTEM MANUAL POLICY XXXXXXX'X COMPENSATION
CRIME PROCESSING ASSIGNED RISK
CROP SYSTEM ENTRY XXXX XX PROGRAMS
MARKETING REPORTING
MCIIC
133
Licensee will be provided the aforementioned Software Product for use on
both the Mainframe Computer and Personal Computer. Licensee will be provided the
Source Code for the Mainframe Computer and the Object Code for the Personal
Computer.
4. Updates, Corrections, Modifications. AGIS shall provide Licensee with the
correction, modification, improvement, enhancement, upgrade, and update of the
Software Product in consideration for payment of the Annual Product
Support/Maintenance Fee of $250,000 on the first business day of each year in
order to obtain all enhancements and upgrades made to the Software Product for
that year.
5. Taxes. In addition to the payments provided for herein, Licensee shall pay
any excise, sales, use, privilege, or other similar taxes levied or based upon
payments made pursuant to this Agreement.
6. AGIS' Warranties. AGIS warrants that it is the sole owner of all rights to
the Software Product and has full and unrestricted authority to copyright it and
to enter into this Agreement, that the Software Product is an original work, and
that it has not previously entered into a contract involving this work which
would prohibit this Agreement. AGIS warrants further that the Software Product
has not been assigned, transferred, or otherwise encumbered, that the Software
Product does not infringe upon any copyright, patent, or trade secret of any
third party, and that the Programs reasonably conform to Documentation. All
warranties set forth herein shall be null and void in the event Licensee makes
unauthorized use of or an unauthorized modification to the Software Product. THE
WARRANTY PROVIDED HEREIN IS IN LIEU OF ANY AND ALL WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
7. Limitation of Liability. AGIS will defend, indemnify, and hold Licensee
harmless against all claims, costs, damages, and expenses, including attorney's
fees, that Licensee may sustain or incur by reason of an infringement or other
similar violation by the Software Product of any copyright, patent, or
trademark. AGIS and Licensee agree to notify each other promptly of any third
party claim and to fully cooperate in the defense thereof. Notwithstanding the
foregoing, it is expressly agreed and understood that AGIS shall not be liable
for any direct, indirect, incidental, consequential, or similar damages or for
lost data or profits to Licensee or any other entity or person which arise from
Licensee's use of the Software Product. Licensee shall indemnify and hold AGIS
harmless against any such damages, including attorney's fees, which arise from
Licensee's use of the Software Product. Licensee further acknowledges and agrees
that AGIS' liability to Licensee under this Agreement shall not exceed and shall
be limited to, regardless of Licensee's damage or injury, the total amount
received by AGIS under this Agreement.
8. Prohibited Use. Licensee agrees that it shall not create software that
emulates the functionality of the Software Product. Licensee further agrees that
it shall not reverse engineer the Software Product by decompilation and
134
disassembly. It is expressly understood and agreed that the reproduction or
distribution of the Software Product, Source Code, Object Code, or any copy
thereof by Licensee is strictly prohibited at any time.
9. Copying. Licensee may copy the Software Product or any part thereof at
Licensee's cost for the sole purpose of Licensee's business operations and
disaster recovery; provided, however, that Licensee shall have sole
responsibility for insuring that no distribution of any such copy occurs. All
copies shall display all copyright notices and be labeled externally as the
property of AGIS. The use of any copies is subject to the terms and conditions
of this Agreement. Licensee shall keep an accurate and complete record of all
such copies made.
10. Use with Multiple Computers or Terminals. Licensee may use the Software
Product on any computer(s) or terminals it deems necessary. Licensee shall have
the right to make back-up copies of the Mainframe Computer Source Code and any
number of copies of the Personal Computer Object Code and Documentation, if any.
11. Third-Party Processing. It is expressly understood and agreed that Licensee
shall not use the Software Product for any transaction which does not involve
its business operations. It is further expressly understood and agreed that
Licensee's business operations as described in Paragraph 2 herein shall not
include, without AGIS' express written consent, any use of the Software Product
for the purpose of any transaction (1) undertaken for a fee or other
consideration which is not contemplated herein or (2) which is not reasonably
related to Licensee's business operations.
12. Proprietary Rights and Nondisclosure. Licensee hereby acknowledges the
proprietary status of the Software Product, including, but not limited to, trade
secret, copyright and trademark interests. The Software Product embodies
substantial creative efforts and contains trade secrets comprised of
confidential information, ideas, and expressions, including, but not limited to,
specific design and structure of the individual Programs. Access to the Software
Product by Licensee employees and agents shall be limited to a need-to-know
basis, and Licensee shall use reasonable means, in any event not less than that
used to protect Licensee's own proprietary materials, to safeguard the
confidential status of the Software Product. Licensee acknowledges that
unauthorized disclosure of the Source Code will cause material damage to AGIS.
Licensee recognizes that a substantial piracy problem exists in the software
industry. Licensee shall notify AGIS of any instance of illegal copying of AGIS
products which comes to its attention and shall assist in prosecuting any
infringers.
13. Source Code. AGIS shall make available to Licensee without charge the Source
Code for the Software Product set forth in Paragraph 3 herein.
14. Term. This Agreement shall survive the termination of the MIS Agreement and
continue in perpetuity.
135
15. Amendments. Any changes to this Agreement and further obligations of the
parties to each other must be in writing and executed by their respective duly
authorized officers.
16. Arbitration.
(a) Consent to Arbitration. Each party to this Agreement hereby consents
and agrees that any dispute between the parties hereto with respect to the
interpretation, performance, or breach of any of the terms of this Agreement or
the transactions contemplated hereby which cannot be resolved by the
Coordinating Committee shall be referred to arbitration conducted in accordance
with the rules and procedures of the American Arbitration Association ("AAA"),
upon written request of either party hereto delivered to the other party. Within
thirty (30) days of the delivery of such written notice, each party involved
shall nominate an AAA-licensed arbitrator (the "Party Arbitrators"). Within
thirty (30) days of their nomination, if there are two Party Arbitrators, the
Party Arbitrators shall select a third AAA-licensed arbitrator (the
"Third-Arbitrator") and shall give the parties hereto written notice of such
choice. If each party selects a Party Arbitrator, the three Party Arbitrators
selected shall constitute the Arbitrators without further selection.
(b) Authority of Arbitrators. The arbitrators shall be empowered to
decide all issues submitted to arbitration using principles of law and equity
and, if required, by application of any customary practices in the insurance and
reinsurance industries. The arbitrators shall be relieved of all judicial
formalities and shall not be required to follow any rules of evidence except as
such rules may be imposed on arbitration proceedings conducted in accordance
with the laws of the State of Iowa, but the arbitrators shall attempt to enforce
the intents and purposes of this Agreement to the extent practicable and in
accordance with Iowa law. The decision of a majority of the arbitrators shall be
final and binding on each of the parties to the arbitration proceeding.
(c) Expenses; Location. Each party to the dispute shall bear the
expenses of its respective Party Arbitrator and shall jointly share all other
expenses of the arbitration proceeding and the expenses of the Third Arbitrator.
The arbitration proceeding shall take place at Des Moines, Iowa unless another
location is mutually agreed upon by the parties. The arbitration proceeding
shall be governed by the laws of the State of Iowa. The parties hereto hereby
agree that any information respecting any matters submitted to arbitration in
accordance with the foregoing or any aspect of the arbitration proceeding itself
shall be treated as confidential and will not be disclosed to anyone not
employed or acting on behalf of a party hereto in connection with such
arbitration or used at any time in any manner that is adverse to the interests
of either party hereto but, in any such case, such information may be disclosed
if such disclosure is made in connection with either party's prosecution or
defense of any legal proceedings or if such disclosure is required pursuant to a
subpoena or other legal order issued by any judicial or regulatory body or is
otherwise required by law.
136
(d) Restriction. Anything set forth herein to the contrary
notwithstanding, with respect to any issue to be determined by arbitration each
of the parties to the arbitration proceeding shall submit in writing to the
arbitrators the party's proposed resolution of such issue. The arbitrators shall
be constrained in their decision relating to such issue to select only between
the proposed resolutions of the parties, and the arbitrators shall have no
discretion to fashion any compromise or other resolution of the issue submitted
for arbitration.
17. Assignment. This Agreement, including any or all rights and obligations
hereunder, shall not be assigned by any of the parties to any third party
without the prior written consent of all of the other party. Except as otherwise
provided in this Agreement, the obligations and rights of the parties shall be
binding upon and inure to the benefit of any assignee, transferee, successor, or
receiver of each of the parties.
18. Waiver; Remedies. No delay or omission of any party to this Agreement to
exercise any right or power hereunder shall impair such right or power or be a
waiver of any default or an acquiescence therein; and any single or partial
exercise of any such right or power shall not preclude other or further exercise
thereof or the exercise of any other right. In addition to any rights granted
herein, the parties hereto shall have and may exercise any and all rights and
remedies now or hereafter provided by law except as may be limited by Paragraph
16 of this Agreement.
19. Permissive Release of Confidential Information. Notwithstanding the
provisions of Paragraph 13 of this Agreement, any proprietary information may be
used in connection with any arbitration relating to the transactions
contemplated by this Agreement and such information may be disclosed if such
disclosure is made in connection with the parties' prosecution or defense of any
legal proceedings or if such disclosure is required pursuant to a subpoena or
other legal order issued by any judicial or regulatory body or is otherwise
required by law.
20. Notices. All notices, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally or if mailed by certified or registered mail (return receipt
requested) to ALLIED Group Information Systems at 0000 000xx Xxxxxx, Xxxxxxxxx,
Xxxx 00000-0000 and to AMCO Insurance Company at 000 0xx Xxxxxx, Xxx Xxxxxx,
Xxxx 00000-0000. Any notice given as provided in this Paragraph 20, if given
personally, shall be effective upon delivery, or if given by certified or
registered mail, shall be effective three days after deposit in the mail. Any
party hereto may change the address at which it is to be given notice by giving
notice to the other party as provided in this Paragraph 20.
21. Governing Law. This Agreement shall be deemed to be a contract made under
the laws of the State of Iowa and shall be construed and interpreted under the
laws of such state applicable to contracts made and to be performed entirely
within such state.
22. Enforceability. If any one or more of the covenants, agreements, provisions,
or other terms of this Agreement shall be for any reason whatsoever determined
137
to be invalid, then such terms shall be deemed severable from the remaining
terms of this Agreement and shall in no way affect the validity or
enforceability of the other terms of this Agreement and such invalid terms shall
be replaced by valid terms bearing the closest possible similarity in substance
so that the intentions and purposes being the basis of this Agreement could be
enforced to the greatest extent permitted by law.
23. Survival of Representations, Warranties and Covenants. All covenants,
representations, and warranties made in this Agreement by any of the parties
hereto shall be effective on the effective date hereof and thereafter.
24. Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
25. Headings. The headings in the sections and subsections of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
26. Entire Agreement. This Agreement, including the schedules and addenda
referred to herein and any documents executed by the parties simultaneously
herewith constitute the entire understanding and agreement of the parties hereto
and supersede all other prior agreements and understandings, written or oral,
between the parties with respect to the transaction contemplated herein.
Provided, however, the foregoing shall not operate or be construed to prohibit
proof of prior understandings and agreements between or among the parties to the
extent necessary to properly construe or interpret this Agreement.
Agreed to and effective as of the date set forth above.
ALLIED Group Information AMCO Insurance Company
Systems, Inc.
By:___________________________ By____________________________
Title:________________________ Title:________________________
138
ADDENDUM B
I. AMCO. AMCO, as administrator of the Pooling Agreement, shall reimburse
AGIS for its Net Operating Costs in exchange for AGIS providing
AMCO the services under this Agreement. AGIS' Net Operating Costs, as
used in this Agreement, is the difference between all costs AGIS incurs
on a monthly basis less the sum of income AGIS accrues on a monthly
basis from providing services to all companies other than AMCO as
administrator of the Pooling Agreement. In order to reimburse AGIS for
its Net Operating Costs, AMCO will forward to AGIS $1,000,000 on the
first of each month and $600,000 on the fifteenth of each month. At the
end of each month, AGIS will either xxxx AMCO if the amount forwarded
does not cover the Net Operating Costs or credit AMCO if the amount
forwarded exceeds the Net Operating Costs. AMCO will promptly pay AGIS
any xxxx it incurs hereunder and AGIS will promptly pay AMCO any credit
it incurs hereunder. AMCO shall incur no other charges for services
under this Agreement.
II. ALLIED Life. ALLIED Life shall pay AGIS on a monthly basis fees for
services under this Agreement in accordance with the following:
(a) $37.50 per hour for Programming/Development time and
Methods/Procedures time.
(b) For the services provided under Section 2.12 ("Equipment
Leasing"), lease payments shall be made by ALLIED Life monthly
upon receipt of a xxxx from AGIS. The interest rate used to
calculate the lease payments shall be 2 basis points over the
T-xxxx rate adjusted quarterly. At the expiration of the lease
term for each item of Equipment, ALLIED Life may elect to continue
using the Equipment at no charge.
(c) ALLIED Life shall also pay fees in accordance with Sections VI
through X of this Addendum.
(d) ALLIED Life shall reimburse AGIS for the actual costs AGIS incurs
on a monthly basis for providing ALLIED Life the services provided
under Sections 2.1 ("General MIS"), 2.2 ("PC Support"), 2.7 (a)
("Printing--Forms and Reports"), and 2.8 ("Policy Assembly"). In
order to reimburse AGIS for the cost of these services, ALLIED
Life will forward $56,250 at the end of each month as an
estimation of the costs of providing the services for that month.
(e) At the end of the calendar year, AGIS will calculate its actual
cost of providing these services and compare it to the monthly
payments forwarded to AGIS for the services by ALLIED Life. If the
total actual costs exceed the total monthly payments made, ALLIED
Life will promptly pay the difference to AGIS. If the total actual
costs are less than the total monthly payments made, AGIS will
promptly refund the difference to ALLIED Life.
139
The aforementioned fees shall be renegotiated by ALLIED Life and AGIS
each calendar year. If ALLIED Life and AGIS are unable to agree on an
annual fee for the next calendar year by December 15th of each year, the
calculation of a reasonable annual fee for the next calendar year shall
be submitted to the Coordinating Committee for resolution.
III. AGI Human Resources. For the services provided by AGIS to AGI's human
resources department under Sections 2.1 ("General MIS"), 2.2 ("PC
Support"), and 2.7(a) ("Printing--Forms and Reports"), AGI shall pay to
AGIS $42.00 per hour for Programming/Development time and $40.00 per
hour for Methods/Procedures time. Each year, beginning January 1, 1996,
this hourly rate shall be recalculated based upon estimated costs for
the year in question. Such fees shall be billed and paid monthly. If
applicable, AGI shall also pay fees in accordance with Sections VI
through XI of this Addendum.
IV. AGIMC. AGIMC shall pay AGIS for services under this Agreement in
accordance with the following:
(a) For the services provided under Sections 2.1 ("General MIS") and
2.2 ("PC Support"), AGIMC shall pay to AGIS $42.00 per hour for
Programming/Development time and $40.00 per hour for
Methods/Procedures. Such fees shall be billed and paid monthly.
Each year, beginning January 1, 1996, this hourly rate shall be
recalculated based upon estimated costs for the year in question.
(b) For the services provided under Section 2.12 ("Equipment
Leasing"), lease payments shall be made by AGIMC monthly upon
receipt of a xxxx from AGIS. The interest rate used to calculate
the lease payments shall be adjusted on the first business day of
each quarterly period to a rate equal to 2% over the prime rate on
such day. At the expiration of the lease term for each item of
Equipment, AGIMC may elect to continue using the Equipment at no
charge.
(c) If applicable, AGIMC shall also pay fees in accordance with
Sections VI through XI of this Addendum.
V. Programming. Each of the Companies (except as may be provided elsewhere
for AMCO, ALLIED Life, AGI, and AGIMC) which request that AGIS provide
Programming/Development services shall pay a rate of $52.50 per hour.
Each of the Companies (except for AMCO, ALLIED Life, AGI, and AGIMC)
which request that AGIS provide Methods/Procedures services shall pay
$40.00 per hour. Such fees shall be billed and paid monthly. Each year,
beginning January 1, 1996, this hourly rate shall be recalculated based
upon estimated costs for the year in question.
VI. Typesetting/Other Printing. The Companies which request that AGIS
provide typesetting services in accordance with Section 2.7(b)
("Printing--Typesetting/Other Printing") shall pay a rate of $22.00 per
140
hour. Such fees shall be billed and paid monthly. Any other printing
services shall be provided by AGIS to any of the Companies for a fee to
be negotiated between AGIS and such company in addition to the fees
specified in this Addendum B.
VII. PC Maintenance. If AGIS assists in coordinating third-party vendor
maintenance for the personal computers of any of the Companies, such
Companies agree to pay upon receipt of an invoice from AGIS the
third-party vendor's actual charges as billed to AGIS.
VIII. Postage/Mail Processing. For the services provided under Section 2.9,
the Companies which have offices located in Polk County, State of Iowa,
shall pay AGIS for mail processing as follows:
(a) the Companies shall reimburse AGIS for the actual cost of postage
utilized,
(b) if AGIS performs any mail inserting services for any of the
Companies, such Companies shall pay AGIS $0.027 per item,
(c) if AGIS performs any proof of mail services for any of the
Companies, such Companies shall pay AGIS $0.051 per item,
(d) if AGIS performs any outgoing mail sorting services for any of the
Companies, such Companies shall pay AGIS $0.027 per item,
(e) if AGIS performs incoming mail sorting services for any of the
Companies, such Companies shall pay AGIS $0.027 per item,
(f) if AGIS performs special handling services in mail processing, it
will be billed at $0.051 per item, and
(g) if AGIS performs remittance processing, it will be billed at $0.10
per item.
The number of items and the fees shall be billed to each of the
Companies utilizing the services and paid by each of them monthly.
IX. Telephone/Communications. The Companies which request that AGIS provide
telephone/communications equipment under Section 2.11 ("Telephone and
Communications") shall pay to AGIS a mutually agreed upon monthly fee
for the equipment. Each of the Companies requesting long-distance
communication services (the "Long-Distance Companies") will pay a
monthly charge based upon the proportion of their actual long distance
minutes to the total actual long distance minutes used by the
Long-Distance Companies overall.
X. Taxes. AGIS shall pay any sales, use, and personal property taxes which
may be due and owing with respect to the Equipment leased or with
141
respect to the services provided under this Agreement. AGIS shall
receive reimbursement from the appropriate Companies for any sales or
use tax paid. AGIS shall be ultimately responsible for any personal
property tax which may be due and owing with respect to the purchase or
ownership of any Equipment leased under this Agreement.
