ADMINISTRATION AGREEMENT between McCamish Systems, L.L.C. and Sun Life Insurance and Annuity Company of New York dated as of April 1, 2007
between
XxXxxxxx
Systems, L.L.C.
and
Sun Life
Insurance and Annuity Company of New York dated as of April 1, 2007
TABLE OF
CONTENTS
8.03 Upon
Termination or Expiration of M Financial's Arrangement with
XxXxxxxx. [INSERT PAGE
NUMBER]
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TABLE OF
EXHIBITS
|
A
|
Interparty
Administration Agreement
|
|
B
|
Carrier
Administration Services
|
|
C
|
Products
|
|
D
|
Performance
Criteria
|
|
E
|
Schedule
of Authorized Personnel
|
|
F
|
Disaster
Recovery Plan
|
|
G
|
Insurance
Coverage
|
|
H
|
State
TPA Laws
|
- -
This
ADMINISTRATION AGREEMENT (this "Agreement") is made and entered into as of the
1st day of April, 2007, by and between XxXxxxxx Systems, L.L.C., a Georgia
limited liability company, having its principal address and place of business at
0000 Xxxxxx Xxxxx Xxxx, Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000 (hereinafter
referred to as "XxXxxxxx"); and Sun Life Insurance and Annuity Company of New
York, a life insurance company registered under the laws of the State of New
York, having its principal place of business at One Sun Life Executive Park,
Xxxxxxxxx Xxxxx, Xxxxxxxxxxxxx 00000 (hereinafter referred to
collectively as "Company").
W I T N E
S S E T H:
WHEREAS, the parties hereto
desire to enter into this Agreement pursuant to which XxXxxxxx, as an
independent contractor, will provide insurance policy administration services to
Company on the terms and conditions hereinafter set forth; and
WHEREAS, XxXxxxxx has entered
into a Master Administration Agreement dated January 1, 2001 pursuant to which
XxXxxxxx agrees with M Financial Holdings Incorporated (“M Financial”) to
provide certain services with respect to insurance products distributed
exclusively through M Financial’s Member Firms (“MAA”); and
WHEREAS, Company has entered
into a Master Agreement, dated April 1, 2007, with M Financial relating to the
Products (hereinafter defined) (“Master Agreement”);
WHEREAS, XxXxxxxx, M Financial
and Company have entered into an Interparty Administration Agreement (the “IAA”)
attached hereto as Exhibit A, setting forth certain remedies related to the
performance by XxXxxxxx of its duties hereunder,
NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth, and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the parties hereto hereby agree
as follows:
1. DEFINITIONS
As used
in this Agreement, the following terms shall have the meaning set
forth:
1.01 Carrier
Administration Services.
"Carrier
Administration Services" means the specific services set forth in Exhibit B
attached hereto.
1.02 Books
and Records.
"Books
and Records" means all books and records in the possession or control of
XxXxxxxx that contain information related to the Policies (defined in
Section 1.06 below), including without limitation, to the extent any of the
following exist: (i) hard copy and microfiche records; (ii) all paper
files; (iii) all electronic images; (iv) all computer data files; (v) all
correspondence between XxXxxxxx and owners of Policies; (vi) administrative
records; (vii) claim records; (viii) sales records; (ix) reinsurance records;
(x) underwriting records: (xi) accounting records and (xii) any documents
specifically identified in Exhibit B; provided, however, that Books and Records
shall not include any of XxXxxxxx'x internal documentation of its own programs,
systems and procedures or any of XxXxxxxx'x books and records which are not
directly related to the Policies.
1.03 Effective
Date.
"Effective
Date" means the date stated in the first paragraph of this
Agreement.
1.04 Initial
Term.
"Initial
Term" means the period commencing on the Effective Date of this Agreement and
ending at 11:59 p.m. on the day prior to the fifth anniversary of the Effective
Date.
1.05 M
Financial.
"M
Financial" means M Financial Holdings Incorporated.
1.06 Policies.
"Policies"
means, collectively, the insurance policies included within one of the Products
and "Policy" means any one of the Policies.
1.07 Products.
"Products"
means the insurance products described in Exhibit C attached hereto and made a
part hereof. A "Product" is limited to a single policy form of an
insurance company. Exhibit C may be amended during the Term by mutual
written agreement of the parties hereto.
2. TERM
This
Agreement shall commence on the Effective Date and shall continue in effect for
the Initial Term; thereafter, this Agreement shall continue in full force and
effect for successive five-year periods until terminated as herein provided,
each such additional five-year period being an "Additional Term" of this
Agreement. The Initial Term and any Additional Terms hereunder are
herein collectively referred to as the "Term."
3. POLICY
ADMINISTRATION
3.01 Carrier
Administration Services.
(a) During
the Term of this Agreement, XxXxxxxx shall perform Carrier Administration
Services for Company as described in Exhibit B.
(b) Company
understands and agrees that it may request that this Agreement, the Carrier
Administration Services as described in Exhibit B or any other exhibit hereto be
modified or that services or procedures related thereto be
modified. The Company agrees that all such requests shall be made
through M Financial and any requests made directly to XxXxxxxx will be referred
to M Financial. Promptly upon receipt of any such request, M
Financial will advise XxXxxxxx of the requested changes or
modifications. XxXxxxxx will provide an analysis of the effort
involved in implementing the requested modification and if XxXxxxxx wishes to
charge a fee for any such modification, XxXxxxxx must advise M Financial of the
proposed expense, and such modification will not be undertaken until M Financial
and XxXxxxxx have agreed upon any such fee.
(c) The
Company shall have the right to make a written request for additional
services. The Company agrees to notify M Financial of the
request. Upon receipt of such request, XxXxxxxx will provide an
analysis of the effort involved in implementing the requested services and the
additional cost, if any, for such services. XxXxxxxx is under no
obligation to provide additional services until the Company and XxXxxxxx reach
mutual agreement on the costs and schedule for the change.
(d) The
parties acknowledge their expectation that Company will direct through M
Financial its instructions regarding XxXxxxxx’x provision of Carrier
Administration Services to the Company. In providing Carrier Administration
Services to the Company and performing its obligations under
Section 3.01(b) of this Agreement, XxXxxxxx shall be entitled to fully rely
upon instructions of M Financial with respect to Carrier Administration Services
and shall have no obligation to inquire whether M Financial is authorized to
give any such instructions. XxXxxxxx shall not be liable to Company
for any loss, cost, damage or expense incurred by any person, nor for any claims
of third parties, including M Financial, arising from any action taken or
omitted by XxXxxxxx to the extent XxXxxxxx can demonstrate that the act or
omission was taken or omitted in good faith in reliance upon the instruction of
M Financial.
(e) Nothing
in this Agreement shall be construed to prevent Company from providing
instructions directly to XxXxxxxx. XxXxxxxx and Company shall
immediately give M Financial notice of any such instructions.
(f) Nothing
in this Agreement shall be construed as creating or acknowledging any agency
relationship between M Financial and Company in connection with Carrier
Administration Services.
(g) In the
event XxXxxxxx should receive conflicting instructions from M Financial and from
Company, XxXxxxxx shall immediately notify both M Financial and Company and may
take no action until M Financial and Company shall have resolved such
conflict.
3.02 Performance
Criteria.
The
manner and method of performing Carrier Administration Services are set forth in
Exhibit D attached hereto.
3.03 Authorized
Personnel.
The representatives of XxXxxxxx and
Company who have authority to make decisions about the Carrier Administration
Services and this Agreement are specified on the attached Exhibit
E. Either party may change its representative on Exhibit E by notice
to the other party. Neither party shall be liable for, and each party
shall be indemnified and held harmless by the other party against, any loss,
cost, damage or expense (including losses, costs, damages or expenses arising
from the claims of M Financial or other third parties) arising from any action
taken or omitted by a party to the extent that party can demonstrate that the
action or omission was taken or omitted in good faith in reliance upon the
instruction of the authorized representative of the other party.
3.04 Records.
(a) During
the Term, XxXxxxxx shall keep true and correct Books and Records relating to the
performance of Carrier Administration Services hereunder. XxXxxxxx
shall deliver the Books and Records and copies thereof to Company, if so
requested by Company, within 30 days upon termination of this Agreement;
provided, however, should Company agree at time of termination of this agreement
that such Books and Records be delivered to M Financial, then XxXxxxxx shall
have no further obligation to deliver such Books and Records to Company
hereunder. Anything herein to the contrary notwithstanding, XxXxxxxx
shall be allowed to make and retain copies of the Books and Records, at its own
expense upon termination of this Agreement subject to the ongoing
confidentiality requirements of Section 7.02 and with the agreement that such
copies will be destroyed when XxXxxxxx no longer has a legitimate business need
for such information. It is acknowledged and agreed that any such
Books and Records may be maintained on magnetic media, electronic media,
microfiche, CD and other non-paper media unless otherwise provided in Exhibit B
or not allowed by law.
(b) Each
party to this Agreement shall maintain, following the termination of this
Agreement for any reason, its Books and Records then in its possession with
respect to business produced under this Agreement for such period of time as may
be required by law.
(c) Upon
five (5) business days' advance notice to XxXxxxxx (or shorter period as may be
required in order to comply with a demand made pursuant to a regulatory inquiry,
provided that notice of such inquiry has been promptly furnished to XxXxxxxx),
Company will have the right under this Agreement to perform on-site inspection
and analyses of the Books and Records in accordance with reasonable procedures
and at reasonable frequencies. At the request of Company, XxXxxxxx
will make available to Company representatives or appropriate regulatory
agencies all reasonably requested Books and Records and access to operating
procedures. Company acknowledges and agrees that any such audits as
contemplated hereunder will be coordinated with M Financial such that, except
for requests from regulatory authorities with jurisdiction over Company or where
Company alleges with particularity and in good faith that there is a breach of a
material duty under Exhibit B, no more than one (1) onsite inspection may
be conducted by Company within any twelve month period.
(d) XxXxxxxx
shall maintain off-site backup of its systems software and data, procedures, and
Books and Records at a remote and secure location and in accordance with
disaster recovery capabilities as outlined in Exhibit F.
4. FEES
AND EXPENSES
The
parties acknowledge that XxXxxxxx'x compensation for the Carrier Administration
Services provided to Company under this Agreement, including reimbursement of
certain expenses incurred by XxXxxxxx, is the responsibility of M Financial
under the MAA, and XxXxxxxx agrees that it will look solely to M Financial for
payment of fees and expenses in respect of such Carrier Administration Services,
other than those fees and expenses under
Section 3.01(c). Company agrees that it is deriving economic
benefit from the Carrier Administration Services provided by
XxXxxxxx.
5. REPRESENTATIONS
AND WARRANTIES OF XXXXXXXX
XxXxxxxx
hereby represents and warrants to Company as follows:
(a) It
is a limited liability company duly organized and existing and in good standing
under the laws of the State of Georgia.
(b) It
is empowered under applicable laws and by its articles of organization and
operating agreement to enter into and perform the services contemplated in this
Agreement.
(c) All
requisite proceedings have been taken to authorize it to enter into and perform
the services contemplated in, and execute and deliver, this
Agreement.
(d) It
has duly executed and delivered this Agreement and neither such execution and
delivery nor the performance by it of any of its obligations under this
Agreement will: (i) violate any provision of its articles of
organization or operating agreement; (ii) result in a violation or breach of, or
constitute a default or an event of default under, any indenture, mortgage, bond
or other contract, license, agreement, permit, instrument or other commitment or
obligation to which it is a party; or (iii) violate any law, rule or regulation
of any governmental body, writ, judgment, injunction or court decree
(collectively, "Laws") applicable to it or its business.
(e) It
has and shall maintain all licenses, permits, registrations and other
governmental approvals necessary or advisable for the performance of its
obligations under this Agreement.
(f) Its
business operations have been conducted in compliance in all material respects
with all Laws applicable to it or its business.
(g) It
has and shall maintain the facilities, equipment and trained personnel necessary
to carry out its duties and obligations under this Agreement.
(h) It
has in place a “business continuation” plan designed to enable it to provide
continued services in the event of a disaster.
(i) The
Carrier Administration Services and software used to provide the Administration
Services do not violate any patent, copyright, trade secret or other property
right of any other party.
6. REPRESENTATIONS
AND WARRANTIES OF COMPANY
Company
hereby represents and warrants to XxXxxxxx as follows:
(a) It
is a stock life insurance company organized and existing and in good standing
under the laws of the State of Delaware.
(b) It
is empowered under the applicable laws and regulations and by its governing
documents to enter into and perform this Agreement.
(c) All
requisite proceedings have been taken to authorize it to enter into and perform
this Agreement.
(d) It
has duly executed and delivered this Agreement and neither such execution and
delivery nor the performance by it of any of its obligations under this
Agreement will: (i) violate any provision of its governing documents; (ii)
result in a violation or breach of, or constitute a default or an event of
default under, any indenture, mortgage, bond or other contract, license,
agreement, permit, instrument or other commitment or obligation to which it is a
party; or (iii) violate any Laws applicable to it or its business.
7. ADDITIONAL
COVENANTS
7.01 Independent
Contractor.
It is
understood and agreed that all Carrier Administration Services performed
hereunder by XxXxxxxx shall be performed for Company by XxXxxxxx in the capacity
of an independent contractor of Company. Nothing contained herein
shall be construed to create between XxXxxxxx and Company a partnership, joint
venture, association or other legal entity or relationship other than that of
independent subcontractor.
7.02 Confidentiality
and Disclosure.
(a) Each
party to this Agreement ("Disclosing Party") may disclose to the other party
("Recipient") certain proprietary and confidential information. “Confidential
Information” may be written, oral, recorded or contained on tape or other
electronic or mechanical media.
(i) Company’s
Confidential Information includes, without limitation, policy and policyholder
information, Company administration rules and procedures, Company customer
lists, prospect lists, contracted broker, agent lists, material related to
policy design, pricing, filings, marketing, sales administration, and systems
information.
(ii) XxXxxxxx’x
Confidential Information is defined as any proprietary systems information,
processes and procedures used in connection with the services performed by
XxXxxxxx.
(iii) Company’s
Confidential Information and XxXxxxxx’x Confidential Information shall jointly
and individually be referred to as “Confidential Information”.
(b) Recipient
agrees:
(i) To keep
secret all Confidential Information of the other party and neither directly nor
indirectly disclose any such Confidential Information to anyone else at any
time, during and after the Term of this Agreement, without prior written consent
of the other party.
(ii) To make
no use of any Confidential Information of the other party and neither directly
or indirectly disclose any such Confidential Information to anyone else at any
time, during and after the Term of this Agreement, without prior written consent
of the other party.
(iii) To return
to the party or, if requested, to destroy, except where prohibited by law or
regulatory requirements, the Confidential Information of the other
party in its possession upon the termination of this Agreement or upon the
request of the other party and to provide to the requesting party a certificate
attesting to such destruction.
(iv) To take
no action with respect to the Confidential Information of the other party that
is inconsistent with the confidential and proprietary nature of such
information.
(c) Disclosing
Party agrees that Recipient shall have no obligation under the provisions of
this Section 7.02 with respect to any Confidential Information
which:
(i) Is now or
hereafter becomes publicly known other than through a breach hereof or other
wrongful act of the Recipient;
(ii) Is
disclosed to Recipient by a third party that Recipient reasonably believes is
entitled to disclose such information without violating any obligation of
confidentiality;
(iii) Is known
by Recipient prior to its receipt of the Confidential Information, without any
obligation of confidentiality with respect thereto;
(iv) Is
disclosed by the Recipient to a third party with the Disclosing Party’s written
consent;
(v) Is
disclosed by the Disclosing Party to a third party without the same or similar
restrictions as set forth herein;
(vi) Is
required to be disclosed by Recipient by a court of competent jurisdiction,
administrative agency or governmental body, or by law, rule or regulation, or by
applicable regulatory or professional standards; provided, however, that the
Recipient shall notify the other party hereto as soon as possible in advance of
disclosure, both orally and in writing, if disclosure is required by this
subsection, and Recipient shall cooperate to give the other party reasonable
opportunity to object and to prosecute or defend its objection; or
(vii) Is
disclosed by Recipient in connection with any judicial or other legal proceeding
involving this Agreement.
(d) Recipient
shall limit access to Confidential Information received from the Disclosing
Party to only those personnel or agents of Recipient who have need of such
access for the performance of any obligation of Recipient under this Agreement
and Recipient shall instruct all such individuals of their obligations under
this agreement.
(e) Recipient
shall use Confidential Information only for purposes of fulfilling its
obligations under this Agreement.
(f) Except as
expressly provided in this Agreement, Disclosing Party grants no license, right
or interest to Recipient under any copyrights, patents, trademarks, trade
secrets or other property rights of Disclosing Party by reason of the disclosure
of the Information.
(g) Each
party acknowledges that some Confidential Information may, under applicable law,
be deemed to be confidential information of third parties (such as natural
persons whose lives are insured under a Policy), and each party agrees to
preserve the confidentiality of all Confidential Information, which under
applicable Law must be treated as confidential. Company agrees that
any Confidential Information provided by Company to XxXxxxxx may be provided to
M Financial, unless Company has advised XxXxxxxx to the contrary.
(h) The
Recipient acknowledges that disclosure of the Confidential Information of the
other party without written permission of such party will cause irreparable
injury to such party. The owner of the Confidential Information will,
therefore, be entitled to injunctive relief against the Recipient upon a
disclosure or threatened disclosure of any Confidential Information without a
requirement that the owner prove irreparable harm or post a
bond. Without limiting the foregoing, the Recipient will advise the
owner immediately in the event that it learns or has reason to believe that any
person who has had access to Confidential Information has violated or intends to
violate the terms of this Agreement, and will reasonably cooperate in seeking
injunctive relief against any such person. The owner of the
Confidential Information will, in addition, be entitled to other such remedies
as may be available to it at law or in equity.
(i) Anything
herein to the contrary notwithstanding, XxXxxxxx may include the name “Sun Life”
on a listing of XxXxxxxx’x clients, including the company logo, provided that
such listing does not state or imply that Company endorses XxXxxxxx or its
services. Otherwise, neither party may advertise or promote itself using the
name, service xxxx or description of the other party without the written consent
of the other party in the case of each such use.
7.03 Privacy
(a) XxXxxxxx
represents and warrants that it has implemented and currently maintains an
information security program designed to effectively protect Company’s
Confidential Information, including, but not limited to customer information,
which program includes administrative, technical, and physical safeguards: (i)
to insure the security and confidentiality of Customer Information: (ii) to
protect against any anticipated threats or hazards to the security or integrity
of such Customer Information; and (iii) to protect against unauthorized access
to or use of Customer Information which could result in substantial harm or
inconvenience to Company or its affiliates, or to customers of any of them.
XxXxxxxx shall ensure that only authorized users shall have access to its
computer systems and only for the purposes authorized by
XxXxxxxx. XxXxxxxx shall immediately notify Company of any known
computer security breaches or material defects in computer security which may
have an adverse affect on Company or on the services to be performed by XxXxxxxx
for Company hereunder.
(b) XxXxxxxx,
at its own expense, shall indemnify and hold harmless Company, its subsidiaries,
affiliates, and assignees, and their directors, officers, employees and agents,
and defend any action brought against same with respect to any claim, loss,
demand, cause of action, debt, or liability, including attorneys’ fees and
punitive damages, to the extent based upon a claim that XxXxxxxx intentionally
or negligently used or disclosed, or caused or permitted to be used or
disclosed, Company Confidential Information, contrary to the terms of this
Agreement; or that XxXxxxxx failed to maintain an information security program
reasonably designed to protect the security and confidentiality of Company
Confidential Information as required by this Agreement; or that XxXxxxxx failed
to comply with the terms of this Agreement regarding Company Confidential
Information; or that XxXxxxxx failed to comply with any of Company’s privacy
policies as outlined in this Agreement, misused any customer data, or violated
any federal, state, provincial and/or local law and/or regulation related to
privacy.
(c) XxXxxxxx
shall advise Company immediately in the event that it learns or has reason to
believe that XxXxxxxx’x information security program has failed or may fail to
protect the confidentiality of Company’s Confidential Information as required by
this Agreement. XxXxxxxx shall advise Company immediately in the
event that it learns or has reason to believe that any of its employees who have
had access to Company Confidential Information have violated or intend to
violate the terms of this Agreement, and will cooperate with Company in
remedying such violation or intended violation, including but not limited to
cooperating in Company’s seeking injunctive relief. Notice to Company
is required under this provision even though no Company Confidential Information
may actually have been disclosed or otherwise affected if XxXxxxxx has reason to
believe that the Customer Information may be at risk. XxXxxxxx agrees
that XxXxxxxx shall take immediate steps to remedy any event described in this
provision, including but not limited to protecting customers, Company, and
Company’s affiliates against consequences of any disclosure or use of Company
Confidential Information in violation of this Agreement. This
provision shall not in any way limit such other remedies as may be available to
Company at law or in equity.
7.04 Indemnification.
(a) Each
party to this Agreement shall indemnify and hold harmless the other party and
its officers, directors, partners, principals, independent contractors,
employees, member firms, subcontractors and affiliates and their respective
personnel from and against any and all liabilities, losses, damages, costs,
expenses (including, without limitation, reasonable attorney fees and court
costs), interest, penalties or other loss arising out of, in connection with or
with respect to any breach of this Agreement A breach of this
Agreement shall be defined as (i) any fraud, theft, embezzlement, willful
misconduct or negligent act committed by officers, directors, partners,
principals, independent contractors, employees, member firms, subcontractors,
agents and affiliates of either party; (ii) the breach, either intentional or
unintentional, by either party of any of its obligations under this Agreement;
(iii) the breach of any representation or warranty of either party; (iv) cured
breaches which by both volume and severity indicate a pattern of noncompliant
behavior which reasonably brings into question a party’s ability to consistently
fulfill its obligations under this Agreement; and (v) any failure of either
party to comply with applicable laws, rules and regulations.
(b) If a
party is named in any lawsuit or other proceeding for which such party believes
it may be entitled to indemnification hereunder, such party shall:
(i) Promptly
give notice thereof to the other party, to include a copy of any notices,
assessments and other correspondence, a description in reasonable detail of such
lawsuit, audit or other proceeding, and the basis for such party’s belief that
it may be entitled to indemnification hereunder;
(ii) Provide
the indemnifying party reasonable opportunity to consult with the indemnified
party in the development of strategy and the substantive position to be taken,
and the determination of the course of action to be taken;
(iii) Consider
in good faith any suggestion made by the indemnifying party and consider the
recommendations of the indemnifying party, including its recommendation as to
settlement, compromise or other agreed upon resolution of the proceeding,
provided there is a reasonable basis for such recommendations and there is no
material adverse effect on the indemnified party; and
(iv) Not
settle any such lawsuit or proceeding without the written consent of the
indemnifying party.
(c) Notwithstanding the above, no person
shall be entitled to indemnification if the liabilities, losses, damages, costs,
expenses, interest, penalties or other losses are due to the willful
misfeasance, bad faith, or negligence of the person seeking indemnification. The
parties shall cooperate in all reasonable respects with each other in defending
such lawsuit or proceeding.
(d) In the case of any conflict between
Section 7.07 and Section 7.04(b), the former shall govern.
7.05 Limitation
of Liability for Breakage.
The
parties hereto acknowledge that certain trading or investment gains or losses
may be realized as a result of XxXxxxxx’x failure or inability to timely or
accurately process trades in respect of Policies (“Breakage”). The
parties agree that XxXxxxxx is responsible to administer the policies pursuant
to the BPO Operations Manual with the highest industry
standards. Anything in this Agreement to the contrary
notwithstanding, XxXxxxxx shall have no liability whatsoever, except as
expressly provided in Section 2.01 of the Interparty Administration Agreement
for trading or investment losses incurred with respect to any Policy as a result
of XxXxxxxx’x failure or inability to accurately or timely transmit information
or otherwise perform the Carrier Administration Services contemplated hereunder
unless such failure or inability (a) is negligent and is either (i) a breach of
an Essential Company Standard as defined in the Interparty Administration
Agreement of (ii) a breach of this Agreement or (b) is the result of XxXxxxxx’x
recklessness, intentional conduct or fraud. To the extent that
such trading or investment losses materially affect a policy value and arise
from conduct of XxXxxxxx which was (a) negligent and either (i) a breach of an
Essential Company Standard or (ii) a breach of this Agreement or (b) the result
of XxXxxxxx’x recklessness, intentional conduct or fraud, , nothing contained in
this provision (but subject to subsection (b) below) shall limit the remedies
available to Company for such Breakage. Nothing in this
Section 7.05 shall limit any right of the Company to indemnification for
fines or penalties imposed on the Company in respect of Breakage by or at the
instance of any federal or state agency.
In no
event shall either party be awarded consequential, incidental, indirect, special
or punitive damages relating to this Agreement. For clarity, damages
for trading or investment gains or losses as a result of Breakage pursuant to
subsection 7.05 are direct damages.
7.06 Dispute
Resolution
(a) If a
dispute arises out of or relates to this Agreement, either party may give notice
to the other of the existence of the dispute (“Initial
Notice”). Within fifteen days of the Initial Notice, each of the
parties by notice to the other will appoint an officer to meet to endeavor in
good faith to resolve the dispute. In the event that such officers
cannot resolve the dispute within thirty days of the Initial Notice, the dispute
shall be referred to senior officers of the parties.
(b) In
the event that the senior officers of each company cannot reach resolution
within sixty days of the Initial Notice, the parties will enter into
mediation. If through such mediation the parties still do
not reach resolution within ninety days of the Initial Notice, the matter will
be finally settled by arbitration before a panel of three arbitrators in
accordance with the then current rules for commercial arbitration of the
American Arbitration Association (“AAA”). Each of the parties will
select an arbitrator and the two arbitrators selected by the parties will
mutually agree on the third arbitrator, or failing such election by either party
or failing such agreement, a party’s arbitrator and/or the third arbitrator will
be selected according to AAA rules. The arbitration will take place
in a site mutually agreed to by the parties. The determination
reached, or award granted, in such arbitration will be final and binding on both
parties hereto. Enforcement of the arbitration award or determination
may be sought in any court of competent jurisdiction. The arbitrators
will not be bound by judicial formalities and may abstain from following strict
rules of evidence. The parties hereby mutually instruct the
arbitrators to limit the time and scope of discovery to the greatest extent
practicable and request the arbitrators to provide a decision as rapidly as
practicable in each case consistent with the interest of justice, it being the
intention of the parties that any arbitration under this Section be commenced
conducted and completed, and a decision rendered, as rapidly as
practicable. Pending such decision, each party will continue to
perform its obligations under this Agreement.
(c) Notwithstanding
Sections 7.06 (a) and (b), a party may seek from any court described in Section
10.01, and such court may grant, any provisional relief within its authority,
including without limitation a temporary restraining order or preliminary
injunction, under the same standards that would apply absent the requirements of
Sections 7.06 (a) and (b).
(d) The
parties agree that in all cases where a party may seek relief in connection with
this Agreement in a court of competent jurisdiction, the exclusive forums shall
be mutually agreed upon by the parties. For this purpose, each party
expressly consents to and subjects itself to the exercise of personal
jurisdiction in and by such courts.
(a) Each
party to this Agreement (the “Notifying Party”) shall promptly notify the other
party of any threatened or pending lawsuit or governmental or regulatory agency
inquiry or complaint relating to Policies of which the Notifying Party has
actual knowledge and shall promptly transmit to such other party a
copy of any applicable service of process or other instrument related to a court
proceeding or any correspondence or other document transmitted to or from any
governmental or regulatory agency relating to the Policies which shall be
actually received by the Notifying Party.
(b) XxXxxxxx
shall make no response to any governmental or regulatory agency's inquiry or
complaint relating to Policies without first obtaining Company’s approval and
consent to the response to such inquiry or complaint; provided, however, that if
Company fails to give its approval or consent or delays its approval or consent
and such failure or delay would subject XxXxxxxx to any fine, penalty, liability
or sanction, then XxXxxxxx may make a response.
(c) Company reserves the right to control
the defense of any litigation, threatened or pending, by or against it, or to
respond on its own behalf to any governmental or regulatory agency’s inquiry or
complaint; provided, however, that if Company shall exercise this right in such
a manner as shall subject XxXxxxxx to any fine, penalty, liability or sanction
for failure to follow procedure, or otherwise in a manner which, in the
reasonable opinion of XxXxxxxx or its legal counsel, may have a material adverse
effect on XxXxxxxx, then XxXxxxxx shall have the right to defend itself with
counsel of its choice at its own expense.
(d) XxXxxxxx
reserves the right to control the defense of any litigation, threatened or
pending, by or against it, subject to subsection (b) above, or to respond on its
own behalf to any governmental or regulatory agency’s inquiry or complaint;
provided, however, that if XxXxxxxx shall exercise this right in such a manner
as shall subject Company to any fine, penalty, liability or sanction for failure
to follow procedure, or otherwise in a manner which, in the reasonable opinion
of Company or its legal counsel, may have a material adverse effect on Company,
then Company shall have the right to defend itself with counsel of its choice at
its own expense.
(e) The
parties shall promptly and timely cooperate with each other with regard to all
matters identified in this section.
7.08 Insurance
Coverage.
XxXxxxxx
shall use commercially reasonable efforts to continue in effect the insurance
coverages described in Exhibit G attached hereto. XxXxxxxx shall not
voluntarily cause any termination, reduction or alteration of the specified
coverages without 30 days’ prior written notice to Company. Any such
voluntary termination may only occur in the event of a proposed rate increase in
excess of 25% over then current rates. In the event of any voluntary
termination of the specified coverages, XxXxxxxx shall provide to Company
evidence of a commercially reasonable alternative to such coverages prior to any
voluntary termination, which coverage shall be as required under Section 2.02 of
the IAA, so that no gap in protection shall exist at any time during the
Term. In the event of any involuntary termination, reduction or
alteration of the specified coverages, XxXxxxxx shall immediately provide
written notice to Company.
8. TERMINATION
OF AGREEMENT; SURVIVAL
8.01 By
Non-Renewal of this Agreement.
At least one year prior to the end of
the Initial Term and any Additional Term hereof, either party may give the other
party notice if the party delivering the notice desires to modify this Agreement
in the event of a renewal. Either party may give notice of their
desire not to renew this Agreement by written notice to the other party at least
180 days before the end of the Initial Term or any Additional
Term. If a party gives such notice, or if the parties cannot reach
agreement on any proposed modification prior to at least 180 days before the end
of the Initial Term or any Additional Term, this Agreement shall terminate at
the end of such Term.
8.02 For
Cause.
If either of the parties hereto shall
materially breach this Agreement or be materially in default hereunder, or upon
the insolvency, bankruptcy or appointment of a receiver for such party (the
"Defaulting Party), the other party hereto may give written notice thereof to
the Defaulting Party and, if such default or breach shall not have been remedied
within 30 days after such written notice is given, then the party giving such
written notice may terminate this Agreement by giving 30 days' written notice of
such termination to the Defaulting Party. Termination of this Agreement by
default or breach by a party shall not constitute a waiver of any rights of the
other party in reference to services performed prior to such termination, rights
to be reimbursed for out-of-pocket expenditures or any other rights such other
party might have under this Agreement at law, in equity or
otherwise.
8.03 Upon
Termination or Expiration of M Financial's Arrangement with
XxXxxxxx.
This Agreement shall not automatically
terminate upon expiration or termination for default or otherwise of M
Financial’s agreement with XxXxxxxx. XxXxxxxx must continue this
Agreement upon receipt of written notice from Company confirming Company’s
agreement to the following: (i) XxXxxxxx and Company will immediately begin
negotiating a new fee arrangement to be paid by Company to XxXxxxxx for the
Carrier Administration Services to be provided hereunder and (ii) confirming
that . during the time such fee negotiations are being conducted, if M Financial
does not continue to pay the fees contemplated under the MAA, Company will pay
XxXxxxxx’x then current rates for Carrier Administration Services performed
hereunder until a new fee arrangement is agreed to or until this Agreement
terminates as provided below, whichever is later. If a new fee
arrangement is agreed to by Company and XxXxxxxx, then all fees payable with
respect to services provided thereafter will be paid to XxXxxxxx by Company and
not by M Financial. If no new fee arrangement can be mutually agreed
to, this Agreement will terminate twelve months from the date of termination of
M Financial’s agreement with XxXxxxxx.
8.04 Transition.
In the event that this Agreement is
terminated, regardless of the reason for such termination, the parties shall
cooperate with each other and shall provide all assistance required to maintain
an orderly transfer of the functions performed under this Agreement to Company
or a subsequent third-party administrator. Unless otherwise requested
in writing by Company, XxXxxxxx shall promptly transfer to Company or to M
Financial or its designee, as the case may be, all Books and Records relating to
the performance of Carrier Administration Services hereunder. If XxXxxxxx is
requested to perform any services in connection with the transition contemplated
hereunder, XxXxxxxx shall be paid for such services in accordance with its then
current fee schedule applicable thereto.
8.05 Survival.
The terms
and conditions of this Section 8 and of Sections 3.03, 3.04, 4, 7.02 through
7.07, 10.11, 10.12, and 10.14 through 10.16 shall survive the termination of
this Agreement.
9. ASSIGNMENT
9.01 Assignment
by Company.
Company
shall not, directly or indirectly, in whole or in part, assign any of its rights
or delegate any of its obligations under this Agreement without the prior
consent of XxXxxxxx, which consent shall not be unreasonably
withheld.
9.02 Assignment
by XxXxxxxx.
XxXxxxxx
shall not directly or indirectly, in whole or in part, delegate its duties or
assign its rights under this Agreement without the prior written consent of
Company, which consent shall not be unreasonably withheld or delayed; provided,
however, any duties or rights of XxXxxxxx under this Agreement may be assigned
to, and assumed by, any person or entity controlled by, controlling or under
common control with XxXxxxxx or any successor to all or substantially all of the
business or assets of XxXxxxxx without the consent of Company,
10. MISCELLANEOUS
10.01 Governing
Law.
This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Georgia, without
regard to the conflicts of laws provisions thereof. In all cases where a party
may seek relief in connection with this Agreement in a court of competent
jurisdiction, the exclusive forums and venue shall be the state and federal
courts mutually agreed to by the parties.
10.02 Notices.
Any notice, consent, approval or other
communication required or permitted hereunder shall be in writing and shall be
delivered personally, or sent by confirmed facsimile transmission, by overnight
courier service or by registered, certified or express mail, postage prepaid,
return receipt requested, and addressed as follows:
|
|
(a)
|
If
to XxXxxxxx:
|
XxXxxxxx
Systems, L.L.C.
0000
Xxxxxx Xxxxx Xxxx
Xxxxx
Xxxxx
Xxxxxxx,
XX 00000
Attention: President
& CEO
Facsimile
Number: (000) 000-0000
|
|
(b)
|
If
to Company:
|
Sun Life
Insurance and Annuity Company of New York of Canada (U.S.)
One Sun
Life Executive Park, Xxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx
Xxx Xxxx
Facsimile
Number: (000) 000-0000
Any such
notice shall be deemed given when so delivered (in the case of personal delivery
or overnight courier service) or sent by confirmed facsimile transmission or, if
mailed, upon receipt as evidenced by the return receipt. If the
address or facsimile number of either party hereunto is changed, written notice
of such change shall be given to the other party in accordance with this
Section, and the new address or facsimile number shall be used for purposes of
this Agreement.
10.03 Entire
Agreement; Amendment.
This
Agreement, the Exhibits which are attached hereto and made a part
hereof, the IAA, and the documents executed pursuant hereto, contain
the entire understanding of the parties with respect to the subject matter
hereof and thereof and no representation, warranty, covenant or agreement not
embodied herein or therein, oral or otherwise, shall be of any force or effect
whatsoever with respect to the subject matter hereof or
thereof. Further, no change, amendment or modification of this
Agreement shall be effective unless in writing and signed by both parties
hereto.
10.04 Binding
Effect.
This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
10.05 Severability.
In the
event any one or more of the provisions contained in this Agreement shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement.
Nothing
in this Agreement is intended or shall be construed to give any person, other
than the parties hereto, any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision contained herein.
10.07 Headings.
The
Section headings of this Agreement are for convenience only and shall not affect
the construction or interpretation of this Agreement.
10.08 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which will constitute one and the same
document.
10.09 Waiver.
The
failure of either party to enforce any provision of this Agreement will not be
construed as a waiver or limitation of such party’s right to subsequently
enforce and compel strict compliance with every provision of this
Agreement.
10.10 Construction.
Both
parties hereto have participated, directly or indirectly, in the negotiations
and preparation of this Agreement. In no event shall this Agreement
be construed more or less stringently against any party hereto by reason of
either party being construed as the principal drafting party
hereto.
10.11 Remedies.
The parties acknowledge that the remedy
at law for breach of the provisions contained in this Agreement may not be
adequate. Accordingly, the parties consent to the exercise of full
equitable jurisdiction by any court or tribunal, including any arbitration
tribunal, which has jurisdiction under Section 7.06 of this Agreement in
connection with any interpretation or enforcement of this
Agreement.
10.12 Attorneys
Fees.
Without
regard to any statutory, common law or contractual right to recovery of attorney
fees or other litigation or arbitration costs or expenses, in the event of any
litigation or arbitration arising from or relating to this Agreement, each party
will bear its own attorney fees and expenses relating to such litigation or
arbitration.
10.13 Taxes.
All
sales, use, excise or other similar taxes or duties which may be or become
payable on account of fees paid to XxXxxxxx under Section 3.01(c) shall be
payable by Company to XxXxxxxx upon the receipt by Company of XxXxxxxx’x invoice
therefor. In lieu of paying such taxes, Company may provide XxXxxxxx
with a tax exemption certificate acceptable in form and substance to the
appropriate taxing authorities.
10.14 Software
Escrow Agreement.
(a) XxXxxxxx
and M Financial have executed and delivered an Escrow Agreement for the purpose
of protecting Company in the event M Financial's arrangement with XxXxxxxx is
terminated as a result of XxXxxxxx'x breach or upon the dissolution, bankruptcy
or appointment of a receiver for XxXxxxxx, and XxXxxxxx has deposited with the
Escrow Agent (as defined in the Escrow Agreement) a copy of the Software (as
defined in the Escrow Agreement) to be held and updated in accordance with the
terms and conditions of the Escrow Agreement. Company understands and
agrees that the Escrow Agreement limits the liability of the Escrow Agent as
follows: (i) the Escrow Agent and its officers, directors, associates
and employees shall not be liable for any mistake of fact or error of judgment
or for any acts or omissions of any kind unless caused by their willful
misconduct or gross negligence; (ii) any liability of the Escrow Agent,
regardless of the reason, shall be limited to the fees exchanged under the
Escrow Agreement; and (iii) the Escrow Agent shall not be liable for special,
indirect, incidental or consequential damages under the Escrow
Agreement.
(b) XxXxxxxx
hereby agrees to accept an assignment from M Financial to Company of M
Financial's rights under the Escrow Agreement and the License Agreement (which
is described in Section 4 of this Agreement) in the event of a termination of M
Financial’s agreement with XxXxxxxx subject to the agreement between XxXxxxxx
and Company for XxXxxxxx to continue to perform services for Company as
contemplated in Section 8.03 above. XxXxxxxx’ agreement to accept such an
assignment shall apply, without limitation, to termination of M Financial’s
agreement: (i) where the Agreement between M Financial and XxXxxxxx
is terminated as a result of the insolvency, bankruptcy or appointment of a
receiver for M Financial; (ii) where the Agreement between M Financial and
XxXxxxxx is terminated as a result of a breach by M Financial; and (iii) where M
Financial and at least one participating carrier wish to terminate their
agreements with XxXxxxxx but Company will continue to receive services from
XxXxxxxx under this Agreement or otherwise. Company understands that XxXxxxxx
will provide these same assignment rights to other participating carriers for
which XxXxxxxx provides carrier administration services.
10.15 Software
License in Escrow.
XxXxxxxx and M Financial have executed
and delivered to the Escrow Agent a License Agreement, to be held in accordance
with the terms and conditions of the Escrow Agreement. The License
Agreement provides that in the event the Software shall be released by the
Escrow Agent to M Financial, upon the occurrence of a Release Event (as defined
in the Escrow Agreement), but only in such event, XxXxxxxx shall xxxxx to M
Financial, effective upon receipt of the Software from the Escrow Agent, a
license to use the Software (and such modifications, enhancements, improvements,
updates, corrections or changes as M Financial shall elect to make to the
Software) solely on the terms and conditions of the License
Agreement.
10.16 Force
Majeure.
Neither party shall be in default of
this Agreement to the extent that the performance of its obligations under this
Agreement is delayed or prevented by reason of any act of God, fire, natural
disaster, accident, act of government, strike, riot, act of war, restricting
legislation, embargo, blockade, work stoppage, or any other like cause beyond
the control of such party; provided that such causes shall not relieve Company
of its payment obligations as set forth in Section 3.01(c) (except Company shall
not be required to make payment for services not rendered by reason of such a
force majeure condition). Any payment from the Company for services not provided
shall be refunded to the Company.
10.17 Statutory
Compliance
Company
acknowledges that XxXxxxxx may be considered a third party administrator as such
term is defined in various statutes and regulations enacted in different states
of the United States (collectively, the “TPA Rules”). Company agrees
that the terms and conditions set forth in this Agreement shall be subject to,
and modified by, any of the TPA Rules which may apply to XxXxxxxx or
Company. If any such TPA Rules are in conflict with any provision of
this Agreement, this Agreement shall be modified to comply with the TPA
Rules. If the TPA Rules require the inclusion of language regarding
an issue covered in the TPA rules which is not so covered in this Agreement,
Company agrees to amend this Agreement to include such language. To that end,
attached hereto as Exhibit H and with Appendices X-0, X-0, X-0, X-0, X-0, X-0,
X-0, X-0, X-0 and H-10 setting forth the TPA Rules applicable with respect to
each of the States of Florida, Idaho, Indiana, Kentucky, Montana, Nevada,
Tennessee, Wyoming, New Hampshire and California respectively. Such
appendices are incorporated herein and shall be a part hereof and shall be
implemented hereunder to the extent applicable. The parties agree to
execute one or more counterparts thereof.
10.18 Foreign
Jurisdictions
XxXxxxxx is not licensed to do business
in any jurisdiction outside of the United States of America. If
Company makes sales of its Products outside of the United States, it shall,
prior to the making of such sale, notify M Financial who shall, in turn, notify
XxXxxxxx. XxXxxxxx will determine if it will provide Carrier
Administration Services with regard to proposed sale.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized managers and officers, all as of the date
first written above.
XxXxxxxx
Systems,
L.L.C. Sun
Life Insurance and Annuity Company of New York
|
By:
___________________________
|
By:
________________________________
|
|
J.
Xxxxxx Xxxxxxx, Jr.
|
Xxxxxxx
Xxx Xxxx
|
|
President
& CEO
|
Senior
Vice President
|
|
|
By:
________________________________
|
|
|
Xxxxxxx
Xxxxxxx
|
|
|
Vice
President
|
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