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EXHIBIT 10.82
April 13, 2001
Bankers Insurance Group, Inc.
360 Central Avenue
St. Petersburg, Florida 33731
RE: AMENDMENT/EXTENSION/TERMINATION OF EXISTING AGREEMENTS
WHEREAS, Insurance Management Solutions, Inc. ("IMS"), a wholly-owned subsidiary
of Insurance Management Solutions Group, Inc. ("IMSG"), is currently providing
insurance administration services to Bankers Security Insurance Company
("BSIC"), First Community Insurance Company ("FCIC"), and Bankers Insurance
Company ("BIC") pursuant to separate insurance administration services
agreements (as amended to date, the "Services Agreements") all dated January 1,
1998, between IMS and each of BSIC, FCIC and BIC (collectively, the "Insurance
Subsidiaries"),;
WHEREAS, the term of each of the Services Agreements is scheduled to expire on
June 1, 2001, unless renewed pursuant to its terms;
WHEREAS, the respective parties desire to extend the term of each of the
Services Agreements for an additional period of eighteen (18) months, subject to
the terms and conditions set forth herein;
WHEREAS, the respective parties desire to amend the Service Agreements to
provide for the continuing provision of insurance administration services at
current, competitive rates;
WHEREAS, the parties desire that the Insurance Subsidiaries assume
responsibility for data and technical services (and assume the personnel and
accompanying payroll of those persons providing such technical and data
services) that were previously provided by IMS to the Insurance Subsidiaries
under the Services Agreements;
WHEREAS, Bankers Insurance Group, Inc. ("BIG") provides certain management
support services to IMS pursuant to a certain Administrative Services Agreement
(as amended to date, the "Administration Agreement"), dated January 1, 1998,
between IMS and BIG;
WHEREAS, BIG and IMS desire to terminate the existing Administration Agreement
and enter into a new Corporate Services Agreement (the "Corporate Services
Agreement") pursuant to which BIG will provide certain corporate marketing and
training services to IMS;
WHEREAS, IMS provides certain system development support services to BIG
pursuant to a certain Technical Support Services Agreement (as amended to date,
the "Old Support Agreement") dated April 1, 1999, between IMS and BIG,; and
WHEREAS, IMS and BIG wish to terminate the Old Support Agreement and enter into
a new Technical Support Services Agreement (the "New Support Agreement")
pursuant to which BIG will assume certain personnel and obligations of IMS and
provide certain data and technical support services to IMS.
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NOW, THEREFORE, IMS, BIG, BSIC, BIC and FCIC hereby agree as follows:
I. Amendments to Services Agreements:
IMS and the Insurance Subsidiaries hereby agree that, effective June 1,
2001 (a) the term of each of the Services Agreements shall be extended
to December 1, 2002 and (b) the following service fee schedule shall
apply:
POLICY PROCESSING
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LINE OF BUSINESS SERVICE FEE CONSIDERATION
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Flood 5.5% Based upon direct written premium and 60% of Flood
business processed via internet *
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Homeowners 7% Based upon direct written premium
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Commercial 3% Based upon direct written premium
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Auto No Change Once new system created then services fees will be
amended, upon mutual agreement, for this Line of
Business
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CLAIMS PROCESSING
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LINE OF BUSINESS SERVICE FEE CONSIDERATION
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Flood 3.3% Based upon net claim after deductible
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All other Claims Service No Change
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AS 400 USAGE
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The Insurance Subsidiaries shall pay an aggregate flat fee of Ten Thousand Dollars ($10,000) per
month for AS 400 usage
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DATA AND TECHNICAL SUPPORT
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IMS will no longer provide data and technical support services to the Insurance Subsidiaries under
the Services Agreements.
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IMS and the Insurance Subsidiaries hereby further agree to act in good
faith to execute and deliver, on or before June 1, 2001, a more
definitive amendment to the Services Agreements incorporating the terms
set forth herein. In the event that such a definitive amendment to the
Services Agreements has not been executed and delivered by June 1,
2001, however, the parties agree that the amendments to the Services
Agreements provided for herein shall be binding and given full force
and effect.
* Within sixty (60) calendar days after IMS provides internet access
(which shall include deployment of the internet access into live
production) to the Insurance Subsidiaries' insurance sales agents for
the Flood insurance line of business ("Internet Access Milestone"), the
Insurance Subsidiaries shall ensure that within any monthly billing
period a minimum of sixty percent (60%) of all new business that is
processed by IMS for the Flood insurance line of business is processed
via internet access but rather without the manual intervention of IMS.
If in any given monthly billing period, after the Internet Access
Milestone, more than forty percent (40%) of such new Flood insurance
line of business is not processed by IMS via internet access and with
the manual intervention of IMS, then the Insurance Subsidiaries shall
retroactively pay IMS on a time and material basis for the manual
processing of any new business that is in excess of the forty percent
(40%) level.
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II. Termination of Administration Agreement/Execution of Corporate Services
Agreement
IMS and BIG hereby agree that the Administration Agreement shall be
terminated effective April 1, 2001. IMS and BIG hereby further agree to
act in good faith to negotiate, execute and deliver, on or before June
1, 2001, the Corporate Services Agreement, pursuant to which BIG shall
provide, among other things, the following services to IMS at the rates
specified below:
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CORPORATE MARKETING
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FUNCTION HOURLY RATE SERVICES
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Graphic Design & Writing $ 55 Basic brochures, letters, proposals, and sales
presentations
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Administrative Fees $ 40 Promotional items, ordering follow-up, meeting
management, and business cards
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Web Site Development $ 75 Site planning, design and formatting, navigation, and
animation and effects.
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Creative/Marketing $100
Management and Strategy
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CORPORATE TRAINING
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FUNCTION HOURLY RATE SERVICES
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DDI Training $ 42 Leadership training
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In the event that the Corporate Services Agreement has not been
executed and delivered by June 1, 2001, BIG hereby agrees to provide
the foregoing services to IMS at the above specified rates until the
earlier of (a) the execution and delivery of the Corporate Services
Agreement, or (b) December 31, 2002.
III. Termination of Old Support Agreement/Execution of New Support
Agreement:
IMS and BIG hereby agree that the Old Support Agreement shall be
terminated effective April 1, 2001. IMS and BIG hereby further agree to
act in good faith to negotiate, execute, and deliver the New Support
Agreement, pursuant to which BIG shall provide, among other things, the
following data and technical support services to IMS at the rates
specified below:
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TECHNICAL SUPPORT
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FUNCTION PER MONTH/EMPLOYEE RATE
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Desktop and Telecom Support $130
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Microsoft Desktop Software $ 50
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Internet Usage, Firewall $ 10
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Maintenance of Infrastructure, AS 400 Infrastructure and Basic Upgrades $ 10
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Development Time and Materials Rate
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In the event that the New Support Agreement has not been executed and
delivered by June 1, 2001, BIG hereby agrees to provide the foregoing
data and technical support services to IMS at the above specified rates
until the earlier of (a) the execution and delivery of the New Support
Agreement or (b) December 1, 2002.
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IV. If either party should bring any legal action alleging breach of this
Letter Agreement or seeking to enforce, rescind, renounce, declare void
or terminate this Letter Agreement or any provisions hereof, the
prevailing party shall be entitled to recover all of its legal
expenses, including reasonable attorney's fees and costs (including
legal expenses for any appeals taken), and to have the same awarded as
part of the judgment in the proceeding in which such legal expenses and
attorney's fees were incurred.
V. The parties agree not to disclose the terms and conditions of this
Letter Agreement to any third party, except (a) as required in the
normal conduct of their respective businesses or (b) as required by law
or regulation including, without limitation, any federal securities law
or regulation.
VI. Legal Effect:
This Letter Agreement shall constitute a definitive and binding
agreement by and among the parties hereto.
If you are in agreement with the foregoing, please indicate by signing
this Letter Agreement in the space set forth below.
Sincerely,
David M. Howard, President
Insurance Management Solutions, Inc.
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Accepted and agreed to as of
this 13th day of April, 2001
IMS:
Insurance Management Solutions, Inc.
By: /s/ D. M. Howard
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As Its: President/CEO
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Date: 4/13/01
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BIG:
Bankers Insurance Group, Inc.
By: /s/ Robert G. Menke
--------------------------------
As Its: President/CEO
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Date: 4/13/01
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Insurance Subsidiaries:
Bankers Insurance Company
("BIC")
By: /s/ Robert G. Menke
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As Its: President/CEO
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Date: 4/13/01
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First Community Insurance Company
("FCIC")
By: /s/ Robert G. Menke
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As Its: President/CEO
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Date: 4/13/01
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Bankers Security Insurance Company
("BSIC")
By: /s/ Robert G. Menke
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As Its: President/CEO
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Date: 4/13/01
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