Outsourcing Services Agreement

EXHIBIT 10.6


OUTSOURCING SERVICES AGREEMENT


BY AND BETWEEN


1390 MAIN STREET SERVICES, INC
(MAIN STREET)


AND


BUTTNER HAMMOCK RANES AND COMPANY, P.A.
(VENDOR)


April 1, 1998


This Agreement shall not be valid unless signed and accepted by both parties on or before April 27, 1998.


NOTICE OF CONFIDENTIALITY


This Agreement contains confidential information. Disclosure of any information included herein to others without the express written permission of 1390 Main Street Corporation is expressly prohibited.


TABLE OF CONTENTS


1. DEFINITIONS...............................................2


2. TERM.....................................................4


2.1 Term......................................................4


3. PROVISION OF SERVICES....................................5


3.1 Generally................................................5


3.2 Subcontractors............................................5


3.3 Provision of Personnel...................................5


3.4 Payment of Personnel.....................................6


3.5 Subcontractors for Non-Fixed Fee Work.....................6


4. SERVICE LEVEL ADJUSTMENTS.................................6


4.1 Minor Changes............................................7


4.2 Major Changes............................................7


4.3 Change Order Forms.......................................7


5. OBLIGATIONS OF PROJECT MANAGERS..........................8


5.1 Main Street's Project Manager.............................8


5.2 Vendor's Project Manager.................................8


5.3 Coordination.............................................8


6. USE OF ASSETS............................................9


6.1 Ownership of Hardware, Software and Other Assets..........9


6.2 Licenses...............................................10


7. COOPERATION..............................................10


8. COMPENSATION AND EXPENSES................................10


8.1 Fees.....................................................10


8.2 Additional Charges.......................................11


8.3 Reimbursable Expenses....................................11


8.4 Time and Method of Payment...............................11


8.5 Taxes....................................................12


9. CONFIDENTIALITY..........................................12


9.1 Obligations on Confidentiality...........................12


9.2 Non-Confidential Information.............................13


9.3 Copyright Notice.........................................13


10. TERMINATION..............................................13


10.1 Termination for Breach..................................13


10.2 Termination Option.....................................14


10.3 Termination for Insolvency..............................14


10.4 Return of Materials.....................................15


10.5 Rights Upon Termination.................................15


10.6 Survival of Terms.......................................16


10.7 Conversion to Another Service Provider.................16


10.8 Master File Data........................................16


10.9 Return of Software.....................................16


11. WARRANTIES..............................................17


11.1 Warranties by Vendor....................................17


12. INDEMNIFICATION / INSURANCE.............................17


12.1 Indemnification by Vendor...............................17


12.2 Insurance...............................................18


13. DISPUTE RESOLUTION......................................19


14. MISCELLANEOUS...........................................21


14.1 Force Majeure...........................................21


14.2 Assignment..............................................21


14.3 Governing Law...........................................21


14.4 Non-Hire................................................21


14.5 Currency; Language......................................22


14.6 Entire Agreement........................................22


14.7 Service Provider........................................22


14.8 Injunctive Relief.......................................22


14.9 No Strict Construction..................................22


14.10 Independent Contractor.................................23


14.11 Counterparts...........................................23


14.12 Notices................................................23


14.13 Headings...............................................24


14.14 Limitation on Actions..................................24


14.15 Severability...........................................25


14.16 No Third Party Beneficiaries...........................25


14.17 Attorneys' Fees........................................25


14.18 Authority of Signatures................................25


14.19 Non-Waiver.............................................25


15. LIST OF SCHEDULES.......................................26


SCHEDULE A....................................................1


SCHEDULE B....................................................1


SCHEDULE C....................................................1


THIS OUTSOURCING SERVICES AGREEMENT (the "Agreement") is made and entered into this 25th day of April, 1998 (the "Effective Date") by and between 1390 MAIN STREET SERVICES, INC. (hereinafter referred to as "Main street") and BUTTNER HAMMOCK RANES AND COMPANY, P.A. (hereinafter referred to as "Vendor").


BACKGROUND


Main Street is a company which has contractually agreed to provide all services required by RISCORP, Inc., an insurance company (hereinafter the "Insurance Company") to assist in the Insurance Company's dissolution. Vendor is in the business of providing professional accounting services.


As of the Effective Date of this Agreement, Main Street desires to engage Vendor to provide those specific services which are described on Exhibit "A" to this Agreement and are hereinafter referred to as the "Services."


Main Street and Vendor desire to enter into this Agreement so that Main Street can provide the services it has contracted to provide to the Insurance Company, which will entail the use of Vendor's Services as provided for in detail in this Agreement. The Services to be provided under this Agreement shall be for the benefit of Main Street and the Insurance Company. Vendor shall ensure that any of its employees or authorized subcontractors having access to any Confidential Information as hereinafter defined will comply with all of the confidentiality and non-disclosure obligations of Vendor provided in the Agreement. Wherever the context requires, the term Main Street shall include the Insurance Company.


Main Street will be directed by, and under the control for management purposes of The Phoenix Management Company, Ltd. In that regard, Vendor will be required to take direction from, and perform all services requested by The Phoenix Management Company, Ltd., as if The Phoenix Management Company, Ltd. was Main Street.


In entering into this Agreement, the parties each have several primary objectives. Of particular importance to Main Street is that it receive from Vendor the Services sufficient to meet the needs of Main Street to discharge its contractual obligations to the Insurance Company and that the services be rendered by Vendor in a timely, good and workmanlike manner.


Of particular importance to Vendor is that it be permitted to perform the Services required of it for the fees provided for herein so that it may recover its costs in implementing the necessary resources to fulfill its obligations under this Agreement and that Vendor receive timely payment for the services it renders to Main Street.


The provisions of this background section are intended to be a general introduction to this Agreement. To the extent that the terms and conditions of this Agreement do not address a particular circumstance or are otherwise unclear or ambiguous, such terms and conditions are to be interpreted and construed so as to give the fullest possible effect to the objectives set forth in this background section. To the extent the terms and conditions of this Agreement conflict with this background section, the terms and conditions of this Agreement shall control over this background section.


In consideration of the premises and the mutual promises established in this Agreement, and the monies to be paid hereunder, the parties agree as follows:


. DEFINITIONS


As used herein, the terms set forth will have the following meanings:


"Agreement" will mean this Agreement as it may be amended from time to
time, by the parties in writing, including all Change Orders executed by
Main Street.


"Change Order" will mean any work request outside the Services
described in Exhibit "A," which change order describes work which will
be administered in accordance with the procedures specified in Exhibit
"B."


"Insurance Company" means RISCORP, Inc., and its subsidiaries and
affiliates.


"Main Street Confidential Information" will mean and refer to
information that relates in any way to the information, procedures,
customer lists, policy holder lists, and databases, and all information
about Main Street's internal affairs, business plans, and business
practices or any other information of a sensitive or confidential
nature that is provided to Vendor by Main Street in order for Vendor to
perform the Services, or that is learned or is discovered by Vendor in
the performance of the Services.


"Main Street's Equipment" means the computer hardware, including
without limitation servers and workstations, printers, peripheral
equipment, modems, communications hardware, network hubs, cabling and
related items owned or leased by Main Street or provided to Main Street
for its use and which are located at Main Street's Data Center, the
Insurance Company's Data Center, or any of Main Street's Other Vendor
Sites, and all future additions to such computer hardware, printers,
peripheral equipment and related items that may be made in accordance
with this Agreement and that are owned or leased by Main Street.


"Main Street Data Center" shall mean the location of Main Street's
servers and other equipment at Main Street's offices at
____________________________, Orlando, FL.


"Main Street's Software" will mean the Software and Documentation
licensed by Main Street from any source, which shall initially include
that Software and Documentation that is described on Exhibit "C",
together with any upgrades, enhancements or modifications thereto.


"Normal Operating Hours" shall mean those hours between the hours of
8:00 a.m. through 5:00 p.m. in the Eastern Time Zone, Monday through
Friday, and 8:00 a.m. through 1:00 p.m. Saturdays, excluding nationally
recognized holidays.


"Other Vendor" or "Other Vendors" will mean other parties with whom
Main Street has entered into outsourcing agreements similar to this
Agreement for the provision of outsourcing services.


"Other Vendor Sites" will mean collectively the facilities where any
portion of Main Street's Equipment is located and is being used by any
vendor of services to Main Street.


"Phoenix" shall mean and refer to The Phoenix Management Company, Ltd.


"Project Manager" means the individual designated by Main Street and
the individual designated by Vendor to manage the Services provided
pursuant to this Agreement.


"Service Level Adjustment" means a modification in the Services Vendor
is to render or the tasks Vendor is to perform as agreed by the parties
in accordance with Section 4 of this Agreement.


"Subcontractor" means an individual or entity under contract with Vendor to assist Vendor in performing the Services under this Agreement.


"Term" means the term of this Agreement as is provided in Section 2.1


"Vendor Provided Software" means software which is obtained by Vendor
from a third party and is provided by Vendor to Main Street for use at
the Main Street Data Center in order for Vendor to perform its Services
under this Agreement.


. TERM


The term of this Agreement shall commence on the Effective Date
and shall continue for a period of three (3) years, unless
otherwise extended or terminated pursuant to the terms of this
Agreement.


. PROVISION OF SERVICES


Vendor hereby agrees to provide the Services described in Exhibit "A"
to Main Street in a professional, workmanlike and competent
manner. Vendor agrees to take direction from, and act in
response to requests from, Phoenix in the same manner as if
Phoenix were Main Street. Vendor hereby acknowledges that it
has been instructed by Main Street to respond to Phoenix's
instructions as set forth herein.


.2 Subcontractors. Vendor shall have the right at its discretion
to use Subcontractors to assist Vendor in performing the
Services required under this Agreement; subject, however, to
such Subcontractor(s) entering into appropriate agreements
which, in the case of Subcontractors retained specifically to
provide Services to Main Street, shall be enforceable by Main
Street, requiring such Subcontractor(s) to adhere to the
confidentiality and non-disclosure provisions of this
Agreement.


.3 Provision of Personnel. Vendor shall be solely responsible for
providing those personnel or Subcontractors it believes are
necessary to provide the Services. Vendor shall be solely
responsible for ensuring that the personnel or Subcontractors
it provides are fully capable of performing the Services or
such part of the Services assigned to them to be performed.
Vendor shall be solely responsible for the performance of the
personnel or Subcontractors it assigns to perform Services.
Vendor warrants that, in engaging its personnel and
Subcontractors and assigning them to perform services for Main
Street it will not discriminate on the basis of age, sex,
race, religion, national origin, disability, or any other
legally prohibited basis. Vendor will review its selection
process and criteria with Main Street and make any changes
reasonably requested by Main Street to make such process and
criteria non-discriminatory. In the event of any claims or
suits brought against Main Street, or against both Vendor and
Main Street, on the basis that Vendor's hiring or selection or
non-selection of personnel is discriminatory, Vendor shall
defend Main Street from any such claims or suits, including
attorney's fees, court costs, damages, and settlement
payments.


Vendor shall be solely responsible for paying any and all personnel
or Subcontractors it assigns to perform Services. Vendor shall
ensure that no liens are filed against Main Street or any of
its equipment for any work performed by Vendor or any of its
personnel or Subcontractors.


.5 Subcontractors for Non-Fixed Fee Work. If Vendor makes use of
Subcontractors to provide services for which it would be
entitled to bill Main Street in addition to receipt of the
monthly fee amount to be paid under this Agreement, then
Vendor may pass the cost of such subcontractors through to
Main Street provided Main Street has previously approved the
subcontractor so used, and further provided the work done by
such subcontractor falls within the description of services on
Schedule A for which Vendor would be entitled to bill Main
Street if performed by Vendor. There shall be no mark-up for
work performed by subcontractors and billed to Main Street
under this paragraph 3.5


. SERVICE LEVEL ADJUSTMENTS From time to time Main Street may request changes in the Services rendered by Vendor pursuant to this Agreement. Requested changes may be "Minor Changes" or "Major Changes" (as defined below). A Minor Change means any change that Vendor and Main Street reasonably agree can reasonably be effected without increasing Vendor's time, effort, or expense of performing its Services under this Agreement. All other changes shall be Major Changes.


Vendor will implement Minor Changes reasonably requested by Main
Street. There shall be no additional charges or increased fees
for Minor Changes. However, if a number of Minor Changes taken
together result in increased cost or effort for Vendor, Vendor
may treat those Minor Changes collectively as a Major Change.
Provided, however, that Vendor in order to treat Minor Changes
collectively as a Major Change must first give Main Street a
written notice stating (i) that such Minor Changes are, in
Vendor's opinion collectively a Major Change, (ii) describing
with specificity those Minor Changes which if eliminated would
render the remaining Minor Changes not a Major Change, and
(iii) stating the additional charges or fee increases Vendor
will charge for such Major Change. Main Street shall be
entitled to determine which of the Minor Changes it can
eliminate, or in the alternative negotiate with Vendor
regarding the fee increase in the same manner as provided for
in Section 4.2 below.


.2 Major Changes. Main Street and Vendor will attempt in good
faith to agree on reasonable additional charges or fee
increases, including without limitation, increases in
personnel charges, ongoing fees resulting from the change, and
expenses related to implementing the change, for each Major
Change requested by Main Street. Vendor shall implement Major
Changes requested by Main Street only after Vendor and Main
Street have agreed in writing on such additional charges or
fee increases.


Requests for change may be oral, however, all oral requests must be
confirmed as soon as reasonably possible with a Change Order
form completed by the Main Street. Vendor and Main Street will
agree upon a suitable Change Order format. Vendor agrees to
suggest a format for review and discussion by Main Street.
Facsimile transmission of appropriately authorized Change
Order forms shall be acceptable.


. OBLIGATIONS OF PROJECT MANAGERS


Main Street shall designate one of its employees to be its Project
Manager. The Main Street Project Manager shall have the
day-to-day responsibility for interacting with Vendor's
Project Manager, for supervising the performance by Main
Street of its obligations under this Agreement, for
authorizing payments, and generally directing the work to be
performed by Main Street. Vendor may rely upon the
representations and agreements of Main Street's Project
Manager as lawfully binding on Main Street; provided, however,
Main Street's Project Manager shall not have authority to
enter into written agreements to modify or supersede this
Agreement, except to the extent this Agreement is modified by
Change Orders executed by Main Street's Project Manager. Main
Street shall promptly notify Vendor in writing of any
replacement of the Main Street's Project Manager.


Vendor shall designate one of its employees to be its Project
Manager. Vendor's Project Manager shall have day-to-day
responsibility for interacting with Main Street's Project
Manager regarding all matters relating to the services to be
provided hereunder and for supervising the daily progress and
completion of the work performed by Vendor under this
Agreement. Vendor shall promptly notify Main Street in writing
of any replacement of Vendor's Project Manager. Main Street
shall have the reasonable right to approve Vendor's Project
Manager, and in the event that Main Street is reasonably
dissatisfied with Vendor's Project Manager, Main Street shall
be entitled to request that Vendor replace Vendor's Project
Manager with another person reasonably satisfactory to Main
Street.


The Project Managers or their designated representatives shall
meet as needed, but no less often than monthly, to review
progress and to resolve problems related to the completion of
Services to be performed by Vendor. In the event that a
dispute arises as to the performance of obligations by either
party, the Project Managers shall immediately meet and in good
faith attempt to resolve such dispute. It shall be a primary
responsibility of the Project Managers to resolve such
disputes without invoking the dispute resolution provisions of
this Agreement.


. USE OF ASSETS


Main Street may require in its reasonable discretion that certain
of Main Street's Equipment, Software and other assets
(collectively, "Assets") be installed at the Vendor's Site(s).
The following terms apply to the ownership of the Assets:


.1 Main Street at its reasonable discretion may require
the Vendor to be the direct owner, lessee or
licensee, as the case may be, of any of the Assets
installed at Vendor's Site(s). Main Street at its
sole discretion may require that it be the direct
owner, lessee or licensee, as the case may be, of any
of the Assets located at Vendor's Site. Main Street
at its reasonable discretion may require the Vendor
to be the direct owner, lessee or licensee, as the
case may be, of any of the Assets installed at
Vendor's Site(s). Main Street at its sole discretion
may require that it be the direct owner, lessee or
licensee, as the case may be, of any of the Assets
located at Vendor's Site.


.2 Each of the parties shall be responsible for the
physical security of any Assets located on its own
premises. Each of the parties shall maintain
insurance policies insuring its own Assets, whether
located on its own premises or the other party's
premises. Each of the parties shall be responsible
for the physical security of any Assets located on
its own premises. Each of the parties shall maintain
insurance policies insuring its own Assets, whether
located on its own premises or the other party's
premises.


.3 Upon termination of this Agreement, Main Street may
request and Vendor shall cooperate in the transfer
back to Main Street of any Third Party Software
license agreements which (a) were transferred by Main
Street to Vendor, or (b) for which Main Street paid
the license fees. Main Street shall pay any transfer
fees associated with such transfers of Third Party
Software license agreements required hereunder.


.4 Vendor and Main Street shall cooperate in achieving a
reasonable alternative i ...