COMPUTER SERVICES AND CONSULTING AGREEMENT
955 Executive Pkwy., Suite 201, St. Louis, MO 63141 (314) 576-0007
THIS AGREEMENT is entered into between AUTOMATED INSTALLMENT SYSTEMS ("AIS")
and Birch Financial, Inc. ("Client") AIS and Client agree as follows:
A. Services.
1. Organization and Licensing. AIS shall perform, or shall cause
to be performed, all actions reasonably necessary to (a) incorporate as a
general business corporation under the laws of the State of California
(the "State"), and (b) obtain all licenses required for the operation of a
premium finance company under the laws of the State. AIS shall, on
behalf of Client, engage such attorneys and other professionals as AIS
determines, in its discretion, are required to accomplish such
incorporation and licensure.
2. Computer Services. AIS shall provide to Client all computer
processing services incident to the operation of a premium finance
company, as follows:
(A) AIS will receive all premium finance agreements submitted by or
on behalf of Client and process the agreements within three (3)
working days following the day received by the processing AIS
office.
(B) AIS will batch and reconcile or balance all computer input on an
"as processed" basis.
(C) AIS will furnish monthly to Clients, copies of all computer
reports either on original hardcopy or on microfiche.
(D) AIS will receive all funds sent to Client as payments or return
premiums from insurance companies or any other source, deposit there
funds on an "as processed" basis.
(E) AIS will prepare, or cause to be prepared, the following:
(I) AIS will prepare the following documents each time it
processes data on behalf of Client:
- A notification of Acceptance to each new borrower set up
on the premium finance system
- Billings to borrowers that may be required to be sent the
date of the processing
- Late Notices (default notices) in accordance with
applicable state laws
- Batch Balance Report and Accounting Transaction Edit List
- Update of borrower Master File
- New loan, Receipts and General Journals
- Transaction Ledger and Cancellation Notices
(II) AIS will prepare an Account Current monthly or twice
monthly as directed by the client.
(III) AIS will prepare the following reports monthly:
- Write Off, Deletion Report, Payoff Schedule and Loan Cross
Reference Listing
- History Ledger and Accounts with No Activity for sixty
(60) days
- Trial Balance Profit/Loss and General Ledger
(IV) AIS will prepare the following reports annually:
- Trial Balance Profit/Loss and General Ledger
The above-referenced reports shall be in the form contained in the
AIS manual provided by AIS to Client after the execution of this
Agreement. AIS retains the right to amend the AIS manual any time
thereafter.
3. Consulting Services. AIS shall consult with Client, upon Client's
request, regarding all aspects of Client's premium operations.
B. Obligations of Client.
Client shall provide, in the time and manner directed by AIS, all data
reasonably required by AIS to perform the services described in Section A
above. AIS shall not be responsible for errors in data entry or other
services or output provided to or maintained for Client hereunder
resulting from Client's failure to comply with the provisions of this
Section.
C. Billing and Charges.
1. Initial Fee. Client shall pay an original set up and installation
charge of $5,000.00 for the training of Client's personnel, the
established and entering into the computerized accounting system
originating data for Client, and the services of AIS and professionals
engaged by it in connection with the incorporation and licensure of
Client in the State. The initial charge shall be payable in full prior
to the commencement of services by AIS hereunder. AIS will provide to
Client forms and documents normally utilized by AIS in the processing of
data.
2. Monthly Charges. Thereafter, on a monthly basis, AIS will bill
and Client will pay AIS the charges as set forth in the rate schedule.
3. Additional Services. For the performance of consulting services
and other services not specified in Sections A.1 and A.1 above, AIS
will bill Client at an hourly rate of $100 per man-hour for the time
of an officer of AIS, $75.00 per man-hour for any special computer
programming, and $30.00 per man-hour for services provided by general
office employees of AIS. Client will also reimburse AIS for all out-of-
pocket expenses, including but not limited to travel, meals, and lodging,
incurred by AIS as a result of and while preforming such consulting or
additional services.
4. Guarantee of Rates. The rates set forth herein are guaranteed for
one (1) full year after the date of this Agreement; thereafter, AIS may
increase such rates upon at least ninety (90) days' prior written notice
to Client.
5. Payment. Client shall pay all invoices within ten (10) days after
receipt thereof. AIS shall not be obligated to continue performing any
services under this Agreement if Client fails to pay any amount when due.
Client, upon demand, shall pay interest at the rate of 1-1/2 % per month
(or lesser maximum interest rate and charges permitted by applicable
law) on such delinquent amounts from the date when due until the date of
payment. Client agrees to reimburse AIS for any and all expenses AIS may
incur, including without limitation reasonable attorneys' fees (whether
or not suit is filed), in taking action to collect any amounts due AIS
hereunder.
6. Taxes. There shall be added to any charges hereunder amounts equal
to any applicable sales, use, excise or similar taxes or license or
registration fees, however designated, levied or based on the charges
payable by Client hereunder or on this Agreement by federal, state,
and/or local governments, exclusive of taxes based on AIS's income.
D. Term.
This Agreement shall be effective when signed by the parties and the
initial term shall be for a period of one (1) year from such date.
Thereafter, either AIS or client shall have the right to terminate this
Agreement upon the giving of not less than ninety (90) days prior written
notice to the other party.
E. Property.
1. Confidentiality. Client shall obtain no proprietary rights in the
computer programs, written procedures, and similar items used by AIS in
providing services hereunder. Client will maintain the confidentiality
of all AIS proprietary information coming into the possession of the
client and will not disclose the same to any third party without the
express prior written consent of AIS.
2. Trademarks. Client shall have no rights to use, exploit, refer to,
or associate itself with any trademark, servicemark, trade name or other
commercial symbol of AIS, including but not limited to the names
"Automated installment Systems", or "AIS".
3. Injunction. The obligations of Client set forth in this Section will
survive the termination of this Agreement Client acknowledges that a
breach of any provisions of this Section will cause AIS irreparable
injury and damage and that AIS will not have an adequate remedy at law
and, therefore, such breach may be enjoined through injunctive
proceedings in addition to any other rights or remedies that may be
available to AIS at law or in equity.
F. File Security and Retention.
1. Security Procedures. AIS will establish reasonable security
provisions to insure that access to Client's computer-stored files and
records is available only to Client. AIS will maintain the
confidentiality of all such files and records and will not disclose such
files and information to the extent necessary to comply with the laws,
statutes, rules, and regulations of any governmental entity with
jurisdiction. In addition, AIS may disclose such files and information
to accountants and other professionals engaged by it in providing
services hereunder.
2. Loss of Data. AIS will take reasonable precautions to prevent the
loss of or alteration to Client's computer-stored files and records
retained by AIS, but AIS cannot guarantee against such loss or
alteration. Accordingly, Client will keep copies of the source documents
of the information delivered to AIS and copies of all documents delivered
to Client by AIS to maintain a procedure for the reconstruction of lost
or altered Client computer-stored files and records to the extent deemed
necessary by Client.
3. Retention by AIS. AIS shall retain Client's files in accordance
with, and to the extent provided by, its then prevailing record retention
policies and statutory requirements.
G. Error Correction. AIS will correct any error in the output it furnishes
to Client or in the data files it maintains for Client either by rerunning the
output or by adjusting the files, as appropriate, whenever such error is
called to its attention. Such error correction shall be at no charge to
Client with respect to any error that results from the defects in the
hardware, programs, or services provided by AIS hereunder, provided that
Client promptly advises AIS of such error.
H. Excusable Nonperformance. The obligation of AIS hereunder shall be
suspended to the extent that AIS is hindered or prevented from complying
herewith because of labor disturbances, war, acts of God, fires, storms,
accidents, governmental regulations, or any other cause whatsoever beyond the
control of AIS.
I. Return of Records. Upon termination of this Agreement for any reason,
AIS, at the Client's request, will return to Client all of the records then
retained by AIS, provided that AIS has been paid for all services provided
hereunder to the date of termination.
J. Default by Client; Remedies Upon Default. Should Client:
(A) Default in the payment of any sum of money hereunder;
(B) Default in the performance of any of its other obligations under this
Agreement; or
(C) Commit an act of bankruptcy or become the subject of any proceeding
under the Bankruptcy Act or become insolvent, then in any such event, AIS
may, at its option, upon written notice thereof, (i) terminate this
Agreement, and (ii) declare all amounts due hereunder immediately due and
payable and without notice offset against any funds received by AIS for
Client after the date of default up to an amount equal to that which is
due AIS. The remedies contained in this Section are cumulative and in
addition to all other rights and remedies available to AIS under this
Agreement, by operation of law, or otherwise.
K. General.
1. Entire Agreement, Modifications. Client acknowledges that it has not
been induced to enter in to this Agreement by any representation or
warranty not set forth in this Agreement. This Agreement contains the
entire agreement of the parties with respect to the subject matter hereof
and supersedes all existing agreements and all other oral, written, or
other communications between them concerning its subject matter. This
Agreement shall not be modified in any way except by a writing subscribed
to by both parties.
2. Assignability. This Agreement shall not be assignable by Client
without prior written consent of AIS. Any attempt to assign any rights,
duties, or obligations that arise under this Agreement without such
consent shall be void.
3. Accounting Activity. Client will immediately notify AIS of any
accounting activity or transactions performed by Client that will in any
manner materially impact upon the accounting activity being performed by
AIS for client.
4. Notices. Whenever in this Agreement notice is called for, a party
shall give notice to the other in writing by hand deliver, registered or
certified mail, postage prepaid, addressed to the address of the
recipient stated in this Agreement or to such other address as the
recipient, by notice, shall designate. Such notice shall be effective
when so mailed.
5. Governing Law. This Agreement shall be governed by the laws of the
State of California.
6. No Legal Advice. It is specifically understood that AIS does not and
will not provide legal advice to Client with respect to or in connection
with the services provided hereunder.
7. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions
of this Agreement.
AIS RATE SCHEDULE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NUM. OF PMTS 3 6 8 9
$999.00 & UNDER .0110 .0300 .0400 .0435
plus flat rate $5.00 $7.00 $7.00 $7.00
$1,000-$1,499 .0110 .0230 .0280 .0135
plus flat rate $5.00 $5.00 $5.00 $5.00
$1,500-$3,499 .0110 .0190 .0240 .0270
plus flat rate $5.00 $3.00 $3.00 $3.00
$3,500-$4,999 .0110 .0170 .0220 .0245
plus flat rate $5.00 $3.00 $0.00 $0.00
$5,000-$9,999 .0110 .0155 .0200 .0220
plus flat rate $5.00 $0.00 $0.00 $0.00
$10,000-$49,999 .0110 .0142 .0170 .0190
$50,000-$100,000 .0110 .0130 .0150 .0170
</TABLE>
The rates herein stated shall apply to the amount financed for each premium
finance agreement processed by AIS. When the amount financed on any premium
finance agreement exceeds $100,000.00 the total charge shall be that amount
charged for a finance agreement of $100,000.00
/s/ Efraim Donitz /s/ illegible
------------------------ -------------------------
CLIENT AUTOMATED INSTALLMENT SYSTEMS
September 8, 1995
-------------------------
DATE
<PAGE>
AMENDMENT TO THE COMPUTER SERVICES AND CONSULTING AGREEMENT
(AGREEMENT)
In consideration of the representation that Birch Financial, Inc. has been
properly incorporated and approved for a premium finance license by the
Department of Corporations, State of California, the Agreement is amended by:
A. Section A. part 1 is hereby omitted.
B. Section C. Part 1 is amended by eliminating the installation charge
of $5,000 and substituting in its place an installation charge of #3,000
The agreement is further amended by eliminating the AIS Rate Schedule and
substituting in its place the following:
AIS shall be paid for the services specified herein under:
Section A. part 2 the sum of $125.00 each first 35 premium finance
agreements processed in any month and $75.00 for each premium finance
agreement processed in excess of 35 in number processed in any month.
This Amendment is agreed to and accepted by the parties:
/s/ Efraim Donitz
--------------------------------------
For Birch Financial, Inc.
/s/ illegible
--------------------------------------
For Automated Installation Systems, Inc.
