Document:

intx-ex101_163.htm

 

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is made this 17th day of August, 2016, by and between Intersections Inc., a Delaware corporation, with offices at 3901 Stonecroft Boulevard, Chantilly, Virginia 20151 (the “Corporation”) and Duane L. Berlin, an individual, residing at 36 Topaz Lane, Trumball, CT 06611 (the “Executive”).  This Agreement shall be effective as of October 1, 2016 (the “Commencement Date”).

W I T N E S S E T H:

WHEREAS, the Corporation desires to employ the Executive and the Executive desires to accept such employment upon the terms and conditions contained in this Agreement; and

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.Employment.  The Corporation hereby agrees to employ the Executive, and the Executive hereby accepts employment, as the Chief Legal Officer and General Counsel of the Corporation under the terms and conditions set forth herein. 

2.Term.  Subject to the terms and conditions of this Agreement, this Agreement and the Executive’s employment are for the period beginning on the Commencement Date and ending on December 31, 2019 (the “Term”), unless earlier terminated in accordance with the provisions of paragraph 6 hereof. If the Executive continues to be employed by the Corporation following the expiration of the Term, the Executive’s employment shall be on an “at will basis” and any termination of the Executive’s employment shall not entitle the Executive to any payment or benefits, whether as Severance Payments pursuant to paragraph 6 hereof or otherwise, except as required by law.

3.Duties.

a.While the Executive is employed pursuant to this Agreement, he shall perform such duties and discharge such responsibilities as the Chief Executive Officer of the Corporation and the Board of Directors of the Corporation  (the “Board of Directors”) shall from time to time direct, which duties and responsibilities shall be commensurate with the Executive’s position. The Executive shall perform his duties and discharge his responsibilities from the Corporation’s principal office in Chantilly, Virginia, other than normal and customary business travel, which is also a duty and requirement of the Executive’s employment with the Corporation. The Executive shall comply fully with all applicable laws, rules and regulations as well as with the Corporation’s policies and procedures. The Executive shall devote his entire working time to the business of the Corporation and shall use his best efforts, skills and abilities in his diligent and faithful performance of his duties and responsibilities hereunder. While the Executive is employed pursuant to this Agreement, he shall not engage in any other business activities or hold any office or position, regardless of whether any such activity, office or position is pursued for profit or other pecuniary advantage, without the prior written consent of 

 

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the Corporation; provided, however, the Executive may (i) engage in personal investment activities for himself and his family, (ii) engage in non-profit, charitable and civic activities, (iii) provide transition services to Lev & Berlin P.C., including without limitation the transition of ownership, and (iv) continue as of counsel or in a similar capacity to Lev & Berlin P.C., so long as such outside interests set forth in subsections (i) through (iv) hereof do not interfere with the performance of his duties and responsibilities hereunder.  

b.The Chief Executive Officer and the Board of Directors reserve the right from time to time to assign to the Executive additional duties and responsibilities and to delegate to other employees of the Corporation duties and responsibilities normally discharged by the Executive. All such assignments and delegations of duties and responsibilities shall be made in good faith and shall not materially affect the general character of the work to be performed by the Executive. The Executive shall hold such officerships and directorships in the Corporation and any subsidiary to which, from time to time, the Executive may be appointed or elected with no additional compensation payable to the Executive.

4.Compensation and Related Matters.  As full compensation for the Executive’s performance of his duties and responsibilities for the Executive’s employment during the Term pursuant to this Agreement, the Corporation shall pay the Executive the compensation and provide the benefits set forth below:

a.Base Salary.  The Corporation shall pay the Executive an annual salary (the “Base Salary”) of $600,000, less applicable withholding and other deductions, payable in accordance with the Corporation’s then current payroll practices.  Commencing in 2017, the Base Salary will be reviewed at least annually by the Board of Directors (and/or the Compensation Committee thereof) and may be increased, but not decreased, in its sole discretion, in which event any increased Base Salary shall be deemed the Base Salary under this Agreement.

b.Bonus.  For each calendar year through 2018, the Executive shall be eligible to participate in the Corporation’s short-term incentive compensation plan (the “STI Bonus Plan”) to be determined in the sole discretion of the Corporation’s Chief Executive Officer, subject to financial, tax and legal analysis, and the approval by the Board of Directors (and/or the Compensation Committee thereof).  The Executive’s participation in the STI Bonus Plan shall be subject to the plan terms and conditions (which may be based on such factors as the Board of Directors (and/or the Compensation Committee thereof) determine in its or their sole discretion, including the performance of the Corporation and/or the Executive) adopted by the Board of Directors (and/or the Compensation Committee thereof).  Without limiting the generality of the foregoing, to be eligible for a bonus under the STI Bonus Plan, the Executive must be in “active working status” at the time of bonus payment except as otherwise provided in paragraph 6 hereof.  For purposes of this Agreement, “active working status” shall mean that the Executive has not resigned (or given notice of his intention to resign) and has not been terminated for any reason, with or without “cause” including, without limitation, as defined in paragraph 6.c. (or been given notice of termination).  

c.Benefits.  The Executive shall be eligible to participate in any health, welfare and retirement plans and programs (including, but not limited to, medical, dental, life 

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insurance, disability and 401(k)), if any are adopted, of the Corporation and/or any employing subsidiary which may be in effect from time to time during the Executive’s employment by the Corporation and/or employing subsidiary, on the same basis as those benefits are generally made available to other senior executives of the Corporation and/or employing subsidiary, subject to the terms and conditions of such plans as may be in effect from time to time.  

d.Equity Awards.  Prior to the Commencement Date, the Executive received (i) a one-time grant for the calendar years 2016, 2017 and 2018 of 52,500 time-based restricted stock units, and (ii) an annual grant for 2016 of 40,833 performance-based restricted stock units (“PBRSUs”) (at target), under the Corporation’s 2014 Stock Incentive Plan. For each of 2017 and 2018, the Executive shall be eligible to receive an annual grant of 40,833 PBRSUs (at target) under the Corporation’s long-term incentive compensation plan as in effect from time to time, on terms and conditions consistent with the aforementioned 2016 PBRSUs and provided the Executive is in “active working status” at the time of grant. The Executive shall be considered for such other equity or equity based awards by the Compensation Committee on a similar basis as generally made available to other senior officers of the Corporation (other than the Corporation’s Chief Executive Officer). Any such grants or awards shall be made at the sole discretion of the Compensation Committee and the terms of such grants or awards, if any, shall be set forth in the applicable plans and award agreements.

e.Leave.  The Executive shall be eligible to receive and take paid leave that the Corporation generally makes available to its senior officers in accordance with the Corporation’s leave policies (as may be revised from time to time).

f.Car Allowance.  The Corporation shall provide the Executive with an annual car allowance (the “Car Allowance”), which shall be applied to the purchase or lease of a vehicle. The Car Allowance shall equal 4% of the Executive’s Base Salary, less applicable withholding and other deductions, and shall be divided into equal payments and paid on the same basis as the Corporation’s payroll. The Executive shall be responsible for the maintenance and operation of the vehicle and the costs associated with the same, including, without limitation, insurance.

g.Insurance, Indemnification and Related Matters.  While the Executive is employed by the Corporation and for so long as there exists potential for liability thereafter with regard to the Executive’s activities during his employment on behalf of the Corporation or any of its subsidiaries or affiliates (regardless of whether as an employee, officer, or member of the Board of Directors or in any other capacity on behalf of the Corporation or any of its subsidiaries or affiliates), the Corporation shall (i) indemnify, defend and hold harmless the Executive and (ii) advance payment of costs and expenses incurred by the Executive in defense of any such action, suit or proceeding to which the Executive is made a party or is threatened to be made a party (provided the Executive shall repay such expenses in the event it is ultimately determined he is not entitled to such indemnification), in each case  on terms and conditions no less favorable than the Corporation provides at any time during the Executive’s employment or afterwards to its other executive officers and members of the Board of Directors. During the Executive’s employment and for 6 years thereafter, the Executive shall be entitled, at the Corporation’s expense, to the same directors’ and officers’ liability insurance coverage that the Corporation provides generally to its other executive officers and members of the Board of 

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Directors, as may be amended from time to time, provided that such insurance coverage following the Executive’s employment shall be on terms and conditions no less favorable to the Executive than those in effect at the expiration or termination of his employment. The rights provided by this paragraph 4.g. shall be in addition to any other rights to which the Executive may be entitled under any of the organizational documents of the Corporation or any of its subsidiaries or affiliates, any agreement, pursuant to any vote of the holders of equity interests or securities of the Corporation or any of its subsidiaries or affiliates, as a matter of law or otherwise.

5.Expenses.  The Corporation or its subsidiaries shall reimburse the Executive for expenses which the Executive may from time to time reasonably incur on behalf of and at the request of the Corporation in the performance of his responsibilities and duties under this Agreement, provided that the Executive shall be required to account to the Corporation for such expenses in the manner prescribed by the Corporation.

6.Termination.  This Agreement and the Executive’s employment shall terminate at any time in accordance with, and subject to, the terms and conditions set forth below:

a.immediately upon the Executive’s death; or

b.upon the Executive’s disability.  For purposes of this Agreement, the term “disability” shall mean that the Executive is (i) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the service provider’s employer; or

c.upon the existence of “cause.” For purposes of this Agreement, “cause” shall mean that the Executive: (i) has been convicted of, or entered a plea of nolo contendre to, a misdemeanor involving moral turpitude or any felony under the laws of the United States or any state or political subdivision thereof; (ii) has committed an act constituting a breach of fiduciary duty, fraud, gross negligence or willful misconduct; (iii) has engaged in conduct that violated the Corporation’s then existing internal policies or procedures and which is materially detrimental to the business, reputation, character or standing of the Corporation or any of its subsidiaries; or (iv) after written notice to the Executive and a reasonable opportunity of at least 30 days to cure, the Executive shall continue (x) to be in material breach of the terms of this Agreement; (y) to fail or refuse to attend to the material duties and responsibilities reasonably assigned to him by the Board of Directors consistent with his authority, position and responsibilities on the date hereof; or (z) to be absent excessively for reasons unrelated to disability; or

d.upon the existence of “good reason.” For purposes of this Agreement, the following shall constitute “good reason”:  the existence of one or more of the following events has occurred without the written consent of the Executive: (i) a material reduction in the Executive’s Base Salary; (ii) the relocation of the Executive’s office to a location outside of a 30-mile radius from the Corporation’s present Chantilly, Virginia location; (iii) a material breach by 

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the Corporation of the terms of this Agreement; or (iv) following a “change in control” as defined in paragraph 6.e. hereof, a material diminution in the Executive’s authority, duties or responsibilities; provided, however, that none of the events described herein will constitute good reason unless the Executive has first provided written notice to the Corporation of the occurrence of the applicable event(s) within 90 days of the initial existence of such event and the Corporation fails to cure such event within 30 days after its receipt of such written notice and, if uncured, the termination is effective (and the Executive terminates) as of the end of such 30 day cure period; or

e.by the Corporation at any time without “cause” effective 30 days after delivery of written notice to the Executive; provided, however, the Corporation may, at its option, provide a cash payment up to 30 days’ Base Salary in lieu of such 30 days’ notice or any portion thereof; or

f.by the Executive without “good reason,” effective 30 days after delivery of written notice to the Corporation; provided, however, the Corporation may, at its option, accept such resignation at any time and provide a cash payment up to 30 days’ Base Salary in lieu of such 30 days’ notice or any portion thereof;

g.for the purposes of this Agreement, the term “change in control” shall mean that:

(i)any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than the Corporation, Loeb Holding Corporation or any of its affiliates, any trustee or other fiduciary holding securities under an employee benefit plan of the Corporation, or any corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportions as their ownership of stock of the Corporation, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 30% or more of the Common Stock of the Corporation; or

(ii)the stockholders of the Corporation approve a merger or consolidation of the Corporation with or into any other corporation, other than a merger or consolidation (x) with or into Loeb Holding Corporation or any of its affiliates or (y) which would result in the voting securities of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Corporation or such surviving entity outstanding immediately after such merger or consolidation; or

(iii)the stockholders of the Corporation approve an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation’s assets.

h.If the Executive’s employment is terminated during the Term by: (a) the Corporation pursuant to paragraph 6.c., or (b) the Executive pursuant to paragraph 6.f., then, in full satisfaction of the Corporation’s obligations under this Agreement, the Executive shall be entitled to receive (i) the Base Salary provided for herein up to and including the effective date 

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of termination, prorated on a daily basis; and (ii) medical benefit continuation at the Executive’s and/or his dependents’ expense as provided by law.  

i.If the Executive’s employment is terminated during the Term: (a) pursuant to paragraph 6.a. or by the Corporation pursuant to paragraph 6.b. or 6.e., or (b) by the Executive pursuant to paragraph 6.d., then, in full satisfaction of the Corporation’s obligations under this Agreement, the Executive, his beneficiaries or estate, as appropriate, shall be entitled to receive: (i) the Base Salary provided for herein up to and including the effective date of termination, prorated on a daily basis; (ii) any cash bonus which would otherwise be payable to the Executive with respect to the year prior to the year of termination, to the extent such bonus is scheduled to be paid in the year of termination and has not previously been paid, which shall be due and payable in the year of termination and at the same time as such bonuses for such year are paid to active employees (but no later than March 15th of the year of termination); (iii) the Severance Payments (as defined below); and (iv) medical benefit continuation at the Executive’s and/or his dependents’ expense as provided by law; provided, however, as additional consideration for the Release (as defined below), to the extent the Executive and/or his covered dependents elect medical continuation coverage, the Corporation will pay (or reimburse) the cost of medical benefit continuation (on the same basis and at the same cost as such benefits are currently provided to senior executives of the Corporation) for the Executive and any covered dependents for up to 18 months or until the Executive and/or his covered dependents are covered by another company’s group health insurance, whichever is sooner; and provided, further, that if the Corporation determines in good faith that its payment of such cost will result in the imposition of excise taxes or penalties on the Corporation and/or the insurance carrier with respect to such medical benefits, then the Corporation shall not pay (or reimburse) such cost and the Corporation shall provide an economically equivalent benefit or payment, to the extent that such benefit or payment is consistent with applicable law and will not result in the imposition of such excise taxes or penalties.  Notwithstanding anything herein to the contrary, the Corporation shall not be obligated to make any Severance Payments or provide any additional benefits under sub-clause (iv) of this paragraph 6.i unless (x) prior to the 60th day following the date of termination, the Executive executes a general release in form and content satisfactory to the Corporation (the “Release”) and (y) any applicable revocation period has expired during such 60-day period without the Executive revoking such Release.

j.For the purposes of this Agreement, the term “Severance Payment” shall mean:

(i)an amount equal to 1.5 times the Executive’s Base Salary (1 times the Executive’s Base Salary if the Executive’s employment is terminated in 2019 and such termination is not upon, or within 12 months following, a change in control) (2.5 times the Executive’s Base Salary if the Executive’s employment is terminated upon, or within 12 months following, a change in control), to be paid on the 60th day following the date of such termination; and

(ii)if (and only if) such termination occurs between July 1st and December 31st of any calendar year , the actual cash bonus, if any, that (but for the termination of employment of the Executive) would have otherwise been payable to the Executive for the calendar year in which the termination occurs based on the actual performance of the 

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Corporation (and, if applicable, the Executive) for such calendar year and pro-rated on a daily basis (determined by dividing the number of calendar days employed during the year by 365), to be paid (if applicable) when the Corporation pays performance bonuses to the Corporation’s other officers for the calendar year during which the termination occurred but no later than March 15th following the end of such calendar year.

7.Confidential and Proprietary Information; Work Product; Warranty; Non-Competition; Non-Solicitation; Non-Disparagement, Etc.

a.Confidentiality.  The Executive acknowledges and agrees that there are certain trade secrets and confidential and proprietary information (collectively, “Confidential Information”) which have been developed by the Corporation and which are used by the Corporation in its business. Confidential Information shall include, without limitation: (i) customer lists and supplier lists; (ii) the details of the Corporation’s relationships with its customers, including, without limitation, the financial relationship with a customer, knowledge of the internal “politics”/workings of a customer organization, a customer’s technical needs and job specifications, knowledge of a customer’s strategic plans and the identities of contact persons within a customer’s organization; (iii) the Corporation’s marketing and development plans, business plans; and (iv) other information proprietary to the Corporation’s business. The Executive shall not, at any time during or after his employment hereunder, use or disclose such Confidential Information, except to authorized representatives of the Corporation or the customer or as required in the performance of his duties and responsibilities hereunder. The Executive shall return all customer and/or Corporation property, such as computers, software and cell phones, and documents (and any copies including, without limitation, in machine or human-readable form), to the Corporation when his employment terminates. The Executive shall not be required to keep confidential any Confidential Information which (x) is or becomes publicly available through no fault of the Executive, (y) is already in his possession (unless obtained from the Corporation or one of its customers) or (z) is required to be disclosed by applicable law or regulation, or pursuant to the valid order of a court of competent jurisdiction or an authorized government agency, provided that the Executive shall provide the Corporation written notice of any such order prior to such disclosure to the extent practicable under the circumstances and permitted by applicable law.  Further, the Executive shall be free to use and employ his general skills, know-how and expertise, and to use, disclose and employ any generalized ideas, concepts, know-how, methods, techniques or skills, including, without limitation, those gained or learned during the course of the performance of his duties and responsibilities hereunder, so long as he applies such information without disclosure or use of any Confidential Information.

b.Work Product.  The Executive agrees that all copyrights, patents, trade secrets or other intellectual property rights associated with any ideas, concepts, techniques, inventions, processes, or works of authorship developed or created by him during his employment by the Corporation and for a period of 6 months thereafter, that (i) relate, whether directly or indirectly, to the Corporation’s actual or anticipated business, research or development or (ii) are suggested by or as a result of any work performed by the Executive on the Corporation’s behalf, shall, to the extent possible, be considered works made for hire within the meaning of the Copyright Act (17 U.S.C. Section 101 et seq.) (the “Work Product”). All Work Product shall be and remain the property of the Corporation. To the extent that any such Work Product may not, under applicable law, be considered works made for hire, the Executive 

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hereby grants, transfers, assigns, conveys and relinquishes, and agrees to grant, transfer, assign, convey and relinquish from time to time, on an exclusive basis, all of his right, title and interest in and to the Work Product to the Corporation in perpetuity or for the longest period otherwise permitted by law. Consistent with his recognition of the Corporation’s absolute ownership of all Work Product, the Executive agrees that he shall (i) not use any Work Product for the benefit of any party other than the Corporation and (ii) at the Corporation’s sole expense, perform such acts and execute such documents and instruments as the Corporation may now or hereafter deem reasonably necessary or desirable to evidence the transfer of absolute ownership of all Work Product to the Corporation; provided, however, if following 10 days’ written notice from the Corporation, the Executive refuses, or is unable, due to disability, incapacity, or death, to execute such documents relating to the Work Product, he hereby appoints any of the Corporation’s officers as his attorney-in-fact to execute such documents on his behalf. This agency is coupled with an interest and is irrevocable without the Corporation’s prior written consent.

c.Warranty.  The Executive represents and warrants to the Corporation that (i) there are no claims that would adversely affect his ability to assign all right, title and interest in and to the Work Product to the Corporation; (ii) the Work Product does not violate any patent, copyright or other proprietary right of any third party; (iii) the Executive has the legal right to grant the Corporation the assignment of his interest in the Work Product as set forth in this Agreement; and (iv) he has not brought, and will not bring to his employment hereunder, or use in connection with such employment, any trade secret, confidential or proprietary information, or computer software, except for software that he has a right to use for the purpose for which it shall be used, in his employment hereunder.

d.Non-Competition; Non Solicitation.  The Executive agrees that during his employment by the Corporation and for 18 months thereafter, regardless of the circumstances which result in his termination, he shall not within the continental United States or Canada (i) engage or attempt to engage, directly or indirectly, whether as an employee, officer, director, consultant or otherwise, in any business activity which is the same as, substantially similar to or directly competitive with the Corporation; (ii) solicit or attempt to solicit, directly or indirectly, whether as an employee, officer, director, consultant or otherwise, any person or entity which is then a customer of the Corporation or has been a customer or solicited by the Corporation in the preceding 18-month period, to purchase products or services directly competitive with those sold or provided by the Corporation from any entity other than the Corporation; (iii) solicit for employment, engage and/or hire, whether directly or indirectly, any individual who is then employed by the Corporation or engaged by the Corporation as an independent subcontractor or consultant; and/or (iv) encourage or induce, whether directly or indirectly, any individual who is then employed by the Corporation or engaged by the Corporation as an independent contractor or consultant to end his business relationship with the Corporation; provided, however, the foregoing non-competition restriction shall not apply to the Executive’s performance of legal services to the extent that such restriction is not permitted under applicable law or ethical rules; and provided, further, nothing in this paragraph 7.d. shall prevent the Executive from owning, solely as an investment, up to 5% of the securities of any publicly-traded company.  

e.Non-Disparagement.  During the Executive’s employment and at any time thereafter, the Executive agrees not to disparage, either orally or in writing, in any material respect the Corporation or any of its current or former employees, officers or directors, and will 

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not authorize others to do so on Executive’s behalf. Notwithstanding the foregoing, nothing in this paragraph 7.e. shall preclude the Executive from (i) enforcing his rights under this Agreement or responding truthfully to legal process or governmental inquiry, (ii) in the course of and consistent with his duties for the Corporation, evaluating or discussing the performance or conduct of other officers and/or employees, including in connection with performance evaluations or (iii) providing truthful testimony or information in any proceeding or in response to any request from any governmental agency or any judicial, arbitral or self-regulatory forum or as otherwise required by law, subject to the Executive providing the Corporation with as much prior written notice as is practicable under the circumstances and permitted by law.  Nothing in this Agreement or otherwise shall prohibit the Executive from making a report to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress and any agency Inspector General, if he has a reasonable belief that there has been a potential violation of federal or state law or regulation or from making other disclosures that are protected under the whistleblower provisions of any applicable federal or state law or regulation.  No prior authorization to make any such reports or disclosures is required and the Executive is not required to notify the Corporation that he has made such reports or disclosures. The Executive, however, may not waive the Corporation’s attorney-client privilege.

f.Cooperation.  The Executive agrees, without receiving additional compensation and upon reasonable notice, to cooperate fully with the Corporation and its legal counsel on any matters relating to the Executive’s employment with the Corporation in which the Corporation reasonably determines that the Executive’s cooperation is necessary or appropriate.  The Corporation shall reimburse the Executive for reasonable and pre-approved travel and other similar out-of-pocket expenses incurred as a result of any such cooperation.

g.Injunctive Relief; Remedy.  The Executive acknowledges that a breach or threatened breach of any of the terms set forth in this paragraph 7 shall result in any irreparable and continuing harm to the Corporation for which there may be no adequate remedy at law. The Corporation shall, without posting a bond, be entitled to seek injunctive and other equitable relief, in addition to any other remedies available to the Corporation.

h.Essential and Independent Agreements.  It is understood by the parties hereto that the Executive’s obligations and the restrictions and remedies set forth in this paragraph 7 are essential elements of this Agreement and that but for his agreement to comply with and/or agree to such obligations, restrictions and remedies, the Corporation would not have entered into this Agreement or employed (or continued to employ) him. The Executive’s obligations and the restrictions and remedies set forth in this paragraph 7 are independent agreements and the existence of any claim or claims by him against the Corporation under this Agreement or otherwise will not excuse his breach of any of his obligations or affect the restrictions and remedies set forth under this paragraph 7.

i.Survival of Terms; Representations.  The Executive’s obligations under this paragraph 7 shall remain in full force and effect notwithstanding the termination of his employment. The Executive acknowledges that he is sophisticated in business, and that the restrictions and remedies set forth in this paragraph 7 do not create an undue hardship on him and will not prevent him from earning a livelihood. The Executive further acknowledges that he 

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has had a sufficient period of time within which to review this Agreement, including, without limitation, this paragraph 7, with an attorney of his choice and he has done so to the extent he desired. The Executive and the Corporation agree that the restrictions and remedies contained in this paragraph 7 are reasonable and necessary to protect the Corporation’s legitimate business interests regardless of the reason for or circumstances giving rise to such termination and that he and the Corporation intend that such restrictions and remedies shall be enforceable to the fullest extent permissible by law. The Executive agrees that given the scope of the Corporation’s business and the sophistication of the information highway, any further geographic limitation on such remedies and restrictions would deny the Corporation the protection to which it is entitled hereunder. If it shall be found by a court of competent jurisdiction that any such restriction or remedy is unenforceable but would be enforceable if some part thereof were deleted or modified, then such restriction or remedy shall apply with such modification as shall be necessary to make it enforceable to the fullest extent permissible under law.

j.“Corporation”.  For purposes of the provisions of this paragraph 7, the term “Corporation” shall be deemed to include the Corporation and any of its subsidiaries and/or controlled affiliates, as well as any successor to all or any material portion of the business and/or assets of the Corporation or any of its subsidiaries.

8.Successors.  This Agreement shall inure to the benefit of and be binding upon the parties, their legal representatives and successors and assigns. However, the Executive’s performance hereunder is personal to the Executive and shall not be assignable by the Executive. The Corporation may assign this Agreement and its rights and obligations to any affiliate or to any successor to all or substantially all of the business and/or assets of the Corporation, whether directly or indirectly, by purchase, merger, consolidation, acquisition of stock, or otherwise.

9.Miscellaneous.

a.Compliance with Section 409A.   

(i)It is the intention of the parties that all payments and benefits under this Agreement (and any amendment hereto) shall be made and provided in a manner that is either exempt from or intended to avoid taxation under Section 409A of the Internal Revenue Code and the rules, regulations and notices thereunder (“Code Section 409A”), to the extent applicable.  Any ambiguity in this Agreement (or any amendment hereto) shall be interpreted to comply with the above.  The Executive acknowledges that the Corporation has made no representations as to the treatment of the compensation and benefits provided hereunder and the Executive has been advised to obtain his own tax advice.  Each amount or benefit payable pursuant to this Agreement (and any amendment hereto) shall be deemed a separate payment for purposes of Code Section 409A.  For all purposes under this Agreement, any iteration of the word “termination” (e.g., “terminated”) with respect to the Executive’s employment, shall mean a separation from service within the meaning of Code Section 409A. Without limiting the generality of the foregoing, for purposes of this Agreement (including paragraph 6 hereof), the Executive shall be considered to have a termination of employment only if such termination is a “separation from service” within the meaning of Code Section 409A.  

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(ii)To the extent that the reimbursement of any expenses or the provision of any in-kind benefits pursuant to this Agreement is subject to Code Section 409A, (A) the amount of such expenses eligible for reimbursement, or in-kind benefits to be provided hereunder during any one calendar year shall not affect the amount of such expenses eligible for reimbursement or in-kind benefits to be provided hereunder in any other calendar year; provided, however, that the foregoing shall not apply to any limit on the amount of any expenses incurred by the Executive that may be reimbursed or paid under the terms of the Corporation’s medical plan, if such limit is imposed on all similarly situated participants in such plan; (B) all such expenses eligible for reimbursement hereunder shall be paid to the Executive no later than December 31st of the calendar year following the calendar year in which such expenses were incurred or such earlier date as provided under the Corporation’s policies; and (C) the Executive’s right to receive any such reimbursements or in-kind benefits shall not be subject to liquidation or exchange for any other benefit.  

(iii)Notwithstanding anything else in this Agreement to the contrary, if any payments or benefits under this Agreement, including the Severance Payments payable under paragraph 6.i. above, constitute “nonqualified deferred compensation” subject to Code Section 409A at the date of employment termination, then such payment, to the extent required under Code Section 409A, shall be made (or begin to be made) six months and one day after the Executive’s “separation from service” as defined in Code Section 409A(a)(2)(A)(i) (or if earlier the date of the Executive’s death), if the Executive is a “specified employee” as defined in Code Section 409A(a)(2)(B)(i) and as reasonably determined in good faith by the Corporation.  In the event that any payment is subject to the foregoing delay, then the Corporation shall (provided it shall not result in the imposition of additional taxes by reason of Code Section 409A(b)(2)), at its sole expense, (A) contribute the amount of such payments to an irrevocable grantor trust in the form prescribed by Revenue Procedure 92-64 (the “Trust”) within 60 days after the Executive’s termination of employment, and (B) direct the trustee of the Trust to pay such amount, together with the earnings of the Trust, less applicable withholding and payroll deductions, to the Executive on the first day following the expiration of such delay or, if earlier, the Executive’s death (subject only to the limitations with respect to the Corporation’s insolvency, if any, as prescribed under the Trust and required to satisfy Revenue Procedure 92-64). 

b.Clawback.  Notwithstanding any other provision of this Agreement to the contrary, any incentive compensation (whether cash or equity) received by the Executive which is subject to recovery under any law, government regulation, order or stock exchange listing requirement, will be subject to such deductions and clawback (recovery) as may be required to be made pursuant to law, government regulation, order, stock exchange listing requirement (or any policy of the Corporation adopted pursuant to any such law, government regulation, order or stock exchange listing requirement) (any “Policy”). The Executive agrees and consents to the Corporation’s application, implementation and enforcement of (i) any Policy and (ii) any provision of applicable law relating to cancellation, rescission, payback or recoupment of incentive compensation, and expressly agrees that the Corporation may take such actions as are necessary to effectuate any Policy, any similar policy (as applicable to the Executive) or applicable law without further consent or action being required by the Executive. To the extent that the terms of this Agreement and any Policy conflict, then the terms of such Policy shall prevail.

11

 

NY 76278983v5

 

c.Waiver; Amendment.  The failure of a party to enforce any term, provision, or condition of this Agreement at any time or times shall not be deemed a waiver of that term, provision, or condition for the future, nor shall any specific waiver of a term, provision, or condition at one time be deemed a waiver of such term, provision, or condition for any future time or times. This Agreement may be amended or modified only by a writing signed by both parties hereto.

d.Governing Law; Jurisdiction.  This Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Virginia without giving effect to principles of conflicts of law.  The parties hereby irrevocably consent to the jurisdiction of the federal and state courts located in the Eastern District of Virginia or Fairfax County, Virginia, and by the execution and delivery of this Agreement, each of the parties hereto accepts for itself the exclusive jurisdiction of the aforesaid courts and irrevocably consents to the jurisdiction of such courts (and the appropriate appellate courts) in any proceedings, and waives any objection to venue laid therein.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT HE OR IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT.

e.Tax Withholding.  The payments and benefits under this Agreement may be compensation and as such may be included in either the Executive’s W-2 earnings statements or 1099 statements. The Corporation may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

f.Paragraph Captions.  Paragraph and other captions contained in this Agreement are for reference purposes only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof.

g.Severability.  Each provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of this Agreement.

h.Integrated Agreement.  This Agreement constitutes the entire understanding and agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements, understandings, memoranda, term sheets, conversations and negotiations. There are no agreements, understandings, restrictions, representations or warranties between the parties other than those set forth herein or herein provided for.

i.Interpretation; Counterparts.  No provision of this Agreement is to be interpreted for or against any party because that party drafted such provision. For purposes of this Agreement: “herein,” “hereby,” “hereinafter,” “herewith,” “hereafter” and “hereinafter” refer to this Agreement in its entirety, and not to any particular subsection or paragraph. This Agreement may be executed in any number of counterparts, including by facsimile or PDF, each of which shall be deemed an original, and all of which shall constitute one and the same instrument.

12

 

NY 76278983v5

 

j.Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand delivery, by facsimile (with confirmation of transmission), by e-mail, by overnight courier, or by registered or certified mail, return receipt requested, postage prepaid, in each case addressed as follows:

If to the Executive, at the address set forth above, with a copy to:

Lev & Berlin, P.C.

200 Connecticut Avenue

Norwalk, CT  06854

Facsimile:  203-854-1652

 

If to the Corporation:

Intersections Inc.
3901 Stonecroft Boulevard
Chantilly, Virginia  20151
Attention: Chief Legal Officer
Facsimile: 703-488-1757

with copies (which shall not constitute notice) to:

Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York  10038-4982
Attention:  Todd E. Lenson
Facsimile:  212-806-6006

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective when actually received by addressee.

k.No Limitations.  The Executive represents his employment by the Corporation hereunder does not conflict with, or breach any confidentiality, non-competition or other agreement to which he is a party or to which he may be subject.

[Remainder of Page Intentionally Left Blank]

 

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NY 76278983v5

 

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date first above written.

			
	
 

INTERSECTIONS INC.
	
 

EXECUTIVE

	
 
	
 

	
 
	
 

	
By:
	
/s/ Michael R. Stanfield
	
/s/ Duane L. Berlin

	
 
	
Michael Stanfield 
	
Duane L. Berlin

	
 
	
Chief Executive Officer
	
 

 

 

NY 76278983v5intx-ex102_323.htm

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH FIVE ASTERIKS (*****).

 

15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

Exhibit 10.2

DATA SERVICES AGREEMENT

 

This DATA SERVICES AGREEMENT (this “Agreement”) made and entered into as of September 26, 2016 (the “Effective Date”) by and between Digital Matrix Systems, Inc., a Texas corporation, located at 15301 Spectrum Drive, Second Floor, Addison, TX 75001 (“DMS”) and Intersections Inc., a Delaware corporation, located at 3901 Stonecroft Blvd., Chantilly, VA  20151 (“Intersections”).

 

W I T N E S S E T H:

 

WHEREAS, Intersections desires DMS to provide certain on-line credit and third party data access and processing services through DMS’ proprietary web-based application known as the Alert Processing Engine (“APE”) and access, process and retain the Third Party Data as outlined herein (the “Services”), and DMS is willing to provide the Services to Intersections in accordance with the terms and conditions hereof; and 

 

WHEREAS, in connection with the Services, Intersections desires DMS to process and retain certain credit and other third party information (the “Third Party Data”) obtained from consumer reporting agencies such as Experian, Equifax, and Trans Union and other Intersections selected third party data providers (collectively, the “Data Providers”) in order to prepare and provide to Intersections Alert Processing Engine responses based on each specific product or transaction type; and

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein set forth, the parties, intending to be legally bound, agree as follows:

 

Section 1.  Services.  In accordance with the terms of this Agreement, DMS will provide Intersections access to its Services to enable Intersections to request Credit Information of or from the Data Providers, or other Third Party Data sources as determined by Intersections and agreed to by DMS, and for DMS to return the Credit Information to Intersections through Alert Processing Engine responses based on specific product or transaction type, as identified by Intersections, via the Internet.  Each such request received and processed by DMS shall be defined as a “Transaction.”  Intersections hereby authorizes DMS to obtain (and retain as applicable) Third Party Data on its behalf using the Data Provider access codes provided by Intersections to DMS.  DMS shall retain such Third Party Data in such a manner allowing Intersections to retrieve the Third Party Data as outlined herein.  Intersections right to retrieve retained Third Party Data and DMS right to access Third Party Data shall not extend beyond the Term of this Agreement. The parties recognize that in order to provide the Services DMS will receive Personal Information (as defined in Section 17 of the Agreement).  

 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 1 of 20

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH FIVE ASTERIKS (*****).

 

15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

(a)Implementation Services –  DMS shall provide the implementation services set forth below:

 

	
 
	
1.
	
Set up of hardware environments, including testing, production, and disaster recovery.

	
 
	
2.
	
Deployment of the Alert Processing Engine (the “APE”) application across hardware environments covering user acceptance testing, production, and disaster recovery environments.

	
 
	
3.
	
Establish and test Credit Bureau connectivity and processing of the APE application.

	
 
	
4.
	
Establish and test the data retention database and related support services.

	
 
	
5.
	
Test Disaster Recovery procedures for all Credit Bureau connections, the APE, and Third Party Data and Personal Information retention services.

	
 
	
6.
	
Support for Intersections Acceptance Testing.

 

(b)Third Party Data processing and data retention services for the Data Providers as outlined on Exhibit B.  Intersections will be responsible for all DMS access to the Third Party Data from the Data Providers, its format, and delivery method of each “data component” within the Third Party Data.

 

(c)Periodic Disaster Recover (DR) Failover Testing

	
 
	
1.
	
Creating the DR rollover test plans.

	
 
	
2.
	
Executing the DR site rollover.

	
 
	
3.
	
Testing the DR site, fail back to the primary site and testing the fall back.

 

(d)Support for Services in (b) above

	
 
	
1.
	
Process documentation for DMS Operations.

	
 
	
2.
	
Training DMS staff for 7/24/365 production support.

 

(e)DMS shall, upon written request and subject to an executed Amendment to this Agreement, develop for Intersections a separate non-production database that replicates the information maintained by DMS as part of the Services, including Third Party Data and Personal Information (“Intersections Database”).  The Intersections Database shall be updated every 24 hours and may be accessed by Intersections employees in accordance with this Agreement.  Intersections shall only use this database for its internal purposes. 

 

The Services shall at all times comply with the requirements of the Service Level Agreement outlined in Exhibit A hereto, as applicable. 

 

Section 2.  Acceptance Testing.  The term “Acceptance Testing” means testing performed by Intersections to determine whether the relevant Services comply with the documentation.  

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 2 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

Within fifteen (15) business days after receipt of the Services, Intersections shall provide DMS a written list of items that it finds unacceptable, including a written description of the failure sufficient to allow DMS to replicate such Acceptance Test failure and DMS shall correct the items within fifteen (15) business days.  This process shall continue until Intersections signs off on receipt and acceptance of the Services.  Rework required shall not be charged back to Intersections unless the rework is the result of an error in, or change to, the requirements provided by Intersections to DMS.  Intersections shall be deemed to have accepted the Services upon the earlier of (1) providing DMS written acceptance of the Services, or (2) thirty (30) calendar days after delivery or redelivery of the Services for which Intersections does not provide DMS a written list of unacceptable items.  Intersections shall be solely responsible for determining the appropriateness of all Acceptance Testing elements.

 

Section 3.  Security.  DMS shall maintain reasonable and appropriate administrative, technical and physical security safeguards to (i) insure the security and confidentiality of the Third Party Data and Personal Information; (ii) protect against anticipated threats or hazards to the security or integrity of the Third Party Data and Personal Information; and (iii) protect against unauthorized access or use of Third Party Data and Personal Information.  Such safeguards will include maintaining compliance with prevailing industry standards, including the Gramm-Leach-Bliley Act, establishing procedures to prevent any of its employees or agents from using any Third Party Data or Personal Information for personal reasons or transferring any such information to any third party (other than as provided in this Agreement).  DMS will, as allowed by Applicable Laws, promptly notify Intersections of any actual or suspected unauthorized access to Third Party Data or Personal Information as outlined in Exhibit C.  

 

*****

Intersections shall maintain the security of logon identification credentials used by Intersections and Intersections’ employees and its authorized users to gain access to the Services. Intersections will implement any credentialing or procedures reasonably requested by DMS from time to time to maintain security of access to the Services. 

 

Section 4.  Term.  The initial term of this Agreement shall be a period of one year, commencing on the Effective Date. Unless earlier terminated pursuant to the terms and conditions hereof, this Agreement shall automatically be extended for successive terms of one year each, unless either party shall give the other party written notice of its election not to extend the term 30 days prior to the conclusion of the then-current term.  Notwithstanding the foregoing, DMS may immediately discontinue offering the Services, or any part thereof, in the event DMS is no longer authorized to provide the Third Party Data pursuant to Intersections’ or DMS’ arrangements with the Data Providers. 

 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 3 of 20

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH FIVE ASTERIKS (*****).

 

15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

Section 5.  Conditions of Use of the Services.

 

(a)As a condition to DMS providing the Services hereunder, Intersections agrees that Intersections and its affiliates will use the Services and Credit Information only for a permissible purpose under the federal Fair Credit Reporting Act 15 U.S.C. § 1681 et seq., as amended (“FCRA”) and that DMS’ Services will not directly or indirectly violate or interfere with the terms of any other agreement to which Intersections is a party.

 

	
(b)
	
Intersections will implement strict security procedures designed to ensure that Intersections’ employees and its authorized users use the Services in accordance with the Agreement.   Intersections will treat and hold the Services in strict confidence and will restrict access to the Services to Intersections’ employees and authorized users who agree to act in accordance with the confidentiality requirements set forth in Section 15 hereof. Intersections will inform Intersections’ employees and authorized users to whom any Third Party Data is disclosed of the provisions of this Section 5(b).  

 

(c)Intersections acknowledges the proprietary and confidential nature of the Services, and that the Services are, will continue to be the exclusive property of DMS, and shall be used only as authorized in writing by DMS.  DMS grants to Intersections a limited, non-exclusive, non-transferable and non-assignable or sublicensable license to access and use the Services and any other data or information that is proprietary to DMS for purposes authorized by this Agreement.  Intersections will require its employees and authorized users that have access to the Services to comply with all of the terms and conditions of this Agreement, and if any of such persons breach this Agreement such breach shall be deemed a breach of this Agreement by Intersections.  Except as expressly set forth in this Section 5(c), nothing contained in this Agreement shall be deemed to convey to Intersections, Intersections’ affiliates, employees, agents, authorized users or to any other party, any right, title or interest, including any patent, copyright, trademark or other proprietary right, in or to the Services or any other data or information that is proprietary to DMS.  Intersections will not use or permit its affiliates, employees, agents, subcontractors and authorized users to use the trademarks, service marks, logos, names or other proprietary designations of DMS without its prior written consent.

 

Section 6.  Fees.  In consideration for the Services provided hereunder, Intersections shall pay to DMS the following fees:

 

(a)A one-time Implementation Fee of $***** that shall be billable upon execution of this Agreement.

 

(b)Third Party Data Processing and Retention Services shall be billed in equal installments per month (the “Monthly Fee”) not to exceed the amount set forth in the applicable Contract Year below.  A Contract Year shall be defined as each 12-month period, with the first 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 4 of 20

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SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH FIVE ASTERIKS (*****).

 

15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

Contract Year One beginning with the earlier of (1) the date of Acceptance by Intersections, and (2) live production processing by Intersections, and each successive 12-month period thereafter.   The pricing for the for each Contract Year is as set forth below: 

 

	
 
	
(i)
	
Contract Year One $*****

	
 
	
(ii)
	
Contract Year Two $*****

	
 
	
(iii)
	
Contract Year Three *****

	
 
	
(iv)
	
The initial Monthly Fee shall be due upon customer the earlier of (1) the date of Acceptance, and (2) live production processing by Intersections using the Services.

 

Intersections agrees to pay DMS within 30 days of the receipt of each DMS invoice.  DMS may assess a late charge of *****% per month or the highest rate allowed by law, whichever is less, on past due invoices.  Intersections obligation to pay invoiced amounts is absolute and unconditional and not subject to any offset, defense or counterclaim.  Failure to timely pay such fees may result in discontinuation of Services.

 

Section 7. Maintenance Services and Enhancement.  

 

During the term of this Agreement, DMS will provide to Intersections telephone support in accordance with the provisions of the Service Level Agreement attached hereto as Exhibit A.

 

The Services will be subject to DMS’ standard maintenance services which shall include, in addition to the obligations outlined in Exhibit A, (1) routine changes instigated by the Data Providers within data layout, version, and format changes in order to continue delivery of the Services as outlined herein; (2) corrections of Errors as defined in Exhibit A; and (3) SLA reporting as outlined in Exhibit A.

 

Enhancements, including access to new Data Providers or other third party data suppliers, formats, and report types, to be defined by mutual agreement of the parties, including any additional fees for the Services provided pursuant to this Agreement.

 

Section 8.  Disclaimer of Warranty.  Intersections acknowledges that the Services provided hereunder entail the possibility of some human and/or machine errors, omissions, delays and losses, including errors in the Third Party Data, or delays caused by the Data Providers or Internet delivery of the Services, which may give rise to loss or damage.  ACCORDINGLY, DMS DOES NOT GUARANTEE OR WARRANT THE ACCURACY, TIMELINESS, COMPLETENESS, CURRENTNESS, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE SERVICES, THE THIRD PARTY DATA.  

 

Section 9.  Insurance. Each party represents that as of the Effective Date it has, and agrees that it shall maintain in force during the Term, at least the insurance coverage set forth below:

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 5 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

	
 
	
(a)
	
Statutory workers’ compensation covering all state and local statutory requirements;

	
 
	
(b)
	
Employer’s liability with a limit of $***** for one or more claims arising from each accident;

	
 
	
(c)
	
Commercial general liability, including coverage for completed operations, products liability and contractual operations;

	
 
	
(d)
	
Professional liability for errors and omissions with a limit of $*****; and

	
 
	
(e)
	
Crime and Fidelity Insurance with a limit of $*****.

 

The limits of coverage for section (c) above shall be $***** per occurrence combined single limit bodily injury and property damage plus $***** excess or umbrella liability coverage.  DMS shall cause its insurers to (i) waive all rights of subrogation against the other party, and its officers, directors and employees; and (ii) each party shall furnish the other party certificates of insurance evidencing that the above insurance is in effect and otherwise complies with the requirements of this Insurance Section.

 

No party shall be required to indemnify another party under this Agreement to the extent insurance coverage is available to cover the liability in question unless the insurance company has not paid (or only partially paid) the claim within 60 days of the date the claim is reported.  Otherwise, the carrying by a party of the insurance required herein shall in no way be interpreted as relieving the insured party of any other obligations it may have under the Agreement.

 

Section 10.  Limitation of Liability.  Except for a Party’s breach of Indemnification (Section 11), or Security (Section 3), for all other claims relating to this Agreement, whether in contract, tort, strict liability, or otherwise, each Party’s sole and exclusive remedy shall be the recovery of actual, direct damages, not to exceed $*****.  *****.

 

Section 11.  Indemnification.  Intersections will indemnify, and defend and hold DMS and its affiliated entities, officers, directors, employees, contractors and agents harmless from and against any and all liabilities, damages, losses, claims, costs and expenses, including reasonable attorney’s fees, which may be asserted against or incurred by the foregoing parties, arising out of or resulting from: *****.

 

DMS will indemnify, and defend and hold Intersections and  its affiliated entities, officers, directors, employees, contractors and agents harmless from and against any and all liabilities, damages, losses, claims, costs and expenses, including reasonable attorney’s fees, which may be asserted against or incurred by the foregoing parties, arising out of or resulting from: *****. 

 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 6 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

Section 12.  Termination; Remedies.  (a)  Either party shall be in default if it fails to perform any of its duties or obligations hereunder and does not cure such failure within 30 (thirty) days after written notice is given to the defaulting party.  Upon a default, the non-defaulting party may terminate this Agreement by providing written notice of termination to the defaulting party, reserving unto the non-defaulting party all rights and remedies it may have under this Agreement or may otherwise have at law or in equity.  Notwithstanding the foregoing, DMS may immediately cease providing the Services or access thereto to Intersections if (i) DMS believes in its reasonable judgment that Intersections has failed to comply with any of its obligations hereunder, including in particular, Section 5 of this Agreement, (ii) for any reason one or more of the Data Providers ceases to provide the Third Party Data to DMS or Intersections, or (iii) DMS receives reliable information from Intersections, law enforcement authorities, accredited news reports (i.e. a recognized, documented news source rather than an anonymous blog or its equivalent), or other reputable third parties that Intersections or any of Intersections’ officers, directors, managers, shareholders, members, partners, employees, agents, or affiliates has engaged in, or is suspected to have engaged in, illegal or fraudulent activities, whether related to the provision of Services under this Agreement or otherwise.  *****. 

 

(b) The provisions of Sections 8, 10, 11, 12, 13, 14, 15, 16, 17 and 18 shall survive any expiration or termination of this Agreement, for any reason or of DMS’ obligation to provide the Services hereunder.

 

Section 13.  Taxes and Other Charges.  In addition to all amounts payable by Intersections hereunder, Intersections will pay amounts equal to all sales, use, personal property and other taxes resulting from this Agreement or any activities under this Agreement, excluding taxes based on DMS’ net income, unless Intersections furnishes annual proof of exemption from payment of such taxes in a form reasonably acceptable to DMS.  DMS may separately reflect on its invoices to Intersections the amount of any taxes paid by DMS on Intersections’ behalf, and Intersections shall pay DMS for such amounts.

 

Section 14.  Nonsolicitation.  

 

(a)Neither party shall, during the term of this Agreement and for a period of one year after termination of this Agreement, either directly or indirectly, recruit or hire or attempt to recruit or hire, directly or indirectly, any employee, consultant or independent contractor of the other party. Neither party shall be prohibited from responding to or hiring employees of the other party who inquire about employment on their own accord or in response to a public advertisement or employment solicitation in general.

 

(b)Each party agrees that a breach or violation of this Section 14 may cause irreparable injury for which the non-breaching party would have no adequate remedy at law, and that the non-breaching party will be entitled to preliminary or other injunctive relief issued by any court or arbitration panel of competent jurisdiction, restraining any such breach or violation.  Such 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 7 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

injunctive relief will be in addition to, and in no way in limitation of any other remedies or rights that the non-breaching party may have at law or in equity.

 

(c) In the event any restriction set forth in this Section 14 is deemed to be unenforceable for being overly broad, the parties agree to amend the applicable provision as necessary to make it enforceable to the maximum extent legally permitted. 

 

Section 15.  Confidentiality.  Each party (each, a “Receiving Party”) understands and agrees that in the performance by the other party (each, a “Disclosing Party”) of its duties hereunder, the Disclosing Party will communicate to the Receiving Party certain confidential and proprietary information concerning the business of the Disclosing Party, and certain know-how, technology, techniques, computer code for software products proprietary to the Disclosing Party, whether in source code or object code form and related documentation, and customer lists, all of which are confidential, proprietary information and trade secrets of the Disclosing Party (collectively the "Confidential Information"). The Receiving Party agrees to hold and protect all such Confidential Information and shall not, unless authorized pursuant to this Agreement of with specific prior written consent of an authorized officer of the Disclosing Party, utilize in any manner, communicate or disclose any part thereof to any third party. The Receiving Party shall require all of its employees, affiliates, subcontractors, agents, authorized users, as applicable, to maintain the confidentiality of the Disclosing Party’s Confidential Information in accordance with this Agreement. Confidential Information shall not include information that the Receiving Party can show by documented evidence: (a) is now or subsequently becomes lawfully known through no fault of the Receiving Party; (b) is known by the Receiving Party at the time of disclosure and is not subject to restriction; (c) is lawfully obtained from a third party who has the right to make such disclosure; or (d) is required to be disclosed by lawful process, provided that the Receiving Party shall provide the Disclosing Party with timely notice in order for the Disclosing Party to seek a protective order or otherwise object.  Each party acknowledges that (i) the restrictions contained in this Section 15 are reasonable and necessary to protect the other party’s legitimate interests, (ii) remedies at law will be inadequate and any violation of these restrictions will cause irreparable damage to the Disclosing Party within a short period of time, and (iii) the Disclosing Party will be entitled to injunctive relief against each violation. Each party further agrees that all confidentiality commitments hereunder shall survive termination of this Agreement for any reason. 

 

Section 16.  Data Ownership and Storage.  *****.  Such electronic records will be maintained as confidential by DMS, subject to any disclosure mandated by the Fair Credit Reporting Act or other Applicable Laws.                                       

 

Section 17.  Handling of Personal Information.  *****.

 

Section 18.  General Terms and Conditions.  

 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 8 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

(a)  Entire Agreement.  This Agreement contains the entire understanding of the parties with respect to its subject matter, and supersedes any and all related prior understandings and agreements, oral or written.  This Agreement cannot be modified or amended except in writing signed by both parties.

 

(b) Force Majeure.  Either Party shall be excused from delays in performing or from its failure to perform hereunder, and such delays or failures shall not constitute breaches of this Agreement, to the extent that such delays or failures result from causes beyond its reasonable control, including but not limited to the acts or omissions of the Data Providers (e.g., one or more of the Data Providers ceases to provide the Third Party Data to DMS or Intersections for any reason), delay and interruptions in sending and receiving Third Party Data via the Internet, denial of service attacks, labor disputes, strikes or other labor or industrial disturbances, acts of God, floods, lightning, shortages of materials, utility or communication failures, earthquakes, casualty, war, riots, insurrections, embargoes, regulations or orders from any governments, or any agency or subdivision thereof; provided that, in order to be excused from delay or failure to perform, DMS must act diligently to remedy the cause of such delay or failure.

 

(c)Independent Contractor.  DMS is providing the Services to Intersections as an independent contractor.  DMS does not undertake by this Agreement or otherwise to perform any obligation of Intersections, whether by regulation or contract, unless specified in writing.

 

(d)  Governing Law.  THE VALIDITY, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT, AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

(e)  Dispute Resolution.  With the exception of any action taken under Section 5, 12 and 15 of this Agreement, the parties shall resolve any dispute arising out of or relating to this Agreement in binding arbitration conducted in accordance with the then pertaining rules for commercial arbitration of the American Arbitration Association by a single arbitrator selected by the American Arbitration Association or an arbitrator agreed upon by the parties.  Any such arbitration shall be held in Dallas, Texas unless the parties otherwise agree.  The parties shall be entitled to conduct reasonable discovery, in accordance with the Texas Rules of Civil Procedure and applicable case law, prior to the arbitration hearing, and the Texas Rules of Evidence shall be applicable to the arbitration proceeding.  The decision of the arbitrators shall be final and binding on DMS and Intersections and may be entered and enforced in any court of competent jurisdiction by either party.

 

(f)  Severability.  This Agreement shall be deemed to be severable and, if any provision of this Agreement shall be finally determined to be void, illegal or unenforceable, then it is the parties’ desire and intention that such provision be deemed automatically adjusted to the minimum 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 9 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

extent necessary to conform to applicable requirements of validity, legality and enforceability and, as so adjusted, be deemed a provision of this Agreement as if it were originally included herein; provided, however, if such provision cannot be adjusted without substantially and materially altering the rights and duties hereunder and fundamentally depriving one party of the benefit of the bargain (taken as a whole) contemplated by this Agreement, then the parties will seek to reform this Agreement through the procedure outlined in Section 18(e) above so as to restore, as nearly as possible, the parties’ respective rights, duties, and bargain.  In any case, the remaining provisions of this Agreement shall remain in effect.

 

(g)  No Waiver.  No delay or omission by either party hereto to exercise any right or power occurring upon any non-compliance or default by the other party with respect to any of the terms of this Agreement shall impair any such right or power or be construed to be a waiver thereof.  A waiver by either of the parties hereto of any of the covenants, conditions or agreements to be performed by the other shall not be construed to be a waiver of any succeeding breach thereof or of any other covenant, condition, or agreement herein contained.  Unless otherwise stated, all remedies provided for in this Agreement shall be cumulative and in addition to and not in lieu of any other remedies available to either party at law, in equity, or otherwise.

 

(h)  Notices.  Under this Agreement, if one party is required or permitted to give notice to the other, such notice shall be deemed given if mailed by registered or certified first class mail, postage paid with return receipt requested, or if sent by facsimile, with receipt confirmed, and addressed as follows (or as subsequently noticed to the other party):

 

Digital Matrix Systems, Inc.

15301 Spectrum Drive, 2nd Floor

Addison, TX 75001-6466

ATTN:  Contracts Department

Telephone: (972) 341-0000

Fax:  (972) 341-3600

 

Intersections Inc.

President, Identity Guard

3901 Stonecroft Blvd.

Chantilly, VA  20151

ATTN: President, Identity Guard 

CC: Chief Risk Officer & Chief Legal Officer

Fax: (703) 488-1757

 

(i)  Binding Effect; No Assignment.  This Agreement shall inure to the benefit of and be binding upon and enforceable against each party and it successors and assigns.  Intersections may not sell, assign, convey, sublicense or transfer this Agreement or its rights or obligations hereunder 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 10 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

through merger, acquisition, sale of all or substantially all of Intersections' assets, or otherwise without the prior written consent of DMS.  Any assignment, transfer, conveyance or sublicense in violation of this paragraph shall be null and void.

 

(j) Authority.  DMS and Intersections each represent to the other that the execution, delivery, and performance of this Agreement by such party have been duly approved by all necessary corporate action, and do not conflict with, or result in a material breach of the articles of incorporation or by-laws of such party, any material agreement by which such party is bound, or any law, regulation, rule, judgment, or decree of any governmental instrumentality or court having competent jurisdiction over such party.  Each party further represents that this Agreement has been duly executed by such party and constitutes a valid and legally binding obligation of such party enforceable in accordance with its terms.

 

 

Signature Page Follows

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 11 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

 

DIGITAL MATRIX SYSTEMS, INC.

 

 

		
	
By:
	
/s/ David McGough

	
Name:
	
David McGough

	
Title:
	
CEO, Digital Matrix Systems, Inc.

 

 

 

INTERSECTIONS INC.

 

 

		
	
By:
	
/s/ Johan J. Roets

	
Name:
	
Johan J. Roets

	
Title:
	
President, Identity Guard

 

 

 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 12 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

Exhibit A – Service Level Agreement

 

THIS EXHIBIT A (“Exhibit A”) is attached to and made a part of the DATA SERVICES AGREEMENT dated September 26, 2016 (the “Agreement”), by and between Intersections Inc. (“Intersections”) and Digital Matrix Systems (“DMS”).  Capitalized terms used in this Exhibit A have the meanings attributed to them in the Agreement.

 

1.Product and Services Support.  DMS will respond to Intersections’ request for support services (“Support”) regarding the DMS Services in accordance with the procedures identified below.  In each case, Intersections may describe the problem by telephone, facsimile or electronic mail.  DMS shall use commercially reasonable efforts to meet the obligations under this Exhibit A. 

 

Telephone Support.  As part of DMS Services, DMS shall provide technical support personnel accessible by toll-free telephone on a 24/7 basis for the resolution of technical questions and DMS Services Errors as further defined and described herein.  Without limitation of the foregoing, DMS shall provide to Intersections, without additional charge, all reasonably necessary telephone consultation requested in connection with Intersections’ use and operation of the DMS Services or any problems therewith.

 

Notice of Errors; Error Correction.  As part of Support, DMS shall provide the services set forth below:

 

(a)Error Classifications.  Each error or problem with the DMS Services (“Error”) encountered by Intersections and under the responsibility of DMS as provided for in this Agreement will be classified into one of the following classifications: 

 

(i)Class 1 Error.  A “Class 1 Error” is any Error that renders continued use of the Services either impossible or substantially interrupts the use of the Services or normal business operations of Intersections.

(ii)Class 2 Error.  A “Class 2 Error” is any material nonconformance of the Services with its specifications, documentation or the applicable Exhibit A that is not a Class 1 Error.

(iii)Class 3 Error.  A “Class 3 Error” is any Error that is not a Class 1 Error or a Class 2 Error.

(iv)Notification of Errors and Escalation.  DMS shall provide to Intersections a contact person for Intersections to contact in order to report an Error or to notify DMS that Support is not being provided as set forth herein. 

(iv)Response to Error Notification.  Intersections will inform DMS of the Error Class when initially contacting DMS.  The Error class will be used to determine DMS’s required response time to Intersections.  From the time that an Error was reported to DMS, DMS shall respond to Intersections prior to expiration of the times listed below for each 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 13 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

class of Error.   The beginning point for calculation of the response time is when a voice message or digital page is left with the DMS contact person at 1-800-367-1800.  

 

		
	
*****
	
*****

	
*****
	
*****

	
*****
	
*****

	
*****
	
*****

 

(b)Documentation and Correction of Errors.

 

(i)Class 1 Errors and Class 2 Errors.  For any Class 1 Error or Class 2 Error, Intersections shall provide DMS sufficient documentation to enable DMS to reproduce the Error and DMS shall then take all reasonably necessary steps to supply a correction to Intersections as soon as practicable.  If DMS is unable to reproduce a Class 1 Error or Class 2 Error, the parties will work in good faith to correct such Error on a mutually agreed-upon schedule.  This will include assigning qualified, dedicated staff to work on the Error.  Upon detecting or being notified of a Class 1 Error or Class 2 Error, DMS shall assemble the appropriate personnel to analyze the problem, identify potential solutions and determine the best plan of action (which may include providing a temporary work-around until a permanent correction can be provided).  Intersections shall be permitted to participate in this process.  A DMS representative shall keep Intersections continuously informed of the status.  If DMS provides Intersections with a workaround for a Class 1 Error, such Error will be re-classified as a Class 2 Error.

 

(ii)Class 3 Errors.  For any Class 3 Error, DMS shall work with Intersections to document the Error through mutually established standards.  Class 3 Errors shall be resolved according to mutually agreed priorities.  DMS personnel shall be dedicated to resolving Class 3 Errors through DMS’s normal software support procedures, but in any event, each Class 3 Error shall be resolved no later than the date of next release of the applicable software and DMS Services.

 

2. Scheduled Maintenance and Notifications 

Standard Maintenance Windows.  DMS will use commercially reasonable efforts to schedule maintenance on Sundays between the hours of 12:01am and 4:00 am Central Time North America.

 

Notification of Scheduled Maintenance Downtime.  DMS will notify Intersections of any Scheduled Maintenance Downtime that will occur outside of the Standard Maintenance Windows outlined above.  Except in cases of emergency, notification will be provided at least one business day prior to such downtime.  In cases of emergency, DMS will use commercially reasonable efforts to notify Intersections of a planned downtime as soon as practicable.  

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 14 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

 

	
3.  
	
Detailed Service Level Requirements SLA for the following: 

	
 
	
(a)
	
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(b)
	
*****

	
 
	
(c)
	
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(d)
	
*****

 

						
	
 
	
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This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 15 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

						
	
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(1)*****.

 

(2)*****.

 

*****.

 

	
 
	
•
	
*****:

 

*****

 

Recovery Time Objective (RTO) – DMS shall have twenty-four (24) hours to restore the Services outlined in the Agreement in the event of a disaster or major disruption in the Services.

 

Recovery Point Objective (RPO) – DMS shall restore the datavault application data associated with the Services with a forty-eight (48) hour maximum loss of data measured from the point of any failure of the Services as outlined in the RTO.

 

The RPO and RTO shall each be an SLA Requirement.

 

SLA Penalties – during the initial ninety (90) days of the Services, the parties agree that no SLA penalties shall apply until the parties mutually agree on the final SLA Requirements.

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 16 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

 

	
 
	
o
	
In the event DMS fails to meet individual SLA Requirements as measured over the course of a calendar month period, DMS shall pay Intersections 3% of the monthly Third Party Data Processing and Retention Services fee for each SLA Requirement not met (with maximum payment in any month of 12%) reported by Intersections and confirmed by DMS or reported by DMS and confirmed by Intersections.  

	
 
	
o
	
Ten percent (10%) of the monthly Third Party Data Processing and Retention Services fee shall be credited to Intersections for availability of the Services at less than 95% as measured over a calendar month period.

 

4.SLA Reporting.  DMS shall provide reporting to Intersections, no later than the 10th business day of each month for the previous month, to verify its compliance with SLAs set forth in this Section 3 of this Exhibit A. 

 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 17 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

Exhibit B – Data Providers and Data Retention Services Include:

 

*****

 

 

 

 

 

 

 

 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 18 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

EXHIBIT C

Information security requirements

1.Purpose.  *****.

	
2.
	
Information Security Safeguards.

2.1Appropriate Safeguards.  *****.  

a.Standards & Practices.  *****.

b.Updates.  *****.

2.2Authorized Persons.  *****.

2.3DMS Information Security Policies.  *****. 

3.Vulnerability Assessments.  *****.   

4.Third Party Security Assessment Questionnaire.  *****.

5.Information Security Infrastructure.

5.1Access Controls.  *****.

5.2Password Administration.  *****. 

5.3Access Justification/Authorization Process. *****.

5.4Encryption.  *****.  

5.5Network and Host Security.  *****.

6.Permitted Uses and Disclosures of Personal Information.  *****.

7.Security Breach Management.

7.1Notice.  *****. 

7.2.Remediation.  *****.

7.3.Customer Notices.  *****.

8.Return of Records.  *****.

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 19 of 20

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15301 Spectrum Drive, Second Floor, Addison, TX 75001 

 

 

 

This document is confidential and the proprietary information of Digital Matrix Systems, Inc. and shall not be disclosed without written permission.

Digital Matrix Systems, Inc.                                                                                                                                                                    Page 20 of 20

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