Service Agreement Amendment
Agreement effective January 1, 2000, by and between Penn Independent
Corporation, 000 X. Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx, 00000 ("PIC") and
Penn-America Group, Inc., 000 X. Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx, 00000
("PAGI").
WHEREAS, the parties hereto are parties to a Service Agreement dated
August 20, 1993, as most recently amended effective January 1, 1999 (the
"Service Agreement"), and
WHEREAS, the parties wish to amend the Service Agreement effective as
of the effective date of this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements contained herein, and intending to be legally bound,
the parties hereto agree that PAGI will pay to PIC a "monthly expense estimate",
as follows:
(1) Effective January 1, 2000 through June 30, 2000, PAGI will pay to PIC
$16,700 (approx.) per month.
In accordance with paragraph 3 of the original Service Agreement dated
August 20, 1993, the parties agree to meet prior to June 30, 2000 to discuss any
adjustments required to the monthly expense estimate. In the event of any
shortfall between what PAGI is paying and what PAGI should be paying, the
difference will be adjusted in the monthly expense estimate for the period from
July 1, 2000 to December 31, 2000. In the event of any disagreement between PIC
and PAGI, the parties shall in good faith attempt to resolve any dispute arising
out of the interpretation or implementation of the agreement and this Amendment.
The parties agree that the "monthly expense estimate" is based on: (a)
telephone, insurance and building rental; and, (b) expenses for the salaries of
Xxxxx Xxxxxxxx, Human Resources and office services and facilities management
expenses, as more fully set forth in the attachments hereto, which are
incorporated herein as though fully set forth at length.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first above written.
PENN INDEPENDENT CORPORATION PENN-AMERICA GROUP, INC.
BY: /s/ Xxxxx X. Xxxxxxx BY: /s/ Xxxxxxxx Xxxxxxx
Penn America Group, Inc.
Monthly Expense Estimate
2000
Total Percent* Rounded
----- -------- -------
Telephone 26,500 6.89% 1,827 2,000
Insurance 20,000 6.89% 1,379 1,000
Rent 104,000 6.89% 7,171 7,000
Total 10,000
EE Cost Percent Total Rounded
Xxxxx Xxxxxxxx*** 282,755 19.00% 53,723 54,000
Human Resources** 179,269 39.42% 70,661 71,000
Office Services** 101,575 39.42% 40,037 40,000
Facilities Mgmt**** 67,716 46.62% 31,571 32,000
Total 197,000
Estimated annual savings based on reduction of Xxxxx Xxxxxxxx'x
time to be recalculated July 1, 2000. (30,000)
Retirement Packages 23,000
Total Allocated 200,000
=======
Monthly Estimate 16,667
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*Calculated as follows:
Office Services 60% 101,575 39.42% 40,037
Facilities Mgmt 40% 67,716 46.62% 31,571
WTD AVG
Total 169,291 71,608 42.30%
Square Footage:
Mail Room 450
Supplies 320
Total 770 42.30% 326
Human Resources 1,050 39.42% 414
Xxxxx Xxxxxxxx Office 776 19.00% 147
Allocated Total Sq. Footage 887
Total PIC Square Footage 12,869
Penn-America Allocation % 6.89%
**108 PAGI headcount as of 1/1/2000; 274 headcount
all PIC entities and PennAmerica as of 1/1/2000 = 39.42%.
*** Fixed percentage used each year.
**** Facilities Management based on square footage 23426/50246.
CONFIDENTIAL
