Exhibit 10.17
ENVIRONMENTAL PLACEMENT SERVICE AGREEMENT
This Agreement is entered into effective September 17, 2001 (the
"Effective Date") by and between USI Insurance Services of Texas, Inc. d/b/a USI
--Environmental Risk Mitigation Group. ("USI"), and Chubb Financial Solutions
Division of Federal Insurance Company ("Chubb").
1. Eligible Lines of Insurance: USI is eligible to receive a commission
(as described in paragraph 3) on risk transfer environmental business
for Environmental Site Liability, Collateral Impairment And
Environmental Site Liability, Remediation Cost Cap, Contractors
Pollution Liability, or any other environmental liability insurance
developed by Chubb (collectively referred to as the "Products"), placed
(worldwide) with Chubb by USI. This agreement does not include premium
for finite funding but does include risk transfer premium included in
finite transactions.
2. Term of the Agreement: This agreement shall be effective for the
period beginning September 17, 2001, and ending December 31, 2002,
unless terminated under the circumstances described in paragraph 4.
"Advance Payment" or paragraph 12. "Key Man".
3. Commission: The standard commission payable to USI for any accounts
placed with Chubb by USI which are eligible lines of insurance as
described in paragraph 1, shall be ten percent (10%) of gross written
premium. Additionally, if USI achieves its Gross Written Premium
Targets in accordance with the schedule set forth below, Chubb shall
pay the additional corresponding override percentage on gross written
premium provided that incurred loss at each such time does not exceed
50% of the amount of premium collected as of such date. The total
amount to be paid to USI for standard commission and additional
override under this agreement shall not exceed 13% of gross written
premium. For purposes of this agreement "gross written premium" means
the total premium for insurance
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policies which incept during the term of the agreement as set forth in
paragraph 2 which are billed by Chubb, excluding any renewal premium,
Finite Funded premium or premium for any Chubb account that was
initiated by another party but for which USI has become broker of
record and "incurred loss" means paid losses and outstanding loss
reserves for loss to which the insurance which is the subject of this
agreement applies.
----------------------------- ----------------------------------------- ----------------
Target Date Gross Written Premium Override
Target
----------------------------- ----------------------------------------- ----------------
June 30, 2002 $ 7,000,000 N/A
----------------------------- ----------------------------------------- ----------------
September 30, 2002 $14,000,000 2%
----------------------------- ----------------------------------------- ----------------
December 31, 2002 $20,000,000 3%
----------------------------- ----------------------------------------- ----------------
4. Advance Payment: Chubb agrees to advance standard commission to
USI at the address set forth in paragraph 7 in accordance with the
following schedule, such advance payment amounts to be deducted from
commissions earned by USI as calculated under paragraph 3:
-------------------------------------------- ------------------------------------------
Advance Date Advance Amount
-------------------------------------------- ------------------------------------------
Execution of this Agreement $ 300,000
-------------------------------------------- ------------------------------------------
March 31, 2002 $ 175,000
-------------------------------------------- ------------------------------------------
June 30, 2002 $ 175,000
-------------------------------------------- ------------------------------------------
September 30, 2002 $ 175,000
-------------------------------------------- ------------------------------------------
December 31, 2002 $ 175,000
-------------------------------------------- ------------------------------------------
provided that if USI fails to achieve its Gross Written Premium Target
for June 30, 2002, or any subsequent Gross Written Premium Target as
set forth in paragraph 3, Chubb is not obligated to pay any further
Advance Amount unless
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and until such premium target is achieved. Furthermore, if USI fails
to achieve its Gross Written Premium Target for two consecutive
quarters, Chubb may, at its sole election, terminate this agreement
and USI shall immediately reimburse Chubb for any amount Chubb paid as
an advance amount in excess of $300,000.00 to the extent such advance
amount exceeds any commission owed to USI as calculated in accordance
with Paragraph 3.
5. Marketing Materials: USI may not distribute any marketing or other
promotional materials including, but not limited to press releases,
brochures, or PowerPoint presentations (i) describing the Products or
Chubb; (ii) using Chubb's name or the name of any of its affiliate,
member companies or associated companies, or (iii) using Chubb's logos,
trademarks, tradenames or service marks, without the prior written
approval of Chubb.
6. Volume Establishment: Chubb will make all computations required by
this agreement, including the coding and classifying of all business
written, in accordance with our usual accounting, claims and
statistical methods and procedures. All such computations shall
be final.
7. Notifications or Payments: Any notifications or payments required to
be made under this agreement shall be sent to:
For USI:
--------
Xxxxx Xxxxxxx
USI- Environmental Risk Mitigation Group
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Copy to:
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General Counsel
USI Insurance Services Corp.
00 Xxxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
For Chubb:
----------
Xxxx X. Xxxxxx
Chief Underwriting Officer
Chubb Financial Solutions Division of Federal Insurance Company
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
or to such other person or address as USI or Chubb may from time to
time so designate.
8. Confidentiality: The terms of this agreement are confidential and
shall not be disclosed by either party except as may be required by
law. Other than necessary internal disclosure of this agreement or
disclosure to auditors or regulators necessary the intent of this
provision is to keep this agreement confidential from competitors.
9. Licenses: USI will be responsible for maintaining applicable licenses
required for the proper conduct its duties under this agreement and
will be responsible for any damages, penalties, fines and liabilities
incurred by Chubb as a result of any violation of this section.
10. Amendment: No amendment or modification of this agreement shall bind
either party hereto unless made in writing and signed by both parties.
No waiver of any term or condition hereof or obligation hereunder shall
be valid unless made in writing and signed by the party to which
performance is due.
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11. Relationship: Nothing in this agreement will be construed as creating
the relationship of employer and employee, partners or joint venturers
between USI and Chubb, or between Chubb and any of USI's employees or
representatives. It is the express intent of the parties hereto that
USI is not an employee, partner or joint venturer of Chubb for any
purpose, but is an independent contractor for all purposes and in all
situations.
12. Key Man: The parties hereby acknowledge that Chubb has entered into
this agreement based upon the association of Xxxxx Xxxxxxx with
USI. If Xxxxx Xxxxxxx leaves the employment of USI, Chubb, at its sole
discretion, may terminate this agreement.
13. Choice of Law: This agreement shall be interpreted in accordance with
the law of the State of New York, without regard to any conflict of
law provisions.
14. Entire Agreement: This Agreement contains the entire agreement between
USI and Chubb concerning the subject matter hereof, and no
modifications of this agreement or waiver of the terms and conditions
hereof will be binding USI or Chubb unless approved in writing by each
of the parties hereto.
15. Counterparts: This agreement may be executed in multiple counterparts
each of which shall be considered an original but all of which, when
taken together, shall constitute but one and the same document.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first above-written.
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Chubb Financial Solutions Division of
USI Insurance Services of Texas, Inc. Federal Insurance Company
d/b/a USI--Environmental Risk
Mitigation Group
------------------------------------------------------- -------------------------------------------------
By: /s/ R. Xxxxx Xxxxxxx By: /s/ Xxxx X. Xxxxxx
------------------------------------------------------- -------------------------------------------------
R. Xxxxx Xxxxxxx, SVP and Managing Xxxx X. Xxxxxx, Vice President & Chief
Director, USI--Environmental Risk Underwriting Officer
Mitigation Group Environmental Solutions Division
------------------------------------------------------- -------------------------------------------------
Date Date
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