EXHIBIT 10(PP)
AGREEMENT
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Physicians Reciprocal Insurers ("PRI") and Administrators for the Professions,
Inc. ("AFP") are parties to an Amended and Restated Management Agreement dated
as of January 1, 1999 (the "Management Agreement"). By separate instrument, PRI
and AFP are amending the Management Agreement as indicated on exhibit A
(attached). In connection with such amendment to the Management Agreement, AFP
and PRI are entering into the agreements set forth herein in order to implement
the deletion of the sharing of Net Income or Net Loss pursuant to Section 7 of
the Management Agreement and to take into account any future events that may
have resulted in a redetermination of the profit share amounts previously earned
by AFP with respect to the years 1999, 2000, and 2001 had the sharing of Net
Income or Net Loss continued in effect. In addition, in connection with such
amendment, AFP has agreed to pay simple interest of 6% per annum on amounts
earned pursuant to the sharing Net Loss Income or Net Loss under Section 7 of
the Management Agreement for the years 1999, 2000, and 2001, and has executed
three Promissory Notes dated January 1, 2002, in favor of PRI to reflect such
payments.
As of December 31, 1999, the profit share amount earned by AFP with
respect to 1999 was $1,676,627. As of December 31, 2004, should this profit
share amount be less than $1,676,627 for reasons specified above, then AFP shall
pay to PRI the amount of any difference. As of December 31, 2004, should this
profit share amount be more than $1,676,627, then PRI shall pay to AFP the
amount of any difference. As of December 31, 2004, should this profit share
amount remain unchanged at $1,676,627 then all obligations hereunder are
extinguished.
As of December 31, 2000, the profit share amount earned by AFP with
respect to 2000 was $1,590,128. As of December 31, 2005, should this profit
share amount be less than $1,590,128 for reasons specified above, then AFP shall
pay to PRI the amount of any difference. As of December 31, 2005, should this
profit share amount be more than $1,590,128, then PRI shall pay to AFP the
amount of any difference. As of December 31, 2005, should this profit share
amount remain unchanged at $1,590,128 then all obligations hereunder are
extinguished.
As of December 31, 2001, the profit share amount earned by AFP with
respect to 2001 was $281,682. As of December 31, 2006, should this profit share
amount be less than $281,682 for reasons specified above, then AFP shall pay to
PRI the amount of any difference. As of December 31, 2006, should this profit
share amount be more than $281,682, then PRI shall pay to AFP the amount of any
difference. As of December 31, 2006, should this profit share amount remain
unchanged at $281,682 then all obligations hereunder are extinguished.
This Agreement may only be amended or modified with the written consent
of the parties hereto. The rights and privileges to which AFP and PRI are
entitled under this Agreement cannot be assigned, disposed of, charged or
transferred by either party in any way whatsoever.
This Agreement shall be binding upon and for the benefit of the parties
hereto. This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes any and all prior agreements
or understandings between the parties relating to the subject matter hereof,
oral or written, all of which are hereby merged into this Agreement. There are
no promises, agreements, conditions, understandings, warranties, or
representations, oral or written, express or implied, between the parties
hereto, other than as set
forth in this Agreement. This Agreement has been approved by the New York
Department of Insurance and shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to the principles
of conflicts of laws thereof. The parties hereto agree that any action or
proceeding arising directly, indirectly, or otherwise in connection with, out
of, related to, or from this Agreement, any breach hereof, or any transaction
covered hereby, shall be resolved, whether by arbitration or otherwise, within
the County, City, and State of New York. Accordingly, the parties consent and
submit to the jurisdiction of the federal and state courts and any applicable
arbitral body located within the County, City and State of New York.
Any dispute, controversy or claim relating to this Agreement shall be
finally settled under the rules of the American Arbitration Association (the
"AAA") in effect from time to time. A single arbitrator shall be appointed by
agreement between the parties or, failing such agreement, by the AAA. The
arbitrator may grant any remedy that he deems just and equitable within the
scope of this Agreement. The award of the arbitrator shall be final and binding
and judgement thereon may be entered in any court having jurisdiction. The costs
and expenses (including reasonable attorney's fees) of the prevailing party
shall be borne and paid by the party that the arbitrator determines is the
non-prevailing party, regardless of whether the arbitrator specifically
determines to award such fees.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
day and year indicated below as conclusive evidence of their acceptance of the
terms and conditions of this Agreement.
ADMINISTRATORS FOR THE PROFESSIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
and President
PHYSICIANS' RECIPROCAL INSURERS
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chairman
Dated: September 18, 2002
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AMENDMENT TO MANAGEMENT AGREEMENT EXHIBIT A
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This Amendment is made and entered into as of January 1, 2002
by and between Physicians' Reciprocal Insurers, a New York domiciled Reciprocal
Insurer ("PRI") and ADMINISTRATORS FOR THE PROFESSIONS, INC., a New York
Corporation ("AFP").
WHEREAS, AFP and PRI desire to further amend the AMENDED AND
RESTATED MANAGEMENT AGREEMENT dated as of January 1, 1999.
NOW, THEREFORE, in consideration of the foregoing and the
terms and conditions hereafter set forth, the parties hereto agree as follows:
The first paragraph of Section 7 is amended to read, in its
entirety, as follows:
7. Compensation AFP's compensation for its services under this
AGREEMENT for each calendar year during the term hereof shall equal 13% of PRI's
direct written premium.
Paragraph (f) of Section 7 (K) is renumbered as (L).
The following subdivision is added to Section 7:
M. Fifty percent (50%) of the costs attributable to AFP's Risk
Management Department, including but not limited to salaries, fringe benefits
and overhead expenses of the staff employed in the Department.
IN WITNESS WHEREOF, this Amendment has been duly executed by
the parties as of the date first above written.
Physicians' Reciprocal Insurers Administrators for the Professions, Inc.
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------ -------------------------------------
Title: Chairman Title: Chief Executive Officer
and President
PROMISSORY NOTE
U.S. $ 301,792.86
Date: January 1, 2002
Manhasset, New York
FOR VALUE RECEIVED, the undersigned, Administrators for the
Professions, Inc., ("Maker"), with its principal office located at 000 Xxxx
Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000, hereby promises to pay to Physicians'
Reciprocal Insurers ("PRI" or "Payee"), at the offices of PRI located at 000
Xxxx Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000, the following amount, in lawful
money of the United States of America, on the indicated date:
Amount Date
------ ----
$ 100,597.62 December 31, 2002
$ 100,597.62 December 31, 2003
$ 100,597.62 December 31, 2004
This Note has been executed in consideration of the Agreement dated
September 9, 2002, between the Maker and Payee and has been approved by the New
York Department of Insurance. Each amount is the calculated amount of interest,
at the simple interest rate of 6 %, on the PRI profit share earned by AFP for
the year 1999 of $ 1,676,627 pursuant to its Management Agreement with PRI dated
January 1, 1999, and the related Amendment to the Management Agreement.
PRI shall hereby have the right, at any time, with or without notice to
the Maker, to offset any amount due and unpaid under this Note, against
compensation due to Maker from PRI.
The Maker of this Note waives demand, presentment, protest, notice of
protest and notice of dishonor thereof. The Maker shall pay all reasonable costs
of collection, including, without limitation, court costs, reasonable attorneys'
fees and expenses, and all other expenses of collection permitted by law.
This Note may not be changed, waived, modified, discharged or
terminated orally, but only by an agreement in writing signed by the party
against whom enforcement of any such change, waiver, modification, discharge or
termination is sought.
This Note shall be deemed to have been negotiated, entered into, made
and delivered in the State of New York, and the validity, interpretation and
legal effect of this Note, shall be governed by the laws of the State of New
York applicable to contracts entered into and performed entirely within the
State of New York, without regard to principles of conflicts of law.
The New York courts (state and federal) will have exclusive jurisdiction of any
action brought by Payee to enforce this Note, and any action brought by Payee to
enforce this Note will be brought in those courts, and not elsewhere. The Maker
accordingly hereby consents to the jurisdiction of said courts. To the fullest
extent permitted by law, Maker hereby irrevocably waives trial by jury in any
judicial proceeding brought by Payee to enforce this Note.
IN WITNESS WHEREOF, the Maker has executed this Note as of the date
first above written.
ADMINISTRATORS FOR THE PROFESSIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
and President
2
PROMISSORY NOTE
U.S. $ 381,630.72
Date: January 1, 2002
Manhasset, New York
FOR VALUE RECEIVED, the undersigned, Administrators for the
Professions, Inc., ("Maker"), with its principal office located at 000 Xxxx
Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000, hereby promises to pay to Physicians'
Reciprocal Insurers ("PRI" or "Payee"), at the offices of PRI located at 000
Xxxx Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000, the following amount, in lawful
money of the United States of America, on the indicated date:
Amount Date
------ ----
$ 95,407.68 December 31, 2002
$ 95,407.68 December 31, 2003
$ 95,407.68 December 31, 2004
$ 95,407.68 December 31, 2005
This Note has been executed in consideration of the Agreement dated
September 9, 2002, between the Maker and Payee and has been approved by the New
York Department of Insurance. Each amount is the calculated amount of interest,
at the simple interest rate of 6 %, on the PRI profit share earned by AFP for
the year 2000 of $ 1,590,128 pursuant to its Management Agreement with PRI dated
January 1, 1999, and the related Amendment to the Management Agreement.
PRI shall hereby have the right, at any time, with or without notice to
the Maker, to offset any amount due and unpaid under this Note, against
compensation due to Maker from PRI.
The Maker of this Note waives demand, presentment, protest, notice of
protest and notice of dishonor thereof. The Maker shall pay all reasonable costs
of collection, including, without limitation, court costs, reasonable attorneys'
fees and expenses, and all other expenses of collection permitted by law.
This Note may not be changed, waived, modified, discharged or
terminated orally, but only by an agreement in writing signed by the party
against whom enforcement of any such change, waiver, modification, discharge or
termination is sought.
This Note shall be deemed to have been negotiated, entered into, made
and delivered in the State of New York, and the validity, interpretation and
legal effect of this Note, shall be governed by the laws of the State of New
York applicable to contracts entered into and
performed entirely within the State of New York, without regard to principles of
conflicts of law. The New York courts (state and federal) will have exclusive
jurisdiction of any action brought by Payee to enforce this Note, and any action
brought by Payee to enforce this Note will be brought in those courts, and not
elsewhere. The Maker accordingly hereby consents to the jurisdiction of said
courts. To the fullest extent permitted by law, Maker hereby irrevocably waives
trial by jury in any judicial proceeding brought by Payee to enforce this Note.
IN WITNESS WHEREOF, the Maker has executed this Note as of the date
first above written.
ADMINISTRATORS FOR THE PROFESSIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
and President
2
PROMISSORY NOTE
U.S. $ 84,504.60
Date: January 1, 2002
Manhasset, New York
FOR VALUE RECEIVED, the undersigned, Administrators for the
Professions, Inc., ("Maker"), with its principal office located at 000 Xxxx
Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000, hereby promises to pay to Physicians'
Reciprocal Insurers ("PRI" or "Payee"), at the offices of PRI located at 000
Xxxx Xxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000, the following amount, in lawful
money of the United States of America, on the indicated date:
Amount Date
------ ----
$ 16,900.92 December 31, 2002
$ 16,900.92 December 31, 2003
$ 16,900.92 December 31, 2004
$ 16,900.92 December 31, 2005
$ 16,900.92 December 31, 2006
This Note has been executed in consideration of the Agreement dated
September 9, 2002, between the Maker and Payee and has been approved by the New
York Department of Insurance. Each amount is the calculated amount of interest,
at the simple interest rate of 6 %, on the PRI profit share earned by AFP for
the year 2001 of $ 281,682 pursuant to its Management Agreement with PRI dated
January 1, 1999, and the related Amendment to the Management Agreement.
PRI shall hereby have the right, at any time, with or without notice to
the Maker, to offset any amount due and unpaid under this Note, against
compensation due to Maker from PRI.
The Maker of this Note waives demand, presentment, protest, notice of
protest and notice of dishonor thereof. The Maker shall pay all reasonable costs
of collection, including, without limitation, court costs, reasonable attorneys'
fees and expenses, and all other expenses of collection permitted by law.
This Note may not be changed, waived, modified, discharged or
terminated orally, but only by an agreement in writing signed by the party
against whom enforcement of any such change, waiver, modification, discharge or
termination is sought.
This Note shall be deemed to have been negotiated, entered into, made
and delivered in the State of New York, and the validity, interpretation and
legal effect of this Note, shall be governed by the laws of the State of New
York applicable to contracts entered into and performed entirely within the
State of New York, without regard to principles of conflicts of law. The New
York courts (state and federal) will have exclusive jurisdiction of any action
brought by Payee to enforce this Note, and any action brought by Payee to
enforce this Note will be brought in those courts, and not elsewhere. The Maker
accordingly hereby consents to the jurisdiction of said courts. To the fullest
extent permitted by law, Maker hereby irrevocably waives trial by jury in any
judicial proceeding brought by Payee to enforce this Note.
IN WITNESS WHEREOF, the Maker has executed this Note as of the date
first above written.
ADMINISTRATORS FOR THE PROFESSIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
and President
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