EXHIBIT 4.52
THIS AGENCY AGREEMENT IS MADE EFFECTIVE THE 1st DAY OF JANUARY, 2005
BETWEEN:
ADDISON YORK INSURANCE BROKERS LTD.
a body corporate incorporated pursuant to the
laws of the State of Delaware
(hereinafter referred to as "AYI")
- and -
XXXXXXXXX INSURANCE AGENCY, INC.
a body corporate incorporated
pursuant to the laws of the State of Illinois
(hereinafter referred to as "Schuneman")
WHEREAS AYI, Xxxxxxxxx, Xxx Xxxxx and Xxxx X. Feather have made, executed and
delivered a certain Asset Purchase Agreement dated effective as of January 1st,
2005 (the "APA").
AND WHEREAS in accordance with the terms of the APA Xxxxxxxxx, Xxx Xxxxx and
Xxxx X. Feather have executed and delivered a Disclosure Schedule (the
"Disclosure Schedule") dated effective January 1st, 2005, to AYI.
AND WHEREAS as at the date of the APA, AYI may not have obtained all of the
necessary regulatory approvals to operate as an insurance broker or agent in the
State of Illinois and AYI has not obtained all of the Carrier Appointments from
those carriers listed in Schedule "B" of the Disclosure Schedule.
AND WHEREAS pursuant to the terms of the APA, Xxxxxxxxx has agreed to enter into
this Agency Agreement in order to allow AYI to process its clients insurance
policies through Xxxxxxxxx, whereby AYI shall receive all revenues therefrom and
shall pay all of Xxxxxxxxx'x reasonable out of pocket expenses and costs
associated therewith in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein and in the APA, the parties hereto agree as follows:
1.00 DEFINITIONS
1.01 Any word, term or phrase that is defined in the APA and not otherwise
defined herein shall, when used as a defined term in this Agreement, have
the same meaning that each respectively has when used as a defined term in
the APA.
1.02 The following are the Schedules which are to be attached to and are
incorporated into this Agreement by reference and are deemed to be a part
hereof:
a) Schedule "A" Budget;
b) Schedule "B" Bank Accounts;
c) Schedule "C" Director's Resolution; and
d) Schedule "D" Employees;
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2.00 WARRANTIES AS TO LICENCE
2.01 Xxxxxxxxx for the benefit of AYI represents, warrants and covenants that:
a) Xxxxxxxxx holds all the licenses and permits required for an agent and
an agency in the State of Illinois;
b) the employees of Xxxxxxxxx hold all applicable licenses and permits
required for the performance of their duties as insurance brokers or
otherwise;
c) Xxxxxxxxx and its employees will maintain in good standing throughout
the Term of this Agreement, all the licenses and permits referred to
in paragraphs 2.01(a) and (b);
d) Xxxxxxxxx will not knowingly or negligently do, or omit to do,
anything that results in, or is likely to result in, the suspension or
revocation of such licenses or permits, during the Term of this
Agreement;
e) Xxxxxxxxx shall maintain the appropriate trust accounts and account
balances all in accordance with the laws, rules and regulations
governing the operation of an insurance agency and brokerage in the
State of Illinois; and
f) Xxxxxxxxx shall maintain in good standing its Carrier Appointment
Contracts with those insurance carriers or wholesalers set forth on
Schedule "B" of the Disclosure Schedule and any other carrier or
wholesaler appointments acquired during the Term hereof.
3.00 WORKING RELATIONSHIP OF XXXXXXXXX AND AYI
3.01 Except as otherwise specifically authorized by AYI in writing, Xxxxxxxxx
shall, for the sole and exclusive benefit of AYI and for the benefit of no
other person(s) whatsoever, market, sell, distribute, place and write
general insurance products to those persons set forth in the Client Files
and to any and all other potential customers who may wish to purchase
general insurance products.
3.02 AYI shall, during the Term of this Agreement, and to the extent required to
enable Xxxxxxxxx to function as an agent or broker, provide without charge
to Xxxxxxxxx, the basic office space and office equipment, required for the
administration of functioning of Xxxxxxxxx as an agent or broker. AYI shall
not be required to furnish the same for the conduct of any other business
of Xxxxxxxxx than the business of an insurance agent or broker.
3.03 Subject to the terms and conditions set forth herein and to AYI's prior
approval of all staffing levels, salaries and benefits, Xxxxxxxxx shall,
during the Term of this Agreement, provide all necessary insurance sales
and brokerage, clerical and stenographic services, required for the
administration and functioning of Xxxxxxxxx as an agent or broker.
3.04 Xxxxxxxxx shall assure that all files, computer records, and accounting
records kept by Xxxxxxxxx and all other internal operating systems of
Xxxxxxxxx are marked or designated to indicate which documents, matters and
entries pertain to Client Files. Xxxxxxxxx shall maintain a software system
that is capable of generating reports listing all of the Client Files and
basic related information.
3.05 Upon the request of AYI, Xxxxxxxxx shall, in a timely fashion, provide to
AYI any and all reports, financial statements, bank reconciliations,
contracts, agreements, memorandums or other documents of any nature or kind
whatsoever concerning the Business or Purchased Assets, including the
monthly financial statements of the Business which shall be delivered to
AYI within 15 days of the end of the month. In addition, Xxxxxxxxx shall
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permit AYI and its employees, agents, professional advisors, counsel and
accountants or other representatives to have access to all of the books,
accounts, records, agreements, contracts, documents, instruments and other
data of Xxxxxxxxx (including, without limitation, all corporate, business
and accounting records of Xxxxxxxxx) and Xxxxxxxxx shall furnish to AYI
such financial and operating data, agreements, contracts, documents,
instruments, and other materials and information with respect to Xxxxxxxxx
or the Business and the Purchased Assets as AYI shall from time to time
request.
3.06 AYI shall be responsible for the following reasonable and provable expenses
of Xxxxxxxxx:
a) all out of pocket expenses with respect to the operation of the
Business;
b) all of the costs and expenses incurred by Xxxxxxxxx in respect of
those matters set forth in paragraph 3.03;
c) all required license fees and other required regulatory fees necessary
to maintain Xxxxxxxxx'x status as an insurance agency or brokerage
under the laws of the State of Illinois or under the rules of any
professional or regulatory or licensing body having jurisdiction over
the affairs of Xxxxxxxxx or an insurance agency or brokerage in
general; and
d) other reasonable and necessary operational expenses incurred in the
normal day to day operation of the Business.
All as set forth in the budget (the "Budget") attached as Schedule "A"
hereto and forming a part hereof. Xxxxxxxxx warrants and agrees that it
must obtain the written consent of AYI prior to making any capital
expenditures or other expenditures in excess of the amounts set forth in
the Budget in respect of the better operation of the Business or the
servicing of the Client Files for which it intends to hold AYI responsible
for the payment thereof.
3.07 Xxxxxxxxx represents and warrants to AYI that it will conduct its
operations as an insurance agency or broker in accordance with the
established norms and customs of the insurance industry and will operate
the Business and service the Client Files as would a prudent operator
handling such matters.
3.08 Xxxxxxxxx represents and warrants to AYI that it shall, process the
revenues received by it and pay the expenses incurred from the Business and
Client Files through its general and trust bank accounts as more fully
described in Schedule "B" attached hereto and forming a part hereof (the
"Accounts"). Subject to the normal and reasonable controls placed on such
Accounts by the relevant banking institution, Xxxxxxxxx agrees that AYI
shall have the right to impose its own controls over the Accounts, to
designate the signing officers on the Accounts and to change the signing
officers on the Account from time to time as AYI deems prudent and
necessary. In order to give effect to the foregoing, Xxxxxxxxx further
agrees to execute the directors resolution (the "Directors Resolution")
attached as Schedule "C" hereto and forming a part hereof and deliver the
same to the Escrow Agent. The Escrow Agent shall hold the Directors
Resolution and deal with the same in accordance with the following terms:
(a) if Xxxxxxxxx is in default of the performance of its obligations as
set forth in this Agreement and AYI notifies the Escrow Agent of that
default and demands in writing that the Directors Resolution be
released to them, then the Escrow Agent shall, in accordance with the
terms of the Escrow Agreement, deliver the Directors Resolution to
AYI, and once delivered, the Escrow Agent shall be released from any
and all obligations concerning the Directors Resolution; or
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(b) upon the termination of this Agreement and if no notice of default has
been received by the Escrow Agent from AYI in accordance with the
terms of sub-paragraph (a), then the Escrow Agent shall deliver the
Directors Resolution to Xxxxxxxxx and once delivered, the Escrow Agent
shall be released from any and all obligations concerning the
Directors Resolution.
4.00 OWNERSHIP OF CLIENT FILES AND REVENUES THEREFROM
------------------------------------------------
4.01 Xxxxxxxxx acknowledges and agrees that the Client Files and all associated
tangible and intangible property, rights and choses in action associated
therewith are and shall remain the sole and exclusive domain and personal
property of AYI whether such files or documents therein or associated
rights bear or include the name of Xxxxxxxxx or any other trade name or
style of or associated with Xxxxxxxxx.
4.02 Subject to the interests of any joint venture agencies set forth in
Schedule "C" of the Disclosure Schedule and any new joint venture interests
which may be agreed to by AYI after the date hereof, Xxxxxxxxx further
acknowledges that any new client files or insurance business originated by
Xxxxxxxxx or AYI or their personnel from and after the date hereof and all
associated tangible and intangible property rights and choses in action
shall be and will remain the sole and exclusive domain and personal
property of AYI, whether such files or documents therein or associated
rights bear or include the name of Xxxxxxxxx or any other trade name or
style of or associated with Xxxxxxxxx and shall form part of the Client
Files.
4.03 Any and all commissions, fees, interest income earned on the Accounts or
otherwise, contingency fees or other revenues of any kind nature or
description whatsoever received by Xxxxxxxxx in connection with any Client
File or the Business shall be the sole and exclusive property of AYI (such
commissions, fees, interest income, contingency fees or revenues of any
kind nature or description whatsoever being referred to hereafter as the
"Revenues".
4.05 Xxxxxxxxx shall, immediately upon the demand of AYI, pay to AYI any and all
sums due and owing to AYI pursuant to the terms of this Agreement.
5.00 TERM OF AGREEMENT
-----------------
5.01 This Agreement shall be terminated upon the occurrence of the earliest of
the following events:
a) the date upon which AYI obtains:
i) all of the necessary regulatory approvals to operate as an
insurance broker or agent in the State of Illinois;
ii) all of the necessary regulatory approvals in respect of the
Assignment of employees to AYI; and
iii) all of the Carrier Appointments from those carriers listed in
Schedule "B" of the Disclosure Schedule (or such lesser number of
Carrier Appointments which may be satisfactory to AYI in its sole
and unfettered discretion); or
b) the 31st day of December, 2024; or
c) the date that AYI delivers written notice to Xxxxxxxxx that it is
terminating this Agreement; (the "Term").
5.02 Immediately upon the termination of this Agreement Xxxxxxxxx hereby agrees
to:
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a) assign all of its right title and interest in and to any and all
employment agreements, non-competition agreements and confidentiality
agreements which it may have with those employees set forth on
Schedule "D" attached hereto and forming a part hereof and with any
other employee not listed on Schedule "D" but who may be employed by
Xxxxxxxxx at the time of termination of this Agreement.
Notwithstanding the foregoing, AYI, in its sole and unfettered
discretion, retains the right not to accept the assignment of any
particular employee's agreement; and
b) pay over to AYI any and all monies remaining in the Accounts which are
or will become due and owing to AYI pursuant to the terms of this
Agreement
5.03 It is further agreed by AYI and Xxxxxxxxx that after termination of this
contract:
a) AYI agrees to allow Xxxxxxxxx to retain copies from such files of
those documents which by operation of law or in accordance with the
regulatory requirements either of the insurance licensing agencies or
of licensing or agency agreements with insurers, Xxxxxxxxx may be
specifically obliged to retain; and
b) Xxxxxxxxx further warrants that he will keep the files available and
intact and in order for the Government and insurance industries
prescribed time limits and that he will produce and make available all
files, papers and information that he possesses, in order to assist
AYI in any future query or disputes regarding the Client Files.
6.00 ERRORS AND OMISSIONS AND OTHER INSURANCE
6.01 During the Term hereof, Xxxxxxxxx represents and warrants that it shall
place and will keep in effect and in good standing the following insurance
coverages for the benefit of AYI:
a) an Errors & Omission policy covering Xxxxxxxxx with such coverage and
limits as shall be approved by AYI in its sole discretion;
b) proper and adequate coverage with respect to the Client Files and
Fixed Assets of AYI with such coverage and limits as shall be approved
by AYI in its sole discretion;
c) proper and adequate coverage with respect to the Business, the
Premises and the operations of an insurance agency thereon with such
coverage and limits as shall be approved by AYI in its sole
discretion; and
d) any other forms of insurance which AYI may require from time to time
in its sole discretion with such coverage and limits as shall be
approved by AYI.
6.02 AYI shall be responsible for the payment of all costs and expenses related
to the placement of the insurance matters set forth in paragraph 6.01
6.03 If after the date hereof and until the termination hereof, there is an
errors or omissions ("E&O") claim made against Xxxxxxxxx in respect of the
Client Files, then AYI shall pay all costs up to the deductible portion on
Xxxxxxxxx'x E&O policy, including any reasonable legal expenses incurred
thereon.
6.04 Xxxxxxxxx shall notify AYI immediately of any possible claim or occurrence
that could cause an E&O claim against Xxxxxxxxx, and Xxxxxxxxx agrees that
AYI, at its sole and unfettered discretion shall have conduct of the action
in respect of the claim or occurrence and Xxxxxxxxx shall provide its full
cooperation to AYI in respect of the claim or occurrence.
7.00 GENERAL
7.01 Notices to be given under this Agreement shall be given in writing to the
Parties at the following respective addresses, namely:
TO AYI: 355, 00000 Xxxxxxxxx Xxxx, XX
0
Xxxxxxx, Xxxxxxx, X0X 0X0
Attn: Primo Podorieszach
TO Schuneman: X.X. Xxx 000, Xxxxxxxx, Xxxxxxxx, 00000
or to such address as any Party may for itself stipulate by written notice
in accordance with this paragraph 7.01, and any notice so sent by single,
or double registered mail shall be deemed received on the seventh (7) day
following such posting unless the contrary be proved, the burden of such
proof being that of the person whose receipt of such notice in question.
7.02 This agreement shall be governed by, and be construed in accordance with,
the laws of the State of Illinois. In addition, the parties hereto waive
trail by jury and agree to submit to the personal jurisdiction and venue of
a court of subject matter jurisdiction located in the State of Illinois.
7.03 The Recitals herein form part of this Agreement in as full and effective a
manner as if incorporated herein as numbered clauses.
7.04 Should any clause or other portion of this Agreement be declared illegal,
void, invalid, or inoperative by any competent Court, then this Agreement
shall be read as if such impugned clause or portion had never been included
in the Agreement, and so as to give the Agreement as full and forceful a
reading as possible consistent with the deletion of such impugned clause or
portion.
7.05 In this Agreement, the masculine shall include the feminine and vice versa,
the personal the impersonal and vice versa, the individual the corporate
and vice versa, and the singular the plural and vice versa, all as the
context may require.
7.06 No purported amendment to, variation of, or departure from or indulgence of
any term of, this Agreement shall be of any force or effect whatever unless
and until evidence in writing and that writing executed by all the Parties
hereto in the same fashion as the execution hereof.
7.07 This Agreement may not be assigned by Xxxxxxxxx without the prior written
consent of AYI, which consent may be unreasonably withheld.
7.08 Each Party agrees for the benefit of the other to do all things and to
execute all documents which may reasonably be required in order to give
effect to this Agreement.
7.09 If there should be a default in the payment of the obligations owed to
Xxxxxxxxx by the Corporation pursuant to the terms of the Promissory Note
or the Note as defined in the APA and such default is not cured within 30
days of notice of such default, then all obligations owed by Xxxxxxxxx to
the Corporation pursuant to the terms of this Agreement shall terminate and
be of no further force or effect.
7.10 If any action or proceeding is commenced by either party hereto in order to
enforce or interpret the terms hereof, then the unsuccessful party agrees
to pay the reasonable costs and expenses, including legal fees on a
solicitor and his own client basis, of the prevailing party incurred with
respect to any proceedings taken for the purpose of enforcing or
interpreting the rights and remedies of the prevailing party under this
Agreement.
IN WITNESS WHEREOF the Parties hereto have hereunder caused to be set hands and
seals as at the date first above written.
ADDISON YORK INSURANCE BROKERS LTD.
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Per: /s/ Primo Podorieszach
------------------------------------
XXXXXXXXX INSURANCE AGENCY, INC.
Per: /s/ Xxxx X. Feather
------------------------------------
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SCHEDULE "A"
BUDGET
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SCHEDULE "B"
BANK ACCOUNTS
Bank Account Number
Sauk Valley Bank
000 Xxxx 0xx Xxxxxx
Xxxxxxxx, Xxxxxxxx, 00000
Sauk Valley Bank
000 Xxxx 0xx Xxxxxx
Xxxxxxxx, Xxxxxxxx, 00000
Sauk Valley Bank
000 Xxxx 0xx Xxxxxx
Xxxxxxxx, Xxxxxxxx, 00000
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SCHEDULE "C"
DIRECTORS RESOLUTION
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SCHEDULE "D"
EMPLOYEES OF XXXXXXXXX
Xxxx N. Feather
Xxxxxx X. Xxxxx
Xxxxxxx Xxxxxx Claim Manager
Xxxx Xxxxx Treasurer
Xxxxx Xxxxx Personal Lines Producer
Xxxxxxx Xxxxxxxx Life & Health Producer
Xxxxxx Xxxxxxxxx Personal Lines Producer
Xxxxx Xxxxxxx Assistant
Xxxx Xxxxxxx Part Time Clerk
