FACILITIES AND SERVICES AGREEMENT
STATE OF TEXAS
COUNTY OF DALLAS
This Agreement made by and between American Hallmark General
Agency, Inc., a Texas corporation, with its principal place of
business in Dallas, Texas (hereinafter called "General Agency")
and Hallmark Underwriters, Inc., a Texas corporation, with its
principal place of business in Dallas, Texas (hereinafter called
"Hallmark Underwriters"), joined by Xxxxxx X. Xxxxxxxx and
Xxxxxxx Xxxxx, Sr., who are the sole officers, directors and
shareholders of Hallmark Agencies (hereinafter called "Xxxxxxxx
and/or Xxxxx");
W I T N E S S E T H:
WHEREAS, Hallmark Underwriters is a corporation engaged in
property and casualty insurance in Texas and is licensed as a
Texas managing general agent pursuant to Article 21.07-3, TEX.
INS. CODE; and
WHEREAS, General Agency is a Texas corporation licensed as a
managing general insurance agent pursuant to Article 21.07-3,
TEX. INS. CODE; and
WHEREAS, Hallmark Underwriters desires that General Agency
furnish facilities and services in support of Hallmark
Underwriters and General Agency is willing to provide these
services under the terms set forth herein; and
WHEREAS, as a necessary consideration hereto, Hallmark
Underwriters and its officers, directors and shareholders,
Xxxxxxxx and Xxxxx, agree that all policyholder files, customer
lists, expirations, and renewals; the name "Hallmark
Underwriters, Inc." or any variation thereof, and any books,
records, materials and documents relating to the insurance
business of Hallmark Underwriters, belong to General Agency;
NOW, THEREFORE, in consideration of the mutual covenants of
the parties herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto have agreed and do hereby agree
as follows:
1. Responsibilities of Hallmark Underwriters. Hallmark
Underwriters agrees to conduct its insurance business in a lawful
manner and to obtain and maintain all necessary licenses in
accordance with all relevant statutes and regulations.
Notwithstanding any provision to the contrary, the following
shall apply:
(a) All solicitations for insurance and all contacts
with the public in the making or consummating of
any contract of insurance, and any other action
which requires an agent shall be made and
performed only by agents who are licensed
appropriately by the Texas Department of
Insurance.
(b) Hallmark Underwriters shall stamp and affix the
information required under Sec. 7, Art. 1.14-2, or
any amendment, Insurance Code of Texas to every
new or renewal surplus lines insurance contract,
certificate, cover note or other confirmation of
coverage on which such information is required.
(c) Hallmark Underwriters shall provide General Agency
copies of all binders, policies, certificates,
endorsements and cancellations, oral or written,
issued by Hallmark Underwriters promptly upon
issuance or acceptance by Hallmark Underwriters.
(d) Hallmark Underwriters shall provide assistance to
all agents designated by General Agency in
connection with production of certain automobile
insurance through General Agency or any insurance
company designated by General Agent.
(e) Underwriters shall report to and file a copy of
each surplus lines insurance contract and/or other
documents pursuant to Sec. 6 (c), or any
amendment, of the Insurance Code of Texas with the
Surplus Lines Stamping Office of Texas and shall
comply with rules and regulations involving said
Stamping Office.
(f) Hallmark Underwriters shall maintain a separate
Trust Account for the deposit of surplus lines
premium taxes pursuant to Sec. 12, Art. 1.14-2, or
any amendment, Insurance Code of Texas and an
additional separate Trust Account for the deposit
of stamping fees.
2. Services and Facilities Provided by General Agency.
General Agency will generally perform all necessary services in
connection with Hallmark Underwriters insurance business. In
addition, General Agency shall provide the following facilities
and services to Hallmark Underwriters during the term of this
Agreement:
(a) Office space, furniture, equipment, postage and
supplies,
(b) Telephone and all necessary utility services,
(c) Office personnel and management expertise,
(d) Bookkeeping, advertising, record keeping
(including maintenance of expiration lists and
renewals), data processing and periodic auditing,
(e) Handling of cash receipts and disbursements and
check writing, including collection of all
receipts and payment of all insurance company
accounts current, as well as any other debts of
Hallmark Underwriters (reasonably incurred in the
conduct of its business),
(f) Clerical assistance,
(g) Technical advice and information as Hallmark
Underwriters may reasonably require,
(h) Underwriting services,
(i) Salaries and other compensation of agents,
solicitors, and
(j) Such other facilities and services as may be
agreed to by the parties.
3. Consideration to General Agency. Hallmark Underwriters
and General Agency shall from time to time (but in any event at
least once every six months) set the consideration to be paid to
General Agency for its services hereunder, it being intended by
the parties that General Agency receive reimbursement for its
costs and expenses in furnishing its services together with a
reasonable profit for its services and facilities and a
reasonable payment for its involvement. In the event the parties
cannot agree or fail to agree to the amount to be paid to General
Agency, then General Agency's consideration shall be equal to
100% of the income received by Hallmark Underwriters, net of any
expenses paid by Hallmark Underwriters in connection with the
business subject hereto which are required to be paid or
reimbursed by General Agency hereunder. The amount of such
consideration shall be accounted for and remitted to General
Agency immediately. It is agreed that General Agency and
Hallmark Underwriters are separate entities and nothing contained
herein shall be construed to hold General Agency liable for any
contractual obligation, acts or omissions of Hallmark
Underwriters, except as may be expressly agreed by the parties.
General Agency shall not be responsible for any other charges or
expenses incurred by Hallmark Underwriters, unless authorized by
an officer of General Agency.
4. Ownership and Confidentiality of Records. In
consideration of General Agency's services hereunder, it is
agreed between Hallmark Underwriters and General Agency that all
policyholder files, customer files, expirations, and renewals and
any books, records, materials and documents relating to insurance
business written by Hallmark Underwriters prior to or during the
term of this Agreement, as well as the name "Hallmark
Underwriters, Inc.", or any variation thereof, (hereinafter
called "Property") are the exclusive property of General Agency,
and Hallmark Underwriters agrees that it has no right, title or
interest in such Property. Furthermore, Hallmark Underwriters
agrees that it will not at any time sell, assign, transfer,
pledge, hypothecate or encumber any of the Property or any part
thereof. Hallmark Underwriters agrees that the Property includes
confidential information, and, accordingly, agrees that such
Property shall be held in the strictest confidence and that none
of the Property shall be reproduced or copied, in whole or in
part, by Hallmark Underwriters, its agents or employees, or at
Hallmark Underwriters' direction, at any time whatsoever (even
after termination of this Agreement), save and except in the
normal course of operation of Hallmark Underwriters' business in
behalf of General Agency. General Agency shall, in the event of
termination hereof, be entitled to recover all such Property in
the possession of Hallmark Underwriters. All equipment and
supplies furnished to Hallmark Underwriters by General Agency
shall remain the property of General Agency and shall be returned
to General Agency promptly upon request. Hallmark Underwriters
shall, upon General Agency's request, cease to use the name
"Hallmark Underwriters, Inc.", "Hallmark Underwriters", or any
variation thereof. The provisions of this paragraph shall
survive the termination of this Agreement indefinitely.
5. Nonpiracy Covenant. In the event this Agreement is
terminated for any reason, Hallmark Underwriters agrees that, for
a period of two (2) year after such termination, it will not in
any capacity whatsoever, directly or indirectly, for itself, or
for any other, as agent, consultant, owner, partner, stockholder,
broker, or otherwise, divert or attempt to divert, through
solicitation or otherwise, any insurance business from customers
of Hallmark Underwriters. For these purposes, customers of
Hallmark Underwriters shall be those for whom there is insurance
coverage in force (sold, secured or placed by or through Hallmark
Underwriters) as of the date of the termination of the Agreement,
including any member of the immediate family of a customer, any
business owned by a customer for which the customer has a
partnership or shareholder interest of at least fifty percent
(50%), or any person or entity for whom a file is established
within the one year period prior to termination. Hallmark
Underwriters agrees that it would be difficult to measure the
damage to General Agency for any such breach of this covenant,
that such damage would be incalculable and irreparable and that
monetary damages, while still recoverable, would therefore be
inadequate to fully compensate General Agency for any such
breach. Therefore, Hallmark Underwriters agrees that upon any
breach of the foregoing covenant, General Agency shall be
entitled, in addition to all other remedies and damages
available, to a restraining order and to temporary and permanent
injunctions against Hallmark Underwriters, or any person or
entity acting for or in connection with Hallmark Underwriters,
without showing or proving any actual damage sustained by General
Agency. The aforementioned covenant is in addition to and not in
substitution of any obligation which Hallmark Underwriters would
otherwise owe to General Agency pursuant to this Agreement or
common law. The provisions of this Paragraph shall survive the
termination of this Agreement for the two (2) year period
provided herein.
6. Termination. This Agreement shall commence on the
effective date of this Agreement, and shall continue until
terminated as hereinafter set forth, provided that the
responsibility of either party hereof for the payment of any
monetary obligations hereunder, shall not be affected by the
termination hereof and, provided further, that paragraphs 4 and 5
shall survive the termination hereof for the periods indicated
therein. Subject to the foregoing, this Agreement will terminate
upon either party giving not less than 30 days' written notice to
the other. Notice shall be effective upon the terminating
party's placing such notice in the United States mail, postage
prepaid, certified mail, return receipt requested, addressed to
the receiving party at its last known address, or upon receipt,
if delivered personally or by electronic facsimile.
7. Assignment. This Agreement shall not be assignable by
Hallmark Underwriters without the prior written consent of
General Agency, but shall be assignable by General Agency. This
Agreement shall be binding upon all successors and assigns.
8. Law Governing. This Agreement is subject in all
respects to the laws of the State of Texas, including but not
limited to, the Insurance Code of Texas of 1951, as now or
hereafter constituted, and all valid rules, regulations and
orders of the Commissioner of Insurance of Texas.
9. Severability. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be prohibited by or invalid under
applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating
the remainder of this Agreement.
10. Supersedes Prior Agreements. This Agreement supersedes
all prior agreements between the parties relating to the
management, supervision, and provision of facilities and
services, which shall be of no further force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on this __________ day of _________________, 199_, to
be effective ______________________, 19_.
AMERICAN HALLMARK GENERAL AGENCY, INC.
By:
Xxxxx Xxxxxxx
Executive Vice President
HALLMARK UNDERWRITERS, INC.
By:
Xxxxxx X. Xxxxxxxx
President
Xxxxxxx Xxxxx, Sr.
Individually
Xxxxxx X. Xxxxxxxx
Individually
