INSURANCE CONTRIBUTION AGREEMENT
Exhibit 10.21
This Insurance Contribution Agreement (the “Agreement”) is entered into effective as of February 5,
2015 (the “Effective Date”), by and between Xxxx Xxxxxxx & Associates, P.L.L.C., a Texas professional limited liability company (“CWA”), and Tectonic Holdings LLC, a Texas limited liability company (the “Company”). CWA and
the Company are sometimes individually referred to herein as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, in connection with the investment by the Xxxxxxx (hereafter defined), CWA has agreed to assist the
Company in the establishment of an insurance agency; and
WHEREAS, the Company and CWA desire to have the Company establish a subsidiary that will serve as an insurance
agency to serve CWA’s clients and third party clients, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties hereto
agree as follows:
1. Agreement to Establish Insurance Agency.
(a) After the Effective Date, the Company will use commercially reasonable efforts to form a subsidiary (“Insurance Sub”) that will seek a
license issued by the state of Texas to serve as an insurance agent and appropriately capitalize and staff such subsidiary to perform such services;
(b) At such time as Insurance Sub is appropriately licensed and staffed to serve CWA’s clients, CWA will refer, as it deems appropriate, clients to Insurance Sub for the sale by Insurance Sub of insurance products and services to
CWA’s clients, consistent with the recommendations of CWA’s planner;
(c) Insurance Sub shall pay to CWA, if appropriately licensed, a referral fee based on the insurance revenues generated by CWA based on market-based referral fee rates for similar referrals, which referral fee is estimated to be
33% of gross revenues.
(d) Insurance Sub shall also sell insurance products to third parties.
2. Term. The term of this Agreement shall
commence on the Effective Date and continue thereafter until the earliest of:
a. period
mutually agreed between the Buyer (hereafter defined), the Company and CWA after a Change of Control (hereafter defined) of the Company or Insurance Sub has occurred; or
b. the
dissolution or liquidation of either Party.
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3. A
“Change of Control” of the Company or Insurance Sub (as the case may be) shall occur under the following circumstances: (a) the sale of either the Company or
Insurance Sub to a third party (whether directly or indirectly), whether in a single or series of related transactions, or (b) the sale of all or substantially all of the assets of the Company or Insurance Sub, whether in a single or series of
transactions, to a third party buyer (in each case, a “Buyer”). In the event of such a sale, CWA and the Company or Insurance Sub will negotiate with the Buyer to extend the term of this Agreement for a length of time that is reasonably
satisfactory to the Buyer and addresses the interests of the Buyer in buying an ongoing business and provides a reasonably optimal price for the equityholders of the Company or Insurance Sub.
4. Confidentiality. CWA and the Company
agree that all information communicated to each other during the term of this Agreement shall be received in strict confidence and shall be used only for purposes of performing the Services and that no such information shall be disclosed by CWA,
the Company, its agents or employees without the other’s prior written consent, except to the extent required to perform the Services. Additionally, CWA and the Company agree to take all reasonable precautions to prevent the disclosure of such
information to third parties, except as may be necessary under legal, accounting or regulatory laws or requirements.
5. Effect of Termination. Upon the
termination of this Agreement, it is agreed by both the Company and CWA that:
a. All records in the possession of CWA pertaining to the operation of the Company, together with all items of personal property owned by the Company in CWA’s possession, shall be delivered to the Company;
b. All records in the possession of the Company pertaining to the operation of CWA, together with all items of personal property owned by CWA in the Company’s possession, shall be delivered to CWA; and
c. Any and all fees due and payable as of the termination date shall be due and payable by CWA to the Company.
6. Notices. All notices, requests,
consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by an
internationally recognized overnight courier; (c) on the date sent by facsimile or electronic mail transmission of a PDF document (with confirmation of transmission in the case of facsimile) if sent during normal business hours of the recipient,
and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective
Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 6):
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Notices to the Company:
Tectonic Holdings LLC
0000 X. Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Manager
Facsimile: 000-000-0000
Notices to CWA:
Xxxx Xxxxxxx & Associates, P.L.L.C.
0000 X. Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: 000-000-0000
Email: xxxx@xxxxxxxxxxx.xxx
Notices to Sherman:
Mr. A. Xxxx Xxxxxxx
0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Email: xxxxxxxx@xxxxxxxxx.xxx
7. Relationship of the Parties.
(a) CWA
is an independent contractor under this Agreement. Except as expressly set forth herein, CWA does not have the authority to, and CWA hereby agrees that it shall not, directly or indirectly, contract for any obligations of any kind in the name of or
chargeable against the Company without the prior written consent of the Company. All persons providing services to the Company shall be employees or independent contractors under the supervision of CWA, and shall not be employees of the Company
with respect to such services. As such, CWA shall furnish all materials, supplies and personnel necessary to perform its obligations as part of the terms set forth herein, and CWA shall have the sole responsibility of paying the salaries, taxes and
all other expenses relating to each employee of CWA, including those employees that provide services to the Company pursuant to this Agreement.
(b) The
Company is an independent contractor under this Agreement. Except as expressly set forth herein, the Company does not have the authority to, and the Company hereby agrees that it shall not, directly or indirectly, contract for any obligations of
any kind in the name of or chargeable against the Company without the prior written consent of the Company. All persons providing services to CWA shall be employees or independent contractors under the supervision of the Company, and shall not be
employees of CWA with respect to such services. As such, the Company shall furnish all materials, supplies and personnel necessary to perform its obligations as part of the services set forth herein and the Company shall have the sole
responsibility of paying the salaries, taxes and all other expenses relating to each employee of the Company, including those employees that provide services to CWA pursuant to this Agreement.
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(c) On or about the Effective Date, A. Xxxx Xxxxxxx (“Xxxxxxx”) became the Chief Executive Officer and a manager of Tectonic Services,
LLC, a Texas limited liability company (“MGMT”), which is the manager of the Company, which is the sole limited partner of Insurance Sub. The Parties acknowledge that Xxxxxxx would not have undertaken these positions with MGMT without CWA
agreeing to, among other things, enter into this Agreement. Therefore, the Parties hereby agree that Xxxxxxx shall be, and is hereby, named as an express third-party beneficiary of this Agreement, with full rights as such.
8. Assignment. Neither this Agreement, nor
any rights or obligations hereunder, shall be assignable by either Party hereto unless approved in writing by the other Party and Xxxxxxx; provided, however, that the Company may assign this Agreement to Insurance Sub without the prior consent of
CWA. CWA and the Company retain the right to subcontract for performance of any portion of its duties hereunder by one or more third parties, provided that neither CWA nor the Company shall be released from its liabilities and obligations hereunder
without the express written consent of Xxxxxxx.
9. Successors and Assigns Bound. This
Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
10. Amendments. No amendment or modification
of this Agreement shall be valid or binding upon any Party hereto unless made in writing and signed by its duly authorized officer; provided, however, the Parties may not amend or terminate this Agreement without the prior written consent of
Xxxxxxx.
11. Governing Law. The validity and effect
of this Agreement and the rights and obligations of the Parties hereto shall be construed and determined in accordance with the laws of the State of Texas, without regard to conflict of laws principles.
12. Entire Agreement. This Agreement
contains all of the terms agreed upon by the Parties with respect to the subject matter hereof, and supersedes all prior agreements, arrangements and communications between the Parties dealing with such subject matter, whether oral or written.
13. Severability. The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.
14. Counterparts. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.
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15. Arbitration. Any dispute, controversy or
claim arising under or relating to this Agreement or any breach or threatened breach hereof (an “Arbitrable Dispute”) shall be resolved exclusively by final and binding arbitration in the State of Texas administered by the American
Arbitration Association pursuant to its Commercial Arbitration Rules. Any demand for arbitration shall be in writing, shall be served on the other Party in the manner prescribed herein for the giving of notices, and shall set forth a short
statement of the factual basis for the claim, specifying the matter or matters to be arbitrated. The Arbitrable Dispute shall be heard by a three arbitrator panel. In a three member panel arbitration, each of the two Parties to the Arbitrable
Dispute shall select one independent arbitrator expert in the subject matter of the Arbitrable Dispute from that Party’s list of three independent arbitrators after the other Party (or representative, if applicable) has had the opportunity to
designate as objectionable and eliminate one arbitrator from the other’s list within seven days after submission thereof. The two arbitrators so selected by the Parties shall select a third independent arbitrator expert in the matter of the
Arbitrable Dispute. Any arbitration pursuant hereto shall be conducted by the Arbitrators under the guidance of the Federal Rules of Civil Procedure and the Federal Rules of Evidence, but the Arbitrators shall not be required to comply strictly
with such Rules in conducting any such arbitration. All such arbitration proceedings shall take place in the State of Texas. The fees and expenses of the Arbitrators and any related costs and expenses initially shall be borne equally by the two
sides to the Arbitrable Dispute. The Arbitrators shall have the authority to award any remedy or relief that a state district court of the State of Texas could order or grant, including, without limitation, specific performance of any obligation
created under this Agreement, the awarding of punitive damages, the issuance of an injunction, or the imposition of sanctions for abuse or frustration of the arbitration process. The Arbitrators shall render their decision and award in writing and
counterpart copies thereof shall be delivered to each Party. The decision and award of the Arbitrators shall be binding on all Parties. In rendering such decision and award, the Arbitrators shall not add to, subtract from or otherwise modify the
provisions of this Agreement. Any Party to the arbitration may seek to have judgment upon the award rendered by the Arbitrators entered in any court having jurisdiction thereof. Each Party agrees that it will not file any suit, motion, petition or
otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein except in connection with the enforcement of an award rendered by the Arbitrators. Upon the entry of an order
dismissing or staying any action or proceeding filed contrary to the preceding sentence, the Party which filed such action or proceeding shall promptly pay to the other Party the reasonable attorney’s fees, costs and expenses incurred by such other
Party prior to the entry of such order.
15. Third-Party Beneficiaries. This
Agreement is for the sole benefit of the Parties hereto and Xxxxxxx, and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right,
benefit or remedy of any nature whatsoever, under or by reason of this Agreement.
16. No Strict Construction. The Parties to
this Agreement have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no
presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the undersigned have caused
this Agreement to be executed by their duly authorized representatives.
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CWA:
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XXXX, XXXXXXX & ASSOCIATES, P.L.L.C.
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By:
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/s/ Xxxxxx Xxxxxx |
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Name:
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Xxxxxx Xxxxxx
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Title:
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Managing Member
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COMPANY:
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TECTONIC HOLDINGS, LLC
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By:
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Tectonic Services, LLC,
its manager
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| By: | /s/ A. Xxxx Xxxxxxx | ||
| Name: | A. Xxxx Xxxxxxx | ||
| Title: | Chief Executive Officer | ||
