Exhibit 10
STATE OF NORTH CAROLINA
COUNTY OF WAKE
ADMINISTRATION AGREEMENT
THIS ADMINISTRATION AGREEMENT ("Agreement") made and entered
into as of the 21st day of October, 1991 (the "Effective Date"), by and between
AMERICAN GUARANTY INSURANCE COMPANY, a North Carolina corporation with its
principal office in Raleigh, North Carolina ("American Guaranty"), party of the
first part; and YADKIN VALLEY COMPANY, a North Carolina corporation with its
principal office in Raleigh, North Carolina ("Yadkin"), party of the second
part;
W I T N E S S E T H:
WHEREAS, American Guaranty is engaged in the insurance
business in North Carolina and maintains facilities, equipment, and services and
has employed experienced personnel with expertise in the insurance industry
necessary to manage and conduct such business;
WHEREAS, Yadkin is a holding company whose wholly-owned
subsidiary, Yadkin Valley Life Insurance Company, is authorized and licensed to
engage in the insurance business, and Yadkin desires to utilize the expertise of
the personnel, and such of the facilities, equipment, and services of American
Guaranty as may be proper for the management and conduct of its business as an
insurance holding company, and desires to reimburse American Guaranty for the
costs and expenses associated with such assistance; and,
WHEREAS, American Guaranty has agreed to provide
administrative services necessary in carrying on the business of Yadkin in the
manner and to the extent set forth hereinafter.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements between the parties made, and for other good
and valuable considerations, the receipt and sufficiency of which hereby are
acknowledged, American Guaranty and Yadkin hereby agree as follows:
'
1. Yadkin hereby contracts with and engages American Guaranty
to provide the administrative services necessary in carrying on the insurance
holding company business of Yadkin, subject at all times to the direction,
control, and authority of the Board of Directors of Yadkin.
2. American Guaranty hereby accepts such employment by Yadkin
and agrees to provide administrative services necessary in carrying on the
insurance holding company business of Yadkin in accordance with the generally
accepted practice of the insurance industry, subject to the direction, control,
instruction, and authority of the Board of Directors of Yadkin.
3. The administrative services provided hereunder shall
include investment services. All investments by American Guaranty on behalf of
Yadkin shall be made in accordance with applicable North Carolina investments
laws.
4. In providing administrative services necessary in carrying
on the business of Yadkin, complete control of all of the operations and
functions of Yadkin, except for the establishment of its business policies,
shall be vested in American Guaranty, which shall maintain all books, records,
and accounts of all business of Yadkin in accordance with the accepted practice
of the insurance industry and shall furnish to the Board of Directors of Yadkin
such periodic reports as the said Board of Directors may request or designate.
5. In consideration for the assistance provided to Yadkin by
American Guaranty as authorized above, Yadkin shall remunerate and reimburse
American Guaranty for services rendered and expenses incurred which are
reasonable and which directly or indirectly properly are attributed to the
management and conduct of the business of Yadkin. Services and expenses for
which American Guaranty shall be entitled to remuneration and reimbursement
shall include, but not necessarily be limited to, the following items:
a. Services by employees of American Guaranty
that properly may be attributed to the business of Yadkin;
b. General administrative and office expenses
that properly may be attributed to the business of Yadkin; and,
c. Travel and auto expenses that properly may
be attributed to the business of Yadkin.
Such remuneration and reimbursement shall be paid by Yadkin to
American Guaranty on a monthly basis within fourteen (14) calendar days of
presentation by American Guaranty of an itemized account of services rendered
and expenses incurred on behalf of Yadkin during the monthly period being
billed.
6. The arrangement established by this Agreement may be
terminated by either party by written notice delivered to the other party. Any
such termination shall not, however, relieve Yadkin of the requirement to
remunerate and reimburse American Guaranty for services and expenses incurred or
committed prior to the date of termination which properly are presented to the
Yadkin in accordance with the terms of this Agreement.
7. In the event this Agreement is terminated by either party,
American Guaranty hereby agrees to assist Yadkin in preparing any annual report
or reports required by any state insurance department for the last year during
which this Agreement is in effect. The services of American Guaranty in
assisting Yadkin in preparing any such report or reports shall not entitle
American Guaranty to any remuneration therefor.
8. American Guaranty agrees to employ standard accounting
practices employed by the insurance industry in the operation and development of
the business of Yadkin. This Agreement shall be construed in accordance with the
general practices and accounting methods of the insurance industry.
9. Yadkin, upon reasonable request and during American
Guaranty's regular business hours, shall be permitted to examine such books and
records of American Guaranty as relate American Guaranty's services under this
Agreement.
10. American Guaranty shall permit the North Carolina
Commissioner of Insurance, upon reasonable request and during American
Guaranty's regular business hours, to examine and audit such books and records
of American Guaranty as relate to American Guaranty's services under this
Agreement.
11. This Agreement shall be performed in the State of North
Carolina, and notwithstanding the principles of conflicts of law, the internal
laws of the State of North Carolina shall govern and control the validity,
interpretation, performance, and enforcement of this Agreement.
12. In the event any term or condition of this Agreement or
the application thereof to any circumstance or situation shall be invalid or
unenforceable in whole or in part, the remainder of such
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term or condition and the application thereof to any other circumstance or
situation shall not be affected thereby; and each term and condition of this
Agreement shall be valid and enforceable to the full extent permitted by law.
13. This Agreement constitutes the entire agreement between
American Guaranty and Yadkin with regard to the provision of administrative
services by American Guaranty to Yadkin, and all prior negotiations,
understandings, terms, and conditions are merged herein. The terms of this
Agreement may not be changed or altered by parol statements made prior to or
subsequent to its execution, but may be modified only by an agreement in writing
signed by the parties hereto.
IN WITNESS WHEREOF, and in duplicate originals, American
Guaranty has caused this Agreement to be executed by its President, attested by
its Secretary, and its corporate seal to be hereto affixed, all effective as of
the Effective Date; and Yadkin has caused this Agreement to be executed by its
President, attested by is Secretary, and its corporate seal to be hereto
affixed, all effective as of the Effective Date.
AMERICAN GUARANTY:
AMERICAN GUARANTY INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxx
----------------------
President
Attest:
/s/ Xxxxxxx X. Xxxx
-------------------
Secretary
[SEAL]
YADKIN:
YADKIN VALLEY COMPANY
By: /s/ Xxxxx X. Xxxxx
----------------------
President
Attest:
/s/ E. Xxxxxx Xxxxx
-------------------
Secretary
[SEAL]
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