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EXHIBIT 10.4
ADMINISTRATION AND SERVICES AGREEMENT
This Administration and Services Agreement effective as of the date
written below is entered into by and between Xxxxx/Xxxxxx, Inc., having its
principal place of business at Dallas, Texas (hereinafter called "CBI"), and
Xxxxx Xxxxxx, Inc. of Pennsylvania, having its principal place of business at
Allentown, Pennsylvania (hereinafter called "Agency").
RECITALS:
WHEREAS, CBI is a corporation organized and existing under the laws of the
State of Texas;
WHEREAS, Agency is a corporation organized and existing under the laws of
the State of Pennsylvania and authorized to act as a licensed life insurance
agent pursuant to the provisions of the Pennsylvania Insurance Code;
WHEREAS, CBI has available the personnel, services, expertise, and other
amenities necessary to carry out certain functions beneficial to and for the
proper operation of an Insurance Agent;
WHEREAS, Agency desires to have available to it such services and
assistance to permit Agency to expeditiously and efficiently carry out its
duties and functions as a corporation licensed to act as an Insurance Agent in
the State of Pennsylvania;
NOW THEREFORE, for and in consideration of the mutual promises, covenants
and other valuable consideration herein expressed the parties hereto agree and
state as follows:
ARTICLE I.
TERM OF AGREEMENT
The initial term of the Agreement shall be for a period of three (3)
months and shall be automatically extended for additional three (3) month terms
thereafter unless thirty (30) days prior to the expiration of any extension
either CBI or Agency gives the other written notice that this Agreement is to be
terminated at the end of such three (3) month term. Under no circumstances
shall this Agreement extend beyond June 30, 1998.
ARTICLE II.
DUTIES AND OBLIGATIONS OF CBI
Section 2.01. CBI shall furnish to Agency the materials, services, and
assistance set forth in this Section. The facilities, services, personnel, and
assistance to be provided by CBI shall include, but are not limited to the
following:
(a) perform all bookkeeping and accounting functions;
(b) establish and maintain all records required by law and by generally
accepted accounting principles;
(c) furnish all stationery, forms and supplies;
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(d) provide all necessary clerical and professional staff to perform
the above activities in accordance with the standards set forth
in this Agreement;
(e) provide all computer hardware and software capabilities and
facilities to expeditiously and efficiently carry out the
services to be performed hereunder;
(f) provide office space, furniture, fixtures, equipment and
supplies;
(g) assist Agency in preparing reports required by governmental
regulatory and supervisory authorities;
(h) xxxx and collect all premiums.
Section 2.02. It is expressly understood that none of the foregoing
services, assistance, or amenities furnished by CBI shall be deemed to be
services or activities of an Insurance Agent which would require a license from
the Pennsylvania Department of Insurance before such act may be performed.
Furthermore, and in this same connection, CBI shall be prohibited from
performing any actions for which licensure as an Insurance Agent is required.
ARTICLE III.
COMPENSATION
Agency agrees to pay CBI a sum agreed upon by the parties pursuant to
Addendum "A" of this Agreement. The consideration payable pursuant to this
Agreement shall be on a flat fee basis and shall not be based on a percentage of
revenues of Agency. Because of possible fluctuations in the nature and extent of
services rendered by CBI, the agreed upon consideration is subject to
renegotiation of the parties on a quarterly basis. For any particular period in
which the consideration is not renegotiated by the parties hereto, the
consideration paid for that period shall be the same as the amount paid for the
previous period. Any renegotiation of the consideration under Addendum "A" of
this Agreement shall be evidenced by written document attached to and made a
part of this Agreement. The consideration set out in Addendum "A" of this
Agreement shall be payable at the principal offices of CBI; neither the failure
by Agency to pay the entire amount of the consideration set out in Addendum A",
nor the failure of CBI to demand payment thereof, shall otherwise operate as a
waiver of any portion of the consideration required to be paid to CBI pursuant
to this Agreement. It is expressly agreed and understood by and between CBI and
Agency that no part of the service fee payable under this Agreement shall
constitute, directly or indirectly, payment by Agency to CBI for any
compensation, remuneration or other valuable consideration for services as an
Insurance Agent. It is further acknowledged and understood by and between CBI
and Agency that the consideration payable under this Agreement shall be
reasonable in relationship to the duties performed or facilities provided by
CBI. No officer, director or shareholder of Agency, shall be personally liable
with respect to the compensation paid to CBI by Agency; the compensation paid to
CBI pursuant to this Article shall be the sole responsibility of Agency.
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ARTICLE IV.
DUTIES AND OBLIGATIONS OF AGENCY
Section 4.01. Agency is solely responsible for the activities of Agency as
an Insurance Agent and for the activities of its producers, solicitors, agents,
sub-agents, or employees in the course and scope of their activities performed
on behalf of Agency.
Section 4.02. Agency is responsible for securing and maintaining any
license required in order to act as an Insurance Agent in the State of
Pennsylvania or any other jurisdiction and for assuring that producers,
solicitors, agents, sub-agents, or employees secure the appropriate agents
license. Agency is ultimately responsible for the preparation and filing on a
timely basis with the appropriate governmental authority any and all reports
required by such governmental authority as respects the operation of Agency as
an Insurance Agent.
ARTICLE V.
MISCELLANEOUS PROVISIONS
Section 5.01. The parties agree to cooperate fully with each other with
respect to any governmental investigation, or administrative or judicial
proceeding, or consumer complaint with respect to the transaction of an
insurance agency business by Agency. Each party shall consult with any other
party hereto before responding to any such investigation, administrative or
judicial proceeding, or consumer complaint, and each party shall keep the other
fully advised as to the status thereof.
Section 5.02. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes any
prior written or oral understanding between the parties with respect to the
subject matter hereof. Except as otherwise provided herein, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective subsidiaries, affiliates, successors and assigns of the parties
hereto. Neither this Agreement nor any of the rights, obligations, or
liabilities hereunder shall be assigned by CBI or Agency without the prior
written consent of the other party; any such assignment shall be evidenced by a
written document attached hereto and made a part of this Agreement. Any
assignment in violation of this Section shall be null and void at the
non-assigning party's option.
Section 5.03. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
Section 5.04. If any act at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees, court costs, and necessary disbursements in addition
to any other relief to which such party may be entitled.
Section 5.05. Any notices to be given hereunder by one party of the other
may be affected by personal delivery in writing or by mail, registered or
certified, postage pre-paid with return receipt requested. Mailed notices shall
be addressed to the addresses appearing in the introductory paragraph of this
Agreement, but each party may change its address by written notice in accordance
with this paragraph. Notices delivered personally shall be deemed communicated
upon actual receipt; mailed notices shall be deemed communicated as of five (5)
days after deposit in the mail.
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Section 5.06. CBI shall indemnify Agency to the maximum extent
permitted by applicable law against all costs, charges and expenses incurred or
sustained by Agency in connection with any third party action, suit or
proceeding in which Agency, its producers, solicitors, agents, sub-agents,
officers and employees may be made a party by reason of this Agreement, save
and except for acts of willful or wanton misconduct by Agency.
Section 5.07. This Agreement may be amended from time to time by the
parties hereto; provided, however, any such amendment shall be evidenced by
written instrument which is attached hereto and made a part of this Agreement.
Section 5.08. Should any portion of this Agreement be void or
invalid, the remaining portion of this Agreement shall be of full force and
effect as if the void or invalid portion was severable and not in this
Agreement.
Section 5.09. Nothing herein shall be construed to permit CBI,
directly or indirectly, to act as an Insurance Agent in the State of
Pennsylvania without securing the appropriate license.
Section 5.10. This Agreement may be executed in two (2) or more
counterparts each of which shall be deemed a duplicate original.
Section 5.11. Nothing in this Agreement is intended to nor does it
create the relationship of joint venturer or partner between CBI and Agency.
VI.
TERMINATION
Section 6.01. This Agreement shall terminate upon the occurrence of
any of the following events.
(a) Effective immediately upon breach of any provision of this
Agreement by CBI or Agency;
(b) Effective upon written notice to a party because of fraud or
dishonesty by such party, provided that such notice shall be
given promptly upon discovery of such fraud or dishonesty;
(c) Effective immediately, if any party at any time becomes insolvent
or goes into liquidation or bankruptcy either voluntarily or
compulsorily;
(d) Effective on the first day of the month following the month in
which any party shall discontinue operating its business or cease
operations; or
(e) By delivery through U.S. mail, or by hand, a written notice of
termination giving at least sixty (60) days notice of termination
of this Agreement by any party.
(f) No later than June 30, 1998.
Section 6.02. Anything contained herein to the contrary
notwithstanding, in the event of termination of this Agreement, CBI shall be
entitled to compensation earned to date of termination as provided in this
Agreement computed pro rata up to and including such date and shall further be
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entitled to perform such additional services or functions, which CBI, in its
sole discretion, shall deem necessary in order to wind up affairs relating to
this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Administration and Services Agreement which is effective as of the 3rd day of
February, 1998.
XXXXX/XXXXXX, INC.
By:
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, President
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Date
XXXXX/XXXXXX, INC. OF PENNSYLVANIA
By: /s/ XXXXXXX X. XXXXXX
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, President
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Date
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ADDENDUM "A"
This Addendum "A" is hereby attached to and made a part of that certain
Administration and Services Agreement ("Agreement") by and between Xxxxx/Xxxxxx,
Inc. (hereinafter referred to as "CBI") and Xxxxx/Xxxxxx, Inc. of Pennsylvania
(hereinafter referred to as "Agency").
This Addendum "A" more specifically sets out the compensation due CBI
by Agency pursuant to Article III of the Administration and Services Agreement
to which this Addendum is attached and made a part thereof. The parties hereto
agree that Agency shall compensate CBI for performance of CBI's duties under the
Agreement to which this Addendum is attached and made a part as follows:
The charges and fees pursuant to this Agreement shall be an amount
equal to the cost incurred by CBI in providing the services, personnel and
property hereunder, determined by generally accepted accounting principles and
allocated on a reasonable and equitable basis.
The above consideration is subject to renegotiation in accordance with
the provisions of Article III of the Agreement to which this Addendum is
attached and made a part thereof. Any renegotiation of the consideration set out
in this Addendum "A" shall be evidenced by written document to be attached and
made a part of the Administration and Services Agreement.
EXECUTED on this 3rd day of February, 1998 and effective as of the date
of the Agreement.
XXXXX/XXXXXX, INC.
By: /s/ XXX XXXX
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Xxx Xxxx , President
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XXXXX/XXXXXX, INC. OF PENNSYLVANIA
By: /s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx , President
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