EXHIBIT 10.1 Insurance, Brokerage and Related Consulting Service Agreement
Executed by the Registrant on October 24, 2005
August 23, 2005
Xxxxx Xxxxxx , Principal
International Power Group, Ltd
000 Xxxxxxxxx Xxx
Xxxxxxxx, XX 00000
Subject: Engagement of Services
Dear Xxx:
We are pleased that International Power Group, Ltd ("you" or the "Client") has
chosen Xxxxx USA Inc. ("Marsh" or "we") to be your insurance broker. We look
forward to developing a mutually rewarding and long-standing relationship with
you.
Our goal is to provide a level of service that assures your satisfaction. The
first step in realizing this goal is to ensure that we share a mutual
understanding of our relationship.
Services.
To this end, we would like to confirm that Marsh will act as your risk
management advisor and consultant and insurance broker, as applicable, and shall
provide you with the services set forth on Appendix A (the "Services") in
accordance with the terms set forth herein. The additional services set forth in
Section 4 of Appendix A are available for additional compensation and subject to
the negotiation of separate agreements.
Compensation.
Marsh shall be compensated for providing the Services to you as set forth on
Appendix B.
If there is a significant change in your operations or exposures that affects
the nature and scope of your insurance program and/or service needs, Marsh and
you both agree to renegotiate Xxxxx'x compensation in good faith as appropriate.
Term and Termination.
(a) The term of Xxxxx'x engagement shall commence August 23, 2005 and shall
terminate one (1) year thereafter (the "Service Year"). Notwithstanding the
term, either party may terminate Xxxxx'x engagement upon 90 days' prior written
notice to the other party. In the event of termination, Marsh will assist you in
arranging a smooth transition process, subject to receipt by Marsh of all
amounts due Marsh from you. However, Xxxxx'x obligation and the obligation of
its affiliates (including, if applicable, Xxxxx'x U.K. affiliates) to provide
Services to you will cease upon the effective date of termination, unless
otherwise agreed in writing.
(b) In the event of termination by you prior to expiration, Xxxxx'x commission
compensation set forth on Appendix B for the Service Year will be deemed fully
earned at inception and Xxxxx'x fee compensation set forth on Appendix B for the
Service Year will be deemed earned in accordance with the following schedule,
for Services performed through the termination date: 60% at commencement of the
Service Year; 75% after four months; and 100% after seven months.
(c) In the event of a termination by Marsh prior to expiration, Xxxxx'x annual
compensation will be deemed earned on a pro-rata basis.
Authorization.
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Marsh shall be authorized to represent and assist you in all discussions and
transactions with insurers relating to the lines of insurance listed on Appendix
A when acting as your insurance broker, provided that Marsh shall not place any
insurance on behalf of you unless so authorized by you in writing.
Notwithstanding the foregoing, at all times during the performance of Services
under this letter Marsh shall be an independent contractor and shall not be an
employee of Client.
Other Terms and Conditions.
The Standard Terms and Conditions set forth in Appendix C shall apply to the
Services performed by Marsh under this letter.
Miscellaneous.
This letter, together with all appendices attached hereto, contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all written or oral prior agreements, understandings and negotiations
with respect to such matters. Neither party shall have any liability for any
failure or delay in performance of its obligations because of circumstances
beyond its reasonable control, including, without limitation, acts of God,
fires, floods, earthquakes, acts of war or terrorism, civil disturbances,
sabotage, accidents, unusually severe weather, governmental actions, power
failures, computer/network viruses that are not preventable through generally
available retail products, catastrophic hardware failures or attacks on its
server.:
We appreciate your business and we look forward to working with you. If this
agreement, services and compensation are acceptable to International Power
Group, please have an authorized representative, if other than you, sign and
date below, and return to me via fax at 000 000 0000.
If this letter of engagement is not acceptable, please let me know what changes
are desired, by either redlining in revision mode this electronic document, or
faxing your comments to me at the above number.
Sincerely,
/s/ Xxxxxxxxxxx X. Xxxxxx
Xxxxxxxxxxx X. Xxxxxx
Senior Vice President
C: XxxxXxx Xxxxxx/Marsh NY
Accepted:
(Signature):__/s/ Xxxx Wagenti______________
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Name, Title:_____Jack Wagenti, Secretary_____
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Date:_October 24, 2005_________
Appendix A
Scope of Services
(1) Marsh will act as the Client's risk management advisor and
consultant and insurance broker, as applicable, with respect to the following
lines of insurance (effective dates noted in parenthesis):
(a) Investment "Wrap" Options in Project Financing (08/23/2005)
(b) Construction Insurance (08/23/2005)
(c) Other insurance placement as requested (08/23/2005)
(d) Risk financing advisory services in Waste to Energy & Water Facilities
(08/23/2005)
(2) As respects the lines of insurance in Section 1, above, Marsh
shall provide the following services:
(a) Work with the Client to assess the Client's risk exposures;
(b) Work with the Client to design and develop the Client's insurance program;
(c) Assist with documentation and other steps to obtain commitments for and
implement the Client's insurance program upon the Client's instructions;
(d) Keep the Client informed of significant changes and or trends in
the insurance marketplace and provide the Client with annual
information on market trends;
(e) Assist the Client in identifying insurers. Solicit quotes from
insurers selected by the Client for the placement of Client's
insurance program in accordance with the Client's instructions.
(f) Conduct a Renewal Strategy Meeting in advance of each placement.
(g) Negotiate on the Client's behalf with insurers and keep the Client
informed of significant developments in the negotiations;
(h) Assist the Client with the evaluation of options received from the
insurance market;
(i) Use best efforts to place insurance on behalf of the Client as
directed by the Client and secure the Client's approval prior to
requesting insurers to bind coverage;
(j) Follow up with insurance carriers for timely issuance of policies
and endorsements;
(k) Promptly respond to Client's questions related to coverage placed
by Marsh or the placement process;
(l) Deliver binders on or before the effective date of coverage being
placed, subject to placement;
(m) Process or facilitate the processing and delivery of certificates
or memoranda of insurance and auto identification cards with
respect to insurance policies placed by Marsh, as requested by the Client;
(n) Review policies and endorsements for conformity to agreed terms
and coverages;
(o) Provide coverage summaries for all new placements and updates on
changes to existing policies;
(p) Review premium and exposure audits, rating adjustments, dividend
calculations and loss data;
(q) Assist the Client in establishing claims reporting procedures to insurers,
(r) Monitor published financial information of the Client's current
insurers and alert the Client when the status of one or more of
such insurers falls below Xxxxx'x minimum financial guidelines.
Insurers with whom the Client's risks have been placed will be
deemed acceptable to the Client, in the absence of contrary
instructions from the Client;
(s) Provide the Client with detailed invoices, except in the case of
direct billing by insurers. Remit premiums to insurers and taxes
and fees to the relevant authorities on a timely basis, following
receipt thereof from the Client.
(t) Investment financing risk analysis and risk financing alternative
development for wrap product development of waste to energy and
water facilities being developed by International Power Group,
Ltd, in various locations worldwide.
Sections 2(e), (g), (i), (j), (l), (m) and (s) will only apply with respect to
placements for which Marsh is acting as the Client's insurance broker.
3. Whenever the Marsh client executive is informed in writing by
the Client that a claim has been notified to the primary
carrier, Marsh will notify all applicable excess carriers of
the claim, unless the Client gives the Marsh client executive
contrary instructions in writing, provided that Marsh has
placed the applicable excess policies or the Marsh client
executive has received written notice from the Client of the
applicable carrier and policies. If Marsh is instructed not to
provide notice to any excess carrier, Marsh shall have no
responsibility for any consequences arising out of the failure
to give notice.
4. Additional Services are available for separate compensation
and shall be agreed upon in advance and addressed by separate
agreement (in certain cases with affiliates of Marsh). Such
additional services include, but are not limited to:
o Actuarial analysis of Workers' Compensation, General
Liability, and Automobile Liability claims, or other lines
of insurance;
o Consulting relating to workers' compensation cost
containment, including behavioral risk management,
absence management, cumulative injury management,
financial diagnostics and custom cost containment solutions;
o Business interruption and other claim valuation services
offered by Xxxxx'x Forensic Accounting practice;
o Environmental risk consulting services;
o Operations and assets consulting services, including
business continuity management, supply chain risk
management, loss control and engineering support services
and strategic risk assessments;
o Claims services other than those specified in Section 2
above, including catastrophic claims support, mass tort
claims support, claims management services, special claims
advocacy services and archival research;
o Services in connection with loss portfolio transfers and
alternative risk financing, including placements made in
connection with such services;
o Captive insurance company feasibility studies;
o Establishment and administration of captive insurers;
>>Placement of non-recurring insurance, including, but not limited to:
>>"one-time" placements for construction projects,
>>"one-time" placements for marine/cargo risks,
>>"one-time" placements for surety,
>>Placements for specific financial risks, such as trade credit,
>>Placements involving significant quantitative or actuarial analysis
or modeling,
>>Placement of risks with financial institutions other than insurance
carriers, and
>>Placements of risks not customarily accepted by insurers;
o Employee benefits services;
o Pension plan consulting;
o Compensation consulting;
o Executive deferred compensation services;
o Risk management claims information systems, including STARS and
TrendTracker software programs, and related services;
o Enterprise Risk Management consulting;
o Strategic Risk Assessment;
o Provision of Marsh personnel on an out-sourced basis;
o Intellectual Property Consulting;
o Security Consulting;
o Insurance-related mergers and acquisition due diligence
services and transactional solutions;
o Placement and servicing of owner controlled insurance programs;
and
o Interactive on-line client services.
Appendix B
Compensation
For all lines of insurance coverage listed on Appendix A,
Section 1 except those listed below (the "Fee Coverages"),
Marsh will deliver the Services to the Client for an
annual fee of $10,000.00.
The annual fee shall be paid by the Client on August 23,
2005.
Prior to each placement by Marsh for the Client, Marsh
shall disclose to the Client and obtain the Client's
approval of any commissions to be collected by Marsh or
its affiliates with respect to such placement. Marsh shall
credit any retail commissions collected by Marsh or its
affiliates with respect to the Fee Coverages against
remaining installments of the annual fee (except as
provided below) and, to the extent in excess of the
remaining installments, refund previously paid
installments of the annual fee. In the event such retail
commissions for a Service year exceed the annual fee for
that year, then excess retail commissions shall be
returned to the Client if permitted by law. Otherwise,
excess retail commissions shall be carried forward and
applied against Xxxxx'x annual compensation for subsequent
years if permitted by law. Any wholesale commissions
collected by Marsh or its affiliates will not be credited
against the annual fee.
As respects the following lines of insurance coverage,
(a) Investment "Wrap" Options in Project Financing
(b) Construction Insurance
(c) Other insurance placement as requested
Other insurance placement as requested
Marsh shall be compensated for providing the Services to the Client through
retail and wholesale commissions received from insurance companies. Prior to
each placement by Marsh for the Client, Marsh shall disclose to the Client and
obtain the Client's approval of any commissions to be collected by Marsh or its
affiliates with respect to such placement.
In addition to the compensation set forth above, Xxxxx'x foreign offices and
affiliates shall be entitled to receive commissions on foreign local placements
made on behalf of the Client or its foreign subsidiaries, which shall be in
addition to and not be credited against the annual fee. Marsh shall disclose to
the Client and obtain the Client's approval of such commissions prior to
placement. Marsh may make such disclosure to and obtain such approval from the
Client's local operating management.
In the event (i) the Client elects to obtain insurance for a particular line of
coverage from a foreign insurer and that insurer is domiciled in a country not
part of the Client's insurance program with respect to such line of coverage as
of the commencement date of Xxxxx'x engagement under this letter and (ii) the
resources and services of a foreign Marsh affiliate are necessary or appropriate
for such placement, Marsh and the Client shall negotiate additional compensation
for such services and/or modification to Xxxxx'x compensation in good faith.
Any commissions collected by Marsh or its affiliates shall be considered fully
earned at the time of placement, including if an insurance policy placed by
Marsh or its affiliates for the Client or its foreign subsidiaries is terminated
by the Client or its foreign subsidiaries prior to expiration unless such policy
is replaced by another policy placed by Marsh or its affiliates for the Client
or its foreign subsidiaries during the term of Xxxxx'x engagement under this
letter.
Appendix C
Standard Terms and Conditions
These Standard Terms and Conditions are part of the attached engagement letter
between International Power Group, Ltd (the "Client") and Xxxxx USA Inc.
("Marsh").
Taxes and Fees.
In certain cases, insurance placements that Marsh makes on the Client's behalf
may require the payment of insurance premium taxes (including U.S. federal
excise taxes), sales taxes, use taxes, surplus or excess lines and similar taxes
and/or fees to federal, state or foreign regulators, boards or associations. The
Client agrees to pay such taxes and fees, whenever assessed. To the extent
practical, such taxes and fees will be identified by Marsh on invoices covering
such placements. Any such taxes and fees collected by Marsh will be promptly
remitted by Marsh to the appropriate authorities.
Client Responsibilities.
The Client shall be solely responsible for the accuracy and completeness of
information and other documents furnished to Marsh and/or insurers by the Client
and the Client shall sign any required application for insurance. The Client
recognizes and agrees that all insurance coverages placed in connection with
this engagement letter and all Services, evaluations, reports and
recommendations provided by Marsh hereunder are based on data and information
furnished by the Client. Marsh will be under no obligation to investigate or
verify the completeness or accuracy of any such data or information, nor xxxx
Xxxxx have any liability for any errors, deficiencies or omissions in any
Services, evaluations, reports or recommendations provided to, or any insurance
coverages placed on behalf of, the Client that are based on such inaccurate or
incomplete data or information. The Client understands that the failure to
provide all necessary information to an insurer, whether intentional or by
error, could result in the impairment or voiding of coverage.
The Client will review all policies, endorsements and program agreements
delivered to it by Marsh and will advise Marsh of anything which the Client
believes is not in accordance with the negotiated coverage and terms within
thirty days following receipt.
Intermediates.
When in Xxxxx'x professional judgment it is necessary or appropriate and subject
to the Client's prior approval, Marsh may utilize the services of other
intermediates, including wholesale brokers, to assist in the marketing of the
Client's insurance. Such intermediates may be affiliates of Marsh
Wholesale brokers may represent insurers or act as managing general agents.
Prior to utilizing a wholesale broker in connection with a placement for the
Client, Marsh shall disclose to the Client the compensation received or to be
received by Marsh and its affiliates in connection with the wholesale placement,
any interests of Marsh and its affiliates in the wholesale broker, any
contractual agreements between Marsh and its affiliates, on the one hand, and
the wholesale broker, on the other, and alternatives to using the wholesale
broker.
Xxxxx shall disclose to the Client the compensation of any Marsh affiliated
intermediaries utilized in connection with the Client's placements, and obtain
the Client's consent to such compensation, prior to the binding of coverage.
Marsh shall disclose to the Client the compensation of any non-Marsh affiliated
intermediaries utilized in connection with the Client's placements to the extent
known by Marsh.
Other Revenue.
If the Client requests assistance with obtaining premium financing in connection
with the Client's placements and Marsh provides such assistance, Marsh may
receive compensation from the finance company that provides premium financing to
the Client. Marsh shall provide to the Client information relating to Xxxxx'x
and its affiliates' arrangements with and interests in the premium finance
companies to be considered by the Client and the compensation that Marsh and its
affiliates would receive from finance companies with respect to the Client's
placements.
Marsh earns and retains interest income on premium payments held by Marsh on
behalf of insurers during the period between receipt of such payments from
clients and the time such payments are remitted to the applicable insurer, where
permitted by applicable law. Marsh will advise the Client annually of the
aggregate income Marsh earns on the investment of funds held for all insurers
for all clients.
Confidentiality.
Confidential Information.The Client may provide Marsh with certain proprietary
and confidential information ("Confidential Information") in connection with the
Services provided by Marsh under Xxxxx'x engagement under this letter. Neither
Marsh nor any of its employees or agents directly or indirectly shall disclose
to any third party or use any Confidential Information furnished by or on behalf
of Client for any purpose except in furtherance of the Services and in
furtherance of other insurance brokerage, risk consulting, risk financing, risk
transfer, employees benefits or other insurance-related services rendered by
Marsh to Client, which may include in the normal course of business the release
to insurers and other financial institutions of Confidential Information
relevant to the underwriting and/or evaluation of Client's risks and the
processing of its claims, provided that such insurers and financial institutions
are informed of the confidential nature of such information. Marsh shall take
all steps reasonably required to maintain the confidentiality of Confidential
Information in Xxxxx'x possession. The transmission of Confidential Information
via electronic data transmission networks which provide for the security of
users' data shall be deemed consistent with Xxxxx'x obligations hereunder unless
such use is contrary to Client's express instructions.
Exceptions.
The restrictions and agreements set forth above shall not apply to any
Confidential Information: (i) which at the time disclosed to or obtained by
Marsh is in the public domain; (ii) which becomes part of the public domain
through no act, omission or fault of Marsh; (iii) which Xxxxx'x records
demonstrate was developed independently by Marsh or was received by Marsh from a
third party which Marsh had no reason to believe had any confidentiality or
fiduciary obligation to the Client with respect to such information; (iv) which
is required to be disclosed by law, including, without limitation, pursuant to
the terms of a subpoena or other similar document; provided, however, Marsh
shall, to the extent practical, give prior timely notice of such disclosure to
the Client to permit the Client to seek a protective order, and, absent the
entry of such protective order, Marsh shall disclose only such Confidential
Information that Marsh is advised by its counsel must be disclosed by law; or
(v) following the lapse of two years after disclosure of such information to
Marsh.
Return of Confidential Information.
As between the Client and Marsh, Confidential Information shall be the sole and
exclusive property of the Client. Upon the Client's request, all documents and
records in Xxxxx'x possession containing Confidential Information shall be
returned to the Client; provided, however, that Marsh may retain copies of
documents that may contain Confidential Information which are necessary for the
conduct and proper record keeping of Xxxxx'x business in accordance with
standard operating procedures or applicable law.
Remedy.
It is understood and agreed that money damages would not be a sufficient remedy
for any breach of these confidentiality provisions and the Client shall be
entitled to injunctive relief as a remedy for such breach, without prejudice to
any other rights or remedies available to the Client under applicable law.
Record Retention.
Files (other than core documents, as defined in Xxxxx'x record retention policy,
including insurance policies, which are permanently retained) will not be
retained for more than five years after the expiration of a particular policy's
term.
Disclaimers; Limitation of Liability.
Marsh does not speak for any insurer, is not bound to utilize any particular
insurer and does not have the authority to make binding commitments on behalf of
any insurer, except under special circumstance which Marsh shall always endeavor
to make known to the Client. Marsh shall not be responsible for the solvency of
any insurer or its ability or willingness to pay claims, return premiums or
other financial obligations. Marsh does not guarantee or make any representation
or warranty that insurance can be placed on terms acceptable to the Client.
If Marsh has taken over any existing program or policies implemented by another
broker, Xxxxx will not assume any responsibility for the adequacy or
effectiveness of those programs or policies or any acts or omissions occurring
prior to Xxxxx'x engagement. Within 45 days, Marsh will have completed a review
of such programs and policies and will make recommendations it believes are
necessary.
Any loss control services and/or surveys performed by Marsh under Xxxxx'x
engagement under this letter are advisory in nature. Such services are limited
in scope and do not constitute a safety inspection as provided by a safety
engineering service. Marsh does not claim to find or include every loss
potential, hazard, statutory or code violation or violation of good practice.
All surveys and reports are based upon conditions observed and information
supplied by the Client. Marsh does not expressly or impliedly guarantee or
warrant in any way the safety of any site or operation or that the Client or any
of its sites or operations is in compliance with federal, state or local laws,
codes, statutes, ordinances or recommendations. In any event, Xxxxx'x liability
if any, relating to or arising out of loss control services performed by it for
the Client shall not exceed the total compensation paid to Marsh under the
engagement letter to which this Appendix is attached.
