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 American Hallmark Agencies, Inc., a Texas corporation, with
its principal place of business in Dallas, Texas (hereinafter
called "Hallmark Agencies"), joined by Xxxxxx X. Xxxxxxxx and
Xxxxxxxx X. Xxxxx, 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 Agencies is a corporation engaged in the
solicitation of property and casualty insurance in Texas and is
licensed as a Texas local recording insurance agent pursuant to
Article 21.14, 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 Agencies desires that General Agency
furnish facilities and services in support of Hallmark Agencies
and General Agency is willing to provide these services under the
terms set forth herein; and
WHEREAS, as a necessary consideration hereto, Hallmark
Agencies and its officers, directors and shareholders, Xxxxxxxx
and Xxxxx, agree that all policyholder files, customer lists,
expirations, and renewals; the name "American Hallmark Agencies,
Inc." or any variation thereof, and any books, records, materials
and documents relating to the insurance business to be written by
Hallmark Agencies, 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 Agencies. Hallmark
Agencies 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 contracts
with the public in the making or consummating of
any contract of insurance, and any other action
which requires that a local recording agent's
license or a solicitor's license first be
obtained, shall be made and performed only by
appointees of Hallmark Agencies who are licensed
by the State of Texas as local recording agents or
as solicitors, as those terms are defined by the
Code.
(b) Hallmark Agencies shall countersign all policies
of insurance, certificates and endorsements;
(c) Hallmark Agencies shall provide General Agency
copies of all binders, policies, certificates,
endorsements and cancellations, oral or written,
issued by Hallmark Agencies promptly upon issuance
or acceptance by Hallmark Agencies.
(d) Hallmark Agencies shall provide assistance to all
Group II agents designated by General Agency in
connection with production of certain automobile
insurance through General Agency, State and County
Mutual Insurance Company or any other insurance
company designated by General Agent.
2. Services and Facilities Provided by General Agency.
General Agency will generally manage and supervise Hallmark
Agencies, and perform all necessary services in connection
therewith. In addition, General Agency shall provide the
following facilities and services to Hallmark Agencies 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 Agencies (reasonably incurred in the
conduct of business supervised by General Agency),
(f) Clerical assistance,
(g) Technical advice and information as Hallmark
Agencies 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 Agencies 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 Agency, net of any
expenses paid by Hallmark Agencies 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 Agencies are separate entities and nothing contained
herein shall be construed to hold General Agency liable for any
contractual obligation, acts or omissions of Hallmark Agencies,
except as may be expressly agreed by the parties. General Agency
shall not be responsible for any other charges or expenses
incurred by Hallmark Agencies, 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 Agencies 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 Agencies prior to or during the term
of this Agreement, as well as the name "American Hallmark
Agencies, Inc.", or any variation thereof, (hereinafter called
"Property") are the exclusive property of General Agency, and
Hallmark Agencies agrees that it has no right, title or interest
in such Property. Furthermore, Hallmark Agencies agrees that it
will not at any time sell, assign, transfer, pledge, hypothecate
or encumber any of the Property or any part thereof. Hallmark
Agencies 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
Agencies, its agents or employees, or at Hallmark Agencies'
direction, at any time whatsoever (even after termination of this
Agreement), save and except in the normal course of operation of
Hallmark Agencies' 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 Agencies.
All equipment and supplies furnished to Hallmark Agencies by
General Agency shall remain the property of General Agency and
shall be returned to General Agency promptly upon request.
Hallmark Agencies shall, upon General Agency's request, cease to
use the name "American Hallmark Agencies, Inc.", "Hallmark
Agencies", 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 Agencies 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 Agencies. For these purposes, customers of Hallmark
Agencies shall be those for whom there is insurance coverage in
force (sold, secured or placed by or through Hallmark Agencies)
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 Agencies 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 Agencies 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 Agencies,
or any person or entity acting for or in connection with Hallmark
Agencies, 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 Agencies
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 Agencies 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, including that Agency Supervision Agreement dated
February 1, 1993, which shall be of no further force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on this __________ day of ___________________, 1995, to
be effective ____________________________, 19_.
AMERICAN HALLMARK GENERAL AGENCY, INC.
By:
Xxxxx Xxxxxxx
Executive Vice President
AMERICAN HALLMARK AGENCIES, INC.
By:
Xxxxxx X. Xxxxxxxx
President
Xxxxxxxx X. Xxxxx
Individually
Xxxxxx X. Xxxxxxxx
Individually
