Exhibit 10.1.49
SPECIALTY UNDERWRITERS’ ALLIANCE, INC.
PARTNER AGENT PROGRAM AGREEMENT
This Partner Agent Program Agreement (“Agreement”) is entered into as of the
24th day of January, 2006 (the “Effective Date”) by and between Specialty
Underwriters’ Alliance, Inc. and its property and casualty insurance
subsidiaries and affiliates (collectively the “Company”) and American Patriot
Insurance Agency, Inc. (the “Partner Agent”).
The parties hereto agree to develop and administer an insurance program known as
described in Exhibit A attached hereto. This Agreement pertains only to that
Program business, with the Company and the Partner Agent agreeing as follows:

I.   AUTHORITY

  A.   Partner Agent’s authority is subject to the terms of this Agreement and
Company’s Program description, underwriting guidelines, system templates,
service standards, form and rate and other filings, and authority limits
provided by Company to Partner Agent (“Company Guidelines”). Company appoints
Partner Agent as its exclusive Partner Agent for five (5) years for the Program
from the Effective Date within the territory specified in the Company Guidelines
solely for the following purposes:

  1.   To solicit, receive, and bind proposals for commercial lines insurance in
accordance with the Company Guidelines.     2.   To pre-screen applications and
estimate rates and/or premiums in accordance with the Company Guidelines.     3.
  To endorse in-force policies in accordance with Company Guidelines.     4.  
To collect, receive, account for, and pay to Company, premiums on policies
written by Company, and to refund to the policyholder or insured, as appropriate
(or to Company if requested by Company), return premiums as provided in the
applicable policy.     5.   To issue, countersign (where necessary), and deliver
policies executed by authorized officers of Company.     6.   To effect
conditional renewals, cancellation and non-renewal of policies in accordance
with Company Guidelines and applicable law.

  B.   Partner Agent may delegate its authority in writing to designated
employees.     C.   Partner Agent’s authority is subject to compliance with (and
Partner Agent shall not alter, modify, or change and shall not waive any
provision in) the applicable forms, rules, or rates of Company, according to
their exact terms and to all applicable laws and regulations.     D.   Company
shall have the right to reject any application or business submitted by Partner
Agent or to modify, cancel, or refuse to renew any policies written by Company
hereunder by giving Partner Agent written notice of effective date of changes
that would affect this business.     E.   Partner Agent shall, within twenty
(20) calendar days of the inception of coverage, provide to Company all data and
statistical information relating to the underwriting of accounts. Partner Agent
is authorized to issue binders, certificates or other evidence of insurance.    
F.   The Company Guidelines may be amended or new Company Guidelines may be
adopted at the Company’s discretion without the need to amend this Agreement.
Such amendments or new Company Guidelines will be provided to the Partner Agent
in writing and must be implemented by Partner Agent in accordance with Company’s
instructions. Company will give Partner Agent reasonable notice in which to
enact such changes.     G.   Company retains the right to modify, cancel,
conditionally renew or non-renew any and all policies solely in Company’s
discretion.

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  H.   Partner Agent has no authority to solicit, negotiate or place any
reinsurance on behalf of Company.

II.   OBLIGATIONS OF AGENT

  A.   Partner Agent represents and warrants that (i) Partner Agent has any and
all ownership or other rights in the business contemplated herein necessary to
place such business with Company under this Agreement; (ii) Partner Agent
placing business under this Agreement is not in violation of any duty or
obligation owed to any other entity or person; and (iii) Partner Agent is, and
will continue to be, authorized and licensed in all material respects to perform
all acts set out in this Agreement while providing services under this
Agreement.     B.   The Program, as more specifically described in the Company
Guidelines and in Exhibit A of this Agreement, will be mutually exclusive,
unless otherwise stated in this Agreement. Company will be allowed to complete
existing obligations under insurance policies with other insurance carriers for
the Program. Unless otherwise specifically stated in this Agreement, Company
will not accept business encompassed within the Program from any entity other
than Partner Agent during the term of this Agreement. Partner Agent shall
exclusively represent Company and shall not represent any other insurance
company or similar entity in relation to the Program. In the event that a
conflict exists as to whether Partner Agent is authorized to represent an
existing or prospective policyholder, Company may honor the policyholder’s
written producer of record designation signed by the policyholder.
Notwithstanding the foregoing, Company shall be under no obligation to honor a
written producer of record designation from a policyholder before accepting
business from a designated Partner Agent, and Company’s determination of which
agent of Company represents Company with regard to a particular policyholder
shall be final and binding.     C.   Partner Agent shall be responsible for
compliance with all applicable state and federal laws, regulations, rules, and
requirements relating to the performance of Partner Agent’s obligations and the
general standards, rules, and regulations of the insurance industry and all
Company Guidelines as provided by Company in writing.     D.   Partner Agent
shall keep true, separate, accurate, and complete records of all transactions
related to the policies and all correspondence.     E.   All records and
documents applicable to the business relationship between Company and Partner
Agent shall be maintained by Partner Agent in a form and manner that is (i)
requested by Company, and (ii) secure and in accordance with Company’s record
retention guidelines and insurance regulatory practices. Such records and
documents shall continue to be maintained in a secure manner during the Term and
for a period of no less than five (5) years (or such longer period as Company
may request or is needed in order to preserve such records and documents under
state statutes of limitations) after termination of this Agreement. At the end
of such five (5)-year period or at any time Company requests, Partner Agent
shall provide Company with originals or copies of such records and documents. No
records or documents shall be destroyed at any time prior to five (5) years or
according to state regulation without Company’s prior written consent.     F.  
All records and documents of Partner Agent may be audited, examined, and/or
copied by representatives of Company at any time during normal business hours
and shall be made available for examination to reinsurers, or to any state
insurance department or regulatory body which so requires. Additionally, Partner
Agent shall permit authorized employees and representatives of Company to review
the operations of Partner Agent, both at its place of business and at other
locations during business hours upon ten (10) days written notice by Company.  
  G.   Partner Agent shall notify Company within forty-eight (48) hours of
notice or receipt of any complaint filed with any state insurance department or
other regulatory authority relating to the policies, whether against Company or
Partner Agent. The parties will work together to promptly and adequately respond
to any such complaint. If requested by Company, Partner Agent shall prepare a
response to any such complaint or, at Company’s discretion, provide a complete
written account to Company such that Company can respond; however, no response
shall be sent by Partner Agent prior to consulting with Company regarding such
response. Company retains the final authority on all responses relating to
complaints against Company. Company may establish formal complaint handling
procedures for Partner Agent to follow which are consistent with the
requirements set forth herein.     H.   Except as required by law, Partner Agent
shall not contact any state insurance department or other regulatory authority,
directly or indirectly, with regard to Company’s business without prior written
notice to Company. Partner Agent shall notify

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      Company promptly in the event that Partner Agent receives any contact from
any such department or authority with regard to Company’s business.     I.  
Partner Agent shall utilize automated business processing through Company’s
centralized technology system (“Company System”). Partner Agent shall be
responsible for any integration required for Company System to operate with
other third party systems of Partner Agent.     J.   If Company provides access
to Company information or networks through computer access, Partner Agent
endeavor to maintain the security and integrity of such information and of
Company’s systems. Partner Agent shall not knowingly introduce into Company’s
systems any virus or other harmful agent. Partner Agent shall be responsible for
assuring the quality of policy, premium, accounting and statistical data
submitted to Company consistent with Company standards. Partner Agent agrees to
adhere to the terms and conditions governing Partner Agent’s use of any existing
Company website or any website Company may own, make available, operate,
acquire, use from time to time, create or sponsor in the future, and related
services available under any such website. These terms and conditions regarding
use of any website or the content of any website may change without notice to
Partner Agent. Partner Agent’s use of these websites constitutes agreement to
the terms and conditions that exist at each point in time Partner Agent uses any
such website. Partner Agent may not use the name, logo, or service mark of
Company or any of its affiliates in any advertising, promotional material,
Internet site, or in any material disseminated by Partner Agent without the
prior written consent of Company. Partner Agent shall maintain copies and
provide an original to Company of any advertisement or other materials approved
by Company along with full details concerning where, when, and how it was used.
Use of any authorized item shall be limited to the scope of the current request
and approval, unless specifically authorized for broader use by Company.     K.
  All expenses associated with Partner Agent’s performance hereunder shall be
the responsibility of Partner Agent, including but not limited to general office
expenses, automation expenses, systems integration expenses, marketing expenses,
broker, producer, or countersigning commissions, fees, and taxes.     L.  
Partner Agent agrees that the Company rates, rating manuals, forms, Company
Guidelines, program analysis, underwriting records, management reports, and any
information as may have been or shall be provided by Company to Partner Agent
(the “Company Confidential Information”) are confidential and proprietary to
Company, shall be considered trade secrets of Company, and shall not be
disclosed to any third parties. Partner Agent agrees to maintain the
confidentiality of the Company Confidential Information. Partner Agent shall be
responsible to ensure that Partner Agent’s employees, agents, and
representatives are aware of and sensitive to the proprietary nature of the
Company Confidential Information, of the importance of confidentiality, and need
to comply with the confidentiality requirements in this Agreement. All Company
Confidential Information shall be returned by Partner Agent to Company promptly
upon request.     M.   Partner Agent agrees that Partner Agent and its
employees, agents, and representatives are (i) aware of the sensitive and
proprietary nature of any and all information each may receive with regard to
applicants, policyholders, beneficiaries of policies, and claimants (the “3rd
Party Confidential Information”); and (ii) aware of and will comply with:
(a) any and all applicable laws, regulations, rules, and requirements relating
to the 3rd Party Confidential Information; (b) the general standards, rules, and
regulations of the insurance industry relating to the 3rd Party Confidential
Information; and (c) all reasonable written instructions provided to Partner
Agent from time to time by Company relating to the 3rd Party Confidential
Information. Partner Agent shall comply with Company’s reasonable privacy
policies and shall hold all 3rd Party Confidential Information in trust and
confidence in compliance with Company’s privacy policy, and shall use the 3rd
Party Confidential Information only for the purpose contemplated in this
Agreement. Partner Agent agrees that it shall promptly refer any question
concerning any aspect of Company’s privacy policy to Company for resolution.    
N.   Notwithstanding anything set forth to contrary in this Agreement, the terms
Company Confidential Information and 3rd Party Confidential Information
(together, “Confidential Information”) do not include information which (a) is
or becomes available to the public through no breach of this Agreement; (b) was
previously known by Partner Agent without any obligation to hold it in
confidence; (c) is rightfully obtained from a person or entity not a party to
this Agreement without any obligation of confidentiality; or (d) is
independently developed by employees, agents, or representatives of Partner
Agent without use of or reference to Confidential Information.     O.   In the
event that Partner Agent is required (in connection with any third-party legal
proceedings, whether by motion, interrogatory, request for information or
documents, subpoena, civil investigation, demand or similar process) to disclose
any Confidential Information, Partner Agent shall provide Company with prompt
notice of such request so that an appropriate

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      protective order can be sought, if deemed necessary by Company. It is
agreed that, if in the absence of a protective order or the receipt of a waiver
hereunder, Partner Agent is nonetheless compelled to disclose any of such
information or else stand liable for contempt or suffer other censure or
penalty, Partner Agent may make the required disclosure without liability under
or breach of this Agreement.     P.   If requested by Company, Partner Agent
agrees to become a member of Company’s Partner Agent committee (“Partner Agent
Advisory Committee”). Partner Agent or appropriate designee shall attend all
meetings of the Partner Agent Advisory Committee, provide input at such
meetings, and cooperate fully with the Partner Agent Advisory Committee in all
aspects.     Q.   Partner Agent agrees to purchase a certain amount of Class B
exchangeable common stock (“Partner Agent Stock”) as more specifically outlined
in the Securities Purchase Agreement dated as of the date hereof by and between
the Company and the Partner Agent (“Securities Purchase Agreement”) which is
hereby incorporated by reference as an integral part of this Agreement.

III.   OBLIGATIONS OF COMPANY

  A.   Company shall act in accordance with the terms of this Agreement and will
pay Partner Agent a commission in accordance with Exhibit A (“Commission”) and a
share of profits in accordance with Exhibit B (“Profit Sharing” which, together
with “Commission”, is the “Compensation”) attached hereto and referenced herein.
Partner Agent shall be responsible for paying any compensation due to its sub
producers.     B.   Company shall provide for the payment of all excise taxes,
premium taxes (except surplus lines taxes) and assessments;     C.   Company
shall appoint Partner Agent as required by various state laws and regulations;  
  D.   Company will develop and maintain Company System.     E.   Company shall
comply with all applicable state and federal laws, regulations, rules, and
requirements relating to the performance of Company and the general standards,
rules, and regulations of the insurance industry and the Company’s internal
guidelines.

IV.   CLAIMS AND COVERAGE

  A.   Partner Agent shall promptly notify and cooperate with Company if Partner
Agent receives notice of any claim or potential claim which could involve
Company, any of its affiliates or subsidiaries, or the business written
hereunder.     B.   Partner Agent has no authority to adjust or settle any
claims arising out of or in connection with policies, shall not make any
statements regarding the application of coverage to specific situations, whether
actual or hypothetical, and shall not commit Company to any liability in
connection with any actual or potential claim or loss.     C.   Partner Agent
shall promptly report all claims, or potential claims, suits, or losses relating
to the policies to Company or to an assigned adjuster or claim representative
who has been designated by Company. Partner Agent shall cooperate fully with
Company or the assigned adjuster or claim representative in the investigation,
adjustment, settlement, and payment of claims and coverage matters. All records,
files, correspondence, or other materials pertaining to claims shall be the sole
property of Company.     D.   Company will consult with Partner Agent on the
selection of vendors and claims handling procedures (“Vendor Selection and
Claims Procedures”). Company retains sole discretion for Vendor Selection and
Claims Procedures.

V.   COMPENSATION OF AGENT

  A.   Company shall pay Partner Agent the Commission and Profit Sharing as
respectively described in Exhibit A and Exhibit B.     B.   With one hundred
eighty (180) days advance written notice, for reasons related to regulatory
constraints or industry issues including but not limited to Program coverage
resulting in an insurance industry or market downturn, the Company reserves the
right to adjust Partner Agent’s Commission as described in Exhibit A.     C.  
Effective at any time after a minimum of one hundred eighty (180) days advance
written notice to Partner Agent, Company may adjust the current payout period of
Profit Sharing as described in Exhibit B.

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  D.   It is understood and agreed that the Compensation paid hereunder shall be
full compensation for all services rendered by Partner Agent pursuant to this
Agreement.     E.   Partner Agent shall refund Commission, or other fees or
amounts retained by Partner Agent, to the policyholder or insured, as
appropriate, or to Company if requested by Company, from Partner Agent’s own
funds on a pro-rata basis on return premiums at the same rate as paid to Partner
Agent.     F.   The Commission applicable to multiple year policies (if Company
has bound such policies through Partner Agent) shall be the Commission that is
in effect for such policy during the year in which the policy is initially
written, and such Commission shall apply throughout the term of any such policy.
    G.   Partner Agent shall have no authority to, and shall not collect any
fee(s) on, the policies unless specifically authorized by Company and permitted
by law.     H.   Partner Agent shall calculate Commission based on premiums
collected by Partner Agent for policies reported to Company.

VI.   PREMIUMS AND ACCOUNTING

  A.   Partner Agent shall be responsible for collecting premiums, whether
advance, deposit, developed, installment, audit, renewal, additional, or
otherwise, on all policies other than direct-bill policies. Despite the
foregoing, however, Company reserves the right, in its sole discretion, to
communicate with, to directly collect premium from, and/or to cancel or
non-renew policies of, its insureds. Except as otherwise provided in this
Agreement, Partner Agent shall be liable for and pay all earned premium to
Company, even if Partner Agent does not collect such premium from the
policyholder. Uncollected premiums shall be remitted from Partner Agent’s own
funds and not the Premium Trust Fund. Partner Agent may deduct Commission from
the Premium Trust Fund.     B.   Within 10 days from the last day of each month,
Company shall provide Partner Agent with a monthly itemized statement (the
“Statement”) of money due to Company. Amounts due to Company pursuant to the
Statement shall be remitted to Company on or before the fifteenth day of the
following month the Statement was rendered. In the event of differences between
Partner Agent’s and Company’s records, Partner Agent shall provide all necessary
information to permit proper adjustment. Company’s records shall be presumed to
be correct.     C.   All premiums collected by Partner Agent are the property of
Company, shall not be commingled with any other funds, shall be held in trust on
behalf of Company in a fiduciary capacity, and shall be deposited and maintained
in an account separate and segregated from Partner Agent’s own funds or funds
held by Partner Agent on behalf of any other company or person (the “Premium
Trust Fund”). The Premium Trust Fund shall be placed in an interest bearing
account in a bank and account approved by Company in advance. Unless Partner
Agent has breached this Agreement, Partner Agent shall be authorized to retain
the interest on the Premium Trust Fund. Company may request at any time, and
Partner Agent shall provide, a reconciliation of the funds deposited in, and
balance due to Company from, the Premium Trust Fund.     D.   The omission of
any item(s) by the Company from the Statement does not affect Partner Agent’s
responsibility to properly account for policies and pay all amounts due, nor
does it prejudice the rights of Company to collect such amounts.     E.  
Partner Agent shall be liable for premiums on policies written through
submissions to Partner Agent by other brokers or producers, whether or not
collected by Partner Agent or such brokers or producers.     F.   No premium
advances may be made by Partner Agent from the Premium Trust Fund, and premium
advanced on behalf of any insured by the Partner Agent shall not be reversed.
Partner Agent accepts full responsibility for such premiums.     G.   After
making a diligent effort to collect such premiums and submitting documentation
of that diligent effort to Company which Company reasonably determines to be
sufficient, Partner Agent may request in writing that premiums due as a result
of audit of a particular insured be collected directly by Company. Company
agrees to assume responsibility for collecting such additional premiums and
Partner Agent will have no further obligation with respect thereto. Company will
have no obligation to collect amounts hereunder unless Partner Agent’s written
request is made within 45 days of the billing date shown on the audit statement.
Partner Agent shall not be entitled to Compensation on premiums Partner Agent
requests Company to collect or Company undertakes to collect, regardless of the
amounts collected by Company.

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  H.   Should Partner Agent default in any payment of premiums on any policy,
Company shall have the right to require that all premiums on all policies are
due and payable immediately.     I.   Partner Agent agrees to be responsible for
the payment of any applicable surplus lines taxes and the filing of all
affidavits as required by the applicable entities, and shall provide Company
with written evidence of such payment and compliance on a quarterly basis.    
J.   Partner Agent shall not be entitled to any Compensation on any premium
which Company determines (i) to collect (whether or not collected), (ii) in its
sole discretion to write-off, or (iii) is overdue and is collected by Company,
regardless of the amounts collected. Nothing contained herein shall alter
Partner Agent’s obligation to remit all premium to Company, whether or not
collected.

VII.   INSURANCE AND INDEMNITY

  A.   Partner Agent shall maintain the following insurance amounts with an
insurer having a rating with A.M. Best of at least “A-“: (i) errors and
omissions insurance covering Partner Agent and its employees in the minimum
amount of $1,000,000 per claim, $2,000,000 aggregate, with a deductible not
exceeding an amount agreed by Company, (ii) fidelity insurance covering Partner
Agent and its employees in the minimum amount of $1,000,000 and (iii) general
liability insurance covering Partner Agent and its employees in the minimum
amount of $1,000,000. Partner Agent agrees to promptly notify Company when it
receives notice of lapse, increased deductibles, decreased coverage,
non-renewal, or termination of any such coverage. Partner Agent agrees to notify
Company of any claim brought under any errors and omissions or fidelity
insurance which arises out of or is connected with a policy or policies. At the
inception of this Agreement and on or before January 31 of each year thereafter,
Partner Agent shall furnish Company proof of this insurance.     B.   Company
agrees to fully indemnify, defend, and hold harmless Partner Agent from any and
all liability, claims, demands, suits, fines and penalties, expenses, costs and
attorney fees, made or assessed against or incurred by Partner Agent or the
officers, directors, or affiliates of Partner Agent, that may arise by reason of
any act, error, or omission of or any misrepresentation by Company or its
officers or employees.     C.   Partner Agent agrees to fully indemnify, defend,
and hold harmless Company from any and all liability, claims, demands, suits,
fines and penalties, expenses, costs and attorney fees, made or assessed against
or incurred by Company or the officers, directors, or affiliates of Company,
that may arise by reason of any act, error, or omission of or any
misrepresentation by Partner Agent, its officers or employees, or brokers or
producers submitting business to the Partner Agent pursuant to this Agreement.  
  D.   The indemnifying party shall have the right to direct the investigation,
settlement, and defense of any such claim, complaint or action. If the
indemnifying party assumes the defense of any such action, such party shall not
be liable to the indemnified party for any expenses incurred by such indemnified
party in connection with such action.

VIII.   TERM AND TERMINATION

  A.   This Agreement shall commence on the Effective Date and shall be
continuous until terminated (the “Term”).     B.   At any time during the Term
hereof, Partner Agent may terminate this Agreement without cause on one hundred
eighty (180) days written notice of termination to Company. Partner Agent’s
authority to place new business with Company shall cease immediately upon
receipt of such notice of termination. Partner Agent’s authority to renew
business with Company shall cease as of the effective date of termination.    
C.   At any time during the Term, Company may terminate this Agreement on one
hundred eighty (180) days (or such longer period as mandated by regulation)
written notice of termination to Partner Agent if Partner Agent has not met the
Company Guidelines pertaining to profitability and/or production. Partner
Agent’s authority to submit new business with Company will cease on ninety
(90) days after receipt of such notice of termination. Partner Agent’s authority
to submit renewals with Company shall cease as of the effective date of
termination. Any disputes regarding Company Guidelines shall be determined in
Company’s sole discretion.     D.   Upon written notice, Company may immediately
terminate this Agreement in whole or in part for cause, which shall include, but
not be limited to, the following:

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  1.   Partner Agent, or its parent or any affiliated corporation becomes
insolvent, institutes or acquiesces in the institution of any bankruptcy,
financial reorganization, or liquidation proceeding or any such proceeding is
instituted against Partner Agent or its parent corporation (Partner Agent shall
promptly notify Company of same); or     2.   Partner Agent, or the owner of a
controlling interest in Partner Agent, sells, exchanges, transfers, assigns,
consolidates, pledges or causes to be sold, exchanged, transferred, assigned,
consolidated, or pledged: (i) all or substantially all of the assets of Partner
Agent, or any entity controlling Partner Agent, to a third party, or (ii) a
controlling interest in Partner Agent, or any entity controlling Partner Agent,
to a third party (Partner Agent shall promptly notify Company of same); or    
3.   Partner Agent fails to correct material deficiencies as noted in any agency
audit or program review within the time frame set out in the audit; or     4.  
Partner Agent fails to render timely and proper reports or premium accounting as
required, or remit premiums when due; or     5.   Partner Agent fails to
maintain premium funds in trust as required in this Agreement; or     6.  
Partner Agent engages in acts or omissions constituting abandonment, fraud,
insolvency, misappropriation of funds, material misrepresentation, or gross and
willful misconduct; or     7.   Partner Agent’s license or certificate of
authority is cancelled, suspended, or is declined renewal by any regulatory body
within the Territory where Partner Agent transacts or services policies (Partner
Agent shall promptly notify Company of same); for fraud or if for more than
thirty (30) days for any other reason; or     8.   Partner Agent otherwise
materially breaches this Agreement and such breach is not cured, if capable of
cure, within thirty (30) days of written notice from Company to Partner Agent of
such breach.

  E.   In the event this Agreement is terminated or any authority of Partner
Agent is suspended, limited, or terminated (whether by Company, Partner Agent,
or agreement of the parties), Partner Agent shall, subject to all terms,
conditions, and restrictions contained in this Agreement, service all business
until all such business has been completely cancelled, non-renewed, or otherwise
terminated and all claims hereunder have been closed. Company may, in its sole
discretion, immediately suspend or terminate Partner Agent’s continuing service
obligation as outlined in Program Guidelines. Notwithstanding the foregoing,
Partner Agent shall not, without the prior written approval of Company, increase
or extend the Company’s liability under, extend the term(s) or condition(s) of,
or cancel and re-write, any policies.         If Partner Agent fails to fulfill
any service obligation under this Agreement or comply with this Agreement, then
Partner Agent shall reimburse Company any expense incurred by Company as a
result of non-compliance, or in servicing or arranging for the servicing of
business, or such amounts may be offset by Company.     F.   Any notice of
termination shall be in writing and sent by certified mail or personally
delivered. Such notice shall be deemed received three (3) days from the date of
mailing or, if personally delivered, the date delivered. Unless changed by
giving written notice to the other party, the addresses of the respective
parties are:

Partner Agent:
American Patriot Insurance Agency, Inc.
2 Westbrook Corporate Center, Suite 1000
Westchester, IL 60154
Facsimile: 630-990-9098
Attn: Lysa Saran, President
With a copy to
Leo & Brooks, LLC
Attn: Karl Leo

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200 Randolph Avenue, Suite 200
Huntsville, AL 35801
Company:
Specialty Underwriters’ Alliance, Inc.
222 South Riverside Plaza
Chicago, IL 60606
Facsimile: 1-312-277-1800
Attention: Scott Goodreau, General Counsel

IX.   GENERAL PROVISIONS

  A.   If Partner Agent materially breaches this Agreement for any reason
whatsoever, Company may, in lieu of terminating the Agreement, suspend some or
all of the authority of Partner Agent under this Agreement. Additionally,
Company may suspend the authority of Partner Agent during the pendency of any
dispute regarding termination or suspension.     B.   During the Term and
following termination of the Agreement, if Partner Agent has made full payments
of all amounts due Company and continues to do so in a timely manner, then the
expirations and renewals shall be the property of Partner Agent; provided,
however, that Company shall have the absolute right to write or renew such
business as may be required by law, and to take any and all actions with regard
to the business as may be required in order to service the business or as may be
required by law or pursuant to the policy’s terms.         If, during the Term
and following termination of this Agreement, Partner Agent has not made full
payment to Company, the expirations and renewals shall not be the property of
Partner Agent, and the Company shall be entitled to the expirations and
renewals, and the use and control of the expirations and renewals shall be
vested in Company for sale, use, or disposal as Company deems fit.     C.  
Partner Agent will advise Company promptly after learning that it, a key
employee of Partner Agent, or any of Partner Agent’s brokers or producers have
been or are in the future convicted of a felony.     D.   This Agreement and the
Securities Purchase Agreement constitute the entire agreement between Company
and Partner Agent and supersedes any and all other agreements, either oral or
written, between Company and Partner Agent with respect to the business. No
waiver by either party to enforce any provisions of this Agreement will be
effective unless made in writing and signed by an authorized officer of Company
and Partner Agent and shall be effective as to the specifically stated waiver
date. No amendment to this Agreement will be effective unless made in writing
and signed by the parties hereto, and specifying the effective date of such
amendment.     E.   Company may combine or offset any balances or funds owed by
Partner Agent to Company against any balances or funds owed to Partner Agent by
Company under this Agreement or any other agreement between the parties. Because
the funds held by Partner Agent are held in trust for Company, Partner Agent may
not offset any balance due from Company to Partner Agent under this Agreement or
under any other agreement with Company or any other party against the Premium
Trust Fund.     F.   This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to its rules
regarding conflict of laws. Notwithstanding the foregoing, matters relating to
agency termination and Partner Agent’s right or Company’s obligations on
termination shall be governed solely by the applicable insurance laws, if any,
of the state in which Partner Agent is domiciled. The parties hereto consent to
the jurisdiction of the courts of the State of Illinois in any matters
pertaining to this Agreement which are not otherwise resolved in accordance with
subsection G. below.     G.   Except as provided herein, all unresolved
differences of opinion or disputes between Company and Partner Agent arising out
of or in connection with this Agreement or any transaction hereunder shall first
be attempted to be settled by a good faith meeting of a member of senior
management of each of Company and Partner Agent and/or by mediation. If any
unresolved differences of opinion or disputes still exist after such meeting,
then such matters shall be submitted to arbitration in accordance with the rules
relating to commercial arbitration of the American Arbitration Association.
Arbitration initiated by one party will allow the other party to select the
situs of the arbitration proceedings. Notwithstanding the foregoing, Company
shall be entitled to the issuance of an injunction or other legal or equitable
action to obtain premiums or monies

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      due, to prohibit Partner Agent’s use of funds, to prohibit Partner Agent’s
writing business in violation of this Agreement, or to require Partner Agent’s
deposit of such funds in accordance with this Agreement. If Company prevails in
any such action, the cost and expense thereof, including attorneys’ fees, shall
be borne by Partner Agent. Partner Agent may not assign this Agreement, delegate
its duties, or assign its rights under this Agreement, unless otherwise agreed
upon and authorized in writing in advance by Company.     H.   This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original but which together shall constitute one and the same instrument.     I.
  The parties hereby agree that all provisions of this Agreement shall survive
termination, except that Paragraph I (A) hereof shall only survive as modified
by Article VIII.     J.   Notwithstanding anything to the contrary set forth
herein, neither party to this Agreement shall be liable for any losses or
damages of any nature whatsoever incurred or suffered as a result of any
failures, interruptions, or delays in performance due to any cause of
circumstances beyond its reasonable control, including but not by way of
limitation, any failures, interruption, or delays in performance caused by
strikes, lockouts, or labor disputes, fires, acts of God or the public enemy,
riots, incendiaries, terrorism, interference by civil or military authorities,
compliance with the laws of the United States of America or with the orders or
policies of any governmental authority, equipment failure or malfunction, delay
in transit or delivery on the part of transportation companies or communication
facilities, or failures of sources of raw materials. General economic conditions
shall not constitute a force majeure condition.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
effective as of the Effective Date first above written.
Specialty Underwriters’ Alliance, Inc.

     
By: /s/ WILLIAM S. LODER
 
   
Name Printed: William S. Loder
    Title: Senior Vice President, Chief Underwriting Officer

American Patriot Insurance Agency, Inc.

     
By: /s/ LYSA SARAN
 
   
Name Printed: Lysa Saran
   
Title: President
   

9

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EXHIBIT A
COMMISSION SCHEDULE

  A.   Except as otherwise provided in this Commission Schedule, Partner Agent’s
Commission shall be as follows:

          Program Description   Line of Business   Maximum Rate of Commission
Roofing Contractors in Arizona, Florida, Georgia Illinois, Iowa, Kentucky,
Louisiana, Maryland, Mississippi, Missouri, New Jersey, Tennessee, Texas,
Virginia, Wisconsin, and any other states specifically agreed to by Company and
Partner Agent
  General Liability and Commercial Automobile   15% for business written through
retail brokerage

12% for business written direct or through American Builders & Contractors
Supply Co., Inc. also d/b/a ABC Supply Co., Inc.

  B.   The rates of Commission provided in this Schedule do not relate to the
following types of business:

  1.   Business which Company determines is specially rated, specially
classified, or specially reinsured;     2.   Business written subject to a
participating plan;     3.   Business placed through assigned risks, fair plans,
pools, or other risk-sharing associations.         Commission rates for all such
business shall be negotiated on an individual policy basis and agreed by Company
in writing.

C. Commissions different than provided herein may be agreed to in writing
between Partner Agent and Company, and such agreement shall supercede this
Commission Schedule.

A-1

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EXHIBIT B
PROFIT SHARING SCHEDULE
The Profit Sharing Due to Partner Agent will be calculated using the following
Tables:
TABLE I
Profit Sharing Year [      ]

                      Premium            
 
  1.   Eligible Earned Premium for Profit Sharing Year   $        
 
                 
 
  2.   Premium Written Off   $        
 
                 
 
  3.   Ceded Facultative Reinsurance   $        
 
                 
 
  4.   Net Eligible Earned Premium   $        
 
                 
 
      (Line 1 minus Line 2 minus Line 3)            
 
                    Expenses            
 
  5.   Commissions incurred for Profit Sharing Year   $        
 
                 
 
  6.   Losses and ALAE Incurred for Profit Sharing Year   $        
 
                 
 
  7.   TPA Claims Fee for Profit Sharing Year   $        
 
                 
 
  8.   Claims Charge for Profit Sharing Year (% times line 4)   $        
 
                 
 
  9.   IBNR Charge for Profit Sharing Year   $        
 
                 
 
  10.   Taxes, Licenses and Fees for Profit Sharing Year   $        
 
                 
 
  11.   Operating Charge (% times line 4)   $        
 
                 
 
  12.   Dividends Incurred for Profit Sharing Year   $        
 
                 
 
  13.   Expense Total (Sum of Lines 5, 6, 7, 8, 9, 10, 11 and 12)   $        
 
                 
 
                    Profit Sharing Year Result            
 
  14.   Profit Sharing Year Result   $        
 
                 
 
      (Line 4 minus line 13)            
 
      (Can be negative)            
 
  15.   Profit Sharing Factor         50 %
 
  16.   Profit to be Shared (Line 14 times Line 15)   $        
 
                 
 
      (Can be negative)            
 
  17.   Payout Factor           %
 
                 
 
  18.   Result (Line 16 times Line 17)            
 
      (Can be Negative)   $        
 
                 

B-1

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Based on this Table, the Partner Agent’s Combined Ratio is ___% (line 13 divided
by line 4 times 100). The maximum Profit Sharing due the Partner Agent will be
limited to 7% of Net Eligible Premium per Profit Sharing Year.
LEGEND
Table I

     
Line 1.
  Eligible Earned Premium shall mean direct premium earned for Profit Sharing
Year which relates to Eligible Business less premium ceded (less ceding
commission received) for treaty reinsurance specifically related to Eligible
Business purchased by the Company for the Profit Sharing Year.  
Line 2.
  Premium Written Off shall include any premium due Company which Company has
charged off as uncollectible for the Profit Sharing Year.  
Line 3.
  Ceded Facultative Reinsurance shall include earned premium ceded (less ceding
commissions received) for facultative reinsurance specifically related to
Eligible Business purchased by Company for Profit Sharing Year.  
Line 5.
  Commissions shall include the direct commissions and policy fees (if included
in Eligible Earned Premium) incurred by Company for the Profit Sharing Year,
relating to Eligible Business. Additionally, Company shall add to such total any
amounts or expenses of Partner Agent which Company agrees to reimburse, assume,
or share.  
Line 6.
  Losses and ALAE Incurred shall be direct losses and expenses incurred (paid
plus case reserves) by Company on claims reported for the Profit Sharing Year
relating to Eligible Business, excluding unallocated loss adjustment expense,
plus any extra contractual or bad faith payments relating to Eligible Business
less recoveries from Ceded Treaty and Facultative Reinsurance specifically
related to eligible business.  
Line 7.
  TPA Claims Fee shall be actual fees incurred by the Company on behalf of the
Partner Agent for the current Profit Sharing Year.  
Line 8.
  Claims Charge shall be a designated percentage determined by Company based on
unallocated loss adjustment expense for the current Profit Sharing Year times
Net Eligible Earned Premium.  
Line 9.
  IBNR Charge shall be determined solely by the Company and shall include a
provision for the reserve for Losses and ALAE Incurred but not reported during
the Profit Sharing Year, which reserve shall include development on losses and
ALAE already reported to Company. The IBNR calculation will take into
consideration the specific lines and classes of business written by the Program
Agent.  
Line 10.
  Taxes and Assessments shall include any loss based or premium based
assessments and any expenses relating thereto, and premium taxes, boards,
bureaus, and any miscellaneous taxes including insurance department licenses and
fees, relating to Eligible Business allocated by Company to Eligible Earned
Premium including but not limited to residual market, fair plan or guaranty
association assessments.  
Line 11.
  Operating Charge shall be a designated percentage for the current Profit
Sharing Year times Net Eligible Earned Premium. Operating Charge shall be
determined solely at Company’s discretion and shall be based on the operating
expenses of Company not included in any of the line items described herein.  
Line 12.
  Dividends Incurred shall include all dividends incurred (paid plus an estimate
of accrued but not paid) for the Profit Sharing Year by Company under Eligible
Business.  
Line 15.
  Profit Sharing Factor shall be 50%. A minimum Eligible Written Premium of
twenty million dollars ($20,000,000) must be achieved within twenty-four
(24) months from the Effective Date of the Agreement for continuation of any
profit sharing. Eligible Written Premium shall mean direct premium written for
Profit Sharing Year which relates to Eligible Business.

B-2

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Line 17.
  Payout Factor shall be calculated according to the following chart:

PROFIT SHARING AGREEMENT
PAYOUT FACTORS

              5 Years
1st Valuation
    20 %
2nd Valuation
    40 %
3rd Valuation
    60 %
4th Valuation
    80 %
5th Valuation
    100 %

B-3

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Timing of Calculation of Profit Sharing Due

A.   If Partner Agent meets the Minimum Eligible Written Premium requirements
for a Profit Sharing Year, Company shall calculate Profit Sharing Due to Partner
Agent for the Profit Sharing Period based on Company’s records. Such calculation
shall be provided to Partner Agent sixty (60) days after each Valuation Date.  
B.   Each Profit Sharing Year’s calculation will include a separate
re-calculation of each prior Profit Sharing Year. Re-calculations for each prior
Profit Sharing Year will be as of the current Valuation Date, and will be made
utilizing the formula set forth in Table I. A summary of calculations made for
each Profit Sharing Year will be entered on current Profit Sharing section of
Table II.   C.   Provided that all premium or other amounts due Company shall
have been received by Company, within sixty (60) days after completion of the
calculation of Profit Sharing Due, Company shall pay the amount of Profit
Sharing Due to Partner Agent for the Profit Sharing Period as shown in Table II.

LEGEND
Other Defined Terms used in this Agreement

A.   Eligible Business shall include policies written in the Program pursuant to
this Agreement. Determination of whether a policy is Eligible Business shall be
in the sole discretion of Company.   B.   The Initial Profit Sharing Year of
this Agreement shall be from the Effective Date to December 31st following the
Effective Date (“Initial December Date”). Notwithstanding the foregoing, the
Initial Profit Sharing Year of this Agreement shall be from the Effective Date
to December 31st following the Initial December Date if the Effective Date is
between April 1 and December 31st. Subsequent Profit Sharing Years, if any,
shall be January 1st to December 31st.   C.   Valuation Date shall mean
June 30th of each year. Except as otherwise set forth below, Company shall
continue providing calculations for each Profit Sharing Year through the
June 30th of each successive year following termination of this Agreement, the
Final Profit Sharing Year, or until the parties mutually agree in writing to
close the calculations for a particular Profit Sharing Year or Profit Sharing
Years.

Term and Termination
This profit sharing schedule will terminate upon the effective date of
termination of this Agreement. The Final Profit Sharing Year under this
Agreement will be the Profit Sharing Period ending as of the effective date of
termination.
In the event this Agreement is terminated prior to the fifth anniversary of the
Effective Date by the Partner Agent, Company shall provide no further Profit
Sharing calculations. In the event that this Agreement is terminated prior to
the fifth anniversary of the Effective Date by Company in accordance with
Section VIII (D), Company shall provide no further Profit Sharing calculations.
General
No charge, offset, credit, or deduction for any Profit Sharing which is or may
be due Partner Agent shall be made or claimed by Partner Agent in accounts
submitted to Company under this Agreement or any other agreement. Profit Sharing
Due shall be payable only by Company’s check. Company may combine or offset any
amount owed to Partner Agent by Company hereunder against any amount owed to
Company by Partner Agent under any other agreement between the parties.

B-4