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Exhibit 10.5
 
INSURANCE AGENCY MASTER AGREEMENT

THIS INSURANCE AGENCY MASTER AGREEMENT (this “Agreement”) is entered into on
this February 4th, 2013, by and between Ivantage Select Agency, Inc., an
affiliate of Allstate Insurance Company (“Allstate”), with its principal office
located at 3100 Sanders Rd, Northbrook, IL 60062 (“ISA”) and Federated National
Underwriters, Inc., a Florida corporation with its principal office located at
14050 NW 14th Street, Suite 180, Sunrise, Florida 33323 (hereinafter “COMPANY”)
(singularly “Party” and collectively the “Parties”).

W I T N E S S E T H:

WHEREAS, ISA, a licensed insurance producer, has access to a network of licensed
captive insurance producers (“Producers”), who solicit insurance exclusively on
behalf of Allstate Insurance Company, its subsidiaries and affiliates
(“Allstate”);

WHEREAS, COMPANY, is authorized by Federated National Insurance Company to
solicit the Coverage and, if applicable, to make the appointments as set forth
in this Agreement;

WHEREAS, COMPANY and ISA desire to enter into a written agreement that sets
forth their rights and obligations with respect to making certain insurance
products available to consumers through ISA’s expanded markets program; and

NOW, THEREFORE, in consideration of the recitals and the mutual promises
contained herein, the receipt and adequacy of which are acknowledged by all
Parties, the Parties to this Agreement agree as follows:

Section 1. Relationship.

(a)            During the term of this Agreement, it is expressly understood
that neither Party is subject to an exclusive arrangement herein and may
represent other carriers or contract with other wholesale agencies,
intermediaries or producers during the term of this Agreement with respect to
Coverage. Furthermore, ISA shall have exclusive discretion to determine which
risks, if any, that may be submitted for consideration by COMPANY. Likewise,
COMPANY shall have exclusive discretion to determine which risks it chooses to
accept.

(b)            ISA is a licensed producer and warrants that it is appropriately
licensed as an Agency in accordance with the laws, rules and regulations of all
states in which ISA shall transact business pursuant to this Agreement. ISA is
an independent contractor and nothing herein shall be construed as creating the
relationship of employer and employee between COMPANY and ISA.

(c)            ISA and Producers have the authority, unless revoked by COMPANY,
to accept, bind, or cancel on behalf of COMPANY. COMPANY agrees to revoke a
Producer’s authority at the written request of ISA. Additionally, ISA and
Producers shall not assign, adjust or settle any losses on behalf of COMPANY.
Notice to the ISA does not constitute notice to COMPANY.

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Section 2. Term. This Agreement shall commence on the date this Agreement is
executed by both Parties and shall continue until terminated in accordance with
the provisions of Section 17 of this Agreement.

Section 3. Scope.

(a)            The scope of this Agreement regarding a particular insurance
product or service will be defined in an attachment referenced herein as a
Schedule ("Schedule"). Each Schedule will delineate: the carrier(s) approved by
ISA, which must hold a Demotech, Inc. Financial Stability Rating (Demotech FSR)
rating of A or better; the agreed-upon line or lines of insurance; compensation
and territories, as applicable. “Coverage” shall be defined, for purposes of
this Agreement, to mean those insurance products and services identified in the
Schedules attached hereto that are not currently underwritten by Allstate or are
not acceptable under Allstate’s underwriting or administrative guidelines and
that Producers have been authorized by ISA to place through COMPANY.

(b)            Each Schedule is subject to the terms and conditions of this
Agreement as may from time to time be amended in writing and signed by both
Parties, and each Schedule may incorporate such additional terms and conditions
as ISA and COMPANY may agree upon. Each Schedule, in conjunction with this
Agreement, shall constitute a separate, distinct, and independent agreement and
contractual obligation. To the extent that there is any conflict between the
provisions of this Agreement and a Schedule, the terms of this Agreement shall
control the rights and obligations of the Parties unless a Schedule expressly
amends the terms of this Agreement and is signed by authorized representatives
of both Parties.

(c)            COMPANY acknowledges that Allstate has the right to change,
alter, add to or amend its current policies, products, and services as well as
to modify its underwriting or administrative guidelines, from time to time at
its sole discretion, the result of which will be to change the definition of
Coverage. COMPANY also acknowledges that ISA retains the right of final approval
of any and all Coverage products or programs to be made available through
Producers. COMPANY agrees to adjust its practices of providing Coverage so that
it will not infringe upon Allstate’s right to market its insurance products and
so that Producers can make products available to the broadest market.

Section 4. COMPANY’s Obligations. COMPANY shall make commercially reasonable
efforts to place Coverage and shall not knowingly accept from Producer, nor
shall it knowingly secure Coverage for any risk which is currently underwritten
by, and acceptable to Allstate at time of receipt by Agent. Company shall
provide the services set forth in Exhibit A attached hereto or as amended, all
in accordance with applicable state and federal laws and regulations.
Furthermore, COMPANY shall adhere to all Service Standards attached hereto as
Exhibit D or as mutually agreed to by the Parties in writing.

Section 5. ISA Obligations. ISA shall provide the services set forth in Exhibit
B attached hereto or as amended, all in accordance with applicable state and
federal laws and regulations. Premiums for all policies issued shall be direct
billed to customers by COMPANY or its affiliates.
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Section 6. Trademarks, Service Marks and Trade Names. Each Party agrees not to
display or use any of the other party’s or its affiliates’ trade names, service
marks, or trademarks, and shall not permit the same to be displayed or used by
third parties, other than specifically as authorized in advance in writing by
the other Party. Both Parties agree that ISA and Producers may use COMPANY and
its affiliates name for adhering to applicable laws and regulations, and for
distribution of ISA’s Expanded Market Program Notice and Authorization. Each
Party acknowledges and agrees that the trade names, service marks, and
trademarks of the other are proprietary to the other Party and that nothing in
this Agreement constitutes the grant of a general license to use such trade
names, service marks, or trademarks. Upon termination of this Agreement, each
Party shall discontinue the use of the other’s trade names, service marks, or
trademarks previously authorized in connection with any business conducted by
it. This Section 6 shall apply to the trade names, service marks and trademarks
of either Party’s affiliated companies.

Section 7. Compensation. * by the 10th business day of the following month in
which premiums are received by COMPANY. COMPANY shall provide to ISA reports of
the amounts of compensation that COMPANY paid to Producers in the manner and
format prescribed in Exhibit D, by the 10th business day of the following month
in which premiums are received by COMPANY. Any commission amounts owed or
payable, by either Party, at the time of termination shall survive termination
of this Agreement and for such time as any policies issued pursuant hereto
remain in-force.

Section 8. Directly Appointed Producers. COMPANY will enter into an agency
agreement between COMPANY and the applicable Producer. Any such agreement must
be approved in writing by ISA, which approval shall not be unreasonably
withheld. Any such agreement shall state that the Producers do not own any
expirations of the business placed under this Agreement. Both Parties agree that
COMPANY shall have exclusive authority to grant or deny direct appointments and
that the conditions under which directly appointed Producers shall be governed
by the agency agreement between the Producer(s) and COMPANY, as authorized and
in accordance with any agreements between Producer(s) and ISA.

Section 9. Premium Collection Standards. Policies written under this agreement
shall be issued on a direct bill basis. It is not anticipated by the Parties
that ISA will receive premiums under this Agreement.

Section 10. Maintenance of Records and Files and Transfer Upon Termination.
COMPANY and ISA shall maintain in their principal designated administrative
offices books, records, files and other documents relating to this Agreement and
transactions between them. ISA shall not be required to maintain books, records,
files and other documents produced and maintained by Producers. Such books,
records, files and documentation shall be maintained in accordance with all
applicable laws and regulations in states where the Parties conduct business
under this Agreement and applicable state insurance regulatory entity
directives, consistently applied.

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*Portions of this document omitted pursuant to an application for an order for
confidential treatment pursuant to Rule 24b-2 under the Exchange Act.
Confidential portions of this document have been filed separately with the
Securities and Exchange Commission.
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Section 11. *
 
(a)
*

 
(b)
*

Section 12. Financial Statement; Right to Audit.

(a)            COMPANY agrees that it shall keep true books and records, in
accordance with sound accounting practices and principles applied on a
consistent basis from year to year, of all dealings or transactions with respect
to COMPANY’s operations pursuant to this Agreement. All such books and records
of COMPANY shall be kept at COMPANY’s place of business or such other place(s)
as the Parties may hereunder agree and will be available in hard copy if stored
in an electronic data file.

(b)            COMPANY agrees to permit ISA, its accountants, attorneys, and
assigns, upon one (1) week’s advance written notice and at ISA’s own expense,
the right to enter upon COMPANY’s property during regular business hours, during
the term of this Agreement for the purpose of examining, inspecting or making
copies of COMPANY’s records which pertains to the conduct of business under this
Agreement, but the same shall be done with as little disruption to the business
of COMPANY as possible. ISA, at its own expense, shall be permitted to use the
services of independent accountant or attorneys.

Section 13. *

Section 14. Confidentiality.

(a)            The Parties acknowledge that each Party may make Confidential
Data available to the other Party or may otherwise learn of trade secret or
confidential information of the other Party (collectively, hereinafter
"Confidential Data"). Confidential Data includes all information not generally
known or used by others and which gives, or may give, a Party an advantage over
its competitors or which could cause injury, embarrassment, or loss of
reputation or goodwill if disclosed. Such information includes, but is not
necessarily limited to, data which identify or concern the Producers, such as
Allstate Agent numbers and office locations, information about business
practices, underwriting guidelines of Allstate or its affiliates, financial
results, research, development, systems, insurance products and plans; and/or
certain information and material identified by a Party as "Confidential" or
“Proprietary”; and/or data one Party furnishes to the other Party from its
database or third Party vendors; and/or data received from one Party and
enhanced by the other Party. Confidential Data shall include information and
data provided by or on behalf of any former, current or prospective customers of
Allstate. Confidential Data may be written, oral, recorded, or on tapes, disks
or other electronic media. Because of the sensitive nature of the information
that the Parties and their respective personnel may become aware of as a result
of this Agreement, the intent of the Parties is that these provisions be
interpreted as broadly as possible to protect Confidential Data.
 

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*Portions of this document omitted pursuant to an application for an order for
confidential treatment pursuant to Rule 24b-2 under Exchange Act. Confidential
portions of this document have been filed separately with the Securities and
Exchange Commission.
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(b)            Each Party acknowledges that all Confidential Data furnished by
the other Party may be considered a proprietary trade secret and is a matter of
strict confidentiality. Each Party also acknowledges that the unauthorized use
or disclosure of Confidential Data of the other Party will cause irreparable
harm to the other Party. Accordingly, each Party agrees that the other Party
shall be entitled to seek equitable relief, including injunction and specific
performance without the necessity of posting a bond, in addition to all other
remedies available at law or in equity for any threatened or actual breach of
this Agreement.

(c)            Each Party agrees that it will employ the same security measures
to Confidential Data received from the other Party that it would apply to its
own comparable confidential information (but in no event less than a reasonable
degree of care in handling Confidential Data). Without limiting the generality
of the foregoing, except as specifically permitted in this Agreement, each Party
further agrees that it will not distribute, disclose or convey to third parties
any Confidential Data except as set forth in Section 14 (d) (e) and (f). ISA
permits Confidential Data to be used by COMPANY solely for the purpose of
placing and servicing Coverage or responding to Regulatory inquiries lawfully
requested.

(d)            Both Parties agree that Confidential Data shall be used by ISA,
Allstate and the Producers. The Parties agree that Confidential Data shall not
be disclosed to or accessed by any other unaffiliated third party, except as
authorized in writing by the Parties. Both Parties agree that ISA and Producer
shall share Confidential Data with Allstate.

(e)            Each Party further agrees, unless otherwise provided for, that:
a) only those with a defined need to know for purposes of placing and servicing
Coverage shall be granted access to Confidential Data and only after they have
been informed of the confidential nature of the Confidential Data; (b)
Confidential Data (excluding any non-public personal information related to
former, current. Or perspective customer or Producers) may be distributed,
disclosed, conveyed to, or used by any consultant or subcontractor retained by
it, which shall be conditioned upon prior written notice to the other Party and
such consultant or subcontractors agreeing to be bound by similar
confidentiality terms; (c) no copies or reproductions shall be made of any
Confidential Data of the other Party except to effectuate the purpose of this
Agreement; (d) it shall not make use of any Confidential Data for its own
benefit or for the benefit of any unaffiliated third party. If either Party
becomes aware of a threatened, suspected or actual breach of this Section, then
that Party must provide immediate notice to the other Party.

(f)            Neither Party, nor its officers, directors, or employees, shall
disclose the terms of this Agreement to any unaffiliated third party without the
prior written consent of the other Party, except pursuant to a valid court order
or as otherwise required by law. Each Party further agrees that, should third
parties request the Party or its consultants or subcontractors to submit
Confidential Data of the other Party to them pursuant to subpoena, summons,
search warrant or governmental order, it will notify the other Party immediately
upon receipt of such request. Notice shall be forwarded via overnight courier by
receiving Party to other Party no later than three (3) business days after
receipt by receiving Party. If the other Party objects to the release of the
Confidential Data, the Party receiving the request will permit counsel chosen by
the other Party to represent it in order to resist release of the Confidential
Data. The Party resisting the release of such Confidential Data will indemnify
the other Party for any expenses incurred by it in connection with resisting the
release of the Confidential Data.
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(g)            The obligations set forth in paragraphs (a) through (g) above
shall not apply to: a) Confidential Data: 1) which has become well known in the
trade; 2) which was disclosed to a Party by a third party not under an
obligation of confidentiality to the other Party; 3) which was independently
developed by a Party not otherwise in violation or breach of this Agreement or
any other confidentiality obligation to the other Party; 4) which was rightfully
known to a Party prior to entering into this Agreement; or b) any disclosure
specifically authorized in writing by a Party.

(h)            No rights or licenses, express or implied, are granted by one
Party to the other under any patents, copyrights, trade secrets or other
proprietary rights as a result of or related to this Agreement.

Section 15. Privacy. In compliance with federal and state regulations, ISA may
disclose nonpublic personal information to COMPANY for the purpose of assisting
a customer to obtain insurance products or services. Both Parties agree to use,
maintain, secure, store, disclose, and protect all nonpublic personal
information of policyholders and insured’s in accordance with laws and
regulations governing the privacy and security of such information. Both Parties
agree that COMPANY shall provide all policyholders with a copy of COMPANY’s
privacy policy.

Section 16. Indemnification and Hold Harmless. ISA shall indemnify COMPANY, its
successors and assigns, affiliates, directors, officers, employees and agents
and hold them harmless from all losses, claims, regulatory or administrative
penalties, threats of claims or litigation, costs, expenses, damages, and
attorney’s fees arising out of any act or omission of ISA, its officers, agents
(excluding Producers under this Agreement) or employees in fulfilling its
obligations under the Agreement or relating to the subject matter hereof.
Promptly upon receipt by COMPANY of notice of the commencement of any action or
of a threat of action, COMPANY shall, if a claim in respect thereof is to be
made against ISA under this Section, notify ISA in writing thereof. COMPANY
shall indemnify ISA, its successors and assigns, affiliates, directors,
officers, agents, Producers and employees and hold them harmless from all
losses, claims, threats of claims or litigation, costs, expenses, damages, and
attorney’s fees arising out of any act or omission of COMPANY, its officers,
agents, or employees in fulfilling its obligations under the Agreement or
relating to the subject matter hereof. Promptly upon receipt by ISA of notice of
the commencement of any action or of a threat of action, ISA shall, if a claim
in respect thereof is to be made against COMPANY under this Section, notify
COMPANY in writing thereof. The provisions regarding the indemnification of
Parties contained above shall survive termination of this Agreement.

Section 17. Termination. This Agreement may be terminated as follows:

(a)            At any time by the mutual written consent of the Parties, which
agreement shall state an agreed-upon effective date of termination;

(b)            At any time unilaterally, and without cause, by either Party,
provided that the party wishing to terminate gives at least 90 days’ written
notice to the other Party;

(c)            At any time unilaterally by either Party and to take effect
immediately, upon written notice to the other Party, in the event of: (i) either
Party filing a petition of bankruptcy or receivership, (ii) in the event of the
forfeiture of either Party’s corporate charter, or (iii) if the other Party
commits fraud, forgery, misrepresentation or is convicted of a felony; or
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(d)            At any time unilaterally (i) by ISA if COMPANY is in material
breach of the Agreement and such breach shall remain uncured for a period of
thirty (30) days after written notice thereof by ISA; or (ii) by COMPANY if ISA
is in material breach of this Agreement hereunder and such breach remains
uncured for a period of thirty (30) days after written notice thereof by
COMPANY.

Section 18. Obligations after Termination. Upon the effective date of
termination of this Agreement, both COMPANY and ISA, will continue their
obligations under this Agreement with regard to in-force insurance contracts
issued under this Agreement until their then current policy expiration subject
to the following conditions:

(a)            COMPANY reserves its right to non-renew any policies written
under this Agreement in accordance with applicable state law;

(b)            COMPANY reserves all of its rights to cancel any policies written
under this Agreement continued in-force for non-payment of premium or for other
statutorily allowed reasons; and

(c)            As ISA continues to be Agent of Record on and Producer remains on
the policy as servicing agent any policies written under this Agreement that are
in force or renewed after the termination of this Agreement, COMPANY will pay
commissions at the rate identified in the applicable Schedules. .

Section 19. Suspension. ISA may, at any time and at its sole discretion, choose
to exclude or suspend certain Producers by providing COMPANY with a written list
of those Producer’s names and instructions for their suspension or exclusion.
Upon receipt of such list, COMPANY shall within 10 business days stop accepting
any business submitted by an excluded Producer. ISA shall have the right to
designate another Producer as servicing agent for all business produced by
previous Producer. COMPANY must change servicing agent pursuant to ISA’s
instruction upon prior written notice by ISA to COMPANY any and all such
business designated by ISA.

Section 20. Amendment. This Agreement may be amended at any time by mutual
agreement of the Parties, as evidenced by a written amendment executed by their
duly authorized representatives, effective as of the date(s) specified herein.

Section 21. Notices. Any notice, payment, demand or communication required or
permitted to be given by any provision of this Agreement shall be deemed to have
been effectively given and received when delivered by certified mail
(return-receipt requested) or quicker means, with postage and charges prepaid
and addressed to the appropriate party at the address set forth below. A Party
may change its notice address by delivering a written change of address to the
other Parties in the manner set forth in this Section.
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If to ISA:
Ivantage Select Agency, Inc.
3100 Sanders Road
Northbrook, IL 60062
 
Attn: Mark Green, President
 
 
With a copy to:
Allstate Insurance Company
 
Corporate Law Department
 
2775 Sanders Road
 
Suite A2W
 
Northbrook, IL 60062
 
Attn: Steve Ihm, Vice President and Assistant General Counsel
 
 
If to COMPANY:
Federated National Underwriters, Inc.
 
14050 NW 14th Street, Suite 180
 
Sunrise, FL 33323
 
Attn: Gordon Jennings, President

Section 22. Interpretation. This Agreement constitutes the entire agreement
among the Parties and supersedes all prior oral or written negotiations among
the Parties with respect to the subject matter hereof. This Agreement shall be
construed in accordance with the laws of the State of Illinois without giving
effect to its choice of laws or conflict or law provisions.

Section 23. Assignment and Transfer. This Agreement may not be assigned or
transferred by any Party without the other Parties’ prior written consent, which
consent shall not be unreasonably withheld.

Section 24. Remedies.

(a)            The Parties hereby agree that binding arbitration shall be the
sole remedy for any and all dispute(s) arising between them with reference to
any transactions, terms, or conditions under this Agreement. Arbitration
proceedings brought hereunder shall be referred for final determination to the
majority decision of a board of three (3) disinterested arbitrators. Notice of
demand for arbitration shall be made, in writing, by the complaining Party to
the responding Party.

(b)            Each Party shall appoint an arbitrator within thirty (30) days of
being requested, in writing, by the other Party to do so. Within thirty (30)
days after their appointment, the two arbitrators so chosen shall select a third
arbitrator. The arbitrators shall be active or retired executive officers of a
property and casualty insurance company. If the two arbitrators do not agree as
to the selection of a third arbitrator within thirty (30) days after their
appointment, the third arbitrator shall be chosen pursuant to the rules for the
appointment of a neutral arbitrator by the American Arbitration Association or
any other mutually agreeable dispute resolution organization. If one of the
Parties fails to appoint its arbitrator within thirty (30) days of being
requested, in writing, by the other to do so, the latter shall appoint the
second arbitrator.

(c)            Within thirty (30) days after appointment of the third
arbitrator, each Party shall provide the other with its relevant books, records,
and/or papers not protected from disclosure by either the work-product or
attorney-client privilege. Other than the exchange of relevant documents, both
Parties shall refrain from engaging in any type of discovery including, but not
limited to, depositions and interrogatories.
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(d)            The Board shall be relieved from applying the strict rules of
evidence and/or procedure and shall make its decision with a view toward
affecting the Agreement in a reasonable manner, but shall be required to
strictly enforce all applicable statutes of limitations. The Board shall have no
authority to award punitive, multiplied or similar damages, nor make any award
of attorneys fees against either Party. The Board shall have no authority to
require a Party to put up pre-disposition collateral. Should either Party fail
to appear at an arbitration and/or fail to furnish the Board with any subpoenaed
papers or information, the Board is empowered to proceed ex parte. The majority
decision of the Board shall be final and binding upon the parties. Such decision
shall be reduced to a written award, signed by any two (2) of the three (3)
arbitrators, dated and delivered overnight to the Parties. In no case shall the
authority of the Board extend to awarding punitive or exemplary damages.
Judgment may be entered upon the award by any court having jurisdiction.

(e)            Each Party shall bear the expense of its own arbitrator but shall
equally share with the other the expense of the third arbitrator. The remaining
costs of the arbitration shall be allocated by the Board.

(f)            Since the Agreement entails interstate commerce, arbitration
proceedings brought hereunder, any or all provisions contained herein, and
arbitration awards entered pursuant to this clause are specifically governed by,
subject to, and enforceable under the Federal Arbitration Act (Title 9, United
States Code, Sections 1-14, as amended). No state arbitration acts shall apply.

(g)            Unless some other location is mutually agreeable to the Parties,
arbitration proceedings shall take place in Northbrook, Illinois and governed
under the Commercial Arbitration Rules and Mediation Procedures of the American
Arbitration Association. Arbitration shall commence within one hundred and
twenty (120) days after selection of the third arbitrator. The specific time and
site of arbitration shall be promptly determined by the Board after selection of
the third arbitrator with notice thereof to the Parties.

Section 25. Severability of Provisions. If any term or provision of this
Agreement is illegal or invalid for any reason, such illegality or invalidity
shall not affect the validity or enforceability of the remainder of this
Agreement. Further, the remainder of this Agreement shall be construed and
interpreted so as to give effect to the intentions of the Parties, including
those evidenced by that part held illegal or invalid to the extent allowed by
applicable law.

Section 26. Compliance. The Parties shall comply with relevant state and federal
statutes, regulations, and directives.

Section 27. Captions. The section captions herein are for identification only
and do not alter the substance of the sections or this Agreement as a whole.
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IN WITNESS WHEREOF, the Parties have executed this Agreement, in duplicate, by
their authorized representative as of the day and year hereinafter written.

FEDERATED NATIONAL
 
IVANTAGE SELECT AGENCY, INC.
UNDERWRITERS, INC.
 
 
 
 
 
 
 
 
By:
/s/ J. Gordon Jennings, III
 
By:
/s/ Mark Green
 
Title:
President
 
Title:
Ivantage President
 
Date:
2/5/13
 
Date:
 2/4/13

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EXHIBIT A

OBLIGATIONS OF COMPANY

(a)            Perform all functions relating to underwriting of the policies,
it being agreed that COMPANY will retain the full underwriting authority as to
the acceptance or rejection of any risk and the rating of any risk with respect
to any Policies issued pursuant to this Agreement; provided, however, that
COMPANY agrees to provide ISA at least thirty (30) days’ (or as required by
state law) advance notice of any significant underwriting or other changes to be
made to Coverage.

(b)            COMPANY shall provide ISA with 15 day advance notice in writing
of any change in capacity restrictions of the carriers authorized in the
Schedules appended to the agreement. If any part of the State of Florida is
subject to a threat of windstorm events, COMPANY will advise ISA as soon as
practicable of immediate temporary suspension to bind policies and ISA agrees to
immediately advise all Producers that a temporary suspension is in effect until
further notice that the weather event is no longer a threat.

(c)            Adjust, manage and settle all claims made in connection with the
policies issued pursuant to this Agreement. .

(d)            Perform appropriate premium audits of the policies issued
pursuant to this Agreement in accordance with terms of the policies and all
applicable laws and regulations.

(e)            COMPANY shall ensure that the amount of all premiums for any
policies written pursuant to this Agreement conform with the filed rates (or
consent to rate pursuant to Section 627.171 Florida Statutes). In no event shall
COMPANY charge or seek reimbursement from policyholders for any additional fees
relating to the COMPANY’s performance of this Agreement or the administration of
the policies written pursuant to this Agreement.

(f)            COMPANY shall develop an education/orientation program to be made
available to all Producers who shall place Coverage, which shall be first
approved in writing by ISA. Educational opportunities will remain available to
Producers throughout the term of this Agreement. Additional supplemental
reference materials shall be provided to Producers at ISA’s discretion.

(g)            COMPANY shall not distribute written program materials or
communications about the expanded market program pursuant to this Agreement
without prior review and approval in writing by ISA.

(h)            To aid ISA in measuring the success of the expanded market
program, COMPANY shall provide to ISA, as requested, within thirty (30) days
after the end of each calendar month, certain information including but not
limited to monthly and year-to-date: (i) written and earned premium, statewide
and by Producer, (ii) class of risk broken out by class code, (iii) incurred
loss reports, on a calendar and accident year basis, broken down by paid loss
and allocated expense, reserved loss and loss expense, and any such other
information and documentation as may be reasonably requested by ISA.
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(i)            * by the 10th business day of the month following the month in
which premiums are received by COMPANY, *. Any commission refunds owed COMPANY
shall survive the termination of the Agreement.

(j)            Provide to ISA agreed upon commission file by the 10th day of
every month following the month of which production commenced and provide to ISA
the agreed upon production and enrollment file by the 10th business day of every
month following the month of production.

(k)            COMPANY will, during the term of this Agreement, maintain at
COMPANY’s expense all appropriate insurance for itself and its employees, which
insurance at minimum shall conform with the requirements set forth in Exhibit C
attached here to the Agreement.

It is understood that COMPANY shall perform all of their duties and
responsibilities under the Agreement in a commercially reasonable manner and
that the failure to so perform such duties and responsibilities shall be deemed
a material breach of the Agreement
 

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*Portions of this document omitted pursuant to an application for an order for
confidential treatment pursuant to Rule 24b-2 under Exchange Act. Confidential
portions of this document have been filed separately with the Securities and
Exchange Commission.

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EXHIBIT B

OBLIGATIONS OF ISA

(a)            Direct producers to be licensed by applicable state(s) and direct
producers to adhere to the policies and procedures of COMPANY with respect to
this Agreement. ISA shall provide a copy of its license upon request by COMPANY.

(b)            ISA and Producers shall have no authority to:
 
(i)            change, omit, add or waive any question, statement or answer on
an application for coverage; or change, omit, add, waive, or discharge any
provision of a coverage;
 
(ii)           waive forfeitures, extend time for the payment of premium or a
policy fee, quote rates other than those given by COMPANY, or obligate or bind
COMPANY or the carrier that COMPANY represents in any way not specifically
authorized by this Agreement;

(iii)          authorize any claim settlement;

(iv)          waive or extend any policy obligation or condition;

(v)           incur any liability on behalf of COMPANY;

(vi)         represent that any product other than the Coverage has been placed
by COMPANY, or any entity affiliated with it;

(vii)        represent that any Coverage is different from what it is
represented to be by COMPANY; or

(viii)      represent that any Coverage is endorsed, sponsored or underwritten
by Allstate or any of its affiliates

(c)            ISA shall not be responsible for the processing or the payment of
any claims that arise on Coverage written pursuant to this Agreement. In the
event that ISA should receive any inquiries related to any claim matter, ISA
will immediately refer such inquiries to COMPANY or, as appropriate, the
licensed claims administrator for the carrier that represents COMPANY.

(d)            Provide such other assistance and cooperation to COMPANY as the
Parties may mutually agree.

(e)            Maintain in force and effect a valid and binding contract of
liability insurance with an insurer having A.M. Best rating of A- or higher in
the amount of at least $1,000,000 covering ISA, its agents, employees, and
representatives, from an insurance company approved by COMPANY for damages
occasioned by errors or omissions alleged to have been caused by ISA. Evidence
of such coverage to be submitted to COMPANY at their request.

(f)            ISA shall provide to COMPANY a list of Producers designated by
ISA to submit applications for Coverage pursuant to this Agreement promptly
following execution of this Agreement and shall update such list at its
discretion.

(g)            ISA shall use commercially reasonable efforts to resolve customer
service issues between COMPANY and individual Producers.
13

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EXHIBIT C

Standard Insurance Requirements

Company will, at its own expense, provide and keep in full force and effect
during the term of this Agreement the following kinds and minimum amounts of
insurance:

(a) Workers' Compensation.

Workers' compensation statutory coverage as required by the laws of the
jurisdiction in which the services are performed;

(b) Employers' Liability.

Employers' liability insurance with a limit of not less than $1,000,000 per
accident;

(c) Automobile Liability.

Commercial automobile liability insurance with a $1,000,000 per accident limit
for vehicles owned, leased, or rented by Company, while performing under this
Agreement;

(d) General Liability.

Commercial general liability insurance, including bodily injury, personal
injury, blanket contractual liability and property damage, with a $1,000,000 per
occurrence limit. Allstate shall be added as an additional insured on a primary
and non-contributory basis;

(e) Bond.

Commercial blanket fidelity bond with a minimum $100,000 each occurrence limit;

(f) Errors & Omissions.

Professional liability insurance covering the errors and omissions of Company's
personnel with a $5,000,000 per occurrence limit; and

(g) Umbrella Liability.

Umbrella liability insurance in the amount of $10,000,000 per occurrence.

Each insurance coverage listed above shall, at all times, be insured with an
insurance company that has (1) an A.M. Best Rating of A- or higher and (2) a
Financial Size Category (FSC) of Class VIII or higher, as such ratings and
categories are assigned by A.M. Best.

Within thirty (30) days of the effective date of this Agreement, and as
requested by ISA from time to time Company shall provide ISA with Certificates
of Insurance evidencing the insurance coverages listed above.
14

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EXHIBIT D

COMPANY SERVICE LEVEL OBJECTIVES

NORMAL BUSINESS OPERATIONS

Call center availability between Normal Business Hours: 8:30 a.m. to 5:00 p.m.
(Eastern Time) Monday through Friday for Producers and for other callers, except
for federal, public, or national holidays. A list of holidays will be posted on
the COMPANY’s Producer web site.

RIGHT TO CURE

It is understood and agreed that any assertion of violation of any Service Level
Objective must be conveyed to COMPANY in writing per the Notice provisions of
this Agreement. COMPANY shall have 60 days thereafter to investigate and cure
any violation without constituting a breach of this Agreement.

CALL CENTER RESPONSE

COMPANY will answer at least 98% of all calls during Normal Business Hours.

COMPANY shall agree to provide automated voice response system capabilities
24/7.

Of all the calls answered, 80% will be answered within 30 seconds.

All calls including voice mail messages will be responded to within 24 hours of
first contact during Normal Business Hours.

First call resolution rate will be no less than 75%.

POLICY PROCESSING

Upon the completion of all required underwriting materials, all transactions
will be posted in policy issuance system in an appropriate time frame as
follows:

New Business:                                      Within 24 hours

Cancellations:                                        Within 48 hours

Reinstatements:                                   Within 48 hours

Endorsements:                                      Within 48 hours
15

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CLAIMS PROCESSING

First Response
(non-catastrophe):                                                          24
hours

First Response
(catastrophe):                                                                      48
hours

COMPANY agrees to support ISA’s catastrophe management practices by providing,
for example, policyholder details by Producer, moratorium details, etc., within
24 hours of request.

PRODUCER WEB SITE

Normal Operations

Company will provide systems providing Producers with access to quoting and
self-service policy information will be available between the hours of 7:00 a.m.
and 12:00 a.m. (Eastern Time) at least 95% of the time, other than for Scheduled
Maintenance and Deployments as detailed below. Systems will include site
security through firewall protection, site system administration and
maintenance, and site network monitoring.

Scheduled Maintenance and Deployments

Company will notify Producers and ISA of scheduled maintenance and deployments
via the Company‘s Producer Web Site at least 24 hours prior to the scheduled
maintenance. The amount and nature of any system downtime will be detailed in
the Producer notification of scheduled maintenance.

Unscheduled Maintenance and Downtime

If systems are discovered to be unavailable during the hours of 7:00 a.m. to
12:00 a.m. (Eastern Time) for more than 15 minutes, Producers and ISA will be
notified via email or telephone of the issue and expected plans for resolution
and availability.

System Response Time

Company's systems will not exceed 30 seconds for routine quoting or for routine
information requests.

Producer Web Site service level metrics will be monitored weekly for the first
90 days and monthly for the subsequent 90 days following each product launch.

PRODUCER SATISFACTION SURVEY

COMPANY agrees to participate in a Producer Satisfaction Survey to be
administered by Ivantage. COMPANY agrees to strive for a minimum 85%
satisfaction rate. If Producer satisfaction rate is less than 85%, COMPANY
agrees to cooperate with ISA to ensure that subsequent survey’s achieve a
minimum of 85% satisfaction.
16

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REPORTING METRICS

COMPANY will provide the following data to ISA at the intervals indicated. All
files will be password protected and encrypted for security purposes.

1. Commission File (Monthly) COMPANY will provide to ISA a monthly commission
file for the prior month's business. The Excel file will include the following
information by Producer:

 
COLUMN HEADER
FIELD DESCRIPTION
Example
Reporting Month
Include on each line
00/00/0000
Allstate Agent Number
“A” plus 6 numeric or alpha numeric digits
A000000
 
A0A1234
Underwriting Carrier
 List name
Agent Name
Line of Business
Refer to “Line of Business Codes” under Production Report requirement
 
Transaction Type
New, Renewal, Endorsement, abbreviations acceptable
New, Ren, End
Insured First Name
 First
First
Insured Last Name
 Last
Last
Policy Number
 
 
Effective Date
 00/00/0000
 00/00/0000
Risk State
2 letter state abbreviation
IL
Total Premium Recorded For Month
Dollar amount, two decimals, no dollar symbol, comma acceptable
20000.00
Commission Rate
*
10%
Commission Amount
Dollar amount, two decimals, no dollar symbol, comma acceptable
20000.00

 

--------------------------------------------------------------------------------

* Portions of this document omitted pursuant to an application for an order for
confidential treatment pursuant to Rule 24b-2 under Exchange Act. Confidential
portions of this document have been filed separately with the Securities and
Exchange Commission.
17

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2. Agent Enrollment File (Monthly) COMPANY will provide to ISA a monthly agent
enrollment file in Excel to include all actively enrolled Producers. COMPANY
should use the monthly active agent list provided by ISA to identify terminated
Producers that should no longer be part of the program and identify those
Producers to ISA.

 
COLUMN HEADER
FIELD DESCRIPTION
Example
Allstate Agent Number
Allstate agent number, alpha character plus 6 numeric or alpha numeric digits
A000000
 
A0A1234
Date Agent Enrolled
Date Allstate agent enrolled
00/00/0000

3. Production Reporting (Monthly, by the 10th business day of the following
month)

COMPANY will provide to ISA a monthly production file as outlined below. If the
formatting or data is incorrect, COMPANY commits to a 48 hour turnaround for
corrections.

REQUIREMENTS

· There are two files that need to be sent:

§ Control File – used for quick data file validation

Ø Naming convention for this file should be:

CarrierName_yyyymm_CTL.csv

Ø Consists of one record containing two fields in comma delimited format.

Ø The first field contains the total number of records sent in the data file. No
commas in the number.

Ø The second field contains the total amount of written premium in the data
file. No $ or commas in the number.

18

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Example:

            12350,3456198.35                                        cr (carriage
return)

§ Data File – the actual policy records

Ø Naming convention for this file should be:

CarrierName_yyyymm.csv

Ø Submit one record for all policies active for the previous month in comma
delimited format. Do not send column headers as the first row. The entire file
should be data.

Ø Every policy number must be unique. No duplicates.

Ø The policy number must be the base number related to the policy. Any prefix or
suffix that modifies the base policy number should be broken down into the
policy prefix and policy suffix fields.

Ø Please note the required fields and the format we have requested for each
field as defined on Chart 1

Ø The Vendor GA – ID will be derived from a code assigned by ISA. Your GA ID
will be _0XX_. The Vendor Carrier – ID is the NAIC code assigned to each
carrier.

19

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Chart 1

Technical Requirements
 
Field Number
Field Name
Type(Text, Currency, Numeric, Date)
Format Expected to Receive Data (example: phone number could be (999)999-9999 or
999999999: Amount could be 1234.56 or $1,234.56
Required
 
* Check Field Definitions
Length of Field
1
Accounting Year/Month
Date
YYYYMM
X
6
2
Line of Business
Text
XXX (use leading zeros if necessary)
X
3
3
Policy Effective Date
Date
YYYYMMDD
X
8
4
Policy Expiration Date
Date
YYYYMMDD
X
8
5
Policy Inception Date
Date
YYYYMMDD
X
8
6
Policy Number
Text
 
X
30
7
Policy Prefix
Text
 
 
 
8
Policy Suffix
Text
 
 
 
9
Policy Term
Numeric
99
X
2
10
Business Name
Text
 
*
50
11
Insured First Name
Text
 
*
30
12
Insured Last Name
Text
 
*
30
13
Written Premium
Numeric
9999999.00
X
 
14
Allstate Agent Number
Text
a999999
X
7
15
Allstate Agent First Name
Text
 
*
30

20

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16
Allstate Agent Last Name
Text
 
*
30
17
Allstate Agency Name
Text
 
*
50
18
Agent State
Text
 
X
2
19
Insured Risk Address
Text
 
X
60
20
Insured Risk City
Text
 
X
30
21
Insured Risk State
Text
 
X
2
22
Insured Risk Zip
Text
 
X
10
23
Insured Mail Address
Text
 
X
60
24
Insured Mail City
Text
 
X
30
25
Insured Mail State
Text
XX
X
2
26
Insured Mail Zip
Text
999990000
X
10
27
Insured Mail Phone
Numeric
9998887777
 
10
28
Vendor GA - ID
Text
XXX (use leading zeros if necessary)
X
3
29
Vendor Carrier - ID
Numeric
99999
X
5
30
Cancellation Date
Date
YYYYMMDD
X
1 or 8

21

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Chart 2

Field Definitions
 
Field
Field Name
Description
Rules
1
Accounting Date
The year and month of the current inforce policies passed from the GA/Carrier to
Allstate
Accounting date should always be equal to or greater than the inception date.
 
 
 
Examples
 
Accounting date = 201103
Correct: Inception date = 20110301 or 20110101. Effective date = 20110301 or
20110501.
Incorrect: Inception date = 20110401. (Inception date is greater than Accounting
date - show on April submission)
 
2
Line of Business
The line of business on the policy.
Must be a valid business code. See tab LOB. Must be an approved LOB for state
and GA/Carrier per contract. It should never change for the same policy number
in the monthly submissions.
 
3
Policy Effective Date
The date coverage begins on the policy.
Changes upon renewal. Should not change prior to renewal. Can be equal to or
greater than inception date, but should never be prior.
 
 
 
Examples
 
Effective date = 20110101
Correct: Inception date = 20110101 or 20110315
Incorrect: Inception date = 20110501 (Effective date should be equal to or
greater than Inception date.)
 
4
Policy Expiration Date
The date policy expected to retire. End date of current policy.
 
The expiration date is typically one policy term in the future from the
effective date.
5
Policy Inception Date
The date the policy was created (written, processed, bound).
Should never change. Can be equal to or prior to effective date, but can never
come after. No policies with an inception date greater than the accounting date
should appear on monthly submission.
 
 
 
 
Examples
 
Inception date = 20110301
Correct: Effective date = 20110301, 20110315 or 20110501
Incorrect: Effective date = 20110215 (Inception date must be prior to or equal
to Effective date.)
Incorrect: Accounting date = 201102 (Policy should appear on 201103 submission.)
 

22

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6
Policy Number
The unique number assigned to the policy.
Should never change. Do not truncate. No duplicates. Strip off policy prefix
and/or suffix only if they are expected to change. Policy number must be unique;
any changes will result in error.
If the policy number contains leading or trailing zeros, do not truncate.
 
7
Policy Prefix
User defined policy prefix.
 
Optional
 
8
Policy Suffix
User defined policy suffix.
 
Optional
 
9
Policy Term
Length of policy coverage measured in months.
 
 
10
Business Name
Business name of insured.
Do not combine names - field should contain a single insured (first and last
name). Cannot be blank if insured first name or insured last name is blank.
 
 
 
 
Example
 
Correct: John Smith
Incorrect: John Smith a single man and Amy Brown a single woman
 
11
Insured First Name
First name of insured.
Cannot be blank if last name is filled in. Cannot be blank if business name is
blank.
 
12
Insured Last Name
Last name of insured.
Cannot be blank if first name is filled in. Cannot be blank if business name is
blank.
 
13
Written Premium
Written premium should not include fees.
 
Written premium cannot be 0 or negative.
 
14
Allstate Agent Number
The Allstate agent number consisting of seven characters.
Exclusive agents (IDs beginning with A0, A1), Employee agents (IDs beginning
with A6 in NY and WV only)
 
15
Allstate Agent Last Name
Allstate agent last name.
Cannot be blank if agent first name is filled in. Cannot be blank if agency name
is blank.
 

23

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16
Allstate Agent First Name
Allstate agent first name
Cannot be blank if agent last name is filled in. Cannot be blank if agency name
is blank.
 
17
Allstate Agency Name
Agency name of agent.
Cannot be blank if agent last and first name is blank.
 
18
Allstate Agent State
Agent resident license state.
 
Must be US state. Cannot be blank.
 
19
Insured Risk Address
Address of insured property.
 
Must be US address.
 
20
Insured Risk City
City of insured property.
 
Must be US city.
 
21
Insured Risk State
State of insured property.
 
Must be US State.
 
22
Insured Risk Zip
Zip code of insured property.
 
Must be US zip code. Do not truncate.
 
23
Insured Mail Address
Mail address for insured property.
 
Cannot be blank if foreign or US.
 
24
Insured Mail City
Mail city for insured property.
 
Cannot be blank if foreign or US.
 
25
Insured Mail State
Mail state for insured property.
 
Cannot be blank if US.
 
26
Insured Mail Zip
Mail zip for insured property.
 
Cannot be blank if US.
 
27
Insured Mail Phone
Area code + exchange + number of mail phone for insured.
 
Optional
 
28
Vendor GA ID
GA code - provided by Ivantage.
 
Mandatory - Please refer to Ivantage for your GA Code
 
29
Vendor Carrier ID
NAIC code of carrier.
 
Must be valid NAIC code. Must be an approved carrier. Should never change.
 
30
Cancellation Field
Date policy ceases to exist. (Cancelled, non-renewed).
Must contain a date or 0. Cannot be blank. No leading or trailing spaces.
 
When a policy cancels, expires or if it is a nonrenewal, please indicate the
date here.

24

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Chart 3

Line of Business Codes:
 
CODE
LINE OF BUSINESS
DEFINITION
 
001
Homeowners
HO3, HO5
 
002
Residential Fire
All DP forms
 
003
High Value
 
 
004
Earthquake
 
 
005
Wind
Wind Only Policies
 
006
Mexican Travel
 
 
007
Manufactured Home
 
Mobile Home
 
Factory built housing transported to site for permanent installation
008
Boats
Includes personal watercraft, boat and yacht
 
009
Excess Flood
 
 
010
CPL
Comprehensive Personal Liability
 
011
Motorhomes
Self Propelled vehicle equiped with living quarters (RV)
 
012
Condo
 
 
013
Renters
Tenant coverage, personal property only
 
014
Motorcycles
 

25

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015
LPP
Landlord Policy
 
016
SPP
Scheduled Property Policy - Valuable Articles Floater
 
017
Auto/ Classic Car
 
 
018
Personal Umbrella
Personal Umbrella Policy
 
019
Worker's Comp
 
 
020
Jewelry
 
 
021
Exc. CPL
Excess Comprehensive Personal Liability
 
022
Farm and Ranch
 
 
023
Excess Auto Liability
 
 
024
Workers Compensation
 
 
025
Commercial Auto
 
 
026
Commercial Property
 
 
027
Bonds
 
 
028
Commercial Umbrella
 
 
029
General Liability
Commercial General Liability

26

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SCHEDULE A

This Schedule is entered into this ___, day of ______, 201_, by and between
Federated National Underwriters (“Company”) and Ivantage Select Agency, Inc.,
(“ISA”) pursuant to Section 3, of that certain Insurance Agency Master Agreement
dated _______________, between Company and ISA (“Agreement”). This Schedule is
attached to and subject to the terms and conditions of that Agreement and
contains the following terms and conditions.

Coverage

ISA agrees to allow certain designated Producers to place Homeowners, Dwelling
Fire and Commercial General Liability coverage with Company. All policies
written pursuant to this Schedule shall be written by Federated National
Insurance Company (“Carrier”), unless agreed to otherwise in writing by ISA.

Commissions

*

Company shall pay commissions to Producers on a premiums received basis (net of
endorsements, cancellations, reinstatements, and any additional mandatory fees))
as follows:

8% of new business premium and 8% of renewal business premium on Homeowners
policies and Dwelling Fire for the first twenty-five (25) policies written
pursuant to this Agreement. Commissions shall be 10% of new business premium and
10% of renewal business premium thereafter once Producer meets the threshold of
twenty-five (25) on Homeowners and Dwelling Fire policies written pursuant to
this Agreement.

15% of new premium and 15% of renewal premium on Commercial General Liability
policies written pursuant to this Agreement.

Payments and any necessary adjustments will be made on the 10th business day of
each month for the preceding month’s business. *

Mandatory additional fees shall be defined as additional fees as authorized
under law, including but not limited to: $25 policy service fee, $2 Emergency
Management Preparedness And Assistance Trust Fund (state fee), Citizen 2005
Emergency Assessment (state fee), Florida Hurricane Catastrophe Fund Emergency
Assessment (state fee).
 

--------------------------------------------------------------------------------

* Portions of this document omitted pursuant to an application for an order for
confidential treatment pursuant to Rule 24b-2 under Exchange Act. Confidential
portions of this document have been filed separately with the Securities and
Exchange Commission.
27

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Territory

The state of Florida.
 
*
Termination

This Schedule may be terminated pursuant to the terms of Section 17 of the
Agreement. In addition, and without prejudice to the right of either Party to
invoke any applicable right of termination under said Section 17, Section 17 of
the Agreement is hereby amended to provide for the following additional
termination event: ISA, in its sole discretion, may immediately terminate this
Schedule upon a Carrier’s failure to maintain at least an “A” rating from
Demotech FSR.

Accepted by:

FEDERATED NATIONAL
 
IVANTAGE SELECT AGENCY, INC.
UNDERWRITERS, INC.
 
 
 
 
 
 
 
 
By:
/s/ J. Gordon Jennings, III
 
By:
/s/ Mark Green
 
 
 
 
 
Title:
President
 
Title:
Ivantage President
 
 
 
 
 
Date:
2/5/13
 
Date:
2/4/13

--------------------------------------------------------------------------------

* Portions of this document omitted pursuant to an application for an order for
confidential treatment pursuant to Rule 24b-2 under Exchange Act. Confidential
portions of this document have been filed separately with the Securities and
Exchange Commission.
 
28

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