Document:

Managing General Agency Agreement

 Exhibit 10.17 
 MANAGING GENERAL AGENCY AGREEMENT 
 This Agreement is entered into between American Physicians
Insurance Company, a Texas Insurance Company (hereinafter called “Company”) and American Physicians Insurance Agency, Inc., a Texas corporation (hereinafter called “Managing Agent”). The effective date of this Agreement is
April 1, 2007. 
 RECITALS 
 WHEREAS, the Company has been engaged in the business of insuring medical professional liability risks for physicians, surgeons and ancillary medical personnel since 1976; and 
 WHEREAS, the Company previously engaged in the insurance business as a reciprocal exchange; and 
 WHEREAS, all management and day-to day services for the Company were performed by a corporate attorney-in-fact from 1976 until the Company was
converted from a reciprocal exchange to a stock insurance company; and 
 WHEREAS, the Managing Agent has an existing Managing General
Agency Agreement with the Company; and 
 WHEREAS, the corporate attorney-in-fact for the Company was an entity that is affiliated
with Managing Agent; and 
 WHEREAS, the Company has recently converted to a stock insurance company and the parties desire to replace
both the existing Management Agreement with the attorney-in-fact and the existing Managing General Agency Agreement with this Agreement; and 
 WHEREAS, in order to provide continuity of business for the converted Company and its policyholders as well as maintaining responsibilities for performing insurance service functions, the Company believes it is desirable to appoint
the Managing Agent to continue to provide management and agency functions for the Company; and 
 WHEREAS, the Managing Agent desires
to continue to provide management, day-to day services such as marketing, appointment and supervision of agents, sales and distribution, underwriting, claims handling, risk management, policy administration, and other administrative services for the
Company; 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements made and given herein, and for other valuable
consideration, receipt of which is hereby acknowledged, the parties hereto mutually agree as follows: 
 SECTION 1: AGENCY APPOINTMENT AND
AUTHORITY 
 1.1. Appointment. The Company hereby appoints the Managing Agent as its exclusive Managing Agent to perform the
duties set forth herein. Managing Agent is vested with full authority to accomplish, effect and execute such duties upon the terms and conditions set forth below. 

 1.2. Acceptance of Appointment. The Managing Agent hereby accepts the above appointment and agrees
to perform its duties under this Agreement to the best of its ability, knowledge, skill and judgment, 
 1.3. Duties and Responsibilities
of the Managing Agent. The Managing Agent is authorized to perform the following activities for Company: 
 a.
Underwriting: Provide all underwriting services such as the development of the underwriting guidelines, evaluation of risk and issuance of binders, policies and endorsements of the Company (“Policies”). The Managing Agent will work
directly with the Medical Director of the Company and premium rates will be approved by the Company. The lines of insurance include medical professional liability insurance in Texas and other jurisdictions where the Company is licensed. The maximum
premium volume, limits of liability, exclusions, territorial limitations, policy cancellation provisions, and maximum policy period shall be part of underwriting that shall be approved by the Company after consultation with API Advisory, LLC.

 b. Marketing and Sales Material: Create marketing and sales promotional material relating to the business for the
Company. The Company shall have the right to review and approve, in writing, all consumer material relating to the Policies prior to the Managing Agent printing the material. The Managing Agent shall be responsible for all costs associated with
printing and distribution of consumer material. Managing Agent shall be responsible for the solicitation and evaluation of applications for coverage in compliance with underwriting guidelines acceptable to the Company. 
 c. Accounting and Reporting: Provide the required accounting and reporting services for the Company including annual reports to the
Texas Department of Insurance and other regulatory agencies. Managing Agent shall, not less than monthly, submit an account report to the Company which includes a statement of written, earned, and unearned premiums, loss and loss expenses paid and
outstanding, losses incurred but not reported and any management fees. The Managing Agent may satisfy its reporting requirement by confirming the insurer’s rending of such account received by or confirmed to the insurer not later than 60 days
from the close of the month for which business is reported. Managing Agent shall keep the account on file for at least five years and shall make the account available to the Commissioner of Insurance (the “Commissioner”) for review.
Managing Agent shall maintain records for each insurer for which it does business separately and maintain records for at least five years or until the completion of a financial examination by the insurance department of the state in which the
insurer is domiciled, whichever is longer. 
 d. Billings: Bill, collect and remit to the Company all premiums for
Policies issued under the terms of the Company’s financing arrangements. Managing Agent shall transmit return premiums, maintain the necessary records to support each transaction and regularly submit reports to the Company in accordance with
the accounting and records 

  

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guidelines specified by the Company. Managing Agent shall remit funds due to the Company not later than 30 days from the end of the month in which the
coverage is issued. 
 e. Commissions: Be entitled to retain out of premiums collected the commissions paid to Agents
by the Managing General Agent specified in Appendix I–Commissions. 
 f. Policy Cancellation: Cause cancellation
or non-renewal of Policies on any risk bound by the Managing Agent for nonpayment of premium or other causes as the Managing Agent may deem to be in the interests of the Company, or as directed by the Company in accordance which the laws of the
applicable jurisdiction. 
 g. Agents: Accept proposals of insurance from other agents, brokers or other solicitors.

 h. Select and Appoint Agents: Select and appoint all producing agents for Company. If applicable law requires agents
to be appointed by the Company, the Company agrees to extend its appointment to such agents for purposes of producing business for the Company. In addition, Managing Agent shall monitor and enforce full compliance of all agents with all laws,
regulations, rules and other legal requirements applicable to activities of agents. The Managing Agent agrees that it shall be responsible for ensuring compliance by agents. At the Company’s request, the Managing Agent will terminate any agent
appointed by the Company. 
 i. Special Services: Provide directly, or through appropriate representatives, special
services as may be required for or by individual risks. Subject to applicable laws, the Managing Agent may charge a fee for such services and the Company will be responsible for reimbursing the Managing Agent for such services. 
 j. Residual Market Assessments: Determine applicability to the business of the Company of any legally-mandated residual market or
other special assessment fund, including, but not limited to, state guaranty funds. If applicable, the Managing Agent shall determine premium surcharges, collect funds from the insureds, and regularly remit all such funds directly to the catastrophe
or other special assessment fund and shall send the Company a report detailing premium surcharge calculations and indicating amounts payable to the applicable state(s). 
 k. Credit Extensions: Be fully responsible for the amount of the premium due to the Company on risks or Policies written or bound
under this Agreement in which the Managing Agent has extended payment options, whether or not Managing Agent has collected the premium from the insureds or policyholders and/or their authorized representatives, unless non-payment of premium is the
result of any act or omission of the Company. 
 l. Governmental Contacts: Notify the Company as soon as reasonably
practicable, and in any event within ten (10) business days, in writing, of all contacts and correspondence received from insurance regulatory and other governmental authorities 

  

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by Managing Agent or agents directly or indirectly involving Company and forward promptly upon receipt all summonses, complaints, subpoenas or other court
documents and cooperate fully with Company in making any responses. 
 m. Claims Administration: Manage all aspects of
the insurance claims originating from Policies, perform all claims administration for the Company and regularly submit reports on claims administration to the Company. This authority shall include, without limitations: 
 (1) handling all submitted claims according to the requirements of any appropriate legislative and regulatory authority; accepting and
reviewing all submitted claims and loss reports; determining coverage for, administering, adjusting, settling, resisting or otherwise handling all submitted claims and losses in accordance with the authority granted by Company; administering,
adjusting, settling, resisting, or otherwise handling all submitted claims and losses in accordance with Company’s specific written instructions, as may be amended in writing from time to time; filing any reports, maintaining licenses and any
other authorizations necessary or required by law to carry out Managing Agent’s obligations and duties under this Agreement; establishing and maintaining claim and/or loss files for all submitted claims and losses, which shall be available at
no additional charge to Company or Company’s designee, for review or audit at reasonable intervals and with reasonable prior notice by Company or Company’s designated auditor. In the event of a dispute, Company shall have final authority
over disputes concerning claims settlement and setting of loss reserves. 
 (2) Managing Agent shall make available for review
with reasonable prior notice by Company all, financial, operational, historical and procedural records pertaining to claims; retain and store files for each claim in accordance with the period of time, location and format required by applicable law
and any File Retention and Destruction Policy set forth by the Company. If electronic claim files are used, the Managing Agent must submit transmissions on a weekly basis. 
 (3) Company and Managing Agent agree that Managing Agent shall have authority to make payments and settlements according to the terms of
this Agreement and without Company’s prior approval up to the limits set forth below. Managing Agent agrees to obtain approval of the President of the Company before making payments or settlements based on the lesser of (i) 1% of the
Company’s surplus as of December 31 of the last completed calendar year, or (ii) $250,000. 
 (4) Managing
Agent shall promptly report to the President of the Company any claim that involves a coverage dispute, a demand in excess of policy limits; or allegations of bad faith, violations of the Deceptive Trade Practices Act, or violations of the Insurance
Code, Chapter 541. 
  

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 n. Staff: Maintain a staff of competent and trained personnel, supplies and
equipment for the purpose of performing its duties under this Agreement and shall promote and safeguard the best interest of the Company and perform all acts reasonably necessary to insure the efficient and proper conduct of the services covered by
this Agreement. 
 o. Compliance: Use best efforts to observe and comply, and cause any designee(s) to observe and
comply, with all applicable laws and regulations relating to the services and insurance business covered by this Agreement. 
 p. Material Changes in Managing Agent. Managing Agent shall notify the Company in writing within 30 days if there is a change in ownership of 10% or more of the outstanding stock of the Managing Agent, any principal officer of the
Managing Agent, or any director of the Managing Agent. 
 SECTION 2: LIMITATIONS ON MANAGING AGENT AUTHORITY 
 2.1. Compliance with Underwriting Guidelines. The Managing Agent shall not accept proposals or bind the Company for insurance on risks not
included in the types of insurance specified on risks deemed unacceptable pursuant to the Company’s underwriting guidelines. 
 2.2.
Special Acceptance. If the Managing Agent believes a risk should be considered even though it is not a risk described in Section 2.1 above, the Managing Agent will submit such an application to the Company President or Medical
Director for approval. 
 2.3. Legal Proceedings. The Managing Agent shall not institute legal proceedings on behalf of the Company
except (a) for collection of premium, (b) litigation of insured claims or (c) as otherwise agreed in writing by the Company and the Managing Agent. 
 2.4. Reinsurance. The Company shall retain sole authorization for the placing of reinsurance on all business subject to this Agreement. The Managing Agent may not bind reinsurance or retrocession on behalf of
the Company and may not commit the Company to participation in insurance or reinsurance syndicates. Managing Agent shall not cede reinsurance on behalf of the insurer to a reinsurer that would not qualify for reinsurance credit under Article 5.75-1
of the Insurance Code and the rules promulgated thereunder. The Managing Agent shall comply with TEX. INS.CODE §40053.109 and regulations adopted thereunder. 
 SECTION 3: RESPONSIBILITIES OF MANAGING AGENT AND COMPANY 
 3.1. Licensing. Throughout the term of this Agreement the Managing Agent shall at its expense obtain, maintain and furnish evidence to the Company that the Managing Agent and all its agents have obtained and
maintained all the necessary licenses and permits from all regulatory agencies having jurisdiction over the Managing Agent and its agents relating to the business covered by this Agreement and shall notify the Company’s Compliance Officer
promptly of any license change, termination, suspension or cancellation. 
  

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 3.2. Administration. The Managing Agent shall maintain a staff of competent and trained personnel,
supplies and equipment for performing its duties under this Agreement. The Managing Agent shall use its best efforts to promote and safeguard the best interest of the Company, and to perform all acts necessary to insure the efficient and proper
conduct of the insurance business covered by this Agreement. 
 3.3. Record Keeping and Reporting. The Managing Agent shall keep and
maintain a record of each Policy issued for the Company and keep accurate books and records which shall, among other things, refer to each Policy issued and related premiums billed and collected, earned and unearned, pursuant to this Agreement.
Without limiting the provisions of Section 6.3, the Managing Agent shall make such books and records available to the Company, the Texas Department of Insurance and their respective authorized representatives for inspection and copying
at all reasonable times and will promptly forward copies of the same to the Company or the Texas Department of Insurance upon request. 
 3.4. Insurance Rules and Regulations. In the conduct of its duties hereunder the Managing Agent shall observe and comply, and shall cause its agents to observe and comply with all insurance regulatory laws and regulations relating to
the insurance business covered by this Agreement. The Managing Agent shall, at its own expense, provide statistical reporting information regarding the Company as required by applicable law or the Company. The Managing Agent shall provide all
information for the Company’s rate and form filings and all other information available to the Managing Agent as needed for applicable regulatory requirements. The Managing Agent agrees to submit to the authority and jurisdiction of the
Commissioner and the Texas Department of Insurance at any time in any regulatory investigations, actions, inquiries, examinations, directives or requests for information. 
 3.5. Policy Approvals. The Managing Agent shall provide to the Company such information, as available to the Managing Agent, that the Company reasonably requires in order to file for approval with any
applicable regulatory agencies of all Policy forms, rate schedules and other documents as may be required by regulatory authorities. 
 3.6.
Compliance. The Managing Agent shall observe and comply, and shall cause its agents to observe and comply, with all applicable requirements imposed by law regarding (a) cancellation, non-renewal and/or counter signature, (b) the
licensing and solicitation of insurance and (c) other applicable matters pertaining to the Company. 
 3.7. Expenses of Managing
Agent. The Managing Agent shall be responsible for its own expenses associated with the Managing Agent’s performance of its duties under this Agreement including the payment for advertising, promotion and marketing campaigns; salaries,
payroll taxes, benefits and travel for all employees and officers of Managing Agent; insurance applicable to Managing Agent; rents and utilities for offices; equipment rental and maintenance; printing, supplies, postage and telephone expenses;
legal, auditing and other professional fees applicable to Managing Agent; and taxes, licenses and fees applicable to Managing Agent. 
 3.8.
Expenses of Company. The Company shall be responsible for its own expenses associated with the Company’s performance of its duties under this Agreement. The Company shall be responsible and obligated for all losses and loss adjustment
expenses arising out of the 

  

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policies which the Managing Agent has settled and compromised for any loss; any judgments against the Company arising out of the Policies; any liabilities or
judgments against the Company or Managing Agent as a result of the Managing Agent acting in the course and scope of its authority and responsibilities to Company; payment for reinsurance contract and related expenses; commissions to agents appointed
by Managing Agent for solicitation of business; board, bureaus and association fees; surveys and underwriting reports; audit of assureds’ records including all costs of investigation or analysis conducted by independent parties with respect to
the insurance business of the Company; payment for salaries, payroll taxes, employee benefits, travel and related expenses of Medical Director and Executive Secretary; insurance applicable to Company and policyholder benefits; Director fees, travel
and related expenses; costs associated with the purchase of hardware, software and the installation of new technology including related depreciation and maintenance fees; all costs of printing and postage for policies, endorsements, claim forms and
legal notices; all audit, legal, actuarial and other professional fees and expenses; taxes, licenses and fees or charges levied or assessed by any governmental entity by virtue of premiums earned or for any other reason on the insurance business
conducted by the Company; third-party contract services; investment fees related to the purchase, sale and custody of investments; commissions to Managing Agent as defined in Appendix I to this Agreement and all other administrative expenses of the
Company not covered under this agreement by the Managing Agent. The Company shall reimburse the Managing Agent for expenditures by the Managing Agent that are the responsibility of the Company under this Agreement. 
 3.9. Assessments and Surcharges. The Managing Agent shall bill customers for, collect and transfer to the Company all applicable taxes, or
surcharges required to be levied on customers. The Company shall file all premium tax returns in the applicable jurisdictions and related to all business written by Company. The Managing Agent shall bill for, collect and pay directly to the
applicable agency, all premium surcharges assessed pursuant to any applicable law. 
 3.10. Examination. Company shall at is own
expense conduct an annual examination of Managing Agent for business done during the preceding year. An examination conducted under this paragraph shall comply with the requirements in 28 TEX. ADMIN. CODE §19.1204 (20). If Company’s
aggregate premium volume increases by 30% in any 30-day period, Company will cause to be conducted an examination within 90 days of Managing Agent. All examinations of Company must adequately provide the Commissioner with, at a minimum, information
on claims procedures, timeliness of claims payments (lag time), timeliness of premium reporting and collection, compliance with underwriting guidelines, and reconciliation of policy inventory. Examinations must be made available to the Commissioner
for review and remain on file with Company for at least three years. 
 3.11. Licensing. Throughout the term of this Agreement, the
Company shall use commercially reasonable efforts to obtain, maintain and furnish evidence thereof to the Managing Agent of all necessary licenses and permits from applicable regulatory agencies necessary for the Company to conduct business as an
admitted insurance carrier in Texas and any subsequently specified target states mutually agreeable to the Company and the Managing Agent. 
  

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 3.12. Compliance. In the conduct of its duties under this Agreement, the Company shall observe and
comply with all applicable laws and regulations relating to the insurance business covered by this Agreement. 
 3.13. Licensing
Assistance. The Company shall assist the Managing Agent and its agents to obtain and maintain licenses as required by applicable laws and regulations. The Company shall appoint the Managing Agent, and/or other agents in order to allow marketing
and administration of products for the Company in compliance with the laws and regulations of all applicable jurisdictions. Any such appointment may, at the discretion of the Company, terminate upon termination of this Agreement. 
 3.14. Outline of Responsibilities. Set forth on Appendix II to this Agreement is an outline of the costs and expenses to be borne by each of the
Managing Agent and the Company related to the operations of the Company. The parties agree that Appendix II reflects the intentions of the parties and this Agreement is intended to be construed and enforced consistently therewith. 
 SECTION 4: FUNDS HELD BY MANAGING AGENT 
 The Managing Agent shall promptly bill and collect all insurance premiums for Policies. All funds collected or received by the Managing Agent for, or on behalf of, the Company shall be held in a fiduciary capacity in accordance with
applicable laws and regulations by the Managing Agent in a separate bank account or accounts clearly identifiable by name for funds so held or in accounts in the Company’s name. Such funds shall be deposited by the Managing Agent within 24
hours of receipt in a designated interest bearing premium account in a bank that is a member of the Federal Reserve System. The Managing Agent shall not co-mingle funds of the Company with any other accounts of the Managing Agent. The Managing Agent
shall make no deductions from the premium account for its own account unless authorized in writing by the Company, except fees payable to the Managing Agent as authorized in this Agreement. Reports and funds transfers to the Company shall be made in
compliance with accounting and records requirements established by Company. 
 SECTION 5: COMMISSIONS; BOARD COMPENSATION 

5.1. Commissions. The Managing Agent shall be entitled to commissions on all business produced under this Agreement at the rates specified in
Appendix I–Commissions. The Managing Agent shall refund to the Company commissions on return premiums and cancellations at the same rate and under the same payment terms as such commissions were initially deducted by the Managing Agent.

 5.2. Board Compensation Restrictions. The Managing Agent and the Company agree that no employee of the Managing Agent, American
Physicians Service Group, Inc. (“APSG”) or any of the direct or indirect subsidiaries of APSG will be paid any board fees, advisory fees or other forms of compensation from the Company for service on the Board of Directors or Advisory
Board of Directors of the Company. 
  

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 SECTION 6: RECORDS AND AUDIT 
 6.1. Audits. The Company has the right, upon at least 72 hours written notice and during normal business hours to inspect and audit the records of
the Managing Agent. The Managing Agent agrees to cooperate with the Company in conducting such inspections and audits. Such right shall survive the term of the Agreement for the greater of 24 months or until such time as all disputes are resolved as
to amounts owed. 
 6.2. Mutual Assistance. Each party shall assist the other party in responding to any regulatory requirements,
audits or other inquiries. 
 6.3. Records Ownership and Related Licenses. The Managing Agent and the Company agree that any records,
data and files, whether in hard copy form, electronic form or otherwise, that are created by the Managing Agent or come into the possession of the Managing Agent, and which relate to the business or operations of the Company will be deemed to be
co-owned by the Managing Agent and the Company. The Company shall be entitled to unrestricted access to such co-owned records, data and files without any requirement to account to the Managing Agent or seek any consent or approval of the Managing
Agent with respect thereto. To the extent any software, program, hardware or other processing system (collectively, “Processing Systems”) owned or licensed by the Managing Agent or the Company is necessary to access, work with or otherwise
utilize any such records, data or files, each party hereby grants a nonexclusive, irrevocable, perpetual, royalty-free license to the other party for the use of such Processing Systems. 
 SECTION 7: INDEMNIFICATION 
 7.1. Company to Indemnify. The Company shall
indemnify and hold harmless the Managing Agent from all claims, loss, damage, liability, judgments or settlements including reasonable costs, expenses, and attorneys’ fees, arising out of the relationships of the parties under this Agreement
and caused by the Company’s failure to comply with the terms of this Agreement, or Company’s bad faith, willful misfeasance or gross negligence. The Company shall be liable for and shall pay or reimburse the Managing Agent (within 30 days
for any payment made by the Managing Agent) for all expenses or damages suffered by the Managing Agent as a result of the Company’s alleged failure to comply with any applicable insurance regulatory laws. 
 7.2. Managing Agent to Indemnify. The Managing Agent shall indemnify and hold harmless the Company from all claims, loss, damage, liability,
judgments or settlements, including reasonable costs, expenses, and attorneys’ fees arising out of the relationships of the parties under this Agreement and caused by the Managing Agent’s failure to comply with the terms of this Agreement
or Managing Agent’s bad faith, willful misfeasance or gross negligence. The Managing Agent shall be liable for and shall pay or reimburse the Company (within 30 days for any payment made by the Company) for all expenses or damages suffered by
the Company as a result of the Managing Agent’s or any of its agents’ alleged failure to comply with any applicable insurance regulatory laws. 
  

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 SECTION 8: SUSPENSION OF AUTHORITY 
 8.1. Notice of Suspension. The Company may suspend the authority of the Managing Agent to bind the Company only for the reasons and in accordance
with the procedures described below. The Company shall give immediate written notice of the suspension of authority and the Managing Agent shall then immediately cease to exercise its authority until the reason for the suspension is resolved. Once
resolved, the Company shall immediately reinstate the authority of the Managing Agent. Notwithstanding any action taken pursuant to this Section, the parties may exercise whatever rights they may have to terminate this Agreement. 
 8.2. Authority to Suspend. The Company may suspend Managing Agent’s authority if the Company is prohibited from writing insurance. In such
event, the suspension shall remain in effect until the prohibition has been lifted. The suspension shall only apply to the jurisdiction in which the Company is unable to continue writing business. The Company may suspend the authority of the
Managing Agent during the pendency of any dispute regarding any event of default under this Agreement. 
 8.3. Loss of License. The
Company may suspend Managing Agent’s authority if a regulatory authority cancels, suspends or declines to renew the Managing Agent’s license or certificate of authority. In such event, the suspension shall remain in effect until the
Managing Agent provides the Company with evidence that a license or certificate of authority has been granted or reinstated by the regulatory authority. 
 8.4. Administration Allegations. The Company may suspend Managing Agent’s authority if an administrative allegation of violation of insurance law or regulation is made against the Managing Agent or any of
the Managing Agent’s executive officers by an insurance regulatory agency. 
 8.5. Criminal Offense. The Company may suspend
Managing Agent’s authority if the Managing Agent or any of the Managing Agent’s executive officers is indicted for a criminal offense, the conviction of which would permit termination of Managing Agent under this Agreement. 
 SECTION 9: TERMINATION 
 9.1. Basis
For Termination. 
 a. This Agreement may be terminated at any time upon the mutual written agreement of the Company and
the Managing Agent. 
 b. This Agreement may be terminated at any time by either party by written notice if the other party
commits any act of bankruptcy, becomes insolvent or assigns all or part of its assets for the benefit of creditors upon or after the filing of a petition for bankruptcy, whether voluntary or involuntary. 
 c. This Agreement may be terminated at any time by either party by written notice if the other party materially breaches this Agreement
and provided the party seeking to terminate this Agreement has given the other party thirty (30) days prior 

  

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written notice of the nature of the claimed breach and its intent to terminate if the claimed breach is not cured to the satisfaction of the breached party
within such thirty (30) days period. 
 d. This Agreement may be terminated immediately by the Company due to
misappropriation of funds or property of the Company or funds received for it by the Managing Agent or the failure of the Managing Agent to remit to the Company the funds due promptly on demand. 
 e. This Agreement may be terminated immediately by the Managing Agent due to misappropriation of funds or property of the Managing Agent
or funds received for it by the Company or the failure of the Company to remit to the Managing Agent the funds due promptly on demand. 
 SECTION 10: GENERAL PROVISIONS 
 10.1. Confidentiality. Each party shall treat as confidential any and all
information received from the other party pursuant to this Agreement, and shall not disclose any such information to any third party without the prior written consent of the other party. Each party shall not disclose directly or indirectly to any
third party any term or provision of this Agreement without the prior written consent of the other party. These obligations of confidentiality shall survive termination of this Agreement. 
 10.2. Entire Agreement. This Agreement, and the Appendices attached hereto and incorporated herein, constitute the entire Agreement of the parties
relative to the subject matter hereof, and supersede and cancel any and all other prior agreements or understanding of the parties related to the subject matter of this Agreement. 
 10.3. Amendment. This Agreement may not be amended, modified or altered in any manner except in writing and executed by all parties hereto and
shall specify the effective date of the amendment. 
 10.4. Severability. In the event any provision of this Agreement shall be held
invalid or unenforceable, such provision shall be deemed modified, restricted or removed to the extent necessary to render the remaining provisions of this Agreement binding and effective. 
 10.5. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Texas, and all disputes, that may
arise under this Agreement shall be submitted to the state or federal courts sitting in Travis County, Texas, which courts shall have jurisdiction and venue over matters arising under this Agreement. 
 10.6. Assignment. Except as specifically contemplated herein, this Agreement, and all rights, duties and obligations hereunder, may not be
assigned by any party without the prior written consent of the other party. 
 10.7. Binding Effect. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective administrators, representatives, successors and permitted assigns. 
  

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 10.8. Waivers. The failure of a party to enforce any provision of this Agreement shall not
constitute a future waiver of such provision or any other provision hereof. 
 10.9. Authorization. Each party represents that it has
full authority and authorization to enter into this Agreement and no additional or further permissions, consents or authorizations are required to bind the parties hereto. 
 10.10. Interpretation. If any provision of this Agreement is deemed to be in contravention of any statute, regulation or legal requirement, such
provision or portion thereof, shall be interpreted to conform to such statute, regulation or legal requirement, without further action by the parties. 
 10.11. Dispute Resolution. The parties shall use their best efforts to negotiate in good faith the resolution of any dispute that may arise relating to this Agreement. In the event the parties are unable to
resolve such dispute, either party shall have the right to cause the dispute to be submitted to binding arbitration pursuant to the rules and regulations of the American Arbitration Association relating to commercial disputes. Any determination
pursuant to such arbitration shall be entitled to enforcement by a court of competent jurisdiction. Such arbitration decision may include an award of attorney’s fees and costs actually incurred in such arbitration and any enforcement of such
arbitration. 
 10.12. Notices. Any notice permitted or required under this Agreement shall be in writing and shall be deemed to have
been duly given by personal delivery upon such delivery, upon receipt of telecopy or facsimile with proof of transmission, on the first business day following delivery by overnight courier, or on the second business day following deposit in the
United States Mail, certified or registered, return receipt requested, postage prepaid and addressed to: the attention of chief executive officer of the parties being given notice at the principal executive office of such party. 
 10.13. Rights of Offset. The Managing Agent shall have no right to offset balances due Company under this contract with any amount due under any
other contract between the Managing Agent and Company. 
 [signature page follows] 
  

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 IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the date first
written above. 
 AMERICAN PHYSICIANS INSURANCE COMPANY, a Texas insurance corporation 
  

					
	By:	 	 /s/ Marc J. Zimmermann
	 	
	Printed Name: Marc J. Zimmermann	 	
	Title:	 	SVP, Secretary and CFO	 	

 AMERICAN PHYSICIANS INSURANCE AGENCY, INC., a Texas corporation 
  

					
	By:	 	 /s/ W.H. Hayes
	 	
	Printed Name: W.H. Hayes	 	
	Title:	 	Secretary	 	

 Signature Page to Managing General Agency Agreement 

 APPENDIX I 
 COMMISSIONS 
 This Appendix is attached to and made a part of the Managing General Agency Agreement
dated April 1, 2007, (the “Agreement”) among American Physicians Insurance Company (“Company”) and American Physicians Insurance Agency, Inc. (“Managing Agent”), and is effective as to all policies having effective
dates on or after the effective date of the Agreement. 
 Commissions to Managing Agent. The Managing Agent shall be entitled to, and
shall be paid, as and for all services under this Agreement including but not limited to marketing, underwriting, claims administration, accounting, reporting and other services performed as specified in the Agreement, commissions equal to 13.5% of
premium earned before reinsurance on a monthly basis resulting from business written pursuant to and in connection with the Agreement. 
 Commissions Paid to Agents by Managing Agent. Managing Agent shall be entitled to reimbursement from Company for any commissions paid to licensed agents, brokers, or other soliciting agents. 
 Costs Associated with the Purchase of Hardware, Software and Installation. Managing Agent will be entitled to reimbursement for any costs
associated with the purchase of hardware, software and the installation of technology on behalf of the Company for use by the Company in the conduct of its business. 
 In Witness Whereof, the parties to the Agreement have executed this Appendix I to be effective on the effective date of the Agreement. 
 AMERICAN PHYSICIANS INSURANCE COMPANY, a Texas insurance corporation 
  

			
	By:	 	 /s/ Marc J. Zimmermann

	Printed Name: Marc J. Zimmermann
	Title:	 	SVP, Secretary and CFO

 AMERICAN PHYSICIANS INSURANCE AGENCY, INC., a Texas corporation 
  

			
	By:	 	 /s/ W.H. Hayes

	Printed Name: W.H. Hayes
	Title:	 	Secretary

 APPENDIX II 
 to 
 Managing General Agency Agreement 
 This Appendix is attached to and made a part of the Managing General Agency Agreement between American Physicians Insurance Company (“Company”) and American
Physicians Insurance Agency, Inc. (“Managing Agent”), and is effective as to all policies having effective dates on or after the effective date of the Agreement. 
  

			
	 Company Expenses
	  	 Managing Agent Expenses

		
	Losses (Indemnity)	  	N/A
		
	Loss Adjustment Expenses	  	N/A
		
	Reinsurance contract and related expenses	  	N/A
		
	Commissions to Agents	  	Per Appendix I, Managing Agent shall be entitled to reimbursement from Company for any commission paid to licensed agents, brokers, or other soliciting agents
		
	N/A	  	Advertising
		
	Board, Bureaus and Associations Fees (Company Only)	  	Dues and subscriptions (All Other)
		
	Surveys and Underwriting Reports (Policy Issue related expenses including rate studies)	  	N/A
		
	Audit of Assureds’ Records	  	N/A
		
	Salaries, Payroll Taxes and Employee Benefits (Medical Director & Board Secretary Only)	  	Salaries, Payroll Taxes and Employee Benefits (All Others – Managing Agent Employees)
		
	Insurance applicable to Company & Policyholder Accidental Death & Disability Coverage	  	Insurance applicable to Managing Agent
		
	Board Fees	  	N/A
		
	Travel & Travel Items (Directors & Board Secretary Only)	  	Travel & Travel Items (All Other – Managing Agent Employees)
		
	N/A	  	Rent & Utilities
		
	N/A	  	Equipment – Rental & Maintenance (Copiers and other non-EDP)
		
	Costs associated with the purchase of hardware, software and installation of new technology (EDP Equipment)	  	N/A
		
	Cost of Depreciation of EDP equipment, software, and maintenance	  	N/A
		
	Printing & Supplies (Policies & Claims Forms, Legal Notices and Annual Reports)	  	Printing & Supplies (All Other)
		
	Postage (Policies & Claims Forms, Legal Notices, and Annual Reports Only)	  	Postage (All Other)

			
	Telephone (Directors & Board Secretary Reimbursements Only)	  	Telephone (All Other – Managing Agent Employees)
		
	Legal, Auditing, & Other Professional Fees, i.e. Actuarial Fees (Company Only)	  	Legal, Auditing & Other Professional Fees (Managing Agent Only)
		
	State & Local Taxes (Company Only)	  	State & Local Taxes – (Managing Agent Only)
		
	Franchise Taxes (Company Only)	  	Franchise Taxes (Managing Agent Only
		
	All Other Taxes (Company Only)	  	All Other Taxes (Managing Agent Only)
		
	Insurance Department Fees (Company Only)	  	Insurance Department Fees (Managing Agent Only)
		
	Gross Guaranty Association Assessments	  	N/A
		
	Contracting Services (Director approved)	  	Contracting Services (All Other)
		
	Investment Fees (Related to the Purchase, Sale & Custody of Investments)	  	N/A
		
	Miscellaneous Expenses (Company Only)	  	Miscellaneous Expenses (All Other)
		
	Per Appendix I, Commissions (“Management Fee”) to Managing Agent for all services under this Agreement including but not limited to, marketing, underwriting, claims administration,
accounting, reporting and other services, will equal 13.5% of premium earned before reinsurance on a monthly basis resulting from business written pursuant to and in connection with the Agreement.	  	N/AAdvisory Services Agreement

 Exhibit 10.18 
 ADVISORY SERVICES AGREEMENT 
 This ADVISORY SERVICES AGREEMENT (hereinafter referred to as this
“Agreement”), dated and effective as of April 1, 2007, is made by and between API Advisory, LLC, a Texas limited liability company (hereinafter referred to as the “Advisor”) and American Physicians
Insurance Company, a Texas insurance company (hereinafter referred to as “Insurer”). 
 RECITALS 
 WHEREAS, the Advisor is able and qualified to provide advisory and consulting services to Insurer as are set forth in this Agreement; and 
 WHEREAS, Insurer desires to contractually engage the Advisor to provide advisory and consulting services in connection with its operations, as more particularly
specified hereinafter in this Agreement; and 
 WHEREAS, the Advisor desires to perform such advisory and consulting services for Insurer in accordance with
the terms and conditions of this Agreement. 
 NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and agreements hereinafter set
forth, the parties hereto agree as follows: 
 ARTICLE I 
 ADVISORY SERVICES 
 1.1 ENGAGEMENT OF ADVISOR. Insurer hereby engages the Advisor to provide, with respect to
Insurer and its operations, the advisory and consulting services hereinafter specified, and the Advisor hereby accepts such engagement upon the terms and conditions set forth herein and agrees to provide such advisory and consulting services in
accordance herewith. 

 1.2 ADVISORY SERVICES. The Advisor shall provide the following advisory and consulting services to the Insurer as
set forth in Article II below, subject, however, to the following: 
  

	 	(a)	The Advisor shall perform its responsibilities, duties, and functions in a manner consistent with the policies established by the Articles of Incorporation of Insurer, the Bylaws of
Insurer and the Board of Directors of the Insurer (“Board”). 

  

	 	(b)	Nothing in this Agreement shall be construed to be a delegation from Insurer to the Advisor of any power or authority required by any applicable statute or regulation to be
exercised directly by Insurer. 

  

	 	(c)	It is agreed and understood by and between the parties hereto that the Advisor is associated with Insurer, for purposes of this Agreement, only for the purposes and to the extent
set forth herein, and that the relationship of the Advisor to Insurer with respect to its duties, functions, and responsibilities under this Agreement shall, during the term hereof, be that of an independent contractor. This Agreement shall not be
construed as an agreement of employment, a partnership, or any other form of business entity, or as creating any other type of relationship than the contractual relationship expressly specified herein. 

 ARTICLE II 
 DUTIES, AUTHORITIES, AND
FUNCTIONS OF THE ADVISOR 
 2.1 ADVISORY BOARD MEMBERS. The Insurer shall have an Advisory Board of Directors (“Advisory Board”),
which Advisory Board shall meet concurrently with the Board and have full access to information as provided to the Board (excluding Board deliberations 

  

 2 

 
related to this Agreement). The Advisory Board shall provide advice and counsel to the Board on matters coming before the Board or otherwise specifically
requested by the Board. The Board and Advisory Board will meet not less than three (3) times per year. At least one Board meeting per year will be held away from the principal offices of Insurer and last up to three (3) days, and the
Advisory Board will meet concurrently at these meetings also, subject to reimbursement of expenses associated therewith by Insurer pursuant to Section 3.2. 
  

	 	(a)	The Advisor shall provide persons to serve on the Advisory Board. The Advisor shall determine, subject to the terms of this Agreement, the number of persons, not to exceed nine
(9) persons, who shall to serve on the Advisory Board. The Advisory Board shall have the right and opportunity to participate in Board discussions, but in no event shall the Advisory Board members have any right to vote on matters brought
before the Board for a vote. The Advisor shall retain the sole right to remove or appoint substitute persons to serve as members of the Advisory Board as it deems necessary to fulfill its obligations under this Agreement. 

 

	 	(b)	Insurer’s sole shareholder may, at its sole election, but is not required to, appoint one or more Advisory Board members to serve as a member of the Board, in which event such
person shall have the rights and obligations of a member of the Board. Furthermore, upon such an appointment, the number of persons the Advisor shall provide to serve on the Advisory Board pursuant to this Section 2.1 shall be reduced by the
number of representatives of Advisor who are then serving as a member of the Board. Furthermore, no person shall serve or be compensated as both a member of the Board and as a member of the Advisory Board at the same time. 

 

 3 

	 	(c)	The members of the Advisory Board (and any member of the Advisory Board appointed to the Board by the Insurer) provided by the Advisor shall be compensated directly by the Insurer
for their service as a member of the Advisory Board. The compensation paid to such Advisory Directors shall initially be $2500 per meeting per day (or $1250 for meetings lasting one-half a day) or $250 per hour for meetings attended by telephone.
The per meeting compensation is (i) payable for actual attendance at Advisory Board meetings held concurrently with the Board only and (ii) also applicable for attendance at duly called committee meetings pursuant to Section 2.2. The
Advisor may increase the per meeting compensation annually by giving sixty (60) days written notice to Insurer, but in no event shall any such increase exceed the Annual Increase Cap. The “Annual Increase Cap” means an amount
equal to the lesser of (x) 10% of the amount paid for the applicable service in the prior year or (y) the percentage increase in the CPI during the prior year. The “CPI” as used herein shall mean the Consumer Price Index
for All Urban Consumers, U.S. City Average (All Items; Base Year 1982 = 100) published by the United States Department of Labor, Bureau of Labor Statistics for the immediately preceding year. 

 2.2 COMMITTEE MEMBERS. The Advisor shall further be obligated to provide persons to serve on certain committees of the Insurer, which persons shall be selected by
Advisor from among those persons provided by Advisor to serve on the Advisory Board. A person may serve on both the Advisory Board and one or more committees. The committees will meet at such 

  

 4 

 
times as shall be determined by Insurer; provided, the Claims Committee will meet at least once per month, unless otherwise agreed by the parties, the
Physician Liaison Committee will meet when and only if the Claims Committee meets, and the other committees (excluding the Political Affairs Committee, which meets as needed only) will meet at least once per quarter. The committees of the Insurer
and the maximum number of persons to be provided by the Advisor for such committees are as follows: 
  

			
	Claims Committee	  	up to 9 persons;
		
	Finance Committee	  	up to 4 persons;
		
	Ethics and Internal Affairs Committee	  	up to 4 persons;
		
	Underwriting Committee	  	up to 4 persons;
		
	Physician Liaison Committee	  	up to 9 persons; and
		
	Political Affairs Committee	  	1 person.

 2.3 MEDICAL DIRECTOR. The Advisor shall retain, compensate and provide to Insurer a person fully qualified
to serve as the Medical Director of Insurer. The Advisor shall retain the sole right to remove or appoint substitute persons to serve as the Medical Director as the Advisor, in its sole discretion, deems necessary to fulfill its obligations under
this Agreement. Notwithstanding the foregoing, the Medical Director shall be subject to the operational authority of the chief executive officer of Insurer and the Board. Insurer shall reimburse Advisor for all costs of compensation and reasonable
benefits incurred by Advisor in connection with the provision of the Medical Director. The parties acknowledge and agree that (i) the aggregate reimbursement due for compensation (excluding insurance and retirement benefits) under this Section
for the first year of this Agreement is $185,000, and (ii) the maximum increase for each subsequent year shall not exceed the Annual Increase Cap. Reasonable benefits include 

  

 5 

 
reasonable vacation and sick leave (included in the compensation amounts described in the preceding sentence), reasonable health, dental, life and long-term
disability insurance and a 401K plan. The Medical Director shall not be entitled to any further compensation under Section 2.1 for attendance at Advisory Board or committee meetings. 
 2.4 EXECUTIVE SECRETARY. The Advisor shall retain, compensate and provide to Insurer a person fully qualified to serve as the Executive Secretary of Insurer. The
Advisor shall retain the sole right to remove or appoint substitute persons to serve as the Executive Secretary as the Advisor, in its sole discretion, deems necessary to fulfill its obligations under this Agreement. Notwithstanding the foregoing,
the Executive Secretary shall be subject to the operational authority of the chief executive officer of Insurer and the Board. Insurer shall reimburse Advisor for all costs of compensation and reasonable benefits incurred by Advisor in connection
with the provision of the Executive Secretary. The parties acknowledge and agree that (i) the aggregate reimbursement due for compensation (excluding insurance and retirement benefits) under this Section for the first year of this Agreement
is $62,500, and (ii) the maximum increase for each subsequent year shall not exceed the Annual Increase Cap. Reasonable benefits include reasonable vacation and sick leave (included in the compensation amounts described in the preceding
sentence), reasonable health, dental, life and long-term disability insurance and a 401K plan. The Executive Secretary shall not be entitled to any further compensation under Section 2.1 for attendance at Advisory Board or committee meetings.

 2.5 LIMITS TO ADVISOR AUTHORITY. The Advisor agrees that it shall neither have authority to, nor shall it make, invest, or obligate, or commit to
make, invest, or obligate on behalf of Insurer any capital expenditure, investment, indebtedness, obligation, cost, or expense except for those reimbursement and compensation obligations of Insurer specifically provided for herein. 
  

 6 

 ARTICLE III 
 FEES AND EXPENSES 
 3.1 PAYMENT OF ADVISORY FEES. Insurer shall pay to Advisor all fees, expenses and other
amounts owed to Advisor pursuant to the terms of this Agreement within thirty (30) days after the date of Advisor’s invoice. All amounts payable by Insurer hereunder shall be paid in United States dollars at Insurer’s address for
notice or at such other address as may be specified by Insurer from time to time, without any setoff or deduction. Insurer agrees to pay interest at the rate of one and one-half percent (1.5%) per month, or the maximum legal rate allowed by
law, whichever is less, on any outstanding balance due to Advisor for such time as the outstanding balance remains past due. 
 3.2 ADMINISTRATIVE
EXPENSES. Insurer shall bear responsibility for reimbursement of all reasonable out-of-pocket costs and expenses incurred by Advisor in the performance of its obligations under this Agreement, including, without limitation, all reasonable costs
incurred by the Advisor for the travel and lodging of the Advisory Board members incurred in connection with the performance of Advisor’s duties under this Agreement. 
 3.3 ADVANCEMENT OF FEES AND EXPENSES. Without limiting the Advisor’s right to reimbursement of any amounts as provided in this Agreement, the Advisor shall be entitled to direct Insurer to pay directly any
amounts for which reimbursement would otherwise be due hereunder, and Insurer agrees to pay such amounts directly to the extent legally permissible. 
  

 7 

 ARTICLE IV 
 COVENANTS 
 4.1 COVENANT REGARDING OWNERSHIP OF MATERIALS. All published reports, documents and materials
prepared by the Advisor in connection with its duties, responsibilities and functions under this Agreement shall be the property of Insurer. Insurer will allow the Advisor reasonable access to and use of all documents and materials maintained at its
offices necessary for the Advisor to perform its responsibilities, functions and duties required by this Agreement. 
 4.2 COVENANT REGARDING
EMPLOYEES. It is agreed that, while this Agreement is in effect, Insurer and any of its officers, board members and affiliates (other than the Advisor and its affiliates) will not hire or otherwise contract for services with any employee of the
Advisor except as provided under this Agreement. 
 4.3 COVENANT REGARDING SERVICES FOR AFFILIATES OF INSURER. In the event that any Affiliate
(defined below) of the Insurer is engaged in the business similar to that of Insurer or offering insurance products of the same business line as those offered by Insurer, then the Advisor shall be required to provide to such affiliate services
identical to those provided to Insurer under the terms of this Agreement, but without any additional consideration. For purposes of this Agreement, “Affiliate” means, with respect to any Person, any other Person controlling,
controlled by or under common control with such Person. For purposes of this definition and this Agreement, the term “control” (and correlative terms) means the power, whether by contract, equity ownership or otherwise, to direct
the policies or management of a Person, and the term “person” means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization, or other entity. 
  

 8 

 4.4 NON-INTERFERENCE WITH BUSINESS RELATIONS. Advisor agrees that during the Term (as hereinafter defined) Advisor
shall not, directly or indirectly, (a) solicit, advise, persuade or otherwise induce any person to participate in or with any entity or person which provides services comparable to those provided by the Insurer, (b) do anything intentionally to
discredit or otherwise injure the reputation or goodwill of the Insurer or any of its affiliates, (c) solicit, induce or attempt to solicit or induce any current or prospective client, customer, company, independent contractor, policyholder,
subscriber, or any other business relation of the Insurer (or any affiliate) to cease or reduce the level of business between such business relation and the Insurer (or any affiliate), (d) influence, induce, or encourage, or attempt to influence,
induce or encourage, any person who is a current or prospective employee of the Insurer to leave the employment of the Insurer, or (e) in any way interfere with the Insurer’s (or any affiliates’) relationship with any customer, employee,
independent contractor, policyholder, subscriber, or any other business relation of the Insurer or affiliate. 
  

	4.5	NONDISCLOSURE OF CONFIDENTIAL INFORMATION. 

  

	 	(a)	 During the Term, Advisor will have access to Confidential Information, including Confidential Information Advisor has not accessed prior to the date of this
Agreement. Advisor recognizes that the Insurer’s business interests require the fullest practical protection and confidential treatment of the Confidential Information. At all times during the Term and thereafter, Advisor will hold in strictest
confidence and will not disclose, use, provide access to, or publish any Confidential Information, except as such disclosure, use or publication may be required in connection with Advisor’s services for the Insurer or as required by law or
legal process. Advisor agrees that all Confidential Information, whether 

  

 9 

	 	 
prepared by Advisor or otherwise coming into Advisor’s possession, shall remain the exclusive property of the Insurer during Advisor’s employment
with the Insurer. Advisor will obtain the Insurer’s written approval before publishing or submitting for publication any material (written, oral, or otherwise) that relates to Advisor’s work at the Insurer, any Confidential Information
and/or any material that incorporates any Confidential Information. Advisor hereby assigns to the Insurer any rights Advisor may have or acquire in such Confidential Information and recognizes that all Confidential Information is the sole property
of the Insurer and its assigns. 

  

	 	(b)	“Confidential Information” means all information, not generally known within the relevant trade group or by the public, including all Work Product (as defined
below), business plans, training materials, software programs, promotional materials, illustrations, designs, plans, data bases, sources of supply, customer lists, supplier lists, trade secrets, and all other valuable or unique information and
techniques acquired, developed or used by the Insurer relating to its business, operations, suppliers, information systems, employees and customers, regardless of whether such information is in writing, on computer disk or disk drive or in any other
form. Advisor expressly acknowledges and agrees that Confidential Information constitutes trade secrets and/or confidential and proprietary business information of the Insurer (or its affiliates, customers or suppliers, as the case may be).
Confidential Information shall not include information which is or becomes generally available to the public other than through disclosure by Advisor or by any other person or entity under a duty or obligation to maintain the confidentiality
thereof. 

  

 10 

	 	(c)	Advisor understands that violation of any non-disclosure provision of this Agreement shall be a material breach of this Agreement. 

 4.6 REASONABLENESS OF RESTRICTIONS. Advisor acknowledges and agrees that the restrictions imposed upon Advisor by this ARTICLE IV and the purposes for such
restrictions are reasonable and are designed to protect the trade secrets, confidential and proprietary business information and the future success of the Insurer and its affiliates without unduly restricting Advisor. Advisor specifically recognizes
and affirms that the restrictive covenants contained in this ARTICLE IV are material and important terms of this Agreement. 
 4.7 SEVERABILITY.
The covenants set forth in this ARTICLE IV each constitute separate agreements independently supported by good and adequate consideration. If a court of competent jurisdiction determines that any restriction in a clause or provision of this
ARTICLE IV is void, illegal, or unenforceable, the other clauses and provisions of this ARTICLE IV shall remain in full force and effect. 
 4.8
RETURN OF THE INSURER PROPERTY. Upon termination or expiration of this Agreement for any reason, Advisor will promptly (within twenty-four (24) hours) deliver to the Insurer any and all Confidential Information, drawings, notes, memoranda,
specifications, devices, formulas and documents, together with all copies thereof and any other material containing or disclosing any works made for hire, or third party information. Advisor further agrees that any property situated on the
Insurer’s premises and owned by the Insurer including computers, computer disks and computer hard disk drives and other computer storage media, filing cabinets or other work areas, is subject to inspection by the Insurer personnel at anytime
with or without notice. 
  

 11 

 4.9 APPLICABILITY TO REPRESENTATIVES. Advisor acknowledges and agrees it will be responsible for compliance with,
and any violation of, a covenant set forth in ARTICLE IV by its employees, officers, members, agents or representatives, including without limitation any person provided by Advisor to serve as a member of the Advisory Board or any committees of
Insurer. 
 ARTICLE V 
 TERMINATION 
 5.1 TERMINATION OF AGREEMENT. This Agreement shall terminate upon the first to occur of any of the following:

  

	 	(a)	The mutual agreement, in writing, of the parties hereto; 

  

	 	(b)	A default in the performance or breach of any material term, condition, covenant, duty, responsibility, or function contained in this Agreement, which default or breach shall
continue for a period of ninety (90) days after written notice to the party committing such default or breach by the other party stating the specific nature of such default or breach and requiring it to be remedied; provided, however, if such
default cannot be reasonably cured within such 90-day period, the length of such cure period shall be extended for the period reasonably required therefor if the defaulting party commences covering such default within such 90-day period
and continues the curing thereof with reasonable diligence and continuity. 

  

 12 

	 	(c)	The giving of one hundred eighty (180) days written notice of termination by either party to the other (with or without cause) which notice may be given only during the
ninety (90) day period that is between two hundred seventy (270) and one hundred eighty (180) days prior to expiration of the Initial Term of this Agreement (the “Termination Notice Period”); provided, however,
if such notice is given by Insurer, such termination shall be conditioned upon Insurer’s satisfaction of the requirements of Section 5.3. 

 In the event of a termination of this Agreement prior to the expiration of the Additional Term (as defined below), the party initiating such termination shall provide written notice to the Texas Department of Insurance simultaneous with
such notice being provided to the other party to this Agreement. 
 5.2 TERM OF AGREEMENT. The term of this Agreement shall commence on April 1,
2007, and end on December 31, 2011 (the “Initial Term”). Unless terminated as provided by Section 5.1(b) or (c), the term of the Agreement shall extend for a second five-year term, commencing on
January 1, 2012 and ending on December 31, 2016 (“Additional Term” and together with the Initial Term, the “Term”). Without limiting the foregoing, the Insurer shall provide the Texas Department
of Insurance notice at the end of the Termination Notice Period if this Agreement has not been terminated as provided herein. The parties acknowledge and agree that the Texas Department of Insurance shall have the right during the thirty
(30) days following the end of the Termination Notice Period to provide notice of its intent to review and approve this Agreement prior to the commencement of the Additional Term. 
  

 13 

 5.3 NON-COMPETE AGREEMENTS UPON TERMINATION. Upon the termination of the Agreement for any reason other than
termination pursuant to Section 5.1(a) or the expiration of the Additional Term without a written agreement between the Advisor and the Insurer to extend this Agreement, then the Advisor shall be required to execute a non-compete agreement in
favor of Insurer and shall undertake best efforts to obtain written non-compete agreements in favor of Insurer from each member of the Advisory Board (or representative of Advisor appointed to the Board) serving in such capacity as of the date of
termination. Upon receipt of each such written non-compete agreement in substantially the form attached hereto as Exhibit A, Insurer shall be obligated to pay the sum of $200,000 (“Non-Compete Payment”) to each
member of the Advisory Board who provides such written non-compete agreement to the Insurer. In addition, Insurer shall be obligated to pay a Non-Compete Payment to the Advisor upon the Advisor’s delivery of an executed non-compete agreement to
Insurer in substantially the form attached hereto as Exhibit A. 
 ARTICLE VI 
 FURTHER OBLIGATIONS 
 6.1 INSURANCE. Insurer
shall maintain customary officers and directors’ liability insurance with an endorsement naming the Medical Director and Advisory Directors as additional insureds thereunder. 
 ARTICLE VII 
 MISCELLANEOUS 
 7.1 CAPTIONS. The captions and headings used in this Agreement are for convenience only and do not in any way affect, limit, amplify, or modify the terms and
provisions hereof, nor shall they be utilized in the construction or interpretation of this Agreement. 
  

 14 

 7.2 NOTICES. Whenever this Agreement or law requires or permits any consent, approval, notice, request, or demand,
from one party to another, such consent, approval, notice, request, or demand must be in writing to be effective, and shall be deemed to have been given on the earlier of (i) receipt, or (ii) the third business day after it is enclosed in
an envelope, addressed to the party to be notified at the address stated below (or at such other addresses as may have been designated by written notice in accordance with this Section), properly stamped, sealed and deposited in the United States
mail, certified, return receipt requested. The initial address of each party for the purposes of this Agreement is as listed for that party on the signature page hereof. 
 7.3 INVALID PROVISIONS. If any provision of this Agreement is held to be illegal, invalid, or unenforceable during the term of this Agreement, including any renewal hereof, such provision shall be fully
severable from the other provisions hereof. This Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised part of this Agreement. The remaining provisions of this Agreement shall remain in
full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. 
 7.4
AMENDMENTS. This Agreement may be amended at any time and from time to time in whole or in part by an instrument in writing setting forth the particulars of such amendment duly executed by an authorized officer of each of the parties. Any
amendments to this Agreement or increases in compensation to be paid hereunder are subject to review and approval by the Texas Department of Insurance. 
  

 15 

 7.5 ASSIGNMENT. Neither this Agreement nor any rights or obligations of any party hereunder may be transferred or
assigned by such party without the prior written consent of the other party. 
 7.6 ENTIRE AGREEMENT. This Agreement (including any instruments,
documents, agreements, schedules and exhibits delivered pursuant hereto) constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements or understandings, if any, relating to
the subject matter hereof. 
 7.7 LAWS GOVERNING. This Agreement shall be construed and interpreted in accordance with the laws of the State of Texas.

 7.8 BINDING AGREEMENT. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective
representatives, successors and assigns. 
 7.9 WAIVERS AND CONSENTS. One or more waivers of any covenant, term, or provision of this Agreement by any
party, shall not be construed as a waiver of any subsequent default or breach of the same covenant, term, or provision, nor shall it be considered as a waiver of any other then existing or subsequent default or breach of a different covenant, term,
or provision. The consent or approval by either party to or with respect to any act by the other party requiring such consent or approval shall not be deemed to be a waiver or render unnecessary consent to or approval of any subsequent similar act.
No custom or practice of either party shall constitute a waiver of either party’s rights to insist upon strict compliance with the terms of this Agreement. Pursuit by a party of any remedy provided in this Agreement shall not preclude the
pursuit by such party of any of the other remedies provided by law or at equity. 
  

 16 

 7.10 MULTIPLE COUNTERPARTS. This Agreement shall be executed in a number of identical counterparts, each of which,
for all purposes, is deemed to be an original, and all of which constitute, collectively, the Agreement; but in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. 
 7.11 GUARANTY OF APSG. American Physician Service Group, Inc. hereby guarantees all obligations of Insurer hereunder and executes this Agreement solely to
evidence such guaranty. 
  

 17 

 IN WITNESS WHEREOF, this Agreement is effective as of the date first written above. 
  

					
	API ADVISORY, LLC
		
	By:	 	 /s/ Norris C. Knight Jr., M.D.

	Title:	 	President
	Address for Notice:	 	8700 Silverhill Lane
		 		 	Austin, TX 78759

  

					
	AMERICAN PHYSICIANS INSURANCE COMPANY
		
	 By:
	 	 /s/ Marc J. Zimmermann

	 Title:
	 	SVP, Secretary and CFO
	Address for Notice:	 	1301 S. Capital of Texas Highway
		 		 	Suite C-300
		 		 	Austin, TX 78746

 [SOLELY FOR THE PURPOSES SPECIFIED
IN SECTION 7.11:] 
  

					
	[AMERICAN PHYSICIANS SERVICE GROUP, INC.]
		
	By:	 	 /s/ W.H. Hayes

	Title:	 	Sr. Vice President
	Address for Notice:	 	1301 S. Capital of Texas Highway
		 		 	Suite C-300
		 		 	Austin, TX 78746

  

 S-1 

 EXHIBIT “A” 
 Form of Non-Compete Agreement 
 NONCOMPETE AND CONFIDENTIALITY
AGREEMENT 
 THIS NONCOMPETE AND CONFIDENTIALITY AGREEMENT (this “Agreement”) is entered into effective the
             day of                     , by
                     (“Advisor”), in favor and for the benefit of [American Physicians Insurance Company], a Texas insurance company
(“Company”), and the parties agree as follows: 
  

	 	1.	Recitals. 

 (a) This Agreement is executed
pursuant to that certain Advisory Services Agreement (the “ASA”) dated effective                  , 2006, by and among API Advisory, LLC
(“API Advisory”) and the Company; 
 (b) Capitalized terms used in this Agreement which are not otherwise defined are used with the
same meanings given such terms in the ASA; 
 (c) Company is in the business of selling and servicing medical malpractice insurance policies
to health care providers (the “Business”); 
 (d) Prior to the date of this Agreement, Advisor has served as a consultant and
advisor to the Company and has been integrally involved in the operation and development of the Business; 
 (e) It is fair and reasonable
for the Company to take steps to protect the goodwill of the Company, and its customers, suppliers and employees, following the termination of the ASA; 
 (f) Each of Advisor and Company acknowledges that it, she or he has received, good, valuable, present and sufficient consideration to support its or his obligations under this Agreement. 
  

	 	2.	Noncompetition. 

 Advisor expressly agrees,
confirms, represents and covenants for the benefit of Company, as follows: 
 (a) For the period set forth below (the “Noncompete
Period”) Advisor shall not engage in competition in the Business with Company, or any of its successors or affiliates, within the Applicable Territory (defined below), and in particular, Advisor shall not, as owner, operator, advisor, employee,
consultant, independent contractor, agent, salesperson, officer, director, shareholder, investor, guarantor, partner or member of a joint venture, or otherwise, directly or indirectly, engage in any manner in the Business within the
Applicable Territory. For purposes of this Agreement, the term “Applicable Territory” shall mean and include any state in the United Sates of America in which the Company is doing business as of the date of this Agreement; and,

  

 A-1 

 (b) The “Noncompete Period” shall begin as the date of this Agreement and end five
(5) years following the date of this Agreement; and 
 (c) During the Noncompete Period, Advisor shall not solicit or encourage any
employee, distributor, supplier or customer of the Company to modify or discontinue his, her or its relationship with the Company or the Business; and, 
 (d) Advisor agrees to return all tangible Confidential Information to the Company at the inception of this Agreement, without retaining any copies, summaries or extracts thereof. During and after the Noncompete
Period, Advisor shall not use or divulge to any person or entity any Confidential Information of the Company. “Confidential Information” means all information, not generally known within the relevant trade group or by the public, including
all Work Product (as defined in the ASA), business plans, training materials, software programs, promotional materials, illustrations, designs, plans, data bases, sources of supply, customer lists, supplier lists, trade secrets, and all other
valuable or unique information and techniques acquired, developed or used by the Insurer relating to its business, operations, suppliers, information systems, employees and customers, regardless of whether such information is in writing, on computer
disk or disk drive or in any other form. Advisor expressly acknowledges and agrees that Confidential Information constitutes trade secrets and/or confidential and proprietary business information of the Insurer (or its affiliates, customers or
suppliers, as the case may be). Confidential Information shall not include information which is or becomes generally available to the public other than through disclosure by Advisor or by any other person or entity under a duty or obligation to
maintain the confidentiality thereof; and 
 (e) The covenants and agreements of Advisor set forth in this Agreement are ancillary to an
otherwise enforceable agreement and supported by independent valuable consideration, and the limitations as to time, geographic area and scope of activity to be restrained are reasonable and acceptable to Advisor, and do not impose any greater
restraint than is reasonably necessary to protect the goodwill and other business interests of the Company; and, 
 (f) If, at some later
date, a court of competent jurisdiction determines that any of the provisions set forth in this Agreement do not meet the criteria for enforceability under applicable law, Advisor agrees that this Agreement shall be deemed without further action to
be modified to the minimum extent necessary so as to be enforceable to the maximum extent permitted by applicable law, and such court is authorized and requested to reform this Agreement accordingly. 
 (g) Notwithstanding any term of this Agreement to the contrary, nothing in this Agreement shall in any way restrict the right or ability of Advisor to
practice medicine. 
  

	 	3.	Remedies. 

 Advisor acknowledges that any
breach by her or him of this Agreement will result in irreparable harm to the Company with respect to which no adequate remedy at law shall exist. 

  

 A-2 

 
Accordingly, in addition to any other remedies available to the Company with respect to any actual or threatened breach of this Agreement, Advisor consents
to the entry of any temporary and permanent injunctive relief, together with temporary restraining orders ancillary to the same. Advisor waives any requirement for posting of any bond or other security in connection with any enforcement action by
the Company. 
  

	 	4.	Governing Law. 

 This Agreement shall be
interpreted in accordance with the laws of the State of Texas, without regard to its principles of conflicts of law, which state shall have jurisdiction of the subject matter hereof. 
  

	 	5.	Modification. 

 The covenants and/or
provisions of this Agreement may be modified or waived only by any subsequent written agreement signed by both parties. 
  

	 	6.	Counterparts. 

 This Agreement may be
executed in two or more counterparts, and each counterpart shall be deemed an original, but all counterparts shall together constitute a single instrument. 
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