Document:

alamoex105.htm

Exhibit 10.5

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	  	
Right to Purchase 300,000 shares of Common Stock of Alamo Energy Corp. (subject to adjustment as provided herein)

 

COMMON STOCK PURCHASE WARRANT

No. __________                                                                                    Issue Date:  March 4, 2010

 

ALAMO ENERGY CORP., a corporation organized under the laws of the State of Nevada (the “Company”), hereby certifies that, for value received, ______________, or its assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company at any time commencing on the Issue Date until 5:00 p.m., P.T. on the fifth anniversary of the Issue Date (the “Expiration Date”), up to 300,000 fully paid and nonassessable shares of Common Stock at a per share purchase price of $1.00.  The aforedescribed purchase price per share, as adjusted from time to time as herein provided, is referred to herein as the “Purchase Price.”  The number and character of such shares of Common Stock and the Purchase Price are subject to adjustment as provided herein.  The Company may reduce the Purchase Price for some or all of the Warrants, temporarily or permanently.  Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Senior Secured Convertible Promissory Note (the “Promissory Note”), dated as of March 4, 2010, entered into by the Company and the Holder in connection with the Holder’s purchase of certain debt securities of the Company.

 

As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

 

(a)           The term “Company” shall include Alamo Energy Corp., and any corporation that shall succeed or assume the obligations of Alamo Energy Corp. hereunder.

 

(b)           The term “Common Stock” includes (a) the Company’s common stock, $.001 par value per share, as authorized on the date of the Promissory Note, and (b) any other securities into which or for which any of the securities described in (a) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

 

(c)           The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) that the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.

 

(d)           The term “Warrant Shares” shall mean the Common Stock issuable upon exercise of this Warrant.

 

  

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1.           Exercise of Warrant.

 

1.1.           Number of Shares Issuable upon Exercise.  From and after the Issue Date through and including the Expiration Date, the Holder hereof shall be entitled to receive, upon exercise of this Warrant in whole in accordance with the terms of subsection 1.2 or upon exercise of this Warrant in part in accordance with subsection 1.3, shares of Common Stock of the Company, subject to adjustment pursuant to Section 4.

 

1.2.           Full Exercise.  This Warrant may be exercised in full by the Holder hereof by delivery of an original or facsimile copy of the form of subscription attached as Exhibit A hereto (the “Subscription Form”) duly executed by such Holder and delivery within two days thereafter of payment, in cash, wire transfer or by certified or official bank check payable to the order of the Company, in the amount obtained by multiplying the number of shares of Common Stock for which this Warrant is then exercisable by the Purchase Price then in effect.  The original Warrant is not required to be surrendered to the Company until it has been fully exercised.

 

1.3.           Partial Exercise.  This Warrant may be exercised in part (but not for a fractional share) by delivery of a Subscription Form in the manner and at the place provided in subsection 1.2 except that the amount payable by the Holder on such partial exercise shall be the amount obtained by multiplying (a) the number of whole shares of Common Stock designated by the Holder in the Subscription Form by (b) the Purchase Price then in effect.  On any such partial exercise provided the Holder has surrendered the original Warrant, the Company, at its expense, will forthwith issue and deliver to or upon the order of the Holder hereof a new Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may request, the whole number of shares of Common Stock for which such Warrant may still be exercised.

 

1.4.           Fair Market Value.  Fair Market Value of a share of Common Stock as of a particular date (the “Determination Date”) shall mean:

 

(a)           If the Company’s Common Stock is listed, traded, or quoted on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock Exchange, the American Stock Exchange, LLC, the OTC Bulletin Board, or the Pink OTC Markets Inc., then the average of the closing or last sale prices, respectively, reported for the ten trading days immediately preceding the Determination Date;

 

(b)           If the Company’s Common Stock is not listed, traded, or quoted on the NASDAQ Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock Exchange, the American Stock Exchange, LLC, the OTC Bulletin Board, or the Pink OTC Markets Inc., but is traded in the over-the-counter market, then the average of the closing bid and ask prices reported for the ten trading days immediately preceding the Determination Date;

 

(c)           Except as provided in clause (d) below and Section 3.1, if the Company’s Common Stock is not so publicly listed, traded or quoted, then as the Holder and the Company agree, or in the absence of such an agreement, by arbitration in accordance with the rules then standing of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided with such arbitration to be conducted in New York City, New York; or

 

(d)           If the Determination Date is the date of a liquidation, dissolution or winding-up, or any event deemed to be a liquidation, dissolution, or winding-up pursuant to the Company’s charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of all of the Warrants are outstanding at the Determination Date.

 

  

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1.5.           Company Acknowledgment.  The Company will, at the time of the exercise of the Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant.  If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.

 

1.6.           Trustee for Warrant Holders.  In the event that a bank or trust company shall have been appointed as trustee for the Holder of the Warrants pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter described) and shall accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1.

 

1.7           Delivery of Stock Certificates, etc. on Exercise.  The Company agrees that the Warrant Shares shall be deemed to be issued to the Holder hereof as the record owner of such shares as of the close of business on the date on which delivery of a Subscription Form shall have occurred and payment made for such shares as aforesaid.  As soon as practicable after the exercise of this Warrant in full or in part, and in any event within ten (10) business days thereafter (“Warrant Share Delivery Date”), the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder hereof, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and non-assessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share of Common Stock, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.  The Company understands that a delay in the delivery of the Warrant Shares after the Warrant Share Delivery Date could result in economic loss to the Holder.  As compensation to the Holder for such loss, the Company agrees to pay (as liquidated damages and not as a penalty) to the Holder for late issuance of Warrant Shares upon exercise of this Warrant the proportionate amount of $100 per business day after the Warrant Share Delivery Date for each $10,000 of Purchase Price of Warrant Shares for which this Warrant is exercised which are not timely delivered.  The Company shall pay any payments incurred under this Section in immediately available funds upon demand.  Furthermore, in addition to any other remedies which may be available to the Holder, in the event that the Company fails for any reason to effect delivery of the Warrant Shares by the Warrant Share Delivery Date, the Holder may revoke all or part of the relevant Warrant exercise by delivery of a notice to such effect to the Company, whereupon the Company and the Holder shall each be restored to their respective positions immediately prior to the exercise of the relevant portion of this Warrant, except that the liquidated damages described above shall be payable through the date notice of revocation or rescission is given to the Company.

 

1.8           Buy-In.  In addition to any other rights available to the Holder, if the Company fails to deliver to a Holder the Warrant Shares as required pursuant to this Warrant within seven (7) business days after the Warrant Share Delivery Date and the Holder or a broker on the Holder’s behalf purchases (in an open market transaction or otherwise) shares of common stock to deliver in satisfaction of a sale by such Holder of the Warrant Shares which the Holder was entitled to receive from the Company (a “Buy-In”), then the Company shall pay in cash to the Holder (in addition to any remedies available to or elected by the Holder) the amount by which (A) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of common stock so purchased exceeds (B) the aggregate Purchase Price of the Warrant Shares required to have been delivered, together with interest thereon at a rate of 15% per annum, accruing until such amount and any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty).  For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000 of Purchase Price of Warrant Shares to have been received upon exercise of this Warrant, the Company shall be required to pay the Holder $1,000, plus interest.  The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In.

 

  

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2.           Cashless Exercise.

 

(a)           If a registration statement (“Registration Statement”) is effective for the public unrestricted resale of all of the Warrant Shares issuable upon exercise of this Warrant, this Warrant may be exercised in whole or in part for cash only as set forth in Section 1 above.  If such Registration Statement is not available, payment upon exercise may be made at the option of the Holder either in (i) cash, wire transfer or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Purchase Price, (ii) by delivery of Common Stock issuable upon exercise of the Warrants in accordance with Section (b) below or (iii) by a combination of any of the foregoing methods, for the number of Common Stock specified in such form (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the terms of this Warrant) and the holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein.

 

(b)           Subject to the provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Purchase Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Subscription Form in which event the Company shall issue to the holder a number of shares of Common Stock computed using the following formula:

 

X=Y (A-B)

A

Where           X=           the number of shares of Common Stock to be issued to the holder

	
  

	
Y=

	
the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation)

 

	
  

	
A=

	
the average of the closing sale prices of the Common Stock for the ten (10) Trading Days immediately prior to (but not including) the Exercise Date, (or if no such closing prices are available, then the Fair Market Value)

 

	
  

	
B=

	
Purchase Price (as adjusted to the date of such calculation)

 

For purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood, and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Promissory Note.

 

  

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3.           Adjustment for Reorganization, Consolidation, Merger, etc.

 

3.1.           Fundamental Transaction.  If, at any time while this Warrant is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another entity, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the Company consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more persons or entities whereby such other persons or entities acquire more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement or other business combination), (E) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate Common Stock of the Company, or (F) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder, (a) upon exercise of this Warrant, the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable upon or as a result of such reorganization, reclassification, merger, consolidation or disposition of assets by a Holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event or (b) if the Company is acquired in (1) a transaction where the consideration paid to the holders of the Common Stock consists solely of cash, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the 1934 Act, or (3) a transaction involving a person or entity not traded on a national securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market, cash equal to the Black-Scholes Value.  For purposes of any such exercise, the determination of the Purchase Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Purchase Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given any choice as to the securities, cash, or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant into Alternate Consideration.  The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 3.1 and ensuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.  “Black-Scholes Value” shall be determined in accordance with the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg L.P. using (i) a price per share of Common Stock equal to the VWAP of the Common Stock for the Trading Day immediately preceding the date of consummation of the applicable Fundamental Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of this Warrant as of the date of such request, and (iii) an expected volatility equal to the 100-day volatility obtained from the HVT function on Bloomberg L.P. determined as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction.

 

  

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3.2.           Dissolution.  In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, prior to such dissolution, shall at its expense, deliver or cause to be delivered the stock and other securities and property (including cash, where applicable) receivable by the Holder of the Warrants after the effective date of such dissolution pursuant to this Section 3 to a bank or trust company (a “Trustee”) having its principal office in New York, NY, as trustee for the Holder of the Warrants.  Such property shall be delivered only upon payment of the Warrant exercise price.

 

3.3.           Continuation of Terms.  Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the Other Securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any Other Securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4.  In the event this Warrant does not continue in full force and effect after the consummation of the transaction described in this Section 3, then only in such event will the Company’s securities and property (including cash, where applicable) receivable by the Holder of the Warrants be delivered to the Trustee as contemplated by Section 3.2.

 

4.           Extraordinary Events Regarding Common Stock.  In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the Purchase Price shall, simultaneously with the happening of such event, be adjusted by multiplying the then Purchase Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event, and the product so obtained shall thereafter be the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described herein in this Section 4.  The number of shares of Common Stock that the Holder of this Warrant shall thereafter, on the exercise hereof, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a fraction of which (a) the numerator is the Purchase Price that would otherwise (but for the provisions of this Section 4) be in effect, and (b) the denominator is the Purchase Price in effect on the date of such exercise.

 

5.           Certificate as to Adjustments.  In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of the Warrants, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of the Warrant and any Warrant Agent of the Company (appointed pursuant to Section 12 hereof).

 

6.           Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial Statements.  The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Warrants, all shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Warrant.  This Warrant entitles the Holder hereof to receive copies of all financial and other information distributed or required to be distributed to the holders of the Company’s Common Stock.

 

  

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7.           Assignment; Exchange of Warrant.  Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a “Transferor”). On the surrender for exchange of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with an opinion of counsel reasonably satisfactory to the Company that the transfer of this Warrant will be in compliance with applicable securities laws, the Company will issue and deliver to or on the order of the Transferor thereof a new Warrant or Warrants of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

 

8.           Replacement of Warrant.  On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense, twice only, will execute and deliver, in lieu thereof, a new Warrant of like tenor.

 

9.           Reserved.

 

10.         Maximum Exercise.  The Holder shall not be entitled to exercise this Warrant on an exercise date in connection with that number of Common Stock which would be in excess of the sum of (i) the number of Common Stock beneficially owned by the Holder and its affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant with respect to which the determination of this limitation is being made on an exercise date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding Common Stock on such date.  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.  Subject to the foregoing, the Holder shall not be limited to aggregate exercises which would result in the issuance of more than 4.99%.  The restriction described in this paragraph may be waived, in whole or in part, upon sixty-one (61) days prior notice from the Holder to the Company to increase such percentage to up to 9.99%.  The Holder may allocate which of the equity of the Company deemed beneficially owned by the Subscriber shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%.

 

11.           Reserved.

 

12.           Warrant Agent.  The Company may, by written notice to the Holder of the Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such Warrant Agent.

 

13.           Transfer on the Company’s Books.  Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

 

  

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14.           Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:  if to the Company, to:  Alamo Energy Corp., 10497 Town and Country Way, Suite 310, Houston, TX 77024,  Attn: Allan Millmaker, President, with a copy by facsimile only to:  _______________, facsimile:  ___________, and (ii) if to the Holder, __________________, facsimile ____________.

 

 

15.           Law Governing This Warrant.  This Warrant shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws.  Any action brought by either party against the other concerning the transactions contemplated by this Warrant shall be brought only in the state courts of Nevada or in the federal courts located in the State of Nevada.  The parties to this Warrant hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.  The Company and Holder waive trial by jury.  The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs.  In the event that any provision of this Warrant or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute or rule of law.  Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.

 

 

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]

 

 

  

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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

 

ALAMO ENERGY CORP.

 

By:          _____________________________________________ 

Philip Mann, Chief Financial Officer

 

  

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Exhibit A

FORM OF SUBSCRIPTION

(to be signed only on exercise of Warrant)

TO:  ALAMO ENERGY CORP.

The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

[___]           ________ shares of the Common Stock covered by such Warrant; or

[___]           the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2.

The undersigned herewith makes payment of the full purchase price for such shares at the price per share provided for in such Warrant, which is $___________.  Such payment takes the form of (check applicable box or boxes):

[___]           $__________ in lawful money of the United States; and/or

[___]           the cancellation of such portion of the attached Warrant as is exercisable for a total of _______ shares of Common Stock (using a Fair Market Value of $_______ per share for purposes of this calculation); and/or

 

[___]           the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2.

 

The undersigned requests that the certificates for such shares be issued in the name of, and delivered to _______________________________________________________________________ whose address is

 

The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”), or pursuant to an exemption from registration under the Securities Act.

 

	

Dated:  _______________, ____

	
 

	 	 
	 	 	
(signature must conform in all respects to name

of holder as specified on the face of the Warrant)

 

	 
	 	 	
Address:

 

	 
	 	 	
 

	 

 

  

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Exhibit B

 

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of ALAMO ENERGY CORP., to which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of ALAMO ENERGY CORP., with full power of substitution in the premises.

 

	
Transferees

	
Percentage Transferred

	
Number Transferred

	  	  	  
	  	  	  
	  	  	  

	

Dated:  _______________, ____

	 	
 

	 	 
	
 

Signed in the presence of:

 

	 	 	
(signature must conform in all respects to name

of holder as specified on the face of the Warrant)

 

	 
	 	 	 	
 

	 
	    (Name) 	 	 	
 

	 
	 	 	 	    (address) 	 
	 	 	 	 	 

	

 

	 	
 

	 	 
	
ACCEPTED AND AGREED:

	 	 	
 

	 
	[TRANSFEREE]	 	 	    (address)  	 
	
 

 

 

	 	 	
 

	 
	    (Name) 	 	 	
 

	 
	 	 	 	   	 
	 	 	 	 	 

 

11exh10g.htm

Exhibit 10(g)

 

MANAGING GENERAL AGENCY AGREEMENT

Protective Insurance Company, an Indiana corporation, with main administrative offices located at 1099 North Meridian Street, Indianapolis, IN 46204, hereinafter referred to as “the Company” and Paladin Catastrophe Management LLC, a New Jersey corporation, located at 51 Grove Street, Suite 3, Chester, NJ, 07930 (“Manager”) agree as follows:

Section 1 – SCOPE OF APPOINTMENT; DUTIES

 

	
  

	
1.1

	
The Company appoints Paladin Catastrophe Management LLC as a Managing General Agent (“Manager”) for production of assumed reinsurance business.

 

	
  

	
1.2

	
The effective date of this Agreement will be July 2, 2007 and shall remain in effect until cancelled, as provided in Section 9 of this Agreement.

 

	
  

	
1.3

	
The Company shall have a first right of refusal relating to any insurance or reinsurance business produced and/or underwritten by the Manager while this Agreement is in force.  The Manager will present the business to the Company in a manner that allows for the full and complete analysis by the Company of all aspects of the business.

 

	
  

	
1.4

	
The Company shall have a reasonable period of time in which to analyze any business presented by the Manager.  Should the Company choose to accept the business, or any portion thereof, the Company shall have the exclusive right to such accepted business produced and/or underwritten by the Manager.

 

	
  

	
1.5

	
Each type of business produced shall be subject to a separate agreement covering the specific terms and limitations related to that business.  The Company and the Manager shall mutually agree upon what constitutes a separate type of business (i.e. property catastrophe reinsurance assumed).  Each separate agreement will be bound by the provisions of this Managing General Agency Agreement in addition to the provisions of the separate agreements.  Each such separate agreement shall be listed in Exhibit A attached hereto.

 

	
  

	
1.6

	
If the Company declines to accept business presented to it by the Manager, the Manager may seek other markets for such business only after formal written rejection by the Company.  The Company shall provide such written rejection on a timely basis after it has completed its evaluation of the business.

 

	
  

	
1.7

	
This appointment of Manager is not exclusive.  The Company is free to solicit other intermediaries for business.

 

	
  

	
1.8

	
The Manager’s appointment is limited to the authority necessary and reasonably required for the Manager to perform its duties and discharge its responsibilities as described in this agreement.

 

	
  

	
1.9

	
The Manager will at all times obey all underwriting guidelines and directives as the Company may from time to time promulgate for production of the business, as specified in the separate contracts listed in Exhibit A.  The Manager agrees not to bind coverage or sign contracts of reinsurance in the name of the Company in contravention of any such guidelines, rules, instructions, or directives without specific written approval by the Company.  The Manager further agrees not to bind retrocessions on behalf of the Company, unless specifically authorized by the Company in writing, or commit the Company to participate in any insurance or reinsurance syndicate.

 

	
  

	
1.10

	
The Manager agrees not to issue any advertising or promotional material bearing the Company’s name(s) or logo(s) without first obtaining the written approval of the Company.

 

	
  

	
1.11

	
The Manager will disclose to the Company any relationship it has with any insurer or broker, including any relationships resulting from the Company declining product submissions by the Manager.

 

	
  

	
1.12

	
The Manager will provide annually a review, in the form prescribed by Statement on Accounting Standards 70, from an independent certified public accountant that the Manager’s accounting for premiums and losses provided to the Company have been made on a timely and accurate basis.

 

	
  

	
1.13

	
The Company may, at any time with five business days notice, conduct an onsite review of the underwriting and claims processing operations of the Manager. The Manager is prohibited from appointing any producer or sub-reinsurance intermediary manager.  All Contracts will be underwritten directly by the Manager and will be

  

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accepted from Licensed Reinsurance Brokers and Intermediaries in an open market forum.  In no way will the Manager give its underwriting authority to any other entity or assume any risk without the Company’s express written approval of each individual contract.

 

	
  

	
1.14

	
The Manager must maintain an office and staff capable of handling all business written by the Manager, including business placed with other markets as the result of Company declinations.  This shall include, but not be limited to the maintenance of Catastrophe model(s), computers, telephones and other systems necessary to write and service business written by the Manager.

 

	
  

	
1.15

	
The Manager and its officers agree to devote substantially all of their full efforts and time to (1) the business covered by this managing general agency agreement, (2) services as investment advisor to Baldwin & Lyons Capital Management LLC ILS Fund covered under a separate terms sheet, and (3) those services covered under Section 1.16.

 

	
  

	
1.16

	
In addition to underwriting for other markets for business first offered to, but declined by, the Company, the Manager will be permitted to provide services to other customers relating to modeling catastrophe risk for take-out insurance companies, each of which shall be disclosed to the Company.  No tools, including but not limited to modeling software, purchased or funded by the Company with respect to business produced by the Manager for Company may be utilized in conducting any business for other customers, without the express written approval of the company.  Should the Company approve the use of such tools by the Manager for other business, any cost of such tools will be shared on a basis to be agreed by the Company and the Manager on a case by case basis.

Section 2 –MANAGER’S EXPENSES

 

	
2.1

	
Unless otherwise designated in the separate agreements listed in Exhibit A, the Manager will pay its own expenses incurred in producing and servicing the business.  The Manager will not charge the Company, or commit the Company to pay, any expense, debt, or obligation in connection with production of the business unless prior written approval is obtained from the Company.

 

	
2.2

	
The Manager will pay for its own data processing hardware and software.   The Manager further will be responsible for fees for data processing and communication software and technology including, but not limited to, necessary line charges.  Manager will also maintain all necessary hardware and software licenses.

 

	
2.3

	
The Manager will indemnify the Company for any fees, penalties and/or fines relating to special examinations conducted by the local regulatory authority having jurisdiction over the Company arising from the business produced hereunder to the extent that the fees, penalties, fines and/or examinations in question arise from the acts of the Manager.  Any fees, penalties or examinations that are the result of normal business activity outlined in this contract will be payable by the Company.

 

	
2.4

	
The Manager will pay all audit fees for examinations specified in Section 1.12.

	
  

	
Section 3 – PREMIUMS AND DEPOSITS

 

	
3.1

	
Unless otherwise designated in the separate agreements listed in Exhibit A, the Manager will direct the insured, the primary insurer or their designated agent or broker or intermediary to remit all deposits and premiums on contracts of reinsurance written pursuant to this agreement, net of brokerage commission or any offsets allowed per the terms of each contract of reinsurance, directly to the Company.

 

	
3.2

	
Unless otherwise designated in the separate agreements listed in Exhibit A, it is hereby agreed and understood that the Manager is responsible for, and guarantees to the Company, payment of all premium on contracts of insurance or reinsurance bound by the Manager on behalf of the Company even if not collected by the Manager.  The Manager agrees it will be responsible for all bad debts and will promptly pay Company upon demand.  The Manager agrees to bear any expense, including reasonable attorneys’ fees and costs expended by the Company, to enforce collection from the Manager.

  

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Section 4  – COMPENSATION

 

Each separate agreement listed in Exhibit A will specify the Manager’s compensation for the business covered by that particular agreement.  No compensation will be paid to the Manger for the initiation of, maintenance of or termination of this Managing General Agency Agreement.

Section 5 – LOSS NOTICES AND SETTLEMENTS                                                                                     Unless otherwise designated in the separate agreements listed in Exhibit A:

 

	
5.1

	
The Manager will issue notice to the Company immediately upon receiving notice of an event that has or may cause a loss to the program. The Manager will verify the validity and applicability of the claim in relation to coverage provided under the related contract and make its best assessment of the ultimate liability of each reinsured based on the information on hand and transmit such information to the Company.

 

	
5.2

	
The Company shall have sole authority to remit payments in partial or full settlement of claims arising from contracts of insurance under this Agreement.  Such payments will be made directly to the insured or the insured’s broker, as applicable.  The Company will endeavor to settle claims promptly upon receipt of sufficient information from the Manager and/or the insured; however, the Company shall have the authority to withhold payment pending receipt of additional information, as it deems necessary to properly evaluate the claim.  In the event that the contract of reinsurance carries a Cash Call provision, the Company will remit payment in accordance with the Cash Call provision.

 

	
5.3

	
The Manager will provide the Company with all information on each claim necessary for the Company to record and evaluate the loss and shall send a copy of the claim file to the Company upon their request.

 

	
5.4

	
All claims files will be the joint property of the Company and the Manager.  However, upon an order of liquidation of the Company, the Manager will simultaneously and immediately provide the liquidator with copies of all the claim files.  With respect to claim files pertaining solely to a Company in liquidation, the Manager will have reasonable access to and the right to copy the files on a timely basis.

	
  

	
Section 6 – REGULATORY COMPLIANCE

 

	
6.1

	
The Manager is authorized to accept submissions on behalf of the Company from insurance and reinsurance intermediaries.  It is the sole responsibility of the Manager to ensure the intermediaries selected by the Manager are licensed by the appropriate regulatory authorities.

 

	
6.2

	
The Manager represents and warrants (a) it has all necessary licenses and authorizations from regulatory authorities necessary to produce the business; (b) it will maintain its licenses and authorizations in good standing; (c) will comply with all other state and federal laws and regulations governing the Company and the Manager and (d) will provide copies of all such licenses and authorizations to the Company.

 

	
6.3

	
The Manager will comply with the rules, laws and regulations in all states in which business under this agreement will be produced.

 

	
6.4

	
The Manager will defend, indemnify and hold Company harmless for any claim, investigation, fine or other action arising from Manager’s failure to fully comply with Section 6 of this agreement.

 

	
6.5

	
In the event that Manager receives a request to disclose all or any part of the information in its possession concerning Company under the terms of a subpoena or order issued by a court of competent jurisdiction or by a governmental body, it agrees to (i) promptly notify Company of the existence, terms, and circumstances surrounding such a request so that it may take action to seek an appropriate protective order and/or waive compliance with the provisions of this Agreement, and (ii) if disclosure of all or a part of such requested information is required in the opinion of Manager's counsel, exercise reasonable efforts to assist Company to obtain an  order or other reliable assurance that confidential treatment will be accorded to that portion of the requested information that is required to be disclosed.  The parties agree, however, that all costs and expenses including, but not limited to attorneys’ fees, incurred in obtaining such an order or other reliable assurances regarding the confidential treatment of the information in possession of the Manager is the sole responsibility of Company."

  

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6.6

	
Manager warrants and represents that its services and software used to carry out its obligations under this Agreement do not and will not violate or infringe upon any copyright, trademark, patent, trade secret or other proprietary right of any third party.  Manager shall, at its own expense, defend, indemnify and hold harmless Company against and from any action, claim, suit, or proceeding brought against Company by a third party arising out of Company's violation or infringement of any copyright, trademark, patent, trade secret or other proprietary right to the extent based on Company's authorized use or possession of Manager’s services and software; provided that Company notifies Manager promptly of any such claims or suits. Manager shall have the right to conduct the defense of any such claim, suit, proceeding, or action and all negotiations for settlement or compromise, unless otherwise mutually agreed to in writing by the parties hereto.  However, Company, at its own expense, shall have the right to participate in the defense of any such claim, suit, proceeding, or action through counsel of its choosing.

 

	
  

	 

	
  

	
Section 7 – MAINTENANCE OF RECORDS; COMPANY ACCESS

 

	
7.1

	
The Manager will maintain true and complete records of all material transactions involving contracts of reinsurance written under this agreement.  Furthermore, the Manager will maintain its records for such period of time as will comply with applicable laws and regulations governing retention of records.  As often as the Company may reasonably request, during the term of this agreement and for as long after termination as the Company deems necessary to protect its interests, the Manager will permit the Company and its authorized representatives to inspect and examine the Manager’s records of all transactions involving the business.  The Manager agrees to cooperate and render assistance in any inspection or examination and will make copies of any books and records and furnish them to the Company or its representatives.

 

	
7.2

	
When transactions involving the business are recorded on the Manager's data processing system(s), the Manager will, on a monthly basis, back up records of all transactions and will maintain backup records at a location other than the location where original records are maintained.

 

Section 8 – INSURANCE AND BOND

 

	
8.1

	
The Manager agrees to secure and maintain bonds as required under the terms of its licenses from an admitted surety.

 

	
8.2

	
At its sole expense, the Manager agrees to maintain in full force and effect during the term of this agreement policy(ies) of errors and omissions insurance (a) in the minimum amount of $5,000,000 with a deductible not to exceed $50,000; and (b) issued by an insurer acceptable to the Company.  Prior to signing this agreement and at each subsequent renewal of the policy(ies), the Manager agrees to have the Company named as an additional insured on the policy(ies) and will furnish the Company a certificate of insurance.  The Manager will notify the Company 30 days prior to normal expiration or anniversary, or immediately upon notification that coverage will be canceled.  The Manager will instruct its errors and omissions insurer to furnish the Company with any notice of cancellation, non-renewal, or other lapse in the policy(ies).  Upon termination of this agreement, the Manager will, at its sole expense, purchase extended reporting coverage until all contracts of reinsurance in force at the time of termination have reached their natural expiration.

 

	
8.3

	
The Company may, at its sole expense, request that the Manager maintain in full force and effect during the term of this agreement policy(ies) of employee theft insurance covering the Manager  and its employees (a) in the minimum amount of $300,000, with a deductible not to exceed $50,000; and (b) issued by an insurer acceptable to the Company.  Prior to signing this agreement and at each subsequent renewal of the policy(ies), the Manager agrees to have the Company named as an additional insured on the policy(ies) and will furnish the Company a certificate of insurance.  The Manager will notify the Company 30 days prior to normal expiration or anniversary, or immediately upon notification that coverage will be canceled.  The Manager will instruct its employee theft insurer(s) to furnish the Company with any notice of cancellation, non-renewal, or other lapse in the policy(ies).  In the event of a loss payable by the Manager’s insurer(s), the Manager agrees to pay the deductible directly to the Company.

  

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Section 9 – TERMINATION

 

	
  

	
This Managing General Agency Agreement can be terminated only as follows:

 

	
9.1

	
The Company can cancel this agreement for any reason, upon written notice delivered to the Manager.

 

	
  

	
a.

	
Business in-force on the date of notice of cancellation of this agreement shall run-off under the terms of the separate agreements, listed in Exhibit A, in place on that date, including profit commission calculations and separate termination clauses, without change because of the termination of the managing general agency agreement.

 

	
  

	
b.

	
The Manager and its officers and employees each agree not to solicit business from any account/insured inforce on the date of agreement cancellation notice (In-force Business), unless specifically requested to do so by The Company or upon receipt of written notification from The Company of its intention not to solicit or renew any of the In-force Business.

 

	
  

	
c.

	
The Manager and its officers and employees will engage in no action which would cause The Company to be unable to solicit and renew any In-force Business during the Agreement Termination Period and the Company will be considered the owner of all In-force Business unless the Company provides to The Manger written notification of the Company’s intention not to solicit or renew any of the In-force Business.

 

	
  

	
d.

	
The Manager will deliver to the Company, upon request at any time during the Agreement Termination Period, all marketing and underwriting information regarding In-force Business on the date of cancellation of this treaty.

 

	
  

	
e.

	
If The Company shall continue to solicit and renew any In-force Business, compensation to The Manager shall be in the form of a flat commission on any such inforce business renewed by The Company or its affiliates during the Agreement Termination Period.  A contract will be considered a renewal if any portion of the reinsured is covered on an on-going basis by the Company.  The Manager shall be paid the greater of a commission rate of 3.0%, applied to all audited original premium earned for the entire policy terms on business renewed during the Agreement Termination Period, specifically excluding any and all reinstatement premium, or $300,000 per underwriting year.  The commission rate shall apply to all premium other than reinstatement premium.

 

	
9.2

	
The Manager may cancel this Managing General Agency Agreement, upon 15 days written notice delivered to the Company, only for the following reasons:

 

	
  

	
a.

	
In the event of a down-grade of Company’s rating from A.M. Best to lower than A-.

 

	
  

	
b.

	
In the event that The Company’s statutory surplus is reduced by 25% accompanied by a down-grade of The Company’s rating from A.M. Best to A- or lower.

 

	
  

	
c.

	
A change in the majority ownership of the Company and/or Baldwin & Lyons, Inc. or, in the event that the following individuals are no longer employed by the Company: Gary W. Miller, Joseph J. DeVito, G. Patrick Corydon and John E. Mitchell.  Cancellation for this reason shall require three months notice to the Company and will be subject to the same general conditions enumerated above for cancellation notice by the Company, with the twenty-four month Agreement Termination Period being replaced by a three month Agreement Termination Period.

 

Business in-force on the date of notice of cancellation of this agreement from the Manager shall run-off under the terms of the agreements in place on that date, including profit commission calculations and separate termination clauses, without change because of the termination of the managing general agency agreement.

 

	
9.3

	
In the event that provisions of this section 9 are in conflict with terminations provisions in the separate agreements listed in Exhibit A, the provisions of the separate agreements will apply to the specific business covered by that agreement.

 

	
9.4

	
Upon termination of this agreement the Manager promptly will provide the Company, at the Manager’s expense, copies of all claims and contract files pertaining to the business.  These files will include, but will not be limited to, submissions for contracts of insurance and reinsurance, all underwriting and rating files, copies of the contracts, endorsements, loss notices, and all correspondence related to each contract of reinsurance assumed by the Manager.

  

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Section 10 – SPECIAL TERMINATION

 

	
10.1

	
The Manager may cancel the Company’s participation hereon at any time with respect to premium earned and losses occurring on or after the date of cancellation by giving 15 days written notice, upon occurrence of any of the following:

 

	
  

	
i.

	
The Company becomes insolvent or is placed in conservation or has a receiver appointed; or

 

	
  

	
ii.

	
The Company has been ordered by a regulatory authority to cease doing business.

 

	
  

	
10.2     In the event the Company’s participation is cancelled in accordance with Section 10.1, the Company will, subject to limitations imposed by a bankruptcy court or other regulatory authority having jurisdiction, return to the Manager any unearned premium (less ceding commission thereon) applicable to subject business in force at the effective date of cancellation.  The Company will remain liable for losses occurring and continue to benefit from premiums collected or losses reduced prior to this date.

Section 11 – INDEMNIFICATION; REIMBURSEMENT

 

	
11.1

	
The Company agrees to defend, indemnify, and hold the Manager harmless from any claim or loss arising out of any act, or omission to act, of the Company in performance of this agreement.  Claim or loss includes, but is not limited to, attorney fees, court costs, interest payments, and expenses of investigation, defense, or settlement.  This indemnification does not apply to the acts or omissions of the Manager which caused or contributed to claim or loss.

 

	
11.2

	
The Manager agrees to defend, indemnify, and hold the Company harmless from any claim or loss arising out of any act or omission to act of the Manager in performance of this agreement.  Claim or loss includes, but is not limited to, attorney fees, court costs, interest payments, and expenses of investigation, defense, or settlement.  This indemnification does not apply to the acts or omissions of the Company which caused or contributed to claim or loss

 

	
11.3

	
The Manager further agrees to defend, indemnify, hold the Company harmless from, and reimburse the Company for, any fines, penalties, or administrative action imposed by legal or regulatory authorities which arose out of the Manager’s failure to comply with this agreement, including, but not limited to the provisions of Section 6.

 

	
11.4

	
If the Company and the Manager are sued in relation to business pursuant hereunder, in the sole discretion of the Company, the Company and the Manager may hire common defense counsel and waive conflicts.  If they do not hire common counsel and must hire their own attorneys, they agree that the Company will direct the defense.

Section 12 – INDEPENDENT CONTRACTOR STATUS

 

The Manager agrees it is an independent contractor.  It further agrees the Company has no authority or right to control the Manager’s method of performance of its duties and responsibilities under this Agreement.  No officers, directors, employees, or agents of the Manager will be regarded as employees of the Company.

Section 13 – OFFSET

 

The Company and the Manager have the right to offset any balance or amounts due from one party to the other under the terms of this Agreement.  The party asserting the right of offset may exercise such right any time whether the balances due are on account of premiums, losses, expenses or otherwise.

Section 14 - MISCELLANEOUS

 

	
14.1

	
The authority, duties, and responsibilities of the Manager cannot be assigned.

  

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14.2

	
This is the entire agreement between the parties with respect to general managing general agency operations.  Separate agreements listed in Exhibit A may carry different or more restrictive provisions than those contained in this agreement and, when in conflict, is it is agreed that the provisions of the separate agreements will prevail. This agreement can be modified only in writing signed by the parties.  It may not be modified verbally, nor may it be modified by any subsequent practice or course of dealing by the parties.

 

	
14.3

	
Failure or delay by the Company to enforce any of the provisions of this agreement will not constitute a waiver of any of its rights or privileges under this agreement, unless in each instance the Company signs a written waiver.  No written waiver will modify this agreement or affect the rights of the Company with respect to any subsequent default or failure of performance by the Manager.

 

	
14.4

	
This agreement is an Indiana contract and will be construed in accordance with the laws of the State of Indiana and that all actions will be handled by the courts located in Marion County, Indiana.

 

	
14.5

	
If any portion of this agreement is deemed invalid or unenforceable, the invalid or unenforceable portion is considered severed from the agreement and the remainder of the agreement will remain in full force and effect.

 

	
14.6

	
The headings are merely descriptive and provided for ease of reference; they will not affect interpretation of this agreement.  If any heading is inconsistent with any provision of the agreement, the provision will control.

 

	
14.7

	
This agreement may be signed in counterparts, each of which will constitute an original.

 

	
14.8

	
To the extent the Manager receives nonpublic personal information provided by the Company, the Manager agrees to maintain the confidentiality of such information.  Nonpublic personal information means personally identifiable personal and financial information pertaining to the Company, its employees and reinsureds.  The Manager agrees not to disclose nonpublic personal information except as necessary to perform its obligations under this agreement, with the written authorization of the individual, or as permitted or required by State of federal law.  The Manager further agrees to maintain physical, electronic and procedural safeguards to protect this information.  Manager further agrees that, in having access to non-public information, that it will at all times indemnify and keep indemnified Company and hold and save it harmless from and against any and all liability, losses, costs, damages, attorneys’ fees and expenses of whatever kind which Company may sustain or incur by reason of Manager's sharing non-public information

 

	
  

	
14.9       The Company and the Manager agree that they will not disclose one another’s trade secrets or proprietary information.

 

	
  

	
14.10     Indemnification and privacy provisions contained within this Agreement shall survive termination.

Section 15 – NOTICES

 

	
Any notice required or permitted to be given under this agreement must be in writing.  Notice is deemed given when delivered personally or on the date of mailing after being sent by registered or certified mail, return receipt requested, postage prepaid, and addressed as follows:

 

	
To Company:

	
To Manager:

	
Protective Insurance Company

	
Paladin Catastrophe Management LLC

	
1099 North Meridian Street

	
51 Grove Street, Suite 3

	
Indianapolis, IN 46204

	
Chester, NJ, 07930

	
Attn:  G. Patrick Corydon

	
Attn:  David B. Ingrey, CPCU, ARe

	
Executive Vice President

	
Principal

  

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Signed by the parties and effective as of the date set forth in Section 1.2, above.

PROTECTIVE INSURANCE COMPANY

Dated: September 9, 2009                                                          By: /s/G. Patrick Corydon

 

      G. Patrick Corydon

      Executive Vice President

PALADIN REINSURANCE MANAGEMENT, LLC

DATED: September 9, 2009                                                       By: /s/David B. Ingry

 

       David B. Ingrey

       Director

DATED: August 13, 2009                                                          By: /s/ Haas Chaudhry

 

       Haas Chaudhry

       Director

DATED: September 9, 2009                                                       By: /s/ Martha Atwater

 

       Martha Atwater

       Director

DATED: August 13, 2009                                                          By: /s/ Adam C. Tyburski

 

       Adam C. Tyburski

       Director

  

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MANAGING GENERAL AGENCY AGREEMENT

EXHIBIT A – LISTING OF SEPARATE AGREEMENTS

 

	
  

	
1.

	
AMENDED AND RESTATED PROPERTY CATASTROPHE REINSURANCE INTERMEDIARY MANAGER AGREEMENT, effective July 2, 2007.

 

	
  

	
2.

	
CLASH AND WORKERS COMPENSATION CATASTROPHE REINSURANCE INTERMEDIARY MANAGER AGREEMENT, effective October 1, 2008.

  

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