Document:

Exhibit 10.5

 

AMENDMENT NO 1

TO

AMENDED AND RESTATED NON-COMPETITION, NON-DISCLOSURE

AND NON-SOLICITATION AGREEMENT

THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED NON-COMPETITION, NON DISCLOSURE AND NON-SOLICITATION AGREEMENT (the “Agreement”) is entered into effective as of March 17, 2015 by and between:

		(i)	Peter J. Prygelski, III (the “Employee”); and

		(ii)	FEDERATED NATIONAL HOLDING COMPANY, a Florida corporation (the “Company”).

P R E L I M I N A R Y   S T A T E M E N T

WHEREAS, the Company and the Employee are parties to that certain Amended and Restated Non-Competition, Non-Disclosure and Non-Solicitation Agreement dated as of August 5, 2013 (the “Restrictive Covenant Agreement”);

WHEREAS, the Company is undertaking a joint venture in which it will become a member of Monarch Delaware Holdings LLC, a Delaware limited liability company (“Monarch Delaware”), which will engage, through its direct subsidiary Monarch National Holding Company, a Florida corporation (“Monarch National Holding”), and its indirect subsidiary Monarch National Insurance Company, a Florida corporation (“Monarch Insurance,” and together with Monarch National Holding, the “Monarch Subsidiaries,” and together with Monarch Delaware, the “Monarch Entities”), in the property and casualty insurance business;

WHEREAS, the Company desires that the Employee serve as a member of the Board of Managers and Chief Financial Officer and Treasurer of Monarch Delaware and Chief Financial Officer and Treasurer of the Monarch Subsidiaries for so long as the Employee remains employed by the Company (the “Permitted Monarch Positions”); and

WHEREAS, the Company and the Employee desire to amend Restrictive Covenant Agreement to permit the Employee to serve in the Permitted Monarch Positions, as set forth in this Amendment.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.             Permitted Activities During Term of Employment.  The Company hereby consents and agrees that, for so long as the Employee is employed by the Company (whether pursuant to that certain Second Amended and Restated Employment Agreement dated as of January 18, 2013, as may be hereafter amended, or otherwise), the Employee shall be permitted to serve in the Permitted Monarch Positions; provided, however, that the foregoing consent and agreement shall terminate upon the termination of the Employee’s employment with the Company for any reason.

2.             Effect of Amendment.  Except as expressly set forth in this Amendment, the provisions of the Restrictive Covenant Agreement shall be unmodified and remain in full force and effect.

3.             Third-Party Beneficiary.  The parties agree that the Monarch Entities shall be third-party beneficiaries of the provisions of this Amendment.

 

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4.             Injunction.  It is recognized and hereby acknowledged by the parties hereto that a breach by the Employee of the covenants set forth in this Amendment will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain.  As a result, the Employee recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent jurisdiction enjoining and restraining any violation of the covenants contained in this Amendment by the Employee or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess.

5.             Entire Agreement; Conflict with Restrictive Covenant Agreement.  This Amendment and the Restrictive Covenant Agreement constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all prior negotiations, letters and understandings relating to the subject matter hereof.  If any provision of this Amendment and the Restrictive Covenant Agreement shall conflict, the terms of this Amendment shall control.

6.             Amendment.  This Amendment may not be amended, supplemented or modified in whole or in part except by an instrument in writing signed by the party or parties against whom enforcement of any such amendment, supplement or modification is sought.

7.             Choice of Law.  This Amendment will be interpreted, construed and enforced in accordance with the laws of the State of Florida, without giving effect to the application of the principles pertaining to conflicts of laws.

8.             Effect of Waiver.  The failure of any party at any time or times to require performance of any provision of this Amendment will in no manner affect the right to enforce the same.  The waiver by any party of any breach of any provision of this Amendment will not be construed to be a waiver by any such party of any succeeding breach of that provision or a waiver by such party of any breach of any other provision.

9.             Severability.  The invalidity, illegality or unenforceability of any provision of this Amendment will not affect any other provision of this Amendment, which will remain in full force and effect, nor will the invalidity, illegality or unenforceability of a portion of any provision of this Amendment affect the balance of such provision.  In the event that any provision of this Amendment shall for any reason be held to be invalid, illegal or unenforceable in any respect, the parties agree that this Amendment shall be modified, reformed, construed and enforced so that such invalid, illegal or unenforceable provision is enforceable and comes closest to expressing the intention of the unenforceable provision.

10.           Enforcement.  Should it become necessary for any party to institute legal action to enforce the terms and conditions of this Amendment, the successful party will be awarded reasonable attorneys’ fees at all trial and appellate levels, expenses and costs.  Any suit, action or proceeding with respect to this Amendment shall be brought in the courts of Broward County in the State of Florida or in the U.S. District Court for the Southern District of Florida.  Each party hereto consents to service of process by any means authorized by the applicable law of such forum and each party irrevocably waives, to the fullest extent each may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

Venue for any such action, in addition to any other venue permitted by statute, will be Broward County, Florida.  The parties hereto hereby irrevocably waive, to the fullest extent permitted by law, any objection that any of them may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Amendment or any judgment entered by any court in respect thereof brought in Broward County, Florida, and hereby further irrevocably waive any claim that any suit, action or proceeding brought in Broward County, Florida, has been brought in an inconvenient forum.

 

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11.           Assignment; Binding Effect.  This Amendment may not be assigned by Employee.  This Amendment may be assigned by the Company, in whole or in part, without the consent of Employee.  This Amendment shall be binding upon and inure to the benefit of the parties, their heirs, personal representatives, successors and permitted assigns.

12.          Counterparts.  This Amendment may be executed in one or more counterparts, including by facsimile or other electronic transmission, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

13.           Notice.  Any notice required or permitted to be delivered hereunder shall be deemed to be delivered when sent by facsimile with receipt confirmed or when deposited in the United States mail, postage prepaid, registered or certified mail, return receipt requested, or by overnight courier, addressed to the Employee at 11857 NW 12 Drive, Coral Springs, FL 33071 and to the Company at 14050 N.W. 14th Street, Suite 180, Sunrise, FL  33323, or to such other address as either party hereto shall from time to time designate to the other party by notice in writing as provided herein.

14.           Voluntary Execution.  Employee acknowledges that he has read and understands this Amendment, has had an opportunity to consult with an attorney, and signs this Amendment voluntarily, without coercion, based upon his own judgment and not in reliance upon any representations or promises other than those set forth herein.

[SIGNATURES ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, this Amendment has been duly signed by the parties hereto effective as of the day and year first above written.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
FEDERATED NATIONAL HOLDING COMPANY

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	 /s/ Michael H. Braun	
 

	
 

	
Name:

	Michael H. Braun	
 

	
 

	
Title:

	
Chief Executive Officer and President

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
EMPLOYEE

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
/s/ Peter J. Prygelski, III

	
 

	 	
Peter J. Prygelski, III

	

 

 

4Exhibit 10.6

 

SECOND AMENDMENT TO

INSURANCE AGENCY MASTER AGREEMENT

THIS SECOND AMENDMENT TO THE INSURANCE AGENCY MASTER AGREEMENT (this “Second Amendment”) is effective the 1st day of January, 2015, by and between Federated National Underwriters, Inc., a Florida corporation (“COMPANY”), and Ivantage Select Agency, Inc. (“ISA”), an Illinois insurance company (singularly “Party” and collectively the “Parties”).

RECITALS

WHEREAS, COMPANY and ISA entered into an Insurance Agency Master Agreement, dated as of February 4, 2013 (“the Agreement”);

WHEREAS, pursuant to Section 20, the Agreement may be amended or modified in writing as agreed to and signed by authorized representatives of both Parties; and

WHEREAS, COMPANY and ISA desire to amend the Agreement as more particularly described herein.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration and for the mutual covenants set forth below, the Parties hereto, intending legally to be bound, hereby agree as follows:

		1.	COMPANY and ISA agree to replace the First Revised Schedule A of the Agreement with Second Revised Schedule A, attached hereto and made a part of the Agreement. COMPANY and ISA further agree that Second Revised Schedule A supersedes First Revised Schedule A.

		2.	Capitalized terms used but not otherwise defined herein shall have the respective meaning ascribed to them in the Agreement.

		3.	Unless expressly modified by this Second Amendment, the terms and conditions of the Agreement remain unchanged and in full force and effect.

		4.	This Second Amendment may be signed in multiple counterparts, which together shall constitute a single instrument.

IN WITNESS WHEREOF, the Parties hereto have executed this Second Amendment as of the day and year first set forth above.

Accepted by:

	
FEDERATED NATIONAL

	 	
IVANTAGE SELECT AGENCY, INC.

	
UNDERWRITERS, INC.

	 	 	 
	 	 	 	 	 
	
By:

	
/s/ J.G. Jennings

	 	
By:

	
/s/ William B. Burst, III

	
Name:

	
J.G. Jennings

	 	
Name:

	
 William B. Burst, III

	
Title:

	
President

	 	
Title:

	
Vice President Ivantage

	
Date:

	
3/10/15

	 	
Date:

	
3/12/15

 

Second Revised Schedule A

This Schedule is effective the 1st day of January, 2015, by and between Federated National Underwriters, Inc. (“COMPANY”), and Ivantage Select Agency, Inc., (“ISA”) pursuant to Section 3 of that certain Insurance Agency Master Agreement dated February 4, 2013, between COMPANY and ISA (“Agreement”). This Schedule is attached to and subject to the terms and conditions of that Agreement and contains the following terms and conditions.

Coverage

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

Commissions

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

3% of new business premium and 3% of renewal business premium on Homeowners, Dwelling Fire, Condominium, Renters policies written pursuant to this Schedule.

3% of new business premium and 3% of renewal business premium on Commercial General Liability policies written pursuant to this Agreement.

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

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

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

Payments and any necessary adjustments will be made on the 10th business day of each month for the preceding month’s business. All payments to ISA will be remitted via electronic funds transfer.

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

Territory

The state of Florida.

 

Bonus

In addition to the Commission, as of the date of this Schedule and all subsequent years, COMPANY shall pay ISA a bonus of an additional 1% of new business written premium (net of endorsements, cancellations, reinstatements, and any mandatory additional fees) on new business in excess of $5,000,000 per calendar quarter. The bonus shall be paid in one lump sum on all new business written which qualifies under this section during each calendar quarter.

If applicable, each quarter’s payment shall be made on the 10th business day of the month for the preceding quarter. All payments to ISA will be remitted via electronic funds transfer.

Preservation of Business Written

Notwithstanding any provision in the Agreement to the contrary, during the term of the Agreement, ISA shall not initiate nor perform a wholesale transfer of business written pursuant to this Agreement to another carrier, including Allstate Insurance Company or Castle Key Insurance Company, or any affiliate thereof. This provision shall not be violated by: a policyholder initiated request to change insurance carriers, or policy movement to another carrier by individual Producers except if such policy movement is requested by ISA. Further, ISA shall be under no obligation to comply with the obligations contained in this provision if: Allstate Insurance Company or Castle Key Insurance Company are ordered to write new business in the State of Florida by regulatory mandate; Carrier’s rating falls below at least an “A” rating from Demotech FSR; COMPANY or Carrier lose any necessary licenses to transact business; enforcement actions or sanctions are initiated against COMPANY or Carrier; COMPANY repeatedly fails to meet the Service Level Objectives contained in Exhibit D of the Agreement; or a transaction involving (a) a sale or merger of COMPANY or Federated National Holding Company (“FNHC”) in which COMPANY or FNHC, as applicable, is not the surviving company in such sale or merger; (b) a change in ownership of more than 50% of the outstanding voting stock of COMPANY or FNHC, as applicable, or (c) an assignment by COMPANY, in whole or in part, directly, indirectly, or contingently, of this Agreement or any rights or obligations under it whether by operation of law or otherwise, is consummated.

Termination

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

Accepted by:

	
FEDERATED NATIONAL

	 	
IVANTAGE SELECT AGENCY, INC.

	
UNDERWRITERS, INC.

	 	 	 
	 	 	 	 	 
	
By:

	
/s/ J.G. Jennings

	 	
By:

	
/s/ William B. Burst, III

	
Name:

	
J.G. Jennings

	 	
Name:

	
William B. Burst, III

	
Title:

	
President

	 	
Title:

	
Vice President Ivantage

	
Date:

	
3/10/15

	 	
Date:

	
3/12/15

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