Document:

Exhibit
10.11

 

FIRST AMENDMENT TO CREDIT
AGREEMENT

 

FIRST AMENDMENT TO CREDIT
AGREEMENT (this “Amendment”), dated as of July 31, 1999, among BRW
ACQUISITION, INC., a Delaware corporation (the “Borrower”), the various lenders
from time to time party to the Credit Agreement referred to below (the
“Lenders”), THE CHASE MANHATTAN BANK, as Administrative Agent (the
“Administrative Agent”) and THE BANK OF NEW YORK, as Syndication Agent (the
“Syndication Agent”).  All capitalized
terms used herein and not otherwise defined shall have the respective meanings
assigned to such terms in the Credit Agreement.

 

W  I
T  N  E  S  S  E  T  H:

 

WHEREAS, the Borrower,
the Lenders, the Administrative Agent and the Syndication Agent are parties to
a Credit Agreement, dated as of July 10, 1998 (as amended, modified or
supplemented to the date hereof, the “Credit Agreement”);

 

WHEREAS, the Borrower has
requested that the Lenders agree to amend certain provisions of the Credit
Agreement as herein provided; and

 

WHEREAS, the Lenders have
agreed to the amendments to the Credit Agreement as herein provided, subject to
the terms and conditions set forth herein;

 

NOW, THEREFORE, the
parties hereto agree as follows:

 

I.                                         Amendments

 

1.                                       Section 1 of the Credit Agreement is
hereby amended by:

 

(i) deleting the
definition of “Cash Flow” in its entirety and inserting in lieu thereof the
following new definition of “Cash Flow”:

 

“Cash
Flow” shall mean, for any Test Period, the sum, without duplication, of (a)
the greater of (i) Combined Statutory Pre-Tax Earnings for all Regulated
Insurance Companies for such Test Period and (ii) the sum of 10% of Adjusted
Surplus as of the last day of the fiscal year most recently ended prior to the
end of such Test Period plus all tax sharing payments made by Regulated
Insurance Companies to the Borrower during such Test Period and (b) Adjusted
EBITDA for such Test Period.

 

(ii) deleting the
definition of “Statutory Pre-Tax Earnings” in its entirety and inserting in
lieu thereof the following new definition of “Statutory Pre-Tax Earnings”:

 

“Statutory
Pre-Tax Earnings” shall mean, for any period, for any Regulated Insurance
Company, net income determined in accordance with SAP plus (a) to the
extent deducted in determining such net income and without

 

 

duplication, the sum of the amounts for such period of (i)
provision for taxes (including, without limitation, payments under tax sharing
agreements), adjusted to reflect on a pro forma basis termination of the
Acquired Companies’ existing quota share reinsurance on a cut-off basis, as if
such termination had occurred prior to such period, (ii) interest expense,
(iii) depreciation expense, (iv) amortization expense, including amortization
of deferred financing fees, (v) non-recurring charges, (vi) non-cash charges,
(vii) losses on asset sales, (viii) restructuring charges, (ix) Transaction
Expenses, (x) any expenses or charges incurred in connection with any issuance
of debt or equity securities, (xi) any fees and expenses related to Permitted
Acquisitions and (xii) any deduction for minority interest expense, less
(b) to the extent included in determining such net income and without
duplication, the sum of the amounts for such period of (i) non-recurring gains,
(ii) non-cash gains and (iii) gains on asset sales, all as determined on a
Combined basis for the Regulated Insurance Companies in accordance with SAP, provided
that (i) except as provided in clause (ii) below, there shall be excluded from
the amounts determined above for any period the earnings or net income of all Unrestricted
Subsidiaries for such period to the extent otherwise included in such amount,
except to the extent actually received in cash by the Borrower or its
Restricted Subsidiaries during such period through dividends or other
distributions, and (ii) there shall be included in determining Statutory
Pre-Tax Earnings for any period (x) the Acquired Cash Flow of any Person,
property, business or asset (other than an Unrestricted Subsidiary) acquired to
the extent not subsequently sold, transferred or otherwise disposed of (but not
including the Acquired Cash Flow of any related Person, property, business or
assets to the extent not so acquired) by the Borrower or any Restricted
Subsidiary during such period (each such Person, property, business or asset acquired
and not subsequently so disposed of, an “Acquired Entity or Business”),
and the Acquired Cash Flow of an Unrestricted Subsidiary that is converted into
a Restricted Subsidiary during such period (each a “Converted Restricted
Subsidiary”), in each case based on the actual Acquired Cash Flow of such
Acquired Entity or Business or Converted Restricted Subsidiary for such period
(including the portion thereof occurring prior to such acquisition or
conversion) and (y) an adjustment with respect of each Acquired Entity or
Business equal to the amount of the Pro Forma Adjustment with respect to such
Acquired Entity or Business for such period (including the portion thereof
occurring prior to such acquisition or conversion) as specified in the Pro
Forma Adjustment Certificate delivered to the Lenders and the Administrative
Agent.

 

(iii) inserting the
following new definitions in appropriate alphabetical order:

 

“Acquired Surplus”
shall mean, with respect to any Acquired Entity or Business or Converted
Restricted Subsidiary (any of the foregoing, a “Pro Forma Entity”), at
any time, the Surplus of such Pro Forma Entity at such time (determined as if
such Pro Forma Entity was a Regulated Insurance Company at such time).

 

2

 

“Adjusted
EBITDA” shall mean, for any period, the consolidated net income from
continuing operations before income taxes and extraordinary items of the
Borrower and its Restricted Subsidiaries (excluding net income (or loss) before
taxes and extraordinary items of the Regulated Insurance Subsidiaries) for such
period, all determined in accordance with GAAP,  plus (a) to the extent deducted in determining such net
income, and without duplication, the sum of the amounts for such period of (i)
interest expense, (ii) depreciation expense, (iii) amortization expense,
including amortization of deferred financing fees, (iv) non-recurring charges,
(v) non-cash charges, (vi) losses on asset sales, (vii) restructuring charges,
(viii) Transaction Expenses, (ix) any expenses or charges incurred in
connection with any issuance of debt or equity securities, (x) any fees and
expenses related to Permitted Acquisitions and (xi) any deduction for minority
interest expense, less (b) to the extent included in determining such
net income and without duplication, the sum of the amounts for such period of
(i) non-recurring gains, (ii) non-cash gains and (iii) gains on asset sales,
all as determined on a consolidated basis for the Borrower and the Unregulated
Subsidiaries in accordance with GAAP, provided that (i) except as
provided in clause (ii) below, there shall be excluded from Adjusted EBITDA the
earnings or net income of all Unrestricted Subsidiaries for such period to the
extent otherwise included in such amount, except to the extent actually
received in cash by the Borrower or its Restricted Subsidiaries during such
period through dividends or other distributions and (ii) there shall be
included in determining Adjusted EBITDA for any period (x) the Acquired Cash Flow
of any Person, property, business or asset (other than an Unrestricted
Subsidiary) acquired to the extent not subsequently sold, transferred or
otherwise disposed of (but not including the Acquired Cash Flow of any related
Person, property, business or assets to the extent not so acquired) by the
Borrower or any Restricted Subsidiary during such period (each such Person,
property, business or asset acquired and not subsequently so disposed of, an “Acquired
Entity or Business”), and the Acquired Cash Flow of an Unrestricted
Subsidiary that is converted into a Restricted Subsidiary during such period
(each a “Converted Restricted Subsidiary”), in each case based on the actual
Acquired Cash Flow of such Acquired Entity or Business or Converted Restricted
Subsidiary for such period (including the portion thereof occurring prior to
such acquisition or conversion) and (y) an adjustment with respect of each
Acquired Entity or Business equal to the amount of the Pro Forma Adjustment
with respect to such Acquired Entity or Business for such period (including the
portion thereof occurring prior to such acquisition or conversion) as specified
in the Pro Forma Adjustment Certificate delivered to the Lenders and the
Administrative Agent.

 

“Adjusted
Surplus” shall mean, at any time, Surplus at such time, provided
that (i) except as provided in clause (ii) below, there shall be excluded from
Adjusted Surplus the Surplus of all Unrestricted Subsidiaries to the extent
otherwise included in such amount, and (ii) there shall be included in
determining Adjusted Surplus at any time the Acquired Surplus of any Person,
property,

 

3

 

business or asset (other than an Unrestricted Subsidiary)
acquired to the extent not subsequently sold, transferred or otherwise disposed
of (but not including the Acquired Surplus of any related Person, property,
business or assets to the extent not so acquired) by the Borrower or any
Restricted Subsidiary during such period (each such Person, property, business
or asset acquired and not subsequently so disposed of, an “Acquired Entity
or Business”), and the Acquired Surplus of an Unrestricted Subsidiary that
is converted into a Restricted Subsidiary during such period (each a “Converted
Restricted Subsidiary”), in each case based on the actual Acquired Surplus of
such Acquired Entity or Business or Converted Restricted Subsidiary as of the
relevant date.

 

2.                                       Section 10.9 of the Credit Agreement is
hereby amended by deleting the table appearing therein in its entirety and
inserting in lieu thereof the following new table:

 

	
  Test Period Ending

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 1998

  	
   

  	
  2.00:1.00

  	
   

  
	
  December 31, 1998

  	
   

  	
  2.00:1.00

  	
   

  
	
  March 31, 1999

  	
   

  	
  2.00:1.00

  	
   

  
	
  June 30, 1999

  	
   

  	
  2.00:1.00

  	
   

  
	
  September 30, 1999

  	
   

  	
  1.75:1.00

  	
   

  
	
  December 31, 1999

  	
   

  	
  1.75:1.00

  	
   

  
	
  March 31, 2000

  	
   

  	
  1.75:1.00

  	
   

  
	
  June 30, 2000

  	
   

  	
  1.75:1.00

  	
   

  
	
  September 30, 2000

  	
   

  	
  2.00:1.00

  	
   

  
	
  December 31, 2000

  	
   

  	
  2.00:1.00

  	
   

  
	
  March 31, 2001

  	
   

  	
  2.25:1.00

  	
   

  
	
  June 30, 2001

  	
   

  	
  2.25:1.00

  	
   

  
	
  September 30, 2001

  	
   

  	
  2.50:1.00

  	
   

  
	
  December 31, 2001

  	
   

  	
  2.75:1.00

  	
   

  
	
  March 31, 2002

  	
   

  	
  2.75:1.00

  	
   

  
	
  June 30, 2002

  	
   

  	
  3.00:1.00

  	
   

  
	
  September 30, 2002

  	
   

  	
  3.00:1.00

  	
   

  
	
  December 31, 2002

  	
   

  	
  3.25:1.00

  	
   

  
	
  Thereafter

  	
   

  	
  3.75:1.00

  	
   

  

 

II.                               Miscellaneous

 

1.                                       In order to induce the Lenders to enter
into this Amendment, the Borrower hereby represents and warrants that (x) all
representations and warranties contained in Section 8 of the Credit Agreement
are true and correct in all material respects on and as of the First Amendment
Effective Date (as defined below) after giving effect to this Amendment (unless
such representations and warranties relate to a specific earlier date, in which
case such representations and warranties shall be true and correct as of such
earlier date) and (y) there exists no Default or Event of Default on the First
Amendment Effective Date, after giving effect to this Amendment.

 

4

 

2.                                       This Amendment is limited as specified
and shall not constitute a modification, acceptance or waiver of any provision
of the Credit Agreement or any other Credit Document except as expressly set
forth herein.

 

3.                                       This Amendment may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which counterparts when executed and delivered shall be
an original, but all of which shall together constitute one and the same
instrument.  A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.

 

4.                                      THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.

 

5.                                       This Amendment shall become effective as
of the date hereof on the date (the “First Amendment Effective Date”) when each
of the Borrower and the Required Lenders shall have signed a counterpart hereof
(whether the same or different counterparts) and shall have delivered
(including by way of facsimile transmission) the same to the Administrative
Agent at its notice office.

 

6.                                       From and after the First Amendment
Effective Date, all references in the Credit Agreement and each of the Credit
Documents to the Credit Agreement shall be deemed to be references to the
Credit Agreement after giving effect to this Amendment.

 

*   *   *

 

5

 

IN WITNESS WHEREOF, the
parties hereto have caused a counterpart of this Amendment to be duly executed
and delivered as of the date first above written.

 

 

	
   

  	
  BRW ACQUISITION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Randy Sutton

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE CHASE
  MANHATTAN BANK,

  individually and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Helen L. Newcomb

  	
   

  
	
   

  	
   

  	
  Name: Helen L. Newcomb

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW
  YORK,

  individually and as Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Benjamin Ballard

  	
   

  
	
   

  	
   

  	
  Name: Benjamin Ballard

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  

6

 

	
   

  	
  BANKBOSTON, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT LYONNAIS NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/  W.
  Michael George

  	
   

  
	
   

  	
   

  	
  Name:  W.
  Michael George

  
	
   

  	
   

  	
  Title:   
  First Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIRST UNION NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/  Thomas
  L. Stitchberry

  	
   

  
	
   

  	
   

  	
  Name:  Thomas
  L. Stitchberry

  
	
   

  	
   

  	
  Title:   
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FLEET NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMMERZBANK
  AKTIENGESELLSCHAFT

  NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/  Edward
  J. McDonnell III

  	
   

  
	
   

  	
   

  	
  Name:  
  Edward J. McDonnell III, C.F.A.

  
	
   

  	
   

  	
  Title:    
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/  William
  M. Earley

  	
   

  
	
   

  	
   

  	
  Name: 
  William M. Earley

  
	
   

  	
   

  	
  Title:    
  Senior Vice President

  

 

7

 

	
   

  	
  THE FIRST
  NATIONAL BANK OF

  CHICAGO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/  Cynthia
  W. Priest

  	
   

  
	
   

  	
   

  	
  Name: 
  Cynthia W. Priest

  
	
   

  	
   

  	
  Title:   
  First Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/  Robert
  Hetu

  	
   

  
	
   

  	
   

  	
  Name:  Robert
  Hetu

  
	
   

  	
   

  	
  Title:   
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/  Joe
  Glodowski

  	
   

  
	
   

  	
   

  	
  Name:  Joe
  Glodowski

  
	
   

  	
   

  	
  Title:   
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MELLON BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/  A.M.
  Whitwood

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VAN KAMPEN
  AMERICAN CAPITAL

  PRIME INCOME TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

8Exhibit 10.12

 

	
   

  	
  

  	
  BRISTOL WEST

  
	
  INSURANCE GROUP

  

 

CALIFORNIA

 

Producer’s
Agreement

 

This agreement made this
                  
day of
                              ,
                     
by and between Bristol West Insurance Services of California, Inc. (“Bristol”)
and
                                                                      
a retail insurance brokerage, (“Producer”).

 

I.                                         PRODUCER’S
AUTHORITY

 

A.                                   Producer is an
independent contractor who will exercise its own judgment in the conduct of its
business.  Producer is not an employee
of Bristol and is free to represent such other companies as Producer shall
consider appropriate.  Producer has
exclusive control of its time and of the conduct of its business and is
responsible for all expenses incurred in the operation of its business.   Producer agrees to be bound by all
underwriting guidelines, rate guides, rules, regulations, commission schedules,
procedures and other written policies or instructions provided to Producer by
Bristol (“Bristol’s Underwriting Guidelines”).

 

B.                                     Producer has no
authority hereunder to bind insurance risks, only to submit applications for
such risks. No coverage shall be in effect on any such application unless
specific binding authority is given Producer by written addendum to this
Agreement.  Any specific binding
authority given to Producer shall be subject to the terms of Bristol’s
Underwriting Guidelines.

 

C.                                     During the term of
this Agreement, Producer is authorized on behalf of Bristol:

 

1.                                       To solicit,
receive and submit applications for classes of insurance that Bristol may make
available subject to Bristol’s Underwriting Guidelines.

 

2.                                       To deliver
policies, certificates, endorsements and binders.

 

3.                                       To collect and
receipt for premiums but Producer may not endorse any check made payable to
Bristol.

 

D.                                    Producer agrees
that all supplies furnished to Producer by Bristol shall remain the property of
Bristol and shall be returned upon request. Producer agrees to promptly install
all update disks supplied by Bristol and that said disks are the property of
Bristol and will be returned upon demand.

 

1

 

E.                                      Producer hereby
grants to Bristol access and review of Producer’s books, records and files
during normal business hours, for the purpose of determining any fact relating
to money due Bristol or any other fact relating to business placed with Bristol
by Producer.

 

F.                                      Producer shall
not publish or distribute any advertisements, circulars or other materials
referring to Bristol or containing Bristol’s name without first securing
written approval from Bristol.

 

II.                                     UNDERWRITING
CONTROL OF THE COMPANY

 

Bristol
reserves the right to refuse any policy at any time or to cancel any policy
subject to the provisions of Section V.

 

III.                                 COMMISSIONS

 

A.                                   Commissions will be
paid as outlined in Addendum #2, attached. 
Commission schedules may be revised by mutual agreement of Producer and
Bristol or by Bristol giving Producer at least 30 days advance notice of the proposed
revisions and the effective date.  
Producer acknowledges such right to amend and waives any longer notice
period that may be available under applicable statutes, rules or regulations.

 

B.                                     Producer agrees
that undistributed commissions in the hands of Bristol at any time may be
offset against any monies due Bristol.

 

C.                                     In the event that
Bristol shall either during the term of this Agreement or after its termination
refund premiums under any policy by reason of cancellation or otherwise, the
Producer shall immediately return to Bristol the commission received on the
premium refund.

 

IV.                                 BILLING
PROCEDURES

 

Producer shall submit promptly to Bristol all
applications for policies and remit the gross premiums (without deduction of
commissions) for or payable on such policies, in accordance with the provisions
of Bristol’s Underwriting Guidelines. 
Producer shall be responsible for remitting all collected premiums to
Bristol.  If Producer fails to remit
premiums or unearned commissions or any other amount due Bristol, Producer agrees
to pay the reasonable costs of collection, including attorney fees.

 

2

 

V.                                     POLICY
CANCELLATIONS

 

Any Policy may
be cancelled by Bristol, subject to any limitation or restrictions contained
within the policy.  A policy may be
cancelled by Bristol in accordance with all statutory and regulatory
provisions.

 

VI.                                 INDEMNIFICATION
OF PRODUCER

 

A.                                   Bristol shall
indemnify and hold Producer harmless:

 

1.               Against
any claims, liabilities or costs of defense which Producer may become obligated
to pay as a result of loss to policyholders caused by an error of Bristol in
the processing of policies under this Agreement unless Producer has caused,
contributed to or compounded such error.

 

2.               Against any and all civil liability for
damages and expenses, including the cost of defense, that Producer may be
obligated to pay as a direct result of the failure of Bristol to comply with
the requirements of the Fair Credit Reporting Act, Federal Truth in Lending Law
and Fair Credit Billing Act, unless such failure to comply has been caused or
contributed to by any act or omission of Producer.

 

B.                                     Bristol’s
obligation to indemnify shall be conditioned upon prompt notification by
Producer to Bristol of any claim made or legal action brought against Producer
which is subject to indemnification as set forth above and Bristol shall have
the right to direct the investigation, settlement and defense of any such claim
or action.  Bristol shall not be obligated
to indemnify Producer to the extent the Producer has valid and collectable
insurance applicable to any damage or liability.

 

VII.                             INDEMNIFICATION
OF BRISTOL

 

Producer agrees to
fully indemnify and hold harmless Bristol, its successors and assigns from any
and all judgments, losses, damages, costs and expenses, including attorney’s
fees which Bristol may at any time sustain because of the failure of Producer
to comply fully with the terms, provisions and obligations of this Agreement,
including, but not limited to the payment to Bristol of all sums of money which
may become due Bristol from Producer thereunder and any agreement to indemnify
Bristol.

 

This Agreement
to indemnify and hold Bristol harmless shall include the reasonable attorney’s
fees and related expenses incurred to prosecute or defend any lawsuit,
administrative proceeding or arbitration; shall extend to any claim or
assertion that Producer breached or waived any provision of any policy,
endorsement or application; and shall include any claims or assertions of bad
faith, breach of covenant of

 

3

 

fair dealing,
unfair claims or insurance practices, deceptive trade practices,
extracontractual or exemplary damages arising wholly, or in part, from the
action or inaction of Producer.

 

VIII.                         TERMINATION
AND AMENDMENT

 

A.                                   The agreement shall
terminate:

 

1.                                       Automatically if
any public authority cancels or declines renewal of Producer’s license or
Certificate of Authority.

 

2.                                       Automatically on
the effective date of sale, transfer, assignment or merger of Producer’s
business provided, however, that Bristol, at its option, may offer a Producer’s
Agreement to any successor who meets the Company’s requirements for
appointment.

 

3.                                       Upon either
party giving at least thirty (30) days advance written notice to the
other.  The Producer acknowledges
Bristol’s right to terminate and waives any longer notice period which may be
available under applicable statues, rules or regulations.

 

4.                                       Immediately upon
either party giving written notice to the other in the event of abandonment,
fraud, insolvency, or gross and willful misconduct on the part of such party.

 

B.                                     If this Agreement
is terminated as provided in Sub-Section A, above;

 

1.                                       The Producer’s
authority to solicit, bind or execute contracts of insurance for new business
will cease at the same time notice of termination of this Agreement is given.

 

2.                                       All provisions
of this agreement shall remain in full force and effect including Section III,
Commissions, except that the Producer agrees that after termination or
cancellation, Bristol will pay a commission equal to the commission rate paid
to active producers of equal size based on written premium volume, net of
cancellations, with Bristol West during the previous twelve (12) months;
However, in no event will Bristol pay a Producer a commission of more than 15%
for new or renewal business.  Producer
agrees that any bonus or commission paid on fees will not be applicable and
Producer will not have any entitlement to any bonus or commission on fees.  These provisions will be in full force and
effect for a period of three (3) years from the date of termination or
cancellation.  After the three (3) years
have passed, California Insurance Code Section 769 shall apply.

 

3.                                       Bristol shall
continue to provide to the policyholders all normal and appropriate services on
all in force insurance contracts without interruption until said contracts may
lawfully be terminated.

 

4

 

C.                                     Bristol may amend
this Agreement, including any addendum attached hereto, upon thirty (30) days
prior written notice to Producer. 
Producer acknowledges such right to amend and waives any longer notice
period which may be available under applicable statutes, rules or regulations.

 

IX.                                GENERAL
PROVISIONS

 

A.                                   Producer agrees to
purchase and maintain a policy of errors and omissions insurance in limits no
less than $500,000 with an insurance carrier which is rated no less than “B” by
A.M. Best.  Producer will provide Bristol
with a copy of the declarations page for said policy, and provide a copy of the
declarations page upon each renewal of said policy.  Producer agrees that failure on the part of Producer to maintain
said errors and omissions policy will be grounds for immediate termination of
this contract.

 

B.                                     Should a conflict
exist as to which producer is authorized to represent an insured with respect
to any insurance policy, Producer shall supply Bristol with a written Agent of
Record Letter from the insured.

 

C.                                     Producer shall
have no authority to admit liability or compromise claims or accept proof of
loss on the part of Bristol in any manner except in accordance with specific
claim settlement authority extended to the Producer in writing.

 

D.                                    Producer agrees to
comply with all laws affecting its operation and to maintain its qualifications
for licensing by appropriate authorities. 
Producer shall provide a copy of its license to Bristol at each renewal.

 

E.                                      If any provision
of this Agreement should be invalid the remainder of this Agreement shall not
be affected.

 

F.                                      If Producer
attempts to assign this Agreement in violation of Section VIII, Producer
remains liable to Bristol for all obligations to Bristol arising before and
after the attempted assignment. 
Moreover, Producer shall remain liable to Bristol for all obligations to
Bristol arising before a permitted assignment,

 

5

 

unless Bristol has
consented, in a written agreement, to the assumption of any obligation of
Producer to Bristol by an assignee.

 

In connection with your
application for a Producer’s Agreement (1) an investigation may be made
including, if applicable, information as to character, occupation, general
reputation, personal habits, health, financial condition, mode of living, and
(2) additional information as to the nature and scope of investigation request
will be furnished you, upon your written request made within a reasonable time
after you receive this notice.

 

In witness whereof, Producer
and Bristol have caused this Agreement to be executed this
             day of
                     ,
20      .

 

 

	
  PRODUCER

  	
   

  	
  BRISTOL WEST
  INSURANCE SERVICES OF

  CALIFORNIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  	
  Witness: 

  	
   

  	
   

  
											

 

6

 

ADDENDUM #1 – BINDING

 

 

Bristol recognizes current
conditions in the private passenger automobile insurance marketplace such that
the Producer will lose business unless Producer can provide bound coverage to
clients at the point of sale. 
Therefore, with respect to personal automobile insurance only, Bristol
agrees to accept and be bound with respect to business placed with it by
Producer through use of such current, up-to-date electronic rating device as
agreed in writing in advance by the parties (the “Rating Mechanism”).  Producer agrees to abide by all rules and
operating instructions of the Rating Mechanism.  Within 72 hours after binding any private passenger automobile
coverage, Producer shall forward to Bristol the properly completed application
and other required documentation. 
Bristol shall have the right to reject any such application that is
inconsistent with Bristol’s Underwriting Guidelines.  Nothing in this section shall create any agency relationship
whatsoever between Producer and Bristol or between Producer and any insurance
company Bristol represents.

 

 

	
  BRISTOL WEST
  INSURANCES SERVICES OF

  CALIFORNIA, INC.

  	
  PRODUCER

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  	
  Witness: 

  	
   

  	
   

  
										

 

7

 

ADDENDUM #2 – COMMISSION AND
BONUS PLAN

 

 

I.                                         Increased
commission on New business will be paid based on the following premium
production and loss ratio schedule:

 

A.           Excess of $5M written during the preceding 12
months will receive 15.5% commission on all new business in the current month.

B.             Excess of $7.5M written during the
preceding 12 months will receive 16% commission on all new business in the
current month.

C.             Excess of $10 M written during the
preceding 12 months will receive 16.5% commission on all new business in the
current month.

D.            Excess of $20M written during the preceding
12 months will receive 17% commission on all new business in the current month.

E.              Excess of $30M written during the
preceding 12 months will receive 17.5% commission on all new business in the
current month.

 

II.                                     All written
business is the total of new and renewal net of cancellations and requires
a loss ratio of 63% or lower during the preceding twelve-month period.

 

8

 

Agency Commission
Schedule & Incentives

 

 

III.                                 Business Covered.  The lines of business covered by this
agreement are: PRIVATE PASSENGER AUTO.

 

IV.                                 Eligibility for
the program for a calendar year is based upon the following:

 

A.           The Agency must produce at least $500,001 in
written premium to qualify for incentives.

B.             The Agency must be an active producer with
the company during the year in which this contract is predicated upon.

C.             The Agency must have written premiums of
at least 90% of the prior year’s premiums with our company.

 

V.                                     Basis.  Company calendar year records will be the
sole basis for determining awards.  The
company will evaluate year-end financials on or before January 31 following the
end of the calendar year covered.

 

VI.                                 Award Determination.  Once the Agency satisfies the eligibility
requirements, the award will be calculated as follows:

 

A.           Determine the total written premium for the
period for the lines of business covered.

B.             Determine growth incentive award subject
to definition stated below in Section VII.

C.             Calculate the loss ratio according to the
definition listed below in Section VII.

D.            Find the percentage from the table below:

 

	
   

  	
   

  	
   

  	
   

  	
  Agency
  Performance Incentive

  	
   

  
	
  Written Premium

  	
   

  	
  Base commissions

  	
   

  	
  Growth

  	
   

  	
  L/R

  	
   

  	
  Total Possible

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  0 – 150,000

  	
   

  	
  13.0

  	
   

  	
  . 00

  	
   

  	
  .00

  	
   

  	
  .00

  	
   

  
	
  150,001 – 300,000

  	
   

  	
  15.0

  	
   

  	
  .00

  	
   

  	
  .00

  	
   

  	
  .00

  	
   

  
	
  300,001 – 500,000

  	
   

  	
  15.0

  	
   

  	
  .00

  	
   

  	
  .00

  	
   

  	
  .00

  	
   

  
	
  500,001 – 1,000,000

  	
   

  	
  15.0

  	
   

  	
  1.00

  	
   

  	
  1.00

  	
   

  	
  17.00

  	
   

  
	
  1,000,001 – 2,000,000

  	
   

  	
  15.0

  	
   

  	
  1.00

  	
   

  	
  1.00

  	
   

  	
  17.00

  	
   

  
	
  2,000,001 – 5,000,000

  	
   

  	
  15.0

  	
   

  	
  1.00

  	
   

  	
  1.00

  	
   

  	
  17.00

  	
   

  
	
  5,000,001 – 20,000,000

  	
   

  	
  15.0

  	
   

  	
  1.00

  	
   

  	
  1.00

  	
   

  	
  17.00

  	
   

  
	
  20,000,001 +

  	
   

  	
  15.0

  	
   

  	
  1.00

  	
   

  	
  1.00

  	
   

  	
  17.00

  	
   

  

 

VII.                             Prima Business will
be written at a base commission rate of 13%. 
Prima business will be included in the Agency Performance Incentives.

 

VIII.                         Renewals. Renewal
commissions will match the new business commission percentage stated above.

 

IX.                                Definitions of
the terms used in this agreement:

 

Written Premium –
Premiums produced by the Agency for new and renewal business, plus or minus
premium changes from policy changes, cancellations, etc., effective during the
period covered for the lines of business included.  Assigned Fair Plan or other miscellaneous involuntary premiums
are not included.

 

Earned Premium –
Premiums earned, from those written, according to statutory accounting
principles.

 

9

 

Losses – Incurred
losses, less salvage and subrogation recoveries, plus those loss adjustment
expenses directly attributable to the losses.

 

Growth – Current
year-end new business application counts must be a minimum of a 15% increase
over prior year.  Overall book of
business must produce a loss ratio not greater than 65%.

 

Loss Ratio – Losses
divided by earned premium, expressed as a percentage.  The Agency must produce a loss ratio no greater than 55%.

 

X.                                    Payment.
Awards will be available by the end of the financial quarter immediately
following the period covered.

 

XI.                                Renewal or
Termination.  This agreement will
automatically renew as is.  However,
this agreement may be terminated or amended by the Company giving at least 60
days notice.  The agreement also
terminates upon the termination of the Agency-Company relationship and no
payment will be made thereafter

 

 

	
  BRISTOL WEST
  INSURANCES SERVICES OF

  CALIFORNIA, INC.

  	
  PRODUCER

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  	
  Witness: 

  	
   

  	
   

  
										

 

10

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