Document:

EXHIBIT 10.32

 

MANAGEMENT COMPANY CONTRACT

of

PINNACLE ASSURANCE CORPORATION,

AN ASSESSABLE MUTUAL

 

THIS AGREEMENT is made and entered into this 7th day of April, 1995, by
and between PINNACLE ASSURANCE CORPORATION, an Assessable Mutual, a Florida
corporation (“PINNACLE”) and FLORIDA ADMINISTRATORS, INC., a Florida
corporation, (“MANAGEMENT COMPANY”) and provides as follows:

 

W I T N E S S E T H:

 

WHEREAS, the Florida Air Conditioning Contractors Association Self
Insurance Fund (“FUND”) was established as a group self insurers fund, pursuant
to section 440.57, Florida Statutes, and is now operated as a group self
insurance fund pursuant to section 624.4621, Florida Statutes; and

 

WHEREAS, the Trustees of the FUND have voted to convert the FUND from a
group self insurance fund to an assessable mutual insurer, as is provided by section 628.6011,
Florida Statutes, which, upon approval shall be known as Pinnacle Assurance
Company, an assessable mutual; and

 

WHEREAS, PINNACLE has been granted permission to form a domestic
assessable mutual insurer and has applied to the Department of Insurance for
the issuance of a Certificate of Authority to operate as a domestic assessable
mutual insurer; and,

 

WHEREAS, PINNACLE has selected the MANAGEMENT COMPANY to provide services
in connection with the operations of PINNACLE; and

 

 

WHEREAS, it is the desire of the parties hereto that the functions,
duties, and responsibilities of the MANAGEMENT COMPANY and the compensation to
be paid to the MANAGEMENT COMPANY be set forth in a written agreement;

 

NOW THEREFORE, in consideration of the mutual covenants, conditions,
and agreements hereinafter set forth, and for other good and valuable
considerations, the receipt and sufficiency of which is hereby acknowledged the
parties hereto do hereby covenant and agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

As used in this agreement, the following terms shall have the following
meanings:

 

1.1           “Law” means
the Florida Statutes.

 

1.2           “Association”
means the Florida Tropical Fish Farmers Association, Inc.

 

1.3           “Claims”
means a request for payment to an injured party or his beneficiaries or to
others in connection therewith.

 

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1.4           “Costs and
Allocated Expenses Chargeable as Claims” means all costs and expenses for
adjusting, settling, defending and finally disposing of a claim, including
without limitation, disbursements for workers’ compensation appeals, loss
adjusting, rehabilitation, job placement and vocational training and
retraining, medical evaluation, nursing care, hearings before judges of
compensation claims or court costs, fees and expenses, all fees for service of
process, fees to attorneys, the cost employing expert witnesses, field
adjusters and investigators, the cost of all copies of transcripts and
testimony or coroner’s inquests or criminal or civil proceedings, the cost of
copies of public records, cost of depositions, cost of court reporters or
recorded statements, any other costs properly chargeable to the defense of a
particular claim, including employer liability actions, or to the protection of
the subrogation rights of PINNACLE and claims against the Special Disability
Trust Fund and any costs associated with managed care other than the general
cost of administering and overseeing a managed care program.

 

1.5           “Department”
means the Department of Insurance or the Department of the State of Florida
which may succeed to its rights and duties under the Law.

 

1.6           “Division”
means Division of Workers’ Compensation of the Florida Department of Labor and
Employment Security or the department of the State of Florida which may succeed
to its rights and duties under the Workers’ Compensation Law, Section 440.01,
et seq., Florida Statutes, as amended from time to time.

 

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1.7.          “Eligible Claims”
means claims which in the judgment of the MANAGEMENT COMPANY are covered by the
Florida Workers’ Compensation Law, Section 440.01 et seq., Florida
Statutes, as amended from time to time.

 

1.8           “Producer”
means an individual or agency licensed under the Florida Insurance Code to
write the insurance coverage provided by PINNACLE.

 

1.9           “PINNACLE”
means Pinnacle Assurance Corporation, an Assessable Mutual.

 

1.10         “Audited Standard
Premium” means the premium determined by multiplying (a) the payroll
(segregated into the proper workers’ compensation job classifications), divided
by 100, by (b) the product obtained by multiplying the appropriate manual
premium rates by member experience modifications — with such adjustments as
necessary after routine or other audits to account for inaccurate or incomplete
payroll, employee coverage and other data used to compute a Member’s premiums.

 

1.11         “Participating
Members” and “Member” means all persons, partnerships, joint ventures,
corporations, companies or unincorporated organizations which are members of
PINNACLE; which meet underwriting eligibility requirements established by
PINNACLE and whose applications for insurance coverage have been accepted by
PINNACLE.

 

1.12         “Records of
PINNACLE “ means, whether hard copy or on computer, without limitation any
records pertaining to underwriting and claims, both open and closed claims;
procedure manuals; mailing lists; safety reports and data; marketing plans,
data and records;

 

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statistical reports; accounting records; historical records; funds
received and in the custody of Service Company; records relating to the book of
business, and participating members, producers and reinsurance contracts and
claims; all government filings; and any other documents, materials, data,
computer disks, tapes, source documents, or data file layouts pertaining to or
bearing information about PINNACLE and its members and in possession of
MANAGEMENT COMPANY, its agents or subcontractors.

 

1.13         “Rules” mean
those rules adopted by the Department, pursuant to the Law, or the
Division of Workers’ Compensation, as the case may be, pursuant to the Workers’
Compensation Law.

 

1.14         “Management
Company” means Florida Administrators Inc., a Florida corporation, which
serves as the “MANAGEMENT COMPANY” for PINNACLE pursuant to this Agreement and
within the meaning of the Law and the Rules.

 

1.15         “Directors”
mean members of the Board of Directors of PINNACLE.

 

1.16         “Policy” or “Policies”
means plans and documents adopted or revised from time to time by the
Directors, which established guiding principles by which the MANAGEMENT COMPANY
and PINNACLE’s corporate officers shall administer the affairs of PINNACLE. It
is the intent of the parties that the Directors shall not directly control or
manage the means, methods or details of the services to be provided hereunder
by the MANAGEMENT COMPANY. Notwithstanding the foregoing, the parties
acknowledge the special interests of the Directors in the areas of auditing,
budgeting, reinsurance, and investing the funds of PINNACLE. In recognition of
those special 

 

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interests, and in regard to those specific areas only, the term “Policy”
or “Policies” shall be more broadly defined to include, but not be limited to
the following powers of the Directors:

 

(a) Auditing — Selection and direct employment of external
auditors and complete control over the auditing process;

 

(b) Budgeting — Authority to amend, modify, approve and/or
revise the annual budget submitted by the MANAGEMENT COMPANY;

 

(c) Reinsurance — Authority to review PINNACLE’s
reinsurance program to determine its financial soundness and the reasonableness
of its cost to PINNACLE and, if necessary to modify or revise PINNACLE’s
reinsurance program;

 

(d) Investing — Development of Policies which shall govern
the investment of PINNACLE’s funds, including the Directors’ selection of
investment advisors and managers after consultation with the MANAGEMENT
COMPANY.

 

ARTICLE II

 

POWERS AND RESPONSIBILITY OF DIRECTORS

 

2.1           All corporate powers
shall be exercised by or under the authority of the Directors and the business
and affairs of PINNACLE shall be managed and administered pursuant to the
Policies adopted by the Directors.

 

2.2           The Directors shall
appoint independent certified public accountants and actuaries, as needed, and
may appoint, hire or retain such other experts, professionals or other persons
as the Directors may deem appropriate from time to time.

 

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2.3           The Directors shall
approve the payment of dividends to Members.

 

2.4           The Directors shall
approve changes, if any, in corporate structure of PINNACLE.

 

2.5           The Directors shall
adopt a plan submitted by the MANAGEMENT COMPANY, establishing requirements for
membership in PINNACLE, if such plan has been prepared in accordance with the
policies and directives of the Directors.

 

2.6           The Directors shall,
from time to time, adopt, promulgate, amend, and re-promulgate its own rules,
policies, directives and procedures, not in conflict with this Agreement, which
shall govern Members and MANAGEMENT COMPANY’s handling of its duties hereunder.
The MANAGEMENT COMPANY agrees to abide by such rules, policies, directives and
procedures.

 

ARTICLE III

 

DUTIES AND RESPONSIBILITIES OF MANAGEMENT
COMPANY

 

3.1           MANAGEMENT COMPANY
represents and warrants that its principals and employees have the experience
and qualifications to meet the needs of PINNACLE, including, but not limited
to, claims administration, providing assistance in the overall planning and
coordination of the business of PINNACLE, providing summary data relating to
PINNACLE’s cost of providing benefits, including the frequency and distribution
by type and cause, and the skill and experience to assist PINNACLE in
correcting deficiencies which may arise in the operation of PINNACLE.

 

3.2           MANAGEMENT COMPANY
shall be solely responsible for managing and administering the affairs of
PINNACLE, in accordance 

 

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with the Policies of the Directors, including but not limited to
marketing, underwriting, billings, collection, claims administration,
termination, reinstatement, safety and loss prevention, reinsurance, policy
issuance, accounting, regulator reporting, investment, and general
administration. Claims administration shall include adjusting until the
conclusion of all claims occurring during the contract period with no
additional fee. Notwithstanding any other provision of this agreement, upon
expiration or termination of this agreement for any reason, MANAGEMENT COMPANY,
with notice to and approved by the Directors, shall be entitled to delegate and
assign its claims handling and adjusting responsibilities hereunder to any
business entity which is permitted under the Law and Rules to administer
and adjust claims. PINNACLE’s Board of Directors shall not unreasonably
withhold approval of MANAGEMENT COMPANY’s delegation or assignment of its claims
handling and adjusting responsibilities.

 

3.3           MANAGEMENT COMPANY
shall prepare and submit to the Directors a plan establishing the requirements
for membership in PINNACLE in accordance with the policies and directives of
the Directors. Such plan shall include, but not be limited to, loss prevention,
claims experience, billings, underwriting criteria and qualifications, credit
worthiness, termination and reinstatement.

 

3.4           MANAGEMENT COMPANY
acknowledges its fiduciary duty to PINNACLE and agrees to exercise utmost good
faith in all transactions of behalf of PINNACLE and MANAGEMENT COMPANY agrees
to comply with all of the Directors’ policies and directives.

 

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3.5           The parties
acknowledge that MANAGEMENT COMPANY will maintain frequent contact with the
Department in carrying out its duties under this Agreement. The MANAGEMENT
COMPANY is hereby designated PINNACLE’s agent for purposes of representing
PINNACLE in all dealings with the Department. MANAGEMENT COMPANY acknowledges
its fiduciary duty and obligation to fully and completely inform PINNACLE and
the Directors. Such information shall be given to the Chairman of the Board.

 

3.6           MANAGEMENT COMPANY
acknowledges that the Directors of PINNACLE will be elected by the Members in
accordance with the procedures contained in the By-Laws.

 

3.7           Notwithstanding
anything to the contrary herein contained, the MANAGEMENT COMPANY shall have
the right to delegate its duties under this Agreement to such persons or
entities as agents, delegates or assignees as it may properly deem necessary to
the efficient performance of the duties and responsibilities assigned to the
MANAGEMENT COMPANY hereunder, subject to the approval of the Directors. In
extending their approval, the Directors shall not unreasonably withhold their
approval or impose arbitrary conditions or requirements.

 

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ARTICLE IV

 

POWERS AND RESPONSIBILITY OF OFFICERS

 

4.1           PINNACLE shall have
two categories of officers. Board Officers shall be members of the Board of
Directors and shall perform those duties prescribed in the By-Laws. Corporate
Officers shall be a president, secretary and treasurer and such other officers
as deemed necessary by the MANAGEMENT COMPANY, and shall only have those powers
and responsibilities as expressly stated in the By-Laws or in a Director
resolution and shall not have any implied powers or responsibilities not
customary to that office.

 

ARTICLE V

 

COMPENSATION TO MANAGEMENT COMPANY

 

The MANAGEMENT COMPANY shall be paid compensation for the services
rendered pursuant to this agreement in accordance with the following:

 

Annual base service fee (“Base Fee”)

 

1.             The Base Fee shall
be 14% of the Audited Standard Premium. Additionally, the Base Fee shall
include the expense constant less any taxes or assessments attributable to the
expense constant.

 

2.             Either party may
notify the other, not more frequently than once every 36 months as to each
party, that the Base Fee is outside the range of reasonableness.

 

(a)                                  Range of
reasonableness shall be determined by comparing the Base Fees to the costs for
similar services incurred by insurers writing the same lines of insurance, or
where available, such expenses as filed by boards, bureaus, and associations designated
by insurers to file such data.

 

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(b)                                 After such notice is
given, the parties shall engage in good faith negotiations to agree upon a new
Base Fee.

 

(c)                                  If the parties are
unable to negotiate an agreement on a new Base Fee, within 60 days after such
notice is given, the parties shall jointly select a qualified major, national
consultant who will conduct a market-based study to determine whether the fee
is within the range of reasonableness. If the consultant concludes that the fee
is outside the range of reasonableness, the consultant will opine on the
appropriate range, and the parties will negotiate a fee within the range, to be
effective the first day of the next calendar year or upon agreement of the
parties.

 

(d)                                 If the parties are
unable to agree on the selection of a consultant or if either party disagrees
with the consultant’s conclusion, then the issue shall be submitted to
arbitration pursuant to the provisions of the Florida Arbitration Code. During
the period of any such arbitration, the Base Fee provided in this agreement (or
the Base Fee then in effect) shall remain in effect.

 

3.             If a substantial
increase or decrease in worker’s compensation insurance rates is approved by
the Department, the parties shall in good faith re-negotiate the amount of the
Base Fee.

 

ARTICLE VI

 

EXPENSES OF PINNACLE

 

It is understood and agreed by the parties to
this Agreement that the fees paid to the MANAGEMENT COMPANY are consideration
for the MANAGEMENT COMPANY performing all services described herein, but that
such compensation does not include the following services and expenses, which
shall be borne by PINNACLE:

 

6.1           The cost of services
performed by the actuary selected by the Directors.

 

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6.2           The cost of audits
by certified public accountants or other auditors selected by PINNACLE as
required by regulations or rules of the Department of other applicable
law, and preparation of financial statements (whether “audited” or periodic “reviewed”)
and all returns and reports required by federal, state or local taxation
authorities. Said audits shall include but not limited to premium audits.

 

6.3           Legal fees for
services performed by attorneys selected by PINNACLE.

 

6.4           Subject to Section 10.1,
all legal fees, costs and expenses incurred in the defense of lawsuits filed
against PINNACLE unrelated to claims.

 

6.5           The cost of services
performed by any other professional selected by PINNACLE.

 

6.6           Any charge by a regulatory
agency for any examination or audit performed by any regulatory agencies or any
penalties and interest assessed.

 

6.7           Premiums for errors
and omissions insurance, and officers and directors insurance, fidelity
coverage and surety bonds to satisfy the needs of PINNACLE, its officers,
directors, employees and agents, excluding MANAGEMENT COMPANY and producers.

 

6.8           The compensation
paid to producers, including cash awards, gifts, travel packages and other
incentive bonuses payable to said Producers.

 

6.9           Cost of investing
fund monies including fiscal agent costs and fees.

 

6.10         Taxes and assessments
to be charged against PINNACLE.

 

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6.11         Organizational costs
for PINNACLE.

 

6.12         Excess insurance or
reinsurance premiums.

 

6.13         All costs related to
bad debt, expense constant expense net of applicable taxes or assessments
imposed by Law, Director’s expense (excluding those of MANAGEMENT COMPANY director’s),
bank service charges, depreciation expense, amortization expense, dividends,
and EFT plan expense.

 

6.14         All “Costs and
Allocated Expenses Chargeable as Claims” as defined in Article I.

 

6.15         MANAGEMENT COMPANY
shall prepare and submit to the Directors a suggested annual budget for the
fees, awards, costs and other expenses described in Sections 6.8. Any departure
from such budget in either amount or scope shall be approved in advance by the
Directors.

 

6.16         Except as otherwise
provided below, the MANAGEMENT COMPANY shall bear all costs which are not specified
above in sections 6.1 through 6.15. In the event that any material, extra costs
result from changes in the Law, the parties shall negotiate in good faith an
agreement as to which party shall bear such extra costs.

 

ARTICLE VII

 

RECORDS AND OFFICE

 

7.1           The MANAGEMENT
COMPANY shall maintain, at its principal office, a copy of this Agreement
together with all records of PINNACLE.

 

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7.2           The Directors shall
have the right of continuing access to the books and records of PINNACLE
maintained by the MANAGEMENT COMPANY.

 

7.3           Claims
administration and the other primary activities of the MANAGEMENT COMPANY under
this Agreement shall be handled from its principal office in Palm Beach County,
Florida, and books and records of PINNACLE shall be maintained in such office.

 

7.4           The MANAGEMENT
COMPANY recognizes and acknowledges that all programs, products, or producer
reimbursement plans, records of PINNACLE, PINNACLE’s book of business, list of
insureds, and list of Producers, and offering any insurance product of PINNACLE
are the property of PINNACLE and shall be deemed confidential and proprietary
information of PINNACLE. MANAGEMENT COMPANY covenants and agrees that it will
never, directly or indirectly, during the term of this Agreement or after
termination thereof, use, disseminate, disclose or in any manner publish any
such confidential and proprietary information without PINNACLE’s permission
given in writing; provided, however, the MANAGEMENT

 

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COMPANY may, in its discretion, make copies of or have access any and
all of the above specified information, data and documents to the extent they
may be needed for the purpose of defending or prosecuting any legal, tax, or
other administrative investigation or proceeding.

 

7.5           Upon termination of
this Agreement, all original records of PINNACLE and data utilized in
generating and maintaining those records in the custody of the MANAGEMENT
COMPANY, its agents or its subcontractors shall be assembled by MANAGEMENT
COMPANY at the expense of MANAGEMENT COMPANY and delivered to PINNACLE at the
expenses of PINNACLE. All computer software programs purchased or developed by
MANAGEMENT COMPANY and used to render services hereunder shall remain the sole
and exclusive property of MANAGEMENT COMPANY.

 

ARTICLE VIII

 

TERM OF CONTRACT AND TERMINATION

 

8.1           This Agreement shall
become effective as of the date PINNACLE commences operations, and shall remain
in full force and effect for a period of five (5) years thereafter. Upon
the date PINNACLE commences operations, the parties will execute an addendum to
this Agreement, specifying the effective date of this Agreement. The Agreement
shall continuously renew for additional five (5) year terms unless
PINNACLE notifies MANAGEMENT COMPANY that it elects to

 

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terminate the Agreement for a cause described in Section 8.2 of
this Agreement.

 

8.2           This Agreement may
be terminated by PINNACLE under the following conditions:

 

(a)           PINNACLE is
dissolved or liquidated;

 

(b)           The MANAGEMENT
COMPANY is disqualified from acting as a MANAGEMENT COMPANY by the Department
and MANAGEMENT COMPANY is thereafter unable to cure the deficiencies cited by
such agency within a reasonable amount of time, not exceeding sixty (60) days
in length;

 

(c)           Failure of the
MANAGEMENT COMPANY to manage and operate PINNACLE in a reasonable and prudent
manner; or

 

(d)           MANAGEMENT COMPANY
intentionally and materially violates a Policy concerning auditing, budgeting,
investing or reinsurance.

 

8.3           Arbitration.

 

(a)           In the event
PINNACLE alleges that the MANAGEMENT COMPANY has failed to manage and operate
PINNACLE in a reasonable and prudent manner, pursuant to Section 8.2(c),
written notice of such non-compliance shall be given to MANAGEMENT COMPANY,
specifying the specific reasons for alleging the non-compliance and suggesting
corrective measures, and the MANAGEMENT COMPANY shall be given a reasonable
period of time to correct such non-compliance. Within thirty (30) days after
receipt of such written notice, MANAGEMENT COMPANY shall submit to the
Directors a plan to correct the non-compliance which is reasonably satisfactory
to the

 

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Directors. In the event the MANAGEMENT COMPANY shall fail to submit a
reasonably satisfactory corrective plan within said thirty (30) day period, or
in the event that MANAGEMENT COMPANY shall fail to correct the non-compliance
within a reasonable period of time, then PINNACLE may terminate this Agreement.
In the event that the parties disagree as to whether the corrective plan is
reasonably satisfactory or disagree on the issue of whether MANAGEMENT COMPANY
has performed the requirements of the corrective plan, the matter shall be
submitted to arbitration.

 

(b)           In the event that
PINNACLE alleges that MANAGEMENT COMPANY has violated Section 8.2(d), the
following shall apply:

 

(1)           PINNACLE shall give
written notice of the alleged violation to MANAGEMENT COMPANY.

 

(2)           If MANAGEMENT
COMPANY reasonably believes that performance of the subject Policy may result
in enforcement action against MANAGEMENT COMPANY’s license or PINNACLE’s
certificate of authority, or if MANAGEMENT COMPANY reasonably believes that the
subject Policy is in material violation of the Law or Rules, then MANAGEMENT
COMPANY shall give written notice of such concern to PINNACLE to excuse the
violation of the subject Policy. If PINNACLE accepts MANAGEMENT COMPANY’s
explanation, then the violation shall be excused. If PINNACLE does not accept
MANAGEMENT COMPANY’s explanation, then MANAGEMENT COMPANY may submit the matter
to arbitration to determine whether MANAGEMENT COMPANY’s material intentional
violation was excusable.

 

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(c)           In the event of
arbitration pursuant to this article, each party shall select one arbitrator
and the two arbitrators so selected shall mutually agree upon a third
arbitrator, and the dispute shall otherwise be arbitrated in accordance with
the Florida Arbitration Code.

 

ARTICLE IX

 

PREVAILING LAW

 

This Agreement shall be construed according to the laws of the State of
Florida to the extent that such laws are not preempted by Federal law.

 

ARTICLE X

 

INDEMNIFICATION

 

10.1         Indemnification by
MANAGEMENT COMPANY. MANAGEMENT COMPANY agrees to indemnify and hold
PINNACLE and its officers, directors and agents harmless from and against all
claims, demands, costs, damages, judgments, attorneys’ fees, expenses,
obligations and liabilities of any kind or nature that occur, arise or result
from MANAGEMENT COMPANY’s performance of its duties hereunder or from a breach
of this Contract by MANAGEMENT COMPANY.

 

10.2         Indemnification by
PINNACLE. PINNACLE agrees to indemnify and hold the MANAGEMENT COMPANY and
its officers, directors and employees harmless from and against all claims,
damages, judgments, attorney’s fees, expenses, obligations and liabilities of
any kind or nature that occur, arise or result from the directors’ or their
agents mismanagement of PINNACLE’s assets

 

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or any other breach of their duties to PINNACLE, or its members, or any
other duties imposed by law (except to the extent that such mismanagement or
breach of duties results from the action or omission of MANAGEMENT COMPANY, its
officers, directors or employees).

 

ARTICLE XI

 

11.1         Additional
Insurance Lines. During the term of this Agreement, PINNACLE shall not
offer any other person or firm the right to act as an administrator or management
company on behalf of PINNACLE with respect to any additional insurance lines
PINNACLE may offer, unless PINNACLE first offers such right to the MANAGEMENT
COMPANY upon the same terms and conditions. This right of first refusal must be
exercised by the MANAGEMENT COMPANY within thirty (30) days after the new
opportunity is offered to it by PINNACLE. If the MANAGEMENT COMPANY declines
such opportunity, the Management contract or other arrangement with the other
person or firm may then be implemented, but only on the same terms and
conditions stated in the original offer to the MANAGEMENT COMPANY. If the terms
and conditions are different, the MANAGEMENT COMPANY shall again have the right
of the first refusal with respect to such modified offer.

 

ARTICLE XII

 

MISCELLANEOUS

 

12.1         During the term of
this Agreement, MANAGEMENT COMPANY shall maintain a fidelity bond covering its
employees, with PINNACLE as obligee, in an amount sufficient to protect all
monies placed in any revolving account made available to MANAGEMENT 

 

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COMPANY for the payment of claims, judgments and other related
expenses. The coverage and amount for the bond shall be as required by the
Department or other applicable law.

 

12.2         The Directors will,
from time to time, designate a single contact person or representative from
among their membership who will be responsible for receiving notices and other
communications from the MANAGEMENT COMPANY and reporting the directives and
other communications of the directors to the MANAGEMENT COMPANY. Until
otherwise notified in writing, the initial representative of the Directors
shall be the Chairman of the Board serving at any time, and the representative
of MANAGEMENT COMPANY shall be its President serving at any time.

 

12.3         This Agreement has
been duly adopted by the Board of Directors of MANAGEMENT COMPANY and by the
Board of Directors of PINNACLE at meetings duly called and held by them,
respectively. This Agreement does not and will not conflict with or violate the
charter or other organizational documents of any party, or any agreement,
instrument, law, order, rule, regulation, or other obligation or arrangement by
which a party may be bound.

 

12.4         If the MANAGEMENT
COMPANY is required to assume responsibility for the open claims and files of
such an organization that has been terminated or is in the process of winding
up or dissolving, then the parties shall mutually agree upon the reasonable
compensation to which MANAGEMENT COMPANY will be entitled in consideration for
assuming the responsibility for closing out such claims and files.

 

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If PINNACLE acquires, merges, forms, or consolidates with any other
insurance company, self-insurance fund, organization or other entity providing
like insurance coverages or services, this Agreement shall also apply to such
new or additional company, fund, organization or entity, and the MANAGEMENT
COMPANY’s fees shall be based on the new or additional premiums paid by the
Members or Policyholders of such additional company, fund, organization, or
other entity. If the MANAGEMENT COMPANY is required to assume responsibility
for the open Claims and files of such an organization that has been terminated
or is in the process of winding up or dissolving, then the parties shall
mutually agree upon the reasonable compensation to which MANAGEMENT COMPANY
will be entitled in consideration for assuming the responsibility for closing
out such Claims and files.

 

12.5         Neither party nor any
representative, agent, employee, designee or other firm or individual acting on
its behalf or at its direction, shall, in bad faith, take any action for the
primary purpose of circumventing, diminishing or otherwise avoiding that party’s
obligations under this Agreement, terminating this Agreement, or causing the
non-renewal of the same, including the (i) imposition of unreasonable or
unfair obligations upon the other party for the purpose of causing the other
party to request termination of this Agreement, (ii) the imposition of
arbitrary standards, policies or procedures upon the other party, or (iii) unreasonably
withholding consent or unreasonably exercising its discretion where such
consent or discretion may be requested by MANAGEMENT COMPANY or exercised by
the other party.

 

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12.6         This Agreement
constitutes the entire agreement between the parties, cannot be modified except
in a writing, signed by the President of MANAGEMENT COMPANY and Chairman of the
Board of Directors, and shall be binding upon for the benefit of the respective
successors and assigns of the parties (including any entities, funds, or other
organizations merging into, consolidated with, formed by, or acquired by ).

 

 

	
   

  	
  PINNACLE ASSURANCE CORPORATION, An

  
	
   

  	
  Assessable Mutual

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/illegible

  
	
   

  	
   

  	
  Chairman of the Board of

  
	
   

  	
   

  	
  Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FLORIDA ADMINISTRATORS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Sam A. Stephens, Pres.

  
	
   

  	
   

  	
  Its President

  

 

22EXHIBIT 10.33

 

AMENDMENT
TO MANAGEMENT COMPANY CONTRACT

 

THIS AMENDMENT to that
certain Management Company Contract dated April 7, 1995, is made and entered
into this 26th day of January, 1996, by and between PINNACLE ASSURANCE CORPORATION, a Florida stock insurance
company as successor to PINNACLE ASSURANCE
CORPORATION, an Assessable Mutual, a Florida corporation, (either or
both of which may hereinafter be referred to as “PINNACLE”) and FLORIDA
ADMINISTRATORS, INC., a Florida corporation, (hereinafter “MANAGEMENT COMPANY”) as follows:

 

RECITALS

 

WHEREAS, PINNACLE ASSURANCE CORPORATION, an
Assessable Mutual, as predecessor to PINNACLE
ASSURANCE CORPORATION, a Florida stock insurance company, previously
entered into that certain Management Company Contract dated April 7, 1995; and

 

WHEREAS, PINNACLE is to be converted into a Florida
stock insurance company with the approval of the Florida Department of
Insurance; and

 

WHEREAS, PINNACLE is the successor entity to PINNACLE ASSURANCE CORPORATION, an
Assessable Mutual; and

 

WHEREAS, PINNACLE and the MANAGEMENT COMPANY wish to amend the Management Company
Contract to reflect certain agreed changes as well as the above referenced
conversion of PINNACLE to a
Florida stock insurance company and, further, to amend the Agreement, among
other things, to conform to the conversion of PINNACLE
to a stock insurance company.

 

NOW, THEREFORE, for Ten and
00/100 ($10.00) Dollars and other good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged by all parties hereto,
it is agreed as follows:

 

1.             The above Recitals are true and correct and are
incorporated into the terms and provisions of this Agreement by reference.

 

2.             PINNACLE and
MANAGEMENT COMPANY hereby
acknowledge and agree that the Management Company Contract entered into on
April 7, 1995 with PINNACLE’S
predecessor shall remain in full force and effect in accordance with its terms
without interruption or termination as a result of the conversion of PINNACLE as described above.

 

 

3.             The following changes to the Management Company Contract
are hereby agreed upon:

 

A.
                                Article 1, Section 1.9 is hereby amended to
read as follows:

 

“PINNACLE” means PINNACLE ASSURANCE CORPORATION, a Florida
stock insurance company. Any and all references to “PINNACLE” in the Management Company Contract shall now be
deemed to refer to PINNACLE ASSURANCE
CORPORATION, a Florida stock insurance company and not to PINNACLE ASSURANCE COMPANY, an Assessable
Mutual.

 

B.                                     Article 1, Section 1.11 “Participating
Members” and “Member” is hereby deleted in its entirety and the
following is substituted in its place and stead:

 

“1.11 “Policy Holders”
and “Insureds” means all persons, partnerships, joint ventures,
corporations, companies, or unincorporated organizations which are policy
holders or insureds of PINNACLE,
which meet underwriting eligibility requirements established by PINNACLE and whose applications for
insurance coverage have been accepted by PINNACLE.”

Note
- any and all references to “Participating Members” or “Member” in the
remainder of the Management Company Contract shall be deemed to refer to “Policy
Holders” and “Insureds” rather than “Participating Members” or “Members”.

 

C.                                     Article 3, Section 3.2 is amended by deleting
in its entirety the following sentence commencing in the third line from the
top of page 8:

 

“Claims administration shall
include adjusting until the conclusion of all claims occurring during the
contract period with no additional fee.”

 

The following shall be
substituted in place and in stead of the preceding deleted sentence:

 

Effective as of December 31,
1995, “The MANAGEMENT COMPANY
shall have no liability or responsibility whatsoever to adjust until conclusion
any claims occurring during the contract period in the event that this
Management Company Contract is terminated. Any such responsibility for
continuing claims adjusting shall terminate with the termination of the
Management Company Contract. Additionally, MANAGEMENT
COMPANY is authorized to delegate to a service company, claims
administration

 

 

activities, provided,
however, that MANAGEMENT COMPANY
shall retain the ultimate responsibility and authority for such activities.

 

4.             All remaining terms and provisions of the Management
Company Contract dated April 7, 1995 not specifically or impliedly amended
herein shall remain in full force and effect and are hereby ratified, adopted
and reaffirmed.

 

IN WITNESS WHEREOF, the
parties have hereunto set their hands and seals as of the day and year first
above written for themselves, their successors, and their permitted assigns, if
any, and do hereby agree to fully perform the covenants and agreements as
hereinabove set forth.

 

	
   

  	
  PINNACLE
  ASSURANCE CORPORATION,

  
	
   

  	
  an Assessable Mutual

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sam A. Stephens, Pres.

  	
   

  
	
   

  	
   

  	
  As its

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dale E. Hanson, Sec.

  	
   

  
	
   

  	
   

  	
  As its Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FLORIDA
  ADMINISTRATORS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sam A. Stephens, Pres.

  	
   

  
	
   

  	
   

  	
  As its

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dale E. Hanson, Sec. 

  	
   

  
	
   

  	
   

  	
  As its Secretary

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