EXHIBIT 10.3
REPRESENTATIVE AGREEMENT DATED AS OF JULY 1, 1996
BETWEEN MISSISSIPPI RISK MANAGEMENT, INC. AND THE TRUST
REPRESENTATIVE AGREEMENT
THIS REPRESENTATIVE AGREEMENT (the "Agreement") is made as
of this 1st day of July, 1996, to be effective as of Effective
Date (as defined below) by and between Delta Agricultural and
Industrial Trust or its assignee or successor in interest
(collectively, the "Trust") and Mississippi Risk Management, Inc.
("Representative").
WITNESSETH
WHEREAS, the Trust has entered into that certain Insurance
Placement Agreement (the "Placement Agreement") between the Trust
and TIG Insurance Company ("TIG") and TIG Reinsurance Company
("TIG Re") pursuant to which TIG agrees to provide workers'
compensation insurance pursuant to a program created by TIG and
the Trust; and
WHEREAS, Representative has entered into that certain
General Agency Agreement (the "General Agency Agreement ") with
TIG which appoints Representative as the managing general agent
for the sale of TIG's workers' compensation insurance; and
WHEREAS, the Trust desires that Representative act as its
representative to market TIG's workers' compensation insurance as
further set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises,
covenants, and agreements set forth herein, the parties agree as
follows:
ARTICLE 1
DEFINITIONS
1. "Affiliate" means, as applied to any Person, any other
Person directly or indirectly controlling, controlled by, or
under common control with, that Person. For purposes of this
definition, "control" (including with correlative meanings, the
terms "controlling," "controlled by," and "under common control
with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of
the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
2. "Effective Date" means 12:01 a.m., Central Standard
Time, July 1, 1996.
3. "Existing Clients" means Persons covered by workers'
compensation policies written by the Trust prior to the Effective
Date which shall be offered workers' compensation insurance
through TIG after the termination of their policies by the Trust
as of the Effective Date.
4. "Person" means any individual, corporation,
partnership, joint venture, association, or other form of
organization, in each case whether or not having a separate legal
identity.
5. "Potential Clients" means those Persons which request
or are offered workers' compensation insurance coverage to or
through the Trust or Representative or an agent or representative
thereof, but not including Existing Clients.
6. "Program" shall mean the marketing and provision of
TIG's workers' compensation insurance to Existing Clients and
Potential Clients in accordance with the terms of the Placement
Agreement.
7. "Program Business" shall mean all policies of insurance
written by TIG covering Program Clients.
8. "Program Clients" means all (i) Existing Clients who
are provided with workers' compensation insurance by TIG; (ii)
and Potential Clients who are provided with workers'
compensation insurance by TIG.
9. "Reinsurance" shall mean the entering into of a
reinsurance relationship between the Trust through a commercial
insurance agency formed by or on behalf of the Trust and TIG or,
at TIG's sole option, TIG Re, such that the Trust, through the
commercial insurance company, shall act as a reinsurer of Program
Business and TIG such that the Trust shall act as a reinsurer of
the Program Business.
ARTICLE 2
DUTIES
1. Representative
(a) Representative shall market the Program to
Existing Clients and shall seek and identify Potential
Clients and market the Program to said Persons.
Representative shall at all times be and remain in
compliance with the General Agency Agreement.
(b) The parties agree that of the Collected Premiums
received by Representative, Representative shall pay to
the following Persons not more than the following
percentages of Collected Premiums:
Payee Percent of Total Activity
Accounts/Actuaries 1% Accounting and
Actuarial Services
Harry E. Vickery or a 3.5% Sending bills,
corporation wholly owned collections, liaison,
by him program oversight,
and obtaining
association
endorsements
Mississippi Risk 7.8% Sales commissions,
Management, Inc. ("MRM") marketing,
administration of
Program
TIG 87.7% Provision of
Insurance to Program
Clients
TOTAL 100%
As used herein, the term "Collected Premiums" shall
mean all amounts paid as insurance premiums by a
Program Client, with no deductions for any fees,
assessments or taxes. All amounts paid by
Representative to the Persons set forth above
("Payees") shall be subject to the prior approval of
the Trust. In the event amounts owed to
Accountants/Actuaries are in excess of 1% of Collected
Premiums, MRM agrees to pay such excess from its own
funds.
(c) Representative shall generate bills to Program
Clients, and it shall be the responsibility of Harry E.
Vickery or a corporation wholly owned by him to review
such bills, send them, and collect premiums from
Program Clients and remit the same to TIG's premium
trust account established for the Program from which
the Representative shall draw funds to pay the Payees
as set forth above.
2. Trust. The Trust shall provide Representative with
information regarding Existing Clients and information regarding
Potential Clients to assist Representative in marketing the
Program to such parties.
3. First Right. Representative and the Trust acknowledge
that Representative may serve as a representative or agent for
other providers of workers' compensation insurance; however,
Representative agrees that Representative will at all times
attempt to initially place Persons seeking workers' compensation
with TIG such that such Persons shall become Program Clients.
ARTICLE 3
COMPENSATION
1. Compensation. The parties agree that the compensation
to be received by Representative and its Affiliates in connection
with the Program shall be (i) commissions not to exceed 7.8% of
Collected Premiums earned by the Representative from TIG for
Program Business; (ii) $140 per policy issued to a Program
Client, which shall be paid to Representative by TIG; and (iii)
commissions to be paid to Representative or its Affiliates which
have been fully disclosed to the Trust in connection with (1)
excess reinsurance coverage provided by Wexford Underwriting
Managers, Inc., and (2) provision of director and officer
liability coverage for the Trust. Representative agrees that it
and its Affiliates will receive no other compensation related to
the Program other than that set forth above without the prior
approval of the Trust.
ARTICLE 4
REPORTS AND INFORMATION
1. Reports. On or before the 15th day of each month
following the Effective Date, Representative shall submit to the
Trust (i) a list of the names and addresses and payroll by
classification of all Persons to which Representative and/or its
agents has made a quotation regarding the Program; and (ii) a
copy of the declaration page of each policy issued regarding the
Program. In addition, Representative shall provide the Trust
with all reports or information provided to Representative
produced by or on behalf of TIG or Representative concerning the
Program.
ARTICLE 5
TERM
1. Term. This Agreement shall commence as of the date
hereof, and continue for the term of the Placement Agreement
unless earlier terminated as provided herein.
2. Automatic Termination. This Agreement shall
automatically terminate with no notice required upon (i) the
bankruptcy, receivership, assignment for the benefit of creditors
or similar action of Representative or the commencement of any
such proceedings by or against Representative; (ii) the
termination of the General Agency Agreement between TIG and
Representative; or (iii) the termination of the Placement
Agreement between TIG and the Trust for any reason.
ARTICLE 6
MISCELLANEOUS
1. Approval of General Agency Agreement. The Trust shall
have the right to review and approve the General Agency Agreement
and any amendments or revisions thereto and any subagency or
similar agreement between Representative and other Persons
related to the Program and such review and approval shall be a
condition precedent to the initial and continuing effectiveness
of this Agreement.
2. Noncompetition. During the term of this Agreement,
Representative and its Affiliates shall not, directly or
indirectly, act as a general agent or in any other capacity to
provide workers' compensation insurance to Persons in the
agricultural sector in Mississippi except in accordance with the
terms of this Agreement. The term "agricultural sector" shall
have the meaning as set forth in the Placement Agreement.
3. Nondisclosure. Except as may be required by law or any
governmental agency, during the Term of this Agreement and at all
times thereafter, Representative and its Affiliates shall not
directly or indirectly reveal, report, publish, disclose or
transfer any Confidential Information to any Person or utilize
any Confidential Information for Representative's and/or its
Affiliates own benefit or for the benefit of any other Person.
As used herein, the term "Confidential Information" means
documentary information and all information, ideas, analyses and
compilations provided in writing to Representative by the Trust
during the course of this Agreement regarding the Trust and/or
the business of the Trust including customer lists, marketing
plans and techniques, products and services, prices, sales,
strategic plans and finances. As used herein, the term
"Confidential Information" shall not include any information: (i)
which is already known to Representative and/or its Affiliates;
or (ii) which is independently developed by Representative and/or
its Affiliates; or (iii) which is or becomes available to the
public through no breach of this Agreement by Representative.
4. Notices. Any notices required or permitted to be given
hereunder shall be deemed to be given if delivered by hand or if
mailed by certified mail, postage prepaid, return receipt
requested or by postal or a commercial express document delivery
service which issues an individual delivery or receipt, or by
facsimile with reasonable evidence of receipt, to the following
addresses:
If to Representative: Mississippi Risk Management, Inc.
407 Briarwood Drive, Suite 201
P. O. Box 14067
Jackson, Mississippi 39236
Attn: David R. White
Facsimile: (601) 957-6838
If to Trust: Delta Agricultural and Industrial
Trust
P. O. Box 5037
Greenville, Mississippi 38704-5037
Attn: Harry Vickery
Facsimile: 601-378-3366
5. Expenses. All expenses of the preparation of this
Agreement shall be borne by the respective parties incurring such
expense.
6. Entire Agreement. This Agreement constitutes the
entire contract between the parties hereto pertaining to the
subject matter hereof and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions, whether
written or oral, of the parties.
7. Governing Law. The validity and construction of this
Agreement shall be governed by the laws of the State of
Mississippi.
8. Section Headings. The section headings are for
reference only and shall not limit or control the meaning of any
provision of this Agreement.
9. Waiver. No delay or omission on the part of any party
hereto in exercising any right hereunder shall operate as a
waiver of such right or any other right under this Agreement.
10. Amendments. This Agreement may be amended, but only in
writing, signed by the parties hereto.
11. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but
all of which together shall compromise one and the same
instrument.
12. Attorneys' Fees. If legal action is commenced to
enforce this Agreement, the prevailing party in such action shall
be entitled to recover its costs and reasonable attorneys' fees
in addition to any other relief granted.
13. Successor and Assigns. Representative shall not assign
its rights hereunder without the express written consent of the
Trust, which consent shall not be unreasonably withheld.
Representative hereby acknowledges and agrees that it is aware of
the Trust's intent to form a commercial insurance company and
that the Trust may assign this Agreement and the rights hereunder
to such entity without the consent of Representative.
14. Relationship of the Parties. Representative is an
independent contractor of the Trust. This Agreement does not
constitute or create a general agency, joint venture, partnership
or employment relationship.
WITNESSED WHEREFORE, the parties have duly executed this
Agreement as of the day and year first above written.
REPRESENTATIVE: TRUST:
MISSISSIPPI RISK MANAGEMENT, INC. DELTA AGRICULTURAL AND
INDUSTRIAL TRUST
By:/s/ David R. White By:/s/ William L. Kennedy