Please find your agreement Below:
Insurance Partner Group LLC Agreement
INDEPENDENT CONTRACTOR AGREEMENT
This Agreement is entered into by and between Agents Alliance Services, Ltd., a duly organized Texas Limited Partnership, (hereinafter referred to as “AAS”) and Independent Contractor, who is licensed to sell insurance (hereinafter “Independent Contractor” as that person and entity is named below).
1. Commission / Compensation Schedule as Exhibit “A”2. Consent of Spouse as Exhibit “B”3. Exhibit “C” — Trade names I Logos
1.1 The parties hereby agree to the following definitions as used throughout thisAgreement:
(a) “Accounts” shall only refer to those persons or entities that obtain insurance, financial services, business, risk management services or other products or other services through Independent Contractor during and prior to the commencement of this Agreement. Accounts include renewals or continuations of Policies placed by Independent Contractor. Accounts are commonly referred to in the insurance industry as “book of business”. Accounts do not include those Accounts that are restricted Accounts as defined below.
(b) “Restricted Accounts” refers to persons or entities that obtain insurance, financial services, business or risk management services or other products or other services through AAS or its affiliates or through AAS’ other Independent Contractors. These accounts are not accounts placed by Independent Contractor with AAS during the agreement. Restricted Accounts shall include renewals or continuations of those policies placed by AAS, its affiliates or through AAS’ other Independent Contractors. Core Business: The “core business” of AAS is as an aggregator of insurance and financial services benefiting Independent Contractor; by providing access to multiple insurance carriers and financial service companies; by providing competitive pricing due to volume and AAS relationships; and to assist Independent Contractor by providing access to prospects and leads within Independent Contractor’s market in which to call upon and service. Specifically, “core business” shall mean and include that AAS provides to Independent Contractor information and data concerning customers, insurance companies and financial services and provides a portal for acquiring insurance and financial quotes, rates and pricing for Independent Contractor’s customers.
(d) Confidential Information / Trade Secrets: As used throughout this Agreement,
“Confidential Information/Trade Secrets shall mean any information or records (in whatever form) that are used in the core business of AAS. This shall include, but not be limited to, pricing, rates and quoting for customers, prospect lists compiled and accumulated by AAS, insurer and insurance records, expiration data, customer preferences, customer methods of operation, customer risk tolerance and attitude regarding deductibles, the identity of decision makers within the customer’s business organization, details of the organizational structure, and the identity of individuals that influence customers’ decisions regarding insurance purchases, as well as other information relative to Accounts; marketing methods and strategiesused to increase the number of Independent Contractors of AAS; financial and administrative information and/or records relating to how AAS’ corebusiness is managed or operated.
(e) Expiration Rights: Expiration rights shall refer to and include all records, documents and other information developed in connection with the Accounts which assists AAS in servicing and maintaining those Accounts, coupled with the exclusive right between the parties to make use of such information or records and/or the exclusive right to solicit, or attempt to obtain, or accept insurance, financial services business or risk management services of any nature from the Accounts, or in any manner to aid or assist anyone else in soliciting or accepting insurance, financial services business or risk management services from the Accounts.
(f) Goodwill: Goodwill shall refer to and include the advantage that AAS enjoys as a consequence of handling and servicing insurance, financial services business or risk management services, as well as customer loyalty and trust AAScontinues to gain from its continued business relationships. Goodwill also includes the knowledge accumulated by AAS at significant expense and time regarding the preferences and needs of the customer(s) and prospect(s), the decision-makers and the processes followed by the customers and prospects in making business decisions.
(g) Policy(Policy (ies): The written contracts of insurance that exist on behalf of the Accounts, as well as any renewals thereof. Policy(ies) shall also include new and different insurance coverage, financial services and business or risk management services provided for the Accounts by AAS.
(h) Book or Accounts as used herein refers to all Accounts of Independent Contractor that are not a “Restricted Account” as defined herein and above.
2. DUTIES / RESPONSIBILITIES.
2.1 Independent Contractor agrees to solicit and service insurance Accounts thru AAS, deliver Policies and other evidences of coverage which have been placed thru AAS and collect and receive premiums for those Policies. Independent Contractor agrees to devote his/her working time and attention to develop and place all insurance, financial services business and/or risk management customers with AAS. During the term of this Agreement, Independent Contractor shall not solicit or place insurance, financial services business or risk management services outside of AAS or with other general agents unless agreed to in writing by AAS prior to doing so.
2.2 Independent Contractor understands that it is an Independent Contractor and that AAS will not direct or control the methods or manners in which Independent Contractor performs the services set forth in this Agreement. As such, AAS is not responsible for or obligated to pay Independent Contractor’s payroll, payroll taxes or any other obligation incident to Independent Contractor’s business or performance under this Agreement. Further and without waiving the Independent Contractor status, AAS will, but shall not be required to, allow Independent Contractor to participate in any group health insurance and/or other benefits that AAS may offer other Independent Contractors of AAS. The providing of group health benefits shall only be to the extent that: (a) that the Independent Contractor status is not changed or altered by participation; (b) that allowing participation does not violate any State or Federal law or employment practice; and (c) that Independent Contractor pays the cost of such benefits for their dependents’ participation. Further, Independent Contractor agrees to fully indemnify and hold AAS harmless from any claims that arise by, through or under Independent Contractor from any employee or agent of Independent Contractor. This indemnification shall include reimbursement any and all costs or expenses, including attorney fees, that AAS incurs as a result of responding or defending a claim, even if said claim, ultimately is resolved by settlement.
2.3 Independent Contractor shall have no authority to enter into any contracts binding upon AAS or to create any obligations on behalf of AAS unless specifically authorized by AAS in writing. Independent Contractor further agrees to place insurance and financial services business under contracts and appointments held by AAS with the insurance companies and brokers.
2.4 In the event that Independent Contractor receives payment or compensation from any insurance or financial services provider, or any retail customer, or any independent agency, Independent Contractor shall forward one hundred percent (100%) of all funds or payments received to AAS within fifteen (15) days of receipt and notify AAS and the payor to forward all future payment directly to AAS or to Independent Contractor in the name of AAS. Independent Contractor shall deposit all funds received into the bank account of AAS.
2.5 Independent Contractor agrees that during the term of this Agreement, he / she will use AAS’ agency management system and software programs known as the AMS system. AAS shall provide said management system and software to Independent Contractor upon execution of this Agreement and acknowledgment of the Confidentiality/Trade Secrets provision of this Agreement. Further, it is acknowledged that the agency management system and software does have confidential, proprietary and trade secret information contained within it and that said access being given by AAS to Independent Contractor is contingent on Independent Contractor’s agreement not to disclose or use any said confidential or trade secret information in violation of this Agreement or to the detriment of AAS. Further, Independent Contractor agrees and acknowledges that the use of AAS’ agency management system and software programs is being granted by AAS as a revocable license and that the license to use can be revoked by AAS at any time for any reason.
2.6 During the term of this Agreement, Independent Contractor shall have a revocable license to use the trade name “Agents Alliance Services” and/or their respective logos in Independent Contractor’s advertisements and promotions. Such trade names and logos are the property of AAS, and the specific use of them must be approved by AAS prior to use and in writing. Examples of the approved trade names and logos are set forth in Exhibit “C” to this Agreement and may from time to time be modified or changed by AAS with notice to Independent Contractor. Independent Contractor further agrees to use the AAS logo and designations in all advertising, promotions, and writings identifying the business of IndependentContractor: Further, Independent Contractor agrees and acknowledges that the use of same can be revoked by AAS at any time for any reason. Further, Independent Contractor agrees to reference itself in all media, marketing and other correspondence as follows: “Independent Contractor (name) member Agents Alliance Services” or such other AAS designations that may change from time to time. The license to use said trade names and logos shall immediately terminate upon termination of this Agreement.
2.7 Independent Contractor hereby agrees to provide AAS information regarding Independent Contractor’s employees, sub-producers and other representatives, including but not limited to their identity, contact information, licenses held, any written agreements that may exist between them and Independent Contractor and other information AAS may reasonably request because said information may impact AAS’ reputation, information supplied by AAS or may relate to services that said employee or sub-producer may be required to perform under this Agreement. All sub-producers, employees and representatives shall agree to be bound by and consent to the AAS confidentiality and non-disclosure provisions contained in this agreement.
2.8 At all times, Independent Contractor shall maintain in full force and effect all licenses and permits required for Independent Contractor, its employees and subproducers to perform under this Agreement. At all times, Independent Contractor, its employees and sub-producers shall meet the qualifications required by AAS to obtain Errors & Omissions Liability coverage.
2.9 In order for Independent Contractor to secure the exclusive right (among AAS’ other Independent Contractors) to solicit or sell to a specific prospect, Independent Contractor is responsible for recording the prospect’s names) in AAS’ prospect data base. However, AAS shall have the right to develop and establish practices and/or guidelines regarding what an Independent Contractor mustdo to maintain the exclusive right to solicit or sell to a prospect.
3. ABILITY / WILLINGNESS TO CONTRACT.
3.1 Independent Contractor and AAS each warrant and represent to one another that they are under no contractual, judicial or other restraint which impairs their right or legal ability to enter into this Agreement and to carry out their duties and responsibilities hereunder.
3.2 In addition, Independent Contractor acknowledges and agrees that the protective and restrictive covenants contained in this Agreement are reasonable and necessary for the protection of AAS’ legitimate business interests, are not greater than necessary for AAS’ protection, do not impose a greater restraint than necessary to protect the Goodwill or other business interests of AAS and will not prevent Independent Contractor from earning an income should this Agreement be terminated by AAS or Independent Contractor.
4.1 This Agreement shall be effective on the date that it is accepted by AAS as noted in the signature blank and shall continue until terminated as provided herein.
5. COMPENSATION.5.1 Independent Contractor shall be compensated by AAS in the form of a portion of gross commissions and other fees received by AAS in connection with Accounts that are developed or produced by Independent Contractor, as set forth in the Commission/ Compensation Schedule attached to this Agreement as Exhibit “A”. The frequency of payment to Independent Contractor shall be on a monthly basis or as established by usual and customary standards.
5.2 In addition to minimum monthly charges, AAS shall deduct from the compensation due to Independent Contractor assessments for the cost of errors and omissions liability insurance & deductibles and mandatory and optional software charges associated with AAS’ agency management system. Those charges will be on an actual cost basis.
5.3 Accounting codes shall be assigned as necessary to track all of Independent Contractor’s production so that identification of all business can be determined. Independent Contractor shall be provided with reasonable data regarding his/her production and receivables in connection therewith in order to manage the books of business for which he/she is responsible.
5.4 The term “commissions received by AAS” as used in this Agreement shall apply to commissions on business solicited and developed by Independent Contractor which is submitted, entered and paid by the last business day of each month. Independent Contractor’s share of such commissions shall be credited to his/her Producer Statement as of the close of business each month. The term “commissions received by AAS”, however, shall not include any policy fees, profit sharing commissions, overrides, bonuses or contingency fees paid for the placement of same with AAS .
5.5 For agency-billed business, all commissions shall be credited to Independent Contractor at the close of the month in which the policies are invoiced into AAS’ accounting system and AAS has been paid. For direct-billed or monthly-reporting policies, credit to Independent Contractor shall be made in the month that the commissions are received by AAS from the insurance company or other provider.
5.6 Independent Contractor agrees that the performance of his/her obligations and duties under this Agreement require that he/she have an automobile available for use on a daily basis. Independent Contractor agrees to provide such automobile usage at his/her expense, including all gasoline, repairs, insurance and other costs associated therewith. In addition, Independent Contractor agrees at all times during the term of this Agreement that he/she will procure and maintain in effect Automobile Liability Insurance providing coverage for the automobile(s) used, including Independent Contractor’s business use thereof. In no event shall the limits of said insurance be less than $250,000 per person, $500,000 peroccurrence for Bodily Injury Liability and $250,000 per occurrence for Property Damage Liability; or a combined single limit of not less than $500,000 per occurrence. Independent Contractor shall provide AAS proper evidence of such insurance coverage each year as his/her policy renews. Independent Contractor hereby agrees to defend, indemnify and hold AAS harmless from any and all liability, claims or damages of whatever nature that may arise as a result of Independent Contractor’s use and operation of any automobile during the performance of any duties directly or indirectly for AAS.
5.7 If Independent Contractor maintains an office, then Independent Contractor agrees to maintain in effect during the term of this agreement, Commercial General Liability Insurance covering those premises and operations. In no event shall the limits of said insurance have a combined single limit of less than $1,000,000 per occurrence. In addition, AAS shall be named as an Additional Insured under such coverage.
5.8 AAS shall have the right to amend or change the Commission I Compensation Schedule by giving Independent Contractor not less than ninety days (90) days’ written notice setting forth the changes or amendments. Such changes or amendments shall become effective for business entered in AAS’s Accounting system after the ninetieth (90th) day.
6. COLLECTIONS AND RETURNS.
6.1 The parties hereby agree that Independent Contractor shall be responsible to collect all premiums and other fees due in connection with business produced or handled by Independent Contractor during the term of this Agreement, in accordance with the practices and procedures established by AAS.
6.2 Premiums that have been entered into AAS’ Accounting system but which have not been received by AAS by the end of the monthly accounting period shall be charged back or debited to Independent Contractor. In the event Independent Contractor is able to collect either full or partial payment of any amounts which were charged-back or debited, then the amount collected, less AAS’ reasonable collection expenses, will becredited to Independent Contractor.
6.3 Any cancellations or adjustments of business developed by Independent Contractor which necessitate the return of amounts previously credited to Independent Contractor will be charged back to Independent Contractor at the same percentage rate as was in effect at the time the commission or fee was credited to Independent Contractor.
6.4 AAS retains the right to waive or modify collection terms for a selected Policy or Account. Such requests will be considered on an individual basis. Any forbearance, waiver, modification, or adjustment made by AAS for a single Policy or Account shall not be a waiver of AAS’ right to enforce established, standard practices with regard to other or future situations.
6.5 Independent Contractor agrees to remit to AAS within seven (7) days of receipt all monies he/she receives in payment of premiums on policies written through AAS or in payment of any other products or services sold through AAS, whether or not such business is produced by Independent Contractor. All funds collected or held by Independent Contractor shall be held in a fiduciary capacity for AAS.
7. RIGHT OF OFF-SET and CREDIT BALANCES
7.1 In addition to any other rights or remedies which AAS may be entitled to exercise under this Agreement, AAS shall be entitled to off-set any amounts due or payable by Independent Contractor to AAS from any amounts owed by AAS to Independent Contractor under this Agreement. In this regard, AAS shall have a lien on the book of business of Independent Contractor. To that extent, AAS shall be authorized to file aUCC-1 Financing Statement to secure the book of business in each state that Independent Contractor does business. Further, should there be a default or termination under the terms of this agreement for any reason, AAS shall be permitted to file a UCC1 Financing Statement to secure a lien for amounts owed to AAS on the assets, accounts, inventory, receivables, furniture, fixture and equipment of Independent Contractor.
7.2 To the extent that Independent Contractor maintains a credit balance with AAS for policies placed but unpaid, or for any other reason, Independent Contractor agrees to pay to AAS interest on the credit balance at the rate of 1.5% per month until the balance is paid in full. Interest shall be chargeable thirty days following receipt of any statement showing a credit balance. If Independent Contractor fails or refuses to pay the statement balance due, AAS shall have the option to declare a default under this Agreement, revoke the software license granting access to Independent Contractor or take any other action that AAS deems prudent under the circumstances.
8. PLACEMENT OF BUSINESS.
8.1 The parties agree that AAS shall have the sole authority to contract with insurance companies, general agents and other suppliers to provide products and services to the Accounts produced or serviced by Independent Contractor.
8.2 During the term of this Agreement, Independent Contractor shall not place insurance (whether property and casualty, or surety, or life, health and accident, or any other type of business), financial services business and/or risk management services directly with an insurance company, general agent or other entity, other than under the production agreements of such entities with AAS. Further, AAS shall be the sole judge of whether it will attempt to place risks submitted by Independent Contractor, and AAS shall incur no liability for failure to place or accept any risk.
8.3 Further and to the extent that the placement of insurance, financial servicesbusiness, and/or risk management services is not be covered under the Independent Contractor’s errors & omissions Insurance, Independent Contracts agrees to hold AAS harmless from any uninsured placement risk.
9. OWNERSHIP.9.1 The parties hereby acknowledge and agree that Independent Contractor shall retain all equitable interests in the Expiration Rights and renewal rights associated with the Accounts except as provided otherwise herein.
9.2 The parties further stipulate and understand that Independent Contractor shall have no ownership interest or rights in the Restricted Accounts of AAS.
9.3 In the event any person or entity not a party to this Agreement asserts a claim with respect to the ownership of an Account placed by Independent Contractor with AAS or any right to share in the commission income associated with such business, Independent Contractor hereby agrees to defend, hold harmless and indemnify AAS from any claim, loss, damage or expense in connection with such claim, and if any said claim is successful, Independent Contractor shall guarantee that AAS receives its commission income on those Accounts.
9.4 Independent Contractor must notify AAS and receive approval prior to a change in any ownership of the stock/interest in the Independent Contractor or change in any principal officer and/or managing person of the Independent Contractor. AAS will not unreasonably withhold approval of the change so long as all state licensing and terms of this agreement are met and agreed to by the new owner and/or new stock/interest holder, including the protective covenants contained herein.
9.5 If due to death or permanent disablement Independent Contractor is unable to perform his duties, a family member or legal representative of the Independent Contractor can continue this Agreement as long as the state licensing and terms of this agreement are met and agreed to by said person or legal representative. Family member and/or legal representative agree to sign the most recent AAS contract. In case of death or permanent disablement of the Independent Contractor, during the term this Agreement, any monies due IndependentContractor from AAS under this Agreement up to the date of death shall be paid to Independent Contractor’s legal representative or estate as determined by AAS. Upon payment, AAS shall be released and relieved of further obligation to make further payments.
10. CONFIDENTIALITY OF INFORMATION.10.1 Independent Contractor hereby agrees that all information concerning the Restricted Accounts and the operations of AAS (including, but not limited to, expiration data and other records and information with respect thereto, as well as any lists or records of leads or prospects) is Confidential Information I Trade Secrets which constitutes a proprietary asset of AAS and will be treated as such by Independent Contractor. Independent Contractor will not, during the course of this Agreement (except for the benefit of AAS) or thereafter, directly or indirectly, make use of any such proprietary assets, Trade Secrets, or any other Confidential Information of AAS or the other individuals or agencies that may be or may havebeen associated with AAS for their own benefit, nor divulge any such information to anyone nor allow anyone to use such information without the express written approval of AAS.
10.2 AAS hereby agrees that all information concerning the Accounts and the operations of Independent Contractor (including, but not limited to, expiration data and other records and information with respect thereto, as well as any lists or records of leads or prospects) is Confidential Information I Trade Secrets which constitutes a proprietary asset of Independent Contractor and will be treated as such by AAS. AAS will not, during the course of this Agreement or thereafter, directly or indirectly, make use of any such proprietary assets, Trade Secrets, or any other Confidential Information of Independent Contractor for their own benefit, nor divulge any such information to anyone nor allow anyone to use such information without the express written approval of Independent Contractor.
10.3 Independent Contractor acknowledges that AAS’ business is a highly competitive business; that AAS’ Confidential Information constitutes a valuable, special and unique asset used by AAS in its business; and that protection of such Confidential Information against unauthorized disclosure and use is of critical importance to AAS. Independent Contractor hereby agrees that all software, documentation, modifications to systems or other documentation and inventions, as well as all papers, records and other materials prepared or produced by Independent Contractor under this Agreement shall be the sole and exclusive property of AAS to the extent that same is related to the “core business” of AAS (collectively the “Developments”). Independent Contractor agrees that the Developments shall be works made for hire and that AAS shall retain all copyright, patent, trade secret, trademark and any other intellectual property rights (“Intellectual Property Rights”) in Developments. Independent Contractor hereby assigns to AAS all right, title and interest and all Intellectual Property Rights in the Developments and extensions and renewals thereof. Independent Contractor agrees to execute a written assignment of such rights in the Developments to AAS and any other documents necessary for AAS to establish, preserve or enforce its Intellectual Property Rights in the Developments, if so requested by AAS. Independent Contractor hereby agreesnot to assert at any time, and otherwise waives any rights that Independent Contractor may have in the Developments, and Independent Contractor hereby assigns to AAS all moral rights therein. Independent Contractor shall provide complete copies of all Developments to AAS unless otherwise directed by AAS in writing.
10.4 In addition, Independent Contractor will also have access to AAS’ data processing / AAS management system, with authority to access Confidential Information I Trade Secrets while working at AAS’ premises and from other remote locations. In consideration of AAS providing Independent Contractor access to such Confidential Information I Trade Secrets and data processing system, Independent Contractor agrees that he/she will maintain such Confidential Information / Trade Secrets in strict confidence, and will not disclose it to anyone without AAS’ prior written consent. Independent Contractor will not use, or permit others to use, the Confidential Information / Trade Secrets for any purpose otherthan the furtherance of AAS’ business interest.
11. PROTECTIVE COVENANTS AND RESTRICTIONS:11.1 In consideration of AAS’ providing Independent Contractor access to certain Confidential Information, proprietary assets and other valuable information, as well as providing ongoing training in connection with products and services offered by AAS, as well as special training regarding the specific methods and procedures of AAS’ core business, Independent Contractor agrees that during the term of this Agreement and for a period of twenty-four (24) months after the termination of this Agreement, however caused, Independent Contractor will not directly or indirectly,on his/her own behalf or as an employee, agent, associate or co-owner with anyone else, (i) divert business from or interfere with the customers or Goodwill of AAS or any of the other individuals or agencies associated with AAS; (ii) solicit, attempt to obtain or accept insurance, financial services business or risk management services of any nature from any of the Restricted Accounts of AAS; or (iii) aid or assist anyone else in soliciting, attempting to obtain or accepting insurance, financial services business or risk management services of any nature from any ofthe restricted Accounts. Further, Independent Contractor acknowledges receiving a direct benefit upon execution of this Agreement by way of AAS providing said Confidential Information, Trade Information and Proprietary Information to Independent Contractor and that some of that benefit is derived from access to data contained within AAS’ computer systems that Independent Contractor will have immediate use and benefit of. Independent Contractor acknowledges that AAS’ valuable business model provides a direct competitive edge to Independent Contractor when approaching customers and selling products and services. Independent Contractor acknowledges that AAS has only agreed to supply said information in exchange for Independent Contractor’s agreement to these restrictive covenants.
11.2 Independent Contractor agrees that, during the term of this Agreement and for a period of twenty four (24) months following its termination, Independent Contractor will not directly or indirectly invest in or engage in any business that performs the same or similar functions as AAS’ core business, and agrees not to accept employment with or render services with any business performing the same or similar core business functions as AAS. Independent Contractor and AAS agree that this restriction is intended to cover only the core business of AAS and not to preclude Independent Contractor from providing general insurance and financial sales services to the public following the termination of this Agreement.
11.3 The promises and covenants provided in this Agreement shall apply within the counties in which Independent Contractor and/or AAS maintain an office, and shall apply outside those counties only to the extent that the protected customers or Accounts have operations, locations or affiliates.
11.4 The parties further agree that, in the event the provisions of this Agreement are deemed to exceed the time, scope or geographic limitations permitted by applicable laws, then such provisions shall be reformed to the maximum time, scope or geographic limitation permitted.
11.5 These restrictive covenants shall survive termination of this Agreement. Additionally, if this Agreement, either in whole or part, shall be extended or modified, it shall be conclusively established that said restrictive covenants shall have been extended and carried forward to the newly extended or modified agreement, unless specifically deleted by agreement.
11.6 Independent Contractor and AAS agree that during the term of this Agreement and for a period of twelve (12) months following the termination of this Agreement, Neither will directly or indirectly solicit for employment, hire or cause any employee, Independent Contractor or insurance solicitor to leave the employment of Independent Contractor or AAS, unless mutually agreed. The intention of this non-solicitation provision is to provide that Independent Contractor and AAS will not raid the employment resources of either. Independent Contractor and AAS agree not to conduct any activity which, because of the Independent Contractor’s or AAS’s offer, recommendation or referral, causes an employee of either to leave the employment of either.
11.7 Independent Contractor hereby acknowledges that a breach or threatened breach of the provisions of Sections 10 and 11 of this Agreement would cause irreparable harm to AAS or the other individuals or agencies associated with AAS, the amount of which would be impossible to calculate in monetary terms. Should Independent Contractor violate or threaten to violate those provisions of this Agreement, then AAS shall, in addition to its other rights or remedies, be entitled to a restraining order and/or injunction to restrain Independent Contractor from violation or threatened violations. Independent Contractor contractually agrees that AAS shall not be required to post a bond or other security in connection with suchrestraining order(s) and/or injunction(s).
12. ERRORS & OMISSIONS INSURANCE / DEDUCTIBLE.
12.1 Independent Contractor shall provide Errors and Omissions Insurance (hereinafter “the policy”). The policy shall be at least an A X rate by A. M. Best Co. Independent Contractor shall endorse AAS as an Additional Insured to the policy. The policy shall have a limit of liability of not less than $2,000,000.00 per occurrence.
12.1a. Independent Contractor Agrees to Hold AAS harmless from any and all E&O claims asserted against Independent Contractors and arising out of Independent Contractor accounts.
12.1b. Independent Contractor agrees to provide proof of Errors & Omissions coverage in accord with Section 12 to AAS yearly at renewal/expiration date and on or before December 1 of each year.
12.2 In the event of an E&O claim being filed against AAS and/or Independent Contractor and/or Independent Contractor’s wholly-owned corporate agency, in connection with any Account or business that is developed or solicited by Independent Contractor; then the deductible of the E&O policy shall be handled as follows:
(a) AAS shall pay 100% of the deductible for any claim that arises due solely to the acts or omissions of AAS.(b) Independent Contractor shall pay 100% of the deductible for any claim that arises due solely to the acts or omissions of Independent Contractor.
12.3 If Independent Contractor believes that AAS has unfairly categorized a claim as indicated above, Independent Contractor may request that AAS’ categorization be reviewed by a three (3) person committee, made up of one (1) representative of AAS, one (1) representative of Independent Contractor and one (1) Independent Contractor Agent of AAS to be chosen at random by AAS.
12.4 Upon termination of this Agreement, Independent Contractor shall provide to AAS proof that Independent Contractor has paid for at least one full year of continuing errors and omissions coverage and protection to AAS providing for retroactive coverage extending from the date of this agreement until the date of termination. Should Independent Contractor fail or refuse to provide proof of coverage, AAS can purchase said coverage to protect itself for any said claim and either deduct said insurance cost from amounts due Independent Contractor or seek reimbursement for said amounts directly from Independent Contractor.
13.1. This Agreement shall terminate upon the occurrence of any of the following events:
(a) Mutual written agreement signed by both parties as of the date agreed to by the parties;
(b) Upon the expiration of ninety (90) days following written notice by AAS or Independent Contractor of their intent to terminate the Agreement;
13.2. AAS may immediately terminate Independent Contractor’s services and rights under this Agreement for cause at any time upon written notice to Independent Contractor upon the occurrence of any of the following events:
(a) Independent Contractor’s failure to maintain the appropriate license(s) as required to carry out his/her duties and responsibilities under this Agreement with ten (10) days’ notice to Independent Contractor providing that Independent Contractor is unable to prove within the notice period that said licenses have been reinstated or renewed; or
(b) Independent Contractor being charged with commission of a crime involving moral turpitude or such other crime that AAS believes in its sole discretion could impact the reputation of AAS; or
(c) Breach or threatened breach by Independent Contractor of any of Restrictive Covenants contained in this Agreement; or
(d) Breach or threatened breach of any provision of this Agreement.
13.3. The termination of this Agreement for any reason shall not relieve Independent Contractor of any of the restrictive covenants or requirements set forth in this agreement.
14. TERMINATION STEPS
In an effort to wind up the accounts of the Independent Contractor upon termination under Section 14, the parties agree that the disposition of the book or accounts of Independent Contractor may be handled as follows:
14.1 Independent Contractor may elect in writing to retain his book or accounts in accord with provisions of this agreement; or
14.2 Independent Contractor may sell his book or accounts either to another AAS approved Employee, AAS approved Independent Contractor, or an AAS approved Agent at a negotiated price; or
14.3 Independent Contractor may sell his book of business or accounts to a third-party at a negotiated price. AAS has the right of first refusal for any offer made to Independent Contractor for his book or accounts. However, the third party may apply and become an AAS Independent Contractor as part of the sale and as such, AAS may waive the right of first refusal. If Independent Contractor is required to offer the book or accounts to AAS, Independent Contractor must advise AAS in writing of the offer received, provide a copy of the offer, certify that the offer is from an independent third party purchaser, and provide AAS forty five (45) days to accept or reject the offer. If AAS accepts the offer, it must close on the sale within forty-five (45) days of its election to purchase the book or accounts from Independent Contractor unless the parties agree otherwise or are prevented from closing due to reasonable causes.
14.4 In the absence of a third-party purchaser, Independent Contractor may sell its book to AAS at a mutually agreed upon price and under mutually agreed upon terms. AAS retains the right to decline to purchase the book of Independent Contractor.
14.5 In the event that this Independent Contractor Agreement terminates for any reason within the first three (3) years from the date of execution, Independent Contractor shall pay to AAS a termination fee of five (5%) percent for administratively servicing the Accounts pending the transfer as calculated herein. If this Agreement terminates for any reason after the first three (3) years from the date of execution, Independent Contractorwill pay to AAS a three (3%) percent termination fee for administratively servicing the Accounts pending the transfer. This fee shall be calculated by multiplying the termination fee percentage by the prior twelve months’ commissions as calculated from the earlier of the termination date or the notice of termination date. Independent Contractor authorizes AAS to deduct said fee from any commissions to be paid to AAS under this Agreement or from any other fees owed or due AAS under this Agreement or directly by payment from Independent Contractor to AAS at termination.
15. POST TERMINATION RECORDS/ACCOUNTS.
15.1 Upon termination of this Agreement for any reason, Independent Contractor shall surrender to AAS all Confidential Information (including, but not limited to, business plans, practices and operations of AAS, as well as all lists, charts, schedules, reports, photos, diagrams, financial statements, books, records and all copies thereof) of AAS, and any and all other property belonging to AAS whatsoever, which are in the possession of Independent Contractor or under his/her control. Confidential Information may be in any tangible form, including without limitation written or printed text or documents; audio, visual or digital compilations; and computer disks and tapes, whether machine readable or user readable. Independent Contractor specifically agrees not retain any copies of any documents subject to this paragraph, whether said is digital or otherwise.
15.2 If following termination, Independent Contractor elects in writing to retain said Accounts, Independent Contractor will be allowed to duplicate (at Independent Contractor’s cost or expense) and retain copies of all files, underwriting information, claim histories and correspondence in connection with the Accounts of Independent Contractor. AAS will also provide expiration lists and/or help coordinate the orderly transfer of the Accounts. AAS will continue to provide Accounting for production, cancellations, audits and other adjustments and continue to credit Independent Contractor his/her percentage of any commissions that are received by AAS on Accounts, according to the terms of this Agreement until the next anniversary orexpiration of any in force Policy. Further, AAS and Independent Contractor agree to develop a mutually-agreeable plan to transfer the servicing of any Accounts. Independent Contractor will be allowed to maintain such policy(ies) with AAS until the expiration date of the policy. However, Independent Contractor waives any right to contingency/profit sharing bonus and commissions on remaining Accounts.
15.3 If following termination, Independent Contractor elects in writing to retain said Accounts, it is the intent of this Agreement that after termination, the Independent Contractor should be able to continue his Agency business independently as he was doing prior to entering of this Agreement or he can join any other Insurance Agent or Group. AAS will cooperate with Independent Contractor and will allow Independent Contractor to transfer the Accounts and Books of business in an orderly manner at renewals without hurting the interest of any Party. If required by any Carrier or MGA,AAS will issue the consent letter to transfer the Accounts. However, AAS shall not have any obligation to do so if Independent Contract owes money to AAS or has any outstanding financial obligation to AAS.
16. AAS Sales Options.
16.1 In the event that AAS has an initial public offering, is wholly acquired, or otherwise sold (a “Sale Transaction”), this agreement shall be assigned, transferred, sold or terminated at the option of AAS.
17. DISPUTE RESOLUTION
17.1 If a dispute arises out of an alleged breach of this Agreement (excluding a request for injunctive relief), or the relationship created thereby, the complaining Party must first try, in good faith, to settle any such dispute by mediation using a qualified attorney-mediator located in Denton County, Texas. Mediation shall be an informal process to allow the parties to attempt to resolve the dispute. Mediation shall be totally voluntary and as such shall be assumed to have not been conducted if not initiated within 45 days following the later of the date the dispute arises or the date the Agreement is terminated by a party hereunder.
17.2 If mediation is unsuccessful, and/or has not occurred, any dispute may at the sole election of AAS be submitted to arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, Dallas Texas. Venue for the arbitration shall be at an attorney office located in Denton County, Texas unless otherwise agreed to by AAS. Thereafter, all procedures are governed by the AAA rules. AAS may in its sole discretion elect to submit to arbitration those aspects of any claim that do not involve injunctive relief and may submit those claims relating to a breach or enforcement of the restrictive covenants to a Court of Law in Denton County, Texas.
17.3 The parties expressly agree to the jurisdiction of the State of Texas with venue for any action in Denton County, Texas.
17.4 Cost/Attorney Fees- In the event that any action, suit or proceeding, in law or in equity, is brought to enforce the provisions of this Agreement and such action results in the award of a judgment for monetary damages, the prevailing party shall also be entitled to recover reasonable and necessary attorney’s fees incurred, and court costs. However, only AAS shall be entitled to seek and recover reasonable and necessary attorney’s fees in any claim of breach of the restrictive covenants whether through arbitration or otherwise.
17.5 Waiver of Jury- Independent Contractor consents to waive any action or proceeding be heard by a Jury. This waiver shall be irrevocable and shall be at the election of AAS.
18.1 This Agreement supersedes any and all other agreements, oral or written, between the parties hereto and represents the entire agreement between the parties and may only be amended in writing, signed by all parties. This Agreement may be amended by AAS by providing Independent Contractor Thirty (30) days’ written notice specifying the change(s) to be made. Any changes will become effective after the thirtieth day following notice unless the changes involves the compensation of Independent Contractor than the notice period is ninety (90) days.
18.2 This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. All obligations of the parties created hereunder are performable in Denton County, Texas, and venue of any action or suit in connection with this Agreement shall be in Denton County, Texas.
18.3 No waiver by either party to this Agreement of any breach by the other party of any obligation under this Agreement shall constitute a waiver of a subsequent breach of any obligation, nor shall any forbearance by either party in the enforcement of any right hereunder be considered a waiver of such right.
18.4 Independent Contractor agrees to abide by all rules and regulations of AAS with respect to, without limitation, solicitation, underwriting, extension of credit, use of AAS materials and equipment, attendance at meetings and other operational or management directives.
18.5 The section headings in this Agreement are for the convenience of the parties and in no way alter, modify or amend, limit or restrict the contractual obligations of the parties.
18.6 The terms of this Agreement shall inure to the benefit of and be binding upon the legal representatives, heirs, successors and assigns of the parties hereto, except to the extent it provides for performance of personal services. Independent Contractor’s rights and obligations under this Agreement may not be assigned or transferred, in whole or in part, without the prior written consent of AAS. Independent Contractor acknowledges that AAS may assign its rights and obligations under this Agreement without having to obtain Independent Contractor’s prior approval.
18.7 In the event that any of the provisions, or portions thereof, of this Agreement are held to be illegal, invalid or unenforceable by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected by the illegal, invalid or unenforceable provision or by its severance here from.
18.8 Notices provided under this Agreement may be accomplished by certified mail, return receipt requested, e-mail if a read receipt is received as proof of service, or by facsimile transmission to the address set forth below. Either party may modify, update or change said notice address by sending notice of change of address to the other party at the address below.
18.9 Independent Contractor agrees to provide a year- end accounting, if requested, to AAS to confirm compliance with this Independent ContractorAgreement and any addendums. 18.10 Independent Contractor agrees to hold harmless, reimburse, and indemnify AAS for any losses, payments, costs or expenses (including attorney’s fees incurred by AAS) that result to AAS from any third party claims against Independent Contractor or claims that arise against AAS as a result of Independent Contractor’s actions, conduct, or participation in this Agreement.
Accepted by Agents Alliance Services, LTD on in Denton County, Texas.
AGENTS ALLIANCE SERVICES, LTD. (“AAS”)
Executed and agreed to on this by Independent Contractor, with the express authority and permission to act and be bound; and by individually who has identified him/her as the principal agent of the Independent Contractor. All executing parties below agree to be bound by the terms of this Independent Contractor Agreement, including but not limited to, the restrictive covenants and conditions contained therein.
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Document Name: Insurance Partner Group LLC Agreement
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