Insurance Contribution Agreement by and between Cain Watters & Associates, P.L.L.C. and Tectonic Holdings, LLC, dated February 5, 2015
EX-10.21 31 s002654x6_ex10-21.htm EXHIBIT 10.21
INSURANCE CONTRIBUTION AGREEMENT
This Insurance Contribution Agreement (the “Agreement”) is entered into effective as of February 5, 2015 (the “Effective Date”), by and between Cain Watters & Associates, P.L.L.C., a Texas professional limited liability company (“CWA”), and Tectonic Holdings LLC, a Texas limited liability company (the “Company”). CWA and the Company are sometimes individually referred to herein as a “Party” and collectively as the “Parties.”
WHEREAS, in connection with the investment by the Sherman (hereafter defined), CWA has agreed to assist the Company in the establishment of an insurance agency; and
WHEREAS, the Company and CWA desire to have the Company establish a subsidiary that will serve as an insurance agency to serve CWA’s clients and third party clients, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties hereto agree as follows:
1. Agreement to Establish Insurance Agency.
(a) After the Effective Date, the Company will use commercially reasonable efforts to form a subsidiary (“Insurance Sub”) that will seek a license issued by the state of Texas to serve as an insurance agent and appropriately capitalize and staff such subsidiary to perform such services;
(b) At such time as Insurance Sub is appropriately licensed and staffed to serve CWA’s clients, CWA will refer, as it deems appropriate, clients to Insurance Sub for the sale by Insurance Sub of insurance products and services to CWA’s clients, consistent with the recommendations of CWA’s planner;
(c) Insurance Sub shall pay to CWA, if appropriately licensed, a referral fee based on the insurance revenues generated by CWA based on market-based referral fee rates for similar referrals, which referral fee is estimated to be 33% of gross revenues.
(d) Insurance Sub shall also sell insurance products to third parties.
2. Term. The term of this Agreement shall commence on the Effective Date and continue thereafter until the earliest of:
a. period mutually agreed between the Buyer (hereafter defined), the Company and CWA after a Change of Control (hereafter defined) of the Company or Insurance Sub has occurred; or
b. the dissolution or liquidation of either Party.
3. A “Change of Control” of the Company or Insurance Sub (as the case may be) shall occur under the following circumstances: (a) the sale of either the Company or Insurance Sub to a third party (whether directly or indirectly), whether in a single or series of related transactions, or (b) the sale of all or substantially all of the assets of the Company or Insurance Sub, whether in a single or series of transactions, to a third party buyer (in each case, a “Buyer”). In the event of such a sale, CWA and the Company or Insurance Sub will negotiate with the Buyer to extend the term of this Agreement for a length of time that is reasonably satisfactory to the Buyer and addresses the interests of the Buyer in buying an ongoing business and provides a reasonably optimal price for the equityholders of the Company or Insurance Sub.
4. Confidentiality. CWA and the Company agree that all information communicated to each other during the term of this Agreement shall be received in strict confidence and shall be used only for purposes of performing the Services and that no such information shall be disclosed by CWA, the Company, its agents or employees without the other’s prior written consent, except to the extent required to perform the Services. Additionally, CWA and the Company agree to take all reasonable precautions to prevent the disclosure of such information to third parties, except as may be necessary under legal, accounting or regulatory laws or requirements.
5. Effect of Termination. Upon the termination of this Agreement, it is agreed by both the Company and CWA that:
a. All records in the possession of CWA pertaining to the operation of the Company, together with all items of personal property owned by the Company in CWA’s possession, shall be delivered to the Company;
b. All records in the possession of the Company pertaining to the operation of CWA, together with all items of personal property owned by CWA in the Company’s possession, shall be delivered to CWA; and
c. Any and all fees due and payable as of the termination date shall be due and payable by CWA to the Company.
6. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by an internationally recognized overnight courier; (c) on the date sent by facsimile or electronic mail transmission of a PDF document (with confirmation of transmission in the case of facsimile) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 6):
Notices to the Company:
Tectonic Holdings LLC
6900 N. Dallas Parkway, Suite 500
Plano, Texas 75024
Facsimile: 972 ###-###-####
Notices to CWA:
Cain Watters & Associates, P.L.L.C.
6900 N. Dallas Parkway, Suite 500
Plano, Texas 75024
Attention: Daniel C. Wicker
Facsimile: 972 ###-###-####
Notices to Sherman:
Mr. A. Haag Sherman
2520 Pelham Drive
Houston, Texas 77019
7. Relationship of the Parties.
(a) CWA is an independent contractor under this Agreement. Except as expressly set forth herein, CWA does not have the authority to, and CWA hereby agrees that it shall not, directly or indirectly, contract for any obligations of any kind in the name of or chargeable against the Company without the prior written consent of the Company. All persons providing services to the Company shall be employees or independent contractors under the supervision of CWA, and shall not be employees of the Company with respect to such services. As such, CWA shall furnish all materials, supplies and personnel necessary to perform its obligations as part of the terms set forth herein, and CWA shall have the sole responsibility of paying the salaries, taxes and all other expenses relating to each employee of CWA, including those employees that provide services to the Company pursuant to this Agreement.
(b) The Company is an independent contractor under this Agreement. Except as expressly set forth herein, the Company does not have the authority to, and the Company hereby agrees that it shall not, directly or indirectly, contract for any obligations of any kind in the name of or chargeable against the Company without the prior written consent of the Company. All persons providing services to CWA shall be employees or independent contractors under the supervision of the Company, and shall not be employees of CWA with respect to such services. As such, the Company shall furnish all materials, supplies and personnel necessary to perform its obligations as part of the services set forth herein and the Company shall have the sole responsibility of paying the salaries, taxes and all other expenses relating to each employee of the Company, including those employees that provide services to CWA pursuant to this Agreement.
(c) On or about the Effective Date, A. Haag Sherman (“Sherman”) became the Chief Executive Officer and a manager of Tectonic Services, LLC, a Texas limited liability company (“MGMT”), which is the manager of the Company, which is the sole limited partner of Insurance Sub. The Parties acknowledge that Sherman would not have undertaken these positions with MGMT without CWA agreeing to, among other things, enter into this Agreement. Therefore, the Parties hereby agree that Sherman shall be, and is hereby, named as an express third-party beneficiary of this Agreement, with full rights as such.
8. Assignment. Neither this Agreement, nor any rights or obligations hereunder, shall be assignable by either Party hereto unless approved in writing by the other Party and Sherman; provided, however, that the Company may assign this Agreement to Insurance Sub without the prior consent of CWA. CWA and the Company retain the right to subcontract for performance of any portion of its duties hereunder by one or more third parties, provided that neither CWA nor the Company shall be released from its liabilities and obligations hereunder without the express written consent of Sherman.
9. Successors and Assigns Bound. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns.
10. Amendments. No amendment or modification of this Agreement shall be valid or binding upon any Party hereto unless made in writing and signed by its duly authorized officer; provided, however, the Parties may not amend or terminate this Agreement without the prior written consent of Sherman.
11. Governing Law. The validity and effect of this Agreement and the rights and obligations of the Parties hereto shall be construed and determined in accordance with the laws of the State of Texas, without regard to conflict of laws principles.
12. Entire Agreement. This Agreement contains all of the terms agreed upon by the Parties with respect to the subject matter hereof, and supersedes all prior agreements, arrangements and communications between the Parties dealing with such subject matter, whether oral or written.
13. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.
14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.
15. Arbitration. Any dispute, controversy or claim arising under or relating to this Agreement or any breach or threatened breach hereof (an “Arbitrable Dispute”) shall be resolved exclusively by final and binding arbitration in the State of Texas administered by the American Arbitration Association pursuant to its Commercial Arbitration Rules. Any demand for arbitration shall be in writing, shall be served on the other Party in the manner prescribed herein for the giving of notices, and shall set forth a short statement of the factual basis for the claim, specifying the matter or matters to be arbitrated. The Arbitrable Dispute shall be heard by a three arbitrator panel. In a three member panel arbitration, each of the two Parties to the Arbitrable Dispute shall select one independent arbitrator expert in the subject matter of the Arbitrable Dispute from that Party’s list of three independent arbitrators after the other Party (or representative, if applicable) has had the opportunity to designate as objectionable and eliminate one arbitrator from the other’s list within seven days after submission thereof. The two arbitrators so selected by the Parties shall select a third independent arbitrator expert in the matter of the Arbitrable Dispute. Any arbitration pursuant hereto shall be conducted by the Arbitrators under the guidance of the Federal Rules of Civil Procedure and the Federal Rules of Evidence, but the Arbitrators shall not be required to comply strictly with such Rules in conducting any such arbitration. All such arbitration proceedings shall take place in the State of Texas. The fees and expenses of the Arbitrators and any related costs and expenses initially shall be borne equally by the two sides to the Arbitrable Dispute. The Arbitrators shall have the authority to award any remedy or relief that a state district court of the State of Texas could order or grant, including, without limitation, specific performance of any obligation created under this Agreement, the awarding of punitive damages, the issuance of an injunction, or the imposition of sanctions for abuse or frustration of the arbitration process. The Arbitrators shall render their decision and award in writing and counterpart copies thereof shall be delivered to each Party. The decision and award of the Arbitrators shall be binding on all Parties. In rendering such decision and award, the Arbitrators shall not add to, subtract from or otherwise modify the provisions of this Agreement. Any Party to the arbitration may seek to have judgment upon the award rendered by the Arbitrators entered in any court having jurisdiction thereof. Each Party agrees that it will not file any suit, motion, petition or otherwise commence any legal action or proceeding for any matter which is required to be submitted to arbitration as contemplated herein except in connection with the enforcement of an award rendered by the Arbitrators. Upon the entry of an order dismissing or staying any action or proceeding filed contrary to the preceding sentence, the Party which filed such action or proceeding shall promptly pay to the other Party the reasonable attorney’s fees, costs and expenses incurred by such other Party prior to the entry of such order.
15. Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties hereto and Sherman, and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or shall confer upon any other person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Agreement.
16. No Strict Construction. The Parties to this Agreement have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed by their duly authorized representatives.
CAIN, WATTERS & ASSOCIATES, P.L.L.C.
|/s/ Daniel Wicker |
Signature Page to
Insurance Contribution Agreement
TECTONIC HOLDINGS, LLC
Tectonic Services, LLC,
|By:||/s/ A. Haag Sherman|
|Name:||A. Haag Sherman|
|Title:||Chief Executive Officer|
Signature Page to
Insurance Contribution Agreement