Producer Agreement

A. Statement of Intent

1. Broker and KLEIN RISK desire, from time to time and at the request of the Broker, that KLEIN RISK place certain policies of insurance with insurers on behalf of insureds represented by Broker. The Parties agree to be bound by the following provisions with respect to their dealings with one another in connection with the placing of insurance policies.

B. Obligations and Representations of Klein Risk

In connection with KLEIN RISK placing said policies of insurance, KLEIN RISK agrees to the following and makes the following representations and warranties:

1. KLEIN RISK will use its best efforts to place with insurers such risks as asked by Broker to be placed with insurers.
2. KLEIN RISK is a licensed agency and shall always maintain all applicable licenses and authorizations to transact insurance business in each jurisdiction in which it places said policies of insurance.
3. KLEIN RISK is an authorized agent of the insurer with whom it places insurance.
4. Broker shall retain use and control of the expirations, provided this Agreement remains in full force and effect and has not been terminated by either party, and the insured has not executed or provided KLEIN RISK with any broker of record letter or other designation naming a different broker of record.

C. Obligations and Representations of Broker

KLEIN RISK has relied upon the following material representations and warranties in entering into this Agreement.

1. Broker is a retail broker and as such is the representative of the insured, and no other broker, entity or individual is due or will receive a commission in connection with the placement of the policy(ies) by KLEIN RISK, subject to Paragraph F below. Broker possesses all licenses and authorizations to do business, and to place insurance, with all governmental bodies or regulatory agencies in each jurisdiction in which Broker transacts business, and is and will remain in compliance with all applicable state and federal laws and regulations.
2. Broker shall always have in place and maintain Errors & Omissions coverage with a minimum policy limit of $1,000,000 per occurrence, with a carrier rated A-, VII, or better by A.M. Best.
3. Broker agrees to keep in strict confidence and not to disclose any proprietary or confidential information about KLEIN RISK that Broker learns of or obtains because of this Agreement, unless such information is otherwise in the public domain.

D. Mutual Covenants Between the Parties

1. Broker shall promptly report to KLEIN RISK in writing all claims, suits, and notices of loss.
2. Broker shall accept KLEIN RISK's billings, which may take the form of binders, invoices, statements or similar communications. The net balance due shall be paid by the billing due date, irrespective of whether a policy has been delivered to Broker by such date.
3. Broker promises to pay all premiums including deposit, earned, extension and adjustable premiums due KLEIN RISK on insurance bound or written hereunder (excluding Non-Guaranteed Premiums), whether or not the premiums are collected by Broker. Any credit extended to the insured or others shall be at the sole risk of Broker.
4. Broker accepts full and entire responsibility for the collection and payment of all premiums (including minimum earned premiums), countersignature fees, resulting state charges and any other applicable fees and taxes, and agrees to reimburse KLEIN RISK for all reasonable collection costs, including attorneys' fees and court costs, if payment is not remitted.
5. In the event of cancellation or modification resulting in a refund obligation, KLEIN RISK's sole obligation is to remit the required premium or premium tax directly to Broker rather than to the insured, a premium finance company or any other party. No premium tax is returnable until recovered by KLEIN RISK, and never in excess of the amount recovered.
6. KLEIN RISK shall allow Broker, as commission, a percentage of the premium written at a rate agreed upon in writing. Broker will pay KLEIN RISK a return commission at the same rate on any return premium, including return premiums on cancellations.
7. Broker shall hold funds in trust for business generated under this Agreement to the extent required by the insurance laws of each state in which it conducts business.
8. Subject to applicable legal requirements and insurance contract provisions, KLEIN RISK shall have the right to cancel any binder, policy or contract of insurance issued.
9. Broker is neither the agent of nor has authority to bind KLEIN RISK or any of its principals. KLEIN RISK assumes no responsibility toward any applicant, insured or sub-producer regarding the adequacy, amount or form of coverage, and Broker agrees to hold KLEIN RISK harmless for following Broker's instructions. KLEIN RISK holds Broker harmless from any claim asserted against Broker due to KLEIN RISK's failure to follow Broker's instructions.
10. Broker agrees to provide KLEIN RISK all required affidavits of due diligence and other documents needed to comply on a timely basis with the filing requirements of any applicable state surplus lines law.
11. This Agreement may be canceled at any time by 30 days' written notice by either party, but cancellation shall not alter the continued application of this Agreement to policies effected prior to cancellation. If either party fails to fulfill its responsibilities, the other party may terminate immediately.

E. Certificates of Insurance

Broker is authorized to issue certificates of insurance under the following procedures:

1. Use only ACORD Certificate of Insurance forms. Any other form requires prior approval from KLEIN RISK.
2. All information — Named Insured, Limits, Policy Dates, Policy Numbers and Company Names — must be exactly as shown on the insured's policy or binder. No changes are permitted except limits lower than those stated on the policy.
3. No Additional Interests may be shown unless specifically endorsed on the policy; the company or ISO Additional Interest Endorsement form number must also be shown.
4. No Waiver of Subrogation and/or Primary/Non-Contributory wording is to be shown on the certificate.
5. Any additions, deletions or alterations to preprinted ACORD wording require prior written approval, other than deleting "will endeavor to" and adding "shall" in the cancellation provision.
6. It is Broker's responsibility to notify all Additional Interests shown on certificates in the event of policy cancellation. KLEIN RISK assumes no responsibility for acts of Broker and neither reviews nor retains copies of certificates issued by Broker.

F. Wholesale Brokering

Broker is a retail broker representing the insured and no other broker is due commission. In certain limited instances KLEIN RISK may permit Broker to serve as a wholesale broker, provided:

1. Broker discloses in writing to KLEIN RISK that it is acting as a wholesale broker with respect to specific insureds, each time a policy is placed.
2. KLEIN RISK has no obligation to pay commission or monies to any other broker, and Broker indemnifies and holds KLEIN RISK harmless from any claims or suits for said commissions.
3. Broker represents that all other brokers are fully licensed and authorized to transact insurance business in each applicable jurisdiction.
4. Broker indemnifies and holds KLEIN RISK harmless for any suits, causes of action or claims asserted against KLEIN RISK because of the conduct of any other broker involved in the underlying transaction.

G. Miscellaneous Provisions

1. Other Documents. The parties agree to execute such further documents as may be reasonably necessary to implement this Agreement.
2. Ambiguity. Any ambiguity shall not be construed for or against any party, but rather fairly and reasonably to effectuate the parties' intentions.
3. Advice of Counsel. The parties and signatories are represented by independent counsel with whom each has fully discussed these terms.
4. Attorneys' Fees. A breaching party shall pay the reasonable attorneys' fees and related legal expenses of the non-breaching party; the court shall award the prevailing party fees and costs in addition to any other recovery.
5. Authorization. Each person executing this Agreement represents and warrants they are fully authorized to do so on behalf of their party.
6. Free Will. Each signatory executes this Agreement of their own free will, under no threat, coercion or distress, acting on independent judgment and advice of counsel.
7. Waiver. No breach may be waived except in writing executed by the waiving party; waiver of one breach is not waiver of any other.
8. Amendment. This Agreement may be amended only by a written agreement executed by the parties-in-interest at the time of modification.
9. Entire Agreement. This Agreement contains the entire agreement concerning its subject matter and supersedes all prior negotiations and proposed agreements, whether written or oral.
10. Governing Law. This Agreement is executed and delivered within the State of New Jersey, is governed by New Jersey law, and any dispute shall be resolved exclusively in the courts of New Jersey. Any provision held invalid shall be severed and the remainder shall remain in force.
11. Assignment. This Agreement may not be assigned by any party without the express written authorization and acknowledgment of the other party.