EXHIBIT 10(cn)
STATE OF TEXAS
COUNTY OF DALLAS
GUARANTY AGREEMENT
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This Agreement is effective this 1st day of September, 2003, between OLD
AMERICAN COUNTY MUTUAL FIRE INSURANCE COMPANY, an insurance company
domiciled in Texas (Company) and HALLMARK FINANCIAL SERVICES, INC. a Texas
Corporation (Guarantor).
FOR AND IN CONSIDERATION OF THE MUTUAL PREMISES AND COVENANTS SET FORTH
HEREIN, the Company and Guarantor hereby agree as follows:
PURPOSE
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The Company desires to appoint AMERICAN HALLMARK GENERAL AGENCY INC.
(Managing General Agent) a Texas Managing General Agency to act as the
Company's Managing General Agent. Guarantor wishes to facilitate such
appointment by individually guaranteeing the performance of the Managing
General Agent to the Company.
GUARANTY
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1. On September 1, 2003, the Company and the Managing General Agent
entered into a Managing General Agency Agreement (Managing General Agency
Agreement) whereby the Managing General Agent agreed to provide various
specified services to the Company for certain commissions and/or fees
specified therein.
2. Guarantor agrees to guarantee the performance of any and all
obligations of the Managing General Agent under the Managing General Agency
Agreement, including, without limitation, the payment of all funds owed to
the Company, insureds, finance companies, claimants, or agents by the
Managing General Agent and all Managing General Agent's balances arising
pursuant to such Managing General Agency Agreement. This Guaranty expressly
includes any reasonable attorneys' fees and expenses incurred by the Company
by reason of the Managing General Agent's failure to satisfy any such
obligation.
3. This Guaranty shall be absolute and unconditional. The Company shall
have the right in its sole discretion to proceed against Guarantor for any
indebtedness within the scope of this Agreement without first exhausting its
remedies against the Managing General Agent. This Guaranty is of payment,
not of collection.
4. Guarantor hereby acknowledges the adequacy and receipt of the Company's
appointment of AMERICAN HALLMARK GENERAL AGENCY, INC. as the Managing
General Agent pursuant to the Managing General Agency Agreement, any
amendment to the Managing General Agency Agreement, and any subsequent
agency agreements entered into by the parties herein as valuable
consideration for this Agreement.
TERM
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5. This Agreement shall continue in full force and effect with regard to
the obligations of Guarantor until all obligations under the Managing
General Agency Agreement are satisfied.
6. Termination of the Reinsurance Agreement and/or Managing General Agency
Agreement, however, shall not affect, in any manner, the liabilities of
Guarantor arising under this Agreement. This Agreement shall, therefore,
continue in full force and effect until the complete satisfaction of such
obligations guaranteed under this Agreement and then automatically
terminates without any notice requirements on the part of any party.
MISCELLANEOUS
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7. Provisions of this Agreement, if any, required to be approved by the
Board of Directors of the Company or Guarantor have been so approved.
8. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees.
9. The paragraph headings herein are for convenience only and shall in no
manner be construed as part of this Agreement.
10. This Agreement shall not be assigned by either party without the prior
written consent of the other party.
11. This Agreement shall be interpreted by, construed in accordance with,
and governed by the laws of the State of Texas.
12. If all, or any part of any covenant, condition or other provision of
this Agreement is declared by a court of competent jurisdiction to be
invalid and not binding, such declaration shall in no way affect the
validity of the other remaining covenants, conditions and provisions of this
Agreement.
13. This Agreement shall be binding on, inure to the benefit of and be
enforceable by either party and its respective successors and assigns.
14. This Agreement supersedes all prior agreements, written or oral,
between the parties hereto concerning this Agreement, and all such prior
agreements shall be of no further force or effect. This Agreement may be
amended or modified only by written instrument signed by both parties.
15. Each party, by his/her signature, represents and warrants that he/she
has the authority to execute this Agreement in the capacity and for the
purposes for which he/she signs.
16. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
17. This Guaranty Agreement is executed and delivered as incident to a
Managing General Agency Agreement between AMERICAN HALLMARK GENERAL AGENCY,
INC. and the Company. The agreements were negotiated, consummated and are
performable in Dallas County, Dallas, Texas.
OLD AMERICAN COUNTY MUTUAL FIRE HALLMARK FINANCIAL SERVICES INC.
INSURANCE COMPANY
By: __________________________ By: ______________________________
Xxxxx X. Xxxx, Vice President Xxxxxxx X. Xxxxxx, President & COO
