Global Surety Services, Inc.

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Global Surety Services, Inc.

1829 Capital Boulevard, Suite 103

Raleigh, North Carolina 27604 PHONE (919) 896-8339 · (919) 896-8356

FAX (919) 720-4216

MANAGING SUB-PRODUCR AGREEMENT OF NON-LIABLE SUB-PRODUCER

THIS AGREEMENT, made and entered into this _____ day of __________ 20___ by and

between GLOBAL SURETY SERVICES INC., of Wake County, Raleigh, North Carolina,

Party of the of the First Part, hereinafter referred to as the (“PRODUCER”) ,

_______________________________ (" MANAGING SUB-PRODUCER") and

_______________________________ ("SUB-PRODUCER") .

WHEREAS, effective on the _____ day of __________ 20___, the Producer entered into a Producer Underwriting Agreement ("Producer Agreement") with Managing Sub-Producer and N/A (hereinafter “Indemnitor”) and said Producer Agreement is incorporated herein by

reference.

WHEREAS, Managing Sub-Producer will be responsible for the liability such as but not limited to executed bail bonds, premiums, forfeitures, and fees and actions by the said Sub-Producer as agreed upon in Managing Sub-Producer’s Producer Agreement which become effective on_____ day of __________ 20___,.

WHEREAS, Producer and Managing Sub-Producer desire Financial Casualty & Surety to appoint Sub-Producer to execute surety bail bonds on behalf of Producer and Financial Casualty & Surety.

WHEREAS, this Agreement will not become effective until the Sub-Producer is legally licensed and appointed to execute bail bonds on behalf of the surety bail bonds and transact a bail

business in the state(s) he or she will be executing bail; and

WHEREAS, it is the intent of the parties to this Agreement that the Managing Sub-Producer shall and do hereby agree to indemnify and hold Producer and Financial Casualty & Surety harmless from any and all claims and losses of any kind or nature, whatsoever, arising out of, or related to the appointment of Producer by Financial Casualty & Surety for Managing Sub-Producer.

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged, it is agreed as follows:

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WITH REGARD TO POWERS OF ATTORNEY, Financial Casualty & Surety, through Producer and/or Managing Sub-Producer, shall furnish Sub-Producer with bail bond Powers of Attorney in such numbers, denominations and at such times, as Producer and/or Managing Sub-Producer shall determine. Nothing contained herein shall be construed or interpreted so as to obligate Financial Casualty & Surety to furnish bail bond Powers of Attorney to Sub-Producer. Producer will only receive bail bond Powers of Attorney for the surety for whom Sub-Producer has been duly appointed with the applicable State regulatory agency for such state(s) in which Sub-Producer is licensed to conduct a bail bond business. Financial Casualty & Surety reserves the right to determine whether or not to appoint Sub-Producer. Said bond Powers of Attorney shall be delivered to Sub-Producer, in trust, and Sub-Producer shall act as trustee with regard to the same, Financial Casualty & Surety being the beneficiary thereof. The parties intend that bond Powers of Attorney shall constitute trust assets which are to be utilized by

Sub-Producer in accordance with the terms and conditions of the Letter of Underwriting Authority executed by Producer and Managing Sub-Producer, which documents are fully incorporated herein by this reference. Powers of Attorney issued to Sub-Producer shall be reported to

Producer, Managing Sub-Producer or Financial Casualty & Surety or its designee, if so directed, with full premium remittance herein described, with seven (10) days of issuance of each such Power of Attorney by Sub-Producer. Sub-Producer shall be authorized to utilize such Powers of Attorney to post bonds at such time as Sub-Producer has obtained collateral for Financial

Casualty & Surety’s benefit consistent with the guidelines set forth in the Letter of Underwriting Authority executed by Sub-Producer , attached hereto and made part hereof. It shall be

considered a misuse of funds and breach of Sub-Producer’s fiduciary duties to Financial

Casualty & Surety to post any bond without sufficient indemnity and collateral, as set forth in the Letter of Underwriting Authority. Whenever demanded by Financial Casualty & Surety,

Producer, or Managing Sub-Producer, Sub-Producer shall immediately surrender or deliver to Financial Casualty & Surety, Producer, or Managing Sub-Producer, or its authorized

representative, any and all used or unused Powers of Attorney. Should any Powers of Attorney be unaccounted for Sub-Producer shall report such Powers of Attorney to Financial Casualty & Surety, Producer, or Managing Sub-Producer as unaccounted for within fifteen (15) days of obtaining knowledge of such deficiency. Managing Sub-Producer will be responsible to make full premium remittances, pursuant to the bond premium rate specified in paragraph 5 of the Managing Sub-Producer’s Producer Agreement, based on the maximum denominations thereof. Should any such Powers of Attorneys thereafter be found and returned to Financial Casualty & Surety with satisfactory evidence that the Power of Attorney had never been issued or posted, and that Financial Casualty & Surety, Producer, and Managing Sub-Producer had never become liable, Producer shall refund those amounts paid thereon by Managing Sub-Producer once authorized by Financial Casualty & Surety.

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Managing Sub-Producer agrees that they will be liable to Producer and Financial Casualty & Surety for any and all bonds written by Sub-Producer as stated in Managing Sub-Producer’s Producer Agreement.

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Managing Sub-Producer agrees to indemnify and hold Producer and Financial Casualty harmless from any and all claims, losses, expenses or liabilities of any kind of nature or whatsoever arising out of any act or alleged act or omission of Sub-Producer and for any and all claims, losses, expenses or liabilities of any kind or nature whatsoever arising out of the appointment of Sub-Producer by Financial Casualty & Surety for the Sub-Producer and/or Managing Sub-Sub-Producer.

IV

Producer may at its sole discretion settle any claims, and such settlement shall be conclusively deemed to be in the best interest of Financial Casualty & Surety, Producer, Managing Sub-Producer, an/or Sub-Producer.

V

Managing Sub-Producer shall be liable to Producer, for any premiums earned and unpaid on bonds written by Sub-Producer and/or for any amounts or liability arising out of all bond

forfeitures estreatures, and/or judgments on any and all bonds written by Sub-Producer as stated in Managing Sub-Producer’s Producer Agreement.

VI

Managing Sub-Producer agrees and understands that Financial Casualty & Surety and Producer shall not release Managing Sub-Producer’s Buildup Fund Account (“BUF”) or contract collateral until all claims, losses or expenses, arising out of the writing of bail bonds by Sub-Producer, and/or any other claims, losses or expenses that might arise by any actions of Sub-Producer while in the performance of any and all bail related functions, shall be reimbursed to Financial Casualty & Surety and/or Producer. It is specifically understood that Managing Sub-Producer’s liability under this Agreement shall be, but by no means be limited to, the extent or amount of Managing Sub-Producer’s BUF and/or contract collateral.

VII

Managing Sub-Producer agrees and understands that he will be held liable for any and all bonds executed by Sub-Producer where Sub-Producer has breached his fiduciary responsibility to Financial Casualty & Surety and Producer, partakes in the misuse of funds, or acts in an unlawful manner pertaining to the execution of bonds on Financial Casualty & Surety’s behalf.

VIII

All funds received for the Buildup Fund Account by the Producer or Financial Casualty & Surety from Managing Sub-Producer and/or Sub-Producer shall be applied to any indebtedness owed by the Managing Sub-Producer and/or Sub-Producer in accordance with the terms in the agreement. Producer and Financial Casualty & Surety reserves the right to apply funds received, at its sole discretion, to expenses owed, including but not limited to, forfeitures, and legal amounts due to

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Producer and Financial Casualty & Surety from the Managing Sub-Producer’s Buildup Fund Account.

IX

The content of the Agreement is considered proprietary in nature, and shall be considered

confidential between the Producer, Managing Sub-Producer and/or Sub-Producer to include their legal representation, the Indemnitor, Managing Sub-Producer Indemnitor, and Financial Casualty & Surety. Producer, Managing Producer, Producer, Indemnitor, and Managing Sub-Producer Indemnitor promise and agree to receive and hold such information in confidence. Without limiting the generality of the foregoing, Producer, Managing Producer,

Sub-Producer, Indemnitor, Sub-Producer Indemnitor, and Managing Sub-Producer Indemnitor further promise and agree not to, directly or indirectly, in any way, reveal, report, publish, or disclose this Agreement, or any part thereof, to any other party without the express written consent of the Producer.

X

This Agreement and the performance of the parties hereunder shall be governed and construed in accordance with the substantive laws of the State of North Carolina without regard to conflicts of laws previsions. All actions or proceedings arising out of, or related to, this Agreement shall be brought only in an appropriate federal or state court in Raleigh, North Carolina and the parties hereby consent to the jurisdiction of such courts over themselves and the subject matter if such actions or proceedings.

IN WITNWESS WHEREOF, the parties have caused this Agreement to be executed:

____________________________ _______________

MANAGING SUB-PRODUCER DATE

______________ County, North Carolina

I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she signed the foregoing document: : ________________________

(Name of principal) Date: ______________ ______________________________________ (Official Signature of Notary)

______________________________________ (Notary’s printed or typed name, Notary Public) (Official Seal)

My commission expires: ____________________

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____________________________ _______________

SUB-PRODUCER DATE

I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she signed the foregoing document: : ________________________

____________________________ _______________

PRODUCER DATE

I certify that the following person(s) personally appeared before me this day, each acknowledging to me that he or she signed the foregoing document: ________________________