Exhibit 6.17
ASSIGNMENT OF CONTRACT
Now on this 1st day of October, 1999, for good and valuable consideration, the
receipt of which is hereby acknowledged, Brooke Corporation does hereby
transfer, set over, assign and convey to G. I. Agency, Inc., a Kansas
Corporation, all of its right, title, and interest in and to an Agreement for
Sale of Insurance Agency Assets, dated September 15, 1999 between Brown
Insurance Group, Inc. and Brooke Corporation. By virtue of this assignment,
Assignee, G. I. Agency, Inc. hereby assumes all rights, responsibilities,
benefits and obligations of Brooke Corporation under such contract to the same
extent and effect as if an original signatory thereof.
Brooke Corporation G. I. Agency, Inc.
By: /s/ Xxxxxxx Xxxx By: /s/ Xxxxxx X. Xxx
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Xxxxxxx Xxxx, President Xxxxxx X. Xxx, Chairman
AGREEMENT
FOR
PURCHASE OF INSURANCE AGENCY ASSETS
THIS AGREEMENT MADE this 9th day of September, 1999 by and between Brown
Insurance Group, Inc. of 2356 X. Xxxxxxx, Republic, Missouri, hereinafter
referred to as "Seller", and Brooke Corporation, of 000 X Xxxxxx, Xxxxxxxxxxxx,
Xxxxxx, hereinafter referred to as "Purchaser".
In consideration of the mutual promises, covenants, and agreements set forth
hereinafter, the Seller does hereby agree to sell and the Purchaser does hereby
agree to purchase the assets hereinafter described on the terms and conditions
set forth as follows:
1. SUBJECT MATTER OF THE AGREEMENT. Seller hereby agrees to sell, transfer,
assign and convey unto the Purchaser all of the Seller's right, title and
interest in and to the general insurance agency assets owned by Seller. Such
sale shall include the "book of business", goodwill, client lists, client
records, client files, client renewals, claims records, and all other intangible
assets associated with Seller's general insurance agency business which does
business as Brown Insurance Group or BB & Associates Insurance or which may have
done business from any other location under any other trade name. Such sale
shall also include the office equipment and other personal property specifically
identified on the listing attached hereto as Exhibit C. All assets shall be
conveyed unto Purchaser, free and clear of any claims, liens and encumbrances
whatever.
2. PURCHASE PRICE. In consideration of the sale of the above described assets,
the Purchaser agrees to pay the total sum of Three Hundred Fifty Five Thousand
Eight Hundred Dollars ($355,800.00) in the following manner:
(A) The sum of Three Thousand Six Hundred Dollars ($3,600.00) as xxxxxxx money,
the receipt of which is hereby acknowledged.
(B) The sum of One Hundred Seventy Four Thousand Three Hundred Dollars
($174,300.00) shall be paid to Seller at the date of closing.
(C) The balance of the purchase price in the amount of One Hundred Seventy Seven
Thousand Nine Hundred Dollars ($l77,900.00) shall be paid in twelve (12) equal
monthly installments of Fifteen Thousand Three Hundred Ninety Three and 11/100
Dollars ($15,393.11) which includes interest at the rate of seven percent (7%)
per annum on the unpaid balance. The first installment will be due one month
after the closing date and the remaining installments shall be paid on the same
day of each month thereafter until paid in full.
(D) The total purchase price shall be allocated as follows: Thirty Thousand
Dollars ($30,000.00) shall be allocated to the non competition agreement, Three
Hundred Twenty Thousand Dollars ($320,000.00) shall be allocated to goodwill and
Five Thousand Eight Hundred Dollars ($5,800.00) shall be allocated to office
equipment identified on Exhibit C.
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3. CONVEYANCE OF TITLE AND DELIVERY OF PROPERTY.
(A) Seller shall convey title to the above described general insurance agency
assets by a Bill of Sale which shall be executed, acknowledged, and delivered to
the Purchaser on the closing date of this agreement, free of all liens and
encumbrances whatever. The bill of sale shall be in the form attached hereto as
Exhibit A and made a part hereof by reference.
(B) Seller shall transfer to Purchaser the insurance policies that are a part of
the book of business sold pursuant to this agreement by delivering Transfer
Letters to the Purchaser an the closing date of this agreement. The transfer
letter shall be in the form attached hereto as Exhibit B and printed on Seller's
letterhead and with Xxxxxx's original signatures. Seller furthermore agrees to
sign any additional forms or letters which may be required to transfer said
policies.
(C) Seller shall deliver to Purchaser's primary office on the closing date of
this agreement the entire contents of all paper and electronic files for all of
Seller's past, current and prospective customers. Electronic files may be
delivered in electronic text format using comma separated values or in paper
format by printing customer lists, customer data, customer notes, customer
accounting, customer history, policy expiration lists, policy notes, policy
accounting, policy history, claims notes and other records which are stored in
Seller's electronic files.
(D) Seller shall deliver to Purchaser's primary office on the closing date of
this agreement all office equipment and other personal property specifically
identified on the listing attached hereto as Exhibit C.
4. CLOSING. Closing of this sale shall occur no later than September 15, 1999,
unless a later date is required in order to satisfy the contingencies set forth
hereinafter.
5. EFFECTIVE DATE OF TRANSFER OF BUSINESS AND OBLIGATIONS.
(A) All of the general insurance agency assets conveyed under the terms of this
agreement shall be transferred as of the closing date. For the purpose of this
agreement, the policy inception date will determine on which day the insurance
was written. If premiums are paid by a policyholder to an insurance company in
installments, it is agreed that the due date of each installment shall be
considered a new policy inception date. The Purchaser shall be entitled to all
commissions for insurance written by Xxxxxx, or Seller's directors, officers and
employees on or subsequent to the closing date.
(B) Seller shall be liable for all debts, premiums, claims and obligations
incurred prior to the closing date. All accounts receivables for insurance
written prior to the closing date shall remain the separate property of the
Seller, provided that Seller pays all debts, premiums, claims and obligations on
insurance written prior to closing date. Seller acknowledges that the value of
the assets sold pursuant to this agreement is diminished if Seller does not
promptly pay its obligations to insurance companies and managing general agents
for the net policy premiums on insurance written prior to the closing date. As
such, if Purchaser becomes aware that any such net policy premiums are not paid
when due, then Purchaser may elect, but is not obligated, to pay any such
amounts on behalf of Seller, in which event Seller agrees to fully and promptly
reimburse Purchaser.
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(C) Purchaser will attempt to collect all funds owed to Seller for insurance
written prior to the closing date. Seller appoints Purchaser as its attorney in
fact to endorse checks made payable to Seller by policyholders, insurance
companies or managing general agents. Any funds collected by Purchaser for the
Seller will be remitted to Seller on a monthly basis. For a period of ninety
(90) days after closing, Purchaser shall provide Seller with access to
reconciled monthly agent statements for the specific purpose of verifying the
amount of commissions which may be due Seller for insurance written prior to the
closing date and attributable to insurance policies that are part of the book of
business sold pursuant to this agreement. Such access shall be upon reasonable
advance written request and during such times and upon such conditions as shall
not unreasonably impair the operations of Purchaser. Xxxxxx agrees to respect
the confidential nature of such information.
(D) After the closing date, Seller shall not be responsible for payment to
Purchaser of commissions on any reduction of premiums resulting from policy
cancellations, policy endorsements or policy audits for insurance written prior
to the closing date. Correspondingly, after the closing date, Purchaser shall
not be responsible for payment to Seller of commissions on any additional
premiums resulting from policy endorsements or policy audits for insurance
written prior to the closing date.
(E) Seller shall remit to Purchaser on the closing date any funds received by
Seller for insurance written on or subsequent to the closing date.
(F) Purchaser shall be entitled to all profit sharing commissions, bonus
commissions, prizes, advertising allowances or override commissions received on
or after the closing date.
6. HOLD HARMLESS GUARANTY.
(A) Seller hereby agrees and promises to hold Purchaser harmless for any and all
liability that may arise by reason of Seller's or Seller's directors, officers
and employees negligence or failure to renew, issue or otherwise service any
insurance policy prior to the date of closing, it being agreed that any
liability for such errors and omissions in the transaction of insurance business
shall vest solely with Seller.
(B) Purchaser hereby agrees and promises to hold Seller harmless for any and all
liability that may arise by reason of Purchaser's or Purchaser's directors,
officers and employees negligence or failure to renew, issue or otherwise
service any insurance policy after the date of closing, it being agreed that any
liability for such errors and omissions in the transaction of insurance business
shall vest solely with Purchaser.
7. CONTINGENCIES. Heading reserved for sequence purposes only.
8. COVENANTS OF SELLER.
(A) Seller does, hereby, covenant and agree that its directors, officers and
employees will, at all times, assist and cooperate with Purchaser in
transferring to Purchaser all general insurance business previously written,
serviced or sold by Seller or Seller's directors, officers or employees.
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(B) Xxxxxx and Xxxxxxxxxxx X. Xxxxx, individually, further agree that they will
not engage directly or indirectly in the business of selling insurance policies
in or within a one hundred (100) mile radius of Republic, Missouri for a period
of five (5) years from and after the closing date. Xxxxxx and Xxxxxxxxxxx X.
Xxxxx, individually, further agree that for a period of five (5) years from and
after the closing date, they will not solicit or write insurance policies for
any customers that are a part of the book of business sold pursuant to this
agreement and will not directly or indirectly attempt to divert any customer
that is a part of the book of business sold pursuant to this agreement from
continuing to do business with Purchaser.
(C) Seller does, hereby, covenant and agree to enforce, for the continued
benefit of Purchaser, all non solicitation agreements or non compete agreements
currently in force between Seller and its directors, officers, independent
contractors and employees.
9. WARRANTIES AND REPRESENTATIONS OF THE PURCHASER. The Purchaser warrants and
represents that it is a corporation, duly organized, existing and in good
standing under the laws of the State of Kansas. Purchaser warrants and
represents that it has taken all necessary corporate action, including, but not
limited to, binding resolutions of all of its directors to enter into this
agreement and to carry out the terms and conditions thereof.
10. WARRANTIES AND REPRESENTATIONS OF THE SELLERS.
(A) If Seller is a corporation, then Seller warrants that it is duly organized,
existing and in good standing under the laws of the State of Missouri and Seller
warrants and represents that it has taken all necessary corporate action,
including, but not limited to, binding resolutions of all of its directors to
enter into this agreement and to carry out the terms and conditions thereof.
(B) The Seller warrants and represents that it has received insurance sales
commissions, excluding profit sharing commissions and brokered policies
commissions, of at least One Hundred Seventy Nine Thousand Dollars
($179,000.00), for the twelve (12) month period ending July 31, 1999. The Seller
warrants and represents that it has provided accurate and complete third party
documents from which Purchaser can independently verify said commissions.
(C) The Seller warrants and represents that it is the sole and legitimate owner
of the general insurance agency assets to be purchased and sold pursuant to this
agreement.
(D) The Seller warrants and represents that it currently has an errors and
omissions insurance policy in force and that a "tail" policy will be or has been
purchased which provides for continuing errors and omissions insurance
coverages, and will provide Purchaser with proof of such coverage upon request.
(E) The Seller warrants and represents that it has fully disclosed to Purchaser
in writing all of the oral and verbal agreements that it currently has, or has
had during the past twelve (12) months, with licensed producers, representatives
and agents.
11. USE OF NAME AND PO BOX AND TELEPHONE NUMBER. As a result of the sale
contemplated herein, the Purchaser shall on and after the date of closing be
entitled to the use of the trade name BB & Associates Insurance and Brown
Insurance Group. Purchaser acknowledges that Seller's
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corporate name is Brown Insurance Group, Inc. and Xxxxxxxxx agrees that Seller
is not required to change its corporate name; however, Seller agrees that its
advertising, marketing and transaction of business with the public shall not be
conducted using this name. Furthermore, the Seller shall not use or authorize
anyone else to use said trade name. The Purchaser shall acquire all rights to
the telephone listings, telephone numbers and post office boxes listed under
said trade name.
12. SECURITY INTEREST.
(A) To secure the payment of the sums described in paragraph 2(C) hereof,
Purchaser hereby grants to Seller a security interest in and to the insurance
agency assets which are purchased from Seller pursuant to this agreement.
(B) The Purchaser agrees to execute and deliver to the Sellers a UCC-1 financing
statement evidencing said security interest in form suitable for filing.
13. DEFAULT.
(A) Time is of the essence of this agreement. In the event that the Purchaser
shall fail to pay the amount due on the date of closing as described in
paragraph 2(B) hereof, then this agreement shall immediately become null and
void and the Seller shall be entitled to retain the xxxxxxx money described in
paragraph 2(A) hereof as liquidated damages. In said event, this agreement shall
thereafter be null and void.
(B) In the event that the Purchaser shall fail to make any of the installment
payments described in paragraph 2(C) hereof within Ten (10) days of the payment
due date, then the Seller, or their authorized agents, shall give written notice
of such default to the Purchaser at the address shown hereinafter. In the event
that such default is not cured within thirty (30) days of the mailing of such
notice, then the Seller shall be entitled to take possession and control of all
of the general insurance agency assets secured hereunder, subject to any other
security interests, and in said event the Purchaser agrees to transfer, convey,
and deliver all of said assets peacefully to the Seller.
14. ASSIGNMENT OF PURCHASER'S INTEREST. It is agreed that Purchaser has the
unconditional right to assign or transfer all of Purchaser's rights and
obligations obtained or incurred pursuant to this agreement to a qualified
assignee or purchaser capable and having financial resources to honor all
commitments contained herein, as may be determined by Purchaser. In the event of
any such assignment or transfer, Purchaser hereby guaranties all payments due
Seller under the terms of this agreement.
15. MISCELLANEOUS AGREEMENTS OF THE PARTIES.
(A) Unless otherwise agreed to in writing, the Purchaser shall not assume any of
Seller's obligations with regards to employees, lessors (real or personal
property), vendors, suppliers, advertisers or utility companies. Purchaser
specifically agrees to assume Xxxxxx's obligation to pay $85.89 per month to
Norwest for a period of 24 months for a telephone system; to pay $106.04 per
month to Copelco for a period of 48 months for a copier; to pay $31.79 per month
to Neopost until such agreement is cancelled for a postage metering system; to
pay $775 per month
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to Xxxxx for the period of October, 1999 to September, 2000; and, to pay $800
per month to Xxxxx for the period of October, 2000 to September, 2001.
(B) Purchaser shall maintain appropriate insurance coverage on the office
equipment identified on Exhibit C.
16. ENTIRE AGREEMENT
(A) This agreement contains all of the terms and conditions of agreement between
the parties hereto relative to the subject matter hereof, and no other agreement
relative thereto between them, whether past, present or future, shall be valid
unless the same is reduced to writing and signed by each of the parties.
(B) Upon execution of this agreement, the confidentiality agreement previously
signed by Purchaser is no longer valid and no longer enforceable.
17. NOTICES.
(A) Notices which may be required to be sent to the Purchaser in accordance with
this agreement shall be deemed sufficient if deposited in the United States Mail
as first class mail, postage prepaid, and addressed to:
Xxxxx Xxxxx, State Manager
Brooke Corporation
PO Box 412008
Kansas City, Missouri 64141-2008
or such other addresses as may be furnished to the Seller in writing.
(B) Notices which may be required to be sent to the Seller in accordance with
this agreement shall be deemed sufficient if deposited in the United States Mail
as first class mail, postage prepaid and addressed to:
Xxxxxxxxxxx X. Xxxxx, President
Brown Insurance Group
0000 X. Xxxxxxx
Xxxxxxxx, Xxxxxxxx 65738
or such other addresses as may be furnished to the Purchaser in writing.
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18. BINDING EFFECT. This agreement executed in triplicate shall be binding upon
each of the parties hereto, their heirs, administrators, successors and assigns.
The use of the masculine shall include the feminine, and the use of the singular
shall include the plural. This agreement may not be modified or amended unless
such modifications or amendments are reduced to writing.
Seller Purchaser
By: /s/ Xxxxxxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
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Title: President Title: Marketing Manager
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/s/ Xxxxxxxxxxx X. Xxxxx
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Xxxxxxxxxxx X. Xxxxx, individually
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Exhibit A to Purchase Agreement
BILL OF SALE
Now on this 15th day of September, 1999, for good and valuable consideration,
the receipt of which is hereby acknowledged, Brown Insurance Group, Inc. of
Republic, Missouri, as Seller, hereby sells, transfers, assigns and conveys
unto BROOKE CORPORATION , as Purchaser, all of the Seller's right, title and
interest in and to the general insurance agency assets carried under the name of
BB & Associates Insurance or any other name in which Seller has any interest
therein. Such sale shall consist of Seller's general "book of insurance
business", including goodwill, client lists, client records, client files,
client renewals, claims records, and all other intangible assets associated with
Seller's insurance agency. Such sale shall also include the office equipment and
other personal property specifically identified on the listing attached hereto.
All assets are hereby conveyed unto Purchaser, free and clear of any claims,
liens, taxes and encumbrances whatever.
SELLER
Attest: (If incorporated)
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxxxxxx X. Xxxxx
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Secretary Title: President
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State of Missouri
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County of Xxxxxx
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Be it remembered that on this 15th day of September, 1999, before me, a Notary
Public, in and for the County and State aforesaid, appeared Xxxxxxxxxxx Xxxxx
who is known to me and who executed the above and foregoing Bill of Sale.
/s/ Xxxxxxxx Xxxxxx
-----------------------------------
Notary Public
My Commission Expires:
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