Exhibit 6.16
ASSIGNMENT OF CONTRACT
Now on this 23rd day of September, 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 Brooke
Corporation and The Xxxxxx Agency, Inc. 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
------------------------------- --------------------------------
Xxxxxxx Xxxx, President Xxxxxx X. Xxx, Chairman
AGREEMENT
FOR
SALE OF INSURANCE AGENCY ASSETS
THIS AGREEMENT MADE this 20 day of August, 1999 by and between The Xxxxxx
Agency, Inc. of 1st St. & Xxxx Xxxxxx Parkway, McAlester, Oklahoma 74501,
hereinafter referred to as "Seller", and Brooke Corporation, 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 The Xxxxxx Agency, Inc. or which may have done business under any
other trade name. Such sale shall include computer equipment specifically
identified on the listing attached hereto as Exhibit B. SUCH SALE SPECIFICALLY
EXCLUDES SELLER'S CASH ACCOUNTS, CERTIFICATES OF DEPOSIT AND MONEY MARKET
ACCOUNTS. 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 Four Hundred Sixty Five Thousand
Dollars ($465,000.00) in the following manner:
(A) The sum of Four Thousand Six Hundred Fifty Dollars ($4,650.00) as xxxxxxx
money, the receipt of which is hereby acknowledged.
(B) The sum of Seventeen Thousand Three Hundred Fifty Dollars ($17,350.00) shall
be paid to seller at the date of closing.
(C) The sum of Two Hundred Ten Thousand Five Hundred Dollars ($210,500.00) shall
be paid to seller THREE months after closing date.
(D) The sum of Two Hundred Thirty Two Thousand Five Hundred Dollars
($232,500.00) shall be paid to seller twelve months after closing date.
(E) It is agreed that Twenty Thousand Dollars ($20,000.00) of the total purchase
price shall be allocated toward the purchase of computer equipment specifically
identified on the listing attached hereto as Exhibit B. IT IS FURTHER AGREED
THAT SAID ALLOCATION OF THE PURCHASE OF COMPUTER EQUIPMENT SHALL BE MADE FROM
THE AMOUNTS PAID TO SELLER ON OR BEFORE THE DATE OF CLOSING PURSUANT TO
PARAGRAPHS 2(A) AND 2(B) ABOVE.
(F) IT IS AGREED THAT NONE OF THE TOTAL PURCHASE PRICE SHALL BE ALLOCATED TO THE
COVENANTS MADE BY THE SELLER IN PARAGRAPHS 8(A), 8(B) AND 8(C) OF THIS
AGREEMENT.
3. CONVEYANCE OF TITLE TO PERSONAL PROPERTY. 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.
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.
(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 or insurance
companies. Any funds collected by Purchaser for the Seller will be remitted to
Seller on a monthly basis.
(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 received after
closing.
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.
3
(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. This agreement is further subject to Purchaser being approved
for agency contracts with all insurance companies currently represented by the
Seller EXCEPTING MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY AND AFFILIATED
COMPANIES AND REPUBLIC INSURANCE GROUP. In the event of non-approval of one or
more of said contracts, this agreement may, at option of the Purchaser, become
null and void and Purchaser shall be entitled to the return of all xxxxxxx money
payments and all parties shall thereupon be released from any further liability
under this agreement. In the event that a due diligence audit should disclose
that Seller's commissions are not as warranted under paragraph 10(B) following,
this agreement may be declared null and void and Purchaser shall be entitled to
the return of all sum theretofore advanced, and all parties shall thereupon be
released from any further liability under this agreement.
8. COVENANTS OF SELLER.
(A) Seller does, hereby, covenant and agree that it's 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.
(B) Seller and Xxxx Xxxxxx, individually further agree that they will not engage
directly or indirectly in the business of selling insurance policies in or
within a 50 mile radius of McAlester, Oklahoma, for a period of five (5) years
from and after the closing date. Seller and Xxxx Xxxxxx, 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) Seller warrants that it is a corporation, duly organized, existing and in
good standing under the laws of the State of Oklahoma. Seller warrants and
represents that it has taken all necessary
4
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. Seller warrants that it is the sole owner of the assets to
be conveyed under the terms of this agreement and has sole authority to make
such conveyance.
(B) The Seller warrants and represents that it has received insurance sales
commissions, excluding profit sharing commissions and brokered policies
commissions, of at least Three Hundred Six Thousand Dollars ($306,000.00), for
the twelve (12) month period ending June 30, 1999.
(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.
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 The Xxxxxx Agency. Furthermore, the Seller
shall not use or authorize the use of said trade name to sell insurance
policies. The Purchaser shall acquire all rights to the telephone listings and
telephone numbers listed under said trade name and to the Post Office Box listed
under such name.
12. SECURITY INTEREST.
(A) To secure the payment of the sums described in paragraph 2(C) and 2(D)
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 from 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, 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 fall to make any of the installment
payments described in paragraph 2(C) and 2(D) hereof, 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 property and casualty
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.
5
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.
(B) PURCHASER SPECIFICALLY AGREES TO ASSUME SELLER'S OBLIGATION TO PAY $2,648.55
TO SOUTHWESTERN BELL FOR YELLOW PAGES ADVERTISING AT THE RATE OF $331.05 PER
MONTH UNTIL THE CURRENT CONTRACT EXPIRES IN MARCH, 2000.
16. ENTIRE AGREEMENT. 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.
17. NOTICES.
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:
Xxxx Xxxxx, State Manager
Brooke Corporation
0000 X. Xxxxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
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:
Xxxx Xxxxxx
The Xxxxxx Agency, Inc.
1st St. & Xxxx Xxxxxx Parkway
McAlester, Oklahoma 74501
or such other addresses as may be furnished to the Purchaser in writing.
17. 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
6
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
THE XXXXXX AGENCY, INC. BROOKE CORPORATION
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxx
------------------------------ ---------------------------------
Title: President Title: State Manager
--------------------------- ------------------------------
/s/ Xxxx Xxxxxx
---------------------------------
Xxxx Xxxxxx, individually
7
Exhibit A
BILL OF SALE
Now on this 15 day of September, 1999 for good and valuable consideration, the
receipt of which is hereby acknowledged, The Xxxxxx Agency, Inc., of McAlester,
Oklahoma, 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 The Xxxxxx
Agency, Inc., 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 in McAlester, Oklahoma or elsewhere. Such sale shall also include
computer equipment specifically identified on the listing attached hereto as
Exhibit B. SUCH SALE SPECIFICALLY EXCLUDES SELLER'S CASH ACCOUNTS, CERTIFICATES
OF DEPOSIT AND MONEY MARKET ACCOUNTS.
All assets are hereby conveyed unto Purchaser, free and clear of any claims,
liens, taxes and encumbrances whatever.
SELLER
THE XXXXXX AGENCY, INC.
Attest:
By: /s/ Xxxx Xxxxxx
-----------------------------------
Title: President
/s/ Xxxx Xxxxxx --------------------------------
------------------------------
Secretary
State of Oklahoma
County of Pittsburg
-------------------------
Be it remembered that on this 2 day of SEPT, 1999, before me, a
Notary Pubic, in and for the County and State aforesaid, appeared XXXX XXXXX who
is known to me and who executed the above and foregoing Bill of Sale.
/s/ Xxxxx X. Xxxxxxxx
----------------------------
Notary Public
My Commission Expires: 06-06-02
0