AGREEMENT OF SALE
AGREEMENT OF SALE,
made August 1, 2007 between Sangamon Associates, Inc., a New Jersey
corporation, having an address at 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxx, XX 00000
(“Purchaser”), and Flagship Insurance, Inc. a Massachusetts corporation, having
an address at 000 Xxxxxx Xxxxxx, Xxx Xxxxxxx XX 00000 (“Seller”).
WHEREAS, Purchaser desires to
acquire, and Seller desires to sell, the assets of the business known as
Flagship Insurance hereinafter specified, upon the terms and conditions
hereinafter set forth, and
NOW, THEREFORE, in
consideration of the covenants and agreements hereafter set forth, and other
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
1. Agreement
to Sell. This is an asset purchase only and Purchaser is not
and will not assume any liabilities of the Seller other than those explicitly
stated in Exhibit J. Seller agrees to sell, transfer and deliver to
Purchaser, and Purchaser agrees to purchase, upon the terms and conditions
hereinafter set forth, the following assets of the business known as Flagship
Insurance (collectively, the “Assets” or “Business Assets”):
(a) The
supplies, furniture, equipment, fixtures and improvements described in Exhibit D
herein and all similar items acquired or owned by the business on or before the
closing date as the same shall exist on the closing date.
(b) The
entire book of business (including all books and records and renewal rights) of
all property and casualty insurance business of the Seller thereof (the
“Business”).
(c) The
goodwill of the business.
(d) The
trade name(s) associated with the business; as well all telephone numbers and
listings, as more fully described below at section (10) and Exhibit
G.
2. Purchase
Price. The purchase price to be paid by Purchaser for the
Assets of the Business (as described in section “1”, supra) is Seven Hundred
Thousand and 00/100 Dollars ($700,000.00), payable as follows:
(a)(i)
Six Hundred Thousand ($600,000.00) to be paid to Seller at the time
and place of closing; and (ii) the balance of One Hundred Thousand Dollars and
00/100 ($100,000.00) to be paid to Seller in equal monthly installments as
follows: Eleven (11) consecutive monthly payments in the amount of
Eight Thousand Three Hundred Thirty Three and 33/100 Dollars ($8,333.33 ) per
month, and one final payment in the amount of Eight Thousand
Three
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Hundred
Thirty Three and 37/100 Dollars ($8,333.37), commencing with the first monthly
installment payment due on 90 days after the closing of this Agreement -November
1, 2007. These monthly payments are comprised of interest and
principal as set forth in the schedule annexed hereto as Exhibit “I”, in order
to comply with applicable Internal Revenue Service regulations. The
parties will execute and deliver a Promissory Note by Purchaser to Seller in
said amount, substantially in the form of Exhibit H hereto (the “Promissory
Note”).
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(b)
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Security
Interest In Receivables: With respect to the Twelve (12)
periodic monthly payments owed by Purchaser to Seller as detailed in
paragraph “2(a)(ii)”, in the amount of One Hundred Thousand Dollars and
00/100 ($100,000.00), as collateral security for said stated obligations,
Purchaser grants the following security interest to Seller: (a)
To secure payment of the sums described in paragraph 2(a)(ii) hereof,
Purchaser’s subsidiary Flagship Landing Insurance Agency, Inc. (the
licensed entity that will be operating the brokerage being purchased from
Seller) hereby grants to Seller a security interest in and to the Assets,
as of the closing date, which are purchased from Seller pursuant to this
Agreement.
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(c)
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Adjustments
to Payout.
Payments pursuant to Section 2(a)ii are contingent upon the revenue of the
assets acquired to be in excess of Seven Hundred Thousand Dollars 00/100
($700,000) for the most recent 12 month period of the
payment. In the event that revenue fall below said amount, the
payment for that period will be adjusted on a pro rata basis, calculated
as follows total revenue for the most recent 12 months
dividend by Seven Hundred Thousand Dollars 00/100 times the
payment.
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3. Acceptable
Funds. All money payable under this agreement, unless
otherwise specified, shall be paid either: (a) in cash, but not more than
$1,000.00 shall be paid in cash; (b) by good certified check of Purchaser, or
official check of any bank, savings bank, trust company, or savings and loan
association which is a member of the New York Clearing House, payable to the
direct order of Seller; (c) wire transfer or (d) as otherwise agreed to in
writing by the parties or their attorneys.
4. The
Closing. The “closing” means the settlement of the obligations
of Seller and Purchaser to each other under this agreement, including the
payment of the purchase price to Seller as provided in Article 2 hereof and the
delivery of the closing documents provided for in Article 5
hereof. The closing shall be held at the offices of Seller at 10:00
a.m. on or about August 1, 2007 (the “closing date”).
5. Effective
Date of Transfer of Business and Obligations, and Rights to Commissions and
other Business Income. All of the
Seller’s assets conveyed under the terms of this Agreement shall be transferred
as of the closing date. With respect to those assets consisting of
commission income, fees, and any other income streams earned by the Seller in
the ordinary course of operating the brokerage, said assets shall be conveyed
pursuant to the following procedures:
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A.
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For
“agency xxxx” policies (which are defined as policies written by the
business/brokerage where premiums – including earned commission –
are
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billed
for by and/or are collected directly by the business/brokerage), the
policy inception date will be deemed the day on which the policy was
written, and Purchaser shall be entitled to all agency xxxx commissions
for policies (by whomever written) with an inception date on or subsequent
to the closing date. For Agency billed policies, for which the Seller has
received full payment of its commission prior to the closing date, for a
period of 120 days after closing any Agency billed cancellations in which
commissions were paid to Seller shall be offset against payment due as
stated in section 2.b.ii.
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B.
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Purchaser
shall be entitled to all commissions for “direct xxxx” policies (which are
defined as policies written by the business/brokerage where premiums –
including earned commissions – are billed for and/or are collected
directly by the insurance company with whom the policy was placed), or
other positive statement balances associated with direct xxxx Policies (by
whomever written) for all policies with an inception date on or subsequent
to the Closing Date.
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C.
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Purchaser
shall be entitled to all policy fees (including but not limited to all
copy fees, administrative fees, broker fees, specialty fees, MVR fees,
etc.) for all policies (by whomever written) which are received by Seller
or Purchaser from any person on or after the closing date. If
Purchaser becomes aware of any commissions paid to Seller but otherwise
owed to Purchaser as described above, Purchaser may offset any amounts due
Seller pursuant to paragraph 2(a)(ii), if any, or Purchaser may demand
reimbursement from Seller, in which case Seller agrees to fully and
promptly reimburse Purchaser.
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D.
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The
Purchaser shall pay to the Seller a pro rata share of bonus paid by
insurance companies for business produced in the calendar year 2007
including but not limited to OneBeacon, Encompass, etc, that
the Seller was appointed to prior to acquisition. The pro rata
share shall be based on the months of ownership prior to the purchase,
which in this case will be 7 months of the 12 months or 58% of said bonus
for the calendar year 2007. Any and all such bonuses earned as
a result of policies/risks written by Seller prior to the Closing Date
shall be the property of Seller and payable to Seller by Purchaser if
received by Purchaser after the Closing Date. In the event that
the insurance company does not pay a bonus for business written in 2007,
the Purchaser shall have no further obligation to the
Seller.
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E.
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Seller
shall be liable for all debts, premiums, claims, statement balances
reflected on insurance company statements dated prior to the closing date,
and other obligations incurred prior to the closing date. All
accounts receivables for policies written prior to the closing date shall
remain the separate property of the Seller, although such accounts
receivables will be collected by Purchaser, provided that Seller pays all
debts, premiums, claims, statement balances reflected on such company
statements dated prior to the closing date, and other obligations incurred
prior to closing date. Seller acknowledges that the value of
the assets sold pursuant to this Agreement might be diminished if Seller
does not promptly pay its obligations to Customers, Companies and/or other
Persons for agency related expenses, including without limitation, the net
policy premiums (or return premiums) on policies written (or cancelled)
prior to the closing date. As such, if Purchaser becomes aware
that any such pre-closing agency related expenses have not been paid when
due, then Purchaser may elect, but is not obligated, to pay any such
amounts on behalf
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of
Seller, in which event, at Purchaser’s sole option, Purchaser may offset
any amounts due Seller pursuant to paragraph 2(a)(ii), if any, or
Purchaser may demand reimbursement from Seller, in which case Seller
agrees to fully and promptly reimburse
Purchaser.
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F.
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Purchaser,
on behalf of Seller, will attempt to collect all funds, including all
accounts receivable, owed to Seller for any policies written prior to the
closing date. Seller shall appoint Purchaser as its attorney in
fact to endorse checks made payable to Seller by policy owners, Companies
or other Persons by executing a limited power of attorney for such
purpose, which is attached hereto as Exhibit H and incorporated herein by
this reference. Any funds collected by Purchaser for the Seller
will be remitted to Seller on a monthly basis, net of any outstanding
pre-closing debts, premiums, claims, or statement balances reflected on
Company statements dated prior to the closing date, and other pre-closing
unsatisfied obligations for which Seller is responsible pursuant to this
Agreement. Accompanying each such monthly payment to Seller
shall be a simple accounting of income received, and liabilities (if any)
deducted, with supporting documentation. For no less than a
period of ninety (90) days after closing, Purchaser shall provide Seller
with access to monthly agent statements for the specific purpose of
verifying the amount of “agency billed” premiums deposited to Purchaser’s
receipt trust account which may be due Seller for agency xxxx Policies
written prior to the closing date and attributable to Policies that are
part of the book of business sold pursuant to this
Agreement. Such access shall be upon reasonable request, and
during such times and upon such conditions as shall not unreasonably
impair the operations of Purchaser. Seller agrees to respect
the confidential nature of such information. Seller agrees that
in the event there are outstanding debts, premiums, return premiums,
claims, statement balances and/or other obligations on Policies written
prior to the closing date, Purchaser, at its sole discretion, may offset
any amounts collected pursuant to this paragraph 5(c) from amounts owed to
Seller pursuant to this paragraph 5(c). In the event such
amounts collected are insufficient to satisfy any outstanding debts,
premiums, return premiums, claims, statement balances and/or other
obligations on Policies, at Purchaser’s sole option, Purchaser may offset
any remaining amounts due Seller pursuant to paragraph 2(d), if any, or
Purchaser may demand reimbursement from Seller, in which case Seller
agrees to fully and promptly reimburse
Purchaser.
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G.
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For
120 days after the closing date Seller shall be responsible for payment to
Purchaser of commissions on any reduction of premiums which result from
policy cancellations for any policies Seller produced, and which are
reflected on any Company statement dated after the closing
date. After the closing date, Seller shall be responsible for
any additional amounts due Customer, Companies or other Persons which
result from policy cancellations, policy endorsements, or policy audits
for policies which are reflected on any Company statement dated prior to
(or first recorded on Company statements dated prior to) the closing
date.
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H.
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Seller
shall remit to Purchaser on the closing date any funds received by Seller
for Policies written on or subsequent to the closing
date.
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I.
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Purchaser
shall be entitled to all profit sharing commissions, bonus commissions,
performance compensation, prizes and trips, advertising allowances or
override commissions on policies produced or written on or after the
closing date which might be received by Seller or Purchaser after the
closing date, except as provided for in Section
6(D).
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6. Closing
Documents. At the closing Seller shall execute and deliver to
Purchaser:
(a) A
Xxxx of Sale substantially in the form of Exhibit B hereto.
(b) Assets
free and clear of all encumbrances.
(c) Such
other instruments as may be necessary or proper to transfer to Purchaser all
other ownership interests in the Assets to be transferred under this
agreement.
At the
closing, Purchaser shall execute and deliver, or cause to be executed and
delivered, to Seller:
(d) The
Promissory Note in the form of Exhibit H hereto as provided for in Article 2
hereof.
7. Closing
Adjustments. The following items shall be apportioned as of
midnight of the day preceding the closing date, where applicable:
Any error
or omissions in computing apportionments shall be corrected after the
closing. This provision shall survive the closing.
8. Use of
Purchase Price to Pay Encumbrances. If there is any lien or
encumbrance against Assets, or anything else affecting this sale, which Seller
is obligated to pay and discharge at the closing, Seller may use any portion of
the balance of the purchase price to discharge it, or Seller may allow to
Purchaser the amount thereof as a credit at the closing. Purchaser
agrees to provide separate certified checks as reasonably requested to assist in
clearing up these matters.
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(a)
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(b)
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Whereas the Seller has identified Insurance Innovators in the amount of
Once Hundred Eighteen Thousand Four Hundred Thirty Nine Dollars 26/100
($118,439.26)
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9. Use of
Names and PO Box and Telephone Numbers. 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 Seller’s name and trade names described in
paragraph 1 hereof and listed on Exhibit G attached
hereto. Furthermore, the Seller shall not use or authorize anyone
else to use said name or trade names. The Purchaser shall acquire all
rights to
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the
telephone listings, telephone numbers, telefax numbers, email addresses,
websites, physical addresses, and post office boxes listed under Seller’s or
said trade names. The Seller will provide the Purchaser with the
corporate resolution for the name change from Flagship Insurance, Inc.
to Xxxxxxxxxx Holdings, Inc., within 90 days of closing.
10. Compliance
with all Applicable Massachusetts State Insurance Laws, Insurance Department
Rules and regulations, and MAIP Rules and Regulations. Purchaser
represents that it is an insurance broker duly licensed in the Massachusetts to
act as such, in good standing with the Massachusetts State Department of
Insurance. Purchaser also represents to Seller that it is duly
authorized to open, maintain and monitor a trust/escrow/premium account pursuant
to applicable State laws and regulations. To that end, at the time of
closing Purchaser shall show proof of the existence of an appropriate
trust/escrow/premium account, and shall transfer as allowed by law all funds
held in trust by Seller for the benefit of insureds or insurers into Purchaser’s
account, unless to do so at the time of closing is contrary to Insurance
Department laws or rules. In such a case, from the point of closing
forward all new funds properly belonging in such a trust/escrow/premium account
for new business written by Purchaser’s new licensee shall be deposited into
Purchaser’s trust/escrow/premium account, and Seller shall maintain its existing
account until all trust/escrow/premium funds therein are dispersed to the
appropriate payees. From and after the date of closing Seller shall
have no liability for any irregularities in Purchaser’s trust/escrow/premium
accounts, and in the event of any disciplinary inquiry, hearing or enforcement
by the Department of Insurance or the MAIP arising from any post-closing
transactions or irregularities, Purchaser agrees to defend, indemnify and hold
harmless the seller from any all costs, liabilities, and damages arising from
same, including but not limited to attorneys fees and fines and
penalties.
11. Representations
and Warranties of Seller. Seller represents and warrants to
Purchaser as follows:
(a) Seller
is a corporation duly organized and validly existing under the laws of
Massachusetts, and is duly licensed as an insurance broker in MA, NY, CT, and
RI.. Seller has full power and authority to conduct its business as
now carried on, and to carry out and perform its undertakings and obligations as
provided herein.
(b) No
action, approval, consent or authorization of any government authority is
necessary for Seller to consummate the transactions contemplated hereby, except
to the extent that applicable laws might require seller to notify the
Massachusetts Insurance Department of a change of address or status as
licensee.
(c) Seller
is the owner of and has good and marketable title and /or rights of ownership to
the Assets, free of all liens, claims and encumbrances, except as may be set
forth herein.
(d) There
are no violations of any law or governmental rule or regulations pending against
Seller or the Assets hereto.
(e) There
are no judgments, liens, suits, actions or proceedings pending
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against
Seller or the Assets.
(f)
Seller owns the rights to the insurance expirations and these are delivered with
good title.
(g) Seller
will use its best efforts to assist the Purchaser with transferring the
Insurance Company Appointments to the Purchaser.
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(h)
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Seller
has had no material adverse changes in its
business.
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(i)
Seller and Xxxxx Xxxxxxxxxx, individually (collectively, the “Selling
Parties”)agree that they will
not engage directly or indirectly in the business of selling Policies in or
within a fifty (50) mile radius of 000 Xxxxxx Xxxxxx Xxx Xxxxxxx, XX for a
period of three (3) years from and after the closing date except as an employee
or broker for the Purchaser. Selling Parties further agree that for a
period of five (5) years from and after the termination of Xxxxx Xxxxxxxxxx or
closing date whichever is greater, they will not directly or indirectly solicit
or write 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. In addition,
Selling Parties agree not to make any disparaging statements about Purchaser,
its assigns or the Agency Assets. Selling Parties agree not to
provide any customer lists, customer records, customer files, customer renewal
or expiration lists, or other confidential information regarding the Customer
Accounts sold pursuant to this Agreement to any Person without Purchaser’s prior
written consent. Finally, Selling Parties agree that they will not,
for a period of two (2) years following the closing date, directly or
indirectly, solicit any of the producers or employees associated with the Agency
Assets to work for or contract with Seller. The parties acknowledge and agree
that the period associated with any of the restrictive covenants contained in
this paragraph 10(i) shall be suspended during any period of violation and/or
any period of time required to enforce this covenant by settlement, mediation,
arbitration, litigation, threat of arbitration or threat of litigation.
Moreover, Selling Parties agree that violation of the covenants set forth in
this paragraph 10(i) will cause Purchaser irreparable harm and Purchaser shall
be entitled to the immediate issuance of a temporary restraining order for any
violations hereof. The parties also acknowledge that the covenants
set forth in this paragraph 10(i) are material to this agreement, that the
covenants contained in this paragraph 10(i) are reasonable and necessary, and
that Seller has received sufficient and adequate consideration for
same.
12. Representations
and Warranties of Purchaser. Purchaser represents and warrants
to Seller as follows:
(a) Purchaser
is a corporation duly organized and validly existing under the laws of New
Jersey, and is duly licensed as an insurance broker by the State of
Massachusetts. Purchaser has full power and authority to carry out
and perform its undertakings and obligations as provided herein, including the
legal right and capacity to open and maintain a trust/escrow/premium account as
described in section “11’, supra.. The execution and delivery by
Purchaser
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of this
agreement and the consummation of the transactions contemplated herein have been
duly authorized by the Board of Directors of Purchaser and will not conflict
with or breach any provision of the Certificate of Incorporation or by-laws of
Purchaser.
(b) No
action, approval, consent or authorization of any governmental authority is
necessary for Purchaser to consummate the transactions contemplated
hereby.
(c)
There are not judgments, liens, suits, actions or proceedings pending or, to the
best of Purchaser's knowledge, threatened against Purchaser or its
property.
13. No Other
Representations. Purchaser acknowledges that neither Seller
nor any representative or agent of Seller has made any representation or
warranty (expressed or implied) regarding the Assets or the business, or any
matter or thing affecting or relating to this agreement, except as specifically
set forth in this agreement. Seller shall not be liable or bound in
any manner by any oral or written statement, representation, warranty, agreement
or information pertaining to the Assets or the business or this
agreement. Purchaser has inspected the Assets, Purchaser agrees to
take the Assets “as is” and in their present condition, subject to reasonable
use, wear, tear and deterioration between now and the closing date.
14. Conduct
of the Business. Seller, until the closing, shall conduct the
business in the normal, useful and regular manner.
Unless
and until the closing shall take place, Purchaser shall hold in confidence all
information obtained in connections with this agreement, and, if for any reason
the closing shall not take place, Purchaser shall return to Seller all documents
received hereunder.
15. Income
and Expenses Before and After the Closing. Except as setforth
in Section 5(A-I) or otherwise provided in this agreement, Seller shall be
liable for the payment of all bills for payroll, accrued vacations, merchandise,
goods, services, utilities, inventory delivered to the business, and any other
liability incurred before the closing; and Purchaser shall be liable for the
payment of all bills for payroll, vacation, merchandise, goods, services,
utilities and inventory delivered to the business, and any other liability,
incurred on or after the date of closing.
The
provisions of this Article shall survive the closing.
16. Conditions
to Closing: The obligations of the parties to close hereunder
are subject to the following conditions:
(a) All
of the terms, covenants and conditions to be complied with or performed by the
other parties under this agreement on or before the closing shall have been
complied with or performed in all material respects.
(b) Execution
of Employment and/or Broker/Producer Agreements between the Purchaser and Xxxxx
Xxxxxxxxxx and Xxxxx Xxxxxx .
(b) All
representations or warranties of the other parties herein are true in all
material respects as of the closing date.
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(c) On
the closing date, there shall be no liens or encumbrances against the
Assets.
17. Risk of
Loss The risk of loss to the assets of the business sold
hereunder, until the closing, is assumed and shall be borne by
Seller.
18. Default (a) In the event that
the Purchaser shall fail to pay the amount due on the date of closing as
described in paragraph 2(a,b,c) 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(a) hereof within fifteen (15) 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 Purchaser fails to cure its default within thirty (30) days, Seller
shall be entitled to exercise the rights and remedies available to Seller
allowed by applicable law.
19. Brokerage. The
parties hereto represent and warrant to each other that they have not dealt with
any broker, consultant or finder in connection with this agreement or the
transactions contemplated hereby, other than NEW WORLD CAPITAL GROUP,INC., and
no other consultant or any other person is entitled to receive any brokerage
commission, finder's fee, advisory fee or similar compensation in connection
with this agreement or the transactions contemplated hereby. Each of
the parties shall indemnify and hold the other parties harmless from and against
all liability, claim, loss damage or expense, including reasonable attorney's
fees, pertaining to any other broker, finder or other person with whom such
party has dealt. The provisions of this Article 19 shall survive the
closing.
Purchaser
shall pay the advisory (broker's) fee and said fee is only due and owning to NEW
WORLD CAPITAL GROUP, INC. upon closing of this Agreement. Purchaser
shall also pay any and all brokerage fees to NEW WORLD CAPITAL GROUP, INC. owing
for the sale of business referred to herein.
20. Assignment. It
is agreed that Purchaser has the unconditional right to assign or transfer any
or 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.
21. Notices. All
notices, demands and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been properly given if
delivered by hand or by Federal Express courier or by registered or certified
mail, return receipt requested, with postage prepaid, to Seller or Purchaser, as
the case may be, at their addresses first above written, or at such other
addresses as they may designate by notice given hereunder. Copies of
all such notices, demands and other communications simultaneously shall be given
in the aforesaid manner to
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Seller's
attorney, and
to Purchaser, Sangamon Associates, Inc. XX Xxx 000 Xxxxxxxxxx, XX
00000. The respective attorneys or representatives for the parties
hereby are authorized to give any notice required or permitted hereunder and to
agree to adjournments of the closing.
22. Survival. None
of the representations, warranties, covenants, or other obligations of Seller
hereunder shall survive the closing, except as expressly provided herein and
then only for a period of one year from the closing date. Acceptance
of the Xxxx of Sale by Purchaser shall be deemed full and complete performance
and discharge of every agreement and obligations on the part of Seller
hereunder, except those, if any, which expressly are stated herein to survive
the closing, and then such survival shall be only for a period of one
year.
23. Entire
Agreement. This agreement contains all of the terms agreed
upon between Seller and Purchaser with respect to the subject matter
hereof. This agreement has been entered into after full
investigation. All prior oral or written statements, representations,
promises, understandings and agreements of Seller and Purchaser are merged into
and superseded by this agreement, which alone fully and completely expresses
their agreement.
24. Changes
Must be in Writing. No delay or omission by either Seller or
Purchaser in exercising any right shall operate as a waiver of such right or any
other right. This agreement may not be altered, amended, changed,
modified, waived or terminated in any waiver by any party of any waiver or any
breach hereunder shall be deemed a waiver of any other or subsequent
breach.
25. Captions
and Exhibits. The captions in this agreement are for
convenience only and are not to be considered in construing this
agreement. The Exhibits annexed to this agreement are an integral
part of this agreement, and where there is any reference to this Agreement it
shall be deemed to include said Exhibits.
26. Governing
Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey. If any
provisions of this agreement shall be unenforceable or invalid, such
enforceability or invalidity shall not affect the remaining provisions of this
agreement.
27. Binding
Effect. This agreement shall not be considered an offer or an acceptance
of an offer by Seller, and shall not be binding upon Seller until executed and
delivered by both Seller and Purchaser. Upon such execution and
delivery, this agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns.
28. Hold
Harmless Guaranty. (a) Seller hereby agrees and promises
to indemnify, defend and hold Purchaser harmless for any and all liability that
may arise by reason of Seller's or Seller's owner’s, directors, officers,
employees and independent contractors negligence or failure to renew, issue or
otherwise service any policy prior to the date of closing, it being agreed that
any liability for such errors and omissions in the transaction of business shall
vest solely with Seller. Further, Seller hereby agrees and promises
to indemnify, defend and hold Purchaser harmless from and against any and all
claims made by any Person for Seller’s, Seller’s owners, directors, officers,
employees and independent contractors actions and/or inactions prior to the
closing date.
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(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 owners,
directors, officers, employees and independent contractors negligence or failure
to renew, issue or otherwise service any Policy on or after the date of closing,
it being agreed that any liability for such errors and omissions in the
transaction of business shall vest solely with Purchaser. Further, Purchaser
hereby agrees and promises to indemnify, defend and hold Seller harmless from
and against any and all claims made by any Person or entity for Purchaser’s, or
Purchaser’s owners, directors, officers, employees and independent contractors
actions and/or inactions on or after the closing date, including but not limited
to any fines and penalties assessed or levied by the Department of Insurance
arising from any conduct of the Purchaser.
29. Mediation Any
issue, claim or dispute that may arise out of or in connection with this
Agreement (including any exhibits, addenda or other document executed in
connection herewith) and which Purchaser and Seller are not able to resolve
themselves by negotiation, shall be in the first instance submitted to mediation
in a manner agreed to by Purchaser and Seller. Purchaser and Seller
agree to use mediation to attempt to resolve such issue, claim or dispute prior
to filing any legal proceedings in court. Purchaser and Seller will
select an independent mediator agreeable to both parties. The
mediator will communicate with the parties to arrange and convene the mediation
process that will be most efficient, convenient and effective for both
parties. The costs of the mediation and fees of the mediator will be
borne equally by Purchaser and Seller. The parties will cooperate
with the mediator in coming to a reasonable agreement on the mediation
arrangements which will include the time and place for conducting the mediation,
who will attend or participate in the mediation and what information and written
material will be exchanged before the mediation. The mediation will
be conducted at a place agreeable to both Purchaser and Seller.
30. Legal
Fees In the Event of Litigation. In the event that
any legal proceeding is brought with respect to this Agreement, the prevailing
party shall be entitled to be reimbursed for and/or have judgment for all of
their costs and expenses, including reasonable attorney's fees and legal
expenses.
IN WITNESS WHEREOF, the
parties have executed this agreement the date first above written.
ATTEST: SANGAMON
ASSOCIATES, INC.
/s/ Xxxxx
Xxxxxxx
/s/ Xxxxxxx X. Xxxxxx
By: Xxxxx
Xxxxxxxx,
By: Xxxxxxx X. Xxxxxx,
Chief
Executive
Officer President
FLAGSHIP
INSURANCE, INC.
/s/
Xxxxx Xxxxxxxxxx
By:
Xxxxx Xxxxxxxxxx,
President
11
EXHIBIT
A.
AGREEMENT
NOT TO SOLICIT OR COMPETE, DISPARAGE, ETC.
The
undersigned agree(s) to and is (are) bound by the covenants/representations set
forth in paragraph 12(i) herein and specifically acknowledge that the covenants
contained in said paragraph are assignable and are reasonable and necessary and
that the undersigned has received ample consideration for same.
/s/ Xxxxx Xxxxxxxxxx
By: Xxxxx Xxxxxxxxxx,
individually
12
Exhibit B
to Agreement for Purchase of Agency Assets
Now on
this 3rd day of August, 2007, for good and valuable consideration, the receipt
of which is hereby acknowledged, Flagship Insurance, Inc., as Seller, hereby
sells, transfers, assigns and conveys unto Sangamon Associates, Inc., as
Purchaser, all of the Seller's right, title and interest in and to the Agency
Assets carried under the name of Flagship Insurance Inc.., or any variation
thereof, located at and used in the agency operations located at 000 Xxxxxx
Xxxxxx, Xxx Xxxxxxx, XX. Such sale shall consist of and include
Seller’s: general “book of insurance business”; all customer accounts associated
with all Policies related to Insurance Services, Investment Services, Banking
Services and Credit Services; goodwill; all electronic and paper customer lists;
all electronic and paper customer records; all electronic and paper customer
files; all customer renewals; all telephone numbers, post office boxes,
addresses, trade names; all sweep accounts and other business related bank
accounts; and all other intangible assets associated with Seller’s
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
/s/
Xxxxx Xxxxxxxxxx
Name: Xxxxx
Xxxxxxxxxx
Title: President
State
of Massachusetts )
ss:
County
of Bristol
)
Be it
remembered that on this 3rd day of August, 2007 , before me, a Notary
Public, in and for the County and State aforesaid, appeared Xxxxx Xxxxxxxxxx who
is known to me and who executed the above and foregoing Xxxx of
Sale.
/s/ Xxxxxx Xxx Xxxxx
Notary Public
Notary
Seal: Xxxxxx Xxx Xxxxx
Notary Public
Commonwealth
of
Massachusetts
My
Commission Expires: February 7, 2014
13
Exhibit C
to Agreement for Purchase of Agency Assets
TRANSFER
LETTER
(Date)
ATTENTION: Agency
Licensing / Agency Contracting / Marketing Department / Underwriting Department
/ Accounting Department
Re: Transfer
of Flagship Insurance, Inc. (Agency Code No._____________)
To Whom
It May Concern:
Be
advised that Flagship
Insurance, Inc. of New Bedford MA has sold its agency assets to Sangamon
Associates, Inc. effective on July 31, 2007. Please route this
transfer letter to the proper department so that the agent of record for the
policies assigned to Flagship Insurance, Inc. will be transferred to Sangamon
Associates, Inc.
The
following information about Sangamon Associates, Inc. is provided to expedite
the process:
Primary
Contact Xxxxxxx
X. Xxxxxx
Voice Phone
Number 000
000 0000
Fax Phone
Number 000
000 0000
Email
Address xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
Street
Address: 00
X. Xxxx Xxxxxx
Xxxx,
Xxxxx and Zip
Code: Xxxxxxxxxx,
XX 00000
Tax Identification
Number:
Sangamon
Associates, Inc. accepts transfer of the referenced policies.
Thank you
for your time and attention to this matter.
_____________________________
By:
Title:
14
Exhibit D
to Agreement for Purchase of Agency Assets
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1. All
tangible assets too numerous to mention, affixed to the property or not,
located at the Seller's agency facilities or associated with Seller's
agency operations at 000 Xxxxxx Xxxxxx, Xxx Xxxxxxx XX
00000. Such assets include but are not limited to fax machines,
phones, website, typewriters, copiers, printers, supplies, office
furniture, appliances, office equipment and office
decorations.
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The above
listing specifically identifies the office equipment and personal property which
are a part of the assets being sold pursuant to our Agreement and further
identifies the office equipment and personal property specifically excluded from
the assets being sold. Seller agrees that any office equipment and
personal property not specifically excluded herein shall be construed as office
equipment and personal property which are part of the assets being sold pursuant
to this Agreement.
Seller:
Purchaser:
/s/
Xxxxx
Xxxxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
By: Xxxxx
Xxxxxxxxxx
By: Xxxxxxx X. Xxxxxx
Title:
President
Title: President
/s/ Xxxxx X. Xxxxxxxx
By: Xxxxx X.
Xxxxxxxx
Title: Chief Executive
Officer
15
Exhibit E
to Agreement for Purchase of Agency Assets
AFFIDAVIT
STATE
OF MASSACHUSETTS )
SS:
COUNTY
OF BRISTOL
)
COMES
NOW, the undersigned, having first been duly sworn on oath, states and alleges
as follows:
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1.The
undersigned is sufficiently familiar with insurance industry accounting
processes to understand what documents are required by Flagship Insurance,
Inc. to verify commissions from independent sources such as insurance
companies and managing general agents and these documents are
attached.
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2.The
attached documents are originals or copies certified by the undersigned to
be accurate representations of the originals. The attached
documents are full and complete records and have not been
altered.
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3.The
undersigned is not aware of any circumstances which would make the
attached documents unreliable for forecasting future
commissions. Such circumstances could include (a) the actual or
pending cancellation or non-renewal of policies which are not recorded on
the attached documents; (b) insurance company changes in underwriting,
organization, premiums or management; (c) the actual, pending or
threatened Company contract cancellation, whether written or verbal; or
(d) regulatory changes.
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4.The
attached documents include full and complete statements for the following
listing of insurance companies and general agents for the period of _____,
_____ to ______, ______.
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Dated:
August 1, 2007
SEE ATTACHED LISTING
The
attached documents are originals or certified copies of original documents
necessary for Flagship Insurance, Inc.. to verify commissions from independent
sources pursuant to paragraph 10(B) of the Agreement and the undersigned hereby
certifies the attached to be accurate originals thereof or representations of
originals.
SELLER:
/s/
Xxxxx Xxxxxxxxxx
Name: Xxxxx
Xxxxxxxxxx
Title: President
State
of Massachusetts )
ss:
County of
Bristol
)
Be
it remembered that on this 3rd day of August, 2007, before me, a Notary
Public, in and for the County and State aforesaid, appeared Xxxxx Xxxxxxx who is
known to me and who executed the above and foregoing Affidavit.
/s/ Xxxxxx Xxx Xxxxx
Notary Public
Notary
Seal: Xxxxxx Xxx Xxxxx
Notary Public
Commonwealth
of
Massachusetts
My
Commission Expires: February 7, 2014
17
Exhibit F
to Agreement for Purchase of Agency Assets
LISTING
OF AGREEMENTS
The above
listing specifically identifies all written and verbal agreements that Seller
currently has, or has had during the past twelve (12) months, with licensed
producers, representatives, agents or other Persons related to Seller’s Agency
Assets.
Seller:
Purchaser:
/s/ Xxxxx
Xxxxxxxxxx /s/
Xxxxxxx X. Xxxxxx
By: Xxxxx
Xxxxxxxxxx Xxxxxxx
X. Xxxxxx
Title:
President Title:
President
/s/ Xxxxx
X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Chief Executive Officer
18
Exhibit G
to Agreement for Purchase of Agency Assets
LISTING
OF TRADE NAMES, ETC.
1. Trade
Names: Flagship
Insurance
Xxxxxxxxx
& Xxxxxxxxxx
R&K
2. Business
addresses:
000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000
3. Websites/Email
Addresses: xxx.xxxxxxxxxxx.xxx
4. Telephone
and telefax
numbers: _______________________
(telephone)
_______________________
(fax)
_______________________
(cell)
5. Former
owners: _________________________________
6. Secondary
Locations: NONE
7. Former
Locations: NONE
8. Home
Address of
owner: ___________________________________
Seller
warrants and represents the above listing specifically identifies all trade
names Seller currently uses or has used; all locations at or from which Seller
conducts or has conducted agency business; all websites and email addresses; all
telephone and telefax numbers; Seller’s chief executive office if Seller
conducts business at more than one location; place of individual Seller’s
current and past places of residence (past five (5) years) and the period during
which Seller resided at such place; names of prior owners of any of the Agency
Assets; all sweep accounts and other business related bank accounts; and the
location of Agency Assets for preceding five (5) years.
Seller:
Purchaser:
/s/ Xxxxx
Xxxxxxxxxx
/s/ Xxxxxxx X. Xxxxxx
By: Xxxxx
Xxxxxxxxxx
By: Xxxxxxx X. Xxxxxx
Title:
President
Title: President
Xxxxx X. Xxxxxxxx
By: Xxxxx X.
Xxxxxxxx
Title: Chief Executive
Officer
19
EXHIBIT
H.
PROMISSORY
NOTE
$100,000.00
August 1, 2007
FOR VALUE RECEIVED, the
undersigned, Sangamon Associates, Inc, a New Jersey corporation (the "Maker"),
promises to pay to Xxxxx Xxxxxxxxxx, individually ("Holder"), or order, the
principal sum of One Hundred Thousand and No/100 Dollars ($100,000.00), without
interest in accordance with and subject to the terms and conditions of the
Purchase Agreement dated August 1, 2007 and herein contained and set
forth.
1. Amortization. Principal
shall be payable in Eleven (11) monthly installments of Eight Thousand Three
Hundred Thirty Three Dollars and 33/100 ($8,333.33), less any adjustments
pursuant to Section 5 of the Purchase Agreement and One monthly payment of Eight
Thousand Three Hundred Thirty Three Dollars and 37/200
($8,333.37). If not sooner paid, the entire unpaid principal balance
hereof, together with all other sums, if any, due hereunder shall be and become
due and payable Fifteen (15) months after the date of the closing of the
Purchase Agreement subject to adjustment pursuant to Section 2(a) thereof
("Maturity", or the "Maturity "Date").
2. Acceleration. Upon
the occurrence of any Event of Default hereunder the whole sum of principal and
all sums due hereunder, if any, shall become immediately due and payable at the
option of the Holder, without notice to or demand upon the Maker.
3. Default
Interest. Upon and following the occurrence of any Event of
Default, and so long as the same shall continue, each and every delinquent
payment, if any, including the entire principal balance shall bear interest to
the extent permitted by law at the rate which is equal to ten percent (10%) per
annum (the "Default Rate").
4. Event of
Default. Each of the following shall constitute an Event of
Default hereunder, and, upon the occurrence of any Event of Default, all
obligations hereunder shall, at the option of the Holder, become immediately due
and payable: (i) any sum owing hereunder is not paid within fifteen
(15) days of the date when due and continues unpaid for a period of twenty (20)
days following notice of nonpayment from Holder to Maker; (ii) any
petition or application for a custodian, as defined by Xxxxx 00, Xxxxxx Xxxxxx
Code (the "Bankruptcy Code"), or for any form of relief under any provision of
the Bankruptcy Code or any other law pertaining to reorganization, insolvency or
readjustment of debts is filed by or against the undersigned, or any surety or
guarantor of the indebtedness evidenced by this Note (hereinafter referred to as
"said surety or guarantor"), their respective assets or affairs; (iii) the
undersigned makes an assignment for the benefit of creditors, or is granted an
order for relief under any chapter of the Bankruptcy Code; (iv) a custodian, as
defined by the Bankruptcy Code, takes charge of any property of any of the
undersigned (or said surety or guarantor); or (v) garnishment, attachment, levy
or execution is used against any of the property or effects of the undersigned
(or said surety or guarantor) unless released within fifteen (15)
days.
20
5. Non-Waivers. It is
expressly agreed that the acceptance by the Holder of any performance which does
not comply strictly with the terms of this Note shall not be deemed to be a
waiver of any right of the Holder.
6. Collection
Charges. In the event of any Event of Default, the undersigned
agrees to pay all costs and collection charges. Should suit or other action be
instituted to collect this Note, or any portion thereof, the prevailing party
shall be entitled to recover from the losing party, in addition to costs and
disbursements allowed by law, such additional sums as attorneys' fees as the
Judge of the Court may adjudge reasonable in such suit or action.
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MAKER:
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Sangamon
Associates, Inc..
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/s/
Xxxxxxx X. Xxxxxx
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By:
Xxxxxxx X. Xxxxxx
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President
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/s/
Xxxxx X. Xxxxxxxx
By: Xxxxx X.
Xxxxxxxx
Chief Executive Officer
21
Exhibit
I
Amortization
Schedule
22
Exhibit
J.
Liabilities
Assumed
1) GE
Capital
Furniture $8,591.04 (19
payments at $452.16 with $1.00 buyout)
2) GE
Capital
Scanner $1,254.12
(21 payments at $59.72 with $1.00 buyout)
3) GE
Capital
DocStar $1,691.80 (4
payments at $422.95 with $1.00 buyout)
4) Great
American Phone $16,509.40 (46 payments at
$358.90 with Fair Market Value buyout)
5) Xxxxxx
Computers $11,141.55
(27 payments at $412.65 with $1.00 buyout)
23