Exhibit 6.19
AGREEMENT
FOR
SALE OF INSURANCE AGENCY ASSETS
THIS AGREEMENT MADE this 31stT day of March 1999 by and between THE AMERICAN
AGENCY, INC. 00000 XXXXXXXXX XXXXX, XXXX. 00, XXXXX 000, XXXXXXXX XXXX, XX and
BROOKE CORPORATION 000 X XXXXXX, 0XX XXXXX, XXXXXXXXXXXX, XX hereinafter
collectively referred to as "Sellers", and ROYAL SPECIALTY UNDERWRITING, INC.,
000 XXXX XXXXX XXXXX XXXX, XXXXX 0000, XXXXXXX, XX, hereinafter referred to as
"Purchaser".
In consideration of the mutual promises, covenants, and agreements set forth
hereinafter, the Sellers do 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. Sellers hereby agrees to sell, transfer,
assign and convey unto the Purchaser all of the Sellers' right, title and
interest in and to the property and casualty insurance agency Assets identified
on Sellers' records as "EMS Branch" which includes Sellers' "Emergency Medical
Services" program business and those insurance programs (including, without
limitation the EMT and EMS Pak programs) or policies specifically related to
Sellers' Emergency Medical Services program business. The source of commissions
for the insurance programs and policies which comprise the insurance agency
Assets sold pursuant to this agreement are more specifically identified in
Sellers' account current report from March 1, 1998 through February 28, 1999.
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 Sellers' Emergency Medical Services insurance agency
business. All such Assets are collectively referred to herein as the "Assets."
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,
in addition to a $25,000.00 xxxxxxx money deposit previously paid, the Purchaser
agrees to pay the total sum of One Million Three Hundred Eighty Seven Thousand
Three Hundred Eighty Five Dollars ($1,387,385.00) in the following manner at
Closing: Cash by wire transfer.
3. CONVEYANCE OF TITLE TO PERSONAL PROPERTY. Sellers shall convey title to the
above described property and casualty insurance agency Assets by a Xxxx 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
xxxx 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 March 31, 1999.
5. FURTHER ASSURANCE. Sellers shall, at the Closing and from time to time
thereafter, at the request of Purchaser and without further consideration,
execute, acknowledge and deliver, and cause to be done, executed, acknowledged
and delivered, all such acts, bills of sale, endorsements, assignments and other
instruments of conveyance and transfer, and all such powers of attorney and
assurances, as may be required of the Emergency Medical Services
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Program business to Purchaser, its successors and assigns, and for aiding and
assisting in collection or reducing to possession and exercising all rights with
respect to any and all of the Emergency Medical Services Program business.
6. EMPLOYMENT AGREEMENT. Simultaneously with and as a condition to the
assumption of its obligations under this agreement, Purchaser shall employ
Xxxxxx Xxxxxxx upon terms reasonably acceptable to Purchaser.
7. EFFECTIVE DATE OF TRANSFER OF BUSINESS AND OBLIGATIONS.
(A) All of the Emergency Medical Services 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 Sellers, or Sellers'
directors, officers and employees on or subsequent to the closing date.
(B) Sellers 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
Sellers, provided that Sellers pays all debts, premiums, claims and obligations
on insurance written prior to closing date.
(C) Purchaser will attempt to collect all funds owed to Sellers for insurance
written prior to the closing date. Sellers appoint Purchaser as its attorney in
fact to endorse checks made payable to Sellers by policyholders or insurance
companies. Any funds collected by Purchaser for the Sellers will be remitted to
Sellers when received.
(D) Sellers shall remit to Purchaser on the closing date any funds received by
Sellers for insurance written on or subsequent to the closing date.
(E) Sellers shall be entitled to contingencies and profit sharing commissions
received by Purchaser subsequent to the closing date if such commissions were
based on 1998 production.
8. HOLD HARMLESS GUARANTY.
(A) Sellers hereby agrees and promises to hold Purchaser harmless for any and
all liability that may arise by reason of Sellers' or Sellers' 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 Sellers.
(B) Sellers hereby also agrees to hold Purchaser harmless for any and all
liability that may be asserted against, imposed upon, or incurred or sustained
by the Purchaser as a result of or in any manner related to:
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(i) any liabilities, obligations or indebtedness of the Sellers;
(ii) any material misstatement, inaccuracy or omission on the
representations or warranties of the Sellers contained in
paragraph 12; or
(iii) any breach of any of the covenants or conditions made by the
Sellers in paragraph 10 of this Agreement.
(C) Purchaser hereby agrees and promises to hold Sellers 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 Purchasers.
9. COVENANTS OF SELLERS.
(A) Sellers does, hereby, covenant and agree that it and its directors, officers
and employees will, at all times, assist and cooperate with Purchaser in
transferring to Purchaser all Emergency Medical Services insurance business
previously written, serviced or sold by Sellers or Sellers' directors, officers
or employees.
(B) Sellers further agrees that it and its directors, officers and employees
will not engage directly or indirectly, within the continental United States, in
the business of selling Emergency Medical Services insurance policies and
policies specifically related to Sellers' Emergency Medical Services program
which comprise the insurance agency Assets sold pursuant to this agreement for a
period of five (5) years from and after the closing date except as an agent for
the Purchaser or as an agent for the Purchaser's designated representative.
(C) If requested by Purchaser and provided that all related legal expenses are
paid by Purchaser, then Sellers 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 Sellers and its directors,
officers, independent contractors and employees.
(D) Sellers agrees that it will not do or fail to do any act or take any action
that would in any way impair the rights to the renewals and expirations conveyed
to Purchaser herein including, without limitation, any action or in action that
would constitute a breach of its agreements with any insurance carriers that
would impair such rights.
10. 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 Georgia. Purchaser warrants and
represents that it has taken an 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.
11. WARRANTIES AND REPRESENTATIONS OF THE SELLERS.
(A) Sellers warrants and represents that it is a corporation, duly organized,
existing and in good standing under the laws of the State of Kansas. Sellers
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.
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(B) The Sellers represents that it has received insurance commissions, net of
payments to broker agents, from the sale of Emergency Medical Services insurance
policies of at least One Million One Hundred Eighteen Thousand Eight Hundred
Fifty Nine Dollars ($1,118,859.00), for the twelve month period ending February
28, 1999.
(C) The Sellers warrants and represents that it is the sole and legitimate, free
and clear of any liens or encumbrance owner of the Emergency Medical Services
insurance agency Assets (including, without limitation, the rights to all
renewals and expirations for all policies of emergency medical services produced
by the Sellers) to be purchased and sold pursuant to this agreement.
(D) The Sellers warrants and represents that no representation or warranty made
in this Agreement by Sellers and no statement contained in any document,
schedule, certificate or other instrument furnished or to be furnished to
Purchaser by Sellers in connection with the transaction contemplated by this
Agreement, contains or will contain any untrue statement of a material fact.
(E) The Sellers warrants and represents that there is no injunction or decree of
any court, tribunal, Government, governmental agency, bureau, department,
commission, board or other authority or instrumentality against or otherwise
affecting any of the Emergency Medical Services Program business of the Sellers.
(F) The Sellers warrants and represents that the Purchase Agreement has not
given any preference to Creditors as that term may be defined and understood in
bankruptcy law which might give rise to liens or claims affecting title to the
expirations or renewals purchased by Sellers.
(G) The Sellers warrants and represents that it currently has an errors and
omissions insurance policy in force and will provide Purchaser with proof of
such coverage upon request.
(H) The Sellers represents and warrants that all computer systems and related
software applications ("Systems") used by the Purchaser as provided in the
Office Space Agreement, at the present time and throughout the term of the
Office Space Agreement, accurately process, compare, sequence, manage and
manipulate all date data from, into and between the twentieth and twenty-first
centuries without errors or omissions and that the occurrence in or use by the
Systems of such dates will not adversely affect the performance, computations or
output of the Systems and will not generate incorrect values involving such
dates or cause an abnormal ending.
12. CONTINUING WARRANTY. Each of the warranties and representations in
paragraphs 10 and 11 or in any document delivered pursuant to the provisions of
this Agreement shall be materially true and correct upon and as of the Closing
Date as though such representations and warranties were made at and as of the
Closing Date shall be deemed as restated and applicable on and as of the Closing
date.
13. USE OF NAME AND PO BOX AND TELEPHONE NUMBER.
(A) 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 American
Agency for the sale of Emergency
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Medical Services insurance but is not entitled to the use of said trade name for
any other purpose. Furthermore, the Purchaser is not entitled to assign or
license the use of said trade name and shall not authorize any other person or
entity to use said trade name. The Purchaser acknowledges that Sellers shall
continue to sell insurance using a variation of the trade name of The American
Agency. Purchaser agrees that any such trade name variation used by Sellers
shall permit the use of American at the beginning of the trade name but shall
not exactly duplicate "The American Agency" trade name. For example, acceptable
variations include trade names such as the American Insurance Group, the
American Insurance Agency, the American Heritage Agency, the American Surplus
Lines Agency, the American General Agency or the American Managing General
Agency. The Purchaser acknowledges that Sellers' corporate name is The American
Agency, Inc. and Purchaser agrees that Sellers is not required to change its
corporate name, however Sellers agrees that its advertising and marketing shall
be conducted using a variation of the trade name of The American Agency as
provided for in the above. Sellers agrees that purchaser shall obtain Sellers'
rights to the logo currently used by Sellers to sell Emergency Medical Services
insurance and that Sellers shall not use this logo in its advertising and
marketing. The Purchaser shall obtain the rights to THE telephone listings for
telephone number (000) 000-0000 that is listed under said trade name and to the
Xxxx Xxxxxx Xxx 00000 Xxxxxxxx Xxxx, Xxxxxx 00000-0000 that is listed under such
name.
(B) Sellers shall, no later than the closing date, acquire a post office box
other than the Post Office Box 12070 referenced above from which to conduct its
business. Within a reasonable period of time after the closing date, Sellers
shall notify its vendors, customers and others of Sellers' new post office box
address, during which time the Purchaser specifically acknowledges that any mail
associated with the Sellers' business is Sellers' property and shall be treated
confidentially and shall be immediately delivered to Sellers.
(C) To the extent provided for in this agreement, Purchaser and Sellers shall
share a trade name and telephone number. As such, Purchaser and Sellers agree to
be professional and courteous when communicating with the other party's
customers. Furthermore, Purchaser and Sellers agree to initiate telephone
transfers and relay accurate telephone messages to the other party to minimize
the disruption and inconvenience resulting from the sale of Assets pursuant to
this agreement.
14. MISCELLANEOUS AGREEMENTS OF THE PARTIES.
(A) Unless otherwise agreed to in writing, the Purchaser shall not assume any of
Sellers' obligations with regards to employees, lessors (real or personal
property), vendors, suppliers, advertisers or utility companies.
(B) Purchaser acknowledges that, as of closing, it will have performed any and
all inspections, investigations or other "due diligence" as its deems necessary
or appropriate, that it will be, and is, relying solely upon its own judgment
and decision making in determining the suitability of the tangible Assets as
meeting its investment criteria or in entering into, or closing under, this
Agreement, and that, except as otherwise expressly provided in the Agreement,
Buyer agrees to accept the tangible Assets in "AS-IS" condition and neither
Sellers nor anyone on Sellers' behalf has made, and does not make, and Purchaser
is not relying upon, any representations or
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warranties, express or implied, regarding the Assets, their condition or their
fitness or suitability for Purchaser's intended or particular use.
(C) Purchaser has employed Xxxxxx Xxxxxxx. Sellers shall release Mr. Handler and
any other former employees of the Sellers that the Purchaser employs, from their
non-compete or non-solicitation agreements specifically with regards to the sale
of Emergency Medical Services insurance provided that all other non-compete or
non-solicitation agreement restrictions remain in full force and effect.
(D) Sellers shall lease office space to Purchaser pursuant to an Office Space
Agreement in the form attached hereto as Exhibit B.
(E) At Purchaser's option, Purchaser may electronically transfer the data stored
on Sellers' Applied Agency Management computer system that is specifically
related to Sellers' Emergency Medical Services program which comprise insurance
agency Assets sold pursuant to this agreement, provided that the Purchaser pays
for the programming and support expenses associated with any such transfer and
provided that any such transfer does not disrupt Sellers' business operations.
15. GOVERNING LAW. This Agreement shall be construed and enforced in accordance
with the laws of the State of Kansas.
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.
(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:
Xxxx Xxxxxxxxx, Vice President
Royal Specialty Underwriting, Inc.
000 Xxxx Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, XX 00000
With copy to: Xxxxx X. Xxxxxxx, Esq.
Royal & Sun Alliance
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
or such other addresses as may be finished to the Sellers in writing.
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(B) Notices which may be required to be sent to the Sellers 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, Vice President
The American Agency, Inc.
00000 Xxxxxxxxx Xxxxx, Xxxx. 24, Suite 250
Overland Park, KS 66210
or such other addresses as may be furnished to the Purchaser in writing.
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.
Sellers: Purchaser
THE AMERICAN AGENCY, INC. ROYAL SPECIALTY UNDERWRITING, INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ X. X. Xxxxxxxx
-------------------------- -------------------------
Title: President Title: President
BROOKE CORPORATION
By: /s/ Xxxxx X. Xxxxx
--------------------------
Title: Vice President
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Exhibit A
XXXX OF SALE
Now on this ____ day of ___________, 1999, for good and valuable consideration,
the receipt of which is hereby acknowledged, The American Agency, Inc., as
Seller, hereby sells, transfers, assigns and conveys unto Royal Specialty
Underwriting, Inc., as Purchaser, all of the Seller's right, title and interest
in and to the property and casualty insurance agency assets identified on
Seller's records as "EMS BRANCH" WHICH INCLUDES SELLER'S "Emergency Medical
Services" program BUSINESS and THOSE INSURANCE PROGRAMS OR POLICIES SPECIFICALLY
RELATED TO SELLER'S EMERGENCY MEDICAL SERVICES PROGRAM BUSINESS. The source of
commissions FOR THE INSURANCE PROGRAMS AND POLICIES WHICH COMPRISE THE INSURANCE
AGENCY ASSETS BEING CONVEYED ARE more specifically identified in Seller's
confidential packet dated February 8, 1999. 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 Emergency Medical Services insurance agency business.
All assets are hereby conveyed unto Purchaser, free and clear of any claims,
liens, taxes and encumbrances whatever.
The assets are sold to Purchaser "AS-IS". Seller makes no express or implied
warranties with respect to the assets, other than the warranties of title set
forth above, and makes no warranties of merchantability or fitness for any
particular purpose.
SELLER
Attest:
By:_________________________
_____________________ Title:________________________
Secretary
State of Kansas
County of XXXXXXX
Be it remembered that on this 31ST day of MARCH, 1999, before me, a Notary
Public, in and for the County and State aforesaid, appeared Xxxxx Xxxxx, Vice
President of The American Agency, Inc., who is known to me and who executed the
above and foregoing Xxxx of Sale.
---------------------------
Notary Public
My Commission Expires: 3-6-01
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Exhibit B
OFFICE SPACE AGREEMENT
On this 31st day of March, 1999, the American Agency, Inc. ("American") agrees
to provide office space to Royal Specialty Underwriting, Inc. (Royal") at
American's offices located in Building 24 on 00000 Xxxxxxxxx Xxxxx in Overland
Park, Kansas. The term of this office space agreement shall be for a period of
not less than six (6) months beginning on April 1, 1999, after which this
agreement may be terminated by either party upon 30 days written notice.
During the term of this office space agreement, American shall provide Royal and
its officers, employees and contractors with use during normal business hours of
the following:
1. American's common office space such as lobby areas and common office
facilities such as fax machine, copy machine, receptionist, conference
rooms and local phone facilities.
2. private cubicle space and private office space, the use of which shall
include desks, chairs and computers.
3. American's Applied Agency Management computer system and Royal and TIG
on-line computer systems.
4. filing cabinets for storage of Emergency Medical Services policy files.
Royal shall be responsible for payment of all postage, long distance telephone
charges, office supplies, advertising, motor vehicle reports and other
incidental office expenses that it incurs. Royal and its officers, employees and
contractors agree not to use American's office space for any purposes other than
selling Emergency Medical Services insurance policies.
As consideration for the use of said office space, Royal shall pay American at
the rate of $1,140.00 per month for each private office and $316.67 per month
for each private cubicle, such payment to be made in advance by the tenth (10th)
day of each month. As soon as possible, the parties will execute a letter
agreement confirming the offices and cubicles to be used by Royal.
Each party agrees that its officers, employees and contractors shall not:
1. use of permit the use of abusive or discourteous language, threats or
fighting in or near Brooke office space;
2. use or permit the use of alcohol or illegal drugs in or near Brooke
office space;
3. xxxxxx or possess weapons in or near Brooke office space;
4. create an offensive environment in or near Brooke office space
including but not limited to unwanted sexual advances, the use of
sexually explicit or vulgar language, the presence of sexually explicit
photographs or other materials, the use of racist language or rhetoric,
the presence of racial materials or the telling of sexual or racist
stories.
While using American's office space, Royal may be exposed to confidential
customer information which is owned or controlled by American, agents of
American, companies affiliated with American or agents of companies affiliated
with American. As such, Royal and its officers, employees and contractors agree
to respect the confidentiality of any such information and shall not use, trade
or sell any such confidential customer information for any reason.
Correspondingly, American and it officers, employees and contractors agree to
respect the
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confidentiality of customer information owned or controlled by Royal and shall
not use, trade or sell any such confidential customer information for any
reason. Each party agrees to cooperate with the other party's reasonable
instructions and requests regarding use of the space as may be necessary to
maintain the confidentiality of the requesting party's information. American
represents and warrants that it has full right, power and authority to grant the
rights as herein provided.
Each party shall indemnify and hold harmless the other party from and
against any and all (a) losses or damages to any equipment or other personal
property kept by the indemnified party in the Brooke office space and (b)
personal injuries, which are caused by the indemnifying party's negligence or
willful misconduct, or the negligence or willful misconduct of such party's
officers, employees or contractors.
Each party has the right to terminate this Agreement if the other party
breaches or is in default of any obligation hereunder which default has not been
cured within fifteen (15) days after receipt of notice of such default (or such
additional cure period as the nondefaulting party may authorize).
Any notice required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given and delivered (a) one (1)
business day after the day on which the same has been delivered prepaid to a
national courier service guaranteeing next day service or (b) five (5) business
days after deposit in the United States mail, registered or certified, return
receipt requested, postage prepaid, in each case addressed to the party to whom
such notice is to be given at the address listed below for such party, or at the
most recent address specified by written notice given to the other party in the
same manner provided in this section; PROVIDED, HOWEVER, that notice of an
address change shall not be effective until actually received:
If to Royal: Royal Specialty Underwriting, Inc.
000 Xxxx Xxxxx Xxxxx Xx, Xxxxx 0000
Xxxxxxx, Xxxxxxx, 00000
Attn: Xxxx Xxxxxxxxx
With required copy to: Royal Indemnity Company
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Attn: Corporate Counsel
(MS 1313)
If to American: ----------------------------
----------------------------
----------------------------
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned, in whole or in part, and whether by operation of law or otherwise,
without the prior written consent of the other party.
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No change, amendment, qualification, cancellation or termination hereof shall be
effective unless in writing and duly executed by each of the parties hereto. No
failure of any party to enforce any provisions hereof or to resort to any remedy
or to exercise any one or more of alternate remedies and no delay in enforcing,
resorting to or exercising any remedy shall constitute a waiver by that party of
its right subsequently to enforce: the same or any other provision hereof or to
resort to any one or more of such rights or remedies on account of any such
ground then existing or which may subsequently occur.
This Agreement and the, legal relationship among the parties shall be
governed by and construed in accordance with the internal laws of the State of
Kansas, without regard to conflicts of law principles.
AMERICAN: ROYAL:
By:_________________________ By:_________________________
Title:________________________ Title:________________________
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