Exhibit 6.07
AGREEMENT FOR ADVANCEMENT OF LOAN
WHEREAS, Brooke Credit Corporation ("lender") has agreed to loan G.I. Agency,
Inc. ("borrower") the amount of $70,000.00 for the purpose of acquiring Brooke
Financial Services of Granden City, Kansas for a total purchase price of
$331,200.00. Lender has further agreed to make a line of credit loan of up to
$75,000.00 for financing business operations. Any loan to a corporation shall be
personally guaranteed by _____________ and all reference hereinafter to Borrower
shall also be applicable to said individuals. The lender's agreement to extend
credit is subject to the following terms and conditions.
1. Borrower shall execute a separate promissory note in the amount of
$70,000,00. Disbursement of said promissory note proceeds shall occur on the
closing dates set forth in the Agreement for Sale of Insurance Agency Assets
executed contemporaneously herewith. Said promissory note shall provide for
120(number) equal monthly payments in the approximate amount of $964.25 and
shall mature 12/1/98. Said promissory note shall also provide for an interest
rate that:
/X/ is fixed at the rate of 11% per annum.
/ / varies annually on December 31st of each year at a rate 3.5% above the
New York Prime rate as Published in the Wall street Journal.
2. Borrower shall execute a separate security agreement which provides for a
purchase money security interest in the acquired insurance agency and all
related assets. Additionally, said security agreement shall provide for a first
and prior security interest in the insurance agency and all related assets now
owned by G.I. Agency, Inc.
3. Borrower shall execute a separate UCC-1 financing statement form which
perfects lenders security interest in the assets referenced above.
4. In the event the borrower defaults on the promissory note or security
agreement referenced above, then the borrower further agrees to the following:
(A) Borrower agrees that lender's written notice of default constitutes
"good and sufficient cause" for termination by Brooke Corporation of a
Franchise Agreement dated 9/4/97 between the borrower and Brooke
Corporation.
(B) Effective upon receipt by borrower of lender's written notice of
default, borrower shall assign to lender any and all amounts owed to
borrower by Brooke Corporation whether for sales commissions, net
premiums or from any other source.
(C) Borrower agrees that all receipts from collection of borrower's
customer account receivables shall be deposited to a deposit account
which is owned and controlled by Brooke Corporation and that, effective
upon receipt by borrower of lender's written notice of default,
borrower authorizes Brooke Corporation to pay any such customer account
receivables to the leader if requested by the lender.
(D) Effective upon receipt by borrower of lender's written notice of
default, borrower assigns to lender any and all ownership of borrower's
customer accounts and authorizes Brooke Corporation to transfer
ownership of borrower's customer accounts to lender.
(E) Effective upon receipt by borrower of lender's written notice of
default, borrower authorizes Brooke Corporation to divulge to lender or
to those designated by lender any information requested by lender,
whether confidential or otherwise.
(F) Effective upon receipt by borrower of lender's written notice of
default and continuing for a period of three (3) years thereafter, the
borrower agrees that Borrower will not solicit any insurance business
from clients who were clients of Brooke Financial Services of Garden
City, Kansas.
(G) Effective upon receipt by borrower of lender's written notice,
borrower agrees to enforce, for the continued benefit of lender, all
non solicitation agreements or non compete agreements currently in
force between borrower and its officers, directors, partners,
independent contractors and employees.
(H) Effective upon receipt by borrower of lender's written notice of
default, borrower shall cooperate with lender in transferring ownership
of all of borrower's customer accounts and policies to lender.
Furthermore, borrower shall cause, to the extent reasonably possible,
borrower's officers, directors, partners, independent contractors and
employees to cooperate with lender in transferring ownership of all of
borrower's customer accounts and policies to lender.
(I) Effective upon receipt by borrower of lender's written notice of
default, the borrower shall assign to lender all of borrower's rights
to the telephone numbers used to serve borrower's customers, if
requested by lender.
(J) Effective upon receipt by borrower of lender's written notice of
default, the borrower shall assign to lender all of borrower's rights
to the lease of office space used to serve borrower's customers, if
requested by lender.
(K) Effective upon receipt by borrower of lender's written notice of
default, the borrower shall assign to lender all of borrower's rights
to the lease of a post office box or other mailing address used to
serve borrower's customers, if requested by lender.
(L) Within seven days of receipt by borrower of lender's written notice
of default, borrower shall deliver to lender all of borrower's customer
files and customer records.
5. Borrower and lender agree that the borrower shall be in default on the
security agreement executed by borrowers in connection with said loan if total
annual insurance commissions generated by the secured insurance agency assets
for the most recent calendar year decrease to 80% or less of the principal
balance of the promissory note secured by said assets.
6. The borrower acknowledge that Brooke Corporation is lender's parent company
and that the lender shall provide to Brooke Corporation a copy of all loan and
security agreements executed by borrower in connection with said loan.
7. Borrower hold Brooke Corporation harmless for any breach of the terms of said
Franchise Agreement by Brooke Corporation which may result from actions taken by
Brooke Corporation that are authorized by these Loan Agreements.
8. Notices which may be required to be sent by lender to the borrower in
accordance with these agreements shall be sufficient if in writing and if sent
by registered mail to borrower's residence.
Lender's Address: Borrower's Business Address:
Brooke Credit Corporation G.I. Agency, Inc.
000 X Xxxxxx, X.X. Xxx 000 000 X Xxxxxx, X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000 Xxxxxxxxxxxx, XX 00000
The undersigned agree to the foregoing and acknowledge receipt of a copy of this
agreement on this the 1st day of December, 1997.
Brooke Credit Corporation
by: /s/ Xxxxxx X. Xxx
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/s/ Xxxxx X. Xxxx /s/ Xxxxxxx Xxxx
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Borrower Borrower
ACCEPTANCE OF INDIVIDUAL RESPONSIBILITY AND PERSONAL GUARANTEE
If the Borrower is a corporation, the undersigned hereby personally guaranty all
responsibilities of Borrower under and by virtue of this agreement.
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NOTICE TO BORROWER: This written agreement is the final expression of the
agreement between you and the Lender, and as such it may not be contradicted by
evidence of any prior oral agreement or of a contemporaneous oral agreement
between you and the Lender.
ADDITIONAL TERMS: None
AFFIRMATION: By signing here, Borrower and Lender affirm that no unwritten oral
agreement between them exists.
Brooke Credit Corporation
by: /s/ Xxxxxx X. Xxx
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/s/ Xxxxx X. Xxxx /s/ Xxxxxxx Xxxx
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Borrower, Secretary Borrower
