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Exhibit
10.7
AMENDMENT NO. 1 TO NOTE AND
WARRANT PURCHASE AGREEMENT
This Amendment No. 1 to
Note and Warrant Purchase Agreement, effective as of March 30,
2007 (this “ Amendment ”), is entered into by
and among BROOKE CREDIT CORPORATION, a Kansas corporation (the
“ Company ”), FALCON MEZZANINE PARTNERS II, LP,
a Delaware limited partnership, FMP II CO-INVESTMENT, LLC, a
Delaware limited liability company and JZ EQUITY PARTNERS PLC, a
public limited liability company incorporated in England and Wales
under the Companies Act (1985) (collectively, the “
Purchasers ”).
RECITALS
A. The Company and the
Purchasers are parties to that certain Note and Warrant Purchase
Agreement dated as of October 31, 2006 (as amended, restated,
supplemented or otherwise modified and in effect from time to time
hereafter, the “ Purchase Agreement ”), pursuant
to which the Company has sold certain Notes and Warrants to the
Purchasers.
B. The Company has advised
the Purchasers that it and certain of its Affiliates have entered
into the Fifth Third Receivables Financing Agreement (as
hereinafter defined) and certain loan documentation related
thereto.
C. The Company requests that
the Purchasers consent to the Company and its Affiliates entering
into the Fifth Third Receivables Financing Agreement (as
hereinafter defined) and certain loan documentation related
thereto.
D. The Purchasers have agreed
to consent to the Company and its Affiliates entering into the
Fifth Third Receivables Financing Agreement (as hereinafter
defined) and all loan documentation related thereto.
E. In addition to such
consent and as a condition precedent thereto, the Company and the
Purchasers have agreed to amend the Purchase Agreement to the
extent set forth herein and subject to the terms and conditions set
forth in this Amendment.
F. This Amendment shall
constitute a Purchaser Document and these Recitals shall be
construed as part of this Amendment. Capitalized terms used herein
not otherwise defined shall have the meaning assigned to such term
in the Purchase Agreement.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants hereinafter
contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. A new Section 6.17 entitled
“ Fifth Third Reporting Requirements ” shall be
inserted immediately after Section 6.16 entitled “
Refinancing of Indebtedness for Borrowed Money ,” as
follows:
“Section 6.17 Fifth
Third Reporting Requirements . Notwithstanding any
provision
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herein to the contrary (including but
not limited to Section 6.1(j) and Section 6.11 hereof),
the Company shall direct the Fifth Third Servicer to add the
Purchasers to the appropriate distribution list for all reports
provided to Fifth Third Bank as the lender, as required under the
Fifth Third Receivables Financing Agreement, and, simultaneously as
delivered to Fifth Third Bank as the lender under the Fifth Third
Receivables Financing Agreement, to furnish to the Purchasers all
such reports and notices required thereunder, including but not
limited to:
(a) on each Fifth Third
Determination Date, (i) a Fifth Third Servicer’s
Certificate as of the last Business Day of the preceding Fifth
Third Settlement Period and (ii) a completed and executed
Fifth Third Borrowing Base Certificate calculated as of the end of
the immediately preceding Fifth Third Settlement Period;
(b) promptly after Company
obtains knowledge thereof, notice of any default under the Fifth
Third Servicing Agreement;
(c) during the Fifth Third
Revolving Period, as soon as reasonably possible after (and in any
event no later than two (2) Business Days after receipt of)
notice that the Company has permanently stopped selling loans to
Brooke Warehouse Funding, LLC pursuant to the Fifth Third Purchase
and Sale Agreement;
(d) during the Fifth Third
Revolving Period, as soon as reasonably possible after (and in any
event no later than two (2) Business Days after receipt of)
notice that Brooke Warehouse Funding, LLC has permanently stopped
transferring any of the Fifth Third Senior Participation Interest
to Brooke Acceptance Company 2007-1 LLC pursuant to the Fifth Third
Participation Agreement;
(e) promptly after receipt
thereof, copies of all notices received by Brooke Acceptance
Corporation 2007-1, as the borrower from the Fifth Third Servicer
under the Fifth Third Servicing Agreement; and
(f) prompt written notice of
the issuance by any court or governmental agency or authority of
any injunction, order, decision or other restraint prohibiting, or
having the effect of prohibiting, the making of the advances under
the Fifth Third Warehouse Line, or invalidating, or having the
effect of invalidating, any provision thereof, or any other related
document, or the initiation of any litigation or similar proceeding
seeking any such injunction, order, decision or other
restraint.”
2. In Section 7.2 entitled
“Indebtedness,” the text of clause (b) is hereby
replaced with “[reserved]”.
3. Section 7.7 entitled
“Certain Amendments of Senior Debt Documents and Other
Transaction Documents” is hereby amended and restated to read
as follows:
“Section 7.7 Certain
Amendments of Senior Debt Documents and Other Transaction
Documents . The Company will not, and will not permit any of
its Subsidiaries to (a) amend, modify or alter, or permit to
be amended, modified or altered (i) any of the Senior
Debt
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Documents, the Senior Debt or any
component of Non Recourse Indebtedness (in a refinancing thereof or
otherwise), or (ii) any of the other Transaction Documents or
(b) incur any additional Senior Debt or any additional
component of Non Recourse Indebtedness, if, in either case, such
amendment, modification, alteration or incurrence would, in any
way, materially and adversely affect the Purchasers; provided,
however, notwithstanding any provision herein to the contrary
(1) no Warehouse Line of Credit shall be refinanced nor shall
the terms thereof, together with any related Senior Debt Document
be modified, altered or supplemented to increase the amount of
credit available, (2) no Senior Debt which is not currently
cross-defaulted or cross-collateralized with other Senior Debt may
be amended, modified, supplemented or refinanced to permit such
Senior Debt to be cross-defaulted or cross-collateralized with any
other Senior Debt, and (3) no Indebtedness constituting a
component of Non-Recourse Indebtedness which is not currently
cross-defaulted or cross-collateralized with other components of
Total Indebtedness shall be incurred if it is cross-defaulted or
cross-collateralized with any other component of Total
Indebtedness. For purposes of clarity, a component of Total
Indebtedness shall be deemed cross-defaulted with another component
of Total Indebtedness if it contains a general insolvency default,
including a provision that relates to an inability to pay debts as
they come due or any similar clause.
4. Exhibit B to the Note and Warrant
Purchase Agreement entitled “Definitions” is hereby
amended by the insertion of the following new and/or amended and
restated definitions:
“ Fifth Third
Receivables Financing Agreement ” shall mean that certain
Amended and Restated Receivables Financing Agreement dated as of
March 30, 2007, among Brooke Acceptance Company 2007-1 LLC, as
the borrower, Brooke Warehouse Funding, LLC, as the original
borrower, purchaser and transferor, Brooke Credit Corporation, as
the seller and the Fifth Third Subservicer, and Fifth Third Bank,
as the lender, as the same may be amended, restated, modified or
supplemented from time to time.
“ Fifth Third
Warehouse Line ” shall mean that certain Warehouse Line
of Credit as documented by the Fifth Third Receivables Financing
Agreement and its related loan documentation.
“ Fifth Third
Amortization Commencement Date ” shall mean the earlier
to occur of (i) the maturity date and (ii) the occurrence
of an event of default under the Fifth Third Receivables Financing
Agreement.
“ Fifth Third
Borrowing Base Certificate ” shall mean a certificate in
substantially the form required under the Fifth Third Receivables
Financing Agreement, duly completed and certified by an officer of
each of Brook Acceptance Company 2007-1 LLC, as the borrower
an
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