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Exhibit
10.1
AMENDMENT
Dated as of June 19,
2008
to
AMENDED AND RESTATED CREDIT
AND SECURITY AGREEMENT
Dated as of August 29,
2006
THIS AMENDMENT (this “
Amendment ”) dated as of June 19, 2008 is entered
into by and among BROOKE CREDIT FUNDING, LLC, a Delaware limited
liability company (the “ Borrower ”), ALERITAS
CAPITAL CORP., a Delaware corporation (formerly known as Brooke
Credit Corporation) (“ BCC ”), BROOKE
CORPORATION, a Kansas corporation (“ Brooke
Corporation ”), AUTOBAHN FUNDING COMPANY LLC, a Delaware
limited liability company (the “ Lender ”), and
DZ BANK AG DEUTSCHE ZENTRAL-GENOSSENSCHAFTSBANK (the “
Agent ”).
PRELIMINARY
STATEMENTS
A. Reference is made to the
Amended and Restated Credit and Security Agreement dated as of
August 29, 2006 among the Borrower, BCC, Brooke Corporation,
the Lender and the Agent (as amended or otherwise modified prior to
the date hereof, the “ Credit Agreement ”).
Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Credit Agreement.
B. The parties hereto have
agreed to amend the Credit Agreement on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in
consideration of the premises set forth above, and other good and
valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Amendments to
the Credit Agreement . Effective as of the Effective Date (as
defined in Section 3 below), the Credit Agreement is amended
as follows:
1.1 The following definitions
are added to Section 1.01 of the Credit Agreement in
appropriate alphabetical order:
“ BASC Security
Agreement ” means the Security Agreement dated as of
June 19, 2008 executed by the Master Agent in favor of the
Agent, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
“ BASC
Collateral ” means the “Collateral” as
defined in the BASC Security Agreement.
“ Brooke Capital
” means Brooke Capital Corporation, a Kansas
corporation.
“ Brooke Capital
Collateral ” means, collectively, the
“Collateral” as defined in the Brooke Capital Guaranty
together with the “Collateral” as defined in the Brooke
Capital Stock Pledge.
“ Brooke Capital
Guaranty ” means the Guaranty and Security Agreement
dated as of June 19, 2008 executed by Brooke Capital in favor
of the Agent and the Lender, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
“ Brooke Capital
Stock Pledge ” means the Pledge Agreement dated as of
June 19, 2008 executed by Brooke Capital in favor of the Agent
and the Lender providing for a pledge of the capital stock of
Brooke Investments, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
“ Brooke Franchise
Agreement ” means any franchise agreement or other
instrument, document, agreement or arrangement pursuant to which a
franchisee pays, or agrees to pay, fees or other amounts to or for
the benefit of Brooke Capital, Brooke Investments, the Master Agent
or any of their respective Affiliates, including, without
limitation, any Existing Franchise Agreement.
“ Brooke
Investments ” means Brooke Investments, Inc., a Kansas
corporation.
“ Brooke Investments
Collateral ” means the “Collateral” as
defined in the Brooke Investments Guaranty.
“ Brooke Investments
Guaranty ” means the Guaranty and Security Agreement
dated as of June 19, 2008 executed by Brooke Investments in
favor of the Agent and the Lender, as the same may be amended,
restated, supplemented or otherwise modified from time to
time.
“ Existing Brooke
Franchise Agreement ” means a Brooke Franchise Agreement
in existence as of the date hereof.
“ Permitted
Columbian Bank Lien ” means the security interest of
Columbian Bank and Trust Company on the accounts receivable of
Brooke Capital securing debt of Brooke Capital in an aggregate
principal amount of not more than $7,500,000 pursuant to the
promissory note dated as of January 15, 2008 as in effect on
the date hereof, a copy of which has been furnished to the
Agent.
“ Permitted FLAC
Lien ” means the security interest of Brooke Capital
Advisors, Inc. on behalf of participating lenders on shares of
First Life America Corporation, a Kansas-domiciled life insurance
company, securing debt of Brooke Capital in an aggregate principal
amount of not more than $12,382,000 pursuant to the Commercial Loan
Agreement, dated as of December 31, 2007, as in effect on the
date hereof, a copy of which has been furnished to the
Agent.
“ Permitted Whitaker
Lien ” means the security interest of Manuel Whitaker
pursuant to that certain settlement agreement between Manuel
Whitaker and Brooke Capital securing debt of Brooke Capital in an
aggregate principal amount of $884,051.14, of which $442,025.56 is
remaining to be paid in two equal installments of $221,012.78 on
July 1, 2008 and October 1, 2008.
“ Purchase
Amount ” has the meaning specified in the Sale and
Servicing Agreement.
“ Specified
Ineligible Loan ” means a Loan specified on Schedule
V.
“ Specified
Ineligible Loan Installment Payment ” has the meaning
specified in Section 8.04
“ Specified
Ineligible Loan Repurchase Amount ” means, on any date,
an amount equal to (i) the aggregate Outstanding Principal
Balance of the Specified Ineligible Loans as of such date
(determined without giving effect to any write-off with respect to
any such Loan), plus (ii) the accrued and unpaid interest on
the Specified Ineligible Loans, minus (iii) the amount of all
Specified Ineligible Loan Installment Payments that have been paid
by the Seller and the Parent in accordance with Section 8.04
prior to such date.
“ Subordinated
Debt ” means, with respect to any Person, Indebtedness of
such Person and its Subsidiaries which (i) matures after the
Scheduled Program Maturity Date and (ii) has been subordinated
to the payment of the obligations of the Parent and BCC under the
Related Documents, as evidenced by a written subordination
agreement in form and substance satisfactory to the
Agent.
“ Tangible Net
Worth ” means, at any date with respect to any Person,
(a) the net worth of such Person and its consolidated
Subsidiaries, determined in accordance with GAAP, minus
(b) the total book value of all intangible assets of such
Person and its consolidated Subsidiaries determined in accordance
with GAAP (including, without limitation, such items as goodwill,
trademarks, trade names, service marks, brand names, copyrights,
patents and licenses), plus (c) to the extent not otherwise
included in clause (a), the principal amount of such Person’s
Subordinated Debt then outstanding; provided that no
Indebtedness of, investment in or receivable owing by any Affiliate
of such Person shall be included in the calculation of Tangible Net
Worth.
1.2 The definition of
“BCC” in Section 1.01 of the Credit Agreement is
amended in its entirety to read as follows:
“ BCC ”
means Aleritas Capital Corp., a Delaware corporation (f/k/a Brooke
Credit Corporation).
1.3 The definition of
“Brooke Party” in Section 1.01 of the Credit
Agreement is amended in its entirety to read as follows:
“ Brooke Party
” means BCC, the Parent, the Master Agent, Brooke Capital,
Brooke Investments and the Borrower (in each case acting in any
capacity in connection with the Related Documents).
1.4 The definition of
“Key Employee” in Section 1.01 of the Credit
Agreement is amended in its entirety to read as follows:
“ Key Employees
” means Rob Orr and Michael Hess; provided that if any
such Person is replaced by a successor that has been approved in
writing by the Agent, then such successor shall be deemed to be a
Key Employee and the replaced Person shall cease to be a Key
Employee.
1.5 The definition of
“Program Deficiency” in Section 1.01 of the Credit
Agreement is amended to add the following proviso at the end of
such definition immediately before the period:
“; provided
that, solely for purposes of determining whether a Program
Deficiency exists at any time, a Specified Ineligible Loan may be
treated as an Eligible Loan if (and only if) such Loan is not a
Defaulted Loan and satisfies all of the criteria set forth in the
definition of Eligible Loan other than items identified by the
Agent prior to June 19, 2008 as being deficiencies with
respect to such Loan.”
1.6 The definition of
“Program Maturity Date” in Section 1.01 of the
Credit Agreement is amended in its entirety to read as
follows:
“ Program Maturity
Date ” means the earlier of (a) the Scheduled
Program Maturity Date and (b) the date of the declaration or
automatic occurrence of the Program Maturity Date pursuant to
Article VI.
1.7 The definition of
“Related Documents” in Section 1.01 of the Credit
Agreement is amended to add the following immediately after the
term “each Hedge Agreement”:
“, the BASC Security
Agreement, the Brooke Capital Guaranty, the Brooke Capital Stock
Pledge, the Brooke Investments Guaranty”.
1.8 The definition of
“Scheduled Program Maturity Date” in Section 1.01
of the Credit Agreement is amended in its entirety to read as
follows:
“ Scheduled Program
Maturity Date ” means August 27, 2010.
1.9 The definition of
“Termination Date” in Section 1.01 of the Credit
Agreement is amended in its entirety to read as follows:
“ Termination
Date ” means June 19, 2008. The parties acknowledge
and agree that the Termination Date has already occurred hereunder.
Accordingly, no further Advances will be made by the Lender
hereunder and all Collections on the Collateral will be applied to
the payment of the Obligations in accordance with Section 2.05
of this Agreement. Until the Obligations are paid in full, no
Brooke Party shall be entitled to receive any Collections or other
proceeds of the Collateral.
1.10 Section 2.07 of the
Credit Agreement is amended to add the following new subsection
(e) immediately after subsection (d):
“(e) The Borrower
hereby agrees to repay the Advances as follows:
(i) by no later than
December 31, 2008, the Borrower shall repay the Advances in an
amount sufficient to cause the aggregate outstanding principal
amount of the Advances to be equal to or less than
$30,000,000;
(ii) by no later than
June 30, 2009, the Borrower shall repay the Advances in an
amount sufficient to cause the aggregate outstanding principal
amount of the Advances to be equal to or less than $20,000,000;
and
(iii) on the Program Maturity
Date, the Borrower shall repay the Advances in full and shall pay
all other Obligations then outstanding.
For the avoidance of doubt,
it is understood and agreed that the failure of the Borrower to
make any payment required to be made by it pursuant to this
Section 2.07(e) shall constitute an Event of Default, whether
or not Collections were available to make such payment pursuant to
Section 2.05.”
1.11 Section 2.08(a) of
the Credit Agreement is amended in its entirety to read as
follows:
“(a) The Borrower shall
pay the Agent the fees set forth in the Fee Letter in the amounts
and on the dates set forth therein.”
1.12 Section 2.16 of the
Credit Agreement is deleted in its entirety.
1.13 Section 4.01(h) of
the Credit Agreement is amended to delete the first sentence
thereof and to substitute the following therefor:
“The chief executive
office of such Brooke Party is located at 7400 College Blvd., Ste.
250, Overland Park, Kansas 66210.”
1.14 Section 4.01 of the
Credit Agreement is amended to add the following new subsections
immediately after subsection (cc):
“(dd) Brooke
Franchise Agreements . All Brooke Franchise Agreements are
owned by Brooke Capital, Brooke Investments or the Managing Agent
free and clear of any Adverse Claims (other than the Permitted
Columbian Bank Lien and the P
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